• Participants continued to react to the strong performance within the international and emerging market equity asset classes in October and moved a combined $295 million into these two asset classes, according to the results of the Hewitt 401(k) Index™. These movements represented nearly 66% of the total net transfers in October.


• Both international and emerging markets had very strong returns in October: the MSCI EAFE Index (international) gained nearly 4% and the MSCI Emerging Markets Free Index had an enormous return of 11%. As a result, we saw nearly $240 million moved to international funds and $55 million to emerging markets funds. In fact, international funds have received net inflows during eight out of ten months in 2007, with a total of $1.1 billion transferring in year-to-date. Emerging markets had more volatile performance. The asset class had a few months of net outflows during the beginning of the year, but still received over $103 million in total by October.


• Due to both net inflows and market returns, the asset allocation to international equities rose from 8.2% at the beginning of the year to 10.0% by the end of October. Emerging markets allocation also increased from 0.9% to 1.6% during the same period.


• Lifestyle funds also continued to receive strong inflows, with $91 million moving in during October. So far this year, nearly $300 million has transferred into this asset class.


• As a result of the large international inflows, participant net transfer activity was primarily equity oriented on 57% of days during the month and $264 million moved into diversified equities. At the same time, stable value funds experienced the largest outflows of nearly $158 million.


• The net transfer activity in October was modest, with an average of 0.04% of balances transferred on a daily basis. Three days of the month experienced above normal* transfer activity, which is the lowest number of above-normal days since June.


• The overall equity allocation in Hewitt 401(k) index increased slightly by 0.3% to 68.1% at the end of October, due to both equity-oriented transfers and positive stock market returns.


• Participant discretionary equity contribution also rose just slightly from 68.6% at the end of September to 68.9% at the end of October.

*A "normal" level of relative transfer activity is when the net daily movement of participants' balances as a percent of total 401(k) balances within the Hewitt 401(k) Index equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A "high" relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A "moderate" relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.

The following tables show Hewitt 401(k) Index statistics and the returns of major market indices for the month of October 2007: