• 401(k) participant transfers were low in July despite the stock market rally, according to the results of the Hewitt 401(k) Index™. Only 0.037% of balances were shifted on a net daily basis, which is much lower than the 12-month trailing average of 0.053%. Only one day in July had an above-normal level* of transfer activity.
• The directions of transfers were mixed. Excluding company stock, only $57 million moved from fixed income investments to diversified equities (equity excluding company stock). On the other hand, when taking company stock into consideration, we saw $253 million transferred from equities into fixed income investments. Due to the continued large company stock outflows, 73% of the days in July were fixed income-oriented.
• Although the Barclays Capital Aggregate Bond Index had only a 1.6% return in July, bond funds received the largest inflows — $129 million during the month. GIC/stable value funds and lifestyle funds received $83 million and $72 million, respectively.
• Company stock experienced very large outflows in July, with $310 million moving out of this asset class. Large U.S. equity also lost $33 million in net transfers despite the Dow Jones Industrial Average having the best month since 2002.
• Due to the significant stock market gain in March, participants' overall equity holdings were up 1.7% in July to 55.3%. So far, equity allocation is up 7.5% since its historical low in February — however, this is all due to market movement rather than participant transfer activity.
• Employee-only equity contributions were up slightly from 56.8% at the end of June to 57.6% at the end of July. However, it is only up 1.8% since its lowest point in March.

*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 July 2009:

Dow Jones IA	8.75%
Russell 2000	9.63%
Barclays Capital Aggregate Bond Index	1.61%
S&P 500	7.56%
MSCI EAFE	9.13%
NASDAQ	7.82%

Number of Fixed Income Days	16
Number of Equity Days	6
Percent of Equity Days	27%