It’s no secret that many investors pulled their money out of the plunging stock market last year. A total of $6.3 billion was moved out of equity investments within 401(k)s during 2008.
International funds were the biggest losers in 2008, with $1.9 billion shifting out of this asset class, according to the Hewitt 401(k) Index, which tracks the transfer activity of about 1.5 million 401(k) plan participants with approximately $90 billion in collective assets. Large U.S. equities weren’t far behind with an outflow of $1.7 billion, the largest movement since the beginning of the index. Both balanced and lifestyle funds had large declines as well. Investors transferred out approximately $1 billion and $529 million respectively.
As expected, somewhat safer asset classes received the largest inflows last year. GIC/stable value funds grew by $5.3 billion during 2008, bond funds received $1.2 billion, and money market funds saw $459 million transferred in.