Canada (EN)
Markets remained strong in May, but 401(k) plan participants were clearly being cautious about their retirement investments. Trading activity increased modestly, with 0.16% of assets transferred, and 16 of 20 trading days favored fixed income as participants locked in gains and continued rotating out of U.S. equities.
Flows reflected this defensive tilt, with inflows to bond funds, emerging markets and stable value, while large U.S. equity and company stock saw the most outflows. Despite this shift, overall portfolios remained equity heavy. Average allocations rose to 74.2%, with 71% of contributions going to equities, highlighting a gap between short-term trading behavior and long-term positioning.
May observations: |
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The Alight Solutions 401(k) Index statistics for the month of May: |
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Inflows and outflows during the month of May:
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Asset classes with most trading inflows in May | Percentage of inflows | Index dollar value ($mil) |
| Bond funds | 60% | $290 |
| Emerging markets | 15% | $74 |
| Stable value | 12% | $57 |
Asset classes with most trading outflows in May | Percentage of outflows | Index dollar value ($mil) |
| Large U.S. equity | 49% | $236 |
| Company stock | 28% | $134 |
| Small U.S. equity | 8% | $39 |
May investment portfolios:
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Asset classes with largest percentage of total balance at the end of May | Percentage of balance | Index dollar value ($mil) |
Target date funds2 | 31% | $97,107 |
Large U.S. equity funds | 30% | $93,415 |
Company stock funds | 8% | $25,697 |
Asset classes with most contributions in May | Percentage of contributions | Index dollar value($mil) |
Target date funds2 | 50% | $623 |
Large U.S. equity funds | 23% | $291 |
International equity funds | 7% | $90 |
Returns for common indices | May | 2026 YTD |
Bloomberg Barclays U.S. Aggregate Index | 0.31% | 0.38% |
S&P 500 Index | 5.26% | 11.27% |
Russell 2000 Index | 4.37% | 18.15% |
MSCI All Country World ex-U.S. Index (net) | 5.03% | 14.36% |
1 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 Alight Solutions 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 2 times the average daily net activity of the preceding 12 months.
2 Target date funds also include the amounts in target risk funds. The amount in the target risk funds is less than 10% of the total.
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