Canada (EN)
Retirement plan trading slowed in the third quarter as markets delivered mixed results. The S&P 500 gained 2.3% during Q3, while the Russell 2000 fell 7.2% and the Bloomberg U.S. Aggregate Index declined 3.5%. The Federal Reserve also raised interest rates by 0.25 percentage point in September. Despite this backdrop, 401(k) participants made few changes to their portfolios. Net transfers were 0.18% of starting balances, less than half the second-quarter level of 0.40% and the lowest quarterly rate in at least three years. Q3 included just four above-normal1 trading days, according to the Alight Solutions 401(k) Index™, compared with 10 in Q2. Participant transfers favored fixed income, with bond funds receiving 47% of inflows, followed by stable value and money market funds at 20% each. Outflows were led by large U.S. equity funds (46%) and target date funds2 (24%). Company stock played a much smaller role than last quarter, at 9% of outflows compared with 56% in Q2. The preference for fixed income grew as the quarter progressed, rising from 50% of trading days in July to 81% in September. However, overall activity stayed low, pointing to modest rebalancing rather than a broad retreat from equities. | ||
Third quarter observations: | ||
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Asset classes with most trading inflows in Q3 2026 | Percentage of inflows | Index dollar value ($mil) |
| Bond funds | 47% | $262 |
| Stable value funds | 20% | $111 |
| Money market | 20% | $111 |
Asset classes with most trading outflows in Q3 2026 | Percentage of outflows | Index dollar value ($mil) |
Large U.S. equity funds | 46% | $257 |
Target date funds2 | 24% | $134 |
Returns for common indices | Q3 2026 | 2026 YTD |
Bloomberg Barclays U.S. Aggregate Bond Index | -3.51% | -2.91% |
S&P 500 Index | 2.30% | 12.75% |
Russell 2000 Index | -7.23% | 13.71% |
MSCI All Country World ex-U.S. Index (net) | 0.48% | 14.22% |
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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