Institutional plan sponsors saw investment performance rebound to positive territory in the second quarter of 2018, according to Northern Trust Universe data released today. The median gain of 0.9 percent for institutional asset owners followed the first negative quarter for the Universe in more than two years.
The Northern Trust Universe tracks the performance of approximately 300 large U.S. institutional investment plans, with a combined asset value of approximately $985 billion, which subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.
"Equity markets snapped back in the second quarter, driving overall performance for institutional plans," said Mark Bovier, regional head of Investment Risk and Analytical Services at Northern Trust. "Stocks are a core holding for most plans, and publicly-traded equity programs returned about 3.9 percent at the median in the second quarter, up from negative 0.3 percent in the prior quarter. Private equity, real estate and hedge funds also contributed to quarterly gains for plans in the Universe."
Foundations & Endowments had the strongest performance in the second quarter, with the median F&E plan in the Northern Trust Universe gaining 1.2 percent in the quarter. The median Public Fund gained 1.1 percent in the second quarter, while the median Corporate ERISA plan edged up 0.3 percent.
"F&E plans were buoyed by large allocations to alternative assets, as the median private equity program gained 2.8 percent in the second quarter, while real estate and hedge funds were up a more modest 1.9 percent and 1.0 percent respectively," said Bill Frieske, senior investment performance consultant, Investment Risk and Analytical Services. "Public Funds tend to have the largest allocation to domestic equities, which helped in the second quarter. ERISA results were weighed down by their larger allocation to fixed income, particularly longer-duration bonds, which had a negative quarter."
Longer-term returns in the Northern Trust Universe as of June 30, 2018 are:
|
1 Yr |
3 Yr |
|
5 Yr |
|||||||||
| ERISA | 6.3% | 6.8% | 7.9% | |||||||||
| Public Funds | 8.5% | 7.1% | 8.4% | |||||||||
| Foundations & Endowments | 8.7% | 6.7% | 7.8% | |||||||||
About Northern Trust
Northern Trust Corporation NTRS is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 23 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2018, Northern Trust had assets under custody/administration of US$10.7 trillion, and assets under management of US$1.1 trillion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/disclosures.
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