Northern Trust Universe Data: Positive Returns Continue for Institutional Plan Sponsors

Positive investment returns continued for institutional plan sponsors in the second quarter of 2019 following a rebound in the first quarter, according to Northern Trust Universe data released today. The median plan in the Northern Trust Universe finished with a 3.1 percent return in the quarter ending June 30, 2019.

The Northern Trust Universe tracks the performance of approximately 300 large U.S. institutional investment plans, with a combined asset value of approximately $1.08 trillion, who subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.

"Despite some volatility, solid performance across equity and bond markets drove positive results for institutional plan sponsors in the second quarter," said Mark Bovier, regional head of Investment Risk and Analytical Services at Northern Trust. "U.S. stocks sold off sharply in May but ended the quarter close to all-time highs, and the median U.S. equity program in the Northern Trust Universe had a 4.1 percent return for the quarter. The median international equity program return was 3.0 percent, and bond markets contributed as well, with the median U.S. fixed income program up 2.9 percent for the quarter."

Of the three institutional segments tracked by Northern Trust, Corporate ERISA pension plans reported a median return of 3.2 percent, while Public Funds had a median return of 3.1 percent and Foundations and Endowments produced a 2.7 percent median return in the second quarter.

Corporate ERISA plans have the largest bond allocations in the Northern Trust Universe with a median plan exposure to U.S. fixed income of 39.2 percent. The median plan's U.S. equity allocation for the current quarter was 27.5 percent, down from 28.2 percent in the first quarter of 2019, while international equity exposure was 8.7 percent at the median.

Public Funds have the largest equity allocations of any Universe segment with a median U.S. equity allocation of 33.9 percent and median international equity allocation of 15.3 percent in the second quarter. The median Public Fund exposure to U.S. fixed income was 24.5 percent in the quarter.

Foundation and Endowment plan returns lagged the other two segments in part due to a heavier exposure to alternative assets such as private equity and hedge funds which returned 0.5% and 0.8% respectively for the quarter. Alternative assets are widely used in the F&E segment, with, private equity and hedge fund median allocations of 12.9 percent and 12.7 percent, respectively, in the second quarter. The median F&E plan allocation to U.S. equity was 24.6 percent while international equity median exposure was 10.5 percent and U.S. fixed income was 10.6 percent in the period.

Longer-term returns in the Northern Trust Universe as of June 30, 2019 are:

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 a global presence with offices in 20 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2019, Northern Trust had assets under custody/administration of US$11.3 trillion, and assets under management of US$1.2 trillion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Please visit our website or follow us on Twitter.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Please read our global and regulatory information.

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