Northern Trust Universe Data: Solid Gains for Institutional Plans in Q1 as Global Equity Markets Surge

Global equity markets rallied to record levels during the first quarter of 2024, on expectations of a "soft landing" and interest rate cuts later in the year. The median return for institutional asset owners included in the Northern Trust All Funds Over $100 million plan universe was 3.7% for the quarter ending March 31, 2024.

The Northern Trust Universe tracks the performance of 405 large U.S. institutional investment plans, with a combined asset value of more than $1.4 trillion, which subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.

The Northern Trust Foundation and Endowment (F&E) universe produced a 3.9% median return while the Northern Trust Public Funds universe median return was up 3.5% and the Northern Trust Corporate (ERISA) universe median return was up 1.2% for the quarter.

"The year started strong as global equity markets surged to new highs, showing investors were willing to take on added risk during the quarter,” said John Turney, Global Head of Total Portfolio Solutions. “Gains from equities were partially offset in most institutional portfolios by allocations to fixed income, where rising yields led to negative returns and indicated caution about the future direction of interest rates.”

The Northern Trust U.S. Equity Program universe produced a 9.6% median return for the first quarter. Large cap stocks outperformed small cap stocks, with the Russell 2000 small cap index returning 5.2%, compared to the Russell 1000 large cap index which returned 10.3% for the period.

The Northern Trust U.S. Fixed Income program universe median return was down -0.2% for the quarter. The US Ten-Year Government Bond yield rose from 3.88% to 4.21% during the quarter and the two-year government bond yield rose 78 basis points to 4.59%.

Foundations & Endowments universe median one-, three- and five-year returns were 12.3%, 5.0% and 8.6%, respectively. The median allocation to private equity was 22.9%, a slight decline from the prior quarter, resulting from strong returns in the equity asset class. The median allocation to hedge funds was 9.0%.

Public Funds universe median returns for the one-, three- and five-year periods stood at 10.4%, 4.6% and 7.5%, respectively. The median allocation to U.S. and international equity were 27.6% and 12.7%, respectively, while the median exposure to U.S. fixed income held steady at 22.2% while strong performance in equities lowered the segment’s median private equity allocation to 11.5%.

ERISA plan universe median one-, three- and five-years returns were 6.3%, -0.1% and 4.7%, respectively. The segment’s large median allocation to the US fixed Income asset class (56.2%) resulted in underperformance relative to other client segments. ERISA clients continue to have small allocations to alternative assets, where the median allocation to private equity is 2.7%.

Results as of March 31, 2024:

About Northern Trust

Northern Trust Corporation (Nasdaq: 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 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2024, Northern Trust had assets under custody/administration of US$16.5 trillion, and assets under management of US$1.5 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on X (formerly Twitter) @NorthernTrust or Northern Trust Corporation on LinkedIn.

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/terms-and-conditions.

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