Northern Trust Universe Data: Equities Drive First-Quarter Gains for Plan Sponsors
May 08 2017 - 11:13AM
Business Wire
Institutional plan sponsors netted investment gains of 4.2
percent at the median in the first quarter of 2017, according to
Northern Trust Universe data released today. It was the sixth
consecutive three-month period of gains for institutional asset
owners, with equities providing the bulk of positive performance in
the quarter.
The Northern Trust Universe tracks the performance of
approximately 300 large U.S. institutional investment plans, with a
combined asset value of approximately $897 billion, which subscribe
to performance measurement services as part of Northern Trust's
asset servicing offerings.
“Institutional asset owners continue to experience quarterly
returns that are above long-term averages, supported by rising
equity prices,” said Amy Garrigues, head of Investment Risk and
Analytical Services at Northern Trust. “The 4.2 percent median
return for this year’s first quarter compares to the average median
quarterly return of about 2.8 percent since the end of the
financial crisis in second quarter of 2009. Over 20 years, from
1996 through 2016, the average median quarterly return for asset
owners was 1.8 percent.”
Since the end of the financial crisis, in March 2009, the median
total equity program in the Northern Trust Universe has had an
average annual return of 14.3 percent. In the first quarter, the
median total equity program was up 6.7 percent, while the median
international equity program gained more than 8 percent. Fixed
income, private equity and real estate programs had gains of less
than 2 percent each in the first quarter.
The Public Fund segment had the best median return in the first
quarter of 2017, on a relative basis, gaining 4.3 percent. Close
behind was the Foundations & Endowments segment, up 4.2
percent, while Corporate ERISA plans were up 4.1 percent.
Public Funds benefited from a relatively large allocation to
equities, compared to the other plan types. Public Funds had a
median allocation of almost 56 percent to equities as a whole while
Corporate ERISA plans had an allocation of 45 percent and
Foundations & Endowments had a median allocation closer to 44
percent.
For Foundations & Endowments, the driver of the positive
quarter was a relatively small allocation to fixed income, which
had the weakest returns of any asset class in the quarter.
Allocations to fixed income were about 13.5 percent for F&E
funds at the median, compared to 22 percent for Public Funds and
44.5 percent for Corporate ERISA plans. While Corporate ERISA plans
had the largest allocation to fixed income, they also had the
largest allocation to high yield, emerging market debt and longer
duration investment grade bonds, all of which returned noticeably
more than traditional core bonds.
Longer-term returns as of March 31, 2017 are as follows:
1st Qtr 1 Yr 3 Yr
5 yr ERISA 4.1% 10.0% 5.7% 7.9% Public Funds 4.3% 11.4% 5.6%
8.0% F&E 4.2% 11.1% 5.0% 7.3%
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 offices in the
United States in 19 states and Washington, D.C., and 22
international locations in Canada, Europe, the Middle East and the
Asia-Pacific region. As of March 31, 2017, Northern Trust had
assets under custody of US$7.1 trillion, and assets under
management of US$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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Northern Trust CorporationMedia Contact:John O’Connell+1 312 444
2388John_O'Connell@ntrs.comhttp://www.northerntrust.com
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