Institutional plan sponsors saw continued positive investment performance in the third quarter of 2018, according to Northern Trust Universe data released today. The median return of 2.4 percent for institutional asset owners brought year-to-date gains to 3.3 percent at the median.
The Northern Trust Universe tracks the performance of approximately 300 large U.S. institutional investment plans, with a combined asset value of approximately $1.03 trillion, which subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.
“Third-quarter performance rolled along nicely, with solid returns from domestic equities and alternative asset classes driving results for institutional plan sponsors,” said Mark Bovier, regional head of Investment Risk and Analytical Services at Northern Trust. “U.S. equities were up mid-single digits in the quarter while hedge fund investment programs in the Northern Trust Universe returned approximately 8.5 percent at the median. Fixed income programs, a core holding for most institutional investors, gained a more modest 0.4 percent, owing mostly to a rising rate environment.”
Public Funds and Foundations & Endowments each had median returns of 2.4 percent in the third quarter, with different allocations driving performance for the two segments. Corporate ERISA plans lagged behind with a median return of 1.9 percent.
“Public Fund returns were boosted by a larger allocation to domestic equities, while Foundations & Endowments benefited from strong returns from alternatives, the largest holdings in many F&E plans,” said Bill Frieske, senior investment performance consultant, Investment Risk and Analytical Services. “Corporate ERISA plans were hampered by their larger allocation to longer duration fixed income, which is more sensitive to interest rate hikes.”
Longer-term returns as of September 30, 2018 are: | |||||||||
1 Yr | 3 Yr | 5 yr | |||||||
ERISA | 5.2% | 9.0% | 7.4% | ||||||
Public Funds | 7.4% | 10.0% | 7.9% | ||||||
Foundations & Endowments | 7.6% | 9.0% | 7.4% | ||||||
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 23 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2018, Northern Trust had assets under custody/administration of US$10.8 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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