Data from the Northern Trust Universe: Soaring inflation brought volatility back to the market in the first quarter

CHICAGO–(BUSINESS WIRE)–Volatility returned to markets in the first quarter of 2022, led by inflation hitting a 40-year high, the US Federal Reserve announcing interest rate hikes and Russia invading Ukraine. The median return for owners of institutional assets included in the Northern Trust All Funds Over $100 million plan universe was -4.4% for the quarter ending March 31, 2022, as global stock markets sold off during the quarter and bond prices fell.

The Northern Trust Universe tracks the performance of 376 large US institutional investment plans, with a combined asset value of over $1.3 trillion, that subscribe to performance measurement services as part of the offerings. of Northern Trust’s asset services.

The median return of the Northern Trust Corporate Universe (ERISA) for the quarter was -6.9%. The Northern Trust Foundation and Endowment (F&E) universe generated a median return of -4.0% for the quarter, while the Northern Trust Public Funds universe generated a median return of -3.4% during the quarter .

“Geopolitical concerns related to Russia’s invasion of Ukraine weighed heavily on international markets during the first quarter,” said Amy Garrigues, global head of investment risk and analytical services at Northern Trust. “Commodity prices such as oil, natural gas, wheat and corn soared as concerns over supply chain disruptions became a focus for investors. The strengthening dollar US contributed to lower returns for US investors overseas and was more pronounced for emerging markets.

The median return for the universe of Northern Trust’s US equity program fell 6.0% for the quarter. The large-cap S&P 500 index was down 4.6% for the three-month period. Large cap stocks continued to outperform small cap stocks. The Russell 1000 Large Cap Index returned -5.1% compared to the Russell 2000 Small Cap Index which returned -7.5% for the period.

The median one-, three-, and five-year ERISA plan returns were 1.6%, 8.7%, and 7.9%, respectively. The US bond asset class remains the largest allocation in the ERISA plans with a median allocation of 45.7% and rose over the period due to declining equity valuations. The median allocation to US equities was 23.2%.

The median multi-period returns of the Northern Trust public funds universe for the one-, three- and five-year periods are 6.9%, 10.1% and 9.1%, respectively. Q1 median allocations to US and international equities are 31.0% and 14.6%, respectively, both down due to the sell-off in global equity markets. Median exposure to U.S. fixed income securities for public funds increased by 1.2% to 21.2%, compared to the fourth quarter of 2021.

The median one-, three-, and five-year returns for the Northern Trust Foundations & Endowments universal plan were 7.6%, 11.7%, and 9.9%, respectively. The Foundation and Endowment Plan’s median US equity allocation fell to 20.8% during the quarter. The median allocation to private equity was 20.3%, while the median allocation to US fixed income remained below 10%.

Universe results at US plan level as of March 31, 2022:

4th trimester

1 year

3 years

5 years

ERISA

-6.90%

1.55%

8.68%

7.87%

Public funds

-3.38%

6.86%

10.06%

9.06%

Foundations & Endowments

-3.98%

7.62%

11.68%

9.92%

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to businesses, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 US states and Washington, DC, and 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2022, Northern Trust had assets under custody/administration of US$15.5 trillion and assets under management of US$1.5 trillion. For more than 130 years, Northern Trust has distinguished itself as an industry leader for its 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 USA, incorporated with limited liability in the USA Please read our global and regulatory information.