Northern Trust Universe Data: Institutional Plans Meet Scattered Gains in Q3

CHICAGO–(COMMERCIAL THREAD) – Sponsors of U.S. institutional plans saw minimal gains in the third quarter of 2021, according to the Northern Trust Universe. The plan’s median return for the third quarter of 2021 was 0.2%, as volatile stock markets hit record highs but ended at the same level for the July-September period.

The Northern Trust Universe tracks the performance of 380 large U.S. institutional investment plans, with a combined asset value of over $ 1.4 trillion, that subscribe to performance measurement services as part of the Northern Trust asset management.

Foundations and endowments produced a median return of 0.9% in the quarter ending September 30, 2021, slightly ahead of public funds, with a median return of 0.4%, and pension plans of ERISA company at 0.0% for the third quarter.

“US equity markets hit record highs in the third quarter, but large gains were wiped out by volatility in September,” said Amy Garrigues, global head of Investment risk and analytical services at Northern Trust. “Overall, the positive market returns are the result of the resilient economic recovery underway, continued support from the Federal Reserve and strong corporate earnings.”

Canadian equities and fixed income securities receive the largest allocations among client portfolios for all market segments of the northern trust universe. Northern Trust’s US equity program universe posted a median gain of -0.1% in the third quarter, in line with major stock indexes. Northern Trust’s US fixed income program universe posted a median return of 0.1% for the quarter, with high yield bonds gaining 0.9% or more for the period.

ERISA corporate pensions have the largest allocations to US fixed income, with 44.5% of plan assets allocated to the asset class for the median ERISA plan at the end of the third quarter. The allocation to US equities was 23.2% of the median assets of the ERISA plan. Median exposure to international equities was 5.9% in the third quarter.

Public fund plans have the highest allocations to stocks, with a median allocation to US stocks of 32.2% at the end of the second quarter. The median exposure to international equities was 15.2%. The median exposure to US fixed income for government funds was 21.0%.

The foundation and endowment plans had a median allocation to US stocks of 21.2% in the third quarter. The median exposure to international equities was 8.2% and the median exposure to US fixed income securities was 8.7%. In the M&E universe, the median allocations to private equity and hedge funds were 21.8% and 9.3% respectively at the end of the quarter.

Universe results for US plans as of September 30, 2021:

3rd trimester

1 year

3 years

5 years

ERISA

0.0

%

13.0

%

11.1

%

9.6

%

Public funds

0.4

%

20.8

%

10.1

%

10.2

%

Foundations and endowments

0.9

%

25.3

%

11.6

%

11.2

%

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset services, 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 September 30, 2021, Northern Trust had assets under custody / administration of US $ 15.8 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.