Solid Performance In Q3 For U.S. Institutional Plan Sponsors

Institutional investment plans had solid performance in the third quarter, returning 4.4 percent at the median during the three months ending September 30, according to data in the Northern Trust Universe.

The Northern Trust Universe tracks the performance of about 300 large U.S. institutional investment plans, with a combined asset value of approximately $834 billion, which subscribe to Northern Trust performance measurement services.

“Strong returns from equities in general and from developed markets in Europe specifically gave plan sponsors a nice lift in the third quarter,” said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. “It was a nice bounce back from a flat second quarter for many institutional investors. Plan sponsors have benefited by keeping it simple in 2013, with publicly traded equities leading the way and providing almost double the return of alternatives in the most recent quarter.”

The median plan in the Public Funds segment gained 4.9 percent in the third quarter, while Corporate ERISA plans gained 4.4 percent and Foundations & Endowments returned 4.3 percent at the median, according to Northern Trust Universe data.

Public Funds were helped by a larger allocation to international equities, where the median investment program in the Northern Trust Universe gained 9.3 percent in the third quarter. The median Public Fund plan had 19.1 percent of its assets invested in international equity, while Corporate ERISA plans had 11.8 percent and Foundations & Endowments had 12.0 percent in that asset class, as of September 30.

U.S. equity programs in the Northern Trust Universe returned 7.0 percent at the median (compared to 6.0 percent for the Russell 1000 Index) in the third quarter and 22 percent (compared to 20.76 percent for the Russell 1000) in the year-to-date through September 30. Private equity and real estate investment program returned less than 3 percent in the quarter while returns for fixed income and hedge funds were closer to 1 percent at the median during the three-month period.

Corporate ERISA plans have the largest allocation U.S. fixed income, a nearly 31.5 percent weighting at the median in the Northern Trust Universe as of September 30. Foundations & Endowments invest more in alternatives than the other segments, with 23 percent allocated to Private Equity and 17.7 percent to Hedge Funds in the median plan.

Returns by segment in the one-, three- and five-year periods as of June 30, 2013 were:
      1 Yr     3 Yr     5 Yr
Corporate Pension Plans     9.7%     9.9%     8.7%
Public Funds 12.9% 10.5% 8.1%
Foundations & Endowments 12.1% 9.1% 7.0%

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 18 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2013, Northern Trust had assets under custody of US$5.2 trillion, and assets under investment management of US$846.2 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit 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

Copyright Business Wire 2010