Institutional plan sponsors gained 4.3 percent at the median in the first quarter of 2013, with strong performance in U.S. Equities a key factor in overall plan returns, according to results 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 $855 billion, which subscribe to Northern Trust performance measurement services.
"A rising stock market in the United States propelled plans to another positive quarter, as U.S equities continue to be a core holding for institutional investors," said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services.
Public Funds led all segments in the Northern Trust Universe, gaining 5.1 percent at the median, while Foundations & Endowments returned 4.5 percent and Corporate Pensions gained 4.2 percent in the three months ending March 31, 2013.
The top performing asset class was U.S. Equities, in which the median program returned nearly 11 percent for the quarter. The median international (non-U.S.) equity program gained 3.8 percent in the first quarter. Meanwhile U.S. fixed income programs eked out a gain of just under 1 percent in the quarter, and non-U.S. bonds were flat to negative 1 percent at the median. Public Funds, with larger allocations to U.S. and international equities (45 percent at median) and smaller allocations to U.S. fixed income (22.7 percent), outperformed Foundations & Endowments, which allocated 44 percent to equities and 15.2 percent to U.S. fixed income and 15 percent to alternatives, as well as Corporate Pension Plans (49 percent equities and 31.4 percent U.S. fixed income at median).
Fixed income has performed better over the longer term, and the larger allocation to that asset class has helped Corporate Pension Plans lead the other segments in the one-, three- and five-year periods as of March 31, 2013:
1 Yr 3 Yr 5 Yr
Corporate Pension Plans 13.6% 10.1% 5.8%
Public Funds 10.3% 9.7% 4.8%
Foundations & Endowments 9.2% 8.1% 4.0%
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 17 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2013, Northern Trust had assets under custody of US$5 trillion, and assets under investment management of US$810.2 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 www.northerntrust.com or follow us on Twitter @NorthernTrust.