Northern Trust Universe Data: Plan Sponsors Record Median Gain in 2016

CHICAGO--()--Northern Trust Universe data today revealed that in 2016 plan sponsors netted a median gain of 7.4 percent. The fourth quarter of 2016 marked the fifth consecutive quarterly gain for institutional asset owners, with plan sponsors gaining approximately 0.5 percent at the median. Robust equity returns, especially U.S. equities, helped offset an uptick in interest rates that depressed bond prices.

The Northern Trust Universe tracks the performance of approximately 300 large U.S. institutional investment plans, with a combined asset value of approximately $899 billion, which subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings.

Since 1998, the average fourth quarter median return has been 3.7 percent, placing this quarter significantly below average. An increase in bond yields and uncertainty in Europe weighed on bond and international equity valuations. International equities declined 1.7 percent at the median and U.S. fixed income declined 2.3 percent. The Foundation & Endowments segment had the best median return in the fourth quarter with a gain of 1 percent. Public Funds netted 0.8 percent while Corporate ERISA plans were down 0.8 percent.

“While the difference between the median returns of each plan sponsor segment was not significant, the way each segment achieved its return varied considerably. Foundations & Endowments benefited from a larger allocation, approximately 48 percent, to alternatives,” said Amy Garrigues, head of Investment Risk and Analytical Services at Northern Trust. “Public Funds had the largest allocation to U.S. equities, the best performing asset class in the quarter with a quarterly return of 4.2 percent, while corporate ERISA plans were hurt by their exposure to non-core fixed income, which declined nearly 6 percent.”

Longer-term returns as of December 31, 2016 are as follows:

    4th Qtr       1 Yr       3 Yr       5 yr
ERISA -0.8% 8.2% 5.3% 8.5%
Public Funds 0.8% 7.9% 4.7% 8.9%
Foundations & Endowments 1.0% 6.6% 4.1% 8.0%
 

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 22 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2016, Northern Trust had assets under custody of US$6.7 trillion, and assets under management of US$942 billion. 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.

© 2017 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the U.S. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. For legal and regulatory information about individual market offices, visit northerntrust.com/disclosures.

Contacts

Northern Trust Corporation
Tim Hacker
(312) 557-6090
Tim.Hacker@ntrs.com
http://www.northerntrust.com

Release Summary

Northern Trust Universe data today revealed that in 2016 plan sponsors netted a median gain of 7.4 percent. The fourth quarter of 2016 marked the fifth consecutive quarterly gain.

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Contacts

Northern Trust Corporation
Tim Hacker
(312) 557-6090
Tim.Hacker@ntrs.com
http://www.northerntrust.com