Northern Trust Universe Data: Diminishing Recession Concerns Bring Positive Results in the First Quarter

Global financial markets posted positive results during the first quarter of 2023, driven by diminishing concerns regarding a potential recession, the reopening of China’s economy and falling energy costs. The median return for institutional asset owners included in the Northern Trust All Funds Over $100 million plan universe was 4.1% for the quarter ending March 31, 2023.

The Northern Trust Universe tracks the performance of more than 400 large U.S. institutional investment plans, with a combined asset value of more than $1.3 trillion, which subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.

The Northern Trust Corporate (ERISA) universe median return for the quarter was 5.0%. The Northern Trust Public Funds universe median returned 3.5% while the Northern Trust Foundation and Endowment (F&E) universe produced a 3.4% median return for the quarter.

“The Federal Reserve increased the Fed Funds rate twice during the quarter, at a reduced rate of 25 basis points relative to increases during last year. This led to renewed investor optimism that inflation may be receding,” said Amy Garrigues, global head of Investment Risk and Analytical Services at Northern Trust. “This, combined with China’s reopening and falling energy prices, allowed global markets to post positive results for the quarter.”

The Northern Trust U.S. equity program universe generated a 7.3% median return for the first quarter. Large cap stocks continued to outperform small cap stocks in the quarter, with the Russell 1000 large cap index up 7.5% and the Russell 2000 small cap index returning 2.7% for the three-month period. Bond yields fell during the quarter, leading to positive returns for the fixed income asset class. The Northern Trust U.S. Fixed Income program universe median return was 3.1% for the quarter.

ERISA plan universe median one-, three- and five-years returns were -8.2%, 5.4% and 4.1% respectively. The U.S. fixed income asset class remains the largest holding in ERISA plans, with a median allocation of 50.3%. The median allocation to US equity was 21.4%.

Public Funds universe median multi-period returns for the one-, three- and five-year periods stand at -3.6%, 11.1% and 5.7% respectively. The median first quarter allocations to U.S. and international equity were 28.3% and 12.7% respectively, contributing to the fifth-best quarterly result for the Public Funds universe over the last 10 years.

Foundations & Endowments universe median one-, three- and five-years returns were -4.3%, 11.9% and 6.6% respectively. The median U.S. equity allocation for the F&E universe remained at 17.5% during the quarter. The median allocation to private equity was 22.1% while the median allocation to U.S. fixed income dropped to below 9%.

Results as of March 31, 2023:

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 a global presence with offices in 22 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2023, 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 earned distinction as an industry leader for 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 U.S.A., incorporated with limited liability in the U.S. Please read our global and regulatory information.

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