Northern Trust Universe Data: Reopening and Advances in Vaccination Generate Strong Returns for U.S. Plan Sponsors in Q2 2021

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CHICAGO–(COMMERCIAL THREAD) – Sponsors of U.S. institutional regimes saw strong investment gains in the second quarter of 2021 due to continued market momentum resulting from the rollout of Covid-19 vaccinations. The Northern Trust Universe’s mid-plan returned 6.0% for the quarter, ranking the period the fifth best quarterly performance in the past 10 years.

The Northern Trust Universe tracks the performance of 377 major US institutional investment plans, with a combined asset value of more than $ 1.4 trillion, that subscribe to performance measurement services as part of the Northern Trust asset management.

ERISA corporate pension plans have a median return of 6.2%, foundations and endowments have a median return of 6.0%, and public funds have a median return of 5.6% during the three-month period ending June 30, 2021.

“US stock market returns have been boosted by rising rates of Covid-19 vaccination in the United States, proposals for massive federal spending on infrastructure and strong returns in the tech sector,” said Amy Garrigues, Global Head of Investment risk and analytical services at Northern Trust. “The international market data was also encouraging. The eurozone’s Markit PMI has reached its highest level since 2006, and the European Commission has approved an $ 800 billion Covid-19 stimulus package that has been well received by European markets. With these factors combined, the Northern Trust Universe has had one of its most impressive quarters of the past decade. ”

US stocks are a core asset for most plans in the Northern Trust universe, and the Northern Trust US equity program universe registered a median gain of 7.8% in the second quarter. Another leading security for most plans, US Fixed Income, posted a median return of 2.2% for the quarter.

The allocation to US fixed income securities was 42.9% of the median assets of the Corporate ERISA plan. The allocation of ERISA plans to US equities was 24.1% and the median exposure to international equities was 6.1% in the second quarter.

Public fund plans have the highest allocations to stocks, with a median allocation to US stocks of 34.0% 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 20.8%.

The foundation and endowment plans had a median allocation to U.S. stocks of 22.9% in the second quarter, down 4.4% from five years earlier. The median exposure to international equities was 9.2% and the median exposure to US fixed income securities was 8.4%. In the M&E universe, the median private equity and hedge fund allocations were 20.0% and 9.4% respectively at the end of the quarter.

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

2nd trimester

1 year

3 years

5 years

ERISA

6.2%

18.0%

11.8%

10.4%

Public funds

5.6%

26.4%

10.9%

10.9%

Foundations and endowments

6.0%

30.5%

12.0%

11.7%

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 June 30, 2021, Northern Trust had assets under custody / administration of US $ 15.7 trillion and assets under management of US $ 1.5 trillion. For over 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 Steet, Chicago, Illinois 60603 USA, incorporated with limited liability in the USA. Please read our global and regulatory information.



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