In the third quarter of 2023, Northern Trust Corporation (NASDAQ:NTRS) reported a downturn in global equity markets, primarily influenced by persistent high interest rates. The Northern Trust All Funds Over $100 million plan universe, which tracks 398 large U.S institutional investment plans with over $1.3 trillion in assets, reported a -2.2% median return. Amy Garrigues of Northern Trust attributed this downturn to the economy's slow reaction to the Federal Reserve’s rate hikes.
The Northern Trust U.S Equity Program and U.S Fixed Income program universes also experienced negative median returns of -3.3% and -2.9% respectively. This was influenced by the rise in U.S ten-year government bond yield and the Russell 1000 index's outperformance of the Russell 2000 index.
The F&E Universe, Public Funds Universe, and ERISA Plan Universe reported varied returns and asset allocations. Notably, there was an increasing trend towards the private equity asset class. The F&E universe reported median one-, three- and five-year returns of 9.9%, 6.9%, and 6.2% respectively, with a clear shift towards private equity, reaching a median allocation of 25.1%.
Large cap stocks, represented by the Russell 1000 large cap index, outperformed small cap stocks, represented by the Russell 2000 small cap index, returning -3.2% versus -5.1%. The U.S ten-year and two-year government bond yields rose during the quarter to 4.59% and 5.03% respectively.
As of September 2023, Northern Trust managed $14.2 trillion in assets globally and had $14.2 trillion assets under custody/administration.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.