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Northern Trust Universe Data: Institutional Plans Record Fourth-Quarter and Full-Year Gains in 2021
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The U.S. markets closed Q4 2021 at record highs, led by the Dow Jones Industrial Average at 36,338, marking a 7.2% gain for the quarter and 20.9% for the year. The Northern Trust Universe reported a median return of 3.5% for institutional asset owners, tracking 380 plans with over $1.4 trillion in assets. The Northern Trust corporate universe showed a 2.9% return while public funds and foundations achieved 3.8% and 3.2%, respectively. Investors favored large-cap stocks, with the Russell 1000 Growth index gaining 11.6%. Northern Trust has $16.2 trillion in assets under custody.
Positive
U.S. markets had record-high performances, with the Dow Jones reaching 36,338, a 20.9% increase year-on-year.
Institutional asset owners in the Northern Trust Universe had a median return of 3.5% for Q4 and 14.4% for the year.
Northern Trust reported $16.2 trillion in assets under custody, highlighting its significant market position.
Large-cap stocks outperformed small-cap stocks, with Russell 1000 Growth index delivering an 11.6% quarterly return.
Negative
The Northern Trust Corporate (ERISA) universe median return of 2.9% for Q4 was comparatively low amid high market performance.
The fixed income asset class remains the largest ERISA plans allocation at 44.8%, signaling potential over-reliance on bonds.
CHICAGO--(BUSINESS WIRE)--
U.S. markets ended the fourth quarter of 2021 in record territory with the Dow Jones Industrial Average closing at 36,338, the largest calendar point gain in the benchmark’s history and up 7.2% for the quarter and 20.9% in the one-year period. The median return for institutional asset owners included in the Northern Trust All Funds Over $100 million plan universe was up 3.5% for the quarter and up 14.4% for the one-year period.
The Northern Trust Universe tracks the performance of 380 large U.S. institutional investment plans, with a combined asset value of more than $1.4 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 up 2.9%. The Northern Trust Foundation and Endowment (F&E) universe produced a 3.2% median return for the quarter while the Northern Trust Public Funds universe median return was up 3.8%.
“As markets remained resilient to the COVID-19 global pandemic, U.S. equity markets moved to record highs during the fourth quarter,” said Amy Garrigues, global head of Investment Risk and Analytical Services at Northern Trust. “Investors shifted allocations from small-cap to large-cap stocks following clarity from the Federal Reserve that QE tapering would become more aggressive in 2022. This rebalancing produced strong tailwinds for large caps stocks.”
The Northern Trust US equity program universe produced an 8.1% median return for the quarter. The S&P 500 large cap index was up 11.0% for the three-month period. Large cap stocks continued to outperform small cap stocks. The Russell 1000 large cap index returned 9.8% compared to the Russell 2000 small cap index which returned 2.1% for the period. The large cap growth segment had the strongest quarterly performance in the US public equity market for the second consecutive quarter where the Russell 1000 Growth index returned 11.6% during the quarter.
The Northern Trust ERISA universe plan median one-, three- and five-years returns were 7.9%, 14.3% and 10.4% respectively. The US fixed income asset class remains the largest ERISA plans allocation at a median allocation of 44.8% which represents a 10% increase over the last ten years. The range in the universe’s fixed income asset class allocation between the top and bottom quartile is over 40%.
The Northern Trust Public Funds universe median multi-period returns for the one-, three- and five-year periods came in at 14.3%, 14.7% and 11.1% respectively. The median fourth quarter allocations to US and international equity are 33.0% and 14.8% respectively. The median exposure to US fixed income for Public Funds is 20.0%.
The Northern Trust Foundations & Endowments universe plan’s median one-, three- and five-years returns were 16.6%, 15.9% and 11.8% respectively. The Foundation and Endowment plan’s median U.S. equity allocation was 21.5% in the quarter. The median allocation to private equity is 20.8%, a 100% increase over the last 5 years.
Results of U.S. plan level universes as of December 31, 2021:
4th Qtr
1 Yr
3 Yr
5 Yr
ERISA
2.9%
7.9%
14.3%
10.4%
Public Funds
3.8%
14.3%
14.7%
11.1%
Foundations & Endowments
3.2%
16.6%
15.9%
11.8%
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 December 31, 2021, Northern Trust had assets under custody/administration of US$16.2 trillion, and assets under management of US$1.6 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.
