CHICAGO, July 23 /PRNewswire-FirstCall/ -- Northern Trust announced today that U.S. Institutional investment plan sponsors experienced one of their best quarters in recent years during the period ending June 30, 2009, with a median return of 10.2% percent for the second quarter following six straight quarters of losses, according to data in the Northern Trust Universe. The Northern Trust Universe represents the performance results of more than 300 large institutional investment plans, with a combined asset value of approximately $540 billion, which subscribe to Northern Trust performance measurement services.
"Institutional investors achieved a sharp and substantial recovery in the second quarter, driven by a reversal of fortune in the equity markets," said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. Corporate ERISA Plans led the way in the second quarter, posting a median return of 12 percent, while Public Funds gained 11 percent and Foundations & Endowments returned 9.3 percent at the median. The quarterly results were the second-best in the past decade for Corporate Plans and third-best for Public Funds in that period, according to the Northern Trust Universe database.
"Corporate and Public plans benefited the most from their exposure to equities, which outperformed other asset classes, while Foundations & Endowments were held back to some extent last quarter by their relatively large allocation to hedge funds," Frieske said. "The composite allocation to hedge funds in our F&E universe was about 9 percent as of June 30, compared to about 2 percent for both Corporate Plans and Public Funds. Overall, hedge fund returns, while solid at 9 percent for the second quarter, were substantially below the returns generated by equities."
In the Northern Trust Universe, the Total Equity Program gained 19.6 percent at the median in the second quarter, compared to losses of 10 percent in the first quarter and 22.2 percent in the fourth quarter of 2008. The S&P 500 Index of U.S. stocks was up 15.9 percent and non-U.S. stocks gained 28 percent, as measured by the MSCI ACWI ex-US Index, in the second quarter.
The strong second quarter had a positive impact on long-term performance. Three-year median performance improved by approximately 350 basis points over the prior quarter's results, while five-year medians improved by about 200 basis points. The returns are as follows:
3-Year 5-Year
Corporate Plans -2.8% 2.2%
Public Funds -3.0% 2.0%
Foundations & Endowments -2.3% 2.3%
As a part of its client-focus philosophy, Northern Trust has provided risk and performance services for more than three decades. Northern Trust's Investment Risk & Analytical Services capabilities include risk monitoring and measurement, performance evaluation and other specialty services, with continuing investment in research and client-focused product development.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 15 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2009, Northern Trust had assets under custody of US$3.2 trillion, and assets under investment management of US$558.9 billion. Northern Trust, founded in 1889, has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit http://www.northerntrust.com.
SOURCE Northern Trust Corporation
