U.S. Institutional Plan Sponsors Struggled in
Third Quarter, According to Northern Trust
Universe Results
October 31, 2011 12:03 PM Eastern Daylight Time
CHICAGO--(EON: Enhanced Online News)--Northern Trust announced today that U.S. institutional investment
plan sponsors lost 9 percent at the median in the third quarter of 2011, ending a streak of four consecutive quarters
with positive results. The Northern Trust Universe represents the performance of about 300 large institutional
investment plans, with a combined asset value of approximately $641.1 billion, which subscribe to Northern Trust
performance measurement services.
“Institutional Plan Sponsors endured another tough third quarter, with weak equity returns driving the losses,” said
William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. “Based on
observations over the last 15 years, our Universe database has shown that the third quarter has historically been the
lowest performing quarter during the calendar year. For example Public Funds have had an average median loss of
0.7 percent in the third quarter over the last 15 years. That compares to average gains of almost 5 percent in the
fourth quarter, 0.8 percent in the first quarter and 3.1 percent in the second quarter for those funds during the same
respective period.”
In 2011, Corporate ERISA Pension Plans had the strongest third-quarter performance of all segments, with a loss of
7.5 percent at the median. Corporate ERISA plans benefited from higher allocations to fixed income than the Public
Funds and Foundations & Endowments segments, which tallied losses of 9 percent each at the median.
Fixed Income Programs in the Northern Trust Universe gained 2.1 percent in the third quarter while both U.S. and
non-U.S. equities posted steep losses. The median U.S. Equity Program was down 16.2 percent for the quarter,
while International Equity Programs lost almost 20 percent. U.S. Equity Program managers trailed the Russell 3000
Index of U.S. stocks by about 90 basis points in the third quarter, as active managers primarily struggled during the
time period to outperform their respective benchmarks. In alternative asset classes, Real Estate was up 0.6 percent
and Private Equity gained 3.2 percent while Hedge Funds lost 2.7 percent for the three months ending September
30.
“Even though the third quarter was challenging, institutional plan sponsors managed to keep pace with their assigned
performance benchmarks,” Frieske said. “The median plan sponsor return was four basis points better than its
benchmark for the quarter, indicating that active management across asset classes helped these plans outperform the
markets somewhat. Over longer time periods plan sponsors have experienced about 45 basis points of excess
performance relative to their assigned benchmarks.”
Longer-term performance results for all plans in the Northern Trust Universe are:
1 Yr 3 Yr 5 Yr
Corporate ERISA Pension Plans 2.4% 5.3% 2.8%
Public Funds 2.0% 4.4% 2.2%
Foundations & Endowments 0.7% 3.3% 1.9%
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund
administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals
worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16
international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30,
2011, Northern Trust had assets under custody of US$4.2 trillion, and assets under investment management of
US$644.2 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining
exceptional service and expertise with innovative products and technology. For more information, visit
www.northerntrust.com.
Contacts
Northern Trust Corporation
Media contacts:
John O’Connell, +1 312-444-2388
John_O'Connell@ntrs.com
or
Newton Sears, +1 312-444-3094
Newton_Sears@ntrs.com
http://www.northerntrust.com
Recent Stories from Northern Trust Corporation
l
Northern Trust Named Best Private Bank in U.S.
October 28, 2011
LONDON & CHICAGO--(EON: Enhanced Online News)--Northern Trust (NASDAQ: NTRS), a leading
provider of financial services for institutions, affluent individuals and families, has been named Best Priva...
more »
l
Northern Trust and BI-SAM Announce Agreement to Integrate Attribution Models for Fixed Income
October 28, 2011
CHICAGO--(EON: Enhanced Online News)--Northern Trust and BI-SAM today announced an agreement
to integrate BI-SAM’s B-One® Fixed Income Attribution models into Northern Trust’s multi-faceted web
por... more »
l
Northern Trust Introduces Northern Global Tactical Asset Allocation Fund to Individual Investors
October 25, 2011
CHICAGO--(EON: Enhanced Online News)--Northern Trust announced today that it has opened its
Northern Global Tactical Asset Allocation Fund (BBALX) to individual investors. The competitively priced ...
more »