Global equity market returns were modest in the second quarter of 2024, marking a shift from the robust performance seen in the first quarter, largely due to ongoing concerns about global inflation. The median return for institutional asset owners in the Northern Trust All Funds Over $100 Million plan universe was 1.1% for the quarter ending June 30, 2024.
“Institutional investors benefited from the equity market rally in the first half of the year, ahead of fiscal year-end for many plans on June 30,” said John Turney, Global Head of Total Portfolio Solutions.
The Northern Trust Universe, which tracks 388 large U.S. institutional investment plans with a combined asset value exceeding $1.4 trillion, reported varied returns across its segments. The Northern Trust Foundation and Endowment (F&E) universe posted a 1.3% median return, while the Northern Trust Public Funds universe saw a 1.2% median return. The Northern Trust Corporate (ERISA) universe showed negligible change, with a median return of 0.01%.
U.S. equities delivered mixed results in the quarter. Growth companies related to artificial intelligence performed well, while materials and industrials suffered due to inflationary pressures. The Northern Trust U.S. Equity Program universe achieved a 1.9% median return, with large cap stocks outperforming small cap stocks. The Russell 1000 large cap index gained 3.6%, while the Russell 2000 small cap index declined by 3.3%.
The Northern Trust U.S. Fixed Income program universe experienced a 0.3% median return for the quarter. The yield on the US Ten-Year Government Bond rose from 4.21% to 4.39%. Within the domestic market, U.S. Government, Investment Grade, and High Yield bonds saw positive returns due to declining bond prices.
As of June 30, 2024, the fiscal year-end for many pension funds, foundations, and endowments, the Foundations & Endowments universe reported median returns of 10.6%, 3.4%, and 8.4% for one, three, and five years, respectively. The median allocation to private equity was 22.1%, slightly down from the previous quarter, with an 8.7% allocation to hedge funds.
The Public Funds universe had median returns of 9.3%, 3.1%, and 7.1% for one, three, and five years. Allocations were 27.4% to U.S. equity, 12.6% to international equity, and 22.4% to U.S. fixed income. The private equity allocation was 13.7%.
ERISA plans reported median returns of 5.0%, -2.1%, and 3.7% for one, three, and five years. With a significant median allocation of 55.9% to U.S. fixed income, ERISA plans underperformed compared to other segments. Their private equity allocation remained minimal at 1.9%.
Results as of June 30, 2024:
| Universe | 2nd Qtr | 1 Yr | 3 Yr | 5 Yr |
|---|---|---|---|---|
| ERISA | 0.0% | 5.0% | -2.1% | 3.7% |
| Public Funds | 1.2% | 9.3% | 3.1% | 7.1% |
| Foundations & Endowments | 1.3% | 10.6% | 3.4% | 8.4% |
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management, and banking services to corporations, institutions, affluent families, and individuals. Founded in Chicago in 1889, Northern Trust operates globally with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East, and Asia-Pacific. As of June 30, 2024, Northern Trust managed assets under custody/administration of $16.6 trillion and assets under management of $1.5 trillion. For over 130 years, Northern Trust has been recognized for its exceptional service, financial expertise, integrity, and innovation. Visit us at northerntrust.com or follow us on X (formerly Twitter) @NorthernTrust and LinkedIn.
