CHICAGO, Jan. 25 /PRNewswire-FirstCall/ -- Northern Trust announced today that U.S. Institutional investment plan sponsors realized strong double-digit returns in 2009, with a solid fourth quarter capping a year of extreme highs and lows in investment performance, 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 $626 billion, which subscribe to Northern Trust performance measurement services.
Corporate Pension Plans had the highest returns for the year, up 22.3 percent at the median for the 12 months ending December 31, 2009. Public Funds returned 20.3 percent and Foundations & Endowments gained 17.9 percent for the full year. In the fourth quarter, Public Funds led with a 3.7 percent gain at the median, while Foundations & Endowments and Corporate Pension Plans posted median returns of 3.6 percent and 3.3 percent, respectively.
"Strong but not spectacular returns in the fourth quarter capped a volatile year in which plan sponsors experienced one of their worst quarters in the January to March period, followed by two of their best quarters from April through September, according to our database," said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. "The end result is that 2009 was one of the better calendar years on record for most institutional plans."
Returns in 2009 were driven by higher-risk asset classes. In U.S. equities, for example, small-cap growth stocks outperformed large-cap stocks, with the Russell 2000 Growth Index returning 34.5 percent compared to the Standard & Poor's 500 Index return of 26.5 percent. For non-U.S. stocks, emerging markets (79 percent return for the MSCI Emerging Markets index) out-gained developed markets (32.5 percent for the MSCI EAFE index) for the 12-month period. In fixed income, high yield was the best returning subset, up 58 percent for the year Barclays Capital High Yield Index.
The performance of alternative assets was mixed in 2009. The Hedge Fund segment in the Northern Trust Universe gained 20 percent for the year, while the Private Equity segment lost almost 5 percent. Higher allocations to private equity by Foundations & Endowments likely contributed to the lower overall returns for F&E plans for 2009 compared to Corporate and Public plans.
"Regardless of differences in performance between Corporate Pension, Public Fund and F&E segments, a median return of 19 percent for all plans ranks 2009 as one of the best years in more than a decade for institutional investors," Frieske said. "Following the worst year in our records in 2008, and six straight quarters of losses, the past three quarters of positive returns have noticeably improved the longer-term numbers for institutions."
The three-year and five-year returns for all plans in the Northern Trust Universe are:
Corporate Pension Plans
Foundations & Endowments
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, 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 December 31, 2009, Northern Trust had assets under custody of US$3.7 trillion, and assets under investment management of US$627.2 billion. For 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.
SOURCE Northern Trust