Northern Trust Reports U.S. Institutional Plan Sponsors Had Moderate Gains in the First Quarter of 2010

CHICAGO, April 26 /PRNewswire-FirstCall/ -- Northern Trust announced today that U.S. institutional plan sponsors experienced moderate gains in the first quarter of 2010, with a median return of 3.5 percent for plans in the Northern Trust Universe. The Northern Trust Universe represents the performance of about 300 large institutional investment plans, with a combined asset value of approximately $637 billion, which subscribe to Northern Trust performance measurement services.

"This year started off with similar results as the fourth quarter of 2009, an indication that consistent performance is returning to institutional plans," said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. "By historical standards 3.5 percent is about in the middle of all the observations. By recent experience, however, the first quarter of 2010 was quite benign, marking a fourth consecutive quarter of positive gains after six straight quarters of negative returns from late 2007 to early 2009."

Corporate Pension Plans had the highest median return in the first quarter, at 3.7 percent, while Public Funds were next with 3.6 percent and Foundations & Endowments had a median return of 3.3 percent. In the 12 months ending March 31, Corporate Pension Plans had gained 35.5 percent, Public Funds were up 32.2 percent and Foundations & Endowments returned 30.1 percent.

"Returns in the first quarter were driven by higher-risk segments of traditional asset classes," Frieske said. For example, small-cap stocks performed best among domestic equities, with the Russell 2000 Index up 8.9 percent for the quarter compared to 5.4 percent for the Standard & Poor's 500 Index. In international equities, emerging markets led the way, while high yield bonds were the highest-returning segment of the fixed income market. The MSCI Emerging Markets Index gained 2.5 percent in the first quarter, compared to 0.9 percent for the MSCI EAFE Index for developed international markets. In fixed Income, the Barclays Capital U.S. Corporate High-Yield Bond Index gained 4.6 percent in the quarter, ahead of the 1.8 percent return for the Barclays Capital U.S. Aggregate Bond Index.  

"Alternative assets continue to lag traditional equities, but the gap is shrinking," Frieske said. "The Northern Trust Universe Private Equity and Hedge Fund segments each returned about 3.5 percent in the first quarter while the Real Estate segment had a positive median return for the first time since the second quarter of 2008."

Four straight quarters of positive median results have improved the long-term performance numbers considerably. Since the fourth quarter of 2008, five-year returns for plans in the Northern Trust Universe have improved by about 300 basis points. Longer-term performance results as of March 31, 2010 are:

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 March 31, 2010, Northern Trust had assets under custody of US$3.7 trillion, and assets under investment management of US$647.3 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