Northern Trust universe data: 2020 closes strong for institutional plan sponsors
05 February 2021 US
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Institutional investment plans benefitted as 2020’s market rally remained strong through the close of Q4, according to the Northern Trust Universe.
The median plan in the Northern Trust Universe finished with a 12.5 per cent return for the year and a 9.4 per cent return for the three months ending 31 December 2020.
Plans in the foundations and endowments segment produced a 9.7 per cent median return in Q4 and an 11.9 per cent median return for the year, while public funds saw a 9.5 per cent median return for the quarter and a 10.9 per cent median return for the year.
Corporate Employee Retirement Income Security Act (ERISA) pension plans finished the quarter with an 8 per cent median return and the year with a 14.8 per cent median return.
“Q4 median plan return ranked as the second best over the past 10 years, trailing only 2020’s second-quarter return,” observes Mark Bovier, regional head of investment risk and analytical services at Northern Trust.
Bouvier also explains that equity markets produced positive returns while fixed income markets produced more modest returns.
According to Bouvier, the Q4 market rally in equity markets can be attributed to emerging optimism related to multiple promising COVID-19 vaccinations approved during the quarter.
Meanwhile, the Northern Trust US equity programme universe reported a 16 per cent median return for the quarter while the Northern Trust non-US equity universe returned 16.4 per cent during the same period.
The median US fixed income programme had a median return of 2.1 per cent for the quarter.
Corporate ERISA plans had a median allocation to US equity of 27.5 per cent at the end of the quarter, says Northern Trust. This is down 7.5 per cent from five years ago.
The median US fixed income allocation was 39.2 per cent and the median international equity allocation was 8.7 per cent.
Northern Trust Universe Data also shows that the Public Funds plans’ median Q4 allocation to US equity was 33.9 per cent and their allocation to international equity was 15.3 per cent.
The median exposure to US fixed income for public funds was 24.5 per cent, meanwhile, the median exposure to private equity, real estate and hedge funds was 6.9 per cent, 5.3 per cent and 0.6 per cent respectively.
Elsewhere, the data reveals the foundations and endowments plans had a median US equity allocation of 24.6 percent in the quarter, down 7.5 per cent from the same quarter five years earlier.
International equity median exposure was 10.5 per cent and the median exposure to US fixed income was 10.6 per cent. In the foundations and endowments universe, private equity and hedge fund median allocations come in at 12.9 per cent and 12.7 per cent respectively as of quarter end.
The Northern Trust Universe tracks the performance of 388 institutions which subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings and hold more than $100 million in assets. These institutions have a combined asset value of approximately $1.4 trillion.
Northern Trust Canada Universe’s also revealed robust equity markets provided a solid foundation for Canadian pension plans during Q4 2020, with the median Canadian plan returning 5 per cent for the quarter and closing a volatile year with a 10 per cent gain.
The median plan in the Northern Trust Universe finished with a 12.5 per cent return for the year and a 9.4 per cent return for the three months ending 31 December 2020.
Plans in the foundations and endowments segment produced a 9.7 per cent median return in Q4 and an 11.9 per cent median return for the year, while public funds saw a 9.5 per cent median return for the quarter and a 10.9 per cent median return for the year.
Corporate Employee Retirement Income Security Act (ERISA) pension plans finished the quarter with an 8 per cent median return and the year with a 14.8 per cent median return.
“Q4 median plan return ranked as the second best over the past 10 years, trailing only 2020’s second-quarter return,” observes Mark Bovier, regional head of investment risk and analytical services at Northern Trust.
Bouvier also explains that equity markets produced positive returns while fixed income markets produced more modest returns.
According to Bouvier, the Q4 market rally in equity markets can be attributed to emerging optimism related to multiple promising COVID-19 vaccinations approved during the quarter.
Meanwhile, the Northern Trust US equity programme universe reported a 16 per cent median return for the quarter while the Northern Trust non-US equity universe returned 16.4 per cent during the same period.
The median US fixed income programme had a median return of 2.1 per cent for the quarter.
Corporate ERISA plans had a median allocation to US equity of 27.5 per cent at the end of the quarter, says Northern Trust. This is down 7.5 per cent from five years ago.
The median US fixed income allocation was 39.2 per cent and the median international equity allocation was 8.7 per cent.
Northern Trust Universe Data also shows that the Public Funds plans’ median Q4 allocation to US equity was 33.9 per cent and their allocation to international equity was 15.3 per cent.
The median exposure to US fixed income for public funds was 24.5 per cent, meanwhile, the median exposure to private equity, real estate and hedge funds was 6.9 per cent, 5.3 per cent and 0.6 per cent respectively.
Elsewhere, the data reveals the foundations and endowments plans had a median US equity allocation of 24.6 percent in the quarter, down 7.5 per cent from the same quarter five years earlier.
International equity median exposure was 10.5 per cent and the median exposure to US fixed income was 10.6 per cent. In the foundations and endowments universe, private equity and hedge fund median allocations come in at 12.9 per cent and 12.7 per cent respectively as of quarter end.
The Northern Trust Universe tracks the performance of 388 institutions which subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings and hold more than $100 million in assets. These institutions have a combined asset value of approximately $1.4 trillion.
Northern Trust Canada Universe’s also revealed robust equity markets provided a solid foundation for Canadian pension plans during Q4 2020, with the median Canadian plan returning 5 per cent for the quarter and closing a volatile year with a 10 per cent gain.
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