Northern Trust Universe Data: Strong 2024 Performance for U.S. Institutional Investors, Despite Q4 Market Volatility
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Strong U.S. equity market returns were offset by weakness in the bond market and global stocks in the fourth quarter of 2024, generating flat returns for institutional investors following four consecutive quarters of solid gains. The Northern Trust All Funds Over $100 Million plan universe had a median return of -0.8% in the fourth quarter but was up 9.4% for the full year in 2024.
The Northern Trust Universe tracks the performance of 385 large U.S. institutional investment plans, with a combined asset value of more than $1.4 trillion, which subscribe to performance measurement services as part of Northern Trust's asset servicing offerings.
The Northern Trust Corporate (ERISA) universe median plan return was down -3.9% for the quarter, and the Northern Trust Public Funds universe posted a median return of -1.1% while the Northern Trust Foundation and Endowment (F&E) universe was up by .01% for the period ending December 31.
“The fourth quarter was marked by peaks and valleys, as markets reacted to U.S. election results in November and the Federal Reserve signaling in December that future interest rate cuts would be limited,” said John Turney, Global Head of Total Portfolio Solutions, Northern Trust Asset Servicing. “Despite this turbulence, major U.S. equity indices closed out the quarter at all-time highs, fueled by strong gains from stocks tied to Artificial Intelligence.”
The S&P 500 Large Cap Index was up 2.4% for the three-month period. The Russell 1000 Large Cap Growth Index produced a return of 7.1%, outperforming the Russell 1000 Large Cap Value Index return of -2.0%. The Russell 1000 Large Cap Index was up 2.7%, compared to the Russell 2000 Small Cap Index of 0.3% for the period.
In line with market expectations, the Federal Reserve reduced interest rates by 50 basis points in the fourth quarter, bringing the Fed Funds rate to a range of 4.25% to 4.50%. The U.S. Ten-Year Government Bond yield rose from 3.81% to 4.58% during the quarter. The Northern Trust US Fixed Income program universe median return was down -2.3% for the quarter.
In the full calendar year 2024, U.S. equity markets outperformed both international equity markets and global fixed income markets. Plans that had a higher allocation to public and private equity outperformed those with significant allocations to fixed income. For example, the median one-year return for the Northern Trust Foundation and Endowment universe, which maintains a median allocation to fixed income below 10%, was 10.2%. In comparison, the Northern Trust ERISA universe, with a median allocation to fixed income exceeding 50%, reported a one-year median return of 3.0%.
Results as of December 31, 2024:
|
4th Qtr |
|
1Yr |
|
3Yr |
|
5Yr |
ERISA |
-3.9% |
|
3.0% |
|
-2.5% |
|
2.9% |
Public Funds |
-1.1% |
|
8.6% |
|
2.5% |
|
6.7% |
Foundations & Endowments |
0.1% |
|
10.2% |
|
3.3% |
|
8.1% |
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2024, Northern Trust had assets under custody/administration of US$16.8 trillion, and assets under management of US$1.6 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.
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