U.S. institutional asset owners in the Northern Trust plan universe posted a median return of -2.2% in the third quarter, said a release issued Nov. 6.
The third-quarter 2023 decline followed a 2.3% median return in the second quarter and a 4.1% median return in the first quarter for the same universe.
Within the entire Northern Trust universe, the Northern Trust Foundation and Endowment universe delivered a median return of -1.1% for the quarter, while the Northern Trust Public Funds universe had median return of -1.7%. The Northern Trust Corporate (ERISA) universe fared the worst, with a median return of -5.1%.
"We saw a decline in U.S. equity returns during the quarter, and this is likely due to the fact that investors feel the economy has been slow to respond to the Federal Reserve's recent rate increases," said Amy Garrigues, Northern Trust's global head of investment risk and analytical services, in the release. "As a result, there is a lingering fear that higher rates will remain for longer than was previously anticipated."
By asset class, the Northern Trust U.S. Equity Program universe returned a -3.3% median return for the third quarter, while the Northern Trust U.S. Fixed Income program's universe median return was -2.9%.
For the one-, three- and five-year periods through Sept. 30, 2023, the F&E universe delivered annualized median returns of 9.9%, 6.9% and 6.2%, respectively. The Public Funds universe delivered annualized median returns of 9.1%, 5.6% and 5.2% for the same periods.
In the ERISA plan universe, the median annualized one-, three- and five-years returns were 5.1%, -1.2% and 2.7%, respectively.
The Northern Trust universe consists of 398 U.S. institutional funds with combined assets of more than $1.3 trillion.
