Institutional asset owners in the Northern Trust universe posted a median gain of 3.3% in the first quarter, after returning 9.4% in the previous quarter, data released Monday showed.
Continued equity gains, helped by the distribution of COVID-19 vaccines globally, helped asset owners with larger equity allocations.
"The first-quarter U.S. equity market rally was driven by two key events — the news that almost one-third of all U.S. adults had received at least one dose of a COVID-19 vaccination and government approval of a third stimulus relief package that injected $1.9 trillion into the economy," said Amy Garrigues, Northern Trust's global head of investment risk and analytical services, in a news release.
"As a result of this market rally, the Northern Trust U.S. equity program universe reported a 7.1% median gain in the first quarter. U.S. fixed income, meanwhile, had negative returns of -2.6% at the median for the quarter due to expectations for increased inflation in the near term," she said.
Foundations and endowments performed the best among plan types with a median return of 3.8% for the quarter ended March 31, followed by public defined benefit plans at 3.2%. Corporate DB plans, which had the largest median allocation to U.S. fixed income on March 31 of 39.2%, had a median loss of 1%.
For the one, three and five years ended March 31, foundations and endowments in Northern Trust's universe returned an annualized 34.3%, 9.9% and 10.5%, respectively; public pension funds, 31.4%, 9% and 10%; and corporate pension plans, 23.4%, 9.4% and 9.6%.
The Northern Trust universe consists of more than 380 large U.S. institutional funds with combined assets of more than $1.34 trillion.