Northern Trust Universe Data: Global Markets Respond to Uncertainty with Mixed Results for First Quarter 2025

Global markets produced mixed results in the first quarter of 2025, largely due to uncertainty surrounding U.S. trade policies, ongoing global inflation, and rising geopolitical tensions. The Northern Trust All Funds Over $100 Million plan universe had a median return of 0.7% for the quarter.

The Northern Trust Universe tracks the performance of 377 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 had the strongest investment performance among institutional segments, with a median return of 2.2% in the quarter, while the Northern Trust Public Funds universe median return was 1.1% and Northern Trust Foundation and Endowment (F&E) universe was up 0.5% at the median for the quarter ending March 31.

U.S. equities, a core holding of most U.S. institutional plans, trailed other global equity markets in the first quarter. The Northern Trust U.S. Equity program universe posted a median return of

-4.6% for the quarter, underperforming the S&P 500's return of -4.3% but surpassing the Russell 3000's return of -4.7%. In contrast, the Northern Trust Non-U.S. Equity program universe achieved a median return of 4.9%, while the MSCI World Ex-US Net returned 6.2%.

John Turney, Global Head of Total Portfolio Solutions, Northern Trust Asset Servicing, said: “The first quarter of 2025 unfolded amid a backdrop of uncertainty, with U.S. equities riding high at the start and then falling as new global tariffs in February and March shifted market sentiment. Our Universe data shows that institutional plans with higher equity allocations struggled in comparison with plans that allocate more to fixed income and alternative asset classes.”

Bond markets provided a refuge for investors looking to avoid the market volatility created by economic policy changes and geopolitical events. As interest rates fell during the quarter, the Northern Trust U.S. Fixed Income program universe achieved a median return of 2.6% for the quarter.

The ERISA universe median plan return was 2.2% during the quarter. The ERISA plan one, three, and five-year median returns were 4.3%, 0.6%, and 4.7%, respectively. In the Northern Trust ERISA plan universe, the median allocation to U.S. Fixed Income was 54.5%, as plans invested in bonds to match their investments with future benefit payment obligations. This large fixed-income allocation usually leads to less volatile returns compared to other plan sponsor types.

Public Funds universe median returns for the one, three, and five-year periods stood at 5.8%, 4.0% and 10.1%, respectively. These funds often invest a substantial portion of their assets in both public and private equity, which tends to introduce higher volatility compared to ERISA plans. Notably, the median allocation to Private Equity has risen to 13.4%, an increase from 9.4% five years ago.

In the Foundations & Endowments universe, median one, three, and five-year returns were 6.2%, 4.9% and 10.9%, respectively. Foundations and Endowments frequently utilize limited partnerships (LPs) for their investments in private equity, private credit, infrastructure, and real estate. Due to the delayed reporting of valuations by LPs, these plans tend to underperform in the short term during strong market conditions, as the investment managers’ lagging valuations impact the plans’ returns.

Results as of March 31, 2025:

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 March 31, 2025, Northern Trust had assets under custody/administration of US$16.9 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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The Northern Trust Universe tracks the performance of 377 large U.S. institutional investment plans, with a combined asset value of more than $1.4 trillion.