Northern Trust announced that, according to The Northern Trust Universe data, U.S. institutional investment plans faced challenges in the third quarter of 2023 due to global equity market declines triggered by concerns among investors about the necessity of an extended period of high-interest rates to curb the U.S. economy. The Northern Trust Universe monitors the performance of 398 large U.S. institutional investment plans, collectively valued at over $1.3 trillion. This assessment comes as part of Northern Trust's quarterly review and analysis.

Delving deeper into specifics, In the third quarter of 2023, the Northern Trust All Funds Over $100 million plan universe experienced a -2.2% median return, with varying results in different segments. The Northern Trust Foundation and Endowment (F&E) universe posted a -1.1% median return, while the Northern Trust Public Funds universe and the Northern Trust Corporate (ERISA) universe recorded median returns of -1.7% and -5.1%, respectively. Within the Northern Trust U.S. Equity Program universe, there was a -3.3% median return, according to a press release by Northern Trust.

Providing further insight into these developments, "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, global head of Northern Trust Investment Risk and Analytical Services, according to a press release by Northern Trust. "As a result, there is a lingering fear that higher rates will remain for longer than was previously anticipated."

Turning our attention towards fixed income programs, The Northern Trust U.S. Fixed Income program faced a -2.9% median return in Q3 due to increased government bond yields. In the Foundation and Endowment (F&E) universe, returns were 9.9%, 6.9%, and 6.2% for one, three, and five years. The Public Funds universe showed returns of 9.1%, 5.6%, and 5.2% for one, three, and five years. The ERISA plan universe had returns of 5.1%, -1.2%, and 2.7%, according to a press release by Northern Trust.