Northern Trust Universe Gained 12% in 2012

February 4, 2013 ( - Institutional plan sponsors reaped a fourth consecutive year of positive investment returns in 2012.

The median plan in the Northern Trust Universe posted a 12.3% gain. Corporate Pension Plans and Public Funds, with higher allocations to public equities, had stronger returns than the Foundations & Endowments segment in the 12 months ending December 31, 2012.   

Public equities were again key to performance in 2012, with programs in the Northern Trust Universe returning 16.9% at the median for the year. International equity programs gained 18.2% at the median, while the median U.S. equity program gained 16%. The median private equity program had a 10% return for the year, and total fixed income programs gained 8.8% at the median.

Corporate Pension Plans had the highest returns in the Northern Trust Universe, gaining 13.6% at the median in 2012. Public Funds–pension plans for public employees–gained 12.9%, and the Foundations & Endowments segment–funds managed for philanthropic organizations, colleges and universities–rose 11.5% for the year. In the fourth quarter, Public Funds led with 2.1%, Corporate plans gained 1.86% and F&E plans returned 1.81% at the median, according to Northern Trust Universe data.

“Corporate plans benefited from their higher allocations to public equities – 47 percent at the median – and just an 11 percent allocation to PE and hedge funds,” said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. “Conversely, F&E plans had 40 percent allocated to PE and hedge funds and 32 percent allocated to equities, at the median, and as a result lagged the pension segment by 200 basis points for the year.”