Northern Trust Continues Decline in Q2 2022

Northern Trust, a leading financial services company, has revealed its data for the second quarter ended June 30, which showed the worst performing quarter since Q1 2020.

The Northern Trust U.S. equity program universe median return fell 16.4% for the quarter ending June 30. The S&P 500 large cap index was down 16.1% during the three-month period. The Fed's 50 basis point rate increase on May 4 also accelerated selling in the bond market, and the Northern Trust US Fixed Income program universe median return was down -5.0% for the quarter.

The Northern Trust Corporate (ERISA) universe median return for the second quarter was -10.9%, while its one-year return remained in negative territory at -14.6%. The U.S. fixed income asset class remains the largest ERISA plan allocation at a median allocation of 48.7%. It grew 3.0% during the period because of lower equity valuations. The median allocation for U.S. equity was 19.6%.

The Northern Trust Public Funds universe median returned -7.9% in the quarter. As of June 30, the end of the 2022 fiscal year for most U.S. public funds, the median one-year return for plans in the Northern Trust Public Funds universe stood at -7.1%. Public funds have relatively higher equity allocations, with median second quarter allocations to U.S. and international equity at 28.9% and 13.2% respectively. The median exposure to U.S. fixed income for public funds fell 0.5% to 20.7%.

The Northern Trust Foundation and Endowment (F&E) universe produced a -7.0% median return for the second quarter. The F&E median U.S. equity allocation dropped to 19.1% in Q2 from 20.8% in Q1. The median allocation to private equity was 24.6% while the median allocation to U.S. fixed income remained below 10%.