- Global markets faced mixed results in Q1 2025 due to uncertain U.S. trade policies and rising geopolitical tensions.
- Northern Trust (NTRS, Financial) All Funds Over $100 Million plan universe had a median return of 0.7%.
- U.S. equities underperformed with a median return of -4.6%, while non-U.S. equities achieved a 4.9% median return.
The global financial landscape in the first quarter of 2025 was marked by mixed results as uncertainty surrounding U.S. trade policies, continuous global inflation, and escalating geopolitical tensions influenced market dynamics. According to Northern Trust's all funds plan universe, which monitors 377 large U.S. institutional investment plans valued at over $1.4 trillion, the median return stood at 0.7% for the quarter.
Among institutional segments, the Northern Trust Corporate (ERISA) universe showcased the strongest investment performance, reporting a median return of 2.2%. In comparison, Northern Trust Public Funds and Northern Trust Foundation and Endowment (F&E) universes saw median returns of 1.1% and 0.5%, respectively, for the quarter ending March 31.
U.S. equities, a significant component for many institutional plans, underperformed with a median return of -4.6%, trailing the broader S&P 500's return of -4.3% but outperforming the Russell 3000's -4.7%. Conversely, non-U.S. equities in the Northern Trust universe achieved a robust 4.9% median return, in contrast with the MSCI World Ex-US Net's 6.2% return.
John Turney, Global Head of Total Portfolio Solutions at Northern Trust Asset Servicing, noted that the first quarter unfolded amid significant uncertainty, affecting U.S. equities as new global tariffs implemented in February and March led to a shift in market sentiment. Plans that allocated more towards fixed income and alternative assets tended to perform better than those heavily invested in equities.
Bond markets emerged as a safe haven amidst this volatility. With interest rates declining during the quarter, the Northern Trust U.S. Fixed Income program universe posted a median return of 2.6%. The ERISA plan universe, with a median fixed income allocation of 54.5%, benefitted from this trend, showcasing stable returns owing to the substantial bond investments aimed at aligning with future benefit obligations.
In conclusion, the mixed performance across different asset classes and institutional segments underscores the ongoing challenges posed by a volatile economic and geopolitical environment. As of March 31, 2025, Northern Trust Corporation (NTRS, Financial) remains a leading provider in asset management and wealth services, holding assets under custody/administration valued at $16.9 trillion and assets under management of $1.6 trillion.
