The study has also revealed that for Q1 2012, Public Funds had set the pace with a median return of 7.7% and Corporate ERISA Pension Plans and the Foundations & Endowments segment each gained 6.9% at the median.
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William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services (IRAS) remarked "The main driver of first quarter performance was US equities, a core holding in most institutional plans."
"After positive returns in 10 of the last 12 quarters, the median plan has gained 15% in the past three years. Active investment management has also helped plans in the Northern Trust Universe to generate returns ahead of their assigned benchmarks, according to our data," he further added.
In Q1, the median US Equity Program in the Northern Trust Universe gained 12.9%, 4 basis points ahead of the Russell 3000 Index return, while overall, institutional plan sponsors fared ahead of their assigned benchmarks by about 2 basis points.
It has been observed that over a 10-year period, Institutional Plan Sponsors have been able to generate about 30 basis points of excess performance annually.
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By GlobalDataFurther, International Equity Programs gained almost 12% in Q1 while Fixed Income Programs were up 1.6%.
In the alternatives, Real Estate gained 2.6%; Private Equity was up 2.2% and Hedge Funds returned 4.8% for the quarter, rebounding from the previous quarter’s 0.7% loss.
The study has also highlighted the fact that plan sponsors have made significant shifts in asset allocation over the past decade.
Across the universe base, the allocation to US equity decreased from 50% of total assets in 2000 to 32% in mid-2011, while in the same period, private equity allocations rose from 3.5% of total assets to 8%, and allocations to hedge funds went from near zero to more than 5% of all mandates.
"Investing in alternative assets brings the promise of better than public market returns but also the reality of administrative demands brought on by the lack of transparency and liquidity inherent in these asset classes," said Jeff Feeney, North America Region head of IRAS.
