Global markets experienced a downturn during the first quarter of 2026, driven by escalating conflict in the Middle East, weakness in the technology sector, and renewed concerns about rising inflation. The Northern Trust All Funds Over $100 Million plan universe reported a median return of ‑0.5% for the quarter, its first negative quarterly return since 2024.
The Northern Trust Universe tracks the performance of 369 large U.S. institutional investment plans, with combined assets of approximately $1.5 trillion, which subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings.
All plan types reported flat to negative performance in the first quarter. The Northern Trust Corporate (ERISA) universe returned ‑0.6% at the median during the quarter, while the Northern Trust Public Funds universe reported a ‑0.2% median return and the Northern Trust Foundation and Endowment (F&E) universe posted a ‑0.4% median return.
U.S. equity markets began the year on a positive note, supported by strong corporate earnings, a resilient labor market and signs of moderating inflation. However, geopolitical developments involving conflicts among the U.S., Israel, and Iran — alongside disruptions to oil transport through the Strait of Hormuz — weighed on market performance. Software stocks declined sharply as investors assessed the impact of emerging AI technologies on future earnings. The Northern Trust US Equity program universe posted a -3.5% median return for the quarter and 17.0% for the year, while the Northern Trust Non-US Equity program universe had a median return of -0.5% in the quarter.
Nadia Cobalovic, global head of Omnium Services and Total Portfolio Solutions at Northern Trust Asset Servicing, said: “The first quarter highlights how global events and sector‑specific pressures can quickly reshape market dynamics. Institutional investors continue to focus on maintaining diversification and long‑term discipline as they navigate periods of heightened volatility and geopolitical uncertainty.”
Fixed income markets remained relatively stable during the quarter despite ongoing geopolitical tensions. Shifting expectations around the future path of monetary policy supported a stable rate environment, with market participants anticipating the possibility of further easing later in the year. The Northern Trust US Fixed Income program universe returned ‑0.1% for the quarter, in line with the Bloomberg US Aggregate Bond Index.
ERISA plan one, three, and five‑year median returns were 8.4%, 6.4%, and 2.5%, respectively. Within the Northern Trust ERISA universe, U.S. fixed income remains the largest median allocation, exceeding 50%, its highest level in the past five years.
Public Funds universe median returns for the one, three, and five‑year periods were 12.5%, 9.4%, and 6.4%, respectively. Public funds continue to allocate heavily to public markets, with median allocations of 26% to U.S. equity, 12% to international equity, and 23% to U.S. fixed income.
In the Foundations & Endowments universe, median one, three, and five‑year returns stood at 13.5%, 10.8%, and 6.9%, respectively. These institutions continue to increase exposure to private assets, with median private equity allocations exceeding 25% for the first time.
Results as of March 31, 2026:
|
|
1st Qtr |
1Yr |
3Yr |
5Yr |
|
ERISA |
-0.6% |
8.4% |
6.4% |
2.5% |
|
Public Funds |
-0.2% |
12.5% |
9.4% |
6.4% |
|
Foundations & Endowments |
-0.4% |
13.5% |
10.8% |
6.9% |
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2026, Northern Trust had assets under custody/administration of US$18.6 trillion, and assets under management of US$1.8 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.
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