CHICAGO, Oct. 26 /PRNewswire-FirstCall/ -- Northern Trust announced today that U.S. institutional investment plan sponsors posted a second consecutive quarter of strong gains in the period ending September 30, 2009, with a median return of 10.9 percent for the third quarter, according to data in the Northern Trust Universe. The Northern Trust Universe represents the performance results of more than 300 large institutional investment plans, with a combined asset value of approximately $596 billion, which subscribe to Northern Trust performance measurement services.

"The last five quarters have been a tale of two extremes for institutional plan sponsors, reflecting the volatility of global markets," said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. "Since mid-2008, institutional investors have experienced two of their worst quarters and two of their best quarters, in terms of performance. In fact, the second and third quarters of 2009 are the best back-to-back quarters on record, according to our database, which has tracked institutional investment performance since 1997."

In the third quarter, Corporate Pension Plans posted a median return of 12.7 percent, while Public Funds were up 11.6 percent and Foundations & Endowments gained 9.9 percent. For the past 12 months, Corporate Plans and Public Funds had moved into positive territory with median returns of 2.5 percent and 0.2 percent, respectively, while Foundations & Endowments had slightly negative returns (-1.9 percent) at the median.

The top-performing asset categories in the third quarter were emerging market equities (21 percent), small-cap stocks (19 percent) and high yield debt (6 percent), according to indices used as benchmarks for plans in the Northern Trust Universe. This compares to a 15.6 percent gain for the Standard & Poor's 500 Index and 3.74 percent for the Barclays Capital Aggregate Index and, two key measures of U.S. stock and bond market performance.

"The riskiest subsets of the major asset classes were the leaders last quarter," Frieske said. "Those returns drove the double-digit gains for Corporate and Public plans, which maintain large allocations to traditional stock and bond investments, while F&E funds' exposure to private equity and hedge funds hampered their returns somewhat. Over the last 12 months, private equity has lost almost 17 percent and hedge fund returns have been flat for plans in the Northern Trust Universe."

The strong third-quarter returns for institutional investors, following a 10.2 percent gain in the second quarter, have improved longer-term numbers for plans tracked in the Northern Trust Universe. The three and five-year returns are:

                              3-Year     5-Year
    Corporate Pension Plans   (-0.1)%     4.6%
    Public Funds              (-0.7)%     4.3%
    Foundations & Endowments  (-0.4)%     4.4%

As a part of its client-focus philosophy, Northern Trust has provided risk and performance services for more than three decades. Northern Trust's Investment Risk & Analytical Services capabilities include risk monitoring and measurement, performance evaluation and other specialty services, with continuing investment in research and client-focused product development.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2009, Northern Trust had assets under custody of US$3.6 trillion, and assets under investment management of US$611 billion. For 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com.

SOURCE Northern Trust Corporation