How did US institutional investors navigate the choppy waters of Q4, 2024?

There were some challenging conditions for investors in the last three months of 2024, as markets weighed the election outcome, digested its result, and mulled the potential impacts.

For some of the largest investors in the US these choppy waters provided the perfect opportunity to demonstrate their deft handling of portfolios, following four consecutive quarters of solid gains.

The 385 large institutions that make up the Northern Trust All Funds Over $100 Million plan universe manage a combined $1.4 trillion and produced a negative median return for Q4, 2024, of -0.8% as US equities gained, while there was weakness in global equities and the bond market.  There was a 2.4% gain for the S&P 500 Large Cap Index in the fourth quarter.

The Northern Trust Corporate (ERISA) universe median plan return was down -3.9% for the quarter, and the Northern Trust Public Funds universe posted a median return of -1.1% while the Northern Trust Foundation and Endowment universe was up by 0.01% for the period ending December 31.

“The fourth quarter was marked by peaks and valleys, as markets reacted to US election results in November and the Federal Reserve signaling in December that future interest rate cuts would be limited,” said John Turney, global head of Total Portfolio Solutions, Northern Trust Asset Servicing. “Despite this turbulence, major US equity indices closed out the quarter at all-time highs, fueled by strong gains from stocks tied to Artificial Intelligence.”

Looking at the full year for 2024, the median return was just shy of double digits at 9.4%, helped by the performance of domestic equities which outperformed global peers.