Confluence Loads Up on 72,867 Northern Trust Shares in Q2 2025

Key Points

• Confluence increased its stake in Northern Trust by 72,867 shares, with a transaction value of $8.21 million.

• Post-trade, Confluence's position in the financial services company is 1,184,610 shares, valued at $150.20 million as of June 30, 2025.

• Northern Trust is now Confluence’s 5th-largest reported holding by market value.

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What happened

According to a July 1, 2025, SEC filing, Confluence bought 72,867 additional shares of Northern Trust(NASDAQ:NTRS) during fiscal Q2 2025, bringing its total to 1,184,610 shares. The $8.21 million trade increased the fund's reported position value to $150.2 million as of fiscal Q2 2025. The transaction accounted for 0.12% of its $7.08 billion in U.S. equity assets under management as of the filing.

What else do you need to know?

Northern Trust represents 2.1% of Confluence’s U.S. equity assets as of the end of fiscal Q2 2025.

Top five holdings after the filing:

1. iShares 0-3 Month Treasury Bond ETF (SGOV): $238.6 million (3.4% of 13F AUM).
2. Chubb (CB): $158.9 million (2.2% of AUM).
3. Snap-on (SNA): $156.1 million (2.2% of AUM).
4. Paychex (PAYX): $152 million (2.1% of AUM).
5. Northern Trust (NTRS): $150.2 million (2.1% of AUM).

• Stock price on July 8, 2025, is $127.90; One-year return is 53.6%; S&P 500 alpha is +41.8 percentage points over the past year.
• Forward P/E is 15.7, and shares are trading 3.3% below the 52-week high as of July 8.

Company overview

Note: TTM figures are as of March 31, 2025.

Company snapshot

• Offers wealth management, asset servicing, asset management, and banking solutions, with revenue streams from custody, fund administration, investment management, and related financial services.
• Generates income through fees for asset servicing, investment management, and banking services, serving both institutional and private clients globally.
• Primary customers include corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, high-net-worth individuals, and families.

Northern Trust is a leading global provider of asset servicing and wealth management solutions, with a strong institutional client base and a significant presence in the high-net-worth segment. The company leverages its expertise in custody, fund administration, and investment management to deliver integrated financial services at scale. Its long-standing reputation and diversified product suite support its competitive position in the financial services industry.

Foolish take

Northern Trust saw both its net interest income and trust fees rise solidly in the first quarter of 2025, driving positive operating leverage. To better manage a stabilizing interest rate environment and near-term economic uncertainty, management has been fine-tuning the company’s wealth management strategy by offering family office services, alternative investments, and liquidity solutions.

The company rolled out its dedicated ultra-high net worth segment (named Family Offices Solutions), and it is on track to double capital raises for 2025 in the form of alternative investments versus previous-year averages. Fears of economic uncertainty helped pull in more deposits as investors were mostly in “risk-off” mode, wanting to hold on to cash, thus increasing the bank’s liquidity position.

In short, Northern Trust managed to pull in a lot more funds than in prior quarters.

Not surprisingly, the stock is up almost 25% year to date. However, with a trailing P/E ratio of just 12, and below the five-year average of 14.8, shares still look cheap. The best part is, Northern Trust has a predominantly non-risky portfolio of assets, with non-interest income contributing nearly 71% of total revenue. In other words, the company’s variable costs -- and hence uncertainty in business -- are quite low, unlike banks that rely more on interest income for profit.

Asset and wealth management fees seem to be the way forward for financial services companies, and Northern Trust seems to be ticking all the correct boxes right now. Moreover, a dividend yield of 2.35% isn’t too shabby for a relatively non-risky business in financial services.

If you are looking to diversify and are looking for exposure to the financial services industry, Northern Trust is a reasonably good bet right now.

Glossary

• 13F AUM: Assets under management reported on SEC Form 13F, covering U.S. equity holdings by institutional investment managers.
• SEC filing: Official document submitted to the U.S. Securities and Exchange Commission, disclosing financial or ownership information.
• Alpha: Measure of investment performance relative to a benchmark index, indicating outperformance or underperformance.
• Dividend yield: Annual dividend income expressed as a percentage of the stock's current price.
• Forward P/E: Price-to-earnings ratio using forecasted future earnings, estimating how much investors pay per dollar of expected profit.
• GAAP: Generally Accepted Accounting Principles; standardized rules for financial reporting in the United States.
• CAGR: Compound annual growth rate; average annual growth rate of a value over a specified period, accounting for compounding.
• Custody: Financial service involving the safekeeping and administration of assets on behalf of clients.
• Fund administration: Back-office services for investment funds, including accounting, valuation, and regulatory reporting.
• Asset servicing: Range of administrative and operational services for managing and safeguarding financial assets.
• High-net-worth individuals: People with substantial investable assets, typically above a set threshold, targeted by specialized financial services.
• Sovereign wealth funds: State-owned investment funds managing national reserves, often invested globally across various asset classes.

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Isac Simon has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.