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Fixed Income Taxable

High Yield Fixed Income

 
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TickerNAV AS OF 11/26/14
NHFIX$7.39 $0.01 Arrow Up Icon
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Snapshot
If you are an aggressive investor seeking high current income and the potential for capital appreciation for a portion of your assets, you may find this Fund provides an attractive complement to a well-diversified portfolio. This Fund is a good choice for long-term investors willing to assume the additional risks associated with investing in high yield securities including above-average share price fluctuations. Our knowledgeable investment team focuses primarily on high-yielding, lower-rated corporate bonds (those rated BB or below; these are commonly referred to as "non-investment grade" or "junk bonds"). We believe these securities offer the opportunity for higher income and greater total return potential than is generally available from high-quality, investment-grade securities.
Fund Objective
High Current Income
Fund Strategy
  • Invest primarily in high-yielding, lower-rated corporate debt. Lower-rated debt is commonly referred to as "junk bonds."
  • Take steps to properly manage downside risk by maintaining a broadly diversified portfolio.
  • Rely on our extensive credit research capabilities in an effort to manage risk and minimize defaults.
Investor Profile
If you are an aggressive investor seeking high current income and the potential for capital appreciation for a portion of your assets, you may find this Fund provides an attractive complement to a well-diversified portfolio. It is best suited for long-term investors willing to assume the additional risks associated with investing in high yield securities including above-average share price fluctuations.
Redemption Fee
2% on shares sold or exchanged within 30 days of purchase
Risk/Reward Potential
”Risk/Reward

Fund Literature

 
Important risk information can be found on the Portfolio tab.
CUSIP665162699
YTD Total Return3.95% (as of 11/26/14)
Distribution Rate*5.59% (as of 11/26/14)
30-Day SEC Yield w/ Waivers*5.85% (as of 10/31/14)
30-Day SEC Yield w/o Waivers*5.84% (as of 10/31/14)
Inception Date12/31/98
Total Net Assets$5,306,198,597 (as of 10/31/14)
Tax-Equivalent Distribution Rate*N/A
Tax-Equivalent 30-Day SEC Yield*N/A
*Distribution rate and tax-equivalent distribution rate represent the annualization of the Fund's distributions for the prior month ending on the date shown, including capital gain distributions. The 30-day SEC yield and tax-equivalent 30-day SEC yield represent the annualization of the Fund's net investment income, excluding capital gain income. The tax-equivalent distribution rate and tax-equivalent 30-day SEC yield are based on an assumed tax rate of 47.9% for Arizona, 55.7% for California and 43.4% for national municipal funds.

Total Returns

Total Returns for Month Ending 10/31/14
 Annualized
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
Incept.
High Yield Fixed Income1.02%-0.02%4.66%5.86%9.19%9.55%6.66%6.38%
Barclays U.S. Corporate
High Yield 2% Issuer
Capped Index
1.19%0.64%4.72%5.82%9.37%10.38%8.25%7.46%
Morningstar Cat. Avg.
High Yield Bond
0.79%0.00%3.52%4.50%8.31%9.24%6.83%N/A

Total Returns

Total Returns for Quarter Ending 09/30/14
 Annualized
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
Incept.
High Yield Fixed Income-2.16%-2.11%3.60%7.29%10.79%9.65%6.76%6.35%
Barclays U.S. Corporate
High Yield 2% Issuer
Capped Index
-2.10%-1.86%3.49%7.19%11.08%10.52%8.32%7.43%
Morningstar Cat. Avg.
High Yield Bond
-2.03%-2.03%2.71%6.00%9.98%9.39%6.93%N/A
Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here.

The Advisor has agreed to reimburse certain expenses of the Fund (excluding acquired fund fees and expenses; a portion of the compensation paid to each Trustee who is not an officer, director or employee of Northern Trust Corporation or its subsidiaries; expenses related to third-party consultants engaged by the Board of Trustees of the Trust; membership dues paid to the Investment Company Institute and Mutual Fund Directors Forum; extraordinary expenses; and interest, if any) to the extent the "Total Annual Fund Operating Expenses" exceed 0.80%. The contractual limitation may not be terminated before July 31, 2015 without the approval of the Board of Trustees. In the absence of fee waivers, yield, total return, growth since inception and dividends would have been reduced. Total return is based on net change in NAV assuming reinvestment of distributions.

Annual Expense Ratios

 
 Gross Expense RatioNet Expense Ratio
High Yield Fixed Income0.82%0.81%
Includes contractual expense reimbursements that, if not extended, will end on July 31, 2015.

Calendar Year Returns

 
       2013      2012      2011      2010      2009
High Yield Fixed Income7.68%15.08%3.75%13.60%33.48%
Barclays U.S. Corporate High Yield 2% Issuer Capped Index7.44%15.78%4.96%14.94%58.76%
Morningstar Category Avg. High Yield Bond6.90%14.67%2.83%14.24%46.70%
Performance quoted represents past performance and does not guarantee future results.
Important risk information can be found on the Portfolio tab.
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Portfolio Composition
   
Maturity DistributionFund
0 - 1 Year3.8%
1 - 3 Years2.1%
3 - 5 Years15.9%
5 - 10 Years69.4%
10+ Years8.8%
TOTAL100.0%
As of 10/31/14
Quality DistributionFundBenchmark
BBB2.2%0.0%
BB24.0%42.2%
B45.3%40.8%
CCC21.6%16.4%
CC to D0.4%0.4%
Not rated2.7%0.2%
Cash Equivalents3.8%0.0%
TOTAL100.0%100.0%
Sector WeightingsFundBenchmark
Communications17.6%18.1%
Consumer Cyclical17.0%14.0%
Financial Institutions15.0%11.0%
Energy12.8%15.4%
Consumer Non-Cyclical8.9%12.0%
Capital Goods8.2%8.7%
Basic Industry6.3%8.6%
Technology4.0%5.9%
Short-Term3.8%0.0%
Industrial Other2.7%1.4%
Transportation2.7%1.8%
Utilities1.0%3.1%
TOTAL100.0%100.0%
DateHoldings File
As of 09/30/14Insert Icon
As of 06/30/14Insert Icon

Fund Characteristics

Number of Holdings190
Average Duration4.4 YRS
Average Maturity6.5 YRS
Weighted Average Coupon7.00%
Income**$0.034401
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.1084
Capital Gain Income Last QuarterN/A
BenchmarkBarclays U.S. Corporate High Yield 2% Issuer Capped Index
Morningstar CategoryHigh Yield Bond
All data is as of date indicated and subject to change.
Bond Risk: Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates.
High-Yield Risk: Although a high-yield fund's yield may be higher than that of fixed-income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that a high-yield fund’s share price will decline.
Barclays U.S. Corporate High Yield 2% Issuer Capped Index is an unmanaged index that measures the market of U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bonds. It is a version of the Barclays High Yield Corporate Bond Index except it limits its exposure of each issuer to 2% of the total market value and redistributes any excess market value index-wide on a pro-rata basis. It is not possible to invest directly in an index.
Quality Distribution: Credit quality ratings are based on the conservative average of Moody's, Standard & Poor’s and Fitch ratings. If ratings from all three rating agencies disagree, the model assigns the middle rating to the security. If two of the three agree, the model assigns the rating from those two to the security. If none of these three rating agencies has assigned a rating, the Fund will assign a rating of not rated. The ratings, expressed in Standard & Poor’s nomenclature, range from AAA (extremely strong capacity to meet its financial commitment) to D (in default). Short-term ratings, expressed in Standard & Poor’s nomenclature, range from A-1 (obligor’s capacity to meet its financial commitment on the obligation is strong) to A-3 (exhibits adequate protection parameters). The ratings represent the rating agencies' opinions of the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality.
†Northern tax-exempt fixed income funds' and Northern High Yield Fixed Income Fund's Average Duration is calculated using the modified duration formula. Other Northern fixed income funds show the option-adjusted duration. Duration is a measure of a bond fund's sensitivity to changes in interest rates.
**Per share paid out October 23 with a record date of October 22. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.
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Richard J. Inzunza, CFA<sup>&reg;</sup>

Richard J. Inzunza, CFA®

Portfolio Manager

Northern High Yield Fixed Income Fund (NHFIX)

With Northern Trust Since 2007
Began Career in 1991

Richard J. Inzunza, CFA, Vice President of Northern Trust, is a senior fixed income portfolio manager and manages the Northern High Yield Fixed Income Fund.

Mr. Inzunza rejoined Northern Trust in August 2007 after serving as a senior fundamental analyst at Vanderbilt Capital Advisors from April 2007. From December 2004 to 2007, he was a senior analyst at Northern Trust. Prior to joining Northern Trust, Mr. Inzunza was a senior analyst for Principal Global Investors in London, England.

Mr. Inzunza received a B.S. in business administration - accounting from the California State University at Los Angeles and an MBA in finance from the William E. Simon Graduate School of Business Administration at the University of Rochester. He is an active CFA® charterholder and a member of the CFA Institute, CFA Society Chicago and CFA Society United Kingdom.

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Not FDIC insured | May lose value | No bank guarantee

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Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds before investing. Call 800-595-9111 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.

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