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Fixed Income Taxable

Multi-Manager High Yield Opportunity

 
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TickerNAV AS OF 10/20/14
NMHYX$10.49 $0.02 Arrow Up Icon
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Snapshot
The Multi-Manager High Yield Opportunity Fund is designed to provide competitive performance in a broad range of market environments. The highly diversified, opportunistic Fund can invest in high yield corporate securities as well as foreign bonds, emerging markets, bank loans, convertibles, preferreds, mortgages, REITs, equities, munis and closed-end high yield funds. Our approach blends specialist managers from a broad universe of investment managers into a single fund. In an effort to provide the best combination of risk and return, the Fund employs two investment styles intended to complement each other: a relative-value strategy, which will provide more consistent characteristics to the traditional high yield sectors, and an opportunistic high yield strategy, which will provide exposure to out-of-benchmark sectors.
Fund Objective
Total Return
Fund Strategy
  • Strive to maintain a highly diversified, opportunistic investment strategy that can invest in high yield corporate securities as well as foreign bonds, emerging markets, bank loans, convertibles, preferreds, mortgages, REITs, equities, municipals and closed-end high yield funds.
  • Select complementary manager from a broad universe of investment managers.
  • Blend managers into a single fund in an effort to provide an attractive combination of risk and return.
Investor Profile
If you're looking for a total-return-oriented high yield fund that's designed to provide competitive performance in a broad range of market environments, you may want to consider the Multi-Manager High Yield Opportunity Fund. The highly diversified, multi-style Fund can invest in high yield corporate securities as well as foreign bonds, emerging markets, bank loans, convertibles, preferreds, mortgages, REITs, equities, munis and closed-end high yield funds. Despite the Fund's opportunistic investment strategy, it can be used as the primary high yield allocation in portfolios.
Redemption Fee
2% on shares sold or exchanged within 30 days of purchase
Risk/Reward Potential
”Risk/Reward
Sub-Adviser Allocations

Sub-Advisers and Allocations subject to change at any time.

SUB-ADVISERTARGET ALLOCATIONROLE IN PORTFOLIO
Neuberger Berman Fixed Income LLC 40% Traditional high-yield strategy focusing on credit selection within the benchmark sectors.
Loomis, Sayles & Company, L.P. 30% Opportunistic high-yield strategy employing a bottom-up investment approach focused on attractively priced credits. The portfolio will provide exposure to out-of-benchmark sectors. The portfolio is designed to provide competitive performance in a broad range of market environments.
DDJ Capital Management, LLC 30% A concentrated bottom-up oriented strategy that specifically focuses on the middle market segment of the high yield universe in addition to leveraged loans.
Important risk information can be found on the Portfolio tab.
CUSIP665162442
YTD Total Return3.19% (as of 10/20/14)
Distribution Rate*4.88% (as of 10/20/14)
30-Day SEC Yield w/ waivers*4.99% (as of 09/30/14)
30-Day SEC Yield w/o waivers*4.90% (as of 09/30/14)
Inception Date09/23/09
Total Net Assets$615,868,024 (as of 09/30/14)
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 Quarter Ending 09/30/14
 Annualized
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
Incept.
Multi-Manager High
Yield Opportunity
-2.30%-2.18%3.09%6.35%10.43%8.82%N/A8.72%
BofA Merrill Lynch U.S.
High Yield Master II
Constrained Index
-2.10%-1.92%3.61%7.23%10.94%10.37%N/A10.39%
Morningstar Cat. Avg.
High Yield Bond
-2.03%-2.03%2.71%6.00%9.98%N/AN/AN/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 0.90%. 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
Multi-Manager High Yield Opportunity1.00%0.91%
Includes contractual expense reimbursements that, if not extended, will end on July 31, 2015.

Calendar Year Returns

 
   2013  2012  2011  2010
Multi-Manager High Yield Opportunity6.67%16.65%1.41%12.81%
BofA Merrill Lynch U.S. High Yield Master II Constrained Index7.41%15.55%4.37%15.05%
Morningstar Category Avg. High Yield Bond6.90%14.67%2.83%14.24%
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 - 3 Years11.4%
3 - 5 Years14.6%
5 - 7 Years31.7%
7 - 10 Years30.3%
10+ Years12.0%
TOTAL100.0%
As of 08/31/14
Quality DistributionFundBenchmark
AAA0.1%0.0%
AA0.1%0.0%
A2.1%0.0%
BBB1.8%0.6%
BB21.9%38.0%
B39.9%42.6%
CCC or below24.2%18.7%
Not Rated8.8%0.1%
Cash Equivalents1.1%0.0%
TOTAL100.0%100.0%
Sector WeightingsFund   Benchmark
Industrials68.3%84.2%
Preferreds0.7%0.0%
Foreign1.6%0.0%
Financials7.4%11.8%
Bank Loans3.8%0.0%
Convertibles3.7%0.0%
Short Term7.6%0.0%
Emerging Markets Debt2.5%0.1%
Residential Mortgage-Backed Securities1.7%0.0%
Utilities1.6%3.0%
Commercial Mortgage-Backed Securities0.5%0.0%
Other0.4%0.9%
Asset-Backed0.2%0.0%
TOTAL100.0%100.0%
DateHoldings File
As of 09/30/14Insert Icon
As of 06/30/14Insert Icon

Fund Characteristics

Number of Holdings573
Average Duration4.0 YRS
Average Maturity5.1 YRS
Weighted Average Coupon6.50%
Yield to Maturity5.55%
Income**$0.0484
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.1412
Capital Gain Income Last QuarterN/A
BenchmarkBofA Merrill Lynch U.S. High Yield Master II Constrained 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.
BofA Merrill Lynch U.S. High Yield Master II Constrained Index contains all securities in the BofA Merrill Lynch U.S. High Yield Master II Index, but caps issuer based on their current amount outstanding, provided the total allocation to an individual issuer does not exceed 2%. The Index tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. It is not possible to invest directly in an index.
Quality Distribution: Credit quality ratings are based on converting the available Moody's, Standard & Poor's, and/or Fitch ratings to a common numerical basis and averaging that result. 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 Standard & Poor's short-term municipal rating of SP1 reflects a strong capacity to pay principal and interest (an issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation). The Moody's short-term municipal rating of MIG1 denotes superior credit quality (excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing). Committed Cash includes any traded cash (forward settling trades), the sweep vehicle and commercial paper. 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.
Characteristics: Benchmark and Fund analytics have been calculated using a third party vended model. All material has been obtained from sources believed to be reliable, but the accuracy, completeness and interpretation cannot be guaranteed. Information contained herein is current as of the date appearing in this material only and is subject to change without notice. Certain benchmark calculations may not match the published benchmark characteristics.
†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 August 25 with a record date of August 22. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.
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Jessica K. Hart

Jessica K. Hart

Portfolio Manager

Northern Multi-Manager Emerging Markets Debt Opportunity Fund (NMEDX)
Northern Multi-Manager Emerging Markets Equity Fund (NMMEX)
Northern Multi-Manager Global Listed Infrastructure Fund (NMFIX)
Northern Multi-Manager Global Real Estate Fund  (NMMGX)
Northern Multi-Manager High Yield Opportunity Fund (NMHYX)
Northern Multi-Manager International Equity Fund (NMIEX)
Northern Multi-Manager Large Cap Fund  (NMMLX)
Northern Multi-Manager Mid Cap Fund  (NMMCX)
Northern Multi-Manager Small Cap Fund (NMMSX)

With Northern Trust Since 2000
Began Career in 1999

Jessica K. Hart, Senior Vice President of Northern Trust leads the global fund construction, supports the manager research and program management groups to create multi-manager solutions for the manager of managers practice.

Ms. Hart joined Northern Trust in 2000 and has since been responsible for due diligence on prospective managers, performance and oversight of all multi-manager funds, portfolio construction and a key member of the management team that developed portfolio optimization processes for Northern Trust's clients.

Ms. Hart received a B.S. in economics from the University of Wisconsin and an MBA from New York University, Stern School of Business.

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Christopher E. Vella, CFA<sup>&reg;</sup>, CIO

Christopher E. Vella, CFA®, CIO

Portfolio Manager

Northern Multi-Manager Emerging Markets Debt Opportunity Fund (NMEDX)
Northern Multi-Manager Emerging Markets Equity Fund (NMMEX)
Northern Multi-Manager Global Listed Infrastructure Fund (NMFIX)
Northern Multi-Manager Global Real Estate Fund  (NMMGX)
Northern Multi-Manager High Yield Opportunity Fund (NMHYX)
Northern Multi-Manager International Equity Fund (NMIEX)
Northern Multi-Manager Large Cap Fund  (NMMLX)
Northern Multi-Manager Mid Cap Fund  (NMMCX)
Northern Multi-Manager Small Cap Fund (NMMSX)

With Northern Trust Since 2004
Began Career in 1993

Christopher E. Vella, CFA®, is Chief Investment Officer with responsibility for manager research and portfolio construction processes across Northern Trust's market segments. He is responsible for the global manager research platform, consisting of approximately $60B in assets across 200 investment strategies. He manages a team of approximately 25 investment professionals across all traditional asset classes. The team covers all external manager relationships on behalf of Northern Trust's private and institutional clientele.

Prior to joining Northern Trust, Mr. Vella was a founding member of Goldman Sach's external manager business which consists of institutional and private client assets. While at Goldman, he managed the international and emerging markets equity team. Prior to Goldman Sachs, Mr. Vella spent close to 6 years at SEI Investments working primarily on international equity and emerging markets equity manager research. He has over 17 years of manager research experience.

Mr. Vella graduated Phi Beta Kappa from Lehigh University with a B.S. in finance and a minor in applied mathematics. He is an active CFA® charterholder.

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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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