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Fixed Income Municipal

Tax-Exempt

 
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TickerNAV AS OF 09/16/14
NOTEX$10.68 $0.00 Same Icon
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Snapshot
For those investors who favor current income exempt from regular federal income tax, this Fund may be ideal for you. It is particularly well suited for income-oriented investors in higher tax brackets willing to assume some risk. Income from the Fund may be subject to federal alternative minimum tax (AMT), state and local taxes. Our approach is to invest in a broad range of investment-grade municipal instruments with an average maturity of 10 and 30 years. We believe a well-managed portfolio of longer-term municipal securities may increase investors' current tax-free income.
Fund Objective
Current Tax-Exempt Income
Fund Strategy
  • Maintain a dollar-weighted average maturity range, under normal circumstances, between 10 and 30 years. This segment of the municipal market, while potentially more volatile, also may provide higher yields than shorter-term securities.
  • Invest in high-quality securities, primarily investment-grade debt.
  • Select investments on the basis of their relative value with a focus on total return.
Investor Profile
If you are an investor who favors current income exempt from regular federal income tax, this Fund may be ideal for you. It is particularly well suited for income-oriented investors in higher tax brackets willing to assume some risk. Income from the Fund may be subject to federal alternative minimum tax (AMT), state and local taxes.
Risk/Reward Potential
”Risk/Reward
Institutional investor award winners are chosen by the editorial staff of Institutional Investor magazine based on their market intelligence, performance data and additional information received from the industry following a public call for nominations. Manager winners are also selected by the editors of the magazine based on the results of a survey conducted of U.S. institutional investors. Award noted above is not indicative of future performance.

Fund Literature

 
 
Important risk information can be found on the Portfolio tab.
CUSIP665162863
YTD Total Return8.28% (as of 09/16/14)
Distribution Rate*3.74% (as of 09/16/14)
30-Day SEC Yield w/ waivers*3.07% (as of 08/31/14)
30-Day SEC Yield w/o waivers*3.03% (as of 08/31/14)
Inception Date04/01/94
Total Net Assets$766,825,687 (as of 08/31/14)
Tax-Equivalent Distribution Rate*5.76% (as of 09/16/14)
Tax-Equivalent 30-Day SEC Yield*5.42% (as of 08/31/14)
*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 08/31/14
 Annualized
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
Incept.
Tax-Exempt1.34%1.67%8.72%12.23%5.35%5.37%4.65%5.35%
Barclays U.S. Municipal Index1.21%1.48%7.47%10.14%4.88%5.39%4.77%5.71%
Morningstar Cat. Avg.
Muni National Long
1.46%1.50%8.59%11.28%5.38%5.55%4.18%N/A

Total Returns

Total Returns for Quarter Ending 06/30/14
 Annualized
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
Incept.
Tax-Exempt0.02%2.76%6.96%7.25%5.76%5.68%4.80%5.31%
Barclays U.S. Municipal Index0.09%2.59%6.00%6.14%5.35%5.81%4.97%5.69%
Morningstar Cat. Avg.
Muni National Long
-0.10%2.79%6.87%5.89%5.61%6.06%4.33%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 0.45%. 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
Tax-Exempt0.50%0.46%
Includes contractual expense reimbursements that, if not extended, will end on July 31, 2015.

Calendar Year Returns

 
       2013      2012      2011      2010      2009
Tax-Exempt-3.64%7.94%11.85%0.21%12.36%
Barclays U.S. Municipal Index-2.55%6.78%10.70%2.38%12.91%
Morningstar Category Avg. Muni National Long-4.59%8.87%10.64%1.65%17.30%
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 Year4.3%
2 - 5 Years8.0%
6 - 10 Years10.6%
11 - 20 Years30.2%
21 - 30 Years40.0%
31+ Years6.9%
TOTAL100.0%
As of 07/31/14
Quality DistributionFundBenchmark
AAA22.5%13.1%
AA59.0%49.5%
A14.3%32.7%
BBB0.0%4.7%
SP1/MIG11.3%0.0%
Committed Cash2.9%0.0%
TOTAL100.0%100.0%
Sector WeightingsFundBenchmark
Revenue65.3%67.2%
General Obligation16.6%27.9%
Insured8.8%0.3%
Government-Backed6.4%4.6%
Committed Cash2.9%0.0%
TOTAL100.0%100.0%
DateHoldings File
As of 06/30/14Insert Icon
As of 03/31/14Insert Icon

Fund Characteristics

Number of Holdings157
Average Duration4.7 YRS
Average Maturity16.8 YRS
Weighted Average Coupon4.57%
Income**$0.0319
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.0990
Capital Gain Income Last QuarterN/A
BenchmarkBarclays U.S. Municipal Index
Morningstar CategoryMuni National Long
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.
Tax-Free/AMT Risk: Tax-exempt funds’ income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax.
Barclays U.S. Municipal Index is an unmanaged index of investment grade (Baa3 or better) tax-exempt bonds with a remaining maturity of at least one year. 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.
Distribution Calculations: All distribution calculations (Maturity Distribution, Sector Weightings and Quality Distribution) are measured on a trade date basis and are adjusted for uninvested cash from the market value used to compute the percentage calculations.
†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 July 24 with a record date of July 23. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.
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Timothy T.A. McGregor, CFA<sup>&reg;</sup>

Timothy T.A. McGregor, CFA®

Portfolio Manager

Northern Intermediate Tax-Exempt Fund (NOITX)
Northern Tax-Exempt Fund (NOTEX)

With Northern Trust Since 1989
Began Career in 1985

Timothy T.A. McGregor, Senior Vice President of Northern Trust, manages the Northern Intermediate Tax-Exempt Fund and Northern Tax-Exempt Fund.

Mr. McGregor began his career at Northern Trust in 1989 and has held positions as an investment manager representative and tax-exempt fixed income manager for high-net-worth individuals. He has managed the Northern Tax-Exempt Fund since the beginning of 1998 and Northern Intermediate Tax-Exempt Fund since the end of 2000.

Mr. McGregor received a B.S. in economics with a minor in East Asian studies from Indiana University. 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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