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Fund Commentary

 
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Municipal Portfolio

as of 2/28/17

Fund Commentary

During February, the short duration municipal market continued to see strong demand for tax-exempt investments. Daily and weekly variable rate demand notes (VRDNs) continued to set at the higher end of the range, offering yields of greater than 80% of 30-day London Interbank Offered Rates (LIBOR) throughout the month. The daily and weekly VRDNs were attractive to a growing number of investors in a market where most fixed income participants are anticipating in increase in Federal Open Market Committee (FOMC) policy rates sooner rather than later. In addition to strong demand for VRDNs, short dated municipal notes (less than one year) were also well bid as investors looked for short duration tax-exempt investment options. During February, Northern Trust Asset Managers continued to invest cash balances primarily in daily and weekly municipal VRDNs. With tax-exempt VRDN rates setting the high end of their historical range, combined with their liquid trading characteristics, the VRDNs continued to be the investment of choice for portfolio cash investing during February.
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An investment in the Money Market Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds.

Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Institutional Funds before investing. Call 800-637-1380 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.

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