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Specialty Blend

The Northern Multi-Manager Mid Cap Fund chooses outside advisors that use complmentary approaches to stock selection

It’s a fact of investing life that no single managerial style works best in all market environments. Sometimes growth stocks lead the pack and at other times value outperforms. Even within those two main stylistic categories, there can be subtle differences that produce surprisingly disparate results.

So why not own them all? Or at least more than one.

That’s the concept behind the Northern Multi-Manager Mid Cap Fund, which blends three outside advisers in carefully considered proportions. This strategy aims to produce a portfolio that may provide shareholders with both upside performance and downside protection.

“Our experience tells us that if we pick the right outside advisers and merge their stock-picking skills into a single fund, the whole could be greater than the sum of the parts,” said Jessica Hart, the Fund’s co-portfolio manager.

One-stop shopping
The Northern Multi-Manager Mid Cap Fund combines specialist advisers using the relative value, deep value and growth at a reasonable price (GARP) strategies within the mid-cap universe of companies.

The outside firms were not chosen at random.

Northern Trust has constructed multi-manager portfolios for institutional clients since 1979. Hart, her Fund co-portfolio manager Chris Vella and their colleagues have analyzed the stock-picking prowess of thousands of equity managers worldwide.

But the construction process doesn’t end there.

“We back-test various combinations of advisers in different market environments to identify the blend that might give us what we want,” Hart said. Her wish list is simple: match the benchmark on the upside and beat it on the downside.

Of course, there are no guarantees that the Northern Multi-Manager Mid Cap Fund will meet such an ambitious goal. No matter their skill or style, most advisers experience declines during periods of market weakness. Hart noted, however, that Northern’s multi-manager strategy often has been successful at dampening downside volatility without necessarily sacrificing upside performance.

In the middle
Besides the stylistic diversification that the multi-manager approach provides, Hart said it could be important for investors to gain exposure to the mid-cap sector of the domestic equity market as well.

“This is a capitalization sector that sometimes is overlooked given the tendency to divide the equity universe into large and small,” she said. “But medium-sized companies as a whole have performed very competitively over the long term.”

And, she believes, that overall performance could be further enhanced by blending specialist managers approaching the mid-cap sector in different ways.

Because for investors, variety may be more than just the spice of life.

Past performance is no guarantee of future results.
Diversification does not guarantee a profit nor protect against a loss.

Equity Risk: Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.

Mid Cap Risk: Mid-capitalization stocks typically carry additional risk, since smaller companies generally have higher risk of failure and, historically, their stocks have experienced a greater degree of volatility.

Not FDIC insured | May lose value | No bank guarantee

You could lose money by investing in the Money Market Funds. Although each of the Money Market Funds seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.

The Money Market Fund and the Municipal Money Market Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors.

An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”), any other government agency, or The Northern Trust Company, its affiliates, subsidiaries or any other bank.

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

Shares of the Northern Funds are offered only by a current Prospectus and are intended solely for persons to whom shares of US registered funds may be sold. This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Northern Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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