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Multi-Manager Global Real Estate

as of 9/30/17

Fund Commentary

The global real estate market, as measured by the FTSE® EPRA®/NAREIT® Global Index, returned 3.15% during the third quarter. All regions with the exception of Japan posted positive returns. The emerging markets were the top-performing segment, with a return of nearly 17%. Returns for North America, which were flat, trailed other regions. The strongest performing property categories were diversified, industrial and self-storage, while the healthcare sector posted a loss. The retail sector also experienced weak returns due to concerns regarding the impact of online retail on brick-and-mortar stores.

The Multi-Manager Global Real Estate Fund returned 0.71% during the quarter, underperforming the benchmark. The Fund’s lack of exposure to the emerging markets, particularly China, represented the largest detractor from relative performance. An overweight position and negative stock selection in the United States also detracted, though stock selection in Europe contributed. In terms of property-type exposure, positions in the residential, retail and senior living areas hindered results.

Sub-adviser Brookfield lagged the FTSE® EPRA® /NAREIT® Global Index during the quarter. Stock selection in the United Kingdom and an underweight in health care were positive contributors, but were offset by Brookfield’s underweight in the emerging markets. Sub-adviser Delaware generated positive stock selection in Continental Europe and the office sector, but underperformed primarily due to an underweight in China and weak stock selection within U.S. issues.

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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