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Global Sustainability Index

as of 9/30/17

Fund Commentary

During the third quarter of 2017, the MSCI ESG Leaders Index returned 4.86%. ESG equities outperformed developed markets as represented by the MSCI World Index, which returned 4.97%. The Fund returned 4.89% for the three-month period ended September 30, 2017.

The top-performing sectors during the period were information technology and energy, returning 8.81% and 8.76%, respectively. Consumer staples and utilities were the bottom-performing sectors with returns of 0.53% and 1.51%, respectively. The top-performing countries were Norway and Portugal, returning 20.72% and 13.36%. New Zealand and Finland were the bottom-performing countries, with returns of 0.54% and 1.98%.

Global equity returns remained strong during the period. U.S. stocks continued to rally, with the S&P 500® Index posting all-time highs, and volatility at all-time lows. Market participants shrugged off geopolitical turmoil and a series of devastating hurricanes in the United States, focusing instead on continued global growth. The third quarter also saw the Federal Reserve announce that it would soon begin to unwind its balance sheet, while continuing to gradually increase short-term rates. These announcements, coupled with talk of U.S. tax changes, led to an increase in inflation expectations and interest rates, which on balance benefited stocks. Additionally, developed ex-U.S. markets continued their strong performance, led by Europe and Japan. Strong economic growth there has been supported by low global interest rates, modest inflation and stable labor markets. Manufacturing and industrial production in Japan and the eurozone continued to indicate economic improvements and imply future growth.

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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