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Fixed Income Taxable

High Yield Fixed Income

TickerNAV AS OF 07/02/15
NHFIX$7.06 $0.00 Same Icon

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If you are an aggressive investor seeking high current income and the potential for capital appreciation for a portion of your assets, you may find this Fund provides an attractive complement to a well-diversified portfolio. This Fund is a good choice for long-term investors willing to assume the additional risks associated with investing in high yield securities including above-average share price fluctuations. Our knowledgeable investment team focuses primarily on high-yielding, lower-rated corporate bonds (those rated BB or below; these are commonly referred to as "non-investment grade" or "junk bonds"). We believe these securities offer the opportunity for higher income and greater total return potential than is generally available from high-quality, investment-grade securities.
Fund Objective
High Current Income
Fund Strategy
  • Invest primarily in high-yielding, lower-rated corporate debt. Lower-rated debt is commonly referred to as "junk bonds."
  • Take steps to properly manage downside risk by maintaining a broadly diversified portfolio.
  • Rely on our extensive credit research capabilities in an effort to manage risk and minimize defaults.
Investor Profile
If you are an aggressive investor seeking high current income and the potential for capital appreciation for a portion of your assets, you may find this Fund provides an attractive complement to a well-diversified portfolio. It is best suited for long-term investors willing to assume the additional risks associated with investing in high yield securities including above-average share price fluctuations.
Redemption Fee
2% on shares sold or exchanged within 30 days of purchase
Risk/Reward Potential
Overall Morningstar RatingTM

Among 603 high yield bond funds derived from a weighted average of the fund's 3-, 5- and 10-year risk-adjusted returns as of 5/31/15.

High Yield Fixed Income received 4 stars for the 3-year rating among 603 high yield bond funds, 4 stars for the 5-year rating among 516 funds and 3 stars for the 10-year rating among 360 funds.

Past performance is no guarantee of future results. Ratings reflect fee waivers in effect; in their absence, ratings may have been lower.

Star ratings are based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The overall rating is a weighted average of the 3-, 5-, and 10-year (if applicable) returns. 5 stars = top 10% of funds in an asset category; 4 stars = next 22.5% of funds; 3 stars = next 35%; 2 stars = next 22.5% and 1 star = next 10%. A fund must be in existence three years to be rated. Ratings are subject to change monthly.

©2015 Morningstar, Inc. All Rights Reserved. Morningstar and/or its content providers are the proprietors of this information; do not permit its unauthorized copying or distribution; do not warrant it to be accurate, complete or timely; and are not responsible for damages or losses arising from its use.

Important risk information can be found on the Portfolio tab.
YTD Total Return2.63% (as of 07/02/15)
Distribution Rate*5.46% (as of 07/02/15)
30-Day SEC Yield w/ Waivers*5.71% (as of 05/31/15)
30-Day SEC Yield w/o Waivers*5.66% (as of 05/31/15)
Inception Date12/31/98
Total Net Assets$5,390,322,337 (as of 05/31/15)
Tax-Equivalent Distribution Rate*N/A
Tax-Equivalent 30-Day SEC Yield*N/A
*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, 56.7% for California and 43.4% for national municipal funds.

Total Returns

Total Returns for Month Ending 05/31/15
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
High Yield Fixed Income0.48%1.45%3.71%0.92%7.83%8.72%6.76%6.23%
Barclays U.S. Corporate
High Yield 2% Issuer
Capped Index
Morningstar Cat. Avg.
High Yield Bond

Total Returns

Total Returns for Quarter Ending 03/31/15
    Month   3-Month     YTD  1-Year  3-Year  5-Year  10-Year Since
High Yield Fixed Income-0.20%2.02%2.02%1.04%6.87%7.95%6.62%6.19%
Barclays U.S. Corporate
High Yield 2% Issuer
Capped Index
Morningstar Cat. Avg.
High Yield Bond
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 0.80%. 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
High Yield Fixed Income0.82%0.81%
Includes contractual expense reimbursements that, if not extended, will end on July 31, 2015.

Calendar Year Returns

       2014      2013      2012      2011      2010
High Yield Fixed Income2.11%7.68%15.08%3.75%13.60%
Barclays U.S. Corporate High Yield 2% Issuer Capped Index2.46%7.44%15.78%4.96%14.94%
Morningstar Category Avg. High Yield Bond1.11%6.90%14.67%2.83%14.24%
Performance quoted represents past performance and does not guarantee future results.
Important risk information can be found on the Portfolio tab.
Portfolio Composition
Maturity DistributionFund
0 - 1 Year2.3%
1 - 3 Years2.2%
3 - 5 Years18.4%
5 - 10 Years67.6%
10+ Years9.5%
As of 05/31/15
Quality DistributionFundBenchmark
CC to D0.4%0.3%
Not rated1.9%0.1%
Cash Equivalents2.3%0.0%
Sector WeightingsFund   Benchmark
Financial Institutions15.5%10.7%
Consumer Cyclical15.2%15.1%
Capital Goods7.8%7.9%
Consumer Non-Cyclical7.1%13.5%
Basic Industry5.8%7.9%
Industrial Other2.1%1.4%
DateHoldings File
As of 03/31/15Insert Icon
As of 12/31/14Insert Icon

Fund Characteristics

Number of Holdings192
Average Duration4.3 YRS
Average Maturity6.6 YRS
Weighted Average Coupon6.80%
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.1095
Capital Gain Income Last QuarterN/A
BenchmarkBarclays U.S. Corporate High Yield 2% Issuer Capped Index
Morningstar CategoryHigh Yield Bond
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.
High-Yield Risk: Although a high-yield fund's yield may be higher than that of fixed-income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that a high-yield fund’s share price will decline.
Barclays U.S. Corporate High Yield 2% Issuer Capped Index is an unmanaged index that measures the market of U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bonds. It is a version of the Barclays High Yield Corporate Bond Index except it limits its exposure of each issuer to 2% of the total market value and redistributes any excess market value index-wide on a pro-rata basis. It is not possible to invest directly in an index.
Quality Distribution: Credit quality ratings are based on the conservative average of Moody's, Standard & Poor’s and Fitch ratings. If ratings from all three rating agencies disagree, the model assigns the middle rating to the security. If two of the three agree, the model assigns the rating from those two to the security. 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 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.
†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 May 26 with a record date of May 22. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.
Richard J. Inzunza, CFA<sup>&reg;</sup>

Richard J. Inzunza, CFA®

Portfolio Manager

Northern High Yield Fixed Income Fund (NHFIX)

With Northern Trust Since 2007
Began Career in 1991

Richard J. Inzunza, CFA, Senior Vice President of Northern Trust, is a senior fixed income portfolio manager and manages the Northern High Yield Fixed Income Fund.

Mr. Inzunza rejoined Northern Trust in August 2007 after serving as a senior fundamental analyst at Vanderbilt Capital Advisors from April 2007. From December 2004 to 2007, he was a senior analyst at Northern Trust. Prior to joining Northern Trust, Mr. Inzunza was a senior analyst for Principal Global Investors in London, England.

Mr. Inzunza received a B.S. in business administration - accounting from the California State University at Los Angeles and an MBA in finance from the William E. Simon Graduate School of Business Administration at the University of Rochester. He is an active CFA® charterholder and a member of the CFA Institute, CFA Society Chicago and CFA Society United Kingdom.

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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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