High Yield Fixed Income
Richard J. Inzunza, CFA<SUP>&#174;</SUP>

Richard J. Inzunza, CFA®

With Northern Trust since 2007
Began Career in 1991

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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

Redemption Fee: 2% on shares sold or exchanged within 30 days of purchase
Ticker SymbolDistribution Rate
Daily as of 07/31/14
30-Day SEC Yield
Monthly as of June 30, 2014
Updated Daily as of July 31, 2014
SymbolNHFIX Distribution Rate*5.37%
CUSIP665162699 Tax-Equivalent Distribution Rate* N/A
Share Price$ 7.58 Updated Monthly as of June 30, 2014
Share Price Change$ -0.04Total Net Assets$5,808,101,649
YTD Total Return4.68% Updated Monthly as of June 30, 2014
Inception Date12/31/199830-Day SEC
30-Day SEC
Total Returns for Quarter Ended June 30, 2014
 High Yield Fixed Income FundBarclays U.S. Corporate High Yield 2% Issuer Capped IndexMorningstar High Yield Bond Category Average
Year to Date5.83%5.46%4.83%
1 Year11.92%11.72%10.62%
3-Year Avg. Annual9.14%9.46%8.24%
5-Year Avg. Annual12.22%13.92%12.57%
10-Year Avg. Annual7.46%9.04%7.60%
Avg. Annual
Since Inception
6.60%7.68% N/A
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.
 Gross Expense RatioNet Expense Ratio
High Yield Fixed Income
Includes contractual expense reimbursements that, if not extended, will end on
July 31, 2015.
High Yield Fixed Income7.68%15.08%3.75%13.60%33.48%
Barclays U.S. Corporate High Yield 2% Issuer Capped Index7.44%15.78%4.96%14.94%58.76%
Morningstar Category Avg.
High Yield Bond
Performance quoted represents past performance and does not guarantee future results.
Number of Holdings199
Average Duration†4.4 YRS
Average Maturity7.6 YRS
Weighted Average Coupon7.10%
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.1115
Capital Gain Income Last QuarterN/A
BenchmarkBarclays U.S. Corporate High Yield 2% Issuer Capped Index
Morningstar CategoryHigh Yield Bond
Maturity Distribution    Fund
0 - 1 Year    2.0%
1 - 3 Years    1.0%
3 - 5 Years    14.5%
5 - 10 Years    75.7%
10+ Years    6.8%
TOTAL 100.0%
Quality DistributionFundBenchmark
BBB2.2% 0.0%
BB22.8% 41.3%
B44.2% 40.6%
CCC25.8% 17.5%
CC to D0.0% 0.4%
Not rated3.0% 0.2%
Cash Equivalents2.0% 0.0%
TOTAL100.0% 100.0%
Sector WeightingsFundBenchmark
Consumer Cyclical20.1%14.4%
Financial Institutions15.0%10.4%
Consumer Non-Cyclical9.0%11.8%
Capital Goods8.4%9.0%
Basic Industry4.8%8.9%
Industrial Other2.1%1.3%
TOTAL100.0% 100.0%
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.
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Not FDIC insured | May lose value | No bank guarantee

†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.

*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, 55.7% for California and 43.4% for national municipal funds.

**Per share paid out June 24 with a record date of June 23. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.

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.

©2014 Northern Funds | Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.