Global Sustainability Index Fund

Global Sustainability Index

as of June 30, 2010

The Global Sustainability Index Fund posted a return of -12.90% during the second quarter of 2010. The Fund is benchmarked to the FTSE KLD Global Sustainability Index, which returned -12.31%. Stocks across the globe lost ground as the emergence of the European debt crisis and evidence of slower-than-expected economic growth led to a sharp increase in investor risk aversion.

All countries in the Index posted a negative return for the quarter. The United States—the largest country in the Index with a weighting of 43.95%—returned -11.03%. The next-largest Index component, the United Kingdom, returned -8.86%. Singapore and Denmark posted the best returns, losing -1.69% and -2.16%, respectively. Luxembourg, one of the smallest countries in the Index with a weighting of 0.43%, posted the worst performance with a loss of 37.39%.

All sectors also ended the second quarter in negative territory. The largest sector, financials, lost 15.59%. Telecommunications services was the best performer with a return of -5.57%, while materials was the worst performer with a decline of 17.22%.

If you are an investor who wants to invest in a broad, diversified set of large- and mid-cap developed global companies in North America, Europe and Asia-Pacific, that are selected based on sector ranking of environmental, social and government factors, you may find this Fund attractive.

Seek to duplicate the investment composition and overall performance of the stocks included in the FTSE KLD Global Sustainability Index.
The Index is a diversified, sector neutral global benchmark constructed using environmental, social and governance (ESG) factors.
Sector and regional neutrality is designed to help the Index outperform other social responsibility and sustainability indices.

Not FDIC insured | May lose value | No bank guarantee

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