U.S. Treasury Index
Michael R. Chico, CFA<SUP>&#174;</SUP>

Michael R. Chico, CFA®

With Northern Trust since 2005
Began Career in 1995

Brandon P. Ferguson

Brandon P. Ferguson

With Northern Trust since 2007
Began Career in 2005

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The U.S. Treasury Index Fund seeks to provide investment results approximating the performance of the Barclays U.S. Treasury Index. Through a passive investment approach, the Fund invests primarily in securities represented by the Index. Unlike Treasury bonds and bills, the principle value and investment return of the Fund is not guaranteed or insured by the U.S. government. Dividends, if any, are declared and paid monthly. Capital gains, if any, are distributed at least annually.

Fund Objective: Seeks to Replicate the Index
Ticker SymbolDistribution Rate
Daily as of 07/22/14
30-Day SEC Yield
Monthly as of June 30, 2014
Updated Daily as of July 22, 2014
SymbolBTIAX Distribution Rate*1.20%
CUSIP665162350 Tax-Equivalent Distribution Rate* N/A
Share Price$ 21.66 Updated Monthly as of June 30, 2014
Share Price Change$ 0.02Total Net Assets$114,572,493
YTD Total Return2.76% Updated Monthly as of June 30, 2014
Inception Date1/11/199330-Day SEC
30-Day SEC
Total Returns for Quarter Ended June 30, 2014
 U.S. Treasury Index FundBarclays U.S. Treasury IndexMorningstar Intermediate Government Category Average
Year to Date2.58%2.72%3.26%
1 Year1.81%2.04%3.06%
3-Year Avg. Annual2.83%3.06%2.37%
5-Year Avg. Annual3.38%3.60%3.62%
10-Year Avg. Annual4.36%4.53%4.09%
Avg. Annual
Since Inception
5.50%5.69% 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 0.15%. 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
U.S. Treasury Index
Includes contractual expense reimbursements that, if not extended, will end on July 31, 2014.
U.S. Treasury Index-2.90%1.71%9.60%5.57%-3.58%
Barclays U.S. Treasury Index-2.75%1.99%9.81%5.87%-3.57%
Morningstar Category Avg.
Intermediate Government
Performance quoted represents past performance and does not guarantee future results.
Number of Holdings173
Average Duration†5.1 YRS
Average Maturity6.3 YRS
Weighted Average Coupon1.81%
Yield to Maturity1.28%
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.0705
Capital Gain Income Last QuarterN/A
BenchmarkBarclays U.S. Treasury Index
Morningstar CategoryIntermediate Government
Maturity Distribution    Fund
0-1yr    1.9%
1yr-2yrs    21.3%
2yrs-3yrs    18.8%
3yrs-5yrs    22.8%
5yrs-7yrs    14.1%
7yrs-10yrs    9.4%
10yrs-15yrs    1.5%
15yrs-20yrs    0.4%
20yrs-25yrs    1.2%
25yrs-30yrs    8.6%
TOTAL 100.0%
Quality DistributionFundBenchmark
US Tsy (incl GNMA MBS)98.5% 100.0%
Committed Cash1.5% 0.0%
TOTAL100.0% 100.0%
Sector WeightingsFundBenchmark
Committed Cash1.5%0.0%
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.

Index Fund Risk: The performance of the Fund is expected to be lower than that of the Index because of Fund fees and expenses. It is important to remember that there are risks associated with investing in specific companies.

U.S. Government Guarantee: U.S. government guarantees apply only to the underlying securities of a Fund’s portfolio and not the Fund’s shares.

Barclays U.S. Treasury Index is an unmanaged index of prices of U.S. Treasury bonds with maturities of one to 30 years. 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). Committed Cash includes any traded cash (forward settling trades), the sweep vehicle and commercial paper. 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.

Distribution Calculations: All distribution calculations (Maturity Distribution, Sector Weightings and Quality Distribution) are measured on a trade date basis and are adjusted for uninvested cash from the market value used to compute the percentage calculations.

Characteristics: Benchmark and Fund analytics have been calculated using a third party vended model. All material has been obtained from sources believed to be reliable, but the accuracy, completeness and interpretation cannot be guaranteed. Information contained herein is current as of the date appearing in this material only and is subject to change without notice. Certain benchmark calculations may not match the published benchmark characteristics.

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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 May 27 with a record date of May 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.