Multi-Manager Mid Cap Fund

Multi-Manager Mid Cap

as of March 31, 2013

U.S. equity markets continued to climb higher at the start of 2013, delivering double-digit gains. The mid-cap segment of the market was particularly strong, outperforming both large-cap and small-cap areas. For the quarter, the Russell Midcap® Index returned 12.96%. Consumer staples and energy were the best-performing sectors during the quarter. Materials and telecommunications services underperformed. From a style perspective, value stocks continued to outperform growth stocks in the benchmark, with the Russell Midcap Value® Index returning 14.21% compared with the Russell Midcap Growth® Index return of 11.51%.

The Multi-Manager Mid Cap Fund finished the quarter marginally ahead of the benchmark with a return of 13.04%, compared with the benchmark return of 12.96%. The Fund benefited from its underweight allocation to the materials and telecommunications services sectors. In addition, stock selection in financials was particularly additive. The Fund underperformed within the consumer discretionary and technology areas.

LSV was the strongest-performing sub-adviser during the quarter. LSV’s deeper value strategy was in favor during the period, and LSV was able to capitalize on this environment. Performance was particularly strong in the energy and financials sectors. Geneva and Systematic both underperformed during the quarter. Geneva struggled in the consumer discretionary sector while Systematic underperformed within technology.

If you're a long-term investor looking to diversify your investments by pursuing the growth potential of mid-sized company stocks, then this Fund may be right for you. It is intended for investors who are aware that mid-sized company stocks are generally riskier than large-company stocks due to greater volatility and less liquidity.

Invest in mid-cap stocks through a variety of external mid-cap managers who have distinct investment styles and strategies.
Select complementary managers from a broad universe of investment managers.
Blend managers into a single fund in an effort to provide an attractive combination of risk and return.

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.