as of December 31, 2013
Fund Commentary
The S&P 500® finished 2013 with yet another strong quarterly gain. Investors were able to digest and look past Federal Reserve tapering of quantitative easing, which the Fed announced would begin in January, to focus on gradually improving economic conditions in the U.S. and further signs of stabilization in Europe. Investor risk appetites remained healthy, as cyclical sectors outperformed defensive sectors — a relatively consistent theme exhibited throughout the year.

The Large Cap Equity Fund posted a total return of 10.84% for the quarter, compared with 10.51% for the Fund's benchmark, the S&P 500® Index. Strong stock selection in the healthcare, financials and consumer staples sectors contributed favorably to performance. But, weak stock selection in the information technology sector partially offset those gains.

As we look forward to 2014, we believe our process of disciplined fundamental analysis and investment in companies that reach our expected return hurdle rate over long holding periods should succeed. As the Fed begins the process of removing stimulus from the market, we believe company-specific attributes, rather than the broader macroeconomic environment, will drive performance. Specifically, we believe the low-quality, valuation-driven rally will give way to an environment that rewards companies with solid long-term growth prospects.
Investor Profile

If you are a growth-oriented, moderate-risk investor looking for long-term capital appreciation without concern for current income, you will want to consider this fund as a core holding for your portfolio.

Philosophy
  • Combine forward looking fundamental stock analysis and intelligent portfolio construction with the goal of providing consistent returns over time.
  • Actively manage risk levels to be commensurate with performance objectives and avoid unintended risks.
  • Maintain a core-style fund that invests primarily in large-cap stocks with some mid-cap exposure.
 
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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.

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