as of December 31, 2013
Fund Commentary
The Fund returned 8.73% for the fourth quarter of 2013, closely tracking the small-cap benchmark Russell 2000® Index, which returned 8.72%. Small caps lagged large caps, as the Russell 1000® Index returned 10.23% during the same period.

The top-performing sectors in the benchmark were industrials and materials, which returned 11.31% and 11.06%, respectively. The weakest sectors included telecommunications services and energy, which returned 5.31% and 6.10%, respectively.

U.S. equities ended the year with another strong quarter, partly driven by positive market reactions to monetary and fiscal policy activity in Washington. The Federal Reserve provided assurance of continued monetary stimulus, boosting U.S. equities at the end of the third quarter and into the start of the fourth quarter. This positive performance was sustained through October despite a fiscal stalemate and a government shutdown. A temporary budget deal was reached late in October, and a longer-term agreement was reached in December, reducing fiscal uncertainty. Janet Yellen was nominated as the next Fed Chair, and her testimony before Congress assured markets that policy would remain appropriately accommodative. Markets initially reacted positively to the Fed announcement that a tapering of asset purchases would begin in January, as the move was seen to be less dramatic than many had anticipated while demonstrating confidence in the strength of the economic recovery.
Investor Profile

If you are an aggressive investor seeking competitive long-term investment returns through a broadly diversified portfolio, this Fund may be appropriate for you. It seeks to offer investment results, before expenses, approximating the aggregate price and dividend performance of the securities included in the Russell 2000 Index.

  • Passively managed, the Fund seeks to duplicate the investment composition and overall performance of the stocks included in the Russell 2000® Index.
  • Invest at least 80% of its net assets in equity securities in the Index, in weightings that approximate the relative composition of the Index.
  • Use proprietary quantitative techniques designed to minimize trading costs.
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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.

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