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Best of Both Worlds
Northern Income Equity Fund Looks to Provide Investors with Above-average Income—Without Giving Up the Potential for Growth
September 2007
Income is more than just a check that's yours to spend however you like. From an investment perspective, income also helps to stabilize a portfolio without sacrificing long-term performance.
Most investors assume that taking less risk means getting a smaller return. But while that's often true, there can be exceptions. For instance, owning a variety of skillfully chosen, income-producing securities can potentially generate stock-like total returns, but with less volatility than you get with an all-stock portfolio.
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The Northern Income Equity Fund:
| Invests in convertible bonds, convertible-preferred stocks and high-dividend-paying common stocks |
| Seeks an equity-like return, but with less volatility and more income |
| Received Lipper Performance Achievement Certificate based on total return for the one-year period ended December 31, 2006, among 61 funds in the Convertible Securities category.1 |
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'The type of companies that pay a worthwhile dividend tend to be older, more stable businesses.'
Ted Southworth, NORTHERN INCOME EQUITY FUND MANAGER |
Why is income important to a portfolio?
The total return an investment delivers is its price change plus the income it produces. But while the market value of stocks and bonds rise and fall, the income those securities generate can never be negative. In other words, income is money in the bank.
Income-producing investments can provide important benefits:
- Safety
In the aftermath of recent corporate accounting scandals, investors want to know a company's earnings are real. A dividend provides that assurance.
- Growth
Unlike a traditional bond—which matures at a fixed dollar amount—the value of many securities owned by the Northern Income Equity Fund have greater upside potential.
- Stability
There's no magic bullet against volatility. But income producing securities often are more stable than those that rely entirely on the growth of earnings.
- Attractive Return Potential
The Northern Income Equity Fund has outperformed its benchmark, the Merrill Lynch All U.S. Convertibles Index, since inception in March 1994. (Past results do not guarantee future performance.)
Paying Dividends
The Northern Income Equity Fund is designed to meet the needs of long-term investors seeking to add stability to their portfolio without sacrificing growth potential. And with volatility increasing in recent months, now could be a good time to include a diversified portfolio of professionally managed, income-producing securities.
Though above-average income is important, it is not the Northern Income Equity Fund Manager's sole criteria for choosing investments. Above all, fund managers look for solid, well-run businesses that are available at an attractive price. Often, those bargains exist because of what might be temporary conditions or market misconceptions.
With the Northern Income Equity Fund, you'll enjoy:
- Opportunity for above-average current income, paid monthly
- Professional management with a solid long-term track record
- Broad diversification to income-producing asset classes
For more information on how Northern Income Equity Fund can help to achieve your financial goals, contact your Financial Advisor or call 800-595-9111.
1Lipper, Inc. is an independent mutual fund performance monitor. Lipper ranks mutual funds' total performance (assuming reinvestment of distributions) against other funds having similar investment objectives and strategies. As of June 30, 2007, the Fund ranked 2 out of 58 funds for the 3-year period, 21 out of 51 funds for the 5-year period, and 6 out of 32 funds for the 10-year period.
Lipper rankings do not take sales charges into consideration. Rankings are subject to change monthly and may have been lower without fee waivers in effect.
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