Northern's Money Funds: No Direct Exposure to Greek Debt

The ongoing developments in Greece's debt crisis has led to investor questions about exposure to Greek debt. Northern Funds and Northern Institutional Funds money market funds (“the Funds”) hold no direct exposure to Greek debt.

  • The Funds hold about 30% in European bank exposure (which includes foreign agencies), well below the industry average. The average U.S. money market fund had 44% invested in short-term debt of European banks according to Fitch, Inc. on June 17, 2011.
     
    • Indirect exposure to Greek debt may likely be concentrated in French and German banks. Northern holds no more than 2% per bank.
       
    • The Funds total exposure to French banks is 8% and to one German bank at 2%.
       
  • The Greek debt challenges are not new. Northern Trust Global Investment's Fixed Income Credit Research group has always monitored such credit exposures and for more than a year has increased monitoring of European banks' exposures to Greece, including stress testing of the European banks' balance sheets based on their Greek debt being priced down to 0.
     
  • In 2009, our Fixed Income Credit Research reviewed all global bank exposures, resulting in pare backs; some exposures were eliminated, some reduced in size and many were limited by length of maturity. These reductions remain in place.
     
  • Fund Management firmly believes the European banks in which the Funds invest are large, systemically important banks with strong capital bases and are well positioned to weather through. Fund Management would expect but cannot assure that the European Central Bank and country central banks will support the banks we own.
     
  • At his press conference following the Federal Reserve Board meeting June 22, Fed Chairman Ben Bernanke downplayed any immediate threats to money funds from Greek sovereign debt.
     

Money Market Risk: An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Portfolio holdings are subject to change. For a complete list of fund holdings please visit www.northernfunds.com or www.northerninstitutionalfunds.com.

Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds and Northern Institutional Funds before investing. Call 800-637-1380 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.

Northern Funds and Northern Institutional Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.

 
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Not FDIC insured | May lose value | No bank guarantee

An investment in Northern Funds is not insured by the FDIC, and is not a deposit or obligation of, or guaranteed by The Northern Trust Company or any affiliate. An investment in Northern Funds involves risks, including possible loss of principal.

Shares of the Northern Funds are offered only by a current Prospectus and are intended solely for persons to whom shares of US registered funds may be sold. This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Northern Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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