Arizona Tax-Exempt
Eric V. Boeckmann

Eric V. Boeckmann

With Northern Trust since 1985
Began Career in 1985


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For those investors who favor high current income exempt from federal income and who is looking for an investment intended to be exempt from Arizona state personal income tax, than this may be the right Fund for you. It is particularly well suited for income-oriented investors in higher tax brackets willing to assume some risk of principal in exchange for higher yield potential. Income from the Fund may be subject to federal alternative minimum tax (AMT), state and local taxes. Our knowledgeable investment team concentrates on investments in Arizona state-specific, investment-grade municipal bonds which are exempt from federal income tax and Arizona state personal income tax while maintaining an average maturity between 10 and 30 years.

Fund Objective: Current Tax-Exempt Income
Ticker Symbol 30-Day SEC Yield
Monthly as of March 31, 2014
30-Day Tax-Equivalent SEC Yield
Monthly as of March 31, 2014
NOAZX2.98%5.72%
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Among 293 municipal single state long funds derived from a weighted average of the fund's 3-, 5- and 10-year risk-adjusted returns as of 3/31/14.

Arizona Tax-Exempt received 4 stars for the 3-year rating among 293 municipal single state long funds, 3 stars for the 5-year rating among 277 funds and 4 stars for the 10-year rating among 230 funds.

Past performance is no guarantee of future results. Ratings reflect fee waivers in effect; in their absence, ratings may have been lower.

Star ratings are based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The overall rating is a weighted average of the 3-, 5-, and 10-year (if applicable) returns. 5 stars = top 10% of funds in an asset category; 4 stars = next 22.5% of funds; 3 stars = next 35%; 2 stars = next 22.5% and 1 star = next 10%. A fund must be in existence three years to be rated. Ratings are subject to change monthly.

©2014 Morningstar, Inc. All Rights Reserved. Morningstar and/or its content providers are the proprietors of this information; do not permit its unauthorized copying or distribution; do not warrant it to be accurate, complete or timely; and are not responsible for damages or losses arising from its use.

Updated Daily as of April 23, 2014
SymbolNOAZX Distribution Rate*3.36%
CUSIP665162764 Tax-Equivalent Distribution Rate* 5.41%
Share Price$ 10.75 Updated Monthly as of March 31, 2014
Share Price Change$ 0.00Total Net Assets$78,776,576
YTD Total Return4.33% Updated Monthly as of March 31, 2014
Inception Date10/1/199930-Day SEC
Yield*
2.98%
  Tax-Equivalent
30-Day SEC
Yield*
5.72%
Total Returns for Quarter Ended March 31, 2014
 Arizona Tax-Exempt FundBarclays Arizona Municipal Bond IndexMorningstar Muni Single State Long Category Average
Month0.03%0.25%0.33%
3-Month3.23%3.20%3.99%
Year to Date3.23%3.20%3.99%
1 Year0.41%0.68%-2.08%
3-Year Avg. Annual6.00%6.02%5.21%
5-Year Avg. Annual5.45%5.85%5.71%
10-Year Avg. Annual4.07%4.52%3.60%
Avg. Annual
Since Inception
4.92%5.25% N/A
 
Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here.

The Advisor has agreed to reimburse certain expenses of the Fund (excluding acquired fund fees and expenses; a portion of the compensation paid to each Trustee who is not an officer, director or employee of Northern Trust Corporation or its subsidiaries; expenses related to third-party consultants engaged by the Board of Trustees of the Trust; membership dues paid to the Investment Company Institute and Mutual Fund Directors Forum; extraordinary expenses; and interest, if any) to the extent the "Total Annual Fund Operating Expenses" exceed 0.45%. The contractual limitation may not be terminated before July 31, 2014 without the approval of the Board of Trustees. In the absence of fee waivers, yield, total return, growth since inception and dividends would have been reduced. Total return is based on net change in NAV assuming reinvestment of distributions.
Disclosure
 Gross Expense RatioNet Expense Ratio
Arizona Tax-Exempt
(NOAZX)
0.94%0.46%
Includes contractual expense reimbursements that, if not extended, will end on
July 31, 2014.
 20132012201120102009
Arizona Tax-Exempt-2.50%6.28%11.60%1.71%11.37%
Barclays Arizona Municipal Bond Index-2.11%7.37%10.24%2.34%13.12%
Morningstar Category Avg.
Muni Single State Long
-5.66%7.57%10.20%1.18%19.10%
Performance quoted represents past performance and does not guarantee future results.
Number of Holdings57
Average Duration†4.4 YRS
Average Maturity10.7 YRS
Weighted Average Coupon4.50%
Income**$0.0301
Dividend ScheduleMonthly
Dividend Income Last Quarter$0.1002
Capital Gain Income Last QuarterN/A
BenchmarkBarclays Arizona Municipal Bond Index
Morningstar CategoryMuni Single State Long
Maturity Distribution    Fund
0 - 1 Year    7.5%
2 - 5 Years    4.6%
6 - 10 Years    32.4%
11 - 20 Years    51.7%
21 - 30 Years    3.8%
TOTAL 100.0%
Quality DistributionFundBenchmark
AAA10.3% 10.8%
AA68.9% 60.4%
A13.3% 18.6%
BBB0.0% 10.2%
Committed Cash7.5% 0.0%
TOTAL100.0% 100.0%
Sector WeightingsFundBenchmark
Revenue58.5%84.8%
General Obligation20.6%10.7%
Insured12.0%0.0%
Committed Cash7.5%0.0%
Government-Backed1.4%4.5%
TOTAL100.0% 100.0%
All data is as of date indicated and subject to change.

Bond Risk: Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates.

Non-Diversified Risk: The Fund invests in a smaller number of securities than the average mutual fund. The change in value of a single holding may have a more pronounced effect on the Fund’s net asset value and performance than for other funds.

Tax-Free/AMT Risk: Tax-exempt funds’ income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax.

Regional Investment Risk: The geographical concentration of portfolio holdings in this Fund may involve increased risk.

Barclays Arizona Municipal Bond Index is an unmanaged index of investment grade (Baa3 or better) tax-exempt Arizona bonds with a remaining maturity of at least one year. It is not possible to invest directly in an index.

Quality Distribution: Credit quality ratings are based on converting the available Moody's, Standard & Poor's, and/or Fitch ratings to a common numerical basis and averaging that result. If none of these three rating agencies has assigned a rating the Fund will assign a rating of not rated. The ratings, expressed in Standard & Poor's nomenclature, range from AAA (extremely strong capacity to meet its financial commitment) to D (in default). Short-term ratings, expressed in Standard & Poor's nomenclature, range from A-1 (obligor's capacity to meet its financial commitment on the obligation is strong) to A-3 (exhibits adequate protection parameters). The Standard & Poor's short-term municipal rating of SP1 reflects a strong capacity to pay principal and interest (an issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation). The Moody's short-term municipal rating of MIG1 denotes superior credit quality (excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing). Committed Cash includes any traded cash (forward settling trades), the sweep vehicle and commercial paper. The ratings represent the rating agencies' opinions of the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality.

Distribution Calculations: All distribution calculations (Maturity Distribution, Sector Weightings and Quality Distribution) are measured on a trade date basis and are adjusted for uninvested cash from the market value used to compute the percentage calculations.

 
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Not FDIC insured | May lose value | No bank guarantee

†Northern tax-exempt fixed income funds' and Northern High Yield Fixed Income Fund's Average Duration is calculated using the modified duration formula. Other Northern fixed income funds show the option-adjusted duration. Duration is a measure of a bond fund's sensitivity to changes in interest rates.

*Distribution rate and tax-equivalent distribution rate represent the annualization of the Fund's distributions for the prior month ending on the date shown, including capital gain distributions. The 30-day SEC yield and tax-equivalent 30-day SEC yield represent the annualization of the Fund's net investment income, excluding capital gain income. The tax-equivalent distribution rate and tax-equivalent 30-day SEC yield are based on an assumed tax rate of 47.9% for Arizona, 55.7% for California and 43.4% for national municipal funds.

**Per share paid out March 24 with a record date of March 21. The amount shown represents dividends paid for net investment income and excludes distributions from capital gain income.

Past performance is not indicative of future results. Institutional investor award winners are chosen by the editorial staff of Institutional Investor magazine based on their market intelligence, performance data and additional information received from the industry following a public call for nominations. Manager winners are also selected by the editors of the magazine based on the results of a survey conducted of U.S. institutional investors.

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.