Income Equity Fund

Income Equity

Northern Funds Center by E-mail

Jackie M. Benson

With Northern Trust since 2004
Began Career in 1992

View all holdings as of
June 30, 2010

View all holdings as of
March 31, 2010

Hear Income Equity fund managers Ted Southworth and Jackie Benson discuss their investment philosophy and their process for evaluating and selecting stocks. View the video.

Fact Sheet

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This Fund may be a good choice for those moderate-risk investors looking for a relatively high level of current income, but don't want to forego the capital appreciation potential of the stock market. Using fundamental research and quantitative analysis, our experienced investment management team buys and sells securities based on such factors as a company's current income, prospects for growth and capital appreciation potential. The Fund will, under normal circumstances, invest at least 80% of its net assets in income-producing equity securities, including dividend-paying common and preferred stocks and convertible securities. The Fund also may invest up to 20% of its net assets in a broad range of non-convertible fixed-income securities without limitation as to maturity.

Fund Objective: Current Income and Capital Appreciation

Ticker Symbol	Share Price Change Daily as of 09/03/10	YTD Total Return Daily as of 09/03/10
NOIEX	$ 0.11	3.53%

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Updated Daily as of September 3, 2010
Symbol	NOIEX	Updated Monthly as of July 31, 2010
CUSIP	665162202	Total Net Assets	$288,213,399
Share Price	$ 10.92	Updated Monthly as of July 31, 2010
Share Price Change	$ 0.11	30-Day SEC Yield	2.67%
YTD Total Return	3.53%	30-Day SEC Yield w/out waivers	2.44%
Inception Date	4/1/1994

Total Returns for Month Ended July 31, 2010
	Income Equity Fund	S&P 500 Index	Morningstar Moderate Allocation Category Average
Month	5.71%	7.01%	4.88%
3-Month	–3.95%	–6.69%	-3.30%
Year to Date	2.08%	–0.11%	1.60%
1 Year	15.90%	13.84%	11.89%
3-Year Avg. Annual	–1.97%	–6.78%	-2.47%
5-Year Avg. Annual	3.36%	–0.17%	1.80%
10-Year Avg. Annual	4.46%	–0.76%	2.43%
Avg. Annual Since Inception	7.57%	Pending%	N/A

Total Returns for Quarter Ended June 30, 2010
	Income Equity Fund	S&P 500 Index	Morningstar Moderate Allocation Category Average
Month	–3.59%	–5.23%	-2.57%
3-Month	–7.46%	–11.43%	-6.63%
Year to Date	–3.44%	–6.65%	-3.14%
1 Year	18.35%	14.43%	12.89%
3-Year Avg. Annual	–4.82%	–9.81%	-4.62%
5-Year Avg. Annual	2.74%	–0.79%	1.28%
10-Year Avg. Annual	3.75%	–1.59%	1.86%
Avg. Annual Since Inception	7.24%	7.28%	N/A

Beginning July 31, 2010 the Income Equity Fund’s benchmark is the S&P 500 Index. The previous benchmark was the Merrill Lynch All U.S. Convertibles Index. Returns for the Merrill Lynch All U.S. Convertibles Index as of June 30, 2010 were: 1 Year 22.63%, 5 Year Average Annual 3.31%, 10 Year Average Annual 2.08% and the Average Annual Since Inception 7.28%.

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. The contractual reimbursement arrangement is expected to continue until at least July 31, 2011. After this date, the contractual arrangements may be terminated if it is determined to be in the best interest of the Fund and its shareholders. 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 Ratio	Net Expense Ratio*
Income Equity (NOIEX)	1.23%	1.00%
*Includes contractual expense reimbursements that, if not extended, will end on July 31, 2011.

	2009	2008	2007	2006	2005
Income Equity	32.22%	-30.82%	5.43%	18.26%	5.85%
S&P 500 Index	26.46%	-37.00%	5.49%	15.80%	4.91%
Morningstar Category Avg. Moderate Allocation	24.13%	-28.00%	5.99%	11.29%	5.13%
Performance quoted represents past performance and does not guarantee future results.

as of July 31, 2010

Read the most recent Fund Commentary (as of June 30, 2010)

Number of Holdings	75
Portfolio Turnover	26.94% (as of 3/31/10)
Dividend Schedule	Monthly
Dividend Income Last Quarter	$0.0829
Capital Gain Income Last Quarter	N/A
Benchmark	S&P 500 Index
Morningstar Category	Moderate Allocation

Asset Allocation
Stocks	64.1%
Bonds	33.9%
Cash	2.0%
TOTAL	100%

Top 10 Holdings		Fund
NEWMONT MINING CORP		2.4%
OLD REPUBLIC INTL CORP		2.4%
NEW YORK COMMUNITY BANCORP INC		2.2%
UNITED RENTALS INC		2.2%
CACI INTL INC		2.2%
AMERICAN EQUITY INVESTMENT LIFE HOLDING CO		2.2%
INTEL CORP		2.1%
3M CO		2.1%
RAYONIER INC		2.1%
GREAT PLAINS ENERGY INC		2.1%
% of Portfolio		22.0%

Sector Weightings	Fund	Benchmark
Technology	16.9%	18.8%
Financials	15.9%	16.5%
Health Care	14.8%	11.4%
Consumer Discretionary	12.2%	10.2%
Energy	9.4%	10.9%
Consumer Staples	8.1%	11.4%
Industrials	7.0%	10.6%
Materials	6.9%	3.5%
Telecommunication Services	5.6%	3.0%
Utilities	3.2%	3.7%
% of Portfolio	100.0%	100.0%

All data is as of date indicated and subject to change.

as of June 30, 2010

	Income Equity Fund	Merrill Lynch All US Convertibles Index
Beta	0.91	1.00
Up Market Capture	85.23	100.00
Down Market Capture	99.21	100.00
Information Ratio	–0.36	0.00
*Above risk characteristics are based on a 3-year time period

Equity Risk: Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.

High Yield Risk: Although a high yield fund’s yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that a high yield fund’s share price will decline.

Interest Rate/Maturity Risk: Increases in prevailing interest rates will cause fixed income securities, including convertible securities, held by the Fund to decline in value.

S&P 500® Index is an unmanaged index consisting of 500 stocks and is a widely recognized common measure of the performance of the overall U.S. stock market. It is not possible to invest directly in an index.

Merrill Lynch All U.S. Convertibles Index is an unmanaged index consisting of convertible securities of all investment grades. It is not possible to invest directly in an index.