Small Cap Core (formerly Small Cap Growth Fund) Fund

Small Cap Core (formerly Small Cap Growth Fund)

Northern Funds Center by E-mail

Robert H. Bergson

With Northern Trust since 1997
Began Career in 1995

Alex Ryer

With Northern Trust since 2005
Began Career in 1990

View all holdings as of
June 30, 2010

View all holdings as of
March 31, 2010

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Important Fund Change

On February 17, 2010, per SEC approval, the Northern Small Cap Growth Fund has been renamed the Northern Small Cap Core Fund to better represent its new quantitative core investment strategy. As a result of this new strategy, effective February 17, 2010, there has been a reduction in the total annual net operating expense ratio (after voluntary waivers and expense reimbursements) to 1.00% for the Northern Small Cap Core Fund from 1.25% for the Northern Small Cap Growth Fund. Read the news announcement for more information.

If you're more of an aggressive investor looking for the growth potential offered by the stocks of smaller companies, then the Northern Small Cap Core Fund may be the right choice for you. Our experienced investment team follows a quantitative-managed, core style investment strategy to select stocks based on a statistical analysis of historical relationships among small-cap characteristics, stock prices and market capitalization ranges. The Fund invests in a highly diversified portfolio consistent with small-cap core benchmarks and uses a screening process designed to reduce exposure to stocks with negative fundamentals.

Fund Objective: Capital Appreciation

Ticker Symbol	Share Price Change Daily as of 09/03/10	YTD Total Return Daily as of 09/03/10
NSGRX	$ 0.20	3.27%

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Among 663 small growth funds derived from a weighted average of the fund's 3-, 5- and 10-year risk-adjusted returns as of 7/31/2010.

Northern Small Cap Core received 4 stars for the 3-year rating among 663 small growth funds, 4 stars for the 5-year rating among 548 funds and 3 stars for the 10-year rating among 317 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.

©2010 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 September 3, 2010
Symbol	NSGRX	YTD Total Return	3.27%
CUSIP	665162665	Inception Date	9/30/1999
Share Price	$ 11.99	Updated Monthly as of July 31, 2010
Share Price Change	$ 0.20	Total Net Assets	$35,470,089

Total Returns for Month Ended July 31, 2010
	Small Cap Core Fund	Russell 2000 Index	Morningstar Small Growth Category Average
Month	6.89%	6.87%	5.50%
3-Month	–7.28%	–8.89%	-8.03%
Year to Date	4.22%	4.79%	2.89%
1 Year	22.22%	18.43%	17.02%
3-Year Avg. Annual	–4.17%	–4.32%	-5.80%
5-Year Avg. Annual	1.98%	0.47%	0.22%
10-Year Avg. Annual	–1.64%	4.03%	0.79%
Avg. Annual Since Inception	3.59%	Pending%	N/A

Total Returns for Quarter Ended June 30, 2010
	Small Cap Core Fund	Russell 2000 Index	Morningstar Small Growth Category Average
Month	–6.83%	–7.75%	-6.35%
3-Month	–8.49%	–9.92%	-9.14%
Year to Date	–2.50%	–1.95%	-2.45%
1 Year	21.98%	21.48%	19.07%
3-Year Avg. Annual	–7.84%	–8.60%	-8.73%
5-Year Avg. Annual	1.36%	0.37%	0.33%
10-Year Avg. Annual	–2.98%	3.00%	-0.31%
Avg. Annual Since Inception	2.98%	4.71%	N/A

Beginning February 17, 2010 the Northern Small Cap Growth Fund was renamed the Northern Small Cap Core Fund; this change also initiated a benchmark change to the Russell 2000® Index. The previous benchmark was the Russell 2000® Growth Index. Returns for the Russell 2000® Growth Index as of June 30, 2010 were: 1 Year 17.96%, 5 Year Average Annual 1.14%, 10 Year Average Annual -1.73% and the Average Annual Since Fund Inception 1.18%.

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*
Small Cap Core (NSGRX)	1.82%	1.00%
*Includes contractual expense reimbursements that, if not extended, will end on July 31, 2011.

	2009	2008	2007	2006	2005
Small Cap Core	33.14%	-40.03%	10.15%	17.75%	7.58%
Russell 2000 Index	27.16%	-33.79%	-1.56%	18.37%	4.55%
Morningstar Category Avg. Small Growth	35.46%	-41.55%	7.59%	10.81%	6.02%
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	1822
Portfolio Turnover	224.05% (as of 3/31/10)
Dividend Schedule	Annually
Dividend Income Last Quarter	N/A
Capital Gain Income Last Quarter	N/A
Weighted Average Market Cap ($Mil)	$1,055
Benchmark	Russell 2000 Index
Morningstar Category	Small Growth

Trailing 12-Month Price to Earnings Ratio
Fund	15.79
Benchmark	14.07

Price to Book Ratio
Fund	1.36
Benchmark	1.51

Historical 5-Year Earnings Growth
Fund	7.87
Benchmark	7.10

Asset Allocation
Stocks	98.0%
Cash	2.0%
TOTAL	100%

Top 10 Holdings		Fund
Seaboard Corp		0.4%
Dress Barn Inc		0.4%
Tibco Software Inc		0.3%
Rock-Tenn Co		0.3%
Gartner Inc		0.3%
Informatica Corp		0.3%
Nicor Inc		0.3%
Casey's General Stores Inc		0.3%
Tractor Supply Co		0.3%
Carbo Ceramics Inc		0.3%
% of Portfolio		3.2%

Sector Weightings	Fund	Benchmark
Financials	20.8%	21.6%
Information Technology	17.7%	17.8%
Industrials	16.9%	15.7%
Consumer Discretionary	13.8%	14.0%
Health Care	13.0%	13.1%
Energy	5.0%	5.4%
Materials	4.9%	5.0%
Utilities	3.6%	3.2%
Consumer Staples	3.4%	3.2%
Telecommunication Services	0.9%	1.0%
% of Portfolio	100.0%	100.0%

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

as of June 30, 2010

	Small Cap Core Fund	Russell 2000 Index
Beta	0.90	1.00
Up Market Capture	89.21	100.00
Down Market Capture	94.89	100.00
Information Ratio	0.10	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.

Small Cap Risk: Small capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure. Their stocks are subject to a greater degree of volatility, trade in lower volume and may be less liquid.

Russell 2000® Index is an unmanaged index which measures the performance of the 2,000 smallest companies in the Russell 3000 Index based on market capitalization. It is not possible to invest directly in an index.

Russell 2000® Growth Index is an unmanaged index measuring the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.