Northern Trust's Ultra-Short Fixed Income Funds Surpass $3 Billion in Assets
Milestone reached as market dynamics lead investors to rethink short term investment strategies
CHICAGO--(BUSINESS WIRE)-- As investors search for yield beyond traditional money market funds, Northern Funds' Ultra-Short Fixed Income Fund (NUSFX) and Tax-Advantaged Ultra-Short Fixed Income Fund (NTAUX) have recently drawn assets from investors seeking opportunities for their investments that cover longer term spending needs. Northern Trust, which sponsors and manages the two funds, announced today that together they have exceeded $3 billion in assets.
"The Northern Funds Ultra-Short Funds have exhibited strong asset growth since inception, which validates our view that clients value a consistent, proven investment process in a total return product that is different from a traditional money market fund," said Colin Robertson, Managing Director of Fixed Income for Northern Trust. "As clients rethink their investment strategies in this low interest rate environment, we expect our Ultra-Short funds and liquidity management ETF strategies will continue to acquire assets and gain significant traction in the marketplace."
Launched in June 2009, the funds have a highly focused strategy that draws on a legacy of more than 25 years of experience with risk-controlled ultra-short duration strategies. The funds are designed to take modest interest rate risk, credit risk and liquidity risk compared to money market funds.
The two funds have slightly higher volatility and lower liquidity than money market funds and seek to offer less volatility than intermediate and longer-duration fixed income securities.
While both seek to yield more than a money market fund with potential for capital appreciation, the Tax Advantaged Ultra-Short Fund seeks to provide investors in higher tax brackets more after tax yield by investing in municipal securities.
"The investment process for both funds combines a top-down macroeconomic view with intense bottom-up credit research in an effort to generate yield with moderate risk," said fund manager Carol Sullivan of Northern Trust. "We maintain well-diversified portfolios of investment grade securities with a neutral target duration of one year, plus the flexibility to shorten or extend the portfolio up to another six months depending upon our macro forecasts. This flexibility helps us to position the two Ultra-Short Funds in a way that captures opportunity but also provides some protection in a rising rate environment."
The minimum investment required for each fund is $2,500. The expense ratio for Northern Ultra-Short Fixed Income Fund is .26 or $26 for every 10,000 invested. The expense ratio for Northern Tax-Advantaged Ultra-Short Fixed Income Fund is .25%. According to Morningstar, the average expense ratio for Ultra-Short Funds is .66%.
Please note that the Funds are not money market funds, which strive to maintain a $1.00 net asset value. The share price of the ultra-short funds fluctuate with their returns and are designed to complement the cash portion of an investor's portfolio, not replace it. An investment in either fund could result in a loss of principal.
About Northern Trust
Northern Trust Corporation (NAS: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$758.9 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
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.
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.
Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.
KEYWORDS: United States North America Illinois
The article Northern Trust's Ultra-Short Fixed Income Funds Surpass $3 Billion in Assets originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.