Northern Trust Global Investments
Short Term Investment Fund
Northern Trust Global Investments’ Short Term Investment Fund is a Fund that is designed
for use as a money-market type investment
FUND OBJECTIVE:
This Fund seeks to maximize current income on cash reserves to the extent consistent with
principal preservation and maintenance of liquidity. Liquidity is emphasized so that units can
be redeemed on any business day. Diversification of holdings is required to minimize the risk
of any single security or concentration in any single sector (except U.S. Government securities).
KEY FUND FACTS:
Trailing Total Returns for Periods Ending 12/31/06
6.00%
5.15% 4.85%
5.00%
5.15%
4.85%
4.12%
¾ Quarterly
Performance:
3.80%
4.00%
3.28%
3.07%
2.63%
3.00%
2.00%
2.43%
1.35% 1.26%
1.00%
0.00%
3Q06
YTD
1Year
3 Year
Sho rt-Term Investment Fund (STIF)
¾ Quarterly
Commentary:
„
„
„
5 Year
10 Year
91-Day T-B ill
Our primary investment selections continued to be made at the upper-end of the Tier 1 credit
quality spectrum, and recognized that some degree of performance will be sacrificed as a
result. We looked to maintain and add to our positions in finance, corporate, and assetbacked variable rate securities during the 4th-quarter. Additionally, the portfolios continued
to benefit from our decisions to add fixed rate assets, as their higher investment rates have
helped pull the fund yields higher.
We view that the Fed has currently reached an appropriate level for short-term rates, while
the probability of rate cuts sometime in 2007 have fluctuated. However, the Fed maintains
that the future path of interest rates will continue to be data-dependent. We believe the Fed
will likely hold the overnight lending rate at 5.25% at the January 31st FOMC meeting.
Given our current outlook, we will continue to focus on using fixed rate assets, including
certificates of deposits and commercial paper, to employ our current laddered strategy to
position portfolio durations for potential interest rate eases in 2007. Additionally, as
mentioned earlier, we will look to increase our positions in variable rate securities in order to
enhance fund performances.
Northern Trust Global Investments (NTGI) comprises Northern Trust Investments, N.A. (NTI), Northern Trust Global Investments Limited (NTGIL), Northern Trust Global Investments Japan, K.K.
(NTGIJ), the investment advisor division of The Northern Trust Company (TNTC) and Northern Trust Global Advisors, and its subsidiaries to offer investment products and services to personal and
institutional markets.
Northern Trust Global Investments
Short Term Investment Fund
¾ Description:
This Fund is composed of the Northern Trust Global Investments Short Term Investment
Fund (STIF). Prior to August, 2006 this fund included Northern’s Short-Term Extendable
Portfolio (STEP). STIF invests in a wide variety of short maturity, fixed income (debt)
securities. All investments are subject to quality and maturity requirements. The unit value of
STIF will, under normal circumstances, be constant at $1.00. The risk of investment in this
Fund is also expected to be lower than an investment in either stocks or bonds.
¾ Annual
Performance:
Annual Total Returns for Periods Ending 12/31/06
6.62%
7.00%
6.00%
5.68%
5.96%
5.66%
5.24%
5.06%
5.28%
5.15%
4.85%
4.74%
5.00%
4.13% 4.09%
4.00%
3.28%3.01%
3.00%
1.86% 1.71%
2.00%
1.17%
1.43%
1.09%
1.33%
1.00%
0.00%
1997
1998
1999
2000
2001
2002
Short-Term Investment Fund (STIF)
FIRM OVERVIEW:
2003
2004
2005
2006
91-Day T-Bill
Northern Trust Global Investments: Northern Trust Corporation has been in the business of
investing, advising and safekeeping client assets since 1889. Northern Trust Global Investments,
the investment arm of Northern Trust Corporation, is one of the largest investment managers in
the U.S. with over $600 billion in assets under management. Northern has a specialty in the
management of short term (or short duration) assets.
Performance shown for periods greater than one year is annualized.
Northern Trust Global Investments (NTGI) comprises Northern Trust Investments, N.A. (NTI), Northern Trust Global Investments
Limited (NTGIL), Northern Trust Global Investments Japan, K.K. (NTGIJ), the investment advisor division of The Northern Trust
Company (TNTC) and Northern Trust Global Advisors, Inc. (NTGA), and its subsidiaries to offer investment products and services to
personal and institutional markets. As of 9/30/2006, NTGI had assets under management totaling $667 billion. For purposes of
compliance with the Global Investment Performance Standards (GIPS®), we have defined our firm as Northern Trust Global Investments
Services (NTGIS, a subset of NTGI) that includes those investment products managed by NTI, NTGIL, NTGIJ, and TNTC that are
distributed through national channels.
As of 9/30/2006, Northern Trust Global Investment Services (NTGIS) had assets under management totaling $368 billion.
Northern Trust Global Investments (NTGI) comprises Northern Trust Investments, N.A. (NTI), Northern Trust Global Investments Limited (NTGIL), Northern Trust Global Investments Japan, K.K.
(NTGIJ), the investment advisor division of The Northern Trust Company (TNTC) and Northern Trust Global Advisors, and its subsidiaries to offer investment products and services to personal and
institutional markets.