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Northern Trust introduces ultra-short duration funds

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Northern Trust has introduced two mutual funds: the Northern Tax-Advantaged Ultra-Short Fixed Income Fund and the Northern Ultra-Short Fixed Income Fund.

Northern Trust has introduced two mutual funds: the Northern Tax-Advantaged Ultra-Short Fixed Income Fund and the Northern Ultra-Short Fixed Income Fund.

Both funds seek to generate higher yields than money market funds with less volatility than short duration bond funds.

Northern Trust now has a total of 15 fixed income mutual funds in its Northern Funds line-up.

The Northern Tax-Advantaged Ultra-Short Fixed Income Fund and Northern Ultra-Short Fixed Income Fund have a minimum initial investment of USD1m and are intended for investors with an investment horizon of at least one year who want to move a portion of their money market fund assets into slightly longer maturity, higher yield securities.

The Tax-Advantaged Ultra-Short Fixed Income Fund is designed to maximize after-tax return for investors in higher tax brackets by pursuing best net after-tax yield and total return opportunities in both taxable and tax-exempt securities.

"As we continue to face uncertainty regarding an economic and financial market recovery, investors have become increasingly interested in the potential benefits of having fixed income assets in their investment portfolios," says Colin Robertson (pictured), managing director of fixed income investments at Northern Trust. "For investors looking to get back into the market, the new funds are designed to provide opportunity for both higher yields than money funds and capital appreciation with minimal volatility."

Carol Sullivan, director of Northern Trust’s enhanced cash group, manages both of the funds. Senior portfolio manager Patrick D. Quinn is co-manager of the Northern Tax-Advantaged Ultra-Short Fixed Income Fund and Scott Warner, also a senior portfolio manager, is co-manager of the Northern Ultra-Short Fixed Income Fund.

The funds strive to maintain a six to 18 month average maturity, under normal circumstances, with a maximum security maturity of three years.

The funds are scheduled to make dividend distributions monthly and have a one per cent redemption fee on shares sold or exchanged within 90 days of purchase. They are not money market funds, which maintain a USD1.00 net asset value; rather, the ultra-short duration funds’ NAVs will fluctuate with their returns.

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