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FIXED INCOME AND EQUITY PORTFOLIOS
SUPPLEMENT DATED NOVEMBER 1, 2000
TO PROSPECTUS DATED APRIL 1, 2000
The name of Northern Trust Quantitative Advisors, Inc. was changed to Northern
Trust Investments, Inc. ("NTI") on May 1, 2000.
It is anticipated that on or about January 1, 2001, NTI will assume the
responsibilities of The Northern Trust Company ("Northern") under its Advisory
Agreement with the Trust with respect to the Portfolios other than the
International Bond and International Growth Portfolios. It is anticipated that
NTI will assume such responsibilities with respect to the International Bond
and International Growth Portfolios at a later date, but prior to May 12, 2001.
It is also anticipated that on or about January 1, 2001, NTI will assume
Northern's responsibilities under the Co-Administration Agreement with the
Trust. The fees payable by the Trust under these agreements, and the personnel
who manage the Portfolios, will not change as a result of NTI's assumption of
responsibilities.
The following replaces the second paragraph under "Portfolio Management" on
page 53:
Mark J. Wirth, Senior Vice President of Northern, and Steven M. Schafer, Vice
President of Northern, are the management team leaders for the Bond Portfolio.
Mr. Wirth has had such responsibility since 1993. Mr. Schafer has had such
responsibilities since November 2000. Mr. Wirth joined Northern in 1986 and
during the past five years has managed various fixed income portfolios. Mr.
Wirth is also the management team leader for the Short-Intermediate Bond
Portfolio and has had such responsibility since 1993.
The following replaces the fourth paragraph under "Portfolio Management" on
page 53:
The management team leader for the International Growth Portfolio is Andrew
Parry, Senior Vice President of Northern and Chief Investment Officer,
International Equity, of Northern Trust Global Investments (Europe) Ltd. Mr.
Parry has had such responsibility since August 14, 2000, when he joined
Northern. Mr. Parry was the head of global equities for Julius Baer from 1997
to July 2000. From 1995 to 1997, he was the chief investment officer for Lazard
Brothers Asset Management.
The following replaces the fifth paragraph under "Portfolio Management" on page
53:
The management team leaders for the U.S. Government Securities Portfolio are
Mark Wirth and Deborah Boyer, Vice President of Northern. Mr. Wirth has had
such responsibility since 1998 and Ms. Boyer has had such responsibility since
November 2000. Ms. Boyer joined Northern in October 2000. From 1989 to 1996,
Ms. Boyer was with First Chicago NBD Corporation where she served as a
government bond trader and managed a government bond portfolio. From 1996 to
October 2000, she was a portfolio manager at T. Rowe Price where she managed
various taxable fixed income portfolios.
The following replaces the ninth paragraph under "Portfolio Management" on page
53:
The management team leaders for the Balanced Portfolio are John J. Zielinski
and Eric M. Bergson, Vice President of Northern. Mr. Zielinski has had such
responsibility since 1999. Mr. Bergson has had such responsibility since August
2000. Mr. Bergson joined Northern in 1986 and during the past five years has
managed various fixed income portfolios.
The following replaces the section under "Additional Description of Securities
and Common Investment Techniques--Interest Rate Swaps, Floors and Caps and
Currency Swaps" on page 75:
Interest Rate Swaps, Currency Swaps, Total Rate of Return Swaps, Credit Swaps,
and Interest Rate Floors, Caps and Collars. Interest rate and currency swaps
are contracts that obligate a Portfolio and another party to exchange their
rights to pay or receive interest or specified amounts of currency,
respectively. Interest rate floors entitle the purchasers to receive interest
payments if a specified index falls below a predetermined interest rate.
Interest rate caps entitle the purchasers to receive interest payments if a
specified index exceeds a predetermined interest rate.
NIF SPT FIEQ 11/00
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An interest rate collar is a combination of a cap and a floor that preserves a
certain return within a predetermined range of interest rates. Total rate of
return swaps are contracts that obligate a party to pay or receive interest in
exchange for the payment by the other party of the total return generated by a
security, a basket of securities, an index or an index component. Credit swaps
are contracts involving the receipt of floating or fixed rate payments in
exchange for assuming potential credit losses of an underlying security. Credit
swaps give one party to a transaction the right to dispose of or acquire an
asset (or group of assets), or the right to receive or make a payment from the
other party, upon the occurrence of specific credit events.
Investment strategy. The Portfolios may enter into swap transactions and
transactions involving interest rate floors, caps and collars for hedging
purposes or to seek to increase total return.
Special risks. The use of swaps and interest rate floors, caps and collars
is a highly specialized activity which involves investment techniques and
risks different from those associated with ordinary portfolio securities
transactions. Like other derivative securities, the instruments can be
highly volatile. If the Investment Adviser is incorrect in its forecasts of
market values, interest rates and currency exchange rates, the investment
performance of a Portfolio would be less favorable than it would have been
if these instruments were not used. Because these instruments are normally
illiquid, a Portfolio may not be able to terminate its obligations when
desired. In addition, if a Portfolio is obligated to pay the return under
the terms of a total rate of return swap, Portfolio losses due to
unanticipated market movements are potentially unlimited. A Portfolio may
also suffer a loss if the other party to a transaction defaults.
2
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MONEY MARKET PORTFOLIOS
SUPPLEMENT DATED NOVEMBER 1, 2000
TO PROSPECTUS DATED APRIL 1, 2000
It is anticipated that on or about January 1, 2001, Northern Trust Investments,
Inc. ("NTI") will assume the responsibilities of The Northern Trust Company
("Northern") under its Advisory Agreement with the Trust with respect to the
Portfolios. It is also anticipated that on or about January 1, 2001, NTI will
assume Northern's responsibilities under the Co-Administration Agreement with
the Trust. The fees payable by the Trust under these agreements, and the
personnel who manage the Portfolios, will not change as a result of NTI's
assumption of responsibilities.
NIFSPTMM 11/00
