<PAGE> 1
<TABLE>
<S> <C>
[ LOGO OF NORTHERN FUNDS ] [MONEY MARKET FUNDS] MONEY MARKET FUND U.S. GOVERNMENT MONEY MARKET
FUND U.S. GOVERNMENT SELECT MONEY MARKET FUND MUNICIPAL MONEY MARKET FUND CALIFORNIA
MUNICIPAL MONEY MARKET FUND [FIXED INCOME FUNDS] U.S. GOVERNMENT FUND INTERMEDIATE TAX-
EXEMPT FUND FLORIDA INTERMEDIATE TAX-EXEMPT FUND FIXED INCOME FUND TAX-EXEMPT FUND
CALIFORNIA TAX-EXEMPT FUND INTERNATIONAL FIXED INCOME FUND HIGH YIELD MUNICIPAL FUND
HIGH YIELD FIXED INCOME FUND [EQUITY FUNDS] INCOME EQUITY FUND STOCK INDEX FUND
GROWTH EQUITY FUND SELECT EQUITY FUND MID CAP GROWTH FUND SMALL CAP FUND
INTERNATIONAL GROWTH EQUITY FUND INTERNATIONAL SELECT EQUITY FUND TECHNOLOGY FUND
</TABLE>
================================================================================
A N N U A L R E P O R T
================================================================================
[ March 31, 1999 ]
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Abbreviations and Other Information......................................................................................1
Economic and Market Overviews............................................................................................2
Portfolio Commentaries...................................................................................................4
Money Market Funds
Statements of Assets and Liabilities...............................................................................15
Statements of Operations.......................................................................................... 16
Statements of Changes in Net Assets............................................................................... 17
Financial Highlights.............................................................................................. 19
Schedules of Investments
Money Market Fund............................................................................................. 23
U.S. Government Money Market Fund............................................................................. 28
U.S. Government Select Money Market Fund...................................................................... 29
Municipal Money Market Fund................................................................................... 30
California Municipal Money Market Fund........................................................................ 44
Fixed Income Funds
Statements of Assets and Liabilities...............................................................................48
Statements of Operations.......................................................................................... 50
Statements of Changes in Net Assets............................................................................... 52
Financial Highlights.............................................................................................. 55
Schedules of Investments
U.S. Government Fund.......................................................................................... 61
Intermediate Tax-Exempt Fund.................................................................................. 62
Florida Intermediate Tax-Exempt Fund.......................................................................... 67
Fixed Income Fund............................................................................................. 69
Tax-Exempt Fund............................................................................................... 71
California Tax-Exempt Fund.................................................................................... 76
International Fixed Income Fund............................................................................... 79
High Yield Municipal Fund..................................................................................... 80
High Yield Fixed Income Fund.................................................................................. 82
Equity Funds
Statements of Assets and Liabilities.............................................................................. 84
Statements of Operations.......................................................................................... 85
Statements of Changes in Net Assets............................................................................... 86
Financial Highlights.............................................................................................. 88
Schedules of Investments
Income Equity Fund............................................................................................ 94
Stock Index Fund.............................................................................................. 97
Growth Equity Fund........................................................................................... 105
Select Equity Fund........................................................................................... 108
Mid Cap Growth Fund.......................................................................................... 110
Small Cap Fund............................................................................................... 112
International Growth Equity Fund............................................................................. 127
International Select Equity Fund............................................................................. 129
Technology Fund.............................................................................................. 131
Notes to the Financial Statements..................................................................................... 133
Report of Independent Public Accountants.............................................................................. 139
</TABLE>
<PAGE> 3
ABBREVIATIONS AND OTHER INFORMATION
With respect to the Schedules of Investments, the percentage shown for each
investment category reflects the value of investments in that category as a
percentage of total net assets.
Interest rates represent either the stated coupon rate, annualized yield on date
of purchase for discounted notes, or, for floating rate securities, the current
reset rate.
Prerefunding is a procedure in which a bond issuer floats a second bond in order
to pay off the first bond at the first call date. The proceeds from the sale of
the second bond are safely invested, usually in Treasury securities, that will
mature at the first call date of the first bond issue. Those first bonds are
said to be prerefunded after this operation has taken place.
Maturity dates represent the stated date on the security, the next interest
reset date or next puttable dates for floating rate securities or the
prerefunded date for these types of securities.
EXPLANATION OF ABBREVIATIONS USED THROUGHOUT THE SCHEDULES OF INVESTMENTS
ACA American Capital Access
ADR American Depository Receipt
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax
BAN Bond Anticipation Notes
BTP Banker's Trust Partnership
Colld. Collateralized
COP Certificate of Participation
CP Commercial Paper
CVP Central Valley Project
FFCB Federal Farm Credit Bank
FGIC Financial Guaranty Insurance Corp.
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Freddie Mac
FMC Fidelity Mortgage Corp.
FNMA Fannie Mae
FRN Floating Rate Note
FSA Financial Security Assurance
G.O. General Obligation
GNMA Government National Mortgage Association
Gtd. Guaranteed
HDA Housing Development Authority
HFA Housing Finance Authority
HUD Housing and Urban Development
I.O. Interest Only Stripped Security
IDA Industrial Development Authority
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MBS Mortgage Backed Securities
MIPS Monthly Income Preferred Securities
ML/SG Merrill Soc Gen
MTN Medium Term Notes
P-Floats Puttable Floating Rate Securities
PCR Pollution Control Revenue
PFA Public Finance Authority
PIES Premium Income Exchangeable Securities
PRIDES Preferred Redeemable Increased Dividend Securities
PRSV Preservation Project
PSF Permanent School Fund
RAN Revenue Anticipation Notes
REMIC Real Estate Mortgage Investment Conduit
ROC Reset Option Certificates
SFM Single Family Mortgage
SLMA SLM Holding Corp.
S.O. Special Obligation
Soc Gen Societe Generale
STRYPES Structured Yield Products Exchangeable for Stock
TAN Tax Anticipation Notes
TECONS Term Convertible Securities
TOB Tender Option Bonds
TOC Tender Option Certificates
TOCR Tender Option Custodial Receipts
TRACES Trust Automatic Common Exchange Securities
TRAN Tax and Revenue Anticipation Notes
TRB Tax Revenue Bonds
VRDN Variable Rate Demand Notes
VRN Variable Rate Notes
* Non-Income Producing Security
- ----------------------------------------
NOT FDIC-INSURED
- ----------------------------------------
May lose value
No bank guarantee
- ----------------------------------------
An investment in Northern Funds is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. Although the
money market funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Funds.
Shares of Northern Funds are distributed by Northern Funds Distributors, LLC, an
independent third party.
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1
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<PAGE> 4
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ECONOMIC AND MARKET OVERVIEWS
- --------------------------------------------------------------------------------
THE EQUITY MARKETS
The market poses a dilemma as we look ahead for the balance of the year. A small
number of megacap stocks have enjoyed a nearly unprecedented outperformance run,
leaving valuations in this narrow set of stocks very stretched. However, these
are the stocks that have fueled the market's rise the past three years,
especially since last fall's low. On the other hand, the majority of stocks have
been in a corrective mode since the spring of 1998 and valuations now look quite
interesting. Their dismal relative performance compared with the high profile
growth stocks has made their relative valuations look positive, but in general
they have lagged the market averages badly. We find many appealing investment
opportunities coming from this latter group of stocks, even as profit taking may
be in order for some of the megacap leadership issues.
Although we expect economic growth to slow, we still judge prospects as
favorable in 1999. After several quarters of slower than expected earnings
growth, we see a pickup in growth later this year and in 2000. Even as the U.S.
is slowing, the problem areas of the globe look less dismal and in some cases a
good recovery is possible. With the interest rate cuts of late 1998 now set to
positively impact growth, we may well be past the Asian-induced slowdown of 1998
on a global basis. Despite this growth pickup, inflation remains subdued and we
believe the market is not threatened by either higher inflation or higher
interest rates yet.
The strong underlying fundamentals of the bull market remain intact, namely:
reasonable growth, low inflation, low interest rates and adequate earnings.
Demand for equities remains positive although cash flows into mutual funds are
down from their peak levels of early 1998. Balancing these favorable factors is
the reality that select stocks are priced for perfection and are at historically
rich levels by measures such as price-to-earnings, price-to-book value and
dividend yield. While volatility may stay high, we believe good stock selection
may provide attractive returns for equity investors. While the level of market
may see limited progress, ample opportunities exist for longer-term patient
investors, but they may need to live with both rich valuation levels and high
volatility. After four years of 20% plus gains, a "breather" would be nice and
healthy from a longer-term point of view. This year may provide such a breather,
but as long as the fundamentals stay positive, we believe equities may provide
adequate returns.
THE FIXED INCOME MARKETS
Investors enjoyed a profitable, albeit volatile, year in the fixed income
markets. The yield curve steepened moderately during the period, with short
rates declining almost 60 basis points and long rates only about half as much.
After an initial rise early in the period, yields trended down through
mid-summer, as market participants embraced investment themes we had previously
identified as constructive for bond prices. Included among these were generous
real yields in a historical context, a favorable growth/inflation dynamic,
prudent fiscal policy (highlighted by the burgeoning budget surplus), and a
highly credible central bank. Against this backdrop, the fallout from Asia's
financial crises was spreading to other emerging markets, but had only a mild
impact on the U.S. bond market until Russia's default in August exposed massive
leverage in global bond markets. Attempts by hedge funds and other leveraged
investors to unwind positions in various non-Treasury or "spread" sectors caused
unprecedented dislocations in global bond markets and raised fears of worsening
financial market crises. This market action produced a dramatic widening of
interest rate differentials (i.e., spreads) between Treasury bonds and all other
bond market sectors.
During this period of heightened volatility at the end of September, we changed
our characterization of the bond market from constructive to neutral based on
our belief that rates finally reflected our heretofore non-consensus cyclical
and secular outlooks. Concomitantly, we highlighted the attractiveness of spread
product. We believed that the pessimism that gripped the bond market at that
time was overdone and that the fundamental economic backdrop was supportive of
spread sectors, especially because we felt the Fed would do what was necessary
to stabilize financial markets.
The Fed, in fact, did step into the breach to lower the fed funds rate on three
separate occasions within a six-week span, providing important support to global
markets, but also removing the "flight-to-safety" demand for Treasury bonds from
the market. Meanwhile, spread sectors have outperformed Treasuries by a wide
margin as last fall's crisis atmosphere has abated, taking prices on
non-Treasury debt much closer to "fair value." However, even though spread paper
has retraced much of last
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2
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<PAGE> 5
NORTHERN FUNDS Annual Report
fall's widening move, we believe the yield advantage of holding these securities
is still attractive on relative and fundamental bases, especially at the shorter
end of the yield curve.
The attention of bond investors has, not surprisingly, reverted to the core
outlook for growth and inflation. News on the inflation front remains highly
constructive; however, economic data signaling continued strength in the
domestic economy have again raised questions about whether or not the good
inflation news can last. Importantly, Chairman Greenspan and many Federal
Reserve governors have apparently subscribed to the view that it can.
Nevertheless, the ebb and flow of sentiment in this regard has defined a trading
range for the long bond of between 5.25% and 5.75%. Given our own expectation
that domestic growth should begin to slow and that inflation will remain
subdued, we expect this trading range to remain intact and, as such, believe
that neutral portfolio durations are appropriate.
Developments which pushed rates higher at the end of the period include concerns
about resynchronization of global growth. The major oil producers' much
publicized production cut, while spurring a recent jump in the price of oil, has
been attempted numerous times this decade and has yet to prove successful in
boosting prices over the long horizon. A sustained rise in the price of oil is
unlikely until global demand re-emerges. We also believe that fears that a
re-emergent Japan will lead to unsustainable increases in world growth are
misplaced. While equity markets signal that some Japanese improvement may be in
the offing, actual signs of rebounding economic activity remain sketchy. At the
same time, European growth appears to be slowing and the war in the Balkans has
increased the risk that weakness may spread should consumer sentiment
deteriorate. While notable government resignations leave us less discouraged by
Europe's recent leftward tilt, like Japan's, Europe's economy needs significant
fundamental reform. Because of the political difficulty in making the needed
changes, the process will likely be more drawn out than suggested by the
performance of local equity markets. As such, we do not expect global capacity
pressures to bite anytime soon. With growth expected to slow modestly in the
U.S. and with much of the developing world still struggling to post positive
growth, we believe fears of a synchronized global recovery are premature at
best.
THE GLOBAL MARKETS
The outlook for Europe remains upbeat as economic union has caused a sharp fall
in inflation and interest rates. Consolidation and restructuring have provided
additional boosts for European earnings, resulting in strong market gains over
the past 18 months. Last summer a healthy correction occurred providing
long-term investors an opportunity to add to positions late in 1998. Profits
look set to rise around 8% in 1999 and the emerging equity culture in Europe is
moving away from low yielding bonds and into stocks to achieve better returns.
The new Euroland has both a population and GDP roughly the size of the United
States, but has equity holdings that are very small compared with the U.S. As
this new culture emerges, longer-term gains from European stocks are likely as
the asset allocation shift, from bonds to stocks, has just begun.
We believe Asia appears to finally have bottomed as even Japan is up from its
lows and the recession is nearing its end. Policy changes occurred in Asia and
Japan to clean up bad loans in the financial system. Interest rates have fallen
across Asia and remain very low in Japan, enhancing the chances for a recovery
to begin in 1999, but gain strength in 2000. The markets have sensed a bottom in
profit declines and rallied sharply in the last six months. However, after the
devastating falls of 1997-1998, most stocks are still well down from early 1997
levels. As growth and profits recover over the next 18 months, we expect
investment opportunities to unfold across Asia as these markets are generally
priced more cheaply than either the U.S. or Europe.
Emerging market turmoil may have peaked early in 1999 with Brazil's devaluation,
perhaps bringing a two-year bear market in emerging equities to an end. While
economic pain is not likely to ease until next year, markets may sense that the
worst of the crisis is over with only uncertainty over China's potential
devaluation still lingering. In addition, the strength of the dollar may ease
back once the Kosovo crisis ends since the dollar's fundamentals have weakened a
bit due to rising trade imbalances. Such an event could end the headwind that
international investors have had to fight since 1995.
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3
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<PAGE> 6
- --------------------------------------------------------------------------------
PORTFOLIO COMMENTARIES
- --------------------------------------------------------------------------------
MONEY MARKET FUND
A defensive strategy was used last year as we anticipated another ease by the
Federal Reserve. The Asian crisis seemed not to affect the U.S. markets as first
thought it would. By the end of the year, things settled down and the domestic
economy remained healthy. There were no significant changes in the composition
of the Fund. The highest percentage of the Fund was invested in Tier One
Commercial Paper where yields were the most attractive. By focusing on short-
and long-maturities, the Fund kept to a barbell strategy trying to anticipate
Federal Reserve moves. As we moved into December, short-term rates were higher
and we began to experience year-end pressure. A barbell structure will be the
investment strategy whenever there is a backup in the market. Issuers are
selected keeping in mind credit quality as the first priority and then yield.
Guidelines are strictly followed. The Fund continues to be one of quality
investments.
In 1999 we will continue to monitor the Federal Reserve moves. At this point,
there is a possibility that interest rates will rise in the beginning of the
second half of the year. However, concerns about Y2K are expected to limit Fed
action as the year draws to a close.
Mary Ann Flynn
Portfolio Manager
U.S. GOVERNMENT MONEY MARKET FUND
U.S. GOVERNMENT SELECT MONEY MARKET FUND
In 1998, the Funds adopted a barbell maturity structure focusing on the short-
and long-term ends of the markets. This strategy afforded the Funds the ability
to remain competitive in a lower interest rate environment, while adding yield
and hedging against any move by the Federal Reserve. In the U.S. Government
Money Market Fund, we have substantially increased our exposure to repurchase
agreements both overnight and in the short-term markets. In the U.S. Government
Select Money Market Fund, we invest principally in those government agencies
which are exempt from state and local taxation. Looking ahead, we will maintain
our emphasis on quality, liquidity and yield.
Brian Andersen
Portfolio Manager
MUNICIPAL MONEY MARKET FUND
The Fund performed well for the year, despite a tight supply of short-term
municipal issues and notes. This limited availability hampered our efforts to
extend the Fund's average maturity as far out as we would have liked, given the
Federal Reserve Board's steady interest rate policy. At the end of fiscal 1999,
the Fund's average maturity was slightly shorter than our peer group.
This is a very technical and cyclical market driven by supply and demand
factors. As a result, we will closely watch the supply of short-term securities
and the actions of the Federal Reserve. If interest rates remain stable, we
currently plan to keep our average maturity longer than our peer group by adding
Tier One Commercial Paper, where yields are presently most attractive, and other
short-term tax-exempt securities.
Brad Snyder
Portfolio Manager
CALIFORNIA MUNICIPAL MONEY MARKET FUND
The Fund outperformed its benchmark for fiscal 1999. However, the supply of
short-term tax-exempt California securities was very limited, causing lower than
normal yields.
During the year, we purchased more commercial paper than in years passed in
order to lengthen the Fund's average maturity in light of the Federal Reserve
Board's steady interest rate course. Looking ahead, we will closely monitor the
actions of the Federal Reserve and evaluate supply factors in the market. If
interest rates remain steady, we expect to keep our average maturity longer than
our peer group.
Brad Snyder
Portfolio Manager
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4
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<PAGE> 7
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
MONEY MARKET FUNDS YIELD(1) COMPARISONS
AVERAGE MONTHLY RATES
IBC'S
MONEY FUND
AVERAGE(TM)/
CALIFORNIA
STATE-
U.S. GOV'T. CALIFORNIA SPECIFIC
IBC'S U.S. GOV'T. IBC'S SELECT IBC'S MUNICIPAL IBC'S MUNICIPAL STOCK
MONEY MONEY FUND MONEY MONEY FUND MONEY MONEY FUND MONEY MONEY FUND MONEY BROKER &
MARKET AVERAGE(TM)/ MARKET AVERAGE(TM)/ MARKET AVERAGE(TM)/ MARKET AVERAGE(TM)/ MARKET GENERAL
FUND ALL TAXABLE FUND GOVERNMENT FUND GOVERNMENT FUND ALL TAX-FREE FUND PURPOSE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
March 4.50% 4.35% 4.46% 4.17% 4.39% 4.17% 2.43% 2.44% 2.36% 2.30%
- ------------------------------------------------------------------------------------------------------------------------------------
February 4.59% 4.36% 4.48% 4.16% 4.41% 4.16% 2.21% 2.16% 1.96% 2.03%
- ------------------------------------------------------------------------------------------------------------------------------------
January 4.74% 4.46% 4.54% 4.21% 4.48% 4.21% 2.89% 2.56% 2.60% 2.42%
- ------------------------------------------------------------------------------------------------------------------------------------
1998
- ------------------------------------------------------------------------------------------------------------------------------------
December 4.77% 4.54% 4.57% 4.28% 4.50% 4.28% 2.93% 2.74% 2.67% 2.61%
- ------------------------------------------------------------------------------------------------------------------------------------
November 4.85% 4.60% 4.63% 4.35% 4.62% 4.35% 2.79% 2.69% 2.61% 2.55%
- ------------------------------------------------------------------------------------------------------------------------------------
October 4.96% 4.74% 4.81% 4.49% 4.75% 4.49% 2.95% 2.78% 2.76% 2.63%
- ------------------------------------------------------------------------------------------------------------------------------------
September 5.10% 4.99% 5.06% 4.81% 4.98% 4.81% 3.09% 2.93% 2.78% 2.78%
- ------------------------------------------------------------------------------------------------------------------------------------
August 5.13% 5.01% 5.09% 4.84% 4.99% 4.84% 2.98% 2.79% 2.55% 2.62%
- ------------------------------------------------------------------------------------------------------------------------------------
July 5.13% 5.01% 5.09% 4.84% 5.01% 4.84% 2.99% 3.04% 2.70% 2.92%
- ------------------------------------------------------------------------------------------------------------------------------------
June 5.13% 5.01% 5.09% 4.84% 4.98% 4.84% 3.14% 3.04% 2.94% 2.92%
- ------------------------------------------------------------------------------------------------------------------------------------
May 5.12% 5.00% 5.08% 4.82% 4.99% 4.82% 3.36% 3.23% 3.27% 3.13%
- ------------------------------------------------------------------------------------------------------------------------------------
April 5.12% 5.02% 5.08% 4.85% 5.02% 4.85% 3.40% 3.23% 3.29% 3.13%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUNDS 7-DAY YIELDS(1)
PERIOD ENDED MAY 14, 1999
U.S. GOVERNMENT U.S. GOVERNMENT SELECT MUNICIPAL CALIFORNIA MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Current 4.47% 4.35% 4.28% 2.98% 2.86%
- ------------------------------------------------------------------------------------------------------------------------------
Effective 4.57% 4.45% 4.37% 3.02% 2.90%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Yield calculations reflect fee waivers in effect, represent past performance
and will fluctuate. In the absence of fee waivers, current 7-day yields for
the Money Market, U.S. Government Money Market, U.S. Government Select Money
Market, Municipal Money Market and California Municipal Money Market Funds
would have been 4.42%, 4.28%, 4.19%, 2.92% and 2.83%, respectively. An
investment in any one of the money market funds is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other governmental
agency. Although the money market funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Funds.
We compare our Funds to the IBC's Money Fund Averages(TM) which are
composites of professionally managed money market investments with similar
investment objectives.
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5
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<PAGE> 8
- --------------------------------------------------------------------------------
U.S. Government Fund
- --------------------------------------------------------------------------------
Performance of the Fund during the fiscal year reflected a modest increase in
Treasury prices, as favorable inflation statistics continued to offset concerns
regarding strength in the domestic economy. While Treasury rates shifted
abruptly lower in early October, interest rates reversed course and moved
generally higher throughout the balance of the fiscal period. During the last
twelve months, the Fund's performance has generally followed the movement in
Treasury prices. The Fund's return profile was enhanced by greater interest rate
sensitivity in the first six months, followed by a more neutral interest rate
posture over the course of the past six months. More recently, increased
exposure to agency and mortgage-backed securities has been a positive
contribution to the relative return profile. At the present time, we continue to
maintain a neutral interest rate posture.
Monty Memler
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Lehman Brothers Intermediate U.S. Government Bond Index includes all public
obligations of the U.S. Treasury, and all publicly issued debt of U.S.
government agencies, quasi-federal corporations, and corporate or foreign debt
guaranteed by the U.S. government. Excluded are special issues, such as flower
bonds, targeted investor notes (TINs), and state and local government series
(SLGs) bonds. The Intermediate Government Bond Index includes only those issues
with maturities of up to ten years.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Intermediate Tax-Exempt Fund
- --------------------------------------------------------------------------------
Investors enjoyed a profitable, albeit volatile, year in U.S. bond markets as
declining inflation and global financial market turmoil offset stronger than
expected domestic growth. Although municipal bond price gains trailed those of
their Treasury counterparts, the Fund generated a solidly positive total return
in fiscal 1999. The Fund's duration positioning and increased exposure to
higher-yielding securities aided performance in an environment of falling rates,
muted volatility and generally improving credit quality. However, the Fund was
positioned for a flattening yield curve, when in fact the municipal yield curve
steepened, causing the Fund to slightly underperform its benchmark. We continue
to seek out opportunities to increase the Fund's yield and total return
potential by making well-researched credit selections within the municipal
marketplace. One area of focus is the health care arena, where we believe
opportunities exist following well-publicized financial pressures facing
specific entities, as well as an overall heightened level of scrutiny being paid
to this sector. Going forward, we anticipate positioning the Fund's duration in
line with our expectation of a trendless, range-bound interest rate environment.
Eric Bergson
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Lehman Brothers 5-Year Municipal Bond Index includes investment-grade (Baa
or better) tax-exempt bonds with maturities of four to six years. The Index is
weighted according to market capitalization on a bond by bond basis, and it can
include only investable securities. To be included in the 5-Year Municipal Bond
Index the original transaction size must have been greater than $50 million.
Each bond must have been issued since December 31, 1990 and have an outstanding
par value greater than $3 million, and a remaining maturity of at least one
year. Bonds with floating rates including derivative and residual interest
securities are excluded.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
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6
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<PAGE> 9
NORTHERN FUNDS Annual Report
- --------------------------------------------------------------------------------
Florida Intermediate Tax-Exempt Fund
- --------------------------------------------------------------------------------
Investors enjoyed a profitable, albeit volatile, year in U.S. bond markets as
declining inflation and global financial market turmoil offset stronger than
expected domestic growth. Although municipal bond price gains trailed those of
their Treasury counterparts, the Fund generated a solidly positive total return
in fiscal 1999. The Fund's duration positioning and increased exposure to
higher-yielding securities aided performance in an environment of falling rates,
muted volatility and generally improving credit quality. However, the Fund was
positioned for a flattening yield curve, when in fact the municipal yield curve
steepened, causing the Fund to slightly underperform its benchmarks. We continue
to seek out opportunities to increase the Fund's yield and total return
potential by making well-researched credit selections within the Florida
municipal marketplace. One area of focus is the health care arena, where we
believe opportunities exist following well-publicized financial pressures facing
specific entities, as well as an overall heightened level of scrutiny being paid
to this sector. Going forward, we anticipate positioning the Fund's duration in
line with our expectation of a trendless, range-bound interest rate environment.
Eric Bergson
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 8/15/96
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The Lehman Brothers Mutual Fund
Florida Intermediate Tax-Exempt Municipal Index includes investment-grade (Baa
or better) tax-exempt Florida bonds. To be included in the Index the original
transaction size must have been greater than $50 million. Each bond must have
been issued since December 31, 1990 and have an outstanding par value greater
than $3 million, and a remaining maturity of at least 1 year. Taxable municipal
bonds, bonds with floating rates, derivatives, and certificates of participation
are excluded. The Lehman Brothers Mutual Fund Intermediate Municipal Bond Index
includes eligible municipal bonds with maturities of five to ten years. Bonds
eligible to be included in this Index are investment-grade tax-exempt bonds (Baa
or better), with a fixed coupon rate, issued after December 31, 1990 as part of
a transaction of at least $50 million. They must also have an outstanding par
value greater than $3 million and a remaining maturity of at least one year.
Taxable municipal bonds, bonds with floating rates, derivatives, and
certificates of participation are excluded. Unlike actual fund performance,
performance of an index does not reflect any expenses or transaction costs. A
direct investment in an unmanaged index is not possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fixed Income Fund
- --------------------------------------------------------------------------------
A number of factors impacted performance during fiscal 1999, including the
upheaval in the financial markets during August and October 1998. The Asian
crisis, Russian default and hedge fund liquidations created a flight-to-quality
which caused Treasury securities to significantly outperform other fixed income
asset classes. As interest rates fell, the Fund experienced capital gains, which
helped to boost returns. Still, the Fund underperformed its benchmark due to its
overweight in non-Treasury ("spread") securities.
During the year, the Fund took the opportunity to increase its position in
mortgage-backed securities as interest rates fell, spreads widened and the
risk/return profile made these highly liquid, strong credit quality securities
particularly attractive. While the Fund was not immune to these events, we used
the weakness in the market as an opportunity to purchase more "spread" assets.
Should the markets remain steady and liquidity improve, we believe the Fund will
be poised to outperform.
Steven Schafer
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The Lehman Brothers
Government/Corporate Bond Index includes all public obligations of the U.S.
Treasury, excluding flower bonds, targeted investor notes (TINs), and state and
local government series (SLGs) bonds; all publicly issued debt of U.S.
government agencies and quasi-federal corporations, and corporate or foreign
debt guaranteed by the U.S. government; all publicly issued, fixed rate,
nonconvertible investment-grade, dollar-denominated, SEC-registered corporate
debt. The Index sectors are industrial, finance, utility, and Yankee. To be
included in the Index the bonds must meet the following criteria; must have at
least one year to maturity; have at least $100 million par amount outstanding;
must be rated investment-grade (Baa3 or better) by Moody's Investors Service
(unless it is a U.S. government or agency security, which are generally not
formally rated); must be fixed-rate, although it can carry a coupon that steps
up or changes according to a predetermined schedule. Unlike actual fund
performance, performance of an index does not reflect any expenses or
transaction costs. A direct investment in an unmanaged index is not possible.
- --------------------------------------------------------------------------------
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7
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<PAGE> 10
- --------------------------------------------------------------------------------
Tax-Exempt Fund
- --------------------------------------------------------------------------------
Shareholders benefited last year as the Fund was correctly positioned to
capitalize on a general decline in interest rates. Constructive inflation news
and demand for safe U.S. Treasury bonds amidst global uncertainties led to the
lower rates even as domestic growth exceeded expectations. Although interest
rates declined, a steeper yield curve, caused by a greater decline in short
rates versus long rates, was not anticipated and led to a slight
underperformance versus the benchmark. Throughout the year, the Fund maintained
its efforts to increase yield through well-researched sector and credit
selections without lowering the overall quality of the Fund. Sectors employed
for this effort included health care, housing and corporate-backed municipal
bonds, all of which increased the income component of total return that became
even more important in a low interest rate environment. The Fund will continue
to focus on generating a high level of tax-free income while targeting a
maturity structure that both captures the benefits of a steeper municipal yield
curve and reflects our outlook for interest rates to remain range-bound.
Tim McGregor
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Lehman Brothers Municipal Bond Index includes investment-grade (Baa or
better) tax-exempt bonds. The Index is weighted according to market
capitalization. To be included in the Index the original transaction size must
have been been greater than $50 million. Each bond must have been issued since
December 31, 1990 and have an outstanding par value greater than $3 million, and
a remaining maturity of at least one year. Taxable municipal bonds, bonds with
floating rates, derivatives, and certificates of participation are excluded.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
California Tax-Exempt Fund
- --------------------------------------------------------------------------------
Bond markets rallied over the past 12 months as favorable inflation news
countered surprisingly strong domestic growth. In particular, Treasuries
benefited from unstable global financial markets and handily outperformed
municipals. For shareholders, the Fund delivered another year of strong positive
returns, despite a significant increase in tax-exempt issuance. During this
period, we actively maintained the Fund's duration at a longer-than-benchmark
weighting, which enhanced performance as interest rates fell. However, the Fund
was structured for a flattening California municipal yield curve, when in fact
curves generally steepened, causing it to slightly underperform its benchmarks.
In addition, we continue to focus on increasing the yield of the Fund by making
issue-specific credit decisions. In the process, we have been reducing our
exposure to the AAA-rated insured sector. Going forward, we anticipate
positioning the Fund's duration in line with our expectation of a trendless,
range-bound interest rate environment.
Eric Boeckmann
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/8/97
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The Lehman Brothers Mutual Fund
Intermediate Municipal Bond Index includes eligible municipal bonds with
maturities of five to ten years. Bonds eligible to be included in this Index are
investment-grade tax-exempt bonds (Baa or better), with a fixed coupon rate,
issued after December 31, 1990 as part of a transaction of at least $50 million.
They must also have an outstanding par value greater than $3 million and a
remaining maturity of at least one year. Taxable municipal bonds, bonds with
floating rates, derivatives, and certificates of participation are excluded. The
Lehman Brothers California Exempt Municipal Index includes investment grade (Baa
or better) tax-exempt California bonds. The Index is rule based and market value
weighted. To be included in the Index, the original transaction size must have
been greater than $50 million. Each bond must have been issued since December
31, 1990 and have an outstanding par value greater than $3 million, and a
remaining maturity of at least 1 year. Taxable municipal bonds, bonds with
floating rates, derivatives, and certificates of participation are excluded.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- -----
8
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<PAGE> 11
NORTHERN FUNDS Annual Report
- --------------------------------------------------------------------------------
International Fixed Income Fund
- --------------------------------------------------------------------------------
Slower worldwide growth and deflationary economic conditions led to lower
interest rates around the globe. In currency terms, the U.S. trade deficit
weighed heavily on the dollar causing the yen and most European currencies to
appreciate relative to the dollar. As such, our unhedged foreign bond holdings
experienced solid total returns from both the price component on the bonds and
the currency appreciation. Focusing on specific countries, Japan continued to
experience economic difficulties amid a lack of consumer demand. In response, it
pushed its overnight lending rates to near zero and undertook a massive
stimulative fiscal package. Moving to Europe, the turn of the year brought the
implementation of the Euro. At first on account of convergence toward a central
rate, and more recently due to economic weakness, that region of the world has
seen its interest rates move lower as well. Throughout, the Fund has been
overweight in both the U.S. and the UK due to the fundamental strengths in their
economies and favorable real interest rates. We believe these dynamics should
provide for solid absolute and relative returns in the coming year.
Michael Lannan
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The J.P. Morgan International
Government Bond Index is a daily, market capitalization-weighted international
fixed income total return index consisting of 12 countries: Australia, Belgium,
Canada, France, Germany, Japan, Netherlands, the United Kingdom, Italy, Spain,
Denmark and Sweden. The constituent indices are fully invested. The Index is
represented in U.S. dollars. Each component is converted into U.S. dollars and
then aggregated. Unlike actual fund performance, performance of an index does
not reflect any expenses or transaction costs. A direct investment in an
unmanaged index is not possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
High Yield Municipal Fund
- --------------------------------------------------------------------------------
The Fund's performance was impacted by the fact that it was in its start-up
phase and not fully invested. Because new issue supply was tight during the
period and most of the performance in the high yield municipal market was
through coupon return, the Fund underperformed its benchmark. During the
quarter, we built the Fund's sector weights versus the benchmark, based on our
macro view of the economy and how it will impact specific industries and
holdings. Specifically, the Fund purchased a large percentage of new issues as
they offer the best liquidity in the market. We overweighted BBB-rated issues as
credit spread for BB and B credits remained tight. We underweighted resource
recovery and transportation due to the lack of availability of attractive issues
in these sectors. Looking ahead, we expect economic growth to moderate from its
very strong levels. We also expect interest rates to remain range bound. As a
result, we will continue to focus on sectors that we feel would be less
adversely affected by slower growth and avoid sectors with exposure to extreme
cyclical risk.
Jane McCart
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 12/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Lehman Brothers Municipal Non-Investment Grade Bond Index includes issues
which have a maximum credit rating of BA1, are issued as part of a deal of at
least $20 million; have an amount outstanding of at least $3 million; have a
maturity of at least one year; and have been issued after December 31, 1990.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
INVESTORS ARE REMINDED THAT, WHILE INVESTING GLOBALLY CAN BE REWARDING,
INVESTMENTS IN FOREIGN SECURITIES INVOLVE CERTAIN RISKS AND CONSIDERATIONS IN
ADDITION TO THOSE INHERENT WITH INVESTING IN U.S. COMPANIES, SUCH AS CURRENCY
FLUCTUATIONS AND POLITICAL INSTABILITY.
-----
9
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<PAGE> 12
- --------------------------------------------------------------------------------
High Yield Fixed Income Fund
- --------------------------------------------------------------------------------
With an inception date of December 31, 1998, the Fund outperformed its benchmark
during its first quarter of operations. The Fund's performance was boosted by
two major factors. First, the Fund's higher cash position, which resulted
because we were in the process of building the Fund, cushioned the Fund somewhat
from some of the declines experienced in February as interest rates moved
higher. Second, the Fund's positions in certain sectors, such as
telecommunications, gaming, food and home construction, were especially strong
and helped to boost returns. During the quarter, the Fund emphasized industries
that we believe will benefit from the favorable economic environment, as well as
the positive market environment in the high yield fixed income markets.
Specifically, we focused on new issues as they offered the best liquidity in the
market. We also purchased some issues in the low investment grade area that
offered a large incremental yield pick-up versus some of the spreads found in
the high BB category. Looking ahead, we expect economic growth to moderate from
its very strong levels. As such, we anticipate that interest rates will remain
range bound. We will continue to focus on sectors that we feel will be less
adversely affected by slower growth and avoid sectors with exposure to extreme
cyclical risks.
Jane McCart
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 12/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The Lehman Brothers High Yield
Corporate Bond Index includes bonds rated Ba1 or lower by Moody's, or BB+ or
lower by S&P. Some unrated bonds are included in the Index. To be eligible, the
unrated bonds must have previously held a high-yield rating or have been
associated with a high-yield issuer, and must trade accordingly. The bonds must
be dollar-denominated, nonconvertible, have at least one year remaining to
maturity, and an outstanding par value of at least $100 million. Pay-in-kind
(PIK) bonds, Euro-bonds, and debt issues from countries designated as emerging
markets are excluded, but Yankee and global bonds (registered with the SEC) of
issuers in non-EMG countries are included. Original issue zeroes and step-up
coupon structures are also included. Unlike actual fund performance, performance
of an index does not reflect any expenses or transaction costs. A direct
investment in an unmanaged index is not possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income Equity Fund
- --------------------------------------------------------------------------------
The watchword for fiscal 1999 was simple: Bigger is better. This can be seen by
the returns for the S&P 500(R), representing large cap companies, 18.5%; the S&P
MidCap 400 Index, 0.44%, and the Russell 2000 Index, representing small cap
stocks, -16.2%. Since issuers of convertible securities tend to be medium and
smaller companies, the convertible market as measured by the Fund's benchmark,
gave a pretty good account of itself with a total return of 5.87%. High quality
issues performed best, as a result of the scare thrown into markets by the
Russian default last summer. Yield spreads for all but the highest grade issues
widened to levels not seen in years. In addition, there was very little new
issue activity in the second half, combined with ongoing retirement of existing
supply. This tended to shrink the available pool of quality merchandise. While
our benchmark is all investment grade, the Fund generally holds between 20% and
30% of its convertible issues with ratings below investment grade. Consequently,
the Fund slightly underperformed its benchmark. The list of sectors that worked
well in the second half consisted primarily of technology and
telecommunications. We continued to be well represented in the latter, with
exposure to cable companies high, and some in cellular. Our underweight in
non-drug health care saved us from several disappointments, while our technology
exposure was not sensitive enough to the underlying stocks. More recently, the
broadening of market leadership, if continued, bodes well for a more diversified
approach than the recent period, which rewarded concentration on Internet and
technology issues.
Theodore T. Southworth
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost. The Merrill Lynch Investment Grade
Convertible Bond Index consists of all convertible bonds and preferreds
(domestic and Euro), rated AAA to BBB3 with at least $2.5 million par value
outstanding per issue. Unlike actual fund performance, performance of an index
does not reflect any expenses or transaction costs. A direct investment in an
unmanaged index is not possible.
- --------------------------------------------------------------------------------
- -----
10
- -----
<PAGE> 13
NORTHERN FUNDS Annual Report
- --------------------------------------------------------------------------------
Stock Index Fund
- --------------------------------------------------------------------------------
The Fund is designed to replicate the performance of the S&P 500(R) Index in an
efficient, cost-effective manner. The Fund provided a return that closely
matched that of the S&P 500(R). For the quarter ended March 31, 1999, large
capitalization stocks, as represented by the S&P 500(R), returned 4.99% and
continued to outperform small and midcap stocks, as represented by the Russell
2000 and the S&P MidCap 400 indicies, which returned -5.50% and -6.33%,
respectively. There were five additions and deletions to the S&P 500(R) since
January 1, 1999, all of which were accommodated in the Fund. During the next 12
months, we will continue to follow an indexing strategy designed to replicate,
before expenses, the performance of the S&P 500(R).
Judy Yang
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 10/7/96
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The S&P 500(R) Index consists of 500 stocks chosen for market size, liquidity,
and industry group representation. It is a market-value weighted index, with
each of the stock's weight in the Index proportionate to its market value. The
"500" is one of the most widely used benchmarks of U.S. equity performance.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth Equity Fund
- --------------------------------------------------------------------------------
For the fiscal year, the Fund outperformed the S&P 500(R). There were no major
structural changes in the overall portfolio during the fiscal year, as we
remained overweighted in those high-quality, large capitalization issues with a
high degree of earnings consistency and visibility. This large capitalization
bias was the primary reason the Fund was able to outpace the broad market in
what proved to be a tough year for most actively managed portfolios. Also
contributing to performance was our overweighting of certain economic sectors,
namely technology, health care and retail. Our stock selection strategy
continues to favor those companies with a proven track record of revenue and
earnings growth. Additionally, we favor those companies with a high degree of
earnings consistency and lower-than-average levels of debt on the balance sheet.
Through the year, we reduced the risk profile of the Fund by scaling back some
outsized positions and adding additional issues to the mix. Given the overall
level of the equity market, we feel this is a prudent strategy at this juncture.
For the current year, we are beginning to look at other areas of the marketplace
as we continue to reduce many of the overweighted positions that have treated us
so well in the past. The relative valuation level of many of our winners is
stretched fairly dramatically, thereby skewing the risk/return relationship
between continuing to overweight/hold many of these issues and beginning to look
elsewhere.
John Zielinski
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The S&P 500(R) Index consists of 500 stocks chosen for market size, liquidity,
and industry group representation. It is a market-value weighted index, with
each of the stock's weight in the Index proportionate to its market value. The
"500" is one of the most widely used benchmarks of U.S. equity performance.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
THE STOCK INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD
& POOR'S, NOR DOES STANDARD & POOR'S GUARANTEE THE ACCURACY AND/OR
COMPLETENESS OF THE S&P 500(R) COMPOSITE STOCK INDEX OR ANY DATA INCLUDED
THEREIN. STANDARD & POOR'S MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE
RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE FUND, ANY PERSON OR ANY
ENTITY FROM THE USE OF THE S&P 500(R) OR ANY DATA INCLUDED THEREIN. STANDARD &
POOR'S MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL SUCH
WARRANTIES OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE FOR USE WITH
RESPECT TO THE S&P 500(R) OR ANY DATA INCLUDED THEREIN.
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11
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<PAGE> 14
- --------------------------------------------------------------------------------
Select Equity Fund
- --------------------------------------------------------------------------------
The Fund's growth-orientation and bias toward large capitalization stocks
benefited the Fund's performance and helped it to outpace its benchmark for the
year. In particular, a low inflation environment, the aggressive easing of
monetary policy by the Federal Reserve Board and the subsequent stock market
rally helped to push growth stock prices higher. During the year, we increased
the number of holdings in the Fund when we sensed an increase in stock-specific
risk. Our analysis continues to identify a number of attractive issues in the
retail sector, where strong earnings growth is being driven by strong consumer
spending, and in the technology sectors, where strong earnings trends are being
driven by new products. We also reduced our weighting in health care stocks when
we perceived weakness in that sector. We believe that superior long-term
investment results may be obtained by owning stocks of quality companies with
strong earnings growth. We expect the market to continue to advance with
setbacks along the way. As a result, we continue to focus on growth stocks which
are performing well. Going forward, we will monitor our holdings, adjusting the
Fund as new areas of the market begin to provide more attractive opportunities
for investment.
Robert Streed
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/6/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The S&P 500(R) Index consists of 500 stocks chosen for market size, liquidity,
and industry group representation. It is a market-value weighted index, with
each of the stock's weight in the Index proportionate to its market value. The
"500" is one of the most widely used benchmarks of U.S. equity performance.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mid Cap Growth Fund
- --------------------------------------------------------------------------------
The Fund had an outstanding first year, substantially outperforming its
benchmark for fiscal 1999. The Fund's overweighting in the technology and health
care sectors, and its emphasis on stocks in the upper portion of the
mid-capitalization range helped boost returns amid generally sluggish price
appreciation in the mid cap stock universe overall. Looking ahead, factors which
will most influence the Fund's returns will be the relative performance of
various economic sectors and the performance of medium-sized stocks relative to
those of larger companies. As a result, the Fund remains alert to sector
rotation opportunities and continues to believe that an emphasis on strong
revenue and earnings growth is key to superior investment performance on a
long-term basis. During fiscal 1999, the Fund lagged well-managed large
capitalization funds. During fiscal 2000, the Fund may move down the
capitalization size spectrum when and if evidence of increasing investor
interest is manifested.
Ted Breckel
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 3/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Standard & Poor's MidCap 400 Stock Index is a market-weighted index composed
of 400 common stocks chosen by Standard & Poor's for market size, liquidity and
industry group representation. The purpose of the S&P MidCap 400 Index is to
represent the performance of the medium-capitalization sector of the U.S.
securities markets. Medium capitalized stocks which are included in the S&P 500
Index are excluded from the S&P MidCap 400 Index. Except for a limited number of
Canadian securities, the S&P MidCap 400 Index does not include foreign
securities. As of June 1, 1998, the approximate market capitalization range of
the companies included in the S&P MidCap 400 Index was between $328 million and
$17.5 billion.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
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12
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<PAGE> 15
NORTHERN FUNDS Annual Report
- --------------------------------------------------------------------------------
Small Cap Fund
- --------------------------------------------------------------------------------
The Fund's value orientation was the primary factor in its underperformance
relative to its benchmark, the Russell 2000 Index. The Fund's small cap bias,
relative to its benchmark, also had a negative effect on performance. We
employed quantitative methodologies to identify undervalued small cap stocks for
the Fund. Going forward, we will continue the quantitative approach, taking risk
only in the areas we feel we can provide "value-added" and neutralizing all
other portfolio risk factors relative to the benchmark.
Susan French
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Russell 2000 Index is an index of the smallest 2,000 companies in the
Russell 3000 Index, as ranked by total market capitalization. The Russell 2000
Index is widely regarded in the industry to accurately capture the universe of
small-cap stocks.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
International Growth Equity Fund
- --------------------------------------------------------------------------------
The Fund outperformed its benchmark primarily due to its overweighting in
Europe. Their falling interest rates, leading up to the European Monetary Union
(EMU), helped to fuel the economy and earnings environment overall. The Fund's
underweighting in Japan and Asia relative to its benchmark also helped
performance during the year. While foreign markets overall lagged the U.S.,
individual markets provided adequate absolute returns. During the period, we
emphasized quality growth areas such as telecom, financials and pharmaceutical
stocks, particularly in Europe, which benefited from the positive economic
environment and the larger degree of restructuring that took place in these
sectors. We believe the unprecedented amount of restructuring announced by
Japanese companies will allow Japan to also restructure its economy. This, in
turn, could eventually lead to a sustained economic recovery. We have increased
our weighting in Japan in order to capitalize on this potential.
Robert LaFleur
Portfolio Manager
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Morgan Stanley EAFE Index is a market capitalization-weighted equity index
comprising 21 of the 48 countries in the Morgan Stanley universe and
representing the developed stock markets outside of North America. Each Morgan
Stanley country index is created separately, then aggregated, without change,
into regional Morgan Stanley indices. EAFE performance data is calculated in
U.S. dollars and in local currency.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
INVESTORS ARE REMINDED THAT, WHILE INVESTING GLOBALLY CAN BE REWARDING,
INVESTMENTS IN FOREIGN SECURITIES INVOLVE CERTAIN RISKS AND CONSIDERATIONS IN
ADDITION TO THOSE INHERENT WITH INVESTING IN U.S. COMPANIES, SUCH AS CURRENCY
FLUCTUATIONS AND POLITICAL INSTABILITY.
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13
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<PAGE> 16
- --------------------------------------------------------------------------------
International Select Equity Fund
- --------------------------------------------------------------------------------
The Fund performed well in fiscal 1999, outperforming its benchmark for the
year. The largest factor contributing to the Fund's results was its significant
underweighting in emerging markets, where the continuing financial crisis
dampened the economic outlook for the region. While foreign markets overall
lagged the U.S., individual markets provided adequate absolute returns. During
the period, we emphasized the stocks of companies with an above-average profile
of earnings relative to their local market. We have already seen signs of
improvement in the emerging market economies. Looking ahead, we believe the
long-term outlook for a sustained Japanese recovery is on the horizon. As a
result, the Fund has increased its exposure to Japan and emerging markets.
Robert LaFleur
Svein Backer
Portfolio Managers
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/5/94
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Morgan Stanley EAFE plus Emerging Markets Free Index is composed of
companies representative of the market structure of 21 developed European and
Pacific Basin countries and 26 emerging market countries. The Index represents
stock market trends by representing the evolution of an unmanaged portfolio
comprising a broad selection of domestically listed companies. Stock selection
also takes into consideration the trading capabilities of foreigners in emerging
market countries.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Technology Fund
- --------------------------------------------------------------------------------
Driven by investor demand and strong sales and earnings growth, technology
stocks maintained their market leadership through fiscal 1999. The Fund's
performance was boosted by its focus on market leaders, a segment of the market
which performed especially well during the year. In particular, the Fund
benefited from the expansion of its commitment to the Internet sector, the shift
in its exposure within the semiconductor sector toward companies that supply
communications end markets, and the reduction in its enterprise software
holdings.
Having performed so well over the past several years, the technology sector
could come under profit-taking pressure due to fears of slowing growth or the
decision by investors to shift to other areas of the market in search of new
leadership. We believe, however, that the continuing rapid pace of development
within the technology industry (e.g., internet applications and wireless
communications) will lead to further gains among this group of stocks.
John Leo
George Gilbert
Portfolio Managers
[ CHART ]
This chart assumes an initial gross investment of $10,000 made on 4/1/96
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that shares, when redeemed, may be
worth more or less than the original cost.
The Morgan Stanley High Tech Index is an equal dollar-weighted index of 35
stocks from 9 technology subsectors: computer services, design software, server
software, PC software and new media, networking and telecom equipment, server
hardware, PC hardware and peripherals, specialized systems, and semi-conductors.
The S&P 500(R) Index consists of 500 stocks chosen for market size, liquidity,
and industry group representation. It is a market-value weighted index, with
each of the stock's weight in the Index proportionate to its market value. The
"500" is one of the most widely used benchmarks of U.S. equity performance.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
- --------------------------------------------------------------------------------
INVESTORS ARE REMINDED THAT, WHILE INVESTING GLOBALLY CAN BE REWARDING,
INVESTMENTS IN FOREIGN SECURITIES INVOLVE CERTAIN RISKS AND CONSIDERATIONS IN
ADDITION TO THOSE INHERENT WITH INVESTING IN U.S. COMPANIES, SUCH AS CURRENCY
FLUCTUATIONS AND POLITICAL INSTABILITY.
- -----
14
- -----
<PAGE> 17
NORTHERN FUNDS Annual Report
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1999
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S.
U.S. GOV'T. CALIFORNIA
GOV'T. SELECT MUNICIPAL MUNICIPAL
MONEY MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA FUND FUND FUND FUND FUND
- ------------------------------------------- ---------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost $4,527,125 $460,094 $420,117 $2,321,774 $357,366
Repurchase agreements, at cost which
approximates market value 335,214 48,564 -- -- --
Cash 556 1 18 20,500 11
Income receivable 15,743 761 802 14,887 3,130
Receivable for fund shares sold 32,480 4,565 951 34,071 17,357
Receivable for securities sold 45,736 -- -- 2,675 100
Receivable from Adviser 31 6 6 17 3
Prepaid and other assets 113 27 21 68 12
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 4,956,998 514,018 421,915 2,393,992 377,979
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 18,322 1,818 1,653 4,769 691
Payable for fund shares redeemed 18,894 4,120 3,632 -- 14,150
Payable for securities purchased 32,480 38,089 -- 4,600 --
Accrued administration fees 390 47 34 200 26
Accrued investment advisory fees 317 32 28 151 23
Accrued transfer agent fees 79 8 7 38 6
Accrued custody and accounting fees 30 7 9 25 6
Accrued registration fees and other liabilities 388 31 25 179 27
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 70,900 44,152 5,388 9,962 14,929
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $4,886,098 $469,866 $416,527 $2,384,030 $363,050
===========================================================================================================================
ANALYSIS OF NET ASSETS:
Capital stock $4,885,938 $469,826 $416,503 $2,383,595 $362,999
Accumulated undistributed net investment income 124 33 21 207 20
Accumulated undistributed net realized gains 36 7 3 228 31
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets $4,886,098 $469,866 $416,527 $2,384,030 $363,050
===========================================================================================================================
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 4,886,058 469,858 416,523 2,383,732 363,018
NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
-----
15
-----
<PAGE> 18
STATEMENTS OF OPERATIONS YEAR ENDED MARCH 31, 1999
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S.
U.S. GOV'T. CALIFORNIA
GOV'T. SELECT MUNICIPAL MUNICIPAL
MONEY MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET MARKET
AMOUNTS IN THOUSANDS FUND FUND FUND FUND FUND
- --------------------------------------------------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $209,486 $23,237 $19,138 $70,479 $8,826
- --------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 23,024 2,596 2,176 12,244 1,637
Administration fees 5,756 649 544 3,061 409
Transfer agent fees 3,837 433 363 2,041 273
Custody and accounting fees 844 137 111 479 100
Registration fees 458 37 53 146 10
Professional fees 82 25 24 53 22
Trustees' fees and expenses 64 10 9 37 7
Amortization of organization costs 27 10 6 31 6
Other 192 55 19 115 18
- --------------------------------------------------------------------------------------------------------------------------
Total Expenses 34,284 3,952 3,305 18,207 2,482
Less voluntary waivers of:
Investment advisory fees (7,674) (865) (725) (4,081) (546)
Administration fees (3,308) (355) (318) (1,721) (232)
Less reimbursement of expenses by Adviser (2,196) (353) (268) (1,181) (203)
- --------------------------------------------------------------------------------------------------------------------------
Net Expenses 21,106 2,379 1,994 11,224 1,501
- --------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 188,380 20,858 17,144 59,255 7,325
- --------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAINS:
Investments 33 3 3 228 32
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $188,413 $20,861 $17,147 $59,483 $7,357
==========================================================================================================================
</TABLE>
See Notes to the Financial Statements.
- -----
16
- -----
<PAGE> 19
NORTHERN FUNDS Annual Report
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
---------------------------- ----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1999 1998 1999 1998
- -------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 188,380 $ 123,232 $ 20,858 $ 17,384
Net realized gains on investments 33 3 3 4
- ---------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 188,413 123,235 20,861 17,388
- ---------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 14,249,027 11,527,035 2,260,589 1,747,441
Shares from reinvestment of dividends 31,770 15,289 4,881 3,063
Shares redeemed (12,690,762) (9,853,484) (2,212,649) (1,647,725
- ---------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Capital Share Transactions 1,590,035 1,688,840 52,821 102,779
- ---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (188,380) (123,232) (20,858) (17,384)
- ---------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 1,590,068 1,688,843 52,824 102,783
NET ASSETS:
Beginning of year 3,296,030 1,607,187 417,042 314,259
- ---------------------------------------------------------------------------------------------------------
End of year $ 4,886,098 $ 3,296,030 $ 469,866 $ 417,042
=========================================================================================================
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $124 $101 $33 $27
=========================================================================================================
</TABLE>
See Notes to the Financial Statements.
-----
17
-----
<PAGE> 20
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S. GOVERNMENT CALIFORNIA
SELECT MUNICIPAL MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
-------------------------- -------------------------- ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1999 1998 1999 1998 1999 1998
- -------------------- -------------------------- -------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 17,144 $ 11,165 $ 59,255 $ 48,537 $ 7,325 $ 6,740
Net realized gains (losses) on investments 3 1 228 255 32 (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 17,147 11,166 59,483 48,792 7,357 6,739
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 1,670,254 1,006,456 9,069,717 7,708,423 1,609,467 1,249,341
Shares from reinvestment of dividends 5,089 3,723 9,443 5,789 1,945 1,007
Shares redeemed (1,565,244) (871,883) (8,509,555) (7,320,165) (1,473,237) (1,226,493)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Capital Share Transactions 110,099 138,296 569,605 394,047 138,175 23,855
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (17,144) (11,165) (59,255) (48,537) (7,325) (6,740)
From net realized gains -- -- (146) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (17,144) (11,165) (59,401) (48,537) (7,325) (6,740)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 110,102 138,297 569,687 394,302 138,207 23,854
NET ASSETS:
Beginning of year 306,425 168,128 1,814,343 1,420,041 224,843 200,989
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $ 416,527 $ 306,425 $ 2,384,030 $ 1,814,343 $ 363,050 $ 224,843
===================================================================================================================================
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $ 21 $ 14 $ 207 $ 180 $ 20 $ 13
===================================================================================================================================
</TABLE>
See Notes to the Financial Statements.
- -----
18
- -----
<PAGE> 21
NORTHERN FUNDS Annual Report
FINANCIAL HIGHLIGHTS
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(1)
- ------------------------- ----------------------------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.04
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.05) (0.05) (0.05) (0.05) (0.04)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
===================================================================================================================================
TOTAL RETURN(2) 5.04% 5.31% 5.05% 5.57% 4.55%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $4,886,098 $3,296,030 $1,607,187 $1,061,813 $894,279
Ratio to average net assets of(3):
Expenses, net of waivers and
reimbursements 0.55% 0.55% 0.55% 0.49% 0.45%
Expenses, before waivers and
reimbursements 0.89% 0.90% 0.90% 0.91% 0.96%
Net investment income, net of
waivers and reimbursements 4.91% 5.19% 4.94% 5.42% 4.94%
Net investment income, before
waivers and reimbursements 4.57% 4.84% 4.59% 5.00% 4.43%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 11, 1994 (commencement of operations) through March
31, 1995.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
-----
19
-----
<PAGE> 22
FINANCIAL HIGHLIGHTS (CONTINUED)
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND
----------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(1)
- ----------------------- ----------------------------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.04
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.05) (0.05) (0.05) (0.05) (0.04)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.05) (0.05) (0.05) (0.05) (0.04)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
===================================================================================================================================
TOTAL RETURN(3) 4.94% 5.22% 4.93% 5.46% 4.47%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $469,866 $417,042 $314,259 $207,105 $227,543
Ratio to average net assets of(4):
Expenses, net of waivers and
reimbursements 0.55% 0.55% 0.55% 0.49% 0.45%
Expenses, before waivers and
reimbursements 0.91% 0.93% 0.96% 0.94% 1.01%
Net investment income, net of
waivers and reimbursements 4.82% 5.10% 4.82% 5.33% 4.93%
Net investment income, before
waivers and reimbursements 4.46% 4.72% 4.41% 4.88% 4.37%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 11, 1994 (commencement of operations) through March
31, 1995.
(2) For the period December 12, 1994 (commencement of operations) through March
31, 1995.
(3) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(4) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
20
- -----
<PAGE> 23
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SELECT MUNICIPAL
MONEY MARKET MONEY MARKET
FUND FUND
- --------------------------------------------------------- ------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(2) 1999 1998 1997 1996 1995(1)
- -------------------------------------------------------- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
0.05 0.05 0.05 0.05 0.02 0.03 0.03 0.03 0.03 0.03
- -----------------------------------------------------------------------------------------------------------------------------------
(0.05) (0.05) (0.05) (0.05) (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
- -----------------------------------------------------------------------------------------------------------------------------------
(0.05) (0.05) (0.05) (0.05) (0.02) (0.03) (0.03) (0.03) (0.03) (0.03)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================================================================================================================================
4.87% 5.24% 5.07% 5.55% 1.75% 2.98% 3.27% 3.14% 3.54% 2.90%
$416,527 $306,425 $168,128 $85,400 $82,162 $2,384,030 $ 1,814,343 $1,420,041 $1,102,789 $ 927,747
0.55% 0.46% 0.40% 0.33% 0.30% 0.55% 0.55% 0.55% 0.49% 0.45%
0.91% 0.93% 0.97% 1.00% 1.32% 0.89% 0.89% 0.90% 0.91% 0.95%
4.73% 5.13% 4.95% 5.43% 5.84% 2.90% 3.20% 3.08% 3.46% 3.10%
4.37% 4.66% 4.38% 4.76% 4.82% 2.56% 2.86% 2.73% 3.04% 2.60%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
21
-----
<PAGE> 24
FINANCIAL HIGHLIGHTS (CONTINUED)
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
CALIFORNIA
MUNICIPAL
MONEY MARKET
FUND
--------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(1)
- ----------------------- --------------------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.03 0.03 0.04 0.01
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.03) (0.03) (0.03) (0.04) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
===================================================================================================================================
TOTAL RETURN(2) 2.75% 3.20% 3.19% 3.63% 1.27%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $363,050 $224,843 $200,989 $165,087 $161,316
Ratio to average net assets of(3):
Expenses, net of waivers and
reimbursements 0.55% 0.49% 0.45% 0.39% 0.35%
Expenses, before waivers and
reimbursements 0.91% 0.94% 0.94% 0.94% 1.07%
Net investment income, net of
waivers and reimbursements 2.68% 3.14% 3.13% 3.55% 3.78%
Net investment income, before
waivers and reimbursements 2.32% 2.69% 2.64% 3.00% 3.06%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period November 29, 1994 (commencement of operations) through March
31, 1995.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
22
- -----
<PAGE> 25
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 7.4% AUTO MANUFACTURERS - 5.7% (CONT'D.)
FORD MOTOR CREDIT LTD., CANADA
DOMESTIC CERTIFICATES OF DEPOSIT - 1.2% $24,000 5.01%, 6/7/99 $ 23,782
$40,000 Bankers Trust Co., 50,000 5.00%, 6/15/99 49,493
5.75%, 7/1/99 $ 39,996 General Motors Acceptance Corp.
20,000 Huntington National Bank, Columbus, 10,000 5.04%, 5/17/99 9,934
5.01%, 2/8/00 19,998 10,000 5.04%, 5/19/99 9,937
-------- 15,000 5.11%, 6/8/99 14,859
59,994 14,000 5.08%, 6/10/99 13,865
-------- 10,000 5.01%, 6/16/99 9,897
12,000 4.95%, 7/21/99 11,821
FOREIGN CERTIFICATES OF DEPOSIT - 6.2% 20,000 4.99%, 8/17/99 19,625
50,000 Bank of Nova Scotia, New York Branch,
5.20%, 2/25/00 49,983
25,000 Banque Nationale de Paris, Chicago Syndicated Loan Funding Trust(1)
Branch, 5.23%, 2/25/00 24,993 50,000 5.09%, 4/15/99 50,000
20,000 Banque Nationale de Paris, New York 35,000 5.19%, 4/15/99 35,000
Branch, 5.80%, 4/23/99 19,999 -------
12,500 Banque Nationale de Paris, San Francisco 277,770
Branch, 4.95%, 12/14/99 12,499 -------
21,000 Canadian Imperial Bank of Commerce,
New York Branch, 5.85%, 4/28/99 20,999 BANKS - 1.4%
50,000 Commerzbank, New York Branch, 14,000 KeyCorp, Inc.,
5.08%, 2/8/00 49,990 5.04%, 6/18/99 13,851
50,000 Royal Bank of Canada, New York Morgan (J.P.) & Co., Inc.
Branch, 5.25%, 2/28/00 49,983 10,000 4.86%, 5/20/99 9,935
Societe Generale, New York Branch 6,110 5.01%, 6/11/99 6,051
20,000 5.81%, 4/19/99 19,999 40,000 4.87%, 7/26/99 39,388
35,000 5.26%, 2/28/00 34,988 ------
19,500 Swiss Bank, 69,225
5.01%, 5/7/99 19,512 ------
-------
302,945 BEVERAGES - 2.0%
------- Coca Cola Enterprises
60,950 5.14%, 4/13/99 60,847
2,800 4.93%, 4/27/99 2,790
13,000 4.91%, 5/6/99 12,939
16,000 4.92%, 5/13/99 15,909
1,998 4.93%, 5/14/99 1,986
Total Certificates of Deposit 3,500 4.94%, 7/13/99 3,451
(cost $362,939) 362,939 ------
------- 97,922
------
COMMERCIAL PAPER - 59.2%
AGRICULTURE - 0.2% COLLATERALIZED LOAN OBLIGATIONS - 0.7%
10,000 Cargill, Inc., 15,000 Centric Capital Corp.,
4.92%, 4/23/99 9,970 4.88%, 4/8/99 14,986
------- Triangle Funding, MBS,
20,000 5.07%, 10/15/99(1) 20,000
------
AUTO MANUFACTURERS - 5.7% 34,986
4,600 AESOP Funding Corp., ------
4.92%, 4/9/99 4,595
25,000 Chrysler Financial Corp.,
5.03%, 4/12/99 24,962 Electrical Services - 0.1%
6,224 CSW Credit, Inc.,
4.90%, 4/28/99 6,201
------
</TABLE>
See Notes to the Financial Statements.
-----
23
-----
<PAGE> 26
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ELECTRONICS & OTHER ELECTRICAL MACHINES & COMPUTER EQUIPMENT - 0.4%
COMPONENTS - 5.4% $22,000 BTR Finance, Inc.,
$ 48,000 Johnson Controls, Inc., 5.00%, 8/20/99 $ 21,580
5.20%, 4/1/99 $ 48,000 ---------
526 GE Engine Receivables 1995-1 Trust,
4.93%, 4/7/99 526 MANUFACTURING INDUSTRIES - 0.9%
General Electric Capital Corp. Hanson Finance (U.K.) PLC
100,000 5.08%, 4/1/99 100,000 7,900 4.94%, 4/14/99 7,886
40,000 5.05%, 5/11/99 39,780 38,000 4.98%, 4/16/99 37,922
74,000 5.02%, 6/16/99 73,236 ---------
--------- 45,808
261,542 ---------
---------
MULTI-SELLER CONDUITS - 7.3%
FOOD - 0.2% 25,000 Apreco, Inc.,
10,000 Diageo PLC, 4.92%, 4/27/99 24,912
4.94%, 6/15/99 10,035 23,500 Asset Securitization Cooperative,
--------- 5.17%, 4/15/99 23,454
Barton Capital Corp.
FOREIGN DEPOSITORY INSTITUTIONS - 6.0% 1,365 4.93%, 5/6/99 1,359
35,000 Bank of Scotland, 15,000 4.95%, 8/4/99 14,748
4.99%, 6/3/99 34,702 Concord Minutemen Capital Co.
50,000 Central Hispano N.A. Capital, 47,847 4.90%, 4/9/99 47,795
5.00%, 6/11/99 49,519 25,000 5.00%, 8/20/99 24,522
35,000 Credit Communal de Belgique, 75,000 Edison Asset Securitization,
4.87%, 7/21/99 34,487 5.24%, 4/12/99 74,882
20,000 Nordbanken N.A., Inc., 25,000 International Securitization Corp.,
4.97%, 9/30/99 19,510 5.14%, 4/26/99 24,913
45,000 San Paolo U.S. Financial Co., Kitty Hawk Funding Corp.
4.98%, 6/4/99 44,611 9,429 4.93%, 6/3/99 9,348
Spintab AB/Swedmortgage 37,500 4.93%, 6/8/99 37,154
28,200 5.05%, 6/8/99 27,938 10,000 Ness LLC,
60,000 5.00%, 9/16/99 58,636 4.96%, 6/24/99 9,886
22,000 Swedbank, Inc., 8,500 Pooled Account Receivables Corp.,
4.96%, 7/8/99 21,708 4.90%, 4/13/99 8,486
--------- 14,500 Silver Tower U.S. Funding,
291,111 5.15%, 5/18/99 14,405
--------- 36,668 Variable Funding Capital Corp.,
5.15%, 4/1/99 36,668
INSURANCE - 3.9% 1,421 Windmill Funding Corp.,
Aetna Service Co. 4.93%, 5/5/99 1,414
32,500 4.97%, 4/23/99 32,402 ---------
17,500 4.98%, 4/28/99 17,435 353,946
22,400 Commoloco, Inc., ---------
5.00%, 9/3/99 21,935
52,000 SAFECO Corp., NON-DEPOSITORY CREDIT INSTITUTIONS - 3.1%
5.13%, 4/13/99 51,913 35,000 Countrywide Home Loans,
SAFECO Credit Corp. 4.93%, 4/13/99 34,943
25,000 5.19%, 4/13/99 24,958 5,600 FBA Properties, Inc.,
20,000 4.89%, 4/27/99 19,930 4.99%, 4/15/99 5,589
22,500 5.13%, 5/19/99 22,349
---------
190,922
---------
</TABLE>
See Notes to the Financial Statements.
- -----
24
- -----
<PAGE> 27
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NON-DEPOSITORY CREDIT SECURITIES ARBITRAGE - 8.6% (CONT'D.)
INSTITUTIONS - 3.1% (CONT'D.) $62,500 Grayhawk Funding,
Finova Capital Corp. 4.90%, 5/26/99 $ 62,036
$ 3,000 4.95%, 4/20/99 $ 2,992 37,000 Intrepid Funding,
15,000 4.92%, 4/30/99 14,941 5.13%, 6/3/99 36,675
50,000 4.94%, 5/21/99 49,663 11,500 Intrepid Funding, Grand Cayman,
10,000 4.91%, 5/28/99 9,924 5.00%, 4/22/99 11,467
12,500 4.92%, 6/4/99 12,392 K2 USA LLC
10,000 4.98%, 7/9/99 9,856 3,800 4.89%, 4/15/99 3,793
10,000 4.98%, 7/16/99 9,865 5,000 4.99%, 7/15/99 4,929
---------- 9,500 5.02%, 9/17/99 9,282
150,165 10,000 4.99%, 10/15/99 9,734
---------- 50,000 MPF Ltd.,
4.96%, 6/28/99 49,401
NON-DEPOSITORY PERSONAL CREDIT SALTS (III) Cayman Islands Corp.
INSTITUTIONS - 6.6% 26,000 5.50%, 6/12/99 26,000
14,000 Associates Corp. of North America, 10,000 5.44%, 6/18/99 10,000
Canada, 5.28%, 4/6/99 13,990 25,000 5.32%, 7/23/99 25,000
Heller Financial Corp. ---------
20,000 4.99%, 6/24/99 19,770 418,458
24,000 5.01%, 6/28/99 23,710 ---------
Household Finance Corp., Canada
25,000 4.94%, 4/22/99 24,929 SINGLE-SELLER CONDUITS - 2.9%
10,000 4.95%, 5/26/99 9,926 Atlantis One Funding Corp.
Sigma Finance 22,692 4.94%, 6/16/99 22,458
5,000 4.90%, 5/17/99 4,969 33,500 4.97%, 8/24/99 32,843
51,100 4.91%, 5/18/99 50,776 57,000 4.97%, 8/25/99 55,874
37,750 4.90%, 8/4/99 37,123 30,138 CPI Funding,
10,500 4.92%, 8/6/99 10,322 5.06%, 4/26/99 30,035
23,000 4.95%, 8/6/99 22,608 ---------
44,750 4.99%, 8/19/99 43,902 141,210
50,000 4.99%, 8/20/99 49,046 ---------
12,000 4.99%, 9/27/99 11,710
---------- TELEPHONE - 3.8%
322,781 10,000 Cincinnati Bell, Inc.,
---------- 4.96%, 4/5/99 9,995
GTE Corp.
SECURITIES ARBITRAGE - 8.6% 14,000 4.93%, 4/1/99 14,000
ABC Funding 45,500 4.93%, 4/8/99 44,922
22,200 4.90%, 5/4/99 22,103 5,000 4.93%, 4/9/99 4,995
5,100 4.97%, 8/11/99 5,009 25,000 4.93%, 4/19/99 24,930
21,000 4.98%, 8/16/99 20,610 21,500 4.92%, 4/20/99 21,979
22,000 4.98%, 9/22/99 21,483 16,000 4.92%, 4/23/99 15,961
5,150 5.00%, 9/22/99 5,029 20,100 4.93%, 4/27/99 20,029
37,500 Centauri Corp., 10,500 4.92%, 4/28/99 10,461
5.01%, 9/13/99 36,661 17,000 4.92%, 4/30/99 16,933
11,790 Conduit Asset Backed Security, ---------
4.96%, 6/22/99 11,658 184,205
Giro Funding Corp. ---------
35,000 4.89%, 4/5/99 34,981
12,654 4.92%, 4/28/99 12,607 Total Commercial Paper
(cost $2,887,837) 2,887,837
---------
</TABLE>
See Notes to the Financial Statements.
-----
25
-----
<PAGE> 28
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 6.8% EURODOLLAR TIME
DEPOSITS - 9.2% (CONT'D.)
$ 2,000 Abbey National PLC MTN,
5.02%, 7/27/99 $ 2,004 $112,000 Credit Suisse First Boston, Grand Cayman,
1,000 American Express Centurion Bank FRN, 5.125%, 4/1/99 $112,000
5.04%, 4/12/99 1,000 130,000 Firstar Bank, Grand Cayman,
50,000 Associates First Capital Corp. FRN, 5.19%, 4/1/99 130,000
5.00%, 4/5/99 50,000 --------
25,000 Bear Stearns Cos., Inc., FRN,
5.26%, 4/6/99 25,001 Total Eurodollar Time Deposits
10,000 Beneficial Corp. FRN, (cost $452,000) 452,000
5.07%, 6/23/99 10,001 --------
5,000 Chrysler Financial Corp.,
6.28%, 6/22/99 5,012 INSURANCE FUNDING
57,500 CIT Group, Inc. FRN, AGREEMENTS - 3.4%
4.83%, 4/1/99 57,461
25,000 Countrywide Home Loan FRN, 50,000 General American Life Insurance Co.,
4.98%, 5/4/99 24,996 5.14%, 4/23/99 50,000
General Motors Acceptance Corp. FRN 20,000 Integrity Life Insurance Co.,
12,500 4.90%, 6/11/99 12,498 5.28%, 4/7/99 20,000
2,150 5.03%, 12/9/99 2,149 50,000 Life Insurance Co. of Virginia,
40,000 Heller Financial Corp. FRN, 5.01%, 4/1/99 50,000
5.57%, 11/15/99 40,048 Transamerica Life Insurance & Annuity Co.
12,000 Household Finance Corp. FRN, 20,000 4.96%, 4/7/99 20,000
5.16%, 4/14/99 12,000 25,000 5.05%, 4/7/99 25,000
9,000 Hydro-Quebec Corp., Quebec, Canada, --------
5.76%, 4/1/99 9,000
25,000 Liberty Light U.S. Capital Medium Total Insurance Funding Agreements
Term FRN, 5.04%, 4/8/99(1) 24,987 (cost $165,000) 165,000
30,000 Penney (J.C.) & Co., Inc., --------
5.06%, 4/23/99 29,909
25,000 Transamerica Financial Corp. FRN, MUNICIPAL INVESTMENTS - 6.7%
Series E, 5.22%, 4/22/99 25,000
750 USL Capital Corp. Medium Term FRN, 3,000 1800 Harrison Foundation VRDN,
Series D, 5.14%, 4/19/99 750 Series 99-A, 5.00%, 4/7/99(1) 3,000
---------- 4,000 ADE Investments LLC VRDN, Series A
(First of America LOC), 4.92%, 4/1/99 4,000
Total Corporate Bonds 17,000 Alaska Housing Finance Corp.,
(cost $331,816) 331,816 4.96%, 6/11/99 16,836
---------- 4,900 Courtyards of Mackinaw LLC FRN, Series A
(First of America LOC), 4.88%, 4/1/99 4,900
EURODOLLAR TIME DEPOSITS - 9.2% 5,000 Elsmere, Kentucky Mubea, Inc.,
4.95%, 4/7/99 5,000
135,000 Bank Austria Aktiengesellschaft, Vienna, 13,800 Flint, Michigan, Hospital Building
5.50%, 4/1/99 135,000 Authority Revenue Refunding VRDN,
75,000 Branch Bank & Trust Co., Grand Cayman, Series A, Hurley Medical (NBD Bank LOC),
5.19%, 4/1/99 75,000 5.62%, 4/7/99 13,800
11,400 Healthcare Network Properties,
4.89%, 4/7/99 11,400
15,020 Integris Health, Inc.,
5.69%, 4/7/99 15,020
</TABLE>
See Notes to the Financial Statements.
- -----
26
- -----
<PAGE> 29
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 6.7% (CONT'D.) REPURCHASE AGREEMENT - 6.8%
$17,100 Johnson City Medical Center FRN
(MBIA Insured), 4.93%, 4/7/99 $ 17,100 $335,214 Lehman Brothers, Inc., dated 3/31/99,
3,085 KBL Capital Fund, Inc. Loan Program FRN, repurchase price $335,250 (Colld. by
Series 98-B (First of America LOC), U.S. Government Securities),
4.92%, 4/7/99(1) 3,085 5.15%, 4/1/99
30,000 Los Angeles County, California, (cost $335,214) $ 335,214
Pension Obligation Floating Rate TOCR, ----------
Series A (AMBAC Insured), 4.99%, 4/7/99 30,000 Total Investments - 99.5%
4,500 Malone College Project, (cost $4,862,339) 4,862,339
4.94%, 4/7/99 4,500
Municipal Electric Authority of Georgia Other Assets less Liabilities - 0.5% 23,759
BAN ----------
8,431 5.17%, 4/9/99 8,431 NET ASSETS - 100.0% $4,886,098
==========
1,000 4.90%, 6/24/99 1,000
12,500 New Jersey Economic Development
Authority Revenue Refunding Bonds,
Series B, MSNBC/CNBC
(Chase Manhattan Bank LOC),
5.64%, 4/1/99 12,500
18,600 Physicians Plus Medical Group VRDN,
Series 1996 (M&I Bank LOC), 5.00%, 4/1/99 18,600
5,300 Schreiber Industrial Park-North Co.,
Virginia, 4.95%, 4/7/99 5,300
9,360 Seattle, Washington, G.O. VRDN,
Series C (Credit Communal de Belgique
LOC), 4.90%, 4/7/99 9,360
9,690 Stanislaus County, California,
Pension Obligation Revenue Refunding
Bonds (MBIA Insured), 5.07%, 4/1/99 9,690
10,045 Texas State Veterans Housing Fund II G.O.
Bonds, 5.07%, 4/1/99 10,045
75,000 United Health Care Corp.,
5.65%, 12/1/99(1) 75,001
Virginia State HDA Mortgage
Revenue Bonds
9,265 4.95%, 4/1/99 9,265
12,745 5.07%, 4/1/99 12,745
23,855 4.99%, 4/7/99 23,855
3,100 Waukesha, Wisconsin, Health System, Inc.
VRDN, 5.00%, 4/7/99 3,100
--------
Total Municipal Investments
(cost $327,533) $327,533
--------
</TABLE>
(1) Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31, 1999,
the value of those securities amounted to approximately $176,073,000 or 3.6%
of net assets.
See Notes to the Financial Statements.
-----
27
-----
<PAGE> 30
SCHEDULES OF INVESTMENTS MARCH 31, 1999
U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 97.9% FREDDIE MAC - 51.6% (CONT'D.)
$15,000 4.75%, 5/20/99 $ 14,903
Fannie Mae - 24.9% 25,000 4.78%, 5/25/99 24,821
FNMA Bond, 25,000 4.76%, 6/11/99 24,765
$ 4,000 5.49%, 8/3/99 $ 3,999 10,000 4.81%, 3/2/00 9,551
---------
FNMA Discount MBS 242,281
---------
28,558 4.80%, 7/1/99 28,211
10,000 4.83%, 7/1/99 9,878 Overseas Private Investment Corp. - 3.8%
FNMA Discount Notes 18,000 Floating Rate Notes, 5.00%, 4/7/99 18,000
---------
14,000 4.91%, 4/20/99 13,964
22,000 4.88%, 4/29/99 21,917 Total U.S. Government Agencies
25,000 4.80%, 5/13/99 24,860 (cost $460,094) 460,094
---------
14,500 4.72%, 8/10/99 14,251
----------
117,080 REPURCHASE AGREEMENTS - 10.4%
----------
FEDERAL AGRICULTURE MORTGAGE CORP. - 6.4% 20,000 ABN-AMRO, dated 3/31/99, repurchase
30,285 Farmer Mac Discount Note, price $28,568 (Colld. by U.S. Government
4.80%, 4/20/99 30,208 Securities), 5.15%, 4/1/99 20,000
----------
28,564 Lehman Brothers, Inc., dated 3/31/99,
Federal Home Loan Bank - 11.2% repurchase price $20,003 (Colld. by U.S.
FHLB Bonds Government Securities), 5.07%, 4/1/99 28,564
---------
4,000 5.61%, 4/8/99 4,000
8,000 5.63%, 5/5/99 7,999 Total Repurchase Agreements
4,000 5.53%, 6/10/99 3,999 (cost $48,564) 48,564
---------
8,000 5.54%, 7/13/99 7,999
4,000 5.54%, 7/15/99 3,999 Total Investments - 108.3%
5,000 5.16%, 3/22/00 5,000 (cost $508,658) 508,658
FHLB Discount Notes
10,000 4.75%, 5/19/99 9,937 Liabilities less Other Assets - (8.3)% (38,792)
---------
10,000 4.80%, 2/1/00 9,592
----------
52,525 NET ASSETS - 100.0% $ 469,866
---------- =========
FREDDIE MAC - 51.6%
FHLMC Bond,
4,000 5.54%, 8/13/99 3,999
FHLMC Discount Notes
10,320 4.90%, 4/5/99 10,315
27,000 4.92%, 4/5/99 26,985
20,000 4.88%, 4/9/99 19,978
13,000 4.89%, 4/9/99 12,986
23,447 4.91%, 4/9/99 23,421
5,225 4.78%, 4/12/99 5,217
23,144 4.76%, 4/14/99 23,104
20,000 4.76%, 4/22/99 19,945
22,400 4.85%, 5/7/99 22,291
</TABLE>
See Notes to the Financial Statements.
- -----
28
- -----
<PAGE> 31
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
U.S. GOVERNMENT SELECT MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- --------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT AGENCIES - 100.9%
FEDERAL FARM CREDIT BANK - 5.0%
FFCB Discount Notes
$20,000 4.60%, 5/3/99 $ 19,997
925 5.60%, 5/3/99 925
---------
20,922
---------
FEDERAL HOME LOAN BANK - 95.9%
FHLB Bonds
6,000 5.61%, 4/8/99 6,000
9,000 5.63%, 5/5/99 8,999
6,000 5.53%, 6/10/99 5,998
6,000 5.54%, 7/15/99 5,999
25,000 5.16%, 3/8/00 24,991
FHLB Discount Notes
67,910 4.80%, 4/1/99 67,910
10,000 4.74%, 4/7/99 9,992
11,398 4.76%, 4/7/99 11,389
25,000 4.75%, 4/9/99 24,974
6,979 4.76%, 4/9/99 6,972
15,000 4.75%, 5/12/99 14,919
23,300 4.82%, 5/12/99 23,172
10,000 4.75%, 5/14/99 9,943
50,000 4.74%, 5/19/99 49,684
25,000 4.74%, 5/21/99 24,835
8,000 4.75%, 5/21/99 7,947
11,756 4.75%, 6/2/99 11,660
10,000 4.81%, 6/2/99 9,917
23,000 4.78%, 6/30/99 22,725
27,000 4.67%, 7/2/99 26,678
25,000 4.79%, 9/1/99 24,491
---------
399,195
---------
Total U.S. Government Agencies
(cost $420,117) 420,117
---------
Total Investments - 100.9%
(cost $420,117) 420,117
Liabilities less Other Assets - (0.9)% (3,590)
---------
NET ASSETS - 100.0% $ 416,527
=========
</TABLE>
See Notes to the Financial Statements.
-----
29
-----
<PAGE> 32
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 96.6% ARIZONA - 1.2% (CONT'D.)
$1,250 Apache County IDR VRDN (AMT),
ALABAMA - 0.6% Imperial Components, Inc. Project (Harris
$1,800 Ashland City Industrial Development Trust & Savings Bank LOC),
Board IDR VRDN (AMT), Russell Corp. 3.15%, 4/7/99 $ 1,250
Project (SunTrust Banks LOC), 7,800 Cochise County PCR VRDN Solid Waste
3.20%, 4/7/99 $ 1,800 Disposal, Series A (AMT), Arizona Electric
2,575 Columbia City Industrial Development Power Project, 2.90%, 9/1/99 7,800
Board IDR VRDN (AMT), Russell Corp. 7,980 Maricopa County PCR Refunding VRDN,
Project (SunTrust Banks LOC), Series F, Arizona Public Services Co.
3.20%, 4/7/99 2,575 (BankAmerica Corp., LOC),
2,575 Geneva County Industrial Development 3.05%, 4/1/99 7,980
Board IDR VRDN (AMT), Russell Corp. 7,000 Salt River Agricultural Project Bonds,
Project (SunTrust Banks LOC), 2.95%, 5/13/99 7,000
3.20%, 4/7/99 2,575 1,860 Tempe G.O. Bond, Series A,
700 Greenville City IDR VRDN, 5.50%, 7/1/99 1,872
--------
Allied-Signal Project (FMC Corp. Gtd.), 28,412
--------
3.10%, 4/7/99 700
3,100 McIntosh City Industrial Development ARKANSAS - 0.5%
Board Environmental Improvement Revenue 6,045 Arkansas State Development Financing
Refunding Bond, Series E (AMT), Ciba Authority Home Mortgage Revenue Bond,
Specialty Chemical Corp., Series PT-257 (AMT), 3.10%, 1/13/00 6,045
3.35%, 4/1/99 3,100 3,250 Lowell City IDR VRDN (AMT), Little Rock
2,400 Selma City IDR VRDN, Series A, Newspapers, Inc. Project (Bank of New
Meadowcraft, Inc. Project (NationsBank York LOC), 3.10%, 4/7/99 3,250
LOC), 3.15%, 4/7/99 2,400 2,050 West Memphis City IDR VRDN (AMT),
1,000 Stevenson Industrial Development Board Proform Co. LLC Project (First Bank LOC),
Environmental Improvement Revenue Bond 3.25%, 4/7/99 2,050
--------
(AMT), Mead Corp. Project (Soc Gen LOC), 11,345
--------
3.15%, 4/1/99 1,000
---------
14,150 CALIFORNIA - 0.5%
---------
California State G.O. Bond (FGIC Insured)
ALASKA - 0.6% 800 Series 5027C, 2.91%, 4/7/99 800
7,730 Alaska Housing Finance Corp., 200 Series CR-52, 2.91%, 4/7/99 200
Series PT-37, Merrill P-Floats (Banque 11,200 Irvine Ranch County Consolidated Water
Nationale de Paris LOC), 2.95%, 4/1/99 7,730 Districts 2, 102, 103, 106, 203 & 206
7,000 Valdez Marine Terminal Revenue Refunding VRDN, Series B (Morgan Guaranty Trust
VRDN, Series A, Arco Transportation Project, LOC), 3.00%, 4/1/99
2.80%, 5/14/99 7,000 11,200
--------- --------
14,730 12,200
--------- --------
ARIZONA - 1.2% COLORADO - 1.3%
2,500 Arizona School District TAN Financing 7,038 Arapahoe County Capital Improvements
Program COP, Series B, TOB, Series E BTP-255, Project E-470,
4.20%, 7/30/99 2,510 3.20%, 4/7/99 7,038
4,000 Colorado HFA VRDN (AMT), Metal Sales
Manufacturing Corp. Project (Firstar Bank
LOC), 3.20%, 4/7/99 4,000
</TABLE>
See Notes to the Financial Statements.
- -----
30
- -----
<PAGE> 33
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COLORADO - 1.3% (CONT'D.) FLORIDA - 3.3% (CONT'D.)
$ 9,900 Colorado HFA SFM VRDN, Series C-1 $ 6,595 Florida State Board of Education Capital
(AMT), 3.16%, 4/7/99 $ 9,900 Outlay TOB VRDN, Series B, BTP-233,
8,555 Colorado Student Obligation Bond 3.25%, 4/7/99 $ 6,595
Authority, Series A, 3.15%, 4/7/99 8,555 16,900 Florida State Board of Education VRDN,
2,000 Pitkin County IDR, Series B (AMT), Series 1993E, Eagle Trust, 3.11%, 4/7/99 16,900
Aspen Skiing Project (Bank One LOC), 4,400 Florida State Housing Financing Agency,
3.25%, 4/1/99 2,000 Series 2 (AMT) (MBIA Insured),
--------
31,493 3.15%, 4/7/99 4,400
--------
DELAWARE - 0.2% 7,145 Hillsborough County School Board COP,
3,200 Delaware State Economic Development Weekly Option Period, Series 4,
Authority IDR VRDN, Series 1998 (AMT), 3.21%, 4/7/99 7,145
C&C Family L.P. (PNC Bank LOC), 4,800 Jacksonville PCR Refunding Bonds,
3.25%, 4/7/99 3,200 Series 19, Florida Power & Light Project,
1,325 Delaware State Economic Development 2.95%, 6/10/99 4,800
Authority PCR VRDN, Allied-Signal Corp. 2,000 Ocean Highway & Port Authority Revenue
Project (FMC Gtd.), 3.10%, 4/7/99 1,325 Bonds (AMT) (ABN-AMRO LOC),
--------
4,525 2.95%, 4/7/99 2,000
--------
4,480 Orange County HFA, Series 1987-A,
DISTRICT OF COLUMBIA - 2.1% Citicorp Eagle Trust, 3.11%, 4/7/99 4,480
District of Columbia Metropolitan Airport 5,010 Sunshine State Government Financing
Authority Revenue TOB Authority Revenue Notes, Series A,
6,675 Series BTP-311 (AMT), Government Finance Program,
3.20%, 4/7/99 6,675 3.20%, 6/11/99 5,010
6,745 Series BTP-312 (AMT), 16,990 Sunshine State Government Financing
3.20%, 4/7/99 6,745 Commission Revenue VRDN
29,500 District of Columbia Metropolitan Airport (AMBAC Insured), 2.80%, 6/11/99 16,990
--------
Authority, Passenger Facility Flexible 78,445
--------
Term Note (AMT) (NationsBank LOC),
2.80%, 5/14/99 29,500 GEORGIA - 3.1%
6,000 District of Columbia Revenue Bonds, 8,400 Atlanta City Metropolitan Rapid Transit
Lowell School, Inc. Project (First Union Authority Sales Tax Revenue VRDN, Series A,
National Bank LOC), 3.10%, 4/7/99 6,000 Municipal Trust Certificates, Class A
--------
48,920 (MBIA Insured), 3.21%, 4/7/99 8,400
--------
3,600 Bartow County Development Authority
FLORIDA - 3.3% PCR Bonds, Series 2 (AMT), Georgia Power
4,000 ABN-AMRO MuniTops (ABN-AMRO LOC), Co. Bowen Project, 3.35%, 4/1/99 3,600
Florida Board of Education Capital Outlay 8,600 Burke County Development Authority
Revenue Bonds, 3.14%, 4/7/99 4,000 PCR (AMT), Georgia Power Co. Vogtle
2,000 Dade County IDA Revenue VRDN (AMT), Project, 3.15%, 4/1/99 8,600
Fine Art Lamps Project, (SunTrust 3,000 Clayton County Housing Authority
Banks LOC), 2.85%, 4/7/99 2,000 Revenue VRDN (AMT), Williamsburg South
4,125 Duval County HFA Mortgage Revenue Apartments Project (PNC Bank LOC),
VRDN, Series 3A (AMT), Clipper Trust 3.20%, 4/7/99 3,000
Certificate, 3.21%, 4/7/99 4,125 5,300 Clayton County IDR VRDN (AMT),
Blue Circle Aggregates, Inc. Project
(Denmark Danske Bank LOC),
3.10%, 4/7/99 5,300
</TABLE>
See Notes to the Financial Statements.
-----
31
-----
<PAGE> 34
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (Continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Georgia - 3.1% (CONT'D.) ILLINOIS - 10.9%
$ 5,200 DeKalb County Housing Authority $ 3,500 Arlington Heights IDR VRDN, Series 1997
Revenue VRDN, Series 1995 (AMT), Cedar (AMT), 3E Graphics and Printing Project
Creek Apartment Project (General Electric (Harris Trust & Savings Bank LOC),
Capital Corp. LOC), 3.20%, 4/7/99 $ 5,200 3.15%, 4/7/99 $ 3,500
4,600 Fulton County Development Authority 9,580 Aurora City Rental Housing Revenue Bonds,
IDR (AMT), Geiger International, Inc. Series PA-328, Fox Valley Project (Merrill
Project (NationsBank LOC), Lynch Gtd.), 3.12%, 4/7/99 9,580
3.10%, 4/7/99 4,600 7,000 Bolingbrook Multi-Family Housing
10,000 Fulton County G.O. Bonds, Series 9, Redevelopment Revenue Refunding VRDN,
Citicorp Eagle Trust, 3.10%, 8/2/99 10,000 Amberton, Series A (LaSalle National Bank
Georgia HFA Conventional Mortgage TOB, LOC), 3.10%, 4/7/99 7,000
Mortgage License (AMT) (FHA Insured) 14,000 Chicago City G.O. Bonds,
2,260 Series C, 3.20%, 6/1/99 2,260 Citicorp Eagle Trust (FSA Insured),
1,115 Series D, 3.20%, 6/1/99 1,115 2.85%, 10/28/99 14,000
6,745 Georgia State G.O. Tender Option COP, 2,655 Chicago City IDR, Series B (AMT),
Series BPT-210, 3.20%, 4/7/99 6,745 Guernsey Bel, Inc. Project (LaSalle National
1,800 Gwinett County IDR, Series 1998 (AMT), Bank LOC), 3.15%, 4/7/99 2,655
Network Publications, Inc. (NationsBank 9,495 Chicago City Public Building Commission,
LOC), 3.10%, 4/7/99 1,800 Series A PA-155, P-Floats (MBIA Insured),
4,150 Henry County Development Authority 3.10%, 10/21/99 9,495
Revenue Bonds, Series 1997 (AMT), Atlas 3,885 Chicago City Sales TRB, Weekly Option
Roofing Corp. Project (SunTrust Banks Period, Series PCR-8, 3.16%, 4/7/99 3,885
LOC), 3.20%, 4/7/99 4,150 10,000 Chicago City VRDN Certificates, Series M,
1,750 Richmond County Board of Education 3.70%, 8/4/99 10,000
G.O. Bond (State Aid Withholding), Chicago Midway Airport Revenue VRDN,
4.00%, 9/1/99 1,754 Second Lien (AMT) (MBIA Insured)
5,000 Savannah City Economic Development 9,300 Series A, 3.20%, 4/1/99 9,300
Authority Revenue VRDN, Series 1997 13,300 Series B, 3.20%, 4/1/99 13,300
(AMT), Kaolin Terminals Project 5,500 Chicago Midway Airport Revenue VRDN,
(NationsBank LOC), 3.10%, 4/7/99 5,000 Series 1995 (AMT), American Trans Air, Inc.
2,000 Whitfield County IDA Revenue VRDN, Project (NBD Bank LOC), 3.15%, 4/7/99 5,500
Series 1998 (AMT), H&S Whitting, Inc. 2,400 Chicago O'Hare International Airport
Project (NationsBank LOC), Revenue VRDN, Series A (AMT)
3.10%, 4/7/99 2,000 (Bayerische Landesbank LOC),
---------
73,524 3.10%, 4/7/99 2,400
---------
4,150 Crestwood IDR Bond, GMG Warehouse LLC
HAWAII - 0.6% Project (LaSalle National Bank LOC),
5,000 Hawaii State Department of Budget & 3.09%, 4/7/99 4,150
Finance, Series A (AMT), Hawaiian Electric 1,730 Des Plaines City IDR VRDN, Series 1996
Co. Project (MBIA Insured), (AMT), Finzer Roller, Inc. Project (Harris
3.12%, 4/7/99 5,000 Trust & Savings Bank LOC),
9,965 Hawaii State HFA SFM P-Floats, 3.15%, 4/7/99 1,730
Series PT-1049, 3.12%, 4/7/99 9,965 12,400 Dupage County Water Commission Water
---------
14,965 Revenue Bonds, Citicorp Eagle Trust,
---------
3.11%, 4/7/99 12,400
</TABLE>
See Notes to the Financial Statements.
- -----
32
- -----
<PAGE> 35
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ILLINOIS - 10.9% (CONT'D.) ILLINOIS - 10.9% (CONT'D.)
$3,550 Frankfort City IDR, Series 1996 (AMT), $ 5,000 Illinois Educational Facilities Authority
Bimba Manufacturing Co. Project (Harris VRDN, University of Chicago,
Trust & Savings Bank LOC), 3.11%, 4/7/99 $ 5,000
3.15%, 4/7/99 $3,550 5,480 Illinois Housing Development Authority
4,625 Fulton County IDR VRDN, Series 1998 VRDN, Subseries A-2 (AMT), Homeowner
(AMT), Drives, Inc. Project (Harris Trust Mortgage, 3.10%, 1/20/00 5,480
& Savings Bank LOC), 3.15%, 4/7/99 4,625 3,000 Illinois State Unlimited G.O. Bond,
650 Illinois Development Financing Authority 5.60%, 6/1/99 3,010
Economic Development Revenue VRDN, 15,875 Illinois State ROC, Series 39,
D.E. Akin Seed Project (Bank One LOC), 3.16%, 4/7/99 15,875
3.20%, 4/7/99 650 7,500 Ladd Village IDR VRDN, Series 1996 (AMT),
2,460 Illinois Development Financing Authority O'Neal Metals, Inc. Project (NationsBank
IDR VRDN (AMT), Bimba Manufacturing LOC), 3.15%, 4/7/99 7,500
Co. Project (Harris Trust & Savings Bank 19,806 Metropolitan Pier & Exposition Authority
LOC), 3.15%, 4/7/99 2,460 Dedicated State Tax Revenue TOC,
4,100 Illinois Development Financing Authority Series BTP-230-A, 3.20%, 4/7/99 19,806
VRDN, Series 1997 (AMT), Ciccone Food 3,560 Metropolitan Pier & Exposition Authority
Products Project (Harris Trust & Savings VRDN, Series 1996 A, McCormick Place
Bank LOC), 3.15%, 4/7/99 4,100 Project (AMBAC Insured), 3.10%, 4/7/99 3,560
2,265 Illinois Development Financing Authority 1,575 Naperville G.O. Bonds, Series A,
IDR VRDN, Series A (AMT), Randall 4.00%, 12/1/99 1,584
Metals Corp. Project (LaSalle National 2,950 Niles Village IDR VRDN, Series 1996 (AMT),
Bank LOC), 3.30%, 4/7/99 2,265 Lewis Spring & Manufacturing Co. Project
4,600 Illinois Development Financing Authority IDR (Harris Trust & Savings Bank LOC),
VRDN (AMT), Touhy LP Project 3.15%, 4/7/99 2,950
(LaSalle National Bank LOC), 7,900 Palos Hills Multifamily Housing VRDN,
3.09%, 4/7/99 4,600 Series 1998 (AMT), Green Oaks Project
5,950 Illinois Development Financing Authority (LaSalle National Bank LOC),
Revenue VRDN, Enterprise Office Project 3.09%, 4/7/99 7,900
(Mid America Federal Savings LOC), 2,700 Rockford City IDR, Series 1998 (AMT),
3.15%, 6/1/99 5,950 Ring Can Corp. Project (SunTrust Banks
5,500 Illinois Development Financing Authority LOC), 3.20%, 4/7/99 2,700
Revenue VRDN (AMT), Flying Food Fare, 2,250 Romeoville City IDR, Series 1997 (AMT),
Inc. Project (BankAmerica Corp. LOC), Metropolitan Industries, Inc. Project
3.15%, 4/7/99 5,500 (Harris Trust & Savings Bank LOC),
4,160 Illinois Development Financing Authority 3.15%, 4/7/99 2,250
Revenue VRDN (AMT), Olive Can Co. 6,000 Savanna City IDR VRDN, Series 1994
Project (LaSalle National Bank LOC), (AMT), Metform Corp. Project
3.09%, 4/7/99 4,160 (Bank One LOC),
4,800 Illinois Educational Facilities Authority 3.05%, 4/7/99 6,000
VRDN, National College of Education 5,800 St. Clair County IDR VRDN (AMT), Stellar
(Harris Trust & Savings Bank LOC), Manufacturing Project (NationsBank LOC),
3.05%, 4/7/99 4,800 3.15%, 4/7/99 5,800
</TABLE>
See Notes to the Financial Statements.
-----
33
-----
<PAGE> 36
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ILLINOIS - 10.9% (CONT'D.) IOWA - 1.5% (CONT'D.)
$ 9,100 Will County Multi-Family Housing $10,100 Iowa Financing Authority Waste Disposal
Redevelopment Revenue Bonds, Woodlands Revenue VRDN, Series 1998 A (AMT),
Crest Hill (LaSalle National Bank LOC), Cedar River Paper Co. Project (Union
3.09%, 4/7/99 $ 9,100 Bank of Switzerland LOC),
9,000 Will County Solid Waste Disposal Revenue 3.35%, 4/1/99 $10,100
Bond (AMT), BASF Corp. Project, -------
3.35%, 4/1/99 9,000 34,770
-------- -------
259,070
-------- KANSAS - 1.4%
8,500 Douglas County G.O. Temporary Notes,
INDIANA - 1.4% Series 3, 3.75%, 8/1/99 8,501
2,790 Anderson City Economic Development 6,975 Kansas City Leavenworth & Lenexa
VRDN, Series 1996 (AMT), Gateway Village Mortgage Revenue FRN, Series A-31,
Project (FHLB LOC), 3.15%, 4/7/99 2,790 3.15%, 4/7/99 6,975
1,500 Greencastle City IDR VRDN, Series 1996 1,000 Olathe IDR VRDN Bond, Series A (AMT),
(AMT), Crown Equipment Corp. Project Diamant Boart, Inc. Project (Deutsche
(Mellon Bank LOC), 3.25%, 4/7/99 1,500 Bank A.G. LOC), 3.15%, 4/7/99 1,000
2,840 Hammond City Economic Development 14,735 Wichita G.O. Temporary Notes, Series 198,
VRDN, Series 1996 A (AMT), Annex at 3.50%, 8/26/99 14,761
Douglas Point Project (FHLB LOC), 1,980 Wichita Water & Sewer Utilities Revenue
3.15%, 4/7/99 2,840 Bonds, 6.50%, 10/1/99 2,016
Indiana Development Financing Authority -------
IDR VRDN (AMT), Red Gold, Inc. Project 33,253
(Harris Trust & Savings Bank LOC) -------
4,600 Series 1994 A, 3.15%, 4/7/99 4,600
2,900 Series 1994 B, 3.15%, 4/7/99 2,900 KENTUCKY - 2.3%
17,000 Indiana Transportation Authority Highway 5,701 Carroll County Solid Waste Disposal
Revenue Bonds, Citicorp Eagle Trust, Revenue VRDN (AMT), North American
3.10%, 8/2/99 17,000 Stainless Project (Banco Bilbao Vizcaya
2,000 Jasper County PCR, Series 1988-D, LOC), 3.55%, 4/7/99 5,701
Northern Indiana Public Service Project, 3,030 Clark County Industrial Building IDR
2.95%, 6/9/99 2,000 VRDN, Series 1996 (AMT), Bluegrass Art
-------- Cast Project (Bank One LOC),
33,630 3.20%, 4/7/99 3,030
-------- Daviess County Waste Disposal Facilities
IDR VRDN (AMT), Scott Paper Co.
IOWA - 1.5% Project (Kimberly-Clark Corp. Gtd.)
7,580 Cedar Rapids City G.O. Unlimited Bond, 9,400 Series 1993 A, 3.15%, 4/1/99 9,400
PA-251, 3.07%, 4/7/99 7,580 5,500 Series 1994 A, 3.15%, 4/1/99 5,500
12,590 Iowa Financing Authority SFM Program 8,535 Kentucky Economic Development Financing
Bonds, Series B (AMT) (GNMA/FNMA Authority Hospital Facilities Revenue VRDN,
Insured), 2.96%, 2/23/00 12,590 Series B, Baptist Healthcare,
4,500 Iowa Financing Authority Waste Disposal 3.05%, 4/7/99 8,535
Revenue VRDN, Series 1997 A (AMT), 6,000 Kentucky Housing Corp., Housing Revenue
Cedar River Paper Co. Project (Bank of Bonds, Series C (AMT), 3.20%, 12/31/99 6,000
Nova Scotia LOC), 3.35%, 4/1/99 4,500 17,000 Louisville & Jefferson Counties VRDN,
Series A-1 (AMT), Regional Airport
Authority System (National City Bank of
Louisville LOC), 3.20%, 4/7/99 17,000
-------
55,166
-------
</TABLE>
See Notes to the Financial Statements.
- -----
34
- -----
<PAGE> 37
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LOUISIANA - 1.0% MASSACHUSETTS - 2.1%
$9,000 Ascension Parish County Revenue VRDN $ 9,000 Gloucester G.O. BAN,
(AMT), BASF Corp. Project (BASF Corp. 3.61%, 8/5/99 $ 9,010
Gtd.), 3.35%, 4/1/99 $ 9,000 5,000 Massachusetts Bay Transportation
4,600 Jefferson Parish Industrial Development Authority Revenue Bond, Series A,
Board IDR (AMT), Sara Lee Corp. Project, 7.00%, 3/1/00 5,183
3.20%, 4/1/99 4,600 22,920 Massachusetts Bay Transportation
6,900 Louisiana State G.O. Bonds, Series 1994 A, Authority Revenue Floating Rate
Citicorp Eagle Trust, 3.11%, 4/7/99 6,900 Certificates, Series 30 (BankAmerica Corp.
4,000 South Louisiana Port Commission Revenue LOC), 3.08%, 4/7/99 22,920
VRDN, Series 1997 (AMT), Holnam, Inc. 1,655 Massachusetts State HFA VRDN, Series
Project (ANB-AMRO LOC), 1996-5A (AMT), Clipper Trust Certificate
3.10%, 4/7/99 4,000 (AMBAC Insured), 3.21%, 4/7/99 1,655
------- 2,200 Massachusetts State HFA VRDN, Series
24,500 PA-132 (AMT), Harbor Point Project
------- (AMBAC Insured), 3.05%, 4/7/99 2,200
10,000 Massachusetts State Water Resource
MAINE - 0.8% Authority TOC, Series BTP-297,
2,000 Fort Fairfield County Revenue Bond (AMT), 3.20%, 4/7/99 10,000
Atlantic Custom Processors (PNC Bank -------
LOC), 3.25%, 4/7/99 2,000 50,968
5,000 Maine Public Utilities Financing Bank -------
Revenue VRDN, Series 1996 (AMT), Maine
Public Service Co. Project (Bank of New MICHIGAN - 4.5%
York LOC), 3.10%, 4/7/99 5,000 20,000 Detroit City School District State School
1,960 Maine State G.O. Bond, 5.00%, 6/15/99 1,969 Aid Notes, 4.50%, 7/1/99 20,041
9,995 Maine State Housing Authority Variable 12,495 Michigan State Building Development
Rate COP, Series B, 3.21%, 4/7/99 9,995 Authority Revenue COP, Series 81,
------- Floating Rate Trust Certificates,
18,964 3.08%, 4/7/99 12,495
------- 16,000 Michigan State HDA, Series B (AMT),
3.00%, 12/1/99 16,000
MARYLAND - 0.5% 11,535 Michigan State HDA TOC, Series BTP-197,
2,100 Baltimore City Economic Development 3.30%, 4/7/99 11,535
VRDN, Series 1985, Mt. Washington 20,700 Michigan State Trunk Line Revenue FRN,
Pediatric Hospital, Inc. (Mellon Bank LOC), Series 21, 3.08%, 4/7/99 20,700
3.35%, 4/7/99 2,100 9,000 Michigan Strategic Fund Limited
3,280 Cecil County Economic Development Obligation Revenue VRDN (AMT),
VRDN (AMT), Steel Techs, Inc. Facilities Dow Chemical Co. Project, 3.20%, 4/1/99 9,000
(PNC Bank LOC), 3.25%, 4/7/99 3,280 5,170 Michigan Strategic Fund Limited
9 Maryland State Community Development Obligation Revenue VRDN (AMT), GT
Administration Bonds, Series PT-12, Merrill USA LLC Project (Comerica Bank LOC),
P-Floats (Commerzbank A.G. LOC), 3.20%, 4/7/99 5,170
3.01%, 4/1/99 9 2,160 Michigan Strategic Fund Limited Obligation
2,800 Maryland State Economic Development VRDN (AMT), Kruger Commodities, Inc.
Corp. VRDN (AMT), Unsite Design, Inc. Project (Harris Trust & Savings Bank LOC),
(Mellon Bank LOC), 3.45%, 4/7/99 2,800 3.15%, 4/7/99 2,160
3,000 Maryland State IDA VRDN, Townsend
Culinary, Inc. Project (SunTrust Banks
LOC), 3.20%, 4/7/99 3,000
-------
11,189
-------
</TABLE>
See Notes to the Financial Statements.
-----
35
-----
<PAGE> 38
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MICHIGAN - 4.5% (CONT'D.) MISSOURI - 1.9% (CONT'D.)
$ 3,000 Michigan Strategic Fund Limited $ 1,600 Missouri Higher Education Loan Authority
Obligation Revenue VRDN, Dirksen Screw VRDN, Series B (AMT) (MBIA Insured),
Products Co. Project, 3.20%, 4/7/99 $ 3,000 3.15%, 4/7/99 $ 1,600
100 Michigan Strategic Fund Limited 8,500 Missouri Higher Education Loan Authority
Obligation Revenue VRDN, Reserve 1 VRDN, Series B (National Westminister
(Barclays Bank PLC LOC), 3.30%, 4/1/99 100 LOC), 3.10%, 4/7/99 8,500
6,500 Oakland County Economic Development 5,220 Missouri Housing Development VRDN,
Corp. Limited Obligation Revenue VRDN, Series A (AMT), Merrill P-Floats PA-116,
Richard & Tool Die Corp. Project, 3.23%, 4/7/99 5,220
3.20%, 4/7/99 6,500 8,000 St. Louis County IDA Multifamily Housing
-------- Revenue VRDN (AMT), Whispering Lakes
106,701 Apartment Project (Mercantile Bank of St.
-------- Louis LOC), 3.15%, 4/7/99 8,000
6,500 St. Louis General Fund TRAN,
MINNESOTA - 1.7% 4.50%, 6/30/99 6,513
8,100 Minnesota State HFA SFM Revenue Bonds, -------
Series 1998 F (AMT), 3.70%, 8/9/99 8,100 44,212
3,060 Stearns County Housing & Redevelopment -------
Authority VRDN (AMT), Cold Spring
Granite Co. Project (First Bank LOC), MONTANA - 0.3%
3.35%, 4/7/99 3,060 Montana State Board of Housing
29,500 University of Minnesota Revenue Bond, P-Floats
Series A, 3.00%, 4/7/99 29,500 3,460 Series PA-158, 3.12%, 4/7/99 3,460
-------- 2,880 Series PT-87, 3.12%, 4/7/99 2,880
40,660 -------
-------- 6,340
-------
MISSISSIPPI - 0.8%
4,300 Jackson County PCR VRDN, Chevron NEBRASKA - 0.1%
U.S.A., Inc. Project, 3.10%, 4/1/99 4,300 1,800 Nebraska Investment Financing Authority
9,325 Mississippi State G.O. Refunding SFM Revenue FRN, Series A3,
Bonds, Series BTP-207, 3.20%, 4/7/99 9,325 3.15%, 4/7/99 1,800
3,250 Mississippi State SFM Revenue Bonds, -------
Series G-CL5 (AMT), P-Floats PT-146,
3.12%, 4/7/99 3,250 NEVADA - 0.8%
2,900 Perry County PCR, Leaf River Forest 10,000 Clark County G.O. Bond, Series SGB 18,
Project (Wachovia Bank LOC), Municipal Securities Trust Receipts
3.15%, 4/1/99 2,900 (FSA Insured), 3.16%, 4/7/99 10,000
-------- 1,710 Clark County Public Safety G.O. Bonds,
19,775 4.00%, 2/1/00 1,723
-------- 6,830 Clark County School District G.O. VRDN,
Series A, Municipal Trust Certificates
MISSOURI - 1.9% No. 23, 3.21%, 4/7/99 6,830
2,000 Missouri State Development Financing -------
Board Infrastructure Facilities IDR Bond, 18,553
Series A, Science City Union Station -------
(Canadian Imperial Bank of Commerce
LOC), 4.10%, 12/1/99 2,013 NEW JERSEY - 0.4%
12,366 Missouri State Environmental Improvement 10,000 Jersey City G.O. Refunding Notes,
& Energy Revenue Refunding VRDN, K C 3.625%, 1/14/00 10,032
Power & Light Co. Project (Union Bank of -------
Switzerland LOC), 3.05%, 6/8/99 12,366
</TABLE>
See Notes to the Financial Statements.
- -----
36
- -----
<PAGE> 39
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NEW MEXICO - 0.2% NORTH CAROLINA - 2.8%
$ 5,140 New Mexico Mortgage Financing Authority $ 2,400 Brunswick County IDA PCR VRDN, Series
P-Floats, Series PT-196, 1996 (AMT), Armada Project (NationsBank
3.75%, 5/13/99 $ 5,140 LOC), 3.10%, 4/7/99 $ 2,400
------- 5,800 Capital Regional Airport Commission
Passenger Facilities Charge Revenue VRDN
NEW YORK - 3.8% (AMT) (First Union National Bank of
5,400 Long Island Power Authority Electric Charlotte LOC), 3.10%, 4/7/99 5,800
System Revenue VRDN, Series 5, 7,300 Catawba County IDA PCR VRDN,
3.15%, 4/1/99 5,400 Series 1996 (AMT), Hooker Furniture Corp.
3,000 Nassau County G.O. RAN, Project (NationsBank LOC), 3.10%, 4/7/99 7,300
Series C, 4.00%, 4/13/99 3,001 3,000 Columbus County Industrial Facilities &
8,900 Nassau County TAN, Series C, Financing Authority PCR VRDN (AMT),
3.50%, 12/22/99 8,928 Conflandey, Inc. Project (Banque
4,400 New York City G.O. VRDN, Series B Nationale de Paris LOC), 3.15%, 4/7/99 3,000
(FGIC Insured), 3.40%, 4/1/99 4,400 2,400 Mecklenburg County Industrial Facilities &
6,000 New York City Municipal Water Finance Financing Authority PCR VRDN (AMT),
Authority Water & Sewer System Revenue SteriGenics International Project (Comerica
Bonds, Series G (FGIC Insured), Bank LOC), 3.20%, 4/7/99 2,400
3.10%, 4/1/99 6,000 1,030 North Carolina HFA SFM Tender Option
12,000 New York City RAN, Series A-78, Revenue Bond (FHA Insured),
2.90%, 4/13/99 12,000 2.95%, 9/1/99 1,030
10,085 New York City Transitional Financing 8,000 North Carolina Medical Care Community
Authority Revenue Floating Rate Hospital Revenue Bond, Pooled
Certificates, Series 27 (BankAmerica Corp. Equipment Financing Project
LOC), 3.08%, 4/7/99 10,085 (MBIA Insured), 2.95%, 4/7/99 8,000
New York State Dormitory Authority, 20,000 North Carolina State P-Floats,
Series A, Rockefeller University, Citicorp Series PA-260, 3.07%, 4/7/99 20,000
Eagle Trust 3,600 North Carolina State Ports Authority
6,100 No. 973201, 3.11%, 4/7/99 6,100 VRDN, Series 1996 (AMT), Morehead City
5,000 No. 973202, 3.11%, 4/7/99 5,000 Terminals, Inc. (NationsBank LOC),
2,725 New York State Environmental Facilities 3.10%, 4/7/99 3,600
Corp. PCR VRDN, Eagle Trust No. 94302, 7,385 North Carolina State ROC, Series 48,
Weekly Option (FSA Insured), 3.16%, 4/7/99 7,385
3.40%, 4/1/99 2,725 3,100 Persons County Industrial Facilities &
10,850 New York State Medical Care Facilities Pollution Control Financing Authority
Financing Agency Revenue Refunding Revenue Refunding VRDN, Series A,
Bond, Series B, St. Lukes (FHA Insured), Carolina Power & Light Co.,
7.45%, 2/15/00 11,442 3.10%, 4/7/99 3,100
9,595 New York State Urban Development Corp. 2,420 Raleigh COP, Equipment Acquisition
Revenue, Series PA-429, P-Floats, Project, 3.00%, 12/1/99 2,421
3.05%, 4/7/99 9,595 -------
6,000 Suffolk County TAN, Series I 66,436
(WestDeutsche Landesbank LOC), -------
3.50%, 8/12/99 6,011
------- OHIO - 3.9%
90,687 14,640 Cleveland Waterworks Revenue Bond,
------- Series A, Municipal Trust Certificates
No. 18, 3.21%, 4/7/99 14,640
</TABLE>
See Notes to the Financial Statements.
-----
37
-----
<PAGE> 40
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OHIO - 3.9% (CONT'D.) OREGON - 0.7% (CONT'D.)
$ 6,465 Dublin Inn Tax-Exempt Mortgage Bond $ 4,820 Multnomah County School District G.O.
Trust, Series 1987 (Huntington National Bond, Series 1996, BTP-208,
Bank LOC), 4.57%, 9/1/99 $ 6,465 3.17%, 6/8/99 $ 4,820
12,000 Ohio State Air Quality Development 3,900 Oregon State Economic Development
Authority VRDN, Series A, Ohio Edison Revenue, Series 176 (AMT), Cascade Steel
Project (Toronto-Dominion Bank LOC), Rolling Mills Project (Commerzbank A.G.
2.95%, 2/1/00 12,000 LOC), 3.05%, 4/7/99 3,900
25,000 Ohio State HFA Residential Mortgage 6,600 Oregon State Economic Development
Revenue VRDN, Series A-2 (AMT), Revenue, Series 181 (AMT), Oregon Metal
3.05%, 3/1/00 25,000 Slitters, Inc. (Key Bank N.A. LOC),
3,805 Ohio State HFA VRDN, Series 1989 A 3.15%, 4/7/99 6,600
(AMT), 3.00%, 4/7/99 3,805 -------
5,875 Ohio State Infrastructure Improvement 16,420
VRDN, Series 1994, BTP-170, 3.17%, 6/8/99 5,875 -------
8,910 Ohio State Public Facilities Commission
VRDN, Series BTP-237, Higher Education PENNSYLVANIA - 4.8%
Facilities Project (AMBAC Insured), 4,185 Allegheny County Adjustable Rate G.O.
3.20%, 4/7/99 8,910 Bond, Series C-41 (National City Bank
5,600 Ohio State Turnpike Commission Revenue LOC), 3.15%, 4/7/99 4,185
Bonds, Weekly Option Period, PCR-18, 1,520 Allegheny County Hospital Development
3.21%, 4/7/99 5,600 Bonds, Series B-3, Presbyterian University
1,900 Ohio State Water Development Authority Hospital (NBD Bank LOC), 3.15%, 4/1/99 1,520
PCR Refunding VRDN, Philip Morris Cos., 6,730 Allegheny County Hospital Development
Inc. Project, 3.20%, 4/7/99 1,900 Authority Revenue VRDN, Series A,
6,600 Student Loan Funding Corp. Presbyterian Health Center (MBIA Insured),
Revenue Refunding VRDN, Series A-1 3.15%, 4/1/99 6,730
(AMT), 3.05%, 4/7/99 6,600 3,700 Chester County IDA Bonds, Series 1997 A
2,200 Union County IDR VRDN (AMT), Union (AMT), KAC III Realty Corp. Project (PNC
Aggregates Co. Project (PNC Bank LOC), Bank LOC), 3.25%, 4/7/99 3,700
3.25%, 4/7/99 2,200 22,500 Delaware Valley Regional Finance Authority
------- VRDN, Series 1997 A, Merrill Lynch P-Floats
92,995 (Midland Bank PLC LOC), 3.15%, 6/17/99 22,500
------- 2,800 Geisinger Authority Health System Revenue
VRDN, Series B, Geisinger Health Project
OKLAHOMA - 1.0% (Morgan Guaranty Trust LOC),
6,360 Oklahoma Water Resources Board State 3.05%, 4/1/99 2,800
Loan Program Bonds, Series 1994 A 3,935 New Castle Area Hospital Authority Revenue
(Swiss Bank Corp. LOC), 3.30%, 3/9/00 6,360 Bond, Jameson Memorial Hospital
Tulsa City Airport Improvement VRDN (FSA Insured), 3.05%, 4/1/99 3,935
(AMT) (MBIA Insured) 3,500 Pennsylvania Economic Development
7,245 Series B-1, 3.16%, 4/7/99 7,245 Financing Authority IDR VRDN, Series
9,390 Series B-2, 3.16%, 4/7/99 9,390 1996 A1-8 (AMT) (PNC Bank LOC),
------- 3.25%, 4/7/99 3,500
22,995 9,250 Pennsylvania Economic Development
------- Financing Authority Revenue Bond (AMT),
Approved Solid Waste Project,
OREGON - 0.7% 3.25%, 12/15/99 9,250
1,100 Metropolitan Service District Riedel
Compost Waste Disposal VRDN (AMT)
(US Bank LOC), 3.20%, 4/7/99 1,100
</TABLE>
See Notes to the Financial Statements.
- -----
38
- -----
<PAGE> 41
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PENNSYLVANIA - 4.8% (CONT'D.) SOUTH CAROLINA - 1.0% (CONT'D.)
$ 3,050 Pennsylvania Higher Educational Assistance $ 6,630 South Carolina Public Service Authority
Agency Student Loan Revenue Bond, Revenue Promissory Notes,
Series A, 3.10%, 4/7/99 $ 3,050 2.75%, 5/13/99 $ 6,630
2,400 Pennsylvania Higher Educational Facilities -------
Authority Revenue Bond, Series A-2, 23,379
Council of Independent Colleges (Allied -------
Irish Bank PLC LOC),
3.15%, 4/1/99 2,400 SOUTH DAKOTA - 0.5%
30,200 Pennsylvania Higher Educational Facilities 8,410 South Dakota Economic Development
Authority Revenue Bond, Series C, Finance Authority VRDN, Series 1996 (AMT),
University of Pennsylvania Health Services, Hastings Filters, Inc. Project (Harris Trust &
3.20%, 4/7/99 30,200 Savings Bank LOC), 3.10%, 4/7/99 8,410
9,900 Pennsylvania Intergovernmental South Dakota Housing Development
Cooperative Authority Special Tax TOB, Authority Homeowner Mortgage VRDN
Series BTP-289, 3.20%, 4/7/99 9,900 (AMT), Merrill P-Floats
6,145 Philadelphia Airport Revenue TOB, 240 Series PA-119, 3.12%, 4/7/99 240
Series BTP-317, 3.20%, 4/7/99 6,145 4,375 Series PT-73-A, 3.07%, 4/7/99 4,375
4,000 Pittsburgh Urban Redevelopment Authority -------
Bonds, Series C (AMT), 3.20%, 12/1/99 4,000 13,025
2,025 Washington County IDA Revenue VRDN -------
(AMT), Accutrex Products, Inc. Project
(Mellon Bank LOC), 3.45%, 4/7/99 2,025 TENNESSEE - 3.7%
-------- 1,400 Dickson County IDR VRDN, Series 1996
115,840 (AMT), Tennessee Bun Co. LLC Project
-------- (PNC Bank LOC), 3.25%, 4/7/99 1,400
6,000 Jackson City Waste Facilities IDR VRDN,
SOUTH CAROLINA - 1.0% Series 1995 (AMT), Florida Steel Corp.
5,400 Cherokee County IDR VRDN, Series 1989 Project (NationsBank LOC),
(AMT), Oshkosh Truck Corp. Project 3.10%, 4/7/99 6,000
(NationsBank LOC), 3.15%, 4/7/99 5,400 5,000 Metropolitan Government Nashville &
1,000 Florence County Public Facilities Corp. Davidson Counties Health & Education
Bonds, Law Enforcement Project-Civic Facilities Board Revenue VRDN, Series A
Center (AMBAC Insured), 7.60%, 3/1/00 1,049 (AMT), Old Hickory Towers (FHLB LOC),
200 Lexington County IDA PCR VRDN, 3.25%, 4/7/99 5,000
Series A, Allied-Signal Project (Allied-Signal 2,000 Morristown City IDR VRDN, Series 1997,
Corp. Gtd.), 3.10%, 4/7/99 200 BOS Automotive Products, Inc. (Bayerische
900 Lexington County Pollution Control Vereinsbank LOC), 3.20%, 4/7/99 2,000
Facilities Revenue Bond, Series A, Allied- 23,175 Nashville & Davidson Counties Electric
Signal Project, 3.10%, 4/7/99 900 Revenue VRDN, Citicorp Eagle Trust,
5,200 South Carolina Jobs Economic 3.11%, 4/7/99 23,175
Development Authority (AMT), Greenville 4,000 Nashville & Davidson Counties
YMCA Project (NationsBank LOC), Health & Education Facilities Board
3.05%, 4/7/99 5,200 Revenue VRDN, Series 1996-A, Adventist
4,000 South Carolina Jobs Economic Health Systems-Sunbelt (SunTrust Banks
Development Authority Revenue VRDN LOC), 3.05%, 4/7/99 4,000
(AMT), Virtual Image Technology 4,590 Sevier County Public Building Authority
(NationsBank LOC), 3.15%, 4/7/99 4,000 Local Government Public Improvement
Bonds, Series E-2 (AMT), 3.10%, 4/7/99 4,590
</TABLE>
See Notes to the Financial Statements.
-----
39
-----
<PAGE> 42
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TENNESSEE - 3.7% (CONT'D.) TEXAS - 15.3% (CONT'D.)
$ 8,400 Shelby County G.O. Bond, Series 1996 B, $ 6,500 Denton County Independent School
Soc Gen Trust SGB-21 (FSA Insured), District G.O., Series B (PSF of Texas Gtd.),
3.16%, 4/7/99 $ 8,400 3.65%, 8/15/99 $ 6,500
Shelby County G.O. TOB 3,500 El Paso City Housing Financing Corp.
4,900 Series B BTP-263, 3.20%, 4/7/99 4,900 VRDN, Series 1993 (AMT), Viva Apartments
4,890 Series B BTP-216, 3.17%, 6/8/99 4,890 Project (General Electric Corp. LOC),
1,000 Shelby County Health & Educational 3.25%, 4/7/99 3,500
Housing Facilities Board Multi-family 7,850 Galveston County Housing Financing Corp.
Housing Revenue VRDN, Arbor Lake SFM Revenue Bond, Series PT 205, P-Floats
Project (PNC Bank LOC), (Bayerische Vereinsbank LOC),
3.15%, 4/7/99 1,000 3.12%, 4/7/99 7,850
8,500 Signal Mountain Health Education 5,000 Greater Texas Student Loan Corp., Series A
Revenue Refunding Bonds, Alexian Village (AMT) (SLMA LOC), 3.00%, 2/1/00 5,000
Project, 3.30%, 2/29/00 8,500 Gulf Coast Waste Disposal Authority
15,000 Tennessee State HDA Optional VRDN, Series 1994 (AMT), Amoco Oil Co.
Homeownership Program, Series 3-C, Project (BP Amoco PLC Gtd.)
3.10%, 11/18/99 15,000 1,800 3.30%, 4/1/99 1,800
------- 3,100 3.35%, 4/1/99 3,100
88,855 4,600 3.15%, 10/1/99 4,600
------- 12,000 Harris County Floating Rate Receipts,
Series SG-96, 3.07%, 4/7/99 12,000
TEXAS - 15.3% 3,400 Harris County Health Facilities
23,535 Arlington Independent School District Development Corp. Methodist Hospital
VRDN, Series 17, Reset Option Certificates Revenue VRDN, Series 1994 (Morgan
(Toronto-Dominion Bank LOC), Guaranty Trust LOC), 3.10%, 4/1/99 3,400
3.16%, 4/7/99 23,535 9,700 Harris County Health Facilities
11,400 Austin Airport System Revenue Bonds, Development Corp. Revenue Bonds,
Series A (Morgan Guaranty Trust LOC), Series 6, 3.15%, 4/7/99 9,700
3.00%, 4/7/99 11,400 11,880 Harris County Toll Road Unlimited Tax
7,425 Austin City Independent School District Subordinate Lien Revenue Bonds, CR138,
Building VRDN, Series 1996 SG-68 (PSF of 3.11%, 4/7/99 11,880
Texas Gtd.), 3.07%, 4/7/99 7,425 20,420 Harris County Toll Road Unlimited Tax
11,900 Bastrop Independent School District G.O. VRDN, Series 1994 A, Citicorp Eagle Trust
VRDN, Municipal Securities Trust Receipts, No. 954302, 3.11%, 4/7/99 20,420
Series SGB-37 (PSF of Texas Gtd.), 15,000 Harris County VRDN, Municipal Securities
3.16%, 4/7/99 11,900 Trust Receipts, Series 21, 3.25%, 4/7/99 15,000
1,200 Brazos River Authority PCR Refunding 3,425 Houston Independent School District G.O.
Bond, Series 1997-B, Texas Utilities Electric Bond, Public Property Financing
Co., 3.15%, 4/1/99 1,200 Contractual Obligation, 4.50%, 7/15/99 3,433
5,000 Calhoun County Navigation IDR VRDN 12,000 Hurst, Euless & Bedford Independent
(AMT), Formosa Plastics Corp. U.S.A. School Districts Floating Rate Receipts,
(BankAmerica Corp. LOC), 3.05%, 4/7/99 5,000 Series PT-1050, 3.07%, 4/7/99 12,000
5,935 Dallas Area Rapid Transit Sales Tax CP 6,000 Hurst, Euless & Bedford Independent
Notes, Series A, 2.80%, 6/11/99 5,935 School Districts Floating Rate Receipts,
28,995 Dallas G.O. Refunding Bonds, Morgan Series SG-98 (PSF of Texas Gtd.),
Stanley Floating Rate Certificates, Series 93, 3.07%, 4/7/99 6,000
3.08%, 4/7/99 28,995
</TABLE>
See Notes to the Financial Statements.
- -----
40
- -----
<PAGE> 43
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TEXAS - 15.3% (CONT'D.) UTAH - 0.7%
$ 7,245 Pearland City Independent School District $ 5,400 Intermountain Power Supply Revenue
G.O., Series 1997 SG-106 (PSF of Texas Bonds, Municipal Securities Trust Receipts,
Gtd.), 3.07%, 4/7/99 $ 7,245 Series SG-6, 3.07%, 4/7/99 $ 5,400
18,425 Port Arthur Navigation District Revenue 2,715 Salt Lake City PCR Bonds, Amoco
VRDN (AMT), Fina Oil & Chemical Co. Standard Oil Industry Project,
Project, 3.35%, 4/1/99 18,425 3.45%, 4/1/99 2,715
5,000 Port Arthur Navigation District Revenue 9,850 State of Utah TOC, Series BTP-303,
VRDN (AMT), BASF Corp. Project, 3.20%, 4/7/99 9,850
3.35%, 4/1/99 5,000 -------
Port of Corpus Christi Solid Waste Disposal 17,965
VRDN, Koch Refining Co. Project (AMT) -------
25,000 3.15%, 4/7/99 25,000
13,750 Series 1996, 3.15%, 4/7/99 13,750 VIRGINIA - 2.3%
1,230 Richardson City Independent School 4,000 Botetourt County IDR VRDN (AMT),
District G.O. Refunding Bonds, Valley Forge Co. Project (Harris Trust &
4.75%, 2/15/00 1,248 Savings Bank LOC), 3.15%, 4/7/99 4,000
9,000 Richardson City Independent School 9,500 Grant County Waste Disposal Revenue
District TRAN, 4.00%, 8/27/99 9,015 Bonds, Series 1996 (AMT), Virginia
4,400 Sabine River Authority PCR Bond, Electric Power Co. Project,
Series B, Texas Utilities Electric Co. 3.15%, 7/15/99 9,500
(AMBAC Insured), 3.35%, 4/1/99 4,400 3,900 Halifax County IDA VRDN, Series 1998
10,000 San Antonio City Electric & Gas System (AMT), D-Scan, Inc. Project (NationsBank
Revenue Bonds, Merrill Lynch Trust LOC), 3.10%, 4/7/99 3,900
Receipts SG-105, 3.07%, 4/7/99 10,000 12,300 Norfolk City G.O. VRDN, Citicorp Eagle
5,000 San Antonio City Electric & Gas System Trust No. 944601, 3.16%, 4/7/99 12,300
Revenue Bonds, Series A, Municipal Trust 15,615 Virginia State G.O. VRDN, Series 1994,
Certificates, No. 32, 3.21%, 4/7/99 5,000 Citicorp Eagle Trust No. 954601,
9,880 San Antonio City Electric & Gas System 3.11%, 4/7/99 15,615
Revenue Bonds, Series SG-107, Municipal 9,385 Virginia State HDA Commonwealth
Securities Trust Receipts, 3.07%, 4/7/99 9,880 Mortgage TOB, Series BTP-196,
6,600 San Antonio Independent School District 3.25%, 4/7/99 9,385
ROC, Series 30, 3.16%, 4/7/99 6,600 -------
11,210 Sherman Independent School District 54,700
G.O., Series 1985 A, SG-80 (PSF Gtd.), -------
3.07%, 4/7/99 11,210
5,000 State of Texas TRAN, WASHINGTON - 3.3%
4.50%, 8/31/99 5,033 2,850 Algona Economic Development Corp.
6,220 Texas Department of Housing and (AMT), Peter Pan Seafoods Project (Seattle
Community Affairs SFM VRDN, Series First National Bank LOC),
PA-128 (AMT), 3.23%, 4/7/99 6,220 3.05%, 4/7/99 2,850
5,200 Texas Water Development Board Revenue 5,700 Grandview City Public Corp. IDR VRDN,
Bonds, Municipal Trust Certificates No. 19, Series 1989 (AMT), Shonan USA Project
Series A, 3.21%, 4/17/99 5,200 (BankAmerica Corp. LOC),
-------- 3.05%, 4/7/99 5,700
364,799 1,200 Kent City Economic Development Corp.
-------- IDR VRDN, Associated Grocers Project
(BankAmerica Corp. LOC),
3.72%, 4/7/99 1,200
</TABLE>
See Notes to the Financial Statements.
-----
41
-----
<PAGE> 44
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
WASHINGTON - 3.3% (CONT'D.) WISCONSIN - 2.9% (CONT'D.)
$ 5,340 Seattle City Municipal Light & Power $ 4,290 Pewaukee IDR VRDN, Series 1992
Revenue TOB, Series BTP-272, (AMT), HUSCO International, Inc. Project
3.17%, 6/8/99 $ 5,340 (Bank One LOC), 3.05%, 4/7/99 $ 4,290
17,519 Washington Public Power Supply System 10,500 Racine Unified School District
Revenue Bonds, Series 1990 B, Nuclear Revenue Bond, 4.00%, 7/7/99 10,511
Project No. 2, BTP-85, 2,800 Rhinelander School District TRAN,
Prerefunded, 3.15%, 8/26/99 17,519 3.75%, 9/30/99 2,807
21,200 Washington Public Power Supply System 6,000 River Falls School District BAN,
Revenue Bonds, Series 1994, Citicorp Eagle 3.75%, 11/1/99 6,025
Trust, 3.21%, 4/7/99 21,200 6,500 Waupaca School District BAN,
3,500 Washington Public Power Supply System 3.20%, 12/1/99 6,505
Revenue Refunding Bond, Series A, 1,830 Wisconsin Health and Education Revenue
Nuclear Project No. 2, 6.20%, 7/1/99 3,524 Bond, Series 1994 A, Sinai Samaritan
4,900 Washington State Housing Finance Medical Center Project (M&I Bank LOC),
Commission Single Family Program VRDN, 3.10%, 4/7/99 1,830
Series 1A-S (AMT), 3.00%, 2/1/00 4,900 4,235 Wisconsin Health and Education Revenue
6,065 Washington State Refunding TOC, Bond, Series 1997, Froedtert Memorial
BTP-101, 3.20%, 4/7/99 6,065 Lutheran Hospital Trust (M&I Bank LOC),
9,575 Washington State TOC, Series BTP-125, 3.10%, 4/7/99 4,235
3.20%, 4/7/99 9,575 5,000 Wisconsin Housing and Economic
------- Development Authority Revenue Floating
77,873 Rate Trust Receipts, Series 1997 FR/RI-18
------- (AMT), 3.20%, 4/7/99 5,000
11,125 Wisconsin Housing and Economic
WEST VIRGINIA - 0.4% Development Authority Revenue TOB,
1,300 Brooke County IDR, Series 1997 (AMT), Home Ownership Revenue Program,
Star-Kist Foods, Inc. Project (H.J. Heinz Co. 3.10%, 9/1/99 11,125
Gtd.), 3.25%, 4/7/99 1,300 8,210 Wisconsin State G.O. Bond,
Marion County Solid Waste Disposal Series D (AMT), 3.17%, 6/8/99 8,210
Facilities Revenue VRDN (AMT), Granttown -------
Project (National Westminster Bank LOC) 68,350
2,900 Series B, 3.10%, 4/7/99 2,900 -------
2,500 Series C, 3.10%, 4/7/99 2,500
2,000 Ritchie County IDR VRDN (AMT), WYOMING - 0.4%
Simonton Building Products, Inc. Project 10,710 Wyoming Community Development
(PNC Bank LOC), 3.25%, 4/7/99 2,000 Authority SFM Bonds, Series H (AMT),
------- BTP-198, 3.30%, 4/7/99 10,710
8,700 -------
-------
MULTIPLE STATES POOLED SECURITIES - 2.5%
WISCONSIN - 2.9% 16,000 Greystone County Variable Rate Senior
2,500 Luxemburg-Casco School District BAN, Certificate Trust, Series 1998-1
3.60%, 12/15/99 2,503 (Credit Suisse First Boston LOC),
2,950 Milwaukee City Redevelopment VRDN, 3.20%, 4/7/99 16,000
Series 1996 (AMT), Starline Manufacturing, 36,020 Pooled Puttable Float Options (AMT),
Inc. (Harris Trust & Savings Bank LOC), PPT-7D (Backed by Various Housing
3.15%, 4/7/99 2,950 Agencies), 3.375%, 2/10/00 36,020
2,350 Mukwonago School District BAN,
3.75%, 11/1/99 2,359
</TABLE>
See Notes to the Financial Statements.
- -----
42
- -----
<PAGE> 45
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- ------------------------------------------------------------------
<S> <C> <C>
MULTIPLE STATES POOLED SECURITIES - 2.5% (CONT'D.)
$8,000 Pooled Puttable Float Option (AMT),
Series PT6 (Backed by Various Housing
Agencies), 3.90%, 7/8/99 $ 8,000
1,720 Pooled Puttable VRDN, Series PPT2
(Backed by Alaska HFA & South Dakota
HDA), 3.01%, 4/1/99 1,720
----------
61,740
----------
Total Municipal Investments
(cost $2,302,901) 2,302,901
----------
NUMBER
OF SHARES
(000s)
- ---------
OTHER - 0.8%
6,326 AIM Tax Free Money Market Fund 6,326
800 Dreyfus Tax-Exempt Cash
Management Fund 800
1,571 Federated Tax Free Trust Money Market
Fund No. 15 1,571
500 Federated Tax Free Trust Money Market
Fund No. 73 500
8,760 Provident Municipal Cash Fund (AMT) 8,760
916 Provident Municipal Fund 916
----------
Total Other
(cost $18,873) 18,873
----------
Total Investments - 97.4%
(cost $2,321,774) 2,321,774
Other Assets less Liabilities - 2.6% 62,256
----------
NET ASSETS - 100.0% $2,384,030
==========
</TABLE>
See Notes to the Financial Statements.
-----
43
-----
<PAGE> 46
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 98.3% CALIFORNIA - 93.3% (CONT'D.)
$ 1,000 California Pollution Control Finance
CALIFORNIA - 93.3% Authority Revenue Bond, Series 1997 A
$ 7,000 California HFA Home Mortgage Housing (AMT), ARCO Project (Atlantic Richfield
Revenue Variable Rate Certificates, Co. Gtd.), 2.80%, 4/7/99 $ 1,000
Series 1998 R (AMT) (MBIA Insured), 3,000 California Pollution Control Finance
3.50%, 8/20/99 $ 7,000 Authority Revenue Bond, Series 1997 A,
1,640 California HFA Home Mortgage Revenue Pacific Gas & Electric Co.
FRN, Merrill P-Floats PT-14, (Toronto-Dominion Bank LOC),
Series 1993-B, 2.85%, 4/7/99 1,640 3.00%, 4/1/99 3,000
1,550 California HFA Housing Revenue Bond, 7,300 California Pollution Control Finance
Series 1990 A, Sutter Health (Morgan Authority Revenue Bond, Series 1997 B
Guaranty Trust LOC), 3.00%, 4/1/99 1,550 (AMT), Air Products Manufacturing Co.
1,500 California HFA Housing Revenue FRN, (Air Products & Chemicals Corp. Gtd.),
Merrill P-Floats PT-40D (AMT), 2.90%, 4/7/99 7,300
2.90%, 4/7/99 1,500 3,600 California Pollution Control Finance
280 California HFA Housing Revenue FRN, Authority Revenue Bond, Series A (AMT),
Merrill P-Floats PT-56 (AMT), Pacific Gas & Electric Co. (Union Bank
2.90%, 4/7/99 280 of Switzerland AG LOC), 2.70%, 4/7/99 3,600
7,485 California HFA Housing Revenue FRN, 7,455 California State Department of Water
Series A-2 PT-258 (AMT), Resources and Sewer VRDN, ML/SG
2.95%, 1/13/00 7,485 Muni Trust, Series SG-5, CVP,
7,125 California HFA Housing Multifamily 2.85%, 4/7/99 7,455
Revenue FRN, Series III-D A (AMT) 2,000 California State Economic Development
(Morgan Guaranty Trust LOC), Finance Authority IDR Bond, Series 1998
2.95%, 4/7/99 7,125 (AMT), Lion Raisins Project (BankAmerica
12,000 California HFA Kaiser Permanente IDR Corp. LOC), 2.80%, 4/7/99 2,000
FRN, Morgan Stanley Muni Trust, 1,050 California State Economic Development
Series 1998-26 (FSA Insured), Finance Authority IDR VRDN, Series 1996,
2.91%, 4/7/99 12,000 Volk Enterprises, Inc. (Harris Bank Corp.
2,900 California HFA Multi-Unit Housing Gtd.), 2.75%, 4/7/99 1,050
Revenue FRN, Series 92A CR-231 1,100 California State Economic Development
(MBIA Insured), 2.95%, 5/1/99 2,900 Finance Authority, Series 1998 A,
California HFA Revenue Bonds, Catholic California Independent Systems
Healthcare West Operator Corp. (BankAmerica Corp. LOC),
2,500 Series 1995 D (MBIA Insured), 3.00%, 4/1/99 1,100
2.70%, 4/7/99 2,500 20,095 California State G.O., BankAmerica Corp.
3,300 Series 1996 D (MBIA Insured), Variable Rate Certificate, Series 1997 H
2.70%, 4/7/99 3,300 (Colld. by U.S. Government Securities),
2,400 Series 1997 B (MBIA Insured), 3.11%, 4/7/99 20,095
2.70%, 4/7/99 2,400 California State G.O., Citibank TOB
8,700 California Pollution Control Finance (FGIC Insured)
Authority PCR Bond, Series F, Pacific 1,500 Series 5027 C, 2.91%, 4/1/99 1,500
Gas & Electric Co. (Banque Nationale 6,200 Series CR-152, 2.91%, 4/1/99 6,200
de Paris LOC), 3.00%, 4/1/99 8,700 1,945 California State G.O. Refunding Bond,
East Bay Regional Park District,
2.79%, 9/1/99 1,956
</TABLE>
See Notes to the Financial Statements.
- -----
44
- -----
<PAGE> 47
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CALIFORNIA - 93.3% (CONT'D.) CALIFORNIA - 93.3% (CONT'D.)
$ 2,400 California State G.O., Series A, $ 1,625 Eastern Metropolitan Water District
2.50%, 5/20/99 $ 2,400 of California COP (Colld. by U.S.
1,200 California State G.O., Weekly Option, Government Securities),
Series CR-153, 3.75%, 4/1/99 1,200 2.71%, 11/1/99 $ 1,663
3,415 California State G.O., Weekly Put TOCR 3,000 Fontana Unified School District TRAN
(MBIA Insured), 2.95%, 4/7/99 3,415 1998-99, 3.61%, 7/9/99 3,003
4,200 California State Housing Revenue Bond, 1,100 Foothill/Eastern Transportation Corridor
Series 1996-6A, Clipper Trust Certificates Agency Toll Road Revenue Bonds,
(AMT) (Colld. by FNMA Series 1995 B (Morgan Guaranty Trust
Securities), 3.23%, 6/1/99 4,200 LOC), 2.70%, 4/7/99 1,100
700 California State PCR Bond, Series C, 4,000 Grossmont Unified High School District
Southern California Edison Project COP (FSA Insured), 4.00%, 9/1/99 4,024
(Southern California Edison Corp. Gtd.), 3,000 Irvine Ranch Consolidated Water
3.30%, 4/1/99 700 Districts 2, 102, 103 & 206 Water
2,400 California State PCR Bond, Southern and Sewer FRN, Series 1993 B
California Edison Project (Southern (Morgan Guaranty Trust LOC),
California Edison Corp. Gtd.), 3.00%, 4/1/99 3,000
Series A, 3.30%, 4/1/99 400 5,700 Irvine Ranch Consolidated Water
Series D, 3.30%, 4/1/99 2,000 Districts 105, 140, 240 & 250,
5,000 California State RAN, 3.15%, 6/30/99 5,010 Series 95 (Commerzbank A.G. LOC),
3,000 California State Various Purpose 3.00%, 4/1/99 5,700
G.O. Bonds, Merrill Floating Rate 2,500 Irvine Ranch Water District Revenue
Receipts SG-91 (FGIC Insured), Bond, Series 1985 (Landesbank Hessen
2.90%, 4/7/99 3,000 Thuringen Girozentra LOC), 3.00%,
3,500 California Statewide Community 4/1/99 2,500
Development Authority IDR Bonds, 1,650 Irvine Ranch Water District Revenue
Series 1998 A (AMT), A & B Die Bonds, Series 1985 (Landesbank Hessen
Casting Co. (BankAmerica Corp. Thuringen Girozentra LOC), 3.00%,
LOC), 2.85%, 4/7/99 3,500 4/1/99 1,650
4,600 California Statewide Community 3,200 Kern County Public Facilities Project COP,
Development Authority Multifamily Series A (Swiss Bank LOC), 2.70%, 4/7/99 3,200
Housing Revenue Bond, Series S (AMT), Limited Obligation Improvement Bond,
Concord Green Apartments (FHLB LOC), 1,800 Irvine City Assessment District 87-8
3.05%, 4/7/99 4,600 (KBC Bank of Nevada LOC),
17,100 California Statewide Community 3.00%, 4/1/99 1,800
Development Authority TRAN, Limited Obligation Improvement Bond,
Series 1998-99, 2.90%, 4/7/99 17,100 1,800 Irvine City Assessment District 97-17
2,300 Chula Vista IDR Bond, Series 1996 A, (Hypo Vereinsbank LOC), 3.00%, 4/1/99 1,800
San Diego Gas & Electric Co., Livermore Multifamily Housing Revenue
3.00%, 4/1/99 2,300 2,700 Bond, Series A (AMT), Portola Meadows
10,200 Chula Vista IDR Bond, Series 1996 B Apartments (BankAmerica Corp. LOC),
(AMT), San Diego Gas & Electric Co., 2.80%, 4/7/99 2,700
3.35%, 4/1/99 10,200 Long Beach TRAN, Series 1998-99,
17,785 Contra Costa County Home Mortgage 3,000 3.12%, 10/5/99 3,013
Revenue Variable Rates Certificates, Los Angeles City Multifamily Housing
Series 1997 C (Colld. by 1,700 Revenue Refunding Bond, Series 1995 D
U.S. Government Securities), (AMT), Coral Wood Court Project (Union
3.11%, 4/7/99 17,785 Bank of California LOC), 3.40%, 4/7/99 1,700
</TABLE>
See Notes to the Financial Statements.
-----
45
-----
<PAGE> 48
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CALIFORNIA - 93.3% (CONT'D.) CALIFORNIA - 93.3% (CONT'D.)
$ 7,246 Los Angeles City Subordinate Tax $ 1,020 Riverside County Multifamily Housing
Allocation IDR FRN, BTP-129 (Colld. by Revenue FRN, Series A, Ambergate
U.S. Government Securities), Apartments (Union Bank of California
3.15%, 4/7/99 $ 7,246 LOC), 2.95%, 4/7/99 $ 1,020
7,705 Los Angeles City Unlimited G.O. FRN, 1,800 Riverside County Public Facilities
Series A (FGIC Insured), 3.06%, 4/7/99 7,705 Project COP, Series B (National Westminster
7,575 Los Angeles Community Development PLC LOC), 2.75%, 4/7/99 1,800
VRDN, Promenade Towers (Barclays Bank 8,345 Riverside County School Finance Authority
LOC), 2.95%, 4/7/99 7,575 RAN, Series A, 2.90%, 7/30/99 8,345
1,525 Los Angeles Convention and Exhibition 2,500 Riverside County TRAN, Series 1998-99,
Center Revenue VRDN, Merrill P-Floats, 4.44%, 9/30/99 2,518
Series 1993 PA-88 (MBIA Insured), 1,500 Sacramento-Yolo Port District VRDN,
2.85%, 4/7/99 1,525 Series 1997 A (AMT), California Free Trade
Metropolitan Water District of Southern Zone Project (Wells Fargo & Co. LOC),
California CP, Series B 2.85%, 4/7/99 1,500
10,400 2.90%, 6/7/99 10,400 2,050 San Bernardino County Housing Authority
3,200 3.00%, 6/8/99 3,200 Revenue FRN, Series A, Brookside Meadows
1,000 Northwest Irvine Limited Obligation Multifamily Housing (Chase Manhattan
Improvement Bond, Irvine City Assessment Bank N.A. LOC), 2.80%, 4/7/99 2,050
District 97-16 (Soc Gen LOC), 3,000 San Francisco City and County Airport
3.00%, 4/1/99 1,000 Commission International Airport Revenue
1,500 Ontario IDA Revenue Bond, L.D. Brinkman FRN (AMT), Susquehanna Structured
& Co. Project (Union Bank of California Projects SSP-4 (AMBAC Insured),
LOC), 3.10%, 4/1/99 1,500 3.05%, 4/7/99 3,000
10,080 Orange County Apartment Development 3,175 San Francisco City and County Variable
Housing Revenue FRN, Series 1992 B, Rate Certificates, Series 1996-AA6 (FGIC
Aliso Creek Project (Wells Fargo & Co. Insured), 3.06%, 4/7/99 3,175
LOC), 3.10%, 4/7/99 10,080 7,610 San Marcos City Public Facility Authority
4,000 Orange County Apartment Development Revenue Bond, Series BTP-188, Civic
Housing Revenue FRN, Wood Canyon Villas Center Projects (Colld. by U.S.
Issue B of 1991 (BankAmerica Corp. LOC), Government Securities),
2.85%, 4/7/99 4,000 3.11%, 8/31/99 7,610
2,400 Orange County COP Consolidated Sanitation 645 Santa Clara County Housing Authority
Districts 1-3, 5-7, 11, 13 &14 Water and Multifamily VRDN, Series A (AMT),
Sewer FRN (National Westminster PLC LOC), Avenida Espana Gardens (Union Bank of
3.00%, 4/1/99 2,400 California LOC), 3.10%, 4/7/99 645
900 Orange County Limited Obligation 1,000 Tustin Limited G.O. Improvement Bond,
Improvement Bond, Irvine Coast Series A, Reassessment District 95-2
Assessment District 88-1 (Soc Gen LOC), (KBC Bank of Nevada LOC),
3.00%, 4/1/99 900 3.00%, 4/1/99 1,000
4,390 Regents of the University of California 10,000 Ventura County TRAN, Series 1998-99,
Refunding Revenue Bonds, Series C, ML/SG 2.90%, 4/7/99 10,000
Muni Trust SG-24 (AMBAC Insured), 3,000 Whittier Union High School District
2.85%, 4/7/99 4,390 TRAN, 3.55%, 6/30/99 3,005
</TABLE>
See Notes to the Financial Statements.
- -----
46
- -----
<PAGE> 49
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- --------------------------------------------------------------
CALIFORNIA - 93.3% (CONT'D.)
$2,000 Yucaipa-Calimesa Joint Unified
School District TRAN, Series
1998-99, 3.55%, 6/30/99 $ 2,002
----------
338,890
----------
PUERTO RICO - 5.0%
Government Development Bank for Puerto
Rico Tax-Exempt CP
3,400 2.65%, 5/20/99 3,400
7,000 2.85%, 5/20/99 7,000
3,000 Puerto Rico Commonwealth Highway
and Transportation Authority
Transportation Revenue Bond,
Series A (AMBAC Insured),
2.65%, 4/7/99 3,000
4,500 Puerto Rico Commonwealth TRAN,
Series 1998, 2.88%, 7/30/99 4,508
----------
17,908
----------
Total Municipal Investments
(cost $356,798) 356,798
----------
Number
of Shares
(000s)
- ---------
OTHER - 0.1%
313 Federated Tax-Exempt
Money Market Fund No. 80 313
255 Provident Institutional California
Money Fund 255
----------
Total Other
(cost $568) 568
----------
Total Investments - 98.4%
(cost $357,366) 357,366
Other Assets less
Liabilities - 1.6% 5,684
----------
NET ASSETS - 100.0% $ 363,050
==========
See Notes to the Financial Statements.
-----
47
-----
<PAGE> 50
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1999
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
FLORIDA
U.S. INTERMEDIATE INTERMEDIATE FIXED
AMOUNTS IN THOUSANDS, GOV'T. TAX-EXEMPT TAX-EXEMPT INCOME
EXCEPT PER SHARE DATA FUND FUND FUND FUND
- ------------------------------------------- ------ ------------ ------------ ------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $267,088, $327,809,
$35,881, $278,225, $231,893, $74,940,
$13,595, $10,879 and $41,908, respectively) $266,047 $335,456 $36,283 $274,191
Cash and foreign currencies 4 -- -- 56
Income receivable 2,300 4,447 628 2,832
Receivable for securities sold 278 9,973 233 --
Receivable for fund shares sold -- 594 -- 416
Receivable from Adviser 4 3 2 4
Prepaid and other assets 20 21 6 18
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 268,653 350,494 37,152 277,517
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Overdraft -- 5 -- --
Dividends payable 102 109 11 118
Payable for securities purchased -- 5,271 -- 1,698
Payable for fund shares redeemed 217 215 -- 485
Accrued investment advisory fees 33 40 4 34
Accrued administration fees 28 32 2 28
Accrued custody and accounting fees 4 5 1 4
Accrued transfer agent fees 4 6 1 4
Accrued registration fees and other liabilities 23 22 12 38
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 411 5,705 31 2,409
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $268,242 $344,789 $37,121 $275,108
===================================================================================================================================
ANALYSIS OF NET ASSETS:
Capital stock $268,480 $336,455 $36,585 $277,437
Accumulated undistributed (distributions in
excess of) net investment income 364 77 -- (112)
Accumulated undistributed net realized gains
(losses) on investments, forward foreign
currency contracts and foreign currency
transactions 439 610 134 1,817
Net unrealized appreciation (depreciation)
on investments (1,041) 7,647 402 (4,034)
Net unrealized losses on translation of assets and
liabilities denominated in foreign currencies -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $268,242 $344,789 $37,121 $275,108
===================================================================================================================================
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 26,697 33,288 3,544 27,117
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $10.05 $10.36 $10.47 $10.15
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
- -----
48
- -----
<PAGE> 51
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
INT'L. HIGH YIELD
CALIFORNIA FIXED HIGH YIELD FIXED
TAX-EXEMPT TAX-EXEMPT INCOME MUNICIPAL INCOME
FUND FUND FUND FUND FUND
---------- ---------- ------ ---------- ----------
<S> <C> <C> <C> <C>
$237,742 $76,124 $13,998 $10,868 $42,176
-- 1 54 1 1
2,700 1,049 264 84 441
5,016 -- -- -- --
65 169 -- -- 631
3 2 3 11 12
17 6 11 9 9
- ---------------------------------------------------------------------------------------------------
245,543 77,351 14,330 10,973 43,270
- ---------------------------------------------------------------------------------------------------
2,000 -- -- -- --
76 23 -- -- --
15,499 -- -- 900 2,360
64 38 26 -- --
26 9 2 1 5
20 7 1 -- 1
3 4 5 2 2
4 1 -- -- 1
28 20 11 37 37
- ---------------------------------------------------------------------------------------------------
17,720 102 45 940 2,406
- ---------------------------------------------------------------------------------------------------
$227,823 $77,249 $14,285 $10,033 $40,864
===================================================================================================
$221,158 $75,898 $13,900 $10,037 $40,537
(66) -- 14 7 59
882 167 (22) -- --
5,849 1,184 403 (11) 268
-- -- (10) -- --
- ---------------------------------------------------------------------------------------------------
$227,823 $77,249 $14,285 $10,033 $40,864
===================================================================================================
21,442 7,095 1,376 1,002 4,044
$ 10.63 $ 10.89 $ 10.38 $ 10.01 $ 10.10
- ---------------------------------------------------------------------------------------------------
</TABLE>
-----
49
-----
<PAGE> 52
STATEMENTS OF OPERATIONS YEAR ENDED MARCH 31, 1999
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
FLORIDA
U.S. INTERMEDIATE INTERMEDIATE FIXED
GOV'T. TAX-EXEMPT TAX-EXEMPT INCOME
AMOUNTS IN THOUSANDS FUND FUND FUND FUND
- -------------------- ----- ------------ ------------ ------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $14,232 $14,773 $1,323 $14,137
- -------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 1,896 2,403 212 1,753
Administration fees 379 481 42 351
Transfer agent fees 253 320 29 234
Custody and accounting fees 86 103 49 84
Registration fees 28 25 18 42
Professional fees 21 22 9 21
Amortization of organization costs 14 23 -- 11
Trustees' fees and expenses 7 8 3 7
Other 15 19 5 13
- -------------------------------------------------------------------------------------------------------------------
Total Expenses 2,699 3,404 367 2,516
Less voluntary waivers of:
Investment advisory fees -- (161) (7) --
Administration fees (207) (265) (24) (196)
Less reimbursement of expenses
by Adviser (217) (255) (87) (217)
- -------------------------------------------------------------------------------------------------------------------
Net Expenses 2,275 2,723 249 2,103
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 11,957 12,050 1,074 12,034
- -------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments 6,337 2,609 380 7,776
Foreign currency transactions -- -- -- --
Net change in unrealized appreciation
(depreciation) on investments (3,841) 370 (52) (8,977)
Net change in unrealized losses on
translation of assets and liabilities
denominated in foreign currencies -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments 2,496 2,979 328 (1,201)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $14,453 $15,029 $1,402 $10,833
===================================================================================================================
</TABLE>
(1) For the period after the close of business on December 31, 1998
(commencement of operations) through March 31, 1999.
(2) Net of $3 in non-reclaimable foreign withholding taxes.
See Notes to the Financial Statements.
- -----
50
- -----
<PAGE> 53
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
INT'L. HIGH YIELD
CALIFORNIA FIXED HIGH YIELD FIXED
TAX-EXEMPT TAX-EXEMPT INCOME MUNICIPAL INCOME
FUND FUND FUND FUND(1) FUND(1)
---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
$ 9,715 $2,731 $ 867(2) $53 $426
- ---------------------------------------------------------------------------------------------
1,463 434 134 11 42
293 87 22 2 9
195 58 15 1 6
78 51 77 14 14
30 16 10 16 17
20 18 18 32 32
15 -- 7 -- --
6 4 3 1 1
12 9 5 2 1
- ---------------------------------------------------------------------------------------------
2,112 677 291 79 122
(98) (29) -- (1) --
(165) (51) (12) (1) (6)
(192) (105) (108) (65) (66)
- ---------------------------------------------------------------------------------------------
1,657 492 171 12 50
- ---------------------------------------------------------------------------------------------
8,058 2,239 696 41 376
- ---------------------------------------------------------------------------------------------
3,000 772 39 -- --
-- -- (168) -- --
(1,001) 365 789 (11) 268
-- -- (2) -- --
- ---------------------------------------------------------------------------------------------
1,999 1,137 658 (11) 268
- ---------------------------------------------------------------------------------------------
$10,057 $3,376 $1,354 $30 $644
=============================================================================================
</TABLE>
-----
51
-----
<PAGE> 54
STATEMENTS OF CHANGES IN NET ASSETS
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
FLORIDA
INTERMEDIATE INTERMEDIATE
U.S. GOVERNMENT TAX-EXEMPT TAX-EXEMPT
FUND FUND FUND
---------------------- ---------------------- --------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1999 1998 1999 1998 1999 1998
- -------------------- ---------------------- ---------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 11,957 $ 10,683 $ 12,050 $ 10,833 $ 1,074 $ 783
Net realized gains (losses) on investments,
forward foreign currency contracts and
foreign currency transactions 6,337 1,575 2,609 1,878 380 240
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency transactions (3,841) 4,821 370 6,039 (52) 538
Net change in unrealized gains (losses) on
translation of assets and liabilities
denominated in foreign currencies -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 14,453 17,079 15,029 18,750 1,402 1,561
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 91,913 67,042 70,405 65,294 18,721 15,147
Shares from reinvestment of dividends 7,278 748 4,060 655 581 151
Shares redeemed (56,221) (26,587) (27,748) (39,967) (7,358) (5,548)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share Transactions 42,970 41,203 46,717 25,982 11,944 9,750
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (11,957) (10,684) (12,050) (10,833) (1,074) (783)
From net realized gains (6,576) (167) (3,436) -- (480) (6)
In excess of net investment income -- -- -- -- -- --
In excess of net realized gains -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (18,533) (10,851) (15,486) (10,833) (1,554) (789)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 38,890 47,431 46,260 33,899 11,792 10,522
NET ASSETS:
Beginning of year 229,352 181,921 298,529 264,630 25,329 14,807
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $268,242 $229,352 $344,789 $298,529 $37,121 $25,329
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS
IN EXCESS OF) NET INVESTMENT INCOME $ 364 $ 79 $ 77 $ 58 $ -- $ --
===================================================================================================================================
</TABLE>
(1) For the period April 8, 1997 (commencement of operations) through
March 31, 1998.
See Notes to the Financial Statements.
- -----
52
- -----
<PAGE> 55
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
INTERNATIONAL
FIXED CALIFORNIA FIXED
INCOME TAX-EXEMPT TAX-EXEMPT INCOME
FUND FUND FUND FUND
- -------------------------- ---------------------- --------------------- -----------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1999 1998 1999 1998(1) 1999 1998
- -------------------------- ---------------------- --------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 12,034 $ 8,421 $ 8,058 $ 6,535 $ 2,239 $ 761 $ 696 $ 772
7,776 465 3,000 3,166 772 16 (129) 79
(8,977) 6,956 (1,001) 4,567 365 819 789 (139)
-- -- -- -- -- -- (2) 4
- --------------------------------------------------------------------------------------------------------------------------
10,833 15,842 10,057 14,268 3,376 1,596 1,354 716
- --------------------------------------------------------------------------------------------------------------------------
226,121 80,530 110,381 39,663 49,919 43,601 2,308 2,030
7,524 1,132 4,617 1,345 1,068 125 181 233
(132,989) (29,639) (52,123) (16,734) (14,198) (4,617) (2,627) (4,701)
- --------------------------------------------------------------------------------------------------------------------------
100,656 52,023 62,875 24,274 36,789 39,109 (138) (2,438)
- --------------------------------------------------------------------------------------------------------------------------
(11,874) (8,216) (7,981) (6,458) (2,239) (761) (452) (824)
(6,312) (86) (4,271) (1,159) (620) (1) (93) (139)
(112) (90) (77) (77) -- -- -- (66)
-- -- -- -- -- -- (61) --
- --------------------------------------------------------------------------------------------------------------------------
(18,298) (8,392) (12,329) (7,694) (2,859) (762) (606) (1,029)
- --------------------------------------------------------------------------------------------------------------------------
93,191 59,473 60,603 30,848 37,306 39,943 610 (2,751)
181,917 122,444 167,220 136,372 39,943 -- 13,675 16,426
- --------------------------------------------------------------------------------------------------------------------------
$275,108 $181,917 $227,823 $167,220 $77,249 $39,943 $14,285 $13,675
- --------------------------------------------------------------------------------------------------------------------------
$ (112) $ (90) $ (66) $ (77) $ -- $ -- $ 14 $ (66)
==========================================================================================================================
</TABLE>
-----
53
-----
<PAGE> 56
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
HIGH YIELD
HIGH YIELD FIXED
MUNICIPAL INCOME
FUND FUND
---------- ----------
YEAR YEAR
ENDED ENDED
MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1999(1) 1999(1)
- ---------------------------------------- ---------- ----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 41 $ 376
Net change in unrealized appreciation
(depreciation) on investments (11) 268
- ----------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 30 644
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 10,260 40,664
Shares from reinvestment of dividends 1 65
Shares redeemed (224) (192)
- ----------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Capital Share Transactions 10,037 40,537
- ----------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (34) (317)
- ----------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 10,033 40,864
NET ASSETS:
Beginning of year -- --
- ----------------------------------------------------------------------------------------
End of year $10,033 $40,864
- ----------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 7 $ 59
========================================================================================
</TABLE>
(1) Commenced investment operations after the close of business on
December 31, 1998.
- -----
54
- -----
See Notes to the Financial Statements.
<PAGE> 57
NORTHERN FUNDS Annual Report
FINANCIAL HIGHLIGHTS
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
U.S. GOVERNMENT
FUND
--------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995
- ------------------------------------------ -------------------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 10.20 $ 9.88 $ 10.06 $ 9.84 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.50 0.54 0.51 0.51 0.50
Net realized and unrealized gains (losses)
on investments 0.10 0.32 (0.11) 0.29 (0.16)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.60 0.86 0.40 0.80 0.34
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.49) (0.53) (0.51) (0.51) (0.50)
From net realized gains (0.26) (0.01) (0.05) (0.07) --
In excess of net realized gains -- -- (0.02) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.75) (0.54) (0.58) (0.58) (0.50)
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 10.05 $ 10.20 $ 9.88 $ 10.06 $ 9.84
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) 6.01% 8.90% 3.98% 7.65% 3.49%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $268,242 $229,352 $181,921 $149,062 $116,443
Ratio to average net assets of:
Expenses, net of waivers and reimbursements 0.90% 0.90% 0.90% 0.90% 0.90%
Expenses, before waivers and reimbursements 1.07% 1.07% 1.09% 1.10% 1.12%
Net investment income, net of waivers and
reimbursements 4.73% 5.24% 5.19% 5.07% 5.20%
Net investment income, before waivers
and reimbursements 4.56% 5.07% 5.00% 4.87% 4.98%
Portfolio Turnover Rate 123.75% 47.41% 83.41% 112.00% 42.29%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return is
not annualized for periods less than one year.
See Notes to the Financial Statements.
-----
55
-----
<PAGE> 58
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
INTERMEDIATE
TAX-EXEMPT
FUND
-------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995
- ----------------------------------------- -------------------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 10.36 $ 10.07 $ 10.22 $ 10.03 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.39 0.40 0.40 0.41 0.40
Net realized and unrealized gains (losses) on
investments 0.11 0.29 (0.06) 0.26 0.03
- --------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.50 0.69 0.34 0.67 0.43
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.39) (0.40) (0.40) (0.41) (0.40)
From net realized gains (0.11) -- (0.07) (0.07) --
In excess of net investment income -- -- -- -- --
In excess of net realized gains -- -- (0.02) -- --
- --------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.50) (0.40) (0.49) (0.48) (0.40)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 10.36 $ 10.36 $ 10.07 $ 10.22 $ 10.03
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 4.88% 6.95% 3.39% 6.81% 4.38%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $344,789 $298,529 $264,630 $244,139 $221,251
Ratio to average net assets of(3):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers and reimbursements 1.06% 1.07% 1.07% 1.08% 1.09%
Net investment income, net of waivers and
reimbursements 3.76% 3.84% 3.90% 4.01% 4.09%
Net investment income, before waivers
and reimbursements 3.55% 3.62% 3.68% 3.78% 3.85%
Portfolio Turnover Rate 54.03% 61.83% 61.39% 137.85% 78.87%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period August 15, 1996 (commencement of operations) through
March 31, 1997.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
56
- -----
<PAGE> 59
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
FLORIDA
INTERMEDIATE FIXED
TAX-EXEMPT INCOME
FUND FUND
- --------------------------------------------- ----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997(1) 1999 1998 1997 1996 1995
- --------------------------------------------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10.47 $ 10.03 $ 10.00 $ 10.42 $ 9.86 $ 10.10 $ 9.78 $ 10.00
0.39 0.40 0.24 0.54 0.59 0.57 0.58 0.62
0.16 0.44 0.03 -- 0.56 (0.12) 0.50 (0.22)
- -----------------------------------------------------------------------------------------------------------------------------
0.55 0.84 0.27 0.54 1.15 0.45 1.08 0.40
- -----------------------------------------------------------------------------------------------------------------------------
(0.39) (0.40) (0.24) (0.54) (0.58) (0.56) (0.59) (0.62)
(0.16) -- -- (0.27) (0.01) (0.10) (0.17) --
-- -- -- -- -- (0.01) -- --
-- -- -- -- -- (0.02) -- --
- -----------------------------------------------------------------------------------------------------------------------------
(0.55) (0.40) (0.24) (0.81) (0.59) (0.69) (0.76) (0.62)
- -----------------------------------------------------------------------------------------------------------------------------
$ 10.47 $ 10.47 $ 10.03 $ 10.15 $ 10.42 $ 9.86 $ 10.10 $ 9.78
- -----------------------------------------------------------------------------------------------------------------------------
5.38% 8.51% 2.63% 5.18% 11.90% 4.59% 11.18% 4.16%
$37,121 $25,329 $14,807 $275,108 $181,197 $122,444 $101,339 $65,929
0.85% 0.85% 0.85% 0.90% 0.90% 0.90% 0.90% 0.90%
1.29% 1.41% 2.31% 1.08% 1.09% 1.12% 1.14% 1.18%
3.67% 3.86% 3.84% 5.15% 5.71% 5.69% 5.79% 6.48%
3.23% 3.30% 2.38% 4.97% 5.52% 5.47% 5.55% 6.20%
57.98% 46.12% 50.77% 84.85% 33.55% 87.64% 116.22% 55.27%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
57
-----
<PAGE> 60
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
TAX-EXEMPT FUND
---------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995
- ----------------------------------------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $10.73 $10.24 $10.35 $10.08 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.45 0.47 0.50 0.48 0.48
Net realized and unrealized gains (losses) on
investments, forward foreign currency
contracts and foreign currency transactions 0.13 0.57 (0.06) 0.29 0.08
- ----------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.58 1.04 0.44 0.77 0.56
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.45) (0.47) (0.47) (0.48) (0.48)
From net realized gains (0.23) (0.08) (0.05) (0.02) --
In excess of net investment income -- -- (0.03) -- --
In excess of net realized gains -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.68) (0.55) (0.55) (0.50) (0.48)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $10.63 $10.73 $10.24 $10.35 $10.08
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 5.47% 10.39% 4.32% 7.80% 5.78%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $227,823 $167,220 $136,372 $125,113 $118,690
Ratio to average net assets of(3):
Expenses, net of waivers and reimbursements 0.85% 0.85% 0.85% 0.85% 0.85%
Expenses, before waivers and reimbursements 1.08% 1.09% 1.10% 1.10% 1.11%
Net investment income, net of waivers and
reimbursements 4.13% 4.42% 4.61% 4.62% 4.95%
Net investment income, before waivers
and reimbursements 3.90% 4.18% 4.36% 4.37% 4.69%
Portfolio Turnover Rate 140.39% 74.32% 8.10% 60.50% 54.94%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 8, 1997 (commencement of operations) through
March 31, 1998.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
58
- -----
<PAGE> 61
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
CALIFORNIA INTERNATIONAL
TAX-EXEMPT FIXED INCOME
FUND FUND
- -------------------------------- --------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998(1) 1999 1998 1997 1996 1995
- -------------------------------- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 10.76 $ 10.00 $ 9.85 $ 10.08 $ 10.62 $ 10.64 $ 10.00
0.43 0.41 0.38 0.43 0.56 0.78 0.58
0.23 0.76 0.58 0.02 (0.40) (0.16) 0.64
- ------------------------------------------------------------------------------------------------------------------------
0.66 1.17 0.96 0.45 0.16 0.62 1.22
- ------------------------------------------------------------------------------------------------------------------------
(0.43) (0.41) (0.32) (0.59) (0.58) (0.62) (0.56)
(0.10) -- (0.07) (0.09) (0.11) (0.02) --
-- -- -- -- -- -- (0.02)
-- -- (0.04) -- (0.01) -- --
- ------------------------------------------------------------------------------------------------------------------------
(0.53) (0.41) (0.43) (0.68) (0.70) (0.64) (0.58)
- ------------------------------------------------------------------------------------------------------------------------
$ 10.89 $ 10.76 $ 10.38 $ 9.85 $ 10.08 $ 10.62 $ 10.64
- ------------------------------------------------------------------------------------------------------------------------
6.20% 11.86% 9.68% 4.61% 1.39% 5.84% 12.77%
$77,249 $39,943 $14,285 $13,675 $16,426 $15,665 $13,028
0.85% 0.85% 1.15% 1.15% 1.15% 1.15% 1.15%
1.17% 1.60% 1.96% 1.87% 1.96% 2.00% 2.42%
3.87% 4.01% 4.69% 4.98% 5.49% 5.75% 5.96%
3.55% 3.26% 3.88% 4.26% 4.68% 4.90% 4.69%
62.55% 22.22% 16.49% 30.26% 37.76% 52.05% 43.24%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
59
-----
<PAGE> 62
FINANCIAL HIGHLIGHTS (CONTINUED)
FIXED INCOME FUNDS
<TABLE>
<CAPTION>
HIGH YIELD
HIGH YIELD FIXED
MUNICIPAL INCOME
FUND FUND
-------- --------
YEAR YEAR
ENDED ENDED
MAR. 31, MAR. 31,
1999(1) 1999(1)
- ----------------------- -------- --------
SELECTED PER SHARE DATA
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.11
Net realized and unrealized gains
on investments -- 0.08
- -----------------------------------------------------------------------------------------
Total Income from Investment Operations 0.05 0.19
- -----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.04) (0.09)
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 10.01 $ 10.10
=========================================================================================
TOTAL RETURN(2) 0.57% 2.06%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $10,033 $40,864
Ratio to average net assets of(3):
Expenses, net of waivers and reimbursements 0.85% 0.90%
Expenses, before waivers and reimbursements 5.60% 2.18%
Net investment income, net of waivers and
reimbursements 2.92% 6.78%
Net investment income (loss), before waivers
and reimbursements (1.83)% 5.50%
Portfolio Turnover Rate 0.00% 0.00%
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations after the close of business on
December 31, 1998.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at net asset value at the end of the year. Total return
is not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
60
- -----
<PAGE> 63
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
U.S. GOVERNMENT FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000S) (000S) (000S) (000S)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 61.1% GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 0.1% (CONT'D.)
FANNIE MAE - 8.9% $ 142 Pool #270288, 10.00%, 6/15/19 153
FNMA Notes, 33 Pool #270297, 10.00%, 6/15/19 35
$12,000 5.625%, 3/15/01 $12,092 68 Pool #302836, 10.00%, 2/15/21 74
11,750 5.25%, 1/15/03 11,662 --------
-------- 394
23,754 --------
--------
TENNESSEE VALLEY AUTHORITY - 1.4%
FANNIE MAE REMIC TRUST - 19.5% 3,700 Series B, Putable 7/15/01,
4,201 Series 1996-M7, Class A, 6.24%, 7/15/45 3,774
6.50%, 9/17/04 4,231 --------
10,000 Series 1997-M5, Class C,
6.74%, 8/25/07 10,335 Total U.S. Government Agencies
11,250 Series 1998-24, Class QB, (cost $163,559) 163,741
6.00%, 9/18/12 11,310 --------
1,394 Series 1992-200, Class E,
6.25%, 6/25/17 1,393 U.S. GOVERNMENT
12,926 Pool #440700, OBLIGATIONS - 30.5%
6.00%, 11/1/28 12,562
12,815 Pool #452421, U.S. Treasury Notes - 25.7% 18,158
6.00%, 12/1/28 12,455 17,750 7.75%, 1/31/00 17,514
-------- 16,940 6.625%, 7/31/01 33,258
52,286 30,000 7.50%, 2/15/05 --------
-------- 68,930
--------
FEDERAL HOME LOAN BANK - 9.0%
24,000 FHLB Bond, 5.50%, 7/14/00 24,053
-------- U.S. TREASURY INFLATIONARY INDEXED
FREDDIE MAC - 11.8% NOTES - 4.8%
446 Series 1379, Class EA, 13,000 3.625%, 1/15/08 12,914
6.00%, 5/15/16 445 --------
12,000 Series 2080, Class PE,
6.00%, 11/15/21 11,955 Total U.S. Government Obligations
752 Pool #410092, (cost $83,067) 81,844
7.19%, 11/1/24 767 --------
8,601 Group G00767,
7.50%, 8/1/27 8,841 SHORT-TERM INVESTMENTS - 7.6%
9,794 Group C18079,
6.00%, 11/1/28 9,527 8,871 FHLB Discount Note,
-------- 4.80%, 4/1/99 8,871
31,535 11,591 FHLMC Discount Note,
-------- 4.82%, 4/1/99 11,591
--------
FREDDIE MAC MTN - 10.4%
12,000 5.75%, 7/15/03 12,090 Total Short-Term Investments
16,000 5.75%, 4/15/08 15,855 (cost $20,462) 20,462
-------- --------
27,945
-------- Total Investments - 99.2%
(cost $267,088) 266,047
GOVERNMENT NATIONAL MORTGAGE
Association - 0.1% Other Assets less Liabilities - 0.8% 2,195
122 Pool #268360, 10.00%, 4/15/19 132 --------
NET ASSETS - 100.0% $268,242
========
</TABLE>
See Notes to the Financial Statements.
-----
61
-----
<PAGE> 64
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERMEDIATE TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 95.6% COLORADO - 2.8% (CONT'D.)
$ 610 Metropolitan Wastewater Reclamation
District Gross Revenue Refunding Bond,
ALABAMA - 1.6% Series B (MBIA Insured), 6.75%, 4/1/03 $ 675
$4,300 West Jefferson Amusement & Public Park -------
Authority Revenue Bond, Visionland Project, 9,722
Prerefunded, 8.00%, 12/1/06 $5,440 -------
------
DISTRICT OF COLUMBIA - 0.5%
ALASKA - 2.3% 1,700 DISTRICT OF COLUMBIA Revenue Bond,
1,185 Alaska Municipal Bond Revenue Authority, Georgetown University (MBIA Insured),
Series A (FSA Insured), 4.25%, 12/1/01 1,202 4.70%, 4/1/06 1,756
North Slope Borough Capital Appreciation -------
G.O. Refunding Bond (MBIA Insured)
5,200 Series A, 0.00%, 6/30/01 4,779 FLORIDA - 10.4%
2,000 Series B, 0.00%, 6/30/01 1,838 Broward County School District G.O. Bond
------ 380 6.75%, 2/15/00 389
7,819 1,000 6.00%, 2/15/06 1,075
------ 3,375 Dade County Water and Sewer System
Revenue Bond (FGIC Insured),
ARIZONA - 2.2% 6.25%, 10/1/06 3,828
2,000 Maricopa County Unified School District 1,750 Florida State Board of Education Capital
No. 11 Peoria G.O. Bond, 5.60%, 7/1/07 2,154 Outlay G.O. Bond, 5.50%, 1/1/03 1,855
5,000 Mesa City Project of 1987 G.O. Bond 3,195 Florida State Dade County Road G.O.
(MBIA Insured), Refunding Bond, Escrowed to Maturity,
Prerefunded, 5.70%, 7/1/03 5,431 5.00%, 7/1/10 3,304
------ 2,000 Florida State Department of Environmental
7,585 Protection Revenue Bond, PRSV 2000-B
------ (FSA Insured), 5.00%, 7/1/01 2,064
Florida State Division of Bond Financing
CALIFORNIA - 2.4% Department General Recreational Facilities
5,500 California Statewide Communities Improvement Department of Environ-
Development Authority Revenue mental Protection Revenue Bond,
Refunding Bond, Series A-2, Irvine PRSV 2000-A (AMBAC Insured)
Apartment Communities, 2,270 5.50%, 7/1/06 2,460
4.90%, Mandatory Put, 5/15/08 5,496 3,000 5.50%, 7/1/07 3,234
1,000 Foothill/Eastern Transportation Corridor 9,000 Inland Protection Financing Corp. S.O.
Agency Toll Road Senior Lien Revenue Revenue Bond (FSA Insured),
Bond, Series A, 0.00%, 1/1/05 784 5.00%, 7/1/00 9,184
2,000 San Diego Water Utility Fund - Net System 1,150 Jacksonville District Water & Sewer
Revenue Bond Certificates (FGIC Insured), Revenue Bond (MBIA Insured),
5.375%, 8/1/12 2,147 Prerefunded, 5.00%, 10/1/08 1,220
------ 1,500 Jacksonville Electric Authority Revenue
8,427 Refunding Bond, St. John's River Power
------ System, 6.50%, 10/1/01 1,586
5,000 Venice City Health Facilities Revenue
COLORADO - 2.8% Bond, Venice Hospital, Inc. Project,
2,500 Arapahoe County School District No. 5 Prerefunded, 6.00%, 12/1/04 5,604
Cherry Creek G.O. Refunding Bond, -------
Series A, 5.25%, 12/15/04 2,648 35,803
5,750 Jefferson County School District No. R-001 -------
G.O. Bond, Series A (FGIC Insured),
6.00%, 12/15/05 6,399
</TABLE>
See Notes to the Financial Statements.
- -----
62
- -----
<PAGE> 65
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERMEDIATE TAX-EXEMPT FUND(continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000S) (000S) (000S) (000S)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GEORGIA - 4.3% ILLINOIS - 6.4% (CONT'D.)
Atlanta City Airport Facilities Revenue $6,100 Illinois State Educational
Refunding Bond (AMBAC Insured) Facilities Authority
$1,200 5.50%, 1/1/01 $ 1,240 Revenue Bond, Series B, University of
3,500 6.00%, 1/1/02 3,707 Chicago, 4.40%, Mandatory Put, 7/1/04 6,188
2,500 6.00%, 1/1/04 2,723 2,530 Illinois State School District Capital
2,000 Clarke County School District G.O. Bond Appreciation Revenue Bond, Project 304
(FSA Insured), 4.75%, 3/1/02 2,058 (FSA Insured), 0.00%, 1/1/07 1,792
1,850 Cobb County School District G.O. Bond, 310 McLean County Public Building
5.00%, 2/1/03 1,931 Commission Revenue Bond, Law and
870 Gwinnett County Water & Sewer Authority Justice Center Project, 7.10%, 11/1/00 327
Revenue Refunding and Improvement ------
Bond, Escrowed to Maturity, 22,245
8.20%, 8/1/99 891 ------
Municipal Electric Authority of Georgia
General Resolution Project Revenue Bond 1,500 INDIANA - 0.4%
(MBIA Insured) Tippecanoe County School Building
1,000 Series B, 5.00%, 1/1/02 1,033 Revenue Bond (MBIA Insured),
1,000 Series A, 6.00%, 1/1/07 1,113 5.50%, 7/15/01 1,558
-------- ------
14,696
-------- 5,000 IOWA - 1.4%
Chillicothe PCR Refunding Bond, IES
ILLINOIS - 6.4% Utilities, Inc. Project, 4.25%, 11/1/23 4,983
3,895 Chicago City Board of Education Capital ------
Appreciation School Reform-B-1 G.O. Bond
(FGIC Insured), 0.00%, 12/1/09 2,366 3,000 KANSAS - 1.4%
3,000 Chicago City G.O. Bond (AMBAC Insured), Burlington Environmental Improvement
Prerefunded, 5.90%, 7/1/05 3,356 Revenue Bond, Series D, Kansas City Power
1,000 Chicago City Wastewater Transmission & Light Co. Project,
Revenue Bond (FGIC Insured), 1,700 4.35%, Mandatory Put, 9/1/01 3,022
Prerefunded, 6.30%, 1/1/03 1,104 Kansas City G.O. Refunding Bond, Series A
Illinois State Development Financing (MBIA Insured), 5.20%, 9/1/06 1,801
Authority Economic Development Revenue ------
Bond, Latin School of Chicago Project 4,823
500 5.60%, 8/1/18 501 ------
1,000 5.65%, 8/1/28 1,002
1,665 Illinois State Development Financing KENTUCKY - 2.1%
Authority Local Government Revenue Bond, 1,380 Kentucky Economic Finance Authority
Lincoln Way Community (FGIC Insured), Revenue Bond, Series A, Catholic Health
5.70%, 1/1/15 1,814 Project, 5.50%, 12/1/05 1,484
2,000 Illinois State Development Financing 3,500 Kentucky State Property and Buildings
Authority Solid Waste Disposal Revenue Commission Revenue Refunding Bond,
Bond, 5.05%, 1/1/10 2,000 Project No. 59, 5.00%, 11/1/01 3,617
1,750 Illinois State Educational Facilities 2,000 Kentucky State Turnpike Authority
Authority Revenue Bond, Reserve 3, Economic Development Road Revenue
4.75%, Mandatory Put, 3/1/07 1,795 Refunding Bond, Revitalization Project,
5.50%, 1/1/01 2,063
------
2,350 LOUISIANA - 1.0% 7,164
Louisiana State G.O. Refunding Bond, ------
Series A (AMBAC Insured), 5.00%, 4/15/02 2,433
</TABLE>
See Notes to the Financial Statements.
-----
63
-----
<PAGE> 66
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERMEDIATE TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LOUISIANA - 1.0% (CONT'D) NEBRASKA - 2.8%
American Public Energy Agency Gas
Supply Revenue Bond
$1,000 St. Charles Parish PCR Refunding Bond, $3,350 4.00%, 9/1/06 $3,299
Union Carbide Corp. Project, 5,500 4.30%, 3/1/11 5,252
5.10%, 1/1/12 $ 989 1,000 Nebraska State Public Power District
------ Supply System Revenue Bond, Series B,
3,422 Escrowed to Maturity, 4.80%, 1/1/03 1,032
------ -----
9,583
MARYLAND - 0.5% -----
1,650 Maryland State and Local Facilities
G.O. Bond, 4.30%, 7/15/03 1,689 NEVADA - 0.1%
------ 310 Nevada State Bank Municipal G.O. Bond,
Project No. 3-C, Escrowed to Maturity,
MASSACHUSETTS - 3.6% 7.625%, 5/1/01 321
Massachusetts State Health & Educational -----
Facilities Authority Revenue Bond, Series A,
Caregroup, Inc. (MBIA Insured) NEW HAMPSHIRE - 0.2%
1,735 5.00%, 7/1/05 1,820 620 Manchester City G.O. Refunding Bond,
3,000 4.75%, 7/1/12 2,982 Series B, 4.70%, 7/1/01 636
2,625 Massachusetts State Municipal Wholesale -----
Electric Co. and Power Supply System
Revenue Bond (AMBAC Insured), NEW JERSEY - 1.1%
5.10%, 7/1/07 2,775 3,500 New Jersey State G.O. Bond, Series E,
Massachusetts State Water Reserve Authority 5.00%, 7/15/04 3,687
General Revenue Bond, Series A -----
2,500 7.25%, 4/1/01 2,634
2,000 Prerefunded, 6.50%, 7/15/02 2,208 NEW MEXICO - 0.5%
------ 610 Bernalillo County G.O. Bond,
12,419 3.875%, 8/1/03 612
------ 1,000 Santa Fe City Revenue Bond, Series A
(AMBAC Insured),
MICHIGAN - 2.0% Prerefunded, 6.30%, 6/1/04 1,110
2,925 Detroit City G.O. Bond, Series A, -----
Self-Insurance Project, 5.60%, 5/1/01 3,021 1,722
1,600 Detroit City G.O. Refunding Bond, -----
Series B, 6.00%, 4/1/00 1,638
1,300 Michigan State Strategic Fund Limited NEW YORK - 14.8%
Obligation Revenue Bond, United Waste Long Island Power Authority New York
Systems Project (Gtd. by Waste Electrical Systems Revenue Refunding Bond
Management, Inc.), 5.20%, 4/1/10 1,301 6,885 4.00%, 4/1/01 6,918
1,000 Romulus Community Schools Refunding 1,000 4.25%, 4/1/01 1,010
G.O. Bonds (FSA Insured), 4.25%, 5/1/10 975 4,500 5.00%, 4/1/02 4,631
------ 3,735 Middletown City School District G.O. Bond
6,935 (FGIC Insured), 4.75%, 11/1/00 3,820
------ New York City G.O. Bond
1,000 Series A, 4.75%, 8/1/03 1,028
MISSISSIPPI - 0.8% 8,405 Series G, 5.00%, 8/1/04 8,747
600 Mississippi State G.O. Bond, Series E, 5,200 Series A, 5.00%, 8/1/05 5,417
5.00%, 9/1/02 625 2,115 New York City Municipal Assistance Corp.
2,000 Mississippi State G.O. Refunding Bond, Revenue Bonds, Series E, 4.70%, 7/1/02 2,178
6.05%, 8/15/03 2,175
------
2,800
------
</TABLE>
See Notes to the Financial Statements.
- -----
64
- -----
<PAGE> 67
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERMEDIATE TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK - 14.8% PENNSYLVANIA - 3.7%
(CONT'D.) $3,000 Pennsylvania State Intergovernmental
$ 4,795 New York City Transitional Financing Authority Special TRB (FGIC Insured),
Authority Future Tax Secured Revenue Bond, Escrowed to Maturity, 6.00%, 6/15/02 $ 3,169
Series B (FGIC Insured), 4.75%, 11/15/13 $4,785 1,000 Pennsylvania State Unlimited G.O.
New York State Dormitory Authority Refunding Bond (AMBAC Insured),
Revenue Refunding Bond 5.125%, 9/15/02 1,046
2,500 Series A, 5.40%, 5/15/02 2,611 2,630 Philadelphia City Hospitals and Higher
2,500 Series C, 5.50%, 5/15/03 2,640 Education Facilities Revenue Bond, Series A,
New York State G.O. Refunding Bond Jefferson Health System (MBIA Insured),
2,500 6.625%, 8/1/01 2,669 5.25%, 5/15/11 2,736
1,000 6.00%, 10/1/06 1,110 3,300 Philadelphia City Intergovernmental
2,265 New York State Urban Development Corp. Funding Special TRB (FGIC Insured),
Revenue Bond, Series B, Correctional Prerefunded, 6.75%, 6/15/05 3,790
Facilities Services Contract, 5.00%, 1/1/03 2,337 1,910 St. Mary Hospital Authority Revenue Bond,
1,250 New York State Urban Development Corp. Series A, Bucks County Catholic Health
Subordinate Lien Revenue Bond, Initiatives, 5.00%, 12/1/05 1,991
5.50%, 7/1/16 1,300 -------
------ $12,732
51,201 -------
------
PUERTO RICO - 1.2%
NORTH CAROLINA - 3.3% 4,000 Puerto Rico Commonwealth Public
2,000 North Carolina State G.O. Bond, Improvement G.O. Refunding Bond,
4.75%, 4/1/04 2,082 5.00%, 7/1/05 4,201
10,000 North Carolina State Medical Care -------
Commission Hospital Revenue Bond,
Series A, Pitt County Memorial Hospital SOUTH CAROLINA - 2.3%
(MBIA Insured), 4.75%, 12/1/28 9,323 3,500 Columbia Waterworks and Sewer System
------ Capital Appreciation Revenue Bond,
11,405 0.00%, 2/1/03 3,009
------ South Carolina State Public Service
Authority Revenue Refunding Bond,
OKLAHOMA - 1.7% Series B (FGIC Insured)
2,850 Grand River Dam Authority Revenue 2,650 6.50%, 1/1/04 2,939
Refunding Bond (MBIA Insured), 1,700 6.50%, 1/1/05 1,909
5.70%, 6/1/05 3,107 -------
2,740 Oklahoma Development Financing Authority 7,857
Revenue Refunding Bond, Series A, Hillcrest -------
Healthcare System, 5.20%, 8/15/11 2,715
------ TENNESSEE - 3.0%
5,822 1,000 Chattanooga Health, Educational & Housing
------ Facilities Board Revenue Refunding and
Hospital Improvement Bond, Siskin
OREGON - 1.4% Hospital, 5.25%, 6/1/28 953
540 Clackamas and Washington Counties Memphis City Electric System Revenue
School District No. 003 G.O. Bond, Refunding Bond
7.00%, 8/1/02 594 5,000 5.625%, 1/1/02 5,249
Washington County School District 2,000 5.80%, 1/1/03 2,138
No. 48J G.O. Refunding Bond 1,870 Metropolitan Government Nashville and
850 Series B, 4.10%, 9/1/02 863 Davidson Counties G.O. Bond,
3,445 5.00%, 8/1/06 3,633 4.50%, 5/15/02 1,915
------ -------
5,090 10,255
------ -------
</TABLE>
See Notes to the Financial Statements.
-----
65
-----
<PAGE> 68
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERMEDIATE TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TEXAS - 4.5% WASHINGTON - 2.2% (CONT'D.)
$2,000 Brazos River Authority PCR Refunding $ 450 Seattle Limited Tax G.O. Bond, Escrowed
Bond, Series A, to Maturity, 7.00%, 3/1/01 $ 478
3.70%, Mandatory Put, 4/1/00 $ 2,000 500 Snohomish County School District No. 015
2,000 El Paso City Independent School District Edmonds G.O. Bond, 7.00%, 12/1/01 541
Capital Appreciation G.O. Bond (PSF of 5,000 Washington State Public Power Supply
Texas Gtd.), 0.00%, 2/15/02 1,789 System Revenue Bond, Series A, Nuclear
7,450 Harris County Revenue Refunding Senior Project No. 2, 5.00%, 7/1/03 5,201
Subordinate Lien Toll Road Bond (AMBAC --------
Insured), 4.95%, 8/15/06 7,820 7,476
2,955 Houston Independent School District --------
Capital Appreciation Revenue Bond,
Series B, 0.00%, 9/15/01 2,691 WISCONSIN - 2.9%
1,035 Texas Municipal Power Agency Revenue 1,850 Milwaukee County Unlimited G.O. Bond,
Refunding Bond (MBIA Insured), Series A (MBIA Insured), 5.25%, 10/1/01 1,926
5.75%, 9/1/02 1,101 4,415 Wisconsin State G.O. Refunding Bond,
------- Series 3, 6.125%, 11/1/06 4,977
15,401 2,000 Wisconsin State Health and Educational
------- Facilities Authority Revenue Bond,
Series A, Aurora Health Care, Inc.,
UTAH - 0.9% 5.60%, 2/15/29 1,971
1,000 Utah State G.O. Bond, Series A, 1,000 Wisconsin State Health and Educational
5.00%, 7/1/06 1,058 Facilities Authority Revenue Bond,
2,000 Utah State Intermountain Power Agency Children's Hospital of Wisconsin, Inc.
Power Supply Revenue Refunding Bond, (AMBAC Insured), 5.625%, 2/15/12 1,081
Series D, 5.00%, 7/1/21 1,930 --------
------- 9,955
2,988 --------
-------
Total Municipal Investments
VIRGINIA - 2.9% (cost $321,928) 329,575
3,250 Arlington County G.O. Bond, --------
5.80%, 12/1/02 3,492
3,000 Charles City and County IDA Solid Waste NUMBER
Disposal Facility Revenue Refunding Bond, OF SHARES
Waste Management, Inc. Project, (000s)
4.875%, 2/1/09 2,976 ---------
3,230 Virginia State G.O. Bond,
5.375%, 6/1/05 3,489 OTHER - 1.7%
-------
9,957 5,736 AIM Tax Free Cash Reserve Fund 5,736
------- 145 Provident Municipal Fund 145
--------
WASHINGTON - 2.2% Total Other
550 Kitsap County School District No. 401 G.O. (cost $5,881) 5,881
Bond, Series A, 6.05%, 12/1/00 573 --------
310 Pierce County School District No. 003 Total Investments - 97.3%
Puyallup G.O. Bond, Series A, (cost $327,809) 335,456
7.75%, 12/1/01 342
310 Pierce Fife County School District No. 417 Other Assets less Liabilities - 2.7% 9,333
G.O. Bond, Series A, 7.85%, 12/1/01 341 --------
NET ASSETS - 100.0% $344,789
========
</TABLE>
See Notes to the Financial Statements.
- -----
66
- -----
<PAGE> 69
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
FLORIDA INTERMEDIATE TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 95.5% FLORIDA - 86.0% (CONT'D.)
$ 350 Florida State Municipal Power Agency
FLORIDA - 86.0% Revenue Bond, St. Lucie Project
$ 100 Charlotte County Utility Systems (FGIC Insured), 5.40%, 10/1/05 $ 372
Revenue Bond, Series 1994 250 Florida State Sunshine Skyway
(FGIC Insured), 5.50%, 10/1/00 $ 103 Revenue Refunding Bond, Series 1991,
1,695 Dade County G.O. Bond (FGIC Insured), 6.40%, 7/1/04 266
5.125%, 11/1/17 1,722 1,000 Gainesville City Utility Systems
1,000 Dade County Refunding Bond Revenue Refunding Bond,
(FGIC Insured), 12.00%, 10/1/02 1,266 Series 1979 A, 6.20%, 10/1/02 1,055
500 Dade County Sales TRB (AMBAC Insured), 500 Hillsborough County Aviation Authority
6.00%, 10/1/01 530 Revenue Bond (FGIC Insured),
1,000 Dade County School District Unlimited Tax 6.60%, 10/1/03 518
G.O. Bond (MBIA Insured), 500 Inland Protection Financing Corp. S.O.
5.00%, 2/15/11 1,031 Revenue Bond (FSA Insured),
400 Dade County Seaport Revenue 5.00%, 7/1/00 510
Refunding Bond (MBIA Insured), 500 Jacksonville City Health Facilities Authority
6.50%, 10/1/10 472 Revenue Bond, Series A, Charity Obligation
150 Duval County School District G.O. Group Project (MBIA Insured),
Bond, Series 1992 (AMBAC Insured), 5.00%, 8/15/11 514
6.125%, 8/1/04 161 1,500 Jacksonville District Water and Sewer
1,400 Florida Gas Utility Revenue Bond, Revenue Bond (MBIA Insured),
Gas Project No. 1 (FSA Insured), Prerefunded, 5.00%, 10/1/08 1,591
5.00%, 12/1/02 1,463 700 Jacksonville Electric Authority
1,000 Florida State Board of Education Revenue Refunding Bond, Series 16,
Capital Outlay Revenue Bond, St. John River Issue 2, 5.00%, 10/1/03 735
Series 1978 C, Escrowed to Maturity, 450 Kissimmee City Suburban Water
6.00%, 5/1/03 1,075 and Sewer System Revenue Refunding
Florida State Board of Education Bond (AMBAC Insured),
Capital Outlay Revenue Bond 5.75%, 10/1/01 473
100 Series 1992 B, 100 Kissimmee City Utility Authority
Prerefunded, 5.30%, 6/1/02 106 Electric System Revenue Refunding
1,440 Series 1998 A, 5.25%, 1/1/12 1,509 Bond, Series 1991 (FGIC Insured),
1,000 Florida State Department of Children Prerefunded, 6.50%, 10/1/01 109
and Families COP, South Florida State 370 Lee County Refunding Bond, Series 1997 A
Hospital Project (AMBAC Insured), (MBIA Insured), 5.75%, 10/1/11 413
3.75%, 7/1/01 1,004 1,270 Lee County School Board COP
500 Florida State Department of Transportation Revenue Refunding Bond, Series 1996 A
Right of Way Revenue Refunding Bond, (FSA Insured), 6.00%, 8/1/03 1,381
6.00%, 7/1/04 549 1,000 Leesburg Hospital Revenue Bond
1,250 Florida State Finance Department General Series 1991 A,
Services Revenue Bond, Series A Prerefunded, 7.50%, 7/1/02 1,132
(FSA Insured), 5.50%, 7/1/09 1,363 500 Manatee County Public Utilities Revenue
200 Florida State Municipal Power Agency Bond, Series 1991 A (MBIA Insured),
Revenue Bond, Power Supply Project Prerefunded, 6.75%, 10/1/01 547
(AMBAC Insured),
Prerefunded, 6.25%, 10/1/01 217
</TABLE>
See Notes to the Financial Statements.
-----
67
-----
<PAGE> 70
SCHEDULES OF INVESTMENTS MARCH 31, 1999
FLORIDA INTERMEDIATE TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLORIDA - 86.0% (CONT'D.) MASSACHUSETTS - 2.7%
$1,000 Manatee County School Boards COP $1,000 Massachusetts State Health and Educational
Series 1998 A (MBIA Insured), Facilities Revenue Bond, Group A,
4.85%, 7/1/12 $ 1,013 5.25%, 7/1/07 $ 1,006
1,000 Miami-Dade County Florida S.O. -------
Refunding Subordinate Bond, Series 1997 A
(MBIA Insured), 0.00%, 10/1/14 460 PUERTO RICO - 6.8%
625 Orange County HFA Revenue Bond, 1,000 Puerto Rico Commonwealth Public
Series 1999 G, 5.20%, 9/1/14 624 Improvement G.O. Bond,
200 Orange County Tourist Development TRB, 5.25%, 7/1/10 1,057
Series 1992 B (AMBAC Insured), 1,400 Puerto Rico Public Buildings Authority
5.90%, 10/1/00 208 Guaranteed Public Education and Health
100 Orlando City Utility Commission Facilities Revenue Refunding Bond,
Water and Electric Revenue Refunding Series M (Commonwealth Gtd.),
Bond, Series 1992, 5.75%, 10/1/05 110 5.20%, 7/1/02 1,460
1,500 Palm Beach County Solid Waste Authority -------
Revenue Bond, Series 1997 A (AMBAC 2,517
Insured), 5.50%, 10/1/06 1,629 -------
4,000 Palm Beach County Solid Waste Authority
Revenue Capital Appreciation Bond, Total Municipal Investments
Series 1998 A (AMBAC Insured), (cost $35,049) 35,451
0.00%, 10/1/12 2,089 -------
50 Reedy Creek Improvement District Bond,
Series 1991 A, Prerefunded, 6.00%, 6/1/01 53
200 Reedy Creek Improvement District Bond, NUMBER
Series 1991 A, Unrefunded Balance, OF SHARES
6.00%, 6/1/02 211 (000s)
400 Santa Rosa Bay Bridge Authority Capital ---------
Appreciation Bond, Series 1996 A,
0.00%, 7/1/06 284 OTHER - 2.2%
200 Sunrise City Utility Systems Revenue
Capital Appreciation Bond, Series 1996 A 557 Federated Tax Free Trust Money
(AMBAC Insured), 0.00%, 10/1/01 183 Market Fund No. 15 557
1,000 Tampa Bay Water Utilities System 275 Dreyfus Tax-Exempt Cash Management
Revenue Bond, Series 1998 A Fund No. 264 275
(FGIC Insured), 5.125%, 10/1/16 1,021 -------
750 Tampa City Sports Authority Revenue
Bond, Stadium Project (MBIA Insured), Total Other
6.00%, 1/1/06 832 (cost $832) 832
1,035 Tampa Hospital Capital Improvement -------
Revenue Bond, Series 1999 A,
4.75%, 7/1/11 1,024 Total Investments - 97.7%
------- (cost $35,881) 36,283
31,928
------- Other Assets less Liabilities - 2.3% 838
-------
NET ASSETS - 100.0% $37,121
=======
</TABLE>
See Notes to the Financial Statements.
- -----
68
- -----
<PAGE> 71
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSET-BACKED SECURITIES - 17.9% $ 927 Western Financial Grantor Trust,
Series 1995-4, Class A-1,
$ 5,815 California Infrastructure PG&E-1, 6.20%, 2/1/02 $ 931
Series 1997-1, Class A5, 8,000 WFO Financial Owner Trust,
6.25%, 6/25/04 $5,903 Series 1998-B, Class A3,
655 Chevy Chase Auto Receivables Trust, 5.95%, 7/20/01 8,024
Series 1997-2, Class A, -------
6.35%, 1/15/04 661
2,540 Commercial Mortgage Asset Trust, Total Asset-Backed Securities
Series 1999-C1, Class A3, (cost $44,910) 49,127
6.64%, 9/17/10 2,562 -------
2,090 Contimortgage Net Interest Margin Notes,
Series 1998-A, Class A, CORPORATE/GOVERNMENT BONDS
7.92%, 3/16/28(1) 2,083 AND NOTES - 22.1%
623 Delta Funding Mortgage Corp., I.O.,
Series 1991-1, Class A-4, BEVERAGES - 0.5%
7.50%, 3/15/06(1) 2 1,473 Coca-Cola Enterprise,
121 DLJ Mortgage Acceptance Corp., 7.00%, 10/1/26 1,546
7.25%, 5/25/24 122 -------
24,698 DLJ Mortgage Acceptance Corp., I.O.,
7.50%, 11/12/21(1) 1,698 DIVERSIFIED FINANCIAL SERVICES - 7.9%
4,325 First Union-Lehman Brothers-Bank of 6,450 Asian Development Bank,
America, Series 1998-C2, Class A2, 6.375%, 10/1/28 6,626
6.56%, 11/18/08 4,399 19 Berkshire Hathaway, Inc.,
2,988 IMC Excess Cashflow Securities Trust, 9.75%, 1/15/18 20
Series 1997-A, Class A, 7,750 CIT Group Inc.,
7.41%, 11/26/28(1) 2,802 5.85%, 5/26/00 7,776
4,840 Mortgage Capital Funding, Inc., 7,500 Ford Motor Credit Co.,
Series 1998-MC1, Class A2, 6.00%, 1/14/03 7,527
6.66%, 1/18/08 4,958 -------
8,750 Nationslink Funding Corp., 21,949
Series 1999-1, Class A2, -------
6.32%, 11/20/08 8,740
530 Olympic Automobile Receivables Trust, ENVIRONMENTAL CONTROLS - 1.9%
Series 1995-A, Class A, 5,000 Waste Management, Inc., 7.10%, 8/1/26 5,213
7.875%, 7/15/01 532 -------
1,427 PNC Mortgage Securities Corp.,
8.09%, 4/28/27(1) 1,483 FOOD - 1.6%
1,083 Residential Asset Securitization Trust, 3,900 Diageo PLC, 7.45%, 4/15/35 4,283
Series 1997-A8 C, Class A3, -------
7.00%, 10/25/27 1,083
922 The Money Store Trust, INSURANCE - 3.0%
Series 1997-1, 2,900 Anthem Insurance, Inc.,
7.36%, 5/16/01(1) 914 9.00%, 4/1/27(1) 2,999
2,217 TMS Auto Grantor Trust, Lumberman's Mutual Casualty Co.
Series 1997-3, Class A2, 3,910 9.15%, 7/1/26(1) 4,402
6.12%, 12/20/03 2,230 765 8.45%, 12/1/37(1) 776
-------
8,177
PETROLEUM PRODUCTS - 0.9%
3,450 Petrozuata Finance, Inc.,
8.22%, 4/1/17(1) 2,484
</TABLE>
See Notes to the Financial Statements.
-----
69
-----
<PAGE> 72
SCHEDULES OF INVESTMENTS MARCH 31, 1999
FIXED INCOME FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RETAIL - 1.7%
$ 4,540 Penney (J.C.) & Co., Inc., U.S. GOVERNMENT OBLIGATIONS -
6.90%, 8/15/26 $ 4,632 39.4%
--------
U.S. TREASURY BONDS - 35.1%
TELEPHONE - 2.4% $ 6,350 6.625%, 7/31/01 $ 6,565
6,540 AT&T Corp., 6.00%, 3/15/09 6,497 25,240 7.50%, 2/15/05 27,981
-------- 10,000 6.625%, 5/15/07 10,783
13,560 6.125%, 8/15/07 14,196
TRANSPORTATION - 2.2% 32,130 7.125%, 2/15/23 37,095
5,950 Burlington Northern Santa Fe Corp., --------
6.53%, 7/15/37 6,030 96,620
-------- --------
Total Corporate/Government Bonds U.S. TREASURY INFLATION INDEX NOTE - 4.3%
and Notes 12,000 3.675% , 1/15/08 11,921
(cost $66,369) 60,811 --------
--------
Total U.S. Government Obligations
U.S. GOVERNMENT AGENCIES - 12.0% (cost $110,419) 108,541
--------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.7%
FHLMC FLOATING RATE BANK NOTES - 3.6%
168 Series 1248, Class B, 7.00%, 3/15/22 170
440 Series 1591, Class FH, 7.00%, 9/15/22 453 6,200 Lloyds Bank PLC, 5.125%, 6/15/99 5,226
810 Series 1591, Class SH, 5.03%, 9/15/22 733 5,900 National Westminster Bank,
FNMA REMIC Trusts 5.125%, 5/28/99 4,777
12,411 Series 1997-20, I.O., 8.00%, 3/25/27 760 --------
--------
2,116 Total Floating Rate Bank Notes
-------- (cost $10,488) 10,003
--------
MORTGAGE BACKED SECURITIES - 11.3%
1 FHLMC, 6.50%, 6/1/04 1 SHORT-TERM INVESTMENTS - 4.6%
4,625 FHLMC - Gold, Pool G00767,
7.50%, 8/1/27 4,754 1,531 FHLB Discount Note, 4.875%, 4/1/99 1,531
5,264 FHLMC - Gold, Pool C18079, 11,030 Societe Generale, Grand Cayman,
6.00%, 11/1/28 5,121 Eurodollar Time Deposits,
11,683 FNMA, Pool 440700, 5.125%, 4/1/99 11,030
6.00%, 11/1/28 11,355 --------
10,084 FNMA, Pool 452421,
6.00%, 12/1/28 9,801 Total Short-Term Investments
-------- (cost $12,561) 12,561
31,032 --------
--------
Total Investments - 99.6%
Total U.S. Government Agencies (cost $278,225) 274,191
(cost $33,478) 33,148
-------- Other Assets less Liabilities - 0.4% 917
---------
NET ASSETS - 100.0% $275,108
=========
</TABLE>
(1) These private placement securities may require registration under the
Securities Act of 1933 or an exemption therefrom in order to effect sale in
the ordinary course of business. At March 31, 1999, the value of these
securities amounted to approximately $19,643,000 or 7.1% of net assets.
See Notes to the Financial Statements.
- -----
70
- -----
<PAGE> 73
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 93.6% CALIFORNIA - 7.9% (CONT'D.)
$1,000 South San Francisco Capital Improvement
ALABAMA - 2.1% Financing Authority Revenue Bond, Series A,
Jefferson County Sewer Capital Improvement South San Francisco Redevelopment Project
Revenue Bond, Series A (FGIC Insured) (ACA Insured), 5.00%, 9/1/18 $ 973
$2,000 5.00%, 2/1/33 $1,933 230 Walnut Valley Unified School District
1,250 5.375%, 2/1/36 1,272 G.O. Bond, Series A (MBIA Insured),
1,500 5.75%, 2/1/38 1,599 Escrowed to Maturity, 6.00%, 8/1/13 263
------ -------
4,804 18,047
------ -------
ALASKA - 0.4%
1,000 Anchorage G.O. Refunding Bond COLORADO - 0.5%
(MBIA Insured), 5.00%, 7/1/12 1,032 1,250 Pueblo County PCR Refunding Bond,
------ Public Services of Colorado Project
(AMBAC Insured), 5.10%, 1/1/19 1,251
ARIZONA - 3.0% -------
320 Cochise County University School District
No. 68 Sierra Vista G.O. Bond, Series B CONNECTICUT - 1.2%
(FGIC Insured), 9.00%, 7/1/03 383 2,210 Connecticut State Special Tax Obligation
3,000 Maricopa County School District No. 41 Revenue Bond, Series A, Transportation
Gilbert G.O. Bond, 6.25%, 7/1/15 3,231 Infrastructure, 7.125%, 6/1/10 2,719
1,260 Maricopa County School District No. 69 -------
Paradise Valley G.O. Bond, Series B, FLORIDA - 6.1%
8.50%, 7/1/06 1,594 3,000 Broward County Airport System Passenger
1,500 Maricopa County Unified School District Facilities Revenue Bond, Series H-2
No. 11 Peoria Project 1991 G.O. Bond, (AMBAC Insured), 4.75%, 10/1/23 2,840
5.50%, 7/1/10 1,581 3,670 Broward County G.O. Bond,
------ 10.00%, 7/1/14 5,548
6,789 Florida State Board of Education Capital
------ Outlay G.O. Bond
1,500 Series A, 5.50%, 1/1/05 1,613
CALIFORNIA - 7.9% 480 9.125%, 6/1/14 683
4,315 California State Health Facilities Financing 1,000 Florida State Division of Bond Financing
Authority Revenue Bond, Northern California Department General Recreational Facilities
Presbyterian, 5.125%, 7/1/18 4,189 Improvement Department of Environmental
1,150 California State Public Works Board Lease Protection PRSV 2000 Revenue Bond,
Revenue Bond, Series A, 6.10%, 9/1/02 1,238 Series A (MBIA Insured), 6.00%, 7/1/05 1,108
4,000 California State Public Works Board Lease 1,750 Orlando City Utilities Commission Water
Revenue Bond, Series E, Department of and Electric Revenue Refunding Bond,
Corrections State Prison, 5.50%, 6/1/15 4,293 Series D, 6.75%, 10/1/17 2,120
3,500 California Statewide Communities -------
Development Authority Revenue Refunding 13,912
Bond, Series A-2, Irvine Apartment -------
Communities, 4.90%, Mandatory Put, 5/15/08 3,497 GEORGIA - 1.2%
2,760 Los Angeles Convention & Exhibition Center 2,300 Georgia State Municipal Electric Authority
Authority COP, Power Revenue Bond, Series B
Prerefunded, 9.00%, 12/1/05 3,594 (FGIC Insured), 6.375%, 1/1/16 2,682
-------
</TABLE>
-----
71
-----
See Notes to the Financial Statements.
<PAGE> 74
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TAX-EXEMPT FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ILLINOIS - 10.8% INDIANA - 4.9% (CONT'D)
$5,000 Chicago Board of Education Capital Indianapolis City Industrial Utilities
Appreciation G.O. Bond, Series A, Distribution Revenue Refunding Bond,
School Reform Projects (FGIC Insured), Series B (FGIC Insured)
0.00%, 12/1/20 $ 1,610 $ 400 5.00%, 6/1/06 $ 421
Chicago City G.O. Bond, Series A 910 4.00%, 6/1/08 891
(FGIC Insured) 970 3.50%, 6/1/18 794
2,000 5.375%, 1/1/24 2,038 420 Indiana State Municipal Power Agency
2,750 5.125%, 1/1/29 2,694 Supply Systems Revenue Refunding Bond,
Chicago City G.O. Bond, Series B Series B (MBIA Insured), 6.00%, 1/1/12 474
(AMBAC Insured) 1,290 Indiana State Office Building Capital
1,835 5.125%, 1/1/15 1,884 Complex Revenue Bond, Series B
4,610 5.125%, 1/1/22 4,644 (MBIA Insured), 7.40%, 7/1/15 1,661
3,000 Chicago Midway Airport Revenue 3,305 Indiana State Transportation Authority
Bond, Series A (MBIA Insured), Airport Finance Lease Revenue Bond,
5.50%, 1/1/29 3,105 Series A, 5.50%, 11/1/12 3,487
1,250 Chicago Sales TRB (FGIC Insured), 2,000 Marion County Convention and Recreational
5.375%, 1/1/30 1,272 Facilities Authority Excise TRB, Series A
1,000 Chicago State University Revenue Bond, (AMBAC Insured), 7.00%, 6/1/21 2,161
Auxiliary Facilities System (MBIA Insured), -------
5.50%, 12/1/23 1,059 11,099
1,480 Chicago Water Revenue Refunding Bond -------
(FGIC Insured), 4.125%, 11/1/13 1,379 KANSAS - 1.6%
Illinois State Development Financing Burlington City Environmental
Authority Economic Development Revenue Improvement Revenue Refunding Bond,
Bond, Latin School of Chicago Project Kansas City Power & Light Co. Project
350 5.60%, 8/1/18 351 2,000 Series D, 4.35%, Mandatory Put, 9/1/01 2,015
730 5.65%, 8/1/28 732 1,650 Series C, 4.50%, Mandatory Put, 9/1/03 1,666
1,000 Illinois State Development Financing -------
Authority PCR Revenue Refunding Bond, 3,681
Series B, Illinois Power Co. Project MASSACHUSETTS - 5.6% -------
(MBIA Insured), 5.40%, 3/1/28 1,012 Massachusetts Bay Transportation
500 Illinois State Educational Facilities Authority Authority Revenue Bond
Revenue Bond, Northwestern University, 2,000 Series B, 5.25%, 3/1/17 2,044
5.25%, Mandatory Put, 11/1/14 523 2,500 Series A (MBIA Insured),
1,250 Illinois State Educational Facilities Authority 4.50%, 3/1/26 2,275
Revenue Bonds, Series B, University of 3,000 Massachusetts Grant Anticipation Notes,
Chicago, 4.40%, Mandatory Put, 7/1/04 1,268 Series A, 5.50%, 6/15/14 3,192
1,000 Illinois Student Assistance Commission 1,000 Massachusetts State Health & Educational
Student Loan Revenue Bond, Series QQ, Facilities Authority Revenue Bonds, Series A,
3.75%, 9/1/02 991 Caritas Christi Obligation Group,
------- 5.625%, 7/1/20 992
24,562 2,000 Massachusetts State Turnpike Authority
------- Metropolitan Highway System Revenue Bond,
Series A (AMBAC Insured), 4.75%, 1/1/34 1,859
INDIANA - 4.9%
970 Hamilton County Public Building
Corporation First Mortgage G.O. Bond,
7.25%, 8/1/13 1,210
</TABLE>
See Notes to the Financial Statements.
- -----
72
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NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MASSACHUSETTS - 5.6% (CONT'D.) NEW YORK - 17.3% (CONT'D.)
$2,500 Massachusetts State Water Reserve Authority New York City G.O. Refunding Bond
Revenue Bond, Series A (FSA Insured), $1,500 Series A, 5.00%, 8/1/05 $ 1,563
4.75%, 8/1/27 $ 2,341 1,000 Series D, 5.75%, 8/1/07 1,090
-------- 6,000 Series F, 5.25%, 9/15/11 6,288
12,703 5,000 New York City Municipal Water Financing
-------- Authority Water and Sewer System
MICHIGAN - 0.9% Refunding Revenue Bond, Series A
2,000 University of Michigan Hospital Revenue (MBIA Insured), 5.50%, 6/15/23 5,156
Refunding Bond, Series A-1, 1,500 New York City Transitional Financing
5.25%, 12/1/09 2,117 Authority Future Tax Secured Revenue
-------- Bond, Series B, 4.50%, 11/15/27 1,355
1,250 New York State Dormitory Authority
MISSOURI - 1.1% Revenue Bond, Menorah Home (AMBAC
2,500 Missouri State Health and Educational and FHA Insured), 5.00%, 8/1/18 1,241
Facilities Revenue Bond, BJC Health Systems 5,000 New York State Dormitory Authority
(MBIA Insured), 5.00%, 5/15/38 2,417 Revenue Bond, Series B, State University
-------- Educational Facilities,
Prerefunded, 6.25%, 5/15/04 5,630
MONTANA - 0.1% 2,000 New York State Dormitory Authority
190 University of Montana Higher Education Revenue Bond, Series C, Mental Health
Revenue Bond, Series A (MBIA Insured), Services Facilities (MBIA Insured),
4.50%, 11/15/15 181 5.125%, 2/15/15 2,035
-------- 5,500 New York State Power Authority Revenue
Refunding Bond, Series A,
NEBRASKA - 1.3% 5.00%, 2/15/04 5,758
3,000 American Public Energy Agency Gas Supply 2,500 New York State Tollway Authority Highway
Revenue Bond, Series C, Public Gas Agency and Bridge Revenue Bond, Series A
Project (AMBAC Insured), 4.30%, 3/1/11 2,865 (FGIC Insured), 5.125%, 4/1/11 2,618
-------- 1,000 New York State Urban Development Corp.
Revenue Refunding Bond (Colld. by
NEVADA - 1.2% HUD 236), 5.50%, 7/1/16 1,040
580 Nevada State G.O. Refunding Bond, 1,475 Triborough Bridge & Tunnel Authority
Project 20-23A, Escrowed to Maturity, General Purpose Revenue Bond, Series SR,
7.20%, 7/16/06 596 5.00%, 1/1/07 1,539
2,000 Washoe County Airport Authority 1,750 Triborough Bridge & Tunnel Authority
Revenue Bond, Series A, Airport Systems Special Obligation Revenue Refunding Bond,
Improvement (MBIA Insured), Series A (MBIA Insured), 5.125%, 1/1/16 1,783
5.70%, 7/1/26 2,124 -------
-------- 39,414
2,720 -------
-------- NORTH CAROLINA - 5.0%
610 North Carolina State Eastern Municipal
NEW JERSEY - 0.9% Power Agency Revenue Refunding Bond,
2,000 New Jersey State Turnpike Authority Series A, Escrowed to Maturity,
Revenue Refunding Bond, Series A, 6.50%, 1/1/18 731
6.75%, 1/1/08 2,129 3,850 North Carolina State Eastern
-------- Municipal Power Agency Revenue
Refunding Bond, Series B, 7.00%, 1/1/08 4,390
NEW YORK - 17.3%
1,000 Long Island Power Authority Electric
System Revenue Bond, 5.00%, 4/1/02 1,029
1,250 Metropolitan Transportation Authority
Commuter Facilities Revenue Bond,
Series C-1 (FGIC Insured), 5.125%, 7/1/13 1,289
</TABLE>
See Notes to the Financial Statements.
-----
73
-----
<PAGE> 76
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NORTH CAROLINA - 5.0% (CONT'D.) SOUTH CAROLINA - 2.2%(CONT'D.)
$1,000 North Carolina State Medical Care $2,500 South Carolina State Public Service
Commission Hospital Revenue Bond, Authority Revenue Refunding Bond,
Gaston Health Care, 5.00%, 2/15/29 $ 949 Series A (MBIA Insured),
3,000 North Carolina State Medical Care 5.125%, 1/1/32 $ 2,459
Commission Hospital Revenue Bond --------
(MBIA Insured), 5.25%, 5/1/26 3,027 5,097
2,500 North Carolina State Medical Care --------
Commission Hospital Revenue Bond,
Series A, Pitt County Memorial Hospital TENNESSEE - 2.6%
(MBIA Insured), 4.75%, 12/1/28 2,331 1,500 Chattanooga Health, Educational & Housing
-------- Facility Board Revenue Refunding and
11,428 Hospital Improvement Bond, Siskin
-------- Hospital, 5.25%, 6/1/28 1,429
1,000 Metropolitan Government Nashville and
OHIO - 1.1% Davidson Counties Revenue Refunding
2,500 Scioto County Marine Terminal Revenue Bond, Prerefunded, 6.15%, 5/15/02 1,089
Refunding Bond, Norfolk Southern Corp. 1,500 Metropolitan Government Nashville and
Project, 5.30%, 8/15/13 2,519 Davidson Counties Water and Sewer
-------- Revenue Refunding Bond, Series A
(FGIC Insured), 4.75%, 1/1/22 1,428
OKLAHOMA - 1.8% 2,000 Tennessee State Energy Acquisition Corp.
1,380 McGee Creek Water Authority Revenue Gas Revenue Bond, Series B
Bond, Series 1992 (MBIA Insured), (AMBAC Insured), 4.50%, 9/1/08 2,014
6.00%, 1/1/13 1,562 --------
2,500 Oklahoma Development Finance Authority 5,960
Revenue Refunding Bond, Series A, --------
Hillcrest Healthcare System,
5.625%, 8/15/29 2,484 TEXAS - 4.8%
-------- 2,000 Brazos River Authority PCR Refunding
4,046 Bond, Series A, Texas Utility Electric Co.,
-------- 3.70%, 4/1/33 2,000
1,000 Brownsville Naval District Revenue
OREGON - 0.1% Refunding Bond, Union Carbide Corp.
230 Oregon State G.O. Bond, Series 66, Project, 5.10%, 1/1/12 996
10.50%, 6/1/02 276 1,010 Coastal Industrial Water Authority Revenue
-------- Bond, Prerefunded, 6.375%, 6/15/99 1,022
1,030 Colorado River Municipal Water District
Revenue Bond,
PENNSYLVANIA - 0.7% Prerefunded, 9.50%, 1/1/01 1,131
1,500 Southeastern Pennsylvania Transportation 2,000 Harris County Health Facilities
Authority Special Revenue Bond, Series A Development Corp. Revenue Bond,
(FGIC Insured), 5.25%, 3/1/18 1,535 Series A, Baylor College Medical Project
-------- (AMBAC Insured), 5.00%, 11/15/28 1,946
1,500 San Antonio Electric and Gas Revenue
SOUTH CAROLINA - 2.2% Refunding Bond, Series A, 4.50%, 2/1/21 1,382
500 Charleston Waterworks and Sewer Revenue 2,500 Texas State Water Development Board
Refunding and Capital Improvement Bond, Revenue Bond Revolving Fund, Series B,
5.125%, 1/1/15 518 Senior Lien, 5.00%, 7/15/19 2,466
2,115 Piedmont County Municipal Power Agency --------
Electric Revenue Refunding 10,943
Bond, Series A, 6.55%, 1/1/16 2,120 --------
</TABLE>
See Notes to the Financial Statements.
- -----
74
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<PAGE> 77
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL NUMBER
AMOUNT VALUE OF SHARES VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UTAH - 2.0% OTHER - 10.7%
Utah State Intermountain Power Agency
Power Supply Revenue Refunding Bond 17,370 AIM Tax Free Cash Reserve Fund $ 17,370
$2,000 Series B, 6.00%, 7/1/06 $ 2,222 7,063 Provident Municipal Fund 7,063
2,500 Series D, 5.00%, 7/1/21 2,412 ---------
---------
4,634 Total Other
--------- (cost $24,433) 24,433
---------
VIRGINIA - 1.2%
2,750 Charles City and County IDA Solid Waste Total Investments - 104.3%
Disposal Facility Revenue Bond, (cost $231,893) 237,742
Waste Management, Inc. Project,
4.875%, 2/1/09 2,728 Liabilities less Other Assets - (4.3)% (9,919)
--------- ---------
WASHINGTON - 1.7% NET ASSETS - 100.0% $ 227,823
1,000 Central Puget Sound Regional Transportation =========
Authority Sales Tax and Motor Revenue Bond
(FGIC Insured), 5.25%, 2/1/21 1,032
1,660 Seattle G.O. Bond, Series F,
5.25%, 12/15/18 1,693
1,000 Washington State Public Power Supply
Systems Revenue Refunding Bond, Series B,
Nuclear Project No. 3, 5.70%, 7/1/10 1,055
---------
3,780
---------
WISCONSIN - 2.3%
2,200 Menomonee Falls BAN,
4.10%, 12/1/99 2,200
1,000 Southeast Wisconsin Professional Baseball
Park District Sales TRB, Series A
(MBIA Insured), 5.50%, 12/15/19 1,067
2,000 Wisconsin State Health and Educational
Facilities Authority Revenue Bond,
Aurora Health Care, Inc., Series A,
5.60%, 2/15/29 1,972
---------
5,239
---------
Total Municipal Investments
(cost $207,460) 213,309
---------
</TABLE>
See Notes to the Financial Statements.
-----
75
-----
<PAGE> 78
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL INVESTMENTS - 97.9% CALIFORNIA - 91.9% (CONT'D)
$1,000 California State Public Works Board
CALIFORNIA - 91.9% Lease Revenue Refunding Bond, Series B,
ABAG Finance Authority Nonprofit Various Community Colleges Projects
Corporations Channing House COP (AMBAC Insured), 5.625%, 3/1/16 $1,065
$ 590 4.65%, 2/15/06 $ 586 California State Public Works Board Lease
780 4.90%, 2/15/09 780 Revenue Refunding Bond, Series C,
450 Anaheim PFA Lease Revenue Bond, Department of Corrections
Series C, Public Improvement Project 2,250 5.25%, 11/1/07 2,436
(FSA Insured), 6.00%, 9/1/09 515 3,275 5.25%, 11/1/08 3,547
250 Anaheim PFA Tax Allocation Revenue California Statewide Communities
Bond, Series A, Redevelopment Project Development Authority COP, Saint Joseph
(MBIA Insured), 5.25%, 2/1/18 257 Health System Obligation Group
1,000 California State Department of Transportation 200 5.00%, 7/1/03 208
Refunding COP, Series A (MBIA Insured), 3,335 5.00%, 7/1/05 3,486
5.25%, 3/1/16 1,034 1,000 California Statewide Communities
750 California State Department of Water Development Authority Revenue Refunding
Restoration CVP Water System Revenue Bond, Series A-2, Irvine Apartment
Bond, Series O, 4.75%, 12/1/16 740 Communities,
1,000 California State Educational Facilities 4.90%, Mandatory Put, 5/15/08 999
Authority Revenue Bond, Series A, 1,500 Contra Costa Transportation Authority
Pepperdine University, 5.00%, 11/1/29 976 Sales TRB, Series A (FGIC Insured),
California State G.O. Bond 5.50%, 3/1/02 1,565
150 6.60%, 2/1/10 178 400 Dry Creek Joint Elementary School District
1,250 5.25%, 10/1/10 1,343 G.O. Bond, Series A (FSA Insured),
2,000 California State Health Facilities Financing 0.00%, 8/1/09 254
Authority Revenue Bond, Northern California 2,000 East Bay Municipal Utility District Water
Presbyterian, 5.125%, 7/1/18 1,942 System Revenue Bond, 5.25%, 6/1/16 2,082
California State Health 150 Escondido Unified High School District
Facilities Financing G.O. Bond (MBIA Insured),
Authority Revenue Bond, Sutter Health 5.60%, 11/1/09 169
500 Series C (FSA Insured), 515 Fillmore Unified School District
5.00%, 8/15/17 498 G.O. Bond, Series A (FGIC Insured),
1,000 Series A (MBIA Insured), 0.00%, 7/1/10 310
5.35%, 8/15/28 1,029 200 Folsom School Facilities Projects
1,000 Series A (FSA Insured), G.O. Bond, Series D (FGIC Insured),
5.00%, 8/15/37 980 5.70%, 8/1/13 220
2,400 California State Pollution 295 Fontana Unified School District
Control Financing Authority G.O. Bond, Series D (FGIC Insured),
Revenue Refunding VRN, 0.00%, 5/1/02 287
Series A, Shell Oil Co. Project, 375 Foothill/Eastern Transportation Corridor
2.85%, 4/21/99 2,400 Agency Toll Road Senior Lien Revenue Bond,
3,545 California State Public Works Board Series A, 0.00%, 1/1/05 294
Lease Revenue Bond, Series A, Trustee of 1,160 Fremont Unified School District
California State University, Refunding G.O. Bond, Series A,
5.25%, 10/1/14 3,663 Alameda County (FGIC Insured),
2,000 California State Public Works Board 0.00%, 8/1/13 587
Lease Revenue Refunding Bond,
Series A, Various University Projects
(AMBAC Insured), Prerefunded,
6.25%, 12/1/02 2,223
</TABLE>
See Notes to the Financial Statements.
- -----
76
- -----
<PAGE> 79
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CALIFORNIA - 91.9% (CONT'D.)
$1,000 Galt Schools Joint Powers Authority CALIFORNIA - 91.9% (CONT'D.)
Revenue Refunding Bond, Series A, $ 720 MONROVIA UNIFIED School District G.O.
High School and Elementary School Bond, Series A (MBIA Insured),
Projects (MBIA Insured), 5.75%, 11/1/16 $1,090 0.00%, 8/1/10 $ 432
200 Imperial Irrigation District Refunding COP, 250 M-S-R Public Power Agency Revenue
Electrical System Project (MBIA Insured), Refunding Bond, Series G, San Juan Project
5.20%, 11/1/09 216 (MBIA Insured), 5.25%, 7/1/11 266
200 Lemoore Unified High School District G.O. 200 Oakland G.O. Bond, Measure I (FGIC Insured),
Bond (AMBAC Insured), 6.00%, 1/1/12 228 5.60%, 12/15/14 216
550 Los Angeles Convention and Exhibition 250 Paramount Unified School District G.O.
Center Authority Lease Revenue Refunding Bond, Series A (FSA Insured),
Bond, Series A (MBIA Insured), 5.125%, 9/1/19 253
6.125%, 8/15/11 634 1,500 Poway Unified School District Special Tax
1,000 Los Angeles County Metropolitan Community Facilities District No. 1 Bond
Transportation Authority Sales TRB, Series B (MBIA Insured), 4.875%, 10/1/17 1,483
(AMBAC Insured), 4.75%, 7/1/18 975 500 Redding Joint Powers Financing Authority
1,000 Los Angeles County Public Works Financing Electrical Systems Revenue Bond, Series A
Authority Revenue Bond, Series A, Regional (MBIA Insured), 5.25%, 6/1/15 519
Park and Open Spaces District Project, 500 Riverside County Transportation
5.50%, 10/1/10 1,089 Community Sales TRB, Series A
2,250 Los Angeles County Transition Sales TRB, (FGIC Insured), 6.00%, 6/1/05 558
Series A, Proposition C, Second Series 250 Riverside Sewer Revenue Refunding Bond
(MBIA Insured), 6.50%, 7/1/07 2,625 (FGIC Insured), 5.00%, 8/1/11 263
40 Los Angeles Harbor Department Revenue 300 Riverside Water Revenue Refunding Bond,
Bond, Escrowed to Maturity, 5.00%, 10/1/18 297
7.60%, 10/1/18 52 1,000 Sacramento Municipal Utility District
450 Los Angeles Unified School District G.O. Electric Revenue Refunding Bond,
Bond, Series A (FGIC Insured), Series L (AMBAC Insured),
6.00%, 7/1/15 512 5.20%, 7/1/16 1,031
2,000 Metropolitan Water District Southern 1,530 Salinas Sanitary Sewer Systems Revenue
California G.O. Refunding Bond, Series A, Bond (FGIC Insured), 5.00%, 8/1/20 1,522
5.25%, 3/1/13 2,120 1,000 San Diego County Regional Transportation
Metropolitan Water District Southern Sales TRB, Series A (AMBAC Insured),
State Waterworks Revenue Bond 6.00%, 4/1/06 1,122
300 Series C, 5.125%, 7/1/12 313 1,000 San Diego Water Utility Fund - Net System
1,000 Series A, 5.00%, 7/1/26 988 Revenue Bond Certificate (FGIC Insured),
2,000 Modesto Irrigation District Refunding COP, 5.375%, 8/1/10 1,086
Series B, Capital Improvements Projects, San Diego Public Facilities Financing
5.30%, 7/1/22 2,000 Authority Sewer Revenue Bond
1,500 Modesto Revenue COP, Water System (FGIC Insured)
Improvement Project (AMBAC Insured), 750 Series A, 5.125%, 5/15/11 796
Prerefunded, 6.25%, 10/1/01 1,629 450 Series B, 5.375%, 5/15/17 469
1,420 Modesto Revenue Refunding COP, Water 200 San Diego Unified School District COP,
Utility System Refining Project (FGIC Insured), Series A, Capital Projects, 5.00%, 7/1/00 204
5.125%, 10/1/17 1,445 200 San Diego Water Authority Revenue
Refunding COP, Series A,
5.00%, 5/1/16 202
</TABLE>
See Notes to the Financial Statements.
-----
77
-----
<PAGE> 80
SCHEDULES OF INVESTMENTS MARCH 31, 1999
CALIFORNIA TAX-EXEMPT FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CALIFORNIA - 91.9% (CONT'D.)
$1,000 San Francisco Bay Area Rapid Transit PUERTO RICO - 6.0% (CONT'D.)
District Sales Tax Revenue Refunding Bond, $1,000 Puerto Rico Commonwealth Public
5.25%, 7/1/17 $ 1,033 Improvement G.O. Bond,
2,150 San Jose Redevelopment Agency Tax Prerefunded, 6.80%, 7/1/02 $ 1,110
Allocation Bond, Merged Area Redevelopment -------
Project (AMBAC Insured), 4,632
4.75%, 8/1/29 2,041 -------
500 Santa Clara County Financing Authority
Lease Revenue Multiple Facilities Project Total Municipal Investments
Bond, Series A (AMBAC Insured), (cost $74,467) 75,651
4.40%, 5/15/10 503 -------
200 Santa Rosa Wastewater Revenue Refunding
Bond, Series A, Subregional Project NUMBER
(FGIC Insured), 4.75%, 9/1/16 197 OF SHARES
35 Santa Rosa Wastewater Revenue (000s)
Refunding Bond, Series A (FGIC ---------
Insured), 5.25%, 9/1/16 37 South OTHER - 0.6%
San Francisco Capital Improvement
Financing Authority Revenue Bond, 2 Federated California Municipal Cash
Series A, Redevelopment Projects Trust Money Market Fund 2
(ACA Insured) 471 Shearson Lehman Brothers Municipal Cash
485 3.85%, 9/1/02 483 Trust Money Market Fund 471
1,085 4.20%, 9/1/06 1,072 -------
1,370 4.25%, 9/1/07 1,346
1,000 University of California Revenue Refunding Total Other
Bond, Series E, Multiple Purpose Project (cost $473) 473
(MBIA Insured), 5.125%, 9/1/17 1,019 -------
-------
71,019 Total Investments - 98.5%
------- (cost $74,940) 76,124
PUERTO RICO - 6.0%
1,000 Puerto Rico Commonwealth Highway and Other Assets less Liabilities - 1.5% 1,125
Transportation Authority Revenue Bond, -------
Series A (AMBAC Insured),
5.00%, 7/1/28 995 NET ASSETS - 100.0% $77,249
1,000 Puerto Rico Commonwealth Infrastructure =======
Financing Authority Special TRB, Series A
(AMBAC Insured), 5.00%, 7/1/21 995
1,450 Puerto Rico Commonwealth Public
Improvement G.O. Bond,
5.25%, 7/1/10 1,532
</TABLE>
See Notes to the Financial Statements.
- -----
78
- -----
<PAGE> 81
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERNATIONAL FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT/ AMOUNT/
LOCAL LOCAL
CURRENCY VALUE CURRENCY VALUE
(000s) (000s) (000s) (000s)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DEBT OBLIGATIONS - 98.0%
AUSTRALIAN DOLLAR - 2.5% EURO - 48.0% (cont'd.)
490 Commonwealth of Australia, 380 Republic of Finland,
10.00%, 10/15/02 $ 359 5.50%, 2/9/01 $ 218
------- 1,291 Republic of Italy,
BRITISH POUND STERLING - 19.8% 8.50%, 4/1/04 1,706
125 Abbey National PLC, Treasury of the Netherlands
6.00%, 8/10/99 202 227 8.50%, 3/15/01 270
350 BAA PLC, 454 5.75%, 2/15/07 549
7.875%, 2/10/07 644 -------
375 Lloyds Bank PLC, 6,851
7.375%, 3/11/04 653 -------
Treasury of Great Britain JAPANESE YEN - 16.9%
325 7.50%, 12/7/06 620 55,000 Asian Development Bank,
300 8.00%, 6/7/21 711 5.00%, 2/5/03 540
------- 15,000 European Investment Bank,
2,830 5.875%, 11/26/99 131
------- 00,000 FNMA,
2.00%, 12/20/99 855
CANADIAN DOLLAR - 4.4% 80,000 International Bank for
500 Government of Canada, Reconstruction and Development,
7.50%, 12/1/03 364 4.50%, 3/20/03 783
375 Province of Ontario, 10,000 Japanese Development Bank,
7.25%, 9/27/05 270 6.50%, 9/20/01 97
------- -------
634 2,406
------- -------
SWEDISH KRONA - 1.6%
DANISH KRONE - 4.8% 1,500 Kingdom of Sweden,
3,850 Kingdom of Denmark, 10.25%, 5/5/03 229
8.00%, 3/15/06 689 -------
------- Total Investments
(cost $13,595) 13,998
EURO - 48.0% -------
450 Electric de France, Other Assets less Liabilities - 2.0% 287
3.75%, 10/28/03 491 -------
Federal Republic of Germany NET ASSETS - 100.0% $14,285
562 7.50%, 11/11/04 727 =======
601 6.25%, 1/4/24 764
343 Government of France,
5.50%, 4/25/07 408
Government of Spain
306 11.30%, 1/15/02 402
391 10.00%, 2/28/05 562
203 Kingdom of Belgium,
7.50%, 7/29/08 272
500 LKB Global Bond,
6.00%, 5/10/99 277
330 Republic of Austria,
8.00%, 1/30/02 205
</TABLE>
See Notes to the Financial Statements.
-----
79
-----
<PAGE> 82
SCHEDULES OF INVESTMENTS MARCH 31, 1999
HIGH YIELD MUNICIPAL FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL INVESTMENTS - 74.8%
LOUISIANA - 2.5%
ALASKA - 3.0% $250 St. Charles Parish PCR Refunding
$300 Alaska Industrial Development and Bonds, Union Carbide Corp. Project,
Export Authority Power Revenue 5.10%, 1/1/12 $247
Bonds (AMT), Upper Lynn Canal ----
Regional Power, 5.875%, 1/1/32 $300
---- MASSACHUSETTS - 4.0%
400 Massachusetts State Health &
ARIZONA - 6.4% Educational Facilities Authority Revenue
350 Apache County IDA PCR Bonds, Bonds, Series A, Caritas Christi
Series B, Tucson Electric Power Obligated Group, 5.625%, 7/1/20 397
Co. Project, 5.875%, 3/1/33 347 ----
300 Gilbert IDA Non-Profit Revenue Bonds,
Series A, Southwest Student Services, MICHIGAN - 5.0%
5.85%, 2/1/19 296 500 Michigan State Strategic Fund Limited
---- Obligation Revenue Bonds (AMT),
643 United Waste Systems Project
---- (Gtd. by Waste Management, Inc.),
5.20%, 4/1/10 500
DISTRICT OF COLUMBIA - 4.0% ----
400 District of Columbia Revenue Bonds,
Methodist Home Issue, NEVADA - 2.6%
6.00%, 1/1/20 401 260 Clark County PCR Refunding Bonds,
---- Series D, Nevada Power Co. Project,
5.45%, 10/1/23 257
FLORIDA - 1.4% ----
150 Miami Beach Health Facility Authority
Hospital Revenue Bonds, Mt. Sinai NEW JERSEY - 4.9%
Medical Center Project, 500 New Jersey Economic Development
5.375%, 11/15/28 145 Authority Revenue Bonds, Series A,
---- Leisure Park Project (Gtd. by Host
Marriott Corp.), 5.875%, 12/1/27 495
GEORGIA - 5.0% ----
500 Bibb County Development Authority
Multifamily Revenue Bonds, Series A, NEW YORK - 6.0%
Emerald Coast Housing II, Inc., 400 New York G.O. Bonds, Series H,
7.25%, 11/1/28 499 5.25%, 3/15/18 402
---- 200 New York State Urban Development
Corp. VRDN, P-Floats PT-210,
ILLINOIS - 7.8% 3.08%, 4/7/99 200
400 Chicago O'Hare International Airport ----
Special Facility Revenue Bonds, Series A, 602
United Air Lines, Inc. Project, ----
5.35%, 9/1/16 397
OHIO - 5.1%
400 Illinois Development Finance Authority 500 Ohio State Water Development Authority
Hospital Revenue Bonds, Adventist Health Solid Waste Disposal Revenue Bonds,
Systems/Sunbelt Obligation, Series A (AMT), Bay Shore Power Co.
5.50%, 11/15/29 387 Project, 5.875%, 9/1/20 509
---- ----
784
----
</TABLE>
See Notes to the Financial Statements.
- -----
80
- -----
<PAGE> 83
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
HIGH YIELD MUNICIPAL FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OKLAHOMA - 4.0% SHORT-TERM INVESTMENT - 33.5%
$400 Oklahoma Development Finance
Authority Revenue Refunding Bonds, $3,362 Federated Tax Free Trust Money Market
Series A, Hillcrest Healthcare Systems, Fund No. 15
5.625%, 8/15/29 $ 397 (cost $3,362) $ 3,362
------- --------
PENNSYLVANIA - 11.6% Total Investments - 108.3%
100 Beaver County IDA PCR Refunding Bonds, (cost $10,879) 10,868
Series A, Cleveland Electric Illuminating
Co., 7.75%, 7/15/25 114 Liabilities less Other Assets - (8.3)% (835
270 Delaware County Authority College -------
Revenue Bonds, Series B, Eastern College, NET ASSETS - 100.0% $10,033
5.50%, 10/1/24 263 =======
400 Pennsylvania Economic Development
Financing Authority Exempt Facility
Revenue Bonds, Series A (AMT),
National Gypsum Co., 6.25%, 11/1/27 400
400 Philadelphia Hospitals and Higher
Education Facilities Revenue Bonds,
Chestnut Hill College, 6.00%, 10/1/29 399
-------
1,176
-------
TEXAS - 1.5%
150 Houston Airport Systems Revenue Bonds,
Series B (AMT), Special Facilities,
Continental Airlines, Inc.,
6.125%, 7/15/27 154
------
Total Municipal Investments
(cost $7,517) 7,506
------
</TABLE>
See Notes to the Financial Statements.
-----
81
-----
<PAGE> 84
SCHEDULES OF INVESTMENTS MARCH 31, 1999
HIGH YIELD FIXED INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS - 81.0%
$ 750 HEALTH CARE - 3.7%
AIRLINES - 4.3% Columbia/HCA Healthcare Corp.
$ 750 Continental Airlines, Inc. Notes, MTN, 8.85%, 1/1/07 $ 743
8.00%, 12/15/05 $ 743 750 Dynacare, Inc. Senior Notes,
1,000 Northwest Airlines Corp. Pass -Through 10.75%, 1/15/06(1) 765
Certificates, Series 991C, ------
8.13%, 2/1/14 1,023 1,508
------ ------
1,766
------ HOME BUILDERS - 2.5%
1,000 Webb (Del E.) Corp. Senior
AUTO PARTS & EQUIPMENT - 2.5% Subordinated Debentures,
1,000 American Axle & Manufacturing, Inc., 10.25%, 2/15/10(1) 1,018
Senior Subordinated Notes, ------
9.75%, 3/1/09(1) 1,023
------ MACHINERY-CONSTRUCTION & MINING - 2.4%
1,000 Terex Corp. Senior Subordinated
FOOD & BEVERAGES - 8.6% Notes, 8.875%, 4/1/08(1) 980
1,500 Luigino's, Inc., Senior Subordinated Notes, ------
10.00%, 2/1/06(1) 1,500
500 National Wine & Spirits Holding Corp. MEDIA & CABLE - 10.0%
Senior Notes, 10.125%, 1/15/09(1) 515 1,000 Charter Communications Holdings, LLC
1,500 Triarc Consumer Products Group, LLC Senior Notes, 8.625%, 4/1/09(1) 1,023
Senior Subordinated Notes, 1,000 Echostar DBS Corp. Senior Notes,
10.25%, 2/15/09(1) 1,485 9.38%, 2/1/09(1) 1,039
------ 1,000 Emmis Communications Corp.
3,500 Senior Subordinated Notes,
------ 8.125%, 3/15/09(1) 1,008
1,000 Garden State Newspapers, Inc.
DIVERSIFIED FINANCIAL SERVICES - 8.4% Senior Subordinated Notes,
2,000 Advanta Corp. Medium Term FRN, 8.625%, 7/1/11(1) 1,005
5.40%, 7/23/01 1,727 ------
1,000 Green Tree Financial Corp. MTN, 4,075
6.50%, 9/26/02 940 ------
750 Willis Corroon Corp. Senior Subordinated
Notes, 9.00%, 2/1/09(1) 759 MISCELLANEOUS MANUFACTURING - 1.9%
------ 750 Hexcel Corp. Senior Subordinated
3,426 Notes, 9.75%, 1/15/09(1) 758
------ ------
ENTERTAINMENT - 2.3% PACKAGING - 1.2%
1,000 AMC Entertainment, Inc. Senior 500 Packaging Corp. of America
Subordinated Notes, Senior Subordinated Notes,
9.50%, 2/1/11(1) 951 9.625%, 4/1/09(1) 500
------ ------
PHARMACEUTICAL - 2.5%
GAMING - 2.6% 1,000 King Pharmaceutical, Inc.
1,000 Mohegan Tribal Gaming Authority Senior Subordinated Notes,
Senior Subordinated Notes, 10.75%, 2/15/09(1) 1,020
8.75%, 1/1/09(1) 1,041 ------
------
</TABLE>
See Notes to the Financial Statements.
- -----
82
- -----
<PAGE> 85
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
HIGH YIELD FIXED INCOME FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REAL ESTATE INVESTMENT TRUSTS - 9.3%
$2,000 Crescent Real Estate Equities, L.P. Notes, SHORT-TERM INVESTMENTS - 22.2%
7.00%, 9/15/02 $ 1,877
1,000 Host Marriott L.P. Senior Notes, $7,485 FHLB Discount Note,
8.375%, 2/15/06(1) 1,006 4.80%, 4/1/99 $ 7,485
1,000 Security Capital Industrial Trust 1,607 Societe Generale, Grand Cayman,
(Prologis Trust) MTN, Eurodollar Time Deposits,
7.81%, 2/1/15(1) 935 5.125%, 4/1/99 1,607
-------- -------
3,818 Total Short-Term Investments
-------- (cost $9,092) 9,092
-------
TELECOMMUNICATIONS - 18.8% Total Investments - 103.2%
1,500 Allegiance Telecom, Inc. Senior Notes, (cost $41,908) 42,176
12.88%, 5/15/08 1,665
1,750 Covad Communications Group, Inc. Liabilities less Other Assets - (3.2)% (1,312)
Senior Notes, 12.50%, 2/15/09(1) 1,759 -------
2,225 Focal Communications Corp. Senior NET ASSETS - 100.0% $40,864
Discount Notes, Series 1998 B, =======
12.125%, 2/15/08(2) 1 ,240
1,000 Hyperion Telecommunications, Inc.
Senior Notes, Series 1997 B,
12.25%, 9/01/04 1,085
1,000 Level 3 Communications, Inc. Senior
Notes, 9.125%, 5/1/08 1,008
1,000 Loral Space & Communications Ltd.
Senior Notes, 9.50%, 1/15/06(1) 943
--------
7,700
--------
Total Corporate Bonds
(cost $32,816) 33,084
--------
</TABLE>
(1) These private placement securities may require registration under the
Securities Act of 1933 or an exemption therefrom in order to effect sale in
the ordinary course of business. At March 31, 1999, the value of these
securities amounted to approximately $21,033,000 or 51.5% of net assets.
(2) Deferred interest rate note. Currently zero coupon under the terms of
agreement.
See Notes to the Financial Statements.
-----
83
-----
<PAGE> 86
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1999
EQUITY FUNDS
<TABLE>
<CAPTION>
INT'L. INT'L.
INCOME STOCK GROWTH SELECT MID CAP SMALL GROWTH SELECT TECH-
AMOUNTS IN THOUSANDS, EQUITY INDEX EQUITY EQUITY GROWTH CAP EQUITY EQUITY NOLOGY
EXCEPT PER SHARE DATA FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $102,003,
$133,952, $417,480, $135,778, $62,986,
$271,243, $193,187, $116,346
and $260,045, respectively) $114,988 $170,119 $638,768 $198,365 $78,148 $263,802 $212,643 $126,856 $350,842
Cash and foreign currencies 1 -- 15 -- -- 2 -- -- 1
Income receivable 485 164 445 90 2 172 571 228 55
Receivable for foreign tax withheld -- -- -- -- -- -- 272 118 --
Receivable for securities sold 3,024 -- 8,310 -- 1,971 1,058 8,558 3,024 286
Receivable for fund shares sold 43 213 670 162 130 73 125 22 1,896
Receivable from Adviser 3 12 5 2 4 2 3 9 --
Prepaid and other assets 15 10 27 16 11 23 17 14 18
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 118,559 170,518 648,240 198,635 80,266 265,132 222,189 130,271 353,098
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Overdraft -- 28 -- 1 1 -- 1,778 1,146 --
Payable for securities purchased -- 1,096 6,743 -- 2,847 38 4,257 444 9,182
Payable for fund shares redeemed 93 280 306 35 -- 562 246 1,103 109
Accrued investment advisory fees 17 11 90 27 10 37 35 20 55
Accrued administration fees 11 14 52 15 3 25 19 12 9
Accrued custody and accounting fees 6 3 61 6 5 9 12 10 4
Accrued transfer agent fees 2 3 10 3 1 4 4 2 5
Accrued registration fees and other liabilities 16 21 30 18 21 23 182 3,021 25
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 145 1,456 7,292 105 2,888 698 6,533 5,758 9,389
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 118,414 $169,062 $640,948 $198,530 $77,378 $264,434 $215,656 $124,513 $343,709
- ------------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Capital stock $ 104,914 $131,690 $386,725 $134,587 $66,529 $257,757 $174,002 $ 98,563 $209,587
Accumulated undistributed (distributions in
excess of) net investment income (loss) 2 7 -- -- -- 796 (1,270) 513 --
Accumulated undistributed net realized gains
(losses) on investments, futures and
foreign currency transactions 513 1,262 33,041 1,356 (4,313) 13,332 23,471 14,933 43,325
Net unrealized appreciation (depreciation)
on investments and futures contracts 12,985 36,103 221,182 62,587 15,162 (7,451) 19,456 10,510 90,797
Net unrealized losses on translation
of assets and liabilities denominated
in foreign currencies -- -- -- -- -- -- (3) (6) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 118,414 $169,062 $640,948 $198,530 $77,378 $264,434 $215,656 $124,513 $343,709
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING ($.0001 PAR VALUE,
UNLIMITED AUTHORIZATION) 9,299 9,750 29,219 8,510 6,600 21,470 17,160 9,590 11,462
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $ 12.73 $ 17.34 $ 21.94 $ 23.33 $ 11.72 $ 12.32 $ 12.57 $ 12.98 $ 29.99
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
- -----
84
- -----
<PAGE> 87
NORTHERN FUNDS Annual Report
STATEMENTS OF OPERATIONS YEAR ENDED MARCH 31, 1999
EQUITY FUNDS
<TABLE>
<CAPTION>
INT'L. INT'L.
INCOME STOCK GROWTH SELECT MID CAP SMALL GROWTH SELECT TECH-
EQUITY INDEX EQUITY EQUITY GROWTH CAP EQUITY EQUITY NOLOGY
AMOUNTS IN THOUSANDS FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ---------------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 1,961 $ 360 $ 883 $ 108 $ 113 $ 252 $ 558 $ 313 $ 334
Dividend income 3,267 1,658 4,877 1,144 40 3,688 2,892 1,630 299
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 5,228 2,018(1) 5,760(2) 1,252 153 3,940 3,450(3) 1,943(4) 633(5)
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 1,151 736 5,328 1,764 310 3,769 2,336 1,434 2,109
Administration fees 173 184 799 220 46 471 292 179 264
Transfer agent fees 115 123 533 147 31 314 195 120 176
Custody and accounting fees 61 123 143 72 44 141 257 183 79
Professional fees 19 20 26 20 40 24 20 21 19
Registration fees 17 27 25 20 28 18 15 12 31
Amortization of organization costs 9 -- 12 7 -- 10 11 10 --
Trustees' fees and expenses 5 5 12 5 3 9 6 5 5
Other 10 7 27 10 8 22 15 15 13
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 1,560 1,225 6,905 2,265 510 4,778 3,147 1,979 2,696
Less voluntary waivers of:
Investment advisory fees (173) (246) (799) (514) (46) (1,099) (390) (239) (351)
Administration fees (94) (106) (450) (126) (32) (246) (160) (96) (177)
Less reimbursement of expenses
by Adviser (142) (199) (328) (155) (122) (292) (164) (150) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Expenses 1,151 674 5,328 1,470 310 3,141 2,433 1,494 2,168
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 4,077 1,344 432 (218) (157) 799 1,017 449 (1,535)
- ------------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on:
Investments 1,489 640 48,694 1,356 (4,313) 17,524 30,947 26,975 47,533
Futures contracts -- 729 1,816 -- -- (707) -- -- --
Foreign currency transactions -- -- -- -- -- -- (122) (90) --
Net change in unrealized appreciation
(depreciation) on investments, options
and futures contracts (4,690) 19,161 72,564 38,865 15,162 (103,773) (6,660) (16,563) 71,473
Net change in unrealized losses on
translation of assets and liabilities
denominated in foreign currencies -- -- -- -- -- -- (596) (39) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (3,201) 20,530 123,074 40,221 10,849 (86,956) 23,569 10,283 119,006
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 876 $21,874 $123,506 $40,003 $10,692 $(86,157) $24,586 $10,732 $117,471
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net of $1 in non-reclaimable foreign withholding taxes.
(2) Net of $63 in non-reclaimable foreign withholding taxes.
(3) Net of $38 in non-reclaimable foreign withholding taxes.
(4) Net of $130 in non-reclaimable foreign withholding taxes.
(5) Net of $1 in non-reclaimable foreign withholding taxes.
See Notes to the Financial Statements.
-----
85
-----
<PAGE> 88
STATEMENTS OF CHANGES IN NET ASSETS
EQUITY FUNDS
<TABLE>
<CAPTION>
INCOME EQUITY STOCK INDEX GROWTH EQUITY SELECT EQUITY
FUND FUND FUND FUND
------------------- -------------------- -------------------- --------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
AMOUNTS IN THOUSANDS 1999 1998 1999 1998 1999 1998 1999 1998
- ------------------------------------ ------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 4,077 $ 3,397 $ 1,344 $ 707 $ 432 $ 718 $ (218) $ 142
Net realized gains (losses) on
investments, options, futures
contracts and foreign currency
transactions 1,489 9,548 1,369 2,831 50,510 47,640 1,356 18,422
Net change in unrealized appreciation
(depreciation) on investments, options,
futures contracts and forward foreign
currency contracts (4,690) 13,166 19,161 18,305 72,564 102,175 38,865 17,761
Net change in unrealized gains (losses)
on translation of assets and liabilities
denominated in foreign currencies -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 876 26,111 21,874 21,843 123,506 150,533 40,003 36,325
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 25,431 30,293 105,375 71,265 117,092 85,630 70,108 48,932
Shares from reinvestment of dividends 5,955 7,604 1,692 2,579 29,629 35,735 6,988 9,808
Shares redeemed (21,346) (12,408) (51,049) (34,323) (76,378) (55,984) (36,318) (20,167)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Capital Share
Transactions 10,040 25,489 56,018 39,521 70,343 65,381 40,778 38,573
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID:
From net investment income (4,229) (3,307) (1,359) (697) (524) (670) (93) (123)
From net realized gains (5,832) (7,833) (1,378) (2,600) (32,048) (38,067) (8,694) (11,916)
In excess of net investment income (3) -- -- -- (111) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (10,064) (11,140) (2,737) (3,297) (32,683) (38,737) (8,787) (12,039)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 852 40,460 75,155 58,067 161,166 177,177 71,994 62,859
NET ASSETS:
Beginning of year 117,562 77,102 93,907 35,840 479,782 302,605 126,536 63,677
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $118,414 $117,562 $169,062 $93,907 $640,948 $479,782 $198,530 $126,536
- ------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS
IN EXCESS OF) NET INVESTMENT
INCOME (LOSS) $ 2 $ 152 $ 7 $ 22 $ -- $ 92 $ -- $ 93
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced investment operations after the close of business on March 31,
1998.
See Notes to the Financial Statements.
- -----
86
- -----
<PAGE> 89
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
MID CAP INTERNATIONAL INTERNATIONAL
GROWTH SMALL CAP GROWTH EQUITY SELECT EQUITY TECHNOLOGY
FUND FUND FUND FUND FUND
- ------------- ----------------------- --------------------- ---------------------- ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999(1) 1999 1998 1999 1998 1999 1998 1999 1998
- ------------- ----------------------- --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <S> <C>
$ (157) $ 799 $ 803 $ 1,017 $ 1,385 $ 449 $ 330 $ (1,535) $ (722)
(4,313) 16,817 16,242 30,825 7,991 26,885 4,387 47,533 7,339
15,162 (103,773) 77,478 (6,660) 22,932 (16,563) 18,625 71,473 20,811
-- -- -- (596) 614 (39) 44 -- --
- ----------------------------------------------------------------------------------------------------------------------------
10,692 (86,157) 94,523 24,586 32,922 10,732 23,386 117,471 27,428
- ----------------------------------------------------------------------------------------------------------------------------
69,910 102,033 130,734 98,745 24,509 55,641 16,418 165,211 48,180
-- 10,643 13,475 7,328 4,704 4,765 402 4,863 4,409
(3,224) (118,770) (52,037) (83,624) (42,631) (58,089) (29,037) (42,504) (14,589)
- ----------------------------------------------------------------------------------------------------------------------------
66,686 (6,094) 92,172 22,449 (13,418) 2,317 (12,217) 127,570 38,000
- ----------------------------------------------------------------------------------------------------------------------------
-- (226) (825) -- (956) -- (1,655) -- --
-- (11,668) (14,404) (7,589) (4,582) (6,110) -- (5,721) (4,793)
-- -- -- (2,000) (1,648) (44) (840) -- --
- ----------------------------------------------------------------------------------------------------------------------------
-- (11,894) (15,229) (9,589) (7,186) (6,154) (2,495) (5,721) (4,793)
- ----------------------------------------------------------------------------------------------------------------------------
77,378 (104,145) 171,466 37,446 12,318 6,895 8,674 239,320 60,635
-- 368,579 197,113 178,210 165,892 117,618 108,944 104,389 43,754
- ----------------------------------------------------------------------------------------------------------------------------
$77,378 $264,434 $368,579 $215,656 $178,210 $124,513 $117,618 $343,709 $104,389
- ----------------------------------------------------------------------------------------------------------------------------
$ -- $ 796 $ 245 $ (1,695) $ (1,648) $ 513 $ (840) $ -- $ --
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
87
-----
<PAGE> 90
FINANCIAL HIGHLIGHTS
EQUITY FUNDS
<TABLE>
<CAPTION>
INCOME EQUITY
FUND
---------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995
- ------------------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF YEAR $ 13.81 $ 11.81 $ 11.59 $ 9.95 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.46 0.45 0.44 0.34 0.29
Net realized and unrealized gains (losses)
on investments, options, futures contracts
and foreign currency transactions (0.41) 3.02 1.19 1.66 (0.08)
- -------------------------------------------------------------------------------------------------------------------
Total Income from
Investment Operations 0.05 3.47 1.63 2.00 0.21
- -------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.48) (0.44) (0.44) (0.36) (0.26)
From net realized gains (0.65) (1.03) (0.97) -- --
- -------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (1.13) (1.47) (1.41) (0.36) (0.26)
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 12.73 $ 13.81 $ 11.81 $ 11.59 $ 9.95
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 0.67% 31.00% 14.42% 20.41% 2.21%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $118,414 $117,562 $77,102 $55,919 $38,954
Ratio to average net assets of(3):
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements 1.35% 1.37% 1.42% 1.48% 1.55%
Net investment income, net of
waivers and reimbursements 3.54% 3.53% 3.71% 3.17% 3.08%
Net investment income (loss), before
waivers and reimbursements 3.19% 3.16% 3.29% 2.69% 2.53%
Portfolio Turnover Rate 79.95% 81.24% 72.04% 67.32% 45.68%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period October 7, 1996 (commencement of operations) through March
31, 1997.
(2) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions and a complete redemption of
the investment at net asset value at the end of the year. Total return is
not annualized for periods less than one year.
(3) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
88
- -----
<PAGE> 91
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
STOCK INDEX FUND GROWTH EQUITY FUND
----------------------------------------------- -----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997(1) 1999 1998 1997 1996 1995
----------------------------------------------- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 15.03 $ 10.74 $ 10.00 $ 18.62 $ 13.93 $ 13.15 $ 10.61 $ 10.00
0.16 0.15 0.08 0.02 0.03 0.08 0.08 0.08
2.49 4.80 0.74 4.51 6.36 1.49 2.59 0.60
- ---------------------------------------------------------------------------------------------------------------------------
2.65 4.95 0.82 4.53 6.39 1.57 2.67 0.68
- ---------------------------------------------------------------------------------------------------------------------------
(0.17) (0.15) (0.07) (0.02) (0.03) (0.08) (0.08) (0.07)
(0.17) (0.51) (0.01) (1.19) (1.67) (0.71) (0.05) --
- ---------------------------------------------------------------------------------------------------------------------------
(0.34) (0.66) (0.08) (1.21) (1.70) (0.79) (0.13) (0.07)
- ---------------------------------------------------------------------------------------------------------------------------
$ 17.34 $ 15.03 $ 10.74 $ 21.94 $ 18.62 $ 13.93 $ 13.15 $ 10.61
- ---------------------------------------------------------------------------------------------------------------------------
17.78% 47.11% 8.21% 24.72% 48.06% 11.72% 25.13% 6.90%
$169,062 $93,907 $35,840 $640,948 $479,782 $302,605 $224,571 $113,185
0.55% 0.55% 0.55% 1.00% 1.00% 1.00% 1.00% 1.00%
1.00% 1.18% 2.23% 1.30% 1.30% 1.33% 1.36% 1.40%
1.10% 1.23% 1.92% 0.08% 0.18% 0.56% 0.70% 0.86%
0.65% 0.60% 0.24% (0.22)% (0.12)% 0.23% 0.34% 0.46%
2.46% 32.06% 64.94% 49.67% 73.85% 67.34% 73.20% 82.90%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
89
-----
<PAGE> 92
FINANCIAL HIGHLIGHTS (CONTINUED)
EQUITY FUNDS
<TABLE>
<CAPTION>
MID CAP
SELECT EQUITY GROWTH
FUND FUND
--------------------------------------------------------------- ----------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(1) 1999(2)
- ------------------------------- --------------------------------------------------------------- ----------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 19.16 $ 14.55 $ 13.12 $ 10.77 $ 10.00 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) -- 0.02 0.02 0.02 0.06 --
Net realized and unrealized gains (losses)
on investments, options, futures contracts
and foreign currency transactions 5.40 6.81 2.05 2.73 0.75 1.72
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from
Investment Operations 5.40 6.83 2.07 2.75 0.81 1.72
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income (0.01) (0.02) (0.02) (0.03) (0.04) --
From net realized gains (1.22) (2.20) (0.62) (0.37) -- --
In excess of net investment income -- -- -- -- -- --
In excess of accumulated net realized gains
on investment transactions -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (1.23) (2.22) (0.64) (0.40) (0.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 23.33 $ 19.16 $ 14.55 $ 13.12 $ 10.77 $ 11.72
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 28.79% 49.71% 15.64% 25.70% 8.18% 17.19%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $198,530 $126,536 $63,677 $33,842 $15,123 $77,378
Ratio to average net assets of(4):
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements 1.54% 1.58% 1.67% 1.91% 2.61% 1.65%
Net investment income (loss), net of
waivers and reimbursements (0.15)% 0.15% 0.21% 0.22% 0.82% (0.51)%
Net investment income (loss), before
waivers and reimbursements (0.69)% (0.43)% (0.46)% (0.69)% (0.79)% (1.16)%
Portfolio Turnover Rate 87.73% 148.55% 72.68% 137.99% 48.88% 173.39%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 6, 1994 (commencement of operations) through March 31,
1995.
(2) Commenced investment operations after the close of business on March 31,
1998.
(3) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions and a complete redemption of
the investment at net asset value at the end of the year. Total return is
not annualized for periods less than one year.
(4) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
90
- -----
<PAGE> 93
NORTHERN FUNDS Annual Report
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL CAP GROWTH EQUITY
FUND FUND
- ----------------------------------------------------------------- ----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
- ----------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 16.76 $ 12.31 $ 11.58 $ 9.98 $ 10.00 $ 11.66 $ 10.05 $ 10.23 $ 9.61 $ 10.00
0.04 0.03 0.07 0.05 0.11 0.13 0.09 0.09 0.17 0.04
(3.93) 5.14 1.37 2.29 (0.05) 1.36 1.98 0.18 0.65 (0.31)
- -------------------------------------------------------------------------------------------------------------------------------
(3.89) 5.17 1.44 2.34 0.06 1.49 2.07 0.27 0.82 (0.27)
- -------------------------------------------------------------------------------------------------------------------------------
(0.01) (0.04) (0.06) (0.07) (0.08) -- (0.07) (0.09) (0.11) (0.03)
(0.54) (0.68) (0.65) (0.67) -- (0.46) (0.29) (0.23) -- --
-- -- -- -- -- (0.12) (0.10) -- (0.09) --
-- -- -- -- -- -- -- (0.13) -- (0.09)
- -------------------------------------------------------------------------------------------------------------------------------
(0.55) (0.72) (0.71) (0.74) (0.08) (0.58) (0.46) (0.45) (0.20) (0.12)
- -------------------------------------------------------------------------------------------------------------------------------
$ 12.32 $ 16.76 $ 12.31 $ 11.58 $ 9.98 $ 12.57 $ 11.66 $ 10.05 $ 10.23 $ 9.61
- -------------------------------------------------------------------------------------------------------------------------------
(23.46)% 42.71% 12.48% 24.09% 0.57% 13.04% 21.34% 2.61% 8.61% (2.65)%
$264,434 $368,579 $197,113 $155,238 $76,627 $215,656 $178,210 $165,892 $181,237 $114,673
1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25%
1.52% 1.53% 1.54% 1.61% 1.76% 1.62% 1.62% 1.63% 1.65% 1.71%
0.25% 0.28% 0.54% 0.65% 1.36% 0.52% 0.79% 0.78% 0.92% 0.47%
(0.27)% (0.25)% 0.00% 0.04% 0.60% 0.15% 0.42% 0.40% 0.52% 0.01%
18.74% 18.59% 18.92% 46.59% 82.46% 177.89% 145.02% 190.94% 216.86% 158.31%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----
91
-----
<PAGE> 94
FINANCIAL HIGHLIGHTS (CONTINUED)
EQUITY FUNDS
<TABLE>
<CAPTION>
INTERNATIONAL
SELECT EQUITY
FUND
----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997 1996 1995(1)
- -------------------------------- ----------------------------------------------------------------------
SELECTED PER SHARE DATA
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 12.52 $ 10.37 $ 10.73 $ 9.78 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.04 0.22 0.04 0.01 0.04
Net realized and unrealized gains (losses)
on investments, options, futures contracts
and foreign currency transactions 1.08 2.19 (0.25) 0.99 (0.23)
- -------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from
Investment Operations 1.12 2.41 (0.21) 1.00 (0.19)
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS PAID:
From net investment income -- (0.16) (0.03) (0.02) (0.03)
From net realized gains (0.65) -- -- -- --
In excess of net investment income (0.01) (0.10) (0.04) (0.03) --
In excess of accumulated net realized gains
on investment transactions -- -- (0.08) -- --
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid (0.66) (0.26) (0.15) (0.05) (0.03)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 12.98 $ 12.52 $ 10.37 $ 10.73 $ 9.78
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 9.16% 23.74% (1.95)% 10.20% (1.95)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of year $124,513 $117,618 $108,944 $102,719 $71,958
Ratio to average net assets of(4):
Expenses, net of waivers and
reimbursements 1.25% 1.25% 1.25% 1.25% 1.25%
Expenses, before waivers and
reimbursements 1.66% 1.64% 1.66% 1.71% 1.75%
Net investment income (loss), net of
waivers and reimbursements 0.38% 0.29% 0.47% 0.12% 0.47%
Net investment income (loss), before
waivers and reimbursements (0.03)% (0.10)% 0.06% (0.34)% (0.03)%
Portfolio Turnover Rate 168.19% 98.22% 97.60% 176.71% 97.69%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period April 5, 1994 (commencement of operations) through March 31,
1995.
(2) Commenced investment operations on April 1, 1996.
(3) Assumes investment at net asset value at the beginning of the year,
reinvestment of all dividends and distributions and a complete redemption of
the investment at net asset value at the end of the year. Total return is
not annualized for periods less than one year.
(4) Annualized for periods less than a full year.
See Notes to the Financial Statements.
- -----
92
- -----
<PAGE> 95
Northern Funds Annual Report
TECHNOLOGY
FUND
--------------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
MAR. 31, MAR. 31, MAR. 31,
1999 1998 1997(2)
--------------------------------------
$ 17.11 $ 11.95 $ 10.00
-- -- --
13.55 6.06 2.10
--------------------------------------
13.55 6.06 2.10
--------------------------------------
-- -- --
(0.67) (0.90) (0.15)
-- -- --
-- -- --
--------------------------------------
(0.67) (0.90) (0.15)
--------------------------------------
$ 29.99 $ 17.11 $ 11.95
--------------------------------------
79.97% 52.62% 20.82%
$343,709 $104,389 $43,754
1.23% 1.25% 1.25%
1.53% 1.59% 2.02%
(0.87)% (0.96)% (0.75)%
(1.17)% (1.30)% (1.52)%
61.01% 74.75% 67.89%
--------------------------------------
-----
93
-----
<PAGE> 96
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INCOME EQUITY FUND
<TABLE>
<CAPTION>
NUMBER VALUE NUMBER VALUE
OF SHARES (000s) OF SHARES (000s)
- ------------------------------------------------------------------------------------------------------------------ -----------
<S> <C> <C> <C> <C>
CONVERTIBLE PREFERRED MACHINERY-DIVERSIFIED - 2.2%
STOCKS - 45.2% 102,000 Ingersoll-Rand Co. PRIDES $ 2,576
--------
ADVERTISING - 0.8% MEDIA - 7.7%
38,000 Snyder STRYPES Trust $ 990 43,500 MediaOne Group, Inc. PIES 3,600
------- 18,500 MediaOne Group, Inc., Series D 2,378
BANKS - 1.6% 68,000 Readers Digest Association, Inc. 2,049
60,000 National Australia Bank 1,879 39,000 Tribune Co. 1,072
------- --------
9,099
BIOTECHNOLOGY - 1.3% --------
32,000 Monsanto Co. 1,488 OIL & GAS PRODUCERS - 1.9%
------- 42,000 Unocal Capital Trust 2,257
COSMETICS/PERSONAL CARE - 2.3% --------
14,000 Estee Lauder Trust I TRACES 1,169
17,000 Estee Lauder Trust II TRACES 1,535
------- REITS - 2.0%
2,704 37,000 Innkeepers U.S.A. Trust, Series A 606
------- 36,500 Prologis Trust, Series B 928
44,000 U.S. Restaurant Properties, Inc., Series A 819
DIVERSIFIED FINANCIAL SERVICES - 5.4% --------
22,000 Finova Finance Trust 1,584 2,353
19,400 Salomon Smith Barney Holdings, Inc. 1,339 --------
23,100 St. Paul Capital LLC MIPS 1,334 RETAIL - 5.8%
66,000 WBK STRYPES Trust 2,252 24,000 CVS Auto Co. TRACES 2,052
------- 39,000 Kmart Financing I 2,360
6,509 40,000 Wendy's Financing I, Series A TECONS 2,410
------- --------
6,822
ELECTRIC - 4.9% --------
34,000 Houston Industries, Inc. 4,097
32,000 Texas Utilities Co. PRIDES 1,706 TELECOMMUNICATION EQUIPMENT - 1.7%
------- 22,000 Qualcomm, Inc. 1,965
5,803 --------
-------
ENERGY-ALTERNATE SOURCES - 0.8% TRANSPORTATION - 1.0%
20,000 CalEnergy Capital Trust II 920 24,000 Union Pacific Capital Trust 1,197
------- --------
FOREST PRODUCTS & PAPER - 1.4% Total Convertible Preferred Stocks
36,000 International Paper Capital Trust 1,706 (cost $45,787) 53,506
------- --------
HOME BUILDERS - 0.6% Principal
90,000 Kaufman & Broad Home Corp. PRIDES 720 Amount
------- (000s)
HOUSEWARES - 0.9% ---------
20,000 Newell Financial Trust I(1) 1,105 CONVERTIBLE BONDS - 27.0%
-------
INSURANCE - 1.8% ADVERTISING - 0.9%
81,000 Lincoln National Corp. PRIDES 2,147 $750 Omnicom Group, Inc.,
------- 2.25%, 1/6/13 1,110
--------
MACHINERY-CONSTRUCTION & MINING - 1.1%
32,000 Conseco Finance Trust IV,
Series F PRIDES 1,266
-------
</TABLE>
See Notes to the Financial Statements
- -----
94
- -----
<PAGE> 97
NORTHERN FUNDS ANNUAL REPORT
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INCOME EQUITY FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
(000s) (000s) (000s) (000s)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUTO PARTS & EQUIPMENT - 0.8% OIL & GAS PRODUCERS - 3.8%
$1,000 Magna International, Inc., $1,500 Diamond Offshore Drilling, Inc.,
4.875%, 2/15/05 $1,004 3.125%, 9/15/07 $ 1,560
------ 3,000 PennzEnergy Co.,
BIOTECHNOLOGY - 1.0% 4.95%, 8/15/08 2,985
1,200 Chiron Corp., --------
1.90%, 11/17/00(1) 1,161 4,545
------ --------
COMMERCIAL SERVICES - 1.2% PHARMACEUTICALS - 2.6%
500 Cendant Corp., 2,500 Athena Neurosciences, Inc.,
3.00%, 2/15/02 452 4.75%, 11/15/04 3,044
1,300 Checkpoint Systems, Inc., --------
5.25%, 11/1/05(1) 957 RETAIL - 3.7%
------ 1,600 Home Depot (The), Inc.,
1,409 3.25%, 10/1/01 4,436
------ --------
COMPUTERS - 1.1% SOFTWARE - 1.0%
1,500 Data General Corp., 1,250 Learning (The) Co., Inc.,
6.00%, 5/15/04 1,267 5.50%, 11/1/00(1) 1,183
------ --------
ELECTRIC - 0.6% Total Convertible Bonds
800 Thermo Electron Corp., (cost $31,296) 32,012
4.25%, 1/1/03 710 --------
------ NUMBER
ELECTRONICS - 1.1% OF SHARES
1,600 Thermo Instrument System, Inc., ---------
4.00%, 1/15/05 1,304 COMMON STOCKS - 19.0%
------
ENVIRONMENTAL CONTROL - 3.0% AUTO MANUFACTURERS - 0.3%
3,000 Waste Management, Inc., 7,000 Ford Motor Co. 397
4.00%, 2/1/02 3,521 -------
------ BANKS - 1.1%
HEALTH CARE - 1.7% 19,000 BankAmerica Corp. 1,342
1,750 ALZA Corp., -------
5.00%, 5/1/06 2,030 BIOTECHNOLOGY - 0.6%
------ 34,000 Chiron Corp. 746
LODGING - 1.3% -------
1,700 Hilton Hotels Corp., BREWERY - 0.5%
5.00%, 5/15/06 1,594 8,000 Anheuser-Busch Cos., Inc. 610
------ -------
MEDIA - 1.6% BUILDING MATERIALS - 0.3%
1,500 Clear Channel Communications, Inc., 12,000 Masco Corp. 339
2.58%, 4/1/03 1,858 -------
------ COMPUTERS - 0.9%
MISCELLANEOUS MANUFACTURING - 1.6% 10,000 Hewlett-Packard Co. 678
2,400 Mascotech, Inc., 14,000 Seagate Technology, Inc. 414
4.50%, 12/15/03 1,836 -------
------ 1,092
-------
</TABLE>
See Notes to the Financial Statements.
-----
95
-----
<PAGE> 98
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INCOME EQUITY FUND (CONTINUED)
<TABLE>
<CAPTION>
NUMBER VALUE NUMBER VALUE
OF SHARES (000s) OF SHARES (000s)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ELECTRIC - 1.1% TOBACCO - 0.7%
10,000 Allegheny Energy, Inc. $ 295 22,000 Philip Morris Cos., Inc. $ 774
8,000 DQE, Inc. 307 --------
20,000 Texas Utilities Co. 834
-------- Total Common Stocks
1,436 (cost $17,947) 22,497
-------- --------
ELECTRONICS - 0.8%
19,000 Solectron Corp. 923 PRINCIPAL
-------- AMOUNT
(000s)
HEALTH CARE - 0.5% --------
6,000 Johnson & Johnson 562
--------
SHORT-TERM INVESTMENTS - 5.9%
INSURANCE - 1.9%
17,000 Aetna, Inc. 1,411 $2,231 FHLB Discount Note,
12,000 American General Corp. 846 4.80%, 4/1/99 2,231
-------- 4,742 Societe Generale, Grand Cayman,
2,257 Eurodollar Time Deposits,
-------- 5.125%, 4/1/99 4,742
--------
MEDIA - 0.4% Total Short-Term Investments
14,000 Disney (The Walt) Co. 436 (cost $6,973) 6,973
-------- --------
TOTAL INVESTMENTS - 97.1%
MINING - 0.4% (cost $102,003) 114,988
15,000 Barrick Gold Corp. 256
24,000 Homestake Mining Co. 207 Other Assets less Liabilities - 2.9% 3,426
-------- --------
463
-------- NET ASSETS - 100.0% $118,414
========
OIL & GAS SERVICES - 0.3%
5,500 Schlumberger Ltd. 331
--------
PHARMACEUTICALS - 0.6%
13,000 Schering-Plough Corp. 719
--------
PIPLINES - 2.0%
36,000 Enron Corp. 2,313
--------
RETAIL - 0.9%
31,000 TJX Cos., Inc. 1,054
--------
SOFTWARE - 0.6%
17,000 Automatic Data Processing, 703
--------
TELEPHONE - 5.1%
47,667 AT&T Corp. 3,804
10,500 MCI WorldCom, Inc. 930
23,000 U.S. West, Inc. 1,266
--------
6,000
--------
</TABLE>
(1) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1999, the value of these securities amounted to approximately $4,406,000 or
3.7% of net assets.
See Notes to the Financial Statements.
- -----
96
- -----
<PAGE> 99
NORTHERN FUNDS Annual Report
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND
<TABLE>
<CAPTION>
NUMBER VALUE NUMBER VALUE
OF SHARES (000s) OF SHARES (000s)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS - 95.2%
BANKS - 6.5%
ADVERTISING - 0.2% 1,800 AmSouth Bancorp. $ 82
2,150 Interpublic Group of Cos., Inc. $ 167 18,062 Bank One Corp. 995
2,600 Omnicom Group, Inc. 208 11,700 Bank of New York Co., Inc. 420
------- 26,584 BankAmerica Corp. 1,877
375 4,500 BankBoston Corp. 195
------- 1,500 Bankers Trust Corp. 132
4,800 BB&T Corp. 174
AEROSPACE - 1.3% 13,000 Chase Manhattan Corp. 1,057
8,500 AlliedSignal, Inc. 418 2,350 Comerica, Inc. 147
14,352 Boeing (The) Co. 490 4,075 Fifth Third Bancorp 269
1,900 General Dynamics Corp. 122 15,202 First Union Corp. 812
1,100 Goodrich (B.F.) Co. 38 3,500 Firstar Corp. 313
6,000 Lockheed Martin Corp.* 226 8,700 Fleet Financial Group, Inc. 327
1,100 Northrop Grumman Corp. 66 3,230 Huntington Bancshares, Inc. 100
5,200 Raytheon Co. 305 7,000 KeyCorp 212
3,500 United Technologies Corp. 474 4,000 Mellon Bank Corp. 282
------- 2,400 Mercantile Bancorp., Inc. 114
2,139 2,700 Morgan (J.P.) & Co., Inc. 333
------- 5,000 National City Corp. 332
4,600 PNC Bank Corp. 256
AIRLINES - 0.3% 3,400 Regions Financial Corp. 118
2,800 AMR Corp. 164 1,600 Republic New York Corp. 74
2,200 Delta Air Lines, Inc. 153 2,500 SouthTrust Corp. 93
5,150 Southwest Airlines Co. 156 2,500 State Street Corp. 205
1,300 US Airways Group, Inc.* 63 2,700 Summit Bancorp 105
------- 4,900 SunTrust Banks, Inc. 305
536 4,050 Synovus Financial Corp. 83
------- 11,165 U.S. Bancorp 380
2,100 Union Planters Corp. 92
APPAREL - 0.2% 3,100 Wachovia Corp. 252
1,100 Fruit of the Loom, Inc., Class A* 11 25,200 Wells Fargo & Co. 884
1,000 Liz Claiborne, Inc. 33 --------
4,300 Nike, Inc., Class B 248 11,020
900 Reebok International Ltd.* 14 --------
500 Russell Corp. 10
1,800 VF Corp. 85 BEVERAGES - 2.4%
------- 7,300 Anheuser-Busch Cos., Inc. 556
401 1,100 Brown-Forman Corp., Class B 63
------- 37,800 Coca-Cola (The) Co. 2,320
6,000 Coca-Cola Enterprises Inc. 182
AUTO MANUFACTURERS - 1.2% 600 Coors (Adolph) Co., Class B 32
18,600 Ford Motor Co. 1,056 22,500 PepsiCo, Inc. 882
10,000 General Motors Corp. 869 --------
1,000 Navistar International Corp. 40 4,035
1,200 PACCAR, Inc. 49 --------
-------
2,014 BIOTECHNOLOGY - 0.7%
------- 7,800 Amgen, Inc.* 584
9,600 Monsanto Co. 441
AUTO PARTS & EQUIPMENT - 0.2% 3,700 Pioneer Hi-Bred International, Inc. 139
1,100 Cooper Tire & Rubber Co. 20 --------
2,500 Dana Corp. 95 1,164
2,400 Goodyear (The) Tire & Rubber Co. 120 --------
1,800 TRW, Inc. 82
-------
317
-------
</TABLE>
See Notes to the Financial Statements.
------
97
------
<PAGE> 100
SCHEDULES OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
<TABLE>
<CAPTION>
NUMBER VALUE NUMBER VALUE
OF SHARES (000s) OF SHARES (000s)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BUILDING MATERIALS - 0.1% COMPUTERS - 7.0% (CONT'D.)
600 Armstrong World Industries, Inc. $ 27 39,000 Dell Computer Corp.* $ 1,594
5,200 Masco Corp. 147 7,600 Electronic Data Systems Corp. 370
800 Owens Corning 25 7,700 EMC Corp.* 984
-------- 2,400 Gateway 2000, Inc.* 165
199 15,600 Hewlett-Packard Co. 1,058
-------- 14,200 International Business Machines Corp. 2,517
3,700 Seagate Technology, Inc.* 109
CHEMICALS - 1.2% 2,800 Silicon Graphics, Inc.* 47
3,500 Air Products and Chemicals, Inc. 120 5,900 Sun Microsystems, Inc.* 737
3,400 Dow Chemical Co. 317 4,000 Unisys Corp.* 111
17,300 du Pont (E.I.) de Nemours & Co. 1,004 --------
1,200 Eastman Chemical Co. 50 11,880
2,200 Engelhard Corp. 37 --------
900 Great Lakes Chemical Corp. 33
1,500 Hercules, Inc. 38 COSMETICS/PERSONAL CARE - 2.4%
1,900 Morton International, Inc. 70 900 Alberto-Culver Co., Class B 21
1,000 Nalco Chemical Co. 27 4,000 Avon Products, Inc. 188
2,400 Praxair, Inc. 87 4,500 Colgate-Palmolive Co. 414
2,600 Rohm & Haas Co. 87 17,000 Gillette Co. 1,010
2,600 Sherwin-Williams Co. 73 1,600 International Flavors & Fragrances, Inc. 60
1,500 Sigma-Aldrich Corp. 44 8,300 Kimberly-Clark Corp. 398
2,000 Union Carbide Corp. 90 20,400 Procter & Gamble Co. 1,998
1,100 W.R. Grace & Co. 13 ---------
-------- 4,089
2,090 ---------
--------
DISTRIBUTION/WHOLESALE - 0.1%
COMMERCIAL SERVICES - 0.6% 2,750 Genuine Parts Co. 79
1,500 Block (H&R), Inc. 71 ---------
13,064 Cendant Corp.* 206 DIVERSIFIED FINANCIAL SERVICES - 5.1%
1,200 Deluxe Corp. 35 6,900 American Express Co. 811
2,500 Dun & Bradstreet (The) Corp. 89 11,156 Associates First Capital Corp. 502
2,000 Ecolab, Inc. 71 1,680 Bear (The) Stearns Cos. Inc. 75
2,300 Equifax, Inc. 79 1,000 Capital One Financial Corp. 151
4,268 McKesson HBOC, Inc. 282 34,605 Citigroup Inc. 2,210
2,500 Paychex, Inc. 119 1,700 Countrywide Credit Industries, Inc. 64
4,100 Service Corp. International 58 15,900 Fannie Mae 1,101
-------- Franklin Resources, Inc. 110
1,010 3,900 Freddie Mac 594
-------- Household International, Inc. 340
10,400 Lehman Brothers Holdings, Inc. 102
COMPUTERS - 7.0% 7,446 MBNA Corp. 293
5,500 3Com Corp.* 128 1,700 Merrill Lynch & Co., Inc. 478
2,100 Apple Computer, Inc.* 75 12,262 Morgan Stanley, Dean Witter & Co. 884
3,300 Ascend Communications, Inc.* 276 5,400 Providian Corp. 242
2,600 Cabletron Systems, Inc.* 21 8,850 Schwab (Charles) Corp. 591
2,200 Ceridian Corp.* 80 2,200 SLM Holding Corp. 104
24,175 Cisco Systems, Inc.* 2,649 6,150 ---------
25,846 Compaq Computer Corp.* 819 2,500 8,652
2,400 Computer Sciences Corp.* 132 ---------
800 Data General Corp.* 8
</TABLE>
See Notes to the Financial Statements.
- -----
98
- -----
<PAGE> 101
NORTHERN FUNDS Annual Report
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
<TABLE>
<CAPTION>
NUMBER VALUE NUMBER VALUE
OF SHARES (000s) OF SHARES (000s)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ELECTRIC - 1.9% ENGINEERING & CONSTRUCTION - 0.0%
2,800 AES Corp. $ 104 1,200 Fluor Corp. $ 32
2,100 Ameren Corp. 76 600 Foster Wheeler Corp. 7
2,900 American Electric Power Co. 115 ------
2,300 Baltimore Gas & Electric Co. 58 39
2,300 Carolina Power & Light Co. 87 ------
3,300 Central & South West Corp. 77 ENTERTAINMENT - 0.1%
2,400 Cinergy Corp. 66 1,900 Harrah's Entertainment, Inc.* 36
3,600 Consolidated Edison, Inc. 163 2,700 Mirage Resorts, Inc.* 57
3,000 Dominion Resources, Inc. 111 ------
2,200 DTE Energy Co. 85 93
5,544 Duke Power Co. 303 ------
5,400 Edison International 120 ENVIRONMENTAL CONTROL - 0.3%
3,800 Entergy Corp. 105 2,400 Browning-Ferris Industries, Inc. 93
3,600 FirstEnergy Corp. 101 9,149 Waste Management, Inc. 406
2,800 FPL Group, Inc. 149 ------
2,000 GPU, Inc. 75 3,800 499
1,800 New Century Energies, Inc. 61 4,200 ------
2,800 Niagara Mohawk Power Corp.* 38 9,034 FOOD - 2.1%
2,300 Northern States Power Co. 53 4,400 Albertson's, Inc. 206
4,500 PacifiCorp 78 6,800 American Stores Co. 139
3,400 Peco Energy Co. 157 7,500 Archer-Daniels-Midland Co. 133
5,900 PG&E Corp. 183 2,400 Bestfoods 207
2,300 PP&L Resources, Inc. 57 600 Campbell Soup Co. 277
3,400 Public Service Enterprise Group, Inc. 130 5,500 ConAgra, Inc. 192
4,374 Reliant Energy, Inc. 114 2,200 General Mills, Inc. 181
10,700 Southern Co. 249 6,200 Great Atlantic & Pacific Tea Co., Inc. 18
4,312 Texas Utilities Co. 180 3,900 Heinz (H.J.) Co. 261
3,300 Unicom Corp. 121 2,100 Hershey Foods Corp. 123
------- Kellogg Co. 210
3,216 5,000 Kroger Co. 234
------- Quaker Oats (The) Co. 131
7,500 Ralston-Ralston Purina Group 133
ELECTRICAL COMPONENTS & EQUIPMENT - 0.2% 14,000 Safeway Inc.* 385
6,700 Emerson Electric Co. 355 1,800 Sara Lee Corp. 347
------- SUPERVALU Inc. 37
5,100 Sysco Corp. 134
ELECTRONICS - 0.5% 2,300 Winn-Dixie Stores, Inc. 86
3,400 AMP Inc. 183 1,800 Wrigley (Wm.) Jr. Co. 163
700 EG&G, Inc. 18 ------
1,900 Honeywell, Inc. 144 3,597
1,300 Johnson Controls, Inc. 81 ------
700 Millipore Corp. 17 900 FOREST PRODUCTS & PAPER - 0.6%
1,650 Parker-Hannifin Corp. 57 1,500 Boise Cascade Co. 29
800 Perkin-Elmer Corp. 78 3,400 Champion International Corp. 62
3,900 Solectron Corp.* 189 1,300 Fort James Corp. 108
750 Tektronix, Inc. 19 4,700 Georgia-Pacific Corp. 97
2,400 Thermo Electron Corp.* 33 1,600 International Paper Co. 198
900 Thomas & Betts Corp. 34 1,600 Louisiana-Pacific Corp. 30
------- 400 Mead Corp. 49
853 Potlatch Corp. 14
-------
</TABLE>
See Notes to the Financial Statements.
-----
99
-----
<PAGE> 102
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER - 0.6% (CONT'D.)
900 Temple-Inland, Inc. $ 56
1,100 Union Camp Corp. 74
1,500 Westvaco Corp. 32
3,100 Weyerhaeuser Co. 172
1,700 Willamette Industries, Inc. 64
--------
985
--------
GAS - 0.1%
300 Eastern Enterprises 11
700 NICOR, Inc. 25
500 ONEOK, Inc. 12
500 Peoples Energy Corp. 16
3,703 Sempra Energy 71
--------
135
--------
HAND/MACHINE TOOLS - 0.1%
1,300 Black & Decker Corp. 72
1,500 Grainger (W.W.), Inc. 65
600 Milacron Inc. 9
900 Snap-On, Inc. 26
1,400 Stanley Works (The) 36
--------
208
--------
HEALTH CARE - 2.6%
1,000 Allergan, Inc. 88
800 Bard (C.R.), Inc. 40
900 Bausch & Lomb, Inc. 59
4,400 Baxter International, Inc. 290
3,800 Becton, Dickinson & Co. 146
1,700 Biomet, Inc. 71
6,000 Boston Scientific Corp.* 243
9,900 Columbia/HCA Healthcare Corp. 187
4,600 Guidant Corp. 278
1,700 HCR Manor Care* 39
6,400 HEALTHSOUTH Corp. 66
2,500 Humana, Inc.* 43
20,600 Johnson & Johnson 1,930
1,100 Mallinckrodt, Inc. 29
9,000 Medtronic, Inc. 646
1,300 St. Jude Medical, Inc.* 32
4,700 Tenet Healthcare Corp.* 89
2,900 United Healthcare Corp. 153
--------
4,429
--------
HOLDING COMPANIES-DIVERSIFIED - 0.2%
6,100 Seagram (The) Co. Ltd. $ 305
--------
HOME BUILDERS - 0.0%
900 Centex Corp. 30
500 Fleetwood Enterprises, Inc. 14
700 Kaufman & Broad Home Corp. 16
700 Pulte Corp. 15
--------
75
--------
HOME FURNISHINGS - 0.1%
1,400 Maytag Corp. 85
1,200 Whirlpool Corp. 65
--------
150
--------
HOUSEHOLD PRODUCTS/WARES - 0.7%
1,100 American Greetings Corp., Class A 28
1,800 Avery Dennison Corp. 104
1,800 Clorox (The) Co. 211
2,600 Fortune Brands, Inc. 101
500 Jostens, Inc. 11
1,300 Moore Corp. Ltd. 13
900 Tupperware Corp. 16
9,800 Unilever N.V. 651
--------
1,135
--------
HOUSEWARES - 0.1%
4,313 Newell Rubbermaid, Inc. 205
--------
INSURANCE - 3.4%
2,200 Aetna, Inc. 183
12,600 Allstate Corp. 467
3,821 American General Corp. 269
18,861 American International Group, Inc. 2,275
2,650 Aon Corp. 168
2,500 Chubb (The) Corp. 146
3,200 CIGNA Corp. 268
2,600 Cincinnati Financial Corp. 95
4,866 Conseco, Inc. 150
3,600 Hartford Financial Services Group (The), Inc. 205
1,600 Jefferson-Pilot Corp. 108
1,500 Lincoln National Corp. 148
1,700 Loews Corp. 127
3,950 Marsh & McLennan Cos., Inc. 293
1,500 MBIA, Inc. 87
1,700 MGIC Investment Corp. 60
See Notes to the Financial Statements.
- -----
100
- -----
<PAGE> 103
NORTHERN FUNDS Annual Report
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
INSURANCE - 3.4% (CONT'D.)
1,100 Progressive Corp. $ 158
2,100 Provident Co., Inc. 73
2,100 SAFECO Corp. 85
3,576 St. Paul Cos., Inc. 111
2,200 Torchmark Corp. 70
1,900 Transamerica Corp. 135
2,100 UNUM Corp. 100
-------
5,781
-------
IRON/STEEL - 0.1%
3,000 Allegheny Teledyne, Inc. 57
2,000 Bethlehem Steel Corp.* 17
1,300 Nucor Corp. 57
1,300 USX - U.S. Steel Group 31
-------
162
-------
LEISURE TIME - 0.3%
1,400 Brunswick Corp. 27
9,400 Carnival Corp. 456
-------
483
-------
LODGING - 0.1%
4,000 Hilton Hotels Corp. 56
3,700 Marriott International, Inc. 124
-------
180
-------
MACHINERY - DIVERSIFIED - 0.7%
5,700 Applied Materials, Inc.* 352
400 Briggs & Stratton Corp. 20
1,100 Case Corp. 28
5,500 Caterpillar, Inc. 253
600 Cummins Engine Co., Inc. 21
3,700 Deere & Co. 143
3,400 Dover Corp. 112
700 Harnischfeger Industries, Inc. 4
2,500 Ingersoll-Rand Co. 124
900 McDermott International, Inc. 23
100 NACCO Industries, Inc. 7
2,900 Rockwell International Corp. 123
-------
1,210
-------
MEDIA - 3.2%
10,800 CBS Corp.* 442
4,000 Clear Channel Communications, Inc.* 268
5,700 Comcast Corp., Class A $ 359
31,500 Disney (The Walt) Co. 980
2,100 Donnelley (R.R.) & Sons Co. 68
1,400 Dow Jones & Co., Inc. 66
4,300 Gannett Co., Inc. 271
1,100 King World Productions, Inc. 34
1,200 Knight-Ridder, Inc. 60
3,000 McGraw Hill Cos., Inc. 164
9,300 MediaOne Group Inc.* 591
800 Meredith Corp. 25
2,800 New York Times Co., Class A 80
18,800 Time Warner, Inc. 1,336
1,200 Times Mirror Co., Class A 65
1,800 Tribune Co. 118
5,300 Viacom, Inc., Class B* 445
-------
5,372
-------
METAL FABRICATE/HARDWARE - 0.0%
900 Timken (The) Co. 15
1,400 Worthington Industries, Inc. 16
-------
31
-------
METALS-DIVERSIFIED - 0.3%
3,500 Alcan Aluminum Ltd. 90
5,600 Aluminum Co. of America 231
600 ASARCO, Inc. 8
2,500 Freeport-McMoRan Copper & Gold, Inc.,
Class B 27
2,500 Inco Ltd. 33
900 Phelps Dodge Corp. 44
3,800 Placer Dome, Inc. 43
1,000 Reynolds Metals Co. 48
-------
524
-------
MINING - 0.1%
5,700 Barrick Gold Corp. 97
3,500 Battle Mountain Gold Co. 10
1,400 Cyprus Amax Minerals Co. 17
3,600 Homestake Mining Co. 31
2,544 Newmont Mining Corp. 45
-------
200
-------
MISCELLANEOUS MANUFACTURING - 4.9%
400 Aeroquip-Vickers, Inc. 23
1,600 Cooper Industries, Inc. 68
See Notes to the Financial Statements.
-----
101
-----
<PAGE> 104
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - 4.9% (CONT'D.)
3,600 Corning, Inc. $ 216
1,025 Crane Co. 25
2,100 Danaher Corp. 110
5,000 Eastman Kodak Co. 319
1,100 Eaton Corp. 79
500 FMC Corp.* 25
50,200 General Electric Co. 5,553
3,800 Illinois Tool Works, Inc. 235
1,600 ITT Industries, Inc.* 57
6,200 Minnesota Mining & Manufacturing Co. 439
600 National Service Industries, Inc. 20
1,900 Pall Corp. 31
700 Polaroid Corp. 14
2,700 PPG Industries, Inc. 138
1,200 Raychem Corp. 27
2,600 Tenneco, Inc. 73
2,400 Textron, Inc. 186
9,960 Tyco International Ltd. 715
-------
8,353
-------
OFFICE/BUSINESS EQUIPMENT - 0.6%
1,200 Harris Corp. 34
4,200 Pitney Bowes, Inc. 268
10,100 Xerox Corp. 539
-------
841
-------
OIL & GAS PRODUCERS - 4.9%
1,400 Amerada Hess Corp. 70
1,800 Anadarko Petroleum Corp. 68
1,500 Apache Corp. 39
1,100 Ashland, Inc. 45
5,000 Atlantic Richfield Co. 365
2,757 Burlington Resources, Inc. 110
10,000 Chevron Corp. 884
3,300 Coastal Corp. 109
37,300 Exxon Corp. 2,632
700 Helmerich & Payne, Inc. 16
1,353 Kerr-McGee Corp. 44
12,000 Mobil Corp. 1,056
5,300 Occidental Petroleum Corp. 95
3,900 Phillips Petroleum Co. 184
1,300 Rowan Cos., Inc.* 16
32,900 Royal Dutch Petroleum Co. ADR 1,711
1,400 Sunoco, Inc. 50
8,200 Texaco, Inc. 465
3,769 Union Pacific Resources Group, Inc. $ 45
3,700 Unocal Corp. 136
4,700 USX - Marathon Group 129
-------
8,269
-------
OIL & GAS SERVICES - 0.5%
4,990 Baker Hughes, Inc. 121
6,700 Halliburton Co. 258
8,400 Schlumberger Ltd. 506
-------
885
-------
PACKAGING & CONTAINERS - 0.1%
500 Ball Corp. 23
800 Bemis Co. 25
1,900 Crown Cork & Seal Co., Inc. 54
2,400 Owens-Illinois, Inc.* 60
1,328 Sealed Air Corp.* 65
-------
227
-------
PHARMACEUTICALS - 8.5%
23,300 Abbott Laboratories 1,091
1,500 ALZA Corp.* 57
20,200 American Home Products Corp. 1,318
30,500 Bristol-Myers Squibb Co. 1,962
4,150 Cardinal Health, Inc. 274
16,900 Lilly (Eli) & Co. 1,434
36,500 Merck & Co., Inc. 2,927
19,900 Pfizer, Inc. 2,761
7,800 Pharmacia & Upjohn, Inc. 487
22,500 Schering-Plough Corp. 1,245
12,600 Warner-Lambert Co. 834
-------
14,390
-------
PIPELINES - 0.5%
1,250 Columbia Gas System, Inc. 65
1,500 Consolidated Natural Gas Co. 73
5,100 Enron Corp. 328
1,700 Sonat, Inc. 51
6,600 Williams (The) Cos., Inc. 261
-------
778
-------
RETAIL - 6.3%
2,300 Autozone, Inc.* 70
1,500 Circuit City Stores, Inc. 115
1,700 Consolidated Stores Corp.* 52
See Notes to the Financial Statements.
- -----
102
- -----
<PAGE> 105
NORTHERN FUNDS Annual Report
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
RETAIL - 6.3% (CONT'D.)
3,300 Costco Cos., Inc. $ 302
6,000 CVS Corp. 285
2,100 Darden Restaurants, Inc. 43
6,800 Dayton-Hudson Corp. 453
1,600 Dillard's, Inc., Class A 41
2,750 Dollar General Corp. 94
3,200 Federated Department Stores, Inc. 128
2,400 Fred Meyer, Inc.* 141
8,750 Gap (The), Inc. 589
1,100 Harcourt General, Inc. 49
22,600 Home Depot (The), Inc. 1,407
2,200 Ikon Office Solutions, Inc. 28
7,500 Kmart Corp.* 126
2,400 Kohl's Corp.* 170
3,500 Limited (The), Inc. 139
600 Longs Drug Stores, Inc. 18
5,400 Lowe's Cos., Inc. 327
5,350 May Department Stores Co. 209
20,700 McDonald's Corp. 938
2,200 Nordstrom, Inc. 90
4,000 Penney (J.C.) & Co., Inc. 162
800 Pep Boys-Manny, Moe & Jack 12
4,000 Rite Aid Corp. 100
5,900 Sears, Roebuck & Co. 267
7,100 Staples Inc. 233
1,500 Tandy Corp. 96
5,000 TJX Cos., Inc. 170
3,800 Toys "R" Us, Inc.* 71
2,330 Tricon Global Restaurants, Inc.* 164
34,100 Wal-Mart Stores, Inc. 3,144
15,300 Walgreen Co. 432
1,900 Wendy's International, Inc. 54
---------
10,719
---------
SAVINGS & LOANS - 0.3%
900 Golden West Financial Corp. 86
9,085 Washington Mutual, Inc. 371
---------
457
---------
SEMICONDUCTORS - 2.8%
2,200 Advanced Micro Devices, Inc.* 34
25,600 Intel Corp. 3,050
1,300 KLA-Tencor Corp.* 63
2,200 LSI Logic Corp.* 69
3,800 Micron Technology, Inc. 183
Semiconductors - 2.8% (cont'd.)
9,200 Motorola, Inc. $ 674
2,500 National Semiconductor Corp.* 23
6,000 Texas Instruments, Inc. 596
---------
4,692
---------
SOFTWARE - 6.8%
900 Adobe Systems, Inc. 51
15,800 America On-Line, Inc.* 2,307
900 Autodesk, Inc. 36
9,400 Automatic Data Processing, Inc. 389
3,300 BMC Software Inc.* 122
8,250 Computer Associates International, Inc. 293
5,600 Compuware Corp.* 134
6,800 First Data Corp. 291
4,900 IMS Health, Inc. 162
77,200 Microsoft Corp.* 6,919
5,200 Novell, Inc.* 131
22,025 Oracle Corp.* 581
4,100 Parametric Technology Co.* 81
3,500 Peoplesoft, Inc.* 51
400 Shared Medical Systems Corp. 22
---------
11,570
---------
TELECOMMUNICATION EQUIPMENT - 1.9%
1,250 Andrew Corp.* 15
2,600 General Instrument Corp.* 79
20,300 Lucent Technologies, Inc. 2,187
10,220 Northern Telecom Ltd. 635
1,200 Scientific-Atlanta, Inc. 33
3,000 Tellabs, Inc.* 293
---------
3,242
---------
TELECOMMUNICATIONS - 0.9%
8,800 Airtouch Communications, Inc.* 850
2,600 Frontier Corp. 135
4,400 Nextel Communications, Inc.* 161
6,750 Sprint Corp. 299
---------
1,445
---------
TELEPHONE - 7.2%
4,200 Alltel Corp. 262
16,900 Ameritech Corp. 978
32,150 AT&T Corp. 2,566
23,808 Bell Atlantic Corp. 1,231
29,900 BellSouth Corp. 1,198
See Notes to the Financial Statements.
-----
103
-----
<PAGE> 106
SCHEDULE OF INVESTMENTS MARCH 31, 1999
STOCK INDEX FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
TELEPHONE - 7.2% (CONT'D.)
1,400 Century Telephone Enterprises, Inc. $ 98
14,800 GTE Corp. 895
28,119 MCI WorldCom, Inc.* 2,490
29,956 SBC Communications, Inc. 1,412
6,900 Sprint Corp. 677
7,696 US West Communications Group 424
---------
12,231
---------
TEXTILES - 0.0%
300 Springs Industries, Inc., Class A 8
---------
TOBACCO - 1.0%
37,300 Philip Morris Cos., Inc. 1,311
5,000 RJR Nabisco Holdings Corp. 125
2,900 UST, Inc. 76
---------
1,512
---------
TOYS - 0.1%
3,025 Hasbro, Inc. 88
4,400 Mattel, Inc. 109
---------
197
---------
TRANSPORTATION - 0.6%
7,200 Burlington Northern Santa Fe Corp. 237
3,300 CSX Corp. 128
2,240 FDX Corp.* 208
5,000 Laidlaw, Inc. 29
5,800 Norfolk Southern Corp. 153
3,800 Union Pacific Corp. 203
---------
958
---------
TRUCKING & LEASING - 0.0%
1,100 Ryder System, Inc. 30
---------
Total Common Stocks
(cost $124,859) 161,026
---------
SHORT-TERM INVESTMENTS - 5.4%
$8,450 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99 $ 8,450
650 U.S. Treasury Bill,
4.37%, 6/24/99(1) 643
---------
Total Short-Term Investments
(cost $9,093) 9,093
---------
Total Investments - 100.6%
(cost $133,952) 170,119
Liabilities less Other Assets - (0.6)% (1,057)
---------
NET ASSETS - 100.0% $ 169,062
=========
OPEN FUTURES CONTRACTS:
Notional Unrealized
Number of Amount Contract Contract Loss
Type Contracts (000s) Position Exp. (000s)
- --------------------------------------------------------------------------------
S&P 500 20 $6,467 Long 6/99 $ (39)
S&P 500 MINI 27 1,746 Long 6/99 (25)
-----
$ (64)
=====
(1) Security pledged as collateral to cover margin requirements for open futures
contracts.
See Notes to the Financial Statements.
- -----
104
- -----
<PAGE> 107
NORTHERN FUNDS Annual Report
SCHEDULE OF INVESTMENTS MARCH 31, 1999
GROWTH EQUITY FUND
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS - 96.8%
ADVERTISING - 1.3%
58,000 Interpublic Group of Cos., Inc. $ 4,517
140,000 Snyder Communications, Inc. 3,902
--------
8,419
--------
AIRLINES - 0.6%
119,200 Southwest Airlines Co. 3,606
--------
BANKS - 4.5%
128,000 Bank One Corp. 7,048
130,000 BankAmerica Corp. 9,181
114,300 State Street Corp. 9,394
100,000 Wells Fargo & Co. 3,506
--------
29,129
--------
BEVERAGES - 2.5%
79,000 Anheuser-Busch Cos., Inc. 6,018
84,500 Coca-Cola Co. 5,186
115,000 PepsiCo, Inc. 4,506
--------
15,710
--------
BUILDING MATERIALS - 0.5%
119,800 Masco Corp. 3,384
--------
CHEMICALS - 0.5%
54,800 du Pont (E.I.) de Nemours & Co. 3,181
--------
COMMERCIAL SERVICES - 1.0%
104,200 Paychex, Inc. 4,943
59,500 Sylvan Learning Systems, Inc.* 1,629
--------
6,572
--------
COMPUTERS & NETWORKING - 8.7%
121,725 Cisco Systems, Inc.* 13,336
147,600 Computer Sciences Corp.* 8,146
126,000 Dell Computer Corp. 5,150
99,900 EMC Corp.* 12,762
51,300 International Business Machines Corp. 9,093
58,700 Sun Microsystems, Inc.* 7,334
--------
55,821
--------
COSMETIC/PERSONAL CARE - 2.0%
100,000 Gillette Co. $ 5,944
71,400 Procter & Gamble Co. 6,993
--------
12,937
--------
DIVERSIFIED FINANCIAL SERVICES - 7.9%
37,400 American Express Co. 4,395
20,900 Capital One Financial Corp. 3,156
138,000 Citigroup, Inc. 8,815
82,600 Fannie Mae 5,720
172,500 Freddie Mac 9,854
71,000 MBNA Corp. 1,695
45,200 Merrill Lynch & Co., Inc. 3,997
39,000 Morgan Stanley Dean Witter & Co. 3,898
95,000 Schwab (Charles) Corp. 9,132
--------
50,662
--------
ELECTRIC - 0.4%
49,000 Duke Energy Corp. 2,677
--------
ELECTRONICS - 1.5%
27,600 Sanmina Corp.* 1,760
162,400 Solectron Corp.* 7,887
--------
9,647
--------
ENVIRONMENTAL CONTROL - 0.5%
69,300 Waste Management, Inc. 3,075
--------
FOOD - 0.9%
159,615 Keebler Foods Co.* 5,826
--------
HEALTH CARE - 3.2%
129,000 Guidant Corp. 7,805
72,100 Johnson & Johnson 6,755
81,900 Medtronic, Inc. 5,876
--------
20,436
--------
HOUSEWARES - 0.6%
75,000 Newell Rubbermaid, Inc. 3,563
--------
INSURANCE - 3.0%
121,950 American International Group, Inc. 14,710
81,700 MBIA, Inc. 4,739
--------
19,449
--------
See Notes to the Financial Statements.
-----
105
-----
<PAGE> 108
SCHEDULE OF INVESTMENTS MARCH 31, 1999
GROWTH EQUITY FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- --------------------------------------------------------------------------------
MEDIA - 2.2%
118,300 Disney (The Walt) Co. $ 3,682
139,900 Fox Entertainment Group, Inc.* 3,795
90,100 Time Warner, Inc. 6,403
--------
13,880
--------
MISCELLANEOUS MANUFACTURING - 5.1%
215,100 General Electric Co. 23,795
123,700 Tyco International Ltd. 8,875
--------
32,670
--------
OIL & GAS PRODUCERS - 4.7%
65,000 Chevron Corp. 5,748
113,000 Conoco Inc. 2,776
160,000 Exxon Corp. 11,290
190,900 Royal Dutch Petroleum Co. 9,927
--------
29,741
--------
OIL & GAS SERVICES - 1.3%
123,200 Halliburton Co. 4,743
61,900 Schlumberger Ltd. 3,726
--------
8,469
--------
PHARMACEUTICALS - 8.7%
113,000 Bristol-Myers Squibb Co. 7,267
87,250 Cardinal Health, Inc. 5,759
128,875 Elan Corp. PLC ADR* 8,989
64,300 Lilly (Eli) & Co. 5,457
96,000 Merck & Co., Inc. 7,698
75,400 Pfizer, Inc. 10,461
104,800 Schering-Plough Corp. 5,796
60,100 Warner-Lambert Co. 3,978
--------
55,405
--------
PIPELINES - 0.6%
55,700 Enron Corp. 3,579
--------
RETAIL - 14.8%
137,000 Dayton-Hudson Corp. 9,128
100,200 Gap (The), Inc. 6,745
303,200 Home Depot (The), Inc. 18,874
156,400 Kohl's Corp.* 11,085
38,400 Lowe's Cos., Inc. 2,323
225,000 Staples, Inc.* 7,397
267,000 Starbucks Corp.* 7,493
RETAIL - 14.8% (cont'd.)
358,000 Walgreen Co. $ 10,114
236,200 Wal-Mart Stores, Inc. 21,775
--------
94,934
--------
SEMICONDUCTORS - 3.7%
78,000 Applied Materials, Inc. 4,812
97,800 Intel Corp. 11,650
49,000 Motorola, Inc. 3,589
39,500 Texas Instruments, Inc. 3,920
--------
23,971
--------
SOFTWARE - 6.0%
67,000 America Online, Inc.* 9,782
294,600 Microsoft Corp.* 26,404
87,000 Oracle Corp.* 2,295
--------
38,481
--------
TELECOMMUNICATION EQUIPMENT - 3.6%
72,600 Lucent Technologies, Inc. 7,823
43,000 Nokia Corp. ADR 6,697
89,150 Tellabs, Inc.* 8,714
--------
23,234
--------
TELEPHONE - 5.2%
128,900 AT&T Corp. 10,288
83,100 Ameritech Corp. 4,809
106,000 BellSouth Corp. 4,247
104,200 MCI WorldCom, Inc.* 9,228
107,000 SBC Communications, Inc. 5,042
--------
33,614
--------
TEXTILES - 0.5%
50,000 Cintas Corp. 3,269
--------
TOBACCO - 0.8%
141,100 Philip Morris Cos., Inc. 4,965
--------
Total Common Stocks
(cost $399,018) 620,306
--------
See Notes to the Financial Statements.
- -----
106
- -----
<PAGE> 109
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
GROWTH EQUITY FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 2.9%
$17,768 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
4.24%, 4/1/99 $ 17,768
700 U.S. Treasury Bill,
4.40%, 6/10/99(1) 694
--------
Total Short-Term Investments
(cost $18,462) 18,462
--------
Total Investments - 99.7%
(cost $417,480) 638,768
Other Assets less Liabilities - 0.3% 2,180
--------
NET ASSETS - 100.0% $640,948
========
OPEN FUTURES CONTRACTS:
Notional Unrealized
Number of Amount Contract Contract Loss
Type Contracts (000s) Position Exp. (000s)
- -------------------------------------------------------------------------------
S&P 500 38 $12,286 Long 6/99 $(106)
=====
(1) Security pledged as collateral to cover margin requirements for
open futures contracts.
See Notes to the Financial Statements.
-----
107
-----
<PAGE> 110
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SELECT EQUITY FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS - 99.0%
AEROSPACE - 1.6%
23,000 United Technologies Corp. $ 3,115
-------
AIRLINES - 1.1%
75,000 Southwest Airlines Co. 2,269
-------
BANKS - 3.1%
16,500 Chase Manhattan Corp. 1,342
34,000 State Street Corp. 2,794
55,000 Wells Fargo & Co. 1,928
-------
6,064
-------
BEVERAGES - 0.8%
21,200 Anheuser-Busch Cos., Inc. 1,615
-------
BIOTECHNOLOGY - 1.1%
28,000 Amgen, Inc.* 2,096
-------
BUILDING MATERIALS - 0.9%
45,000 Vulcan Materials Co. 1,859
-------
CHEMICALS - 0.3%
19,000 Macdermid, Inc. 645
-------
COMPUTERS - 9.4%
40,000 Cisco Systems, Inc.* 4,382
24,000 Computer Sciences Corp.* 1,325
22,000 Dell Computer Corp.* 899
46,200 EMC Corp.* 5,902
11,000 International Business Machines Corp. 1,950
23,500 Sun Microsystems, Inc.* 2,936
25,000 Synopsys, Inc. * 1,344
-------
18,738
-------
COSMETICS/PERSONAL CARE - 0.8%
15,800 Procter & Gamble Co. 1,547
-------
DIVERSIFIED FINANCIAL SERVICES - 9.5%
25,000 Fannie Mae 1,731
68,000 Freddie Mac 3,885
94,000 MBNA Corp. 2,244
7,000 Merrill Lynch & Co., Inc. 619
17,000 Morgan Stanley Dean Witter & Co. 1,699
31,000 Providian Financial Corp. 3,410
55,000 Schwab (Charles) Corp. 5,287
-------
18,875
-------
ELECTRICAL COMPONENTS & EQUIPMENT - 0.5%
34,500 American Power Conversion Corp.* $ 932
-------
ELECTRONICS - 3.0%
30,000 Johnson Controls, Inc. 1,871
47,000 Solectron Corp.* 2,282
17,000 Waters Corp. 1,786
-------
5,939
-------
FOOD - 0.2%
11,573 Keebler Foods Co.* 422
-------
HEALTH CARE - 2.3%
34,500 Guidant Corp.* 2,087
11,000 Johnson & Johnson 1,031
20,000 Medtronic, Inc. 1,435
-------
4,553
-------
INSURANCE - 3.2%
40,000 AFLAC, Inc. 2,177
29,250 American International Group, Inc. 3,528
5,000 Progressive Corp. 718
-------
6,423
-------
LEISURE TIME - 1.3%
25,000 Carnival Corp. 1,214
22,500 Harley-Davidson, Inc. 1,294
-------
2,508
-------
MACHINERY-DIVERSIFIED - 0.5%
20,000 Ingersoll-Rand Co. 993
-------
MEDIA - 4.2%
5,500 Comcast Corp., Class A 338
11,000 Comcast Corp., Class A Special 692
6,000 Fox Entertainment Group, Inc.* 163
37,000 McGraw-Hill Cos., Inc. 2,017
32,000 MediaOne Group, Inc.* 2,032
43,500 Time Warner, Inc. 3,091
-------
8,333
-------
MISCELLANEOUS MANUFACTURING - 4.8%
66,000 General Electric Co. 7,301
31,500 Tyco International Ltd. 2,260
-------
9,561
-------
See Notes to the Financial Statements.
- -----
108
- -----
<PAGE> 111
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SELECT EQUITY FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
OFFICE/BUSINESS EQUIPMENT - 0.6%
23,000 Xerox Corp. $ 1,228
--------
OIL & GAS PRODUCERS - 2.5%
11,000 BP Amoco PLC ADR 1,110
23,000 Exxon Corp. 1,623
25,000 Mobil Corp. 2,200
--------
4,933
--------
OIL & GAS SERVICES - 1.0%
32,000 Schlumberger Ltd. 1,926
--------
PHARMACEUTICALS - 6.1%
22,000 Cardinal Health, Inc. 1,452
25,000 Elan Corp. PLC ADR* 1,744
18,500 Forest Laboratories, Inc.* 1,043
18,000 Merck & Co., Inc. 1,443
33,800 Pfizer, Inc. 4,690
32,000 Schering-Plough Corp. 1,770
--------
12,142
--------
PIPELINES - 1.5%
45,000 Enron Corp. 2,891
--------
RETAIL - 14.3%
30,900 Bed Bath & Beyond, Inc.* 1,128
16,200 Best Buy Co., Inc.* 842
54,000 Gap (The), Inc. 3,635
44,500 Home Depot (The), Inc. 2,770
49,500 Kohl's Corp.* 3,508
105,000 Staples, Inc.* 3,452
23,000 Starbucks Corp.* 645
34,500 TJX Cos., Inc. 1,173
76,600 Wal-Mart Stores, Inc. 7,062
146,400 Walgreen Co. 4,136
--------
28,351
--------
SEMICONDUCTORS - 2.8%
34,800 Intel Corp. 4,146
7,500 Motorola, Inc. 549
22,000 Xilinx, Inc.* 892
--------
5,587
--------
SOFTWARE - 9.6%
32,400 America Online, Inc.* 4,730
3,000 At Home Corporation* 473
36,000 Fiserv, Inc.* 1,931
6,000 Intuit, Inc.* $ 611
92,200 Microsoft Corp.* 8,263
90,000 Oracle Corp.* 2,374
4,600 Yahoo! Inc.* 775
--------
19,157
--------
TELECOMMUNICATION EQUIPMENT - 3.7%
16,000 General Instrument Corp.* 485
8,000 Lucent Technologies, Inc. 862
10,800 Nokia Corp- Sponsored ADR 1,682
16,500 Qwest Communications International, Inc.* 1,190
16,500 Vodafone Group PLC-Sponsored ADR 3,098
--------
7,317
--------
TELEPHONE - 6.3%
48,500 Ameritech Corp. 2,807
37,378 AT&T Corp. 2,983
52,000 BellSouth Corp. 2,083
53,000 MCI WorldCom, Inc.* 4,694
--------
12,567
--------
TEXTILES - 0.8%
24,500 Cintas Corp. 1,602
--------
TOBACCO - 0.6%
33,500 Philip Morris Cos., Inc. 1,179
--------
TRANSPORTATION - 0.6%
13,500 FDX Corp.* 1,253
--------
Total Common Stocks
(cost $134,033) 196,620
--------
Principal
Amount
(000s)
- ---------
SHORT-TERM INVESTMENT - 0.9%
$1,745 Societe Generale, Grand Cayman,
Eurodollar Time Deposits, 5.125%, 4/1/99
(cost $1,745) 1,745
--------
Total Investments - 99.9%
(cost $135,778) 198,365
Other Assets less Liabilities - 0.1% 165
--------
NET ASSETS - 100.0% $198,530
========
See Notes to the Financial Statements.
-----
109
-----
<PAGE> 112
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MID CAP GROWTH FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS - 95.1%
AIRLINES - 2.9%
43,200 COMAIR Holdings, Inc. $ 1,021
41,000 Southwest Airlines Co. 1,240
-------
2,261
-------
APPAREL - 1.2%
14,000 Tommy Hilfiger Corp.* 964
-------
BIOTECHNOLOGY - 4.4%
12,400 Biogen, Inc.* 1,417
6,000 Genentech, Inc.* 532
17,200 Immunex Corp.* 1,432
-------
3,381
-------
COMMERCIAL SERVICES - 1.9%
19,500 DeVry, Inc.* 566
29,700 MedQuist, Inc.* 891
-------
1,457
-------
COMPUTERS - 7.1%
15,400 Comverse Technology, Inc.* 1,309
16,000 Dell Computer Corp.* 654
7,200 EMC Corp.* 920
41,000 Sykes Enterprises, Inc.* 1,325
15,800 VERITAS Software Corp.* 1,276
-------
5,484
-------
COSMETICS/PERSONAL CARE - 1.8%
14,500 Estee Lauder Cos.(The), Class A 1,370
-------
ELECTRONICS - 6.5%
20,000 Johnson Controls, Inc. 1,248
28,500 Solectron Corp.* 1,384
11,200 Uniphase Corp.* 1,289
11,000 Waters Corp.* 1,156
-------
5,077
-------
HEALTH CARE - 8.2%
17,400 Biomet, Inc. 730
19,100 Express Scripts, Inc., Class A* 1,641
35,000 Laser Vision Centers, Inc.* 1,334
9,300 MiniMed, Inc.* 945
16,000 VISX, Inc.* 1,721
-------
6,371
-------
INSURANCE - 2.0%U
28,100 AFLAC, Inc. $ 1,530
-------
LEISURE TIME - 1.7%
23,000 Harley-Davidson, Inc. 1,323
-------
MEDIA - 2.4%
32,900 TCA Cable TV, Inc. 1,431
5,800 Time Warner, Inc. 412
-------
1,843
-------
OIL & GAS PRODUCERS - 1.6%
40,300 Diamond Offshore Drilling, Inc. 1,274
-------
PHARMACEUTICALS - 3.1%
24,900 MedImmune, Inc.* 1,474
21,600 Patterson Dental Co.* 934
-------
2,408
-------
RETAIL - 17.0%
19,700 99 Cents Only Stores* 836
12,400 Abercrombie & Fitch Co., Class A* 1,141
31,800 Bed Bath & Beyond, Inc.* 1,161
24,000 Best Buy Co., Inc.* 1,249
34,600 Brinker International, Inc.* 893
48,000 Claire's Stores, Inc. 1,446
10,800 Gap (The), Inc. 727
29,700 Intimate Brands, Inc. 1,429
39,200 Outback Steakhouse, Inc.* 1,284
2,300 Priceline.com, Inc.* 191
17,850 Staples, Inc.* 587
33,000 Starbucks Corp.* 926
38,100 TJX Cos. (The), Inc. 1,295
-------
13,165
-------
SEMICONDUCTORS - 3.1%
14,000 QLogic Corp.* 940
35,400 Xilinx, Inc.* 1,436
-------
2,376
-------
SOFTWARE - 21.4%
7,000 America Online, Inc.* 1,022
11,700 At Home Corp., Series A* 1,842
26,100 BroadVision, Inc.* 1,559
See Notes to the Financial Statements.
- -----
110
- -----
<PAGE> 113
SCHEDULES OF INVESTMENTS MARCH 31, 1999
MID CAP GROWTH FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
SOFTWARE - 21.4% (CONT'D.)
24,100 Concord Communications, Inc.* $ 1,374
8,400 Covad Communications Group, Inc.* 552
14,000 Intuit, Inc.* 1,425
34,600 Mercury Interactive Corp.* 1,233
14,400 MindSpring Enterprises, Inc.* 1,238
6,500 Network Associates, Inc.* 199
22,500 New Era of Networks, Inc.* 1,524
4,166 pcOrder.com, Inc.* 236
25,000 Prodigy Communications Corp.* 959
23,000 Siebel Systems, Inc.* 1,093
7,273 Xoom.com, Inc.* 488
6,500 Yahoo!, Inc.* 1,094
19,322 Ziff-Davis, Inc.-ZDNet* 696
-------
16,534
-------
TELECOMMUNICATION EQUIPMENT - 2.1%
34,200 ADC Telecommunications, Inc.* 1,631
-------
TELECOMMUNICATIONS - 4.6%
21,300 Gilat Satellite Networks Ltd.* 1,278
12,800 Qwest Communications International, Inc.* 923
50,000 Vanguard Cellular Systems, Inc., Class A* 1,366
-------
3,567
-------
TELEPHONE - 0.9%
7,600 MCI WorldCom, Inc.* 673
-------
TEXTILES - 1.2%
14,200 Cintas Corp. 928
-------
TOTAL COMMON STOCKS
(cost $58,455) 73,617
-------
SHORT-TERM INVESTMENTS - 5.9%
$1,450 FHLB Discount Note,
4.80%, 4/1/99 $ 1,450
3,081 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99 3,081
-------
Total Short-Term Investments
(cost $4,531) 4,531
-------
Total Investments - 101.0%
(cost $62,986) 78,148
Liabilities less Other Assets - (1.0)% (770)
-------
NET ASSETS - 100.0% $77,378
=======
See Notes to the Financial Statements.
- -----
111
- -----
<PAGE> 114
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------- --------
COMMON STOCKS - 98.4%
ADVERTISING - 0.4%
18,600 Cyrk, Inc.* $ 141
900 Grey Advertising, Inc. 312
7,350 Penton Media, Inc. 166
5,400 Telespectrum Worldwide, Inc.* 46
17,600 True North Communications 495
------
1,160
------
AEROSPACE - 1.2%
38,550 AAR Corp. 687
12,900 Aeroflex, Inc.* 184
31,800 Banner Aerospace, Inc.* 233
12,200 BE Aerospace, Inc.* 180
12,000 Curtiss-Wright Corp.* 373
17,900 Nichols Research Corp.* 338
26,200 Orbital Sciences Corp.* 742
6,000 Primex Technologies, Inc. 124
2,700 SPACEHAB, Inc.* 18
4,200 Titan Corp.* 21
19,400 United Industrial Corp. 216
------
3,116
------
AGRICULTURE - 0.0%
4,000 Andersons (The), Inc. 49
13,700 Orange Co., Inc.* 72
------
121
------
AIRLINES - 0.9%
23,400 Alaska Airgroup, Inc.* 1,112
14,000 Amtran, Inc.* 266
11,600 Hawaiian Airlines, Inc.* 31
38,400 Mesa Air Group, Inc.* 240
27,600 SkyWest, Inc. 797
------
2,446
------
APPAREL - 1.5%
188,700 Burlington Industries, Inc.* 1,250
15,400 Cone Mills Corp.* 75
33,300 Delta Woodside Industries, Inc. 160
9,600 Donna Karan International, Inc.* 73
6,500 Florsheim Group, Inc.* 36
6,900 Garan, Inc. 170
11,600 Haggar Corp. 117
17,500 Hartmarx Corp.* 85
APPAREL - 1.5% (cont'd.)
29,800 Kellwood Co. $ 658
8,500 LaCrosse Footwear, Inc. 53
8,300 Nine West Group, Inc.* 205
9,200 Oxford Industries, Inc. 224
36,700 Phillips-Van Heusen Corp. 255
13,500 Russell Corp. 272
5,900 Starter Corp.* 16
10,800 Superior Uniform Group, Inc. 135
4,700 Supreme International Corp.* 46
3,900 Weyco Group, Inc. 94
19,600 Worldtex, Inc.* 37
------
3,961
------
AUTO PARTS & EQUIPMENT - 1.4%
28,900 Arvin Industries, Inc. 974
33,500 Detroit Diesel Corp.* 754
9,200 Durakon Industries, Inc.* 106
7,100 Edelbrock Corp.* 106
14,600 Excel Industries, Inc. 372
16,800 Exide Corp. 187
200 Federal Screw Works 10
12,100 R & B, Inc.* 97
17,800 Standard Motors Products, Inc. 368
22,800 Standard Products Co. 371
15,600 Titan International, Inc. 120
11,800 Walbro Corp.* 106
------
3,571
------
BANKS - 3.0%
1,700 ABC Bancorp 21
4,100 Area Bancshares Corp. 96
1,900 Bancfirst Corp. 66
13,576 Brenton Banks, Inc. 176
9,900 BSB Bancorp, Inc. 241
4,300 Carolina First Corp. 95
900 Cass Commercial Corp. 22
5,000 Cathay Bancorp, Inc. 188
4,000 CB Bancshares, Inc. 107
3,000 City Holding Co. 87
3,500 Commercial Bank Of New York 45
6,600 Community Bank System, Inc. 157
5,170 Community Trust Bancorp, Inc. 109
2,800 Corus Bankshares, Inc. 90
6,975 Covest Bancshares, Inc. 104
14,400 CPB, Inc. 254
See Notes to the Financial Statements.
- -----
112
- -----
<PAGE> 115
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
BANKS - 3.0% (CONT'D.)
4,900 Fidelity National Corp.* $ 41
2,964 First Charter Corp. 56
2,850 First Merchants Corp. 70
12,900 First Republic Bank* 311
4,300 First United Bancshares 60
20,048 F.N.B. Corp. 461
8,800 GBC Bancorp 132
9,630 Grand Premier Financial, Inc. 109
1,800 Hancock Holding Co. 83
4,500 Interchange Financial Services Corp. 70
10,350 Interwest Bancorp, Inc. 246
2,800 ISB Financial Corp. 51
600 James River Bankshares, Inc. 10
11,306 Jeffbanks, Inc. 236
300 Mahaska Investment Co. 5
1,640 Matewan Bancshares, Inc. 51
2,700 Merchants Bancshares, Inc. 60
11,950 MidAmerica Bancorp 293
12,114 National City Bancorporation* 254
12,101 NBT Bancorp, Inc. 253
6,000 Northern States Financial Corp. 144
1,600 Old Second Bancorp, Inc. 82
7,893 Peoples Holding Co. 257
10,410 Premier National Bancorp, Inc. 156
950 Princeton National Bancorp 16
5,100 Republic Bancshares, Inc.* 109
32,619 Republic Security Financial Corp. 302
49,600 Riggs National Corp. 837
2,600 Southwest Bancorp, Inc. 60
7,000 Sterling Bancorp 137
8,550 Triangle Bancorp, Inc. 143
4,312 TriCo Bancshares 70
25,500 U.S. Bancorp, Inc. 373
7,600 Vermont Financial Services Corp. 215
9,900 Wesbanco, Inc. 298
------
7,909
------
BEVERAGES - 0.2%
14,365 Chock Full O'Nuts Corp.* 79
2,000 Farmer Bros. Co. 396
2,900 Genesee Corp., Class B 65
------
540
------
BIOTECHNOLOGY - 0.4%
37,600 Cell Genesys, Inc.* 186
13,000 Creative Biomolecules, Inc.* $ 30
3,900 DNA Plant Technology Corp.* 15
3,900 Genome Therapeutics Corp.* 12
9,500 Liposome Co., Inc.* 128
4,000 Neopath, Inc.* 16
19,100 Northfield Laboratories, Inc.* 210
10,900 Protein Design Labs, Inc.* 164
16,800 Regeneron Pharmaceuticals, Inc.* 111
17,900 Ribi Immunochem Research, Inc.* 30
41,500 VIMRx Pharmaceuticals, Inc.* 45
------
947
------
BUILDING MATERIALS - 1.6%
3,000 ABT Building Products Corp.* 45
5,400 Ameron International Corp. 192
3,300 Butler Manufacturing Co. 77
13,950 Elcor Corp. 491
21,800 Florida Rock Industries, Inc. 744
12,800 Genlyte Group, Inc.* 205
6,900 Giant Cement Holding, Inc.* 119
5,800 International Aluminum Co. 144
41,100 Jannock Ltd. 444
25,100 Juno Lighting, Inc. 563
12,100 Mestek, Inc.* 230
10,600 Nortek, Inc.* 262
3,300 Patrick Industries, Inc. 44
6,600 Puerto Rican Cement Co., Inc. 212
24,000 TJ International, Inc. 579
------
4,351
------
CHEMICALS - 1.7%
9,510 Aceto Corp. 112
5,900 Applied Extrusion Technologies, Inc.* 29
32,000 Cambrex Corp. 708
5,100 Chemfab Corp.* 84
18,800 Chemfirst, Inc. 442
36,800 Ethyl Corp. 156
19,100 Fuller (H.B.) Co. 1,126
23,600 International Specialty Products, Inc.* 179
8,200 MacDermid, Inc. 278
9,000 Mississippi Chemical Corp. 84
6,400 O'Sullivan Corp.* 53
19,700 Quaker Chemical Corp.* 278
15,900 Schulman (A.), Inc. 217
7,700 Sybron Chemicals, Inc.* 98
See Notes to the the Financial Statements.
-----
113
-----
<PAGE> 116
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------- --------
CHEMICALS - 1.7% (CONT'D.)
18,000 Terra Industries, Inc. $ 82
9,300 Tetra Technologies, Inc.* 63
18,100 Uniroyal Technology Corp.* 144
46,800 Wellman, Inc. 415
------
4,548
------
COAL - 0.3%
51,400 Arch Coal, Inc. 681
------
COMMERCIAL SERVICES - 3.7%
23,700 American Oncology Resources, Inc.* 213
13,100 Aurora Biosciences Corp.* 88
46,900 Avis Rent A Car, Inc.* 1,298
13,100 Berlitz International, Inc.* 292
5,300 CDI Corp.* 128
13,600 Chemed Corp. 350
500 Childtime Learning Centers, Inc.* 6
11,100 Concentra Managed Care, Inc. 161
4,200 Correctional Services Corp.* 35
16,400 Data Broadcasting Corp.* 228
49,200 Franklin Covey Co.* 443
8,700 Health Mangement Systems, Inc. 41
15,016 Healthcare Services Group, Inc.* 143
20,951 Healthplan Services Corp. 148
2,300 Hudson General Corp. 174
14,800 Insurance Auto Auctions, Inc.* 179
7,600 IntelliQuest Information Group, Inc.* 77
59,600 Interim Services, Inc.* 894
3,700 M/A/R/C, Inc. 39
86,700 Medaphis Corp.* 211
6,685 Monro Muffler Brake, Inc.* 48
43,300 National Processing, Inc.* 195
32,500 Olsten Corp. 201
35,500 Paymentech, Inc.* 839
28,200 Personnel Group of America, Inc.* 203
18,000 Phycor, Inc.* 86
22,500 Phymatrix, Inc.* 39
70,600 Physician Reliance Network* 600
17,050 Pinkertons, Inc.* 494
39,200 Primark Corp.* 833
6,000 Quest Education Corp.* 55
7,120 Quintiles Transnational Corp. 269
12,500 Renaissance Worldwide, Inc.* 77
9,200 Rental Services Corp.* 161
3,600 Right Management Consultants, Inc.* 57
10,800 RTW, Inc.* $ 51
10,100 Rural/Metro Corp.* 80
6,500 Staffmark, Inc.* 51
6,700 Strategic Distribution, Inc.* 13
11,200 Thermo TerraTech, Inc.* 56
9,900 Vallen Corp.* 168
11,300 Volt Information Sciences, Inc.* 186
------
9,910
------
COMPUTERS - 2.6%
6,400 ACT Networks, Inc.* 123
800 Analysis & Technology, Inc. 19
50,000 Anixter International, Inc.* 597
18,900 Applied Magnetics Corp.* 79
7,300 Auspex Systems, Inc.* 78
14,800 BancTec, Inc.* 182
3,100 Brite Voice Systems, Inc.* 25
1,800 BTG, Inc.* 10
4,700 Computer Network Technology Corp.* 76
59,900 Data General Corp.* 606
47,000 Diamond Multimedia Systems, Inc.* 288
1,900 Digital Link Corp.* 11
12,300 Evans & Sutherland Computer Corp.* 148
30,400 Exabyte Corp.* 144
17,500 Hutchinson Technology, Inc.* 435
21,524 Inacom Corp.* 167
65,100 Intergraph Corp.* 439
8,200 Intervoice, Inc.* 90
36,400 Komag, Inc.* 159
21,000 MicroAge, Inc.* 113
7,900 MicroTouch Systems, Inc.* 94
12,300 MTI Technology Corp.* 68
18,600 MTS Systems Corp. 188
10,700 Mylex Corp.* 70
4,700 National TechTeam, Inc.* 27
23,100 Network Computing Devices, Inc.* 116
16,500 Network Peripherals, Inc.* 88
13,600 ODS Networks, Inc.* 38
12,600 Opti, Inc.* 72
1,000 Overland Data, Inc.* 7
12,000 Par Technology Corp.* 63
14,000 Powerhouse Technologies, Inc.* 241
2,000 Printronix, Inc.* 22
23,700 Quickturn Design Systems, Inc.* 335
42,000 Read-Rite Corp.* 277
See Notes to the Financial Statements.
- -----
114
- -----
<PAGE> 117
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------- --------
COMPUTERS - 2.6% (CONT'D.)
38,100 S3, Inc.* $ 286
47,300 Sequent Computer Systems, Inc.* 429
4,900 Silicon Storage Technology, Inc.* 20
20,900 Telxon Corp. 197
2,700 Trident Microsystems, Inc. 17
12,800 Tyler Corp.* 56
3,500 Verilink Corp.* 12
11,800 Xircom, Inc.* 296
-------
6,808
-------
COSMETICS/PERSONAL CARE - 0.1%
17,600 Helen Of Troy Ltd.* 228
800 Stephan Co. 7
-------
235
-------
DISTRIBUTION/WHOLESALE - 0.6%
4,800 Advanced Marketing Services, Inc. 62
25,700 Aviall, Inc.* 398
12,800 Bell Microproducts, Inc.* 78
6,800 Industrial Distribution Group, Inc.* 36
1,500 NuCo2, Inc.* 10
32,600 Owens & Minor, Inc. 330
8,800 PrimeSource Corp. 50
25,800 Unisource Worldwide, Inc. 184
15,440 United Stationers, Inc.* 235
10,300 VWR Scientific Products Corp.* 232
-------
1,615
-------
DIVERSIFIED FINANCIAL SERVICES - 2.6%
14,300 Aames Financial Corp. 24
6,700 Advest Group, Inc. 124
15,000 Amplicon, Inc. 156
12,300 Amresco, Inc.* 95
13,800 Arcadia Financial Ltd.* 65
2,000 Atlanta Sosnoff Capital Corp.* 14
3,500 Consumer Portfolio Services, Inc.* 10
27,400 Credit Acceptance Corp.* 156
10,250 Dain Rauscher Corp. 348
9,700 Delta Financial Corp.* 55
18,800 Doral Financial Corp. 345
14,300 DVI, Inc.* 213
36,000 E-trade Group, Inc.* 2,099
992 First Albany Companies, Inc. 11
2,100 FirstCity Financial Corp.* 21
9,845 Fund American Enterprise Holdings, Inc. 1,310
1,400 Hoenig & Co., Inc.* $ 12
7,400 Interstate/Johnson Lane, Inc. 232
17,477 Metris Cos., Inc. 706
5,700 National Discount Brokers Group, Inc.* 160
3,600 New Century Financial Corp.* 43
27,900 Phoenix Investment Partners Ltd. 241
13,300 Resource Bancshares Mortgage Group, Inc. 171
6,352 Southwest Securities Group, Inc. 179
1,281 Stifel Financial Corp. 11
14,100 United Cos. Financial Corp. 5
8,800 WFS Financial, Inc. 61
-------
6,867
-------
ELECTRIC - 4.7%
8,300 Bangor Hydro-Electric Co.* 105
11,200 Baycorp Holdings Ltd.* 34
35,400 Calpine Corp.* 1,290
44,200 Central Hudson Gas & Electric 1,583
15,500 Central Vermont Public Service Corp. 156
14,200 Cilcorp, Inc. 853
67,950 CMP Group, Inc. 1,248
48,400 Eastern Utilities Association 1,370
8,200 Empire District Electric Co. 187
7,500 Green Mountain Power Corp. 73
18,500 Orange & Rockland Utilities, Inc. 1,063
65,800 Public Service Co. of New Mexico 1,119
5,300 St. Joseph Light & Power Co. 108
30,900 TNP Enterprises, Inc. 888
8,700 Trigen Energy Corp. 119
26,700 United Illuminating Co. 1,120
6,000 Unitil Corp. 138
35,300 WPS Resources Corp. 1,041
-------
12,495
-------
ELECTRICAL COMPONENTS & EQUIPMENT - 0.2%
15,300 Encore Wire Corp.* 120
1,700 Franklin Electronic Publishers, Inc.* 10
11,300 Insteel Industries, Inc. 64
7,764 Intermagnetics General Corp.* 64
14,300 Scotsman Industries, Inc. 246
16,100 Valence Technology, Inc.* 107
-------
611
-------
ELECTRONICS - 3.2%
6,100 Ade Corp. 58
See Notes to the Financial Statements.
-----
115
-----
<PAGE> 118
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
ELECTRONICS - 3.2% (CONT'D.)
12,300 Anadigics, Inc.* $ 217
5,300 Analogic Corp. 174
3,350 Bel Fuse, Inc., Class A* 137
12,387 Bell Industries, Inc.* 129
8,200 Benchmark Electronics, Inc.* 246
28,400 Canadian Marconi Co. 314
23,300 Checkpoint Systems, Inc.* 194
16,100 Coherent, Inc.* 221
9,000 C.P. Clare Corp.* 33
28,896 CTS Corp. 1,429
12,150 Cubic Corp. 191
24,400 DII Group, Inc. 714
10,200 Dynatech Corp.* 35
6,700 FLIR Systems, Inc.* 121
9,600 IFR Systems, Inc. 47
4,500 Industrial Scientific Corp. 122
9,200 Instron Corp. 146
63,900 Integrated Device Technology, Inc.* 345
2,000 ITI Technologies, Inc.* 60
10,100 Itron, Inc.* 95
9,500 Kemet Corp.* 109
2,700 Mackie Designs, Inc.* 14
500 Moore Products Co.* 10
12,200 Newport Corp. 151
14,300 Optical Coating Laboratory, Inc. 686
21,500 Park Electrochemical Corp. 505
13,700 Paxar Corp.* 102
11,200 Pittway Corp., Class A 297
2,300 Planar Systems, Inc.* 18
2,700 Recoton Corp.* 38
5,900 Rofin-Sinar Technoligies, Inc.* 40
3,900 Sheldahl, Inc.* 24
1,700 Sparton Corp.* 10
21,000 Standard Microsystems Corp.* 165
8,200 Tech-Sym Corp.* 171
7,000 Thermedics, Inc.* 49
13,100 Thermo Optek Corp.* 131
15,900 Thermoquest Corp.* 193
7,400 Thermospectra Corp.* 74
10,100 TSI, Inc. 82
8,500 Universal Electronics, Inc. 106
2,200 Veeco Instruments, Inc.* 81
12,800 Woodward Governor Co. 320
------
8,404
------
ENGINEERING & CONSTRUCTION - 1.2%
3,200 Baker (Michael) Corp.* $ 23
8,300 BFC Construction Corp.* 57
24,500 Dames & Moore Group 274
9,900 Exponent, Inc.* 56
9,100 Foster Wheeler Corp. 110
37,200 Granite Construction, Inc. 870
73,300 Morrison Knudsen Corp.* 728
9,000 Pitt-Des Moines, Inc. 205
18,600 Stone & Webster, Inc. 426
10,800 Turner Corp.* 151
14,383 URS Corp.* 260
------
3,160
------
ENTERTAINMENT - 1.0%
4,100 AMC Entertainment, Inc.* 63
4,500 Ameristar Casinos, Inc.* 12
21,000 Argosy Gaming Co.* 112
40,400 Ascent Entertainment Group, Inc.* 442
61,300 Aztar Corp.* 295
59,900 Boyd Gaming Corp.* 255
5,500 Carmike Cinemas, Inc., Class A* 99
10,500 GC Cos., Inc.* 330
24,637 Hollywood Park, Inc.* 254
5,000 Isle of Capri Casinos, Inc.* 23
12,300 Jackpot Enterprises, Inc.* 95
17,300 Loews Cineplex Entertainment Co.* 172
13,400 Mikohn Gaming Corp.* 40
10,100 Players International, Inc.* 63
1,200 Reading Entertainment, Inc.* 10
7,800 Sodak Gaming, Inc.* 69
14,400 Station Casinos, Inc.* 184
10,300 Trump Hotels & Casino Resorts, Inc.* 41
------
2,559
------
ENVIRONMENTAL CONTROL - 0.7%
21,800 Gundle/SLT Environmental, Inc.* 60
7,400 Hach Co. 84
46,672 IT Group, Inc.* 601
10,900 Layne Christensen Co.* 62
7,000 Mine Safety Appliances Co. 406
20,275 Safety-Kleen Corp.* 269
11,600 Superior Services, Inc.* 230
14,300 Thermo Ecotek Corp.* 114
------
1,826
------
See Notes to the Financial Statements.
- -----
116
- -----
<PAGE> 119
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
FOOD - 2.2%
68,318 Chiquita Brands International, Inc. $ 696
51,900 Earthgrains Co. 1,151
64,100 Fleming Cos., Inc. 549
29,844 Imperial Sugar Co. 181
21,400 International Multifoods Corp. 499
12,000 J & J Snack Foods Corp.* 241
20,600 Michael Foods, Inc. 393
13,200 Midwest Grain Products, Inc.* 132
15,300 Nash Finch Co. 128
25,300 Pilgrims Pride Corp., Class B 416
11,000 Riviana Foods, Inc. 257
19,450 Sanderson Farms, Inc. 233
4,800 Schultz Save-O Stores, Inc. 79
1,750 Seaboard Corp. 522
22,114 WLR Foods, Inc.* 163
13,640 Zapata Corp. 122
------
5,762
------
FOREST PRODUCTS & PAPER - 0.4%
32,000 Chesapeake Corp.* 868
16,200 Paragon Trade Brands, Inc.* 41
28,900 Pope & Talbot, Inc. 184
------
1,093
------
GAS - 1.5%
3,000 Chesapeake Utilities Corp. 48
9,200 Connecticut Energy Corp. 223
8,700 CTG Resources, Inc. 210
15,300 Energen Corp. 229
2,300 EnergyNorth, Inc. 63
15,900 Northwest Natural Gas Co. 348
20,000 NUI Corp. 431
7,400 Pennsylvania Enterprises, Inc. 178
7,900 Providence Energy Corp. 145
3,200 South Jersey Industries 69
17,845 Southern Union Co.* 337
54,000 Southwest Gas Corp. 1,485
22,800 Southwestern Energy Co. 161
------
3,927
------
HAND/MACHINE TOOLS - 0.2%
3,700 Axsys International, Inc.* 63
13,200 Hardinge, Inc. 186
9,100 Kennametal, Inc. 159
6,800 Powell Industries, Inc.* $ 60
534 Starrett (L.S.) Co., Class B 14
------
482
------
HEALTH CARE - 4.2%
28,100 Acuson Corp.* 420
7,800 Advanced Neuromodulation Systems, Inc.* 54
10,900 American Healthcorp, Inc.* 83
22,700 Apria Healthcare Group, Inc.* 269
8,900 ATS Medical, Inc.* 67
1,800 BioReliance Corp.* 12
8,400 Biosite Diagnostics, Inc.* 84
13,000 CardioThoracic Systems, Inc.* 124
11,900 Clintrials Research, Inc.* 70
2,500 Cohesion Technologies, Inc.* 10
5,900 Collagen Aesthetics, Inc. 79
7,000 CONMED Corp.* 217
6,100 Cyberonics, Inc. 58
22,000 Datascope Corp.* 594
5,400 DEL Global Technologies Corp.* 46
10,100 Diagnostic Products Corp. 245
600 Dianon Systems, Inc.* 5
8,400 Endosonics Corp.* 55
30,400 Fonar Corp. 37
2,300 General Surgical Innovations, Inc.* 9
34,100 Genesis Health Ventures, Inc.* 166
25,630 Graham-Field Health Products, Inc.* 46
36,000 Haemonetics Corp.* 565
6,900 Hologic, Inc.* 62
48,100 Idexx Laboratories, Inc.* 1,151
9,700 Igen International, Inc.* 233
57,441 Integrated Health Services, Inc. 316
40,100 Invacare Corp. 975
53,300 Isolyser Co., Inc.* 142
7,700 Lab Holdings, Inc. 128
9,000 LabOne, Inc. 94
61,800 Laboratory Corp. of America Holdings* 108
2,500 Lunar Corp.* 16
51,100 Mariner Post-Acute Network, Inc.* 112
54,700 Matria Healthcare, Inc.* 147
12,600 Maxxim Medical, Inc.* 238
17,416 Molecular Biosystems, Inc.* 47
9,800 Nitinol Medical Technologies* 39
73,800 Novacare, Inc.* 129
17,300 OEC Medical Systems, Inc.* 398
See Notes to the Financial Statements.
------
117
------
<PAGE> 120
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
HEALTH CARE - 4.2% (CONT'D.)
7,100 Orthologic Corp.* $ 21
12,300 Polymedica Corp.* 92
11,500 Prime Medical Services, Inc.* 85
11,200 Protocol Systems, Inc.* 67
42,500 Quest Diagnostics, Inc.* 946
20,200 Quidel Corp.* 40
21,300 Quorum Health Group, Inc.* 213
7,200 RehabCare Group, Inc.* 108
36,750 Sierra Health Services* 478
22,700 Sola International, Inc.* 274
13,000 Spacelabs Medical, Inc.* 219
14,800 Summit Technology, Inc.* 163
66,500 Sun Healthcare Group, Inc.* 67
9,400 Thermotrex Corp.* 54
14,500 Transworld Healthcare, Inc.* 43
21,800 Trex Medical Corp.* 136
31,600 United Wisconsin Services, Inc. 231
35,400 U.S. Diagnostic, Inc.* 44
7,500 Urocor, Inc.* 37
5,000 Vital Signs, Inc. 90
2,100 Xomed Surgical Products, Inc.* 82
-------
11,140
-------
HOME BUILDERS - 3.2%
10,000 Amrep Corp.* 51
11,700 Beazer Homes USA, Inc.* 246
28,700 Engle Homes, Inc. 301
21,200 Kaufman & Broad Home Corp. 478
46,100 MDC Holdings, Inc. 663
11,200 M/I Schottenstein Homes, Inc. 199
15,100 NVR, Inc.* 636
51,600 Ryland Group, Inc. 1,306
40,500 Schuler Homes, Inc.* 243
13,100 Skyline Corp. 363
3,200 Southern Energy Homes, Inc.* 17
79,350 Standard-Pacific Corp. 1,022
14,700 Thor Industries, Inc. 333
52,750 U.S. Home Corp. 1,721
46,300 Webb (Del E.) Corp. 1,004
-------
8,583
-------
HOME FURNISHINGS - 1.4%
29,900 Bassett Furniture Industries 661
18,200 Fedders Corp. 92
10,600 Flexsteel Industries, Inc. 139
14,000 Furniture Brands International, Inc.* $ 310
16,700 Harman International Industries, Inc. 614
4,850 Knape & Vogt Manufacturing Co. 62
3,300 Ladd Furniture, Inc.* 56
54,700 La-Z-Boy, Inc. 1,039
22,600 O'Sullivan Industries Holdings, Inc. 312
3,800 Pulaski Furniture Corp. 78
15,600 Royal Appliance Manufacturing Co.* 59
44,500 Sunbeam Corp.* 248
17,800 Windmere-Durable Holdings, Inc.* 125
-------
3,795
-------
HOUSEHOLD PRODUCTS/WARES - 1.4%
22,300 American Business Products, Inc. 312
7,300 Central Garden & Pet Co.* 123
12,100 CNS, Inc.* 39
14,700 CSS Industries, Inc.* 327
5,000 Ennis Business Forms, Inc. 40
22,300 Gibson Greetings, Inc.* 163
8,900 Harland (John H.) Co. 115
11,200 Hunt Corp. 111
8,900 Nashua Corp. 103
7,400 Oil-Dri Corp. 108
23,300 Russ Berrie & Co., Inc. 609
47,900 Standard Register Co. 1,422
11,100 Swiss Army Brands, Inc.* 106
-------
3,578
-------
HOUSEWARES - 0.2%
25,800 Ekco Group, Inc.* 87
30,300 Metromedia International Group, Inc.* 148
9,600 Mikasa, Inc. 71
10,000 National Presto Industries, Inc. 354
-------
660
-------
INSURANCE - 6.1%
20,800 Acceptance Insurance Cos., Inc.* 281
9,600 Allcity Insurance Co.* 68
6,000 American Heritage Life Investment Corp. 140
5,500 Amerin Corp.* 112
35,700 Amerus Life Holdings, Inc., Class A 857
82,600 Argonaut Group, Inc. 2,122
12,300 Atlantic American Corp. 49
3,800 Baldwin & Lyons, Inc., Class B 79
37,500 Capital RE Corp. 647
See Notes to the Financial Statements.
- -----
118
- -----
<PAGE> 121
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
INSURANCE - 6.1% (CONT'D.)
4,400 Capitol Transamerica Corp. $ 65
6,800 Centris Group, Inc. 72
4,600 Chartwell RE Corp. 79
28,100 CNA Surety Corp.* 348
3,300 Danielson Holdings Corp.* 9
10,888 Donegal Group, Inc. 133
15,200 EMC Insurance Group, Inc. 181
39,700 Enhance Financial Services Group, Inc. 903
3,800 Farm Family Holdings, Inc.* 121
51,000 FBL Financial Group, Inc., Class A 905
1,100 Financial Industries Corp.* 13
5,800 Foremost Corp. of America 117
8,000 Frontier Insurance Group, Inc. 95
6,400 Gainsco, Inc. 31
4,000 Guarantee Life Companies, Inc. 68
40,900 Harleysville Group, Inc. 792
4,000 Highlands Insurance Group, Inc.* 42
4,950 Independence Holding Co. 64
10,400 Intercargo Corp. 120
5,200 Intercontinental Life Corp.* 43
8,400 Kansas City Life Insurance Co. 685
20,300 LandAmerica Financial Group, Inc. 589
2,300 Meadowbrook Insurance Group, Inc. 35
3,800 Merchants Group, Inc. 80
9,680 Meridian Insurance Group, Inc. 152
12,600 Midland Co. 304
7,300 NAC RE Corp. 392
4,300 Navigators Group (The), Inc.* 60
13,100 Nymagic, Inc. 170
700 Old Guard Group, Inc.* 9
6,700 Penn Treaty American Corp.* 166
46,700 Presidential Life Corp. 838
5,192 Professionals Group, Inc.* 136
20,900 PXRE Corp. 376
11,500 Risk Capital Holdings, Inc.* 174
16,000 RLI Corp. 468
7,900 SCPIE Holdings, Inc. 215
51,600 Selective Insurance Group, Inc. 909
8,550 Stewart Information Services Corp. 287
8,900 Trenwick Group, Inc. 250
2,900 Unico American Corp. 29
9,850 United Fire & Casualty Co. 254
16,200 W.R. Berkley Corp. 397
24,000 Zenith National Insurance Corp. 584
------
16,115
------
INVESTMENT COMPANIES - 0.3%
14,300 Kaiser Ventures, Inc.* $ 149
25,100 PEC Israel Economic Corp.* 756
------
905
------
IRON/STEEL - 1.8%
40,300 Birmingham Steel Corp. 159
7,300 Carpenter Technology Corp. 189
7,700 Citation Corp.* 79
19,100 Cleveland-Cliffs, Inc. 651
16,700 Gibraltar Steel Corp.* 333
15,400 Lone Star Technologies, Inc.* 193
31,700 LTV Corp. 170
5,300 Material Sciences Corp.* 34
6,100 National Steel Corp., Class B 50
14,500 Olympic Steel, Inc.* 102
35,500 Oregon Steel Mills, Inc. 371
20,550 Reliance Steel & Aluminum Co. 592
15,225 Roanoke Electric Steel Corp. 169
12,300 Ryerson Tull, Inc. 181
15,700 Shiloh Industries, Inc.* 186
16,300 Steel Technologies, Inc. 128
29,600 Texas Industries, Inc. 734
58,100 Weirton Steel Corp.* 87
29,803 WHX Corp.* 235
------
4,643
------
LEISURE TIME - 0.3%
25,800 Aldila, Inc.* 48
13,800 American Classic Voyager Co.* 224
9,900 Arctic Cat, Inc. 99
11,700 Coastcast Corp.* 114
17,300 Huffy Corp. 208
------
693
------
LODGING - 0.6%
22,300 Homestead Village, Inc.* 54
31,250 Marcus Corp. 375
54,900 Prime Hospitality Corp.* 546
27,400 Red Roof Inns, Inc.* 431
9,700 Sholodge, Inc.* 47
7,900 Suburban Lodges of America, Inc.* 55
5,800 Sunburst Hospitality Corp.* 22
------
1,530
------
See Notes to the Financial Statements.
-----
119
-----
<PAGE> 122
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
MACHINERY - CONSTRUCTION & MINING - 0.4%
25,200 Astec Industries, Inc.* $ 778
30,700 Global Industries Technologies, Inc.* 322
8,700 Harnischfeger Industries, Inc.* 50
------
1,150
------
MACHINERY - DIVERSIFIED - 1.9%
11,400 Agco Corp. 75
17,100 Applied Industrial Technology, Inc. 190
5,700 Applied Science & Technology, Inc.* 72
4,200 Binks Sames Corp. 78
3,700 Cascade Corp. 39
5,200 CTB International Corp.* 33
6,300 DT Industries, Inc. 44
30,600 FSI International, Inc.* 184
9,300 Gardner Denver Machinery, Inc.* 148
7,400 Gehl Co.* 109
37,700 Gerber Scientific, Inc. 761
44,600 Imation Corp.* 736
5,600 Integrated Process Equipment Corp.* 50
19,800 Kulicke & Soffa Industries, Inc.* 500
21,700 Magnetek, Inc.* 182
16,700 Motivepower Industries, Inc.* 419
45,000 Stewart & Stevenson Services, Inc. 346
11,800 Thermo Power Corp. 94
2,800 Thermo Sentron, Inc.* 29
15,600 Thomas Industries, Inc. 293
3,800 Twin Disc, Inc. 73
47,600 Unova, Inc.* 628
------
5,083
------
MEDIA - 1.0%
40,400 Banta Corp. 768
56,200 Bowne & Co., Inc. 657
2,400 Cadmus Communications Corp. 34
2,300 Courier Corp. 48
15,200 Lodgenet Entertainment Corp.* 100
16,700 On Command Corp.* 152
12,500 Paxson Communications Corp.* 107
23,000 Spelling Entertainment Group, Inc.* 201
5,600 Thomas Nelson, Inc. 56
25,250 World Color Press, Inc.* 537
------
2,660
------
METAL FABRICATE/HARDWARE - 1.1%
11,800 Amcast Industrial Corp. 190
13,000 Ampco-Pittsburgh Corp. $ 128
11,100 Atchison Casting Corp.* 90
19,900 Commercial Metals Co. 398
11,500 Fansteel, Inc.* 59
13,200 Johnstown America Industries, Inc.* 196
14,200 Maverick Tube Corp.* 100
47,600 Mueller Industries, Inc.* 1,065
19,000 Quanex Corp. 295
33,700 Rohn Industries, Inc. 75
7,900 Shaw Group, Inc. 110
6,800 Transtechnology Corp. 112
9,000 Wolverine Tube, Inc.* 190
------
3,008
------
METALS - DIVERSIFIED - 0.5%
24,100 ASARCO, Inc. 331
22,200 Brush Wellman, Inc. 322
10,400 Century Aluminum Co. 59
29,700 Coeur D'Alene Mines Corp.* 123
6,600 Commonwealth Industries, Inc. 59
2,700 Easco, Inc. 20
2,200 Gold Reserve, Inc.* 2
74,800 Hecla Mining Co.* 206
6,400 Southern Peru Copper Corp. 64
4,300 Stillwater Mining Co.* 114
------
1,300
------
MINING - 0.4%
149,402 Kinross Gold Corp.* 318
99,900 Meridian Gold, Inc.* 587
6,200 Oglebay Norton Co. 136
11,648 Zemex Corp.* 63
------
1,104
------
MISCELLANEOUS MANUFACTURING - 1.8%
38,200 ACX Technologies, Inc.* 501
1,000 American Biltrite, Inc. 19
12,200 Bairnco Corp. 58
31,400 Dexter Corp. 989
13,164 Essef Corp.* 201
15,600 Furon Co. 197
41,200 Griffon Corp.* 283
35,700 Justin Industries, Inc. 393
11,200 Katy Industries, Inc. 146
See Notes to the Financial Statements.
- -----
120
- -----
<PAGE> 123
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - 1.8% (CONT'D.)
900 Lynch Corp.* $ 63
9,500 M & F Worldwide Corp.* 67
9,700 NCH Corp. 463
5,300 Osmonics, Inc.* 42
5,300 Park-Ohio Holdings Corp.* 74
13,000 Polymer Group, Inc.* 120
10,800 Quixote Corp. 123
800 Safety Components International, Inc.* 7
7,400 SPS Technologies, Inc.* 291
25,150 Tredegar Industries, Inc. 778
------
4,815
------
OFFICE/BUSINESS EQUIPMENT - 0.1%
10,200 General Binding Corp. 265
2,300 TRM Corp.* 16
------
281
------
OFFICE FURNISHINGS - 0.2%
9,900 Virco Manufacturing Corp. 137
8,700 Winsloew Furniture, Inc.* 260
------
397
------
OIL & GAS PRODUCERS - 1.6%
8,600 Atwood Oceanics, Inc.* 258
12,800 Basin Exploration, Inc.* 178
2,778 Bayard Drilling Technologies, Inc.* 17
11,000 Benton Oil & Gas Co.* 40
7,600 Callon Petroleum Co.* 84
48,399 Chesapeake Energy Corp. 69
18,500 Chieftain International, Inc.* 227
1,900 Clayton Williams Energy, Inc.* 10
12,200 Coho Energy, Inc.* 8
3,000 Crystal Oil Co.* 100
15,000 Giant Industries, Inc. 128
31,700 Houston Exploration Co.* 551
23,000 HS Resources, Inc.* 201
22,767 Louis Dreyfus Natural Gas Corp.* 330
18,000 Meridian Resource Corp.* 61
21,700 Ocean Energy, Inc.* 148
11,200 Penn Virginia Corp. 197
11,500 Petrocorp, Inc.* 57
102,000 Ranger Oil Ltd.* 408
31,500 Snyder Oil Corp. 467
7,304 Swift Energy Co.* 62
38,400 Tesoro Petroleum Corp.* $ 422
19,200 Titan Exploration, Inc.* 96
13,600 Unit Corp.* 70
------
4,189
------
OIL & GAS SERVICES - 0.6%
23,200 Daniel Industries, Inc. 354
8,900 Lufkin Industries, Inc. 147
22,800 Pool Energy Services Co.* 349
35,000 RPC, Inc. 225
33,000 Stolt Comex Seaway S.A.* 318
16,500 Stolt Comex Seaway S.A. ADR* 138
12,000 Tuboscope, Inc.* 108
------
1,639
------
PACKAGING & CONTAINERS - 0.1%
22,800 Longview Fibre Co. 264
------
PHARMACEUTICALS - 2.9%
11,300 Alliance Pharmaceutical Corp.* 31
11,400 Axys Pharmaceuticals, Inc.* 48
21,333 Bindley Western Industries, Inc. 609
10,624 Block Drug Co., Class A 436
60,800 Carter-Wallace, Inc. 1,102
12,900 Cephalon, Inc.* 113
3,500 Chirex, Inc.* 86
25,900 Copley Pharmaceutical, Inc.* 220
20,400 COR Therapeutics, Inc.* 203
9,400 Corixa Corp.* 75
14,100 Dura Pharmaceuticals, Inc.* 199
59,500 Gensia Sicor, Inc.* 167
6,866 Herbalife International, Inc., Class A 85
11,800 Immucor, Inc.* 109
19,900 Immune Response Corp.* 175
4,600 Matrix Pharmaceuticals, Inc.* 10
7,400 NABI, Inc.* 23
34,800 NBTY, Inc.* 170
33,000 Neurocrine Biosciences, Inc.* 171
4,500 Neurogen Corp.* 48
14,900 Nexstar Pharmaceuticals, Inc.* 254
6,600 NPS Pharmaceuticals, Inc.* 50
2,200 Onyx Pharmaceuticals, Inc.* 13
25,300 OSI Pharmaceuticals, Inc.* 127
22,900 Perrigo Co.* 160
24,800 Pharmaceutical Resources, Inc. 180
See Notes to the Financial Statements.
-----
121
-----
<PAGE> 124
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 2.9% (CONT'D.)
56,200 Pharmerica, Inc.* $ 281
9,557 Priority Healthcare Corp.* 433
46,800 Roberts Pharmaceutical Corp.* 971
22,600 Sciclone Pharmaceuticals, Inc.* 35
43,400 Scios, Inc.* 393
1,400 Sibia Neurosciences, Inc.* 7
13,000 Syncor International Corp.* 362
14,600 Veterinary Centers of America, Inc.* 206
------
7,552
------
PIPELINES - 0.2%
7,800 Aquila Gas Pipeline Corp. 56
48,900 Western Gas Resources, Inc. 367
------
423
------
REAL ESTATE - 0.9%
21,900 Avatar Holdings, Inc.* 400
49,000 Castle & Cooke, Inc.* 655
3,100 Echelon International Corp.* 61
17,500 Getty Realty Corp. 219
5,533 Jones Lang LaSalle, Inc.* 166
32,200 LNR Property Corp. 636
13,900 Trammell Crow Co.* 257
11,700 Wellsford Real Properties, Inc.* 102
------
2,496
------
REAL ESTATE INVESTMENT TRUSTS - 0.2%
9,500 Sovran Self Storage, Inc. 222
22,000 Winston Hotels, Inc. 177
------
399
------
RETAIL - 8.5%
33,800 Ann Taylor Stores Corp.* 1,493
16,500 Baker (J.), Inc. 62
12,300 Blair Corp. 194
52,900 Bob Evans Farms, Inc. 1,058
20,100 Bombay Co. (The), Inc.* 80
11,300 Bon-Ton Stores (The), Inc.* 83
27,700 Boston Chicken, Inc.* 19
10,600 Brookstone, Inc.* 134
24,500 Brown Group, Inc. 323
11,500 Buffets, Inc.* 114
16,100 Building Material Holding Corp.* 163
64,320 Burlington Coat Factory Warehouse Corp. 756
12,600 Cameron Ashley Building Products, Inc. $ 115
33,000 Cash America Investments, Inc. 425
7,950 CEC Entertainment, Inc.* 285
164,000 Charming Shoppes, Inc.* 635
15,900 Chart House Enterprises, Inc.* 74
7,800 Copart, Inc.* 162
45,200 Corporate Express, Inc.* 234
5,900 Creative Computers, Inc.* 178
7,300 Discount Auto Parts, Inc.* 157
25,200 Dress Barn, Inc.* 350
17,800 Drug Emporium, Inc.* 86
3,000 Duckwall Alto Stores, Inc.* 29
25,900 Eagle Hardware & Garden, Inc.* 989
23,400 Egghead.com, Inc.* 426
11,300 Einstein/Noah Bagel Corp.* 15
24,500 Filene's Basement Corp.* 47
36,400 Fingerhut Companies, Inc. 910
8,141 Frisch's Restaurants, Inc. 78
18,700 Good Guys, Inc.* 72
14,200 Gottschalks, Inc.* 98
45,300 Handleman Co.* 606
11,800 Haverty Furniture, Inc. 299
90,000 Heilig-Meyers Co. 467
51,000 Homebase, Inc.* 226
25,300 Hughes Supply, Inc. 576
16,300 Intertan, Inc.* 159
34,600 Jan Bell Marketing, Inc.* 147
3,900 Jo-Ann Stores, Inc., Class A* 54
7,600 Just For Feet, Inc.* 95
4,100 Lazare Kaplan International, Inc.* 28
21,500 Lechters, Inc.* 46
13,000 Lillian Vernon Corp. 156
38,500 Lone Star Steakhouse & Saloon, Inc.* 395
49,400 Michaels Stores, Inc.* 1,220
46,700 Micro Warehouse, Inc.* 753
11,437 Movado Group, Inc. 286
24,900 Musicland Stores Corp.* 219
4,900 Noland Co. 103
13,500 Piccadilly Cafeterias, Inc. 143
8,100 PS Group Holdings, Inc.* 66
2,800 Quality Dining, Inc.* 8
4,600 Rare Hospitality International, Inc.* 63
4,200 REX Stores Corp.* 49
66,100 Ryan's Family Steak Houses, Inc.* 797
1,100 S & K Famous Brands, Inc.* 10
See Notes to the Financial Statements.
- -----
122
- -----
<PAGE> 125
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
RETAIL - 8.5% (CONT'D.)
43,300 Service Merchandise Co.* $ 11
17,700 Shoe Carnival, Inc.* 221
40,400 Shopko Stores, Inc.* 1,207
29,700 Sizzler International, Inc.* 56
11,000 Sport Supply Group, Inc.* 89
26,600 Sports Authority, Inc.* 195
24,000 Syms Corp.* 179
20,100 Taco Cabana, Inc., Class A* 177
37,500 Talbots, Inc. 914
17,100 Tandycrafts, Inc.* 37
25,500 TCBY Enterprises, Inc. 153
2,000 Tractor Supply Co.* 51
8,000 Trak Auto Corp.* 69
7,200 Ugly Duckling Corp.* 40
11,400 United Auto Group, Inc.* 87
4,900 Uno Restaurant Corp.* 34
43,100 Value City Department Stores, Inc.* 420
49,400 Venator Group, Inc.* 349
12,400 Vicorp Restaurants, Inc.* 198
9,400 Wolohan Lumber Co. 120
29,100 Zale Corp.* 995
-------
22,417
-------
SAVINGS & LOANS - 4.8%
15,114 Alliance Bancorp 268
3,400 Ambanc Holding Co., Inc. 57
660 Ameriana Bancorp 10
5,000 American Bank of Connecticut 98
13,000 Anchor Bancorp Wisconsin, Inc. 200
8,675 Andover Bancorp, Inc. 235
12,700 Bank Plus Corp.* 53
17,700 Bay View Capital Corp. 334
4,100 Calumet Bancorp, Inc.* 116
1,200 Camco Financial Corp. 17
10,050 Coastal Bancorp, Inc. 167
8,000 Commonwealth Bancorp, Inc. 121
3,400 Community Federal Bancorp, Inc. 42
6,800 Dime Community Bancshares, Inc. 156
43,074 Downey Financial Corp. 789
1,500 Eagle Bancshares, Inc. 26
7,260 ESB Financial Corp. 111
800 FCB Financial Corp. 23
4,766 FFLC Bancorp, Inc. 81
11,200 FFY Financial Corp. 206
2,200 Fidelity Bancorp, Inc. 51
8,000 Fidelity Bankshares, Inc. $144
1,400 First Bell Bancorp, Inc. 24
1,900 First Bergen Bancorp, Inc. 45
2,300 First Defiance Financial Corp. 24
10,200 First Essex Bancorp, Inc. 154
2,800 First Federal Bancshares of Arkansas, Inc. 46
11,100 First Federal Capital Corp. 130
5,700 First Federal Financial of Kentucky, Inc. 135
17,160 First Indiana Corp. 326
7,200 First Liberty Financial Corp. 152
12,000 First Northern Capital Corp. 132
4,900 First Savings Bancorp, Inc. 107
30,917 First Sentinel Bancorp, Inc. 247
5,610 First Washington Bancorp, Inc. 109
28,800 Firstfed Financial Corp.* 463
4,700 Flushing Financial Corp. 67
11,800 Haven Bancorp, Inc. 155
2,900 Hawthorne Financial Corp.* 44
3,200 HF Bancorp, Inc.* 56
600 HF Financial Corp. 9
9,050 HMN Financial, Inc. 103
2,500 Home Bancorp 69
5,625 Home Federal Bancorp 123
10,090 Horizon Financial Corp. 135
1,000 Industrial Bancorp, Inc. 19
400 Iroquois Bancorp, Inc. 8
4,200 ITLA Capital Corp.* 61
13,600 Jefferson Savings Bancorp, Inc. 155
13,400 JSB Financial, Inc. 672
6,100 Klamath First Bancorp, Inc. 100
11,603 MAF Bancorp, Inc. 258
4,866 Massbank Corp. 184
12,200 Medford Bancorp, Inc. 195
3,025 Monterey Bay Bancorp, Inc. 33
700 North Central Bancshares, Inc. 12
6,400 Ocean Financial Corp. 92
12,700 Ocwen Financial Corp.* 112
7,513 Ottawa Financial Corp. 156
2,300 Pamrapo Bancorp, Inc. 54
1,500 Parkvale Financial Corp. 32
4,900 Pennfed Financial Services, Inc. 78
500 Peoples' Bancorp, Inc. 10
400 Permanent Bancorp, Inc. 4
7,500 PFF Bancorp, Inc.* 131
7,968 Quaker City Bancorp, Inc. 120
See Notes to the Financial Statements.
-----
123
-----
<PAGE> 126
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
SAVINGS & LOANS - 4.8% (CONT'D.)
25,987 Queens County Bancorp, Inc. $ 702
11,800 Reliance Bancorp, Inc. 339
7,200 St. Francis Capital Corp. 309
55,751 St. Paul Bancorp, Inc. 1,207
7,500 Sterling Financial Corp.* 116
6,000 TF Financial Corp. 95
25,216 Webster Financial Corp. 728
17,800 Westcorp 138
7,600 Westerfed Financial Corp. 128
2,800 Western Ohio Financial Corp. 63
600 WVS Financial Corp. 9
12,569 York Financial Corp. 182
-------
12,662
-------
SEMICONDUCTORS - 1.8%
800 Align-Rite International, Inc.* 9
11,600 Alliance Semiconductor Corp.* 29
63,600 Cirrus Logic, Inc.* 406
50,900 Cypress Semiconductor Corp. 458
24,600 Dallas Semiconductor Corp. 950
9,600 Electroglas, Inc.* 124
12,600 ESS Technology, Inc.* 65
12,600 Exar Corp.* 203
4,900 Integrated Silicon Solutions, Inc.* 13
40,200 International Rectifier Corp.* 281
10,200 Kopin Corp.* 141
25,500 Marshall Industries, Inc.* 344
3,000 Mattson Technology, Inc.* 20
20,300 MEMC Electronics Materials, Inc.* 112
1,900 Micro Linear Corp.* 8
17,000 Oak Technology, Inc.* 52
35,400 Pioneer Standard Electronics, Inc. 232
11,400 Richardson Electronics Ltd. 59
32,000 Silicon Valley Group, Inc.* 394
3,800 Siliconix, Inc.* 80
4,100 Triquint Semiconductor, Inc.* 76
28,000 Ultratech Stepper, Inc.* 396
9,600 VLSI Technology, Inc.* 186
11,100 Watkins-Johnson Co. 251
-------
4,889
-------
SHIPBUILDING - 0.2%
19,700 Avondale Industries, Inc.* 581
-------
SOFTWARE - 2.4%
1,800 Adept Technology, Inc.* $ 12
6,600 AVT Corp.* 158
20,700 Banyan Systems, Inc.* 252
18,000 Caere Corp.* 189
11,000 CMGI, Inc.* 2,014
19,800 CustomTracks Corp.* 297
3,400 DIGI International, Inc.* 23
9,100 Excite, Inc.* 1,274
3,000 HCIA, Inc.* 14
12,500 Industrial International, Inc.* 55
38,500 Information Resources, Inc.* 248
44,000 Inprise Corp.* 170
4,200 Inso Corp.* 32
16,511 Netmanage, Inc.* 40
7,600 Netopia, Inc.* 62
1,200 Orcad, Inc.* 10
5,957 Phoenix Technologies Ltd.* 51
3,300 Prism Solutions, Inc.* 6
4,500 Progress Software Corp.* 154
8,400 QAD, Inc.* 33
15,600 Rainbow Technologies, Inc.* 156
49,500 Santa Cruz Operation, Inc.* 269
245 Schawk, Inc. 2
5,900 Software Spectrum, Inc.* 80
6,200 TCSI Corp.* 12
15,000 Verity, Inc.* 502
9,900 Walker Interactive Systems, Inc.* 42
12,600 Wall Data, Inc.* 181
-------
6,338
-------
TELECOMMUNICATION EQUIPMENT - 1.8%
13,800 Allen Telecom, Inc.* 84
49,100 Antec Corp.* 1,056
12,500 Aspect Telecommunications Corp.* 83
10,200 Aydin Corp.* 135
9,600 Centigram Communications Corp.* 95
63,100 Commscope, Inc.* 1,321
12,500 Corsair Communications, Inc.* 64
11,625 EMS Technologies, Inc.* 164
85,600 Executone Information Systems, Inc.* 310
9,300 Galileo Corp.* 45
82,800 Glenayre Technologies, Inc.* 285
12,200 Interdigital Communications Corp.* 53
18,300 Mosaix, Inc.* 153
28,700 Network Equipment Technologies, Inc.* 257
See Notes to the Financial Statements.
- -----
124
- -----
<PAGE> 127
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT - 1.8% (CONT'D.)
4,400 Northeast Optic Network, Inc.* $ 62
3,300 Ortel Corp.* 23
4,700 Periphonics Corp.* 30
3,000 Proxim, Inc.* 86
16,900 Spectralink Corp.* 63
8,000 Stanford Telecommunications, Inc.* 124
9,100 Symmetricom, Inc.* 57
6,900 Vertex Communications Corp.* 110
30,882 VTEL Corp.* 106
7,503 World Access, Inc.* 61
------
4,827
------
TELECOMMUNICATIONS - 0.8%
17,400 Aerial Communications, Inc.* 135
22,200 California Microwave, Inc.* 239
17,700 Cellular Communications of Puerto Rico* 478
7,000 Commonwealth Telephone
Enterprises, Inc. 258
7,400 Davel Communications Group, Inc.* 52
5,400 IDT Corp.* 97
21,800 Intek Global Corp.* 38
45,625 Metrocall, Inc.* 138
36,500 Powertel, Inc.* 520
------
1,955
------
TELEPHONE - 0.2%
6,680 Atlantic Tele-Network, Inc.* 60
12,877 Roseville Communications Co. 386
------
446
------
TEXTILES - 0.4%
12,400 Angelica Corp. 173
1,100 Conso International Corp.* 7
10,800 Crown Crafts, Inc. 54
11,400 Dixie Group, Inc. 81
7,700 FAB Industries, Inc. 116
31,500 Guilford Mills, Inc. 276
3,362 Pillowtex Corp. 48
13,300 Unifirst Corp. 281
------
1,036
------
TOBACCO - 0.0%
17,220 Standard Commercial Corp. 82
------
Transportation - 3.6%
9,300 Allied Holdings, Inc.* $ 89
19,200 American Freightways Corp.* 247
26,500 Arkansas Best Corp.* 180
11,400 Arnold Industries, Inc. 170
9,100 Celadon Group, Inc.* 74
19,600 Circle International Group, Inc. 285
13,100 Consolidated Freightways Corp.* 154
48,100 Fritz Cos., Inc.* 331
22,800 Frozen Food Express Industries, Inc. 145
4,700 FRP Properties, Inc.* 108
5,400 Gulfmark Offshore, Inc.* 64
46,000 Hunt (J.B.) Transportation Services, Inc. 966
33,000 Kirby Corp.* 625
5,400 Landstar System, Inc.* 179
17,200 Maritrans, Inc. 99
6,000 Marten Transport Ltd.* 83
11,800 Matlack Systems, Inc.* 66
16,300 M.S. Carriers, Inc.* 431
28,800 Offshore Logistics, Inc.* 335
11,300 Old Dominion Freight Lines, Inc.* 128
58,300 OMI Corp.* 117
62,950 Overseas Shipholding Group, Inc. 716
12,400 Railtex, Inc.* 141
27,900 Roadway Express, Inc. 476
47,800 Teekay Shipping Corp. 789
32,000 U.S. Freightways Corp. 1,052
56,687 Werner Enterprises, Inc. 893
38,900 Yellow Corp.* 676
------
9,619
------
TRUCKING & LEASING - 1.8%
58,300 AMERCO, Inc.* 1,254
19,200 Greenbrier Cos., Inc. 182
37,350 Interpool, Inc. 504
83,700 Rollins Truck Leasing Corp. 790
22,593 Varlen Corp. 497
38,700 Xtra Corp. 1,483
------
4,710
------
WATER - 1.2%
13,100 American States Water Co. 318
9,900 Aquarion Co. 272
8,400 California Water Service Group 203
------
10,700 E'town Corp. 431
------
See Notes to the Financial Statements.
-----
125
-----
<PAGE> 128
SCHEDULES OF INVESTMENTS MARCH 31, 1999
SMALL CAP FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
WATER - 1.2% (CONT'D.)
13,684 Philadelphia Suburban Corp. $ 311
4,300 SJW Corp. 278
69,268 United Water Resources, Inc. 1,437
--------
3,250
--------
TOTAL COMMON STOCKS
(cost $267,760) 260,319
--------
RIGHTS - 0.0%
7,778 Arch Communications Group, Inc.,
Exp. 2/18/00
(cost $0) 0
--------
WARRANTS - 0.0%
50 Coram Healthcare Corp.,
Exp. 7/11/99* 0
255 Millicom American Satellite,
Exp. 6/30/99* 0
18 Sound Advice, Inc.,
Exp. 6/14/99* 0
50 Xytronix, Inc., Class B,
Exp. 8/11/01* 0
9 York Research Corp., Class B,
Exp. 11/30/99* 0
--------
TOTAL WARRANTS
(cost $0) 0
--------
OTHER - 0.0%
10,000 Escrow American Medical
Electronics, Inc.* 0
220 Escrow Millicom, Inc. * 0
300 Escrow Northeast Bancorp, Inc.* 0
4,500 Escrow Strawbridge & Clothier, Inc.* 0
--------
TOTAL OTHER
(cost $0) 0
--------
SHORT-TERM INVESTMENTS - 1.4%
$2,504 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99 $ 2,504
990 U.S. Treasury Bill,
4.28%, 6/24/99(1) 979
--------
Total Short-Term Investments
(cost $3,483) 3,483
--------
Total Investments - 99.8%
(cost $271,243) 263,802
Other Assets less Liabilities - 0.2% 632
--------
NET ASSETS - 100.0% $264,434
========
OPEN FUTURES CONTRACTS:
Unrealized
Notional Gain
Number of Amount Contract Contract (Loss)
Type Contracts (000s) Position Exp. (000s)
- -------------------------------------------------------------------------------
Russell 2000 15 $2,989 Long 6/99 $ 19
S&P/Barra Value 5 709 Long 6/99 (29)
-----
$(10)
=====
(1) Security pledged as collateral to cover margin requirements for open
futures contracts.
See Notes to the Financial Statements.
- -----
126
- -----
<PAGE> 129
NORTHERN FUNDS Annual Report
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERNATIONAL GROWTH EQUITY FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS - 94.3%
AUSTRALIA - 3.1%
525,000 Broken Hill Proprietary Co. Ltd. $ 4,459
75,000 News Corp. Ltd. ADR 2,213
--------
6,672
--------
AUSTRIA - 1.2%
35,000 VA Technologie A.G. 2,517
--------
CHINA - 0.6%
5,000,000 Huaneng Power International, Inc.,
H Shares 1,252
--------
FRANCE - 10.0%
18,000 Axa - UAP 2,386
8,500 Canal Plus 2,491
30,000 Elf Aquitaine S.A. 4,074
28,000 Lafarge S.A. 2,524
9,000 LVMH - Moet Hennessy Louis Vuitton 2,230
14,000 Societe Generale, A Shares 2,690
15,000 Suez Lyonnaise des Eaux 2,776
10,000 Vivendi (Ex-Generale des Eaux) 2,460
--------
21,631
--------
GERMANY - 9.2%
78,000 BASF A.G. 2,855
3,700 Bayerische Motoren Werke A.G. 2,425
41,000 Deutsche Bank A.G. 2,109
65,000 Hoechst A.G. 2,816
19,000 Mannesmann A.G. 2,427
36,000 Siemens A.G. 2,406
39,000 VEBA A.G. 2,050
41,000 Volkswagen A.G. 2,731
--------
19,819
--------
GREECE - 0.7%
60,000 Hellenic Telecommunications
Organization S.A. 1,455
--------
HONG KONG - 0.6%
900,000 Beijing Enterprises Holdings Ltd. 1,196
--------
INDIA - 0.5%
110,000 Mahanagar Telephone Nigam Ltd. GDR 1,168
--------
IRELAND - 1.0%
30,000 Elan Corp. PLC ADR* $ 2,093
--------
ITALY - 4.7%
80,000 Assicurazioni Generali 3,204
600,000 ENI S.p.A. 3,822
300,000 Telecom Italia S.p.A. 3,187
--------
10,213
--------
JAPAN - 23.0%
380,000 Fuji Heavy Industries Ltd. 2,352
170,000 Fujitsu Ltd. 2,730
45,000 Jafco Co. Ltd. 2,097
80,000 JUSCO Co. Ltd. 1,392
1,550,000 Kawasaki Steel Corp. 2,618
15,000 Keyence Corp. 2,242
75,000 Kissei Pharmaceutical Co. Ltd. 1,520
260,000 Mitsubishi Estate Co. Ltd. 2,645
375,000 Mitsui & Co. Ltd. 2,536
600,000 Nikko Securities Co. Ltd. 2,786
140,000 Nikon Corp. 1,702
270 Nippon Telegraph & Telephone Corp. 2,645
450,000 Oji Paper Co. Ltd. 2,398
250,000 Omron Corp. 3,123
105,000 Pioneer Electronic Corp. 1,951
32,000 Promise Co. Ltd. 1,691
200,000 Sanwa Bank Ltd. 2,171
95,000 Shimano, Inc. 2,314
23,000 Sony Corp. ADR 2,100
160,000 Sumitomo Bank Ltd. 2,166
200,000 Sumitomo Electric Industries 2,371
305,000 Toshiba Corp. 2,083
--------
49,633
--------
NETHERLANDS - 5.6%
130,000 Buhrmann N.V. 2,260
17,000 Equant N.V. ADR* 1,279
37,000 ING Groep N.V. 2,039
18,000 Koninklijke (Royal) Philips Electronics N.V. 1,484
38,000 Unilever N.V. 2,525
110,000 Vedior N.V. 2,547
--------
12,134
--------
NORWAY - 1.2%
680,000 Den Norske Bank A.S.A. 2,490
--------
See Notes to the Financial Statements.
-----
127
-----
<PAGE> 130
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERNATIONAL GROWTH EQUITY FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
PHILIPPINES - 0.7%
60,000 Philippine Long Distance Telephone Co. $ 1,579
--------
PORTUGAL - 0.7%
35,000 Portugal Telecom S.A. 1,568
--------
SOUTH KOREA - 0.5%
90,000 Korea Electric Power Corp. ADR 1,142
--------
SPAIN - 2.3%
100,000 Argentaria S.A. 2,403
60,000 Telefonica de Espana 2,544
--------
4,947
--------
SWEDEN - 1.2%
110,000 Astra AB, A Shares 2,522
--------
SWITZERLAND - 5.1%
2,700 ABB A.G. Bearer 3,572
1,400 Novartis A.G. 2,271
6,500 Swisscom A.G.* 2,538
8,500 UBS A.G. 2,670
--------
11,051
--------
THAILAND - 0.7%
300,000 BEC World Public Co. Ltd. 1,453
--------
UNITED KINGDOM - 21.7%
235,000 Allied Zurich PLC* 3,169
105,000 Barclays PLC 3,019
185,000 Bass PLC 2,513
285,000 British Sky Broadcasting Group PLC 2,445
655,000 BTR Siebe PLC 2,889
38,000 Glaxo Wellcome PLC ADR 2,544
205,000 Great Universal Stores PLC 2,233
83,000 HSBC Holdings PLC 2,677
300,000 Imperial Chemical Industries PLC 2,680
350,000 Marks & Spencer PLC 2,305
105,000 Pearson PLC 2,392
165,000 Rio Tinto PLC 2,289
300,000 Royal & Sun Alliance Insurance
Group PLC 2,831
250,000 Scottish & Newcastle PLC 2,690
780,000 Shell Transport & Trading Co. 5,248
430,000 TI Group PLC 2,796
11,000 Vodafone Group PLC ADR 2,065
--------
46,785
--------
TOTAL COMMON STOCKS
(cost $183,864) $203,320
--------
SHORT-TERM INVESTMENTS - 4.3%
$ 757 FHLB DISCOUNT NOTE,
4.80%, 4/1/99 757
8,566 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99 8,566
--------
Total Short-Term Investments
(cost $9,323) 9,323
--------
Total Investments - 98.6%
(cost $193,187) 212,643
Other Assets less Liabilities - 1.4% 3,013
--------
NET ASSETS - 100.0% $215,656
========
At March 31, 1999, the International Growth Equity Fund's
investments were diversified as follows:
Industry
Sector
- -----------------------------------
Auto 2.2%
Basic Materials 14.3
Building 1.2
Capital Goods 10.1
Chemicals 1.3
Consumer Goods 13.2
Financial Services 16.9
Food/Beverages 2.3
Insurance 1.5
Media 2.8
Oil 3.1
Other 8.3
Pharmaceuticals 1.7
Real Estate 1.2
Retail 1.7
Technology 10.5
Telecommunications 3.8
Transportation 1.6
Utilities 2.3
------
Total 100.0%
------
See Notes to the Financial Statements.
- -----
128
- -----
<PAGE> 131
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERNATIONAL SELECT EQUITY FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS - 94.9%
AUSTRALIA - 3.0%
250,000 Broken Hill Proprietary Co. Ltd. $ 2,123
55,000 News Corp. Ltd. ADR 1,623
-------
3,746
-------
FRANCE - 9.5%
18,000 Axa - UAP 2,386
9,000 Canal Plus 2,638
26,000 Lafarge S.A. 2,344
9,000 LVMH - Moet Hennessy Louis Vuitton 2,230
9,000 Vivendi (Ex-Generale des Eaux) 2,214
-------
11,812
-------
GERMANY - 8.7%
65,000 BASF A.G. 2,379
3,500 Bayerische Motoren Werke A.G. 2,294
50,000 Hoechst A.G. 2,167
18,000 Mannesmann A.G. 2,299
25,000 Volkswagen A.G. 1,665
-------
10,804
-------
GREECE - 1.6%
80,000 Hellenic Telecommunications
Organization S.A. 1,940
-------
HONG KONG - 1.6%
1,500,000 Beijing Enterprises Holdings Ltd. 1,994
-------
IRELAND - 1.5%
27,000 Elan Corp. PLC ADR* 1,883
-------
ITALY - 5.7%
53,000 Assicurazioni Generali 2,123
450,000 ENI S.p.A. 2,866
200,000 Telecom Italia S.p.A. 2,125
-------
7,114
-------
JAPAN - 22.6%
350,000 Fuji Heavy Industries Ltd. 2,166
150,000 Fujitsu Ltd. 2,409
35,000 Jafco Co. Ltd. 1,631
17,000 Keyence Corp. 2,541
75,000 Kissei Pharmaceutical Co. Ltd. 1,520
375,000 Mitsui & Co. Ltd. $ 2,536
150,000 Nikon Corp. 1,824
200,000 Omron Corp. 2,499
140,000 Pioneer Electronic Corp. 2,601
30,000 Promise Co. Ltd. 1,586
190,000 Sanwa Bank Ltd. 2,062
100,000 Shimano, Inc. 2,436
200,000 Sumitomo Electric Industries 2,371
-------
28,182
-------
NETHERLANDS - 7.0%
25,000 Equant N.V. ADR* 1,881
32,000 ING Groep N.V. 1,764
55,000 Royal Dutch Petroleum Co. ADR 2,860
95,000 Vedior N.V. 2,200
-------
8,705
-------
SOUTH KOREA - 1.3%
125,000 Korea Electric Power Corp. ADR 1,586
-------
SPAIN - 1.9%
100,000 Argentaria S.A. 2,403
-------
SWEDEN - 1.6%
90,000 Astra AB, A Shares 2,063
-------
SWITZERLAND - 7.0%
1,800 ABB A.G. Bearer 2,381
1,250 Novartis A.G. 2,028
4,500 Swisscom A.G.* 1,757
8,000 UBS A.G. 2,513
-------
8,679
-------
THAILAND - 1.4%
350,000 BEC World Public Co. Ltd. 1,696
-------
UNITED KINGDOM - 20.5%
175,000 Allied Zurich PLC* 2,360
100,000 Barclays PLC 2,875
140,000 Bass PLC 1,902
270,000 British Sky Broadcasting Group PLC 2,317
35,000 Glaxo Wellcome PLC ADR 2,343
175,000 Great Universal Stores PLC 1,907
275,000 Marks & Spencer PLC 1,811
See Notes to the Financial Statements.
-----
129
-----
<PAGE> 132
SCHEDULES OF INVESTMENTS MARCH 31, 1999
INTERNATIONAL SELECT EQUITY FUND (continued)
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
UNITED KINGDOM - 20.5% (CONT'D.)
115,000 Pearson PLC $ 2,619
450,000 TI Group PLC 2,926
245,000 Unilever N.V. 2,276
12,000 Vodafone Group PLC ADR 2,253
--------
25,589
--------
TOTAL COMMON STOCKS
(cost $107,686) 118,196
--------
PRINCIPAL
AMOUNT
(000s)
- ---------
SHORT-TERM INVESTMENTS - 7.0%
$3,686 FHLB Discount Note,
4.87%, 4/1/99 3,686
4,974 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99 4,974
--------
Total Short-Term Investments
(cost $8,660) 8,660
--------
Total Investments - 101.9%
(cost $116,346) 126,856
Liabilities less Other Assets - (1.9)% (2,343)
--------
NET ASSETS - 100.0% $124,513
========
At March 31, 1999, the International Select Equity Fund's
investments were diversified as follows:
Industry
Sector
- -----------------------------------
Auto 3.6%
Basic Industries/Energy 5.9
Building 1.9
Capital Goods 12.0
Chemicals 1.7
Consumer Goods 20.2
Financial Services 15.4
Food/Beverage 1.8
Insurance 1.9
Media 4.7
Oil 2.3
Other 9.5
Pharmaceuticals 1.2
Retail 1.5
Technology 8.5
Telecommunications 1.4
Transportation 3.5
Utilities 3.0
------
Total 100.0%
------
See Notes to the Financial Statements.
- -----
130
- -----
<PAGE> 133
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TECHNOLOGY FUND
NUMBER VALUE
OF SHARES (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS - 98.6%
COMMUNICATIONS EQUIPMENT - 16.1%
170,000 3Com Corp.* $ 3,963
171,900 Ascend Communications, Inc.* 14,386
91,043 Cisco Systems, Inc.* 9,975
42,900 Lucent Technologies, Inc. 4,623
156,400 Northern Telecom Ltd. 9,716
123,500 Tellabs, Inc.* 12,072
6,400 Uniphase Corp.* 737
-------
55,472
-------
COMPUTERS - 18.0%
179,500 Compaq Computer Corp. 5,688
234,200 Dell Computer Corp.* 9,573
102,000 EMC Corp.* 13,030
111,500 Hewlett-Packard Co. 7,561
44,500 International Business Machines Corp. 7,888
208,000 Seagate Technology, Inc.* 6,149
96,400 Sun Microsystems, Inc.* 12,044
-------
61,933
-------
ELECTRONICS - 2.9%
14,200 Sanmina Corp.* 905
184,000 Solectron Corp.* 8,936
-------
9,841
-------
HEALTH CARE - 0.4%
22,000 Cerus Corp.* 490
32,600 Colorado Medtech, Inc.* 363
15,600 Healtheon Corp.* 663
-------
1,516
-------
MACHINERY - DIVERSIFIED - 3.2%
178,000 Applied Materials, Inc.* 10,980
-------
RETAIL - 4.0%
72,300 Amazon.com, Inc.* 12,449
7,500 eBay, Inc.* 1,030
2,900 Priceline.com, Inc.* 240
-------
13,719
-------
SEMICONDUCTORS - 17.1%
10,500 Altera Corp.* $ 625
75,000 Intel Corp. 8,934
6,500 Linear Technology Corp. 333
9,900 Maxim Integrated Products, Inc.* 536
148,800 Micron Technology, Inc.* 7,180
134,400 Motorola, Inc. 9,845
104,200 STMicroelectronics N.V.-New York Shares* 10,120
103,700 Texas Instruments, Inc. 10,292
269,200 Xilinx, Inc.* 10,919
-------
58,784
-------
SOFTWARE & SERVICES - 36.9%
156,421 America Online, Inc.* 22,836
7,000 At Home Corp., Series A* 1,103
164,700 Automatic Data Processing, Inc. 6,815
7,695 Autoweb.com, Inc.* 274
8,100 Broadcast.com, Inc.* 957
14,000 Citrix Systems, Inc.* 534
163,000 Computer Associates International, Inc. 5,797
94,900 Computer Sciences Corp.* 5,237
170,300 Electronic Arts, Inc.* 8,089
142,200 Electronic Data Systems Corp. 6,923
232,100 First Data Corp. 9,922
117,700 Intuit, Inc.* 11,976
112,500 Microsoft Corp.* 10,083
640 MiningCo.com, Inc.* 57
292,270 Oracle Corp.* 7,709
415,300 Parametric Technology Corp.* 8,202
315,800 Peoplesoft, Inc.* 4,619
19,106 Siebel Systems, Inc.* 908
15,900 Synopsys, Inc.* 855
7,050 Vignette Corp.* 531
79,000 Yahoo!, Inc.* 13,302
-------
126,729
-------
TOTAL COMMON STOCKS
(cost $248,177) 338,974
-------
See Notes to the Financial Statements.
-----
131
-----
<PAGE> 134
SCHEDULES OF INVESTMENTS MARCH 31, 1999
TECHNOLOGY FUND (continued)
PRINCIPAL
AMOUNT VALUE
(000s) (000s)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 3.5%
$11,868 Societe Generale, Grand Cayman,
Eurodollar Time Deposits,
5.125%, 4/1/99
(cost $11,868) $ 11,868
--------
Total Investments - 102.1%
(cost $260,045) 350,842
Liabilities less Other Assets - (2.1)% (7,133)
--------
NET ASSETS - 100.0% $343,709
========
See Notes to the Financial Statements.
- -----
132
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<PAGE> 135
NORTHERN FUNDS Annual Report
NOTES TO THE
FINANCIAL STATEMENTS
MARCH 31, 1999
1. ORGANIZATION
Northern Funds was organized October 12, 1993 as a Massachusetts business trust
and is registered under the Investment Company Act of 1940 as an open-end
management investment company. The Money Market, U.S. Government Money Market,
U.S. Government Select Money Market, Municipal Money Market, California
Municipal Money Market, U.S. Government, Intermediate Tax-Exempt, Florida
Intermediate Tax-Exempt, Fixed Income, Tax-Exempt, California Tax-Exempt,
International Fixed Income, High Yield Municipal, High Yield Fixed Income,
Income Equity, Stock Index, Growth Equity, Select Equity, Mid Cap Growth, Small
Cap, International Growth Equity, International Select Equity and Technology
Funds (collectively the "Funds") are separate, diversified investment portfolios
of Northern Funds, except the California Municipal Money Market, Florida
Intermediate Tax-Exempt, California Tax-Exempt and International Fixed Income
Funds which are non-diversified portfolios of Northern Funds. Non-diversified
portfolios may invest a relatively high percentage of their net assets in
obligations of a limited number of issuers. Each of the Funds maintains its own
investment objective.
The Funds have entered into an Investment Advisory Agreement with The
Northern Trust Company ("Northern Trust" or the "Adviser"). Additionally,
Northern Trust Quantitative Advisors, Inc., a wholly-owned subsidiary of
Northern Trust Corporation, became the investment adviser for the Stock Index
and Small Cap Funds. Northern Trust also serves as custodian, fund accountant
and transfer agent for the Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. VALUATION OF SECURITIES - Short-term investments held by the Funds are
valued using the amortized cost method, which approximates market value.
Under this method, investments purchased at a discount or premium are
valued by amortizing the difference between the original purchase price and
maturity value of the issue over the period to maturity. Securities which
are traded on a recognized U.S. or foreign securities exchange are
generally valued at the last quoted sales price on the securities exchange
on which the securities are primarily traded. If securities traded on a
foreign securities exchange are not traded on a valuation date, they will
be valued at the most recent quoted sales price. Securities that are traded
in the U.S. over-the-counter markets, absent a last quoted sales price, are
valued at the last quoted bid price. Securities which are traded in the
foreign over-the-counter markets are generally valued at the last sales
price. Insurance funding agreements are valued at cost plus accrued
interest, which approximates market value. Any securities for which no
current quotations are readily available are valued at fair value as
determined in good faith by the Adviser under the supervision of the Board
of Trustees.
B. REPURCHASE AGREEMENTS - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest, is
required to equal or exceed the market value of the repurchase agreement.
The underlying collateral for all repurchase agreements is held in a
customer-only account of Northern Trust, as custodian for the Funds, at the
Federal Reserve Bank of Chicago.
C. FUTURES CONTRACTS - Certain Funds may enter into long financial futures
contracts to maintain liquidity or short financial futures contracts for
hedging purposes. These Funds may also enter into futures contracts for
speculative purposes. Futures contracts are valued based upon their quoted
daily settlement prices; changes in initial settlement value are accounted
for as unrealized appreciation (depreciation) until the contracts are
terminated at which time realized gains and losses are recognized.
A Fund bears the market risk arising from changes in the value of these
financial instruments. At the time a Fund enters into a futures contract,
it is required to make a margin deposit in a segregated account of a
specified amount of cash or eligible securities. Subsequently, as the
market price of the futures contract fluctuates, gains and losses are
recognized and payments are made, on a daily
-----
133
-----
<PAGE> 136
basis, between the Fund and the broker. The Statements of Operations
reflect gains and losses as realized for closed futures contracts and as
unrealized for open contracts. At March 31, 1999, the Stock Index, Growth
Equity and Small Cap Funds had entered into exchange-traded long futures
contracts and the aggregate market value of securities pledged to cover
margin requirements for open positions was approximately $643,000, $694,000
and $979,000, respectively.
D. STRIPPED SECURITIES - Stripped securities represent the right to receive
future interest payments (interest only stripped securities) or principal
payments (principal only stripped securities). The value of variable rate
interest only stripped securities varies directly with changes in interest
rates, while the value of fixed rate interest only stripped securities and
the value of principal only stripped securities vary inversely with changes
in interest rates.
E. FOREIGN CURRENCY TRANSLATIONS - Values of investments denominated in
foreign currencies are converted into U.S. dollars using the spot market
rate of exchange at the time of valuation. Purchases and sales of
investments, interest and dividend income are translated into U.S. dollars
using the spot market rate of exchange prevailing on the respective dates
of such transactions. The gains or losses on investments resulting from
changes in foreign exchange rates are included with net realized and
unrealized gains (losses) on investments.
F. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - Certain Funds are authorized
to enter into forward foreign currency exchange contracts for the purchase
of a specific foreign currency at a fixed price on a future date as a hedge
against either specific transactions or portfolio positions, or as a
cross-hedge transaction or for speculative purposes. The objective of a
Fund's foreign currency hedging transactions is to reduce the risk that the
U.S. dollar value of a Fund's foreign currency denominated securities will
decline in value due to changes in foreign currency exchange rates. All
forward foreign currency contracts are "marked-to-market" daily at the
applicable translation rates and any resulting unrealized gains or losses
are recorded in a Fund's financial statements. A Fund records realized
gains or losses at the time the forward contract is offset by entering into
a closing transaction or extinguished by delivery of the currency. Risks
may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The contractual amounts of forward foreign currency exchange
contracts do not necessarily represent the amounts potentially subject to
risk. The measurement of the risks associated with these instruments is
meaningful only when all related and offsetting transactions are
considered.
At March 31, 1999, there were no outstanding contracts.
G. ORGANIZATION COSTS - Organization expenses of approximately $1,030,000 have
been deferred and are being amortized on a straight-line basis through
1999. These costs were deferred and amortized during the five year period
ending March 31, 1999.
H. INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
as of the trade date. The Funds determine the gain or loss realized from
investment transactions by using an identified cost basis method. Dividend
income is recognized on the ex-dividend date and interest income is
recognized on an accrual basis and includes amortization of discounts and
premiums. Dividends from foreign securities are recorded on ex-date, or as
soon as the information is available.
I. EXPENSES - The Funds are charged for those expenses that are directly
attributable to each Fund. Expenses that are not directly attributable to a
Fund are typically allocated among the Funds in proportion to their
respective net assets.
- -----
134
- -----
<PAGE> 137
J. DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are
declared and paid as follows:
<TABLE>
<CAPTION>
DECLARATION PAYMENT
FREQUENCY FREQUENCY
- ---------------------------------------------------------
<S> <C> <C>
Money Market Daily Monthly
U.S. Government Money
Market Daily Monthly
U.S. Government Select
Money Market Daily Monthly
Municipal Money Market Daily Monthly
California Municipal
Money Market Daily Monthly
U.S. Government Daily Monthly
Intermediate Tax-Exempt Daily Monthly
Florida Intermediate
Tax-Exempt Daily Monthly
Fixed Income Daily Monthly
Tax-Exempt Daily Monthly
California Tax-Exempt Daily Monthly
International Fixed Income Quarterly Quarterly
High Yield Municipal Monthly Monthly
High Yield Fixed Income Monthly Monthly
Income Equity Monthly Monthly
Stock Index Quarterly Quarterly
Growth Equity Quarterly Quarterly
Select Equity Annually Annually
Mid Cap Growth Quarterly Quarterly
Small Cap Annually Annually
International Growth
Equity Annually Annually
International Select
Equity Annually Annually
Technology Annually Annually
- ---------------------------------------------------------
</TABLE>
Distributions of net realized capital gains, if any, are declared at
least annually. Distributions to shareholders are recorded on the
ex-dividend date.
The timing and character of distributions determined in accordance with
federal income tax regulations may differ from financial statement amounts
determined in accordance with generally accepted accounting principles due
to differences in the treatment and recognition of investment income and
realized gains (losses). These differences are primarily related to foreign
currency transactions, deferral of wash sales and capital loss
carryforwards. Certain differences in treatment of income and capital gains
for distributions, which are permanent, may result in periodic
reclassifications in the Funds' capital accounts.
During the year ended March 31, 1999, all of the dividends derived from
net investment income paid by each of the Municipal Money Market,
California Municipal Money Market, Intermediate Tax-Exempt, Florida
Intermediate Tax-Exempt, Tax-Exempt and California Tax-Exempt Funds were
"exempt-interest dividends," excludable from gross income for Federal
income tax purposes. Further, all such dividends paid by the California
Municipal Money Market and California Tax-Exempt Funds were "California
exempt-interest dividends," exempt from California state personal income
tax.
K. FEDERAL INCOME TAXES - No provision for federal income taxes has been made
since the Funds intend to comply with the requirements of the Internal
Revenue Code available to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders.
-----
135
-----
<PAGE> 138
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Pursuant to its advisory agreement with the Funds, the Adviser is entitled to
receive a fee, calculated daily and payable monthly, at the annual rates
presented below as applied to each Fund's daily net assets. For the year ended
March 31, 1999, the Adviser voluntarily agreed to waive a portion of its
advisory fees as applied to each Fund's daily net assets as shown on the
accompanying Statements of Operations. Northern Trust had also agreed to
reimburse the Funds as shown on the accompanying Statements of Operations to
adhere to the expense limitations presented in the following table:
<TABLE>
<CAPTION>
ANNUAL ADVISORY
ADVISORY FEES AFTER EXPENSE
FEES WAIVERS LIMITATIONS
- ---------------------------------------------------------
<S> <C> <C> <C>
Money Market 0.60% 0.40% 0.55%
U.S. Government
Money Market 0.60% 0.40% 0.55%
U.S. Government Select
Money Market 0.60% 0.40% 0.55%
Municipal Money
Market 0.60% 0.40% 0.55%
California Municipal
Money Market 0.60% 0.40% 0.55%
U.S. Government 0.75% 0.75% 0.90%
Intermediate Tax-
Exempt 0.75% 0.70% 0.85%
Florida Intermediate
Tax-Exempt 0.75% 0.70% 0.85%
Fixed Income 0.75% 0.75% 0.90%
Tax-Exempt 0.75% 0.70% 0.85%
California Tax-Exempt 0.75% 0.70% 0.85%
International Fixed
Income 0.90% 0.90% 1.15%
High Yield Municipal 0.75% 0.70% 0.85%
High Yield Fixed Income 0.75% 0.75% 0.90%
Income Equity 1.00% 0.85% 1.00%
Stock Index 0.60% 0.40% 0.55%
Growth Equity 1.00% 0.85% 1.00%
Select Equity 1.20% 0.85% 1.00%
Mid Cap Growth 1.00% 0.85% 1.00%
Small Cap 1.20% 0.85% 1.00%
International Growth
Equity 1.20% 1.00% 1.25%
International Select
Equity 1.20% 1.00% 1.25%
Technology 1.20% 1.00% 1.25%
- ------------------------------------------------------
</TABLE>
The Funds have entered into an administrative agreement with Sunstone
Financial Group, Inc. ("Sunstone") for certain administrative services. Pursuant
to its administrative agreement with the Funds, Sunstone is entitled to receive
a fee, computed daily and payable monthly, at the annual rate of 0.15% of each
Fund's daily net assets. For the year ended March 31, 1999, Sunstone voluntarily
agreed to waive a portion of its administration fees as shown on the
accompanying Statements of Operations. The waivers and reimbursements of
Northern Trust and Sunstone described above are voluntary and may be terminated
by them at any time at their discretion.
4. BANK LOANS
The Funds maintain a $5,000,000 revolving bank credit line for liquidity and
other purposes. Borrowings under this arrangement bear interest at 1% above the
Fed Funds rate and are secured by pledged securities equal to or exceeding 120%
of the outstanding balance.
Interest expense for the year ended March 31, 1999 was approximately
$2,000 and $4,000 for the Small Cap and International Select Equity Fund,
respectively. This amount is included in other expenses on the Statements of
Operations.
As of March 31, 1999 the International Growth Equity and International
Select Equity Funds had outstanding borrowings of $160,000 and $3,000,000,
respectively, and is included as other liabilities on the Statements of Assets
and Liabilities.
- -----
136
- -----
<PAGE> 139
NORTHERN FUNDS Annual Report
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------------------------------
U.S. U.S.
AMOUNTS IN THOUSANDS GOVERNMENT OTHER GOVERNMENT OTHER
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government $323,822 $ -- $280,088 $ --
Intermediate Tax-Exempt -- 207,124 -- 168,196
Florida Intermediate Tax-Exempt -- 27,627 -- 16,482
Fixed Income -- 281,184 -- 188,366
Tax-Exempt -- 315,753 -- 261,335
California Tax-Exempt -- 70,342 -- 34,871
International Fixed Income 501 1,906 709 1,590
High Yield Municipal -- 7,516 -- --
High Yield Fixed Income -- 32,799 -- --
Income Equity -- 84,982 -- 86,408
Stock Index -- 44,084 -- 2,862
Growth Equity -- 282,108 -- 256,634
Select Equity -- 159,406 -- 128,203
Mid Cap Growth -- 119,456 -- 56,691
Small Cap -- 57,233 -- 76,070
International Growth Equity -- 333,498 -- 324,385
International Select Equity -- 191,198 -- 195,617
Technology -- 223,739 -- 106,867
- -----------------------------------------------------------------------------------------------
</TABLE>
At March 31, 1999, for federal tax purposes, gross unrealized appreciation,
gross unrealized depreciation, net unrealized appreciation (depreciation) on
investments (including the effects of foreign currency translation) and cost
basis of securities were as follows:
<TABLE>
<CAPTION>
NET COST
UNREALIZED UNREALIZED APPRECIATION BASIS OF
AMOUNTS IN THOUSANDS APPRECIATION DEPRECIATION (DEPRECIATION) SECURITIES
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government $904 $2,026 $(1,122) $267,169
Intermediate Tax-Exempt 8,026 465 7,561 327,895
Florida Intermediate Tax-Exempt 501 99 402 35,881
Fixed Income 927 5,225 (4,298) 278,489
Tax-Exempt 6,332 483 5,849 231,893
California Tax-Exempt 1,318 134 1,184 74,940
International Fixed Income 744 358 386 13,612
High Yield Municipal 8 19 (11) 10,879
High Yield Fixed Income 531 263 268 41,908
Income Equity 17,164 4,179 12,985 102,003
Stock Index 40,959 4,948 36,011 134,108
Growth Equity 227,768 6,268 221,500 417,268
Select Equity 64,566 1,979 62,587 135,778
Mid Cap Growth 15,847 775 15,072 63,076
Small Cap 45,534 52,969 (7,435) 271,237
International Growth Equity 23,165 5,747 17,418 195,225
International Select Equity 13,316 3,560 9,756 117,100
Technology 98,391 8,180 90,211 260,631
- ---------------------------------------------------------------------------------------------------------
</TABLE>
At March 31, 1999, the Mid Cap Growth Fund had capital loss
carryforwards, for income tax purposes, of approximately $4,222,000, due to
expire March 31, 2007. These capital loss carryforwards are available to offset
future gains.
-----
137
-----
<PAGE> 140
6. CAPITAL SHARE TRANSACTIONS
Transactions of shares of the Funds for the year ended March 31, 1999 were as
follows:
<TABLE>
<CAPTION>
NET
REINVESTMENT INCREASE
AMOUNTS IN THOUSANDS SOLD OF DIVIDENDS REDEEMED (DECREASE)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government 8,963 718 5,473 4,208
Intermediate Tax-Exempt 6,757 391 2,665 4,483
Florida Intermediate Tax-Exempt 1,769 55 700 1,124
Fixed Income 21,526 727 12,591 9,662
Tax-Exempt 10,243 433 4,815 5,861
California Tax-Exempt 4,589 98 1,303 3,384
International Fixed Income 219 17 248 (12)
High Yield Municipal 1,024 -- 22 1,002
High Yield Fixed Income 4,057 6 19 4,044
Income Equity 1,957 474 1,648 783
Stock Index 6,696 104 3,298 3,502
Growth Equity 5,911 1,437 3,895 3,453
Select Equity 3,384 327 1,806 1,905
Mid Cap Growth 6,928 -- 328 6,600
Small Cap 7,288 803 8,617 (526)
International Growth Equity 8,329 613 7,068 1,874
International Select Equity 4,499 381 4,684 196
Technology 7,041 193 1,873 5,361
- -----------------------------------------------------------------------------------------------------
</TABLE>
Transactions of shares of the Funds for the year ended March 31, 1998 were as
follows:
<TABLE>
<CAPTION>
NET
REINVESTMENT INCREASE
AMOUNTS IN THOUSANDS SOLD OF DIVIDENDS REDEEMED (DECREASE)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government 6,618 74 2,623 4,069
Intermediate Tax-Exempt 6,360 64 3,898 2,526
Florida Intermediate Tax-Exempt 1,465 14 536 943
Fixed Income 7,837 110 2,908 5,039
Tax-Exempt 3,720 126 1,584 2,262
California Tax-Exempt 4,132 12 433 3,711
International Fixed Income 200 23 465 (242)
Income Equity 2,329 613 955 1,987
Stock Index 5,376 201 2,666 2,911
Growth Equity 5,044 2,265 3,266 4,043
Select Equity 2,762 603 1,136 2,229
Small Cap 8,480 908 3,399 5,989
International Growth Equity 2,240 466 3,929 (1,223)
International Select Equity 1,429 38 2,583 (1,116)
Technology 3,074 322 956 2,440
- ---------------------------------------------------------------------------------------------
</TABLE>
- -----
138
- -----
<PAGE> 141
NORTHERN FUNDS Annual Report
REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES:
NORTHERN FUNDS
We have audited the accompanying statements of assets and liabilities of
Northern Funds (a Massachusetts business trust consisting of the Money Market
Fund, U.S. Government Money Market Fund, U.S. Government Select Money Market
Fund, Municipal Money Market Fund, California Municipal Money Market Fund, U.S.
Government Fund, Intermediate Tax-Exempt Fund, Florida Intermediate Tax-Exempt
Fund, Fixed Income Fund, Tax-Exempt Fund, California Tax-Exempt Fund,
International Fixed Income Fund, High Yield Municipal Fund, High Yield Fixed
Income Fund, Income Equity Fund, Stock Index Fund, Growth Equity Fund, Select
Equity Fund, Mid Cap Growth Fund, Small Cap Fund, International Growth Equity
Fund, International Select Equity Fund and Technology Fund), including the
schedules of investments, as of March 31, 1999, and the related statements of
operations, changes in net assets, and the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999, by physical examination of the securities held by the custodian and by
correspondence with outside depositories and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Northern Funds as of March 31, 1999,
the results of their operations, changes in their net assets, and financial
highlights for the periods indicated thereon, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 14, 1999
-----
139
-----
<PAGE> 142
This report has been prepared for the general
information of Northern Funds shareholders.
It is not authorized for distribution to
prospective investors unless accompanied or
preceded by a current Northern Funds
prospectus, which contains more complete
information about Northern Funds investment
policies, management fees and expenses.
Investors are reminded to read the prospectus
carefully before investing or sending money.
(C) 1999 Northern Funds Distributors, LLC,
Distributor
-----------------
[LOGO OF NORTHERN FUNDS] BULK RATE
U.S. POSTAGE
P.O. Box 2081 PAID
Milwaukee, WI 53201-9800 PERMIT NO. 240
1-800-595-9111 PALATINE P&DC, IL
-----------------
