NORTHERN INSTITUTIONAL FUNDS
Treasury Portfolio
Treasury Portfolio
Summary
Prospectus | April 1, 2021Ticker: Service Shares, Premier Shares–NTPXX
Before you invest, you may want to review the Portfolio’s complete Prospectus, which contains more information about the Portfolio and its risks. You can find
the Portfolio’s complete Prospectus and other information about the Portfolio online at northerntrust.com/nif-prospectus. You can also get this information at
no cost by calling 800-637-1380 or by sending an e-mail request to northern-funds@ntrs.com. If you purchase shares of the Portfolio through a financial intermediary (such as a bank or a broker-dealer), the complete Prospectus and other information are also available from your financial intermediary. The Portfolio’s complete Prospectus and Statement of Additional Information, both dated April 1, 2021, as supplemented, are incorporated by reference into this summary prospectus and may be obtained, free of charge, at the website, phone number or e-mail address noted above.
INVESTMENT OBJECTIVE
The Portfolio seeks to maximize current income to the extent consistent with the preservation of capital and maintenance of liquidity by investing its net assets,
under normal market conditions, exclusively in U.S. Treasury securities and related
repurchase agreements and other securities that limit their investments to, or are backed
by, U.S. Treasury securities.
FEES AND EXPENSES of
The Portfolio
This table describes the fees and expenses that you may pay if you buy and hold
Service Shares and Premier Shares of the Portfolio.
Shareholder Fees (fees paid directly from your investment)
| None |
|
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
| |
Service
Shares |
Premier
Shares |
| Management Fees |
0.13% |
0.13% |
| Other Expenses |
0.03%(1) |
0.08%
|
| Transfer Agent Fees |
0.02% |
0.02% |
| Service Fees |
None
|
0.05%
|
| Other Operating Expenses |
0.01% |
0.01% |
| Total Annual Portfolio Operating Expenses |
0.16% |
0.21% |
| Expense Reimbursement(2) |
(0.01)% |
(0.01)% |
| Total Annual Portfolio Operating Expenses After Expense Reimbursement |
0.15%
|
0.20%
|
(1)
“Other Expenses” are based on estimated amounts for the current
fiscal year.
(2)
Northern Trust Investments, Inc. has contractually agreed to reimburse a portion of
the operating expenses of the Portfolio (other than certain excepted expenses, i.e., Acquired Fund Fees and Expenses, service fees, the compensation paid to each Independent Trustee of the Trust, expenses of third party
consultants engaged by the Board of Trustees, membership dues paid to the Investment Company Institute and Mutual Fund Directors Forum, expenses in connection with the negotiation and renewal of the revolving credit facility,
extraordinary expenses and interest) to the extent the “Total Annual Portfolio Operating Expenses” exceed 0.15%. The “Total Annual Portfolio
Operating Expenses After Expense Reimbursement” may be higher than the
contractual limitation as a result of certain Portfolio expenses, including but not limited to service fees, that are not reimbursed. This contractual limitation may not be
terminated before April 1, 2022 without the approval of the Board of Trustees.
EXAMPLE
The following Example is intended to help you compare the cost of investing in
Service Shares and Premier Shares of the Portfolio with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your investment
has a 5% return each year and that the Portfolio’s operating expenses remain the
same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| |
1 Year |
3 Years |
5 Years |
10 Years |
| Service Shares |
$15 |
$51 |
$89 |
$204 |
| Premier Shares |
$20 |
$67 |
$117 |
$267 |
PRINCIPAL INVESTMENT
STRATEGIES
The Portfolio seeks to achieve its objective by investing, under normal
circumstances, its total assets exclusively in:
▪
Cash;
▪
Short-term bills, notes, including floating rate notes, and other obligations issued or guaranteed by the U.S. Treasury (“Treasury Obligations”);
and
▪
Repurchase agreements collateralized fully by cash or Treasury Obligations.
The Portfolio, under normal circumstances, will invest at least 80% of its net
assets (plus the amount of any borrowings for investment purposes) in Treasury Obligations and repurchase agreements collateralized solely by Treasury Obligations.
The Portfolio operates as a “government money market fund” under Rule
2a-7 of the Investment Company Act of 1940, as amended. As a “government money market fund” under Rule 2a-7, the Portfolio (1) is permitted to use the amortized cost method of valuation to seek to
maintain a stable net asset value (“NAV”) of $1.00 share price, and (2) is not required to impose a liquidity fee and/or a redemption gate on Portfolio redemptions that might apply to other types of
money market funds should certain triggering events specified in Rule 2a-7 occur.
The Securities and Exchange Commission (“SEC”) imposes strict
requirements on the investment quality, maturity, diversification and liquidity of the
Portfolio’s investments. Accordingly, the Portfolio’s investments must have a remaining maturity of no more than 397 days and must be high quality. The Portfolio’s
NIF SUM PSTR (4/21)
SUMMARY PROSPECTUS 1 Treasury Portfolio
investment adviser may consider, among other things, credit, interest rate and prepayment risks as well as general market conditions when deciding whether to buy
or sell investments for the Portfolio.
PRINCIPAL
RISKS
As with any investment, you could lose all or part of your investment in the
Portfolio, and the Portfolio’s performance could trail that of other investments. The Portfolio is subject to certain risks, including the principal risks noted below, any of which may adversely affect the
Portfolio’s NAV, trading price, yield, total return and ability to meet its investment objective. Each risk noted below is considered a principal risk of investing in the Portfolio, regardless of the
order in which it appears. The significance of each risk factor below may change over time and you should review each risk factor carefully.
STABLE NAV RISK is the risk that the Portfolio will
not be able to maintain a NAV per share of $1.00 at all times. A significant enough
market disruption or drop in market prices of securities held by the Portfolio, especially at a time when the Portfolio needs to sell securities to meet shareholder redemption requests, could cause the value of the
Portfolio’s shares to decrease to a price less than $1.00 per share. If the Portfolio fails to maintain a stable NAV (or if there is a perceived threat of such a failure), the Portfolio could be subject to
increased redemption activity, which could adversely affect its NAV.
INTEREST RATE RISK is the risk that during periods
of rising interest rates, the Portfolio’s yield (and the market value of its
securities) will tend to be lower than prevailing market rates; in periods of falling
interest rates, the Portfolio’s yield (and the market value of its securities) will tend to be higher. Securities with longer maturities tend to be more sensitive to changes in interest rates, causing them to be more
volatile than securities with shorter maturities. Securities with shorter maturities tend to provide lower returns and be less volatile than securities with longer maturities. If interest rates
rise, the Portfolio’s yield may not increase proportionately, and the maturities of income securities that have the ability to be prepaid or called by the
issuer may be extended. Interest rates in the U.S. are currently at historically low levels. Changing interest rates may have unpredictable effects on the markets and the
Portfolio’s investments. A low or negative interest rate environment could cause
the Portfolio’s earnings to fall below the Portfolio’s expense ratio, resulting in a low or negative yield and a decline in the Portfolio’s share price. A general rise in interest rates may cause investors to move out of
fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions for the Portfolio. Fluctuations in
interest rates may also affect the liquidity of fixed income securities and instruments held by the Portfolio.
CREDIT (OR DEFAULT) RISK is the risk that the inability or unwillingness of an issuer or guarantor of a fixed-income security, or a counterparty to a repurchase or other transaction, to meet its principal or interest
payments or other financial obligations will adversely affect the value of the Portfolio’s investments and its returns. The credit quality of a debt security or of the issuer of a debt security
held by the Portfolio could deteriorate rapidly, which may impair the Portfolio’s liquidity or
cause a
deterioration in the Portfolio’s NAV. The Portfolio could also be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty.
DEBT EXTENSION RISK is the risk that an issuer will exercise its right to pay principal on an obligation held by the
Portfolio (such as an asset-backed security) later than expected. This may happen during
a period of rising interest rates. Under these circumstances, the value of the obligation will decrease and the Portfolio will suffer from the inability to invest in higher yielding securities.
VARIABLE OR FLOATING RATE INSTRUMENTS
RISK is the risk that securities with variable or floating rates can be less sensitive
to interest rate changes than securities with fixed interest rates, but may decline in
value and negatively impact the Portfolio, particularly if changes in prevailing interest rates are more frequent or sudden than the rate changes for the variable or floating rate securities, which only
occur periodically. Although variable and floating rate securities are less sensitive to interest rate risk than fixed-rate securities, they are subject to greater liquidity risk, credit risk and
default risk, which could impede their value.
INCOME RISK is the risk that the Portfolio’s
ability to distribute income to shareholders depends on the yield available from the
Portfolio’s investments. Falling interest rates will cause the Portfolio’s
income to decline. Income risk is generally higher for short-term debt securities.
MARKET RISK is the risk that the value of the Portfolio’s investments may increase or decrease in response
to expected, real or perceived economic, political or financial events in the U.S. or
global markets. The frequency and magnitude of such changes in value cannot be predicted. Certain securities and other investments held by the Portfolio may experience increased volatility, illiquidity, or other
potentially adverse effects in response to changing market conditions, inflation, changes in interest rates, lack of liquidity in the bond or equity markets, volatility in the equity markets,
market disruptions caused by local or regional events such as war, acts of terrorism, the spread of infectious illness (including epidemics and pandemics) or other public health issues, recessions or
other events or adverse investor sentiment or other political, regulatory, economic and
social developments, and developments that impact specific economic sectors, industries
or segments of the market. These risks may be magnified if certain events or developments
adversely interrupt the global supply chain; in these and other circumstances, such risks
might affect companies worldwide due to increasingly interconnected global economies and financial markets.
MANAGEMENT RISK is the risk that a strategy used by
the Portfolio’s investment adviser may fail to produce the intended results or that
imperfections, errors or limitations in the tools and data used by the investment adviser may cause unintended results.
CYBERSECURITY RISK is the risk of an unauthorized
breach and access to Portfolio assets, Portfolio or customer data (including private
shareholder information), or proprietary information, or the risk of an incident occurring that causes the Portfolio, the investment adviser, custodian, transfer agent, distributor and other service providers and financial
intermediaries to suffer data breaches, data corruption or lose operational functionality or
Treasury
Portfolio 2 SUMMARY
PROSPECTUS
prevent Portfolio investors from purchasing, redeeming or exchanging shares or
receiving distributions. The Portfolio and its investment adviser have limited ability to prevent or mitigate cybersecurity incidents affecting third party service providers, and such third-party service
providers may have limited indemnification obligations to the Portfolio or its investment
adviser. Successful cyber-attacks or other cyber-failures or events affecting the
Portfolio or its service providers may adversely impact and cause financial losses to the Portfolio or its shareholders. Issuers of securities in which the Portfolio invests are also subject to cybersecurity
risks, and the value of these securities could decline if the issuers experience cyber-attacks or other cyber-failures.
LARGE SHAREHOLDER RISK is the risk that the Portfolio may experience adverse effects when certain large shareholders,
including funds or accounts over which the Portfolio’s investment adviser or an
affiliate of the investment adviser has investment discretion, purchase or redeem large amounts of shares of the Portfolio. Such large shareholder redemptions, which may occur rapidly and
unexpectedly, may cause the Portfolio to sell its securities at times it would not otherwise do so, which may negatively impact its liquidity and/or NAV. Such sales may also accelerate the
realization of taxable income to shareholders if these sales result in gains, and may also increase transaction costs. In addition, large redemptions could lead to an increase in the Portfolio’s
expense ratio due to expenses being allocated over a smaller asset base. Large purchases of the Portfolio’s shares may also adversely affect the Portfolio’s performance to the extent
that the Portfolio is delayed in investing new cash or otherwise maintains a larger cash position than it ordinarily would.
You could lose money by investing in the Portfolio. Although the Portfolio seeks to preserve the value of your
investment at $1.00 per share, the Portfolio cannot guarantee it will do so. An investment in the Portfolio is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation, any other government agency, or The Northern Trust Company, its affiliates, subsidiaries or any other bank.
The Portfolio’s sponsor has no legal obligation to provide
financial support to the Portfolio, and you should not expect that the sponsor will provide financial support to the Portfolio at
any time.
PORTFOLIO PERFORMANCE
The bar chart and table that follow provide an indication of the risks of investing in the Portfolio by showing the performance of the Portfolio’s Premier Shares
from year to year. As of December 31, 2020 there were no Service Shares outstanding for
the Portfolio.
The Portfolio’s past performance is not necessarily an indication of how the Portfolio will
perform in the future.
Updated performance information for
the Portfolio is available and may be obtained on the Portfolio’s website at
northerntrust.com/institutional or by calling 800-637-1380.
CALENDAR YEAR TOTAL RETURNS (PREMIER SHARES)*
*
For the periods shown in the bar chart above:
| highest quarterly return |
0.56% |
second quarter of 2019 |
| lowest quarterly return |
0.00% |
fourth quarter of 2020 |
AVERAGE ANNUAL TOTAL RETURNS
(For the periods ended December 31, 2020)
| |
Inception
Date |
1 Year |
Since
Inception |
| Premier Shares |
08/01/2016 |
0.37% |
1.11% |
The 7-day yield for Premier Shares of the Portfolio as of December 31, 2020: 0.01%. For the current 7-day yield call 800-637-1380 or visit northerntrust.com/institutional.
MANAGEMENT
INVESTMENT ADVISER. Northern Trust Investments, Inc. (“NTI”), an indirect subsidiary of Northern Trust
Corporation, serves as the investment adviser of the Portfolio. The Northern Trust
Company, an affiliate of NTI, serves as transfer agent, custodian and sub-administrator to the Portfolio.
Under the Service Plan for Premier Shares, Northern Institutional Funds (the “Trust”) has entered into a servicing agreement with The Northern
Trust Company (“TNTC”) under which TNTC has agreed to provide certain shareholder account, administrative and other service functions to its customers who are shareholders of the Premier
Shares. In exchange for these services, TNTC, as servicing agent, receives an annual fee of
0.05% of the average daily net assets of the Premier Shares of the
Portfolio.
PURCHASE AND SALE OF
PORTFOLIO SHARES
You may purchase Service Shares of the Portfolio through an authorized intermediary
generally with no minimum initial investment. Premier Shares of the Portfolio are currently offered only through Northern Trust custody sweep. There is no minimum investment required for purchases of
Premier Shares. As of December 31, 2020 there were no Service Shares outstanding for the
Portfolio.
On any business day, you may sell (redeem) or
exchange Service Shares of the Portfolio through your institutional account by contacting
your authorized intermediary. If you purchase Service Shares of the Portfolio directly from the Trust, you may sell (redeem) or exchange your shares in one of the following ways:
SUMMARY PROSPECTUS 3 Treasury Portfolio
▪
By Mail – Send a written request to: Northern Institutional Funds, P.O. Box 75986, Chicago, Illinois 60675-5986.
▪
By Telephone – Call the Northern Institutional Funds Center at 800-637-1380 for instructions.
▪
By Wire – Authorize wire redemptions on your New Account Application and have proceeds sent by federal wire transfer to a previously designated bank account
(the minimum redemption amount by this method is $10,000).
On any business day, you may sell (redeem) or exchange Premier Shares of the Portfolio through your custody sweep account by contacting your Northern Trust account
representative.
TAX
INFORMATION
The Portfolio’s distributions are generally taxable to you as ordinary income,
capital gains, or a combination of the two, unless you are investing through a tax-exempt or tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Distributions may be taxable
upon withdrawal from tax-deferred accounts.
PAYMENTS TO BROKERS-DEALERS AND OTHER
FINANCIAL INTERMEDIARIES
If you purchase the Portfolio through a broker-dealer or other financial intermediary (such as a bank), the Portfolio and its related companies may pay the
intermediary for the sale of Portfolio shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to
recommend the Portfolio over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
Treasury
Portfolio 4 SUMMARY
PROSPECTUS