NORTHERN INSTITUTIONAL FUNDS
Treasury Portfolio
Treasury Portfolio
Summary
Prospectus | March
30, 2022Ticker: 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, reports to shareholders, 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 March 30, 2022, 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, hold, and sell Service Shares
and Premier Shares of the Portfolio. You may be required to pay commissions and/or other
forms of compensation to a financial intermediary for transactions in Service Shares,
which are not reflected in the tables or the examples below.
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%(3) |
(1)
“Other Expenses” are based on estimated amounts for the current
fiscal year.
(2)
Northern Trust Investments, Inc. (“NTI”) has contractually agreed to reimburse
a portion of the operating expenses of the Portfolio (excluding 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, and 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, 2023 without the approval of the Board of Trustees.
(3)
The Total Annual Portfolio Operating Expenses After Expense Reimbursement
will not correlate to the Portfolio’s ratio of average net assets to expenses, net of waivers, reimbursements and credits, included in the Portfolio’s Financial
Highlights in the Portfolio’s complete Prospectus, which reflect voluntary expense reimbursements made by NTI to the Portfolio. Such voluntary reimbursements may be
discontinued at any time.
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 (taking into account the expense reimbursement arrangement for one year). 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
NIF SUM PSTR (3/22)
SUMMARY PROSPECTUS 1 Treasury Portfolio
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 Portfolio may invest in shares of other government money market
funds.
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 invests in U.S. dollar-denominated securities with a remaining maturity of no more than 397 days (with certain exceptions permitted by applicable
regulations). The Portfolio maintains a dollar-weighted average portfolio maturity of no
more than 60 calendar days, and a dollar-weighted average portfolio maturity as
determined without exceptions regarding certain interest rate adjustments under Rule 2a-7 of no more than 120 calendar days. The Portfolio may invest in variable and floating rate instruments. The
Portfolio’s 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, 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. In general, securities with longer maturities
or durations are more sensitive to interest rate changes. Risks associated with rising interest rates are heightened given that interest rates in the U.S. are currently at historically low levels.
Changing interest rates, including rates that fall below zero, may have unpredictable effects on the markets and the Portfolio’s investment, may result in heightened market volatility, may impact
the liquidity of fixed-income securities and of the Portfolio, and may detract from Portfolio performance. 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 may impair the Portfolio’s ability to maintain a
stable NAV per share. 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.
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 market value of the Portfolio’s securities. 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 when interest rates rise an issuer will exercise its right to pay principal on
certain debt securities held by the Portfolio later than expected. This will cause the
value of the security to decrease and the Portfolio may lose opportunities 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, 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.
Repurchase agreements RISK is the risk that the counterparty may default on its obligation to repurchase the underlying instruments collateralizing the repurchase agreement, which may cause the Portfolio to lose
money.
Investment company RISK is the risk that the Portfolio will be subject to the risks associated with investments in registered
investment companies (“Underlying Funds”), such as the possibility that the
value of the securities or instruments held by the Underlying Funds could decrease. Investments in Underlying Funds may involve duplication of management fees and certain other expenses, as the Portfolio
indirectly bears its proportionate share of any expenses paid by the Underlying Funds in which it invests.
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
Treasury Portfolio 2 SUMMARY PROSPECTUS
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.
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 from year to year. As of December 31, 2021
there were no Service Shares outstanding for the Portfolio. Service Shares would
have similar annual returns when compared with Premier Shares because each class is invested in the same
portfolio of securities. The annual
return of Premier Shares would differ from those of Service Shares only to the extent that
the classes do not have the same expenses.
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,
2021)
|
|
Inception Date |
1
Year |
5
Years |
Since
Inception |
| Premier Shares |
08/01/2016 |
0.01% |
0.97% |
0.91% |
The 7-day yield for Premier Shares of the Portfolio as of December 31, 2021: 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
There is no minimum initial or subsequent investment required for purchases of Service Shares through
an authorized intermediary. Premier Shares of the Portfolio are currently offered only
through Northern Trust custody sweep. There is no
SUMMARY PROSPECTUS 3 Treasury Portfolio
minimum initial or subsequent investment required for purchases of Premier Shares. Service Shares of the Portfolio are not currently offered for sale or
available for purchase.
If you purchase, sell (redeem) or exchange Service Shares
through an authorized intermediary, you may be required to pay a commission and/or other
forms of compensation to the intermediary. In addition, an authorized intermediary may
impose different investment minimums than those set forth above. The Portfolio is not
responsible for any investment minimums imposed by authorized intermediaries or for
notifying shareholders of any changes to them.
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:
▪
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, unless you are
investing through a tax-exempt or tax-advantaged arrangement, such as a 401(k) plan or an
individual retirement account. Distributions may be taxable upon withdrawal from
tax-advantaged 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