MULTI-MANAGER FUNDS ANNUAL REPORT MARCH 31, 2021 Dear Shareholder: Global equities delivered very strong corporate earnings and ongoing Fed hospitalizations beginning to decline, returns during the 12-month period accommodation provided a firm the vaccine rollout underway, additional ended March 31, 2021. At the start of the foundation for investor risk appetite. fiscal stimulus apparently on the way period,stockswerejustdaysbeyondthe The approval of the first COVID-19 later in the year, and broadening market lows established in the coronavirus- vaccine not only boosted the equity leadership, the investment backdrop driven downturn that occurred in the first market as a whole, but also led to an remained supportive for stocks at quarter of 2020. The early stages of the important change in market leadership. period end. market’s recovery derived mainly from From the March 2020 low through early In closing, we would like to the swift and aggressive monetary and November 2020, gains for the leading U.S. recognize the planning and dedication fiscal stimulus provided by global and global indices had been driven largely of those who have helped Northern governments and central banks. The bygrowthstocks,aswellasbyasmall Trust Asset Management navigate the U.S. Federal Reserve (the “Fed”) cut number of mega-cap technology unprecedented challenges of the past 12 short-term rates to near zero, and companies. With so much uncertainty months. Our commitment to our clients Congress passed a $2 trillion stimulus surrounding the path of the virus and the remainsunwaveringasthebusiness package. Investors, seeing a path to when trajectory of global growth, investors environment continues to evolve in the the economic effects of COVID-19 could gravitated to the relative safety of months ahead. dissipate, began to bargain hunt in a companies that they believed could market that was well off its prior peak. maintain steady earnings in any economic Sincerely, The ensuing rally gained momentum environment. Once the vaccines were through the summer of 2020, propelling approved, investors began to look around Darek Wojnar, CFA major large-cap equity indices above their for improved relative performance from Head of Funds and Managed Accounts pre-pandemic highs by late August 2020. economically-sensitive segments that had Group, Stock prices paused in early autumn previously lagged, including value stocks Northern Trust Asset Management* due in part to a resurgence in COVID-19 and smaller companies. Theviewsinthisletterwereasof cases and uncertainty surrounding the In combination, these developments March 31, 2021 and may not necessarily U.S. election. However, markets resumed helped major equity indices to deliver reflect the same views on the date this their advance in November 2020 remarkable 12-month returns. For letter is first published or any time following the eventual conclusion of the example, the large-cap Russell 1000 Index thereafter. These views are intended to U.S. election and announcements that and the small-cap Russell 2000 Index help shareholders in understanding the two coronavirus vaccines had been posted dramatically strong one-year Funds’ investment methodology and do approved by U.S. regulatory agencies. returns of 60.59% and 94.85%, not constitute investment advice. Investors were further encouraged by the respectively, as of March 31, 2021. Based passage of a new round of U.S. fiscal on the MSCI EAFE Index and the MSCI This report is submitted for the stimulus in early 2021, as well as by Emerging Markets Index, developed- and general information of the shareholders of expectations that a significant emerging-market international stocks, the Funds. It is not authorized for infrastructure package might also emerge though they lagged U.S. indices, distribution to prospective investors unless from Congress. The rally continued nonetheless delivered robust gains of preceded or accompanied by an effective through the end of the 12-month period 44.57% and 58.39%, respectively. It is prospectus, which includes information ended March 31, 2021, as the prospect of highly unlikely that these returns can be regarding the Funds’ risks, objectives, fees improving economic growth, rising replicated in the next 12-month period. and expenses, experience of its Still, with COVID-19 cases and management, and other information. *Northern Trust Asset Management is the branding name of the asset management business of Northern Trust Corporation, a financial holding company and publicly traded company. MULTI-MANAGER FUNDS TABLE OF CONTENTS 2 PORTFOLIO MANAGEMENT COMMENTARY 10 STATEMENTS OF ASSETS AND LIABILITIES 12 STATEMENTS OF OPERATIONS 14 STATEMENTS OF CHANGES IN NET ASSETS 16 FINANCIAL HIGHLIGHTS 23 SCHEDULES OF INVESTMENTS EQUITY FUNDS 23 ACTIVE M EMERGING MARKETS EQUITY FUND Ticker Symbol: NMMEX 28 ACTIVE M INTERNATIONAL EQUITY FUND Ticker Symbol: NMIEX 36 MULTI-MANAGER GLOBAL LISTED INFRASTRUCTURE FUND Ticker Symbol: NMFIX This report has been prepared for the general 40 MULTI-MANAGER GLOBAL REAL ESTATE information of Northern Funds shareholders. It FUND is not authorized for distribution to prospective Ticker Symbol: NMMGX investors unless accompanied or preceded by a current Northern Funds summary prospectus 43 NORTHERN ENGAGE360TM FUND or prospectus, which contains more complete Ticker Symbol: NENGX information about a fund’s investment FIXED INCOME FUNDS objectives, risks, fees and expenses. Investors are reminded to read a summary prospectus 51 MULTI-MANAGER EMERGING MARKETS DEBT or prospectus carefully before investing or OPPORTUNITY FUND sending money. Ticker Symbol: NMEDX 64 MULTI-MANAGER HIGH YIELD OPPORTUNITY This report contains certain forward-looking FUND statements about factors that may affect the Ticker Symbol: NMHYX performance of the Funds in the future. These statements are based on Northern Funds’ 95 NOTES TO THE FINANCIAL STATEMENTS management predictions and expectations 111 REPORT OF INDEPENDENT REGISTERED PUBLIC concerning certain future events, such as ACCOUNTING FIRM performance of the economy as a whole and of specific industry sectors, changes in the 112 TAX INFORMATION levels of interest rates, the impact of developing world events, and other factors. 113 LIQUIDITY RISK MANAGEMENT PROGRAM Management believes these forward-looking 114 FUND EXPENSES statements to be reasonable, although they are inherently uncertain and difficult to 116 TRUSTEES AND OFFICERS predict. Actual events may cause adjustments in Northern Funds’ management strategies 120 INVESTMENT CONSIDERATIONS from those currently expected to be employed. 124 FOR MORE INFORMATION Northern Funds are distributed by Northern Funds Distributors, LLC, Three Canal Plaza, Suite 100, Portland, Maine 04101, not affiliated with Northern Trust. NOT FDIC INSURED May lose value / No bank guarantee NORTHERN FUNDS ANNUAL REPORT 1 MULTI-MANAGER FUNDS MULTI-MANAGER FUNDS ACTIVE M EMERGING MARKETS EQUITY FUND (UNAUDITED) PORTFOLIO MANAGEMENT COMMENTARY Uncertainty due to the COVID-19 pandemic brought about a period of heightened volatility across emerging markets during the Fund’s most recent fiscal year. For the 12-month reporting period ended March 31, 2021, the Active M Emerging Markets Equity Fund returned 62.55%, outperforming the 58.39% return of the MSCI Emerging Markets® Index. Emerging market performance was supported by semiconductor stocks within South Korea and Taiwan. Information outsourcing stocks in India also performed well, contributing to that market’s rise of 76.61% for the period. Although China recovered from pandemic lockdowns more quickly than most markets, Chinese stocks were held back by U.S. sanctions announced in the fourth quarter of 2020, and returned 43.61%. South Africa posted a notable return of 80.49%, benefiting from the approval of COVID-19 vaccines. Rising COVID-19 infections resulted in the Brazilian market lagging the broader benchmark, with a return of 46.48%. Market participation broadened in the fourth quarter of 2020 as optimism over vaccine rollouts led to outperformance by value stocks. For the full 12-month period, however, the MSCI Emerging Markets Growth Index return of 63.78% outperformed the MSCI Emerging Markets Value Index return of 52.53%. From a country perspective, an underweight to China added meaningfully to Fund performance during the period. Stock selection in China also was positive. Exposure to information technology stocks within Taiwan supported returns and an overweight to this market also contributed. Brazil was another market where the Fund’s holdings outperformed. On the downside, stock selection was weak in South Korea and South Africa, while the Fund’s exposure to Egypt also detracted from results. Growth-oriented sub adviser Axiom benefited from the growth style’s outperformance of value for the period, as well as from strong stock selection in Brazil, China and Taiwan. Top-down-focused Ashmore Investment Management Limited benefited from an underweight to China and overweights to both Taiwan and South Korea. Lastly, Westwood Global Investments overcame a value style headwind with strong stock selection in Brazil and Taiwan, along with an overweight to South Korea. INVESTMENT PERFORMANCE AVERAGE ANNUAL RETURNS for periods ended March 31, 2021 SINCE INCEPTION TOTAL RETURN ONE YEAR FIVE YEAR TEN YEAR 11/19/08 ACTIVE M EMERGING MARKETS EQUITY FUND 62.55% 11.51% 3.74% 11.33% MSCI EMERGING MARKETS® INDEX 58.39 12.07 3.65 10.91 Fund Performance reflects contractual expense reimbursements in effect.