Philosophy & Objective
Municipal Fixed Income assignments at Northern Trust are constructed with the goal of generating consistent performance with predictable volatility. We emphasize the objectives of:

• Managing to the client's unique tax situation
• Preserving principal
• Generating current income
• Dampen the volatility of other asset classes
• Providing liquidity in case of need

Investment Process
We have investment views, but our trading scale and skill allows us to be modest in taking traditional manager bets (duration and credit). We add thoughtful approaches to yield curve, sector, structure & state decisions, yet aiming to end up with portfolios that are often higher quality AND higher return than their benchmarks.

Managing credit risk is the cornerstone of our research process:

• Strong sell discipline focused on identifying early signs of credit deterioration
• Separate credit approval process from manager's purchase decision
• Issuer financials are tracked electronically on a timely basis
• Individual state analysis identifying macro trends

Investment Style
We incorporate key elements of our relative value style, emphasizing a rigorous security selection process while closely monitoring and controlling portfolio risk relative to a client-selected benchmark.

Active Management
We strive to capitalize on market inefficiencies to maximize total return - both income return and price appreciation:

• The process goes beyond credit and interest rate decisions
• Key value-added factors include yield curve positioning, security selection/structure decisions, and sector/state analysis

Disciplined Risk Controls
We believe a comprehensive portfolio review process combined with a key understanding of risk is essential to meet our client's investment objectives:

• Risk exposure guidelines established in line with client expectations
• Daily monitoring of duration, sector concentration, and credit quality

Fundamental Research
We combine original credit and macroeconomic research with experience and judgment in the development of portfolio structure and characteristics:

• Both issuer credit and enhancement (insurance) providers are evaluated
• The structural risk of each security is evaluated and actively monitored

Flexible Structures
Northern Trust's capabilities can be delivered as separate accounts or mutual fund vehicles.

Order Routing Disclosure

Investment Products and Services are:

Investment products and services are offered through Northern Trust Securities, Inc., member FINRA and SIPC and a wholly owned subsidiary of Northern Trust Corporation. Any attached research reports containing the Northern Trust Logo or trademark were prepared solely by employees of Northern Trust Investments, Inc., an affiliate of Northern Trust Securities, Inc.

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