Interim Report and Unaudited Financial Statements

Transcription

1 Northern Trust Global Funds PLC Interim Report and Unaudited Financial Statements F o r t h e s i x m o n t h s e n d e d 31 J u l y 2 012

2 2 of 53 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

3 CONTENTS directory... 4 general information... 5 fund summary information... 6 investment adviser s report us doll ar fund... 8 sterling fund... 9 euro fund us doll ar government liquidit y fund sterling government liquidit y fund...12 euro government liquidit y fund portfolio of investments us doll ar fund...14 sterling fund...17 euro fund us doll ar government liquidit y fund sterling government liquidit y fund euro government liquidit y fund profit and loss account bal ance sheet statement of changes in net assets attributable to redeemable participating shareholders notes to the financial statements material purc hases and maturities us doll ar fund sterling fund euro fund us doll ar government liquidit y fund sterling government liquidit y fund euro government liquidit y fund northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 3 of 53

4 Directory Registered Office Directors of the Company Georges Court Richard Bartholomew (resigned 6 March 2012) Townsend Street Michael Boyce* Dublin 2 Gerry Brady* Ireland John Fitzpatrick* Michael Griffin* Malcolm Palmer * Independent Directors of the Company Custodian Administrator Northern Trust Fiduciary Services (Ireland) Limited Northern Trust International Fund Administration Services Georges Court (Ireland) Limited Townsend Street Georges Court Dublin Townsend Street Ireland Dublin 2 Ireland Independent Auditor Investment Adviser KPMG Northern Trust Global Investments Limited Chartered Accountants 50 Bank Street 1 Harbourmaster Place Canary Wharf International Financial Services Centre London, E14 5NT Dublin 1 England Ireland Legal Advisers in Ireland Secretary Maples and Calder Northern Trust International Fund Administration 75 St. Stephen s Green Services (Ireland) Limited Dublin 2 Georges Court Ireland Townsend Street Dublin 2 Ireland Sponsoring Member Firm Legal Advisers in England Maples and Calder Mayer, Brown, Rowe & Maw, LLP 75 St. Stephen s Green 11 Pilgrim Street Dublin 2 London EC4V 6RW Ireland England 4 of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

5 General Information The following information is derived from and should be read in conjunction with the full text and definitions section of the Prospectus. Northern Trust Global Funds plc (the Company ) was incorporated on 27 February 1996 with limited liability as an open-ended investment designated company with variable capital under the laws of Ireland and is listed on the Irish Stock Exchange. The Company was initially authorised by the Central Bank of Ireland under Part XIII of the Companies Act, The Company applied for this authorisation to be revoked and applied for authorisation instead by the Central Bank of Ireland as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, supplemented or consolidated from time to time. The original authorisation was granted on 30 June At 31 July 2012, the Company is comprised of six separate portfolios of assets (each a Fund ), which are represented by separate classes of shares. These are The US Dollar Fund, The Sterling Fund, The Euro Fund, The US Dollar Government Liquidity Fund and The Sterling Government Liquidity Fund. There were no shares in issue in The Euro Government Liquidity Fund as at 31 July With the consent of the Central Bank of Ireland, the Company from time to time may create an additional fund or funds, the investment policy and objectives for which shall be outlined in a Supplemental Prospectus. Investment Objective The investment objective of each Fund is to maximise current income to the extent consistent with the preservation of capital and maintenance of liquidity by investing in a range of high quality fixed and adjustable rate instruments on a global basis and which will be traded principally on the wholesale, interbank and over-the-counter markets. Prices There is a single price for buying, selling and switching Shares in the Company. This is represented by the Net Asset Value per Share. Other than the reservation of the right to impose a switching charge of up to 1.00% upon the conversion of Shares and a redemption fee of up to 0.10% in the event a Shareholder purchases and sells Shares on a short term basis or for trading or arbitrage purposes, the Company does not currently propose to charge a fee on the issue, conversion, transfer or redemption of Shares. However, the Company reserves the right in the future to charge a fee on the issue, conversion, transfer or repurchase of Shares of up to 1.00% of the value of the Shares issued, converted, transferred or repurchased. Dealing Any application received by the Administrator after the relevant deadline on the relevant Dealing Day shall be deferred until the next succeeding Dealing Day. Shares Each Fund may issue one or more classes of Shares. Shares may be issued as Accumulating Shares or Distributing Shares. It is the present intention that only Distributing Shares will be issued. Minimum Investment The minimum initial investment per Shareholder in the Company is the currency equivalent of US$1,000,000 and the minimum subsequent investment is the currency equivalent of US$1,000. Dividends It is the intention of the Directors to declare a dividend on each Dealing Day in respect of the Distributing Shares of the Fund. Such dividends will be paid monthly in cash, unless the Shareholder elects to receive the dividends in the form of additional Shares. No dividend will be declared in respect of the Accumulating Shares. northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 5 of 51

6 Fund Summary Information Historical Information Net Asset Value Number of Shares in Issue Net Asset Value per Share 31 July 2012 US Dollar Fund US$3,574,390,971 3,574,390,971 US$1.00 Sterling Fund 3,732,208,115 3,732,208, Euro Fund 2,080,843,060 2,080,843, US Dollar Government Liquidity Fund US$94,900,101 94,900,101 US$1.00 Sterling Government Liquidity Fund 49,179,373 49,179, Euro Government Liquidity Fund January 2012 US Dollar Fund US$3,344,727,995 3,344,727,995 US$1.00 Sterling Fund 4,211,521,029 4,211,521, Euro Fund 2,098,267,723 2,098,267, US Dollar Government Liquidity Fund US$31,200,101 31,200,101 US$1.00 Sterling Government Liquidity Fund 39,700,580 39,700, Euro Government Liquidity Fund January 2011 US Dollar Fund US$3,554,055,532 3,554,055,532 US$1.00 Sterling Fund 3,457,360,955 3,457,360, Euro Fund 1,897,495,181 1,897,495, US Dollar Government Liquidity Fund US$81,500,101 81,500,101 US$1.00 Sterling Government Liquidity Fund 144,677, ,677, Euro Government Liquidity Fund 21,725,150 21,725, of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

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8 US Dollar Fund - Investment Adviser s Report for the six months ended 31 July 2012 Commentary Performance data 3mths 6mths 1 year 3 years Fund (%) Benchmark (%)* * Benchmark: 30 Day LIBID Performance commentary As interest rates remained unchanged, money market investment yields remained at historic lows. Over the period, the Fund returned 0.10% in the six months ending 31 July 2012 versus a 0.03% return from the benchmark index. The assets under management (AUM) increased by approximately 6.4% since the end of January to US$3.58 billion by the end of July. As with the nature of the product considerable client flows were experienced, but there were no material movements that impacted the portfolio strategy or investment yield. Economic data was mixed during the period, with a strong start to the year followed by a more disappointing second quarter. This was largely in reference to business activity, with the widely watched PMI surveys making solid gains in the first quarter but activity appeared to moderate thereafter. Employment conditions showed some modest signs of improvement against this backdrop with consecutive months of positive payroll growth, although the unemployment remained elevated above 8%. Although headline inflation remained above 2% throughout the period due to strong commodity price pressures that were underpinned by severe drought conditions, inflation showed signs of trending lower in recent months. Despite the mild improvements in the US economic outlook, financial markets remained overshadowed by events in Europe where concerns regarding sovereign debt burdens returned to the forefront. Whilst a new rescue package and debt writedown was agreed for Greece, investor fears extended to Spain and Italy against a backdrop of ratings downgrades which left global bonds markets in a state of dislocation. Against this backdrop, the Federal Reserve maintained an accommodative stance by extending its quantitative easing policy (via Operation Twist) and signalled their intent to keep official interest rates at their historically low levels for an extending period of time, possibly into In line with this 2-year US Treasury yields were unchanged over the period whilst 10-year US Treasury yields declined by almost 40 basis points. Money markets appeared to be well supported by accommodative central bank policies which helped US$ Libor rates to move lower. However, continued investor sensitivity to headlines led us to manage the Fund conservatively, focusing on liquidity and capital preservation objectives. In line with this, we maintained high levels of overnight liquidity and investments were predominantly within three months. Credit exposures and diversification were proactively managed against a backdrop of ratings downgrades with security selection continuing to be driven by fundamental analysis. Where opportunities existed to extend duration, these were expressed through government and agency securities owing to a preference for liquid negotiable investments. For this reason the allocation to adjustable rate products also remained low, as well due to an expectation for low rates. There were no domestic political events that materially changed the investment landscape within which the Fund operates. Northern Trust Global Investments Limited Investment Adviser September of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

9 Sterling Fund - Investment Adviser s Report for the six months ended 31 July 2012 Commentary Performance data 3mths 6mths 1 year 3 years Fund (%) Benchmark (%)* * Benchmark: 30 Day LIBID Performance commentary The Fund outperformed the benchmark by two basis points over the last quarter and 13 basis points in the last six months. The AUM decreased by approximately 10% to 3.73 billion over the six month period. As with the nature of the product considerable client flows were experienced, but there were no material movements that impacted the portfolio strategy or investment yield. The Bank of England (BoE) kept rates on hold at 0.50% and increased the asset purchase program by 50 billion twice. The total quantitative easing now stands at 375 billion. To induce stimulus to the wider economy the BoE announced the creation of a Government and BoE Funding for Lending Scheme (FLS) while also pushing for the activation of the bank s Extended Collateral Term Repo Facility (ECTR). If however the inflation is expected to be above the target in the medium term, the Committee would subsequently withdraw some of the monetary stimulus. The period also witnessed European authorities taking steps to restore market confidence. The BoE noted that downside risks to the outlook had increased as a result of weak data across the Euro zone, the US and some emerging markets. The improvement in sentiment over the first three months of the year had waned and a sense of caution had again become apparent in financial markets. However, upside risks to inflation had lessened with recent reductions in commodity prices. Economic data remained subdued during the period, culminating in business activity indicators showing little, if any, expansion. The UK moved deeper into its recession with a 0.7% fall in GDP in the second quarter. House prices recorded their first monthly fall this year. Business indicators such as the CBI Business Optimism and CBI Reported Sales took a big hit. There was a clear flight to quality over the period with yields on 10 year Gilts beating the previous low of 1.92% in January, and hereby reaching the lowest level since Bank of England records began in The overall level of yields on UK government bonds had been broadly unchanged of late and remained at very low levels. Our strategy remains focused on high quality investments and liquidity and ensuring that holding investments perceived to be more exposed to the continuing maelstrom in the euro zone will be minimalised. There were no domestic political events that materially changed the investment landscape within which the Fund operates. Northern Trust Global Investments Limited Investment Adviser September 2012 northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 9 of 51

10 Euro Fund - Investment Adviser s Report for the six months ended 31 July 2012 Commentary Performance data 3mths 6mths 1 year 3 years Fund (%) Benchmark (%)* * Benchmark: 30 Day LIBID Performance commentary The Fund returned 0.08% in the six months ending July 2012 versus 0.07% return from the benchmark index. The AUM remained unchanged at 2.08 billion by the end of July As with the nature of the product considerable client flows were experienced, but there were no material movements that impacted the portfolio strategy or investment yield. The European Central Bank (ECB) cut key rates by 25 basis points this July, bringing the main base interest rate to 0.75% and importantly the deposit rate to 0.00%. The period also witnessed European authorities taking steps to restore market confidence. 800 European banks borrowed a total of 530 billion in three-year funds at the second LTRO offering. In addition Eurozone finance ministers agreed to merge the two emergency fund vehicles, the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM), with an effective firepower of almost 700 billion. The ECB noted that economic growth in the area remained weak and the underlying pace of monetary expansion remained subdued. As businesses took a pessimistic outlook, the European Commission's sentiment index fell for the fifth month in a row to 87.9 points in July from 89.9 in June. Euro-area consumer confidence fell to in July, the lowest since August Likewise, Manufacturing sector s confidence continued undeterred in its downward trend with the Flash manufacturing PMI falling to 44.1 from The period was also dominated by a series of Sovereign downgrades. Despite the downbeat economic outlook in Europe, a few positive events appeared to improve overall sentiment. The EU Summit at the end of June began the arduous path of mapping out solutions for the debt situation in Europe. The politicians proposed to recapitalise banks from EFSF/ESM and to move towards a banking union. The capital of the European Investment Bank was also to be increased by 10 billion along with a 120 billion growth pact. Entering a new environment where the ECB no longer paid banks for leaving money with the central bank meant that most banks were no longer willing to show a positive yield in the overnight for deposits and repo. The escalation of the euro zone sovereign debt crisis saw a major flight to quality by investors. Twoyear bund yields were seen trading below JGB s for the first time mostly on periphery concerns. The cost of borrowing dollars against euros in forward foreign exchange markets and Euro Libor rates both fell throughout. Despite the guarded optimism, downside risks to economic outlook persist on the back of the euro zone sovereign debt crisis and a moderate growth outlook in most developed economies. We continue to take a more cautious investment approach and place a high focus on liquidity management and quality investments. There were no domestic political events that materially changed the investment landscape within which the Fund operates. Northern Trust Global Investments Limited Investment Adviser September of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

11 US Dollar Government Liquidity Fund - Investment Adviser s Report for the six months ended 31 July 2012 Commentary Performance data 3mths 6mths 1 year 3 years Fund (%) n/a Benchmark (%)* n/a *Benchmark : Overnight LIBID Performance commentary As interest rates remained unchanged, money market investment yields remained at historic lows. Over the period, the Fund returned 0.06% in the six months ended 31 July 2012 versus a 0.02% return from the benchmark. The AUM increased by approximately 204% since the end of January to US$94.90 million by the end of July. These were driven by large movements from a single client, but there was no material impact on the Fund as the investment strategy has continued to be aligned with the high degree of investor concentration. Economic data was mixed during the period, with a strong start to the year followed by a more disappointing second quarter. This was largely in reference to business activity, with the widely watched PMI surveys making solid gains in the first quarter but activity appeared to moderate thereafter. Employment conditions showed some modest signs of improvement against this backdrop with consecutive months of positive payroll growth, although the unemployment remained elevated above 8%. Although headline inflation remained above 2% throughout the period due to strong commodity price pressures that were underpinned by severe drought conditions, inflation showed signs of trending lower in recent months. Despite the mild improvements in the US economic outlook, financial markets remained overshadowed by events in Europe where concerns regarding sovereign debt burdens returned to the forefront. Whilst a new rescue package and debt writedown was agreed for Greece, investor fears extended to Spain and Italy against a backdrop of ratings downgrades which left global bonds markets in a state of dislocation. Against this backdrop, the Federal Reserve maintained an accommodative stance by extending its quantitative easing policy (via Operation Twist) and signalled their intent to keep official interest rates at their historically low levels for an extending period of time, possibly into In line with this 2-year US Treasury yields were unchanged over the period whilst 10-year US Treasury yields declined by almost 40 basis points. In light of market conditions and low investment yields, our strategy remained conservative focusing investments in US Treasury backed repo and short dated government securities. This was also on account of high investor concentrations in the fund that warranted high levels of liquidity. Cognisant of increased investor sensitivity to headlines particularly with respect to Europe, we also maintained a pro-active stance with respect to selection of global sovereign exposures. There were no domestic political events that materially changed the investment landscape within which the Fund operates. Northern Trust Global Investments Limited Investment Adviser September 2012 northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 11 of 51

12 Sterling Government Liquidity Fund - Investment Adviser s Report for the six months ended 31 July 2012 Commentary Performance data 3mths 6mths 1 year 3 years Fund (%) Benchmark (%)* *Benchmark : Overnight LIBID Performance commentary The Fund underperformed the benchmark by two basis points over the last quarter and one basis point in the last six months. The AUM increased by approximately 19% to million over the six month period. As with the nature of the product considerable client flows were experienced, but there were no material movements that impacted the portfolio strategy or investment yield. The Bank of England kept rates on hold at 0.50% and increased the asset purchase program by 50 billion twice. The total quantitative easing now stands at 375 billion. To induce stimulus to the wider economy the BoE announced the creation of a Government and BoE Funding for Lending Scheme (FLS) while also pushing for the activation of the bank s Extended Collateral Term Repo Facility (ECTR). If however the inflation is expected to be above the target in the medium term, the Committee would subsequently withdraw some of the monetary stimulus. The period also witnessed European authorities taking steps to restore market confidence. The BoE noted that downside risks to the outlook had increased as a result of weak data across the euro zone, the US and some emerging markets. The improvement in sentiment over the first three months of the year had waned and a sense of caution had again become apparent in financial markets. However, upside risks to inflation had lessened with recent reductions in commodity prices. Economic data remained subdued during the period, culminating in business activity indicators showing little, if any, expansion. The UK moved deeper into its recession with a 0.7% fall in GDP in the second quarter. House prices recorded their first monthly fall this year. Business indicators such as the CBI Business Optimism and CBI Reported Sales took a big hit. There was a clear flight to quality over the period with yields on 10 year Gilts beating the previous low of 1.92% in January, and hereby reaching the lowest level since Bank of England records started in The overall level of yields on UK government bonds had been broadly unchanged of late and remained at very low levels. Our strategy remains focused on high quality investments and liquidity and ensuring that holding investments perceived to be more exposed to the continuing maelstrom in the euro zone will be minimalised. There were no domestic political events that materially changed the investment landscape within which the Fund operates. Northern Trust Global Investments Limited Investment Adviser September of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

13 Euro Government Liquidity Fund - Investment Adviser s Report for the six months ended 31 July 2012 There were no shares in issue in The Euro Government Liquidity Fund during the period ended 31 July It is the intention of the Directors to re-launch the Fund when market conditions improve and there is investor demand. Northern Trust Global Investments Limited Investment Adviser September 2012 northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 13 of 51

14 Portfolio of Investments US Dollar Fund Nominal Holdings Investment Fair Value US$ % of Net Assets Investment in Transferable Securities: 46.96% (31 January 2012: 31.99%) Certificates of Deposit: 13.04% (31 January 2012: 6.11%) 41,000,000 Bank of Montreal 0.2% 10/08/ ,000, ,000,000 Canadian Imperial Bank of Commerce 0.27% 22/10/ ,000, ,000,000 Commonwealth Bank of Australia 0.38% 17/08/ ,000, ,000,000 Commonwealth Bank of Australia 0.25% 09/10/ ,000, ,000,000 Credit Agricole 0.3% 01/08/ ,000, ,000,000 Credit Suisse 0.33% 16/10/ ,000, ,000,000 ING Bank 0.32% 24/09/ ,000, ,000,000 National Australia Bank 0.4% 21/08/ ,000, ,000,000 Nederland Waterschapsbank 0% 31/08/2012 4,998, ,000,000 Oversea Chinese Banking 0% 23/10/ ,980, ,000,000 Rabobank Nederland 0% 11/10/ ,977, ,000,000 Rabobank Nederland 0.3% 22/10/ ,000, ,000,000 Rabobank Nederland 0.32% 23/10/ ,000, Total Certificates of Deposit 465,956, Commercial Paper: 30.70% (31 January 2012: 21.84%) 40,000,000 Agence Centrale des Organismes de la Securite Sociale 0% 13/08/ ,996, ,000,000 Agence Centrale des Organismes de la Securite Sociale 0% 17/08/2012 9,998, ,000,000 Agence Centrale des Organismes de la Securite Sociale 0% 23/08/ ,993, ,000,000 Agence Centrale des Organismes de la Securite Sociale 0% 25/09/ ,988, ,000,000 Austria (Republic Of) 0% 14/08/ ,997, ,000,000 Austria (Republic Of) 0% 24/08/ ,993, ,000,000 Bank Nederlandse Gemeenten 0% 20/08/ ,990, ,000,000 BMW 0% 23/10/ ,989, ,000,000 DBS Bank 0% 10/08/ ,998, ,000,000 DBS Bank 0% 05/09/ ,993, ,000,000 Deutsche Bahn 0% 12/09/2012 9,997, ,000,000 European Investment Bank 0% 01/10/ ,969, ,000,000 FMS Wertmanagement 0% 06/08/ ,999, ,000,000 FMS Wertmanagement 0% 26/10/ ,973, ,000,000 FMS Wertmanagement 0% 02/11/ ,943, ,000,000 Johnson & Johnson International Financial Serivces 0% 08/08/ ,998, ,000,000 Kreditanstalt Fuer Wiederaufbau 0% 05/09/ ,992, of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

15 Portfolio of Investments US Dollar Fund Nominal Holdings Investment Fair Value US$ % of Net Assets 30,000,000 Kreditanstalt Fuer Wiederaufbau 0% 20/09/ ,989, ,000,000 Kreditanstalt Fuer Wiederaufbau 0% 27/09/ ,989, ,000,000 Kreditanstalt Fuer Wiederaufbau 0% 05/10/ ,989, ,000,000 Kreditanstalt Fuer Wiederaufbau 0% 23/10/ ,977, ,000,000 Nederlandse Waterschapsbank 0% 21/08/ ,993, ,000,000 Nederlandse Waterschapsbank 0% 19/12/ ,979, ,000,000 Netherlands (Kingdom of) 0% 31/08/ ,995, ,000,000 Netherlands (Kingdom of) 0% 19/11/ ,970, ,000,000 Oversea Chinese Banking 0% 08/08/ ,998, ,000,000 Quebec (Province of) 0% 28/08/ ,996, ,000,000 Queensland Treasury 0% 10/10/ ,978, ,000,000 Sanofi 0% 27/09/ ,991, ,000,000 Temasek Financial (II) Private 0% 30/08/2012 2,999, ,000,000 Temasek Financial (II) Private 0% 18/10/ ,984, ,000,000 Treasury Corporation of Victoria 0% 09/10/ ,983, ,000,000 Unilever 0% 14/08/ ,997, ,000,000 Western Australian Treasury 0% 14/08/ ,998, ,000,000 Western Australian Treasury 0% 28/08/ ,992, ,000,000 Western Australian Treasury 0% 17/09/ ,987, ,000,000 Westpac Banking 0% 26/10/ ,966, Total Commercial Paper 1,097,574, Floating Rate Bonds: 0.56% (31 January 2012: 0.00%) 20,000,000 Bank of Montreal 0.57% 14/08/ ,001, Total Floating Rate Bonds 20,001, Supranational Bonds: 0.14% (31 January 2012: 0.00%) 5,000,000 Landwirtschaftliche Rentenbank 1.88% 24/09/2012 5,012, Total Supranational Bonds 5,012, Treasury Bills: 2.52% (31 January 2012: 4.04%) 30,000,000 United States Treasury Bill 0% 25/10/ ,992, ,000,000 United States Treasury Bill 0% 27/12/ ,961, Total Treasury Bills 89,954, Total investments in transferable securities 1,678,497, northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 15 of 51

16 Portfolio of Investments US Dollar Fund Nominal Holdings Investment Fair Value US$ % of Net Assets Reverse Repurchase Agreements: 25.88% (31 January 2012: 35.37%) 25,000,000 Barclays Bank 0.31% 25/10/ ,000, ,000,000 BNP Paribas Securities 0.17% 01/08/ ,000, ,000 Credit Suisse Securities 0.16% 01/08/ , ,000,000 Societe Generale 0.17% 01/08/ ,000, ,000,000 UBS Securities 0.17% 01/08/ ,000, Total Reverse Repurchase Agreements 925,517, Time Deposits: 27.18% (31 January 2012: 34.86%) 40,000,000 Australia and New Zealand Banking 0.3% 21/08/ ,000, ,259,597 Australia and New Zealand Banking 0.16% 13/12/ ,259, ,000,000 Bank Nederlandse Gemeenten 0.3% 27/08/ ,000, ,939,000 Barclays Bank 0.10% 01/08/ ,939, ,000,000 Credit Agricole 0.21% 01/08/ ,000, ,000,000 Den Norske Bank 0.16% 01/08/ ,000, ,000,000 Skandinaviska Enskilda Banken 0.15% 01/08/ ,000, ,000,000 Societe Generale 0.25% 01/08/ ,000, ,000,000 Svenska Handelsbanken 0.15% 01/08/ ,000, Total Time Deposits 971,198, Financial assets designated at fair value through profit or loss 3,575,213, Cash Other net liabilities (823,480) (0.02) Net Assets Attributable to Holders of Redeemable Participating Shares 3,574,390, Number of Distributing Shares in Issue 3,574,390,971 Net Asset Value per Distributing Share US$1.00 Analysis of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market % of Total Assets Deposits with credit institutions Current assets of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

17 Portfolio of Investments Sterling Fund Nominal Holdings Investment Fair Value % of Net Assets Investment in Transferable Securities: 38.80% (31 January 2012: 18.35%) Certificates of Deposit: 18.62% (31 January 2012: 1.31%) 30,000,000 Bank of Tokyo Mitsubishi UFJ 0% 13/08/ ,994, ,000,000 Bank of Tokyo Mitsubishi UFJ 0.68% 08/10/ ,000, ,000,000 BNP Paribas 0% 24/09/ ,952, ,000,000 BNP Paribas 0.85% 17/10/ ,000, ,000,000 Canadian Imperial Bank of Commerce 0.54% 02/08/ ,000, ,000,000 Credit Suisse First Boston 0.60% 16/10/ ,000, ,000,000 Den Norske Bank 0.56% 19/10/ ,000, ,000,000 Deutsche Bank 0.64% 10/10/ ,000, ,000,000 JP Morgan Chase Bank 0.54% 24/10/ ,000, ,000,000 Mitsubishi Trust and Banking 0.69% 08/ ,000, ,000,000 Nordea Bank Finland 0.63% 13/08/ ,000, ,000,000 Nordea Bank Finland 0.63% 08/10/ ,000, ,000,000 Nordea Bank Finland 0.59% 19/10/ ,000, ,000,000 Rabobank International 0.48% 23/10/ ,000, Total Certificates of Deposit 694,947, Commercial Paper: 13.36% (31 January 2012: 13.92%) 60,000,000 Agence Centrale des Organismes de la Securite Sociale 0% 22/10/ ,929, ,000,000 European Investment Bank 0% 11/01/2013 4,988, ,200,000 FMS Wertmanagement 0% 28/09/ ,113, ,000,000 FMS Wertmanagement 0% 16/01/ ,893, ,000,000 GE Capital UK Funding 0% 14/08/ ,991, ,000,000 Netherlands (Kingdom of) 0% 06/08/ ,990, ,000,000 Lloyds TSB Bank 0% 22/10/ ,900, ,000,000 Nederlandse Waterschapsbank 0% 06/09/ ,966, ,000,000 Nordea Bank 0% 09/08/ ,997, Total Commercial Paper 498,771, Supranational Bonds: 0.11% (31 January 2012: 0.00%) 3,960,000 European Investment Bank 4.50% 14/01/2013 4,029, Total Suprantional Bonds 4,029, northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 17 of 51

18 Portfolio of Investments Sterling Fund Nominal Holdings Investment Fair Value % of Net Assets Treasury Bills: 6.71% (31 January 2012: 2.41%) 25,490,000 United Kingdom (Government of) 0% 03/09/ ,481, ,000,000 United Kingdom (Government of) 0% 22/10/ ,888, ,000,000 United Kingdom (Government of) 0% 14/01/ ,918, ,000,000 United Kingdom (Government of) 0% 21/01/ ,924, Total Treasury Bills 250,213, Total investments in transferable securities 1,447,962, Reverse Repurchase Agreements: 40.20% (31 January 2012: 39.19%) 242,000,000 BNP Paribas 0.4% 01/08/ ,000, ,000,000 Citigroup Global Markets 0.3% 01/08/ ,000, ,000,000 Credit Suisse Securities 0.36% 01/08/ ,000, ,000,000 Merrill Lynch International 0.38% 01/08/ ,000, ,798,000 Morgan Stanley & Co International 0.4% 01/08/ ,798, ,000,000 Royal Bank of Scotland 0.4% 01/08/ ,000, ,000,000 Societe Generale 0.4% 01/08/ ,000, Total Reverse Repurchase Agreements 1,500,798, Time Deposits: 21.04% (31 January 2012: 43.42%) 296,523,000 Barclays Bank 0.45% 01/08/ ,523, ,600,000 Credit Agricole 0.51% 01/08/ ,600, ,000,000 HSBC 0.45% 01/08/ ,000, Total Time Deposits 785,123, Financial Assets designed at Fair Value through Profit or Loss 3,733,883, Bank overdraft (10,993) - Other net liabilities (1,664,018) (0.04) Net Assets Attributable to Holders of Redeemable Participating Shares 3,732,208, Number of Distributing Shares in issue 3,732,208,115 Net Asset Value per Distributing Share of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

19 Portfolio of Investments Sterling Fund % of Total Assets Analysis of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market Deposits with credit institutions Current assets northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 19 of 51

20 Portfolio of Investments Euro Fund Nominal Holdings Investment Fair Value % of Net Assets Investment in Transferable Securities: 49.87% (31 January 2012: 36.42%) Certificates of Deposit: 23.30% (31 January 2012: 7.82%) 45,000,000 Bank of Tokyo Mitsubishi UFJ 0% 13/08/ ,999, ,000,000 Bank of Tokyo Mitsubishi UFJ 0% 06/09/ ,990, ,000,000 BNP Paribas 0% 13/08/ ,999, ,000,000 BNP Paribas 0% 12/10/ ,981, ,000,000 Deutsche Bank 0% 10/10/ ,988, ,000,000 ING Bank 0% 14/08/ ,998, ,000,000 Lloyds TSB Bank 0.14% 18/10/ ,000, ,000,000 Mitsubishi UFJ Trust and Banking 0% 02/08/ ,999, ,000,000 Mitsubishi UFJ Trust and Banking 0% 06/08/ ,999, ,000,000 Nordea Bank Finland 0% 03/09/ ,993, ,000,000 Nordea Bank Finland 0.25% 05/10/ ,000, ,000,000 Rabobank Nederland 0% 14/01/ ,951, ,000,000 Sumitomo Mitsui Banking 0% 06/08/ ,999, ,000,000 Sumitomo Mitsui Banking 0% 04/09/ ,996, ,000,000 Svenska Handelsbanken 0.05% 17/10/ ,000, ,000,000 The Toronto Dominion Bank 0.005% 13/08/ ,000, Total Certificates of Deposit 484,898, Commercial Paper: 15.51% (31 January 2012: 15.55%) 30,000,000 European Investment Bank 0% 09/10/ ,995, ,000,000 GE Capital European Funding 0% 05/10/ ,986, ,000,000 ING Bank 0% 09/08/ ,999, ,000,000 ING Bank 0% 16/08/2012 7,999, ,000,000 ING Bank 0% 12/10/ ,974, ,000,000 Nordea Bank 0% 10/09/ ,996, ,000,000 Rabobank Nederland 0% 17/09/ ,997, ,000,000 Skandinaviska Enskilda Banken 0% 06/09/ ,991, ,000,000 Svenska Handelsbanken 0% 23/10/ ,992, ,000,000 UBS 0% 09/10/ ,978, Total Commercial Paper 322,912, of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

21 Portfolio of Investments Euro Fund Nominal Holdings Investment Corporate Bonds: 1.55% (31 January 2012: 0.06%) Fair Value % of Net Assets 9,000,000 Deutsche Bank 4.88% 24/09/2012 9,063, ,984,000 Svenska Handelsbanken 3% 20/08/ ,019, Total Corporate Bonds 32,082, Supranational Bonds: 0.36% (31 January 2012: 0.00%) 7,388,000 European Investment Bank 5.38% 15/10/2012 7,469, Total Suprantional Bonds 7,469, Treasury Bills: 9.15% (31 January 2012: 13.44%) 100,000,000 France (Republic of) 0% 27/09/ ,992, ,365,000 France (Republic of) 0% 29/11/ ,364, ,000,000 France (Republic of) 0% 27/12/ ,000, Total Treasury Bills 190,356, Total investments in transferable securities 1,037,720, Time Deposits: 29.76% (31 January 2012: 29.24%) 200,000,000 Credit Agricole 0.01% 01/08/12 200,000, ,000,000 Deutsche Bank 0% 01/08/12 40,000, ,230,000 Pohjola Bank 0% 01/08/12 199,230, ,000,000 Societe Generale 0.2% 01/08/12 180,000, Total Time Deposits 619,230, Reverse Repurchase Agreements: 19.22% (31 January 2012: 34.59%) 300,000,000 BNP Paribas 0% 01/08/ ,000, ,000,000 Societe Generale 0% 01/08/ ,000, Total Reverse Repurchase Agreements 400,000, northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 21 of 51

22 Portfolio of Investments Euro Fund Nominal Holdings Investment Fair Value % of Net Assets Financial Assets designed at Fair Value through Profit or Loss 2,056,950, Cash 22,999, Other net assets 893, Net Assets Attributable to Holders of Redeemable Participating Shares 2,080,843, Number of Distributing Shares in issue 2,080,843,060 Net Asset Value per Distributing Share 1.00 Analysis of Total Assets % of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market Deposits with credit institutions Current assets of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

23 Portfolio of Investments US Dollar Government Liquidity Fund Nominal Holdings Investment Fair Value US$ % of Net Assets Investment in Transferable Securities: 10.54% (31 January 2012: 3.19%) Commercial Paper: 10.54% (31 January 2012: 0.00%) 5,000,000 Austria (Republic of) 0% 14/08/2012 4,999, ,000,000 Austria (Republic of) 0% 24/08/2012 4,999, Total Commercial Paper 9,999, Total Investments in Transferable Securities 9,999, Reverse Repurchase Agreements: 89.46% (31 January 2012: 96.83%) 20,000,000 BNP Paribas Securities 0.17% 01/08/ ,000, ,902,000 Credit Suisse Securities 0.16% 01/08/2012 4,902, ,000,000 Deutsche Bank Securities 0.17% 01/08/ ,000, ,000,000 HSBC Securities 0.15% 01/08/ ,000, ,000,000 UBS Securities 0.17% 01/08/ ,000, Total Reverse Repurchase Agreements 84,902, Financial assets designated at fair value through profit or loss 94,901, Cash Other net liabilities (1,446) - Net Assets Attributable to Holders of Redeemable Participating Shares 94,900, Number of Distributing Shares in Issue 94,900,101 Net Asset Value per Distributing Share US$1.00 Analysis of Total Assets % of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market Deposits with credit institutions Current assets northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 23 of 51

24 Portfolio of Investments Sterling Government Liquidity Fund Nominal Holdings Investment Reverse Repurchase Agreements: % (31 January 2012: %) Fair Value % of Net Assets 8,000,000 BNP Paribas 0.4% 01/08/2012 8,000, ,000,000 Credit Suisse Securities 0.36% 01/08/2012 8,000, ,000,000 Merrill Lynch International 0.38% 01/08/2012 8,000, ,202,000 Morgan Stanley & Co International 0.4% 01/08/2012 9,202, ,000,000 Royal Bank Of Scotland 0.4% 01/08/2012 8,000, ,000,000 Societe Generale 0.4% 01/08/2012 8,000, Total Reverse Repurchase Agreements 49,202, Financial Assets designated at Fair Value through Profit or Loss 49,202, Cash 1,494 - Other net liabilities (24,121) (0.05) Net Assets Attributable to Holders of Redeemable Participating Shares 49,179, Number of Distributing Shares in issue 49,179,373 Net Asset Value per Distributing Share 1.00 Analysis of Total Assets % of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market - Deposits with credit institutions Current assets of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

25 Portfolio of Investments Euro Government Liquidity Fund Nominal Holdings Investment Fair Value % of Net Assets Financial Assets designated at Fair Value through Profit or Loss - - Cash - - Other net assets / liabilities - - Net Assets Attributable to Holders of Redeemable Participating Shares - - Number of Distributing Shares in issue - Net Asset Value per Distributing Share - Analysis of Total Assets % of Total Assets Transferable securities and money market instruments admitted to an official stock exchange or dealt on a regulated market - Deposits with credit institutions - Current assets - - northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 25 of 51

26 Profit and Loss Account for the Six months Ended 31 July 2012 Notes US Dollar Fund US$ Sterling Fund Euro Fund US Dollar Govt Liquidity Fund US$ Sterling Govt Liquidity Fund Euro Govt Liquidity Fund Total* July 2012 US$ Investment Income Interest income 3,802,164 10,702,897 1,702,684 61,662 94,364-23,088,510 Realised gain on investments and currencies - - 2, ,419 Total Investment Income 3,802,164 10,702,897 1,705,343 61,662 94,364-23,091,929 Expenses Investment Adviser fees 10 (1,945,383) (2,422,432) (1,095,875) (138) (30,389) - (7,224,450) Administration fees 10 (268,837) (299,540) (167,276) - (3,799) - (962,499) Custody fees 10 (255,972) (299,540) (165,912) - (3,799) - (947,881) Transaction costs (2,672) (20,672) (11,269) (49,776) Audit fees (12,681) (11,784) (6,977) (6,075) (3,521) - (51,874) Directors fees 6 (2,208) (3,048) (1,036) 82 1,010 - (6,673) Other expenses (8,733) (11,270) (3,391) 592 1,753 - (27,517) Total Operating Expenses (2,496,486) (3,068,286) (1,451,736) (5,539) (38,745) - (9,270,670) Net income before finance costs 1,305,678 7,634, ,607 56,123 55,619-13,821,259 Finance Costs Interest expense (54,706) (20,302) - (2) (1,316) - (88,816) Witholding tax Dividends (1,250,972) (7,614,309) (253,607) (56,121) (54,303) - (13,732,443) Change in Net Assets Attributable to Holders of Redeemable Participating Shares *Includes The Sterling Fund and The Sterling Government Liquidity Fund figures converted at the average exchange rates of 1= US$ and The Euro Fund and The Euro Government Liquidity Fund converted at the average exchange rates of 1= US$ The notes on pages 34 to 39 form an integral part of the financial statements. 26 of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

27 Profit and Loss Account for the Year Ended 31 January 2012 Notes US Dollar Fund US$ Sterling Fund Euro Fund US Dollar Govt Liquidity Fund US$ Sterling Govt Liquidity Fund Euro Govt Liquidity Fund Total* January 2012 US$ Investment Income Interest income 7,241,244 20,425,954 14,071,430 39, , ,128 61,005,282 Realised gain/(loss) on investments and currencies 25,109 12,354 13,385 - (6) - 63,634 Total Investment Income 7,266,353 20,438,308 14,084,815 39, , ,128 61,068,916 Expenses Investment Adviser fees 10 (3,646,820) (4,191,023) (2,486,050) - (101,357) (39,284) (14,071,172) Administration fees 10 (543,653) (522,972) (313,693) - (12,669) (9,136) (1,855,230) Custody fees 10 (543,653) (522,972) (313,693) - (12,669) (9,136) (1,855,230) Transaction costs (16,473) (39,227) (16,340) (102,339) Audit fees (10,809) (6,716) (7,749) (6,176) (3,838) (4,428) (50,940) Directors fees 6 (8,823) (7,759) (5,296) (90) (27,495) Other expenses (98,192) (73,704) (71,059) (9,042) (4,238) (560) (332,457) Total Operating Expenses (4,868,423) (5,364,373) (3,213,880) (15,308) (134,288) (62,182) (18,294,863) Net income before finance costs 2,397,930 15,073,935 10,870,935 24, , ,946 42,774,053 Finance Costs Interest expense (53,308) (47,137) (773) (130,180) Witholding tax (1,997) - - (57) - - (2,054) Dividends (2,342,625) (15,026,798) (10,870,935) (24,514) (251,856) (390,173) (42,641,819) Change in Net Assets Attributable to Holders of Redeemable Participating Shares * Includes The Sterling Fund and The Sterling Government Liquidity Fund figures converted at the average exchange rate of 1 = US$ and The Euro Fund and The Euro Government Liquidity Fund figures converted at the average exchange rate 1 = US$ The notes on pages 34 to 39 form an integral part of the financial statements. northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 27 of 51

28 Profit and Loss Account for the period Ended 31 July 2011 Notes US Dollar Fund US$ Sterling Fund Euro Fund US Dollar Govt Liquidity Fund US$ Sterling Govt Liquidity Fund Euro Govt Liquidity Fund Total* July 2011 US$ Investment Income Interest income 4,637,167 10,755,416 8,309,118 27, , ,399 35,098,137 Realised gain on investments and currencies 3,304 12,354 6, ,576 Total Investment Income 4,640,471 10,767,770 8,315,786 28, , ,399 35,131,713 Expenses Investment Adviser fees 10 (2,180,812) (2,062,497) (1,156,945) - (76,417) (25,598) (7,366,057) Administration fees 10 (278,176) (256,779) (144,622) - (9,552) (5,485) (927,929) Custody fees 10 (278,176) (256,779) (144,622) - (9,552) (5,485) (927,929) Transaction costs (8,748) (8,748) Audit fees (4,887) 1,806 (2,987) (1,509) (1,294) 2,278 (6,577) Directors fees 6 (7,759) (6,666) (3,794) (177) (583) (186) (25,470) Other expenses (63,571) (54,830) (40,220) (6,583) (5,188) (4,170) (231,725) Total Operating Expenses (2,822,129) (2,635,745) (1,493,190) (8,269) (102,586) (38,646) (9,494,435) Net income before finance costs 1,818,342 8,132,025 6,822,596 20, , ,753 25,637,278 Finance Costs Interest expense (9,259) (15,255) (10,052) - (84) (378) (49,240) Witholding tax Dividends (1,809,083) (8,116,770) (6,812,544) (20,077) (201,287) (292,375) (25,588,038) Change in Net Assets Attributable to Holders of Redeemable Participating Shares * Includes The Sterling Fund and The Sterling Government Liquidity Fund figures converted at the average exchange rate of 1 = US$ and The Euro Fund and The Euro Government Liquidity Fund figures converted at the average exchange rate 1 = US$ The notes on pages 34 to 39 form an integral part of the financial statements. 28 of 51 Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements northerntrust.com

29 Balance Sheet as at 31 July 2012 Notes US Dollar Fund US$ Sterling Fund Euro Fund US Dollar Govt Liquidity Fund US$ Sterling Govt Liquidity Fund Euro Govt Liquidity Fund Total* July 2012 US$ Assets Financial assets at fair value through profit or loss - Investments in transferable securities 1,678,497,942 1,447,962,126 1,037,720,261 9,999, ,235,171,805 - Time deposits 971,198, ,123, ,230, ,963,943,930 - Reverse repurchase agreements 925,517,000 1,500,798, ,000,000 84,902,000 49,202,000-3,931,581,651 Cash at bank ,999, ,494-28,328,550 Accrued income 265, ,622 1,351, ,608,504 3,575,479,951 3,734,315,748 2,081,300,641 94,901,936 49,204,020-12,161,634,440 Liabilities: Amounts falling within one year Financial liabilities at amortised cost - Bank overdraft 7 - (10,993) (17,224) - Investment Adviser fee payable 10 (650,335) (768,384) (291,582) (325) (11,314) - (2,231,390) - Administration fee payable 10 (86,237) (96,049) (52,484) - (1,887) - (304,320) - Custodian fee payable 10 (81,850) (96,049) (81,371) - (943) - (334,030) - Dividends payable (252,166) (1,092,014) (22,818) (11,130) (9,904) - (2,017,884) - Other expenses payable (18,392) (44,144) (9,326) 9,620 (599) - (90,361) Total Liabilities (excluding net assets attributable to holders of redeemable participating shares) (1,088,980) (2,107,633) (457,581) (1,835) (24,647) - (4,995,209) Total Net Assets attributable to holders of redeemable participating shares 3,574,390,971 3,732,208,115 2,080,843,060 94,900,101 49,179,373-12,156,639,231 Participating Shares Distributing shares 3 3,574,390,971 3,732,208,115 2,080,843,060 94,900,101 49,179,373 - Net Asset Value per Distributing Share US$ US$ * Includes The Sterling Fund and The Sterling Government Liquidity Fund figures converted at the period-end exchange rate of 1 = US$ and The Euro Fund and The Euro Government Liquidity Fund figures converted at the periodend exchange rate of 1 = US$ The notes on pages 34 to 39 form an integral part of the financial statements. northerntrust.com Northern Trust Global Funds PLC - Interim Report and Unaudited Financial Statements 29 of 51