Northern Trust to Convert Six Mutual Funds into ETFs

Northern Trust Asset Management will convert six mutual funds into exchange-traded funds in the first quarter of 2027. The firm says the ETF structure will provide shareholders with greater tax efficiency, intraday tradability and more transparent portfolio holdings while keeping existing investment teams in place.

The conversions affect the following funds and assets under management: Northern Stock Index Fund (NOSIX), $19.3 billion, which will become Northern Trust MSCI US 500 ETF (NTLC); Northern International Equity Index Fund (NOINX), $6.7 billion, to be listed as Northern Trust MSCI EAFE ETF (NEFA); Northern Tax-Advantaged Ultra-Short Fixed Income Fund (NTAUX), $2.8 billion, to convert to Northern Trust Tax-Advantaged Ultra-Short Income ETF (TAXU); Northern Mid Cap Index Fund (NOMIX), $2.3 billion, to Northern Trust MSCI US 400 ETF (NTMC); Northern Small Cap Index Fund (NSIDX), $1.6 billion, to Northern Trust MSCI US 2000 ETF (NTSC); and Northern Income Equity Fund (NOIEX), $316 million, to Northern Trust Equity Income ETF (QDFI).

Northern Trust said the changes respond to use of ETFs by investors and financial advisers for portfolio construction. The firm expects the ETF creation and redemption process to reduce taxable events for shareholders compared with mutual fund structures, and that intraday trading and regular disclosure of holdings will make positions easier to view during the trading day.

Michael Hunstad, president of Northern Trust Asset Management, said the firm plans to expand its ETF lineup and bring its existing investment discipline to a larger ETF platform. Dave Abner, the firm’s global head of ETFs and funds, noted, “ETF adoption has continued to broaden as investors look for efficient, transparent and flexible ways to access high-quality investment strategies.”

Northern Trust said the conversions will keep current portfolio objectives and management in place while shifting the vehicle to an ETF wrapper. The firm did not disclose any changes to fee levels or the planned listing venues. The conversions are subject to regulatory approvals and customary shareholder notifications.