Summary

• The S&P 500 pulled back sharply in the first quarter of 2026 as conflict in the Middle East led to a sharp rise in oil prices and increased inflation fears.
• The Northern Funds Large Cap Core Fund outperformed its benchmark for the quarter, returning -3.57% against a -4.33% decline for the S&P 500 Index.
• An emphasis on higher momentum stocks and an allocation to high quality companies demonstrating strong capital stewardship contributed positively to performance during the quarter.
• From a sector perspective, stock selection was most effective within the Health Care and Energy sectors, while selection in Information Technology and Industrials detracted from performance.
• Looking ahead, the investment landscape appears more volatile but still supportive, with policy stimulus providing an offset to rising energy prices and geopolitical uncertainty.

The S&P 500 pulled back sharply in the first quarter of 2026. Geopolitics took center stage as conflict in the middle east led to a sharp rise in oil prices and caused bond yields to increase