I N N OVAT I V E I N V E S T M E N T S T R U C T U R E S

E X P E R T LY D E L I V E R E D

FGR Funds in the Netherlands

HARNESSING THE POWER
O F PA S S I V E M A N AG E M E N T

In order to optimize your investment portfolio’s

performance, you may be looking for cost-efficient

investments that perform in line with the market.

Northern Trust offers investors global access to

experienced index fund managers at low cost. Our

series of Dutch-domiciled, tax-efficient FGR funds

may help you maximize your portfolio’s potential.

N ORTHERN TRUS T’S I N N OVATI VE
PASSIVE FGR F UN D RAN GE

By investing in Northern Trust’s passive Fonds voor Gemene Rekening (FGR),

you gain an important tool to manage your portfolio’s asset allocation and
deliver cost-efficient market exposure. Our funds are some of the first FGR
funds in the Netherlands available for tracking broad index benchmarks, a
capability previously available only in an active fund management capacity.
Northern Trust’s passive FGR funds provide greater transparency and lower
costs than actively managed funds. As the FGR funds are Dutch-domiciled, they
are subject to standard Dutch fiscal treatment. For Dutch investors, this may
be beneficial over foreign domiciled funds. These advantages are explained in
the table. Please refer to the prospectus, its supplements, and the Key Investor
Information document for details on risks for each fund before you make a
decision to invest.

BENEFITS OF THE NORTHERN TRUST FGR FUNDS

Transparency Enjoy confidence in the level of transparency

within these funds as a result of Northern
Trust’s aim to hold the underlying stocks
within the benchmark. However, we may
from time to time invest small portions of the
portfolio in index futures in order to better
match the benchmark. Additionally, because
these funds do not incorporate securities
lending, they have limited counterparty risk.

Cost Savings As these products operate as index funds, they

benefit from passive structure efficiencies and
are therefore naturally low in cost.

Dutch Treaty Network The funds are Dutch-domiciled and are

therefore subject to the standard Dutch fiscal
treatment. In contrast to foreign funds, which
must use a foreign treaty network, this treatment
allows the funds to use the Dutch Treaty Network.
A treaty network is a cluster of agreements
between a country (like the Netherlands) and
other countries that allows the funds to reclaim
part of the withholding taxes paid in other
countries. Depending on each individual
investor’s fiscal situation, an investor may take
advantage of tax efficiencies provided through
the funds.

Performance Investors generally have to pay an average of

Advantage 25-30% withholding tax, substantially diluting
their potential income. With Northern Trust’s new
FGR suite, the fund is able to recoup part of that
tax for our investors, providing the potential to
increase our investors’ dividend income.

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WHAT IS PASSIVE INVESTING?
Passive investing, commonly known as “indexing,”
is a way of gaining low-cost market exposure.
Instead of hiring a particular fund manager to
actively select stocks or bonds for investment,
a passively managed index fund buys all (or
a representative sample) of the securities in a
specific benchmark, such as the S&P 500 Index,
in order to provide diversification and track the
benchmark performance as closely as possible.
Passive funds can be used across all asset classes
and can be broad-based or specific to sectors,
styles, or regions.
At the opposite end of the spectrum is “active
investing,“ where fund managers aim to outperform
a benchmark by selecting certain stocks or bonds
that they believe will outperform in the future. They
tend to charge a premium vs. passive investing.
Passive investing can provide investors a cost
efficient way to closely track the price development
of an underlying index. Specific advantages to
passively managed index funds include:
■■ Diversification: Investing in all or a represen-

tation of stocks in a market index can maximize

diversification, impacting performance.
■■ Lower costs: The average management fee

of a passive fund is generally lower than that

for an active fund invested in the same market
or sector.
■■ Transparency: Passive funds are straightforward

and transparent in their investment objectives.

F OCU S ED O N P ER FO R M A N CE A N D S ECU R IT Y

Northern Trust’s passive FGR funds Along with tax efficiency, the investment philosophy and process of Northern
provide greater transparency and lower Trust’s FGR fund range can contribute to the performance of your portfolio.
costs than actively managed funds. With the choice of three index benchmarks – the MSCI Europe, MSCI
North America and FTSE EPRA/NAREIT – our FGR fund options allow you
to choose from a diverse array of market exposure selections that may fit with
your existing portfolio. The overall investment objectives of our FGR funds
are to closely match the risk and return of the relevant index with net
dividends reinvested.

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AN F GR FUND S TRUC TURE E XA M P L E

A North American Equity FGR Fund

Income from Canada Income from the United States

Dutch Treaty with Canada Dutch Treaty with the United States
(Canada has a 25% withholding tax; the Dutch (The United States has a 30% withholding tax;
treaty will allow the fund to reclaim 10%.) the Dutch treaty will allow the fund to reclaim 15%.)

FBI (tax status)

Investor Investor Investor Investor Investor Investor

AN INTEGRAL COM P ON E NT O F WHAT ARE FGR FUNDS?

YOU R INVES TM E NT S TRATE GY FGR funds are a common type of pooled
investment vehicle in the Netherlands.
Your existing portfolio can benefit from Northern Trust’s FGR funds They take advantage of the very broad
Dutch tax treaty network — a cluster of
agreements between the Netherlands
Core-satellite portfolios and other countries — that allows the
The transparent and low-cost nature of our passive funds can make them a key funds to reclaim withholding taxes on
income to a certain extent. This in turn
component of the low-cost, market-driven core of your portfolio. Incorporating helps to reduce tax liability and increase
them into your platform gives you the freedom in the satellite portion of your investor income.
portfolio to add allocations to niche managers higher on the risk-reward spectrum.

High-income portfolios
In today’s environment of low interest rates, you may be looking for income-producing,
stable alternatives. With FGR funds, you can enjoy the investment benefits of equity
passive solutions without the burden of the 25-30% withholding tax that often
accompany them.

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SELECTIVE INVESTORS SELECT US
Northern Trust is one of the world’s
leading providers of asset servicing, asset
management and wealth management
services and one of the world’s most
admired companies.* Founded in 1889
and celebrating its 125th anniversary in
2014, we have a history of strength and
stability second to none. In 1998, we
launched our asset management business
to deliver investment expertise to both
personal and institutional clients, enabling
them to secure their goals. Today, we are
a global leader in combining high-touch
client service and expertise with innovative
products and technology.

TO LEARN MORE P I ON EER I N G I N D EX M A N AG EM EN T

Consult with your distributor to
determine how Northern Trust’s
FGR funds can help you. Take steps to make sure your portfolio composition reflects the latest
innovations in passively managed index funds. As a pioneer in the field of
FOR FURTHER READING indexing, Northern Trust’s strong heritage of analysis, cutting-edge technology
To obtain more information and commitment to passive management have made us one of the leading
on Northern Trust’s FGR funds
please read our Key Investor passive managers in the world.
Information Documents (KIIDs) Our unique Intelligent Indexing® approach is a disciplined, transparent
and fund factsheets. investment process. It combines strategic market insights and sophisticated
analysis to produce consistent and efficient market exposure.

LO C A L FO CU S , G LO BA L R EAC H

Bring global insight to bear on your portfolio. With Northern Trust as your
fund provider, you benefit from our deep local expertise in the Netherlands
combined with the scale and global outlook of one of the world’s leading
financial institutions.
Our strong relationships with global and local industry bodies, including
EUROSIF and the European Federation for Retirement Provisions, gives our
clients access to the latest developments occurring at the forefront of the
financial services industry.
We combine this depth of local expertise with the broad perspective gained
from our extensive office network across Europe – including the United Kingdom,
Luxembourg, Ireland and the Netherlands – as well as the Americas, the Middle
East and the Asia-Pacific region.

* Fortune Magazine, 2013

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For investors in the Netherlands: The Funds are authorised by the Netherlands Authority for the Financial
Markets in order to market its shares for sale to the public in the Netherlands and the Fund is, accordingly,
a ucits (icbe) according to Section 2:72 of the Act on the Financial Supervision (Wet op het financieel
toezicht). The prospectus for this Fund can be found at: www.northerntrust.com/fgrfunds. Please note
that the value of your investment may fluctuate. Past performance does not guarantee future results.
The tax consequences of any Investment can vary considerably from one jurisdiction to another,
and ultimately will depend on the tax regime of the jurisdictions within which a person is tax resident
and are subject to change from time to time. Unit holders should obtain tax advice from an appropriate
source in relation to the tax liability arising from the holding of Units in the Fund and any Investment
returns from those Units.
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