Natixis Launches Three Active Semi-Transparent ETFs
Natixis Investment Managers today announced its entrance into the semi-transparent exchange-traded fund (ETF) market with the launch of three high conviction, actively managed US equity products. These represent a new vehicle for existing strategies that are currently available as mutual funds with well-established track records managed by successful investment teams at Natixis affiliates Loomis, Sayles & Co. (Loomis Sayles), Harris Associates and Vaughan Nelson.
Leveraging the New York Stock Exchange (NYSE)'s Proxy Portfolio Methodology approach, Natixis's semi-transparent active ETFs disclose proxy portfolios on a daily basis that closely track the actual portfolios' intraday performance. This structure allows the portfolio managers to shield the identity of stocks on which they are actively trading, while still providing market makers enough information to offer competitive bids and asks on the ETFs. Natixis's active semi-transparent ETFs give investors access to highly skilled active managers through a tax-efficient and lower cost vehicle.
"We are pleased to be an early entrant into the active semi-transparent ETF marketplace, where we've established three products that exemplify our dedication to providing investors with access to innovative and progressive investment vehicles," said David Giunta, CEO for the US at Natixis Investment Managers. "At Natixis, we believe that actively managed products can produce better outcomes for investors, and by working with the NYSE, we can now combine those benefits with the many attractive features of ETF vehicles."
Natixis's entrance into the market follows the Securities and Exchange Commission (SEC (News - Alert))'s December 2019 approval of Natixis and NYSE's joint application for exemptive relief from the Investment Company Act of 1940 to develop semi-transparent, actively managed ETFs that utilize the NYSE Proxy Portfolio Methodology.
"As the home of ETFs, the NYSE is excited to continue to drive growth and opportunity for the global investment community. Today marks an important milestone for the ETF industry, as Natixis, one of the world's largest active asset managers, enters into the rapidly growing semi-transparent ETF marketplace," said Douglas Yones, Head of Exchange Traded Products at the NYSE. "The NYSE proxy portfolio structure will allow Natixis and their affiliates to leverage the benefits of an innovative ETF wrapper without having to display their investment strategies to the public."
The Natixis U.S. Equity Opportunities ETF is a multi-managed, diversified core equity product combining fundamentally driven growth and value managers. Loomis Sayles' Growth segment is managed by Aziz Hamzaogullari (CIO and founder of the Loomis Sayles Growth Equity Strategies Team), and the management team of Harris Associates' Value segment is led by Bill Nygren (CIO-US Equities).
The Natixis Vaughan Nelson Mid Cap ETF takes advantage of temporary information and marketplace inefficiencies in the mid-cap universe to find opportunities to invest in companies at valuations materially below their long-term intrinsic value. The fund invests in companies within the market capitalization range of the Russell Midcap® Value Index at the time of purchase. Chris Wallis (CEO & CIO), Dennis Alff and Chad Fargason are the named portfolio managers.
The Natixis Vaughan Nelson Select ETF invests in companies within the market capitalization range of the Russell 3000® Index at time of purchase and seeks long-term capital appreciation. The strategy employs sophisticated, proprietary analysis, valuation and risk management. Managers Chris Wallis and Scott Weber follow a research-intensive process emphasizing balance sheets and cash flow-based projections.
About Natixis Investment Managers
Natixis Investment Managers serves financial professionals with more insightful ways to construct portfolios. Powered by the expertise of more than 20 specialized investment managers globally, we apply Active Thinking® to deliver proactive solutions that help clients pursue better outcomes in all markets. Natixis Investment Managers ranks among the world's largest asset management firms1 with more than $1 trillion assets under management2 (€906.0 billion).
Headquartered in Paris and Boston, Natixis Investment Managers is a subsidiary of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest baning group in France. Natixis Investment Managers' affiliated investment management firms include AEW; Alliance Entreprendre; AlphaSimplex Group; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway (News - Alert) Investment Advisers; H2O Asset Management; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seeyond; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; Vega Investment Managers;4 and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions, and Natixis Advisors offers other investment services through its AIA and MPA division. Not all offerings available in all jurisdictions. For additional information, please visit Natixis Investment Managers' website at im.natixis.com | LinkedIn (News - Alert): linkedin.com/company/natixis-investment-managers.
Natixis Investment Managers' distribution and service groups include Natixis Distribution, L.P., a limited purpose broker-dealer and the distributor of various U.S. registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.
1 Cerulli Quantitative Update: Global Markets 2020 ranked Natixis Investment Managers as the 17th largest asset manager in the world based on assets under management as of December 31, 2019.
About Harris Associates
Harris Associates L.P., a Chicago-based investment management firm founded in 1976, serves as the adviser to the Oakmark Funds. Harris Associates also manages U.S., international and global portfolios for institutional and high-net-worth investors worldwide. Including Oakmark, assets under management at Harris Associates totaled approximately $86 billion as of June 30, 2020. More information about Harris Associates is available at harrisassoc.com.
About Loomis Sayles
Since 1926, Loomis, Sayles & Company has helped fulfill the investment needs of institutional and mutual fund clients worldwide. The firm's performance-driven investors integrate deep proprietary research and integrated risk analysis to make informed, judicious decisions. Teams of portfolio managers, strategists, research analysts and traders collaborate to assess market sectors and identify investment opportunities wherever they may lie, within traditional asset classes or among a range of alternative investments. Loomis Sayles has the resources, foresight and the flexibility to look far and wide for value in broad and narrow markets in its commitment to deliver attractive sustainable returns for clients. This rich tradition has earned Loomis Sayles the trust and respect of clients worldwide, for whom it manages $310.9 billion ** in assets (as of June 30, 2020).
*Total strategy assets include all assets managed by the respective team.
About Vaughan Nelson Investment Management
Founded in 1970, Vaughan Nelson Investment Management is a Houston-based investment manager with $10.1 billion (as of 6/30/20) under management. An affiliate of Natixis Investment Managers, S.A. Vaughan Nelson operates as a boutique manager under the Natixis umbrella. The firm manages five equity products; all of which employ the same targeted return investment philosophy: Select (U.S. concentrated all cap), Value Opportunity (smid/mid), Small Cap Value, International Small Cap and Emerging Markets Opportunities. The firm also applies one fixed income philosophy to manage Core Fixed Income, Limited Maturity and Tax-Free Municipal products.
Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit im.natixis.com/ETFs for a prospectus or a summary prospectus containing this and other information. Read it carefully.
ALPS Distributors, Inc. is the distributor for the Natixis Vaughan Nelson Mid Cap ETF, the Natixis Vaughan Nelson Select ETF, and the Natixis U.S. Equity Opportunities ETF. Natixis Distribution, L.P. is a marketing agent.
ALPS Distributors, Inc. is not affiliated with Natixis Distribution, L.P.
Semi-transparent ETFs are different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. For example: You may have to pay more money to trade the ETF's shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information. The price you pay to buy ETF shares on an exchange may not match the value of the ETF's portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders. These additional risks may be even greater in bad or uncertain market conditions. The ETF will publish on its website each day a "Proxy Portfolio" designed to help trading in shares of the ETF. While the Proxy Portfolio includes some of the ETF's holdings, it is not the ETF's actual portfolio. The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF's performance. If other traders are able to copy or predict the ETF's investment strategy, however, this may hurt the ETF's performance.
RISKS: ETF General Risk: Exchange-Traded Funds (ETFs) trade like stocks, are subject to investment risk, and will fluctuate in market value. Unlike mutual funds, ETF shares are not individually redeemable directly with the Fund, and are bought and sold on the secondary market at market price, which may be higher or lower than the ETF's net asset value (NAV). Transactions in shares of ETFs will result in brokerage commissions, which will reduce returns. Active ETF: Unlike typical exchange-traded funds, there are no indexes that the Fund attempts to track or replicate. Thus, the ability of the Fund to achieve its objectives will depend on the effectiveness of the portfolio manager. There is no assurance that the investment process will consistently lead to successful investing. Equity Securities Risk: Equity securities are volatile and can decline significantly in response to broad market and economic conditions. Foreign Securities Risk: Foreign securities may involve heightened risk due to currency fluctuations. Additionally, they may be subject to greater political, economic, environmental, credit, and information risks. Foreign securities may be subject to higher volatility than US securities, due to varying degrees of regulation and limited liquidity. Currency Risk: Currency exchange rates between the US dollar and foreign currencies may cause the value of the fund's investments to decline. Small and Mid-Cap Stocks Risk: Investments in small and midsize companies can be more volatile than those of larger companies.
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed above may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted.
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