Actively Managed, Innovative ETF Solutions

The New ETF: Combining Tax Efficiency with Active Insights

Discovering value and opportunity through innovation

In today’s investment world, investors have a range of ETF strategies to choose from. What makes Natixis ETF strategies unique? Natixis offers actively managed ETFs, strategies that expand upon the traditional benefits of passive ETF vehicles by integrating some of the industry’s most innovative and experienced active managers.

The result is low-cost, tax-efficient investment strategies built with the experience and expertise of managers like Harris Associates, Loomis, Sayles & Company, Vaughan Nelson, and Seeyond.

There are many passive ETF strategies that uncritically track an index. By contrast, Natixis ETFs are designed and operated by a global platform of independent, active investment managers who work to pursue growth opportunities and manage risk in all markets.

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Potential Portfolio Benefits of Active ETFs

Natixis builds upon the capabilities of the traditional ETF vehicle by incorporating a capacity for investment alpha1 through security selection. We provide transparent active ETFs – which disclose their holdings daily – as well as active semi-transparent ETFs. Active semi-transparent ETFs, a new innovation in the ETF space, are not required to disclose their holdings every day, which allows fund management teams to pursue their proprietary investment strategies beyond the purview of frontrunners, copycats, and competitors.

Potential Benefits of Active ETFs
  • Cost-conscious
  • Tax-efficient
  • Lower cash drag
  • Lower transfer agency fees
  • Intra-day trading
  • Preferred by younger investors2
  • May provide better utility than mutual funds in high frequency trading asset allocation models
  • Leverage the skills and experience of active fund managers

Growing Interest

In the coming years, financial advisors expect to increase their use of ETF strategies.3 This may be in part due to the tax efficiency of the ETF vehicle. Approximately 43% of all mutual fund assets are held in taxable accounts.4 Active ETF strategies can provide the same renowned research and know-how of active mutual fund managers – but at a lower cost and with fewer potential tax implications.

  ETF arrowup
Increasing Usage		   ETF arrowdown
Decreasing Usage
+20% ETFs -12%  Mutual funds
(including liquid alternaties)
+19% Separate accounts  -7% Money markets, deposit accounts, cash
+19% Alternatives
(excluding liquid alternatives)		  -5% Individual equities
+8% Other  -4% Variable annuities
+4% Other insurance products  -2% Individual fixed income

Products

Natixis Loomis Sayles Short Duration Income ETF (LSST)

Actively managed short-term bond ETF which leverages Loomis Sayles credit and securitized research and seeks current income consistent with the preservation of capital.

  • $35.09 million Total Net Assets (as of 11/25/2020)
  • Short-Term Bond Morningstar Category™

NatixisU.S. Equity Opportunities ETF (EQOP)

A diversified core equity holding combining complementary, fundamentally driven value and growth strategies.

  • $11.49 million Total Net Assets (as of 11/25/2020)
  • Large Blend Morningstar Category™

Natixis Vaughan NelsonMid Cap ETF (VNMC)

High conviction mid-cap value ETF that seeks significant returns by investing in stocks of companies with undervalued assets, earnings growth, or dividend yield.

  • $6.68 million Total Net Assets (as of 11/25/2020)
  • Mid-Cap Blend Morningstar Category™

Natixis Vaughan NelsonSelect ETF (VNSE)

High-conviction value stock ETF that seeks significant returns using flexibility across market cap and style.

  • $5.56 million Total Net Assets (as of 11/25/2020)
  • Large Blend Morningstar Category™

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1 A measure of the difference between a portfolio's actual returns and its expected performance, given its level of systematic market risk.  A positive alpha indicates outperformance and negative alpha indicates underperformance relative to the portfolio's level of systematic risk.

2 Source: Vanguard Study: Early ETF Adoption Among Self-Directed Investors, March 2019.

3 The Cerulli Edge. US Managed Accounts Edition (1Q 2020, Issue #75). Cerulli Associates. 2020.

4 ICI Factbook 2019.

Before investing, consider the fund’s investment objectives, risks, charges, and expenses. Visit im.natixis.com for a prospectus or a summary prospectus containing this and other information. Read it carefully.

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.

ALPS Distributors, Inc. is the distributor for the Natixis Loomis Sayles Short Duration Income ETF, the Natixis Vaughan Nelson Mid Cap ETF, the Natixis Vaughan Nelson Select ETF, and the Natixis US Equity Opportunities ETF. Natixis Distribution, L.P. is a marketing agent. ALPS Distributors, Inc. is not affiliated with Natixis Distribution, L.P.

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