• Just one month ago, investors were convinced the US had weathered the trade war, manufacturing numbers were recovering and there was the belief that the Trump administration would push for fiscal policy stimulus.
  • COVID-19 changed that outlook, with investors at first hoping the cases would stay contained within China. But, with the more recent evidence of how clusters have emerged around the world, and within the US, it is quite clear that no place on earth is safe, and we can expect a tremendous disruption from the virus.
  • Core Plus Bond team believes there is a 65% probability that we have now moved into the downturn.
  • The ‘Plus’ sector allocation of the Core Plus category gives the team important levers to take advantage of dislocations in other markets and protect from the other side of a downturn.
    • Coronavirus will be disruptive and testing in the US will produce ugly numbers during the next 2-4 weeks, but there are hints of seeing the other side.
    • In a downturn inflection, there is a benefit to having the protection of securities that can offer upside potential.
  • There will be a large amount of stimulus hitting the market in response to growth concerns, and being in a structure that allows the flexibility to be in non-index securities can be helpful if yields are expected to move back higher.
Fixed-income securities may carry one or more of the following risks: credit, interest rate (as interest rates rise bond prices usually fall), inflation and liquidity. Mortgage-related and asset-backed securities are subject to the risks of the mortgages and assets underlying the securities. Other related risks include prepayment risk which is, the risk that the securities may be prepaid, potentially resulting in the reinvestment of the prepaid amounts into securities with lower yields. Below investment-grade fixed-income securities may be subject to greater risks (including the risk of default) than other fixed-income securities. Foreign and emerging market securities may be subject to greater political, economic, environmental, credit, currency and information risks. Foreign securities may be subject to higher volatility than U.S. securities, due to varying degrees of regulation and limited liquidity. These risks are magnified in emerging markets. Currency exchange rates between the U.S. dollar and foreign currencies may cause the value of the fund’s investments to decline. Currency exchange rates between the US dollar and foreign currencies may cause the value of the Fund's investments to decline. Inflation protected securities move with the rate of inflation and carry the risk that in deflationary conditions (when inflation is negative) the value of the bond may decrease.

Before investing, consider the fund’s investment objectives, risks, charges, and expenses. Visit im.natixis.com or call 800-862-4863 for a prospectus or a summary prospectus containing this and other information. Read it carefully.

This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. The views and opinions expressed are as of March 12, 2020 and may change based on market and other conditions.

Natixis Distribution, L.P. is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.

Natixis Distribution, L.P. (fund distributor, member FINRA | SIPC) and Loomis, Sayles & Company, L.P. are affiliated.

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