Natixis Investment Managers Solutions Investment Committee Overview

The Natixis Investment Managers Solutions Investment Committee was established in 2015 to provide asset allocation guidance for our portfolio consultation clients. The Committee also develops capital market views and allocation recommendations for the firm’s tactical model portfolios, and uses its assumptions to manage the proprietary Clarity Partners Global Moderate Portfolio.

The ten members of the Investment Committee average 15 years of experience in the investment industry. They have wide-ranging expertise in multi-asset allocation and hold a variety of financial credentials including CFA®, CAIA, CIPM and FRM®. Many are consultants and analysts whose opinions may reflect insights gained from their interactions with financial advisors. Others bring experience with institutional and high net worth clients, as well as investment strategy research and portfolio management.

Investment Committee members hold credentials including CFA®, CAIA, CIPM and FRM®.

The Committee’s diversity of backgrounds assures lively and well-informed discussions related to the economic, market, and corporate environment. Members review data from multiple angles, gleaning various insights and regularly challenging consensus views. Equity and Fixed Income sub-committees meet weekly, evaluating macro, fundamental, and valuation data to establish their recommended allocations. The full Committee meets weekly and votes monthly, with the highest conviction views submitted to the model portfolio management teams.

Active Allocation Recommendations
The Investment Committee’s objective is to produce stronger risk-adjusted returns than the average professionally managed moderate risk profile portfolio over both strategic and tactical time horizons. Strategic assumptions cover a 12–18 month horizon and form the foundation of models, such as the Tactical Core portfolios. Shorter-term tactical recommendations use a 3–6 month outlook reflected in the portfolios’ tactical tilts.

Themes and Examples: Tactical Tilt
In model portfolios with a tactical tilt component, Investment Committee views are generally implemented using ETFs. This example from December 2020 focuses on actions taken after the news of a successful Covid-19 vaccine phase 3 trial.

Macro Backdrop
  • News of a successful vaccine phase 3 trial was met with initial enthusiasm across the markets.
  • However, concern over a second wave materializing during the winter dampened overall bullishness.
  • Questions remained about vaccine production capacity and adequate distribution in time for the summer months.
Investment Implications
  • Successful production and distribution of the vaccine could reopen the economy in time for summer travel.
  • The travel and transportation industry was hit hard due to Covid-19 restrictions, while transportation logistics benefited from shipping more goods.
  • Beaten-down transportation industries could benefit disproportionately from a return to normalcy in the US and global economy.
Risks to This View
  • Vaccine production and distribution could be delayed over the next year.
  • Second wave over the winter further entrenches the consumer and Covid-19 restrictions tighten.
Action
  • Reduce growth style exposure in favor of transportation sector exposure, anticipating an opening economy over the spring and summer months.
Outcome
  • As the markets are discounting mechanisms, industries poised to benefit from an economic reopening outperformed over the course of the winter and spring.
  • Outperformance has potential to continue into the summer as vaccination rates increase nationally.
From a portfolio construction context, the investment committee’s tactical asset class views complement the suite of Natixis active managers. The portfolio management team prefers high conviction active managers with strong fundamental investment processes. Tactical portfolio views are expressed through the use of ETFs, while strategic views are expressed through active managers. This combination provides Natixis model portfolios with the opportunity to outperform over both short and long time horizons through tactical positioning and fundamental security selection.

Natixis Model Portfolio Program
The Natixis Investment Managers Solutions team has nearly two decades of success creating and managing multi-asset model portfolios, providing institutional-quality investments for retail clients. Explore the breadth of our model offering on the Natixis Model Portfolio Program page.

This information is provided for informational purposes only and should not be construed as investment advice.

CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Indexes are not investments, do not incur fees and expenses and are not professionally managed. It is not possible to invest directly in an index.

Unlike passive investments, there are no indexes that an active investment attempts to track or replicate. Thus, the ability of an active investment to achieve its objectives will depend on the effectiveness of the investment manager.

Asset allocation models are intended for informational purposes only and should not be construed as a recommendation or investment advice, as the allocations provided do not take into account the investment objectives, risk tolerance, restrictions, liquidity needs or other characteristics of any one particular investor.

3073916.1.2