By the Numbers
As of December 31, 2020, LSST returned an annualized 3.89% for the 3-year period. According to Morningstar, the strategy also performed well relative to its peers. As compared to other short duration fixed income ETFs and mutual funds, Morningstar ranked LSST in the 12th percentile for the 3-year period that ended 12/31/2020, out of 514 funds, based on total return in the short-term bond category.
In addition to performing strongly among its peers, LSST also did well against its relative index,2 outperforming the Bloomberg Barclays 1-3 year Government/Credit Bond Index3 by 194 basis points* for the 1-year period and an annualized 91 basis points for the 3-year period.
Average Annualized Total Returns (%) as of 12/31/20
|Fund Name & Share Class||1 month||3 months||YTD||1 year||3 years||Life of Class 12/27/17|
|Natixis Loomis Sayles Short Duration Income ETF Fund NAV||0.39||1.04||5.27||5.27||3.89||3.91|
|Natixis Loomis Sayles Short Duration Income ETF Fund Market Price||0.51||1.32||5.55||5.55||3.97||3.99|
|Bloomberg Barclays 1-3 Year U.S. Government/Credit Bond Index||0.09||0.21||3.33||3.33||2.98||2.97|
Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Investment return and value will vary and you may have a gain or loss when shares are sold. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than quoted. For most recent month-end performance, visit www.im.natixis.com.
Gross expense ratio 0.95%. Net expense ratio 0.38%. As of the most recent prospectus, the investment advisor has contractually agreed to waive fees and/or reimburse expenses (with certain exceptions) once the expense cap of the fund has been exceeded. This arrangement is set to expire on 4/30/2023. When an expense cap has not been exceeded, the gross and net expense ratios and/or yields may be the same.
LSST achieved this strong performance while maintaining its risk-managed approach to the short duration fixed income space. While there are many short duration fixed income strategies available to investors, some utilize high yield and higher-risk allocations in the pursuit of outperformance. Others incorporate extended duration bonds+ in the pursuit of returns, therefore acting as “short duration” strategies in name only. By contrast, the experienced fixed income specialists at Loomis Sayles are committed to running a primarily short-term bond ETF, leaning on proprietary research to focus what they hold to be the highest quality shorter-range bond allocations available.
A Portfolio Building Block
In addition to integrating a sense of risk-awareness that is not present in passive, index-based strategies, LSST can help enhance portfolio diversification4 through its active approach to sector allocation and security selection. Shorter-term fixed income allocations can help limit interest rate risk, while maintaining only moderate high yield allocations can help guard portfolios from credit risk. Short duration strategies have historically had the potential to offer higher yields than Treasury bonds of similar duration, should investors be willing to assume greater credit risk and cede some liquidity.
A Team Effort
While there are many short-term fixed income strategies available, only LSST incorporates the breadth of Loomis Sayles’ research teams, including the Loomis Global Asset Allocation Team (GAAT). GAAT provides views on global interest rates, economic activity, and asset class performance under various economic conditions. The team’s proprietary risk factor tools and reporting inform an actively managed approach to finding value in short-term fixed income opportunities that investors considering a short duration bond strategy may want to consider.
2 © 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Morningstar rankings for the Natixis Loomis Sayles Short Duration Income ETF in the Short-Term Bond category are as of 12/31/2020. The fund’s total return percentile rank for the specified time period is relative to all funds that have the same Morningstar category. The highest (or most favorable) percentile rank is 1, and the lowest (or least favorable) percentile rank is 100. Rankings are subject to change monthly. Morningstar rankings do not include the effect of sales charges.
3 Bloomberg Barclays 1-3 Year Government/Credit Bond Index is an unmanaged index which is a component of the US Government/Credit Bond Index, which includes Treasury and agency securities (US Government Bond Index) and publicly issued US corporate and foreign debentures and secured notes (US Credit Bond Index). The bonds in the index are investment grade with a maturity between one and three years. You may not invest directly in an index.
4 Diversification does not guarantee a profit or protect against a loss.
* Basis points, otherwise known as “bps,” are a unit of measure often used to describe the percentage change in the value of an investment. One basis point is the equivalent to 0.01% or 0.0001 in decimal form.
+ Extended duration bonds, commonly referred to as long-term bonds, have durations of more than six years (or, if duration is unavailable, average effective maturities greater than 10 years). Due to their longer durations, these funds are exposed to greater interest rate risk.
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.
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. Fixed Income Securities Risk: 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. Below Investment Grade Securities Risk: 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 Risk: 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 US securities, due to varying degrees of regulation and limited liquidity. These risks are magnified in emerging markets. Interest Rate Risk: Interest rate risk is a major risk to all bondholders. As rates rise, existing bonds that offer a lower rate of return decline in value because newly issued bonds that pay higher rates are more attractive to investors.
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.
ALPS Distributors, Inc. is the distributor of the Natixis Loomis Sayles Short Duration Income ETF. Natixis Distribution, L.P. is a marketing agent. ALPS Distributors, Inc. is not affiliated with Natixis Distribution, L.P.
Natixis Distribution, L.P. (fund distributor, member FINRA|SIPC) and Loomis, Sayles & Company, L.P. are affiliated.