Natixis ETF Trust II
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Natixis ETFs Natixis
U.S. Equity Opportunities ETF Natixis
Vaughan Nelson Mid Cap ETF Natixis
Vaughan Nelson Select ETF |
NYSE
Arca: EQOP VNMC VNSE |
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THESE ETFs ARE DIFFERENT FROM TRADITIONAL
ETFs
Traditional ETFs tell the public what assets they hold
each day. These ETFs will not. This may create additional risks for your
investment. For example:
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• You may have to pay more money to trade these
ETFs’ shares. These ETFs will provide less information to traders, who
tend to charge more for trades when they have less
information. |
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• 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 these ETFs compared to other ETFs because they provides less
information to traders. |
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• These additional risks may be even greater in
bad or uncertain market
conditions. |
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• These ETFs will publish on their websites each
day a Proxy Portfolio (“Proxy Portfolio”) designed to help trading in
shares of the ETFs. While the Proxy Portfolio includes some of
these ETFs’ holdings, it is not the ETFs’ Actual Portfolio (“Actual
Portfolio”). |
The differences between these ETFs and other ETFs may
also have advantages. By keeping certain information about the ETFs secret,
these ETFs may face less risk that other traders can
predict or copy its investment strategy. This may improve the ETFs’ performance.
If other traders are able to copy or predict the ETFs’
investment strategy, however, this may hurt the ETFs’
performance.
For additional information regarding the unique
attributes and risks of these ETFs, see the later discussion on the Proxy
Portfolio and the “Proxy Portfolio Structure Risk,” “Authorized
Participant Concentration Risk,”
“Predatory Trading Practices Risk,”
“Premium/Discount Risk,” and “Trading Issues Risk”
below.
The
SEC has not approved or disapproved the Funds’ shares or determined whether this
Prospectus is truthful or complete. Any representation to the contrary
is a crime.
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Investment
Goal
The
Fund seeks long-term growth of
capital.
Fund
Fees & Expenses
The
following table describes the fees and expenses that you may pay if you buy,
hold, and sell shares of the Fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in this table. If
such expenses were reflected, the expenses set forth
below would be higher.
Annual
Fund Operating Expenses
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(expenses that you pay each
year as a percentage of the value of your
investment) |
ETF |
Management
fees |
0.75% |
Distribution
and/or service (12b-1) fees |
0.00% |
Other
expenses |
1.32% |
Total
annual fund operating expenses |
2.07% |
Fee
waiver and/or expense reimbursement1 |
1.17% |
Total
annual fund operating expenses after fee waiver and/or expense
reimbursement |
0.90% |
1 |
Natixis
Advisors, LLC (“Natixis Advisors” or the “Adviser”) has given a binding
contractual undertaking to the Fund to limit the amount of the Fund’s
total annual fund operating expenses
to 0.90% of the Fund’s average daily net assets, exclusive of brokerage
expenses, interest expense, taxes, acquired fund fees and expenses, and
organizational and extraordinary
expenses, such as litigation and indemnification expenses. This
undertaking is in effect through April 30,
2025 and may be terminated before then only with the
consent
of the Fund’s Board of Trustees. The Adviser will be permitted to recover
management fees waived and/or expenses reimbursed to the extent that
expenses in later periods
fall below both (1) the expense limitation ratio in place at the time such
amounts were waived/reimbursed and (2) the Fund’s current applicable
expense limitation ratio.
The Fund will not be obligated to repay any such waived/reimbursed fees
and expenses more than one year after the end of the fiscal year in which
the fees or expenses were
waived/reimbursed.
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Example
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest
$10,000
in the Fund for the time periods indicated (whether or not shares are redeemed),
and also assumes that your investment has a 5% return each year and
that the Fund’s operating expenses remain the same, except that the example is
based on the Total Annual Fund Operating Expenses After Fee Waiver and/or
Expense Reimbursement assuming that such waiver and/or reimbursement will only
be in place through the date noted above and on the Total Annual Fund
Operating Expenses for the remaining periods. The example does not take into
account brokerage commissions and other fees to financial intermediaries
that you may pay on your purchases and sales of shares of the Fund. It also does
not include the transaction fees on purchases and redemptions
of creation units (“Creation Units”), because those fees will not be imposed on
retail investors. Although your actual costs may be higher or lower,
based on these assumptions, your costs would
be:
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If shares are
redeemed: |
1 year |
3 years |
5 years |
10 years |
ETF |
$ |
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$ |
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$ |
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$ |
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Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate
higher transaction costs and may result in higher taxes for you if your Fund
shares are held in a taxable account. These costs, which are not reflected
in
annual fund operating expenses or in the example, affect the Fund’s performance.
During its most recently ended fiscal year, the Fund’s portfolio turnover
rate
was 19% of the average value of its
portfolio.
Investments,
Risks and Performance
Principal
Investment Strategies
The
Fund ordinarily invests at least 80% of its assets in equity securities,
including exchange-traded common stocks and exchange-traded preferred stocks.
Under
normal market conditions, the Fund will invest at least 80% of its assets in
securities of U.S. issuers. The Fund’s approach to equity investing combines
the
styles of two subadvisers in selecting securities for each of the Fund’s
segments. The segments and their subadvisers are listed
below.
• |
Harris
Associates - Large Cap Value segment - Under normal circumstances, the
Large Cap Value segment of the Fund managed by Harris Associates L.P.
(“Harris
Associates”) will invest primarily in the exchange-traded common stocks of
larger-capitalization companies that Harris Associates believes are
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trading
at a substantial discount to the company’s “intrinsic value.” By
“intrinsic value,” Harris Associates means its estimate of the price a
knowledgeable buyer
would pay to acquire the entire business. Harris Associates believes that
investing in securities priced significantly below what Harris Associates
believes
is a company’s intrinsic value presents the best opportunity to achieve
the Fund’s investment objectives. Harris Associates usually sells a
security when
the price approaches its estimated value and monitors each holding and
adjusts its price targets as warranted to reflect changes in the issuer’s
fundamentals.
In determining whether an issuer is a U.S. or foreign issuer for the
Harris Associates – Large Cap Value segment, Harris Associates
considers
various factors, including its country of domicile, the primary stock
exchange on which it trades, the location from which the majority of its
revenue
comes, and its reporting
currency. |
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Loomis
Sayles - All Cap Growth segment - Under normal circumstances, the All Cap
Growth segment of the Fund, managed by Loomis, Sayles & Company,
L.P.
(“Loomis Sayles”), will invest primarily in exchange-traded equity
securities, including exchange-traded common stocks and exchange-traded
American Depositary
Receipts (“ADRs”). This segment may invest in companies of any size. The
segment normally invests across a wide range of sectors and industries.
The segment’s portfolio manager employs a growth style of equity
management that emphasizes companies with sustainable competitive
advantages
versus others, long-term structural growth drivers that will lead to
above-average future cash flow growth, attractive cash flow returns on
invested
capital, and management teams focused on creating long-term value for
shareholders. The segment’s portfolio manager aims to invest in
companies
when they trade at a significant discount to the estimate of intrinsic
value (i.e., companies with share prices trading significantly below what
the
portfolio manager believes the share price should be). The segment will
consider selling a portfolio investment when the portfolio manager
believes an unfavorable
structural change occurs within a given business or the markets in which
it operates, a critical underlying investment assumption is flawed,
when
a more attractive reward-to-risk opportunity becomes available, when the
portfolio manager believes the current price fully reflects intrinsic
value, or for
other investment reasons which the portfolio manager deems appropriate.
Although certain equity securities purchased by the Loomis Sayles – All
Cap Growth
segment of the Fund may be issued by domestic companies incorporated
outside of the United States, Loomis Sayles does not consider these
securities
to be foreign if they are included in the U.S. equity indices published by
S&P Global Ratings or Russell Investments or if the security’s country
of risk
defined by Bloomberg is the United
States. |
Subject
to the allocation policy adopted by the Fund’s Board of Trustees, Natixis
Advisors generally allocates capital invested in the Fund equally (i.e., 50%)
between
its two segments. Under the allocation policy, Natixis Advisors may also
allocate capital away from or towards each segment from time to time and
may
reallocate capital between the segments. Each subadviser manages its segment of
the Fund’s assets in accordance with its distinct investment style and
strategy.
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio, and the Fund will not disclose the daily holdings
of
the Actual Portfolio. Although the Fund seeks to benefit from keeping its
portfolio information secret, market participants may attempt to use the Proxy
Portfolio
to identify the Fund’s trading strategy, which if successful, could result in
such market participants engaging in certain predatory trading practices
that
may have the potential to harm the Fund and its shareholders. The Fund’s
exemptive relief limits the types of securities in which the Fund can invest,
which
may constrain the Fund’s ability to implement its investment strategies. The
Fund is actively-managed and does not intend to track an
index.
Principal
Investment Risks
The
principal risks of investing in the Fund are summarized below. The Fund does not
represent a complete investment program. You
may lose money by investing
in the Fund.
Fund shares are not
bank deposits and are not guaranteed, endorsed or insured by the Federal Deposit
Insurance Corporation or any other government
agency, and are subject to
investment risks, including possible loss of the principal
invested.
The
significance of any specific risk to an investment in the Fund will vary over
time, depending on the composition of the Fund’s portfolio, market conditions,
and
other factors. You should read all of the risk information presented below
carefully, because any one or more of these risks may result in losses to the
Fund.
Proxy Portfolio Structure Risk:
Unlike traditional ETFs that provide daily disclosure of their portfolio
holdings, the Fund does not disclose the daily holdings of
the Actual Portfolio. Instead, the Fund discloses a Proxy Portfolio that is
designed to reflect the economic exposure and risk characteristics of the Fund’s
Actual
Portfolio on any given trading day. Although the Proxy Portfolio and Proxy
Portfolio Disclosures are intended to provide Authorized Participants and
other
market participants with enough information to allow them to engage in effective
arbitrage transactions that will keep the market price of the Fund’s
shares
trading at or close to the underlying NAV per share of the Fund, while at the
same time enabling them to establish cost-effective hedging strategies to
reduce
risk, there is a risk that market prices will vary significantly from the
underlying NAV of the Fund. See “Premium/Discount Risk.” Similarly, shares of
the
Fund may trade at a wider bid/ask spread than shares of traditional ETFs, and
may therefore be more costly for investors to trade. See “Trading Issues
Risk.”
Also, the Fund will incur expenses to license the Proxy Portfolio mechanism,
which may impact shareholder returns. Additionally, the proxy mechanism
itself
may result in additional trading costs, which also may negatively impact
shareholder returns. In addition, although the Proxy Portfolio is designed to
protect
the Fund from predatory practices such as front-running and free-riding, market
participants may nevertheless be able to use the Proxy Portfolio and
Proxy
Portfolio Disclosures to engage in trading practices that disadvantage the Fund.
See “Predatory Trading Practices Risk.” The Fund will monitor on an ongoing
basis the premium/discount between the market price and the NAV of the Fund’s
shares, but there can be no assurance that the Proxy Portfolio
methodology
will operate as intended. The Proxy Portfolio methodology is relatively novel
and may not be an effective arbitrage mechanism under all market conditions.
The effectiveness of the Proxy Portfolio methodology as an arbitrage mechanism
is contingent upon, among other things, the effectiveness of the Fund’s
Factor Model analysis in creating a Proxy Portfolio that performs in a manner
substantially identical to the performance of the Fund’s Actual Portfolio
and
the willingness of Authorized Participants and other market participants to
trade based on the Proxy Portfolio. In the event that the Proxy Portfolio
methodology
does not result in effective arbitrage opportunities in the Fund shares, the
Fund may exhibit wider premiums/discounts, bid/ask spreads and tracking
error. At certain thresholds for such premiums/discounts, bid/ask spreads and
tracking error, the Fund’s Board of Trustees will consider possible remedial
measures, which may include liquidation or conversion to a fully-transparent,
active ETF or a mutual fund.
• |
Premium/Discount Risk:
Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the
“NYSE Arca”) and are bought and sold in the secondary market
at market prices that may differ from their most recent NAV. The market
value of the Fund’s shares will fluctuate, in some cases materially, in
response
to changes in the Fund’s NAV, the intraday value of the Fund’s holdings,
and the relative supply and demand for the Fund’s shares on the
exchange.
Although the Proxy Portfolio is intended to provide investors with enough
information to allow for an effective arbitrage mechanism that will
keep
the market price of the Fund at or close to the Fund’s NAV, there is a
risk (which may increase during periods of market disruption or
volatility) that market
prices for Fund shares will vary significantly from the Fund’s NAV. This
risk may be greater for the Fund than for traditional ETFs that disclose
their full
portfolio holdings on a daily basis because the publication of the Proxy
Portfolio does not provide the same level of transparency as the
publication of the
full portfolio by a fully transparent active ETF. This could cause the
Fund’s shares to have wider bid/ask spreads and larger premiums/discounts
than fully
transparent ETFs using the same investment strategies. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential
lack of an active trading market for shares may result in shares trading
at a significant premium or discount to NAV and/or in a reduced liquidity
of
your investment. During such periods, you may be unable to sell your
shares or may incur significant losses if you sell your shares. There are
various methods
by which investors can purchase and sell shares and various types of
orders that may be placed. Investors should consult their financial
intermediary
before purchasing or selling shares of the Fund. If a shareholder
purchases shares at a time when the market price is at a premium to the
NAV
or sells shares at a time when the market price is at a discount to the
NAV, the shareholder may sustain
losses. |
• |
Authorized Participant Concentration Risk:
Only
an authorized participant (“Authorized Participant”) may engage in
creation or redemption transactions
directly with the Fund. The Fund has a limited number of institutions that
act as Authorized Participants, none of which are or will be obligated
to
engage in creation or redemption transactions. To the extent that these
institutions exit the business or are unable to proceed with creation
and/or redemption
orders with respect to the Fund and no other Authorized Participant is
able to step forward to create or redeem Creation Units, Fund shares
may
trade at a discount to NAV and possibly face trading halts and/or
delisting. The
Fund’s novel structure may affect the number of entities willing to act
as
Authorized Participants, and this risk may be exacerbated during times of
market
stress. |
• |
Predatory Trading Practices
Risk:
Although the Fund seeks to benefit from keeping its portfolio holdings
information secret, market participants may attempt
to use the Proxy Portfolio and related Proxy Portfolio Disclosures to
identify the Fund’s holdings and trading strategy. If successful, this
could result in
such market participants engaging in predatory trading practices that
could harm the Fund and its shareholders. The Proxy Portfolio and related
Proxy Portfolio
Disclosures have been designed to minimize the risk that market
participants could “reverse engineer” the Fund’s portfolio and investment
strategy,
but they may not be successful in this
regard. |
• |
Trading Issues Risk:
Trading in Fund shares on the NYSE Arca may be halted in certain
circumstances. If 10% or more of the Fund’s Actual Portfolio does
not
have readily available market quotations, the Fund will promptly request
that the NYSE Arca halt trading in the Fund’s shares. Such trading halts
may have
a greater impact on the Fund compared to other ETFs due to its lack of
transparency. If the trading of a security held in the Fund’s Actual
Portfolio is halted
or otherwise does not have readily available market quotations and the
Adviser believes that the lack of any such readily available market
quotations
may affect the reliability of the Proxy Portfolio as an arbitrage vehicle
or otherwise determines it is in the best interest of the Fund, the
Adviser promptly
will disclose on the Fund’s website the identity and weighting of such
security for so long as such security’s trading is halted or otherwise
does not
have readily available market quotations and remains in the Actual
Portfolio.There can be no assurance that the requirements of the NYSE Arca
necessary
to maintain the listing of the Fund will continue to be met. Because the
Fund trades on the basis of a published Proxy Portfolio, it may trade at a
wider
bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and
therefore, may cost
investors more to trade especially during periods of market disruption or
volatility. |
• |
Tracking Error Risk:
Although the Proxy Portfolio is designed to reflect the economic exposure
and risk characteristics of the Fund’s Actual Portfolio on any
given trading day, there is a risk that the performance of the Proxy
Portfolio will diverge from the performance of the Actual Portfolio,
potentially materially. |
Allocation Risk: The
Fund’s investment performance depends, in part, on how its assets are
allocated.
The allocation, as set forth above, may not be optimal
in every market condition. You could lose money on your investment in the Fund
as a result of this allocation.
Equity Securities Risk:
The value of the Fund’s investments in equity securities could be subject to
unpredictable declines in the value of individual securities
and periods of below-average performance in individual securities or in the
equity market as a whole. Growth
stocks are generally more sensitive to
market movements than other types of stocks primarily because their stock prices
are based heavily on future expectations. If the Subadviser’s assessment
of
the prospects for a company’s growth is wrong, or if the Subadviser’s judgment
of how other investors will value the company’s growth is wrong, then the
price
of the company’s stock may fall or not approach the value that the Subadviser
has placed on it.
Value
stocks can perform differently from the market as a
whole and from other types of stocks. Value stocks also present the risk that
their lower valuations fairly reflect their business prospects and that
investors will
not agree that the stocks represent favorable investment opportunities, and they
may fall out of favor with investors and underperform growth stocks during
any given period.
In the event an issuer is liquidated or declares bankruptcy, the claims of
owners of the issuer’s bonds generally take precedence over
the
claims of those who own preferred stock or common stock. Securities
of real estate-related companies and exchange-traded REITs in which the Fund may
invest
may be considered equity securities, thus subjecting the Fund to the risks of
investing in equity securities
generally.
Foreign Securities Risk:
Investments in foreign securities may be subject to greater political, economic,
environmental, credit/counterparty and information risks.
The
Fund’s investments in foreign securities also are subject to foreign currency
fluctuations and other foreign currency-related risks.
Foreign securities may
be subject to higher volatility than U.S. securities, varying degrees of
regulation and limited liquidity.
Liquidity Risk:
Liquidity risk is the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them or to receive the price it expects.
Decreases in the number of financial institutions willing to make markets in the
Fund’s investments or in their capacity or willingness to transact may
increase
the Fund’s exposure to this risk. Events that may lead to increased redemptions,
such as market disruptions or increases in interest rates, may also negatively
impact the liquidity of the Fund’s investments when it needs to dispose of them.
If the Fund is forced to sell its investments at an unfavorable time
and/or
under adverse conditions in order to meet redemption requests, such sales could
negatively affect the Fund. During times of market turmoil, there may
be
no buyers or sellers for securities in certain asset classes. In other
circumstances, liquid investments may become illiquid. Liquidity issues may also
make it
difficult to value the Fund’s investments. The Fund may invest in liquid
investments that become illiquid due to financial distress, or geopolitical
events such as
sanctions, trading halts or
wars.
Management Risk:
A strategy used by the Fund’s portfolio managers may fail to produce the
intended result.
Market/Issuer Risk:
The market value of the Fund’s investments will move up and down, sometimes
rapidly and unpredictably, based upon overall market and
economic conditions, as well as a number of reasons that directly relate to the
issuers of the Fund’s investments, such as management performance, financial
condition and demand for the issuers’ goods and
services.
Cybersecurity and Technology Risk:
The Fund, its service providers, market makers, listing exchange, Authorized
Participants and other market participants
increasingly depend on complex information technology and communications
systems, which are subject to a number of different threats and risks
that could adversely affect the Fund and its shareholders. Cybersecurity and
other operational and technology issues may result in financial losses to the
Fund
and its shareholders.
REITs Risk:
Investments in the real estate industry, including REITs, are particularly
sensitive to economic downturns and are sensitive to factors such as
changes
in real estate values, property taxes and tax laws, interest rates, cash flow of
underlying real estate assets, occupancy rates, government regulations
affecting
zoning, land use and rents and the management skill and creditworthiness of the
issuer. Companies in the real estate industry also may be subject to
liabilities under environmental and hazardous waste laws. In addition, the value
of a REIT is affected by changes in the value of the properties owned by
the
REIT or mortgage loans held by the REIT. REITs are also subject to default and
prepayment risk. Many REITs are highly leveraged, increasing their risk. The
Fund
will indirectly bear its proportionate share of expenses, including management
fees, paid by each REIT in which it invests in addition to the expenses of
the
Fund.
Secondary Market Trading Risk: Investors
buying or selling shares of the Fund in the secondary market will pay brokerage
commissions or other charges imposed
by broker-dealers as determined by that broker. Brokerage commissions are often
a fixed amount and may be a significant proportional cost for investors
seeking to buy or sell relatively small amounts of
shares.
Small- and Mid-Capitalization Companies
Risk:
Compared to large-capitalization companies, small- and mid-capitalization
companies are more likely to have
limited product lines, markets or financial resources. Stocks of these companies
often trade less frequently and in limited volume and their prices may
fluctuate
more than stocks of large-capitalization companies. As a result, it may be
relatively more difficult for the Fund to buy and sell securities of small-
and
mid-capitalization companies.
New and Smaller Sized Fund Risk: The
Fund is relatively new and has a limited operating history for investors to
evaluate and may not be successful in implementing
its investment strategies. The Fund may fail to attract sufficient assets to
achieve or maintain economies of scale, which could result in the Fund
being liquidated at any time without shareholder approval and at a time that may
not be favorable for all shareholders. Smaller
ETFs will have a lower public
float and lower trading volumes, leading to wider bid/ask
spreads.
Operational Risk: The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication
errors, errors of the Fund’s service providers, market makers, listing exchange,
Authorized Participants or the issuers of securities in which the Fund
invests or with which they do business, failed or inadequate processes and
technology or systems
failures.
Risk/Return
Bar Chart and Table
The bar chart and
table shown below provide some indication of the risks of investing in the Fund
by showing changes in the Fund’s performance from year to
year and by showing
how the Fund’s average annual returns for the one-year and life-of-fund periods
compare to those of a broad measure of market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Updated performance
information is available online at im.natixis.com
and/or by calling the Fund toll-free at 800-458-7452.
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Highest Quarterly
Return: First Quarter
2021, 9.65% Lowest Quarterly
Return: Third Quarter
2021, 0.12% |
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Average Annual
Total Returns |
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(for the periods ended
December 31, 2021) |
Past 1 Year |
Life of Fund (9/17/20) |
Return
Before Taxes |
24.45%
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31.83%
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Return
After Taxes on Distributions |
22.41%
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30.15%
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Return
After Taxes on Distributions and Sale of Fund Shares |
14.75%
|
23.90%
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S&P
500® Index |
28.71%
|
32.09%
|
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown.
After-tax returns shown are not relevant to investors who
hold their shares
through tax-advantaged arrangements, such as 401(k) plans, qualified plans,
education savings accounts, such as 529 plans, or individual
retirement
accounts. Index performance reflects no
deduction for fees, expenses or
taxes.
Management
Investment
Adviser
Natixis
Advisors, LLC (“Natixis Advisors”)
Subadvisers
Harris
Associates L.P. (“Harris Associates”)
Loomis,
Sayles & Company, L.P. (“Loomis Sayles”)
Portfolio
Managers
Harris Associates
William
C. Nygren, CFA®,
Vice President, Chief Investment Officer, U.S. Equity and portfolio manager of
Harris Associates, has served as co-manager of the Harris
Associates Large Cap Value segment of the Fund since 2020.
M.
Colin Hudson, CFA®,
Vice President, portfolio manager and analyst of Harris Associates, has served
as co-manager of the Harris Associates Large Cap Value
segment of the Fund since 2020.
Michael
J. Mangan, CFA®,
CPA, portfolio manager of Harris Associates, served as co-manager of the Harris
Associates Large Cap Value segment of the Fund since
2020.
Michael
A. Nicolas, CFA®,
portfolio manager and analyst of Harris Associates, has served as co-manager of
the Harris Associates Large Cap Value segment of
the Fund since 2020.
Loomis Sayles
Aziz
V. Hamzaogullari, CFA®,
Chief Investment Officer of the Growth Equities Strategies Team, Executive Vice
President and Director at Loomis Sayles, has served
as a manager of the Loomis Sayles All Cap Growth segment of the Fund since
2020.
Purchase
and Sale of Fund Shares
The
Fund will issue and redeem shares at NAV only in large blocks of shares,
typically 10,000 shares, called “Creation Units.” Only a few financial
institutions that
are Authorized Participants are authorized to purchase and redeem Creation Units
directly with the Fund. Creation Units are typically issued and redeemed
in exchange for cash and/or the deposit or delivery of a basket of securities
specified each day by the Fund as the securities in exchange for which
the
Fund will issue or redeem shares. Except when aggregated in Creation Units, shares are
not redeemable securities of the Fund.
Individual
shares of the Fund may only be purchased and sold in secondary market
transactions through broker-dealers. Shares of the Fund are listed for
trading
on the NYSE Arca, and because shares trade at market prices rather than NAV,
shares of the Fund may trade at a price greater than NAV (a premium)
or
less than NAV (a discount).
You
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase shares of the Fund (bid) and the lowest price
a
seller is willing to accept for shares of the Fund (ask) when buying or selling
shares in the secondary market (“the bid/ask spread”). For more information,
including
recent information (when available) regarding the Fund’s NAV, market price,
premiums and discounts, and bid/ask spreads, please visit the Fund’s
website
at im.natixis.com.
Tax
Information
Fund
distributions are generally taxable to you as ordinary income or capital gains,
except for distributions to retirement plans and other investors that qualify
for
tax-advantaged treatment under U.S. federal income tax law generally.
Investments in such tax-advantaged plans will generally be taxed only upon
withdrawal
of monies from the tax-advantaged arrangement.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary
for the sale of the Fund shares and related services. These payments may create
a conflict of interest by influencing the broker-dealer or other intermediary
and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
Investment
Goal
The
Fund seeks long-term capital
appreciation.
Fund
Fees & Expenses
The
following table describes the fees and expenses that you may pay if you buy,
hold, and sell shares of the Fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in this table. If
such expenses were reflected, the expenses set forth
below would be higher.
Annual
Fund Operating Expenses
|
|
(expenses that you pay each
year as a percentage of the value of your
investment) |
ETF |
Management
fees1 |
0.75% |
Distribution
and/or service (12b-1) fees |
0.00% |
Other
expenses |
1.62% |
Total
annual fund operating expenses |
2.37% |
Fee
waiver and/or expense reimbursement2 |
1.52% |
Total
annual fund operating expenses after fee waiver and/or expense
reimbursement |
0.85% |
1 |
The Fund’s
operating expenses have been restated to reflect a reduction in management
fees, effective as of July 1, 2021, as if such reduction had been in
effect during the fiscal year ended December
31, 2021. The information has been restated to better reflect anticipated
expenses of the Fund.
|
2 |
Natixis
Advisors, LLC (“Natixis Advisors” or the “Adviser”) has given a binding
contractual undertaking to the Fund to limit the amount of the Fund’s
total annual fund operating expenses
to 0.85% of the Fund’s average daily net assets, exclusive of brokerage
expenses, interest expense, taxes, acquired fund fees and expenses, and
organizational and extraordinary
expenses, such as litigation and indemnification expenses. This
undertaking is in effect through April 30,
2025 and may be terminated before then only with the
consent
of the Fund’s Board of Trustees. The Adviser will be permitted to recover
management fees waived and/or expenses reimbursed to the extent that
expenses in later periods
fall below both (1) the expense limitation ratio in place at the time such
amounts were waived/reimbursed and (2) the Fund’s current applicable
expense limitation ratio.
The Fund will not be obligated to repay any such waived/reimbursed fees
and expenses more than one year after the end of the fiscal year in which
the fees or expenses were
waived/reimbursed.
|
Example
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest
$10,000
in the Fund for the time periods indicated (whether or not shares are redeemed),
and also assumes that your investment has a 5% return each year and
that the Fund’s operating expenses remain the same, except that the example is
based on the Total Annual Fund Operating Expenses After Fee Waiver and/or
Expense Reimbursement assuming that such waiver and/or reimbursement will only
be in place through the date noted above and on the Total Annual Fund
Operating Expenses for the remaining periods. The example does not take into
account brokerage commissions and other fees to financial intermediaries
that you may pay on your purchases and sales of shares of the Fund. It also does
not include the transaction fees on purchases and redemptions
of creation units (“Creation Units”), because those fees will not be imposed on
retail investors. Although your actual costs may be higher or lower,
based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
If shares are
redeemed: |
1 year |
3 years |
5 years |
10 years |
ETF |
$ |
|
$ |
|
$ |
|
$ |
|
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate
higher transaction costs and may result in higher taxes for you if your Fund
shares are held in a taxable account. These costs, which are not reflected
in
annual fund operating expenses or in the example, affect the Fund’s performance.
During its most recently ended fiscal year, the Fund’s portfolio turnover
rate
was 72% of the average value of its
portfolio.
Investments,
Risks and Performance
Principal
Investment Strategies
Under
normal market conditions, the Fund will invest at least 80% of its assets in
companies that, at the time of purchase, have market capitalizations within
the
capitalization range of the Russell Midcap®
Value Index. The Russell Midcap®
Value Index is an unmanaged index that measures the performance of companies
with lower price to book ratios and lower forecasted growth values within the
broader Russell Midcap Index®.
While the market capitalization range
for the Russell Midcap®
Value Index fluctuates, at December 31, 2021, it was $435 million to $73.6
billion. However, the Fund may invest up to 20% of
its
assets in companies with smaller or larger capitalizations. Equity securities
may take the form of exchange-traded stock (e.g., common and preferred
exchange-traded
stocks) in corporations and exchange-traded real estate investment trusts
(“REITs”).
Vaughan
Nelson Investment Management, L.P. (“Vaughan Nelson”) invests in
medium-capitalization companies with a focus on those companies meeting
Vaughan
Nelson’s return expectations. Vaughan Nelson uses a bottom-up value oriented
investment process in constructing the Fund’s portfolio. Vaughan Nelson
seeks companies with the following characteristics, although not all of the
companies selected will have these
attributes:
• |
Companies
earning a positive return on capital with stable-to-improving
returns. |
• |
Companies
valued at a discount to their asset
value. |
• |
Companies
with an attractive and sustainable dividend
level. |
In
selecting investments for the Fund, Vaughan Nelson generally employs the
following strategies:
• |
Vaughan
Nelson employs a value-driven investment philosophy that selects stocks
selling at a relatively low value based on business fundamentals,
economic
margin analysis and discounted cash flow models. Vaughan Nelson selects
companies that it believes are out of favor or
misunderstood. |
• |
Vaughan
Nelson uses fundamental analysis to construct a portfolio that, in the
opinion of Vaughan Nelson, is made up of quality companies with the
potential
to provide significant increases in share price over a three year
period. |
• |
Vaughan
Nelson will generally sell a security when it reaches Vaughan Nelson’s
price target or when the issuer shows a change in financial condition,
competitive
pressures, poor management decisions or internal or external forces
reducing future expected returns from those expected at the time of
investment. |
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio, and the Fund will not disclose the daily holdings
of
the Actual Portfolio. Although the Fund seeks to benefit from keeping its
portfolio information secret, market participants may attempt to use the Proxy
Portfolio
to identify the Fund’s trading strategy, which if successful, could result in
such market participants engaging in certain predatory trading practices
that
may have the potential to harm the Fund and its shareholders. The Fund’s
exemptive relief limits the types of securities in which the Fund can invest,
which
may constrain the Fund’s ability to implement its investment strategies. The
Fund is actively-managed and does not intend to track an
index.
Principal
Investment Risks
The
principal risks of investing in the Fund are summarized below. The Fund does not
represent a complete investment program. You may lose money by
investing in the
Fund.
Fund
shares are not bank deposits and are not guaranteed, endorsed or insured by the
Federal Deposit Insurance Corporation or any other government
agency,
and are subject to investment risks, including possible loss of the principal
invested.
The
significance of any specific risk to an investment in the Fund will vary over
time, depending on the composition of the Fund’s portfolio, market conditions,
and
other factors. You should read all of the risk information presented below
carefully, because any one or more of these risks may result in losses to the
Fund.
Proxy Portfolio Structure Risk:
Unlike traditional ETFs that provide daily disclosure of their portfolio
holdings, the Fund does not disclose the daily holdings of
the Actual Portfolio. Instead, the Fund discloses a Proxy Portfolio that is
designed to reflect the economic exposure and risk characteristics of the Fund’s
Actual
Portfolio on any given trading day. Although the Proxy Portfolio and Proxy
Portfolio Disclosures are intended to provide Authorized Participants and
other
market participants with enough information to allow them to engage in effective
arbitrage transactions that will keep the market price of the Fund’s
shares
trading at or close to the underlying NAV per share of the Fund, while at the
same time enabling them to establish cost-effective hedging strategies to
reduce
risk, there is a risk that market prices will vary significantly from the
underlying NAV of the Fund. See “Premium/Discount Risk.” Similarly, shares of
the
Fund may trade at a wider bid/ask spread than shares of traditional ETFs, and
may therefore be more costly for investors to trade. See “Trading Issues
Risk.”
Also, the Fund will incur expenses to license the Proxy Portfolio mechanism,
which may impact shareholder returns. Additionally, the proxy mechanism
itself
may result in additional trading costs, which also may negatively impact
shareholder returns. In addition, although the Proxy Portfolio is designed to
protect
the Fund from predatory practices such as front-running and free-riding, market
participants may nevertheless be able to use the Proxy Portfolio and
Proxy
Portfolio Disclosures to engage in trading practices that disadvantage the Fund.
See “Predatory Trading Practices Risk.” The Fund will monitor on an ongoing
basis the premium/discount between the market price and the NAV of the Fund’s
shares, but there can be no assurance that the Proxy Portfolio methodology
will operate as intended. The Proxy Portfolio methodology is relatively novel
and may not be an effective arbitrage mechanism under all market conditions.
The effectiveness of the Proxy Portfolio methodology as an arbitrage mechanism
is contingent upon, among other things, the effectiveness of the Fund’s
Factor Model analysis in creating a Proxy Portfolio that performs in a manner
substantially identical to the performance of the Fund’s Actual Portfolio
and
the willingness of Authorized Participants and other market participants to
trade based on the Proxy Portfolio. In the event that the Proxy Portfolio
methodology
does not result in effective arbitrage opportunities in the Fund shares, the
Fund may exhibit wider premiums/discounts, bid/ask spreads and tracking
error. At certain thresholds for such premiums/discounts, bid/ask spreads and
tracking error, the Fund’s Board of Trustees will consider possible remedial
measures, which may include liquidation or conversion to a fully-transparent,
active ETF or a mutual fund.
• |
Premium/Discount Risk:
Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the
“NYSE Arca”) and are bought and sold in the secondary
|
|
market
at market prices that may differ from their most recent NAV. The market
value of the Fund’s shares will fluctuate, in some cases materially, in
response
to changes in the Fund’s NAV, the intraday value of the Fund’s holdings,
and the relative supply and demand for the Fund’s shares on the
exchange.
Although the Proxy Portfolio is intended to provide investors with enough
information to allow for an effective arbitrage mechanism that will
keep
the market price of the Fund at or close to the Fund’s NAV, there is a
risk (which may increase during periods of market disruption or
volatility) that market
prices for Fund shares will vary significantly from the Fund’s NAV. This
risk may be greater for the Fund than for traditional ETFs that disclose
their full
portfolio holdings on a daily basis because the publication of the Proxy
Portfolio does not provide the same level of transparency as the
publication of the
full portfolio by a fully transparent active ETF. This could cause the
Fund’s shares to have wider bid/ask spreads and larger premiums/discounts
than fully
transparent ETFs using the same investment strategies. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential
lack of an active trading market for shares may result in shares trading
at a significant premium or discount to NAV and/or in a reduced liquidity
of
your investment. During such periods, you may be unable to sell your
shares or may incur significant losses if you sell your shares. There are
various methods
by which investors can purchase and sell shares and various types of
orders that may be placed. Investors should consult their financial
intermediary
before purchasing or selling shares of the Fund. If a shareholder
purchases shares at a time when the market price is at a premium to the
NAV
or sells shares at a time when the market price is at a discount to the
NAV, the shareholder may sustain
losses. |
• |
Authorized Participant Concentration Risk:
Only
an authorized participant (“Authorized Participant”) may engage in
creation or redemption transactions
directly with the Fund. The Fund has a limited number of institutions that
act as Authorized Participants, none of which are or will be obligated
to
engage in creation or redemption transactions. To the extent that these
institutions exit the business or are unable to proceed with creation
and/or redemption
orders with respect to the Fund and no other Authorized Participant is
able to step forward to create or redeem Creation Units, Fund shares
may
trade at a discount to NAV and possibly face trading halts and/or
delisting. The
Fund’s novel structure may affect the number of entities willing to act
as
Authorized Participants, and this risk may be exacerbated during times of
market
stress. |
• |
Predatory Trading Practices
Risk:
Although the Fund seeks to benefit from keeping its portfolio holdings
information secret, market participants may attempt
to use the Proxy Portfolio and related Proxy Portfolio Disclosures to
identify the Fund’s holdings and trading strategy. If successful, this
could result in
such market participants engaging in predatory trading practices that
could harm the Fund and its shareholders. The Proxy Portfolio and related
Proxy Portfolio
Disclosures have been designed to minimize the risk that market
participants could “reverse engineer” the Fund’s portfolio and investment
strategy,
but they may not be successful in this
regard. |
• |
Trading Issues Risk:
Trading in Fund shares on the NYSE Arca may be halted in certain
circumstances. If 10% or more of the Fund’s Actual Portfolio does
not
have readily available market quotations, the Fund will promptly request
that the NYSE Arca halt trading in the Fund’s shares. Such trading halts
may have
a greater impact on the Fund compared to other ETFs due to its lack of
transparency. If the trading of a security held in the Fund’s Actual
Portfolio is halted
or otherwise does not have readily available market quotations and the
Adviser believes that the lack of any such readily available market
quotations
may affect the reliability of the Proxy Portfolio as an arbitrage vehicle
or otherwise determines it is in the best interest of the Fund, the
Adviser promptly
will disclose on the Fund’s website the identity and weighting of such
security for so long as such security’s trading is halted or otherwise
does not
have readily available market quotations and remains in the Actual
Portfolio.There can be no assurance that the requirements of the NYSE Arca
necessary
to maintain the listing of the Fund will continue to be met. Because the
Fund trades on the basis of a published Proxy Portfolio, it may trade at a
wider
bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and
therefore, may cost
investors more to trade especially during periods of market disruption or
volatility. |
• |
Tracking Error Risk:
Although the Proxy Portfolio is designed to reflect the economic exposure
and risk characteristics of the Fund’s Actual Portfolio on any
given trading day, there is a risk that the performance of the Proxy
Portfolio will diverge from the performance of the Actual Portfolio,
potentially materially. |
Equity Securities Risk:
The value of the Fund’s investments in equity securities could be subject to
unpredictable declines in the value of individual securities
and periods of below-average performance in individual securities or in the
equity market as a whole. Value
stocks can perform differently from the market
as a whole and from other types of stocks. Value stocks also present the risk
that their lower valuations fairly reflect their business prospects and that
investors
will not agree that the stocks represent favorable investment opportunities, and
they may fall out of favor with investors and underperform growth stocks
during any given period.
In the event an issuer is liquidated or declares bankruptcy, the claims of
owners of the issuer’s bonds generally take precedence
over the claims of those who own preferred stock or common stock. Securities
of real estate-related companies and exchange-traded REITs in which
the Fund may invest may be considered equity securities, thus subjecting the
Fund to the risks of investing in equity securities
generally.
Market/Issuer Risk:
The market value of the Fund’s investments will move up and down, sometimes
rapidly and unpredictably, based upon overall market and
economic conditions, as well as a number of reasons that directly relate to the
issuers of the Fund’s investments, such as management performance, financial
condition and demand for the issuers’ goods and
services.
Management Risk:
A strategy used by the Fund’s portfolio managers may fail to produce the
intended result.
Small- and Mid-Capitalization Companies
Risk:
Compared to large-capitalization companies, small- and mid-capitalization
companies are more likely to have
limited product lines, markets or financial resources. Stocks of these companies
often trade less frequently and in limited volume and their prices may
fluctuate
more than stocks of large-capitalization companies. As a result, it may be
relatively more difficult for the Fund to buy and sell securities of small-
and
mid-capitalization companies.
Liquidity Risk:
Liquidity risk is the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them or to receive the price it expects.
Decreases in the number of financial institutions willing to make markets in the
Fund’s investments or in their capacity or willingness to transact may
increase
the Fund’s exposure to this risk. Events that may lead to increased redemptions,
such as market disruptions or increases in interest rates, may also
negatively
impact the liquidity of the Fund’s investments when it needs to dispose of them.
If the Fund is forced to sell its investments at an unfavorable time
and/or
under adverse conditions in order to meet redemption requests, such sales could
negatively affect the Fund. During times of market turmoil, there may
be
no buyers or sellers for securities in certain asset classes. In other
circumstances, liquid investments may become illiquid. Liquidity issues may also
make it
difficult to value the Fund’s investments. The Fund may invest in liquid
investments that become illiquid due to financial distress, or geopolitical
events such as
sanctions, trading halts or
wars.
Cybersecurity and Technology Risk:
The Fund, its service providers, market makers, listing exchange, Authorized
Participants and other market participants
increasingly depend on complex information technology and communications
systems, which are subject to a number of different threats and risks
that could adversely affect the Fund and its shareholders. Cybersecurity and
other operational and technology issues may result in financial losses to the
Fund
and its shareholders.
Foreign Securities Risk:
Investments in foreign securities may be subject to greater political, economic,
environmental, credit/counterparty and information risks.
The
Fund’s investments in foreign securities also are subject to foreign currency
fluctuations and other foreign currency-related risks.
Foreign securities may
be subject to higher volatility than U.S. securities, varying degrees of
regulation and limited
liquidity.
Investments in Other Investment Companies
Risk:
The Fund will indirectly bear the management, service and other fees of any
other investment companies,
including exchange-traded funds, in which it invests in addition to its own
expenses.
New and Smaller Sized Fund Risk: The
Fund is relatively new and has a limited operating history for investors to
evaluate and may not be successful in implementing
its investment strategies. The Fund may fail to attract sufficient assets to
achieve or maintain economies of scale, which could result in the Fund
being liquidated at any time without shareholder approval and at a time that may
not be favorable for all shareholders. Smaller
ETFs will have a lower public
float and lower trading volumes, leading to wider bid/ask
spreads.
Operational Risk: The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication
errors, errors of the Fund’s service providers, market makers, listing exchange,
Authorized Participants or the issuers of securities in which the Fund
invests or with which they do business, failed or inadequate processes and
technology or systems
failures.
REITs Risk:
Investments in the real estate industry, including REITs, are particularly
sensitive to economic downturns and are sensitive to factors such as
changes
in real estate values, property taxes and tax laws, interest rates, cash flow of
underlying real estate assets, occupancy rates, government regulations
affecting
zoning, land use and rents and the management skill and creditworthiness of the
issuer. Companies in the real estate industry also may be subject to
liabilities under environmental and hazardous waste laws. In addition, the value
of a REIT is affected by changes in the value of the properties owned by
the
REIT or mortgage loans held by the REIT. REITs are also subject to default and
prepayment risk. Many REITs are highly leveraged, increasing their risk. The
Fund
will indirectly bear its proportionate share of expenses, including management
fees, paid by each REIT in which it invests in addition to the expenses of
the
Fund.
Secondary Market Trading Risk: Investors
buying or selling shares of the Fund in the secondary market will pay brokerage
commissions or other charges imposed
by broker-dealers as determined by that broker. Brokerage commissions are often
a fixed amount and may be a significant proportional cost for investors
seeking to buy or sell relatively small amounts of
shares.
Risk/Return
Bar Chart and Table
The bar chart and
table shown below provide some indication of the risks of investing in the Fund
by showing changes in the Fund’s performance from year to
year and by showing
how the Fund’s average annual returns for the one-year and life-of-fund periods
compare to those of a broad measure of market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Updated performance
information is available online at im.natixis.com
and/or by calling the Fund toll-free at 800-458-7452.
|
|
|
Highest Quarterly
Return: First Quarter
2021, 10.41% Lowest Quarterly
Return: Third Quarter
2021, -2.43% |
|
|
|
Average Annual
Total Returns |
|
|
(for the periods ended
December 31, 2021) |
Past 1 Year |
Life of Fund (9/17/20) |
Return
Before Taxes |
21.47%
|
32.97%
|
|
|
|
Average Annual Total
Returns |
|
|
(for
the periods ended December 31, 2021) |
Past 1 Year |
Life of Fund (9/17/20) |
Return
After Taxes on Distributions |
17.22%
|
29.30%
|
Return
After Taxes on Distributions and Sale of Fund Shares |
13.03%
|
23.98%
|
Russell
Midcap® Value Index |
28.34%
|
36.56%
|
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown.
After-tax returns shown are not relevant to investors who
hold their shares
through tax-advantaged arrangements, such as 401(k) plans, qualified plans,
education savings accounts, such as 529 plans, or individual
retirement
accounts. Index performance reflects no
deduction for fees, expenses or
taxes.
Management
Investment
Adviser
Natixis
Advisors, LLC (“Natixis Advisors”)
Subadviser
Vaughan
Nelson Investment Management, L.P. (“Vaughan Nelson”)
Portfolio
Managers
Dennis
G. Alff, CFA®,
Lead Senior Portfolio Manager of Vaughan Nelson, has served as co-manager of the
Fund since 2020.
Chad
D. Fargason, Senior Portfolio Manager of Vaughan Nelson, has served as
co-manager of the Fund since 2020.
Chris
D. Wallis, CFA®,
Chief Executive Officer and Lead Senior Portfolio Manager of Vaughan Nelson, has
served as co-manager of the Fund since 2020.
Purchase
and Sale of Fund Shares
The
Fund will issue and redeem shares at NAV only in large blocks of shares,
typically 10,000 shares, called “Creation Units.” Only a few financial
institutions that
are Authorized Participants are authorized to purchase and redeem Creation Units
directly with the Fund. Creation Units are typically issued and redeemed
in exchange for cash and/or the deposit or delivery of a basket of securities
specified each day by the Fund as the securities in exchange for which
the
Fund will issue or redeem shares. Except when aggregated in Creation Units, shares are
not redeemable securities of the Fund.
Individual
shares of the Fund may only be purchased and sold in secondary market
transactions through broker-dealers. Shares of the Fund are listed for
trading
on the NYSE Arca, and because shares trade at market prices rather than NAV,
shares of the Fund may trade at a price greater than NAV (a premium)
or
less than NAV (a discount).
You
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase shares of the Fund (bid) and the lowest price
a
seller is willing to accept for shares of the Fund (ask) when buying or selling
shares in the secondary market (“the bid/ask spread”). For more information,
including
recent information (when available) regarding the Fund’s NAV, market price,
premiums and discounts, and bid/ask spreads, please visit the Fund’s
website
at im.natixis.com.
Tax
Information
Fund
distributions are generally taxable to you as ordinary income or capital gains,
except for distributions to retirement plans and other investors that qualify
for
tax-advantaged treatment under U.S. federal income tax law generally.
Investments in such tax-advantaged plans will generally be taxed only upon
withdrawal
of monies from the tax-advantaged arrangement.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary
for the sale of the Fund shares and related services. These payments may create
a conflict of interest by influencing the broker-dealer or other intermediary
and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
Investment
Goal
The
Fund seeks long-term capital
appreciation.
Fund
Fees & Expenses
The
following table describes the fees and expenses that you may pay if you buy,
hold, and sell shares of the Fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in this table. If
such expenses were reflected, the expenses set forth
below would be higher.
Annual
Fund Operating Expenses
|
|
(expenses that you pay each
year as a percentage of the value of your
investment) |
ETF |
Management
fees1 |
0.70% |
Distribution
and/or service (12b-1) fees |
0.00% |
Other
expenses |
2.35% |
Total
annual fund operating expenses |
3.05% |
Fee
waiver and/or expense reimbursement2 |
2.25% |
Total
annual fund operating expenses after fee waiver and/or expense
reimbursement |
0.80% |
1 |
The Fund’s
operating expenses have been restated to reflect a reduction in management
fees, effective as of July 1, 2021, as if such reduction had been in
effect during the fiscal year ended December
31, 2021. The information has been restated to better reflect anticipated
expenses of the Fund.
|
2 |
Natixis
Advisors, LLC (“Natixis Advisors” or the “Adviser”) has given a binding
contractual undertaking to the Fund to limit the amount of the Fund’s
total annual fund operating expenses
to 0.80% of the Fund’s average daily net assets, exclusive of brokerage
expenses, interest expense, taxes, acquired fund fees and expenses, and
organizational and extraordinary
expenses, such as litigation and indemnification expenses. This
undertaking is in effect through April 30,
2025 and may be terminated before then only with the
consent
of the Fund’s Board of Trustees. The Adviser will be permitted to recover
management fees waived and/or expenses reimbursed to the extent that
expenses in later periods
fall below both (1) the expense limitation ratio in place at the time such
amounts were waived/reimbursed and (2) the Fund’s current applicable
expense limitation ratio.
The Fund will not be obligated to repay any such waived/reimbursed fees
and expenses more than one year after the end of the fiscal year in which
the fees or expenses were
waived/reimbursed.
|
Example
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest
$10,000
in the Fund for the time periods indicated (whether or not shares are redeemed),
and also assumes that your investment has a 5% return each year and
that the Fund’s operating expenses remain the same, except that the example is
based on the Total Annual Fund Operating Expenses After Fee Waiver and/or
Expense Reimbursement assuming that such waiver and/or reimbursement will only
be in place through the date noted above and on the Total Annual Fund
Operating Expenses for the remaining periods. The example does not take into
account brokerage commissions and other fees to financial intermediaries
that you may pay on your purchases and sales of shares of the Fund. It also does
not include the transaction fees on purchases and redemptions
of creation units (“Creation Units”), because those fees will not be imposed on
retail investors. Although your actual costs may be higher or lower,
based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
If shares are
redeemed: |
1 year |
3 years |
5 years |
10 years |
ETF |
$ |
|
$ |
|
$ |
|
$ |
|
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate
higher transaction costs and may result in higher taxes for you if your Fund
shares are held in a taxable account. These costs, which are not reflected
in
annual fund operating expenses or in the example, affect the Fund’s performance.
During its most recently ended fiscal year, the Fund’s portfolio turnover
rate
was 88% of the average value of its
portfolio.
Investments,
Risks and Performance
Principal
Investment Strategies
The
Fund, under normal market conditions, will invest primarily in equity
securities, including exchange-traded common stocks, exchange-traded preferred
stocks
and exchange-traded real estate investment trusts (“REITs”). The Fund is
non-diversified, which means that it may invest a greater percentage of its
assets
in a particular issuer and may invest in fewer issuers than a diversified fund.
Typically, the Fund’s portfolio will generally hold 20 to 40 securities. The
Fund
may invest in companies with any market capitalization, although, it will
typically focus its investments in mid- to large- capitalization companies. A
company
will be considered to be a mid- to large-capitalization company if its
capitalization is $5 billion or
higher.
Vaughan
Nelson Investment Managment, L.P. ("Vaughan Nelson") invests in companies of all
market capitalizations with a focus on those companies meeting Vaughan Nelson’s
return expectations.
Vaughan
Nelson uses a bottom-up value oriented investment process in constructing the
Fund’s portfolio. Vaughan Nelson seeks companies with the following
characteristics, although not all of the companies selected will have these
attributes:
• |
Companies
earning a positive return on capital with stable-to-improving
returns. |
• |
Companies
valued at discount to their asset
value. |
• |
Companies
with an attractive and sustainable dividend
level. |
In
selecting investments for the Fund, Vaughan Nelson generally employs the
following strategies:
• |
Vaughan
Nelson employs a value-driven investment philosophy that selects
securities selling at a relatively low value based on discounted cash flow
models.
Vaughan Nelson selects companies that it believes are out-of-favor or
misunderstood. |
• |
Vaughan
Nelson starts with the entire U.S. exchange-traded equity investment
universe. Vaughan Nelson then narrows the investment universe by using
fundamental
analysis to construct a portfolio of generally 20 to 40
securities. |
• |
Vaughan
Nelson uses fundamental analysis to construct a portfolio that, in the
opinion of Vaughan Nelson, is made up of quality companies with the
potential
to provide significant increases in share price over a three year
period. |
• |
Vaughan
Nelson will generally sell a security when it reaches Vaughan Nelson’s
price target or when the issuer shows a change in financial condition,
competitive
pressures, poor management decisions or internal or external forces
reducing future expected returns from the investment
thesis. |
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio, and the Fund will not disclose the daily holdings
of
the Actual Portfolio. Although the Fund seeks to benefit from keeping its
portfolio information secret, market participants may attempt to use the Proxy
Portfolio
to identify the Fund’s trading strategy, which if successful, could result in
such market participants engaging in certain predatory trading practices
that
may have the potential to harm the Fund and its shareholders. The Fund’s
exemptive relief limits the types of securities in which the Fund can invest,
which
may constrain the Fund’s ability to implement its investment strategies. The
Fund is actively-managed and does not intend to track an
index.
Principal
Investment Risks
The
principal risks of investing in the Fund are summarized below. The Fund does not
represent a complete investment program. You may lose money by
investing in the
Fund.
Fund shares are not
bank deposits and are not guaranteed, endorsed or insured by the Federal Deposit
Insurance Corporation or any other government
agency, and are subject to
investment risks, including possible loss of the principal
invested.
The
significance of any specific risk to an investment in the Fund will vary over
time, depending on the composition of the Fund’s portfolio, market conditions,
and
other factors. You should read all of the risk information presented below
carefully, because any one or more of these risks may result in losses to the
Fund.
Proxy Portfolio Structure Risk:
Unlike traditional ETFs that provide daily disclosure of their portfolio
holdings, the Fund does not disclose the daily holdings of
the Actual Portfolio. Instead, the Fund discloses a Proxy Portfolio that is
designed to reflect the economic exposure and risk characteristics of the Fund’s
Actual
Portfolio on any given trading day. Although the Proxy Portfolio and Proxy
Portfolio Disclosures are intended to provide Authorized Participants and
other
market participants with enough information to allow them to engage in effective
arbitrage transactions that will keep the market price of the Fund’s
shares
trading at or close to the underlying NAV per share of the Fund, while at the
same time enabling them to establish cost-effective hedging strategies to
reduce
risk, there is a risk that market prices will vary significantly from the
underlying NAV of the Fund. See “Premium/Discount Risk.” Similarly, shares of
the
Fund may trade at a wider bid/ask spread than shares of traditional ETFs, and
may therefore be more costly for investors to trade. See “Trading Issues
Risk.”
Also, the Fund will incur expenses to license the Proxy Portfolio mechanism,
which may impact shareholder returns. Additionally, the proxy mechanism
itself
may result in additional trading costs, which also may negatively impact
shareholder returns. In addition, although the Proxy Portfolio is designed to
protect
the Fund from predatory practices such as front-running and free-riding, market
participants may nevertheless be able to use the Proxy Portfolio and
Proxy
Portfolio Disclosures to engage in trading practices that disadvantage the Fund.
See “Predatory Trading Practices Risk.” The Fund will monitor on an ongoing
basis the premium/discount between the market price and the NAV of the Fund’s
shares, but there can be no assurance that the Proxy Portfolio methodology
will operate as intended. The Proxy Portfolio methodology is relatively novel
and may not be an effective arbitrage mechanism under all market conditions.
The effectiveness of the Proxy Portfolio methodology as an arbitrage mechanism
is contingent upon, among other things, the effectiveness of the Fund’s
Factor Model analysis in creating a Proxy Portfolio that performs in a manner
substantially identical to the performance of the Fund’s Actual Portfolio
and
the willingness of Authorized Participants and other market participants to
trade based on the Proxy Portfolio. In the event that the Proxy Portfolio
methodology
does not result in effective arbitrage opportunities in the Fund shares, the
Fund may exhibit wider premiums/discounts, bid/ask spreads and tracking
error. At certain thresholds for such premiums/discounts, bid/ask spreads and
tracking error, the Fund’s Board of Trustees will consider possible remedial
measures, which may include liquidation or conversion to a fully-transparent,
active ETF or a mutual fund.
• |
Premium/Discount Risk:
Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the
“NYSE Arca”) and are bought and sold in the secondary market
at market prices that may differ from their most recent NAV. The market
value of the Fund’s shares will fluctuate, in some cases materially, in
response
to changes in the Fund’s NAV, the intraday value of the Fund’s holdings,
and the relative supply and demand for the Fund’s shares on the
exchange.
Although the Proxy Portfolio is intended to provide investors with enough
information to allow for an effective arbitrage mechanism that will
keep
the market price of the Fund at or close to the Fund’s NAV, there is a
risk (which may increase during periods of market disruption or
volatility) that market
prices for Fund shares will vary significantly from the Fund’s NAV. This
risk may be greater for the Fund than for traditional ETFs that disclose
their full
portfolio holdings on a daily basis because the publication of the Proxy
Portfolio does not provide the same level of transparency as the
publication of the
full portfolio by a fully transparent active ETF. This could cause the
Fund’s shares to have wider bid/ask spreads and larger premiums/discounts
than fully
transparent ETFs using the same investment strategies. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential
lack of an active trading market for shares may result in shares trading
at a significant premium or discount to NAV and/or in a reduced liquidity
of
your investment. During such periods, you may be unable to sell your
shares or may incur significant losses if you sell your shares. There are
various methods
by which investors can purchase and sell shares and various types of
orders that may be placed. Investors should consult their financial
intermediary
before purchasing or selling shares of the Fund. If a shareholder
purchases shares at a time when the market price is at a premium to the
NAV
or sells shares at a time when the market price is at a discount to the
NAV, the shareholder may sustain
losses. |
• |
Authorized Participant Concentration Risk:
Only
an authorized participant (“Authorized Participant”) may engage in
creation or redemption transactions
directly with the Fund. The Fund has a limited number of institutions that
act as Authorized Participants, none of which are or will be obligated
to
engage in creation or redemption transactions. To the extent that these
institutions exit the business or are unable to proceed with creation
and/or redemption
orders with respect to the Fund and no other Authorized Participant is
able to step forward to create or redeem Creation Units, Fund shares
may
trade at a discount to NAV and possibly face trading halts and/or
delisting. The
Fund’s novel structure may affect the number of entities willing to act
as
Authorized Participants, and this risk may be exacerbated during times of
market
stress. |
• |
Predatory Trading Practices
Risk:
Although the Fund seeks to benefit from keeping its portfolio holdings
information secret, market participants may attempt
to use the Proxy Portfolio and related Proxy Portfolio Disclosures to
identify the Fund’s holdings and trading strategy. If successful, this
could result in
such market participants engaging in predatory trading practices that
could harm the Fund and its shareholders. The Proxy Portfolio and related
Proxy Portfolio
Disclosures have been designed to minimize the risk that market
participants could “reverse engineer” the Fund’s portfolio and investment
strategy,
but they may not be successful in this
regard. |
• |
Trading Issues Risk:
Trading in Fund shares on the NYSE Arca may be halted in certain
circumstances. If 10% or more of the Fund’s Actual Portfolio does
not
have readily available market quotations, the Fund will promptly request
that the NYSE Arca halt trading in the Fund’s shares. Such trading halts
may have
a greater impact on the Fund compared to other ETFs due to its lack of
transparency. If the trading of a security held in the Fund’s Actual
Portfolio is halted
or otherwise does not have readily available market quotations and the
Adviser believes that the lack of any such readily available market
quotations
may affect the reliability of the Proxy Portfolio as an arbitrage vehicle
or otherwise determines it is in the best interest of the Fund, the
Adviser promptly
will disclose on the Fund’s website the identity and weighting of such
security for so long as such security’s trading is halted or otherwise
does not
have readily available market quotations and remains in the Actual
Portfolio.There can be no assurance that the requirements of the NYSE Arca
necessary
to maintain the listing of the Fund will continue to be met. Because the
Fund trades on the basis of a published Proxy Portfolio, it may trade at a
wider
bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and
therefore, may cost
investors more to trade especially during periods of market disruption or
volatility. |
• |
Tracking Error Risk:
Although the Proxy Portfolio is designed to reflect the economic exposure
and risk characteristics of the Fund’s Actual Portfolio on any
given trading day, there is a risk that the performance of the Proxy
Portfolio will diverge from the performance of the Actual Portfolio,
potentially materially. |
Equity Securities Risk:
The value of the Fund’s investments in equity securities could be subject to
unpredictable declines in the value of individual securities
and periods of below-average performance in individual securities or in the
equity market as a whole. In the event an issuer is liquidated or declares
bankruptcy, the claims of owners of the issuer’s bonds generally take precedence
over the claims of those who own preferred stock or common stock.
Securities
of real estate-related companies and exchange-traded REITs in which the Fund may
invest may be considered equity securities, thus subjecting
the Fund to the risks of investing in equity securities
generally.
Non-Diversification
Risk: Compared with other
mutual funds, the Fund may invest a greater percentage of its assets in a
particular issuer and may invest in fewer issuers.
Therefore, the Fund may have more risk because changes in the value of a single
security or the impact of a single economic, political or
regulatory occurrence may have a
greater adverse impact on the Fund’s net asset
value.
Market/Issuer Risk:
The market value of the Fund’s investments will move up and down, sometimes
rapidly and unpredictably, based upon overall market and
economic conditions, as well as a number of reasons that directly relate to the
issuers of the Fund’s investments, such as management performance, financial
condition and demand for the issuers’ goods and
services.
Management Risk:
A strategy used by the Fund’s portfolio managers may fail to produce the
intended result.
Liquidity Risk:
Liquidity risk is the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them or to receive the price it expects.
Decreases in the number of financial institutions willing to make markets in the
Fund’s investments or in their capacity or willingness to transact may
increase
the Fund’s exposure to this risk. Events that may lead to increased redemptions,
such as market disruptions or increases in interest rates, may also negatively
impact the liquidity of the Fund’s investments when it needs to dispose of them.
If the Fund is forced to sell its investments at an unfavorable time
and/or
under adverse conditions in order to meet redemption requests, such sales could
negatively affect the Fund. During times of market turmoil, there may
be
no buyers or sellers for securities in certain asset classes. In other
circumstances, liquid investments may become illiquid. Liquidity issues may also
make it
difficult to value the Fund’s investments. The Fund may invest in liquid
investments that become illiquid due to financial distress, or geopolitical
events such as
sanctions, trading halts or
wars.
Cybersecurity and Technology Risk:
The Fund, its service providers, market makers, listing exchange, Authorized
Participants and other market participants
increasingly depend on complex information technology and communications
systems, which are subject to a number of different threats and risks
that could adversely affect the Fund and its shareholders. Cybersecurity and
other operational and technology issues may result in financial losses to the
Fund
and its shareholders.
Foreign Securities Risk:
Investments in foreign securities may be subject to greater political, economic,
environmental, credit/counterparty and information risks.
The
Fund’s investments in foreign securities also are subject to foreign currency
fluctuations and other foreign currency-related risks.
Foreign securities may
be subject to higher volatility than U.S. securities, varying degrees of
regulation and limited liquidity.
New and Smaller Sized Fund Risk: The
Fund is relatively new and has a limited operating history for investors to
evaluate and may not be successful in implementing
its investment strategies. The Fund may fail to attract sufficient assets to
achieve or maintain economies of scale, which could result in the Fund
being liquidated at any time without shareholder approval and at a time that may
not be favorable for all shareholders. Smaller
ETFs will have a lower public
float and lower trading volumes, leading to wider bid/ask
spreads.
Operational Risk: The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication
errors, errors of the Fund’s service providers, market makers, listing exchange,
Authorized Participants or the issuers of securities in which the Fund
invests or with which they do business, failed or inadequate processes and
technology or systems
failures.
REITs Risk:
Investments in the real estate industry, including REITs, are particularly
sensitive to economic downturns and are sensitive to factors such as
changes
in real estate values, property taxes and tax laws, interest rates, cash flow of
underlying real estate assets, occupancy rates, government regulations
affecting
zoning, land use and rents and the management skill and creditworthiness of the
issuer. Companies in the real estate industry also may be subject to
liabilities under environmental and hazardous waste laws. In addition, the value
of a REIT is affected by changes in the value of the properties owned by
the
REIT or mortgage loans held by the REIT. REITs are also subject to default and
prepayment risk. Many REITs are highly leveraged, increasing their risk. The
Fund
will indirectly bear its proportionate share of expenses, including management
fees, paid by each REIT in which it invests in addition to the expenses of
the
Fund.
Secondary Market Trading Risk: Investors
buying or selling shares of the Fund in the secondary market will pay brokerage
commissions or other charges imposed
by broker-dealers as determined by that broker. Brokerage commissions are often
a fixed amount and may be a significant proportional cost for investors
seeking to buy or sell relatively small amounts of
shares.
Risk/Return
Bar Chart and Table
The bar chart and
table shown below provide some indication of the risks of investing in the Fund
by showing changes in the Fund’s performance from year to
year and by showing
how the Fund’s average annual returns for the one-year and life-of-fund periods
compare to those of a broad measure of market performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how the Fund will perform in the future. Updated performance
information is available online at im.natixis.com
and/or by calling the Fund toll-free at 800-458-7452.
|
|
|
Highest Quarterly
Return: Fourth Quarter
2021, 13.18% Lowest Quarterly
Return: Third Quarter
2021, 3.65% |
|
|
|
Average Annual
Total Returns |
|
|
(for the periods ended
December 31, 2021) |
Past 1 Year |
Life of Fund (9/17/20) |
Return
Before Taxes |
39.60%
|
39.79%
|
Return
After Taxes on Distributions |
30.69%
|
32.81%
|
Return
After Taxes on Distributions and Sale of Fund Shares |
23.88%
|
27.91%
|
S&P
500® Index |
28.71%
|
32.09%
|
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown.
After-tax returns shown are not relevant to investors who
hold their shares
through tax-advantaged arrangements, such as 401(k) plans, qualified plans,
education savings accounts, such as 529 plans, or individual
retirement
accounts. Index performance reflects no
deduction for fees, expenses or
taxes.
Management
Investment
Adviser
Natixis
Advisors, LLC (“Natixis Advisors”)
Subadviser
Vaughan
Nelson Investment Management, L.P. (“Vaughan Nelson”)
Portfolio
Managers
Scott
J. Weber, CFA®,
Lead Senior Portfolio Manager of Vaughan Nelson, has served as co-manager of the
Fund since 2020.
Chris
D. Wallis, CFA®,
Chief Executive Officer and Lead Senior Portfolio Manager of Vaughan Nelson, has
served as co-manager of the Fund since 2020.
Purchase
and Sale of Fund Shares
The
Fund will issue and redeem shares at NAV only in large blocks of shares,
typically 10,000 shares, called “Creation Units.” Only a few financial
institutions that
are Authorized Participants are authorized to purchase and redeem Creation Units
directly with the Fund. Creation Units are typically issued and redeemed
in exchange for cash and/or the deposit or delivery of a basket of securities
specified each day by the Fund as the securities in exchange for which
the
Fund will issue or redeem shares. Except when aggregated in Creation Units, shares are
not redeemable securities of the Fund.
Individual
shares of the Fund may only be purchased and sold in secondary market
transactions through broker-dealers. Shares of the Fund are listed for
trading
on the NYSE Arca, and because shares trade at market prices rather than NAV,
shares of the Fund may trade at a price greater than NAV (a premium)
or
less than NAV (a discount).
You
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase shares of the Fund (bid) and the lowest price
a
seller is willing to accept for shares of the Fund (ask) when buying or selling
shares in the secondary market (“the bid/ask spread”). For more information,
including
recent information (when available) regarding the Fund’s NAV, market price,
premiums and discounts, and bid/ask spreads, please visit the Fund’s
website
at im.natixis.com.
Tax
Information
Fund
distributions are generally taxable to you as ordinary income or capital gains,
except for distributions to retirement plans and other investors that qualify
for
tax-advantaged treatment under U.S. federal income tax law generally.
Investments in such tax-advantaged plans will generally be taxed only upon
withdrawal
of monies from the tax-advantaged arrangement.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary
for the sale of the Fund shares and related services. These payments may create
a conflict of interest by influencing the broker-dealer or other intermediary
and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
Investment
Goal
The
Fund seeks long-term growth of capital. The Fund’s investment goal may be
changed without shareholder approval. The Fund will provide 60 days’ prior
written
notice to shareholders before changing the investment goal.
Principal
Investment Strategies
The
Fund ordinarily invests at least 80% of its assets in equity securities,
including exchange-traded common stocks and exchange-traded preferred stocks.
Under
normal market conditions, the Fund will invest at least 80% of its assets in
securities of U.S. issuers. The Fund’s approach to equity investing combines
the
styles of two subadvisers in selecting securities for each of the Fund’s
segments. The segments and their subadvisers are listed below.
• |
Harris
Associates - Large Cap Value segment - Under normal circumstances, the
Large Cap Value segment of the Fund managed by Harris Associates L.P.
(“Harris
Associates”) will invest primarily in the exchange-traded common stocks of
larger- capitalization companies that Harris Associates believes are
trading
at a substantial discount to the company’s “intrinsic value.” By
“intrinsic value,” Harris Associates means its estimate of the price a
knowledgeable buyer
would pay to acquire the entire business. Harris Associates believes that
investing in securities priced significantly below what Harris Associates
believes
is a company’s intrinsic value presents the best opportunity to achieve
the Fund’s investment objectives. Harris Associates usually sells a
security when
the price approaches its estimated value and monitors each holding and
adjusts its price targets as warranted to reflect changes in the issuer’s
fundamentals.
In determining whether an issuer is a U.S. or foreign issuer for the
Harris Associates – Large Cap Value segment, Harris Associates
considers
various factors, including its country of domicile, the primary stock
exchange on which it trades, the location from which the majority of its
revenue
comes, and its reporting currency. |
• |
Loomis
Sayles - All Cap Growth segment - Under normal circumstances, the All Cap
Growth segment of the Fund, managed by Loomis, Sayles & Company,
L.P.
(“Loomis Sayles”), will invest primarily in exchange-traded equity
securities, including exchange-traded common stocks and exchange-traded
American Depositary
Receipts (“ADRs”). This segment may invest in companies of any size. The
segment normally invests across a wide range of sectors and industries.
The segment’s portfolio manager employs a growth style of equity
management that emphasizes companies with sustainable competitive
advantages
versus others, long-term structural growth drivers that will lead to
above-average future cash flow growth, attractive cash flow returns on
invested
capital, and management teams focused on creating long-term value for
shareholders. The segment’s portfolio manager aims to invest in
companies
when they trade at a significant discount to the estimate of intrinsic
value (i.e., companies with share prices trading significantly below what
the
portfolio manager believes the share price should be). The segment will
consider selling a portfolio investment when the portfolio manager
believes an unfavorable
structural change occurs within a given business or the markets in which
it operates, a critical underlying investment assumption is flawed,
when
a more attractive reward-to-risk opportunity becomes available, when the
portfolio manager believes the current price fully reflects intrinsic
value, or for
other investment reasons which the portfolio manager deems appropriate.
Although certain equity securities purchased by the Loomis Sayles – All
Cap Growth
segment of the Fund may be issued by domestic companies incorporated
outside of the United States, Loomis Sayles does not consider these
securities
to be foreign if they are included in the U.S. equity indices published by
S&P Global Ratings or Russell Investments or if the security’s country
of risk
defined by Bloomberg is the United
States. |
Subject
to the allocation policy adopted by the Fund’s Board of Trustees, Natixis
Advisors generally allocates capital invested in the Fund equally (i.e., 50%)
between
its two segments. Under the allocation policy, Natixis Advisors may also
allocate capital away from or towards each segment from time to time and
may
reallocate capital between the segments. Each subadviser manages its segment of
the Fund’s assets in accordance with its distinct investment style and
strategy.
The
Fund may also:
• |
Invest
in exchange-traded real estate investment trusts
(“REITs”). |
• |
Invest
in common stocks listed on a foreign exchange that trade on such exchange
contemporaneously with the shares of the
Fund. |
• |
Invest
in exchange-traded ADRs. |
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio. The Fund will not disclose the daily holdings of
the
Actual Portfolio and will not require a minimum overlap of holdings between the
Proxy Portfolio and Actual Portfolio. Although the Fund seeks to benefit
from
keeping its portfolio information secret, market participants may attempt to use
the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful,
could result in such market participants engaging in certain predatory trading
practices that may have the potential to harm the Fund and its shareholders.
The Fund’s exemptive relief limits the types of securities in which the Fund can
invest, which may constrain the Fund’s ability to implement its investment
strategies. The Fund is actively-managed and does not intend to track an
index.
Investment
Goals, Strategies and Risks
Investment
Goal
The
Fund seeks long-term capital appreciation. The Fund’s investment goal may be
changed without shareholder approval. The Fund will provide 60 days’
prior
written notice to shareholders before changing the investment goal.
Principal
Investment Strategies
Under
normal market conditions, the Fund will invest at least 80% of its assets in
companies that, at the time of purchase, have market capitalizations within
the
capitalization range of the Russell Midcap®
Value Index. The Russell Midcap®
Value Index is an unmanaged index that measures the performance of companies
with lower price to book ratios and lower forecasted growth values within the
broader Russell Midcap Index®.
While the market capitalization range
for the Russell Midcap®
Value Index fluctuates, at December 31, 2021, it was $435 million to $73.6
billion. However, the Fund may invest up to 20% of its
assets in companies with smaller or larger capitalizations. Equity securities
may take the form of exchange-traded stock (e.g., common and preferred
exchange-traded
stocks) in corporations and exchange-traded real estate investment trusts
(“REITs”).
Vaughan
Nelson Investment Management, L.P. (“Vaughan Nelson”) invests in
medium-capitalization companies with a focus on those companies meeting
Vaughan
Nelson’s return expectations. Vaughan Nelson uses a bottom-up value oriented
investment process in constructing the Fund’s portfolio. Vaughan Nelson
seeks companies with the following characteristics, although not all of the
companies selected will have these attributes:
• |
Companies
earning a positive return on capital with stable-to-improving
returns. |
• |
Companies
valued at a discount to their asset
value. |
• |
Companies
with an attractive and sustainable dividend
level. |
In
selecting investments for the Fund, Vaughan Nelson generally employs the
following strategies:
• |
Vaughan
Nelson employs a value-driven investment philosophy that selects stocks
selling at a relatively low value based on business fundamentals,
economic
margin analysis and discounted cash flow models. Vaughan Nelson selects
companies that it believes are out of favor or
misunderstood. |
• |
Vaughan
Nelson uses fundamental analysis to construct a portfolio that, in the
opinion of Vaughan Nelson, is made up of quality companies with the
potential
to provide significant increases in share price over a three year
period. |
• |
Vaughan
Nelson will generally sell a security when it reaches Vaughan Nelson’s
price target or when the issuer shows a change in financial condition,
competitive
pressures, poor management decisions or internal or external forces
reducing future expected returns from those expected at the time of
investment. |
The
Fund may also:
• |
Invest
in exchange-traded preferred stock. |
• |
Invest
in common stocks listed on a foreign exchange that trade on such exchange
contemporaneously with the shares of the
Fund. |
• |
Invest
in other investment companies, to the extent permitted by the Investment
Company Act of 1940. |
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio. The Fund will not disclose the daily holdings of
the
Actual Portfolio and will not require a minimum overlap of holdings between the
Proxy Portfolio and Actual Portfolio. Although the Fund seeks to benefit
from
keeping its portfolio information secret, market participants may attempt to use
the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful,
could result in such market participants engaging in certain predatory trading
practices that may have the potential to harm the Fund and its shareholders.
The Fund’s exemptive relief limits the types of securities in which the Fund can
invest, which may constrain the Fund’s ability to implement its investment
strategies. The Fund is actively-managed and does not intend to track an
index.
Investment
Goal
The
Fund seeks long-term capital appreciation. The Fund’s investment goal may be
changed without shareholder approval. The Fund will provide 60 days’
prior
notice to shareholders before changing the investment goal.
Principal
Investment Strategies
The
Fund, under normal market conditions, will invest primarily in equity
securities, including exchange-traded common stocks, exchange-traded preferred
stocks
and exchange-traded real estate investment trusts (“REITs”). The Fund is
non-diversified, which means that it may invest a greater percentage of its
assets
in a particular issuer and may invest in fewer issuers than a diversified fund.
Typically, the Fund’s portfolio will generally hold 20 to 40 securities. The
Fund
may invest in companies with any market capitalization, although, it will
typically focus its investments in mid- to large- capitalization companies. A
company
will be considered to be a mid- to large-capitalization company if its
capitalization is $5 billion or higher.
Investment
Goals, Strategies and Risks
Vaughan
Nelson invests in companies of all market capitalizations with a focus on those
companies meeting Vaughan Nelson’s return expectations.
Vaughan
Nelson uses a bottom-up value oriented investment process in constructing the
Fund’s portfolio. Vaughan Nelson seeks companies with the following
characteristics, although not all of the companies selected will have these
attributes:
• |
Companies
earning a positive return on capital with stable-to-improving
returns. |
• |
Companies
valued at discount to their asset value. |
• |
Companies
with an attractive and sustainable dividend
level. |
In
selecting investments for the Fund, Vaughan Nelson generally employs the
following strategies:
• |
Vaughan
Nelson employs a value-driven investment philosophy that selects
securities selling at a relatively low value based on discounted cash flow
models.
Vaughan Nelson selects companies that it believes are out-of-favor or
misunderstood. |
• |
Vaughan
Nelson starts with the entire U.S. exchange-traded equity investment
universe. Vaughan Nelson then narrows the investment universe by using
fundamental
analysis to construct a portfolio of generally 20 to 40
securities. |
• |
Vaughan
Nelson uses fundamental analysis to construct a portfolio that, in the
opinion of Vaughan Nelson, is made up of quality companies with the
potential
to provide significant increases in share price over a three year
period. |
• |
Vaughan
Nelson will generally sell a security when it reaches Vaughan Nelson’s
price target or when the issuer shows a change in financial condition,
competitive
pressures, poor management decisions or internal or external forces
reducing future expected returns from the investment
thesis. |
The
Fund also may:
• |
Invest
in common stocks listed on a foreign exchange that trade on such exchange
contemporaneously with the shares of the
Fund. |
• |
Invest
in exchange-traded REITs. |
• |
Invest
in exchange-traded American Depositary Receipts
(“ADRs”). |
Non-Transparent ETF with Proxy Portfolio
Structure.
The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs,
however, which generally publish
their portfolio holdings on a daily basis, the Fund discloses a portfolio
transparency substitute—the “Proxy Portfolio”—and certain related information
about the relative performance of the Proxy Portfolio and the Fund’s actual
portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”) per share of the
Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not
the Fund’s Actual Portfolio. The Fund will not disclose the daily holdings of
the
Actual Portfolio and will not require a minimum overlap of holdings between the
Proxy Portfolio and Actual Portfolio. Although the Fund seeks to benefit
from
keeping its portfolio information secret, market participants may attempt to use
the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful,
could result in such market participants engaging in certain predatory trading
practices that may have the potential to harm the Fund and its shareholders.
The Fund’s exemptive relief limits the types of securities in which the Fund can
invest, which may constrain the Fund’s ability to implement its investment
strategies. The Fund is actively-managed and does not intend to track an
index.
Principal
Investment Risks
This
section provides more information on certain principal risks that may affect a
Fund’s portfolio, as well as information on additional risks a Fund may be
subject
to because of its investments or practices. In seeking to achieve its investment
goals, a Fund may also invest in various types of securities and engage
in
various investment practices which are not a principal focus of a Fund and
therefore are not described in this Prospectus. These securities and investment
practices
and their associated risks are discussed in the Funds’ SAI, which is available
without charge upon request (see back cover). The significance of any
specific
risk to an investment in a Fund will vary over time, depending on the
composition of the Fund’s portfolio, market conditions, and other factors. You
should
read all of the risk information presented below carefully, because any one or
more of these risks may result in losses to a Fund.
Fund
shares are not bank deposits and are not guaranteed, endorsed or insured by the
Federal Deposit Insurance Corporation or any other government agency,
and are subject to investment risks, including possible loss of the principal
invested.
Proxy Portfolio Structure Risk
Unlike
traditional ETFs that provide daily disclosure of their portfolio holdings, the
Funds do not disclose the daily holdings of the Actual Portfolio. Instead, a
Fund
discloses a Proxy Portfolio that is designed to reflect the economic exposure
and risk characteristics of the Fund’s Actual Portfolio on any given trading
day.
Although the Proxy Portfolio and Proxy Portfolio Disclosures are intended to
provide Authorized Participants and other market participants with enough
information
to allow them to engage in effective arbitrage transactions that will keep the
market price of a Fund’s shares trading at or close to the underlying
NAV
per share of the Fund, while at the same time enabling them to establish
cost-effective hedging strategies to reduce risk, there is a risk that market
prices
will vary significantly from the underlying NAV of the Fund. See
“Premium/Discount Risk.” Similarly, shares of the Fund may trade at a wider
bid/ask spread
than shares of traditional ETFs, and may therefore be more costly for investors
to trade. See “Trading Issues Risk.” Also, the Fund will incur expenses
to
license the Proxy Portfolio mechanism, which may impact shareholder returns.
Additionally, the proxy mechanism itself may result in additional trading
costs,
which also may negatively impact shareholder returns. In addition, although the
Proxy Portfolio is designed to protect a Fund from predatory practices
such
as front-running and free-riding, market participants may nevertheless be able
to use the Proxy Portfolio and Proxy Portfolio Disclosures to engage in
Investment
Goals, Strategies and Risks
trading
practices that disadvantage the Fund. See “Predatory Trading Practices Risk.” A
Fund will monitor on an ongoing basis the premium/discount between the
market price and the NAV of the Fund’s shares, but there can be no assurance
that the Proxy Portfolio methodology will operate as intended. The Proxy
Portfolio
methodology is relatively novel and may not be an effective arbitrage mechanism
under all market conditions. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage
opportunities in a Fund’s shares, the Fund may exhibit wider premiums/discounts,
bid/ask spreads and tracking error. At certain thresholds for such premiums/discounts,
bid/ask spreads and tracking error, the Fund’s Board of Trustees will consider
possible remedial measures, which may include liquidation
or conversion to a fully-transparent, active ETF or a mutual
fund.
The
Funds, their service providers, Authorized Participants, and the relevant
listing exchange are subject to operational risks arising from, among other
things, human
error, systems and technology errors and disruptions, failed or inadequate
controls, and fraud. These errors may adversely affect a Fund’s operations,
including
its ability to execute its investment process, calculate or disseminate its NAV
or intraday value of the Fund’s holdings in a timely or accurate manner,
and accurately process creations or redemptions. These issues could, for
example, cause the Fund to sell or repurchase its share at incorrect prices,
or
result in the market prices of the Fund’s shares deviating materially from NAV.
While the Funds seek to minimize such events through controls and oversight,
there may still be failures and a Fund may be unable to recover any damages
associated with such failures. These failures may have a material adverse
effect on the Fund’s returns.
|
Shares
of the Funds are listed for trading on the NYSE Arca and are bought and
sold in the secondary market at market prices that may differ from their
most
recent NAV. The NAV of a Fund’s shares will generally fluctuate with
changes in the market value of the Fund’s holdings. The market value of a
Fund’s
shares will fluctuate, in some cases materially, in response to changes in
the Fund’s NAV, the intraday value of the Fund’s holdings, and the
relative supply
and demand for the Fund’s shares on the exchange. Although the disclosure
of the Proxy Portfolio and Proxy Portfolio Disclosure is intended to
provide
investors with enough information to allow for an effective arbitrage
mechanism that will keep the market price of a Fund at or close to the
Fund’s NAV,
there is a risk (which may increase during periods of market disruption or
volatility) that market prices for Fund shares will vary significantly
from the Fund’s
NAV. This risk may be greater for a Fund than for traditional ETFs that
disclose their full portfolio holdings on a daily basis because
publication of the
Proxy Portfolio does not provide the same level of transparency as the
publication of the full portfolio by a fully transparent active ETF. This
could cause the
Fund’s shares to have wider bid/ask spreads and larger premiums/discounts
than fully transparent active ETFs using the same investment strategies.
The
Adviser and Subadvisers cannot predict whether shares will trade below, at
or above their NAV. Price differences may be due, in large part, to the
fact that
supply and demand forces at work in the secondary trading market for
shares will be closely related to, but not identical to, the same forces
influencing
the prices of the securities held by the Fund. While the
creation/redemption feature is designed to make it more likely that a
Fund’s shares normally
will trade on stock exchanges at prices close to the Fund’s next
calculated NAV, exchange prices are not expected to correlate exactly with
the Fund’s
NAV due to timing reasons, supply and demand imbalances and other factors.
Disruptions to creations and redemptions, the existence of extreme
market
volatility or potential lack of an active trading market for shares may
result in shares trading at a significant premium or discount to NAV
and/or in a
reduced liquidity of your investment. During such periods, you may be
unable to sell your shares or may incur significant losses if you sell
your shares. There
are various methods by which investors can purchase and sell shares and
various types of orders that may be placed. Investors should consult their
financial
intermediary before purchasing or selling shares of a Fund. If a
shareholder purchases shares at a time when the market price is at a
premium to the
NAV or sells shares at a time when the market price is at a discount to
the NAV, the shareholder may sustain
losses. |
• |
Authorized Participant Concentration
Risk |
|
Only
an Authorized Participant may engage in creation or redemption
transactions directly with a Fund. A Fund has a limited number of
institutions that act as
Authorized Participants, none of which are or will be obligated to engage
in creation or redemption transactions. To the extent that these
institutions exit
the business or are unable to proceed with creation and/or redemption
orders with respect to the Fund and no other Authorized Participant is
able to step
forward to create or redeem Creation Units, the Fund’s shares may trade at
a discount to NAV and possibly face trading halts and/or delisting. The
Funds’
novel structure may affect the number of entities willing to act as
Authorized Participants, and this risk may be exacerbated during times of
market stress. |
• |
Predatory Trading Practices
Risk |
|
Although
a Fund seeks tobenefit from keeping its portfolio information secret,
market participants may attempt to use the Proxy Portfolio and related
Proxy Portfolio
Disclosures to identify the Fund’s holdings and trading strategy. If
successful, this could result in such market participants engaging in
predatory trading
practices that could harm a Fund and its shareholders. The Proxy Portfolio
and related Proxy Portfolio Disclosures have been designed to minimize
the
risk that market participants could “reverse engineer” a Fund’s portfolio
and investment strategy, but they may not be successful in this
regard. |
|
Although
a Fund’s shares are listed on the NYSE Arca, there can be no assurance
that an active or liquid trading market for them will develop or be
maintained.
Trading in Fund shares on the NYSE Arca may be halted due to market
conditions or for reasons that, in the view of the NYSE Arca, make
trading
in shares inadvisable. If 10% or more of a Fund’s Actual Portfolio does
not have readily available market quotations, the Fund will promptly
request that
the Exchange halt trading in the Fund’s shares. Such trading halts may
have a greater impact on the Fund compared to other ETFs due to a Fund’s
lack of
transparency. In addition, trading in shares on the NYSE Arca is subject
to trading halts caused by extraordinary market volatility pursuant to the
NYSE |
Investment
Goals, Strategies and Risks
|
Arca’s
“circuit breaker” rules (rules that require a halt in trading in a
specific period of time when market prices decline by a specified
percentage during the
course of a trading day). If the trading of a security held in a Fund’s
Actual Portfolio is halted or otherwise does not have readily available
market quotations
and the Adviser believes that the lack of any such readily available
market quotations may affect the reliability of the Proxy Portfolio as an
arbitrage
vehicle or otherwise determines it is in the best interest of the Fund,
the Adviser promptly will disclose on the Fund’s website the identity and
weighting
of such security for so long as such security’s trading is halted or
otherwise does not have readily available market quotations and remains in
the
Actual Portfolio. There can be no assurance that the requirements of the
NYSE Arca necessary to maintain the listing of a Fund will continue to be
met or
will remain unchanged. In addition, an exchange or market may close or
issue trading halts on specific securities, or the ability to buy or sell
certain securities
or financial instruments may be restricted, which may result in a Fund
being unable to buy or sell certain securities or financial instruments.
In such
circumstances, the Fund may be unable to rebalance its portfolio, may be
unable to accurately price its investments and/or may incur substantial
trading
losses. Because the Funds trade on the basis of published Proxy
Portfolios, they may trade at a wider bid/ask spread and may experience a
wider premium/discount
than traditional ETFs that publish their portfolios on a daily basis, and
therefore, the Funds may cost investors more to trade especially
during
periods of market volatility. |
|
Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of a Fund’s Actual Portfolio on any given trading day,
there
is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially
materially. |
Allocation Risk
A
Fund’s allocations between asset classes and market exposures may not be optimal
in every market condition and may adversely affect a Fund’s performance.
You could lose money on your investment in a Fund as a result of this
allocation.
Cybersecurity and Technology Risk
The
Funds, their service providers, market makers, listing exchange, Authorized
Participants and other market participants increasingly depend on complex
information
technology and communications systems, which are subject to a number of
different threats and risks that could adversely affect the Funds and
their
shareholders. These risks include, among others, theft, misuse, and improper
release of confidential or highly sensitive information relating to the Funds
and
their shareholders, as well as compromises or failures to systems, networks,
devices and applications relating to the operations of the Funds and their
service
providers. Power outages, natural disasters, equipment malfunctions and
processing errors that threaten these systems, as well as market events that
occur
at a pace that overloads these systems, may also disrupt business operations or
impact critical data. Cybersecurity and other operational and technology
issues may result in financial losses to the Funds and their shareholders,
impede business transactions, violate privacy and other laws, subject the
Funds
to certain regulatory penalties and reputational damage, and increase compliance
costs and expenses. Although the Funds have developed processes, risk
management systems and business continuity plans designed to reduce these risks,
the Funds do not directly control the cybersecurity defenses, operational
and technology plans and systems of their service providers, financial
intermediaries and companies in which they invest or with which they do
business.
The Funds and their shareholders could be negatively impacted as a result.
Similar types of cybersecurity risks also are present for issuers of
securities
in which the Funds invest, which could result in material adverse consequences
for such issuers, and may cause the Funds’ investment in such securities
to lose value.
Equity Securities Risk
The
value of your investment in a Fund is based on the market value (or price) of
the securities the Fund holds. You may lose money on your investment due to
unpredictable
declines in the value of individual securities and/or periods of below-average
performance in individual securities, industries or in the equity market
as a whole. This may impact a Fund’s performance and may result in higher
portfolio turnover, which may increase the tax liability to taxable shareholders
and the expenses incurred by the Fund. The market value of a security can change
daily due to political, economic and other events that affect the
securities markets generally, as well as those that affect particular companies
or governments. These price movements, sometimes called volatility, will
vary
depending on the types of securities a Fund owns and the markets in which they
trade. Historically, the equity markets have moved in cycles, and the
value
of a Fund’s equity securities may fluctuate drastically from day to day.
Individual companies may report poor results or be negatively affected by
industry
and/or economic trends and developments. The prices of securities issued by such
companies may suffer a decline in response to such trends and developments.
Small-capitalization and emerging growth companies may be subject to more abrupt
price movements, limited markets and less liquidity than larger,
more established companies, which could adversely affect the value of a Fund’s
portfolio. Growth stocks are generally more sensitive to market movements
than other types of stocks primarily because their stock prices are based
heavily on future expectations. If the Subadviser’s assessment of the
prospects
for a company’s growth is wrong, or if the Subadviser’s judgment of how other
investors will value the company’s growth is wrong, then the price of
the company’s stock may fall or not approach the value that a Subadviser has
placed on it. Value stocks can perform differently from the market as a whole
and
from other types of stocks. Value stocks also present the risk that their lower
valuations fairly reflect their business prospects and that investors will not
agree
that the stocks represent favorable investment opportunities, and they may fall
out of favor with investors and underperform growth stocks during any
given
period. Common stocks represent an equity or ownership interest in an issuer. In
the event an issuer is liquidated or declares bankruptcy, the claims of
owners
of the issuer’s bonds generally take precedence over the claims of those who own
preferred stock or common stock.
Foreign Securities Risk
Foreign
securities risk is the risk associated with investments in issuers located in
foreign countries. A Fund’s investments in foreign securities may experience
more rapid and extreme changes in value than investments in securities of U.S.
issuers. The securities markets of many foreign countries are
Investment
Goals, Strategies and Risks
relatively
small, with a limited number of issuers and a small number of securities. In
addition, foreign companies often are not subject to the same degree of
regulation
as U.S. companies. Reporting, accounting, disclosure, custody and auditing
standards and practices of foreign countries differ, in some cases significantly,
from U.S. standards and practices, and are often not as rigorous. The Public
Company Accounting Oversight Board, which regulates auditors of U.S.
public companies, is unable to inspect audit work papers in certain foreign
countries. Many countries, including developed nations and emerging markets,
are faced with concerns about high government debt levels, credit rating
downgrades, the future of the euro as a common currency, possible government
debt restructuring and related issues, all of which may cause the value of a
Fund’s non-U.S. investments to decline. Nationalization, expropriation
or
confiscatory taxation, currency blockage, the imposition of sanctions by other
countries (such as the United States), political changes or diplomatic
developments
may impair a Fund’s ability to buy, sell, hold, receive, deliver, or otherwise
transact in certain securities and may also cause the value of a Fund’s
non-U.S. investments to decline. When imposed, foreign withholding or other
taxes reduce a Fund’s return on foreign securities. In the event of nationalization,
expropriation or other confiscation, a Fund could lose its entire foreign
investment. Investments in emerging markets may be subject to these risks
to a greater extent than those in more developed markets and securities of
developed market companies that conduct substantial business in emerging
markets
may also be subject to greater risk. These risks also apply to securities of
foreign issuers traded in the United States or through depositary receipt
programs
such as American Depositary Receipts. To the extent a Fund invests a significant
portion of its assets in a specific geographic region, the Fund may have
more exposure to regional political, economic, environmental,
credit/counterparty and information risks. In addition, foreign securities may
be subject to increased
credit/counterparty risk because of the potential difficulties of requiring
foreign entities to honor their contractual commitments.
Investments in Other Investment Companies
Risk
A
Fund will indirectly bear the management, service and other fees of any other
investment companies, including ETFs, in which it invests in addition to its
own
expenses. A Fund is also indirectly exposed to the same risks as the underlying
funds in proportion to the allocation of the Fund’s assets among the
underlying
funds. In addition, investments in ETFs have unique characteristics, including,
but not limited to, the expense structure and additional expenses associated
with investing in ETFs.
Liquidity
risk is the risk that a Fund may be unable to find a buyer for its investments
when it seeks to sell them or to receive the price it expects. Decreases in
the
number of financial institutions willing to make markets in a Fund’s investments
or in their capacity or willingness to transact may increase the Fund’s
exposure
to this risk. Events that may lead to increased redemptions, such as market
disruptions or increases in interest rates, may also negatively impact the
liquidity
of a Fund’s investments when it needs to dispose of them. If a Fund is forced to
sell its investments at an unfavorable time and/or under adverse conditions
in order to meet redemption requests, such sales could negatively affect the
Fund. Liquidity issues may also make it difficult to value a Fund’s investments.
A Fund may invest in liquid investments that become illiquid due to financial
distress, or geopolitical events such as sanctions, trading halts or
wars.
In some cases, especially during times of market turmoil, there may be no buyers
or sellers for securities in certain asset classes and a redemption may
dilute
the interest of the remaining shareholders.
Management Risk
Management
risk is the risk that the portfolio managers’ investment techniques could fail
to achieve a Fund’s objective and could cause your investment in a Fund
to lose value. Each Fund is subject to management risk because each Fund is
actively managed. The portfolio managers will apply their investment
techniques
and risk analyses in making investment decisions for the Funds, but there can be
no guarantee that such decisions will produce the desired results.
For example, securities that the portfolio managers expect to appreciate in
value may, in fact, decline. Similarly, in some cases, derivative and other
investment
techniques may be unavailable or the portfolio managers may determine not to use
them, even under market conditions where their use could have
benefited the Funds.
Market/Issuer Risk
The
market value of a Fund’s investments will move up and down, sometimes rapidly
and unpredictably, based upon political, regulatory, market, economic,
and
social conditions, as well as developments that impact specific economic
sectors, industries, or segments of the market, including conditions that
directly relate
to the issuers of a Fund’s investments, such as management performance,
financial condition, and demand for the issuers’ goods and services. A Fund
is
subject to the risk that geopolitical events will adversely affect global
economies and markets. War, terrorism, and related geopolitical events have led,
and in
the future may lead, to increased short-term market volatility and may have
adverse long-term effects on global economies and markets. Likewise, natural
and
environmental disasters and epidemics or pandemics may be highly disruptive to
economies and markets.
New and Smaller Sized Fund Risk
Funds
that are relatively new or relatively small are subject to additional risks. A
Fund that is relatively new has a limited operating history for investors to
evaluate
and may not be successful in implementing its investment strategies. A Fund that
is relatively small may fail to attract sufficient assets to achieve or
maintain
economies of scale, which could result in the Fund being liquidated at any time
without shareholder approval and at a time that may not be favorable
for all shareholders. In addition, a Fund that is relatively small may not be
successful in implementing its investment strategies after the Fund’s
assets
grow beyond a certain size, which could adversely affect the Fund’s performance.
Smaller ETFs will have a lower public float and lower trading volumes,
leading to wider bid/ask spreads.
Investment
Goals, Strategies and Risks
Non-Diversification Risk
Compared
with diversified mutual funds, a non-diversified Fund may invest a greater
percentage of its assets in a particular issuer and may invest in fewer
issuers.
Therefore, a non-diversified Fund may have more risk because changes in the
value of a single security or the impact of a single economic, political or
regulatory
occurrence may have a greater adverse impact on the Fund’s net asset
value.
Operational Risk
A
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication errors, errors
of
the Fund’s service providers, market makers, listing exchange, Authorized
Participants or the issuers of securities in which a Fund invests or with which
it does
business, failed or inadequate processes and technology or systems failures. A
Fund seeks to reduce these operational risks through controls and procedures.
However, these measures do not address every possible risk and may be inadequate
for those risks that they are intended to address.
Recent Market Events Risk
The
Covid-19 pandemic and efforts to contain its spread have resulted in, among
other things, extreme volatility in the financial markets and severe losses;
reduced
liquidity of many instruments; exchange trading suspensions and closures; higher
default rates; border closings and other significant travel restrictions
and disruptions; significant disruptions to business operations, supply chains
and customer activity; lower consumer demand for goods and services;
significant job losses and increasing unemployment; event cancellations and
restrictions; service cancellations, reductions and other changes; significant
challenges in healthcare service preparation and delivery; prolonged
quarantines; as well as general concern and uncertainty that has negatively
affected
the economic environment. The impact of this pandemic and any other epidemic or
pandemic that may arise in the future could adversely affect the economies
of many nations or the entire global economy and the financial performance of
individual issuers, sectors, industries, asset classes, and markets in
significant
and unforeseen ways. The U.S. government and the Federal Reserve, as well as
certain foreign governments and central banks, are taking extraordinary
actions to support local and global economies and the financial markets in
response to the Covid-19 pandemic, including by decreasing interest rates
to very low levels and implementing a variety of emergency stimulus measures.
These actions may not succeed or have the intended effect, and in some
cases,
including in the United States, have resulted in a large expansion of government
deficits and debt, the long term consequences of which are not known.
This crisis or other public health crises may also exacerbate other pre-existing
political, social, economic, market and financial risks. The effects of the
Covid-19
pandemic or any future outbreak in developing or emerging market countries may
be greater due to less established health care systems. The duration
of the Covid-19 pandemic and its effects cannot be determined with certainty.
Such effects could impair a Fund’s ability to maintain operational standards
(such as with respect to satisfying redemption requests), disrupt the operations
of a Fund’s service providers, adversely affect the value and liquidity
of a Fund’s investments and negatively impact a Fund’s performance and your
investment in the Fund.
In
addition, Russia launched a large-scale invasion of Ukraine on February 24,
2022. The extent and duration of the military action, resulting sanctions and
resulting
future market disruptions in the region and around the world are impossible to
predict, but could be significant and have a severe adverse effect on
the
region and around the world, including significant negative impacts on the
economy and the markets for certain securities and commodities, such as oil
and
natural gas, as well as other sectors.
REITs Risk
The
performance of a Fund that invests in REITs may be dependent in part on the
performance of the real estate market and the real estate industry in
general.
The real estate industry is particularly sensitive to economic downturns.
Securities of companies in the real estate industry, including REITs, are
sensitive
to factors such as changes in real estate values, property taxes and tax laws,
interest rates, cash flow of underlying real estate assets, occupancy
rates,
government regulations affecting zoning, land use and rents, and the management
skill and creditworthiness of the issuer. Companies in the real estate
industry
also may be subject to liabilities under environmental and hazardous waste laws.
In addition, the value of a REIT is affected by changes in the value
of
the properties owned by the REIT or the mortgage loans held by the REIT. REITs
also are subject to default and prepayment risk. REITs are dependent upon
cash
flow from their investments to repay financing costs and also on the ability of
the REITs’ managers. A Fund will indirectly bear its proportionate share of
expenses,
including management fees, paid by each REIT in which it invests in addition to
the expenses of the Fund.
Secondary Market Trading Risk
A
Fund is subject to a number of secondary market trading risks, including the
potential lack of an active market for Fund shares, losses from trading in
secondary
markets, periods of high volatility and disruptions in the creation and
redemption process, any of which may lead to the Fund’s shares trading at a
premium
or discount. Investors buying or selling shares of a Fund in the secondary
market will pay brokerage commissions or other charges imposed by and
determined
by the broker-dealers, which may be a significant proportional cost for
investors seeking to buy or sell relatively small amounts of shares. In
addition,
secondary market investors will also incur the cost of the difference between
the price that an investor is willing to pay for shares (the “bid” price)
and
the price at which an investor is willing to sell shares (the “ask” price). This
difference in bid and ask prices is often referred to as the “spread” or
“bid/ask
spread.” The bid/ask spread varies over time for shares based on trading volume
and market liquidity, and is generally lower if a Fund’s shares have more
trading
volume and market liquidity and higher if a Fund’s shares have little trading
volume and market liquidity. Further, increased market volatility may
cause
increased bid/ask spreads. Shares of a Fund may trade at a wider bid/ask spread
than shares of traditional ETFs, and may therefore be more costly for
investors
to trade. Due to the costs of buying or selling shares, including bid/ask
spreads, frequent trading of shares may significantly reduce investment
results
and an investment in shares may not be advisable for investors who anticipate
regularly making small investments. Shares of a Fund, similar to shares
of
other issuers listed on a stock exchange, may be sold short and are therefore
subject to the risk of increased volatility and price decreases associated with
being
sold short.
Investment
Goals, Strategies and Risks
Small- and Mid-Capitalization Companies
Risk
Compared
to companies with large market capitalization, small- and mid-capitalization
companies are more likely to have limited product lines, markets or financial
resources, or to depend on a small, inexperienced management group. Securities
of these companies often trade less frequently and in limited volume
and their prices may fluctuate more than stocks of large-capitalization
companies. Securities of small- and mid-capitalization companies may
therefore
be more vulnerable to adverse developments than those of large-capitalization
companies. As a result, it may be relatively more difficult for a Fund
to
buy and sell securities of small- and mid-capitalization companies.
Proxy Portfolio Methodology
Unlike
a traditional ETF, a Fund does not disclose its portfolio holdings daily.
Rather, a Fund discloses a portfolio transparency substitute—the “Proxy
Portfolio”—and
certain related information about the relative performance of the Proxy
Portfolio and a Fund’s Actual Portfolio holdings, which are designed
to
facilitate an effective arbitrage mechanism for a Fund’s shares while protecting
the identity of a Fund’s full portfolio holdings. A Fund believes that daily
disclosure
of its full portfolio holdings could enable market participants to predict a
Fund’s trading strategy and trade ahead of a Fund’s portfolio trades (a
practice
known as “front-running”), or to copy a Fund’s investment strategy (a practice
known as “free riding”). The purpose of the proxy portfolio methodology,
as described below (the “Proxy Portfolio Methodology”) is to protect a Fund and
its shareholders against such practices. Although a Fund does not
publish its full portfolio holdings daily, the Proxy Portfolio Methodology is
designed to allow Authorized Participants and other market makers to assess
the
intraday value and associated risk characteristics of a Fund’s then-current
portfolio holdings (the “Actual Portfolio”).
An
important feature of the Proxy Portfolio Methodology is the daily disclosure of
a basket of cash and securities—the Proxy Portfolio—that is designed and
constructed
to closely track the daily performance of a Fund’s Actual Portfolio. In addition
to the Proxy Portfolio, a Fund discloses daily the percentage weight
overlap
between the holdings of the Proxy Portfolio and the Actual Portfolio that formed
the basis for a Fund’s calculation of NAV at the end of the prior Business
Day (the “Proxy Overlap”). Daily disclosure of the Proxy Portfolio, the Proxy
Overlap and the other related Proxy Portfolio Disclosures is designed to
enable
Authorized Participants and other market participants to accurately assess the
profitability of arbitrage trades in shares of a Fund and to effectively
hedge
their risks associated with arbitrage and market making activities, thereby
helping to ensure that investors can purchase and sell Fund shares in the
secondary
market at prices that are at or close to the underlying NAV per share of a
Fund.
Proxy Portfolio
The
goal of the Proxy Portfolio Methodology is to permit a Fund’s Proxy Portfolio,
during all market conditions, to track closely the daily performance of a
Fund’s
Actual Portfolio and to minimize intra-day misalignment between the performance
of the Proxy Portfolio and the performance of the Actual Portfolio. The
Proxy Portfolio is designed to reflect the economic exposures and the risk
characteristics of the Actual Portfolio on any given trading day.
Construction
of a Proxy Portfolio that replicates the daily performance of the Actual
Portfolio is achieved by performing a factor model analysis of a Fund’s
Actual
Portfolio. The factor model is comprised of three sets of factors or analytical
metrics: market-based factors, fundamental factors, and industry/sector
factors.
Each Fund has a universe of securities (the “Model Universe”) that is used to
generate the Fund’s Proxy Portfolio. The Model Universe is comprised of
securities
that the Fund can purchase and is a financial index or stated portfolio of
securities from which Fund investments are selected. The results of the
factor
model analysis of a Fund’s Actual Portfolio are then applied to a Fund’s model
universe of securities, resulting in the generation of a Proxy Portfolio,
which
consists of a small subset of the securities in the Model Universe. The Proxy
Portfolio is designed to perform in a manner substantially identical to the
performance
of the Actual Portfolio. The Proxy Portfolio only includes securities and
investments in which a Fund may invest. However, while the Proxy Portfolio
and the Actual Portfolio likely hold some or many of the same securities, the
Proxy Portfolio and a Fund’s Actual Portfolio do not include identical
securities.
The Proxy Portfolio is reconstituted daily.
Proxy Portfolio Disclosures
The
composition of the Proxy Portfolio is published on the Funds’ website at
im.natixis.com each Business Day and includes the following information for
each
portfolio holding in the Proxy Portfolio: (1) ticker symbol; (2) CUSIP or other
identifier; (3) description of holding; (4) quantity of each security or other
asset
held; and (5) percentage weight of the holding in the Proxy Portfolio. The
Funds’ website publishes on a daily basis, per share for each Fund, the prior
Business
Day’s NAV and the Closing Price or Bid/Ask Price (each as defined below), and a
calculation of the premium/discount of the Closing Price or Bid/Ask Price
against such NAV. The Funds’ website also publishes a variety of other
information metrics regarding the relative behavior of the Proxy Portfolio and
the Actual
Portfolio, including the Proxy Overlap (defined below). Additional information
about how the Proxy Portfolio and the Proxy Overlap are calculated can
be
found in the SAI and on the Funds’ website at im.natixis.com. The website also
includes Tracking Error for each Fund and, once a Fund has completed a
fiscal
year, the median bid/ask spread (expressed as a percentage rounded to the
nearest hundredth), will be computed by identifying the Fund’s National
Best
Bid and Offer as of the end of each ten second interval during each trading day
of the last thirty calendar days, dividing the difference between each
such
bid and offer by the midpoint of the National Best Bid and Offer and identifying
the median of these values. Additionally, the Funds are required to disclose
on their website a table showing the number of days the Funds’ shares traded at
a premium/discount and a line graph showing the Funds’ share premiums
or discounts during the most recently completed calendar year and the most
recently completed calendar quarters since that year (or the life of the
Funds).
The
Funds believe that the Proxy Portfolio Disclosures will enable Authorized
Participants and other market makers to use the component securities and their
weightings
of the Proxy Portfolio to calculate intraday values that approximate the value
of the securities in the Actual Portfolio and, based thereon, assess
whether
the market price of a Fund’s shares is higher or lower than the approximate
contemporaneous value of the Actual Portfolio. These activities are
Investment
Goals, Strategies and Risks
intended
to facilitate an arbitrage mechanism that keeps market prices of a Fund’s shares
at or close to a Fund’s NAV. Moreover, the Proxy Portfolio Disclosures
generated by the Proxy Portfolio Methodology are intended to facilitate
effective hedging activities by market makers, so that share market price
bid/ask
spreads will be narrow.
Below
are some definitions of the defined terms used above:
• |
Closing
Price – the official closing price of a Fund’s shares on a Fund’s primary
listing exchange. |
• |
Bid/Ask
Price – the midpoint of the highest bid and the lowest offer based upon
the National Best Bid and Offer as of the time of calculation of a Fund’s
NAV. |
• |
National
Best Bid and Offer – the current national best bid and national best offer
as disseminated by the Consolidated Quotation System or UTP Plan
Securities
Information Processor. |
• |
Proxy
Overlap – the percentage weight overlap between the holdings of the prior
Business Day’s Proxy Portfolio compared to the Actual Portfolio’s
holdings
that formed the basis for a Fund’s calculation of NAV at the end of the
prior Business Day. The Proxy Overlap is calculated based on the Proxy
Portfolio
and portfolio holdings as of the prior Business Day. The Proxy Overlap is
calculated by taking the lesser weight of each asset held in common
between
the Actual Portfolio and the Proxy Portfolio and adding the totals.
Additional information about how the Proxy Overlap is calculated can be
found on
a Fund’s website at im.natixis.com. |
• |
Tracking
Error - At the end of each trading day, a Fund calculates its Proxy
Overlap and the standard deviation over the past three months of the daily
proxy spread
(i.e., the difference, in percentage terms, between the Proxy Portfolio
per share NAV and that of the Actual Portfolio at the end of the trading
day) and
publish such information before the opening of Fund share trading each
Business Day. |
Shareholders
of a Fund should be aware of certain differences between investing in an ETF and
a mutual fund.
Redeemability
Mutual
fund shares may be bought from, and redeemed with, the issuing fund for cash at
NAV typically calculated once at the end of each business day. Shares
of a Fund, by contrast, cannot be purchased from or redeemed with the Fund
except by or through Authorized Participants and then typically for an
in-kind
basket of securities. In contrast, investors who are not Authorized Participants
purchase and sell shares generally for cash on a secondary market at the
prevailing
market price. In addition, a Fund issues and redeems shares on a continuous
basis only in large blocks of shares, typically 10,000 shares, called
Creation
Units.
Exchange Listings
Unlike
mutual funds, a Fund’s shares are listed on an exchange and traded in the
secondary market in the same manner as other equity securities and ETFs.
Investors
can purchase and sell individual shares of a Fund only on the secondary market
through a broker-dealer. A Fund’s shares may be less actively traded
in
certain markets than others, and investors are subject to the execution and
settlement risks and market standards of the market where they or their
broker-dealers
direct their trades for execution. Certain information (including an updated
Proxy Portfolio) available to investors who trade fund shares on a U.S.
stock
exchange during regular U.S. market hours may not be available to investors who
trade in other markets, which may result in secondary market prices in
such
markets being less efficient. Secondary market transactions do not occur at NAV,
but at market prices that change throughout the day, based on the supply
of, and demand for, shares of a Fund.
In-Kind Redemptions – Potential Benefits and
Limitations
Unlike
shares of many mutual funds that are only bought and sold at closing NAVs, the
shares of a Fund are created and redeemed principally in kind in Creation
Units at each day’s market close at a Fund’s NAV and tradable in a secondary
market on an intraday basis at prevailing market prices. These in kind
arrangements
will potentially mitigate adverse effects on a Fund’s portfolio that could arise
from frequent cash purchase and redemption transactions that continuously
affect the NAV of a Fund. These transactions may reduce transaction costs borne
by a Fund. Moreover, relative to mutual funds, where frequent redemptions
can have an adverse tax impact on taxable shareholders because of the need to
sell portfolio securities that, in turn, may generate taxable gain, a
Fund’s in-kind redemption mechanism is expected to reduce the need to sell
portfolio securities to meet redemption requests, and therefore may lessen the
taxable
gain generated by such sales of portfolio securities. A Fund may nevertheless be
required to sell certain securities from its Actual Portfolio, including
to
the extent the composition of the Actual Portfolio differs from that of the
Proxy Portfolio, prior to effecting an in-kind redemption to ensure it
distributes the proper
securities to Authorized Participants. Any such sales may generate taxable gain
or loss. A Fund cannot predict to what extent, if any, it will redeem its
shares
in kind rather than in cash; nor can a Fund predict the extent to which any such
in kind redemption will reduce the taxable gain recognized in connection
therewith. A Fund may still realize gains related to either cash redemptions or
rebalancing transactions which may need to be distributed.
Temporary Defensive Measures
Temporary
defensive measures may be used by a Fund during adverse economic, market,
political or other conditions. In this event, a Fund may hold any portion
of its assets in cash (U.S. dollars, foreign currencies or multinational
currency units) and/or invest in cash equivalents such as short-term U.S.
Treasury securities,
government money market funds and repurchase agreements as it deems appropriate.
A Fund may miss certain investment opportunities if it uses defensive
strategies and thus may not achieve its investment goal.
Percentage Investment Limitations
Except
as set forth in the SAI, the percentage limitations set forth in this Prospectus
and the SAI apply at the time an investment is made and shall not be
considered
violated unless an excess or deficiency occurs or exists immediately after and
as a result of such investment.
Actual Portfolio Holdings
A
description of each Fund’s policies and procedures with respect to the
disclosure of the securities in a Fund’s Actual Portfolio is available in the
section “Portfolio
Holdings Information” in the SAI.
A
“snapshot” of each Fund’s investments may be found in its annual and semiannual
reports. In addition, a list of each Fund’s full portfolio holdings, which is
updated
monthly after an aging period of at least 15 days for Natixis Vaughan Nelson
Select ETF and Natixis Vaughan Nelson Mid Cap ETF and quarterly after
an
aging period of at least 10 business days for Natixis U.S. Equity Opportunities
ETF, is available on the Funds’ website at im.natixis.com/us/funddocuments.
These
holdings will remain accessible on the website until each Fund files its
respective Form N-CSR or Form N-PORT with the SEC for the period that
includes
the date of the information. In addition, a list of Natixis Vaughan Nelson
Select ETF and Natixis Vaughan Nelson Mid Cap ETF top 10 holdings as of
the
month end is generally available within 7 business days after the month end on
the Funds’ website at im.natixis.com/holdings (click fund name).
Management
Team
Adviser
Natixis Advisors, LLC
(“Natixis Advisors”), located at 888 Boylston Street, Suite 800, Boston,
Massachusetts 02199-8197, serves as the adviser to the Funds.
Natixis Advisors oversees, evaluates, and monitors the subadvisory services
provided to the Funds. It also provides general business management and
administration
to the Funds. Natixis Advisors does not determine what investments will be
purchased or sold by the Funds. The subadvisers listed below make
the investment decisions for the Funds.
Subadvisers
The
Subadvisers have full investment discretion and make all determinations with
respect to the investment of the assets of the Funds, subject to the general
supervision
of the Funds’ Adviser and the Board of Trustees.
Harris Associates,
located at 111 S.Wacker Drive, Suite 4600, Chicago, Illinois 60606, serves as a
subadviser to the Natixis U.S. Equity Opportunities ETF. Harris
Associates, managed $124 billion in assets as of December 31, 2021, and,
together with its predecessor, has managed investments since 1976. It also
manages
investments for other mutual funds as well as assets of individuals, trusts,
retirement plans, endowments, foundations, and several private partnerships.
Loomis Sayles,
located at One Financial Center, Boston, Massachusetts 02111, serves as a
subadviser to the Natixis U.S. Equity Opportunities ETF. Founded in
1926, Loomis Sayles is one of the oldest investment advisory firms in the United
States with over $363.1 billion in assets under management as of December
31, 2021. Loomis Sayles has an extensive internal research
staff.
Vaughan Nelson,
located at 600 Travis Street, Suite 3800, Houston, Texas 77002, serves as
subadviser to the Natixis Vaughan Nelson Select ETF and Natixis
Vaughan Nelson Mid Cap ETF. Originally founded in 1970, Vaughan Nelson focuses
primarily on managing equity and fixed-income funds for clients who
consist of foundations, university endowments, corporate retirement plans and
family/individual funds. As of December 31, 2021, Vaughan Nelson had
$15.5
billion in assets under management.
The
following table shows the aggregate advisory and subadvisory fees paid by the
Funds during the fiscal year ended December 31, 2021 as a percentage of
the
Fund’s average daily net assets (after waiver):
|
|
Fund |
Aggregate
Advisory Fee |
Natixis
U.S. Equity Opportunities ETF |
0.00% |
Natixis
Vaughan Nelson Mid Cap ETF |
0.00% |
Natixis
Vaughan Nelson Select ETF |
0.00% |
Subadvisory
Agreements
Natixis
Advisors and the Natixis Funds have received an exemptive order from the SEC
(the “Order”), which permits Natixis Advisors, subject to approval by
the
Board of Trustees but without shareholder approval, to hire or terminate, and to
modify any existing or future subadvisory agreement with, subadvisers
that
are not affiliated with Natixis Advisors as well as subadvisers that are
indirect or direct wholly-owned subsidiaries of Natixis Advisors or of another
company
that, indirectly or directly, wholly owns Natixis Advisors. Before any Natixis
Fund can begin to rely on the exemptions described above, a majority of
the
shareholders of the Fund must approve the Fund’s ability to rely on the Order.
Shareholders of certain Natixis Funds have already approved the Fund’s
operation
under the manager-of-managers structure contemplated by the Order. If a new
subadviser is hired for a Fund, shareholders will receive information
about
the new subadviser within 90 days of the change.
A
discussion of the factors considered by the Board of Trustees in approving each
Fund’s investment advisory and subadvisory contracts is included in the
Fund’s
shareholder report for the period ended December 31, 2021.
The
Funds consider the series of Natixis Funds Trust I, Natixis Funds Trust II,
Natixis Funds Trust IV, Gateway Trust, Loomis Sayles Funds I, Loomis Sayles
Funds
II, Natixis ETF Trust and Natixis ETF Trust II, all of which are advised or
subadvised by Natixis Advisors, Loomis Sayles, AEW Capital Management, L.P.,
AlphaSimplex
Group, LLC, Gateway Investment Advisers, LLC, Mirova US LLC, Harris Associates
or Vaughan Nelson (collectively, the “Affiliated Investment Managers”),
to be part of the “same group of investment companies” under Section 12(d)(1)(G)
of the Investment Company Act of 1940, as amended (the “Investment
Company Act”) for the purchase of other investment companies. The Affiliated
Investment Managers are all under common control.
Portfolio
Trades
In
placing portfolio trades, Harris Associates, Loomis Sayles and Vaughan Nelson
may use brokerage firms that market the Funds’ shares, are Authorized
Participants,
or are affiliated with Natixis Advisors, Natixis Investment Managers LLC or any
subadviser. In placing trades, Harris Associates, Loomis Sayles and
Vaughan Nelson will seek to obtain the best combination of price and execution,
which involves a number of subjective factors. Such portfolio trades are
subject
to applicable regulatory restrictions and related procedures adopted by the
Board of Trustees.
The
following persons have had primary responsibility for the day-to-day management
of the applicable Fund’s portfolio since the dates stated below.
Harris Associates
William
C. Nygren, CFA®—William
C. Nygren has co-managed the Harris Associates segment of Natixis U.S. Equity
Opportunities ETF since 2020. Mr. Nygren,
Vice President, Chief Investment Officer, U.S. Equity and portfolio manager of
Harris Associates, joined the firm in 1983. Mr. Nygren received a B.S.
from
the University of Minnesota and an M.S. from the University of
Wisconsin-Madison. Mr. Nygren holds the designation of Chartered Financial
Analyst®
and
has over 40 years of investment experience.
M.
Colin Hudson, CFA®—M.
Colin Hudson has co-managed the Harris Associates segment of Natixis U.S. Equity
Opportunities ETF since 2020. Mr. Hudson, Vice
President, portfolio manager and analyst of Harris Associates, joined the firm
in 2005. Mr. Hudson received a B.A. from DePauw University, and an M.S.
and
an M.B.A. from Indiana University. Mr. Hudson holds the designation of Chartered
Financial Analyst®
and has over 23 years of investment experience.
Michael
J. Mangan, CFA®
– Michael J. Mangan has co-managed the Harris Associates segment of Natixis U.S.
Equity Opportunities ETF since 2020. Mr. Mangan,
a portfolio manager of Harris Associates joined the firm in 1997. Mr. Mangan
received a B.B.A. from the University of Iowa and an M.B.A. from Northwestern
University. Mr. Mangan is a CPA, holds the designation of Chartered Financial
Analyst®
and has over 32 years of investment experience.
Michael
A. Nicolas, CFA®
— Michael A. Nicolas has co-managed the Harris Associates segment of Natixis
U.S. Equity Opportunities ETF since 2020. Mr. Nicolas,
portfolio manager and analyst of Harris Associates, joined the firm in 2013. Mr.
Nicolas received a B.A. from the University of Wisconsin-Madison. Mr.
Nicolas holds the designation of Chartered Financial Analyst®
and has over 18 years of investment experience.
Loomis Sayles
Aziz
V. Hamzaogullari, CFA®—
Aziz V. Hamzaogullari is the Chief Investment Officer and Founder of the Growth
Equity Strategies Team at Loomis Sayles. He has
managed the Loomis Sayles segment of the Natixis U.S. Equity Opportunities ETF
since 2020. Mr. Hamzaogullari is an Executive Vice President and Director
of Loomis Sayles. He received a B.S. in management from Bilkent University in
Turkey and an M.B.A. from George Washington University. He holds the
designation of Chartered Financial Analyst®
and has over 28 years of investment industry experience.
Vaughan Nelson
Dennis
G. Alff, CFA®—Dennis
G. Alff has co-managed the Natixis Vaughan Nelson Mid Cap ETF since 2020. Mr.
Alff, a Lead Senior Portfolio Manager of Vaughan
Nelson, joined the firm in 2006. Mr. Alff received a B.S. from the United States
Military Academy and an M.B.A. from Harvard Business School. Mr. Alff
holds the designation of Chartered Financial Analyst®
and has over 25 years of investment management and research
experience.
Chad
D. Fargason—Chad D. Fargason has co-managed the Natixis Vaughan Nelson Mid Cap
ETF since 2020. Dr. Fargason, Senior Portfolio Manager of Vaughan
Nelson, joined the firm in 2013. Prior to joining the firm Dr. Fargason was a
Director at KKR & Co. Dr. Fargason received a Ph.D. from Duke University,
M.A. from Duke University and a B.A. from Rice University. Dr. Fargason has over
22 years investment management and research experience.
Chris
D. Wallis, CFA®—Chris
D. Wallis has co-managed the Natixis Vaughan Nelson Select ETF and Natixis
Vaughan Nelson Mid Cap ETF since 2020. Mr. Wallis,
Chief Executive Officer and a Lead Senior Portfolio Manager of Vaughan Nelson,
joined the firm in 1999. Mr.Wallis received a B.B.A. from Baylor University
and an M.B.A. from Harvard Business School. Mr. Wallis holds the designation of
Chartered Financial Analyst®
and has over 30 years of investment/financial
analysis and accounting experience.
Scott
J. Weber, CFA®—Scott
J. Weber has co-managed the Natixis Vaughan Nelson Select ETF since 2020. Mr.
Weber, a Lead Senior Portfolio Manager of Vaughan
Nelson, joined the firm in 2003. Mr. Weber received a B.S. from the University
of the South and an M.B.A. from Tulane University. He holds the designation
of Chartered Financial Analyst®
and has over 26 years of investment management and financial analysis
experience.
Please
see the SAI for information on portfolio manager compensation, other accounts
under management by the portfolio managers and the portfolio managers’
ownership of securities in the Funds.
Administrator.
Natixis Advisors, 888 Boylston Street, Suite 800, Boston, Massachusetts 02199,
serves as the Funds’ administrator and performs certain accounting
and administrative services for the Funds.
Distributor.
ALPS Distributors, Inc. (“ALPS”), 1290 Broadway, Suite 1000, Denver, Colorado
80203, serves as the Distributor of Creation Units for the Funds on an
agency basis. The Distributor will deliver a prospectus to Authorized
Participants purchasing Shares in Creation Units and will maintain records of
both orders
placed with it and confirmations of acceptance furnished by it to Authorized
Participants. The Distributor does not maintain a secondary market in
shares
of the Funds. The Distributor has no role in determining the investment policies
of the Funds or which securities are to be purchased or sold by the Funds.
The Adviser has entered into an agreement with ALPS under which it makes
payments to ALPS in consideration for its services under the Distribution
Agreement.
The payments made by the Adviser to ALPS do not represent an additional expense
to the Funds or its shareholders.
Custodian.
State Street Bank and Trust Company (“State Street Bank”), One Lincoln Street,
Boston, Massachusetts 02111, serves as the Custodian for the Funds.
Transfer Agent.
State Street Bank, One Lincoln Street, Boston, Massachusetts 02111, acts as
shareholder servicing and transfer agent for the Funds.
Primary Listing Exchange.
The shares of the Funds are listed for trading on the NYSE Arca, a national
securities exchange.
Research Vendor.
The NYSE Group, Inc., 11 Wall Street, New York, New York 10005, is a
wholly-owned subsidiary of NYSE Holdings LLC, which is itself an indirect
subsidiary of Intercontinental Exchange, Inc. NYSE Group is the parent company
of, among others, entities that are registered national securities exchanges.
The NYSE Proxy Portfolio Methodology, the New York Stock Exchange’s proprietary
methodology for operating an actively managed, periodically disclosed
ETF, is owned by the NYSE Group, Inc. and licensed for use to Natixis Advisors.
The license agreement related to the Funds does not and will not mandate
that the ETFs’ shares be listed on an NYSE Group exchange.
The
Funds enter into contractual arrangements with various parties, including, among
others, the Adviser, the Subadviser, the Authorized Participants, the
Distributor
and the Funds’ Custodian and Transfer Agent, who provide services to the Funds.
Shareholders are not parties to, or intended to be third-party beneficiaries
of, any of those contractual arrangements, and those contractual arrangements
are not intended to create in any individual shareholder or group of
shareholders any right to enforce such arrangements against the service
providers or to seek any remedy thereunder against the service providers, either
directly
or on behalf of a Fund.
This
Prospectus provides information concerning the Funds that you should consider in
determining whether to purchase shares of a Fund. None of this Prospectus,
the SAI or any contract that is an exhibit to the Funds’ registration statement,
is intended to, nor does it, give rise to an agreement or contract between
a Fund and any investor, or give rise to any contract or other rights in any
individual shareholder, group of shareholders or other person other than
any
rights conferred explicitly by applicable federal or state securities laws that
may not be waived.
Shares
of a Fund may be acquired or redeemed directly from the Fund only in Creation
Units or multiples thereof, as discussed in the “Creations and Redemptions”
section of this Prospectus. Only an Authorized Participant may engage in
creation or redemption transactions directly with a Fund. An Authorized
Participant is either a “participating party” (i.e.,
a broker-dealer or other participant in the clearing process through the
Continuous Net Settlement System
of the National Securities Clearing Corporation) or a Depository Trust Company
(“DTC”) participant, in either case, who has executed an agreement with
the Distributor, and accepted by the Transfer Agent, with respect to creations
and redemptions of Creation Units. Once created, shares of the Fund generally
trade in the secondary market in amounts less than a Creation
Unit.
Most
investors will buy and sell shares of a Fund in secondary market transactions
through broker-dealers. Shares of a Fund are listed for trading on a
national
securities exchange during the trading day. Shares can be bought and sold
throughout the trading day like shares of other publicly traded companies.
However,
there can be no guarantee that an active trading market will develop or be
maintained, or that the Fund shares listing will continue or remain unchanged.
A Fund does not impose any minimum investment for shares of a Fund purchased on
an exchange. Buying or selling a Fund’s shares involves certain
costs that apply to all securities transactions. When buying or selling shares
of a Fund through a financial intermediary, you may incur a brokerage
commission
or other charges determined by your financial intermediary. Due to these
brokerage costs, if any, frequent trading may detract significantly from
investment
returns. In addition, you may also incur the cost of the spread (the difference
between the bid price and the ask price of a Fund’s shares). The commission
is frequently a fixed amount and may be a significant cost for investors seeking
to buy or sell small amounts of Fund shares. The spread varies over
time for shares of a Fund based on its trading volume and market liquidity, and
is generally narrower if a Fund has more trading volume and market liquidity
and wider if a Fund has less trading volume and market liquidity. The Funds have
the potential for wider spreads given their non-transparent structure,
especially during periods of market stress or volatility. Shares of the Funds trade on an exchange at prices
that may differ to varying degrees from the daily NAV of the shares.
The
Funds’ primary listing exchange is the NYSE Arca. The NYSE Arca is open for
trading Monday through Friday and is closed on the following holidays: New
Year’s
Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,
Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day.
A
“Business Day” with respect to a Fund is each day a Fund is open and includes
any day that a Fund is required to be open under Section 22(e) of the
Investment
Company Act. Orders from Authorized Participants to create or redeem Creation
Units will only be accepted on a Business Day. On days when the NYSE
Arca closes earlier than normal, a Fund may require orders to create or redeem
Creation Units to be placed earlier in the day. Please see the SAI for
more
information.
Section
12(d)(1) of the Investment Company Act restricts investments by registered
investment companies and companies relying on Section 3(c)(1) or Section
3(c)(7)
of the Investment Company Act in the securities of other investment companies.
Registered investment companies are permitted to invest in a Fund beyond
the limits set forth in Section 12(d)(1) subject to certain terms and conditions
set forth in an SEC exemptive order covering a Fund, including that such
investment
companies enter into an agreement with a Fund.
The
Board of Trustees has not adopted a policy of monitoring for frequent purchases
and redemptions of Fund shares (“frequent trading”) that appear to attempt
to take advantage of potential arbitrage opportunities presented by a lag
between a change in the value of a Fund’s portfolio securities after the
close
of the primary markets for a Fund’s portfolio securities and the reflection of
that change in the Fund’s NAV (“market timing”). A Fund believes this is
appropriate
because ETFs, such as the Funds, are intended to be attractive to arbitrageurs,
as trading activity is critical to ensuring that the market price of
Fund
shares remains at or close to NAV. Since a Fund issues and redeems Creation
Units at NAV plus applicable transaction fees, and a Fund’s shares may be
purchased
and sold on the NYSE Arca at prevailing market prices, the risks of frequent
trading are limited.
Rule 12b-1 Fees
While
there are no current plans to charge Rule 12b-1 fees, each Fund has adopted a
Rule 12b-1 Plan under which a Fund is authorized to pay distribution
and/or
service fees to the Funds’ Distributor and other firms that provide distribution
and shareholder services. Rule 12b-1 fees that are paid to the Funds’
Distributor
may be used by the Distributor for expenses relating to the distribution of, and
shareholder or administrative services for holders of, shares, and for
the payment of service fees that come within Rule 2341(d) of the Conduct Rules
of the Financial Industry Regulatory Authority.
Because
Rule 12b-1 fees may be paid out of a Fund’s assets on an ongoing basis, over
time they may increase the cost of your investment and may cost shareholders
more than other types of sales charges. Currently, no Rule 12b-1 fees are
charged.
The
Adviser or its affiliates may make payments to broker-dealers, registered
investment advisers, banks or other intermediaries (together “intermediaries”)
related
to marketing activities and presentations, educational training programs,
conferences, the development of technology platforms and reporting systems,
or their making shares of the Funds and certain other Natixis funds available to
their customers generally and in certain investment programs. Such payments,
which may be significant to the intermediary, are not made by a Fund. Rather,
such payments are made by the Adviser or its affiliates from their own
resources, which come directly or indirectly in part from fees paid by the
Natixis funds complex. Payments of this type are sometimes referred to as
revenue
sharing payments. A financial intermediary may make decisions about which
investment options it recommends or makes available, or the level of
services
provided, to its customers based on the payments it is eligible to receive.
Therefore, such payments to an intermediary create conflicts of interest
between
the intermediary and its customers and may cause the intermediary to recommend
the Fund or other Natixis funds over another investment. More information
regarding these payments is contained in the Funds’ SAI. Please contact your
salesperson or other investment professional for more information regarding
any such payments his or her firm may receive from the Adviser or its
affiliates.
The
trading prices of a Fund’s shares in the secondary market generally differ from
a Fund’s daily NAV and are affected by market forces such as the supply of
and
demand for shares of a Fund and shares of underlying securities held by a Fund,
economic conditions and other factors. It is possible that a Fund will
trade
with a larger premium/discount because of its non-transparent structure, and
this risk may increase during times of market stress or volatility. The
quotations
of certain Fund holdings may not be updated during U.S. trading hours if such
holdings do not trade in the United States.
NAV
is the price of one share of a Fund without a sales charge, and is calculated
each business day using this formula:
The
NAV of Fund shares is determined pursuant to policies and procedures approved by
the Board of Trustees, as summarized below:
• |
A
share’s NAV is determined at the close of regular trading on the NYSE on
the days the NYSE is open for trading. This is normally 4:00 p.m., Eastern
time. A
Fund’s shares will not be priced on the days on which the NYSE is closed
for trading. In addition, a Fund’s shares will not be priced on the
holidays listed in
the SAI. See the section “Net Asset Value” in the SAI for more
details. |
• |
The
price that an Authorized Participant pays for purchasing or redeeming
shares in Creation Units will be based upon the NAV next calculated after
an order
is received by the Transfer Agent “in good order” (meaning that the order
is complete and contains all necessary
information). |
• |
Requests
received by the Transfer Agent in good order during a trading window that
is open after the NYSE closes will be processed based upon the NAV
determined
at the close of regular trading on the next day that the NYSE is open. If
the Transfer Agent receives the order in good order during a trading
window
that is open prior to the NYSE market close, the shareholder will receive
that day’s NAV. See the section “Creations and Redemptions” in the SAI
for
more details. |
• |
If
a Fund invests in securities that trade on non-U.S. markets, it may
experience NAV changes on days when you cannot buy or sell its
shares. |
Fund
securities and other investments for which market quotations are readily
available, as outlined in the Funds’ policies and procedures, are valued at
market
value. The Funds may use independent pricing services recommended by the Adviser
and approved by the Board of Trusteesto obtain market quotations
and other valuation information, such as evaluated bids. Generally, Fund
securities and other investments are valued as follows:
• |
Equity securities (including shares of
closed-end investment companies and ETFs), exchange traded notes, rights
and warrants
— listed equity
securities are valued at the last sale price quoted on the exchange where
they are traded most extensively or, if there is no reported sale during
the day,
the closing bid quotation as reported by an independent pricing service.
Securities traded on the NASDAQ Global Select Market, NASDAQ Global
Market
and NASDAQ Capital Market are valued at the NASDAQ Official Closing Price
(“NOCP”), or if lacking an NOCP, at the most recent bid quotations
on
the applicable NASDAQ Market. Unlisted equity securities (except unlisted
preferred equity securities discussed below) are valued at the last sale
price quoted
in the market where they are traded most extensively or, if there is no
reported sale during the day, the closing bid quotation as reported by an
independent
pricing service. If there is no sale price or closing bid quotation
available, unlisted equity securities will be valued using evaluated bids
furnished
by an independent pricing service, if available. In some foreign markets,
an official close price and a last sale price may be available from the
foreign
exchange or market. In those cases, the official close price is used.
Valuations based on information from foreign markets may be subject to the
Funds’
fair value policies described below. If a right is not traded on any
exchange, its value is based on the market value of the underlying
security, less the
cost to subscribe to the underlying security (e.g., to exercise the
right), adjusted for the subscription ratio. If a warrant is not traded on
any exchange, a price
is obtained from a broker-dealer. |
• |
Futures
— most recent settlement price on the exchange on which the Adviser
believes that, over time, they are traded most extensively. Valuations
based
on information from foreign markets may be subject to the Fund’s fair
value policies described below. |
• |
Debt securities
— evaluated bids furnished to the Fund by an independent pricing service
using market information, transactions for comparable securities
and various relationships between securities, if available, or bid prices
obtained from broker-dealers. |
Foreign
denominated assets and liabilities are translated into U.S. dollars based upon
the World Market or “WM-11” foreign exchange rates supplied by an independent
pricing service. Fund securities and other investments for which market
quotations are not readily available are valued at fair value as determined
in good faith by the Adviser and Subadviser pursuant to procedures approved by
the Board of Trustees. The Fund may also value securities and other
investments at fair value in other circumstances such as when extraordinary
events occur after the close of a foreign market but prior to the close of the
NYSE.
This may include situations relating to a single issuer (such as a declaration
of bankruptcy or a delisting of the issuer’s security from the primary
market
on which it has traded) as well as events affecting the securities markets in
general (such as market disruptions or closings and significant fluctuations
in U.S. and/or foreign markets).
Fair
value pricing may require subjective determinations about the value of a
security, and fair values used to determine a Fund’s NAV may differ from quoted
or
published prices, or from prices that are used by others, for the same
securities. In addition, the use of fair value pricing may not always result in
adjustments
to the prices of securities held by a Fund. Valuations for securities traded in
the over-the-counter market may be based on factors such as market information,
transactions for comparable securities, and various relationships between
securities or bid prices obtained from broker-dealers. Evaluated prices
from
an independent pricing service may require subjective determinations and may be
different than actual market prices or prices provided by other pricing
services.
The Funds’ fair value policies and procedures and valuation practices may be
impacted as the Funds come into compliance with Rule 2a-5 under the Investment
Company Act. Among other things, Rule 2a-5 will permit the Board of Trustees to
designate the Adviser to perform the Funds’ fair value determinations,
subject to Board oversight and other requirements.
A
Fund pays distributions from its investment income and from net realized capital
gains.
Distributions
from net investment income and distributions from net capital gains, if any, are
declared and paid as follows:
|
|
|
|
|
Investment
Income Dividends |
Capital
Gains Distributions |
|
Declared |
Paid |
Declared and Paid |
Natixis
U.S. Equity Opportunities ETF |
Annually |
Annually |
Annually |
Natixis
Vaughan Nelson Mid Cap ETF |
Annually |
Annually |
Annually |
Natixis
Vaughan Nelson Select ETF |
Annually |
Annually |
Annually |
Dividends
and other distributions on shares of a Fund are distributed on a pro rata basis
to beneficial owners of such shares. Dividend payments are made through
DTC participants and indirect participants (each as described in the “Book
Entry” section below) to beneficial owners then of record with proceeds
received
from a Fund.
No
dividend reinvestment service is provided by the Funds. Broker-dealers may make
available the DTC book-entry dividend reinvestment service for use by
beneficial
owners of a Fund for reinvestment of their dividend distributions. Beneficial
owners should contact their broker to determine the availability and
costs
of the service and the details of participation therein. Brokers may require
beneficial owners to adhere to specific procedures and timetables. If this
service
is available and used, dividend distributions of both income and realized gains
will be automatically reinvested in additional whole shares of a Fund
purchased
in the secondary market.
DTC
serves as securities depository for the shares. (The shares may be held only in
book-entry form; stock certificates will not be issued.) DTC, or its nominee,
is
the record or registered owner of all outstanding shares. Beneficial ownership
of shares will be shown on the records of DTC or its participants (described
below).
Beneficial owners of shares are not entitled to have shares registered in their
names, will not receive or be entitled to receive physical delivery of
certificates
in definitive form and are not considered the registered holder thereof.
Accordingly, to exercise any rights of a holder of shares, each beneficial
owner
must rely on the procedures of: (i) DTC; (ii) “DTC participants” (i.e.,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain
other organizations, some of whom (and/or their representatives) own DTC); and
(iii) “indirect participants” (i.e.,
brokers, dealers, banks and trust companies
that clear through or maintain a custodial relationship with a DTC participant),
either directly or indirectly, through which such beneficial owner holds
its interests. A Fund understands that under existing industry practice, in the
event a Fund requests any action of holders of shares, or a beneficial
owner
desires to take any action that DTC, as the record owner of all outstanding
shares, is entitled to take, DTC would authorize the DTC participants to take
such
action and that the DTC participants would authorize the indirect participants
and beneficial owners acting through such DTC participants to take such
action
and would otherwise act upon the instructions of beneficial owners owning
through them. As described above, a Fund recognizes DTC or its nominee
as
the owner of all shares for all purposes.
Prior
to trading in the secondary market, shares of a Fund are “created” at NAV by
market makers, large investors and institutions only in block-size Creation
Units
of 10,000 shares or multiples thereof. Each “creator” or Authorized Participant
enters into an Authorized Participant agreement with the Fund’s Distributor.
A
creation transaction order, which is subject to acceptance by the Distributor,
generally takes place when an Authorized Participant deposits into a Fund a
designated
portfolio of securities (including any portion of such securities for which cash
may be substituted) and a specified amount of cash in exchange for a
specified number of Creation Units. The names and quantities of the instruments
that constitute basket of securities in exchange for which the Fund issues
or
redeems shares will generally be the same as the Fund’s Proxy Portfolio, except
to the extent purchases and redemptions are made entirely or in part on a
cash
basis. In addition, a Fund may determine to use baskets that differ from the
Proxy Portfolio in that they include instruments that are not in the Proxy
Portfolio,
or are included in the Proxy Portfolio but in different weightings. A Fund may
decide to use such a “custom basket” to reduce costs, to increase trading
or tax efficiency or for other reasons.
Similarly,
shares can be redeemed only in Creation Units, generally for a designated
portfolio of securities (including any portion of such securities for which
cash
may be substituted) and a specified amount of cash. Except when aggregated in
Creation Units, shares are not redeemable by a Fund.
The
prices at which creations and redemptions occur are based on the next
calculation of NAV after a creation or redemption order is received in an
acceptable
form under the Authorized Participant agreement. These prices may differ from
the market price of a Fund’s shares.
Only
an Authorized Participant may create or redeem Creation Units directly with a
Fund. In the event of a system failure or other interruption, including
disruptions
at market makers or Authorized Participants, orders to purchase or redeem
Creation Units either may not be executed according to a Fund’s instructions
or may not be executed at all, or a Fund may not be able to place or change
orders.
When
a Fund engages in in kind transactions, the Fund intends to comply with the U.S.
federal securities laws in accepting securities for deposit and satisfying
redemptions with redemption securities by, among other means, assuring that any
securities accepted for deposit and any securities used to satisfy redemption
requests will be sold in transactions that would be exempt from registration
under the Securities Act of 1933, as amended (“Securities Act”). Further,
an Authorized Participant that is not a “qualified institutional buyer,” as such
term is defined under Rule 144A of the Securities Act, will not be able
to
receive restricted securities eligible for resale under Rule 144A.
Creations
and redemptions must be made through a firm that is either a member of the
Continuous Net Settlement System of the National Securities Clearing
Corporation
or a DTC participant and has executed an agreement with the Distributor with
respect to creations and redemptions of Creation Unit aggregations.
A Fund imposes a creation transaction fee and a redemption transaction fee to
offset transfer and other transaction costs associated with the issuance
and redemption of Creation Units. Information about the procedures regarding
creation and redemption of Creation Units (including the cut-off times
for
receipt of creation and redemption orders) and the applicable transaction fees
are included in the Funds’ SAI.
Your
broker-dealer or agent may charge you a fee to effect transactions in Fund
shares.
Except
as noted, the discussion below addresses only the U.S. federal income tax
consequences of an investment in the Funds and does not address any non-U.S.,
state or local tax consequences.
Each
Fund intends to meet all requirements under Subchapter M of the Internal Revenue
Code of 1986, as amended (the “Code”), necessary to qualify and be eligible
for treatment each year as a “regulated investment company” and thus does not
expect to pay any U.S. federal income tax on income and capital gains
that are timely distributed to shareholders.
Unless
otherwise noted, the discussion below, to the extent it describes
shareholder-level tax consequences, pertains solely to taxable
shareholders.
Taxation of Distributions from the
Funds.
For U.S. federal income tax purposes, distributions of investment income are
generally taxable to Fund shareholders
as ordinary income. Taxes on distributions of capital gains are determined by
how long a Fund owned (or is deemed to have owned) the investments
that generated them, rather than how long a shareholder has owned his or her
shares. Distributions attributable to the excess of net long-term capital
gains from the sale of investments that a Fund owned (or is deemed to have
owned) for more than one year over net short-term capital losses from the
sale
of investments that a Fund owned (or is deemed to have owned) for one year or
less, and that are properly reported by the Fund as capital gain dividends
(“Capital
Gain Dividends”) generally will be taxable to a shareholder receiving such
distributions as long-term capital gain includible in net capital gain and
taxed
to individuals at reduced rates. Distributions attributable to the excess of net
short-term capital gains from the sale of investments that a Fund owned
(or
is deemed to have owned) for one year or less over net long-term capital losses
from the sale of investments that a Fund owned (or is deemed to have
owned)
for more than one year, will be taxable as ordinary income.
Distributions
of investment income properly reported by a Fund as derived from “qualified
dividend income” will be taxed in the hands of individuals at the reduced
rates applicable to net capital gain, provided holding period and other
requirements are met at both the shareholder and Fund levels. Income
generated
by investments in fixed-income securities, derivatives and REITs generally is
not eligible for treatment as qualified dividend income. Dividends received
by a Fund from foreign corporations that are not eligible for the benefits of a
comprehensive income tax treaty with the U.S. (other than dividends paid
on stock of such a foreign corporation that is readily tradable on an
established securities market in the U.S.) will not be eligible for treatment as
qualified
dividend income.
A
3.8% Medicare contribution tax is imposed on the net investment income of
certain individuals, trusts and estates to the extent their income exceeds
certain
threshold amounts. Net investment income generally includes for this purpose
dividends, including any Capital Gain Dividends paid by a Fund, and net
capital
gains recognized on the sale, redemption, exchange or other taxable disposition
of shares of a Fund.
Fund
distributions are taxable whether shareholders receive them in cash or reinvest
them in additional shares. In addition, Fund distributions are taxable to
shareholders
even if they are paid from income or gains earned by a Fund before a
shareholder’s investment (and thus were included in the price the shareholder
paid for his or her shares). Such distributions are likely to occur in respect
of shares purchased at a time when the Fund’s NAV reflects gains that
are
either unrealized or realized but not distributed.
Dividends
and distributions declared by a Fund and payable to shareholders of record in
October, November or December of one year and paid in January of the
next year generally are taxable in the year in which the distributions are
declared, rather than the year in which the distributions are
received.
Dividends
derived from interest on securities issued by the U.S. government or its
agencies or instrumentalities, if any, may be exempt from state and local
income
taxes. Each Fund will advise shareholders annually of the proportion of its
dividends that are derived from such interest.
Dividends
derived from interest on securities issued by the U.S. government or its
agencies or instrumentalities, if any, may be exempt from state and local
income
taxes. Each Fund will advise shareholders annually of the proportion of its
dividends that are derived from such interest. Distributions by a Fund to
retirement
plans and other investors that qualify for tax-advantaged treatment under U.S.
federal income tax laws generally will not be taxable, although distributions
by retirement plans to their participants may be taxable. Special tax rules
apply to investments through such retirement plans. If your investment
is
through such a plan, you should consult your tax adviser to determine the
suitability of the Funds as an investment through your plan and the tax
treatment of
distributions to you (including distributions of amounts attributable to an
investment in a Fund) from the plan.
Redemption, Sale or Exchange of Fund
Shares.
A redemption, sale or exchange of Fund shares (including an exchange of Fund
shares for shares of another
Natixis Fund or Loomis Sayles Fund) is a taxable event and generally will result
in recognition of gain or loss. Gain or loss, if any, recognized by a
shareholder
on a redemption, sale, exchange or other taxable disposition of Fund shares
generally will be taxed as long-term capital gain or loss if the shareholder
held the shares for more than one year, and as short-term capital gain or loss
if the shareholder held the shares for one year or less, assuming in
each
case that the shareholder held the shares as capital assets. Short-term capital
gains generally are taxed at the rates applicable to ordinary income. Any
loss
realized upon a disposition of shares held for six months or less will be
treated as long-term, rather than short-term, capital loss to the extent of any
Capital
Gain Dividends received by the shareholder with respect to the shares. The
deductibility of capital losses is subject to limitations.
Taxation of Certain Fund
Investments.
A Fund’s investments in foreign securities may be subject to foreign withholding
and other taxes. In that case, the Fund’s
yield on those securities would be decreased. If a Fund invests more than 50% of
its assets in foreign securities, it generally may elect to permit shareholders
to claim a credit or deduction on their income tax returns with respect to
foreign taxes paid by the Fund. In addition, a Fund’s investments in
foreign
securities and foreign currencies may be subject to special tax rules that have
the effect of increasing or accelerating the Fund’s recognition of ordinary
income and may affect the timing or amount of the Fund’s
distributions.
A
Fund’s investments in certain debt obligations (such as those issued with “OID”
or having accrued market discount, in each case as described in the SAI),
mortgage-backed
securities, asset-backed securities, REITs and derivatives may cause the Fund to
recognize taxable income in excess of the cash generated by
such investments. Thus, a Fund could be required to liquidate investments,
including at times when it is not advantageous to do so, in order to satisfy the
distribution
requirements applicable to regulated investment companies under the Code. In
addition, a Fund’s investments in derivatives may affect the amount,
timing or character of distributions to shareholders. A Fund may at times
purchase debt instruments at a discount from the price at which they were
originally
issued, especially during periods of rising interest rates. For federal income
tax purposes, some or all of this market discount will, when recognized
as
income by a Fund, be included in such Fund’s ordinary income, and will be
taxable to shareholders as such when it is distributed.
Backup Withholding.
Each Fund is required in certain circumstances to apply backup withholding on
taxable dividends, redemption proceeds and certain other
payments that are paid to any shareholder who does not furnish to the Fund
certain information and certifications or who is otherwise subject to backup
withholding.
Please
see the SAI for additional information on the U.S. federal income tax
consequences of an investment in a Fund.
You
should consult your tax adviser for more information on your own situation,
including possible U.S. federal, state, local, foreign or other applicable
taxes.
Your
sale of Fund shares is a taxable transaction for U.S. federal income tax
purposes, and may also be subject to state and local taxes. When you sell your
shares,
you will generally recognize a capital gain or loss in an amount equal to the
difference between your adjusted tax basis in the shares and the amount
received.
Generally, this capital gain or loss is long-term or short-term depending on
whether your holding period exceeds one year, except that any loss realized
on shares held for six months or less will be treated as a long-term capital
loss to the extent of any capital gain dividends that were received on the
shares.
Additionally, any loss realized on a sale of shares of a Fund may be disallowed
under “wash sale” rules to the extent the shares disposed of are replaced
with other shares of the Fund within a period of 61 days beginning 30 days
before and ending 30 days after the date of disposition, including pursuant
to a dividend reinvestment in shares of the Fund. If disallowed, the loss will
be reflected in an adjustment to the basis of the shares acquired.
Non-U.S.
investors are generally not subject to U.S. withholding tax with respect to
capital gain dividends, short-term capital gain dividends and
interest-related
dividends, as defined in the SAI and subject to limitations set forth in the
SAI. With respect to distributions other than capital gain dividends,
short-term
capital gain dividends and interest-related dividends, non-U.S. shareholders are
generally subject to U.S. withholding tax as a rate of 30% (or lower
applicable
treaty rate). Non-U.S. investors may also be subject to estate tax with respect
to their Fund shares.
Legislation
passed by Congress requires reporting to you and the Internal Revenue Service
annually on Form 1099-B not only of the gross proceeds of Fund shares
you sell or redeem but also of their cost basis. Shareholders should contact
their intermediaries with respect to reporting of cost basis and available
elections
with respect to their accounts. You should carefully review the cost basis
information provided by the applicable intermediary and make any additional
basis holding period or other adjustments that are required when reporting these
amounts on your federal income tax returns.
Authorized
Participant Taxes on Creations and Redemptions of Created Units
Authorized
Participants should consult their tax advisors about the federal, state, local
or foreign tax consequences of purchasing and redeeming Creation Units
in a Fund.
Information
regarding how often the shares of a Fund traded on the NYSE Arca at a price
above (i.e.,
at a premium) or below (i.e.,
at a discount) the NAV of the
Fund during the most recently completed calendar year, and the most recently
completed calendar quarters since that year, as applicable, can be found at
im.natixis.com.
Information
regarding the contents of the Proxy Portfolio, and the percentage weight overlap
between the holdings of the Proxy Portfolio and a Fund’s Actual Portfolio
holdings that formed the basis for its calculation of NAV at the end of the
prior Business Day (the Portfolio Overlap), can be found at
im.natixis.com.
You
should be aware of certain legal risks unique to investors purchasing Creation
Units directly from a Fund. Because new Creation Units are issued and sold
by
a Fund on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. Broker-dealers and other persons are
cautioned
that some activities on their part may, depending on the circumstances, result
in their being deemed participants in a distribution in a manner that
could
render them statutory underwriters and subject them to the prospectus delivery
and liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks
them down into constituent shares, and sells such shares directly to customers,
or if it chooses to couple the creation of a supply of new shares with
an
active selling effort involving solicitation of secondary market demand for
shares. A determination of whether one is an underwriter for purposes of the
Securities
Act must take into account all the facts and circumstances pertaining to the
activities of the broker-dealer or its client in the particular case, and
the
examples mentioned above should not be considered a complete description of all
the activities that could lead to a categorization as an
underwriter.
Broker-dealers
who are not “underwriters” but are participating in a distribution of shares are
generally required to deliver a prospectus. This is because the prospectus
delivery exemption in Section 4(a)(3) of the Securities Act is not available in
respect of such transactions as a result of Section 24(d) of the Investment
Company Act. As a result, broker-dealer firms should note that dealers who are
not underwriters but are participating in a distribution (as contrasted
with ordinary secondary market transactions) and thus dealing with the shares
that are part of an overallotment within the meaning of Section 4(a)(3)(A)
of the Securities Act would be unable to take advantage of the prospectus
delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms
that
incur a prospectus delivery obligation with respect to shares are reminded that,
under Rule 153 of the Securities Act, a prospectus delivery obligation
under
Section 5(b)(2) of the Securities Act owed to an exchange member in connection
with a sale on the NYSE Arca is satisfied by the fact that the prospectus
is available at the NYSE Arca upon request. The prospectus delivery mechanism
provided in Rule 153 is only available with respect to transactions on
an exchange.
In
addition, certain affiliates of the Funds, the Adviser and the Subadvisers may
purchase and resell Fund shares pursuant to this Prospectus.
It
is also possible that, from time to time, Natixis Advisors, the Subadvisers or
their affiliates (including their directors, partners, trustees, managing
members, officers
and employees (collectively, the “Affiliates”)) may, subject to compliance with
applicable law, purchase and hold shares of a Fund. Increasing a Fund’s
assets may enhance liquidity, investment flexibility and diversification.
Natixis Advisors and its Affiliates reserve the right, subject to compliance
with applicable
law, to sell or redeem at any time some or all of the shares of a Fund acquired
for their own accounts. A large sale or redemption of shares of a Fund
by Natixis Advisors or its Affiliates could significantly reduce the asset size
of a Fund, which might have an adverse effect on a Fund’s liquidity,
investment
flexibility and portfolio diversification. Natixis Advisors seeks to consider
the effect of redemptions on a Fund and other shareholders in deciding
whether
to redeem its shares. For more information about conflicts of interest, see the
“Material Conflicts of Interest” section in the SAI.
The
following table sets forth historical performance information for all
discretionary accounts managed by Harris Associates, Loomis Sayles and Vaughan
Nelson
that have substantially similar investment objectives, policies, strategies,
risks and investment restrictions as the Funds (the “Composites”).
The
Composites data is provided to illustrate the past performance of Harris
Associates, Loomis Sayles and Vaughan Nelson in managing substantially similar
accounts
as measured against a specified market index and does not represent the
performance of the applicable Fund. The accounts in the Composites are
separate
and distinct from the Funds; their performance is not intended as a substitute
for a Fund’s performance and should not be considered a prediction of
the
future performance of a Fund or of Harris Associates, Loomis Sayles or Vaughan
Nelson.
Each
Composite’s returns were calculated on a total return basis, include all
dividends and interest, accrued income and realized and unrealized gains and
losses,
and assume the reinvestment of earnings. All returns reflect the deduction of
brokerage commissions and execution costs paid by the accounts, without
provision for federal or state income taxes. “Net of Fees” figures include all
fees and expenses paid by accounts in the Composite, other than custody
expenses,
which are not charged by the Subadviser. “Net of Fees” figures also reflect the
deduction of the fee rate applicable to each account in the Composite
for periods prior to April 1, 2015, and the deduction of the Subadviser’s
standard fee rate for all accounts in the Composite (which is the highest
fee
rate paid by any account in the Composite) for periods since April 1, 2015. The
accounts in each Composite are subject to lower expenses than those of
the
applicable Fund, and the deduction of the Fund’s expenses would lower the “Net
of Fees” performance of the Composite. The Composites include all actual
discretionary accounts managed by Harris Associates, Loomis Sayles and Vaughan
Nelson for at least one full month that have investment objectives, policies,
strategies, risks and investment restrictions substantially similar to those of
the applicable Fund. The Composites may include both tax-exempt and taxable
accounts.
Securities
transactions are accounted for on trade date and accrual accounting is utilized.
Cash and equivalents are included in performance returns. Monthly returns
of the Composite combine the individual accounts’ returns (calculated on a
time-weighted rate of return basis that is revalued daily) by asset weighting
each account’s asset value as of the beginning of the month. Investors should be
aware that the performance information shown below was calculated
differently than the methodology mandated by the SEC for registered investment
companies.
The
accounts that are included in the Composites may not be subject to the
diversification requirements, specific tax restrictions and investment
limitations imposed
on the Funds by the Investment Company Act of 1940 or Subchapter M of the
Internal Revenue Code. Consequently, the performance results for each
Composite
would have been less favorable had it been regulated as an investment company
under the federal securities laws.
The
returns set forth below are provided to illustrate the past performance of
Harris Associates, Loomis Sayles and Vaughan Nelson in managing substantially
similar accounts and should not be interpreted as indicative of the future
results that may be achieved by the applicable Fund. Past results are
not
necessarily indicative of future results. In addition, the results presented
below may not necessarily equate with the return experienced by any particular
investor
as a result of the timing of investments and redemptions, market conditions and
other factors. In addition, the effect of taxes on any investor will
depend
on such person’s tax status, and the results have not been reduced to reflect
any income tax that may have been payable.
The
table below shows the annual total returns for the Composites, and a broad-based
securities market index for periods ended December 31, 2021.
|
|
|
|
|
|
Average
Annual Total Returns (for the periods ended December 31, 2021) |
Past
1 Year |
Past
3 Years |
Past
5 Years |
Past
10 Years |
Since
Inception (7/25/97) |
Harris
Composite (Net of Fees) |
31.75% |
24.09% |
15.65% |
16.24% |
9.09% |
Harris
Composite (Gross of Fees) |
32.43% |
24.74% |
16.25% |
16.82% |
9.71% |
S&P
500 Total Return |
28.71% |
26.07% |
18.47% |
16.55% |
8.89% |
|
|
|
|
|
|
Average
Annual Total Returns (for the periods ended December 31, 2021) |
Past
1 Year |
Past
3 Years |
Past
5 Years |
Past
10 Years |
Since
Inception (7/1/2006) |
Loomis
Sayles Composite (Net of Fees) |
16.94% |
26.62% |
21.77% |
19.11% |
14.82% |
Loomis
Sayles Composite (Gross of Fees) |
17.52% |
27.25% |
22.38% |
19.66% |
15.38% |
Russell
3000 Growth Index |
25.85% |
33.21% |
24.56% |
19.39% |
13.68% |
|
|
|
|
|
|
Average
Annual Total Returns (for the periods ended December 31, 2021) |
Past
1 Year |
Past
3 Years |
Past
5 Years |
Past
10 Years |
Since
Inception (6/30/06) |
Vaughan
Nelson Mid Cap Composite (Net of Fees) |
21.38% |
20.79% |
11.02% |
12.30% |
9.28% |
Vaughan
Nelson Mid Cap Composite (Gross of Fees) |
22.40% |
21.80% |
11.96% |
13.26% |
10.24% |
Russell
Midcap Value Index |
28.34% |
19.62% |
11.22% |
13.44% |
9.30% |
|
|
|
|
|
|
Average
Annual Total Returns (for the periods ended December 31, 2021) |
Past
1 Year |
Past
3 Years |
Past
5 Years |
Past
10 Years |
Since
Inception (6/30/09) |
Vaughan
Nelson Select Composite (Net of Fees) |
39.26% |
28.51% |
20.37% |
17.07% |
17.80% |
Vaughan
Nelson Select Composite (Gross of Fees) |
40.61% |
29.78% |
21.57% |
18.24% |
18.98% |
S&P
500®
Index |
28.71% |
26.07% |
18.47% |
16.55% |
16.38% |
The
financial highlights tables are intended to help you understand each Fund’s
financial performance for the last five years (or, if shorter, the period of the
Fund’s
operations). Certain information reflects financial results for a single Fund
share. The total returns in the table represent the return that an investor
would
have earned (or lost) on an investment in a Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by PricewaterhouseCoopers,
LLP, an independent registered public accounting firm, whose report, along with
each Fund’s financial statements, is included in the Funds’
annual report to shareholders. The annual
report
is incorporated by reference into the SAI, both of which are available free of
charge upon request from
the Distributor.
For a share outstanding throughout each
period.
Natixis U.S. Equity Opportunities
ETF
|
|
|
|
|
|
Natixis U.S. Equity Opportunities
ETF |
|
Year
Ended December 31, 2021 |
Period
Ended December 31, 2020* |
Net
asset value, beginning of the period |
$ |
|
$ |
|
Income (loss) from Investment
Operations: |
|
|
|
|
Net
investment income (loss)(a)(b) |
|
|
|
|
Net
realized and unrealized gain (loss) |
|
|
|
|
Total
from Investment Operations |
|
|
|
|
Less Distributions From: |
|
|
|
|
Net
investment income |
|
|
|
|
Net
realized capital gains |
|
|
|
|
Total
Distributions |
|
|
|
|
Net
asset value, end of the period |
$ |
|
$ |
|
Total
return(c) |
|
|
|
|
Ratios to Average Net
Assets: |
|
|
|
|
Net
assets, end of the period (000’s) |
$ |
|
$ |
|
Net
expenses(e) |
|
|
|
|
Gross
expenses |
|
|
|
|
Net
investment loss |
|
|
|
|
Portfolio
turnover rate(g) |
|
|
|
|
|
|
* |
From
commencement of operations on September 16, 2020 through December 31,
2020. |
(a) |
Per
share net investment loss has been calculated using the average shares
outstanding during the period. |
(b) |
Amount
rounds to less than $0.01. |
(c) |
Total
return is calculated at net asset value assuming reinvestment of dividends
and capital gains, if any. Had certain expenses not been waived/reimbursed
during the period, total
returns would have been lower. |
(d) |
Periods
less than one year are not annualized. |
(e) |
The
investment adviser agreed to waive its fees and/or reimburse a portion of
the Fund’s expenses during the period. Without this waiver/reimbursement,
expenses would have
been higher. |
(f) |
Computed
on an annualized basis for periods less than one year. |
(g) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creations or
redemptions. |
For a share outstanding throughout each
period.
Natixis Vaughan Nelson Mid Cap ETF
|
|
|
|
|
|
Year
Ended December
31, 2021
|
Period
Ended December
31, 2020*
|
Net
asset value, beginning of the period |
$ |
|
$ |
|
Income (loss) from Investment
Operations: |
|
|
|
|
Net
investment income(a) |
|
|
|
|
Net
realized and unrealized gain (loss) |
|
|
|
|
Total
from Investment Operations |
|
|
|
|
Less Distributions From: |
|
|
|
|
Net
investment income |
|
|
|
|
Net
realized capital gains |
|
|
|
|
Total
Distributions |
|
|
|
|
Net
asset value, end of the period |
$ |
|
$ |
|
Total
return(b) |
|
|
|
|
Ratios to Average Net
Assets: |
|
|
|
|
Net
assets, end of the period (000’s) |
$ |
|
$ |
|
Net
expenses(d) |
|
|
|
|
Gross
expenses |
|
|
|
|
Net
investment income |
|
|
|
|
Portfolio
turnover rate(g) |
|
|
|
|
|
|
* |
From
commencement of operations on September 16, 2020 through December 31,
2020. |
(a) |
Per
share net investment income has been calculated using the average shares
outstanding during the period. |
(b) |
Total
return is calculated at net asset value assuming reinvestment of dividends
and capital gains, if any. Had certain expenses not been waived/reimbursed
during the period, total
returns would have been lower. |
(c) |
Periods
less than one year are not annualized. |
(d) |
The
investment adviser agreed to waive its fees and/or reimburse a portion of
the Fund’s expenses during the period. Without this waiver/reimbursement,
expenses would have
been higher. |
(e) |
Effective
July 1, 2021, the expense limit decreased from 0.90% to
0.85%. |
(f) |
Computed
on an annualized basis for periods less than one year. |
(g) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creations or
redemptions. |
For a share outstanding throughout each
period.
Natixis Vaughan Nelson Select ETF
|
|
|
|
|
|
Natixis Vaughan Nelson Select
ETF |
|
Year
EndedDecember 31,2021 |
Period
EndedDecember 31,2020* |
Net
asset value, beginning of the period |
$ |
|
$ |
|
Income (loss) from Investment
Operations: |
|
|
|
|
Net
investment income(a) |
|
|
|
|
Net
realized and unrealized gain (loss) |
|
|
|
|
Total
from Investment Operations |
|
|
|
|
Less Distributions From: |
|
|
|
|
Net
investment income |
|
|
|
|
Net
realized capital gains |
|
|
|
|
Total
Distributions |
|
|
|
|
Net
asset value, end of the period |
$ |
|
$ |
|
Total
return(c) |
|
|
|
|
Ratios to Average Net
Assets: |
|
|
|
|
Net
assets, end of the period (000’s) |
$ |
|
$ |
|
Net
expenses(e) |
|
|
|
|
Gross
expenses |
|
|
|
|
Net
investment income |
|
|
|
|
Portfolio
turnover rate(h) |
|
|
|
|
|
|
* |
From
commencement of operations on September 16, 2020 through December 31,
2020. |
(a) |
Per
share net investment income has been calculated using the average shares
outstanding during the period. |
(b) |
Includes
a non-recurring dividend. Without this dividend, net investment income per
share would have been $0.02, total return would have been 38.99% and the
ratio of net investment
income to average net assets would have been 0.07%. |
(c) |
Total
return is calculated at net asset value assuming reinvestment of dividends
and capital gains, if any. Had certain expenses not been waived/reimbursed
during the period, total
returns would have been lower. |
(d) |
Periods
less than one year are not annualized. |
(e) |
The
investment adviser agreed to waive its fees and/or reimburse a portion of
the Fund’s expenses during the period. Without this waiver/reimbursement,
expenses would have
been higher. |
(f) |
Effective
July 1, 2021, the expense limit decreased from 0.85% to
0.80%. |
(g) |
Computed
on an annualized basis for periods less than one year. |
(h) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creations or
redemptions. |
Disclaimers
Shares
of the Funds are not sponsored, endorsed or promoted by the NYSE Arca. The NYSE
Arca makes no representation or warranty, express or implied, to the
owners of the shares of a Fund or any member of the public regarding the ability
of a Fund to achieve its investment objective. The NYSE Arca is not responsible
for, nor has it participated in, the determination of a Fund’s investments, nor
in the determination of the timing of, prices of, or quantities of shares
of a Fund to be issued, nor in the determination or calculation of the equation
by which the shares are redeemable. The NYSE Arca has no obligation or
liability to owners of the shares of a Fund in connection with the
administration, marketing or trading of the shares of a Fund.
Without
limiting any of the foregoing, in no event shall the NYSE Arca have any
liability for any direct, indirect, special, punitive, consequential or any
other damages
(including lost profits) even if notified of the possibility of such
damages.
If you would like more information about the Funds,
the following documents are or will be available free upon
request:
Annual and Semiannual Reports—Provide
additional information about each Fund’s investments. Each annual report
includes a discussion of the market conditions
and investment strategies that significantly affected the Fund’s performance
during its last fiscal year.
Statement of Additional Information
(SAI)—Provides
more detailed information about the Funds and their investment limitations and
policies. The SAI has
been filed with the SEC and is incorporated into this Prospectus by
reference.
For a free copy of a Fund’s annual or semiannual
reports or its SAI, to request other information about a Fund, and to make
shareholder inquiries generally, contact your financial
representative, visit the Funds’ website at im.natixis.com or call the Funds at
800-458-7452.
Important Notice Regarding Delivery of Shareholder
Documents:
In
our continuing effort to reduce your Fund’s expenses and the amount of mail that
you receive from us, we will combine mailings of prospectuses, annual or
semiannual
reports and proxy statements to your household. If more than one family member
in your household owns the same fund or funds described in a single
prospectus, report or proxy statement, you will receive one mailing unless you
request otherwise. Additional copies of our prospectuses, reports or
proxy
statements may be obtained at any time by calling 800-458-7452. If you are
currently receiving multiple mailings to your household and would like to
receive
only one mailing or if you wish to receive separate mailings for each member of
your household in the future, please call us at the telephone number
listed
above and we will resume separate mailings within 30 days of your
request.
Your financial representative or Natixis ETFs will
also be happy to answer your questions or to provide any additional information
that you may require.
Text-only
copies of the Funds’ reports and SAI and other information are available free
from the EDGAR Database on the SEC’s Internet site at: www.sec.gov. Copies
of this information may also be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address:
publicinfo@sec.gov.
Portfolio Holdings—A
description of the Funds’ policies and procedures with respect to the disclosure
of a Fund’s Actual Portfolio securities is available in the
SAI.
|
|
Investment
Company Act File No. 811-23500 |
XNTE51-0522 |