As the ETF industry enjoys greater and greater success, more traditional fund companies are eyeing the ETF space.
For example, Natixis Investment Managers recently launched the actively managed Natixis Loomis Sayles Short Duration Income ETF (NYSEArca: LSST) and also offers the Natixis Seeyond International Minimum Volatility ETF (NYSEArca: MVIN), which came out in October.
“We wanted to come into the U.S. marketplace with an ETF that was really true to Natixis’ DNA,” Alex G. Piré, Head of Client Portfolio Management for Natixis, said at the Charles Schwab Impact Conference. “We’re all about active management, active thinking.”
As ETFs become a household name, more investment clients are going to their fund providers and asking if they are able to replicate or adapt their traditional mutual fund strategies in an ETF wrapper to capitalize on the efficiencies and benefits of the ETF investment vehicle.
“What was really important for us was to round out the product line,” Piré said. “We’re bringing to market a strategy that’s novel for the U.S. equity market where we’re essentially bringing over from France a strategy that’s been very popular.”
Specifically, MVIN focuses on developed markets and try to generate long-term capital appreciation with less volatility than typically experienced by international equity markets. The minimum volatility approach helps diminish portfolio risk. Lower-risk stocks have historically offered better risk-adjusted returns than high-risk stocks from 1995 through 2015, according to Natixis.
The more recently launched LSST is supported by Loomis Sayles’ global research platform, which combines top-down macroeconomic analysis with bottom-up security selection. The Loomis Sayles Short Duration Income ETF will try to achieve current income consistent with preservation of capital by investing in fixed-income securities such as bonds, notes and debentures, as well as other investments, with an average duration between one and three years.
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