The active fund will largely invest in investment-grade fixed-income securities, but it may invest up to 15% of assets in bonds rated below investment grade. The fund may also hold U.S. dollar-denominated foreign securities, including emerging market securities.
When deciding which securities to buy and sell, Loomis Sayles will consider a number of factors related to the bond issue and the current bond market, including the stability and volatility of a country’s bond markets, the financial strength of the issuer, current interest rates, current valuations and Loomis Sayles’ expectations regarding general trends in interest rates. The active ETF managers will also consider how purchasing or selling a bond would impact the portfolio’s risk profile and potential return.
Furthermore, it comes with a relatively low 0.38% expense ratio.
“Through the ETF structure, LSST may provide exposure to short duration fixed income securities at a lower price point than traditional mutual funds may offer,” according to Natixis. “In addition to structural cost savings, investors also have full transparency into the securities they own.”
For more information on the fixed-income space, visit our bond ETFs category.