macro analysis
Asset Allocation
Crisis management: the major role played by authorities
Portfolios in "recovery" mode
Workshop Focus 6th Natixis Asset Management Workshop
July/August 2009
perspectives
Macroeconomic Analysis Crisis management: the major role played by authorities “In the short-term, this additional debt is a positive because it underpins economic activity. It offsets both the current trend towards saving by US consumers and, in general, the lower level of private sector debt...”
2
by Philippe Waechter, Chief Economist
Asset Allocation Asset allocation: portfolios in "recovery" mode “After hitting bottom in March, equity markets have enjoyed a spectacular recovery. This is basically down to the fading prospect of a deflationary/depression scenario which was nevertheless the commonly held view…”
4
by Franck Nicolas, Head of Global Asset Allocation & ALM
Market Data 5
The monthly Index Interest rate gap between the United States and the Euro-zone
Overview of our international product range Summary of Natixis Asset Management’s international offer and of its expertise
6
Special Workshop Focus 6th Natixis Asset Management Workshop “Speculative bubble yesterday, risk aversion today: what future for equities markets?”
News
9
10
Data as of 06/30/2009 Perspectives is a Natixis Asset Management's publication Natixis Asset Management - Communications Department - Business Development communication-nam@am.natixis.fr Publishing Director: F. Lenoir Editorial Committee: F. Delorme, S.de Quelen, H. Henriques, A.Lançon, K.Massicot, Ph. Le Mée, R. Monclar, F. Nicolas, Ch. Point, A. Reynier, M-L. Rouy, Ph. Waechter Coordination - Writing: N. Clémot Head of design: F.Dupertuys Contributors: M.Louvrier-Clerc, J.Caron
Natixis Asset Management Limited Liability Company Share Capital 50 434 604,76 € RCS Number 329 450 738 Paris Regulated by AMF under n°GP 90-009 Registered Office: 21 quai d’Austerlitz 75 634 Paris, Cedex 13 Tel. +33 1 78 40 80 00 www.am.natixis.com
Natixis Multimanager Subsidiary of Natixis Asset Management A French simplified joint-stock company Share Capital of 7 536 452 euros RCS Number 438 284 192 Paris Regulated by AMF under n°GP 01-054 Registered Office: 1-3, rue des Italiens 75009 Paris Tel. +33 1 78 40 32 00 www.multimanager.natixis.com
Cover picture: Bandstand Cutural Center, de La Warr Pavilion,Bexhill-on-sea.England. Niall McLaughlin Architects. Photography: Nicholas Kane/Corbis.
Editorial
This double summer edition contains our appreciation of market events that have had an impact on both the financial and the economic environment and our outlook for the months ahead.
Philippe Zaouati Head of Business Development
In the United States, a number of positive signals have appeared and have been confirmed, as explained by our Chief Economist, Philippe Waechter. It is now possible to envisage an emergence from the recession. In his Macroeconomic Analysis [page 2], Philippe Waechter analyses the role played by governments and authorities – which he considers to have been crucial in managing the crisis and which will remain equally vital during the recovery.
A recovery that Franck Nicolas, Head of Global Asset Allocation & ALM discusses in his Asset Allocation [page 4] with the key question: "Will the recovery last?".
Natixis Asset Management and the « Prix de l’Investisseur Responsable 2009 » For the second year in a row, Amadeis* and Natixis Asset Management, one of the leaders in SRI in France and Europe, are partnering the French daily, Les Échos, to award the «Prix de l’Investisseur Responsable 2009 » (« Responsible Investor Prize »). Created in 2008, this prize rewards institutional investors who have shown themselves to be responsible investors in the previous 12 months. The 2009 award ceremony will take place on November 17. French institutional investors are invited to submit applications on a dedicated website: www.leprixinvestisseurresponsable.com
This naturally includes the question: is the equity market recovery seen since March likely to continue? He also discusses the methods of financing chosen by the authorities in order to implement their economic support policies. The choices made by governments in this respect will have an impact on anticipations regarding inflation, which, were it to rise again, could have an negative impact on bond markets.
This issue includes, as every month, a summary of Natixis Asset Management’s international offer, detailed on pages 6 to 8.
*Amadeis is an independent asset management consultant which advises institutional investors on their investment strategy. It is one of the leaders in France with advisory assets of over €20 billion.
Natixis Asset Management focused its client Workshop of June 10 on the question "Speculative bubble yesterday… risk aversion today… what future for equities markets?” This 6th Workshop brought together 221 participants with four Natixis Asset Management experts. A summary of the proceedings is provided on pages 9 to 10 in Special Workshop Focus.
Philippe Zaouati Head of Business Development
www.am.natixis.com
July/August 2009
1
Macro Analysis
Philippe Waechter
Chief Economist
Crisis management: the major role played by authorities The Context The improvement in the US economy has been substantially driven by the aggressive action taken by the authorities. The Fed spectacularly expanded its balance sheet and public debt rose very quickly.
The Key Point The authorities took on some of the financial risks and risk aversion of economic players. This prevented the occurrence of a major collapse. This dampening effect gave players space to act more rationally, thereby helping to stabilize the economy.
The Challenge Authorities should gradually step back. The issue is determining the best timing so as to avoid weakening the economy again. The other issue is how this is done. Regardless how, it will take some time and may represent a longterm drag on the US economy.
2 July/August 2009
The signs from the US economy are more positive with the seeming possibility of an end to the recession sometime in the summer. What happened to the heralded crisis that was compared to the one in 1929 or the one in Japan?
Moreover and critically, this action backed by the FDIC* made it possible to reduce the risk of domino bank failures. It thus lessened the likelihood of bank runs, often the cause of collapses that, in the shortterm, are irreversible and result in a deep economic downturn.
A severe recession but it has to be put into perspective
The Treasury on the other hand launched a series of plans designed to limit the impact on the consumer and on economic activity. The tax cuts in Q2 2008 followed by the plan launched by the new Obama administration in February helped underpin economic activity by tackling tax and demand.
The recession is and has been severe. It will probably prove to have been the toughest recession since World War II. In scale, however, it is comparable to that following the first oil crisis and to that in 1982, which was the direct consequence of the deflationary policy of the then Fed chairman Paul Volcker (this policy resulted in fact in short-term interest rates of over 20%). But the current crisis is still nothing compared to the one in 1929. A look at the figures shows a fall in GDP of 30% compared to "only" 3.2% by the end of Q1 2009. This discrepancy between the fears of a spectacular crisis and a relatively limited economic downturn, suggests an unusual adjustment method that made it possible to dampen the shock and at least temporarily isolate the causes.
Taking on of risk by the authorities A significant portion of risk was taken on by the authorities, in particular the monetary authorities. The historic increase in the Federal Reserve's balance sheet (which has gone from around $900 billion to over $2,000 billion since autumn 2008) is a testament to this. This action, which can be seen as a taking on of risk by the US Fed, made it possible to progressively return to healthier dynamics in the financial markets. At the end of June, the difference between the interbank rate and 3-month Treasuries was thus down to a level under that before the crisis.
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The Treasury's funding requirements rose sharply as a result of the financing of stimulus plans but also the lower level of economic activity which dragged down tax receipts. Between September 15, 2008 and June 23, 2009, US government debt thus rose by 18.4%.
Means of underpinning economic activity In the short-term, this additional debt is a positive because it underpins economic activity. It offsets both the current trend towards saving by US consumers and, in general, the lower level of private sector debt. By issuing additional debt, the Treasury is providing itself with the means of keeping economic activity above what it would be if it were only driven by the private sector during this period of high uncertainty. The taking on by the Fed of financial risk and the underwriting by the US government of future risks, limited the level of adjustment required by each economic player. Such that, despite significant threats, there hasn't been a fierce and sustained downturn of the like seen in the 30s. While all economic players have suffered and will continue to be affected, behavior and reasoning are now more rational.
Macro Analysis This points to a stabilization of the situation while waiting for signs of a more substantial recovery.
When and how to return to normality? When economic recovery is confirmed, the US Fed and the Treasury will have to progressively adjust their programs in order to return to more normal patterns and clean up their books. This raises two key questions: n What timing should be envisaged? It is a matter of determining the most appropriate juncture, for each authority, so as to react accordingly. Past experience (1937) indicates in fact that following a large scale negative shock, it is better not to rein in economic stimulus policies too quickly. Consequently, even if the recovery is on the cards, the policies should continue to underpin growth without at the same time repeating mistakes like those made in 2003. Fed rates at the time were too low for too long even though the economy was starting up. n What should be done? The reduction of public debt will take a long time with a ratio of public debt to GDP that will likely take ten, or even fifteen years, to return to pre-crisis levels.
For the monetary authorities, the challenge is more complex. In the short-term, because of the low level of pressure on the manufacturing base, the risk of inflation is reduced while in the medium-term, a return to growth will result in a heightening of this pressure. A risk of inflation could in fact arise if the liquidity that the Fed recently injected is still on bank books at that time.
In the short-term, this additional debt is a positive because it underpins economic activity. It offsets both the current trend towards saving by US consumers and, in general, the lower level of private sector debt...
There are various possible ways in which the Fed could pull back: resale of securities purchased, asset issues by the Fed plus many others. Lots of options that will be looked at and discussed at the appropriate juncture.
Conclusion One thing is clear: if this major crisis did not result in a spontaneous economic collapse along the lines of what was seen in the 30s it is very likely thanks to the active support provided by economic policies. Nevertheless, it will take a long time to scale down. In the short-term, authorities fully shouldered the burden of dampening risk. A return to normality will require a progressive stepping back in this regard and must be done without endangering an economy that is still strained by excessive private debt.
Written on 06/26/2009 *FDIC : Federal Deposit Insurance Corporation: A US federal institution established in 1933 following a large number of bank failures. Its mission is to maintain the confidence of Americans in their banking and financial
The US Fed thus has to recover and mop up a large portion of this liquidity while at the same time not weakening the economy.
system. The FDIC insures deposits in banks and saving institutions, protects consumers while limiting the impact of bank failures on the financial system.
Total Fed balance sheet and outstanding public debt
Fed and US Treasury – Calculations: Natixis Asset Management
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July/August 2009
3
Asset Allocation Franck NICOLAS
Head of Global Asset Allocation & ALM
Asset allocation: portfolios in "recovery" mode After hitting bottom in March, equity markets have enjoyed a spectacular recovery. This is basically down to the fading prospect of a deflationary/depression scenario which was nevertheless the commonly held view. Since March, the number of rescue plans has increased. Low rate or zero rate monetary policies were accompanied by non-traditional measures (quantitative easing) involving the buyback of government debt by central banks, as well as tax stimulus plans or public expenditure in the form of structural stimulus plans. Leading indicators have thus recovered or have at least stopped getting worse. As for systemic risk, this declined once the results of stress tests on US banks showed that their capital requirements were actually lower than expected and that some institutions had already refunded the TARP* aid they had received.
Our recommendations by asset class Risk categories
Risk subcategories
Tactical allocation* May 09(1) June 09(2)
Fixed income equities fixed income United States
= -
= =
=
=
Euro UK Emerging countries Japan
= =
= =
=
=
=
=
Corporate
+
+
United States Euro
+ -
= =
UK
-
-
Japan
=
=
CURRENCIES
Dollar
=
=
(against the euro)
Yen
=
=
Pound
=
=
=
+
=
=
Euro issuers Equities
COMMODITIES Oil Gold Scale from -- to ++
(1) Investment committee on 04/30/2009. (2) Investment committee on 05/28/2009. * weighting gap v.s. strategic allocation of an investor.
*Tarp: Troubled Asset Relief Program.
With risk aversion having fallen significantly, all so-called risky assets have benefited from the improvement.
Equities This has resulted in an increased equity allocation with higher returns in emerging markets and a re-weighting of cyclical themes.
Commodities Along the same lines, there has been increased investment in commodities.
Bonds Lastly, portfolios are significantly overweight in credit, and even emerging market debt.
Our recommendations by geographic region The allocation teams have positioned the portfolios on a theme linked to the recovery that could come as soon as 2010 in the US and in emerging markets, and a little later in Europe. But there are currently two open issues in the market. n The first is knowing whether the recovery is sustainable, above and beyond a few statistical blips. This is the view taken by Natixis Asset Management: the risk of deflation seems to have gone away even though growth may be somewhat dragged down by the scale of the outstanding deficits, delayed investment, stagnating productivity gains and inability to use too much leverage because of regulatory pressure. n The second is understanding the attitude of central banks, and of the Fed in particular, in the event that growth takes hold. While expectations of a hike in key interest rates in the US have been around since November 2008, this seems premature given the approach previously taken by the Fed in the last crisis in 2001-2002, when it put off starting monetary tightening until growth had returned. In the event that the market focuses on this issue, inflationary expectations could reemerge through a rise in commodity prices against a background of a rebalancing of global growth in favor of emerging markets. And yet, a rise in inflation from 0% to 3% would be more than enough to put pressure on the bond market, and we could also see renewed distaste for public debt (given the scale of the deficits) and expectations of monetary tightening as the economic outlook brightens. These are all worrying factors for the future of the bond market over the medium to long term even if the current sharp slope remains rather favorable for bank restructuring and acts as a barrier against a sharp rise in long rates. Moreover, these elements could slow down growth and leave equities looking overvalued even though they have only just begun to bounce back. Written on 06/26/2009
4 July/August 2009
www.am.natixis.com
Market Data
Money Market Rate
France
1 year
2009
CAC 40
3 140.44
-29.19%
-2.41%
CAC Mid 100
4 802.30
-25.64%
8.59%
IT CAC 20
2 719.72
-27.15%
-6.57%
SBF 120
2 283.66
-28.93%
-1.19%
SBF 250
2 233.07%
-28.87%
-0.81%
Europe
Value
Value
1 year
MSCI Europe
71.77%
-29.08%
3.36%
Euro Stoxx 50
2 401.69%
-28.37%
-2.03%
DAX
4 808.64%
-25.08%
-0.03%
Footsie
4 249.21%
-24.47%
-4.17%
United States
2009
Value
1 year
2009
Dow Jones
8 447%
-25.58%
-3.75%
S&P 500
919.32%
-28.18%
1.78%
Nasdaq
1 835.04%
-19.97%
16.36%
Brent Crude Future
Asia
69.30%
-50.44%
52.01%
Value
1 year
2009
Nikkeï
9 958.44%
-26.13%
12.40%
Hong Kong
18 378.73%
-16.85%
27.74%
Singapore
2 333.14%
-20.84%
32.45%
Shanghaï
190.30%
-9.11%
71.57%
World MSCI World
Value 964.05%
1 year -31.24%
1 year
2009
Eonia
0.401%
-3.864%
-1.951%
Euribor 3 months
1.099%
-3.848%
-1.793%
Euribor 6 months
1.313%
-3.817%
-1.658%
Euribor 1 year
1.504%
-3.886%
-1.545%
Fed Funds
0.220%
-2.25%
0.13%
Fixed Income Rate
1 year
2009
5 years French Treasury Bond
2.672%
-2.125%
-0.051%
5 years USTN
2.550%
-0.771%
0.998%
10 years French Treasury Bond
3.724%
-1.101%
0.284%
10 years USTN
3.529%
-0.434%
1.315%
30 years French Treasury Bond
4.350%
-0.65%
0.627%
30 years USTN
4.331%
-0.189%
1.663%
Value
1 year
Euro/Dollar
1.403%
-10.97%
Euro/Yen (100)
135.335%
-18.97%
7.40%
Euro/Sterling
0.852%
7.59%
-11.91%
Dollar/Yen
96.485%
-8.98%
6.44%
Currencies
2009
2009 0.91%
As of 06/30/2009
4.76%
The monthly Index Interest rate gap between the United States and the Euro-zone Since the end of May, the 10-year yield on US government bonds has returned to a higher level than the yield on equivalent European bonds. This situation is normally seen when US economic activity is more considered dynamic than in the Euro-zone. The trend change usually occurs when expectations for the two geographical regions change. This movement usually accompanies anticipations regarding the respective future monetary policies of the two zones that become apparent via the relative change in 2-year yields. The recent rebalancing of 2-year yields reflects a progressive normalization of the ECB’s monetary policy with a low interest rate while US rates are very low. This movement at the short Source: Factset - Calculations: Natixis Asset Management end of the yield curve is accompanied by a rise in US 10-year yields reflecting a more positive outlook for economic activity in the USA than in the Euro-zone.
www.am.natixis.com
July/August 2009
5
Overview of our international product range Sub funds of the NIF (Lux) I SICAV managed by Natixis Asset Management
These 7 sub funds of the Natixis International Funds (lux) I SICAV reflect the key expertise of Natixis Asset Management
Natixis Euro Aggregate Plus Fund
Méric
nnée-
e Dela Isabell
Benefit from a broad range of fixed income investment opportunities
• Investment universe: Mainly Euro denominated government or private issuers rated Investment / Diversifying fixed income assets • Benchmark: Barclays Euro Aggregate • Minimum recommended investment period: 3 years
I, C R, C
EUR EUR
LU0161120547 LU0161121271
Natixis Global Inflation Fund Potard
Get the most out of diversification in inflationindexed bonds in a global universe • Investment universe: Mainly Euro denominated government or private issuers rated Investment - Diversifying fixed income assets • Benchmark: Barclays World Government Inflation linked all maturities Index hedged in euro F, C EUR LU0390502424 • Minimum recommended investment period: 2 years I, C EUR LU0255251166 • Risk Indicator: Tracking-error ex ante of 2%(maximum)
Sophie
Natixis Impact Euro Corporate Bond Fund aud
Benefiting from the SRI expertise of Natixis Asset Management through a socially responsible portfolio of investment grade corporate bonds
e Peyr
oph Christ
• Investment universe: Mainly Euro-denominated investment grade debt securities issued by OECD as well as cash, money market instruments or other securities • Benchmark: Barclays Euro Aggregate Corporate Index • Minimum recommended investment period: 3 years
I, C R, C
See the full prospectus which is the only legally binding document.
6 January 2009
www.am.natixis.com
EUR EUR
LU0155376477 LU0155380156
Sub funds of the NIF (Lux) I SICAV managed by Natixis Asset Management
de
ndra u Belo
ret is Thé
o
Franç
ie
Matth
Natixis Emerging Europe Fund Get the most out of the growth in the emerging European zone as part of a conviction management strategy
• Investment universe: Emerging Europe Equities • Benchmark: MSCI Emerging Europe Index • Minimum recommended investment period: 5 years • Risk Indicator: Tracking-error ex ante between 6 and 8
I, C I, C R, C R, C R, D
EUR USD EUR USD USD
LU0147917792 LU0095830922 LU0147918923 LU0084288595 LU0084288678
Natixis Europe Smaller Companies Fund Benefiting from the potential of European Small & Midcaps within the scope of a conviction-based strategy
pers
Cuy Thierry
• Investment universe: European Small and Mid Equities • Benchmark: None (MSCI Europe Small Cap: indicative only) • Minimum recommended investment period: 5 years • Risk Indicator: Tracking-error ex ante between 4 and 7 (indicative)
I, C R, C R, D
EUR EUR EUR
LU0095827381 LU0064070138 LU0064070211
Natixis Euro Value Fund Tapping the potential of Eurozone value equities within the scope of a convictionbased strategy
re
Lefèv Olivier
• Investment universe: Eurozone Equities • Benchmark: None (MSCI EMU DNR: indicative only) • Minimum recommended investment period: 5 years
I, C
EUR
LU0389329003
Natixis Impact Europe Equities Fund ine Christ
Active and responsible investing to maximise SRI value added
ton Lebre
• Investment universe: European equities • Benchmark: MSCI Europe • Minimum recommended investment period: 3 years
I, C I, D R, C R, D
EUR EUR EUR EUR
LU0095828512 LU0095828785 LU0066549592 LU0066549832
See the full prospectus which is the only legally binding document.
www.am.natixis.com
January 2009
7
Overview of our international product range Funds of Natixis Asset Management available through Private Placement
25 complementary funds covering all asset classes are available through Private Placement. This quarterly reviewed list of funds aims to provide Natixis Global Associates' teams* with the most innovative products of Natixis Asset Management and to offer a wider range of expertise.
Fixed income
Money Market
Asset class Fund name Natixis Cash Première
C: FR0010157834
Natixis Cash A1P1
C: FR0010322438
Natixis Impact Cash
C: FR0010008003
Natixis Cash Eonia
I: FR0010298943
Natixis Tréso Euribor 3 Mois
FR0000293714
Natixis Souverains Euro 1-3
I: FR0010208421
Natixis Souverains Euro 3-5
FR0010036400
Natixis Souverains Euro 5-7
FR0010201699
Natixis Souverains Euro 7-10 Natixis Souverains Euro
Equities
R: FR0007084926
FR0000449092 RC: FR0000003196
Natixis Inflation Euro
I: FR0007475413
R: FR0010170944
Natixis Crédit Euro
I: FR0010171108
R: FR0010690966
I: FR0010658963
R: FR0010660142
Natixis Convertibles Euro
BalanAltern. Absolute return ced
Share and ISIN code
Natixis Convertibles Europe
C: FR0010171678
Natixis Actions Europe Dividende
IC: FR0010582478
Natixis Impact Life Quality
C: FR0010410274
E: FR0010458539
Natixis Actions US Value
I: FR0010256412
R: FR0010236893
I: FR0010256404
R: FR0010236877
Natixis Actions US Growth Natixis Actions Europe Convictions
RC: FR0010573782
C: FR0010346429
Sonic Monde
I: FR0010555797
RC: FR0000993446
Natixis Absolute Quant Bond 18M
I: FR0010232348
R: FR0010249219
IC: FR0010654921
RC: FR0010657924
IC: LU0161071237
IC: LU0161073951
Natixis Absolute Swap Arbitrage Natixis Constellation European Event Alpha Hedge + Réactis Emerging
RC: FR0010058453 I: FR0010634345
RC: FR0010626218
Source: Barclays Capital - Figures: Natixis Asset Management These funds are authorized for sale in France and possibly in other country(ies) where their sale is not contrary to local legislation. Please refer to legal information of this material.
* Natixis Global Associates is a global distribution platform which brings their investment expertise of the affilliated investment managers to clients outside France.
8 July/August 2009
www.am.natixis.com
Special Focus
6th Natixis Asset Management Workshop
Speculative bubble yesterday, risk aversion today: what future for equities markets? Introduced by Pascal Voisin, CEO of Natixis Asset Management, the Natixis Asset Management Workshop on 10 June focused on the question: Speculative bubbles yesterday, risk aversion today: what does the future hold for Equities markets?”
“The last ten years seen equities markets go through a number of different phases: two rising periods (1999-2000; 2003-2007) and two contracting periods (2001-2003; 2008 onwards) which correspond to the bursting of the New Technologies bubble and then that of the subprime loans. This observation raises the question of whether to invest in equities over the long term and what strategy to adopt. The environment that is now emerging now does indeed suggest that new approaches are required…" Pascal Voisin, CEO of Natixis Asset Management
Enthusiastic attendance for this 6th edition A thrice-yearly event held around a prominent, topical economic and financial theme, with addresses by Natixis Asset Management experts, the Workshop drew an audience of 221 for its 6th edition: a measure of the idea’s success. Replying on the issue of the day were the following speakers: Philippe Waechter, Chief Economist, Dominique Sabassier, Deputy CEO and Chief Investment Officer, Wilfrid Pham, Head of Equities Management and Franck Nicolas, Head of Global Asset Allocation & ALM. Chaired by Philippe Zaouati, Head of Business Development, this prime opportunity for exchanges with clients was punctuated by polling of the audience, supplied with individual remote-control units to reply to multiple-choice questions. Another way for Natixis Asset Management to get to know its clients…
www.am.natixis.com
July/August 2009
9
Special Focus
Equities: the Natixis Asset Management experts give their opinion The economic environment is improving, The positive signals from China endorse this view, with the strong interventionist measures by the government to stimulate domestic demand. A similar picture is painted in the United States, where the increase in new orders and the fall in new weekly unemployment claims, along with the lessened household apprehensions for the future, are strong vectors for recovery and of support for economic activity. "We are dismissing a W-shaped scenario since we do not perceive any shock likely to tip the economy back into recession" commented Philippe Waechter, Chief Economist. "Prospects for Europe, on the other hand, are more mixed. The internal dynamic of the European economy will remain limited in the absence of interventionist economic policies and given a context doing little to favour exports ". Philippe Waechter does not expect a resurgence of inflation in view of Philippe Waechter the slack labour market, while the pressure upon certain central banks to retrieve some of the liquidity they have injected will also be a limiting factor. However, he feels that a rise in the Fed rates cannot be ruled out towards the end of the year, or more likely in early 2010, while ECB rates should remain stable for some time to come. For Wilfrid Pham, Head of Equities Management, the current situation differs from a “Japanese scenario”. "We are expecting equity markets to gain 5 to 10% by the year-end, even though the markets are expected to behave less directionally". He advocates stock picking in order seize market opportunities: "Our current preference is for the major market capitalisations that can afford to pay regular dividends and that show high-quality business models. Company valuations should discriminate in favour of futureperformance capability ". Wilfrid Pham A discretionary management stance is not incompatible with a contribution from management strategies.
Franck Nicolas
"There is no ideal technique. Investors could benefit from injecting asymmetry into their portfolios by buying protection when markets are calm, and by setting a dynamically-managed floor when markets are volatile. Similarly, an investor can use “flexible mechanisms” using valuation indicators to detect situations of extreme tension, or trend-following so as not to miss major trends ", explains Franck Nicolas, Head of Global Asset
Allocation & ALM. “The markets should still be feeling the shock for some time” was the view taken by Dominique Sabassier, Deputy CEO and Chief Investment Officer. “And that argues in favour of active management with flexibility in terms of both styles and allocations”. More fundamentally, the crisis will cause changes in economic behaviour, and is altering market expectations. "In view of the weak corporate profits growth, Dominique Sabassier dividends will take a larger share of total earnings. Accordingly, Dominique Sabassier recommends focusing on convertibles and overweighting certain themes (emerging countries, raw materials). "Increased State intervention will also depress prices ", generating a risk of disappointment in the so-called “regulated” sectors. "There should be fewer major M&A transactions”; in D.Sabassier’s view, this should work in favour of mid-size capitalisations. "Lastly, corporate valuations will increasingly factor in non-financial criteria (governance, the environment) ".
To take matters further... The details of the workshop proceedings can be found in the Natixis Asset Management Workshop N°6 Newsletter available at www.am.natixis.com [News section - 06/16/2009]
10 July/August 2009
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News
Loomis, Sayles & Company L.P. meets with Natixis Asset Management Bob Blanding, President of Loomis, Sayles & Company L.P., came to Paris last month to present to Natixis Asset Management the company, the manner in which it is handling the crisis, its current strategy and its expectations for the equity and fixed income markets.
PRODUCT NEWS International: Promotion of new funds of Natixis Asset Management and expertise For Natixis Asset Management, the first half of 2009 was mostly about bonds in terms of product push and international expertise. Many areas of Natixis Asset Management’s expertise were demonstrated to Global Associates’ sales teams, and were again on display at the Euroland Session in May 2009 and Asian Summit in July 2009 (two GA sales meetings), including: euro aggregate (Natixis Euro Aggregate Plus Fund), active management of euro credit (Natixis Crédit Euro and Natixis Impact Euro Corporate Bond Fund, a SRI fund integrating extra-financial research on ESG criteria) and HTM management (Sélection Obli Juillet 2014).
>Further information: www.am.natixis.com [Our Product section]
With around €81.2 billion in assets under management as at March 31, 2009, Loomis, Sayles & Company L.P. is the largest and most renowned of the US subsidiaries of the Natixis asset management division. The company has more than 80 years’ experience of managing the assets of private clients, institutionals and investment funds. It attaches great importance to research and annually devotes a budget to match ($50 million in 2009). > Further details: www.loomissayles.com
MatiNAM Gateway: a successful equity market strategy for over 20 years The July 7 MatiNAM, a regular meeting organized for the clients of Natixis Asset Management, was devoted to the fund manager, Gateway Investment Advisers LLC. On this occasion, Harry Merriken, Senior Vice President of Gateway, presented Gateway US Equities Fund* and Gateway Euro Equities Fund*, two partially hedged equity funds managed by Gateway Investment Advisers LLC. Recently approved for marketing in France and distributed by Natixis Asset Management in its domestic market, these two funds fully replicate the management strategy used for the Gateway Fund, the firm’s historic product which has a track record stretching back more than 20 years in the North American market. In early July, Harry Merriken met with around ten journalists during an “Expertise” breakfast, which was widely reported in the French business and financial press. > Further details: www.am.natixis.com
* Sub-funds of Natixis International Funds (Lux) I, an open-ended Luxembourg domiciled UCITS SICAV. (Natixis International Funds (Lux) I is an investment company with variable capital under the laws of the Grand Duchy of Luxembourg and authorized by the Commission de Surveillance du Secteur Financier as a UCITS.)
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July/August 2009 11
Legal information This material has been prepared by Natixis Asset Management, a subsidiary of Natixis Global Asset Management. Natixis Asset Management is a French asset manager authorized by the Autorité des Marchés Financiers (Code 1200009, Agreement No. GP90009) and licensed to provide investment management services in the EU. The funds mentioned in this material are not registered or authorized in all jurisdictions and may not be available to all investors in a jurisdiction. The provision of this material does not constitute an offer of services, nor an offer or recommendation to purchase or sell shares in any financial instrument. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. In the case of a fund, these can be found in the fund’s prospectus or offering memorandum, which should be read carefully before investing. If you would like further information about any of the funds, including charges, expenses and risk considerations, contact the sender of this document or your financial advisor for a free prospectus, simplified prospectus, copy of the Articles of Incorporation, the semi and annual reports, and/or other materials and translations that are relevant to your jurisdiction. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. In certain cases, this material is provided by one of the Natixis Global Associates entities listed below to its clients who qualify as Professional Clients or Qualified Investors. Natixis Global Associates is the global distribution organization of Natixis Global Asset Management, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide. Although Natixis Global Associates believes that the information provided in this material to be reliable, it does not guarantee the accuracy, adequacy, or completeness of such information. • In the UK: This material is provided by Natixis Global Associates UK Limited which is authorised and regulated by the UK Financial Services Authority (register no. 190258). This material is intended to be communicated to and/or directed at persons (1) in the United Kingdom, and should not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell securities in any other jurisdiction than the United Kingdom; and (2) who are authorised under the Financial Services and Markets Act 2000; or are high net worth businesses with called up share capital or net assets of at least £5 million or in the case of a trust assets of at least £10 million; or any other
person to whom the material may otherwise lawfully be distributed in accordance with the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or the (Promotion of Collective Investment Schemes) (Exemption) Order 2001 (the "Intended Recipients"). To the extent that this material is issued by Natixis Global Associates UK Limited, the fund, services or opinions referred to in this material are only available to the Intended Recipients and this material must not be relied nor acted upon by any other persons. Natixis Global Associates UK Limited, Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA. • In the E.U. (outside of Germany, Austria, Italy and the UK): This material is provided by Natixis Global Associates S.A. or its branch office in France, Natixis Global Associates International. Natixis Global Associates S.A. is a Luxembourg management company that is authorized by the Commission de Surveillance du Secteur Financier and is incorporated under Luxembourg laws and registered under n. B 115843. Registered office of Natixis Global Associates S.A.: 2-8 Avenue Charles de Gaulle, L-1653 Luxembourg, Grand Duchy of Luxembourg. Registered office of Natixis Global Associates International (n.509 471 173 RCS Paris): 21 quai d'Austerlitz, 75013 Paris. • In Germany: This material is provided by Natixis Global Associates Germany GmbH, a tied agent of Natixis Global Associates UK Limited. Natixis Global Associates UK Limited is authorised and regulated by the UK Financial Services Authority (register no. 190258). This material is intended to be communicated to and/or directed at persons (1) in the Federal Republic of Germany, and should not be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell securities in any other jurisdiction than the Federal Republic of Germany; and (2) who are lawfully authorised to receive this material under the provisions of § 2 (11) paragraph of the German Investment Act (“Intended Recipients”). To the extent that this material is issued by Natixis Global Associates Germany GmbH, the fund, services or opinions referred to in this material are only available to the Intended Recipients and this material must not be relied or acted upon by any other person. Registered office of Natixis Global Associates Germany GmbH (Frankfurt am Main HRB 45540):
Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. • In Austria: This material is provided by Natixis Global Associates Germany GmbH, a tied agent of Natixis Global Associates UK Limited. Natixis Global Associates UK Limited is authorised and regulated by the UK Financial Services Authority (register no. 190258). This material is intended to be communicated to and/or directed at persons (1) in the Republic of Austria, and should not be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell securities in any other jurisdiction than the republic of Austria; and (2) who are Qualified Investors as defined in Article 1 (1) 5a of the Austrian Capital Market Act (“Intended Recipients”). To the extent that this material is issued by Natixis Global Associates Germany GmbH, the fund referred to in this material is only available to the Intended Recipients and this material must not be relied or acted upon by any other person. Registered office of Natixis Global Associates Germany GmbH (Frankfurt am Main HRB 45540): Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. • In Italy: This material is provided by Natixis Global Associates Italia SGR, S.p.A., an investment management company (“Societa’ di Gestione del Risparmio”) registered and regulated by the Bank of Italy (registration no. 119, code no. 15143.1). Registered office: Via Larga, 4 - 20122, Milan, Italy. • In Switzerland: This material is provided to Qualified Investors by Natixis Global Associates Switzerland Sàrl. Registered office: place de la Fusterie 12, 1204 Genève. • In the DIFC: This material is provided in and from the DIFC financial district by Natixis Global Associates Middle East, a branch of Natixis Global Associates UK Limited, which is regulated by the DFSA. Related financial products or services are only available to persons who have sufficient financial experience and understanding to participate in financial markets within the DIFC, and qualify as Professional Clients as defined by the DFSA. Registered office: PO Box. 118257, 5th Floor, Building 8, Gate Village, DIFC, Dubai, United Arab Emirates.
Contacts
Prospectus and sales documents required for subscription are available on demand: n Natixis Global Associates (Operations): offshoreops@ga.natixis.com n or CACEIS Luxembourg (Prime Transfer Agent): fb-reg-european-ta@eu.fasnetgroup.com n or Natixis Asset Management (Clients servicing): nam-service-clients@am.natixis.com
12 July/August 2009
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THINK POSITIVE. • No. 1 French asset manager • No. 1 European asset manager Grands Prix Le Monde Eurofonds - Fundclass 2009(1)
• Best Bond Group Lipper Fund Awards 2009 (France)(2)
• 1st prize Large Bond Group La Tribune - Morningstar “Victoires des SICAV” Awards 2009(3)
• Golden Trophy - Best range of international bonds funds • Silver Trophy - Best range of international equities funds • Bronze Trophies - Best overall performance & Best range of sector equities funds Trophées des meilleurs SICAV et Fonds - Le Revenu - 2009(4) Natixis Asset Management has again been recognized for its consistent results over time. With around 278 billion in assets under management as of March 31, 2009 and around 600 employees based in Paris, Natixis Asset Management offers institutional investors, large companies, distributors and banking networks a wide range of products and investments issues across all asset classes.
European expert of Natixis Global Asset Management www.am.natixis.com Past performance or reference to any rankings or awards cannot be interpreted as indicating the future performance of a fund. (1) Companies with more than 101 funds registered for sale in Europe and rated by Fundclass for at least four years as of 12/31/2008. (Source: Le Monde Argent of 03/08/2009). (2) Companies with funds registered for sale in France and rated by Lipper for at least three years as of 12/31/2008. (Source: Lipper Thomson Reuters). (3) Companies with more than 15 bond funds registered for sale in France and rated by Morningstar for at least five years as of 06/30/2008. (Source: Morningstar). (4) Category «Network banks» with European funds registered for sale in France and rated by EuroPerformance for at least three years as of 03/31/2009 (Source: Le Revenu). Natixis Asset Management - Agrément AMF n° GP 90-009 - RCS Paris 329 450 738