July-August 2010
Perspectives Macro Analysis Global economic review Asset Allocation One problem can hide another! Expertise Focus Money market expertise: what is the best way of integrating socially responsible investment?
www.am.natixis.com CORPORATE AND INVESTMENT BANKING / INVESTMENT SOLUTIONS / SPECIALIZED FINANCIAL SERVICES
Publishing Director: F. Lenoir Editorial Committee: T. Benoist, S. de Quelen, Ph. Le Mée, K. Massicot, R. Monclar, F. Nicolas, Ch. Point, Ch. Lacoste, JP. Snel, B. Thiery, Ph. Waechter Coordination - Writing: N. Clémot, G. Matéos Head of design: F. Dupertuys Contributors: R. Cyrille, O. de Larouzière, D. Levadoux
4
Macroeconomic Analysis
6
Asset Allocation
7
Market Data
8
Overview of our international product range
11 Expertise Focus
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.
13 News
Legal information 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. Natixis International Funds (Lux) I is organized as an investment company with variable capital under the laws of the GrandDuchy of Luxembourg and is authorized by the financial regulator (the CSSF) as a UCITS. Natixis Global Associates S.A. is the management company of the Fund. 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. Performance data shown represents past performance and is not a guarantee of future results. More recent performance may be lower or higher. Principal value and returns fluctuate over time (including as a result of currency fluctuations) so that shares, when redeemed, will be worth more or less than their original cost. Performance shown is net of all fund expenses, but does not include the effect of sales charges or correspondent bank charges, and assumes reinvestment of distributions. If such charges were included, returns would have been lower. The analyses, opinions, and certain of the investment themes and processes referenced herein represent the views of the author(s) referenced as of the date indicated. These, as well as the portfolio holdings and characteristics shown, are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material. In certain cases, this material is provided by one of the Natixis Global Associates entities listed below, each of which is a subsidiary of Natixis Global Asset Management, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide, each of which conduct any regulated activities only in and from the jurisdictions in which they are licensed or authorized. Their services and the products they manage are not available to all investors in all jurisdictions. 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. Registered Address: 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 to the investment service provider or other Professional Client or Qualified Investor who has requested it 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 and Austria: This material is intended to be communicated to and/or directed at persons in Germany and Austria by Natixis Global Associates Germany GmbH, a tied agent of Natixis Global Associates UK Limited. In the case the fund(s) referenced within this material is/are not registered in Germany or Austria, this material is intended to be communicated to and/or directed at persons who are (a) lawfully authorized to receive this material under the provisions of § 2 (11) paragraph of the German Investment Act or (b) 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, 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 Italy: This material is provided to the investment service provider or other Professional Client or Qualified Investor who has requested it 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 San Clemente, 1 - 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): n or CACEIS Luxembourg (Prime Transfer Agent): n or Natixis Asset Management (Clients servicing): Cover picture : © Chernetskiy / Shutterstock
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Editorial Awards Successive upgrades of global growth forecasts since the fall of 2009 show that activity levels are recovering. According to Philippe Waechter, Chief Economist, while there has been a clear pick-up in activity, the effect of the coordinated implementation of accommodative policies is waning now that the stimulus measures are gradually being withdrawn. This means a return to the more habitual mechanisms of the economic cycle. In the view of Franck Nicolas, Head of Global Asset Allocation & ALM, the debt taken on by governments to fund their stimulus packages is weighing on growth, as demonstrated by the public finance crisis affecting the euro-zone's peripheral countries. The drop in budget resources raises questions over the capacity of individual economies to return to growth in a more self-sufficient form, and some serious doubts are emerging over the sustainability of global growth. For this double summer issue, Natixis Asset Management is devoting its Expertise Focus to providing an overview of all aspects of its SRI money market management process. In addition to an analysis of the traditional financial criteria, Natixis Asset Management’s selection of issuers for its money market portfolios will now also take into account an evaluation of the extra-financial context. This evaluation encompasses ratings from external extra-financial agencies, as well as analyses carried out internally by our dedicated research team, which has developed its own ratings grid for this purpose [Expertise Focus pages 11-12]. As usual, you can also find the summary of Natixis Asset Management’s international offer [pages 8 to 10 of this issue].
Enjoy reading it,
L’Agefi Actifs
Les Actifs du Patrimoine Awards 2010 Innovation: Impact Funds Climate Change awarded the Jury Prize Natixis Asset Management’s Impact Funds Climate Change has received the 2010 Jury Prize in the L’Agefi Actifs du Patrimoine awards*. In addition to the qualities of this fund which focuses on the climate change issue, the jury commended the expertise and the added value of the Climate Change Scientific Advisory Committee launched by Natixis Asset Management in order to enlighten its teams on the climate change issues. For further information on Impact Climate Change expertise: www.am.natixis.com/climatechange/eng Source: L'Agefi Actifs of 11/06/2010.
Philippe zaouati
Head of Business Development
*This prize is awarded to financial and insurance products distributed in France to an exclusively wealth manager customer base. The 2010 version analyzed the innovation and originality of products launched between 01/04/2009 and 31/03/2010.
The figures mentioned refer to previous years. The Fund’s past performance or reference to any rankings or awards received by it or its manager cannot be interpreted as indicating the future performance of the funds or of their managers.
www.am.natixis.com
July-August 2010
3
Macro Analysis Global economic review The global economy has probably entered a new phase. After the recession that affected the end of 2008 and early part of 2009, activity was boosted by highly accommodative economic policies. In the wake of the collapse of Lehman Brothers in the fall of 2008, governments and central banks agreed that a coordinated approach was necessary. It was essential to reduce the risk of this seismic event triggering a more prolonged crisis and dragging the economy down, causing a sharp rise in unemployment. The aim was to use public spending to fill the gap created by an expected drop in consumer spending, accepting that government deficits would thereby increase. At the same time, monetary policy became more accommodative so as to prepare the way for a macroeconomic adjustment. The coordinated action of a number of governments can be considered successful in reducing the potential impact of the recession, given the extent of the shocks suffered by the global economy.
Philippe Waechter Chief Economist of Natixis Asset Management
This phase is now coming to an end. Successive upgrades of global growth forecasts since the fall of 2009 show that activity levels are recovering. However, the effect of the accommodative policies is waning now that the stimulus measures are gradually being withdrawn, heralding a return to the more habitual mechanisms of the economic cycle. We have now reached a more delicate phase: while individual countries have benefited from the various stimulus plans, their particular fragilities are resurfacing now that the global economic environment is less favorable. This new phase began in the summer of 2010.
n The context Interdependence is increasingly prevalent in the global economy. Although the coordinated approach to implementing economic policies in response to the 2008/2009 recession proved successful, the situation has now changed: there is less coordination and the drop in budget resources is raising questions over the ability of individual economies to return to growth in a more selfsufficient form.
n The key points Following a period of fairly dynamic recovery driven by Asia, the global economy has entered a new phase. Activity levels are continuing to rise, but are not gathering pace.
n The stakes If the impetus from emerging countries becomes less robust, fresh doubts will appear over the ability of the industrialized countries to achieve strong growth in a more sustainable framework. Growth in these countries is still somewhat fragile.
4 July-August 2010
Economic growth rates have varied quite considerably, and there are currently significant disparities between different countries and regions.
Asia: recovery running out of steam In the emerging countries, particularly in Asia, the activity indicators turned down sharply at the end of the spring. Surveys of business leaders in Asia, notably in China, South Korea and Taiwan, indicate that activity growth is slowing. The acceleration in activity recorded until the spring is beginning to wane, but growth in the region has so far not been affected. Activity levels will be less dynamic, but should be more sustainable locally. If this new scenario becomes established, it will dampen the region’s ability to boost the global economy. Asia (excluding Japan) is the only region in which industrial output has risen above the levels recorded before the crisis in the fall of 2008. This turnaround will have major consequences for western economies. It will impact on the USA, for example, as US exports to Asia (excluding Japan) exceed those destined for the EU. This would also affect the macroeconomic scenario in Europe, which has become heavily reliant on the global economy as an impetus for growth. A less favorable international environment would therefore alter this base scenario.
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USA: fragile labor market In the USA, the indications given by firms are still positive. The surveys continue to suggest growth in activity, and firms are expressing the intention to continue with their investment plans. This trend also applies to orders for capital goods(1). However, the improvement has yet to filter through to households. New job creation is very slow, and consumers are heavily indebted. The improvement in the labor market seen until the spring has tailed off and will not be much help on this front. The crux of the matter is that if consumers do not fill the gap left by the gradual withdrawal of the stimulus packages, activity will slow. A recovery on the labor market would boost activity levels, as well as the property market. In this fragile phase, the Fed is considering whether it should take renew action to prevent a pattern of slow growth from becoming established.
Europe: budget consolidation required In Europe, the dynamics of the growth model depend on the ability to tap overseas markets given that internal demand remains sluggish.
However, recent developments have given rise to doubts over external support for Europe's economy. The question of whether there is an urgent need to set in train a period of budget consolidation is therefore set to resurface. But the constraints that will affect internal demand while governments seek to cut their deficits will no longer be counterbalanced by foreign demand. It will therefore be extremely difficult to return to the 3% budget deficit limit by 2013-2014 while staying on a steady growth path. This uncertainty is not conducive to a large-scale reduction in savings. A factor impacting significantly on trade-off over time would be necessary, such as a marked fall in interest rates of the order of that observed in previous periods of budget consolidation.
Given current interest rate levels, however, it seems unlikely that trade-off would be affected by this factor(2).
Conclusion New concerns are weighing on the global economy, which is entering a new phase where it is poised on a “razor’s edge”. If growth becomes too weak in the industrialized countries, a risk of deflation may emerge. This point was made implicitly by the Federal Reserve in the press release following its monetary policy committee meeting in June.
with positive results, but the situation in individual countries has now changed varying considerably between the different regions - and depends increasingly on internal mechanisms. We have reached the moment of truth: the need for countries to generate growth from within is at the heart of current debate. There is at present a lack of consensus on this issue, as seen at the G20 summit in Toronto, and countries are moving away from taking the kind of coordinated action that secured the recovery.
In other words, global growth is becoming more difficult. The need to combat the recession had convinced the world’s key decision-makers to act in concert,
Written on 06/07/2010
PMI surveys of manufacturing firms
60
50
40
30 2007
China World Euro zone
USA Brasil
2008
2009
2010 Source: Datastream
(1) The rise in productive investment is not inconsistent with capacity utilization rates, which remain low. During a recession, the structure of economic activity is generally not the same as before and after the recession. New sectors develop and make investments, while traditional sectors that are doing less well have considerable surplus production capacity. The ability to bring about a rapid transition from old to new sectors is what enables economies to come out of recession more quickly. In this context, the institutions that govern the labor market may deliver improvements if they facilitate movement from one sector to another. (2) In terms of household behavior, a Ricardian theory is often cited. This approach suggests an equivalence between tax and spending. Ricardo's theory, which was developed by Robert Barro in 1974, states that a rise in the public debt today will translate into higher tax receipts in the future. According to the theory, households may increase their savings today in order to be able to pay higher taxes tomorrow. Barro’s initial idea was to demonstrate the inefficiency of budgetary policy. Today, it is often suggested that a deficit reduction could lead to a drop in savings. This analysis is incomplete, however, since the public debt will continue to increase in coming years. It is more appropriate to consider this in terms of the uncertainty surrounding the global economic environment. It is the reduction in this uncertainty that could lead to a drop in savings.
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July-August 2010
5
Asset Allocation One problem can hide another! With the market having had to assimilate a public finances crisis unleashed by the difficulties of the peripheral countries in the Euro zone, serious questions are currently being raised about the sustainability of global growth. This time, the impending austerity plans aimed at reducing deficits to a sustainable level and their impact on Euro zone growth are not the only issues. Weaker indicators on economic activity from Asia and the USA are already raising fears of a more marked cyclical slowdown which could degenerate into a double-dip recession. The governments will also need to use the kind of ‘fine-tuning’ usually reserved for central bankers to safeguard the little remaining growth, while remaining committed to controlling public accounts.
Franck nicolas
Head of Global Asset Allocation & ALM Risk Risk categories subcategories
Tactical allocation* 05/10(1) 06/10(2)
Fixed income
=
=
equities
+
=
n Fixed income
n Currencies
Against this backdrop, interest rates should remain low. Firstly, the flattening in the yield curve at the long end remains the only additional stimulus that can be given to the economy for the moment and, secondly, like Japan, it is in governments' interests to keep rates low so as not to increase the cost of debt servicing. It is going to take a series of very buoyant activity statistics to raise doubts in the bond markets which seem eternally positive currently.
Natixis Asset Management remains a longterm bear on the euro, even if the currency may benefit from a temporary respite over the next few weeks. The measures taken by the ECB to increase liquidity in the sovereign debt market and avoid renewed interbank paralysis will have something to do with this. Longer term, however, there is no reason at this stage why the euro should not return to below its long-term average.
-
-
= -
+ -
=
=
=
=
Euro issuers Corporate Invest.Grade
+
+
n Equities
equities
United States Euro zone
= +
= +
UK
-
-
Japan
=
=
Dollar
=
-
Yen
-
-
Sterling
-
+
+
-
=
=
As a result, the Natixis Asset Management Strategic Investment Committee has slightly downgraded its exposure to equities. They should, admittedly, trade in a range whose upside potential (up to a maximum of 3000 on the Stoxx 50) is greater than the downside risk (identified at 2400) but increased risk aversion and the breaking of the 200 day moving average is a testament to the current fragility. On the other hand, we have increased our re-weighting of euro zone equities whose performance has significantly lagged that of US equities resulting in very undemanding valuations. The yield on a number of sectors, like the yield on credit, appears much higher than the risk free rate.
Fixed income United States Euro zone UK Emerging markets Japan
Currencies (against the euro)
Commodities Oil Gold Scale from -- to ++
(1) Investment committee on 29/04/2010. (2) Investment committee on 27/05/2010. *weighting gap vs. strategic allocation of an investor
6 July-August 2010
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n Commodities With the bond markets sending a signal of latent deflation, commodity prices should also see a downturn. Gold has already eased slightly and will demonstrate the limits of its safe haven status if the deflationary fear materializes. The global trade index (Baltic) is also pointing to a decline in global trade. The commodities market which has proved resilient to date could effectively suffer from this more or less prolonged pause in economic activity.
Written on 07/07/2010
Markets Data France
Value
CAC 40 CAC Mid 100 IT CAC 20 SBF 120 SBF 250
3 643.14 6 335.17 3 428.90 2 702.05 2 641.13
Europe
Value
MSCI Europe EuroStoxx 50 DAX Footsie
88.50 2 742.14 3 604.49 5 258.02
United States
Value
Dow Jones S&P 500 Nasdaq Brent Crude Future
10 465.94 1 101.60 2 254.70 78.18
Asia
Value
Nikkeï Hong Kong Singapore Shanghaï
9 537.30 21 029.81 2 987.70 237.59
World
Value
MSCI World
1 124.83
1 year 6.33% 20.93% 14.06% 8.48% 8.59%
1 year 12.92% 3.94% 11.74% 14.10%
1 year 14.11% 11.56% 13.96% 9.04%
1 year -7.91% 2.22% 12.35% 8.68%
1 year 7.66%
As of 31/07/2010
2010 -7.45% 3.95% 1.76% -5.51% -5.31%
2010 0.25% -7.52% 0.01% -2.86%
Money Market Rate Eonia Euribor 3 months Euribor 6 months Euribor 1 year Fed Funds
2010 -9.57% -3.85% 3.11% -5.87%
2010 -3.74%
0.065 0.003 0.003 0.062 0.000
2010 0.013 0.196 0.151 0.169 0.130
Fixed Income
2010 0.36% -1.21% -0.64% 0.32%
0.423% 0.896% 1.145% 1.417% 0.180%
1 year
Rate 5 years French Treasury Bond 5 years USTN 10 years French Treasury Bond 10 years USTN 30 years French Treasury Bond 30 years USTN
1.944% 1.597% 2.945% 2.906% 3.645% 3.976%
1 year -0.666 -0.921 -0.624 -0.572 -0.478 -0.322
2010 -0.535 -1.089 -0.648 -0.927 -0.615 -0.654
Currencies Value Euro/Dollar Euro/Yen (100) Euro/Sterling Dollar/Yen
1.3028 112.90 0.8188 86.66
1 year -8.11% -16.35% -3.87% -8.97%
2010 -9.20% -15.47% -7.85% -6.91%
The monthly Index Yuan-dollar exchange rate (1 dollar = X yuan) China's central bank announced on June 19 that it would make its exchange rate more flexible. In place of the dollar peg, the yuan will now track a basket of currencies instead.
6.84 6.83 6.82
China made the same decision on July 21, 2005, and the yuan subsequently rose in value. Its appreciation followed a linear path as the basket of currencies was constituted gradually in order to avoid any sudden fluctuations.
6.81 6.80
In the first few months, the yuan rose by around 2-2.5% on an annual basis. Later, as more currencies were added to the basket, the yuan’s rise against the dollar gathered pace.
6.79 6.78
It seems likely that a similar scenario will emerge over the next few months.
6.77 6.76 jan. 2010
feb. 2010
mar. 2010
apr. 2010
may 2010
jun. 2010 jul. 2010 Source: Datastream
www.am.natixis.com
July-August 2010
7
Overwiew of our international Product range Sub funds of the Natixis International F unds (Lux) I SICAV managed by Natixis AM These 7 sub funds of the Natixis International Funds (Lux) I SICAV reflect the key expertise of Natixis Asset Management
Isabelle Delannée-Méric
Natixis Euro Aggregate Plus Fund 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 Capital Euro Aggregate • Minimum recommended investment period: 3 years
I, A I, D R, A R, D
EUR EUR EUR EUR
LU0161120547 LU0391146155 LU0161121271 LU0390502184
Sophie Potard
Natixis Global Inflation Fund Get the most out of diversification in inflation-indexed bonds in a global universe • Investment universe: International inflation-linked bonds • Benchmark: Barclays World Government Inflation linked all maturities Index hedged in euro • Minimum recommended investment period: 2 years • Risk Indicator: Target tracking-error ex ante of 2% (maximum)
H-I, A H-I, D I, A I, D R, A R, D
USD USD EUR EUR EUR EUR
LU0390502267 LU0390502341 LU0255251166 LU0255251596 LU0255251679 LU0255251752
Christine Barbier
Natixis Impact Euro Corporate Bond Fund Benefiting from the SRI expertise of Natixis Asset Management through a socially responsible portfolio of investment grade corporate bonds • 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, A I, D R, A R, D
EUR EUR EUR EUR
LU0155376477 LU0391146072 LU0155380156 LU0390502770
See the full prospectus which is the only legally binding document. See the Legal Information on page 2 for important information about the funds.
8 July-August 2010
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Matthieu Belondrade & François Théret
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: None (MSCI Emerging Europe Index: indicative only) • Minimum recommended investment period: 5 years • Risk Indicator: Target tracking-error ex ante between 6 and 10
I, A I, A I, D R, A R, A R, D
EUR USD USD EUR USD USD
LU0147917792 LU0095830922 LU0095831060 LU0147918923 LU0084288595 LU0084288678
Thierry Cuypers
Natixis Europe Smaller Companies Fund Benefiting from the potential of European Small & Midcaps within the scope of a conviction-based strategy • Investment universe: European Small and Mid Equities •B enchmark: None (MSCI Europe Small Caps NDR: indicative only) •M inimum recommended investment period: 5 years •R isk Indicator: Target tracking-error ex ante between 4 and 7 (indicative)
I, A I, D R, A R, D
EUR EUR EUR EUR
LU0095827381 LU0095828272 LU0064070138 LU0064070211
Olivier Lefèvre
Natixis Euro Value Fund Tapping the potential of Eurozone value equities within the scope of a conviction-based strategy • Investment universe: Eurozone Equities • Benchmark: None (MSCI EMU NDR: indicative only) • Minimum recommended investment period: 5 years
I, A I, D R, A R, D
EUR EUR EUR EUR
LU0389329003 LU0389329185 LU0389329342 LU0389329425
Christine Lebreton
Natixis Impact Europe Equities Fund Active and responsible investing to maximise SRI value added • Investment universe: European equities • Benchmark: None (MSCI Europe: indicative only) • 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. See the Legal Information on page 2 for important information about the funds.
www.am.natixis.com
July-August 2010
9
Overwiew of our international Product range Natixis Asset Management's funds offer a range of expertise and innovation 28 complementary funds covering all asset classes. This quarterly reviewed list of funds aims to highlight Natixis Asset Management's most innovative products and its wide range of expertise.
BalanAltern. Absolute return ced
Equities
Fixed income
Money Market
Asset class Fund name
Share and ISIN code
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
R: FR0007084926
FR0000293714
Natixis Tréso Plus 3 Mois
FR0007075122
Natixis Souverains Euro 1-3
I: FR0010208421
Natixis Souverains Euro 3-5
FR0010036400
Natixis Souverains Euro 5-7
FR0010201699
Natixis Souverains Euro 7-10
FR0000449092
Natixis Souverains Euro
RC: FR0000003196
Natixis Inflation Euro
I: FR0007475413
R: FR0010170944
Natixis Obli Opportunités 12 Mois
I : FR0010796391
R : FR0007493226
Natixis Crédit Euro
I: FR0010171108
R: FR0010690966
Natixis Convertibles Euro
I: FR0010658963
R: FR0010660142
Natixis Convertibles Europe
C: FR0010171678
Natixis Actions Europe Dividende
IC: FR0010582478
RC: FR0010573782
Natixis Impact Life Quality
C: FR0010410274
E: FR0010458539
Natixis Actions Europe Convictions
C: FR0010346429
Natixis Actions US Value
I: FR0010256412
Natixis Actions US Growth
I: FR0010256404
R: FR0010236877
Sonic Monde
I: FR0010555797
RC: FR0000993446
Natixis Actions Global Emergents
I: FR0010711051
R: FR0010706960
Natixis Performance Quant Bond 18 M*
I: FR0010232348
R: FR0010249219
Natixis Performance Swap Arbitrage*
IC: FR0010654921
RC: FR0010657924
Natixis Constellation European Event
IC, $: LU0161071237
IC, €: LU0161073951
Natixis Performance Active Allocation*
R: FR0010236893
IC: FR0010688812
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. * The 'Absolute' range of funds become the 'Performance' range. Further information: consult the Product News on page 13.
10 July-August 2010
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Expertise Focus Money market expertise: what is the best way of integrating socially responsible investment? Natixis Asset Management recently launched a review of its SRI money market management processes, in order to ensure that it has adopted the best possible approach to this specialized investment universe. Explanations...
A specific approach for the banking sector
Natixis AM and SRI investment in brief n
More than 25 years of experience in SRI management n
11,2 billion of AuM in SRI(1) n One of the French and European leaders in SRI
n #1 in SRI corporate savings with a 31.4% market share(2)
n
Like the other Natixis Asset Management money market funds, the SRI money market funds mainly use two distinct strategies to achieve their performance objectives: the credit strategy (selection of securities as a function of spreads and the quality of issuers) and the yield curve strategy (fixed rate/variable rate allocation). The SRI approach essentially intervenes at the choice of issuer level. Natixis Asset Management’s SRI money market portfolios are managed based on an ‘ESG’ selection process which consists of investing in the securities of issuers offering both an attractive risk/return profile and the best Environmental, Social/Societal and Governance practices within their sector. In addition to analysis based on conventional financial criteria, issuer selection also involves extra-financial analysis. The Natixis Asset Management Extra-financial research team has created a rating model specifically for bank issuers which represent a significant proportion of the issuance in the money market investment universe. For a Corporate or Government issuer, the SRI score is based on the three E, S and G scores which are equally weighted (each one third). On the other hand, for a Bank issuer, the social/societal criteria seem the most decisive. Environmental criteria, which are essentially indirect, are currently more difficult to evaluate. The weightings are thus as follows: n Environmental: 15%; n Social/Societal: 50%; n Governance: 35%.
(1) Source: Natixis Asset Management as of the 30/06/2010, open-end funds, mandates and corporate saving schemes. (2) Source: Rapport d’activité du Comité Intersyndical de l’épargne salariale - 12/2009.
Rigorous issuer eligibility criteria within the portfolios The SRI analysis of issuers is based on a number of sources: n External extra-financial rating agencies (e.g.: Vigéo, GMI, Oekom, Innovest); n In-house analysis by the Extra-financial research team. “The analysis of the in-house Extra-financial research team replaces the scores of the external agencies for the scope of the issuers covered, which will gradually encompass the entire investment universe”, explains Hervé Guez, Head of the Extra-financial research team. “Based on these different sources, Natixis Asset Management evaluates each issuer using a sectoral approach enabling the attribution of a SRI recommendation: SRI Conviction, SRI Neutral, SRI Risk or SRI Non Eligible.”
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Natixis Asset Management’s SRI money market funds invest a minimum of 95% of their assets in securities issued: n
By issuers with an 'SRI Conviction' or 'SRI Neutral' recommendation at the time the securities are purchased;
n
Or by ‘SRI money market’ UCITSs (capped at 10% of the fund’s AuM).
Each issuer for whom the recommendation is 'SRI Neutral' at the time the security is purchased may represent no more than 5% of the portfolio's assets under management. The total weighting of issuers without an SRI recommendation is also limited to 5% of the portfolio. Issuers rated ‘SRI Risk’ or ‘SRI Non Eligible’ are not eligible for selection.
SRI money market investment process Fixed rate/variable rate allocation
Monetary policy outlooks
Portfolio construction
SRI selection Financial research
Extra-financial research
Issuer and counterparty eligibility
Selection of issuers Source: Natixis Asset Management
The money market expertise at Natixis AM In terms of AuM, Natixis Asset Management is ranked #2 in France(1) and #4 in Europe in money market management(2). The money market management team brings together 11 fund managers and 2 financial engineers for assets under management of more than €62 billion(3). Characterized by very low staff turnover and an average experience of 13 years, this specialist team has achieved more than 10 years of constant track record. (1) Source: EuroPerformance as of 30/06/2010. (2) Source: FeriFund Market as of 31/05/2010. (3) Source: Natixis AM as of 30/06/2010.
12 July-August 2010
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News Product News 'Absolute' range of funds: change of name n The 'Absolute' range of funds becomes the 'Performance' range of funds Following the expansion of the range to include mutual funds with directional engines, the 'Absolute' Performance(1) range of Natixis Asset Management launched in 2008 is being renamed the 'Performance' range. The funds in the range are also being renamed: the 'Absolute' prefix is being replaced by ‘Performance’. Natixis Absolute Strategic Bond Natixis Performance Strategic Bond Natixis Absolute Quant Bond 12 M Natixis Performance Quant Bond 12 M Natixis Absolute Quant Bond 18 M Natixis Performance Quant Bond 18 M Natixis Absolute Swap Arbitrage Natixis Performance Swap Arbitrage Natixis Absolute Multistratégies(2) Natixis Performance Active Allocation(2)
n What is the aim of this 'Performance' range? The aim is to carry out opportunistic investment that seeks to take advantage of all market configurations, while endeavouring to preserve assets in the current market context and improving the investor’s overall risk/return profile. The selected solutions aim to deliver positive performances that are as independent as possible of market trends, combined with increased risk control: the managers are able to generate positive returns even when markets fall, by implementing short or arbitrage strategies. These funds in the 'Performance' range are similar in terms of their constant pursuit of performance and the flexibility of their investment process, but differ in terms of their specific strategies in distinct investment universes: • Natixis Performance Strategic Bond implements arbitrage and directional strategies over a nine-month horizon by investing in all classes of bond assets. • The two funds Natixis Performance Quant Bond 12 M and 18 M implement arbitrage and directional strategies on fluctuations in the eurozone yield curve (12- and 18-month horizons respectively); • Natixis Performance Swap Arbitrage implements arbitrage strategies on swap curves of OECD rates (24-month horizon); • Natixis Performance Active Allocation (formerly Natixis Absolute Multistratégies) implements arbitrage and directional strategies across all asset classes (24-month horizon).
Natixis AM and sustainable finance Natixis Asset Management has recently participated in numerous events dedicated to sustainable finance as the company is committed to a role in sustainable finance, as attested-to by its positioning and commitments on the SRI and socially-responsible market, which it has pioneered and led for more than 25 years: 11.2 billion euros of SRI-managed assets(1); the front runner in SRI employee savings with 31.4% of market share(2); also the leader in socially-responsible employee savings with 56.5% of market share(3); and the leader in socially responsible investment with 34% of market share(4). Natixis Asset Management also attended the Financial Forum organized by Europlace on 6 and 7 July in Paris. The core topic for this year's discussion was positioning the finance industry in new growth opportunities and Pascal Voisin, Chief Executive Officer of Natixis AM, took part in the round table dedicated to sustainable finance. Natixis AM sees multiple stakes in sustainable finance: channeling investment towards the financing of businesses, encouraging investors to take a long-term view, proposing a solution to the pensions challenge or contributing to the drive for ever-greater transparency in finance. Natixis AM also sees sustainable finance as socially-responsible finance. SRI is an indispensable financial component of this, as are the ESG policies (Environmental, Social/ Societal, Governance) developed by companies. For more information: www.paris-europlace.net/paris2010 (1) Source: Natixis Asset Management at 30/06/2010, in open funds, dedicated funds and employee savings vehicles. (2) Source: Activity report by the trade-unions joint committee on employee savings - 12/2009. (3) Source: AFG at 31/12/2009. (4) Source: 2009 edition of the Finansol professional barometer of sociallyresponsible finance. (5) Source: Novethic – The Essentials of SRI, July 2010.
(1) Notion which the AMF (French Market Authority) limits to mutual funds which can demonstrate a permanent and significant non-directional bias. (2) Natixis Absolute Multistratégies is being renamed Natixis Performance Active Allocation for better reflecting the fund investment objective: benefit from an opportunistic allocation across all asset classes, with a robust process combining fundamental and systematic approaches. It has been launched on 6 March 2009 and by 30 June 2010 had risen by 2.46%, compared to 0.62% in the case of the capitalized Eonia index, with a volatility of 2.69% and above €60 million of assets under management as of 30/06/2010. Source: Natixis Asset Management. Figures mentioned refer to previous years. Past performance does not guarantee future results.
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www.am.natixis.com Natixis Multimanager Subsidiary of Natixis Asset Management A French simplified joint-stock company Share Capital of 7 536 452 € RCS Number 438 284 192 Paris Regulated by AMF under n°GP 01-054 Registered Office: 21 quai d’Austerlitz 75 634 Paris, Cedex 13 - Tel. +33 1 78 40 32 00 www.multimanager.natixis.com
communication-nam@am.natixis.fr - July/August 2010.
Perspectives is a Natixis Asset Management's publication - Natixis Asset Management - Communications Department - Business Development -
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