Loading...
Docoh

Loomis Sayles Funds Ii

Filed: 3 Mar 22, 3:35pm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-06241

 

 

Loomis Sayles Funds II

(Exact name of Registrant as specified in charter)

 

 

888 Boylston Street, Suite 800 Boston, Massachusetts 02199-8197

(Address of principal executive offices) (Zip code)

 

 

Natalie Wagner, Esq.

Natixis Distribution, LLC

888 Boylston Street, Suite 800

Boston, Massachusetts 02199-8197

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (617) 449-2810

Date of fiscal year end: December 31

Date of reporting period: December 31, 2021

 

 

 


Item 1. Reports to Stockholders.

 

(a)

The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:


LOGO

 

LOGO

 

Annual Report

December 31, 2021

Loomis Sayles International Growth Fund

Natixis Oakmark Fund

Natixis Oakmark International Fund

Natixis U.S. Equity Opportunities Fund

Vaughan Nelson Mid Cap Fund

Vaughan Nelson Small Cap Value Fund

 

Table of Contents

Portfolio Review  1 
Portfolio of Investments  32 
Financial Statements  44 
Notes to Financial Statements  75 

 

LOGO


LOOMIS SAYLES INTERNATIONAL GROWTH FUND

 

Manager  Symbols  
Aziz V. Hamzaogullari, CFA®  Class A  LIGGX
Loomis, Sayles & Company, L.P.  Class C  LIGCX
  Class N  LIGNX
  Class Y  LIGYX

 

 

Investment Goal

The Fund’s investment goal is long-term growth of capital.

 

 

Market Conditions

International equities posted mixed results in 2021. The developed markets performed reasonably well, as investors reacted positively to rising vaccination rates and improving economic growth. In addition, world central banks maintained highly stimulative monetary policies for the majority of the year. Europe led the way, with notable strength for Switzerland, the UK and the oil-sensitive Nordic countries. Canada, which also has an above-average weighting in energy stocks, was another top performer for the year. However, Japan and other Asian markets lagged on a relative basis.

International equities trailed the US market for the fourth consecutive year, largely as a result of the lower representation of technology stocks outside of the US. The weakness in foreign currencies relative to the US dollar also took a sizable bite out of the developed markets’ returns for US-based investors in 2021.

Despite the positive showing for stocks elsewhere in the world, the emerging markets experienced a challenging year and finished with a loss. Improving global growth and higher commodity prices were tailwinds for the asset class, but these factors were outweighed by the prospect of rising US interest rates and strength in the US dollar. The slower vaccination rollout in many emerging countries was a further impediment to returns. China, which lagged considerably due to the combination of slowing growth, increased regulation and disruptions in the nation’s property market, was a key driver of the category’s underperformance.

Portfolio Results

For the 12 months ended December 31, 2021, Class Y shares of the Loomis Sayles International Growth Fund returned -3.81% at net asset value. The Fund underperformed its benchmark, the MSCI All Country World Index ex USA Index (Net), which returned 7.82%.

Explanation of Fund Performance

We are an active manager with a long-term, private equity approach to investing. Through our proprietary bottom-up research framework, we look to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth when they trade at a significant discount to intrinsic value. Given the rare confluence of quality, growth, and valuation, we may study dozens of companies but may only invest in a select few businesses each year. We believe identifying those few businesses with these characteristics is an art, not a science. As a result of this rigorous approach, ours is a selective, high-conviction portfolio of typically 30–45 names.

The Fund’s positions in Alibaba, Vipshop, and Tencent detracted the most from performance. Stock selection in the consumer discretionary, communication services, consumer staples, and energy sectors, as well as our allocations in the consumer discretionary, energy, communication services, consumer staples, industrials, and healthcare sectors detracted from relative performance.

A Fund holding since inception, Alibaba Group is a leading China e-commerce and consumer-engagement platform provider. With approximately 60% of China’s e-commerce transactions estimated to take place through its marketplaces, Alibaba is the world’s largest retail platform, and we believe Alibaba’s scale and interconnected sites create an unparalleled and difficult-to-replicate business ecosystem. Shares have been under pressure since late 2020 due to investor concern regarding increasing regulatory intervention by the Chinese government. In April, China’s State Administration for Market Regulation (SAMR) concluded that Alibaba’s practices had violated antitrust law. The company was fined approximately $2.8 billion and ordered to carry out “comprehensive” self-inspections to standardize business practices and ensure compliance with anti-monopoly laws. Alibaba cooperated fully with the investigation and has changed certain business practices. In August, China passed the Personal Information Protection Law (PIPL), which is focused on protecting personal information rights and interests by standardizing the handling and usage of personal information by businesses. We believe the focus of PIPL is similar to the General Data Protection Regulation (GDPR), which went into effect in the European Union in 2018. The GDPR impacted companies we own in other portfolios such as Alphabet and Facebook, which incurred increased compliance costs and other disruptions as they adjusted certain business practices to comply with the new regulations. However, both companies continued to generate strong growth in revenue and free cash flow due to their competitive advantages and strong value

 

1  |


 

propositions. While we expected that Alibaba would experience short-term disruptions as it modified its practices to fully comply with new regulatory changes, we did not believe the changes would ultimately impair the company’s difficult-to-replicate competitive advantages. More recently, we have observed increasing competitive pressure in two of the company’s smaller but faster-growing contributors: video streaming and penetration in lower-tier cities. Through the company’s Taobao Live, Alibaba offers a leading live-streaming social commercial platform, enabling merchants to interact with consumers. The relatively new medium has become a fast-growing vehicle for e-commerce sales, growing from less than 5% of China e-commerce two years earlier to almost 10% in 2020. While Alibaba continues to have a leadership position in live streaming and short video production, we have seen increased competition and market share gains from companies such as Douyin (China’s version of TikTok, owned by ByteDance) and Kuaishou. We expect this newer format will grow to represent approximately 25% of e-commerce sales over time. And while we expect Alibaba to remain a leader, we expect growing competition to take an increasing share of this fast-growing market over time. Growing competitive intensity has also impacted our assessment of Alibaba’s ongoing penetration of lower-tier cities. As internet access in lower-tier cities approaches that of higher-tier cities, we expect growth in e-commerce to be approximately twice that of overall China e-commerce growth. We believe Alibaba maintains leading market share in lower-tier cities, but is likely to face heightened competition from companies such as Pinduoduo, JD.com, and Meituan. We have long assumed that Alibaba’s disproportionate share of China e-commerce would decline, from over 80% at the time of our initial analysis in 2013, to a level closer to 50% of a still-growing market. While the company remains the dominant e-commerce platform in China, we estimate that a meaningful percentage of the company’s incremental growth in the most-recently reported quarter was from these markets where we are seeing signs of heightened competitive intensity. As a function of newer market entrants, faster growth from newer formats of e-commerce and lower-tier cities, and recent regulatory changes, we now expect the company’s market share to normalize at a lower level than we previously expected. While our ongoing analysis has lowered our assessment of intrinsic value for the company, it has not changed our assessment that Alibaba is a high-quality company that remains well positioned to benefit from secular growth in China e-commerce over our long-term investment horizon. We continue to believe that Alibaba trades at a discount to intrinsic value and offers asymmetric reward-to-risk. However, given our most recent analysis, it no longer justified the same degree of capital allocation relative to other opportunities, and we decreased our position size during the period.

Vipshop is a specialty internet retailer focused on off-season, off-price apparel and fashion items which it sells via flash sales. Founded in 2008 with the vision of introducing high-quality, branded fashion merchandise to the China market at value prices, the company is by far the largest flash retailer in China, and the largest player in the off-season, off-price category. In 2020, the company generated over $15 billion in net revenues across its core categories, and today the company is the 5th largest overall retailer in China. We believe that Vipshop creates a strong value proposition for both end customers and vendors alike, which in turn creates a strong network effect that has been difficult to replicate even by the largest e-commerce companies in China. A holding in the strategy since inception, Vipshop’s revenue growth decelerated throughout 2021, but still grew 27% year-over-year through the first three quarters, compared with an estimated 18.5% for total China e-commerce and 21% for the apparel and accessories category, indicating that the company continued to grow market share. The company provided guidance for lower-than-expected revenue growth in the fourth quarter, driven by a deterioration in China’s economic environment and weakening consumer sentiment. Shares have been under pressure throughout the year, first from the forced liquidation of Archegos Capital Management, which had Vipshop among its holdings, then from investor concern regarding increasing regulatory intervention by the Chinese government, and most recently from a slowdown in consumer demand in China. We believe that Vipshop remains a high-quality business benefiting from competitive advantages of brand, scale, and a positive network effect that should enable it to expand its market share as the leading discount branded apparel retailer in China. Further, management believes that the new regulatory restrictions on anti-competitive actions, such as merchant exclusivity provisions, will now enable merchants who were previously unable to sell through Vipshop to use its platform — further expanding its network. While the Covid-19 outbreak and resulting economic weakness have pressured growth over the past year, especially in the company’s smaller physical retail footprint, we believe the company’s reported growth rates reflect the resilience of the business, and that Vipshop will continue to benefit from structural growth in China e-commerce where it has a strong and defensible position in the off-season, off-price niche in which it competes. We believe the current market price embeds expectations for free cash flow growth that are well below our long-term assumptions. With its shares trading at a significant discount to our estimate of intrinsic value, we believe Vipshop offers a compelling reward-to-risk opportunity. We added to our position during the period.

Tencent Holdings is one of the largest internet services companies in China and globally, offering a wide array of value-added services that span social networking and communication, gaming, media and entertainment, and e-commerce and local services. The company also offers online advertising, cloud services, fintech solutions that include payment and wealth management offerings, and has investments in other related businesses. Founded in 1998, the company’s mission is to improve the quality of human life through internet services, and through its platform and ecosystem the company has become a leader in most segments of the internet industry in China. A Fund holding since inception, Tencent reported financial results during the period that were fundamentally solid but mixed with respect to consensus expectations, and growth decelerated due in part to macro and regulatory headwinds. Shares have been under pressure throughout the year due to investor concern regarding increased regulatory intervention by the Chinese government in a growing number of industries, including the internet, fintech, education, and gaming. In July, China’s SAMR fined

 

|  2


LOOMIS SAYLES INTERNATIONAL GROWTH FUND

 

the company $1.5 billion for practices within its streaming music business. The fine represented a small portion of the approximately $40 billion of cash on Tencent’s balance sheet. In fintech, we believe regulatory changes are likely to result in increased licensing requirements and guidelines around consumer and micro lending, information sharing, and disclosures, all of which are focused on reducing systematic risk and promoting healthy market development. We believe Tencent is generally compliant with most of the proposed changes, and we do not expect these developments to impact its competitive position. Most recently, China implemented restrictions on the amount of time minors can spend playing online games. Tencent management has embraced the new regulatory framework and highlighted the tools and restrictions it has introduced over the past several years to enable parents to manage minors’ gaming activity and limit both time spent and spending levels – in addition to announcing further restrictions. While gaming represents the company’s single largest source of revenue, approximately 40% of revenue in 2020, we believe the potential impact to the company is small as children under 16 accounted for less than 3% of the company’s gaming revenues. We do not believe that the fine or any of the proposed regulations materially impact Tencent’s strong and sustainable competitive advantages, which include its massive network and ecosystem, distribution, scale, and brand. We believe Tencent is one of the best-positioned companies in the China internet services industry. We believe the near-term uncertainty regarding the regulatory environment does not change the long-term fundamentals; as a leading consumer platform provider, we believe the structural expansion of internet users in China will position Tencent to benefit from multiple growth drivers including gaming, media, advertising, payments, and cloud-computing growth. We believe Tencent’s strong growth prospects are not currently reflected in its share price. As a result, we believe the company’s shares are trading at a significant discount to our estimate of intrinsic value, offering a compelling reward-to-risk opportunity.

The Fund’s positions in Wisetech Global, Novo Nordisk, and Roche contributed the most to performance. Stock selection in the information technology, healthcare, and industrials sectors, along with our allocation in the information technology sector, contributed positively to relative performance.

Wisetech Global is the leading software solutions provider to the global logistics industry. Founded in 1994 to provide freight-forwarding and customs software to the Australian logistics industry, Wisetech solutions are used in whole or in part by over 85% of the world’s 50 largest third-party logistics providers (3PLs) and all of the 25 largest freight forwarders, led by the company’s primary SAAS (software-as-a-service) platform, CargoWise One (CW1). From a single unified platform the company offers function-specific and enterprise-wide modules that support the complex international movement of goods and create substantial efficiencies for its logistics clients. The company’s vision is to become the world’s operating system for global logistics. A holding since Fund inception, Wisetech’s most-recently reported financial results, for its fiscal year ending June 2021, exceeded consensus expectations for revenue, EBITDA (earnings before interest, taxes, depreciation, and amortization), and EPS, and the company provided strong revenue and margin guidance for the current fiscal year. Total revenues increased 18% over the prior-year period and included 12% year-over-year revenue growth from the company’s existing customers, with every calendar-year cohort of new clients showing growth over the prior year, continuing a multi-year trend. The company also had a very successful year signing large new forwarders to its CW1 platform with six wins during the period, and now has 10 of the top 25 that have rolled out CW1 as their global platform or are in the process of doing so. We believe Wisetech benefits from strong and sustainable competitive advantages that include an installed client base with high switching costs, its freight-forwarding industry expertise, significant investments in research and development (R&D), its brand, and network. We believe Wisetech will benefit from secular growth in logistics software and services as companies increasingly move towards outsourcing and away from less effective in-house solutions. With virtually no comparable off-the-shelf competition to its unified global platform, Wisetech is the dominant market share leader in its legacy freight-forwarding market, which still represents only a mid-single-digit share of the overall global logistics and transportation market spending on supply chain management solutions. Through underlying industry growth, continued market share gains in its legacy freight-forwarding market, and ongoing penetration of other parts of the logistics industry performed by 3PLs, including warehouse management, land transportation, and cargo handling, we believe the company can generate compounded annual revenue growth in the high teens over our long-term investment horizon, with faster growth in operating profits and free cash flow as the company benefits from scale and operating leverage. We believe the expectations embedded in Wisetech’s share price continue to underestimate the company’s superior positioning and the sustainability of its growth. As a result, we believe the shares trade at a meaningful discount to our estimate of intrinsic value and represent an attractive reward-to-risk opportunity.

Headquartered in Denmark, Novo Nordisk is a global healthcare company with nearly 100 years of innovation and leadership in diabetes care. Over this time, Novo has amassed unparalleled experience in the biology of diabetes, expertise in protein science, and developed significant competitive advantages as a result. Its diabetes products have captured approximately one-third of the global branded diabetes care market and account for about 80% of the company’s annual revenues. In its biopharmaceutical business segment, which represents almost 15% of annual revenues, Novo Nordisk has leading positions within hemophilia care, growth hormone therapy, and hormone replacement therapy. We believe Novo’s strong and sustainable advantages include its deep experience in diabetes care and therapeutic proteins, strong infrastructure that took decades to build, efficient manufacturing techniques, a robust pipeline, and economies of scale. A Fund holding since inception, Novo reported solid operating results throughout the period that

 

3  |


 

were generally ahead of consensus expectations and reflected a rebound in activity that was depressed in the prior-year period due to Covid-19. In particular, growth was led by the company’s GLP-1 class of therapies — a quickly growing class of non-insulin, anti-diabetic treatments that can postpone the need for insulin for two to four years. Novo’s class-leading Ozempic, a once-weekly therapy with comparable safety and superior efficacy to existing therapies, has contributed to greater penetration of the GLP-1 market as well as share gains from its leading competitor, while Rybelsus, an oral version of Ozempic and the company’s newest GLP-1 innovation, has quickly captured almost 13% of all new prescriptions after its launch in late 2019. In addition to targeting diabetes with its GLP-1s, during the year, Novo received approval for semaglutide (the same molecule behind Ozempic and Rybelsus) in the obesity setting under the brand name Wegovy. While the company is navigating operational challenges that have limited the initial production of Wegovy, the company is seeing robust early demand. Diabetes is a global epidemic with an estimated population of 460 million. The market has been growing annually in the low double digits over the last ten years, driven by aging of the global population and increasing obesity. We believe Novo’s deep experience in diabetes care, differentiated product suite, and leading innovation should enable the company to grow revenues in the high single digits over our long-term investment horizon, with faster growth in free cash flow. We believe the company’s shares continue to sell at a meaningful discount to our estimate of intrinsic value and offer an attractive reward-to-risk opportunity.

Founded in Basel, Switzerland in 1896, Roche is a global biopharmaceutical and diagnostics company. An industry leader in the development and marketing of oncology products, Roche also has a broad product profile with industry-leading therapies and a robust development pipeline across major indications including immunology, infectious disease, ophthalmology, and neuroscience. We believe Roche has substantial and sustainable competitive advantages that include its expertise and reputation within oncology, an integrated diagnostics business, its biologics capability, and its commercialization experience which includes its regulatory experience and scale in manufacturing and distribution. A Fund holding since inception, Roche reported results during the period that were fundamentally solid and generally ahead of consensus expectations. The company benefited from faster growth in its smaller diagnostics division, where its success in rapid development and deployment of Covid-19 testing has highlighted its leadership position in the diagnostics market and has provided a valuable offset to the pandemic-related pressures in the pharmaceuticals division. While we expect pandemic-related demand to wane in the short-to-medium term, we believe the true long-term value of the diagnostics business will persist as it resides in its ability to support and differentiate the innovation within the company’s pharmaceuticals business. In pharmaceuticals, continued strength in the company’s more-recently launched growth products, including Ocrevus for multiple sclerosis and Hemlibra for hemophilia A, more than offset the ongoing decline in its mature oncology products. We believe Roche is successfully managing the inevitable decline for its leading off-patent oncology therapies, advancing its next-generation cancer therapy franchise through innovative follow-on and combination therapies as well as improved administration methods, and products launched since 2012 have collectively grown to reach 52% of sales as of the company’s most-recently reported financial results. In addition to its more-recently launched growth products, we believe Roche’s deep internally developed pipeline, which reflects over $100 billion invested in R&D over the past decade, combined with its ability to identify and capitalize on externally developed technologies such as its acquisition of Spark Therapeutics’ gene therapy platform, provides a significant platform for future growth. We believe Roche continues to execute well operationally, redeploying the cash flows from its mature core franchise to support product extensions and ongoing innovation. The company has a strong lineup of marketed biologic therapies, a growing suite of newly introduced products, and significant and robust pipeline assets that can drive significant long-term value for Roche. While the company now faces biosimilar competition in the US for its mature oncology franchise, we believe the current market price for Roche shares embeds expectations for key revenue and cash flow growth drivers that are well below our long-term assumptions. As a result, we believe the company is selling at a significant discount to our estimate of intrinsic value and offers a compelling reward-to-risk opportunity.

All aspects of our quality-growth-valuation investment thesis must be present simultaneously for us to make an investment. Often our research is completed well in advance of the opportunity to invest. We are patient investors and maintain coverage of high-quality businesses in order to take advantage of meaningful price dislocations if and when they occur. During the period we initiated a new position in CRISPR Therapeutics. We added to our existing holdings in Vipshop. We trimmed our existing positions in Alibaba, Kweichow Moutai, and Yum China. We also trimmed our position in MercadoLibre as it approached our maximum allowable position size. We sold our position in Kuehne + Nagel as it reached our view of intrinsic value.

Outlook

Our investment process is characterized by bottom-up fundamental research and a long-term investment time horizon. The nature of the process leads to a lower-turnover portfolio in which sector positioning is the result of stock selection. The Fund ended the year with overweight positions in the consumer staples, healthcare, consumer discretionary, information technology, and communication services sectors and was underweight in the industrials and energy sectors. We had no exposure to stocks in the financials, materials, utilities, or real estate sectors. From a geographic standpoint we were overweight in Europe and North America, underweight in developed Asia, and approximately equal weight in emerging markets.

 

|  4


LOOMIS SAYLES INTERNATIONAL GROWTH FUND

 

Hypothetical Growth of $100,000 Investment in Class Y Shares3

December 15, 2020 (inception) through December 31, 2021

 

LOGO

Top Ten Holdings as of December 31, 2021

 

  
Security Name % of
Net Assets
 
 1  

Roche Holding AG

  6.81
 2  

WiseTech Global Ltd.

  6.00
 3  

MercadoLibre, Inc.

  5.97
 4  

Adyen NV

  5.73
 5  

Tencent Holdings Ltd.

  5.50
 6  

Novartis AG, (Registered)

  4.79
 7  

Kweichow Moutai Co. Ltd., Class A

  4.28
 8  

Nestle S.A., (Registered)

  4.08
 9  

Novo Nordisk A/S, Class B

  3.97
 10  

Experian PLC

  3.76

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

 

5  |


 

Average Annual Total Returns — December 31, 20213

 

    
    

1 Year

   Life of Fund   Expense Ratios4 
  Gross  Net 
   
Class Y (Inception 12/15/20)        
NAV   -3.81   -2.38   1.35  0.95
   
Class A (Inception 12/15/20)        
NAV   -4.07    -2.64    1.60   1.20 
With 5.75% Maximum Sales Charge   -9.60    -8.01     
   
Class C (Inception 12/15/20)        
NAV   -4.79    -3.37    2.35   1.95 
With CDSC1   -5.72    -3.37     
   
Class N (Inception 12/15/20)        
NAV   -3.77    -2.34    1.26   0.90 
  
Comparative Performance        
MSCI ACWI ex USA Index (Net)2   7.82    9.89          

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Performance for Class C shares assumes a 1% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase and includes automatic conversion to Class A shares after eight years.

 

2

The MSCI ACWI ex USA Index (Net) captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 27 Emerging Markets (EM) countries. With 2,361 constituents, the index covers approximately 85% of the global equity opportunity set outside the US.

 

3

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

4

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/22. When a Fund’s expenses are below the limitation, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Fund’s expense limitations.

 

|  6


NATIXIS OAKMARK FUND

 

Managers Symbols
William C. Nygren, CFA® Class A    NEFOX
Kevin G. Grant, CFA®* Class C    NECOX
M. Colin Hudson, CFA® Class N    NOANX
Michael J. Mangan, CFA® Class Y    NEOYX
Michael A. Nicolas, CFA® 
Harris Associates L.P. 

 

*

Effective January 1, 2022 Kevin G. Grant no longer serves as portfolio manager of the Fund.

 

 

Investment Goal

The Fund seeks long-term capital appreciation.

 

 

Market Conditions

Global markets moved higher in the first quarter of 2021 as vaccines reached more and more people. In the United States, newly elected US President Joe Biden signed off on his economic stimulus plan in March. The $1.9 trillion relief package sent $1,400 payments to qualifying Americans and extended unemployment benefits. In response, the Dow Jones Industrial Average and S&P 500® Index soared to record highs. By the end of the second quarter, global cases surpassed 180 million and global deaths approached 4 million. However, more than 800 million people reached full vaccination, representing about 10% of the global population.

That said, a new wave of Covid-19 cases brought on by the Delta variant resulted in a slowdown in economic reopenings around the world as well as new economic restrictions in Asia and Australia. Simultaneously, the Chinese government implemented increased regulations on a range of businesses, including technology companies, prompting unease across global markets. Later, energy suppliers rushed to ramp up production to meet growing demand. However, a supply shortage and bottlenecks at major US ports sent US oil prices in excess of $85 per barrel for the first time since 2014. Natural gas prices also spiked around the world, forcing the suspension of operations at factories in Europe and China. A shortage of semiconductors, in particular, significantly impaired worldwide automobile production. Simultaneously, the new and highly contagious Omicron variant of Covid-19 spread in the fourth quarter as countries across Europe implemented restrictions once again to combat the spread of the disease.

As previously announced, the Federal Reserve slowed its pace of asset purchases in November. The tapering came as the rate of inflation in the US quickened to 6.8% versus the year-ago period. The Fed’s dot plot now calls for three rate hikes each in 2022 and 2023. The Bank of Japan and European Central Bank echoed similar sentiments as they also left interest rates unchanged, while the Bank of England raised its main interest rate from 0.1% to 0.25% following a surge in UK inflation to a 10-year high of 5.1% annual growth in November. All things considered, the International Monetary Fund (IMF) slightly lowered its expectations for global economic growth from 6.0% to 5.9%, with a 4.9% growth rate expected in 2022. The IMF also lowered its outlook for economic growth in the US, Japan and China by 1.0%, 0.4% and 0.1% in October, but raised its estimates for growth in the euro zone by 0.4%.

Performance Results

For the 12 months ended December 31, 2021, Class Y shares of the Natixis Oakmark Fund returned 34.35% at net asset value. The Fund outperformed its benchmark, the S&P 500® Index, which returned 28.71%.

Explanation of Fund Performance

As value investors with an emphasis on individual stock selection, our sector weights are a byproduct of our bottom-up process. On an absolute-return basis, the energy sector gained the most value, while holdings in the consumer staples sector delivered the smallest positive collective return.

The leading contributors to fund performance for the year were Alphabet and Gartner. Toward the beginning of 2021, Alphabet’s fourth-quarter results showed faster than expected revenue growth across the board. Total revenue grew 23% year-over-year and reached $56.9 billion, which led to earnings per share of $22.30, and both exceeded market expectations. Revenue in the key search segment grew 17%, owing to “broad-based re-engagement” among advertisers following the Covid-19-related pullback. Importantly, for the first time Alphabet disclosed cloud segment profitability and revealed that the company made massive upfront investments in its go-to-market strategy and engineering resources, implying that the remaining segments are even more profitable than most analysts expected. Later, Alphabet’s results continued to positively surprise the market as the company’s first-quarter total revenue, operating income and earnings per share outpaced expectations by 7%, 39% and 67%, respectively. By segment, search revenue grew 30%,

 

7  |


 

YouTube advertising revenue rose 49% and cloud revenue increased 46%. Furthermore, margin trends improved across all segments as underlying operational expenses appear progressively well controlled relative to history. In July, Alphabet’s second-quarter earnings report showed that revenue grew by 62%, again surpassing consensus expectations, and search revenue saw significant growth with a 67% increase year-over-year. Alphabet’s third-quarter earnings release resulted in the company’s share price moving higher into the end of the year. Reported revenue growth amounted to 41% and operating margins (ex-other bets) expanded 670 basis points. In addition, search and YouTube advertising revenue both grew over 40%. Management bought back $12.6 billion worth of stock in the third quarter, which puts the company on pace to meet our expectations for the full-year period. Although Alphabet’s share price declined on news that YouTube TV subscribers lost access to Disney-owned entertainment options, the issue resolved itself shortly thereafter. We believe Alphabet remains an attractive holding with upside potential despite its recent share price appreciation.

In February 2021, Gartner released positive fourth-quarter results, in our view. Revenue modestly surpassed consensus estimates; however, adjusted earnings of $245 million far exceeded expectations of $170 million. Significant margin improvement drove the company’s outperformance despite the disappearance of much of its conferences business, with underlying margins adjusted for conferences expanding by roughly 600 basis points. In May, Gartner reported first-quarter results that were solid, in our assessment. Reported revenue rose 8.4%, adjusted earnings advanced 50% and earnings per share grew nearly 67% from the prior year. We were most impressed that the earnings margin expanded to 29% in the quarter, a solid jump up from the previous typical level in the high teens. We also liked that revenue in both segments, global business sales and global technology sales, increased by 12% and 5%, respectively, despite reduced growth of investment spending and continued challenges from legacy product shutdowns in the global business sales segment. Later, following a strong second-quarter earnings report, Gartner’s share price advanced and finished the third quarter higher. Revenue ($1.17 billion versus $1.12 billion), adjusted earnings ($355 million versus $273.9 million) and earnings per share ($2.24 versus $1.73) all bested consensus estimates. Importantly, we appreciate that top line results are accelerating with improving sales force productivity driving growth. The company also increased its share repurchase authorization by $800 million in the second quarter. Prior to the report, we met with CEO Gene Hall and CFO Craig Safian. We came away impressed with the management team’s enthusiasm and conviction in their vision for the company’s future. We particularly like that Hall is a multi-faceted operator with a history of both consistently enhancing products to drive incremental customer demand and tightly managing the sales organization through significant growth. Strong performance continued toward the end of the year when Gartner released its third-quarter results that showed further organic growth as well as increased sales force productivity, which we believe has promising implications for underlying profitability. In addition, third quarter adjusted earnings of $305 million beat consensus expectations by $50 million. Even accounting for its recent price increase, we believe Gartner still offers a healthy amount of upside potential.

T-Mobile US and Fiserv were the largest detractors from Fund performance for the calendar year. T-Mobile US reported fourth-quarter revenue, adjusted earnings and earnings per share that were better than the market had expected. We were pleased that the company continued to outgrow its industry and achieved significant merger benefits faster than had been expected, realizing $1.3 billion of savings in 2020. We found it very important that the company continued to make headway in this buildout as we believe a large amount of T-Mobile’s growth potential rests on the expansion of its new network. We were further impressed that despite the company’s rapid network development, full-year 2020 free cash flow reached $3 billion, which far exceeded our estimates. In May, the company’s first-quarter earnings report showed above-consensus estimate numbers for customer additions and adjusted earnings, while also leading the industry across all customer metrics. We also appreciated the low brand churn the company boasted in comparison to competitors. Later in the year, T-Mobile’s second-quarter earnings report included results that aligned with our expectations. Post-paid net additions bested consensus estimates, service revenue growth of almost 6% led the industry and adjusted earnings exceeded analysts’ estimates. We thought the company’s third-quarter earnings results were impressive given that T-Mobile is at a peak point in its integration with Sprint and is operating in an elevated competitive environment. We appreciated that accounts grew 3.9% and organic service revenue grew 4.5%, both of which led the industry. In addition, management raised its guidance across the board, and the company’s adjusted earnings guidance now aligns with our estimates. We believe the valuation for T-Mobile remains attractive, offering a compelling reason to own.

Even though Fiserv’s first-quarter earnings disappointed investors, we saw the results as respectable considering the challenging operating environment. Importantly, organic revenue grew 4% from the prior year, earnings rose 15% and earnings per share advanced 18%. In merchant acquiring organic growth amounted to 8% and margins improved 650 basis points, while gross payment volume in Clover (Fiserv’s cloud-based point-of-sale product) grew 36%, ecommerce transactions grew 24% and the company won a record number of new customers during the period. In addition, we were pleased that Fiserv executed $612 million worth of share repurchases in the quarter (or about 0.8% of it share base). Later, Fiserv delivered strong second-quarter earnings results as exhibited by revenue, earnings and earnings per share that increased 18%, 41% and 47%, respectively. In addition, margins expanded 510 basis points to 33.9%. However, news that Amazon was reportedly developing a point-of-sale solution pressured Fiserv’s share price in September as investors feared increased competition. Fiserv’s third quarter earnings results were in line with market estimates, with organic revenue growth of 10%, operating margins increasing 130 basis points and adjusted earnings per share growing 23%. However, investors reacted poorly to the release, focusing on a client (speculated to be Stripe) that was part of a joint venture with Wells Fargo, which is serviced by Fiserv, deciding to leave. This likely stoked fears that other companies may decide to insource their payment

 

|  8


NATIXIS OAKMARK FUND

 

processing in the future. The departure is not expected to impact Fiserv’s financial results due to its minimal contribution and management anticipating the move. Despite the client loss, we appreciate that Fiserv still posted strong segment results and growth in customers, independent software vendors, and capabilities on its platform. We continue to believe the company is undervalued and find the investment attractive on a risk-to-reward basis.

Outlook

With seemingly constant uncertainty in politics, economics and market sentiment, we focus on finding undervalued and well-managed companies that will benefit from economic tailwinds while proving capable of weathering difficult environments. We believe this approach best services our goal of growing and protecting our investors’ capital over the long term.

Hypothetical Growth of $100,000 Investment in Class Y Shares3

December 31, 2011 through December 31, 2021

LOGO

Top Ten Holdings as of December 31, 2021

 

  
Security Name % of
Net Assets
 
 1  

Alphabet, Inc., Class A

  3.53
 2  

Ally Financial, Inc.

  3.33
 3  

EOG Resources, Inc.

  2.89
 4  

Capital One Financial Corp.

  2.86
 5  

Charles Schwab Corp. (The)

  2.80
 6  

Gartner, Inc.

  2.51
 7  

Meta Platforms, Inc., Class A

  2.45
 8  

Citigroup, Inc.

  2.43
 9  

Goldman Sachs Group, Inc. (The)

  2.32
 10  

Humana, Inc.

  2.29

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

 

9  |


Average Annual Total Returns —December 31, 20213

 

      
    1 Year   5 Years   10 Years   Life of
Class N
   Expense Ratios4 
  Gross  Net 
   
Class Y            
NAV   34.35   15.35   15.35      0.95  0.80
   
Class A            
NAV   33.97    15.05    15.05        1.20   1.05 
With 5.75% Maximum Sales Charge   26.25    13.70    14.37         
   
Class C            
NAV   32.99    14.20    14.37        1.95   1.80 
With CDSC1   31.99    14.20    14.37         
   
Class N (Inception 5/1/17)            
NAV   34.54            15.48    1.05   0.75 
  
Comparative Performance            
S&P 500® Index2   28.71    18.47    16.55    18.02          

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Performance for Class C shares assumes a 1.00% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase and includes automatic conversion to Class A shares after eight years.

 

2

S&P 500® Index is a widely recognized measure of U.S. stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors. It also measures the performance of the large cap segment of the U.S. equities market.

 

3

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

4

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/23. When a Fund’s expenses are below the limitations, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Fund’s expense limitations.

 

|  10


NATIXIS OAKMARK INTERNATIONAL FUND

 

Managers Symbols
David G. Herro, CFA® Class A    NOIAX
Michael L. Manelli, CFA® Class C    NOICX
Harris Associates L.P. Class N    NIONX
 Class Y    NOIYX

 

 

Investment Goal

The Fund seeks long-term capital appreciation.

 

 

 

Market Conditions

Global markets moved higher in the first quarter of 2021 as vaccines reached more and more people. In the United States, newly elected US President Joe Biden signed off on his economic stimulus plan in March. The $1.9 trillion relief package sent $1,400 payments to qualifying Americans and extended unemployment benefits. In response, the Dow Jones Industrial Average and S&P 500® Index soared to record highs. By the end of the second quarter, global cases surpassed 180 million and global deaths approached 4 million. However, more than 800 million people reached full vaccination, representing about 10% of the global population.

That said, a new wave of Covid-19 cases brought on by the Delta variant resulted in a slowdown in economic reopenings around the world as well as new economic restrictions in Asia and Australia. Simultaneously, the Chinese government implemented increased regulations on a range of businesses, including technology companies, prompting unease across global markets. Later, energy suppliers rushed to ramp up production to meet growing demand. However, a supply shortage and bottlenecks at major US ports sent US oil prices in excess of $85 per barrel for the first time since 2014. Natural gas prices also spiked around the world, forcing the suspension of operations at factories in Europe and China. A shortage of semiconductors in particular significantly impaired worldwide automobile production. Simultaneously, the new and highly contagious Omicron variant of Covid-19 spread in the fourth quarter and countries across Europe implemented restrictions once again to combat the spread of the disease.

As previously announced, the Federal Reserve slowed its pace of asset purchases in November. The tapering came as the rate of inflation in the United States quickened to 6.8% versus the year-ago period. The Fed’s dot plot now calls for three rate hikes each in 2022 and 2023, and two in 2024. The Bank of Japan and European Central Bank echoed similar sentiments as they also left interest rates unchanged, while the Bank of England raised its main interest rate from 0.1% to 0.25% following a surge in UK inflation to a 10-year high of 5.1% annual growth in November. All things considered, the International Monetary Fund (IMF) slightly lowered its expectations for 2021 global economic growth from 6.0% to 5.9%, with a 4.9% growth rate expected in 2022. The IMF also lowered its outlook for 2021 economic growth in the United States, Japan and China by 1.0%, 0.4% and 0.1% respectively in October, but raised its estimates for growth in the euro zone by 0.4%.

Performance Results

For the 12 months ended December 31, 2021, Class Y shares of the Natixis Oakmark International Fund returned 8.97% at net asset value. The Fund underperformed its benchmark, the MSCI World ex USA Index (Net), which returned 12.62%.

Explanation of Fund Performance

Geographically, the Fund’s average weightings for the year were 83% in Europe, 3% in Canada and 3% in Australia. The remaining positions were in Japan, China, South Africa, South Korea, India, Mexico and Indonesia.

On an absolute-return basis, shares in the energy sector produced the largest positive collective return, while the consumer staples sector lost the most value.

The top contributors to the yearly return were Glencore and Lloyds Banking Group. Early in the year, Glencore’s full-year results showed that adjusted earnings in both the industrials and marketing segments exceeded our expectations by 10% and 4%, respectively. Full-year total adjusted earnings of $11.56 billion were also better than market estimates of $10.69 billion. The industrials segment benefited from both a recovery in commodities prices from Covid-19 lows and higher production. Management also proposed a $0.12 per share dividend, which surpassed analysts’ estimates for $0.0625 per share. Later, Glencore’s share price increased after the company released its first-quarter production report late in April, which showed that copper production increased 2.7% year-over-year. Glencore continued to outperform expectations in the third quarter, benefiting from rising commodity prices and a disciplined cost program. Copper, the company’s most important commodity, is benefiting from rising production and lower costs. Glencore held its annual investor day in December, where the company reinforced its plan to emphasize low-cost, large-scale assets in future-facing commodities, while responsibly running down its coal business over time. We appreciate management’s focus on increasing

 

11  |


 

risk-adjusted returns by exiting assets that require a lot of management’s time, are in high-risk jurisdictions, have limited mine-life or face other constraints while not being material financial contributors. Prior to the company’s investor day, we spoke with Chairman Kalidas Madhavpeddi who possesses a solid background within the industry, in our view. He emphasized his appreciation for Glencore’s anti-bureaucratic culture, which leads to innovative ideas from younger talent, and the focus on financial returns in decision making. We are optimistic about Madhavpeddi’s abilities and the company’s future.

Lloyds Banking Group delivered strong fourth-quarter results largely driven by lower-than-expected impairment charges, which reached GBP 128 million compared with market forecasts for GBP 586 million. Profit before tax and net income both surpassed market projections by 5%, while pre-provision profit was 7% better than market estimates. In addition, the company’s common equity Tier 1 ratio grew to 16.2% and management announced plans to resume capital distributions. Later, Lloyds’ share price soared upon the release of solid first-quarter earnings, which were driven by a reserve release of GBP 459 million for credit losses that resulted in a GBP 323 million net impairment credit and pointed to management’s view of an improving economic outlook in the UK. Lloyds’ first-quarter revenues reached GBP 3.6 billion, and the company’s common equity Tier 1 ratio expanded by 54 basis points to 16.7%, despite funding half of its full-year pension contribution in the first quarter. In addition, Lloyds saw strong inflows of low-cost deposits, while higher-than-expected mortgage underwriting margins led to the company increasing its net interest margin target to more than 245 basis points, which exceeded our estimate of 240 basis points. Operating expenditure trends were also positive, in our view. Following a conversation with new CEO Charlie Nunn, our confidence in the company’s leadership was solidified as he emphasized a desire to grow the firm in both a profitable and responsible manner in order to create shareholder value. With a higher interest rate environment approaching, we believe financial services companies that are well managed and fundamentally sound, such as Lloyds Banking Group, are positioned to recognize upside potential.

The largest detractors from return were Alibaba Group and Credit Suisse Group. In February, Alibaba Group reported fiscal third-quarter revenue of CNY 221.08 billion and adjusted earnings of CNY 68.38 billion, both of which outpaced market forecasts by slightly more than 3%. Soon after, news outlets reported that officials in China asked Alibaba to dispose of its media assets over concern about the company’s influence over public opinion. In addition, China’s State Administration introduced new regulations for e-commerce platforms. Subsequently, internet companies in China removed Alibaba’s popular UC internet browser from its application stores. In the second quarter of 2021, China’s State Administration for Market Regulation fined Alibaba $2.8 billion, which was the largest antitrust penalty issued in the country’s history. The fine (which represents 4% of the company’s 2019 annual domestic revenue) was imposed because the regulatory body found that Alibaba’s practice of requiring merchants to remain exclusive on its platforms hindered competition. The company stated it does not expect a material impact on its business as a result of the new regulations. Later, the company’s share price plunged upon the release of fiscal full-year earnings, even though results were largely in line with our full-year estimates on an organic basis. Along with the earnings release, management announced it would reinvest all incremental profits in the next fiscal year, which disappointed investors. While this strategy will likely produce low or no near-term profit growth, management believes these investments will help grow its user base over the long term. Most recently, Alibaba’s second-quarter earnings report disappointed investors as growth meaningfully decelerated during the quarter and management lowered its full-year revenue growth guidance. Factors causing the slowdown in growth include a decrease in the retail spending environment in China, increased competition in e-commerce and Alibaba’s reinvestments into its merchant base, which coincided with recent increased regulation from the Chinese government. At the company’s investor day, we were impressed by Alibaba’s presentation on its growing cloud business, where the company believes its technology lead is at least two years ahead of its peers. Despite the current headwinds facing the company, we remain shareholders of Alibaba as we believe it is an important driver of innovation in China and several of its businesses have yet to fully scale.

The share price of Credit Suisse Group suffered upon revelations about the company’s exposure to Greensill Capital followed by its association with Archegos Capital Management. Investors sold shares over concerns that an investment fund run by its asset management division had exposure to the now-insolvent Greensill Capital, which specialized in supply chain finance. The lost market cap far surpassed Credit Suisse’s direct exposure to Greensill and ignored the fact that a large portion of its clients’ exposure was in cash, highly rated securities or insured investments. At the end of March, Credit Suisse’s share price dropped again as New York-based hedge fund client Archegos Capital defaulted on its margin calls to the company’s prime brokerage business. Credit Suisse announced it incurred a CHF 4.4 billion charge related to the Archegos Capital incident in the first quarter. While the amount exceeded both our initial expectations and consensus estimates, first quarter pre-tax profit of about CHF 3.6 billion, excluding the charge, exceeded analysts’ estimates for about CHF 1.2–1.5 billion in pre-tax profit driven by strong underlying performance across all three business segments. That being said, the company guided for an additional CHF 600 million charge in the second quarter to cover further Archegos-related losses. The company ultimately executed a small capital raise in an effort to boost its CET1 ratio to 13.0%. Credit Suisse’s third-quarter earnings results tracked ahead of our fiscal year estimates. Importantly, net new money inflected positively following second-quarter outflows related to the Archegos Capital and Greensill Capital incidents, suggesting that the potential reputational damage is less than feared. Following the company’s capital markets day and subsequent conversations with management, we learned that Credit Suisse planned to take additional capital from the lower return / higher risk investment bank and

 

|  12


NATIXIS OAKMARK INTERNATIONAL FUND

 

allocate capital toward the higher return / lower risk wealth management segment, a strategy we fully support. The company is also looking to generate CHF 1 billion — CHF 1.5 billion in savings from procurement initiatives, along with a new organizational structure that will serve to simplify the organization, reduce costs and enhance risk functions. Given the addition of David Wildermuth (formerly at Goldman Sachs with more than 30 years of banking experience) as chief risk officer in January and the arrival of new Chairman António Horta-Osório, the former CEO of Lloyds Banking Group, we expect better governance and risk management going forward.

Outlook

With seemingly constant uncertainty in politics, economics and market sentiment, we focus on finding undervalued and well-managed companies that will benefit from economic tailwinds while proving capable of weathering difficult environments. We believe this approach best services our goal of growing and protecting our investors’ capital over the long term.

Hypothetical Growth of $100,000 Investment in Class Y Shares1,4

December 31, 2011 through December 31, 2021

LOGO

 

13  |


 

Top Ten Holdings as of December 31, 2021

 

  
Security Name % of
Net Assets
 
 1  

Lloyds Banking Group PLC

  3.70
 2  

Bayer AG, (Registered)

  3.70
 3  

BNP Paribas S.A.

  3.48
 4  

Allianz SE, (Registered)

  3.38
 5 ��

Intesa Sanpaolo SpA

  3.21
 6  

Credit Suisse Group AG, (Registered)

  3.20
 7  

Bayerische Motoren Werke AG

  3.13
 8  

Glencore PLC

  2.92
 9  

Continental AG

  2.74
 10  

CNH Industrial NV

  2.58

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

Average Annual Total Returns — December 31, 20214

 

      
    1 Year   5 Years   10 Years   Life of
Class N
   Expense Ratios5 
  Gross  Net 
   
Class Y (Inception 5/1/17)            
NAV1   8.97   6.94   8.30      1.11  0.90
   
Class A            
NAV   8.73    6.69    8.18        1.36   1.15 
With 5.75% Maximum Sales Charge   2.50    5.44    7.54         
   
Class C            
NAV   7.92    5.89    7.54        2.11   1.90 
With CDSC2   6.92    5.89    7.54         
   
Class N (Inception 5/1/17)            
NAV   9.01            4.36    1.17   0.85 
  
Comparative Performance            
MSCI World ex USA Index (Net)3   12.62    9.63    7.84    8.22          

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Prior to the inception of Class Y shares (5/1/2017), performance is that of Class A shares and reflects the higher net expenses of that share class.

 

2

Performance for Class C shares assumes a 1.00% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase, and includes automatic conversion to Class A shares after eight years.

 

3

MSCI World ex USA Index (Net) is an unmanaged index that is designed to measure the equity market performance of developed markets, excluding the United States.

 

4

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

5

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/23. When a Funds expenses are below the limitation, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Funds expense limitations.

 

|  14


NATIXIS U.S. EQUITY OPPORTUNITIES FUND

 

Managers Symbols

William C. Nygren, CFA®

 Class A  NEFSX
Kevin G. Grant, CFA®* Class C  NECCX

M. Colin Hudson, CFA®

 Class N  NESNX

Michael J. Mangan, CFA®, CPA

 Class Y  NESYX
Michael A. Nicolas, CFA®   
Harris Associates L.P.   
  
Aziz V. Hamzaogullari, CFA®   
Loomis, Sayles & Company, L.P.   

 

*

Effective January 1, 2022 Kevin G. Grant no longer serves as portfolio manager of the Fund.

 

 

Investment Goal

The Fund seeks long-term growth of capital.

 

 

 

Market Conditions

U.S. equities produced strong returns in 2021, marking the eighth year of the past ten in which the major large-cap indexes posted a double-digit gain. The gradual lifting of virus-related restrictions led to a substantial improvement in economic growth and corporate earnings compared to their levels of the previous year, contributing to the gains for stocks. While rising inflation prompted the Federal Reserve (Fed) to adopt a more hawkish tone in the fourth quarter, leading to increased market volatility, the major large-cap indexes closed the year at or near their all-time highs. In the continuation of a long-standing trend, mega-cap technology and communication services stocks were the key drivers of U.S. market performance in 2021.

Performance Results

For the 12 months ended December 31, 2021, Class Y shares of the Natixis U.S. Equity Opportunities Fund returned 23.48% at net asset value. The Fund underperformed its primary benchmark, the S&P 500® Index, which returned 28.71%, and also underperformed its secondary benchmark, the Russell 1000® Index, which returned 26.45%.

Explanation of Fund Performance

Each of the portfolio’s segments uses a distinct investment style, providing shareholders with exposure to a variety of different stocks:

 

 

The Harris Associates L.P. Large Cap Value segment invests primarily in the common stocks of larger-capitalization companies that Harris Associates L.P. (“Harris Associates”) believes are trading at a substantial discount to the company’s “true business value.”

 

 

The Loomis, Sayles & Company, L.P. All Cap Growth segment invests primarily in equity securities and may invest in companies of any size. The segment 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 aims to invest in companies when they trade at a significant discount to the estimate of intrinsic value.

Both segments contributed positively to the Fund’s performance.

Harris Associates Large Cap Value Segment

As value investors with an emphasis on individual stock selection, our sector weights are a byproduct of our bottom-up process. On an absolute-return basis, the energy sector gained the most value, while holdings in the industrials sector delivered the smallest positive collective return.

The largest contributors to fund performance for the year were Alphabet and Capital One Financial. Toward the beginning of the year, Alphabet’s fourth-quarter results showed faster than expected revenue growth across the board. Total revenue grew 23% year-over-year and reached $56.9 billion, which led to earnings per share of $22.30, and both exceeded market expectations. Revenue in the key search segment grew 17%, owing to “broad-based re-engagement” among advertisers following the Covid-19-related pullback. Importantly, for the first time Alphabet disclosed cloud segment profitability and revealed that the company made massive upfront

 

15  |


 

investments in its go-to-market strategy and engineering resources, implying that the remaining segments are even more profitable than most analysts expected. Later, Alphabet’s results continued to positively surprise the market as the company’s first-quarter total revenue, operating income and earnings per share outpaced expectations by 7%, 39% and 67%, respectively. By segment, search revenue grew 30%, YouTube advertising revenue rose 49% and cloud revenue increased 46%. Furthermore, margin trends improved across all segments as underlying operational expenses appear progressively well controlled relative to history. In July, Alphabet’s second-quarter earnings report showed that revenue grew by 62%, again surpassing consensus expectations, and search revenue saw significant growth with a 67% increase year-over-year. Alphabet’s third-quarter earnings release resulted in the company’s share price moving higher into the end of the year. Reported revenue growth amounted to 41% and operating margins (ex-Other Bets) expanded 670 basis points. In addition, search and YouTube advertising revenue both grew over 40%. Management bought back $12.6 billion worth of stock in the third quarter, which puts the company on pace to meet our expectations for the full-year period. Although Alphabet’s share price declined on news that YouTube TV subscribers lost access to Disney-owned entertainment options, the issue resolved itself shortly thereafter. We believe Alphabet remains an attractive holding with upside potential despite its recent share price appreciation.

Capital One Financial issued first-quarter results that we saw as very good and that built on positive trends from prior quarters. Likewise, the company’s total net revenue and net interest margin exceeded market projections, while earnings per share were about 70% ahead of forecasts. We were pleased that credit quality remained strong, and charge-offs across lending categories fell once again from historically low levels. Credit card purchase volume grew 8% from last year, while deposits grew 15.1% and the average consumer deposit cost ratio reached an all-time low of 0.36%. Impressively, Capital One released loan loss reserves of $1.6 billion in the quarter, which was larger than the reserve release we had estimated for the full year. Capital One delivered another solid set of earnings results for its second quarter, in our view. A $1.7 billion loan reserve release led to earnings per share of $7.62, and the card charge-off rate fell 23 basis points versus the previous quarter’s already historically low rate to 2.29%. In October, investors responded unfavorably to CEO Richard Fairbank’s emphatic commentary surrounding elevated spending, the need to invest defensively in technology and the costliness of doing so given the competition for technology talent. That said, we think the company’s third-quarter earnings report highlighted strong results as charge-offs fell further from already all-time low levels, card purchase volume grew 28% year-over-year, ending loan balance improved 5% sequentially and net interest margins grew 46 basis points. In addition, Capital One executed $2.7 billion in third-quarter share repurchases (equivalent to 3.5% of its share base) and still ended the period with excess capital equal to 13% of its market cap. Our investment thesis for the company remains intact, and we believe it trades at a discount to our perception of its intrinsic value.

The largest detractors to fund performance for the year were Ally Financial and Fiserv. As management had predicted and we had expected, Ally Financial released good fourth-quarter results early in the year. Total net revenue rose 21% from a year earlier while earnings per share advanced 68% and both exceeded market forecasts. In addition, total deposits grew 13% and average total earning assets (including auto loans and mortgages) rose 3% year-over-year. Notably, the company’s provision for credit losses decreased materially from $998 million in the fourth quarter of 2020 to $102 million in the fourth quarter of 2021. Ally announced a new $1.60 billion share repurchase authorization in January following favorable results from the most recent Federal Reserve board stress test. In April, Ally’s first-quarter earnings report included earnings per share ($2.09 ex-items vs. $1.17) that beat analysts’ estimates as well as a reported return on tangible common equity of 24%. In fact, most metrics came in well above increasingly elevated expectations. Net interest margins expanded 26 basis points sequentially to 3.18%, retail deposits grew 21% year-over-year and deposit customers grew 14%. The company’s second-quarter earnings report in July continued to show strength as shown by return on tangible common equity of around 27%. New retail auto originations finished at the highest level in 15 years, while new originated yields maintained above 7%. In addition, net interest margins expanded to nearly 3.6%. In October, Ally reported a positive third-quarter earnings report, in our view. Return on average tangible common equity was assisted by a low credit loss environment and expanding net interest margins. Record retail application flow continued to show strength for a fourth straight year. However, the wholesale business continued to show weakness with loan balances at roughly half pre-pandemic levels. Later in the fourth quarter, Ally announced its decision to acquire digital credit card provider Fair Square Financial (FSF) for $750 million. FSF has been growing balances rapidly, and we believe the deal can add at least 150 basis points to core return on average tangible common equity over the medium term.

Even though Fiserv’s first-quarter earnings disappointed investors, we saw the results as respectable considering the challenging operating environment. Importantly, organic revenue grew 4% from the prior year, earnings rose 15% and earnings per share advanced 18%. In merchant acquiring, organic growth amounted to 8% and margins improved 650 basis points, while gross payment volume in Clover (Fiserv’s cloud-based point-of-sale product) grew 36%, e-commerce transactions grew 24% and the company won a record number of new customers during the period. In addition, we were pleased that Fiserv executed $612 million worth of share repurchases in the quarter (or about 0.8% of its share base). Later, Fiserv delivered strong second-quarter earnings results as exhibited by revenue, earnings and earnings per share that increased 18%, 41% and 47%, respectively. In addition, margins expanded 510 basis points to 33.9%. However, news that Amazon was reportedly developing a point-of-sale solution pressured Fiserv’s share price in

 

|  16


NATIXIS U.S. EQUITY OPPORTUNITIES FUND

 

September as investors feared increased competition. Fiserv’s third-quarter earnings results were in line with market estimates, with organic revenue growth of 10%, operating margins increasing 130 basis points and adjusted earnings per share growing 23%. However, investors reacted poorly to the release, focusing on a client (speculated to be Stripe) that was part of a joint venture with Wells Fargo, which is serviced by Fiserv, deciding to leave. This likely stoked fears that other companies may decide to insource their payment processing in the future. The departure is not expected to impact Fiserv’s financial results due to its minimal contribution and management anticipating the move. Despite the client loss, we appreciate that Fiserv still posted strong segment results and growth in customers, independent software vendors, and capabilities on its platform. We continue to believe the company is undervalued and find the investment attractive on a risk-to-reward basis.

Loomis, Sayles & Company All Cap Growth Segment

We are an active manager with a long-term, private equity approach to investing. Through our proprietary bottom-up research framework, we look to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth when they trade at a significant discount to intrinsic value. For the period, the All Cap Growth segment posted a positive absolute return. Our holdings in the information technology, communication services, industrials, healthcare, financials, energy, and consumer staples sectors contributed positively to results. Our holdings in the consumer discretionary sector detracted from the segment’s performance.

Nvidia and Alphabet were the largest contributors to performance during the period. Nvidia is the world leader in graphic processing units (GPUs), which enable computers to produce and utilize highly realistic 3D graphic imagery and models. We believe the company’s competitive advantages include its intellectual property, brands, and a large and growing ecosystem of developers and applications utilizing GPU technology. A segment holding since January 2019, Nvidia reported financial results during the period that were better than consensus expectations, driven by broad-based strength that included quarterly revenue records in the company’s gaming, data center, and professional visualization segments in the second half of the year. In gaming, Nvidia is benefiting from record sales of PCs and gaming laptops and the rollout of Turing, its newest GPU architecture, which is becoming the industry norm for the latest blockbuster titles. Data center revenue benefited from a pickup in demand from hyperscale data center customers and rising demand from industry verticals such as industrials and enterprise clients that are adopting more artificial intelligence capabilities. The company saw strong traction for its latest architecture, Ampere, which for the first time enables clients to address both training and inferencing through a single architecture with performance that surpasses its already leading T4 inferencing and V100 training products. The company’s professional visualization segment addresses a more mature market, but Nvidia has been able to drive greater adoption of its products through ongoing innovation. Over our investment horizon, we believe Nvidia can sustain total annualized revenue growth of approximately 20%, driven by secular growth in spending on GPUs. As Nvidia’s business mix shifts increasingly towards its more profitable data center segment, we believe operating profits and free cash flow will grow faster than revenues. We believe Nvidia’s strong free cash flow growth prospects are not currently reflected in its share price. As a result, we believe the company’s shares trade at a significant discount to our estimate of intrinsic value and offer a compelling long-term reward-to-risk opportunity.

Alphabet is a holding company that owns a collection of businesses — the largest and most important of which by far is Google. Google is the global leader in online search and advertising, and also offers online cloud solutions to businesses and consumers globally. We believe Alphabet’s competitive advantages include its scale, brand strength, the power of its network and business ecosystem, as well as its innovative culture that is reinforced by its massive investments in research and development (R&D). A holding in the segment since inception, Alphabet reported financial results during the period that reflected a strong recovery in advertising spending, which had been depressed due to Covid-19, while revenue growth accelerated and adjusted operating margins expanded. Beginning in 2021, the company began presenting results in three segments. Google Services represents approximately 93% of total revenue and is driven by the secular shift of advertising to online and mobile platforms. The segment’s search and YouTube businesses both benefited from strong growth in direct response ads — particularly for YouTube, where in just three years direct response ads have grown from almost nothing to become one of the largest drivers. YouTube is also benefiting from strong demand from brand advertisers due to its reach and engagement with over 2 billion monthly users who recently spent over 1 billion hours daily on the platform. Google Cloud revenue represents approximately 7% of total revenue, and is driven by Google Cloud Platform, the company’s infrastructure- and platform-as-a-service offerings. Other Bets includes a number of early-stage and pre-revenue businesses and represents less than 1% of revenues. Google’s attractive financial model generates strong free cash flow and earns high returns on invested capital, enabling it to reinvest significantly in its business. Over the past five years, Google has invested over $100 billion in R&D, an amount very few companies could replicate. We believe the global secular shift from traditional advertising to online advertising is the biggest long-term growth driver for Google. Online advertising accounts for approximately $330 billion, or around 20% of the $1.5 trillion annual spending on global advertising and marketing. Over our investment horizon, we believe this penetration will increase to over 40%. We believe investors underestimate Alphabet’s growth opportunities and the intrinsic value of the business given its unique and difficult-to-replicate attributes and business model. We believe the company’s shares trade at a significant discount to our estimate of intrinsic value, and offer a compelling reward-to-risk opportunity.

 

17  |


 

Alibaba and CRISPR Therapeutics were the largest detractors during the period. A segment holding since its initial public offering in the third quarter of 2014, Alibaba Group is a leading China e-commerce and consumer-engagement platform provider. With approximately 60% of China’s e-commerce transactions estimated to take place through its marketplaces, Alibaba is the world’s largest retail platform, and we believe its scale and interconnected sites create an unparalleled and difficult-to-replicate business ecosystem. Shares have been under pressure since late 2020 due to investor concern regarding increasing regulatory intervention by the Chinese government. In April, China’s State Administration for Market Regulation concluded that Alibaba’s practices had violated antitrust law. The company was fined approximately $2.8 billion and ordered to carry out “comprehensive” self-inspections to standardize business practices and ensure compliance with anti-monopoly laws. Alibaba cooperated fully with the investigation and has changed certain business practices. In August, China passed the Personal Information Protection Law (PIPL), which is focused on protecting personal information rights and interests by standardizing the handling and usage of personal information by businesses. We believe the focus of PIPL is similar to the General Data Protection Regulation (GDPR), which went into effect in the European Union in 2018. The GDPR impacted other portfolio holdings such as Alphabet and Facebook, which incurred increased compliance costs and other disruptions as they adjusted certain business practices to comply with the new regulations. However, both companies continued to generate strong growth in revenue and free cash flow due to their competitive advantages and strong value propositions. While we expected that Alibaba would experience short-term disruptions as it modified its practices to fully comply with new regulatory changes, we did not believe the changes would ultimately impair the company’s difficult-to-replicate competitive advantages. More recently, we have observed increasing competitive pressure in two of the company’s smaller but faster-growing contributors: video streaming and penetration in lower-tier cities. Through the company’s Taobao Live, Alibaba offers a leading live-streaming social commercial platform, enabling merchants to interact with consumers. The relatively new medium has become a fast-growing vehicle for e-commerce sales, growing from less than 5% of China’s e-commerce two years earlier to almost 10% in 2020. While Alibaba continues to have a leadership position in live streaming and short video production, we have seen increased competition and market share gains from companies such as Douyin (China’s version of TikTok, owned by ByteDance), and Kuaishou. We expect this newer format will grow to represent approximately 25% of e-commerce sales over time. And while we expect Alibaba to remain a leader, we expect growing competition to take an increasing share of this fast-growing market over time. Growing competitive intensity has also impacted our assessment of Alibaba’s ongoing penetration of lower-tier cities. As internet access in lower-tier cities approaches that of higher-tier cities, we expect growth in e-commerce to be approximately twice that of overall China e-commerce growth. We believe Alibaba maintains leading market share in lower-tier cities, but is likely to face heightened competition from companies such as Pinduoduo, JD.com, and Meituan. We have long assumed that Alibaba’s disproportionate share of China e-commerce would decline, from over 80% at the time of our initial analysis in 2013, to a level closer to 50% of a still-growing market. While the company remains the dominant e-commerce platform in China, we estimate that a meaningful percentage of the company’s incremental growth in the most recent quarter was from these markets where we are seeing signs of heightened competitive intensity. As a function of newer market entrants, faster growth from newer formats of e-commerce and lower-tier cities, and recent regulatory changes, we now expect the company’s market share to normalize at a lower level than we previously expected. While our ongoing analysis has lowered our assessment of intrinsic value for the company, it has not changed our assessment that Alibaba is a high-quality company that remains well positioned to benefit from secular growth in China e-commerce over our long-term investment horizon. We continue to believe that Alibaba trades at a discount to intrinsic value and offers asymmetric reward-to-risk. However, given our most recent analysis, it no longer justified the same degree of capital allocation relative to other opportunities. We trimmed the position and allocated the proceeds to our existing holdings in Boeing, Disney, Illumina, and Salesforce.

Founded in 2013, CRISPR Therapeutics (“CRSP”) is a leading gene editing company, based in Switzerland. CRISPR, an acronym for “Clustered Regularly Interspaced Short Palindromic Repeats,” is a naturally occurring defense mechanism that protects bacteria against viral infections. Functioning as a “molecular scissors,” the process enables the bacteria to cut viral DNA, thereby disabling the virus. Dr. Emmanuelle Charpentier, a CRSP co-founder, elucidated the mechanism and developed a methodology to adapt and simplify its use for human gene therapy — for which she and a collaborator were awarded the 2020 Nobel Prize in Chemistry. The resulting gene editing technology enables precise alteration of DNA that can “silence” or correct undesirable sequences, potentially enabling a next generation of curative therapies for genetic diseases. Today, the company is focused on developing transformative gene-based medicines for serious diseases in areas including hemoglobinopathies (a group of inherited blood disorders including sickle cell disease), oncology, regenerative medicine, and rare diseases. A new purchase in the second quarter of 2021, CRSP reported financial results that demonstrated continued progress across its clinical and pre-clinical therapies, including the expectation for year-end 2022 regulatory filings for its CTX001 therapy for blood disorders including sickle cell disease. In October 2021, the company reported that its CTX110 CAR-T program, which uses the body’s own immune system to fight cancer, showed good Phase 1 safety results that were comparable to but less efficacious than competing autologous therapies. While the numbers appeared below peer results, they showed promise and potential for the company to improve the results by refining its dosing regimen. CRSP’s therapy also remains differentiated from autologous therapies which are patient-specific and can only be used to treat a single patient, while CRSP’s allogenic “off-the-shelf” CAR-T therapies can be derived from a single healthy donor and then used to treat many patients. While the results could impact the timing of potential approval and ultimate market share opportunity for its CAR-T therapies, they

 

|  18


NATIXIS U.S. EQUITY OPPORTUNITIES FUND

 

do not impact our assessment of the quality of CRSP’s platform, and we continue to expect the company to realize significant value from its CAR-T program. We took advantage of near-term price weakness to add to our holdings during the period. While CRSP has a number of therapies currently undergoing clinical trials, it has not yet commercialized any therapies and remains pre-revenue. However, at scale, we believe the company can attain the economics of a successful biotech company, including operating margins that could exceed 40% and cash flow returns on investment that substantially exceed its cost of capital. We believe the expectations embedded in CRSP’s market price substantially underestimate the potential of its curative therapies, its ability to rapidly innovate, and its structural advantages in the development process that should lift its probability of success compared to traditional biopharmaceutical therapies. We believe management is executing on a sound investment strategy that we expect will eventually generate meaningful free cash flow growth that is not reflected in current expectations. As a result, we believe the company is selling at a substantial discount to our estimate of its intrinsic value and offers a compelling reward-to-risk opportunity.

Outlook

The Natixis U.S. Equity Opportunities Fund is composed of two separate segments combining the value expertise of Harris Associates with the growth expertise of Loomis Sayles. The two segments have common investment philosophies and a rigorous long-term, bottom-up research process focused on high quality businesses trading at a significant discount to intrinsic value. Coming out of the pandemic-driven selloff in 2020, the market’s appetite for risk and infatuation with companies benefiting from the “work from home” environment has been most analogous to behavior observed in the dot-com era of the late 1990s and early 2000s and the financial crisis and energy bubble in 2008. The thesis for each investment, almost by definition, differs from consensus. The fund managers have maintained, and continue to maintain, temperament and discipline, and monitor any new information to constantly challenge those theses. The managers are patient investors and maintain coverage of high-quality businesses in order to take advantage of meaningful price dislocations if and when they occur.

Hypothetical Growth of $100,000 Investment in Class Y Shares4

December 31, 2011 through December 31, 2021

LOGO

 

19  |


 

Top Ten Holdings as of December 31, 2021

 

  
Security Name  

% of

Net Assets

 
 1  

Meta Platforms, Inc., Class A

   4.48
 2  

Alphabet, Inc., Class A

   4.12
 3  

NVIDIA Corp.

   3.53
 4  

Amazon.com, Inc.

   3.13
 5  

Regeneron Pharmaceuticals, Inc.

   2.80
 6  

Ally Financial, Inc.

   2.43
 7  

EOG Resources, Inc.

   2.12
 8  

Capital One Financial Corp.

   2.10
 9  

Boeing Co. (The)

   2.06
 10  

Charles Schwab Corp. (The)

   2.06

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

Average Annual Total Returns — December 31, 20214

 

      
   1 Year  5 Years  10 Years  Life of
Class N
  Expense Ratios5 
 Gross  Net 
   
Class Y       
NAV  23.48  18.69  17.70    0.92  0.92
   
Class A       
NAV  23.14   18.40   17.40      1.17   1.17 
With 5.75% Maximum Sales Charge  16.07   17.00   16.71       
   
Class C       
NAV  22.27   17.52   16.70      1.92   1.92 
With CDSC1  21.27   17.52   16.70       
   
Class N (Inception 5/1/17)       
NAV  23.53         18.17   1.13   0.84 
  
Comparative Performance       
S&P 500® Index2  28.71   18.47   16.55   18.02    
Russell 1000® Index3  26.45   18.43   16.54   17.96         

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Performance for Class C shares assumes a 1.00% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase and includes automatic conversion to Class A shares after eight years.

 

2

S&P 500® Index is a widely recognized measure of U.S. stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors. It also measures the performance of the large cap segment of the US equities market.

 

3

Russell 1000® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000® Index represents approximately 92% of the U.S. market and is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.

 

4

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

5

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/22. When a Fund’s expenses are below the limitation, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Fund’s expense limitations.

 

|  20


VAUGHAN NELSON MID CAP FUND

 

Managers Symbols
Dennis G. Alff, CFA® Class A    VNVAX
Chad D. Fargason Class C    VNVCX
Chris D. Wallis, CFA® Class N    VNVNX
Vaughan Nelson Investment Management, L.P. Class Y    VNVYX

 

 

Investment Goal

The Fund seeks long-term capital appreciation.

 

 

Market Conditions

During the fiscal year ended December 31, 2021, the equity market continued to recover from the global pandemic. Buoyed by a new round of stimulus checks and an accelerated rollout of Covid-19 vaccines, cyclical sectors and securities with high beta and high short interest led the equity market to new all-time highs. As we moved through the fiscal year, growth stocks resumed their leadership over value. The leadership shift to larger cap equities with growth characteristics is consistent with the modest decline in Treasury yields and flattening yield curve. As we neared the fiscal year-end, returns were mixed as global equity markets grappled with slowing economic growth, rising energy prices, and material supply chain disruptions, offset by falling Covid cases and improving employment conditions. With rising inflationary pressures becoming a political issue, the US Federal Reserve began modestly reducing their Quantitative Easing purchases and provided forward guidance that interest rate increases are on the horizon. Inflationary pressures have peaked in the US and emerging markets but continue to rise in Europe. Although upward pressure on inflation is easing, inflation remains at elevated levels and may limit monetary policy support going forward.

Performance Results

For the 12 months ended December 31, 2021, Class Y shares of the Vaughan Nelson Mid Cap Fund returned 21.65% at net asset value. The Fund underperformed its benchmark, the Russell Midcap® Value Index, which returned 28.34%.

Explanation of Fund Performance

The largest contributor to underperformance was the Fund’s consumer discretionary names. Leslie’s, Inc. was a relative detractor. Leslie’s is a provider of pool supplies and chemicals in the US, with a network of nearly 1,000 stores. While earnings were strongly revised higher throughout the year, the stock suffered from private equity sponsor selling. With the December secondary offering, the company concurrently announced a share buyback to absorb more than half the offering. We believe this should begin to relieve the sponsor overhang in 2022.

Selection within materials, namely FMC Corporation, was a relative detractor. FMC is a leading agricultural sciences company making insecticides, herbicides, and fungicides for crops. The company experienced price/cost pressures during the year but exited the fourth quarter with positive momentum.

A significant underweight to real estate, an outperforming sector, meaningfully impacted relative returns.

Information technology was a negative contributor driven by an overweight position and stock selection. Alliance Data Systems Corporation (ADS) was the most challenged name. ADS is a provider of private label credit cards, promotional financings and savings products. The company underwent a spinoff of Loyalty Ventures to create value, but still lagged its peers as the market doubts its longer-term receivables growth targets and worries about the threat of alternatives such as buy-now-pay-later. The company is also classified in a different sector than its peers.

Health care underperformance was driven by security selection. Within the sector, Aveanna Healthcare Holdings Inc. is a provider of home health solutions, with a focus on pediatric patients. The stock underperformed as the sector was under pressure due to labor difficulties, and Aveanna is also a new issue.

Financials outperformed, with Athene Holding Ltd. Class A the strongest name. Athene was acquired by Apollo during the year and benefited from Apollo’s newly stated goal of $1 trillion in AUM by 2026, a doubling of its current asset base.

Security selection within industrials aided performance, with WillScot Mobile Mini Holdings Corp. Class A the strongest performer. The company provides modular space and portable storage products including temporary workspace, furniture rental, and facilities services. The company held an investor day with a bullish outlook, and a final sponsor stock sale allowed the stock to lift off.

 

21  |


 

Energy was a positive relative sector, primarily due to Pioneer Natural Resources Company. Pioneer is an oil & gas exploration and production company with a focus in the Permian basin. The company completed two big mergers, then benefited from a commitment to no more deals, capital return, and rising oil prices throughout the year.

Utilities was the final outperforming sector due in part to Evergy, Inc. Evergy is a regulated utility that provides electric services to Kansas and Missouri. The company has activist involvement and benefited from strong execution.

Outlook

Economic growth continues to slow, and we expect supporting data to become visible as we exit the first quarter and move through the second quarter of 2022. As monetary policy becomes incrementally more restrictive, it is important for inflationary pressures to ease faster than economic growth so that real growth can remain supportive of equity markets. Should economic growth slow more quickly than inflation, earnings estimates and equity valuations may come under pressure in the first half of 2022.

Hypothetical Growth of $100,000 Investment in Class Y Shares3

December 31, 2011 through December 31, 2021

LOGO

See notes to chart on page 23.

 

|  22


VAUGHAN NELSON MID CAP FUND

 

Top Ten Holdings as of December 31, 2021

 

  
Security Name  

% of

Net Assets

 
 1  

Motorola Solutions, Inc.

   4.82
 2  

Performance Food Group Co.

   3.70
 3  

Skechers U.S.A., Inc., Class A

   3.45
 4  

Elanco Animal Health, Inc.

   3.38
 5  

Avantor, Inc.

   2.93
 6  

Leslie's, Inc.

   2.78
 7  

Sotera Health Co.

   2.72
 8  

WillScot Mobile Mini Holdings Corp.

   2.67
 9  

Nexstar Media Group, Inc., Class A

   2.65
 10  

Crown Holdings, Inc.

   2.50

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

Average Annual Total Returns — December 31, 20213

 

      
    

1 Year

   

5 Years

   

10 Years

   Life of
Class N
   Expense Ratios4 
  Gross   Net 
   
Class Y             
NAV   21.65   10.87   12.13      0.99   0.90
   
Class A             
NAV   21.32    10.58    11.84        1.24    1.15 
With 5.75% Maximum Sales Charge   14.34    9.28    11.18          
   
Class C             
NAV   20.44    9.76    11.18        1.99    1.90 
With CDSC1   19.44    9.76    11.18          
   
Class N (Inception 5/1/13)             
NAV   21.70    10.96        10.60    0.89    0.85 
  
Comparative Performance             
Russell Midcap® Value Index2   28.34    11.22    13.44    11.66           

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Performance for Class C shares assumes a 1.00% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase and includes automatic conversion to Class A shares after eight years.

 

2

Russell Midcap® Value Index is an unmanaged index that measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values.

 

3

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

4

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/23. When a Fund’s expenses are below the limitation, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Fund’s expense limitations.

 

23  |


VAUGHAN NELSON SMALL CAP VALUE FUND

 

Managers Symbols
Chris D. Wallis, CFA® Class A    NEFJX
Stephen Davis, CFA® Class C    NEJCX
Vaughan Nelson Investment Management, L.P. Class N    VSCNX
 Class Y    NEJYX

 

 

Investment Goal

The Fund seeks capital appreciation.

 

 

 

Market Conditions

During the fiscal year ended December 31, 2021, the equity market continued to recover from the global pandemic. Buoyed by a new round of stimulus checks and an accelerated rollout of Covid-19 vaccines, cyclical sectors and securities with high beta and high short interest led the equity market to new all-time highs. As we moved through the fiscal year, growth stocks resumed their leadership over value. The leadership shift to larger cap equities with growth characteristics is consistent with the modest decline in Treasury yields and flattening yield curve. As we neared the fiscal year-end, returns were mixed as global equity markets grappled with slowing economic growth, rising energy prices, and material supply chain disruptions offset by falling Covid cases and improving employment conditions. With rising inflationary pressures becoming a political issue, the US Federal Reserve began modestly reducing their Quantitative Easing purchases and provided forward guidance that interest rate increases are on the horizon. Inflationary pressures have peaked in the US and emerging markets but continue to rise in Europe. Although upward pressure on inflation is easing, inflation remains at elevated levels and may limit monetary policy support going forward.

Performance Results

For the 12 months ended December 31, 2021, Class Y shares of the Vaughan Nelson Small Cap Value Fund returned 30.61% at net asset value. The Fund outperformed its benchmark, the Russell 2000® Value Index, which returned 28.27%.

Explanation of Fund Performance

The largest contributor to outperformance was healthcare, driven by security selection. Within the sector, Syneos Health, Inc. Class A drove the outperformance due to continued strength in their backlog of core clinical contract outsourcing business combined with industry strength with respect to biotech funding levels.

Information technology (IT) was a significant contributor, driven by an overweight position and stock selection. ExlService Holdings, Inc. led the way, resulting from strong third quarter 2021 execution on booked business, strong (95%) revenue visibility into 2022 and the continued secular shift for enterprise clients to outsource core operations to the company to save money and gain operational efficiency.

The Fund’s consumer discretionary names outperformed the sector, with International Game Technology PLC the largest contributor due primarily to strength in i-Lottery and sports betting industry assets that drove a re-rating of the stock by the market. Higher cash flow generation by the company also led to a significant reduction in net leverage from previously high levels.

Financials outperformed, with LPL Financial Holdings Inc. the strongest name because of a rise in equity markets driving higher assets under management and the market anticipating higher interest rates, which would increase the spread earned by the company on their client’s cash balances.

Utilities was the final outperforming sector, due in part to the Fund’s underweight position.

The largest detractor from returns was a significant underweight to real estate, an outperforming benchmark sector.

Both an overweight to and security selection within industrials hampered performance, with Ritchie Bros. Auctioneers the worst performer

Ritchie Bros. Auctioneers underperformed due to supply chain constraints limiting the amount of auction inventory (industrial capital equipment) the company could aggregate as owners of equipment were holding on to older assets longer. This led to lower earnings growth than the market anticipated.

 

Energy was a negative relative sector, primarily due to TechnipFMC Plc, which underperformed due to a pullback in natural gas prices throughout the world and a milder winter in Europe. Further, oil retreated from its 2021 highs made in October 2021.

 

|  24


VAUGHAN NELSON SMALL CAP VALUE FUND

 

The communication services underperformance was driven by security selection. Sinclair Broadcast Group, Inc. Class A was the most challenged name. The Delta and Omicron virus waves led to changes in sports viewing schedules, which is one of the primary revenue sources for the company as it owns several regional sports networks.

Security selection within a disappointing consumer staples sector detracted from returns led by Performance Food Group Company. The stock underperformed due to inflation effects as the company lags price increases by 1–2 quarters, as well as a deal with CoreMark that the market is waiting to see demonstrable benefits from.

Lastly, selection within materials, namely Axalta Coating Systems Ltd., was a relative detractor due to lower auto production volumes resulting in decreased demand for Axalta paint, combined with margin pressure due to inflation which the company mitigates with price increases on a 1–2 quarter lag.

Outlook

Economic growth continues to slow, and we expect supporting data to become visible as we exit the first quarter and move through the second quarter of 2022. As monetary policy becomes incrementally more restrictive, it is important for inflationary pressures to ease faster than economic growth so that real growth can remain supportive of equity markets. Should economic growth slow more quickly than inflation, earnings estimates and equity valuations may come under pressure in the first half of 2022.

Hypothetical Growth of $100,000 Investment in Class Y Shares3

December 31, 2011 through December 31, 2021

LOGO

 

25  |


 

Top Ten Holdings as of December 31, 2021

 

  
Security Name  % of
Net Assets
 
 1  

Insight Enterprises, Inc.

   3.50
 2  

Element Solutions, Inc.

   3.41 
 3  

ExlService Holdings, Inc.

   2.98 
 4  

Syneos Health, Inc.

   2.86 
 5  

Molina Healthcare, Inc.

   2.77 
 6  

ASGN, Inc.

   2.58 
 7  

LPL Financial Holdings, Inc.

   2.45 
 8  

Performance Food Group Co.

   2.40 
 9  

Capri Holdings Ltd.

   2.35 
 10  

Chemours Co. (The)

   2.09 

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments, are presented on an individual security basis and do not represent holdings of the issuer.

Average Annual Total Returns — December 31, 20213

 

      
    

1 Year

   

5 Years

   

10 Years

   Life of
Class N
   Expense Ratios4 
  Gross   Net 
   
Class Y             
NAV   30.61   10.15   13.09      1.23   1.00
   
Class A             
NAV   30.24    9.86    12.80        1.48    1.25 
With 5.75% Maximum Sales Charge   22.74    8.56    12.13          
   
Class C

 

           
NAV   29.45    9.05    12.12        2.23    2.00 
With CDSC1   28.62    9.05    12.12          
   
Class N (Inception 5/1/17)             
NAV   30.64            11.13    6.49    0.95 
  
Comparative Performance             
Russell 2000® Value Index2   28.27    9.07    12.03    9.54           

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

 

1

Performance for Class C shares assumes a 1.00% contingent deferred sales charge (“CDSC”) applied when you sell shares within one year of purchase and includes automatic conversion to Class A shares after eight years.

 

2

Russell 2000® Value Index is an unmanaged index that measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values.

 

3

Fund performance has been increased by fee waivers and/or expense reimbursements, if any, without which performance would have been lower.

 

4

Expense ratios are as shown in the Fund’s prospectus in effect as of the date of this report. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report under Ratios to Average Net Assets. Net expenses reflect contractual expense limitations set to expire on 4/30/23. When a Fund’s expenses are below the limitation, gross and net expense ratios will be the same. See Note 6 of the Notes to Financial Statements for more information about the Fund’s expense limitations.

 

|  26


ADDITIONAL INFORMATION

All investing involves risk, including the risk of loss. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

The views expressed in this report reflect those of the portfolio managers as of the dates indicated. The managers’ views are subject to change at any time without notice based on changes in market or other conditions. References to specific securities or industries should not be regarded as investment advice. Because the Fund is actively managed, there is no assurance that they will continue to invest in the securities or industries mentioned.

ADDITIONAL INDEX INFORMATION

This document may contain references to third party copyrights, indexes, and trademarks, each of which is the property of its respective owner. Such owner is not affiliated with Natixis Investment Managers or any of its related or affiliated companies (collectively “Natixis Affiliates”) and does not sponsor, endorse or participate in the provision of any Natixis Affiliates services, funds or other financial products.

The index information contained herein is derived from third parties and is provided on an “as is” basis. The user of this information assumes the entire risk of use of this information. Each of the third party entities involved in compiling, computing or creating index information disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to such information.

PROXY VOTING INFORMATION

A description of the Natixis Funds’ proxy voting policies and procedures is available without charge, upon request, by calling Natixis Funds at 800-225-5478; on the Natixis Funds’ website at im.natixis.com; and on the Securities and Exchange Commission’s (“SEC’s”) website at www.sec.gov. Information regarding how the Natixis Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available from the Natixis Funds’ website and the SEC’s website.

QUARTERLY PORTFOLIO SCHEDULES

The Natixis Funds file a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC’s website at www.sec.gov. First and third quarter schedules of portfolio holdings are also available at im.natixis.com/funddocuments. A hard copy may be requested from the Fund at no charge by calling 800-225-5478.

CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

 

27  |


UNDERSTANDING FUND EXPENSES

As a mutual fund shareholder, you incur different costs: transaction costs, including sales charges (loads) on purchases and contingent deferred sales charges on redemptions, and ongoing costs, including management fees, distribution and/or service fees (12b-1 fees), and other fund expenses. Certain exemptions may apply. These costs are described in more detail in the Funds’ prospectus. The following examples are intended to help you understand the ongoing costs of investing in the Funds and help you compare these with the ongoing costs of investing in other mutual funds.

The first line in the table of each class of Fund shares shows the actual account values and actual Fund expenses you would have paid on a $1,000 investment in the Fund from July 1, 2021 through December 31, 2021. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example $8,600 account value divided by $1,000 = 8.60) and multiply the result by the number in the Expenses Paid During Period column as shown for your class.

The second line in the table for each class of fund shares provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid on your investment for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown reflect ongoing costs only, and do not include any transaction costs, such as sales charges. Therefore, the second line in the table of each fund is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning funds. If transaction costs were included, total costs would be higher.

 

LOOMIS SAYLES INTERNATIONAL GROWTH FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $912.30    $5.78 
Hypothetical (5% return before expenses)   $1,000.00    $1,019.16    $6.11 
Class C       
Actual   $1,000.00    $909.70    $9.39 
Hypothetical (5% return before expenses)   $1,000.00    $1,015.38    $9.91 
Class N       
Actual   $1,000.00    $914.20    $4.34 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.67    $4.58 
Class Y       
Actual   $1,000.00    $913.90    $4.58 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.42    $4.84 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.20%, 1.95%, 0.90% and 0.95% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

|  28


NATIXIS OAKMARK FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $1,065.30    $5.47 
Hypothetical (5% return before expenses)   $1,000.00    $1,019.91    $5.35 
Class C       
Actual   $1,000.00    $1,061.50    $9.35 
Hypothetical (5% return before expenses)   $1,000.00    $1,016.13    $9.15 
Class N       
Actual   $1,000.00    $1,067.10    $3.91 
Hypothetical (5% return before expenses)   $1,000.00    $1,021.43    $3.82 
Class Y       
Actual   $1,000.00    $1,067.00    $4.17 
Hypothetical (5% return before expenses)   $1,000.00    $1,021.17    $4.08 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.05%, 1.80%, 0.75% and 0.80% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

NATIXIS OAKMARK INTERNATIONAL FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $956.80    $5.67 
Hypothetical (5% return before expenses)   $1,000.00    $1,019.41    $5.85 
Class C       
Actual   $1,000.00    $953.20    $9.35 
Hypothetical (5% return before expenses)   $1,000.00    $1,015.63    $9.65 
Class N       
Actual   $1,000.00    $958.20    $4.20 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.92    $4.33 
Class Y       
Actual   $1,000.00    $957.70    $4.44 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.67    $4.58 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.15%, 1.90%, 0.85% and 0.90% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

29  |


NATIXIS U.S. EQUITY OPPORTUNITIES FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $1,038.20    $5.75 
Hypothetical (5% return before expenses)   $1,000.00    $1,019.56    $5.70 
Class C       
Actual   $1,000.00    $1,034.60    $9.59 
Hypothetical (5% return before expenses)   $1,000.00    $1,015.78    $9.50 
Class N       
Actual   $1,000.00    $1,039.80    $4.22 
Hypothetical (5% return before expenses)   $1,000.00    $1,021.07    $4.18 
Class Y       
Actual   $1,000.00    $1,039.60    $4.47 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.82    $4.43 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.12%, 1.87%, 0.82% and 0.87% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

VAUGHAN NELSON MID CAP FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $1,034.80    $5.90 
Hypothetical (5% return before expenses)   $1,000.00    $1,019.41    $5.85 
Class C       
Actual   $1,000.00    $1,031.10    $9.73 
Hypothetical (5% return before expenses)   $1,000.00    $1,015.63    $9.65 
Class N       
Actual   $1,000.00    $1,036.80    $4.36 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.92    $4.33 
Class Y       
Actual   $1,000.00    $1,036.60    $4.62 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.67    $4.58 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.15%, 1.90%, 0.85% and 0.90% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

|  30


VAUGHAN NELSON SMALL CAP VALUE FUND  BEGINNING
ACCOUNT VALUE
7/1/2021
   ENDING
ACCOUNT VALUE
12/31/2021
   EXPENSES PAID
DURING PERIOD
7/1/2021 – 12/31/2021*
 
Class A       
Actual   $1,000.00    $1,082.00    $6.56 
Hypothetical (5% return before expenses)   $1,000.00    $1,018.90    $6.36 
Class C       
Actual   $1,000.00    $1,078.50    $10.48 
Hypothetical (5% return before expenses)   $1,000.00    $1,015.12    $10.16 
Class N       
Actual   $1,000.00    $1,083.70    $4.99 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.42    $4.84 
Class Y       
Actual   $1,000.00    $1,083.90    $5.25 
Hypothetical (5% return before expenses)   $1,000.00    $1,020.16    $5.09 

 

*

Expenses are equal to the Fund’s annualized expense ratio (after waiver/reimbursement): 1.25%, 2.00%, 0.95% and 1.00% for Class A, C, N and Y, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), divided by 365 (to reflect the half-year period).

 

31  |


Portfolio of Investments – as of December 31, 2021

Loomis Sayles International Growth Fund

 

Shares   Description      
Value (†)
 
 Common Stocks — 97.7% of Net Assets 
  Argentina — 6.0%

 

 1,032   MercadoLibre, Inc.(a)  $1,391,549 
    

 

 

 
  Australia — 6.0%

 

 33,026   WiseTech Global Ltd.   1,400,680 
    

 

 

 
  Belgium — 2.1%

 

 8,040   Anheuser-Busch InBev S.A.   484,731 
    

 

 

 
  Brazil — 3.7%

 

 306,396   Ambev S.A., ADR   857,909 
    

 

 

 
  China — 25.7%

 

 3,304   Alibaba Group Holding Ltd., Sponsored ADR(a)(b)   392,482 
 4,070   Baidu, Inc., Sponsored ADR(a)(b)   605,575 
 57,800   Budweiser Brewing Co. APAC Ltd., 144A   151,954 
 456,500   Dali Foods Group Co. Ltd., 144A   239,153 
 3,100   Kweichow Moutai Co. Ltd., Class A   998,693 
 3,517   NXP Semiconductors NV   801,102 
 22,000   Tencent Holdings Ltd.(b)   1,283,724 
 23,573   Trip.com Group Ltd., ADR(a)(b)   580,367 
 40,469   Vipshop Holdings Ltd., ADR(a)(b)   339,940 
 11,933   Yum China Holdings, Inc.   594,741 
    

 

 

 
     5,987,731 
    

 

 

 
  Denmark — 4.0%

 

 8,249   Novo Nordisk A/S, Class B   926,576 
    

 

 

 
  France — 5.0%

 

 2,482   EssilorLuxottica S.A.   528,360 
 7,379   Sodexo S.A.   646,902 
    

 

 

 
     1,175,262 
    

 

 

 
  Germany — 3.3%

 

 5,548   SAP SE   780,823 
    

 

 

 
  Japan — 4.7%

 

 4,100   FANUC Corp.   871,504 
 5,300   Unicharm Corp.   230,588 
    

 

 

 
     1,102,092 
    

 

 

 
  Macau — 0.9%

 

 39,000   Galaxy Entertainment Group Ltd.(a)   202,316 
    

 

 

 
  Netherlands — 5.7%

 

 509   Adyen NV, 144A(a)   1,336,125 
    

 

 

 
  Switzerland — 17.8%

 

 6,639   CRISPR Therapeutics AG(a)   503,103 
 6,811   Nestle S.A., (Registered)   950,933 
 12,727   Novartis AG, (Registered)   1,118,347 
 3,830   Roche Holding AG   1,588,918 
    

 

 

 
     4,161,301 
    

 

 

 
  United Kingdom — 11.1%

 

 6,459   Diageo PLC   353,152 
 17,805   Experian PLC   877,001 
 9,470   Reckitt Benckiser Group PLC   815,212 
 10,119   Unilever PLC   542,441 
    

 

 

 
     2,587,806 
    

 

 

 
  United States — 1.7%

 

 4,226   Core Laboratories NV   94,282 
 9,810   Schlumberger NV   293,809 
    

 

 

 
     388,091 
    

 

 

 
  Total Common Stocks
(Identified Cost $23,841,001)
   22,782,992 
    

 

 

 
Principal
Amount
   Description  Value (†) 
 Short-Term Investments — 1.6%  
$382,811   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $382,811 on 1/03/2022 collateralized by $323,400 U.S. Treasury Inflation Indexed Note, 0.125% due 07/15/2030 valued at $390,573 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $382,811)
  $382,811 
    

 

 

 
    
  Total Investments — 99.3%
(Identified Cost $24,223,812)
   23,165,803 
  Other assets less liabilities — 0.7%   159,888 
    

 

 

 
  Net Assets — 100.0%  $23,325,691 
    

 

 

 
    
 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

 (b)   Security invests in variable interest entities based in China. See Note 10 of Notes to Financial Statements.

 

    
 144A   All or a portion of these securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2021, the value of Rule 144A holdings amounted to $1,727,232 or 7.4% of net assets.

 

 ADR   An American Depositary Receipt is a certificate issued by a custodian bank representing the right to receive securities of the foreign issuer described. The values of ADRs may be significantly influenced by trading on exchanges not located in the United States.

 

Industry Summary at December 31, 2021

 

Pharmaceuticals

   15.6

Beverages

   12.3 

Software

   9.3 

Internet & Direct Marketing Retail

   9.2 

Hotels, Restaurants & Leisure

   8.7 

Interactive Media & Services

   8.1 

IT Services

   5.7 

Food Products

   5.1 

Household Products

   4.5 

Professional Services

   3.8 

Machinery

   3.7 

Semiconductors & Semiconductor Equipment

   3.4 

Personal Products

   2.3 

Textiles, Apparel & Luxury Goods

   2.2 

Biotechnology

   2.1 

Energy Equipment & Services

   1.7 

Short-Term Investments

   1.6 
  

 

 

 

Total Investments

   99.3 

Other assets less liabilities

   0.7 
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

|  32


Portfolio of Investments – as of December 31, 2021

Loomis Sayles International Growth Fund – (continued)

 

Currency Exposure Summary at December 31, 2021

 

United States Dollar

   29.3

Euro

   18.4 

Swiss Franc

   15.7 

British Pound

   8.8 

Hong Kong Dollar

   8.1 

Australian Dollar

   6.0 

Japanese Yen

   4.7 

Yuan Renminbi

   4.3 

Danish Krone

   4.0 
  

 

 

 

Total Investments

   99.3 

Other assets less liabilities

   0.7 
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

33  |


Portfolio of Investments – as of December 31, 2021

Natixis Oakmark Fund

 

Shares   Description  Value (†) 
 Common Stocks — 93.9% of Net Assets 
  Aerospace & Defense — 0.9%

 

 16,300   General Dynamics Corp.  $3,398,061 
    

 

 

 
  Auto Components — 1.0%

 

 81,700   BorgWarner, Inc.   3,682,219 
    

 

 

 
  Automobiles — 1.6%

 

 103,400   General Motors Co.(a)   6,062,342 
    

 

 

 
  Banks — 6.4%

 

 178,700   Bank of America Corp.   7,950,363 
 149,600   Citigroup, Inc.   9,034,344 
 143,045   Wells Fargo & Co.   6,863,299 
    

 

 

 
     23,848,006 
    

 

 

 
  Beverages — 3.9%

 

 30,300   Constellation Brands, Inc., Class A   7,604,391 
 183,404   Keurig Dr Pepper, Inc.   6,760,271 
    

 

 

 
     14,364,662 
    

 

 

 
  Biotechnology — 1.9%

 

 10,987   Regeneron Pharmaceuticals, Inc.(a)   6,938,510 
    

 

 

 
  Capital Markets — 12.9%

 

 92,600   Bank of New York Mellon Corp. (The)   5,378,208 
 124,000   Charles Schwab Corp. (The)   10,428,400 
 22,575   Goldman Sachs Group, Inc. (The)   8,636,066 
 49,000   Intercontinental Exchange, Inc.   6,701,730 
 60,657   KKR & Co., Inc.   4,518,947 
 8,005   Moody’s Corp.   3,126,593 
 4,210   S&P Global, Inc.   1,986,825 
 76,943   State Street Corp.   7,155,699 
    

 

 

 
     47,932,468 
    

 

 

 
  Consumer Finance — 8.0%

 

 260,544   Ally Financial, Inc.   12,404,500 
 41,644   American Express Co.   6,812,958 
 73,305   Capital One Financial Corp.   10,635,823 
    

 

 

 
     29,853,281 
    

 

 

 
  Electronic Equipment, Instruments & Components — 1.5%

 

 35,747   TE Connectivity Ltd.   5,767,421 
    

 

 

 
  Entertainment — 3.2%

 

 13,855   Netflix, Inc.(a)   8,346,806 
 20,400   Take-Two Interactive Software, Inc.(a)   3,625,488 
    

 

 

 
     11,972,294 
    

 

 

 
  Health Care Providers & Services — 6.3%

 

 62,866   CVS Health Corp.   6,485,257 
 32,407   HCA Healthcare, Inc.   8,326,006 
 18,345   Humana, Inc.   8,509,512 
    

 

 

 
     23,320,775 
    

 

 

 
  Hotels, Restaurants & Leisure — 4.3%

 

 3,405   Booking Holdings, Inc.(a)   8,169,378 
 50,545   Hilton Worldwide Holdings, Inc.(a)   7,884,515 
    

 

 

 
     16,053,893 
    

 

 

 
  Industrial Conglomerates — 1.3%

 

 51,625   General Electric Co.   4,877,014 
    

 

 

 
  Insurance — 4.6%

 

 143,895   American International Group, Inc.   8,181,870 
 47,212   Reinsurance Group of America, Inc.   5,169,242 
 16,315   Willis Towers Watson PLC   3,874,649 
    

 

 

 
     17,225,761 
    

 

 

 
  Interactive Media & Services — 6.0%

 

 4,529   Alphabet, Inc., Class A(a)   13,120,694 
  Interactive Media & Services — continued  
 27,155   Meta Platforms, Inc., Class A(a)  $9,133,584 
    

 

 

 
     22,254,278 
    

 

 

 
  Internet & Direct Marketing Retail — 2.1%

 

 93,211   eBay, Inc.   6,198,531 
 196,930   Qurate Retail, Inc., Class A   1,496,668 
    

 

 

 
     7,695,199 
    

 

 

 
  IT Services — 8.8%

 

 19,320   Automatic Data Processing, Inc.   4,763,926 
 182,200   DXC Technology Co.(a)   5,865,018 
 77,600   Fiserv, Inc.(a)   8,054,104 
 27,959   Gartner, Inc.(a)   9,347,253 
 4,460   MasterCard, Inc., Class A   1,602,567 
 14,105   Visa, Inc., Class A   3,056,694 
    

 

 

 
     32,689,562 
    

 

 

 
  Machinery — 1.8%

 

 14,705   Cummins, Inc.   3,207,749 
 40,900   PACCAR, Inc.   3,609,834 
    

 

 

 
     6,817,583 
    

 

 

 
  Media — 3.7%

 

 11,409   Charter Communications, Inc., Class A(a)   7,438,326 
 127,700   Comcast Corp., Class A   6,427,141 
    

 

 

 
     13,865,467 
    

 

 

 
  Oil, Gas & Consumable Fuels — 8.2%

 

 261,517   APA Corp.   7,032,192 
 105,331   ConocoPhillips   7,602,791 
 48,248   Diamondback Energy, Inc.   5,203,547 
 120,924   EOG Resources, Inc.   10,741,679 
    

 

 

 
     30,580,209 
    

 

 

 
  Real Estate Management & Development — 1.1%

 

 38,200   CBRE Group, Inc., Class A(a)   4,145,082 
    

 

 

 
  Software — 1.5%

 

 20,576   Workday, Inc., Class A(a)   5,620,952 
    

 

 

 
  Tobacco — 1.6%

 

 122,469   Altria Group, Inc.   5,803,806 
    

 

 

 
  Wireless Telecommunication Services — 1.3%

 

 40,870   T-Mobile US, Inc.(a)   4,740,103 
    

 

 

 
  Total Common Stocks
(Identified Cost $239,400,200)
   349,508,948 
    

 

 

 
    
Principal
Amount
          
 Short-Term Investments — 5.4%  
$20,224,080   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $20,224,080 on 1/03/2022 collateralized by $14,758,200 U.S. Treasury Bond, 4.500% due 5/15/2038 valued at $20,628,613 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $20,224,080)
   20,224,080 
    

 

 

 
    
  Total Investments — 99.3%
(Identified Cost $259,624,280)
   369,733,028 
  Other assets less liabilities — 0.7%   2,433,397 
    

 

 

 
  Net Assets — 100.0%  $372,166,425 
    

 

 

 
    
 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

 

See accompanying notes to financial statements.

 

|  34


Portfolio of Investments – as of December 31, 2021

Natixis Oakmark Fund – (continued)

 

Industry Summary at December 31, 2021

 

Capital Markets

   12.9

IT Services

   8.8 

Oil, Gas & Consumable Fuels

   8.2 

Consumer Finance

   8.0 

Banks

   6.4 

Health Care Providers & Services

   6.3 

Interactive Media & Services

   6.0 

Insurance

   4.6 

Hotels, Restaurants & Leisure

   4.3 

Beverages

   3.9 

Media

   3.7 

Entertainment

   3.2 

Internet & Direct Marketing Retail

   2.1 

Other Investments, less than 2% each

   15.5 

Short-Term Investments

   5.4 
  

 

 

 

Total Investments

   99.3 

Other assets less liabilities

   0.7 
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

35  |


Portfolio of Investments – as of December 31, 2021

Natixis Oakmark International Fund

 

Shares   Description  Value (†) 
 Common Stocks — 96.9% of Net Assets 
  Australia — 2.0%

 

 508,300   Brambles Ltd.  $3,932,373 
 668,820   Orica Ltd.   6,669,647 
    

 

 

 
     10,602,020 
    

 

 

 
  Belgium — 2.0%

 

 175,700   Anheuser-Busch InBev S.A.   10,592,944 
    

 

 

 
  Canada — 1.9%

 

 115,700   Open Text Corp.   5,491,623 
 80,199   Restaurant Brands International, Inc.   4,866,475 
    

 

 

 
     10,358,098 
    

 

 

 
  China — 5.0%

 

 729,300   Alibaba Group Holding Ltd.(a)   10,717,486 
 126,975   Prosus NV   10,516,705 
 45,646   Trip.com Group Ltd.(a)   1,119,539 
 543,696   Vipshop Holdings Ltd., ADR(a)   4,567,047 
    

 

 

 
     26,920,777 
    

 

 

 
  Finland — 0.7%

 

 102,500   UPM-Kymmene OYJ   3,899,981 
    

 

 

 
  France — 12.5%

 

 326,305   Accor S.A.(a)   10,576,657 
 269,491   BNP Paribas S.A.(b)   18,632,884 
 14,600   Capgemini SE   3,578,175 
 111,600   Danone S.A.   6,936,995 
 130,198   Publicis Groupe S.A.   8,771,965 
 261,612   Valeo S.A.   7,889,269 
 190,400   Worldline S.A., 144A(a)   10,597,694 
    

 

 

 
     66,983,639 
    

 

 

 
  Germany — 24.4%

 

 76,810   Allianz SE, (Registered)   18,116,300 
 371,130   Bayer AG, (Registered)   19,819,931 
 167,900   Bayerische Motoren Werke AG   16,797,089 
 139,959   Continental AG(a)   14,704,852 
��172,114   Daimler AG, (Registered)   13,150,223 
 115,907   Daimler Truck Holding AG(a)   4,260,991 
 161,900   Fresenius Medical Care AG & Co. KGaA   10,495,685 
 198,500   Fresenius SE & Co. KGaA   7,978,387 
 81,900   Henkel AG & Co. KGaA   6,384,195 
 62,900   SAP SE   8,852,515 
 822,300   thyssenkrupp AG(a)   9,008,785 
 26,511   Vitesco Technologies Group AG, Class A(a)   1,300,124 
    

 

 

 
     130,869,077 
    

 

 

 
  India — 1.0%

 

 620,975   Axis Bank Ltd.(a)   5,642,961 
    

 

 

 
  Indonesia — 0.7%

 

 7,495,500   Bank Mandiri Persero Tbk PT   3,701,122 
    

 

 

 
  Ireland — 1.4%

 

 68,638   Ryanair Holdings PLC, Sponsored ADR(a)   7,023,727 
 24,200   Ryanair Holdings PLC(a)   419,054 
    

 

 

 
     7,442,781 
    

 

 

 
  Italy — 3.2%

 

 6,667,700   Intesa Sanpaolo SpA   17,222,157 
    

 

 

 
  Japan — 1.9%

 

 145,200   Komatsu Ltd.   3,395,645 
 363,900   Toyota Motor Corp.   6,725,813 
    

 

 

 
     10,121,458 
    

 

 

 
  Korea — 1.2%

 

 19,750   NAVER Corp.(a)   6,269,071 
    

 

 

 
  Mexico — 1.1%

 

 621,800   Grupo Televisa SAB, Sponsored ADR  $5,826,266 
    

 

 

 
  Netherlands — 2.2%

 

 129,544   EXOR NV   11,596,474 
    

 

 

 
  South Africa — 0.7%

 

 25,788   Naspers Ltd., N Shares   4,002,582 
    

 

 

 
  Spain — 1.6%

 

 123,630   Amadeus IT Group S.A.(a)   8,365,329 
    

 

 

 
  Sweden — 4.7%

 

 516,655   H & M Hennes & Mauritz AB, B Shares   10,137,859 
 334,800   SKF AB, B Shares   7,917,925 
 298,300   Volvo AB, B Shares   6,898,631 
    

 

 

 
     24,954,415 
    

 

 

 
  Switzerland — 12.2%

 

 8,200   Cie Financiere Richemont S.A., (Registered)   1,225,366 
 1,767,639   Credit Suisse Group AG, (Registered)(b)   17,138,354 
 3,067,780   Glencore PLC(b)   15,631,191 
 214,521   Holcim Ltd., (Registered)   10,910,330 
 118,500   Novartis AG, (Registered)   10,412,829 
 12,900   Roche Holding AG   5,351,709 
 15,299   Swatch Group AG (The)   4,659,095 
    

 

 

 
     65,328,874 
    

 

 

 
  United Kingdom — 16.5%

 

 716,392   CNH Industrial NV   13,850,865 
 218,100   Compass Group PLC(a)   4,910,235 
 568,377   Informa PLC(a)   3,979,535 
 350,432   Liberty Global PLC, Class A(a)   9,720,984 
 30,524,500   Lloyds Banking Group PLC   19,822,345 
 2,182,200   NatWest Group PLC   6,682,583 
 325,700   Prudential PLC   5,632,279 
 52,800   Reckitt Benckiser Group PLC   4,545,215 
 1,165,300   Rolls-Royce Holdings PLC(a)   1,945,044 
 162,989   Schroders PLC   7,867,052 
 148,400   Smiths Group PLC   3,176,543 
 407,500   WPP PLC   6,205,298 
    

 

 

 
     88,337,978 
    

 

 

 
  Total Common Stocks
(Identified Cost $490,568,124)
   519,038,004 
    

 

 

 
    
 Preferred Stocks — 1.3% 
 Non-Convertible Preferred Stocks — 1.3% 
  Korea — 1.3%  
 114,600   Samsung Electronics Co. Ltd., 1.530%, (KRW)
(Identified Cost $6,734,682)
   6,851,437 
    

 

 

 
    
Principal
Amount
          
 Short-Term Investments – 1.0%  
$5,581,234   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $5,581,234 on 1/03/2022 collateralized by $4,090,300 U.S. Treasury Bond, 4.375% due 11/15/2039 valued at $5,692,867 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $5,581,234)
   5,581,234 
    

 

 

 
    
  Total Investments — 99.2%
(Identified Cost $502,884,040)
   531,470,675 
  Other assets less liabilities — 0.8%   4,398,273 
    

 

 

 
  Net Assets — 100.0%  $535,868,948 
    

 

 

 

 

See accompanying notes to financial statements.

 

|  36


Portfolio of Investments – as of December 31, 2021

Natixis Oakmark International Fund – (continued)

 

 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

 (b)   Security (or a portion thereof) has been designated to cover the Fund’s obligations under open derivative contracts.

 

    
 144A   All or a portion of these securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2021, the value of Rule 144A holdings amounted to $10,597,694 or 2.0% of net assets.

 

 ADR   An American Depositary Receipt is a certificate issued by a custodian bank representing the right to receive securities of the foreign issuer described. The values of ADRs may be significantly influenced by trading on exchanges not located in the United States.

 

    
 CHF   Swiss Franc

 

 KRW   South Korean Won

 

 

At December 31, 2021, the Fund had the following open forward foreign currency contracts:

 

Counterparty  Delivery
Date
   Currency
Bought/
Sold (B/S)
   

Units of

Currency

   In
Exchange for
   Notional
Value
   Unrealized
Appreciation
(Depreciation)
 

State Street Bank and Trust Company

   6/15/2022    CHF   $6,786,000   $7,388,913   $7,483,240   $(94,327
            

 

 

 

 

Industry Summary at December 31, 2021

 

Banks

   13.3

Automobiles

   6.9 

Machinery

   6.8 

Pharmaceuticals

   6.7 

Internet & Direct Marketing Retail

   5.5 

Capital Markets

   4.7 

Media

   4.6 

Metals & Mining

   4.6 

Insurance

   4.5 

Auto Components

   4.4 

IT Services

   4.2 

Hotels, Restaurants & Leisure

   4.0 

Health Care Providers & Services

   3.5 

Software

   2.6 

Diversified Financial Services

   2.2 

Household Products

   2.0 

Construction Materials

   2.0 

Beverages

   2.0 

Other Investments, less than 2% each

   13.7 

Short-Term Investments

   1.0 
  

 

 

 

Total Investments

   99.2 

Other assets less liabilities (including forward foreign currency contracts)

   0.8 
  

 

 

 

Net Assets

   100.0
  

 

 

 

Currency Exposure Summary at December 31, 2021

 

Euro

   51.3

British Pound

   15.0 

Swiss Franc

   9.3 

United States Dollar

   6.9 

Swedish Krona

   4.7 

South Korean Won

   2.5 

Hong Kong Dollar

   2.2 

Australian Dollar

   2.0 

Other, less than 2% each

   5.3 
  

 

 

 

Total Investments

   99.2 

Other assets less liabilities (including forward foreign currency contracts)

   0.8 
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

37  |


Portfolio of Investments – as of December 31, 2021

Natixis U.S. Equity Opportunities Fund

 

Shares   Description      
Value (†)
 
 

Common Stocks — 96.3% of Net Assets

 
  Aerospace & Defense — 2.1%

 

 110,342   Boeing Co. (The)(a)  $22,214,052 
    

 

 

 
  Air Freight & Logistics — 0.8%

 

 66,796   Expeditors International of Washington, Inc.   8,970,035 
    

 

 

 
  Automobiles — 1.2%

 

 220,000   General Motors Co.(a)   12,898,600 
    

 

 

 
  Banks — 4.7%

 

 380,260   Bank of America Corp.   16,917,767 
 318,405   Citigroup, Inc.   19,228,478 
 304,400   Wells Fargo & Co.   14,605,112 
    

 

 

 
     50,751,357 
    

 

 

 
  Beverages — 4.8%

 

 64,591   Constellation Brands, Inc., Class A   16,210,403 
 390,500   Keurig Dr Pepper, Inc.   14,393,830 
 213,493   Monster Beverage Corp.(a)   20,503,868 
    

 

 

 
     51,108,101 
    

 

 

 
  Biotechnology — 4.9%

 

 74,446   Alnylam Pharmaceuticals, Inc.(a)   12,624,552 
 53,174   BioMarin Pharmaceutical, Inc.(a)   4,697,923 
 76,519   CRISPR Therapeutics AG(a)   5,798,610 
 47,623   Regeneron Pharmaceuticals, Inc.(a)   30,074,877 
    

 

 

 
     53,195,962 
    

 

 

 
  Capital Markets — 7.2%

 

 263,945   Charles Schwab Corp. (The)   22,197,775 
 18,574   FactSet Research Systems, Inc.   9,027,150 
 104,300   Intercontinental Exchange, Inc.   14,265,111 
 15,718   MSCI, Inc.   9,630,261 
 115,433   SEI Investments Co.   7,034,487 
 163,700   State Street Corp.   15,224,100 
    

 

 

 
     77,378,884 
    

 

 

 
  Communications Equipment — 0.8%

 

 133,363   Cisco Systems, Inc.   8,451,213 
    

 

 

 
  Consumer Finance — 5.9%

 

 549,000   Ally Financial, Inc.   26,137,890 
 88,500   American Express Co.   14,478,600 
 155,885   Capital One Financial Corp.   22,617,355 
    

 

 

 
     63,233,845 
    

 

 

 
  Energy Equipment & Services — 0.7%

 

 255,577   Schlumberger NV   7,654,531 
    

 

 

 
  Entertainment — 3.4%

 

 29,510   Netflix, Inc.(a)   17,778,004 
 118,039   Walt Disney Co. (The)(a)   18,283,061 
    

 

 

 
     36,061,065 
    

 

 

 
  Health Care Equipment & Supplies — 0.6%

 

 17,756   Intuitive Surgical, Inc.(a)   6,379,731 
    

 

 

 
  Health Care Providers & Services — 3.3%

 

 68,700   HCA Healthcare, Inc.   17,650,404 
 39,120   Humana, Inc.   18,146,203 
    

 

 

 
     35,796,607 
    

 

 

 
  Hotels, Restaurants & Leisure — 5.5%

 

 7,245   Booking Holdings, Inc.(a)   17,382,421 
 107,400   Hilton Worldwide Holdings, Inc.(a)   16,753,326 
 113,726   Starbucks Corp.   13,302,530 
 113,077   Yum China Holdings, Inc.   5,635,758 
 40,738   Yum! Brands, Inc.   5,656,879 
    

 

 

 
     58,730,914 
    

 

 

 
  Household Products — 0.4%

 

 56,019   Colgate-Palmolive Co.  $4,780,662 
    

 

 

 
  Industrial Conglomerates — 1.0%

 

 109,793   General Electric Co.   10,372,145 
    

 

 

 
  Insurance — 2.5%

 

 306,155   American International Group, Inc.   17,407,973 
 90,700   Reinsurance Group of America, Inc.   9,930,743 
    

 

 

 
     27,338,716 
    

 

 

 
  Interactive Media & Services — 10.1%

 

 15,295   Alphabet, Inc., Class A(a)   44,310,227 
 5,763   Alphabet, Inc., Class C(a)   16,675,759 
 143,138   Meta Platforms, Inc., Class A(a)   48,144,466 
    

 

 

 
     109,130,452 
    

 

 

 
  Internet & Direct Marketing Retail — 3.8%

 

 62,111   Alibaba Group Holding Ltd., Sponsored ADR(a)   7,378,166 
 10,109   Amazon.com, Inc.(a)   33,706,843 
    

 

 

 
     41,085,009 
    

 

 

 
  IT Services — 5.7%

 

 16,981   Automatic Data Processing, Inc.   4,187,175 
 165,200   Fiserv, Inc.(a)   17,146,108 
 59,000   Gartner, Inc.(a)   19,724,880 
 94,470   Visa, Inc., Class A   20,472,594 
    

 

 

 
     61,530,757 
    

 

 

 
  Life Sciences Tools & Services — 1.2%

 

 33,944   Illumina, Inc.(a)   12,913,655 
    

 

 

 
  Machinery — 1.1%

 

 34,297   Deere & Co.   11,760,098 
    

 

 

 
  Media — 2.8%

 

 24,385   Charter Communications, Inc., Class A(a)   15,898,289 
 271,880   Comcast Corp., Class A   13,683,720 
    

 

 

 
     29,582,009 
    

 

 

 
  Oil, Gas & Consumable Fuels — 5.0%

 

 554,341   APA Corp.   14,906,229 
 224,200   ConocoPhillips   16,182,756 
 257,238   EOG Resources, Inc.   22,850,452 
    

 

 

 
     53,939,437 
    

 

 

 
  Pharmaceuticals — 2.9%

 

 146,692   Novartis AG, Sponsored ADR   12,831,149 
 48,248   Novo Nordisk A/S, Sponsored ADR   5,403,776 
 247,251   Roche Holding AG, Sponsored ADR   12,780,404 
    

 

 

 
     31,015,329 
    

 

 

 
  Semiconductors & Semiconductor Equipment — 4.8%

 

 129,010   NVIDIA Corp.   37,943,131 
 72,233   QUALCOMM, Inc.   13,209,249 
    

 

 

 
     51,152,380 
    

 

 

 
  Software — 8.3%

 

 78,375   Autodesk, Inc.(a)   22,038,266 
 50,171   Microsoft Corp.   16,873,511 
 253,690   Oracle Corp.   22,124,305 
 56,864   salesforce.com, Inc.(a)   14,450,848 
 52,403   Workday, Inc., Class A(a)   14,315,452 
    

 

 

 
     89,802,382 
    

 

 

 
  Textiles, Apparel & Luxury Goods — 0.8%

 

 422,554   Under Armour, Inc., Class A(a)   8,953,919 
    

 

 

 
  Total Common Stocks
(Identified Cost $627,148,616)
   1,036,181,847 
    

 

 

 

 

See accompanying notes to financial statements.

 

|  38


Portfolio of Investments – as of December 31, 2021

Natixis U.S. Equity Opportunities Fund – (continued)

 

Principal
Amount
   Description  Value (†) 
 Short-Term Investments — 1.6%  
$17,204,118   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $17,204,118 on 1/03/2022 collateralized by $7,134,500 U.S. Treasury Bond, 4.250% due 11/15/2040 valued at $9,838,918; $5,515,500 U.S. Treasury Bond, 4.500% due 5/15/2038 valued at $7,709,417 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $17,204,118)
  $17,204,118 
    

 

 

 
    
  Total Investments — 97.9%
(Identified Cost $644,352,734)
   1,053,385,965 
  Other assets less liabilities — 2.1%   22,444,831 
    

 

 

 
  Net Assets — 100.0%  $1,075,830,796 
    

 

 

 
    
 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

    
 ADR   An American Depositary Receipt is a certificate issued by a custodian bank representing the right to receive securities of the foreign issuer described. The values of ADRs may be significantly influenced by trading on exchanges not located in the United States.

 

Industry Summary at December 31, 2021

 

Interactive Media & Services

   10.1

Software

   8.3 

Capital Markets

   7.2 

Consumer Finance

   5.9 

IT Services

   5.7 

Hotels, Restaurants & Leisure

   5.5 

Oil, Gas & Consumable Fuels

   5.0 

Biotechnology

   4.9 

Semiconductors & Semiconductor Equipment

   4.8 

Beverages

   4.8 

Banks

   4.7 

Internet & Direct Marketing Retail

   3.8 

Entertainment

   3.4 

Health Care Providers & Services

   3.3 

Pharmaceuticals

   2.9 

Media

   2.8 

Insurance

   2.5 

Aerospace & Defense

   2.1 

Other Investments, less than 2% each

   8.6 

Short-Term Investments

   1.6 
  

 

 

 

Total Investments

   97.9 

Other assets less liabilities

   2.1 
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

39  |


Portfolio of Investments – as of December 31, 2021

Vaughan Nelson Mid Cap Fund

 

Shares   Description      
Value (†)
 
 Common Stocks — 98.1% of Net Assets 
  Banks — 3.2%

 

 91,990   Bank of N.T. Butterfield & Son Ltd. (The)  $3,505,739 
 292,001   Huntington Bancshares, Inc.   4,502,655 
 86,270   PacWest Bancorp   3,896,816 
    

 

 

 
     11,905,210 
    

 

 

 
  Building Products — 1.0%

 

 27,885   Allegion PLC   3,693,089 
    

 

 

 
  Capital Markets — 5.0%

 

 56,305   Ares Management Corp., Class A   4,575,908 
 129,117   Brightsphere Investment Group, Inc.   3,305,395 
 21,810   Nasdaq, Inc.   4,580,318 
 59,912   Raymond James Financial, Inc.   6,015,165 
    

 

 

 
     18,476,786 
    

 

 

 
  Chemicals — 4.2%

 

 169,660   Axalta Coating Systems Ltd.(a)   5,619,139 
 68,940   FMC Corp.   7,575,816 
 22,920   LyondellBasell Industries NV, Class A   2,113,912 
    

 

 

 
     15,308,867 
    

 

 

 
  Commercial Services & Supplies — 1.1%

 

 28,995   Republic Services, Inc.   4,043,353 
    

 

 

 
  Communications Equipment — 4.8%

 

 65,215   Motorola Solutions, Inc.   17,718,916 
    

 

 

 
  Construction & Engineering — 2.7%

 

 240,330   WillScot Mobile Mini Holdings Corp.(a)   9,815,077 
    

 

 

 
  Consumer Finance — 1.6%

 

 129,140   Synchrony Financial   5,990,805 
    

 

 

 
  Containers & Packaging — 3.5%

 

 16,845   Avery Dennison Corp.   3,648,122 
 83,080   Crown Holdings, Inc.   9,190,309 
    

 

 

 
     12,838,431 
    

 

 

 
  Diversified Consumer Services — 1.4%

 

 58,520   Grand Canyon Education, Inc.(a)   5,015,749 
    

 

 

 
  Electric Utilities — 3.7%

 

 107,375   Alliant Energy Corp.   6,600,341 
 101,565   Evergy, Inc.   6,968,375 
    

 

 

 
     13,568,716 
    

 

 

 
  Electrical Equipment — 3.4%

 

 48,100   AMETEK, Inc.   7,072,624 
 17,335   Hubbell, Inc.   3,610,360 
 52,800   nVent Electric PLC   2,006,400 
    

 

 

 
     12,689,384 
    

 

 

 
  Electronic Equipment, Instruments & Components — 2.0%

 

 8,955   CDW Corp.   1,833,805 
 26,245   Keysight Technologies, Inc.(a)   5,419,855 
    

 

 

 
     7,253,660 
    

 

 

 
  Food & Staples Retailing — 3.7%

 

 296,055   Performance Food Group Co.(a)   13,585,964 
    

 

 

 
  Health Care Equipment & Supplies — 2.7%

 

 13,210   Cooper Cos., Inc. (The)   5,534,198 
 56,390   Hologic, Inc.(a)   4,317,218 
    

 

 

 
     9,851,416 
    

 

 

 
  Health Care Providers & Services — 1.9%

 

 954,755   Aveanna Healthcare Holdings, Inc.(a)   7,065,187 
    

 

 

 
  Hotels, Restaurants & Leisure — 1.0%

 

 96,600   Aramark   3,559,710 
    

 

 

 
  Independent Power & Renewable Electricity Producers — 2.2%

 

 360,695   Vistra Corp.  $8,213,025 
    

 

 

 
  Insurance — 5.8%

 

 14,140   Allstate Corp. (The)   1,663,571 
 31,520   Arthur J. Gallagher & Co.   5,347,998 
 104,180   Athene Holding Ltd., Class A(a)   8,681,320 
 51,870   Reinsurance Group of America, Inc.   5,679,246 
    

 

 

 
     21,372,135 
    

 

 

 
  IT Services — 3.8%

 

 102,145   Alliance Data Systems Corp.   6,799,792 
 68,895   MAXIMUS, Inc.   5,488,865 
 121,030   SolarWinds Corp.   1,717,416 
    

 

 

 
     14,006,073 
    

 

 

 
  Life Sciences Tools & Services — 8.2%

 

 16,005   Agilent Technologies, Inc.   2,555,198 
 255,490   Avantor, Inc.(a)   10,766,349 
 24,347   IQVIA Holdings, Inc.(a)   6,869,262 
 424,620   Sotera Health Co.(a)   9,999,801 
    

 

 

 
     30,190,610 
    

 

 

 
  Machinery — 2.0%

 

 27,220   Crane Co.   2,769,091 
 54,485   Otis Worldwide Corp.   4,744,009 
    

 

 

 
     7,513,100 
    

 

 

 
  Media — 2.6%

 

 64,505   Nexstar Media Group, Inc., Class A   9,738,965 
    

 

 

 
  Metals & Mining — 0.9%

 

 176,935   Constellium SE(a)   3,168,906 
    

 

 

 
  Multi-Utilities — 3.7%

 

 73,770   Ameren Corp.   6,566,267 
 107,375   CMS Energy Corp.   6,984,744 
    

 

 

 
     13,551,011 
    

 

 

 
  Oil, Gas & Consumable Fuels — 3.9%

 

 47,660   Diamondback Energy, Inc.   5,140,131 
 50,230   Pioneer Natural Resources Co.   9,135,832 
    

 

 

 
     14,275,963 
    

 

 

 
  Pharmaceuticals — 3.4%

 

 438,230   Elanco Animal Health, Inc.(a)   12,436,967 
    

 

 

 
  Professional Services — 1.8%

 

 24,075   CACI International, Inc., Class A(a)   6,481,231 
    

 

 

 
  REITs – Diversified — 1.4%

 

 465,365   New Residential Investment Corp.   4,984,059 
    

 

 

 
  Semiconductors & Semiconductor Equipment — 1.4%

 

 16,535   Analog Devices, Inc.   2,906,357 
 16,315   Entegris, Inc.   2,260,933 
    

 

 

 
     5,167,290 
    

 

 

 
  Software — 3.9%

 

 492,102   N-Able, Inc.(a)   5,462,332 
 107,330   SS&C Technologies Holdings, Inc.   8,798,914 
    

 

 

 
     14,261,246 
    

 

 

 
  Specialty Retail — 2.8%

 

 432,200   Leslie’s, Inc.(a)   10,225,852 
    

 

 

 
  Textiles, Apparel & Luxury Goods — 3.4%

 

 292,330   Skechers U.S.A., Inc., Class A(a)   12,687,122 
    

 

 

 
  Total Common Stocks
(Identified Cost $305,590,376)
   360,653,875 
    

 

 

 

 

See accompanying notes to financial statements.

 

|  40


Portfolio of Investments – as of December 31, 2021

Vaughan Nelson Mid Cap Fund – (continued)

 

Principal
Amount
   Description  Value (†) 
 Short-Term Investments — 2.0% 
$7,086,204   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $7,086,204 on 1/03/2022 collateralized by $5,171,100 U.S. Treasury Bond, 4.500% due 5/15/2038 valued at $7,228,024 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $7,086,204)
  $7,086,204 
    

 

 

 
    
  Total Investments — 100.1%
(Identified Cost $312,676,580)
   367,740,079 
  Other assets less liabilities — (0.1)%   (201,426
    

 

 

 
  Net Assets — 100.0%  $367,538,653 
    

 

 

 
    
 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

    
 REITs   Real Estate Investment Trusts

 

Industry Summary at December 31, 2021

 

Life Sciences Tools & Services

   8.2

Insurance

   5.8 

Capital Markets

   5.0 

Communications Equipment

   4.8 

Chemicals

   4.2 

Oil, Gas & Consumable Fuels

   3.9 

Software

   3.9 

IT Services

   3.8 

Food & Staples Retailing

   3.7 

Electric Utilities

   3.7 

Multi-Utilities

   3.7 

Containers & Packaging

   3.5 

Electrical Equipment

   3.4 

Textiles, Apparel & Luxury Goods

   3.4 

Pharmaceuticals

   3.4 

Banks

   3.2 

Specialty Retail

   2.8 

Health Care Equipment & Supplies

   2.7 

Construction & Engineering

   2.7 

Media

   2.6 

Independent Power & Renewable Electricity Producers

   2.2 

Machinery

   2.0 

Electronic Equipment, Instruments & Components

   2.0 

Other Investments, less than 2% each

   13.5 

Short-Term Investments

   2.0 
  

 

 

 

Total Investments

   100.1 

Other assets less liabilities

   (0.1
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

41  |


Portfolio of Investments – as of December 31, 2021

Vaughan Nelson Small Cap Value Fund

 

Shares   Description      
Value (†)
 
 

Common Stocks — 98.7% of Net Assets

 
  Banks — 7.7%

 

 78,100   Cadence Bank  $2,326,599 
 119,570   Old National Bancorp   2,166,608 
 51,980   PacWest Bancorp   2,347,936 
 19,815   SouthState Corp.   1,587,380 
 41,770   United Bankshares, Inc.   1,515,416 
 46,285   United Community Banks, Inc.   1,663,483 
    

 

 

 
     11,607,422 
    

 

 

 
  Biotechnology — 0.6%

 

 18,948   Emergent BioSolutions, Inc.(a)   823,670 
    

 

 

 
  Building Products — 1.7%

 

 13,135   Builders FirstSource, Inc.(a)   1,125,801 
 21,340   Gibraltar Industries, Inc.(a)   1,422,951 
    

 

 

 
     2,548,752 
    

 

 

 
  Capital Markets — 4.0%

 

 17,985   Artisan Partners Asset Management, Inc., Class A   856,805 
 22,955   LPL Financial Holdings, Inc.   3,674,866 
 22,610   Moelis & Co., Class A   1,413,351 
    

 

 

 
     5,945,022 
    

 

 

 
  Chemicals — 7.5%

 

 93,345   Chemours Co. (The)   3,132,658 
 210,815   Element Solutions, Inc.   5,118,588 
 27,525   FMC Corp.   3,024,723 
    

 

 

 
     11,275,969 
    

 

 

 
  Commercial Services & Supplies — 2.2%

 

 35,040   Ritchie Bros. Auctioneers, Inc.   2,144,798 
 5,630   UniFirst Corp.   1,184,552 
    

 

 

 
     3,329,350 
    

 

 

 
  Electronic Equipment, Instruments & Components — 7.5%

 

 19,815   Advanced Energy Industries, Inc.   1,804,354 
 13,300   Fabrinet(a)   1,575,651 
 38,485   II-VI, Inc.(a)   2,629,680 
 49,160   Insight Enterprises, Inc.(a)   5,240,456 
    

 

 

 
     11,250,141 
    

 

 

 
  Energy Equipment & Services — 0.6%

 

 149,015   TechnipFMC PLC(a)   882,169 
    

 

 

 
  Food & Staples Retailing — 2.4%

 

 78,265   Performance Food Group Co.(a)   3,591,581 
    

 

 

 
  Food Products — 1.5%

 

 90,270   Nomad Foods Ltd.(a)   2,291,955 
    

 

 

 
  Gas Utilities — 2.7%

 

 29,360   Southwest Gas Holdings, Inc.   2,056,668 
 30,430   Spire, Inc.   1,984,645 
    

 

 

 
     4,041,313 
    

 

 

 
  Health Care Equipment & Supplies — 1.3%

 

 26,310   Hologic, Inc.(a)   2,014,294 
    

 

 

 
  Health Care Providers & Services — 2.8%

 

 13,050   Molina Healthcare, Inc.(a)   4,150,944 
    

 

 

 
  Hotels, Restaurants & Leisure — 4.2%

 

 51,180   Bally’s Corp.(a)   1,947,911 
 73,330   Everi Holdings, Inc.(a)   1,565,596 
 97,529   International Game Technology PLC   2,819,563 
    

 

 

 
     6,333,070 
    

 

 

 
  Household Durables — 1.6%

 

 16,575   Installed Building Products, Inc.   2,315,859 
    

 

 

 
  Insurance — 5.5%

 

 37,110   Brown & Brown, Inc.   2,608,091 
  Insurance — continued  
 32,610   First American Financial Corp.  $2,551,080 
 28,930   Selective Insurance Group, Inc.   2,370,524 
 85,380   Trean Insurance Group, Inc.(a)   760,736 
    

 

 

 
     8,290,431 
    

 

 

 
  IT Services — 4.4%

 

 30,880   ExlService Holdings, Inc.(a)   4,470,497 
 24,735   WNS Holdings Ltd., ADR(a)   2,182,122 
    

 

 

 
     6,652,619 
    

 

 

 
  Life Sciences Tools & Services — 3.9%

 

 37,695   Avantor, Inc.(a)   1,588,467 
 41,690   Syneos Health, Inc.(a)   4,280,729 
    

 

 

 
     5,869,196 
    

 

 

 
  Machinery — 4.6%

 

 13,880   Alamo Group, Inc.   2,042,858 
 69,455   Federal Signal Corp.   3,010,180 
 29,865   SPX Corp.(a)   1,782,343 
    

 

 

 
     6,835,381 
    

 

 

 
  Media — 2.8%

 

 76,130   Sinclair Broadcast Group, Inc., Class A   2,012,116 
 120,935   TEGNA, Inc.   2,244,554 
    

 

 

 
     4,256,670 
    

 

 

 
  Oil, Gas & Consumable Fuels — 3.5%

 

 48,135   Antero Resources Corp.(a)   842,363 
 86,460   Comstock Resources, Inc.(a)   699,461 
 52,920   Ovintiv, Inc.   1,783,404 
 20,860   PDC Energy, Inc.   1,017,551 
 185,370   Southwestern Energy Co.(a)   863,824 
    

 

 

 
     5,206,603 
    

 

 

 
  Personal Products — 1.7%

 

 239,870   Coty, Inc., Class A(a)   2,518,635 
    

 

 

 
  Professional Services — 6.5%

 

 31,360   ASGN, Inc.(a)   3,869,824 
 11,425   CACI International, Inc., Class A(a)   3,075,724 
 18,240   FTI Consulting, Inc.(a)   2,798,381 
    

 

 

 
     9,743,929 
    

 

 

 
  Road & Rail — 2.6%

 

 11,985   Landstar System, Inc.   2,145,555 
 5,150   Saia, Inc.(a)   1,735,704 
    

 

 

 
     3,881,259 
    

 

 

 
  Semiconductors & Semiconductor Equipment — 5.4%

 

 11,600   CMC Materials, Inc.   2,223,604 
 31,415   Ichor Holdings Ltd.(a)   1,446,032 
 17,250   MKS Instruments, Inc.   3,004,433 
 24,135   Ultra Clean Holdings, Inc.(a)   1,384,384 
    

 

 

 
     8,058,453 
    

 

 

 
  Textiles, Apparel & Luxury Goods — 2.4%

 

 54,180   Capri Holdings Ltd.(a)   3,516,824 
    

 

 

 
  Trading Companies & Distributors — 7.1%

 

 27,535   Beacon Roofing Supply, Inc.(a)   1,579,132 
 28,930   GATX Corp.   3,014,217 
 28,080   Rush Enterprises, Inc., Class A   1,562,371 
 103,585   Univar Solutions, Inc.(a)   2,936,635 
 5,080   Watsco, Inc.   1,589,430 
    

 

 

 
     10,681,785 
    

 

 

 
  Total Common Stocks
(Identified Cost $123,342,022)
   147,913,296 
    

 

 

 
    

 

See accompanying notes to financial statements.

 

|  42


Portfolio of Investments – as of December 31, 2021

Vaughan Nelson Small Cap Value Fund – (continued)

 

Principal
Amount
   Description  Value (†) 
 Short-Term Investments — 1.6%  
$2,415,684   Tri-Party Repurchase Agreement with Fixed Income Clearing Corporation, dated 12/31/2021 at 0.000% to be repurchased at $2,415,684 on 1/03/2022 collateralized by $1,762,900 U.S. Treasury Bond, 4.500% due 5/15/2038 valued at $2,464,134 including accrued interest (Note 2 of Notes to Financial Statements)
(Identified Cost $2,415,684)
  $2,415,684 
    

 

 

 
    
  Total Investments — 100.3%
(Identified Cost $125,757,706)
   150,328,980 
  Other assets less liabilities — (0.3)%   (432,966
    

 

 

 
  Net Assets — 100.0%  $149,896,014 
    

 

 

 
    
 (†)   See Note 2 of Notes to Financial Statements.

 

 (a)   Non-income producing security.

 

    
 ADR   An American Depositary Receipt is a certificate issued by a custodian bank representing the right to receive securities of the foreign issuer described. The values of ADRs may be significantly influenced by trading on exchanges not located in the United States.

 

Industry Summary at December 31, 2021

 

Banks

   7.7

Chemicals

   7.5 

Electronic Equipment, Instruments & Components

   7.5 

Trading Companies & Distributors

   7.1 

Professional Services

   6.5 

Insurance

   5.5 

Semiconductors & Semiconductor Equipment

   5.4 

Machinery

   4.6 

IT Services

   4.4 

Hotels, Restaurants & Leisure

   4.2 

Capital Markets

   4.0 

Life Sciences Tools & Services

   3.9 

Oil, Gas & Consumable Fuels

   3.5 

Media

   2.8 

Health Care Providers & Services

   2.8 

Gas Utilities

   2.7 

Road & Rail

   2.6 

Food & Staples Retailing

   2.4 

Textiles, Apparel & Luxury Goods

   2.4 

Commercial Services & Supplies

   2.2 

Other Investments, less than 2% each

   9.0 

Short-Term Investments

   1.6 
  

 

 

 

Total Investments

   100.3 

Other assets less liabilities

   (0.3
  

 

 

 

Net Assets

   100.0
  

 

 

 

 

See accompanying notes to financial statements.

 

43  |


Statements of Assets and Liabilities

 

December 31, 2021

 

   International
Growth Fund
  Natixis
Oakmark Fund
       
Natixis
Oakmark
International
Fund
  Natixis
U.S. Equity
Opportunities
Fund
 

ASSETS

 

Investments at cost

  $24,223,812  $259,624,280   $502,884,040  $644,352,734 

Net unrealized appreciation (depreciation)

   (1,058,009  110,108,748    28,586,635   409,033,231 
  

 

 

  

 

 

   

 

 

  

 

 

 

Investments at value

   23,165,803   369,733,028    531,470,675   1,053,385,965 

Cash

      37,527       86,407 

Foreign currency at value (identified cost $27,044, $0, $11,947 and $0, respectively)

   27,091       11,949    

Receivable for Fund shares sold

   474   3,447,221    1,084,997   667,060 

Receivable for securities sold

   128,184       33,225   44,608,842 

Dividends receivable

   33,310   286,612    70,767   299,987 

Tax reclaims receivable

   25,754   36,194    4,349,440   575,999 

Prepaid expenses (Note 9)

   1   19    33   63 
  

 

 

  

 

 

   

 

 

  

 

 

 

TOTAL ASSETS

   23,380,617   373,540,601    537,021,086   1,099,624,323 
  

 

 

  

 

 

   

 

 

  

 

 

 

LIABILITIES

 

Payable for securities purchased

          142,505   22,242,085 

Payable for Fund shares redeemed

      347,103    173,558   125,022 

Unrealized depreciation on forward foreign currency contracts (Note 2)

          94,327    

Foreign taxes payable (Note 2)

          204,198    

Management fees payable (Note 6)

   1,953   208,207    246,640   677,734 

Deferred Trustees’ fees (Note 6)

   3,065   742,483    141,600   587,074 

Administrative fees payable (Note 6)

   838   13,081    19,054   38,359 

Payable to distributor (Note 6d)

   16   1,267    11,131   3,103 

Audit and tax services fees payable

   42,287   41,106    42,412   42,112 

Other accounts payable and accrued expenses

   6,767   20,929    76,713   78,038 
  

 

 

  

 

 

   

 

 

  

 

 

 

TOTAL LIABILITIES

   54,926   1,374,176    1,152,138   23,793,527 
  

 

 

  

 

 

   

 

 

  

 

 

 

NET ASSETS

  $23,325,691  $372,166,425   $535,868,948  $1,075,830,796 
  

 

 

  

 

 

   

 

 

  

 

 

 

NET ASSETS CONSIST OF:

 

Paid-in capital

  $24,915,060  $264,080,538   $618,395,713  $631,467,096 

Accumulated earnings (loss)

   (1,589,369  108,085,887    (82,526,765  444,363,700 
  

 

 

  

 

 

   

 

 

  

 

 

 

NET ASSETS

  $23,325,691  $372,166,425   $535,868,948  $1,075,830,796 
  

 

 

  

 

 

   

 

 

  

 

 

 

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE:

 

Class A shares:

 

Net assets

  $112,615  $222,434,752   $152,899,962  $733,423,258 
  

 

 

  

 

 

   

 

 

  

 

 

 

Shares of beneficial interest

   11,764   7,659,392    10,095,662   17,007,787 
  

 

 

  

 

 

   

 

 

  

 

 

 

Net asset value and redemption price per share

  $9.57  $29.04   $15.15  $43.12 
  

 

 

  

 

 

   

 

 

  

 

 

 

Offering price per share (100/94.25 of net asset value) (Note 1)

  $10.15  $30.81   $16.07  $45.75 
  

 

 

  

 

 

   

 

 

  

 

 

 

Class C shares: (redemption price per share is equal to net asset value less any applicable contingent deferred sales charge) (Note 1)

      

Net assets

  $38,321  $50,042,066   $69,334,988  $57,491,976 
  

 

 

  

 

 

   

 

 

  

 

 

 

Shares of beneficial interest

   4,029   2,129,686    4,665,960   2,635,266 
  

 

 

  

 

 

   

 

 

  

 

 

 

Net asset value and offering price per share

  $9.51  $23.50   $14.86  $21.82 
  

 

 

  

 

 

   

 

 

  

 

 

 

Class N shares:

 

Net assets

  $22,952,510  $681,854   $703,657  $177,216 
  

 

 

  

 

 

   

 

 

  

 

 

 

Shares of beneficial interest

   2,395,482   21,906    46,647   3,273 
  

 

 

  

 

 

   

 

 

  

 

 

 

Net asset value, offering and redemption price per share

  $9.58  $31.13   $15.08  $54.14 
  

 

 

  

 

 

   

 

 

  

 

 

 

Class Y shares:

 

Net assets

  $222,245  $99,007,753   $312,930,341  $284,738,346 
  

 

 

  

 

 

   

 

 

  

 

 

 

Shares of beneficial interest

   23,197   3,189,957    20,766,145   5,273,688 
  

 

 

  

 

 

   

 

 

  

 

 

 

Net asset value, offering and redemption price per share

  $9.58  $31.04   $15.07  $53.99 
  

 

 

  

 

 

   

 

 

  

 

 

 

 

See accompanying notes to financial statements.

 

|  44


Statements of Assets and Liabilities (continued)

 

December 31, 2021

 

   Vaughan
Nelson Mid
Cap Fund
   Vaughan
Nelson
Small Cap
Value Fund
 

ASSETS

 

Investments at cost

  $312,676,580   $125,757,706 

Net unrealized appreciation

   55,063,499    24,571,274 
  

 

 

   

 

 

 

Investments at value

   367,740,079    150,328,980 

Receivable for Fund shares sold

   54,565    74,457 

Dividends receivable

   308,517    95,374 

Prepaid expenses (Note 9)

   19    8 
  

 

 

   

 

 

 

TOTAL ASSETS

   368,103,180    150,498,819 
  

 

 

   

 

 

 

LIABILITIES

 

Payable for securities purchased

   165    99,568 

Payable for Fund shares redeemed

   37,531    83,109 

Management fees payable (Note 6)

   227,831    93,313 

Deferred Trustees’ fees (Note 6)

   217,464    256,541 

Administrative fees payable (Note 6)

   12,941    5,216 

Payable to distributor (Note 6d)

   2,274    705 

Audit and tax services fees payable

   41,978    41,110 

Other accounts payable and accrued expenses

   24,343    23,243 
  

 

 

   

 

 

 

TOTAL LIABILITIES

   564,527    602,805 
  

 

 

   

 

 

 

NET ASSETS

  $367,538,653   $149,896,014 
  

 

 

   

 

 

 

NET ASSETS CONSIST OF:

 

Paid-in capital

  $308,797,941   $122,850,311 

Accumulated earnings

   58,740,712    27,045,703 
  

 

 

   

 

 

 

NET ASSETS

  $367,538,653   $149,896,014 
  

 

 

   

 

 

 

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE:

 

Class A shares:

 

Net assets

  $37,849,294   $81,492,958 
  

 

 

   

 

 

 

Shares of beneficial interest

   1,667,174    4,559,072 
  

 

 

   

 

 

 

Net asset value and redemption price per share

  $22.70   $17.87 
  

 

 

   

 

 

 

Offering price per share (100/94.25 of net asset value) (Note 1)

  $24.08   $18.96 
  

 

 

   

 

 

 

Class C shares: (redemption price per share is equal to net asset value less any applicable contingent deferred sales charge) (Note 1)

    

Net assets

  $11,435,679   $966,228 
  

 

 

   

 

 

 

Shares of beneficial interest

   555,631    139,326 
  

 

 

   

 

 

 

Net asset value and offering price per share

  $20.58   $6.94 
  

 

 

   

 

 

 

Class N shares:

 

Net assets

  $91,415,740   $1,382,591 
  

 

 

   

 

 

 

Shares of beneficial interest

   3,966,719    72,911 
  

 

 

   

 

 

 

Net asset value, offering and redemption price per share

  $23.05   $18.96 
  

 

 

   

 

 

 

Class Y shares:

 

Net assets

  $226,837,940   $66,054,237 
  

 

 

   

 

 

 

Shares of beneficial interest

   9,825,086    3,486,289 
  

 

 

   

 

 

 

Net asset value, offering and redemption price per share

  $23.09   $18.95 
  

 

 

   

 

 

 

 

See accompanying notes to financial statements.

 

45  |


Statements of Operations

 

For the Year Ended December 31, 2021

 

   International
Growth Fund
  Natixis
Oakmark
Fund
  Natixis
Oakmark
International
Fund
  Natixis
U.S. Equity
Opportunities
Fund
 

INVESTMENT INCOME

 

Dividends

  $318,789  $4,244,879  $11,560,245  $9,393,885 

Non-cash dividends (Note 2b)

         3,482,440(a)    

Interest

         18,155    

Tax reclaims (Note 2e)

         1,916,315   94,347 

Less net foreign taxes withheld

   (32,401     (1,409,101  (133,479
  

 

 

  

 

 

  

 

 

  

 

 

 
   286,388   4,244,879   15,568,054   9,354,753 
  

 

 

  

 

 

  

 

 

  

 

 

 

Expenses

 

Management fees (Note 6)

   181,065   2,106,551   4,216,094   7,835,017 

Service and distribution fees (Note 6)

   509   939,503   1,226,414   2,410,762 

Administrative fees (Note 6)

   10,285   131,502   231,005   446,102 

Trustees’ fees and expenses (Note 6)

   13,379   104,351   44,753   111,433 

Transfer agent fees and expenses (Notes 6 and 8)

   3,319   214,269   900,969   599,597 

Audit and tax services fees

   42,263   41,099   42,321   42,111 

Custodian fees and expenses (Note 7)

   16,515   9,489   196,517   44,883 

Legal fees (Note 9)

   788   9,817   18,472   35,355 

Registration fees

   73,966   88,389   88,575   84,720 

Shareholder reporting expenses

   11,969   21,325   104,354   53,586 

Tax reclaim professional fees (Note 2e)

         39,128   2,711 

Miscellaneous expenses (Note 7)

   31,502   33,689   51,161   53,058 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total expenses

   385,560   3,699,984   7,159,763   11,719,335 

Less waiver and/or expense reimbursement (Notes 6 and 7)

   (167,628  (88,369  (919,112  (1,048
  

 

 

  

 

 

  

 

 

  

 

 

 

Net expenses

   217,932   3,611,615   6,240,651   11,718,287 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net investment income (loss)

   68,456   633,264   9,327,403   (2,363,534
  

 

 

  

 

 

  

 

 

  

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS

     

Net realized gain (loss) on:

 

Investments

   (202,920  28,561,069   36,749,218   116,863,738 

Forward foreign currency contracts (Note 2d)

         386,242    

Foreign currency transactions (Note 2c)

   (693     (53,631   

Net change in unrealized appreciation (depreciation) on:

 

Investments

   (1,246,544  53,375,247   (4,068,384  97,063,562 

Forward foreign currency contracts (Note 2d)

         (85,208   

Foreign currency translations (Note 2c)

   177      (323,842  (1,590
  

 

 

  

 

 

  

 

 

  

 

 

 

Net realized and unrealized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions

   (1,449,980  81,936,316   32,604,395   213,925,710 
  

 

 

  

 

 

  

 

 

  

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

  $(1,381,524 $82,569,580  $41,931,798  $211,562,176 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

(a)

Includes a non-recurring stock dividend of $2,738,911.

 

See accompanying notes to financial statements.

 

|  46


Statements of Operations (continued)

 

For the Year Ended December 31, 2021

 

   Vaughan
Nelson Mid
Cap Fund
  Vaughan
Nelson
Small Cap
Value Fund
 

INVESTMENT INCOME

 

Dividends

  $4,588,817  $1,422,401 

Non-cash dividends (Note 2b)

      363,704(a) 

Less net foreign taxes withheld

      (5,549
  

 

 

  

 

 

 
   4,588,817   1,780,556 
  

 

 

  

 

 

 

Expenses

   

Management fees (Note 6)

   2,560,977   1,202,924 

Service and distribution fees (Note 6)

   220,531   197,232 

Administrative fees (Note 6)

   141,096   58,651 

Trustees’ fees and expenses (Note 6)

   46,745   46,227 

Transfer agent fees and expenses (Notes 6 and 8)

   258,005   128,931 

Audit and tax services fees

   41,875   41,096 

Custodian fees and expenses (Note 7)

   13,570   10,529 

Legal fees (Note 9)

   10,745   4,563 

Registration fees

   70,168   91,539 

Shareholder reporting expenses

   31,071   16,310 

Miscellaneous expenses (Note 7)

   35,550   30,208 
  

 

 

  

 

 

 

Total expenses

   3,430,333   1,828,210 

Less waiver and/or expense reimbursement (Notes 6 and 7)

   (172,598  (222,089
  

 

 

  

 

 

 

Net expenses

   3,257,735   1,606,121 
  

 

 

  

 

 

 

Net investment income

   1,331,082   174,435 
  

 

 

  

 

 

 

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS

 

Net realized gain on:

   

Investments

   56,422,377   33,988,295 

Net change in unrealized appreciation (depreciation) on:

   

Investments

   4,168,218   828,120 
  

 

 

  

 

 

 

Net realized and unrealized gain on investments

   60,590,595   34,816,415 
  

 

 

  

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $61,921,677  $34,990,850 
  

 

 

  

 

 

 

 

(a)

Represents a non-recurring stock dividend.

 

See accompanying notes to financial statements.

 

47  |


Statements of Changes in Net Assets

 

 

   International Growth Fund  Natixis Oakmark Fund 
   Year Ended
December 31,
2021
  Period Ended
December 31,
2020(a)
  Year Ended
December 31,
2021
  Year Ended
December 31,
2020
 

FROM OPERATIONS:

 

Net investment income

  $68,456  $9,420  $633,264  $1,003,906 

Net realized gain (loss) on investments and foreign currency transactions

   (203,613  8,123   28,561,069   14,582,175 

Net change in unrealized appreciation (depreciation) on investments and foreign currency translations

   (1,246,367  188,539   53,375,247   5,121,754 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

   (1,381,524  206,082   82,569,580   20,707,835 
  

 

 

  

 

 

  

 

 

  

 

 

 

FROM DISTRIBUTIONS TO SHAREHOLDERS:

 

Class A

   (1,712  (1  (14,668,177  (14,572,150

Class C

   (540  (b)   (3,860,638  (3,470,297

Class N

   (404,221  (12,450  (42,243  (30,687

Class Y

   (3,739  (9  (6,180,207  (3,143,507
  

 

 

  

 

 

  

 

 

  

 

 

 

Total distributions

   (410,212  (12,460  (24,751,265  (21,216,641
  

 

 

  

 

 

  

 

 

  

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS (NOTE 12)

   9,897,595   15,026,210   69,746,167   (38,326,966
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets

   8,105,859   15,219,832   127,564,482   (38,835,772

NET ASSETS

 

Beginning of the year

   15,219,832      244,601,943   283,437,715 
  

 

 

  

 

 

  

 

 

  

 

 

 

End of the year

  $23,325,691  $15,219,832  $372,166,425  $244,601,943 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

(a)

From commencement of operations on December 15, 2020 through December 31, 2020.

(b)

Amount rounds to less than $1.00.

 

See accompanying notes to financial statements.

 

|  48


Statements of Changes in Net Assets (continued)

 

 

   Natixis Oakmark International Fund  Natixis U.S. Equity Opportunities Fund 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2021
  Year Ended
December 31,
2020
 

FROM OPERATIONS:

 

Net investment income (loss)

  $9,327,403  $245,748  $(2,363,534 $(1,093,083

Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions

   37,081,829   (97,769,005  116,863,738   130,277,857 

Net change in unrealized appreciation (depreciation) on investments, forward foreign currency contracts and foreign currency translations

   (4,477,434  79,782,696   97,061,972   34,019,289 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

   41,931,798   (17,740,561  211,562,176   163,204,063 
  

 

 

  

 

 

  

 

 

  

 

 

 

FROM DISTRIBUTIONS TO SHAREHOLDERS:

 

Class A

   (2,330,358  (310,049  (76,697,366  (78,012,779

Class C

   (418,451     (11,757,176  (13,186,942

Class N

   (12,581  (1,852  (15,616  (21,295

Class Y

   (5,540,267  (1,281,600  (23,677,132  (24,792,696
  

 

 

  

 

 

  

 

 

  

 

 

 

Total distributions

   (8,301,657  (1,593,501  (112,147,290  (116,013,712
  

 

 

  

 

 

  

 

 

  

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS (NOTE 12)

   (1,920,547  (74,342,754  20,061,764   (70,200,600
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets

   31,709,594   (93,676,816  119,476,650   (23,010,249

NET ASSETS

 

Beginning of the year

   504,159,354   597,836,170   956,354,146   979,364,395 
  

 

 

  

 

 

  

 

 

  

 

 

 

End of the year

  $535,868,948  $504,159,354  $1,075,830,796  $956,354,146 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

See accompanying notes to financial statements.

 

49  |


Statements of Changes in Net Assets (continued)

 

   Vaughan Nelson Mid Cap Fund  Vaughan Nelson Small Cap Value Fund 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2021
  Year Ended
December 31,
2020
 

FROM OPERATIONS:

 

Net investment income

  $1,331,082  $1,455,275  $174,435  $101,981 

Net realized gain (loss) on investments

   56,422,377   27,799,575   33,988,295   (3,132,416

Net change in unrealized appreciation (depreciation) on investments

   4,168,218   (16,338,813  828,120   10,854,499 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase in net assets resulting from operations

   61,921,677   12,916,037   34,990,850   7,824,064 
  

 

 

  

 

 

  

 

 

  

 

 

 

FROM DISTRIBUTIONS TO SHAREHOLDERS:

 

Class A

   (5,329,869  (3,468,834  (14,352,433  (376,748

Class C

   (1,799,416  (1,857,110  (339,165  (14,118

Class N

   (12,164,843  (2,038,286  (233,321  (179

Class Y

   (33,148,269  (26,620,537  (11,433,578  (344,758
  

 

 

  

 

 

  

 

 

  

 

 

 

Total distributions

   (52,442,397  (33,984,767  (26,358,497  (735,803
  

 

 

  

 

 

  

 

 

  

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS (NOTE 12)

   68,004,051   (61,208,438  29,370,496   (8,673,052
  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets

   77,483,331   (82,277,168  38,002,849   (1,584,791

NET ASSETS

 

Beginning of the year

   290,055,322   372,332,490   111,893,165   113,477,956 
  

 

 

  

 

 

  

 

 

  

 

 

 

End of the year

  $367,538,653  $290,055,322  $149,896,014  $111,893,165 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

See accompanying notes to financial statements.

 

|  50


Financial Highlights

 

For a share outstanding throughout each period.

 

   International Growth
Fund—Class A
 
   Year Ended
December 31,
2021
   Period Ended
December 31,
2020*
 

Net asset value, beginning of the period

  $10.13   $10.00 
  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   (0.01   0.01 

Net realized and unrealized gain (loss)

   (0.41   0.13 
  

 

 

   

 

 

 

Total from Investment Operations

   (0.42   0.14 
  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.01   (0.01

Net realized capital gains

   (0.13    
  

 

 

   

 

 

 

Total Distributions

   (0.14   (0.01
  

 

 

   

 

 

 

Net asset value, end of the period

  $9.57   $10.13 
  

 

 

   

 

 

 

Total return(b)(c)

   (4.07)%    1.37%(d) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $113   $1 

Net expenses(e)

   1.20   1.20%(f) 

Gross expenses

   2.71   13.05%(f) 

Net investment income (loss)

   (0.07)%    1.28%(f) 

Portfolio turnover rate

   9   1

 

 

*

From commencement of operations on December 15, 2020 through December 31, 2020.

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

A sales charge for Class A shares is not reflected in total return calculations.

(c)

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.

 

See accompanying notes to financial statements.

 

51  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   International Growth
Fund—Class C
 
   Year Ended
December 31,
2021
  Period Ended
December 31,
2020*
 

Net asset value, beginning of the period

  $10.13  $10.00 
  

 

 

  

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   (0.09  0.00(b) 

Net realized and unrealized gain (loss)

   (0.40  0.13 
  

 

 

  

 

 

 

Total from Investment Operations

   (0.49  0.13 
  

 

 

  

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.00)(b)   (0.00)(b) 

Net realized capital gains

   (0.13   
  

 

 

  

 

 

 

Total Distributions

   (0.13  (0.00
  

 

 

  

 

 

 

Net asset value, end of the period

  $9.51  $10.13 
  

 

 

  

 

 

 

Total return(c)(d)

   (4.79)%   1.33%(e) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $38  $1 

Net expenses(f)

   1.95  1.95%(g) 

Gross expenses

   3.46  13.78%(g) 

Net investment income (loss)

   (0.90)%   0.55%(g) 

Portfolio turnover rate

   9  1

 

*

From commencement of operations on December 15, 2020 through December 31, 2020.

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Amount rounds to less than $0.01 per share.

(c)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(d)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(e)

Periods less than one year are not annualized.

(f)

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.

(g)

Computed on an annualized basis for periods less than one year.

 

See accompanying notes to financial statements.

 

|  52


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   International Growth
Fund—Class N
 
   Year Ended
December 31,
2021
   Period Ended
December 31,
2020*
 

Net asset value, beginning of the period

  $10.13   $10.00 
  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.03    0.01 

Net realized and unrealized gain (loss)

   (0.42   0.13 
  

 

 

   

 

 

 

Total from Investment Operations

   (0.39   0.14 
  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.03   (0.01

Net realized capital gains

   (0.13    
  

 

 

   

 

 

 

Total Distributions

   (0.16   (0.01
  

 

 

   

 

 

 

Net asset value, end of the period

  $9.58   $10.13 
  

 

 

   

 

 

 

Total return(b)

   (3.77)%    1.38%(c) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $22,953   $15,206 

Net expenses(d)

   0.90   0.90%(e) 

Gross expenses

   1.58   6.48%(e) 

Net investment income

   0.29   1.43%(e) 

Portfolio turnover rate

   9   1

 

*

From commencement of operations on December 15, 2020 through December 31, 2020.

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

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)

Computed on an annualized basis for periods less than one year.

 

See accompanying notes to financial statements.

 

53  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   International Growth
Fund—Class Y
 
   Year Ended
December 31,
2021
   Period Ended
December 31,
2020*
 

Net asset value, beginning of the period

  $10.13   $10.00 
  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.02    0.01 

Net realized and unrealized gain (loss)

   (0.41   0.13 
  

 

 

   

 

 

 

Total from Investment Operations

   (0.39   0.14 
  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.03   (0.01

Net realized capital gains

   (0.13    
  

 

 

   

 

 

 

Total Distributions

   (0.16   (0.01
  

 

 

   

 

 

 

Net asset value, end of the period

  $9.58   $10.13 
  

 

 

   

 

 

 

Total return(b)

   (3.81)%    1.38%(c) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $222   $12 

Net expenses(d)

   0.95   0.95%(e) 

Gross expenses

   2.46   12.58%(e) 

Net investment income

   0.19   1.63%(e) 

Portfolio turnover rate

   9   1

 

*

From commencement of operations on December 15, 2020 through December 31, 2020.

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

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)

Computed on an annualized basis for periods less than one year.

 

See accompanying notes to financial statements.

 

|  54


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark Fund—Class A 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $23.20  $22.45  $19.44  $24.72   $21.37 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.07   0.11(b)   0.18(c)   0.10    0.11 

Net realized and unrealized gain (loss)

   7.81   2.78   4.93   (3.28   4.28 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   7.88   2.89   5.11   (3.18   4.39 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.05  (0.12  (0.21  (0.08   (0.10

Net realized capital gains

   (1.99  (2.02  (1.89  (2.02   (0.94
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (2.04  (2.14  (2.10  (2.10   (1.04
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $29.04  $23.20  $22.45  $19.44   $24.72 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(d)

   33.97%(e)   13.01%(b)   26.77%(c)   (13.01)%    20.75

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $222,435  $170,702  $181,417  $164,748   $203,792 

Net expenses

   1.12%(f)(g)   1.20%(h)   1.17  1.13   1.18

Gross expenses

   1.14  1.20%(h)   1.17  1.13   1.18

Net investment income

   0.25  0.53%(b)   0.85%(c)   0.41   0.48

Portfolio turnover rate

   23  22  15  39   16

 

(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 $0.05, total return would have been 12.72% and the ratio of net investment income to average net assets would have been 0.27%.

(c)

Includes a non-recurring dividend. Without this dividend, net investment income per share would have been $0.13, total return would have been 26.50% and the ratio of net investment income to average net assets would have been 0.62%.

(d)

A sales charge for Class A shares is not reflected in total return calculations.

(e)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(f)

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.

(g)

Effective July 1, 2021, the expense limit decreased from 1.30% to 1.05%.

(h)

Includes refund of prior year service fee of 0.01%.

 

See accompanying notes to financial statements.

 

55  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark Fund—Class C 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $19.17  $18.92  $16.66  $21.58   $18.83 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   (0.12  (0.04)(b)   0.02(c)   (0.07   (0.05

Net realized and unrealized gain (loss)

   6.44   2.31   4.20   (2.83   3.74 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   6.32   2.27   4.22   (2.90   3.69 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.00)(d)      (0.07      (0.00)(d) 

Net realized capital gains

   (1.99  (2.02  (1.89  (2.02   (0.94
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (1.99  (2.02  (1.96  (2.02   (0.94
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $23.50  $19.17  $18.92  $16.66   $21.58 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(e)

   32.99%(f)   12.15%(b)   25.82%(c)   (13.63)%    19.85

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $50,042  $35,940  $54,384  $53,606   $62,272 

Net expenses

   1.87%(g)(h)   1.95  1.92  1.88   1.93

Gross expenses

   1.89  1.95  1.92  1.88   1.93

Net investment income (loss)

   (0.49)%   (0.23)%(b)   0.12%(c)   (0.33)%    (0.27)% 

Portfolio turnover rate

   23  22  15  39   16

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend. Without this dividend, net investment loss per share would have been $(0.08), total return would have been 11.85% and the ratio of net investment loss to average net assets would have been (0.46%).

(c)

Includes a non-recurring dividend. Without this dividend, net investment loss per share would have been $(0.02), total return would have been 25.50% and the ratio of net investment loss to average net assets would have been (0.12)%.

(d)

Amount rounds to less than $0.01 per share.

(e)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(f)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(g)

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.

(h)

Effective July 1, 2021, the expense limit decreased from 2.05% to 1.80%.

 

See accompanying notes to financial statements.

 

|  56


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark Fund—Class N 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Period Ended
December 31,
2017*
 

Net asset value, beginning of the period

  $24.72  $23.78  $20.49  $25.91   $23.13 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.23   0.18(b)   0.22(c)   0.22    0.14 

Net realized and unrealized gain (loss)

   8.31   2.98   5.25   (3.45   3.44 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   8.54   3.16   5.47   (3.23   3.58 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.14  (0.20  (0.29  (0.17   (0.17

Net realized capital gains

   (1.99  (2.02  (1.89  (2.02   (0.63
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (2.13  (2.22  (2.18  (2.19   (0.80
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $31.13  $24.72  $23.78  $20.49   $25.91 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(d)

   34.54  13.41%(b)   27.16%(c)   (12.60)%    15.46%(e) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $682  $364  $801  $10   $1 

Net expenses(f)

   0.80%(g)   0.86  0.83  0.75   0.75%(h) 

Gross expenses

   1.55  1.05  1.25  3.79   13.79%(h) 

Net investment income

   0.79  0.85%(b)   0.93%(c)   0.88   0.84%(h) 

Portfolio turnover rate

   23  22  15  39   16%(i) 

 

*

From commencement of Class operations on May 1, 2017 through December 31, 2017.

(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 $0.14, total return would have been 13.13% and the ratio of net investment income to average net assets would have been 0.67%.

(c)

Includes a non-recurring dividend. Without this dividend, net investment income per share would have been $0.22, total return would have been 26.90% and the ratio of net investment income to average net assets would have been 0.92%.

(d)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(e)

Periods less than one year are not annualized.

(f)

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.

(g)

Effective July 1, 2021, the expense limit decreased from 1.00% to 0.75%.

(h)

Computed on an annualized basis for periods less than one year.

(i)

Represents the Fund’s portfolio turnover rate for the year ended December 31, 2017.

 

See accompanying notes to financial statements.

 

57  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark Fund—Class Y 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $24.68  $23.75  $20.46  $25.90   $22.34 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.17   0.17(b)   0.27(c)   0.17    0.17 

Net realized and unrealized gain (loss)

   8.31   2.95   5.17   (3.44   4.48 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   8.48   3.12   5.44   (3.27   4.65 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.13  (0.17  (0.26  (0.15   (0.15

Net realized capital gains

   (1.99  (2.02  (1.89  (2.02   (0.94
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (2.12  (2.19  (2.15  (2.17   (1.09
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $31.04  $24.68  $23.75  $20.46   $25.90 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return

   34.35%(d)   13.28%(b)   27.06%(c)(d)   (12.76)%    21.05

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $99,008  $37,595  $46,836  $53,829   $49,955 

Net expenses

   0.86%(e)(f)   0.95  0.91%(e)   0.88   0.93

Gross expenses

   0.89  0.95  0.92  0.88   0.93

Net investment income

   0.56  0.79%(b)   1.16%(c)   0.68   0.71

Portfolio turnover rate

   23  22  15  39   16

 

(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 $0.12, total return would have been 13.00% and the ratio of net investment income to average net assets would have been 0.55%.

(c)

Includes a non-recurring dividend. Without this dividend, net investment income per share would have been $0.20, total return would have been 26.80% and the ratio of net investment income to average net assets would have been 0.90%.

(d)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(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 1.05% to 0.80%.

 

See accompanying notes to financial statements.

 

|  58


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark International Fund—Class A 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $14.15  $13.63  $11.29  $15.58   $12.15 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   0.27(b)   (0.00)(c)   0.37(d)   0.25    0.18 

Net realized and unrealized gain (loss)

   0.96   0.55(e)   2.38   (4.02   3.41 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   1.23   0.55   2.75   (3.77   3.59 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.23  (0.03  (0.41  (0.29   (0.16

Net realized capital gains

            (0.23    
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (0.23  (0.03  (0.41  (0.52   (0.16
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $15.15  $14.15  $13.63  $11.29   $15.58 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(f)

   8.73%(b)(g)   4.06%(g)   24.35%(d)   (24.15)%    29.56

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $152,900  $131,630  $172,906  $257,551   $603,988 

Net expenses

   1.17%(h)(i)   1.29%(h)(j)   1.29  1.31   1.32

Gross expenses

   1.34  1.36  1.29  1.31   1.32

Net investment income (loss)

   1.73%(b)   (0.03)%   2.91%(d)   1.72   1.28

Portfolio turnover rate

   37  63  28  50   40

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend and tax reclaims. Without these, net investment income per share would have been $0.13, total return would have been 7.74% and the ratio of net investment income to average net assets would have been 0.84%.

(c)

Amount rounds to less than $0.01 per share.

(d)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.29, total return would have been 23.55% and the ratio of net investment income to average net assets would have been 2.26%.

(e)

The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund.

(f)

A sales charge for Class A shares is not reflected in total return calculations.

(g)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(h)

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.

(i)

Effective July 1, 2021, the expense limit decreased from 1.20% to 1.15%.

(j)

Effective July 1, 2020, the expense limit decreased from 1.37% to 1.20%.

 

See accompanying notes to financial statements.

 

59  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark International Fund—Class C 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $13.85  $13.41  $11.11  $15.30   $11.96 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   0.13(b)   (0.08  0.26(c)   0.13    0.06 

Net realized and unrealized gain (loss)

   0.97   0.52(d)   2.34   (3.92   3.35 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   1.10   0.44   2.60   (3.79   3.41 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.09     (0.30  (0.17   (0.07

Net realized capital gains

            (0.23    
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (0.09     (0.30  (0.40   (0.07
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $14.86  $13.85  $13.41  $11.11   $15.30 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(e)

   7.92%(b)(f)   3.28%(f)   23.44%(c)   (24.74)%    28.55

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $69,335  $96,772  $179,533  $212,618   $363,018 

Net expenses

   1.93%(g)(h)   2.05%(g)(i)   2.04  2.07   2.07

Gross expenses

   2.09  2.11  2.04  2.07   2.07

Net investment income (loss)

   0.85%(b)   (0.76)%   2.09%(c)   0.94   0.42

Portfolio turnover rate

   37  63  28  50   40

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend and tax reclaims. Without these, net investment income per share would have been $0.02, total return would have been 6.98% and the ratio of net investment income to average net assets would have been 0.13%.

(c)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.18, total return would have been 22.63% and the ratio of net investment income to average net assets would have been 1.43%.

(d)

The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund.

(e)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(f)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(g)

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.

(h)

Effective July 1, 2021, the expense limit decreased from 1.95% to 1.90%.

(i)

Effective July 1, 2020, the expense limit decreased from 2.12% to 1.95%.

 

See accompanying notes to financial statements.

 

|  60


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark International Fund—Class N 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Period Ended
December 31,
2017*
 

Net asset value, beginning of the period

  $14.09  $13.56  $11.25  $15.58   $13.98 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.38(b)   0.04   0.33(c)   0.28    0.15 

Net realized and unrealized gain (loss)

   0.89   0.56(d)   2.45   (4.02   1.66 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   1.27   0.60   2.78   (3.74   1.81 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.28  (0.07  (0.47  (0.36   (0.21

Net realized capital gains

            (0.23    
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (0.28  (0.07  (0.47  (0.59   (0.21
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $15.08  $14.09  $13.56  $11.25   $15.58 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(e)

   9.01%(b)   4.44  24.75%(c)   (23.94)%    12.96%(f) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $704  $290  $811  $758   $1 

Net expenses(g)

   0.87%(h)   0.92%(i)   0.94  0.99   0.92%(j) 

Gross expenses

   1.25  1.17  1.08  1.02   25.21%(j) 

Net investment income

   2.49%(b)   0.37  2.56%(c)   2.04   1.54%(j) 

Portfolio turnover rate

   37  63  28  50   40%(k) 

 

*

From commencement of Class operations on May 1, 2017 through December 31, 2017.

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend and tax reclaims. Without these, net investment income per share would have been $0.11, total return would have been 8.09% and the ratio of net investment income to average net assets would have been 0.70%.

(c)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.27, total return would have been 23.94% and the ratio of net investment income to average net assets would have been 2.15%.

(d)

The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund.

(e)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(f)

Periods less than one year are not annualized.

(g)

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.

(h)

Effective July 1, 2021, the expense limit decreased from 0.90% to 0.85%.

(i)

Effective July 1, 2020, the expense limit decreased from 1.07% to 0.90%.

(j)

Computed on an annualized basis for periods less than one year.

(k)

Represents the Fund’s portfolio turnover rate for the year ended December 31, 2017.

 

See accompanying notes to financial statements.

 

61  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis Oakmark International Fund—Class Y 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Period Ended
December 31,
2017*
 

Net asset value, beginning of the period

  $14.08  $13.56  $11.25  $15.56   $13.98 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.30(b)   0.04   0.37(c)   0.26    0.00(d) 

Net realized and unrealized gain (loss)

   0.96   0.55(e)   2.40   (3.99   1.79 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   1.26   0.59   2.77   (3.73   1.79 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.27  (0.07  (0.46  (0.35   (0.21

Net realized capital gains

            (0.23    
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (0.27  (0.07  (0.46  (0.58   (0.21
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $15.07  $14.08  $13.56  $11.25   $15.56 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return

   8.97%(b)(f)   4.32%(f)   24.64%(c)   (23.93)%    12.79%(g) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $312,930  $275,468  $244,586  $215,123   $172,978 

Net expenses

   0.92%(h)(i)   1.03%(h)(j)   1.04  1.07   1.07%(k) 

Gross expenses

   1.09  1.11  1.04  1.07   1.07%(k) 

Net investment income

   1.96%(b)   0.41  2.91%(c)   1.85   0.03%(k) 

Portfolio turnover rate

   37  63  28  50   40%(l) 

 

*

From commencement of Class operations on May 1, 2017 through December 31, 2017.

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend and tax reclaims. Without these, net investment income per share would have been $0.17, total return would have been 8.04% and the ratio of net investment income to average net assets would have been 1.07%.

(c)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.29, total return would have been 23.84% and the ratio of net investment income to average net assets would have been 2.29%.

(d)

Amount rounds to less than $0.01 per share.

(e)

The amount shown for a share outstanding does not correspond with the aggregate realized and unrealized gain (loss) on investments for the period due to the timing of sales and redemptions of fund shares in relation to fluctuating market values of investments of the Fund.

(f)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(g)

Periods less than one year are not annualized.

(h)

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.

(i)

Effective July 1, 2021, the expense limit decreased from 0.95% to 0.90%.

(j)

Effective July 1, 2020, the expense limit decreased from 1.12% to 0.95%.

(k)

Computed on an annualized basis for periods less than one year.

(l)

Represents the Fund’s portfolio turnover rate for the year ended December 31, 2017.

 

See accompanying notes to financial statements.

 

|  62


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis U.S. Equity Opportunities Fund—Class A 
   Year Ended
December 31,
2021
   Year Ended
December 31,
2020
   Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $39.04   $36.53   $31.00  $36.90   $30.27 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   (0.11   (0.05   0.15(b)   0.08    0.06 

Net realized and unrealized gain (loss)

   8.99    7.66    9.34   (2.51   7.88 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   8.88    7.61    9.49   (2.43   7.94 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

           (0.17  (0.05   (0.06

Net realized capital gains

   (4.80   (5.10   (3.79  (3.42   (1.25
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total Distributions

   (4.80   (5.10   (3.96  (3.47   (1.31
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $43.12   $39.04   $36.53  $31.00   $36.90 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total return(c)

   23.14   22.09   31.03%(b)   (6.48)%    26.28

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $733,423   $649,754   $616,922  $523,665   $604,330 

Net expenses

   1.14   1.17   1.17  1.16   1.21%(d) 

Gross expenses

   1.14   1.17   1.17  1.16   1.21

Net investment income (loss)

   (0.25)%    (0.14)%    0.42%(b)   0.20   0.16

Portfolio turnover rate

   18   26   12  23   17

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.09, total return would have been 30.87% and the ratio of net investment income to average net assets would have been 0.26%.

(c)

A sales charge for Class A shares is not reflected in total return calculations.

(d)

Effective July 1, 2017, the expense limit decreased from 1.25% to 1.20%.

 

See accompanying notes to financial statements.

 

63  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis U.S. Equity Opportunities Fund—Class C 
   Year Ended
December 31,
2021
   Year Ended
December 31,
2020
   Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $21.89   $22.65   $20.42  $25.73   $21.54 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment loss(a)

   (0.24   (0.19   (0.07)(b)   (0.14   (0.14

Net realized and unrealized gain (loss)

   4.97    4.53    6.10   (1.75   5.58 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   4.73    4.34    6.03   (1.89   5.44 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

           (0.01      (0.00)(c) 

Net realized capital gains

   (4.80   (5.10   (3.79  (3.42   (1.25
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total Distributions

   (4.80   (5.10   (3.80  (3.42   (1.25
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $21.82   $21.89   $22.65  $20.42   $25.73 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total return(d)

   22.27   21.15   30.06%(b)   (7.18)%    25.35

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $57,492   $63,126   $77,924  $78,783   $112,615 

Net expenses

   1.89   1.92   1.92  1.91   1.96%(e) 

Gross expenses

   1.89   1.92   1.92  1.91   1.96

Net investment loss

   (0.99)%    (0.87)%    (0.31)%(b)   (0.54)%    (0.59)% 

Portfolio turnover rate

   18   26   12  23   17

 

(a)

Per share net investment loss has been calculated using the average shares outstanding during the period.

(b)

Includes non-recurring dividends. Without this dividend, net investment loss per share would have been $(0.11), total return would have been 29.85% and the ratio of net investment loss to average net assets would have been (0.48)%.

(c)

Amount rounds to less than $0.01 per share.

(d)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(e)

Effective July 1, 2017, the expense limit decreased from 2.00% to 1.95%.

 

See accompanying notes to financial statements.

 

|  64


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis U.S. Equity Opportunities Fund—Class N 
   Year Ended
December 31,
2021
   Year Ended
December 31,
2020
   Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Period Ended
December 31,
2017*
 

Net asset value, beginning of the period

  $47.84   $43.61   $36.37  $42.63   $37.62 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.03    0.13    0.19(b)   0.25    0.12 

Net realized and unrealized gain (loss)

   11.07    9.20    11.14   (2.91   6.20 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   11.10    9.33    11.33   (2.66   6.32 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

           (0.30  (0.18   (0.16

Net realized capital gains

   (4.80   (5.10   (3.79  (3.42   (1.15
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total Distributions

   (4.80   (5.10   (4.09  (3.60   (1.31
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $54.14   $47.84   $43.61  $36.37   $42.63 
  

 

 

   

 

 

   

 

 

  

 

 

   

 

 

 

Total return(c)

   23.53   22.48   31.44%(b)   (6.11)%    16.78%(d) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $177   $172   $654  $1   $1 

Net expenses(e)

   0.83   0.84   0.83  0.76   0.78%(f)(g) 

Gross expenses

   1.38   1.13   1.42  13.35   13.41%(f) 

Net investment income

   0.06   0.31   0.44%(b)   0.56   0.44%(f) 

Portfolio turnover rate

   18   26   12  23   17%(h) 

 

*

From commencement of Class operations on May 1, 2017 through December 31, 2017.

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.19, total return would have been 31.27% and the ratio of net investment income to average net assets would have been 0.44%.

(c)

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)

Effective July 1, 2017, the expense limit decreased from 0.95% to 0.90%.

(h)

Represents the Fund’s portfolio turnover rate for the year ended December 31, 2017.

 

See accompanying notes to financial statements.

 

65  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Natixis U.S. Equity Opportunities Fund—Class Y 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
   Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $47.74  $43.56   $36.33  $42.61   $34.77 
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.00(b)   0.05    0.29(c)   0.20    0.16 

Net realized and unrealized gain (loss)

   11.05   9.23    10.99   (2.92   9.07 
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   11.05   9.28    11.28   (2.72   9.23 
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

          (0.26  (0.14   (0.14

Net realized capital gains

   (4.80  (5.10   (3.79  (3.42   (1.25
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total Distributions

   (4.80  (5.10   (4.05  (3.56   (1.39
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $53.99  $47.74   $43.56  $36.33   $42.61 
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Total return

   23.48  22.36   31.36%(c)(d)   (6.24)%    26.60

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $284,738  $243,302   $283,864  $296,255   $285,008 

Net expenses

   0.89  0.92   0.91%(e)   0.91   0.95%(f) 

Gross expenses

   0.89  0.92   0.92  0.91   0.95

Net investment income

   0.00%(g)   0.13   0.69%(c)   0.45   0.40

Portfolio turnover rate

   18  26   12  23   17

 

(a)

Per share net investment income has been calculated using the average shares outstanding during the period.

(b)

Amount rounds to less than $0.01 per share.

(c)

Includes non-recurring dividends. Without this dividend, net investment income per share would have been $0.22, total return would have been 31.16% and the ratio of net investment income to average net assets would have been 0.53%.

(d)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(e)

The administrator 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, 2017, the expense limit decreased from 1.00% to 0.95%.

(g)

Amount rounds to less than 0.01%.

 

See accompanying notes to financial statements.

 

|  66


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Mid Cap Fund—Class A 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $21.79  $22.42  $17.37  $22.65   $20.55 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.05   0.07   0.03   0.09    0.17(b) 

Net realized and unrealized gain (loss)

   4.52   1.96   5.21   (3.71   2.48 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   4.57   2.03   5.24   (3.62   2.65 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.04  (0.04  (0.02  (0.15   (0.18

Net realized capital gains

   (3.62  (2.62  (0.17  (1.51   (0.37
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (3.66  (2.66  (0.19  (1.66   (0.55
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $22.70  $21.79  $22.42  $17.37   $22.65 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(c)

   21.32%(d)   10.46%(d)   30.21%(d)   (16.10)%    12.93%(b) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $37,849  $30,567  $33,434  $43,769   $67,186 

Net expenses

   1.17%(e)(f)   1.20%(e)   1.25%(e)(g)(h)   1.24   1.22

Gross expenses

   1.23  1.29  1.28%(g)   1.24   1.22

Net investment income

   0.22  0.35  0.16  0.42   0.77%(b) 

Portfolio turnover rate

   71  52  52  44   42

 

(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 $0.09, total return would have been 12.53% and the ratio of net investment income to average net assets would have been 0.41%.

(c)

A sales charge for Class A shares is not reflected in total return calculations.

(d)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(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 1.20% to 1.15%.

(g)

Includes interest expense. Without this expense the ratio of net expenses would have been 1.23% and the ratio of gross expenses would have been 1.26%.

(h)

Effective July 1, 2019, the expense limit decreased from 1.40% to 1.20%.

 

See accompanying notes to financial statements.

 

67  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Mid Cap Fund—Class C 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $20.15  $21.06  $16.43  $21.50   $19.51 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   (0.13  (0.08  (0.10  (0.08   0.00(b)(c) 

Net realized and unrealized gain (loss)

   4.18   1.79   4.90   (3.48   2.36 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   4.05   1.71   4.80   (3.56   2.36 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.00)(b)      (0.00)(b)        

Net realized capital gains

   (3.62  (2.62  (0.17  (1.51   (0.37
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (3.62  (2.62  (0.17  (1.51   (0.37
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $20.58  $20.15  $21.06  $16.43   $21.50 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(d)

   20.44%(e)   9.60%(e)   29.25%(e)   (16.71)%    12.11%(c) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $11,436  $14,023  $21,932  $23,967   $47,559 

Net expenses

   1.93%(f)(g)   1.95%(f)   1.99%(f)(h)(i)   1.98   1.97

Gross expenses

   1.98  2.04  2.02%(h)   1.98   1.97

Net investment income (loss)

   (0.56)%   (0.42)%   (0.50)%   (0.36)%    0.00%(c)(j) 

Portfolio turnover rate

   71  52  52  44   42

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Amount rounds to less than $0.01 per share.

(c)

Includes a non-recurring dividend. Without this dividend, net investment loss per share would have been $(0.07), total return would have been 11.70% and the ratio of net investment loss to average net assets would have been (0.35)%.

(d)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(e)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(f)

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.

(g)

Effective July 1, 2021, the expense limit decreased from 1.95% to 1.90%.

(h)

Includes interest expense. Without this expense the ratio of net expenses would have been 1.98% and the ratio of gross expenses would have been 2.01%.

(i)

Effective July 1, 2019, the expense limit decreased from 2.15% to 1.95%.

(j)

Amount rounds to less than 0.01%.

 

See accompanying notes to financial statements.

 

|  68


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Mid Cap Fund—Class N 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $22.07  $22.66  $17.54  $22.87   $20.75 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.14   0.13   0.11   0.17    0.25(b) 

Net realized and unrealized gain (loss)

   4.58   2.00   5.27   (3.75   2.51 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   4.72   2.13   5.38   (3.58   2.76 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.12  (0.10  (0.09  (0.24   (0.27

Net realized capital gains

   (3.62  (2.62  (0.17  (1.51   (0.37
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (3.74  (2.72  (0.26  (1.75   (0.64
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $23.05  $22.07  $22.66  $17.54   $22.87 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return

   21.70%(c)   10.83%(c)   30.67%(c)   (15.78)%    13.31%(b) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $91,416  $17,965  $18,262  $70,902   $134,205 

Net expenses

   0.86%(d)(e)   0.90%(d)   0.92%(d)(f)(g)   0.88   0.88

Gross expenses

   0.89  0.94  0.93%(f)   0.88   0.88

Net investment income

   0.55  0.65  0.51  0.76   1.16%(b) 

Portfolio turnover rate

   71  52  52  44   42

 

(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 $0.17, total return would have been 12.92% and the ratio of net investment income to average net assets would have been 0.76%.

(c)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(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)

Includes interest expense. Without this expense the ratio of net expenses would have been 0.91% and the ratio of gross expenses would have been 0.91%.

(g)

Effective July 1, 2019, the expense limit decreased from 1.10% to 0.90%.

 

See accompanying notes to financial statements.

 

69  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Mid Cap Fund—Class Y 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $22.10  $22.69  $17.57  $22.89   $20.77 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.11   0.12   0.10   0.15    0.23(b) 

Net realized and unrealized gain (loss)

   4.60   2.00   5.26   (3.75   2.51 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   4.71   2.12   5.36   (3.60   2.74 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.10  (0.09  (0.07  (0.21   (0.25

Net realized capital gains

   (3.62  (2.62  (0.17  (1.51   (0.37
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (3.72  (2.71  (0.24  (1.72   (0.62
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $23.09  $22.10  $22.69  $17.57   $22.89 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return

   21.65%(c)   10.76%(c)   30.52%(c)   (15.85)%    13.19%(b) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $226,838  $227,501  $298,705  $453,085   $774,304 

Net expenses

   0.93%(d)(e)   0.95%(d)   1.00%(d)(f)(g)   0.99   0.97

Gross expenses

   0.98  1.04  1.02%(f)   0.99   0.97

Net investment income

   0.45  0.60  0.48  0.66   1.04%(b) 

Portfolio turnover rate

   71  52  52  44   42

 

(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 $0.15, total return would have been 12.80% and the ratio of net investment income to average net assets would have been 0.67%.

(c)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(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 0.95% to 0.90%.

(f)

Includes interest expense. Without this expense the ratio of net expenses would have been 0.98% and the ratio of gross expenses would have been 1.01%.

(g)

Effective July 1, 2019, the expense limit decreased from 1.15% to 0.95%.

 

See accompanying notes to financial statements.

 

|  70


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Small Cap Value Fund—Class A 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
  Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $16.69  $15.45  $12.48  $18.71  $19.79 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income (loss)(a)

   0.00(b)(c)   0.00(c)   0.02   0.01   (0.01

Net realized and unrealized gain (loss)

   4.98   1.33   3.06   (2.76  1.21 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total from Investment Operations

   4.98   1.33   3.08   (2.75  1.20 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.01  (0.00)(c)   (0.03  (0.00)(c)   (0.00)(c) 

Net realized capital gains

   (3.79  (0.09  (0.08  (3.48  (2.28
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Distributions

   (3.80  (0.09  (0.11  (3.48  (2.28
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net asset value, end of the period

  $17.87  $16.69  $15.45  $12.48  $18.71 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total return(d)

   30.24%(b)(e)   8.91%(e)   24.66%(e)   (14.84)%   6.28

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $81,493  $61,571  $67,525  $66,376  $93,751 

Net expenses

   1.27%(f)(g)   1.32%(f)(h)   1.40%(f)(i)   1.38  1.36

Gross expenses

   1.43  1.53  1.47  1.38  1.36

Net investment income (loss)

   0.01%(b)   0.02  0.12  0.03  (0.03)% 

Portfolio turnover rate

   92  105  61  70  92

 

(a)

Per share net investment income (loss) has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend. Without this dividend, net investment loss per share would have been $(0.05), total return would have been 29.95% and the ratio of net investment loss to average net assets would have been (0.25%).

(c)

Amount rounds to less than $0.01 per share.

(d)

A sales charge for Class A shares is not reflected in total return calculations.

(e)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(f)

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.

(g)

Effective July 1, 2021, the expense limit decreased from 1.30% to 1.25%.

(h)

Effective July 1, 2020, the expense limit decreased from 1.34% to 1.30%.

(i)

Effective July 1, 2019, the expense limit decreased from 1.45% to 1.34%.

 

See accompanying notes to financial statements.

 

71  |


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

   Vaughan Nelson Small Cap Value Fund—Class C 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
  Year Ended
December 31,
2017
 

Net asset value, beginning of the period

  $8.34  $7.84  $6.41  $11.67  $13.26 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment loss(a)

   (0.06)(b)   (0.05  (0.05  (0.09  (0.10

Net realized and unrealized gain (loss)

   2.45   0.64   1.57   (1.69  0.79 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total from Investment Operations

   2.39   0.59   1.52   (1.78  0.69 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

      (0.00)(c)   (0.01  (0.00)(c)   (0.00)(c) 

Net realized capital gains

   (3.79  (0.09  (0.08  (3.48  (2.28
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Distributions

   (3.79  (0.09  (0.09  (3.48  (2.28
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net asset value, end of the period

  $6.94  $8.34  $7.84  $6.41  $11.67 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total return(d)

   29.45%(b)(e)   8.08%(e)   23.69%(e)   (15.51)%   5.50

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $966  $983  $1,450  $3,480  $15,756 

Net expenses

   2.03%(f)(g)   2.07%(f)(h)   2.16%(f)(i)   2.12  2.11

Gross expenses

   2.19  2.28  2.23  2.12  2.11

Net investment loss

   (0.67)%(b)   (0.71)%   (0.68)%   (0.83)%   (0.79)% 

Portfolio turnover rate

   92  105  61  70  92

 

(a)

Per share net investment loss has been calculated using the average shares outstanding during the period.

(b)

Includes a non-recurring dividend. Without this dividend, net investment loss per share would have been $(0.10), total return would have been 29.09% and the ratio of net investment loss to average net assets would have been (0.99%).

(c)

Amount rounds to less than $0.01 per share.

(d)

A contingent deferred sales charge for Class C shares is not reflected in total return calculations.

(e)

Had certain expenses not been waived/reimbursed during the period, total returns would have been lower.

(f)

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.

(g)

Effective July 1, 2021, the expense limit decreased from 2.05% to 2.00%.

(h)

Effective July 1, 2020, the expense limit decreased from 2.09% to 2.05%.

(i)

Effective July 1, 2019, the expense limit decreased from 2.20% to 2.09%.

 

See accompanying notes to financial statements.

 

|  72


Financial Highlights (continued)

 

For a share outstanding throughout each period.

 

<
   Vaughan Nelson Small Cap Value Fund—Class N 
   Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
   Period Ended
December 31,
2017*
 

Net asset value, beginning of the period

  $17.52  $16.20  $13.08  $19.37   $19.55 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

 

Net investment income(a)

   0.01(b)   0.04   0.08   0.08    0.07 

Net realized and unrealized gain (loss)

   5.29   1.42   3.20   (2.86   1.35 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total from Investment Operations

   5.30   1.46   3.28   (2.78   1.42 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

LESS DISTRIBUTIONS FROM:

 

Net investment income

   (0.07  (0.05  (0.08  (0.03   (0.02

Net realized capital gains

   (3.79  (0.09  (0.08  (3.48   (1.58
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total Distributions

   (3.86  (0.14  (0.16  (3.51   (1.60
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Net asset value, end of the period

  $18.96  $17.52  $16.20  $13.08   $19.37 
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

Total return(c)

   30.64%(b)   9.27  25.08  (14.48)%    7.17%(d) 

RATIOS TO AVERAGE NET ASSETS:

 

Net assets, end of the period (000’s)

  $1,383  $23  $21  $1   $1 

Net expenses(e)

   0.97%(f)   1.02%(g)   1.03%(h)   0.96   0.96%(i) 

Gross expenses

   1.19