Foreign giant Natixis adds new funds to the former NexGen family

Rudy Luukko 21 September, 2015 | 5:00PM
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Multinational money-management giant Natixis Global Asset Management is bringing the capabilities of three of its U.S. affiliates to the former NexGen family of mutual funds. Natixis acquired NexGen in December and rebranded it in August as NGAM Canada Investment Corp. Launched last week, the new offerings consist of four distinct investment strategies and a combination of tax-managed corporate-class funds and stand-alone mutual-fund trusts.

Founded in 2005 by Jim Hunter, NexGen was best known for its complex fund structures designed to improve after-tax returns for funds held in non-registered accounts. As a Natixis subsidiary, the Toronto-based firm is building on that legacy with the launch of Oakmark Natixis Tax Managed and Oakmark International Natixis Tax Managed, investing in U.S. equities and international equities, respectively.

Like existing funds in the NGAM multi-class structure, the new Oakmark mandates are available as return-of-capital, dividend-tax-credit and compound-growth classes. There are also trust versions designed for registered accounts. The portfolios of the Oakmark funds will be managed by Chicago-based Harris Associates. Oakmark is the retail fund brand of Harris Associates.

As disclosed in the NGAM mutual-fund prospectus, tax changes imposed by governments could have an adverse impact on NGAM's structure. To diversify its products away from this uncertainty, Natixis also launched two stand-alone mutual-fund trusts.

One of them is Gateway Low Volatility U.S. Equity, which will attempt to reduce volatility through the use of actively managed call and put options. The portfolio will be managed by Gateway Investment Advisers, which is based in Cincinnati.

The other new mutual-fund trust is Loomis Sayles Strategic Monthly Income, which will invest primarily in U.S. income-producing securities, including high-yield issues. Up to 35% of the assets may be held in preferred shares or dividend-paying common shares. The portfolio will be managed by Boston-based Loomis Sayles & Co.

Harris Associates, Gateway Investment Advisers and Loomis Sayles are all affiliates of Natixis Global Asset Management, which has headquarters in Paris and Boston and had US$904 billion under management as of June 30. The parent company of Natixis GAM is Natixis SA, which is listed on the Paris Stock Exchange and in turn is a subsidiary of BPCE, the second largest banking group in France.

The management fees for Series A of the new funds, not including operating expenses, are 1.75% for the Gateway and Loomis funds, 1.85% for the registered versions of the Oakmark funds, and 2% for the Oakmark corporate-class funds. There are also fee-based and high-net-worth purchase options.

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About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

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