Natixis Global Asset Management, begun trading a new International Equity Minimum Volatility ETF, the Natixis Seeyond International Minimum Volatility ETF (Nyse Arca: MVIN) on Thursday, October 27, 2016. Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: MVIN | Exchange: NYSE ARCA |
| Name: Natixis Seeyond International Minimum Volatility ETF | Net Expense Ratio: 0.55% |
FUND OBJECTIVE:
The Natixis Seeyond International Minimum Volatility ETF is an actively managed fund, which seeks long-term capital appreciation with less volatility than typically experienced by international equity markets.
Under normal circumstances, the Fund invests primarily in non-U.S. equity securities, which may include common stocks, preferred stocks, and real estate investment trusts (REITs). The Fund may invest in companies of any size and typically invests in a number of different countries throughout the world. The Fund may invest in the stocks of non-U.S. issuers directly or indirectly through depositary receipts (receipts issued by a financial institution that represent ownership interests in securities). The portfolio may also be exposed to currencies other than the U.S. dollar.
When building and managing the Fund’s portfolio, Natixis Asset Management U.S., LLC (Subadviser) employs both quantitative and qualitative factors in an effort to identify securities that demonstrate lower volatility and, in combination with other securities in the portfolio, reduce the Fund’s overall volatility relative to the developed international equity market. In assessing the following three quantitative factors, the Subadviser considers both long- and short-term time horizons that it believes will enable the Fund to reduce overall volatility:
• The volatility of each individual equity security;
• The correlation of each individual equity security to all other equity securities in the Fund’s investment universe of international developed equities; and
• The weight of each equity security within the portfolio.
Through a qualitative assessment, the Subadviser reviews a range of factors, including company-specific risks, as well as overall portfolio construction and implementation considerations. The investment team actively monitors price action, company statements and current events that can affect the price of a company’s stock. Company-specific risks include, but are not limited to, corporate actions, mergers or acquisitions. Reviewing overall portfolio construction involves monitoring risks such as volatility, liquidity, or substantial exposure to a specific risk factor, with the view to understanding how the entire portfolio is constructed and invested. Implementation considerations include, but are not limited to, decisions related to rebalancing and repositioning the portfolio. Taken together, the quantitative and qualitative process seeks to generate returns while lowering overall portfolio volatility.
The Subadviser constructs the Fund’s portfolio using a 3 step process:
• The Subadviser first conducts a preliminary review of the equity securities within the Fund’s investment universe of international developed equities. Developed markets are economies the Subadviser believes are generally recognized to be fully developed markets, as measured by gross national income, financial market infrastructure, market capitalization and/or other factors. This initial filtering is designed to exclude dual listings and to identify stocks that the Subadviser believes present insufficient history, liquidity and company-specific risk, such as certain corporate actions, mergers or acquisitions.
• In seeking to minimize the overall volatility of the Fund, the Subadviser constructs a portfolio that is systematically guided by proprietary quantitative analysis, which assesses historical volatilities and correlations within the investment universe and then estimates which combination of such stocks has the potential to display the lowest overall portfolio volatility.
• The Subadviser then actively manages the portfolio by continuously monitoring for changes in volatility, liquidity and individual risk factors with the goal of avoiding detrimental risk concentration. The Subadviser may sell a security when it believes that the security has acquired substantial exposure to a specific risk factor. These include company specific or macro-economic events or risks, such as accounting irregularities, lawsuits, corporate restructurings, geopolitical events, or natural catastrophes.
The Fund may engage in active and frequent trading of securities and currencies. Effects of frequent trading may include high transaction costs, which may lower the Fund’s return, and realization of greater short-term capital gains, distributions of which are taxable as ordinary income to taxable shareholders. Trading costs and tax effects associated with frequent trading may adversely affect the Fund’s performance.
Fund Top Holdings (10/28/16):
| US DOLLAR | 100.48% |
| COMFORTDELGRO CORP LTD | 2.91% |
| ABC MART INC | 2.74% |
| KUEHNE + NAGEL INTL AG REG | 2.63% |
| TEVA PHARMACEUTICAL IND LTD | 2.53% |
| PARTNERS GROUP HOLDING AG | 2.48% |
| HKT TRUST AND HKT LTD SS | 2.45% |
| YAMADA DENKI CO LTD | 2.24% |
| COLRUYT SA | 2.04% |
| TECHTRONIC INDUSTRIES CO LTD | 1.97% |
Useful Links:
MVIN Home Page
ETFtrack Comment:
MVIN is Natixis’ first ETF available in the U.S. market.
Here is a comment from John Hailer, CEO of Natixis Global Asset Management for the Americas and Head of Global Distribution:
“Investors are increasingly interested in accessing our investment strategies through ETFs, and MVIN provides them an active strategy which can react to market events and seek to take advantage of opportunities with all the potential benefits of an ETF.”
Natixis Asset Management U.S., LLC (Natixis AM U.S.) is subadvisor to the fund. Natixis AM U.S. is a subsidiary of Natixis Asset Management, which manages more than $364 billion (as of 06/30/2016) in assets globally.