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Portfolio construction

Gliding into retirement with Natixis Target Retirement Funds

October 23, 2024 - 5 min read

What’s the driving force behind target date funds’ growing popularity among retirement plan participants? Are there innovative approaches that plan sponsors should take a closer look at? Chris Sharpe, Lead Portfolio Manager of the Natixis Target Retirement Funds, and John Kavolius, Investment Strategist, discuss the target date strategy market and key differentiators of the Natixis Target Retirement Funds.*

Key takeaways:

  • The Natixis Target Retirement Funds use a blend of active and passive strategies and diverse investment styles. 
  • The target date industry reached a record $3.5 trillion USD at the end of 2023, according to Morningstar.
  • Effective July 1, 2024, the Natixis target date series expense ratio has been reduced by 6 basis points across all vintages.


Natixis Target Retirement Funds differentiators

There are two main attributes that differentiate the Natixis Target Retirement Funds:

  • Blend of active and passive strategies: The funds feature hybrid portfolios that are a blend of active and passive strategies. This flexibility offers a vast opportunity set across the broad range of equity and fixed income asset classes.
  • Multi-manager approach: Our multi-manager structure allows us to leverage the diverse investment expertise of independent affiliated investment managers. Access to multiple asset managers can help support meaningful diversification that reduces the chance of investments being managed in the same way. 


Target date funds’ background

Since their creation in the mid-1990s, target date funds have become a staple on retirement plan menus. Although growth and acceptance were slow at first, target date funds gained traction following the passage of the Pension Protection Act in 2006 and remain a popular investment choice. The target date industry reached a record $3.5 trillion USD and $156 billion USD in increased net flows in 2023, according to Morningstar.


Competitive performance: now with lower fees

Effective July 1, 2024, the Natixis target date series expense ratio has been reduced by 6 basis points across all vintages. This reduced fee, combined with competitive performance since their inception in 2017, makes the fund family even more attractive for plan sponsors and retirement investors.

* Effective July 1, 2024, the name of the Natixis Sustainable Future Funds changed to Natixis Target Retirement Funds. Each fund’s investment goals and principal investment strategies remain the same; fund name changes are in sequential five-year periods from 2015 to 2065.

This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary.

The views and opinions expressed may change based on market and other conditions.

Diversification does not ensure a profit or guarantee against loss.

Target date important considerations risk: The Funds are designed for investors who will be age 65 around the year indicated in each Fund's name. When choosing a Fund, investors who anticipate retiring significantly earlier or later than age 65 may want to select a Fund closer to their anticipated retirement year. Besides age, there may be other considerations relevant to fund selection, including personal circumstances, risk tolerance and specific investment goals.

The Fund's asset allocation becomes increasingly conservative as it approaches the target date and beyond. Allocations may deviate plus or minus 10% from their targeted percentages.

Investments in the Fund are subject to the risks of the underlying funds and separately managed segments. Principal invested is not guaranteed against losses. It is possible to lose money by investing in the Fund, including at and after the Fund's target date.

Equity securities are volatile and can decline significantly in response to broad market and economic conditions.

Fixed income securities may carry one or more of the following risks: credit, interest rate (as interest rates rise, bond prices usually fall), inflation and liquidity.

Foreign and emerging market securities may be subject to greater political, economic, environmental, credit, currency and information risks.

Foreign securities may be subject to higher volatility than US securities, due to varying degrees of regulation and limited liquidity. These risks are magnified in emerging markets.

Mortgage-related and asset-backed securities are subject to the risks of the mortgages and assets underlying the securities. Other related risks include prepayment risk, which is the risk that the securities may be prepaid, potentially resulting in the reinvestment of the prepaid amounts into securities with lower yields.

Multi-manager funds may be managed by several subadvisors using different styles that may not always complement each other. This could adversely affect performance and may lead to higher fund expenses.

ESG investment risk: The Fund’s ESG investment approach could cause the Fund to perform differently compared to funds that do not have such an approach or compared to the market as a whole. The Fund’s application of ESG-related considerations may affect the Fund’s exposure to certain issuers, industries, sectors, style factors or other characteristics and may impact the relative performance of the Fund – positively or negatively – depending on the relative performance of such investments.

Inflation-protected securities move with the rate of inflation and carry the risk that in deflationary conditions (when inflation is negative), the value of the bond may decrease.

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

Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit im.natixis.com or call 800-225-5478 for a prospectus or a summary prospectus containing this and other information. Read it carefully.

Natixis Distribution, LLC is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.
 

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