Investment Universe, Process, Strategy and Benchmark – How does the Fund Manager invest? (ISIN: IE0000507263)
The Fund’s broad mandate gives us the flexibility to invest globally across the credit quality spectrum. We can invest in corporate bonds, convertible securities, international debt, emerging markets and government securities.
This flexible, “go anywhere” style allows us to seek out what we believe are the best values in the fixed-income markets as new opportunities and market inefficiencies present themselves. It also allows us to move around the vast spectrum when we become uncomfortable with the prevailing environment. We try to exploit these inefficiencies using a disciplined, yet flexible investment approach. The process is distinctly value based, with a strong focus on discounted issues and situations.
Adding multisector bond exposure can help investors broaden their diversification beyond domestic fixedincome markets. The Loomis Sayles multisector strategy seeks to optimize returns by constructing a portfolio diversified by country, currency, quality and sector. With full discretion to invest in government and corporate debt from investment grade to high yield, the Fund offers a combination of diversification and return potential that is likely to be a good complement to almost any portfolio.
Fund Overview
- Asset class - Global fixed-income
- Style -Active - Opportunistic - Multisector
- Objective -High total investment return through a combination of current income and capital appreciation Index Barclays Capital U.S. Government/ Credit Bond Index TR
- Reference Index - Index Barclays Capital U.S. Government/ Credit Bond Index TR
- Inception -30 June 1997
- Reference currency -USD
- Other currencies available -GBP, GBP-hedged, EUR, EUR-hedged
- Recommended investment horizon 3 years
A HISTORY OF POSITIVE RETURNS WHEN RATES RISE - The fund posted positive performance in 13 of 17 quarters in which the 10-year U.S. Treasury yield rose more than 20 basis points.
Making the most of rising rates
With the flexibility to invest in all types of fixed-income securities anywhere in the world, Loomis Sayles Multisector Income Fund has built its current strategy around four key themes:
a) Pursue a competitive yield.
Strive to build portfolios with a significant yield advantage to offset the headwinds
of rising interest rates.
b) It’s a bond picker’s market.
Evaluate each investment idea based on its potential to produce a positive return.
c) Minimize market risk.
Use defensive strategies when necessary to reduce interest rate risk.
d) Go global.
Invest globally to gain exposure to non-U.S. dollar-denominated bonds and other global opportunities
Universe and universe construction
The broad universe reflects the impressive depth of coverage provided by credit and sovereign analysts. No formalized universe construction procedure is in place; rather, analysts with specialized coverage responsibilities follow the most compelling investment candidates within their industry/sector/regional assignments. All fixed income sectors are followed: corporate (investment grade and below; multiple parts of the capital structure: straight debt, convertibles, bank loans, etc.; developed and emerging markets), US government and its agencies, US municipals, sovereign (developed and emerging markets), mortgages, and asset-backed. In total, more than 1,058 corporate credit issuers are rated and 81 sovereign issuers are followed directly or through shadow coverage.
Performance Review 2010
Fund Manager Team: "The Fund outperformed during the period due to positive security selection and off-index bets. The Fund outperformed its index by 2.95% for the month. September was a strong risk-on month, therefore underweight allocation to government bonds and high exposure to investment grade credit, high yield and convertibles helped.
We continue to employ a process that analyzes each individual investment. Investing opportunistically, with a focus on long-term performance and canvassing many markets to find appropriate ideas for the portfolios. Maintaining a yield advantage is likely to be very important in this new marketplace, however, the emphasis should shift to having yield advantage in the right credits.
It has become true bond pickers market, which makes research vital. We will continue to emphasize the shift towards a non-market related strategy. As we enter this period, we are confident that we have the tools, expertise, and historical perspective to continue to provide long-term value to our clients."
Performance Review 2011
Fund Manager Team: "Generally favourable fixed income performance from October and December was sufficient to withstand the lower returns during November. With a return of 2.73%, Fund outperformed its index which returned 1.18%.
A heavy allocation to non-U.S.-dollar-denominated securities contributed favourably to performance during the fourth quarter due to a particularly strong showing in October. Specifically, issues denominated in the Canadian dollar, Australian dollar, Brazilian real and New Zealand dollar drove performance higher in the fourth quarter, benefitting from a rally in commodity prices; however, exposure to holdings denominated in the euro pared some of the quarter´s gains.
Positive returns from corporate bonds during the quarter were interrupted during November. An allocation to high-yield corporates proved crucial in generating excess returns, since investment-grade bonds ended nearly in-line with the index. In the high yield space, a strong focus on industrials drove returns higher, led by issues within the consumer cyclical, basic industry, consumer non-cyclical and energy areas. High-yield financials and utilities also aided excess returns, as select finance, insurance and electric companies outperformed the Benchmark."
Performance 2012 - Year-to-Date
Performance since launch
Portfolio Managers
- Dan Fuss, CFA, CIC: began investment career in 1958; joined Loomis Sayles in 1976; has managed the Fund since inception; MBA, Marquette University.
- Kathleen Gaffney, CFA: began investment career in 1984; joined Loomis Sayles in 1984; has managed the Fund since inception; BA, University of Massachusetts.
- Elaine M. Stokes, began investment career in 1987; joined Loomis Sayles in 1988; has managed the Fund since 1 February 2007; BSc, St. Michael’s College.
- Matthew J. Eagan, CFA: began investment career in 1990; joined Loomis Sayles in 1997; has managed the Fund since 1 February 2007; BA, Northeastern University; MBA, Boston University.
