Natixis Loomis Sayles Short Duration Income (LSST)

Overview of Natixis Loomis Sayles Short Duration Income ETF (LSST)

Profile:

LSST is an actively managed ETF that seeks to provide current income and capital appreciation through investments in high-quality, short-duration fixed-income securities. It primarily invests in investment-grade corporate bonds, U.S. Treasury securities, and agency mortgage-backed securities with maturities of less than three years.

Objective:

The primary goal of LSST is to generate high current income while preserving capital through its short-duration bond portfolio.

Issuer:

LSST is issued and managed by Natixis Investment Managers, a global asset management firm with over $1.4 trillion in assets under management. The firm has a strong reputation for generating consistent returns for its clients and is known for its expertise in fixed income investing.

Market Share:

LSST has a relatively small market share within the short-duration bond ETF space, accounting for approximately 0.2% of the total assets in the category.

Total Net Assets:

LSST has approximately $612 million in total net assets as of November 7, 2023.

Moat:

LSST's competitive advantage lies in its active management approach. The experienced portfolio managers at Natixis Investment Managers actively select individual bonds for the portfolio, seeking to exploit opportunities in the short-duration bond market to generate higher returns than a passively managed index fund. Additionally, the ETF's focus on high-quality, short-duration bonds aims to mitigate interest rate risk.

Financial Performance:

LSST has delivered a positive return of 4.43% year-to-date as of November 7, 2023, outperforming its benchmark index, the Bloomberg U.S. Treasury Bill 1-3 Month Index, which returned 4.04% over the same period.

Growth Trajectory:

The growth trajectory for LSST appears positive considering the rising interest rate environment. Short-duration bond funds are generally less sensitive to interest rate fluctuations than longer-duration bond funds, making them attractive in a rising rate environment.

Liquidity:

LSST has an average daily trading volume of approximately 30,000 shares, indicating moderate liquidity. The bid-ask spread is typically around 0.02%, indicating a low cost to trade the ETF.

Market Dynamics:

Factors affecting LSST's market environment include economic indicators like inflation and interest rates, the overall bond market performance, and credit spreads.

Competitors:

Key competitors of LSST include:

• iShares Short Treasury Bond ETF (SHV) with a market share of 27.8%.
• SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) with a market share of 24.4%.
• Vanguard Short-Term Treasury ETF (VGSH) with a market share of 17.3%.

Expense Ratio:

LSST has an expense ratio of 0.25%.

Investment Approach and Strategy:

LSST actively manages its portfolio, selecting individual bonds based on their credit quality, maturity, and potential for generating income. The ETF primarily invests in investment-grade corporate bonds, U.S. Treasury securities, and agency mortgage-backed securities with maturities of less than three years.

Key Points:

• Actively managed ETF seeking high current income.
• Invests in high-quality, short-duration fixed-income securities.
• Outperformed its benchmark index year-to-date.
• Moderate liquidity and low expense ratio.

Risks:

• Interest rate risk: Changes in interest rates can affect the value of the ETF's holdings.
• Credit risk: The ETF invests in bonds issued by companies and government agencies, which carry the risk of default.
• Market risk: The overall bond market can experience fluctuations that could impact the ETF's value.

Who Should Consider Investing:

LSST is suitable for investors seeking:

• Current income generation.
• Short-term investment horizon.
• Lower sensitivity to interest rate fluctuations.

Fundamental Rating Based on AI:

Based on an analysis of financial health, market position, and future prospects, LSST receives an AI-based fundamental rating of 7 out of 10. The rating considers the ETF's strong track record, experienced management team, and focus on high-quality bonds. However, the relatively small market share and moderate liquidity are factors that limit the rating.

Resources:

• Natixis Investment Managers: https://www.im.natixis.com/us/individuals/etfs/lsst
• ETF.com: https://www.etf.com/LSST
• YCharts: https://ycharts.com/indicators/lsst_price_return

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.

Note: This analysis is based on information available as of November 7, 2023. Market conditions and data may change over time.