Fund Rationale: Natixis Harris Associates Global Equity Fund

Natixis Harris Associates Global Equity Fund
SGD Class P Accumulation Shares (ISIN: LU1201861165)

Introductory information
The Natixis Harris Associates Global Equity Fund (the “Fund”) invests in a globally diversified portfolio of equities, and employs a disciplined value approach and long-term absolute return orientation. The Fund seeks to invest in companies whose stocks are trading at a substantial discount to intrinsic value, and have owner-oriented management teams. The Fund follows a rigorous, independent, fundamental research process that seeks to identify businesses with growing value, and derives an estimation of intrinsic value by adopting a private equity approach to public equity markets using cash flow analysis as the main metric. The Fund is suitable for investors who are looking for exposure to the equity markets on a global basis,  can afford to set aside capital for at least 3 years (medium to long-term horizon), and can tolerate temporary losses and volatility. The principal of the Fund may be at risk.

The Fund is a Singapore-constituted open-ended unit trust, and its inception date was 15 June 2001. The SGD Class P Accumulation Shares were incepted on 23 March 2015. The Fund had assets under management of SGD 2.5bn as of September 2019.

 

Characteristics
The Fund seeks to achieve long term capital growth and invests primarily in companies around the world with a focus on developed markets. It has 93.5% exposure to developed markets 6.6% in emerging markets, with 47% in the US and 40% in Europe with 6% in Asia Pacific. It employs a disciplined value approach and long-term absolute return orientation. The average Price Earnings ratio is 14.4x versus the index at 18.4x and Price to Book of 1.6x versus 2.4x for the index. The dividend yield is similar at 2.3%. It is underweight in mega-caps while being overweight mid- and small-caps.

 

Background information and cost
The Fund has an underlying fund management fee and a total expense ratio ("TER") of 175bps per annum (1.75% p.a.). Endowus have arranged for the FMC to rebate the trailer fees which Endowus will refund 100% back to the client to achieve a lower net management fee/TER of 1%. Endowus does not charge a preliminary sales charge or any other fees, other than the all-in advice fee. The fund is on the CPF Investment Scheme - List A Fund, and is included under the CPF Investment Scheme for Ordinary Account. It has been classified by the CPF Board under the risk classification of “Higher Risk / Broadly Diversified.” 

Harris Associates are an asset management company based in Chicago, USA with AUM of SGD 160bn. Harris Associates is a subsidiary of Natixis Investment Management. The Fund is a sub-fund of a SICAV sub-fund of Natixis International Funds and is authorised by CSSF as a UCITS fund.

 

Selection criteria for Endowus
Endowus have selected the Natixis Harris Associates Global Equity Fund for its long track record among the global equity funds included in CPFIS. There are significant benefits as a truly globally diversified portfolio with exposure to major markets in North America, Europe and Emerging Markets. The fund allows for more stable returns in large and value equities. The Fund has averaged returns of 9.2% in the past 10 years and has outperformed the MSCI All Country World Index in 5 of the past 10 years. It is the best-in-class global equity fund currently available in the CPFIS included list. 

Updated by Endowus: 22 Oct 2019

** Disclaimer
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.

The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.