UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-00242
Natixis Funds Trust II
(Exact name of Registrant as specified in charter)
399 Boylston Street,
Boston, Massachusetts 02116
(Address of principal (Zip code)
executive offices)
Coleen Downs Dinneen, Esq.
Natixis Distributors, L.P.
399 Boylston Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 449-2810
Date of fiscal year end: December 31
Date of reporting period: June 30, 2007
Item 1. Reports to Stockholders.
The Registrant's semi-annual report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940 is as follows:
[LOGO OF NATIXIS FUNDS] EQUITY FUNDS
SEMIANNUAL REPORT June 30, 2007
CGM Advisor Targeted Equity Fund
Hansberger International Fund
Harris Associates Focused Value Fund
Harris Associates Large Cap Value Fund
Natixis U.S. Diversifi ed Portfolio
(Formerly IXIS U.S. Diversifi ed Portfolio)
BlackRock Investment Management
Harris Associates
Loomis, Sayles & Company
Natixis Value Fund
(Formerly IXIS Value Fund)
Harris Associates
Loomis, Sayles & Company
Vaughan Nelson Investment Management
Westpeak Global Advisors
Vaughan Nelson Small Cap Value Fund
Westpeak Capital Growth Fund
TABLE OF CONTENTS
Management Discussion and Performance... page 1
Portfolio of Investments................ page 28
Financial Statements.................... page 47
CGM ADVISOR TARGETED EQUITY FUND
PORTFOLIO PROFILE
Objective:
Seeks long-term growth of capital through investments in equity securities of
companies whose earnings are expected to grow at a faster rate than the overall
U.S. economy
- --------------------------------------------------------------------------------
Strategy:
Generally invests in a focused portfolio of common stocks of large-cap companies
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Inception Date:
November 27, 1968
- --------------------------------------------------------------------------------
Manager:
G. Kenneth Heebner
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Symbols:
Class A NEFGX
Class B NEBGX
Class C NEGCX
Class Y NEGYX
- --------------------------------------------------------------------------------
What You Should Know:
The fund invests in a small number of securities, which may result in greater
volatility than more diversified funds. Growth stocks can be more sensitive to
market movements because their prices are based in part on future expectations.
The fund may invest in foreign securities that involve risks not associated
with domestic securities.
Management Discussion
- --------------------------------------------------------------------------------
Strong stock selection and an emphasis on globally oriented companies helped
fuel CGM Advisor Targeted Equity Fund's performance during the six months ended
June 30, 2007. The fund's return was 11.86%, based on the net asset value of
Class A shares, significantly ahead of its benchmark and the average results of
a peer group. The benchmark, the S&P 500 Index, returned 6.96% for the period,
while Morningstar's Large Blend category averaged 7.34%.
EMPHASIS SHIFTED TO ENERGY AND SUPERMARKET STOCKS
Throughout the first half of 2007 the fund remained fully invested in
anticipation of continued strong global economic growth. U.S. economic growth
was hurt by weakness in the single-family housing market and rising mortgage
foreclosures. However, the portfolio was positioned to benefit from foreign
economic strength through ownership of globally oriented companies.
We more than doubled the fund's energy holdings during the six-month period,
reflecting our renewed opinion that global oil prices would remain high. We
also established a significant position in supermarket companies because we
believe these securities should profit from rising food prices driven by higher
agricultural costs. We funded our acquisitions of supermarket and energy stocks
by selling the fund's airline and aerospace holdings and sharply reducing
financial holdings.
GLOBAL FOCUS DROVE FUND PERFORMANCE
The three biggest contributors to the fund's positive returns were all ADRs
(American Depository Receipts) of foreign companies, reflecting the portfolio's
current global focus. An ADR is a stock that trades in the U.S. stock market,
but represents shares of a foreign corporation.
America Movil was among the fund's top performers. This leading cellular
telephone company's principal markets are Mexico and Brazil, and it is gaining
market share in many Latin American countries where it is the dominant carrier.
We anticipate continued price/earnings ratio expansion reflecting the company's
strong leadership capabilities.
We also had good results with Banco Itau, one of Brazil's largest commercial
banks and a new addition to the portfolio. Commercial banks in Brazil are
seeing profits rise as inflation remains low and interest rates fall. In
addition, Banco Itau's assets and customer base have grown substantially
following its recent acquisition of the Latin American arm of Bank of Boston.
Another positive performer during the first half of 2007 was Brazilian mining
giant, Companhia Vale do Rio Doce (CVRD). A world leader in iron ore
production, CVRD is profiting from rising prices for iron ore, driven up by a
tight supply/demand relationship worldwide. Last year, CVRD purchased Canada's
leading nickel miner, Inco Limited. Rising nickel prices are now also
contributing to CVRD's profit margins.
CASINO STOCKS AND FINANCIAL HOLDINGS FAILED TO MEET EXPECTATIONS
Shares of Las Vegas Sands, a leading casino company with operations in Las
Vegas and Macau, China, hurt the fund's results. Our expectations for a major
land development in Macau have not materialized. This disappointment, coupled
with lower-than-anticipated gaming profits, caused a dramatic drop in the stock
price and we sold it.
Other disappointments included two leading financial companies: Lehman
Brothers, a major global investment bank, and Merrill Lynch, one of the world's
largest financial management and advisory firms. These stocks declined as
investors became concerned that fears arising from the subprime mortgage crisis
might spill over to the financial service industry as a whole. We sold both
positions.
OUTLOOK IS FOR CONTINUED GLOBAL GROWTH
Looking ahead, we anticipate continued global economic growth during the next
12 months, and we expect foreign economies to outperform the U.S. economy.
Accordingly, we plan to focus our pursuit of growth on companies doing business
internationally. We will also continue to target a select few companies in
industries we believe will experience strong growth, seeking the most
compelling individual stocks.
1
CGM ADVISOR TARGETED EQUITY FUND
Investment Results through June 30, 2007
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PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares
[CHART]
June 30, 1997 through June 30, 2007
Class A @ N.A.V. Class A @M.S.C. S&P 500 Index
Month End Cumulative Value/1/ Cumulative Value/2/ Cumulative Value/4/
- ---------- ------------------- ------------------- -------------------
6/30/1997 $10,000 $9,425 $10,000
7/31/1997 10,969 10,338 10,796
8/31/1997 10,405 9,807 10,191
9/30/1997 10,938 10,309 10,749
10/31/1997 10,509 9,905 10,390
11/30/1997 10,389 9,792 10,871
12/31/1997 10,389 9,792 11,058
1/31/1998 10,559 9,952 11,180
2/28/1998 11,487 10,826 11,986
3/31/1998 12,225 11,522 12,600
4/30/1998 12,695 11,965 12,727
5/31/1998 12,496 11,777 12,508
6/30/1998 13,164 12,407 13,016
7/31/1998 13,234 12,473 12,878
8/31/1998 10,709 10,093 11,016
9/30/1998 10,785 10,165 11,722
10/31/1998 11,871 11,188 12,675
11/30/1998 12,859 12,119 13,443
12/31/1998 13,859 13,062 14,218
1/31/1999 14,799 13,948 14,812
2/28/1999 13,738 12,948 14,352
3/31/1999 14,067 13,258 14,926
4/30/1999 14,018 13,212 15,504
5/31/1999 13,567 12,787 15,138
6/30/1999 14,566 13,729 15,978
7/31/1999 14,224 13,406 15,479
8/31/1999 14,200 13,383 15,403
9/30/1999 13,358 12,590 14,981
10/31/1999 13,871 13,073 15,928
11/30/1999 14,395 13,567 16,252
12/31/1999 15,963 15,045 17,209
1/31/2000 14,715 13,868 16,345
2/29/2000 16,021 15,100 16,035
3/31/2000 16,196 15,265 17,604
4/30/2000 15,587 14,691 17,075
5/31/2000 14,963 14,103 16,724
6/30/2000 15,022 14,158 17,137
7/31/2000 14,543 13,706 16,869
8/31/2000 15,232 14,356 17,916
9/30/2000 14,680 13,836 16,971
10/31/2000 14,711 13,865 16,899
11/30/2000 14,573 13,735 15,566
12/31/2000 15,238 14,361 15,643
1/31/2001 13,886 13,088 16,198
2/28/2001 13,446 12,673 14,721
3/31/2001 13,104 12,351 13,788
4/30/2001 13,674 12,888 14,860
5/31/2001 13,398 12,628 14,959
6/30/2001 13,489 12,714 14,595
7/31/2001 13,097 12,344 14,451
8/31/2001 12,017 11,326 13,547
9/30/2001 10,857 10,232 12,453
10/31/2001 10,922 10,294 12,690
11/30/2001 12,083 11,388 13,664
12/31/2001 12,769 12,035 13,783
1/31/2002 13,161 12,404 13,582
2/28/2002 12,556 11,834 13,320
3/31/2002 12,768 12,034 13,821
4/30/2002 12,801 12,065 12,983
5/31/2002 12,670 11,942 12,888
6/30/2002 12,261 11,556 11,970
7/31/2002 10,904 10,277 11,037
8/31/2002 10,904 10,277 11,109
9/30/2002 10,233 9,645 9,902
10/31/2002 9,988 9,413 10,773
11/30/2002 9,742 9,182 11,407
12/31/2002 9,088 8,566 10,737
1/31/2003 9,088 8,566 10,456
2/28/2003 9,023 8,504 10,299
3/31/2003 9,235 8,704 10,399
4/30/2003 9,823 9,258 11,256
5/31/2003 10,673 10,059 11,849
6/30/2003 10,852 10,228 12,000
7/31/2003 10,639 10,028 12,211
8/31/2003 10,917 10,289 12,450
9/30/2003 11,048 10,413 12,317
10/31/2003 12,421 11,707 13,014
11/30/2003 12,912 12,170 13,129
12/31/2003 12,978 12,232 13,817
1/31/2004 12,683 11,954 14,071
2/29/2004 13,452 12,678 14,266
3/31/2004 14,073 13,264 14,051
4/30/2004 12,962 12,216 13,831
5/31/2004 13,273 12,510 14,020
6/30/2004 13,387 12,617 14,293
7/31/2004 12,750 12,017 13,820
8/31/2004 12,896 12,155 13,876
9/30/2004 13,697 12,910 14,026
10/31/2004 13,860 13,063 14,240
11/30/2004 14,481 13,648 14,817
12/31/2004 14,791 13,940 15,321
1/31/2005 14,661 13,818 14,947
2/28/2005 15,642 14,742 15,262
3/31/2005 14,955 14,095 14,992
4/30/2005 14,547 13,710 14,707
5/31/2005 14,955 14,095 15,175
6/30/2005 15,286 14,407 15,197
7/31/2005 16,072 15,148 15,762
8/31/2005 16,236 15,302 15,618
9/30/2005 16,841 15,873 15,745
10/31/2005 16,449 15,503 15,482
11/30/2005 16,710 15,749 16,068
12/31/2005 16,744 15,781 16,073
1/31/2006 17,464 16,460 16,499
2/28/2006 16,858 15,888 16,544
3/31/2006 17,333 16,336 16,750
4/30/2006 18,136 17,093 16,974
5/31/2006 17,514 16,507 16,486
6/30/2006 17,482 16,477 16,508
7/31/2006 17,582 16,571 16,610
8/31/2006 17,450 16,446 17,005
9/30/2006 17,087 16,104 17,444
10/31/2006 17,664 16,649 18,012
11/30/2006 17,714 16,695 18,354
12/31/2006 18,171 17,126 18,612
1/31/2007 18,409 17,350 18,893
2/28/2007 17,730 16,710 18,524
3/31/2007 18,223 17,175 18,731
4/30/2007 19,004 17,912 19,561
5/31/2007 19,871 18,728 20,243
6/30/2007 20,326 19,157 19,907
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION
Class A (Inception 11/27/68)
Net Asset Value/1/ 11.86% 16.26% 10.64% 7.35% --
With Maximum Sales Charge/2/ 5.45 9.54 9.33 6.72 --
Class B (Inception 2/28/97)
Net Asset Value/1/ 11.47 15.44 9.80 6.55 --
With CDSC/3/ 6.47 10.44 9.52 6.55 --
Class C (Inception 9/1/98)
Net Asset Value/1/ 11.48 15.33 9.78 -- 6.07%
With CDSC/3/ 10.48 14.33 9.78 -- 6.07
Class Y (Inception 6/30/99)
Net Asset Value/1/ 11.97 16.65 11.06 -- 4.65
- -----------------------------------------------------------------------
SINCE SINCE
CLASS C CLASS Y
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION/6/ INCEPTION/6/
S&P 500 Index/4/ 6.96% 20.59% 10.71% 7.13% 6.93% 2.79%
Morningstar Large Blend Fund Avg./5/ 7.34 19.50 10.29 6.96 7.34 3.55
- -----------------------------------------------------------------------------------------------
All returns represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those noted. For performance current to the most recent
month-end, visit www.funds.natixis.com. Class Y shares are only available to
certain investors, as outlined in the prospectus.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- -------------------------------------------------------
Common Stocks 99.0 99.0
- -------------------------------------------------------
Short-Term Investments and Other 1.0 1.0
- -------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- -------------------------------------------------------
Schlumberger, Ltd. 6.7 4.9
- -------------------------------------------------------
Companhia Vale do Rio Doce, ADR 6.5 --
- -------------------------------------------------------
Toyota Motor Corp., Sponsored ADR 6.2 7.0
- -------------------------------------------------------
Banco Itau Holding Financeira SA,
ADR 6.0 --
- -------------------------------------------------------
America Movil SAB de CV 5.9 5.1
- -------------------------------------------------------
Petroleo Brasileiro SA, ADR 5.8 --
- -------------------------------------------------------
Baker Hughes, Inc. 5.8 2.6
- -------------------------------------------------------
AT&T, Inc. 5.8 5.3
- -------------------------------------------------------
National-Oilwell Varco, Inc. 5.8 --
- -------------------------------------------------------
Deere & Co. 5.2 5.1
- -------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- -------------------------------------------------------
Oil & Gas Services 18.2 11.5
- -------------------------------------------------------
Telecommunications 11.7 10.4
- -------------------------------------------------------
Diversified Financial Services 9.5 22.0
- -------------------------------------------------------
Food 9.3 --
- -------------------------------------------------------
Oil & Gas 8.9 --
- -------------------------------------------------------
Portfolio holdings and asset allocations will vary.
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio Net Expense Ratio
- -------------------------------------------
A 1.16 1.16
- -------------------------------------------
B 1.91 1.91
- -------------------------------------------
C 1.90 1.90
- -------------------------------------------
Y 0.87 0.87
- -------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/S&P 500 Index is an unmanaged index of U.S. common stocks.
/5/Morningstar Large Blend Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/The since-inception comparative performance figures shown for each Class of
fund shares are calculated as follows: Class C from 9/1/98; and Class Y from
7/1/99.
2
HANSBERGER INTERNATIONAL FUND
PORTFOLIO PROFILE
Objective:
Seeks long-term growth of capital
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Strategy:
Invests in common stocks of small-, mid- and large-cap companies located
outside the United States. Assets are diversified across developed and emerging
markets
- --------------------------------------------------------------------------------
Inception Date:
December 29, 1995
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Managers:
Growth:
Trevor Graham
Barry A. Lockhart
Patrick H. Tan
Thomas R.H. Tibbles
Value:
Ronald Holt
Robert Mazuelos
Lauretta Reeves
- --------------------------------------------------------------------------------
Symbols:
Class A NEFDX
Class B NEDBX
Class C NEDCX
- --------------------------------------------------------------------------------
What You Should Know:
Foreign securities involve risks not associated with domestic securities, such
as currency fluctuations, differing political and economic conditions and
different accounting standards. Growth stocks can be more sensitive to market
movements because their prices are based in part on future expectations. Value
stocks may fall out of favor and underperform the overall market during any
given period.
Management Discussion
- --------------------------------------------------------------------------------
Hansberger International Fund's total return for the six months ended June 30,
2007 was 12.79%, based on the net asset value of Class A shares. By comparison,
the fund's benchmarks, the MSCI EAFE Index and the MSCI ACWI ex-U.S. Index,
returned 11.09% and 12.58%, respectively. The average performance of
Morningstar's Foreign Large Blend category was 10.72%. Neither the fund nor its
benchmarks include U.S. stocks, and the Morningstar category has only limited
exposure to domestic equities.
Two teams of Hansberger's international equity specialists manage this fund.
One focuses on value and the other seeks growth potential. For the first half
of 2007, investments abroad generally provided higher returns than portfolios
limited to U.S. equities.
VALUE SEGMENT SPANNED JAPAN, BRAZIL, BRITAIN AND RUSSIA
Stocks in emerging markets continued to perform well during the first six
months of 2007. Europe was strong, led by Germany. The mining-heavy
Pacific-ex-Japan region also performed well, while the Japanese stock market
rose marginally. However, Japanese game manufacturer Nintendo was one of the
strongest performers, largely thanks to their "Wii" platform. Even though the
fund invests throughout the world (except the U.S.), Hansberger focuses on
individual companies. For example, the other top performers included mining
companies spanning three regions: Britain's BHP Billiton, Brazil's Companhia
Vale do Rio Doce (CVRD), and Russia's Evraz Group. Increasing demand and tight
supply for metals has benefited these companies.
The value segment's weakest performers included two Japanese stocks, both of
which remain in the portfolio. The stock price of Daiei Inc., a Japanese
general merchandise and supermarket retailer, declined during the period after
management announced mid-term sales targets that disappointed investors. Daiei
is restructuring and we believe this, plus the pick-up in consumer confidence
we expect to see in Japan, bode well for the future. Shares of Shionogi & Co.,
a Japanese pharmaceutical company, also declined as sales of the
cholesterol-lowering drug Crestor slumped outside of Japan. We believe Crestor
will become a larger portion of Shionogi's royalties over the medium term, and
we are encouraged by the firm's long-term prospects.
MARKET TRENDS AND SELECTION BENEFIT GROWTH SEGMENT
Strong performance from international growth stocks, which began late in 2006,
continued into the first half of 2007. Good stock selection amplified this
trend. However, currency fluctuations provided a slight head wind during the
period; this segment was underweight in the Australian and New Zealand dollars,
which were strong, and overweight in the Swiss franc, which was weak.
The best performer was Japan's NGK Insulators, which benefited from strong
fundamentals in its core business units: electrical products, diesel
particulate filters, and storage batteries for wind turbines. Another leader
was Denmark's Vestas Wind Systems, a leader in alternative energy that has been
a positive contributor for some time. Demand for Vestas' products is increasing
its visibility and potential revenue growth.
Disappointments included Britain's Northern Rock and Japan's Nidec Corp.
Northern Rock is a key player in the U.K.'s residential mortgage market. We
believe investors over-reacted to a cautious outlook the bank issued for the
remainder of 2007, so we used the resulting price weakness to build our
position in the stock. Nidec, on the other hand, experienced soft fundamentals
in the global market for personal computers and laptops. The company's product
line includes key components of disk drives. For a variety of reasons, we
decided to eliminate Nidec from the portfolio - a process we completed at the
beginning of July 2007.
OUTLOOK FOR INTERNATIONAL INVESTING SEEMS POSITIVE
Consensus growth forecasts for 2007 for Europe are promising, although we are
closely monitoring the interest rate environment and the effect any increase in
rates might have on the equity markets. We believe the climate of international
growth and merger and acquisition activity that benefited the fund in the first
half will continue.
3
HANSBERGER INTERNATIONAL FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares/7/
[CHART]
June 30, 1997 through June 30, 2007
MSCI MSCI
Class A Class A EAFE ACWI ex USA
@ N.A. @ M.S.C. Index Index
Cumulative Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/ Value/5/
- ---------- ---------- ---------- ---------- -----------
6/30/1997 $10,000 $ 9,425 $10,000 $10,000
7/31/1997 10,380 9,783 10,164 10,202
8/31/1997 9,798 9,234 9,407 9,400
9/30/1997 10,334 9,739 9,936 9,908
10/31/1997 9,584 9,033 9,174 9,065
11/30/1997 9,472 8,928 9,083 8,951
12/31/1997 9,647 9,092 9,164 9,054
1/31/1998 9,616 9,063 9,586 9,325
2/28/1998 10,271 9,680 10,203 9,947
3/31/1998 10,689 10,074 10,519 10,291
4/30/1998 10,751 10,132 10,605 10,365
5/31/1998 10,532 9,927 10,556 10,177
6/30/1998 10,314 9,721 10,638 10,139
7/31/1998 10,283 9,692 10,748 10,235
8/31/1998 8,654 8,157 9,419 8,792
9/30/1998 8,573 8,080 9,133 8,606
10/31/1998 9,197 8,668 10,087 9,507
11/30/1998 9,690 9,133 10,607 10,018
12/31/1998 10,033 9,456 11,028 10,363
1/31/1999 10,382 9,785 10,998 10,352
2/28/1999 10,252 9,662 10,738 10,120
3/31/1999 10,670 10,056 11,189 10,609
4/30/1999 11,244 10,597 11,645 11,140
5/31/1999 10,963 10,332 11,048 10,616
6/30/1999 11,605 10,938 11,481 11,104
7/31/1999 11,474 10,814 11,825 11,365
8/31/1999 11,393 10,738 11,871 11,404
9/30/1999 11,131 10,491 11,993 11,481
10/31/1999 11,523 10,861 12,445 11,909
11/30/1999 12,384 11,672 12,880 12,385
12/31/1999 13,807 13,013 14,038 13,566
1/31/2000 13,294 12,529 13,149 12,830
2/29/2000 14,126 13,314 13,505 13,177
3/31/2000 14,167 13,352 14,031 13,672
4/30/2000 13,140 12,384 13,295 12,909
5/31/2000 12,543 11,822 12,973 12,579
6/30/2000 12,911 12,168 13,484 13,115
7/31/2000 12,563 11,841 12,921 12,597
8/31/2000 12,939 12,195 13,036 12,753
9/30/2000 12,452 11,736 12,404 12,045
10/31/2000 11,981 11,292 12,113 11,663
11/30/2000 11,435 10,778 11,661 11,139
12/31/2000 12,120 11,423 12,079 11,520
1/31/2001 12,356 11,645 12,073 11,692
2/28/2001 11,566 10,901 11,169 10,767
3/31/2001 10,810 10,188 10,429 10,006
4/30/2001 11,507 10,845 11,161 10,686
5/31/2001 11,641 10,972 10,776 10,391
6/30/2001 11,545 10,881 10,339 9,993
7/31/2001 11,334 10,682 10,152 9,770
8/31/2001 11,089 10,451 9,897 9,528
9/30/2001 9,931 9,360 8,896 8,517
10/31/2001 10,126 9,544 9,124 8,755
11/30/2001 10,701 10,086 9,461 9,156
12/31/2001 11,033 10,398 9,517 9,274
1/31/2002 10,770 10,151 9,012 8,877
2/28/2002 10,796 10,175 9,076 8,941
3/31/2002 11,440 10,783 9,616 9,463
4/30/2002 11,364 10,710 9,641 9,488
5/31/2002 11,432 10,775 9,772 9,591
6/30/2002 10,737 10,119 9,386 9,177
7/31/2002 9,707 9,149 8,460 8,282
8/31/2002 9,724 9,165 8,443 8,283
9/30/2002 8,524 8,034 7,538 7,405
10/31/2002 8,992 8,475 7,944 7,802
11/30/2002 9,638 9,084 8,306 8,178
12/31/2002 9,221 8,691 8,027 7,913
1/31/2003 8,897 8,386 7,693 7,636
2/28/2003 8,651 8,153 7,517 7,481
3/31/2003 8,540 8,049 7,375 7,336
4/30/2003 9,433 8,891 8,106 8,043
5/31/2003 10,105 9,524 8,605 8,555
6/30/2003 10,334 9,740 8,818 8,792
7/31/2003 10,547 9,941 9,032 9,026
8/31/2003 10,878 10,253 9,252 9,295
9/30/2003 11,023 10,389 9,539 9,555
10/31/2003 11,806 11,127 10,134 10,175
11/30/2003 12,010 11,319 10,361 10,397
12/31/2003 12,818 12,081 11,171 11,190
1/31/2004 13,108 12,354 11,330 11,370
2/29/2004 13,269 12,506 11,593 11,659
3/31/2004 13,142 12,386 11,663 11,731
4/30/2004 12,767 12,033 11,409 11,366
5/31/2004 12,809 12,073 11,444 11,392
6/30/2004 13,022 12,273 11,714 11,649
7/31/2004 12,435 11,720 11,336 11,310
8/31/2004 12,545 11,824 11,388 11,401
9/30/2004 12,869 12,129 11,688 11,767
10/31/2004 13,244 12,482 12,087 12,176
11/30/2004 14,017 13,211 12,916 13,022
12/31/2004 14,561 13,724 13,483 13,581
1/31/2005 14,246 13,427 13,237 13,347
2/28/2005 15,029 14,164 13,812 14,005
3/31/2005 14,612 13,772 13,470 13,625
4/30/2005 14,272 13,451 13,169 13,289
5/31/2005 14,323 13,500 13,189 13,372
6/30/2005 14,476 13,644 13,369 13,624
7/31/2005 15,029 14,165 13,780 14,127
8/31/2005 15,497 14,606 14,132 14,488
9/30/2005 15,914 14,999 14,764 15,236
10/31/2005 15,471 14,582 14,334 14,681
11/30/2005 15,939 15,022 14,688 15,175
12/31/2005 16,908 15,935 15,373 15,905
1/31/2006 18,140 17,097 16,318 17,014
2/28/2006 17,825 16,800 16,284 16,964
3/31/2006 18,386 17,329 16,829 17,457
4/30/2006 19,151 18,050 17,645 18,357
5/31/2006 18,368 17,311 16,981 17,511
6/30/2006 18,250 17,201 16,987 17,494
7/31/2006 18,458 17,397 17,158 17,673
8/31/2006 18,953 17,863 17,634 18,173
9/30/2006 19,091 17,993 17,665 18,185
10/31/2006 19,794 18,656 18,353 18,926
11/30/2006 20,437 19,262 18,907 19,613
12/31/2006 20,974 19,768 19,502 20,224
1/31/2007 21,239 20,017 19,635 20,300
2/28/2007 21,200 19,981 19,796 20,424
3/31/2007 21,777 20,525 20,310 20,999
4/30/2007 22,587 21,288 21,231 21,973
5/31/2007 23,369 22,025 21,632 22,575
6/30/2007 23,661 22,300 21,665 22,767
Average Annual Total Returns -- June 30, 2007
6 MONTHS 1 YEAR 5 YEARS 10 YEARS
CLASS A (Inception 12/29/95)
Net Asset Value/1/ 12.79% 29.64% 17.13% 9.00%
With Maximum Sales Charge/2/ 6.31 22.20 15.75 8.35
CLASS B (Inception 12/29/95)
Net Asset Value/1/ 12.40 28.69 16.25 8.20
With CDSC/3/ 7.40 23.69 16.03 8.20
CLASS C (Inception 12/29/95)
Net Asset Value/1/ 12.36 28.64 16.26 8.19
With CDSC/3/ 11.36 27.64 16.26 8.19
- -----------------------------------------------------------------------------
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS
MSCI EAFE Index/4/ 11.09% 27.54% 18.21% 8.04%
MSCI ACWI ex-U.S. Index/5/ 12.58 30.15 19.93 8.58
Morningstar Foreign Large Blend Fund Avg./6/ 10.72 26.76 16.02 7.15
- -----------------------------------------------------------------------------
All results represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ---------------------------------------------------------------
Common Stocks 99.4 99.1
- ---------------------------------------------------------------
Short-Term Investments and Other 0.6 0.9
- ---------------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ---------------------------------------------------------------
Novartis AG 1.8 1.7
- ---------------------------------------------------------------
UniCredito Italiano SpA 1.8 1.9
- ---------------------------------------------------------------
Saipem SpA 1.6 1.6
- ---------------------------------------------------------------
Banco Santander Central Hispano SA 1.6 1.1
- ---------------------------------------------------------------
Adidas AG 1.4 1.0
- ---------------------------------------------------------------
Petroleo Brasileiro SA, ADR 1.4 1.2
- ---------------------------------------------------------------
British Sky Broadcasting Group PLC 1.4 1.4
- ---------------------------------------------------------------
NGK Insulators, Ltd. 1.2 --
- ---------------------------------------------------------------
Nestle SA 1.2 1.2
- ---------------------------------------------------------------
Infosys Technologies, Ltd., Sponsored ADR 1.1 0.7
- ---------------------------------------------------------------
% of Net Assets as of
FIVE LARGEST COUNTRIES 6/30/07 12/31/06
- ---------------------------------------------------------------
United Kingdom 16.0 17.0
- ---------------------------------------------------------------
Japan 15.7 18.3
- ---------------------------------------------------------------
France 9.5 8.7
- ---------------------------------------------------------------
Switzerland 9.4 10.4
- ---------------------------------------------------------------
Germany 5.8 3.2
- ---------------------------------------------------------------
Portfolio holdings and asset allocations will vary.
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Share Class Gross Expense Ratio Net Expense Ratio
- -------------------------------------------------
A 1.50 1.50
- -------------------------------------------------
B 2.25 2.25
- -------------------------------------------------
C 2.25 2.25
- -------------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/Morgan Stanley Capital International Europe Australasia and Far East Index
(MSCI EAFE Index) is an unmanaged index designed to measure developed market
equity performance, excluding the United States and Canada.
/5/Morgan Stanley Capital International All Countries World Index ex-U.S. (MSCI
ACWI ex-U.S. Index) is an unmanaged index designed to measure equity market
performance in developed and emerging markets, excluding the United States.
/6/Morningstar Foreign Large Blend Fund Average is the average performance
without sales charges of funds with similar investment objectives, as
calculated by Morningstar, Inc.
/7/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
4
HARRIS ASSOCIATES FOCUSED VALUE FUND
PORTFOLIO PROFILE
Objective:
Seeks long-term capital appreciation
- --------------------------------------------------------------------------------
Strategy:
Focuses on 25 to 30 stocks of mid- to large-cap U.S. companies
- --------------------------------------------------------------------------------
Inception Date:
March 15, 2001
- --------------------------------------------------------------------------------
Managers:
Robert M. Levy
Michael Mangan
- --------------------------------------------------------------------------------
Symbols:
Class A NRSAX
Class B NRSBX
Class C NRSCX
- --------------------------------------------------------------------------------
What You Should Know:
The fund invests in a small number of securities, which may result in greater
volatility than more diversified funds. Value stocks may fall out of favor with
investors and underperform the overall market during any given period.
Management Discussion
- --------------------------------------------------------------------------------
Common stocks extended their 2006 rally into February of 2007 and then stumbled
over deteriorating conditions in the subprime mortgage market. But a rising
tide of corporate earnings and waves of mergers and buyouts soon led prices
higher. Near the end of the period, renewed subprime worries and questions
about higher interest rates caused equity prices to slide back modestly. After
lackluster first-quarter results, the fund achieved strong gains from April
through June.
Harris Associates Focused Value Fund's total return for the six months ended
June 30, 2007 was 7.24%, based on the net asset value of the fund's Class A
shares. Performance surpassed the fund's benchmark, the S&P 500 Index, which
returned 6.96 % for the period, and slightly lagged the 7.34% average return on
Morningstar's Large Blend category.
BUYOUTS, MEDIA AND TECHNOLOGY DROVE SOLID RESULTS
Our valuation-based investment approach was rewarded when three fund holdings
became targets of buyouts at premium prices. CDW, a distributor of computer
equipment, was acquired by private investors, while another private group bid
for Bausch and Lomb, makers of eye-care products. As June 2007 drew to a close,
Netherlands-based Basell Polyolefins was in the process of acquiring Huntsman
Corp., a stock we had recently added to the fund's portfolio.
Shares of Discovery Holding Co., operators of the Discovery Channel, enjoyed a
strong gain, as more investors began to recognize that the attractive valuation
of the stock had been obscured by the company's complex corporate structure.
Improved operating results and the planned buyback of more than a quarter of
its outstanding shares helped make National Semiconductor another strong gainer
during the period. Shares of Intel, the largest semiconductor maker, rebounded
from last year's slump as it improved its competitive stance and quickly
regained market share.
CONSUMER, BUILDING AND FINANCIAL STOCKS CUT INTO RETURNS
Disappointing earnings led to a sharp drop in the share price of Timberland,
makers and retailers of shoes and outdoor wear. We are retaining our position
as the company works to improve operations while revamping its offerings to
reduce fashion sensitivity. Liz Claiborne's shares declined as investors
assessed moves by a new CEO aimed at focusing on the most profitable
merchandise lines while eliminating unprofitable brands. Some Claiborne
executives have been expressing confidence in the company's future by
purchasing shares, and the stock recovered some ground late in the period.
Homebuilder D.R. Horton felt the downward trend in housing. Shares are now
modestly valued by historic standards. We believe the decline in Horton's
shares reflects current difficulties in the housing market rather than any
fundamental problems. Sovereign Bancorp's shares also fell, as Spain's Banco
Santander held off exercising its option to buy this regional bank, which is
centered in the northeast United States. Investors feared that Banco Santander
may have shifted its attention to other possible acquisitions. Weak performance
in the regional bank sector as a whole also influenced Sovereign's decline.
FOCUSING ON INVESTMENT OPPORTUNITIES, NOT BROAD TRENDS
In spite of a slowdown in consumer spending that may be related to slumping
home sales, the economy is moving ahead. Consumer stocks have lagged for some
time, so little further impact seems probable. Nor do we think that subprime
woes will affect wide swaths of the economy. Meanwhile, investor uncertainty as
to the economy's direction has expanded the number of attractively valued
investment candidates. There is some risk that rising interest rates and
tighter lending standards could stifle the vigorous capital market activity
that has been a key element of the market's rise. However, we believe our
current list of holdings, chosen for their attractive current valuations and
long-term potential, appears well positioned in that environment.
5
HARRIS ASSOCIATES FOCUSED VALUE FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares/7/
[CHART]
March 15, 2001 (inception) through June 30, 2007
Class A Class A S&P 500
@ N.A. @ M.S.C. Index
Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/
- ---------- ---------- ---------- ----------
3/15/2001 $10,000 $ 9,425 $10,000
3/31/2001 10,090 9,510 10,000
4/30/2001 10,420 9,821 10,777
5/31/2001 10,690 10,075 10,849
6/30/2001 10,990 10,358 10,585
7/31/2001 11,310 10,660 10,481
8/31/2001 10,870 10,245 9,825
9/30/2001 10,240 9,651 9,032
10/31/2001 10,000 9,425 9,204
11/30/2001 10,680 10,066 9,910
12/31/2001 10,960 10,330 9,997
1/31/2002 10,890 10,264 9,851
2/28/2002 10,600 9,990 9,661
3/31/2002 10,910 10,282 10,024
4/30/2002 10,859 10,235 9,416
5/31/2002 10,929 10,300 9,347
6/30/2002 10,079 9,499 8,681
7/31/2002 9,619 9,066 8,005
8/31/2002 9,959 9,386 8,057
9/30/2002 8,568 8,076 7,181
10/31/2002 8,968 8,453 7,813
11/30/2002 9,468 8,924 8,273
12/31/2002 9,238 8,707 7,787
1/31/2003 9,008 8,490 7,583
2/28/2003 8,888 8,377 7,469
3/31/2003 8,988 8,471 7,542
4/30/2003 9,507 8,960 8,163
5/31/2003 10,117 9,535 8,593
6/30/2003 10,336 9,742 8,703
7/31/2003 10,256 9,667 8,856
8/31/2003 10,676 10,062 9,029
9/30/2003 10,556 9,949 8,933
10/31/2003 11,196 10,552 9,439
11/30/2003 11,687 11,015 9,522
12/31/2003 11,787 11,109 10,021
1/31/2004 12,097 11,401 10,205
2/29/2004 12,177 11,477 10,347
3/31/2004 11,937 11,251 10,191
4/30/2004 11,777 11,100 10,031
5/31/2004 12,037 11,345 10,168
6/30/2004 11,907 11,223 10,366
7/31/2004 11,677 11,006 10,023
8/31/2004 11,627 10,959 10,064
9/30/2004 11,938 11,251 10,173
10/31/2004 12,148 11,449 10,328
11/30/2004 12,648 11,921 10,746
12/31/2004 13,058 12,307 11,111
1/31/2005 12,608 11,883 10,841
2/28/2005 12,987 12,240 11,069
3/31/2005 12,817 12,080 10,873
4/30/2005 12,597 11,872 10,667
5/31/2005 13,046 12,296 11,006
6/30/2005 13,415 12,644 11,022
7/31/2005 13,876 13,078 11,431
8/31/2005 13,856 13,059 11,327
9/30/2005 13,607 12,824 11,419
10/31/2005 13,156 12,400 11,229
11/30/2005 13,626 12,843 11,653
12/31/2005 13,806 13,012 11,657
1/31/2006 13,966 13,163 11,966
2/28/2006 14,023 13,217 11,998
3/31/2006 14,103 13,292 12,148
4/30/2006 14,366 13,540 12,311
5/31/2006 13,874 13,076 11,957
6/30/2006 13,795 13,002 11,973
7/31/2006 13,653 12,868 12,047
8/31/2006 13,983 13,179 12,333
9/30/2006 14,444 13,613 12,651
10/31/2006 15,010 14,147 13,063
11/30/2006 15,422 14,536 13,312
12/31/2006 15,560 14,665 13,498
1/31/2007 15,815 14,906 13,703
2/28/2007 15,465 14,576 13,435
3/31/2007 15,263 14,385 13,585
4/30/2007 15,976 15,057 14,187
5/31/2007 16,742 15,780 14,682
6/30/2007 16,684 15,725 14,438
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR 5 YEARS INCEPTION
CLASS A (Inception 3/15/01)
Net Asset Value/1/ 7.24% 20.97% 10.62% 8.48%
With Maximum Sales Charge/2/ 1.03 14.04 9.32 7.47
CLASS B (Inception 3/15/01)
Net Asset Value/1/ 6.84 20.01 9.79 7.67
With CDSC/3/ 1.84 15.01 9.51 7.67
CLASS C (Inception 3/15/01)
Net Asset Value/1/ 6.94 20.12 9.78 7.68
With CDSC/3/ 5.94 19.12 9.78 7.68
- -------------------------------------------------------------------------
SINCE
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION/6/
S&P 500 Index/4/ 6.96% 20.59% 10.71% 6.05%
Morningstar Large Blend Fund Avg./5/ 7.34 19.50 10.29 6.06
All returns represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- --------------------------------------------------------
Common Stocks 99.2 100.2
- --------------------------------------------------------
Short-Term Investments and Other 0.8 -0.2
- --------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- --------------------------------------------------------
Intel Corp. 6.6 5.0
- --------------------------------------------------------
National Semiconductor Corp. 6.3 4.7
- --------------------------------------------------------
Bausch & Lomb, Inc. 5.9 3.9
- --------------------------------------------------------
Discovery Holding Co. 5.7 3.5
- --------------------------------------------------------
Virgin Media, Inc. 4.9 --
- --------------------------------------------------------
Yum! Brands, Inc. 4.8 4.5
- --------------------------------------------------------
Timberland Co. 4.7 5.0
- --------------------------------------------------------
McDonald's Corp. 4.7 4.5
- --------------------------------------------------------
Cablevision Systems Corp., Class A 3.8 3.2
- --------------------------------------------------------
Conseco, Inc. 3.8 3.2
- --------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- --------------------------------------------------------
Semiconductors 18.9 11.9
- --------------------------------------------------------
Media 15.1 14.1
- --------------------------------------------------------
Restaurants 9.4 9.0
- --------------------------------------------------------
Health Care -- Services 8.5 2.3
- --------------------------------------------------------
Telecommunications 6.2 --
- --------------------------------------------------------
Portfolio holdings and asset allocations will vary.
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/S&P 500 Index is an unmanaged index of U.S. common stocks.
/5/Morningstar Large Blend Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/The since-inception comparative performance figures shown are calculated
from 4/1/01.
/7/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
6
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio Net Expense Ratio
- -------------------------------------------
A 1.46 1.46
- -------------------------------------------
B 2.21 2.21
- -------------------------------------------
C 2.22 2.22
- -------------------------------------------
HARRIS ASSOCIATES LARGE CAP VALUE FUND
PORTFOLIO PROFILE
Objective:
Seeks opportunities for long-term capital growth and income
- --------------------------------------------------------------------------------
Strategy:
Invests primarily in common stock of large- and mid-cap companies in any
industry
- --------------------------------------------------------------------------------
Inception Date:
May 6, 1931
- --------------------------------------------------------------------------------
Managers:
Edward S. Loeb
Michael J. Mangan
Diane Mustain
- --------------------------------------------------------------------------------
Symbols:
Class A NEFOX
Class B NEGBX
Class C NECOX
Class Y NEOYX
- --------------------------------------------------------------------------------
What You Should Know:
Value stocks may fall out of favor with investors and underperform the overall
market during any given period.
Management Discussion
- --------------------------------------------------------------------------------
After gaining ground early in 2007, stocks retreated in February. Rising
foreclosure rates on subprime mortgages and concerns about a slowdown in
corporate earnings growth caused the equity markets to stall. However, strong
profits reported by some companies and an upsurge in merger and buyout activity
sent the market up again. A growing preference among investors for
higher-quality, attractively valued, large-cap companies dovetailed favorably
with the fund's established investment approach.
For the six months ended June 30, 2007, Class A shares of Harris Associates
Large Cap Value Fund provided a total return of 6.10% at net asset value. These
results slightly lagged the fund's benchmark for the period, as the Russell
1000 Value Index returned 6.23%. The average return on the funds in
Morningstar's Large Blend category was 7.34%.
TECHNOLOGY, RAILROAD AND CONSUMER HOLDINGS LED RETURNS
The six months ended June 30, 2007 rewarded our decision to build up holdings
of large-cap technology companies while valuations remained under pressure.
Shares of computer maker Dell recovered after founder Michael Dell resumed the
CEO slot and began to address problems at the firm. Intel, the dominant maker
of microprocessors, regained market share by updating its product line and
fending off a competitive challenge. Texas Instruments also moved higher as it
focused on the strong market for chips that are essential to cell phones and
other wireless devices.
Union Pacific benefited from vigorous demand for coal hauling, stemming in
large part from utilities that can switch to coal when oil prices move up.
Union Pacific's general freight business is also strong, with rising fuel costs
forcing truckers to raise rates.
McDonald's continued its resurgence, driven by robust year-over-year growth in
restaurant revenues, revised menus and a renewed emphasis on service and
cleanliness. We took some profits in healthcare during the period, selling both
Schering-Plough and Abbott Laboratories.
HOMEBUILDERS, HARLEY-DAVIDSON LED DECLINERS
Disappointments during the period included homebuilders Lennar and Pulte Homes,
two small portfolio positions that declined in value in response to overall
weakness in the housing sector. In retrospect, our investment in builders
appears to have been premature, but we think conditions will stabilize over the
next year or two. Harley-Davidson's shares fell amid concerns that consumers
might cut back on discretionary spending. Harley also lost output during a
strike at one of its manufacturing plants. The absence of energy shares from
the portfolio also held back returns; energy is heavily weighted in the fund's
benchmark and it performed well during the period. We remain skeptical that
oil's current elevated price levels can be sustained.
Washington Mutual, a long-time holding, fell modestly in a generally weak
banking sector, even though the company's exposure to subprime risk is well
contained and its basic banking business continues to thrive.
LARGE-CAP VALUE ISSUES APPEAR TO BE GAINING GROUND
Market-rattling events over the past year - a slump in emerging markets,
problems among private equity funds and fear that turmoil among subprime
mortgages might contaminate the broader economy by causing interest rates to
rise - have reminded investors that volatility is part of investing. Although
we share these concerns, we feel positive about the portfolio's positioning in
this environment. We are impressed with the financial strength and strong cash
flows of the companies we own. We also expect more issuers to put capital to
work through share buyback programs, a trend that has benefited fund holdings
like Home Depot, among others. We have been finding what we believe are
attractive opportunities among consumer discretionary stocks that appear to
offer solid growth potential and have shareholder-friendly management teams. In
general, we believe the market's renewed sensitivity to risk and its bias
toward quality may continue to favor the kind of companies we focus on for this
fund.
7
HARRIS ASSOCIATES LARGE CAP VALUE FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares/7/
[CHART]
June 30, 1997 through June 30, 2007
Class A Class A Russell 1000
@ N.A. @ M.S.C Value Index
Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/
- ---------- ---------- -------------- ----------------
6/30/1997 $10,000 $ 9,425 $10,000
7/31/1997 10,630 10,019 10,752
8/31/1997 10,327 9,733 10,369
9/30/1997 10,964 10,334 10,996
10/31/1997 10,484 9,881 10,689
11/30/1997 10,936 10,307 11,161
12/31/1997 11,172 10,530 11,487
1/31/1998 11,238 10,592 11,325
2/28/1998 12,140 11,442 12,087
3/31/1998 12,825 12,088 12,826
4/30/1998 12,891 12,149 12,912
5/31/1998 12,715 11,984 12,721
6/30/1998 13,247 12,485 12,884
7/31/1998 13,043 12,293 12,656
8/31/1998 11,071 10,434 10,773
9/30/1998 11,622 10,954 11,391
10/31/1998 12,461 11,745 12,273
11/30/1998 13,027 12,278 12,845
12/31/1998 13,845 13,049 13,282
1/31/1999 14,246 13,427 13,389
2/28/1999 13,904 13,105 13,200
3/31/1999 14,096 13,286 13,473
4/30/1999 14,932 14,074 14,731
5/31/1999 14,865 14,010 14,569
6/30/1999 15,329 14,447 14,992
7/31/1999 14,877 14,021 14,553
8/31/1999 14,676 13,832 14,013
9/30/1999 14,081 13,272 13,523
10/31/1999 14,646 13,804 14,302
11/30/1999 14,689 13,844 14,190
12/31/1999 15,156 14,284 14,258
1/31/2000 14,365 13,539 13,793
2/29/2000 13,880 13,082 12,768
3/31/2000 15,008 14,145 14,326
4/30/2000 14,760 13,911 14,160
5/31/2000 14,305 13,483 14,309
6/30/2000 14,493 13,659 13,655
7/31/2000 14,404 13,576 13,826
8/31/2000 15,371 14,487 14,595
9/30/2000 14,668 13,825 14,729
10/31/2000 14,709 13,864 15,091
11/30/2000 13,833 13,037 14,531
12/31/2000 14,047 13,240 15,259
1/31/2001 14,057 13,249 15,317
2/28/2001 13,222 12,462 14,891
3/31/2001 12,479 11,761 14,365
4/30/2001 13,497 12,721 15,070
5/31/2001 13,518 12,740 15,408
6/30/2001 13,048 12,298 15,066
7/31/2001 12,601 11,876 15,034
8/31/2001 11,827 11,147 14,432
9/30/2001 10,840 10,216 13,416
10/31/2001 11,227 10,581 13,301
11/30/2001 12,021 11,330 14,074
12/31/2001 12,001 11,311 14,406
1/31/2002 11,940 11,253 14,295
2/28/2002 11,623 10,955 14,318
3/31/2002 11,940 11,253 14,995
4/30/2002 11,603 10,936 14,481
5/31/2002 11,552 10,888 14,553
6/30/2002 10,859 10,234 13,718
7/31/2002 10,166 9,581 12,443
8/31/2002 10,420 9,821 12,537
9/30/2002 9,014 8,496 11,143
10/31/2002 9,351 8,813 11,968
11/30/2002 9,982 9,408 12,722
12/31/2002 9,595 9,043 12,169
1/31/2003 9,360 8,822 11,875
2/28/2003 9,065 8,543 11,558
3/31/2003 9,177 8,649 11,578
4/30/2003 10,042 9,465 12,597
5/31/2003 10,797 10,176 13,410
6/30/2003 11,031 10,397 13,577
7/31/2003 10,929 10,301 13,780
8/31/2003 11,297 10,647 13,994
9/30/2003 11,053 10,417 13,858
10/31/2003 11,572 10,907 14,706
11/30/2003 11,979 11,291 14,905
12/31/2003 12,479 11,761 15,824
1/31/2004 12,571 11,848 16,102
2/29/2004 12,867 12,127 16,447
3/31/2004 12,674 11,945 16,303
4/30/2004 12,674 11,945 15,905
5/31/2004 12,684 11,955 16,067
6/30/2004 12,868 12,128 16,447
7/31/2004 12,399 11,686 16,215
8/31/2004 12,460 11,744 16,446
9/30/2004 12,460 11,744 16,701
10/31/2004 12,726 11,994 16,978
11/30/2004 13,072 12,320 17,837
12/31/2004 13,622 12,839 18,434
1/31/2005 13,356 12,588 18,107
2/28/2005 13,306 12,541 18,707
3/31/2005 13,143 12,388 18,450
4/30/2005 12,878 12,137 18,120
5/31/2005 13,193 12,435 18,556
6/30/2005 13,096 12,343 18,759
7/31/2005 13,513 12,736 19,302
8/31/2005 13,300 12,535 19,218
9/30/2005 13,259 12,496 19,488
10/31/2005 13,085 12,333 18,993
11/30/2005 13,625 12,842 19,617
12/31/2005 13,595 12,814 19,734
1/31/2006 13,616 12,833 20,501
2/28/2006 13,768 12,977 20,626
3/31/2006 13,972 13,169 20,905
4/30/2006 14,053 13,245 21,437
5/31/2006 13,768 12,976 20,895
6/30/2006 13,721 12,932 21,029
7/31/2006 13,609 12,826 21,540
8/31/2006 13,996 13,192 21,900
9/30/2006 14,692 13,847 22,337
10/31/2006 15,203 14,329 23,068
11/30/2006 15,428 14,541 23,595
12/31/2006 15,837 14,927 24,124
1/31/2007 16,174 15,244 24,433
2/28/2007 15,694 14,792 24,052
3/31/2007 15,633 14,734 24,424
4/30/2007 16,441 15,496 25,326
5/31/2007 17,044 16,064 26,240
6/30/2007 16,804 15,838 25,627
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION
CLASS A (Inception 5/6/31)
Net Asset Value/1/ 6.10% 22.46% 9.12% 5.32% --
With Maximum Sales Charge/2/ -0.03 15.41 7.84 4.70 --
CLASS B (Inception 9/13/93)
Net Asset Value/1/ 5.73 21.62 8.30 4.54 --
With CDSC/3/ 0.73 16.62 8.01 4.54 --
CLASS C (Inception 5/1/95)
Net Asset Value/1/ 5.74 21.65 8.30 4.53 --
With CDSC/3/ 4.74 20.65 8.30 4.53 --
CLASS Y (Inception 11/18/98)
Net Asset Value/1/ 6.34 23.10 9.55 -- 3.63%
- -----------------------------------------------------------------------------------
SINCE CLASS Y
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION/6/
Russell 1000 Value Index/4/ 6.23% 21.87% 13.31% 9.87% 8.38%
Morningstar Large Blend Fund Avg./5/ 7.34 19.50 10.29 6.96 5.29
All returns represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com. Class Y shares are only available to
certain investors, as outlined in the prospectus.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ----------------------------------------------------
Common Stocks 98.6 97.8
- ----------------------------------------------------
Short-Term Investments and
Other 1.4 2.2
- ----------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ----------------------------------------------------
Intel Corp. 6.0 4.0
- ----------------------------------------------------
Union Pacific Corp. 4.7 4.2
- ----------------------------------------------------
Dell, Inc. 4.5 4.3
- ----------------------------------------------------
Viacom, Inc., Class B 4.4 4.3
- ----------------------------------------------------
McDonald's Corp. 4.3 5.3
- ----------------------------------------------------
Time Warner, Inc. 4.1 4.4
- ----------------------------------------------------
Hewlett-Packard Co. 4.0 4.0
- ----------------------------------------------------
Sprint Nextel Corp. 4.0 1.0
- ----------------------------------------------------
Morgan Stanley 3.9 4.1
- ----------------------------------------------------
JPMorgan Chase & Co. 3.6 3.8
- ----------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ----------------------------------------------------
Diversified Financial Services 14.3 13.8
- ----------------------------------------------------
Media 11.7 12.8
- ----------------------------------------------------
Computers 10.2 10.4
- ----------------------------------------------------
Semiconductors 8.6 6.1
- ----------------------------------------------------
Retail 6.9 6.9
- ----------------------------------------------------
Portfolio holdings and asset allocations will vary.
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio/8/ Net Expense Ratio/9/
- -------------------------------------------------
A 1.30 1.30
- -------------------------------------------------
B 2.07 2.05
- -------------------------------------------------
C 2.06 2.05
- -------------------------------------------------
Y 0.91 0.91
- -------------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/Russell 1000 Value Index is an unmanaged index that measures the performance
of those Russell 1000 companies with lower price-to-book ratios and lower
forecasted growth values.
/5/Morningstar Large Blend Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/The since-inception comparative performance figures shown for Class Y are
calculated from 12/1/98.
/7/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
/8/Before waivers and reimbursements.
/9/After waivers and reimbursements. Expense reductions are contractual and are
set to expire on 4/30/08.
8
NATIXIS U.S. DIVERSIFIED PORTFOLIO
PORTFOLIO PROFILE
Objective:
Seeks long-term growth of capital
- --------------------------------------------------------------------------------
Strategy:
Features growth and value investments through a diversified portfolio of
complementary equity investment disciplines provided by specialized money
managers
- --------------------------------------------------------------------------------
Inception Date:
July 7, 1994
- --------------------------------------------------------------------------------
Subadvisors:
BlackRock Investment Management, LLC
Harris Associates, L.P.
Loomis, Sayles & Company, L.P.
- --------------------------------------------------------------------------------
Symbols:
Class A NEFSX
Class B NESBX
Class C NECCX
Class Y NESYX
- --------------------------------------------------------------------------------
What You Should Know:
Growth stocks can be more sensitive to market movements because their values
are based on future expectations. Value stocks may fall out of favor with
investors and underperform the overall market. Small-cap stocks carry special
risks, including narrower markets, limited financial and management resources,
less liquidity and greater volatility.
Management Discussion
- --------------------------------------------------------------------------------
Despite rising oil prices and interest rates, U.S. equity markets gained ground
over the first half of 2007, with large-cap stocks taking the lead over
small-cap stocks and growth doing slightly better than value. For the six
months ended June 30, 2007, Natixis U.S. Diversified Portfolio (formerly IXIS
U.S. Diversified Portfolio) returned 11.25% based on net asset value of Class A
shares. This return was more than the 6.96% return of the S&P 500 Index but
less than the 11.98% return of the S&P MidCap 400 Index. The portfolio's return
outpaced the 9.40% return on the Dow Jones Wilshire 4500 Index, but fell short
of the 12.33% average return on Morningstar's Mid-Cap Growth category.
Each of the portfolio's four segments is managed using a different discipline,
providing investors with exposure to a wide spectrum of large-, medium- and
small-cap stocks and using both growth and value investment styles. BlackRock's
segment seeks long-term growth of capital in companies of any size, with an
emphasis on those with capitalizations greater than $2 billion. The segment
managed by Harris Associates invests primarily in common stocks of large- and
mid-cap companies that the manager believes are trading at a substantial
discount to their "true business value." Loomis Sayles manages two segments.
One invests in mid-cap growth stocks and the other focuses on small-cap value
stocks.
BLACKROCK WAS DIVERSIFIED IN A VARIETY OF ECONOMIC SECTORS
For the first half of 2007, this segment's results were positive, primarily as
a result of good stock selection in energy - this despite its underweight
position in this strong sector. Thanks to strong performance from individual
stocks, healthcare was a net positive for this segment, even though the
position itself was relatively light and included a few disappointments. A
relatively large position in consumer discretionary stocks was a negative,
although the segment's emphasis on information technology and materials was
positive. Top-performing individual stocks included National Oilwell Varco,
Owens Corning and Amgen. Varco provides equipment and services for oil and gas
drilling companies worldwide. Originally a glass maker, Owens Corning today is
active in display technologies, telecommunications, environmental technologies
and life sciences. Amgen develops and markets human therapeutics based on
cellular and molecular biology worldwide. Although it performed well while it
was in the segment, BlackRock eliminated the position before diminished growth
prospects caused the stock to decline. Shares of specialty restaurant and
coffee retailer Starbucks Corporation fell when the company announced
lackluster earnings, but the position remains in this segment because BlackRock
is optimistic about the company's long-term growth potential. Two leading
healthcare companies, Genentech and Abbott Laboratories, were the primary
detractors from this segment's return for the period. BlackRock continues to
like Genentech's product profile, particularly in the oncology market, and sees
growth prospects from Abbott's combination of new products and restructured
operations. Both stocks remain in the segment.
HARRIS ASSOCIATES SOUGHT DOMINANT BUSINESSES SELLING AT A DISCOUNT
This segment emphasized consumer-oriented sectors, such as technology and
financials. It had less exposure to utilities and materials. Consumer-related
holdings, particularly housing stocks, and a lack of exposure to the energy
sector, were negatives. Although the sector performed well in the first half of
2007, Harris Associates believes oil prices may retreat, so they have
downplayed energy stocks. Performance was buoyed by good stock selection in
industrials, financials and technology. Union Pacific Corporation, Intel
Corporation and McDonald's were the most positive contributors to return. Union
Pacific's strength came from an operational turnaround, improved revenue growth
from vigorous demand for coal hauling, and a strong freight business. Intel
reported better-than-expected second quarter earnings because of strong
microprocessor momentum, improved costs and better pricing. McDonald's
completed the fourth year of a turnaround in the United States, with 48
consecutive months of positive same-store sales. Going forward, Harris
Associates believes McDonald's should benefit from an expansion of
company-owned restaurants in Europe. Harley-Davidson, Pulte Homes and
9
NATIXIS U.S. DIVERSIFIED PORTFOLIO
Management Discussion
- --------------------------------------------------------------------------------
Lennar Corporation were this segment's weakest stocks. Harley-Davidson declined
on concerns that consumers might cut back on discretionary spending and because
of a strike at one of its manufacturing plants. Both Pulte Homes and Lennar
were hurt by continued weakness in the U.S. housing market. All three companies
remain in the segment because Harris Associates believes they are attractive.
LOOMIS SAYLES' MID CAP SEGMENT SOUGHT COMPANIES WITH SUPERIOR EARNINGS GROWTH
Stock selection was the key driver of performance, led by the consumer
discretionary, utilities and materials sectors. Among consumer companies,
retailers that posted higher-than-expected earnings were rewarded. Guess? Inc.,
an apparel company, and GameStop Corporation, an electronics store, were in
this category. Returns in the utilities area came primarily from
telecommunications companies, including Millicom International Cellular
(serving some of the world's emerging markets), NII Holdings (selected Latin
American markets) and Leap Wireless International (with U.S. operations
primarily under the Cricket brand). Precision Castparts, one of this segment's
largest holdings, and Allegheny Technologies both benefited from an upturn in
the commercial aerospace industry. A leading internet advertising firm,
aQuantive rose after it accepted an attractive buyout offer from Microsoft. NRG
Energy, an independent power producer with an active stock repurchase program,
and IntercontinentalExchange, an internet-based global securities exchange,
were also strong contributors. However, investments in the healthcare,
technology and integrated oil industries fell short of expectations. Stocks
that held back results included Hutchinson Telecommunications, Akamai
Technologies and Greenhill & Company. Hutchinson declined after announcing a
deal to sell some of its telecommunications assets in India. Akamai, which
expedites the distribution of audio and video content on the internet,
performed well for the segment in 2006, but growth decelerated in 2007.
Greenhill, an investment banking boutique specializing in private equity
investments, experienced a downturn. All three stocks were sold from this
segment.
STOCK SELECTION BENEFITED LOOMIS SAYLES' SMALL CAP SEGMENT
Good stock selection aided by merger and acquisition activity benefited this
segment. The strongest sectors were consumer discretionary, technology and
materials. Top performers within the consumer discretionary sector included
Winn-Dixie Stores, a regional supermarket chain with strong earnings, effective
cost controls and a store upgrade program; and Fossil, Inc., an international
manufacturer of watches, accessories and clothing. General Cable Corporation, a
supplier of wire and cable products was also a top stock, benefiting from
increased infrastructure spending by major corporations. Avnet, which
distributes computer products and semiconductors, was also among the segment's
top performers based on strong earnings and an active acquisition strategy.
Healthcare selections did not keep pace with the second-quarter upturn in this
sector. One of this segment's weakest stocks was Omnicare, a specialty drug
distributor that declined on Medicare reimbursement concerns. The stock was
sold. Selections in autos and transportation were held back by Winnebago
Industries, a recreational vehicle manufacturer that slid on declining consumer
confidence and high gasoline prices. The stock remains in the segment because
Loomis believes Winnebago's new product line and lean dealer inventories could
result in earnings growth if consumer confidence improves. Despite good
results, shares of Developers Diversified Realty Corp. declined in value during
the first half, along with real estate investment trusts (REITs) generally,
reflecting rising interest rates and high valuations; the stock remains in the
segment.
10
NATIXIS U.S. DIVERSIFIED PORTFOLIO
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares
[CHART]
June 30, 1997 through June 30, 2007
Class A Class A S&P 500 S&P 400 Wilshire
@ N.A. @ M.S.C. Index Index 4500 Index
Cumulative Cumulative Cumulative Cumulative Monthly
Month End Value/1/ Value/2/ Value/5/ Value/4/ Performance/6/
- ---------- ---------- ---------- ---------- ---------- --------------
6/30/1997 $10,000 $ 9,425 $10,000 $10,000 $10,000
7/31/1997 10,802 10,181 10,796 10,990 10,688
8/31/1997 10,493 9,890 10,191 10,977 10,785
9/30/1997 11,001 10,368 10,749 11,608 11,533
10/31/1997 10,646 10,033 10,390 11,103 11,094
11/30/1997 10,728 10,111 10,871 11,267 11,097
12/31/1997 10,885 10,259 11,058 11,704 11,368
1/31/1998 10,933 10,305 11,180 11,482 11,206
2/28/1998 11,736 11,061 11,986 12,433 12,063
3/31/1998 12,226 11,523 12,600 12,994 12,687
4/30/1998 12,364 11,653 12,727 13,231 12,847
5/31/1998 12,023 11,332 12,508 12,636 12,247
6/30/1998 12,407 11,693 13,016 12,715 12,438
7/31/1998 12,036 11,344 12,878 12,222 11,733
8/31/1998 10,040 9,463 11,016 9,947 9,460
9/30/1998 10,770 10,151 11,722 10,876 10,143
10/31/1998 11,431 10,774 12,675 11,847 10,719
11/30/1998 12,002 11,312 13,443 12,439 11,386
12/31/1998 12,981 12,235 14,218 13,942 12,349
1/31/1999 13,591 12,810 14,812 13,399 12,548
2/28/1999 13,189 12,431 14,352 12,697 11,865
3/31/1999 13,980 13,176 14,926 13,052 12,328
4/30/1999 14,538 13,702 15,504 14,081 13,311
5/31/1999 14,135 13,323 15,138 14,142 13,196
6/30/1999 15,025 14,161 15,978 14,900 13,750
7/31/1999 14,526 13,690 15,479 14,583 13,334
8/31/1999 14,468 13,636 15,403 14,083 13,002
9/30/1999 14,520 13,685 14,981 13,648 12,902
10/31/1999 15,041 14,176 15,928 14,344 13,561
11/30/1999 16,321 15,382 16,252 15,097 14,705
12/31/1999 19,012 17,919 17,209 15,994 16,732
1/31/2000 18,778 17,699 16,345 15,544 16,532
2/29/2000 21,082 19,870 16,035 16,631 19,102
3/31/2000 20,865 19,666 17,604 18,023 18,396
4/30/2000 19,259 18,151 17,075 17,394 16,183
5/31/2000 17,676 16,659 16,724 17,177 14,988
6/30/2000 18,017 16,981 17,137 17,429 16,789
7/31/2000 17,552 16,543 16,869 17,705 16,312
8/31/2000 18,928 17,840 17,916 19,681 18,132
9/30/2000 18,372 17,315 16,971 19,547 17,394
10/31/2000 17,501 16,494 16,899 18,884 15,973
11/30/2000 15,385 14,500 15,566 17,458 13,254
12/31/2000 15,783 14,876 15,643 18,794 14,093
1/31/2001 16,233 15,300 16,198 19,212 14,860
2/28/2001 14,605 13,765 14,721 18,116 13,055
3/31/2001 13,616 12,833 13,788 16,769 11,858
4/30/2001 14,812 13,960 14,860 18,619 13,112
5/31/2001 14,955 14,095 14,959 19,053 13,423
6/30/2001 14,872 14,017 14,595 18,976 13,532
7/31/2001 14,611 13,771 14,451 18,693 12,902
8/31/2001 13,990 13,186 13,547 18,082 12,275
9/30/2001 12,506 11,787 12,453 15,833 10,697
10/31/2001 12,821 12,084 12,690 16,533 11,257
11/30/2001 13,874 13,076 13,664 17,763 12,132
12/31/2001 14,305 13,483 13,783 18,680 12,782
1/31/2002 14,179 13,364 13,582 18,583 12,533
2/28/2002 13,910 13,110 13,320 18,606 12,178
3/31/2002 14,594 13,755 13,821 19,936 13,004
4/30/2002 14,208 13,391 12,983 19,843 12,876
5/31/2002 14,019 13,213 12,888 19,508 12,592
6/30/2002 12,885 12,144 11,970 18,081 11,729
7/31/2002 11,751 11,075 11,037 16,328 10,588
8/31/2002 11,841 11,160 11,109 16,411 10,650
9/30/2002 10,654 10,041 9,902 15,089 9,932
10/31/2002 11,148 10,507 10,773 15,743 10,259
11/30/2002 11,804 11,126 11,407 16,654 10,967
12/31/2002 11,184 10,540 10,737 15,969 10,506
1/31/2003 10,896 10,270 10,456 15,503 10,279
2/28/2003 10,780 10,160 10,299 15,134 10,017
3/31/2003 10,860 10,236 10,399 15,261 10,165
4/30/2003 11,706 11,033 11,256 16,369 11,012
5/31/2003 12,570 11,848 11,849 17,726 12,058
6/30/2003 12,741 12,009 12,000 17,952 12,345
7/31/2003 13,065 12,314 12,211 18,589 12,921
8/31/2003 13,704 12,916 12,450 19,432 13,463
9/30/2003 13,363 12,594 12,317 19,134 13,296
10/31/2003 14,334 13,510 13,014 20,581 14,302
11/30/2003 14,694 13,849 13,129 21,298 14,791
12/31/2003 14,945 14,086 13,817 21,657 15,099
1/31/2004 15,296 14,417 14,071 22,127 15,639
2/29/2004 15,431 14,544 14,266 22,658 15,913
3/31/2004 15,466 14,577 14,051 22,754 15,980
4/30/2004 15,151 14,280 13,831 22,007 15,338
5/31/2004 15,384 14,500 14,020 22,464 15,571
6/30/2004 15,780 14,872 14,293 22,975 15,977
7/31/2004 14,880 14,025 13,820 21,903 15,087
8/31/2004 14,700 13,855 13,876 21,846 15,093
9/30/2004 15,168 14,295 14,026 22,493 15,709
10/31/2004 15,447 14,558 14,240 22,853 16,063
11/30/2004 16,211 15,279 14,817 24,214 17,155
12/31/2004 16,868 15,898 15,321 25,227 17,903
1/31/2005 16,401 15,458 14,947 24,584 17,316
2/28/2005 16,733 15,771 15,262 25,408 17,629
3/31/2005 16,427 15,483 14,992 25,127 17,317
4/30/2005 15,905 14,990 14,707 24,150 16,732
5/31/2005 16,571 15,618 15,175 25,605 17,724
6/30/2005 16,805 15,839 15,197 26,198 18,294
7/31/2005 17,596 16,585 15,762 27,574 19,301
8/31/2005 17,489 16,483 15,618 27,267 19,073
9/30/2005 17,704 16,686 15,745 27,477 19,191
10/31/2005 17,327 16,331 15,482 26,886 18,779
11/30/2005 18,110 17,069 16,068 28,200 19,657
12/31/2005 18,147 17,103 16,073 28,395 19,742
1/31/2006 19,028 17,934 16,499 30,068 20,984
2/28/2006 18,966 17,875 16,544 29,816 20,793
3/31/2006 19,523 18,401 16,750 30,561 21,570
4/30/2006 19,676 18,544 16,974 30,991 21,672
5/31/2006 18,910 17,823 16,486 29,593 20,796
6/30/2006 19,001 17,908 16,508 29,599 20,829
7/31/2006 18,596 17,527 16,610 28,755 20,246
8/31/2006 18,857 17,772 17,005 29,084 20,694
9/30/2006 19,270 18,162 17,444 29,280 20,930
10/31/2006 19,998 18,848 18,012 30,497 21,972
11/30/2006 20,510 19,331 18,354 31,478 22,798
12/31/2006 20,627 19,441 18,612 31,325 22,914
1/31/2007 21,310 20,084 18,893 32,463 23,677
2/28/2007 21,229 20,008 18,524 32,701 23,557
3/31/2007 21,390 20,160 18,731 33,141 23,811
4/30/2007 22,173 20,898 19,561 34,149 24,361
5/31/2007 23,153 21,821 20,243 35,860 25,367
6/30/2007 22,947 21,627 19,907 35,077 25,068
Average Annual Total Returns -- June 30, 2007
6 MONTHS 1 YEAR 5 YEARS 10 YEARS
CLASS A (Inception 7/7/94)
Net Asset Value/1/ 11.25% 20.78% 12.24% 8.66%
With Maximum Sales Charge/2/ 4.85 13.83 10.93 8.02
CLASS B (Inception 7/7/94)
Net Asset Value/1/ 10.82 19.90 11.40 7.85
With CDSC/3/ 5.82 14.90 11.14 7.85
CLASS C (Inception 7/7/94)
Net Asset Value/1/ 10.81 19.88 11.39 7.85
With CDSC/3/ 9.81 18.88 11.39 7.85
CLASS Y (Inception 11/15/94)
Net Asset Value/1/ 11.45 21.38 12.83 9.15
- ------------------------------------------------------------------------
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS
S&P MidCap 400 Index/4/ 11.98% 18.51% 14.17% 13.37%
S&P 500 Index/5/ 6.96 20.59 10.71 7.13
Dow Jones Wilshire 4500 Index/6/ 9.40 20.35 16.40 9.63
Morningstar Mid-Cap Growth Fund Avg./7/ 12.33 19.00 12.61 8.65
All returns represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com. Class Y shares are only available to
certain investors, as outlined in the prospectus.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ------------------------------------------------------
Common Stocks 97.8 99.0
- ------------------------------------------------------
Short-Term Investments and Other 2.2 1.0
- ------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ------------------------------------------------------
Intel Corp. 1.7 1.2
- ------------------------------------------------------
McDonald's Corp. 1.5 1.6
- ------------------------------------------------------
Union Pacific Corp. 1.3 1.2
- ------------------------------------------------------
Dell, Inc. 1.3 1.3
- ------------------------------------------------------
Viacom, Inc., Class B 1.3 1.3
- ------------------------------------------------------
JPMorgan Chase & Co. 1.2 1.4
- ------------------------------------------------------
Time Warner, Inc. 1.2 1.3
- ------------------------------------------------------
Hewlett-Packard Co. 1.2 1.2
- ------------------------------------------------------
Sprint Nextel Corp. 1.1 0.3
- ------------------------------------------------------
Morgan Stanley 1.1 1.2
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ------------------------------------------------------
Diversified Financial Services 8.6 9.4
- ------------------------------------------------------
Telecommunications 6.1 4.8
- ------------------------------------------------------
Media 4.8 5.0
- ------------------------------------------------------
Retail 4.7 5.9
- ------------------------------------------------------
Semiconductors 4.3 2.5
- ------------------------------------------------------
Portfolio holdings and asset allocations will vary.
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio Net Expense Ratio
- -------------------------------------------
A 1.46 1.46
- -------------------------------------------
B 2.22 2.22
- -------------------------------------------
C 2.22 2.22
- -------------------------------------------
Y 1.03 1.03
- -------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/S&P MidCap 400 Index is an unmanaged index of U.S. mid-sized companies.
/5/S&P 500 Index is an unmanaged index of U.S. common stocks.
/6/Dow Jones Wilshire 4500 Index is an unmanaged index of 4,500 mid- and
small-sized companies.
/7/Morningstar Mid-Cap Growth Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
11
NATIXIS VALUE FUND
PORTFOLIO PROFILE
Objective:
Seeks a reasonable, long-term investment return from a combination of market
appreciation and dividend income from equity securities
- --------------------------------------------------------------------------------
Strategy:
Features value investments through a diversified portfolio of complementary
equity investment disciplines provided by specialized money managers
- --------------------------------------------------------------------------------
Inception Date:
June 5, 1970
- --------------------------------------------------------------------------------
Subadvisors:
Harris Associates, L.P.
Loomis, Sayles & Company, L.P.
Vaughan Nelson Investment Management, L.P.
Westpeak Global Advisors, L.P.
- --------------------------------------------------------------------------------
Symbols:
Class A NEFVX
Class B NEVBX
Class C NECVX
- --------------------------------------------------------------------------------
What You Should Know:
Value stocks may fall out of favor with investors and underperform the overall
market. Small-cap stocks carry special risks, including narrower markets,
limited financial and management resources, less liquidity and greater
volatility.
Management Discussion
- --------------------------------------------------------------------------------
During the first half of 2007, equities delivered strong results in an
environment of improving economic growth and relatively low, though rising,
interest rates. For the period, growth stocks slightly outperformed value
stocks, and large- and mid-cap stocks outpaced small caps. For the six months
ended June 30, 2007, the return on Natixis Value Fund (formerly IXIS Value
Fund) was 7.09% based on the net asset value of Class A shares. The fund
outperformed its benchmark, the Russell 1000 Value Index, which returned 6.23%,
but its results were below the 7.34% average return on the funds in
Morningstar's Large Blend category.
Natixis Value Fund's four segments combine the expertise of four investment
managers with different approaches to value investing. Harris Associates favors
mid- and large-cap value companies with positive cash flows, high levels of
insider ownership and favorable growth potential that are trading at what the
managers believe are substantial discounts to their true business value. Loomis
Sayles seeks large-cap companies with attractive valuations and above-average
earnings prospects. Like Loomis, Vaughan Nelson focuses on large-cap companies,
but emphasizes established, undervalued companies that the manager believes
will rebound within 12 to 18 months. Westpeak Global Advisors invests across
the capitalization spectrum, using proprietary research to select stocks based
on value and growth potential, while seeking to manage unnecessary risk.
HARRIS ASSOCIATES SOUGHT DOMINANT BUSINESSES SELLING AT A DISCOUNT
Stock of high-quality financial, technology and consumer-oriented companies
were positive performers for this segment. These included Tiffany, which has
been broadening its product line to appeal to a wider range of customers and
expanding store growth, particularly internationally. Also a top performer, the
stock price of Union Pacific rose to reflect an operational turnaround and
improved revenue growth that resulted from vigorous demand for coal hauling and
a strong freight business. McDonald's was one of this segment's top
contributors during the six-month period. The fast-food chain's turnaround in
the United States has resulted in 48 consecutive months of positive same-store
sales. Going forward, Harris Associates believes McDonald's should benefit from
an expansion of company-owned stores in Europe. This segment was held back by
its relatively small exposure to energy, utilities and materials, and its lack
of exposure to commodity-related stocks. Harris Associates believes that the
rise in energy prices is likely to reverse course. Lennar Corporation, Viacom
and Time Warner were this segment's weakest holdings. Lennar was impacted by
its participation in the slumping U.S. housing market, although this home
builder continues to focus on protecting its balance sheet. Some of Viacom's
cable networks had poor ratings, but the company is investing in better,
fresher programming. Concerns about the spending power of consumers weakened
media stocks in general, including Time Warner. However, Lennar, Viacom, and
Time Warner remain in this segment and continue to be viewed as attractive
investments.
LOOMIS SAYLES FAVORED COMPANIES TRADING AT DISCOUNTS TO THEIR INTRINSIC VALUE
The energy and materials sectors had the greatest positive impact on this
segment during the first half of 2007. NRG Energy rose on an improved outlook
for energy prices and the stock's strong cash flow. XTO Energy also
contributed, as stock prices of companies active in oil and gas exploration and
production rallied from their lows earlier in the year. In the materials
sector, both Freeport-McMoRan and Owens-Illinois contributed to outperformance.
Mining company Freeport-McMoRan benefited from rising copper prices that
resulted from global supply disruptions and strong demand. Packaging giant
Owens-Illinois' energy-intensive production process for its glass products
benefited from lower production costs and initiatives likely to be accelerated
by its new CEO. Both holdings were added during the first half of 2007.
Engineering and construction stocks also did well, with Foster Wheeler Ltd.
rising on strong earnings. Telecommunications giant AT&T had a positive impact
on results thanks to
12
NATIXIS VALUE FUND
Management Discussion
- --------------------------------------------------------------------------------
forecasts for double-digit annual sales growth in the Asia Pacific region over
the next few years. Although this segment has minimal exposure to the subprime
market, financial holdings declined slightly over concerns of subprime mortgage
defaults, an overall weakness in housing and rising interest rates. Names that
detracted slightly from performance included retailer Office Depot, which
declined on news of revenue shortfalls and rising retail prices that impacted
its North American retail sales; and Avaya Inc., which appears to be entering a
highly competitive period for its software applications. The stock was sold in
April.
VAUGHAN NELSON SOUGHT STRONG RETURNS USING BOTTOM-UP STOCK SELECTION
Vaughan Nelson's segment responded well to the reacceleration of economic
growth in the second quarter of 2007, particularly with regard to its
relatively large positions in the energy, industrials and technology sectors.
Stock selection in all of these areas contributed to performance. Reducing this
segment's commitment to financial companies also proved to be the right call,
as defaults in the subprime mortgage market led to losses that extended to
several high-profile financial companies. This segment had relatively small
positions in telecommunications and utility stocks, based on less attractive
valuations for these sectors. Energy services companies McDermott International
and Tidewater Inc. were among the top-performing stocks. Both companies
benefited from higher commodity prices and the push to more efficiently develop
the world's energy assets. Texas Instruments was also a top performer, as the
semiconductor industry began to recover from its cyclical low. Merrill Lynch,
Citigroup and Amgen were the biggest detractors from this segment's results.
The slump in Merrill Lynch and Citigroup shares reflected investor anxiety with
financial stocks in general. Amgen declined after the Federal Drug
Administration questioned the safety of some of its best-selling drugs. Merrill
Lynch and Citigroup remain in the segment but Amgen was sold.
WESTPEAK EMPHASIZED HIGH-QUALITY STOCKS WITH SUSTAINABLE EARNINGS
Energy stocks led the market in the first half of fiscal 2007, and this
segment's relatively large positions in the oil refining and oil services
industries contributed to performance. An emphasis on grocery stores was also
positive, as the industry enjoyed a strong first quarter. The segment's
relatively small position in financial stocks was also positive because the
sector was weak during the second quarter. However, the segment was overweight
in airlines and clothing retailers, two other industries that performed poorly
during the period. Top performers included Warnaco Group, TODCO and CIGNA. A
relatively large position in Warnaco rallied on solid earnings reports and a
robust forecast for sales of its lines of intimate apparel, sportswear and
swimwear. After performing poorly in 2006, oil services company TODCO saw its
shares jump on a takeover bid. Westpeak sold the stock on strength before the
merger. Medical services provider CIGNA rose in value when its earnings
exceeded forecasts, and the stock remains in the segment. One of the biggest
detractors from performance was Building Materials Holding, a distributor of
construction materials. The weak housing market cut into earnings and the
position was eliminated. Accredited Home Lenders was active in the subprime
mortgage debacle; the shares were sold in March, but hurt the segment's results
for the six-month period. In technology, Lexmark International, a computer
hardware manufacturer specializing in printers, declined on poor earnings as a
result of price competition. The stock remains in the segment because it is
ranked highly by Westpeak's financial models for value, efficiency and
management sentiment.
On March 9, 2007, the Trustees of Natixis Funds Trust I approved an Agreement
and Plan of Reorganization, pursuant to which the net assets of the Natixis
Value Fund will be acquired by the Loomis Sayles Value Fund. This transaction
is subject to approval by shareholders of the Natixis Value Fund.
13
NATIXIS VALUE FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares/6/
[CHART]
June 30, 1997 through June 30, 2007
Russell
1000
Class A Class A Value
@ N.A. @ M.S.C. Index
Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/
- --------- ---------- ---------- ----------
6/30/1997 $10,000 $ 9,425 $10,000
7/31/1997 10,756 10,138 10,752
8/31/1997 10,341 9,746 10,369
9/30/1997 10,778 10,158 10,996
10/31/1997 10,314 9,721 10,689
11/30/1997 10,556 9,949 11,161
12/31/1997 10,711 10,095 11,487
1/31/1998 10,690 10,075 11,325
2/28/1998 11,408 10,752 12,087
3/31/1998 11,862 11,180 12,826
4/30/1998 11,852 11,170 12,912
5/31/1998 11,514 10,852 12,721
6/30/1998 11,503 10,842 12,884
7/31/1998 11,112 10,473 12,656
8/31/1998 9,232 8,701 10,773
9/30/1998 9,758 9,197 11,391
10/31/1998 10,577 9,969 12,273
11/30/1998 11,127 10,487 12,845
12/31/1998 11,468 10,808 13,282
1/31/1999 11,172 10,529 13,389
2/28/1999 10,971 10,340 13,200
3/31/1999 11,018 10,384 13,473
4/30/1999 11,871 11,188 14,731
5/31/1999 11,764 11,087 14,569
6/30/1999 12,072 11,378 14,992
7/31/1999 11,527 10,865 14,553
8/31/1999 11,029 10,395 14,013
9/30/1999 10,393 9,795 13,523
10/31/1999 10,901 10,274 14,302
11/30/1999 10,744 10,127 14,190
12/31/1999 10,674 10,061 14,258
1/31/2000 10,345 9,750 13,793
2/29/2000 9,456 8,912 12,768
3/31/2000 10,430 9,830 14,326
4/30/2000 10,402 9,804 14,160
5/31/2000 10,345 9,750 14,309
6/30/2000 10,102 9,521 13,655
7/31/2000 10,130 9,547 13,826
8/31/2000 10,748 10,130 14,595
9/30/2000 10,562 9,955 14,729
10/31/2000 10,848 10,224 15,091
11/30/2000 10,504 9,900 14,531
12/31/2000 10,891 10,264 15,259
1/31/2001 11,235 10,589 15,317
2/28/2001 10,934 10,305 14,891
3/31/2001 10,561 9,954 14,365
4/30/2001 11,220 10,575 15,070
5/31/2001 11,521 10,858 15,408
6/30/2001 11,320 10,669 15,066
7/31/2001 11,219 10,574 15,034
8/31/2001 10,732 10,115 14,432
9/30/2001 9,830 9,265 13,416
10/31/2001 10,131 9,548 13,301
11/30/2001 10,804 10,183 14,074
12/31/2001 11,033 10,399 14,406
1/31/2002 10,876 10,250 14,295
2/28/2002 10,761 10,143 14,318
3/31/2002 11,234 10,588 14,995
4/30/2002 10,890 10,264 14,481
5/31/2002 10,890 10,264 14,553
6/30/2002 10,045 9,467 13,718
7/31/2002 9,171 8,644 12,443
8/31/2002 9,314 8,779 12,537
9/30/2002 8,183 7,712 11,143
10/31/2002 8,713 8,212 11,968
11/30/2002 9,415 8,874 12,722
12/31/2002 8,885 8,374 12,169
1/31/2003 8,670 8,171 11,875
2/28/2003 8,470 7,983 11,558
3/31/2003 8,484 7,996 11,578
4/30/2003 9,272 8,739 12,597
5/31/2003 9,945 9,374 13,410
6/30/2003 10,131 9,549 13,577
7/31/2003 10,246 9,657 13,780
8/31/2003 10,504 9,900 13,994
9/30/2003 10,275 9,684 13,858
10/31/2003 10,949 10,320 14,706
11/30/2003 11,222 10,576 14,905
12/31/2003 11,694 11,022 15,824
1/31/2004 11,823 11,143 16,102
2/29/2004 12,081 11,386 16,447
3/31/2004 12,009 11,319 16,303
4/30/2004 11,823 11,143 15,905
5/31/2004 11,966 11,278 16,067
6/30/2004 12,196 11,495 16,447
7/31/2004 11,837 11,157 16,215
8/31/2004 11,809 11,130 16,446
9/30/2004 11,952 11,265 16,701
10/31/2004 12,110 11,413 16,978
11/30/2004 12,669 11,941 17,837
12/31/2004 13,024 12,275 18,434
1/31/2005 12,834 12,096 18,107
2/28/2005 13,154 12,398 18,707
3/31/2005 12,980 12,233 18,450
4/30/2005 12,687 11,958 18,120
5/31/2005 13,067 12,315 18,556
6/30/2005 13,221 12,461 18,759
7/31/2005 13,701 12,913 19,302
8/31/2005 13,626 12,842 19,218
9/30/2005 13,760 12,969 19,488
10/31/2005 13,430 12,658 18,993
11/30/2005 13,865 13,068 19,617
12/31/2005 13,832 13,037 19,734
1/31/2006 14,264 13,444 20,501
2/28/2006 14,296 13,474 20,626
3/31/2006 14,545 13,709 20,905
4/30/2006 14,861 14,006 21,437
5/31/2006 14,445 13,614 20,895
6/30/2006 14,452 13,621 21,029
7/31/2006 14,503 13,669 21,540
8/31/2006 14,825 13,972 21,900
9/30/2006 15,265 14,387 22,337
10/31/2006 15,926 15,010 23,068
11/30/2006 16,281 15,345 23,595
12/31/2006 16,556 15,604 24,124
1/31/2007 16,915 15,943 24,433
2/28/2007 16,499 15,551 24,052
3/31/2007 16,575 15,622 24,424
4/30/2007 17,273 16,280 25,326
5/31/2007 18,047 17,009 26,240
6/30/2007 17,729 16,710 25,627
Average Annual Total Returns -- June 30, 2007
6 MONTHS 1 YEAR 5 YEARS 10 YEARS
CLASS A (Inception 6/5/70)
Net Asset Value/1/ 7.09% 22.69% 12.04% 5.90%
With Maximum Sales Charge/2/ 0.88 15.64 10.71 5.27
CLASS B (Inception 9/13/93)
Net Asset Value/1/ 6.74 21.84 11.21 5.11
With CDSC/3/ 1.74 16.84 10.95 5.11
CLASS C (Inception 12/30/94)
Net Asset Value/1/ 6.74 21.84 11.21 5.10
With CDSC/3/ 5.74 20.84 11.21 5.10
- ---------------------------------------------------------------------
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS
Russell 1000 Value Index/4/ 6.23% 21.87% 13.31% 9.87%
Morningstar Large Blend Fund Avg./5/ 7.34 19.50 10.29 6.96
All results represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ------------------------------------------------------
Common Stocks 97.7 97.2
- ------------------------------------------------------
Short-Term Investments and Other 2.3 2.8
- ------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ------------------------------------------------------
ExxonMobil Corp. 3.0 3.3
- ------------------------------------------------------
JPMorgan Chase & Co. 3.0 3.1
- ------------------------------------------------------
Time Warner, Inc. 2.5 3.1
- ------------------------------------------------------
Hewlett-Packard Co. 2.5 2.7
- ------------------------------------------------------
McDonald's Corp. 2.4 2.6
- ------------------------------------------------------
Morgan Stanley 2.4 2.3
- ------------------------------------------------------
Citigroup, Inc. 2.2 2.7
- ------------------------------------------------------
Intel Corp. 2.1 2.2
- ------------------------------------------------------
Mellon Financial Corp. 1.9 1.7
- ------------------------------------------------------
Yum! Brands, Inc. 1.9 1.7
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ------------------------------------------------------
Diversified Financial Services 11.9 13.1
- ------------------------------------------------------
Retail 7.3 6.2
- ------------------------------------------------------
Media 7.0 7.3
- ------------------------------------------------------
Oil & Gas 6.4 7.6
- ------------------------------------------------------
Semiconductors 5.8 3.6
- ------------------------------------------------------
Portfolio holdings and asset allocations will vary.
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1,
0%. Class C share performance assumes a 1.00% CDSC applied when you sell
shares within one year of purchase.
/4/Russell 1000 Value Index is an unmanaged index that measures the
performance of those Russell 1000 companies with lower price-to-book ratios
and lower forecasted growth values.
/5/Morningstar Large Blend Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
14
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio Net Expense Ratio
- -------------------------------------------
A 1.38 1.38
- -------------------------------------------
B 2.14 2.14
- -------------------------------------------
C 2.14 2.14
- -------------------------------------------
VAUGHAN NELSON SMALL CAP VALUE FUND
PORTFOLIO PROFILE
Objective:
Seeks capital appreciation
- --------------------------------------------------------------------------------
Strategy:
Invests in small-cap companies with a focus on absolute return, using a
bottom-up value-oriented investment process
- --------------------------------------------------------------------------------
Inception Date:
December 31, 1996
- --------------------------------------------------------------------------------
Managers:
Chris D. Wallis
Scott J. Weber
- --------------------------------------------------------------------------------
Symbols:
Class A NEFJX
Class B NEJBX
Class C NEJCX
Class Y NEJYX
- --------------------------------------------------------------------------------
What You Should Know:
Investing in small-cap stocks carries special risk, including narrower markets,
limited financial and management resources, less liquidity and greater
volatility than large company stocks. Value stocks may fall out of favor with
investors and underperform the overall market during any given period.
Management Discussion
- --------------------------------------------------------------------------------
Vaughan Nelson Small Cap Value Fund significantly outperformed its benchmark
for the first half of 2007 and finished the period in the top half of a group
of comparable funds. Good stock selection and its emphasis on industrial and
energy stocks were largely responsible for the fund's results. Other positive
factors included the fund's relatively small position in financial stocks,
which did poorly, and positive results from its technology selections.
For the six months ended June 30, 2007, the fund's total return was 8.95% based
on the net asset value of Class A shares. For the same period, the fund's
benchmark, the Russell 2000 Value Index, returned 3.80%, while the average
performance of funds in Morningstar's Small Blend category was 8.55%.
FUND'S VALUE-ORIENTED STYLE AND DISCIPLINED PROCESS WORKED WELL
While stocks in general were up for the first half of 2007, mid-cap stocks
outperformed small-cap stocks, and growth stocks topped value stocks. However,
many interest-sensitive companies - the weakest group during the period - are
in the value category. An increase in merger and acquisition activity has made
"bargains" harder to find, but some companies with favorable growth prospects
appear to have been under-appreciated, providing opportunities for the fund.
Our value philosophy and process helps guide us toward what we believe are
attractive investment opportunities in many different investment climates.
In general, we look for temporary inefficiencies in the small-cap value
universe that provide opportunities to invest in companies at prices materially
below our estimate of their long-term intrinsic value. We use a disciplined
valuation methodology, combined with fundamental research, to take advantage of
these inefficiencies. Our goal is to identify stocks with strong return
prospects over a three-year period and to sell them once they are nearing that
target or if they fail to meet our expectations.
STRONG DEMAND DROVE EARNINGS FOR FUND'S BEST PERFORMERS
Among the fund's best performers during the first half of 2007 were
Cleveland-Cliffs, General Cable and CommScope. Cleveland-Cliffs is an iron ore
producer that benefited from strong global demand for its products. We bought
the stock at an attractive valuation and sold it when it reached our target.
General Cable is enjoying strong demand for its wire and cable products from
all three of its end-markets - energy, telecommunications and industrial
customers. We believe the need for infrastructure investment should continue.
CommScope provides cable and connectivity products for telecommunications
service providers. It, too, is benefiting from strong demand from cable and
telecommunications companies with a backlog of capital spending needs. Both
General Cable and CommScope still appear attractive and remain in the portfolio.
CONCERNS ABOUT SUBPRIME LOANS AND RISING INTEREST RATES HURT SOME HOLDINGS
Friedman Billings Ramsey Group (FBR), PrivateBancorp, and CompuCredit were our
worst performers for the six months ended June 30, 2007. All three stocks were
impacted by the concerns about the risks in the subprime mortgage and
asset-backed securities markets. FBR has direct exposure to the mortgage
business, while CompuCredit provides financing to subprime borrowers.
PrivateBancorp is less directly affected by these issues, although it began to
experience credit concerns in its non-residential mortgage portfolio. We
eliminated all three positions.
VOLATILE STOCK PRICES MAY PROVIDE INVESTMENT OPPORTUNITIES
After a slower-than-anticipated first quarter, we noted some improvement in
economic growth in the second quarter of 2007. We believe the economy is
experiencing a mid-cycle slowdown that may make it difficult for many companies
to meet earnings expectations. We will use any corrections to build or
establish positions we think are promising, focusing on companies that we
believe are likely to benefit from strong demand, or which may have pricing
power, as well as "special situations." Accordingly, as we enter the second
half of 2007, the portfolio emphasizes industrial stocks (particularly
aerospace and defense and machinery) and energy. We are also looking for
opportunities in the technology sector.
15
VAUGHAN NELSON SMALL CAP VALUE FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares
[CHART]
June 30, 1997 through June 30, 2007
Class A Class A Russell 2000
@ N.A. @ M.S.C. Value
Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/
- ---------- ---------- ----------- ------------
6/30/1997 $10,000 $ 9,425 $10,000
7/31/1997 10,674 10,060 10,420
8/31/1997 10,964 10,334 10,585
9/30/1997 11,920 11,235 11,289
10/31/1997 11,478 10,818 10,982
11/30/1997 11,210 10,565 11,102
12/31/1997 11,500 10,839 11,479
1/31/1998 11,178 10,535 11,271
2/28/1998 12,091 11,396 11,952
3/31/1998 12,795 12,059 12,437
4/30/1998 12,676 11,947 12,499
5/31/1998 11,898 11,213 12,056
6/30/1998 12,084 11,390 11,988
7/31/1998 11,142 10,501 11,049
8/31/1998 8,717 8,216 9,319
9/30/1998 9,324 8,788 9,845
10/31/1998 9,736 9,176 10,137
11/30/1998 10,650 10,038 10,412
12/31/1998 11,737 11,062 10,738
1/31/1999 11,984 11,295 10,495
2/28/1999 10,980 10,349 9,778
3/31/1999 11,737 11,062 9,697
4/30/1999 12,622 11,896 10,583
5/31/1999 12,517 11,797 10,908
6/30/1999 13,558 12,779 11,303
7/31/1999 13,393 12,623 11,035
8/31/1999 13,274 12,510 10,631
9/30/1999 13,643 12,858 10,419
10/31/1999 14,677 13,833 10,210
11/30/1999 16,365 15,424 10,263
12/31/1999 19,412 18,295 10,578
1/31/2000 19,386 18,272 10,302
2/29/2000 24,169 22,779 10,931
3/31/2000 23,248 21,911 10,983
4/30/2000 20,521 19,341 11,048
5/31/2000 18,855 17,771 10,879
6/30/2000 20,388 19,215 11,197
7/31/2000 18,954 17,865 11,570
8/31/2000 21,311 20,085 12,087
9/30/2000 20,631 19,444 12,019
10/31/2000 18,894 17,807 11,976
11/30/2000 15,600 14,703 11,732
12/31/2000 17,039 16,059 12,993
1/31/2001 17,782 16,759 13,352
2/28/2001 15,491 14,601 13,333
3/31/2001 14,015 13,209 13,119
4/30/2001 15,419 14,533 13,727
5/31/2001 15,739 14,834 14,080
6/30/2001 16,275 15,339 14,646
7/31/2001 15,160 14,289 14,318
8/31/2001 14,231 13,413 14,268
9/30/2001 11,971 11,283 12,693
10/31/2001 12,786 12,051 13,025
11/30/2001 13,912 13,112 13,960
12/31/2001 14,986 14,124 14,815
1/31/2002 14,635 13,793 15,012
2/28/2002 13,469 12,694 15,103
3/31/2002 14,666 13,823 16,234
4/30/2002 14,326 13,502 16,806
5/31/2002 13,634 12,850 16,250
6/30/2002 12,726 11,994 15,890
7/31/2002 10,805 10,184 13,529
8/31/2002 10,795 10,174 13,469
9/30/2002 9,804 9,240 12,507
10/31/2002 10,310 9,717 12,695
11/30/2002 11,104 10,466 13,708
12/31/2002 10,371 9,775 13,123
1/31/2003 9,794 9,231 12,753
2/28/2003 9,453 8,909 12,324
3/31/2003 9,474 8,929 12,456
4/30/2003 10,382 9,785 13,639
5/31/2003 11,445 10,787 15,032
6/30/2003 11,879 11,196 15,286
7/31/2003 12,654 11,926 16,049
8/31/2003 13,304 12,539 16,658
9/30/2003 12,912 12,169 16,467
10/31/2003 13,840 13,044 17,810
11/30/2003 14,243 13,424 18,494
12/31/2003 14,387 13,559 19,162
1/31/2004 14,943 14,084 19,825
2/29/2004 14,861 14,007 20,209
3/31/2004 14,892 14,036 20,488
4/30/2004 14,252 13,433 19,429
5/31/2004 14,303 13,481 19,663
6/30/2004 15,046 14,181 20,662
7/31/2004 14,396 13,568 19,712
8/31/2004 14,252 13,432 19,906
9/30/2004 14,758 13,909 20,693
10/31/2004 14,964 14,104 21,014
11/30/2004 16,100 15,174 22,879
12/31/2004 16,585 15,631 23,425
1/31/2005 16,089 15,164 22,519
2/28/2005 16,615 15,660 22,966
3/31/2005 16,377 15,436 22,493
4/30/2005 15,593 14,696 21,333
5/31/2005 16,418 15,474 22,634
6/30/2005 17,078 16,096 23,635
7/31/2005 17,986 16,952 24,980
8/31/2005 17,851 16,825 24,406
9/30/2005 18,026 16,990 24,366
10/31/2005 17,489 16,484 23,754
11/30/2005 18,243 17,194 24,718
12/31/2005 18,254 17,204 24,528
1/31/2006 19,678 18,546 26,556
2/28/2006 19,573 18,448 26,554
3/31/2006 20,554 19,372 27,841
4/30/2006 20,636 19,450 27,915
5/31/2006 19,904 18,759 26,759
6/30/2006 19,894 18,750 27,088
7/31/2006 19,440 18,322 26,712
8/31/2006 19,627 18,498 27,511
9/30/2006 19,801 18,663 27,779
10/31/2006 20,823 19,626 29,193
11/30/2006 21,308 20,083 30,025
12/31/2006 21,556 20,316 30,287
1/31/2007 21,825 20,570 30,741
2/28/2007 21,845 20,589 30,363
3/31/2007 22,133 20,860 30,730
4/30/2007 22,206 20,929 31,049
5/31/2007 23,589 22,233 32,187
6/30/2007 23,486 22,135 31,437
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION/6/
CLASS A (Inception 12/31/96)
Net Asset Value/1/ 8.95% 18.05% 13.04% 8.91% --
With Maximum Sales Charge/2/ 2.71 11.24 11.72 8.27 --
CLASS B (Inception 12/31/96)
Net Asset Value/1/ 8.55 17.16 12.20 8.10 --
With CDSC/3/ 3.55 12.16 11.94 8.10 --
CLASS C (Inception 12/31/96)
Net Asset Value/1/ 8.55 17.15 12.19 8.11 --
With CDSC/3/ 7.55 16.15 12.19 8.11 --
CLASS Y (Inception 8/31/06)
Net Asset Value/1/ 9.09 -- -- -- 19.93%
- ----------------------------------------------------------------------------------
SINCE
CLASS Y
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEAR INCEPTION/7/
Russell 2000 Value Index/4/ 3.80% 16.05% 14.62% 12.14% 14.27%
Morningstar Small Blend Fund Avg./5/ 8.55 17.02 13.86 10.82 18.85
All results represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com. Class Y shares are only available to
certain investors, as outlined in the prospectus.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares.
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ------------------------------------------------------
Common Stocks 94.9 93.8
- ------------------------------------------------------
Investment Companies 2.9 2.7
- ------------------------------------------------------
Short-Term Investments and Other 2.2 3.5
- ------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ------------------------------------------------------
iShares Russell 2000 Value
Index Fund 2.9 2.7
- ------------------------------------------------------
Alliant Techsystems, Inc. 2.9 2.5
- ------------------------------------------------------
General Cable Corp. 2.3 1.3
- ------------------------------------------------------
Pediatrix Medical Group, Inc. 2.2 2.0
- ------------------------------------------------------
Lennox International, Inc. 2.1 2.0
- ------------------------------------------------------
Guitar Center, Inc. 2.0 1.5
- ------------------------------------------------------
CommScope, Inc. 2.0 0.8
- ------------------------------------------------------
Affiliated Managers Group, inc. 2.0 2.1
- ------------------------------------------------------
Arena Resources, Inc. 2.0 1.9
- ------------------------------------------------------
Moog, Inc., Class A 1.9 1.7
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ------------------------------------------------------
Retail 8.1 10.4
- ------------------------------------------------------
Oil & Gas 7.9 4.1
- ------------------------------------------------------
Chemicals 6.1 3.7
- ------------------------------------------------------
Diversified Financial Services 6.0 5.6
- ------------------------------------------------------
Aerospace & Defense 5.9 4.9
- ------------------------------------------------------
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio/8/ Net Expense Ratio/9/
- -------------------------------------------------
A 1.61 1.47
- -------------------------------------------------
B 2.39 2.22
- -------------------------------------------------
C 2.37 2.22
- -------------------------------------------------
Y 1.92 1.22
- -------------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/Russell 2000 Value Index is an unmanaged index that measures the performance
of those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values.
/5/Morningstar Small Blend Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
/7/The since-inception comparative performance figures shown are calculated
from 9/1/06.
/8/Before waiver and reimbursements.
/9/After waivers and reimbursements. Expense reductions are contractual and are
set to expire 4/30/08.
16
WESTPEAK CAPITAL GROWTH FUND
PORTFOLIO PROFILE
Objective:
Seeks long-term growth of capital
- --------------------------------------------------------------------------------
Strategy:
Invests primarily in common stocks of large- and mid-cap companies in any
industry
- --------------------------------------------------------------------------------
Inception Date:
August 3, 1992
- --------------------------------------------------------------------------------
Manager:
Westpeak Global Advisors, L.P.
Team Management
- --------------------------------------------------------------------------------
Symbols:
Class A NEFCX
Class B NECBX
Class C NECGX
- --------------------------------------------------------------------------------
What You Should Know:
Growth stocks can be more sensitive to market movements because their prices
are based in part on future expectations.
Management Discussion
- --------------------------------------------------------------------------------
Growth stocks did well during the first half of 2007, although the types of
stocks we selected - attractively valued stocks with good quality earnings -
were not the best performers. Class A shares of Westpeak Capital Growth Fund
provided a total return of 3.13% for the six months ended June 30, 2007. For
the same period, the funds benchmark, the Russell 1000 Growth Index returned
8.13%, exactly matching the average 8.13% return on the funds in Morningstar's
Large Growth category.
While our emphasis on value-oriented growth stocks has worked well for the fund
historically, the second quarter of 2007 was the most difficult period we've
had for some time. Many modestly priced growth stocks either underperformed or
were actually negative for the period.
STOCKS WITH HIGHLY VARIABLE EARNINGS DID WELL
Typically, growth-oriented investors are drawn to stocks of companies with
strong, steady earnings growth, but for the first half of 2007, stocks of
companies with highly variable earnings led the market. These included some
high-tech stocks, certain industrials and stocks of companies linked to
commodities.
From a sector standpoint, the fund benefited from its emphasis on defense and
aerospace and on heavy machinery, but our relative overweights in the apparel
and computer hardware industries hurt performance. Our relatively slim position
in internet stocks also detracted from results. On the other hand, the fund
benefited because we were underweight in interest-sensitive stocks, which were
impacted by concerns about subprime mortgage defaults.
CERTAIN RETAILERS, OIL SERVICES, MEDICAL TECHNOLOGY AND INDUSTRIALS DID WELL
Our best performer during the first half of 2007 was Dollar Tree Stores, a
specialty retailer that beat analysts' earnings expectations. Investor interest
in the stock also rose when a competitor was bought out. TODCO, a contract oil
and gas drilling company, rose in value when it received a buyout offer in
March. We sold the position on strength.
Although it was in the portfolio for less than six months, Varian Semiconductor
Equipment was another strong positive. Varian supplies ion implementation
systems used in the manufacture of semiconductor chips. We began buying the
stock in January and February. It rose sharply in April when the company
forecasted strong quarterly earnings gains and we sold the stock on strength in
May. A boom in heavy civil construction and transportation benefited Granite
Construction. Since we initiated a position in the stock last September, it
drifted steadily upward, for the most part, as a series of new contracts
improved the company's outlook.
OTHER RETAIL AND MEDICAL TECHNOLOGY STOCKS HURT THE FUND
We bought Office Depot late in 2006 and added to the fund's position early in
2007. This global retailer of office products and services is still highly
ranked, even though the company has missed some analysts' estimates. However,
Office Depot has a strong history and we believe the stock price will recover.
Amgen, which develops and markets human therapeutics based on cellular and
molecular biology, also proved disappointing in the first half of 2007. Sales
of its top-selling anemia drugs were threatened when the Federal Drug
Administration warned doctors of negative side effects of high doses. We
trimmed the position but continue to hold it.
FUND SCHEDULED TO CHANGE ITS NAME AND STRATEGY
Effective August 1, 2007, Westpeak Capital Growth Fund's name was changed to
Westpeak 130/30 Growth Fund to reflect a change in its investment strategy.
"130/30" is a technical term describing a "long/short" strategy that may allow
the fund to benefit if the market price of a security goes down after it is
sold short. This strategy is explained in more detail in the fund's prospectus.
The new strategy does not alter the fund's goal - long-term growth of capital.
17
WESTPEAK CAPITAL GROWTH FUND
Investment Results through June 30, 2007
- --------------------------------------------------------------------------------
PERFORMANCE IN PERSPECTIVE
The charts comparing the fund's performance to an index provide a general sense
of how it performed. The fund's total return for the period shown below appears
with and without sales charges and includes fund expenses and fees. An index
measures the performance of a theoretical portfolio. Unlike a fund, the index
is unmanaged and does not have expenses that affect the results. It is not
possible to invest directly in an index. Investors would incur transaction
costs and other expenses if they purchased the securities necessary to match
the index.
Growth of a $10,000 Investment in Class A Shares/6/
[CHART]
June 30, 1997 through June 30, 2007
Russell 1000
Class A Class A Growth
@ N.A.V. @ M.S.C. Index
Cumulative Cumulative Cumulative
Month End Value/1/ Value/2/ Value/4/
- ---------- ---------- ---------- ------------
6/30/1997 $10,000 $ 9,425 $10,000
7/31/1997 10,702 10,087 10,884
8/31/1997 10,211 9,624 10,247
9/30/1997 10,519 9,914 10,752
10/31/1997 10,094 9,514 10,354
11/30/1997 10,359 9,763 10,794
12/31/1997 10,571 9,963 10,915
1/31/1998 10,656 10,043 11,241
2/28/1998 11,387 10,732 12,087
3/31/1998 11,896 11,212 12,569
4/30/1998 12,107 11,411 12,743
5/31/1998 11,815 11,136 12,381
6/30/1998 12,430 11,715 13,139
7/31/1998 12,313 11,605 13,052
8/31/1998 10,358 9,762 11,094
9/30/1998 10,979 10,348 11,946
10/31/1998 11,782 11,104 12,906
11/30/1998 12,489 11,771 13,888
12/31/1998 13,643 12,858 15,140
1/31/1999 14,329 13,505 16,029
2/28/1999 13,524 12,746 15,296
3/31/1999 13,821 13,026 16,102
4/30/1999 14,092 13,282 16,123
5/31/1999 13,834 13,039 15,627
6/30/1999 14,567 13,730 16,722
7/31/1999 14,244 13,425 16,190
8/31/1999 14,369 13,543 16,455
9/30/1999 14,159 13,345 16,109
10/31/1999 15,146 14,275 17,326
11/30/1999 15,596 14,699 18,261
12/31/1999 17,019 16,040 20,160
1/31/2000 16,059 15,135 19,215
2/29/2000 16,728 15,767 20,154
3/31/2000 18,068 17,029 21,596
4/30/2000 17,532 16,524 20,569
5/31/2000 16,713 15,752 19,533
6/30/2000 17,814 16,790 21,013
7/31/2000 17,353 16,355 20,137
8/31/2000 18,710 17,634 21,961
9/30/2000 16,981 16,005 19,883
10/31/2000 16,392 15,449 18,942
11/30/2000 14,181 13,365 16,150
12/31/2000 13,694 12,907 15,639
1/31/2001 14,350 13,525 16,720
2/28/2001 12,401 11,688 13,881
3/31/2001 11,244 10,598 12,371
4/30/2001 12,765 12,031 13,935
5/31/2001 12,619 11,894 13,730
6/30/2001 12,422 11,708 13,412
7/31/2001 11,766 11,090 13,077
8/31/2001 10,819 10,197 12,008
9/30/2001 9,708 9,150 10,809
10/31/2001 10,155 9,571 11,376
11/30/2001 11,038 10,403 12,469
12/31/2001 10,892 10,266 12,445
1/31/2002 10,847 10,223 12,225
2/28/2002 10,454 9,853 11,718
3/31/2002 10,810 10,189 12,123
4/30/2002 10,208 9,621 11,134
5/31/2002 9,989 9,414 10,864
6/30/2002 9,167 8,640 9,859
7/31/2002 8,454 7,968 9,317
8/31/2002 8,464 7,977 9,345
9/30/2002 7,569 7,134 8,376
10/31/2002 8,117 7,650 9,144
11/30/2002 8,382 7,900 9,641
12/31/2002 7,834 7,383 8,975
1/31/2003 7,633 7,194 8,757
2/28/2003 7,670 7,229 8,717
3/31/2003 7,825 7,375 8,879
4/30/2003 8,281 7,805 9,536
5/31/2003 8,737 8,235 10,012
6/30/2003 8,819 8,312 10,149
7/31/2003 8,938 8,424 10,402
8/31/2003 9,048 8,528 10,661
9/30/2003 9,084 8,562 10,547
10/31/2003 9,522 8,975 11,139
11/30/2003 9,632 9,078 11,256
12/31/2003 9,924 9,353 11,645
1/31/2004 10,070 9,491 11,883
2/29/2004 10,070 9,491 11,958
3/31/2004 9,887 9,319 11,736
4/30/2004 9,668 9,112 11,600
5/31/2004 9,841 9,275 11,816
6/30/2004 9,969 9,396 11,964
7/31/2004 9,512 8,965 11,287
8/31/2004 9,503 8,956 11,232
9/30/2004 9,558 9,008 11,339
10/31/2004 9,777 9,215 11,515
11/30/2004 10,142 9,559 11,911
12/31/2004 10,434 9,834 12,379
1/31/2005 10,133 9,550 11,966
2/28/2005 10,215 9,628 12,093
3/31/2005 9,941 9,370 11,873
4/30/2005 9,722 9,163 11,647
5/31/2005 10,252 9,663 12,210
6/30/2005 10,380 9,784 12,165
7/31/2005 10,910 10,283 12,760
8/31/2005 10,709 10,093 12,595
9/30/2005 10,746 10,128 12,653
10/31/2005 10,463 9,861 12,530
11/30/2005 10,938 10,309 13,071
12/31/2005 10,783 10,163 13,030
1/31/2006 11,138 10,498 13,259
2/28/2006 11,121 10,481 13,238
3/31/2006 11,358 10,704 13,433
4/30/2006 11,367 10,713 13,415
5/31/2006 10,882 10,257 12,960
6/30/2006 10,937 10,308 12,909
7/31/2006 10,699 10,084 12,663
8/31/2006 10,909 10,282 13,058
9/30/2006 11,220 10,575 13,417
10/31/2006 11,595 10,928 13,889
11/30/2006 11,942 11,255 14,164
12/31/2006 11,951 11,264 14,212
1/31/2007 12,252 11,548 14,578
2/28/2007 11,978 11,289 14,304
3/31/2007 12,096 11,401 14,381
4/30/2007 12,425 11,711 15,058
5/31/2007 12,799 12,063 15,600
6/30/2007 12,325 11,616 15,367
Average Annual Total Returns -- June 30, 2007
6 MONTHS 1 YEAR 5 YEARS 10 YEARS
CLASS A (Inception 8/3/92)
Net Asset Value/1/ 3.13% 12.69% 6.10% 2.12%
With Maximum Sales Charge/2/ -2.81 6.22 4.86 1.51
CLASS B (Inception 9/13/93)
Net Asset Value/1/ 2.77 11.75 5.30 1.31
With CDSC/3/ -2.23 6.75 4.97 1.31
CLASS C (Inception 12/30/94)
Net Asset Value/1/ 2.77 11.77 5.29 1.29
With CDSC/3/ 1.77 10.77 5.29 1.29
- ----------------------------------------------------------------------
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS
Russell 1000 Growth Index/4/ 8.13% 19.04% 9.28% 4.39%
Morningstar Large Growth Fund Avg./5/ 8.13 17.17 8.96 5.47
All returns represent past performance and do not guarantee future results.
Periods of less than one year are not annualized. Share price and return will
vary, and you may have a gain or loss when you sell your shares. All results
include reinvestment of dividends and capital gains. Current returns may be
higher or lower than those shown. For performance current to the most recent
month-end, visit www.funds.natixis.com.
The table and graph do not reflect taxes shareholders might owe on any fund
distributions or when they redeem their shares
PORTFOLIO FACTS
% of Net Assets as of
FUND COMPOSITION 6/30/07 12/31/06
- ------------------------------------------------------
Common Stocks 98.8 99.4
- ------------------------------------------------------
Short-Term Investments and Other 1.2 0.6
- ------------------------------------------------------
% of Net Assets as of
TEN LARGEST HOLDINGS 6/30/07 12/31/06
- ------------------------------------------------------
Cisco Systems, Inc. 5.3 5.4
- ------------------------------------------------------
Hewlett-Packard Co. 4.0 4.1
- ------------------------------------------------------
Boeing Co. (The) 3.9 3.9
- ------------------------------------------------------
Goldman Sachs Group, Inc. 3.6 3.8
- ------------------------------------------------------
WellPoint, Inc. 3.4 --
- ------------------------------------------------------
ExxonMobil Corp. 3.3 3.3
- ------------------------------------------------------
UnitedHealth Group, Inc. 3.3 --
- ------------------------------------------------------
Symantec Corp. 3.3 --
- ------------------------------------------------------
McGraw-Hill Co., Inc. (The) 3.2 3.2
- ------------------------------------------------------
Kohl's Corp. 3.1 2.8
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ------------------------------------------------------
Retail 18.5 17.0
- ------------------------------------------------------
Aerospace & Defense 7.1 6.9
- ------------------------------------------------------
Health Care--Services 6.7 1.9
- ------------------------------------------------------
Internet 5.9 2.2
- ------------------------------------------------------
Telecommunications 5.3 5.4
- ------------------------------------------------------
Portfolio holdings and asset allocations will vary.
EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio/7/ Net Expense Ratio/8/
- -------------------------------------------------
A 2.11 1.95
- -------------------------------------------------
B 2.86 2.70
- -------------------------------------------------
C 2.86 2.70
- -------------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes maximum sales charge of 5.75%.
/3/Performance for Class B shares assumes a maximum 5.00% contingent deferred
sales charge ("CDSC") applied when you sell shares, which declines annually
between years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1, 0%.
Class C share performance assumes a 1.00% CDSC applied when you sell shares
within one year of purchase.
/4/Russell 1000 Growth Index is an unmanaged index that measures the
performance of those Russell 1000 companies with higher price-to-book ratios
and higher forecasted growth values.
/5/Morningstar Large Growth Fund Average is the average performance without
sales charges of funds with similar investment objectives, as calculated by
Morningstar, Inc.
/6/Fund performance has been increased by expense waivers/reimbursements,
without which performance would have been lower.
/7/Before waivers and reimbursements.
/8/After waivers and reimbursements. Expense reductions are contractual and are
set to expire 4/30/08.
18
ADDITIONAL INFORMATION
The views expressed in this report reflect those of the portfolio managers as
of the dates indicated. The managers' views are subject to change at any time
without notice based on changes in market or other conditions. References to
specific securities or industries should not be regarded as investment advice.
Because the funds are actively managed, there is no assurance that they will
continue to invest in the securities or industries mentioned.
For more complete information on any Natixis Fund, contact your financial
professional or call Natixis Funds and ask for a free prospectus, which
contains more complete information, including charges and other ongoing
expenses. Investors should consider a fund's objective, risks and expenses
carefully before investing. This and other fund information can be found in the
prospectus. Please read the prospectus carefully before investing.
PROXY VOTING INFORMATION
A description of the funds' proxy voting policies and procedures is available
without charge, upon request, by calling Natixis Funds at 800-225-5478; on the
funds' website at www.funds.natixis.com; and on the Securities and Exchange
Commission's (SEC) website at www.sec.gov. Information regarding how the funds
voted proxies relating to portfolio securities during the 12-month period ended
June 30, 2007 is available from the funds' website and the SEC's website.
QUARTERLY PORTFOLIO SCHEDULES
The funds file a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The funds' Forms N-Q
are available on the SEC's website at www.sec.gov and may be reviewed and
copied at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
19
UNDERSTANDING FUND EXPENSES
As a mutual fund shareholder, you incur different costs: transaction costs,
including sales charges (loads) on purchases, redemption fees and certain
exchange fees and ongoing costs, including management fees, distribution fees
(12b-1 fees), and other fund expenses. In addition, each fund assesses a
minimum balance fee of $20 on an annual basis for accounts that fall below the
required minimum to establish an account. Certain exemptions may apply. These
costs are described in more detail in the funds' prospectus. The examples below
are intended to help you understand the ongoing costs of investing in the funds
and help you compare these with the ongoing costs of investing in other mutual
funds.
The first line in the table of each Class of fund shares shows the actual
account values and actual fund expenses you would have paid on a $1,000
investment in the fund from January 1, 2007 through June 30, 2007. To estimate
the expenses you paid over the period, simply divide your account value by
$1,000 (for example $8,600 account value divided by $1,000 = 8.60) and multiply
the result by the number in the Expenses Paid During Period column as shown
below for your Class.
The second line in the table of each Class of fund shares provides information
about hypothetical account values and hypothetical expenses based on the fund's
actual expense ratios and an assumed rate of return of 5% per year before
expenses, which is not the fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid on your investment for the period. You may use
this information to compare the ongoing costs of investing in the fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown reflect ongoing costs only, and do not
include any transaction costs, such as sales charges, redemption fees or
exchange fees. Therefore, the second line in the table of each fund is useful
in comparing ongoing costs only, and will not help you determine the relative
costs of owning different funds. If transaction costs were included, total
costs would be higher.
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
CGM ADVISOR TARGETED EQUITY FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,118.60 $6.15
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,018.99 $5.86
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,114.70 $10.12
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,015.22 $9.64
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,114.80 $10.07
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,015.27 $9.59
- ------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,119.70 $4.73
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.33 $4.51
*Expenses are equal to the fund's annualized expense ratio: 1.17%, 1.93%, 1.92%
and 0.90% for Class A, B, C and Y, respectively, multiplied by the average
account value over the period multiplied by the number of days in the most
recent fiscal half-year, divided by 365 (to reflect the half-year period).
20
UNDERSTANDING FUND EXPENSES (continued)
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
HANSBERGER INTERNATIONAL FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,127.90 $7.54
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.70 $7.15
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,124.00 $11.48
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.98 $10.89
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,123.60 $11.48
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.98 $10.89
*Expenses are equal to the fund's annualized expense ratio: 1.43%, 2.18% and
2.18% for Class A, B and C, respectively, multiplied by the average account
value over the period multiplied by the number of days in the most recent
fiscal half-year, divided by 365 (to reflect the half-year period).
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
HARRIS ASSOCIATES FOCUSED VALUE FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,072.40 $7.40
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.65 $7.20
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,068.40 $11.23
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.93 $10.94
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,069.40 $11.24
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.93 $10.94
*Expenses are equal to the fund's annualized expense ratio: 1.44%, 2.19% and
2.19% for Class A, B and C, respectively, multiplied by the average account
value over the period multiplied by the number of days in the most recent
fiscal half-year, divided by 365 (to reflect the half-year period).
21
UNDERSTANDING FUND EXPENSES (continued)
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
HARRIS ASSOCIATES LARGE CAP VALUE FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,061.00 $6.39
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,018.60 $6.26
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,057.30 $10.35
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,014.73 $10.14
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,057.40 $10.25
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,014.83 $10.04
- ------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,063.40 $4.40
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,020.53 $4.31
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio (after
waiver/reimbursement): 1.25%, 2.03%, 2.01% and 0.86% for Class A, B, C and Y,
respectively, multiplied by the average account value over the period
multiplied by the number of days in the most recent fiscal half-year, divided
by 365 (to reflect the half-year period).
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
NATIXIS U.S. DIVERSIFIED PORTFOLIO 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,112.50 $7.49
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.70 $7.15
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,108.20 $11.40
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.98 $10.89
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,108.10 $11.39
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.98 $10.89
- ------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,114.50 $5.40
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,019.69 $5.16
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio: 1.43%, 2.18%, 2.18%
and 1.03% for Class A, B, C and Y, respectively, multiplied by the average
account value over the period multiplied by the number of days in the most
recent fiscal half-year, divided by 365 (to reflect the half-year period).
22
UNDERSTANDING FUND EXPENSES (continued)
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
NATIXIS VALUE FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,070.90 $6.93
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,018.10 $6.76
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,067.40 $10.76
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,014.38 $10.49
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,067.40 $10.76
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,014.38 $10.49
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio (after
waiver/reimbursement): 1.35%, 2.10% and 2.10% for Class A, B and C,
respectively, multiplied by the average account value over the period
multiplied by the number of days in the most recent fiscal half-year, divided
by 365 (to reflect the half-year period).
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
VAUGHAN NELSON SMALL CAP VALUE FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,089.50 $7.93
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.21 $7.65
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,085.50 $11.79
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.49 $11.38
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,085.50 $11.79
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.49 $11.38
- ------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,090.90 $6.32
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,018.74 $6.11
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio: 1.53%, 2.28%, 2.28%
and 1.22% for Class A, B, C and Y, respectively, multiplied by the average
account value over the period multiplied by the number of days in the most
recent fiscal half-year, divided by 365 (to reflect the half-year period).
23
UNDERSTANDING FUND EXPENSES (continued)
BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING PERIOD*
WESTPEAK CAPITAL GROWTH FUND 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,031.30 $7.55
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.36 $7.50
- ------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,027.70 $11.31
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.64 $11.23
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,027.70 $11.31
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.64 $11.23
*Expenses are equal to the fund's annualized expense ratio (after
waiver/reimbursement): 1.50%, 2.25% and 2.25% for Class A, B and C,
respectively, multiplied by the average account value over the period
multiplied by the number of days in the most recent fiscal half-year, divided
by 365 (to reflect the half-year period).
24
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
The Board of Trustees, including the Independent Trustees, considers matters
bearing on each Fund's advisory and subadvisory agreements (collectively, the
"Agreements") at most of its meetings throughout the year. Once a year, usually
in the spring, the Contract Review and Governance Committee of the Board meets
to review the Agreements to determine whether to recommend that the full Board
approve the continuation of the Agreements, typically for an additional
one-year period. After the Committee has made its recommendation, the full
Board, including the Independent Trustees, determines whether to approve the
continuation of the Agreements.
In connection with these meetings, the Trustees receive materials that the
Funds' investment advisers believe to be reasonably necessary for the Trustees
to evaluate the Agreements. These materials generally include, among other
items, (i) information on the investment performance of the Funds and the
performance of peer groups of funds and the Funds' performance benchmarks,
(ii) information on the Funds' advisory and subadvisory fees, if any, and other
expenses, including information comparing the Funds' expenses to those of peer
groups of funds and information about any applicable expense caps and fee
"breakpoints," (iii) sales and redemption data in respect of the Funds,
(iv) information about the profitability of the Agreements to the Funds'
advisers and subadvisers (collectively, the "Advisers"), and (v) information
obtained through the completion of a questionnaire by the Advisers (the
Trustees are consulted as to the information requested through that
questionnaire). The Board of Trustees, including the Independent Trustees, also
consider other matters such as (i) each Adviser's financial results and
financial condition, (ii) each Fund's investment objective and strategies and
the size, education and experience of the Advisers' respective investment
staffs and their use of technology, external research and trading cost
measurement tools, (iii) arrangements in respect of the distribution of the
Funds' shares, (iv) the procedures employed to determine the value of the
Funds' assets, (v) the allocation of the Funds' brokerage, if any, including
allocations to brokers affiliated with the Advisers and the use of "soft"
commission dollars to pay Fund expenses and to pay for research and other
similar services, (vii) the resources devoted to, and the record of compliance
with, the Funds' investment policies and restrictions, policies on personal
securities transactions and other compliance policies, and (viii) the general
economic outlook with particular emphasis on the mutual fund industry.
Throughout the process, the Trustees are afforded the opportunity to ask
questions of and request additional materials from the Advisers.
In addition to the materials requested by the Trustees in connection with the
annual consideration of the continuation of the Agreements, the Trustees
receive materials in advance of each regular quarterly meeting of the Board of
Trustees that provide detailed information about each Fund's investment
performance and the fees charged to the Funds for advisory and other services.
This information generally includes, among other things, an internal
performance rating for each Fund (and segment, in the case of Funds managed by
multiple subadvisers) based on agreed-upon criteria, graphs showing performance
and fee differentials against each Fund's peer group, performance ratings
provided by a third-party, total return information for various periods, and
third-party performance rankings for various periods comparing a Fund against
its peer group. The portfolio management team for each Fund makes periodic
presentations to the Contract Review and Governance Committee and/or the full
Board of Trustees, and Funds identified as presenting possible performance
concerns may be subject to more frequent board presentations and reviews. In
addition, each quarter the Trustees are provided with detailed statistical
information about each Fund's portfolio.
The Board of Trustees most recently approved the continuation of the Agreements
at their meeting held in June, 2007. The Agreements were continued for a
one-year period for each Fund. In considering whether to approve the
continuation of the Agreements, the Board of Trustees, including the
Independent Trustees, did not identify any single factor as determinative.
Matters considered by the Trustees, including the Independent Trustees, in
connection with their approval of the Agreements included the following:
The nature, extent and quality of the services provided to the Funds under the
Agreements. The Trustees considered the nature, extent and quality of the
services provided by the Advisers and their affiliates to the Funds and the
resources dedicated to the Funds by the Advisers and their affiliates,
including recent or planned investments by certain of the Advisers in
additional personnel or other resources. They also took note of the competitive
market for talented personnel, in particular, for personnel who have
contributed to the generation of strong investment performance. They considered
the need for the Advisers to offer competitive compensation in order to attract
and retain capable personnel.
The Trustees considered the advisory services provided by the Advisers to the
Funds, including the monitoring and oversight services provided by Natixis
Advisors with respect to subadvised Funds and the Funds for which Natixis
Advisors provides advisory oversight services. They also considered the
administrative services provided by Natixis Advisors and its affiliates to the
Funds.
For each Fund, the Trustees also considered the benefits to shareholders of
investing in a mutual fund that is part of a family of funds offering a variety
of investment disciplines and providing for a variety of fund and shareholder
services.
25
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
After reviewing these and related factors, the Trustees concluded, within the
context of their overall conclusions regarding each of the Agreements, that the
nature, extent and quality of services provided supported the renewal of the
Agreements.
Investment performance of the Funds and the Advisers. As noted above, the
Trustees received information about the performance of the Funds over various
time periods, including information which compared the performance of the Funds
to the performance of peer groups of funds and the Funds' respective
performance benchmarks. In addition, the Trustees also reviewed data prepared
by an independent third party which analyzed the performance of the Funds using
a variety of performance metrics, including metrics which also measured the
performance of the Funds on a risk adjusted basis.
With respect to each Fund, the Board concluded that the Fund's performance or
other relevant factors supported the renewal of the Agreement(s) relating to
that Fund. In the case of each Fund that had performance that lagged that of a
relevant peer group for certain (although not necessarily all) periods, the
Board concluded that other factors relevant to performance supported renewal of
the Funds' Agreements. These factors varied from Fund to Fund, but included one
or more of the following: (1) that the Fund's performance, although lagging in
certain recent periods, was strong over the longer term; (2) that the
underperformance was attributable, to a significant extent, to investment
decisions by the Fund's Advisers that were reasonable and consistent with the
Fund's investment objective and policies; (3) that the Fund's Adviser had taken
or is taking steps designed to help improve the Fund's investment performance;
(4) that the Fund's advisory fee had recently been, or is proposed to be,
reduced or the Fund's expenses capped, with the goal of helping the Fund's net
return to shareholders become more competitive; and (5) that reductions in the
Fund's expense levels resulting from decreased expenses and/or increased assets
were not yet fully reflected in the Fund's performance results.
The Trustees also considered each Adviser's performance and reputation
generally, the Funds' performance as a fund family generally, and the
historical responsiveness of the Advisers to Trustee concerns about performance
and the willingness of the Advisers to take steps intended to improve
performance.
After reviewing these and related factors, the Trustees concluded, within the
context of their overall conclusions regarding each of the Agreements, that the
performance of the Funds and the Advisers supported the renewal of the
Agreements.
The costs of the services to be provided and profits to be realized by the
Advisers and their affiliates from their respective relationships with the
Funds. The Trustees considered the fees charged to the Funds for advisory and
subadvisory services as well as the total expense levels of the Funds. This
information included comparisons (provided both by management and also by an
independent third party) of the Funds' advisory fees and total expense levels
to those of their peer groups and information about the advisory fees charged
by the Advisers to comparable accounts. In considering the fees charged to
comparable accounts, the Trustees considered, among other things, management's
representations about the differences between managing mutual funds as compared
to other types of accounts, including the additional resources required to
effectively manage mutual fund assets. In evaluating each Fund's advisory and
subadvisory fees, the Trustees also took into account the demands, complexity
and quality of the investment management of such Fund. The Trustees considered
that over the past several years, management had made recommendations regarding
reductions in advisory fee rates, implementation of advisory fee breakpoints
and the institution of advisory fee waivers and expense caps. They noted that
currently four of the eight Natixis Advisor Equity Funds in this report have
expense caps in place, and they considered the amounts waived or reimbursed by
the Advisers under these caps. The Trustees noted that several Funds had total
expense ratios or advisory fee rates that were above the median of a peer group
of Funds. The Trustees considered the circumstances that accounted for such
relatively higher expenses. The Trustees noted that for several of these Funds,
the relatively higher expense ratios resulted to a significant extent from
relatively higher expenses relating to items other than advisory fees. The
Trustees noted that management was proposing to reduce the level at which the
expenses of the Vaughan Nelson Small Cap Value Fund would be capped, effective
July 1, 2007. For Harris Associates Focused Value Fund, the Trustees noted
(i) that a recent reduction in the advisory fee rate was not fully reflected in
the historical data comparing the Fund's advisory fee rate to those of a peer
group of funds and (ii) management's representation that the Fund is managed
using a research intensive, concentrated and capacity constrained investment
discipline For Natixis U.S. Diversified Portfolio, the Trustees noted that the
Fund's multi-manager structure is more complex that the management structure of
certain funds in its peer group. The Trustees also considered the compensation
directly or indirectly received by the Advisers and their affiliates from their
relationships with the Funds. The Trustees reviewed information provided by
management as to the profitability of the Advisers' and their affiliates'
relationships with the Funds, and information about the allocation of expenses
used to calculate profitability. They also reviewed information provided by
management about the effect of distribution costs and Fund growth on Adviser
profitability, including information regarding resources spent on distribution
activities and the increase in net sales for
26
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
the family of funds. When reviewing profitability, the Trustees also considered
information about court cases in which adviser profitability was an issue, the
performance of the relevant Funds, the expense levels of the Funds, and whether
the Advisers had implemented breakpoints and/or expense caps with respect to
such Funds.
After reviewing these and related factors, the Trustees concluded, within the
context of their overall conclusions regarding each of the Agreements, that the
advisory fees charged to each of the Funds were fair and reasonable, and that
the costs of these services generally and the related profitability of the
Advisers and their affiliates in respect of their relationships with the Funds
supported the renewal of the Agreements.
Economies of Scale. The Trustees considered the existence of any economies of
scale in the provision of services by the Advisers and whether those economies
are shared with the Funds through breakpoints in their investment advisory fees
or other means, such as expense waivers. The Trustees noted that six of the
Funds had breakpoints in their advisory fees and that the remaining Funds were
subject to expense caps. The Trustees also considered management's
representation that for certain Funds the Funds' Advisers did not benefit from
economies of scale in providing services to the Funds (because of the
investment style of the Fund, the small size of the Fund or for other reasons)
or were capacity constrained with respect to the relevant investment strategy.
In considering these issues, the Trustees also took note of the costs of the
services provided (both on an absolute and a relative basis) and the
profitability to the Advisers and their affiliates of their relationships with
the Funds, as discussed above.
After reviewing these and related factors, the Trustees considered, within the
context of their overall conclusions regarding each of the Agreements, that the
extent to which economies of scale were shared with the Funds supported the
renewal of the Agreements.
The Trustees also considered other factors, which included but were not limited
to the following:
.. whether each Fund has operated in accordance with its investment objective
and the Fund's record of compliance with its investment restrictions, and
the compliance programs of the Funds and the Advisers. They also considered
the compliance-related resources the Advisers and their affiliates were
providing to the Funds.
.. the nature, quality, cost and extent of administrative and shareholder
services performed by the Advisers and their affiliates, both under the
Agreements and under separate agreements covering administrative services.
.. so-called "fallout benefits" to the Advisers, such as the engagement of
affiliates of the Advisers to provide distribution, administrative and
brokerage services to the Funds, and the benefits of research made available
to the Advisers by reason of brokerage commissions generated by the Funds'
securities transactions. The Trustees also considered the fact that Natixis
Advisors' parent company benefits from the retention of affiliated Advisers.
The Trustees considered the possible conflicts of interest associated with
these fallout and other benefits, and the reporting, disclosure and other
processes in place to disclose and monitor such possible conflicts of
interest
Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of
independent counsel, the Trustees, including the Independent Trustees,
concluded that each of the existing advisory and subadvisory agreements should
be continued through June 30, 2008.
27
CGM ADVISOR TARGETED EQUITY FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------------------
Common Stocks -- 99.0% of Net Assets
Agriculture -- 4.8%
540,000 Monsanto Co. $ 36,471,600
---------------
Auto Manufacturers -- 6.2%
375,000 Toyota Motor Corp., Sponsored ADR(b) 47,205,000
---------------
Banking -- 6.0%
1,035,000 Banco Itau Holding Financeira SA, ADR(b) 45,995,400
---------------
Chemicals -- 4.7%
501,200 Praxair, Inc.(b) 36,081,388
---------------
Computers -- 5.1%
320,000 Apple, Inc.(c) 39,052,800
---------------
Diversified Financial Services -- 9.5%
535,000 Fannie Mae 34,951,550
225,000 MasterCard, Inc., Class A(b) 37,320,750
---------------
72,272,300
---------------
Food -- 9.3%
1,270,000 Kroger Co. 35,725,100
1,020,000 Safeway, Inc.(b) 34,710,600
---------------
70,435,700
---------------
Machinery -- Diversified -- 5.2%
325,000 Deere & Co.(b) 39,240,500
---------------
Mining -- 6.5%
1,115,000 Companhia Vale do Rio Doce, ADR 49,673,250
---------------
Oil & Gas -- 8.9%
295,000 ConocoPhillips 23,157,500
365,000 Petroleo Brasileiro SA, ADR 44,263,550
---------------
67,421,050
---------------
Oil & Gas Services -- 18.2%
525,000 Baker Hughes, Inc.(b) 44,168,250
420,000 National-Oilwell Varco, Inc.(c) 43,780,800
600,000 Schlumberger, Ltd. 50,964,000
---------------
138,913,050
---------------
Restaurants -- 2.9%
440,000 McDonald's Corp. 22,334,400
---------------
Telecommunications -- 11.7%
730,000 America Movil SAB de C.V., Series L, ADR 45,208,900
1,055,000 AT&T, Inc. 43,782,500
---------------
88,991,400
---------------
Total Common Stocks (Identified Cost $633,025,226) 754,087,838
---------------
Principal
Amount/
Shares Description Value (+)
- -----------------------------------------------------------------------------------------------------
Short-Term Investments -- 13.7%
$ 6,930,000 American Express Credit Corp.,
5.230%, due 7/02/2007 $ 6,930,000
97,935,744 State Street Securities Lending Quality Trust(d) 97,935,744
---------------
Total Short-Term Investments (Identified Cost $104,865,744) 104,865,744
---------------
Total Investments -- 112.7%
(Identified Cost $737,890,970)(a) 858,953,582
Other assets less liabilities -- (12.7)% (97,088,379)
---------------
Total Net Assets -- 100% $ 761,865,203
===============
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $737,890,970 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 125,241,248
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (4,178,636)
---------------
Net unrealized appreciation $ 121,062,612
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of securities lending collateral.
ADR An American Depositary Receipt is a certificate issued by a custodian bank representing
the right to receive securities of the foreign issuer described. The values of ADRs are
significantly influenced by trading on exchanges not located in the United States.
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Oil & Gas Services 18.2%
Telecommunications 11.7
Diversified Financial Services 9.5
Food 9.3
Oil & Gas 8.9
Mining 6.5
Auto Manufacturers 6.2
Banking 6.0
Machinery -- Diversified 5.2
Computers 5.1
Agriculture 4.8
Chemicals 4.7
Restaurants 2.9
See accompanying notes to financial statements.
28
HANSBERGER INTERNATIONAL FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------------------------
Common Stocks -- 99.4% of Net Assets
Australia -- 2.5%
22,545 Rio Tinto, Ltd.(b) $ 1,888,238
56,429 Westpac Banking Corp. 1,227,588
39,963 Woodside Petroleum, Ltd. 1,550,040
---------------
4,665,866
---------------
Austria -- 0.7%
15,462 Erste Bank Der Oesterreichischen Sparkassen AG(b) 1,209,582
---------------
Brazil -- 4.1%
21,829 Banco Itau Holding Financeira SA, ADR 970,081
44,255 Cia Vale do Rio Doce, Sponsored ADR 1,668,413
14,660 Companhia de Bebidas das Americas, Preferred ADR 1,026,200
57,902 Companhia Energetica de Minas Gerais, Sponsored ADR(b) 1,221,732
21,869 Petroleo Brasileiro SA, ADR 2,652,054
---------------
7,538,480
---------------
Canada -- 3.5%
32,984 Cameco Corp.(b) 1,673,608
17,392 IGM Financial, Inc. 845,232
24,369 Loblaw Cos., Ltd. 1,188,425
42,878 Manulife Financial Corp. 1,600,207
13,203 Suncor Energy, Inc. 1,187,214
---------------
6,494,686
---------------
China -- 2.6%
388,000 Cosco Pacific, Ltd. 1,014,759
936,000 Datang International Power Generation Co., Ltd., Class H(c) 1,446,040
2,084,410 Denway Motors, Ltd. 978,333
26,478 Focus Media Holding Ltd., ADR(b)(c) 1,337,139
---------------
4,776,271
---------------
Denmark -- 1.0%
28,418 Vestas Wind Systems A/S(c) 1,881,302
---------------
France -- 9.5%
66,377 Alcatel-Lucent(b) 932,518
35,553 Axa(b) 1,540,295
11,182 BNP Paribas(b) 1,337,264
29,039 Carrefour SA(b) 2,049,249
12,477 Electricite de France(b) 1,355,687
16,997 Iliad SA(b) 1,725,343
8,759 LVMH Moet Hennessy Louis Vuitton SA(b) 1,014,065
21,966 Neuf Cegetel(b)(c) 863,355
9,151 Schneider Electric SA(b) 1,289,693
32,073 STMicroelectronics NV(b) 622,922
16,768 Suez SA(b) 964,295
16,337 Total SA(b) 1,332,427
13,634 Total SA, Sponsored ADR 1,104,081
32,850 Vivendi(b) 1,418,744
---------------
17,549,938
---------------
Germany -- 5.8%
41,905 Adidas AG(b) 2,653,188
29,776 Commerzbank AG 1,430,258
8,924 RWE AG(b) 954,055
26,217 SAP AG(b) 1,350,852
28,545 SAP AG, Sponsored ADR(b) 1,457,793
10,257 Siemens AG (Registered) 1,479,440
5,445 Wacker Chemie AG(b) 1,289,668
---------------
10,615,254
---------------
Shares Description Value (+)
- ------------------------------------------------------------------------------------
Greece -- 1.3%
24,163 Folli-Follie SA $ 981,102
23,029 National Bank of Greece SA 1,321,548
---------------
2,302,650
---------------
Hong Kong -- 1.7%
151,800 Esprit Holdings, Ltd. 1,925,844
397,000 Foxconn International Holdings, Ltd.(c) 1,132,226
---------------
3,058,070
---------------
India -- 1.8%
15,116 HDFC Bank, Ltd., ADR(b) 1,273,674
41,082 Infosys Technologies, Ltd., Sponsored ADR(b) 2,069,711
---------------
3,343,385
---------------
Indonesia -- 0.4%
2,363,000 PT Bank Mandiri 817,308
---------------
Ireland -- 0.7%
61,959 Anglo Irish Bank Corp. PLC 1,266,261
---------------
Israel -- 0.8%
34,678 Teva Pharmaceutical Industries, Ltd., Sponsored ADR 1,430,467
---------------
Italy -- 4.2%
37,744 ENI SpA 1,374,175
88,086 Saipem SpA(b) 3,023,417
374,267 UniCredito Italiano SpA 3,358,436
---------------
7,756,028
---------------
Japan -- 15.7%
144,000 Bank of Yokohama, Ltd. (The) 1,010,485
18,200 Canon, Inc.(b) 1,068,719
59,500 Daiei, Inc.(b)(c) 629,190
204,000 Isuzu Motors, Ltd.(b) 1,106,778
184,000 Joyo Bank, Ltd. (The) 1,144,723
38,100 JS Group Corp. 773,604
27,200 Millea Holdings, Inc. 1,117,823
88,000 NGK Insulators, Ltd. 2,165,604
16,500 Nidec Corp.(b) 970,233
4,300 Nintendo Co., Ltd.(b) 1,575,066
29,500 Nitto Denko Corp.(b) 1,490,274
44,200 Nomura Holdings, Inc.(b) 861,563
65,000 Onward Kashiyama Co., Ltd. 830,416
5,360 ORIX Corp. 1,412,646
204,000 Osaka Gas Co., Ltd. 758,838
24,700 Promise Co., Ltd.(b) 762,315
52,000 Sharp Corp. 988,264
49,000 Shionogi & Co., Ltd. 799,919
13,000 SMC Corp. 1,731,574
95,400 Sumitomo Corp. 1,743,350
135 Sumitomo Mitsui Financial Group, Inc.(b) 1,260,914
106,000 Sumitomo Trust & Banking Co., Ltd. (The) 1,011,574
12,000 Takeda Pharmaceutical Co., Ltd. 775,797
27,400 Toyota Motor Corp. 1,735,797
10,800 Yamada Denki Co., Ltd. 1,129,779
---------------
28,855,245
---------------
Luxembourg -- 1.0%
21,044 Millicom International Cellular SA(b)(c) 1,928,472
---------------
Mexico -- 2.7%
24,445 America Movil SAB de CV, Series L, ADR(b) 1,513,879
39,153 Cemex SAB de CV, Sponsored ADR(b)(c) 1,444,746
24,272 Fomento Economico Mexicano, SAB de CV, Sponsored ADR 954,375
28,055 Wal-Mart de Mexico SA de CV, Sponsored ADR, Series V(b) 1,059,076
---------------
4,972,076
---------------
See accompanying notes to financial statements.
29
HANSBERGER INTERNATIONAL FUND -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------------------------
Netherlands -- 1.8%
19,309 ING Groep NV(b) $ 856,926
28,986 Koninklijke (Royal) Philips Electronics NV 1,226,687
23,881 Royal Numico NV(b) 1,245,356
---------------
3,328,969
---------------
Norway -- 0.9%
40,800 Renewable Energy Corp. A/S(c) 1,591,331
---------------
Republic of Korea -- 2.9%
25,343 Hyundai Motor Co. 2,002,532
9,845 Kookmin Bank, Sponsored ADR 863,604
2,138 Samsung Electronics Co., Ltd. 1,309,853
3,612 Samsung Electronics Co., Ltd., GDR, 144A 1,117,914
---------------
5,293,903
---------------
Russia -- 2.0%
31,286 Evraz Group SA, GDR, 144A 1,285,854
19,983 Gazprom, Sponsored ADR(b) 837,288
11,923 LUKOIL, Sponsored ADR 908,533
3,023 Mining and Metallurgical Co. Norilsk Nickel, ADR 671,106
---------------
3,702,781
---------------
Singapore -- 1.2%
77,000 DBS Group Holdings, Ltd. 1,146,889
138,000 Keppel Corp., Ltd. 1,126,898
---------------
2,273,787
---------------
Spain -- 3.4%
71,982 Banco Bilbao Vizcaya Argentaria SA(b) 1,773,116
155,971 Banco Santander Central Hispano SA(b) 2,889,943
69,503 Telefonica SA 1,555,898
---------------
6,218,957
---------------
Switzerland -- 9.4%
75,086 ABB, Ltd. 1,708,875
11,697 Ciba Specialty Chemicals AG 763,680
15,159 Credit Suisse Group 1,084,027
12,399 Holcim, Ltd. (Registered)(b) 1,348,004
12,857 Lonza Group AG(b) 1,185,181
5,622 Nestle SA 2,144,783
59,609 Novartis AG 3,367,189
9,639 Roche Holding AG 1,715,529
6,336 Syngenta AG 1,240,746
8,090 Synthes, Inc. 972,919
28,760 UBS AG 1,732,899
---------------
17,263,832
---------------
Taiwan -- 1.2%
521,619 Taiwan Semiconductor Manufacturing Co., Ltd. 1,125,260
101,336 Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR 1,127,870
---------------
2,253,130
---------------
Thailand -- 0.6%
287,300 Bangkok Bank PCL 1,015,224
---------------
United Kingdom -- 16.0%
484,151 ARM Holdings PLC(b) 1,424,308
18,911 AstraZeneca PLC 1,018,874
79,891 Autonomy Corp. PLC(c) 1,155,090
112,186 Barclays PLC 1,567,954
71,457 BHP Billiton PLC 1,994,551
Shares Description Value (+)
- ---------------------------------------------------------------------------------------------------
United Kingdom -- continued
194,947 British Sky Broadcasting Group PLC $ 2,505,428
19,544 Carnival PLC 936,025
137,653 Cattles PLC 1,083,571
58,558 GlaxoSmithKline PLC 1,534,554
45,224 HBOS PLC 894,975
62,000 HSBC Holdings PLC 1,129,911
120,238 Man Group PLC 1,470,431
155,182 Michael Page International PLC 1,637,569
57,300 Northern Rock PLC 998,757
265,629 Old Mutual PLC 900,929
130,844 Prudential PLC 1,876,020
18,305 Reckitt Benckiser PLC 1,005,339
71,725 Royal Bank of Scotland Group PLC 911,716
363,269 Signet Group PLC 758,660
159,774 Smith & Nephew PLC 1,986,014
119,521 Tesco PLC 1,004,443
514,371 Vodafone Group PLC 1,733,221
---------------
29,528,340
---------------
Total Common Stocks (Identified Cost $134,249,502) 182,931,595
---------------
Shares/
Principal
Amount
- ---------------------------------------------------------------------------------------------------
Short-Term Investments -- 25.9% of Net Assets
46,746,802 State Street Securities Lending Quality Trust(d) 46,746,802
$ 925,419 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$925,807 on 7/2/2007, collateralized by $775,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $951,313
including accrued interest 925,419
---------------
Total Short-Term Investments (Identified Cost $47,672,221) 47,672,221
---------------
Total Investments -- 125.3%
(Identified Cost $181,921,723)(a) 230,603,816
Other assets less liabilities -- (25.3)% (46,609,766)
---------------
Net Assets -- 100% $ 183,994,050
===============
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $181,921,723 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 49,395,357
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (713,264)
---------------
Net unrealized appreciation $ 48,682,093
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of security lending collateral.
144A Securities exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registrations, normally to
qualified institutional buyers. At the period end, the value of these amounted to
$2,403,768 or 1.3% of net assets.
See accompanying notes to financial statements.
30
HANSBERGER INTERNATIONAL FUND -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
ADR/GDR An American Depositary Receipt or Global Depositary Receipt is a certificate issued by a
custodian bank representing the right to receive securities of the foreign issuer described.
The values of ADRs and GDRs are significantly influenced by trading on exchanges not
located in the United States.
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Banks 16.8%
Oil & Gas 6.0
Pharmaceuticals 5.8
Telecommunications 5.3
Diversified Financial Services 4.4
Insurance 4.3
Food 4.2
Semiconductors 3.7
Mining 3.4
Software 3.3
Chemicals 3.2
Auto Manufacturers 3.2
Electric 2.7
Retail 2.5
Electrical Components & Equipment 2.3
Media 2.1
Other, less than 2% each 26.2
See accompanying notes to financial statements.
31
HARRIS ASSOCIATES FOCUSED VALUE FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- --------------------------------------------------------------------------
Common Stocks -- 99.2% of Net Assets
Apparel -- 1.7%
92,400 Liz Claiborne, Inc.(b) $ 3,446,520
---------------
Apparel Retailers -- 4.8%
383,000 Timberland Co.(b)(c) 9,647,770
---------------
Chemicals -- 6.1%
204,000 Huntsman Corp.(b) 4,959,240
142,700 International Flavors & Fragrances, Inc. 7,440,378
---------------
12,399,618
---------------
Distribution & Wholesale -- 1.5%
36,900 CDW Corp.(c) 3,135,393
---------------
Diversified Financial Services -- 3.5%
85,800 Morgan Stanley 7,196,904
---------------
Electronics -- 3.5%
272,300 PerkinElmer, Inc. 7,096,138
---------------
Health Care -- Products -- 5.9%
173,100 Bausch & Lomb, Inc.(b) 12,020,064
---------------
Health Care -- Services -- 8.5%
284,000 MDS, Inc.(b) 5,776,560
173,500 Omnicare, Inc.(b) 6,256,410
794,800 Tenet Healthcare Corp.(b)(c) 5,174,148
---------------
17,207,118
---------------
Home Builders -- 2.8%
283,000 D.R. Horton, Inc. 5,640,190
---------------
Insurance -- 3.8%
367,700 Conseco, Inc.(c) 7,681,253
---------------
Manufacturing -- 1.3%
77,400 Tyco International, Ltd. 2,615,346
---------------
Media -- 15.1%
215,700 Cablevision Systems Corp., Class A(c) 7,806,183
504,220 Discovery Holding Co.(c) 11,592,018
38,000 Liberty Media Corp. - Capital, Series A(c) 4,471,840
327,900 Time Warner, Inc. 6,899,016
---------------
30,769,057
---------------
Pharmaceuticals -- 2.3%
121,000 Hospira, Inc.(c) 4,723,840
---------------
Restaurants -- 9.4%
187,500 McDonald's Corp. 9,517,500
296,000 Yum! Brands, Inc. 9,685,120
---------------
19,202,620
---------------
Savings & Loans -- 3.9%
248,815 Sovereign Bancorp, Inc. 5,259,949
60,000 Washington Mutual, Inc. 2,558,400
---------------
7,818,349
---------------
Semiconductors -- 18.9%
561,000 Intel Corp. 13,329,360
143,800 International Rectifier Corp.(c) 5,357,988
557,600 Micron Technology, Inc.(b)(c) 6,986,728
453,900 National Semiconductor Corp.(b) 12,831,753
---------------
38,505,829
---------------
Shares Description Value (+)
- -----------------------------------------------------------------------------------------------
Telecommunications -- 6.2%
131,600 Sprint Nextel Corp. $ 2,725,436
408,200 Virgin Media, Inc. 9,947,834
---------------
12,673,270
---------------
Total Common Stocks (Identified Cost $170,148,265) 201,779,279
---------------
Shares/
Principal
Amount
- -----------------------------------------------------------------------------------------------
Short-Term Investments -- 21.9%
41,831,557 State Street Securities Lending Quality Trust(d) 41,831,557
$ 2,709,265 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$2,710,225 on 7/2/2007, collateralized by $2,255,000 U.S.
Treasury Bond, 7.25% due 8/15/2022 valued at $2,768,013,
including accrued interest 2,709,265
---------------
Total Short-Term Investments (Identified Cost $44,540,822) 44,540,822
---------------
Total Investments -- 121.1%
(Identified Cost $214,689,087)(a) 246,320,101
Other assets less liabilities -- (21.1)% (42,874,227)
---------------
Total Net Assets -- 100% $ 203,445,874
===============
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $214,689,087 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 37,180,848
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (5,549,834)
---------------
Net unrealized appreciation $ 31,631,014
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of securities lending collateral.
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Semiconductors 18.9%
Media 15.1
Restaurants 9.4
Health Care -- Services 8.5
Telecommunications 6.2
Chemicals 6.1
Health Care -- Products 5.9
Apparel Retailers 4.8
Savings & Loans 3.9
Insurance 3.8
Diversified Financial Services 3.5
Electronics 3.5
Home Builders 2.8
Pharmaceuticals 2.3
Others, less than 2% each 4.5
See accompanying notes to financial statements.
32
HARRIS ASSOCIATES LARGE CAP VALUE FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- -----------------------------------------------------------------------
Common Stocks -- 98.6% of Net Assets
Aerospace & Defense -- 2.6%
33,900 Honeywell International, Inc. $ 1,907,892
94,300 Raytheon Co. 5,081,827
---------------
6,989,719
---------------
Athletic Footwear -- 1.9%
86,400 NIKE, Inc., Class B 5,036,256
---------------
Banks -- 2.4%
143,900 Mellon Financial Corp. 6,331,600
---------------
Beverages -- 2.0%
53,200 Coca-Cola Co. (The) 2,782,892
31,100 Diageo PLC, Sponsored ADR 2,590,941
---------------
5,373,833
---------------
Chemicals -- 1.9%
111,100 Dow Chemical Co. (The) 4,912,842
---------------
Computers -- 10.2%
419,600 Dell, Inc.(b) 11,979,580
240,600 Hewlett-Packard Co. 10,735,572
822,600 Sun Microsystems, Inc.(b) 4,326,876
---------------
27,042,028
---------------
Diversified Financial Services -- 14.3%
121,500 American Express Co. 7,433,370
76,000 Capital One Financial Corp. 5,961,440
95,600 Citigroup, Inc. 4,903,324
195,700 JPMorgan Chase & Co. 9,481,665
122,100 Morgan Stanley 10,241,748
---------------
38,021,547
---------------
Health Care -- Products -- 2.1%
108,600 Medtronic, Inc. 5,631,996
---------------
Home Builders -- 1.7%
70,900 Lennar Corp., Class A 2,592,104
87,200 Pulte Homes, Inc.(c) 1,957,640
---------------
4,549,744
---------------
Household Products & Wares -- 1.8%
57,100 Fortune Brands, Inc. 4,703,327
---------------
Insurance -- 3.2%
52,700 Aflac, Inc. 2,708,780
240,500 Progressive Corp. 5,755,165
---------------
8,463,945
---------------
Leisure Time -- 5.4%
184,500 Carnival Corp. 8,998,065
87,900 Harley-Davidson, Inc.(c) 5,239,719
---------------
14,237,784
---------------
Manufacturing -- 1.6%
127,200 Tyco International, Ltd. 4,298,088
---------------
Media -- 11.7%
42,210 Liberty Media Corp. - Capital, Series A(b) 4,967,273
522,700 Time Warner, Inc. 10,997,608
282,200 Viacom, Inc., Class B(b) 11,747,986
96,400 Walt Disney Co. (The) 3,291,096
---------------
31,003,963
---------------
Office & Business Equipment -- 1.1%
149,600 Xerox Corp.(b) 2,764,608
---------------
Restaurants -- 4.3%
224,400 McDonald's Corp. 11,390,544
---------------
Shares Description Value (+)
- -----------------------------------------------------------------------------------------------------
Retail -- 6.9%
202,500 Home Depot, Inc. $ 7,968,375
71,800 Limited Brands, Inc. 1,970,910
173,900 Wal-Mart Stores, Inc. 8,366,329
---------------
18,305,614
---------------
Savings & Loans -- 2.4%
151,400 Washington Mutual, Inc.(c) 6,455,696
---------------
Semiconductors -- 8.6%
674,800 Intel Corp. 16,033,248
183,000 Texas Instruments, Inc. 6,886,290
---------------
22,919,538
---------------
Telecommunications -- 6.8%
420,300 Motorola, Inc. 7,439,310
510,600 Sprint Nextel Corp. 10,574,526
---------------
18,013,836
---------------
Transportation -- 5.7%
24,000 FedEx Corp. 2,663,280
109,000 Union Pacific Corp. 12,551,350
---------------
15,214,630
---------------
Total Common Stocks (Identified Cost $208,341,739) 261,661,138
---------------
Shares/
Principal
Amount
- -----------------------------------------------------------------------------------------------------
Short-Term Investments -- 6.6%
12,037,959 State Street Securities Lending Quality Trust(d) 12,037,959
$ 5,388,363 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$5,390,272 on 7/2/2007, collateralized by $4,480,000 U.S.
Treasury Bond, 7.25% due 8/15/2022 valued at $5,499,200,
including accrued interest 5,388,363
---------------
Total Short-Term Investments (Identified Cost $17,426,322) 17,426,322
---------------
Total Investments -- 105.2%
(Identified Cost $225,768,061)(a) 279,087,460
Other assets less liabilities -- (5.2)% (13,768,445)
---------------
Net Assets -- 100% $ 265,319,015
===============
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $225,768,061 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 55,250,001
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (1,930,602)
---------------
Net unrealized appreciation $ 53,319,399
===============
(b) Non-income producing security.
(c) All or a portion of this security was on loan to brokers at June 30, 2007.
(d) Represents investment of securities lending collateral.
ADR An American Depositary Receipt is a certificate issued by a custodian bank representing
the right to receive securities of the foreign issuer described. The values of ADRs are
significantly influenced by trading on exchanges not located in the United States.
See accompanying notes to financial statements.
33
HARRIS ASSOCIATES LARGE CAP VALUE FUND -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Diversified Financial Services 14.3%
Media 11.7
Computers 10.2
Semiconductors 8.6
Retail 6.9
Telecommunications 6.8
Transportation 5.7
Leisure Time 5.4
Restaurants 4.3
Insurance 3.2
Aerospace & Defense 2.6
Savings & Loans 2.4
Banks 2.4
Health Care -- Products 2.1
Beverages 2.0
Others, less than 2% each 10.0
See accompanying notes to financial statements.
34
NATIXIS U.S. DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- -------------------------------------------------------------------
Common Stocks -- 97.8% of Net Assets
Advertising -- 0.4%
44,214 Focus Media Holding Ltd., ADR(b)(c) $ 2,232,807
---------------
Aerospace & Defense -- 2.5%
128,590 BE Aerospace, Inc.(c) 5,310,767
23,700 Boeing Co. (The) 2,278,992
22,900 Honeywell International, Inc. 1,288,812
14,200 Lockheed Martin Corp. 1,336,646
63,700 Raytheon Co. 3,432,793
25,000 United Technologies Corp. 1,773,250
---------------
15,421,260
---------------
Agriculture -- 0.3%
30,600 Monsanto Co. 2,066,724
---------------
Airlines -- 0.4%
54,677 UAL Corp.(b)(c) 2,219,339
---------------
Apparel -- 1.4%
40,400 Coach, Inc.(c) 1,914,556
71,734 Gildan Activewear, Inc.(b)(c) 2,459,759
49,889 Guess ?, Inc.(b) 2,396,668
80,376 Hanesbrands, Inc.(c) 2,172,563
---------------
8,943,546
---------------
Athletic Footwear -- 0.5%
58,500 NIKE, Inc., Class B(b) 3,409,965
---------------
Banks -- 2.6%
55,200 BOK Financial Corp. 2,948,784
131,000 Colonial BancGroup, Inc. 3,271,070
67,925 East West Bancorp, Inc.(b) 2,640,924
96,200 Mellon Financial Corp. 4,232,800
23,500 State Street Corp. 1,607,400
159,500 Superior Bancorp(b)(c) 1,631,685
---------------
16,332,663
---------------
Beverages -- 0.9%
36,000 Coca-Cola Co. (The) 1,883,160
20,900 Diageo PLC, Sponsored ADR 1,741,179
29,700 PepsiCo, Inc. 1,926,045
---------------
5,550,384
---------------
Biotechnology -- 1.2%
56,589 Celgene Corp.(b)(c) 3,244,247
17,400 Genentech, Inc.(c) 1,316,484
33,635 Illumina, Inc.(b)(c) 1,365,245
70,821 PDL BioPharma, Inc.(b)(c) 1,650,129
---------------
7,576,105
---------------
Building Materials -- 2.3%
50,947 American Standard Cos., Inc. 3,004,854
65,920 Armstrong World Industries, Inc.(b)(c) 3,305,888
145,585 Comfort Systems USA, Inc. 2,064,395
102,468 Owens Corning, Inc.(b)(c) 3,445,999
30,917 Texas Industries, Inc.(b) 2,424,202
---------------
14,245,338
---------------
Chemicals -- 2.5%
14,400 Air Products & Chemicals, Inc. 1,157,328
35,451 Airgas, Inc. 1,698,103
186,716 Chemtura Corp. 2,074,415
36,421 Cytec Industries, Inc. 2,322,567
75,200 Dow Chemical Co. (The) 3,325,344
75,205 Mosaic Co. (The)(c) 2,934,499
Shares Description Value (+)
- ----------------------------------------------------------------------------------------------
Chemicals -- continued
8,400 Potash Corp. of Saskatchewan, Inc. $ 654,948
23,300 Praxair, Inc. 1,677,367
---------------
15,844,571
---------------
Coal -- 0.0%
5,800 CONSOL Energy, Inc. 267,438
---------------
Commercial Services -- 3.8%
87,423 Avis Budget Group, Inc.(c) 2,485,436
48,866 Corrections Corp. of America(b)(c) 3,083,933
10,509 CorVel Corp.(c) 274,705
128,349 Exponent, Inc.(c) 2,871,167
143,407 Interactive Data Corp.(b) 3,840,439
113,305 Live Nation, Inc.(b)(c) 2,535,766
38,269 New Oriental Education & Technology Group, Inc., Sponsored ADR(c) 2,055,811
37,334 R.H. Donnelley Corp.(b)(c) 2,829,171
57,010 Rent-A-Center, Inc.(b)(c) 1,495,372
71,873 Wright Express Corp.(c) 2,463,088
---------------
23,934,888
---------------
Computers -- 3.9%
12,300 Apple, Inc.(c) 1,501,092
10,400 Cognizant Technology Solutions Corp., Class A(c) 780,936
283,500 Dell, Inc.(c) 8,093,925
85,800 EMC Corp.(c) 1,552,980
162,600 Hewlett-Packard Co. 7,255,212
49,611 Riverbed Technology, Inc.(c) 2,173,954
545,900 Sun Microsystems, Inc.(c) 2,871,434
---------------
24,229,533
---------------
Cosmetics & Personal Care -- 1.0%
154,386 Alberto-Culver Co. 3,662,036
44,000 Procter & Gamble Co. 2,692,360
---------------
6,354,396
---------------
Diversified Financial Services -- 8.6%
4,300 Affiliated Managers Group, Inc.(b)(c) 553,668
81,400 American Express Co. 4,980,052
352,808 Broadridge Financial Solutions, Inc. 6,745,689
50,600 Capital One Financial Corp. 3,969,064
60,100 Charles Schwab Corp. (The) 1,233,252
2,400 Chicago Mercantile Exchange Holdings, Inc. 1,282,464
64,100 Citigroup, Inc. 3,287,689
10,300 Franklin Resources, Inc. 1,364,441
27,055 GFI Group, Inc.(b)(c) 1,960,946
32,320 Intercontinental Exchange, Inc.(c) 4,778,512
154,600 JPMorgan Chase & Co. 7,490,370
12,302 MasterCard, Inc., Class A(b) 2,040,533
82,100 Morgan Stanley 6,886,548
63,650 National Financial Partners Corp.(b) 2,947,632
42,689 Nuveen Investments, Inc., Class A(b) 2,653,121
14,355 Nymex Holdings, Inc.(b) 1,803,419
---------------
53,977,400
---------------
Electric -- 2.3%
32,088 Allete, Inc.(b) 1,509,740
50,879 CMS Energy Corp.(b) 875,119
61,257 DTE Energy Co. 2,953,812
50,942 MDU Resources Group, Inc.(b) 1,428,414
153,200 NRG Energy, Inc.(b)(c) 6,368,524
53,665 Portland General Electric Co.(b) 1,472,568
---------------
14,608,177
---------------
See accompanying notes to financial statements.
35
NATIXIS U.S. DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------
Electrical Components & Equipment -- 1.7%
70,267 AMETEK, Inc. $ 2,788,195
36,400 Emerson Electric Co. 1,703,520
80,374 General Cable Corp.(b)(c) 6,088,330
---------------
10,580,045
---------------
Electronics -- 2.2%
102,394 Amphenol Corp., Class A 3,650,346
66,305 Avnet, Inc.(b)(c) 2,628,330
43,350 Mettler-Toledo International, Inc.(c) 4,140,358
104,575 PerkinElmer, Inc. 2,725,225
9,000 Waters Corp.(c) 534,240
---------------
13,678,499
---------------
Energy-Alternate Sources -- 0.3%
20,575 First Solar, Inc.(b)(c) 1,837,142
---------------
Engineering & Construction -- 0.6%
8,700 Fluor Corp.(b) 968,919
14,000 Jacobs Engineering Group, Inc.(b)(c) 805,140
74,845 KBR, Inc.(c) 1,963,184
---------------
3,737,243
---------------
Environmental Control -- 0.6%
80,346 Stericycle, Inc.(c) 3,572,183
---------------
Food -- 0.6%
123,095 Winn-Dixie Stores, Inc.(b)(c) 3,606,684
---------------
Forest Products & Paper -- 1.7%
461,040 Domtar Corp.(c) 5,145,207
63,244 Potlatch Corp.(b) 2,722,654
42,355 Temple-Inland, Inc. 2,606,103
---------------
10,473,964
---------------
Gas -- 0.7%
33,028 Oneok, Inc. 1,664,941
106,581 UGI Corp. 2,907,530
---------------
4,572,471
---------------
Health Care -- Capital Equipment -- 0.3%
35,300 Thermo Fisher Scientific, Inc.(c) 1,825,716
---------------
Health Care -- Products -- 2.7%
8,300 Alcon, Inc. 1,119,753
52,355 Beckman Coulter, Inc. 3,386,321
8,000 Cytyc Corp.(c) 344,880
12,898 Hillenbrand Industries, Inc. 838,370
28,575 Hologic, Inc.(c) 1,580,483
26,933 Intuitive Surgical, Inc.(b)(c) 3,737,493
72,300 Medtronic, Inc. 3,749,478
23,900 Zimmer Holdings, Inc.(c) 2,028,871
---------------
16,785,649
---------------
Health Care -- Services -- 0.1%
10,600 Covance, Inc.(c) 726,736
---------------
Home Builders -- 0.7%
31,956 Coachmen Industries, Inc.(b) 308,695
47,600 Lennar Corp., Class A(b) 1,740,256
51,900 Pulte Homes, Inc.(b) 1,165,155
44,900 Winnebago Industries(b) 1,325,448
---------------
4,539,554
---------------
Household Products & Wares -- 1.5%
57,615 Church & Dwight Co., Inc.(b) 2,792,023
38,600 Fortune Brands, Inc. 3,179,482
105,983 Fossil, Inc.(b)(c) 3,125,439
---------------
9,096,944
---------------
Shares Description Value (+)
- --------------------------------------------------------------------------------
Insurance -- 2.6%
34,600 Aflac, Inc. $ 1,778,440
210,358 AmCOMP, Inc.(c) 2,050,990
30,400 American International Group, Inc. 2,128,912
53,236 Assurant, Inc. 3,136,665
100,315 Employers Holdings, Inc. 2,130,691
25,175 Navigators Group, Inc.(c) 1,356,933
161,000 Progressive Corp. 3,852,730
---------------
16,435,361
---------------
Internet -- 2.0%
31,700 Akamai Technologies, Inc.(b)(c) 1,541,888
23,876 Ctrip.com International, Ltd., ADR(b) 1,877,370
22,760 F5 Networks, Inc.(c) 1,834,456
7,600 Google, Inc., Class A(c) 3,977,688
66,300 McAfee, Inc.(c) 2,333,760
47,200 Yahoo!, Inc.(c) 1,280,536
---------------
12,845,698
---------------
Iron & Steel -- 0.4%
22,540 Chaparral Steel Co. 1,619,950
10,679 United States Steel Corp. 1,161,341
---------------
2,781,291
---------------
Leisure Time -- 1.5%
122,900 Carnival Corp. 5,993,833
58,600 Harley-Davidson, Inc. 3,493,146
---------------
9,486,979
---------------
Lodging & Gaming -- 0.7%
125,411 Wyndham Worldwide Corp.(c) 4,547,403
---------------
Machinery -- Construction & Mining -- 0.2%
7,400 Bucyrus International, Inc., Class A(b) 523,772
6,800 Terex Corp.(c) 552,840
---------------
1,076,612
---------------
Machinery -- Diversified -- 1.7%
49,558 AGCO Corp.(c) 2,151,313
91,310 Albany International Corp., Class A(b) 3,692,576
4,600 Deere & Co. 555,404
14,200 Textron, Inc. 1,563,562
80,500 Wabtec Corp. 2,940,665
---------------
10,903,520
---------------
Manufacturing -- 2.0%
71,895 Actuant Corp., Class A(b) 4,533,698
73,100 General Electric Co. 2,798,268
44,418 Roper Industries, Inc.(b) 2,536,268
85,700 Tyco International, Ltd. 2,895,803
---------------
12,764,037
---------------
Media -- 4.8%
19,286 Central European Media Enterprises Ltd., Class A(c) 1,881,928
72,700 Comcast Corp., Class A(c) 2,044,324
89,850 Idearc, Inc.(b) 3,174,400
28,205 Liberty Media Corp. -- Capital, Series A(c) 3,319,164
61,050 Rogers Communications, Inc., Class B 2,594,015
350,000 Time Warner, Inc. 7,364,000
187,900 Viacom, Inc., Class B(c) 7,822,277
64,600 Walt Disney Co. (The) 2,205,444
---------------
30,405,552
---------------
See accompanying notes to financial statements.
36
NATIXIS U.S. DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ------------------------------------------------------------------------
Metal Fabricate & Hardware -- 0.7%
50,444 Mueller Water Products, Inc., Class A(b) $ 860,575
30,626 Precision Castparts Corp. 3,716,771
---------------
4,577,346
---------------
Metals -- 0.3%
7,300 Allegheny Technologies, Inc. 765,624
13,500 Freeport-McMoRan Copper & Gold, Inc. 1,118,070
---------------
1,883,694
---------------
Office & Business Equipment -- 0.3%
101,100 Xerox Corp.(c) 1,868,328
---------------
Office Furnishings -- 0.2%
56,902 Interface, Inc., Class A 1,073,172
---------------
Oil & Gas -- 1.6%
38,000 ExxonMobil Corp. 3,187,440
62,188 Range Resources Corp. 2,326,453
51,365 Southwestern Energy Co.(b)(c) 2,285,743
18,400 Transocean, Inc.(c) 1,950,032
---------------
9,749,668
---------------
Oil & Gas Services -- 3.2%
16,200 Baker Hughes, Inc. 1,362,906
7,200 FMC Technologies, Inc.(c) 570,384
73,084 Grant Prideco, Inc.(c) 3,934,112
120,735 Helix Energy Solutions Group, Inc.(b)(c) 4,818,534
34,627 National-Oilwell Varco, Inc.(c) 3,609,518
39,045 Oceaneering International, Inc.(c) 2,055,329
24,100 Schlumberger, Ltd. 2,047,054
26,600 Weatherford International, Ltd.(b)(c) 1,469,384
---------------
19,867,221
---------------
Packaging & Containers -- 0.3%
77,863 Crown Holdings, Inc.(c) 1,944,239
---------------
Pharmaceuticals -- 2.6%
37,600 Abbott Laboratories 2,013,480
48,400 Gilead Sciences, Inc.(c) 1,876,468
109,905 Hospira, Inc.(c) 4,290,691
31,900 Merck & Co., Inc. 1,588,620
186,790 Perrigo Co. 3,657,348
37,433 Shire PLC, ADR(b) 2,774,909
---------------
16,201,516
---------------
Pipelines -- 0.3%
31,797 Questar Corp.(b) 1,680,471
---------------
Real Estate -- 0.7%
48,925 CB Richard Ellis Group, Inc., Class A(b)(c) 1,785,763
25,125 Jones Lang LaSalle, Inc. 2,851,687
---------------
4,637,450
---------------
REITs -- Shopping Centers -- 0.5%
59,901 Developers Diversified Realty Corp. 3,157,382
---------------
Restaurants -- 1.6%
183,300 McDonald's Corp. 9,304,308
27,800 Yum! Brands, Inc. 909,616
---------------
10,213,924
---------------
Retail -- 4.7%
41,200 CEC Entertainment, Inc.(c) 1,450,240
58,800 CVS Caremark Corp. 2,143,260
81,469 Eddie Bauer Holdings, Inc.(b)(c) 1,046,877
71,150 GameStop Corp., Class A(c) 2,781,965
Shares Description Value (+)
- -------------------------------------------------------------------------------
Retail -- continued
137,000 Home Depot, Inc. $ 5,390,950
37,072 J. Crew Group, Inc.(b)(c) 2,005,225
68,600 Limited Brands, Inc. 1,883,070
24,200 Nordstrom, Inc. 1,237,104
52,658 PetSmart, Inc. 1,708,752
161,717 Pier 1 Imports, Inc.(b) 1,372,977
49,200 Starbucks Corp.(c) 1,291,008
36,554 Tiffany & Co. 1,939,555
115,300 Wal-Mart Stores, Inc. 5,547,083
---------------
29,798,066
---------------
Savings & Loans -- 1.0%
95,137 People's United Financial, Inc. 1,686,779
101,000 Washington Mutual, Inc. 4,306,640
---------------
5,993,419
---------------
Semiconductors -- 4.3%
43,900 Applied Materials, Inc. 872,293
447,900 Intel Corp. 10,642,104
80,551 Intersil Corp., Class A 2,534,134
79,996 NVIDIA Corp.(c) 3,304,635
302,070 ON Semiconductor Corp.(b)(c) 3,238,190
40,834 Tessera Technologies, Inc.(c) 1,655,819
122,100 Texas Instruments, Inc. 4,594,623
---------------
26,841,798
---------------
Software -- 2.9%
32,500 Adobe Systems, Inc.(c) 1,304,875
59,758 Autodesk, Inc.(c) 2,813,406
21,155 Dun & Bradstreet Corp. 2,178,542
23,600 Electronic Arts, Inc.(c) 1,116,752
54,468 Fidelity National Information Services, Inc. 2,956,523
28,600 Infosys Technologies, Ltd., Sponsored ADR(b) 1,440,868
54,100 Microsoft Corp. 1,594,327
88,300 Oracle Corp.(c) 1,740,393
48,200 Satyam Computer Services, Ltd.(b) 1,193,432
80,175 Sybase, Inc.(c) 1,915,381
---------------
18,254,499
---------------
Telecommunications -- 6.1%
40,457 Atheros Communications(b)(c) 1,247,694
147,800 Cisco Systems, Inc.(c) 4,116,230
51,538 Embarq Corp. 3,265,963
138,416 GeoEye, Inc.(b)(c) 3,007,780
29,743 Leap Wireless International, Inc.(c) 2,513,283
47,977 Millicom International Cellular SA(b)(c) 4,396,612
280,500 Motorola, Inc. 4,964,850
55,490 NII Holdings, Inc., Class B(c) 4,480,263
28,800 QUALCOMM, Inc. 1,249,632
345,000 Sprint Nextel Corp. 7,144,950
19,463 Vimpel-Communications, Sponsored ADR(b)(c) 2,050,622
---------------
38,437,879
---------------
Tobacco -- 0.3%
27,100 Altria Group, Inc. 1,900,794
---------------
Transportation -- 2.0%
16,000 FedEx Corp. 1,775,520
62,002 Laidlaw International, Inc. 2,142,169
72,600 Union Pacific Corp. 8,359,890
---------------
12,277,579
---------------
Total Common Stocks (Identified Cost $491,832,637) 613,852,262
---------------
See accompanying notes to financial statements.
37
NATIXIS U.S. DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares/
Principal
Amount Description Value (+)
- --------------------------------------------------------------------------------------------------------
Short-Term Investments -- 23.1%
128,216,712 State Street Securities Lending Quality Trust(d) $ 128,216,712
$ 16,934,585 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$16,940,583 on 7/2/2007, collateralized by $14,085,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $17,289,338
including accrued interest 16,934,585
---------------
Total Short-Term Investments (Identified Cost $145,151,297) 145,151,297
---------------
Total Investments -- 120.9%
(Identified Cost $636,983,934)(a) 759,003,559
Other assets less liabilities -- (20.9)% (131,144,708)
---------------
Net Assets -- 100% $ 627,858,851
===============
* Formerly IXIS U.S. Diversified Portfolio (see Note 10 of Notes to
Financial Statements).
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $636,983,934 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 126,571,505
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (4,551,880)
---------------
Net unrealized appreciation $ 122,019,625
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of security lending collateral.
ADR An American Depositary Receipt is a certificate issued by a custodian bank representing
the right to receive securities of the foreign issuer described. The values of ADRs are
significantly influenced by trading on exchanges not located in the United States.
REITs Real Estate Investment Trusts
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Diversified Financial Services 8.6%
Telecommunications 6.1
Media 4.8
Retail 4.7
Semiconductors 4.3
Computers 3.9
Commercial Services 3.8
Oil & Gas Services 3.2
Software 2.9
Health Care -- Products 2.7
Insurance 2.6
Banks 2.6
Pharmaceuticals 2.6
Chemicals 2.5
Aerospace & Defense 2.5
Electric 2.3
Building Materials 2.3
Electronics 2.2
Internet 2.0
Manufacturing 2.0
Transportation 2.0
Other, less than 2% each 27.2
See accompanying notes to financial statements.
38
NATIXIS VALUE FUND* -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ---------------------------------------------------------------------------
Common Stocks -- 97.7% of Net Assets
Aerospace & Defense -- 1.7%
6,050 General Dynamics Corp. $ 473,231
9,775 Northrop Grumman Corp. 761,179
10,300 Raytheon Co. 555,067
6,450 United Technologies Corp. 457,499
---------------
2,246,976
---------------
Agriculture -- 0.3%
11,978 Archer-Daniels-Midland Co. 396,352
---------------
Apparel -- 0.5%
15,300 Warnaco Group, Inc. (The)(b)(c) 601,902
---------------
Auto Parts & Equipment -- 0.5%
18,000 Aftermarket Technology Corp.(c) 534,240
3,600 Cooper Tire & Rubber Co. 99,432
---------------
633,672
---------------
Banks -- 4.7%
18,607 Bank of America Corp. 909,696
6,700 Comerica, Inc.(b) 398,449
57,470 Mellon Financial Corp.(b) 2,528,680
41,500 U.S. Bancorp 1,367,425
29,771 Wells Fargo & Co. 1,047,046
---------------
6,251,296
---------------
Beverages -- 1.0%
24,725 Coca-Cola Enterprises, Inc.(b) 593,400
5,202 Molson Coors Brewing Co.(b) 480,977
4,675 PepsiCo, Inc. 303,174
---------------
1,377,551
---------------
Biotechnology -- 0.3%
6,900 Amgen, Inc.(b)(c) 381,501
---------------
Building Materials -- 0.4%
16,425 Lennox International, Inc. 562,228
---------------
Chemicals -- 1.9%
7,000 Ashland, Inc. 447,650
11,730 E.I. Du Pont de Nemours & Co.(b) 596,353
7,300 Praxair, Inc. 525,527
7,900 Scotts Miracle-Gro Co. (The), Class A(b) 339,226
19,700 Spartech Corp.(b) 523,035
---------------
2,431,791
---------------
Commercial Services -- 1.2%
5,600 Deluxe Corp. 227,416
10,900 Equifax, Inc.(b) 484,178
6,000 Healthspring, Inc.(c) 114,360
2,200 Heidrick & Struggles International, Inc.(b)(c) 112,728
14,625 R. R. Donnelley & Sons Co.(b) 636,334
---------------
1,575,016
---------------
Computers -- 5.7%
80,000 Dell, Inc.(c) 2,284,000
72,875 Hewlett-Packard Co. 3,251,682
14,436 International Business Machines Corp.(b) 1,519,389
8,400 Lexmark International, Inc., Class A(b)(c) 414,204
---------------
7,469,275
---------------
Consumer Products -- 0.1%
1,200 Kimberly-Clark Corp. 80,268
---------------
Cosmetics & Personal Care -- 0.6%
11,100 Elizabeth Arden, Inc.(c) 269,286
11,000 Estee Lauder Cos., Inc. (The), Class A 500,610
---------------
769,896
---------------
Shares Description Value (+)
- ----------------------------------------------------------------------
Construction Machinery -- 0.3%
7,669 Joy Global, Inc. $ 447,333
---------------
Distribution & Wholesale -- 0.4%
8,925 WESCO International, Inc.(c) 539,516
---------------
Diversified Financial Services -- 11.9%
17,100 American Express Co. 1,046,178
8,401 Ameriprise Financial, Inc. 534,052
15,599 Broadridge Financial Solutions, Inc.(b) 298,253
9,392 CIT Group, Inc. 514,963
57,353 Citigroup, Inc. 2,941,635
5,150 Goldman Sachs Group, Inc. 1,116,263
81,764 JPMorgan Chase & Co. 3,961,466
3,000 Knight Capital Group, Inc., Class A(c) 49,800
5,178 Lehman Brothers Holdings, Inc. 385,865
18,975 Merrill Lynch & Co., Inc. 1,585,930
37,700 Morgan Stanley 3,162,276
---------------
15,596,681
---------------
Electric -- 1.1%
8,149 Exelon Corp. 591,617
16,994 NRG Energy, Inc.(b)(c) 706,441
3,000 TXU Corp.(b) 201,900
---------------
1,499,958
---------------
Electrical Components & Equipment -- 0.5%
9,700 Rockwell Automation, Inc.(b) 673,568
---------------
Electronics -- 1.2%
10,050 Arrow Electronics, Inc.(b)(c) 386,221
5,400 Mettler-Toledo International, Inc.(c) 515,754
10,332 Sony Corp., Sponsored ADR 530,755
5,000 Technitrol, Inc.(b) 143,350
---------------
1,576,080
---------------
Engineering & Construction -- 1.6%
27,450 ABB, Ltd., Sponsored ADR 620,370
5,000 Foster Wheeler Ltd.(c) 534,950
11,325 McDermott International, Inc.(c) 941,334
---------------
2,096,654
---------------
Food -- 1.2%
24,371 ConAgra Foods, Inc. 654,605
12,696 Kraft Foods, Inc., Class A 447,534
15,300 Safeway, Inc.(b) 520,659
---------------
1,622,798
---------------
Hand & Machine Tools -- 0.3%
4,600 Black & Decker Corp. (The)(b) 406,226
---------------
Health Care -- Products -- 2.1%
6,118 Beckman Coulter, Inc.(b) 395,712
29,100 Boston Scientific Corp.(b)(c) 446,394
9,600 CONMED Corp.(b)(c) 281,088
25,730 Johnson & Johnson 1,585,483
---------------
2,708,677
---------------
Health Care -- Services -- 1.7%
13,875 Aetna, Inc. 685,425
2,000 Centene Corp.(b)(c) 42,840
8,500 DaVita, Inc.(c) 457,980
15,325 Omnicare, Inc.(b) 552,619
9,369 UnitedHealth Group, Inc. 479,131
---------------
2,217,995
---------------
See accompanying notes to financial statements.
39
NATIXIS VALUE FUND* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ------------------------------------------------------------------------
Home Builders -- 0.8%
28,000 Lennar Corp., Class A(b) $ 1,023,680
---------------
Household Products & Wares -- 0.4%
5,025 Whirlpool Corp. 558,780
---------------
Insurance -- 3.6%
13,361 Allstate Corp. (The) 821,835
11,800 American International Group, Inc. 826,354
165 Berkshire Hathaway, Inc., Class B(c) 594,825
9,600 CIGNA Corp. 501,312
6,700 Genworth Financial, Inc., Class A 230,480
3,925 Hartford Financial Services Group, Inc. 386,652
4,900 Loews Corp. 249,802
12,162 Prudential Financial, Inc. 1,182,511
---------------
4,793,771
---------------
Internet -- 0.0%
1,800 Expedia, Inc.(b)(c) 52,722
---------------
Iron & Steel -- 0.4%
6,200 Cleveland-Cliffs, Inc.(b) 481,554
---------------
Leisure Time -- 1.4%
38,000 Carnival Corp.(b) 1,853,260
---------------
Manufacturing -- 2.5%
5,625 3M Co. 488,194
45,000 General Electric Co. 1,722,600
9,525 Illinois Tool Works, Inc.(b) 516,160
5,450 Parker Hannifin Corp. 533,609
---------------
3,260,563
---------------
Media -- 7.0%
38,700 Cablevision Systems Corp., Class A(c) 1,400,553
14,570 Comcast Corp., Class A(c) 409,708
23,700 DIRECTV Group, Inc. (The)(c) 547,707
11,052 Liberty Global, Inc., Class C(b)(c) 434,344
11,000 Liberty Media Corp. -- Capital, Series A(c) 1,294,480
31,000 News Corp., Class A 657,510
158,719 Time Warner, Inc. 3,339,448
26,300 Viacom, Inc., Class B(c) 1,094,869
---------------
9,178,619
---------------
Metals -- 0.4%
6,237 Freeport-McMoRan Copper & Gold, Inc.(b) 516,548
---------------
Mining -- 0.5%
800 Newmont Mining Corp. 31,248
14,975 Teck Cominco Ltd., Class B 636,438
---------------
667,686
---------------
Office Furnishings -- 0.3%
15,000 Knoll, Inc. 336,000
---------------
Oil & Gas -- 6.4%
10,550 ConocoPhillips 828,175
47,365 ExxonMobil Corp. 3,972,976
8,881 Hess Corp. 523,624
21,115 Occidental Petroleum Corp. 1,222,136
15,750 Pioneer Natural Resources Co.(b) 767,182
14,025 Southwestern Energy Co.(c) 624,113
9,001 XTO Energy, Inc. 540,960
---------------
8,479,166
---------------
Oil & Gas Services -- 2.0%
12,000 Baker Hughes, Inc. 1,009,560
24,727 Halliburton Co. 853,082
Shares Description Value (+)
- ---------------------------------------------------------------
Oil & Gas Services -- continued
8,200 Input/Output, Inc.(b)(c) $ 128,002
8,600 Tidewater, Inc.(b) 609,568
---------------
2,600,212
---------------
Packaging & Containers -- 0.6%
20,879 Owens-Illinois, Inc.(c) 730,765
3,500 Pactiv Corp.(c) 111,615
---------------
842,380
---------------
Pharmaceuticals -- 2.8%
7,653 Abbott Laboratories 409,818
20,619 Bristol-Myers Squibb Co. 650,736
5,900 Cardinal Health, Inc.(b) 416,776
9,300 Merck & Co., Inc. 463,140
7,208 Novartis AG, ADR 404,152
1,000 OSI Pharmaceuticals, Inc.(b)(c) 36,210
50,845 Pfizer, Inc. 1,300,107
---------------
3,680,939
---------------
Pipelines -- 0.9%
7,862 Equitable Resources, Inc.(b) 389,641
29,109 Spectra Energy Corp. 755,669
---------------
1,145,310
---------------
REITs -- Mortgage -- 0.4%
33,300 Deerfield Triarc Capital Corp.(b) 487,179
---------------
Restaurants -- 4.3%
63,094 McDonald's Corp. 3,202,651
74,400 Yum! Brands, Inc. 2,434,368
---------------
5,637,019
---------------
Retail -- 7.3%
18,725 AutoNation, Inc.(b)(c) 420,189
13,775 Best Buy Co., Inc. 642,879
12,100 CBRL Group, Inc.(b) 514,008
15,400 Dress Barn, Inc.(b)(c) 316,008
30,386 Gap, Inc. (The) 580,373
11,650 Home Depot, Inc. 458,428
7,600 Kohl's Corp.(c) 539,828
19,725 Lowe's Cos., Inc. 605,360
8,000 Macy's, Inc. 318,240
1,300 NBTY, Inc.(b)(c) 56,160
8,200 Nordstrom, Inc.(b) 419,184
16,444 Office Depot, Inc.(c) 498,253
26,850 Staples, Inc. 637,151
40,000 Tiffany & Co.(b) 2,122,400
31,404 Wal-Mart Stores, Inc. 1,510,846
---------------
9,639,307
---------------
Semiconductors -- 5.8%
14,500 Amkor Technology, Inc.(b)(c) 228,375
114,425 Intel Corp. 2,718,738
134,179 Micron Technology, Inc.(b)(c) 1,681,263
60,000 National Semiconductor Corp.(b) 1,696,200
12,900 Novellus Systems, Inc.(b)(c) 365,973
25,525 Texas Instruments, Inc. 960,506
---------------
7,651,055
---------------
Software -- 1.4%
19,400 CSG Systems International, Inc.(c) 514,294
40,375 Microsoft Corp. 1,189,851
900 MicroStrategy, Inc., Class A(b)(c) 85,041
---------------
1,789,186
---------------
See accompanying notes to financial statements.
40
NATIXIS VALUE FUND* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- -----------------------------------------------------------------------------------------------------
Telecommunications -- 4.8%
42,000 AT&T, Inc. $ 1,743,000
11,200 CenturyTel, Inc.(b) 549,360
31,650 Cisco Systems, Inc.(c) 881,452
2,400 Embarq Corp.(b) 152,088
29,901 Motorola, Inc. 529,248
19,725 Nokia OYJ, Sponsored ADR 554,470
90,000 Sprint Nextel Corp. 1,863,900
---------------
6,273,518
---------------
Tobacco -- 0.5%
10,400 Altria Group, Inc. 729,456
---------------
Transportation -- 2.0%
3,825 FedEx Corp. 424,460
16,000 Union Pacific Corp. 1,842,400
5,275 United Parcel Service, Inc., Class B 385,075
---------------
2,651,935
---------------
Total Common Stocks (Identified Cost $99,174,634) 128,493,055
---------------
Shares/
Principal
Amount
- -----------------------------------------------------------------------------------------------------
Short-Term Investments -- 16.5%
18,816,596 State Street Securities Lending Quality Trust(d) 18,816,596
$ 2,877,271 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$2,878,290 on 7/2/2007, collateralized by $2,405,000 U.S.
Treasury Bond, 7.25% due 8/15/2022 valued at $2,952,138
including accrued interest 2,877,271
---------------
Total Short-Term Investments (Identified Cost $21,693,867) 21,693,867
---------------
Total Investments -- 114.2%
(Identified Cost $120,868,501)(a) 150,186,922
Other assets less liabilities -- (14.2)% (18,661,180)
---------------
Total Net Assets -- 100% $ 131,525,742
===============
* Formerly IXIS Value Fund (see Note 10 of Notes to Financial
Statements).
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $120,868,501 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 31,130,562
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (1,812,141)
---------------
Net unrealized appreciation $ 29,318,421
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of securities lending collateral.
ADR An American Depositary Receipt is a certificate issued by a custodian bank representing
the right to receive securities of the foreign issuer described. The values of ADRs are
significantly influenced by trading on exchanges not located in the United States.
REITs Real Estate Investment Trusts
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Diversified Financial Services 11.9%
Retail 7.3
Media 7.0
Oil & Gas 6.4
Semiconductors 5.8
Computers 5.7
Telecommunications 4.8
Banks 4.7
Restaurants 4.3
Insurance 3.6
Pharmaceuticals 2.8
Manufacturing 2.5
Health Care -- Products 2.1
Transportation 2.0
Oil & Gas Services 2.0
Other, less than 2% each 24.8
See accompanying notes to financial statements.
41
VAUGHAN NELSON SMALL CAP VALUE FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------
Common Stocks -- 94.9% of Net Assets
Aerospace & Defense -- 5.9%
43,220 Alliant Techsystems, Inc.(b)(c) $ 4,285,263
30,900 DRS Technologies, Inc.(b) 1,769,643
63,062 Moog, Inc., Class A(b)(c) 2,781,665
---------------
8,836,571
---------------
Apparel -- 1.3%
28,527 Columbia Sportswear Co.(b) 1,959,234
---------------
Banks -- 3.6%
35,951 MB Financial, Inc.(b) 1,248,938
60,475 Prosperity Bancshares, Inc.(b) 1,981,161
73,525 Sterling Financial Corp.(b) 2,127,813
---------------
5,357,912
---------------
Building Materials -- 2.1%
92,275 Lennox International, Inc.(b) 3,158,573
---------------
Chemicals -- 6.1%
31,650 Airgas, Inc.(b) 1,516,035
22,775 Cytec Industries, Inc.(b) 1,452,362
23,775 FMC Corp.(b) 2,125,247
45,200 Scotts Miracle-Gro Co. (The), Class A(b) 1,940,888
72,700 Valspar Corp.(b) 2,065,407
---------------
9,099,939
---------------
Commercial Services -- 5.8%
86,715 Aaron Rents, Inc.(b) 2,532,078
78,450 Healthspring, Inc.(c) 1,495,257
56,635 McGrath Rentcorp(b) 1,908,033
42,030 Monro Muffler, Inc.(b) 1,574,023
26,245 Team, Inc.(b)(c) 1,180,238
---------------
8,689,629
---------------
Computer Services -- 0.6%
78,675 Tyler Technologies, Inc.(b)(c) 976,357
---------------
Computers -- 0.9%
24,495 MICROS Systems, Inc.(b)(c) 1,332,528
---------------
Computers & Peripherals -- 1.2%
89,675 Western Digital Corp.(b)(c) 1,735,211
---------------
Distribution & Wholesale -- 2.9%
58,750 Owens & Minor, Inc.(b) 2,052,725
38,345 WESCO International, Inc.(b)(c) 2,317,955
---------------
4,370,680
---------------
Diversified Financial Services -- 6.0%
23,425 Affiliated Managers Group, Inc.(b)(c) 3,016,203
51,774 Financial Federal Corp.(b) 1,543,901
79,200 First Cash Financial Services, Inc.(b)(c) 1,856,448
86,219 Raymond James Financial, Inc. 2,664,167
---------------
9,080,719
---------------
Electric -- 0.8%
48,405 Westar Energy, Inc.(b) 1,175,273
---------------
Electrical Components & Equipment -- 2.9%
64,425 Brightpoint, Inc.(b)(c) 888,421
46,500 General Cable Corp.(b)(c) 3,522,375
---------------
4,410,796
---------------
Electronics -- 0.8%
17,525 Rofin-Sinar Technologies, Inc.(c) 1,209,225
---------------
Engineering & Construction -- 1.7%
52,025 URS Corp.(c) 2,525,814
---------------
Shares Description Value (+)
- ------------------------------------------------------------------
Environmental Control -- 0.9%
43,402 Waste Connections, Inc.(b)(c) $ 1,312,476
---------------
Food -- 2.4%
28,375 Corn Products International, Inc.(b) 1,289,644
43,750 Ralcorp Holdings, Inc.(b)(c) 2,338,437
---------------
3,628,081
---------------
Gas -- 1.3%
73,900 Vectren Corp.(b) 1,990,127
---------------
Hand & Machine Tools -- 1.4%
24,875 Kennametal, Inc. 2,040,496
---------------
Health Care -- Products -- 0.5%
43,506 Medical Action Industries, Inc.(b)(c) 785,718
---------------
Health Care -- Services -- 4.3%
44,212 Healthcare Services Group, Inc.(b) 1,304,254
73,175 LHC Group, Inc.(b)(c) 1,917,185
60,225 Pediatrix Medical Group, Inc.(c) 3,321,409
---------------
6,542,848
---------------
Household Products & Wares -- 1.1%
131,225 Central Garden & Pet Co.(b)(c) 1,608,819
---------------
Insurance -- 4.2%
69,937 HCC Insurance Holdings, Inc.(b) 2,336,595
38,025 Hilb, Rogal & Hobbs Co.(b) 1,629,752
64,795 United Fire & Casualty Co.(b) 2,292,447
---------------
6,258,794
---------------
Internet -- 1.0%
80,075 Vignette Corp.(b)(c) 1,534,237
---------------
Leisure Time -- 0.6%
29,650 Brunswick Corp.(b) 967,480
---------------
Machinery -- Diversified -- 2.8%
56,050 IDEX Corp.(b) 2,160,167
41,240 Nordson Corp. 2,068,598
---------------
4,228,765
---------------
Manufacturing -- 3.3%
36,100 Actuant Corp., Class A(b) 2,276,466
33,675 Teleflex, Inc. 2,753,942
---------------
5,030,408
---------------
Oil & Gas -- 7.9%
50,450 Arena Resources, Inc.(b)(c) 2,931,649
12,350 Atwood Oceanics, Inc.(c) 847,457
149,100 Continental Resources, Inc.(c) 2,385,600
80,625 Gulfport Energy Corp.(b)(c) 1,610,888
144,200 PetroQuest Energy, Inc.(b)(c) 2,096,668
54,400 St. Mary Land & Exploration Co.(b) 1,992,128
---------------
11,864,390
---------------
Oil & Gas Services -- 1.7%
63,075 Oil States International, Inc.(b)(c) 2,607,521
---------------
Retail -- 8.1%
64,875 AFC Enterprises, Inc.(b)(c) 1,121,689
51,200 Guitar Center, Inc.(b)(c) 3,062,272
44,300 Men's Wearhouse, Inc. (The)(b) 2,262,401
40,925 Regis Corp. 1,565,381
55,712 Stage Stores, Inc.(b) 1,167,724
95,400 Triarc Cos., Inc., Class B(b) 1,497,780
68,625 United Auto Group, Inc.(b) 1,461,026
---------------
12,138,273
---------------
See accompanying notes to financial statements.
42
VAUGHAN NELSON SMALL CAP VALUE FUND -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- -----------------------------------------------------------------------------------------------
Semiconductors -- 3.0%
46,725 ATMI, Inc.(b)(c) $ 1,401,750
90,475 Brooks Automation, Inc.(b)(c) 1,642,121
63,800 Microsemi Corp.(b)(c) 1,528,010
---------------
4,571,881
---------------
Software -- 2.0%
30,475 Blackbaud, Inc.(b) 672,888
100,225 Sybase, Inc.(c) 2,394,375
---------------
3,067,263
---------------
Telecommunications -- 4.2%
107,925 Arris Group, Inc.(b)(c) 1,898,401
38,825 Ciena Corp.(b)(c) 1,402,747
52,000 CommScope, Inc.(b)(c) 3,034,200
---------------
6,335,348
---------------
Transportation -- 1.6%
43,800 Arlington Tankers, Ltd.(b) 1,256,184
35,550 Forward Air Corp.(b) 1,211,900
---------------
2,468,084
---------------
Total Common Stocks (Identified Cost $119,752,290) 142,899,470
---------------
Investment Companies -- 2.9%
52,741 iShares Russell 2000 Value Index Fund(b)
(Identified Cost $4,319,765) 4,343,749
---------------
Shares/
Principal
Amount
- -----------------------------------------------------------------------------------------------
Short-Term Investments -- 28.3%
38,551,479 State Street Securities Lending Quality Trust(d) 38,551,479
$ 4,088,477 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$4,089,925 on 7/2/2007, collateralized by $3,400,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $4,173,500
including accrued interest 4,088,477
---------------
Total Short-Term Investments (Identified Cost $42,639,956) 42,639,956
---------------
Total Investments -- 126.1%
(Identified Cost $166,712,011)(a) 189,883,175
Other assets less liabilities -- (26.1)% (39,342,745)
---------------
Net Assets -- 100% $ 150,540,430
===============
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments
made at the end of the Fund's fiscal year for tax purposes. Such
adjustments are primarily due to wash sales.):
At June 30, 2007, the net unrealized appreciation on investments
based on a cost of $166,712,011 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 24,391,366
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (1,220,202)
---------------
Net unrealized appreciation $ 23,171,164
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Represents investment of securities lending collateral.
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Retail 8.1%
Oil & Gas 7.9
Chemicals 6.1
Diversified Financial Services 6.0
Aerospace & Defense 5.9
Commercial Services 5.8
Health Care -- Services 4.3
Telecommunications 4.2
Insurance 4.2
Banks 3.6
Manufacturing 3.3
Semiconductors 3.0
Electrical Components & Equipment 2.9
Distribution & Wholesale 2.9
Investment Companies 2.9
Machinery -- Diversified 2.8
Food 2.4
Building Materials 2.1
Software 2.0
Other, less than 2% each 17.4
See accompanying notes to financial statements.
43
WESTPEAK CAPITAL GROWTH FUND -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- --------------------------------------------------------------------------
Common Stocks -- 98.8% of Net Assets
Advertising -- 0.7%
7,400 Omnicom Group, Inc. $ 391,608
---------------
Aerospace & Defense -- 7.1%
22,295 Boeing Co. (The) 2,143,887
2,700 Honeywell International, Inc. 151,956
12,600 Lockheed Martin Corp. 1,186,038
7,000 Raytheon Co. 377,230
---------------
3,859,111
---------------
Agriculture -- 0.5%
4,000 Monsanto Co. 270,160
---------------
Beverages -- 1.1%
11,400 Anheuser-Busch Cos., Inc. 594,624
---------------
Biotechnology -- 2.5%
20,600 Amgen, Inc.(b) 1,138,974
1,400 Genentech, Inc.(b) 105,924
1,700 Genzyme Corp.(b) 109,480
---------------
1,354,378
---------------
Commercial Services -- 1.5%
6,900 ITT Educational Services, Inc.(b) 809,922
---------------
Commercial Services -- Finance -- 1.6%
14,100 Moody's Corp. 877,020
---------------
Computers -- 4.0%
48,400 Hewlett-Packard Co. 2,159,608
---------------
Cosmetics & Personal Care -- 1.0%
11,300 Estee Lauder Cos., Inc. (The), Class A 514,263
---------------
Diversified Financial Services -- 3.6%
8,984 Goldman Sachs Group, Inc. 1,947,282
---------------
Electronics -- 3.0%
17,200 Mettler-Toledo International, Inc.(b) 1,642,772
---------------
Engineering & Construction -- 2.3%
19,700 Granite Construction, Inc. 1,264,346
---------------
Health Care -- Capital Equipment -- 0.2%
3,800 Applera Corp. - Applied Biosystems Group 116,052
---------------
Health Care -- Products -- 2.0%
20,300 Dade Behring Holdings, Inc. 1,078,336
---------------
Health Care -- Services -- 6.7%
35,200 UnitedHealth Group, Inc. 1,800,128
23,000 WellPoint, Inc.(b) 1,836,090
---------------
3,636,218
---------------
Insurance -- 1.3%
12,200 Principal Financial Group, Inc. 711,138
---------------
Internet -- 5.9%
4,600 Expedia, Inc.(b) 134,734
38,300 IAC/InterActiveCorp.(b) 1,325,563
87,700 Symantec Corp.(b) 1,771,540
---------------
3,231,837
---------------
Iron & Steel -- 1.1%
7,900 Cleveland-Cliffs, Inc. 613,593
---------------
Machinery -- Construction & Mining -- 2.0%
13,300 Terex Corp.(b) 1,081,290
---------------
Media -- 4.3%
26,200 DIRECTV Group, Inc. (The)(b) 605,482
25,700 McGraw-Hill Cos., Inc. (The) 1,749,656
---------------
2,355,138
---------------
Shares Description Value (+)
- ------------------------------------------------------------------------------------------
Mining -- 0.2%
2,700 Newmont Mining Corp. $ 105,462
---------------
Oil & Gas -- 3.3%
21,700 ExxonMobil Corp. 1,820,196
---------------
Oil & Gas Services -- 1.5%
20,500 Halliburton Co. 707,250
1,200 National-Oilwell Varco, Inc.(b) 125,088
---------------
832,338
---------------
Packaging & Containers -- 2.6%
44,400 Pactiv Corp.(b) 1,415,916
---------------
Pharmaceuticals -- 4.8%
16,400 AmerisourceBergen Corp. 811,308
2,200 Cardinal Health, Inc. 155,408
1,400 Cephalon, Inc.(b) 112,546
29,300 Forest Laboratories, Inc.(b) 1,337,545
2,800 Gilead Sciences, Inc.(b) 108,556
2,300 Sepracor, Inc.(b) 94,346
---------------
2,619,709
---------------
Real Estate -- 0.9%
4,500 Jones Lang LaSalle, Inc. 510,750
---------------
Retail -- 18.5%
40,100 Brinker International, Inc. 1,173,727
36,800 Dollar Tree Stores, Inc.(b) 1,602,640
7,900 J.C. Penney Co., Inc. 571,802
23,700 Kohl's Corp.(b) 1,683,411
25,300 Macy's, Inc. 1,006,434
26,200 NBTY, Inc.(b) 1,131,840
28,700 Nordstrom, Inc. 1,467,144
47,600 Office Depot, Inc.(b) 1,442,280
---------------
10,079,278
---------------
Semiconductors -- 3.3%
33,100 Amkor Technology, Inc.(b) 521,325
44,400 Novellus Systems, Inc.(b) 1,259,628
---------------
1,780,953
---------------
Software -- 5.1%
22,200 Fiserv, Inc.(b) 1,260,960
11,800 Microsoft Corp. 347,746
59,600 Oracle Corp.(b) 1,174,716
---------------
2,783,422
---------------
Telecommunications -- 5.3%
104,200 Cisco Systems, Inc.(b) 2,901,970
---------------
Tobacco -- 0.9%
6,600 Altria Group, Inc. 462,925
---------------
Total Common Stocks (Identified Cost $49,216,864) 53,821,615
---------------
Principal
Amount
- ------------------------------------------------------------------------------------------
Short-Term Investments -- 1.6%
$ 887,327 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$887,641 on 7/2/2007, collateralized by $740,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $908,350,
including accrued interest (Identified Cost $887,327) 887,327
---------------
Total Investments -- 100.4%
(Identified Cost $50,104,191)(a) 54,708,942
Other assets less liabilities -- (0.4)% (234,230)
---------------
Net Assets -- 100% $ 54,474,712
===============
See accompanying notes to financial statements.
44
WESTPEAK CAPITAL GROWTH FUND -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
(+) See Note 2a of Notes to Financial Statements.
(a) Federal Tax Information (Amounts exclude certain adjustments made at the end of
the Fund's fiscal year for tax purposes. Such adjustments are primarily due to wash
sales.):
At June 30, 2007, the net unrealized appreciation on investments based on a cost
of $50,104,191 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an
excess of value over tax cost $ 6,271,586
Aggregate gross unrealized depreciation for all investments in which there is an
excess of tax cost over value (1,666,835)
-----------
Net unrealized appreciation $ 4,604,751
===========
(b) Non-income producing security.
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Retail 18.5%
Aerospace & Defense 7.1
Health Care -- Services 6.7
Internet 5.9
Telecommunications 5.3
Software 5.1
Pharmaceuticals 4.8
Media 4.3
Computers 4.0
Diversified Financial Services 3.6
Oil & Gas 3.3
Semiconductors 3.3
Electronics 3.0
Packaging & Containers 2.6
Biotechnology 2.5
Engineering & Construction 2.3
Machinery -- Construction & Mining 2.0
Health Care -- Products 2.0
Others, less than 2% each 12.5
See accompanying notes to financial statements.
45
This Page Intentionally Left Blank
46
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2007 (Unaudited)
CGM Advisor Hansberger Harris Associates
Targeted Equity Fund International Fund Focused Value Fund
--------------------- --------------------- ---------------------
--------------------- --------------------- ---------------------
ASSETS
Investments at cost $ 737,890,970 $ 181,921,723 $ 214,689,087
Net unrealized appreciation 121,062,612 48,682,093 31,631,014
--------------------- --------------------- ---------------------
Investments at value(a) 858,953,582 230,603,816 246,320,101
Cash 715 -- --
Foreign currency at value (identified
cost $0, $103,432, $0, $0, $0, $0,
$0, $0) -- 103,586 --
Receivable for Fund shares sold 118,248 54,578 74,891
Receivable for securities sold 1,868,851 307,331 --
Dividends and interest receivable 771,990 335,773 71,266
Tax reclaims receivable 3,534 99,275 --
Securities lending income receivable 6,621 16,696 2,608
--------------------- --------------------- ---------------------
TOTAL ASSETS 861,723,541 231,521,055 246,468,866
--------------------- --------------------- ---------------------
LIABILITIES
Collateral on securities loaned, at
value (Note 2) 97,935,744 46,746,802 41,831,557
Payable for securities purchased -- 332,377 385,165
Payable for Fund shares redeemed 575,855 121,910 511,233
Management fees payable (Note 4) 435,706 120,085 152,782
Deferred Trustees' fees (Note 4) 774,876 119,135 88,964
Administrative fees payable (Note 4) 37,010 10,569 14,041
Other accounts payable and accrued
expenses 99,147 76,127 39,250
--------------------- --------------------- ---------------------
TOTAL LIABILITIES 99,858,338 47,527,005 43,022,992
--------------------- --------------------- ---------------------
NET ASSETS $ 761,865,203 $ 183,994,050 $ 203,445,874
===================== ===================== =====================
NET ASSETS CONSIST OF:
Paid-in capital $ 618,649,090 $ 125,834,845 $ 154,317,009
Undistributed (overdistributed) net
investment income (loss) (411,678) (832,657) (1,196,195)
Accumulated net realized gain (loss)
on investments and foreign currency
transactions 22,565,179 10,310,702 18,694,046
Net unrealized appreciation on
investments and foreign currency
translations 121,062,612 48,681,160 31,631,014
--------------------- --------------------- ---------------------
NET ASSETS $ 761,865,203 $ 183,994,050 $ 203,445,874
===================== ===================== =====================
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE:
Class A shares:
Net assets $ 706,480,751 $ 124,544,110 $ 56,627,564
===================== ===================== =====================
Shares of beneficial interest 61,019,112 5,248,584 4,616,199
===================== ===================== =====================
Net asset value and redemption price
per share $ 11.58 $ 23.73 $ 12.27
===================== ===================== =====================
Offering price per share
(100/[100-maximum sales charge] of
net asset value) (Note 1) $ 12.29 $ 25.18 $ 13.02
===================== ===================== =====================
Class B shares: (redemption price per
share is equal to net asset value
less any applicable contingent
deferred sales charge) (Note 1)
Net assets $ 34,018,202 $ 33,300,178 $ 69,771,932
===================== ===================== =====================
Shares of beneficial interest 3,218,419 1,555,480 6,049,038
===================== ===================== =====================
Net asset value and offering price
per share $ 10.57 $ 21.41 $ 11.53
===================== ===================== =====================
Class C shares: (redemption price per
share is equal to net asset value
less any applicable contingent
deferred sales charge) (Note 1)
Net assets $ 8,954,097 $ 26,149,762 $ 77,046,378
===================== ===================== =====================
Shares of beneficial interest 847,510 1,223,132 6,678,554
===================== ===================== =====================
Net asset value and offering price
per share $ 10.57 $ 21.38 $ 11.54
===================== ===================== =====================
Class Y shares:
Net assets $ 12,412,153 $ -- $ --
===================== ===================== =====================
Shares of beneficial interest 1,048,171 -- --
===================== ===================== =====================
Net asset value, offering and
redemption price per share $ 11.84 $ -- $ --
===================== ===================== =====================
(a) Including securities on loan with
market values of: $ 96,007,490 $ 45,297,033 $ 40,821,373
===================== ===================== =====================
* Formerly IXIS U.S. Diversified Portfolio (See Note 10 of Notes to Financial
Statements).
** Formerly IXIS Value Fund (See Note 10 of Notes to Financial Statements).
See accompanying notes to financial statements.
47
Harris Associates Vaughan Nelson Westpeak
Large Cap Value Natixis U.S. Diversified Natixis Value Small Cap Value Capital Growth
Fund Portfolio* Fund** Fund Fund
- --------------------- ------------------------ --------------------- --------------------- ---------------------
--------------------- --------------------- --------------------- ---------------------
$ 225,768,061 $ 636,983,934 $ 120,868,501 $ 166,712,011 $ 50,104,191
53,319,399 122,019,625 29,318,421 23,171,164 4,604,751
- --------------------- --------------------- --------------------- --------------------- ---------------------
279,087,460 759,003,559 150,186,922 189,883,175 54,708,942
-- 257,567 -- -- --
-- -- -- -- --
53,635 66,411 43,706 493,723 21,820
-- 2,297,820 579,254 3,189,096 --
193,854 450,868 100,028 117,539 17,053
-- 19,802 -- -- --
1,159 12,287 6,814 19,643 573
- --------------------- --------------------- --------------------- --------------------- ---------------------
279,336,108 762,108,314 150,916,724 193,703,176 54,748,388
- --------------------- --------------------- --------------------- --------------------- ---------------------
12,037,959 128,216,712 18,816,596 38,551,479 --
938,179 4,261,264 173,631 4,151,340 --
422,731 697,143 49,985 173,932 65,069
166,261 469,649 81,761 111,163 32,703
321,168 438,286 225,543 123,655 125,113
8,696 21,574 3,374 6,205 2,218
122,099 144,835 40,092 44,972 48,573
- --------------------- --------------------- --------------------- --------------------- ---------------------
14,017,093 134,249,463 19,390,982 43,162,746 273,676
- --------------------- --------------------- --------------------- --------------------- ---------------------
$ 265,319,015 $ 627,858,851 $ 131,525,742 $ 150,540,430 $ 54,474,712
===================== ===================== ===================== ===================== =====================
$ 281,350,152 $ 523,705,948 $ 95,819,287 $ 134,372,493 $ 98,538,067
(189,192) (2,131,696) 8,213 (207,761) (372,361)
(69,161,344) (15,735,270) 6,379,800 (6,795,466) (48,295,745)
53,319,399 122,019,869 29,318,442 23,171,164 4,604,751
- --------------------- --------------------- --------------------- --------------------- ---------------------
$ 265,319,015 $ 627,858,851 $ 131,525,742 $ 150,540,430 $ 54,474,712
===================== ===================== ===================== ===================== =====================
$ 198,206,175 $ 416,904,623 $ 111,281,619 $ 97,800,956 $ 46,400,104
===================== ===================== ===================== ===================== =====================
12,092,237 16,342,657 12,116,412 4,298,082 3,437,849
===================== ===================== ===================== ===================== =====================
$ 16.39 $ 25.51 $ 9.18 $ 22.75 $ 13.50
===================== ===================== ===================== ===================== =====================
$ 17.39 $ 27.07 $ 9.74 $ 24.14 $ 14.32
===================== ===================== ===================== ===================== =====================
$ 34,896,995 $ 141,525,251 $ 17,094,712 $ 30,617,790 $ 7,390,297
===================== ===================== ===================== ===================== =====================
2,300,793 6,282,446 2,123,052 1,470,800 642,057
===================== ===================== ===================== ===================== =====================
$ 15.17 $ 22.53 $ 8.05 $ 20.82 $ 11.51
===================== ===================== ===================== ===================== =====================
$ 17,952,796 $ 47,920,193 $ 3,149,411 $ 21,656,577 $ 684,311
===================== ===================== ===================== ===================== =====================
1,185,284 2,125,050 391,040 1,039,927 59,541
===================== ===================== ===================== ===================== =====================
$ 15.15 $ 22.55 $ 8.05 $ 20.83 $ 11.49
===================== ===================== ===================== ===================== =====================
$ 14,263,049 $ 21,508,784 $ -- $ 465,107 $ --
===================== ===================== ===================== ===================== =====================
840,014 789,558 -- 20,394 --
===================== ===================== ===================== ===================== =====================
$ 16.98 $ 27.24 $ -- $ 22.81 $ --
===================== ===================== ===================== ===================== =====================
$ 11,648,441 $ 124,674,737 $ 18,379,848 $ 37,561,076 $ --
===================== ===================== ===================== ===================== =====================
48
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2007 (Unaudited)
CGM Advisor
Targeted Equity
Fund
---------------------
---------------------
INVESTMENT INCOME
Dividends $ 4,299,543
Interest 304,987
Securities lending income (Note 2) 218,203
Less net foreign taxes withheld (77,978)
---------------------
4,744,755
---------------------
Expenses
Management fees (Note 4) 2,545,844
Service fees - Class A (Note 4) 840,414
Service and distribution fees - Class B (Note 4) 186,801
Service and distribution fees - Class C (Note 4) 42,519
Trustees' fees and expenses (Note 4) 94,876
Administrative fees (Note 4) 192,222
Custodian fees and expenses 26,010
Transfer agent fees and expenses - Class A 347,335
Transfer agent fees and expenses - Class B 20,088
Transfer agent fees and expenses - Class C 4,385
Transfer agent fees and expenses - Class Y 4,746
Audit fees 23,143
Legal fees 11,119
Shareholder reporting expenses 48,052
Registration fees 26,600
Expense waiver recapture - Class A (Note 4) --
Expense waiver recapture - Class B (Note 4) --
Expense waiver recapture - Class C (Note 4) --
Expense waiver recapture - Class Y (Note 4) --
Miscellaneous expenses 22,463
---------------------
Total expenses 4,436,617
Less reimbursement/waiver (Note 4) --
---------------------
Net expenses 4,436,617
---------------------
Net investment income (loss) 308,138
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 22,562,243
Foreign currency transactions - net --
Payments by affiliates (Note 4) --
Change in unrealized appreciation (depreciation) on:
Investments - net 60,004,912
Foreign currency translations - net --
---------------------
Net realized and unrealized gain on investments and foreign currency transactions 82,567,155
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 82,875,293
=====================
Hansberger
International
Fund
---------------------
---------------------
INVESTMENT INCOME
Dividends $ 2,675,951
Interest 71,433
Securities lending income (Note 2) 53,138
Less net foreign taxes withheld (268,282)
---------------------
2,532,240
---------------------
Expenses
Management fees (Note 4) 696,762
Service fees - Class A (Note 4) 146,352
Service and distribution fees - Class B (Note 4) 163,531
Service and distribution fees - Class C (Note 4) 122,014
Trustees' fees and expenses (Note 4) 18,339
Administrative fees (Note 4) 52,936
Custodian fees and expenses 57,593
Transfer agent fees and expenses - Class A 89,203
Transfer agent fees and expenses - Class B 24,791
Transfer agent fees and expenses - Class C 18,588
Transfer agent fees and expenses - Class Y --
Audit fees 23,988
Legal fees 2,181
Shareholder reporting expenses 13,433
Registration fees 19,575
Expense waiver recapture - Class A (Note 4) --
Expense waiver recapture - Class B (Note 4) --
Expense waiver recapture - Class C (Note 4) --
Expense waiver recapture - Class Y (Note 4) --
Miscellaneous expenses 9,623
---------------------
Total expenses 1,458,909
Less reimbursement/waiver (Note 4) --
---------------------
Net expenses 1,458,909
---------------------
Net investment income (loss) 1,073,331
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 10,645,799
Foreign currency transactions - net (45,253)
Payments by affiliates (Note 4) --
Change in unrealized appreciation (depreciation) on:
Investments - net 9,292,130
Foreign currency translations - net (3,941)
---------------------
Net realized and unrealized gain on investments and foreign currency transactions 19,888,735
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,962,066
=====================
Harris Associates
Focused Value
Fund
---------------------
---------------------
INVESTMENT INCOME
Dividends $ 884,738
Interest 86,160
Securities lending income (Note 2) 10,717
Less net foreign taxes withheld --
---------------------
981,615
---------------------
Expenses
Management fees (Note 4) 952,961
Service fees - Class A (Note 4) 73,613
Service and distribution fees - Class B (Note 4) 365,957
Service and distribution fees - Class C (Note 4) 398,435
Trustees' fees and expenses (Note 4) 16,218
Administrative fees (Note 4) 53,793
Custodian fees and expenses 11,751
Transfer agent fees and expenses - Class A 42,142
Transfer agent fees and expenses - Class B 52,301
Transfer agent fees and expenses - Class C 56,849
Transfer agent fees and expenses - Class Y --
Audit fees 22,443
Legal fees 2,729
Shareholder reporting expenses 27,016
Registration fees 12,697
Expense waiver recapture - Class A (Note 4) --
Expense waiver recapture - Class B (Note 4) --
Expense waiver recapture - Class C (Note 4) --
Expense waiver recapture - Class Y (Note 4) --
Miscellaneous expenses 11,693
---------------------
Total expenses 2,100,598
Less reimbursement/waiver (Note 4) --
---------------------
Net expenses 2,100,598
---------------------
Net investment income (loss) (1,118,983)
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 18,710,952
Foreign currency transactions - net --
Payments by affiliates (Note 4) --
Change in unrealized appreciation (depreciation) on:
Investments - net (3,634,835)
Foreign currency translations - net --
---------------------
Net realized and unrealized gain on investments and foreign currency transactions 15,076,117
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,957,134
=====================
Harris Associates
Large Cap Value
Fund
---------------------
---------------------
INVESTMENT INCOME
Dividends $ 1,823,261
Interest 138,965
Securities lending income (Note 2) 3,029
Less net foreign taxes withheld --
---------------------
1,965,255
---------------------
Expenses
Management fees (Note 4) 917,408
Service fees - Class A (Note 4) 245,555
Service and distribution fees - Class B (Note 4) 192,174
Service and distribution fees - Class C (Note 4) 89,778
Trustees' fees and expenses (Note 4) 40,581
Administrative fees (Note 4) 66,862
Custodian fees and expenses 13,835
Transfer agent fees and expenses - Class A 157,375
Transfer agent fees and expenses - Class B 30,370
Transfer agent fees and expenses - Class C 14,369
Transfer agent fees and expenses - Class Y 1,688
Audit fees 21,271
Legal fees 2,074
Shareholder reporting expenses 27,887
Registration fees 19,419
Expense waiver recapture - Class A (Note 4) 5,520
Expense waiver recapture - Class B (Note 4) 7,469
Expense waiver recapture - Class C (Note 4) 1,507
Expense waiver recapture - Class Y (Note 4) --
Miscellaneous expenses 11,238
---------------------
Total expenses 1,866,380
Less reimbursement/waiver (Note 4) (4,769)
---------------------
Net expenses 1,861,611
---------------------
Net investment income (loss) 103,644
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 16,421,043
Foreign currency transactions - net --
Payments by affiliates (Note 4) --
Change in unrealized appreciation (depreciation) on:
Investments - net (699,777)
Foreign currency translations - net --
---------------------
Net realized and unrealized gain on investments and foreign currency transactions 15,721,266
---------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,824,910
=====================
* Formerly IXIS U.S. Diversified Portfolio (See Note 10 of Notes to Financial
Statements).
** Formerly IXIS Value Fund (See Note 10 of Notes to Financial Statements).
See accompanying notes to financial statements.
49
Natixis Vaughan Nelson Westpeak
U.S. Diversified Natixis Value Small Cap Value Capital Growth
Portfolio* Fund** Fund Fund
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
$ 2,987,184 $ 1,058,975 $ 1,046,395 $ 173,958
310,956 105,812 106,086 15,231
90,785 10,819 21,636 3,074
(17,982) (4,765) -- --
- --------------------- --------------------- --------------------- ---------------------
3,370,943 1,170,841 1,174,117 192,263
- --------------------- --------------------- --------------------- ---------------------
2,776,143 492,365 636,608 209,866
505,427 137,995 112,848 59,040
723,442 89,020 154,394 40,082
233,701 15,487 99,361 3,581
58,057 28,817 18,446 17,438
157,106 33,605 40,211 14,463
24,904 12,805 14,151 8,606
327,843 73,961 79,213 55,844
116,715 11,861 26,679 9,388
37,842 2,082 17,511 840
1,187 -- 97 --
22,969 22,154 19,547 20,013
7,812 1,244 1,713 1,708
49,195 9,528 12,713 6,089
33,456 17,795 30,230 15,176
-- -- -- --
-- -- -- --
-- -- -- --
-- -- 150 --
22,541 15,886 7,828 6,291
- --------------------- --------------------- --------------------- ---------------------
5,098,340 964,605 1,271,700 468,425
-- (2,701) -- (15,946)
- --------------------- --------------------- --------------------- ---------------------
5,098,340 961,904 1,271,700 452,479
- --------------------- --------------------- --------------------- ---------------------
(1,727,397) 208,937 (97,583) (260,216)
- --------------------- --------------------- --------------------- ---------------------
56,609,958 6,779,751 7,311,889 3,247,006
(7,396) -- -- --
34,706 -- -- --
10,270,733 2,089,857 4,838,692 (1,231,900)
(49) 21 -- --
- --------------------- --------------------- --------------------- ---------------------
66,907,952 8,869,629 12,150,581 2,015,106
- --------------------- --------------------- --------------------- ---------------------
$ 65,180,555 $ 9,078,566 $ 12,052,998 $ 1,754,890
===================== ===================== ===================== =====================
50
STATEMENTS OF CHANGES IN NET ASSETS
CGM Advisor Targeted Equity Fund
-------------------------------
Six Months Ended Year Ended
June 30, 2007 December 31,
(unaudited) 2006
---------------- ------------
FROM OPERATIONS:
Net investment income (loss) $ 308,138 $ 5,415,878
Net realized gain on investments and foreign currency transactions 22,562,243 98,076,120
Net change in unrealized appreciation (depreciation) on investments and
foreign currency translations 60,004,912 (41,577,124)
------------ ------------
Net increase (decrease) in net assets resulting from operations 82,875,293 61,914,874
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A (4,579,405) (4,805,342)
Class B (249,853) (344,672)
Class C (63,306) (50,730)
Class Y (78,332) (117,501)
Net realized capital gain
Class A (18,575,095) (18,905,325)
Class B (1,007,773) (1,296,659)
Class C (256,834) (261,882)
Class Y (317,800) (317,675)
------------ ------------
Total distributions (25,128,398) (26,099,786)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS (NOTE 8) (39,214,865) (55,926,861)
------------ ------------
Redemption fees
Class A 1,649 3,687
Class B 91 250
Class C 21 46
Class Y 29 64
------------ ------------
1,790 4,047
------------ ------------
Net increase (decrease) in net assets 18,533,820 (20,107,726)
------------ ------------
NET ASSETS
Beginning of the period 743,331,383 763,439,109
------------ ------------
End of the period $761,865,203 $743,331,383
============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME (LOSS) $ (411,678) $ 4,251,080
============ ============
Hansberger International Fund
-----------------------------
Six Months Ended Year Ended
June 30, 2007 December 31,
(unaudited) 2006
---------------- ------------
FROM OPERATIONS:
Net investment income (loss) $ 1,073,331 $ 772,749
Net realized gain on investments and foreign currency transactions 10,600,546 21,300,725
Net change in unrealized appreciation (depreciation) on investments and
foreign currency translations 9,288,189 11,339,832
------------ ------------
Net increase (decrease) in net assets resulting from operations 20,962,066 33,413,306
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A (708,009) (1,649,325)
Class B (206,356) (308,165)
Class C (162,709) (228,856)
Class Y -- --
Net realized capital gain
Class A (1,862,438) (12,651,380)
Class B (555,714) (4,129,524)
Class C (430,706) (2,916,961)
Class Y -- --
------------ ------------
Total distributions (3,925,932) (21,884,211)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS (NOTE 8) (2,416,130) 15,400,963
------------ ------------
Redemption fees
Class A 1,414 1,759
Class B 397 582
Class C 296 378
Class Y -- --
------------ ------------
2,107 2,719
------------ ------------
Net increase (decrease) in net assets 14,622,111 26,932,777
------------ ------------
NET ASSETS
Beginning of the period 169,371,939 142,439,162
------------ ------------
End of the period $183,994,050 $169,371,939
============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME (LOSS) $ (832,657) $ (828,914)
============ ============
Harris Associates Focused Value Fund
-----------------------------------
Six Months Ended Year Ended
June 30, 2007 December 31,
(unaudited) 2006
---------------- ------------
FROM OPERATIONS:
Net investment income (loss) $ (1,118,983) $ (1,712,199)
Net realized gain on investments and foreign currency transactions 18,710,952 32,289,793
Net change in unrealized appreciation (depreciation) on investments and
foreign currency translations (3,634,835) (3,254,755)
------------ ------------
Net increase (decrease) in net assets resulting from operations 13,957,134 27,322,839
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A -- --
Class B -- --
Class C -- --
Class Y -- --
Net realized capital gain
Class A (594,908) (9,867,493)
Class B (771,791) (13,053,352)
Class C (844,760) (14,611,917)
Class Y -- --
------------ ------------
Total distributions (2,211,459) (37,532,762)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS (NOTE 8) (36,887,581) (63,505,817)
------------ ------------
Redemption fees
Class A 407 801
Class B 507 1,006
Class C 547 1,149
Class Y -- --
------------ ------------
1,461 2,956
------------ ------------
Net increase (decrease) in net assets (25,140,445) (73,712,784)
------------ ------------
NET ASSETS
Beginning of the period 228,586,319 302,299,103
------------ ------------
End of the period $203,445,874 $228,586,319
============ ============
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME (LOSS) $ (1,196,195) $ (77,212)
============ ============
* Formerly IXIS U.S. Diversified Portfolio (See Note 10 of Notes to Financial
Statements).
** Formerly IXIS Value Fund (See Note 10 of Notes to Financial Statements).
See accompanying notes to financial statements.
51
Harris Associates Large Cap Value Fund Natixis U.S. Diversified Portfolio* Natixis Value Fund**
- ------------------------------------- ---------------------------------- -----------------------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2007 December 31, June 30, 2007 December 31, June 30, 2007 December 31,
(unaudited) 2006 (unaudited) 2006 (unaudited) 2006
- ---------------- ------------ ---------------- ------------ ---------------- ------------
$ 103,644 $ 704,299 $ (1,727,397) $ (459,770) $ 208,937 $ 358,793
16,421,043 24,797,461 56,637,268 69,057,546 6,779,751 16,600,274
(699,777) 14,208,318 10,270,684 9,002,821 2,089,878 5,401,523
------------ ------------ ------------ ------------ ------------ ------------
15,824,910 39,710,078 65,180,555 77,600,597 9,078,566 22,360,590
------------ ------------ ------------ ------------ ------------ ------------
(541,216) (435,177) -- -- (111,579) (278,098)
(106,784) (124,953) -- -- (22,126) (9,395)
(53,175) (46,052) -- -- (3,960) (1,244)
(37,732) (30,568) -- -- -- --
-- -- -- -- (2,419,043) (12,893,672)
-- -- -- -- (428,378) (2,496,747)
-- -- -- -- (77,859) (391,442)
-- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
(738,907) (636,750) -- -- (3,062,945) (16,070,598)
------------ ------------ ------------ ------------ ------------ ------------
(20,520,431) (50,651,493) (45,790,577) (98,667,360) (6,858,712) 2,351,488
------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
(5,434,428) (11,578,165) 19,389,978 (21,066,763) (843,091) 8,641,480
------------ ------------ ------------ ------------ ------------ ------------
270,753,443 282,331,608 608,468,873 629,535,636 132,368,833 123,727,353
------------ ------------ ------------ ------------ ------------ ------------
$265,319,015 $270,753,443 $627,858,851 $608,468,873 $131,525,742 $132,368,833
============ ============ ============ ============ ============ ============
$ (189,192) $ 446,071 $ (2,131,696) $ (404,299) $ 8,213 $ (63,059)
============ ============ ============ ============ ============ ============
Vaughan Nelson Small Cap Value Fund Westpeak Capital Growth Fund
- ---------------------------------- ----------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2007 December 31, June 30, 2007 December 31,
(unaudited) 2006 (unaudited) 2006
- ---------------- ------------ ---------------- ------------
$ (97,583) $ (767,140) $ (260,216) $ (417,676)
7,311,889 15,201,715 3,247,006 1,359,930
4,838,692 5,842,036 (1,231,900) 4,795,603
------------ ------------ ----------- -----------
12,052,998 20,276,611 1,754,890 5,737,857
------------ ------------ ----------- -----------
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
------------ ------------ ----------- -----------
-- -- -- --
------------ ------------ ----------- -----------
1,981,076 4,860,769 (3,969,435) (9,528,533)
------------ ------------ ----------- -----------
1,033 3,304 -- --
342 1,780 -- --
228 731 -- --
5 -- -- --
------------ ------------ ----------- -----------
1,608 5,815 -- --
------------ ------------ ----------- -----------
14,035,682 25,143,195 (2,214,545) (3,790,676)
------------ ------------ ----------- -----------
136,504,748 111,361,553 56,689,257 60,479,933
------------ ------------ ----------- -----------
$150,540,430 $136,504,748 $54,474,712 $56,689,257
============ ============ =========== ===========
$ (207,761) $ (110,177) $ (372,361) $ (112,145)
============ ============ =========== ===========
52
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
Income (loss) from investment operations: Less distributions:
---------------------------------------- --------------------------------------
Net asset
value, Net Dividends Distributions
beginning investment Net realized Total from from net from net
of income and unrealized investment investment realized Total
period (loss) (b) gain (loss) operations income capital gains distributions
---------- ---------- -------------- ---------- ---------- ------------- -------------
CGM ADVISOR TARGETED EQUITY FUND
Class A
6/30/2007(g) $ 10.70 $ 0.01 $ 1.26 $ 1.27 $ (0.08) $ (0.31) $ (0.39)
12/31/2006 10.22 0.08 0.78 0.86 (0.07) (0.31) (0.38)
12/31/2005 9.05 0.07 1.12 1.19 (0.02) -- (0.02)
12/31/2004 7.94 0.01 1.10 1.11 -- -- --
12/31/2003 5.56 (0.03) 2.41 2.38 -- -- --
12/31/2002 7.81 (0.06) (2.19) (2.25) -- -- --
Class B
6/30/2007(g) 9.84 (0.03) 1.15 1.12 (0.08) (0.31) (0.39)
12/31/2006 9.48 (0.00)(f) 0.74 0.74 (0.07) (0.31) (0.38)
12/31/2005 8.45 (0.00)(f) 1.04 1.04 (0.01) -- (0.01)
12/31/2004 7.47 (0.04) 1.02 0.98 -- -- --
12/31/2003 5.28 (0.07) 2.26 2.19 -- -- --
12/31/2002 7.47 (0.11) (2.08) (2.19) -- -- --
Class C
6/30/2007(g) 9.84 (0.03) 1.15 1.12 (0.08) (0.31) (0.39)
12/31/2006 9.48 (0.00)(f) 0.74 0.74 (0.07) (0.31) (0.38)
12/31/2005 8.45 (0.00)(f) 1.04 1.04 (0.01) -- (0.01)
12/31/2004 7.47 (0.04) 1.02 0.98 -- -- --
12/31/2003 5.27 (0.07) 2.27 2.20 -- -- --
12/31/2002 7.47 (0.11) (2.09) (2.20) -- -- --
Class Y
6/30/2007(g) 10.93 0.02 1.28 1.30 (0.08) (0.31) (0.39)
12/31/2006 10.42 0.11 0.82 0.93 (0.11) (0.31) (0.42)
12/31/2005 9.23 0.10 1.14 1.24 (0.05) -- (0.05)
12/31/2004 8.07 0.04 1.12 1.16 -- -- --
12/31/2003 5.63 0.01 2.43 2.44 -- -- --
12/31/2002 7.85 (0.02) (2.20) (2.22) -- -- --
HANSBERGER INTERNATIONAL FUND
Class A
6/30/2007(g) $ 21.50 $ 0.17 $ 2.56 $ 2.73 $ (0.14) $ (0.36) $ (0.50)
12/31/2006 19.88 0.16 4.51 4.67 (0.35) (2.70) (3.05)
12/31/2005 17.12 0.11 2.65 2.76 -- -- --
12/31/2004 15.07 0.02 2.03 2.05 -- -- --
12/31/2003 10.84 (0.04) 4.27 4.23 -- -- --
12/31/2002 13.02 (0.05) (2.08) (2.13) (0.05) -- (0.05)
Class B
6/30/2007(g) 19.51 0.07 2.33 2.40 (0.14) (0.36) (0.50)
12/31/2006 18.27 0.01 4.11 4.12 (0.18) (2.70) (2.88)
12/31/2005 15.85 (0.00)(f) 2.42 2.42 -- -- --
12/31/2004 14.06 (0.09) 1.88 1.79 -- -- --
12/31/2003 10.19 (0.12) 3.99 3.87 -- -- --
12/31/2002 12.32 (0.14) (1.94) (2.08) (0.05) -- (0.05)
Redemption
fees (f)
----------
CGM ADVISOR TARGETED EQUITY FUND
Class A
6/30/2007(g) $ 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
Class B
6/30/2007(g) 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
Class C
6/30/2007(g) 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
Class Y
6/30/2007(g) 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
HANSBERGER INTERNATIONAL FUND
Class A
6/30/2007(g) $ 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
Class B
6/30/2007(g) 0.00
12/31/2006 0.00
12/31/2005 0.00
12/31/2004 0.00
12/31/2003 --
12/31/2002 --
(a)A sales charge for Class A and Class C (prior to February 1, 2004) shares,
and a contingent deferred sales charge for Class B and Class C shares are
not reflected in total return calculations. Periods less than one year, if
applicable, are not annualized.
(b)Per share net investment income (loss) has been calculated using the average
shares outstanding during the period.
(c)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
See accompanying notes to financial statements.
53
Ratios to average net assets:
-------------------------------------
Net assets,
Net asset Total end of Gross Net Net investment Portfolio
value, end return period expenses expenses income (loss) turnover
of period (%) (a) (c) (000's) (%) (e) (h) (%) (d) (h) (%) (h) rate (%)
- ---------- ----------- ----------- ----------- ----------- -------------- ---------
$ 11.58 11.9 $ 706,481 1.17 N/A 0.13 115
10.70 8.5 679,897 1.16 N/A 0.76 171
10.22 13.2 694,121 1.28 N/A 0.78 196
9.05 14.0 689,967 1.42 N/A 0.16 265
7.94 42.8 724,214 1.57 N/A (0.40) 261
5.56 (28.8) 602,989 1.47 N/A (0.86) 223
10.57 11.5 34,018 1.93 N/A (0.63) 115
9.84 7.8 43,032 1.91 N/A 0.02 171
9.48 12.4 53,005 2.03 N/A 0.03 196
8.45 13.1 57,527 2.17 N/A (0.58) 265
7.47 41.5 56,880 2.32 N/A (1.14) 261
5.28 (29.3) 45,633 2.23 N/A (1.62) 223
10.57 11.5 8,954 1.92 N/A (0.62) 115
9.84 7.7 8,688 1.90 N/A 0.04 171
9.48 12.4 5,133 2.04 N/A 0.03 196
8.45 13.1 3,214 2.17 N/A (0.58) 265
7.47 41.8 2,647 2.32 N/A (1.14) 261
5.27 (29.5) 2,187 2.23 N/A (1.62) 223
11.84 12.0 12,412 0.90 N/A 0.40 115
10.93 9.0 11,714 0.87 N/A 1.05 171
10.42 13.4 11,181 1.07 N/A 0.99 196
9.23 14.4 9,145 1.08 N/A 0.51 265
8.07 43.3 7,773 1.03 N/A 0.16 261
5.63 (28.3) 5,522 0.92 N/A (0.31) 223
$ 23.73 12.8 $ 124,544 1.43 N/A 1.48 23
21.50 24.1 112,814 1.49 N/A 0.75 49
19.88 16.1 89,663 1.81 N/A 0.62 45
17.12 13.6 73,707 1.92 1.91 0.14 81
15.07 39.0 59,762 2.32 2.30 (0.34) 92
10.84 (16.4) 50,053 2.19 N/A (0.45) 91
21.41 12.4 33,300 2.18 N/A 0.71 23
19.51 23.2 33,016 2.25 N/A 0.03 49
18.27 15.3 33,388 2.55 N/A (0.02) 45
15.85 12.7 45,213 2.67 2.66 (0.60) 81
14.06 38.0 60,296 3.07 3.05 (1.09) 92
10.19 (17.0) 53,306 2.94 N/A (1.20) 91
(d)The investment adviser agreed to reimburse a portion of the Fund's expenses
and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
(e)Represents total expenses prior to advisory fee waiver and/or reimbursement
of a portion of the Fund's expenses, if applicable.
(f)Amount rounds to less than $0.01 per share, if applicable.
(g)For the six months ended June 30, 2007 (unaudited)
(h)Computed on an annualized basis for periods less than one year.
54
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period.
Income (loss) from investment operations:
---------------------------------------
Net asset
value, Net
beginning investment Net realized Total from
of income and unrealized investment
period (loss) (b) gain (loss) operations
---------- ---------- -------------- ----------
HANSBERGER INTERNATIONAL FUND (continued)
Class C
6/30/2007(h) $ 19.48 $ 0.07 $ 2.33 $ 2.40
12/31/2006 18.28 0.00(f) 4.11 4.11
12/31/2005 15.86 (0.02) 2.44 2.42
12/31/2004 14.06 (0.09) 1.89 1.80
12/31/2003 10.19 (0.12) 3.99 3.87
12/31/2002 12.33 (0.14) (1.95) (2.09)
HARRIS ASSOCIATES FOCUSED VALUE FUND
Class A
6/30/2007(h) $ 11.56 $ (0.03) $ 0.87 $ 0.84
12/31/2006 12.08 (0.02) 1.50 1.48
12/31/2005 13.06 0.00(f) 0.76 0.76
12/31/2004 11.79 (0.02) 1.29 1.27
12/31/2003 9.24 (0.03) 2.58 2.55
12/31/2002 10.96 (0.03) (1.69) (1.72)
Class B
6/30/2007(h) 10.92 (0.07) 0.81 0.74
12/31/2006 11.59 (0.10) 1.43 1.33
12/31/2005 12.69 (0.10) 0.74 0.64
12/31/2004 11.55 (0.11) 1.25 1.14
12/31/2003 9.12 (0.10) 2.53 2.43
12/31/2002 10.90 (0.11) (1.67) (1.78)
Class C
6/30/2007(h) 10.92 (0.07) 0.82 0.75
12/31/2006 11.59 (0.10) 1.43 1.33
12/31/2005 12.69 (0.10) 0.74 0.64
12/31/2004 11.55 (0.11) 1.25 1.14
12/31/2003 9.12 (0.10) 2.53 2.43
12/31/2002 10.90 (0.11) (1.67) (1.78)
HARRIS ASSOCIATES LARGE CAP VALUE FUND
Class A
6/30/2007(h) $ 15.49 $ 0.02 $ 0.92 $ 0.94
12/31/2006 13.33 0.06 2.13 2.19
12/31/2005 13.37 0.05 (0.08) (0.03)
12/31/2004 12.25 0.04 1.08 1.12
12/31/2003 9.42 0.01 2.82 2.83
12/31/2002 11.78 0.01 (2.37) (2.36)
Class B
6/30/2007(h) 14.39 (0.04) 0.86 0.82
12/31/2006 12.48 (0.04) 1.98 1.94
12/31/2005 12.62 (0.04) (0.09) (0.13)
12/31/2004 11.64 (0.05) 1.03 0.98
12/31/2003 9.02 (0.07) 2.69 2.62
12/31/2002 11.37 (0.07) (2.28) (2.35)
Less distributions:
--------------------------------------
Dividends Distributions
from net from net
investment realized Total Redemption
income capital gains distributions fees (f)
---------- ------------- ------------- ----------
HANSBERGER INTERNATIONAL FUND (continued)
Class C
6/30/2007(h) $ (0.14) $ (0.36) $ (0.50) $ 0.00
12/31/2006 (0.21) (2.70) (2.91) 0.00
12/31/2005 -- -- -- 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 (0.05) -- (0.05) --
HARRIS ASSOCIATES FOCUSED VALUE FUND
Class A
6/30/2007(h) $ -- $ (0.13) $ (0.13) $ 0.00
12/31/2006 -- (2.00) (2.00) 0.00
12/31/2005 -- (1.74) (1.74) 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class B
6/30/2007(h) -- (0.13) (0.13) 0.00
12/31/2006 -- (2.00) (2.00) 0.00
12/31/2005 -- (1.74) (1.74) 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class C
6/30/2007(h) -- (0.13) (0.13) 0.00
12/31/2006 -- (2.00) (2.00) 0.00
12/31/2005 -- (1.74) (1.74) 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
HARRIS ASSOCIATES LARGE CAP VALUE FUND
Class A
6/30/2007(h) $ (0.04) $ -- $ (0.04) $ --
12/31/2006 (0.03) -- (0.03) --
12/31/2005 (0.01) -- (0.01) --
12/31/2004 -- -- -- --
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class B
6/30/2007(h) (0.04) -- (0.04) --
12/31/2006 (0.03) -- (0.03) --
12/31/2005 (0.01) -- (0.01) --
12/31/2004 -- -- -- --
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
(a)A sales charge for Class A and Class C (prior to February 1, 2004) shares
and a contingent deferred sales charge for Class B and Class C shares are
not reflected in total return calculations. Periods less than one year, if
applicable, are not annualized.
(b)Per share net investment income (loss) has been calculated using the average
shares outstanding during the period.
(c)The investment adviser agreed to reimburse a portion of the Fund's expenses
and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
(d)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
See accompanying notes to financial statements.
55
Ratios to average net assets:
----------------------------------------
Net assets,
Net asset Total end of Net Net investment Portfolio
value, end return period Gross expenses expenses income (loss) turnover
of period (%) (a) (d) (000's) (%) (g) (i) (%) (c) (i) (%) (i) rate (%)
- ---------- ----------- ----------- -------------- ----------- -------------- ---------
$ 21.38 12.4 $ 26,150 2.18 N/A 0.73 23
19.48 23.1 23,541 2.25 N/A 0.01 49
18.28 15.3 19,388 2.56 N/A (0.11) 45
15.86 12.8 17,046 2.67 2.66 (0.63) 81
14.06 38.0 12,557 3.07 3.05 (1.09) 92
10.19 (17.0) 11,013 2.94 N/A (1.20) 91
$ 12.27 7.2 $ 56,628 1.44 N/A (0.52) 22
11.56 12.7 62,603 1.51 N/A (0.12) 36
12.08 5.7 82,298 1.68 N/A (0.04) 39
13.06 10.8 108,042 1.70 N/A (0.15) 26
11.79 27.6 95,957 1.84 1.70 (0.28) 30
9.24 (15.7) 68,660 1.79 1.70 (0.35) 12
11.53 6.8 69,772 2.19 N/A (1.27) 22
10.92 11.9 78,950 2.26 N/A (0.87) 36
11.59 5.0 97,256 2.43 N/A (0.80) 39
12.69 9.9 110,275 2.45 N/A (0.90) 26
11.55 26.6 107,017 2.59 2.45 (1.03) 30
9.12 (16.3) 85,794 2.54 2.45 (1.10) 12
11.54 6.9 77,046 2.19 N/A (1.27) 22
10.92 11.9 87,033 2.27 N/A (0.88) 36
11.59 5.0 122,745 2.43 N/A (0.79) 39
12.69 9.9 144,780 2.45 N/A (0.90) 26
11.55 26.6 124,427 2.59 2.45 (1.03) 30
9.12 (16.3) 86,269 2.54 2.45 (1.10) 12
$ 16.39 6.1 $ 198,206 1.26(j) 1.25 0.22 13
15.49 16.5 195,714 1.30 1.30 0.44 23
13.33 (0.2) 188,763 1.46 1.30 0.40 39
13.37 9.1 222,434 1.49 1.30 0.30 27
12.25 30.0 215,259 1.62 1.45 0.07 30(e)
9.42 (20.0) 130,751 1.56 N/A 0.07 195
15.17 5.7 34,897 2.04(j) 2.03 (0.55) 13
14.39 15.6 42,894 2.04 2.05 (0.33) 23
12.48 (1.0) 59,035 2.21 2.05 (0.35) 39
12.62 8.4 79,949 2.24 2.05 (0.46) 27
11.64 29.1 91,085 2.37 2.20 (0.69) 30(e)
9.02 (20.7) 71,436 2.31 N/A (0.68) 195
(e)Portfolio turnover excludes the impact of assets resulting from a merger
with another fund.
(f)Amount rounds to less than $0.01 per share, if applicable.
(g)Represents total expenses prior to advisory fee waiver and/or reimbursement
of a portion of the Fund's expenses, if applicable.
(h)For the six months ended June 30, 2007 (unaudited)
(i)Computed on an annualized basis for periods less than one year.
(j)Includes expense recapture of 0.01%, and 0.04%, for Class A and B,
respectively.
56
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period.
Income (loss) from investment operations: Less distributions:
---------------------------------------- ------------------------
Net asset
value, Net Dividends
beginning investment Net realized Total from from net
of income and unrealized investment investment Total
period (loss) (b) gain (loss) operations income distributions
---------- ---------- -------------- ---------- ---------- -------------
HARRIS ASSOCIATES LARGE CAP VALUE FUND (continued)
Class C
6/30/2007(h) $ 14.37 $ (0.04) $ 0.86 $ 0.82 $ (0.04) $ (0.04)
12/31/2006 12.46 (0.04) 1.98 1.94 (0.03) (0.03)
12/31/2005 12.60 (0.04) (0.09) (0.13) (0.01) (0.01)
12/31/2004 11.63 (0.05) 1.02 0.97 -- --
12/31/2003 9.01 (0.07) 2.69 2.62 -- --
12/31/2002 11.36 (0.07) (2.28) (2.35) -- --
Class Y
6/30/2007(h) 16.01 0.05 0.96 1.01 (0.04) (0.04)
12/31/2006 13.72 0.12 2.20 2.32 (0.03) (0.03)
12/31/2005 13.74 0.09 (0.10) (0.01) (0.01) (0.01)
12/31/2004 12.54 0.07 1.13 1.20 -- --
12/31/2003 9.59 0.06 2.89 2.95 -- --
12/31/2002 11.93 0.07 (2.41) (2.34) -- --
NATIXIS U.S. DIVERSIFIED PORTFOLIO*
Class A
6/30/2007(h) $ 22.94 $ (0.04) $ 2.61 $ 2.57 $ -- $ --
12/31/2006 20.17 0.04 2.73 2.77 -- --
12/31/2005 18.75 (0.11) 1.53 1.42 -- --
12/31/2004 16.61 (0.12) 2.26 2.14 -- --
12/31/2003 12.43 (0.13) 4.31 4.18 -- --
12/31/2002 15.90 (0.11) (3.36) (3.47) -- --
Class B
6/30/2007(h) 20.33 (0.12) 2.32 2.20 -- --
12/31/2006 18.01 (0.11) 2.43 2.32 -- --
12/31/2005 16.87 (0.22) 1.36 1.14 -- --
12/31/2004 15.06 (0.23) 2.04 1.81 -- --
12/31/2003 11.35 (0.22) 3.93 3.71 -- --
12/31/2002 14.64 (0.20) (3.09) (3.29) -- --
Class C
6/30/2007(h) 20.36 (0.12) 2.31 2.19 -- --
12/31/2006 18.03 (0.11) 2.44 2.33 -- --
12/31/2005 16.89 (0.22) 1.36 1.14 -- --
12/31/2004 15.08 (0.23) 2.04 1.81 -- --
12/31/2003 11.37 (0.22) 3.93 3.71 -- --
12/31/2002 14.66 (0.20) (3.09) (3.29) -- --
Class Y
6/30/2007(h) 24.45 0.01 2.78 2.79 -- --
12/31/2006 21.41 0.14 2.90 3.04 -- --
12/31/2005 19.82 (0.03) 1.62 1.59 -- --
12/31/2004 17.46 (0.05) 2.41 2.36 -- --
12/31/2003 12.98 (0.04) 4.52 4.48 -- --
12/31/2002 16.50 (0.02) (3.50) (3.52) -- --
* Formerly IXIS U.S. Diversified Portfolio (See Note 10 of Notes to Financial
Statements).
(a)A sales charge for Class A and Class C (prior to February 1, 2004) shares
and a contingent deferred sales charge for Class B and Class C shares are
not reflected in total return calculations. Periods less than one year, if
applicable, are not annualized.
(b)Per share net investment income (loss) has been calculated using the average
shares outstanding during the period.
(c)The investment adviser agreed to reimburse a portion of the Fund's expenses
and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
(d)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
See accompanying notes to financial statements.
57
Ratios to average net assets:
-----------------------------------------
Net assets,
Net asset Total end of Gross Net Net investment Portfolio
value, end return period expenses expenses income (loss) turnover
of period (%) (a) (d) (000's) (%) (f) (i) (%) (c) (i) (%) (i) rate (%)
- ---------- ----------- ----------- ----------- ----------- -------------- ---------
$ 15.15 5.7 $ 17,953 2.02(k) 2.01 (0.54) 13
14.37 15.6 18,089 2.06 2.05 (0.32) 23
12.46 (1.0) 20,308 2.21 2.05 (0.35) 39
12.60 8.3 26,392 2.24 2.05 (0.42) 27
11.63 29.1 15,553 2.37 2.20 (0.69) 30(e)
9.01 (20.7) 6,440 2.31 N/A (0.68) 195
16.98 6.3 14,263 0.86 0.86(j) 0.61 13
16.01 17.0 14,057 0.91(g) N/A 0.82 23
13.72 (0.0) 14,226 1.09 1.05 0.65 39
13.74 9.6 18,027 0.99 N/A 0.58 27
12.54 30.8 26,545 1.01 N/A 0.51 30(e)
9.59 (19.6) 10,569 0.96 N/A 0.66 195
$ 25.51 11.3 $ 416,905 1.43 N/A (0.34) 40
22.94 13.7 393,430 1.46 N/A 0.17 83
20.17 7.6 386,084 1.73 N/A (0.57) 97
18.75 12.9 392,726 1.87 N/A (0.71) 104
16.61 33.6 354,755 1.99 N/A (0.94) 102
12.43 (21.8) 269,180 1.89 N/A (0.75) 95
22.53 10.8 141,525 2.18 N/A (1.09) 40
20.33 12.9 147,819 2.22 N/A (0.60) 83
18.01 6.8 174,745 2.48 N/A (1.32) 97
16.87 12.0 223,349 2.62 N/A (1.50) 104
15.06 32.7 272,533 2.74 N/A (1.69) 102
11.35 (22.5) 282,361 2.64 N/A (1.50) 95
22.55 10.8 47,920 2.18 N/A (1.09) 40
20.36 12.9 46,064 2.22 N/A (0.59) 83
18.03 6.8 48,262 2.48 N/A (1.32) 97
16.89 12.0 58,883 2.62 N/A (1.48) 104
15.08 32.6 60,783 2.74 N/A (1.69) 102
11.37 (22.4) 54,291 2.64 N/A (1.50) 95
27.24 11.5 21,509 1.03 N/A 0.06 40
24.45 14.2 21,155 1.03 N/A 0.60 83
21.41 8.0 20,445 1.32 N/A (0.16) 97
19.82 13.5 25,060 1.33 N/A (0.27) 104
17.46 34.5 47,485 1.34 N/A (0.30) 102
12.98 (21.3) 37,911 1.29 N/A (0.15) 95
(e)Portfolio turnover excludes the impact of assets resulting from a merger
with another fund.
(f)Represents total expenses prior to advisory fee waiver and/or reimbursement
of a portion of the Fund's expenses, if applicable.
(g)Includes expense waiver recapture of 0.04%
(h)For the six months ended June 30, 2007 (unaudited)
(i)Computed on an annualized basis for periods less than one year.
(j)Effect of voluntary waiver of expenses by adviser was less than 0.005%.
(k)Includes expense recapture of 0.02%.
58
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period.
Ratios to average net assets:
---------------------------------------
Net asset
value, Net
beginning investment Net realized Total from
of income and unrealized investment
period (loss) (b) gain (loss) operations
---------- ---------- -------------- ----------
NATIXIS VALUE FUND*
Class A
6/30/2007(j) $ 8.77 $ 0.02 $ 0.60 $ 0.62
12/31/2006 8.32 0.04 1.56 1.60
12/31/2005 8.92 0.02 0.54 0.56
12/31/2004 8.16 0.00(c) 0.93 0.93
12/31/2003 6.20 (0.01) 1.97 1.96
12/31/2002 7.70 (0.01) (1.49) (1.50)
Class B
6/30/2007(j) 7.75 (0.01) 0.52 0.51
12/31/2006 7.51 (0.03) 1.40 1.37
12/31/2005 8.21 (0.05) 0.51 0.46
12/31/2004 7.57 (0.06) 0.87 0.81
12/31/2003 5.80 (0.06) 1.83 1.77
12/31/2002 7.26 (0.06) (1.40) (1.46)
Class C
6/30/2007(j) 7.75 (0.01) 0.52 0.51
12/31/2006 7.50 (0.03) 1.41 1.38
12/31/2005 8.21 (0.05) 0.50 0.45
12/31/2004 7.57 (0.05) 0.86 0.81
12/31/2003 5.80 (0.06) 1.83 1.77
12/31/2002 7.26 (0.06) (1.40) (1.46)
VAUGHAN NELSON SMALL CAP VALUE FUND
Class A
6/30/2007(j) $ 20.90 $ 0.01 $ 1.84 $ 1.85
12/31/2006 17.69 (0.05) 3.26 3.21
12/31/2005 16.07 (0.08) 1.70 1.62
12/31/2004 13.94 (0.13) 2.26 2.13
12/31/2003 10.05 (0.19) 4.08 3.89
12/31/2002 14.52 (0.21) (4.26) (4.47)
Class B
6/30/2007(j) 19.19 (0.06) 1.69 1.63
12/31/2006 16.36 (0.20) 3.03 2.83
12/31/2005 14.97 (0.19) 1.58 1.39
12/31/2004 13.08 (0.22) 2.11 1.89
12/31/2003 9.51 (0.26) 3.83 3.57
12/31/2002 13.84 (0.28) (4.05) (4.33)
Class C
6/30/2007(j) 19.19 (0.06) 1.70 1.64
12/31/2006 16.37 (0.19) 3.01 2.82
12/31/2005 14.98 (0.19) 1.58 1.39
12/31/2004 13.09 (0.22) 2.11 1.89
12/31/2003 9.51 (0.26) 3.84 3.58
12/31/2002 13.84 (0.28) (4.05) (4.33)
Class Y
6/30/2007(j) 20.91 0.05 1.85 1.90
12/31/2006(e) 19.02 0.02 1.87 1.89
Less distributions:
-----------------------------------------
Dividends Distributions
from net from net
investment realized Total Redemption
income capital gains distributions fees (c)
---------- ------------- ------------- ----------
NATIXIS VALUE FUND*
Class A
6/30/2007(j) $ (0.01) $ (0.20) $ (0.21) $ --
12/31/2006 (0.02) (1.13) (1.15) --
12/31/2005 -- (1.16) (1.16) --
12/31/2004 -- (0.17) (0.17)
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class B
6/30/2007(j) (0.01) (0.20) (0.21) --
12/31/2006 (0.00)(c) (1.13) (1.13) --
12/31/2005 -- (1.16) (1.16) --
12/31/2004 -- (0.17) (0.17) --
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class C
6/30/2007(j) (0.01) (0.20) (0.21) --
12/31/2006 (0.00)(c) (1.13) (1.13) --
12/31/2005 -- (1.16) (1.16) --
12/31/2004 -- (0.17) (0.17) --
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
VAUGHAN NELSON SMALL CAP VALUE FUND
Class A
6/30/2007(j) $ -- $ -- $ -- $ 0.00
12/31/2006 -- -- -- 0.00
12/31/2005 -- -- -- 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class B
6/30/2007(j) -- -- -- 0.00
12/31/2006 -- -- -- 0.00
12/31/2005 -- -- -- 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class C
6/30/2007(j) -- -- -- 0.00
12/31/2006 -- -- -- 0.00
12/31/2005 -- -- -- 0.00
12/31/2004 -- -- -- 0.00
12/31/2003 -- -- -- --
12/31/2002 -- -- -- --
Class Y
6/30/2007(j) -- -- -- 0.00
12/31/2006(e) -- -- -- --
* Formerly IXIS Value Fund (See Note 10 of Notes to Financial Statements).
(a)A sales charge for Class A and Class C (prior to February 1, 2004) shares
and a contingent deferred sales charge for Class B and Class C shares are
not reflected in total return calculations. Periods less than one year, if
applicable, are not annualized.
(b)Per share net investment income (loss) has been calculated using the average
shares outstanding during the period.
(c)Amount rounds to less than $0.01 per share, if applicable.
(d)Effect of voluntary waiver of expenses by advisor was less than 0.005%.
(e)From commencement of Class operations on August 31, 2006 through
December 31, 2006.
See accompanying notes to financial statements.
59
Ratios to average net assets:
-----------------------------------------
Net assets,
Net asset Total end of Gross Net Net investment Portfolio
value, end return period expenses expenses income (loss) turnover
of period (%) (a) (g) (000's) (%) (h) (i) (%) (f) (i) (%) (i) rate (%)
- ---------- ----------- ----------- ----------- ----------- -------------- ---------
$ 9.18 7.1 $ 111,282 1.35 1.35(d) 0.44 25
8.77 19.7 110,588 1.38 N/A 0.43 61
8.32 6.2 98,353 1.60 1.60(d) 0.19 62
8.92 11.4 105,359 1.66 N/A 0.03 56
8.16 31.6 110,228 1.81 N/A (0.15) 75
6.20 (19.5) 99,894 1.68 N/A (0.21) 67
8.05 6.7 17,095 2.10 2.10(d) (0.31) 25
7.75 18.6 18,795 2.14 N/A (0.34) 61
7.51 5.5 22,458 2.35 2.35(d) (0.56) 62
8.21 10.7 27,804 2.41 N/A (0.72) .56
7.57 30.5 30,029 2.56 N/A (0.90) 75
5.80 (20.1) 27,808 2.43 N/A (0.96) 67
8.05 6.7 3,149 2.10 2.10(d) (0.32) 25
7.75 18.8 2,986 2.14 N/A (0.33) 61
7.50 5.4 2,916 2.35 2.35(d) (0.56) 62
8.21 10.7 3,079 2.41 N/A (0.70) 56
7.57 30.5 2,134 2.56 N/A (0.90) 75
5.80 (20.1) 2,047 2.43 N/A (0.96) 67
$ 22.75 9.0 $ 97,801 1.53 N/A 0.13 44
20.90 18.1 85,285 1.59 N/A (0.28) 88
17.69 10.1 58,963 1.92 N/A (0.47) 80
16.07 15.3 45,138 2.01 N/A (0.89) 172
13.94 38.7 45,442 2.33 N/A (1.69) 156
10.05 (30.8) 38,441 2.13 N/A (1.72) 160
20.82 8.6 30,618 2.28 N/A (0.62) 44
19.19 17.2 32,606 2.37 N/A (1.10) 88
16.36 9.3 38,732 2.66 N/A (1.24) 80
14.97 14.5 54,652 2.76 N/A (1.65) 172
13.08 37.5 55,662 3.08 N/A (2.44) 156
9.51 (31.3) 46,215 2.88 N/A (2.47) 160
20.83 8.6 21,657 2.28 N/A (0.62) 44
19.19 17.2 18,186 2.35 N/A (1.04) 88
16.37 9.3 13,667 2.67 N/A (1.23) 80
14.98 14.4 13,549 2.76 N/A (1.63) 172
13.09 37.6 12,042 3.08 N/A (2.44) 156
9.51 (31.3) 10,930 2.88 N/A (2.47) 160
22.81 9.1 465 1.22(k) N/A 0.44 44
20.91 9.9 427 1.90 1.35 0.35 88
(f)The investment adviser agreed to reimburse a portion of the Fund's expenses
and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
(g)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
(h)Represents total expenses prior to advisory fee waiver and/or reimbursement
of a portion of the Fund's expenses, if applicable.
(i)Computed on an annualized basis for periods less than one year.
(j)For the six months ended June 30, 2007 (unaudited)
(k)Includes expense recapture of 0.07%.
60
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period.
Income (loss) from investment operations: Less distributions:
---------------------------------------- ---------------------------
Net asset
value, Net Distributions
beginning investment Net realized Total from from net
of income and unrealized investment realized Total
period (loss) (b) gain (loss) operations capital gains distributions
---------- ---------- -------------- ---------- ------------- -------------
WESTPEAK CAPITAL GROWTH FUND
Class A
6/30/2007(h) $ 13.09 $ (0.05) $ 0.46 $ 0.41 $ -- $ --
12/31/2006 11.81 (0.07) 1.35 1.28 -- --
12/31/2005 11.43 (0.10) 0.48 0.38 -- --
12/31/2004 10.87 (0.02)(c) 0.58 0.56 -- --
12/31/2003 8.58 (0.08) 2.37 2.29 -- --
12/31/2002 11.93 (0.09) (3.26) (3.35) -- --
Class B
6/30/2007(h) 11.20 (0.09) 0.40 0.31 -- --
12/31/2006 10.19 (0.14) 1.15 1.01 -- --
12/31/2005 9.94 (0.16) 0.41 0.25 -- --
12/31/2004 9.52 (0.09)(c) 0.51 0.42 -- --
12/31/2003 7.56 (0.13) 2.09 1.96 -- --
12/31/2002 10.61 (0.15) (2.90) (3.05) -- --
Class C
6/30/2007(h) 11.18 (0.09) 0.40 0.31 -- --
12/31/2006 10.17 (0.14) 1.15 1.01 -- --
12/31/2005 9.92 (0.16) 0.41 0.25 -- --
12/31/2004 9.50 (0.09)(c) 0.51 0.42 -- --
12/31/2003 7.56 (0.13) 2.07 1.94 -- --
12/31/2002 10.60 (0.14) (2.90) (3.04) -- --
(a)A sales charge for Class A and Class C (prior to February 1, 2004) shares
and a contingent deferred sales charge for Class B and Class C shares are
not reflected in total return calculations. Periods less than one year, if
applicable, are not annualized.
(b)Per share net investment income (loss) has been calculated using the average
shares outstanding during the period.
(c)Includes special one-time distribution from Microsoft Corp. Without this
distribution, net investment loss per share would have been $(0.08), $(0.14)
and $(0.14) for Class A, Class B and Class C shares, respectively, and the
ratio of net investment loss to average net assets would have been (0.76)%,
(1.52)% and (1.51)% for Class A, Class B and Class C shares, respectively.
See accompanying notes to financial statements.
61
Ratios to average net assets:
-----------------------------------
Net assets,
Net asset Total end of Gross Net Net investment Portfolio
value, end return period expenses expenses income (loss) turnover
of period (%) (a) (e) (000's) (%) (f) (i) (%) (d) (i) (%) (i) rate (%)
- ---------- ----------- ----------- ----------- ----------- -------------- ---------
$ 13.50 3.1 $ 46,400 1.56 1.50 (0.81) 57
13.09 10.8 47,332 1.62 1.61 (0.59) 126
11.81 3.3 49,680 1.88 N/A (0.84) 132
11.43 5.2 57,420 1.89 N/A (0.18)(c) 121
10.87 26.7 63,380 1.93 N/A (0.85) 107
8.58 (28.1) 58,729 1.75 N/A (0.84) 103
11.51 2.8 7,390 2.31 2.25 (1.56) 57
11.20 9.9 8,599 2.38 2.36 (1.35) 126
10.19 2.5 9,864 2.63 N/A (1.59) 132
9.94 4.4 12,916 2.64 N/A (0.97)(c) 121
9.52 25.9 16,485 2.68 N/A (1.60) 107
7.56 (28.8) 16,267 2.50 N/A (1.59) 103
11.49 2.8 684 2.31 2.25 (1.57) 57
11.18 9.9 758 2.38 2.36 (1.35) 126
10.17 2.5 936 2.63 N/A (1.59) 132
9.92 4.4 1,013 2.64 N/A (0.94)(c) 121
9.50 25.7 1,174 2.68 N/A (1.60) 107
7.56 (28.7) 847 2.50 N/A (1.59) 103
(d)The investment adviser agreed to reimburse a portion of the Fund's expenses
and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
(e)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
(f)Represents total expenses prior to advisory fee waiver and/or reimbursement
of a portion of the Fund's expenses, if applicable.
(h)For the six months ended June 30, 2007 (unaudited)
(i)Computed on an annualized basis for periods less than one year.
62
NOTES TO FINANCIAL STATEMENTS
June 30, 2007 (Unaudited)
1. Organization. Natixis Funds Trust I (formerly IXIS Advisor Funds Trust I),
Natixis Funds Trust II (formerly IXIS Advisor Funds Trust II), and Natixis
Funds Trust III (formerly IXIS Advisor Funds Trust III) (the "Trusts" and each
a "Trust") are each organized as a Massachusetts business trust. Each Trust is
registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as an open-end management investment company. Each Declaration of Trust permits
the Board of Trustees to authorize the issuance of an unlimited number of
shares of the Trust in multiple series. Information presented in these
financial statements pertains to certain equity funds of the Trusts; the
financial statements for the other funds of the Trusts are presented in
separate reports. The following funds (individually, a "Fund" and collectively,
the "Funds") are included in this report:
Natixis Funds Trust I:
CGM Advisor Targeted Equity Fund (the "Targeted Equity Fund")
Hansberger International Fund (the "International Fund")
Natixis U.S. Diversified Portfolio (formerly IXIS U.S. Diversified Portfolio)
(the "U.S. Diversified Portfolio")
Natixis Value Fund (formerly IXIS Value Fund) (the "Value Fund")
Vaughan Nelson Small Cap Value Fund (the "Small Cap Value Fund")
Westpeak Capital Growth Fund (the "Capital Growth Fund")
Natixis Funds Trust II:
Harris Associates Large Cap Value Fund (the "Large Cap Value Fund")
Natixis Funds Trust III:
Harris Associates Focused Value Fund (the "Focused Value Fund")
Each Fund offers Class A, Class B, and Class C shares. Targeted Equity Fund,
Small Cap Value Fund, Large Cap Value Fund and U.S. Diversified Portfolio also
offer Class Y shares. On June 1, 2007, the Board of Trustees of the Natixis
Funds (formerly IXIS Advisor Funds) approved the termination of offering of
Class B shares. No new accounts will be opened in Class B shares after July 30,
2007. No additional investments into Class B shares may be made after
October 12, 2007. Existing Class B shareholders may continue as Class B
shareholders continue to reinvest dividends into Class B shares and exchange
their Class B shares for Class B shares of other Natixis Funds subject to
existing exchange privileges as described in the Prospectus.
Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B
shares do not pay a front-end sales charge, but pay higher Rule 12b-1 fees than
Class A shares for eight years (at which point they automatically convert to
Class A shares), and are subject to a contingent deferred sales charge ("CDSC")
if those shares are redeemed within six years of purchase. Class C shares do
not pay a front-end sales charge, do not convert to any other class of shares
and pay higher Rule 12b-1 fees than Class A shares and may be subject to a CDSC
of 1.00% if those shares are redeemed within one year. Class Y shares do not
pay a front-end sales charge, a CDSC or Rule 12b-1 fees. They are generally
intended for institutional investors with a minimum initial investment of
$100,000, though some categories of investors are excepted from the minimum
investment amount as outlined in the Funds' prospectus. Prior to March 16,
2007, the minimum initial investment for Class Y shares was $1,000,000.
Most expenses of the Trusts can be directly attributed to a fund. Expenses
which cannot be directly attributed to a fund are generally apportioned based
on the relative net assets of each of the funds in the Trusts. Expenses of a
fund are borne pro rata by the holders of each Class of shares, except that
each Class bears expenses unique to that Class (including the Rule 12b-1
service and distribution fees and transfer agent fees applicable to such
class). In addition, each Class votes as a Class only with respect to its own
Rule 12b-1 Plan. Shares of each Class would receive their pro rata share of the
net assets of a fund if the fund were liquidated. The Trustees approve separate
dividends from net investment income on each Class of shares.
2. Significant Accounting Policies. The following is a summary of significant
accounting policies consistently followed by each Fund in the preparation of
its financial statements. The Funds' financial statements are prepared in
accordance with accounting principles generally accepted in the United States
of America which require the use of management estimates that affect the
reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
a. Security Valuation. Equity securities, including closed-end investment
companies and exchange-traded funds, for which market quotations are readily
available are valued at market value, as reported by pricing services
recommended by the investment adviser and the subadvisers and approved by the
Board of Trustees. Such pricing services generally use the security's last sale
price on the exchange or market where primarily traded or, if there is no
reported sale during the day, the closing bid price. Securities traded on the
NASDAQ Global Select Market, NASDAQ Global Market and NASDAQ Capital Markets
are valued at the NASDAQ Official Closing Price ("NOCP"), or if lacking a NOCP,
at the most recent bid quotation on the applicable NASDAQ Market. Debt
securities for which market quotations are readily available (other than
short-term obligations purchased with an original or remaining maturity of
sixty days or less) are generally valued at market price on the basis of
valuations furnished to the Funds by a pricing service recommended by the
investment adviser and the subadvisers and approved by the Board of Trustees,
which service determines valuations for normal, institutional-size trading
units of such securities using market information, transactions for comparable
securities and various relationships between securities which are generally
recognized by institutional traders. Broker-dealer bid quotations may also be
used to value debt and equity securities where a pricing service does not price
a security or where a pricing service does not provide a reliable price for the
security. In instances where broker-dealer bid quotations are not available,
certain securities held by the Funds may be valued on
63
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
the basis of a price provided by a principal market maker. The prices provided
by the principal market makers may differ from the value that would be realized
if the securities were sold. Short-term obligations purchased with an original
or remaining maturity of sixty days or less are valued at amortized cost, which
approximates market value. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Funds' subadvisors using consistently applied procedures under the general
supervision of the Board of Trustees. Investments in other open-end investment
companies are valued at their net asset value each day.
Certain Funds may hold securities traded in foreign markets. Foreign securities
are valued at the market price in the foreign market. However, if events
occurring after the close of the foreign market (but before the close of
regular trading on the New York Stock Exchange) are believed to materially
affect the value of those securities, such securities are fair valued pursuant
to procedures approved by the Board of Trustees. When fair valuing securities,
the Funds may, among other things, use modeling tools or other processes that
may take into account factors such as securities market activity and/or
significant events that occur after the close of the foreign market and before
the Funds calculate their net asset values.
b. Security Transactions and Related Investment Income. Security transactions
are accounted for on trade date. Dividend income is recorded on ex-dividend
date, or in the case of certain foreign securities, as soon as the Fund is
notified, and interest income is recorded on an accrual basis. Interest income
is increased by the accretion of discount and decreased by the amortization of
premium. Investment income is recorded net of foreign taxes withheld when
applicable. In determining net gain or loss on securities sold, the cost of
securities has been determined on an identified cost basis. Investment income,
non-class specific expenses and realized and unrealized gains and losses are
allocated on a pro rata basis to each Class based on the relative net assets of
each Class to the total net assets of the Fund.
c. Foreign Currency Translation. The books and records of the Funds are
maintained in U.S. dollars. The value of securities, currencies and other
assets and liabilities denominated in currencies other than U.S. dollars are
translated into U.S. dollars based upon foreign exchange rates prevailing at
the end of the period. Purchases and sales of investment securities, income and
expenses are translated on the respective dates of such transactions.
Since the values of investment securities are presented at the foreign exchange
rates prevailing at the end of the period, it is not practical to isolate that
portion of the results of operations arising from changes in exchange rates
from fluctuations arising from changes in market prices of the investment
securities. Such changes are included with the net realized and unrealized gain
or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign
currency, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Funds' books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities, other than investment securities, at the end of the
fiscal period, resulting from changes in exchange rates.
Each Fund may use foreign currency exchange contracts to facilitate
transactions in foreign-denominated investments. Losses may arise from changes
in the value of the foreign currency or if the counterparties do not perform
under the contracts' terms.
Each Fund may purchase investments of foreign issuers. Investing in securities
of foreign issuers involves special risks and considerations not typically
associated with investing in U.S. companies and securities of the U.S.
government. These risks include revaluation of currencies and the risk of
appropriation. Moreover, the markets for securities of many foreign issuers may
be less liquid and the price of such securities may be more volatile than those
of comparable U.S. companies and the U.S. government.
d. Forward Foreign Currency Contracts. The International Fund, the U.S.
Diversified Portfolio and the Value Fund may enter into forward foreign
currency contracts. Contracts to buy generally are used to acquire exposure to
foreign currencies, while contracts to sell generally are used to hedge a
Fund's investments against currency fluctuation. Also, a contract to buy or
sell can offset a previous contract. These contracts involve market risk in
excess of the unrealized gain or loss reflected in the Funds' Statement of
Assets and Liabilities. The U.S. dollar value of the currencies a Fund has
committed to buy or sell represents the aggregate exposure to each currency a
Fund has acquired or hedged through currency contracts outstanding at period
end.
All contracts are "marked-to-market" daily at the applicable exchange rates and
any gains or losses are recorded for financial statement purposes as unrealized
until settlement date. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar. At June 30, 2007, there were no open forward currency
contracts.
e. Federal and Foreign Income Taxes. The Trusts treat each Fund as a separate
entity for federal income tax purposes. Each Fund intends to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies, and to distribute to its shareholders substantially all of its net
investment income and any net realized capital gains, at least annually.
Management has performed an analysis of each Fund's tax positions taken on
federal and state tax returns that remain subject to examinations (tax years
ended December 31, 2004 - 2006) and has concluded that no provisions for income
tax are required. Fund Management is not aware of any events that are
reasonably possible to occur in the next twelve months that would result in the
amounts of any unrecognized tax benefits significantly increasing or decreasing
for the Funds.
A Portfolio may be subject to foreign taxes on income and gains on investments
that are accrued based upon the Portfolio's understanding of the tax rules and
regulations that exist in the countries in which the Portfolio invests. Foreign
governments may also impose taxes or other payments on investments with respect
to foreign securities. Such taxes are accrued as applicable.
64
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
f. Dividends and Distributions to Shareholders. Dividends and distributions are
recorded on ex-dividend date. The timing and characterization of certain income
and capital gain distributions are determined annually in accordance with
federal tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These differences are primarily due
to differing treatments for book and tax purposes of items such as net
operating losses, foreign currency transactions and gains realized from passive
foreign investment companies ("PFICs"). Permanent book and tax basis
differences relating to shareholder distributions, net investment income, and
net realized gains will result in reclassifications to capital accounts.
Temporary differences between book and tax distributable earnings are primarily
due to deferred Trustees' fees, capital loss carryforwards, wash sales,
distributions from Real Estate Investment Trusts ("REITs") and gains realized
from passive foreign investment companies. Distributions from net investment
income and short-term capital gains are considered to be ordinary income for
tax purposes.
Tax characterization of distributions is determined on an annual basis. The tax
character of distributions paid to shareholders during the year ended
December 31, 2006 was as follows:
2006 Distributions Paid From:
- ------------------------------------
Ordinary Long-Term
Fund Income Capital Gains Total
---- ------ ------------- -----
Targeted Equity Fund $5,318,245 $20,781,541 $26,099,786
International Fund 5,684,336 16,199,875 21,884,211
Focused Value Fund -- 37,532,762 37,532,762
Large Cap Value Fund 636,750 -- 636,750
Value Fund 3,406,132 12,664,466 16,070,598
As of December 31, 2006, capital loss carryforwards and post-October losses
were as follows:
Targeted International Focused Large Cap U.S. Diversified Value
Equity Fund Fund Value Fund Value Fund Portfolio Fund
- - ----------- ------------- ---------- ----------- ---------------- -------
Capital loss carryforward:
Expires December 31, 2009 -- -- -- (50,921,004) (8,873,074) --
Expires December 31, 2010 -- -- -- (24,633,843) (62,468,898) --
Expires December 31, 2011 -- -- -- (9,965,466) -- --
------- ------- ------- ----------- ----------- -------
Total capital loss carryforward -- -- -- (85,520,313) (71,341,972) --
Deferred net currency losses (post October) -- -- -- -- (6,591) --
======= ======= ======= =========== =========== =======
Small Cap Capital
Value Fund Growth Fund
- - ----------- -----------
Capital loss carryforward:
Expires December 31, 2009 -- (20,489,767)
Expires December 31, 2010 (14,054,764) (26,883,047)
Expires December 31, 2011 -- (4,097,913)
----------- -----------
Total capital loss carryforward (14,054,764) (51,470,727)
Deferred net currency losses (post October) -- --
=========== ===========
g. Repurchase Agreements. Each Fund, through its custodian, receives delivery
of the underlying securities collateralizing repurchase agreements. It is each
Fund's policy that the market value of the collateral be at least equal to 102%
of the repurchase price, including interest. The repurchase agreements are
tri-party arrangements whereby the collateral is held at the custodian bank in
a segregated account for the benefit of the Fund and on behalf of the
counterparty. Repurchase agreements could involve certain risks in the event of
default or insolvency of the counterparty including possible delays or
restrictions upon a Fund's ability to dispose of the underlying securities.
h. Securities Lending. The Funds have entered into an agreement with State
Street Bank and Trust Company ("State Street Bank"), as agent of the Funds, to
lend securities to certain designated borrowers. The loans are collateralized
with cash or securities in an amount equal to at least 105% or 102% of the
market value of the loaned international or domestic securities, respectively,
when the loan is initiated. Thereafter, the value of the collateral must remain
at least 102% of the market value of loaned securities for U.S. equities and
U.S. corporate debt; at least 105% of the market value of loaned securities for
non-U.S. equities; and at least 100% of the market value of loaned securities
for U.S. government securities, sovereign debt issued by non-U.S. governments
and non-U.S. corporate debt. In the event that the market value of the
collateral falls below the required percentages described above, the borrower
will deliver additional collateral on the next business day. As with other
extensions of credit, the Funds may bear the risk of loss with respect to the
investment of the collateral. The Funds invest cash collateral in short-term
investments, a portion of the income from which is remitted to the borrowers
and the remainder allocated between the Funds and State Street Bank as lending
agent. The market value of securities on loan to borrowers and the value of
collateral held by the Funds with respect to such loans at June 30, 2007 were
as follows:
Market Value of Value of
Fund Securities on Loan Collateral
---- ------------------ ----------
Targeted Equity Fund $ 96,007,490 $ 97,935,744
International Fund 45,297,033 46,746,801
Focused Value Fund 40,821,373 41,831,557
Large Cap Value Fund 11,648,441 12,037,959
U.S. Diversified Portfolio 124,674,737 128,216,712
Value Fund 18,379,848 18,816,596
Small Cap Value Fund 37,561,076 38,551,479
Capital Growth Fund -- --
65
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
i. Indemnifications. Under the Trusts' organizational documents, their officers
and Trustees are indemnified against certain liability arising out of the
performance of their duties to the Funds. Additionally, in the normal course of
business, the Funds enter into contracts with service providers that contain
general indemnification clauses. The Funds' maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Funds that have not yet occurred. However, based on experience, the
Funds expect the risk of loss to be remote.
j. New Accounting Pronouncements. In September, 2006, Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"), was issued
and is effective for fiscal years beginning after November 15, 2007. SFAS 157
defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is currently
evaluating the impact, if any, the adoption of SFAS 157 will have on the Funds'
financial statements.
3. Purchases and Sales of Securities. For the six months ended June 30, 2007,
purchases and sales of securities (excluding short-term investments) were as
follows:
Fund Purchases Sales
---- --------- -----
Targeted Equity Fund $832,646,991 $896,964,691
International Fund 39,532,133 44,360,454
Focused Value Fund 46,427,355 88,878,183
Large Cap Value Fund 34,478,360 53,326,799
U.S. Diversified Portfolio 244,046,154 299,277,592
Value Fund 32,342,046 41,458,931
Small Cap Value Fund 64,610,546 61,240,081
Capital Growth Fund 31,541,421 36,072,874
4. Management Fees and Other Transactions with Affiliates.
a. Management Fees. Natixis Asset Management Advisors, L.P. ("Natixis
Advisors") (formerly IXIS Asset Management Advisors, L.P.) serves as investment
adviser to each Fund except the Targeted Equity Fund. Capital Growth Management
Limited Partnership ("CGM") is the investment adviser to the Targeted Equity
Fund. Under the terms of the management agreements, each Fund pays a management
fee at the following annual rates, calculated daily and payable monthly, based
on each Fund's average daily net assets:
Percentage of Average Daily Net Assets
- - ------------------------------------------------------------
First Next Next Next Over
Fund $200 million $300 million $500 million $1 billion $2 billion
- ---- ------------ ------------ ------------ ---------- ----------
Targeted Equity Fund 0.75% 0.70% 0.65% 0.65% 0.60%
International Fund 0.80% 0.75% 0.75% 0.75% 0.75%
Focused Value Fund 0.90% 0.90% 0.90% 0.90% 0.90%
Large Cap Value Fund 0.70% 0.65% 0.60% 0.60% 0.60%
U.S. Diversified Portfolio 0.90% 0.90% 0.90% 0.80% 0.80%
Value Fund 0.75% 0.70% 0.65% 0.65% 0.65%
Small Cap Value Fund 0.90% 0.90% 0.90% 0.90% 0.90%
Capital Growth Fund 0.75% 0.70% 0.65% 0.65% 0.65%
Natixis Advisors has entered into subadvisory agreements for each Fund as
listed below.
International Fund Hansberger Global Investors, Inc. ("Hansberger")
Focused Value Fund Harris Associates L.P. ("Harris")
Large Cap Value Fund Harris
U.S. Diversified Portfolio BlackRock Investment Management LLC ("BlackRock")
Harris
Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Value Fund Harris
Loomis Sayles
Vaughan Nelson Investment Management, L.P. ("Vaughan Nelson")
Westpeak Global Advisors, L.P. ("Westpeak")
Small Cap Value Fund Vaughan Nelson
Capital Growth Fund Westpeak
66
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
Payments to Natixis Advisors are reduced in the amount of payments to the
subadvisors.
Natixis Advisors has given binding undertakings to the Funds to defer its
management fees and/or reimburse certain expenses associated with these Funds
to limit their operating expenses. These undertakings are in effect until
April 30, 2008 and will be reevaluated on an annual basis. For the six months
ended June 30, 2007, the expense limits as a percentage of average daily net
assets under the expense limitation agreements were as follows:
Expense limit as a Percentage of
Average Daily Net Assets
- -------------------------------
Fund Class A Class B Class C Class Y
---- ------- ------- ------- -------
Focused Value Fund 1.70% 2.45% 2.45% --
Large Cap Value Fund 1.30% 2.05% 2.05% 1.05%
Small Cap Value Fund 1.60% 2.35% 2.35% 1.35%
Capital Growth Fund 1.50% 2.25% 2.25% --
Effective July 1, 2007, the expense limits for Small Cap Value Fund as a
percentage of average daily net assets under the expense limitation agreements
are 1.45%, 2.20%, 2.20% and 1.20% for Class A, Class B, Class C, and Class Y,
respectively. This agreement is in effect until April 30, 2008 and will be
reevaluated on an annual basis.
Effective August 1, 2007, the expense limits for Capital Growth Fund as a
percentage of average daily net assets under the expense limitation agreements
are 1.65%, 2.40% and 2.40% for Class A, Class B, and Class C, respectively.
This agreement is in effect until April 30, 2008 and will be reevaluated on an
annual basis.
For the six months ended June 30, 2007, the management fees and waivers of
management fees for each Fund were as follows:
Percentage of
Average
Gross Waiver of Net Daily Net Assets
Management Management Management ----------------
Fund Fee Fee Fee Gross Net
---- ---------- ---------- ---------- ----- ---
Targeted Equity Fund $2,545,844 $ -- $2,545,844 0.70% 0.70%
International Fund 696,762 -- 696,762 0.80% 0.80%
Focused Value Fund 952,961 -- 952,961 0.90% 0.90%
Large Cap Value Fund 917,408 4,769 912,639 0.69% 0.68%
U.S. Diversified Portfolio 2,776,143 -- 2,776,143 0.90% 0.90%
Value Fund 492,365 2,701 489,664 0.75% 0.75%
Small Cap Value Fund 636,608 -- 636,608 0.90% 0.90%
Capital Growth Fund 209,866 -- 209,866 0.75% 0.75%
For the six months ended June 30, 2007, class specific expenses have been
reimbursed as follows:
Fund Reimbursement
---- -------------
Capital Growth Fund $15,946
Natixis Advisors shall be permitted to recover expenses it has borne under the
expense limitation agreement (whether through a reduction of its management fee
or otherwise) on a Class by Class basis in later periods to the extent the
expenses of a Class fall below a Class' expense limits, provided, however, that
a Class is not obligated to pay such deferred fees/expenses more than one year
after the end of the fiscal year in which the fee/expense was deferred. The
amounts subject to possible reimbursement under the expense limitation
agreements at June 30, 2007 were as follows:
Expenses Subject to Possible Reimbursement until
December 31, 2007
- ------------------------------------------------
Fund Class A Class B Class C Class Y Total
---- ------- ------- ------- ------- -----
Large Cap Value Fund $5,520 $7,469 $1,507 $ -- $14,496
Small Cap Value Fund -- -- -- 237 237
Capital Growth Fund 7,891 1,802 157 -- 9,850
Expenses Subject to Possible Reimbursement until
December 31, 2008
- ------------------------------------------------
Fund Class A Class B Class C Class Y Total
---- ------- ------- ------- ------- -----
Capital Growth Fund $13,530 $2,215 $201 $-- $15,946
67
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
Loomis Sayles reimbursed the U.S. Diversified Portfolio $34,706 for losses
incurred in connection with a trading error.
Certain officers and directors of Natixis Advisors and its affiliates are also
officers or Trustees of the Funds. Natixis Advisors, CGM, Hansberger, Harris,
Loomis Sayles, Vaughan Nelson and Westpeak are subsidiaries of Natixis Global
Asset Management, L.P. ("Natixis US") (formerly IXIS Asset Management US Group,
L.P.), which is part of Natixis Global Asset Management (formerly IXIS Asset
Management Group), an international asset management group based in Paris,
France.
b. Administrative Expense. Natixis Advisors provides certain administrative
services for the Funds and subcontracts with State Street Bank and Trust
("State Street Bank") to serve as subadministrator. Natixis Advisors is a
wholly-owned subsidiary of Natixis US. Pursuant to an agreement among Natixis
Funds Trust I, Natixis Funds Trust II, Natixis Funds Trust III, Natixis Funds
Trust IV (formerly IXIS Advisor Funds Trust IV), Natixis Cash Management Trust
(formerly IXIS Advisor Cash Management Trust) ("Natixis Funds Trusts"), Loomis
Sayles Funds I, Loomis Sayles Funds II ("Loomis Sayles Funds Trusts") and
Natixis Advisors (the "Administrative Services Agreement"), each Fund pays
Natixis Advisors monthly its pro rata portion of fees equal to an annual rate
of 0.0675% of the first $5 billion of the average daily net assets of the
Natixis Funds Trusts and Loomis Sayles Funds Trusts, 0.0625% of the next $5
billion, and 0.0500% of such assets in excess of $10 billion, subject to an
annual aggregate minimum fee for the Natixis Funds Trusts and Loomis Sayles
Funds Trusts of $5 million, which is reevaluated on an annual basis.
Effective July 1, 2007, pursuant to an amendment to the Administrative Services
Agreement among Natixis Funds Trusts, Loomis Sayles Funds Trusts and Natixis
Advisors, each Fund will pay Natixis Advisors monthly its pro rata portion of
fees equal to an annual rate of 0.0675% of the first $5 billion of the average
daily net assets of the Natixis Funds Trusts and Loomis Sayles Funds Trusts,
0.0625% of the next $5 billion, 0.0500% of the next $20 billion, and 0.0450% of
such assets in excess of $30 billion, subject to an annual aggregate minimum
fee for the Natixis Funds Trusts and Loomis Sayles Funds Trusts of $5 million,
which is reevaluated on an annual basis.
New funds are subject to an annual fee of $50,000 plus $12,500 per class and an
additional $50,000 if managed by multiple subadvisers in their first calendar
year of operations.
For the six months ended June 30, 2007, amounts paid to Natixis Advisors for
administrative fees were as follows:
Administrative
Fund Fees
---- --------------
Targeted Equity Fund $192,222
International Fund 52,936
Focused Value Fund 53,793
Large Cap Value Fund 66,862
U.S. Diversified Portfolio 157,106
Value Fund 33,605
Small Cap Value Fund 40,211
Capital Growth Fund 14,463
c. Service and Distribution Fees. The Trusts have entered into a distribution
agreement with Natixis Distributors, L.P. ("Natixis Distributors") (formerly
IXIS Asset Management Distributors L.P.), a wholly-owned subsidiary of Natixis
US. Pursuant to this agreement, Natixis Distributors serves as principal
underwriter of the funds of the Trusts.
Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service
Plan relating to each Fund's Class A shares (the "Class A Plan") and Service
and Distribution Plans relating to each Fund's Class B and Class C shares (the
"Class B and Class C Plans").
Under the Class A Plan, each Fund pays Natixis Distributors a monthly service
fee at an annual rate not to exceed 0.25% of the average daily net assets
attributable to the Fund's Class A shares, as reimbursement for expenses
incurred by Natixis Distributors in providing personal services to investors in
Class A shares and/or the maintenance of shareholder accounts.
Under the Class B and Class C Plans, each Fund pays Natixis Distributors a
monthly service fee at an annual rate of 0.25% of the average daily net assets
attributable to the Fund's Class B and Class C shares, as compensation for
services provided and expenses incurred by Natixis Distributors in providing
personal services to investors in Class B and Class C shares and/or the
maintenance of shareholder accounts.
Also under the Class B and Class C Plans, each Fund pays Natixis Distributors a
monthly distribution fee at an annual rate of 0.75% of the average daily net
assets attributable to the Fund's Class B and Class C shares, as compensation
for services provided and expenses incurred by Natixis Distributors in
connection with the marketing or sale of Class B and Class C shares.
68
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
For the six months ended June 30, 2007, the Funds paid the following service
and distribution fees:
Service Fee Distribution Fee
- - ----------------------------------------- ---------------------------
Fund Class A Class B Class C Class B Class C
- ---- ------- ------- ------- ------- -------
Targeted Equity Fund $ 840,414 $ 46,700 $ 10,630 $ 140,101 $ 31,889
International Fund 146,352 40,883 30,503 122,648 91,511
Focused Value Fund 73,613 91,489 99,609 274,468 298,826
Large Cap Value Fund 245,555 48,043 22,444 144,131 67,334
U.S. Diversified Portfolio 505,427 180,860 58,425 542,582 175,276
Value Fund 137,995 22,255 3,871 66,765 11,616
Small Cap Value Fund 112,848 38,598 24,840 115,796 74,521
Capital Growth Fund 59,040 10,020 895 30,062 2,686
d. Commissions. The Funds have been informed that commissions (including CDSCs)
on Fund shares paid to Natixis Distributors by investors in shares of the Funds
during the six months ended June 30, 2007 were as follows:
Fund Commission
---- ----------
Targeted Equity Fund $ 42,201
International Fund 24,207
Focused Value Fund 113,867
Large Cap Value Fund 35,787
U.S. Diversified Portfolio 101,853
Value Fund 19,425
Small Cap Value Fund 23,672
Capital Growth Fund 15,122
For the six months ended June 30, 2007 brokerage commissions for the portfolio
transactions paid to affiliated broker/dealers by the U.S. Diversified
Portfolio were $18,646.
e. Trustees Fees and Expenses. The Funds do not pay any compensation directly
to their officers or Trustees who are directors, officers or employees of
Natixis Advisors, Natixis Distributors and Natixis US, or their affiliates. The
Chairperson of the Board receives a retainer fee at the annual rate of
$200,000. The Chairperson does not receive any meeting attendance fees for
Board of Trustees meetings or committee meetings that she attends. Each
Independent Trustee (other than the Chairperson) receives, in the aggregate, a
retainer fee at the annual rate of $55,000. Each Independent Trustee also
receives a meeting attendance fee of $6,000 for each meeting of the Board of
Trustees that he or she attends in person and $3,000 for each meeting of the
Board of Trustees that he or she attends telephonically. In addition, each
committee chairman receives an additional retainer fee at the annual rate of
$10,000. Each Contract Review and Governance Committee member is compensated
$4,000 for each Committee meeting that he or she attends in person and $2,000
for each meeting that he or she attends telephonically. Each Audit Committee
member is compensated $5,000 for each Committee meeting that he or she attends
in person and $2,500 for each meeting that he or she attends telephonically.
These fees are allocated among the funds in the Natixis Funds Trusts and Loomis
Sayles Funds Trusts based on a formula that takes into account, among other
factors, the relative net assets of each fund. Trustees are reimbursed for
travel expenses in connection with attendance at meetings.
A deferred compensation plan (the "Plan") is available to the Trustees on a
voluntary basis. Each participating Trustee will receive an amount equal to the
value that such deferred compensation would have been had it been invested in a
designated Fund or certain other funds of the Natixis Funds Trusts and the
Loomis Sayles Funds Trusts on the normal payment date. Deferred amounts remain
in the Funds until distributed in accordance with the Plan.
f. Redemption Fees. Shareholders of Class A shares and Class Y shares of
Targeted Equity Fund, International Fund, Focused Value Fund and Small Cap
Value Fund are charged a 2% redemption fee if they redeem, including redeeming
by exchange, such shares within 60 days of their acquisition (including
acquisition by exchange). The redemption fee is intended to offset the costs to
the Funds of short-term trading, such as portfolio transaction and market
impact costs associated with redemption activity and administrative costs
associated with processing redemptions. The redemption fee is deducted from the
shareholder's redemption or exchange proceeds and is paid to the Fund. The
"first-in, first-out" (FIFO) method is used to determine the holding period of
redeemed or exchanged shares, which means that if a shareholder acquired shares
on different days, the shares acquired first will be redeemed or exchanged
first for purposes of determining whether the redemption fee applies. A new
holding period begins with each purchase or exchange. These fees are accounted
for as an addition to paid-in capital and are presented in the Statements of
Changes in Net Assets.
5. Line of Credit. Each Fund, together with certain other funds of Natixis
Funds Trusts and Loomis Sayles Funds Trusts, participates in a $75,000,000
committed line of credit provided by State Street Bank. Interest is charged to
each participating fund based on its borrowing at a rate per annum equal to the
Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.09% per
annum, payable at the end of each calendar quarter, is accrued and apportioned
among the participating funds based on their average daily unused portion of
the line of credit. For the six months ended June 30, 2007, the Funds had no
borrowings under this agreement.
69
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
6. Brokerage Commission Recapture. Each Fund has entered into agreements with
certain brokers whereby the brokers will rebate a portion of brokerage
commissions. All amounts rebated by the brokers are returned to the Funds under
such agreements and are included in realized gains on investments in the
Statements of Operations. For the six months ended June 30, 2007, amounts
rebated under these agreements were as follows:
Fund Rebates
---- -------
Targeted Equity Fund $180,701
International Fund 3,836
Focused Value Fund --
Large Cap Value Fund --
U.S. Diversified Portfolio 17,837
Value Fund 8,132
Small Cap Value Fund 9,111
Capital Growth Fund 18,706
7. Concentration of Risk. Focused Value Fund is a non-diversified fund.
Compared with diversified mutual funds, the Focused Value Fund may invest a
greater percentage of its assets in a particular company. Therefore, the
Focused Value Fund's returns could be significantly affected by the performance
of any one of the small number of stocks in its portfolio.
70
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
8. Capital Shares. Each Fund may issue an unlimited number of shares of
beneficial interest without par value. Transactions in capital shares were as
follows:
Six Months Ended
June 30, 2007
-----------------------------------
Targeted Equity Fund Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 1,364,002 $ 14,946,728
Issued in connection with the reinvestment of distributions 1,964,304 22,235,901
---------------- -----------------
3,328,306 37,182,629
Redeemed (5,828,616) (64,242,746)
---------------- -----------------
Net change (2,500,310) $ (27,060,117)
---------------- -----------------
Class B
Issued from the sale of shares 138,622 $ 1,401,392
Issued in connection with the reinvestment of distributions 111,816 1,156,146
---------------- -----------------
250,438 2,557,538
Redeemed (1,404,978) (14,091,328)
---------------- -----------------
Net change (1,154,540) $ (11,533,790)
---------------- -----------------
Class C
Issued from the sale of shares 85,155 $ 863,938
Issued in connection with the reinvestment of distributions 18,898 195,402
---------------- -----------------
104,053 1,059,340
Redeemed (139,839) (1,412,681)
---------------- -----------------
Net change (35,786) $ (353,341)
---------------- -----------------
Class Y
Issued from the sale of shares 21,537 $ 238,146
Issued in connection with the reinvestment of distributions 34,208 396,131
---------------- -----------------
55,745 634,277
Redeemed (79,819) (901,894)
---------------- -----------------
Net change (24,074) $ (267,617)
---------------- -----------------
Increase (decrease) from capital share transactions (3,714,710) $ (39,214,865)
================ =================
Six Months Ended
June 30, 2007
-----------------------------------
International Fund Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 411,642 $ 9,243,404
Issued in connection with the reinvestment of distributions 102,534 2,377,999
---------------- -----------------
514,176 11,621,403
Redeemed (513,382) (11,585,647)
---------------- -----------------
Net change 794 $ 35,756
---------------- -----------------
Class B
Issued from the sale of shares 107,524 $ 2,200,163
Issued in connection with the reinvestment of distributions 34,441 720,715
---------------- -----------------
141,965 2,920,878
Redeemed (279,038) (5,688,871)
---------------- -----------------
Net change (137,073) $ (2,767,993)
---------------- -----------------
Class C
Issued from the sale of shares 83,413 $ 1,725,377
Issued in connection with the reinvestment of distributions 21,101 441,227
---------------- -----------------
104,514 2,166,604
Redeemed (89,578) (1,850,497)
---------------- -----------------
Net change 14,936 $ 316,107
---------------- -----------------
Increase (decrease) from capital share transactions (121,343) $ (2,416,130)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Targeted Equity Fund Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 3,021,026 $ 32,094,011
Issued in connection with the reinvestment of distributions 2,175,752 22,722,255
---------------- -----------------
5,196,778 54,816,266
Redeemed (9,606,296) (102,106,132)
---------------- -----------------
Net change (4,409,518) $ (47,289,866)
---------------- -----------------
Class B
Issued from the sale of shares 527,280 $ 5,168,973
Issued in connection with the reinvestment of distributions 158,904 1,525,452
---------------- -----------------
686,184 6,694,425
Redeemed (1,901,868) (18,667,272)
---------------- -----------------
Net change (1,215,684) $ (11,972,847)
---------------- ----------------- -
Class C
Issued from the sale of shares 491,071 $ 4,828,598
Issued in connection with the reinvestment of distributions 19,469 187,296
---------------- -----------------
510,540 5,015,894
Redeemed (168,586) (1,657,411)
---------------- -----------------
Net change 341,954 $ 3,358,483
---------------- -----------------
Class Y
Issued from the sale of shares 134,863 $ 1,446,830
Issued in connection with the reinvestment of distributions 40,781 435,176
---------------- -----------------
175,644 1,882,006
Redeemed (175,923) (1,904,637)
---------------- -----------------
Net change (279) $ (22,631)
---------------- -----------------
Increase (decrease) from capital share transactions (5,283,527) $ (55,926,861)
================ =================
Year Ended
December 31, 2006
-----------------------------------
International Fund Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 882,514 $ 19,025,323
Issued in connection with the reinvestment of distributions 620,244 13,054,791
---------------- -----------------
1,502,758 32,080,114
Redeemed (765,037) (16,553,658)
---------------- -----------------
Net change 737,721 $ 15,526,456
---------------- -----------------
Class B
Issued from the sale of shares 281,932 $ 5,558,168
Issued in connection with the reinvestment of distributions 217,726 4,157,074
---------------- -----------------
499,658 9,715,242
Redeemed (634,271) (12,632,454)
---------------- -----------------
Net change (134,613) $ (2,917,212)
---------------- -----------------
Class C
Issued from the sale of shares 191,194 $ 3,765,350
Issued in connection with the reinvestment of distributions 123,876 2,364,479
---------------- -----------------
315,070 6,129,829
Redeemed (167,643) (3,338,110)
---------------- -----------------
Net change 147,427 $ 2,791,719
---------------- -----------------
Increase (decrease) from capital share transactions 750,535 $ 15,400,963
================ =================
71
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
8. Capital Shares (continued)
Six Months Ended
June 30, 2007
-----------------------------------
Focused Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 245,717 $ 2,907,143
Issued in connection with the reinvestment of distributions 34,367 420,720
---------------- -----------------
280,084 3,327,863
Redeemed (1,079,262) (12,761,399)
---------------- -----------------
Net change (799,178) $ (9,433,536)
---------------- -----------------
Class B
Issued from the sale of shares 83,783 $ 934,520
Issued in connection with the reinvestment of distributions 48,643 560,369
---------------- -----------------
132,426 1,494,889
Redeemed (1,315,658) (14,640,330)
---------------- -----------------
Net change (1,183,232) $ (13,145,441)
---------------- -----------------
Class C
Issued from the sale of shares 192,282 $ 2,148,784
Issued in connection with the reinvestment of distributions 41,785 481,371
---------------- -----------------
234,067 2,630,155
Redeemed (1,526,999) (16,938,759)
---------------- -----------------
Net change (1,292,932) $ (14,308,604)
---------------- -----------------
Increase (decrease) from capital share transactions (3,275,342) $ (36,887,581)
================ =================
Six Months Ended
June 30, 2007
-----------------------------------
Large Cap Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 630,409 $ 9,977,949
Issued in connection with the reinvestment of distributions 27,196 447,102
---------------- -----------------
657,605 10,425,051
Redeemed (1,200,343) (19,206,867)
---------------- -----------------
Net change (542,738) $ (8,781,816)
---------------- -----------------
Class B
Issued from the sale of shares 92,576 $ 1,358,529
Issued in connection with the reinvestment of distributions 6,268 95,403
---------------- -----------------
98,844 1,453,932
Redeemed (778,635) (11,461,779)
---------------- -----------------
Net change (679,791) $ (10,007,847)
---------------- -----------------
Class C
Issued from the sale of shares 51,542 $ 753,597
Issued in connection with the reinvestment of distributions 1,501 22,821
---------------- -----------------
53,043 776,418
Redeemed (126,465) (1,869,448)
---------------- -----------------
Net change (73,422) $ (1,093,030)
---------------- -----------------
Class Y
Issued from the sale of shares 31,705 $ 518,504
Issued in connection with the reinvestment of distributions 2,180 37,115
---------------- -----------------
33,885 555,619
Redeemed (71,736) (1,193,357)
---------------- -----------------
Net change (37,851) $ (637,738)
---------------- -----------------
Increase (decrease) from capital share transactions (1,333,802) $ (20,520,431)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Focused Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 762,517 $ 9,168,276
Issued in connection with the reinvestment of distributions 594,724 6,857,113
---------------- -----------------
1,357,241 16,025,389
Redeemed (2,756,214) (33,719,620)
---------------- -----------------
Net change (1,398,973) $ (17,694,231)
---------------- -----------------
Class B
Issued from the sale of shares 460,413 $ 5,172,828
Issued in connection with the reinvestment of distributions 850,572 9,284,689
---------------- -----------------
1,310,985 14,457,517
Redeemed (2,469,943) (28,816,298)
---------------- -----------------
Net change (1,158,958) $ (14,358,781)
---------------- ----------------- -
Class C
Issued from the sale of shares 840,633 $ 9,434,145
Issued in connection with the reinvestment of distributions 760,727 8,305,493
---------------- -----------------
1,601,360 17,739,638
Redeemed (4,218,781) (49,192,443)
---------------- -----------------
Net change (2,617,421) $ (31,452,805)
---------------- -----------------
Increase (decrease) from capital share transactions (5,175,352) $ (63,505,817)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Large Cap Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 1,331,189 $ 18,612,209
Issued in connection with the reinvestment of distributions 27,510 358,457
---------------- -----------------
1,358,699 18,970,666
Redeemed (2,887,544) (40,026,448)
---------------- -----------------
Net change (1,528,845) $ (21,055,782)
---------------- -----------------
Class B
Issued from the sale of shares 176,257 $ 2,291,417
Issued in connection with the reinvestment of distributions 9,192 111,770
---------------- -----------------
185,449 2,403,187
Redeemed (1,936,076) (25,010,219)
---------------- -----------------
Net change (1,750,627) $ (22,607,032)
---------------- -----------------
Class C
Issued from the sale of shares 113,625 $ 1,446,870
Issued in connection with the reinvestment of distributions 1,654 20,078
---------------- -----------------
115,279 1,466,948
Redeemed (486,431) (6,230,411)
---------------- -----------------
Net change (371,152) $ (4,763,463)
---------------- -----------------
Class Y
Issued from the sale of shares 76,363 $ 1,102,604
Issued in connection with the reinvestment of distributions 2,238 30,077
---------------- -----------------
78,601 1,132,681
Redeemed (237,315) (3,357,897)
---------------- -----------------
Net change (158,714) $ (2,225,216)
---------------- -----------------
Increase (decrease) from capital share transactions (3,809,338) $ (50,651,493)
================ =================
72
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
8. Capital Shares (continued)
Six Months Ended
June 30, 2007
-----------------------------------
U.S. Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 746,824 $ 18,130,970
Redeemed (1,552,997) (37,844,756)
---------------- -----------------
Net change (806,173) $ (19,713,786)
---------------- -----------------
Class B
Issued from the sale of shares 242,123 $ 5,196,940
Redeemed (1,229,213) (26,379,706)
---------------- -----------------
Net change (987,090) $ (21,182,766)
---------------- -----------------
Class C
Issued from the sale of shares 40,296 $ 868,924
Redeemed (178,262) (3,801,187)
---------------- -----------------
Net change (137,966) $ (2,932,263)
---------------- -----------------
Class Y
Issued from the sale of shares 79,932 $ 2,060,966
Redeemed (155,597) (4,022,728)
---------------- -----------------
Net change (75,665) $ (1,961,762)
---------------- -----------------
Increase (decrease) from capital share transactions (2,006,894) $ (45,790,577)
================ =================
Six Months Ended
June 30, 2007
-----------------------------------
Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 507,362 $ 4,560,844
Issued in connection with the reinvestment of distributions 267,217 2,469,067
---------------- -----------------
774,579 7,029,911
Redeemed (1,264,785) (11,513,411)
---------------- -----------------
Net change (490,206) $ (4,483,500)
---------------- -----------------
Class B
Issued from the sale of shares 95,407 $ 752,329
Issued in connection with the reinvestment of distributions 52,920 429,107
---------------- -----------------
148,327 1,181,436
Redeemed (451,493) (3,595,398)
---------------- -----------------
Net change (303,166) $ (2,413,962)
---------------- -----------------
Class C
Issued from the sale of shares 52,223 $ 405,014
Issued in connection with the reinvestment of distributions 7,726 62,645
---------------- -----------------
59,949 467,659
Redeemed (54,403) (428,909)
---------------- -----------------
Net change 5,546 $ 38,750
---------------- -----------------
Increase (decrease) from capital share transactions (787,826) $ (6,858,712)
================ =================
Year Ended
December 31, 2006
-----------------------------------
U.S. Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 1,699,970 $ 36,351,386
Redeemed (3,689,517) (78,838,491)
---------------- -----------------
Net change (1,989,547) $ (42,487,105)
---------------- -----------------
Class B
Issued from the sale of shares 536,719 $ 10,239,866
Redeemed (2,967,752) (56,524,819)
---------------- -----------------
Net change (2,431,033) $ (46,284,953)
---------------- -----------------
Class C
Issued from the sale of shares 77,624 $ 1,484,914
Redeemed (490,888) (9,387,689)
---------------- -----------------
Net change (413,264) $ (7,902,775)
---------------- ----------------- -
Class Y
Issued from the sale of shares 123,141 $ 2,825,376
Redeemed (212,914) (4,817,903)
---------------- -----------------
Net change (89,773) $ (1,992,527)
---------------- -----------------
Increase (decrease) from capital share transactions (4,923,617) $ (98,667,360)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Value Fund Shares Amount
- -------------------------------------------------------------- ---------------- ----------------- -
Class A
Issued from the sale of shares 1,203,187 $ 10,847,757
Issued in connection with the reinvestment of distributions 1,483,355 12,855,774
---------------- -----------------
2,686,542 23,703,531
Redeemed (1,895,422) (16,798,467)
---------------- -----------------
Net change 791,120 $ 6,905,064
---------------- -----------------
Class B
Issued from the sale of shares 265,829 $ 2,112,444
Issued in connection with the reinvestment of distributions 312,207 2,393,002
---------------- -----------------
578,036 4,505,446
Redeemed (1,144,083) (9,035,508)
---------------- -----------------
Net change (566,047) $ (4,530,062)
---------------- -----------------
Class C
Issued from the sale of shares 44,612 $ 357,458
Issued in connection with the reinvestment of distributions 40,018 306,916
---------------- -----------------
84,630 664,374
Redeemed (87,753) (687,888)
---------------- -----------------
Net change (3,123) $ (23,514)
---------------- -----------------
Increase (decrease) from capital share transactions 221,950 $ 2,351,488
================ =================
73
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
8. Capital Shares (continued)
Six Months Ended
June 30, 2007
-----------------------------------
Small Cap Value Fund Shares Amount
- ------------------------------------------------------ ---------------- -----------------
Class A
Issued from the sale of shares 636,671 $ 13,717,533
Redeemed (419,982) (9,070,855)
---------------- -----------------
Net change 216,689 $ 4,646,678
---------------- -----------------
Class B
Issued from the sale of shares 66,065 $ 1,307,502
Redeemed (294,638) (5,792,514)
---------------- -----------------
Net change (228,573) $ (4,485,012)
---------------- -----------------
Class C
Issued from the sale of shares 171,960 $ 3,390,202
Redeemed (79,506) (1,569,947)
---------------- -----------------
Net change 92,454 $ 1,820,255
---------------- -----------------
Class Y*
Issued from the sale of shares 18 $ 382
Redeemed (54) (1,227)
---------------- -----------------
Net change (36) $ (845)
---------------- -----------------
Increase (decrease) from capital share transactions 80,534 $ 1,981,076
================ =================
Six Months Ended
June 30, 2007
-----------------------------------
Capital Growth Fund Shares Amount
- ------------------------------------------------------ ---------------- -----------------
Class A
Issued from the sale of shares 138,859 $ 1,873,455
Redeemed (318,165) (4,300,318)
---------------- -----------------
Net change (179,306) $ (2,426,863)
Class B
Issued from the sale of shares 37,633 $ 434,847
Redeemed (163,294) (1,882,900)
---------------- -----------------
Net change (125,661) $ (1,448,053)
Class C
Issued from the sale of shares 10,410 $ 121,328
Redeemed (18,674) (215,847)
---------------- -----------------
Net change (8,264) $ (94,519)
---------------- -----------------
Increase (decrease) from capital share transactions (313,231) $ (3,969,435)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Small Cap Value Fund Shares Amount
- ------------------------------------------------------ ---------------- ----------------- -
Class A
Issued from the sale of shares 1,565,095 $ 30,243,879
Redeemed (817,467) (15,859,750)
---------------- -----------------
Net change 747,628 $ 14,384,129
---------------- -----------------
Class B
Issued from the sale of shares 154,897 $ 2,772,776
Redeemed (822,694) (14,729,819)
---------------- -----------------
Net change (667,797) $ (11,957,043)
---------------- -----------------
Class C
Issued from the sale of shares 364,171 $ 6,498,460
Redeemed (251,618) (4,488,816)
---------------- -----------------
Net change 112,553 $ 2,009,644
---------------- -----------------
Class Y*
Issued from the sale of shares 20,430 $ 424,039
Redeemed -- --
---------------- -----------------
Net change 20,430 $ 424,039
---------------- -----------------
Increase (decrease) from capital share transactions 212,814 $ 4,860,769
================ =================
Year Ended
December 31, 2006
-----------------------------------
Capital Growth Fund Shares Amount
- ------------------------------------------------------ ---------------- ----------------- -
Class A
Issued from the sale of shares 209,910 $ 2,590,783
Redeemed (798,809) (9,769,562)
---------------- ----------------- -
Net change (588,899) $ (7,178,779)
Class B
Issued from the sale of shares 81,915 $ 870,627
Redeemed (282,316) (2,968,891)
---------------- ----------------- -
Net change (200,401) $ (2,098,264)
Class C
Issued from the sale of shares 12,274 $ 135,304
Redeemed (36,537) (386,794)
---------------- ----------------- -
Net change (24,263) $ (251,490)
---------------- -----------------
Increase (decrease) from capital share transactions (813,563) $ (9,528,533)
================ =================
* From commencement of class operations August 31, 2006 through December 31,
2006.
9. Plan of Reorganization. On March 9, 2007, the Trustees of Natixis Funds
Trust I approved an Agreement and Plan of Reorganization pursuant to which the
net assets of the Natixis Value Fund will be acquired by the Loomis Sayles
Value Fund. This transaction is subject to approval by the shareholders of the
Natixis Value Fund.
10. Subsequent Events. Effective August 1, 2007, the name of the adviser to the
Funds (except Targeted Equity Fund) changed from IXIS Asset Management
Advisors, L.P. to Natixis Asset Management Advisors L.P. and the name of the
Fund's distributor changed from IXIS Asset Management Distributors, L.P. to
Natixis Distributors, L.P.
Effective August 1, 2007, Capital Growth Fund's name will change from Westpeak
Capital Growth Fund to Westpeak 130/30 Growth Fund and its new principal
investment strategy will be to establish long and short positions in equity
securities issued by U.S. large-and-mid-capitalization companies in any
industry.
Effective August 6, 2007, IXIS Advisor Funds Trust I, IXIS Advisor Funds Trust
II and IXIS Advisor Funds Trust III were renamed Natixis Funds Trust I, Natixis
Funds Trust II and Natixis Funds Trust III, respectively, and the names of IXIS
U.S. Diversified Portfolio and IXIS Value Fund changed to Natixis U.S.
Diversified Portfolio and Natixis Value Fund, respectively.
74
NOTES TO FINANCIAL STATEMENTS (continued)
11. Shareholder Meeting
At a special shareholders' meeting held on January 19, 2007, shareholders of
Natixis Funds Trust I, of which International Fund is a series, voted for the
following proposal:
1. To approve a new sub-advisory agreement between IXIS Advisor Funds Trust
I, on behalf of the Hansberger International Fund, and Hansberger Global
Investors, Inc.
Votes For Votes Against Abstained Votes
------------------------ ------------------------ ------------------------
3,351,749 110,710 340,701
75
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included as part of the Report to Shareholders filed as Item 1 herewith.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Securities Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the Registrant's Board of Trustees.
Item 11. Controls and Procedures.
The Registrant's principal executive officer and principal financial officer
have concluded that the Registrant's disclosure controls and procedures are
sufficient to ensure that information required to be disclosed by the
Registrant in this Form N-CSR was recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report.
There were no changes in the Registrant's internal control over financial
reporting that occurred during the Registrant's last fiscal quarter of the
period covered by the report that has materially affected, or is reasonably
likely to materially affect, the Registrant's internal control over financial
reporting.
Item 12. Exhibits.
(a) (1) Not applicable
(a) (2) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to 30a-2(a) under the Investment Company Act of 1940
(17 CFR 270.30a-2(a)), filed herewith as exhibits (a)(2)(1) and
(a)(2)(2), respectively.
(a) (3) Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 are
filed herewith as Exhibit (b).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Natixis Funds Trust II
By: /s/ John T. Hailer
------------------------------
Name: John T. Hailer
Title: President and Chief Executive
Officer
Date: August 21, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
By: /s/ John T. Hailer
------------------------------
Name: John T. Hailer
Title: President and Chief Executive
Officer
Date: August 21, 2007
By: /s/ Michael C. Kardok
------------------------------
Name: Michael C. Kardok
Title: Treasurer
Date: August 21, 2007