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: 811-07345
Natixis Funds Trust III
(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
[LOGO OF NATIXIS FUNDS] SEMIANNUAL REPORT
June 30, 2007
Natixis Income Diversified Portfolio
[Formerly IXIS Income Diversified Portfolio]
Active Dividend Equity Discipline
AEW Diversified REIT Discipline
Loomis Sayles Inflation Protected Securities Discipline
Loomis Sayles Multi-Sector Bond Discipline
Natixis Moderate Diversified Portfolio
[Formerly IXIS Moderate Diversified Portfolio]
Dreman Mid Cap Value Discipline
Hansberger International Value Discipline
Harris Associates Large Cap Value Discipline
Loomis Sayles Core Fixed Income Discipline
Loomis Sayles Large Cap Growth Discipline
TABLE OF CONTENTS
Management Discussion and
Performance................... Page 1
Portfolio of Investments...... Page 12
Financial Statements.......... Page 26
NATIXIS INCOME DIVERSIFIED PORTFOLIO
PORTFOLIO PROFILE
Objective:
Seeks current income with a secondary objective of capital appreciation
- --------------------------------------------------------------------------------
Strategy:
Focuses on fixed-income and equity securities through a diversified portfolio
of complementary income-producing investment disciplines from specialized money
managers
- --------------------------------------------------------------------------------
Inception Date:
November 17, 2005
- --------------------------------------------------------------------------------
Subadvisors:
AEW Management and Advisors, L.P.
Loomis, Sayles & Company, L.P.
- --------------------------------------------------------------------------------
Symbols:
Class A IIDPX
Class C CIDPX
- --------------------------------------------------------------------------------
What You Should Know:
Value stocks can fall out of favor and underperform growth stocks during
certain market conditions. The fixed-income discipline may invest in U.S.
government and high-yield securities. The U.S. government guarantees the timely
payment of principal and interest on some of these securities; however, the
value of fund shares is not guaranteed and will fluctuate. Lower-rated
securities are considered riskier than investment-grade securities because
there is a greater risk of default. Mutual funds that invest in bonds can lose
their value as interest rates rise and an investor can lose principal. A
portion of the fund invests in real estate investment trusts (REITs). While the
fund offers the diversification benefits of real estate investments, it is also
subject to the risks unique to that market, including fluctuating property
values and interest rates, along with changing tax laws.
Management Discussion
- --------------------------------------------------------------------------------
During the first half of 2007, income-oriented investors and investors in
interest-sensitive stocks in the United States became increasingly concerned
about spillover from the subprime lending market and the actions of the Federal
Reserve Board. These developments influenced each of the four specialized
investment teams that manage Natixis Income Diversified Portfolio (formerly
IXIS Income Diversified Portfolio) during the six months ended June 30, 2007.
The fund's four segments are: Active Dividend Equity Discipline, an indexed
portfolio of dividend-paying common stocks based on the Dow Jones Select
Dividend Index, tracked by Active Investment Advisors (AIA), a division of
Natixis Advisors; AEW Diversified REIT Discipline, composed of Real Estate
Investment Trusts (REITs), managed by AEW Management and Advisors, a specialist
in this income-producing equity field; Loomis Sayles Inflation Protected
Securities Discipline, a portfolio of Treasury Inflation-Protected Securities
(TIPS), managed by Loomis Sayles; and Loomis Sayles Multi-Sector Bond
Discipline, a diversified portfolio of domestic and foreign bonds, also managed
by Loomis Sayles.
For the six months ended June 30, 2007, the combined return on the fund's four
segments was -0.76% based on the net asset value of Class A shares, including
$0.22 in dividends and less than $0.01 in capital gains reinvested during the
period. For the same period, the fund's primary benchmark, the Lehman Aggregate
Bond Index, returned 0.98% and the return on its secondary benchmark was
- -0.03%. The fund's secondary benchmark is an unmanaged, blended index composed
of the following weights: 40% Lehman Aggregate Bond Index; 25% Morgan Stanley
Capital International U.S. REIT Index; 20% Dow Jones Select Dividend Index; and
15% Lehman U.S. TIPS Index. The fund's Morningstar peer group, the Conservative
Allocation category, had an average return of 3.19% for the period.
AIA'S ACTIVE DIVIDEND EQUITY SEGMENT CHANGES WITH ITS BENCHMARK
The first half of 2007 was moderately positive for dividend-oriented common
stocks and this segment's benchmark, the Dow Jones Select Dividend Index. The
benchmark is composed of equity securities issued by companies that have
provided a relatively high dividend yield consistently over time. It includes
100 of the highest-yielding stocks (other than REITs) in the Dow Jones Total
Market Index--a broad-based index that represents the total market for U.S.
equity securities. This segment holds substantially all of the securities
within the index in the same proportions, so its performance is similar.
Differences that occur reflect trading costs and "cash drag" (the difference in
performance due to not being fully invested at all times), which are most
likely to occur when there are significant cash flows into or out of the
portfolio. For the six months ended June 30, 2007, assets in this portfolio
nearly doubled in size.
Since this segment replicates the benchmark, it adds or deletes issues only
when they are changed by the Dow Jones Company, usually at the same time.
However, there may be delays when index changes reflect corporate actions, such
as divestitures or changes in equity structure. Three such changes occurred
during the six months ended June 30, 2007. They included Kraft Foods, which was
spun off by Altria, but not added to the index; Kraft was sold from the
portfolio early in April. Kinder Morgan went private and was removed from the
index and the portfolio at the end of May. Also in May, Duquesne Light Holdings
was acquired by another company and removed from the index and the segment.
Wilmington Trust and Trustmark replaced Kinder Morgan and Duquesne,
respectively, in the index and the portfolio.
AEW'S REIT SEGMENT WAS INFLUENCED BY SEVERAL MARKET FACTORS
Following years of positive returns, the major U.S. REIT indexes concluded a
volatile first half of 2007 in negative territory. REITs got off to a strong
start, peaking in early February, and then dropped off sharply. Top performers
in the fund's REIT segment included apartment REIT Archstone-Smith Trust,
Starwood Hotels & Resorts Worldwide and real estate finance company Spirit
Finance Corp. Archstone-Smith and Spirit Finance benefited significantly when
both companies announced they were being acquired at a significant premium
1
NATIXIS INCOME DIVERSIFIED PORTFOLIO
Management Discussion
- --------------------------------------------------------------------------------
to their respective share prices. Detractors included self-storage REIT Public
Storage, regional mall REIT Simon Property Group and shopping center company
Developers Diversified Realty. The segment's emphasis on the storage and office
sectors, which underperformed the overall REIT market, detracted from
performance. These negatives were partially offset by the segment's underweight
to the healthcare sector, which also lagged the overall REIT market.
Currently AEW is anticipating continued volatility in the REIT market for the
remainder of the year, with several potential factors playing a role in the
sector's direction. These include rising interest rates, general concerns about
the health of the consumer and the overall economy, and concerns about
potential increases in commercial real estate lending spreads, which could have
an impact on asset prices and the privatization activity that has been so
important to this market in recent years.
LOOMIS SAYLES' TIPS SEGMENT SHORTENED DURATION AS INFLATION PROSPECTS DIMINISHED
As market activity caused interest rates to rise during the first half of 2007,
Loomis reduced this segment's overall duration--its price sensitivity to
changes in interest rates--because rising interest rates generally cause bond
prices to fall. The reduction in duration was a positive move, but the
segment's overall duration was still longer than its Lehman benchmark, which
was a net negative for the period. In addition, nominal Treasuries (not
inflation adjusted) accounted for a small portion of assets, which was also a
drag on performance. TIPS outperformed nominal Treasuries as rising oil prices
threatened to re-ignite inflation.
Loomis' economics team believes U.S. growth is poised for stronger (but not
robust) growth ahead, slowing only slightly from its pace in 2006. Available
data suggest that manufacturing is recovering and that capital spending is
likely to increase along with net trade, reflecting the strength of overseas
economies and the weaker dollar. The labor market also looks healthy, but
Loomis is monitoring consumer spending trends, gasoline prices and the
faltering housing market. With these caveats, Loomis expects the Federal
Reserve Board to hold monetary policy steady throughout the balance of 2007, as
economic growth remains strong enough, and inflation low enough, that neither
rate cuts nor rate hikes will be needed.
LOOMIS SAYLES' MULTI-SECTOR BOND SEGMENT ADDED HIGH-YIELD AND FOREIGN BONDS
Yields on Treasury notes and bonds rose sharply during the six months ended
June 30, 2007, as expectations that the Federal Reserve Board would cut rates
to pick up economic activity gradually diminished. However, late in the period
concern rose that rising defaults in subprime mortgages might damage economic
growth and/or the financial markets. In this situation, investors who fared
best were those who sought shelter from rising yields in shorter duration or
non-dollar securities, or moving lower on the quality scale. Mortgage-backed
securities (MBS) had one of their worst quarters in years, reflecting a variety
of market factors. Investors' appetite for risk held up in April and May but
fell off in June.
For the first half of 2007, Loomis lengthened the segment's duration, making it
more sensitive to changes in interest rates. However, Loomis' sector allocation
and security selection balanced out some of the negative effects of declining
bond prices by increasing the segment's emphasis on higher-yielding U.S.
corporate bonds and foreign bonds. Non-U.S. dollar holdings and
dollar-denominated high-yield industrials were the largest positive sector
contributors, although some investment-grade bonds suffered in a volatile rate
environment. Convertible securities, which convey the right to be converted
into common stock, were also positive.
Loomis believes U.S. growth is poised for strong (though not robust) growth.
The interest-rate team continues to expect the Fed to hold monetary policy
steady through year-end. With yields still low by historic standards, and
spreads between higher- and lower-rated bonds tight, Loomis believes the
markets should generate modest, but respectable returns for the balance of the
year.
2
NATIXIS INCOME 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, an 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/5/
[CHART]
November 17, 2005 (Inception) through June 30, 2007
Net Asset Maximum Sales Lehman Aggregate Blended
Month End Value/1/ Charge/2/ Bond Index Index
- ---------- --------- ------------- -------- ----------
11/17/2005 $10,000 $ 9,550 $10,000 $10,000
11/30/2005 10,072 9,619 10,000 10,000
12/31/2005 10,115 9,660 10,095 10,047
1/31/2006 10,355 9,889 10,096 10,277
2/28/2006 10,454 9,984 10,129 10,364
3/31/2006 10,540 10,066 10,030 10,416
4/30/2006 10,484 10,013 10,012 10,362
5/31/2006 10,376 9,909 10,001 10,263
6/30/2006 10,508 10,035 10,022 10,427
7/31/2006 10,710 10,228 10,157 10,667
8/31/2006 10,934 10,442 10,313 10,887
9/30/2006 11,078 10,580 10,403 11,010
10/31/2006 11,357 10,846 10,472 11,284
11/30/2006 11,621 11,098 10,594 11,533
12/31/2006 11,553 11,033 10,532 11,465
1/31/2007 11,833 11,300 10,528 11,738
2/28/2007 11,878 11,343 10,691 11,773
3/31/2007 11,790 11,259 10,691 11,738
4/30/2007 11,904 11,369 10,749 11,844
5/31/2007 11,909 11,373 10,667 11,833
6/30/2007 11,467 10,951 10,636 11,461
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR INCEPTION
CLASS A (Inception 11/17/05)
Net Asset Value/1/ -0.76% 9.11% 8.83%
With Maximum Sales Charge/2/ -5.26 4.16 5.78
CLASS C (Inception 11/17/05)
Net Asset Value/1/ -1.11 8.49 8.03
With CDSC/3/ -2.08 7.49 8.03
- ----------------------------------------------------------------
SINCE
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR INCEPTION/4/
Lehman Aggregate Bond Index 0.98% 6.12% 3.97%
Blended Index -0.03 9.92 9.00
Morningstar Conservative Allocation
Fund Avg. 3.19 10.04 7.60
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.
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 44.0 45.2
- ---------------------------------------------------------
Investment Companies -- 0.2
- ---------------------------------------------------------
Preferred Stocks 0.3 0.1
- ---------------------------------------------------------
Bonds and Notes 53.2 46.1
- ---------------------------------------------------------
Short-Term Investments and Other 2.5 8.4
- ---------------------------------------------------------
% of Net Assets as of
LARGEST HOLDINGS 6/30/2007 12/31/2006
- ---------------------------------------------------------
Equities
- ---------------------------------------------------------
Simon Property Group, Inc. 2.0 2.1
- ---------------------------------------------------------
Boston Properties, Inc. 1.3 1.5
- ---------------------------------------------------------
Equity Residential Properties Trust 1.2 1.2
- ---------------------------------------------------------
Vornado Realty Trust 0.9 1.0
- ---------------------------------------------------------
Archstone-Smith Trust 0.9 0.9
- ---------------------------------------------------------
Fixed-Income
- ---------------------------------------------------------
U.S. Treasury Bond,
3.375%, 4/15/2032 2.3 2.3
- ---------------------------------------------------------
U.S. Treasury Bond,
5.375%, 2/15/2031 2.0 3.8
- ---------------------------------------------------------
Canadian Government,
5.250%, 6/01/2012 1.4 --
- ---------------------------------------------------------
U.S. Treasury Bond,
4.500%, 2/15/2036 1.2 1.4
- ---------------------------------------------------------
U.S. Treasury Note,
0.875%, 4/15/2010 1.1 1.0
- ---------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/2007 12/31/2006
- ---------------------------------------------------------
Treasuries 18.5 22.8
- ---------------------------------------------------------
Banks 7.8 7.2
- ---------------------------------------------------------
REITs--Apartments 4.4 4.7
- ---------------------------------------------------------
REITs--Office 3.8 4.6
- ---------------------------------------------------------
Electric 3.8 3.8
- ---------------------------------------------------------
Portfolio holdings and asset allocations will vary.
FUND EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Class Gross Expense Ratio/6/ Net Expense Ratio/7/
- -------------------------------------------------
A 1.32 1.27
- -------------------------------------------------
C 2.07 2.02
- -------------------------------------------------
NOTES TO CHARTS
See page 7 for a description of the indexes.
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 4.50%.
/3/Class C share performance assumes a 1.00% contingent deferred sales charge
("CDSC") applied when you sell shares within one year of purchase.
/4/The since-inception comparative performance figures shown for Class A and C
shares were calculated from 12/1/05.
/5/Fund performance has been increased by expense waivers, without which
performance would have been lower.
/6/Before waivers and reimbursements.
/7/After waivers and reimbursements. Expense reductions are contractual and are
set to expire on 4/30/08.
3
NATIXIS MODERATE DIVERSIFIED PORTFOLIO
PORTFOLIO PROFILE
Objective:
Seeks long-term capital appreciation, with income as a secondary objective
- --------------------------------------------------------------------------------
Strategy:
Combines equity and fixed-income investments through a diversified portfolio of
complementary investment disciplines from specialized money managers. Equity
disciplines feature U.S. growth and value as well as international investments.
The fixed-income discipline focuses on U.S. investment-grade, fixed-income
securities
- --------------------------------------------------------------------------------
Inception Date:
July 15, 2004
- --------------------------------------------------------------------------------
Subadvisors:
Dreman Value Management, LLC
Hansberger Global Investors, Inc.
Harris Associates, L.P.
Loomis, Sayles & Company, L.P.
- --------------------------------------------------------------------------------
Symbols:
Class A AMDPX
Class C CMDPX
- --------------------------------------------------------------------------------
What You Should Know:
Growth stocks focus on future expectations of a security. The fund may be
exposed to greater volatility if the expectations are not met. Value stocks can
fall out of favor and underperform growth stocks during certain market
conditions. Foreign investments involve unique risks, such as currency
fluctuations, differing political and economic conditions, and different
accounting standards. Fixed-income securities are subject to credit risk,
interest rate risk and liquidity risk. Lower-rated securities are considered
riskier than investment-grade securities because there is a greater risk of
default.
Management Discussion
- --------------------------------------------------------------------------------
Market activity pushed interest rates up during the six months ended June 30,
2007, as economic growth appeared to be improving and investors became
concerned about the potential for accelerating inflation. While fixed-income
securities struggled, particularly in the second quarter, they ended the period
with positive returns. In the global equity markets, investors shrugged off the
rise in interest rates, bidding up stock prices. Overseas equity markets
outperformed the domestic equity markets. For the first half of 2007, Class A
shares of Natixis Moderate Diversified Portfolio (formerly IXIS Moderate
Diversified Portfolio) returned 6.36% at net asset value, with $0.08 in
dividends and $0.07 in capital gains reinvested during the period. For the same
period, the fund's domestic equity benchmark, the S&P 500 Index returned 6.96%,
while its fixed-income benchmark, the Lehman Aggregate Bond Index, returned
0.98%. The fund's results put it in the upper half of Morningstar's Moderate
Allocation category, which had an average return of 5.51%.
Natixis Moderate Diversified Portfolio is composed of five disciplines, each of
which invests in separate asset classes managed by one of four sub-advisors.
This multi-advisor approach provides shareholders with exposure to U.S. and
international common stocks as well as to fixed-income securities. Dreman Mid
Cap Value Discipline focuses on stocks of undervalued mid-cap companies with
favorable prospects for appreciation. Hansberger International Value Discipline
invests substantially all its assets in small, mid- and large-cap companies in
both developed and emerging markets overseas. (Effective August 3, 2007, Active
Investment Advisors, a division of Natixis Advisors, replaced Hansberger Global
Investors as manager of the international portion of this portfolio.) Harris
Associates Large Cap Value Discipline favors undervalued large- and mid-cap
companies that are trading at a substantial discount to their "true business
value." Loomis Sayles manages two segments. The Loomis Sayles Core Fixed Income
Discipline invests primarily in U.S. investment-grade, fixed-income securities,
including government, corporate, mortgage- and asset-backed securities. Equity
securities of large, growth-oriented companies are the focus of the Loomis
Sayles Large Cap Growth Discipline.
DREMAN SEEKS FINANCIALLY STRONG COMPANIES THAT ARE TEMPORARILY OUT OF FAVOR
During the first half of 2007, Dreman Value Management's segment benefited from
its emphasis on consumer staples, energy and healthcare. Another positive was
the segment's relatively small position in financial stocks, including real
estate investment trusts (REITs) and thrift institutions, which underperformed.
Dreman believes the economy is in the late stages of a strong economic cycle,
which is unlikely to favor materials and telecommunications services.
Consequently, the segment was underweight in these sectors, which hurt relative
performance as these sectors continued to rally during the period. The
segment's top-performing individual stocks included General Cable, which
produces aluminum, copper and fiber optic cable. The company benefited from
increased product demand as utility and telecommunications companies invested
in infrastructure development. Tesoro Corporation, an oil and gas refining
company, was also a top stock, as rising gasoline prices caused margins to
widen. Electronics wholesaler Avnet continued to be a positive contributor
because its semiconductor distribution business remained strong. Seagate
Technology, Mylan Laboratories, and NovaStar Financial were among the worst
performers. Seagate remains in the portfolio because Dreman believes the stock
is undervalued in light of the long-term growth prospects for its disk drive
business. The price of Mylan stock declined after the company purchased Merck's
generic drug business for what was perceived as too high a price, but Dreman
believes the purchase gives Mylan a global platform on which to grow. NovaStar
Financial was active in the subprime mortgage lending business and was sold.
HANSBERGER SOUGHT ATTRACTIVE INVESTMENTS OVERSEAS
Hansberger Global Investors' segment benefited from a strong economy and robust
merger and acquisition activity overseas. A relatively large commitment to
emerging-market equities
4
NATIXIS MODERATE DIVERSIFIED PORTFOLIO
Management Discussion
- --------------------------------------------------------------------------------
and allocations to Europe and Japan had a positive influence on performance.
Canadian holdings also contributed. In terms of sectors, utilities strongly
outperformed, including Datang International Power in China and Companhia
Energetica de Minas Gerais (CEMIG) in Brazil, both of which delivered
double-digit returns. Telecommunications service companies aided results, led
by Vodafone Group in the United Kingdom. Holdings in information technology
were also positive. The three stocks that had the greatest positive impact on
return were in the materials sector, including BHP Billiton in Great Britain,
Companhia Vale do Rio Doce (CVRD) in Brazil, and Evraz Group in Russia. These
mining companies benefited from strong demand for commodities, especially from
China and India, and from rising prices for base metals worldwide. The
segment's weakest region was Japan. Daiei Inc., a general merchandise and
supermarket retailer, declined on disappointing earnings. The stock remains in
the portfolio because Hansberger believes consumer spending in Japan should
pick up. Shares of Shionogi & Co., a Japanese pharmaceutical company, were also
off for the period, as sales of the cholesterol-lowering drug Crestor slumped
outside of Japan. Hansberger is encouraged by the long-term prospects for the
firm's pipeline of new medications. However, they sold Nissan Motor Company,
which declined on slower revenue growth and lower margins.
HARRIS ASSOCIATES SOUGHT DOMINANT BUSINESSES SELLING AT A DISCOUNT
Harris Associates emphasized consumer-oriented sectors, including technology
and financials, but had less exposure to utilities and materials. Stock
selection in technology and industrials contributed to performance. Although
the segment's emphasis on housing may have been premature, Harris Associates
believes the industry will stabilize and that the stocks selected should
provide attractive returns over time. A lack of exposure to energy companies
and an underweight in the materials sector had a negative impact on results.
Top-performing individual securities included Union Pacific, Intel and
McDonald's. Union Pacific's strength came from an operational turnaround,
vigorous demand for coal hauling, and a strong freight business, all of which
improved revenues. Intel reported better-than-expected second quarter earnings
on 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, and Harris Associates
believes it should benefit from an expansion of company-owned restaurants in
Europe. Harley-Davidson, Pulte Homes and Lennar Corporation were the weakest
performers. Harley-Davidson declined on concerns that consumers might cut back
on discretionary spending and because of a strike at one of the company's
manufacturing plants. Both Pulte Homes and Lennar were hurt by continued
weakness in the U.S. housing market. Harris Associates continues to view all
three as attractive investments and they remain in the portfolio.
LOOMIS SAYLES CORE FIXED INCOME DISCIPLINE USED A FLEXIBLE DURATION STRATEGY
Given Loomis Sayles' expectation that the Federal Reserve Board would maintain
a neutral monetary policy, the segment's duration
(its sensitivity to interest-rate movements) was trimmed and lengthened
opportunistically during the first half of 2007, as interest rates fluctuated
in a narrow range. This flexible strategy was the main reason for this
segment's relatively strong performance. Loomis Sayles' emphasis on corporate
bonds was positive, as strong corporate earnings reports supported interest
payments and helped the sector outperform. Investments in electric utilities
were helpful in the face of stable credit trends in that sector. Corporate
bonds with shorter durations performed well, but those with longer durations
were less successful, including bonds issued by telecommunications companies in
the United Kingdom and Spain. Concerns that the effects of subprime mortgage
defaults would spill over to other financial companies also led to poor results
in bonds issued by financial institutions across the board. U.S. Treasury
securities performed well on a duration-adjusted basis, but this segment had a
relatively small position in them, while its substantial exposure to
mortgage-backed securities, which performed poorly, had a negative impact on
return.
LOOMIS SAYLES LARGE CAP GROWTH DISCIPLINE EMPHASIZED LARGE COMPANIES WITH
PRODUCT LEADERSHIP
Investments in the materials, financials and technology sectors had the
greatest positive impact on performance. Mining company Freeport-McMoRan
outperformed as supply and demand favored copper producers and on speculation
that the company might become a buyout target. Precision Castparts benefited
from a surge in its commercial aerospace business, and shares of Monsanto, an
agricultural products company, rose on positive earnings reports. Relatively
strong earnings also contributed to superior results for MasterCard and Goldman
Sachs in the financial sector. Shares of commercial real estate company CB
Richard Ellis rose on news of rising rents and declining vacancies. In
technology, Apple gained strength on expectations for the rollout of the iPhone
and its iTV services. Strong iPod and iMac sales also influenced Apple's share
price. Google shares rose as internet companies reported better-than-expected
earnings. Investments in utilities had the greatest negative impact on
performance. Comcast Corporation was among the segment's worst performers; it
declined when earnings fell short of expectations. Other detractors included
Network Appliance, a computer storage company, which also failed to meet
expectations. Shares of pharmaceutical company Johnson & Johnson slid when the
Food & Drug Administration issued a warning for its anemia drug, Procrit.
Shares of Symantec declined when it missed analysts' earnings estimates. All
four were sold.
5
NATIXIS MODERATE 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, an 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/5/
[CHART]
July 15, 2004 (Inception) through June 30, 2007
Lehman
Net Asset Maximum Sales S&P 500 Aggregate
Month End Value/1/ Charge/2/ Index Bond Index
- --------- -------- --------- -------- -------------
7/14/2004 $10,000 $ 9,425 $10,000 $10,000
7/31/2004 9,850 9,284 10,000 10,000
8/31/2004 9,870 9,302 10,040 10,191
9/30/2004 9,990 9,416 10,149 10,218
10/31/2004 10,150 9,566 10,304 10,304
11/30/2004 10,430 9,830 10,721 10,222
12/31/2004 10,721 10,105 11,086 10,316
1/31/2005 10,511 9,907 10,816 10,381
2/28/2005 10,531 9,925 11,043 10,319
3/31/2005 10,392 9,794 10,848 10,266
4/30/2005 10,241 9,652 10,642 10,405
5/31/2005 10,502 9,899 10,981 10,518
6/30/2005 10,585 9,977 10,996 10,575
7/31/2005 10,797 10,176 11,405 10,479
8/31/2005 10,757 10,139 11,301 10,613
9/30/2005 10,820 10,197 11,393 10,504
10/31/2005 10,689 10,074 11,203 10,421
11/30/2005 11,022 10,388 11,626 10,467
12/31/2005 11,099 10,461 11,630 10,567
1/31/2006 11,332 10,681 11,938 10,567
2/28/2006 11,322 10,671 11,971 10,602
3/31/2006 11,424 10,767 12,120 10,498
4/30/2006 11,445 10,787 12,283 10,479
5/31/2006 11,068 10,432 11,929 10,468
6/30/2006 11,056 10,420 11,945 10,490
7/31/2006 11,046 10,411 12,019 10,632
8/31/2006 11,241 10,595 12,305 10,795
9/30/2006 11,494 10,833 12,622 10,890
10/31/2006 11,753 11,077 13,033 10,962
11/30/2006 11,949 11,262 13,281 11,089
12/31/2006 12,029 11,338 13,467 11,024
1/31/2007 12,252 11,547 13,671 11,020
2/28/2007 12,151 11,453 13,404 11,190
3/31/2007 12,222 11,519 13,554 11,190
4/30/2007 12,579 11,855 14,154 11,251
5/31/2007 12,891 12,149 14,648 11,165
6/30/2007 12,794 12,058 14,405 11,132
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR INCEPTION
CLASS A (Inception 7/15/04)
Net Asset Value/1/ 6.36% 15.73% 8.68%
With Maximum Sales Charge/2/ 0.25 9.04 6.53
CLASS C (Inception 7/15/04)
Net Asset Value/1/ 5.98 14.79 7.86
With CDSC/3/ 4.98 13.79 7.86
- ----------------------------------------------------------------------
SINCE
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR INCEPTION/4/
S&P 500 Index 6.96% 20.59% 13.33%
Lehman Aggregate Bond Index 0.98 6.12 3.75
Morningstar Moderate Allocation Fund Avg. 5.51 14.94 10.70
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.
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 69.8 68.1
- ------------------------------------------------------
Bonds and Notes 29.4 27.9
- ------------------------------------------------------
Short-Term Investments and Other 0.8 4.0
- ------------------------------------------------------
% of Net Assets as of
LARGEST HOLDINGS 6/30/2007 12/31/2006
- ------------------------------------------------------
Equities
- ------------------------------------------------------
Hewlett Packard 1.6 0.9
- ------------------------------------------------------
Morgan Stanley 1.5 1.4
- ------------------------------------------------------
Dell, Inc. 1.4 1.0
- ------------------------------------------------------
Intel Corp. 1.4 1.1
- ------------------------------------------------------
Texas Instruments, Inc. 1.1 0.5
- ------------------------------------------------------
Fixed-Income
- ------------------------------------------------------
FNMA, 5.000%, 8/01/2035 2.0 1.9
- ------------------------------------------------------
FHLMC, 5.500%, 9/01/2034 1.5 --
- ------------------------------------------------------
FNMA, 3.250%, 1/15/2008 1.4 1.2
- ------------------------------------------------------
FNMA, 6.000%, 12/01/2034 1.3 --
- ------------------------------------------------------
FHLMC, 4.500%, 6/01/2035 1.1 1.1
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/2007 12/31/2006
- ------------------------------------------------------
Mortgage Related 16.0 14.4
- ------------------------------------------------------
Diversified Financial Services 11.3 12.7
- ------------------------------------------------------
Computers 5.1 4.4
- ------------------------------------------------------
Telecommunications 4.6 2.4
- ------------------------------------------------------
Retail 4.3 3.9
- ------------------------------------------------------
Portfolio holdings and asset allocations will vary.
FUND EXPENSE RATIOS AS STATED IN THE MOST RECENT PROSPECTUS
Share Class Gross Expense Ratio/6/ Net Expense Ratio/7/
- -------------------------------------------------------
A 1.26 1.26
- -------------------------------------------------------
C 2.01 2.01
- -------------------------------------------------------
NOTES TO CHARTS
See page 7 for a description of the indexes.
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Class C share performance assumes a 1.00% contingent deferred sales charge
("CDSC") applied when you sell shares within one year of purchase.
/4/The since-inception comparative performance figures shown for Class A and C
shares were calculated from 8/1/04.
/5/Fund performance has been increased by expense waivers, without which
performance would have been lower.
/6/Before waivers and reimbursements.
/7/After waivers and reimbursements. Expense reductions are contractual and are
set to expire on 4/30/08.
6
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.
INDEX/AVERAGE DESCRIPTIONS:
Blended Index is an unmanaged blended index comprised of the following weights:
40% Lehman Aggregate Bond Index, 25% Morgan Stanley Capital International U.S.
REIT Index, 20% Dow Jones Select Dividend Index, and 15% Lehman U.S. TIPS
Index. The four indices comprising the Blended Index measure, respectively, the
performance of investment grade fixed income securities, equity REIT
securities, dividend-yielding equity securities, and Treasury
inflation-protected securities. The weightings of the indices that comprise the
Blended Index are rebalanced on a monthly basis to maintain the allocations as
described above.
Lehman Aggregate Bond Index is an unmanaged index of investment-grade bonds
with one- to ten-year maturities issued by the U.S. government, its agencies
and U.S. corporations.
Morningstar Conservative Allocation Fund Average is the average performance
without sales charges of funds with similar current investment objectives, as
calculated by Morningstar, Inc.
Morningstar Moderate Allocation Fund Average is the average performance without
sales charges of funds with similar current investment objectives, as
calculated by Morningstar, Inc.
S&P 500 Index is an unmanaged index of U.S. common stocks.
PROXY VOTING INFORMATION
A description of the funds' proxy voting policies and procedures is available
without charge, upon request, by calling Natixis Funds at 1-800-225-5478; 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, D.C. 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
7
UNDERSTANDING FUND EXPENSES
As a mutual fund shareholder, you incur different costs: transaction costs,
including sales charges (loads) on purchases, and certain exchange fees, and
ongoing costs, including management fees, sales and 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 exceptions 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 for 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 = 8.6) 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 for 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 or exchange fees.
Therefore, the second line in the table 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*
NATIXIS INCOME DIVERSIFIED PORTFOLIO 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $992.40 $5.68
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,019.09 $5.76
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $988.90 $9.32
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,015.42 $9.44
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio (after
waiver/reimbursement): 1.15% and 1.89% for Class A 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*
NATIXIS MODERATE DIVERSIFIED PORTFOLIO 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,063.60 $7.27
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.75 $7.10
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,059.80 $11.08
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,014.03 $10.84
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the fund's annualized expense ratio: 1.42% and 2.17% for
Class A 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).
8
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
The Board of Trustees, including the Independent Trustees, considers matters
bearing on each Portfolio'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
Portfolios' 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 Portfolios
and the performance of peer groups of funds and the Portfolios' performance
benchmarks, (ii) information on the Portfolios' advisory and subadvisory fees,
if any, and other expenses, including information comparing the Portfolios'
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 Portfolios, (iv) information about the profitability of the Agreements
to the Portfolios' adviser 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 Portfolio'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
Portfolios' shares, (iv) the procedures employed to determine the value of the
Portfolios' assets, (v) the allocation of the Portfolios' brokerage, if any,
including allocations to brokers affiliated with the Advisers and the use of
"soft" commission dollars to pay Portfolio expenses and to pay for research and
other similar services, (vii) the resources devoted to, and the record of
compliance with, the Portfolios' 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 Portfolio's investment
performance and the fees charged to the Portfolios for advisory and other
services. This information generally includes, among other things, an internal
performance rating for each Portfolio and Portfolio segment based on
agreed-upon criteria, graphs showing performance and fee differentials against
each Portfolio'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 Portfolio against its peer group. The
portfolio management team for each Portfolio makes periodic presentations to
the Contract Review and Governance Committee and/or the full Board of Trustees,
and Portfolios 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 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 Portfolio. 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 Portfolios under
the Agreements. The Trustees considered the nature, extent and quality of the
services provided by the Advisers and their affiliates to the Portfolios and
the resources dedicated to the Portfolios 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
Portfolios, including the monitoring and oversight services provided by Natixis
Advisors. They also considered the administrative services provided by Natixis
Advisors and its affiliates to the Portfolios.
9
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
For each Portfolio, 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.
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 Portfolios and the Advisers. As noted above, the
Trustees received information about the performance of the Portfolios over
various time periods, including information which compared the performance of
the Portfolios to the performance of peer groups of funds and the Portfolios'
respective performance benchmarks. In addition, the Trustees also reviewed data
prepared by an independent third party which analyzed the performance of the
Portfolios using a variety of performance metrics, including metrics which also
measured the performance of the Portfolios on a risk adjusted basis.
With respect to each Portfolio, the Board concluded that the Portfolio's
performance or other relevant factors supported the renewal of the Agreements
relating to that Portfolio. In the case of each Portfolio 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 Portfolios' Agreements. These factors varied from
Portfolio to Portfolio, but included one or more of the following: (1) that the
underperformance was attributable, to a significant extent, to investment
decisions by the Portfolio's Advisers that were reasonable and consistent with
the Portfolio's investment objective and policies; (2) that the Portfolio's
advisory fee had recently been, or is proposed to be, reduced or the
Portfolio's expenses capped, with the goal of helping the Portfolio's net
return to shareholders become more competitive; and (3) that reductions in the
Portfolio's expense levels resulting from decreased expenses and/or increased
assets were not yet fully reflected in the Portfolio's performance results.
The Trustees also noted that the Natixis Income Diversified Portfolio was
recently formed and therefore performance comparisons were unavailable or
related to a time period that was too short for a comparison to be meaningful.
The Trustees also considered each Adviser's performance and reputation
generally, the Portfolios' 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 Portfolios 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
Portfolios. The Trustees considered the fees charged to the Portfolios for
advisory and subadvisory services as well as the total expense levels of the
Portfolios. This information included comparisons (provided both by management
and also by an independent third party) of the Portfolios' 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
Portfolio's advisory and subadvisory fees, the Trustees also took into account
the demands, complexity and quality of the investment management of such
Portfolio. 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 both Portfolios currently have
expense caps in place, and they considered the amounts waived or reimbursed by
the Advisers under these caps. The Trustees noted that the Portfolios'
multi-manager structure was more complex that the management structure of
certain funds in their peer groups.
The Trustees also considered the compensation directly or indirectly received
by the Advisers and their affiliates from their relationships with the
Portfolios. The Trustees reviewed information provided by management as to the
profitability of the Advisers' and their affiliates' relationships with the
Portfolios, 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 Portfolio growth on Adviser profitability,
including information regarding resources spent on distribution activities and
the increase in net sales for 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
Portfolios, the expense levels of the Portfolios, and whether the Advisers had
implemented breakpoints and/or expense caps with respect to such Portfolios.
10
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
advisory fees charged to each of the Portfolios 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
Portfolios 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 Portfolios through breakpoints in their investment advisory
fees or other means, such as expense waivers. The Trustees noted that both the
Portfolios had breakpoints in their advisory fees and were subject to expense
caps. The Trustees also considered management's representation that for certain
Portfolios the Portfolios' Advisers did not benefit from economies of scale in
providing services to the Portfolios (because of the investment style of the
Portfolio, the small size of the Portfolio 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 Portfolios, 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 Portfolios supported
the renewal of the Agreements.
The Trustees also considered other factors, which included but were not limited
to the following:
.. whether each Portfolio has operated in accordance with its investment
objective and the Portfolio's record of compliance with its investment
restrictions, and the compliance programs of the Portfolios and the
Advisers. They also considered the compliance-related resources the Advisers
and their affiliates were providing to the Portfolios.
.. 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 Portfolios, and the benefits of research made
available to the Advisers by reason of brokerage commissions generated by
the Portfolios' 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.
11
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- --------------------------------------------------------------------------
Common Stocks -- 44.0% of Net Assets
Agriculture -- 0.4%
9,246 Universal Corp.(b) $ 563,265
---------------
Auto Parts & Equipment -- 0.1%
7,834 Superior Industries International, Inc.(b) 170,468
---------------
Automotive -- 0.2%
8,456 General Motors Corp.(b) 319,637
---------------
Banks -- 6.5%
8,066 Associated Banc Corp.(b) 263,758
10,514 Bank of America Corp. 514,030
7,878 Bank of Hawaii Corp.(b) 406,820
5,284 Bank of New York Co., Inc.(b) 218,969
9,484 BB&T Corp.(b) 385,809
10,233 Citizens Republic Bancorp, Inc.(b) 187,264
6,625 Colonial BancGroup, Inc.(b) 165,426
10,057 Comerica, Inc.(b) 598,090
6,611 Compass Bancshares, Inc.(b) 456,027
12,283 F N B Corp.(b) 205,617
9,814 Fifth Third Bancorp(b) 390,303
10,998 First Horizon National Corp.(b) 428,922
11,454 FirstMerit Corp.(b) 239,732
8,539 Fulton Financial Corp.(b) 123,132
9,583 Huntington Bancshares, Inc.(b) 217,917
9,307 KeyCorp(b) 319,509
10,579 National City Corp.(b) 352,492
8,407 Pacific Capital Bancorp 228,958
7,526 PNC Financial Services Group, Inc.(b) 538,711
8,624 Popular, Inc.(b) 138,588
7,998 Provident Bankshares Corp.(b) 262,174
9,399 Regions Financial Corp.(b) 311,107
7,173 Suntrust Banks, Inc.(b) 615,013
6,078 Synovus Financial Corp.(b) 186,595
8,150 TCF Financial Corp.(b) 226,570
8,370 Trustmark Corp.(b) 216,448
8,751 U.S. Bancorp 288,346
7,820 UnionBanCal Corp. 466,854
8,291 Valley National Bancorp(b) 186,465
9,906 Wachovia Corp.(b) 507,683
7,473 Wells Fargo & Co.(b) 262,825
8,113 Wilmington Trust Corp. 336,771
---------------
10,246,925
---------------
Beverages -- 0.2%
6,315 Coca-Cola Co. (The) 330,338
---------------
Building Materials -- 0.1%
7,027 Masco Corp.(b) 200,059
---------------
Chemicals -- 1.6%
9,340 Dow Chemical Co. (The) 413,015
7,480 Eastman Chemical Co.(b) 481,189
5,271 Lubrizol Corp. 340,243
8,870 Lyondell Chemical Co.(b) 329,254
7,372 PPG Industries, Inc.(b) 561,083
8,165 RPM International, Inc.(b) 188,693
6,187 Sensient Technologies Corp.(b) 157,088
---------------
2,470,565
---------------
Shares Description Value (+)
- --------------------------------------------------------------------------
Commercial Services -- 0.4%
9,917 Deluxe Corp.(b) $ 402,729
6,868 R. R. Donnelley & Sons Co.(b) 298,827
---------------
701,556
---------------
Consumer Products -- 0.5%
7,515 Briggs & Stratton Corp.(b) 237,173
7,376 Kimberly-Clark Corp. 493,381
---------------
730,554
---------------
Distribution & Wholesale -- 0.2%
7,074 Genuine Parts Co.(b) 350,870
---------------
Diversified Financial Services -- 0.6%
9,335 Citigroup, Inc. 478,792
7,080 JPMorgan Chase & Co. 343,026
5,559 Waddell & Reed Financial, Inc., Class A(b) 144,590
---------------
966,408
---------------
Electric -- 3.3%
8,933 Black Hills Corp.(b) 355,087
8,638 Centerpoint Energy, Inc.(b) 150,301
8,361 DPL, Inc.(b) 236,951
10,510 DTE Energy Co.(b) 506,792
11,162 Energy East Corp.(b) 291,216
5,796 Entergy Corp. 622,200
6,418 Exelon Corp. 465,947
7,377 FirstEnergy Corp.(b) 477,513
6,897 FPL Group, Inc. 391,336
6,310 Northeast Utilities(b) 178,952
10,482 Pinnacle West Capital Corp.(b) 417,708
6,567 PNM Resources, Inc.(b) 182,497
7,540 PPL Corp.(b) 352,797
10,150 SCANA Corp.(b) 388,643
5,363 Unisource Energy Corp.(b) 176,389
---------------
5,194,329
---------------
Electrical Components & Equipment -- 0.4%
12,164 Emerson Electric Co. 569,275
---------------
Environmental Control -- 0.1%
5,546 Waste Management, Inc.(b) 216,571
---------------
Food -- 0.3%
6,013 General Mills, Inc. 351,280
5,533 Sara Lee Corp. 96,274
---------------
447,554
---------------
Forest Products & Paper -- 0.2%
7,249 Meadwestvaco Corp.(b) 256,035
---------------
Gas -- 0.8%
9,337 AGL Resources, Inc.(b) 377,961
9,401 Nicor, Inc.(b) 403,491
8,873 NiSource, Inc.(b) 183,760
7,339 Oneok, Inc. 369,959
---------------
1,335,171
---------------
Home Construction -- 0.0%
375 KB Home(b) 14,764
---------------
Home Furnishings -- 0.1%
9,517 La-Z-Boy, Inc.(b) 109,065
---------------
See accompanying notes to financial statements.
12
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ---------------------------------------------------------------------------------
Household Products & Wares -- 0.2%
5,837 Avery Dennison Corp.(b) $ 388,044
---------------
Insurance -- 1.1%
9,401 Arthur J Gallagher & Co.(b) 262,100
7,225 Cincinnati Financial Corp.(b) 313,565
7,881 Commerce Group, Inc.(b) 273,628
6,208 Lincoln National Corp.(b) 440,458
8,633 Unitrin, Inc.(b) 424,571
---------------
1,714,322
---------------
Office & Business Equipment -- 0.2%
6,837 Pitney Bowes, Inc.(b) 320,108
---------------
Oil & Gas -- 0.4%
6,954 Chevron Corp. 585,805
---------------
Packaging & Containers -- 0.2%
5,979 Sonoco Products Co. 255,961
---------------
Pharmaceuticals -- 1.1%
6,120 Abbott Laboratories 327,726
10,921 Bristol-Myers Squibb Co. 344,667
7,425 Eli Lilly & Co. 414,909
8,724 Merck & Co., Inc.(b) 434,455
8,916 Pfizer, Inc. 227,982
---------------
1,749,739
---------------
Publishing -- 0.1%
6,927 New York Times Co., Class A(b) 175,946
---------------
Real Estate Investment Trusts -- 23.2%
REITs -- Apartments -- 4.4%
8,300 Apartment Investment & Management Co., Class A(b) 418,486
25,000 Archstone-Smith Trust(b) 1,477,750
11,100 AvalonBay Communities, Inc. 1,319,568
16,300 Camden Property Trust(b) 1,091,611
42,900 Equity Residential 1,957,527
3,200 Home Properties, Inc. 166,176
17,700 UDR, Inc.(b) 465,510
---------------
6,896,628
---------------
REITs -- Diversified -- 1.1%
11,900 BioMed Realty Trust, Inc. 298,928
13,700 Vornado Realty Trust(b) 1,504,808
---------------
1,803,736
---------------
REITs -- Healthcare -- 1.0%
7,600 Health Care Property Investors, Inc. 219,868
10,600 Healthcare Realty Trust, Inc.(b) 294,468
27,700 Nationwide Health Properties, Inc. 753,440
21,400 Omega Healthcare Investors, Inc.(b) 338,762
---------------
1,606,538
---------------
REITs -- Hotels -- 2.0%
19,400 Ashford Hospitality Trust(b) 228,144
26,900 Hilton Hotels Corp. 900,343
4,500 Hospitality Properties Trust 186,705
60,000 Host Hotels & Resorts, Inc. 1,387,200
8,000 Starwood Hotels & Resorts Worldwide, Inc.(b) 536,560
---------------
3,238,952
---------------
REITs -- Industrial -- 3.0%
17,500 AMB Property Corp.(b) 931,350
52,900 DCT Industrial Trust, Inc.(b) 569,204
Shares Description Value (+)
- ---------------------------------------------------------------------------------
REITs -- Industrial -- continued
12,900 First Potomac Realty Trust(b) $ 300,441
28,700 Liberty Property Trust 1,260,791
21,900 ProLogis 1,246,110
6,200 PS Business Parks, Inc.(b) 392,894
---------------
4,700,790
---------------
REITs -- Office -- 3.8%
20,500 Boston Properties, Inc. 2,093,665
26,600 Brandywine Realty Trust(b) 760,228
39,000 Brookfield Properties Corp. 948,090
11,100 Corporate Office Properties Trust(b) 455,211
5,200 Digital Realty Trust, Inc.(b) 195,936
14,800 Highwoods Properties, Inc.(b) 555,000
41,200 HRPT Properties Trust(b) 428,480
8,800 Kilroy Realty Corp.(b) 623,392
---------------
6,060,002
---------------
REITs -- Regional Malls -- 3.6%
14,400 General Growth Properties, Inc.(b) 762,480
14,200 Macerich Co. (The)(b) 1,170,364
33,400 Simon Property Group, Inc. 3,107,536
13,400 Taubman Centers, Inc.(b) 664,774
---------------
5,705,154
---------------
REITs -- Shopping Centers -- 2.7%
16,100 Cedar Shopping Centers, Inc.(b) 231,035
25,300 Developers Diversified Realty Corp. 1,333,563
12,500 Federal Realty Investment Trust(b) 965,750
14,100 Kimco Realty Corp. 536,787
4,800 Kite Realty Group Trust(b) 91,296
15,000 Regency Centers Corp.(b) 1,057,500
---------------
4,215,931
---------------
REITs -- Storage -- 1.2%
30,000 Extra Space Storage, Inc.(b) 495,000
18,000 Public Storage, Inc. 1,382,760
---------------
1,877,760
---------------
REITs -- Triple Net Lease -- 0.4%
9,600 iStar Financial, Inc.(b) 425,568
9,600 Realty Income Corp.(b) 241,824
---------------
667,392
---------------
Total Real Estate Investment Trusts 36,772,883
---------------
Savings & Loans -- 0.8%
7,541 Astoria Financial Corp.(b) 188,826
14,455 New York Community Bancorp, Inc.(b) 246,024
11,037 People's United Financial, Inc.(b) 195,693
8,180 Washington Federal, Inc.(b) 198,856
11,870 Washington Mutual, Inc.(b) 506,137
---------------
1,335,536
---------------
Telecommunications -- 0.2%
9,272 AT&T, Inc. 384,788
---------------
Tobacco -- 0.4%
10,079 Altria Group, Inc. 706,941
---------------
Toys, Games & Hobbies -- 0.1%
6,850 Mattel, Inc.(b) 173,236
---------------
Total Common Stocks (Identified Cost $71,720,126) 69,756,718
---------------
See accompanying notes to financial statements.
13
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- ------------------------------------------------------------------------------------
Bonds and Notes -- 53.2%
Aerospace & Defense -- 0.8%
$ 115,000 Bombardier, Inc.,
7.350%, 12/22/2026 (CAD) $ 108,514
1,020,000 Bombardier, Inc., 144A,
7.450%, 5/01/2034 984,300
200,000 Embraer Overseas Ltd.,
6.375%, 1/24/2017 196,000
---------------
1,288,814
---------------
Airlines -- 0.7%
2,147 Continental Airlines, Inc., Series 1999-1, Class C,
6.954%, 8/02/2009 2,147
1,055,000 United Air Lines, Inc., Series 2007-1, Class A,
6.636%, 7/02/2022 1,057,912
---------------
1,060,059
---------------
Automotive -- 1.4%
115,000 Cummins, Inc.,
7.125%, 3/01/2028 116,166
30,000 Ford Motor Co.,
6.375%, 2/01/2029 22,125
15,000 Ford Motor Co.,
6.500%, 8/01/2018 12,150
1,805,000 Ford Motor Co.,
6.625%, 10/01/2028 1,349,237
725,000 Ford Motor Co.,
7.450%, 7/16/2031(b) 579,094
10,000 General Motors Corp.,
8.375%, 7/15/2033(b) 9,125
40,000 Goodyear Tire & Rubber Co.,
7.000%, 3/15/2028 36,400
105,000 Goodyear Tire & Rubber Co.,
7.857%, 8/15/2011 107,100
6,000 Goodyear Tire & Rubber Co.,
9.000%, 7/01/2015(b) 6,465
---------------
2,237,862
---------------
Banks -- 1.3%
110,000,000 Barclays Financial LLC, 144A,
4.060%, 9/16/2010 (KRW) 116,138
300,000,000 Barclays Financial LLC, 144A,
4.470%, 12/04/2011 (KRW) 317,909
123,800,000 Barclays Financial LLC, 144A,
4.960%, 3/23/2009 (KRW)(c) 134,515
700,000 HSBC Bank PLC, 144A,
Zero Coupon, 4/18/2012 (MYR) 170,615
4,405,000 HSBC Bank USA, 144A,
Zero Coupon, 5/17/2012 (MYR) 1,062,176
437,254 HSBC Bank USA, 144A,
Zero Coupon, 11/28/2011 309,576
---------------
2,110,929
---------------
Beverages -- 0.1%
175,000 Miller Brewing Co., 144A,
5.500%, 8/15/2013 172,074
---------------
Biotechnology -- 0.4%
655,000 Amgen, Inc., 144A,
6.375%, 6/01/2037 640,832
---------------
Principal
Amount (++) Description Value (+)
- --------------------------------------------------------------------------
Brokerage -- 0.2%
$ 3,339,258,780 JPMorgan Chase & Co., 144A,
Zero Coupon, 4/12/2012 (IDR) $ 247,412
---------------
Building Materials -- 0.4%
170,000 Masco Corp.,
5.850%, 3/15/2017 163,422
525,000 USG Corp.,
6.300%, 11/15/2016 513,005
---------------
676,427
---------------
Chemicals -- 0.2%
45,000 Borden, Inc.,
7.875%, 2/15/2023 38,475
10,000 Borden, Inc.,
8.375%, 4/15/2016 9,450
25,000 Borden, Inc.,
9.200%, 3/15/2021 23,750
200,000 Hercules, Inc., Subordinated Note,
6.500%, 6/30/2029 168,000
55,000 Methanex Corp., Senior Note,
6.000%, 8/15/2015 52,931
---------------
292,606
---------------
Construction Machinery -- 0.2%
380,000 Joy Global, Inc.,
6.625%, 11/15/2036 377,285
---------------
Consumer Products -- 0.0%
20,000 Hasbro, Inc., Senior Debenture,
6.600%, 7/15/2028 19,168
---------------
Distribution & Wholesale -- 0.2%
345,000 Owens & Minor, Inc.,
6.350%, 4/15/2016 339,728
---------------
Diversified Financial Services -- 0.2%
245,000 KAR Holdings, Inc., 144A,
10.000%, 5/01/2015 238,875
---------------
Electric -- 0.4%
55,000 Dynegy Holdings, Inc.,
7.125%, 5/15/2018 48,950
100,000 Dynegy Holdings, Inc.,
7.625%, 10/15/2026 88,500
335,000 National Grid PLC,
6.300%, 8/01/2016(b) 341,113
20,000 NGC Corp. Capital Trust I, Series B,
8.316%, 6/01/2027 18,350
135,000 TXU Corp., Series Q,
6.500%, 11/15/2024 111,626
---------------
608,539
---------------
Entertainment -- 1.0%
800,000 Time Warner, Inc.,
6.500%, 11/15/2036(b) 759,575
425,000 Time Warner, Inc.,
6.625%, 5/15/2029 412,650
35,000 Time Warner, Inc.,
6.950%, 1/15/2028 35,255
315,000 Viacom, Inc., Senior Note,
6.875%, 4/30/2036 304,329
---------------
1,511,809
---------------
See accompanying notes to financial statements.
14
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- ----------------------------------------------------------------------------------
Finance Other -- 1.7%
$ 1,640,000 Berkshire Hathaway Finance Corp,
4.200%, 12/15/2010 $ 1,581,339
65,000 Berkshire Hathaway Finance Corp.,
4.125%, 1/15/2010 63,195
595,000 Berkshire Hathaway Finance Corp.,
4.850%, 1/15/2015 565,260
435,000 Western Union Co.,
6.200%, 11/17/2036 416,305
---------------
2,626,099
---------------
Food -- 0.0%
30,000 Sara Lee Corp.,
6.125%, 11/01/2032(b) 26,838
---------------
Government Guaranteed -- 1.0%
100,000,000 Development Bank of Japan,
1.750%, 6/21/2010 (JPY) 824,751
22,000,000 Kreditanstalt fuer Wiederaufbau,
1.850%, 9/20/2010 (JPY) 181,897
2,625,000 Kreditanstalt fuer Wiederaufbau, Series E, (MTN),
8.500%, 7/16/2010 (ZAR) 357,970
19,000,000 Oesterreichische Kontrollbank AG,
1.800%, 3/22/2010 (JPY) 156,799
---------------
1,521,417
---------------
Government Sponsored -- 0.4%
20,000,000 Federal National Mortgage Association,
1.750%, 3/26/2008 (JPY) 163,526
200,000 Federal National Mortgage Association,
2.290%, 2/19/2009 (SGD) 129,375
370,000 Federal National Mortgage Association,
3.250%, 8/15/2008(b) 361,926
---------------
654,827
---------------
Healthcare -- 1.0%
265,000 HCA, Inc.,
6.375%, 1/15/2015 225,250
610,000 HCA, Inc.,
6.500%, 2/15/2016(b) 516,212
25,000 HCA, Inc.,
7.050%, 12/01/2027 20,315
5,000 HCA, Inc.,
7.500%, 12/15/2023 4,314
460,000 HCA, Inc.,
7.500%, 11/06/2033 389,850
135,000 HCA, Inc.,
7.580%, 9/15/2025 116,538
310,000 HCA, Inc.,
7.690%, 6/15/2025 269,636
30,000 HCA, Inc.,
7.750%, 7/15/2036 25,663
20,000 HCA, Inc.,
8.360%, 4/15/2024 18,441
---------------
1,586,219
---------------
Home Construction -- 1.0%
175,000 Centex Corp.,
5.250%, 6/15/2015 156,592
50,000 DR Horton, Inc., Senior Note,
5.250%, 2/15/2015 44,743
Principal
Amount (++) Description Value (+)
- ---------------------------------------------------------------------------------
Home Construction -- continued
$ 25,000 DR Horton, Inc.,
5.625%, 9/15/2014 $ 23,063
30,000 DR Horton, Inc., Guaranteed Note,
5.625%, 1/15/2016 27,205
290,000 K. Hovnanian Enterprises, Inc., Senior Note,
6.250%, 1/15/2016(b) 246,500
10,000 K. Hovnanian Enterprises, Inc., Guaranteed Note,
6.375%, 12/15/2014 8,550
100,000 K. Hovnanian Enterprises, Inc., Guaranteed Note,
6.500%, 1/15/2014 88,500
20,000 K. Hovnanian Enterprises, Inc.,
7.500%, 5/15/2016(b) 18,200
175,000 KB Home, Senior Note,
5.875%, 1/15/2015(b) 152,250
125,000 KB Home, Guaranteed Note,
6.250%, 6/15/2015 110,000
105,000 KB Home, Guaranteed Note,
7.250%, 6/15/2018(b) 96,600
140,000 Lennar Corp., Series B, Guaranteed Note,
5.600%, 5/31/2015 131,189
10,000 Pulte Homes, Inc.,
5.200%, 2/15/2015 8,986
80,000 Pulte Homes, Inc.,
6.000%, 2/15/2035 68,169
470,000 Pulte Homes, Inc.,
6.375%, 5/15/2033 414,048
25,000 Toll Brothers Financial Corp.,
5.150%, 5/15/2015 22,556
---------------
1,617,151
---------------
Independent Energy -- 0.3%
210,000 Chesapeake Energy Corp.,
6.500%, 8/15/2017 198,975
100,000 Chesapeake Energy Corp.,
6.875%, 11/15/2020 95,750
115,000 XTO Energy, Inc.,
6.100%, 4/01/2036 107,902
---------------
402,627
---------------
Industrial Conglomerates -- 0.1%
190,000 Stena AB, Senior Note,
7.000%, 12/01/2016 190,000
---------------
Insurance -- 0.4%
190,000 CIGNA Corp.,
6.150%, 11/15/2036 180,985
55,000 Fund American Cos., Inc.,
5.875%, 5/15/2013(b) 54,084
465,000 White Mountains RE Group, 144A,
6.375%, 3/20/2017 446,761
---------------
681,830
---------------
Leisure Time -- 0.0%
35,000 Royal Caribbean Cruises Ltd.,
7.500%, 10/15/2027(b) 33,309
---------------
Media Cable -- 1.7%
1,370,000 Comcast Corp.,
5.650%, 6/15/2035 1,191,907
65,000 Comcast Corp.,
6.450%, 3/15/2037 62,642
See accompanying notes to financial statements.
15
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- ---------------------------------------------------------------------------------------
Media Cable -- continued
$ 80,000 Comcast Corp.,
6.500%, 11/15/2035 $ 77,548
995,000 COX Communications, Inc., 144A,
6.450%, 12/01/2036 956,975
100,000 CSC Holdings, Inc., Senior Note,
7.625%, 7/15/2018 95,000
244,000 Time Warner Cable, Inc., 144A,
6.550%, 5/01/2037 235,828
---------------
2,619,900
---------------
Media Non-Cable -- 1.0%
250,000 British Sky Broadcasting Finance PLC, 144A,
5.625%, 10/15/2015 241,009
385,000 British Sky Broadcasting Finance PLC, 144A,
6.500%, 10/15/2035 373,674
80,000 Intelsat Corp.,
6.875%, 1/15/2028 74,100
83,738 Liberty Media LLC, Convertible,
3.500%, 1/15/2031 82,482
150,000 News America, Inc., 144A,
6.150%, 3/01/2037 138,275
520,000 News America, Inc.,
6.200%, 12/15/2034(b) 484,739
270,000 Tribune Co.,
5.250%, 8/15/2015 214,085
---------------
1,608,364
---------------
Mining -- 0.4%
400,000 Barrick Gold Finance Co.,
5.800%, 11/15/2034 357,196
30,000 Glencore Funding LLC, Guaranteed Note, 144A,
6.000%, 4/15/2014 29,443
220,000 Newmont Mining Corp.,
5.875%, 4/01/2035 194,723
125,000 Vale Overseas, Ltd.,
6.875%, 11/21/2036(b) 125,648
---------------
707,010
---------------
Municipal -- 0.0%
50,000 Michigan Tobacco Settlement Finance Authority,
Taxable Turbo Series A,
7.309%, 6/01/2034 50,977
---------------
Non Captive Consumer -- 1.7%
20,000 Capital One Bank,
5.125%, 2/15/2014(b) 19,197
65,000 Ford Motor Credit Co.,
5.700%, 1/15/2010(b) 62,098
230,000 Ford Motor Credit Co.,
8.000%, 12/15/2016 220,305
900,000 General Electric Capital Corp., Series G, (MTN),
2.960%, 5/18/2012 (SGD) 578,219
800,000 General Electric Capital Corp., Series G, (MTN),
3.485%, 3/08/2012 (SGD) 529,058
60,000 General Electric Capital Corp., (MTN),
4.750%, 9/15/2014 56,761
110,000,000 SLM Corp., Series 35, (MTN),
1.530%, 9/15/2011 (JPY) 819,262
70,000 SLM Corp., Series A, (MTN),
5.000%, 10/01/2013(b) 59,725
Principal
Amount (++) Description Value (+)
- -------------------------------------------------------------------
Non Captive Consumer -- continued
$ 90,000 SLM Corp., Series A, (MTN),
5.000%, 4/15/2015(b) $ 73,960
25,000 SLM Corp., Series A, (MTN),
5.000%, 6/15/2018 20,332
85,000 SLM Corp., (MTN),
5.050%, 11/14/2014 70,684
10,000 SLM Corp., Series A, (MTN),
5.375%, 5/15/2014 8,569
87,000 SLM Corp., Series A, (MTN),
5.625%, 8/01/2033(b) 67,838
165,000 SLM Corp., Series A, (MTN),
6.500%, 6/15/2010 (NZD) 115,597
---------------
2,701,605
---------------
Oil & Gas -- 0.7%
670,000 Anadarko Petroleum Corp.,
6.450%, 9/15/2036 644,424
410,000 Pioneer Natural Resources Co.,
7.200%, 1/15/2028(b) 378,995
50,000 Talisman Energy, Inc.,
5.850%, 2/01/2037 44,134
110,000 Talisman Energy, Inc.,
6.250%, 2/01/2038 101,943
---------------
1,169,496
---------------
Oil & Gas Services -- 0.2%
390,000 Weatherford International, Ltd.,
6.500%, 8/01/2036 377,145
---------------
Packaging & Containers -- 0.0%
30,000 Owens-Illinois, Inc., Senior Note,
7.800%, 5/15/2018 30,300
---------------
Paper -- 0.7%
110,000 Abitibi-Consolidated, Inc.,
7.400%, 4/01/2018 89,100
35,000 Abitibi-Consolidated, Inc.,
7.500%, 4/01/2028(b) 27,650
15,000 Abitibi-Consolidated, Inc.,
8.500%, 8/01/2029(b) 12,300
75,000 Abitibi-Consolidated, Inc.,
8.850%, 8/01/2030(b) 63,000
115,000 Bowater, Inc.,
6.500%, 6/15/2013(b) 99,906
5,000 Georgia-Pacific Corp.,
7.250%, 6/01/2028 4,600
25,000 Georgia-Pacific Corp.,
7.375%, 12/01/2025 23,438
385,000 Georgia-Pacific Corp.,
7.750%, 11/15/2029 361,900
400,000 Georgia-Pacific Corp.,
8.000%, 1/15/2024 388,000
95,000 Georgia-Pacific Corp.,
8.875%, 5/15/2031(b) 94,762
---------------
1,164,656
---------------
Pharmaceuticals -- 0.8%
160,000 Elan Finance PLC,
8.875%, 12/01/2013 167,200
285,000 Elan Finance PLC, Senior Note,
7.750%, 11/15/2011 285,356
See accompanying notes to financial statements.
16
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- ------------------------------------------------------------------------------------------
Pharmaceuticals -- continued
$ 5,000 EPIX Pharmaceuticals, Inc., Senior Note, Convertible,
3.000%, 6/15/2024 $ 3,869
80,000 Hospira, Inc.,
6.050%, 3/30/2017 78,778
10,000 Invitrogen Corp.,
1.500%, 2/15/2024 9,188
100,000 Nektar Therapeutics,
3.250%, 9/28/2012 87,250
180,000 Teva Pharmaceutical Finance LLC,
6.150%, 2/01/2036 168,260
480,000 Valeant Pharmaceuticals International, Subordinated Note,
4.000%, 11/15/2013 445,200
---------------
1,245,101
---------------
Pipelines -- 1.6%
75,000 DCP Midstream LP, 144A,
6.450%, 11/03/2036 74,086
620,000 El Paso Corp.,
6.950%, 6/01/2028(b) 576,049
25,000 El Paso Energy Corp., (MTN),
7.750%, 1/15/2032 25,183
130,000 El Paso Natural Gas Co., 144A,
5.950%, 4/15/2017 125,919
10,000 K N Capital Trust III,
7.630%, 4/15/2028(b) 9,403
20,000 Kinder Morgan Energy Partners, LP, Senior Note,
5.000%, 12/15/2013 18,925
100,000 Kinder Morgan Energy Partners, LP, Senior Note,
5.800%, 3/15/2035 88,835
800,000 Kinder Morgan Energy Partners, LP, (MTN),
6.950%, 1/15/2038 808,029
65,000 Kinder Morgan Finance Co. ULC, Guaranteed Note,
5.700%, 1/05/2016 59,909
420,000 Kinder Morgan Finance Co. ULC, Guaranteed Note,
6.400%, 1/05/2036(b) 371,162
25,000 Kinder Morgan, Inc., Senior Note,
5.150%, 3/01/2015 22,790
35,000 ONEOK Partners LP,
6.150%, 10/01/2016 34,911
45,000 ONEOK Partners LP,
6.650%, 10/01/2036 44,633
125,000 Southern Natural Gas Co., 144A,
5.900%, 4/01/2017 120,902
50,000 Tennessee Gas Pipeline Co.,
7.000%, 10/15/2028 51,491
60,000 Transcontinental Gas Pipe Line Corp.,
6.400%, 4/15/2016 60,150
---------------
2,492,377
---------------
Real Estate Investment Trusts -- 0.2%
50,000 Archstone-Smith Trust,
5.750%, 3/15/2016 49,741
30,000 ERP Operating, LP,
5.375%, 8/01/2016 28,769
10,000 FelCor Lodging, LP, Senior Note,
8.500%, 6/01/2011 10,513
235,000 Highwoods Properties, Inc., 144A,
5.850%, 3/15/2017 227,300
Principal
Amount (++) Description Value (+)
- ---------------------------------------------------------------------------
Real Estate Investment Trusts -- continued
$ 20,000 Simon Property Group, LP,
4.875%, 8/15/2010 $ 19,626
---------------
335,949
---------------
Retailers -- 1.4%
275,000 CVS Caremark Corp.,
4.875%, 9/15/2014 256,308
55,000 CVS Caremark Corp., Senior Note,
6.125%, 8/15/2016 54,523
400,000 Dillard's, Inc.,
6.625%, 1/15/2018 377,714
205,000 Dillard's, Inc., Class A,
7.000%, 12/01/2028 184,221
685,000 J.C. Penney Corp., Inc., Senior Note,
6.375%, 10/15/2036 652,330
140,000 Macy's Retail Holdings, Inc.,
6.375%, 3/15/2037 134,672
725,000 Toys R Us, Inc.,
7.375%, 10/15/2018(b) 610,813
5,000 Toys R Us, Inc.,
7.875%, 4/15/2013 4,500
---------------
2,275,081
---------------
Sovereigns -- 2.6%
2,215,000 Canadian Government,
5.250%, 6/01/2012 (CAD) 2,142,120
130,000 Canadian Government,
5.750%, 6/01/2033 (CAD) 145,480
115,000(++) Mexican Fixed Rate Bonds, Series M-10,
8.000%, 12/17/2015 (MXN) 1,084,908
20,000(++) Mexican Fixed Rate Bonds, Series M-10,
9.000%, 12/20/2012 (MXN) 195,825
400,000 Republic of Brazil,
12.500%, 1/05/2016 (BRL) 251,571
105,000,000 Republic of Colombia,
9.850%, 6/28/2027 (COP) 56,126
1,145,000 Republic of South Africa,
13.000%, 8/31/2010 (ZAR) 178,809
---------------
4,054,839
---------------
Supermarkets -- 0.6%
355,000 Albertson's, Inc.,
7.750%, 6/15/2026 358,035
340,000 Albertson's, Inc., Senior Note,
7.450%, 8/01/2029(b) 331,612
15,000 Albertson's, Inc., Senior Note,
8.000%, 5/01/2031 15,331
10,000 Albertson's, Inc., Senior Note,
8.700%, 5/01/2030 10,982
320,000 Albertson's, Inc., Series C, (MTN),
6.625%, 6/01/2028 288,381
---------------
1,004,341
---------------
Supranational -- 1.0%
1,000,000 European Investment Bank, 144A,
4.600%, 1/30/2037 (CAD) 892,316
38,500,000 Inter-American Development Bank,
13.000%, 6/20/2008 (ISK) 617,225
---------------
1,509,541
---------------
See accompanying notes to financial statements.
17
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- ---------------------------------------------------------------------------------
Technology -- 1.7%
$ 10,000 Affiliated Computer Services, Inc.,
5.200%, 6/01/2015 $ 9,058
70,000 Arrow Electronics, Inc.,
6.875%, 6/01/2018 71,311
40,000 Avnet, Inc.,
2.000%, 3/15/2034 50,600
255,000 Avnet, Inc.,
5.875%, 3/15/2014 251,543
340,000 Avnet, Inc.,
6.000%, 9/01/2015 327,671
50,000 Corning, Inc.,
5.900%, 3/15/2014 50,152
75,000 Corning, Inc.,
6.200%, 3/15/2016 75,191
115,000 Corning, Inc.,
6.850%, 3/01/2029 115,893
65,000 Corning, Inc.,
7.250%, 8/15/2036 67,001
120,000 JDS Uniphase Corp., Convertible,
Zero Coupon, 11/15/2010 110,850
20,000 Kulicke & Soffa Industries, Inc., Convertible,
0.500%, 11/30/2008 18,575
15,000 Kulicke & Soffa Industries, Inc., Convertible,
1.000%, 6/30/2010 15,038
920,000 Lucent Technologies, Inc.,
6.450%, 3/15/2029 800,400
390,000 Lucent Technologies, Inc.,
6.500%, 1/15/2028 339,300
25,000 Nortel Networks Corp.,
6.875%, 9/01/2023 21,875
140,000 Nortel Networks, Ltd., 144A,
10.125%, 7/15/2013 150,150
40,000 Northern Telecom Capital Corp.,
7.875%, 6/15/2026 37,800
170,000 Xerox Corp.,
6.400%, 3/15/2016 171,048
---------------
2,683,456
---------------
Tobacco -- 0.2%
238,000 Reynolds American, Inc.,
7.250%, 6/15/2037 245,007
---------------
Transportation -- 0.3%
445,000 CSX Corp.,
6.000%, 10/01/2036(b) 415,441
---------------
Treasuries -- 18.5%
713,175 U.S. Treasury Bond,
2.000%, 1/15/2026(b)(d) 645,980
2,151,248 U.S. Treasury Bond,
2.375%, with various maturities to 2027(b)(d)(e) 2,067,917
3,137,466 U.S. Treasury Bond,
3.375%, 4/15/2032(b)(d) 3,611,029
2,160,000 U.S. Treasury Bond,
4.500%, 2/15/2036(b) 1,955,813
3,020,000 U.S. Treasury Bond,
5.375%, 2/15/2031(b) 3,101,163
1,772,501 U.S. Treasury Note,
0.875%, 4/15/2010(b)(d) 1,683,323
1,249,940 U.S. Treasury Note,
1.625%, 1/15/2015(b)(d) 1,161,858
Principal
Amount (++) Description Value (+)
- ---------------------------------------------------------------------------------
Treasuries --continued
$ 2,347,452 U.S. Treasury Note,
1.875%, with various maturities to 2015(b)(d)(e) $ 2,234,499
3,448,472 U.S. Treasury Note,
2.000%, with various maturities to 2016(b)(d)(e) 3,305,268
1,401,324 U.S. Treasury Note,
2.375%, with various maturities to 2017(b)(d)(e) 1,378,559
583,234 U.S. Treasury Note,
2.500%, 7/15/2016(b)(d) 576,719
1,448,105 U.S. Treasury Note,
3.000%, 7/15/2012(b)(d) 1,476,162
384,039 U.S. Treasury Note,
3.375%, 1/15/2012(d) 396,400
676,754 U.S. Treasury Note,
3.500%, 1/15/2011(b)(d) 696,264
138,601 U.S. Treasury Note,
3.875%, 1/15/2009(b)(d) 140,810
2,443,054 U.S. Treasury Note,
4.250%, with various maturities to 2015(b)(d)(e) 2,434,538
1,025,000 U.S. Treasury Note,
4.625%, with various maturities to 2017(b)(d)(e) 1,001,324
1,000,000 U.S. Treasury Note,
5.000%, 7/31/2008(b) 999,688
760,000 U.S. Treasury STRIPS,
Zero Coupon, 8/15/2019(d) 406,034
---------------
29,273,348
---------------
Wireless -- 1.2%
5,000,000 America Movil S.A.B. de C.V., Series L, 144A,
8.460%, 12/18/2036 (MXN) 470,890
225,000 Hanarotelecom, Inc., 144A,
7.000%, 2/01/2012 225,563
420,000 Nextel Communications, Inc., Series F,
5.950%, 3/15/2014 400,030
790,000 Sprint Capital Corp.,
6.875%, 11/15/2028(b) 751,972
109,000 Sprint Nextel Corp.,
6.000%, 12/01/2016 103,403
---------------
1,951,858
---------------
Wirelines -- 3.3%
25,000 AT&T, Inc.,
6.500%, 3/15/2029 24,062
30,000 AT&T, Inc.,
6.150%, 9/15/2034(b) 28,764
425,000 BellSouth Corp.,
6.000%, 11/15/2034(b) 397,793
475,000 Citizens Communications Co.,
7.125%, 3/15/2019 448,875
340,000 Embarq Corp.,
7.995%, 6/01/2036(b) 345,054
100,000 Level 3 Communications, Inc.,
2.875%, 7/15/2010(b) 108,875
5,000 Level 3 Communications, Inc.,
6.000%, 9/15/2009 4,850
820,000 Level 3 Communications, Inc.,
6.000%, 3/15/2010 786,175
105,000 Level 3 Financing, Inc., 144A,
8.750%, 2/15/2017 103,819
215,000 Qwest Capital Funding, Inc., Guaranteed Note,
6.500%, 11/15/2018 193,500
See accompanying notes to financial statements.
18
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount (++) Description Value (+)
- -------------------------------------------------------------------------------------------
Wirelines -- continued
$ 265,000 Qwest Capital Funding, Inc., Guaranteed Note,
6.875%, 7/15/2028(b) $ 231,544
15,000 Qwest Capital Funding, Inc., Guaranteed Note,
7.625%, 8/03/2021 14,325
315,000 Qwest Capital Funding, Inc.,
7.750%, 2/15/2031 296,887
130,000 Qwest Corp.,
6.875%, 9/15/2033(b) 121,875
235,000 Qwest Corp., Senior Note, 144A,
6.500%, 6/01/2017 223,837
59,000 Telecom Italia Capital,
6.000%, 9/30/2034(b) 53,154
122,000 Telecom Italia Capital,
6.375%, 11/15/2033 114,918
325,000 Telefonica Emisiones SAU, Guaranteed Note,
7.045%, 6/20/2036(b) 336,563
550,000 Telus Corp.,
4.950%, 3/15/2017 (CAD) 468,232
850,000 Verizon Communications, Inc.,
6.250%, 4/01/2037(b) 819,593
85,000 Verizon Global Funding Corp., Senior Note,
5.850%, 9/15/2035 77,962
30,000 Verizon Maryland, Inc., Series B, Senior Note,
5.125%, 6/15/2033 24,275
30,000 Verizon New York, Inc., Series B,
7.375%, 4/01/2032(b) 31,554
---------------
5,256,486
---------------
Total Bonds and Notes (Identified Cost $85,882,186) 84,335,014
---------------
Shares
- -------------------------------------------------------------------------------------------
Preferred Stocks -- 0.3%
Consumer Products -- 0.0%
625 Newell Financial Trust I(b) 30,781
---------------
Electric -- 0.1%
3,925 AES Trust III, Convertible 196,682
---------------
Independent Energy -- 0.1%
1,760 Chesapeake Energy Corp., Convertible(b) 196,020
---------------
Packaging & Containers -- 0.1%
1,550 Owens-Illinois, Inc., Convertible 65,488
---------------
Pipelines -- 0.0%
1,150 El Paso Energy Capital Trust I, Convertible 48,484
---------------
Total Preferred Stocks (Identified Cost $504,331) 537,455
---------------
Shares/
Principal
Amount(++)
- -------------------------------------------------------------------------------------------
Short-Term Investments -- 25.8%
39,924,194 State Street Securities Lending Quality Trust(f) 39,924,194
$ 1,073,142 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased
at $1,073,522 on 7/2/2007, collateralized by $900,000 U.S.
Treasury Bond 7.250% due 8/15/2022 valued at $1,104,750
including accrued interest 1,073,142
---------------
Total Short-Term Investments (Identified Cost $40,997,336) 40,997,336
---------------
Shares/
Principal
Amount(++) Description Value (+)
- --------------------------------------------------------------------------------------------------------
Total Investments -- 123.3%
(Identified Cost $199,103,979)(a) $ 195,626,523
Other assets less liabilities -- (23.3)% (36,958,736)
---------------
Net Assets -- 100% $ 158,667,787
===============
* Formerly IXIS Income Diversified Portfolio (See Note 8 of Notes to Financial
Statements.)
(++) Principal amount is in U.S. Dollars unless otherwise noted.
(+) See Note 2a of Notes to Financial Statements.
(++) Amount shown represents units. One unit represents a principal amount of 100.
(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 and return of capital included in dividends received from the Portfolio's
investments in REITs. Amortization of premium on debt securities is excluded for tax
purposes.):
At June 30, 2007, the net unrealized depreciation on investments based on a cost of
$199,171,400 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 $ 2,679,468
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (6,224,345)
---------------
Net unrealized depreciation $ (3,544,877)
===============
(b) All or a portion of this security was on loan to brokers at June
30, 2007.
(c) Variable rate security whose interest rate varies with changes in
a designated base rate (such as the prime interest rate) on a
specified date (such as coupon date or interest payment date).
(d) Treasury Inflation Protected Security (TIPS).
(e) All separate investments in United States Treasury Notes and
Bonds which have the same coupon rate have been aggregated
for the purpose of presentation in the Portfolio of Investments.
(f) Represents investment of securities 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 $9,431,169 or 5.9% of net assets.
MTN Medium Term Note
REITs Real Estate Investment Trusts
STRIPS Separate Trading of Registered Interest and Principal of Securities
BRL Brazilian Real
CAD Canadian Dollar
COP Colombian Peso
IDR Indonesian Rupiah
ISK Iceland Krona
JPY Japanese Yen
KRW South Korean Won
MXN Mexican Peso
MYR Malaysian Ringgit
NZD New Zealand Dollar
SGD Singapore Dollar
ZAR South African Rand
See accompanying notes to financial statements.
19
NATIXIS INCOME DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Treasuries 18.5%
Banks 7.8
REITs -- Apartments 4.4
REITs -- Office 3.8
Electric 3.8
REITs -- Regional Malls 3.6
Wirelines 3.3
REITs -- Industrial 3.0
REITs -- Shopping Centers 2.7
Sovereigns 2.6
REITs -- Hotels 2.0
Other, less than 2% each 42.0
See accompanying notes to financial statements.
20
NATIXIS MODERATE DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ------------------------------------------------------------------------------------
Common Stocks -- 69.8% of Net Assets
Aerospace & Defense -- 2.2%
2,050 Alliant Techsystems, Inc.(b)(c) $ 203,257
3,306 Boeing Co. (The) 317,905
3,300 DRS Technologies, Inc.(b) 188,991
7,149 Honeywell International, Inc. 402,346
2,050 L-3 Communications Holdings, Inc.(b) 199,650
7,600 Raytheon Co. 409,564
3,878 Rockwell Collins, Inc.(b) 273,942
---------------
1,995,655
---------------
Agriculture -- 0.3%
4,354 Monsanto Co. 294,069
---------------
Apparel -- 1.0%
5,239 Coach, Inc.(c) 248,276
5,373 Guess?, Inc.(b) 258,119
9,000 Onward Kashiyama Co., Ltd. (JPY) 114,981
2,752 Polo Ralph Lauren Corp.(b) 269,999
---------------
891,375
---------------
Athletic Footwear -- 0.6%
2,517 Adidas AG (EUR) 159,362
7,000 NIKE, Inc., Class B(b) 408,030
---------------
567,392
---------------
Auto Manufacturers -- 0.4%
230,000 Denway Motors, Ltd. (HKD) 107,952
1,339 Hyundai Motor Co. (KRW) 105,804
21,000 Isuzu Motors, Ltd. (JPY) 113,933
---------------
327,689
---------------
Auto Parts & Equipment -- 0.2%
2,950 Autoliv, Inc.(b) 167,766
---------------
Banks -- 3.3%
9,311 Banco Santander Central Hispano SA, ADR 171,136
30,354 Bangkok Bank PCL (THB) 107,261
1,568 Bank of Yokohama, Ltd., ADR 109,211
2,184 BNP Paribas, ADR 129,948
2,900 Comerica, Inc.(b) 172,463
3,221 Commerzbank AG (EUR) 154,717
2,009 DBS Group Holdings, Ltd., Sponsored ADR(b) 119,536
4,655 HBOS PLC (GBP) 92,122
1,279 HSBC Holdings PLC, Sponsored ADR 117,374
7,500 Huntington Bancshares, Inc.(b) 170,550
21,000 Joyo Bank, Ltd. (The) (JPY) 130,648
4,550 KeyCorp(b) 156,202
1,014 Kookmin Bank (KRW) 89,014
3,650 Marshall & Ilsley Corp.(b) 173,849
11,300 Mellon Financial Corp.(b) 497,200
258,000 PT Bank Mandiri (IDR) 89,236
6,678 Royal Bank of Scotland Group PLC (GBP) 84,886
11,509 Sumitomo Trust & Banking Co., Ltd. (The), Sponsored ADR 107,609
17,437 UniCredito Italiano SpA (EUR) 156,469
1,179 Westpac Banking Corp., Sponsored ADR(b) 128,487
---------------
2,957,918
---------------
Beverages -- 0.8%
4,300 Coca-Cola Co. (The) 224,933
8,600 Constellation Brands, Inc.(b)(c) 208,808
2,600 Diageo PLC, Sponsored ADR 216,606
2,927 Fomento Economico Mexicano, SAB de CV, Sponsored ADR 115,090
---------------
765,437
---------------
Shares Description Value (+)
- ----------------------------------------------------------------------------------------------
Biotechnology -- 0.3%
4,614 Celgene Corp.(b)(c) $ 264,521
---------------
Building Materials -- 0.3%
4,162 Cemex SAB de CV, Sponsored ADR(c) 153,578
4,200 JS Group Corp. (JPY) 85,279
---------------
238,857
---------------
Chemicals -- 1.4%
2,538 Ciba Specialty Chemicals AG, Sponsored ADR 82,510
9,100 Dow Chemical Co. (The)(b) 402,402
1,387 Lonza Group AG (CHF) 127,856
5,700 Lyondell Chemical Co.(b) 211,584
5,839 Mosaic Co. (The)(b)(c) 227,838
4,200 Sigma-Aldrich Corp.(b) 179,214
---------------
1,231,404
---------------
Commercial Services -- 0.6%
3,800 Apollo Group, Inc., Class A(b)(c) 222,034
42,000 Cosco Pacific, Ltd. (HKD) 109,845
4,800 R. R. Donnelley & Sons Co.(b) 208,848
---------------
540,727
---------------
Computers -- 5.1%
5,755 Apple, Inc.(c) 702,340
45,055 Dell, Inc.(c) 1,286,320
17,423 EMC Corp.(b)(c) 315,356
32,189 Hewlett-Packard Co. 1,436,273
3,250 International Business Machines Corp.(b) 342,063
6,700 Seagate Technology(b) 145,859
64,900 Sun Microsystems, Inc.(c) 341,374
---------------
4,569,585
---------------
Distribution & Wholesale -- 0.4%
10,637 Sumitomo Corp., Sponsored ADR(b) 191,466
2,700 WESCO International, Inc.(b)(c) 163,215
---------------
354,681
---------------
Diversified Financial Services -- 7.6%
14,442 American Express Co. 883,561
5,900 Capital One Financial Corp.(b) 462,796
15,358 Cattles PLC (GBP) 120,894
406 Chicago Mercantile Exchange Holdings, Inc. 216,950
3,350 CIT Group, Inc. 183,680
7,500 Citigroup, Inc. 384,675
1,561 Credit Suisse Group, Sponsored ADR 110,769
2,832 Franklin Resources, Inc. 375,155
2,257 Goldman Sachs Group, Inc. 489,205
1,876 IGM Financial, Inc. (CAD) 91,172
2,289 IntercontinentalExchange, Inc.(b)(c) 338,429
15,800 JPMorgan Chase & Co. 765,510
13,456 Man Group PLC (GBP) 164,558
2,937 MasterCard, Inc., Class A(b) 487,160
15,650 Morgan Stanley 1,312,722
4,824 Nomura Holdings, Inc. 93,682
2,700 Promise Co., Ltd. (JPY) 83,330
5,044 T. Rowe Price Group, Inc. 261,733
---------------
6,825,981
---------------
Electric -- 1.1%
3,500 Ameren Corp. 171,535
5,936 Companhia Energetica de Minas Gerais, Sponsored ADR 125,250
98,000 Datang International Power Generation Co., Ltd., Class H (HKD)(c) 151,402
3,500 Edison International(b) 196,420
See accompanying notes to financial statements.
21
NATIXIS MODERATE DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- -----------------------------------------------------------------
Electric -- continued
3,200 Integrys Energy Group, Inc.(b) $ 162,336
4,450 PPL Corp.(b) 208,215
---------------
1,015,158
---------------
Electrical Components & Equipment -- 0.9%
4,900 AMETEK, Inc.(b) 194,432
3,300 General Cable Corp.(b)(c) 249,975
3,500 Hubbell, Inc., Class B 189,770
1,003 Schneider Electric SA (EUR) 141,357
---------------
775,534
---------------
Electronics -- 0.2%
4,500 Arrow Electronics, Inc.(b)(c) 172,935
---------------
Food -- 1.3%
3,114 Carrefour SA (EUR) 219,751
4,600 Hormel Foods Corp. 171,810
3,400 J.M. Smucker Co. (The) 216,444
2,483 Loblaw Cos., Ltd. (CAD) 121,091
1,156 Nestle SA, Sponsored ADR 110,571
3,016 Royal Numico NV (EUR) 157,280
5,900 Smithfield Foods, Inc.(b)(c) 181,661
700 Supervalu, Inc. 32,424
---------------
1,211,032
---------------
Gas -- 0.1%
21,000 Osaka Gas Co., Ltd. (JPY) 78,116
---------------
Health Care - Capital Equipment -- 0.4%
7,246 Thermo Fisher Scientific, Inc.(b)(c) 374,763
---------------
Health Care - Products -- 2.2%
4,711 Baxter International, Inc. 265,418
2,600 Beckman Coulter, Inc.(b) 168,168
3,650 Cooper Cos., Inc. (The)(b) 194,618
2,900 Hillenbrand Industries, Inc.(b) 188,500
3,400 Kinetic Concepts, Inc.(b)(c) 176,698
8,700 Medtronic, Inc. 451,182
1,375 Smith & Nephew PLC, Sponsored ADR 85,291
4,960 St. Jude Medical, Inc.(c) 205,790
3,716 Stryker Corp.(b) 234,443
---------------
1,970,108
---------------
Health Care - Services -- 0.2%
4,500 Lincare Holdings, Inc.(b)(c) 179,325
---------------
Home Builders -- 0.4%
5,600 Lennar Corp., Class A(b) 204,736
6,500 Pulte Homes, Inc.(b) 145,925
---------------
350,661
---------------
Household Products & Wares -- 0.8%
3,550 Church & Dwight Co., Inc.(b) 172,033
4,500 Fortune Brands, Inc.(b) 370,665
1,600 Whirlpool Corp.(b) 177,920
---------------
720,618
---------------
Insurance -- 2.1%
4,100 Aflac, Inc. 210,740
2,650 Arch Capital Group, Ltd.(c) 192,231
3,903 Axa, Sponsored ADR(b) 167,985
4,000 Cincinnati Financial Corp.(b) 173,600
5,700 HCC Insurance Holdings, Inc.(b) 190,437
2,051 ING Groep NV, Sponsored ADR 90,182
2,700 Millea Holdings, Inc. (JPY) 110,960
Shares Description Value (+)
- -----------------------------------------------------------------------------
Insurance -- continued
29,926 Old Mutual PLC (GBP) $ 101,500
18,800 Progressive Corp. 449,884
3,900 Protective Life Corp.(b) 186,459
---------------
1,873,978
---------------
Internet -- 1.7%
3,659 Amazon.com, Inc.(b)(c) 250,312
13,119 eBay, Inc.(c) 422,170
1,564 Google, Inc., Class A(c) 818,566
---------------
1,491,048
---------------
Iron & Steel -- 0.2%
3,608 Evraz Group SA, GDR, 144A 148,289
---------------
Leisure Time -- 1.2%
13,900 Carnival Corp.(b) 677,903
6,900 Harley-Davidson, Inc.(b) 411,309
---------------
1,089,212
---------------
Machinery - Diversified -- 0.9%
2,583 Deere & Co. 311,871
3,146 Terex Corp.(c) 255,770
2,489 Textron, Inc. 274,064
---------------
841,705
---------------
Manufacturing -- 1.4%
3,700 Cooper Industries, Ltd., Class A(b) 211,233
2,100 Eaton Corp.(b) 195,300
7,200 Leggett & Platt, Inc.(b) 158,760
2,100 Parker Hannifin Corp.(b) 205,611
1,104 Siemens AG (EUR) 159,238
10,000 Tyco International, Ltd. 337,900
---------------
1,268,042
---------------
Media -- 3.9%
2,937 British Sky Broadcasting PLC, Sponsored ADR(b) 151,491
3,100 Gannett Co., Inc.(b) 170,347
3,365 Liberty Media Corp. - Capital, Series A(c) 395,993
4,641 McGraw-Hill Cos., Inc. (The) 315,959
40,600 Time Warner, Inc.(b) 854,224
20,800 Viacom, Inc., Class B(c) 865,904
3,280 Vivendi (EUR) 141,659
18,396 Walt Disney Co. (The)(b) 628,039
---------------
3,523,616
---------------
Metal Fabricate & Hardware -- 0.4%
3,225 Precision Castparts Corp. 391,386
---------------
Metals -- 0.9%
2,843 Allegheny Technologies, Inc.(b) 298,174
4,600 Cameco Corp.(b) 233,404
3,804 Freeport-McMoRan Copper & Gold, Inc.(b) 315,047
---------------
846,625
---------------
Mining -- 0.5%
3,511 BHP Billiton Ltd., Sponsored ADR(b) 209,782
4,728 Cia Vale do Rio Doce, Sponsored ADR 178,246
329 Mining and Metallurgical Co. Norilsk Nickel, ADR 73,038
---------------
461,066
---------------
Office & Business Equipment -- 0.4%
1,991 Canon, Inc., Sponsored ADR 116,752
12,300 Xerox Corp.(c) 227,304
---------------
344,056
---------------
See accompanying notes to financial statements.
22
NATIXIS MODERATE DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ------------------------------------------------------------------------
Oil & Gas -- 2.5%
4,250 Anadarko Petroleum Corp.(b) $ 220,957
5,800 Chesapeake Energy Corp.(b) 200,680
4,500 Cimarex Energy Co.(b) 177,345
2,103 Eni SpA, Sponsored ADR 152,152
2,054 Gazprom, Sponsored ADR 86,063
3,400 Hess Corp. 200,464
1,303 LUKOIL, Sponsored ADR 99,288
4,100 Newfield Exploration Co.(b)(c) 186,755
1,062 Petroleo Brasileiro SA, ADR 128,789
5,352 Southwestern Energy Co.(c) 238,164
2,002 Total SA, Sponsored ADR 162,122
6,601 XTO Energy, Inc.(b) 396,720
---------------
2,249,499
---------------
Oil & Gas Services -- 0.4%
4,296 Saipem SpA (EUR) 147,454
4,900 Superior Energy Services, Inc.(b)(c) 195,608
---------------
343,062
---------------
Pharmaceuticals -- 2.6%
2,082 AstraZeneca PLC, Sponsored ADR 111,345
12,824 Gilead Sciences, Inc.(b)(c) 497,187
2,921 GlaxoSmithKline PLC, Sponsored ADR 152,973
8,105 Merck & Co., Inc. 403,629
8,300 Mylan Laboratories, Inc.(b) 150,977
2,858 Novartis AG, ADR 160,248
11,942 Schering-Plough Corp. 363,514
7,000 Shionogi & Co., Ltd. (JPY) 114,274
1,600 Takeda Pharmaceutical Co., Ltd. (JPY) 103,440
5,423 Wyeth 310,955
---------------
2,368,542
---------------
Real Estate -- 0.8%
12,541 CB Richard Ellis Group, Inc., Class A(b)(c) 457,746
2,269 Jones Lang LaSalle, Inc.(b) 257,532
---------------
715,278
---------------
REITs - Health Care -- 0.2%
3,900 Ventas, Inc.(b) 141,375
---------------
REITs - Hotels -- 0.2%
3,700 Hospitality Properties Trust(b) 153,513
---------------
Restaurants -- 1.0%
18,100 McDonald's Corp. 918,756
---------------
Retail -- 4.2%
15,392 CVS Caremark Corp. 561,038
6,450 Daiei, Inc. (JPY)(c) 68,206
2,812 Folli - Follie SA (EUR) 114,177
7,600 Foot Locker, Inc.(b) 165,680
16,200 Home Depot, Inc. 637,470
6,871 Kohl's Corp.(c) 488,047
8,200 Limited Brands, Inc.(b) 225,090
3,600 Men's Wearhouse, Inc. (The)(b) 183,852
4,969 Nordstrom, Inc.(b) 254,015
2,550 Sherwin-Williams Co. (The)(b) 169,499
36,567 Signet Group PLC (GBP) 76,368
6,300 TJX Cos., Inc.(b) 173,250
13,600 Wal-Mart Stores, Inc. 654,296
---------------
3,770,988
---------------
Savings & Loans -- 0.5%
11,300 Washington Mutual, Inc.(b) 481,832
---------------
Shares Description Value (+)
- --------------------------------------------------------------------------------------------
Semiconductors -- 3.2%
53,300 Intel Corp. $ 1,266,408
7,395 NVIDIA Corp.(c) 305,487
216 Samsung Electronics Co., Ltd. (KRW) 132,333
3,134 STMicroelectronics NV 60,142
10,718 Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR 119,296
26,352 Texas Instruments, Inc. 991,626
--------------
2,875,292
--------------
Software -- 1.9%
9,577 Adobe Systems, Inc.(c) 384,516
5,670 Autodesk, Inc.(b)(c) 266,944
4,500 Fair Isaac Corp.(b) 180,540
4,942 Fidelity National Information Services, Inc.(b) 268,252
2,063 Infosys Technologies, Ltd., Sponsored ADR 103,934
13,690 Microsoft Corp. 403,444
2,742 SAP AG (EUR) 141,284
--------------
1,748,914
--------------
Telecommunications -- 4.6%
7,055 Alcatel-Lucent (EUR) 99,114
2,598 America Movil SAB de CV, Series L, ADR 160,894
2,700 Anixter International, Inc.(b)(c) 203,067
26,849 Cisco Systems, Inc.(c) 747,745
16,553 Corning, Inc.(c) 422,929
32,900 Motorola, Inc. 582,330
3,091 Neuf Cegetel (EUR)(c) 121,489
11,714 QUALCOMM, Inc. 508,271
44,200 Sprint Nextel Corp.(b) 915,382
5,621 Vodafone Group PLC, Sponsored ADR 189,034
11,600 Windstream Corp.(b) 171,216
--------------
4,121,471
--------------
Textiles -- 0.2%
2,100 Mohawk Industries, Inc.(b)(c) 211,659
--------------
Tobacco -- 0.2%
2,400 Loews Corp. - Carolina Group 185,448
--------------
Toys, Games & Hobbies -- 0.2%
3,672 Nintendo Co., Ltd., ADR 167,810
--------------
Transportation -- 1.3%
1,900 FedEx Corp. 210,843
8,500 Union Pacific Corp. 978,775
--------------
1,189,618
--------------
Water -- 0.1%
1,828 Suez SA, ADR(b) 104,781
--------------
Total Common Stocks (Identified Cost $54,318,516) 62,868,168
--------------
Principal
Amount
- --------------------------------------------------------------------------------------------
Bonds and Notes -- 29.4%
Asset Backed Securities -- 0.6%
$ 100,000 Citibank Credit Card Issuance Trust, Series 2003-A3, Class A3,
3.100%, 3/10/2010 98,465
277,000 Citibank Credit Card Issuance Trust, Series 2003-A6, Class A6,
2.900%, 5/17/2010 271,214
195,000 Countrywide Asset-Backed Certificates, Series 2006-S4, Class A3,
5.804%, 7/25/2034(d) 193,206
--------------
562,885
--------------
Banks -- 0.2%
150,000 JPMorgan Chase & Co.,
5.150%, 10/01/2015 142,634
--------------
See accompanying notes to financial statements.
23
NATIXIS MODERATE DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount Description Value (+)
- -----------------------------------------------------------------------------------------
Commercial Mortgage Backed Securities -- 1.8%
$ 300,000 GS Mortgage Securities Corp. II, Series 2006-GG8, Class A4,
5.560%, 11/10/2039 $ 293,450
300,000 JP Morgan Chase Commercial Mortgage Securities Corp.,
Series 2006-LDP7, Class A4,
6.066%, 4/15/2045(d) 301,814
190,000 LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A5,
4.739%, 7/15/2030 177,492
530,000 LB-UBS Commercial Mortgage Trust, Series 2007-C2, Class A2,
5.303%, 2/15/2040 522,482
300,000 LB-UBS Commercial Mortgage Trust, Series 2006-C4, Class A4,
6.097%, 6/15/2038(d) 302,187
---------------
1,597,425
---------------
Commercial Services -- 0.1%
50,000 Equifax, Inc.,
7.000%, 7/01/2037 50,437
---------------
Diversified Financial Services -- 3.7%
275,000 American General Finance Corp.,
5.375%, 10/01/2012(b) 271,342
140,000 Bear Stearns Cos., Inc.,
5.550%, 1/22/2017(b) 132,300
295,000 Capital One Bank,
6.500%, 6/13/2013 302,978
10,000 CIT Group, Inc.,
5.650%, 2/13/2017 9,473
275,000 CIT Group, Inc.,
5.800%, 7/28/2011(b) 274,281
10,000 CIT Group, Inc.,
5.850%, 9/15/2016(b) 9,638
130,000 Countrywide Financial Corp.,
6.250%, 5/15/2016(b) 127,673
600,000 General Electric Capital Corp., (MTN),
6.000%, 6/15/2012 610,701
365,000 HSBC Finance Corp.,
4.750%, 7/15/2013(b) 344,626
630,000 John Deere Capital Corp.,
4.500%, 8/22/2007 629,337
650,000 Morgan Stanley,
4.750%, 4/01/2014(b) 606,995
---------------
3,319,344
---------------
Electric -- 0.5%
330,000 Duke Energy Corp., Senior Note,
4.200%, 10/01/2008 324,867
120,000 Progress Energy, Inc.,
7.100%, 3/01/2011 125,743
---------------
450,610
---------------
Entertainment -- 0.3%
180,000 Time Warner, Inc.,
6.500%, 11/15/2036 170,905
130,000 Time Warner, Inc.,
7.625%, 4/15/2031 139,278
---------------
310,183
---------------
Government Sponsored -- 2.4%
950,000 Federal Home Loan Mortgage Corp.,
4.625%, 2/21/2008 945,548
1,230,000 Federal National Mortgage Association,
3.250%, 1/15/2008(b) 1,216,264
---------------
2,161,812
---------------
Principal
Amount Description Value (+)
- ------------------------------------------------------------------------
Insurance -- 0.1%
$ 130,000 Willis North America, Inc.,
6.200%, 3/28/2017 $ 127,295
---------------
Mortgage Related -- 16.0%
338,296 FHLMC,
4.000%, 5/01/2020 313,405
1,087,927 FHLMC,
4.500%, 6/01/2035 990,143
228,514 FHLMC,
5.500%, with various maturities to 2019(e) 225,596
24,890 FHLMC,
6.000%, 6/01/2035 24,784
812,641 FHLMC,
6.500%, with various maturities to 2035(e) 825,726
1,430,000 FHLMC,
5.500%, 9/01/2034 1,379,056
1,350,899 FNMA,
4.000%, with various maturities to 2020(e) 1,251,039
677,373 FNMA,
4.500%, 9/01/2035 616,578
3,571,668 FNMA,
5.000%, with various maturities to 2036(e) 3,354,498
2,978,215 FNMA,
5.500%, with various maturities to 2035(e) 2,924,224
283,887 FNMA,
6.058%, 2/01/2037(d) 286,086
929,578 FNMA,
6.500%, with various maturities to 2036(e) 944,551
1,225,000 FNMA,
6.000%, 12/01/2034 1,211,601
103,532 GNMA,
6.500%, 10/20/2034 105,502
---------------
14,452,789
---------------
Oil & Gas -- 0.1%
15,000 Talisman Energy, Inc.,
5.850%, 2/01/2037 13,240
50,000 Talisman Energy, Inc.,
6.250%, 2/01/2038(b) 46,338
---------------
59,578
---------------
Pharmaceuticals -- 0.3%
270,000 Cardinal Health, Inc.,
5.850%, 12/15/2017(b) 262,197
---------------
Pipelines -- 0.3%
290,000 ONEOK Partners LP,
6.150%, 10/01/2016 289,260
---------------
REITs - Apartments -- 0.3%
305,000 ERP Operating LP,
5.125%, 3/15/2016 287,973
---------------
Retail -- 0.1%
130,000 J.C. Penney Corp., Inc.,
6.375%, 10/15/2036 123,800
---------------
Technology -- 0.2%
140,000 Pitney Bowes, Inc., (MTN),
5.250%, 1/15/2037 132,190
---------------
Transportation -- 0.1%
135,000 CSX Corp.,
6.000%, 10/01/2036(b) 126,033
---------------
See accompanying notes to financial statements.
24
NATIXIS MODERATE DIVERSIFIED PORTFOLIO* -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Principal
Amount Description Value (+)
- ----------------------------------------------------------------------------------------------------
Treasuries -- 1.5%
$ 450,000 U.S. Treasury Bond,
4.500%, 2/15/2036(b) $ 407,461
335,000 U.S. Treasury Note,
4.250%, 11/15/2013(b) 322,516
125,000 U.S. Treasury Note,
4.500%, 2/15/2016(b) 120,478
265,000 U.S. Treasury Note,
4.875%, 2/15/2012 264,669
1,080,000 U.S. Treasury STRIPS,
Zero Coupon, 2/15/2036(b) 254,839
---------------
1,369,963
---------------
Wireless -- 0.3%
130,000 Sprint Capital Corp.,
6.875%, 11/15/2028 123,742
135,000 Vodafone Group PLC,
6.150%, 2/27/2037 125,589
---------------
249,331
---------------
Wirelines -- 0.5%
300,000 Embarq Corp.,
7.995%, 6/01/2036(b) 304,459
125,000 Telefonica Emisones SAU,
6.421%, 6/20/2016 126,744
---------------
431,203
---------------
Total Bonds and Notes (Identified Cost $27,123,035) 26,506,942
---------------
Shares/
Principal
Amount
- ----------------------------------------------------------------------------------------------------
Short-Term Investments -- 28.1%
22,298,551 State Street Securities Lending Quality Trust(f) 22,298,551
$ 2,990,381 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$2,991,440 on 7/2/2007, collateralized by $2,495,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $3,062,613
including accrued interest 2,990,381
---------------
Total Short-Term Investments (Identified Cost $25,288,932) 25,288,932
---------------
Total Investments -- 127.3% (Identified Cost $106,730,483)(a) 114,664,042
Other assets less liabilities -- (27.3)% (24,573,072)
---------------
Total Net Assets -- 100% $ 90,090,970
===============
* Formerly IXIS Moderate Diversified Portfolio (See Note 8 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.
Amortization of premium on debt securities is excluded for tax purposes.):
At June 30, 2007, the net unrealized appreciation on investments based on a cost of
$106,765,910 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 $ 9,200,648
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (1,302,516)
---------------
Net unrealized appreciation $ 7,898,132
===============
(b) All or a portion of this security was on loan to brokers at June 30, 2007.
(c) Non-income producing security.
(d) Variable rate security whose interest rate varies with changes in a designated base rate
(such as the prime interest rate) on a specified date (such as coupon date or interest
payment date).
(e) The Fund's investment in mortgage related securities of the Federal Home Loan
Mortgage Corporation, Federal National Mortgage Association and Government National
Mortgage Association are interests in separate pools of mortgages. All separate
investments in securities of each issuer which have the same coupon rate have been
aggregated for the purpose of presentation in the schedule of investments.
(f) 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
$148,289 or 0.2% of net assets.
ADR/GDR An American Depositary Receipt or Global Depositary Receipt is a certificate issued by a
U.S. bank representing the right to receive securities of the foreign issuer described. The
values of ADRs & GDRs are significantly influenced by trading on exchanges not located
in the United States.
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
MTN Medium Term Note
REITs Real Estate Investment Trusts
STRIPS Separate Trading of Registered Interest and Principal of Securities
CAD Canadian Dollar
CHF Swiss Franc
EUR Euro
GBP British Pound
HKD Hong Kong Dollar
IDR Indonesian Rupiah
JPY Japanese Yen
KRW South Korean Won
THB Thailand Bhat
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Mortgage Related 16.0%
Diversified Financial Services 11.3
Computers 5.1
Telecommunications 4.6
Retail 4.3
Media 3.9
Banks 3.5
Semiconductors 3.2
Pharmaceuticals 2.9
Oil & Gas 2.6
Government Sponsored 2.4
Insurance 2.2
Aerospace & Defense 2.2
Health Care--Products 2.2
Other, less than 2% each 32.8
See accompanying notes to financial statements.
25
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2007 (Unaudited)
Natixis Income Natixis Moderate
Diversified Portfolio* Diversified Portfolio**
---------------------- -----------------------
--------------------- ---------------------
ASSETS
Investments at cost $ 199,103,979 $ 106,730,483
Net unrealized appreciation
(depreciation) (3,477,456) 7,933,559
--------------------- ---------------------
Investments at value (a) 195,626,523 114,664,042
Cash -- 75,098
Foreign currency at value
(identified cost $0, $5,571) -- 5,583
Receivable for Fund shares sold 1,030,361 33,450
Receivable for securities sold 1,754,968 577,078
Dividends and interest receivable 1,355,927 275,021
Tax reclaims receivable 594 6,041
Securities lending income
receivable 3,953 1,755
--------------------- ---------------------
TOTAL ASSETS 199,772,326 115,638,068
--------------------- ---------------------
LIABILITIES
Collateral on securities loaned,
at value (Note 2) 39,924,194 22,298,551
Payable for securities purchased 877,965 2,638,037
Payable for Fund shares redeemed 138,524 483,560
Management fees payable (Note 4) 87,535 56,200
Deferred Trustees' fees (Note 4) 13,588 32,632
Administrative fees payable (Note
4) 9,879 8,419
Other accounts payable and
accrued expenses 52,854 29,699
--------------------- ---------------------
TOTAL LIABILITIES 41,104,539 25,547,098
--------------------- ---------------------
NET ASSETS $ 158,667,787 $ 90,090,970
===================== =====================
NET ASSETS CONSIST OF:
Paid-in capital $ 161,395,538 $ 78,442,118
Undistributed (overdistributed)
net investment income (loss) (133,105) (184,213)
Accumulated net realized gain on
investments and foreign
currency transactions 880,189 3,899,874
Net unrealized appreciation
(depreciation) on investments
and foreign currency
translations (3,474,835) 7,933,191
--------------------- ---------------------
NET ASSETS $ 158,667,787 $ 90,090,970
===================== =====================
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE:
Class A shares:
Net assets $ 68,413,839 $ 25,368,793
===================== =====================
Shares of beneficial interest 6,304,477 2,233,665
===================== =====================
Net asset value and redemption
price per share $ 10.85 $ 11.36
===================== =====================
Offering price per share
(100/[100-maximum sales
charge] of net asset value)
(Note 1) $ 11.36 $ 12.05
===================== =====================
Class C shares: (redemption price
per share is equal to net asset
value less any applicable
contingent deferred sales
charge) (Note 1)
Net assets $ 90,253,948 $ 64,722,177
===================== =====================
Shares of beneficial interest 8,340,938 5,717,893
===================== =====================
Net asset value and offering
price per share $ 10.82 $ 11.32
===================== =====================
(a) Including securities on loan
with market values of: $ 39,058,835 $ 21,808,758
===================== =====================
* Formerly IXIS Income Diversified Portfolio (See Note 8 of Notes to Financial
Statements).
** Formerly IXIS Moderate Diversified Portfolio (See Note 8 of Notes to
Financial Statements).
See accompanying notes to financial statements.
26
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2007 (Unaudited)
Natixis Income
Diversified Portfolio*
----------------------
---------------------
INVESTMENT INCOME
Dividends $ 1,070,687
Interest 2,261,257
Securities lending income (Note 2) 12,305
Less net foreign taxes withheld (1,572)
---------------------
3,342,677
---------------------
Expenses
Management fees (Note 4) 359,841
Service fees - Class A (Note 4) 71,068
Service and distribution fees - Class C (Note 4) 369,986
Trustees' fees and expenses (Note 4) 8,522
Administrative fees (Note 4) 45,032
Custodian fees and expenses 27,818
Transfer agent fees and expenses - Class A 22,871
Transfer agent fees and expenses - Class C 31,132
Audit fees 19,245
Legal fees 4,989
Shareholder reporting expenses 38,448
Registration fees 11,666
Expense waiver recapture - Class A (Note 4) 8,288
Expense waiver recapture - Class C (Note 4) 7,876
Miscellaneous expenses 4,036
---------------------
Total expenses 1,030,818
Less reimbursement/waiver (Note 4) (3,827)
---------------------
Net expenses 1,026,991
---------------------
Net investment income 2,315,686
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 909,940
Foreign currency transactions - net 3,050
Change in unrealized appreciation (depreciation) on:
Investments - net (6,752,535)
Foreign currency translations - net 2,045
---------------------
Net realized and unrealized gain (loss) on investments and foreign currency transactions (5,837,500)
---------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (3,521,814)
=====================
Natixis Moderate
Diversified Portfolio**
-----------------------
---------------------
INVESTMENT INCOME
Dividends $ 500,903
Interest 715,886
Securities lending income (Note 2) 13,347
Less net foreign taxes withheld (18,218)
---------------------
1,211,918
---------------------
Expenses
Management fees (Note 4) 347,574
Service fees - Class A (Note 4) 31,973
Service and distribution fees - Class C (Note 4) 335,538
Trustees' fees and expenses (Note 4) 8,556
Administrative fees (Note 4) 27,584
Custodian fees and expenses 50,787
Transfer agent fees and expenses - Class A 9,926
Transfer agent fees and expenses - Class C 25,168
Audit fees 23,269
Legal fees 1,440
Shareholder reporting expenses 25,368
Registration fees 14,943
Expense waiver recapture - Class A (Note 4) --
Expense waiver recapture - Class C (Note 4) --
Miscellaneous expenses 8,680
---------------------
Total expenses 910,806
Less reimbursement/waiver (Note 4) --
---------------------
Net expenses 910,806
---------------------
Net investment income 301,112
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net 4,155,613
Foreign currency transactions - net 128
Change in unrealized appreciation (depreciation) on:
Investments - net 986,641
Foreign currency translations - net (533)
---------------------
Net realized and unrealized gain (loss) on investments and foreign currency transactions 5,141,849
---------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 5,442,961
=====================
* Formerly IXIS Income Diversified Portfolio (See Note 8 of Notes to Financial
Statements).
** Formerly IXIS Moderate Diversified Portfolio (See Note 8 of Notes to
Financial Statements).
See accompanying notes to financial statements.
27
STATEMENTS OF CHANGES IN NET ASSETS
Natixis Income Diversified Portfolio* Natixis Moderate Diversified Portfolio**
-------------------------------------------- --------------------------------------------
Six Months Ended Six Months Ended
June 30, 2007 Year Ended June 30, 2007 Year Ended
(Unaudited) December 31, 2006 (Unaudited) December 31, 2006
--------------------- --------------------- --------------------- ---------------------
--------------------- --------------------- --------------------- ---------------------
FROM OPERATIONS:
Net investment
income $ 2,315,686 $ 736,227 $ 301,112 $ 965,259
Net realized gain
on investments
and foreign
currency
transactions 912,990 277,524 4,155,741 7,594,048
Net change in
unrealized
appreciation
(depreciation)
on investments
and foreign
currency
translations (6,750,490) 3,242,111 986,108 (637,439)
--------------------- --------------------- --------------------- ---------------------
Net increase
(decrease) in
net assets
resulting from
operations (3,521,814) 4,255,862 5,442,961 7,921,868
--------------------- --------------------- --------------------- ---------------------
FROM DISTRIBUTIONS
TO SHAREHOLDERS:
Net investment
income
Class A (1,167,028) (509,270) (180,132) (578,602)
Class C (1,274,818) (402,946) (220,316) (854,233)
Net realized
capital gain
Class A (20,685) (42,371) (145,954) (1,935,693)
Class C (27,276) (54,527) (382,791) (5,108,891)
--------------------- --------------------- --------------------- ---------------------
Total distributions (2,489,807) (1,009,114) (929,193) (8,477,419)
--------------------- --------------------- --------------------- ---------------------
NET INCREASE
(DECREASE) IN NET
ASSETS FROM
CAPITAL SHARE
TRANSACTIONS (NOTE
7) 78,535,395 77,785,017 (13,141,302) (36,902,749)
--------------------- --------------------- --------------------- ---------------------
Net increase
(decrease) in
net assets 72,523,774 81,031,765 (8,627,534) (37,458,300)
--------------------- --------------------- --------------------- ---------------------
NET ASSETS
Beginning of the
period 86,144,013 5,112,248 98,718,504 136,176,804
--------------------- --------------------- --------------------- ---------------------
End of the period $ 158,667,787 $ 86,144,013 $ 90,090,970 $ 98,718,504
===================== ===================== ===================== =====================
UNDISTRIBUTED
(OVERDISTRIBUTED)
NET INVESTMENT
INCOME (LOSS) $ (133,105) $ (6,945) $ (184,213) $ (84,877)
===================== ===================== ===================== =====================
* Formerly IXIS Income Diversified Portfolio (See Note 8 of Notes to Financial
Statements).
** Formerly IXIS Moderate Diversified Portfolio (See Note 8 of Notes to
Financial Statements).
See accompanying notes to financial statements.
28
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
Income (loss) from investment operations:
---------------------------------------
Net asset
value, Net Net realized
beginning investment and unrealized Total from
of income gain (loss) on investment
period (loss) (b) investments operations
---------- ---------- -------------- ----------
NATIXIS INCOME DIVERSIFIED PORTFOLIO*
Class A
6/30/2007(l) $ 11.15 $ 0.22 $ (0.30) $ (0.08)
12/31/2006 10.07 0.29 1.12 1.41
12/31/2005(h) 10.00 0.04 0.08 0.12
Class C
6/30/2007(l) 11.12 0.18 (0.30) (0.12)
12/31/2006 10.07 0.22 1.09 1.31
12/31/2005(h) 10.00 0.04 0.07 0.11
NATIXIS MODERATE DIVERSIFIED PORTFOLIO**
Class A
6/30/2007(l) $ 10.82 $ 0.07 $ 0.62 $ 0.69
12/31/2006 10.94 0.15 0.74 0.89
12/31/2005 10.70 0.07 0.30 0.37
12/31/2004(e) 10.00 0.03(i) 0.69 0.72
Class C
6/30/2007(l) 10.79 0.02 0.62 0.64
12/31/2006 10.90 0.07 0.75 0.82
12/31/2005 10.67 (0.01) 0.30 0.29
12/31/2004(e) 10.00 0.01(i) 0.67 0.68
Less distributions:
-------------------------------------------
Dividends Distributions
from from net
net investment realized Total
income capital gains distributions
-------------- ------------- -------------
NATIXIS INCOME DIVERSIFIED PORTFOLIO*
Class A
6/30/2007(l) $ (0.22) $ (0.00)(g) $ (0.22)
12/31/2006 (0.32) (0.01) (0.33)
12/31/2005(h) (0.05) -- (0.05)
Class C
6/30/2007(l) (0.18) (0.00)(g) (0.18)
12/31/2006 (0.25) (0.01) (0.26)
12/31/2005(h) (0.04) -- (0.04)
NATIXIS MODERATE DIVERSIFIED PORTFOLIO**
Class A
6/30/2007(l) $ (0.08) $ (0.07) $ (0.15)
12/31/2006 (0.20) (0.81) (1.01)
12/31/2005 (0.08) (0.05) (0.13)
12/31/2004(e) (0.02) -- (0.02)
Class C
6/30/2007(l) (0.04) (0.07) (0.11)
12/31/2006 (0.12) (0.81) (0.93)
12/31/2005 (0.01) (0.05) (0.06)
12/31/2004(e) (0.01) -- (0.01)
* Formerly IXIS Income Diversified Portfolio (See Note 8 of Notes to Financial
Statements).
** Formerly IXIS Moderate Diversified Portfolio (See Note 8 of Notes to
Financial Statements).
(a)A sales charge for Class A shares and a contingent deferred sales charge for
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 Portfolio'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.
(e)For the period July 15, 2004 (inception) through December 31, 2004.
(f)Computed on an annualized basis for periods less than one year.
(g)Amount rounds to less than $0.01 per share, if applicable.
See accompanying notes to financial statements.
29
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) (%) (c)(f) (%) (f) rate (%)
- ---------- ---------- ----------- --------- ---------- -------------- ---------
$ 10.85 (0.8) $ 68,414 1.15(k) 1.15(k) 3.97 20
11.15 14.2 37,117 1.30 1.25 2.72 52
10.07 1.2 5,074 9.57 1.25 3.61 2
10.82 (1.1) 90,254 1.90(k) 1.89(k) 3.21 20
11.12 13.3 49,027 2.05 2.00 2.02 52
10.07 1.1 39 10.31 2.00 3.25 2
$ 11.36 6.4 $ 25,369 1.42 N/A 1.19 41
10.82 8.4 26,978 1.31 1.31 1.38 89
10.94 3.5 47,908 1.59(j) 1.58(j) 0.62 88
10.70 7.2 25,660 3.51 1.65 0.71(i) 33
11.32 6.0 64,722 2.17 N/A 0.44 41
10.79 7.6 71,740 2.06 2.06 0.63 89
10.90 2.7 88,269 2.33(j) 2.32(j) (0.13) 88
10.67 6.8 47,173 4.26 2.40 0.12(i) 33
(h)For the period November 17, 2005 (inception) through December 31, 2005.
(i)Includes special one-time distribution from Microsoft Corp. Without this
distribution, net investment loss per share would have been $0.02 and
$(0.01) for Class A and Class C shares, respectively, and the ratio of net
investment loss to average net assets would have been 0.51% and (0.14)% for
Class A and Class C shares, respectively.
(j)Includes payment of expense waiver recapture of 0.22%.
(k)Includes payment of expense waiver recapture of 0.03% and 0.02% for Class A
and Class C, respectively.
(l)For the six months ended June 30, 2007 (Unaudited).
30
NOTES TO FINANCIAL STATEMENTS
June 30, 2007 (Unaudited)
1. Organization. Natixis Funds Trust I and Natixis Funds Trust III (formerly
IXIS Advisor Funds Trust I and 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 investment management 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 Diversified Portfolios of the Trusts;
the financial statements for the other funds of the Trusts are presented in
separate reports. The following Portfolios (individually, a "Portfolio" and
collectively, the "Portfolios") are included in this report:
Natixis Funds Trust I:
Natixis Income Diversified Portfolio (formerly IXIS Income Diversified
Portfolio) (the "Income Diversified Portfolio")
Natixis Funds Trust III:
Natixis Moderate Diversified Portfolio (formerly IXIS Moderate Diversified
Portfolio) (the "Moderate Diversified Portfolio")
Each Portfolio offers Class A and Class C shares. Class A shares of the
Moderate Diversified Portfolio are sold with a maximum front- end sales charge
of 5.75% and Class A shares of Income Diversified Portfolio are sold with a
maximum front-end sales charge of 4.50%. Class C shares do not pay a front-end
sales charge, pay higher ongoing 12b-1 fees than Class A shares and may be
subject to a contingent deferred sales charge ("CDSC") of 1.00% if those shares
are redeemed within one year.
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). 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 Portfolio in the preparation
of its financial statements. The Portfolios' 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 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 Market 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
Portfolios by a pricing service recommended by the investment adviser and
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 Portfolios may be valued on 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
Portfolios' subadvisers 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 Portfolios 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 equity
securities, the Portfolios 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 Portfolios calculates 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 Portfolio 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 Portfolio.
c. Foreign Currency Translation. The books and records of the Portfolios 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.
31
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
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 Portfolios'
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 Portfolio 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 Portfolio 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. Each Portfolio 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 Portfolio'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 Portfolios'
Statements of Assets and Liabilities. The U.S. dollar value of the currencies a
Portfolio has committed to buy or sell represents the aggregate exposure to
each currency a Portfolio 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 Portfolio as a
separate entity for federal income tax purposes. Each Portfolio 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 Portfolio'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 Portfolios.
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.
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 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 paydowns on
mortgage-backed securities, net operating losses and premium amortization
accruals. 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, wash
sales, distributions from Real Estate Investment Trusts ("REITs"), gains
realized from passive foreign investment companies, and premium amortization.
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
---- ------ ------------- -----
Income Diversified Portfolio $ 919,018 $ 90,096 $1,009,114
Moderate Diversified Portfolio 3,620,095 4,857,324 8,477,419
g. Repurchase Agreements. Each Portfolio, through its custodian, receives
delivery of the underlying securities collateralizing repurchase agreements. It
is each Portfolio'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
32
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
the collateral is held at the custodian bank in a segregated account for the
benefit of the Portfolio 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 Portfolio's
ability to dispose of the underlying securities.
h. Securities Lending. The Portfolios have entered into an agreement with State
Street Bank and Trust Company ("State Street Bank"), as agent of the
Portfolios, 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 Portfolios may bear the risk of loss with
respect to the investment of the collateral. The Portfolios 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 Portfolios
and State Street Bank as lending agent.The market value of securities on loan
to borrowers and the value of collateral held by the Portfolios with respect to
such loans at June 30, 2007 were as follows:
Market Value of
Fund Securities on Loan Value of Collateral
---- ------------------ -------------------
Income Diversified Portfolio $39,058,835 $39,924,194
Moderate Diversified Portfolio 21,808,758 22,298,551
i. Delayed Delivery Commitments. Each Portfolio may purchase or sell securities
on a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered and
paid for are fixed at the time the transaction is negotiated. Losses may arise
due to changes in the market value of the underlying securities or if the
counterparty does not perform under the contract. Collateral consisting of
liquid securities or cash and cash equivalents is maintained in an amount at
least equal to these commitments with the custodian.
j. 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 Portfolios. Additionally, in the normal
course of business, the Portfolios enter into contracts with service providers
that contain general indemnification clauses. The Portfolios' maximum exposure
under these arrangements is unknown as this would involve future claims that
may be made against the Portfolios that have not yet occurred. However, based
on experience, the Portfolios expect the risk of loss to be remote.
k. New Accounting Pronouncements. In September, 2006, Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), was issued
and is effective for fiscal years beginning after November 15, 2007. FAS 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 FAS 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 and
including paydowns) were as follows:
U.S. Government and
Agency Securities Other Securities
- ---------------------- -----------------------
Fund Purchases Sales Purchases Sales
---- --------- ----- --------- -----
Income Diversified Portfolio $13,612,219 $5,011,740 $92,193,048 $19,740,662
Moderate Diversified Portfolio 9,151,947 7,270,163 28,537,779 40,954,169
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 Portfolio. Under the terms of the management agreements, each
Portfolio pays a management fee at the following annual rates, calculated daily
and payable monthly, based on each Portfolio's average daily net assets:
Percentage of Average
Daily Net Assets
- --------------------
First Over
Fund $1 billion $1 billion
---- ---------- ----------
Income Diversified Portfolio 0.55% 0.50%
Moderate Diversified Portfolio 0.75% 0.70%
33
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
Effective at the close of business on August 3, 2007, the Moderate Diversified
Portfolio will pay a management fee at the following rates:
Percentage of Average
Daily Net Assets
- --------------------
First Over
Fund $1 billion $1 billion
---- ---------- ----------
Moderate Diversified Portfolio 0.70% 0.65%
Natixis Advisors has entered into subadvisory agreements for each Portfolio as
listed below.
Income Diversified Portfolio AEW Management and Advisors, L.P. ("AEW")
Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Moderate Diversified Portfolio Dreman Value Management, LLC ("Dreman")
Hansberger Global Investors, Inc. ("Hansberger")
Harris Associates, L.P. ("Harris Associates")
Loomis Sayles
On June 1, 2007, the Board of Trustees of Natixis Advisor Funds Trust III
approved the termination of the interim subadvisory agreement among the Trust,
on behalf of Natixis Moderate Diversified Portfolio, Natixis Advisors and
Hansberger. Effective at the close of business on August 3, 2007, the segment
of the Portfolio subadvised by Hansberger will be advised by Natixis Advisors,
through its division Active Investment Advisors without a subadviser.
Payments to Natixis Advisors are reduced in the amount of payments to the
subadvisors. Natixis Advisors voluntarily agreed to waive a portion of the
management fee it retains for the Income Diversified Portfolio after payment to
subadvisers.
Natixis Advisors has given binding undertakings to the Portfolios to defer its
management fees, and/or reimburse certain expenses associated with these
Portfolios 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 C
---- ------- -------
Income Diversified Portfolio 1.25% 2.00%
Moderate Diversified Portfolio 1.45% 2.20%
For the six months ended June 30, 2007, the management fees and waivers of
management fees for each Portfolio were as follows:
Percentage of
Average Daily Net
Gross Waiver of Net Assets
- Management Management Management ----------------
Fund Fee Fee Fee Gross Net
---- ---------- ---------- ---------- ----- ---
Income Diversified Portfolio $359,841 $3,827 $356,014 0.55% 0.54%
Moderate Diversified Portfolio 347,574 -- 347,574 0.75% 0.75%
For the six months ended June 30, 2007, no expenses have been reimbursed to the
Portfolios.
Natixis Advisors is 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 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 C Total
---- ------- ------- -----
Income Diversified Portfolio $8,288 $7,876 $16,164
34
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
Certain officers and directors of Natixis Advisors and its affiliates are also
Trustees of the Portfolios. Natixis Advisors, Hansberger, Harris Associates,
Loomis Sayles and AEW 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 Portfolios and has subcontracted with State Street Bank to
serve as sub-administrator. Natixis Advisors is a wholly-owned subsidiary of
Natixis US. Pursuant to an agreement among Natixis Funds Trust I, Natixis Funds
Trust II (formerly IXIS Advisor 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, 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 sub-advisers 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
---- ----
Income Diversified Portfolio $45,032
Moderate Diversified Portfolio $27,584
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 Group. Pursuant to this agreement, Natixis Distributors serves as principal
underwriter of the Portfolios.
Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service
Plan relating to each Portfolio's Class A shares (the "Class A Plan") and a
Service and Distribution Plan relating to each Portfolio's Class C shares (the
"Class C Plan").
Under the Class A Plan, each Portfolio pays Natixis Distributors a monthly
service fee at the annual rate not to exceed 0.25% of the average daily net
assets attributable to the Portfolio'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 C Plan, each Portfolio pays Natixis Distributors a monthly
service fee at the annual rate of 0.25% of the average daily net assets
attributable to the Portfolio's Class C shares, as compensation for services
provided and expenses incurred by Natixis Distributors in providing personal
services to investors in Class C shares and/or the maintenance of shareholder
accounts.
Also under the Class C Plan, each Portfolio pays Natixis Distributors a monthly
distribution fee at the annual rate of 0.75% of the average daily net assets
attributable to the Portfolio's Class C shares, as compensation for services
provided and expenses incurred by Natixis Distributors in connection with the
marketing or sale of Class C shares.
For the six months ended June 30, 2007, the Portfolios paid the following
service and distribution fees:
Service Fee Distribution Fee
- ---------------- ----------------
Fund Class A Class C Class C
---- ------- ------- -------
Income Diversified Portfolio $71,068 $277,490 $92,496
Moderate Diversified Portfolio 31,973 251,654 83,884
35
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
d. Commissions. The Portfolios have been informed that commissions (including
CDSCs) on Portfolio shares paid to Natixis Distributors by investors in shares
of the Portfolios during the six months ended June 30, 2007 were as follows:
Fund Commission
---- ----------
Income Diversified Portfolio $27,211
Moderate Diversified Portfolio 4,084
e. Trustees Fees and Expenses. The Portfolios do not pay any compensation
directly to their officers or Trustees who are directors, officers or employees
of Natixis Advisors, Natixis Distributors, 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 Portfolio 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 Portfolios until distributed in accordance with the Plan.
5. Line of Credit. Each Portfolio, 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 Portfolio 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 Portfolios based on their average daily
unused portion of the line of credit. For the six months ended June 30, 2007,
the Portfolios had no borrowings under this agreement.
6. Broker Commission Recapture. Each Portfolio 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 Portfolios
under such agreements and are included in realized gains in the Statements of
Operations. For the six months ended June 30, 2007, amounts rebated under these
agreements were as follows:
Fund Rebates
---- -------
Income Diversified Portfolio $ 319
Moderate Diversified Portfolio 2,864
7. Capital Shares. Each Portfolio 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
------------------------------------
Income Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ----------------- -----------------
Class A
Issued from the sale of shares 4,191,670 $ 47,655,996
Issued in connection with the reinvestment of distributions 58,093 647,106
----------------- -----------------
4,249,763 48,303,102
Redeemed (1,273,894) (14,232,318)
----------------- -----------------
Net change 2,975,869 $ 34,070,784
----------------- -----------------
Class C
Issued from the sale of shares 4,180,980 $ 47,224,937
Issued in connection with the reinvestment of distributions 30,112 335,125
----------------- -----------------
4,211,092 47,560,062
Redeemed (277,105) (3,095,451)
----------------- -----------------
Net change 3,933,987 $ 44,464,611
----------------- -----------------
Increase (decrease) from capital share transactions 6,909,856 $ 78,535,395
================= =================
Year Ended
December 31, 2006
-----------------------------------
Income Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 2,937,015 $ 31,558,801
Issued in connection with the reinvestment of distributions 16,837 182,050
---------------- -----------------
2,953,852 31,740,851
Redeemed (129,023) (1,389,673)
---------------- -----------------
Net change 2,824,829 $ 30,351,178
---------------- -----------------
Class C
Issued from the sale of shares 4,465,827 $ 48,112,171
Issued in connection with the reinvestment of distributions 7,732 83,528
---------------- -----------------
4,473,559 48,195,699
Redeemed (70,456) (761,860)
---------------- -----------------
Net change 4,403,103 $ 47,433,839
---------------- -----------------
Increase (decrease) from capital share transactions 7,227,932 $ 77,785,017
================ =================
36
NOTES TO FINANCIAL STATEMENTS (continued)
June 31, 2007 (Unaudited)
Six Months Ended
June 30, 2007
-----------------------------------
Moderate Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 191,544 $ 2,159,125
Issued in connection with the reinvestment of distributions 9,735 109,170
---------------- -----------------
201,279 2,268,295
Redeemed (460,363) (5,123,861)
---------------- -----------------
Net change (259,084) $ (2,855,566)
---------------- -----------------
Class C
Issued from the sale of shares 258,013 $ 2,887,559
Issued in connection with the reinvestment of distributions 5,932 66,566
---------------- -----------------
263,945 2,954,125
Redeemed (1,197,664) (13,239,861)
---------------- -----------------
Net change (933,719) $ (10,285,736)
---------------- -----------------
Increase (decrease) from capital share transactions (1,192,803) $ (13,141,302)
================ =================
Year Ended
December 31, 2006
-----------------------------------
Moderate Diversified Portfolio Shares Amount
- -------------------------------------------------------------- ---------------- -----------------
Class A
Issued from the sale of shares 437,927 $ 4,810,568
Issued in connection with the reinvestment of distributions 74,265 799,936
---------------- -----------------
512,192 5,610,504
Redeemed (2,398,348) (26,497,879)
---------------- -----------------
Net change (1,886,156) $ (20,887,375)
---------------- -----------------
Class C
Issued from the sale of shares 1,242,388 $ 13,607,078
Issued in connection with the reinvestment of distributions 51,743 555,646
---------------- -----------------
1,294,131 14,162,724
Redeemed (2,736,976) (30,178,098)
---------------- -----------------
Net change (1,442,845) $ (16,015,374)
---------------- -----------------
Increase (decrease) from capital share transactions (3,329,001) $ (36,902,749)
================ =================
8. Subsequent Events. Effective August 1, 2007, the name of the adviser to the
Portfolios changed from IXIS Asset Management Advisors, L.P. to Natixis Asset
Management Advisors L.P. and the name of the Portfolios' distributor changed
from IXIS Asset Management Distributors, L.P. to Natixis Distributors, L.P.
Effective August 6, 2007, IXIS Advisor Funds Trust I and IXIS Advisor Funds
Trust III were renamed Natixis Funds Trust I and Natixis Funds Trust III,
respectively, and the names of IXIS Income Diversified Portfolio and IXIS
Moderate Diversified Portfolio changed to Natixis Income Diversified Portfolio
and Natixis Moderate Diversified Portfolio, respectively.
Effective August 3, 2007, Active Investment Advisors, a division of Natixis
Asset Management Advisors, L.P., replaced Hansberger Global Investors, Inc. as
the manager of the international discipline of Natixis Moderate Diversified
Portfolio.
9. Shareholder Meeting. At a special shareholders' meeting held on January 19,
2007, shareholders of Natixis Funds Trust III, of which Natixis Moderate
Diversified Portfolio is a series, considered the following proposal:
To approve a new subadvisory agreement between Natixis Funds Trust III
(formerly IXIS Advisor Funds Trust III), on behalf of the Natixis Moderate
Diversified Portfolio (formerly, IXIS Moderate Diversified Portfolio), and
Hansberger Global Investors, Inc.
Votes For Votes Against Abstained Votes
--------- ------------- ---------------
3,692,269 274,031 275,455
With respect to this proposal, the meeting was adjourned six times but,
ultimately, there were insufficient votes to pass the proposal.
37
[LOGO]
NATIXIS
FUNDS SEMIANNUAL REPORT
June 30, 2007
IXIS Equity Diversified Portfolio
Dreman Value Management, LLC
Hansberger Global Investors, Inc.
Harris Associates, L.P.
Loomis, Sayles & Company, L.P.
TABLE OF CONTENTS
Management Discussion and Performance........ page 1
Portfolio of Investments..................... page 9
Financial Statements......................... page 13
IXIS EQUITY DIVERSIFIED PORTFOLIO
PORTFOLIO PROFILE
Objective:
Seeks long-term capital appreciation
- --------------------------------------------------------------------------------
Strategy:
Features U.S. growth and value as well as international investments through a
diversified portfolio of complementary equity investment disciplines from
specialized money managers
- --------------------------------------------------------------------------------
Inception Date:
January 31, 2005
- --------------------------------------------------------------------------------
Subadvisors:
Dreman Value Management, LLC
Hansberger Global Investors, Inc.
Harris Associates, L.P.
Loomis, Sayles & Company, L.P.
- --------------------------------------------------------------------------------
Symbols:
Class A AEDPX
Class C CEDPX
- --------------------------------------------------------------------------------
What You Should Know:
Growth stocks focus on future expectations of a security. The portfolio may be
exposed to greater volatility if the expectations are not met. Value stocks can
fall out of favor and underperform growth stocks during certain market
conditions. Foreign investments involve unique risks, such as currency
fluctuations, differing political and economic conditions, and different
accounting standards.
Management Discussion
- --------------------------------------------------------------------------------
Despite rising oil prices and fluctuating interest rates, equity markets in
both developed and emerging markets delivered relatively strong results for the
first half of 2007. While equity prices generally rose across the board,
returns overseas, particularly in emerging markets, were better than those in
the United States. For the six months ended June 30, 2007, the total return on
Class A shares of IXIS Equity Diversified Portfolio was 8.66% at net asset
value, including $0.09 in capital gains reinvested during the period. The
portfolio outperformed its benchmark, S&P 500 Index, which returned 6.96% for
the period. Bear in mind that this portfolio includes international equities
not present in the index. The fund's return was also slightly above the 8.13%
average return on the funds in Morningstar's Large Growth category.
IXIS Equity Diversified Portfolio is composed of four segments, each managed by
a separate advisor and each emphasizing a different equity class. This gives
shareholders access to a broad range of growth and value stocks both in the
United States and overseas. Mid-cap value companies are the focus of the Dreman
Mid Cap Value Discipline. Hansberger International Value Discipline looks
beyond U.S. borders for small-, mid- and large-cap companies that appear to be
undervalued. Harris Associates Large Cap Value Discipline seeks undervalued
stocks of larger companies, while Loomis Sayles Large Cap Growth Discipline
focuses on large-cap growth stocks.
DREMAN SEEKS FINANCIALLY STRONG COMPANIES THAT ARE TEMPORARILY OUT OF FAVOR
During the first half of 2007, Dreman Value Management's segment benefited from
its emphasis on consumer staples, energy and healthcare. The segment also
benefited from its relatively small position in financial stocks, including
real estate investment trusts (REITs) and thrift institutions, which
underperformed. Dreman believes the economy is in the late stages of a strong
economic cycle, which is unlikely to favor materials and telecommunications
services. Consequently, this segment was underweight in these sectors, which
hurt relative performance because they continued to rally. Top-performing
individual stocks included General Cable, which produces aluminum, copper and
fiber optic cable. The company benefited from increased product demand as
utility and telecommunications companies invested in infrastructure
development. Tesoro Corporation, an oil and gas refining company, was also a
top stock, as rising gasoline prices caused margins to widen. Electronics
wholesaler Avnet continued to be a positive contributor as its semiconductor
distribution business remained strong. Seagate Technology, Mylan Laboratories,
and NovaStar Financial were among the worst performers. Seagate remains in the
segment because Dreman believes the stock is undervalued in light of the
long-term growth prospects for its disk drive business. The price of Mylan
stock declined after the company purchased Merck's generic drug business for
what was perceived as too high a price, but Dreman believes the purchase gives
the company a global platform on which to grow. NovaStar Financial was active
in the subprime mortgage lending business and was sold.
HANSBERGER SOUGHT ATTRACTIVE INVESTMENTS OVERSEAS
Hansberger Global Investors' segment benefited from strong economic growth and
robust merger and acquisition activity overseas. A relatively large commitment
to emerging-market equities and allocations to Europe and Japan had a positive
influence on performance. Canadian holdings also contributed. In terms of
sectors, utilities strongly outperformed, including Datang International Power
in China and Companhia Energetica de Minas Gerais (CEMIG) in Brazil, both of
which delivered double-digit returns. Telecommunications service companies
aided results, led by Vodafone Group in the United Kingdom. Holdings in
information technology were also positive. The best performing individual
stocks were in the materials sector, including BHP Billiton in Britain,
Companhia Vale do Rio Doce (CVRD) in Brazil, and Evraz Group in Russia. These
mining companies benefited from strong demand
1
IXIS EQUITY DIVERSIFIED PORTFOLIO
Management Discussion
- --------------------------------------------------------------------------------
for commodities, especially from China and India, and from rising prices for
base metals worldwide. The segment's weakest region was Japan. Daiei Inc., a
general merchandise and supermarket retailer, declined on disappointing
earnings. The stock remains in the portfolio because Hansberger believes
consumer spending in Japan should pick up. Shares of Shionogi & Co., a Japanese
pharmaceutical company, were also off for the period, as sales of its
cholesterol-lowering drug Crestor slumped outside of Japan. Hansberger is
encouraged by the long-term prospects for the firm's pipeline of new
medications. However, they sold Nissan Motor Company, which declined on slower
revenue growth and lower margins.
HARRIS ASSOCIATES SOUGHT DOMINANT BUSINESSES SELLING AT A DISCOUNT
Harris Associates emphasized consumer-oriented sectors, including technology
and financials, but had less exposure to utilities, and materials. Stock
selection in technology and industrials contributed to performance. Although
the segment's emphasis on housing may have been premature, Harris Associates
believes the industry will stabilize and that the stocks they selected should
provide attractive returns over time. A lack of exposure to energy companies
and an underweight in the materials sector had a negative impact on results.
Top performing individual securities included Union Pacific, Intel and
McDonald's. Union Pacific's strength came from an operational turnaround,
vigorous demand for coal hauling, and a strong freight business, all of which
improved revenues. Intel reported better-than-expected second quarter earnings
on 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, and Harris Associates
believes it should benefit from an expansion of company-owned restaurants in
Europe. Harley-Davidson, Pulte Homes and Lennar Corporation were the weakest
performers. Harley-Davidson declined on concerns that consumers will cut back
on discretionary spending and because of a strike at one of the company's
manufacturing plants. Both Pulte Homes and Lennar were hurt by continued
weakness in the U.S. housing market. Harris Associates continues to view all
three as attractive investments and they remain in the portfolio.
LOOMIS SAYLES LARGE CAP GROWTH DISCIPLINE EMPHASIZED LARGE COMPANIES WITH
PRODUCT LEADERSHIP
Investments in the materials, financials and technology sectors had the
greatest positive impact on performance. In materials, mining company
Freeport-McMoRan outperformed as supply and demand favored copper producers and
on speculation that the company might become a buyout target. Precision
Castparts benefited from a surge in its commercial aerospace business, and
shares of Monsanto, an agricultural products company, rose on positive earnings
reports. Relatively strong earnings also contributed to superior results for
MasterCard and Goldman Sachs in the financials sector. Shares of commercial
real estate company CB Richard Ellis rose on news of rising rents and declining
vacancies. In the technology area, Apple gained strength on expectations for
the rollout of the iPhone and its iTV services. Strong iPod and iMac sales also
influenced Apple's share price. Google shares rose as internet companies
reported better-than-expected earnings. The utilities sector was the weakest
group. Disappointments among individual holdings included cable communications
company Comcast Corporation and security software maker Symantec, both of which
declined when their earnings failed to meet analysts' expectations; and Network
Appliance, a storage technology company, which announced a fiscal outlook that
fell below expectations. Shares of pharmaceutical company Johnson & Johnson
slid when the Food & Drug Administration issued a warning for its anemia drug,
Procrit. All four were sold.
Special Note: IXIS Equity Diversified Portfolio was liquidated effective August
3, 2007.
2
IXIS EQUITY 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, an 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]
January 31, 2005 (Inception) through June 30, 2007
Net Asset Maximum Sales S&P 500
Month End Value/1/ Charge/2/ Index/4/
- --------- -------- --------- --------
1/31/2005 $10,000 $ 9,425 $10,000
2/28/2005 10,080 9,500 10,210
3/31/2005 9,889 9,321 10,030
4/30/2005 9,610 9,057 9,839
5/31/2005 9,959 9,387 10,152
6/30/2005 10,080 9,500 10,167
7/31/2005 10,430 9,830 10,545
8/31/2005 10,310 9,717 10,449
9/30/2005 10,450 9,849 10,533
10/31/2005 10,310 9,717 10,358
11/30/2005 10,759 10,141 10,750
12/31/2005 10,829 10,207 10,753
1/31/2006 11,169 10,527 11,038
2/28/2006 11,129 10,489 11,068
3/31/2006 11,330 10,678 11,206
4/30/2006 11,369 10,715 11,356
5/31/2006 10,839 10,216 11,029
6/30/2006 10,820 10,198 11,044
7/31/2006 10,740 10,122 11,112
8/31/2006 10,940 10,311 11,377
9/30/2006 11,249 10,602 11,670
10/31/2006 11,599 10,932 12,050
11/30/2006 11,809 11,130 12,279
12/31/2006 11,971 11,282 12,452
1/31/2007 12,289 11,583 12,640
2/28/2007 12,065 11,372 12,393
3/31/2007 12,172 11,472 12,531
4/30/2007 12,639 11,912 13,087
5/31/2007 13,117 12,363 13,543
6/30/2007 13,005 12,258 13,318
Average Annual Total Returns -- June 30, 2007
SINCE
6 MONTHS 1 YEAR INCEPTION
CLASS A (Inception 1/31/05)
Net Asset Value/1/ 8.66% 20.23% 11.53%
With Maximum Sales Charge/2/ 2.39 13.31 8.82
CLASS C (Inception 1/31/05)
Net Asset Value/1/ 8.28 19.43 10.75
With CDSC/3/ 7.28 18.43 10.75
- ------------------------------------------------------------------
SINCE
COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR INCEPTION/7/
S&P 500 Index/4/ 6.96% 20.59% 12.59%
Morningstar Large Growth Fund Avg./5/ 8.13 17.17 10.76
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.
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 97.5 93.8
- ------------------------------------------------------
Short-Term Investments and Other 2.5 6.2
- ------------------------------------------------------
% of Net Assets as of
LARGEST HOLDINGS 6/30/07 12/31/06
- ------------------------------------------------------
Hewlett-Packard Corp. 2.1 1.3
- ------------------------------------------------------
Dell, Inc. 2.0 1.4
- ------------------------------------------------------
Intel Corp. 2.0 1.7
- ------------------------------------------------------
Morgan Stanley 1.9 2.0
- ------------------------------------------------------
Union Pacific Corp. 1.6 1.4
- ------------------------------------------------------
Texas Instruments, Inc. 1.5 0.7
- ------------------------------------------------------
American Express Co. 1.4 1.0
- ------------------------------------------------------
Viacom, Inc. Class B 1.4 1.4
- ------------------------------------------------------
Time Warner, Inc. 1.4 1.5
- ------------------------------------------------------
Sprint Nextel Corp. 1.4 0.3
- ------------------------------------------------------
% of Net Assets as of
FIVE LARGEST INDUSTRIES 6/30/07 12/31/06
- ------------------------------------------------------
Diversified Financial Services 10.4 10.9
- ------------------------------------------------------
Computers 6.7 6.1
- ------------------------------------------------------
Telecommunications 6.3 3.2
- ------------------------------------------------------
Retail 5.8 5.4
- ------------------------------------------------------
Media 5.6 7.1
- ------------------------------------------------------
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 1.67% 1.50%
- -------------------------------------------------
C 2.44% 2.25%
- -------------------------------------------------
NOTES TO CHARTS
/1/Does not include a sales charge.
/2/Includes the maximum sales charge of 5.75%.
/3/Class C share performance assumes a 1.00% contingent deferred sales charge
("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 Growth Fund Average is the average performance without
sales charges of funds with similar current investment objectives, as
calculated by Morningstar, Inc.
/6/Fund performance has been increased by expense waivers, without which
performance would have been lower.
/7/The since-inception comparative performance figures shown for Class A and C
shares were calculated from 2/1/05.
/8/Before waivers and reimbursements.
/9/After waivers and reimbursements. Expense reductions are contractual and are
set to expire 4/30/08.
3
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 1-800-225-5478; 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, D.C. 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
4
UNDERSTANDING YOUR FUND'S EXPENSES
As a mutual fund shareholder, you incur different costs: transaction costs,
including sales charges (loads) on purchases, and certain exchange fees, and
ongoing costs, including management fees, sales and distribution fees (12b-1
fees), and other fund expenses. In addition, the 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 exceptions may apply. These costs are
described in more detail in the fund's prospectus. The example below is
intended to help you understand the ongoing costs of investing in the fund and
help you compare these with the ongoing costs of investing in other mutual
funds.
The first line in the table for 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 = 8.6) 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 for 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 or exchange fees.
Therefore, the second line in the table 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*
IXIS EQUITY DIVERSIFIED PORTFOLIO 1/1/2007 6/30/2007 1/1/2007 - 6/30/2007
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,086.60 $7.76
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,017.36 $7.50
- ------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,082.80 $11.62
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $1,000.00 $1,013.64 $11.23
*Expenses are equal to the fund's annualized expense ratio (after
waivers/reimbursements): 1.50% and 2.25% for Class A 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).
5
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
The Board of Trustees, including the Independent Trustees, considers matters
bearing on the Portfolio'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
Portfolio's 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 Portfolio and
the performance of peer groups of funds and the Portfolio's performance
benchmark, (ii) information on the Portfolio's advisory and subadvisory fees,
if any, and other expenses, including information comparing the Portfolio's
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 Portfolio, (iv) information about the profitability of the Agreements to
the Portfolio's adviser 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) the Portfolio'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
Portfolio's shares, (iv) the procedures employed to determine the value of the
Portfolio's assets, (v) the allocation of the Portfolio's brokerage, if any,
including allocations to brokers affiliated with the Advisers and the use of
"soft" commission dollars to pay Portfolio expenses and to pay for research and
other similar services, (vii) the resources devoted to, and the record of
compliance with, the Portfolio's 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 the Portfolio's investment
performance and the fees charged to the Portfolio for advisory and other
services. This information generally includes, among other things, an internal
performance rating for the Portfolio and each Portfolio segment based on
agreed-upon criteria, graphs showing performance and fee differentials against
the Portfolio'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 the Portfolio against its peer group.
The portfolio management team for the Portfolio makes periodic presentations to
the Contract Review and Governance Committee and/or the full Board of Trustees,
and if the Portfolio is identified as presenting possible performance concerns
it may be subject to more frequent board presentations and reviews. In
addition, each quarter the Trustees are provided with detailed statistical
information about the 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 the Portfolio. 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 Portfolio under
the Agreements. The Trustees considered the nature, extent and quality of the
services provided by the Advisers and their affiliates to the Portfolio and the
resources dedicated to the Portfolio 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
Portfolio, including the monitoring and oversight services provided by Natixis
Advisors. They also considered the administrative services provided by Natixis
Advisors and its affiliates to the Portfolio.
For the Portfolio, 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.
6
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 Portfolio and the Advisers. As noted above, the
Trustees received information about the performance of the Portfolio over
various time periods, including information which compared the performance of
the Portfolio to the performance of peer groups of funds and the Portfolio's
performance benchmark. In addition, the Trustees also reviewed data prepared by
an independent third party which analyzed the performance of the Portfolio
using a variety of performance metrics, including metrics which also measured
the performance of the Portfolio on a risk adjusted basis.
With respect to the Portfolio, the Board concluded that the Portfolio's
performance and other relevant factors supported the renewal of the Agreements
relating to that Portfolio. The Trustees also noted that the Portfolio recently
formed and therefore performance comparisons were unavailable or related to a
time period that was too short for a comparison to be meaningful.
The Trustees also considered each Adviser's performance and reputation
generally, the Portfolio's 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 Portfolio 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
Portfolio. The Trustees considered the fees charged to the Portfolio for
advisory and subadvisory services as well as the total expense levels of the
Portfolio. This information included comparisons (provided both by management
and also by an independent third party) of the Portfolio's 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 the
Portfolio's advisory and subadvisory fees, the Trustees also took into account
the demands, complexity and quality of the investment management of the
Portfolio. 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 the Portfolio currently has an
expense cap in place, and they considered the amounts waived or reimbursed by
the Advisers under the caps. The Trustees noted that the Portfolio had a total
expense ratio that was 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 the relatively higher expense ratio resulted
to a significant extent from relatively higher expenses relating to items other
than advisory fees. The Trustees noted that the Portfolio's multi-manager
structure was 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
Portfolio. The Trustees reviewed information provided by management as to the
profitability of the Advisers' and their affiliates' relationships with the
Portfolio, 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 Portfolio growth on Adviser profitability,
including information regarding resources spent on distribution activities and
the increase in net sales for 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 Portfolio, the
expense levels of the Portfolio, and whether the Advisers had implemented
breakpoints and/or expense caps with respect to the Portfolio.
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 the Portfolio was 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 Portfolio
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 Portfolio through breakpoints in their investment advisory
fees or other means, such as
7
BOARD APPROVAL OF THE EXISTING ADVISORY AND SUBADVISORY AGREEMENTS
expense waivers. The Trustees noted that the Portfolio had breakpoints in its
advisory fees and was subject to an expense cap. 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 Portfolio, 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 Portfolio supported the
renewal of the Agreements.
The Trustees also considered other factors, which included but were not limited
to the following:
.. whether the Portfolio has operated in accordance with its investment
objective and the Portfolio's record of compliance with its investment
restrictions, and the compliance programs of the Portfolio and the Advisers.
They also considered the compliance-related resources the Advisers and their
affiliates were providing to the Portfolio.
.. 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 Portfolio, and the benefits of research made
available to the Advisers by reason of brokerage commissions generated by
the Portfolio's 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 the existing advisory and subadvisory agreements should be
renewed.
8
IXIS EQUITY DIVERSIFIED PORTFOLIO -- PORTFOLIO OF INVESTMENTS
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ------------------------------------------------------------------------------------
Common Stocks -- 97.5% of Net Assets
Aerospace & Defense -- 2.6%
700 Alliant Techsystems, Inc.(b) $ 69,405
1,051 Boeing Co. (The) 101,064
1,250 DRS Technologies, Inc. 71,588
1,414 Honeywell International, Inc. 79,580
700 L-3 Communications Holdings, Inc. 68,173
2,400 Raytheon Co. 129,336
1,233 Rockwell Collins, Inc. 87,099
---------------
606,245
---------------
Agriculture -- 0.4%
1,384 Monsanto Co. 93,475
---------------
Apparel -- 1.3%
1,665 Coach, Inc.(b) 78,904
1,708 Guess?, Inc. 82,052
4,000 Onward Kashiyama Co., Ltd. (JPY) 51,103
875 Polo Ralph Lauren Corp. 85,846
---------------
297,905
---------------
Athletic Footwear -- 1.0%
1,116 Adidas AG (EUR) 70,659
2,700 NIKE, Inc., Class B 157,383
---------------
228,042
---------------
Auto Manufacturers -- 0.6%
94,000 Denway Motors, Ltd. (HKD) 44,120
600 Hyundai Motor Co. (KRW) 47,410
11,000 Isuzu Motors, Ltd. (JPY) 59,679
---------------
151,209
---------------
Auto Parts & Equipment -- 0.3%
1,050 Autoliv, Inc. 59,714
---------------
Banks -- 5.1%
2,076 Banco Santander Central Hispano SA, ADR 38,157
13,400 Bangkok Bank PCL (THB) 47,351
678 Bank of Yokohama, Ltd., ADR 47,223
1,021 BNP Paribas, ADR 60,749
1,100 Comerica, Inc. 65,417
1,383 Commerzbank AG (EUR) 66,431
848 DBS Group Holdings, Ltd., Sponsored ADR(c) 50,456
2,052 HBOS PLC (GBP) 40,609
573 HSBC Holdings PLC, Sponsored ADR 52,584
2,900 Huntington Bancshares, Inc. 65,946
9,000 Joyo Bank, Ltd. (The) (JPY) 55,992
1,750 KeyCorp 60,077
439 Kookmin Bank (KRW) 38,538
1,350 Marshall & Ilsley Corp. 64,300
4,250 Mellon Financial Corp. 187,000
109,500 PT Bank Mandiri (IDR) 37,874
3,190 Royal Bank of Scotland Group PLC (GBP) 40,549
4,958 Sumitomo Trust & Banking Co., Ltd. (The), Sponsored ADR 46,357
5,088 UniCredito Italiano SpA (EUR) 45,657
533 Westpac Banking Corp., Sponsored ADR(c) 58,086
---------------
1,169,353
---------------
Beverages -- 1.2%
1,680 Coca-Cola Co. (The) 87,881
2,850 Constellation Brands, Inc.(b) 69,198
1,000 Diageo PLC, Sponsored ADR 83,310
1,236 Fomento Economico Mexicano, SAB de CV, Sponsored ADR 48,599
---------------
288,988
---------------
Shares Description Value (+)
- ----------------------------------------------------------------------------------------------
Biotechnology -- 0.4%
1,467 Celgene Corp.(b) $ 84,103
---------------
Building Materials -- 0.5%
1,841 Cemex SAB de CV, Sponsored ADR(b) 67,933
1,900 JS Group Corp. (JPY) 38,579
---------------
106,512
---------------
Chemicals -- 1.9%
1,075 Ciba Specialty Chemicals AG, Sponsored ADR 34,948
3,300 Dow Chemical Co. (The) 145,926
594 Lonza Group AG (CHF) 54,756
1,750 Lyondell Chemical Co. 64,960
1,856 Mosaic Co. (The)(b) 72,421
1,550 Sigma-Aldrich Corp. 66,139
---------------
439,150
---------------
Commercial Services -- 0.9%
1,400 Apollo Group, Inc., Class A(b) 81,802
18,000 Cosco Pacific, Ltd. (HKD) 47,076
1,600 R. R. Donnelley & Sons Co. 69,616
---------------
198,494
---------------
Computers -- 6.7%
1,829 Apple, Inc.(b) 223,211
16,237 Dell, Inc.(b) 463,566
5,538 EMC Corp.(b) 100,238
10,865 Hewlett-Packard Co. 484,796
1,033 International Business Machines Corp. 108,723
2,650 Seagate Technology 57,691
23,500 Sun Microsystems, Inc.(b) 123,610
---------------
1,561,835
---------------
Distribution & Wholesale -- 0.6%
4,742 Sumitomo Corp., Sponsored ADR(c) 85,356
1,000 WESCO International, Inc.(b) 60,450
---------------
145,806
---------------
Diversified Financial Services -- 10.4%
5,271 American Express Co. 322,480
2,300 Capital One Financial Corp. 180,412
6,084 Cattles PLC (GBP) 47,892
129 Chicago Mercantile Exchange Holdings, Inc. 68,932
1,150 CIT Group, Inc. 63,054
2,900 Citigroup, Inc. 148,741
685 Credit Suisse Group, Sponsored ADR 48,608
900 Franklin Resources, Inc. 119,223
717 Goldman Sachs Group, Inc. 155,410
788 IGM Financial, Inc. (CAD) 38,296
728 IntercontinentalExchange, Inc.(b) 107,635
5,820 JPMorgan Chase & Co. 281,979
5,746 Man Group PLC (GBP) 70,270
934 MasterCard, Inc., Class A 154,922
5,259 Morgan Stanley 441,125
2,101 Nomura Holdings, Inc. 40,801
1,200 Promise Co., Ltd. (JPY) 37,035
1,603 T. Rowe Price Group, Inc. 83,180
---------------
2,409,995
---------------
Electric -- 1.7%
1,400 Ameren Corp. 68,614
2,616 Companhia Energetica de Minas Gerais, Sponsored ADR 55,198
42,000 Datang International Power Generation Co., Ltd., Class H (HKD)(b) 64,886
1,250 Edison International 70,150
See accompanying notes to financial statements.
9
IXIS EQUITY DIVERSIFIED PORTFOLIO -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ----------------------------------------------------------------------
Electric -- continued
1,200 Integrys Energy Group, Inc. $ 60,876
1,450 PPL Corp. 67,846
---------------
387,570
---------------
Electrical Components & Equipment -- 1.2%
1,800 AMETEK, Inc. 71,424
1,000 General Cable Corp.(b) 75,750
1,200 Hubbell, Inc., Class B 65,064
436 Schneider Electric SA (EUR) 61,448
---------------
273,686
---------------
Electronics -- 0.3%
1,750 Arrow Electronics, Inc.(b) 67,252
---------------
Food -- 2.1%
1,383 Carrefour SA (EUR) 97,597
1,750 Hormel Foods Corp. 65,362
1,150 J.M. Smucker Co. (The) 73,209
1,125 Loblaw Cos., Ltd. (CAD) 54,864
539 Nestle SA, Sponsored ADR 51,555
1,414 Royal Numico NV (EUR) 73,738
1,900 Smithfield Foods, Inc.(b) 58,501
300 Supervalu, Inc. 13,896
---------------
488,722
---------------
Gas -- 0.2%
11,000 Osaka Gas Co., Ltd. (JPY) 40,918
---------------
Health Care -- Capital Equipment -- 0.5%
2,303 Thermo Fisher Scientific, Inc.(b) 119,111
---------------
Health Care -- Products -- 3.0%
1,497 Baxter International, Inc. 84,341
1,000 Beckman Coulter, Inc. 64,680
1,250 Cooper Cos., Inc., (The) 66,650
1,000 Hillenbrand Industries, Inc. 65,000
1,300 Kinetic Concepts, Inc.(b) 67,561
3,100 Medtronic, Inc. 160,766
607 Smith & Nephew PLC, Sponsored ADR 37,652
1,577 St. Jude Medical, Inc.(b) 65,430
1,181 Stryker Corp. 74,509
---------------
686,589
---------------
Health Care -- Services -- 0.3%
1,650 Lincare Holdings, Inc.(b) 65,753
---------------
Home Builders -- 0.4%
1,100 Lennar Corp., Class A 40,216
2,400 Pulte Homes, Inc. 53,880
---------------
94,096
---------------
Household Products & Wares -- 1.2%
1,350 Church & Dwight Co., Inc. 65,421
1,800 Fortune Brands, Inc. 148,266
550 Whirlpool Corp. 61,160
---------------
274,847
---------------
Insurance -- 3.2%
1,600 Aflac, Inc. 82,240
950 Arch Capital Group, Ltd.(b) 68,913
1,533 Axa, Sponsored ADR(c) 65,980
1,550 Cincinnati Financial Corp. 67,270
2,000 HCC Insurance Holdings, Inc. 66,820
990 ING Groep NV, Sponsored ADR 43,530
1,400 Millea Holdings, Inc. (JPY) 57,535
Shares Description Value (+)
- -----------------------------------------------------------------------------
Insurance -- continued
13,490 Old Mutual PLC (GBP) $ 45,754
8,000 Progressive Corp. 191,440
1,300 Protective Life Corp. 62,153
---------------
751,635
---------------
Internet -- 2.0%
1,163 Amazon.com, Inc.(b) 79,561
4,170 eBay, Inc.(b) 134,190
497 Google, Inc., Class A(b) 260,120
---------------
473,871
---------------
Iron & Steel -- 0.3%
1,625 Evraz Group SA, GDR, 144A 66,787
---------------
Leisure Time -- 1.7%
5,100 Carnival Corp. 248,727
2,500 Harley-Davidson, Inc. 149,025
---------------
397,752
---------------
Machinery -- Diversified -- 1.1%
821 Deere & Co. 99,128
1,000 Terex Corp.(b) 81,300
791 Textron, Inc. 87,097
---------------
267,525
---------------
Manufacturing -- 2.0%
1,250 Cooper Industries, Ltd., Class A 71,362
750 Eaton Corp. 69,750
2,700 Leggett & Platt, Inc. 59,535
600 Parker Hannifin Corp. 58,746
485 Siemens AG (EUR) 69,955
3,700 Tyco International, Ltd. 125,023
---------------
454,371
---------------
Media -- 5.6%
1,340 British Sky Broadcasting PLC, Sponsored ADR(c) 69,117
1,100 Gannett Co., Inc. 60,446
1,200 Liberty Media Corp. - Capital, Series A(b) 141,216
1,475 McGraw-Hill Cos., Inc. (The) 100,418
15,200 Time Warner, Inc. 319,808
7,700 Viacom, Inc., Class B(b) 320,551
1,476 Vivendi (EUR) 63,747
6,336 Walt Disney Co. (The) 216,311
---------------
1,291,614
---------------
Metal Fabricate & Hardware -- 0.5%
1,025 Precision Castparts Corp. 124,394
---------------
Metals -- 1.1%
904 Allegheny Technologies, Inc. 94,812
1,300 Cameco Corp. 65,962
1,209 Freeport-McMoRan Copper & Gold, Inc. 100,129
---------------
260,903
---------------
Mining -- 0.9%
1,601 BHP Billiton Ltd., Sponsored ADR(c) 95,660
2,124 Cia Vale do Rio Doce, Sponsored ADR 80,075
145 Mining and Metallurgical Co. Norilsk Nickel, ADR 32,190
---------------
207,925
---------------
Office & Business Equipment -- 0.6%
892 Canon, Inc., Sponsored ADR 52,307
4,860 Xerox Corp.(b) 89,813
---------------
142,120
---------------
See accompanying notes to financial statements.
10
IXIS EQUITY DIVERSIFIED PORTFOLIO -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares Description Value (+)
- ---------------------------------------------------------------------
Oil & Gas -- 3.5%
1,350 Anadarko Petroleum Corp. $ 70,186
1,850 Chesapeake Energy Corp. 64,010
1,700 Cimarex Energy Co. 66,997
970 Eni SpA, Sponsored ADR 70,180
1,030 Gazprom, Sponsored ADR 43,157
1,150 Hess Corp. 67,804
566 LUKOIL, Sponsored ADR 43,129
1,300 Newfield Exploration Co.(b) 59,215
443 Petroleo Brasileiro SA, ADR 53,723
1,701 Southwestern Energy Co.(b) 75,694
832 Total SA, Sponsored ADR 67,375
2,098 XTO Energy, Inc. 126,090
---------------
807,560
---------------
Oil & Gas Services -- 0.6%
1,895 Saipem SpA (EUR) 65,043
1,700 Superior Energy Services, Inc.(b) 67,864
---------------
132,907
---------------
Pharmaceuticals -- 3.7%
206 AstraZeneca PLC (GBP) 11,099
793 AstraZeneca PLC, Sponsored ADR 42,410
4,076 Gilead Sciences, Inc.(b) 158,026
1,426 GlaxoSmithKline PLC, Sponsored ADR 74,680
2,576 Merck & Co., Inc. 128,285
3,250 Mylan Laboratories, Inc. 59,117
1,262 Novartis AG, ADR 70,760
3,796 Schering-Plough Corp. 115,550
3,000 Shionogi & Co., Ltd. (JPY) 48,975
700 Takeda Pharmaceutical Co., Ltd. (JPY) 45,255
1,724 Wyeth 98,854
---------------
853,011
---------------
Real Estate -- 1.0%
3,986 CB Richard Ellis Group, Inc., Class A(b) 145,489
721 Jones Lang LaSalle, Inc. 81,833
---------------
227,322
---------------
REITs -- Health Care -- 0.2%
1,550 Ventas, Inc. 56,188
---------------
REITs -- Hotels -- 0.3%
1,500 Hospitality Properties Trust 62,235
---------------
Restaurants -- 1.4%
6,250 McDonald's Corp. 317,250
---------------
Retail -- 5.8%
4,893 CVS Caremark Corp. 178,350
2,700 Daiei, Inc. (JPY)(b) 28,551
1,369 Folli - Follie SA (EUR) 55,586
3,000 Foot Locker, Inc. 65,400
6,100 Home Depot, Inc. 240,035
2,184 Kohl's Corp.(b) 155,130
3,000 Limited Brands, Inc. 82,350
1,200 Men's Wearhouse, Inc. (The) 61,284
1,580 Nordstrom, Inc. 80,770
950 Sherwin-Williams Co. (The) 63,146
15,612 Signet Group PLC (GBP) 32,604
2,250 TJX Cos., Inc. 61,875
5,090 Wal-Mart Stores, Inc. 244,880
---------------
1,349,961
---------------
Shares Description Value (+)
- ----------------------------------------------------------------------------------------
Savings & Loans -- 0.8%
4,400 Washington Mutual, Inc. $ 187,616
---------------
Semiconductors -- 4.5%
19,100 Intel Corp. 453,816
2,351 NVIDIA Corp.(b) 97,120
96 Samsung Electronics Co., Ltd. (KRW) 58,815
1,354 STMicroelectronics NV 25,983
4,780 Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR 53,202
9,331 Texas Instruments, Inc. 351,126
---------------
1,040,062
---------------
Software -- 2.6%
3,044 Adobe Systems, Inc.(b) 122,217
1,802 Autodesk, Inc.(b) 84,838
1,750 Fair Isaac Corp. 70,210
1,571 Fidelity National Information Services, Inc. 85,274
899 Infosys Technologies, Ltd., Sponsored ADR 45,292
4,352 Microsoft Corp. 128,253
1,215 SAP AG (EUR) 62,604
---------------
598,688
---------------
Telecommunications -- 6.3%
3,145 Alcatel-Lucent (EUR) 44,184
1,158 America Movil SAB de CV, Series L, ADR 71,715
1,000 Anixter International, Inc.(b) 75,210
8,534 Cisco Systems, Inc.(b) 237,672
5,262 Corning, Inc.(b) 134,444
12,400 Motorola, Inc. 219,480
1,449 Neuf Cegetel (EUR)(b) 56,952
3,724 QUALCOMM, Inc. 161,584
15,400 Sprint Nextel Corp. 318,934
2,258 Vodafone Group PLC, Sponsored ADR 75,937
4,200 Windstream Corp. 61,992
---------------
1,458,104
---------------
Textiles -- 0.3%
600 Mohawk Industries, Inc.(b) 60,474
---------------
Tobacco -- 0.3%
850 Loews Corp. - Carolina Group 65,680
---------------
Toys, Games & Hobbies -- 0.3%
1,600 Nintendo Co., Ltd., ADR 73,120
---------------
Transportation -- 1.9%
700 FedEx Corp. 77,679
3,150 Union Pacific Corp. 362,722
---------------
440,401
---------------
Water -- 0.2%
758 Suez SA, ADR(c) 43,448
---------------
Total Common Stocks (Identified Cost $19,641,661) 22,552,294
---------------
See accompanying notes to financial statements.
11
IXIS EQUITY DIVERSIFIED PORTFOLIO -- PORTFOLIO OF INVESTMENTS (continued)
Investments as of June 30, 2007 (Unaudited)
Shares/
Principal
Amount Description Value (+)
- ---------------------------------------------------------------------------------------------------------
Short-Term Investments -- 1.8% of Net Assets
265,384 State Street Securities Lending Quality Trust(d) $ 265,384
$ 136,973 Tri-Party Repurchase Agreement with Fixed Income Clearing
Corporation, dated 6/29/2007 at 4.250% to be repurchased at
$137,022 on 7/02/2007, collateralized by $115,000 U.S.
Treasury Bond, 7.250% due 8/15/2022 valued at $141,163
including accrued interest 136,973
---------------
Total Short-Term Investments
(Identified Cost $402,357) 402,357
---------------
Total Investments -- 99.3%
(Identified Cost $20,044,018)(a) 22,954,651
Other assets less liabilities--0.7% 167,165
---------------
Net Assets -- 100% $ 23,121,816
===============
(+) 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
$20,044,018 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 $ 3,135,622
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (224,989)
---------------
Net unrealized appreciation $ 2,910,633
===============
(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.
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
$66,787 or 0.3% of net assets.
ADR/GDR An American Depositary Receipt or Global Depositary Receipt is a certificate issued by a
U.S. 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.
REITs Real Estate Investment Trusts
CAD Canadian Dollar
CHF Swiss Franc
EUR Euro
GBP British Pound
HKD Hong Kong Dollar
IDR Indonesian Rupiah
JPY Japanese Yen
KRW South Korean Won
THB Thailand Baht
Holdings at June 30, 2007 as a Percentage of Net Assets (unaudited)
Diversified Financial Services 10.4%
Computers 6.7
Telecommunications 6.3
Retail 5.8
Media 5.6
Banks 5.1
Semiconductors 4.5
Pharmaceuticals 3.7
Oil & Gas 3.5
Insurance 3.2
Health Care -- Products 3.0
Aerospace & Defense 2.6
Software 2.6
Food 2.1
Internet 2.0
Manufacturing 2.0
Other, less than 2% each 28.4
See accompanying notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2007 (Unaudited)
IXIS Equity
Diversified Portfolio
---------------------
---------------------
ASSETS
Investments at cost $ 20,044,018
Net unrealized appreciation 2,910,633
---------------------
Investments at value (a) 22,954,651
Foreign currency at value (identified
cost $2,675) 2,680
Receivable for Fund shares sold 93
Receivable for securities sold 567,528
Dividends and interest receivable 31,060
Tax reclaims receivable 2,374
Securities lending income receivable 615
---------------------
TOTAL ASSETS 23,559,001
---------------------
LIABILITIES
Collateral on securities loaned, at
value (Note 2) 265,384
Payable for Fund shares redeemed 52,100
Payable to custodian bank 56,397
Management fees payable (Note 4) 17,073
Deferred Trustees' fees (Note 4) 22,337
Administrative fees payable (Note 4) 5,402
Other accounts payable and accrued
expenses 18,492
---------------------
TOTAL LIABILITIES 437,185
---------------------
NET ASSETS $ 23,121,816
=====================
NET ASSETS CONSIST OF:
Paid-in capital $ 18,057,877
Undistributed (overdistributed) net
investment income (loss) (120,277)
Accumulated net realized gain on
investments and foreign currency
transactions 2,273,693
Net unrealized appreciation on
investments and foreign currency
translations 2,910,523
---------------------
NET ASSETS $ 23,121,816
=====================
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE:
Class A shares:
Net assets $ 6,692,089
=====================
Shares of beneficial interest 550,718
=====================
Net asset value and redemption price
per share $ 12.15
=====================
Offering price per share
(100/[100-maximum sales charge] of
net asset value) (Note 1) $ 12.89
=====================
Class C shares: (redemption price per
share is equal to net asset value
less any applicable contingent
deferred sales charge) (Note 1)
Net assets $ 16,429,727
=====================
Shares of beneficial interest 1,366,951
=====================
Net asset value and offering price
per share $ 12.02
=====================
(a) Including securities on loan with
market values of: $ 262,080
=====================
See accompanying notes to financial statements.
13
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2007 (Unaudited)
IXIS Equity
Diversified Portfolio
---------------------
---------------------
INVESTMENT INCOME
Dividends $ 228,466
Interest 13,459
Securities lending income (Note 2) 5,064
Less net foreign taxes withheld (9,138)
---------------------
237,851
---------------------
Expenses
Management fees (Note 4) 114,987
Service fees - Class A (Note 4) 11,029
Service and distribution fees -
Class C (Note 4) 99,618
Trustees' fees and expenses (Note 4) 4,818
Administrative fees (Note 4) 11,736
Custodian fees and expenses 26,297
Transfer agent fees and expenses -
Class A 4,561
Transfer agent fees and expenses -
Class C 10,298
Audit fees 5,029
Shareholder reporting expenses 10,353
Registration fees 10,574
Miscellaneous expenses 7,950
---------------------
Total expenses 317,250
Less reimbursement/waiver (Note 4) (26,933)
---------------------
Net expenses 290,317
---------------------
Net investment loss (52,466)
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Realized gain on:
Investments - net 2,385,590
Foreign currency transactions - net 42
Change in unrealized appreciation
(depreciation) on:
Investments - net 11,705
Foreign currency translations - net (166)
---------------------
Net realized and unrealized gain on
investments and foreign currency
transactions 2,397,171
---------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,344,705
=====================
See accompanying notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS
IXIS Equity
Diversified Portfolio
--------------------------------------------
Six Months Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
--------------------- ---------------------
--------------------- ---------------------
FROM OPERATIONS:
Net investment loss $ (52,466) $ (101,983)
Net realized gain on investments and
foreign currency transactions 2,385,632 1,799,940
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency translations 11,539 954,188
--------------------- ---------------------
Net increase in net assets resulting
from operations 2,344,705 2,652,145
--------------------- ---------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A -- (62,678)
Class C -- (10,669)
Net realized capital gain
Class A (56,900) (462,460)
Class C (130,920) (1,087,918)
--------------------- ---------------------
Total distributions (187,820) (1,623,725)
--------------------- ---------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS (NOTE 7) (8,431,311) (688,669)
--------------------- ---------------------
Net increase (decrease) in net assets (6,274,426) 339,751
--------------------- ---------------------
NET ASSETS
Beginning of the period 29,396,242 29,056,491
--------------------- ---------------------
End of the period $ 23,121,816 $ 29,396,242
===================== =====================
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME (LOSS) $ (120,277) $ (67,811)
===================== =====================
See accompanying notes to financial statements.
15
This Page Intentionally Left Blank
16
FINANCIAL HIGHLIGHTS
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
---------- ---------- -------------- ----------
IXIS EQUITY DIVERSIFIED PORTFOLIO
Class A
6/30/2007(g) $ 11.26 $ 0.01 $ 0.97 $ 0.98
12/31/2006 10.83 0.02 1.11 1.13
12/31/2005(f) 10.00 (0.04) 0.87 0.83
Class C
6/30/2007(g) 11.18 (0.03) 0.96 0.93
12/31/2006 10.77 (0.06) 1.10 1.04
12/31/2005(f) 10.00 (0.11) 0.88 0.77
Less distributions:
-----------------------------------------
Dividends Distributions
from from net
net investment realized Total
income capital gains distributions
-------------- ------------- -------------
IXIS EQUITY DIVERSIFIED PORTFOLIO
Class A
6/30/2007(g) $ - $ (0.09) $ (0.09)
12/31/2006 (0.08) (0.62) (0.70)
12/31/2005(f) - - -
Class C
6/30/2007(g) - (0.09) (0.09)
12/31/2006 (0.01) (0.62) (0.63)
12/31/2005(f) - - -
(a)A sales charge for Class A and a contingent deferred sales charge for 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 Portfolio's
expenses and/or waive its management fee during the period. Without this
reimbursement/waiver, if applicable, expenses would have been higher.
See accompanying notes to financial statements.
17
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) (%) (e) (%) (c)(e) (%) (e) rate (%)
- ---------- ---------- ----------- --------- ---------- -------------- ---------
$ 12.15 8.7 $ 6,692 1.69 1.50 0.16 44
11.26 10.5 8,867 1.67 1.55 0.16 117
10.83 8.3 11,652 3.15 1.65 (0.41) 72
12.02 8.3 16,430 2.44 2.25 (0.60) 44
11.18 9.7 20,529 2.44 2.30 (0.59) 117
10.77 7.7 17,405 3.61 2.40 (1.17) 72
(d)Had certain expenses not been reduced during the period, if applicable,
total return would have been lower.
(e)Computed on an annualized basis for periods less than one year.
(f)For the period January 31, 2005 (inception) through December 31, 2005.
(g)For the six months ended June 30, 2007 (unaudited).
18
NOTES TO FINANCIAL STATEMENTS
June 30, 2007 (Unaudited)
1. Organization. Natixis Funds Trust III (the "Trust") is organized as a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end investment
management company. The Declaration of Trust permits the Board of Trustees to
authorize the issuance of an unlimited number of shares of the Trust.
Information presented in these financial statements pertains to the IXIS Equity
Diversified Portfolio (the "Portfolio"); the financial statements for the other
funds of the Trust are presented in separate reports.
The Portfolio offers Class A and Class C shares. Class A shares are sold with a
maximum front-end sales charge of 5.75%. Class C shares do not pay a front-end
sales charge, pay higher ongoing 12b-1 fees than Class A shares and may be
subject to a contingent deferred sales charge ("CDSC") of 1.00% if those shares
are redeemed within one year.
Most expenses of the Trust 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 Trust. 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). 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 the Portfolio in the preparation
of its financial statements. The Portfolio's 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 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 Market 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 a remaining maturity of sixty days or less) are generally valued
at market price on the basis of valuations furnished to the Portfolio by a
pricing service recommended by the investment adviser and 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
Portfolio may be valued on 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 Portfolio's subadvisers 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.
The Portfolio 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 equity
securities, the Portfolio 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 Portfolio calculates its net asset value.
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 Portfolio 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 Portfolio.
c. Foreign Currency Translation. The books and records of the Portfolio is
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 Portfolios'
books and the U.S. dollar equivalent of the
19
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
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.
The Portfolio 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.
The Portfolio 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 Portfolio 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 Portfolio'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 Portfolio's
Statement of Assets and Liabilities. The U.S. dollar value of the currencies a
Portfolio has committed to buy or sell represents the aggregate exposure to
each currency the Portfolio 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 Trust treats the Portfolio as a
separate entity for federal income tax purposes. The Portfolio 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 the Portfolio's tax positions
taken on federal and state tax returns that remain subject to examinations (tax
years ended December 31, 2005 - 2006) and has concluded that no provision for
income tax is required. Fund Management is not aware of any events that are
reasonably possible to occur between June 30, 2007 and the date that the
Portfolio's final tax return is filed that would result in the amounts of any
unrecognized tax benefits significantly increasing or decreasing for the
Portfolio.
The 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.
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 in accordance with federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. Permanent differences are primarily due to
differing treatments for book and tax purposes of items such as net operating
losses. 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, wash
sales 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
Income Capital Gains Total
------ ------------- -----
$764,498 $859,227 $1,623,725
g. Repurchase Agreements. The Portfolio, through its custodian, receives
delivery of the underlying securities collateralizing repurchase agreements. It
is the Portfolio'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 Portfolio 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 Portfolio's ability to dispose of the underlying
securities.
h. Securities Lending. The Portfolio has entered into an agreement with State
Street Bank and Trust Company ("State Street Bank"), as agent of the Portfolio,
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
20
NOTES TO FINANCIAL STATEMENTS
June 30, 2007 (Unaudited)
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 Portfolio may bear the
risk of loss with respect to the investment of the collateral. The Portfolio
invests cash collateral in short-term investments, a portion of the income from
which is remitted to the borrowers and the remainder allocated between the
Portfolio and State Street Bank as lending agent. The market value of
securities on loan to borrowers and the value of collateral held by the
Portfolio with respect to such loans at June 30, 2007 were as follows:
Market Value of Value of
Securities on Loan Collateral
------------------ ----------
$262,080 $265,384
i. Indemnifications. Under the Trust's organizational documents, their officers
and Trustees are indemnified against certain liability arising out of the
performance of their duties to the Portfolio. Additionally, in the normal
course of business, the Portfolio enters into contracts with service providers
that contain general indemnification clauses. The Portfolio's maximum exposure
under these arrangements is unknown as this would involve future claims that
may be made against the Portfolio that have not yet occurred. However, based on
experience, the Portfolio expects the risk of loss to be remote.
j. New Accounting Pronouncements. In September, 2006, Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), was issued
and is effective for fiscal years beginning after November 15, 2007. FAS 157
defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management will not
implement FAS 157 for the Portfolio due to its liquidation on August 3, 2007.
3. Purchases and Sales of Securities. For the six months ended June 30, 2007,
purchases and sales of securities (excluding short-term investments and
including paydowns) were as follows:
Purchases Sales
--------- -----
$12,211,487 $19,613,150
4. Management Fees and Other Transactions with Affiliates.
a. Management Fees. Natixis Asset Management Advisors, L.P. (formerly IXIS
Asset Management Advisors, L.P.) ("Natixis Advisors") serves as investment
adviser to the Portfolio. Under the terms of the management agreement, the
Portfolio pays a management fee at the following annual rates, calculated daily
and payable monthly, based on the Portfolio's average daily net assets:
Percentage of Average Daily Net Assets
--------------------------------------
First Over
$1 billion $1 billion
---------- ----------
0.80% 0.75%
Natixis Advisors has entered into subadvisory agreements for the Portfolio as
listed below.
Dreman Value Management, LLC ("Dreman")
Hansberger Global Investors, Inc. ("Hansberger")
Harris Associates, L.P. ("Harris Associates")
Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Payments to Natixis Advisors are reduced in the amount of payments to the
subadvisers.
Natixis Advisors has given a binding undertaking to the Portfolio to defer its
management fees, and/or reimburse certain expenses associated with this
Portfolio to limit its operating expenses. This undertaking is in effect until
April 30, 2008 and will be reevaluated on an annual basis. For the six months
ended June 30, 2007, the expense limit as a percentage of average daily net
assets under the expense limitation agreement was as follows:
Expense Limit as a Percentage of
Average Daily Net Assets
--------------------------------
Class A Class C
------- -------
1.50% 2.25%
21
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
For the six months ended June 30, 2007, the management fees and waivers of
management fees for the Portfolio were as follows:
Percentage of
Average Daily
Gross Waiver of Net Net Assets
Management Management Management ----------
Fee Fee Fee Gross Net
--- --- --- ----- ---
$114,987 $12,074 $102,913 0.80% 0.72%
For the six months ended June 30, 2007, in addition to the waiver of management
fees, expenses have been reimbursed to the Portfolio in the amount of $14,859.
Natixis Advisors is 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
----------------------------
Class A Class C Total
------- ------- -----
$13,358 $29,088 $42,446
Certain officers and directors of Natixis Advisors and its affiliates are also
Trustees of the Portfolio. Natixis Advisors, Hansberger, Harris Associates and
Loomis Sayles 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 Portfolio and has subcontracted with State Street Bank to
serve as sub-administrator. Natixis Advisors is a wholly-owned subsidiary of
Natixis US. Pursuant to an agreement among Natixis Funds Trust I, (formerly
IXIS Advisor Funds Trust I) Natixis Funds Trust II (formerly IXIS Advisors
Funds Trust II), Natixis Funds Trust III (formerly IXIS Advisor 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"), the Portfolio 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, the Portfolio 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 $11,736.
c. Service and Distribution Fees. The Trust has 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 Portfolio.
Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service
Plan relating to the Portfolio's Class A shares (the "Class A Plan") and a
Service and Distribution Plan relating to the Portfolio's Class C shares (the
"Class C Plan").
Under the Class A Plan, the Portfolio pays Natixis Distributors a monthly
service fee at the annual rate not to exceed 0.25% of the average daily net
assets attributable to the Portfolio'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.
22
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
Under the Class C Plan, the Portfolio pays Natixis Distributors a monthly
service fee at the annual rate of 0.25% of the average daily net assets
attributable to the Portfolio's Class C shares, as compensation for services
provided and expenses incurred by Natixis Distributors in providing personal
services to investors in Class C shares and/or the maintenance of shareholder
accounts.
Also under the Class C Plan, the Portfolio pays Natixis Distributors a monthly
distribution fee at the annual rate of 0.75% of the average daily net assets
attributable to the Portfolio's Class C shares, as compensation for services
provided and expenses incurred by Natixis Distributors in connection with the
marketing or sale of Class C shares.
For the six months ended June 30, 2007, the Portfolio paid the following
service and distribution fees:
Service Fee Distribution Fee
--------------- ----------------
Class A Class C Class C
------- ------- -------
$11,029 $24,904 $74,714
d. Commissions. The Portfolio has been informed that commissions (including
CDSCs) on Portfolio shares paid to Natixis Distributors by investors in shares
of the Portfolio during the six months ended June 30, 2007 were $1,219.
e. Trustees Fees and Expenses. The Portfolio does not pay any compensation
directly to their officers or Trustees who are directors, officers or employees
of Natixis Advisors, Natixis Distributors, 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 IXIS Advisor 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 Portfolio or certain other Funds of the IXIS Advisor Funds Trusts
and the Loomis Sayles Funds Trusts on the normal payment date. Deferred amounts
remain in the Portfolio until distributed in accordance with the Plan.
5. Line of Credit. The Portfolio, 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 Portfolio 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 Portfolios based on their average daily
unused portion of the line of credit. For the six months ended June 30, 2007,
the Portfolio had no borrowings under this agreement.
6. Broker Commission Recapture. The Portfolio 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 Portfolio
under such agreements and are included in realized gains in the Statements of
Operations. For the six months ended June 30, 2007, amounts rebated under these
agreements were $1,338.
23
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2007 (Unaudited)
7. Capital Shares. The Portfolio 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
-------------------------------------
Shares Amount
----------------- ------------------
Class A
Issued from the sale of shares 90,883 $ 1,051,633
Issued in connection with the reinvestment of distributions 1,176 14,238
----------------- ------------------
92,059 1,065,871
Redeemed (328,778) (3,936,544)
----------------- ------------------
Net change (236,719) $ (2,870,673)
----------------- ------------------
Class C
Issued from the sale of shares 197,463 $ 2,264,457
Issued in connection with the reinvestment of distributions 1,661 19,905
----------------- ------------------
199,124 2,284,362
Redeemed (668,705) (7,845,000)
----------------- ------------------
Net change (469,581) $ (5,560,638)
----------------- ------------------
Increase (decrease) from capital share transactions (706,300) $ (8,431,311)
================= ==================
Year Ended
December 31, 2006
-------------------------------------
Shares Amount
----------------- ------------------
Class A
Issued from the sale of shares 220,109 $ 2,456,779
Issued in connection with the reinvestment of distributions 8,758 97,919
----------------- ------------------
228,867 2,554,698
Redeemed (517,195) (5,715,400)
----------------- ------------------
Net change (288,328) $ (3,160,702)
----------------- ------------------
Class C
Issued from the sale of shares 607,518 $ 6,752,635
Issued in connection with the reinvestment of distributions 17,967 199,438
----------------- ------------------
625,485 6,952,073
Redeemed (405,700) (4,480,040)
----------------- ------------------
Net change 219,785 $ 2,472,033
----------------- ------------------
Increase (decrease) from capital share transactions (68,543) $ (688,669)
================= ==================
8. Subsequent Events. Effective August 1, 2007, the name of the Adviser changed
from IXIS Asset Management Advisors, L.P. to Natixis Asset Management Advisors,
L.P. and the name of the Distributor changed from IXIS Asset Management
Distributors, L.P. to Natixis Distributors, L.P.
On June 1, 2007, the Board of Trustees of the Trust approved a plan to
liquidate and terminate the Portfolio at the close of business on August 3,
2007.
9. Shareholder Meeting. At a special shareholders' meeting held on January 19,
2007, shareholders of Natixis Funds Trust III, of which IXIS Equity Diversified
Portfolio is a series, considered the following proposal:
To approve a new subadvisory agreement between Natixis Funds Trust III
(formerly IXIS Advisor Funds Trust III), on behalf of the IXIS Equity
Diversified Portfolio and Hansberger Global Investors, Inc.
Votes For Votes Against Abstained Votes
--------- ------------- ---------------
1,017,870 17,212 111,625
With respect to this proposal, the meeting was adjourned six times but,
ultimately, there were insufficient votes to pass the proposal.
24
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 III
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