Gateway Trust N-CSRCertified annual shareholder report (management investment company)

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: 811-22099

Gateway Trust

(Exact name of Registrant as specified in charter)

888 Boylston Street,

Suite 800 Boston,

Massachusetts 02199-8197

(Address of principal executive offices) (Zip code)

Russell L. Kane, Esq.

Natixis Distribution, L.P.

888 Boylston Street, Suite 800

Boston, Massachusetts 02199-8197

(Name and address of agent for service)

Registrant’s telephone number, including area code: (617) 449-2822

Date of fiscal year end: December 31

Date of reporting period: December 31, 2020

The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:

Annual Report

December 31, 2020

Gateway Fund

Gateway Equity Call Premium Fund

Mirova Global Green Bond Fund

Mirova Global Sustainable Equity Fund

Mirova International Sustainable Equity Fund

Mirova U.S. Sustainable Equity Fund

Natixis Oakmark Fund

Natixis Oakmark International Fund

Natixis U.S. Equity Opportunities Fund

Vaughan Nelson Mid Cap Fund

Vaughan Nelson Small Cap Value Fund

Table of Contents

GATEWAY FUND

Investment Goal

The Fund seeks to capture the majority of returns associated with equity market investments, while exposing investors to less risk than other equity investments.

Market Conditions

The above-average annual return of the S&P 500^® Index in 2020 belies the economic and market turmoil wrought by the Covid-19 pandemic during the year. As investors processed the potential economic impact of the virus in March, equities experienced record-setting volatility and fell into a bear market faster than any other market decline in history. Nearly as shocking was how swiftly the equity market recovered to new highs, which also happened in record time. The recovery was led primarily by technology businesses that helped facilitate home-based work, entertainment and shopping, while more economically sensitive businesses lagged behind. After the recovery reached a temporary peak in early September, the market experienced an additional sharp decline as investors processed a resurging pandemic case count and election uncertainty. In November, as election results became clearer and progress was made on Covid-19 vaccines, losses were recovered and the equity market delivered its second highest total return of any November on record. The S&P 500^® Index continued to trend upward in December and ended the year at a new all-time high.

The turmoil caused by the pandemic drove a significant shift in measures of realized volatility, implied volatility, and the dynamic relationship between the two. Volatility measures at the beginning of 2020 were consistent with the below-average readings persistent in recent years. The Cboe^® Volatility Index^® (the VIX^®) set a 2020 closing low of 12.10 on January 17 and did not break above its long-term average of 19.47 until February 24, the first day in 2020 in which the S&P 500^® Index had a loss exceeding 3%. The VIX^® rose as high as 85.47 on March 18, just shy of its all-time intra-day high reading of 89.53 set in 2008.

Realized volatility measures in 2020 were even more extreme. The S&P 500^® Index would record 16 more one-day losses exceeding 3%, eight of which occurred in March alone. The large swings resulted in a 93.44% annualized standard deviation of daily returns for the S&P 500^® Index in March, the highest reading of monthly standard deviation in history, dating back to 1928. The massive spike in realized volatility caused the typical relationship between implied and realized volatility to invert. Typically, implied volatility measures exceed realized volatility, and this relationship has held about 90% of the time on a monthly basis since 1990. The March 2020 inversion was the largest on record, nearly 50% larger than the previous record established in September 2008. While it was extreme, the inversion was temporary, as realized volatility normalized more quickly than implied volatility. After implied volatility peaked in mid-March, the VIX^® trended lower while the spread between implied and realized volatility flipped back to positive in April and remained positive each subsequent month of the year. Moreover, the August and December measures were the highest and second-highest implied versus realized spreads in history.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of the Gateway Fund returned 7.19% at net asset value. The Fund’s primary benchmark, the S&P 500^® Index, returned 18.40% for the same period, while its secondary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, returned 7.51%.

Explanation of Fund Performance

The Fund invests in a broadly diversified portfolio of common stocks that is designed to track the performance of the S&P 500^® Index, while also selling index call options and purchasing index put options. The Fund seeks to generate returns by creating cash flow through writing at-the-money index call options against the full value of its underlying equity portfolio. The written call options, premium levels of which have a high correlation to volatility, provide cash flow into the Fund, yet may limit upside participation in an equity market advance. The Fund uses some of the cash flow from index call option writing to purchase out-of-the-money index put options to mitigate sudden and severe price declines in the equity portfolio. An index call option is described as being at-the-money when the price of the underlying index is the same as the option’s strike price. Additionally, an index put option is described as being out-of-the-money when its strike price is below the price of the underlying index. It is the net premium-to-earn from selling index call options less the price of protective index put options that is a significant factor in determining how much participation the Fund will

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have in a rising market and how much downside protection is delivered in a declining market. In the long term, the combination of the diversified stock portfolio, steady cash flow from the sale of index call options and downside protection from index put options is intended to provide the Fund with the majority of the returns associated with equity market investments while exposing investors to less risk.

The Fund underperformed its primary benchmark for the year while achieving the risk component of its objective by exhibiting significantly less risk than the equity market. Throughout 2020, the Fund’s two-part option strategy delivered equity market participation during the periods in which the equity market advanced and significant downside protection during market declines. Specifically, from the beginning of the year to the pre-Covid equity market high on February 19, the Fund returned 1.79%, underperforming the S&P 500^® Index by 3.29 percentage points. When the equity market has a strong advance combined with below-average implied volatility levels, underperformance is expected as the risk-reducing option strategy generates losses that detract from the return of the Fund’s index-tracking equity portfolio. During the pandemic-driven bear market from February 19 to March 23, the Fund declined 16.10%, less than half the loss of its primary benchmark, as gains from its option strategy provided 17.69 percentage points of downside protection relative to the S&P 500^® Index. The Fund returned 20.61% during the market recovery from March 23 to the temporary recovery peak on September 2. The S&P 500^® Index returned 61.39% over this period and the Fund’s return differential with its benchmark was primarily due to losses from the Fund’s option strategy, though above-average implied volatility levels resulted in smaller losses than would have otherwise been incurred. From September 2 through year-end, during a market advance that was far from steady, sustained implied volatility levels helped the Fund deliver strong market participation with a return of 4.06% compared to the S&P 500^® Index return of 5.45% for the same period. This volatile timeframe included a decline of 8.48% for the S&P 500^® Index from September 2 through October 31. The Fund again provided downside protection with a return of -3.39% over the same period.

The Fund’s equity portfolio returned 20.06% for the year, a performance differential of positive 166 basis points versus the S&P 500^® Index. Consistent with its investment objective, the measured risk of the Fund was low relative to the US equity market, as its standard deviation of daily returns for 2020 was 13.87% versus 34.43% for the S&P 500^® Index.

The Fund began the year with full index put option coverage. Amid heightened equity market volatility during the pandemic-driven bear market, the investment team closed out two index put option positions at a profit on February 27, resulting in a put coverage range of 65%–80%. The team further reduced the Fund’s put coverage three additional times in March, ending the first quarter of 2020 with a put coverage range of 40%–50%. These actions monetized the higher volatility that was priced into index put option contracts and preserved index put option gains. As put coverage was reduced, in an effort to keep the Fund’s risk profile consistent, the index put option portfolio had a weighted-average strike price closer than usual to the equity market level. As the equity market recovered, implied volatility moderated from extreme levels and created opportunities for the investment team to selectively increase index put option coverage in a cost-effective way, while maintaining a consistent risk profile. From early April to August, the team gradually increased put option coverage to a range of 80%–95%. Over the remainder of the year, the Fund’s put option coverage range was unchanged while a typical risk profile was maintained. The Fund maintained a portfolio of written index call options on the full value of its equity holdings over the course of the year while making active adjustments to positions in response to changing market conditions.

Outlook

Gateway’s investment philosophy is informed by its long history and maintains that the equity market is the most reliable source of attractive long-term returns, despite its high volatility relative to other asset classes and tendency to periodically deliver significant short-term losses. Gateway’s investment philosophy also holds that consistency is key to long-term success and that generating cash flow with index options, rather than seeking to forecast the market, can be a lower-risk way to participate in equity markets. By staying true to this philosophy and continuing to manage strategies consistent with the firm’s historical approach, Gateway assists Fund shareholders in managing risk while pursuing long-term returns in an uncertain environment. As always, Gateway will avoid incorporating forecasts into its investment approach and will not attempt to anticipate how events will unfold.

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GATEWAY FUND

Hypothetical Growth of $100,000 Investment in Class Y Shares⁴

December 31, 2010 through December 31, 2020

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

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Average Annual Total Returns – December 31, 2020⁴

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For more recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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GATEWAY EQUITY CALL PREMIUM FUND

Investment Goal

The Fund seeks total return with less risk than U.S. equity markets.

Market Conditions

The S&P 500^® Index returned 18.40% for the year. The above-average calendar year return and positive note on which 2020 ended nearly disguised the turmoil with which it began. During the pre-Covid period of January 1 through February 19, 2020 the S&P 500^® Index returned 5.08%, continuing its positive momentum from 2019 as investors reflected on the passage of major global trade deals and strong backward-looking economic data. A pandemic-driven bear market combined with government policies that severely restricted economic activity drove the S&P 500^® Index down 33.79% from February 19 through March 23. The recovery from the bear market was led primarily by technology businesses that helped facilitate home-based work, entertainment and shopping, and powered the S&P 500^® Index to a 61.39% return from March 23 to the recovery period peak on September 2. From September 2 through year-end, the S&P 500^® Index returned 5.45%, but the advance was far from steady. The same businesses that drove the recovery period led a decline of 8.48% from September 2 through October 31 as investors processed a resurging pandemic case count and election uncertainty. In November, as election results became clearer and progress was made on Covid-19 vaccines, losses from September and October were recovered and the equity market delivered its second highest total return of any November on record. The market continued to trend upward in December, with the S&P 500^® Index ending the year at a new all-time high.

The turmoil caused by the pandemic drove a significant shift in measures of realized volatility, implied volatility and the dynamic relationship between the two. Volatility measures at the beginning of 2020 were consistent with the below-average readings persistent in recent years. The Cboe^® Volatility Index^® (the VIX^®) set a 2020 closing low of 12.10 on January 17 and did not break above its long-term average of 19.47 until February 24, the first day in 2020 in which the S&P 500^® Index had a loss exceeding 3%. The VIX^® rose as high as 85.47 on March 18, just shy of its all-time intra-day high reading of 89.53 set in 2008.

Realized volatility measures in 2020 were even more extreme. The S&P 500^® Index would record 16 more one-day losses exceeding 3%, eight of which occurred in March alone. The large swings resulted in a 93.44% annualized standard deviation of daily returns for the S&P 500^® Index in March, the highest reading of monthly standard deviation in history, dating back to 1928. The massive spike in realized volatility caused the typical relationship between implied and realized volatility to invert. Typically, implied volatility measures exceed realized volatility, and this relationship has held about 90% of the time on a monthly basis since 1990. The inversion in March 2020 was the largest on record, nearly 50% larger than the previous record established in September 2008. While it was extreme, the inversion was temporary, as realized volatility normalized more quickly than implied volatility. After implied volatility peaked in mid-March, the VIX^® trended lower while the spread between implied and realized volatility flipped back to positive in April and remained positive each subsequent month of the year. Moreover, the August and December measures were the highest and second-highest implied versus realized spreads in history.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of the Gateway Equity Call Premium Fund returned 8.38% at net asset value. The Fund outperformed its primary benchmark, the Cboe S&P 500 BuyWrite Index (“BXM^SM”), which returned -2.75% for the same period.

Explanation of Fund Performance

The Fund invests in a broadly diversified portfolio of common stocks that is designed to track the performance of the S&P 500^® Index and support its index option-based risk management strategy as efficiently as possible while seeking to enhance the Fund’s after-tax total return. The Fund seeks to generate returns by writing at- and near-the-money index call options against the full value of its underlying equity portfolio. The steady cash flow from call option writing is intended to be an important source of the Fund’s return, although it reduces the Fund’s ability to profit from increases in the value of its equity portfolio. The index call options written by the Fund often have similar characteristics to the single index call option present in the BXM^SM at any given time. However, unlike the BXM^SM, the Fund employs an active strategy that gives its management team discretion to diversify expiration dates and strike prices across a portfolio of index call options and to opportunistically pursue attractive call premiums while maintaining a relatively consistent risk profile.

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The Fund outperformed the BXM^SM by 1,113 basis points for the year. Throughout 2020, the Fund’s diversified and active index call option writing approach generated risk-reducing cash flow and delivered equity market participation during periods in which the equity market advanced and downside protection during market declines. Specifically, the Fund provided consistent market exposure during the pre-Covid advance from January 1 through February 19, with a return of 2.83% compared to the BXM^SM return of 2.25%. During the pandemic-driven bear market from February 19 to March 23, the Fund returned -25.24% compared to the BXM^SM return of -30.23%. The BXM’s^SM passive, single contract approach produced less cash flow and resulted in increasing market exposure during the market decline while the Fund’s diversified and actively managed approach generated higher cash flow from written index call options and lower market exposure, resulting in better downside protection.

During the market recovery from March 23 to the temporary recovery peak on September 2, the Fund returned 32.13%, outperforming the BXM^SM return of 27.22%, as the Fund’s approach again provided consistent equity exposure and higher cash flow. From September 2 through year-end, during a market advance that was far from steady, the Fund returned 6.70%, underperforming the BXM^SM return of 7.13%. The Fund’s underperformance for the period was primarily due to a larger loss than the BXM^SM for the month of September. Consistent with its active approach, the Fund began September with the weighted-average strike price of its written index call option portfolio approximately at-the-money, resulting in relatively more exposure to the market’s decline than the BXM^SM, which began the month with very low market exposure as the strong market advance in August put its written index call option deep in-the-money.

The Fund’s equity portfolio returned 20.08% for the year, a performance differential of positive 168 basis points versus the S&P 500^® Index. The measured risk of the Fund was lower than that of the US equity market and the BXM^SM, as its standard deviation of daily returns for 2020 was 22.71%, versus 34.43% and 27.01% for the S&P 500^® Index and the BXM^SM, respectively.

Outlook

Gateway’s investment philosophy is informed by its long history and maintains that the equity market is the most reliable source of attractive long-term returns, despite its high volatility relative to other asset classes and tendency to periodically deliver significant short-term losses. Gateway’s investment philosophy also holds that consistency is key to long-term success and that generating cash flow with index options, rather than seeking to forecast the market, can be a lower-risk way to participate in equity markets. By staying true to this philosophy and continuing to manage strategies consistent with the firm’s historical approach, Gateway assists Fund shareholders in managing risk while pursuing long-term returns in an uncertain environment. As always, Gateway will avoid incorporating forecasts into its investment approach and will not attempt to anticipate how events will unfold.

Hypothetical Growth of $100,000 Investment in Class Y Shares⁴

September 30, 2014 (inception) through December 31, 2020

See notes to chart on page 7.

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GATEWAY EQUITY CALL PREMIUM FUND

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Average Annual Total Returns – December 31, 2020⁴

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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MIROVA GLOBAL GREEN BOND FUND

Investment Goal

The Fund seeks to provide total return, through a combination of capital appreciation and current income, by investing in green bonds.

Market Conditions

Had an investor been told at the beginning of 2020 that during the following year, global unemployment would hit unprecedented levels, almost 2 million people would die from a virus that affected over 87 million people around the world, that this virus would require people to stay in their homes, would cause large global contractions in economic growth even with unprecedented levels of monetary and fiscal stimulus globally — had that investor been then asked their expectations for global markets for that year, it is challenging to believe many would see the market as rising significantly for the year under these circumstances. Yet this is exactly what has unfolded over the last 12 months.

In early November specifically, the announcement that several vaccines were found effective triggered a wave of market optimism that further buoyed the already supportive momentum observed over October after the late September sell-off. This occurred amid the backdrop that it was likely the United States would have a more conventional president in the White House and a Brexit agreement between the UK and the EU came to fruition. This further boosted markets: All credit segments rallied with Investment Grade (IG) and High Yield (HY) spreads having retraced back to their mid-February 2020 levels, i.e. the period prior to the pandemic-driven panic. More specifically, the Bloomberg Barclays Euro Aggregate Corporate Average Option-Adjusted Spread Index stood at 0.92% as of December 31, 2020 — a relatively tight level, from a historical point of view. In such a one-way, risk-on market, high betas — be it in the form of subordinated debts or of pure senior high yield — logically outperformed investment grade. Of course, cyclical credits also performed well as market makers were modelling scenarios under which the probability of a rapid recovery in mobility, travel or leisure, amongst a flurry of other sectors, was growing, something that has subsequently fueled spread tightening for industries such as automotive, transportation, and gaming.

Once again, the backbone of all those moves remains central bank policies: the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan with accommodative measures, such as massive bond purchase programs, continued to play their role, as they had all over the second and third quarters; this is of course exacerbating the impact of a relatively modest net supply.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of the Mirova Global Green Bond Fund returned 7.85%, at net asset value. The Fund outperformed its benchmark, the Bloomberg Barclays MSCI Green Bond Index, which returned 6.67%.

Explanation of Fund Performance

The Fund faced some challenges during the first quarter where it underperformed its benchmark by 1.61%. This under-performance was due to both allocation and security selection. At that time, the long position on corporate versus government bonds (specifically German bonds) detracted as did the long exposure on high beta issuers within the corporates (hybrids), financials (Tier 2) and quasi sovereign (hybrids). During this time, corporate issues became very attractive considering the full support of central banks, and the Fund increased its exposure to corporate issuers during March, accordingly.

After closing the books on the first quarter of 2020, we’ve seen a steady, V-shaped market recovery and, broadly speaking, corporate credit outperformed for the remainder of 2020, primarily within investment grade, and high yield followed later in the fourth quarter of 2020.

Amid this backdrop we saw the Fund outperform its benchmark by 1.15%, 0.69%, and 0.97%, respectively, over the second, third, and fourth quarters.

In the fourth quarter, the continued market recovery took credit spreads to almost pre-pandemic levels, which led us to take profit by reducing corporate credit exposure from 70% down to 56%. Alternatively, we have been investing in emerging market green sovereigns

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MIROVA GLOBAL GREEN BOND FUND

(Chile, Hungary, Mexico) which offered attractive returns and kept our high-yield exposure at ~10%. From a credit-cycle point-of-view, we have been increasing our cyclical exposure (mainly through automotive and capital goods) versus more defensive securities in order to take advantage of the economic recovery post-pandemic.

All in all, the majority of outperformance in 2020 came from allocation. Security selection was costly until November from which point it recovered enough to close the year slightly positive as a contributor to outperformance as well. Yield curve positioning and duration acted in a somewhat opposite manner as our long duration positioning for the US which paid off until August when it pulled-back and ended up flat year-to-date.

Outlook

In many ways, it seems as though we are picking-up 2021 right where we thought we were to start 2020. It is reminiscent in terms of market configuration where investors are seeking yield, compression trading is predominantly driving the market, and we see historical lows spread-wise and highs in price (including in some equity indices). However, as we have just witnessed with the Covid-19 pandemic derailing commonly accepted outlook for 2020; 2021 could too, be full of surprises, but we believe those will be positive on the economic front, with vaccine execution taking center stage. According to our constructive scenario, main performance contributors will be security selection, duration, geopolitical pressures tied to changing administrations in the United States, and Covid-19 related knock-on effects tied to vaccine dissemination and pandemic related-spending.

Hypothetical Growth of $100,000 Investment in Class Y Shares²

February 28, 2017 (inception) through December 31, 2020

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Average Annual Total Returns – December 31, 2020²

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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MIROVA GLOBAL SUSTAINABLE EQUITY FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

Had investors been told at the beginning of 2020 that in the upcoming year global unemployment would hit unprecedented levels, almost 2 million people would die from a virus that affected over 87 million people around the world, that this virus would require people to stay in their homes and would cause large global contractions in economic growth even with unprecedented levels of monetary and fiscal stimulus globally — it is unlikely that many would have predicted the market rising significantly for the year. Yet this is exactly what unfolded over the last 12 months.

Monetary policy that encouraged risk taking can be partially credited for the strong performance of equities for much of the year after a sharp decline in March, but perhaps a stronger driver has been hope. The fourth quarter of the year certainly served to boost hope and optimism that the world would soon return to something closer to normal as pharmaceutical companies announced the development of effective vaccines to treat the Covid-19 virus. It is often said that the stock market is forward looking, though not well explored is whether the stock market is accurate in its forward-looking view. Many are happy to put 2020 in the rear-view mirror, and if the market is accurate in its view, 2021 should be a much better year — certainly one can hope that is the case.

Performance Results

For the 12 months ended December 31, 2020, Class Y Shares of the Mirova Global Sustainable Equity Fund returned 32.42% at net asset value. The Fund outperformed its benchmark, the MSCI World Index (Net), which returned 15.90% over the same period. It is important to note that there are material differences between the Fund and this benchmark.

Explanation of Fund Performance

The biggest contributors to relative performance were stock selection, particularly in Industrials, Utilities and Healthcare. Stocks held in Industrials and Utilities benefited from growth in alternative energy, particularly Vestas Wind Systems A/S, a wind turbine manufacturer, and Orsted A/S, an offshore wind utility. Both increased sharply on strong growth in demand for alternative energy during the year as well as a very positive outlook for growth given the objectives outlined by the Biden administration around climate change. Within Healthcare, Danaher Corp. and Thermo Fisher Scientific Inc., two companies broadly exposed to increased spending in healthcare, were strong performers for the year.

The biggest detractors from relative performance were stock selection in Consumer Discretionary and cash held in the portfolio. Within Consumer Discretionary, companies affected by cyclical demand and companies with a brick and mortar presence declined as Covid-19 detracted from performance. This included building company Sekisui House, eyeglass manufacturer EssilorLuxottica and auto component manufacturer Valeo. The worst performing stock for 2020 was Danone SA, which reported weak organic growth. Investors remain concerned about the company’s ability to reinvigorate its revenue growth.

The portfolio invests in companies that offer solutions to and/or are expected to benefit from the demographic, technological, environmental and governance-related transitions that Mirova believes will transform the world’s economies and societies during the next decade.

With many governments still committed to keeping global warming limited to a 2-degree Celsius scenario, we expect climate change to remain a driver of political debate and the portfolio will continue to shy away from fossil fuel extraction in favor of renewables and companies focused on energy efficiency. Although cyclical exposure increased modestly during the quarter as a result of portfolio adjustments (see below), the team continues to like the downside protection that companies with strong balance sheets, solid management teams and positive exposure to long-term secular trends potentially offer.

During the year, the investment team initiated positions in Intuitive Surgical, Inc., Bright Horizons Family Solutions, Inc., Ball Corp., and Orpea SA and sold outright Fresenius SE & Co. and Gilead Sciences, Inc.

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Intuitive Surgical was added in April. The company’s main product is an advanced surgical system, daVinci Surgical System, and its related instruments and services. The system includes surgeon’s console, patient-side cart, and high performance vision system. Intuitive Surgical provides solutions for global healthcare challenges as it innovates and manufactures surgical robotic systems that allow minimally invasive surgery and provide real-life images of the patient’s anatomy during surgery. It is uniquely positioned with the best system in the robotic surgery industry and provides a very attractive value proposition for hospitals, patients and doctors. Its competitive advantage is well protected, its financials are very strong, and its top management team has a very good track record over the long run. The position was initiated after its valuation became more attractive.

The position in Bright Horizons was also initiated in April. Bright Horizons is a provider of childcare, early education and back-up dependent care services primarily under multi-year contracts with employers who offer childcare services as part of their employee benefits package. They are the leader in employer-sponsored center-based child care. As the market leader in daycare centers, Bright Horizons is a strong beneficiary of a secular trend towards two-working-parent households. Economies of scale should continue to drive operating leverage, and Bright Horizons is a well-run company with attractive business return metrics. We initiated the position after the valuation became much more attractive given the long-term prospects of the company.

In July, Fresenius was sold because of the deterioration of both the sustainability and fundamental opinions. Regarding the sustainability opinion, there are several recent controversies pertaining to the business of Fresenius Medical Care, of which Fresenius owns more than 30% of the shares. There was a $231 million fine for international misconduct allegations by the SEC/DOJ including kickbacks to the American Kidney Fund in exchange for business and an ongoing investigation by the US Department of Health and Human Services for healthcare fraud. For our fundamental opinion, the execution track record of the management team is below our expectations and we had lower conviction on the update.

A position in Ball Corp. was initiated in September. Founded in 1880 and headquartered in Broomfield, Colorado, Ball Corp. supplies aluminum packaging products to the beverage, personal care, automotive, paint, healthcare, and household products industries. It operates in four segments: Beverage Packaging, North and Central America; Beverage Packaging, South America; Beverage Packaging, Europe; and Aerospace. Ball Corp. is well positioned to benefit from increased awareness and regulation around single-use plastic as the largest aluminum packaging manufacturer. Aluminum cans have significantly higher recycling rates than other materials and are composed of more recycled content than competing packaging types. In addition, they are infinitely recyclable in a true “closed loop” as opposed to plastic which is typically “down-cycled” into products like carpet fiber or landfill liner. While glass is also infinitely recyclable, it is heavier than aluminum and thus requires more energy to transport. As the value per ton of aluminum is quite high and recycled content is desirable for manufacturers as it reduces manufacturing costs, aluminum recycling rates and recycled content should remain at high levels relative to plastic and glass which are less economical to recycle. As the largest player in all three geographic regions in which it operates, the company benefits from economies of scale from its manufacturing footprint. Ball Corp. has been divesting businesses over the past several years and focusing growth capital expenditures on faster growing markets, positioning the company to post stronger revenue growth and sustained margin improvement in the years ahead.

In November, Gilead Sciences was sold. While the company remains the global leader in HIV treatment, its HCV franchise has been declining and lack of a robust product pipeline raises concerns around future growth drivers for the company.

Also in November, we initiated a position in Orpea. Orpea is the leading European provider of dependency care through nursing homes, assisted-living facilities, post-acute and rehabilitation hospitals, and psychiatric hospitals. Orpea is addressing the increasingly important need for senior healthcare in all its forms, from retirement homes to homecare and home services. The company is well positioned to benefit from strong growth drivers including an aging population and public financing constraints. The company has a strong strategic position given its high-quality network and attractive locations and has solid opportunities for growth through its pipeline in Latin America and Central East Europe.

Finally in November, the team trimmed several existing positions in companies that had done very well year-to-date and used the proceeds to invest in existing positions in financials and other cyclically exposed sectors of the market that had underperformed. Announcements from Pfizer and AstraZeneca at the beginning of the month removed risks around when and if a vaccine would be developed, and provided a higher level of visibility into the timing of the economic recovery. These announcements removed a sizable overhang on holdings that had cyclical exposure and increased the team’s conviction in these companies.

Although cyclical exposure increased modestly by the end of the year, the team continues to like the downside protection that companies with strong balance sheets and positive exposure to long-term secular trends potentially offer. Geographically, the portfolio currently has a small bias to European names (mainly euro-zone), while being underweight US names. This is mainly a function of where the team is currently finding attractively valued opportunities. In terms of sector exposure, the portfolio currently has no exposure to energy (oil and gas extraction) or real estate, and it is underweight financials. This is mainly driven by valuation (real estate) and the thematic and sustainability approach of the team.

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MIROVA GLOBAL SUSTAINABLE EQUITY FUND

As the team expects trends like the digitalization of our economy to accelerate along with support for the healthcare sector in response to Covid-19, the portfolio remains overweight technology and healthcare. There is also an underweight position in the more defensive consumer staples sector, which to some extent is offset by an overweight position in materials (mainly natural food ingredients). With many governments still committed to keeping global warming limited to a 2-degree Celsius scenario, the team expects climate change to remain a driver of political debate and the portfolio will continue to avoid fossil fuel extraction in favor of renewable energy and energy efficiency companies.

Outlook

The portfolio remains focused on long-term secular trends around demographics, technology, the environment and governance. Several of these trends have seen strong growth and higher levels of visibility during this pandemic. While demand for energy has fallen due to the economic slowdown, market share of renewable energy continues to increase, and climate change remains an important topic that many countries are addressing through policies around increased generation from renewable energy. The digitalization of the economy is accelerating as people continue to work from home and shop online. These trends are expected to continue to grow after the pandemic, and the portfolio will continue to focus its holdings on companies well positioned for a changing world.

Looking longer-term, the team continues to believe companies addressing long-term secular trends will continue to outperform. There has been a sharp increase in healthcare spending in an effort to find a vaccine and treatment for Covid-19, but even before this year spending on healthcare has shown robust growth as populations age in developed countries and, globally, populations increase their focus on health and well-being. Some trends within technology also saw sharp growth in 2020, as people shopping and working from home benefited companies exposed to e-commerce and cloud computing. It seems unlikely this growth will reverse after the pandemic is behind us. The team sees a long runway for continued growth for companies positively exposed to these trends, and expects robust growth for renewable energy as government policies, as well as pure economics, will provide strong tailwinds.

Equities broadly look expensive in absolute terms, particularly in the US, which has outperformed other markets for several years. However, when compared to bonds, equities look inexpensive on a relative basis and are supported by the prospect of a strong economic recovery. It will be incredibly important, however, to have a solid equity valuation discipline as there are several stocks, particularly in the US, whose prices appear to have dislocated from long-term fundamentals. The team also continues to see risk around the pace of inoculations and the trajectory of the global recovery. While we expect to see a strong economic recovery in 2021, numerous people have lost their jobs, their savings or their small businesses. These will take time to rebuild — even longer in emerging countries — and there is some risk around the market’s idea that the economic recovery is V-shaped.

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Hypothetical Growth of $100,000 Investment in Class Y Shares³

March 31, 2016 (inception) through December 31, 2020

See notes to chart on page 15.

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

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MIROVA GLOBAL SUSTAINABLE EQUITY FUND

Average Annual Total Returns – December 31, 2020³

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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MIROVA INTERNATIONAL SUSTAINABLE EQUITY FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

Had investors been told at the beginning of 2020 that in the upcoming year global unemployment would hit unprecedented levels, almost 2 million people would die from a virus that affected over 87 million people around the world, that this virus would require people to stay in their homes and would cause large global contractions in economic growth even with unprecedented levels of monetary and fiscal stimulus globally — it is unlikely that many would have predicted the market rising significantly for the year. Yet this is exactly what unfolded over the last 12 months.

Monetary policy that encouraged risk taking can be partially credited for the strong performance of equities for much of the year after a sharp decline in March, but perhaps a stronger driver has been hope. The fourth quarter of the year certainly served to boost hope and optimism that the world would soon return to something closer to normal as pharmaceutical companies announced the development of effective vaccines to treat the Covid-19 virus. It is often said that the stock market is forward looking, though not well explored is whether the stock market is accurate in its forward-looking view. Many are happy to put 2020 in the rear-view mirror, and if the market is accurate in its view, 2021 should be a much better year — certainly one can hope that is the case.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of the Mirova International Sustainable Equity Fund returned 23.60% at net asset value. The Fund outperformed its benchmark, the MSCI EAFE Index (Net), which returned 7.82%.

Explanation of Fund Performance

Broadly, stock selection across sectors made the biggest contribution to returns, with allocation detracting from relative performance. The largest performance driver was stock selection within Utilities, where offshore wind utility Orsted performed very well. Also contributing strongly to performance was stock selection within Financials, where all six financial names had positive returns for the year. Detracting from performance were two Materials names, Symrise and Chr. Hansen, two natural ingredient manufacturers.

The portfolio invests in companies that offer solutions to and/or are expected to benefit from the demographic, technological, environmental and governance-related transitions that Mirova believes will transform the world’s economies and societies during the next decade.

As trends like the digitalization of our economy, which saw strong growth as a result of Covid-19, are expected to continue to grow strongly, the portfolio remains overweight Technology. There is also an underweight position in the more defensive Consumer Staples sector which, to some extent, is offset by an overweight position in Materials. With many governments still committed to keeping global warming limited to a 2-degree Celsius scenario, we expect climate change to remain a driver of political debate and the portfolio will continue to shy away from fossil fuel extraction in favor of renewables and companies focused on energy efficiency. Although cyclical exposure increased modestly as a result of portfolio adjustments (see below), the team continues to like the downside protection that companies with strong balance sheets, solid management teams and positive exposure to long-term secular trends potentially offer.

The investment team trimmed several existing positions in companies that had done very well year-to-date and used the proceeds to invest in held positions that had underperformed in Financials and other cyclically exposed sectors of the market. Announcements from Pfizer and AstraZeneca at the beginning of November removed risks around when and if a vaccine would be developed and provided a higher level of visibility into the timing of the economic recovery. These announcements removed a sizable overhang on stocks held that had cyclical exposure and increased the team’s conviction in these companies.

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MIROVA INTERNATIONAL SUSTAINABLE EQUITY FUND

Outlook

Looking longer-term, the team continues to believe companies addressing long-term secular trends will continue to outperform. There has been a sharp increase in healthcare spending in an effort to find a vaccine and treatment for Covid-19, but even before this year spending on healthcare has shown robust growth as populations age in developed countries and, globally, populations increase their focus on health and well-being. Some trends within technology also saw sharp growth in 2020, as people shopping and working from home benefited companies exposed to e-commerce and cloud computing. It seems unlikely this growth will reverse after the pandemic is behind us. The team sees a long runway for continued growth for companies positively exposed to these trends, and expects robust growth for renewable energy as government policies, as well as pure economics, will provide strong tailwinds.

Equities broadly look expensive in absolute terms, particularly in the US, which has outperformed other markets for several years. However, when compared to bonds, equities look inexpensive on a relative basis and are supported by the prospect of a strong economic recovery. It will be incredibly important, however, to have a solid equity valuation discipline as there are several stocks, particularly in the US, whose prices appear to have dislocated from long-term fundamentals. The team also continues to see risk around the pace of inoculations and the trajectory of the global recovery. While we expect to see a strong economic recovery in 2021, numerous people have lost their jobs, their savings or their small businesses. These will take time to rebuild — even longer in emerging countries — and there is some risk around the market’s idea that the economic recovery is V-shaped.

Hypothetical Growth of $100,000 Investment in Class Y Shares²

December 28, 2018 (inception) through December 31, 2020

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Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Average Annual Total Returns – December 31, 2020²

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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MIROVA U.S. SUSTAINABLE EQUITY FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

The Mirova U.S. Sustainable Equity Fund was launched on December 15, 2020 as we were very much in the home stretch of a year, marred by the Covid-19 pandemic, which many will be happy to put in the rear-view mirror, and, if the market is accurate in its view, 2021 should be a much better year.

For the ~2-week period where the Fund did participate, there broad market saw continued positive news around a Covid-19 vaccine announced in November which fueled continued optimism in December.

Performance Results

Mirova U.S. Sustainable Equity Fund was launched on December 15, 2020. For the period ended December 31, 2020, Class Y shares of the Fund returned 2.10% at net asset value. The Fund outperformed its benchmark, the S&P 500^® Index, which returned 1.72%.

Explanation of Fund Performance

Energy was the strongest performing theme. The top performing stocks were alternative energy holdings, First Solar and Ormat, which performed strongly on policies President-Elect Biden has outlined supporting the growth of alternative energy. The Mobility theme also performed well, both on the expectation of a cyclical rebound in 2021 and on exposure in that sector to electrification of vehicles through Aptiv, which should see more robust growth if Biden’s proposed policies are enacted.

The biggest detractors from relative performance were stock selection in Materials and the Healthcare sector. Within Materials, Ecolab declined on continued investor concern over the lingering impact of Covid-19 on its hospitality business. Stock selection in Healthcare detracted from performance as some names held in the portfolio that had performed well year-to-date saw profit taking at year-end. Within Healthcare, Thermo Fisher declined slightly as investors took some profits after strong performance of the stock throughout the year. Verizon also declined slightly for the two-week period on minimal news.

Outlook

The portfolio focuses on long-term secular trends around demographics, technology, the environment and governance. Several of these trends have seen strong growth and higher levels of visibility through this pandemic. While demand for energy has fallen due to the economic slowdown, market share of renewable energy continues to increase, and climate change remains an important topic that many countries are addressing through policies related to renewable energy. The digitalization of the economy is accelerating as people continue to work from home and shop online. These trends are expected to continue growing after the pandemic. The portfolio will continue to focus its holdings on companies well positioned for a changing world.

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Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Total Returns – December 31, 2020³

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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NATIXIS OAKMARK FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

Despite ongoing economic impacts from Covid-19, key US indexes touched record high levels in the fourth quarter of 2020 and both the Dow Jones Industrial Average and S&P 500^® closed out the year at record levels. Reports in November about the greater than 90% efficacy of two vaccine candidates and the subsequent emergency use authorizations and inoculation rollout led to increased investor confidence that a recovery was within sight. The certification of presidential election results and the creation of a new stimulus program likely further soothed investor anxiety.

Even though a forward-looking market proved advantageous to investors, near-term conditions for the real economy, especially Main Street businesses, remained challenging. However, we took note of some positive indicators, such as accelerated manufacturing activity that reached its highest level in 17 years in October, according to the Institute for Supply Management. In addition, the National Association of Realtors disclosed that existing home sales jumped 26.6% in October from the prior year helped by near-record low mortgage rates, while home prices increased due to tight inventory. Also, consumer sentiment climbed past economists’ expectations in November and early December. At the same time, retail sales fell in October and November. Nevertheless, the National Retail Federation projected holiday spending will increase between 3.6% and 5.2% compared with last year, owing to limited travel and entertainment spending along with low energy costs. While we await final holiday retail data, we are hopeful that the shift to online purchasing, which was predicted to surge up to 34% above 2019 levels, compensated for dramatically reduced in-person shopping due to Covid-19 circumstances.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of Natixis Oakmark Fund returned 13.28% at net asset value. The Fund underperformed its benchmark, the S&P 500^® Index, which returned 18.40%.

Explanation of Fund Performance

As value investors with an emphasis on individual stock selection, our sector weights are a byproduct of our bottom-up process. On an absolute-return basis, the communication services sector gained the most value, and holdings in the energy sector lost the most value.

Wells Fargo and American Airlines Group were the largest detractors from fund performance for the calendar year. Legacy regulatory issues and a temporarily inflated cost base, including a $3.1 billion reserve build, negatively impacted Wells Fargo and compounded an already challenging operating environment. The company’s first-quarter earnings per share amounted to $0.01, down from $1.20 at the year-ago period. Wells Fargo guided for an 11% reduction in fiscal year 2020 net interest income and indicated that the US Federal Reserve’s (the “Fed”) decision to cap dividend payments would translate to a dividend cut for the company. In mid-July, the company released second-quarter results that were weaker than we had expected and also lagged market projections. Total revenue fell nearly 16% from a year earlier to $17.8 billion, partly driven by net interest income that declined $2.2 billion (18%), while expenses rose $1.1 billion. Total credit loss provisions increased more than $8 billion in the second quarter to $20.4 billion, and the allowance coverage for total loans reached 2.2% at quarter-end. This provision level is essentially in line with the annualized severely adverse scenario for net charge-offs. CFO John Shrewsberry stated that the current allowance adequately captures the expected loss content in the loan portfolio. We spoke with CEO Charles Scharf in September and discussed progress the bank has achieved in its recently announced $10 billion cost reduction program. While Scharf declined to provide specific details of the cost cuts, he did point to inflated layers of management, high staffing numbers, too many branches and duplicative cost structures across divisions given the highly decentralized nature of the business as potential areas for improvement. Wells Fargo’s third-quarter results included total revenue that was about 5% stronger than market expectations, while earnings per share fell short of projections by about 5%. The

21  |

company booked a charge of $961 million for legacy customer remediation expenses related to sales practices issues. In addition, Wells Fargo realized a $718 million restructuring charge (predominantly related to severance costs), which management expects will lead to savings of $1 billion per year. On an operational basis, customer deposits grew 8% from the previous year and loans shrank by 2%, both of which were heavily impacted by the asset cap imposed by the Fed. Later, the company announced plans to suspend compensation increases for top earners (employees who are paid more than $150,000 annually) as part of its effort to contain costs. Management has started gauging bidders’ interest in a variety of businesses with talks emerging in recent weeks to potentially sell a $607 billion asset manager, a corporate-trust unit and a $10 billion student-loan portfolio. We are pleased that management is taking action that we think can strengthen the company’s performance and benefit shareholders.

In the latter part of January 2020, American Airlines Group reported fourth-quarter results that aligned with market expectations. We were pleased that the company’s operational performance improved despite disruptions caused by the Boeing MAX aircraft grounding and ongoing contract negotiations with the Transport Workers Union and International Association of Mechanics and Aerospace Workers (fortunately, American Airlines and union members reached a tentative agreement on the last day of January). However, the share price of American Airlines plunged in February, along with share prices of other travel-related firms, from escalating concerns over the spread of Covid-19. Ultimately, we sold out of our position in favor of other investments we believed had healthier risk/reward profiles.

The leading contributors to fund performance for the year were Netflix and Facebook. Fourth-quarter earnings from Netflix included paid net additions of 8.8 million, which exceeded management’s guidance for 7.6 million net additions for the quarter. For the full year, net additions amounted to 27.8 million. Later, Netflix’s first-quarter earnings report included paid net subscriber additions of 15.8 million, which handily bested guidance for 7 million additions. The stay-at-home conditions prompted by Covid-19 led to the addition of 26 million new paying subscriptions year-to-date through June, compared with 28 million additions achieved in total for 2019. Revenues for the six-month period rose 26% from the year-ago period, and earnings per share more than doubled. In October, the company released third-quarter results with revenue of $6.44 billion that surpassed market forecasts of $6.39 billion, while earnings per share and total streaming paid net subscription additions fell short of expectations. Along with the release, management issued fourth-quarter guidance for revenue of $6.57 billion, earnings per share of $1.35 and total net additions of 6.00 million. These projections indicated to us that Netflix is on track to exceed our full-year 2020 estimates by a large margin, and if the company achieves these targets, it can likely surpass 200 million global subscribers by year-end, leading to revenue of roughly $25 billion, earnings of nearly $5 billion and $2 billion of free cash flow. In November, Netflix announced plans to increase prices for US subscribers, and investors reacted positively to the news. Notably, generating additional near-term revenue and cash flow enables Netflix to accelerate its competitive momentum by investing more in content and spreading the cost over a larger subscriber base. Although its share price advanced in recent months, we still believe our investment in Netflix offers investors sufficient upside potential.

Facebook’s first-quarter earnings report included year-over-year increases in revenue and earnings per share of 18% and 101%, respectively. Management stated that the current pandemic has produced increased engagement on the platform as averages of daily active users rose 11% and monthly active users increased 10%. However, the company indicated that demand for advertising had declined and pressured pricing for ads in the latter part of the first quarter. We found it noteworthy that for the first time CEO Mark Zuckerberg stated his intention to expand margins over the long term and that management is looking for ways to control expenses over time. The company continues to invest heavily in products and new engineering talent, which we think could pave the way for future growth. Facebook’s second-quarter results were good compared with our expectations, with year-over-year organic revenue growth of 12%. Furthermore, total revenue of $18.69 billion and earnings per share of $1.80 exceeded market forecasts by nearly 8% and 29%, respectively. Notably, daily and monthly active users each advanced 12% and new monthly average users grew by 287 million, which reflects an increase of 59% over the trailing 12-month additions in the previous year. Facebook now estimates that 3.1 billion people use one of its services every month and 2.5 billion engage every day. Later, the company reported third-quarter revenue growth of 22% from the prior year to $21.47 billion, which beat market forecasts of $19.80 billion by a healthy margin. Earnings per share rose 28% to $2.71 and were also stronger than market projections of $1.90. Interestingly, the company achieved these results while realizing a slight decline from the prior quarter in both daily and monthly active users in the US and Canada. The sequential decrease was an outcome management expected since Covid-19 had boosted user activity significantly in the second quarter, though daily and monthly active users each grew 12% from a year ago. Also in the fourth quarter, the US Federal Trade Commission (FTC) filed an antitrust lawsuit against Facebook regarding its acquisitions of Instagram and WhatsApp. In response, Facebook noted that the FTC approved both acquisitions. Later, multiple states sued Google for alleged collusion with Facebook in the online advertising marketplace. In the meantime, management announced its intentions for increased monetization of WhatsApp via advertising, e-commerce and payments. While we continue to monitor the situation, Facebook still trades at a meaningful discount to our perception of its intrinsic value and, thus, offers a compelling reason to own.

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NATIXIS OAKMARK FUND

Outlook

A recent survey conducted by the National Association for Business Economics revealed that 73% of its 48-member panel of professional forecasters expect the economy will return to a pre-pandemic level by late 2021. This latest survey reflects greater optimism than the results from the prior survey, when just 38% of respondents said they thought a full recovery could occur before 2022. We, too, are optimistic about the future and contend that pent-up demand today for face-to-face experiences, such as travel, restaurant dining and event attendance, can lead to an outsized economic rebound after restrictions are lifted. We have worked diligently throughout 2020 to best position our portfolios to benefit from the eventual turnaround. Meanwhile, we continue to opportunistically seek out new investment candidates and rebalance portfolios when appropriate.

Hypothetical Growth of $100,000 Investment in Class Y Shares³

December 31, 2010 through December 31, 2020

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

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Average Annual Total Returns – December 31, 2020³

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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NATIXIS OAKMARK INTERNATIONAL FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

Similar to 2016, 2020 was a year of extremes, driven by exogenous factors ranging from the Covid-19 pandemic to Brexit negotiations with elections in between. Most recently, markets reacted favorably to events in the fourth quarter, particularly the approval and emergency use authorization of multiple vaccines aimed at preventing the spread of Covid-19.

Meanwhile, the UK and European Union negotiated arduously throughout the year, finally accomplishing an agreement in December that eliminated the possibility of a hard Brexit outcome. In the US, the four-year presidential election cycle produced a more balanced outcome than many had expected. The market proved relieved at both the elimination of uncertainty and the lower probability of big changes. Later in the fourth quarter, President Trump signed the country’s long-debated second economic relief bill into law, sending direct payments to some individuals and families as well as further extending unemployment benefits.

These events propelled equity prices higher across the globe for a strong finish to a year that had earlier experienced a bear market. Ultimately, the Nikkei 225 Index soared to a 30-year high in Japan, the German DAX Index surged to a record figure, and both the Dow Jones Industrial Average and S&P 500 Index^® closed out the year at record levels.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of Natixis Oakmark International Fund returned 4.32% at net asset value. The Fund underperformed its benchmark, the MSCI World ex USA Index (Net), which returned 7.59%.

Explanation of Fund Performance

Geographically, our average weightings for the year were 82% in Europe, 3% in Australia and 3% in Japan. The remaining positions were in Canada, South Korea, South Africa, China, India, Mexico, Indonesia, Taiwan and the United States.

On an absolute-return basis, shares in the information technology sector produced the most positive collective return, while shares in the energy sector lost the most value.

The largest detractors from return were Rolls-Royce Holdings and Lloyds Banking Group. Effects from Covid-19 drove the share price decline of Rolls-Royce Holdings for the reporting period. Ahead of issuing full-year results in February 2020, management stated that design fixes for the Trent 1000 engine and higher costs associated with the Trent 1000 TEN engine would impact 2019 free cash flow and earnings. In May, management stated expectations for a significant net cash outflow during the second quarter. Rolls-Royce issued a trading update in July, which proved disappointing to investors. The company indicated it would experience a GBP 3 billion cash outflow in the first half and projected a GBP 4 billion outflow for the entire year, which was worse than we had expected. Rolls-Royce also anticipates a 55% decline in wide-body flight hours this year, which was also a larger decrease than we had anticipated. We spoke with management early in September and learned it wanted to execute an equity raise as a buffer given the huge amount of uncertainty related to the timing of a recovery. Ultimately, Rolls-Royce opted not to sell a stake in the company to a sovereign wealth fund, but did announce a ten-for-three issuance at GBP 0.32 per share to raise approximately GBP 2 billion. This is part of a GBP 5 billion recapitalization package meant to strengthen its balance sheet and ensure adequate liquidity even if flight hours show only modest improvement versus current trends in 2021. In December, the company downgraded its full-year free cash flow guidance from GBP -4 billion to GBP -4.2 billion. We spoke with CEO Warren East in December and discussed credits provided to airlines to compensate for missed flights to be used against future maintenance spend, which we believe will have a negative impact on free cash flow in 2021. The company announced its first disposal of its civil nuclear instruments business earlier in December, and East noted further disposals would include ITP Aero and Bergen. Although we continue to believe that Covid-19 will cause a material and long-lasting disruption to the company’s civil business, we also think its power systems and defense business face less disruption. While we still hold a position in Rolls-Royce, we are monitoring the situation closely.

Lloyds Banking Group’s fourth-quarter results issued early in 2020 fell short of market projections as revenue, underlying profit and pretax income all underperformed forecasts. For the full fiscal year, total revenue fell 4%, underlying profit fell 7% and pre-provision

25  |

profit declined 3% from a year earlier. Results were also weaker than our estimates, which we attributed to a very difficult 2019 operating environment that was dominated by uncertainty surrounding Brexit and the formation of a UK government. Later, Lloyds’ first-quarter results included net income and underlying profit that declined 11% and 74%, respectively, from the prior year. Although quarterly underlying profit missed our estimates by roughly 7%, after adjusting for a number of one-time items, underlying profit was in line with our full-year expectations. We subsequently spoke with CEO António Horta-Osório who sees scope for material cost savings by redirecting resources and eliminating other expenses, such as travel. Lloyds’ results for the first half of 2020 were also disappointing. Key metrics fell far short of our estimates primarily because of Covid-19. Total revenue from core operations declined 16% from a year ago and operating profit realized a loss of GBP 281 million, driven by a significant impairment provision charge. Management stated that the larger than anticipated provision amount was due to a significantly depressed economic outlook. However, Lloyds’ loan book continues to perform well and actual defaults to date remain stable. In December, a trade agreement between the UK and European Union secured a new economic and security partnership, which reassured investors. Lloyds also released third-quarter earnings that we found to be reasonable considering present macroeconomic conditions. For the full fiscal nine-month period, total revenue fell 17% and underlying operating profit declined 85% from a year earlier. Results were significantly impacted by impairment charges that rose dramatically (+334%) for the full period. However, the vast majority of the impairment charge increase occurred in the first two quarters and eased in the third quarter, which helped drive strong sequential growth of underlying operating profit that totaled GBP 1.2 billion. Other important metrics showed evidence of improvement as well, including retail deposits that rose 7%, which resulted in a loan-to-deposit ratio of 98%, reflecting a healthy liquidity position. Importantly, Lloyds’ balance sheet remains strong as its common equity Tier 1 ratio reached 15.2% in the third quarter (up from 14.6% in the second quarter), which exceeded both management’s target of 12.5% and regulatory requirements of roughly 11%. Management cited additional encouraging signs of a business recovery, including increased mortgage activity, that we think positions the company advantageously as the general economy normalizes. As we have expressed previously, we contend that Lloyds possesses a wide range of strengths to draw upon to reinforce its business during current near-term challenges. Even including its strong fourth-quarter stock price performance, we still believe the company’s shares remain undervalued compared with our estimate of intrinsic value.

The top contributors to the yearly return were Daimler and NAVER. Daimler suspended the majority of its production in Europe in the first quarter due to Covid-19 weighing on its share price. The company’s fiscal full-year results aligned with management’s pre-announcement. Revenue rose across industrial business segments and produced total revenue growth of 1.2% from a year ago, while the operating margin largely met our expectations. However, earnings, net profit and earnings per share all fell in excess of 60% year-over-year, owing to litigation costs and electric vehicle production initiatives. Importantly, Daimler produced EUR 1.4 billion of free cash flow from industrial operations in 2019, which far exceeded our cash flow forecasts. Daimler’s first-quarter earnings report bested market expectations as exhibited by revenues (EUR 37.22 billion vs. EUR 34.18 billion) and adjusted earnings (EUR 719 million vs. EUR 648 million). Management confirmed its previous outlook for a decline in total revenue and earnings for 2020 compared to the year-ago period. The company also noted it planned to gradually accelerate production. To that point, Daimler resumed manufacturing passenger cars in two German plants at the end of April. We spoke with CEO Ola Källenius and CFO Harald Wilhelm and discussed some short-term measures enacted to boost profitability, which include utilizing a short-time work program in coordination with the German government to reduce payroll expenses. Importantly, management committed to not postponing any projects that are important for the future of Daimler, including production of the new Mercedes-Benz S-Class vehicle (which accounts for 3%–4% of volumes and 15% or more of profits) and electrification (Daimler’s battery plant in Germany is the only plant globally that has never shut down). Though year-to-date Mercedes-Benz cars and vans volumes were down 22% and 29% in the second quarter, respectively, we appreciate that revenue in the segment was only down 14.8%. We think this reflects significant product mix benefits within both markets as well as resilient pricing dynamics. China also contributed with 17% year-over-year growth, despite the overall Chinese auto market being down 4%. Free cash flow was also significantly stronger than had been expected, and we believe this is a result of management’s stringent focus on improving cash flow generation. Later, Daimler announced that it reached an agreement in principle with various US authorities to settle civil and environmental claims regarding emissions control systems on about 250,000 diesel passenger cars and vans in the US. The company also reached an agreement with the plaintiffs’ counsel to settle the ongoing class action lawsuit. Importantly, the costs associated with the settlements are covered by existing provisions, which removes a material area of uncertainty for Daimler. The company’s third-quarter revenue largely met market expectations, and earnings per share of EUR 1.92 were well ahead of market forecasts of EUR 1.66. Early in December, CEO Ola Källenius commented that the company is seeing a “remarkable” Mercedes-Benz sales recovery in China, its largest and most profitable market, as the segment reached the sixth consecutive month of double-digit sales growth in November.

NAVER’s full-year results met our estimates. Year-over-year total revenue advanced 18%, which led to operating profit of KRW 1.2 trillion. Revenue in the core business platform segment grew 13% in the fourth quarter after the company realized 17% growth in the previous two quarters. In addition, NAVER indicated plans to prioritize shareholder returns and compensate for heightened spending that occurred in the past two years. To that end, management committed to distribute 30% of the company’s average two-year free cash flow to shareholders by way of dividend payments and share repurchases. Later, NAVER’s first-quarter results reflected year-over-year advances in revenues and operating profit of 15% and 7%, respectively. Elevated shopping-search advertisement activity

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NATIXIS OAKMARK INTERNATIONAL FUND

drove revenue to increase 12% in the business platform unit, which we view as a key operating segment. At the same time, display and general search advertisement revenues were weak, which was not surprising considering pressure from Covid-19. We spoke with management in May and learned that April advertising sales weakened versus the first quarter. However, NAVER planned to launch a new advertising service called Smart Channel, which places cost-per-click banner advertisements at the top of various key tabs on the NAVER app. Later, the company received regulatory approval to merge its Japanese subsidiary, Line Corp, with Yahoo Japan (Z Holdings). This combination will create one of the largest internet companies in Japan, and we are optimistic about its long-term prospects. NAVER also spun out its financial technology business, NAVER Financial, and received a sizable investment from an outside party. We expect this business to generate strong revenue growth in the coming years and to be among the leaders in South Korea’s fintech industry. In our view, the company maintains a dominant market position owing to its high-quality search results that stem from its expertise in processing South Korean syntax. Compared with competitor Google, NAVER’s search capabilities tend to produce results that have more relevance for its users, which we believe can lead to ongoing benefits to the company and shareholders.

Outlook

This year amounted to a volatile 12 months for investors. Though traumatic and difficult to tolerate, we recognize that market instability can unearth investment opportunities for those who are patient and willing to weather the storm. In times when others chase performance or lose conviction based on news headlines and irrational reactions, we remain alert to subsequent opportunities caused by short-term investors to build positions in quality companies that are trading at large discounts to our perception of their intrinsic value. This discipline is deeply embedded in our philosophy and process.

The Nikkei Stock Average (Nikkei 225) is a price-weighted average of 225 Japanese companies listed in the First Section of the Tokyo Stock Exchange. Constituents are selected based on liquidity and industry representation. This index is unmanaged and investors cannot invest directly in this index.

The Deutsche Boerse AG German Stock index is an equity index that measures the share performance of the 30 largest German companies in terms of exchange turnover and market capitalization, and is thus an established indicator for the performance of the German economy as a whole. This index is unmanaged and investors cannot invest directly in this index.

The Dow Jones Industrial Average is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. This index is unmanaged and investors cannot invest directly in this index.

The S&P 500 Total Return Index is a float-adjusted, capitalization-weighted index of 500 U.S. large-capitalization stocks representing all major industries. It is a widely recognized index of broad, U.S. equity market performance. Returns reflect the reinvestment of dividends. This index is unmanaged and investors cannot invest directly in this index.

Hypothetical Growth of $100,000 Investment in Class Y Shares^1,4

December 31, 2010 through December 31, 2020

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Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Average Annual Total Returns – December 31, 2020⁴

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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NATIXIS U.S. EQUITY OPPORTUNITIES FUND

Investment Goal

The Fund seeks long-term growth of capital.

Market Conditions

Despite beginning the year on a high note, Covid-19 flattened the global economy like a pancake as it spread out from China in January. Pre-Covid, stocks were hitting record highs and the unemployment rate was 3.5%. In April, after a nationwide shutdown order, the unemployment rate shot up to 14.7 percent, stocks crashed and the economic outlook seemed dire.

Initially, the Trump administration, Congress and the Federal Reserve Board (the Fed) responded rapidly to the economic crisis. The Fed lowered benchmark rates to near zero, the lowest rate since the 2007-08 financial crisis, and Congress passed a $3 trillion economic relief bill that was immediately signed by President Trump. Despite this quick action, 20.8 million Americans either lost their jobs or were laid off in April. Hospitalizations climbed in the Northeast. Gross Domestic Product (GDP), a proxy for US economic activity, declined by a record 31.4 percent in the second quarter of the year.

In the spring, many states began to reopen their economies as the Covid-19 curve flattened. However, by the end of May, more than 100,000 Americans died from the coronavirus. The Federal government began to enter into contracts with pharmaceutical companies to develop Covid-19 vaccines, an effort known as Operation Warp Speed. Over the summer, fall and winter, Covid spread throughout the country, affecting large cities and rural areas alike.

Despite the mounting numbers of cases and deaths, the US economy demonstrated some resilience, with unemployment rates falling through the summer and into the fall, edging down to 6.7 percent by November. While the overall economy followed suit, Moody’s Analytics estimated that the economy had only recovered about 75 percent of the strength it had demonstrated pre-pandemic by the end of the year. In December, the US Food and Drug Administration approved two vaccines for distribution. Just before the end of the year, Congress and the Trump Administration agreed to a $900 billion stimulus to continue the economic recovery.

After the initial plunge in February and March, stocks rallied strongly, with the S&P 500 ending the year with a 16.26 percent gain in price (excluding reinvested dividends); the Dow Jones Industrial Average rose by 7.25 percent and the Nasdaq Composite Index by 43.64 percent. The yield on the benchmark U.S. 10-Year Treasury bond ended the year at .93 percent.

As 2020 drew to a close, the country waited to welcome a new administration and Congress in 2021 and looked forward to the wide-spread deployment of two Covid-19 vaccines, which many hoped would lead to a return to normalcy after a year in which anything was normal.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of Natixis U.S. Equity Opportunities Fund returned 22.36% at net asset value. The Fund outperformed its primary benchmark, the S&P 500^® Index, which returned 18.40%. The Fund also outperformed its secondary benchmark, the Russell 1000^® Index, which returned 20.96%.

Explanation of Fund Performance

Each of the portfolio’s segments uses a distinct investment style, providing shareholders with exposure to a variety of different stocks:

Harris Associates Large Cap Value Segment

As value investors with an emphasis on individual stock selection, our sector weights are a byproduct of our bottom-up process. On an absolute-return basis, the healthcare sector gained the most value, while holdings in the energy sector lost the most value.

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additions amounted to 27.8 million. Later, Netflix’s first-quarter earnings report included paid net subscriber additions of 15.8 million, which handily bested guidance for 7 million additions. The stay-at-home conditions prompted by Covid-19 led to the addition of 26 million new paying subscriptions year-to-date through June, compared with 28 million additions achieved in total for 2019. Revenues for the six-month period rose 26% from the year-ago period, and earnings per share more than doubled. In October, the company released third-quarter results with revenue of $6.44 billion that surpassed market forecasts of $6.39 billion, while earnings per share and total streaming paid net subscription additions fell short of expectations. Along with the release, management issued fourth-quarter guidance for revenue of $6.57 billion, earnings per share of $1.35 and total net additions of 6.00 million. These projections indicated to us that Netflix is on track to exceed our full-year 2020 estimates by a large margin, and if the company achieves these targets, it can likely surpass 200 million global subscribers by year-end, leading to revenue of roughly $25 billion, earnings of nearly $5 billion and $2 billion of free cash flow. In November, Netflix announced plans to increase prices for US subscribers, and investors reacted positively to the news. Notably, generating additional near-term revenue and cash flow enables Netflix to accelerate its competitive momentum by investing more in content and spreading the cost over a larger subscriber base. Although its share price advanced in recent months, we still believe our investment in Netflix offers investors sufficient upside potential.

Fiat Chrysler was the largest detractor to fund performance for the calendar year. Like a majority of other companies, Covid-19 negatively impacted Fiat Chrysler in the first quarter, causing its share price to decline by about half. We opted to eliminate our exposure to the company when it became engaged in a proposed merger at what we found to be a disappointing price.

Loomis, Sayles and Company All Cap Growth Segment

We are an active manager with a long-term, private equity approach to investing. Through our proprietary bottom-up research framework, we look to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth when they trade at a significant discount to intrinsic value. For the period, the All Cap Growth segment posted a positive absolute return. Our holdings in the information technology, consumer discretionary, communication services, healthcare, industrials, financials, and consumer staples sectors contributed positively to results.

Amazon, Nvidia, and Autodesk were the largest contributors to performance during the period. Online retailer Amazon offers millions of products — sold by Amazon or by third parties — with the value proposition to consumers of selection, price, and convenience. Amazon’s enterprise IT business, Amazon Web Services (AWS), offers a suite of secure, on-demand cloud-computing services, with a value proposition to clients of speed, agility, and savings. In both of its core markets, we believe Amazon possesses strong and sustainable competitive advantages that would be difficult for competitors to replicate. During the period, we estimate Amazon’s gross merchandise volume grew faster than either global retail sales or US e-commerce, indicating the company expanded its market share. AWS also posted strong revenue growth that was well above our estimate of growth in global enterprise-IT spending. Revenue growth during the period exceeded consensus expectations and accelerated following the outbreak of Covid-19. In order to manage the increase in demand while protecting the safety of employees and customers, Amazon incurred over $7.5 billion of Covid-19-related costs, while also investing rapidly in new fulfillment capacity. Reiterating Amazon’s long-standing practice of investing aggressively to better position the company for the long term, CEO Jeff Bezos recently stated that he believes the measures taken to get essential products to customers while continuing to ensure the safety and well-being of its hundreds of thousands of employees represents the best long-term investment the company could make. We believe Amazon is one of the best-positioned companies in e-commerce and enterprise IT — in each case addressing large, underpenetrated markets that benefit from secular growth that is still in its early stages. We believe the current share price shows a lack of appreciation for Amazon’s significant long-term growth opportunities and the sustainability of its business model. As a result, we believe the company is selling at a significant discount to our estimate of intrinsic value and offers a compelling reward-to-risk opportunity.

Nvidia is the world leader in graphic processing units (GPUs), which enable computers to produce and utilize highly realistic 3D graphic imagery and models. We believe the company’s competitive advantages include its intellectual property, brands, and a large and growing ecosystem of developers and applications utilizing GPU technology. A segment holding since January 2019, Nvidia reported better-than-expected results, driven by recovery in its gaming business and rising demand in its data center business. In gaming, Nvidia is benefiting from the rollout of Turing, its newest GPU architecture, which is becoming the industry norm for the latest blockbuster titles. Data center revenue also rebounded after a period of softness with quarterly data center revenue exceeding $1 billion for the first time in each of the past three quarters. The company saw strong traction for its latest architecture, Ampere, which for the first time enables clients to address both training and inferencing through a single architecture, with performance that surpasses its already leading T4 inferencing and V100 training products. Over our investment horizon, we believe Nvidia can sustain high-teens revenue growth, driven by secular growth in spending on GPUs. As Nvidia’s business mix shifts increasingly towards its more profitable data center segment, we believe operating profits and free cash flow will grow faster than revenues. We believe Nvidia’s strong free cash flow growth prospects are not currently reflected in its share price. As a result, we believe the company’s shares trade at a significant discount to our estimate of intrinsic value and offer a compelling long-term reward-to-risk opportunity.

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NATIXIS U.S. EQUITY OPPORTUNITIES FUND

A global leader in 3D design software and services, the Autodesk name is synonymous with computer-aided design — a degree of brand recognition that takes years, if not decades, to develop. The company offers a broad suite of products that are viewed as mission critical among its clients and create high switching costs for its global installed user base. In early 2016, the company began transitioning its business model from an up-front, licensing-plus-maintenance model to a cloud-delivered, subscription-based model where fees are recognized ratably over the life of the customer relationship. During the transition, margins, earnings, and cash flow have been predictably under pressure and operating margins were negative in the company’s 2017 and 2018 fiscal years, which we believe represented the trough for cash flow and operating margins. We believe the subscription model will result in increased visibility of future revenue streams and higher lifetime customer value, leading to increased revenue, profitability, and free cash flow. During the year, Autodesk reported strong results that exceeded consensus expectations for revenues, billings, earnings, and free cash flow. Importantly, Autodesk demonstrated continued progress in its model transition, which is now largely complete, including recurring revenue that grew to 95% of the revenue mix from approximately 50% prior to the transition. As the business model transition matures over time, we believe Autodesk will be able to improve operating leverage and increase adjusted operating margins to approximately 40%, from approximately 12% in its 2019 fiscal year and 30% in the most recent quarter, resulting in high and sustainable free cash flow that we believe is not currently reflected in the share price. As a result, Autodesk’s shares are selling at a significant discount to our estimate of intrinsic value, creating a compelling reward-to-risk opportunity.

Under Armour, Schlumberger, and Coca-Cola were the three lowest contributors during the period. Under Armour is a leading provider of performance-centric, branded sportswear and footwear. In twenty years, Under Armour has become a credible number three global sportswear brand behind Nike and Adidas. We believe the company’s strong and sustainable competitive advantages include its brand, distribution, and the benefits of scale needed to compete globally. A segment holding since the fourth quarter of 2017, Under Armour reported weak financial results that reflected the temporary closure of as much as 80% of its points of sale through mid-May due to Covid-19. While we expect this near-term weakness to continue, we do not believe the company or the industry will be structurally impacted in the long term. In China, the company’s largest market outside the US and the country which first experienced the impact of Covid-19, stores were closed earlier than in the US and Europe, and results have begun to improve with their re-opening in late March. Further, Under Armour’s more-recent results have begun to reflect the benefits of the company’s multi-year restructuring. While the company’s challenges pre-date Covid-19, Under Armour has spent the past three years refocusing on its premium segment and resizing its expense base to improve profitability. We believe Under Armour is well positioned to benefit from secular growth in global per capita consumption of sportswear. As a result of its actions, we believe the company will be able to reignite growth when the current downturn ends and can realize market share gains in footwear and in international markets. We believe the current share price embeds growth and profitability assumptions that are substantially below our long-term estimates. As a result, we believe the company is trading at a significant discount to our estimate of intrinsic value and offers a compelling reward-to-risk opportunity.

Schlumberger is the world’s leading supplier of technology, equipment, project management, and information solutions to the oil and gas exploration and production (E&P) industry. A long-term segment holding, Schlumberger reported financial results that deteriorated substantially due to the oil price environment. Following record oil price declines in the first quarter due to Covid-19-related demand weakness in China and a price war between OPEC and Russia, demand and prices fell further in the second quarter as a result of the global lockdown, and continued travel restrictions and a resurgence of Covid-19 cases continues to delay a recovery in demand. As a result, global service activity in 2020 is now expected to decline by 25% to 30% year over year. Given the ongoing uncertainty, Schlumberger has taken prudent steps to increase liquidity, including cutting its dividend, raising cash by issuing debt, and cutting headcount, while lowering structural costs and capital intensity that should contribute to improved returns. While we expect near-term results to remain under pressure, the company continues to generate positive free cash flow, and we believe Schlumberger’s products remain a necessary part of the solution for efficiently extracting energy resources, even in times of substantial commodity price compression. Secular growth in the long-term global demand for oil, arising primarily from the need to replace naturally depleting reserves, is driving the need to extract hydrocarbons from harsher environments that are increasingly difficult to reach or extract from. Because oilfield services companies are key to making difficult-to-reach resources more accessible, we believe services like those Schlumberger provides are essential to profitably meeting long-term demand. We believe that Schlumberger will continue to execute well and that the company is positioned to weather the current environment and capitalize on growth in oilfield services as market supply and demand normalizes. The company’s growing leadership in digital solutions should also create further differentiation versus peers. We believe shares of Schlumberger are selling at a significant discount to our estimate of intrinsic value, and offer a compelling reward-to-risk opportunity.

The Coca-Cola Company is the world’s leading owner and marketer of non-alcoholic beverage brands and employs an unrivaled global beverage distribution network. A long-term segment holding, we believe Coca-Cola’s strong and sustainable competitive advantages include its iconic global brands, difficult-to-replicate beverage distribution network, and unmatched scale. With emerging markets accounting for over 60% of the company’s sales by volume, we believed Coca-Cola was well positioned to benefit from long-term secular growth in emerging market spending on non-alcoholic ready-to-drink beverages, driven by both urbanization and growth

31  |

in disposable income. We believed the sustainability of the company’s cash flow growth drivers and the positive impact of the refranchising of its bottling operations had been underappreciated by the market. In late January, the company reported strong financial results which surpassed management’s already-increased guidance, and the company recorded its 10^th consecutive quarter of mid-single-digit organic revenue growth. We believed these results demonstrated the company’s renewed focus on innovation and brand building following the nearly completed refranchising of its bottling operations. The refranchising culminated a decade-long effort to restructure the company’s largest bottling partners to meet best-in-class operational standards and position them for sustainable long-term growth. That effort was largely completed in 2017 and is being reflected in the company’s improved execution and returns. While management expected its strong growth to continue, the current level of growth exceeded our long-term forecasts. We exited our position in March to reallocate capital to more attractive reward-to-risk opportunities. Due to the timing of the sale in the March downturn, the company is among the biggest detractors for the period.

Outlook

The Natixis U.S. Equity Opportunities Fund is comprised of two separate segments combining the value expertise of Harris Associates with the growth expertise of Loomis Sayles. The two segments have common investment philosophies and a rigorous long-term, bottom-up research process focused on high quality businesses trading at a significant discount to intrinsic value. Given encouraging news around Covid-19 vaccines and treatments, we think economic activity in 2021 will look more like 2019, than 2020, and we expect to start seeing signs of that in the second half of 2021. Our thesis for each investment, almost by definition, differs from consensus. Our responsibility is, and always has been, to monitor any new information to constantly challenge those theses. If we are correct that normal will return faster than others expect it will, we believe our stocks are well-positioned. We are patient investors and maintain coverage of high-quality businesses in order to take advantage of meaningful price dislocations if and when they occur.

Hypothetical Growth of $100,000 Investment in Class Y Shares⁴

December 31, 2010 through December 31, 2020

See notes to chart on page 33.

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NATIXIS U.S. EQUITY OPPORTUNITIES FUND

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Average Annual Total Returns – December 31, 2020⁴

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

33  |

VAUGHAN NELSON MID CAP FUND

Investment Goal

The Fund seeks long-term capital appreciation.

Market Conditions

During 2020, the equity market continued to recover from the steep selloff due to the economic lockdown in response to the global pandemic. The equity market rally is consistent with the unprecedented monetary and fiscal policy support that went into the economy and with the bottoming of economic activity in late March to early April. The United States has finally reached the point where the federal government has become the marginal lender and spender of last resort. While policy support is very much warranted, investors will be dealing with the intended and unintended consequences of these actions for many years. The industrial recovery remains strong, boosted by the need to rebuild inventories and robust demand for housing that has left the supply of homes at record low levels. Without additional shocks to the economy, we expect the inventory rebuilding process to last several months and hopefully jumpstart a broader self-reinforcing recovery. The recovery in the service sector continues, but at a slower pace than the industrial sector.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of Vaughan Nelson Mid Cap Fund returned 10.76% at net asset value. The Fund outperformed its benchmark, the Russell Midcap^® Value Index, which returned 4.96%.

Explanation of Fund Performance

The Fund outperformed the benchmark for the year due primarily to stock selection and weightings in Real Estate, Information Technology, Utilities, Consumer Staples, Energy, Healthcare, and Consumer Discretionary.

REITs were the top performing relative sector in 2020. Both an underweight to the struggling space and performance from CyrusOne, Inc. resulted in excess return. CyrusOne owns and operates data centers and benefited from continued demand for cloud storage.

A significant overweight to Information Technology resulted in a strong performance in the space. The top performer was Entegris, a provider of consumables for the semi-conductor industry. Entegris sales accelerated during the year as demand in end markets levered to 5G and data center/cloud strengthened.

After two years as the top performing sector, Utilities struggled in 2020, but the Fund’s security selection helped outperform the sector. The largest contributor was Eversource Energy, a public utility providing service in Connecticut, New Hampshire and Massachusetts. The Fund sold its Eversource position well, cutting it in half in April at its relative highs vs. Utilities, and then completely unwinding the position in July.

Strong stock selection in Consumer Staples, namely Performance Food Group Company, also contributed to the Fund’s return for the year. Performance Food Group is a foodservice distributor, selling mainly to restaurants. The Fund purchased the stock in early June during Covid-19 lockdowns, believing Performance Food Group Company’s strong balance sheet and high-touch sales force would enable the company to take share during the crisis. The stock strongly rebounded as sales recovered and positive vaccine news arrived.

While Energy struggled throughout 2020, limited exposure and better company performance led to positive relative results. Baker Hughes Company was the top performer for the Fund. Baker Hughes is a leading oil field services provider and outperformed peers due to a relatively stronger balance sheet. We exited our position in September to refocus our energy sector exposure.

Healthcare performed well in 2020, and security selection aided the Fund’s performance. Hologic was the top pick in the space. Hologic is a developer and manufacturer of diagnostics products, medical imaging and surgical products. The company was quick to develop testing for Covid-19 and benefited greatly from the ramp-up of Covid-19 testing.

Lastly, company specifics aided relative performance in Consumer Discretionary. Terminix Global Holdings was the top driver of returns. Previously ServiceMaster, the company divested its namesake business to Roark Capital in October 2020 for $1.5 billion,

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VAUGHAN NELSON MID CAP FUND

renaming the remaining company Terminix (TMX). With a new management team and a strengthened balance sheet from divestiture proceeds, TMX is a focused pure play in the pest control space.

The largest sector detractor from performance in 2020 was Communication Services, led by Nexstar Media Group, Inc. Nexstar owns and operates 195 TV stations across the US and traded down as advertisers pulled spending due to Covid-19 lockdowns.

Within Industrials, Brink’s Company was the biggest impairment to returns. Brink’s provides secure transport of cash and other valuables for businesses and institutions around the world. The stock traded down as Covid-19 led to an acceleration into electronic payments and a slowdown in business activity in general. The Fund exited the position in July.

Financials lagged throughout the year, and New Residential Investment Corp. (NRZ) was the largest drag on the portfolio. New Residential is a REIT focused on investing in and actively managing investments related to residential real estate. Due to Covid-19 pressures, the company unwound a large chunk of its residential securities and slashed its dividend by 90%. The Fund held onto its position, as originations have remained strong and the Fund believes management will be able to rebuild book value. Additionally, on 11/23/20, NRZ announced it has filed a registration statement for the IPO of its subsidiary.

Finally, despite strong absolute performance, Material holdings underperformed the sector. Within the sector, Axalta Coating Systems trailed. Axalta manufactures and distributes coatings for automotive, transportation and industrial end markets. While the stock strongly recovered, it lagged peers with more exposure to commodities, e.g., metals.

Outlook

After decades of reliance on monetary stimulus, the economy and capital markets suffer from excess leverage, malinvestment and structural imbalances that hamper the effectiveness of monetary tools. With the election behind us, we expect fiscal policy in close coordination with the US Federal Reserve to take center stage in driving economic growth.

The last bout of loose fiscal policy was combined with tight monetary policy, which sustained US dollar strength. The next round of loose fiscal policy will likely be combined with loose monetary policy, which will pressure the US dollar. Should such economic policy be pursued, and successfully increase nominal GDP growth, it will represent a fundamental shift in the underlying economic conditions that have not been witnessed in years. Such a shift in the economic environment will likely lead to increased market volatility and broad changes in market leadership.

Hypothetical Growth of $100,000 Investment in Class Y Shares³

December 31, 2010 through December 31, 2020

35  |

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

Average Annual Total Returns — December 31, 2020³

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com/performance. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. The table(s) do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.

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VAUGHAN NELSON SMALL CAP VALUE FUND

Investment Goal

The Fund seeks capital appreciation.

Market Conditions

During 2020, the equity market continued to recover from the steep selloff due to the economic lockdown in response to the global pandemic. The equity market rally is consistent with the unprecedented monetary and fiscal policy support that went into the economy and with the bottoming of economic activity in late March to early April. The United States has finally reached the point where the federal government has become the marginal lender and spender of last resort. While policy support is very much warranted, investors will be dealing with the intended and unintended consequences of these actions for many years. The industrial recovery remains strong, boosted by the need to rebuild inventories and robust demand for housing that has left the supply of homes at record low levels. Without additional shocks to the economy, we expect the inventory rebuilding process to last several months and hopefully jumpstart a broader self-reinforcing recovery. The recovery in the service sector continues, but at a slower pace than the industrial sector.

Performance Results

For the 12 months ended December 31, 2020, Class Y shares of Vaughan Nelson Small Cap Value Fund returned 9.23% at net asset value. The Fund outperformed its benchmark, the Russell 2000^® Value Index, which returned 4.63%.

Explanation of Fund Performance

The Fund outperformed the benchmark, coupling strong stock selection with positive sector allocation.

The Information Technology sector contributed the most to the Fund’s performance for the year. The Fund was overweight in the sector, which was up over 20% in 2020. The top performing IT name was Entegris, Inc. Entegris performed well due to continued strength in semiconductor end markets throughout the Covid pandemic. The Fund was underweight the challenged REIT sector, but also had solid relative performance from the companies held, specifically Physicians Trust Realty.

Underweighting Utilities throughout the course of 2020 proved positive to the relative attribution given the challenges in the space. Southwest Gas provided a boost. In 2020, Financials had a difficult year. The Fund was underweight throughout 2020 and held a handful of companies that performed well, namely, Virtu Financial, Inc. Rounding out the substantial contributors was Industrials, with Builders FirstSource, Inc. as the top contributor. Builders FirstSource performed well due to strong residential housing demand and the announced merger with BMC Stock Holdings which will be highly accretive to growth, margins and returns.

For the third year in a row, Energy was the worst performing sector in the Russell 2000^® Value Index, down nearly 35%. The Fund had an underweight to Energy and overcame some stock-specific challenges. The result was a slight positive relative year with Callon Petroleum Company and ChampionX Corporation as the top names. Callon Petroleum was a top energy name due to the Fund selling its position at the end of January 2020, before the price of oil came under pressure from the collapse in demand caused by the Covid-19 pandemic. ChampionX performed well because of well-timed purchase as vaccine news and economic reopening helped drive the price of oil higher, which improved the outlook for the ChampionX end market and its customer base.

Healthcare was the largest relative detractor in 2020, specifically Lantheus Holdings, Inc. The stock performed poorly due to delays in elective surgeries, which is the company’s primary end market, due to the Covid-19 pandemic and the long timeline to recover to pre-Covid levels.

Materion Corporation lagged the strong returning Materials sector. Materion end markets are not as cyclical as other material names. Further, the company has less margin leverage to rising commodity prices than other small-cap material names. An overweight to a challenged Communication Services sector also detracted, with Tegna, Inc. the biggest headwind to performance. Excellent security selection was not enough to overcome a substantial underweight in Consumer Discretionary. Lastly, limited exposure to the outperforming Consumer Staples sector was a drag on performance.

37  |

Outlook

After decades of reliance on monetary stimulus, the economy and capital markets suffer from excess leverage, malinvestment and structural imbalances that hamper the effectiveness of monetary tools. With the election behind us, we expect fiscal policy in close coordination with the US Federal Reserve to take center stage in driving economic growth.

The last bout of loose fiscal policy was combined with tight monetary policy, which sustained US dollar strength. The next round of loose fiscal policy will likely be combined with loose monetary policy, which will pressure the US dollar. Should such economic policy be pursued, and successfully increase nominal GDP growth, it will represent a fundamental shift in the underlying economic conditions that have not been witnessed in years. Such a shift in the economic environment will likely lead to increased market volatility and broad changes in market leadership.

Hypothetical Growth of $100,000 Investment in Class Y Shares³

December 31, 2010 through December 31, 2020

See notes to chart on page 39.

Top Ten Holdings as of December 31, 2020

The portfolio is actively managed and holdings are subject to change. There is no guarantee the Fund continues to invest in the securities referenced. The holdings listed exclude any temporary cash investments.

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VAUGHAN NELSON SMALL CAP VALUE FUND

Average Annual Total Returns – December 31, 2020³