December 11, 2020
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, NE
Washington, DC 20549-0504
Attention: Elena Stojic, Esq
VIA EDGAR
Re: | Registrant: | Loomis Sayles Funds II | ||
File No.: | 811- 06241 | |||
Filing Type: | Form N-1A |
Dear Ms. Stojic:
This letter responds to additional comments of the staff (the Staff) of the Securities and Exchange Commission (the Commission) received by WebEx on December 10, 2020, regarding the post-effective amendment to the Loomis Sayles Funds II (the Registrant) registration statement on Form N-1A for the Loomis Sayles International Growth Fund (the Fund), which was filed with the Commission on October 1, 2020 (the Registration Statement), and the Funds comment response letter dated December 8, 2020, responding to the comments of the Staff received by WebEx on November 13, 2020. For your convenience, we have summarized the additional comments below, followed by the Registrants response. Any term that is used, but not defined, in this letter retains the same meaning as used by the Registrant in the Registration Statement.
Prospectus
1. | Comment. Please define what the Fund considers to be a large capitalization company either in the Fund Summary section of the prospectus (in response to Item 4 of Form N-1A) or in the section More About Goals and Strategies (in response to Item 9 of Form N-1A). |
Response. In response to this comment the Registrant has revised the first paragraph of the Principal Investment Strategies section of the prospectus as follows:
Under normal market conditions,
the Fund will invest primarily in equity securities, including common stocks and depositary receipts. The Fund will primarily invest in securities of companies that maintain their principal place of business or conduct their principal business
activities outside the U.S., companies that have their securities traded on non-U.S. exchanges or companies that have been formed under the laws of non-U.S. countries.
The Fund will invest in securities that provide exposure to no fewer than three countries outside the U.S. including companies located in emerging markets. Notwithstanding the foregoing, the Adviser does not consider a security to be foreign if it
is included in the U.S. equity indices published by S&P Global Ratings or Russell Investments or if the securitys country of risk defined by Bloomberg is the U.S. The Fund focuses on stocks of large capitalization companies, but
the Fund may invest in companies of any size.
2. | Comment. In the second paragraph of the Principal Investment Strategies section, please revise to disclose in greater detail the Advisers investment selection and portfolio construction process. For example, the prospectus states that the Adviser seeks to invest in companies with sustainable competitive advantages and long-term structural growth drivers as well as companies that trade at a significant discount to the estimate of intrinsic value, but does not explain the analysis that the Adviser considers in making these determinations. It is unclear how the Adviser evaluates growth potential. We also note that the disclosure does not provide any detail on the portfolio construction constraints or parameters the Adviser will follow. Please revise as appropriate. |
Response. In response to this comment the Registrant has revised the second paragraph of the Principal Investment Strategies section of the prospectus as follows:
The Fund normally invests across a wide range of sectors and industries. The
Funds portfolio manager employs a growth style of equity management, which means that the Fund seeks to invest in companies with sustainable competitive advantages versus others, long-term structural growth drivers that will lead to
above-average future cash flow growth, attractive cash flow returns on invested capital, and management teams focused on creating long-term value for shareholders. The Funds portfolio manager also aims to invest in companies when they
trade at a significant discount to the estimate of intrinsic value (i.e., companies with share prices trading significantly below what the portfolio manager believes the share price should be).
3. | Comment. In the fourth paragraph of the Principal Investment Strategies section, the disclosure states that the Fund may also engage in foreign currency transactions. Please change may to will if the Fund will engage in foreign currency transactions as a principal investment strategy. |
Response. The Registrant notes that the Adviser will determine whether or not to hedge currency risk for each transaction based on the Advisers assessment of whether hedging would be in the Funds best interest, consistent with prudent investment management. Accordingly, the Registrant respectfully submits that the ability to engage in foreign currency transactions for hedging purposes is a principal investment strategy, even if the Adviser determines not to hedge currency risk in all transactions. In response to this comment the Registrant has revised the fourth paragraph of the Principal Investment Strategies section as follows:
The Fund may also engage in foreign currency transactions (including foreign currency forwards and
foreign currency futures) for hedging purposes, invest in options for hedging and investment purposes and invest in securities issued pursuant to Rule 144A under the Securities Act of 1933 (Rule 144A securities). Under normal
market conditions, the Adviser does not intend to hedge currency risk, which may cause the Fund to incur losses that would not have been incurred had the risk been hedged. The Fund is not limited in the percentage of its assets that it may
invest in these instruments.
If you have any questions or require any clarification concerning the foregoing, please call me at 617-449-2818.
Very truly yours, | ||
/s/ John M. DelPrete | ||
John M. DelPrete | ||
Assistant Secretary | ||
Loomis Sayles Funds II | ||
cc: | Russell Kane, Esq. | |
Michael G. Doherty, Esq. | ||
John M. Loder, Esq. |