what factors can impact a mutual
fund’s dividend distribution?
Several factors can affect a fund’s income distribution, including subscriptions into and withdrawals from a fund,
defaults in underlying securities, and realized foreign currency gains or losses.
THE IMPACT OF FOREIGN CURRENCY LOSSES
During periods in which the US dollar strengthens significantly against foreign currencies, some Loomis
Sayles funds that hold non-US dollar denominated bonds may realize currency losses that impact their income
dividend distributions.
When a non-US dollar denominated bond is sold at a gain or loss, the sale is made up of two components: a
capital gain/loss and a currency gain/loss. A recognized currency loss, in accordance with federal tax rules,
decreases the amount of ordinary income the fund has available to distribute (regardless of how long the bond
was held).
To compensate for realized currency losses, the fund’s ordinary income must be adjusted to ensure that the fund
does not distribute too much income early in its fiscal year. If currency losses are not factored into ongoing
distributions, the fund risks distributing more income to shareholders than it earned during the year. This would
result in a return of capital to shareholders, effectively reducing the amount of principal that shareholders have in
their accounts.
Global or international funds, given their larger allocation to foreign bonds, may be especially impacted by a
strengthening US dollar and therefore could experience greater fluctuations in dividend distributions.
Loomis Sayles regularly monitors the currency gain/loss amounts within each of its mutual funds.
This report is provided as a service to clients of Loomis, Sayles & Company, L.P. It is for informational purposes only. Opinions
expressed reflect subjective judgments as of May 2010, and unexpected events may occur. The opinions expressed will evolve as future
events unfold. For more complete information about Loomis Sayles Funds including charges and expenses, please write or call Natixis
Distributors, L.P. at 1-800-633-3330 for a free prospectus, and a summary prospectus, if available. Investors should consider a
fund’s objective, risks and expenses carefully before investing. This and other information can be found in the Fund’s prospectus. Please
read the prospectus carefully before you invest or send money. Natixis Distributors, L.P. (fund distributor) and Loomis, Sayles &
Company L.P. are affiliated. Natixis Distributors, L.P., 399 Boylston Street, Boston, MA 02116
185360