Doug Foreman, CFA
Chief Investment Officer and Portfolio Manager
Kayne Anderson Rudnick
In this recorded interview, Kayne Anderson Rudnick CIO Doug Foreman discusses the opportunities available in the mid-cap equity space and the high-quality strategy behind the Virtus KAR Mid-Cap Growth Fund, which he has managed since 2012. Replay of a call held February 25, 2020, moderated by Barry Mandinach, Executive Vice President, Virtus Investment Partners.
• What makes mid-cap stocks special, and why they deserve a spot in an investor’s portfolio
• How the Mid-Cap Growth strategy compares to other KAR portfolios – similarities and differences
• The kinds of companies KAR owns in the portfolio, using software businesses as an example.
• Expectations for Mid-Cap Growth over full market cycles and emphasis on quality
• Why Active Mid-Cap Growth over Passive?
• Characteristics of top 10 holdings and how they are selected – “We water our flowers, and pull our weeds.”
• An example of a stock that illustrates the Fund’s emphasis on high quality businesses
IMPORTANT RISK CONSIDERATIONS
Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk. Prospectus: For additional information on risks, please see the fund’s prospectus.
Morningstar Ratings for PICMX as of 12/31/19 for the overall, 3-, 5-, and 10-year periods are 5 stars, 5 stars, 5 stars, and 4 stars out of 565, 565, 501, and 385 Mid-Cap Growth funds, respectively.
Morningstar Rating™ for funds, or ‘star rating,’ is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effect of sales charges and loads. © 2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates, or its sub advisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.
Investors should consider the investment objectives, risks, charges and expenses of any Virtus Fund carefully before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 800-243-4361 to obtain a current prospectus and/or summary prospectus. You should read the prospectus and/or summary prospectus carefully before you invest or send money.
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