This Volatility in Perspective recording is one of a series of market updates featuring investment professionals from Virtus affiliated managers discussing how the coronavirus crisis is affecting capital markets and their investment portfolios. In this recording, Kayne Anderson Rudnick CIO Doug Foreman is joined by portfolio managers Jon Christensen and Craig Thrasher to offer perspective on the global volatility, how KAR’s quality-driven portfolios are faring, and field a range of questions on the impact of the pandemic on U.S. and international equities.
Replay of a call held March 31, 2020, moderated by Barry Mandinach, Executive Vice President, Virtus Investment Partners.
Among the topics discussed:
- How the COVID-19 pandemic-driven recession compares to past recessions – and the early signs that will let investors know when a recovery is underway
- Sectors/businesses expected to be hardest hit and permanently impaired longer term, and sectors/businesses that stand to benefit over the next 3-5 years – the types of companies KAR is always focused on
- How KAR portfolios—U.S. and international—have been holding up (Answer: Relatively well due to KAR’s philosophy and emphasis on companies with lower business risk, lower credit risk, lower balance sheet risk)
- What KAR is doing to use the downturn to “fortify” their portfolios with quality businesses at low valuations
- Expectations for small vs. large companies and the longer-term implications for rebalancing and rebuilding equity allocations
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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. Limited Number of Investments: Because the fund has a limited number of securities, it may be more susceptible to factors adversely affecting its securities than a less concentrated fund. Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund. Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk. Non-Diversified: The fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the fund's assets. Market Volatility: Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on the fund and its investments, including hampering the ability of the fund's portfolio manager(s) to invest the fund's assets as intended. Prospectus: For additional information on risks, please see the fund’s prospectus.
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