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Mutual Fund Specialty

Virtus Duff & Phelps Water Fund

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Ticker
AWTAX
CUSIP
92838V494
POP
$ (as of )
Inception
03/31/2008
Total Assets by Class
$241,383,952.67 (as of 12/02/2022)
Total Assets by Fund
$721,123,970.88 (as of 12/02/2022)
Morningstar Category
Natural Resources

Portfolio Overview

Investment Overview

The Fund seeks attractive returns by investing in companies that specialize in water technologies to address the global water crisis: less than 1% of the earth's water is potable and global demand is rising. Actively managed and attuned to environmental, social, and governance (ESG) metrics, the Fund focuses on market leaders that look to improve water supply, efficiency, and quality.

Effective July 25, 2022, this Fund's name and subadviser have changed.

Management Team

Investment Partner

Duff & Phelps Investment Management Co.

Duff & Phelps Investment Management pursues specialized investment strategies with exceptional depth of resources and expertise. Since its earliest beginnings, providing research and analysis of income producing securities to Depression-era investors, the firm's attention has been set on identifying attractive opportunities through active management and fundamental research, while managing the associated risks. Today, building on a distinguished legacy, Duff & Phelps has earned a reputation as a leader in investing in Global Listed Infrastructure, Global Listed Real Estate, Clean Energy, and Diversified Real Assets.

Quality. Reliability. Specialization. Since 1932.


Learn more about Duff & Phelps Investment Management Co.

Investment Professionals

David Grumhaus

David D. Grumhaus, Jr.

President and Chief Investment Officer

Industry start date: 1989
Start date as fund Portfolio Manager: 2022

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Lang, Evan 400x400

Evan Lang, CFA

Managing Director, Portfolio Manager, Senior Research Analyst

Industry start date: 2014
Start date as fund Portfolio Manager: 2022

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Key Features

Precision exposure to sustainable water

Targets pure-play companies, committed to addressing water scarcity, increasing water quality, and enhancing water efficiency. Investors may benefit fully from the secular growth trend that the water theme represents globally

A resilient portfolio in ever-changing market conditions

The Fund focuses on what the manager considers high-quality water stocks backed by strong structural drivers, seeking to deliver stability in difficult market environments while generating attractive long-term growth and returns

Time-tested experience in Water and ESG investing

The Duff & Phelps team has decades of experience in listed real assets and water-related investment expertise, engaging in a recurring dialogue with global water leaders. The Fund is aligned to four of the 17 United Nations Sustainable Development Goals (SDG), with a focus on Goal 6, 'Clean Water and Sanitation,' offering potential exposure to financial, environmental, and social value

Portfolio Characteristics

Characteristics4

(as of 09/30/2022)
Average Weighted Market Cap (billions) $28.28
Median Market Cap (billions) $6.90
Trailing P/E Ex-Negative Earnings 24.96
Price-to-Cash Flow 17.02
Price-to-Book Value 4.19
3-Year Earnings Growth Rate 11.94

Top Holdings (% Fund)

(as of 09/30/2022)
Security
American Water Works Co Inc
8.43
 8.43%
Danaher Corp
6.40
 6.40%
Essential Utilities Inc
6.20
 6.20%
Xylem Inc/NY
5.61
 5.61%
Veolia Environnement SA
5.19
 5.19%
Tetra Tech Inc
4.17
 4.17%
Severn Trent PLC
4.01
 4.01%
IDEX Corp
3.73
 3.73%
Stantec Inc
3.58
 3.58%
Zurn Elkay Water Solutions Corp
3.05
 3.05%

Holdings are subject to change.

Industry Allocation (% Equity)

(as of 09/30/2022)
Water Utilities
23.18
 23.18%
Industrial Machinery
21.43
 21.43%
Life Sciences Tools & Services
10.01
 10.01%
Building Products
10.00
 10.00%
Construction & Engineering
9.97
 9.97%
Electronic Equipment & Instruments
6.43
 6.43%
Environmental & Facilities Services
6.14
 6.14%
Multi-Utilities
5.29
 5.29%
Agricultural & Farm Machinery
4.29
 4.29%
Specialty Chemicals
2.17
 2.17%
Trading Companies & Distributors
1.09
 1.09%

Performance & Risk

Growth of $10,000 Investment

From to
This chart assumes an initial investment of $10,000 made on for Class ddd shares including any applicable sales charges. Performance assumes reinvestment of dividends and capital gain distributions.

Performance

As of
As of

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Sales Charge and Expenses

Risk Statistics3

(as of )
Fund Index
R2
Beta
Alpha
Std Dev

Risk Considerations

Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be short- or long-term. Local, regional, or global events such as war (e.g., Russia's invasion of Ukraine), acts of terrorism, the spread of infectious illness (e.g., COVID-19 pandemic) or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the ability of the portfolio's manager(s) to invest the portfolio's assets as intended.
Issuer Risk: The portfolio will be affected by factors specific to the issuers of securities and other instruments in which the portfolio invests, including actual or perceived changes in the financial condition or business prospects of such issuers.
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.
Water-Related Risk: Because the portfolio focuses its investments in water-related companies, it is particularly affected by events or factors relating to this sector, which may increase risk and volatility.
Focused Investments: To the extent the portfolio focuses its investments on a limited number of issuers, sectors, industries or geographic regions, it may be subject to increased risk and volatility.
Foreign Investing: Investing in foreign securities subjects the portfolio to additional risks such as increased volatility; currency fluctuations; less liquidity; less publicly available information about the foreign investment; and political, regulatory, economic, and market risk.
Sustainable Investing: Because the portfolio focuses on investments in companies that the Manager believes exhibit strong environmental, social, and corporate governance records, the portfolio's universe of investments may be smaller than that of other portfolios and broad equity benchmark indices.
Prospectus: For additional information on risks, please see the fund's prospectus.

Commentary

z - Cover Image: Virtus Duff & Phelps Water Fund Commentary
Virtus Duff & Phelps Water Fund Commentary
The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.

Related Literature

Marketing Materials

Virtus Duff & Phelps Water Fund Fact Sheet - INST
Virtus Duff & Phelps Water Fund Fact Sheet - A
Virtus Duff & Phelps Water Fund Enhanced Fact Sheet
Virtus Duff & Phelps Water Fund Commentary
Virtus Duff & Phelps Water Fund Presentation
The Water Scarcity Challenge and the Cost of Inaction
Why Investors Seeking Returns and Impact Should Consider Water

Financial Materials

Virtus Strategy Trust Statutory Prospectus
Virtus Duff & Phelps Water Fund Summary Prospectus
Virtus Strategy Trust SAI
Virtus Strategy Trust Annual Report
Virtus Strategy Trust Semiannual Report
Virtus Duff & Phelps Water Fund Information Statement

Holdings

Virtus Duff & Phelps Water Fund Monthly Holdings
Virtus Duff & Phelps Water Fund Top Holdings
Virtus AllianzGI Water Fund Holdings Fiscal Q1
Virtus Duff & Phelps Water Fund Holdings Fiscal Q3

Investors should carefully consider the investment objectives, risks, charges and expenses of any Virtus Mutual Fund before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 1-800-243-4361 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.

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Average annual total return is the annual compound return for the indicated period. It reflects the change in share price and the reinvestment of all dividends and capital gains. NAV returns do not include the effect of any applicable sales charges. POP and w/CDSC returns include the effect of maximum applicable sales charges.

Returns for periods of less than one year are cumulative total returns.

1 Yields/Distributions: 30-day SEC Yield is a standardized yield calculated according to a formula set by the SEC, and is subject to change. 30-day SEC Yield (unsubsidized) is the 30-day SEC Yield without the effect of applicable expense waivers. Distribution Rate is calculated by (a) annualizing the latest income distribution for fixed income funds or funds less than 1 year old, or (b) summing all income distributions over the preceding 12 months for all other funds, and dividing by the NAV on the last business date of the period, unless otherwise indicated. The Distribution Rate may be comprised of ordinary income, net realized capital gains and returns of capital.

2 Distribution History: Distributions are represented on a cash basis and may be reclassified at year end for tax purposes. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. STCG: Short Term Capital Gain, LTCG: Long Term Capital Gain

3 Risk Statistics: R2 is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. Beta is a quantitative measure of the volatility of a given portfolio to the overall market. Alpha is a risk adjusted measure of an investment's excess return relative to a benchmark. A positive Alpha indicates that the investment produced a return greater than expected for the risk (as measured by Beta) taken. Standard Deviation measures variability of returns around the average return for an investment fund. Higher standard deviation suggests greater risk. Risk Statistics are calculated using 36 monthly returns.

4 Characteristics: For Equity Funds: Avg. Weighted Market Cap (bn): The sum of each security's weight within the fund (or index) multiplied by the security's market capitalization. Trailing P/E Ex-Negative Earnings: Per-share stock price divided by the latest 12-months Earnings per Share; Price/Cash Flow: Per-share stock price divided by the per-share operating cash flow; Price/Book: Per-share stock price divided by the latest 12-month per-share Book Value; 3-Year EPS Growth Rate: Average of earnings per share growth for latest 3-year period. The 3-Year EPS Growth Rate is not a forecast of the fund's performance.

4 Characteristics: For Fixed Income Funds: Effective Duration represents the interest rate sensitivity of a fixed income fund. For example, if a fund's effective duration is five years, a 1% increase in interest rates would result in a 5% decline in the fund's price. Similarly, a 1% decline in interest rates would result in a 5% gain in the fund's price.

Morningstar Disclosures:
The 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 effects of sales charges and loads.

© 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.