
Emerging Markets Resources & Solutions
Investors without an allocation to emerging markets may be missing out on a strong—and growing—segment of the global economy. Virtus offers a diverse range of dedicated emerging markets solutions.
Virtus Emerging Markets Opportunities Fund
The Fund seeks capital appreciation through a systematic, bottom-up investing approach to emerging market equities that focuses on uncovering attractive investment opportunities while striving to mitigate downside risk. The all-cap core portfolio is built with high conviction at the stock level, focusing on securities that exhibit higher growth forecasts, lower valuations, and reduced volatility versus the benchmark.
Effective June 10, 2022, this Fund's name has changed.
Effective July 25, 2022, this Fund's manager has changed.
The Virtus Systematic team of Virtus Investment Advisers, Inc. specializes in differentiated investment solutions, strategies, and outcomes across asset classes, regions, and securities.
Chief Investment Officer, Senior Managing Director, Portfolio Manager
Industry start date: 2003
Start date as fund Portfolio Manager: 2007
Managing Director, Lead Portfolio Manager
Industry start date: 2002
Start date as fund Portfolio Manager: 2010
A behavioral finance approach, rooted in investors' often-inefficient reaction to new information, helps identify companies poised to benefit from changes not yet fully reflected in the market
Daily analysis of 3,000+ securities from a proprietary multi-factor model has resulted in a clear investment view on each stock and a high active share
Proactive risk controls are embedded throughout the investment process to help lower volatility exposure versus the benchmark while a statistically based risk model helps uncover hidden sources of market risk
Average Weighted Market Cap (billions) | $69.87 |
Median Market Cap (billions) | $6.87 |
Trailing P/E Ex-Negative Earnings | 8.89 |
Price-to-Cash Flow | 10.59 |
Price-to-Book Value | 2.65 |
3-Year Earnings Growth Rate | 23.50 |
Security | |
---|---|
Taiwan Semiconductor Manufacturing Co Ltd | |
Tencent Holdings Ltd | |
PetroChina Co Ltd | |
Novatek Microelectronics Corp | |
Yum China Holdings Inc | |
ITC Ltd | |
Starbucks Corp | |
DB HiTek Co Ltd | |
Alibaba Group Holding Ltd | |
Samsung Electronics Co Ltd |
Holdings are subject to change.
Information Technology | |
Financials | |
Consumer Discretionary | |
Industrials | |
Consumer Staples | |
Energy | |
Communication Services | |
Utilities | |
Materials | |
Health Care | |
Real Estate |
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.
Fund | Index | |
---|---|---|
R2 | ||
Beta | ||
Alpha | ||
Std Dev |
Virtus Emerging Markets Opportunities Fund Fact Sheet - R6 | |
Virtus Emerging Markets Opportunities Fund Fact Sheet - A | |
Virtus Emerging Markets Opportunities Fund Fact Sheet - INST | |
Virtus Emerging Markets Equity Funds | |
The Next Generation Alpha Model: Illuminating CEO and CFO Behavior Using NLP | |
The Next Generation Alpha Model: Seeding Intelligence with the Ground Truth | |
The Next Generation Alpha Model: Introducing Natural Language Processing |
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.
1Q23
Market Review
Emerging markets equities broadly continued to rise in the first quarter, though the period was largely split in two from a performance perspective. Early in the period, shares were lifted higher by investor enthusiasm for the anticipated boost China’s reopening might have on the global economy and optimism around softening U.S. inflation numbers and growing hope that Federal Reserve (Fed) interest rate tightening may soon slow or even reverse.
Volatility returned to the markets in the second half of the period, however, as it became clearer that China’s growth gains were likely to be more of a grind than initially expected. Additionally, surprising resiliency in U.S. employment and wage growth numbers suggested that additional rounds of rate hikes were probably in store as the Fed continued its fight against inflation.
The MSCI Emerging Markets Index advanced 3.96% for the quarter, with the strongest sector gains in information technology (+14.76%) and communication services (+12.60%), and the weakest returns in utilities (-10.50%) and healthcare (-4.89%). The Czech Republic was the index’s top performing country, climbing an impressive 32.98%, followed by Mexico (+20.33%), Greece (+15.75%), and Taiwan (+14.75%). The largest country declines were in Colombia (-13.48%), Turkey (-9.42%), and the United Arab Emirates (-7.54%).
Portfolio Overview
The Virtus Emerging Markets Opportunities Fund gained 6.96% (Class INST) for the quarter while the MSCI Emerging Markets Index rose 3.96%. From a sector perspective, stock selection in information technology, consumer discretionary, utilities, and industrials contributed the most to performance. An underweight communications services position weighed the most on returns.
Contributors
Novatek Microelectronics and DB HitTek were among the strongest stock contributors.
Detractors
Banpu Public and Axis Bank were among the largest stock detractors.
Outlook
Looking ahead, we see a generally constructive backdrop for emerging markets equities. U.S. employment gains appear to be slowing, and the U.S. economy looks like it is probably heading toward recession, if it is not already in one. This likely will put pressure on the U.S. dollar, which is historically a positive for emerging markets.
China also continues to emerge out of recession. While the country faces a number of challenges as it tries to rebalance its economy, its reopening from COVID lockdowns should be a favorable contributor to global growth and help it remain a central driver in the developing world.
Another bright spot is India’s economy, which continues to perform extremely well. The country emerged from COVID much earlier than China and has benefited from both a booming real estate market and overall consumer strength.
We expect these factors should provide supportive tailwinds. Additionally, increased dispersions across these markets have offered greater opportunities to capture attractive outperformance potential through our active stock selection process. We continue to apply systematic, behavioral finance research to uncover investment potential, while maintaining a disciplined focus on mitigating downside risk. This higher-quality, lower-volatility approach seeks to deliver stronger, more consistent returns over the long term.