Virtus Silvant Focused Growth Fund

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Mutual Fund Equity Domestic Equity

Virtus Silvant Focused Growth Fund

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Ticker
PGWAX
CUSIP
92837N824
POP
$ (as of )
Inception
10/26/1990
Total Assets by Class
$732,291,941.23 (as of 02/23/2024)
Total Assets by Fund
$1,234,737,091.19 (as of 02/23/2024)
Morningstar Category
Large Growth

Portfolio Overview

Investment Overview

The Fund seeks to generate capital appreciation by investing in a concentrated portfolio of U.S. large-cap companies that exhibit strong business fundamentals and above-average growth potential. A disciplined investment process focuses on identifying positive fundamental trends, including earnings and revenue growth, improving cash flows, and increasing return on invested capital.

Management Team

Investment Partner

Silvant Capital Management LLC

Silvant Capital Management is a growth equity boutique that leverages the passion and talents of a diverse, experienced group of investment professionals. Guided by their belief that growth companies can be found in every corner of the economy, Silvant strives to evaluate positive secular trends and disruptive products and services that can change the business landscape, identifying those companies best positioned to exceed investor expectations.


Learn more about Silvant Capital Management LLC

Investment Professionals

Michael Sansoterra

Michael A. Sansoterra

Chief Investment Officer, Managing Director, Senior Portfolio Manager

Industry start date: 1996
Start date as fund Portfolio Manager: 2022

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Sandeep Bhatia

Sandeep Bhatia, Ph.D., CFA

Managing Director, Senior Portfolio Manager

Industry start date: 2000
Start date as fund Portfolio Manager: 2022

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Brandi Allen

Brandi Allen

Managing Director, Portfolio Manager

Industry start date: 1997
Start date as fund Portfolio Manager: 2022

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Key Features

Growth as a Condition, Not a Category

Searches for large-cap growth opportunities across the market, including segments overlooked by many traditional growth managers

Extensive Fundamental Research

Bottom-up analysis strives to identify well-run businesses with positive investment characteristics and potential to grow earnings faster than peers

Focused on True Game Changers

Evaluates secular trends and disruptive products and services with potential to disrupt the business landscape and exceed investor expectations

Portfolio Characteristics

Characteristics4

(as of 12/29/2023)
Average Weighted Market Cap (billions) $1,300.30
Median Market Cap (billions) $206.29
Trailing P/E Ex-Negative Earnings 40.16
Price-to-Cash Flow 31.49
Price-to-Book Value 9.67
3-Year Earnings Growth Rate 16.81

Top Holdings (% Fund)

(as of 12/29/2023)
Security
Microsoft Corp
13.60
 13.60%
Apple Inc
12.88
 12.88%
NVIDIA Corp
8.91
 8.91%
Amazon.com Inc
7.38
 7.38%
Meta Platforms Inc
4.79
 4.79%
Eli Lilly & Co
4.53
 4.53%
Visa Inc
4.46
 4.46%
Alphabet, Inc.- Cl A
3.67
 3.67%
Fair Isaac Corp
3.64
 3.64%
Alphabet, Inc.- Cl C
3.32
 3.32%

Holdings are subject to change.

Sector Allocation (% Equity)

(as of 12/29/2023)
Information Technology
45.21
 45.21%
Health Care
14.02
 14.02%
Consumer Discretionary
13.49
 13.49%
Communication Services
12.14
 12.14%
Industrials
8.69
 8.69%
Financials
4.59
 4.59%
Materials
1.86
 1.86%

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

The Index shown represents the Fund's performance index, which may differ from the Fund's regulatory index included in the Fund's Prospectus.

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. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the portfolio, including hampering the ability of the portfolio's manager(s) to invest its 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, medium, or large-sized companies may enhance that risk.
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.
Prospectus: For additional information on risks, please see the fund's prospectus.

Commentary

Market Review

Growth equities rose broadly in the quarter, capping off a volatile year. Gains were driven by cooler inflation numbers and investor optimism that the surge in Consumer Price Index (CPI) increases that have weighed on markets and driven interest rates higher may have peaked. The Federal Reserve (Fed) also slowed the pace of its federal funds rate hikes from four straight 0.75% increases to 0.5% in December, not exactly dovish behavior but a notable downshift nonetheless.

Cyclical stocks led the rally, with value securities generally outperforming growth names as revenue and earnings expectations reset lower on anticipated slowing economic growth. The Russell 1000® Growth Index gained 2.20% in the period to end 2022 down 29.14%, with the largest sector increases for the quarter in utilities (+16.56%), industrials (+15.41%), healthcare (+13.07%), and energy (+12.83%). Only consumer discretionary (-15.65%) and communication services (-6.39%) posted declines.

Performance

The Virtus Silvant Focused Growth Fund gained 0.42% (Class INST) for the quarter versus the Russell 1000 Growth Index’s rise of 2.20%. Large performance detractors included stock selection in consumer discretionary, stock selection and an overweight in communication services, and an overweight in financials. Stock selection in industrials and an overweight in healthcare contributed to performance.

Boeing and Visa were among the strongest stock contributors.

  • Aerospace leader Boeing gained on its upbeat outlook given the continued rebound in air travel and the company’s ability to ramp delivery of its 787 Dreamliner faster than expected. It also received a long-sought deadline extension from Congress around new safety standards for its MAX 7 and MAX 10 airliners. We continued to hold the stock as we see room for additional gains.
  • Payment processing firm Visa outperformed on higher-than-expected earnings driven by growing payments volume from strong consumer spending and cross-border transaction gains as international travel continued to rebound. We maintained the position as the company remains a high-margin business in what is largely a duopoly market, though it will be facing more challenging performance comparables moving ahead given the stock’s continued strong run.
  • Additional top contributors included NVIDIA, Fair Isaac Corp., and Intuitive Surgical.

Tesla and Apple were among the largest stock detractors.

  • Automotive and clean energy company Tesla underperformed on softer-than-expected revenue, continued production limitations, and delivery delays. Shares were also likely further pressured by the distractive media storm around controversial CEO Elon Musk’s high-profile purchase and handling of social media service, Twitter. We scaled back the position given the cracks we are seeing in the company’s key metrics.
  • Technology leader Apple underperformed on sector softness and global macroeconomic headwinds. The company reported strong earnings and revenue, but disappointed on decelerating iPhone sales and softer-than-expected growth in its high-margin services businesses. It also continued to experience manufacturing disruptions in China. We maintained the holding as we expect the company to navigate the transition to slower economic growth better than many businesses, given its marketplace leadership.
  • Additional bottom contributors included Amazon.com, Alphabet, and Edwards Lifesciences.

Portfolio Changes

ASML was the only new portfolio addition. There were no exits during the quarter.

  • We bought semiconductor equipment manufacturer ASML based on its attractive valuation after pulling back on technology sector weakness.

Outlook

Looking ahead, we believe the general market positives remain moderately ahead of the potential negatives. Employment continues to be healthy, which is good news for consumer sentiment and income, particularly real wages as inflation begins to come down. The Fed’s tightening cycle is likely near its peak, and China’s reopening from zero-COVID lockdowns should be supportive of increased global demand. If consumers keep spending, job growth remains resilient, and inflation continues to moderate, the broader economy may be able to avoid recession. That seems more probable now than it did last quarter, and if it proves to be the case, stocks should be able to gain, though the path may be volatile. 

Still, market expectations have clearly reset for a slower growth rate. The question at this point is whether revenue and earnings outlooks have come down enough? In this environment, we continue to focus on bottom-up company fundamentals, seeking out businesses whose key metrics are inflecting, where growth is a condition, rather than a category. In our view, these are the stocks that should continue to offer the potential to surprise markets on the upside and reward investors.

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 Silvant Focused Growth Fund Fact Sheet
Virtus Silvant Funds Presentation

Financial Materials

Virtus Investment Trust Statutory Prospectus
Virtus Silvant Focused Growth Fund Summary Prospectus
Virtus Investment Trust SAI
Virtus Investment Trust Annual Report
Virtus Investment Trust Semiannual Report

Holdings

Virtus Silvant Focused Growth Fund Monthly Holdings
Virtus Silvant Focused Growth Fund Top Holdings
Virtus Silvant Focused Growth Fund Holdings Fiscal Q1
Virtus Silvant Focused Growth Fund Holdings Fiscal Q3

Section 19(a) Notices

Section 19(a) Notice for Ex-Date December 20, 2023
Section 19(a) Notice for Ex-Date December 21, 2022

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.

© year 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.