Home / Mutual Fund / Virtus Silvant Mid-Cap Growth Fund
Mutual Fund Equity Domestic Equity

Virtus Silvant Mid-Cap Growth Fund

Image specific to each asset class and market style grouping.
Ticker
RMDAX
CUSIP
92837N352
POP
$ (as of )
Inception
02/05/2002
Total Assets by Class
$239,892,115.68 (as of 12/02/2022)
Total Assets by Fund
$302,275,084.56 (as of 12/02/2022)
Morningstar Category
Mid-Cap Growth

Portfolio Overview

Investment Overview

The Fund seeks to generate capital appreciation by investing in a portfolio of U.S. mid-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.

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

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

Show More
Sandeep Bhatia

Sandeep Bhatia, Ph.D., CFA

Managing Director, Senior Portfolio Manager

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

Show More
Sowmdeb Sen

Sowmdeb Sen

Managing Director, Portfolio Manager

Industry start date: 1999
Start date as fund Portfolio Manager: 2022

Show More

Key Features

Growth as a Condition, Not a Category

Searches for mid-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 09/30/2022)
Average Weighted Market Cap (billions) $26.71
Median Market Cap (billions) $20.77
Trailing P/E Ex-Negative Earnings 23.16
Price-to-Cash Flow 25.79
Price-to-Book Value 7.05
3-Year Earnings Growth Rate 22.15

Top Holdings (% Fund)

(as of 09/30/2022)
Security
Enphase Energy Inc
3.64
 3.64%
Waste Management Inc
3.07
 3.07%
Palo Alto Networks Inc
3.06
 3.06%
Quanta Services Inc
3.02
 3.02%
AmerisourceBergen Corp
2.97
 2.97%
Keysight Technologies Inc
2.89
 2.89%
EPAM Systems Inc
2.87
 2.87%
Arthur J Gallagher & Co
2.73
 2.73%
O'Reilly Automotive Inc
2.64
 2.64%
Dexcom Inc
2.62
 2.62%

Holdings are subject to change.

Sector Allocation (% Equity)

(as of 09/30/2022)
Information Technology
33.02
 33.02%
Industrials
18.80
 18.80%
Consumer Discretionary
17.25
 17.25%
Health Care
17.04
 17.04%
Real Estate
3.91
 3.91%
Communication Services
3.79
 3.79%
Financials
2.75
 2.75%
Energy
2.50
 2.50%
Materials
0.94
 0.94%

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.
Prospectus: For additional information on risks, please see the fund's prospectus.

Commentary

3Q22

Market Review

U.S. equity markets continued their decline in the third quarter, despite a strong rally early in the period. The Federal Reserve (Fed) continued its aggressive fight against inflation with additional interest rate hikes and signaled that monetary tightening would continue until inflation approaches 2%. The Fed’s effort to slow the economy appeared to be working, with U.S. gross domestic product shrinking for a second consecutive quarter. Global economic weakness and elevated geopolitical risks added to the macro pressures, all of which were putting U.S. equities on track to deliver their worst year in decades. Robust labor and wage gains, though easing, remained the bright spot in the economy.     

While growth equities were broadly down in the quarter, they tended to outperform the wider market. The Russell Midcap® Growth Index fell 0.65%, with the largest sector losses in real estate (-7.35%), healthcare (-6.10%), and communication services (-5.34%). Energy (+5.41%), information technology (+1.56%), and consumer discretionary (+0.90%) delivered the strongest returns.

Performance

The Silvant Mid-Cap Growth Fund rose 0.27% (Class INST) in the third quarter, while the Russell Midcap Growth Index declined 0.65%. Stock selection in information technology, communication services, and consumer discretionary added the most to returns. Stock selection in healthcare and industrials weighed the most on performance.

Enphase Energy and Trade Desk were among the strongest stock contributors.

  • Solar energy conversion company Enphase Energy outperformed on strong revenue driven by growing demand across its storage and batteries businesses. The company also raised its forward guidance, expecting its sales momentum to continue in reaction to surging fuel prices. We continued to hold the stock given its favorable performance and upbeat outlook but trimmed the position.
  • Shares of digital marketing firm Trade Desk jumped on higher-than expected revenue and core profitability in what was anticipated to be a challenging quarter for the company due to softer advertising spending at major players like Apple, Google, and Meta. However, the company was able to buck this trend with strong gains in internet TV ad sales. We maintained the position as we see a long growth runway for the stock.
  • Additional top contributors included Wingstop, EPAM Systems and Keysight Technologies.

Avantor and Catalent were among the largest stock detractors.

  • Specialty chemicals and materials company Avantor lagged on lighter-than-expected earnings and revenue due to macro weakness, challenging currency exchange rates, and continued COVID exposure. The company’s 2021 acquisitions of Ritter GmbH and Masterflex also have not performed as well as expected. We exited the position based on the company’s lowered outlook.
  • Pharma services company Catalent underperformed on disappointing revenue and lowered forward guidance due to faster than anticipated COVID vaccine declines. It was thought that guidance appropriately accounted for the deceleration in vaccine production, yet the pace has increased. In contrast, the company raised long-term guidance on expected growth in the biologics segment supporting their capacity expansion. We held steady with the stock but are closely monitoring its key metrics for changes.
  • Additional bottom contributors included The Cooper Companies, Leidos Holdings, and Lam Research.

Portfolio Changes

New Fund holdings included Etsy and Insulet. In addition to Avantor (discussed above), we exited Seagate Technology Holdings.

  • We purchased online craft and vintage goods retailer Etsy. The company’s sales volumes soared during the pandemic but fell off as economies began to open again. It now appears that its business growth has started to recover and once again accelerate.
  • We bought insulin delivery systems company Insulet, which has delivered consistently growing sales volumes and should benefit from the strong market outlook for its new Omnipod 5 product.
  • We sold data storage firm Seagate Technology Holdings on the general slowdown in personal computer demand and concerns about the company’s softer growth and market share.

Outlook

We remain cautious in the current economic climate. Equity markets are likely to stay volatile as the Fed continues to tighten financial conditions. Although valuations based on trailing earnings have started to look more attractive amid the year-to-date decline in equities, the upcoming earnings season may result in lower forward-looking earnings guidance from companies. In our view, the market is pricing in more negative earnings sentiment. However, broadly speaking, companies’ outlooks have probably not yet come down enough, given how long the current economic headwinds could persist.

We believe the portfolio is well positioned despite the challenging environment. For example, while many of the companies that we own have started to experience generally lighter sales volumes, they have largely been able to offset any slowdown with notably better pricing. Our focus remains on holding growth businesses that are better at executing and competing than their peers. These are the types of stocks, in our view, that should be more resilient in the current cycle and also be well suited to outperform when the economic tide finally turns. The key at this point is to keep focusing on fundamentals while being patient.

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 Mid-Cap Growth Fund Fact Sheet - INST
Virtus Silvant Mid-Cap Growth Fund Fact Sheet - A

Financial Materials

Virtus Investment Trust Statutory Prospectus
Virtus Silvant Mid-Cap Growth Fund Summary Prospectus
Virtus Investment Trust SAI
Virtus Investment Trust Annual Report
Virtus Investment Trust Semiannual Report
Virtus Silvant Mid-Cap Growth Fund Information Statement

Holdings

Virtus Silvant Mid-Cap Growth Fund Monthly Holdings
Virtus Silvant Mid-Cap Growth Fund Top Holdings
Virtus Silvant Mid-Cap Growth Fund Holdings Fiscal Q1
Virtus AllianzGI Mid-Cap Growth 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.