Virtus Zevenbergen Technology Fund
Virtus Zevenbergen Technology Fund
Investment Overview
The Fund seeks attractive long-term competitive returns by investing in a diversified portfolio of innovative technology companies that are capitalizing on the major themes powering tech sector growth.
Effective July 25, 2022, this Fund's name and subadviser have changed.
Investment Partner
Zevenbergen Capital Investments LLC
Zevenbergen Capital Investments LLC is a growth equity boutique. The investment team applies rigorous fundamental research to build exclusively high-growth portfolios.
Learn more about Zevenbergen Capital Investments LLC
Investment Professionals
Nancy Zevenbergen, CFA
President, Co-Chief Investment Officer, Portfolio Manager
Industry start date: 1981
Start date as fund Portfolio Manager: 2022
Brooke de Boutray, CFA
Co-Chief Investment Officer, Portfolio Manager
Industry start date: 1982
Start date as fund Portfolio Manager: 2022
Joseph Dennison, CFA
Portfolio Manager
Industry start date: 2011
Start date as fund Portfolio Manager: 2022
Anthony Zackery, CFA
Portfolio Manager, Sustainable Investment Lead
Industry start date: 2011
Start date as fund Portfolio Manager: 2022
Key Features
Capitalizing on Technological Growth Trends
The Fund aims to identify significant growth trends ahead of the crowd, building an intimate knowledge of technology companies with optimal exposure to key trends and investing in those that demonstrate market leading potential
Diversified Technology Portfolio
The Fund invests in 40-70 emerging and mature technology companies, focusing on revenue, cash flow, and earnings growth in companies with strong management and solid fundamentals
Leveraging an Information Advantage
The portfolio management team has deep experience uncovering emerging trends and managing investments in technology companies across lifecycles, applying perspective from decades of industry knowledge
Characteristics4
(as of 03/31/2023)| Average Weighted Market Cap (billions) | $716.37 |
| Median Market Cap (billions) | $53.60 |
| Trailing P/E Ex-Negative Earnings | 37.35 |
| Price-to-Cash Flow | 30.47 |
| Price-to-Book Value | 9.78 |
| 3-Year Earnings Growth Rate | 26.47 |
Top Holdings (% Fund)
| Security | |
|---|---|
| Microsoft Corp | |
| Apple Inc | |
| Alphabet, Inc.- Cl C | |
| Amazon.com Inc | |
| NVIDIA Corp | |
| Palo Alto Networks Inc | |
| Meta Platforms Inc | |
| Tesla Inc | |
| Visa Inc | |
| ON Semiconductor Corp |
Holdings are subject to change.
Industry Allocation (% Equity)
| Systems Software | |
| Semiconductors | |
| Interactive Media Services | |
| Broadline Retail | |
| Technology,Hardware,Storage&Periphe | |
| Transaction & Payment Processing Services | |
| Application Software | |
| Internet Services & Infrastructure | |
| Semiconductor Materials & Equipment | |
| Automobile Manufacturers | |
| Advertising | |
| Passenger Ground Transportation | |
| Electronic Components | |
| Technology Distributors | |
| Aerospace & Defense | |
| Communications Equipment | |
| Hotels, Resorts & Cruise Lines | |
| Electrical Components & Equipment | |
| Real Estate Operating Companies | |
| Trading Companies & Distributors |
Growth of $10,000 Investment
From toPerformance
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
Financial Materials
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
A combination of resilient economic data and moderating inflation in the first quarter provided hope that the Federal Reserve’s (Fed’s) interest rate playbook might be entering its final innings. A welcome period of improved portfolio performance followed as some investors navigated back to companies that are executing efficiently, implementing operational changes, and guiding to continued secular growth. This optimism was tempered in March by several high-profile bank failures and the subsequent scrutiny of financial institutions’ balance sheets and cash positions, which generated significant volatility across most asset classes. These developments left investors assessing the extent of future Fed actions and top-down considerations related to the access and cost of capital for individuals and businesses.
Fund Performance
Amid these macro-related developments, the Virtus Zevenbergen Technology Fund returned 25.11% (Class I) in the quarter, outperforming the 21.45% return of the S&P North American Technology Sector Index. The Fund’s consumer discretionary (automobiles, diversified retailers) and information technology (semiconductors, computer hardware) holdings were responsible for most of the quarterly returns, while the real estate sector (diversified REITs) was a minor detractor from performance.
NVIDIA and Apple were the largest contributors to performance in the quarter.
Enphase Energy and BILL Holdings were the largest detractors from performance in the quarter.
Perspective
The financial world can feel as if it’s traveling at warp speed with dynamic headlines about technological advancements, Fed announcements, economic data disclosures, and corporate statements. The global economy and investor psychology oscillates, cycling between periods of accommodative (hope) and restrictive (despair) conditions, with speculators attempting to forecast and time each hypothesis along the way. Above the fray, ZCI remains unwavering in the view that a company’s revenue, earnings, and free cash flow growth ultimately determine investment outcomes.
Two recent events have the potential of disrupting status quo behaviors from Wall Street to Main Street. First, the U.S. regional bank crisis exposed fragility in the banking system and will likely result in tighter lending conditions and more onerous industry regulations. The benefits of operating as a well-capitalized public company should not be taken for granted in this environment. ZCI will continue to monitor capital market trends and cash needs for existing and prospective portfolio companies.
Second, the public release of OpenAI’s ChatGPT, an AI and machine learning (ML) language tool, captured the attention of more than 100 million users faster than any application in history. AI/ML concepts have been around for decades, but the industry has arguably experienced its “leap forward” moment. Companies that provide critical infrastructure used in AI development, as well as those that have large and diverse datasets to train the models, stand to benefit as technology and markets continue to evolve. The need for innovation is perpetual, offering exciting and potentially wealth-creating frontiers for investors with a time horizon long enough to weather the daily noise.