The Virtus Greater European Opportunities Fund Class A (VGEAX) seeks to “offer investors exposure to European market economies through well-established companies.”
The securities selected for inclusion in the fund “are believed by the subadviser to be well-managed businesses with consistent operating histories and financial performance that have favorable long-term economic prospects and, in most cases, generate free cash flow. Over full market cycles, the investment style is designed with the objective of capturing part of the up market cycles and may offer protection in down market cycles.”
While VIA (Virtus Investment Advisers) serves as the investment adviser of the fund, Vontobel Asset Management functions as its subadviser.
VGEAX’s assets were spread across 45 holdings as of September 2015, when it was managing assets worth $20.6 million. As for the fund’s September portfolio, its top ten equity holdings included British American Tobacco (BTI), Philip Morris International (PM), the Priceline Group (PCLN), and Novo Nordisk A/S (NVO), which together make up 17.6% of the fund’s portfolio.
For this analysis, we’ll be considering holdings as of June 2015, as this is the latest sectoral breakdown available to us. VGEAX’s holdings after June reflect valuation-driven changes to the portfolio, not the actual holdings.
Here’s a key breakdown of the fund’s holdings:
- Unlike other funds in this review, VGEAX has been heavily weighted in consumer staples—a sector that occupies 40% of the fund’s portfolio. In 2014, the sector commanded 36% of the fund’s assets. Consumer discretionary and healthcare follow, making up a combined 34.7% of the portfolio.
- The fund has no investments in the energy, telecom services, or utilities sectors.
- In the year preceding September 2015, VGEAX increased exposure to financials and consumer discretionary stocks, apart from consumer staples.
On the other hand, exposure to industrials and IT (information technology) declined sharply, with the materials sector also seeing a decline. But how has Virtus Greater European Opportunities Fund Class A’s unique portfolio positioning impacted its performance?
Continue to the next part of this series to find out.