Performance evaluation

The Virtus Greater European Opportunities Fund (VGEAX) rose 7.0% in October 2015 from a month ago, making it the only fund to reach that level. In the three-month and six-month periods ended October 30, the fund rose 0.1% and 2.1%, respectively. It was the only fund among the ten to post positive returns for these two periods. In the YTD (year-to-date) period, the fund rose by 9.6%. Further, it rose 8.0% from a year ago. In comparison, from October-end until November 23, the fund fell 2.3%

Insight: How Portfolio Changes Benefited VGEAX

The fund has been very consistent with its performance as it topped the list of the ten funds under review.

Let’s look at what contributed to the fund’s superlative October performance.

Portfolio composition and contribution to returns

The VGEAX has the second smallest track record among the ten funds in this review. It has been in existence since April 2009. According to its latest geographical disclosure, companies from the United Kingdom, Switzerland, and France are the top three invested geographies, in that order.

The latest complete portfolio available for the fund is as of September 2015. So, we’ll take that portfolio as our base and consider valuation changes as they stand at the end of October 2015 for our analysis. All portfolio percentages mentioned from here on refer to their weights as per changes in valuation from September to October.

Stock picks from all of the fund’s top invested sectors—consumer staples, healthcare, and consumer discretionary—fired, thus helping the fund post the superior performance it did. Major stock movers included Anheuser-Busch (BUD), Imperial Tobacco Group (ITYBY), Novo Nordisk (NVO), Grifols (GRFS), Accenture (ACN), and B Shares of Novozymes (NVZMY).

Reasons for strong performance

The fund’s timely portfolio positioning has helped it navigate 2015 well so far. Loading up on defensive stocks on time, realigning financials, and exiting energy altogether were some reasons why the fund did so well this year.

However, investors should look at the longer-term performance of the fund to see how its strategies performed in different market cycles.

In the last part of this series, we’ll take a look at the overall picture that emerges from this analysis.

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