Virtus Greater European Opportunities Fund

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, in the opinion of the subadviser, 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 dual objectives of capturing part of the up market cycles and protecting principal in down market cycles.”

Virtus Investment Advisers is the investment adviser to VGEAX, and Vontobel Asset Management is its subadviser.

VGEAX’s assets were spread across 45 holdings as of March 2016, three less than a quarter ago. It was managing assets worth $30.1 million as of the end of March. As of March, its top ten equity holdings included Philip Morris International (PM), Nestlé (NSRGF), Priceline Group (PCLN), Imperial Brands (ITYBY), and SABMiller (SBMRY). Together, they make up 19.3% of VGEAX’s portfolio.

Sector Composition Changes in VGEAX until 1Q16

Portfolio changes in the Virtus Greater European Opportunities Fund

For this analysis, we’ll be considering VGEAX’s holdings as of December 2015, the latest available sectoral breakdown. The holdings after December reflect valuation-driven changes to the portfolio, not the actual holding.

You can describe VGEAX’s portfolio as short and sweet. It has the second-smallest assets under management among the 12 funds in this review. It’s invested across 45 stocks and seven of ten GICS (Global Industry Classification Standard) sectors. It’s not invested in energy, telecom services, or utilities.

VGEAX is uniquely positioned. Unlike any other fund in this review, it has consumer staples as its largest invested sector. It forms 41% of VGEAX’s assets. Healthcare and consumer discretionary are other core sectors of the fund. These three sectors form a combined 73% of the portfolio.

Exposure to consumer staples has risen compared to a year ago. In this period, the fund’s management has sharply raised exposure to information technology stocks. The increase in these two sectors was possible at the cost of a decline in the percentage composition of other sectors.

Let’s see next how VGEAX fared in 1Q16 and what contributed to its performance.

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