Should You Worry about JVIAX?



Performance evaluation of the Virtus Foreign Opportunities Fund

The Virtus Foreign Opportunities Fund Class A (JVIAX) is right in the middle of the pack of 12 funds chosen for this review. The past three months haven’t been kind to the fund, but it features in the top three funds for the one-year period. We’ve graphed its performance against the iShares MSCI ACWI ex U.S. ETF (ACWX) and the iShares MSCI EAFE ETF (EFA).

Let’s look at what’s contributed to the fund’s average performance so far in 2016.

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Contributions to returns

Consumer staples, the fund’s most invested sector, has been its most beneficial contributor year-to-date. British American Tobacco (BTI) leads the positive contributors from the sector, which include Philip Morris International (PM), Nestlé (NSRGY), and Unilever (UN). Though Chocoladefabriken Lindt & Sprüngli and Japan Tobacco (JAPAY) have contributed negatively, their contributions have been quite low.

The fund’s stock picks from the information technology sector have been excellent as well. SAP (SAP), Tencent Holdings (TCEHY), and Accenture (ACN) have engineered the sector’s success. There have been no negative contributors from the sector.

The consumer discretionary sector hasn’t been as lucky. While Naspers and The Priceline Group (PCLN) have helped the sector, sizable negative contributions from Persimmon and Domino’s Pizza Group have weighed on the sector. Meanwhile, Enbridge (ENB) has fueled the energy sector.

The healthcare sector is the only sector to have weighed substantially on the fund’s returns year-to-date. Roche Holding (RHHBY), Novo Nordisk (NVO), and Bayer (BAYZF) are equally responsible for the fund’s poor showing. However, there’s been some help for the sector in the form of Ramsay Health Care’s contributions.

Investor takeaway

JVIAX has had a shaky 2016 so far. However, its one-year performance is comforting. The fund is unconventionally positioned, so it can work as a satellite fund supplemented by a core holding.

Investors should take note of the management changes that have taken place in the fund recently. Due to these changes, it remains to be seen whether the new team can do as well as—or better than—its predecessor.

Let’s move on to the Oppenheimer International Growth Fund Class A (OIGAX).


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