Virtus Greater European Opportunities Fund overview

The Virtus Greater European Opportunities Fund (VGEAX) notes that it “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 Virtus Investment Advisers is the investment adviser to the fund, Vontobel Asset Management functions as its sub-adviser.

Looking at the Portfolio of the Virtus Greater European Opportunities Fund

VGEAX’s assets were spread across 45 holdings in September 2016, and it was managing assets worth $22.4 million. In June, the latest complete portfolio available, its equity holdings included Philip Morris International (PM), Heineken NV (HEINY), Randgold Resources (GOLD), Fresenius Medical Care AG & Co. (FMS), and SABMiller plc (SBMRY).

Portfolio changes in the Virtus Greater European Opportunities Fund

VGEAX has the second smallest number of assets under management among the 12 funds in this review. Its assets are spread across just 45 holdings, and it is invested in just eight of 11 GICS (Global Industry Classification Standard) sectors. It is not invested in energy, telecom services, or utilities.

VGEAX is uniquely positioned. Unlike any other fund in this review, the fund has the consumer staples sector as its largest invested sector, forming a whopping 42% of the fund’s assets. Healthcare and consumer discretionary are other core sectors invested in by the fund. Along with information technology, the four sectors form a combined 81% of the portfolio.

A look at the quarterly portfolios of VGEAX for three years until September 2016 reveals that even three years ago, exposure to consumer staples was quite high at a third of the portfolio. At present, it increased even further to 42%. Its exposure to financials has been quite varied.

The fund had a double-digit exposure to financials three years ago. Its exposure had declined to less than 2.5% by the end of 2014, increased to a tenth of the portfolio three quarters later, and it currently stands at 6%.

Although tech stocks have seen their portfolio weight climb substantially, industrials have seen a sharp decline.

In the next article, let’s see how the Virtus Greater European Opportunities Fund – Class A (VGEAX) has fared in YTD 2016 and what has contributed to its performance.

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