Recently, we had the team from Virtus Investment Group in our office to discuss the emerging markets opportunities fund along with some of their other offerings. Here are some of the notes from the conversation:
- See emerging market equities and small- to mid-cap international stocks as the area with the best opportunities.
- Believe that valuations are much more attractive than domestic equities.
- They do however see some currency risk for U.S. based investors against Brazil, Russia and India.
- They believe that their model of staying away from commodity type stocks and lower quality should give them repeatable success.
- Much of the emerging companies they invest in are:
- Consumer Staples
- High Quality with relatively low volatility
- They are seeking out stocks that contain reliable and repeatable earnings.
- Despite being invested approximately 12% in Brazil, much of the downturn in the Brazilian markets did not impact performance.
While this fund is fairly concentrated with approximately 40% of the assets being in the top 10 holdings, Virtus has performed remarkably over time. We continue to have faith in Virtus in providing better than average risk adjusted returns. However, like any investment, we will continue to monitor the performance and holdings to make sure they continue to provide an investment vehicle suitable for your portfolios.