Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — virtus allianzgi convertible fund pres 3474
27 slides from Virtus Investment Partners's investor presentation, Dec 31, 2021
Slide 1: Virtus AllianzGI Convertible Fund
VIRTUS ALLIANZGI CONVERTIBLE FUND* December 31, 2021 *Effective February 1, 2021, this Fund’s name and investment adviser have changed. The Fund’s distributor is now VP Distributors, LLC.
Slide 2: Important Risk Considerations
IMPORTANT RISK CONSIDERATIONS Market Volatility Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the
Slide 3: Virtus Investment Partners: Multi-Boutique, Multi-Strategy Model
VIRTUS INVESTMENT PARTNERS MULTI-BOUTIQUE, MULTI-STRATEGY MODEL KEY FACTS AFFILIATES $187.2 Billion in AUM 40 2 Funds Rated 4 or 5 Stars1 SUBADVISERS 3 Past performance is not indicative of future results. As of 12/31/21. 1Based on institutional-class shares, except for funds without I shares, for w
Slide 4: Allianz Global Investors At a Glance
ALLIANZ GLOBAL INVESTORS At a Glance Founded in 1998 A wholly owned subsidiary of Allianz SE AUM of $749 billion* 705 investment professionals across the globe Established expertise in equities, fixed-income, multi-asset, and alternative investments. *AUM as of September 30, 2021. Source
Slide 5: AllianzGI Income and Growth Platform
ALLIANZGI INCOME AND GROWTH PLATFORM ASSETS UNDER MANAGEMENT ALLIANZ GLOBAL INVESTORS’ INCOME AND GROWTH TEAM STRATEGIES: $70.6 BILLION Convertibles $7.0 High Yield High-yield $2.2 Bonds Short Duration High Income $6.4 Fixed Income - Other $0.5 Income and Growth $54.5 Convertible Securities Equities
Slide 6: AllianzGI U.S. Income and Growth Team
ALLIANZGI U.S. INCOME AND GROWTH TEAM Our highly credentialed investment team has extensive industry experience and utilizes the firm’s Global Research Platform Douglas G. Forsyth, CFA Portfolio Management/Research/Trading 30 Years Industry Experience, 27 Years at AGI PORTFOLIO MANAGEMENT/RESEARCH/T
Slide 7: What Is a Convertible Bond?
WHAT IS A CONVERTIBLE BOND? Convertibles offer investors the advantages of both stocks and bonds Equity Straight Bond + Warrant = Convertible Bond Advantage of Bonds Advantage of Stocks Objective: Objective: Downside risk mitigation/claim to principal Principal growth Interest income Unlimit
Slide 8: Behavior of a Convertible Bond
BEHAVIOR OF A CONVERTIBLE BOND PARTICIPATION POTENTIAL, VOLATILITY CUSHIONING Total Yield/Busted Return Equity Like Convertible Bond Value Upside potential of CONVERTIBLES underlying equity Designed for downside risk Bond Floor mitigation from the bond Stock Price Downside Risk Mitigation Upside Par
Slide 9: Why Invest in Convertible Bonds?
WHY INVEST IN CONVERTIBLE BONDS? U.S. convertible bond market May provide investors with upside participation ICE BofA U.S. Convertible Index S&P 500 Index of equities 6.4 May provide investors income and downside 5.2 risk mitigation of bonds Avg. Quarterly Return (%) ICE BofA U.S. S&P 500® Conv
Slide 10: Allianz Global Investors U.S. Income and Growth Strategies Team
ALLIANZ GLOBAL INVESTORS U.S. INCOME AND GROWTH STRATEGIES TEAM Bottom-up, fundamental process Rigorous and in-depth financial analysis combined with direct access to top analysts and management teams Disciplined investment approach Total return focused manager with strong risk management oversight
Slide 11: Investment Philosophy and Process
ALLIANZ GLOBAL INVESTORS INVESTMENT PHILOSOPHY AND PROCESS Investing in companies poised to benefit from positive fundamental change Company Proprietary Monitoring Idea Relative Value Summary Upgrade Alert and Risk Generation and Trading Sheet Model Management The diagram and statements above reflec
Slide 12: Idea Generation
ALLIANZ GLOBAL INVESTORS IDEA GENERATION AllianzGI’s resources are focused on identifying qualitative investment opportunities RESOURCES: PEOPLE Investment Specializing in company research across all industries management team Open environment Leverage fundamental company research from entire
Slide 13: Company Summary Sheet
ALLIANZ GLOBAL INVESTORS COMPANY SUMMARY SHEET Team discussion Fundamental analysis Company description Competitive landscape Positive catalysts Analyst/company Key risks Management contact Basic operating statistics Revenue growth Cash/debt/capital Operating income/margin expendit
Slide 14: Upgrade Alert Model: Financial Statements
ALLIANZ GLOBAL INVESTORS UPGRADE ALERT MODEL FINANCIAL STATEMENTS Published rating: B3/B+ Years ended December 31 Projections: Base case Financial statements 2019 2020 2021 2022 2023 2024 Income statement Sales 2,242 2,504 2,704 2,812 2,953 3,101 Gross profit 903 1,004 1,068 1,133 1,196 1,259 Operat
Slide 15: Upgrade Alert Model: Operating Statistics
ALLIANZ GLOBAL INVESTORS UPGRADE ALERT MODEL OPERATING STATISTICS Operating statistics reviewed Published rating: B3/B+ Years ended December 31 Projections: Base case Objective internal credit Financial statements 2019 2020 2021 2022 2023 2024 Liquidity rating created Current ratio 1.7 1.6 2.5 2
Slide 16: Asymmetric Risk/Reward Profile
ASYMMETRIC RISK/REWARD PROFILE Convertible bonds have delivered equity-like returns with less volatility than stocks 14 12 S&P 500 10 Russell 2000 Index ICE BofA U.S. Convertible Index Return (% Annualized) 8 6 4 2 0 0 2 4 6 8 10 12 14 16 18 20 Risk (% Annualized) Past performance is not indicative
Slide 17: Correlations
CORRELATIONS Convertibles have had lower correlations to core fixed income U.S. Small Stocks 0.87 U.S. Large Stocks 0.86 Non-U.S. Stocks 0.71 U.S. Gov't. / Credit Bond 0.13 10-Year Treasuries -0.12 U.S. Convertibles Past performance is not indicative of future results. January 1988 to December 2021.
Slide 18: Market Participation
MARKET PARTICIPATION Convertibles have performed well, regardless of the interest rate environment FALLING INTEREST RATE ENVIRONMENTS RISING INTEREST RATE ENVIRONMENTS 3.0 2.6 2.4 Avg. Quarterly Return (%) -1.3 102 Up Quarters 34 Down Quarters ICE BofA US Convertible Index BBG Barclays U.S. Governme
Slide 19: Universe Size
UNIVERSE SIZE New issuance remained robust in 2021 351 341 313 293 289 282 263 232 218 221 212 211 212 Billions ($) 208 194 186 188 186 177 178 166 171 155 128 120 104 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 As
Slide 20: Convertibles Universe Size and New Issuance
CONVERTIBLES UNIVERSE SIZE AND NEW ISSUANCE Market strategists are projecting convertible new issuance of $60-65 billion for 2022 – a slower pace than 2021 but well above 2018 and 2019 volumes 140 400 351 341 350 120 Universe size 106 300 100 New Issuance ($, billions) Universe Size ($, billions) 84
Slide 21: Four Reasons to Invest
FOUR REASONS TO INVEST 1 Asymmetric Risk/ Reward Profile Convertibles may provide equity-like return with less volatility 2 Attractive Growth Opportunities Given current market dynamics, we expect convertible new issuance to remain elevated, providing attractive investment opportunities 3 Divers
Slide 22: Characteristics and Exposures
CHARACTERISTICS AND EXPOSURES VIRTUS ALLIANZGI CONVERTIBLE FUND Characteristics Fund Benchmark Top Ten Holdings % of Fund Top Sectors % of Fund Holdings 117 538 Broadcom Inc 8.00 % Cum Technology 35.57 Conv Pfd Registered Shs 3.03 Delta 0.66 0.55 2019-30.09.22 Series A Consumer Discretionary 18.90 C
Slide 23: Performance Review
PERFORMANCE REVIEW AS OF DECEMBER 31, 2021 ANNPX MORNINGSTAR RATINGSTM Convertibles Index INST Share Category 27.52% 24.18% Time Period # of Stars # of Funds 19.74% Overall 73 16.87% ★★★★★ 14.43% 13.89% 11.69% 3 Year ★★★★★ 73 9.54% 6.34% 5 Year ★★★★★ 70 6.34% 5.28% 5.28% 1.03% 10 Year ★★★★★ 54 Morni
Slide 24: Market Participation
MARKET PARTICIPATION Convertible bonds have delivered equity-like returns with less volatility than stocks 3.3 ICE BofA U.S. Convertible Index 2.8 2.5 ANNPX S&P 500® Index -2.5 -2.6 -3.7 232 Up Months 115 Down Month ICE BofA U.S. Convertible Index ANNPX S&P 500® Index Annualized return 10.19% 11.64%
Slide 25: Performance: Growth of $10,000
$0 $100,000 $150,000 $200,000 $250,000 $300,000 $50,000 4/19/1993 9/30/1993 3/31/1994 9/30/1994 3/31/1995 GROWTH OF $10,000 9/30/1995 3/31/1996 9/30/1996 3/31/1997 9/30/1997 PERFORMANCE 3/31/1998 9/30/1998 3/31/1999 9/30/1999 3/31/2000 9/30/2000 Past performance is not indicative of future results.
Slide 26: Disclosures and Important Information
DISCLOSURES AND IMPORTANT INFORMATION The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sal
Slide 27: About Virtus
Virtus (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors. We are not constrained by a single investment approach; rather, we provide access to independent, specialized investment phil