Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — NFJ Investment Group — Investor Presentation (July 2024)
28 slides from Virtus Investment Partners's investor presentation, July 2024
Slide 1: NFJ Large-Cap Value Wrap Strategy 2Q 2024
NFJ LARGE-CAP VALUE WRAP STRATEGY 2Q 2024
Slide 2: NFJ Investment Group
NFJ Investment Group Over 30 Years of Value Investing Established 1989 U.S. Portfolios Non-U.S./Global Portfolios Dallas, TX Dividend Value Emerging Markets Value AUM: $6.0 billion Large Cap Value Seasoned team, averaging International Value 20+ years industry All Cap Value experience Global
Slide 3: An Affiliate of Virtus Investment Partners
NFJ Investment Group An Affiliate of Virtus Investment Partners Multi-boutique model: Virtus Investment Partners preserves each affiliate’s unique entrepreneurial culture, provides continued investment autonomy, and ensures appropriate alignment of interests. Leading U.S. retail Autonomy of inve
Slide 4: Investment Philosophy
NFJ Investment Group Investment Philosophy We believe: Our Modern Value approach harnesses the power of advanced data analytics and fundamental expertise to identify quality value businesses. Valuation, shareholder yield, and quality are key to long-term investment success. Emphasizing diversificati
Slide 5: A Modern Approach to Value Investing
NFJ Investment Group A Modern Approach to Value Investing Fundamental expertise… …augmented by advanced data analytics Strict Valuation: Idea Generation: Capitalize on market dislocations Real-time processing of while avoiding value traps fundamental data points Strong Stewards of Capital: Informati
Slide 6: NFJ Large-Cap Value Wrap Investment Strategy Overview
NFJ Large-Cap Value Wrap Investment Strategy Overview Seasoned Portfolio Management Team Our portfolio managers have worked together for over 15 years Overview INCEPTION January 1, 2007 (strategy) January 1, 2011 (composite) BENCHMARK Russell 1000® Value Index Thomas W. Oliver, CFA, CPA Jeff N. Reed
Slide 7: Investment Process Overview
Investment Process Overview An Integrated Approach NFJ's Modern Value Approach combines advanced data analytics and other proprietary quantitative tools with fundamental analysis to identify attractively valued, high-quality companies. Idea Generation Portfolio Sell Fundamental Monitoring & Risk Dis
Slide 8: Idea Generation
Idea Generation Proprietary Research Tool and Advanced Data Analytics 1 Uncovering unique valuation insights seeks to offer a competitive advantage and begins with processing large amounts of data in an efficient and scalable manner The NFJ Research Workbench is designed to help identify valuation d
Slide 9: Fundamental Analysis
Fundamental Analysis Investing at the Intersection of Valuation, Shareholder Yield, and Quality 2 NFJ conducts a rigorous analysis of company fundamentals and financial output Valuation & Custom Peers: Shareholder Yield: Quality Evaluation: Identify attractive entry points Evaluate capital allocatio
Slide 10: Portfolio Construction: NFJ Large-Cap Value Wrap
Portfolio Construction: NFJ Large-Cap Value Wrap Diversification and Risk Mitigation 3 Seek to construct a portfolio of quality companies diversified across industries to help generate alpha and mitigate risk Position Sizing Sector 75-125 holdings Positioning Mitigate idiosyncratic risk Initia
Slide 11: Sell Discipline
Sell Discipline Dispassionate Approach to Exiting Companies 4 NFJ’s strict sell discipline seeks to remove emotion from the investment process Valuation Consideration Stock becomes expensive on absolute and relative valuations Compared to historical average, broad market, and custom peers Qualit
Slide 12: Portfolio Monitoring & Risk Management
Portfolio Monitoring & Risk Management Integrated Throughout the Investment Process Qualitative analysis and quantitative tools help identify and avoid idiosyncratic risks Internal Integrated Risk Management Portfolio risk is embedded throughout NFJ’s investment philosophy and process: Portfolio l
Slide 13: Portfolio Statistics
Portfolio Statistics As of June 30, 2024 NFJ Large-Cap Value Wrap vs. Russell 1000 Value Index Valuations Portfolio Index Price-to-Earnings (forward 1YR) 14.7x 15.4x Price-to-Earnings (trailing 1YR) 21.5x 21.1x Dividends Dividend Yield (trailing 1YR, %) 2.4 2.2 Dividend Growth Rate (5YR avg, %) 11.1
Slide 14: Sector Exposures and Top Ten Positions
Sector Exposures and Top Ten Positions As of June 30, 2024 NFJ Large-Cap Value Wrap vs. Russell 1000 Value Index Sector Exposure (%) Portfolio Index Top Ten Positions Portfolio Weights (%) Communications 3.5 4.5 Alexandria Real Estate Equities 3.0 Discretionary 4.7 4.7 Bank of America 2.5 Staples 4.
Slide 15: Performance
Performance As of June 30, 2024 ANNUALIZED RETURNS (%)1 15 10 5 0 -5 QTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception NFJ Large-Cap Value Wrap Composite (gross of fees) NFJ Large-Cap Value Wrap Composite (net of fees) Russell 1000 Value Index QTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Slide 16: Investing with NFJ
Investing with NFJ 1 2 3 A Three-Decade Strong Modern Value High Conviction / Value Foundation Investing Approach High Diversification History of identifying Proprietary tools and Quantitative methods to market mispricing methods to meet the eliminate emotional bias and trends through challeng
Slide 17: Appendix
Appendix 17
Slide 18: Does the Fed Funds Rate Lead or Follow the Market?
Does the Fed Funds Rate Lead or Follow the Market? While they track each other closely, the Federal Funds rate does not typically stay above the 2-Year Treasury for long Fed Funds Minus the 2-Year Treasury Yield: 1980 to Present Day Source: Bloomberg, NFJ Investment Group 18
Slide 19: Unprecedented Start for Momentum in 2024
Unprecedented Start for Momentum in 2024 Many investors that stayed on the sidelines in 2023 and subsequently missed out on the market rally have sought exposure in winners YTD… Bloomberg US Pure Momentum Portfolio Total Return – Quarterly Change January 2000 to March 2024 1Q24: Best momentum quarte
Slide 20: High Momentum Names Starting to Crack
High Momentum Names Starting to Crack After an unpresented move in early 2024, high momentum names have begun to lose steam… Goldman Sachs Momentum Index Returns by Year 2014-2024 50% July 40% YTD 2024 30% 20% 10% 0% -10% -20% 31-Dec 31-Jan 29-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul 31-Aug 30-Sep 31-
Slide 21: The Power of Dividends and Dividend Growth
The Power of Dividends and Dividend Growth Outpacing Inflation and Driving Returns The Power of Dividends The Power of Dividend Growth Dividends are always positive and have comprised a Dividend growth has outpaced inflation over time significant portion of investors’ total return over time S&P
Slide 22: NFJ Investment Team
NFJ Investment Team John R. Mowrey, CFA Paul A. Magnuson Chief Investment Officer Senior Portfolio Manager/Analyst Strategically organized Senior Portfolio Manager/Analyst Industry/Team Start Year: 1985/1992 and committed to seeking Industry/Team Start Year: 2007/2007 strong investment performance R
Slide 23: NFJ Team Biographies
NFJ Team Biographies John R. Mowrey, CFA R. Burns McKinney, CFA Executive Managing Director, Chief Investment Officer Managing Director, Senior Portfolio Manager/Analyst Senior Portfolio Manager/Analyst R. Burns McKinney is a managing director and a senior portfolio manager/analyst. He John Mowrey i
Slide 24: NFJ Team Biographies
NFJ Team Biographies Kris P. Marca, CFA Andrew J. Setaro, CFA, FDP Director, Portfolio Manager/Analyst Senior Research Analyst Kris Marca is a director and portfolio manager/research analyst. He serves as a Andrew Setaro is a senior research analyst, responsible for supporting the full suite of port
Slide 25: NFJ Large-Cap Value Wrap GIPS Composite Report
NFJ Large-Cap Value Wrap GIPS Composite Report Schedule of composite performance results as of December 31, 2022 Composite Composite Russell 1000 Composite Benchmark Number of Portfolios Composite Total Total Firm Internal Year Return Gross Return Net Value Index 3-Yr St. Dev. 3-Yr St. Dev. in the C
Slide 26: NFJ Large-Cap Value Wrap GIPS Composite Report
NFJ Large-Cap Value Wrap GIPS Composite Report The Firm: The firm is defined as NFJ Investment Group, contained herein. Index: The Russell 1000 Value Index measures the LLC (“NFJ”), a Registered Investment Advisor with the The Composite: The NFJ Large Cap Value Wrap performance of the 1,000 largest
Slide 27: Disclosures
Disclosures INVESTMENT RISKS Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war, terrorism, pandemic, or recession could impact the po
Slide 28: 4120 07-24 ©NFJ Investment Group, LLC
4120 07-24 ©NFJ Investment Group, LLC 28
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