Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — virtus convertible fund pres 3474
25 slides from Virtus Investment Partners's investor presentation, Mar 31, 2022
Slide 1: Virtus Convertible Fund
VIRTUS CONVERTIBLE FUND* March 31, 2022 Virtus Convertible Fund (Institutional): Best Fund over 5 years among Convertible Securities Funds *Effective June 10, 2022, this Fund's name has changed. Effective July 25, 2022, this Fund's manager has changed. As of July 2022, Voya Investment Management (Vo
Slide 2: Important Risk Considerations
IMPORTANT RISK CONSIDERATIONS 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 3: Virtus Investment Partners Multi-Asset Manager
VIRTUS INVESTMENT PARTNERS MULTI-ASSET MANAGER KEY FACTS AFFILIATED $154.8 Billion in AUM1 3 3 3 30 Funds Rated 4 or 5 Stars2 UNAFFILIATED 4 Past performance is not indicative of future results. As of 3/31/23. 1Excludes AUM of AlphaSimplex, which the company acquired on April 1, 2023. 2Based on inst
Slide 4: Income and Growth Platform
INCOME AND GROWTH PLATFORM ASSETS UNDER MANAGEMENT INCOME AND GROWTH TEAM STRATEGIES: $59.7 BILLION Convertibles $4.1 High Yield $1.6 Short Duration High-yield High Income Bonds $4.3 Other $0.6 Income and Growth $49.1 Equities Convertible Securities Stated assets under management may include both di
Slide 5: U.S. Income & Growth Strategies Team
U.S. INCOME & GROWTH STRATEGIES TEAM The senior members on the investment team have on average over twenty years of firm experience and have on average twenty-five years of industry experience. Justin Kass, CFA (23/25) William (Brit) Stickney (24/34) CIO/Portfolio Management/Research/Trading Portfol
Slide 6: 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 7: 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 8: Why Invest in Convertible Bonds?
WHY INVEST IN CONVERTIBLE BONDS? U.S. convertible bond market ICE BofA US Convertible Index S&P 500 Index May provide investors with upside participation of equities 6.4 5.1 May provide investors income and downside Avg. Quarterly Return (%) risk mitigation of bonds ICE BofA U.S. S&P 500® Conver
Slide 9: U.S. Income and Growth Team
U.S. INCOME AND GROWTH 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 Consistent application of Seasoned t
Slide 10: Investment Philosophy and Process
U.S. INCOME AND GROWTH TEAM INVESTMENT PHILOSOPHY AND PROCESS Investing in companies poised to benefit from positive fundamental change Proprietary Idea Company Relative Value Upgrade Alert Generation Summary and Trading Model The diagram and statements above reflect the typical investment process a
Slide 11: Idea Generation
U.S. INCOME AND GROWTH TEAM IDEA GENERATION Voya IM’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 12: Company Summary
U.S. INCOME AND GROWTH TEAM COMPANY SUMMARY 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 expenditure
Slide 13: Upgrade Alert Model: Financial Statements
UPGRADE ALERT MODEL FINANCIAL STATEMENTS Published rating: B3/B+ Years ended December 31 Projections: Base case Financial statements 2021 2022 2023 2024 2025 2026 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 Operating income 43 81 95 124 1
Slide 14: Upgrade Alert Model: Operating Statistics
UPGRADE ALERT MODEL OPERATING STATISTICS Operating statistics reviewed Published rating: B3/B+ Years ended December 31 Projections: Base case Objective internal credit Financial statements 2021 2022 2023 2024 2025 2026 Liquidity rating created Current ratio 1.7 1.6 2.5 2.6 2.7 2.8 Days receivabl
Slide 15: Asymmetric Risk/Reward Profile
ASYMMETRIC RISK/REWARD PROFILE Convertible bonds have delivered equity-like returns with less volatility than stocks 12 S&P 500® Index 10 Russell 2000® Index ICE BofA U.S. Convertible Index 8 Return (% Annualized) 6 4 2 0 0 5 10 15 20 25 Risk (% Annualized) Past performance is not indicative of futu
Slide 16: Correlations
CORRELATIONS Convertibles have had lower correlations to core fixed income 0.87 U.S. Small Stocks 0.64 0.86 U.S. Large Stocks 0.64 0.71 Non-U.S. Stocks 0.60 0.13 U.S. Gov't. / Credit Bond 0.24 -0.12 10-Year Treasuries -0.07 U.S. Convertibles U.S. High Yield Bonds Past performance is not indicative o
Slide 17: Universe Size
UNIVERSE SIZE Billions ($) 351 341 313 293 289 282 263 238 239 232 218 221 212 211 208 212 194 186 188 186 177 178 166 171 155 128 120 104 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 2022 2023 As of March 31, 2023.
Slide 18: Convertibles Universe Size and New Issuance
CONVERTIBLES UNIVERSE SIZE AND NEW ISSUANCE FOR 2023, MARKET STRATEGISTS ARE PROJECTING NEW ISSUANCE OF $45-50 BILLION 140 400 351 341 350 120 106 Universe size 300 100 238 239 New Issuance ($, billions) Universe Size ($, billions) 84 250 80 211 208 212 188 186 200 178 171 60 New issuance 53 51 150
Slide 19: 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 20: Characteristics and Exposures
CHARACTERISTICS AND EXPOSURES VIRTUS CONVERTIBLE FUND Characteristics Fund Benchmark Top Ten Holdings % of Fund Top Sectors % of Fund Holdings 126 485 Dexcom, Inc. 2.88 Technology 23.37% Delta 0.48 0.41 Wells Fargo & Company 2.54 Healthcare 20.65% Conversion Premium 38.15% 52.55% Zillow Group, Inc.
Slide 21: Performance Review
PERFORMANCE REVIEW AS OF MARCH 31, 2023 ANNPX MORNINGSTAR RATINGSTM Convertibles Index INST Share Category Time Period # of Stars # of Funds 15.73% 14.93% 10.52% 11.45% 10.22% Overall ★★★★★ 76 9.61% 9.57% 8.51% 3 Year 76 2.76% 2.76% 3.75% ★★★★ 3.75% 5 Year ★★★★★ 71 10 Year ★★★★★ 57 Morningstar ratin
Slide 22: 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 -2.6 -2.7 -3.8 237 Up Months 122 Down Months ICE BofA U.S. Convertible Index ANNPX S&P 500® Index Annualized return 8.56% 10.46%
Slide 23: Performance: Growth of $10,000
$0 $100,000 $150,000 $200,000 $250,000 $300,000 $50,000 4/19/1993 10/31/1993 5/31/1994 12/31/1994 7/31/1995 GROWTH OF $10,000 2/29/1996 9/30/1996 4/30/1997 11/30/1997 PERFORMANCE 6/30/1998 1/31/1999 8/31/1999 3/31/2000 10/31/2000 5/31/2001 Past performance is not indicative of future results. 12/31/
Slide 24: 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 25: 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