Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Pres Retire Sem 3076
41 slides from Virtus Investment Partners's investor presentation, August 2015
Slide 1: It's Not Your Parents' Retirement
IT’S NOT YOUR PARENTS’ RETIREMENT Planning for the “New Normal” Retirement
Slide 2: Today's Agenda
TODAY’S AGENDA I. Introduction – Baby Boomers Are Rewriting Retirement II. It’s Not Your Parents’ Retirement III. Investing for the “New Normal” Retirement – Investors Need Yield – Investors Need Help Navigating the Markets – Investors Need Better Global Reach 2 INTRODUCTION IT’S NOT YOUR PARENTS’ R
Slide 3: Virtus Organizational Overview
VIRTUS ORGANIZATIONAL OVERVIEW Virtus offers an array of distinctive capabilities from our investment partners. * * * * * * * * * * * * * * *Virtus Investment Partners retains an ownership interest in the firm. 3 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 4: Retirement 'Age Wave'
RETIREMENT “AGE WAVE” 100,000,000 • The number of Americans 65 and older has tripled over the last 80,000,000 century – to about 40 million, just Individuals Age 65 and Older over 12% of the population. 60,000,000 • Since 2011, 10,000 baby boomers turn “retirement age” daily – a trend that will cont
Slide 5: It's Not Your Parents' Retirement
IT’S NOT YOUR PARENTS’ RETIREMENT 5 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 6: Workers with Pension Coverage by Type of Plan
IT’S NOT YOUR PARENTS’ RETIREMENT WORKERS WITH PENSION COVERAGE BY TYPE OF PLAN 1983 2013 71% 62% 17% 12% Defined benefit only Defined contribution - 401(k) plans only Source: Center for Retirement Research , September 2014, based on U.S. Board of Governors of the Federal Reserve System, Survey of C
Slide 7: People Are Living Longer
PEOPLE ARE LIVING LONGER IF YOU LIVE TO AGE 65, THERE IS A HIGH PROBABILITY YOU’LL LIVE TO BE 80 88% Women Men 71% Couple* 60% 45% 31% 20% 80 Years 90 Years *Probability of one spouse living to specified age. Source: Society of Actuaries, “Key Findings and Issues, Longevity.” 2011 Risks and Process
Slide 8: Paying for Retirement
PAYING FOR RETIREMENT AVERAGE INCOME SOURCES (AGE 65+) 3% 12% Social Security Work/Earnings 39% Retirement Plans 19% Income from Assets Other 27% Source: EBRI (Employee Benefit Research Institute) Databook on Employee Benefits. Chapter 7. Data as of November 2011. 8 INTRODUCTION IT’S NOT YOUR PARENT
Slide 9: Delaying Social Security Means More Money Later
DELAYING SOCIAL SECURITY MEANS MORE MONEY LATER Monthly Benefit Annual Benefit Start Collecting Benefits Amount* Amount At Age 62 (Early) $1,743 $20,916 At Age 66 (Normal) $2,367 $28,404 At Age 70 (Late) $3,237 $38,844 Source: Benefit estimates based on data from ssa.gov, using the Social Security A
Slide 10: Delaying Social Security Means More Money Later: Break Even
DELAYING SOCIAL SECURITY MEANS MORE MONEY LATER WHEN WILL YOU BREAK EVEN? $1,000,000 Start benefits at age 62 (Early) $764,701 Cumulative Benefits $800,000 Start benefits at age 66 (Normal) $740,346 Start benefits at age 70 (Late) $600,000 $692.386 $400,000 $200,000 $0 62 63 64 65 66 67 68 69 70 71
Slide 11: Social Security Funding Is Under Pressure
SOCIAL SECURITY FUNDING IS UNDER PRESSURE NUMBER OF WORKERS PER BENEFICIARY IS SHRINKING 16.5 3.7 3.4 2.9 2.2 1950 1970 1990 2010 2030 (estimated) Source: Data from the Social Security Administration, 2013 Trustees Report. 2030 (e) based on intermediate assumptions. 11 INTRODUCTION IT’S NOT YOUR PAR
Slide 12: Inflation Hits Older Americans Harder
INFLATION HITS OLDER AMERICANS HARDER AVERAGE INFLATION BY SPENDING CATEGORY, 1982 – 2013 Spending Habits (Age 65+) 3% 5.3% 5.1% 5% 4.9% 6% 3% 13% 5% 1% 13% 2.9% 2.8% 2.6% 15% 37% 0.9% 0.9% Medical Care Food and Beverage Housing - Mortgage & Other* Transportation Education Entertainment Apparel Othe
Slide 13: Retirement Will Cost More Than You Think
RETIREMENT WILL COST MORE THAN YOU THINK INFLATION REDUCES PURCHASING POWER $120,000 $100,000 $80,000 $60,000 $60,346.47 $46,697.47 $40,000 2% Inflation $73,856.91 $36,039.67 $20,000 3% Inflation $63,325.12 4% Inflation $54,208.64 $0 65 70 75 80 85 90 Retirement Age Source: Virtus Investment Partner
Slide 14: Investing for the 'New Normal' Retirement
INVESTING FOR THE “NEW NORMAL” RETIREMENT 14 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 15: Investor Needs
INVESTOR NEEDS Yield Help Navigating the Markets Better Global Reach 15 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 16: Investors Are Stuck Between a Rock and a Hard Place
INVESTORS ARE STUCK BETWEEN A ROCK AND A HARD PLACE BONDS: Interest rates are near all-time lows, with nowhere to go but up. EQUITIES: Too much uncertainty and volatility. Investor experience is tainted. 16 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 17: Investor Needs: Yield
INVESTOR NEEDS Yield 17 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 18: Yield Sources in Fixed Income
YIELD SOURCES IN FIXED INCOME TREASURY YIELDS ARE NEAR 30 YEAR LOWS BUT DEMAND FOR YIELD BY INVESTORS HAS NOT DIMINISHED 18 16 3 Yr U.S. Treasury Yield 5 Yr U.S. Treasury Yield 14 10 Yr U.S. Treasury Yield 12 30 Yr U.S. Treasury Yield 10 8 6 4 2 0 6/30/15 1981 1982 1983 1984 1985 1986 1987 1988 1989
Slide 19: The Effect of Duration
THE EFFECT OF DURATION Duration enables an investor to more easily compare bonds with different maturities and coupon rates: with every percentage increase (decrease) in interest rates, a bond’s value will decrease (increase) by its modified duration,1 stated as a percentage. Modified Duration (in y
Slide 20: The Threat of Rising Interest Rates
THE THREAT OF RISING INTEREST RATES Impact on Price in Response Index Averages to Interest Rate Increase of: Barclays U.S. Maturity Yield to Duration Treasury Index Price (years) Maturity (years) 1% 2% 3% 7-10 Year $101.43 8.63 2.25% 7.87 -7.87% -15.74% -23.61% 10-20 Year $137.25 13.03 2.50% 9.84 -9
Slide 21: Diversify for Yield with a Multi-Sector Strategy
DIVERSIFY FOR YIELD WITH A MULTI-SECTOR STRATEGY 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 12.82 12.07 12.18 11.47 13.74 58.21 20.40 23.81 22.62 7.44 18.79 Asset-Backed Agency Debentures 12.73 7.02 11.85 9.01 8.34 44.87 15.12 9.81 15.81 6.15 6.08 Bank Loans 11.13 5.69 8.15 7.06 6.61 44.
Slide 22: Index Definitions
INDEX DEFINITIONS Asset-Backed represented by Barclays ABS 3-5 Year Index which has three subsectors: credit and charge cards, autos, and utilities; includes pass-through, bullet, and controlled amortization structures; and includes the senior class of each ABS issue and ERISA-eligible B and C tranc
Slide 23: Virtus Multi-Sector Short Term Bond Fund: Sector Allocations
VIRTUS MULTI-SECTOR SHORT TERM BOND FUND SECTOR ALLOCATIONS – January 1999 – June 2015 100 Yankee - High Quality 90 Treasuries 80 Taxable Municipals Non-Dollar 70 Non-Agency Residential MBS 60 Non-Agency Commercial MBS Municipals 50 % Emerging Mkts - High Yield 40 Corporate - High Yield 30 Corporate
Slide 24: Virtus Multi-Sector Short Term Bond Fund
VIRTUS MULTI-SECTOR SHORT TERM BOND FUND NAV Range Total NAV Range Total } High Low Return High Low Return 1993 4.93 4.81 8.95% 2004 4.89 4.67 4.81 17 rate 1994 4.92 4.51 -1.86 2005 4.84 4.68 1.36 hikes 1995 4.78 4.45 13.64 over 3 2006 4.77 4.62 5.52 years 1996 4.98 4.74 11.30 2007 4.77 4.63 3.15 19
Slide 25: Virtus Multi-Sector Short Term Bond Fund Performance
VIRTUS MULTI-SECTOR SHORT TERM BOND FUND PERFORMANCE AS OF 6/30/15 Since 1 3 5 10 Inception QTD YTD Year Years Years Years 07/06/92 NARAX (at NAV) 0.27% 1.43% -0.34% 2.98% 4.47% 4.73% 5.72% NARAX (at POP) -1.99 -0.85 -2.58 2.20 3.99 4.49 5.61 Index1 0.14 1.00 0.95 2.21 2.68 3.78 5.07 *Benchmark sinc
Slide 26: Investor Needs: Help Navigating the Markets
INVESTOR NEEDS Help Navigating the Markets 26 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 27: The Myth of the 10% Return
THE MYTH OF THE 10% RETURN GROWTH OF $10,000 IN THE S&P 500 ® INDEX FROM 12/31/48 – 12/31/14 $10,000,000 $12,956,649 $1,000,000 $100,000 $10,000 Source: Standard & Poor’s and Virtus Performance & Analytics. The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest
Slide 28: What Do 'Average' Returns Look Like?
WHAT DO “AVERAGE” RETURNS LOOK LIKE? S&P 500 ® INDEX YEAR-BY-YEAR TOTAL RETURNS (%) FROM 1926 TO 2014 2014 13.69 2012 15.74 2010 15.02 2006 15.65 2004 10.78 1993 10.04 2009 26.94 2013 32.22 2011 1.91 1988 16.32 2003 28.55 1997 33.31 2000 -9.08 2007 5.37 1986 18.57 1999 21.02 1995 37.45 1990 -3.25 20
Slide 29: The Arithmetic of Loss
THE ARITHMETIC OF LOSS LOSSES HAVE A NEGATIVE COMPOUNDING EFFECT ON WEALTH—AND THE COMPOUNDING INCREASES THE GREATER THE LOSS. Past performance is not indicative of future results. The chart is a mathematical example. It is for illustrative purposes only and is not indicative of the performance of t
Slide 30: A Lesson in Market Eras
A LESSON IN MARKET ERAS Market Era 1: 1/3/49 – 12/31/66 Market Era 2: 1/3/67 – 12/31/81 $1,500 $350 S&P 500® cumulative returns (in %) S&P 500® cumulative returns (in %) BEST WORST $300 BEST WORST $1,150 $1,173 $280 12 months 52.6 -14.9 12 months 41.8 -38.9 36 months 133.8 3.1 $250 36 months 78.1 -2
Slide 31: Virtus Equity Trend Fund
VIRTUS EQUITY TREND FUND THE VIRTUS EQUITY TREND FUND STRIVES TO PARTICIPATE IN RISING MARKETS WHILE PLACING AN EMPHASIS ON PRESERVING CAPITAL DURING MAJOR MARKET DECLINES. Dorsey, Wright & Associates (DWA) employs its RANK proprietary Relative Strength price momentum model to rank and select mark
Slide 32: Virtus Equity Trend Fund: Cornerstone Process
VIRTUS EQUITY TREND FUND CORNERSTONE PROCESS 32 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 33: Virtus Equity Trend Fund Performance
VIRTUS EQUITY TREND FUND PERFORMANCE AS OF 6/30/15 Since 1 3 5 10 Inception QTD YTD Year Years Years Years 07/01/10 VAPAX (at NAV) -1.62% -5.42% -9.76% 8.80% n/a n/a 10.90% VAPAX (at POP) -7.28 -10.85 -14.95 6.67 n/a n/a 9.60 Index1 0.28 1.23 7.42 17.31 n/a n/a 17.42 Class A operating expenses are 1
Slide 34: Investor Needs: Better Global Reach
INVESTOR NEEDS Better Global Reach 34 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMENT RETIREMENT “NEW NORMAL”
Slide 35: Opportunities Outside the U.S. Are Growing
OPPORTUNITIES OUTSIDE THE U.S. ARE GROWING International Companies Represent 74% of “Global 500” Corporations are Foreign Two-Thirds of the World’s Market Cap 2 Middle East 3 Mexico 8 Russia 372 8 India 8 Australia 10 South America 10 Canada 28 Other Asia 36% 57 Japan 95 China 64% 128 143 European U
Slide 36: Virtus Foreign Opportunities Fund: Investment Principles
VIRTUS FOREIGN OPPORTUNITIES FUND INVESTMENT PRINCIPLES Invest with absolute mindset Capital growth and capital preservation Concentrate on business analysis (bottom-up approach) Long-term focus Sensible valuations Independent of the Index 36 INTRODUCTION IT’S NOT YOUR PARENTS’ RETIREMEN
Slide 37: Examples of High Quality International Companies
EXAMPLES OF HIGH QUALITY INTERNATIONAL COMPANIES SABMiller Novo Nordisk A/S Unilever N.V. Nestlé S.A. HDFC Bank The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the se
Slide 38: Virtus Foreign Opportunities Fund Performance
VIRTUS FOREIGN OPPORTUNITIES FUND PERFORMANCE AS OF 6/30/15 Since 1 3 5 10 Inception QTD YTD Year Years Years Years 07/06/90 JVIAX (at NAV) 0.34% 2.40% -2.98% 7.32% 9.17% 6.43% 7.05% JVIAX (at POP) -5.43 -3.48 -8.56 5.22 7.89 5.80 6.79 Index1 0.62 5.52 -4.23 11.97 9.54 5.12 5.03 *Benchmark since inc
Slide 39: Time to Take Action
TIME TO TAKE ACTION It’s Not Your Parents’ Retirement – Individuals are living longer – 20-30 years in retirement – Traditional income sources like pensions and social security may not be enough “New Normal” Retirement – It’s Now Up to You – Goal: Income to cover expenses, keep up with inflation
Slide 40: Fund Share Classes, Symbols and CUSIPs
IT’S NOT YOUR PARENTS’ RETIREMENT Virtus Multi-Sector Short Term Bond Fund Share Class Symbol CUSIP A NARAX 92828R644 C PSTCX 92828R628 I PIMSX 92828R610 T PMSTX 92828R594 Virtus Equity Trend Fund Share Class Symbol CUSIP A VAPAX 92828R255 C VAPCX 92828R248 I VAPIX 92828R230 Virtus Foreign Opportuni
Slide 41: Investors should carefully consider the investment objectives, risks, charges and expenses
Investors should carefully consider the investment objectives, risks, charges and expenses of any Virtus Mutual Fund before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 1-800- 243-4361 or visit