Fund Evaluator:

Virtus KAR Small-Cap Value I Overview

Virtus KAR Small-Cap Value I (PXQSX) is an actively managed U.S. Equity Small Growth fund. Virtus launched the fund in 2006.

The investment seeks long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of its assets in common stocks of small market capitalization companies. It pursues long-term capital appreciation in the small market capitalization sector while seeking to incur less risk than the small capitalization value market. The fund invests in a select group of small market capitalization companies believed by the fund's subadviser to be undervalued relative to their future growth potential.

About Virtus KAR Small-Cap Value I (PXQSX)

There are 2 members of the management team with an average tenure of 17.88 years: Julie Kutasov (2008), Craig Stone (2009). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: FT Wilshire 5000 TR USD index with a weighting of 100% and Russell 2000 Value TR USD index with a weighting of 100%. Virtus KAR Small-Cap Value I has 30 securities in its portfolio. The top 10 holdings constitute 45.6% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

Virtus KAR Small-Cap Value I is part of the Equity global asset class and is within the U.S. Equity fund group. Virtus KAR Small-Cap Value I has 2.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 94.8%. There is 2.7% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Virtus KAR Small-Cap Value I has 2.5% of the portfolio in cash.

Assets Under Management

The fund has $446 million in total assets, which is above the $431 million average for the Small Growth category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

PXQSX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Virtus KAR Small-Cap Value I expense ratio is high compared to funds in the Small Growth category. Virtus KAR Small-Cap Value I has an expense ratio of 0.99%, which is 16% lower than its category average, making the fund expense ratio grade a B. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Virtus KAR Small-Cap Value I has a portfolio turnover rate of 12%, indicating that holds its assets around 0.1 years. By way of comparison, the average portfolio turnover is 78% for the Small Growth category.

Recently, in the month of July 2026, Virtus KAR Small-Cap Value I returned 0.2%, which earned it a grade of A, as the Small Growth category had an average return of -6.7%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

Virtus KAR Small-Cap Value I has a trailing yield of 0.45%, which is above the 0.06% category average. The fund normally distributes its income semi-annually and its capital gains semi-annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Virtus KAR Small-Cap Value I Grades

Year to date, the fund has returned 8.3%, 5.3 percentage points worse than the category, which translates into a grade of F. The fund has returned 4.9% over the past year (grade of F), 6.7% over the past three years (grade of F) and 1.4% per year over the past five years (grade of D) and 8.1% per year over the past 10 years (grade of F).

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