Fund Evaluator:

Virtus KAR Emerging Markets Small-Cap R6 Overview

Virtus KAR Emerging Markets Small-Cap R6 (VRESX) is an actively managed International Equity Diversified Emerging Mkts fund. Virtus launched the fund in 2019.

The investment seeks capital appreciation. Under normal circumstances, the fund invests at least 80% of its assets in equity or equity-linked securities of small capitalization companies located in emerging markets countries. The fund's subadviser considers small-capitalization companies to be those companies that, at the time of initial purchase, have market capitalizations of less than $8 billion. Emerging markets countries generally include every nation in the world except the U.S., Canada, Japan, Australia, New Zealand and most nations located in Western Europe.

About Virtus KAR Emerging Markets Small-Cap R6 (VRESX)

There are 2 members of the management team with an average tenure of 4.83 years: Hyung Kim (2017), Sean Pompa (2026). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: MSCI EM NR USD index with a weighting of 100% and MSCI EM Small NR USD index with a weighting of 100%. Virtus KAR Emerging Markets Small-Cap R6 has 54 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 Emerging Markets Small-Cap R6 is part of the Equity global asset class and is within the International Equity fund group. Virtus KAR Emerging Markets Small-Cap R6 has 87.1% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 1.5%. There is 87.1% 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 Emerging Markets Small-Cap R6 has 11.4% of the portfolio in cash.

Assets Under Management

The fund has $2 million in total assets, which is below the $1 billion average for the Diversified Emerging Mkts 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.

VRESX 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 Emerging Markets Small-Cap R6 expense ratio is high compared to funds in the Diversified Emerging Mkts category. Virtus KAR Emerging Markets Small-Cap R6 has an expense ratio of 1.30%, which is 12% higher than its category average, making the fund expense ratio grade a D. 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 Emerging Markets Small-Cap R6 has a portfolio turnover rate of 34%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 68% for the Diversified Emerging Mkts category.

Recently, in the month of June 2026, Virtus KAR Emerging Markets Small-Cap R6 returned -1.2%, which earned it a grade of D, as the Diversified Emerging Mkts category had an average return of 0.2%. 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 Emerging Markets Small-Cap R6 has a trailing yield of 2.88%, which is above the 1.58% category average. The fund normally distributes its income 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 Emerging Markets Small-Cap R6 Grades

Year to date, the fund has returned 1.6%, 24.1 percentage points worse than the category, which translates into a grade of F. The fund has returned -0.8% over the past year (grade of F), 9.9% over the past three years (grade of F) and 1.0% per year over the past five years (grade of F) and 9.2% per year over the past 10 years (grade of D).

For more mutual fund grades, analysis and screening tools to help your investment discovery, join AAII for a $2, full-access trial. Learn more here: https://invest.aaii.com/membership.

Otherwise, for more information about Virtus KAR Emerging Markets Small-Cap R6, including its riskiness, submit your email to unlock the rest of the article.