Virtus KAR Small-Mid Cap Growth Fund underperforms significantly in Q4 2025. The fund declined 7.67% for Class I shares, trailing the Russell 2500 Growth Index by over 800 basis points as the benchmark gained 0.33%. This substantial underperformance highlights the challenges facing actively managed small-mid cap growth strategies in the current market environment. The fund's struggle comes amid broader volatility in the growth equity space, where investors have increasingly rotated toward value and large-cap positions. Portfolio managers face mounting pressure to justify fees when passive alternatives deliver superior returns. Investors holding the fund should evaluate whether the active management approach aligns with their performance expectations and risk tolerance going forward.
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