Summary

• The Virtus Ceredex Mid-Cap Value Equity Fund gained +9.20% (Class I) for the quarter, compared to the Russell Midcap® Value Index's return of +3.68%.
• Ceredex Value Advisors maintained exposure to Western Digital given continued strength in the underlying memory market, which appears unlikely to be resolved in the near term.
• Corning outperformed, driven by strong demand for its optical fiber solutions supporting data center buildouts and AI infrastructure expansion.
• Ceredex Value Advisors sold Apollo Global Management amid concerns around its exposure to software investments perceived as vulnerable to AI-driven disintermediation.
• Ceredex Value Advisors bought nuclear components and fuel supplier BWX Technologies, which the subadviser believes may benefit from increased spending to support a renewed interest in nuclear power generation.

Market Review

Mid-cap value stocks experienced a strong start to the first quarter, continuing to benefit from a broadening of market leadership beyond mega-cap technology and AI-driven names. Investors rotated into more attractively valued cyclical sectors, where improving