VIRTUS ALLIANZGI INCOME & GROWTH FUND* - June 30, 2021 *Effective February 1, 2021, this Fund's name and investment adviser have changed. The ...
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VIRTUS ALLIANZGI INCOME & GROWTH FUND* June 30, 2021 *Effective February 1, 2021, this Fund’s name and investment adviser have changed. The Fund’s distributor is now VP Distributors, LLC.
IMPORTANT RISK CONSIDERATIONS
Market Volatility Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other
public health issues, recessions, or other events could have a significant impact on the portfolio and its
investments, including hampering the ability of the portfolio manager(s) to invest the portfolio's assets
as intended.
Issuer Risk The portfolio will be affected by factors specific to the issuers of securities and other instruments in
which the portfolio invests, including actual or perceived changes in the financial condition or business
prospects of such issuers.
High Yield Fixed Income There is a greater risk of issuer default, less liquidity, and increased price volatility related to high yield
Securities securities than investment grade securities.
Equity Securities The market price of equity securities may be adversely affected by financial market, industry, or
issuer-specific events. Focus on a particular style or on small or medium-sized companies may
enhance that risk.
Unrated Fixed Income If the quality of an unrated fixed income security is not accurately assessed, the portfolio may invest in a
Securities security with greater risk than intended.
Debt Instruments Debt instruments are subject to greater levels of credit and liquidity risk, may be speculative and may
decline in value due to changes in interest rates or an issuer's or counterparty's deterioration or default.
Derivatives Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or
cause a loss greater than the principal investment.
Convertible Securities A convertible security may be called for redemption at a time and price unfavorable to the portfolio.
Prospectus For additional information on risks, please see the fund's prospectus.
2VIRTUS INVESTMENT PARTNERS
MULTI-BOUTIQUE, MULTI-STRATEGY MODEL
Key Facts:
Virtus affiliates3 Select external
subadvisers
$178.6
Billion in
AUM1
AFFILIATE
9 SHARED SUPPORT
Affiliates OPERATIONS AND IT
HUMAN RESOURCES
FUND SERVICES
+ 7 Select
LEGAL AND COMPLIANCE
Subadvisers
FINANCE
PRODUCT MANAGEMENT
DISTRIBUTION AND MARKETING
34
Funds Rated
4 or 5 Stars2
3
Past performance is not indicative of future results.
1As of 6/30/21. 2The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 10-year (if applicable) Morningstar metrics.
Analysis includes rated retail mutual funds only (funds with at least three years of history). Funds with A and I or Institutional shares use I or Institutional shares for Ratings otherwise,
A share is used. Please see page 23 for additional Morningstar disclosure. Strong ratings are not indicative of positive performance. 3Virtus has an ownership interest in the firm.
3ALLIANZ GLOBAL INVESTORS
ACTIVE IS
At a Glance
Founded in 1998
A wholly owned subsidiary of Allianz SE
AUM of €598 billion*
690 investment professionals across the globe
Established expertise in equities, fixed-income, multi-asset, and alternative investments.
*AUM as of March 31, 2021. Source: Allianz Global Investors US LLC
4VIRTUS ALLIANZGI INCOME & GROWTH FUND
The fund aims to provide:
High monthly income
Long-term capital growth
Asymmetric return profile
U.S. Convertible Bonds U.S. Equities with
Current Income, downside Covered Calls
U.S. U.S. Equities
protection, principal growth, Convertibles with Covered Dividend income, principal
investment grade exposure Calls growth, option premium
U.S. High Yield Bonds
U.S. High Yield Bonds
High coupon, low volatility
Past performance is not indicative of future results.
This is for guidance only and not indicative of future allocation. Source: Allianz Global Investors US LLC
5ASYMMETRIC RISK / REWARD PROFILE
Convertibles and high yield bonds have delivered equity-like returns with less volatility than stocks
12 S&P 500
Russell 2000 Index
10 ICE BofA U.S. Convertible
Index
8
ICE BofA U.S. High
Return (% Annualized)
Yield Index
6
4
2
0
0 2 4 6 8 10 12 14 16 18 20
Risk (% Annualized)
Past performance is not indicative of future results.
The performance of the indexes are not indicative of the past or future performance of any Virtus product. Source: Allianz Global Investors US LLC using ICE Data Services; FactSet.
January 1988 to June 2021. Indexes are defined on page 24.
6CORRELATIONS
Convertibles and high yield bonds have lower correlations to core fixed income
0.87
U.S. Small Stocks
0.64
0.86
U.S. Large Stocks
0.64
0.71
Non-U.S. Stocks
0.60
0.13
U.S. Gov't. / Credit Bond
0.24
-0.12 U.S. Convertibles
10-Year Treasuries
-0.07 U.S. High Yield Bonds
Data as of January 1988 to June 2021.
Source: Allianz Global Investors US LLC using Barclays; ICE Data Services; FactSet.
Chart covers longest historical time period for which data for each relevant index is available. Diversification does not guarantee a profit or protect against a loss. U.S. Large Stocks
represent Russell 1000 Index; U.S. Small Stocks represent Russell 2000 Index; 10-Year Treasuries represent ICE BofA Current U.S. Treasury 10 Year Index; Non-U.S. Stocks
represents MSCI EAFE Index; U.S. Gov't./Credit Bond represents Bloomberg Barclays U.S. Government Credit Bond Index. Indexes are defined on page 24.
7ASYMMETRIC RISK / REWARD PROFILE
Convertibles and high yield bonds have delivered equity-like returns with less volatility than stocks
FALLING INTEREST RATES RISING INTEREST RATES
3.0 3.0 3.0
2.7
2.4 2.5
Avg. Quarterly Return (%)
1.2
-1.3
100 Up Quarters 34 Down Quarters
S&P 500 Index ICE BofA U.S. Convertible Index ICE BofA U.S. High Yield Master II Index BBG Barclays U.S. Government Credit Bond Index
Past performance is not a reliable indicator of future results.
This chart is not indicative of the past or future performance of any Virtus product. Note: Fixed income up and down quarters are based on quarterly performance of the BBG
Barclays US Government Credit Bond Index. Data as of January 1988 to June 2021. Source: Allianz Global Investors US LLC using FactSet; ICE Data Services. Indexes are
defined on page 24.
8ROLLING 3-YEAR RETURNS
INSTITUTIONAL SHARE CLASS
Since inception, the Fund has delivered positive returns over all rolling 36-month periods
30
25
36-month Performance (Annualized, %)
20
15
10
5
0
May-10
May-11
May-12
May-13
May-14
May-15
May-16
May-17
May-18
May-19
May-20
May-21
Feb-10
Feb-11
Feb-12
Feb-13
Feb-14
Feb-15
Feb-16
Feb-17
Feb-18
Feb-19
Feb-20
Feb-21
Aug-10
Nov-10
Aug-11
Nov-11
Aug-12
Nov-12
Aug-13
Nov-13
Aug-14
Nov-14
Aug-15
Nov-15
Aug-16
Nov-16
Aug-17
Nov-17
Aug-18
Nov-18
Aug-19
Nov-19
Aug-20
Nov-20
Past performance is not indicative of future results.
Source: Allianz Global Investors US LLC, Morningstar, bid-to-bid, dividends reinvested in USD as of June 30, 2021. Share class inception: February 28, 2007.
9FUND DISTRIBUTION HISTORY
DISTRIBUTION PAYOUT POLICY IS REVIEWED SEMI-ANNUALLY
Virtus AllianzGI Income and Growth Fund A Share (AZNAX)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
January $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
February $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
March $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
April $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700 $0.0700
May $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700 $0.0700
June $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700 $0.0700
July $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700
August $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700
September $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0700 $0.0700
October $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
November $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
December $0.4712* $0.0821 $0.1136* $0.1125* $0.0875 $0.0875 $0.0875 $0.0875 $0.0825 $0.0775 $0.0775 $0.0700 $0.0700
Past performance is not indicative of future results.
As of June 30, 2021
*Aggregate of monthly and special distributions. Past distributions included ordinary income, net capital gains and/or return of capital (an investment in the fund). Because the
distribution rate may include a return of capital, it should not be confused with yield or income. Source: Allianz Global Investors US LLC. Inception date: February 28, 2007.
10VIRTUS ALLIANZGI INCOME & GROWTH FUND
Seven Sources of Income:
1. High yield bond coupons
2. Convertible bond coupons
3. Equity dividends
4. Gains from the equity sleeve U.S. Convertibles
U.S. Equities with
Covered Calls
5. Gains from the convertible sleeve
6. Gains from the high yield sleeve
7. Covered call option premiums
U.S. High Yield Bonds
Portfolio Construction:
Static allocation
Optimal investment opportunity
Past performance is not indicative of future results.
This is for guidance only and not indicative of future allocation. Source: Allianz Global Investors US LLC.
11ALLIANZGI U.S. INCOME AND GROWTH TEAM
Seasoned investment Consistent application of investment philosophy applied over
management team multiple market cycles
Proven, bottom-up, Rigorous and in-depth financial analysis combined with direct
fundamental process access to top analysts and management teams
Developed, diverse universe Robust investable universe comprised of high yield bonds,
convertible securities, and equities
Attractive income solution Strategy focused on creating consistent cash flow and aiming to
and total return profile deliver upside participation and downside management
12ALLIANZGI U.S. INCOME AND GROWTH TEAM
Allianz Global Investors’ highly credentialed investment team has extensive industry experience
and utilizes the firm’s Global Research Platform
Douglas G. Forsyth, CFA
Portfolio Management/Research/Trading
29 Years Industry Experience, 26 Years at AGI
PORTFOLIO MANAGEMENT/RESEARCH/TRADING
William (Brit) Stickney Justin Kass, CFA Michael Yee David Oberto
32 Years Industry Experience 23 Years Industry Experience 27 Years Industry Experience 18 Years Industry Experience
21 Years at AGI 21 Years at AGI 26 Years at AGI 14 Years at AGI
RESEARCH/TRADING
Joanna Willars Christopher Jackson Ethan Turner, CFA Matthew John
21 Years Industry Experience 7 Years Industry Experience 16 Years Industry Experience 18 Years Industry Experience
15 Years at AGI 7 Years at AGI 9 Years at AGI 15 Years at AGI
Nicole Larrabee Rodrigues Paul Marcian, CFA Kris Metzger Peter Busk
25 Years Industry Experience 11 Years Industry Experience 11 Years Industry Experience 8 Years Industry Experience
20 Years at AGI 3 Years at AGI 3 Years at AGIALLIANZ GLOBAL INVESTORS
INVESTMENT PHILOSOPHY AND PROCESS
Investing in companies poised to benefit from positive fundamental change
Company Proprietary Monitoring
Idea Relative Value
Summary Upgrade Alert and Risk
Generation and Trading
Sheet Model Management
The diagram and statements above reflect the typical investment process applied to the fund. At any given time other criteria may affect the investment process. The diagram and
statements shown above are provided for illustrative purposes only.
14U.S. EQUITY EARNINGS AND PERFORMANCE
250 5000
S&P 500 Operating Earnings
225 S&P 500 Price Value ? 4500
200 4000
12-months Earnings per-Share ($)
175 3500
150 3000
Price Value ($)
125 2500
100 2000
75 1500
50 1000
25 500
0 0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Note: 12-month operating earnings per share, estimates are bottom up. Projections are based on assumptions with respect to future events. The actual future events may differ from
the assumptions. As of June 30, 2021. Source: Allianz Global Investors US LLC using FactSet, S&P Dow Jones Indices.
15COVERED CALL SELLING
TACTICALLY USING OPTIONS
Allianz Global Investors
Income and Growth
Characteristics Other Common Approaches Team's Approach Enhancement of
income potential
Management style Volatility/Catalyst driven Long, Fundamental
Opportunity to
Instruments Puts, Calls, Combinations Calls
participate as
equity rises
Application Passive Active
Reduction of
Call away Increased risk potential Minimal assignment
volatility
Exchange Over-the-Counter (OTC) Listed
Type Index Stock specific
Notional 100% notional 70% notional
Maturity Long Term - 3 month, LEAPs1 Front month
Moneyness At-the-Money, In-the-Money (ATM, ITM) Out-of-the-Money (OTM)
1LEAP: Long-Term Equity Anticipation Securities
A covered call option strategy may cause the portfolio to forego any appreciation in the stock price above the option strike price. Also, the option strategy could cause the portfolio to
recognize larger amounts of net short term capital gains, which are taxable at the higher ordinary income tax rates.
16WHAT IS A CONVERTIBLE BOND?
Convertibles offer investors the advantages of both stocks and bonds
Equity
Straight Bond + Warrant = Convertible Bond
Advantage of Bonds Advantage of Stocks
Objective: Objective:
Downside protection/claim to principal Principal growth
Interest income Unlimited upside participation
Hypothetical example—not representative of any specific convertible. Convertibles involve the risk factors of both stocks and bonds. They fluctuate in value with the price changes of
the underlying stock. If interest rates on the bonds rise, the value of the corresponding convertible will fall. Funds that invest in convertibles may have to convert the securities before
they would otherwise, which may have an adverse effect on the portfolio’s ability to achieve its investment objective. Source: Allianz Global Investors US LLC
17BEHAVIOR OF A CONVERTIBLE BOND
PARTICIPATION POTENTIAL, VOLATILITY CUSHIONING
Total
Yield/Busted Return Equity Like
Convertible Bond Value
Upside potential of
CONVERTIBLES
underlying equity
Designed for
downside risk Bond Floor
mitigation from
the bond
Stock Price
Downside Risk Mitigation Upside Participation
Convertibles can provide an asymmetric risk/return with accelerating upside
participation and decelerating downside risk.
Hypothetical example—not representative of any specific convertible. Convertibles involve the risk factors of both stocks and bonds. They fluctuate in value with the price changes of
the underlying stock. If interest rates on the bonds rise, the value of the corresponding convertible will fall. Funds that invest in convertibles may have to convert the securities before
they would otherwise, which may have an adverse effect on the portfolio’s ability to achieve its investment objective.
18WHY INVEST IN CONVERTIBLE BONDS?
U.S. convertible bond market
May provide investors with upside participation
ICE BofA U.S. Convertible Index
S&P 500 Index
of equities
6.4 May provide investors income and risk
5.3
mitigation of bonds
Avg. Quarterly Return (%)
ICE BofA U.S. S&P 500®
Convertible Index Index
Annualized return 10.95% 11.31%
Annualized volatility 11.71% 14.45%
-4.9
-7.3
101 Up Quarters 33 Down Quarters
Past performance is not indicative of future results. Volatility is represented by standard deviation. Indexes are defined on page 24.
January 1988 to June 2021. Source: Allianz Global Investors US LLC using FactSet, ICE Data Services, Morningstar.
19HIGH YIELD SPREADS AND THE
TREASURY YIELD CURVE
80 2000
High Yield Performance U.S. High Yield Debt Spreads
1600
High Yield Spreads (basis Points)
60
1200
Performance (%)
40 800
400
20
0
0 -400
-800
-20
-1200
-40 -1600
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Yield Curve (10-Year less 3-Month Treasury)
500
Yield Curve (basis points)
400
300
200
100
0
-100
-200
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Past performance is not indicative of future results.
Note: High Yield performance is measured using ICE BofA US High Yield Index. High yield spreads are equal to the option-adjusted spread of the ICE BofA US High Yield Index. Yield
curve is 10-Year Treasury Bond less 3-Month Treasury Bill.
As of June 30, 2021. Source: Allianz Global Investors US LLC using ICE Data Services.
20HIGH YIELD
DEFAULT RATE
80 16
BB
B
70 14
CCC
All Speculative Grade Issuers,
60 trailing 12-months 12
All Issuers (Percent %)
BB, B, CCC (Percent %)
50 10
40 8
30 6
20 4
10 2
0 0
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Past performance is not indicative of future results.
As of June 30, 2021. Source: Allianz Global Investors US LLC using ICE Data Services, JP Morgan.
21TOP ISSUES/OPTION POSITIONS
VIRTUS ALLIANZGI INCOME & GROWTH FUND
Issuer % of Fund
Alphabet Inc. Class A 1.8
Facebook Inc. Class A 1.8
Microsoft Corporation 1.7
Apple Inc. 1.5
Amazon.com, Inc. 1.5
Tesla Inc. 0.9
Visa Inc. Class A 0.8
Home Depot Inc. 0.8
NVIDIA Corporation 0.8
Mastercard Incorporated Class A 0.7
As of June 30, 2021. Holdings are subject to change. Source: Virtus Performance and Analytics.
22PERFORMANCE REVIEW
AS OF JUNE 30, 2021
AZNIX S&P 500 Index Bloomberg Barclays U.S. Aggregate Bond Index MORNINGSTAR RATINGSTM
INST Share Allocation--
40.79%
30% to 50%
Equity
30.62%
Category
18.67%
17.65%
14.84%
Time Period # of Stars # of Funds
14.04%
15.25%
13.28%
10.35%
9.64%
8.73%
Overall ★★★★★ 480
7.20%
8.55%
5.81%
5.34%
4.16%
3.39%
3.03%
1.83%
3 Year ★★★★★ 480
5 Year ★★★★★ 430
10 Year ★★★★★ 272
-0.33%
-1.60%
Morningstar ratings are based on risk-adjusted returns.
Strong ratings are not indicative of positive fund performance.
The Morningstar RatingTM for funds, or “star rating”, is calculated for
QTD YTD 1 Year 3 Year 5 Year 10 Year Since managed products (including mutual funds, variable annuity and
Inception* variable life subaccounts, exchange-traded funds, closed-end funds,
and separate accounts) with at least a three-year history. Exchange-
*Inception: Class I: 2/28/07. traded funds and open-ended mutual funds are considered a single
population for comparative purposes. It is calculated based on a
Performance data quoted represents past performance. Past performance does not Morningstar Risk-Adjusted Return measure that accounts for variation in
guarantee future results. Investment return and principal value will fluctuate so that a managed product’s monthly excess performance, placing more
shares, when redeemed, may be worth more or less than their original cost. Current emphasis on downward variations and rewarding consistent
performance may be lower or higher than the performance data quoted. Please visit performance. The top 10% of products in each product category receive
virtus.com for performance data current to the most recent month end. This share class 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars,
has no sales charge and is not available to all investors. Other share classes have sales the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The
charges. See virtus.com for details. Overall Morningstar Rating for a managed product is derived from a
weighted average of the performance figures associated with its three-,
The fund class gross expense ratio is 0.88%. five-, and 10-year (if applicable) Morningstar Rating metrics. The
Average annual total return is the annual compound return for the indicated period and reflects the change weights are: 100% three-year rating for 36-59 months of total returns,
in share price and the reinvestment of all dividends and capital gains. Returns for periods of one year or 60% five-year rating/40% three-year rating for 60-119 months of total
less are cumulative returns. returns, and 50% 10-year rating/30% five-year rating/20% three-year
Indexes: The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. rating for 120 or more months of total returns. While the 10-year overall
companies. The index is calculated on a total return basis with dividends reinvested. The index is star rating formula seems to give the most weight to the 10-year period,
unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct the most recent three-year period actually has the greatest impact
investment. The Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. investment grade because it is included in all three rating periods. Ratings do not take into
fixed rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns account the effects of sales charges and loads.
do not reflect any fees, expenses, or sales charges, and is not available for direct investment. © 2021 Morningstar, Inc. All rights reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2)
may not be copied or distributed; and (3) is not warranted to be accurate,
complete, or timely. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use of this
information. Past performance is no guarantee of future results.
23DISCLOSURES AND IMPORTANT INFORMATION
The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. Russell 1000 Index is an unmanaged index that consists of the 1,000
largest companies in the Russell 3000 Index and represents approximately 90% of the total market capitalization of the Russell 3000 Index. It is highly correlated with the S&P 500
Index. The Russell 2000® Index is a market capitalization-weighted index of the 2,000 smallest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies.
The MSCI EAFE® Index is a free float-adjusted market capitalization-weighted index that measures developed foreign market equity performance, excluding the U.S. and Canada. ICE
BofA High Yield Master II Index is an unmanaged index consisting of U.S. dollar denominated bonds that are issued in countries having a BBB3 or higher debt rating with at least one
year remaining till maturity. All bonds must have a credit rating below investment grade but not in default. The ICE BofA US Convertibles Index tracks the performance of publicly
issued US dollar denominated convertible securities of U.S. companies. ICE BofA US Treasury Index tracks the performance of the direct sovereign debt of the U.S. Government. It
includes all U.S. dollar-denominated U.S. Treasury Notes and Bonds having at least one year remaining to maturity and a minimum amount outstanding of $1 billion. Additional sub-
indices are available that segment the Index by maturity. Bloomberg Barclays U.S. Credit Index is the credit component of the U.S. Government/Credit index. It includes publicly
issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity and quality requirements. To qualify, securities must be rated
investment grade (Baa3 or better) by Moody’s. The index is the same as the former U.S. Corporate Investment Grade Index. The Bloomberg Barclays U.S. Aggregate Bond Index
measures the U.S. investment grade fixed rate bond market. CBOE Volatility Index, or VIX, is a real-time market index that represents the market's expectation of 30-day forward-
looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors' sentiments. The ICE BofA US High Yield Index tracks
the performance of below investment grade U.S. dollar denominated corporate bonds publicly issued in the U.S. domestic market and
includes issues with a credit rating of BBB or below. The index is calculated on a total return basis.
Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of
investing. It is not possible to invest directly in an index.
Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as
one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either
direction the security that is perfectly negatively correlated will move by an equal amount in the opposite direction. If the correlation is 0, the movements of the securities is said to have
no correlation, it is completely random.
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually
referred to in terms of the coupon rate (the sum of coupons paid in a year divided by the face value of the bond in question).
Delta is the ratio that compares the change in the price of an asset to the corresponding change in the price of its derivative. For example, if a stock option has a delta value of 0.65, this
means that if the underlying stock increases in price by $1 per share, the option on it will rise by $0.65 per share, all else being equal.
Default Rate is most commonly referred to as the percentage of loans that have been charged off after a prolonged period of missed payments. Defaulted loans are typically written off
from an issuer’s financial statements and transferred to a collection agency. In some cases a default rate may also be a higher interest rate charged to a borrower after a specified
number of missed payments occur.
Dividend Yield, expressed as a percentage, is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.
Effective Duration The change in the value of a fixed income security that will result from a 1% change in interest rates while taking into account the way changes in rates will affect the
expected cash flows of any bond with an embedded option such as call or prepayment option. This measure assigns a probability to the exercise of a call option, where applicable,
based on specified shifts in the yield curve. Duration is expressed as a number of years, and generally, the larger the duration, the greater the interest rate risk or reward for a portfolio’s
underlying bond prices.
EPS Growth Rate is the company's estimated future earnings for each stock held by the portfolio.
Price-to-Earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).
Standard Deviation measures variability of returns around the average return for an investment portfolio. Higher standard deviation suggests greater risk.
Yield to Maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. YTM is considered a long-term bond yield but is expressed as an annual rate. In
other words, it is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity, with all payments made as scheduled and reinvested at the
same rate.
24Virtus (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers,
singularly committed to the long-term success of individual and institutional investors.
We are not constrained by a single investment approach; rather, we provide access to independent,
specialized investment philosophies through our multi-discipline, multi-strategy approach.
We have the flexibility, agility, and responsiveness of a boutique asset management firm with similar product
breadth and investment talent of our larger peers.
We are committed to thoughtfully providing investment solutions, adhering to the highest standards of
product quality, operational excellence, and fiduciary responsibility.
Please consider a Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this
and other information about any Virtus Fund, contact your financial professional, call 800-243-4361, or visit
virtus.com for a prospectus or summary prospectus. Read it carefully before investing.
Not all products or marketing materials are available at all firms.
Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.
Mutual funds distributed by VP Distributors, LLC member FINRA and subsidiary of Virtus Investment Partners, Inc.
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