HARTFORD, Conn., March 4, 2015 /PRNewswire/ -- Virtus Global Multi-Sector Income Fund (NYSE: VGI), a diversified closed-end fund, today announced that it will institute a managed distribution plan and, with the adoption of the plan, will increase its monthly distribution rate by 20 percent from the previous month's distribution. The fund is undertaking these actions to enhance shareholder value by both providing a more attractive distribution rate and furthering its efforts to reduce the current discount to which its shares trade relative to their net asset value ("NAV").
The fund's adoption of the managed distribution plan and its increased distribution rate are attributable, in part, to the implementation of the fund's option overlay strategy that was adopted in 2014. Newfleet Asset Management, the subadviser to VGI, utilizes an option overlay strategy that purchases and sells puts and calls with the objective of monetizing the volatility inherent in the equity market.
Under the terms of the fund's managed distribution policy, the fund will seek to maintain a consistent distribution level that may be paid in part or in full from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the fund's aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund's assets and will constitute a return of the shareholder's capital. A return of capital is not taxable; rather it reduces a shareholder's tax basis in his or her shares of the fund.
The fund announced the following monthly distributions:
Amount of Distribution |
Ex-Date |
Record Date |
Payable Date |
$0.156 |
April 9, 2015 |
April 13, 2015 |
April 20, 2015 |
$0.156 |
May 7, 2015 |
May 11, 2015 |
May 18, 2015 |
$0.156 |
June 9, 2015 |
June 11, 2015 |
June 18, 2015 |
The fund provided this estimate of the sources of the distributions:
Distribution Estimates |
February 2015 (MTD) |
Year-to-date (YTD)(1) |
||
(Sources) |
Per Share Amount |
Percentage |
Per Share Amount |
Percentage of Current Distribution |
Net Investment Income |
$ 0.097 |
74.2% |
$ 0.175 |
67.1% |
Net Realized Short-Term Capital Gains |
- |
0.0% |
0.024 |
9.3% |
Net Realized Long-Term Capital Gains |
0.013 |
10.1% |
0.013 |
5.1% |
Return of Capital (or other Capital Source) |
0.020 |
15.7% |
0.048 |
18.5% |
Total Distribution |
$ 0.130 |
100.0% |
$ 0.260 |
100.0% |
(1) YTD February 2, 2015 to January 11, 2016. (The distribution paid on January 9, 2015 was reportable for tax on Form 1099 in 2014.) |
The amounts and sources of distributions reported in this notice are estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions will depend on the fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders what distributions to report for federal income tax purposes.
Information regarding the fund's performance and distribution rates is set forth below. Please note that all performance figures are based on the fund's NAV and not the market price of the fund's shares. Performance figures are not meant to represent individual shareholder performance.
As of February 27, 2015 |
|
Average Annual Total Return on NAV since inception (2) |
7.60% |
Current Fiscal YTD Annualized Distribution Rate (3) |
8.56% |
YTD Cumulative Total Return on NAV (4) |
3.70% |
YTD Cumulative Distribution Rate (5) |
1.43% |
(2) Average Annual Total Return on NAV is the annual compound return from the commencement of the fund's operations on February 23, 2012. It reflects the change in the fund's NAV and reinvestment of all distributions. |
|
(3) Current Fiscal YTD Annualized Distribution Rate is the cumulative distribution rate annualized as a percentage of the fund's NAV at month end. |
|
(4) YTD Cumulative Total Return on NAV is the percentage change in the fund's NAV from the first day of the year to this month end, including distributions paid and assuming reinvestment of those distributions. |
|
(5) YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the year to this month end as a percentage of the fund's NAV at month end. |
About the fund
The Virtus Global Multi-Sector Income Fund seeks to maximize current income while preserving capital by giving investors an opportunity to benefit from broadly diversified holdings across the major domestic and international fixed-income sectors. It is managed by Newfleet Asset Management, LLC, an affiliated manager of Virtus Investment Partners, Inc. that specializes in multi-sector fixed income investing. For more information on the fund, contact shareholder services at (866) 270-7788, by email at [email protected], or through the closed end fund section on the web at www.virtus.com.
An investment in the fund is subject to risk. The fund's shares may be worth less than what an investor paid for them when they are sold. The options strategy may not be successful in its objective of increasing distributable income while limiting the risk of loss and could result in increased losses for investors.
About Newfleet Asset Management
Newfleet Asset Management, an affiliated manager of Virtus Investment Partners, provides comprehensive fixed income portfolio management in multiple strategies. The Newfleet Multi-Sector Strategies team that manages the Virtus Global Multi-Sector Income Fund leverages the knowledge and skill of investment professionals with expertise in every sector of the bond market, including evolving, specialized, and out-of-favor sectors. The team employs active sector rotation and disciplined risk management to portfolio construction, avoiding interest rate bets and remaining duration neutral to each strategy's stated benchmark.
About Virtus Investment Partners
Virtus Investment Partners (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. For more information visit www.virtus.com.
Forward-Looking Information
This press release contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about beliefs or expectations, are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as "expect," "estimate," "plan," "intend," "believe," "anticipate," "may," "will," "should," "could," "continue," "project," or similar statements or variations of such terms. Forward-looking statements are based on a series of expectations, assumptions and projections; are not guarantees of future results or performance; and may involve risks and uncertainty. All forward-looking statements are as of the date of this release only. The company can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.
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SOURCE Virtus Investment Partners, Inc.
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