Summary
NCV Chart
NCV: High Yield On Common Shares And Security With NCV.PR.A.
Virtus Convertible & Income Fund offers a 10.25% dividend yield, trading at a 9.34% discount to NAV, near its 5-year average. NCV maintains high leverage at 33.22%, with 65.3% in convertibles and 29.5% in high-yield bonds, focusing on IT, Industrials, and Financials. The fund's preferred stock yields 7.22%, trades below par, holds an A rating, and is considered among the safest preferreds in its peer group.
Behind The Yield: A Closer Look At NCV
Virtus Convertible & Income Fund offers a 9.6% yield but relies heavily on return of capital, leading to long-term NAV erosion. NCV's portfolio is highly leveraged (32.7%) and mostly below investment grade or unrated, amplifying both risk and return in volatile markets. The fund's high 4.20% expense ratio and persistent NAV decline undermine the sustainability of its attractive yield.
NCV: Dividend Coverage Improved But High Interest Rates Threaten Growth
Virtus Convertible & Income Fund remains a hold as growth potential is limited by elevated interest rates and aggressive leverage. NCV trades at a 10.62% discount to NAV and offers a 10% yield, but persistent NAV erosion and spotty dividend history raise sustainability concerns. Net investment income has declined, making distributions reliant on net realized gains and return of capital, which undermines long-term NAV stability.
Virtus Convertible & Income Fund Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 1,320 | $19,641.6 | $19,866 | $224.4 | 1.14% |
| CO Carla Olenchak PEOPLES FINANCIAL SERVICES Corp. | 707 | $9,141.51 | $10,548.44 | $1,406.93 | 15.39% |
| HC Hubert Cheng Park Avenue Securities LLC | 84,620 | $1.27M | $1.25M | -$18,616.4 | -1.47% |
| RAS Robert A. Saperstein Guggenheim Capital LLC | 417,402 | $6.19M | $6.17M | -$22,846.76 | -0.37% |
| BO Brian Oliveira Clear Street Group Inc. | 3,189 | $56,095 | $47,994.13 | -$8,100.87 | -14.44% |
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Virtus Convertible & Income Fund Profile
| NYSE Exchange | US Country |
Overview
The Virtus Convertible & Income Fund is a closed-ended fixed income mutual fund, initiated and overseen by Allianz Global Investors Fund Management LLC, with Allianz Global Investors U.S. LLC co-managing the fund. Specializing in the fixed income markets of the United States, this fund dedicates its investments principally to convertible securities as well as non-convertible high-yield bonds that are rated below investment grade. The investment portfolio of the fund spans a variety of maturities, targeting a weighted average maturity period ranging from five to ten years. Utilizing a bottom-up stock picking strategy based on fundamental analysis, the fund leverages in-house research facilitated by proprietary models to construct its portfolio. Initially launched as the AGIC Convertible & Income Fund on March 31, 2003, it has since been rebranded and operates within the United States.
Products and Services
Convertible Securities: The Virtus Convertible & Income Fund invests in convertible securities, which are financial instruments like bonds or preferred shares that can be converted into a predetermined number of the issuing company's common stock. This blend of bond and equity features allows the fund to potentially benefit from the upside of equity markets while seeking to provide downside protection through the fixed income component.
Non-Convertible High-Yield Bonds: Another key component of the fund's investment strategy is its focus on non-convertible high-yield bonds, also known as junk bonds. These are bonds rated below investment grade and typically offer higher yields to compensate for the increased risk of default. By including non-convertible high-yield bonds in its portfolio, the fund seeks to enhance overall yield and return potential amidst varying market conditions.
Research and Analysis: Fundamental to the fund's investment process is its emphasis on fundamental analysis and a bottom-up stock picking approach. Leveraging in-house research supported by proprietary models, the fund aims to identify undervalued securities that may offer potential for growth. This rigorous analysis and selection process is designed to construct a diversified portfolio aligned with the fund's strategic goals.
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