Virtus Convertible Fund Class R6 (VAADX)

Overview

The fund is designed for investors seeking to achieve an investment objective through exposure to convertible securities. Convertible securities, which include corporate bonds, debentures, notes, preferred stocks, and their hybrids, offer the potential for income generation and capital appreciation, with the added possibility of converting into equity securities for participating in the upside potential of the underlying company. By aiming to invest at least 80% of its net assets in these types of securities, the fund targets those who are looking for equity participation opportunities while potentially mitigating risks associated with direct equity investments.

Products and Services

• Converti​ble Corporate Bonds - These are corporate bonds that can be converted into a pre-determined number of the company's equity shares. They blend the income features of bonds with the growth potential of stocks, offering a balance between risk and reward.
• Debentures - Unsecured loans issued by companies that can be converted into stock after a certain period or under certain conditions. They typically offer higher interest rates to compensate for the higher risk of being unsecured.
• Convertible Notes - A type of debt that converts into equity, usually in connection with future financing rounds, providing an opportunity for early involvement in potentially high-growth companies with the security of a debt instrument until conversion.
• Convertible Preferred Stocks - Shares that offer the fixed income of bonds with the flexibility to convert into common stock. This conversion feature allows investors to benefit from increases in the company’s stock price.
• Hybrids - Securities that combine elements of both debt and equity, offering the opportunity to invest in a company with the potential for income, capital preservation, and conversion into equity to participate in growth.
• Warrants & Options - Instruments that provide the right, but not the obligation, to buy or sell a stock at a predetermined price before a certain date. Included in the fund’s definition of convertible securities, they offer the potential for equity participation and leverage.