Virtus Diversified Income & Convertible Fund Discloses Sources of Distribution - Section 19(a) Notice

Rhea-AI Summary

Virtus Diversified Income & Convertible Fund (NYSE: ACV) announced a monthly distribution of $0.18 per share, payable on February 1, 2023. Shareholders should note that this distribution could partly involve a return of capital if the fund's net investment income and realized capital gains fall short. The distribution is composed of various components, with 72.8% sourced from net realized long-term capital gains, and 27.2% as return of capital. The fund's current annualized distribution rate stands at 10.87%, but its fiscal year-to-date cumulative total return on NAV has decreased by -19.66%.

Positive

• Monthly distribution of $0.18 per share reflects continuous payout efforts.
• Annualized current distribution rate at 10.87% demonstrates attractive income potential.

Negative

• Fiscal year-to-date cumulative total return on NAV is down by 19.66%.
• Distribution includes a 27.2% return of capital, indicating reliance on capital rather than income.

HARTFORD, Conn., Jan. 19, 2023 /PRNewswire/ -- Virtus Diversified Income & Convertible Fund (NYSE: ACV) previously announced the following monthly distribution on December 2, 2022:  

Amount of Distribution	Ex-Date	Record Date	Payable Date
$0.18	January 19, 2023	January 20, 2023	February 1, 2023

Under the terms of its Managed Distribution Plan, 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. You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's Managed Distribution Plan.

The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return of capital.  A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you.  A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with 'yield' or 'income'.

The Fund provided this estimate of the sources of the distributions:

Distribution Estimates	January 2023 (MTD)		Fiscal Year-to-Date (YTD) (1)
(Sources)	Per Share Amount	Percentage of Current Distribution	Per Share Amount	Percentage of Current Distribution
Net Investment Income	$             -	0.0 %	$     0.005	0.2 %
Net Realized Short-Term Capital Gains	-	0.0 %	0.602	25.6 %
Net Realized Long-Term Capital Gains	0.131	72.8 %	1.700	72.1 %
Return of Capital (or other Capital Source)	0.049	27.2 %	0.049	2.1 %
Total Distribution	$     0.180	100.0 %	$     2.356	100.0 %

(1)	Fiscal year started February 1, 2022.  Per Share Amount includes the special year-end distribution of $0.196 per share sourced from Net Realized Long-Term Capital Gains.

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.

December 30, 2022
Average Annual Total Return on NAV for the 5-year period (2)		9.59 %
Annualized Current Distribution Rate (3)		10.87 %
Fiscal YTD Cumulative Total Return on NAV (4)		-19.66 %
Fiscal YTD Cumulative Distribution Rate (5)		10.95 %

(2)	Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the change in the Fund's NAV and reinvestment of all distributions.
(3)	Annualized Current Distribution Rate is the current distribution rate ($0.18 per share) annualized as a percentage of the Fund's NAV at month end.
(4)	Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund's NAV from the first day of the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions.
(5)	Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal year to this month end (inclusive of the special year-end distribution) as a percentage of the Fund's NAV at month end. The Fiscal YTD Cumulative Distribution Rate would be 9.96% if the special year-end distribution of $0.196 per share was excluded

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 for tax purposes 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 or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.

About the Fund

Virtus Diversified Income & Convertible Fund is a diversified closed-end fund that seeks to provide total return through a combination of current income and capital appreciation, while seeking to provide downside protection against capital loss. The Fund strives to dynamically allocate across convertibles, equities, and income-producing securities. The Fund normally invests at least 50% of total managed assets in convertibles and has the latitude to write covered call options on the stocks held in the equity portion. Virtus Investment Advisers, Inc. is the investment adviser to the Fund and Voya Investment Management is its subadviser.

For more information on the Fund, contact shareholder services at (866) 270-7788, by email at closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.

Fund Risks

An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund's shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their net asset value. For more information about the Fund's investment objective and risks, please see the Fund's annual report. A copy of the Fund's most recent annual report may be obtained free of charge by contacting "Shareholder Services" as set forth at the end of this press release.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/virtus-diversified-income--convertible-fund-discloses-sources-of-distribution--section-19a-notice-301726224.html

SOURCE Virtus Diversified Income & Convertible Fund

FAQ

What is the distribution amount for Virtus Diversified Income & Convertible Fund in January 2023?

The distribution amount is $0.18 per share.

What is the record date for the January 2023 distribution of ACV?

The record date is January 20, 2023.

What percentage of the January 2023 distribution is classified as return of capital for ACV?

27.2% of the January 2023 distribution is classified as return of capital.

How has the year-to-date return on net asset value (NAV) performed for ACV?

The fiscal year-to-date cumulative total return on NAV is down by 19.66%.