Virtus Diversified Income & Convertible Fund Announces Special Year-End Distribution and Discloses Sources of Distribution - Section 19(a) Notice
MWN-AI** Summary
The Virtus Diversified Income & Convertible Fund (NYSE: ACV) has announced a special year-end distribution of $0.384 per share, set for shareholders ex-dated on December 29, 2025, and payable on January 9, 2026. This distribution, in addition to the regular monthly payout of $0.18 per share announced earlier, is intended to meet federal tax obligations for shareholders.
The Fund disclosed that the majority of the special distribution will be sourced from net realized short-term capital gains, whereas the earlier monthly distribution draws from net investment income and realized capital gains. Specifically, the breakdown of the December 2025 distributions shows that the full monthly amount of $0.180 is derived entirely from net realized short-term capital gains, while $0.023 of the special distribution is attributed to similar sources, with net investment income contributing nothing to either distribution.
The Fund operates under a Managed Distribution Plan, aiming to provide consistent distribution levels that may include return of capital when necessary. As a caution, the Fund advises shareholders against drawing conclusions regarding its investment performance solely from these distribution amounts.
In terms of performance, the Fund reported an average annual total return on net asset value (NAV) of 8.37% over the past five years, alongside a 19.99% cumulative total return fiscal year-to-date, which reflects the strong management of its diversified investment strategy targeting convertible securities and equities.
Investors are reminded that while the reported figures offer insights into the Fund's performance, they may not represent individual shareholder outcomes. Virtus Investment Advisers, LLC acts as the Fund's adviser, and it periodically updates shareholders with performance reports and necessary details for tax reporting.
MWN-AI** Analysis
The announcement from Virtus Diversified Income & Convertible Fund (NYSE: ACV) regarding a special year-end distribution of $0.384 per share is significant for potential and existing investors. This distribution, set to be payable on January 9, 2026, is not only a regular monthly payment but also aims to manage federal tax requirements effectively.
Analyzing the sources of this distribution provides insight into the fund's financial health. Notably, the majority of the special year-end distribution will come from net realized short-term capital gains, indicating that the fund has been active and successful in executing trades to generate returns. Despite the absence of contributions from net investment income and long-term capital gains in the special distribution, the fund has maintained robust overall returns; for instance, the average annual total return on NAV for the past five years stands at 8.37%.
For investors, it’s essential to consider the implications of the fund's Managed Distribution Plan. While the fund seeks to maintain steady distributions, there is a possibility that distributions may come from capital depletion, raising concerns about the sustainability of such payouts in the long term. The fiscal YTD cumulative distribution rate is 8.45%, slightly offset by concerns regarding reliance on realized gains. An important reminder here is that distributions may represent a return of capital, which can affect the overall investment thesis.
With shares trading based on market price fluctuations, it’s crucial for investors to assess whether ACV shares are trading at a premium or discount to NAV. Given the fund's investment strategy and the expected tax implications of distributions, potential investors should approach with caution but may find value in opportunities arising from market volatility. Overall, monitoring ongoing performance and distribution sources will be key for strategic investment in the fund.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Virtus Diversified Income & Convertible Fund (NYSE: ACV) today announced the following special year-end distribution to holders of its common shares:
Ticker | Amount of Distribution | Ex-Date/Record Date | Payable Date |
ACV | $0.384 | December 29, 2025 | January 9, 2026 |
This special year-end distribution, which is in addition to the regular monthly distribution paid to holders of its common shares, is being paid by the Fund to manage certain federal tax requirements.
The Fund previously announced the following monthly distribution on November 19, 2025:
Ticker | Amount of Distribution | Ex-Date/Record Date | Payable Date |
ACV | $0.18 | December 11, 2025 | December 30, 2025 |
The Fund provides this estimate of the sources of the special distribution and the December 2025 and fiscal year-to-date distributions made pursuant to the Fund’s Managed Distribution Plan:
Distribution Estimates | December 2025 (MTD) | Special Year-End | Fiscal Year-to-Date | ||||||
(Sources) | Per Share Amount | Percentage | Per Share Amount | Percentage | Per Share | Percentage | |||
Net Investment Income | $ | 0.000 | 0.0% | $ | 0.000 | 0.0% | $ | 0.055 | 2.3% |
Net Realized Short-Term Capital Gains | 0.180 | 100.0% | 0.023 | 6.0% | 1.948 | 82.4% | |||
Net Realized Long-Term Capital Gains | 0.000 | 0.0% | 0.361 | 94.0% | 0.361 | 15.3% | |||
Return of Capital (or other Capital Source) | 0.000 | 0.0% | 0.000 | 0.0% | 0.000 | 0.0% | |||
Total Distribution | $ | 0.180 | 100.0% | $ | 0.384 | 100.0% | $ | 2.364 | 100.0% |
| (1) | Fiscal year started February 1, 2025. |
Under the terms of its Managed Distribution Plan, the Fund seeks 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.
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 net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
November 28, 2025 | |
Average Annual Total Return on NAV for the 5-year period (2) | 8.37% |
Annualized Current Distribution Rate (3) | 8.36% |
Fiscal YTD Cumulative Total Return on NAV (4) | 19.99% |
Fiscal YTD Cumulative Distribution Rate (5) | 8.45% |
(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 6.97% if the special year-end distribution of $0.384 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. The Fund has a limited term and will terminate on the first business day following the 15th anniversary of the effective date of its registration statement, May 22, 2030, absent approval by the Fund’s Board of Trustees to extend the Fund’s term by up to 12 months. Virtus Investment Advisers, LLC, a registered investment adviser affiliated with Virtus Investment Partners, 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 NAV. 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 can be accessed through the Closed-End Funds section of virtus.com and may be obtained free of charge by contacting “Shareholder Services” as set forth at the end of this press release.
About Virtus Investment Partners, Inc.
Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment products and services from our investment managers , each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com .
View source version on businesswire.com: https://www.businesswire.com/news/home/20251219708020/en/
For Further Information:
Shareholder Services
(866) 270-7788
closedendfunds@virtus.com
FAQ**
How does Virtus Investment Partners Inc. (NYSE: VRTS) manage the risks associated with the diverse investment strategies employed by the Virtus Diversified Income & Convertible Fund (ACV)?
What are the implications of the recent special year-end distribution announced by Virtus Investment Partners Inc. (NYSE: VRTS) for investors in the ACV fund?
Can you elaborate on how the fund's Managed Distribution Plan influences the distribution rates for Virtus Diversified Income & Convertible Fund (ACV) shareholders and their potential tax liabilities with Virtus Investment Partners Inc. (NYSE: VRTS)?
How does the fund's investment strategy regarding convertibles, equities, and income-producing securities impact its overall performance as reported by Virtus Investment Partners Inc. (NYSE: VRTS)?
**MWN-AI FAQ is based on asking OpenAI questions about AllianzGI Diversified Income & Convertible Fund of Beneficial Interest (NYSE: ACV).
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