Virtus Dividend, Interest & Premium Strategy Fund Announces Distribution and Discloses Sources of Distribution - Section 19(a) Notice
MWN-AI** Summary
The Virtus Dividend, Interest & Premium Strategy Fund (NYSE: NFJ) has announced its quarterly distribution, set at $0.305 per share, payable on December 30, 2025, to shareholders on record as of December 11, 2025. This distribution is part of the Fund’s Managed Distribution Plan, which aims to provide a consistent level of distributions that may be financed through net investment income, realized capital gains, or a combination of both. Notably, if the income and capital gains fall short of the distribution amount, it could result in a return of capital to investors, which could effectively reduce the shareholder's invested capital.
For December 2025, the sources of the distribution are delineated as follows: 6.6% from net investment income, 33.4% from realized short-term capital gains, and 60% from realized long-term capital gains. A portion of the distribution may be a return of capital, which should not be confused with yield or income.
The Fund's performance metrics are revealing; as of October 31, 2025, it has recorded an average annual total return on net asset value (NAV) of 8.88% over five years and an annualized current distribution rate of 8.37%. The fiscal year-to-date cumulative total return on NAV is reported as 8.04%, maintaining the same distribution rate through the fiscal year.
Investors should receive Form 1099-DIV for tax reporting purposes, detailing the nature of the distributions. The Fund primarily invests about 75% of its assets in equity securities and 25% in convertible securities, employing a covered call option strategy. As with all investments, the Fund carries risks, including potential loss of principal and fluctuations in trading value. More details can be found on the Virtus website or by contacting their shareholder services.
MWN-AI** Analysis
The recent announcement by the Virtus Dividend, Interest & Premium Strategy Fund (NYSE: NFJ) of its quarterly distribution of $0.305 per share yields important insights for both current investors and potential buyers. Scheduled for payment on December 30, 2025, this distribution is a crucial element of the fund’s Managed Distribution Plan, aimed at providing investors with a predictable income stream. However, it is prudent to note that this distribution may be funded in part from net investment income, realized capital gains, and could also include a return of capital.
The breakdown of the fund's distribution sources shows that over 60% comes from long-term capital gains, with a significant portion being funded by returns of capital year-to-date. Such distributions can be misleading, as a return of capital implies that the fund is returning some of the investor’s principal, rather than profits generated from investments. This aspect deserves careful consideration, especially during periods of market volatility.
Investors should scrutinize the underlying performance statistics—specifically, the average annual total return on NAV over the past five years stands at 8.88%, with an annualized current distribution rate of 8.37%. These metrics highlight an attractive yield that can appeal to income-focused investors. However, prospects should also assess market conditions and their own risk tolerances, particularly because a share’s market price may fluctuate significantly and trade at premiums or discounts to its NAV.
In summary, while the current distribution from NFJ appears appealing, prospective buyers should evaluate their strategies against the backdrop of the fund’s distribution structure, potential return of capital implications, and broader market trends to make informed investment decisions.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Virtus Dividend, Interest & Premium Strategy Fund (NYSE: NFJ) today announced the following quarterly distribution:
Ticker | Amount of Distribution | Ex-Date/Record Date | Payable Date |
NFJ | $0.305 | December 11, 2025 | December 30, 2025 |
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 provides this estimate of the sources of its distribution:
Distribution Estimates | December 2025 (QTD) | Fiscal Year-to-Date (YTD) (1) | ||||
(Sources) | Per Share Amount | Percentage of Current Distribution | Per Share Amount | Percentage of Current Distribution | ||
Net Investment Income | $ | 0.020 | 6.6% | $ | 0.160 | 13.1% |
Net Realized Short-Term Capital Gains | $ | 0.102 | 33.4% | $ | 0.102 | 8.3% |
Net Realized Long-Term Capital Gains | $ | 0.183 | 60.0% | $ | 0.746 | 61.2% |
Return of Capital (or other Capital Source) | $ | 0.000 | 0.0% | $ | 0.212 | 17.4% |
Total Distribution | $ | 0.305 | 100.0% | $ | 1.220 | 100.0% |
(1) Fiscal year started February 1, 2025. |
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’.
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.
October 31, 2025 | |
Average Annual Total Return on NAV for the 5-year period (2) | 8.88% |
Annualized Current Distribution Rate (3) | 8.37% |
Fiscal YTD Cumulative Total Return on NAV (4) | 8.04% |
Fiscal YTD Cumulative Distribution Rate (5) | 8.37% |
(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 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 expected to be paid from the first day of the fiscal year through the next calendar quarter end as a percentage of the Fund's NAV at month end. |
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 Dividend, Interest & Premium Strategy Fund is a diversified closed-end fund that seeks current income and gains, with long-term capital appreciation as a secondary objective. The Fund generally invests approximately 75% of its total assets in equity securities and approximately 25% in convertible securities. The Fund employs an option strategy of writing (selling) covered call options on equity securities held in the Fund. Virtus Investment Advisers, LLC, a registered investment adviser affiliated with Virtus Investment Partners, Inc., is the investment adviser to the Fund, and NFJ Investment Group and Voya Investment Management are its subadvisers.
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 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/20251119729399/en/
Shareholder Services
(866) 270-7788
closedendfunds@virtus.com
FAQ**
How does the investment strategy of Virtus Dividend, Interest & Premium Strategy Fund align with the broader goals of Virtus Investment Partners Inc. VRTS, especially in terms of achieving long-term capital appreciation?
Given the distribution estimates provided, what measures does Virtus Investment Partners Inc. VRTS take to ensure sustainable distribution levels while managing risks associated with return of capital?
How does Virtus Investment Partners Inc. VRTS assess and report on the performance of the Fund in comparison to similar funds in the market, especially since returns are based on net asset value rather than market price?
What specific risks does Virtus Investment Partners Inc. VRTS identify concerning the potential for share price trading at a premium or discount to NAV, and how does it communicate these risks to investors?
**MWN-AI FAQ is based on asking OpenAI questions about AllianzGI NFJ Dividend Interest & Premium Strategy Fund (NYSE: NFJ).
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