Strategies | Newfleet Multi-Sector Unconstrained Bond ETF

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Investment Opportunity

The Virtus Newfleet Multi-Sector Unconstrained Bond ETF (Ticker: NFLT) seeks to provide a high level of current income and, secondarily, capital appreciation. Newfleet Asset Management's cornerstone philosophy emphasizes choosing the right pockets of the global bond market at the right times. Newfleet believes the most effective way to achieve long-term excess returns is through the combination of active sector rotation and disciplined risk management. NFLT is a logical extension of Newfleet's proven multi-sector approach. While NFLT embraces the virtues of diversification, the lack of formal sector, industry, or country limitations means that the team can express its highest conviction ideas. Unlike many unconstrained funds, however, NFLT does not invest in equities, which can be highly volatile and out-of-sync with bond investors' expectations. Because the Fund is benchmark agnostic, Newfleet is not compelled to take risks embedded in the benchmark, such as unwanted exposure to interest rate sensitive sectors or overvalued credits.

Fund Risks

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.

Bank Loans: Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and/or trade infrequently on the secondary market. Loans can carry significant credit and call risk, can be difficult to value and have longer settlement times than other investments, which can make loans relatively illiquid at times.

ABS/MBS: Changes in interest rates can cause both extension and prepayment risks for asset- and mortgage-backed securities. These securities are also subject to risks associated with the repayment of underlying collateral.

Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.

Prospectus: For additional information on risks, please see the fund's prospectus.

Management Team

David L. Albrycht, CFA
David L. Albrycht, CFA Newfleet Asset Management, LLC

Industry start date: 1985

Start date with Fund: 2015

Jonathan Stanley, CFA
Jonathan Stanley, CFA Newfleet Asset Management, LLC

Industry start date: 1997

Start date with Fund: 2015

Newfleet Asset Management, LLC

Newfleet leverages the knowledge and skill of a team of investment professionals with expertise in every sector of the bond market, including evolving, specialized, and out-of-favor sectors. The team employs active sector rotation and disciplined risk management to portfolio construction.

Fund Information

Exchange: NYSE Arca
Ticker: NFLT
CUSIP: 26923G707
Inception Date: 8/10/2015
IOPV Symbol: NFLT.IV
NAV Symbol: NFLT.NV

IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund’s NAV every fifteen seconds throughout the trading day.

Average Annual Total Returns

Monthly Performance (%) (as of 5/31/2017)
  1 Mo. 3 Mo. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 0.61 1.69 3.53 7.56 NA NA NA 6.04
MKT Price 0.82 1.43 3.32 7.30 NA NA NA 5.86
Index 0.77 1.49 2.38 1.58 NA NA NA 2.87
Quarterly Performance (%) (as of 3/31/2017)
  1 Mo. 3 Mo. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 0.05 1.86 1.86 7.76 NA NA NA 5.63
MKT Price -0.14 1.72 1.72 7.64 NA NA NA 5.46
Index -0.05 0.82 0.82 0.44 NA NA NA 2.21

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Fees & Expenses

Management Fee: 0.70
Other Expenses: 0.20
Acquired Fund Fees: 0.02
Gross Expense Ratio: 0.92
Net Expense Ratio: 0.82
Operating expenses reflect a contractual expense reimbursement in effect through 3/1/2018.

Index: Bloomberg Barclays U.S. Aggregate Bond Index
The Bloomberg Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Fund Data & Pricing (as of 6/22/2017)

NAV: $25.64
Change: $0.01
Closing Price: $25.44
Change: -$0.14
4PM Bid/Offer Midpoint: $25.53
Premium/Discount: -$0.11
Shares Outstanding: 7,200,004.00
Net Assets: 184,639,853.33
Daily Trade Volume: 33,764.00

Yields

Distribution Yield (as of 6/22/2017) 4.50
   
SEC Yields (as of 5/31/2017)  
SEC Yield Subsidized: 4.13
SEC Yield Unsubsidized: 4.11

Premium / Discount Analysis

  Number of Days Fund Has Traded at a:
  Discount Premium
Period Less than -2% -1.51% to -2.00% -1.01% to -1.50% -0.51% to -1.00% -0.01% to -0.50% 0.00% to 0.50% 0.51% to 1.00% 1.01% to 1.50% 1.51% to 2.00% Greater than 2%
2015-Q3: 8/10/2015 through 9/30/2015 0 0 0 0 26 11 0 0 0 0
2015-Q4: 10/1/2015 through 12/31/2015 0 0 0 0 31 33 0 0 0 0
2016-Q1: 1/4/2016 through 3/31/2016 0 0 1 6 34 20 0 0 0 0
2016-Q2: 4/1/2016 through 6/30/2016 0 0 0 13 44 7 0 0 0 0
2016-Q3: 7/1/2016 through 9/30/2016 0 0 1 23 38 2 0 0 0 0
2016-Q4: 10/3/2016 through 12/30/2016 0 0 1 14 44 3 1 0 0 0
2017-Q1: 1/3/2017 through 3/31/2017 0 0 0 1 51 9 0 1 0 0

Top Holdings (% Fund)
(as of 6/23/2017)

JP MORGAN USD GOVT MONEY MARKET INSTL 3.10
US TREASURY N/B 1.625 02/15/2026 1.04
CALIFORNIA BABS 7.600 11/01/2040 0.92
RAST 2005-A1 A3 5.500 04/25/2035 0.74
TPMT 2015-2 1M1 3.250 11/25/2060 0.65
REPUBLIC OF ARGENTINA 7.500 04/22/2026 0.65
REPUBLIC OF TURKEY 4.875 10/09/2026 0.59
CHENIERE CORP CHRISTI HD 5.875 03/31/2025 0.58
PROVINCIA DE BUENOS AIRE 9.125 03/16/2024 0.56
CEMEX FINANCE LLC 6.000 04/01/2024 0.56

Fund Distributions

Distributions - Last 12 Months
Ex
Date
Record
Date
Payable
Date
Dividend
Income
Short Term
Capital Gain
Long Term
Capital Gain
Distribution
Total
6/20/2017 6/22/2017 6/29/2017 $0.096240 $0.000000 $0.000000 $0.096240
5/22/2017 5/24/2017 5/30/2017 $0.094020 $0.000000 $0.000000 $0.094020
4/20/2017 4/24/2017 5/1/2017 $0.101080 $0.000000 $0.000000 $0.101080
3/20/2017 3/22/2017 3/28/2017 $0.074750 $0.000000 $0.000000 $0.074750
2/22/2017 2/24/2017 2/28/2017 $0.093380 $0.000000 $0.000000 $0.093380
1/20/2017 1/24/2017 1/30/2017 $0.050480 $0.000000 $0.000000 $0.050480
12/20/2016 12/22/2016 12/28/2016 $0.109230 $0.310380 $0.023560 $0.443170
11/21/2016 11/23/2016 11/29/2016 $0.097040 $0.000000 $0.000000 $0.097040
10/20/2016 10/24/2016 10/28/2016 $0.093550 $0.000000 $0.000000 $0.093550
9/20/2016 9/22/2016 9/28/2016 $0.087330 $0.000000 $0.000000 $0.087330
8/22/2016 8/24/2016 8/30/2016 $0.099690 $0.000000 $0.000000 $0.099690
7/20/2016 7/22/2016 7/28/2016 $0.099080 $0.000000 $0.000000 $0.099080
Distributions are represented on a cash basis and may be reclassified at year end for tax purposes. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Closing Price: The Closing Price is the price of the last reported trade on the fund's primary exchange. If there has been no reported trade for a particular date, the Closing Price represents the 4PM Bid/Offer Midpoint. 

4PM Bid/Offer Midpoint: The midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund's NAV is calculated (usually 4:00pm Eastern Time).

Premium/Discount: The amount the Fund is trading above or below the reported NAV (based on 4PM Bid/Offer Midpoint).


The Fund is an actively managed exchange-traded fund (“ETF”) and does not seek to replicate the performance of a specified index. The Fund may have a higher portfolio turnover than funds that seek to replicate the performance of an index.

The Fund is an exchange-traded fund (“ETF”). The “net asset value” (NAV) of the Fund is determined at the close of each business day, and represents the dollar value of one share of the Fund; it is calculated by taking the total assets of the Fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV of the Fund is not necessarily the same as its intraday trading value. Fund investors should not expect to buy or sell shares at NAV because shares of ETFs such as the Fund are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Thus, shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost.

NAV returns are calculated using the Fund’s daily 4:00 p.m. NAV, and include the reinvestment of all dividends and other distributions (reinvested at the Fund's NAV on distribution ex-date). Market price returns are calculated using the 4:00 pm midpoint between the bid and offer, and include the reinvestment of all dividends and other distributions (reinvested at the 4:00pm bid/offer midpoint on distribution ex-date). Market price returns do not represent the return you would receive if you traded at other times.

SEC Yield is an annualized yield that is calculated by dividing the investment income earned by the Fund less expenses over the most recent 30 day period by the current NAV at the end of the 30 day period. The Subsidized Yield reflects fee waivers and/or expense reimbursements recorded by the Fund during the period. Without waivers and/or reimbursements, yields would be reduced. The Unsubsidized Yield does not adjust for any fee waivers and/ or expense reimbursements in effect. If the Fund does not incur any fee waivers and/or expense reimbursements during the period, the Subsidized Yield and Unsubsidized Yield will be identical.

Distribution Yield is the annual yield that an investor would receive if the most recent distribution remained the same going forward. The yield represents a single distribution from the Fund and does not represent total return of the Fund. The distribution yield is calculated by annualizing the most recent distribution and dividing it by the most recent NAV.

Returns for periods of less than one year are cumulative total returns.

Please consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information about the Fund. Contact us at 888-383-0553 or visit www.newfleet.com for a copy of the Fund's prospectus. Read the prospectus carefully before you invest or send money.

Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.

Distributed by ETF Distributors LLC

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost.

 

NAV returns are calculated using the Fund’s daily 4:00 p.m. NAV, and include the reinvestment of all dividends and other distributions (reinvested at the Fund's NAV on distribution ex-date). Market price returns are calculated using the 4:00 pm midpoint between the bid and offer, and include the reinvestment of all dividends and other distributions (reinvested at the 4:00pm bid/offer midpoint on distribution ex-date). Market price returns do not represent the return you would receive if you traded at other times.