Virtus Newfleet Dynamic Credit ETF

Investment Opportunity

The Fund has the potential to generate competitive total return from both income and capital appreciation, as well as to provide a hedge against rising interest rates. The Fund offers investors the opportunity to outsource the complexity of allocating between two rapidly converging non-investment-grade credit sectors—high yield corporate bonds and floating rate bank loans—to a single manager with deep expertise in both asset classes and longstanding experience managing multi-sector portfolios. The expanded opportunity set created by combining these asset classes may provide enhanced diversification benefits due to low correlation to core fixed income. The Fund also has the ability to invest up to 100% of its assets in U.S. Treasuries when the managers determine that market conditions warrant a move away from credit sectors.

Fund Risks

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

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.

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.

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.

Tax Liability: Noncompliant conduct by a municipal bond issuer, or adverse interpretations, could cause interest from a security to become taxable, subjecting shareholders to increased tax liability.

Market Price/NAV: At the time of purchase and/or sale, an investor's shares may have a market price that is above or below the fund's NAV, which may increase the investor's risk of loss.

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

Management Team

David L. Albrycht, CFA
Newfleet Asset Management, LLC

Industry start date: 1985

Start date with Fund: 2016

Francesco Ossino
Newfleet Asset Management, LLC

Industry start date: 1996

Start date with Fund: 2016

Jonathan Stanley, CFA
Newfleet Asset Management, LLC

Industry start date: 1997

Start date with Fund: 2016

Newfleet Asset Management, LLC

Newfleet Asset Management, LLC is a dynamic provider of fixed income investments. Our talented and experienced team is committed to delivering a comprehensive array of portfolios, and together, we work with our clients and partners to build portfolios that meet investor needs in an ever-changing market.

Fund Information

Exchange: NYSE Arca
Ticker: BLHY
CUSIP: 92790A207
Inception Date: 12/5/2016

Average Annual Total Returns

Monthly Performance (%) (as of 5/31/2017)
  1 Mo. 3 Mo.   YTD     1YR   3YR 5YR 10YR Since Inception
NAV 0.47 1.08 1.90 NA NA NA NA 1.98
MKT Price 0.54 1.09 1.67 NA NA NA NA 1.79
Index 0.62 1.34 3.36 NA NA NA NA 4.64
Quarterly Performance (%) (as of 3/31/2017)
  1 Mo. 3 Mo. YTD 1YR 3YR 5YR 10YR Since Inception
NAV -0.08 0.73 0.73 NA NA NA NA 0.81
MKT Price -0.10 0.47 0.47 NA NA NA NA 0.59
Index -0.07 1.92 1.92 NA NA NA NA 3.18

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: 0.55
Other Expenses: 0.66
Acquired Fund Fees: 0.00
Gross Expense Ratio: 1.21
Net Expense Ratio: 0.68

Operating expenses reflect a contractual expense reimbursement in effect through 11/28/2017.

Index: 50% S&P LSTA Leveraged Loan / 50% Bloomberg Barclays HY 2% Issuer Cap
The composite index consists of 50% S&P/LSTA Leveraged Loan Index (an index that tracks the current outstanding balance and spread over LIBOR for fully funded term loans representing a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers, calculated on a total return basis) and 50% Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Bond Index (a market capitalization-weighted index that measures fixed rate non-investment grade debt securities of U.S. and non-U.S. corporations, with no single issuer accounting for more than 2% of market cap, calculated on a total return basis). The composite 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 6/27/2017)

NAV: $25.12
Change: $0.01
Closing Price: $25.07
Change: -$0.02
4PM Bid/Offer Midpoint: $25.09
Premium/Discount: -$0.03
Shares Outstanding: 5,004,000.00
Net Assets: 125,696,818.67
Daily Trade Volume: 28,075.00
20 Day Average Trading Volume: 18,801.00


Distribution Yield (as of 6/27/2017) 4.02
SEC Yields (as of 5/31/2017)  
SEC Yield Subsidized: 3.60
SEC Yield Unsubsidized: 3.58

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%
2016-Q4: 12/5/2016 through 12/30/2016 0 0 0 0 13 6 0 0 0 0
2017-Q1: 1/3/2017 through 3/31/2017 0 0 0 0 54 8 0 0 0 0

Top Holdings (% Fund)
(as of 6/28/2017)

US TREASURY N/B 1.875 02/28/2022 4.79
MORGAN STANLEY 2.553 10/24/2023 2.17
US TREASURY N/B 2.000 11/15/2026 1.56
INFOR US INC 3.900 02/01/2022 1.23
LEVEL 3 FINANCING INC 3.546 02/22/2024 1.18
UNIVISION COMMUNICATIONS 3.960 03/15/2024 1.16
UPC FINANCING PARTNERSHIP 4.183 04/15/2025 1.08
ZIGGO SECURED FINANCE PART 3.780 04/27/2025 0.99
UNIVAR USA INC 3.960 07/01/2022 0.91

Fund Distributions

Distributions - Last 12 Months
Short Term
Capital Gain
Long Term
Capital Gain
6/20/2017 6/22/2017 6/29/2017 $0.084130 $0.000000 $0.000000 $0.084130
5/22/2017 5/24/2017 5/30/2017 $0.080230 $0.000000 $0.000000 $0.080230
4/20/2017 4/24/2017 5/1/2017 $0.072140 $0.000000 $0.000000 $0.072140
3/20/2017 3/22/2017 3/28/2017 $0.040040 $0.000000 $0.000000 $0.040040
2/22/2017 2/24/2017 2/28/2017 $0.032330 $0.000000 $0.000000 $0.032330
1/20/2017 1/24/2017 1/30/2017 $0.006120 $0.000000 $0.000000 $0.006120

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 for a copy of the Fund's prospectus. Read the prospectus carefully before you invest or send money.

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.

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.

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.

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

Distributed by ETF Distributors LLC