Our Products | Mutual Funds | CA Tax-Exempt Bond (CTESX)

Back to Products
Print

Investment Opportunity

The fund seeks current income free from federal and state income taxes by investing in municipal bonds issued in the state of California. The management team focuses on high quality California tax-exempt municipal bonds, gauging the value of a security by issue type, credit quality, and bond structure.

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.

Geographic Concentration: A fund that focuses its investments in a particular geographic location will be highly sensitive to financial, economic, political, and other developments affecting the fiscal stability of that location.

Municipal Market: Events negatively impacting a municipal security, or the municipal bond market in general, may cause the fund to decrease in value.

State & AMT Tax: A portion of income may be subject to some state and/or local taxes and, for certain investors, a portion may be subject to the federal alternative minimum tax.

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.

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

Key Stats (as of 8/4/2015)

Inception: 5/17/1983
Ticker: CTESX
CUSIP: 92828R503
Fund No: 556
Net Assets by Fund: $33,261,568
Net Assets by Class: $22,281,194

Management Team

Tim Heaney, CFA
Tim Heaney, CFA Newfleet Asset Management

Industry start date: 1990

Start date with Fund: 1997

Newfleet Asset Management

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.

Morningstar Ratings

Overall Rating Non Load-Waived

As of 6/30/2015 the Fund was rated 2 stars out of 117 funds, 2 stars out of 108 funds and 2 stars out of 91 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Overall Rating Load-Waived

As of 6/30/2015 the Fund was rated 3 stars out of 117 funds, 2 stars out of 108 funds and 2 stars out of 91 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.

Average Annual Total Returns

Monthly Performance (%) (as of 7/31/2015)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 0.30 0.83 3.65 3.27 4.85 4.25 6.18
POP -2.45 -1.94 0.80 2.31 4.27 3.96 6.08
Quarterly Performance (%) (as of 6/30/2015)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV -0.93 0.05 3.31 3.61 4.97 4.09 6.17
POP -3.66 -2.70 0.47 2.65 4.38 3.80 6.07
Index -0.86 0.23 3.34 4.00 5.38 4.73 NA

Index: Barclays California Municipal Bond Index
The Barclays California Municipal Bond Index measures long term investment grade, tax-exempt and fixed rate bonds issued in California. 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.

Sales Charge and Expense

POP (Public Offering Price) performance reflects the deduction of the maximum sales charge of 2.75%. A contingent deferred sales charge of 0.50% may be imposed on certain redemptions within 18 months on purchases on which a finder’s fee has been paid.

Fund class operating expenses are 0.85% and gross operating expenses are 1.11%.

Operating expenses reflect a voluntary expense reimbursement, which may be discontinued at any time.

Risk Statistics3 (as of 6/30/2015)

  Fund Index
R2 0.99 1.00
Beta 1.07 1.00
Alpha -0.65 0.00
Std Dev 4.14 3.84
Index: Barclays California Municipal Bond Index

Daily Price (as of 8/4/2015)

NAV Change ($)
12.07 0.00
POP Change ($)
12.41 0.00

Yields/Distributions1 (as of 6/30/2015)

Distribution Yield (at NAV) 3.15%
SEC Yield 2.84%
SEC Yield (gross) 2.52%
Distributions Current Month $0.031533
Distributions YTD $0.197777

Distribution History2 (June 2015)

Ex-Date 06/30/2015
Income $0.031533
STCG $0.000000
LTCG $0.000000
Reinvest NAV $12.01

Top Holdings (% Fund)
(as of 6/30/2015)

Riverside County Single Family, 7.8% 05/01/2021 4.28
Infrastructure & Economic Development Bank, 5.13% 07/01/2037 2.84
North City West School Facilities Financing Authority, 5.25% 09/01/2019 2.51
Anaheim Public Financing Authority, 6% 09/01/2016 2.27
University of California, 5% 05/15/2028 2.23
Golden State Tobacco Securitization Corp., 5.13% 06/01/2047 2.15
City of Pomona, Certificates of Participation, 5.5% 06/01/2028 2.12
Placer Union High School District, 0% 08/01/2032 2.08
Santa Margarita-Dana Point Authority, 5.13% 08/01/2038 2.08
State of California Public Works Board, 5.75% 10/01/2030 1.92

Top Sectors (% Fund)
(as of 6/30/2015)

Prerefunded 16.83
Local General Obligation 13.60
Leasing 10.73
Water & Sewer 10.46
Electric 7.47

Characteristics4
(as of 6/30/2015)

Duration 6.75 years

Morningstar Ratings

Overall Rating Non Load-Waived

As of 6/30/2015 the Fund was rated 2 stars out of 117 funds, 2 stars out of 108 funds and 2 stars out of 91 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Overall Rating Load-Waived

As of 6/30/2015 the Fund was rated 3 stars out of 117 funds, 2 stars out of 108 funds and 2 stars out of 91 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.

Investors should carefully consider the investment objectives, risks, charges and expenses of any Virtus Mutual Fund before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 1-800- 243-4361 or visit www.virtus.com to obtain a current prospectus and/or summary prospectus. You should read the prospectus and/or summary 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.

Average annual total return is the annual compound return for the indicated period. It reflects the change in share price and the reinvestment of all dividends and capital gains. NAV returns do not include the effect of any applicable sales charges. POP and w/CDSC returns include the effect of maximum applicable sales charges.

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

1 Yields/Distributions: Distribution Yield (at NAV) is calculated by (a) annualizing the latest distribution for fixed income funds or funds less than 1 year old (b) summing all distributions over the preceding 12 months for all other funds, and dividing the NAV on the last business date of the period. SEC Yield represents the net investment income earned by a fund over a 30-day period, expressed as an annual percentage rate based on the fund's public offering share price at the end of the 30-day period.  Gross SEC Yield represents the yield if there were no expense reimbursements.

2 Distribution History: 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. STCG: Short Term Capital Gain, LTCG: Long Term Capital Gain

3 Risk Statistics:  R2 is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. Beta is a quantitative measure of the volatility of a given portfolio to the overall market. Alpha is a risk adjusted measure of an investment's excess return relative to a benchmark. A positive Alpha indicates that the investment produced a return greater than expected for the risk (as measured by Beta) taken. Standard Deviation measures variability of returns around the average return for an investment fund. Higher standard deviation suggests greater risk. Risk Statistics are calculated using 36 monthly returns.

4 Characteristics: For Equity Funds:Trailing P/E: Per-share stock price divided by the latest12-months Earnings per Share; Price/Cash Flow: Per-share stock price divided by the per-share operating cash flow; Price/Book: Per-share stock price divided by the latest 12-month per-share Book Value; 3-Year EPS Growth Rate: Average of earnings per share growth for latest 3-year period. The 3-Year EPS Growth Rate is not a forecast of the fund's performance.

4 Characteristics: For Fixed Income Funds:  Duration represents the interest rate sensitivity of a fixed income fund. For example, if a fund's duration is five years, a 1% increase in interest rates would result in a 5% decline in the fund's price. Similarly, a 1% decline in interest rates would result in a 5% gain in the fund's price.



Morningstar Disclosures: 
For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for a variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in an investment category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. Ratings are for the A Shares as shown only; other share classes bear different fees and expenses, which affect performance.

Load-waived A share star ratings do not include any front-end sales load and are intended for those investors who have access to such purchase terms (e.g., plan participants of a defined contribution plan). Not all A share mutual funds for which Morningstar calculates a load-waived A share star rating may actually waive their front-end sales load. Therefore, Morningstar strongly encourages investors to contact their investment professional to determine whether they are eligible to purchase the A share without paying the front load.

© 2013 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.