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Mutual Fund Fixed Income Multi-Sector

Virtus Newfleet Core Plus Bond Fund

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$ (as of )
Total Assets by Class
$38,513,146.27 (as of 04/15/2024)
Total Assets by Fund
$264,118,809.22 (as of 04/15/2024)
Morningstar Category
Intermediate Core-Plus Bond

Portfolio Overview

Investment Overview

The Fund seeks to generate total return from both current income and capital appreciation by investing primarily in higher-quality intermediate-term debt securities across 14 global bond sectors. A disciplined, time-tested investment process and rigorous risk management approach aim to capitalize on opportunities across undervalued areas of the fixed income markets.

Management Team

Investment Partner

Newfleet Asset Management

Newfleet Asset Management 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.

Newfleet Asset Management is a division of Virtus Fixed Income Advisers, LLC ("VFIA"), an SEC registered investment adviser.

Learn more about Newfleet Asset Management

Investment Professionals

David Albrycht - 400x400

David L. Albrycht, CFA

President and Chief Investment Officer

Industry start date: 1985
Start date as fund Portfolio Manager: 2012

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Stephen Hooker

Stephen H. Hooker, CFA

Managing Director and Portfolio Manager

Industry start date: 1993
Start date as fund Portfolio Manager: 2017

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Key Features

Broad Fixed Income Exposure

Highly diversified, duration-neutral core plus bond allocation, primarily focused on higher-quality, more liquid securities

Relative Value Focus

Top-down analysis weighs relative attractiveness of 14 global bond sectors, evaluating fundamentals, yields, spreads, and supply/demand dynamics

Extensive Fundamental Research

Security selection driven by bottom-up analysis of individual bond quality, credit risk, valuation, company management, structure, and technical elements

Portfolio Characteristics


(as of 03/28/2024)
Effective Duration (years) 6

Top Holdings (% Fund)

(as of 03/28/2024)
United States Treasury Note/Bond, 4.2500% 02/15/2054
United States Treasury Note/Bond, 4.7500% 11/15/2053
United States Treasury Note/Bond, 3.6250% 05/15/2053
United States Treasury Note/Bond, 4.1250% 08/15/2053
United States Treasury Note/Bond, 4.0000% 02/15/2034
Freddie Mac Pool, 5.5000%
Freddie Mac Pool, 6.0000%
United States Treasury Note/Bond, 4.0000% 11/15/2052
United States Treasury Note/Bond, 3.0000% 08/15/2048
United States Treasury Note/Bond, 3.3750% 05/15/2033

Holdings are subject to change.

Sector Allocation (% Fund)

(as of 03/28/2024)
Corporate - High Quality
Non-Agency Residential MBS
Asset Backed Securities
Bank Loans
Mortgage Backed Securities
Corporate - High Yield
Non-Agency Commercial MBS
Yankee - High Quality
Emerging Market - High Yield
Taxable Municipals

Performance & Risk

Growth of $10,000 Investment

From to
This chart assumes an initial investment of $10,000 made on for Class ddd shares including any applicable sales charges. Performance assumes reinvestment of dividends and capital gain distributions.


As of
As of

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.

Sales Charge and Expenses

The Index shown represents the Fund's performance index, which may differ from the Fund's regulatory index included in the Fund's Prospectus.

Yields / Distributions1

(as of )
30-day SEC Yield
30-day SEC Yield (unsubsidized)
Distribution Rate (at NAV)
Income Distributions Current Month
Income Distributions YTD

Distribution History2

(as of )
Reinvest NAV

Risk Statistics3

(as of )
Fund Index
Std Dev

Risk Considerations

Credit & Interest: Debt instruments are subject to various risks, including credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt instruments 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 non-repayment of underlying collateral, including losses to the portfolio.
High Yield Fixed Income Securities: There is a greater risk of issuer default, less liquidity, and increased price volatility related to high yield securities than investment grade securities.
Bank Loans: Bank loans may be unsecured or not fully collateralized, may be subject to restrictions on resale, may be less liquid and may trade infrequently on the secondary market. Bank loans settle on a delayed basis; thus, sale proceeds may not be available to meet redemptions for a substantial period of time after the sale of the loan.
Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk.
Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the portfolio, including hampering the ability of the portfolio's manager(s) to invest its assets as intended.
Prospectus: For additional information on risks, please see the fund's prospectus.



Market Review

2023—the recession that never was. Few economists or strategists saw 2023 playing out the way it did in financial markets and the fourth quarter of the year did not disrupt that narrative. While economies slowed around the globe and geopolitical events remained top of mind, central bankers appeared close to declaring victory over the inflation that has ravaged the landscape since the COVID-19 pandemic. The U.S., in particular, has defied expectations for an economic slowdown and a more meaningful increase in the unemployment rate following 11 increases in Fed Funds for a total of 525 basis points (bps) since March of 2022. The consensus is that the Fed has pulled off the elusive “soft landing.” As this consensus built over the course of the quarter, financial markets responded in kind with rallies in risk assets as well as risk-free rates. We are optimistic that we have seen the peak in interest rates this cycle, but caution that the impact of monetary policy acts on the economy with variable lags and unpredictability, so we will be paying close attention to the incoming data in the weeks and months ahead.

Meanwhile, the ever-evolving situation with Russia and Ukraine was superseded by the October 7th terrorist attack in Israel and the associated response by the Israeli government during the quarter. Any further escalation of the conflict could prove disruptive to the improving global inflation picture. Though the geopolitical environment remains complicated and difficult to forecast, most disruptions tend to be absorbed over relatively short time periods. Political activity will ramp as we enter 2024, with research from Wall Street highlighting that 2024 will see the largest proportion of the world population in history head to the polls.

Financial market performance was strong during the quarter. We have seen significant progress on headline inflation readings as supply chains healed, demand shifted from goods to services, and energy prices rebalanced. Core readings of inflation, while still stubbornly above targets, are annualizing towards levels that are consistent with central bank goals. 2024 seems likely to deliver the first interest rate cuts from policymakers across developed markets, though they will likely be desynchronized. The Federal Reserve’s (Fed’s) latest summary of economic projections still shows meaningful deviation from market expectations for the timing and magnitude of rate cuts next year. All of the above will likely create interesting investment opportunities for investors in coming quarters. With the positive tone in both risk- and risk-free assets, fixed income sectors had positive total returns in the fourth quarter. Spread sectors outperformed U.S. Treasuries and spreads tightened. Within spread sectors, longer duration and risk asset classes outperformed. The U.S. Treasury curve shifted lower during the quarter. The 2-year Treasury yield decreased 80 bps, the 5-year Treasury yield decreased by 76 bps, the 10-year Treasury yield decreased by 69 bps, and the 30-year Treasury yield moved 67 bps lower.

We continue to see value being restored across most of the fixed income sectors in which we invest. Yields remain elevated and bond prices are broadly discounted. We expect the Fed will be successful in returning inflation to acceptable levels over time. We continue to watch data releases to inform our views on the global economic trajectory.

How the Fund Performed

The Fund (Class I) returned 6.33% in the fourth quarter versus the U.S. Bloomberg Aggregate Bond Index return of 6.82%.

The Fund’s underweight to U.S. Treasuries had a positive impact during the period as most spread sectors outperformed during the quarter. While credit spreads had been grinding tighter with economic data that was consistent with a soft landing, the pace of tightening accelerated following the Federal Reserve's mid-December meeting commentary citing that more tightening might not be needed due to easing inflation and slowing growth. The Fund’s allocation to corporate high yield (CPHY) had a positive effect on performance during the period as risk assets rallied. Allocation to and positioning within EM high yield had a positive impact on performance. Within EM, high yield outperformed investment grade during the period. The drivers are still very much macro in nature and centered on the Federal Open Market Committee’s inflation-fighting path, global growth, and geopolitics.

The Fund’s shorter duration relative to the benchmark had a negative impact on performance during the period with the outperformance on the longer end of longer duration assets. Allocation to the asset-backed security sector had a negative impact on performance in the fourth quarter. Fundamentals are positive with a low unemployment rate of 3.9%, close to 9 million job openings, historically high savings and checking account balances and strong compensation growth. Credit spreads tightened across securitized products during the period, though securitized product did not keep pace with investment grade corporate debt. Historically, securitized product lags investment grade credit in a widening or tightening event. The asset class remains attractive versus investment grade corporate alternatives. Allocation to non-agency residential mortgage-backed securities (RMBS) over agency mortgages (MBS) and positioning within the RMBS sector had a negative impact on performance during the quarter as RMBS underperformed given the tremendous rate rally and the longer duration nature of MBS. We continue to prefer non-agency residential exposure as credit performance remains stable, prepayments stay muted, and credit spreads are still wide of averages. With higher mortgage rates and a subsequent fall in housing activity, we see solid fundamental and technical backdrops. While the allocation to the CPHY sector had a positive impact on performance, CPHY issue selection was negative.

Current Fund Strategy and Positioning

Increased exposure to U.S Treasuries, RMBS, and CPHY. Reduced exposure to investment grade corporates and cash. In addition to changes to the Fund’s sector allocation during the quarter, we continue to optimize positioning within sectors based on our view of the best relative value.

EM Debt and Non-U.S. Exposure: EM had a rocky start to the fourth quarter. Weakness spilled over from the end of September, and then on October 7, the Israel-Hamas conflict began with Hamas terrorists entering Israel, taking hostages, and inflicting mass casualties on the civilian population. Higher Treasury yields prompted the underperformance of the investment grade space in EM relative to its high yield counterpart. However, by the end of the month, the sentiment had turned, U.S. Treasuries rallied, and EM followed suit. With more data indicating the FOMC has finished raising rates, softer landing scenarios for 2024 seemed more attainable and risk caught a bid. Also in October, the U.S. lifted several sanctions on Venezuela, including the ban on secondary trading, resulting in a massive rally in Venezuela and Petróleos de Venezuela, S.A. bond prices, which in aggregate were up 99% for the month. Investment Grade Corporates: The fourth quarter of 2023 was one of the strongest quarters on record, with 8.5% total returns for the investment grade market as spreads compressed 22 bps to 98 bps while yields fell from over 6% to closer to 5%. All industries were tighter with little differentiation by industry. Financials remain near historical wides relative to industrials and managed slight outperformance during this rally. Fundamentals are stable and technicals are strong. Long-dated industrials have extremely high demand with low supply - those are trading at their post-Global Financial Crisis tights. Valuations are the bottleneck in an otherwise positive outlook; the market is priced for a very favorable macroeconomic outcome. Ford was upgraded by S&P in late October, becoming the largest rising star on record with over $40 billion of debt outstanding. Walgreens was the most notable fallen angel of the quarter. For the full year, rising stars eclipsed $120 billion versus $21 billion of fallen angels. We see buying opportunities in banking and utilities, both of which have lagged. An overweight to BBB-rated bonds remains prudent, especially considering the pace of ratings improvements within that category. Corporate High Yield: High yield markets returned 13.4% for 2023. The fourth quarter was strong, with the combination of falling Treasury yields and declining credit spreads leading to over 7.1% in total returns. Credit spreads have tightened 73 bps during the quarter to +323 bps, a new low for the year. All industries were positive during the quarter, and while the market exhibits strong leverage metrics, they are starting to roll over as EBITDA growth has slowed. Interest coverage will continue to decline as low coupon debt is refinanced. If the decline in spreads and U.S. Treasury rates hold, the impact will be much more muted than expected a few months ago. Technicals are very favorable due to continued low levels of issuance, seven straight weeks of inflows, and bonds migrating to investment grade. We expect a meaningful pickup in bonds being called in 2024 given the maturities of most holdings and an expectation that issuers will get aggressive in pushing out maturities at these spread and Treasury rate levels. This should help performance, as many of these bonds still trade below par and may exhibit a similar dynamic to the IEP bond whose call was announced a few weeks ago. Securitized: Total returns for all securitized markets were positive for the quarter. Spreads for the asset class were marginally tighter versus U.S. Treasuries, thus generating positive excess returns versus risk-free assets. A dovish tone in the rates market was apparent due to declining inflation data and an increasing likelihood of a soft economic landing. In turn, our investments within consumer and credit-sensitive sectors continued to perform well versus alternatives. As in the third quarter, we continued to invest our marginal dollars into the more conservative parts of the capital structure as we get longer into the economic cycle. We maintained our overweight in ABS and RMBS as fundamentals and technical factors were both tailwinds for performance. As the slow repricing within the commercial real estate market continues, we judiciously added to our CMBS exposure via the new issue market. Lastly, we modestly increased our exposure to the agency MBS market as spreads remained wide to long-term averages versus their corporate investment grade counterparts. In our view, agency MBS affords our portfolios liquidity with attractive yields.


Our multi-sector relative value approach enables us to take advantage of opportunities when events that trigger volatility, such as inflation worries or geopolitical concerns, affect valuations. In the current environment, we believe some of the best total return and yield opportunities can be found in spread sectors. However, given the risk of a possible recession and spreads largely pricing in a soft landing, the Fund’s exposure to spread sectors that would typically be more negatively impacted, such as corporate high yield and emerging markets, are below long-term averages. Credit selection and positioning remain key. Specific sectors that demonstrate the best relative value for us include out-of-index/off-the-run ABS, non-agency RMBS, and the BBB-quality tier within corporate investment grade.


The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.

Related Literature

Marketing Materials

Virtus Newfleet Core Plus Bond Fund Fact Sheet
Virtus Newfleet Core Plus Bond Fund Enhanced Fact Sheet
Morningstar - Quarterly Ratings
Virtus Core and Core Plus Bond Funds Flyer
Braving the New World of Bonds
Newfleet Fixed Income Fund Capabilities
Is It Time to Start Adding Duration?
A Multi-Sector Approach to Core Plus Fixed Income
Newfleet 2024 Fixed Income Market Outlook
Newfleet Market Review & Outlook - Multi Sector

Financial Materials

Virtus Opportunities Trust Statutory Prospectus
Virtus Newfleet Core Plus Bond Summary Prospectus
Virtus Opportunities Trust SAI
Virtus Opportunities Trust Annual Report
Virtus Opportunities Trust Semiannual Report - Fixed Income Funds


Virtus Newfleet Core Plus Bond Fund - Monthly Update
Virtus Newfleet Core Plus Bond Fund Quarterly Holdings
Virtus Newfleet Core Plus Bond Fund Top Holdings
Virtus Newfleet Core Plus Bond Fund Holdings Fiscal Q1
Virtus Newfleet Core Plus Bond Fund Holdings Fiscal Q3

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 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: 30-day SEC Yield is a standardized yield calculated according to a formula set by the SEC, and is subject to change. 30-day SEC Yield (unsubsidized) is the 30-day SEC Yield without the effect of applicable expense waivers. Distribution Rate is calculated by (a) annualizing the latest income distribution for fixed income funds or funds less than 1 year old, or (b) summing all income distributions over the preceding 12 months for all other funds, and dividing by the NAV on the last business date of the period, unless otherwise indicated. The Distribution Rate may be comprised of ordinary income, net realized capital gains and returns of capital.

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: Avg. Weighted Market Cap (bn): The sum of each security's weight within the fund (or index) multiplied by the security's market capitalization. Trailing P/E Ex-Negative Earnings: Per-share stock price divided by the latest 12-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: Effective Duration represents the interest rate sensitivity of a fixed income fund. For example, if a fund's effective 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:
The Morningstar Rating for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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 managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.

© year 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.