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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
$28,862,925.94 (as of 03/30/2023)
Total Assets by Fund
$94,805,606.27 (as of 03/30/2023)
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, CFA

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 12/30/2022)
Effective Duration (years) 5.79

Top Holdings (% Fund)

(as of 12/30/2022)
United States Treasury Note/Bond, 3.0000% 08/15/2048
Metropolitan Transportation Authority, 5.0000% 11/15/2045
United States Treasury Note/Bond, 2.2500% 02/15/2052
United States Treasury Note/Bond, 2.3750% 02/15/2042
New York State Environmental Facilities Corp, 5.0000% 06/15/2051
United States Treasury Note/Bond, 1.5000% 02/15/2030
Broward County FL Water & Sewer Utility Revenue, 4.0000% 10/01/2047
United States Treasury Note/Bond, 1.8750% 02/15/2051
United States Treasury Note/Bond, 0.6250% 12/31/2027
United States Treasury Note/Bond, 2.8750% 05/15/2052

Holdings are subject to change.

Sector Allocation (% Fund)

(as of 12/30/2022)
Corporate - High Quality
Non-Agency Residential MBS
Asset Backed Securities
Corporate - High Yield
Bank Loans
Non-Agency Commercial MBS
Yankee - High Quality
Taxable Municipals
Emerging Market - High Yield
Mortgage Backed Securities

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

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. Price changes may be short- or long-term. Local, regional, or global events such as war or military conflict (e.g., Russia's invasion of Ukraine), acts of terrorism, the spread of infectious illness (e.g., COVID-19 pandemic) or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the ability of the portfolio's manager(s) to invest the portfolio's assets as intended.
Prospectus: For additional information on risks, please see the fund's prospectus.



Market Review

The final quarter of 2022 saw a recurrence of negative macro themes that dominated this year: inflation, geopolitical tensions, China’s COVID policy, and an uncertain growth outlook. However, we may be starting to see the first signs of green shoots. Global central banks moved policy rates higher during the quarter amid consistent messaging on their efforts to return inflation levels to target. The market’s debate on central bank policy is now focused on the pace of rate increases, the ultimate terminal rate, and how long it stays at that level. A few bright spots of economic data released during the quarter – including U.S. CPI – implied inflation may have peaked, leading markets to expect friendlier central bank policy going forward. As a result, most risk assets have rebounded during the period.

Despite some signs of improvement in the inflation outlook, the Fed and other major central banks maintained a hawkish tone. The Fed raised its main policy rate 125 basis points (bps) during the quarter in two jumbo moves of 75 bps and 50 bps. We end 2022 with the federal funds rate at 4.5% versus 0.25% when we began. The Fed continues to shrink its balance sheet in a well-telegraphed and substantially passive exercise, and we do not expect changes to this policy in the near term.

The European Central Bank (ECB) also raised its policy rate 125 bps over two meetings to end the year at 2.5% − 2022 saw the ECB’s first increases off zero since 2016. In addition to managing the start of its own balance sheet run-off, the ECB will have to manage the complex task of preventing financial fragmentation among its member countries. Though the Bank of Japan (BOJ) is still a relative dove given local economic conditions, it announced a change in its yield curve control that would permit a rise in the 10-year yield from 25 bps to 50 bps. Global central banking has a complicated task ahead, but we are confident in its ability to contain inflation and return price pressures to target over time.

Financial markets have begun to expect positive changes to monetary policy in 2023, and this was reflected in total returns during the period. The U.S. Treasury curve shifted higher on maturities inside of two years and longer than ten years, with yields in the belly of the curve declining: the 1-year Treasury yield increased 72 bps, the 5-year Treasury yield fell by 9 bps, the 10-year Treasury yield increased by 5 bps, and the 30-year Treasury yield moved 19 bps higher. Most spread sectors outperformed U.S. Treasuries with the shifting economic conditions.

Despite the quarter’s volatility, we see value being restored across most of the fixed income sectors in which we invest. We expect supply chains will heal over time and the Fed will be successful in returning inflation to acceptable levels. We continue to watch the economic data to inform our views on the possibility of recession. While our base case is still that any contraction would be mild, recession risks have risen. As the markets digest global developments, we continue to believe active sector and issuer selection is critical to take advantage of market volatility as it arises. Our approach to fixed income – the approach we have implemented for over three decades – enables us to scan the bond market for the most attractive investment opportunities and is ideally suited for the current environment.

How the Fund Performed

The Fund (Class I, Accumulating) returned 1.63% in the fourth quarter versus the U.S. Bloomberg Aggregate Bond Index return of 1.87%.

An underweight to U.S. Treasuries contributed to performance as most spread sectors outperformed Treasuries due to lower-than-expected inflation data. Allocation and issue selection within corporate high yield had a positive impact on performance. A supportive technical environment, along with better-than-expected inflation data and third quarter earnings results, drove outperformance.

Issue selection within corporate investment grade had a positive impact on performance. Investment grade staged a rally in the quarter, clawing back nearly 4% of its YTD performance, though the sector still posted record annual losses. Yields, spreads, prices, and returns all pulled back from the tail end of the distribution on a confluence of favorable inflation data, resilient company earnings, and improving sentiment for the asset class. Issue selection within high yield bank loans had a positive impact on performance. As investor angst increases around slowing growth and its impact on credit markets, our current up-in-quality position has performed well.

Conversely, the Fund’s allocation to non-agency residential mortgage-backed securities (RMBS) over agency mortgage-backed securities (MBS) had a negative impact on performance. Agency MBS outperformed as the market reacted positively to the softer-than-expected CPI report, causing a grab for yield. We continue to prefer non-agency residential exposure as credit performance is still stable, prepayments are muted, and spreads are still wide versus alternative fixed income sectors. Finally, allocation to asset-backed securities (ABS) had a negative impact on performance during the quarter. The primary drivers were modest spread underperformance relative to most other fixed income sectors, and U.S. Treasury underperformance on the short end of the curve. The spread widening was due to some softening in consumer fundamentals. However, low unemployment and a high number of job openings mitigate the effects of higher rates on the consumer.

Current Fund Strategy

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

EM Debt and Non-U.S. Exposure: Our exposure was slightly higher during the quarter, with high yield EM outperforming investment grade. While we feel as though USD strength has peaked, we have not yet added non-USD exposure to the Fund. Our exposure to EM has stayed at historically low levels. Investment Grade Corporates: After declining more than 20% at the lows, the investment grade market rallied in the fourth quarter, with total returns of 3.63%. The full year total return of -15.76% is still the worst on record. Spreads rallied 25 bps up to the 130s, a level that hits the 75th percentile over a five-year range, but just 10 bps north of the five-year average. Yields are still at post-Global Financial Crisis (GFC) highs, though they compressed more than 80 bps off the YTD highs. As fundamentals improved throughout the post-COVID period and interest coverage levels stay at decade highs, we are constructive on the asset class. Higher rates will have minimal immediate impact to issuer fundamentals because the average maturity is over eleven years in length. We are overweight financials and commodities and find banks to be the most attractive industry. We are also overweight BBB-rated bonds because we are constructive on the market's fundamentals, and view fallen angel risk as broadly low. Corporate High Yield: The high yield market rallied over 4% during the quarter as spreads tightened over 80 bps. Better-than-expected inflation data was the primary driver of the rally. Third quarter results also came in better than expected, and fundamentals are in a strong starting point ahead of this year’s projected slowdown in growth. Lastly, the technical environment has improved – issuance was light again for the quarter while fund flows improved, leading to a net negative supply. During the quarter, we trimmed exposure to corporate high yield as valuations tightened; we still view its downside risks as being greater than its upside potential at current valuations. Within the space, most purchases were via the new issue market, where concessions are still elevated. We trimmed some lower-quality energy exposure during the quarter following strong outperformance. Our allocation is still below our long-term average. Securitized: All securitized sectors saw positive returns, driven by the rate rally and tighter credit spreads. We still see yield opportunities not seen in many years. In the near term, low unemployment, strong consumer savings, and real wage growth suggest that the U.S. consumer will stay timely with its debt service payments. However, we are selective with our transactions, as we believe unemployment will tick higher, which may result in higher consumer delinquencies. On the mortgage side, delinquencies are at historical lows, with limited to no affordability products compared to the market in the last housing crisis. With higher mortgage rates and a subsequent fall in housing activity, we will see less supply for the new year. This should set up a favorable technical for the mortgage-backed securities market. As a result, our portfolios have an overweight to the sector.


Our multi-sector relative value approach enables us to take advantage of opportunities when events that trigger volatility, such as inflation worries or the Russian invasion of Ukraine, 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 increased risk of a recession, we have reduced some exposure to spread sectors that would typically be more negatively impacted, such as corporate high yield and bank loans. 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
  • 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 - R6
Virtus Newfleet Core Plus Bond Fund Fact Sheet - A
Virtus Newfleet Core Plus Bond Fund Fact Sheet - I
Virtus Newfleet Core Plus Bond Fund Enhanced Fact Sheet
Newfleet Monthly Sector Review
Braving the New World of Bonds
Morningstar - Quarterly Ratings
Newfleet Fixed Income Fund Capabilities
Newfleet Market Review & Outlook
Newfleet 2023 Fixed Income Market Outlook


Mutual Fund Distributions

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


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.

© 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.