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Mutual Fund Fixed Income Leveraged Finance

Seix High Yield Income

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Ticker
AYBAX
CUSIP
92838V858
POP
$ (as of )
Inception
04/12/2010
Total Assets by Class
$14,481,940.91 (as of 08/15/2022)
Total Assets by Fund
$36,446,184.86 (as of 08/15/2022)
Morningstar Category
High Yield Bond

Portfolio Overview

Investment Overview

The Fund seeks a high level of current income and capital growth by investing in U.S. corporate bonds that have a credit rating below-investment-grade levels or are unrated and determined to be of similar quality.

Effective July 25, 2022, this Fund's name and subadviser have changed.

Management Team

Investment Partner

Seix Investment Advisors

Seix Investment Advisors is an investment management boutique focused exclusively on managing fixed income securities since 1992. Seix seeks to generate competitive absolute and relative risk-adjusted returns over the full market cycle through a bottom-up focused, top-down aware process. Seix employs multi-dimensional approaches based on strict portfolio construction methodology, sell disciplines and trading strategies with prudent risk management as a cornerstone.

Seix Investment Advisors is a division of Virtus Fixed Income Advisers, LLC ("VFIA"), an SEC registered investment adviser.


Learn more about Seix Investment Advisors

Investment Professionals

Michael Kirkpatrick - 400x400

Michael Kirkpatrick

Managing Director, Senior Portfolio Manager

Industry start date: 1991
Start date as fund Portfolio Manager: 2022

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James FitzPatrick

James FitzPatrick, CFA

Managing Director, Head of Leveraged Finance Trading, Portfolio Manager

Industry start date: 1996
Start date as fund Portfolio Manager: 2022

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Key Features

Risk Management

Targets below-investment-grade corporate bonds that demonstrate improving fundamentals in order to pursue higher income and returns

Strives to Minimize Credit Risk

Employs a disciplined, fundamental, bottom-up research process to identify issuers that are poised to benefit from positive change and exhibit high operating performance, which may help the Fund avoid defaults and target upgrade candidates

Diversification

High yield bonds may offer minimal correlation to investment grade fixed income sectors and only modest correlation to equities

Portfolio Characteristics

Top Holdings (% Fund)

(as of 06/30/2022)
Security
LiveStyle Inc. Series B Preferred
4.38
 4.38%
Caesars Entertainment Inc, 8.1250% 07/01/2027
2.00
 2.00%
Royal Caribbean Cruises Ltd, 11.5000% 06/01/2025
1.40
 1.40%
Ford Motor Co, 9.6250% 04/22/2030
1.23
 1.23%
CCO Holdings LLC / CCO Holdings Capital Corp, 5.3750% 06/01/2029
1.04
 1.04%
Goodyear Tire & Rubber Co/The, 9.5000% 05/31/2025
1.03
 1.03%
Post Holdings Inc, 5.5000% 12/15/2029
1.03
 1.03%
WESCO Distribution Inc, 7.2500% 06/15/2028
1.02
 1.02%
CCF Holdings LLC
1.02
 1.02%
Carnival Corp, 10.5000% 02/01/2026
1.02
 1.02%

Holdings are subject to change.

Top Five High Yield Sectors (% Fund)

(as of 06/30/2022)
Energy
13.73
 13.73%
Healthcare
8.65
 8.65%
Services
8.55
 8.55%
Diversified Financial Services
5.79
 5.79%
Entertainment & Film
5.36
 5.36%

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.

Performance

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 )
Ex-Date
Income
STCG
LTCG
Reinvest NAV

Risk Statistics3

(as of )
Fund Index
R2
Beta
Alpha
Std Dev

Risk Considerations

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 (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.
Issuer Risk: The portfolio will be affected by factors specific to the issuers of securities and other instruments in which the portfolio invests, including actual or perceived changes in the financial condition or business prospects of such issuers.
Interest Rate: The values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be enhanced for securities with longer maturities.
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.
Counterparties: There is risk that a party upon whom the portfolio relies to complete a transaction will default.
Credit Risk: If the issuer of a debt instrument fails to pay interest or principal in a timely manner, or negative perceptions exist in the market of the issuer's ability to make such payments, the price of the security may decline.
Prospectus: For additional information on risks, please see the fund's prospectus.

Commentary

z - Cover Image: Virtus High Yield Bond Fund Commentary
Virtus High Yield Bond Fund Commentary
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 Seix High Yield Income Fund Fact Sheet - A
Virtus Seix High Yield Income Fund Fact Sheet - INST
Virtus High Yield Bond Fund Commentary
Addressing Sequence of Return Risk

Distributions

Mutual Fund Distributions

Financial Materials

Virtus Strategy Trust Statutory Prospectus
Virtus Seix High Yield Income Fund Summary Prospectus
Virtus Strategy Trust SAI
Virtus Strategy Trust Annual Report
Virtus Strategy Trust Semiannual Report

Holdings

High Yield Bond Holdings Monthly
Virtus Seix High Yield Income Fund Top Holdings
Virtus AllianzGI High Yield Bond Fund Holdings Fiscal Q1
Virtus AllianzGI High Yield Bond Fund Holdings Fiscal Q3

Section 19(a) Notices

Virtus High Yield Bond Fund SEC 19(a) Notice - 2021

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 total dollar market value of all of a company’s outstanding shares. 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.