Understanding Virtus Equity & Convertible Income Fund Distributions

Discerning Distribution Sources of Virtus Equity & Convertible Income Fund

HARTFORD, Conn. – Virtus Equity & Convertible Income Fund (NYSE: NIE) is committed to providing consistent distribution levels through its Managed Distribution Plan. This plan outlines how distributions may be funded through net investment income, realized capital gains, or a combination of both methodologies.

Quarterly Distribution Announcement

Recently, the Fund announced a quarterly distribution amounting to $0.50. This distribution is vital for shareholders to monitor as it reflects the fund's ongoing financial commitments and investment strategies.

Managed Distribution Plan Overview

The Managed Distribution Plan aims to maintain an equitable distribution level. Shareholders should remain aware that in instances where the Fund's aggregate net investment income and net realized capital gains do not meet the distribution level, the remaining funds will derive from the Fund’s assets, effectively returning some of the capital to the shareholders. This aspect ought to be evaluated in relation to investment performance as the distribution amount may not align directly with revenue or gains.

Understanding Returns of Capital

It is also essential for shareholders to comprehend that a portion of the distribution may be classified as a return of capital. This generally signifies that some of the initial investment principal is being returned, which should not be interpreted as income generated by the Fund's investments. The return of capital does not signify that the Fund is underperforming; rather, it shows that the Fund is attempting to sustain its distribution commitments despite fluctuations in income.

Distribution Source Estimates for December

To provide clarity, the Fund has released updated estimates regarding its distribution sources for the recent quarter of December 2024. Understanding these factors allows investors to assess the health of their investment more effectively. Below is a summary of estimates:

Distribution Source Estimates:

• Net Investment Income: $0.0 (0%)
• Net Realized Short-Term Capital Gains: $0.500 (100%)
• Net Realized Long-Term Capital Gains: $0.0 (0%)
• Return of Capital: $0.464 (23.2%)

Overall, the total distribution amount remains at $0.500, indicating the sources that constitute the recent distribution and the extent to which returns of capital impact overall yield and performance expectations. Understanding these figures helps investors gauge how the used capital sources might influence their financial outcomes.

Performance Metrics

The Fund places significant emphasis on its performance metrics, which are grounded on the net asset value (NAV) rather than market prices. The performance of the Fund is encapsulated in several key figures:

• Average Annual Total Return on NAV for 5-Year Period: 12.31%
• Annualized Current Distribution Rate: 7.45%
• Fiscal YTD Cumulative Total Return on NAV: 19.68%
• Fiscal YTD Cumulative Distribution Rate: 7.45%

These statistics provide insights into the investment performance of the Fund, essential for the evaluation of its success over the years.

Tax Implications and Reporting

It’s critical for investors to recognize that the estimated amounts and sources of distributions discussed are merely projections and do not serve for tax reporting initially. Final figures and sources will rely heavily on the Fund’s investment performance throughout the fiscal year, with tax regulations possibly influencing adjustments. Shareholders will receive Form 1099-DIV detailing what must be reported for federal income tax purposes at year's end.

About Virtus Equity & Convertible Income Fund

Virtus Equity & Convertible Income Fund is a diversified closed-end fund characterized by its investment focus, primarily seeking total return through capital appreciation combined with current income generation from equity and convertible securities. Under standard operational procedures, the Fund will invest at least 80% of its net assets in these investment vehicles. Virtus Investment Advisers, Inc. oversees the Fund's investment strategies, ensuring administration aligns with investor interests.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NYSE: VRTS) brings together boutique investment managers who are deeply committed to serving both individual and institutional investors. Their investment solutions span across a range of types and strategies catering to diverse investment needs, ensuring that clients have access to expert management enhanced by the collaboration of various investment partners.

Frequently Asked Questions

What is the Virtus Equity & Convertible Income Fund's ticker symbol?

The ticker symbol for the Virtus Equity & Convertible Income Fund is NYSE: NIE.

How often does the Fund provide distributions?

The Fund typically provides distributions quarterly, reflecting its distribution plan.

What is the significance of a return of capital?

A return of capital indicates that the distribution includes a portion that represents the return of the initial investment rather than income generated from investments.

What factors influence the Fund's performance metrics?

The Fund's performance metrics are influenced by the net asset value (NAV), market performance, and operational decisions made by the fund managers.

How will I receive tax information regarding my distributions?

Shareholders will receive a Form 1099-DIV detailing the distributions for tax reporting at the end of the fiscal year.

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