Virtus Equity & Convertible Income Fund Announces Special Year-End Distribution and Discloses Sources of Distribution - Section 19(a) Notice
MWN-AI** Summary
The Virtus Equity & Convertible Income Fund (NYSE: NIE) has announced a special year-end distribution of $0.526 per share, payable on January 9, 2026. This distribution comes on top of the regular quarterly payment of $0.50, which is scheduled for December 30, 2025. The fund is making this special distribution to address specific federal tax requirements.
As part of its Managed Distribution Plan, the Fund aims to provide consistent returns to its shareholders through a combination of net investment income and realized capital gains. For December 2025, the distribution estimates reveal that a significant portion, 94%, of the special year-end distribution will originate from net realized short-term capital gains, while the remaining 6% will come from net investment income. The Fund also provided year-to-date figures, indicating that long-term capital gains contributed 49.6% of the distributions made so far this fiscal year.
The Fund's average annual total return on net asset value (NAV) over the past five years stands at 9.51%, with an annualized distribution rate of 7.00%. For the fiscal year to date, the cumulative total return is 14.28%, and the cumulative distribution rate is 8.84%. It's important to note that returns from these distributions do not directly reflect individual shareholder performance.
As a diversified closed-end fund, Virtus Equity & Convertible Income Fund primarily invests in equity securities and income-producing convertible securities to achieve a total return. Investors should be aware that distributions reported are estimates and subject to revisions based on the Fund's performance and relevant tax regulations. For more information, stakeholders can contact Virtus Shareholder Services or visit the Fund's website.
MWN-AI** Analysis
The recent announcement from Virtus Equity & Convertible Income Fund (NYSE: NIE) regarding a special year-end distribution of $0.526 per share, in addition to the regular distribution, indicates a proactive approach to managing federal tax requirements. This move reflects a commitment to providing shareholders with steady income, but it also necessitates prudent consideration for prospective investors.
First, it is essential to analyze the sources of this distribution. Of the special year-end payment, a significant 94% is derived from net realized short-term capital gains, implying that the fund has captured profitable trades during the year, potentially indicating a favorable market environment. Conversely, the absence of net investment income contributing to this distribution raises questions regarding sustainability. Continuous reliance on capital gains for distributions can be a double-edged sword, particularly in volatile markets.
For investors contemplating entry, the Fund's average annual total return on NAV over five years is 9.51%, coupled with a current distribution rate of 7.00%. These figures may appear attractive; however, it is critical to remember that such returns are not guaranteed and should be analyzed alongside market conditions. The Fund has acknowledged that if its net income falls short of distribution requirements, returns may come from shareholders’ capital—an indication of risk that investors should factor into their decision-making.
Given the Fund's investment strategy focusing on equity and convertible securities, market dynamics, such as interest rate fluctuations and equity market performance, will significantly impact its future distributions and NAV.
Investors looking to enter this fund should assess their income requirements against the fund’s risks and distribution sourcing strategy, considering both the fund's performance history and the economic landscape to make informed decisions.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Virtus Equity & Convertible Income Fund (NYSE: NIE) today announced the following special year-end distribution to holders of its common shares.:
Ticker | Amount of Distribution | Ex-Date/Record Date | Payable Date |
NIE | $0.526 | December 29, 2025 | January 9, 2026 |
This special year-end distribution, which is in addition to the regular quarterly distribution paid to holders of its common shares, is being paid by the Fund to manage certain federal tax requirements.
The Fund previously announced the following quarterly distribution on November 19, 2025:
Ticker | Amount of Distribution | Ex-Date/Record Date | Payable Date |
NIE | $0.50 | December 11, 2025 | December 30, 2025 |
The Fund provides this estimate of the sources of the special distribution and the December 2025 and fiscal year-to-date distributions made pursuant to the Fund’s Managed Distribution Plan:
Distribution Estimates | December 2025 (QTD) | Special Year-End | Fiscal Year-to-Date | |||
(Sources) | Per Share | Percentage | Per Share | Percentage | Per Share | Percentage |
Net Investment Income | $ 0.030 | 6.0% | $ 0.000 | 0.0% | $ 0.123 | 4.9% |
Net Realized Short-Term Capital Gains | 0.470 | 94.0% | 0.000 | 0.0% | 1.150 | 45.5% |
Net Realized Long-Term Capital Gains | 0.000 | 0.0% | 0.526 | 100.0% | 1.253 | 49.6% |
Return of Capital (or other Capital Source) | 0.000 | 0.0% | 0.000 | 0.0% | 0.000 | 0.0% |
Total Distribution | $ 0.500 | 100.0% | $ 0.526 | 100.0% | $ 2.526 | 100.0% |
(1) Fiscal year started February 1, 2025. |
Under the terms of its Managed Distribution Plan, the Fund seeks to maintain a consistent distribution level that may be paid in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund's aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund's assets and will constitute a return of the shareholder's capital. You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are based on the Fund’s net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
November 28, 2025 | ||
Average Annual Total Return on NAV for the 5-year period (2) | 9.51% | |
Annualized Current Distribution Rate (3) | 7.00% | |
Fiscal YTD Cumulative Total Return on NAV (4) | 14.28% | |
Fiscal YTD Cumulative Distribution Rate (5) | 8.84% | |
(2) | Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the change in the Fund’s NAV and reinvestment of all distributions. | |
(3) | Annualized Current Distribution Rate is the current distribution rate ($0.50 per share) annualized as a percentage of the Fund's NAV at month end. | |
(4) | Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund's NAV from the first day of the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. | |
(5) | Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal year through the next calendar quarter end (inclusive of the special year-end distribution) as a percentage of the Fund's NAV at month end. The Fiscal YTD Cumulative Distribution Rate would be 7.00% if the special year-end distribution of $0.526 per share was excluded. | |
The amounts and sources of distributions reported in this notice are estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
About the Fund
Virtus Equity & Convertible Income Fund is a diversified closed-end fund that seeks total return comprised of capital appreciation, current income, and gains. Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in a combination of equity securities and income-producing convertible securities. Virtus Investment Advisers, LLC, a registered investment adviser affiliated with Virtus Investment Partners, Inc., is the investment adviser to the Fund and Voya Investment Management is its subadviser.
For more information on the Fund, contact shareholder services at (866) 270-7788, by email at closedendfunds@virtus.com , or through the Closed-End Funds section of virtus.com .
Fund Risks
An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund’s shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their NAV. For more information about the Fund’s investment objective and risks, please see the Fund’s annual report. A copy of the Fund’s most recent annual report can be accessed through the Closed-End Funds section of virtus.com and may be obtained free of charge by contacting “Shareholder Services” as set forth at the end of this press release.
About Virtus Investment Partners, Inc.
Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment products and services from our investment managers , each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com .
View source version on businesswire.com: https://www.businesswire.com/news/home/20251219456573/en/
For Further Information:
Shareholder Services
(866) 270-7788
closedendfunds@virtus.com
FAQ**
How does the distribution structure of the Virtus Equity & Convertible Income Fund (NIE) compare to other funds managed by Virtus Investment Partners Inc. (VRTS)?
Could you provide insights into how the performance of the Virtus Equity & Convertible Income Fund (NIE) impacts the overall financial health of Virtus Investment Partners Inc. (VRTS)?
Given the current investment strategy of the Virtus Equity & Convertible Income Fund (NIE), how might market fluctuations affect its ability to consistently pay distributions, particularly under Virtus Investment Partners Inc. (VRTS)?
How does the Managed Distribution Plan of the Virtus Equity & Convertible Income Fund (NIE) align with the overall investment goals of Virtus Investment Partners Inc. (VRTS) for long-term capital appreciation?
**MWN-AI FAQ is based on asking OpenAI questions about AllianzGI Equity & Convertible Income Fund (NYSE: NIE).
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