UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED
SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22608
Virtus Global
Multi-Sector Income Fund
(Exact name of registrant as specified in charter)
101 Munson Street
Greenfield, MA 01301-9683
(Address of principal executive offices) (Zip code)
Jennifer
Fromm, Esq.
Vice President, Chief Legal Officer, Counsel and Secretary for Registrant
One Financial Plaza
Hartford, CT 06103-2608
(Name and address of agent for service)
Registrant’s telephone number, including area code: (866) 270-7788
Date of fiscal year end: November 30
Date of reporting period: November 30, 2023
The Registrant is filing this
amendment to its Form N-CSR for the period ended November 30, 2023, originally filed with the Securities and Exchange Commission on February 5, 2024 (Accession Number
0001193125-24-024157). The purpose of this amendment is to revise the certifications required by Rule 30a-2 in order to
correct the time period referenced therein. Except as set forth above (and the dates included on the signature page and the certifications required by Rule 30a-2(a) and Rule
30a-2(b)), this amendment does not amend, update or change any other items or disclosures found in the original Form N-CSR filing.
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days
after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR
270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this
information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”)
control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC
20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. |
Reports to Stockholders. |
| |
(a) |
The Report to Shareholders is attached herewith. |
Virtus Global Multi-Sector Income Fund
Not FDIC Insured • No Bank Guarantee • May Lose
Value
Table of Contents
Virtus Global Multi-Sector Income Fund
(“Global Multi-Sector Income
Fund”)
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1
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2
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5
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6
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7
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26
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27
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28
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29
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30
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31
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42
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43
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45
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49
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52
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56
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Dear Virtus
Global Multi-Sector Income Fund Shareholder:
I am pleased to present this annual report,
which reviews the performance of your fund for the 12 months ended November 30, 2023.
This report contains commentary from the
portfolio management team at Newfleet Asset Management about the financial markets and the performance of the Fund’s investments.
The fiscal year saw a generalized recovery from
the volatility that characterized much of 2022. But investor sentiment swung between optimism and pessimism depending on the outlook for inflation and interest rates. For the 12 months ended November 30, 2023, the Fund’s net asset value
(“NAV”) returned 7.19%, including $0.96 in reinvested distributions, and its market price returned 2.66%. For the same period, the Fund’s benchmark, the Bloomberg Global Aggregate Bond Index, returned 2.05%.
Please call our customer service team at 866-270-7788 if you
have questions about your account or require assistance. We appreciate your business and remain committed to your long-term financial success.
Sincerely,
George R.
Aylward
President, Chief Executive Officer, and Trustee
Virtus Global Multi-Sector Income Fund
January 2024
Refer to the Manager’s Discussion section for your
Fund’s performance. 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 above. Investing involves risk, including the
risk of loss of principal invested.
GLOBAL MULTI-SECTOR INCOME
FUND
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
November 30, 2023
About the
Fund:
Virtus Global Multi-Sector Income
Fund’s (NYSE: VGI) (the “Fund”) investment objective is to maximize current income while preserving capital. The Fund seeks to achieve its investment objective by applying extensive credit research to capitalize on opportunities
across undervalued areas of the global bond markets. There is no guarantee that the Fund will achieve its investment objective.
The use of leverage allows the Fund to borrow
at short-term rates with the expectation to invest at higher yields on its investments. As of November 30, 2023, the Fund’s leverage consisted of $43 million of borrowings made pursuant to a line of credit, which represented approximately 31%
of the Fund’s total assets.
Manager Comments –
Newfleet Asset Management (Newfleet)
Newfleet’s multi-sector fixed income
strategies team manages the Fund, leveraging the knowledge and skills 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 for portfolio construction, avoiding interest rate bets and remaining duration neutral. The following commentary is provided by the respective portfolio team at Newfleet and covers the Fund’s portfolio for the
year ended November 30, 2023.
How did the markets perform
during the Fund’s fiscal year ended November 30, 2023?
As the end of 2023 approached, economic
transitions were proceeding across the globe. China was struggling with a slowing economy amid calls for more stimulus, despite having ended its strict zero-COVID policies earlier in the year. Europe, too, was wrestling with a slowing economy and
inflation that remained above official targets. In the meantime, the U.S. economy proved remarkably resilient – unlike other major world economies, it defied expectations of a slowdown, leading to a growing consensus that the Federal Reserve
(the Fed) might be able to pull off the often-elusive soft landing. The main risk to this scenario remained the unpredictable cumulative effect of 18 months of monetary tightening on the economy. Because monetary policy works on the economy with a
lag, it presents a challenge to central bankers who are trying to return inflation to target without the associated economic pain of higher interest rates.
During the 12 months ended November 30, 2023,
the Fed raised its main policy interest rate by 1.50% in its continuing fight to tame inflation. This resulted in significant progress on headline inflation readings as supply chains healed, demand shifted from goods to services, and energy prices
rebalanced. Core readings of inflation, however, remained stubbornly above targets at the end of the period. That said, market expectations held that most major global central banks were approaching the end of their interest rate increases.
Despite the volatility during the fiscal
year, financial market performance was resilient, with most risk assets outperforming U.S. Treasuries. The U.S. Treasury yield curve shifted higher during the period and remained inverted as of November 30, 2023. The 2-year Treasury yield increased
0.37%, the 5-year Treasury yield increased by 0.53%, the 10-year Treasury yield increased by 0.72%, and the 30-year Treasury yield moved 0.76% higher.
For information regarding the indexes and certain key investment terms, see
Key Investment Terms starting on page 6.
GLOBAL MULTI-SECTOR INCOME
FUND
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
What
factors affected the Fund’s performance during fiscal year?
For the fiscal year ended November 30, 2023,
the Fund’s net asset value (“NAV”) returned 7.19%, while its market price returned 2.66%. The Bloomberg Global Aggregate Bond Index, which serves as the Fund’s benchmark, returned 2.05%.
The Fund’s underweight to U.S.
Treasuries contributed to performance during the fiscal year. Allocation and positioning within corporate high yield, high yield bank loans, and investment grade corporates had a positive impact on performance for the 12-month period. Issue
selection within emerging markets high yield contributed to performance.
The Fund’s overweight to emerging
markets high yield detracted during the 12-month period. The underweight to non-U.S. dollar-denominated securities also had a negative impact.
Level distribution practice
The Fund has a practice of seeking to
maintain a specified level of monthly distributions to shareholders, which may be changed at any time. As a result of this practice, the Fund may pay distributions in excess of the Fund’s taxable net investment income and net realized gains.
During the most recent fiscal year, the practice did not have a material impact on the Fund’s investment strategy. Please refer to the financial highlights and federal income tax information note in this report for further information about
the Fund’s distributions and its effect on net asset value.
The preceding information is the opinion of
portfolio management only through the end of the period of the report as stated on the cover. Any such opinions are subject to change at any time based upon market conditions and should not be relied upon as investment advice.
The Fund’s portfolio holdings are
subject to change and may not be representative of the portfolio managers’ current or future investment decisions. The mention of individual securities held by the Fund is for informational purposes only and should not be construed as a
recommendation to purchase or sell any securities. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional.
For
information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 6.
GLOBAL MULTI-SECTOR INCOME
FUND
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
Average Annual Total Returns1 for periods ended 11/30/23
| |
1
Year |
5
Years |
10
Years |
| Market
Value1,2 |
2.66%
|
1.99%
|
3.28%
|
| Net
Asset Value1,2 |
7.19%
|
2.30%
|
3.38%
|
| Bloomberg
Global Aggregate Bond Index1,3 |
2.05%
|
-0.73%
|
-0.09%
|
All returns represent past
performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Please visit Virtus.com for performance data current to the most recent month-end.
Growth of $10,000
for periods ended 11/30
This graph shows the change in value of a hypothetical
investment of $10,000 in the Fund for the years indicated. For comparison, the same investment is shown in the indicated index.
|
1 |
Past
performance is not indicative of future results. Current performance may be lower or higher than performance in historical periods. |
|
2 |
Total
return on market value is calculated assuming a purchase of common shares on the opening of the first day and sale on the closing of the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to
be reinvested at prices obtained under the Fund’s Automatic Reinvestment and Cash Purchase Plan. Total return on market value is not annualized for periods of less than one year. Brokerage commissions that a shareholder may pay are not
reflected. Total return on market value does not reflect the deduction of taxes that a shareholder may pay on fund distributions or the sale of fund shares. Total return on net asset value uses the same methodology, but with use of net asset value
for the beginning and ending values. |
|
3 |
The
index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio. |
For information
regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 6.
GLOBAL MULTI-SECTOR INCOME
FUND
PORTFOLIO HOLDINGS SUMMARY WEIGHTINGS (Unaudited)
November 30, 2023
The
following tables present the portfolio holdings within certain
sectors
or countries as a percentage of total investments at November 30, 2023.
Asset
Allocations
| Corporate
Bonds and Notes |
|
49%
|
| Energy
|
13%
|
|
| Financials
|
13
|
|
| Materials
|
3
|
|
| All
other Corporate Bonds and Notes |
20
|
|
| Foreign
Government Securities |
|
19
|
| Mortgage-Backed
Securities |
|
10
|
| Leveraged
Loans |
|
9
|
| Asset-Backed
Securities |
|
8
|
| U.S.
Government Securities |
|
2
|
| Municipal
Bonds |
|
2
|
| Other
|
|
1
|
| Total
|
|
100%
|
Country
Weightings
| United
States |
58%
|
| Mexico
|
6
|
| Indonesia
|
3
|
| Canada
|
3
|
| Turkey
|
2
|
| Saudi
Arabia |
2
|
| Netherlands
|
2
|
| Other
|
24
|
| Total
|
100%
|
GLOBAL MULTI-SECTOR INCOME
FUND
KEY INVESTMENT TERMS (Unaudited)
November 30, 2023
Bloomberg Global Aggregate Bond Index
The Bloomberg Global Aggregate Bond Index is a market-weighted
index of global government, government-related agencies, corporate and securitized fixed income investments. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges,
and it is not available for direct investment.
European
Central Bank (“ECB”)
The ECB is responsible
for conducting monetary policy for the Euro zone. The ECB was established as the core of the Eurosystem and the European System of Central Banks (“ESCB”). The ESCB comprises the ECB and the National Central Banks of all 17 European Union
Member States whether or not they have adopted the Euro.
Exchange-Traded Fund (“ETF”)
An open-end fund that is traded on a stock exchange. Most ETFs
have a portfolio of stocks or bonds that track a specific market index.
Federal Reserve (the “Fed”)
The central bank of the U.S., responsible for controlling money
supply, interest rates, and credit with the goal of keeping the U.S. economy and currency stable. Governed by a seven-member board, the system includes 12 regional Federal Reserve Banks, 25 branches, and all national and state banks that are part of
the system.
Headline Inflation
Headline inflation is the total inflation in an economy,
as measured by inflation in the prices of a basket of goods that includes commodities like food and energy.
London Interbank Offered Rate (“LIBOR”)
A benchmark rate that some of the world’s leading banks
charge each other for short-term loans and that serves as the first step to calculating interest rates on various loans throughout the world.
Risk Assets
Risk assets are those that tend to demonstrate price
volatility, such as equities, high yield bonds, currencies, and commodities.
Secured Overnight Financing Rate (“SOFR”)
A broad measure of the cost of borrowing cash overnight
collateralized by U.S. Treasury securities.
Yield
Curve
A line that plots the interest rates, at a set
point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for
other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS
November 30, 2023
($ reported in thousands)
| |
Par
Value(1) |
|
Value
|
| U.S.
Government Securities—3.1% |
| U.S.
Treasury Bonds |
|
|
|
| 1.250%,
5/15/50 |
$ 1,965
|
|
$
965 |
| 3.625%,
5/15/53 |
1,425
|
|
1,216
|
| U.S.
Treasury Notes |
|
|
|
| 1.375%,
12/31/28 |
475
|
|
411
|
| 3.375%,
5/15/33 |
450
|
|
416
|
Total
U.S. Government Securities
(Identified Cost $3,719) |
|
3,008
|
| |
|
|
|
| |
| Municipal
Bonds—2.2% |
| California—0.7%
|
|
|
State
of California, Build America Bond Taxable
7.500%, 4/1/34 |
570
|
|
667
|
| Florida—0.3%
|
|
|
Broward
County, Water & Sewer Utility Revenue Series A
4.000%, 10/1/47 |
300
|
|
299
|
| Illinois—0.7%
|
|
|
State
of Illinois, Build America Bond Taxable
6.900%, 3/1/35 |
700
|
|
730
|
| New
York—0.5% |
|
|
Metropolitan
Transportation Authority Bidding Group Series A
5.000%, 11/15/45 |
430
|
|
462
|
Total
Municipal Bonds
(Identified Cost $2,249) |
|
2,158
|
| |
|
|
|
| |
| Foreign
Government Securities—27.4% |
| Arab
Republic of Egypt |
|
|
|
144A
7.600%, 3/1/29(2) |
845
|
|
588
|
144A
8.500%, 1/31/47(2) |
715
|
|
407
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Foreign
Government Securities—continued |
Bolivarian
Republic of Venezuela RegS
7.650%, 4/21/25(3)(4) |
$ 1,380
|
|
$ 215
|
Brazil
Notas do Tesouro Nacional Series F
10.000%, 1/1/29 |
2,680
BRL |
|
533
|
| Dominican
Republic |
|
|
|
144A
4.875%, 9/23/32(2) |
1,565
|
|
1,346
|
144A
6.850%, 1/27/45(2) |
615
|
|
568
|
| Federative
Republic of Brazil |
|
|
|
| 6.000%,
10/20/33 |
715
|
|
695
|
| 4.750%,
1/14/50 |
365
|
|
263
|
Finance
Department Government of Sharjah 144A
6.500%, 11/23/32(2) |
300
|
|
303
|
Hungary
Government International Bond 144A
6.250%, 9/22/32(2) |
585
|
|
597
|
Islamic
Republic of Pakistan 144A
6.875%, 12/5/27(2) |
630
|
|
410
|
Kingdom
of Jordan 144A
5.850%, 7/7/30(2) |
1,450
|
|
1,318
|
| Kingdom
of Morocco |
|
|
|
144A
3.000%, 12/15/32(2) |
200
|
|
157
|
144A
5.500%, 12/11/42(2) |
590
|
|
501
|
Mongolia
Government International Bond 144A
3.500%, 7/7/27(2) |
525
|
|
458
|
Oman
Government International Bond 144A
7.375%, 10/28/32(2) |
595
|
|
655
|
Republic
of Angola 144A
8.250%, 5/9/28(2) |
1,105
|
|
978
|
Republic
of Argentina
3.500%, 7/9/41(5) |
1,350
|
|
440
|
| Republic
of Colombia |
|
|
|
| 3.250%,
4/22/32 |
690
|
|
518
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Foreign
Government Securities—continued |
| 4.125%,
5/15/51 |
$ 270
|
|
$ 162
|
Republic
of Ghana RegS
8.125%, 3/26/32(3)(4) |
970
|
|
413
|
| Republic
of Guatemala |
|
|
|
144A
5.250%, 8/10/29(2) |
315
|
|
293
|
144A
3.700%, 10/7/33(2) |
830
|
|
642
|
Republic
of Indonesia
2.850%, 2/14/30 |
1,540
|
|
1,355
|
| Republic
of Ivory Coast |
|
|
|
144A
6.375%, 3/3/28(2) |
385
|
|
370
|
144A
6.125%, 6/15/33(2) |
435
|
|
384
|
Republic
of Kenya 144A
8.000%, 5/22/32(2) |
510
|
|
430
|
Republic
of Nigeria 144A
7.375%, 9/28/33(2) |
525
|
|
416
|
Republic
of Philippines
3.700%, 3/1/41 |
960
|
|
763
|
Republic
of Poland
4.875%, 10/4/33 |
440
|
|
426
|
Republic
of Serbia 144A
6.500%, 9/26/33(2) |
300
|
|
296
|
| Republic
of South Africa |
|
|
|
| 5.875%,
6/22/30 |
530
|
|
492
|
| 5.650%,
9/27/47 |
360
|
|
260
|
| Republic
of Turkiye |
|
|
|
| 7.625%,
4/26/29 |
1,175
|
|
1,160
|
| 9.125%,
7/13/30 |
1,055
|
|
1,104
|
| 4.875%,
4/16/43 |
935
|
|
614
|
| Saudi
International Bond |
|
|
|
144A
3.625%, 3/4/28(2) |
900
|
|
854
|
144A
4.875%, 7/18/33(2) |
445
|
|
435
|
144A
4.500%, 10/26/46(2) |
1,655
|
|
1,340
|
State
of Israel
2.750%, 7/3/30 |
480
|
|
407
|
| State
of Qatar |
|
|
|
144A
3.750%, 4/16/30(2) |
450
|
|
426
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Foreign
Government Securities—continued |
144A
4.400%, 4/16/50(2) |
$ 365
|
|
$
306 |
| Ukraine
Government |
|
|
|
144A
7.750%, 9/1/26(2)(3) |
300
|
|
83
|
RegS
7.750%, 9/1/26(3)(4) |
350
|
|
97
|
| United
Mexican States |
|
|
|
| 2.659%,
5/24/31 |
310
|
|
253
|
| 6.350%,
2/9/35 |
300
|
|
303
|
| 6.338%,
5/4/53 |
1,177
|
|
1,119
|
Total
Foreign Government Securities
(Identified Cost $30,240) |
|
26,153
|
| |
|
|
|
| |
| Mortgage-Backed
Securities—13.9% |
| Agency—4.4%
|
|
|
| Federal
National Mortgage Association |
|
|
|
Pool
#FS4438
5.000%, 11/1/52 |
905
|
|
872
|
Pool
#MA4785
5.000%, 10/1/52 |
457
|
|
441
|
Pool
#MA4805
4.500%, 11/1/52 |
799
|
|
749
|
Pool
#MA4980
6.000%, 4/1/53 |
1,472
|
|
1,477
|
Pool
#MA5072
5.500%, 7/1/53 |
689
|
|
680
|
| |
|
|
4,219
|
| |
|
|
|
| |
| Non-Agency—9.5%
|
|
|
Ajax
Mortgage Loan Trust 2022-B, A1 144A
3.500%, 3/27/62(2)(5) |
597
|
|
552
|
American
Homes 4 Rent Trust 2014-SFR2, C 144A
4.705%, 10/17/36(2) |
770
|
|
758
|
Arroyo
Mortgage Trust 2019-1, A1 144A
3.805%, 1/25/49(2)(5) |
82
|
|
75
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
Benchmark
Mortgage Trust 2023-B38, A2
5.626%, 4/15/56 |
$ 365
|
|
$ 362
|
BPR
Trust 2022-OANA, A (1 month Term SOFR + 1.898%, Cap N/A, Floor 1.898%) 144A
7.221%, 4/15/37(2)(5) |
270
|
|
265
|
BX
Trust 2019-OC11, D 144A
4.075%, 12/9/41(2)(5) |
515
|
|
431
|
| Chase
Mortgage Finance Corp. |
|
|
|
2016-SH1,
M2 144A
3.750%, 4/25/45(2)(5) |
81
|
|
72
|
2016-SH2,
M2 144A
3.750%, 12/25/45(2)(5) |
208
|
|
183
|
CIM
Trust 2022-R2, A1 144A
3.750%, 12/25/61(2)(5) |
329
|
|
299
|
| COLT
Mortgage Loan Trust |
|
|
|
2022-4,
A1 144A
4.301%, 3/25/67(2)(5) |
145
|
|
137
|
2022-5,
A1 144A
4.550%, 4/25/67(2)(5) |
349
|
|
331
|
Ellington
Financial Mortgage Trust 2019-2, A3 144A
3.046%, 11/25/59(2)(5) |
34
|
|
31
|
Extended
Stay America Trust 2021-ESH, C (1 month Term SOFR + 1.814%, Cap N/A, Floor 1.700%) 144A
7.137%, 7/15/38(2)(5) |
268
|
|
262
|
FirstKey
Homes Trust 2020-SFR2, B 144A
1.567%, 10/19/37(2) |
475
|
|
434
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
Homes
Trust 2023-NQM2, A1 144A
6.456%, 2/25/68(2)(5) |
$ 480
|
|
$ 479
|
INTOWN
Mortgage Trust 2022-STAY, A (1 month Term SOFR + 2.489%, Cap N/A, Floor 2.489%) 144A
7.812%, 8/15/39(2)(5) |
435
|
|
436
|
JPMorgan
Chase Mortgage Trust 2014-5, B2 144A
2.751%, 10/25/29(2)(5) |
163
|
|
143
|
Mill
City Mortgage Loan Trust 2017-3, B1 144A
3.250%, 1/25/61(2)(5) |
338
|
|
272
|
Morgan
Stanley Bank of America Merrill Lynch Trust 2015-C22, AS
3.561%, 4/15/48 |
220
|
|
207
|
| New
Residential Mortgage Loan Trust |
|
|
|
2016-3A,
B1 144A
4.000%, 9/25/56(2)(5) |
163
|
|
150
|
2016-4A,
B1A 144A
4.500%, 11/25/56(2)(5) |
482
|
|
451
|
ORL
Trust 2023-GLKS, A (1 month Term SOFR + 2.350%, Cap N/A, Floor 2.350%) 144A
7.673%, 10/19/36(2)(5) |
375
|
|
375
|
Palisades
Mortgage Loan Trust 2021-RTL1, A1 144A
2.857%, 6/25/26(2)(5) |
150
|
|
147
|
Provident
Funding Mortgage Trust 2019-1, A2 144A
3.000%, 12/25/49(2)(5) |
75
|
|
61
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
Starwood
Mortgage Residential Trust 2021-3, A3 144A
1.518%, 6/25/56(2)(5) |
$ 50
|
|
$
39 |
| Towd
Point Mortgage Trust |
|
|
|
2016-4,
B1 144A
3.957%, 7/25/56(2)(5) |
260
|
|
238
|
2017-1,
M1 144A
3.750%, 10/25/56(2)(5) |
265
|
|
249
|
2017-4,
A2 144A
3.000%, 6/25/57(2)(5) |
171
|
|
152
|
2018-6,
A2 144A
3.750%, 3/25/58(2)(5) |
215
|
|
182
|
Tricon
Residential Trust 2021-SFR1, B 144A
2.244%, 7/17/38(2) |
150
|
|
135
|
TVC
Mortgage Trust 2020-RTL1, M 144A
6.193%, 9/25/24(2)(5) |
500
|
|
499
|
| VCAT
LLC |
|
|
|
2021-NPL3,
A1 144A
1.743%, 5/25/51(2)(5) |
216
|
|
203
|
2021-NPL4,
A1 144A
1.868%, 8/25/51(2)(5) |
142
|
|
134
|
Verus
Securitization Trust 2022-4, A1 144A
4.474%, 4/25/67(2)(5) |
299
|
|
285
|
| |
|
|
9,029
|
Total
Mortgage-Backed Securities
(Identified Cost $13,855) |
|
13,248
|
| |
|
|
|
| |
| Asset-Backed
Securities—11.4% |
| Automobiles—4.0%
|
|
|
Avis
Budget Rental Car Funding LLC (AESOP) 2019-2A, D 144A
3.040%, 9/22/25(2) |
480
|
|
462
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Automobiles—continued
|
|
|
DT
Auto Owner Trust 2023-1A, D 144A
6.440%, 11/15/28(2) |
$ 450
|
|
$ 445
|
| GLS
Auto Receivables Issuer Trust |
|
|
|
2020-3A,
D 144A
2.270%, 5/15/26(2) |
345
|
|
340
|
2020-3A,
E 144A
4.310%, 7/15/27(2) |
550
|
|
537
|
2023-1A,
B 144A
6.190%, 6/15/27(2) |
439
|
|
438
|
| LAD
Auto Receivables Trust |
|
|
|
2021-1A,
D 144A
3.990%, 11/15/29(2) |
470
|
|
444
|
2023-2A,
D 144A
6.300%, 2/15/31(2) |
365
|
|
359
|
OneMain
Direct Auto Receivables Trust 2022-1A, C 144A
5.310%, 6/14/29(2) |
320
|
|
309
|
Santander
Drive Auto Receivables Trust 2022-7, A2
5.810%, 1/15/26 |
131
|
|
131
|
Tesla
Auto Lease Trust 2023-A, B 144A
6.410%, 7/20/27(2) |
363
|
|
364
|
| |
|
|
3,829
|
| |
|
|
|
| |
| Consumer
Loans—0.7% |
|
|
Affirm
Asset Securitization Trust 2023-B, A 144A
6.820%, 9/15/28(2) |
350
|
|
352
|
Marlette
Funding Trust 2023-2A, B 144A
6.540%, 6/15/33(2) |
363
|
|
363
|
| |
|
|
715
|
| |
|
|
|
| |
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Credit
Card—0.5% |
|
|
Avant
Credit Card Master Trust 2021-1A, A 144A
1.370%, 4/15/27(2) |
$ 480
|
|
$ 453
|
| Other—6.2%
|
|
|
Adams
Outdoor Advertising LP 2023-1, A2 144A
6.967%, 7/15/53(2) |
365
|
|
364
|
| Aqua
Finance Trust |
|
|
|
2017-A,
A 144A
3.720%, 11/15/35(2) |
26
|
|
26
|
2020-AA,
D 144A
7.150%, 7/17/46(2) |
400
|
|
348
|
Arby’s
Funding LLC 2020-1A, A2 144A
3.237%, 7/30/50(2) |
465
|
|
414
|
BXG
Receivables Note Trust 2023-A, A 144A
5.770%, 11/15/38(2) |
388
|
|
384
|
Conn’s
Receivables Funding LLC 2022-A, B 144A
9.520%, 12/15/26(2) |
217
|
|
218
|
FAT
Brands Royalty LLC 2021-1A, A2 144A
4.750%, 4/25/51(2) |
478
|
|
444
|
Hardee’s
Funding LLC 2020-1A, A2 144A
3.981%, 12/20/50(2) |
410
|
|
355
|
Jersey
Mike’s Funding 2019-1A, A2 144A
4.433%, 2/15/50(2) |
348
|
|
323
|
Mariner
Finance Issuance Trust 2020-AA, A 144A
2.190%, 8/21/34(2) |
340
|
|
332
|
Octane
Receivables Trust 2023-3A, C 144A
6.740%, 8/20/29(2) |
425
|
|
429
|
Oportun
Funding XIV LLC 2021-A, B 144A
1.760%, 3/8/28(2) |
320
|
|
304
|
Planet
Fitness Master Issuer LLC 2018-1A, A2II 144A
4.666%, 9/5/48(2) |
513
|
|
496
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Other—continued
|
|
|
Progress
Residential Trust 2021-SFR6, D 144A
2.225%, 7/17/38(2) |
$ 190
|
|
$
167 |
Trinity
Rail Leasing LLC 2019-1A, A 144A
3.820%, 4/17/49(2) |
288
|
|
272
|
VFI
ABS LLC 2022-1A, B 144A
3.040%, 7/24/28(2) |
585
|
|
560
|
ZAXBY’S
Funding LLC 2021-1A, A2 144A
3.238%, 7/30/51(2) |
531
|
|
447
|
| |
|
|
5,883
|
| |
|
|
|
| |
Total
Asset-Backed Securities
(Identified Cost $11,225) |
|
10,880
|
| |
|
|
|
| |
| Corporate
Bonds and Notes—69.0% |
| Communication
Services—4.1% |
|
|
Altice
France Holding S.A. 144A
6.000%, 2/15/28(2) |
185
|
|
75
|
| Altice
France S.A. |
|
|
|
| 144A
5.125%, 7/15/29(2) |
125
|
|
89
|
| 144A
5.500%, 10/15/29(2) |
185
|
|
134
|
AT&T,
Inc.
5.400%, 2/15/34 |
290
|
|
287
|
| CSC
Holdings LLC |
|
|
|
| 5.250%,
6/1/24 |
145
|
|
138
|
| 144A
7.500%, 4/1/28(2) |
295
|
|
202
|
CT
Trust 144A
5.125%, 2/3/32(2) |
550
|
|
455
|
| DISH
DBS Corp. |
|
|
|
| 5.875%,
11/15/24 |
180
|
|
158
|
| 7.750%,
7/1/26 |
170
|
|
101
|
Gray
Television, Inc. 144A
7.000%, 5/15/27(2) |
330
|
|
300
|
Grupo
Televisa SAB
4.625%, 1/30/26 |
525
|
|
511
|
Level
3 Financing, Inc. 144A
3.625%, 1/15/29(2) |
365
|
|
131
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
Communication
Services—continued |
|
|
Millennium
Escrow Corp. 144A
6.625%, 8/1/26(2) |
$ 250
|
|
$ 193
|
Rackspace
Technology Global, Inc. 144A
5.375%, 12/1/28(2) |
275
|
|
83
|
Sprint
Capital Corp.
8.750%, 3/15/32 |
235
|
|
281
|
Telecomunicaciones
Digitales S.A. 144A
4.500%, 1/30/30(2) |
725
|
|
597
|
Telesat
Canada 144A
6.500%, 10/15/27(2) |
180
|
|
84
|
T-Mobile
USA, Inc.
5.050%, 7/15/33 |
151
|
|
146
|
| |
|
|
3,965
|
| |
|
|
|
| |
| Consumer
Discretionary—3.9% |
|
|
Ashtead
Capital, Inc. 144A
2.450%, 8/12/31(2) |
570
|
|
445
|
Carnival
Corp. 144A
7.000%, 8/15/29(2) |
35
|
|
36
|
Churchill
Downs, Inc. 144A
6.750%, 5/1/31(2) |
215
|
|
211
|
| Clarios
Global LP |
|
|
|
| 144A
8.500%, 5/15/27(2) |
245
|
|
246
|
| 144A
6.750%, 5/15/28(2) |
25
|
|
25
|
Ford
Motor Co.
3.250%, 2/12/32 |
120
|
|
96
|
Ford
Motor Credit Co. LLC
7.350%, 3/6/30 |
200
|
|
208
|
Jacobs
Entertainment, Inc. 144A
6.750%, 2/15/29(2) |
164
|
|
147
|
MDC
Holdings, Inc.
3.966%, 8/6/61 |
440
|
|
261
|
Newell
Brands, Inc.
6.625%, 9/15/29 |
227
|
|
221
|
Nissan
Motor Acceptance Co. LLC 144A
7.050%, 9/15/28(2) |
210
|
|
213
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
Consumer
Discretionary—continued |
|
|
NMG
Holding Co., Inc. 144A
7.125%, 4/1/26(2) |
$ 220
|
|
$ 206
|
Nordstrom,
Inc.
4.250%, 8/1/31 |
300
|
|
237
|
Ontario
Gaming GTA LP 144A
8.000%, 8/1/30(2) |
175
|
|
177
|
PetSmart,
Inc. 144A
7.750%, 2/15/29(2) |
285
|
|
269
|
Premier
Entertainment Sub LLC 144A
5.625%, 9/1/29(2) |
154
|
|
111
|
Royal
Caribbean Cruises Ltd. 144A
9.250%, 1/15/29(2) |
12
|
|
13
|
Tapestry,
Inc.
7.850%, 11/27/33 |
325
|
|
330
|
Weekley
Homes LLC 144A
4.875%, 9/15/28(2) |
255
|
|
234
|
| |
|
|
3,686
|
| |
|
|
|
| |
| Consumer
Staples—2.2% |
|
|
Anheuser-Busch
InBev Worldwide, Inc.
3.500%, 6/1/30 |
305
|
|
282
|
BAT
Capital Corp.
7.750%, 10/19/32 |
330
|
|
365
|
Central
American Bottling Corp. 144A
5.250%, 4/27/29(2) |
295
|
|
268
|
Coty,
Inc. 144A
6.625%, 7/15/30(2) |
230
|
|
231
|
Minerva
Luxembourg S.A. 144A
8.875%, 9/13/33(2) |
710
|
|
716
|
Pilgrim’s
Pride Corp.
6.250%, 7/1/33 |
230
|
|
226
|
| |
|
|
2,088
|
| |
|
|
|
| |
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—18.4%
|
|
|
Aker
BP ASA 144A
2.000%, 7/15/26(2) |
$ 263
|
|
$ 240
|
Alliance
Resource Operating Partners LP 144A
7.500%, 5/1/25(2) |
269
|
|
268
|
Ascent
Resources Utica Holdings LLC 144A
8.250%, 12/31/28(2) |
255
|
|
255
|
BP
Capital Markets plc
4.875% (6) |
375
|
|
337
|
CITGO
Petroleum Corp. 144A
7.000%, 6/15/25(2) |
95
|
|
94
|
Civitas
Resources, Inc. 144A
8.750%, 7/1/31(2) |
180
|
|
186
|
| Columbia
Pipelines Operating Co. LLC |
|
|
|
| 144A
6.036%, 11/15/33(2) |
215
|
|
217
|
| 144A
6.714%, 8/15/63(2) |
40
|
|
41
|
Coronado
Finance Pty Ltd. 144A
10.750%, 5/15/26(2) |
382
|
|
398
|
CrownRock
LP 144A
5.625%, 10/15/25(2) |
255
|
|
253
|
| Ecopetrol
S.A. |
|
|
|
| 4.625%,
11/2/31 |
695
|
|
554
|
| 8.875%,
1/13/33 |
585
|
|
600
|
Enbridge,
Inc.
7.625%, 1/15/83 |
345
|
|
326
|
Energy
Transfer LP Series H
6.500% (6) |
245
|
|
229
|
Fermaca
Enterprises S de RL de C.V. 144A
6.375%, 3/30/38(2) |
703
|
|
669
|
Flex
Intermediate Holdco LLC 144A
3.363%, 6/30/31(2) |
175
|
|
137
|
Genesis
Energy LP
8.875%, 4/15/30 |
395
|
|
402
|
Greensaif
Pipelines Bidco S.a.r.l. 144A
6.129%, 2/23/38(2) |
235
|
|
235
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—continued
|
|
|
Helix
Energy Solutions Group, Inc. 144A
9.750%, 3/1/29(2) |
$ 185
|
|
$ 185
|
Hilcorp
Energy I LP 144A
5.750%, 2/1/29(2) |
290
|
|
273
|
| International
Petroleum Corp. |
|
|
|
| 144A,
RegS 7.250%, 2/1/27(2)(4) |
200
|
|
186
|
| 144A,
RegS 7.250%, 2/1/27(2)(4) |
300
|
|
279
|
| KazMunayGas
National Co. JSC |
|
|
|
| 144A
5.375%, 4/24/30(2) |
310
|
|
291
|
| 144A
5.750%, 4/19/47(2) |
640
|
|
509
|
| 144A
6.375%, 10/24/48(2) |
200
|
|
170
|
Kinder
Morgan, Inc.
7.750%, 1/15/32 |
380
|
|
422
|
Korea
National Oil Corp. 144A
4.875%, 4/3/28(2) |
200
|
|
197
|
Magnolia
Oil & Gas Operating LLC 144A
6.000%, 8/1/26(2) |
270
|
|
262
|
Mesquite
Energy, Inc. 144A
7.250%, 2/15/24(2) |
135
|
|
10
|
Nabors
Industries Ltd. 144A
7.250%, 1/15/26(2) |
195
|
|
186
|
Northriver
Midstream Finance LP 144A
5.625%, 2/15/26(2) |
255
|
|
248
|
Occidental
Petroleum Corp.
6.125%, 1/1/31 |
405
|
|
409
|
Odebrecht
Oil & Gas Finance Ltd. 144A
0.000% (2)(6)(7)(8) |
154
|
|
2
|
| Pertamina
Persero PT |
|
|
|
| 144A
2.300%, 2/9/31(2) |
1,075
|
|
874
|
| RegS
6.450%, 5/30/44(4) |
815
|
|
818
|
Petroleos
de Venezuela S.A. 144A
6.000%, 5/16/24(2)(3) |
1,820
|
|
218
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—continued
|
|
|
| Petroleos
Mexicanos |
|
|
|
| 6.500%,
3/13/27 |
$ 930
|
|
$ 836
|
| 5.950%,
1/28/31 |
825
|
|
615
|
| 6.700%,
2/16/32 |
935
|
|
727
|
| 6.500%,
6/2/41 |
350
|
|
220
|
| 7.690%,
1/23/50 |
595
|
|
394
|
| 6.375%,
1/23/45 |
1,700
|
|
1,011
|
| 6.350%,
2/12/48 |
520
|
|
307
|
Petronas
Capital Ltd. 144A
3.500%, 4/21/30(2) |
555
|
|
504
|
Reliance
Industries Ltd. 144A
2.875%, 1/12/32(2) |
760
|
|
622
|
State
Oil Co. of the Azerbaijan Republic RegS
6.950%, 3/18/30(4) |
625
|
|
631
|
Teine
Energy Ltd. 144A
6.875%, 4/15/29(2) |
250
|
|
236
|
| Transocean,
Inc. |
|
|
|
| 144A
11.500%, 1/30/27(2) |
9
|
|
9
|
| 144A
8.750%, 2/15/30(2) |
214
|
|
218
|
Venture
Global Calcasieu Pass LLC 144A
4.125%, 8/15/31(2) |
245
|
|
211
|
Viper
Energy, Inc. 144A
7.375%, 11/1/31(2) |
30
|
|
30
|
| |
|
|
17,551
|
| |
|
|
|
| |
| Financials—17.9%
|
|
|
Acrisure
LLC 144A
7.000%, 11/15/25(2) |
370
|
|
365
|
Allianz
SE 144A
6.350%, 9/6/53(2) |
200
|
|
200
|
Allstate
Corp. (The) Series B (3 month Term SOFR + 3.200%)
8.579%, 8/15/53(5) |
391
|
|
386
|
American
Express Co.
5.625%, 7/28/34 |
255
|
|
252
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Australia
& New Zealand Banking Group Ltd. 144A
4.400%, 5/19/26(2) |
$ 260
|
|
$ 250
|
Banco
de Credito e Inversiones S.A. 144A
3.500%, 10/12/27(2) |
990
|
|
916
|
Banco
Mercantil del Norte S.A. 144A
6.625% (2)(6) |
780
|
|
645
|
Banco
Nacional de Comercio Exterior SNC 144A
4.375%, 10/14/25(2) |
510
|
|
494
|
Banco
Santander Chile 144A
3.177%, 10/26/31(2) |
150
|
|
125
|
Bancolombia
S.A.
4.625%, 12/18/29 |
300
|
|
270
|
| Bank
of America Corp. |
|
|
|
| 5.015%,
7/22/33 |
295
|
|
280
|
| 2.482%,
9/21/36 |
395
|
|
298
|
Bank
of New York Mellon Corp. (The)
5.834%, 10/25/33 |
385
|
|
392
|
Barclays
plc
7.437%, 11/2/33 |
420
|
|
447
|
BBVA
Bancomer S.A. 144A
5.125%, 1/18/33(2) |
700
|
|
625
|
Blackstone
Private Credit Fund
2.625%, 12/15/26 |
200
|
|
176
|
Blue
Owl Credit Income Corp.
4.700%, 2/8/27 |
259
|
|
238
|
BroadStreet
Partners, Inc. 144A
5.875%, 4/15/29(2) |
160
|
|
146
|
Brookfield
Finance, Inc.
6.350%, 1/5/34 |
345
|
|
348
|
Capital
One Financial Corp.
2.359%, 7/29/32 |
420
|
|
298
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Charles
Schwab Corp. (The) Series H
4.000% (6) |
$ 360
|
|
$ 272
|
Citadel
LP 144A
4.875%, 1/15/27(2) |
270
|
|
261
|
| Citigroup,
Inc. |
|
|
|
| 6.270%,
11/17/33 |
270
|
|
279
|
| 6.174%,
5/25/34 |
204
|
|
202
|
Citizens
Bank N.A.
2.250%, 4/28/25 |
250
|
|
236
|
Cobra
AcquisitionCo. LLC 144A
6.375%, 11/1/29(2) |
162
|
|
118
|
Corebridge
Financial, Inc.
6.875%, 12/15/52 |
337
|
|
324
|
Discover
Bank
4.650%, 9/13/28 |
250
|
|
228
|
Drawbridge
Special Opportunities Fund LP 144A
3.875%, 2/15/26(2) |
585
|
|
528
|
Export-Import
Bank Korea
5.125%, 1/11/33 |
600
|
|
601
|
Fifth
Third Bancorp
4.337%, 4/25/33 |
245
|
|
215
|
First
American Financial Corp.
4.000%, 5/15/30 |
330
|
|
286
|
Global
Atlantic Fin Co. 144A
7.950%, 6/15/33(2) |
137
|
|
148
|
Global
Payments, Inc.
2.900%, 5/15/30 |
395
|
|
336
|
| Goldman
Sachs Group, Inc. (The) |
|
|
|
| 3.102%,
2/24/33 |
175
|
|
144
|
| 6.450%,
5/1/36 |
135
|
|
139
|
Huntington
Bancshares, Inc.
2.550%, 2/4/30 |
280
|
|
230
|
| JPMorgan
Chase & Co. |
|
|
|
| 5.350%,
6/1/34 |
135
|
|
132
|
| 6.254%,
10/23/34 |
200
|
|
209
|
Liberty
Mutual Group, Inc. 144A
4.125%, 12/15/51(2) |
400
|
|
326
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Lincoln
National Corp. (3 month LIBOR + 2.040%)
7.717%, 4/20/67(5) |
$ 324
|
|
$ 198
|
MDGH-GMTN
RSC Ltd. 144A
4.500%, 11/7/28(2) |
750
|
|
727
|
MetLife,
Inc. Series G
3.850% (6) |
220
|
|
207
|
Midcap
Financial Issuer Trust 144A
6.500%, 5/1/28(2) |
370
|
|
322
|
| Morgan
Stanley |
|
|
|
| 6.342%,
10/18/33 |
290
|
|
300
|
| 5.948%,
1/19/38 |
174
|
|
169
|
MSCI,
Inc. 144A
3.625%, 9/1/30(2) |
261
|
|
227
|
National
Rural Utilities Cooperative Finance Corp. (3 month Term SOFR + 3.172%)
8.562%, 4/30/43(5) |
165
|
|
163
|
Nationstar
Mortgage Holdings, Inc. 144A
5.750%, 11/15/31(2) |
165
|
|
144
|
NCR
Atleos Corp. 144A
9.500%, 4/1/29(2) |
184
|
|
190
|
Nippon
Life Insurance Co. 144A
6.250%, 9/13/53(2) |
200
|
|
202
|
Prudential
Financial, Inc.
6.750%, 3/1/53 |
220
|
|
219
|
State
Street Corp.
4.821%, 1/26/34 |
300
|
|
282
|
| Synchrony
Financial |
|
|
|
| 4.875%,
6/13/25 |
65
|
|
63
|
| 3.700%,
8/4/26 |
93
|
|
85
|
Toronto-Dominion
Bank (The)
8.125%, 10/31/82 |
435
|
|
437
|
| UBS
Group AG |
|
|
|
| 144A
9.250%(2)(6) |
35
|
|
37
|
| 144A
4.988%, 8/5/33(2) |
310
|
|
285
|
| Wells
Fargo & Co. |
|
|
|
| 5.389%,
4/24/34 |
145
|
|
140
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Series
BB
3.900%(6) |
$ 400
|
|
$ 361
|
| |
|
|
17,123
|
| |
|
|
|
| |
| Health
Care—3.8% |
|
|
Akumin,
Inc. 144A
7.000%, 11/1/25(2)(9) |
235
|
|
189
|
| Bausch
Health Cos., Inc. |
|
|
|
| 144A
6.125%, 2/1/27(2) |
25
|
|
14
|
| 144A
11.000%, 9/30/28(2) |
105
|
|
66
|
| 144A
14.000%, 10/15/30(2) |
20
|
|
11
|
Catalent
Pharma Solutions, Inc. 144A
3.500%, 4/1/30(2) |
255
|
|
213
|
Cheplapharm
Arzneimittel GmbH 144A
5.500%, 1/15/28(2) |
370
|
|
343
|
Community
Health Systems, Inc. 144A
6.125%, 4/1/30(2) |
245
|
|
137
|
DENTSPLY
SIRONA, Inc.
3.250%, 6/1/30 |
335
|
|
287
|
HCA,
Inc.
5.500%, 6/1/33 |
290
|
|
285
|
IQVIA,
Inc. 144A
6.250%, 2/1/29(2) |
250
|
|
254
|
Lannett
Co., Inc. 144A
7.750%, 4/15/26(2)(7) |
60
|
|
3
|
LifePoint
Health, Inc. 144A
9.875%, 8/15/30(2) |
360
|
|
350
|
| Surgery
Center Holdings, Inc. |
|
|
|
| 144A
6.750%, 7/1/25(2) |
84
|
|
83
|
| 144A
10.000%, 4/15/27(2) |
125
|
|
126
|
Team
Health Holdings, Inc. 144A
6.375%, 2/1/25(2) |
220
|
|
184
|
Teva
Pharmaceutical Finance Netherlands III B.V.
5.125%, 5/9/29 |
280
|
|
258
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Health
Care—continued |
|
|
Universal
Health Services, Inc.
2.650%, 1/15/32 |
$ 400
|
|
$ 315
|
Viatris,
Inc.
2.700%, 6/22/30 |
265
|
|
215
|
Zimmer
Biomet Holdings, Inc.
3.550%, 3/20/30 |
325
|
|
285
|
| |
|
|
3,618
|
| |
|
|
|
| |
| Industrials—4.5%
|
|
|
Alaska
Airlines Pass-Through Trust 2020-1, A 144A
4.800%, 2/15/29(2) |
340
|
|
324
|
Avolon
Holdings Funding Ltd. 144A
4.375%, 5/1/26(2) |
301
|
|
287
|
Beacon
Roofing Supply, Inc. 144A
6.500%, 8/1/30(2) |
90
|
|
90
|
| Boeing
Co. (The) |
|
|
|
| 3.750%,
2/1/50 |
215
|
|
156
|
| 5.930%,
5/1/60 |
160
|
|
155
|
British
Airways Pass-Through Trust 2021-1, A 144A
2.900%, 9/15/36(2) |
376
|
|
315
|
Chart
Industries, Inc. 144A
9.500%, 1/1/31(2) |
200
|
|
213
|
Concentrix
Corp.
6.650%, 8/2/26 |
175
|
|
176
|
CoStar
Group, Inc. 144A
2.800%, 7/15/30(2) |
481
|
|
395
|
GFL
Environmental, Inc. 144A
6.750%, 1/15/31(2) |
15
|
|
15
|
Global
Infrastructure Solutions, Inc. 144A
7.500%, 4/15/32(2) |
265
|
|
231
|
Hertz
Corp. (The) 144A
5.000%, 12/1/29(2) |
180
|
|
138
|
Icahn
Enterprises LP
6.250%, 5/15/26 |
235
|
|
222
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Industrials—continued
|
|
|
LBM
Acquisition LLC 144A
6.250%, 1/15/29(2) |
$ 250
|
|
$ 209
|
Neptune
Bidco U.S., Inc. 144A
9.290%, 4/15/29(2) |
175
|
|
162
|
Regal
Rexnord Corp. 144A
6.400%, 4/15/33(2) |
371
|
|
366
|
Sempra
Global 144A
3.250%, 1/15/32(2) |
405
|
|
321
|
United
Airlines Pass-Through Trust 2023-1, A
5.800%, 7/15/37 |
240
|
|
230
|
Veralto
Corp. 144A
5.450%, 9/18/33(2) |
210
|
|
209
|
VistaJet
Malta Finance plc 144A
9.500%, 6/1/28(2) |
155
|
|
129
|
| |
|
|
4,343
|
| |
|
|
|
| |
| Information
Technology—2.1% |
|
|
| Booz
Allen Hamilton, Inc. |
|
|
|
| 144A
3.875%, 9/1/28(2) |
195
|
|
179
|
| 144A
4.000%, 7/1/29(2) |
220
|
|
200
|
CommScope
Technologies LLC 144A
6.000%, 6/15/25(2) |
225
|
|
177
|
| Consensus
Cloud Solutions, Inc. |
|
|
|
| 144A
6.000%, 10/15/26(2) |
35
|
|
33
|
| 144A
6.500%, 10/15/28(2) |
55
|
|
50
|
Dell
International LLC
8.100%, 7/15/36 |
243
|
|
286
|
GTCR
W-2 Merger Sub LLC 144A
7.500%, 1/15/31(2) |
145
|
|
148
|
ION
Trading Technologies S.a.r.l. 144A
5.750%, 5/15/28(2) |
49
|
|
42
|
Kyndryl
Holdings, Inc.
3.150%, 10/15/31 |
180
|
|
143
|
Leidos,
Inc.
2.300%, 2/15/31 |
390
|
|
312
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
Information
Technology—continued |
|
|
Oracle
Corp.
3.850%, 4/1/60 |
$ 185
|
|
$ 127
|
Viasat,
Inc. 144A
5.625%, 9/15/25(2) |
345
|
|
330
|
| |
|
|
2,027
|
| |
|
|
|
| |
| Materials—4.9%
|
|
|
ArcelorMittal
S.A.
6.800%, 11/29/32 |
210
|
|
216
|
ASP
Unifrax Holdings, Inc. 144A
5.250%, 9/30/28(2) |
455
|
|
313
|
Bayport
Polymers LLC 144A
5.140%, 4/14/32(2) |
370
|
|
336
|
Cleveland-Cliffs,
Inc. 144A
6.750%, 3/15/26(2) |
295
|
|
295
|
Corp.
Nacional del Cobre de Chile 144A
5.950%, 1/8/34(2) |
235
|
|
230
|
Glencore
Funding LLC 144A
2.850%, 4/27/31(2) |
340
|
|
279
|
Illuminate
Buyer LLC 144A
9.000%, 7/1/28(2) |
202
|
|
190
|
| INEOS
Quattro Finance 2 plc |
|
|
|
| 144A
3.375%, 1/15/26(2) |
147
|
|
138
|
| 144A
9.625%, 3/15/29(2) |
200
|
|
206
|
LSB
Industries, Inc. 144A
6.250%, 10/15/28(2) |
260
|
|
242
|
Mauser
Packaging Solutions Holding Co. 144A
7.875%, 8/15/26(2) |
145
|
|
144
|
New
Enterprise Stone & Lime Co., Inc. 144A
9.750%, 7/15/28(2) |
405
|
|
404
|
| OCP
S.A. |
|
|
|
| 144A
5.625%, 4/25/24(2) |
660
|
|
657
|
| 144A
3.750%, 6/23/31(2) |
200
|
|
165
|
Taseko
Mines Ltd. 144A
7.000%, 2/15/26(2) |
230
|
|
215
|
Teck
Resources Ltd.
6.125%, 10/1/35 |
270
|
|
269
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Materials—continued
|
|
|
Trivium
Packaging Finance B.V. 144A
8.500%, 8/15/27(2) |
$ 259
|
|
$ 235
|
WR
Grace Holdings LLC 144A
5.625%, 8/15/29(2) |
172
|
|
145
|
| |
|
|
4,679
|
| |
|
|
|
| |
| Real
Estate—2.3% |
|
|
Ashton
Woods USA LLC 144A
4.625%, 4/1/30(2) |
340
|
|
284
|
| EPR
Properties |
|
|
|
| 4.750%,
12/15/26 |
260
|
|
245
|
| 3.600%,
11/15/31 |
95
|
|
74
|
| GLP
Capital LP |
|
|
|
| 3.250%,
1/15/32 |
132
|
|
106
|
| 6.750%,
12/1/33 |
135
|
|
136
|
Office
Properties Income Trust
4.500%, 2/1/25 |
575
|
|
512
|
Ontario
Teachers’ Cadillac Fairview Properties Trust 144A
2.500%, 10/15/31(2) |
285
|
|
222
|
Service
Properties Trust
4.500%, 3/15/25 |
290
|
|
280
|
| VICI
Properties LP |
|
|
|
| 4.950%,
2/15/30 |
110
|
|
102
|
| 5.125%,
5/15/32 |
185
|
|
170
|
| 144A
4.625%, 6/15/25(2) |
70
|
|
68
|
| |
|
|
2,199
|
| |
|
|
|
| |
| Utilities—4.9%
|
|
|
CMS
Energy Corp.
4.750%, 6/1/50 |
460
|
|
397
|
| Electricite
de France S.A. |
|
|
|
| 144A
6.250%, 5/23/33(2) |
345
|
|
356
|
| 144A
6.900%, 5/23/53(2) |
365
|
|
376
|
Enel
Finance International N.V. 144A
7.500%, 10/14/32(2) |
400
|
|
439
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Utilities—continued
|
|
|
Eskom
Holdings SOC Ltd. 144A
7.125%, 2/11/25(2) |
$ 640
|
|
$
637 |
| Ferrellgas
LP |
|
|
|
| 144A
5.375%, 4/1/26(2) |
90
|
|
86
|
| 144A
5.875%, 4/1/29(2) |
170
|
|
156
|
KeySpan
Gas East Corp. 144A
5.994%, 3/6/33(2) |
255
|
|
250
|
NRG
Energy, Inc. 144A
7.000%, 3/15/33(2) |
320
|
|
324
|
Perusahaan
Perseroan Persero PT Perusahaan Listrik Negara 144A
4.125%, 5/15/27(2) |
950
|
|
911
|
Southern
Co. (The) Series 21-A
3.750%, 9/15/51 |
490
|
|
429
|
Sunnova
Energy Corp. 144A
5.875%, 9/1/26(2) |
240
|
|
195
|
Vistra
Corp. 144A
8.000% (2)(6) |
125
|
|
122
|
| |
|
|
4,678
|
Total
Corporate Bonds and Notes
(Identified Cost $72,951) |
|
65,957
|
| |
|
|
|
| |
| Leveraged
Loans—13.5% |
| Aerospace—1.0%
|
|
|
Amentum
Government Services Holdings LLC (1 month Term SOFR + 4.000%)
9.331%, 2/15/29(5) |
128
|
|
128
|
Brown
Group Holding LLC (1 month Term SOFR + 2.850%)
8.198%, 6/7/28(5) |
162
|
|
161
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Aerospace—continued
|
|
|
| Dynasty
Acquisition Co., Inc. |
|
|
|
2023,
Tranche B-1 (1 month Term SOFR + 4.000%)
9.348%, 8/24/28(5) |
$ 128
|
|
$ 128
|
2023,
Tranche B-2 (1 month Term SOFR + 4.000%)
9.348%, 8/24/28(5) |
55
|
|
55
|
Kestrel
Bidco, Inc. (1 month Term SOFR + 3.100%)
8.443%, 12/11/26(5) |
149
|
|
146
|
Mileage
Plus Holdings LLC (3 month Term SOFR + 5.400%)
10.798%, 6/21/27(5) |
184
|
|
189
|
Peraton
Corp. Tranche B, First Lien (1 month Term SOFR + 3.850%)
9.198%, 2/1/28(5) |
147
|
|
145
|
Transdigm,
Inc. Tranche J (1 month Term SOFR + 3.250%)
0.000%, 2/14/31(5)(10) |
25
|
|
25
|
| |
|
|
977
|
| |
|
|
|
| |
| Chemicals—0.3%
|
|
|
LSF11
A5 Holdco LLC (1 month Term SOFR + 4.350%)
9.698%, 10/15/28(5) |
150
|
|
148
|
Nouryon
Finance B.V. (3 month Term SOFR + 4.100%)
9.467%, 4/3/28(5) |
60
|
|
60
|
Windsor
Holdings III LLC Tranche B (1 month Term SOFR + 4.500%)
9.820%, 8/1/30(5) |
125
|
|
125
|
| |
|
|
333
|
| |
|
|
|
| |
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Consumer
Non-Durables—0.6% |
|
|
AI
Aqua Merger Sub, Inc. 2023
0.000%, 7/31/28(5)(10) |
$ 138
|
|
$ 137
|
DS
Parent, Inc. Tranche B (6 month Term SOFR + 6.000%)
11.337%, 12/8/28(5) |
169
|
|
168
|
Kronos
Acquisition Holdings, Inc. Tranche B-1 (3 month Term SOFR + 4.012%)
9.402%, 12/22/26(5) |
294
|
|
291
|
| |
|
|
596
|
| |
|
|
|
| |
| Energy—0.8%
|
|
|
GIP
Pilot Acquisition Partners LP (3 month Term SOFR + 3.000%)
8.388%, 10/4/30(5) |
40
|
|
40
|
Hamilton
Projects Acquiror LLC (1 month Term SOFR + 4.614%)
9.963%, 6/17/27(5) |
157
|
|
158
|
Medallion
Midland Acquisition LLC (3 month Term SOFR + 4.012%)
9.402%, 10/18/28(5) |
156
|
|
156
|
Oryx
Midstream Services Permian Basin LLC 2023 (1 month Term SOFR + 3.364%)
8.694% - 8.710%, 10/5/28(5) |
138
|
|
138
|
Traverse
Midstream Partners LLC 2023, Tranche B (3 month Term SOFR + 3.850%)
9.240%, 2/16/28(5) |
293
|
|
292
|
| |
|
|
784
|
| |
|
|
|
| |
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—0.6%
|
|
|
Acrisure
LLC 2023 (3 month Term SOFR + 4.500%)
9.888%, 10/18/30(5) |
$ 100
|
|
$ 100
|
| AssuredPartners,
Inc. |
|
|
|
2020
(1 month Term SOFR + 3.614%)
0.000%, 2/12/27(5)(10) |
135
|
|
135
|
2023
(1 month Term SOFR + 3.750%)
9.098%, 2/12/27(5) |
20
|
|
20
|
Asurion
LLC Tranche B-9 (1 month Term SOFR + 3.364%)
8.713%, 7/31/27(5) |
135
|
|
132
|
Blackhawk
Network Holdings, Inc. First Lien (3 month Term SOFR + 2.750%)
8.138%, 6/15/25(5) |
152
|
|
151
|
| |
|
|
538
|
| |
|
|
|
| |
| Food
/ Tobacco—1.3% |
|
|
Del
Monte Foods, Inc. (1 month Term SOFR + 4.350% - 3 month PRIME + 3.250%)
9.698% - 11.750%, 5/16/29(5) |
144
|
|
142
|
Froneri
U.S., Inc. Tranche B-2 (1 month Term SOFR + 2.350%)
7.698%, 1/29/27(5) |
224
|
|
223
|
Naked
Juice LLC (3 month Term SOFR + 3.350%)
8.740%, 1/24/29(5) |
233
|
|
218
|
Pegasus
Bidco B.V. Tranche B-2 (3 month Term SOFR + 4.250%)
9.630%, 7/12/29(5) |
119
|
|
119
|
Shearer’s
Foods LLC First Lien (1 month Term SOFR + 3.614%)
8.963%, 9/23/27(5) |
149
|
|
149
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Food
/ Tobacco—continued |
|
|
Sigma
Bidco B.V. Tranche B-7 (1 month Term SOFR + 3.000%)
0.000%, 1/2/28(5)(10) |
$ 279
|
|
$ 270
|
Triton
Water Holdings, Inc. First Lien (3 month Term SOFR + 3.512%)
8.902%, 3/31/28(5) |
140
|
|
138
|
| |
|
|
1,259
|
| |
|
|
|
| |
| Forest
Prod / Containers—0.1% |
|
|
TricorBraun,
Inc. (1 month Term SOFR + 3.364%)
8.713%, 3/3/28(5) |
136
|
|
133
|
| Gaming
/ Leisure—0.4% |
|
|
ECL
Entertainment LLC Tranche B (3 month Term SOFR + 4.750%)
10.140%, 9/3/30(5) |
155
|
|
154
|
Ontario
Gaming GTA Ltd. Partnership Tranche B (3 month Term SOFR + 4.250%)
9.640%, 8/1/30(5) |
60
|
|
60
|
Playa
Hotels & Resorts B.V. (1 month Term SOFR + 4.250%)
9.580%, 1/5/29(5) |
146
|
|
146
|
| |
|
|
360
|
| |
|
|
|
| |
| Health
Care—2.2% |
|
|
Amneal
Pharmaceuticals LLC (1 month Term SOFR + 5.500%)
10.822%, 5/4/28(5) |
140
|
|
133
|
Bausch
& Lomb Corp. (1 month Term SOFR + 4.000%)
9.348%, 9/14/28(5) |
100
|
|
98
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Health
Care—continued |
|
|
CHG
Healthcare Services, Inc. First Lien (1 month Term SOFR + 3.364%)
8.713%, 9/29/28(5) |
$ 107
|
|
$ 106
|
Gainwell
Acquisition Corp. Tranche B (3 month Term SOFR + 4.100%)
9.490%, 10/1/27(5) |
147
|
|
142
|
Hunter
Holdco 3 Ltd. First Lien (3 month Term SOFR + 4.350%)
9.740%, 8/19/28(5) |
114
|
|
112
|
IVC
Acquisition Ltd. (1 month Term SOFR + 5.500%)
0.000%, 11/17/28(5)(10) |
95
|
|
94
|
Medline
Borrower LP (1 month Term SOFR + 3.114%)
8.463%, 10/23/28(5) |
303
|
|
303
|
Phoenix
Guarantor, Inc. Tranche B-1 (1 month Term SOFR + 3.364%)
8.713%, 3/5/26(5) |
134
|
|
134
|
Sotera
Health Holdings LLC (1 month Term SOFR + 3.750%)
9.091%, 12/11/26(5) |
65
|
|
65
|
Star
Parent, Inc. Tranche B (1 month Term SOFR + 4.000%)
9.386%, 9/28/30(5) |
310
|
|
303
|
Sunshine
Luxembourg VII S.a.r.l. Tranche B-3 (3 month Term SOFR + 3.850%)
9.240%, 10/1/26(5) |
141
|
|
142
|
Upstream
Newco, Inc. 2021 (1-3 month Term SOFR + 4.512%)
9.713% - 9.895%, 11/20/26(5) |
187
|
|
173
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Health
Care—continued |
|
|
Viant
Medical Holdings, Inc. First Lien (1 month Term SOFR + 3.864%)
9.213%, 7/2/25(5) |
$ 253
|
|
$ 249
|
| |
|
|
2,054
|
| |
|
|
|
| |
| Information
Technology—2.5% |
|
|
| Applied
Systems, Inc. |
|
|
|
2026
(3 month Term SOFR + 4.500%)
9.890%, 9/18/26(5) |
134
|
|
135
|
Second
Lien (3 month Term SOFR + 6.750%)
12.140%, 9/17/27(5) |
247
|
|
248
|
Central
Parent LLC Tranche B (3 month Term SOFR + 4.000%)
9.406%, 7/6/29(5) |
283
|
|
283
|
ConnectWise
LLC (1 month Term SOFR + 3.614%)
8.963%, 9/29/28(5) |
83
|
|
81
|
Epicor
Software Corp. Tranche C (1 month Term SOFR + 3.364%)
8.713%, 7/30/27(5) |
164
|
|
164
|
GTCR
W Merger Sub LLC Tranche B (1 month Term SOFR + 3.000%)
0.000%, 9/20/30(5)(10) |
85
|
|
85
|
Indicor
LLC (3 month Term SOFR + 4.500%)
9.890%, 11/22/29(5) |
194
|
|
194
|
Mosel
Bidco SE Tranche B (3 month Term SOFR + 4.750%)
10.136%, 9/16/30(5) |
92
|
|
92
|
NCR
Atleos LLC Tranche B (1 month Term SOFR + 4.850%)
10.198%, 3/27/29(5) |
300
|
|
293
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
Information
Technology—continued |
|
|
Polaris
Newco LLC First Lien (1 month Term SOFR + 4.114%)
9.463%, 6/2/28(5) |
$ 155
|
|
$ 150
|
Project
Ruby Ultimate Parent Corp. First Lien (1 month Term SOFR + 3.364%)
8.713%, 3/10/28(5) |
194
|
|
192
|
RealPage,
Inc. First Lien (1 month Term SOFR + 3.114%)
8.463%, 4/24/28(5) |
146
|
|
142
|
Sophia
LP Tranche B (1 month Term SOFR + 3.600%)
8.948%, 10/7/27(5) |
174
|
|
174
|
| UKG,
Inc. |
|
|
|
2021,
Second Lien (3 month Term SOFR + 5.350%)
10.764%, 5/3/27(5) |
10
|
|
10
|
2021-2,
First Lien (3 month Term SOFR + 3.350%)
8.764%, 5/4/26(5) |
162
|
|
163
|
| |
|
|
2,406
|
| |
|
|
|
| |
| Manufacturing—0.8%
|
|
|
Chart
Industries, Inc. Tranche B (1 month Term SOFR + 3.350%)
8.670%, 3/15/30(5) |
144
|
|
144
|
CPM
Holdings, Inc. (1 month Term SOFR + 4.500%)
9.827%, 9/28/28(5) |
166
|
|
166
|
Filtration
Group Corp. 2021 (1 month Term SOFR + 3.614%)
8.963%, 10/21/28(5) |
220
|
|
219
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Manufacturing—continued
|
|
|
Safe
Fleet Holdings LLC 2022 (1 month Term SOFR + 3.850%)
9.191%, 2/23/29(5) |
$ 189
|
|
$ 189
|
| |
|
|
718
|
| |
|
|
|
| |
Media
/ Telecom -
Broadcasting—0.1% |
|
|
Terrier
Media Buyer, Inc. 2021, Tranche B (3 month Term SOFR + 3.600%)
8.990%, 12/17/26(5) |
150
|
|
137
|
Media
/ Telecom - Cable/Wireless
Video—0.4% |
|
|
DIRECTV
Financing LLC (1-3 month Term SOFR + 5.262%)
10.463% - 10.650%, 8/2/27(5) |
240
|
|
236
|
Eagle
Broadband Investments LLC (3 month Term SOFR + 3.262%)
8.652%, 11/12/27(5) |
144
|
|
140
|
| |
|
|
376
|
| |
|
|
|
| |
Media
/ Telecom - Diversified
Media—0.5% |
|
|
Century
DE Buyer LLC (3 month Term SOFR + 4.000%)
9.390%, 10/30/30(5) |
108
|
|
108
|
McGraw-Hill
Education, Inc. (1 month Term SOFR + 4.864%)
10.213%, 7/28/28(5) |
170
|
|
167
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
Media
/ Telecom - Diversified
Media—continued |
|
|
Neptune
Bidco U.S., Inc. Tranche B (3 month Term SOFR + 5.100%)
10.507%, 4/11/29(5) |
$ 174
|
|
$ 156
|
| |
|
|
431
|
| |
|
|
|
| |
| Retail—0.1%
|
|
|
PetsMart
LLC (1 month Term SOFR + 3.850%)
9.198%, 2/11/28(5) |
126
|
|
124
|
| Service—1.3%
|
|
|
Ascend
Learning LLC (1 month Term SOFR + 3.600%)
8.948%, 12/11/28(5) |
154
|
|
150
|
BrightView
Landscapes LLC Tranche B (3 month Term SOFR + 3.250%)
8.633%, 4/20/29(5) |
180
|
|
179
|
DG
Investment Intermediate Holdings 2, Inc. 2022 (1 month Term SOFR + 4.750%)
10.098%, 3/31/28(5) |
164
|
|
163
|
DXP
Enterprises, Inc. (3 month Term SOFR + 4.850%)
10.291%, 10/15/30(5) |
110
|
|
110
|
Garda
World Security Corp. Tranche B-2 (3 month Term SOFR + 4.350%)
9.746%, 10/30/26(5) |
65
|
|
65
|
Grab
Holdings, Inc. (1 month Term SOFR + 4.614%)
9.963%, 1/29/26(5) |
76
|
|
76
|
Kuehg
Corp. (3 month Term SOFR + 5.000%)
10.390%, 6/12/30(5) |
225
|
|
225
|
The
Hertz Corp. 2023 (1 month Term SOFR + 3.750%)
9.080%, 6/30/28(5) |
88
|
|
87
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Service—continued
|
|
|
TMF
Sapphire Bidco B.V. Tranche B-2 (3 month Term SOFR + 5.000%)
10.414%, 5/3/28(5) |
$ 70
|
|
$
70 |
Trugreen
Ltd. Partnership First Lien (1 month Term SOFR + 4.100%)
9.448%, 11/2/27(5) |
150
|
|
141
|
| |
|
|
1,266
|
| |
|
|
|
| |
| Transportation
- Automotive—0.4% |
|
|
American
Axle & Manufacturing, Inc. Tranche B, First Lien (1-3 month Term SOFR + 3.600%)
8.921% - 9.007%, 12/13/29(5) |
96
|
|
96
|
Clarios
Global LP 2023 (1 month Term SOFR + 3.750%)
9.098%, 5/6/30(5) |
115
|
|
115
|
PAI
Holdco, Inc. Tranche B (3 month Term SOFR + 4.012%)
9.395%, 10/28/27(5) |
137
|
|
126
|
| |
|
|
337
|
| |
|
|
|
| |
| Utilities—0.1%
|
|
|
Generation
Bridge Northeast LLC Tranche B (1 month Term SOFR + 4.250%)
9.598%, 8/7/29(5) |
70
|
|
70
|
Total
Leveraged Loans
(Identified Cost $12,875) |
|
12,899
|
| |
Shares
|
|
| Preferred
Stocks—1.4% |
| Financials—1.4%
|
|
| Capital
Farm Credit ACA Series 1 144A, 5.000%(2) |
275
(11) |
250
|
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Shares
|
|
Value
|
| Financials—continued
|
|
|
| MetLife,
Inc. Series D, 5.875% |
213
(11) |
|
$
202 |
| Truist
Financial Corp. Series Q, 5.100% |
315
(11) |
|
271
|
| Zions
Bancorp NA, 9.561% |
23,200
|
|
585
|
| |
|
|
1,308
|
Total
Preferred Stocks
(Identified Cost $1,385) |
|
1,308
|
| |
|
|
|
| |
| Common
Stocks—0.1% |
| Consumer
Discretionary—0.1% |
|
|
| MYT
Holding LLC Class B(7)(12) |
29,850
|
|
5
|
| NMG
Parent LLC(7)(12) |
618
|
|
68
|
| |
|
|
73
|
Total
Common Stocks
(Identified Cost $215) |
|
73
|
Total
Long-Term Investments—142.0%
(Identified Cost $148,714) |
|
135,684
|
TOTAL
INVESTMENTS—142.0%
(Identified Cost $148,714) |
|
$
135,684(13) |
| Other
assets and liabilities, net—(42.0)% |
|
(40,106
) |
| NET
ASSETS—100.0% |
|
$
95,578 |
| Abbreviations:
|
| ABS
|
Asset-Backed
Securities |
| ACA
|
American
Capital Access Financial Guarantee Corp. |
| GMTN
|
Global
Medium Term Note |
| JSC
|
Joint Stock
Company |
| LIBOR
|
London
Interbank Offered Rate |
| LLC
|
Limited
Liability Company |
| LP
|
Limited
Partnership |
| MSCI
|
Morgan
Stanley Capital International |
| NA
|
National
Association |
| SOFR
|
Secured
Overnight Financing Rate |
| Footnote
Legend: |
|
(1) |
Par
Value disclosed in foreign currency is reported in thousands. |
|
(2) |
Security
exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2023, these securities amounted to a value
of $71,061 or 74.3% of net assets. |
|
(3) |
Security
in default; no interest payments are being received. |
|
(4) |
Regulation
S security. Security is offered and sold outside of the United States; therefore, it is exempt from registration with the SEC under Rules 903 and 904 of the Securities Act of 1933. |
|
(5) |
Variable
rate security. Rate disclosed is as of November 30, 2023. Information in parenthesis represents benchmark and reference rate for each security. Certain variable rate securities are not based on a published reference rate and spread but are
determined by the issuer or agent and are based on current market conditions, or, for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread
in their descriptions. |
|
(6) |
No
contractual maturity date. |
|
(7) |
The
value of this security was determined using significant unobservable inputs and is reported as a Level 3 security in the Fair Value Hierarchy table located after the Schedule of Investments. |
|
(8) |
Issued
with a zero coupon. Income is recognized through the accretion of discount. |
|
(9) |
Security
in default; interest payments are being received. |
|
(10) |
This loan
will settle after November 30, 2023, at which time the interest rate, calculated on the base lending rate and the agreed upon spread on trade date, will be reflected. |
|
(11) |
Value
shown as par value. |
For information regarding the abbreviations, see the Key
Investment Terms starting on page 6.
See Notes to Financial Statements
Global Multi-Sector Income
Fund
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
|
(12) |
Non-income
producing. |
|
(13) |
All
or a portion of securities is segregated as collateral for borrowings. |
| Foreign
Currencies: |
|
| BRL
|
Brazilian
Real |
The following table summarizes the value of
the Fund’s investments as of November 30, 2023, based on the inputs used to value them (See Security Valuation Note 2A in the Notes to Financial Statements):
| |
Total
Value at
November 30, 2023 |
|
Level
1
Quoted Prices |
|
Level
2
Significant
Observable
Inputs |
|
Level
3
Significant
Unobservable
Inputs |
| Assets:
|
|
|
|
|
|
|
|
| Debt
Instruments: |
|
|
|
|
|
|
|
| U.S.
Government Securities |
$
3,008 |
|
$
— |
|
$
3,008 |
|
$—
|
| Municipal
Bonds |
2,158
|
|
—
|
|
2,158
|
|
—
|
| Foreign
Government Securities |
26,153
|
|
—
|
|
26,153
|
|
—
|
| Mortgage-Backed
Securities |
13,248
|
|
—
|
|
13,248
|
|
—
|
| Asset-Backed
Securities |
10,880
|
|
—
|
|
10,880
|
|
—
|
| Corporate
Bonds and Notes |
65,957
|
|
—
|
|
65,952
|
|
5
|
| Leveraged
Loans |
12,899
|
|
—
|
|
12,899
|
|
—
|
| Equity
Securities: |
|
|
|
|
|
|
|
| Preferred
Stocks |
1,308
|
|
585
|
|
723
|
|
—
|
| Common
Stocks |
73
|
|
—
|
|
—
|
|
73
|
| Total
Investments |
$135,684
|
|
$585
|
|
$135,021
|
|
$78
|
Security held by
the Fund with an end of period value of $10 was transferred from Level 3 to Level 2 due to an increase in trading activities during the period.
Some of the Fund’s investments that
were categorized as Level 3 may have been valued utilizing third party pricing information without adjustment. If applicable, such valuations are based on unobservable inputs. A significant change in third party information could result in a
significantly lower or higher value of Level 3 investments.
Management has determined that the amount of
Level 3 securities compared to total net assets is not material; therefore, the roll-forward of Level 3 securities and assumptions are not shown for the period ended November 30, 2023.
See Notes to
Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 2023
(Reported in thousands except shares and per share amounts)
| Assets
|
|
|
Investment in securities at value (Identified cost
$148,714)
|
$
135,684 |
|
Cash
|
2,336
|
| Receivables
|
|
|
Investment securities sold
|
1,235
|
|
Dividends and
interest
|
1,637
|
|
Prepaid Trustees’
retainer
|
1
|
|
Prepaid expenses and other assets (Note
3)
|
44
|
|
Total
assets
|
140,937
|
| Liabilities
|
|
|
Borrowings (Note
7)
|
43,000
|
| Payables
|
|
|
Investment securities
purchased
|
1,638
|
|
Interest on borrowings (Note
7)
|
491
|
|
Investment advisory fees (Note
3)
|
107
|
|
Trustee deferred compensation plan (Note
3)
|
42
|
|
Professional fees
|
22
|
|
Administration and accounting
fees
|
13
|
|
Other accrued
expenses
|
46
|
|
Total
liabilities
|
45,359
|
|
Net
Assets
|
$
95,578 |
| Net
Assets Consist of: |
|
|
Capital paid on shares of beneficial interest (no par value, unlimited
authorization)
|
$
143,094 |
|
Total distributable earnings (accumulated
losses)
|
(47,516)
|
|
Net
Assets
|
$
95,578 |
|
Common Shares
Outstanding
|
11,313,094
|
|
Net Asset Value Per
Share(a)
|
$
8.45 |
|
(a) |
Net
Asset Value Per Share is calculated using unrounded net assets. |
See Notes to Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
STATEMENT OF OPERATIONS
YEAR ENDED November 30, 2023
($ reported in thousands)
| Investment
Income |
|
|
Interest
|
$
8,725 |
|
Dividends
|
174
|
|
Total investment
income
|
8,899
|
| Expenses
|
|
|
Investment advisory
fees
|
1,361
|
|
Administration and accounting
fees
|
160
|
|
Professional fees
|
48
|
|
Printing fees and expenses
|
30
|
|
Trustees’ fees and
expenses
|
19
|
|
Transfer agent fees and
expenses
|
13
|
|
Custodian fees
|
6
|
|
Miscellaneous
expenses
|
48
|
|
Total expenses before interest
expense
|
1,685
|
|
Interest expense on borrowings (Note
7)
|
2,701
|
|
Total expenses after interest
expense
|
4,386
|
|
Net investment income
(loss)
|
4,513
|
| Net
Realized and Unrealized Gain (Loss) on Investments |
|
| Net
realized gain (loss) from: |
|
|
Investments
|
(7,170)
|
|
Foreign currency
transactions
|
2
|
| Net
change in unrealized appreciation (depreciation) on: |
|
|
Investments
|
7,930
|
|
Foreign currency
transactions
|
(—)
(1) |
|
Net realized and unrealized gain (loss) on
investments
|
762
|
|
Net increase (decrease) in net assets resulting from
operations
|
$
5,275 |
|
(1) |
Amount
is less than $500 (not in thousands). |
See Notes to Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
STATEMENTS OF CHANGES IN NET ASSETS
($ reported in
thousands)
| |
Year
Ended
November 30, 2023 |
|
Year
Ended
November 30, 2022 |
Increase
(Decrease) In Net Assets
From Operations |
|
|
|
|
Net investment income
(loss)
|
$
4,513 |
|
$
5,231 |
|
Net realized gain
(loss)
|
(7,168)
|
|
(6,184)
|
|
Net change in unrealized appreciation
(depreciation)
|
7,930
|
|
(19,080)
|
|
Increase (decrease) in net assets resulting from
operations
|
5,275
|
|
(20,033)
|
| From
Dividends and Distributions to Shareholders |
|
|
|
|
Net investment income and net realized
gains
|
(4,629)
|
|
(5,220)
|
|
Return of
capital
|
(6,232)
|
|
(5,641)
|
|
Dividends and Distributions to
Shareholders
|
(10,861)
|
|
(10,861)
|
|
Net increase (decrease) in net
assets
|
(5,586)
|
|
(30,894)
|
| Net
Assets |
|
|
|
|
Beginning of
period
|
101,164
|
|
132,058
|
|
End of
period
|
$
95,578 |
|
$101,164
|
See Notes to Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
STATEMENT OF CASH FLOWS
YEAR ENDED November 30,
2023
($ reported in thousands)
| Increase
(Decrease) in cash |
|
| Cash
flows provided by (used for) operating activities: |
|
|
Net increase (decrease) in net assets resulting from operations
|
$
5,275 |
| Adjustments
to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities: |
|
|
Proceeds from sales and paydowns of long-term investments
|
88,812
|
|
(Increase) Decrease in investment securities sold receivable
|
(224)
|
|
Purchases of long-term investments
|
(80,697)
|
|
Increase (Decrease) in investment securities purchased payable
|
(132)
|
|
Net (purchases) or sales of short-term
investments
|
3,439
|
|
Net change in unrealized (appreciation)/depreciation
on
investments
|
(7,930)
|
|
Net realized (gain)/loss on investments
|
7,170
|
|
Amortization of premium and accretion of discounts on investments
|
(344)
|
|
(Increase) Decrease in dividends and interest receivable
|
(28)
|
|
(Increase) Decrease in prepaid expenses and other
assets
|
(2)
|
|
Increase (Decrease) in interest payable on
borrowings
|
139
|
|
Increase (Decrease) in affiliated expenses
payable
|
(4)
|
|
Increase (Decrease) in non-affiliated expenses
payable
|
17
|
|
Cash provided by (used for) operating
activities
|
15,491
|
| Cash
provided by (used for) financing activities: |
|
|
Cash payments to reduce borrowings
|
(2,400)
|
|
Cash distributions paid to shareholders
|
(10,861)
|
|
Cash provided by (used for) financing
activities
|
(13,261)
|
|
Net increase (decrease) in
cash
|
2,230
|
|
Cash and foreign currency at beginning of
period
|
106
|
|
Cash and foreign currency at end of
period
|
$
2,336 |
| Supplemental
cash flow information: |
|
|
Cash paid during the period for interest expense on
borrowings
|
$
2,562 |
See Notes to Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
| |
Year
Ended November 30, |
| |
2023
|
|
2022
|
|
2021
|
|
2020
|
|
2019
|
| PER
SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of
period
|
$
8.94 |
|
$
11.67 |
|
$
12.55 |
|
$
13.16 |
|
$
13.30 |
| Income
(loss) from investment operations: |
|
|
|
|
|
|
|
|
|
|
Net investment income
(loss)(1)
|
0.40
|
|
0.46
|
|
0.52
|
|
0.55
|
|
0.58
|
|
Net realized and unrealized gain
(loss)
|
0.07
|
|
(2.23)
|
|
(0.32)
|
|
0.20
|
|
0.79
|
|
Payment from
affiliate
|
—
|
|
—
|
|
—
|
|
—
|
|
—
(2) |
|
Total from investment
operations
|
0.47
|
|
(1.77)
|
|
0.20
|
|
0.75
|
|
1.37
|
| Dividends
and Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
(0.41)
|
|
(0.46)
|
|
(0.52)
|
|
(0.51)
|
|
(0.49)
|
|
Return of
capital
|
(0.55)
|
|
(0.50)
|
|
(0.56)
|
|
(0.85)
|
|
(1.02)
|
|
Total dividends and distributions to
shareholders
|
(0.96)
|
|
(0.96)
|
|
(1.08)
|
|
(1.36)
|
|
(1.51)
|
|
Net asset value, end of
period
|
$
8.45 |
|
$
8.94 |
|
$
11.67 |
|
$
12.55 |
|
$
13.16 |
|
Market value, end of
period(3)
|
$
7.35 |
|
$
8.12 |
|
$
11.56 |
|
$
11.69 |
|
$
12.54 |
|
Total return, net asset
value(4)
|
7.19%
|
|
(14.70)%
|
|
1.76%
|
|
7.70%
|
|
11.82%
|
|
Total return, market
value(4)
|
2.66%
|
|
(21.78)%
|
|
8.22%
|
|
5.28%
|
|
20.61%
|
| RATIOS/SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses after interest expense to average net
assets(5)
|
4.46%
|
|
2.76%
|
|
2.14%
|
|
2.40%
|
|
3.13%
|
|
Ratio of net investment income (loss) to average net
assets
|
4.59%
|
|
4.62%
|
|
4.28%
|
|
4.51%
|
|
4.39%
|
|
Portfolio turnover
rate
|
57%
|
|
44%
|
|
54%
|
|
75%
|
|
62%
|
|
Net assets, end of period
(000’s)
|
$95,578
|
|
$101,164
|
|
$132,058
|
|
$141,880
|
|
$148,730
|
|
Borrowings, end of period
(000’s)
|
$43,000
|
|
$
45,400 |
|
$
52,500 |
|
$
52,500 |
|
$
57,000 |
|
Asset coverage, per $1,000 principal amount of
borrowings(6)
|
$
3,223 |
|
$
3,228 |
|
$
3,515 |
|
$
3,702 |
|
$
3,609 |
|
(1) |
Calculated
using average shares outstanding. |
|
(2) |
Amount
is less than $0.005 per share. |
|
(3) |
Closing
Price – New York Stock Exchange. |
|
(4) |
Total return
on market value is calculated assuming a purchase of common shares on the opening of the first day and sale on the closing of the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund’s Automatic Reinvestment and Cash Purchase Plan. Total return on market value is not annualized for periods of less than one year. Brokerage commissions that a shareholder may pay are not reflected.
Total return on market value does not reflect the deduction of taxes that a shareholder may pay on fund distributions or the sale of fund shares. Total return on net asset value uses the same methodology, but with use of net asset value for the
beginning and ending values. |
|
(5) |
Ratio of
total expenses, before interest expense on borrowings, was 1.71%, 1.74%, 1.74%, 1.74% and 1.86% for the years ended November 30, 2023, 2022, 2021, 2020 and 2019, respectively. |
|
(6) |
Represents
value of net assets plus the borrowings at the end of the period divided by the borrowings at the end of the period multiplied by $1,000. |
See Notes to Financial Statements
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 2023
Note 1. Organization
Virtus Global Multi-Sector Income Fund (the
“Fund”) is a closed-end, diversified management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund was formed as a statutory trust under the laws of the State of
Delaware on August 23, 2011. The Fund commenced operations on February 23, 2012. The Fund’s investment objective is outlined in the Manager’s Discussion of Fund Performance pages.
Note 2. Significant Accounting Policies
The Fund is an investment company that
follows the accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.
The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could differ from those estimates and those differences could be significant.
| A.
|
Security Valuation |
| |
The
Fund’s Board of Trustees has designated the investment adviser as the valuation designee to perform fair valuations pursuant to Rule 2a-5 under the Investment Company Act of 1940. The Fund utilizes a fair value hierarchy which prioritizes the
inputs to valuation techniques used to measure fair value into three broad levels. The Fund’s policy is to recognize transfers into or out of Level 3 at the end of the reporting period. |
•
Level 1 – quoted prices in active markets for identical securities (security types generally include listed equities).
•
Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
•
Level 3 – prices determined using significant unobservable inputs (including the investment adviser’s Valuation Committee’s own assumptions in determining the fair value of investments).
A description of the valuation techniques
applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:
Equity securities are valued at the
official closing price (typically last sale) on the exchange on which the securities are primarily traded or, if no closing price is available, at the last bid price and are categorized as Level 1 in the hierarchy. Illiquid, restricted equity
securities and illiquid private placements are internally fair valued by the investment adviser’s Valuation Committee, and are generally categorized as Level 3 in the hierarchy.
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Certain non-U.S. securities may be fair
valued in cases where closing prices are not readily available or are deemed not reflective of readily available market prices. For example, significant events (such as movement in the U.S. securities market, or other regional and local
developments) may occur between the time that non-U.S. markets close (where the security is principally traded) and the time that the Fund calculates its net asset value (“NAV”) at the close of regular trading on the New York Stock
Exchange (“NYSE”) (generally 4 p.m. Eastern time) that may impact the value of securities traded in these non-U.S. markets. In such cases, the Fund fair values non-U.S. securities using an independent pricing service which considers the
correlation of the trading patterns of the non-U.S. security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, ETFs, and certain indexes, as well as prices for similar securities.
Such fair valuations are categorized as Level 2 in the hierarchy. Because the frequency of significant events is not predictable, fair valuation of certain non-U.S. common stocks may occur on a frequent basis.
Debt instruments, including convertible
bonds, and restricted securities, are valued based on evaluated quotations received from independent pricing services or from dealers who make markets in such securities. For most bond types, the pricing service utilizes matrix pricing that
considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type, activity of the underlying equities, and current day trade information, as well as dealer supplied prices.
These valuations are generally categorized as Level 2 in the hierarchy. Structured debt instruments, such as mortgage-backed and asset-backed securities may also incorporate collateral analysis and utilize cash flow models for valuation and are
generally categorized as Level 2 in the hierarchy. Pricing services do not provide pricing for all securities and therefore indicative bids from dealers are utilized which are based on pricing models used by market makers in the security and are
generally categorized as Level 2 in the hierarchy. Debt instruments that are internally fair valued by the investment adviser’s Valuation Committee are generally categorized as Level 3 in the hierarchy.
Listed derivatives, such as options, that
are actively traded are valued at the last posted settlement price from the exchange where they are principally traded and are categorized as Level 1 in the hierarchy. Over-the-counter derivative contracts, which include forward currency contracts
and equity-linked instruments, do not require material subjectivity as pricing inputs are observed from actively quoted markets and are categorized as Level 2 in the hierarchy.
Investments in open-end mutual funds are
valued at NAV. Investments in closed-end funds and ETFs are valued as of the close of regular trading on the NYSE each business day. Each is categorized as Level 1 in the hierarchy.
A summary of the inputs used to value the
Fund’s net assets by each major security type is disclosed at the end of the Schedule of Investments for the Fund. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing
in those securities.
| B.
|
Security Transactions and
Investment Income |
| |
Security
transactions are recorded on the trade date. Realized gains and losses from the sale of securities are determined on the identified cost basis. Dividend income and capital gain distributions are recognized on the ex-dividend date or, in the case of
certain |
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
foreign securities, as soon
as the Fund is notified. Interest income is recorded on the accrual basis. The Fund amortizes premiums and accretes discounts using the effective interest method. Premiums on callable debt instruments are amortized to interest income to the earliest
call date using the effective interest method. |
| |
Any distributions from
underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. |
| C.
|
Income Taxes |
| |
It is the Fund’s
intention to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) and to distribute substantially all of its taxable income and capital gains, if any, to its shareholders. Therefore,
no provision for federal income taxes or excise taxes has been made. |
| |
The Fund may be subject to
foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable based upon current interpretations of the tax rules and regulations that
exist in the markets in which it invests. |
| |
Management of the Fund has
concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. The Fund’s U.S. federal income tax return is generally subject to examination by the Internal Revenue Service for a
period of three years after it is filed. State, local and/or non-U.S. tax returns and/or other filings may be subject to examination for different periods, depending upon the tax rules of each applicable jurisdiction. |
| D.
|
Distributions to Shareholders
|
| |
The Fund declares
distributions on a monthly basis. Distributions are recorded by the Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. |
| |
Distributions may represent
earnings from net investment income, realized capital gains, or, if necessary, return of capital. |
| E.
|
Foreign Currency Transactions
|
| |
Non-U.S.
investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the foreign currency exchange rate effective at the end of the reporting period. Cost of investments is translated at
the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement date of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise,
the gain or loss resulting from a change in currency exchange rates between the date income is accrued and the date it is paid is treated as a gain or loss on foreign currency. For fixed income instruments, the Fund bifurcates that portion of the
results of operations arising from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held and such fluctuations are included with the net realized and unrealized gain or
loss on foreign currency transactions. For equity securities, the Fund does not isolate that portion of the results of operations arising from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market
prices of securities held and such fluctuations are included with the net realized and unrealized gain or loss on investments. |
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| F.
|
Payment-In-Kind Securities
|
| |
The Fund may invest in
payment-in-kind securities, which are debt or preferred stock securities that require or permit payment of interest in the form of additional securities. Payment-in-kind securities allow the issuer to avoid or delay the need to generate cash to meet
current interest payments and, as a result, may involve greater risk than securities that pay interest currently or in cash. |
| G.
|
When-Issued Purchases and
Forward Commitments (Delayed Delivery) |
| |
The Fund may engage in
when-issued or forward commitment transactions. Securities purchased on a when-issued or forward commitment basis are also known as delayed delivery transactions. Delayed delivery transactions involve a commitment by the Fund to purchase or sell a
security at a future date (ordinarily up to 90 days later). When-issued or forward commitments enable the Fund to lock in what is believed to be an attractive price or yield on a particular security for a period of time, regardless of future changes
in interest rates. The Fund records when-issued and forward commitment securities on the trade date. The Fund maintains collateral for the securities purchased. Securities purchased on a when-issued or forward commitment basis begin earning interest
on the settlement date. |
| H.
|
Leveraged Loans |
| |
The Fund may invest in direct
debt instruments which are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates. Leveraged loans are generally non-investment grade and often involve borrowers that are highly leveraged. The Fund
may invest in obligations of borrowers who are in bankruptcy proceedings. Leveraged loans are typically senior in the corporate capital structure of the borrower. A loan is often administered by a bank or other financial institution (the
“lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the leveraged loan. The Fund’s investments in loans may be in the form of participations in loans or assignments of all or a
portion of loans from third parties. When investing in loan participations, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the loan participation and only upon
receipt by the lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the leveraged loan with the borrower. As a result, the Fund may be subject to the credit risk of both the borrower and the
lender that is selling the leveraged loan. When the Fund purchases assignments from lenders it acquires direct rights against the borrower on the loan. |
| |
The Fund may invest in
multiple series or tranches of a loan, which may have varying terms and carry different associated risks. Leveraged loans may involve foreign borrowers and investments may be denominated in foreign currencies. Direct indebtedness of emerging
countries involves a risk that the government entities responsible for the repayment of the debt may be unable, or unwilling, to pay the principal and interest when due. |
| |
The
leveraged loans have floating rate loan interests which generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally LIBOR, SOFR, the prime rate offered by
one or more U.S. banks or the certificate of deposit rate. When a leveraged loan is purchased the Fund may pay an assignment fee. On an ongoing basis, the Fund may |
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
receive a commitment fee
based on the undrawn portion of the underlying line of credit portion of a leveraged loan. Prepayment penalty fees are received upon the prepayment of a leveraged loan by a borrower. Prepayment penalty, facility, commitment, consent and amendment
fees are recorded to income as earned or paid. |
| |
The Fund may invest in both
secured loans and “covenant lite” loans which have few or no financial maintenance covenants that would require a borrower to maintain certain financial metrics. The lack of financial maintenance covenants in covenant lite loans
increases the risk that the Fund will experience difficulty or delays in enforcing its rights on its holdings of such loans, which may result in losses, especially during a downturn in the credit cycle. |
| I.
|
Expenses
|
| |
Expenses incurred together by
the Fund and other affiliated mutual funds are allocated in proportion to the net assets of each such fund, except where allocation of direct expenses to the Fund and each such other fund, or an alternative allocation method, can be more
appropriately used. |
| |
In addition to the net annual
operating expenses that the Fund bears directly, the shareholders of the Fund indirectly bear the pro-rata expenses of any underlying mutual funds in which the Fund invests. |
| J.
|
Cash and Cash Equivalents
|
| |
Cash and
cash equivalents include deposits held at financial institutions, which are available for the Fund’s use with no restrictions, and are inclusive of dollar denominated and foreign currency. |
Note 3. Investment Advisory Fees and Related Party
Transactions
($ reported in
thousands)
| A.
|
Investment Adviser |
| |
Virtus Investment Advisers,
Inc. (the “Adviser”), an indirect, wholly-owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”), is the investment adviser to the Fund. The Adviser manages the Fund’s investment program and general operations
of the Fund, including oversight of the Fund’s subadviser. |
| |
As compensation for its
services to the Fund, the Adviser receives a fee at an annual rate of 0.95% of the Fund’s average daily Managed Assets, which is calculated daily and paid monthly. “Managed Assets” is defined as the value of the total assets of the
Fund minus the sum of all accrued liabilities of the Fund (other than the aggregate amount of any outstanding borrowings or other indebtedness, entered into for the purpose of leverage). |
| B.
|
Subadviser
|
| |
Virtus Fixed Income Advisers,
LLC, an indirect, wholly-owned subsidiary of Virtus, acting through its division, Newfleet Asset Management, is the Fund’s subadviser. The subadviser is responsible for the day-to-day portfolio management of the Fund for which it is paid a fee
by the Adviser. |
| C.
|
Administration Services
|
| |
Virtus
Fund Services, LLC, an indirect, wholly-owned subsidiary of Virtus, serves as administrator to the Fund. For the services provided by the administrator under the |
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
Administration Agreement, the
Fund pays the administrator an asset-based fee calculated on the Fund’s average daily Managed Assets. This fee is calculated daily and paid monthly. |
| |
For the year ended November
30, 2023, the Fund incurred administration fees totaling $143 which are included in the Statement of Operations within the line item “Administration and accounting fees.” |
| D.
|
Trustees’ Fees |
| |
For the year ended November
30, 2023, the Fund incurred Trustees’ fees totaling $18, which are included in the Statement of Operations within the line item “Trustees’ fees and expenses.” |
| E.
|
Investments with Affiliates
|
| |
The Fund is permitted to
purchase assets from or sell assets to certain related affiliates under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of assets by the Fund from or to another
fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers comply with Rule 17a-7 under the 1940 Act. Further, as
defined under the procedures, each transaction is effected at the current market price. |
| |
During the year ended
November 30, 2023, the Fund did not engage in any transactions pursuant to Rule 17a-7 under the 1940 Act. |
| F.
|
Trustees Deferred Compensation
Plan |
| |
The Fund
provides a deferred compensation plan for its Trustees who receive compensation from the Fund. Under the deferred compensation plan, Trustees may elect to defer all or a portion of their compensation. Amounts deferred are retained by the Fund, and
then, to the extent permitted by the 1940 Act, in turn, may be invested in the shares of affiliated or unaffiliated mutual funds selected by the participating Trustees. Investments in such instruments are included in “Prepaid expenses and
other assets” in the Statement of Assets and Liabilities at November 30, 2023. |
Note 4. Purchases and Sales of Securities
($ reported in thousands)
Purchases and sales of securities (excluding
U.S. government and agency securities, and short-term securities) during the year ended November 30, 2023, were as follows:
|
|
|
Purchases |
Sales |
|
|
|
$60,201
|
$69,710
|
Purchases and
sales of long-term U.S. government and agency securities during the year ended November 30, 2023, were as follows:
|
|
|
Purchases |
Sales |
|
|
|
$20,496
|
$19,102
|
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Note 5. Federal Income Tax Information
($ reported in thousands)
At November 30, 2023, the approximate cost
basis and aggregate unrealized appreciation (depreciation) of investments for federal income tax purposes were as follows:
| |
Federal
Tax Cost |
|
Unrealized
Appreciation |
|
Unrealized
(Depreciation) |
|
Net
Unrealized
Appreciation
(Depreciation) |
| |
$148,974
|
|
$801
|
|
$(14,091)
|
|
$(13,290)
|
The Fund has
capital loss carryovers available to offset future realized capital gains, if any, to the extent permitted by the Code. Net capital losses are carried forward without expiration and generally retain their short-term and/or long-term tax character,
as applicable. For the year ended November 30, 2023, the Fund’s capital loss carryovers are as follows:
|
| |
|
|
|
Short-Term |
Long-Term |
| |
|
|
|
$9,751
|
$23,130
|
The components
of distributable earnings on a tax basis and certain tax attributes for the Fund consist of the following:
|
|
Post-October
Capital Loss
Deferred |
Capital
Loss
Deferred |
|
|
$
1,303 |
$
32,881 |
The
differences between the book and tax basis distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term gain distributions, if any, are reported as ordinary income for federal
tax purposes. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes.
The tax character of dividends and
distributions paid during the fiscal years ended November 30, 2023 and 2022 was as follows:
| |
|
|
|
| |
2023 |
|
2022 |
|
Ordinary
Income
|
$
4,629 |
|
$
5,220 |
|
Return of
Capital
|
6,232
|
|
5,641
|
|
Total
|
$10,861
|
|
$10,861
|
Certain capital
accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. Permanent reclassifications can arise from differing treatment of certain income and gain transactions and
nondeductible current year net operating losses. These adjustments have no impact on net assets or net asset value per share of the Fund. Temporary differences that arise from recognizing certain items of
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
income, expense, gain or loss in different periods for
financial statement and tax purposes will likely reverse at some time in the future.
Note 6. Credit and Market Risk and Asset
Concentration
In July 2017, the head
of the United Kingdom Financial Conduct Authority (“FCA”) announced the intention to phase out the use of LIBOR by the end of 2021. However, after subsequent announcements by the FCA, the LIBOR administrator and other regulators, certain
of the most widely used LIBORs continued until June 30, 2023. The ICE Benchmark Administration Limited, which is regulated and authorized by FCA, and the administrator of LIBOR, ceased publishing certain LIBOR settings on December 31, 2021. On April
3, 2023, the FCA announced its decision to require LIBOR’s administrator to continue to publish the 1-month, 3-month, and 6-month U.S. dollar settings under an unrepresentative synthetic methodology until September 30, 2024. On March 15, 2022,
the Adjustable Interest Act (LIBOR) Act (the “LIBOR Act”) was enacted into law which directs the Federal Reserve Board, as a fallback mechanism, to identify benchmark rates based on SOFR to replace LIBOR in certain financial contracts
after June 30, 2023. On December 16, 2022, the Federal Reserve adopted regulations implementing the LIBOR Act. The Fund may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or
investment value. The discontinuation of LIBOR could have a significant impact on the financial markets and may present a material risk for certain market participants, including the Fund. Abandonment of or modifications to LIBOR could lead to
significant short- and long-term uncertainty and market instability. The risks associated with this discontinuation and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not
completed in a timely manner. It remains uncertain the effects such changes will have on the Fund, issuers of instruments in which the Fund invests, and the financial markets generally.
Local, regional or global events such as war
or military conflict, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on the Fund and its investments, including hampering the ability of the Fund’s
portfolio manager(s) to invest the Fund’s assets as intended.
Emerging market countries typically have
economic and political systems that are less fully developed, and can be expected to be less stable than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or
deflation. Since these markets are often small, they may be more likely to suffer sharp and frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few large investors. They may
also have policies that restrict investment by foreigners, or that prevent foreign investors from withdrawing their money at will.
Certain emerging markets may also face other
significant internal or external risks, including the risk of war and civil unrest. Each of these factors can affect the value and liquidity of the assets of the Fund. Failure to generate adequate earnings from foreign trade would make it difficult
for an emerging market country to service foreign debt. Disruptions resulting from social and political factors may cause the securities markets of emerging market countries to close. If this were to occur, the liquidity and value of the
Fund’s assets invested in corporate debt obligations of emerging market companies would decline.
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
The imposition of sanctions, exchange
controls (including repatriation restrictions), confiscation of assets and property, trade restrictions (including tariffs) and other government restrictions by the U.S. or other governments, or from problems in registration, settlement or custody,
may also result in losses. The type and severity of sanctions and other similar measures, including counter sanctions and other retaliatory actions, that may be imposed could vary broadly in scope, and their impact is impossible to predict. For
example, the imposition of sanctions and other similar measures could, among other things, cause a decline in the value and/or liquidity of securities issued by the sanctioned country or companies located in or economically tied to the sanctioned
country and increase market volatility and disruption in the sanctioned country and throughout the world. Sanctions and other similar measures could limit or prevent the Fund from buying and selling securities (in the sanctioned country and other
markets), significantly delay or prevent the settlement of securities transactions, and significantly impact the Fund’s liquidity and performance.
Sanctions threatened or imposed may result
in a decline in the value and liquidity of the Fund’s assets. The securities of the Fund may be deemed to have a zero value. The Fund may make investments that are illiquid or that may become less liquid in response to market developments or
adverse investor perceptions. Illiquid investments may be more difficult to value. If the Fund is forced to sell securities at an unfavorable time and/or under unfavorable conditions, such sales may adversely affect the Fund’s NAV and dilute
investors’ interests. Liquidity risk may be the result of, among other things, the reduced number and capacity of traditional market participants to make a market in fixed income securities or the lack of an active market. The potential for
liquidity risk may be magnified by a rising interest rate environment or other circumstances where investor redemptions from fixed income funds may be higher than normal, potentially causing increased supply in the market due to selling activity.
These risks may be more pronounced in connection with the Fund’s investments in securities of issuers located in emerging market countries.
For all these reasons, investments in
emerging markets may be considered speculative. To the extent that the Fund invests a significant portion of its assets in a particular emerging market, the Fund will be more vulnerable to financial, economic, political and other developments in
that country, and conditions that negatively impact that country will have a greater impact on the Fund as compared with a fund that does not have its holdings concentrated in a particular country.
High-yield/high-risk securities typically
entail greater price volatility and/or principal and interest rate risk. There is a greater chance that an issuer will not be able to make principal and interest payments on time. Analysis of the creditworthiness of issuers of high-yield/high-risk
securities may be complex, and as a result, it may be more difficult for the Adviser and/or subadviser to accurately predict risk.
The Fund may invest a high percentage of its
assets in specific sectors of the market in the pursuit of its investment objective. Fluctuations in these sectors of concentration may have a greater impact on the Fund, positive or negative, than if the Fund did not concentrate its investments in
such sectors.
The Fund borrows through
its line of credit for the purpose of leveraging its portfolio. While leverage presents opportunities for increasing the Fund’s total return, it also has the effect of potentially increasing losses. Accordingly, any event which adversely
affects the value of an investment held by the Fund would be magnified to the extent the Fund is leveraged.
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Note 7. Borrowings
($ reported in thousands)
The Fund has a Credit Agreement (the
“Agreement”), with a commercial bank (the “Bank”) that allows the Fund to borrow cash from the Bank, up to $55,000 (“Commitment Amount”). Borrowings under the Agreement are collateralized by investments of the
Fund. The Agreement results in the Fund being subject to certain covenants including asset coverage and portfolio composition (among others). If the Fund fails to meet or maintain certain covenants as required under the Agreement, the Fund may be
required to repay immediately, in part or in full, the loan balance outstanding under the Agreement, necessitating the sale of securities at potentially inopportune times. Interest is charged at SOFR plus an additional percentage rate on the amount
borrowed. Commitment fees are charged on the undrawn balance. Total commitment fees accrued for the year ended November 30, 2023 were $31 and are included in the “Interest expense on borrowings” line of the Statement of Operations. The
Agreement has a term that extends until the 179th day after the date that the lender delivers a “notice of termination” to the Fund. The Bank has the ability to
require repayment of outstanding borrowings under the Agreement upon certain circumstances such as an event of default. The carrying value approximates the fair value of the borrowing at November 30, 2023.
For the year ended November 30, 2023, the
average daily borrowings under the Agreement and the weighted daily average interest rate were $45,070 and 5.84%, respectively.
At November 30, 2023, the amount of
outstanding borrowings was as follows:
| |
|
Outstanding
Borrowings |
Interest
Rate |
| |
|
$43,000
|
6.26%
|
Note 8.
Indemnifications
Under the
Fund’s organizational documents, its Trustees and officers are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts
that provide a variety of indemnifications to other parties. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund and that have not occurred. However, the Fund
has not had prior claims or losses pursuant to these arrangements and expects the risk of loss to be remote.
Note 9. Capital Transactions
At November 30, 2023, the Fund has one class
of common stock with no par value of which unlimited shares are authorized and 11,313,094 shares are outstanding.
Note 10. Restricted Securities
Restricted securities are not registered
under the Securities Act of 1933, as amended (the “1933 Act”). Generally, 144A securities are excluded from this category. The Fund will bear any costs, including those involved in registration under the 1933 Act, in connection with the
disposition of such securities. At November 30, 2023, the Fund did not hold any securities that were restricted.
GLOBAL MULTI-SECTOR INCOME
FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Note 11. Regulatory Matters and Litigation
From time to time, the Fund, the Adviser,
the subadviser, and/or their respective affiliates may be involved in litigation and arbitration as well as examinations and investigations by various regulatory bodies, including the SEC, involving compliance with, among other things, securities
laws, client investment guidelines, and laws and regulations affecting their activities. At this time, the Fund and the Adviser believe that the outcomes of such matters are not likely, either individually or in the aggregate, to be material to
these financial statements.
Note 12. Recent
Accounting Pronouncements
In March
2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04 (“ASU 2020-04”), Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments
in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered reference rates as of the end of 2021. In
March 2021, the administrator for LIBOR announced the extension of the publication of a majority of the USD LIBOR settings to June 30, 2023. On December 21, 2022, the FASB issued ASU 2022-06 to defer the sunset date of ASU 2020-04 until December 31,
2024. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management is currently evaluating ASU 2020-04 and ASU 2020-06, but does not believe
there will be a material impact.
Note 13. Subsequent Events
Management has evaluated the impact of all
subsequent events on the Fund through the date the financial statements were available for issuance, and has determined that the following event requires recognition or disclosure in these financial statements.
As of January 5, 2024, the Fund entered into
a Master Margin Loan Agreement (the “New Agreement”) with a commercial bank (the “New Bank”) that allows the Fund to borrow cash from the Bank, up to a limit of $55,000,000 (the “New Commitment Amount”). The New
Agreement replaces the Agreement discussed in Note 7. Borrowings under the New Agreement are covered by investments of the Fund. The New Agreement results in the Fund being subject to certain covenants including posting collateral. If the Fund may
be required to repay immediately, in part or in full, the borrowed sum, necessitating the sale of securities at potentially inopportune times. Interest is charged at Overnight Bank Funding Rate (OBFR) plus an additional percentage rate on the amount
borrowed, and commitment fees are charged on the undrawn balance, if less than 75% of the New Commitment Amount is borrowed at a given time.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Virtus Global
Multi-Sector Income Fund
Opinion on the Financial
Statements
We have audited the accompanying statement of
assets and liabilities, including the schedule of investments, of Virtus Global Multi-Sector Income Fund (the “Fund”) as of November 30, 2023, the related statements of operations and cash flows for the year ended November 30, 2023, the
statements of changes in net assets for each of the two years in the period ended November 30, 2023, including the related notes, and the financial highlights for each of the five years in the period ended November 30, 2023 (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of November 30, 2023, the results of its operations and its cash flows
for the year then ended, the changes in its net assets for each of the two years in the period ended November 30, 2023 and the financial highlights for each of the five years in the period ended November 30, 2023 in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the
Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in
accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation
of securities owned as of November 30, 2023 by correspondence with the custodian, transfer agent, agent banks and brokers; when replies were not received from an agent bank or brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
/s/
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
January 24, 2024
We have served as the auditor of one or more of the investment
companies in the Virtus group of investment companies since at least 1977. We have not been able to determine the specific year we began serving as auditor.
GLOBAL MULTI-SECTOR INCOME
FUND
TAX INFORMATION NOTICE (Unaudited)
November 30, 2023
The
following information ($ reported in thousands) is being provided in order to meet reporting requirements set forth by the Code and/or to meet state specific requirements. In early 2024, the Fund will notify applicable shareholders of amounts
for use in preparing 2023 U.S. federal income tax forms. Shareholders should consult their tax advisors.
With respect to distributions paid during the fiscal year ended
November 30, 2023, the Fund designates the following amounts (or, if subsequently determined to be different, the maximum amount allowable):
| |
Qualified
Dividend Income %
(for non-corporate shareholders) |
|
Dividend
Received Deduction %
(for corporate shareholders) |
|
Long-Term
Capital Gain Distributions ($) |
| |
0%
|
|
0%
|
|
$0
|
CERTIFICATION
The Fund files the required annual Chief
Executive Officer (“CEO”) certification regarding compliance with the NYSE’s listing standards no more than 30 days after each annual shareholder meeting for the Fund. The Fund has included the certifications of the Fund’s
CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC for the period of this report.
KEY INFORMATION
Shareholder Relations: 1-866-270-7788
For general information and literature, as well as updates
on net asset value, share price, major industry groups and other key information.
REINVESTMENT PLAN
The Automatic Reinvestment and Cash Purchase
Plan (the “Plan”) offers shareholders a convenient way to acquire additional shares of the Fund. Registered holders will be automatically placed in the Plan and may opt out by calling Shareholder Relations at the number listed above. If
shares are held at a brokerage firm, contact your broker about participation in the Plan.
REPURCHASE OF SECURITIES
Notice is hereby given in accordance with
Section 23(c) of the 1940 Act that the Fund may from time to time purchase its shares of common stock in the open market when Fund shares are trading at a discount from their net asset value.
PROXY VOTING INFORMATION (FORM N-PX)
The subadviser votes proxies relating to
portfolio securities in accordance with procedures that have been approved by the Fund’s Board. You may obtain a description of these procedures, along with information regarding how the Fund voted proxies during the most recent 12-month
period ended June 30, free of charge, by calling toll-free 1-866-270-7788. This information is also available through the SEC’s website at https://www.sec.gov.
PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of
portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form NPORT-P. Form NPORT-P is available on the SEC’s website at
https://www.sec.gov.
GLOBAL MULTI-SECTOR INCOME
FUND
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited)
Investment Objective: The Fund’s investment objective is to maximize current income while preserving capital.
Principal Strategies:
The Fund seeks to generate high current
income and total return by applying extensive credit research to capitalize on opportunities across undervalued sectors of the global bond markets.
The portfolio seeks global diversification
among 14 sectors in order to potentially increase return and manage risk.
Principal Risks:
Credit:
There is a risk that the issuer of a debt instrument will fail to pay interest or principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price
of the instrument to decline. Debt instruments rated below investment-grade are especially susceptible to this risk.
Interest Rate: The values of debt instruments usually rise and fall in response to changes in interest rates. Declining interest rates generally increase the value of existing debt instruments, and rising interest rates generally
decrease the value of existing debt instruments. Changes in a debt instrument’s value usually will not affect the amount of interest income paid to the Fund, but will affect the value of the Fund’s shares. Interest rate risk is generally
greater for investments with longer maturities.
Certain instruments pay interest at variable
or floating rates. Variable rate instruments reset at specified intervals, while floating rate instruments reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the effect of changes in market
interest rates on the value of the instrument. However, some instruments do not track the underlying index directly, but reset based on formulas that can produce an effect similar to leveraging; others may also provide for interest payments that
vary inversely with market rates. The market prices of these instruments may fluctuate significantly when interest rates change.
Some investments give the issuer the option
to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, the Fund might have to reinvest the proceeds in an investment offering a lower yield, and therefore it
might not benefit from any increase in value as a result of declining interest rates.
Management:
The Fund is subject to management risk because it is an actively managed investment portfolio. The subadviser’s judgments about the attractiveness and potential appreciation of an investment may prove to be inaccurate and may not produce the
desired results. The subadviser will apply its investment techniques and risk analyses in making investment decisions for the Fund, but there is no guarantee that its decisions will produce the intended result.
Foreign Investing: Investing in securities of non-U.S. companies involves special risks and considerations not typically associated with investing in U.S. companies, and the values of non-U.S. securities may be more volatile than those of
U.S. securities. The values of non-U.S. securities are subject to economic and political developments in countries and regions where the issuers operate or are domiciled, or where the securities are traded, such as changes in economic or monetary
policies, and to changes in currency exchange rates. Values may also be affected by restrictions on receiving the investment proceeds from a non-U.S. country.
GLOBAL MULTI-SECTOR INCOME
FUND
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
Emerging Markets: The risks of foreign investments are generally greater in countries whose markets are still developing than they are in more developed markets. Emerging market countries typically have economic and political systems
that are less fully developed, and can be expected to be less stable than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Since these markets
are often small, they may be more likely to suffer sharp and frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few large investors. They may also have policies that restrict
investment by foreigners, or that prevent foreign investors from withdrawing their money at will. Certain emerging markets may also face other significant internal or external risks, including the risk of war and civil unrest. For all of these
reasons, investments in emerging markets may be considered speculative. To the extent that the Fund invests a significant portion of its assets in a particular emerging market, the Fund will be more vulnerable to financial, economic, political and
other developments in that country, and conditions that negatively impact that country will have a greater impact on the Fund as compared with a fund that does not have its holdings concentrated in a particular country.
Sanctions:
The imposition of sanctions and other similar measures could cause a decline in the value and/or liquidity of securities issued by or tied to the sanctioned country and increase market volatility and disruption in
the sanctioned country and throughout the world. Sanctions and other similar measures could limit or prevent the Fund from buying and selling securities (in the sanctioned country and other markets), significantly delay or prevent the settlement of
transactions, and negatively impact the Fund’s liquidity and performance.
High Yield Fixed Income Securities: Securities rated below the four highest rating categories of a nationally recognized statistical rating organization, may be known as “high-yield” securities and commonly referred to as “junk
bonds.” The highest of the ratings among these nationally recognized statistical rating organizations is used to determine the security’s classification. Such securities entail greater price volatility and credit and interest rate risk
than investment-grade securities. Analysis of the creditworthiness of high-yield/high-risk issuers is more complex than for higher-rated securities, making it more difficult for the Fund’s subadviser to accurately predict risk. There is a
greater risk with high-yield/high-risk fixed income securities that an issuer will not be able to make principal and interest payments when due. If the Fund pursues missed payments, there is a risk that the Fund’s expenses could increase. In
addition, lower-rated securities may not trade as often and may be less liquid than higher-rated securities, especially during periods of economic uncertainty or change. As a result of all of these factors, these bonds are generally considered to be
speculative.
Asset-Backed and
Mortgage-Backed Securities: Mortgage-backed securities represent interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders.
Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card arrangements.
These two types of securities share many of the same risks. The impairment of the value of collateral or other assets underlying a mortgage-backed or asset-backed security, such as that resulting from non-payment of loans, may result in a reduction
in the value of such security and losses to the Fund.
Early payoffs in the loans underlying such
securities may result in the Fund receiving less income than originally anticipated. The variability in prepayments will tend to limit price gains
GLOBAL MULTI-SECTOR INCOME
FUND
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
when interest rates drop and exaggerate
price declines when interest rates rise. In the event of high prepayments, the Fund may be required to invest proceeds at lower interest rates, causing the Fund to earn less than if the prepayments had not occurred. Conversely, rising interest rates
may cause prepayments to occur at a slower than expected rate, which may effectively change a security that was considered short- or intermediate-term into a long-term security. Long-term securities tend to fluctuate in value more widely in response
to changes in interest rates than shorter-term securities.
Bank Loans:
Investing in loans (including floating rate loans, loan assignments, loan participations and other loan instruments) carries certain risks in addition to the risks typically associated with high-yield/high-risk fixed income securities. Loans may be
unsecured or not fully collateralized, may be subject to restrictions on resale and sometimes trade infrequently on the secondary market. In the event a borrower defaults, the Fund’s access to the collateral may be limited or delayed by
bankruptcy or other insolvency laws. There is a risk that the value of the collateral securing the loan may decline after the Fund invests and that the collateral may not be sufficient to cover the amount owed to the Fund. If the loan is unsecured,
there is no specific collateral on which the Fund can foreclose. In addition, if a secured loan is foreclosed, the Fund may bear the costs and liabilities associated with owning and disposing of the collateral, including the risk that collateral may
be difficult to sell.
Transactions in many loans settle on a
delayed basis that may take more than seven days. As a result, sale proceeds related to the sale of loans may not be available until potentially a substantial period of time after the sale of the loans. No active trading market may exist for some
loans, which may impact the ability of the Fund to realize full value in the event of the need to liquidate such assets. Adverse market conditions may impair the liquidity of some actively traded loans. Loans also may be subject to restrictions on
resale, which can delay the sale and adversely impact the sale price. Difficulty in selling a loan can result in a loss. Loans made to finance highly leveraged corporate acquisitions may be especially vulnerable to adverse changes in economic
or market conditions. Certain loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not be entitled to rely on the strong anti-fraud protections of the federal securities laws. With loan
participations, the Fund may not be able to control the exercise of any remedies that the lender would have under the loan and likely would not have any rights against the borrower directly, so that delays and expense may be greater than those that
would be involved if the Fund could enforce its rights directly against the borrower.
Leverage:
The Fund employs leverage through a line of credit. While this leverage often serves to increase yield, it also subjects the Fund to increased risks. These risks may include the likelihood of increased price and NAV volatility and the possibility
that the Fund’s common stock income will fall if the interest rate on any borrowings rises. The use of leverage is premised upon the expectation that the cost of leverage will be lower than the return on the investments made with the proceeds.
However, if the income or capital appreciation from the securities purchased with such proceeds is not sufficient to cover the cost of leverage or if the Fund incurs capital losses, the return to common stockholders will be less than if the leverage
had not been used. There can be no assurance that a leveraging strategy will be successful during any period in which it is employed.
Market Volatility: The value of the securities in which the Fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or may last for extended
periods. Local, regional, or global events
GLOBAL MULTI-SECTOR INCOME
FUND
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
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 Fund and its investments, including hampering the ability of
the Fund’s portfolio managers to invest the Fund’s assets as intended.
Closed-End Funds: Closed-end funds may trade at a discount or premium from their net asset values, which may affect whether an investor will realize gains or losses. They may also employ leverage, which may increase
volatility.
No Guarantee: There is no guarantee that the Fund will meet its objective.
GLOBAL MULTI-SECTOR INCOME
FUND
Automatic Reinvestment and Cash Purchase Plan (Unaudited)
Virtus Global Multi-Sector Income Fund (the
“Fund”) allows you to conveniently reinvest distributions monthly in additional Fund shares thereby enabling you to compound your returns from the Fund. By choosing to reinvest, you’ll be able to invest money regularly and
automatically, and watch your investment grow.
It is important to note that an automatic
reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market.
Enrollment in the Reinvestment Plan
It is the policy of the Fund to
automatically reinvest distributions payable to shareholders. A “registered” shareholder automatically becomes a participant in the Fund’s Automatic Reinvestment and Cash Purchase Plan (the “Plan”). The Plan authorizes
the Fund to credit all shares of common stock to participants upon a distribution regardless of whether the shares are trading at a discount or premium to the net asset value. Registered shareholders may terminate their participation and receive
distributions in cash by contacting Computershare Trust Company, N.A. (the “Plan Administrator”). The termination will become effective with the next distribution if the Plan Administrator is notified at least 7 business days prior to
the distribution payment date. Registered shareholders that wish to change their distribution option from cash payment to reinvest may do so by contacting the Fund at 1-866-270-7788. In the case of banks, brokers, or other nominees which hold your
shares for you as the beneficial owner, the Plan Administrator will administer the Plan based on the information provided by the bank, broker or nominee. To the extent that you wish to participate in the Plan, you should contact the broker, bank or
nominee holding your shares to ensure that your account is properly represented. If necessary, you may have your shares taken out of the name of the broker, bank or nominee and register them in your own name.
How shares are purchased through the
Reinvestment Plan
When a distribution
is declared, nonparticipants in the plan will receive cash. Participants in the Plan will receive shares of the Fund valued as described below:
If on the payable date of the distribution,
the market price of the Fund’s common stock is less than the net asset value, the Plan Administrator will buy Fund shares on behalf of the Participant in the open market, on the New York Stock Exchange (NYSE) or elsewhere. The price per share
will be equal to the weighted average price of all shares purchased, including commissions. Commission rates are currently $0.02 per share, although the rate is subject to change and may vary. If, following the commencement of purchases and before
the Plan Administrator has completed its purchases, the trading price equals or exceeds the most recent net asset value of the common shares, the Plan Administrator may cease purchasing shares on the open market and the Fund may issue the remaining
shares at a price equal to the greater of (a) the net asset value on the last day the Plan Administrator purchased shares or (b) 95% of the market price on such day. In the case where the Plan Administrator has terminated open market purchase and
the Fund has issued the remaining shares, the number of shares received by the Participant in respect of the cash distribution will be based on the weighted average of prices paid for shares purchased in the open market and the price at which the
Fund issued the remaining shares. Under certain circumstances, the rules and regulations of the Securities and Exchange Commission may require limitation or temporary suspension of market purchases of shares under the Plan. The Plan Administrator
will not be accountable for its inability to make a purchase during such a period.
GLOBAL MULTI-SECTOR INCOME
FUND
Automatic Reinvestment and Cash Purchase Plan
(Unaudited) (Continued)
If on the payable date of the distribution,
the market price is equal to or exceeds the net asset value, Participants will be issued new shares by the Fund at the greater of the (a) the net asset value on the payable date or (b) 95% of the market price on such date.
The automatic reinvestment of distributions
will not relieve Participants of any income tax which may be payable on such distributions. A Participant in the Plan will be treated for federal income tax purposes, as having received on a payment date, a distribution in an amount equal to the
cash the participant could have received instead of shares. If you participate in the Plan, you will receive a Form 1099-DIV concerning the Federal tax status of distributions paid during the year.
Charges to Participate in the Plan
As a Participant in the Plan, you will not
pay any charge to have your distributions reinvested in additional shares. The Plan Administrator’s fees for handling the reinvestment of distributions will be paid by the Fund. There will be no brokerage commissions for shares issued directly
by the Fund in payment of distributions. However, each Participant will pay a pro rata share of brokerage commissions incurred (currently $0.02 per share, but may vary and is subject to change) with respect to the Plan Administrator’s open
market purchases in connection with the reinvestment of distributions.
Voluntary Cash Purchase Plan
Participants in the Plan have the option of
making additional cash payments for investment in shares of the Fund. Such payments can be made in any amount from $100 per payment to $3,000 per month. The Plan Administrator will use the funds received to purchase Fund shares in the open market on
the 15th of each month or the next business day if the 15th falls on a weekend or holiday (the “Investment Date”). The purchase price per share will be equal to the weighted average price of all shares purchased on the Investment Date,
including commissions. There is no charge to shareholders for Cash Purchases. The plan administrator’s fee will be paid by the Fund. However, each participating shareholder will pay pro rata share of brokerage commissions incurred (currently
$0.02 per share, but may vary and is subject to change) with respect to the Plan Administrator’s open market purchases in connection with all cash investments. Voluntary cash payments should be sent to Computershare, P.O. Box 6006, Carol
Stream, IL 60197-6006.
Participants
have an unconditional right to obtain the return of any cash payment if the Plan Administrator receives written notice at least 5 business days before such payment is to be invested.
Automatic Monthly Investment
Participants in the Plan may purchase
additional shares by means of an Automatic Monthly Investment of not less than $100 nor more than $3,000 per month by electronic funds transfer from a predesignated U.S bank account. If a Participant has already established a Plan account and wishes
to initiate Automatic Monthly Investments, the Participant must complete and sign an automatic monthly investment form and return it to the Plan Administrator together with a voided check or deposit slip for the account from which funds are to be
withdrawn. Automatic monthly investment forms may be obtained from the Fund by calling 1-866-270-7788.
GLOBAL MULTI-SECTOR INCOME
FUND
Automatic Reinvestment and Cash Purchase Plan
(Unaudited) (Continued)
Termination of Shares
Shareholders wishing to liquidate shares
held with the Plan Administrator must do so in writing or by calling 1-866-270-7788. The Plan Administrator does not charge a fee for liquidating your shares; however, a brokerage commission of $0.02 will be charged. This charge may vary and is
subject to change.
Once terminated,
you may re-enroll in the Plan (provided you still have shares registered in your name) by contacting the Fund at 1-866-270-7788.
Additional Information
For more information regarding the Automatic
Reinvestment and Cash Purchase Plan, please contact the Fund at 1-866-270-7788 or visit Virtus.com.
The Fund reserves the right to amend or
terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to written notice of the change sent to the members of the Plan at least 90 days before the record date for such distribution. The
Plan also may be amended or terminated by the Plan Administrator with at least 90 days’ written notice to participants in the Plan.
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF TRUSTEES OF GLOBAL
MULTI-SECTOR
INCOME FUND (Unaudited)
The Board of Trustees (the
“Board”) of Virtus Global Multi-Sector Income Fund (the “Fund”) is responsible for determining whether to approve the continuation of the investment advisory agreement (the “Advisory Agreement”) between the Fund
and Virtus Investment Advisers, Inc. (“VIA”) and the continuation of the subadvisory agreement (the “Subadvisory Agreement” and, together with the Advisory Agreement, the “Agreements”) with Virtus Fixed Income
Advisers, LLC, acting through its division Newfleet Asset Management (the “Subadviser”). At a meeting held on November 1, 2023, in a virtual meeting format, and at an in-person meeting held on November 14-15, 2023 (the
“Meetings”), the Board, including a majority of the Trustees who are not interested persons, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), of the Fund (the “Independent Trustees”)
considered and approved the continuation of each Agreement, as further discussed below.
In connection with the approval of the
Agreements, the Board requested and evaluated information provided by VIA and the Subadviser which, in the Board’s view, constituted information necessary for the Board to evaluate each of the Agreements. The Board also considered information
furnished throughout the year at regular Board meetings with respect to the services provided by VIA and the Subadviser, including quarterly performance reports prepared by management containing reviews of investment results and periodic
presentations from the Subadviser with respect to the Fund. The Board noted the affiliation of the Subadviser with VIA and any potential conflicts of interest.
The Board was separately advised by
independent legal counsel throughout the process. For each Agreement, the Board considered all the criteria separately with respect to the Fund and its shareholders. The Board considered all factors that it considered relevant, including those
discussed below. The Board did not identify any one factor as all-important or controlling, and each Trustee may have attributed different weights to the various factors. The Independent Trustees also discussed the proposed approval of the
Agreements in executive sessions with their independent legal counsel at which no representatives of VIA or the Subadviser were present.
Nature,
Extent and Quality of Services
The Trustees received in advance of the
Meetings various data and information regarding the nature, extent and quality of the services provided under the Agreements, including responses by VIA and the Subadviser to detailed requests submitted by independent legal counsel to the
Independent Trustees on their behalf, as well as responses by VIA and the Subadviser to follow-up questions. The Trustees also previously had received presentations by VIA’s and the Subadviser’s senior management personnel. The responses
to the information requests and the presentations included, among other things, information about the: background, experience and investment philosophy of senior management and investment personnel responsible for managing the Fund; resources,
operations and compliance structure of VIA and the Subadviser; and investment process, investment strategies, personnel, compliance procedures, and overall performance of VIA and the Subadviser.
In considering the Agreement with VIA, the
Board considered VIA’s process for supervising and managing the Subadviser, including: (a) VIA’s ability to select and monitor the Subadviser; (b) VIA’s ability to provide the services necessary to monitor the Subadviser’s
compliance with the Fund’s investment objective, policies and restrictions, as well as to provide other oversight activities; and (c) VIA’s ability and willingness to identify instances in which the Subadviser should be replaced and to
carry out the required changes. The Trustees also considered: (a)
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF TRUSTEES OF GLOBAL
MULTI-SECTOR
INCOME FUND (Unaudited) (Continued)
the experience and capability of
VIA’s management and other personnel; (b) the financial condition of VIA, and whether it had the financial wherewithal to continue to provide a high level and quality of services to the Fund; (c) the quality of VIA’s own regulatory and
legal compliance policies, procedures and systems; (d) the nature, extent and quality of administrative and other services provided by VIA and its affiliates to the Fund; (e) VIA’s supervision of the Fund’s other service providers; and
(f) VIA’s risk management processes. It was noted that an affiliate of VIA serves as administrator to the Fund. The Board also took into account its knowledge of VIA’s management and the quality of the performance of VIA’s duties,
as well as information from the Fund’s Chief Compliance Officer regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act.
With respect to the services provided by the
Subadviser, the Board considered information provided to the Board by the Subadviser, as well as information provided throughout the past year. The Board noted that the Subadviser provided portfolio management, compliance with the Fund’s
investment policies and procedures, compliance with applicable securities laws and assurances thereof. The Board also noted that VIA’s and the Subadviser’s management of the Fund must be carried out in accordance with the Fund’s
investment objective, policies and restrictions. The Board considered the Subadviser’s portfolio management services, including: (a) the scope of its operations; (b) its portfolio management capabilities; (c) the breadth and depth of its
management, investment and research personnel; and (d) the various support services that it provides to the Fund. The Board considered the investment management process and strategies employed by the Subadviser, and experience and capability of the
Subadviser’s management and other personnel committed by the Subadviser to the Fund. The Board also considered: (a) the quality of the Subadviser’s regulatory and legal compliance policies, procedures and systems; and (b) the
Subadviser’s brokerage and trading practices, including with respect to best execution and soft dollars. The Board also took into account the Subadviser’s risk assessment and monitoring process.
Investment
Performance
The Board
considered performance reports and discussions at Board meetings throughout the year, as well as a report (the “Broadridge Report”) for the Fund prepared by Broadridge Financial Solutions, Inc., an independent third party provider of
investment company data, furnished in connection with the contract renewal process. The Broadridge Report presented the Fund’s performance relative to a peer group of other closed-end funds (the “Performance Universe”) and relevant
indexes, as selected by Broadridge. The Board also considered performance information presented by management and took into account management’s discussion of the same, including the effect of market conditions on the Fund’s performance.
The Board noted that it also reviews on a quarterly basis detailed information about both the Fund’s performance results and portfolio composition, as well as the Subadviser’s investment strategies. The Board noted VIA’s expertise
and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadviser. The Board also took into account its discussions with management regarding factors that contributed to the performance of the Fund.
The Board noted that the Fund underperformed
the median of its Performance Universe for the 1-, 3-, 5-, and 10-year periods ended March 31, 2023 and outperformed the median of its Performance Universe for the year-to-date period ended March 31, 2023. The Board also noted that the Fund
underperformed its benchmark for the 1-year period ended March 31, 2023 and outperformed its benchmark for the year-to-date, 3-, 5-, and 10-year periods ended
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF TRUSTEES OF GLOBAL
MULTI-SECTOR
INCOME FUND (Unaudited) (Continued)
March 31, 2023. The Trustees discussed the
Fund’s performance and the reasons therefor with management.
Management
Fees and Total Expenses
The
Board considered the fees charged to the Fund for advisory services as well as the total expense level of the Fund. This information included comparisons of the Fund’s contractual and net management fee and net total expense level to those of
its peer universe (the “Expense Universe”) and, with respect to the Fund’s contractual and net management fee, ranked according to quintile (the first quintile being lowest and, therefore, best in these expense component rankings,
and fifth being highest and, therefore, worst in these expense component rankings). In comparing the Fund’s net management fee to that of comparable funds, the Board noted that in the materials presented by management such fee was comprised of
advisory fees. The Board also noted that the subadvisory fees were paid by VIA out of its management fees rather than paid separately by the Fund. In this regard, the Board took into account management’s discussion with respect to the
advisory/subadvisory fee structure, including the amount of the advisory fee retained by VIA after payment of the subadvisory fee. The Trustees also considered the fee rates payable by comparable accounts managed by the Subadviser.
In addition to the foregoing, the Board
considered, among other data, the information set forth below with respect to the Fund’s fees and expenses. The Board took into account management’s discussion of the Fund’s expenses, including the type and size of the Fund
relative to the other funds in its Expense Universe.
The Board noted that the Fund’s net
management fees were in the fourth quintile of the Expense Universe, and that the Fund’s net total expenses were above the median of the Expense Universe.
Profitability
The Board also considered
certain information relating to profitability that had been provided by VIA. In this regard, the Board considered information regarding the overall profitability of VIA for its management of the Fund. In addition to the fees paid to VIA and its
affiliates, including the Subadviser, the Board considered other benefits derived by VIA or its affiliates from their relationships with the Fund. The Board reviewed the methodology used to allocate costs to the Fund, taking into account the fact
that allocation methodologies are inherently subjective and various allocation methodologies may each be reasonable while producing different results. The Board concluded that the profitability to VIA and its affiliates from the Fund was within a
reasonable range in light of the quality of the services rendered to the Fund by VIA and its affiliates, and other factors considered.
In considering the profitability to the
Subadviser in connection with its relationship to the Fund, the Board noted that the fee payable under the Subadvisory Agreement is paid by VIA out of the fee that VIA receives under the Advisory Agreement, and not by the Fund. In considering the
fee payable by VIA to the Subadviser, the Board noted that, because the Subadviser is an affiliate of VIA, its profitability should be considered as part of the profitability of VIA and, therefore, the Board considered the profitability of VIA and
the Subadviser together. For each of the above reasons, the Board concluded that the separate profitability to the Subadviser and its affiliates from their relationships with the Fund was not a material factor in approval of the Subadvisory
Agreement.
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF TRUSTEES OF GLOBAL
MULTI-SECTOR
INCOME FUND (Unaudited) (Continued)
Economies
of Scale
The Board considered
the extent to which economies of scale would be realized as the Fund’s assets grow, and whether the fee levels reflect these economies of scale for the benefit of Fund shareholders. The Board noted that economies of scale may develop for
certain funds as their assets increase and their fixed fund-level expenses decline as a percentage of assets, but that closed-end funds such as the Fund typically do not have the ability to increase substantially their asset base as do open-end
funds.
The Board also considered the
advisory fee rate in relation to the current asset size of the Fund, and whether any economies of scale exist at that size. The Board concluded that, given the Fund’s closed-end structure, no changes to the Fund’s advisory and
subadvisory fee structure were necessary or advisable at this time. The Board agreed that it would be appropriate to monitor this matter in the event that the assets of the Fund were to increase substantially via a secondary or rights offering,
capital appreciation, reinvested dividends, the use of increased leverage or some other means.
Other
Factors
The Board considered
information regarding potential “fallout” or ancillary benefits that may be realized by VIA, the Subadviser and their respective affiliates as a result of their relationships with the Fund. The Board noted that an affiliate of VIA
provides administrative services to the Fund. The Board noted management’s discussion of the fact that, while the Subadviser is an affiliate of VIA, there are no other direct benefits received by the Subadviser or VIA in providing investment
advisory services to the Fund, other than the fees earned under the respective Agreement.
The Trustees concluded that potential
“fallout” benefits that VIA and the Subadviser may receive, such as greater name recognition or increased ability to obtain research and brokerage services, as applicable, may, in some cases, benefit the Fund.
Conclusion
After considering all factors
that it considered relevant, the Board, including a majority of the Independent Trustees, approved the Agreements with respect to the Fund.
FUND MANAGEMENT TABLES
(Unaudited)
Information pertaining to the Trustees and
Officers of the Fund as of the date of the issuance of this report is set forth below. The address of each individual, unless otherwise noted, is c/o Virtus Global Multi-Sector Income Fund, One Financial Plaza, Hartford, CT 06103.
Independent Trustees
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Burke,
Donald C.
YOB: 1960
Served Since: 2020, Class II
100 Portfolios |
Private
investor (since 2009). Formerly, President and Chief Executive Officer, BlackRock U.S. Funds (2007 to 2009); Managing Director, BlackRock, Inc. (2006 to 2009); and Managing Director, Merrill Lynch Investment Managers (1990 to 2006). |
Trustee
(since May 2023) and Advisory Board Member (May 2023), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Dividend, Interest & Premium Strategy Fund and Virtus Equity & Convertible Income Fund; Advisory Board Member
(since May 2023), Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II and Virtus Diversified Income & Convertible Fund; Trustee (since 2022), Virtus Stone Harbor
Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff
& Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (50 portfolios), Virtus
Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (4 portfolios); Director (since 2014) closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); Director, Avista Corp. (energy company) (since
2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); and Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010). |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Cogan,
Sarah E.
YOB: 1956
Served Since: 2021, Class II
97 Portfolios |
Retired
Partner, Simpson Thacher & Bartlett LLP (“STB”) (law firm) (since 2019); Director, Girl Scouts of Greater New York (since 2016); Trustee, Natural Resources Defense Council, Inc. (since 2013); and formerly, Partner, STB (1989 to
2018). |
Trustee
(since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (4 portfolios), Virtus Mutual Fund Family (50 portfolios) and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor
Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), and Virtus Global Multi-Sector Income Fund; Director (since 2021), Virtus Total Return Fund Inc.; Advisory Board
Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2019), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2019), Virtus Artificial
Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity
& Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; and Trustee (since 2019), PIMCO Closed-End Funds* (30 portfolios). |
DeCotis,
Deborah A.
YOB: 1952
Served Since: 2021, Class I
97 Portfolios |
Director,
Cadre Holdings Inc. (since 2022); Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Member, Circle Financial Group (since 2009); Member, Council on Foreign Relations (since 2013); and Trustee, Smith College (since 2017). Formerly,
Director, Watford Re (2017 to 2021); Co-Chair Special Projects Committee, Memorial Sloan Kettering (2005 to 2015); and Trustee, Stanford University (2010 to 2015). |
Trustee
(since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (4 portfolios), Virtus Mutual Fund Family (50 portfolios) and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor
Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), and Virtus Global Multi-Sector Income Fund; Director (since 2021), Virtus Total Return Fund Inc.; Advisory Board
Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2019), Virtus Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2017), Virtus Convertible & Income 2024
Target Term Fund; Trustee (since 2015), Virtus Diversified Income & Convertible Fund; Trustee (since 2014), Virtus Investment Trust (13 portfolios); Trustee (since 2011), Virtus Strategy Trust (8 portfolios); Trustee (since 2011), Virtus
Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; and Trustee (since 2011), PIMCO Closed-End Funds* (30 portfolios).
|
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Drummond,
F. Ford
YOB: 1962
Served Since: 2021, Class III
97 Portfolios |
President
(since 1998), F.G. Drummond Ranches, Inc.; and Director (since 2015), Texas and Southwestern Cattle Raisers Association. Formerly, Chairman, Oklahoma Nature Conservancy (2019 to 2020); Trustee (since 2014), Frank Phillips Foundation; Trustee (since
2008), Oklahoma Nature Conservancy; Board Member (2006 to 2020) and Chairman (2016 to 2018), Oklahoma Water Resources Board; Director (1998 to 2008), The Cleveland Bank; and General Counsel (1998 to 2008), BMIHealth Plans (benefits administration).
|
Trustee
(since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (4 portfolios), Virtus Mutual Fund Family (50 portfolios), and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor
Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), and Virtus Global Multi-Sector Income Fund; Director (since 2021), Virtus Total Return Fund Inc.; Advisory Board
Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2019), Virtus Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2017), Virtus Convertible & Income 2024
Target Term Fund; Trustee (since 2015), Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Dividend, Interest & Premium Strategy Fund and Virtus Equity &
Convertible Income Fund; Trustee (since 2014), Virtus Strategy Trust (8 portfolios); Director (since 2011), Bancfirst Corporation; and Trustee (since 2006), Virtus Investment Trust (13 portfolios). |
Harris,
Sidney E.
YOB: 1949
Served Since: 2020, Class II
90 Portfolios |
Private
Investor (since 2021); Dean Emeritus (since 2015), Professor (2015 to 2021 and 1997 to 2014), and Dean (1997 to 2004), J. Mack Robinson College of Business, Georgia State University. |
Trustee
(since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus
Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus
Global Multi-Sector Income Fund; Trustee (since 2019), Mutual Fund Directors Forum; Trustee (since 2017), Virtus Mutual Fund Family (50 portfolios), Virtus Variable Insurance Trust (8 portfolios), and Virtus Alternative Solutions Trust (4
portfolios); Trustee (2013 to 2020) and Honorary Trustee (since 2020), KIPP Metro Atlanta; Director (1999 to 2019), Total System Services, Inc.; Trustee (2004 to 2017), RidgeWorth Funds; Chairman (2012 to 2017), International University of the Grand
Bassam Foundation; Trustee (since 2012), International University of the Grand Bassam Foundation; and Trustee (2011 to 2015), Genspring Family Offices, LLC. |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Mallin,
John R.
YOB: 1950
Served Since: 2020, Class II
90 Portfolios |
Partner/Attorney
(since 2003), McCarter & English LLP (law firm) Real Property Practice Group; and Member (2014 to 2022), Counselors of Real Estate. |
Trustee
(since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios),
Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020),
Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (50 portfolios) and Virtus Alternative Solutions Trust (4 portfolios); Director (since 2019), 1892 Club, Inc. (non-profit); Director (2013 to 2020), Horizons,
Inc. (non-profit); and Trustee (since 1999), Virtus Variable Insurance Trust (8 portfolios). |
McDaniel,
Connie D.
YOB: 1958
Served Since: 2020, Class III
97 Portfolios |
Retired
(since 2013). Vice President, Chief of Internal Audit, Corporate Audit Department (2009 to 2013); Vice President Global Finance Transformation (2007 to 2009); and Vice President and Controller (1999 to 2007), The Coca-Cola Company. |
Trustee
(since May 2023) and Advisory Board Member (May 2023), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income
Fund II, Virtus Diversified Income & Convertible Fund, Virtus Dividend, Interest & Premium Strategy Fund and Virtus Equity & Convertible Income Fund; Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022
to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff
& Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Director (since 2019), Global Payments Inc.; Chairperson (since 2021),
Governance & Nominating Committee, Global Payments Inc.; Trustee (since 2017), Virtus Mutual Fund Family (50 portfolios), Virtus Variable Insurance Trust (8 portfolios), and Virtus Alternative Solutions Trust (4 portfolios); Director (since
2021), North Florida Land Trust; Director (2014 to 2019), Total System Services, Inc.; Member (2011 to 2022) and Chair (2014 to 2016), Georgia State University, Robinson College of Business Board of Advisors; and Trustee (2005 to 2017), RidgeWorth
Funds. |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
McLoughlin,
Philip R.
YOB: 1946
Served Since: 2011, Class III
Chairman
100 Portfolios |
Private
investor since 2010. |
Trustee
and Chairman (since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee and Chairman (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee and Chairman (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment
Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Chairman (since 2023) and Trustee (since 2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income
& Convertible Fund, Virtus Equity & Convertible Income Fund and Virtus Dividend, Interest & Premium Strategy Fund; Chairman (since 2023), Trustee (since 2022) and Advisory Board Member (2021), Virtus Convertible & Income 2024 Target
Term Fund and Virtus Convertible & Income Fund; Director and Chairman (since 2016), Virtus Total Return Fund Inc.; Director and Chairman (2016 to 2019), the former Virtus Total Return Fund Inc.; Director and Chairman (2014 to 2021), Duff &
Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (4 portfolios); Trustee and Chairman (since 2011), Virtus Global Multi-Sector Income Fund; Chairman and Trustee (since 2003),
Virtus Variable Insurance Trust (8 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); Director (1991 to 2019) and Chairman (2010 to 2019), Lazard World Trust Fund (closed-end
investment firm in Luxembourg); and Trustee (since 1989) and Chairman (since 2002), Virtus Mutual Fund Family (50 portfolios). |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
McNamara,
Geraldine M.
YOB: 1951
Served Since: 2020, Class I
100 Portfolios |
Private
investor (since 2006); and Managing Director, U.S. Trust Company of New York (1982 to 2006). |
Trustee
(since May 2023) and Advisory Board Member (January 2023 to May 2023), Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund and Virtus Dividend, Interest & Premium
Strategy Fund; Trustee (since 2023), Virtus Artificial Intelligence & Technology Opportunities Fund and Virtus Equity & Convertible Income Fund; Advisory Board Member (since 2023), Virtus Convertible & Income 2024 Target Term Fund;
Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus
Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus
Global Multi-Sector Income Fund; Trustee (since 2016) Virtus Alternative Solutions Trust (4 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (8 portfolios); Director (since 2003), closed-end funds managed by Duff & Phelps
Investment Management Co. (3 funds); and Trustee (since 2001), Virtus Mutual Fund Family (50 portfolios). |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Walton,
R. Keith
YOB: 1964
Served Since: 2016, Class I
97 Portfolios |
Senior
Adviser (since 2022), Brightwood Capital LLC; Venture and Operating Partner (2020 to 2021), Plexo Capital, LLC; Venture Partner (2019 to 2021) and Senior Adviser (2018 to 2019), Plexo, LLC; and Partner (since 2006), Global Infrastructure Partners.
Formerly, Managing Director (2020 to 2021), Lafayette Square Holding Company LLC; Senior Adviser (2018 to 2019), Vatic Labs, LLC; Executive Vice President, Strategy (2017 to 2019), Zero Mass Water, LLC; and Vice President, Strategy (2013 to 2017),
Arizona State University. |
Trustee
(since September 2023) and Advisory Board Member (2022 to September 2023), Virtus Convertible & Income 2024 Target Term Fund; Trustee (since May 2023) and Advisory Board Member (2022 to May 2023), Virtus Convertible & Income Fund II and
Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since July 2022) and Advisory Board Member (January 2022 to July 2022), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income Fund and
Virtus Equity & Convertible Income Fund; Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), Virtus Diversified Income
& Convertible Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL,
Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2020) Virtus Alternative Solutions Trust (4 portfolios), Virtus Variable Insurance Trust (8 portfolios)
and Virtus Mutual Fund Family (50 portfolios); Director (since 2017), certain funds advised by Bessemer Investment Management LLC; Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus
Global Multi-Sector Income Fund; Director (2006 to 2019), Systematica Investments Limited Funds; Director (2006 to 2017), BlueCrest Capital Management Funds; Trustee (2014 to 2017), AZ Service; Director (since 2004), Virtus Total Return Fund Inc.;
and Director (2004 to 2019), the former Virtus Total Return Fund Inc. |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past 5 Years |
Other
Trusteeships Held by Trustee |
Zino,
Brian T.
YOB: 1952
Served Since: 2016, Class I
97 Portfolios |
Retired.
Various roles at J. & W. Seligman & Co. Incorporated (1982 to 2009), including President (1994 to 2009). |
Trustee
(since 2022), Virtus Stone Harbor Emerging Markets Income Fund; Trustee (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger
Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment
Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2022) and Advisory Board Member (2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus
Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2020)
Virtus Alternative Solutions Trust (4 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (50 portfolios); Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since
2016), Virtus Global Multi-Sector Income Fund; Director (since 2014), Virtus Total Return Fund Inc.; Director (2014 to 2019), the former Virtus Total Return Fund Inc.; Trustee (since 2011), Bentley University; Director (1986 to 2009) and President
(1994 to 2009), J&W Seligman Co. Inc.; Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002), ICI Mutual Insurance Company; Member, Board of Governors of ICI (1998 to 2008). |
* PIMCO Closed-End Funds are not part of the Virtus’ Fund Complex: PCM Fund, Inc.; PIMCO Access Income Fund; PIMCO California
Flexible Municipal Income Fund; PIMCO California Municipal Income Fund; PIMCO California Municipal Income Fund II; PIMCO California Municipal Income Fund Ill; PIMCO Corporate & Income Strategy Fund; PIMCO Corporate & Income Opportunity Fund;
PIMCO Dynamic Income Fund; PIMCO Dynamic Income Opportunities Fund; PIMCO Dynamic Income Strategy Fund; PIMCO Flexible Credit Income Fund; PIMCO Flexible Emerging Markets Income Fund; PIMCO Flexible Municipal Income Fund; PIMCO Global StocksPLUS® & Income Fund; PIMCO High Income Fund; PIMCO Income Strategy Fund; PIMCO Income Strategy Fund II; PIMCO Managed Accounts Trust (5 portfolios); PIMCO Municipal Income
Fund; PIMCO Municipal Income Fund II; PIMCO Municipal Income Fund III; PIMCO New York Municipal Income Fund; PIMCO New York Municipal Income Fund II; PIMCO New York Municipal Income Fund Ill; and PIMCO Strategic Income Fund, Inc.
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Interested Trustee
The individual listed below is an
“interested person” of the Fund, as defined in Section 2(a)(19) of the 1940 Act, as amended, and the rules and regulations thereunder.
Name, Year of Birth,
Length of Time Served,
and Number of
Portfolios in Fund
Complex Overseen by
Trustee |
Principal
Occupation(s) During Past
5 Years |
Other
Trusteeships Held by Trustee |
Aylward,
George R.**
Trustee and President
YOB: 1964
Served Since: 2014, Class lll
104 Portfolios |
Director,
President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various senior officer positions with Virtus affiliates (since 2005). |
Director
(since 2023), Stone Harbor Investment Funds plc (21 sub-funds), Stone Harbor Global Funds plc (27 sub-funds) and Virtus Global Funds ICAV (5 portfolios); Trustee, President and Chief Executive Officer (since 2022), Virtus Stone Harbor Emerging
Markets Income Fund; Trustee, President and Chief Executive Officer (2022 to 2023), Virtus Stone Harbor Emerging Markets Total Income Fund; Member, Board of Governors of the Investment Company Institute (since 2021); Trustee and President
(since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2
portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible &
Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium
Strategy Fund; Chairman and Trustee (since 2015), Virtus ETF Trust II (7 portfolios); Director, President and Chief Executive Officer (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and President (since 2013),
Virtus Alternative Solutions Trust (4 portfolios); Director (since 2013), Virtus Global Funds, plc (5 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (8 portfolios); Trustee, President and Chief
Executive Officer (since 2011), Virtus Global Multi-Sector Income Fund; Trustee and President (since 2006) and Executive Vice President (2004 to 2006), Virtus Mutual Fund Family (50 portfolios); Director, President and Chief Executive Officer (since
2006), Virtus Total Return Fund Inc.; and Director, President and Chief Executive Officer (2006 to 2019), the former Virtus Total Return Fund Inc. |
** Mr. Aylward is an “interested
person,” as defined in the 1940 Act, by reason of his position as President and Chief Executive Officer of Virtus Investment Partners, Inc. (“Virtus”), the ultimate parent company of the Adviser, and various positions with its
affiliates, including the Adviser.
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
Officers Who Are Not Trustees
| Name and Year of Birth
|
Position(s) Held with
Fund and Length of
Time Served |
Principal
Occupation(s) During Past 5 Years |
Batchelar,
Peter J.
YOB: 1970 |
Senior
Vice President (since 2017) and Vice President (2016 to 2017). |
Senior
Vice President, Product Development (since 2017), Vice President, Product Development (2008 to 2017) and various officer positions (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions
(since 2008) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc. |
Bradley,
W. Patrick
YOB: 1972 |
Executive
Vice President (since 2016); Senior Vice President (2013 to 2016); Vice President (2011 to 2013); and Chief Financial Officer and Treasurer (since 2011). |
Executive
Vice President, Fund Services (since 2016), Senior Vice President, Fund Services (2010 to 2016) and various officer positions (since 2004), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Director (since 2023), Stone Harbor
Investment Funds plc and Stone Harbor Global Funds plc; Director (since 2019), Virtus Global Funds ICAV; Director (since 2013), Virtus Global Funds, plc; various officer positions (since 2006) of various registered funds advised by subsidiaries of
Virtus Investment Partners, Inc.; and Member (since 2022), BNY Mellon Asset Servicing Client Advisory Board. |
Branigan,
Timothy
YOB: 1976 |
Vice
President and Fund Chief Compliance Officer (since 2022) and Assistant Vice President and Deputy Fund Chief Compliance Officer (March to May 2022). |
Various
officer positions (since 2019) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc. |
Chisolm,
Daphne
YOB: 1969 |
Vice
President, Counsel and Assistant Secretary (since 2023). |
Vice
President and Senior Counsel (since 2023), Virtus Investment Partners, Inc.; Attorney at Law engaged in private practice as a solo practitioner (2018 to 2023); and various officer positions (since 2023) of various registered funds advised by
subsidiaries of Virtus Investment Partners, Inc. |
Fromm,
Jennifer
YOB: 1973 |
Vice
President, Chief Legal Officer, Counsel and Secretary (since 2020). |
Vice
President (since 2016) and Senior Counsel, Legal (since 2007) and various officer positions (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions (since 2008) of various registered funds
advised by subsidiaries of Virtus Investment Partners, Inc. |
Hackett,
Amy
YOB: 1968 |
Vice
President (since 2013) and Assistant Treasurer (since 2011). |
Vice
President (since 2010) and Assistant Vice President (2007 to 2010), Fund Services, Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions (since 2007) of various registered funds advised by subsidiaries
of Virtus Investment Partners, Inc. |
Krishnan,
Suneeta
YOB: 1965 |
Vice
President (since 2018) and Assistant Treasurer (since 2011). |
Vice
President (since 2017) and Assistant Treasurer (since 2007), Mutual Fund Administration, Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions (since 2009) of various registered funds advised by
subsidiaries of Virtus Investment Partners, Inc. |
FUND MANAGEMENT TABLES
(Unaudited) (Continued)
| Name and Year of Birth
|
Position(s) Held with
Fund and Length of
Time Served |
Principal
Occupation(s) During Past 5 Years |
Rahman,
Mahmood
YOB: 1967 |
Assistant
Vice President (since 2021). |
Vice
President (since 2023), Tax Director (since 2020) and Assistant Vice President, Fund Administration (2020 to 2023), Virtus Investment Partners, Inc.; Assistant Vice President (since 2021) of various registered funds advised by subsidiaries of
Virtus Investment Partners, Inc.; and Assistant Treasurer and Tax Director, Grantham, Mayo, Van Otterloo & Co. LLC (2007 to 2019). |
Short,
Julia R.
YOB: 1972 |
Senior
Vice President (since 2018). |
Senior
Vice President, Product Development (since 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2017) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; and
Managing Director, Product Manager, RidgeWorth Investments (2004 to 2017). |
Smirl,
Richard W.
YOB: 1967 |
Executive
Vice President (since 2021). |
Chief
Operating Officer (since 2021), Virtus Investment Partners, Inc.; Executive Vice President (since 2021), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Executive Vice President (since 2021) of various registered funds advised
by subsidiaries of Virtus Investment Partners, Inc.; Chief Operating Officer (2018 to 2021), Russell Investments; Executive Director (Jan. to July 2018), State of Wisconsin Investment Board; and Partner and Chief Operating Officer (2004 to 2018),
William Blair Investment Management. |
Thaker,
Nikita K.
YOB: 1978 |
Vice
President and Controller (since 2021) and Assistant Treasurer (since 2017). |
Vice
President (since 2021) and Assistant Vice President (2016 to 2021), Mutual Fund Administration, Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions (since 2013) of various registered funds advised by
subsidiaries of Virtus Investment Partners, Inc. |
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VIRTUS GLOBAL MULTI-SECTOR
INCOME FUND
101 Munson Street
Greenfield, MA 01301-9668
Board of Trustees
George R. Aylward
Donald C. Burke
Sarah E. Cogan
Deborah A. DeCotis
F. Ford Drummond
Sidney E. Harris
John R. Mallin
Connie D. McDaniel
Philip R. McLoughlin, Chair
Geraldine M. McNamara
R. Keith Walton
Brian T. Zino
Principal Officers
George R. Aylward, President
and Chief Executive Officer
Peter Batchelar, Senior Vice President
W. Patrick Bradley, Executive
Vice President, Chief Financial Officer, and Treasurer
Timothy Branigan, Vice
President and Fund Chief Compliance Officer
Jennifer Fromm, Vice President,
Chief Legal Officer, Counsel and Secretary
Julia R. Short, Senior Vice
President
Richard W. Smirl, Executive Vice President
Investment Adviser
Virtus Investment Advisers, Inc.
One Financial Plaza
Hartford, CT 06103-2608
Administrator
Virtus Fund Services, LLC
One Financial Plaza
Hartford, CT 06103
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286-1048
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
Independent Registered Public
Accounting Firm
PricewaterhouseCoopers LLP
2001 Market Street
Philadelphia, PA 19103-7042
How to Contact Us
| Shareholder
Services |
1-866-270-7788
|
Important Notice to Shareholders
The Securities and Exchange Commission has modified mailing regulations for semiannual and annual shareholder fund reports to allow mutual fund companies to send a single copy of these reports to shareholders who share
the same mailing address. If you would like additional copies, please call Mutual Fund Services at 1-866-270-7788.
Virtus Global Multi-Sector Income Fund
c/o Computershare Investor Services
P.O. Box 43078
Providence, RI 02940-3078
For more information about
Virtus Closed-End Funds, please
contact us
at 1-866-270-7788
or closedendfunds@virtus.com
or visit Virtus.com.
| Item 1. |
Reports to Stockholders (cont.). |
| |
(a) |
The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies
to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third
party. |
| |
(c) |
There have been no amendments, during the period covered by this report, to a provision of the code of ethics
that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of ethics description. |
| |
(d) |
The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
| Item 3. |
Audit Committee Financial Expert. |
|
|
|
| (a)(1) |
|
The Registrant’s Board of Trustees has determined that the Registrant has an “audit committee financial expert” serving on its Audit Committee. |
|
|
| (a)(2) |
|
As of the end of the period covered by the report, the Registrant’s Board of Trustees has determined that each of Donald C. Burke, Connie D. McDaniel and Brian T. Zino is qualified to serve as an “audit committee financial
expert” serving on its audit committee and that each is an “independent” Trustee, as defined by Item 3 of Form N-CSR. |
|
|
| (a)(3) |
|
Not Applicable. |
| Item 4. |
Principal Accountant Fees and Services. |
Audit Fees
| |
(a) |
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $33,881
for 2023 and $33,055 for 2022. |
Audit-Related Fees
| |
(b) |
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $7,931 for 2023 and $4,724 for 2022. Such
audit-related fees include out of pocket expenses. |
Tax Fees
| |
(c) |
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning are $3,504 for 2023 and $4,078 for 2022. |
“Tax
Fees” are those primarily associated with review of the Fund’s tax provision and qualification as a regulated investment company (RIC) in connection with audits of the Fund’s financial statement, review of year-end distributions by the Fund to avoid excise tax for the Fund, periodic discussion with management on tax issues affecting the Fund and reviewing and signing the Fund’s federal income tax returns.
All Other Fees
| |
(d) |
The aggregate fees billed in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2023 and $0 for 2022. |
| |
(e)(1) |
Disclose the audit committee’s pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
The Virtus Global Multi-Sector Income Fund (the “Fund”) Board has adopted policies and procedures with regard to the pre-approval of services provided by PwC. Audit, audit-related and tax compliance services provided to the Fund on an annual basis require specific pre-approval by the
Board. As noted above, the Board must also approve other non-audit services provided to the Fund and those non-audit services provided to the Fund’s Affiliate
Service Providers that related directly to the operations and financial reporting of the Fund. Certain of these non-audit services that the Board believes are a) consistent with the SEC’s auditor
independence rules and b) routine and recurring services that will not impair the independence of the independent auditors may be approved by the Board without consideration on a specific case-by-case basis (“general pre-approval”).
The Audit Committee has determined that the Chair of the Audit Committee, may provide pre-approval for
such services that meet the above requirements but are not included in the general pre-approval in the event such approval is sought between regularly scheduled meetings. In any event, the Board is informed of
each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting.
| |
(e)(2) |
The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved
by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
| |
(f) |
The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s
financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
| |
(g) |
The aggregate non-audit fees billed by the registrant’s accountant
for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $3,504 for 2023
and $4,078 for 2022. |
| |
(h) |
The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant’s independence. |
| Item 5. |
Audit Committee of Listed Registrants. |
| |
(a) |
The registrant has a separately designated audit committee. During the period covered by the report, the
members of the audit committee were: Donald C. Burke, Deborah A. DeCotis, John R. Mallin, Connie D. McDaniel and Brian T. Zino. |
Item 6. Investments.
| |
(a) |
Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is
included as part of the report to shareholders filed under Item 1(a) of this form. |
| Item 7. |
Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. |
The Fund has adopted a Policy Regarding Proxy Voting (the “Policy”) stating the
Fund’s intention to exercise stock ownership rights with respect to portfolio securities in a manner that is reasonably anticipated to further the best economic interests of shareholders of the Fund. The Fund or its voting delegates will
endeavor to analyze and vote all proxies that are likely to have financial implications, and where appropriate, to participate in corporate governance, shareholder proposals, management communications and legal proceedings. The Fund or its voting
delegates must also identify potential or actual conflicts of interest in voting proxies and must address any such conflict of interest in accordance with the Policy.
In the absence of a specific direction to the contrary from the Board, the Adviser or the subadviser that is managing the Fund is responsible for voting
proxies for such fund, or for delegating such responsibility to a qualified, independent organization engaged by the Adviser or respective subadviser to vote proxies on its behalf. The applicable voting party will vote proxies in accordance with the
Policy or its own policies and procedures, which must be reasonably designed to further the best economic interests of the affected fund shareholders. Because the Policy and the applicable voting party’s policies and procedures used to vote
proxies for the funds both are designed to further the best economic interests of the affected fund shareholders, they are not expected to conflict with one another although the types of factors considered by the applicable voting party under its
own policies and procedures may be in addition to or different from the ones listed below for the Policy.
The Policy specifies the types
of factors to be considered when analyzing and voting proxies on certain issues when voting in accordance with the Policy, including, but not limited to:
| |
• |
|
Anti-takeover measures – the overall long-term financial performance of the target company relative to its
industry competition. |
| |
• |
|
Corporate Governance Matters – tax and economic benefits of changes in the state of incorporation; dilution
or improved accountability associated with changes in capital structure. |
| |
• |
|
Contested elections – the qualifications of all nominees; independence and attendance record of board and
key committee members; entrenchment devices in place that may reduce accountability. |
| |
• |
|
Stock Option and Other Management Compensation Issues—executive pay and spending on perquisites,
particularly in conjunction with sub-par performance and employee layoffs. |
| |
• |
|
Shareholder proposals – whether the proposal is likely to enhance or protect shareholder value; whether
identified issues are more appropriately or effectively addressed by legal or regulatory changes; whether the issuer has already appropriately addressed the identified issues; whether the proposal is unduly burdensome or prescriptive; whether the
issuer’s existing approach to the identified issues is comparable to industry best practice. |
The Fund and its voting delegates seek to avoid actual or perceived conflicts of interest of Fund
shareholders, on the one hand, and those of the Adviser, subadviser, other voting delegate, Distributor, or any affiliated person of the Fund, on the other hand.
Depending on the type and materiality, the Board or its delegates may take the following actions, among others, in addressing any material
conflicts of interest that arise with respect to voting (or directing voting delegates to vote): (i) rely on the recommendations of an established, independent third party proxy voting vendor; (ii) vote pursuant to the recommendation of the
proposing delegate; (iii) abstain; (iv) where two or more delegates provide conflicting requests, vote shares in proportion to the assets under management of each proposing delegate; (v) vote shares in the same proportion as the vote of
all other shareholders of such issuer; or (vi) the Adviser may vote proxies where the subadviser has a direct conflict of interest. The Policy requires each Adviser/subadviser that is a voting delegate to notify the Chief Compliance Officer of
the Fund (or, in the case of a subadviser, the Chief Compliance Officer of the Adviser) of any actual or potential conflict of interest that is identified, and provide a recommended course of action for protecting the best interests of the affected
fund’s shareholders. No Adviser/subadviser or other voting delegate may waive any conflict of interest or vote any conflicted proxies without the prior written approval of the Board (or the Executive Committee thereof) or the Chief Compliance
Officer of the Fund.
The Policy further imposes certain record-keeping and reporting requirements on each Adviser/subadviser or other voting delegate.
Information regarding how the funds voted proxies relating to portfolio securities during the most recent
12-month period ended September 30 will be available, no later than August 31 of each year, free of charge by calling, toll-free, 866.270.7788, or on the SEC’s Web site at www.sec.gov.
During the period of the report, any proxies for the Fund were handled by the Fund’s subadviser, Newfleet Asset Management, a division of Virtus Fixed
Income Advisers, LLC (“Newfleet”). Following is a summary of Newfleet’s proxy voting policies.
Newfleet
Although the nature of Newfleet’s portfolios is such that ballots are rarely required, Newfleet has adopted
pre-determined proxy voting guidelines (the “Guidelines”) to make every effort to ensure the manner in which shares are voted is in the best interest of its clients and the value of the investment.
Under the Guidelines, Newfleet sometimes delegates to a non-affiliated third party vendor the responsibility to review proxy proposals and make voting recommendations on behalf of Newfleet. Newfleet may also
vote a proxy contrary to the Guidelines if it determines that such action in the best interest of its clients including the Fund.
A complete copy of
Newfleet’s current Proxy Voting Policies & Procedures is available by sending a written request to Newfleet Asset Management, LLC, Attn: Compliance Department, One Financial Plaza, Hartford, CT 06103. Email requests may be sent to:
james.sena@virtus.com.
| Item 8. |
Portfolio Managers of Closed-End Management Investment Companies.
|
The names, titles, and length of service of the person or persons employed by or associated with the registrant or an investment
adviser of the registrant who are primarily responsible for the day-to-day management of the registrant’s portfolio (“Portfolio Manager”) and each
Portfolio Manager’s business experience during the past 5 years as of the date of filing of this report:
| (a)(1) |
Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio
Manager(s) or Management Team Members |
Newfleet Asset Management, a division of Virtus Fixed Income Advisers, LLC
David L. Albrycht, CFA. David Albrycht is president and chief investment officer of Newfleet, an affiliated manager of Virtus
Investment Partners (“Virtus”). Prior to joining Newfleet in 2011, Mr. Albrycht was executive managing director and senior portfolio manager with Goodwin Capital Advisers, a former affiliate of Virtus. He joined the Goodwin
multi-sector fixed income team in 1985 as a credit analyst and has managed fixed income portfolios since 1991.
Mr. Albrycht has been
a portfolio manager of the Fund since its inception, Virtus Newfleet Multi-Sector Short Term Bond Fund since 1993, Virtus Newfleet Multi-Sector Intermediate Bond Fund since 1994, Virtus Newfleet Senior Floating Rate Fund since 2008, Virtus Tactical
Allocation Fund and Virtus Newfleet High Yield Fund since 2011, Virtus Newfleet Core Plus Bond Fund and Virtus Newfleet Low Duration Income Fund since 2012. He also co-manages two variable investment options
and is co-manager of another closed-end fund, Virtus Total Return Fund (NYSE: ZTR). He also is a manager of four exchange-traded funds, AdvisorShares Newfleet
Multi-Sector Income ETF (NYSE: MINC), Virtus Newfleet Multi-Sector Bond ETF (NFLT), Virtus Newfleet High Yield Bond ETF (BLHY), and Virtus Newfleet ABS/MBS ETF (VABS), and two offshore funds, the Virtus GF Multi-Sector Short Duration Bond Fund and
Virtus GF Multi-Sector Income Fund. He is also responsible for the structuring and management of Newfleet’s CLO platform.
Mr. Albrycht earned a B.A., cum laude, from Central Connecticut State University and an M.B.A., with honors, from the University of
Connecticut. He is a Chartered Financial Analyst® (CFA®) charterholder and has been working in the investment industry since 1985.
Benjamin Caron, CFA. Ben Caron is a senior managing director and portfolio manager at Newfleet. In addition to the Fund, Mr. Caron
is co-portfolio manager of the Virtus Newfleet Low Duration Core Plus Bond Fund, and two actively managed ETFs: AdvisorShares Newfleet Multi-Sector Income ETF (NYSE: MINC), and Virtus Newfleet Multi-Sector
Bond ETF (NYSE: NFLT). He also assists in the management of Virtus Newfleet Multi-Sector Short Term Bond Fund, Virtus Newfleet Multi-Sector Intermediate Bond Fund, Virtus Tactical Allocation Fund, two variable insurance investment options and the closed-end Virtus Total Return Fund Inc. (NYSE: ZTR).
Prior to joining Newfleet in 2011, Mr. Caron
was on the fixed income team at Goodwin Capital Advisers, a former Virtus investment management subsidiary. He joined Goodwin Capital in 2002 as a client service associate for the institutional markets group focusing on institutional fixed income
clients. Earlier in his career, he was with Fidelity Investments, where he was responsible for client management and sales in the managed account group.
Mr. Caron earned a B.A. from Syracuse University and an M.B.A. from Suffolk University. He is a Chartered Financial Analyst® (CFA®) charterholder and has been working in the investment industry since 1997.
Kyle A. Jennings, CFA. Kyle Jennings is a senior managing director and the head of credit
research at Newfleet. Mr. Jennings is also co-portfolio manager of Virtus Newfleet Senior Floating Rate Fund and Virtus Newfleet High Yield Fund.
Mr. Jennings has been a member of Newfleet’s corporate credit research team since 1998 and currently covers the gaming, healthcare,
and pharmaceutical industries. He is also a member of the team that formulates the leveraged finance strategy for the multi-sector fixed income strategies. In addition, Mr. Jennings is responsible for the structuring and management of
Newfleet’s CLO platform.
Prior to joining Newfleet in 2011, Mr. Jennings was on the fixed income team at Goodwin Capital
Advisers, a former Virtus investment management subsidiary. Before that, he was a credit research analyst in the banking industry for Shawmut Bank, Ironwood Capital, and Citizens Bank.
Mr. Jennings earned a B.S. in finance from the University of Connecticut and is a Chartered Financial Analyst® (CFA®) charterholder. He began his career in the investment industry in 1992.
Daniel Senecal, CFA. Daniel Senecal is a managing director and credit analyst at Newfleet. Mr. Senecal is a sector manager within
the emerging markets analyzing both sovereign and corporate debt.
Prior to joining Newfleet in 2011, Mr. Senecal was on the fixed
income team at Goodwin Capital Advisers, a former Virtus investment management subsidiary. He began at Goodwin Capital in 1997 as a corporate credit research analyst, followed by several roles, including sector manager for investment grade corporate
credit and sovereign credit. He was also the lead portfolio manager for the Phoenix High Yield Fund from 2003 until 2005 and the Phoenix Emerging Market Fund from 2004 to 2005.
Earlier in his career, Mr. Senecal completed a formal credit training program at Shawmut National Bank where he was a credit research
analyst and lender. He also worked at BankBoston as a corporate bond analyst.
Mr. Senecal earned a B.A. in economics and English from
Assumption College and an M.B.A. in finance from the University of Connecticut. He is a Chartered Financial Analyst® (CFA®)
charterholder, and he began his career in the investment industry in 1990.
| (a)(2) |
Other Accounts Managed by Portfolio Manager(s) or Management Team Member |
There may be certain inherent conflicts of interest that arise in connection with the portfolio managers’ management of the Fund’s
investments and the investments of any other accounts they manage. Such conflicts could include the aggregation of orders for all accounts managed by a particular portfolio manager, the allocation of purchases across all such accounts, the
allocation of IPOs and any soft dollar arrangements that the adviser/subadviser may have in place that could benefit the Fund and/or such other accounts. The Board of Trustees has adopted policies and procedures designed to address any such
conflicts of interest to ensure that all transactions are executed in the best interest of the Fund’s shareholders. Each adviser/subadviser is required to certify its compliance with these procedures on a quarterly basis. There have been no
material
compliance issues with respect to any of these policies and procedures during the Fund’s most recent fiscal year. Additionally, there are no material conflicts of interest between the
investment strategy of the Fund and the investment strategy of other accounts managed by portfolio managers since the portfolio managers generally manage funds and other accounts having similar investment strategies.
The following table provides information as of November 30, 2023, regarding any other accounts managed by the portfolio managers and
portfolio management team members for the Fund. As noted in the table, the portfolio managers managing the Fund may also manage or be members of management teams for other mutual funds within the Virtus Fund complex or other similar accounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Name of Portfolio
Manager or
Team Member |
|
Type of
Accounts |
|
Total
No. of
Accounts
Managed |
|
Total
Assets (in
millions) |
|
|
No. of
Accounts
where
Advisory
Fee is Based
on
Performance |
|
Total Assets
in Accounts
where
Advisory Fee
is Based on
Performance
(in millions) |
|
| David L. Albrycht |
|
Registered Investment Companies: |
|
17 |
|
$ |
7,525.3 |
|
|
1 |
|
$ |
144.9 |
|
|
|
Other Pooled Investment Vehicles: |
|
2 |
|
$ |
109.5 |
|
|
0 |
|
|
0 |
|
|
|
Other Accounts: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
| Benjamin Caron |
|
Registered Investment Companies: |
|
5 |
|
$ |
1,062.5 |
|
|
0 |
|
|
0 |
|
|
|
Other Pooled Investment Vehicles: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
Other Accounts: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
| Kyle A. Jennings |
|
Registered Investment Companies: |
|
4 |
|
$ |
993.4 |
|
|
0 |
|
|
0 |
|
|
|
Other Pooled Investment Vehicles: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
Other Accounts: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
| Daniel Senecal |
|
Registered Investment Companies: |
|
1 |
|
$ |
143.3 |
|
|
0 |
|
|
0 |
|
|
|
Other Pooled Investment Vehicles: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
Other Accounts: |
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
| (a)(3) |
Compensation Structure of Portfolio Manager(s) or Management Team Members |
Virtus, along with certain of its affiliated investment management firms, including Newfleet (collectively, “Virtus”), believes that the firm’s
compensation program is adequate and competitive to attract and retain high-caliber investment professionals. Investment professionals at Virtus receive a competitive base salary, an incentive bonus opportunity, and a benefits package. Certain
professionals who supervise and manage others also participate in a management incentive program reflecting their personal contribution and team performance. Certain key individuals also have the opportunity to take advantage of a long-term
incentive compensation program, including potential awards of Virtus restricted stock units (“RSUs”) with multi-year vesting, subject to Virtus board of directors’ approval.
Following is a more detailed description of the compensation structure:
| |
• |
|
Base Salary: Each portfolio manager is paid a fixed based salary, which is designed to be competitive in
light of the individual’s experience and responsibilities. Base salary is determined using compensation survey results of investment industry compensation conducted by an independent third party in evaluating competitive market compensation for
its investment management professionals. |
Incentive Bonus: Annual incentive payments are based on targeted
compensation levels, adjusted based on profitability, investment performance factors and a subjective assessment of contribution to the team effort. The short-term incentive payment is generally paid in cash, but a portion may be payable in RSUs and
mutual fund investments that appreciate or depreciate in value based on returns of one or more mutual funds managed by the investment professional. Individual payments are assessed using comparisons of actual investment performance with specific
peer group or index measures. Performance of funds managed is generally measured over one-, three-, and five-year periods and an individual manager’s participation is based on the performance of each
fund/account managed.
| |
• |
|
Other Benefits: Portfolio managers are also eligible to participate in broad-based plans offered generally
to employees of Virtus and its affiliates, including 401(k), health, and other employee benefit plans. |
While portfolio managers
compensation contains a performance component, this component is adjusted to reward investment personnel for managing within the stated framework and for not taking unnecessary risk. This approach helps ensure that investment management personnel
remain focused on managing and acquiring securities that correspond to a fund’s mandate and risk profile and are discouraged from taking on more risk and unnecessary exposure to chase performance for personal gain. Virtus believes it has
appropriate controls in place to handle any potential conflicts that may result from a substantial portion of portfolio manager compensation being tied to performance.
| (a)(4) |
Disclosure of Securities Ownership |
For the most recently completed fiscal year ended November 30, 2023, beneficial ownership of shares of the Fund by Messrs. Albrycht,
Caron, Jennings and Senecal are as follows. Beneficial ownership was determined in accordance with rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (17 CFR
240.161-1(a)(2)).
|
|
|
| Name of Portfolio Manager or
Team Member |
|
Dollar ($) Range of Fund Shares Beneficially
Owned |
| David L. Albrycht |
|
NONE |
| Benjamin Caron |
|
$100,001 - $500,00 |
| Kyle A. Jennings |
|
NONE |
| Daniel Senecal |
|
NONE |
| Item 9. |
Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. |
Not Applicable.
| Item 10. |
Submission of Matters to a Vote of Security Holders. |
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that were implemented
after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
| Item 11. |
Controls and Procedures. |
| |
(a) |
The registrant’s principal executive and principal financial officers, or persons performing similar
functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required
by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| |
(b) |
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting. |
| Item 12. |
Disclosure of Securities Lending Activities for Closed-End
Management Investment Companies. |
Not applicable.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(2)(1) There were no written solicitations to
purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
| (Registrant) |
|
Virtus Global Multi-Sector Income Fund |
|
|
|
|
|
| By (Signature and Title)* |
|
/s/ George R. Aylward |
|
|
|
|
George R. Aylward, President and Chief Executive Officer |
|
|
|
|
(principal executive officer) |
|
|
| Date July 15, 2024 |
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has
been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
|
|
|
|
| By (Signature and Title)* |
|
/s/ George R. Aylward |
|
|
|
|
George R. Aylward, President and Chief Executive Officer |
|
|
|
|
(principal executive officer) |
|
|
|
|
| Date July 15, 2024 |
|
|
|
|
|
| By (Signature and Title)* |
|
/s/ W. Patrick Bradley |
|
|
|
|
W. Patrick Bradley, Executive Vice President, Chief Financial Officer, and Treasurer |
|
|
|
|
(principal financial officer) |
|
|
|
|
| Date July 15, 2024 |
|
|
| * |
Print the name and title of each signing officer under his or her signature. |
EX-99.CODE ETH
CODE OF ETHICS FOR
CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS
Each Fund is committed to conducting business in accordance with applicable laws, rules and regulations and the highest standards of business
ethics, and to full and accurate disclosure — financial and otherwise — in compliance with applicable law. This Code of Ethics applies to each Fund’s Chief Executive Officer, President, Chief Financial Officer and Treasurer (or
persons performing similar functions) (together, “Senior Officers”).
Senior Officers must comply with applicable law and have a
responsibility to conduct themselves in an honest and ethical manner. They have leadership responsibilities that include creating a culture of high ethical standards and a commitment to compliance, maintaining a work environment that encourages the
internal reporting of compliance concerns and promptly addressing compliance concerns.
Senior Officers may be subject to certain
conflicts of interest inherent in the operation of the Funds, because the Senior Officers (in addition to their role as senior officers of the Fund) currently or may in the future serve as officers or employees of a Virtus affiliated investment
adviser1 (the “Adviser”), Virtus Investment Partners, Inc. or other affiliates thereof (collectively, “Virtus”) and as officers or trustees/directors of other registered
investment companies and unregistered investment funds advised by Virtus.
A variety of laws and regulations applicable to, and certain
policies and procedures adopted by, the Fund, the Adviser or Virtus govern certain conduct in connection with many of the conflict of interest situations that arise in connection with the operations of the Fund, including:
| |
• |
|
the Investment Company Act of 1940, as amended, and the rules and regulation promulgated thereunder by the
Securities and Exchange Commission (the “1940 Act”); |
| |
• |
|
the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the “Advisers Act”); |
| |
• |
|
the Code of Ethics adopted by the Fund pursuant to Rule 17j-1(c) under
the 1940 Act (collectively, the “Fund’s 1940 Act Code of Ethics”); |
| |
• |
|
one or more codes of ethics adopted by the Adviser that have been reviewed and approved by those Members of the
Board that are not “interested persons” of the Fund (the “Independent Members”) within the meaning of the 1940 Act (the “Adviser’s 1940 Act Code of Ethics” and, together with the Fund’s 1940 Act Code of
Ethics, the “1940 Act Codes of Ethics”); |
| |
• |
|
the policies and procedures adopted by the Fund pursuant to Rule 38a-1
under the 1940 Act (collectively, the “Fund Policies”); and |
| |
• |
|
each Adviser’s general policies and procedures (collectively, the “Adviser Policies”).
|
| 1 |
Virtus Investment Advisers, Inc.; Virtus Alternative Investment Advisers, Inc.; Virtus Fund Advisers, LLC;
AlphaSimplex Group, LLC; Ceredex Value Advisors LLC; Duff & Phelps Investment Management Co.; Kayne Anderson Rudnick Investment Management LLC; NFJ Investment Group, LLC; Silvant Capital Managemente LLC; Sustainable Growth Advisers, LP;
Virtus Fixed Income Advisers, LLC; Westchester Capital Management, LLC. (2023.5) |
Tab 2
The provisions of the 1940 Act, the Advisers Act, the 1940 Act Codes of Ethics, the Fund Policies and the Adviser
Policies are referred to herein collectively as the “Additional Conflict Rules”.
This Code of Ethics is different from, and is
intended to supplement, the Additional Conflict Rules. Accordingly, a violation of the Additional Conflict Rules by a Senior Officer is hereby deemed not to be a violation of this Code of Ethics, unless and until the Board of the Fund (the
“Board”) shall determine that any such violation of the Additional Conflict Rules is also a violation of this Code of Ethics.
Senior
Officers Should Act Honestly and Candidly
Each Senior Officer must:
| |
• |
|
act with integrity, including being honest and candid while still maintaining the confidentiality of information
where required by law or the Additional Conflict Rules; |
| |
• |
|
comply with the laws, rules and regulations that govern the conduct of the Fund’s operations and report any
suspected violations thereof in accordance with the section below entitled “Compliance With Code Of Ethics”; and |
| |
• |
|
adhere to a high standard of business ethics. |
Conflicts Of Interest
A conflict of
interest for the purpose of this Code of Ethics occurs when private interests interfere in any way, or even appear to interfere, with the interests of the Fund. Senior Officers are expected to use objective and unbiased standards when making
decisions that affect the Fund, keeping in mind that Senior Officers are subject to certain inherent conflicts of interest because Senior Officers of a Fund also are or may be officers of the Adviser and other funds advised or serviced by Virtus.
Questions regarding the application or interpretation of this Code of Ethics should be raised with the Chief Compliance Officer of the
Fund (the “Chief Compliance Officer”) prior to taking action.
Some conflict of interest situations that should be approved by
the Chief Compliance Officer, if material, include the following:
| |
• |
|
the receipt of any entertainment or non-nominal gift by the Senior
Officer, or a member of his or her family, from any company with which the Fund has current or prospective business dealings (other than the Adviser or Virtus), unless such entertainment or gift is business related, reasonable in cost, appropriate
as to time and place, and not so frequent as to raise any question of impropriety; |
| |
• |
|
any ownership interest in, or any consulting or employment relationship with, any of the Fund’s service
providers, other than the Adviser or Virtus; or |
| |
• |
|
a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for
effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Senior Officer’s employment by the Adviser or Virtus, such as compensation or equity ownership. |
Tab 2
Disclosures
It is the policy of the Funds to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and
regulations in all reports and documents that the Fund files with, or submits to, the Securities and Exchange Commission or a national securities exchange and in all other public communications made by the Fund. Senior Officers are required to
promote compliance with this policy and to abide by the Fund’s standards, policies and procedures designed to promote compliance with this policy.
Each Senior Officer must:
| |
• |
|
familiarize himself or herself with the disclosure requirements applicable to the Fund as well as the business
and financial operations of the Fund; and |
| |
• |
|
not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, including to the
Board, the Fund’s independent auditors, the Fund’s counsel, counsel to the Independent Members, governmental regulators or self-regulatory organizations. |
Compliance With Code Of Ethics
Known or
suspected violations of this Code of Ethics or other laws, regulations, policies or procedures applicable to the Fund, should be reported on a timely basis to the Chief Compliance Officer or may be reported to the Virtus compliance hotline
maintained in accordance with the Fund’s Procedures for Complaints Regarding Accounting, Internal Accounting Controls or Auditing Matters (the “Whistleblower Policy”). In accordance with that Policy, no one will be subject to
retaliation because of a good faith report of a suspected violation.
The Fund will follow these procedures (or, alternatively, the
procedures set forth in the Whistleblower Policy) in investigating and enforcing this Code of Ethics, and in reporting on this Code of Ethics:
| |
• |
|
the Chief Compliance Officer will take all appropriate action to investigate any actual or potential violations
reported to him or her; |
| |
• |
|
violations and potential violations will be reported to the applicable Fund Board after such investigation;
|
| |
• |
|
if the Fund Board determines that a violation has occurred, it will take all appropriate disciplinary or
preventive action; and |
| |
• |
|
appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the
event of criminal or other serious violations of law, notification of the Securities and Exchange Commission or other appropriate law enforcement authorities. |
Waivers Of Code Of Ethics
Except as
otherwise provided in this Code of Ethics, the Chief Compliance Officer is responsible for applying this Code of Ethics to specific situations in which questions are presented to the Chief Compliance Officer and has the authority to interpret this
Code of Ethics in any particular situation.
Each Fund Board, or any duly designated committee thereof, is responsible for granting
waivers of this Code of Ethics, as appropriate. Any changes to or waivers of this Code of Ethics will, to the extent required, be disclosed on Form N-CSR, or otherwise, as provided by Securities and Exchange
Commission rules.
Tab 2
Recordkeeping
Records pertaining to the matters covered by this Policy will be maintained and preserved in accordance with applicable laws and regulations
and the Fund’s Books and Records Policy.
All reports and records prepared or maintained pursuant to this Code of Ethics shall be
considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code of Ethics, such matters shall not be disclosed to anyone other than the Independent Members and their counsel, the Fund and
its counsel, the Adviser and/or other Virtus entity and its counsel and any other advisors, consultants or counsel retained by the Members, the Independent Members or any committee of the Board.
Tab 2
Certification Pursuant to Rule 30a-2(a) under the 1940
Act and Section 302 of the Sarbanes-Oxley Act
I, George R. Aylward, certify that:
| 1. |
I have reviewed this report on Form N-CSR of Virtus Global Multi-Sector
Income Fund; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report; |
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule
30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared; |
| |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles; |
| |
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| |
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. |
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and
the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
| |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting. |
|
|
|
|
|
|
|
| Date: July 15, 2024 |
|
|
|
|
|
/s/ George R. Aylward |
|
|
|
|
|
|
George R. Aylward, President and Chief Executive Officer |
|
|
|
|
|
|
(principal executive officer) |
Certification Pursuant to Rule 30a-2(a) under the 1940
Act and Section 302 of the Sarbanes-Oxley Act
I, W. Patrick Bradley, certify that:
| 1. |
I have reviewed this report on Form N-CSR of Virtus Global Multi-Sector
Income Fund; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report; |
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule
30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared; |
| |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles; |
| |
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| |
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. |
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and
the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
| |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting. |
|
|
|
|
|
|
|
| Date: July 15, 2024 |
|
|
|
|
|
/s/ W. Patrick Bradley |
|
|
|
|
|
|
W. Patrick Bradley, Executive Vice President, |
|
|
|
|
|
|
Chief Financial Officer, and Treasurer |
|
|
|
|
|
|
(principal financial officer) |
Certification Pursuant to Rule 30a-2(b) under the 1940
Act and Section 906 of the Sarbanes-Oxley Act
I, George R. Aylward, President and Chief Executive Officer of Virtus Global
Multi-Sector Income Fund (the “Registrant”), certify that:
| |
1. |
The Form N-CSR of the Registrant (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Registrant. |
|
|
|
|
|
|
|
| Date: July 15, 2024 |
|
|
|
|
|
/s/ George R. Aylward |
|
|
|
|
|
|
George R. Aylward, President and Chief Executive Officer |
|
|
|
|
|
|
(principal executive officer) |
I, W. Patrick Bradley, Executive Vice President, Chief Financial Officer, and Treasurer of Virtus Global Multi-Sector Income
Fund (the “Registrant”), certify that:
| |
1. |
The Form N-CSR of the Registrant (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Registrant. |
|
|
|
|
|
|
|
| Date: July 15, 2024 |
|
|
|
|
|
/s/ W. Patrick Bradley |
|
|
|
|
|
|
W. Patrick Bradley, Executive Vice President, |
|
|
|
|
|
|
Chief Financial Officer, and Treasurer |
|
|
|
|
|
|
(principal financial officer) |
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