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 811-05620
Virtus Total Return Fund Inc.
(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
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 Total Return Fund Inc.
Not FDIC Insured • No Bank Guarantee • May Lose
Value
FUND DISTRIBUTIONS AND MANAGED DISTRIBUTION PLAN
The
Board of Directors (the “Board,” or the “Directors”) of Virtus Total Return Fund Inc. (the “Fund”) has adopted a Managed Distribution Plan (the “Plan”) which provides for the Fund to make a monthly
distribution at the rate of $0.05 per share. Prior to the September 2023 distribution, the rate was $0.08. Under the terms of the Plan, the Fund seeks to maintain a consistent distribution level that may be paid in part or in full from net
investment income, realized capital gains, and a return of capital, or a combination thereof.
If the Fund estimates that it has distributed more than its
income and capital gains in a particular period, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of
capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”
You should not draw any conclusions about the Fund’s
investment performance from the amount of the Fund’s distributions or from the terms of the Fund’s Plan.
The amounts and sources of distributions reported in the
Fund’s notices issued pursuant to Section 19(a) of the Investment Company Act of 1940 are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will
depend upon the Fund’s investment results during its fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for the calendar year that will tell you how to report distributions for
federal income tax purposes.
The Board may amend, suspend
or terminate the Plan at any time, without prior notice to shareholders, if it deems such action to be in the best interest of the Fund and its shareholders.
Information on the Fund is available through the closed-end
fund section on the web at
www.Virtus.com. Section 19(a) notices are posted on the website at:
https://www.virtus.com/ZTR
Table of Contents
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Dear Virtus Total Return 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 teams at Duff & Phelps Investment Management and Newfleet Asset Management about the financial markets and the performance of the Fund’s equity and fixed income investments, respectively.
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 -3.96%, including $0.87 in reinvested distributions, and its market price returned -10.69%. For the same period, the Fund’s composite benchmark, which consists of 60% FTSE Developed Core Infrastructure 50/50 Index (net) (representing
equities) and 40% Bloomberg U.S. Aggregate Bond Index (representing fixed income), returned -1.54%. The underlying indices returned -3.49% for equities and 1.18% for fixed income.
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 Director
Virtus Total Return Fund Inc.
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.
VIRTUS TOTAL RETURN FUND
INC.
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
November 30, 2023
About the
Fund:
Virtus Total Return Fund Inc.
(NYSE: ZTR) (the “Fund”) has an investment objective of capital appreciation, with current income a secondary objective. The Fund seeks to meet its objectives through a balance of equity and fixed income investments. There is no
guarantee that the Fund will achieve its investment objectives.
The use of leverage currently enables the
Fund to borrow at short-term rates with the expectation of investing at higher yields on its investments. As of November 30, 2023, the Fund’s leverage consisted of $187 million of borrowings made pursuant to a line of credit, which represented
approximately 30% of the Fund’s total assets.
Duff
& Phelps Investment Management Co. (DPIM)
The equity portion of the Fund is invested
globally in owners/operators of infrastructure in the communications, utility, energy, and transportation industries (also referred to as “essential services”). DPIM manages the equity portion of the Fund’s portfolio, utilizing its
global infrastructure strategy that leverages the company’s in-depth fundamental research expertise in income-producing securities. The following commentary is provided by the portfolio management team at DPIM and covers the Fund’s
equity portion for the fiscal year ended November 30, 2023.
How did the equity markets perform during the Fund’s
fiscal year ended November 30, 2023?
Global developed markets equities rose
12.98%, as measured by the MSCI World Index (net), for the fiscal year. Early in the 12-month period, investors were optimistic that central banks might be nearing the end of their interest rate hiking cycle, and that China’s reopening would
support global economic growth. Sentiment changed mid-year as investors began to expect interest rates to stay higher for longer. However, in November, sentiment reversed once again due to increased evidence that inflation might have peaked in the
U.S. and the Eurozone. Investors’ belief that interest rate cuts could be a possibility in 2024 sent bond yields plummeting. This resulted in global equity markets notching their best monthly return in three years to close out the fiscal
year.
The benchmark for the equity
portion of the Fund, the FTSE Developed Core Infrastructure 50/50 Index (net), declined 3.49% in the period, significantly trailing the broader market. Transportation was the best-performing sector, with European airports experiencing strong
passenger volumes close to pre-pandemic levels. Toll road traffic was solid, with lower fuel prices removing some headwinds for vehicle usage. North American railroads were the laggard of the sector as economic concerns weighed on volume growth
expectations, and train derailments brought negative headlines.
Midstream energy stocks were modestly lower
for the fiscal year, mainly as a result of company-specific issues that impacted diversified midstream companies based in Canada. The communications sector performed poorly due to a mix of higher interest rates and a maturing of the independent
cellular tower business model, although the underlying fundamentals remained solid. Utilities were the worst-performing sector as investors appeared to shift away from less economically sensitive stocks like utilities despite constructive earnings
results and management commentary.
For information regarding the indexes and certain key investment terms, see
Key Investment Terms starting on page 9.
VIRTUS TOTAL RETURN FUND
INC.
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
What
factors affected the performance of the Fund’s equity portfolio during the fiscal year?
For the 12 months ended November 30, 2023,
the equity portion of the Fund, including the impact of leverage employed by the Fund, returned -5.15% (before fees and expenses), while the FTSE Developed Core Infrastructure 50/50 Index (net), which serves as the portfolio’s benchmark,
returned -3.49%.
The equity portion of
the Fund underperformed its equity benchmark for the fiscal year. Overall, sector allocation was negative, while stock selection was neutral. Sector allocation was hurt by overweight positions in midstream energy and communications, as well as an
underweight in transportation. The portfolio’s underweight position in utilities had a positive allocation impact. Negative stock selection in utilities offset the positive selection across the other sectors.
At the security level, the largest positive
contributors to performance were Aena SME, Flughafen Zurich, and Targa Resources. Aena and Flughafen Zurich, airport operators located in Spain and Switzerland, respectively, were supported by robust passenger traffic across Europe during the summer
holiday season and solid schedules that airlines unveiled for the winter months. Targa Resources is an integrated midstream energy company that benefited from volume growth and increased confidence from investors about earnings. Targa delivered a
healthy pace of share repurchases during the fiscal year while continuing to execute on a robust capital spending program to maintain its growth profile.
The largest detractors from performance in
the portfolio were NextEra Energy, Dominion Energy, and Orsted A/S. NextEra declined significantly in the third fiscal quarter as the rapid rise in interest rates made it more expensive to fund growth in the company’s renewable business
through its financing vehicle, NextEra Partners. Dominion Energy, a Virginia-based utility, traded lower early in the year after announcing a business review and potential restructuring. The announcement surprised investors and raised concerns that
the outcome of the business review could be dilutive to earnings. The stock languished throughout the year as the strategic review took longer than expected. Orsted is the world leader in offshore wind generation. In recent quarters, increased
competition, inflationary pressures, and higher interest rates have squeezed investment returns in this sector. These conditions have been most acute in the U.S., Orsted’s newest market, which resulted in management writing down the value of
the company’s U.S. projects during August. While the U.S. only represents a portion of Orsted’s projects, our concerns about the potential impact of lower returns on other projects led us to eliminate our position in the stock.
Newfleet Asset Management (Newfleet)
Newfleet manages the Fund’s fixed
income portfolio, which has a target allocation of 40%, utilizing its multi-sector core plus strategy. The following commentary is provided by the portfolio management team at Newfleet, and it covers the Fund’s fixed income portfolio for the
year ended November 30, 2023.
For information regarding the indexes and certain key investment terms, see
Key Investment Terms starting on page 9.
VIRTUS TOTAL RETURN FUND
INC.
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
How did
the fixed income 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.
What factors affected the performance of the Fund’s fixed
income portfolio during the fiscal year?
For the 12 months ended November 30, 2023,
the fixed income portion of the Fund, including the impact of leverage employed by the Fund, returned 9.78% (before fees and expenses), while the Bloomberg U.S. Aggregate Bond Index, which serves as the portfolio’s benchmark, returned
1.18%.
The portfolio’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 emerging markets high yield had a positive impact on performance for the 12-month
period. Allocation to non-agency mortgage-backed securities over agency mortgage-backed securities, as well as issue selection within investment grade corporate bonds, contributed to performance.
The portfolio’s duration, or
sensitivity to interest rates, and yield curve positioning within U.S. Treasuries, as well as the allocation to and selection within commercial mortgage-backed securities, detracted during the period. The portfolio’s underweight to investment
grade corporate bonds also had a negative impact, however selection within the sector was positive.
For information regarding the indexes and certain key investment terms, see
Key Investment Terms starting on page 9.
VIRTUS TOTAL RETURN FUND
INC.
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
Managed
Distribution Plan
As discussed on the
inside cover of this Report, the Fund currently operates under a Managed Distribution Plan (the Plan) pursuant to which the Fund makes a monthly distribution at a rate of $0.05 per share. Prior to September 2023, the monthly distribution rate was
$0.08 per share. As a result of execution on the Plan, 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 Plan 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 9.
VIRTUS TOTAL RETURN FUND
INC.
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 |
-10.69%
|
2.79%
|
5.48%
|
| Net
Asset Value1,2 |
-3.96%
|
3.93%
|
5.75%
|
| Virtus
Total Return Fund Inc. Linked Benchmark1 |
-1.54%
|
3.14%
|
3.50%
|
| Bloomberg
U.S. Aggregate Bond Index1,3 |
1.18%
|
0.71%
|
1.37%
|
| FTSE
Developed Core Infrastructure 50/50 Index (net)1,3 |
-3.49%
|
4.29%
|
5.77%
|
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. |
For information regarding the indexes and certain key investment terms, see
Key Investment Terms starting on page 9.
VIRTUS TOTAL RETURN FUND
INC.
MANAGER’S DISCUSSION OF FUND PERFORMANCE (Unaudited) (Continued)
November 30, 2023
|
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 for each period reported. Dividends and distributions are assumed, for the purpose of this
calculation, to be reinvested at prices 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 the use of net
asset value for 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 9.
Virtus Total Return Fund
Inc.
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
| Common
Stocks |
|
74%
|
| Utilities
|
34%
|
|
| Industrials
|
20
|
|
| Energy
|
11
|
|
| All
Other Common Stocks |
9
|
|
| Corporate
Bonds and Notes |
|
11
|
| Financials
|
3
|
|
| Energy
|
2
|
|
| Health
Care |
1
|
|
| All
Other Corporate Bonds and Notes |
5
|
|
| Mortgage-Backed
Securities |
|
5
|
| Asset-Backed
Securities |
|
4
|
| Leveraged
Loans |
|
3
|
| Foreign
Government Securities |
|
2
|
| U.S.
Government Securities |
|
1
|
| Total
|
|
100%
|
|
|
|
|
Country
Weightings
| United
States |
63%
|
| Australia
|
7
|
| Canada
|
6
|
| Spain
|
6
|
| United
Kingdom |
5
|
| Netherlands
|
3
|
| France
|
3
|
| Other
|
7
|
| Total
|
100%
|
|
|
|
VIRTUS TOTAL RETURN FUND
INC.
KEY INVESTMENT TERMS (Unaudited)
November 30, 2023
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index measures the U.S.
investment-grade fixed-rate bond market. 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.
Designated Activity Company (“DAC”)
A new company type that was created as part of the New
Companies Act 2014, which came into force on the 1st June 2015 in Ireland. This limited company type is applicable to those companies who wish to outline and define a specific type of business in their Constitution, rather than have unlimited
powers as per the LTD company type.
Eurozone
The countries belonging to the European Union that use the euro
as their unit of money, which as of the date of this report are: Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and
Spain.
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.
FTSE Developed Core Infrastructure 50/50
Index (net)
The FTSE Developed Core Infrastructure 50/50
Index (net) is a free float-adjusted market capitalization-weighted index that gives participants an industry-defined interpretation of infrastructure and adjusts the exposure to certain infrastructure sub-sectors. The constituent weights for the
index are 50% utilities, 30% transportation including capping of 7.5% for railroads/railways and a 20% mix of other sectors including pipelines, satellites, and telecommunication towers. The index is calculated on a total return basis with net
dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.
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.
MSCI World Index (net)
The MSCI World Index (net) is a free float-adjusted market
capitalization-weighted index that measures developed global market equity performance. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales
charges, and it is not available for direct investment.
Risk Assets
Risk assets are those that tend to demonstrate price
volatility, such as equities, high yield bonds, currencies, and commodities.
VIRTUS TOTAL RETURN FUND
INC.
KEY INVESTMENT TERMS (Unaudited) (Continued)
November 30, 2023
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.
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS
November 30, 2023
($ reported in thousands)
| |
Par
Value(1) |
|
Value
|
| U.S.
Government Securities—1.4% |
| U.S.
Treasury Bonds |
|
|
|
| 4.000%,
11/15/52(2) |
$ 4,730
|
|
$
4,324 |
| 3.625%,
5/15/53 |
2,210
|
|
1,886
|
Total
U.S. Government Securities
(Identified Cost $6,859) |
|
6,210
|
| |
|
|
|
| |
| Municipal
Bonds—0.5% |
| California—0.1%
|
|
|
University
of California, Regents Series B-A, Taxable
4.428%, 5/15/48 |
290
|
|
241
|
| Florida—0.1%
|
|
|
Broward
County, Water & Sewer Utility Revenue Series A
4.000%, 10/1/47 |
370
|
|
369
|
| Idaho—0.1%
|
|
|
Idaho
Health Facilities Authority St. Luke’s Health System Revenue Taxable Series B
5.020%, 3/1/48 |
355
|
|
315
|
| Illinois—0.0%
|
|
|
Sales
Tax Securitization Corp. Series B, Second Lien, Taxable (BAM Insured)
3.411%, 1/1/43 |
85
|
|
64
|
| New
York—0.1% |
|
|
Metropolitan
Transportation Authority Revenue Taxable Series A
5.000%, 11/15/45 |
530
|
|
570
|
| Texas—0.0%
|
|
|
State
of Texas, Texas Transportation Commission General Obligation Taxable
3.211%, 4/1/44 |
110
|
|
84
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Virginia—0.1%
|
|
|
City
of Bristol, General Obligation Taxable (State AID Withholding Insured)
4.210%, 1/1/42 |
$ 565
|
|
$
469 |
Total
Municipal Bonds
(Identified Cost $2,416) |
|
2,112
|
| |
|
|
|
| |
| Foreign
Government Securities—2.3% |
| Bolivarian
Republic of Venezuela |
|
|
|
| 9.375%,
1/13/34(3) |
225
|
|
40
|
RegS
8.250%, 10/13/24(3)(4) |
610
|
|
96
|
RegS
7.650%, 4/21/25(3)(4) |
830
|
|
129
|
Brazil
Notas do Tesouro Nacional Series F
10.000%, 1/1/29 |
1,415
BRL |
|
281
|
Dominican
Republic 144A
4.875%, 9/23/32(5) |
865
|
|
744
|
Federative
Republic of Brazil
6.000%, 10/20/33 |
400
|
|
389
|
Hungary
Government International Bond 144A
6.250%, 9/22/32(5) |
250
|
|
255
|
Kingdom
of Jordan 144A
5.850%, 7/7/30(5) |
295
|
|
268
|
| Kingdom
of Morocco |
|
|
|
144A
3.000%, 12/15/32(5) |
200
|
|
157
|
144A
5.500%, 12/11/42(5) |
295
|
|
250
|
Republic
of Angola 144A
8.250%, 5/9/28(5) |
465
|
|
412
|
Republic
of Argentina
3.500%, 7/9/41(6) |
1,025
|
|
334
|
Republic
of Colombia
8.000%, 11/14/35 |
200
|
|
207
|
Republic
of Egypt 144A
7.600%, 3/1/29(5) |
665
|
|
463
|
Republic
of Ghana RegS
8.125%, 3/26/32(3)(4) |
765
|
|
326
|
Republic
of Ivory Coast 144A
6.375%, 3/3/28(5) |
320
|
|
307
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Foreign
Government Securities—continued |
Republic
of Nigeria 144A
7.375%, 9/28/33(5) |
$ 320
|
|
$
253 |
Republic
of Philippines
3.700%, 3/1/41 |
490
|
|
390
|
Republic
of Poland
4.875%, 10/4/33 |
325
|
|
315
|
Republic
of Serbia 144A
6.500%, 9/26/33(5) |
300
|
|
296
|
Republic
of South Africa
5.875%, 6/22/30 |
445
|
|
413
|
| Republic
of Turkiye |
|
|
|
| 7.625%,
4/26/29 |
645
|
|
637
|
| 9.125%,
7/13/30 |
555
|
|
581
|
| Saudi
International Bond |
|
|
|
144A
5.500%, 10/25/32(5) |
315
|
|
323
|
144A
4.500%, 10/26/46(5) |
745
|
|
603
|
State
of Qatar 144A
3.750%, 4/16/30(5) |
305
|
|
289
|
| Ukraine
Government |
|
|
|
144A
7.750%, 9/1/26(3)(5) |
245
|
|
68
|
RegS
7.750%, 9/1/26(3)(4) |
290
|
|
81
|
| United
Mexican States |
|
|
|
| 3.500%,
2/12/34 |
400
|
|
325
|
| 6.338%,
5/4/53 |
755
|
|
718
|
Total
Foreign Government Securities
(Identified Cost $11,241) |
|
9,950
|
| |
|
|
|
| |
| Mortgage-Backed
Securities—7.5% |
| Agency—1.6%
|
|
|
Federal
Home Loan Mortgage Corporation Pool #SD8309
6.000%, 3/1/53 |
1,786
|
|
1,791
|
| Federal
National Mortgage Association |
|
|
|
Pool
#FS4438
5.000%, 11/1/52 |
852
|
|
822
|
Pool
#MA4785
5.000%, 10/1/52 |
859
|
|
828
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Agency—continued
|
|
|
Pool
#MA4805
4.500%, 11/1/52 |
$ 889
|
|
$ 833
|
Pool
#MA4980
6.000%, 4/1/53 |
1,601
|
|
1,608
|
Pool
#MA5072
5.500%, 7/1/53 |
851
|
|
838
|
| |
|
|
6,720
|
| |
|
|
|
| |
| Non-Agency—5.9%
|
|
|
| Ajax
Mortgage Loan Trust |
|
|
|
2019-D,
A1 144A
2.956%, 9/25/65(5)(6) |
203
|
|
187
|
2022-B,
A1 144A
3.500%, 3/27/62(5)(6) |
717
|
|
663
|
| American
Homes 4 Rent Trust |
|
|
|
2014-SFR2,
C 144A
4.705%, 10/17/36(5) |
1,000
|
|
984
|
2015-SFR1,
A 144A
3.467%, 4/17/52(5) |
151
|
|
146
|
2015-SFR2,
C 144A
4.691%, 10/17/52(5) |
340
|
|
330
|
| AMSR
Trust |
|
|
|
2021-SFR2,
C 144A
1.877%, 8/17/38(5) |
245
|
|
216
|
2021-SFR3,
D 144A
2.177%, 10/17/38(5) |
260
|
|
226
|
| Arroyo
Mortgage Trust |
|
|
|
2019-1,
A1 144A
3.805%, 1/25/49(5)(6) |
410
|
|
376
|
2019-2,
A1 144A
3.347%, 4/25/49(5)(6) |
144
|
|
133
|
Benchmark
Mortgage Trust 2023-B38, A2
5.626%, 4/15/56 |
360
|
|
357
|
BPR
Trust 2022-OANA, A (1 month Term SOFR + 1.898%, Cap N/A, Floor 1.898%) 144A
7.221%, 4/15/37(5)(6) |
435
|
|
427
|
BX
Commercial Mortgage Trust 2019-XL, C (1 month Term SOFR + 1.364%, Cap N/A, Floor 1.250%) 144A
6.687%, 10/15/36(5)(6) |
510
|
|
505
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
| BX
Trust |
|
|
|
2019-OC11,
D 144A
4.075%, 12/9/41(5)(6) |
$ 660
|
|
$ 553
|
2022-CLS,
A 144A
5.760%, 10/13/27(5) |
663
|
|
651
|
CENT
Trust 2023-CITY, A (1 month Term SOFR + 2.620%, Cap N/A, Floor 2.620%) 144A
7.943%, 9/15/28(5)(6) |
340
|
|
342
|
| Chase
Mortgage Finance Corp. |
|
|
|
2016-SH1,
M2 144A
3.750%, 4/25/45(5)(6) |
97
|
|
86
|
2016-SH2,
M2 144A
3.750%, 12/25/45(5)(6) |
334
|
|
294
|
CIM
Trust 2022-R2, A1 144A
3.750%, 12/25/61(5)(6) |
411
|
|
374
|
Citigroup
Mortgage Loan Trust, Inc. 2018-RP1, A1 144A
3.000%, 9/25/64(5)(6) |
225
|
|
215
|
COLT
Mortgage Loan Trust 2022-5, A1 144A
4.550%, 4/25/67(5)(6) |
437
|
|
415
|
| CoreVest
American Finance Trust |
|
|
|
2019-3,
C 144A
3.265%, 10/15/52(5) |
400
|
|
336
|
2022-1,
A 144A
4.744%, 6/17/55(5)(6) |
435
|
|
418
|
Credit
Suisse Mortgage Capital Certificates 2019-ICE4, A (1 month Term SOFR + 1.027%, Cap N/A, Floor 0.980%) 144A
6.350%, 5/15/36(5)(6) |
923
|
|
921
|
Credit
Suisse Mortgage Capital Trust 2020-RPL4, A1 144A
2.000%, 1/25/60(5)(6) |
289
|
|
249
|
Deephaven
Residential Mortgage Trust 2022-1, A1 144A
2.205%, 1/25/67(5)(6) |
280
|
|
243
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
Ellington
Financial Mortgage Trust 2019-2, A3 144A
3.046%, 11/25/59(5)(6) |
$ 38
|
|
$ 35
|
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(5)(6) |
469
|
|
459
|
FirstKey
Homes Trust 2021-SFR1, D 144A
2.189%, 8/17/38(5) |
530
|
|
465
|
Galton
Funding Mortgage Trust 2018-1, A23 144A
3.500%, 11/25/57(5)(6) |
15
|
|
14
|
INTOWN
Mortgage Trust 2022-STAY, A (1 month Term SOFR + 2.489%, Cap N/A, Floor 2.489%) 144A
7.812%, 8/15/39(5)(6) |
537
|
|
538
|
JPMBB
Commercial Mortgage Securities Trust 2014-C18, AS
4.439%, 2/15/47(6) |
559
|
|
554
|
| JPMorgan
Chase Mortgage Trust |
|
|
|
2014-5,
B2 144A
2.751%, 10/25/29(5)(6) |
205
|
|
180
|
2017-3,
2A2 144A
2.500%, 8/25/47(5)(6) |
77
|
|
65
|
LHOME
Mortgage Trust 2021-RTL1, A1 144A
3.090%, 2/25/26(5)(6) |
30
|
|
30
|
| MetLife
Securitization Trust |
|
|
|
2017-1A,
M1 144A
3.298%, 4/25/55(5)(6) |
241
|
|
201
|
2019-1A,
A1A 144A
3.750%, 4/25/58(5)(6) |
42
|
|
41
|
MFA
Trust 2022-NQM2, A1 144A
4.000%, 5/25/67(5)(6) |
202
|
|
185
|
| Mill
City Mortgage Loan Trust |
|
|
|
2017-3,
B1 144A
3.250%, 1/25/61(5)(6) |
416
|
|
335
|
2019-1,
M2 144A
3.500%, 10/25/69(5)(6) |
354
|
|
298
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
| New
Residential Mortgage Loan Trust |
|
|
|
2014-1A,
A 144A
3.750%, 1/25/54(5)(6) |
$ 36
|
|
$ 33
|
2016-3A,
A1 144A
3.750%, 9/25/56(5)(6) |
46
|
|
42
|
2016-3A,
B1 144A
4.000%, 9/25/56(5)(6) |
181
|
|
167
|
2016-4A,
A1 144A
3.750%, 11/25/56(5)(6) |
21
|
|
20
|
2016-4A,
B1A 144A
4.500%, 11/25/56(5)(6) |
942
|
|
881
|
2017-2A,
A3 144A
4.000%, 3/25/57(5)(6) |
738
|
|
685
|
2019-RPL2,
M2 144A
3.750%, 2/25/59(5)(6) |
440
|
|
359
|
ORL
Trust 2023-GLKS, A (1 month Term SOFR + 2.350%, Cap N/A, Floor 2.350%) 144A
7.673%, 10/19/36(5)(6) |
438
|
|
438
|
Palisades
Mortgage Loan Trust 2021-RTL1, A1 144A
2.857%, 6/25/26(5)(6) |
280
|
|
275
|
| Progress
Residential Trust |
|
|
|
2019-SFR3,
B 144A
2.571%, 9/17/36(5) |
280
|
|
271
|
2021-SFR3,
D 144A
2.288%, 5/17/26(5) |
830
|
|
739
|
RCKT
Mortgage Trust 2020-1, A1 144A
3.000%, 2/25/50(5)(6) |
187
|
|
152
|
Residential
Mortgage Loan Trust 2019-2, A1 144A
2.913%, 5/25/59(5)(6) |
6
|
|
6
|
Sequoia
Mortgage Trust 2013-8, B1
3.480%, 6/25/43(6) |
69
|
|
65
|
Starwood
Mortgage Residential Trust 2021-3, A3 144A
1.518%, 6/25/56(5)(6) |
63
|
|
49
|
| Towd
Point Mortgage Trust |
|
|
|
2016-4,
B1 144A
3.957%, 7/25/56(5)(6) |
480
|
|
439
|
2017-1,
A2 144A
3.500%, 10/25/56(5)(6) |
350
|
|
339
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
2017-1,
M1 144A
3.750%, 10/25/56(5)(6) |
$ 385
|
|
$ 362
|
2017-4,
A2 144A
3.000%, 6/25/57(5)(6) |
610
|
|
541
|
2018-6,
A1B 144A
3.750%, 3/25/58(5)(6) |
330
|
|
303
|
2018-6,
A2 144A
3.750%, 3/25/58(5)(6) |
480
|
|
406
|
2019-2,
A2 144A
3.750%, 12/25/58(5)(6) |
515
|
|
440
|
2019-4,
A2 144A
3.250%, 10/25/59(5)(6) |
445
|
|
373
|
2020-1,
M1 144A
3.500%, 1/25/60(5)(6) |
220
|
|
173
|
2021-1,
A2 144A
2.750%, 11/25/61(5)(6) |
465
|
|
356
|
| Tricon
American Homes Trust |
|
|
|
2019-SFR1,
C 144A
3.149%, 3/17/38(5) |
590
|
|
550
|
2020-SFR2,
D 144A
2.281%, 11/17/39(5) |
660
|
|
561
|
Tricon
Residential Trust 2021-SFR1, B 144A
2.244%, 7/17/38(5) |
185
|
|
166
|
TVC
Mortgage Trust 2020-RTL1, M 144A
6.193%, 9/25/24(5)(6) |
520
|
|
519
|
| VCAT
LLC |
|
|
|
2021-NPL3,
A1 144A
1.743%, 5/25/51(5)(6) |
126
|
|
119
|
2021-NPL4,
A1 144A
1.868%, 8/25/51(5)(6) |
352
|
|
332
|
| Verus
Securitization Trust |
|
|
|
2019-4,
M1 144A
3.207%, 11/25/59(5)(6) |
220
|
|
194
|
2022-4,
A1 144A
4.474%, 4/25/67(5)(6) |
371
|
|
353
|
2022-5,
A1 144A
3.800%, 4/25/67(5)(6) |
639
|
|
581
|
2022-7,
A1 144A
5.152%, 7/25/67(5)(6) |
349
|
|
340
|
Visio
Trust 2020-1R, A2 144A
1.567%, 11/25/55(5) |
62
|
|
55
|
Wells
Fargo Commercial Mortgage Trust 2014-C24, AS
3.931%, 11/15/47 |
649
|
|
602
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Non-Agency—continued
|
|
|
Wells
Fargo Mortgage Backed Securities Trust 2020-4, A1 144A
3.000%, 7/25/50(5)(6) |
$ 119
|
|
$
97 |
| |
|
|
25,430
|
Total
Mortgage-Backed Securities
(Identified Cost $34,423) |
|
32,150
|
| |
|
|
|
| |
| Asset-Backed
Securities—5.3% |
| Automobiles—2.1%
|
|
|
ACC
Auto Trust 2021-A, C 144A
3.790%, 4/15/27(5) |
745
|
|
735
|
ACC
Trust 2021-1, C 144A
2.080%, 12/20/24(5) |
187
|
|
184
|
ACM
Auto Trust 2023-2A, A 144A
7.970%, 6/20/30(5) |
367
|
|
368
|
American
Credit Acceptance Receivables Trust 2022-1, E 144A
3.640%, 3/13/28(5) |
560
|
|
522
|
Avid
Automobile Receivables Trust 2021-1, E 144A
3.390%, 4/17/28(5) |
230
|
|
214
|
Avis
Budget Rental Car Funding LLC (AESOP) 2019-2A, D 144A
3.040%, 9/22/25(5) |
595
|
|
573
|
| Carvana
Auto Receivables Trust |
|
|
|
2019-3A,
E 144A
4.600%, 7/15/26(5) |
509
|
|
505
|
2023-N4,
C 144A
6.590%, 2/11/30(5) |
485
|
|
488
|
| Exeter
Automobile Receivables Trust |
|
|
|
2019-2A,
E 144A
4.680%, 5/15/26(5) |
670
|
|
668
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Automobiles—continued
|
|
|
2023-3A,
D
6.680%, 4/16/29 |
$ 530
|
|
$ 524
|
| GLS
Auto Receivables Issuer Trust |
|
|
|
2019-4A,
D 144A
4.090%, 8/17/26(5) |
540
|
|
531
|
2022-2A,
D 144A
6.150%, 4/17/28(5) |
510
|
|
502
|
| LAD
Auto Receivables Trust |
|
|
|
2023-1A,
D 144A
7.300%, 6/17/30(5) |
550
|
|
553
|
2023-2A,
D 144A
6.300%, 2/15/31(5) |
450
|
|
442
|
2023-4A,
C 144A
6.760%, 3/15/29(5) |
412
|
|
414
|
Lendbuzz
Securitization Trust 2023-2A, A2 144A
7.090%, 10/16/28(5) |
436
|
|
436
|
Lobel
Automobile Receivables Trust 2023-1, B 144A
7.050%, 9/15/28(5) |
535
|
|
528
|
OneMain
Direct Auto Receivables Trust 2022-1A, C 144A
5.310%, 6/14/29(5) |
410
|
|
396
|
Tricolor
Auto Securitization Trust 2023-1A, C 144A
7.240%, 2/16/27(5) |
554
|
|
553
|
| |
|
|
9,136
|
| |
|
|
|
| |
| Consumer
Loans—0.1% |
|
|
Republic
Finance Issuance Trust 2020-A, A 144A
2.470%, 11/20/30(5) |
423
|
|
414
|
Upstart
Securitization Trust 2022-2, A 144A
4.370%, 5/20/32(5) |
110
|
|
109
|
| |
|
|
523
|
| |
|
|
|
| |
See
Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Credit
Card—0.4% |
|
|
Avant
Credit Card Master Trust 2021-1A, A 144A
1.370%, 4/15/27(5) |
$ 590
|
|
$ 557
|
Mercury
Financial Credit Card Master Trust 2023-1A, A 144A
8.040%, 9/20/27(5) |
555
|
|
559
|
Mission
Lane Credit Card Master Trust 2023-A, A 144A
7.230%, 7/17/28(5) |
447
|
|
445
|
| |
|
|
1,561
|
| |
|
|
|
| |
| Other—2.7%
|
|
|
Amur
Equipment Finance Receivables IX LLC 2021-1A, C 144A
1.750%, 6/21/27(5) |
710
|
|
677
|
Applebee’s
Funding LLC 2023-1A, A2 144A
7.824%, 3/5/53(5) |
422
|
|
424
|
| Aqua
Finance Trust |
|
|
|
2017-A,
A 144A
3.720%, 11/15/35(5) |
15
|
|
15
|
2019-A,
C 144A
4.010%, 7/16/40(5) |
547
|
|
500
|
2020-AA,
D 144A
7.150%, 7/17/46(5) |
480
|
|
417
|
Arby’s
Funding LLC 2020-1A, A2 144A
3.237%, 7/30/50(5) |
566
|
|
504
|
BHG
Securitization Trust 2023-B, A 144A
6.920%, 12/17/36(5) |
320
|
|
322
|
BXG
Receivables Note Trust 2020-A, B 144A
2.490%, 2/28/36(5) |
247
|
|
226
|
Cajun
Global LLC 2021-1, A2 144A
3.931%, 11/20/51(5) |
335
|
|
292
|
CCG
Receivables Trust 2023-1, A2 144A
5.820%, 9/16/30(5) |
525
|
|
524
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Other—continued
|
|
|
Conn’s
Receivables Funding LLC 2022-A, B 144A
9.520%, 12/15/26(5) |
$ 279
|
|
$ 280
|
| Dext
ABS LLC |
|
|
|
2020-1,
D 144A
7.210%, 2/15/28(5) |
475
|
|
462
|
2023-2,
B 144A
6.410%, 5/15/34(5) |
405
|
|
407
|
Diamond
Resorts Owner Trust 2021-1A, B 144A
2.050%, 11/21/33(5) |
135
|
|
125
|
FAT
Brands Royalty LLC 2021-1A, A2 144A
4.750%, 4/25/51(5) |
587
|
|
546
|
Five
Guys Holdings, Inc. 2023-1A, A2 144A
7.549%, 1/26/54(5) |
405
|
|
408
|
Foundation
Finance Trust 2019-1A, A 144A
3.860%, 11/15/34(5) |
42
|
|
41
|
Hardee’s
Funding LLC 2020-1A, A2 144A
3.981%, 12/20/50(5) |
583
|
|
505
|
HIN
Timeshare Trust 2020-A, C 144A
3.420%, 10/9/39(5) |
78
|
|
72
|
Hotwire
Funding LLC 2021-1, C 144A
4.459%, 11/20/51(5) |
695
|
|
579
|
Jack
in the Box Funding LLC 2022-1A, A2I 144A
3.445%, 2/26/52(5) |
531
|
|
478
|
Jersey
Mike’s Funding 2019-1A, A2 144A
4.433%, 2/15/50(5) |
431
|
|
400
|
Mariner
Finance Issuance Trust 2020-AA, A 144A
2.190%, 8/21/34(5) |
422
|
|
411
|
NBC
Funding LLC 2021-1, A2 144A
2.989%, 7/30/51(5) |
470
|
|
416
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Other—continued
|
|
|
| Octane
Receivables Trust |
|
|
|
2020-1A,
B 144A
1.980%, 6/20/25(5) |
$ 316
|
|
$
315 |
2023-3A,
C 144A
6.740%, 8/20/29(5) |
389
|
|
393
|
Orange
Lake Timeshare Trust 2019-A, B 144A
3.360%, 4/9/38(5) |
80
|
|
77
|
Pawneee
Equipment Receivables LLC 2022-1, B 144A
5.400%, 7/17/28(5) |
500
|
|
481
|
Progress
Residential Trust 2021-SFR6, D 144A
2.225%, 7/17/38(5) |
235
|
|
207
|
Purchasing
Power Funding LLC 2021-A, B 144A
1.920%, 10/15/25(5) |
51
|
|
51
|
Taco
Bell Funding LLC 2016-1A, A23 144A
4.970%, 5/25/46(5) |
352
|
|
342
|
ZAXBY’S
Funding LLC 2021-1A, A2 144A
3.238%, 7/30/51(5) |
691
|
|
582
|
| |
|
|
11,479
|
Total
Asset-Backed Securities
(Identified Cost $23,612) |
|
22,699
|
| |
|
|
|
| |
| Corporate
Bonds and Notes—15.1% |
| Communication
Services—1.0% |
|
|
Altice
France Holding S.A. 144A
6.000%, 2/15/28(5) |
200
|
|
81
|
| Altice
France S.A. |
|
|
|
| 144A
5.125%, 1/15/29(2)(5) |
300
|
|
218
|
| 144A
5.125%, 7/15/29(2)(5) |
175
|
|
125
|
AT&T,
Inc.
5.400%, 2/15/34(2) |
355
|
|
351
|
CCO
Holdings LLC 144A
4.750%, 3/1/30(2)(5) |
375
|
|
328
|
| CSC
Holdings LLC |
|
|
|
| 5.250%,
6/1/24 |
270
|
|
257
|
| 144A
7.500%, 4/1/28(5) |
365
|
|
250
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Communication
Services—continued |
|
|
CT
Trust 144A
5.125%, 2/3/32(5) |
$ 450
|
|
$ 372
|
| DISH
DBS Corp. |
|
|
|
| 5.875%,
11/15/24 |
260
|
|
228
|
| 7.750%,
7/1/26 |
355
|
|
212
|
Gray
Television, Inc. 144A
7.000%, 5/15/27(2)(5) |
350
|
|
318
|
Level
3 Financing, Inc. 144A
3.625%, 1/15/29(5) |
335
|
|
121
|
Millennium
Escrow Corp. 144A
6.625%, 8/1/26(5) |
350
|
|
270
|
Rackspace
Technology Global, Inc. 144A
5.375%, 12/1/28(5) |
490
|
|
147
|
Sprint
Capital Corp.
8.750%, 3/15/32(2) |
295
|
|
352
|
Telecomunicaciones
Digitales S.A. 144A
4.500%, 1/30/30(5) |
600
|
|
494
|
Telesat
Canada 144A
6.500%, 10/15/27(5) |
270
|
|
127
|
| |
|
|
4,251
|
| |
|
|
|
| |
| Consumer
Discretionary—1.2% |
|
|
Ashtead
Capital, Inc. 144A
5.500%, 8/11/32(2)(5) |
260
|
|
248
|
Carnival
Corp. 144A
7.000%, 8/15/29(2)(5) |
55
|
|
56
|
Churchill
Downs, Inc. 144A
6.750%, 5/1/31(2)(5) |
190
|
|
187
|
Clarios
Global LP 144A
6.750%, 5/15/28(2)(5) |
40
|
|
40
|
Ford
Motor Co.
3.250%, 2/12/32(2) |
170
|
|
136
|
Ford
Motor Credit Co. LLC
7.350%, 3/6/30(2) |
330
|
|
343
|
Genuine
Parts Co.
6.875%, 11/1/33(2) |
325
|
|
345
|
Jacobs
Entertainment, Inc. 144A
6.750%, 2/15/29(2)(5) |
323
|
|
289
|
MDC
Holdings, Inc.
3.966%, 8/6/61(2) |
300
|
|
178
|
NCL
Finance Ltd. 144A
6.125%, 3/15/28(5) |
280
|
|
254
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Consumer
Discretionary—continued |
|
|
Newell
Brands, Inc.
6.625%, 9/15/29(2) |
$ 373
|
|
$ 364
|
NMG
Holding Co., Inc. 144A
7.125%, 4/1/26(5) |
355
|
|
333
|
Nordstrom,
Inc.
4.250%, 8/1/31(2) |
380
|
|
300
|
Ontario
Gaming GTA LP 144A
8.000%, 8/1/30(2)(5) |
290
|
|
293
|
PetSmart,
Inc. 144A
7.750%, 2/15/29(2)(5) |
420
|
|
396
|
Premier
Entertainment Sub LLC 144A
5.625%, 9/1/29(5) |
282
|
|
204
|
| PulteGroup,
Inc. |
|
|
|
| 7.875%,
6/15/32(2) |
155
|
|
175
|
| 6.375%,
5/15/33(2) |
155
|
|
160
|
Royal
Caribbean Cruises Ltd. 144A
9.250%, 1/15/29(2)(5) |
18
|
|
19
|
Tapestry,
Inc.
7.850%, 11/27/33 |
460
|
|
467
|
Weekley
Homes LLC 144A
4.875%, 9/15/28(2)(5) |
355
|
|
325
|
| |
|
|
5,112
|
| |
|
|
|
| |
| Consumer
Staples—0.4% |
|
|
BAT
Capital Corp.
7.750%, 10/19/32(2) |
305
|
|
337
|
Central
American Bottling Corp. 144A
5.250%, 4/27/29(5) |
225
|
|
205
|
Coty,
Inc. 144A
6.625%, 7/15/30(2)(5) |
195
|
|
196
|
HLF
Financing S.a.r.l. LLC 144A
4.875%, 6/1/29(5) |
220
|
|
156
|
Minerva
Luxembourg S.A. 144A
8.875%, 9/13/33(5) |
310
|
|
312
|
Pilgrim’s
Pride Corp.
6.250%, 7/1/33(2) |
273
|
|
269
|
Sigma
Holdco B.V. 144A
7.875%, 5/15/26(5) |
200
|
|
172
|
| |
|
|
1,647
|
| |
|
|
|
| |
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—2.7%
|
|
|
Alliance
Resource Operating Partners LP 144A
7.500%, 5/1/25(2)(5) |
$ 295
|
|
$ 294
|
Ascent
Resources Utica Holdings LLC 144A
8.250%, 12/31/28(2)(5) |
410
|
|
410
|
BP
Capital Markets plc
4.875% (2)(7) |
465
|
|
418
|
CITGO
Petroleum Corp. 144A
7.000%, 6/15/25(5) |
240
|
|
237
|
Civitas
Resources, Inc. 144A
8.750%, 7/1/31(2)(5) |
225
|
|
233
|
| Columbia
Pipelines Operating Co. LLC |
|
|
|
| 144A
6.036%, 11/15/33(2)(5) |
325
|
|
328
|
| 144A
6.714%, 8/15/63(2)(5) |
50
|
|
52
|
Coronado
Finance Pty Ltd. 144A
10.750%, 5/15/26(2)(5) |
526
|
|
548
|
| CrownRock
LP |
|
|
|
| 144A
5.625%, 10/15/25(2)(5) |
85
|
|
84
|
| 144A
5.000%, 5/1/29(2)(5) |
170
|
|
163
|
DT
Midstream, Inc. 144A
4.125%, 6/15/29(2)(5) |
295
|
|
265
|
| Ecopetrol
S.A. |
|
|
|
| 4.625%,
11/2/31 |
260
|
|
207
|
| 8.875%,
1/13/33 |
330
|
|
339
|
Enbridge,
Inc.
7.625%, 1/15/83(2) |
435
|
|
411
|
Enerflex
Ltd. 144A
9.000%, 10/15/27(2)(5) |
263
|
|
248
|
Energy
Transfer LP Series H
6.500% (2)(7) |
350
|
|
328
|
Flex
Intermediate Holdco LLC 144A
3.363%, 6/30/31(2)(5) |
515
|
|
403
|
Genesis
Energy LP
8.875%, 4/15/30(2) |
370
|
|
376
|
Greensaif
Pipelines Bidco S.a.r.l. 144A
6.129%, 2/23/38(5) |
250
|
|
250
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—continued
|
|
|
Helix
Energy Solutions Group, Inc. 144A
9.750%, 3/1/29(5) |
$ 275
|
|
$ 274
|
Hilcorp
Energy I LP 144A
5.750%, 2/1/29(2)(5) |
305
|
|
287
|
International
Petroleum Corp. 144A, RegS
7.250%, 2/1/27(4)(5) |
380
|
|
353
|
KazMunayGas
National Co. JSC 144A
6.375%, 10/24/48(5) |
365
|
|
310
|
Kinder
Morgan Energy Partners LP
7.500%, 11/15/40 |
315
|
|
341
|
Magnolia
Oil & Gas Operating LLC 144A
6.000%, 8/1/26(2)(5) |
380
|
|
369
|
Mesquite
Energy, Inc. 144A
7.250%, 2/15/24(5) |
105
|
|
8
|
Nabors
Industries Ltd. 144A
7.250%, 1/15/26(5) |
285
|
|
272
|
Northriver
Midstream Finance LP 144A
5.625%, 2/15/26(2)(5) |
185
|
|
180
|
Occidental
Petroleum Corp.
6.125%, 1/1/31(2) |
420
|
|
424
|
Odebrecht
Oil & Gas Finance Ltd. 144A
0.000% (5)(7)(8)(9) |
26
|
|
—
(10) |
Pertamina
Persero PT 144A
2.300%, 2/9/31(5) |
480
|
|
390
|
Petroleos
de Venezuela S.A. 144A
6.000%, 5/16/24(3)(5) |
665
|
|
80
|
| Petroleos
Mexicanos |
|
|
|
| 6.500%,
3/13/27 |
450
|
|
404
|
| 6.700%,
2/16/32 |
375
|
|
291
|
| 7.690%,
1/23/50 |
505
|
|
334
|
Petronas
Capital Ltd. 144A
3.500%, 4/21/30(5) |
235
|
|
213
|
Reliance
Industries Ltd. 144A
2.875%, 1/12/32(5) |
320
|
|
262
|
State
Oil Co. of the Azerbaijan Republic RegS
6.950%, 3/18/30(4) |
280
|
|
283
|
Teine
Energy Ltd. 144A
6.875%, 4/15/29(2)(5) |
330
|
|
312
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Energy—continued
|
|
|
| Transocean,
Inc. |
|
|
|
| 144A
11.500%, 1/30/27(5) |
$ 45
|
|
$ 47
|
| 144A
8.750%, 2/15/30(2)(5) |
271
|
|
277
|
| Venture
Global Calcasieu Pass LLC |
|
|
|
| 144A
3.875%, 8/15/29(2)(5) |
40
|
|
35
|
| 144A
4.125%, 8/15/31(2)(5) |
340
|
|
293
|
Viper
Energy, Inc. 144A
7.375%, 11/1/31(2)(5) |
45
|
|
46
|
| |
|
|
11,679
|
| |
|
|
|
| |
| Financials—4.3%
|
|
|
Acrisure
LLC 144A
7.000%, 11/15/25(5) |
425
|
|
420
|
Allianz
SE 144A
6.350%, 9/6/53(2)(5) |
200
|
|
200
|
Allstate
Corp. (The) Series B (3 month Term SOFR + 3.200%)
8.579%, 8/15/53(2)(6) |
340
|
|
335
|
American
Express Co.
5.625%, 7/28/34(2) |
360
|
|
356
|
Ascot
Group Ltd. 144A
4.250%, 12/15/30(2)(5) |
580
|
|
446
|
Banco
Mercantil del Norte S.A. 144A
6.625% (5)(7) |
620
|
|
512
|
Banco
Santander Chile 144A
3.177%, 10/26/31(5) |
555
|
|
461
|
| Bank
of America Corp. |
|
|
|
| 5.015%,
7/22/33 |
365
|
|
347
|
| 2.482%,
9/21/36 |
470
|
|
355
|
Bank
of New York Mellon Corp. (The) Series G
4.700% (2)(7) |
530
|
|
517
|
Barclays
plc
7.437%, 11/2/33(2) |
445
|
|
474
|
BBVA
Bancomer S.A. 144A
5.125%, 1/18/33(5) |
485
|
|
433
|
Blackstone
Private Credit Fund
2.625%, 12/15/26(2) |
317
|
|
279
|
Blue
Owl Credit Income Corp.
4.700%, 2/8/27(2) |
319
|
|
294
|
Blue
Owl Finance LLC 144A
3.125%, 6/10/31(2)(5) |
415
|
|
322
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
BPCE
S.A. 144A
7.003%, 10/19/34(5) |
$ 250
|
|
$ 258
|
BroadStreet
Partners, Inc. 144A
5.875%, 4/15/29(5) |
270
|
|
245
|
Brookfield
Finance, Inc.
6.350%, 1/5/34 |
245
|
|
247
|
Capital
One Financial Corp.
2.359%, 7/29/32(2) |
255
|
|
181
|
Charles
Schwab Corp. (The) Series H
4.000% (7) |
445
|
|
336
|
Citadel
LP 144A
4.875%, 1/15/27(2)(5) |
295
|
|
285
|
| Citigroup,
Inc. |
|
|
|
| 6.270%,
11/17/33 |
240
|
|
248
|
| 6.174%,
5/25/34(2) |
329
|
|
326
|
Citizens
Bank N.A.
2.250%, 4/28/25(2) |
315
|
|
297
|
Cobra
AcquisitionCo. LLC 144A
6.375%, 11/1/29(5) |
333
|
|
243
|
Corebridge
Financial, Inc.
6.875%, 12/15/52(2) |
326
|
|
313
|
Discover
Bank
4.650%, 9/13/28(2) |
250
|
|
228
|
Drawbridge
Special Opportunities Fund LP 144A
3.875%, 2/15/26(2)(5) |
720
|
|
650
|
Export-Import
Bank Korea
5.125%, 1/11/33 |
365
|
|
366
|
Fifth
Third Bancorp
4.337%, 4/25/33(2) |
300
|
|
263
|
First
American Financial Corp.
4.000%, 5/15/30(2) |
300
|
|
260
|
Global
Atlantic Fin Co. 144A
7.950%, 6/15/33(2)(5) |
169
|
|
182
|
Global
Payments, Inc.
2.900%, 5/15/30(2) |
400
|
|
341
|
| Goldman
Sachs Group, Inc. (The) |
|
|
|
| 3.102%,
2/24/33(2) |
320
|
|
264
|
| 6.450%,
5/1/36(2) |
255
|
|
263
|
Huntington
Bancshares, Inc.
2.550%, 2/4/30(2) |
340
|
|
280
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
JPMorgan
Chase & Co.
1.953%, 2/4/32(2) |
$ 570
|
|
$ 448
|
Ladder
Capital Finance Holdings LLLP 144A
4.250%, 2/1/27(2)(5) |
210
|
|
194
|
Liberty
Mutual Group, Inc. 144A
4.125%, 12/15/51(2)(5) |
320
|
|
261
|
Lincoln
National Corp. (3 month LIBOR + 2.040%)
7.717%, 4/20/67(2)(6) |
515
|
|
314
|
MetLife,
Inc. Series G
3.850% (2)(7) |
340
|
|
320
|
Midcap
Financial Issuer Trust 144A
6.500%, 5/1/28(2)(5) |
475
|
|
413
|
| Morgan
Stanley |
|
|
|
| 6.342%,
10/18/33(2) |
480
|
|
497
|
| 5.948%,
1/19/38(2) |
253
|
|
245
|
MSCI,
Inc. 144A
3.625%, 9/1/30(2)(5) |
256
|
|
223
|
National
Rural Utilities Cooperative Finance Corp. (3 month Term SOFR + 3.172%)
8.562%, 4/30/43(2)(6) |
270
|
|
266
|
Nationstar
Mortgage Holdings, Inc. 144A
5.750%, 11/15/31(2)(5) |
195
|
|
170
|
NCR
Atleos Corp. 144A
9.500%, 4/1/29(2)(5) |
214
|
|
221
|
Nippon
Life Insurance Co. 144A
6.250%, 9/13/53(2)(5) |
200
|
|
202
|
Northern
Trust Corp.
6.125%, 11/2/32 |
235
|
|
242
|
| Prudential
Financial, Inc. |
|
|
|
| 5.125%,
3/1/52(2) |
148
|
|
131
|
| 6.750%,
3/1/53(2) |
200
|
|
199
|
State
Street Corp.
4.821%, 1/26/34(2) |
293
|
|
275
|
| Synchrony
Financial |
|
|
|
| 4.875%,
6/13/25(2) |
80
|
|
77
|
| 3.700%,
8/4/26(2) |
117
|
|
107
|
Texas
Capital Bancshares, Inc.
4.000%, 5/6/31(2) |
495
|
|
424
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Toronto-Dominion
Bank (The)
8.125%, 10/31/82 |
$ 275
|
|
$ 277
|
| UBS
Group AG |
|
|
|
| 144A
9.250%(2)(5)(7) |
35
|
|
37
|
| 144A
4.988%, 8/5/33(5) |
375
|
|
345
|
| Wells
Fargo & Co. |
|
|
|
| 5.389%,
4/24/34(2) |
270
|
|
260
|
Series
BB
3.900%(2)(7) |
470
|
|
424
|
| |
|
|
18,399
|
| |
|
|
|
| |
| Health
Care—1.3% |
|
|
Akumin,
Inc. 144A
7.000%, 11/1/25(5)(11) |
400
|
|
321
|
| Bausch
Health Cos., Inc. |
|
|
|
| 144A
6.125%, 2/1/27(5) |
35
|
|
19
|
| 144A
11.000%, 9/30/28(5) |
86
|
|
54
|
| 144A
14.000%, 10/15/30(5) |
16
|
|
8
|
Catalent
Pharma Solutions, Inc. 144A
3.500%, 4/1/30(2)(5) |
395
|
|
330
|
Cheplapharm
Arzneimittel GmbH 144A
5.500%, 1/15/28(2)(5) |
418
|
|
388
|
| Community
Health Systems, Inc. |
|
|
|
| 144A
6.875%, 4/15/29(5) |
35
|
|
21
|
| 144A
6.125%, 4/1/30(5) |
405
|
|
226
|
| 144A
4.750%, 2/15/31(2)(5) |
285
|
|
209
|
DENTSPLY
SIRONA, Inc.
3.250%, 6/1/30 |
520
|
|
446
|
Endo
Dac 144A
9.500%, 7/31/27(3)(5) |
94
|
|
7
|
HCA,
Inc.
5.500%, 6/1/33(2) |
340
|
|
334
|
| IQVIA,
Inc. |
|
|
|
| 144A
5.700%, 5/15/28(2)(5) |
200
|
|
199
|
| 144A
6.250%, 2/1/29(5) |
145
|
|
147
|
Lannett
Co., Inc. 144A
7.750%, 4/15/26(5)(8) |
135
|
|
7
|
LifePoint
Health, Inc. 144A
9.875%, 8/15/30(2)(5) |
525
|
|
511
|
Medline
Borrower LP 144A
5.250%, 10/1/29(5) |
205
|
|
186
|
Par
Pharmaceutical, Inc. 144A
7.500%, 4/1/27(5)(11) |
187
|
|
118
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Health
Care—continued |
|
|
| Surgery
Center Holdings, Inc. |
|
|
|
| 144A
6.750%, 7/1/25(5) |
$ 211
|
|
$ 209
|
| 144A
10.000%, 4/15/27(5) |
85
|
|
86
|
Team
Health Holdings, Inc. 144A
6.375%, 2/1/25(5) |
395
|
|
330
|
Teva
Pharmaceutical Finance Netherlands III B.V.
4.750%, 5/9/27 |
230
|
|
215
|
Universal
Health Services, Inc.
2.650%, 1/15/32(2) |
460
|
|
362
|
| Viatris,
Inc. |
|
|
|
| 2.700%,
6/22/30(2) |
325
|
|
264
|
| 4.000%,
6/22/50(2) |
135
|
|
88
|
Zimmer
Biomet Holdings, Inc.
3.550%, 3/20/30(2) |
500
|
|
439
|
| |
|
|
5,524
|
| |
|
|
|
| |
| Industrials—1.2%
|
|
|
Alaska
Airlines Pass-Through Trust 2020-1, A 144A
4.800%, 2/15/29(2)(5) |
493
|
|
470
|
Aviation
Capital Group LLC 144A
3.500%, 11/1/27(2)(5) |
275
|
|
247
|
Avolon
Holdings Funding Ltd. 144A
4.375%, 5/1/26(2)(5) |
265
|
|
252
|
| Boeing
Co. (The) |
|
|
|
| 3.750%,
2/1/50(2) |
205
|
|
149
|
| 5.930%,
5/1/60(2) |
147
|
|
143
|
Chart
Industries, Inc. 144A
9.500%, 1/1/31(2)(5) |
255
|
|
272
|
Concentrix
Corp.
6.650%, 8/2/26(2) |
260
|
|
262
|
CoStar
Group, Inc. 144A
2.800%, 7/15/30(2)(5) |
448
|
|
368
|
GFL
Environmental, Inc. 144A
6.750%, 1/15/31(5) |
20
|
|
20
|
Global
Infrastructure Solutions, Inc. 144A
7.500%, 4/15/32(2)(5) |
360
|
|
314
|
Hertz
Corp. (The) 144A
5.000%, 12/1/29(5) |
320
|
|
246
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Industrials—continued
|
|
|
| Icahn
Enterprises LP |
|
|
|
| 6.250%,
5/15/26(2) |
$ 245
|
|
$ 231
|
| 5.250%,
5/15/27(2) |
40
|
|
36
|
LBM
Acquisition LLC 144A
6.250%, 1/15/29(5) |
195
|
|
163
|
Neptune
Bidco U.S., Inc. 144A
9.290%, 4/15/29(2)(5) |
165
|
|
153
|
Regal
Rexnord Corp. 144A
6.400%, 4/15/33(2)(5) |
554
|
|
546
|
Sempra
Global 144A
3.250%, 1/15/32(2)(5) |
534
|
|
423
|
TransDigm,
Inc.
5.500%, 11/15/27(2) |
220
|
|
212
|
United
Airlines Pass-Through Trust 2023-1, A
5.800%, 7/15/37(2) |
296
|
|
284
|
Veralto
Corp. 144A
5.450%, 9/18/33(5) |
245
|
|
244
|
VistaJet
Malta Finance plc 144A
9.500%, 6/1/28(2)(5) |
420
|
|
348
|
| |
|
|
5,383
|
| |
|
|
|
| |
| Information
Technology—0.5% |
|
|
| Booz
Allen Hamilton, Inc. |
|
|
|
| 144A
3.875%, 9/1/28(2)(5) |
245
|
|
225
|
| 144A
4.000%, 7/1/29(2)(5) |
275
|
|
251
|
CommScope
Technologies LLC 144A
6.000%, 6/15/25(5) |
270
|
|
212
|
| Consensus
Cloud Solutions, Inc. |
|
|
|
| 144A
6.000%, 10/15/26(2)(5) |
75
|
|
71
|
| 144A
6.500%, 10/15/28(2)(5) |
115
|
|
104
|
Dell
International LLC
8.100%, 7/15/36(2) |
204
|
|
240
|
GTCR
W-2 Merger Sub LLC 144A
7.500%, 1/15/31(2)(5) |
236
|
|
240
|
Kyndryl
Holdings, Inc.
3.150%, 10/15/31(2) |
255
|
|
203
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Information
Technology—continued |
|
|
Leidos,
Inc.
2.300%, 2/15/31(2) |
$ 310
|
|
$ 248
|
Viasat,
Inc. 144A
5.625%, 9/15/25(5) |
445
|
|
425
|
| |
|
|
2,219
|
| |
|
|
|
| |
| Materials—1.0%
|
|
|
ArcelorMittal
S.A.
6.800%, 11/29/32(2) |
170
|
|
175
|
ASP
Unifrax Holdings, Inc. 144A
5.250%, 9/30/28(5) |
565
|
|
388
|
Bayport
Polymers LLC 144A
5.140%, 4/14/32(2)(5) |
470
|
|
427
|
Cleveland-Cliffs,
Inc. 144A
6.750%, 3/15/26(2)(5) |
180
|
|
180
|
Corp.
Nacional del Cobre de Chile 144A
5.950%, 1/8/34(5) |
200
|
|
196
|
FMG
Resources August 2006 Pty Ltd. 144A
5.875%, 4/15/30(2)(5) |
275
|
|
264
|
Illuminate
Buyer LLC 144A
9.000%, 7/1/28(5) |
234
|
|
220
|
INEOS
Quattro Finance 2 plc 144A
9.625%, 3/15/29(5) |
200
|
|
207
|
LSB
Industries, Inc. 144A
6.250%, 10/15/28(2)(5) |
375
|
|
350
|
Mauser
Packaging Solutions Holding Co. 144A
7.875%, 8/15/26(2)(5) |
245
|
|
243
|
New
Enterprise Stone & Lime Co., Inc. 144A
9.750%, 7/15/28(5) |
450
|
|
449
|
Taseko
Mines Ltd. 144A
7.000%, 2/15/26(2)(5) |
345
|
|
323
|
Teck
Resources Ltd.
6.125%, 10/1/35(2) |
250
|
|
249
|
Trivium
Packaging Finance B.V. 144A
8.500%, 8/15/27(5) |
382
|
|
347
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Materials—continued
|
|
|
WR
Grace Holdings LLC 144A
5.625%, 8/15/29(5) |
$ 124
|
|
$ 104
|
| |
|
|
4,122
|
| |
|
|
|
| |
| Real
Estate—0.6% |
|
|
Ashton
Woods USA LLC 144A
4.625%, 4/1/30(2)(5) |
500
|
|
417
|
EPR
Properties
4.750%, 12/15/26(2) |
455
|
|
428
|
| GLP
Capital LP |
|
|
|
| 3.250%,
1/15/32(2) |
47
|
|
38
|
| 6.750%,
12/1/33 |
320
|
|
323
|
| MPT
Operating Partnership LP |
|
|
|
| 4.625%,
8/1/29(2) |
140
|
|
100
|
| 3.500%,
3/15/31(2) |
270
|
|
166
|
Office
Properties Income Trust
4.500%, 2/1/25(2) |
490
|
|
437
|
| VICI
Properties LP |
|
|
|
| 4.950%,
2/15/30(2) |
135
|
|
126
|
| 5.125%,
5/15/32(2) |
135
|
|
124
|
| 144A
4.625%, 6/15/25(2)(5) |
65
|
|
63
|
| 144A
5.750%, 2/1/27(2)(5) |
190
|
|
187
|
| |
|
|
2,409
|
| |
|
|
|
| |
| Utilities—0.9%
|
|
|
CMS
Energy Corp.
4.750%, 6/1/50 |
570
|
|
492
|
| Electricite
de France S.A. |
|
|
|
| 144A
6.250%, 5/23/33(2)(5) |
200
|
|
207
|
| 144A
6.900%, 5/23/53(2)(5) |
200
|
|
206
|
Enel
Finance International N.V. 144A
7.500%, 10/14/32(5) |
260
|
|
285
|
Eskom
Holdings SOC Ltd. 144A
7.125%, 2/11/25(5) |
325
|
|
323
|
| Ferrellgas
LP |
|
|
|
| 144A
5.375%, 4/1/26(2)(5) |
125
|
|
120
|
| 144A
5.875%, 4/1/29(2)(5) |
130
|
|
120
|
KeySpan
Gas East Corp. 144A
5.994%, 3/6/33(5) |
340
|
|
334
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Utilities—continued
|
|
|
NRG
Energy, Inc. 144A
7.000%, 3/15/33(2)(5) |
$ 370
|
|
$
374 |
Perusahaan
Perseroan Persero PT Perusahaan Listrik Negara 144A
4.125%, 5/15/27(5) |
485
|
|
465
|
Southern
Co. (The) Series 21-A
3.750%, 9/15/51(2) |
523
|
|
458
|
Sunnova
Energy Corp. 144A
5.875%, 9/1/26(2)(5) |
400
|
|
324
|
Vistra
Corp. 144A
8.000% (2)(5)(7) |
190
|
|
186
|
| |
|
|
3,894
|
Total
Corporate Bonds and Notes
(Identified Cost $70,855) |
|
64,639
|
| |
|
|
|
| |
| Leveraged
Loans—5.0% |
| Aerospace—0.4%
|
|
|
Amentum
Government Services Holdings LLC (1 month Term SOFR + 4.000%)
9.331%, 2/15/29(6) |
163
|
|
162
|
Brown
Group Holding LLC (1 month Term SOFR + 2.850%)
8.198%, 6/7/28(6) |
205
|
|
203
|
| Dynasty
Acquisition Co., Inc. |
|
|
|
2023,
Tranche B-1 (1 month Term SOFR + 4.000%)
9.348%, 8/24/28(6) |
157
|
|
157
|
2023,
Tranche B-2 (1 month Term SOFR + 4.000%)
9.348%, 8/24/28(6) |
67
|
|
67
|
Kestrel
Bidco, Inc. (1 month Term SOFR + 3.100%)
8.443%, 12/11/26(6) |
184
|
|
180
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Aerospace—continued
|
|
|
Mileage
Plus Holdings LLC (3 month Term SOFR + 5.400%)
10.798%, 6/21/27(6) |
$ 225
|
|
$ 232
|
Peraton
Corp. Tranche B, First Lien (1 month Term SOFR + 3.850%)
9.198%, 2/1/28(6) |
356
|
|
353
|
Transdigm,
Inc. Tranche J (1 month Term SOFR + 3.250%)
0.000%, 2/14/31(6)(12) |
30
|
|
30
|
TransDigm,
Inc. Tranche I (3 month Term SOFR + 3.250%)
8.640%, 8/24/28(6) |
136
|
|
136
|
| |
|
|
1,520
|
| |
|
|
|
| |
| Chemicals—0.2%
|
|
|
Ineos
Finance plc 2027 (1 month Term SOFR + 3.850%)
9.198%, 11/8/27(6) |
207
|
|
206
|
LSF11
A5 Holdco LLC (1 month Term SOFR + 4.350%)
9.698%, 10/15/28(6) |
174
|
|
173
|
Nouryon
Finance B.V. (3 month Term SOFR + 4.100%)
9.467%, 4/3/28(6) |
165
|
|
164
|
Windsor
Holdings III LLC Tranche B (1 month Term SOFR + 4.500%)
9.820%, 8/1/30(6) |
150
|
|
150
|
| |
|
|
693
|
| |
|
|
|
| |
| Consumer
Non-Durables—0.1% |
|
|
DS
Parent, Inc. Tranche B (6 month Term SOFR + 6.000%)
11.337%, 12/8/28(6) |
210
|
|
209
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Consumer
Non-Durables—continued |
|
|
Kronos
Acquisition Holdings, Inc. Tranche B-1 (3 month Term SOFR + 4.012%)
9.402%, 12/22/26(6) |
$ 363
|
|
$ 360
|
| |
|
|
569
|
| |
|
|
|
| |
| Energy—0.3%
|
|
|
GIP
Pilot Acquisition Partners LP (3 month Term SOFR + 3.000%)
8.388%, 10/4/30(6) |
50
|
|
50
|
Hamilton
Projects Acquiror LLC (1 month Term SOFR + 4.614%)
9.963%, 6/17/27(6) |
253
|
|
253
|
Medallion
Midland Acquisition LLC (3 month Term SOFR + 4.012%)
9.402%, 10/18/28(6) |
179
|
|
179
|
Oryx
Midstream Services Permian Basin LLC 2023 (1 month Term SOFR + 3.364%)
8.694 - 8.710%, 10/5/28(6) |
196
|
|
196
|
Traverse
Midstream Partners LLC 2023, Tranche B (3 month Term SOFR + 3.850%)
9.240%, 2/16/28(6) |
379
|
|
379
|
| |
|
|
1,057
|
| |
|
|
|
| |
| Financials—0.2%
|
|
|
Acrisure
LLC 2023 (3 month Term SOFR + 4.500%)
9.888%, 10/18/30(6) |
115
|
|
114
|
| AssuredPartners,
Inc. |
|
|
|
2020
(1 month Term SOFR + 3.614%)
0.000%, 2/12/27(6)(12) |
155
|
|
155
|
2023
(1 month Term SOFR + 3.750%)
9.098%, 2/12/27(6) |
25
|
|
25
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Financials—continued
|
|
|
Asurion
LLC Tranche B-9 (1 month Term SOFR + 3.364%)
8.713%, 7/31/27(6) |
$ 213
|
|
$ 208
|
Blackhawk
Network Holdings, Inc. First Lien (3 month Term SOFR + 2.750%)
8.138%, 6/15/25(6) |
210
|
|
209
|
Castlelake
Aviation One Designated Activity Co. 2023 (3 month Term SOFR + 3.012%)
8.421%, 10/22/27(6) |
253
|
|
253
|
| |
|
|
964
|
| |
|
|
|
| |
| Food
/ Tobacco—0.3% |
|
|
Del
Monte Foods, Inc. (1 month Term SOFR + 4.350% - 3 month PRIME + 3.250%)
9.698% - 11.750%, 5/16/29(6) |
273
|
|
269
|
Froneri
U.S., Inc. Tranche B-2 (1 month Term SOFR + 2.350%)
7.698%, 1/29/27(6) |
358
|
|
358
|
Naked
Juice LLC (3 month Term SOFR + 3.350%)
8.740%, 1/24/29(6) |
288
|
|
269
|
Pegasus
Bidco B.V. Tranche B-2 (3 month Term SOFR + 4.250%)
9.630%, 7/12/29(6) |
189
|
|
188
|
Shearer’s
Foods LLC First Lien (1 month Term SOFR + 3.614%)
8.963%, 9/23/27(6) |
188
|
|
188
|
Triton
Water Holdings, Inc. First Lien (3 month Term SOFR + 3.512%)
8.902%, 3/31/28(6) |
179
|
|
176
|
| |
|
|
1,448
|
| |
|
|
|
| |
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Forest
Prod / Containers—0.1% |
|
|
Klockner
Pentaplast of America, Inc. Tranche B (6 month Term SOFR + 4.975%)
10.476%, 2/12/26(6) |
$ 194
|
|
$ 178
|
Mauser
Packaging Solutions Holding Co. (1 month Term SOFR + 4.000%)
9.320%, 8/14/26(6) |
144
|
|
143
|
TricorBraun,
Inc. (1 month Term SOFR + 3.364%)
8.713%, 3/3/28(6) |
180
|
|
176
|
| |
|
|
497
|
| |
|
|
|
| |
| Gaming
/ Leisure—0.4% |
|
|
Caesars
Entertainment, Inc. Tranche B (1 month Term SOFR + 3.350%)
8.698%, 2/6/30(6) |
124
|
|
124
|
Carnival
Corp. (1 month Term SOFR + 3.000%)
8.321%, 8/9/27(6) |
170
|
|
168
|
ECL
Entertainment LLC Tranche B (3 month Term SOFR + 4.750%)
10.140%, 9/3/30(6) |
185
|
|
184
|
J&J
Ventures Gaming LLC (3 month Term SOFR + 4.262%)
9.652%, 4/26/28(6) |
220
|
|
215
|
Ontario
Gaming GTA Ltd. Partnership Tranche B (3 month Term SOFR + 4.250%)
9.640%, 8/1/30(6) |
75
|
|
75
|
Playa
Hotels & Resorts B.V. (1 month Term SOFR + 4.250%)
9.580%, 1/5/29(6) |
194
|
|
195
|
Raptor
Acquisition Corp. Tranche B (3 month Term SOFR + 4.262%)
9.658%, 11/1/26(6) |
114
|
|
114
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Gaming
/ Leisure—continued |
|
|
Scientific
Games Holdings LP (3 month Term SOFR + 3.500%)
8.914%, 4/4/29(6) |
$ 264
|
|
$ 262
|
UFC
Holdings LLC Tranche B-3 (3 month Term SOFR + 3.012%)
8.399%, 4/29/26(6) |
390
|
|
391
|
| |
|
|
1,728
|
| |
|
|
|
| |
| Health
Care—0.7% |
|
|
Amneal
Pharmaceuticals LLC (1 month Term SOFR + 5.500%)
10.822%, 5/4/28(6) |
165
|
|
157
|
Bausch
& Lomb Corp. (1 month Term SOFR + 4.000%)
9.348%, 9/14/28(6) |
120
|
|
117
|
CHG
Healthcare Services, Inc. First Lien (1 month Term SOFR + 3.364%)
8.713%, 9/29/28(6) |
155
|
|
154
|
Financiere
Mendel Tranche B (3 month Term SOFR + 4.250%)
9.616%, 11/12/30(6) |
65
|
|
65
|
Gainwell
Acquisition Corp. Tranche B (3 month Term SOFR + 4.100%)
9.490%, 10/1/27(6) |
182
|
|
176
|
Hunter
Holdco 3 Ltd. First Lien (3 month Term SOFR + 4.350%)
9.740%, 8/19/28(6) |
190
|
|
187
|
IVC
Acquisition Ltd. (1 month Term SOFR + 5.500%)
0.000%, 11/17/28(6)(12) |
110
|
|
109
|
Packaging
Coordinators Midco, Inc. Tranche B, First Lien (3 month Term SOFR + 3.762%)
9.152%, 11/30/27(6) |
209
|
|
208
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Health
Care—continued |
|
|
Phoenix
Guarantor, Inc. Tranche B-1 (1 month Term SOFR + 3.364%)
8.713%, 3/5/26(6) |
$ 384
|
|
$ 383
|
Phoenix
Newco, Inc. First Lien (1 month Term SOFR + 3.364%)
8.713%, 11/15/28(6) |
128
|
|
128
|
Sotera
Health Holdings LLC (1 month Term SOFR + 3.750%)
9.091%, 12/11/26(6) |
110
|
|
110
|
Star
Parent, Inc. Tranche B (1 month Term SOFR + 4.000%)
9.386%, 9/28/30(6) |
370
|
|
361
|
Sunshine
Luxembourg VII S.a.r.l. Tranche B-3 (3 month Term SOFR + 3.850%)
9.240%, 10/1/26(6) |
260
|
|
261
|
Upstream
Newco, Inc. 2021 (1-3 month Term SOFR + 4.512%)
9.713% - 9.895%, 11/20/26(6) |
228
|
|
212
|
Viant
Medical Holdings, Inc. First Lien (1 month Term SOFR + 3.864%)
9.213%, 7/2/25(6) |
306
|
|
301
|
| |
|
|
2,929
|
| |
|
|
|
| |
| Housing—0.1%
|
|
|
| SRS
Distribution, Inc. |
|
|
|
2021
(1 month Term SOFR + 3.614%)
8.963%, 6/2/28(6) |
166
|
|
164
|
2022
(1 month Term SOFR + 3.600%)
8.948%, 6/2/28(6) |
34
|
|
34
|
| |
|
|
198
|
| |
|
|
|
| |
See
Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Information
Technology—0.7% |
|
|
| Applied
Systems, Inc. |
|
|
|
2026
(3 month Term SOFR + 4.500%)
9.890%, 9/18/26(6) |
$ 169
|
|
$ 170
|
Second
Lien (3 month Term SOFR + 6.750%)
12.140%, 9/17/27(6) |
208
|
|
209
|
Central
Parent LLC Tranche B (3 month Term SOFR + 4.000%)
9.406%, 7/6/29(6) |
378
|
|
378
|
ConnectWise
LLC (1 month Term SOFR + 3.614%)
8.963%, 9/29/28(6) |
107
|
|
104
|
| Epicor
Software Corp. |
|
|
|
Tranche
C (1 month Term SOFR + 3.364%)
8.713%, 7/30/27(6) |
192
|
|
193
|
Tranche
D, First Lien (1 month Term SOFR + 3.750%)
9.098%, 7/30/27(6) |
15
|
|
15
|
GTCR
W Merger Sub LLC Tranche B (1 month Term SOFR + 3.000%)
0.000%, 9/20/30(6)(12) |
100
|
|
100
|
Indicor
LLC (3 month Term SOFR + 4.500%)
9.890%, 11/22/29(6) |
244
|
|
244
|
Mosel
Bidco SE Tranche B (3 month Term SOFR + 4.750%)
10.136%, 9/16/30(6) |
113
|
|
113
|
NCR
Atleos LLC Tranche B (1 month Term SOFR + 4.850%)
10.198%, 3/27/29(6) |
360
|
|
351
|
Polaris
Newco LLC First Lien (1 month Term SOFR + 4.114%)
9.463%, 6/2/28(6) |
195
|
|
189
|
Project
Ruby Ultimate Parent Corp. First Lien (1 month Term SOFR + 3.364%)
8.713%, 3/10/28(6) |
252
|
|
250
|
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Information
Technology—continued |
|
|
Proofpoint,
Inc. (1 month Term SOFR + 3.364%)
8.713%, 8/31/28(6) |
$ 107
|
|
$ 106
|
RealPage,
Inc. First Lien (1 month Term SOFR + 3.114%)
8.463%, 4/24/28(6) |
179
|
|
175
|
Sophia
LP Tranche B (1 month Term SOFR + 3.600%)
8.948%, 10/7/27(6) |
246
|
|
246
|
| UKG,
Inc. |
|
|
|
2021,
Second Lien (3 month Term SOFR + 5.350%)
10.764%, 5/3/27(6) |
20
|
|
20
|
2021-2,
First Lien (3 month Term SOFR + 3.350%)
8.764%, 5/4/26(6) |
210
|
|
209
|
| |
|
|
3,072
|
| |
|
|
|
| |
| Manufacturing—0.3%
|
|
|
Alliance
Laundry Systems LLC Tranche B (3 month Term SOFR + 3.600%)
8.994%, 10/8/27(6) |
173
|
|
172
|
| Arcline
FM Holdings LLC |
|
|
|
First
Lien (3 month Term SOFR + 5.012%)
10.402%, 6/23/28(6) |
166
|
|
163
|
Second
Lien (3 month Term SOFR + 8.250%)
13.902%, 6/25/29(6) |
95
|
|
89
|
Chart
Industries, Inc. Tranche B (1 month Term SOFR + 3.350%)
8.670%, 3/15/30(6) |
174
|
|
174
|
CPM
Holdings, Inc. (1 month Term SOFR + 4.500%)
9.827%, 9/28/28(6) |
200
|
|
200
|
Madison
IAQ LLC (1 month Term SOFR + 3.364%)
0.000%, 6/21/28(6)(12) |
170
|
|
168
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Manufacturing—continued
|
|
|
Safe
Fleet Holdings LLC 2022 (1 month Term SOFR + 3.850%)
9.191%, 2/23/29(6) |
$ 243
|
|
$ 243
|
Star
U.S. Bidco LLC (1 month Term SOFR + 4.350%)
9.698%, 3/17/27(6) |
210
|
|
210
|
| |
|
|
1,419
|
| |
|
|
|
| |
| Media
/ Telecom - Broadcasting—0.1% |
|
|
Terrier
Media Buyer, Inc. 2021, Tranche B (3 month Term SOFR + 3.600%)
8.990%, 12/17/26(6) |
185
|
|
169
|
Univision
Communications, Inc. 2021 (1 month Term SOFR + 3.364%)
8.713%, 3/15/26(6) |
353
|
|
353
|
| |
|
|
522
|
| |
|
|
|
| |
Media
/ Telecom - Cable/Wireless
Video—0.1% |
|
|
DIRECTV
Financing LLC (1-3 month Term SOFR + 5.262%)
10.463 - 10.650%, 8/2/27(6) |
319
|
|
313
|
Eagle
Broadband Investments LLC (3 month Term SOFR + 3.262%)
8.652%, 11/12/27(6) |
174
|
|
169
|
| |
|
|
482
|
| |
|
|
|
| |
Media
/ Telecom - Diversified
Media—0.1% |
|
|
Century
DE Buyer LLC (3 month Term SOFR + 4.000%)
9.390%, 10/30/30(6) |
125
|
|
125
|
McGraw-Hill
Education, Inc. (1 month Term SOFR + 4.864%)
10.213%, 7/28/28(6) |
216
|
|
212
|
| |
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(6) |
$ 219
|
|
$ 196
|
| |
|
|
533
|
| |
|
|
|
| |
| Metals
/ Minerals—0.1% |
|
|
Arsenal
Aic Parent LLC Tranche B (1 month Term SOFR + 4.500%)
9.848%, 8/19/30(6) |
95
|
|
95
|
Covia
Holdings Corp. (3 month Term SOFR + 4.262%)
9.676%, 7/31/26(6) |
275
|
|
272
|
| |
|
|
367
|
| |
|
|
|
| |
| Retail—0.1%
|
|
|
CNT
Holdings I Corp. First Lien (3 month Term SOFR + 3.500%)
8.926%, 11/8/27(6) |
204
|
|
204
|
PetsMart
LLC (1 month Term SOFR + 3.850%)
9.198%, 2/11/28(6) |
165
|
|
163
|
| |
|
|
367
|
| |
|
|
|
| |
| Service—0.5%
|
|
|
AlixPartners
LLP (1 month Term SOFR + 2.864%)
8.213%, 2/4/28(6) |
50
|
|
50
|
Ascend
Learning LLC (1 month Term SOFR + 3.600%)
8.948%, 12/11/28(6) |
283
|
|
276
|
BrightView
Landscapes LLC Tranche B (3 month Term SOFR + 3.250%)
8.633%, 4/20/29(6) |
223
|
|
222
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Service—continued
|
|
|
DG
Investment Intermediate Holdings 2, Inc. 2022 (1 month Term SOFR + 4.750%)
10.098%, 3/31/28(6) |
$ 199
|
|
$ 198
|
DXP
Enterprises, Inc. (3 month Term SOFR + 4.850%)
10.291%, 10/15/30(6) |
130
|
|
130
|
Garda
World Security Corp. Tranche B-2 (3 month Term SOFR + 4.350%)
9.746%, 10/30/26(6) |
75
|
|
75
|
Grab
Holdings, Inc. (1 month Term SOFR + 4.614%)
9.963%, 1/29/26(6) |
124
|
|
125
|
Kuehg
Corp. (3 month Term SOFR + 5.000%)
10.390%, 6/12/30(6) |
275
|
|
275
|
NAB
Holdings LLC First Lien (3 month Term SOFR + 3.150%)
8.540%, 11/23/28(6) |
187
|
|
186
|
Sedgwick
Claims Management Services, Inc. 2023 (1 month Term SOFR + 3.750%)
9.098%, 2/24/28(6) |
194
|
|
194
|
St.
George’s University Scholastic Services LLC (1 month Term SOFR + 3.350%)
8.698%, 2/10/29(6) |
202
|
|
201
|
The
Hertz Corp. 2023 (1 month Term SOFR + 3.750%)
9.080%, 6/30/28(6) |
103
|
|
102
|
| |
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(6) |
$ 125
|
|
$ 125
|
Trugreen
Ltd. Partnership First Lien (1 month Term SOFR + 4.100%)
9.448%, 11/2/27(6) |
175
|
|
164
|
| |
|
|
2,323
|
| |
|
|
|
| |
| Transportation
- Automotive—0.1% |
|
|
American
Axle & Manufacturing, Inc. Tranche B, First Lien (1-3 month Term SOFR + 3.600%)
8.921 - 9.007%, 12/13/29(6) |
125
|
|
125
|
Clarios
Global LP 2023 (1 month Term SOFR + 3.750%)
9.098%, 5/6/30(6) |
150
|
|
150
|
PAI
Holdco, Inc. Tranche B (3 month Term SOFR + 4.012%)
9.395%, 10/28/27(6) |
162
|
|
149
|
| |
|
|
424
|
| |
|
|
|
| |
| Utilities—0.1%
|
|
|
Brookfield
WEC Holdings, Inc. (1 month Term SOFR + 2.864%)
8.213%, 8/1/25(6) |
206
|
|
206
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Par
Value(1) |
|
Value
|
| |
|
|
|
| Utilities—continued
|
|
|
Generation
Bridge Northeast LLC Tranche B (1 month Term SOFR + 4.250%)
9.598%, 8/7/29(6) |
$ 84
|
|
$
85 |
| |
|
|
291
|
| |
|
|
|
| |
Total
Leveraged Loans
(Identified Cost $21,380) |
|
21,403
|
| |
Shares
|
|
| Preferred
Stocks—0.3% |
| Financials—0.3%
|
|
| Capital
Farm Credit ACA Series 1 144A, 5.000%(2)(5) |
310
(13) |
282
|
| JPMorgan
Chase & Co. Series HH, 4.600%(2) |
285
(13) |
274
|
| MetLife,
Inc. Series D, 5.875%(2) |
209
(13) |
198
|
| Truist
Financial Corp. Series Q, 5.100%(2) |
375
(13) |
322
|
| Zions
Bancorp NA, 9.561% |
17,485
|
441
|
| |
|
1,517
|
Total
Preferred Stocks
(Identified Cost $1,672) |
1,517
|
| |
|
|
| |
| Common
Stocks—105.3% |
| Communication
Services—2.2% |
|
| Cellnex
Telecom S.A. |
251,291
|
9,584
|
| Consumer
Discretionary—0.0% |
|
| MYT
Holding LLC Class B(8)(14) |
22,362
|
3
|
| NMG
Parent LLC(8)(14) |
368
|
41
|
| West
Marine(14) |
475
|
1
|
| |
|
45
|
| |
|
|
| |
| Energy—15.6%
|
|
| Cheniere
Energy, Inc.(2) |
117,359
|
21,377
|
| DT
Midstream, Inc.(2) |
74,400
|
4,262
|
| Enbridge,
Inc.(2) |
311,790
|
10,872
|
| Koninklijke
Vopak NV |
170,640
|
5,851
|
| Pembina
Pipeline Corp. |
203,438
|
6,805
|
| |
Shares
|
|
Value
|
| |
|
|
|
| Energy—continued
|
|
|
| Targa
Resources Corp.(2) |
108,479
|
|
$ 9,812
|
| Williams
Cos., Inc. (The)(2) |
216,485
|
|
7,965
|
| |
|
|
66,944
|
| |
|
|
|
| |
| Industrials—28.8%
|
|
|
| Aena
SME S.A. |
118,802
|
|
20,425
|
| Aeroports
de Paris S.A. |
53,572
|
|
6,595
|
| Atlas
Arteria Ltd. |
2,752,097
|
|
10,547
|
| Auckland
International Airport Ltd. |
1,988,587
|
|
9,699
|
| Canadian
Pacific Kansas City Ltd.(2) |
110,841
|
|
7,981
|
| Ferrovial
SE |
236,822
|
|
8,187
|
| Flughafen
Zurich AG Registered Shares |
44,956
|
|
9,513
|
| Norfolk
Southern Corp.(2) |
49,263
|
|
10,747
|
| Transurban
Group |
2,978,716
|
|
25,508
|
| Union
Pacific Corp.(2) |
29,272
|
|
6,594
|
| Vinci
S.A. |
63,270
|
|
7,734
|
| |
|
|
123,530
|
| |
|
|
|
| |
| Real
Estate—9.8% |
|
|
| American
Tower Corp.(2) |
125,715
|
|
26,247
|
| Crown
Castle, Inc.(2) |
134,050
|
|
15,721
|
| |
|
|
41,968
|
| |
|
|
|
| |
| Utilities—48.9%
|
|
|
| Ameren
Corp.(2) |
125,659
|
|
9,750
|
| American
Electric Power Co., Inc.(2) |
153,150
|
|
12,183
|
| APA
Group |
874,456
|
|
4,929
|
| Atmos
Energy Corp.(2) |
85,573
|
|
9,739
|
| CenterPoint
Energy, Inc.(2) |
415,135
|
|
11,736
|
| CMS
Energy Corp.(2) |
151,781
|
|
8,615
|
| DTE
Energy Co.(2) |
73,909
|
|
7,695
|
| Edison
International(2) |
131,196
|
|
8,789
|
| EDP
- Energias de Portugal S.A.(2) |
1,566,448
|
|
7,480
|
| Emera,
Inc. |
230,743
|
|
8,109
|
| Entergy
Corp.(2) |
67,385
|
|
6,833
|
| Essential
Utilities, Inc.(2) |
184,661
|
|
6,576
|
| Iberdrola
S.A. |
645,289
|
|
7,969
|
| National
Grid plc |
1,150,162
|
|
14,919
|
| NextEra
Energy, Inc.(2) |
280,800
|
|
16,430
|
| NiSource,
Inc.(2) |
306,311
|
|
7,854
|
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
| |
Shares
|
|
Value
|
| |
|
|
|
| Utilities—continued
|
|
|
| Public
Service Enterprise Group, Inc.(2) |
113,159
|
|
$
7,064 |
| Sempra
(2) |
232,451
|
|
16,939
|
| Severn
Trent plc |
228,605
|
|
7,506
|
| Southern
Co. (The)(2) |
177,369
|
|
12,590
|
| United
Utilities Group plc |
364,968
|
|
5,027
|
| Xcel
Energy, Inc.(2) |
182,381
|
|
11,096
|
| |
|
|
209,828
|
Total
Common Stocks
(Identified Cost $458,982) |
|
451,899
|
| |
|
|
|
| |
| Rights—0.0%
|
| Utilities—0.0%
|
|
|
| Vistra
Energy Corp., 12/29/49(8)(14) |
2,084
|
|
3
|
Total
Rights
(Identified Cost $2) |
|
3
|
Total
Long-Term Investments—142.7%
(Identified Cost $631,442) |
|
612,582 |
| |
|
|
|
| |
TOTAL
INVESTMENTS—142.7%
(Identified Cost $631,442) |
|
$
612,582 |
| Other
assets and liabilities, net—(42.7)% |
|
(183,406)
|
| NET
ASSETS—100.0% |
|
$
429,176 |
| Abbreviations:
|
| ABS
|
Asset-Backed
Securities |
| ACA
|
American
Capital Access Financial Guarantee Corp. |
| BAM
|
Build America
Municipal Insured |
| DAC
|
Designated
Activity Company |
| JSC
|
Joint Stock
Company |
| LIBOR
|
London
Interbank Offered Rate |
| LLC
|
Limited
Liability Company |
| LLLP
|
Limited
Liability Limited Partnership |
| LLP
|
Limited
Liability Partnership |
| 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) |
All
or a portion of securities is segregated as collateral for margin loan financing. The value of securities segregated as collateral is $269,773. |
|
(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) |
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 $88,058 or 20.5% of net assets. |
|
(6) |
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. |
|
(7) |
No
contractual maturity date. |
|
(8) |
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. |
|
(9) |
Issued
with a zero coupon. Income is recognized through the accretion of discount. |
|
(10) |
Amount
is less than $500 (not in thousands). |
|
(11) |
Security
in default; interest payments are being received. |
For information regarding the abbreviations, see the Key
Investment Terms starting on page 9.
See Notes to Financial Statements
Virtus Total Return Fund
Inc.
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2023
($ reported in
thousands)
|
(12) |
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. |
|
(13) |
Value
shown as par value. |
|
(14) |
Non-income
producing. |
| 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 |
$
6,210 |
|
$
— |
|
$
6,210 |
|
$—
|
| Municipal
Bonds |
2,112
|
|
—
|
|
2,112
|
|
—
|
| Foreign
Government Securities |
9,950
|
|
—
|
|
9,950
|
|
—
|
| Mortgage-Backed
Securities |
32,150
|
|
—
|
|
32,150
|
|
—
|
| Asset-Backed
Securities |
22,699
|
|
—
|
|
22,699
|
|
—
|
| Corporate
Bonds and Notes |
64,639
|
|
—
|
|
64,632
|
|
7
|
| Leveraged
Loans |
21,403
|
|
—
|
|
21,403
|
|
—
|
| Equity
Securities: |
|
|
|
|
|
|
|
| Preferred
Stocks |
1,517
|
|
441
|
|
1,076
|
|
—
|
| Common
Stocks |
451,899
|
|
451,854
|
|
1
|
|
44
|
| Rights
|
3
|
|
—
|
|
—
|
|
3
|
| Total
Investments |
$612,582
|
|
$452,295
|
|
$160,233
|
|
$54
|
Security held by
the Fund with an end of period value of $8 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
VIRTUS TOTAL RETURN FUND
INC.
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
$631,442)
|
$
612,582 |
|
Cash
|
2,095
|
| Receivables
|
|
|
Investment securities sold
|
1,310
|
|
Dividends and
interest
|
2,808
|
|
Tax reclaims
|
418
|
|
Prepaid Directors’
retainer
|
3
|
|
Prepaid expenses and other assets (Note
3)
|
190
|
|
Total
assets
|
619,406
|
| Liabilities
|
|
|
Due to
custodian
|
—
(a) |
|
Borrowings (Note
7)
|
187,000
|
| Payables
|
|
|
Investment securities
purchased
|
1,496
|
|
Interest on borrowings (Note
7)
|
984
|
|
Investment advisory fees (Note
3)
|
343
|
|
Director deferred compensation plan (Note
3)
|
182
|
|
Administration and accounting
fees
|
53
|
|
Professional fees
|
47
|
|
Other accrued
expenses
|
125
|
|
Total
liabilities
|
190,230
|
|
Net
Assets
|
$
429,176 |
| Net
Assets Consist of: |
|
|
Common stock ($0.001 par value; 500,000,000 shares
authorized)
|
$
69 |
|
Capital paid in on shares of beneficial
interest
|
465,593
|
|
Total distributable earnings (accumulated
losses)
|
(36,486)
|
|
Net
Assets
|
$
429,176 |
|
Common Shares
Outstanding
|
68,578,328
|
|
Net Asset Value Per
Share(b)
|
$
6.26 |
|
(a) |
Amount
is less than $500 (not in thousands). |
|
(b) |
Net
Asset Value Per Share is calculated using unrounded net assets. |
See Notes to Financial Statements
VIRTUS TOTAL RETURN FUND
INC.
STATEMENT OF OPERATIONS YEAR ENDED
November 30, 2023
($ reported in thousands)
| Investment
Income |
|
|
Dividends
|
$
17,579 |
|
Interest
|
10,301
|
|
Foreign taxes withheld
|
(804)
|
|
Total investment
income
|
27,076
|
| Expenses
|
|
|
Investment advisory
fees
|
4,642
|
|
Administration and accounting
fees
|
716
|
|
Printing fees and expenses
|
274
|
|
Transfer agent fees and
expenses
|
127
|
|
Directors’ fees and
expenses
|
92
|
|
Professional fees
|
64
|
|
Custodian fees
|
27
|
|
Miscellaneous
expenses
|
120
|
|
Total expenses before interest
expense
|
6,062
|
|
Interest expense on borrowings (Note
7)
|
11,806
|
|
Total expenses after interest
expense
|
17,868
|
|
Net investment income
(loss)
|
9,208
|
| Net
Realized and Unrealized Gain (Loss) on Investments |
|
| Net
realized gain (loss) from: |
|
|
Investments
|
(15,240)
|
|
Foreign currency
transactions
|
(29)
|
| Net
change in unrealized appreciation (depreciation) on: |
|
|
Investments
|
(20,952)
|
|
Foreign currency
transactions
|
23
|
|
Net realized and unrealized gain (loss) on
investments
|
(36,198)
|
|
Net increase (decrease) in net assets resulting from
operations
|
$(26,990)
|
See Notes to Financial Statements
VIRTUS TOTAL RETURN FUND
INC.
STATEMENTS OF CHANGES IN NET ASSETS
($ reported in
thousands)
| |
Year
Ended
November 30, 2023 |
|
Year
Ended
November 30, 2022 |
Increase
(Decrease) In Net Assets
From Operations |
|
|
|
|
Net investment income
(loss)
|
$
9,208 |
|
$
9,871 |
|
Net realized gain
(loss)
|
(15,269)
|
|
18,669
|
|
Net change in unrealized appreciation
(depreciation)
|
(20,929)
|
|
(34,350)
|
|
Increase (decrease) in net assets resulting from
operations
|
(26,990)
|
|
(5,810)
|
| From
Dividends and Distributions to Shareholders |
|
|
|
|
Net investment income and net realized
gains
|
(9,660)
|
|
(24,057)
|
|
Return of
capital
|
(50,003)
|
|
(25,365)
|
|
Dividends and Distributions to
Shareholders
|
(59,663)
|
|
(49,422)
|
| From
Capital Share Transactions |
|
|
|
|
Net proceeds from the sale of shares during rights offering (net of expenses of $600) (Note
9)
|
150
(1) |
|
140,617
|
|
Reinvestment of distributions resulting in the issuance of common stock (0 and 443,426 shares,
respectively)
|
—
|
|
3,833
|
|
Increase (decrease) in net assets from capital
transactions
|
150
|
|
144,450
|
|
Net increase (decrease) in net
assets
|
(86,503)
|
|
89,218
|
| Net
Assets |
|
|
|
|
Beginning of
period
|
515,679
|
|
426,461
|
|
End of
period
|
$429,176
|
|
$515,679
|
|
(1) |
Adjustment
to bring estimated costs in connection with rights offering to actual. |
See Notes to Financial Statements
VIRTUS TOTAL RETURN FUND
INC.
STATEMENT OF CASH FLOWS
YEAR ENDED November 30,
2023
($ reported in thousands)
| Increase
(Decrease) in cash |
|
| Cash flows provided by (used for) operating activities:
|
|
|
Net increase (decrease) in net assets resulting from operations
|
$
(26,990) |
| 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
|
304,166
|
|
(Increase) Decrease in investment securities sold receivable
|
112
|
|
Purchases of long-term investments
|
(238,021)
|
|
Increase (Decrease) in investment securities purchased payable
|
(374)
|
|
Net (purchases) or sales of short-term
investments
|
5,932
|
|
Net change in unrealized (appreciation)/depreciation on
investments
|
20,952
|
|
Net realized (gain)/loss on investments
|
15,240
|
|
Amortization of premium and accretion of discounts on investments
|
(293)
|
|
Proceeds from litigation
settlements
|
578
|
|
(Increase) Decrease in tax reclaims receivable
|
(121)
|
|
(Increase) Decrease in dividends and interest receivable
|
21
|
|
(Increase) Decrease in prepaid expenses and other
assets
|
(8)
|
|
(Increase) Decrease in prepaid Directors’
retainer
|
(1)
|
|
Increase (Decrease) in interest payable on borrowings
|
182
|
|
Increase (Decrease) in affiliated expenses
payable
|
(64)
|
|
Increase (Decrease) in non-affiliated expenses
payable
|
(333)
|
|
Cash provided by (used for) operating
activities
|
80,978
|
| Cash
provided by (used for) financing activities: |
|
|
Cash payments to reduce
borrowings
|
(20,000)
|
|
Cash distributions paid to shareholders
|
(59,663)
|
|
Expense adjustment related to rights
offering
|
150
|
|
Currency due to
custodian
|
—
(a) |
|
Cash provided by (used for) financing
activites
|
(79,513)
|
|
Net increase (decrease) in
cash
|
1,465
|
|
Cash and foreign currency at beginning of
period
|
630
|
|
Cash and foreign currency at end of
period
|
$
2,095 |
| Supplemental
cash flow information: |
|
|
Cash paid during the period for interest expense on
borrowings
|
$
11,624 |
| |
|
| |
|
|
(a) Amount is less than $500 (not in thousands). |
|
See Notes to Financial Statements
VIRTUS TOTAL RETURN FUND
INC.
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
| |
Year
Ended November 30, |
| |
2023
|
|
2022
|
|
2021
|
|
2020
|
|
2019
(1) |
| PER
SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of
period
|
$
7.52 |
|
$
8.92 |
|
$
9.31 |
|
$
10.33 |
|
$
11.01 |
| Income
(loss) from investment operations: |
|
|
|
|
|
|
|
|
|
|
Net investment income
(loss)(2)
|
0.13
|
|
0.19
|
|
0.22
|
|
0.25
|
|
0.24
|
|
Net realized and unrealized gain
(loss)
|
(0.52)
|
|
(0.37)
|
|
0.35
|
|
(0.11)
|
|
0.52
|
|
Payment from
affiliate
|
—
|
|
—
|
|
—
|
|
—
|
|
—
(3) |
|
Total from investment
operations
|
(0.39)
|
|
(0.18)
|
|
0.57
|
|
0.14
|
|
0.76
|
| Dividends
and Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
(0.14)
|
|
(0.47)
|
|
(0.24)
|
|
(0.27)
|
|
(0.31)
|
|
Return of
capital
|
(0.73)
|
|
(0.49)
|
|
(0.72)
|
|
(0.89)
|
|
(1.13)
|
|
Total dividends and distributions to
shareholders
|
(0.87)
|
|
(0.96)
|
|
(0.96)
|
|
(1.16)
|
|
(1.44)
|
| Fund
Share Transactions (Note 9) |
|
|
|
|
|
|
|
|
|
|
Dilutive effect on net asset value as a result of rights
offering(4)
|
—
(3) |
|
(0.26)
|
|
—
|
|
—
|
|
—
|
|
Net asset value, end of
period
|
$
6.26 |
|
$
7.52 |
|
$
8.92 |
|
$
9.31 |
|
$
10.33 |
|
Market value, end of
period(5)
|
$
5.38 |
|
$
6.95 |
|
$
9.37 |
|
$
8.41 |
|
$
10.98 |
|
Total return, net asset
value(6)
|
(3.96)%
|
|
(1.45)%
|
|
6.36%
|
|
3.25%
|
|
16.67%
|
|
Total return, market
value(6)
|
(10.69)%
|
|
(16.43)%
(7) |
|
23.68%
|
|
(12.25)%
|
|
41.67%
|
| RATIOS/SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses after interest expense to average net
assets(8)
|
3.87%
|
|
2.26%
|
|
1.73%
|
|
2.05%
|
|
2.99%
(9) |
|
Ratio of net investment income (loss) to average net
assets
|
1.99%
|
|
2.30%
|
|
2.34%
|
|
2.73%
|
|
2.20%
(9) |
|
Portfolio turnover
rate
|
36%
|
|
47%
|
|
44%
|
|
46%
|
|
110%
(10) |
|
Net assets, end of period
(000’s)
|
$429,176
|
|
$515,679
|
|
$426,461
|
|
$441,552
|
|
$487,899
|
|
Borrowings, end of period
(000’s)
|
$187,000
|
|
$207,000
|
|
$159,750
|
|
$159,750
|
|
$184,750
|
|
Asset coverage, per $1,000 principal amount of
borrowings(11)
|
$
3,295 |
|
$
3,491 |
|
$
3,670 |
|
$
3,764 |
|
$
3,641 |
|
(1) |
On
November 18, 2019, Virtus Total Return Inc. (ZF) was reorganized into the Fund. The net asset values and other per share information for periods prior to the reorganization on November 18, 2019 were revised to reflect the share conversion ratio from
the reorganization of 1.039518. |
|
(2) |
Calculated
using average shares outstanding. |
|
(3) |
Amount
is less than $0.005 per share. |
|
(4) |
Shares
were sold at a 5% discount from a 5-day average market price from 9/12/22 to 9/16/22. |
|
(5) |
Closing
Price – New York Stock Exchange. |
|
(6) |
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. |
See Notes to Financial Statements
VIRTUS TOTAL RETURN FUND
INC.
FINANCIAL HIGHLIGHTS (Continued)
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
|
(7) |
Total return
on market value includes the dilutive effect of the 2022 rights offering. Without this effect, the total market return would have been (16.12%). |
|
(8) |
Ratio of
total expenses, before interest expense on borrowings, was 1.31%, 1.32%, 1.34%, 1.38% and 1.79% for the years ended November 30, 2023, 2022, 2021, 2020 and 2019, respectively. |
|
(9) |
The
Fund incurred certain non-recurring merger costs in 2019. When excluding these costs, the ratio of total expenses after interest expense and before expense waivers to average net assets would be 2.83%, the ratio of net expenses to average net assets
would be 2.83% and the ratio of net investment income (loss) to average net assets would be 2.36%. |
|
(10) |
Portfolio
turnover increased due to repositioning of the portfolio related to the reorganization on November 18, 2019. |
|
(11) |
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
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 2023
Note 1. Organization
Virtus Total Return Fund Inc. (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 incorporated under the laws of the State of Maryland on July
21, 1988. The Fund’s investment objectives are 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 Directors 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. |
| |
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 |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
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 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 |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
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. |
| |
Dividend income from REITs is
recorded using management’s estimate of the percentage of income included in distributions received from such investments based on historical information and other industry sources. The return of capital portion of the estimate is a reduction
to investment income and a reduction in the cost basis of each investment which increases net realized gain (loss) and net change in unrealized appreciation (depreciation). If the return of capital distributions exceed their cost basis, the
distributions are treated as realized gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts. |
| 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
|
| |
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. |
| |
The Fund has a Managed
Distribution Plan which currently provides for the Fund to make a monthly distribution of $0.05 per share. Distributions may represent earnings from net investment income, realized capital gains, or, if necessary, return of capital. Shareholders
should not draw any conclusions about the Fund’s investment performance from the terms of the Fund’s Managed Distribution Plan. |
| 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 |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
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. |
| 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. |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
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 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 subadvisers. |
| |
As
compensation for its services to the Fund, the Adviser receives a fee at an annual rate of 0.70% 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 |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
| |
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.
|
Subadvisers
|
| |
Duff & Phelps Investment
Management Co., an indirect, wholly-owned subsidiary of Virtus, is the subadviser of the equity portion of the Fund’s portfolio. Virtus Fixed Income Advisers, LLC, an indirect, wholly-owned subsidiary of Virtus, acting through its division,
Newfleet Asset Management, is the subadviser of the fixed income portion of the Fund’s portfolio. For the period, these two subadvisers were, in the aggregate, responsible for the day-to-day portfolio management of the Fund for which they were
each 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 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 $663 which are included in the Statement of Operations within the line item “Administration and accounting fees.” |
| D.
|
Directors’ Fees
|
| |
For the year ended November
30, 2023, the Fund incurred Directors’ fees totaling $86 which are included in the Statement of Operations within the line item “Directors’ fees and expenses.” |
| E.
|
Investments with Affiliates
|
| |
The Fund is permitted to
purchase assets from or sell assets to certain related affiliates under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of assets by the Fund from or to another
fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers comply with Rule 17a-7 under the 1940 Act. Further, as
defined under the procedures, each transaction is effected at the current market price. |
| |
During the year ended
November 30, 2023, the Fund did not engage in any transactions pursuant to Rule 17a-7 under the 1940 Act. |
| F.
|
Director Deferred Compensation
Plan |
| |
The Fund
provides a deferred compensation plan for its Directors who receive compensation from the Fund. Under the deferred compensation plan, Directors may elect to defer all or a portion of their compensation. Amounts deferred are retained by the Fund, and
then, to the extent permitted by the 1940 Act, in turn, may be invested in the shares of affiliated or unaffiliated mutual funds selected by the participating Directors. Investments in such instruments are included in “Prepaid expenses and
other assets” in the Statement of Assets and Liabilities at November 30, 2023. |
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Note 4. Purchases and Sales of Securities
($ 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 |
|
|
| |
|
|
|
|
$203,940
|
$271,119
|
|
|
Purchases and
sales of long-term U.S. government and agency securities during the year ended November 30, 2023, were as follows:
| |
|
|
|
|
|
|
|
|
|
|
Purchases |
|
Sales |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
$34,081
|
|
$33,047
|
|
|
|
|
Note 5. Federal Income Tax Information
($ 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) |
|
|
|
| |
|
|
$632,535
|
$25,196
|
$(45,149)
|
$(19,953)
|
|
|
|
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 fiscal year ended November 30, 2023, the Fund’s capital loss carryovers are as follows:
| |
|
|
|
|
Short-Term |
Long-Term |
|
|
| |
|
|
|
|
$2,774
|
$12,474
|
|
|
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 |
|
|
| |
|
|
|
|
$
1,099 |
$
15,248 |
|
|
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.
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
The tax character of dividends and
distributions paid during the years ended November 30, 2023 and 2022 was as follows:
| |
|
|
|
|
|
|
| |
|
|
|
2023
|
|
2022
|
| |
|
|
Ordinary Income
|
$
9,660 |
|
$10,064
|
| |
|
|
Long-Term Capital Gains
|
—
|
|
13,993
|
| |
|
|
Return of Capital
|
50,003
|
|
25,365
|
| |
|
|
Total
|
$59,663
|
|
$49,422
|
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 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.
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
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.
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
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
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 subadvisers 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 objectives. 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.
At November 30, 2023, the Fund held
securities issued by various companies in specific sectors as detailed below:
| |
|
|
|
|
Sector |
Percentage
of
Total Investments |
| |
|
|
|
|
Utilities
|
34%
|
Note 7. Borrowings
($ reported in thousands)
Effective December 17, 2020, the Fund
entered into a Master Margin Loan Agreement (the “Agreement”) with a commercial bank (the “Bank”) that allows the Fund to borrow cash from the Bank, up to a limit of $235,000 (the “Commitment Amount”). Cash
borrowings under the Agreement are secured by assets of the Fund that are held with the Fund’s custodian in a separate account. Interest is charged at the Overnight Bank Funding Rate plus an additional percentage rate on the amount borrowed,
and commitment fees are charged on the undrawn balance, if less than 75% of the Commitment Amount is borrowed at a given time. For the year ended November 30, 2023, the Fund had average borrowings of $203,195 with an average interest rate of 5.73%.
For the same period, the interest expense and commitment fees related to the borrowings amounted to $11,807 and $—(1) respectively, and are included within the
“Interest expense on borrowings” line on the Statement of Operations. The carrying value approximates fair value of the borrowing at November 30, 2023.
At November 30, 2023, the amount of
outstanding borrowings was as follows:
| |
Outstanding
Borrowings |
|
Interest
Rate |
| |
$187,000
|
|
6.15%
|
(1) Amount is less than $500 (not in thousands).
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
Note 8. Indemnifications
Under the Fund’s organizational
documents, its Directors 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 had one class
of common stock, par value $0.001 per share, of which 500,000,000 shares are authorized and 68,578,328 shares are outstanding.
In a non-transferable rights offering ended
September 16, 2022, shareholders exercised rights to purchase 20,311,323 shares of common stock at an offering price of $6.96 per share for proceeds, net of estimated expenses, of $140,617,000. After adjusting for actual expenses, the revised actual
proceeds were $140,767,000.
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.
Note 11. Regulatory Matters and Litigation
From time to time, the Fund, the Adviser,
the subadvisers, 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.
VIRTUS TOTAL RETURN FUND
INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2023
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 there are no subsequent events requiring recognition or disclosure in these financial statements.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Virtus Total
Return Fund Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Virtus Total Return Fund Inc. (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 agents, 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.
VIRTUS TOTAL RETURN FUND
INC.
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 ($) |
| |
100%
|
|
76.05%
|
|
$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 subadvisers vote 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.
VIRTUS TOTAL RETURN FUND
INC.
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS
(Unaudited)
Investment Objective: The Fund’s investment objective is capital appreciation, with current income as a secondary objective.
Principal Strategies:
The Fund seeks to meet its objectives
through a balance of equity and fixed income investments.
The equity portion of the Fund invests
globally in owners/operators of infrastructure in the communications, utility, energy, and transportation industries.
The fixed income portion of the Fund is
designed to generate high current income and total return through the application of active sector rotation, extensive credit research, and disciplined risk management designed to capitalize on opportunities across undervalued areas of the fixed
income markets.
Principal Risks:
Equity Securities: Generally, prices of equity securities are more volatile than those of fixed income securities. The prices of equity securities will rise and fall in response to a number of different factors. In particular, equity
securities will respond to events that affect entire financial markets or industries (such as changes in inflation or consumer demand) and to events that affect particular issuers (such as news about the success or failure of a new product). Equity
securities also are subject to “stock market risk,” meaning that stock prices in general may decline over short or extended periods of time. When the value of the stocks held by the Fund goes down, the net asset value of the Fund’s
shares will be affected.
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.
Infrastructure-Related
Investments: Infrastructure-related entities are subject to a variety of factors that may adversely affect their businesses or operations, including high interest costs in connection with capital construction
programs, costs associated with environmental and other regulations, the effects of economic slowdown and surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable
prices, the effects of energy conservation policies and other factors. Additionally, infrastructure-related entities may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates
charged to customers, service interruption due to environmental, operational or other mishaps and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.
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.
VIRTUS TOTAL RETURN FUND
INC.
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
In general, less information is publicly
available about non-U.S. companies than about U.S. companies. Non-U.S. companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. Certain foreign issuers classified as passive
foreign investment companies may be subject to additional taxation risk.
Utilities Industry: Public utility companies are subject to intrinsic risks, including difficulty in obtaining an adequate return on invested capital, difficulty in financing large construction programs during an inflationary period,
restrictions on operations and increased costs and delays attributable to environmental considerations and regulation, difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets,
technological innovations that may render existing plants, equipment or products obsolete, the potential impact of natural or man-made disasters, increased costs and reduced availability of certain types of fuel, occasional reduced availability and
high costs of natural gas and other fuels, the effects of energy conservation, the effects of a national energy policy and lengthy delays and greatly increased costs and other problems associated with the design, construction, licensing, regulation
and operation of nuclear facilities for electric generation, including, among other considerations, the problems associated with the use of radioactive materials, the disposal of radioactive wastes, shutdown of facilities or release of radiation
resulting from catastrophic events, disallowance of costs by regulators which may reduce profitability, and changes in market structure that increase competition. There are substantial differences among the regulatory practices and policies of
various jurisdictions, and any given regulatory agency may make major shifts in policy from time to time.
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
VIRTUS TOTAL RETURN FUND
INC.
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
expense may be greater than those that
would be involved if the Fund could enforce its rights directly against the borrower.
Credit:
There is a risk that the issuer of a security 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
security 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.
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
VIRTUS TOTAL RETURN FUND
INC.
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES
AND PRINCIPAL RISKS (Unaudited) (Continued)
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 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.
Leverage:
The Fund employs leverage through margin financing. 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 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.
Managed Distribution Plan: The Board of Directors has adopted a Managed Distribution Plan (the “Plan”) which currently provides for the Fund to make a monthly distribution at the rate of $0.05 per share. Under the terms of the Plan,
the Fund seeks to maintain a consistent distribution level that may be paid in part or in full from net investment income, realized capital gains, and a return of capital, or a combination thereof. The Board may amend, suspend or terminate the Plan
at any time, without prior notice to shareholders, if it deems such action to be in the best interests of the Fund and its shareholders.
VIRTUS TOTAL RETURN FUND
INC.
Automatic Reinvestment and Cash Purchase Plan (Unaudited)
Virtus Total Return Fund Inc. (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.
VIRTUS TOTAL RETURN FUND
INC.
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.
VIRTUS TOTAL RETURN FUND
INC.
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 DIRECTORS OF VIRTUS TOTAL RETURN
FUND INC. (Unaudited)
The Board of Directors (the
“Board”) of Virtus Total Return Fund Inc. (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 each of the subadvisory agreements (the “Subadvisory Agreements”, and collectively with the Advisory Agreement, the “Agreements”) with Virtus Fixed Income
Advisers, LLC, acting through its division Newfleet Asset Management, and Duff & Phelps Investment Management Company (each, a “Subadviser” and together, “Subadvisers”). 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 Directors who are not interested persons, as defined in the Investment Company Act of 1940, as amended (the
“1940 Act”), of the Fund (the “Independent Directors”) 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 Subadvisers 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 Subadvisers, including quarterly performance reports prepared by management containing reviews of investment results and periodic
presentations from each of the Subadvisers with respect to the Fund. The Board noted the affiliation of the Subadvisers 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 Director may have attributed different weights to the various factors. The Independent Directors also discussed the proposed approval of the
Agreements in executive sessions with their independent legal counsel at which no representatives of VIA or the Subadvisers were present.
Nature,
Extent and Quality of Services
The Directors 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 Subadvisers to detailed requests submitted by independent legal counsel to the
Independent Directors on their behalf, as well as responses by VIA and the Subadvisers to follow-up questions. The Directors also previously had received presentations by VIA’s and each 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 Subadvisers; and investment process, investment strategies, personnel, compliance procedures, and overall performance of VIA and the Subadvisers.
In considering the Agreement with VIA, the
Board considered VIA’s process for supervising and managing the Subadvisers, including: (a) VIA’s ability to select and monitor the Subadvisers; (b) VIA’s ability to provide the services necessary to monitor each Subadviser’s
compliance with the Fund’s investment objectives, policies and restrictions, as well as to provide other oversight activities; and (c) VIA’s ability and willingness to identify instances in which a
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF DIRECTORS OF VIRTUS TOTAL RETURN
FUND INC. (Unaudited) (Continued)
Subadviser should be replaced and to carry
out the required changes. The Directors also considered: (a) 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
each of the Subadvisers, the Board considered information provided to the Board by the Subadvisers, as well as information provided throughout the past year. The Board noted that each 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 each Subadviser’s management of the Fund must be carried out in accordance with the
Fund’s investment objectives, policies and restrictions. The Board considered each 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 each Subadviser, and the experience and
capability of each Subadviser’s management and other personnel committed by each Subadviser to the Fund. The Board also considered: (a) the quality of each Subadviser’s regulatory and legal compliance policies, procedures and systems;
and (b) each Subadviser’s brokerage and trading practices, including with respect to best execution and soft dollars. The Board also took into account each 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 each Subadviser’s investment strategies. The Board noted VIA’s expertise
and resources in monitoring the performance, investment style and risk-adjusted performance of each 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 performance of the
Fund for the period prior to the reorganization of the former Virtus Total Return Fund (“ZF”) with and into the Fund (the “Reorganization”) represented performance of ZF, as ZF was the accounting survivor in the
Reorganization. The
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF DIRECTORS OF VIRTUS TOTAL RETURN
FUND INC. (Unaudited) (Continued)
Board noted that the Fund underperformed
the median of its Performance Universe for the 3-, 5-, and 10-year periods ended March 31, 2023, performed the same as the median of its Performance Universe for the 1-year period 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 March 31, 2023. The Directors 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 Directors also considered the fee rates payable by comparable accounts managed by each of the Subadvisers.
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 second 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 each of the Subadvisers, 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 each
Subadviser in connection with its relationship to the Fund, the Board noted that the fees payable under the Subadvisory Agreements are paid by VIA out of the fee that VIA receives under the Advisory Agreement, and not by the Fund. In
CONSIDERATION OF ADVISORY AND
SUBADVISORY AGREEMENTS
BY THE BOARD OF DIRECTORS OF VIRTUS TOTAL RETURN
FUND INC. (Unaudited) (Continued)
considering the fee payable by VIA to each
Subadviser, the Board noted that, because each 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 Subadvisers together.
For each of the above reasons, the Board concluded that the separate profitability to each of the Subadvisers and their affiliates from their relationships with the Fund was not a material factor in approval of the Subadvisory Agreements.
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. The Board noted that the Fund had raised additional assets through a rights offering in 2022, but that it was unlikely that the Fund would
be able to raise additional assets in the near future.
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 offering, additional 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 Subadvisers 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 each Subadviser is an affiliate of VIA, there are no other direct benefits received by the Subadvisers or VIA in providing investment
advisory services to the Fund, other than the fees earned under the respective Agreement.
The Directors concluded that potential
“fallout” benefits that VIA and the Subadvisers 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 Directors, approved the Agreements with respect to the Fund.
FUND MANAGEMENT TABLES
(Unaudited)
Information pertaining to the Directors and
Officers of the Company 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 Total Return Fund Inc., One Financial Plaza, Hartford, CT 06103.
Independent Directors
Name, Year of Birth,
Length of Time Served
and Number of
Portfolios in Fund
Complex Overseen by
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
Burke,
Donald C.
YOB: 1960
Served Since: 2020, Class I
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
Cogan,
Sarah E.
YOB: 1956
Served Since: 2021, Class I
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
Drummond,
F. Ford
YOB: 1962
Served Since: 2021, Class II
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 I
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
McLoughlin,
Philip R.
YOB: 1946
Served Since: 2014, Class II
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
McNamara,
Geraldine M.
YOB: 1951
Served Since: 2020, Class III
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
Walton, R. Keith
YOB: 1964
Served Since: 2004, Class III
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
Director |
Principal
Occupation(s) During Past 5 Years |
Other
Directorships Held by Director |
|
Zino, Brian T.
YOB: 1952
Served Since: 2014, Class III
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 Director
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 Director |
Principal
Occupation(s) During Past
5 Years |
Other
Directorships Held by Director |
Aylward, George R.**
Director and President
YOB: 1964
Served Since: 2006, Class II
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 of the Trust 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 (2012 to 2013); and Chief Financial Officer and Treasurer (since 2010). |
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 2012). |
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. |
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 |
Krishnan,
Suneeta
YOB: 1965 |
Vice
President (since 2018) and Assistant Treasurer (since 2012). |
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. |
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 2013) |
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. |
VIRTUS TOTAL RETURN FUND
INC.
101 Munson Street
Greenfield, MA 01301-9668
Board of Directors
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 Total Return Fund Inc.
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 described in Item 2(b) of the instructions for completion of Form N-CSR. |
| |
(d) |
The registrant has not granted any waivers, during the period covered by this report, 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 the instructions for completion of this Item. |
| Item 3. |
Audit Committee Financial Expert. |
(a)(1) The Registrant’s Board of Directors has determined that the Registrant has at least one “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 directors 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 “independent,” as defined by Item 3 of Form N-CSR. |
| 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 $33,050 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 $5,147 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, 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 $1,500 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 Total Return Fund Inc. (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: |
(b) 0%
(c) 0%
(d) N/A
| |
(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 $5,147 for 2023
and $10,302 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 this report, the members of the audit committee
were Donald C. Burke, Deborah A. DeCotis, John R. Mallin, Connie D. McDaniel and Brian T. Zino.
b) Not applicable.
(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.
(b) Not applicable.
| 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 subadvisers, Duff & Phelps Investment
Management Co. (“Duff & Phelps”) and/or Newfleet Asset Management, a division of Virtus Fixed Income Advisers, LLC (“Newfleet”). Following are summaries of their proxy voting policies.
Duff & Phelps
Duff & Phelps has
adopted proxy voting guidelines (the “Guidelines”) in an effort to ensure shares are voted in the best interests of its clients and the value of the investment, and to address any real or perceived conflicts of interest in proxy voting.
The Guidelines allow Duff & Phelps to utilize a qualified, non-affiliated third-party vendor to assist in the review of proxy proposals and making of voting recommendations on behalf of clients
consistent with the Guidelines to address conflicts of interest or potential conflicts of interest relating to proxy proposals. Generally, where the Guidelines outline a voting position, either as for or against such proxy proposal, voting will be
according to either the Guidelines or the third-party vendor’s policies. The Proxy Committee will vote the proxy according to either its determination of the client’s best interests or by client direction. In performing its analysis of how
to vote on a proposal, the Proxy Committee will begin by considering the voting recommendation of the third-party vendor and will then override such vendor’s recommendation if the Proxy Committee determines that such recommendation is not in
the best interest of Duff & Phelps clients. The Proxy Committee incorporates consideration of ESG issues into its evaluation of recommendations of the proxy advisory firm and the voting of proxies generally. The firm has additionally
adopted proxy voting guidelines that serve as a guide to voting with regard to certain recurring proposals. The vote the Proxy Committee selects will depend on the facts and circumstances of each situation as well as requirements of applicable law.
Duff & Phelps may choose not to vote proxies in certain situations or for certain accounts, such as when:
| |
• |
|
it deems the cost of voting to exceed any anticipated benefit to client; |
| |
• |
|
a proxy is received for a security it no longer manages due to the entire position being sold; or
|
| |
• |
|
exercising voting rights could restrict the ability of the portfolio manager to freely trade the security.
|
Duff & Phelps may also not be able to vote proxies for any client account that participates in securities lending programs.
A complete copy of Duff & Phelps’ current Proxy Voting Policies, Procedures and Guidelines may be
obtained by sending a written request to Duff & Phelps Investment Management Co., Attn: Compliance, 10 South Wacker Drive, 19th Floor, Chicago, Illinois 60606.
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.
|
| (a)(1) |
Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio
Manager(s) or Management Team Members |
As of the date of filing this report, the Fund’s sub-advisers are Duff & Phelps Investment Management Co. (“Duff & Phelps”) and Newfleet Asset Management, LLC (“Newfleet”). 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:
Duff & Phelps
Connie M. Luecke, CFA
Connie Luecke is a senior managing director and senior portfolio manager at Duff & Phelps Investment Management Co., an investment
management affiliate of Virtus. She is the senior portfolio manager for the firm’s global listed infrastructure strategies and has been chief investment officer of DNP Select Income Fund Inc. (NYSE: DNP) since 2018.
She has been a portfolio manager for the Fund since 2011, as well as portfolio manager for the Virtus Duff & Phelps Global
Infrastructure Fund since its inception in 2004. Prior to joining Duff & Phelps in 1992, Ms. Luecke served as a financial valuation consultant at Coopers & Lybrand, and as a research associate at Harris Associates L.P.
Ms. Luecke earned a B.S. from DePaul University and an M.B.A. from Loyola University of Chicago. She is a Chartered Financial Analyst® (CFA®) charterholder, a member of the CFA Institute, the CFA Society of Chicago, and a past president of the Utility and
Telecommunications Securities Club of Chicago. She began her career in the investment industry in 1983.
Newfleet
David L. Albrycht, CFA
David Albrycht is president and chief investment officer of Newfleet, an affiliated manager of 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 and its predecessor since 2016, Virtus Newfleet
Multi-Sector Short Term Bond Fund since 1993, Virtus Newfleet Multi-Sector Intermediate Bond Fund since 1994, and co-manager of 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
manager of another closed-end fund, Virtus Global Multi-Sector Income Fund (NYSE: VGI). 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.
| (a)(2) |
Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest
|
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 Directors 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 the 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.
Other Accounts Managed by Portfolio Manager(s) or Management Team Member
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
| David L. Albrycht |
|
Registered Investment Companies: |
|
|
17 |
|
|
$ |
7,483.2 |
|
|
|
1 |
|
|
$ |
144.9 |
|
|
|
Other Pooled Investment Vehicles: |
|
|
2 |
|
|
$ |
109.5 |
|
|
|
0 |
|
|
|
0 |
|
|
|
Other Accounts: |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
| Connie M. Luecke |
|
Registered Investment Companies: |
|
|
2 |
|
|
|
4,028.2 |
|
|
|
0 |
|
|
|
0 |
|
|
|
Other Pooled Investment Vehicles: |
|
|
2 |
|
|
|
244.0 |
|
|
|
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 Duff & Phelps and 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 and 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 the 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 Mr. Albrycht and
Ms. Luecke, 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 |
|
$ |
0 |
|
| Connie M. Luecke |
|
$ |
50,001-100,000 |
|
| 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 have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those
changes 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.
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 Total Return Fund Inc. |
|
|
|
|
|
|
|
|
| By (Signature and Title)* |
|
/s/ George R. Aylward |
|
|
|
|
George R. Aylward, President and Chief Executive Officer |
|
|
(principal executive officer) |
|
|
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) |
|
|
|
|
|
|
|
|
|
|
| By (Signature and Title)* |
|
/s/ W. Patrick Bradley |
|
|
|
|
W. Patrick Bradley, Executive Vice President, |
|
|
Chief Financial Officer, and Treasurer |
|
|
(principal financial officer) |
|
|
| * |
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 Total Return Fund
Inc.; |
| 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 registrant’s most recent fiscal quarter 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: February 5, 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 Total Return Fund
Inc.; |
| 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 registrant’s most recent fiscal quarter 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: February 5, 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 Total Return Fund Inc. (the
“Registrant”), certify that:
| |
1. |
The Form N-CSR of the Registrant containing the financial statements
(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: February 5, 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 Total Return Fund Inc. (the
“Registrant”), certify that:
| |
1. |
The Form N-CSR of the Registrant containing the financial statements
(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: February 5, 2024 |
|
|
|
|
|
/s/ W. Patrick Bradley |
|
|
|
|
|
|
W. Patrick Bradley, Executive Vice President, Chief Financial Officer, and Treasurer |
|
|
|
|
|
|
(principal financial officer) |
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, June 23, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.08 per share to
shareholders of record at the close of business on June 12, 2023 (ex-date June 9, 2023).
The following table sets forth the
estimated amounts of the most current distribution and the cumulative distributions paid this fiscal year to date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ from
federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
May 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.014 |
|
|
|
17.0 |
% |
|
$ |
0.065 |
|
|
|
13.5 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.002 |
|
|
|
3.5 |
% |
|
|
0.035 |
|
|
|
7.4 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.000 |
|
|
|
0.0 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.064 |
|
|
|
79.5 |
% |
|
|
0.380 |
|
|
|
79.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.080 |
|
|
|
100.0 |
% |
|
$ |
0.480 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022 |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s NAV and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
|
|
|
|
|
| May 31, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
3.83 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
14.50 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-5.22 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
7.25 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current distribution rate annualized as a percentage of the
Fund’s NAV at month end. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Virtus Total Return Fund Inc. - 2
Under the terms of its Managed Distribution Plan, the Fund will seek to maintain a consistent
distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized
capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You should not draw any conclusions about the
Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip: 92835W107
# # #
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, July 25, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.08 per share to
shareholders of record at the close of business on July 13, 2023 (ex-date July 12, 2023).
The following table sets forth the
estimated amounts of the most current distribution and the cumulative distributions paid this fiscal year to date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ from
federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
June 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.041 |
|
|
|
51.3 |
% |
|
$ |
0.106 |
|
|
|
18.9 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.002 |
|
|
|
2.5 |
% |
|
|
0.037 |
|
|
|
6.6 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.000 |
|
|
|
0.0 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.037 |
|
|
|
46.2 |
% |
|
|
0.417 |
|
|
|
74.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.080 |
|
|
|
100.0 |
% |
|
$ |
0.560 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022 |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s NAV and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
|
|
|
|
|
| June 30, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
4.23 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
14.22 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-2.09 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
8.30 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current distribution rate annualized as a percentage of the
Fund’s NAV at month end. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Virtus Total Return Fund Inc. - 2
Under the terms of its Managed Distribution Plan, the Fund will seek to maintain a consistent
distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized
capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You should not draw any conclusions about the
Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip:
92835W107
# # #
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, August 23, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.08 per share
to shareholders of record at the close of business on August 11, 2023 (ex-date August 10, 2023).
The following table sets forth
the estimated amounts of the most current distribution and the cumulative distributions paid this fiscal year to date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ from
federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
July 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.000 |
|
|
|
0.0 |
% |
|
$ |
0.106 |
|
|
|
16.6 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.037 |
|
|
|
5.8 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.000 |
|
|
|
0.0 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.080 |
|
|
|
100.0 |
% |
|
|
0.497 |
|
|
|
77.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.080 |
|
|
|
100.0 |
% |
|
$ |
0.640 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022 |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
|
|
|
|
|
| July 31, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
4.01 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
14.16 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-0.40 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
9.44 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current distribution rate annualized as a percentage of the
Fund’s NAV at month end. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Virtus Total Return Fund Inc. - 2
Under the terms of its Managed Distribution Plan, the Fund will seek to maintain a consistent
distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized
capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You should not draw any conclusions about the
Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip: 92835W107
# # #
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, September 21, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.05 per
share to shareholders of record at the close of business on September 11, 2023 (ex-date September 8, 2023).
As previously
announced, the fund’s monthly distribution rate was reduced from $0.08 per share to $0.05 per share effective with this distribution. The decrease in the monthly distribution reflects the increase in the fund’s cost of leverage, current
and expected earnings, and the overall market environment.
The following table sets forth the estimated amounts of the most current
distribution and the cumulative distributions paid this fiscal year to date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ from federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
August 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.010 |
|
|
|
12.5 |
% |
|
$ |
0.116 |
|
|
|
16.1 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.037 |
|
|
|
5.1 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.010 |
|
|
|
12.5 |
% |
|
|
0.010 |
|
|
|
1.4 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.060 |
|
|
|
75.0 |
% |
|
|
0.557 |
|
|
|
77.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.080 |
|
|
|
100.0 |
% |
|
$ |
0.720 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022. |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
Virtus Total Return Fund Inc. - 2
|
|
|
|
|
| August 31, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
2.86 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
9.62 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-7.05 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
11.54 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current $0.05/share distribution rate annualized as a percentage of
the Fund’s NAV at month end. The distribution rate using the previous rate of $0.08/share would be 15.38%. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Under the terms of its Managed Distribution
Plan, the Fund will seek to maintain a consistent distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s
aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You
should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip: 92835W107
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, October 24, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.05 per share
to shareholders of record at the close of business on October 12, 2023 (ex-date October 11, 2023).
The following table sets
forth the estimated amounts of the most current distribution and the cumulative distributions paid this fiscal year to date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ
from federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
September 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.011 |
|
|
|
22.0 |
% |
|
$ |
0.127 |
|
|
|
16.5 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.037 |
|
|
|
4.8 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.010 |
|
|
|
1.3 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.039 |
|
|
|
78.0 |
% |
|
|
0.596 |
|
|
|
77.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.050 |
|
|
|
100.0 |
% |
|
$ |
0.770 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022. |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
|
|
|
|
|
| September 29, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
1.51 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
10.38 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-13.06 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
13.32 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current distribution rate annualized as a percentage of the
Fund’s NAV at month end. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Virtus Total Return Fund Inc. - 2
Under the terms of its Managed Distribution Plan, the Fund will seek to maintain a consistent
distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized
capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You should not draw any conclusions about the
Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip: 92835W107
Virtus Total Return Fund Inc.
Section 19(a) Notice
HARTFORD, CT, November 24, 2023 — Virtus Total Return Fund Inc. (NYSE: ZTR) declared a distribution of $0.05 per share
to shareholders of record at the close of business on November 13, 2023 (ex-date November 10, 2023).
The following table sets
forth the estimated amounts of the most current distribution and the cumulative distributions paid this fiscal year-to-date from the following sources. All amounts are expressed based on U.S. generally accepted accounting principles which may differ
from federal income tax regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution Estimates |
|
October 2023 (MTD) |
|
|
Fiscal Year-to-Date
(YTD) (1) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Sources) |
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
|
Per Share
Amount |
|
|
Percentage
of Current
Distribution |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Investment Income |
|
$ |
0.000 |
|
|
|
0.0 |
% |
|
$ |
0.127 |
|
|
|
15.5 |
% |
| Net Realized Short-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.037 |
|
|
|
4.5 |
% |
| Net Realized Long-Term Capital Gains |
|
|
0.000 |
|
|
|
0.0 |
% |
|
|
0.010 |
|
|
|
1.2 |
% |
| Return of Capital (or other Capital Source) |
|
|
0.050 |
|
|
|
100.0 |
% |
|
|
0.646 |
|
|
|
78.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Distribution |
|
$ |
0.050 |
|
|
|
100.0 |
% |
|
$ |
0.820 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Fiscal year started December 1, 2022. |
Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are
based on the Fund’s net asset value (NAV) and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.
|
|
|
|
|
| October 31, 2023 |
|
|
|
| Average Annual Total Return on NAV for the 5-year period (2) |
|
|
2.20 |
% |
| Annualized Current Distribution Rate
(3) |
|
|
10.64 |
% |
| Fiscal YTD Cumulative Total Return on NAV
(4) |
|
|
-14.27 |
% |
| Fiscal YTD Cumulative Distribution Rate
(5) |
|
|
14.54 |
% |
| (2) |
Average Annual Total Return on NAV is the annual compound return for the five-year period. It reflects the
change in the Fund’s NAV and reinvestment of all distributions. |
| (3) |
Annualized Current Distribution Rate is the current distribution rate annualized as a percentage of the
Fund’s NAV at month end. |
| (4) |
Fiscal YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of
the fiscal year to this month end, including distributions paid and assuming reinvestment of those distributions. |
| (5) |
Fiscal YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the fiscal
year to this month end as a percentage of the Fund’s NAV at month end. |
Virtus Total Return Fund Inc. - 2
Under the terms of its Managed Distribution Plan, the Fund will seek to maintain a consistent
distribution level that may be paid, in part or in full, from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized
capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. You should not draw any conclusions about the
Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Plan.
The Fund estimates that it has distributed more than its income and capital gains; therefore, a portion of your distribution may be a return
of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should
not be confused with ‘yield’ or ‘income’.
The amounts and sources of distributions reported in this notice are
estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.
For more information on Virtus Total Return Fund Inc., contact shareholder services at (866) 270-7788, by email at
closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.
Cusip: 92835W107
Virtus Total Return (NYSE:ZTR)
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