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Virtus Artificial Intelligence & Technology Opportunities Fund Announces Distributions

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The Virtus Artificial Intelligence & Technology Opportunities Fund (NYSE: AIO) has announced monthly distributions of $0.15 per share for July and August 2024. These distributions follow the Fund’s Managed Distribution Plan, aimed at maintaining consistent payout levels, potentially from net investment income, realized capital gains, or shareholder capital. The Fund estimates that a portion of the distributions may constitute a return of capital. Performance metrics include a 12.96% 5-year average annual total return based on NAV, an 8.42% annualized current distribution rate, a 6.67% fiscal YTD cumulative total return on NAV, and a 2.81% fiscal YTD cumulative distribution rate. Actual distribution sources for tax purposes will be provided in a Form 1099-DIV.

Positive
  • Monthly distributions of $0.15 per share for July and August 2024 announced.
  • 5-year average annual total return on NAV is 12.96%.
  • Annualized current distribution rate is 8.42%.
  • Fiscal YTD cumulative total return on NAV is 6.67%.
Negative
  • A portion of the distributions may constitute a return of capital.
  • The difference between the distribution level and net investment income or realized capital gains will be distributed from the Fund's assets.
  • Return of capital distributions do not reflect the Fund’s investment performance.

The Virtus Artificial Intelligence & Technology Opportunities Fund has announced a monthly distribution of $0.15 per share for the upcoming months. While a consistent distribution can be appealing to shareholders, it's essential to note that a portion of these distributions may come from the fund’s assets, thus constituting a return of capital. A return of capital essentially means that part of the investors’ original capital is being returned to them, which can be a sign that the fund's income and gains are not sufficient to cover the distributions.

For the fiscal year to date, 24.5% of the fund’s distributions have been from the return of capital. It's important for investors to understand that this does not reflect the fund's income or performance but is rather a return of their initial investment. This practice can be unsustainable in the long term, as it may gradually erode the fund’s asset base.

Looking at the fund’s performance, it boasts an average annual total return on NAV of 12.96% over the past five years, which is commendable. However, investors should weigh this against the fact that the fiscal year-to-date cumulative total return on NAV is 6.67%, which, while positive, indicates moderate performance in the current fiscal year.

The current distribution rate is annualized at 8.42%, but investors should carefully scrutinize how much of this is derived from actual investment income versus capital return. High distribution rates combined with a significant return of capital can sometimes be masking less robust underlying performance.

HARTFORD, Conn.--(BUSINESS WIRE)-- Virtus Artificial Intelligence & Technology Opportunities Fund (NYSE: AIO) today announced the following monthly distributions:

Amount of Distribution

Ex-Date

Record Date

Payable Date

$0.15

July 11, 2024

July 11, 2024

July 30, 2024

$0.15

August 12, 2024

August 12, 2024

August 29, 2024

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 Fund previously provided this estimate of the sources of the distributions:

Distribution Estimates

May 2024 (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

$

-

 

0.0

%

$

0.003

 

0.5

%

Net Realized Short-Term Capital Gains

 

0.051

 

33.7

%

 

0.351

 

58.4

%

Net Realized Long-Term Capital Gains

 

0.099

 

66.3

%

 

0.099

 

16.6

%

Return of Capital (or other Capital Source)

 

-

0.0

%

 

0.147

24.5

%

Total Distribution

$

0.150

 

100.0

%

$

0.600

 

100.0

%

(1) Fiscal year started February 1, 2024.

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.

May 31, 2024

 

Average Annual Total Return on NAV for the 5-year period (2)

12.96

%

Annualized Current Distribution Rate (3)

8.42

%

Fiscal YTD Cumulative Total Return on NAV (4)

6.67

%

Fiscal YTD Cumulative Distribution Rate (5)

2.81

%

(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. AIO incepted October 31, 2019, and thus returns represent inception to date returns.

(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.

The amounts and sources of distributions reported in this notice are estimates only and are not being provided for tax reporting purposes. The actual amounts and sources of the distributions for tax purposes will depend on the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund or your broker will send you a Form 1099-DIV for the calendar year that will tell you what distributions to report for federal income tax purposes.

About the Fund

Virtus Artificial Intelligence & Technology Opportunities Fund is a diversified closed-end fund that seeks to provide total return through a combination of current income, current gains, and long-term capital appreciation. A multi-asset approach based on fundamental research is employed, dynamically allocating to attractive segments of a company's debt and equity in order to offer an attractive risk/reward profile. The Fund has a limited term and will terminate on or around October 29, 2031, absent approval by the Fund’s Board of Trustees to extend the Fund’s term by up to 18 months. Virtus Investment Advisers, Inc. is the investment adviser to the Fund and Voya Investment Management is its subadviser.

For more information on the Fund, contact shareholder services at (866) 270-7788, by email at closedendfunds@virtus.com, or through the Closed-End Funds section of virtus.com.

Fund Risks

An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund’s shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their NAV. For more information about the Fund’s investment objective and risks, please see the Fund’s annual report. A copy of the Fund’s most recent annual report may be obtained free of charge by contacting “Shareholder Services” as set forth at the end of this press release.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

For Further Information:

Shareholder Services

(866) 270-7788

closedendfunds@virtus.com

Source: Virtus Artificial Intelligence & Technology Opportunities Fund

FAQ

What are the monthly distribution amounts for AIO in July and August 2024?

The Virtus Artificial Intelligence & Technology Opportunities Fund announced monthly distributions of $0.15 per share for July and August 2024.

What is the 5-year average annual total return on NAV for AIO?

The 5-year average annual total return on NAV for the Virtus Artificial Intelligence & Technology Opportunities Fund is 12.96%.

What is the annualized current distribution rate for AIO?

The annualized current distribution rate for the Virtus Artificial Intelligence & Technology Opportunities Fund is 8.42%.

What is the fiscal YTD cumulative total return on NAV for AIO?

The fiscal YTD cumulative total return on NAV for the Virtus Artificial Intelligence & Technology Opportunities Fund is 6.67%.

Will the distributions for AIO include a return of capital?

Yes, the Fund estimates that a portion of the distributions may constitute a return of capital.

When are the pay dates for AIO's July and August 2024 distributions?

The pay dates for the July and August 2024 distributions are July 30, 2024, and August 29, 2024, respectively.

Virtus Artificial Intelligence & Technology Opportunities Fund

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