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Virtus Artificial Intelligence & Technology Opportunities Fund Discloses Sources of Distribution – Section 19(a) Notice

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Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) announced a monthly distribution of $0.15 per share on February 28, 2024. The Fund aims to maintain a consistent distribution level from net investment income and realized capital gains, with potential return of shareholder's capital if income falls short.
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The announcement by Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) regarding its monthly distribution is a significant piece of information for investors and analysts. The distribution of $0.15 per share is indicative of the fund's current cash flow and profitability. Financial analysts would scrutinize the sustainability of these distributions by examining the fund's net investment income and realized capital gains. If distributions are consistently higher than earnings, it could signal a potential depletion of capital over time, which may affect the fund's share price and investor returns.

It is also crucial to evaluate the fund's Managed Distribution Plan in the context of the overall market conditions and the specific performance of technology and AI-oriented investments. Given the volatility in tech sectors, the ability of AIO to maintain consistent distribution levels could be challenged. An analysis of the fund's portfolio, investment strategies and historical performance would provide a clearer picture of the risks and potential for continued distributions at this level.

From a market research perspective, the distribution announcement by AIO reflects broader trends in the investment fund industry, where managed distribution plans are designed to provide shareholders with a predictable income stream. This approach can be particularly appealing in uncertain market environments, as it may offer a degree of stability for income-focused investors.

A market research analyst would consider the competitive positioning of AIO within the AI and technology fund landscape. Factors such as the fund's asset allocation, the quality of the underlying investments and the management team's expertise are all critical in assessing the fund's ability to attract and retain investors, especially when compared to similar funds in the market. Additionally, the analyst would assess investor sentiment towards AI and technology sectors, as shifts in sentiment can have material impacts on fund inflows and valuation.

An economist's perspective on the distribution announcement by Virtus Artificial Intelligence & Technology Opportunities Fund would encompass an analysis of the macroeconomic factors that could influence the fund's performance. The AI and technology sectors are highly sensitive to changes in economic conditions, such as interest rate movements, regulatory changes and technological advancements. These factors can affect the profitability and valuation of the companies within AIO's portfolio.

The economist would also consider the implications of the Managed Distribution Plan on the fund's long-term economic health. While maintaining a consistent distribution level can be attractive, it is important to understand whether the distributions are aligned with the fund's earnings capacity. A mismatch could lead to asset erosion, which might necessitate adjustments to the distribution strategy in the future, potentially impacting investor confidence and market perception of the fund.

HARTFORD, Conn.--(BUSINESS WIRE)-- Virtus Artificial Intelligence & Technology Opportunities Fund (NYSE: AIO) previously announced the following monthly distribution on November 16, 2023:

Ticker

Amount of Distribution

Ex-Date

Record Date

Payable Date

AIO

$0.15

February 9, 2024

February 12, 2024

February 28, 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 provides this estimate of the sources of its distributions:

Distribution Estimates

February 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

$ 0.003

2.1%

$ 0.003

2.1%

Net Realized Short-Term Capital Gains

-

0.0%

-

0.0%

Net Realized Long-Term Capital Gains

-

0.0%

-

0.0%

Return of Capital (or other Capital Source)

0.147

97.9%

0.147

97.9%

Total Distribution

$ 0.150

100.0%

$ 0.150

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.

January 31, 2024

 

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

12.32%

Annualized Current Distribution Rate (3)

8.73%

Fiscal YTD Cumulative Total Return on NAV (4)

13.56%

Fiscal YTD Cumulative Distribution Rate (5)

8.73%

(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 was the amount of the monthly distribution announced by Virtus Artificial Intelligence & Technology Opportunities Fund (AIO)?

Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) announced a monthly distribution of $0.15 per share.

When is the payable date for the monthly distribution announced by Virtus Artificial Intelligence & Technology Opportunities Fund (AIO)?

The payable date for the monthly distribution announced by Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) is February 28, 2024.

How does Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) maintain its distribution level?

Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) maintains its distribution level by paying from net investment income, realized capital gains, or a combination thereof. If income falls short, shareholder's capital may be returned.

Virtus Artificial Intelligence & Technology Opportunities Fund

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