Virtus Artificial Intelligence & Technology Opportunities Fund Discloses Sources of Distribution – Section 19(a) Notice
Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) announced a monthly distribution of $0.15 per share on March 1, 2024. The distribution will be paid on March 28, 2024, with an ex-date of March 8, 2024. The Fund aims to maintain a consistent distribution level sourced from net investment income and realized capital gains. Shareholders should be aware that any shortfall in income and gains may result in a return of capital.
Examining the distribution announcement by Virtus AI & Technology Opportunities Fund, it is pertinent to assess the sustainability of the $0.15 per share distribution. The distribution policy implies a potential return of capital if net investment income and realized capital gains are insufficient to cover the distribution amount. This scenario could lead to a gradual depletion of the fund's asset base over time, which might be a red flag for investors seeking long-term capital growth.
Furthermore, the fund's performance should be evaluated in the context of the overall market conditions, especially within the technology sector, which can be volatile. Investors would benefit from understanding the fund's portfolio diversification and how it mitigates sector-specific risks. The reliance on realized capital gains for distributions in a fluctuating market could introduce additional risk to the fund's ability to maintain its distribution levels consistently.
The announcement of a consistent distribution level by the fund is an attractive feature for income-focused investors. However, it's essential to analyze the fund's historical payout ratios and compare them with industry averages. A payout ratio that is too high could signal that the fund is over-distributing, which might not be sustainable in the long run. Market sentiment towards such funds can be influenced by their distribution policies and any changes or perceived risks in the ability to maintain distributions can impact the fund's market price.
Additionally, the fund's strategy in artificial intelligence and technology sectors should be scrutinized for alignment with current market trends and future growth areas. As these sectors are rapidly evolving, the fund's adaptability and management's expertise in selecting high-potential investments are critical for maintaining investor confidence and justifying the distribution levels.
03/19/2024 - 04:25 PM
HARTFORD, Conn. --(BUSINESS WIRE)--
Virtus Artificial Intelligence & Technology Opportunities Fund (NYSE: AIO) previously announced the following monthly distribution on March 1, 2024:
Ticker
Amount of Distribution
Ex-Date
Record Date
Payable Date
AIO
$0.15
March 8, 2024
March 11, 2024
March 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
March 2024 (MTD)
Fiscal Year-to-Date
(1)
(Sources)
Per Share
Amount
Percentage
Per Share
Percentage
of Current
Net Investment Income
$ -
0.0%
$ 0.00 3
1.0%
Net Realized Short-Term Capital Gains
0.150
100.0%
0.150
50.0%
Net Realized Long-Term Capital Gains
-
0.0%
-
0.0%
Return of Capital (or other Capital Source)
-
0.0%
0.147
49.0%
Total Distribution
$ 0.15 0
100.0%
$ 0.30 0
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.
February 29, 2024
Average Annual Total Return on NAV for the 5-year period (2)
13.32%
Annualized Current Distribution Rate (3)
8.38%
Fiscal YTD Cumulative Total Return on NAV (4)
4.90%
Fiscal YTD Cumulative Distribution Rate (5)
0.70%
(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 .
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For Further Information:
closedendfunds@virtus.com
Source: Virtus Artificial Intelligence & Technology Opportunities Fund
The ticker symbol for Virtus Artificial Intelligence & Technology Opportunities Fund is AIO.
The monthly distribution was announced on March 1, 2024, by AIO.
The monthly distribution per share for AIO is $0.15.
The payable date for the distribution by AIO is March 28, 2024.
AIO sources its distribution from net investment income and realized capital gains.
If AIO's income and gains are insufficient, the shortfall will be distributed from the Fund's assets, constituting a return of capital.
