NCV: 11% Yield, 9% Discount On Convertibles
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The Virtus Convertible & Income Fund (NCV) offers a high yield of 11% and trades at a 9.45% discount to NAV. However, it has a high expense ratio of 3.41%, uses 35% leverage, and has seen a significant dividend decrease with 2024 distributions being 100% Return of Capital. The fund's performance has lagged, especially in 2022, with a -34% price return.
December 13, 2024 | 2:30 pm
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Virtus Convertible & Income Fund (NCV) offers an 11% yield and trades at a 9.45% discount to NAV. However, it has a high expense ratio, uses leverage, and has seen a dividend decrease.
The high expense ratio and use of leverage are concerning for investors, especially with the significant dividend decrease and 100% Return of Capital for 2024. The fund's poor performance in 2022 and current discount to NAV may deter investors, leading to potential short-term price decline.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100