Virtus Diversified Income Fund: Strong Returns, Caution Ahead

The Virtus Diversified Income & Convertible Fund (ACV) has delivered strong returns since a prior write-up, boosted by a narrowing discount to net asset value. The analyst behind that call now sees more reason for caution.

Nick Ackerman, writing on Seeking Alpha, said the fund's performance has been helped by the discount compression. He cautioned that the discount could widen again, and the fund's convertible bond holdings face interest rate and credit risk. The fund's objective is to provide diversified income through convertible securities and other fixed-income instruments.