Virtus Tactical Allocation Fund modifies fixed-income strategy

By Toni Weeks

San Diego, Dec. 21 - The Virtus Tactical Allocation Fund has made modifications to its investment strategy and the fixed-income portion of its portfolio management team, according to a 497 filing with the Securities and Exchange Commission.

The subadviser will no longer seek to capitalize on measured interest rate opportunities on behalf of the fund, only on individual issues and sectors as well as trading opportunities that appear to offer the best value.

In addition, the fixed-income portion of the fund will now invest at least 80% of its assets in the following sectors:

• Securities issued or guaranteed by the U.S. government, its agencies, authorities or instrumentalities, including collateralized mortgage obligations, real estate mortgage investment conduits and other pass-through securities;

• Debt securities issued by foreign issuers, including foreign governments and their political subdivisions and issuers located in emerging market countries;

• Investment-grade securities or unrated securities that the subadviser determines are comparable quality and that the board of trustees approves of; and

• High yield-high risk fixed-income securities of U.S. issuers.

The fixed-income portion of the fund may invest in all or some of these sectors, the filing noted. Securities will be selected using a sector rotation approach.

Furthermore, the subadviser will manage the duration of the fixed-income portion of the fund using a duration-neutral strategy. Under normal circumstances, the average duration of the fixed-income portion of the fund will be maintained at a level similar to that of its benchmark, the Barclays Capital U.S. Aggregate Bond index.

The fund also announced that David L. Albrycht has been added as a portfolio manager to the fund. He joins David Dickerson and Carlton Neel.

Albrycht is a portfolio manager and chief investment officer - multi-sector fixed-income strategies at Newfleet. Previously, he was executive managing director from 2008 to 2011 and vice president from 2005 to 2008 of fixed income at Goodwin Capital Advisers, Inc. He managed fixed-income portfolios for Goodwin affiliates since 1991.

The fund's adviser is Hartford-based Virtus Investment Advisers, Inc.

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