Virtus Seix Floating Rate High Income Fund: Navigating Market Fluctuations and Outperforming Benchmarks in Q1 2026

The Virtus Seix Floating Rate High Income Fund, managed by our team, demonstrated commendable performance in the first quarter of 2026, registering a return of 0.39%. This outcome favorably contrasted with its benchmark, the S&P UBS Leveraged Loan Index, which experienced a decrease of -0.47% over the identical timeframe. The period was marked by a nuanced market environment, where the fund's strategic positioning played a crucial role in its outperformance.

Entering 2026, the leveraged loan market presented an optimistic outlook, with spreads at an appealing level of +446 basis points relative to the 3-year takeout. This positive momentum initially fueled market activity, leading to tighter spreads into mid-January. However, the subsequent weeks of the first quarter revealed a more cautious investment climate, primarily influenced by shifting market sentiments rather than a deterioration in fundamental economic indicators. This shift led to a modest dip in bank loan performance, predominantly due to spread widening.

Our fund's ability to navigate these market dynamics and deliver positive returns highlights the effectiveness of our investment philosophy. By actively managing the portfolio and adapting to evolving market conditions, we aim to capitalize on opportunities while mitigating potential risks. This proactive approach is fundamental to our commitment to generating superior outcomes for our investors, emphasizing stability and growth even amidst broader market caution.