Virtus Seix Senior Loan ETF (SEIX US) – Portfolio Construction Methodology

The investment strategy governing the actively managed Virtus Seix Senior Loan ETF emphasizes current income by investing ≥80% of assets in first- and second-lien senior floating-rate loans, with an ability to hold junior debt and below-investment-grade bonds when consistent with mandate. Selection is bottom-up and credit-driven, focusing on loans—often covenant-lite—made by banks to U.S. issuers, with up to 20% of assets permitted in non-U.S. borrowers; positions are U.S.-dollar denominated. The portfolio is non-diversified and may trade actively; derivatives (e.g., swaps, futures, options) can be used to gain, hedge, or fine-tune exposures, and restricted securities (Rule 144A) may be purchased to access primary market liquidity. Revolving loan commitments are capped at 10% of total assets, with daily maintenance of high-quality liquid assets to cover obligations. Sell and trim decisions reflect credit deterioration, relative value, documentation changes, and liquidity considerations.

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