Virtus WMC International Dividend ETF (VWID US) – Portfolio Construction Methodology

The investment philosophy driving the actively managed Virtus WMC International Dividend ETF seeks capital appreciation, with dividend income as a secondary objective, by owning a diversified portfolio of dividend-paying equities issued by companies domiciled outside the United States. Within a broad ex-U.S. equity universe, the sub-adviser applies a systematic process combining quantitative and qualitative analysis to identify stocks with attractive forecast dividend yields and sustainable payout profiles, using forward-looking yield estimates where possible. Portfolio construction targets a higher dividend yield while managing risk through diversification across industries and countries and by controlling position-level and regional concentration. The portfolio holds a targeted subset of liquid names from the eligible universe and may access exposure through common and preferred stock, depositary receipts and listed real estate vehicles. Rebalancing reflects changes in dividend forecasts, fundamentals, risk estimates and valuation, and derivatives may be employed for efficient implementation and currency risk management.

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