HARTFORD, Conn., Feb. 3, 2014 /PRNewswire/ -- Virtus Total Return Fund (NYSE: DCA) today announced that it will increase its quarterly distribution and implement other actions intended to enhance shareholder value, including the adoption of a level distribution plan and changes to its investment strategy. The fund is undertaking these actions to provide a more attractive distribution rate, increase investment flexibility, and continue efforts to address the fund's current discount to its net asset value (NAV).
Effective with the first quarter of 2014, the fund will increase its distribution by 67 percent to $0.10 per share from the current quarterly distribution of $0.06 per share. This is the second time the fund has increased its distribution in the past five months; in September 2013, the fund increased its distribution by 20 percent to $0.06 per share from the prior quarterly distribution of $0.05 per share. The increased distribution to $0.10 per share represents an annualized distribution rate of 10.2 percent based on the closing market price of $3.94 on January 31, 2014. The first quarter distribution is payable on April 21, 2014 to shareholders of record as of April 11, 2014 (ex-date April 9, 2014).
Concurrent with the increase in the distribution, the fund will adopt a level distribution plan and seek to maintain a consistent distribution level of $0.10 per share. Although the fund will seek to maintain a consistent quarterly distribution level, the amount of future distributions is subject to change.The fund also announced that it intends to implement an options overlay strategy that will include purchasing and selling puts and calls with the objective of generating additional income from premiums, while limiting potential losses.