Summary

• Virtus Seix Floating Rate High Income Fund that we sub-advise returned 0.39%, bettering its benchmark, the S&P UBS Leveraged Loan Index, which returned -0.47% in 1Q26.
• The bank loan market entered 2026 supported by a constructive backdrop, with spreads beginning the year at a relatively attractive level of +446 basis points to the 3-year takeout.
• Performance during the first quarter reflected the more cautious tone. Bank loans posted a modest decline of -0.47%, driven primarily by widening spreads rather than deteriorating fundamentals.

Market Review

The bank loan market entered 2026 supported by a constructive backdrop, with spreads beginning the year at a relatively attractive level of +446 basis points (BPs) to the 3-year takeout. Positive momentum carried into mid-January as spreads tightened