Virtus Newfleet Short Duration High Yield Bond ETF

Virtus Newfleet Short Duration High Yield Bond ETF (VSHY) is an actively managed fund of junk bonds, which are bonds rated below investment grade. It aims to keep duration, a gauge of interest-rate sensitivity, at one to three years. It pays income monthly, with a trailing 12-month yield of 6.32% as of October 27, 2026. Its 0.39% expense ratio is above the 0.35% average for similar funds and far above SPHY's 0.05%.

• Over the year to Oct 27, 2026, VSHY returned +3.1%, 3rd of 8 among similar funds.
• Its worst full calendar year was 2025 (+6.9%); its best was 2024 (+8.0%).
• The deepest fall in its price history was 4.6% (Feb 28, 2025 to Apr 8, 2025), recovered by May 20, 2025.

As of Jul 31, 2026, the fund held 200 securities; the ten largest made up 11.33% of assets.

The bonds mature in 5.4 years on average (weighted by size), with an average coupon of 6.72%.

• Over the three months to Jul 31, 2026, investors added a net $1.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.55%, +0.30%, +0.06%.

VSHY does not track an index. Its sub-adviser, Newfleet Asset Management, a division of Virtus Fixed Income Advisers, chooses the bonds. Under normal conditions it keeps at least 80% of net assets in high-yield bonds and other debt, and it tries to hold duration between one and three years. Duration measures how much bond prices react to interest-rate changes, so a shorter duration means smaller swings. Average maturity was 5.4 years as of July 31, 2026. Duration is shorter than maturity for bonds that pay interest along the way.

As of July 31, 2026, the fund held 200 positions, with 97.3% in corporate bonds. The top 10 made up 11.33% of assets. The largest were bonds from Blue Owl Credit Income Corp., Sunoco and Alliance Resource Operating Partners. The prospectus noted an energy focus as of July 31, 2025, and energy issuers such as Hilcorp and Buckeye Partners appear in the top 10. Most of the biggest holdings are Rule 144A bonds. These are issued privately to large institutions and can be harder to trade.

The prospectus also permits floating-rate bank loans, whose interest rates reset with market rates. It also allows emerging-market debt, other high-yield ETFs and derivatives such as options, futures and swaps. The July 31, 2026 holdings report showed no derivatives or other funds. Portfolio turnover of 71% points to frequent trading.

• VSHY charges 0.39% a year, versus an average of 0.35% for the similar funds below (4th of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $40 in the first year and $493 over 10 years (assuming a 5% annual return).

It pays monthly from a portfolio of short-duration junk bonds, with a trailing 12-month yield of 6.32% as of October 27, 2026, but carries more credit risk than investment-grade bond funds.

VSHY could add monthly income: its trailing 12-month yield was 6.32% as of October 27, 2026. The trade-off is credit risk. The fund launched in December 2016, so it has no record from the 2008 crisis. It gained 5.4% for 2020 as a whole. It lost 10.13% in 2022, its worst calendar year, including a 10.1% drop in the quarter ending June 30, 2022. It rebounded 12.53% in 2023. Since late November 2023, its deepest fall was 4.6%, from February 28 to April 8, 2025, and it recovered by May 20, 2025. Anyone cashing out shares to cover spending in a year like 2022 would have locked in losses.

Its expense ratio is 0.39%, about $40 in the first year on $10,000 under the SEC's standard example. That is above the 0.35% average for similar funds. Past results don't predict future returns, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).