Virtus AllianzGI Diversifiedomenvertible Fund (Virtus AllianzGI Diversifiedomenvertible Fund) Predictability Rank

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What is Virtus AllianzGI Diversifiedomenvertible Fund Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Virtus AllianzGI Diversifiedomenvertible Fund Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Virtus AllianzGI Diversifiedomenvertible Fund (Virtus AllianzGI Diversifiedomenvertible Fund) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Virtus AllianzGI Diversified Income & Convertible Fund (NYSE:ACV) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

101 Munson Street, Greenfield, MA, USA, 01301

Website

https://www.virtus.com

Virtus AllianzGI Diversified Income & Convertible Fund is a diversified, closed-end management investment company. The fund's investment objective is to provide total return through a combination of current income and capital appreciation while seeking to provide downside protection against capital loss. It seeks to achieve its investment objective by investing in a combination of convertible securities, debt and other income-producing instruments and common stocks and other equity securities.

Executives

Mcdaniel Connie D	director	C/O VIRTUS INVESTMENT PARTNERS, INC., ONE FINANCIAL PLAZA, 26TH FL., HARTFORD CT 06103
Geraldine M Mcnamara	director	150 EAST 44TH ST, APT 35G, NEW YORK NY 10017
Voya Investment Management Co	other: Subadviser to the issuer	10 STATE HOUSE SQUARE, SH12, HARTFORD CT 06103-3602
Christine Hurtsellers	other: CEO - Subadviser to the issuer	230 PARK AVENUE, NEW YORK NY 10169
Vincent J Costa	other: CIO-Subadviser to the issuer	800 SCUDDERS MILL ROAD, PLAINSBORO NJ 08536
Paul Zemsky	other: CIO-Subadviser to the issuer	230 PARK AVENUE, NEW YORK NY 10169
Deborah A Decotis	director	1633 BROADWAY, NEW YORK NY 10019
David J. Oberto	officer: Portfolio Manager	1633 BROADWAY, NEW YORK NY 10019
R Keith Walton	director	100 PEARL STREET, HARTFORD CT 06103
Brian T Zino	director	100 PARK AVENUE, NEW YORK NY 10017
George R Aylward	director, officer: President and CEO	C/O VIRTUS INVESTMENT PARTNERS, INC., 100 PEARL STREET, HARTFORD CT 06103
Richard W Smirl	officer: EVP	C/O VIRTUS INVESTMENT PARTNERS, INC., ONE FINANCIAL PLAZA, HARTFORD CT 06103
Bradley William Patrick Iii	officer: EVP, CFO and Treasurer	C/O VIRTUS INVESTMENT PARTNERS, INC., 56 PROSPECT STREET, HARTFORD CT 06115
Francis G Waltman	officer: EVP	C/O VIRTUS INVESTMENT PARTNERS, INC., 100 PEARL STREET, HARTFORD CT 06103
Philip R Mcloughlin	director	800 SCUDDERS HILL ROAD, PLAINSBORO NJ 08536