(a) The Report to Shareholders is attached herewith.

ETFis Series Trust I

 

INFRACAP REIT PREFERRED ETF

VIRTUS INFRACAP U.S. PREFERRED STOCK ETF

VIRTUS LIFESCI BIOTECH CLINICAL TRIALS ETF

VIRTUS LIFESCI BIOTECH PRODUCTS ETF

VIRTUS NEWFLEET MULTI-SECTOR BOND ETF

VIRTUS PRIVATE CREDIT STRATEGY ETF

VIRTUS REAL ASSET INCOME ETF

Virtus WMC International Dividend ETF

INFRACAP MLP ETF

ANNUAL REPORT
October 31, 2023

Table of Contents

Page (s)

Shareholder Letter

1

Management’s Discussion of Fund Performance

2

Portfolio Composition

27

Shareholder Expense Examples

30

InfraCap REIT Preferred ETF

Virtus InfraCap U.S. Preferred Stock ETF

Virtus LifeSci Biotech Clinical Trials ETF

Virtus LifeSci Biotech Products ETF

Virtus Newfleet Multi-Sector Bond ETF

Virtus Private Credit Strategy ETF

Virtus Real Asset Income ETF

Virtus WMC International Dividend ETF

Schedules of Investments

31

Statements of Assets and Liabilities

55

Statements of Operations

57

Statements of Changes in Net Assets

59

Statement of Cash Flows

63

Financial Highlights

64

Notes to Financial Statements

72

InfraCap MLP ETF

Schedule of Investments

83

Statement of Assets and Liabilities

86

Statement of Operations

87

Statement of Changes in Net Assets

88

Statement of Cash Flows

89

Financial Highlights

90

Notes to Financial Statements

91

Reports of Independent Registered Public Accounting Firm

99

Statement Regarding Liquidity Risk Management Program

101

Trustees and Officers of the Trust

102

Supplemental Information

105

1

Shareholder Letter (unaudited)

December 2023

Dear Shareholder:

On behalf of Virtus ETF Advisers LLC (the “Adviser”), I am pleased to present the shareholder report for the ETFis Series Trust I (the “Trust”) for the annual fiscal period ended October 31, 2023.

The Adviser is part of Virtus Investment Partners, a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors.

The report provides financial statements and portfolio information for the following funds within the Trust:

InfraCap REIT Preferred ETF (PFFR)

Virtus InfraCap U.S. Preferred Stock ETF (PFFA)

Virtus LifeSci Biotech Clinical Trials ETF (BBC)

Virtus LifeSci Biotech Products ETF (BBP)

Virtus Newfleet Multi-Sector Bond ETF (NFLT)

Virtus Private Credit Strategy ETF (VPC)

Virtus Real Asset Income ETF (VRAI)

Virtus WMC International Dividend ETF (VWID)

InfraCap MLP ETF (AMZA)

On behalf of the Adviser and our fund Sub-Advisers, thank you for your investment. If you have questions, please contact your financial adviser, or call 1-888-383-0553. For more information about the funds and the other ETFs we offer, we invite you to visit our website, www.virtusetfs.com.

Sincerely,

William Smalley

President

ETFis Series Trust I

This material must be accompanied or preceded by the prospectus.

2

Management’s Discussion of Fund Performance (unaudited)

October 31, 2023

InfraCap REIT Preferred ETF (PFFR)

Management’s Discussion of Operations

Overview

The InfraCap REIT Preferred ETF (the “Fund”) seeks investment results that correspond, before fees and expenses, to the price and yield performance of an index composed of preferred shares listed on U.S. Exchanges and issued by Real Estate Investment Trusts (“REITs”), as represented by the Indxx REIT Preferred Stock Index (the “Index”). Although the Fund generally intends to replicate the component securities of the Index, the Fund may utilize a representative sampling strategy when a replication strategy might be detrimental to shareholders. The Fund may invest in a representative sample of securities included in the Index that collectively has a profile similar to the Index. If the Fund uses a representative sampling strategy, the Fund may or may not own all of the securities that are included in the Index.

Market Update

In the fiscal year ended October 31, 2023, the Fund’s total return based on market price was 8.59%, while the Index returned 8.50% during the same period. During the period, office and real estate usage increased as business activity increased from the prior periods which were impacted by the Covid-19 pandemic. Fixed and equity income investments were subject to volatility as many investors allocated to government issued bonds or money market funds at higher-than-average interest rates. Select segments of the US stock market performed well over the period such as emerging technologies (i.e., Artificial Intelligence stocks such as Nvidia) and large cap technology stocks. Global economies continued to reopen and reduce social distancing measures. The banking crisis in early 2023 caused equities and fixed income securities to sell off as investors reduce margin or risk in their portfolio. We noticed dislocations across preferred instrument types and parity preferred issues of the same issuer. Rates on 10-year and 30-year U.S. Treasury bonds increased, which put pressure on lower yielding income investments. However, near the end of the period, positive employment and economic data supported the viewpoint that the Federal Reserve would potentially pause its rate hike cycle and could cut rates in 2024.

Two of the strongest contributors to the Fund during the period were preferred securities of Hersha Hospitality Trust (“Hersha”) and DigitalBridge Group Inc. (“Digital”). Hersha is a self-advised real estate investment trust in the hospitality sector, which owns and operates luxury and lifestyle hotels in urban gateway and regional resort markets. Hersha’s 24 hotels are located in New York, Washington, DC, Boston, Philadelphia, South Florida, and California. Digital is a global REIT that owns, operates and invests across the full spectrum of digital infrastructure and real estate including cell towers, data centers, fiber, small cells and edge infrastructure. During the period, Hersha D and Digital I were up 44.68% and 19.18%, respectively.

Two of the Fund’s detractors during the period were preferred securities of Hudson Pacific Properties Inc (“Hudson”) and Global Net Lease Inc (“Global”). Hudson is a real estate investment trust with a focus on serving technology and media clients through office buildings, sound stages, and undeveloped rights to commercial property. Global is a publicly-traded real estate investment trust focused on acquiring a global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States and Western and Northern Europe. Global’s D, and Hudson C, were down 13.88% and 9.55%, respectively.

Preferred shares are fixed income securities, and prices are influenced by changes in long-term interest rates. During the fiscal year, the yield on the 30-year U.S. Treasury bond continued to rise which we believe is a result of a strong US economy and labor market.

Dividend Payment

In the fiscal year ended October 31, 2023, the Fund made monthly dividend payments in the amount of $0.12 per share. While the Fund plans to continue paying monthly dividends, dividends are not guaranteed. The Fund seeks to maintain relatively stable monthly distributions although the amount of income earned by the Fund varies from period to period. To achieve this objective, the Fund may distribute less than the full amount of income earned during a specific period, preserving income for distribution in future periods. Consequently, the amount of income distributed in any one period may be more or less than the actual amount of income earned in that period.

Outlook

We believe REIT preferred securities continue to offer an attractive way to access current market dislocations. Despite inflation concerns and pressures on select REIT sub-sectors, we believe investors can benefit from market rotations by investing in REIT preferreds. Given uncertainties in commercial REITs, particularly in specific subsegments, some investors may understandably exhibit hesitancy towards common equity investments. Investor hesitancy has spread to the preferred equity units as well, with certain REIT preferreds experiencing selloffs that we believe are not warranted. In our view, this presents an opportunity for investors to allocate to the preferred equity in REITs and take advantage of market dislocations. As interest rates rise from historically low levels, investors may still have difficulty finding higher yielding opportunities. Thus, we believe preferred securities will continue to offer attractive yields and investors can still access REIT preferreds at discounted prices.

3

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

InfraCap REIT Preferred ETF (continued)

Credit Rating

Issue

Issuer

A

0.00

%

9.69

%

A-

9.79

%

0.00

%

BBB+

0.00

%

6.05

%

BBB

5.99

%

9.92

%

BBB-

6.84

%

9.47

%

BB+

3.34

%

4.74

%

BB

8.52

%

0.00

%

BB-

3.96

%

0.89

%

B+

0.00

%

0.87

%

B

0.00

%

4.31

%

B-

0.00

%

1.71

%

NR

61.55

%

52.36

%

Credit quality ratings on underlying securities of the Fund are received from S&P, Moody’s, and Fitch and converted to the equivalent S&P major rating category. This breakdown is provided by Infrastructure Capital Advisors, LLC and takes the median rating of the three agencies when all three agencies rate a security, the lower of the two ratings if only two agencies rate a security, and one rating if that is all that is provided. Unrated securities do not necessarily indicate low quality. A credit rating below investment-grade is represented by a rating of BB and below. Ratings and portfolio credit quality may change over time. This discussion includes information based on data and calculations sourced from Bloomberg and index constituents. While we believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information.

The preceding information is the opinion of the investment adviser and sub-adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser and sub-adviser make no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

Indxx REIT
Preferred
Stock Index
1

1 Year

8.84

%

8.59

%

8.50

%

5 Year

(0.42

)%

(0.46

)%

0.38

%

Since Inception2

0.24

%

0.21

%

1.03

%

 

1The Indxx REIT Preferred Stock Index is a market cap weighted index designed to provide diversified exposure to high yielding liquid preferred securities issued by Real Estate Investment Trusts listed in the U.S. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2February 7, 2017.

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

4

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

InfraCap REIT Preferred ETF (continued)

Preferred Stocks: Preferred stocks may decline in price, fail to pay dividends, or be illiquid.

Real Estate Investments: The Fund may be negatively affected by factors specific to the real estate market, including interest rates, leverage, property, and management.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Interest Rate Risk: The value of preferred securities will generally vary inversely with the direction of prevailing interest rates such that, generally, when interest rates rise, the value of preferred securities can be expected to decline.

Non-Diversified: The Fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the Fund’s assets.

Passive Strategy/Index Risk: A passive investment strategy seeking to track the performance of the Underlying Index may result in the fund holding securities regardless of market conditions or their current or projected performance. This could cause the Fund’s returns to be lower than if the Fund employed an active strategy.

Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index.

Market Volatility: Securities in the Fund may go up or down in response to the prospects of individual companies and general economic conditions. Price changes may be short or long term.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

5

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus InfraCap U.S. Preferred Stock ETF (PFFA)

Management’s Discussion of Operations

Overview

Virtus InfraCap U.S. Preferred Stock ETF (the “Fund”) seeks to provide current income and, secondarily, capital appreciation through an actively-managed portfolio of high quality U.S. preferred stocks. Callable preferred securities exhibiting a low or negative yield to call are generally excluded from the portfolio. The Fund may utilize options strategies and modest leverage to seek to enhance income and total return.

Market Update

In the twelve months ending October 31, 2023, the Fund’s total return based on market price was 8.96%. The Fund’s benchmark index, the S&P U.S. Preferred Stock Index, returned 1.60% during the same period.

We believed that active managers could seek total return and high current income over the period by considering instances when: (1) floating preferreds trade in-line with their fixed rate preferred parity issues, (2) fixed-to-floating preferreds are converting in the near future at higher coupon rates, and (3) management may be encouraged to call these floating preferreds at par value when interest rates are high.

For the fiscal year ended October 31, 2023, the Federal Reserve aggressively increased interest rates, pressures from inflation remained uncertain. While fixed and equity income investments were subject to volatility as many investors allocated to government issued bonds or money market funds at higher-than-average interest rates. We noticed dislocations across preferred instrument types and parity preferred issues of the same issuer and looked to position the portfolio to benefit from these dislocations. Rates on 10-year and 30-year U.S. Treasury bonds increased, which put pressure on lower yielding income investments. However, near the end of the period, positive employment and economic data supported the viewpoint that the Federal Reserve would potentially pause its rate hike cycle and could cut rates in 2024.

During the period, two of the Fund’s strongest contributors during the period were preferred securities of SCE Trust III, Series H (“SCE H”) and NuStar Energy LP (“NS”). Over the period SCE H continued to benefit from California’s investment in cleaner forms of energy, led by California’s economy-wide electrification goals. NuStar Energy is one of the largest independent liquids terminal and pipeline operators in the United States. NuStar continued to optimize their business expenses and benefited from refined product demand.

SCE H preferred stock benefited as its dividend rate appears that it will likely expand after its scheduled fixed-to-floating conversion in March of 2024. At that point, these preferred shares will also become callable at $25.00 per share. NS redeemed the Series D preferred units (NS PRB) in September 2023, which resulted in Fitch Ratings providing NS an upgraded credit rating by one notch to ‘BB’ and S&P Global upgrading the outlook for NS from ‘stable’ to ‘positive’. During the period, SCE H and NS PRB were up 36.47% and 32.32%, respectively.

Two of the Fund’s weaker contributors during the period were preferred securities of Telephone and Data Systems Inc (“Telephone”) and Global Net Lease, Inc. (“Global”). Telephone is a Fortune 1000 company that provides wireless products and services; cable and wireline broadband, TV and voice services; and hosted and managed services to approximately 6 million customers in the United States. Global is a publicly traded real estate investment trust focused on acquiring a global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe. Telephone’s TDS V, and Global’s GNL A were down, 18.78% and 14.87%, respectively.

The Fund’s portfolio composition emphasizes issuers that own long-lived assets that generate free cash flow. Overweight in REITs, Pipelines and Industrials companies positively contributed to Fund performance during the period. In addition, significant underweighting in financial companies, relative to the Fund’s benchmark, positively contributed to the Fund’s outperformance during the period.

Approximately 51% of the Fund’s total assets were floating or fixed-to-floating rate preferred stocks at fiscal year-end. This compares to about 32.8% for the benchmark index at fiscal year-end. These securities have a fixed rate coupon at issue but become a floating rate security after a specified period of time, typically five or ten years after issuance. This structure provides investors with some protection from a rising interest rate environment while offering a higher current yield than that available on securities with coupon rates that float currently. During the period, this overweighting positively contributed to Fund performance.

6

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus InfraCap U.S. Preferred Stock ETF (continued)

Distribution Payments

In the fiscal year ended October 31, 2023, the Fund made distribution payments in the amount of $0.1625 per share in November and December of 2022, while paying monthly distribution payments in 2023 of $0.1650 per share for the remainder the fiscal year.

The Fund’s distribution policy is reviewed on an annual basis with the expectation that the announced distribution rate can be sustained for a period of 12 – 24 months. The Fund’s targeted distribution is expected to be covered by its investment company taxable income (which includes ordinary income and long and short-term capital gains less expenses). For the purpose of calculating income available for distribution, some cash payments from REITs or MLPs treated as Return of Capital for tax or GAAP purposes may be included. Expenses include an 80 basis point advisory fee, leverage costs, and other miscellaneous fees.

The Fund seeks to maintain relatively stable monthly distributions although the amount of income earned by the Fund varies from period-to-period. To achieve this objective, the Fund may distribute less than the full amount of income earned during a specific period to preserve income for distribution in future periods. Consequently, the amount of income distributed in any one period may be more or less than the actual amount of income earned in that period.

The Fund’s current 30-day SEC yield was 11.48% as of fiscal year end. The Fund’s distribution rate as of fiscal year end was 10.50%.

Use of Leverage

The Fund may use leverage as described in its prospectus. The Fund’s use of leverage positively contributed to Fund performance during the period.

The Fund’s cost of borrowing increased during the fiscal year. The Fund entered into Lending Agreements (each, an “Agreement”) with commercial banks (the “Banks”) that allow the Fund to borrow cash from the Banks. Borrowings under the Agreements are collateralized by investments in the Funds. If a Fund defaults with respect to any of its obligations under the Agreement, the Banks may foreclose on assets of the Fund and/or the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the Agreement, necessitating the sale of securities at potentially inopportune times. Interest is charged at the OBFR (Overnight Bank Funding Rate) plus an additional percentage rate on the amount borrowed. Each Agreement has an on-demand commitment term. As of October 31, 2023, the current cost is daily OBFR plus 1.10%, which resets daily.

Use of Options

As described in the prospectus, the Fund may utilize options strategies to seek to boost the amount of income available to distribute to shareholders. The primary activity is covered call writing, which is focused on a small number of common stocks and ETFs owned by the Fund. However, due to limited use of options during the fiscal year, the option activity did not impact on the Fund’s performance.

Outlook

We believe that there continue to be opportunities for active managers to select preferred stocks that are inefficiently priced. By managing: instrument type (i.e., fixed or fixed-to-floating or floating), security duration, credit considerations at the company or security level, sector allocations, corporate actions, liquidity, and concentrations, we seek to optimize the portfolio over time. We place special emphasis on maximizing the Fund’s yield-to-call and believe that avoiding issues that are callable and trading at prices above the call price will assist in achieving that result. We believe many preferred stock investors, including passive funds, may inadvertently ignore the risk of owning issues with a negative yield-to-call.

We generally focus on adding fixed-to-floating exposure to seek total return and high current income by arbitraging gaps that emerge when: (1) floating preferreds trade in-line with their fixed rate preferred parity issues, (2) fixed-to-floating preferreds are converting in the near future at higher coupon rates, and (3) management is encouraged to call these floating preferreds at par value when interest rates are high.

We expect the market’s uncertainty surrounding the duration and magnitude of rising inflation to be a continued leading theme for the forthcoming fiscal year. We have seen the divergence of performance based on credit ratings as lower-rated, higher-yielding credits have outperformed on correlation to equity markets and higher-rated, lower-yielding credits underperformed on correlation to treasury yields.

7

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus InfraCap U.S. Preferred Stock ETF (continued)

We believe that high-yield preferred stocks will continue to trade higher under these market conditions, and we look to opportunistically add new issues to maintain an above-average yield-to-call versus the benchmark.

The preceding information is the opinion of the investment adviser and sub-adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser and sub-adviser make no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized. This discussion includes information based on data and calculations sourced from Bloomberg and index constituents. While we believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

S&P U.S.
Preferred
Stock Index
1

1 Year

9.15

%

8.96

%

1.60

%

5 Year

3.80

%

3.73

%

1.26

%

Since Inception2

 3.66

%

 3.59

%

 1.24

%

 

1The S&P U.S. Preferred Stock Index measures performance of the U.S. preferred stock market. Preferred stocks pay dividends at a specified rate and receive preference over common stocks in terms of dividend payments and liquidation of assets. The index is calculated on a total return basis with dividend reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2May 15, 2018.

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Preferred Stocks: Preferred stocks may decline in price, fail to pay dividends, or be illiquid.

Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.

Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.

Non-Diversified: The Fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the Fund’s assets.

Sector Focus: To the extent the Fund has significant exposure to one or more sectors, this may make the Fund particularly susceptible to adverse economic, political or regulatory occurrences and changes affecting companies in those sectors.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

8

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus InfraCap U.S. Preferred Stock ETF (continued)

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

9

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus LifeSci Biotech Clinical Trials ETF (BBC)

The Virtus LifeSci Biotech Clinical Trials ETF (the “Fund”) seeks to track the investment results, before fees and expenses, of the LifeSci Biotechnology Clinical Trials Index (the Index), which is composed of U.S.-listed biotechnology stocks with a lead drug in the clinical trial stage of development.

For the fiscal year ended October 31, 2023, the Fund’s total return based on market price was -30.92%. The Fund’s total return based on net asset value was -31.01%. The Index returned -31.81% during the same period.

A top contributor to the Fund’s performance for the fiscal year was Madrigal Pharmaceuticals, Inc. (“Madrigal”), which engages in the development and commercialization of innovative therapeutic candidates for the treatment of cardiovascular, metabolic, and liver diseases. Madrigal’s lead product, MGL-3196, is used for the treatment of non-alcoholic steatohepatitis and familial hypercholesterolemia.

Prometheus Biosciences was acquired by Merck during the period for $200 per share in cash, which contributed to the stock’s strong performance. The transaction was announced on April 16, 2023 and completed on June 20, 2023. The acquisition gives Merck access to therapeutics and diagnostics for inflammatory bowel diseases.

Another top performer was Structure Therapeutics, Inc. (“Structure”), a clinical stage global biopharmaceutical company. Structure is engaged in developing novel oral therapeutics to treat a wide range of chronic diseases with unmet medical needs.

Positive contributors for the 12-month period also included Immunovant, Inc. and TG Therapeutics, Inc.

A top detractor from Fund performance for the fiscal year was Fate Therapeutics, Inc. which engages in the development of programmed cellular immunotherapies for cancer and immune disorders. The company’s pipeline of products includes therapies to repair and regenerate body tissues with the help of stem cells.

Design Therapeutics, Inc. (“Design”) also underperformed during the period. Design operates as a biotechnology company that develops therapies for serious degenerative disorders. The company was created to design, develop and commercialize a novel class of small molecule therapeutic candidates (GeneTACs) that seek to directly address the underlying basis of genetic disease.

Seres Therapeutics, Inc. (“Seres”) detracted from Fund returns during the fiscal year. The company focuses on developing biological drugs, which are designed to restore health by repairing the function of a dysbiotic microbiome. Seres also conducts research on metabolic diseases.

Other top detractors for the 12 months included Amyris and PMV Pharmaceuticals, Inc. Amyris was sold during the reporting period.

The preceding information is the opinion of the investment adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

LifeSci
Biotechnology
Clinical Trials
Index
1

S&P 500®
Index
2

1 Year

(31.01

)%

(30.92

)%

(31.81

)%

(10.14

)%

5 Years

(7.85

)%

(7.84

)%

(7.68

)%

11.01

%

Since Inception3

 (3.55

)%

 (3.54

)%

 (3.23

)%

10.91

%

 

1 The LifeSci Biotechnology Clinical Trials Index is designed to track the performance of U.S.-listed biotechnology stocks with a lead drug in the clinical trial stage of development, typically a Phase 1, Phase 2 or Phase 3 trial, but prior to receiving marketing approval. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2 The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

3December 16, 2014.

10

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus LifeSci Biotech Clinical Trials ETF (continued)

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Biotechnology Industry Risk: The Fund’s assets will be concentrated in investments in the securities of issuers engaged primarily in the biotechnology industry. Companies within the biotechnology industry spend heavily on research and development, which may not necessarily lead to commercially successful products in the near or long term. In order to fund operations, these companies may require financing from the capital markets, which may not always be available on satisfactory terms or at all. The biotechnology industry is also subject to significant governmental regulation, and the need for governmental approvals, including, without limitation, FDA approval. The securities of biotechnology companies, especially those of smaller or newer companies, tend to be more volatile than those of companies with larger capitalizations or markets generally.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

11

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

​Virtus LifeSci Biotech Products ETF (BBP)

The Virtus LifeSci Biotech Products ETF (the “Fund”) seeks to track the investment results, before fees and expenses, of the LifeSci Biotechnology Products Index (the Index), which is composed of U.S.-listed biotechnology stocks with at least one drug therapy approved by the U.S. Food & Drug Administration (FDA) for marketing.

For the fiscal year ended October 31, 2023, the Fund’s total return based on market price was -0.14%. The Fund’s total return based on net asset value was -0.09%. The Index returned 0.78% for the same period.

Mergers & acquisitions (M&A) were a significant driver of the performance of mid- to large-cap biotechnology stocks during the fiscal year, while higher interest rates weighed on small- to mid-cap companies. A top performer for the Fund was ImmunoGen, Inc. (“ImmunoGen”), which develops anticancer therapeutics using its Targeted Antibody Payload (TAP) technology, and has expertise in monoclonal antibodies and tumor biology. ImmunoGen’s shares rose significantly after releasing top-line data from a Phase 3 confirmatory Mirasol trial of the drug, Elahere, for the treatment of ovarian cancer.

Provention Bio was acquired by Sanofi for $25 per share in a transaction that was announced on March 13, 2023, and completed on April 28, 2023. We believe the acquisition is a strategic fit for Sanofi at the intersection of the company’s growth in immune-mediated diseases and disease-modifying therapies in areas of high unmet need, along with its expertise in diabetes treatments.

Another top performer for the fiscal year was Axsome Therapeutics, Inc., which operates as a biopharmaceutical company and focuses on developing therapies for pain, neurological disorders, and other central nervous system conditions.

Other top contributors to the Fund’s performance included Bridgebio Pharma, Inc. and Reata Pharmaceuticals. Reata Pharmaceuticals was sold during the reporting period.

A detractor from Fund performance for the 12-month period was Enanta Pharmaceuticals, Inc., a biotechnology company that engages in the discovery and development of small molecule drugs for the treatment of viral infections and liver diseases.

The Fund’s position in Nektar Therapeutics was sold in the second quarter of 2023, after the company no longer met the market capitalization requirement to be included in the Index. Nektar is a research-based biopharmaceutical company that engages in discovering and developing medicines in areas of unmet medical need.

Travere Therapeutics, Inc. (“Travere”), a biopharmaceutical company, also detracted from Fund performance during the fiscal year. Travere engages in the identification, development, commercialization, and distribution of therapies to people living with rare diseases. We believe the Travere stock underperformed due to a failed Phase 3 study on kidney scarring as well as disappointing results from a late-stage trial for the company’s Filspari drug.

BioCryst Pharmaceuticals, Inc. and 2seventy bio, Inc. also detracted from performance during the fiscal year.

The preceding information is the opinion of the investment adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

LifeSci
Biotechnology
Products
Index
1

S&P 500®
Index
2

1 Year

(0.09

)%

(0.14

)%

0.78

%

10.14

%

5 Years

5.14

%

5.13

%

6.00

%

11.01

%

Since Inception3

7.46

%

7.45

%

8.31

%

10.91

%

 

1 The LifeSci Biotechnology Products Index is designed to track the performance of U.S.-listed biotechnology stocks with at least one drug therapy approved by the FDA for marketing. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2 The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

3December 16, 2014.

12

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus LifeSci Biotech Products ETF (continued)

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Biotechnology Industry Risk: The Fund’s assets will be concentrated in investments in the securities of issuers engaged primarily in the biotechnology industry. Companies within the biotechnology industry spend heavily on research and development, which may not necessarily lead to commercially successful products in the near or long term. In order to fund operations, these companies may require financing from the capital markets, which may not always be available on satisfactory terms or at all. The biotechnology industry is also subject to significant governmental regulation, and the need for governmental approvals, including, without limitation, FDA approval. The securities of biotechnology companies, especially those of smaller or newer companies, tend to be more volatile than those of companies with larger capitalizations or markets generally.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

13

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

​Virtus Newfleet Multi-Sector Bond ETF (NFLT)

The Virtus Newfleet Multi-Sector Bond ETF (the “Fund”) seeks to provide a high level of current income and, secondarily, capital appreciation.

How did the markets perform during the Fund’s fiscal year ended October 31, 2023?

As the end of 2023 approached, economic transitions were proceeding across the globe. China was struggling with a slowing economy amid calls for more stimulus, despite having ended its strict zero-COVID policies earlier in the year. Europe, too, was wrestling with a slowing economy and inflation that remained above official targets. In the meantime, the U.S. economy proved remarkably resilient – unlike other major world economies, it defied expectations of a slowdown, leading to a growing consensus that the Federal Reserve (the Fed) might be able to pull off the often-elusive soft landing. The main risk to this scenario remained the unpredictable cumulative effect of 18 months of monetary tightening on the economy. Because monetary policy works on the economy with a lag, it presents a challenge to central bankers who are trying to return inflation to target without the associated economic pain of higher interest rates.

During the 12 months ended October 31, 2023, the Fed raised its main policy interest rate by 2.25% in its continuing fight to tame inflation. This resulted in significant progress on headline inflation readings as supply chains healed, demand shifted from goods to services, and energy prices rebalanced. Core readings of inflation, however, remained stubbornly above targets at the end of the period. That said, market expectations held that most major global central banks were approaching the end of their interest rate increases. We believe evidence of this could be found in the Fed’s most recent summary of economic projections, which indicated one more rate increase. The Bank of England (BOE) paused its rate hikes during the period, while the European Central Bank (ECB) signaled a pause. However, market expectations of a quick reversal of tighter policy moderated, and the higher-for-longer narrative was taking hold by the end of the fiscal year. The Fed tamped down expectations of rapid rate cuts in 2024 and 2025, and the ECB and BOE remained committed to the inflation fight, which could lead to their rates staying elevated for longer as well. As the fiscal year came to an end, it was clear that there was still work to be done on the inflation front.

Despite the volatility during the fiscal year, financial market performance was resilient, with most risk assets outperforming U.S. Treasuries. The U.S. Treasury yield curve shifted higher during the period and remained inverted as of October 31, 2023. The 2-year Treasury yield increased 0.60%, the 5-year Treasury yield increased by 0.62%, the 10-year Treasury yield increased by 0.88%, and the 30-year Treasury yield moved 0.93% higher.

What factors affected the Fund’s performance during its fiscal year?

For the fiscal year ended October 31, 2023, the Fund’s total return based on market price was 4.70%. The Fund’s total return based on net asset value was 4.56%. For the same period, the Fund’s benchmark, the Bloomberg U.S. Aggregate Bond Index, returned 0.36%.

The Fund outperformed its benchmark for the fiscal year. The Fund’s underweight to U.S. Treasuries contributed to relative performance during the period. Allocation and positioning within corporate high yield had a positive impact on performance for the 12-month period. The allocations to emerging markets high yield and high yield bank loans, as well as issue selection within investment grade corporate bonds, also contributed to relative performance.

The Fund’s duration, or sensitivity to changes in interest rates, and yield curve positioning within U.S. Treasuries detracted from performance. The overweight to asset-backed securities detracted during the period, however selection within the sector was positive. Selection within emerging markets securities and high yield bank loans also had a negative impact on absolute performance during the period.

The preceding information is the opinion of the investment adviser and sub-adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

14

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus Newfleet Multi-Sector Bond ETF (continued)

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

Bloomberg
U.S. Aggregate
Bond Index
1

1 Year

4.56

%

4.70

%

0.36

%

5 Years

1.90

%

1.96

%

(0.06

)%

Since Inception2

2.52

%

2.54

%

0.43

%

 

1The Bloomberg U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2August 10, 2015.

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.

ABS/MBS: Changes in interest rates can cause both extension and prepayment risks for asset- and mortgage-backed securities. These securities are also subject to risks associated with the repayment of underlying collateral.

Bank Loans: Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and/or trade infrequently on the secondary market. Loans can carry significant credit and call risk, can be difficult to value and have longer settlement times than other investments, which can make loans relatively illiquid at times.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

15

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

​Virtus Newfleet Multi-Sector Bond ETF (continued)

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

16

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus Private Credit Strategy ETF (VPC)

The Virtus Private Credit Strategy ETF (the “Fund”) strives to deliver an alternative source of yield to traditional fixed income by focusing on the private credit market, particularly companies involved in lending to non-investment grade, small- to mid-sized U.S. companies.

The Fund seeks to track the investment results that correspond, before fees and expenses, of the Indxx Private Credit Index (the Index), which provides passive exposure to U.S.-listed instruments that emphasize private credit, including business development companies (BDCs) and closed-end funds (CEFs).

For the fiscal year ended October 31, 2023, the Fund’s total return based on market price was 11.38%. The Fund’s total return based on net asset value was 11.22%. The Index returned 11.95% for the same period.

One of the top contributors to Fund performance for the 12-month period was Nuveen Credit Strategies Income Fund (JQC), a closed-end management investment fund. The Fund invests in adjustable-rate loans, primarily secured senior loans and other debt instruments. JQC’s primary investment objective is high current income, and its secondary objective is total return.

Another top holding was New Mountain Finance Corp. (“New Mountain”), a traded BDC that invests in upper middle-market companies located in the U.S. New Mountain targets companies operating in the health care, software, and business services sectors. New Mountain’s portfolio is made up of senior secured first-lien and second-lien term loans and subordinated debt.

BlackRock Floating Rate Income Trust (BGT) also made a positive contribution to Fund performance. The investment objective of BGT is to provide a high level of current income. Its secondary objective is to seek the preservation of capital to the extent consistent with its primary objective.

Top detractors from Fund performance included BlackRock Income Trust, Inc. (BKT), a closed-end investment fund. Its investment objective is to provide total return through a combination of current income and capital appreciation. BKT seeks to achieve its investment objective by investing at least 65% of its assets in mortgage-backed securities. At least 80% of BKT’s assets are invested in securities that are issued or guaranteed by the U.S. government or one of its agencies or instrumentalities.

TriplePoint Venture Growth BDC Corp. (TPVG) also detracted from returns. TPVG is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. TPVG is focused on technology, life sciences, and other high growth industries backed by leading venture capital investors with established track records.

Another leading detractor was Prospect Capital Corp., an externally managed business development company that primarily provides senior debt and equity investments to companies operating in the lower middle market. The firm provides debt and equity financing for buyout, growth, development, and recapitalization. It acts as a co-investor and takes a controlling interest in the companies in its portfolio.

The preceding information is the opinion of the investment adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

Indxx
Private
Credit Index
1

1 Year

11.22

%

11.38

%

11.95

%

Since Inception2

5.48

%

5.48

%

6.25

%

 

1 The Indxx Private Credit Index is an index of listed business development companies (“BDCs”) and closed end funds (“CEFs”) with a private credit focus. The Index is designed to serve as a broad-based benchmark for long-only investments in private credit. The Index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2February 7, 2019.

17

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus Private Credit Strategy ETF (continued)

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Private Credit Funds: Private credit funds that invest in closed-end funds and business development companies bear the risk of these underlying assets, including liquidity, industry, currency, valuation and credit risks.

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Passive Strategy/Index Risk: A passive investment strategy seeking to track the performance of the Underlying Index may result in the fund holding securities regardless of market conditions or their current or projected performance. This could cause the Fund’s returns to be lower than if the Fund employed an active strategy.

Fund of Funds: Because the Fund can invest in other funds, it indirectly bears its proportionate share of the operating expenses and management fees of the underlying fund(s).

Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index.

Closed-End Funds: Closed-end funds may trade at a discount from their net asset values, which may affect whether the fund will realize gains or losses. They may also employ leverage, which may increase volatility.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

18

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus Private Credit Strategy ETF (continued)

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

19

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus Real Asset Income ETF (VRAI)

The Virtus Real Asset Income ETF (the “Fund”) aims to provide passive exposure to high income-producing real asset securities. The Fund seeks to track the investment results, before fees and expenses, of the Indxx Real Asset Income Index (the Index), which is composed of U.S.-listed securities with a history of dividend growth across three real asset categories:

real estate, including real estate development and real estate investment trusts (REITs);

natural resources, including oil, coal, precious metals, steel, agricultural commodities, and forest products; and

infrastructure, including electric utilities, telecommunications, transportation, and master limited partnerships (MLPs).

For the fiscal year ended October 31, 2023, the Fund’s total return based on market price was -2.32%. The Fund’s total return based on net asset value was -2.15%. The Index returned -2.25% during the same period.

The top contributors to Fund performance for the fiscal year included integrated energy companies, gold miners, and producers of base metals. One of the leading performers was DRDGOLD Ltd. (“DRD”), which engages in the business of retreatment of surface gold. DRD’s assets include underground mines and surface retreatment operation and exploration activities in South Africa.

Gold Fields Ltd. (“Gold Fields”), a gold mining company, also made a positive contribution to Fund returns. The company engages in the production of gold and the operation of mines. Its operating mines are located in Australia, Ghana, Peru, and South Africa. Gold Fields’ annual production is approximately 2.0 million gold equivalent ounces.

Petroleo Brasileiro SA (“Petrobras”) also contributed positively to Fund performance. The Brazil corporation operates in an integrated and specialized manner in the oil, natural gas, and energy industry. Petrobras has expertise in exploration and production due to decades of development in the Brazilian basins, especially in deep and ultra-deep waters. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units.

The largest detractors from Fund performance for the 12-month period were stocks involved in real estate, communication services, and utilities. Lumen Technologies, Inc. (formerly CenturyLink), an investment holding company, was a top detractor. The company engages in the provision of integrated communications to residential and business customers.

NextEra Energy Partners LP, a growth-oriented limited partnership formed by NextEra Energy, also detracted from Fund performance. NextEra Energy Partners acquires, manages, and owns contracted clean energy projects with stable, long-term cash flows.

Another top detractor was Medical Properties Trust, Inc., a self-advised real estate investment trust that engages in the investment, acquisition, and development of net-leased health care facilities.

The preceding information is the opinion of the investment adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

Indxx Real
Asset Income
Index
1

1 Year

(2.15

)%

(2.32

)%

(2.25

)%

Since Inception2

 1.12

%

 1.06

%

 1.62

%

 

1 The Indxx Real Asset Income Index tracks the performance of US-listed securities in the Real Asset space (Real Estate, Natural Resources and Infrastructure) emphasizing dividend growth. The Index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2February 7, 2019.

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

20

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

​Virtus Real Asset Income ETF (continued)

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Equity REITs: The Fund may be negatively affected by factors specific to the real estate market, including interest rates, leverage, property, and management.

Natural Resources: A fund that focuses its investments in natural resources companies will be more sensitive to conditions affecting their business or operations.

Infrastructure: A fund that focuses its investments in infrastructure-related companies will be more sensitive to conditions affecting their business or operations.

MLPs: Investments in Master Limited Partnerships may be adversely impacted by tax law changes, regulation, or factors affecting underlying assets.

Passive Strategy/Index Risk: A passive investment strategy seeking to track the performance of the Underlying Index may result in the fund holding securities regardless of market conditions or their current or projected performance. This could cause the Fund’s returns to be lower than if the Fund employed an active strategy.

Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

21

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus WMC International Dividend ETF (VWID)

The Virtus WMC International Dividend ETF (the “Fund”) is an actively managed ETF designed to generate a higher dividend yield than is generally provided by equity markets in developed ex-U.S. countries, as measured by the MSCI World ex USA Index, over a full market cycle within a framework that attempts to manage portfolio risk. It targets a below market beta relative to core equities. Securities that end up in the portfolio are selected because their high yield characteristics help meet the Fund’s income objective or their ability to help diversify risks in the portfolio. The names that help diversify risk in the portfolio are often names that 1) are members of the core index but not the high yield benchmark and 2) exhibit characteristics that high yielding stocks in aggregate tend to lack, such as growth.

During the period, the high yielding non-US equities, as measured by the MSCI World ex USA High Dividend Yield Index, posted positive absolute returns and outperformed core equities (as measured by MSCI World ex USA Index, respectively). Certain higher yielding and deeper value stocks, which generally make up a larger portion of the equity income universe, outperformed core indexes during the period. Meanwhile, higher growth stocks including technology companies, which are often underrepresented in the equity income universe as these companies tend to not pay dividends, lagged core equity indexes. This backdrop resulted in the strong relative outperformance of dividend paying stocks relative to core equities during the period.

During the period presented, the Fund’s NAV rose by +17.67%, underperforming its benchmark, the MSCI World ex USA High Dividend Yield Index (Net), which rose by +18.67%.

Sector allocation, which is a fallout of our portfolio construction process as we look to provide above market yield over time through a broadly diversified portfolio, detracted from relative results during the period. Our overweight exposures to the information technology and communication services sectors and an underweight exposure to the consumer discretionary sector detracted from relative results during the period. This was partially offset by stronger relative results from our underweight exposure to the consumer staples sector and an overweight exposure to the industrials sector.

Security selection detracted from relative results during the period. Our out-of-benchmark positions in Trend Micro, Inc. (information technology) and Algonquin Power & Utilities Corp. (utilities) and an overweight position in British American Tobacco PLC (consumer staples) were the three largest relative detractors over the period. Our underweight position in Anglo American (materials) and our overweight positions in Stellantis NV (consumer discretionary) and Aker BP ASA (energy) were the largest relative contributors during the period. Anglo American was sold during the reporting period.

From a regional perspective, exposures in North America, United Kingdom and Developed Asia Pacific ex Japan detracted from relative results. This was partially offset by exposures in Developed Europe ex UK and the Middle East, which contributed to relative performance.

The preceding information is the opinion of the investment adviser and sub-adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser makes no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

MSCI World
Ex USA High
Dividend
Yield Index
(net)
1

1 Year

17.67

%

17.76

%

18.67

%

5 Year

5.98

%

6.03

%

5.36

%

Since Inception2

4.96

%

5.03

%

3.11

%

 

1The MSCI World Ex USA High Dividend Yield Index (net) is based on the MSCI World Index, its parent index, and includes large and mid cap stocks across 48 Developed Markets (DM) and Emerging Market (EM) countries. The index is designed to reflect the performance of equities in the parent index (excluding REITs) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent. The index also applies quality screens and reviews 12-month past performance to omit stocks with potentially deteriorating fundamentals that could force them to cut or reduce dividends. The index is calculated on a total return basis with net dividends reinvested; it is unmanaged; its returns do not reflect any fees, expenses or sales charges; and it is not available for direct investment.

2October 10, 2017.

22

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

Virtus WMC International Dividend ETF (continued)

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the Cboe BZX Exchange, Inc. (“Cboe”), ordinarily 4:00 p.m. Eastern time, on each day during which the Cboe is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

Dividend Paying Securities: Issuers that have paid regular dividends or distributions may not continue to do so in the future and can fall out of favor with the market, which may cause the portfolio to underperform. Securities with higher dividend yields can be sensitive to interest rate movements: when interest rates rise, the prices of these securities may fall.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.

Geographic Concentration: Events negatively affecting the fiscal stability of a state, country, or region will cause the value of the Fund’s shares to decrease. Because the Fund concentrates its assets in a state, country, or region, the Fund is more vulnerable to those areas’ financial, economic, or other political developments.

Equity REITs: The Fund may be negatively affected by factors specific to the real estate market, including interest rates, leverage, property, and management.

Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

23

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

InfraCap MLP ETF (AMZA)

Management’s Discussion of Operations

Overview

InfraCap MLP ETF (the “Fund”) is an actively-managed portfolio of midstream energy master limited partnerships (“MLPs”) and related general partners. The Fund may utilize options strategies and leverage to enhance income and total return.

The Fund focuses on the midstream MLP sector because most of these companies have a long-term history of relatively stable and growing cash distributions. These companies are typically involved in the production, gathering, transportation, storage, and processing of oil, natural gas, natural gas liquids, and refined products.

Market Update

In the fiscal year ended October 31, 2023, the Fund’s total return based on market price was 12.34%. The Fund’s benchmark index, the Alerian MLP Infrastructure Index, returned 15.67% during same period, while the S&P 500 Index returned 10.14%.

Fiscal year 2023 was supportive for midstream companies. Energy prices remained elevated over the period, and WTI Crude Oil prices were $80.44 as of October 31, 2023. The return to normal business activity and OPEC+ agreements constraining supply drove oil prices higher and supported MLP stock prices as there is a long-term need for North American oil and gas. Midstream companies benefited from the defensive nature of their business model with fee based contracts and added protections like minimum volume commitments. Many midstream companies have diversified customer bases or significant exposure to investment grade counterparties. During the earnings periods, many management teams remained conservative, continuing to protect their balance sheets with cost saving initiatives and deferring capital spending. Midstream companies took steps to strengthen their financial flexibility, including streamlined maintenance capital costs and operating expenses. Cash flows remained stable during the fiscal year, with some MLPs pursuing shareholder friendly actions such as buy-backs, increased distributions or special distributions.

Over the past few years, midstream companies successfully transitioned to having positive free cash flow, sustainable dividends, and reasonable leverage levels. Earnings, which historically were low in the MLP space, are now substantially positive and companies trade at reasonable price to earnings ratios of less than 12x. Additionally, debt to EBITDA, a measure for leverage, has fallen from an average of 4.5x to 3.6x. We believe these developments could generate durable earnings and consistent distributions in the midstream energy space.

During the period, two of the Fund’s stronger performing issuers were Plains All American Pipeline LP (“Plains”) and NuStar Energy LP (“NuStar”). Plains is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids and natural gas. Plains owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. NuStar is a publicly traded master limited partnership. The company is one of the largest independent liquids terminal and pipeline operators in the United States. During the period, and Plains and NuStar were up 36.78% and 17.06%, respectively.

Two of the weaker performing positions during the period were New Fortress Energy Inc. (“Fortress”) and Kinder Morgan Inc. (“Kinder”). Kinder Morgan is one of the largest energy infrastructure companies in North America. Kinder has interest in or operates approximately 82,000 miles of pipelines and 140 terminals. The pipelines transport natural gas, gasoline, crude oil, carbon dioxide (CO2) and other products. The terminals store and handle renewable fuels, petroleum products, chemicals, vegetable oils and other products. Fortress is a global natural gas supply and infrastructure company with a mission to provide capital, expertise and vision to address this problem while also making positive and meaningful impacts on communities and the environment. Fortress has a focus on becoming one of the world’s leading producers of carbon-free energy (specifically through low-cost green hydrogen). During the period, Fortress and Kinder were down 39.69% and 4.60%, respectively.

During the period, despite elevated commodity prices, U.S. producers maintained capital discipline and kept their production outlook largely unchanged.

Distribution Payments

In the fiscal year ended October 31, 2023, the Fund made distribution payments in the amount of $0.22 per share in November and December of 2022, while paying monthly distribution payments in 2023 of $0.24 per share for the remainder the fiscal year.

24

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

InfraCap MLP ETF (continued)

While the Fund plans to continue paying monthly distribution, distribution are not guaranteed. The Fund seeks to maintain relatively stable monthly distributions although the amount of income earned by the Fund varies from period-to-period. To achieve this objective, the Fund may distribute less than the full amount of income earned during a specific period, preserving income for distribution in future periods. Consequently, the amount of income distributed in any one period may be more or less than the actual amount of income earned in that period.

Use of Leverage

The Fund may use leverage as described in its prospectus. The application of leverage positively contributed to Fund performance during the period. The Fund’s cost of borrowing increased during the fiscal year. The Fund entered into Lending Agreements (each, an “Agreement”) with certain commercial banks (the “Banks”) that allow the Fund to borrow cash from the Banks. Borrowings under the Agreements are collateralized by investments in the Fund. If the Fund defaults with respect to any of its obligations under the Agreements, the Banks may foreclose on assets of the Fund and/or the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the Agreement, necessitating the sale of securities at potentially inopportune times. Interest is charged at the OBFR (Overnight Bank Funding Rate) plus an additional percentage rate on the amount borrowed. Each Agreement has an on-demand commitment term. As of October 31, 2023, the current cost is daily OBFR plus 1.10%, which resets daily. The yield on the Fund’s benchmark index, the Alerian MLP Infrastructure Index, was 7.50% on September 29, 2023.

Use of Options

The Fund seeks to generate additional income for distribution to investors by writing call and put options. The primary activity is writing “covered” call options on positions held by the Fund. However, due to high volatility within the asset class at times during the period, market conditions for covered call options were unfavorable to Fund performance for parts of the fiscal year and as a result, the Fund’s manager reduced the frequency of this activity.

During the fiscal year, the Fund’s emphasis was on writing short-duration covered call options, and the average maturity of the option portfolio was less than 30 days. The Fund’s manager used these option strategies to seek to maximize the capture of premium decay and manage short term risks.

We believe consolidation within the MLP sector enhanced the liquidity in the single-stock options market as larger MLPs typically have more liquid markets for issued options.

Outlook

Midstream MLP companies generally have stable business, however, large fluctuations in commodity prices (as witnessed during the Covid-19 pandemic) can have material impacts on their free cash flows. Nonetheless, fee-based contracts utilized in the midstream MLP sector have helped companies protect their cash flow generation. We will continue to monitor rising or falling commodity prices, OPEC+ induced supply shocks, and macroeconomic factors related to infrastructure spending and Federal Reserve policy. Further, we expect US producers to remain disciplined and OPEC+ to slowly increase its output.

Based on our crude supply models, we still believe there is a structural deficit due to lower PMI data from China and weaker U.S. demand. We still expect general upward price pressure due to OPEC supply cuts and we believe that U.S. producers will not disrupt the cartel by increasing production. A new consideration for the next 12 months is the ongoing conflict between Israel and Hamas. While this is not our base case, there are increased risks to the production and distribution of crude oil and natural gas. Companies with pipeline and storage facilities with connectivity to export facilities for NGLs, refined products, and crude will benefit as the U.S. transitions to more exports. In our view, companies with integrated footprints spanning from producing regions to exporting facilities are best positioned with a natural hedge against these upstream and downstream fluctuations. Importantly, many midstream companies implemented measures during previous quarters to protect their balance sheets with cost saving initiatives and cancellations of growth and capital spending. In 2024, we expect midstream companies to continue transitioning to share buybacks and modest distribution growth.

We continue to believe that there will be significant asset sales and acquisitions of entire companies over the next year as private equity firms and strategic acquirers take advantage of consolidations in midstream assets. We continue to be positioned to take advantage of M&A activity that we believe may occur in the near future. In addition, we believe proposed increases in corporate taxes will decrease the advantages of MLP C-Corp conversions.

25

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

InfraCap MLP ETF (continued)

The Fund also maintains positions in large capitalization integrated pipelines and storage companies with stronger contractual protection and visible market demand. We believe these companies are less vulnerable during heightened periods of price volatility and are best suited to take advantage of opportunities that exist in the current market environment.

We expect upward price pressure on commodities and $80-100 oil prices in 2024 due to OPEC supply cuts founded on a belief that disciplined U.S. producers will not disrupt the cartel by increasing production. A key focus in 2023 has been the current energy crisis impacting much of Europe. We believe companies with pipeline and storage facilities with connectivity to export facilities for NGLs, refined products, and crude will continue to benefit as global demand increases. Companies with integrated footprints spanning from producing regions to exporting facilities are advantageously positioned with a natural hedge against these upstream and downstream fluctuations.

We believe many management teams of midstream companies continue to maintain disciplined and conservative efforts to protect their balance sheet with cost saving initiatives and cancellations of growth and capital spending. Over the fiscal period, we have seen midstream companies pursue shareholder friendly corporate actions, including share buybacks and dividend increases. We believe these shareholder friendly activities will continue in 2024 as energy prices remain elevated.

The preceding information is the opinion of the investment adviser and sub-adviser. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Statements of fact are from sources considered reliable, but the investment adviser and sub-adviser make no representation or warranty as to their completeness or accuracy. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized. This discussion includes information based on data and calculations sourced from Bloomberg and index constituents. While we believe that the data is reliable, we have not sought, nor have we received, permission from any third-party to include their information.

Performance as of 10/31/2023

Average Annual Total Return

Fund
Net Asset
Value

Fund
Market
Price

Alerian MLP
Infrastructure
Index
1

S&P 500®
Index
2

1 Year

12.91

%

12.34

%

15.67

%

10.14

%

5 Years

0.94

%

0.79

%

8.14

%

11.01

%

Since Inception3

(6.50

)%

(6.55

)%

(0.44

)%

10.87

%

 

1 The Alerian MLP Infrastructure Index is a composite of energy infrastructure Master Limited Partnerships (MLPs), whose constituents earn the majority of their cash flow from the transportation, storage, and processing of energy commodities. The index is calculated using a float-adjusted, capitalization-weighted methodology on a total-return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

2 The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

3October 1, 2014.

Performance data quoted represents past performance and past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Returns do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. For the most current month-end performance data please visit www.virtusetfs.com or call toll free (800) 243-4361. Market price returns are based on the mid-point of the highest bid and lowest offer for Fund shares as of the scheduled close of regular trading on the New York Stock Exchange Arca (“NYSE”), ordinarily 4:00 p.m. Eastern time, on each day during which the NYSE is open for trading, and do not represent the returns an investor would receive if shares were traded at other times.

26

Management’s Discussion of Fund Performance (unaudited) (continued)

October 31, 2023

​InfraCap MLP ETF (continued)

MLPs: Investments in Master Limited Partnerships may be adversely impacted by tax law changes, regulation, or factors affecting underlying assets.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Interest Rate Risk: As yield-based investments, MLPs carry interest rate risk and may underperform in rising interest rate environments. Additionally, when investors have heightened fears about the economy, the risk spread between MLPs and competing investment options can widen, which may have an adverse effect on the stock price of MLPs. Rising interest rates may increase the potential cost of MLPs financing projects or cost of operations, and may affect the demand for MLP investments, either of which may result in lower performance by or distributions from the Fund’s MLP investments.

Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.

Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.

Non-Diversified: The Fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the Fund’s assets.

Short Sales: The Fund may engage in short sales, and may experience a loss if the price of a borrowed security increases before the date on which the Fund replaces the security.

Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

Market Price/NAV: Shares of ETFs often trade at a discount to their net asset value, which may increase investors’ risk of loss. At the time of sale, an investor’s shares may have a market price that is above or below the Fund’s NAV.

No Guarantee: There is no guarantee that the Fund will meet its objective.

Prospectus: For additional information on risks, please see the Fund’s prospectus. The Fund may not be suitable for all investors.

Value of a $10,000 Investment Since Inception at Net Asset Value

The chart above represents historical performance of a hypothetical investment of $10,000 over the life of the Fund, assuming reinvestment of distributions. Past performance does not guarantee future results.

27

Portfolio Composition (unaudited)

October 31, 2023

Asset Allocation as of 10/31/2023 (based on net assets)

InfraCap REIT Preferred ETF

Real Estate

68.4

%

Financials

30.2

%

Other Assets in Excess of Liabilities

1.4

%

Total

100.0

%

 

Virtus InfraCap U.S. Preferred Stock ETF

Financials

40.1

%*

Real Estate

33.7

%*

Energy

16.9

%

Industrials

14.4

%

Utilities

12.3

%

Communication Services

6.7

%

Consumer Discretionary

1.9

%

Health Care

0.1

%

Liabilities in Excess of Other Assets

(26.1

)%

Total

100.0

%

 

Virtus LifeSci Biotech Clinical Trials ETF

Health Care

96.5

%

Money Market Fund

8.1

%

Liabilities in Excess of Other Assets

(4.6

)%

Total

100.0

%

 

Virtus LifeSci Biotech Products ETF

Health Care

99.2

%

Other Assets in Excess of Liabilities

0.8

%

Total

100.0

%

 

*Amounts represent investments in particular sectors. No industry within these sectors represented more than 25% of the Fund’s total assets at the time of investment.

28

Portfolio Composition (unaudited) (continued)

October 31, 2023

Virtus Newfleet Multi-Sector Bond ETF

Corporate Bonds

34.4

%

Foreign Bonds

18.8

%

Term Loans

13.2

%

Mortgage Backed Securities

12.9

%

U.S. Government Securities

8.7

%

Asset Backed Securities

7.8

%

Municipal Bonds

0.2

%

Common Stock

0.0

%*

Money Market Fund

2.1

%

Other Assets in Excess of Liabilities

1.9

%

Total

100.0

%

 

Virtus Private Credit Strategy ETF

Financials

58.4

%

Closed-End Funds

38.6

%

Money Market Fund

9.7

%

Liabilities in Excess of Other Assets

(6.7

)%

Total

100.0

%

 

Virtus Real Asset Income ETF

Real Estate

30.6

%

Energy

23.3

%

Materials

18.7

%

Utilities

15.0

%

Communication Services

6.7

%

Consumer Staples

2.2

%

Money Market Fund

5.7

%

Liabilities in Excess of Other Assets

(2.2

)%

Total

100.0

%

 

*Amount rounds to less than 0.05%.

29

Portfolio Composition (unaudited) (continued)

October 31, 2023

Asset Allocation as of 10/31/2023 (based on net assets)

Virtus WMC International Dividend ETF

Financials

25.8

%

Energy

10.5

%

Industrials

10.3

%

Consumer Staples

10.1

%

Communication Services

8.8

%

Materials

8.1

%

Utilities

7.7

%

Health Care

7.3

%

Consumer Discretionary

5.9

%

Information Technology

2.9

%

Real Estate

1.7

%

Other Assets in Excess of Liabilities

0.9

%

Total

100.0

%

 

InfraCap MLP ETF

Energy

133.0

%

Written Options

(0.2

)%

Liabilities in Excess of Other Assets

(32.8

)%

Total

100.0

%

30

Shareholder Expense Examples (unaudited)

October 31, 2023

We believe it is important for you to understand the impact of costs on your investment. All funds have operating expenses. As a shareholder of the InfraCap REIT Preferred ETF, Virtus InfraCap U .S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Newfleet Multi-Sector Bond ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF, Virtus WMC International Dividend ETF and InfraCap MLP ETF (each, a “Fund”) you may incur two types of costs: (1) transaction costs, which include brokerage commissions that you pay when purchasing or selling shares of a Fund; and (2) ongoing costs, which include advisory fees and other fund expenses, if any . The following example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 invested at the beginning of the period and held throughout the entire period (May 1, 2023 to October 31, 2023).

Actual expenses

The first line under each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second line under each Fund in the table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line under each Fund in the table is useful in comparing ongoing Fund costs only and will not help you determine the relative total costs of owning different funds.

In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
05/01/23

Ending
Account Value
10/31/23

Annualized
Expense Ratios
(2)

Expenses Paid
During the
Period
(3)

InfraCap REIT Preferred ETF

Actual

$1,000.00​

$988.80

0.45%

$2.26

Hypothetical(1)

$1,000.00​

$1,022.94

0.45%

$2.29

Virtus InfraCap U.S. Preferred Stock ETF

Actual

$1,000.00​

$1,012.00

0.80%

$4.06

Hypothetical(1)

$1,000.00​

$1,021.17

0.80%

$4.08

Virtus LifeSci Biotech Clinical Trials ETF

Actual

$1,000.00​

$775.60

0.79%

$3.54

Hypothetical(1)

$1,000.00​

$1,021.22

0.79%

$4.02

Virtus LifeSci Biotech Products ETF

Actual

$1,000.00​

$907.40

0.79%

$3.80

Hypothetical(1)

$1,000.00​

$1,021.22

0.79%

$4.02

Virtus Newfleet Multi-Sector Bond ETF

Actual

$1,000.00​

$980.10

0.49%

$2.45

Hypothetical(1)

$1,000.00​

$1,022.74

0.49%

$2.50

Virtus Private Credit Strategy ETF

Actual

$1,000.00​

$1,050.60

0.75%

$3.88

Hypothetical(1)

$1,000.00​

$1,021.42

0.75%

$3.82

Virtus Real Asset Income ETF

Actual

$1,000.00​

$919.80

0.55%

$2.66

Hypothetical(1)

$1,000.00​

$1,022.43

0.55%

$2.80

Virtus WMC International Dividend ETF

Actual

$1,000.00​

$953.70

0.49%

$2.41

Hypothetical(1)

$1,000.00​

$1,022.74

0.49%

$2.50

InfraCap MLP ETF

Actual

$1,000.00​

$1,116.10

0.95%

$5.07

Hypothetical(1)

$1,000.00​

$1,020.42

0.95%

$4.84

 

1Assuming 5% return before expenses.

2Annualized expense ratios reflect expenses net of waived fees or reimbursed expenses, if applicable.

3Expenses are calculated using each Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 184/365 (to reflect the six-month period).​

Schedule of Investments — InfraCap REIT Preferred ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

31

Security Description

Shares

Value

 

PREFERRED STOCKS — 98.6%

 

Financials — 30.2%

ACRES Commercial Realty Corp., Series C, 8.63%

10,914

$243,491

AG Mortgage Investment Trust, Inc., Series B, 8.00%

3,497

 57,176

AG Mortgage Investment Trust, Inc., Series C, 8.00%

6,287

 118,573

AGNC Investment Corp., Series D, 6.88%

21,354

 448,007

AGNC Investment Corp., Series E, 6.50%

36,267

 772,124

AGNC Investment Corp., Series F, 6.13%

52,614

 1,051,754

AGNC Investment Corp., Series G, 7.75%

12,936

 262,989

Annaly Capital Management, Inc., Series F, 10.65%

2,963

 71,823

Annaly Capital Management, Inc., Series G, 9.83%

38,157

 883,716

Annaly Capital Management, Inc., Series I, 6.75%

39,576

 914,601

Arbor Realty Trust, Inc., Series D, 6.38%

20,907

 335,557

Arbor Realty Trust, Inc., Series E, 6.25%

12,625

 203,515

Arbor Realty Trust, Inc., Series F, 6.25%

25,383

 443,441

ARMOUR Residential REIT, Inc., Series C, 7.00%

15,419

 285,097

Chimera Investment Corp., Series A, 8.00%

13,459

 243,742

Chimera Investment Corp., Series B, 8.00%

29,544

 623,083

Chimera Investment Corp., Series C, 7.75%

23,411

 403,137

Chimera Investment Corp., Series D, 8.00%

18,372

 370,931

Dynex Capital, Inc., Series C, 6.90%

9,790

 215,576

Ellington Financial, Inc., 6.75%

10,848

 242,561

Ellington Financial, Inc., Series C, 8.63%

9,192

 204,522

Franklin BSP Realty Trust, Inc., Series E, 7.50%

23,483

 437,019

Granite Point Mortgage Trust, Inc., Series A, 7.00%

17,677

 284,423

Inpoint Commercial Real Estate Income, Inc., Series A, 6.75%

6,999

 134,521

Invesco Mortgage Capital, Inc., Series B, 7.75%

10,371

 216,235

Invesco Mortgage Capital, Inc., Series C, 7.50%

17,761

 328,934

KKR Real Estate Finance Trust, Inc., Series A, 6.50%

29,535

 481,420

MFA Financial, Inc., Series B, 7.50%

18,179

 317,042

MFA Financial, Inc., Series C, 6.50%

25,307

 464,890

New York Mortgage Trust, Inc., Series D, 8.00%

14,353

 275,578

New York Mortgage Trust, Inc., Series E, 7.88%

17,319

 367,509

PennyMac Mortgage Investment Trust, Series A, 8.13%

10,453

 220,036

PennyMac Mortgage Investment Trust, Series B, 8.00%

17,733

 367,073

PennyMac Mortgage Investment Trust, Series C, 6.75%

22,735

 373,081

Ready Capital Corp., 5.75%

18,521

 438,022

Ready Capital Corp., Series E, 6.50%

10,453

 181,569

Rithm Capital Corp., Series A, 7.50%

14,111

 318,767

Rithm Capital Corp., Series B, 7.13%

25,365

 561,835

Rithm Capital Corp., Series C, 6.38%

36,436

 706,130

Rithm Capital Corp., Series D, 7.00%

42,238

 843,915

TPG RE Finance Trust, Inc., Series C, 6.25%

18,752

 261,403

Two Harbors Investment Corp., Series A, 8.13%

11,439

224,891

Two Harbors Investment Corp., Series B, 7.63%

23,949

 452,636

Two Harbors Investment Corp., Series C, 7.25%

22,413

 437,054

Total Financials

 17,089,399

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Real Estate — 68.4%

Agree Realty Corp., Series A, 4.25%

38,122

$613,002

American Homes 4 Rent, Series G, 5.88%

13,362

 285,145

American Homes 4 Rent, Series H, 6.25%

24,979

 558,530

Armada Hoffler Properties, Inc., Series A, 6.75%

17,686

 357,080

Chatham Lodging Trust, Series A, 6.63%

15,468

 307,968

City Office REIT, Inc., Series A, 6.63%

14,719

 213,426

DiamondRock Hospitality Co., 8.25%

21,738

 553,884

Digital Realty Trust, Inc., Series J, 5.25%

43,690

 844,965

Digital Realty Trust, Inc., Series K, 5.85%

45,089

 982,038

Digital Realty Trust, Inc., Series L, 5.20%

72,566

 1,413,586

DigitalBridge Group, Inc., Series H, 7.13%

45,977

 988,506

DigitalBridge Group, Inc., Series I, 7.15%

70,780

 1,487,088

DigitalBridge Group, Inc., Series J, 7.13%

63,609

 1,326,884

Diversified Healthcare Trust, 5.63%

77,023

 1,058,296

Diversified Healthcare Trust, 6.25%

54,872

 813,203

EPR Properties, Series G, 5.75%

32,758

 590,627

Federal Realty Investment Trust, Series C, 5.00%

32,672

 650,173

Gladstone Commercial Corp., Series E, 6.63%

28,203

 549,112

Gladstone Land Corp., Series B, 6.00%

21,293

 361,129

Global Medical REIT, Inc., Series A, 7.50%

12,273

 291,238

Global Net Lease, Inc., Series A, 7.25%

37,440

 642,470

Global Net Lease, Inc., Series B, 6.88%

25,425

 400,952

Global Net Lease, Inc., Series D, 7.50%

43,169

 733,873

Global Net Lease, Inc., Series E, 7.38%

10,783

 174,900

Hersha Hospitality Trust, Series D, 6.50%

42,342

 1,052,199

Hersha Hospitality Trust, Series E, 6.50%

21,735

 540,115

Hudson Pacific Properties, Inc., Series C, 4.75%

93,529

 985,796

Kimco Realty Corp., Series L, 5.13%

48,419

 929,645

Kimco Realty Corp., Series M, 5.25%

56,994

 1,140,450

National Storage Affiliates Trust, Series A, 6.00%

46,381

 969,827

Office Properties Income Trust, 6.38%

34,649

 480,928

Pebblebrook Hotel Trust, Series E, 6.38%

7,555

 138,257

Pebblebrook Hotel Trust, Series F, 6.30%

33,514

 610,625

Pebblebrook Hotel Trust, Series G, 6.38%

49,810

 879,645

Pebblebrook Hotel Trust, Series H, 5.70%

50,586

 813,929

Public Storage, Series F, 5.15%

21,895

 462,203

Public Storage, Series G, 5.05%

23,319

 498,560

Public Storage, Series H, 5.60%

22,101

 490,421

Public Storage, Series I, 4.88%

24,643

484,481

Public Storage, Series J, 4.70%

20,644

 380,056

Public Storage, Series K, 4.75%

18,352

 342,999

Public Storage, Series L, 4.63%

43,531

 805,324

Public Storage, Series N, 3.88%

22,540

 343,735

Public Storage, Series O, 3.90%

13,563

 209,548

Public Storage, Series P, 4.00%

45,714

 721,824

Public Storage, Series Q, 3.95%

12,016

185,647

Public Storage, Series R, 4.00%

32,986

 520,189

Saul Centers, Inc., Series E, 6.00%

8,991

 182,517

SITE Centers Corp., Series A, 6.38%

36,351

 723,021

SL Green Realty Corp., Series I, 6.50%

47,779

 806,032


Schedule of Investments — InfraCap REIT Preferred ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

32

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Real Estate (continued)

Spirit Realty Capital, Inc., Series A, 6.00%

37,676

$ 836,030

Summit Hotel Properties, Inc., Series E, 6.25%

35,035

 630,630

Sunstone Hotel Investors, Inc., Series H, 6.13%

24,778

 512,161

Sunstone Hotel Investors, Inc., Series I, 5.70%

7,035

 137,605

UMH Properties, Inc., Series D, 6.38%

52,251

 1,063,308

Vornado Realty Trust, Series L, 5.40%

65,548

 931,437

Vornado Realty Trust, Series M, 5.25%

69,959

 979,426

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Real Estate (continued)

Vornado Realty Trust, Series N, 5.25%

65,711

$ 933,096

Vornado Realty Trust, Series O, 4.45%

66,020

 787,619

Total Real Estate

 38,707,360

 

TOTAL INVESTMENTS — 98.6%

(Cost $68,056,854)

55,796,759

Other Assets in Excess of Liabilities — 1.4%

767,396

Net Assets — 100.0% 

$56,564,155


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Preferred Stocks

$55,796,759

$

$

$55,796,759

Total

$55,796,759

$

$

$55,796,759

Schedule of Investments — Virtus InfraCap U.S. Preferred Stock ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

33

Security Description

Shares

Value

 

PREFERRED STOCKS — 126.1%

 

Communication Services — 6.7%

AT&T, Inc., Series C, 4.75%

25,090

$434,057

Liberty Broadband Corp., Series A, 7.00%(1)

47,957

 1,039,708

Qwest Corp., 6.50%(1)

85,238

 1,030,527

Qwest Corp., 6.75%(1)

47,292

 592,096

Telephone and Data Systems, Inc.,
Series UU, 6.63%
(1)

387,813

 5,720,242

Telephone and Data Systems, Inc.,
Series VV, 6.00%
(1)

805,223

 10,347,116

United States Cellular Corp., 5.50%(1)

1,028,590

 15,154,166

United States Cellular Corp., 6.25%(1)

389,404

 6,425,166

Total Communication Services

 40,743,078

 

Consumer Discretionary — 1.9%

Ford Motor Co., 6.00%(1)

528,080

 11,089,680

Ford Motor Co., 6.20%(1)

27,478

 589,678

Ford Motor Co., 6.50%(1)

8,032

 168,029

Total Consumer Discretionary

 11,847,387

 

Energy — 16.9%

Brookfield Infrastructure Finance ULC, 5.00% (Canada)

10,713

 163,802

Crestwood Equity Partners LP, Series *, 9.25%(1)

3,299,770

 31,809,783

Energy Transfer LP, Series D, 10.36%(1)

48,237

 1,208,819

Energy Transfer LP, Series E, 7.60%(1)

101,263

 2,503,221

GasLog Partners LP, Series A, 8.63% (Greece)(1)

412,160

 8,638,874

GasLog Partners LP, Series B, 11.51% (Greece)(1)

101,923

 2,481,825

Golar LNG Partners LP, Series A, 8.75%
(United Kingdom)
(1)

47,750

 561,062

NuStar Energy LP, Series A, 12.44%(1)

857,197

 21,832,808

NuStar Energy LP, Series B, 11.31%(1)

951,932

 23,893,493

NuStar Energy LP, Series C, 12.55%(1)

404,295

 10,180,148

Total Energy

 103,273,835

 

Financials — 40.1%†

Affiliated Managers Group, Inc., 4.20%

2,249

 34,500

Affiliated Managers Group, Inc., 4.75%

6,434

 105,067

AG Mortgage Investment Trust, Inc., Series B, 8.00%

4,662

 76,224

AG Mortgage Investment Trust, Inc., Series C, 8.00%(1)

227,589

 4,292,328

AGNC Investment Corp., Series D, 6.88%(1)

32,752

 687,137

AGNC Investment Corp., Series G, 7.75%(1)

186,278

 3,787,032

Allstate Corp., Series H, 5.10%

16,510

 313,690

American Equity Investment Life Holding Co., Series A, 5.95%(1)

62,234

 1,316,249

American Equity Investment Life Holding Co., Series B, 6.63%

6,545

 150,011

American International Group, Inc., Series A, 5.85%

628

 14,067

Apollo Global Management, Inc., 6.75%

1,354

 65,141

Arbor Realty Trust, Inc., Series E, 6.25%(1)

30,430

 490,532

Argo Group International Holdings Ltd., 7.00%(1)

10,033

 220,525

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Financials (continued)

ARMOUR Residential REIT, Inc., Series C, 7.00%(1)

398,635

$7,370,761

Atlanticus Holdings Corp., Series B, 7.63%(1)

21,939

 455,892

B Riley Financial, Inc., 5.25%(1)

44,423

 801,391

B Riley Financial, Inc., 6.00%(1)

90,699

 1,746,863

B Riley Financial, Inc., 6.38%(1)

122,258

 2,901,182

B Riley Financial, Inc., Series B, 7.38%(1)

44,522

 1,048,048

Bank of America Corp., Series 4, 6.42%

10,854

 226,957

Bank of America Corp., Series 5, 6.14%

2,060

 41,756

Bank OZK, Series A, 4.63%(1)

134,527

 2,004,452

Brighthouse Financial, Inc., 6.25%

1,232

 24,147

Brighthouse Financial, Inc., Series A, 6.60%

12,088

 235,958

Brighthouse Financial, Inc., Series B, 6.75%

1,236

 24,757

Brighthouse Financial, Inc., Series C, 5.38%(1)

77,590

 1,205,749

Brighthouse Financial, Inc., Series D, 4.63%(1)

100,329

 1,362,468

Brookfield Finance, Inc., Series 50, 4.63% (Canada)(1)

125,589

 1,859,973

Chimera Investment Corp., Series A, 8.00%(1)

293,891

 5,322,366

Chimera Investment Corp., Series B, 8.00%(1)

284,711

 6,004,555

Chimera Investment Corp., Series C, 7.75%(1)

380,438

 6,551,142

Chimera Investment Corp., Series D, 8.00%(1)

374,391

 7,558,954

CNO Financial Group, Inc., 5.13%(1)

1,922

 29,407

Compass Diversified Holdings, Series A, 7.25%(1)

283,134

 6,347,864

Compass Diversified Holdings, Series B, 7.88%(1)

16,003

 390,313

Compass Diversified Holdings, Series C, 7.88%(1)

12,527

 299,395

Dime Community Bancshares, Inc., 5.50%(1)

5,950

 86,929

Eagle Point Income Co., Inc., Series B, 7.75%

13,605

 331,826

Ellington Financial, Inc., 6.75%(1)

504,574

 11,282,275

Enstar Group Ltd., Series D, 7.00%(1)

92,995

 2,212,351

Enstar Group Ltd., Series E, 7.00%(1)

4,844

 108,070

Enterprise Financial Services Corp., Series A, 5.00%(1)

149,741

 2,100,866

Fifth Third Bancorp, Series K, 4.95%

7,764

 148,681

First Horizon Corp., Series D, 6.10%(1)

111,620

 2,522,612

First Horizon Corp., Series E, 6.50%

3,214

 59,202

First Horizon Corp., Series F, 4.70%

4,594

 61,560

Gladstone Investment Corp., 8.00%

38,229

 945,021

Goldman Sachs Group, Inc., Series A, 6.38%

11,477

 241,017

Goldman Sachs Group, Inc., Series C, 6.38%

27,172

 567,623

Goldman Sachs Group, Inc., Series D, 6.30%

4,431

 92,431

Huntington Bancshares, Inc., Series J, 6.88%(1)

32,839

 727,384

Invesco Mortgage Capital, Inc., Series B, 7.75%(1)

263,879

 5,501,877

Invesco Mortgage Capital, Inc., Series C, 7.50%(1)

327,871

 6,072,171

Jackson Financial, Inc., 8.00%(1)

291,814

 7,146,525

Kemper Corp., 5.88%(1)

261,949

 4,675,790

KeyCorp, Series E, 6.13%

26,676

 476,167

KeyCorp, Series F, 5.65%

42,069

 643,656

KeyCorp, Series G, 5.63%

19,568

 295,477

KKR Real Estate Finance Trust, Inc., Series A, 6.50%

11,377

 185,445

Merchants Bancorp, Series B, 6.00%(1)

30,093

 587,716


Schedule of Investments — Virtus InfraCap U.S. Preferred Stock ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

34

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Financials (continued)

Merchants Bancorp, Series C, 6.00%(1)

104,178

$1,793,424

MetLife, Inc., Series A, 6.67%

2,565

 58,123

MFA Financial, Inc., Series B, 7.50%(1)

280,739

 4,896,088

MFA Financial, Inc., Series C, 6.50%(1)

584,612

 10,739,322

Morgan Stanley, Series A, 6.36%

100,595

 2,055,156

Morgan Stanley, Series O, 4.25%

1,490

 24,451

Navient Corp., 6.00%(1)

69,338

 1,191,920

New York Community Capital Trust V, 6.00%(1)

5,895

 207,858

New York Mortgage Trust, Inc., Series D, 8.00%(1)

830,332

 15,942,374

New York Mortgage Trust, Inc., Series E, 7.88%(1)

474,303

 10,064,710

New York Mortgage Trust, Inc., Series F, 6.88%(1)

45,158

 825,940

Oaktree Capital Group LLC, Series A, 6.63%

5,394

 103,619

Oaktree Capital Group LLC, Series B, 6.55%

8,567

 161,745

Oxford Lane Capital Corp., Series 2029, 6.00%(1)

49,675

 1,042,678

PacWest Bancorp, Series A, 7.75%

26,818

 546,014

PennyMac Mortgage Investment Trust, Series A, 8.13%(1)

126,940

 2,672,087

PennyMac Mortgage Investment Trust, Series B, 8.00%(1)

477,261

 9,879,303

PennyMac Mortgage Investment Trust, Series C, 6.75%(1)

76,961

 1,262,930

Prospect Capital Corp., Series A, 5.35%(1)

429,079

 6,788,030

Redwood Trust, Inc., 10.00%(1)

67,719

 1,520,292

Regions Financial Corp., Series C, 5.70%

14,699

 262,377

Regions Financial Corp., Series E, 4.45%

37,397

 552,728

Rithm Capital Corp., Series A, 7.50%

19,749

 446,130

Rithm Capital Corp., Series B, 7.13%

34,473

 763,577

Rithm Capital Corp., Series D, 7.00%(1)

42,329

 845,733

RiverNorth Opportunities Fund, Inc., Series A, 6.00%(1)

59,170

 1,326,000

SLM Corp., Series B, 7.37%(1)

195,010

 12,868,710

Synchrony Financial, Series A, 5.63%(1)

360,086

 5,318,470

Synovus Financial Corp., Series D, 9.01%(1)

1,219

 30,304

Synovus Financial Corp., Series E, 5.88%

68,013

 1,545,255

Texas Capital Bancshares, Inc., Series B, 5.75%(1)

93,918

 1,522,411

Truist Financial Corp., Series I, 6.20%

35,955

 734,201

Two Harbors Investment Corp., Series A, 8.13%(1)

11,221

 220,605

Two Harbors Investment Corp., Series B, 7.63%(1)

411,797

 7,782,963

Two Harbors Investment Corp., Series C, 7.25%(1)

632,962

 12,342,759

US Bancorp, Series A, 6.68%(1)

12,527

 9,268,477

US Bancorp, Series B, 6.26%

180,026

 3,474,502

W R Berkley Corp., 5.10%

17,035

 332,012

Zions Bancorp NA, 9.56%

2,061

 51,525

Zions Bancorp NA, Series G, 9.91%

5,874

 146,556

Total Financials

 244,050,884

 

Health Care — 0.1%

XOMA Corp., Series A, 8.63%(1)

 

24,219

528,701

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Industrials — 14.4%

Air Lease Corp., Series A, 6.15%

10,051

$ 242,430

Alta Equipment Group, Inc., Series A, 10.00%

2,814

 71,138

Atlas Corp., Series D, 7.95% (Canada)

3,592

 86,855

Atlas Corp., Series H, 7.88% (Canada)(1)

34,995

 796,136

Babcock & Wilcox Enterprises, Inc., 8.13%(1)

384,206

 7,979,959

Babcock & Wilcox Enterprises, Inc., Series A, 7.75%(1)

1,163,734

 18,899,040

FTAI Aviation Ltd., Series A, 8.25%(1)

91,641

 2,197,551

FTAI Aviation Ltd., Series B, 8.00%(1)

769,236

 18,653,973

FTAI Aviation Ltd., Series C, 8.25%(1)

27,866

 636,738

FTAI Aviation Ltd., Series D, 9.50%

30,520

 740,110

Pitney Bowes, Inc., 6.70%(1)

443,048

 6,698,886

Textainer Group Holdings Ltd., 7.00% (China)(1)

4,893

 121,738

Textainer Group Holdings Ltd., Series B, 6.25% (China)(1)

317,799

 7,706,626

Triton International Ltd., 6.88% (Bermuda)(1)

230,532

 5,219,244

Triton International Ltd., 7.38% (Bermuda)(1)

468,565

 10,814,480

Triton International Ltd., 8.00% (Bermuda)

3,053

 75,409

Triton International Ltd., Series E, 5.75% (Bermuda)(1)

282,431

 5,208,028

WESCO International, Inc., Series A, 10.63%(1)

49,308

 1,314,551

Total Industrials

 87,462,892

 

Real Estate — 33.7%†

Armada Hoffler Properties, Inc., Series A, 6.75%

28,343

 572,245

Braemar Hotels & Resorts, Inc., Series B, 5.50%(1)

408,436

 4,692,930

Braemar Hotels & Resorts, Inc., Series D, 8.25%(1)

48,659

 771,250

City Office REIT, Inc., Series A, 6.63%(1)

80,405

 1,165,872

CTO Realty Growth, Inc., Series A, 6.38%(1)

101,118

 1,785,744

DiamondRock Hospitality Co., 8.25%(1)

212,058

 5,403,238

Digital Realty Trust, Inc., Series K, 5.85%

4,243

 92,412

DigitalBridge Group, Inc., Series H, 7.13%(1)

421,758

 9,067,797

DigitalBridge Group, Inc., Series I, 7.15%(1)

783,115

 16,453,246

DigitalBridge Group, Inc., Series J, 7.13%(1)

341,807

 7,130,094

Diversified Healthcare Trust, 5.63%(1)

537,098

 7,379,726

Diversified Healthcare Trust, 6.25%(1)

439,107

 6,507,566

EPR Properties, Series C, 5.75%(1)

95,899

 1,814,409

EPR Properties, Series E, 9.00%(1)

456,622

 11,675,779

EPR Properties, Series G, 5.75%(1)

288,085

 5,194,173

Equity Commonwealth, Series D, 6.50%

3,943

 96,406

Federal Realty Investment Trust, Series C, 5.00%

2,924

 58,188

Gladstone Commercial Corp., Series G, 6.00%

12,849

 216,249

Global Net Lease, Inc., Series A, 7.25%(1)

390,915

 6,708,101

Global Net Lease, Inc., Series B, 6.88%(1)

411,298

 6,486,169

Global Net Lease, Inc., Series D, 7.50%(1)

1,028,343

17,481,831

Global Net Lease, Inc., Series E, 7.38%(1)

256,328

 4,157,640

Healthcare Trust, Inc., Series B, 7.13%(1)

259,609

 3,509,914

Hersha Hospitality Trust, Series D, 6.50%

242

 6,014

Hudson Pacific Properties, Inc., Series C, 4.75%(1)

107,041

 1,128,212

LXP Industrial Trust, Series C, 6.50%(1)

19,680

 924,960

National Storage Affiliates Trust, Series A, 6.00%

5,951

 124,435


Schedule of Investments — Virtus InfraCap U.S. Preferred Stock ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

35

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Real Estate (continued)

Office Properties Income Trust, 6.38%(1)

69,201

$960,510

Pebblebrook Hotel Trust, Series E, 6.38%(1)

32,862

 601,375

Pebblebrook Hotel Trust, Series F, 6.30%(1)

269,926

 4,918,052

Pebblebrook Hotel Trust, Series G, 6.38%(1)

82,929

 1,464,526

Pebblebrook Hotel Trust, Series H, 5.70%(1)

56,989

 916,953

Regency Centers Corp., Series A, 6.25%

2,177

 50,202

Regency Centers Corp., Series B, 5.88%(1)

202,064

 4,358,520

Rexford Industrial Realty, Inc., Series B, 5.88%

4,450

 95,497

RLJ Lodging Trust, Series A, 1.95%(1)

882,384

 20,824,262

RPT Realty, Series D, 7.25%(1)

234,119

 11,818,327

Saul Centers, Inc., Series E, 6.00%(1)

397,439

 8,068,012

SL Green Realty Corp., Series I, 6.50%(1)

260,217

 4,389,861

Spirit Realty Capital, Inc., Series A, 6.00%

3,224

 71,541

Summit Hotel Properties, Inc., Series E, 6.25%(1)

227,044

 4,086,792

Summit Hotel Properties, Inc., Series F, 5.88%(1)

75,622

 1,384,639

Sunstone Hotel Investors, Inc., Series H, 6.13%(1)

5,509

 113,871

Sunstone Hotel Investors, Inc., Series I, 5.70%(1)

52,370

 1,024,357

UMH Properties, Inc., Series D, 6.38%(1)

35,355

 719,474

Vornado Realty Trust, Series L, 5.40%(1)

223,461

 3,175,381

Vornado Realty Trust, Series M, 5.25%(1)

411,573

 5,762,022

Vornado Realty Trust, Series N, 5.25%(1)

393,590

 5,588,978

Vornado Realty Trust, Series O, 4.45%

381,572

 4,552,154

Total Real Estate

 205,549,906

 

Utilities — 12.3%

AES Corp., 6.88%(1)

99,789

 6,015,281

Algonquin Power & Utilities Corp., 7.75% (Canada)(1)

229,839

 4,295,691

Security Description

Shares

Value

 

PREFERRED STOCKS (continued)

 

Utilities (continued)

Algonquin Power & Utilities Corp., 9.34% (Canada)

2,072

$51,966

Brookfield BRP Holdings Canada, Inc., 4.63% (Canada)

3,099

 42,363

DTE Energy Co., 4.38%

132

 2,364

Entergy New Orleans LLC, 5.50%

2,176

 45,326

NextEra Energy, Inc., 6.93%

141,401

 5,308,193

NiSource, Inc., 7.75%(1)

13,742

 1,394,676

Pacific Gas and Electric Co., Series A, 6.00%(1)

25,131

 490,557

SCE Trust II, 5.10%

2,001

 35,098

SCE Trust III, Series H, 5.75%(1)

1,441,057

 34,787,116

SCE Trust IV, Series J, 5.38%(1)

90,212

 1,772,666

SCE Trust VI, 5.00%(1)

674,423

 11,815,891

South Jersey Industries, Inc., 5.63%(1)

5,636

 70,816

Southern Co., Series 2020, 4.95%

13,260

268,648

Spire, Inc., Series A, 5.90%

12,070

 266,626

UGI Corp., 7.25%(1)

157,361

 7,990,792

Total Utilities

 74,654,070

 

TOTAL INVESTMENTS — 126.1%

(Cost $873,513,506)

768,110,753

Liabilities in Excess of Other Assets — (26.1)%

(158,832,337

)

Net Assets — 100.0% 

$609,278,416

___________

Amounts represent investments in particular sectors. No industry within these sectors represented more than 25% of the Fund’s total assets at the time of investment.

(1)Security, or a portion thereof, has been pledged as collateral for borrowings. The aggregate market value of the collateral at October 31, 2023 was $513,257,640.


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Preferred Stocks

$768,110,753

$

$

$768,110,753

Total

$768,110,753

$

$

$768,110,753

Schedule of Investments — Virtus LifeSci Biotech Clinical Trials ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

36

Security Description

Shares

Value

 

COMMON STOCKS — 96.5%

 

Health Care — 96.5%

4D Molecular Therapeutics, Inc.*

4,479

$48,104

89bio, Inc.*

4,619

 34,181

AbCellera Biologics, Inc. (Canada)*

13,385

 55,012

Agenus, Inc.*

54,041

 43,233

Akero Therapeutics, Inc.*

1,795

 21,396

Aldeyra Therapeutics, Inc.*

9,460

 16,177

Alector, Inc.*

12,831

 66,721

Allakos, Inc.*

20,177

 38,538

Allogene Therapeutics, Inc.*(1)

19,835

 55,935

ALX Oncology Holdings, Inc.*(1)

10,727

 77,234

Ambrx Biopharma, Inc.*

6,793

 70,715

AnaptysBio, Inc.*

5,323

 86,818

Arbutus Biopharma Corp.*

40,040

 73,273

Arcellx, Inc.*

2,605

 91,826

Arcturus Therapeutics Holdings, Inc.*

3,582

 68,416

Arcus Biosciences, Inc.*

5,042

 79,210

Arcutis Biotherapeutics, Inc.*(1)

9,248

 20,808

Ardelyx, Inc.*

24,595

 97,150

Arrowhead Pharmaceuticals, Inc.*

2,799

 68,827

Arvinas, Inc.*

3,361

 54,179

ATAI Life Sciences NV (Germany)*

55,554

 68,331

Atea Pharmaceuticals, Inc.*

24,183

 78,595

Avidity Biosciences, Inc.*

8,113

 41,782

Bicycle Therapeutics PLC (United Kingdom)*(2)

3,705

 55,760

Biohaven Ltd.*

4,057

 107,551

Biomea Fusion, Inc.*

2,543

 25,989

Bioxcel Therapeutics, Inc.*(1)

4,646

 18,654

Caribou Biosciences, Inc.*

21,358

 77,530

Cassava Sciences, Inc.*(1)

3,907

 78,726

Celldex Therapeutics, Inc.*

2,631

 61,881

Cerevel Therapeutics Holdings, Inc.*

2,895

 68,467

Cogent Biosciences, Inc.*

7,700

 62,832

Compass Pathways PLC (United Kingdom)*(1)(2)

12,549

 71,906

Crinetics Pharmaceuticals, Inc.*

4,849

 142,027

CRISPR Therapeutics AG (Switzerland)*

1,681

 65,441

Cullinan Oncology, Inc.*

8,404

 78,409

CureVac NV (Germany)*

9,723

 51,532

Cymabay Therapeutics, Inc.*

11,343

 185,798

Cytokinetics, Inc.*

2,824

 98,445

Day One Biopharmaceuticals, Inc.*

7,339

 86,820

Denali Therapeutics, Inc.*

3,045

 57,337

Design Therapeutics, Inc.*

18,313

 37,359

Disc Medicine, Inc.*

2,014

 92,261

Dynavax Technologies Corp.*

7,831

 111,279

Dyne Therapeutics, Inc.*

7,972

 56,203

Edgewise Therapeutics, Inc.*

10,384

 66,458

Editas Medicine, Inc.*

8,914

 59,546

EQRx, Inc.*

54,639

 119,113

Erasca, Inc.*

36,494

 84,301

Exscientia PLC (United Kingdom)*(1)(2)

14,247

 76,934

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Health Care (continued)

Fate Therapeutics, Inc.*

18,216

$32,971

FibroGen, Inc.*

6,037

 3,266

Geron Corp.*

32,005

 60,809

Ideaya Biosciences, Inc.*

3,977

 108,055

IGM Biosciences, Inc.*

9,909

 39,041

Immatics NV (Germany)*

8,263

 63,212

ImmunityBio, Inc.*(1)

34,461

108,208

Immunovant, Inc.*

4,647

 153,583

Inhibrx, Inc.*(1)

3,678

 56,899

Intellia Therapeutics, Inc.*

2,192

 54,910

Iovance Biotherapeutics, Inc.*

11,405

 43,567

iTeos Therapeutics, Inc.*

7,066

 71,084

Karuna Therapeutics, Inc.*

414

 68,977

Keros Therapeutics, Inc.*

2,561

 73,091

Kodiak Sciences, Inc.*

10,947

 15,873

Krystal Biotech, Inc.*

766

 89,522

Kura Oncology, Inc.*

8,624

 72,873

Kymera Therapeutics, Inc.*(1)

3,837

 44,778

Liquidia Corp.*

12,566

 81,805

Lyell Immunopharma, Inc.*

28,661

 47,434

Madrigal Pharmaceuticals, Inc.*(1)

388

 50,975

Mersana Therapeutics, Inc.*

10,358

 12,326

Merus NV (Netherlands)*

3,731

 75,030

Mineralys Therapeutics, Inc.*

6,205

 47,965

Mirati Therapeutics, Inc.*

2,684

 149,043

MoonLake Immunotherapeutics*(1)

3,687

 191,023

Morphic Holding, Inc.*

1,654

 32,997

Novavax, Inc.*(1)

12,813

 85,335

Nurix Therapeutics, Inc.*

9,011

 50,371

Nuvalent, Inc. Class A*(1)

2,296

 119,599

Phathom Pharmaceuticals, Inc.*

7,744

 72,019

Pliant Therapeutics, Inc.*(1)

4,066

 59,648

PMV Pharmaceuticals, Inc.*

16,534

 24,966

Point Biopharma Global, Inc.*

9,954

 126,018

Precigen, Inc.*

79,754

 90,122

Protagonist Therapeutics, Inc.*

3,440

 50,018

Prothena Corp. PLC (Ireland)*

1,372

 50,023

RAPT Therapeutics, Inc.*

4,691

 61,687

Recursion Pharmaceuticals, Inc. Class A*(1)

10,032

 52,969

REGENXBIO, Inc.*

5,025

 64,772

Relay Therapeutics, Inc.*

8,272

 54,595

Replimune Group, Inc.*

4,216

 61,427

REVOLUTION Medicines, Inc.*(1)

3,916

 77,537

Rocket Pharmaceuticals, Inc.*

4,356

 78,844

Scilex Holding Co. (Singapore)*(3)

17,635

 31,329

Seres Therapeutics, Inc.*(1)

16,156

 24,719

SpringWorks Therapeutics, Inc.*

3,590

 82,211

Stoke Therapeutics, Inc.*

7,893

 30,072

Structure Therapeutics, Inc.*(2)

3,194

 237,314

Summit Therapeutics, Inc.*

50,714

 98,385


Schedule of Investments — Virtus LifeSci Biotech Clinical Trials ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

37

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Health Care (continued)

Syndax Pharmaceuticals, Inc.*

4,532

$63,811

Terns Pharmaceuticals, Inc.*

8,404

 44,205

TG Therapeutics, Inc.*

3,634

 28,091

uniQure NV (Netherlands)*

5,104

 29,093

Vaxcyte, Inc.*

1,883

 90,572

Ventyx Biosciences, Inc.*

2,825

 40,737

Verve Therapeutics, Inc.*(1)

5,782

 69,615

Viking Therapeutics, Inc.*(1)

4,418

 43,341

Vir Biotechnology, Inc.*

3,802

 30,150

Viridian Therapeutics, Inc.*

3,572

 44,650

Xencor, Inc.*(1)

3,722

 64,577

Xenon Pharmaceuticals, Inc. (Canada)*

2,324

 72,044

Zentalis Pharmaceuticals, Inc.*

4,012

 65,636

Zymeworks, Inc.*

11,871

 83,334

Total Common Stocks

(Cost $15,199,620)

7,758,173

Security Description

Shares

Value

 

SECURITIES LENDING COLLATERAL — 8.1%

Money Market Fund — 8.1%

Dreyfus Government Cash Management Fund, Institutional Shares, 5.23%(4)(5)

(Cost $647,190)

647,190

$ 647,190

 

TOTAL INVESTMENTS — 104.6%

(Cost $15,846,810)

8,405,363

Liabilities in Excess of Other Assets — (4.6)%

(370,270

)

Net Assets — 100.0%

$8,035,093

___________

*Non-income producing security.

(1)All or a portion of the security was on loan. The aggregate market value of securities on loan was $1,299,727; total market value of collateral held by the Fund was $1,286,608. Market value of the collateral held includes non-cash U.S. Treasury securities having a value of $639,418.

(2)American Depositary Receipts.

(3)Restricted security. See Note 5.

(4)Represents securities purchased with cash collateral received for securities on loan.

(5)The rate shown reflects the seven-day yield as of October 31, 2023.


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$7,726,844

$31,329

$

$7,758,173

Money Market Fund

 647,190

 —

 —

 647,190

Total

$8,374,034

$31,329

$

$8,405,363

Schedule of Investments — Virtus LifeSci Biotech Products ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

38

Security Description

Shares

Value

 

COMMON STOCKS — 99.2%

 

Health Care — 99.2%

2seventy bio, Inc.*(1)

28,308

$69,072

ACADIA Pharmaceuticals, Inc.*

12,605

 284,495

ADMA Biologics, Inc.*

78,224

 264,397

Agios Pharmaceuticals, Inc.*

11,823

 248,401

Alnylam Pharmaceuticals, Inc.*

1,533

 232,709

Amgen, Inc.

1,379

 352,610

Amicus Therapeutics, Inc.*

22,877

 250,961

Amylyx Pharmaceuticals, Inc.*

12,223

 199,357

Apellis Pharmaceuticals, Inc.*(1)

3,301

 160,627

Ascendis Pharma A/S (Denmark)*(2)

3,368

 300,796

Aurinia Pharmaceuticals, Inc. (Canada)*

30,857

 226,490

Axsome Therapeutics, Inc.*(1)

3,762

 234,297

BeiGene Ltd. (China)*(2)

1,459

 271,783

BioCryst Pharmaceuticals, Inc.*

38,321

 210,382

Biogen, Inc.*

1,016

 241,341

BioMarin Pharmaceutical, Inc.*

3,221

 262,350

BioNTech SE (Germany)*(2)

2,740

 256,300

Bluebird Bio, Inc.*(1)

78,827

 232,540

Blueprint Medicines Corp.*

5,179

 304,836

Bridgebio Pharma, Inc.*

18,018

 469,189

Deciphera Pharmaceuticals, Inc.*

21,460

 257,305

Enanta Pharmaceuticals, Inc.*

12,784

 115,312

Exelixis, Inc.*

16,201

 333,579

Gilead Sciences, Inc.

3,941

 309,526

Halozyme Therapeutics, Inc.*

9,231

 312,654

Harmony Biosciences Holdings, Inc.*

8,510

 200,325

Immunocore Holdings PLC (United Kingdom)*(1)(2)

5,265

 233,766

ImmunoGen, Inc.*

17,174

 255,206

Incyte Corp.*

4,951

 267,007

Insmed, Inc.*

15,777

 395,372

Intercept Pharmaceuticals, Inc.*

25,272

 478,399

Intra-Cellular Therapies, Inc.*

4,723

 235,017

Ionis Pharmaceuticals, Inc.*(1)

7,457

 330,121

Ironwood Pharmaceuticals, Inc.*

27,538

 247,016

Kiniksa Pharmaceuticals Ltd. Class A*

18,461

 281,530

Legend Biotech Corp.*(2)

4,409

 291,303

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Health Care (continued)

Lexicon Pharmaceuticals, Inc.*

121,711

$150,922

Ligand Pharmaceuticals, Inc.*

3,904

 204,140

Mirum Pharmaceuticals, Inc.*

10,739

 294,571

Moderna, Inc.*

2,414

 183,367

Neurocrine Biosciences, Inc.*

3,227

 358,003

Omniab, Inc. - $12.50 Earnout*(3)

1,295

 0

Omniab, Inc. - $15.00 Earnout*(3)

1,295

 0

PTC Therapeutics, Inc.*

7,075

 132,656

Regeneron Pharmaceuticals, Inc.*

394

 307,277

Rhythm Pharmaceuticals, Inc.*(1)

17,193

 397,330

Roivant Sciences Ltd.*(1)

31,338

 270,760

Sage Therapeutics, Inc.*

5,240

 98,145

Sarepta Therapeutics, Inc.*

2,334

 157,102

Theravance Biopharma, Inc.*

29,232

 275,950

Travere Therapeutics, Inc.*

17,981

 116,517

Ultragenyx Pharmaceutical, Inc.*

6,072

 214,949

United Therapeutics Corp.*

1,342

 299,078

Vanda Pharmaceuticals, Inc.*

48,530

 212,561

Vertex Pharmaceuticals, Inc.*

893

323,364

Zai Lab Ltd. (China)*(1)(2)

10,998

 277,150

 

TOTAL INVESTMENTS — 99.2%

(Cost $16,630,105)

13,890,213

Other Assets in Excess of Liabilities — 0.8%

110,964

Net Assets — 100.0%

$14,001,177

___________

*Non-income producing security.

(1)All or a portion of the security was on loan. The aggregate market value of securities on loan was $2,169,903; total market value of collateral held by the Fund was $2,178,724. Market value of the collateral held includes non-cash U.S. Treasury securities having a value of $2,178,724.

(2)American Depositary Receipts.

(3)Security valued at fair value as determined in good faith by or under the direction of the Trustees. This security is disclosed as a Level 2 security in the Fair Value Hierarchy table located after the Schedule of Investments.


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$13,890,213

$0

$

$13,890,213

Total

$13,890,213

$0

$

$13,890,213

Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

39

Security Description

Principal

Value

 

CORPORATE BONDS — 34.4%

 

Communication Services — 1.7%

AT&T, Inc., 5.40%, 02/15/34

$150,000

$137,877

CCO Holdings LLC / CCO Holdings Capital Corp., 4.75%, 03/01/30(1)

 70,000

 57,845

CSC Holdings LLC, 5.25%, 06/01/24

 80,000

 74,873

DISH DBS Corp., 5.88%, 11/15/24

 55,000

 50,537

DISH DBS Corp., 7.75%, 07/01/26

 105,000

 70,486

Gray Television, Inc., 7.00%, 05/15/27(1)

 115,000

 97,630

Level 3 Financing, Inc., 3.63%, 01/15/29(1)

 60,000

 30,712

Millennium Escrow Corp., 6.63%, 08/01/26(1)

 110,000

 81,788

Rackspace Technology Global, Inc., 5.38%, 12/01/28(1)

 65,000

 19,072

Sprint Capital Corp., 8.75%, 03/15/32

 130,000

 146,497

T-Mobile USA, Inc., 5.05%, 07/15/33

 56,000

 50,628

Total Communication Services

 817,945

 

Consumer Discretionary — 2.5%

Carnival Corp., 7.00%, 08/15/29(1)

 15,000

 14,722

Carriage Services, Inc., 4.25%, 05/15/29(1)

 59,000

 48,319

Churchill Downs, Inc., 6.75%, 05/01/31(1)

 65,000

 60,044

Clarios Global LP / Clarios US Finance Co., 6.75%, 05/15/28(1)

 10,000

 9,759

Ford Motor Co., 3.25%, 02/12/32

 90,000

 67,998

Ford Motor Co., 4.75%, 01/15/43

 70,000

 48,713

Genuine Parts Co., 6.88%, 11/01/33

 135,000

 134,715

Jacobs Entertainment, Inc., 6.75%, 02/15/29(1)

 114,000

 96,999

MDC Holdings, Inc., 3.97%, 08/06/61

 185,000

 97,856

Newell Brands, Inc., 6.63%, 09/15/29

 111,000

 102,323

NMG Holding Co., Inc. / Neiman Marcus Group LLC, 7.13%, 04/01/26(1)

 115,000

 107,677

Nordstrom, Inc., 4.25%, 08/01/31

 100,000

 73,371

Premier Entertainment Sub LLC / Premier Entertainment Finance Corp., 5.63%, 09/01/29(1)

 155,000

 109,139

PulteGroup, Inc., 7.88%, 06/15/32

 95,000

 101,985

PulteGroup, Inc., 6.38%, 05/15/33

 30,000

 29,195

Royal Caribbean Cruises Ltd., 9.25%, 01/15/29(1)

 4,000

 4,179

Weekley Homes LLC / Weekley Finance Corp., 4.88%, 09/15/28(1)

 120,000

 103,195

Total Consumer Discretionary

 1,210,189

 

Consumer Staples — 0.4%

Coty, Inc./HFC Prestige Products, Inc./HFC Prestige International US LLC, 6.63%, 07/15/30(1)

 65,000

 62,003

HLF Financing Sarl LLC / Herbalife International, Inc., 4.88%, 06/01/29(1)

 80,000

 54,713

Pilgrim’s Pride Corp., 6.25%, 07/01/33

 108,000

 99,387

Total Consumer Staples

 216,103

 

Energy — 3.7%

Ascent Resources Utica Holdings LLC / ARU Finance Corp., 8.25%, 12/31/28(1)

 85,000

 84,484

CITGO Petroleum Corp., 7.00%, 06/15/25(1)

 120,000

 118,037

Civitas Resources, Inc., 8.75%, 07/01/31(1)

75,000

75,789

Security Description

Principal

Value

 

CORPORATE BONDS (continued)

 

Energy (continued)

Columbia Pipelines Operating Co. LLC, 6.04%, 11/15/33(1)

$115,000

$109,259

Columbia Pipelines Operating Co. LLC, 6.71%, 08/15/63(1)

 20,000

18,447

CrownRock LP / CrownRock Finance, Inc., 5.63%, 10/15/25(1)

 50,000

 49,230

CrownRock LP / CrownRock Finance, Inc., 5.00%, 05/01/29(1)

 50,000

 47,205

DT Midstream, Inc., 4.13%, 06/15/29(1)

 105,000

 90,380

Energy Transfer LP, Series H, 6.50%, (US 5 Year CMT T- Note + 5.69%), perpetual(2)(3)

 120,000

 108,982

Flex Intermediate Holdco LLC, 3.36%, 06/30/31(1)

 195,000

 147,276

Genesis Energy LP / Genesis Energy Finance Corp., 8.88%, 04/15/30

 100,000

 96,753

Hilcorp Energy I LP / Hilcorp Finance Co., 5.75%, 02/01/29(1)

 125,000

 112,671

Kinder Morgan, Inc., Series G, 7.75%, 01/15/32

 113,000

 120,009

Mesquite Energy, Inc., Escrow, 7.25%, perpetual(3)

 12,000

 1,140

Nabors Industries Ltd., 7.25%, 01/15/26(1)

 100,000

 94,023

Occidental Petroleum Corp., 6.13%, 01/01/31

 130,000

 127,262

Transocean, Inc., 11.50%, 01/30/27(1)

 89,000

 92,690

Transocean, Inc., 8.75%, 02/15/30(1)

 71,250

 71,100

USA Compression Partners LP / USA Compression Finance Corp., 6.88%, 04/01/26

 68,000

 66,106

Venture Global Calcasieu Pass LLC, 4.13%, 08/15/31(1)

 125,000

 100,629

Viper Energy Partners LP, 7.38%, 11/01/31(1)

 15,000

 14,977

Total Energy

 1,746,449

 

Financials — 11.2%

Acrisure LLC / Acrisure Finance, Inc., 7.00%, 11/15/25(1)

 120,000

 116,513

Allstate Corp. (The), Series B, 8.56%, (3-Month USD LIBOR + 3.20%), 08/15/53(2)

 180,000

 177,653

American Express Co., 5.63%, (SOFR + 1.93%), 07/28/34(2)

 165,000

 150,472

Bank of America Corp., 3.42%, (3-Month USD LIBOR + 1.30%), 12/20/28(2)

 130,000

 115,770

Bank of America Corp., 5.02%, (SOFR + 2.16%), 07/22/33(2)

 155,000

 138,640

Bank of America Corp., 2.48%, (US 5 Year CMT T- Note + 1.20%), 09/21/36(2)

 160,000

 114,092

Bank of New York Mellon Corp. (The), Series G, 4.70%, (US 5 Year CMT T- Note + 4.36%), perpetual(2)(3)

 155,000

 147,091

Bank of New York Mellon Corp. (The), 5.83%, (SOFR + 2.07%), 10/25/33(2)

 45,000

 43,120

Blackstone Private Credit Fund, 2.63%, 12/15/26

59,000

50,527

Blue Owl Credit Income Corp., 4.70%, 02/08/27

 38,000

 34,500

Blue Owl Finance LLC, 3.13%, 06/10/31(1)

 185,000

 135,603

BroadStreet Partners, Inc., 5.88%, 04/15/29(1)

 100,000

 87,274

Capital One Financial Corp., 2.36%, (SOFR + 1.34%), 07/29/32(2)

 155,000

 102,305


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

40

Security Description

Principal

Value

 

CORPORATE BONDS (continued)

 

Financials (continued)

Charles Schwab Corp. (The), Series H, 4.00%, (US 10 Year CMT T- Note + 3.08%), perpetual(2)(3)

$95,000

$64,948

Charles Schwab Corp. (The), 6.14%, (SOFR + 2.01%), 08/24/34(2)

 85,000

 79,660

Citadel LP, 4.88%, 01/15/27(1)

 115,000

 109,088

Citigroup, Inc., 3.98%, (3-Month USD LIBOR + 1.60%), 03/20/30(2)

 125,000

 110,626

Citigroup, Inc., 6.27%, (SOFR + 2.34%), 11/17/33(2)

 110,000

 106,851

Citigroup, Inc., 6.17%, (SOFR + 2.66%), 05/25/34(2)

 147,000

 136,713

Cobra AcquisitionCo. LLC, 6.38%, 11/01/29(1)

 50,000

 35,688

Corebridge Financial, Inc., 6.88%, (US 5 Year CMT T-Note + 3.85%), 12/15/52(2)

 164,000

 151,709

Discover Financial Services, 6.70%, 11/29/32

 98,000

 90,827

Fifth Third Bancorp, 4.34%, (SOFR + 1.66%), 04/25/33(2)

 105,000

 85,578

First American Financial Corp., 4.00%, 05/15/30

 135,000

 112,775

Goldman Sachs Group, Inc. (The), 1.99%, (SOFR + 1.09%), 01/27/32(2)

 220,000

 161,461

Goldman Sachs Group, Inc. (The), 3.10%, (SOFR + 1.41%), 02/24/33(2)

 60,000

 46,663

Goldman Sachs Group, Inc. (The), 6.45%, 05/01/36

 110,000

 106,051

Huntington Bancshares, Inc./Oh, 2.55%, 02/04/30

 125,000

 96,255

JPMorgan Chase & Co., Series HH, 4.60%, (SOFR + 3.13%), perpetual(2)(3)

 94,000

 87,811

JPMorgan Chase & Co., 1.95%, (SOFR + 1.07%), 02/04/32(2)

 110,000

 81,749

JPMorgan Chase & Co., 5.72%, (SOFR + 2.58%), 09/14/33(2)

 175,000

 163,937

KeyCorp, 4.79%, (SOFR + 2.06%), 06/01/33(2)

 100,000

 78,892

Ladder Capital Finance Holdings LLLP / Ladder Capital Finance Corp., 4.25%, 02/01/27(1)

 75,000

 65,594

Liberty Mutual Group, Inc., 4.13%, (US 5 Year CMT T- Note + 3.32%), 12/15/51(1)(2)

 55,000

 43,761

Lincoln National Corp., 7.72%, (3-Month USD LIBOR + 2.04%), 04/20/67(2)

 80,000

 50,118

MetLife, Inc., Series G, 3.85%, (US 5 Year CMT T- Note + 3.58%), perpetual(2)(3)

 130,000

 118,521

MetLife, Inc., Series D, 5.88%, (3-Month USD LIBOR + 3.22%), perpetual(2)(3)

 52,000

 46,058

Midcap Financial Issuer Trust, 6.50%, 05/01/28(1)

75,000

63,640

Morgan Stanley, 6.34%, (SOFR + 2.56%), 10/18/33(2)

 110,000

 107,878

Morgan Stanley, 5.25%, (SOFR + 1.87%), 04/21/34(2)

 145,000

 130,701

Morgan Stanley, 5.95%, (US 5 Year CMT T- Note + 2.43%), 01/19/38(2)

 72,000

 65,321

MSCI, Inc., 3.63%, 09/01/30(1)

 139,000

 115,180

National Rural Utilities Cooperative Finance Corp., 8.56%, (3-Month USD LIBOR + 3.17%), 04/30/43(2)

 90,000

 88,238

Security Description

Principal

Value

 

CORPORATE BONDS (continued)

 

Financials (continued)

Nationstar Mortgage Holdings, Inc., 5.75%, 11/15/31(1)

$100,000

$ 83,375

NCR Atleos Escrow Corp., 9.50%, 04/01/29(1)

 77,000

 75,559

Northern Trust Corp., 6.13%, 11/02/32

 55,000

 53,040

OneMain Finance Corp., 6.88%, 03/15/25

 75,000

 74,076

Prudential Financial, Inc., 5.13%, (US 5 Year CMT T- Note + 3.16%), 03/01/52(2)

 79,000

 67,318

Prudential Financial, Inc., 6.00%, (US 5 Year CMT T- Note + 3.23%), 09/01/52(2)

 10,000

 8,965

State Street Corp., 4.82%, (SOFR + 1.57%), 01/26/34(2)

 172,000

 152,593

Synchrony Financial, 4.88%, 06/13/25

 65,000

 61,664

Synchrony Financial, 3.70%, 08/04/26

 30,000

 26,620

Texas Capital Bancshares, Inc., 4.00%, (US 5 Year
CMT T- Note + 3.15%), 05/06/31
(2)

 70,000

 57,802

Truist Financial Corp., Series Q, 5.10%, (US 10
Year CMT T- Note + 4.35%), perpetual
(2)(3)

 165,000

 132,970

Wells Fargo & Co., Series BB, 3.90%, (US 5 Year
CMT T-Note + 3.45%), perpetual
(2)(3)

 100,000

 86,679

Wells Fargo & Co., 5.39%, (SOFR + 2.02%), 04/24/34(2)

 185,000

 167,557

Wells Fargo & Co., 6.49%, (SOFR + 2.06%), 10/23/34(2)

 55,000

 54,064

Total Financials

 5,318,134

 

Health Care — 4.3%

Adapthealth LLC, 5.13%, 03/01/30(1)

 145,000

 109,982

Akumin, Inc., 7.00%, 11/01/25(1)(4)

 145,000

 122,661

Bausch Health Cos., Inc., 6.13%, 02/01/27(1)

 5,000

 2,795

Bausch Health Cos., Inc., 11.00%, 09/30/28(1)

 19,000

 11,637

Bausch Health Cos., Inc., 14.00%, 10/15/30(1)

 3,000

 1,631

Catalent Pharma Solutions, Inc., 3.50%, 04/01/30(1)

 140,000

 110,036

CHS/Community Health Systems, Inc., 6.88%, 04/15/29(1)

 25,000

 10,349

CHS/Community Health Systems, Inc., 6.13%, 04/01/30(1)

 30,000

 11,656

CHS/Community Health Systems, Inc., 4.75%, 02/15/31(1)

165,000

110,784

Dentsply Sirona, Inc., 3.25%, 06/01/30

 260,000

 211,748

Fortrea Holdings, Inc., 7.50%, 07/01/30(1)

 23,000

 22,224

HCA, Inc., 5.50%, 06/01/33

 145,000

 132,351

Illumina, Inc., 2.55%, 03/23/31

 197,000

 150,092

Iqvia, Inc., 5.70%, 05/15/28(1)

 200,000

 192,250

Lannett Co., Inc., 7.75%, 04/15/26(1)(4)(5)

 10,000

 719

LifePoint Health, Inc., 9.88%, 08/15/30(1)

 175,000

 158,375

Medline Borrower LP, 5.25%, 10/01/29(1)

 80,000

 68,176

Par Pharmaceutical, Inc., 7.50%, 04/01/27(1)(4)

 35,000

 23,767

Star Parent, Inc., 9.00%, 10/01/30(1)

 20,000

 19,873

Surgery Center Holdings, Inc., 6.75%, 07/01/25(1)

 73,000

 71,525

Surgery Center Holdings, Inc., 10.00%, 04/15/27(1)

 21,000

 20,980

Team Health Holdings, Inc., 6.38%, 02/01/25(1)

 45,000

 35,706

Universal Health Services, Inc., 2.65%, 01/15/32

 275,000

 202,022


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

41

Security Description

Principal

Value

 

CORPORATE BONDS (continued)

 

Health Care (continued)

Viatris, Inc., Series WI, 2.70%, 06/22/30

$150,000

$115,248

Zimmer Biomet Holdings, Inc., 3.55%, 03/20/30

 165,000

 139,682

Total Health Care

 2,056,269

 

Industrials — 4.0%

Alaska Airlines Pass-Through Trust, Class A, Series 2020-1, 4.80%, 08/15/27(1)

 188,149

 179,503

Aviation Capital Group LLC, 3.50%, 11/01/27(1)

 76,000

 66,777

BlueLinx Holdings, Inc., 6.00%, 11/15/29(1)

 125,000

 105,333

Boeing Co. (The), 5.15%, 05/01/30

 55,000

 51,559

Boeing Co. (The), 5.93%, 05/01/60

 123,000

 103,589

Chart Industries, Inc., 9.50%, 01/01/31(1)

 80,000

 82,494

Concentrix Corp., 6.65%, 08/02/26

 90,000

 89,477

CoStar Group, Inc., 2.80%, 07/15/30(1)

 263,000

 204,351

Global Infrastructure Solutions, Inc., 7.50%, 04/15/32(1)

 95,000

 77,811

Hertz Corp. (The), 5.00%, 12/01/29(1)

 110,000

 79,109

Icahn Enterprises LP / Icahn Enterprises Finance Corp., 5.25%, 05/15/27

 90,000

 77,132

LBM Acquisition LLC, 6.25%, 01/15/29(1)

 100,000

 79,105

Regal Rexnord Corp., 6.40%, 04/15/33(1)

 210,000

 192,724

Science Applications International Corp., 4.88%, 04/01/28(1)

 80,000

 71,471

Sempra Global, 3.25%, 01/15/32(1)

 203,000

 153,014

United Airlines Pass-Through Trust, Class A, Series 2023-1, 5.80%, 01/15/36

 137,000

 128,871

United Rentals North America, Inc., 3.75%, 01/15/32

 105,000

 83,630

Veralto Corp., 5.45%, 09/18/33(1)

 70,000

 65,448

Total Industrials

 1,891,398

 

Information Technology — 1.7%

Booz Allen Hamilton, Inc., 3.88%, 09/01/28(1)

 70,000

 62,627

Booz Allen Hamilton, Inc., 4.00%, 07/01/29(1)

95,000

83,945

Commscope Technologies LLC, 6.00%, 06/15/25(1)

 95,000

 57,143

Consensus Cloud Solutions, Inc., 6.50%, 10/15/28(1)

 100,000

 82,980

Dell International LLC / EMC Corp., 8.10%, 07/15/36

 87,000

 94,407

Gtcr W-2 Merger Sub LLC, 7.50%, 01/15/31(1)

 80,000

 79,060

Kyndryl Holdings, Inc., 3.15%, 10/15/31

 95,000

 69,283

Leidos, Inc., 2.30%, 02/15/31

 225,000

 169,312

Viasat, Inc., 5.63%, 09/15/25(1)

 115,000

 106,936

Total Information Technology

 805,693

 

Materials — 1.2%

Asp Unifrax Holdings, Inc., 5.25%, 09/30/28(1)

 190,000

 128,555

Bayport Polymers LLC, 5.14%, 04/14/32(1)

 80,000

 68,345

LSB Industries, Inc., 6.25%, 10/15/28(1)

 150,000

 133,232

Mauser Packaging Solutions Holding Co., 7.88%, 08/15/26(1)

 20,000

 18,752

Security Description

Principal

Value

 

CORPORATE BONDS (continued)

 

Materials (continued)

Mauser Packaging Solutions Holding Co., 9.25%, 04/15/27(1)

$60,000

$50,035

New Enterprise Stone & Lime Co., Inc., 9.75%, 07/15/28(1)

 85,000

 84,870

WR Grace Holdings LLC, 5.63%, 08/15/29(1)

 90,000

 69,837

Total Materials

 553,626

 

Real Estate — 1.7%

EPR Properties, 4.75%, 12/15/26

 100,000

 91,259

EPR Properties, 3.60%, 11/15/31

 95,000

 68,431

GLP Capital LP / GLP Financing II, Inc., 5.75%, 06/01/28

 81,000

 76,016

GLP Capital LP / GLP Financing II, Inc., 3.25%, 01/15/32

 140,000

 106,050

Kite Realty Group Trust, 4.75%, 09/15/30

 135,000

 117,294

MPT Operating Partnership LP / MPT Finance Corp., 3.50%, 03/15/31

 100,000

 60,741

Office Properties Income Trust, 4.50%, 02/01/25

 140,000

 119,852

VICI Properties LP, 4.95%, 02/15/30

 60,000

 53,550

VICI Properties LP, 5.13%, 05/15/32

 115,000

 99,486

VICI Properties LP / VICI Note Co., Inc., 4.63%, 06/15/25(1)

 10,000

 9,614

VICI Properties LP / VICI Note Co., Inc., 4.13%, 08/15/30(1)

 30,000

 24,777

Total Real Estate

 827,070

 

Utilities — 2.0%

CMS Energy Corp., 4.75%, (US 5 Year CMT T- Note + 4.12%), 06/01/50(2)

 225,000

 186,862

Ferrellgas LP / Ferrellgas Finance Corp., 5.38%, 04/01/26(1)

 55,000

 51,532

Ferrellgas LP / Ferrellgas Finance Corp., 5.88%, 04/01/29(1)

80,000

70,668

KeySpan Gas East Corp., 5.99%, 03/06/33(1)

 151,000

 142,089

NRG Energy, Inc., 7.00%, 03/15/33(1)

 191,000

 180,761

Southern Co. (The), Series 21-A, 3.75%, (US 5 Year CMT T- Note + 2.92%), 09/15/51(2)

 213,000

 182,491

Sunnova Energy Corp., 5.88%, 09/01/26(1)

 110,000

 89,199

Vistra Corp., 8.00%, (US 5 Year CMT T- Note + 6.93%), perpetual(1)(2)(3)

 35,000

 33,293

Total Utilities

 936,895

 

Total Corporate Bonds

(Cost $17,638,045)

 16,379,771

 

FOREIGN BONDS — 18.8%

 

Basic Materials — 0.6%

Corp. Nacional del Cobre de Chile,
5.95%, 01/08/34 (Chile)
(1)

 200,000

 186,550

INEOS Quattro Finance 2 PLC, 3.38%, 01/15/26 (United Kingdom)(1)

 81,000

 77,442

Total Basic Materials

 263,992


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

42

Security Description

Principal

Value

 

FOREIGN BONDS (continued)

 

Communication Services — 0.7%

CT Trust, 5.13%, 02/03/32 (Guatemala)(1)

$200,000

$154,000

Telecomunicaciones Digitales SA, 4.50%, 01/30/30
(Panama)
(1)

 200,000

 157,875

Telesat Canada / Telesat LLC, 6.50%, 10/15/27 (Canada)(1)

 35,000

 16,975

Total Communication Services

 328,850

 

Consumer Discretionary — 1.0%

Ashtead Capital, Inc., 5.50%, 08/11/32 (United Kingdom)(1)

 200,000

 179,078

eG Global Finance PLC, 8.50%, 10/30/25 (United
Kingdom)
(1)

 200,000

 196,929

Ontario Gaming GTA LP, 8.00%, 08/01/30 (Canada)(1)

 95,000

 92,967

Total Consumer Discretionary

 468,974

 

Consumer Staples – 0.7%

Bat Capital Corp., 7.75%, 10/19/32 (United Kingdom)

 135,000

 138,611

Central American Bottling Corp. / CBC Bottling Holdco SL / Beliv Holdco SL, 5.25%, 04/27/29 (Guatemala)(1)

 95,000

 83,961

Sigma Holdco BV, 7.88%, 05/15/26 (Netherlands)(1)

 135,000

 113,082

Total Consumer Staples

 335,654

 

Energy — 2.9%

BP Capital Markets PLC, 4.88%, (US 5 Year CMT T- Note + 4.40%), perpetual (United Kingdom)(2)(3)

165,000

144,151

Coronado Finance Pty Ltd., 10.75%, 05/15/26 (Australia)(1)

 68,000

 70,363

Ecopetrol SA, 4.63%, 11/02/31 (Colombia)

 100,000

 75,025

Ecopetrol SA, 8.88%, 01/13/33 (Colombia)

 150,000

 144,150

Enbridge, Inc., 7.63%, (US 5 Year CMT T- Note + 4.42%), 01/15/83 (Canada)(2)

 170,000

 152,480

Enerflex Ltd., 9.00%, 10/15/27 (Canada)(1)

 125,000

 113,877

KazMunayGas National Co. JSC, 6.38%, 10/24/48 (Kazakhstan)(1)

 200,000

 157,500

Petroleos Mexicanos, 6.50%, 03/13/27 (Mexico)

 160,000

 141,230

Petroleos Mexicanos, 6.70%, 02/16/32 (Mexico)

 325,000

 238,469

Petroleos Mexicanos, 6.35%, 02/12/48 (Mexico)

 55,000

 30,319

Petroleos Mexicanos, 7.69%, 01/23/50 (Mexico)

 20,000

 12,400

Teine Energy Ltd., 6.88%, 04/15/29 (Canada)(1)

 110,000

 101,978

Total Energy

 1,381,942

 

Financials — 3.1%

AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 2.45%, 10/29/26 (Ireland)

 150,000

 133,483

Allianz SE, 6.35%, (US 5 Year CMT T-Note + 3.23%), 09/06/53 (Germany)(1)(2)

 200,000

 191,238

Ascot Group Ltd., 4.25%, 12/15/30 (Bermuda)(1)

 45,000

 32,889

Banco Mercantil del Norte SA, 6.63%, (US 10 Year CMT T- Note + 5.03%), perpetual (Mexico)(1)(2)(3)

 200,000

 151,750

Banco Santander Chile, 3.18%, 10/26/31 (Chile)(1)

 150,000

 121,175

Security Description

Principal

Value

 

FOREIGN BONDS (continued)

 

Financials (continued)

Barclays, 7.44%, (US 1 Year CMT T- Note + 3.50%), 11/02/33 (United Kingdom)(2)

$200,000

$199,633

BBVA Bancomer SA, 5.13%, (US 5 Year CMT T-Note + 2.65%), 01/18/33 (Mexico)(1)(2)

 200,000

 169,422

Brookfield Finance, Inc., 2.72%, 04/15/31 (Canada)

140,000

108,484

Nippon Life Insurance Co., 6.25%, (US 5 Year CMT T-Note + 2.95%), 09/13/53 (Japan)(1)(2)

 200,000

 192,533

UBS Group AG, 6.30%, (US 1 Year CMT T- Note + 2.00%), 09/22/34 (Switzerland)(1)(2)

 200,000

 189,518

Total Financials

 1,490,125

 

Government — 7.3%

Angolan Government International Bond, 8.25%, 05/09/28 (Angola)(1)

 200,000

 170,750

Argentine Republic Government International Bond, 3.50%, 07/09/41 (Argentina)(6)

 415,000

 109,132

Brazilian Government International Bond, 6.00%, 10/20/33 (Brazil)

 200,000

 185,500

Dominican Republic International Bond, 4.88%, 09/23/32 (Dominican Republic)(1)

 325,000

 264,063

Ecuador Government International Bond, 6.00%, 07/31/30 (Ecuador)(1)(6)

 120,000

 61,260

Egypt Government International Bond, 7.60%, 03/01/29 (Egypt)(1)

 200,000

 126,000

Hungary Government International Bond, 6.25%, 09/22/32 (Hungary)(1)

 200,000

 192,670

Indonesia Government International Bond, 2.85%, 02/14/30 (Indonesia)

 200,000

 169,696

Ivory Coast Government International Bond, 6.13%, 06/15/33 (Ivory Coast)(1)

 200,000

 164,500

Jordan Government International Bond, 7.50%, 01/13/29 (Jordan)(1)

 200,000

 186,375

Mexico Government International Bond, 3.50%, 02/12/34 (Mexico)

 400,000

 305,600

Morocco Government International Bond, 3.00%, 12/15/32 (Morocco)(1)

 200,000

 150,000

Panama Government International Bond, 3.30%, 01/19/33 (Panama)

 200,000

 147,450

Philippine Government International Bond, 3.70%, 03/01/41 (Philippines)

 200,000

 145,454

Republic of Poland Government International Bond, 4.88%, 10/04/33 (Poland)

80,000

74,296

Republic of South Africa Government International Bond, 4.85%, 09/27/27 (South Africa)

 200,000

 184,875

Saudi Government International Bond, 5.50%, 10/25/32 (Saudi Arabia)(1)

 200,000

 196,250

Serbia International Bond, 6.50%, 09/26/33 (Serbia)(1)

 200,000

 188,276

Turkey Government International Bond, 7.63%, 04/26/29 (Turkey)

 200,000

 191,250

Turkey Government International Bond, 9.13%, 07/13/30 (Turkey)

 200,000

 200,250

Ukraine Government International Bond, 7.75%, 09/01/26 (Ukraine)(1)(7)

 145,000

 42,200


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

43

Security Description

Principal

Value

 

FOREIGN BONDS (continued)

 

Government (continued)

Ukraine Government International Bond, 7.75%, 09/01/26 (Ukraine)(7)

$ 100,000

$28,732

Total Government

 3,484,579

 

Health Care — 0.5%

Cheplapharm Arzneimittel GMBH, 5.50%, 01/15/28 (Germany)(1)

 190,000

 168,715

Teva Pharmaceutical Finance Netherlands III BV, 3.15%, 10/01/26 (Israel)

 70,000

 61,434

Total Health Care

 230,149

 

Industrials — 0.2%

Avolon Holdings Funding Ltd., 4.38%, 05/01/26 (Ireland)(1)

 77,000

 71,799

VistaJet Malta Finance PLC / Vista Management Holding, Inc., 9.50%, 06/01/28 (Switzerland)(1)

 55,000

 42,199

Total Industrials

 113,998

 

Materials — 0.6%

ArcelorMittal SA, 6.80%, 11/29/32 (Luxembourg)

 80,000

 76,664

Mercer International, Inc., 5.13%, 02/01/29 (Germany)

 25,000

 19,633

NOVA Chemicals Corp., 5.00%, 05/01/25
(Canada)
(1)

 48,000

 45,381

Taseko Mines Ltd., 7.00%, 02/15/26 (Canada)(1)

 90,000

 81,723

Teck Resources Ltd., 6.13%, 10/01/35 (Canada)

 80,000

 74,108

Total Materials

297,509

 

Real Estate — 0.3%

Ontario Teachers’ Cadillac Fairview Properties Trust, 2.50%, 10/15/31 (Canada)(1)

 200,000

 147,868

 

Utilities — 0.9%

Electricite de France SA, 6.25%, 05/23/33
(France)
(1)

 200,000

 194,511

ENEL Finance International NV, 7.50%, 10/14/32 (Italy)(1)

 200,000

 206,859

Total Utilities

 401,370

 

Total Foreign Bonds

(Cost $9,572,279)

 8,945,010

 

TERM LOANS — 13.2%

 

Aerospace — 1.1%

Amentum Government Services Holdings LLC, 9.33%,
(1-Month SOFR + 4.00%), 02/10/29
(2)

 14,813

 14,530

Brown Group Holding, LLC, 8.17%, (SOFR + 2.85%), 06/07/28(2)

 86,224

 84,805

Dynasty Acquisition Co, Inc., 9.32%, (1-Month SOFR + 4.00%), 08/16/28(2)

 51,742

 51,211

Dynasty Acquisition Co, Inc., 9.32%, (1-Month SOFR + 4.00%), 08/16/28(2)

 22,175

 21,948

Security Description

Principal

Value

 

TERM LOANS (continued)

 

Aerospace (continued)

Kestrel BidCo, Inc., 8.42%, (1-Month SOFR + 3.10%), 12/11/26(2)

$89,530

$86,658

Mileage Plus Holdings LLC, 10.80%, (3-Month SOFR + 5.40%), 06/21/27(2)

 22,500

 23,225

Peraton Corp., 9.17%, (SOFR + 3.85%), 02/01/28(2)

 168,312

 165,446

Tran, 8.64%, (3-Month SOFR + 3.25%), 08/24/28(2)

 74,768

 74,768

Total Aerospace

 522,591

 

Chemicals — 0.3%

LSF11 A5 Holdco LLC, 9.67%, (1-Month SOFR + 4.35%), 10/15/28(2)

 59,850

 58,822

Nouryon Finance BV, 0.00%, (SOFR + 0.00%), 10/19/28(8)

 29,925

 29,308

Nouryon Finance BV, 9.43%, (SOFR + 4.10%), 10/19/28(2)

 25,000

 24,484

Windsor Holdings III LLC, 9.81%, (1-Month SOFR + 4.50%), 06/21/30(2)

 50,000

 49,915

Total Chemicals

 162,529

 

Consumer Non-Durables — 0.3%

DS Parent, Inc., 11.34%, (6-Month SOFR + 5.75%), 12/10/28(2)

 22,813

 22,603

Kronos Acquisition Holdings Inc., 9.40%, (3-Month SOFR + 4.01%), 12/22/26(2)

119,386

117,236

Total Consumer Non-Durables

 139,839

 

Energy — 0.7%

Freeport LNG Investments, 9.18%, (3-Month SOFR + 3.76%), 11/17/28(2)

 89,541

 88,176

Gip Pilot Acquisition Partners, L.P., 8.39%, (3-Month SOFR + 3.00%), 09/15/30(2)

 15,000

 15,000

Hamilton Projects Acquiror LLC, 9.94%, (1-Month SOFR + 4.61%), 06/17/27(2)

 20,057

 20,024

Medallion Midland Acquisition LP, 9.40%, (3-Month SOFR + 4.01%), 10/18/28(2)

 29,248

 29,325

Oryx Midstream Services Permian Basin, LLC, 8.69%, (1-Month SOFR + 3.36%), 10/05/28(2)

 58,668

 58,651

Traverse Midstream, 9.24%, (3-Month SOFR + 3.85%), 02/12/28(2)

 105,000

 104,934

Total Energy

 316,110

 

Financials — 0.4%

Acrisure LLC, 0.00%, (SOFR + 0.00%), 10/20/30(8)

 35,000

 34,708

AssuredPartners, Inc., 0.00%, (SOFR + 0.00%), 02/13/27(8)

 50,000

 49,629

AssuredPartners, Inc., 0.00%, (SOFR + 0.00%), 02/13/27(8)

 9,996

 9,973

Asurion LLC, 8.69%, (SOFR + 3.36%), 07/31/27(2)

 24,288

 23,256

Blackhawk Network Holdings, Inc., 8.17%, (3-Month SOFR + 2.75%), 06/15/25(2)

 84,235

 83,704

Total Financials

 201,270


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

44

Security Description

Principal

Value

 

TERM LOANS (continued)

 

Food/Tobacco — 1.1%

Del Monte Foods, Inc., 9.68%, (1-Month SOFR + 4.35%), 05/15/29(2)

$104,472

$101,338

Froneri US, Inc., 7.67%, (1-Month SOFR + 2.35%), 01/29/27(2)

 162,533

 161,923

Pegasus Bidco BV, 9.61%, (3-Month SOFR + 4.25%), 07/12/29(2)

 84,512

 84,124

Shearer’s Foods LLC, 8.94%, (SOFR + 3.61%), 09/23/27(2)

 53,955

 53,888

Triton Water Holdings, Inc., 8.90%, (SOFR + 3.51%), 03/31/28(2)

 29,288

 27,820

Tropicana (Naked Juice LLC), 8.74%, (3-Month SOFR + 3.35%), 01/19/29(2)

 124,370

 114,745

Total Food/Tobacco

 543,838

 

Forest Prod/Containers — 0.4%

Kloeckner Pentaplast of America, Inc., 10.48%, (SOFR + 4.98%), 02/12/26(2)

 94,515

 89,553

Mauser Packaging Solutions Holding Co., 9.32%, (1-Month SOFR + 4.00%), 08/31/26(2)

 34,825

 33,865

TricorBraun Holdings, Inc., 8.69%, (1-Month SOFR + 3.36%), 01/29/28(2)

93,968

91,242

Total Forest Prod/Containers

 214,660

 

Gaming/Leisure — 0.4%

ECL Entertainment LLC, 10.14%, (3-Month SOFR + 4.75%), 08/16/30(2)

 60,000

 59,888

Entain Holdings Gibraltar Ltd., 8.99%, (3-Month SOFR + 3.60%), 10/18/29(2)

 9,975

 9,989

J&J Ventures Gaming, LLC, 9.65%, (SOFR + 4.26%), 04/26/28(2)

 19,551

 18,674

One Toronto Gaming, 9.64%, (3-Month SOFR + 4.25%), 07/20/30(2)

 25,000

 25,000

Raptor Acquisition Corp., 9.66%, (3-Month SOFR + 4.26%), 11/01/26(2)

 9,875

 9,882

Scientific Games Holdings LP, 8.91%, (3-Month SOFR + 3.50%), 02/04/29(2)

 84,573

 83,294

Total Gaming/Leisure

 206,727

 

Health Care — 1.6%

Bausch & Lomb Corporation, 9.32%, (1-Month SOFR + 4.00%), 09/14/28(2)

 45,000

 43,397

CHG Healthcare Services, Inc., 8.69%, (1-Month SOFR + 3.36%), 09/22/28(2)

 58,387

 57,851

Hunter US Bidco, Inc., 9.74%, (3-Month SOFR + 4.35%), 08/19/28(2)

 15,797

 15,678

Milano Acquisition Corp., 9.49%, (3-Month SOFR + 4.10%), 10/01/27(2)

 34,024

 32,607

Mozart Borrower LP, 8.69%, (1-Month SOFR + 3.36%), 10/23/28(2)

 133,643

 132,933

Packaging Coordinators Midco, Inc., 9.15%, (SOFR + 3.76%), 11/30/27(2)

 53,846

 53,255

Phoenix Guarantor, Inc., 8.69%, (1-Month SOFR + 3.36%), 03/05/26(2)

 38,596

 38,253

Security Description

Principal

Value

 

TERM LOANS (continued)

 

Health Care (continued)

Phoenix Newco, Inc., 8.69%, (1-Month SOFR + 3.36%), 08/11/28(2)

$30,587

$30,264

Star Parent, Inc., 9.39%, (1-Month SOFR + 4.00%), 09/19/30(2)

 130,000

 124,281

Sunshine Luxembourg VII Sarl, 9.24%, (SOFR + 3.85%), 10/01/26(2)

 104,166

 104,144

Upstream Newco, Inc., 9.89%, (3-Month SOFR + 4.25%), 11/20/26(2)

 21,994

 20,844

Viant Medical Holdings, Inc., 9.19%, (1-Month SOFR + 3.86%), 07/02/25(2)

 93,272

 91,621

Total Health Care

 745,128

 

Housing — 0.3%

Chariot Buyer LLC, 8.67%, (1-Month SOFR + 3.25%), 10/22/28(2)

 40,539

 39,441

SRS Distribution, Inc., 8.92%, (1-Month SOFR + 3.60%), 06/02/28(2)

 4,913

 4,799

SRS Distribution, Inc., 8.94%, (1-Month SOFR + 3.61%), 06/02/28(2)

 108,700

 106,391

Total Housing

 150,631

 

Information Technology — 2.1%

Applied Systems, 9.89%, (3-Month SOFR + 4.50%), 09/19/26(2)

179,100

179,727

Applied Systems, 12.14%, (3-Month SOFR + 6.75%), 09/19/27(2)

 29,460

 29,656

Central Parent, Inc., 9.41%, (3-Month SOFR + 4.00%), 07/06/29(2)

 108,404

 107,930

ConnectWise LLC, 8.94%, (1-Month SOFR + 3.61%), 09/24/28(2)

 39,300

 38,357

Epicor Software Corp, 9.07%, (1-Month SOFR + 3.75%), 07/30/27(2)

 5,000

 5,016

Epicor Software Corp., 8.69%, (1-Month SOFR + 3.36%), 07/30/27(2)

 33,775

 33,639

Ncr Atleos, LLC, 10.18%, (1-Month SOFR + 4.85%), 03/22/29(2)

 125,000

 120,026

Polaris Newco LLC, 9.44%, (1-Month SOFR + 4.11%), 06/02/28(2)

 64,835

 61,350

Project Ruby Ultimate Parent Corp., 8.69%, (SOFR + 3.36%), 03/10/28(2)

 29,250

 28,725

Proofpoint, Inc., 8.69%, (1-Month SOFR + 3.36%), 06/09/28(2)

 29,475

 29,027

RealPage, Inc., 8.44%, (1-Month SOFR + 3.11%), 04/24/28(2)

 34,226

 33,507

Roper Industrial, 9.89%, (3-Month SOFR + 4.50%), 11/22/29(2)

 89,550

 89,470

SOFTWARE AG/MOSEL, 0.00%, (SOFR + 0.00%), 08/01/30(8)

 37,000

 36,954

Sophia LP, 8.92%, (1-Month SOFR + 3.60%), 10/07/27(2)

 24,316

 24,043

UKG, Inc., 8.76%, (3-Month SOFR + 3.35%), 05/04/26(2)

 141,864

 141,299

WORLDPAY, 0.00%, (SOFR + 0.00%), 07/05/31(8)

 35,000

 34,796

Total Information Technology

 993,522


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

45

Security Description

Principal

Value

 

TERM LOANS (continued)

 

Manufacturing — 1.2%

Alliance Laundry Systems LLC, 8.93%, (SOFR + 3.60%), 10/08/27(2)

$32,276

$32,259

Arcline FM Holdings LLC, 10.40%, (3-Month SOFR + 5.01%), 06/23/28(2)

 128,390

 127,202

Arcline FM Holdings LLC, 13.90%, (3-Month SOFR + 8.25%), 06/15/29(2)

 15,000

 14,550

Chart Industries, Inc, 8.66%, (1-Month SOFR + 3.35%), 03/17/30(2)

 59,700

 59,675

CPM Holdings, Inc, 9.83%, (1-Month SOFR + 4.50%), 09/21/28(2)

 69,000

 69,052

Filtration Group Corp., 8.94%, (1-Month SOFR + 3.61%), 10/19/28(2)

 107,104

 106,442

Madison IAQ LLC, 8.70%, (1-Month SOFR + 3.36%), 06/21/28(2)

 39,542

 38,199

Safe Fleet Holdings LLC, 9.19%, (1-Month SOFR + 3.85%), 02/17/29(2)

 118,670

 119,054

Star US Bidco LLC, 9.67%, (1-Month SOFR + 4.35%), 03/17/27(2)

24,117

24,094

Total Manufacturing

 590,527

 

Media/Telecom — Broadcasting — 0.4%

Terrier Media Buyer, Inc., 8.99%, (3-Month SOFR + 3.60%), 12/17/26(2)

 89,846

 81,230

Univision Comm (fka Umbrella), 8.69%, (1-Month SOFR + 3.36%), 03/15/26(2)

 114,415

 113,676

Total Media/Telecom — Broadcasting

 194,906

 

Media/Telecom — Cable/Wireless Video — 0.4%

Directv Financing LLC, 10.44%, (1-Month SOFR + 5.11%), 08/02/27(2)

 118,590

 115,604

Eagle Broadband Investments LLC, 8.65%, (3-Month SOFR + 3.26%), 11/12/27(2)

 59,847

 58,565

Total Media/Telecom — Cable/Wireless Video

 174,169

 

Media/Telecom — Diversified Media — 0.4%

Century DE Buyer LLC, 0.00%, (SOFR + 0.00%), 09/21/30(8)

 30,000

 29,831

Century DE Buyer LLC, 9.39%, (SOFR + 4.00%), 09/21/30(2)

 12,000

 11,932

McGraw-Hill Education, Inc., 10.19%, (1-Month SOFR + 4.86%), 07/28/28(2)

 23,520

 22,340

Neilson Holdings, 10.51%, (3-Month SOFR + 5.10%), 04/11/29(2)

 124,375

 109,101

Total Media/Telecom — Diversified Media

 173,204

 

Media/Telecom — Telecommunications — 0.2%

Altice France SA/France, 9.34%, (3-Month USD LIBOR + 3.69%), 01/31/26(2)

 28,861

 27,045

Numericable U.S. LLC, 8.39%, (3-Month SOFR + 2.75%), 06/22/25(2)

 59,849

 57,979

Total Media/Telecom — Telecommunications

 85,024

 

Metals/Minerals — 0.2%

Covia Holdings LLC, 9.68%, (3-Month SOFR + 4.26%), 07/31/26(2)

 95,000

 94,624

Security Description

Principal

Value

 

TERM LOANS (continued)

 

Retail — 0.5%

EG America LLC, 9.41%, (SOFR + 4.11%), 02/07/25(2)

$101,145

$101,082

PetSmart, Inc., 9.17%, (SOFR + 3.85%), 02/11/28(2)

 128,362

 127,011

Total Retail

 228,093

 

Service — 0.9%

AlixPartners, LLP, 8.19%, (1-Month SOFR + 2.86%), 02/04/28(2)

 10

 10

Brightview Landscapes LLC, 8.63%, (3-Month SOFR + 3.25%), 04/07/29(2)

 73,877

 73,923

DG Investment Intermediate Holdings 2, Inc, 10.07%,
(1-Month SOFR + 4.75%), 03/31/28
(2)

64,836

63,932

DXP Enterprises, Inc., 10.29%, (6-Month SOFR + 4.85%), 10/06/30(2)

 40,000

 39,725

Garda World Security Corp., 9.75%, (3-Month SOFR + 4.35%), 10/30/26(2)

 10,000

 9,984

Kindercare (Kuehg Corp.), 10.39%, (3-Month SOFR + 5.00%), 05/23/30(2)

 80,000

 80,077

TMF Sapphire, 10.41%, (3-Month SOFR + 5.00%), 05/27/28(2)

 35,000

 35,071

University Support Services LLC, 8.67%, (1-Month SOFR + 3.35%), 06/29/28(2)

 125,760

 124,486

Total Service

 427,208

 

Transportation — Automotive — 0.3%

American Axle, 8.94%, (3-Month SOFR + 3.60%), 12/06/29(2)

 48,425

 48,324

PAI Holdco, Inc., 9.39%, (3-Month SOFR + 4.01%), 10/28/27(2)

 44,320

 42,141

Power Solutions, 9.07%, (1-Month SOFR + 3.75%), 05/06/30(2)

 30,000

 29,992

Total Transportation — Automotive

 120,457

 

Utilities — 0.0%(9)

Generation Bridge Northeast LLC, 9.57%, (1-Month SOFR + 4.25%), 08/03/29(2)

 24,909

 24,935

 

Total Term Loans

(Cost $6,288,340)

 6,309,992

 

MORTGAGE BACKED SECURITIES — 12.9%

 

Asset Backed Security — 0.3%

Mission Lane Credit Card Master Trust, Class A, Series 
2023-A, 7.23%, 07/17/28
(1)

 133,000

 131,749

 

Commercial Mortgage Backed Securities — 1.3%

BX Trust, Class D, Series 2019-OC11, 3.94%, 12/09/41(1)(2)(10)

 85,000

 68,511

COMM Mortgage Trust, Class A1, Series 2013-300P, 4.35%, 08/10/30(1)

 165,000

 151,659

COMM Mortgage Trust, Class B, Series 2020-CBM, 3.10%, 02/10/37(1)

 45,000

 42,097

JPMBB Commercial Mortgage Securities Trust, Class AS, Series 2014-C18, 4.44%, 02/15/47(2)(10)

 144,000

 141,542


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

46

Security Description

Principal

Value

 

MORTGAGE BACKED SECURITIES (continued)

 

Commercial Mortgage Backed Securities (continued)

MIRA Trust, Class A, Series 2023-MILE, 6.75%, 06/10/38(1)

$145,000

$141,302

Morgan Stanley Bank of America Merrill Lynch Trust, Class AS, Series 2015-C22, 3.56%, 04/15/48

 60,000

 56,279

Total Commercial Mortgage Backed Securities

 601,390

 

Mortgage Backed Security — 4.8%

Federal Home Loan Mortgage Corporation, 6.00%, 03/01/53

648,229

634,367

Federal National Mortgage Association, 3.50%, 05/01/49

 25,299

 21,465

Federal National Mortgage Association, 5.00%, 11/01/52

 429,922

 397,010

Federal National Mortgage Association, 4.50%, 11/01/52

 410,829

 367,485

Federal National Mortgage Association, 6.00%, 04/01/53

 641,320

 626,297

Federal National Mortgage Association, 5.50%, 07/01/53

 281,308

 267,058

Total Mortgage Backed Security

 2,313,682

 

Residential Mortgage Backed Securities — 6.5%

Ajax Mortgage Loan Trust, Class A1, Series 2019-D, 2.96%, 09/25/65(1)(6)

 52,178

 47,667

AMSR Trust, Class D, Series 2021-SFR3, 2.18%, 10/17/38(1)

 100,000

 86,379

Arroyo Mortgage Trust, Class A1, Series 2019-1, 3.81%, 01/25/49(1)(2)(10)

 120,510

 110,872

Arroyo Mortgage Trust, Class A1, Series 2019-2, 3.35%, 04/25/49(1)(2)(10)

 103,906

 95,257

CAFL Issuer LLC, Class A1, Series 2021-RTL1, 2.24%, 03/28/29(1)(6)

 100,000

 93,205

Cascade MH Asset Trust, Class A1, Series 2021-MH1, 1.75%, 02/25/46(1)

 72,573

 60,858

CIM Trust, Class A1, Series 2022-R2, 3.75%, 12/25/61(1)(2)(10)

 248,971

 221,891

CSMC Trust, Class A1, Series 2020-RPL4, 2.00%, 01/25/60(1)(2)(10)

 99,094

 83,670

Deephaven Residential Mortgage Trust, Class A1, Series 2022-1, 2.21%, 01/25/67(1)(2)(10)

 80,769

 69,542

Ellington Financial Mortgage Trust, Class A1, Series 2022-1, 2.21%, 01/25/67(1)(2)(10)

 126,427

 101,366

INTOWN Mortgage Trust, Class A, Series 2022-STAY, 7.82%, (SOFR + 2.49%), 08/15/39(1)(2)

 159,000

 159,221

Mill City Mortgage Loan Trust, Class B1, Series 2017-3, 3.25%, 01/25/61(1)(2)(10)

 98,024

 76,033

New Residential Mortgage Loan Trust, Class A1, Series 2016-1A, 3.75%, 03/25/56(1)(2)(10)

 38,010

 34,600

New Residential Mortgage Loan Trust, Class A3, Series 2017-2A, 4.00%, 03/25/57(1)(2)(10)

 474,311

 435,008

New Residential Mortgage Loan Trust, Class M2, Series 2019-RPL2, 3.75%, 02/25/59(1)(2)(10)

 100,000

 78,442

RCKT Mortgage Trust, Class A1A, Series 2023-CES1, 6.52%, 06/25/43(1)(2)(10)

 155,828

 154,236

Security Description

Principal

Value

 

MORTGAGE BACKED SECURITIES (continued)

 

Residential Mortgage Backed Securities (continued)

Sequoia Mortgage Trust, Class B1, Series 2013-8, 3.48%, 06/25/43(2)(10)

$56,760

$53,230

Starwood Mortgage Residential Trust, Class A1, Series 2020-1, 2.28%, 02/25/50(1)(2)(10)

43,303

40,190

Towd Point Mortgage Trust, Class A2, Series 2017-1, 3.50%, 10/25/56(1)(2)(10)

 100,000

 96,613

Towd Point Mortgage Trust, Class A2, Series 2017-4, 3.00%, 06/25/57(1)(2)(10)

 225,000

 195,861

Towd Point Mortgage Trust, Class A2, Series 2018-6, 3.75%, 03/25/58(1)(2)(10)

 100,000

 81,892

Towd Point Mortgage Trust, Class M1, Series 2020-1, 3.50%, 01/25/60(1)(2)(10)

 100,000

 76,372

Towd Point Mortgage Trust, Class A2, Series 2021-1, 2.75%, 11/25/61(1)(2)(10)

 100,000

 73,562

Verus Securitization Trust, Class A1, Series 2022-4, 4.47%, 04/25/67(1)(6)

 80,018

 74,456

Verus Securitization Trust, Class A1, Series 2022-5, 3.80%, 04/25/67(1)(6)

 94,661

 83,910

Verus Securitization Trust, Class A1, Series 2022-6, 4.91%, 06/25/67(1)(6)

 120,266

 114,650

Verus Securitization Trust, Class A1, Series 2022-7, 5.15%, 07/25/67(1)(6)

 87,675

 84,480

Visio Trust, Class A1, Series 2019-2, 2.72%, 11/25/54(1)(2)(10)

 235,580

 221,619

Total Residential Mortgage Backed Securities

 3,105,082

 

Total Mortgage Backed Securities

(Cost $6,518,019)

 6,151,903

 

U.S. GOVERNMENT SECURITIES — 8.7%

U.S. Treasury Bill

5.53%, 02/29/24(11)

 310,000

 304,518

U.S. Treasury Bond

1.88%, 11/15/51

 1,005,000

 524,327

3.63%, 05/15/53

 735,000

 573,070

U.S. Treasury Note

2.50%, 04/30/24

 245,000

 241,398

1.00%, 12/15/24

 750,000

 714,522

0.88%, 06/30/26

 265,000

 238,759

4.38%, 08/15/26

 215,000

 211,943

1.38%, 12/31/28

 285,000

 239,779

3.38%, 05/15/33

 1,230,000

 1,087,781

 

Total U.S. Government Securities

(Cost $4,226,677)

4,136,097

 

ASSET BACKED SECURITIES — 7.8%

ACHV ABS Trust, Class B, Series 2023-1PL, 6.80%, 03/18/30(1)

 150,000

 149,879

Affirm Asset Securitization Trust, Class 1A, Series 2022-A, 4.30%, 05/17/27(1)

 70,000

 68,394

Applebee’s Funding LLC / Ihop Funding LLC, Class A2, Series 2023-1A, 7.82%, 03/05/53(1)

 109,000

 107,125


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

47

Security Description

Principal

Value

 

ASSET BACKED SECURITIES (continued)

Aqua Finance Trust, Class A, Series 2017-A, 3.72%, 11/15/35(1)

$27,392

$27,173

Avant Credit Card Master Trust, Class A, Series 2021-1A, 1.37%, 04/15/27(1)

50,000

46,790

BHG Securitization Trust, Class A, Series 2021-A, 1.42%, 11/17/33(1)

 196,072

 183,146

Carvana Auto Receivables Trust, Class D, Series 2019-3A, 3.04%, 04/15/25(1)

 1,835

 1,833

Carvana Auto Receivables Trust, Class E, Series 2019-3A, 4.60%, 07/15/26(1)

 55,000

 54,446

CF Hippolyta LLC, Class A1, Series 2020-1, 1.69%, 07/15/60(1)

 89,945

 81,657

Conn Funding II LP, Class B, Series 2022-A, 9.52%, 12/15/26(1)

 42,667

 42,733

CPS Auto Receivables Trust, Class D, Series 2022-D, 8.73%, 01/16/29(1)

 100,000

 102,697

CPS Auto Receivables Trust, Class E, Series 2019-D, 3.86%, 10/15/25(1)

 49,758

 49,276

Dext ABS LLC, Class A2, Series 2023-1, 5.99%, 03/15/32(1)

 115,000

 113,300

DT Auto Owner Trust, Class D, Series 2023-1A, 6.44%, 11/15/28(1)

 155,000

 151,864

Encina Equipment Finance LLC, Class B, Series 2022-1A, 5.15%, 01/16/29(1)

 100,000

 96,839

Exeter Automobile Receivables Trust, Class E, Series 2019-2A, 4.68%, 05/15/26(1)

 55,000

 54,739

FAT Brands Royalty LLC, Class A2, Series 2021-1A, 4.75%, 04/25/51(1)

 49,750

 44,877

FHF Trust, Class A2, Series 2023-1A, 6.57%, 06/15/28(1)

 119,970

 118,428

GLS Auto Receivables Issuer Trust, Class D, Series 2022-2A, 6.15%, 04/17/28(1)

 65,000

 63,490

Hardee’s Funding LLC, Class A2, Series 2020-1A, 3.98%, 12/20/50(1)

 239,235

 200,974

Hertz Vehicle Financing III LLC, Class C, Series 2022-1A, 2.63%, 06/25/26(1)

 170,000

 158,961

Hertz Vehicle Financing LLC, Class D, Series 2022-4A, 6.56%, 09/25/26(1)

 65,000

 61,816

Hotwire Funding LLC, Class C, Series 2021-1, 4.46%, 11/20/51(1)

 65,000

 53,443

Jack in the Box Funding LLC, Class A2I, Series 2022-1A, 3.45%, 02/26/52(1)

 198,850

 177,271

LAD Auto Receivables Trust, Class D, Series 2021-1A, 3.99%, 11/15/29(1)

 55,000

 51,378

LAD Auto Receivables Trust, Class D, Series 2023-2A, 6.30%, 02/15/31(1)

 135,000

 130,834

Lendbuzz Securitization Trust, Class A2, Series 2023-2A, 7.09%, 10/16/28(1)

 134,000

 133,451

Lobel Automobile Receivables Trust, Class B, Series 2023-1, 7.05%, 09/15/28(1)

 160,000

 156,945

MAPS Trust, Class A, Series 2021-1A, 2.52%, 06/15/46(1)

 27,076

 23,386

MVW Owner Trust, Class A, Series 2019-1A, 2.89%, 11/20/36(1)

 18,795

 18,016

NMEF Funding LLC, Class B, Series 2021-A, 1.85%, 12/15/27(1)

 48,143

 47,479

Security Description

Principal

Value

 

ASSET BACKED SECURITIES (continued)

Octane Receivables Trust, Class B, Series 2020-1A, 1.98%, 06/20/25(1)

$67,340

$66,937

OneMain Direct Auto Receivables Trust, Class C, Series 2022-1A, 5.31%, 06/14/29(1)

 55,000

 52,582

Oportun Funding LLC, Class A, Series 2022-1, 3.25%, 06/15/29(1)

 8,147

 8,084

Santander Drive Auto Receivables Trust, Class C, Series 2022-5, 4.74%, 10/16/28

 100,000

 96,899

Taco Bell Funding LLC, Class A23, Series 2016-1A, 4.97%, 05/25/46(1)

 72,188

 69,547

Tesla Auto Lease Trust, Class B, Series 2023-A, 6.41%, 07/20/27(1)

 147,000

 146,310

TRP LLC, Class A, Series 2021-1, 2.07%, 06/19/51(1)

 66,289

 56,822

United Auto Credit Securitization Trust, Class C, Series 2023-1, 6.28%, 07/10/28(1)

 203,000

 200,362

Upstart Securitization Trust, Class B, Series 2021-2, 1.75%, 06/20/31(1)

 31,741

 31,411

Westlake Automobile Receivables Trust, Class C, Series 2020-3A, 1.24%, 11/17/25(1)

 9,809

 9,763

ZAXBY’S Funding LLC, Class A2, Series 2021-1A, 3.24%, 07/30/51(1)

 230,690

 189,207

 

Total Asset Backed Securities

(Cost $3,794,599)

3,700,564

 

MUNICIPAL BONDS — 0.2%

Broward County Fl Water & Sewer Utility Revenue, 4.00%, 10/01/47

 40,000

 33,818

Metropolitan Transportation Authority, 5.00%, 11/15/45

 60,000

 60,205

Sales Tax Securitization Corp., 3.41%, 01/01/43

 5,000

 3,446

 

Total Municipal Bonds

(Cost $117,510)

 97,469

 

COMMON STOCK — 0.0%(9)

 

Retail — 0.0%(9)

West Marine (Rising Tide)(5)

(Cost $85)

38

 166

 

MONEY MARKET FUND —  2.1%

JP Morgan U.S. Government Money Market Institutional Shares, 5.20%(12)
(Cost $1,014,801)

1,014,801

 1,014,801

 

TOTAL INVESTMENTS — 98.1%

(Cost $49,170,355)

46,735,773

Other Assets in Excess of Liabilities — 1.9%

882,861

Net Assets — 100.0%

$47,618,634


Schedule of Investments — Virtus Newfleet Multi-Sector Bond ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

48

 

(1)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid. At October 31, 2023, the aggregate value of these securities was $19,849,120, or 41.7% of net assets.

(2)Variable rate instrument. The interest rate shown reflects the rate in effect at October 31, 2023.

(3)Perpetual security with no stated maturity date.

(4)Security in default, interest payments are being received during the bankruptcy proceedings.

(5)Security valued at fair value as determined in good faith by or under the direction of the Trustees. This security is disclosed as a Level 3 security in the Fair Value Hierarchy table located after the Schedule of Investments.

(6)Represents step coupon bond. Rate shown reflects the rate in effect as of October 31, 2023.

(7)Security in default, no interest payments are being received during the bankruptcy proceedings.

(8)This loan will settle after October 31, 2023, at which time the interest rate, calculated on the base lending rate and the agreed upon spread on trade date, will be reflected.

(9)Amount rounds to less than 0.05%.

(10)Adjustable rate security with an interest rate that is not based on a published reference index and spread. The rate is based on the structure of the agreement and current market conditions.

(11)Represents a zero coupon bond.  Rate shown reflects the effective yield.

(12)The rate shown reflects the seven-day yield as of October 31, 2023.

Abbreviations:

BAM — Build America Mutual Assurance Company

CMT — Constant Maturity Treasury Index

LIBOR — London InterBank Offered Rate

SOFR — Secured Overnight Financing Rate

USD —  United States Dollar

Currency Abbreviations:

USD —  United States Dollar

The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Corporate Bonds

$

$16,379,052

$719

$16,379,771

Foreign Bonds

 —

 8,945,010

 —

 8,945,010

Term Loans

 —

 6,309,992

 —

 6,309,992

Mortgage Backed Securities

 —

 6,151,903

 —

 6,151,903

U.S. Government Securities

 —

 4,136,097

 —

 4,136,097

Asset Backed Securities

 —

 3,700,564

 —

 3,700,564

Municipal Bonds

 —

 97,469

 —

 97,469

Common Stock

 —

 —

 166

 166

Money Market Fund

 1,014,801

 —

 —

 1,014,801

Total

$1,014,801

$45,720,087

$885

$46,735,773

Security held by the Fund with an end of year value of $719 was transferred from Level 2 to Level 3 due to an decrease in trading activities at year end.

Management has determined that the amount of Level 3 securities compared to total net assets is not material; therefore, the rollforward of Level 3 securities and assumptions are not shown for the year ended October 31, 2023.

Schedule of Investments — Virtus Private Credit Strategy ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

49

Security Description

Shares

Value

 

COMMON STOCKS — 58.4%

 

Financials — 58.4%

Ares Capital Corp.

24,447

$463,515

Bain Capital Specialty Finance, Inc.(1)

30,216

 457,470

Barings BDC, Inc.

53,672

 474,460

BlackRock Capital Investment Corp.(1)

156,461

 511,627

BlackRock TCP Capital Corp.

42,008

 441,084

Blackstone Secured Lending Fund(1)

9,724

 266,146

Capital Southwest Corp.

21,235

 459,525

Carlyle Secured Lending, Inc.

31,771

 432,086

CION Investment Corp.

32,027

 316,427

Crescent Capital BDC, Inc.

31,343

 487,384

Fidus Investment Corp.

21,337

 385,773

FS KKR Capital Corp.

32,181

 609,830

Gladstone Capital Corp.

41,982

 399,669

Gladstone Investment Corp.(1)

28,789

 385,772

Goldman Sachs BDC, Inc.

46,110

 631,246

Golub Capital BDC, Inc.

29,019

 417,874

Hercules Capital, Inc.

26,592

 409,517

Horizon Technology Finance Corp.(1)

44,246

 490,246

Main Street Capital Corp.(1)

8,520

 324,868

MidCap Financial Investment Corp.

38,642

 493,458

Monroe Capital Corp.

37,437

 253,823

New Mountain Finance Corp.

38,812

 480,492

Oaktree Specialty Lending Corp.

25,695

 488,205

OFS Capital Corp.

25,678

 253,699

Oxford Square Capital Corp.

89,297

 258,068

PennantPark Floating Rate Capital Ltd.

54,433

 547,052

PennantPark Investment Corp.

68,899

 425,796

Portman Ridge Finance Corp.

14,065

 240,511

Prospect Capital Corp.(1)

100,721

 517,706

Runway Growth Finance Corp.(1)

26,848

 327,009

Saratoga Investment Corp.

16,159

 379,252

Sixth Street Specialty Lending, Inc.

21,901

 425,098

SLR Investment Corp.

39,376

 559,139

Stellus Capital Investment Corp.

32,950

 411,875

TriplePoint Venture Growth BDC Corp.(1)

62,320

 589,547

WhiteHorse Finance, Inc.

44,358

 521,650

Total Financials

 15,536,899

Total Common Stocks

(Cost $18,094,432)

 15,536,899

 

CLOSED-END FUNDS(2) —  38.6%

Ares Dynamic Credit Allocation Fund, Inc.

38,889

 474,446

BlackRock 2037 Municipal Target Term Trust

3,418

 74,444

BlackRock Debt Strategies Fund, Inc.

40,957

 405,065

BlackRock Floating Rate Income Strategies
Fund, Inc.

31,438

 370,969

BlackRock Floating Rate Income Trust

33,711

 391,722

BlackRock Income Trust, Inc.

43,973

 467,433

BlackRock Innovation and Growth Term Trust

67,960

 429,507

BlackRock Limited Duration Income Trust

35,240

 443,319

Blackstone Senior Floating Rate Term Fund

29,113

 372,647

Security Description

Shares

Value

 

CLOSED-END FUNDS(2) (continued)

 

 

Blackstone Strategic Credit Term Fund

37,410

$398,042

BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc.(1)

49,793

 375,439

Eaton Vance Floating-Rate Income Trust(1)

33,684

 396,124

Eaton Vance Senior Floating-Rate Trust

34,221

 398,333

Eaton Vance Senior Income Trust(1)

73,394

 424,217

First Trust Senior Floating Rate Income Fund II

52,083

 505,726

Invesco Dynamic Credit Opportunity Fund

3,042

34,074

Invesco Quality Municipal Income Trust

34,505

 281,561

Invesco Senior Income Trust

128,312

 500,417

KKR Income Opportunities Fund

46,929

 532,644

Nuveen Credit Strategies Income Fund

121,264

 592,981

Nuveen Floating Rate Income Fund

58,670

 459,386

Oxford Lane Capital Corp.

169,226

 802,131

Pioneer Floating Rate Fund, Inc.

51,826

 446,740

XAI Octagon Floating Rate Alternative Income Term Trust

97,765

 678,489

Total Closed-End Funds

(Cost $11,907,055)

 10,255,856

 

SECURITIES LENDING COLLATERAL — 9.7%

 

Money Market Fund — 9.7%

Dreyfus Government Cash Management Fund, Institutional Shares, 5.23%(3)(4)

(Cost $2,571,040)

2,571,040

 2,571,040

 

TOTAL INVESTMENTS — 106.7%

(Cost $32,572,527)

28,363,795

Liabilities in Excess of Other Assets — (6.7)%

(1,769,804

)

Net Assets — 100.0%

$26,593,991

___________

(1)All or a portion of the security was on loan. The aggregate market value of securities on loan was $2,527,935; total market value of collateral held by the Fund was $2,571,040.

(2)Shares of each fund are publicly offered, and each prospectus and annual report are publicly available.

(3)Represents securities purchased with cash collateral received for securities on loan.

(4)The rate shown reflects the seven-day yield as of October 31, 2023.


Schedule of Investments — Virtus Private Credit Strategy ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

50

The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$15,536,899

$

$

$15,536,899

Closed-End Funds

 10,255,856

 —

 —

 10,255,856

Money Market Fund

 2,571,040

 —

 —

 2,571,040

Total

$28,363,795

$

$

$28,363,795

Schedule of Investments — Virtus Real Asset Income ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

51

Security Description

Shares

Value

 

COMMON STOCKS — 96.5%

 

Communication Services — 6.7%

BCE, Inc. (Canada)

5,112

$189,809

Cogent Communications Holdings, Inc.

3,089

 200,723

KT Corp. (South Korea)(1)

16,541

 199,815

Lumen Technologies, Inc.*

131,621

 192,167

Mobile TeleSystems PJSC (Russia)(2)

387,202

 4

TELUS Corp. (Canada)

12,062

 194,440

Vodafone Group PLC (United Kingdom)(1)

20,310

 187,664

Total Communication Services

 1,164,622

 

Consumer Staples — 2.2%

Alico, Inc.

7,861

 192,123

Fresh Del Monte Produce, Inc.

7,815

 195,375

Total Consumer Staples

 387,498

 

Energy — 23.3%

Cheniere Energy Partners LP(3)

3,583

 199,788

ConocoPhillips

1,699

 201,841

Coterra Energy, Inc.

7,769

 213,648

Crescent Point Energy Corp. (Canada)

25,592

 204,992

Delek Logistics Partners LP

4,772

 220,562

Devon Energy Corp.

4,371

 203,557

Diamondback Energy, Inc.

1,344

 215,470

Dorchester Minerals LP(3)

7,027

 196,053

Enbridge, Inc. (Canada)

5,915

 189,517

EOG Resources, Inc.

1,653

 208,691

Geopark Ltd. (Colombia)

20,047

 198,064

Hess Midstream LP Class A

6,827

 204,810

Kimbell Royalty Partners LP

13,267

 213,864

Natural Resource Partners LP

2,641

 174,306

Permian Basin Royalty Trust

9,390

 186,392

Petroleo Brasileiro SA (Brazil)(1)

13,530

 202,950

Pioneer Natural Resources Co.

911

 217,729

Sabine Royalty Trust(3)

3,151

 181,970

TC Energy Corp. (Canada)

5,606

 193,127

Viper Energy Partners LP

7,244

 206,309

Total Energy

 4,033,640

 

Materials — 18.7%

Agnico Eagle Mines Ltd. (Canada)

4,124

 193,457

Anglogold Ashanti PLC (United Kingdom)

11,074

 197,560

B2Gold Corp. (Canada)

65,177

 210,522

Barrick Gold Corp. (Canada)

12,649

 202,131

Braskem SA Class A (Brazil)*(1)(3)

23,600

 150,804

CVR Partners LP(3)

2,579

 203,303

Dow, Inc.

3,969

 191,861

DRDGOLD Ltd. (South Africa)(1)

22,781

 193,866

Gerdau SA (Brazil)(1)

41,284

 179,172

Gold Fields Ltd. (South Africa)(1)

16,928

 220,403

ICL Group Ltd. (Israel)(3)

36,126

 174,489

Newmont Corp.

5,004

 187,500

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Materials (continued)

Pan American Silver Corp. (Canada)

13,128

$191,800

Southern Copper Corp. (Mexico)

2,672

 189,445

SunCoke Energy, Inc.

20,835

 198,141

Ternium SA (Mexico)(1)

5,313

 199,184

Tronox Holdings PLC

15,090

 161,312

Total Materials

 3,244,950

 

Real Estate — 30.6%

Agree Realty Corp.

3,552

 198,699

Alexander & Baldwin, Inc.

11,939

 188,636

Alexandria Real Estate Equities, Inc.

1,977

 184,118

American Assets Trust, Inc.

10,518

 186,695

American Tower Corp.

1,205

 214,719

Camden Property Trust

2,039

 173,070

CareTrust REIT, Inc.

9,900

 213,048

Crown Castle, Inc.

2,178

202,511

CTO Realty Growth, Inc.

12,418

 201,047

CubeSmart

5,205

 177,439

Digital Realty Trust, Inc.

1,637

 203,577

EastGroup Properties, Inc.

1,205

 196,716

Equity LifeStyle Properties, Inc.

3,043

 200,229

Essential Properties Realty Trust, Inc.

8,958

 196,628

Essex Property Trust, Inc.

927

 198,304

Extra Space Storage, Inc.

1,653

 171,234

First Industrial Realty Trust, Inc.

4,124

 174,445

Four Corners Property Trust, Inc.

8,603

 183,244

Getty Realty Corp.

7,012

 186,660

Healthcare Realty Trust, Inc.

13,066

 187,497

Innovative Industrial Properties, Inc.

2,487

 178,641

Invitation Homes, Inc.

6,147

 182,504

Medical Properties Trust, Inc.(3)

38,180

 182,500

Mid-America Apartment Communities, Inc.

1,529

 180,651

National Storage Affiliates Trust

6,178

 176,197

Sun Communities, Inc.

1,637

 182,100

Terreno Realty Corp.

3,491

 186,001

VICI Properties, Inc.

6,734

 187,879

Total Real Estate

 5,294,989

 

Utilities — 15.0%

Alliant Energy Corp.

3,954

 192,916

American Electric Power Co., Inc.

2,533

 191,343

Black Hills Corp.

3,753

 181,457

Cia Energetica de Minas Gerais (Brazil)(1)

78,877

 179,051

Cia Paranaense de Energia (Brazil)(1)

22,627

 184,636

CMS Energy Corp.

3,583

 194,700

Eversource Energy

3,166

 170,299

Fortis, Inc. (Canada)(3)

5,035

 200,040

National Grid PLC (United Kingdom)(1)(3)

3,166

 190,435

New Jersey Resources Corp.

4,772

 193,648

NextEra Energy Partners LP

4,232

 114,560


Schedule of Investments — Virtus Real Asset Income ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

52

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Utilities (continued)

NiSource, Inc.

7,491

$188,474

NRG Energy, Inc.

5,344

 226,479

Portland General Electric Co.

4,711

 188,534

Total Utilities

 2,596,572

Total Common Stocks

(Cost $22,093,995)

 16,722,271

 

SECURITIES LENDING COLLATERAL — 5.7%

 

Money Market Fund — 5.7%

Dreyfus Government Cash Management Fund, Institutional Shares, 5.23%(4)(5)

(Cost $984,193)

984,193

 984,193

Security Description

Shares

Value

 

TOTAL INVESTMENTS — 102.2%

(Cost $23,078,188)

$17,706,464

Liabilities in Excess of Other Assets — (2.2)%

(386,516)

Net Assets — 100.0%

$17,319,948

___________

*Non-income producing security.

(1)American Depositary Receipts.

(2)Security valued at fair value as determined in good faith by or under the direction of the Trustees. This security is disclosed as a Level 3 security in the Fair Value Hierarchy table located after the Schedule of Investments.

(3)All or a portion of the security was on loan. The aggregate market value of securities on loan was $1,138,483; total market value of collateral held by the Fund was $1,166,836. Market value of the collateral held includes non-cash U.S. Treasury securities having a value of $182,643.

(4)Represents securities purchased with cash collateral received for securities on loan.

(5)The rate shown reflects the seven-day yield as of October 31, 2023.


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$16,722,267

$

$4

$16,722,271

Money Market Fund

 984,193

 —

 —

 984,193

Total

$17,706,460

$

$4

$17,706,464

The value of level 3 security represents valuations of Russian Common Stock for which Management has determined include significant unobservable inputs as of October 31, 2023.

There were no transfers into or out of Level 3 related to security held at October 31, 2023.

Management has determined that the amount of Level 3 securities compared to total net assets is not material; therefore, the rollforward of Level 3 securities and assumptions are not shown for the year ended October 31, 2023.

Schedule of Investments — Virtus WMC International Dividend ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

53

Security Description

Shares

Value

 

COMMON STOCKS — 98.1%

 

Australia — 9.4%

Ampol Ltd.

824

$16,653

BHP Group Ltd.

7,641

 215,694

Computershare Ltd.

2,417

 38,009

Fortescue Metals Group Ltd.

3,697

 52,298

Glencore PLC

30,970

 163,801

Rio Tinto PLC

3,523

 225,021

Woodside Energy Group Ltd.

4,059

 88,213

Total Australia

 799,689

 

Austria — 1.2%

OMV AG

2,356

 103,106

 

Brazil — 0.5%

Yara International ASA

1,185

 38,719

 

Canada — 9.3%

Algonquin Power & Utilities Corp.

8,004

 40,287

BCE, Inc.

2,515

 93,364

Canadian Imperial Bank of Commerce

1,477

 52,093

Emera, Inc.

2,529

 82,832

Enbridge, Inc.

2,676

 85,756

IGM Financial, Inc.

356

 8,015

Keyera Corp.

3,559

 82,767

Manulife Financial Corp.

8,892

 154,788

TC Energy Corp.

2,482

 85,481

TELUS Corp.

6,774

 109,224

Total Canada

 794,607

 

China — 2.1%

BOC Hong Kong Holdings Ltd.

32,088

 84,882

SITC International Holdings Co., Ltd.

56,259

 86,560

Xinyi Glass Holdings Ltd.

8,940

 10,271

Total China

 181,713

 

Denmark — 1.0%

Tryg A/S

4,499

 87,795

 

Finland — 1.1%

Kesko OYJ Class B

5,270

 89,024

 

France — 7.1%

AXA SA

3,505

 103,675

Bouygues SA

3,194

 112,235

Engie SA

5,534

 87,856

Orange SA

7,122

 83,723

TotalEnergies SE

3,328

 222,550

Total France

 610,039

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Germany — 3.3%

Allianz SE

842

$196,804

Deutsche Post AG

1,533

 59,627

Telefonica Deutschland Holding AG

13,777

 23,375

Total Germany

 279,806

 

Hong Kong — 3.0%

HKT Trust & HKT Ltd.

95,436

 98,787

MTR Corp. Ltd.

13,154

 49,168

Power Assets Holdings Ltd.

22,699

 108,488

Total Hong Kong

 256,443

 

Israel — 0.2%

Bank Leumi Le—Israel BM

2,779

 17,869

 

Italy — 3.9%

Assicurazioni Generali SpA

5,806

 115,157

Enel SpA

14,351

 90,927

Eni SpA

602

 9,827

Intesa Sanpaolo SpA

33,940

 88,218

Snam SpA

5,802

 26,582

Total Italy

 330,711

 

Japan — 15.4%

Canon, Inc.

3,549

83,144

Daito Trust Construction Co., Ltd.

832

 88,648

Daiwa House Industry Co., Ltd.

328

 8,931

Isuzu Motors Ltd.

6,442

 70,572

Japan Tobacco, Inc.

7,856

 182,490

Komatsu Ltd.

2,748

 62,783

Obic Co., Ltd.

189

 27,738

Otsuka Corp.

379

 15,060

Persol Holdings Co., Ltd.

35,755

 52,910

SBI Holdings, Inc.

4,111

 87,522

SCSK Corp.

5,256

 89,065

Sekisui House Ltd.

6,246

 121,108

SoftBank Corp.

14,855

 167,097

Sumitomo Corp.

1,696

 32,880

Takeda Pharmaceutical Co., Ltd.

2,659

 71,275

Tokio Marine Holdings, Inc.

3,268

 72,076

Trend Micro, Inc.

826

 30,746

USS Co., Ltd.

2,967

 51,412

Total Japan

 1,315,457

 

Netherlands — 0.4%

ASR Nederland NV

226

 8,418

Koninklijke Ahold Delhaize NV

841

 24,916

Total Netherlands

 33,334


Schedule of Investments — Virtus WMC International Dividend ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

54

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

Norway — 3.2%

Aker BP ASA

4,065

$116,845

Equinor ASA

2,533

 84,906

Telenor ASA

7,208

 73,655

Total Norway

 275,406

 

Singapore — 5.1%

CapitaLand Integrated Commercial Trust

6,695

 8,606

DBS Group Holdings Ltd.

3,566

 85,559

Mapletree Pan Asia Commercial Trust

36,513

 35,469

Oversea—Chinese Banking Corp. Ltd.

20,460

 189,484

Singapore Technologies Engineering Ltd.

35,576

 97,700

United Overseas Bank Ltd.

819

 16,163

Total Singapore

 432,981

 

Spain — 3.6%

ACS Actividades de Construccion y Servicios SA

2,489

 89,990

Aena SME SA(1)

166

 24,019

CaixaBank SA

21,755

 88,278

Enagas SA

5,969

 99,758

Iberdrola SA

787

 8,744

Total Spain

 310,789

 

Sweden — 0.9%

Tele2 AB Class B

10,615

 75,259

 

Switzerland — 8.6%

Adecco Group AG

2,698

 101,555

Kuehne + Nagel International AG

30

 8,063

Novartis AG

2,714

 252,231

SGS SA

632

 51,399

Zurich Insurance Group AG

686

 324,731

Total Switzerland

 737,979

Security Description

Shares

Value

 

COMMON STOCKS (continued)

 

United Kingdom — 11.0%

British American Tobacco PLC

2,872

$85,664

HSBC Holdings PLC

1,615

 11,626

Imperial Brands PLC

7,025

 149,510

Legal & General Group PLC

32,943

 84,646

M&G PLC

9,798

23,604

National Grid PLC

9,770

 116,208

Phoenix Group Holdings PLC

15,384

 84,854

St James’s Place PLC

2,808

 21,829

Unilever PLC

7,036

 332,584

Vodafone Group PLC

31,967

 29,413

Total United Kingdom

 939,938

 

United States — 7.8%

Sanofi SA

3,281

 297,518

Stellantis NV

9,335

 173,842

Swiss Re AG

1,806

 196,791

Total United States

 668,151

Total Common Stocks

(Cost $8,457,406)

 8,378,815

 

PREFERRED STOCKS — 1.0%

 

Germany — 1.0%

Bayerische Motoren Werke AG, 10.25%

982

 83,280

Total Preferred Stocks

(Cost $92,157)

 83,280

 

TOTAL INVESTMENTS — 99.1%

(Cost $8,549,563)

8,462,095

Other Assets in Excess of Liabilities — 0.9%

80,982

Net Assets — 100.0%

$8,543,077

___________

(1)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid. At October 31, 2023, the aggregate value of these securities was $24,019, or 0.3% of net assets.


The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$8,378,815

$

$

$8,378,815

Preferred Stocks

 83,280

 —

 —

 83,280

Total

$8,462,095

$

$

$8,462,095

Statements of Assets and Liabilities

October 31, 2023

The accompanying notes are an integral part of these financial statements.

55

InfraCap REIT
Preferred ETF

Virtus InfraCap U.S.
Preferred Stock ETF

Virtus LifeSci Biotech
Clinical Trials ETF

Virtus LifeSci Biotech
Products ETF

Assets:

Investments, at cost

$68,056,854

$873,513,506

$15,846,810

$16,630,105

Investments, at value (including securities
on loan)
(a)

55,796,759

768,110,753

8,405,363

13,890,213

Cash

705,953

2,268,578

275,392

119,704

Receivables:

Dividends and interest

83,121

773,701

532

242

Capital shares sold

3,647,217

Securities lending

2,647

152

Tax reclaim

85,888

3,637

284

Investment securities sold

644,382

Prepaid expenses

229

229

229

229

Total Assets

56,586,062

775,530,748

8,687,800

14,010,824

Liabilities:

Bank borrowings

158,957,427

Payables:

Investment securities purchased

5,962,776

Collateral for securities on loan

647,190

Interest expense

920,234

Advisory fees

21,907

411,895

5,517

9,647

Total Liabilities

21,907

166,252,332

652,707

9,647

Net Assets

$56,564,155

$609,278,416

$8,035,093

$14,001,177

Net Assets Consist of:

Paid-in capital

$81,363,058

$730,320,797

$73,057,819

$33,115,341

Total distributable earnings
(accumulated deficit)

(24,798,903

)

(121,042,381

)

(65,022,726

)

(19,114,164

)

Net Assets

$56,564,155

$609,278,416

$8,035,093

$14,001,177

Shares outstanding (unlimited number of shares of beneficial interest authorized,
no par value)

3,450,004

33,250,004

450,004

300,004

Net asset value per share

$16.40

$18.32

$17.86

$46.67

(a)Market value of securities on loan

$

$

$1,299,727

$2,169,903

Statements of Assets and Liabilities (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

56

Virtus Newfleet Multi-Sector Bond ETF

Virtus Private Credit Strategy ETF

Virtus Real Asset Income ETF

Virtus WMC International Dividend ETF

Assets:

Investments, at cost

$49,170,355

$32,572,527

$23,078,188

$8,549,563

Investments, at value (including securities
on loan)
(a)

46,735,773

28,363,795

17,706,464

8,462,095

Cash

82,142

752,019

985,971

21,064

Foreign currency(b)

4,024

Receivables:

Investment securities sold

778,839

5,762

5

Dividends and interest

503,586

60,585

66,376

26,835

Due from Adviser

14,642

Securities lending

10,966

2,003

Tax reclaim

3,704

34,501

Prepaid expenses

2,290

172

172

229

Other assets

43,562

Total Assets

48,117,272

29,187,537

18,814,014

8,548,753

Liabilities:

Payables:

Investment securities purchased

370,005

501,742

Collateral for securities on loan

2,571,040

984,193

Advisory fees

43,003

22,506

8,131

3,560

Professional fees

35,374

Trustee fees

12,883

Other accrued expenses

37,373

2,116

Total Liabilities

498,638

2,593,546

1,494,066

5,676

Net Assets

$47,618,634

$26,593,991

$17,319,948

$8,543,077

Net Assets Consist of:

Paid-in capital

$55,323,006

$40,648,616

$66,850,408

$8,972,705

Total distributable earnings
(accumulated deficit)

(7,704,372

)

(14,054,625

)

(49,530,460

)

(429,628

)

Net Assets

$47,618,634

$26,593,991

$17,319,948

$8,543,077

Shares outstanding (unlimited number of shares of beneficial interest authorized,
no par value)

2,250,004

1,300,004

800,004

350,004

Net asset value per share

$21.16

$20.46

$21.65

$24.41

(a)Market value of securities on loan

$

$2,527,935

$1,138,483

$

(b)Foreign currency, at cost

$

$

$

$4,024

Statements of Operations

For the Year Ended October 31, 2023

The accompanying notes are an integral part of these financial statements.

57

InfraCap REIT Preferred ETF

Virtus InfraCap U.S. Preferred Stock ETF

Virtus LifeSci Biotech Clinical Trials ETF

Virtus LifeSci Biotech Products ETF

Investment Income:

Dividend income (net of foreign withholding taxes)

$4,192,001

$56,004,931

$90,032

$21,411

Interest income

8,822

39,951

6,540

3,939

Securities lending, net of fees

34,934

2,260

Total Investment Income

4,200,823

56,044,882

131,506

27,610

 

Expenses:

Advisory fees

271,412

4,383,815

102,495

137,630

Interest expenses

9,432,187

Total Expenses

271,412

13,816,002

102,495

137,630

Net Investment Income (Loss)

3,929,411

42,228,880

29,011

(110,020

)

 

Net Realized Gain (Loss) on:

Investments

(2,080,284

)

(22,845,486

)

(5,025,483

)

1,161,759

In-kind redemptions

80,465

2,482,540

998,700

525,159

Securities sold short

36,600

Total Net Realized Gain (Loss)

(1,999,819

)

(20,326,346

)

(4,026,783

)

1,686,918

 

Change in Net Unrealized Appreciation (Depreciation) on:

Investments

2,474,881

17,688,788

(63,857

)

(1,260,331

)

Total Change in Net Unrealized Appreciation (Depreciation)

2,474,881

17,688,788

(63,857

)

(1,260,331

)

Net Realized and Change in Unrealized Gain (Loss)

475,062

(2,637,558

)

(4,090,640

)

426,587

Net Increase (Decrease) in Net Assets Resulting
from Operations

$4,404,473

$39,591,322

$(4,061,629

)

$316,567

Foreign withholding taxes

$

$217,409

$

$

The accompanying notes are an integral part of these financial statements.

58

Statements of Operations (continued)

For the Year Ended October 31, 2023

Virtus Newfleet
Multi-Sector
Bond ETF

Virtus Private
Credit Strategy
ETF

Virtus Real Asset
Income ETF

Virtus WMC
International
Dividend ETF

Investment Income:

Dividend income (net of foreign withholding taxes)

$

$2,989,694

$934,615

$423,564

Interest income

3,506,823

11,679

19,756

1,035

Securities lending, net of fees

108,684

63,710

Total Investment Income

3,506,823

3,110,057

1,018,081

424,599

 

Expenses:

Advisory fees

244,830

185,057

155,018

39,569

Professional fees

46,108

Accounting and administration fees

45,265

Pricing fees

44,940

Transfer agent fees

20,744

Trustee fees

11,671

Exchange listing fees

9,329

Custody fees

5,598

Report to shareholders fees

5,340

Insurance fees

4,114

Total Expenses

437,939

185,057

155,018

39,569

Less expense waivers/reimbursements

(168,746

)

Net Expenses

269,193

185,057

155,018

39,569

Net Investment Income

3,237,630

2,925,000

863,063

385,030

 

Net Realized Gain (Loss) on:

Investments

(1,528,857

)

(2,032,194

)

(5,475,337

)

(242,321

)

In-kind redemptions

(2,091,215

)

(1,571,352

)

Foreign currency transactions

21

323

Total Net Realized Loss

(1,528,857

)

(4,123,409

)

(7,046,668

)

(241,998

)

 

Change in Net Unrealized Appreciation (Depreciation) on:

Investments

569,218

1,195,696

7,181,691

1,001,992

Foreign currency translations

(25

)

830

Total Change in Net Unrealized Appreciation

569,218

1,195,696

7,181,666

1,002,822

Net Realized and Change in Unrealized Gain (Loss)

(959,639

)

(2,927,713

)

134,998

760,824

Net Increase (Decrease) in Net Assets Resulting
from Operations

$2,277,991

$(2,713

)

$998,061

$1,145,854

Foreign withholding taxes

$

$

$31,473

$57,951

Statements of Changes in Net Assets

For the Year Ended October 31, 2023

The accompanying notes are an integral part of these financial statements.

59

InfraCap REIT Preferred ETF

Virtus InfraCap
U.S. Preferred Stock ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

Increase (Decrease) in Net Assets Resulting from Operations:

Net investment income

$3,929,411

$2,383,786

$42,228,880

$35,209,915

Net realized gain (loss)

(1,999,819

)

(7,418,657

)

(20,326,346

)

20,290,785

Net change in unrealized appreciation (depreciation)

2,474,881

(18,257,024

)

17,688,788

(167,879,060

)

Net increase (decrease) in net assets resulting from operations

4,404,473

(23,291,895

)

39,591,322

(112,378,360

)

Distributions to Shareholders

(3,748,137

)

(3,360,547

)

(46,177,337

)

(45,741,008

)

Distributions to Shareholders from return of capital

(1,285,869

)

(1,673,459

)

(10,423,671

)

Total distributions

(5,034,006

)

(5,034,006

)

(56,601,008

)

(45,741,008

)

 

Shareholder Transactions:

Proceeds from shares sold

8,236,173

11,130,838

190,529,617

132,836,150

Cost of shares redeemed

(5,106,974

)

(16,279,277

)

(20,377,242

)

(45,701,870

)

Net increase (decrease) in net assets resulting
from shareholder transactions

3,129,199

(5,148,439

)

170,152,375

87,134,280

Increase (decrease) in net assets

2,499,666

(33,474,340

)

153,142,689

(70,985,088

)

 

Net Assets:

Beginning of year

54,064,489

87,538,829

456,135,727

527,120,815

End of year

$56,564,155

$54,064,489

$609,278,416

$456,135,727

 

Changes in Shares Outstanding:

Shares outstanding, beginning of year

3,300,004

3,600,004

24,500,004

20,950,004

Shares sold

450,000

500,000

9,750,000

5,650,000

Shares redeemed

(300,000

)

(800,000

)

(1,000,000

)

(2,100,000

)

Shares outstanding, end of year

3,450,004

3,300,004

33,250,004

24,500,004

The accompanying notes are an integral part of these financial statements.

60

Statements of Changes in Net Assets (continued)

For the Year Ended October 31, 2023

Virtus LifeSci
Biotech Clinical Trials ETF

Virtus LifeSci Biotech Products ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

Increase (Decrease) in Net Assets Resulting from Operations:

Net investment income (loss)

$29,011

$(121,956

)

$(110,020

)

$(99,780

)

Net realized gain (loss)

(4,026,783

)

(16,056,251

)

1,686,918

(3,535,364

)

Net change in unrealized appreciation (depreciation)

(63,857

)

1,184,424

(1,260,331

)

1,302,023

Net increase (decrease) in net assets resulting from operations

(4,061,629

)

(14,993,783

)

316,567

(2,333,121

)

 

Shareholder Transactions:

Proceeds from shares sold

5,967,004

2,288,842

Cost of shares redeemed

(6,019,212

)

(8,347,720

)

(2,664,613

)

(6,931,707

)

Net decrease in net assets resulting
from shareholder transactions

(6,019,212

)

(2,380,716

)

(2,664,613

)

(4,642,865

)

Decrease in net assets

(10,080,841

)

(17,374,499

)

(2,348,046

)

(6,975,986

)

 

Net Assets:

Beginning of year

18,115,934

35,490,433

16,349,223

23,325,209

End of year

$8,035,093

$18,115,934

$14,001,177

$16,349,223

 

Changes in Shares Outstanding:

Shares outstanding, beginning of year

700,004

800,004

350,004

450,004

Shares sold

150,000

50,000

Shares redeemed

(250,000

)

(250,000

)

(50,000

)

(150,000

)

Shares outstanding, end of year

450,004

700,004

300,004

350,004

The accompanying notes are an integral part of these financial statements.

61

Statements of Changes in Net Assets (continued)

For the Year Ended October 31, 2023

Virtus Newfleet
Multi-Sector Bond ETF

Virtus Private Credit Strategy ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

Increase (Decrease) in Net Assets Resulting from Operations:

Net investment income

$3,237,630

$1,021,605

$2,925,000

$2,703,114

Net realized loss

(1,528,857

)

(999,178

)

(4,123,409

)

(1,619,996

)

Net change in unrealized appreciation (depreciation)

569,218

(3,244,164

)

1,195,696

(5,277,112

)

Net increase (decrease) in net assets resulting from operations

2,277,991

(3,221,737

)

(2,713

)

(4,193,994

)

Distributions to Shareholders

(3,089,988

)

(988,884

)

(2,724,501

)

(2,736,879

)

 

Shareholder Transactions:

Proceeds from shares sold

40,472,226

35,945,947

36,194,903

15,270,250

Cost of shares redeemed

(33,834,144

)

(10,113,540

)

(28,608,764

)

(17,793,017

)

Net increase (decrease) in net assets resulting
from shareholder transactions

6,638,082

25,832,407

7,586,139

(2,522,767

)

Increase (decrease) in net assets

5,826,085

21,621,786

4,858,925

(9,453,640

)

 

Net Assets:

Beginning of year

41,792,549

20,170,763

21,735,066

31,188,706

End of year

$47,618,634

$41,792,549

$26,593,991

$21,735,066

 

Changes in Shares Outstanding:

Shares outstanding, beginning of year

1,950,004

800,004

1,050,004

1,200,004

Shares sold

1,850,000

1,600,000

1,650,000

600,000

Shares redeemed

(1,550,000

)

(450,000

)

(1,400,000

)

(750,000

)

Shares outstanding, end of year

2,250,004

1,950,004

1,300,004

1,050,004

The accompanying notes are an integral part of these financial statements.

62

Statements of Changes in Net Assets (continued)

For the Year Ended October 31, 2023

Virtus Real Asset Income ETF

Virtus WMC International
Dividend ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

Increase (Decrease) in Net Assets Resulting from Operations:

Net investment income

$863,063

$4,609,440

$385,030

$395,039

Net realized gain (loss)

(7,046,668

)

11,560,635

(241,998

)

(113,707

)

Net change in unrealized appreciation (depreciation)

7,181,666

(30,510,644

)

1,002,822

(1,272,595

)

Net increase (decrease) in net assets resulting from operations

998,061

(14,340,569

)

1,145,854

(991,263

)

Distributions to Shareholders

(1,496,841

)

(4,478,009

)

(380,432

)

(825,604

)

 

Shareholder Transactions:

Proceeds from shares sold

74,482,507

1,270,370

1,182,444

Cost of shares redeemed

(27,601,677

)

(149,826,507

)

Net increase (decrease) in net assets resulting from shareholder transactions

(27,601,677

)

(75,344,000

)

1,270,370

1,182,444

Increase (decrease) in net assets

(28,100,457

)

(94,162,578

)

2,035,792

(634,423

)

 

Net Assets:

Beginning of year

45,420,405

139,582,983

6,507,285

7,141,708

End of year

$17,319,948

$45,420,405

$8,543,077

$6,507,285

 

Changes in Shares Outstanding:

Shares outstanding, beginning of year

1,950,004

5,200,004

300,004

250,004

Shares sold

2,750,000

50,000

50,000

Shares redeemed

(1,150,000

)

(6,000,000

)

Shares outstanding, end of year

800,004

1,950,004

350,004

300,004

Statement of Cash Flows

For the Year Ended October 31, 2023

The accompanying notes are an integral part of these financial statements.

63

Virtus InfraCap
U.S. Preferred
Stock ETF

Cash Flows From Operating Activities:

Net increase (decrease) in net assets from operations

$39,591,322

Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by
(used in) operating activities:

Purchases of investment securities

(177,062,607

)

Proceeds from sales of investments

217,999,633

Net proceeds from securities sold short

560,466

Payments made to cover securities sold short

(523,866

)

Net realized (gain) loss on investments

22,845,486

Net realized (gain) loss on securities sold short

(36,600

)

Net realized (gain) loss on in-kind redemptions

(2,482,540

)

Net change in unrealized (appreciation) depreciation on investments

(17,688,788

)

(Increase) decrease in due from brokers

9,014

(Increase) decrease in dividends and interest receivable

(239,186

)

(Increase) decrease in prepaid expenses

(58

)

(Increase) decrease in tax reclaim receivable

(62,685

)

Increase (decrease) in advisory fees payable

99,153

Increase (decrease) in interest expense

864,985

Net cash provided by (used in) operating activities

83,873,729

 

Cash Flows provided by (used in) Financing Activities:

Proceeds from borrowings

22,788,498

Payments for fund shares sold in excess of in-kind creations

(49,021,028

)

Distributions paid

(56,601,008

)

Net cash provided by (used in) financing activities

(82,833,538

)

 

Net increase (decrease) in cash

1,040,191

Cash, beginning of year

1,228,387

Cash, end of year

$2,268,578

 

Supplemental information:

Interest paid on borrowings

$8,567,202

 

Non-cash financing activities:

In-kind creations — Issued

241,642,109

In-kind creations — Redeemed

26,115,923

Financial Highlights

October 31, 2023

The accompanying notes are an integral part of these financial statements.

64

InfraCap REIT Preferred ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding
throughout each year presented:

Net asset value, beginning of year

$16.38

$24.32

$21.71

$25.26

$23.65

Investment operations:

Net investment income1

1.13

0.68

0.63

1.05

1.32

Net realized and unrealized gain (loss)

0.33

(7.18

)

3.42

(3.14

)

1.83

Total from investment operations

1.46

(6.50

)

4.05

(2.09

)

3.15

 

Less Distributions from:

Net investment income

(1.07

)

(0.96

)

(1.44

)

(1.22

)

(1.30

)

Return of capital

(0.37

)

(0.48

)

(0.24

)

(0.24

)

Total distributions

(1.44

)

(1.44

)

(1.44

)

(1.46

)

(1.54

)

Net Asset Value, End of year

$16.40

$16.38

$24.32

$21.71

$25.26

Net Asset Value Total Return2

8.84

%

(27.70

)%

18.93

%

(8.06

)%

13.78

%

Net assets, end of year (000’s omitted)

$56,564

$54,064

$87,539

$52,104

$37,885

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.45

%

0.45

%

0.45

%

0.45

%

0.45

%3

Net investment income

6.51

%

3.25

%

2.61

%

4.75

%

5.42

%

Portfolio turnover rate4

14

%

79

%

144

%

38

%

66

%

  

1Based on average shares outstanding.

2Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

3The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

4Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

65

Virtus InfraCap U.S. Preferred Stock ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented:

Net asset value, beginning of year

$18.62

$25.16

$19.26

$26.43

$24.47

Investment operations:

Net investment income1

1.48

1.50

1.18

1.40

1.44

Net realized and unrealized gain (loss)

0.20

2

(6.09

)

6.62

(6.25

)

2.80

Total from investment operations

1.68

(4.59

)

7.80

(4.85

)

4.24

 

Less Distributions from:

Net investment income

(1.62

)

(1.95

)

(1.59

)

(1.81

)

(2.28

)

Net realized gains

(0.26

)

(0.43

)

Return of capital

(0.36

)

(0.05

)

(0.08

)

Total distributions

(1.98

)

(1.95

)

(1.90

)

(2.32

)

(2.28

)

Net Asset Value, End of year

$18.32

$18.62

$25.16

$19.26

$26.43

Net Asset Value Total Return3

9.15

%

(19.28

)%

41.52

%

(18.37

)%

18.37

%

Net assets, end of year (000’s omitted)

$609,278

$456,136

$527,121

$146,397

$88,525

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

2.52

%4

1.40

%5

1.21

%6

1.47

%7

2.00

%8,9

Net investment income

7.71

%

6.64

%

4.93

%

6.93

%

5.66

%

Portfolio turnover rate10

26

%

22

%

35

%

96

%

150

%

  

1Based on average shares outstanding.

2The per share amount of realized and unrealized gain (loss) on investments does not accord with the amounts reported in the Statements of Changes in Net Assets due to the timing of creation of Fund shares in relation to fluctuating market values.

3Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

4The ratios of expenses to average net assets include interest expense of 1.72%.

5The ratios of expenses to average net assets include interest expense of 0.60%.

6The ratios of expenses to average net assets include interest expense of 0.41%.

7The ratios of expenses to average net assets include interest expense of 0.63% and dividend expense on securities sold short fees of 0.04%.

8The ratios of expenses to average net assets include interest expense of 0.75% and dividend expense on securities sold short fees of 0.45%.

9The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

10Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

66

Virtus LifeSci Biotech Clinical Trials ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented:

Net asset value, beginning of year

$25.88

$44.36

$38.97

$26.42

$26.87

Investment operations:

Net investment income (loss)1

0.05

(0.16

)

(0.26

)

(0.15

)

(0.13

)

Net realized and unrealized gain (loss)

(8.07

)

(18.32

)

5.65

12.70

(0.32

)

Total from investment operations

(8.02

)

(18.48

)

5.39

12.55

(0.45

)

Net Asset Value, End of year

$17.86

$25.88

$44.36

$38.97

$26.42

Net Asset Value Total Return2

(31.01

)%

(41.66

)%

13.85

%

47.50

%

(1.67

)%

Net assets, end of year (000’s omitted)

$8,035

$18,116

$35,490

$37,018

$23,775

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.79

%

0.79

%

0.79

%

0.79

%

0.79

%3

Net investment income (loss)

0.22

%

(0.56

)%

(0.53

)%

(0.41

)%

(0.50

)%

Portfolio turnover rate4

66

%

61

%

76

%

81

%

67

%

  

1Based on average shares outstanding.

2Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

3The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

4Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

67

Virtus LifeSci Biotech Products ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented:

Net asset value, beginning of year

$46.71

$51.83

$48.19

$37.86

$36.33

Investment operations:

Net investment loss1

(0.32

)

(0.26

)

(0.30

)

(0.19

)

(0.20

)

Net realized and unrealized gain (loss)

0.28

(4.86

)

3.94

10.52

1.73

Total from investment operations

(0.04

)

(5.12

)

3.64

10.33

1.53

Net Asset Value, End of year

$46.67

$46.71

$51.83

$48.19

$37.86

Net Asset Value Total Return2

(0.09

)%

(9.88

)%

7.56

%

27.27

%

4.22

%

Net assets, end of year (000’s omitted)

$14,001

$16,349

$23,325

$26,505

$26,505

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.79

%

0.79

%

0.79

%

0.79

%

0.79

%3

Net investment loss

(0.63

)%

(0.59

)%

(0.57

)%

(0.43

)%

(0.51

)%

Portfolio turnover rate4

49

%

48

%

44

%

46

%

41

%

  

1Based on average shares outstanding.

2Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

3The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

4Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

68

Virtus Newfleet Multi-Sector Bond ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented:

Net asset value, beginning of year

$21.43

$25.21

$24.66

$24.54

$23.85

Investment operations:

Net investment income1

1.31

0.90

0.89

0.96

1.06

Net realized and unrealized gain (loss)

(0.33

)

(3.80

)

0.50

0.10

0.74

Total from investment operations

0.98

(2.90

)

1.39

1.06

1.80

 

Less Distributions from:

Net investment income

(1.25

)

(0.88

)

(0.84

)

(0.91

)

(1.02

)

Return of capital

(0.03

)

(0.09

)

Total distributions

(1.25

)

(0.88

)

(0.84

)

(0.94

)

(1.11

)

Net Asset Value, End of year

$21.16

$21.43

$25.21

$24.66

$24.54

Net Asset Value Total Return2

4.56

%

(11.72

)%

5.71

%

4.51

%

7.74

%

Net assets, end of year (000’s omitted)

$47,619

$41,793

$20,171

$18,494

$24,535

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses, net of expense waivers

0.49

%

0.49

%

0.49

%3

0.55

%3

0.80

%

Expenses, prior to expense waivers

0.80

%

1.02

%

1.21

%3

1.15

%3

1.06

%

Net investment income

5.95

%

3.92

%

3.52

%

3.95

%

4.37

%

Portfolio turnover rate4

138

%

84

%

107

%

103

%

95

%

  

1Based on average shares outstanding.

2Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

3The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

4Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

69

Virtus Private Credit Strategy ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the Period
February 7, 20191
Through
October 31, 2019

Per Share Data for a Share Outstanding throughout each period presented: 

Net asset value, beginning of period

$20.70

$25.99

$17.37

$24.72

$24.85

Investment operations:

Net investment income2

2.51

2.13

1.71

1.89

1.70

Net realized and unrealized gain (loss)

(0.30

)

(5.33

)

8.62

(7.20

)

(0.45

)

Total from investment operations

2.21

(3.20

)

10.33

(5.31

)

1.25

 

Less Distributions from:

Net investment income

(2.45

)

(2.09

)

(1.71

)

(2.04

)

(1.38

)

Total distributions

(2.45

)

(2.09

)

(1.71

)

(2.04

)

(1.38

)

Net Asset Value, End of period

$20.46

$20.70

$25.99

$17.37

$24.72

Net Asset Value Total Return3

11.22

%

(12.75

)%

61.32

%

(21.70

)%

5.03

%

Net assets, end of period (000’s omitted)

$26,594

$21,735

$31,189

$19,109

$211,344

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.75

%4

0.75

%

0.75

%

0.75

%5

0.75

%6

Net investment income

11.85

%4

8.97

%

7.27

%

8.59

%

9.24

%6

Portfolio turnover rate7

40

%

27

%

34

%

24

%

22

%8

 

1Commencement of operations.

2Based on average shares outstanding.

3Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the period, reinvestment of dividends and distributions at net asset value during the period, and redemptions at net asset value on the last day of the period. Total return calculated for a period of less than one year is not annualized.

4The Fund indirectly bears its proportionate shares of expenses and net investment income of any underlying funds in which the Fund invests. Such expenses and income are not included in the calculation of this ratio.

5The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

6Annualized.

7Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

8Not annualized.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

70

Virtus Real Asset Income ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the Period
February 7, 20191
Through
October 31, 2019

Per Share Data for a Share Outstanding throughout each period presented: 

Net asset value, beginning of period

$23.29

$26.84

$18.67

$24.72

$24.79

Investment operations:

Net investment income2

0.73

0.93

0.57

0.64

0.58

Net realized and unrealized gain (loss)

(1.17

)3

(3.61

)

8.66

(5.95

)

(0.12

)

Total from investment operations

(0.44

)

(2.68

)

9.23

(5.31

)

0.46

 

Less Distributions from:

Net investment income

(1.20

)

(0.87

)

(1.06

)

(0.74

)

(0.53

)

Total distributions

(1.20

)

(0.87

)

(1.06

)

(0.74

)

(0.53

)

Net Asset Value, End of period

$21.65

$23.29

$26.84

$18.67

$24.72

Net Asset Value Total Return4

(2.15

)%

(10.25

)%

50.16

%

(21.53

)%

1.87

%

Net assets, end of period (000’s omitted)

$17,320

$45,420

$139,583

$100,810

$244,751

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.55

%

0.55

%

0.55

%

0.55

%5

0.55

%6

Net investment income

3.06

%

3.52

%

2.30

%

2.93

%

3.20

%6

Portfolio turnover rate7

88

%

70

%

66

%

91

%

15

%8

 

1Commencement of operations.

2Based on average shares outstanding.

3The per share amount of realized and unrealized gain (loss) on investments does not accord with the amounts reported in the Statements of Changes in Net Assets due to the timing of creation of Fund shares in relation to fluctuating market values.

4Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the period, reinvestment of dividends and distributions at net asset value during the period, and redemptions at net asset value on the last day of the period. Total return calculated for a period of less than one year is not annualized.

5The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

6Annualized.

7Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

8Not annualized.

Financial Highlights (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

71

Virtus WMC International Dividend ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented: 

Net asset value, beginning of year

$21.69

$28.57

$23.94

$26.41

$24.97

Investment operations:

Net investment income1

1.20

1.50

1.29

0.52

0.52

Net realized and unrealized gain (loss)

2.65

(5.13

)

5.18

(2.08

)

1.95

Total from investment operations

3.85

(3.63

)

6.47

(1.56

)

2.47

 

Less Distributions from:

Net investment income

(1.13

)

(1.69

)

(1.15

)

(0.91

)

(0.49

)

Net realized gains

(1.56

)

(0.69

)

(0.54

)

Total distributions

(1.13

)

(3.25

)

(1.84

)

(0.91

)

(1.03

)

Net Asset Value, End of year

$24.41

$21.69

$28.57

$23.94

$26.41

Net Asset Value Total Return2

17.67

%

(14.03

)%

27.41

%

(6.20

)%

10.60

%

Net assets, end of year (000’s omitted)

$8,543

$6,507

$7,142

$4,788

$5,281

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses

0.49

%

0.49

%

0.49

%

0.49

%

0.49

%3

Net investment income

4.77

%

5.87

%

4.47

%

2.04

%

2.08

%

Portfolio turnover rate4

61

%

50

%

68

%

211

%

88

%

  

1Based on average shares outstanding.

2Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

3The ratios of expenses to average net assets includes tax expense fees of less than 0.01%.

4Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

72

Notes to Financial Statements

October 31, 2023

1. ORGANIZATION

The ETFis Series Trust I (the “Trust”) was organized as a Delaware statutory trust on September 20, 2012 and is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”).

As of October 31, 2023, ten funds of the Trust are offered for sale. The InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Newfleet Multi-Sector Bond ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF and Virtus WMC International Dividend ETF (each a “Fund” and collectively, the “Funds”) are presented in this annual report. The offering of each Fund’s shares is registered under the Securities Act of 1933 (the “Securities Act”).

Funds

Investment objective(s)

InfraCap REIT Preferred ETF

Seeks investment results that correspond, before fees and expenses, to the price and yield performance of the Indxx REIT Preferred Stock Index.

Virtus InfraCap U.S. Preferred Stock ETF

Seeks current income and, secondarily, capital appreciation.

Virtus LifeSci Biotech Clinical Trials ETF

Seeks investment results that correspond, before fees and expenses, to the price and yield performance of the LifeSci Biotechnology Clinical Trials Index.

Virtus LifeSci Biotech Products ETF

Seeks investment results that correspond, before fees and expenses, to the price and yield performance of the LifeSci Biotechnology Products Index.

Virtus Newfleet Multi-Sector Bond ETF

Seeks to provide a high level of current income and, secondarily, capital appreciation.

Virtus Private Credit Strategy ETF

Seeks investment results that correspond, before fees and expenses, to the price and yield performance of the Indxx Private Credit Index.

Virtus Real Asset Income ETF

Seeks investment results that correspond, before fees and expenses, to the price and yield performance of the Indxx Real Asset Income Index.

Virtus WMC International Dividend ETF

Seeks income.

There is no guarantee that a Fund will achieve its objective(s).

InfraCap REIT Preferred ETF and Virtus InfraCap U.S. Preferred Stock ETF are “non-diversified” Funds, as defined under the 1940 Act, as of the year ended October 31, 2023. Virtus Private Credit Strategy ETF is a “fund of funds,” meaning it will generally invest its assets in other registered investment companies.

2. SIGNIFICANT ACCOUNTING POLICIES

Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. Each Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(a) Use of Estimates

Management makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of increases and decreases in the net assets from operations during the reporting period. Actual results could differ from those estimates.

(b) Indemnification

In the normal course of business, the Funds may enter into contracts that contain a variety of representations which provide general indemnifications for certain liabilities. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

(c) Security Valuation

A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

Equity securities and exchange-traded funds are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded. Securities regularly traded in an over the counter market are valued at the latest quoted sale price in such market or in the case of the New York Stock Exchange (“NYSE”), at the NYSE Official Closing Price. Such valuations are typically categorized as Level 1 in the fair value hierarchy. The Board of Trustees of the Trust (the “Board”) has designated Virtus ETF

73

Notes to Financial Statements (continued)

October 31, 2023

Advisers LLC (the “Adviser”) to serve as its valuation designee, pursuant to Rule 2a-5 under the 1940 Act, to perform the fair value determinations relating to any or all Fund investments. Accordingly, if market quotations are not readily available, or if it is determined that a quotation of a security does not represent fair value, then the security is valued by the Adviser at fair value as determined in good faith using procedures approved by the Board. Such valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy.

Debt securities, including restricted securities, are valued based on evaluated quotations received from independent pricing services or from dealers who make markets in such securities. For most bond types, the pricing service utilizes matrix pricing that considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type, and current day trade information, as well as dealer-supplied prices. Pricing services generally value fixed income securities assuming orderly transactions of an institutional round lot size, but a Fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. Such valuations are typically categorized as Level 2 in the fair value hierarchy. Debt securities that are not widely traded, are illiquid, or are internally fair valued by the Adviser are generally categorized as Level 3 in the hierarchy.

Listed derivatives, such as options, that are actively traded are valued based on quoted prices from the exchange and are categorized as Level 1 in the hierarchy. Over-the-counter derivative contracts, which include options, do not require material subjectivity as pricing inputs are observed from actively quoted markets and are categorized as Level 2 in the hierarchy.

Investments in other open-end investment companies are valued based on their net asset value each business day. Investments in closed-end funds are valued as of the close of regular trading on the NYSE each business day. Each is categorized as Level 1 in the fair value hierarchy.

(d) Fair Value Measurement

Accounting Standards Codification, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into fair value measurement. Under ASC 820, various inputs are used in determining the value of the Funds’ investments. The Adviser, on behalf of each Fund, utilizes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These inputs are summarized in the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.

Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The hierarchy classification of inputs used to value each Fund’s investments at October 31, 2023, is disclosed at the end of each Fund’s Schedule of Investments.

(e) Security Transactions and Investment Income

Security transactions are accounted for on the trade date. Realized gains and losses on sales of investment securities are calculated using specific identification. Dividend income is recognized on the ex-dividend date. Expenses and interest income are recognized on the accrual basis. Amortization of premium and accretion of discount on debt securities are included in interest income. Each Fund amortizes premiums and accretes discounts using the effective interest method. Premiums on callable debt instruments are amortized to interest income to the earliest call date using the effective interest method.

Dividend income from REIT investments is recorded using management’s estimate of the income included in distributions received from the REIT investments. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each domestic REIT after its fiscal year-end, and may differ from the estimated amounts.

(f) Foreign Taxes

Certain Funds may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Each Fund will accrue such taxes and recoveries as applicable based upon current interpretations of the tax rules and regulations that exist in the markets in which it invests.

74

Notes to Financial Statements (continued)

October 31, 2023

(g) Expenses

Each Fund pays all of its expenses not assumed by its Sub-Adviser, if any, as defined in Note 3, or the Adviser. General Trust expenses that are allocated among and charged to the assets of the Funds and other series of the Trust are done so on a basis that the Board deems fair and equitable, which may be on a basis of relative net assets of each Fund and other series of the Trust or the nature of the services performed and relative applicability to each Fund and other series of the Trust.

(h) Short Sales

The Virtus InfraCap U.S. Preferred Stock ETF may sell securities short. A short sale is a transaction in which the Fund sells a security it does not own in anticipation of a decline in market price. To sell a security short, the Fund must borrow the security. The Fund’s obligation to replace the security borrowed and sold short will be fully collateralized at all times by the proceeds from the short sale retained by the broker and by cash and securities deposited in a segregated account with the Fund’s custodian. If the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will realize a loss, and if the price declines during the period, the Fund will realize a gain. Any realized gain will be decreased, and any realized loss increased, by the amount of transaction costs. On the ex-dividend date, dividends on short sales are recorded as an expense to the Fund.

In accordance with the terms of its prime brokerage agreement, the Fund may receive rebate income or be charged a fee on borrowed securities which is reported as “Interest Expense” on the Statement of Operations. Such income or fee is calculated on a daily basis based upon the market value of each borrowed security and a variable rate that is dependent upon the availability of such security.

(i) Distributions to Shareholders

Distributions are recorded by the Funds on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations that may differ from GAAP in the United States of America.

(j) Foreign Currency Translation

Non-U.S. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the foreign currency exchange rate effective at the end of the reporting period. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement date of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates between the date the income is accrued and the date it is paid is treated as a gain or loss on foreign currency. The Funds do not isolate that portion of the results of operations arising from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

(k) Cash and Cash Equivalents

Cash is comprised of demand deposits. Cash equivalents are highly liquid investments with original maturities of 90 days or less. The carrying amount of cash equivalents, primarily representing money market funds is a reasonable estimate of fair value. These assets are considered to be Level 1 securities, per Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures.

(l) Loan Agreements

The Virtus Newfleet Multi-Sector Bond ETF may invest in direct debt instruments which are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates. Loan agreements are generally non-investment grade and often involve borrowers that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Loan agreements are typically senior in the corporate capital structure of the borrower. A loan is often administered by a bank or other financial institution (the “lender”) that acts as agent for all holders. The lender administers the terms of the loan, as specified in the loan agreement. The Fund’s investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When investing in loan participations, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the loan participation and only upon receipt by the lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund may be subject to the credit risk of both the borrower and the lender that is selling the loan agreement. When the Fund purchases assignments from lenders, it acquires direct rights against the borrower on the loan.

The Fund may invest in multiple series or tranches of a loan, which may have varying terms and carry different associated risks. Loan agreements may involve foreign borrowers, and investments may be denominated in foreign currencies. Direct indebtedness of emerging countries involves a risk that the government entities responsible for the repayment of the debt may be unable, or unwilling, to pay the principal and interest when due.

75

Notes to Financial Statements (continued)

October 31, 2023

The loan agreements have floating rate loan interests which generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the London Interbank Offered Rate (“LIBOR”), Secured Overnight Financing Rate (“SOFR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. When a loan agreement is purchased, the Fund may pay an assignment fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a loan agreement. Prepayment penalty fees are received upon the prepayment of a loan agreement by a borrower. Prepayment penalty, facility, commitment, consent and amendment fees are recorded to income as earned or paid.

(m) Securities Lending

Certain Funds may loan securities to qualified brokers through an agreement with The Bank of New York Mellon (“BNY Mellon”), as a third party lending agent. Under the terms of the agreement, a Fund doing so is required to maintain collateral with a market value not less than 102% of the market value of loaned securities. Collateral is adjusted daily in connection with changes in the market value of securities on loan. Collateral may consist of cash and securities issued by the U.S. Government or its agencies. Cash collateral is invested in a short-term money market fund. Dividends earned on the collateral and premiums paid by the broker are recorded as income by a Fund net of fees and rebates charged by BNY Mellon for its services as securities lending agent and in connection with this securities lending program. Lending portfolio securities involves a risk of delay in the recovery of the loaned securities or in the declining value of the collateral.

At October 31, 2023, the following Funds had securities on loan:

Funds

Market Value

Cash
Collateral

Non Cash
Collateral
(a)

Net Amount(b)

Virtus LifeSci Biotech Clinical Trials ETF

$1,299,727

$647,190

$639,418

$0

Virtus LifeSci Biotech Products ETF

2,169,903

2,178,724

0

Virtus Private Credit Strategy ETF

2,527,935

2,571,040

0

Virtus Real Asset Income ETF

1,138,483

984,193

182,643

0

 

(a)Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

(b)Net amount represents the net amount receivable due from the counterparty in the event of default.

Funds not listed in table above did not have any securities on loan at October 31, 2023.

The following table presents the contract value of securities lending transactions and the type of collateral provided to counterparties.

Remaining Contractual Maturity of the Agreements, as of October 31, 2023

Overnight and
Continuous

Between

Total

<30 Days

30 & 90 days

>90 days

Virtus LifeSci Biotech Clinical Trials ETF

Securities Lending Transactions

Common Stocks

$1,286,608

$

$

$

$1,286,608

Gross amount of recognized liabilities for securities lending transactions:

$1,286,608

 

Virtus LifeSci Biotech Products ETF

Securities Lending Transactions

Common Stocks

$2,178,724

$

$

$

$2,178,724

Gross amount of recognized liabilities for securities lending transactions:

$2,178,724

 

Virtus Private Credit Strategy ETF

Securities Lending Transactions

Common Stocks

$2,571,040

$

$

$

$2,571,040

Gross amount of recognized liabilities for securities lending transactions:

$2,571,040

 

Virtus Real Asset Income ETF

Securities Lending Transactions

Common Stocks

$1,166,836

$

$

$

$1,166,836

Gross amount of recognized liabilities for securities lending transactions:

$1,166,836

76

Notes to Financial Statements (continued)

October 31, 2023

3. INVESTMENT MANAGEMENT RELATED PARTIES AND OTHER AGREEMENTS

Investment Advisory Agreements

The Trust, on behalf of each Fund, has entered into Investment Advisory Agreements (collectively, the “Advisory Agreement”) with the Adviser, an indirect wholly-owned subsidiary of Virtus Investment Partners, Inc. (Ticker: VRTS) (together with its affiliates, “Virtus”). Pursuant to the Advisory Agreement, the Adviser has overall supervisory responsibility for the general management and investment of the Funds’ securities portfolios. The Adviser has agreed to pay all of the ordinary operating expenses of the Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF, and Virtus WMC International Dividend ETF, except for each Fund’s management fee; payments under any 12b-1 plan; taxes and other governmental fees; brokerage fees, commissions and other transaction expenses; interest and other costs of borrowing; litigation or arbitration expenses; acquired fund fees and expenses; and extraordinary or other non-routine expenses of the Funds. The Adviser is entitled to receive a fee from each Fund (unless otherwise noted below) based on each Fund’s average daily net assets, computed and accrued daily and payable monthly, at an annual rate as follows:

Funds

Rate

InfraCap REIT Preferred ETF

0.45%, subject to a minimum annual fee of $25,000 per year

Virtus InfraCap U.S. Preferred Stock ETF

0.80%

Virtus LifeSci Biotech Clinical Trials ETF

0.79%

Virtus LifeSci Biotech Products ETF

0.79%

Virtus Newfleet Multi-Sector Bond ETF

0.45%

Virtus Private Credit Strategy ETF

0.75%

Virtus Real Asset Income ETF

0.55%

Virtus WMC International Dividend ETF

0.49%

The Advisory Agreement may be terminated by the Trust on behalf of a Fund with the approval of a Fund’s Board or by a vote of the majority of a Fund’s shareholders. The Advisory Agreement may also be terminated by the Adviser by not more than 60 days’ nor less than 30 days’ written notice.

Expense Limitation Agreement

The Adviser has contractually agreed to reduce its fees and reimburse expenses in order to limit Virtus Newfleet Multi-Sector Bond ETF’s total operating expenses (excluding interest, taxes, brokerage fees and commissions, other expenditures that are capitalized in accordance with generally accepted accounting principles, acquired fund fees and expenses, other extraordinary expenses not incurred in the ordinary course of the Funds’ business, and amounts, if any, payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act) from exceeding 0.49% of the Fund’s average daily net assets through at least February 28, 2024. The expense limitation agreement with respect to Virtus Newfleet Multi-Sector Bond ETF will be terminated upon termination of the Advisory Agreement between the Adviser and the Fund. In addition, while the Adviser or the Fund may discontinue the expense limitation agreement after the contractual period, it may only be terminated during its term with the approval of the Fund’s Board of Trustees.

Under certain conditions, the Adviser may recapture operating expenses waived or reimbursed under the expense limitation agreement for a period of three years following the date on which such waiver or reimbursement occurred; provided that such recapture may not cause the Fund’s total operating expenses to exceed 0.49% of the average daily net assets of the Fund (or any lower expense limitation or limitations to which the Fund and the Adviser may otherwise agree). All or a portion of the following expenses reimbursed by the Adviser may be recaptured during the fiscal years indicated:

Fund

2024

2025

2026

Virtus Newfleet Multi-Sector Bond ETF

$140,870

$137,763

$168,746

Sub-Advisory Agreement

Each Sub-Adviser provides investment advice and management services to its respective Fund. Pursuant to an investment sub-advisory agreement among the Trust, the respective Sub-Adviser and the Adviser, the Adviser pays each Fund’s Sub-Adviser a sub-advisory fee calculated as shown below. The Adviser has delegated to the InfraCap REIT Preferred ETF and Virtus InfraCap U.S. Preferred Stock ETF’s sub-adviser the obligation to pay all of the ordinary operating expenses of each of those Funds, except for the management fee paid to the Adviser; payments under any 12b-1 plan adopted by the Fund; taxes and other governmental fees; brokerage fees, commissions and other transaction expenses; interest and other costs of borrowing; litigation or arbitration expenses; acquired fund fees and expenses; and extraordinary or other non-routine expenses of the Fund. The Sub-Advisers and sub-advisory fees for each Fund are listed below.

77

Notes to Financial Statements (continued)

October 31, 2023

Funds

Sub-Advisers

Sub-Advisory Fees

InfraCap REIT Preferred ETF

Infrastructure Capital Advisors, LLC

0.375%*

Virtus InfraCap U.S. Preferred Stock ETF

Infrastructure Capital Advisors, LLC

0.66%*

Virtus Newfleet Multi-Sector Bond ETF

Virtus Fixed Income Advisers, LLC, operating through its division Newfleet Asset Management(1)

50% of the net advisory fee*+

Virtus WMC International Dividend ETF

Wellington Management Company LLP

0.21%*

  

(1) An indirect wholly-owned subsidiary of Virtus.

*InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus Newfleet Multi-Sector Bond ETF and Virtus WMC International Dividend ETF’s sub-advisory fees are paid for by the Adviser, not the Funds.

+Net advisory fee: In the event the Adviser waives its entire fee and also assumes expenses of the Trust pursuant to an applicable expense limitation agreement, the Sub-Adviser will similarly waive its entire fee and will share in the expense assumption by promptly paying to the Adviser (or its designee) 50% of the assumed amount. If during the term of the Sub-Advisory Agreement the Adviser later recaptures some or all of fees waived or expenses reimbursed by the Adviser and the Sub-Adviser together, then the Adviser will pay to the Sub-Adviser 50% of the amount recaptured.

Principal Underwriter

Pursuant to the terms of a Distribution Agreement with the Trust, VP Distributors, LLC (the “Distributor”) serves as the Funds’ principal underwriter. The Distributor receives compensation from the Adviser for the statutory underwriting services it provides to the Funds. The Distributor will not distribute shares in less than Creation Units (as hereinafter defined), and does not maintain a secondary market in shares. The shares are traded in the secondary market. The Distributor is an indirect wholly-owned subsidiary of Virtus.

Distribution and Service (12b-1 Plan)

The Board of Trustees has adopted a distribution and service plan, under which InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF, and Virtus WMC International Dividend ETF (collectively, the “12b-1 Funds”) are authorized to pay an amount up to 0.25% of their average daily net assets each year to finance activities primarily intended to result in the sale of Creation Units of the 12b-1 Funds or the provision of investor services. No 12b-1 fees are currently paid by the 12b-1 Funds and there are no current plans to impose these fees.

Operational Administrator

Virtus ETF Solutions LLC (the “Administrator”) serves as the Funds’ operational administrator. The Administrator supervises the overall administration of the Trust and the Funds including, among other responsibilities, the coordination and day-to-day oversight of the Funds’ operations, the service providers’ communications with the Funds and each other and assistance with Trust, Board and contractual matters related to the Funds and other series of the Trust. The Administrator also provides persons satisfactory to the Board to serve as officers of the Trust. The Administrator is an indirect wholly-owned subsidiary of Virtus.

Accounting Services Administrator, Custodian and Transfer Agent

The Bank of New York Mellon (“BNY Mellon”) provides administrative, accounting, tax and financial reporting for the maintenance and operations of the Trust as the Funds’ accounting services administrator. BNY Mellon also serves as the custodian for the Funds’ assets, and serves as transfer agent and dividend paying agent for the Funds.

Affiliated Shareholders

At October 31, 2023, Virtus Partners, Inc. held shares of Virtus WMC International Dividend ETF which may be sold at any time that aggregated to the following:

Shares

% of share
outstanding

Virtus WMC International Dividend ETF

184,507

52.7%

At October 31, 2023, the sub-adviser of the below Funds held shares of such Fund which may be redeemed at any time that aggregated to the following:

Shares

% of share outstanding

InfraCap REIT Preferred ETF

2,595

0.1%

Virtus InfraCap U.S. Preferred Stock ETF

473,114

1.4%

78

Notes to Financial Statements (continued)

October 31, 2023

4. CREATION AND REDEMPTION TRANSACTIONS

The Funds issue and redeem shares on a continuous basis at Net Asset Value (“NAV”) in aggregate blocks of shares or multiples thereof called “Creation Units.” The Funds’ Creation Units may be issued and redeemed generally for cash or an in-kind deposit of securities held by the Funds. In each instance of cash creations or redemptions, the Trust may impose transaction fees based on transaction expenses related to the particular exchange that will be higher than the transaction fees associated with in-kind purchases or redemptions.

Only “Authorized Participants” who have entered into contractual arrangements with the Distributor may purchase or redeem shares directly from the Funds. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Funds. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees.

Authorized participants pay a fixed transaction fee to the shareholder servicing agent when purchasing and redeeming Creation Units of a Fund. The transaction fee is used to defray the costs associated with the issuance and redemption of Creation Units.

The following table discloses each Fund’s transaction fee:

Funds

Creation/Redemption
Transaction Fee

InfraCap REIT Preferred ETF

$500

Virtus InfraCap U.S. Preferred Stock ETF

600

Virtus LifeSci Biotech Clinical Trials ETF

500

Virtus LifeSci Biotech Products ETF

500

Virtus Newfleet Multi-Sector Bond ETF

500

Virtus Private Credit Strategy ETF

500

Virtus Real Asset Income ETF

500

Virtus WMC International Dividend ETF

1,200

5. RESTRICTED SECURITIES

Restricted securities are not registered under the Securities Act. Generally, 144A securities are excluded from this category. Each Fund will bear any costs, including those involved in registration under the Securities Act, in connection with the disposition of such securities. The following Fund held a security that was considered to be restricted at October 31, 2023:

Fund

Investment

Date of
Acquisition

Cost

Value

Percentage of
Net Assets

Virtus LifeSci Biotech Clinical Trials ETF

Scilex Holding Co

1/11/2023

$89,057

$31,329

0.4%

6. FEDERAL INCOME TAX

Each Fund intends to qualify as a “regulated investment company” under Sub-chapter M of the Internal Revenue Code of 1986 (the “Code”), as amended. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders. Therefore, no federal income or excise tax provision is required. Accounting for Uncertainty in Income Taxes as issued by the FASB provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements, and requires the evaluation of tax positions taken or expected to be taken in the course of preparing a Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Interest and penalties related to income taxes would be recorded as income tax expense. Management of the Funds is required to analyze all open tax years (2020, 2021 and 2022), as defined by IRS statute of limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of October 31, 2023, the Funds did not have a liability for any unrecognized tax benefits or uncertain tax positions that would require recognition in the financial statements. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will significantly change in the next twelve months.

The Funds recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. For the year ended October 31, 2023, the Funds had no accrued penalties or interest.

79

Notes to Financial Statements (continued)

October 31, 2023

At October 31, 2023, the adjusted cost basis of investments and gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

Federal Tax Cost
Of Investments

Gross Unrealized
Appreciation

Gross Unrealized
Depreciation

Net Unrealized
Appreciation
(Depreciation)

InfraCap REIT Preferred ETF

$68,147,413

$588,441

$(12,939,095

)

$(12,350,654

)

Virtus InfraCap U.S. Preferred Stock ETF

876,588,284

12,991,691

(121,469,222

)

(108,477,531

)

Virtus LifeSci Biotech Clinical Trials ETF

16,394,523

1,140,803

(9,129,963

)

(7,989,160

)

Virtus LifeSci Biotech Products ETF

17,123,648

1,846,411

(5,079,846

)

(3,233,435

)

Virtus Newfleet Multi-Sector Bond ETF

49,293,528

193,430

(2,751,185

)

(2,557,755

)

Virtus Private Credit Strategy ETF

32,873,969

74,139

(4,584,313

)

(4,510,174

)

Virtus Real Asset Income ETF

24,299,721

532,747

(7,126,004

)

(6,593,257

)

Virtus WMC International Dividend ETF

8,599,853

526,680

(664,438

)

(137,758

)

At October 31, 2023, the components of accumulated earnings/loss on a tax-basis were as follows:

Undistributed
Ordinary Income

Accumulated
Capital and
Other Gain
(Loss)

Net Unrealized
Appreciation
(Depreciation)

Total
Accumulated
Earnings (Loss)

InfraCap REIT Preferred ETF

$—​

$(12,448,249

)

$(12,350,654

)

(24,798,903

)​

Virtus InfraCap U.S. Preferred Stock ETF

(12,564,850

)​

(108,477,531

)

(121,042,381

)​

Virtus LifeSci Biotech Clinical Trials ETF

34,890

(57,068,456

)

(7,989,160

)

(65,022,726

)

Virtus LifeSci Biotech Products ETF

(15,880,729

)

(3,233,435

)

(19,114,164

)

Virtus Newfleet Multi-Sector Bond ETF

178,759

(5,325,376

)

(2,557,755

)

(7,704,372

)

Virtus Private Credit Strategy ETF

385,433

(9,929,884

)

(4,510,174

)

(14,054,625

)

Virtus Real Asset Income ETF

352,352

(43,289,530

)

(6,593,282

)

(49,530,460

)

Virtus WMC International Dividend ETF

83,123

(373,945

)

(138,806

)

(429,628

)

Ordinary losses incurred after December 31 (“Late Year Ordinary Losses”) within the taxable year are deemed to arise on the first business day of the Funds’ next taxable year. During the fiscal year ended October 31, 2023, the following Fund incurred and elected to defer Late Year Ordinary Losses as follows:

Virtus LifeSci Biotech Products ETF

$93,921

The tax character of dividends and distributions paid during the fiscal years ended October 31, 2023 and October 31, 2022 were as follows:

2023

2022

Distributions
Paid From
Ordinary
Income

Return of
Capital

Distributions
Paid From
Long-Term
Capital Gains

Distributions
Paid From
Ordinary
Income

Return of
Capital

Distributions
Paid From
Long-Term
Capital Gains

InfraCap REIT Preferred ETF

$3,748,137

$1,285,869​

$—​

$3,360,547

$1,673,459

​​

$—​

Virtus InfraCap U.S. Preferred Stock ETF

46,177,337

10,423,671

37,742,883

7,998,125

Virtus LifeSci Biotech Clinical Trials ETF

Virtus LifeSci Biotech Products ETF

Virtus Newfleet Multi-Sector Bond ETF

3,089,988

988,884

Virtus Private Credit Strategy ETF

2,724,501

2,736,879

Virtus Real Asset Income ETF

1,496,841

4,478,009

Virtus WMC International Dividend ETF

380,432

809,301

16,303

Short-term gain distributions if any, are reported as ordinary income for federal tax purposes.

80

Notes to Financial Statements (continued)

October 31, 2023

At October 31, 2023, for federal income tax purposes, the following Funds have capital loss carryforwards available to offset future capital gains for an unlimited period. To the extent that these loss carryforwards are utilized, capital gains so offset will not be distributed to shareholders:

Short-Term
No Expiration

Long-Term
No Expiration

Total

InfraCap REIT Preferred ETF

$11,979,428

$468,821

$12,448,249

Virtus InfraCap U.S. Preferred Stock ETF

7,866,238

4,698,612

12,564,850

Virtus LifeSci Biotech Clinical Trials ETF

25,838,539

31,229,917

57,068,456

Virtus LifeSci Biotech Products ETF

2,765,986

13,020,822

15,786,808

Virtus Newfleet Multi-Sector Bond ETF

1,741,735

3,583,641

5,325,376

Virtus Private Credit Strategy ETF

3,453,124

6,476,760

9,929,884

Virtus Real Asset Income ETF

26,035,352

17,254,178

43,289,530

Virtus WMC International Dividend ETF

93,209

280,736

373,945

For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Results of operations and net assets were not affected by these reclassifications. Reclassifications are primarily due to tax treatment of redemptions in kind. At October 31, 2023, the effect of permanent book/tax reclassifications resulted in increases (decreases) to the components of net assets as follows:

Distributable Earnings (Accumulated Deficit)

Paid-In-Capital

InfraCap REIT Preferred ETF

$(223,090

)​

$223,090

Virtus InfraCap U.S. Preferred Stock ETF

2,050,773

​)

(2,050,773

)

Virtus LifeSci Biotech Clinical Trials ETF

(926,129

)

926,129

Virtus LifeSci Biotech Products ETF

(381,165

)

381,165

Virtus Newfleet Multi-Sector Bond ETF

(740

)

740

Virtus Private Credit Strategy ETF

2,653,236

(2,653,236

)​

Virtus Real Asset Income ETF

1,671,066

(1,671,066

)​

Virtus WMC International Dividend ETF

7. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term investments), subscriptions in-kind and redemptions in-kind for the year ended October 31, 2023 were as follows:

Purchases

Sales

Subscriptions In-Kind

Redemptions In-Kind

InfraCap REIT Preferred ETF

$8,621,729

$9,576,965

$8,211,819

$5,043,115

Virtus InfraCap U.S. Preferred Stock ETF

182,285,211

210,490,193

241,642,109

26,115,923

Virtus LifeSci Biotech Clinical Trials ETF

8,374,097

8,401,854

6,021,029

Virtus LifeSci Biotech Products ETF

8,384,719

8,433,843

2,664,373

Virtus Newfleet Multi-Sector Bond ETF

69,793,014

53,092,282

Virtus Private Credit Strategy ETF

10,056,652

9,881,283

35,907,372

28,632,434

Virtus Real Asset Income ETF

24,209,393

23,705,139

27,600,805

Virtus WMC International Dividend ETF

4,872,978

4,815,689

1,186,650

Purchases and sales of long-term U.S. Government Securities for the year ended October 31, 2023 were as follows:

Purchases

Sales

Virtus Newfleet Multi-Sector Bond ETF

$16,848,002

$16,670,429

81

Notes to Financial Statements (continued)

October 31, 2023

8. DERIVATIVE FINANCIAL INSTRUMENTS

Options

The Virtus InfraCap U.S. Preferred Stock ETF may write covered call and put options on portfolio securities and other financial instruments. Premiums received are recorded as liabilities. The liabilities are subsequently adjusted to reflect the current value of the options written. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or are closed are added to or offset against the proceeds or amount paid on the transactions to determine the net realized gain or loss. By writing a covered call option, the Fund, in exchange for the premium, foregoes the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase. By writing a put option, the Fund, in exchange for the premium, accepts the risk of having to purchase a security at an exercise price that is above the current price. Changes in value of written options are reported as change in unrealized gain (loss) on written options in the Statement of Operations. When the written option expires, is terminated or is sold, the Fund will record a gain or loss, which is reported as realized gain (loss) on written options in the Statement of Operations. Written covered call options limit the upside potential of a security above the strike price. Written put options subject the Fund to risk of loss if the value of the security declines below the exercise price minus the put premium.

The Virtus InfraCap U.S. Preferred Stock ETF may purchase call and put options on the portfolio securities or other financial instruments. The Fund may purchase call options to protect against an increase in the price of the security or financial instrument it anticipates purchasing. The Fund may purchase put options on securities which it holds or other financial instruments to protect against a decline in the value of the security or financial instrument or to close out covered written positions. Changes in value of purchased options are reported as part of change in unrealized gain (loss) on investments in the Statement of Operations. When the purchased option expires, is terminated or is sold, the Fund will record a gain or loss, which is reported as part of realized gain (loss) on investments in the Statement of Operations. Risks may arise from an imperfect correlation between the change in market value of the securities held by the Fund and the prices of options relating to the securities purchased or sold by the Fund and from the possible lack of liquid secondary market for an option. The maximum exposure to loss for any purchased option is limited to the premium initially paid for the option.

The Virtus InfraCap U.S. Preferred Stock ETF did not engage in options transactions during the year ended October 31, 2023.

9. BORROWINGS

The Virtus InfraCap U.S. Preferred Stock ETF entered into Lending Agreements (the “Agreements”) with commercial banks (the “Banks”) that allows the Fund to borrow cash from the Banks. Borrowings under the Agreements are collateralized by investments of the Fund. If the Fund defaults with respect to any of its obligations under the Agreements, the Banks may foreclose on assets of the Fund and/ or the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the Agreements, necessitating the sale of securities at potentially inopportune times. Interest is charged at the Overnight Bank Funding Rate (“OBFR”) plus an additional percentage rate on the amount borrowed. The Agreements have an on-demand commitment term. For the year ended October 31, 2023, the average daily borrowings under the Agreements and the weighted average interest rate were $150,415,430 and 5.89%, respectively.

10. INVESTMENT RISKS

As with any investment, an investment in the Funds could result in a loss or the performance of the Funds could be inferior to that of other investments. An investor should consider each Fund’s investment objectives, risks, and charges and expenses carefully before investing. Each Fund’s prospectus and statement of additional information contain this and other important information.

Credit Risk

Junk Bonds or High Yield Securities: High yield securities are generally subject to greater levels of credit quality risk than investment grade securities. The retail secondary market for these “junk bonds” may be less liquid than that of higher-rated fixed income securities, and adverse conditions could make it difficult at times to sell these securities or could result in lower prices than higher-rated fixed income securities. These risks can reduce the value of the Fund’s shares and the income it earns.

Cash Concentration Risk

At various times, the Funds may have cash and cash collateral balances that exceed federally insured limits.

Market Risk

Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on each Fund and its investments, including hampering the ability of the Fund’s portfolio manager(s) to invest the Fund’s assets as intended.

82

Notes to Financial Statements (continued)

October 31, 2023

11. LIBOR REPLACEMENT RISK

In July 2017, the head of the United Kingdom Financial Conduct Authority (“FCA”) announced the intention to phase out the use of LIBOR by the end of 2021. However, after subsequent announcements by the FCA, the LIBOR administrator and other regulators, certain of the most widely used LIBORs continued until approximately June 30, 2023. The ICE Benchmark Administration Limited, which is regulated and authorized by FCA, and the administrator of LIBOR, ceased publishing certain LIBOR settings on December 31, 2021. On April 3, 2023, the FCA announced its decision to require LIBOR’s administrator to continue to publish the 1-month, 3-month, and 6-month U.S. dollar settings under an unrepresentative synthetic methodology until September 30, 2024. On March 15, 2022, the Adjustable Interest Act (LIBOR) Act (the “LIBOR Act”) was enacted into law which directs the Federal Reserve Board, as a fallback mechanism, to identify benchmark rates based on SOFR that will replace LIBOR in certain financial contracts after June 30, 2023. On December 16, 2022, the Federal Reserve adopted regulations implementing the LIBOR Act. The Funds may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The expected discontinuation of LIBOR could have a significant impact on the financial markets and may present a material risk for certain market participants, including the Funds. Abandonment of or modifications to LIBOR could lead to significant short- and long-term uncertainty and market instability. The risks associated with this discontinuation and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. It remains uncertain the effects such changes will have on the Funds, issuers of instruments in which the Funds invest, and the financial markets generally.

12. 10% SHAREHOLDERS

As of October 31, 2023, certain Funds had individual shareholder account(s) and/or omnibus shareholder account(s) (comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding of the Fund as detailed below:

Funds

% of Shares
Outstanding

Number of
Accounts

InfraCap REIT Preferred ETF

47%

2

Virtus InfraCap U.S. Preferred Stock ETF

52%

2

Virtus LifeSci Biotech Clinical Trials ETF

57%

3

Virtus LifeSci Biotech Products ETF

53%

3

Virtus Newfleet Multi-Sector Bond ETF

79%

2

Virtus Private Credit Strategy ETF

71%

3

Virtus Real Asset Income ETF

67%

1

Virtus WMC International Dividend ETF

77%

2*

  

* Includes affiliated shareholder account.

13. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04 (“ASU 2020-04”), Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered reference rates as of the end of 2021. In March 2021, the administrator for LIBOR announced the extension of the publication of a majority of the USD LIBOR settings to June 30, 2023. On December 21, 2022, the FASB issued ASU 2022-06 to defer the sunset date of ASC 848 until December 31, 2024. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management is currently evaluating the impact, if any, of ASU 2020-04 and ASU 2020-06, but does not believe there will be a material impact.

14. NEW REGULATORY PRONOUNCEMENT

In October 2022, the SEC adopted a rule and form amendments relating to tailored shareholder reports for mutual funds and ETFs; and fee information in investment company advertisements. The rule and form amendments will require mutual funds and ETFs to transmit streamlined shareholder reports that highlight key information to investors. The rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective in January 2023 and there is an 18-month transition period after the effective date of the amendment with a compliance date of July 2024.

15. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the issuance of these financial statements and has determined that there are no material events that would require disclosure.

Schedule of Investments — InfraCap MLP ETF

October 31, 2023

The accompanying notes are an integral part of these financial statements.

83

Security Description

Shares

Value

 

COMMON STOCKS — 132.3%

 

Energy — 132.3%

Cheniere Energy Partners LP(1)(2)

443,604

$24,735,359

Cheniere Energy, Inc.(1)(2)

34,112

 5,676,919

Crestwood Equity Partners LP(1)

728,911

 19,884,692

Delek Logistics Partners LP(2)

235,586

 10,888,785

Energy Transfer LP(1)(2)

3,246,865

 42,696,275

EnLink Midstream LLC*(1)(2)

2,478,957

 30,466,382

Enterprise Products Partners LP(1)(2)

2,002,437

 52,143,459

Genesis Energy LP(1)

756,192

 8,378,607

Hess Midstream LP Class A

427,424

 12,822,720

Holly Energy Partners LP(1)

263,908

 5,608,045

Kinder Morgan, Inc.(2)

394,493

 6,390,787

Marathon Petroleum Corp.(2)

21,224

 3,210,130

MPLX LP(1)(2)

1,683,342

 60,667,646

New Fortress Energy, Inc.(2)

122,570

 3,713,871

NuStar Energy LP(1)(2)

1,352,211

 23,122,808

ONEOK, Inc.(1)(2)

177,992

 11,605,078

Phillips 66(2)

10,106

 1,152,791

Plains All American Pipeline LP(1)(2)

3,742,457

 56,698,224

Targa Resources Corp.(2)

52,518

 4,391,030

Valero Energy Corp.

6,064

 770,128

Western Midstream Partners LP(1)(2)

1,565,413

 42,000,031

Williams Cos., Inc. (The)(2)

149,874

 5,155,666

Total Energy

 432,179,433

Total Common Stocks

(Cost $310,262,031)

 432,179,433

 

PREFERRED STOCKS — 0.7%

Energy — 0.7%

Brookfield Infrastructure Finance ULC, 5.00% (Canada)

925

 14,143

Crestwood Equity Partners LP, Series, 9.25%

215,891

 2,081,189

NuStar Energy LP, Series B, 11.31%*

1,017

 25,527

Total Energy

 2,120,859

Total Preferred Stocks

(Cost $2,065,973)

 2,120,859

 

TOTAL INVESTMENTS — 133.0%

(Cost $312,328,004)

434,300,292

Liabilities in Excess of Other Assets — (33.0)%

(107,688,112

)

Net Assets — 100.0%

$326,612,180

Security Description

Notional
Amount

Number of
contracts

Value

 

WRITTEN OPTIONS — (0.2)%

 

Written Call Options

Cheniere Energy Partners LP, Expires 12/15/23,
Strike Price $60.00

(125,000

)

(1,250

)

$(32,500

)

Cheniere Energy, Inc., Expires 11/03/23,
Strike Price $172.50

(11,000

)

(110

)

 (9,350)

Security Description

Notional
Amount

Number of
contracts

Value

 

WRITTEN OPTIONS (continued)

 

Written Call Options (continued)

Cheniere Energy, Inc., Expires 11/10/23,
Strike Price $175.00

(13,000

)

(130

)

$ (11,700)

Cheniere Energy, Inc., Expires 11/17/23,
Strike Price $177.50

(10,000

)

(100

)

(8,000

)

Delek Logistics Partners LP, Expires 11/17/23,
Strike Price $45.00

(5,000

)

(50

)

 (5,400)

Delek Logistics Partners LP, Expires 11/17/23,
Strike Price $50.00

(4,000

)

(40

)

 (640)

Energy Transfer LP, Expires 11/03/23,
Strike Price $13.00

(100,000

)

(1,000

)

 (23,000)

Energy Transfer LP, Expires 11/03/23,
Strike Price $14.00

(100,000

)

(1,000

)

 (1,000)

Energy Transfer LP, Expires 11/03/23,
Strike Price $14.50

(100,000

)

(1,000

)

 (1,000)

Energy Transfer LP, Expires 11/10/23,
Strike Price $13.00

(100,000

)

(1,000

)

 (30,000)

Energy Transfer LP, Expires 11/10/23,
Strike Price $13.50

(100,000

)

(1,000

)

 (8,000)

Energy Transfer LP, Expires 11/17/23,
Strike Price $13.00

(100,000

)

(1,000

)

 (34,000)

Energy Transfer LP, Expires 11/17/23,
Strike Price $13.50

(100,000

)

(1,000

)

 (10,000)

Energy Transfer LP, Expires 11/24/23,
Strike Price $13.50

(100,000

)

(1,000

)

 (13,000)

EnLink Midstream LLC, Expires 12/15/23,
Strike Price $13.00

(12,900

)

(129

)

 (3,870)

Enterprise Products Partners LP, Expires 11/17/23,
Strike Price $27.50

(100,000

)

(1,000

)

 (1,000)

Enterprise Products Partners LP, Expires 11/17/23,
Strike Price $28.00

(100,000

)

(1,000

)

 (1,000)

Enterprise Products Partners LP, Expires 12/01/23,
Strike Price $28.00

(100,000

)

(1,000

)

 (2,500)

Enterprise Products Partners LP, Expires 12/15/23,
Strike Price $28.00

(112,000

)

(1,120

)

 (6,720)

Enterprise Products Partners LP, Expires 01/19/24,
Strike Price $28.00

(100,000

)

(1,000

)

 (13,000)

Enterprise Products Partners LP, Expires 01/19/24,
Strike Price $29.00

(100,000

)

(1,000

)

 (5,000)

Schedule of Investments — InfraCap MLP ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

84

Security Description

Notional
Amount

Number of
contracts

Value

 

WRITTEN OPTIONS (continued)

 

Written Call Options (continued)

Kinder Morgan, Inc., Expires 11/17/23,
Strike Price $18.00

(100,000

)

(1,000

)

$ (2,000)

Kinder Morgan, Inc., Expires 11/17/23,
Strike Price $19.00

(100,000

)

(1,000

)

0

Kinder Morgan, Inc., Expires 12/15/23,
Strike Price $18.00

(100,000

)

(1,000

)

 (4,000)

Kinder Morgan, Inc., Expires 01/19/24,
Strike Price $18.00

(100,000

)

(1,000

)

 (13,000)

Kinder Morgan, Inc., Expires 03/15/24,
Strike Price $18.00

(100,000

)

(1,000

)

 (23,000)

Marathon Petroleum Corp., Expires 11/03/23,
Strike Price $160.00

(10,000

)

(100

)

 (1,000)

Marathon Petroleum Corp., Expires 11/10/23,
Strike Price $165.00

(5,000

)

(50

)

 (1,150)

Marathon Petroleum Corp., Expires 11/24/23,
Strike Price $165.00

(10,000

)

(100

)

 (4,600)

New Fortress Energy, Inc., Expires 12/15/23,
Strike Price $35.00

(16,000

)

(160

)

 (12,000)

NuStar Energy LP, Expires 11/17/23,
Strike Price $17.50

(25,000

)

(250

)

 (3,750)

NuStar Energy LP, Expires 12/15/23,
Strike Price $17.50

(25,000

)

(250

)

 (7,500)

NuStar Energy LP, Expires 12/15/23,
Strike Price $20.00

(125,000

)

(1,250

)

 (2,500)

ONEOK, Inc., Expires 11/17/23,
Strike Price $67.50

(50,000

)

(500

)

 (32,500)

ONEOK, Inc., Expires 11/17/23,
Strike Price $70.00

(50,000

)

(500

)

 (9,000)

ONEOK, Inc., Expires 12/15/23,
Strike Price $70.00

(101,000

)

(1,010

)

 (63,630)

Phillips 66, Expires 11/03/23,
Strike Price $114.00

(5,000

)

(50

)

 (5,000)

Phillips 66, Expires 11/10/23,
Strike Price $116.00

(5,000

)

(50

)

 (7,050)

Plains All American Pipeline LP, Expires 11/17/23,
Strike Price $14.00

(300

)

(3

)

 (396)

Plains All American Pipeline LP, Expires 11/17/23,
Strike Price $15.00

(101,000

)

(1,010

)

 (40,400)

Targa Resources Corp., Expires 11/17/23,
Strike Price $90.00

(10,000

)

(100

)

 (3,600)

 

Security Description

Notional
Amount

Number of
contracts

Value

 

WRITTEN OPTIONS (continued)

 

Written Call Options (continued)

Targa Resources Corp., Expires 11/17/23,
Strike Price $92.50

(15,000

)

(150

)

$ (2,250)

Western Midstream Partners LP, Expires 11/17/23,
Strike Price $28.00

(100,000

)

(1,000

)

 (15,000)

Western Midstream Partners LP, Expires 12/15/23,
Strike Price $29.00

(50,000

)

(500

)

(15,000

)

Williams Cos., Inc. (The), Expires 11/10/23,
Strike Price $35.00

(102,000

)

(1,020

)

 (35,700)

Williams Cos., Inc. (The), Expires 11/17/23,
Strike Price $35.00

(50,000

)

(500

)

 (25,000)

Williams Cos., Inc. (The), Expires 11/24/23,
Strike Price $35.00

(71,000

)

(710

)

 (42,600)

 

Written Put Options

Enterprise Products Partners LP, Expires 11/03/23,
Strike Price $27.00

(13,800

)

(138

)

 (14,352)

MPLX LP, Expires 11/17/23,
Strike Price $34.00

(100,000

)

(1,000

)

 (9,000)

ONEOK, Inc., Expires 11/17/23,
Strike Price $62.50

(50,000

)

(500

)

 (30,000)

Pembina Pipeline Corp., Expires 11/17/23,
Strike Price $25.00

(62,800

)

(628

)

 (628)

TC Energy Corp., Expires 12/15/23,
Strike Price $30.00

(50,000

)

(500

)

 (10,000)

TC Energy Corp., Expires 12/15/23,
Strike Price $32.50

(27,200

)

(272

)

 (13,600)

Total Written Options — (0.2)%

 

(Premiums Received $743,462)

$(669,886

)

___________

*Non-income producing security.

(1)Security, or a portion thereof, has been pledged as collateral for borrowings. The aggregate market value of the collateral at October 31, 2023 was $306,228,651.

(2)Subject to written call options.

Schedule of Investments — InfraCap MLP ETF (continued)

October 31, 2023

The accompanying notes are an integral part of these financial statements.

85

The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of October 31, 2023.

Level 1

Level 2

Level 3

Total

Asset Valuation Inputs

Common Stocks

$432,179,433

$

$

$432,179,433

Preferred Stocks

 2,120,859

 —

 —

 2,120,859

Total

$434,300,292

$

$

$434,300,292

Liability Valuation Inputs

Written Options

$666,118

$3,768

$

$669,886

Total

$666,118

$3,768

$

$669,886

Statement of Assets and Liabilities

October 31, 2023

The accompanying notes are an integral part of these financial statements.

86

InfraCap MLP
ETF

Assets:

Investments, at cost

$312,328,004

Investments, at value

434,300,292

Cash

1,910,767

Due from brokers

41,963

Receivables:

Investment securities sold

4,975,367

Dividends and interest

635,556

Prepaid expenses

4,566

Prepaid taxes

2,528,260

Total Assets

444,396,771

Liabilities:

Bank borrowings

97,315,720

Payables:

Investment securities purchased

4,406,693

Sub-Advisory fees

264,027

Written options, at value(a)

669,886

Current Income Tax Liability

4,484,106

Deferred Income Tax Liability

10,644,159

Total Liabilities

117,784,591

Net Assets

$326,612,180

Net Assets Consist of:

Paid-in capital

$481,693,127

Total distributable earnings (accumulated deficit), net of income taxes

(155,080,947

)

Net Assets

$326,612,180

Shares outstanding (unlimited number of shares of beneficial interest authorized, no par value)

9,490,000

Net asset value per share

$34.42

(a)Premiums received from written options

$743,462

Statement of Operations

For the Year Ended October 31, 2023

The accompanying notes are an integral part of these financial statements.

87

InfraCap MLP
ETF

Investment Income: 

Distributions from master limited partnerships

$32,926,217

Dividend income (net of foreign withholding taxes)

1,736,458

Interest income

39,017

Less: Return of capital distributions

(34,074,411

)

Total Investment Income

627,281

 

Expenses:

Interest expenses

6,394,616

Sub-Advisory fees

2,979,025

Total Expenses

9,373,641

Net Investment (Loss) Before Income Taxes

(8,746,360

)

Current and Deferred Income Tax Benefit / (Expense)

2,525,387

Net Investment (Loss), Net of Income Taxes

(6,220,973

)

 

Net Realized Gain (Loss) on:

Investments

50,074,442

Written options

2,836,231

Foreign currency transactions

17

Current and Deferred Income Tax Benefit / (Expense)

(15,277,208

)

Total Net Realized Gain, Net of Income Taxes

37,633,482

 

Change in Net Unrealized Appreciation (Depreciation) on:

Investments

8,183,994

Written options

46,521

Current and Deferred Income Tax Benefit / (Expense)

(2,376,444

)

Total Change in Net Unrealized Appreciation

5,854,071

Net Realized and Change in Unrealized Gain, Net of Income Taxes

43,487,553

Net Increase in Net Assets Resulting from Operations

$37,266,580

Foreign withholding taxes

$2,279

Statement of Changes in Net Assets

The accompanying notes are an integral part of these financial statements.

88

InfraCap MLP ETF

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

Increase (Decrease) in Net Assets Resulting from Operations: 

Net investment loss, net of income taxes

$(6,220,973

)

$(3,191,490

)

Net realized gain, net of income taxes

37,633,482

16,423,248

Net change in unrealized appreciation, net of income taxes

5,854,071

73,809,882

Net increase in net assets resulting from operations

37,266,580

87,041,640

Distributions to Shareholders

(26,762,601

)

(27,209,601

)

 

Shareholder Transactions:

Proceeds from shares sold

23,202,124

37,312,474

Cost of shares redeemed

(40,630,273

)

(58,236,660

)

Net decrease in net assets resulting from shareholder transactions

(17,428,149

)

(20,924,186

)

Increase (decrease) in net assets

(6,924,170

)

38,907,853

 

Net Assets:

Beginning of year

333,536,350

294,628,497

End of year

$326,612,180

$333,536,350

 

Changes in Shares Outstanding:

Shares outstanding, beginning of year

10,040,000

10,790,000

Shares sold

700,000

1,200,000

Shares redeemed

(1,250,000

)

(1,950,000

)

Shares outstanding, end of year

9,490,000

10,040,000

Statement of Cash Flows

For the Year Ended October 31, 2023

The accompanying notes are an integral part of these financial statements.

89

InfraCap MLP
ETF

Cash Flows From Operating Activities:

Net increase (decrease) in net assets from operations

$37,266,580

 

Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by (used in) operating activities:

Purchases of investment securities

(283,543,585

)

Proceeds from sales of investments

362,674,437

Net proceeds from purchased and written options

4,306,388

Net realized gain (loss) on investments

(50,074,442

)

Net realized gain (loss) on written options

(2,836,231

)

Net change in unrealized (appreciation) depreciation on investments

(8,183,994

)

Net change in unrealized (appreciation) depreciation on written options

(46,521

)

Increase (decrease) in due from brokers

108,050

(Increase) decrease in current income tax liability

4,484,106

(Increase) decrease in dividends and interest receivable

132,535

(Increase) decrease in prepaid expenses

(4,566

)

(Increase) decrease in deferred income tax liability

10,644,159

(Increase) decrease in prepaid taxes

(2,155,434

)

(Increase) decrease in sub-advisory fees payable

15,674

Increase (decrease) in interest expense

(82,331

)

Net cash provided by (used in) operating activities

72,704,825

 

Cash Flows provided by (used in) Financing Activities:

Repayments of borrowings

1,438,884

Payments for fund shares sold in excess of in-kind creations

(46,054,542

)

Distributions paid

(26,762,601

)

Net cash provided by (used in) financing activities

(71,378,259

)

 

Net increase (decrease) in cash

1,326,566

Cash, beginning of year

584,201

Cash, end of year

$1,910,767

 

Supplemental information:

Interest paid on borrowings

$6,476,947

 

Non-cash financing activities:

In-kind creations — Issued

30,287,434

In-kind creations — Redeemed

Financial Highlights

October 31, 2023

The accompanying notes are an integral part of these financial statements.

90

InfraCap MLP ETF1

For the
Year Ended
October 31, 2023

For the
Year Ended
October 31, 2022

For the
Year Ended
October 31, 2021

For the
Year Ended
October 31, 2020

For the
Year Ended
October 31, 2019

Per Share Data for a Share Outstanding throughout each year presented:

Net asset value, beginning of year

$33.22

$27.31

$13.78

$44.80

$63.87

Investment operations:

Net investment loss2

(0.65

)

(0.31

)

(0.33

)

(0.09

)

(0.96

)

Net realized and unrealized gain (loss)

4.69

8.86

16.50

(28.94

)

(7.91

)

Total from investment operations

4.04

8.55

16.17

(29.03

)

(8.87

)

 

Less Distributions from:

Net investment income

(2.84

)

Net realized gains

(2.64

)

Return of capital

(2.64

)

(1.99

)

(10.20

)3

Total distributions

(2.84

)

(2.64

)

(2.64

)

(1.99

)

(10.20

)

Net Asset Value, End of year

$34.42

$33.22

$27.31

$13.78

$44.80

Net Asset Value Total Return4

12.91

%

33.13

%

121.30

%

(62.67

)%

(15.62

)%

Net assets, end of year (000’s omitted)

$326,612

$333,536

$294,628

$99,107

$331,936

 

RATIOS/SUPPLEMENTAL DATA:

Ratios to Average Net Assets:

Expenses, including current and deferred income tax benefit / expense

2.18

%5

1.64

%6

1.40

%7

2.01

%8

2.41

%9

Expenses, excluding current and deferred income tax benefit / expense

2.99

%10

1.64

%6

1.40

%7

1.89

%8

2.40

%9

Net investment loss, net of income taxes

(1.98

)%

(1.06

)%

(1.31

)%

(1.71

)%

(1.72

)%

Portfolio turnover rate11

69

%

62

%

99

%

96

%

136

%

  

1Effective March 31, 2020, the Fund had a 1 for 10 reverse stock split. The share amounts for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 have been adjusted as a result of the 1 for 10 reverse stock split (See Note 1).

2Based on average shares outstanding.

3The per share distribution amount of $10.20 was originally misclassified and shown as distributions from net investment income in the Fund’s October 31, 2019 Annual Report. This amount has been subsequently reclassified to distributions from return of capital.

4Net Asset Value Total Return is calculated assuming an initial investment made at the net asset value on the first day of the year, reinvestment of dividends and distributions at net asset value during the year, and redemptions at net asset value on the last day of the year.

5The ratios of expenses to average net assets include interest expense of 2.04% and current and deferred income tax benefit / expense of 0.81%.

6The ratios of expenses to average net assets include interest expense of 0.69%.

7The ratios of expenses to average net assets include interest expense of 0.45%.

8The ratios of expenses to average net assets include interest expense of 0.93% and tax expense of 0.01%.

9The ratios of expenses to average net assets include interest expense of 1.28% and dividend expense on securities sold short fees of 0.17%.

10The ratios of expenses to average net assets include interest expense of 2.04%.

11Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind creations or redemptions of the Fund’s capital shares.

91

Notes to Financial Statements

October 31, 2023

1. ORGANIZATION

The ETFis Series Trust I (the “Trust”) was organized as a Delaware statutory trust on September 20, 2012 and is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”).

As of October 31, 2023, ten funds of the Trust are offered for sale. The InfraCap MLP ETF (the “Fund”) is presented in this annual report. The offering of the Fund’s shares is registered under the Securities Act of 1933 (the “Securities Act”).

Fund

Investment objective

InfraCap MLP ETF

Seeks total return primarily through investments in equity securities of publicly traded master limited partnerships and limited liability companies taxed as partnerships (“MLPs”).

There is no guarantee that the Fund will achieve its objective(s).

The Fund is “non-diversified,” as defined under the 1940 Act, as of the year ended October 31, 2023.

Reverse Split

After the close of the markets on March 30, 2020 (the Record Date), the Fund effected a reverse split of its issued and outstanding shares, with a 1 for 10 ratio. Shares of the Fund began trading on the NYSE Arca on a split-adjusted basis on March 31, 2020.

The effect of the reverse split was reducing the number of Shares outstanding and resulted in a proportionate increase in the NAV per Share of the Fund. Therefore, the reverse split did not change the aggregate value of a shareholder’s investment or the total market value of the shares outstanding.

The reverse split was applied retroactively for all periods presented in the financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(a) Use of Estimates

Management makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of increases and decreases in the net assets from operations during the reporting period. Actual results could differ from those estimates.

(b) Indemnification

In the normal course of business, the Fund may enter into contracts that contain a variety of representations which provide general indemnifications for certain liabilities. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

(c) Security Valuation

A description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

Equity securities and exchange-traded funds are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded. Securities regularly traded in an over the counter market are valued at the latest quoted sale price in such market or in the case of the New York Stock Exchange (“NYSE”), at the NYSE Official Closing Price. Such valuations are typically categorized as Level 1 in the fair value hierarchy. The Board of Trustees of the Trust (the “Board”) has designated Virtus ETF Advisers LLC (the “Adviser”) to serve as its valuation designee, pursuant to Rule 2a-5 under the 1940 Act, to perform the fair value determinations relating to any or all Fund investments. Accordingly, if market quotations are not readily available, or if it is determined that a quotation of a security does not represent fair value, then the security is valued by the Adviser at fair value as determined in good faith using procedures approved by the Board. Such valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy.

Listed derivatives, such as options, that are actively traded are valued based on quoted prices from the exchange and are categorized as Level 1 in the hierarchy. Over-the-counter derivative contracts, which include options, do not require material subjectivity as pricing inputs are observed from actively quoted markets and are categorized as Level 2 in the hierarchy.

92

Notes to Financial Statements (continued)

October 31, 2023

(d) Fair Value Measurement

Accounting Standards Codification, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into fair value measurement. Under ASC 820, various inputs are used in determining the value of the Fund’s investments. The Adviser, on behalf of the Fund, utilizes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These inputs are summarized in the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The hierarchy classification of inputs used to value the Fund’s investments at October 31, 2023, is disclosed at the end of the Fund’s Schedule of Investments.

(e) Security Transactions, Investment Income and Return of Capital Estimates

Security transactions are accounted for on the trade date. Realized gains and losses on sales of investment securities are calculated using specific identification. Dividend income is recognized on the ex-dividend date. Expenses are recognized on the accrual basis. The Fund amortizes premiums and accretes discounts using the effective interest method.

The Fund invests in master limited partnerships (“MLPs”) which make distributions that are primarily attributable to return of capital. The Fund records investment income and return of capital in the Statement of Operations using management’s estimate of the percentage of income included in the distributions received from each MLP based on historical information from the MLPs and other industry sources. These estimates may be adjusted based on information received from the MLPs after the tax and fiscal year ends.

The return of capital portion of the MLP distributions is a reduction to investment income and a reduction in the cost basis of each investment which increases net realized gain (loss) and net change in unrealized appreciation (depreciation). If the return of capital distributions exceed its cost basis, the distributions are treated as realized gains. The actual amounts of income and return of capital are only determined by each MLP after its fiscal year-end and may differ from the estimated amounts.

(f) Expenses

The Fund pays all of its expenses not assumed by Infrastructure Capital Advisors, LLC (the “Sub-Adviser”) or the Adviser. General Trust expenses that are allocated among and charged to the assets of the Fund and other series of the Trust are done so on a basis that the Board deems fair and equitable, which may be on a basis of relative net assets of the Fund and other series of the Trust or the nature of the services performed and relative applicability to the Fund and other series of the Trust.

(g) Short Sales

The Fund may sell securities short. A short sale is a transaction in which the Fund sells a security it does not own in anticipation of a decline in market price. To sell a security short, the Fund must borrow the security. The Fund’s obligation to replace the security borrowed and sold short will be fully collateralized at all times by the proceeds from the short sale retained by the broker and by cash and securities deposited in a segregated account with the Fund’s custodian. If the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will realize a loss, and if the price declines during the period, the Fund will realize a gain. Any realized gain will be decreased, and any realized loss increased, by the amount of transaction costs. On the ex-dividend date, dividends on short sales are recorded as an expense to the Fund.

In accordance with the terms of its prime brokerage agreement, the Fund may receive rebate income or be charged a fee on borrowed securities which is reported as “Interest Expense” on the Statement of Operations. Such income or fee is calculated on a daily basis based upon the market value of each borrowed security and a variable rate that is dependent upon the availability of such security.

93

Notes to Financial Statements (continued)

October 31, 2023

(h) Distributions to Shareholders

Distributions to shareholders are declared and paid on a monthly basis and are recorded on the ex-dividend date. The Fund uses a cash flow-based distribution approach based on the Fund’s net cash flow received from portfolio investments.

The estimated character of the distributions paid will either be a dividend (ordinary income eligible to be treated as qualified dividend income) or a return of capital. Distributions made from current or accumulated earnings and profits of the Fund will be taxable to shareholders as dividend income. Distributions that are in an amount greater than the Fund’s current and accumulated earnings and profits will represent a return of capital to the extent of a shareholder’s basis in their common shares, and such distributions will correspondingly increase the realized gain upon the sale of their common shares. Additionally, distributions not paid from current or accumulated earnings and profits that exceed a shareholder’s tax basis in their common shares will generally be taxed as a capital gain. This estimate is based on the Fund’s operating results during the period.

(i) Cash and Cash Equivalents

Cash is comprised of demand deposits. Cash equivalents are highly liquid investments with original maturities of 90 days or less. The carrying amount of cash equivalents, primarily representing money market funds is a reasonable estimate of fair value. These assets are considered to be Level 1 securities, per Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures.

3. INVESTMENT MANAGEMENT RELATED PARTIES AND OTHER AGREEMENTS

Investment Advisory Agreement

The Trust, on behalf of the Fund, has entered into an Investment Advisory Agreement (the “Advisory Agreement”) with the Adviser, an indirect wholly-owned subsidiary of Virtus Investment Partners, Inc. (Ticker: VRTS) (together with its affiliates, “Virtus”). Pursuant to the Advisory Agreement, the Adviser has overall supervisory responsibility for the general management and investment of the Fund’s securities portfolio. For its services to the Fund, the Adviser is entitled to receive a fee, payable monthly, at an annual rate of 0.075% of the Fund’s average daily net assets, subject to a minimum annual fee of $25,000. The Sub-Adviser pays the Adviser’s fee out of the Sub-Adviser’s fee, pursuant to the Sub-Adviser’s unified fee arrangement with the Fund, as described below.

The Advisory Agreement may be terminated by the Trust on behalf of a Fund with the approval of a Fund’s Board or by a vote of the majority of a Fund’s shareholders. The Advisory Agreement may also be terminated by the Adviser by not more than 60 days’ nor less than 30 days’ written notice.

Sub-Advisory Agreement

Infrastructure Capital Advisors, LLC (the “Sub-Adviser”) provides investment advice and management services to the Fund. Pursuant to an investment sub-advisory agreement among the Trust, the Sub-Adviser and the Adviser, the Fund pays the Sub-Adviser a fee, payable monthly, at an annual rate of 0.95% of the Fund’s average daily net assets. The Sub-Adviser has agreed to pay all expenses of the Fund, except the Sub-Adviser’s fee, brokerage expenses, taxes, interest, litigation expenses, payments under any 12b-1 plan adopted by the Fund, and other non-routine or extraordinary expenses of the Fund.

Principal Underwriter

Pursuant to the terms of a Distribution Agreement with the Trust, VP Distributors, LLC (the “Distributor”) serves as the Fund’s principal underwriter. The Distributor receives compensation from the Adviser for the statutory underwriting services it provides to the Fund. The Distributor will not distribute shares in less than Creation Units (as hereinafter defined), and does not maintain a secondary market in shares. The shares are traded in the secondary market. The Distributor is an indirect wholly-owned subsidiary of Virtus.

Operational Administrator

Virtus ETF Solutions LLC (the “Administrator”) serves as the Fund’s operational administrator. The Administrator supervises the overall administration of the Trust and the Fund including, among other responsibilities, the coordination and day-to-day oversight of the Fund’s operations, the service providers’ communications with the Fund and each other and assistance with Trust, Board and contractual matters related to the Fund. The Administrator also provides persons satisfactory to the Board to serve as officers of the Trust. The Administrator is an indirect wholly-owned subsidiary of Virtus.

Accounting Services Administrator, Custodian and Transfer Agent

The Bank of New York Mellon (“BNY Mellon”) provides administrative, accounting, tax and financial reporting for the maintenance and operations of the Trust as the Fund’s accounting services administrator. BNY Mellon also serves as the custodian for the Fund’s assets, and serves as transfer agent and dividend paying agent for the Fund.

94

Notes to Financial Statements (continued)

October 31, 2023

Affiliated Shareholders

At October 31, 2023, the Sub-Adviser held shares of the Fund which may be redeemed at any time that aggregated to the following:

Fund

Shares

% of shares
outstanding

InfraCap MLP ETF

48,045

0.5%

4. CREATION AND REDEMPTION TRANSACTIONS

The Fund issues and redeems shares on a continuous basis at Net Asset Value (“NAV”) in aggregate blocks of shares or multiples thereof called “Creation Units.” The Fund’s Creation Units may be issued and redeemed generally for cash or an in-kind deposit of securities held by the Fund. In each instance of cash creations or redemptions, the Trust may impose transaction fees based on transaction expenses related to the particular exchange that will be higher than the transaction fees associated with in-kind purchases or redemptions.

Only “Authorized Participants” who have entered into contractual arrangements with the Distributor may purchase or redeem shares directly from the Fund. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Fund. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees.

Authorized participants pay a fixed transaction fee of $500 to the shareholder servicing agent when purchasing and redeeming Creation Units of the Fund. The transaction fee is used to defray the costs associated with the issuance and redemption of Creation Units.

5. FEDERAL INCOME TAX

The Fund is taxed as a regular C-corporation for federal income tax purposes and as such is obligated to pay federal and applicable state and foreign corporate taxes on its taxable income. Currently, the federal income tax rate for a corporation is 21 percent. This treatment differs from most investment companies, which elect to be treated as “regulated investment companies” under the Code in order to avoid paying entity level income taxes. Under current law, the Fund is not eligible to elect treatment as a regulated investment company due to its investments primarily in MLPs invested in energy assets. The Fund expects that substantially all of the distributions it receives from MLPs may be treated as a tax-deferred return of capital, thus reducing the Fund’s current tax liability. However, the amount of taxes paid by the Fund will vary depending on the amount of income and gains derived from investments and/or sales of MLP interests and such taxes will reduce your return from an investment in the Fund.

Cash distributions from MLPs to the Fund that exceed the Fund’s allocable share of such MLP’s net taxable income are considered a tax deferred return of capital that will reduce the Fund’s adjusted tax basis in the equity securities of the MLP. These reductions in the Fund’s adjusted tax basis in the MLP equity securities will increase the amount of any taxable gain (or decrease the amount of any tax loss) recognized by the Fund on a subsequent sale of the securities. The Fund will accrue deferred income taxes for any future tax liability associated with (i) that portion of MLP distributions considered to be a tax-deferred return of capital as well as (ii) capital appreciation of its investments. Upon the sale of an MLP security, the Fund may be liable for previously deferred taxes. The Fund will rely to some extent on information provided by the MLPs, which is not necessarily timely, to estimate the deferred tax liability for purposes of financial statement reporting and determining the Fund’s NAV. From time to time, the Adviser will modify the estimates or assumptions related to the Fund’s deferred tax liability as new information becomes available. The Fund will generally compute deferred income taxes based on the federal income tax rate applicable to corporations and an assumed rate attributable to state taxes.

The Fund’s income tax expense/(benefit) consists of the following:

As of October 31, 2023

Current

Deferred

Total

Federal

$4,308,701

$6,594,314

$10,903,015

State

175,405

655,754

831,159

Valuation Allowance

3,394,091

3,394,091

Total Tax Expense/(Benefit)

$4,484,106

$10,644,159

$15,128,265

95

Notes to Financial Statements (continued)

October 31, 2023

Components of the Fund’s deferred tax assets and liabilities are as follows:

As of
October 31, 2023

Deferred Tax Assets: 

Capital Loss Carryforward

$46,414,999

Other

318,064

Total Deferred Tax Assets

46,733,063

Less Valuation Allowance

(29,922,440

)

Net Deferred Tax Assets

$16,810,623

Deferred Tax Liabilities:

Net Unrealized Gain on Investment

$16,279,954

Book vs tax deferred income from MLP Investments

11,174,828

Total Deferred Tax Liabilities

27,454,782

Total Net Deferred Tax Asset/(Liability)

$(10,644,159

)

The Fund reviews the recoverability of its deferred tax assets based upon the weight of available evidence. When assessing the recoverability of its deferred tax assets, significant weight was given to the effects of potential future realized and unrealized gains on investments and the period over which these deferred tax assets can be realized. Currently, any capital losses that may be generated by the Fund in the future are eligible to be carried back up to three years and can be carried forward for five years to offset capital gains recognized by the Fund in those years. As of the year ended October 31, 2023, the Fund has a capital loss carryforward of $212,377,997 of which $42,521,302 expires in 2024, $153,290,897 expires in 2025, and $16,565,798 expires in 2026.

Based upon the Fund’s assessment, it has determined that it is “more-likely-than-not” that a portion of its deferred tax assets will not be realized through future taxable income of the appropriate character. Accordingly, a valuation allowance has been established for the Fund’s deferred tax assets. The Fund will continue to assess the need for a valuation allowance in the future. Significant changes in the fair value of its portfolio of investments may change the Fund’s assessment of the recoverability of these assets and may result in an adjustment of the valuation allowance against all or a portion of the Fund’s gross deferred tax assets.

Total income tax (benefit)/expense (current and deferred) differs from the amount computed by applying the federal statutory income tax rate of 21% to net investment and realized and unrealized gain/(losses) on investment before taxes as follows for the Fund:

Amount

Rate

Income Tax (Benefit) at Statutory Rate

$11,002,918

21.00

%

State Income Taxes (Net of Federal Benefit)

447,924

0.85

%

Permanent Differences, Net

(166,568

)

(0.30

)%

Effect of State Tax Rate Change

449,899

0.86

%

Valuation Allowance

3,394,092

6.48

%

Net Income Tax Expense/(Benefit)

$15,128,265

28.89

%

The Fund recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. For the period from inception to October 31, 2023, the Fund does not have any accrued penalties or interest.

The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on U.S. tax returns and state tax returns filed since inception of the Fund. The Fund’s tax years, October 31, 2020 through October 31, 2022, remain subject to examination by tax authorities in the United States. Due to the nature of the Fund’s investments, the Fund may be required to file income tax returns in several states. As of the year ended October 31, 2023, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially over the next fiscal year.

At October 31, 2023, the adjusted cost basis of investments and gross unrealized appreciation and depreciation of investments, excluding written options, for federal income tax purposes were as follows:

Fund

Federal Tax
Cost Of
Investments

Gross
Unrealized
Appreciation

Gross
Unrealized
Depreciation

Net Unrealized
Appreciation
(Depreciation)

InfraCap MLP ETF

$308,444,939

$128,029,755

$ (2,174,402

)

$125,855,353

96

Notes to Financial Statements (continued)

October 31, 2023

The tax character of dividends and distributions paid during the fiscal years ended October 31, 2023 and October 31, 2022 were as follows:

Fund

2023

2022

Distributions Paid From Ordinary Income

Distributions Paid From Ordinary Income

InfraCap MLP ETF

$26,762,601

$27,209,601

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term investments), subscriptions in-kind and redemptions in-kind for the year ended October 31, 2023 were as follows:

Fund

Purchases

Sales

Subscriptions
In-Kind

Redemptions
In-Kind

InfraCap MLP ETF

$282,466,860

$332,148,264

$30,287,434

$

7. DERIVATIVE FINANCIAL INSTRUMENTS

Options

The Fund may write covered call and put options on portfolio securities and other financial instruments. Premiums received are recorded as liabilities. The liabilities are subsequently adjusted to reflect the current value of the options written. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or are closed are added to or offset against the proceeds or amount paid on the transactions to determine the net realized gain or loss. By writing a covered call option, the Fund, in exchange for the premium, foregoes the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase. By writing a put option, the Fund, in exchange for the premium, accepts the risk of having to purchase a security at an exercise price that is above the current price. Changes in value of written options are reported as change in unrealized gain (loss) on written options in the Statement of Operations. When the written option expires, is terminated or is sold, the Fund will record a gain or loss, which is reported as realized gain (loss) on written options in the Statement of Operations. Written covered call options limit the upside potential of a security above the strike price. Written put options subject the Fund to risk of loss if the value of the security declines below the exercise price minus the put premium.

The Fund may purchase call and put options on the portfolio securities or other financial instruments. The Fund may purchase call options to protect against an increase in the price of the security or financial instrument it anticipates purchasing. The Fund may purchase put options on securities which it holds or other financial instruments to protect against a decline in the value of the security or financial instrument or to close out covered written positions. Changes in value of purchased options are reported as part of change in unrealized gain (loss) on investments in the Statement of Operations. When the purchased option expires, is terminated or is sold, the Fund will record a gain or loss, which is reported as part of realized gain (loss) on investments in the Statement of Operations. Risks may arise from an imperfect correlation between the change in market value of the securities held by the Fund and the prices of options relating to the securities purchased or sold by the Fund and from the possible lack of liquid secondary market for an option. The maximum exposure to loss for any purchased option is limited to the premium initially paid for the option.

Transactions in derivative instruments reflected on the Statement of Assets and Liabilities at October 31, 2023 are as follows:

Liabilities

Equity Risk

Written options, at value

$(669,886

)

Transactions in derivative instruments reflected on the Statement of Operations during the year ended October 31, 2023 were as follows:

Net Realized Gain (Loss) on:

Equity Risk

Investments*

$(103,518

)

Written options

2,836,231

Change in Net Unrealized Appreciation (Depreciation) on:

Equity Risk

Written options

$46,521

  

*Purchased option contracts are included in Net Realized Gain (Loss) on Investments within the Statement of Operations.

97

Notes to Financial Statements (continued)

October 31, 2023

For the year ended October 31, 2023, the monthly average market value of the purchased and written options contracts held by the Fund were $542 and $(796,282), respectively.

8. BORROWINGS

The Fund entered into Lending Agreements (the “Agreements”) with commercial banks (the “Banks”) that allows the Fund to borrow cash from the Banks. Borrowings under the Agreements are collateralized by investments of the Fund. If the Fund defaults with respect to any of its obligations under the Agreements, the Banks may foreclose on assets of the Fund and/or the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the Agreements, necessitating the sale of securities at potentially inopportune times. Interest is charged at the Overnight Bank Funding Rate (“OBFR”) plus an additional percentage rate on the amount borrowed. The Agreements have an on-demand commitment term. For the year ended October 31, 2023, the average daily borrowings under the Agreements and the weighted average interest rate were $94,429,647 and 5.87%, respectively.

9. INVESTMENT RISKS

As with any investment, an investment in the Fund could result in a loss or the performance of the Fund could be inferior to that of other investments. An investor should consider the Fund’s investment objectives, risks, and charges and expenses carefully before investing. The Fund’s prospectus and statement of additional information contain this and other important information.

MLP Risk

Investments in securities of MLPs involve risks that differ from investments in common stock including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP’s general partner and cash flow risks. MLP common units and other equity securities can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs or the energy sector, changes in a particular issuer’s financial condition or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities also can be affected by fundamentals unique to the partnership or company, including earnings power and coverage ratios.

Market Risk

Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on the Fund and its investments, including hampering the ability of the Fund’s portfolio manager(s) to invest the Fund’s assets as intended.

10. LIBOR

In July 2017, the head of the United Kingdom Financial Conduct Authority (“FCA”) announced the intention to phase out the use of LIBOR by the end of 2021. However, after subsequent announcements by the FCA, the LIBOR administrator and other regulators, certain of the most widely used LIBORs continued until approximately June 30, 2023. The ICE Benchmark Administration Limited, which is regulated and authorized by FCA, and the administrator of LIBOR, ceased publishing certain LIBOR settings on December 31, 2021. On April 3, 2023, the FCA announced its decision to require LIBOR’s administrator to continue to publish the 1-month, 3-month, and 6-month U.S. dollar settings under an unrepresentative synthetic methodology until September 30, 2024. On March 15, 2022, the Adjustable Interest Act (LIBOR) Act (the “LIBOR Act”) was enacted into law which directs the Federal Reserve Board, as a fallback mechanism, to identify benchmark rates based on SOFR that will replace LIBOR in certain financial contracts after June 30, 2023. On December 16, 2022, the Federal Reserve adopted regulations implementing the LIBOR Act. The Fund may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The expected discontinuation of LIBOR could have a significant impact on the financial markets and may present a material risk for certain market participants, including the Fund. Abandonment of or modifications to LIBOR could lead to significant short- and long-term uncertainty and market instability. The risks associated with this discontinuation and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. It remains uncertain the effects such changes will have on the Fund, issuers of instruments in which the Fund invests, and the financial markets generally.

11. 10% SHAREHOLDERS

As of October 31, 2023, the Fund had individual shareholder account(s) and/or omnibus shareholder account(s) (comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding of the Fund as detailed below:

Fund

% of Shares
Outstanding

Number of
Accounts

InfraCap MLP ETF

50%

2

98

Notes to Financial Statements (continued)

October 31, 2023

12. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04 (“ASU 2020-04”), Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered reference rates as of the end of 2021. In March 2021, the administrator for LIBOR announced the extension of the publication of a majority of the USD LIBOR settings to June 30, 2023. On December 21, 2022, the FASB issued ASU 2022-06 to defer the sunset date of ASC 848 until December 31, 2024. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management is currently evaluating the impact, if any, of ASU 2020-04 and ASU 2020-06, but does not believe there will be a material impact.

13. NEW REGULATORY PRONOUNCEMENT

In October 2022, the SEC adopted a rule and form amendments relating to tailored shareholder reports for mutual funds and ETFs; and fee information in investment company advertisements. The rule and form amendments will require mutual funds and ETFs to transmit streamlined shareholder reports that highlight key information to investors. The rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective in January 2023 and there is an 18-month transition period after the effective date of the amendment with a compliance date of July 2024.

14. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the issuance of these financial statements and has determined that there are no material events that would require disclosure.

99

Report of Independent Registered Public Accounting Firm

 

To the Board of Trustees of ETFis Series Trust I and Shareholders of InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Newfleet Multi-Sector Bond ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF, and Virtus WMC International Dividend ETF

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Newfleet Multi-Sector Bond ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF and Virtus WMC International Dividend ETF (eight of the funds constituting ETFis Series Trust I, hereafter collectively referred to as the “Funds”) as of October 31, 2023, the related statements of operations for the year ended October 31, 2023, the statement of cash flows for Virtus InfraCap U.S. Preferred Stock ETF for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2023, the results of each of their operations and the cash flows for Virtus InfraCap U.S. Preferred Stock ETF for the year then ended, the changes in each of their net assets for each of the two years in the period ended October 31, 2023 and each of the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023, by correspondence with the custodian, transfer agent, and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December
21, 2023

We have served as the auditor of one or more investment companies in Virtus ETF Solutions since 2017.

PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103
T: (267) 330 3000,
F: (267) 330 3300, www.pwc.com/us

100

Report of Independent Registered Public Accounting Firm (continued)

 

To the Board of Trustees of ETFis Series Trust I and Shareholders of InfraCap MLP ETF

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of InfraCap MLP ETF (one of the funds constituting ETFis Series Trust I, hereafter referred to as the “Fund”) as of October 31, 2023, the related statements of operations and cash flows for the year ended October 31, 2023, the statement of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2023 and the financial highlights for each of the five years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023, by correspondence with the custodian, transfer agent, and broker. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December
21, 2023

We have served as the auditor of one or more investment companies in Virtus ETF Solutions since 2017.

PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103
T: (267) 330 3000, F: (267) 330
3300, www.pwc.com/us

101

Statement Regarding Liquidity Risk Management Program (unaudited)

Pursuant to Rule 22e-4 under the 1940 Act, the Funds have adopted a liquidity risk management program (the “Program”) to govern the Funds’ approach to managing liquidity risk, which is the risk that a Fund would not be able to meet redemption requests without significant dilution of remaining investors’ interests in the Fund. The Program is overseen by the Adviser as the Funds’ Liquidity Risk Management Program Administrator (the “Program Administrator”), and the Program’s principal objectives include assessing, managing and periodically reviewing each Fund’s liquidity risk, based on factors specific to the circumstances of the Funds. Assessment and management of a Fund’s liquidity risk under the Program take into consideration certain factors, such as the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions, its short- and long-term cash-flow projections during both normal and reasonably foreseeable stressed conditions, and its cash and cash-equivalent holdings and access to other funding sources. As required by the rule, the Program includes policies and procedures for classification of Fund portfolio holdings in four liquidity categories, maintaining certain levels of highly liquid investments, and limiting holdings of illiquid investments.

At a meeting of the Board held on May 22, 2023, the Board received a report from the Program Administrator addressing the operation and management of the Program for calendar year 2022 (the “Review Period”). The Program Administrator’s report noted that for the Review Period, the Program Administrator believed that the Program was implemented and operated effectively in all material respects and that existing procedures, controls and safeguards were appropriately designed to enable the Program Administrator to administer the Program in compliance with Rule 22e-4. The Program Administrator’s report noted that during the Review Period, there were no events that created liquidity related concerns for the Funds. The Program Administrator’s report further noted that no significant or reportable changes had been made to the Program during the Review Period and no material changes were made to the Program as a result of the Program Administrator’s annual review.

There can be no assurance that the Program will achieve its objectives in the future. Please refer to a Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in that Fund may be subject.

102

Trustees and Officers of the Trust (unaudited)

Information pertaining to the Trustees and officers of the Trust as of the date of issuance of this report is set forth below. The Statement of Additional Information (“SAI”) includes additional information about the Fund’s Trustees and is available, without charge, upon request, by calling the Adviser (toll-free) at (888)-383-4184.

The address for each Trustee and officer is 31 West 52nd Street, 16th Floor, New York, NY 10019. Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees.

Name and
Year of Birth

Position(s) Held
with Trust

Length of
Time Served

Principal Occupation(s)
During Past Five Years

Number of
Portfolios in Fund Complex*
Overseen by
Trustee

Other
Directorships
Held by Trustee
During Past
Five Years

INDEPENDENT TRUSTEES

Myles J. Edwards
Year of Birth: 1961

Trustee

Since 2016

General Counsel and Chief Compliance Officer (since 2021), Sanctuary Securities, Inc. and Sanctuary Advisors, LLC; Chief Compliance Officer (since 2020), 1776 Wealth, Inc.; General Counsel and Chief Compliance Officer (since 2019), Bruderman Brothers, LLC and Bruderman Asset Management, LLC; Chief Compliance Officer (since 2018), Netrex Capital Markets, LLC; Chief Executive Officer (since 2018), Final Compliance; Chief Compliance Officer (since 2018), Knight Vinke; and General Counsel, Chief Compliance Officer and Chief Operating Officer (2014 to 2018), Shufro, Rose & Co., LLC.

17

Trustee (since 2015), Virtus ETF Trust II (7 portfolios)

James A. Simpson
Year of Birth: 1970

Trustee

Since Inception

President (since 2009), ETP Resources, LLC (a financial services consulting company).

17

Trustee (since 2018), Asset Management Fund (5 portfolios); Trustee (since 2015), Virtus ETF Trust II (7 portfolios)

Robert S. Tull, Jr.

Year of Birth: 1952

Trustee

Since Inception

President (since 2017), ProcureAM, LLC; President (since 2018), Procure Holdings LLC; President (2005 to 2018), Robert Tull & Co.

17

Trustee (since 2015), Virtus ETF Trust II (7 portfolios); Trustee (since 2018), Procure ETF Trust II (1 portfolio)

INTERESTED TRUSTEE**

William J. Smalley
Year of Birth: 1983

Trustee, President and Chief Executive Officer

Since Inception

President (since 2012), Virtus ETF Solutions LLC; Managing Principal (2012 to 2016) and Executive Vice President (2016 to 2019), ETF Distributors LLC; Managing Director (since 2012), Virtus ETF Advisers LLC; President and Chief Executive Officer (since 2013), ETFis Series Trust I; and President and Chief Executive Officer (since 2015), Virtus ETF Trust II.

10

None

103

Trustees and Officers of the Trust (unaudited) (continued)

Name and
Year of Birth

Position(s) Held
with Trust

Length of
Time Served

Principal Occupation(s)
During Past Five Years

Number of
Portfolios in Fund Complex*
Overseen by
Trustee

Other
Directorships
Held by Trustee
During Past
Five Years

OTHER EXECUTIVE OFFICERS

Timothy Branigan
Year of Birth: 1976

Fund Chief
Compliance
Officer

Deputy
Fund Chief
Compliance
Officer

Assistant
Chief
Compliance
Officer

Since 2022

 

 

February
2022 to
June 2022

 

2020 to 2022

Various officer positions (since 2019) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.

N/A

N/A

Daphne Chisolm Year of Birth: 1969

Chief Legal Officer and Secretary

Since May 2023

Vice President and Senior Counsel (since 2023), Virtus Investment Partners, Inc.; Attorney at Law engaged in private practice as a solo practitioner (2018 to 2023); and various officer positions (since 2023) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.

N/A

N/A

Brinton W. Frith
Year of Birth: 1969

Treasurer and Chief Financial Officer

Since Inception

President (since 2013), Virtus ETF Advisers LLC; Vice President (since 2016) and Managing Director (since 2013), Virtus ETF Solutions LLC; Treasurer and Chief Financial Officer (since 2013), ETFis Series Trust I; and Treasurer and Chief Financial Officer (since 2015), Virtus ETF Trust II.

N/A

N/A

Julia Short
Year of Birth: 1972

Senior Vice President

Since 2022

Senior Vice President, Product Development (since 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2017) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; and Managing Director, Product Manager, RidgeWorth Investments (2004 to 2017).

N/A

N/A

104

Trustees and Officers of the Trust (unaudited) (continued)

Name and
Year of Birth

Position(s) Held
with Trust

Length of
Time Served

Principal Occupation(s)
During Past Five Years

Number of
Portfolios in Fund Complex*
Overseen by
Trustee

Other
Directorships
Held by Trustee
During Past
Five Years

Richard W. Smirl

Year of Birth: 1967

Executive Vice President

Since 2022

Chief Operating Officer (since 2021); Virtus Investment Partners, Inc.; Executive Vice President (since 2021), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Executive Vice President (since 2021) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; Chief Operating Officer (2018 to 2021), Russell Investments; Executive Director (Jan. to July 2018), State of Wisconsin Investment Board; and Partner and Chief Operating Officer (2004 to 2018), William Blair Investment Management.

N/A

N/A

__________

* As of the date of the issuance of this report, the Fund Complex consisted of the Trust, which consisted of ten portfolios—InfraCap REIT Preferred ETF, Virtus InfraCap U.S. Preferred Stock ETF, Virtus LifeSci Biotech Clinical Trials ETF, Virtus LifeSci Biotech Products ETF, Virtus Newfleet Multi-Sector Bond ETF, Virtus Private Credit Strategy ETF, Virtus Real Asset Income ETF, Virtus Reaves Utilities ETF, Virtus WMC International Dividend ETF and InfraCap MLP ETF, and Virtus ETF Trust II, which consisted of seven portfolios—Virtus Duff & Phelps Clean Energy ETF, Virtus Newfleet ABS/MBS ETF, Virtus Newfleet Short Duration High Yield Bond ETF, Virtus Newfleet Short Duration Core Plus Bond ETF, Virtus Seix Senior Loan ETF, Virtus Stone Harbor Emerging Markets High Yield Bond ETF and Virtus Terranova U.S. Quality Momentum ETF.

** William J. Smalley is an “interested person” as defined in the Investment Company Act of 1940, because he is an employee of the Adviser.

105

Supplemental Information (unaudited)

INFORMATION ABOUT PORTFOLIO HOLDINGS

The Trust files a complete schedule of portfolio holdings for each Fund with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT-P. Form N-PORT-P is available on the SEC’s website at https://www.sec.gov.

The Funds’ premium/discount information for the most recently completed calendar year, and the most recently completed calendar quarters since that year is available by visiting www.virtusetfs.com or by calling (888) 383-4184.

INFORMATION ABOUT PROXY VOTING

A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the SAI. The SAI is available without charge upon request by calling toll-free at (888) 383-0553, by accessing the SEC’s website at www.sec.gov or by accessing the Funds’ website at www.virtusetfs.com.

Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30th is available by calling toll-free at (888) 383-0553 or by accessing the SEC’s website at www.sec.gov.

TAX INFORMATION

For the fiscal year ended October 31, 2023, the Funds make the following disclosures for federal income tax purposes. Below is listed the percentages, or the maximum amount allowable, of its ordinary income dividends (“QDI”) to qualify for the lower tax rates applicable to individual shareholders, and the percentage of ordinary income dividends earned by each Fund which qualifies for the dividends received deduction (“DRD”) for corporate shareholders. The actual percentage of QDI and DRD for the calendar year will be designated in year-end tax statements.

Funds

QDI

DRD

InfraCap REIT Preferred ETF

0.00%

0.00%

Virtus InfraCap U.S. Preferred Stock ETF

69.65%

59.22%

Virtus LifeSci Biotech Clinical Trials ETF

0.00%

0.00%

Virtus LifeSci Biotech Products ETF

0.00%

0.00%

Virtus Newfleet Multi-Sector Bond ETF

0.00%

0.00%

Virtus Private Credit Strategy ETF

1.57%

0.33%

Virtus Real Asset Income ETF

64.87%

16.91%

Virtus WMC International Dividend ETF

92.78%

0.00%

c/o VP Distributors, LLC

One Financial Plaza

Hartford, Connecticut 06103

8572(12/23)