SCHEDULE 13G/A: First Trust Entities Disclose 19.23% Passive Stake in Virtus Stone Harbor Emerging Markets Income Fund

First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation jointly reported a 19.23% beneficial ownership stake in Virtus Stone Harbor Emerging Markets Income Fund as of March 31, 2025.

Summary

• The filing is an Amendment No. 7 to Schedule 13G, jointly filed by First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation.
• The reporting persons collectively beneficially own 5,861,155 shares of Common stock in Virtus Stone Harbor Emerging Markets Income Fund, representing 19.23% of the class.
• First Trust Portfolios L.P. is identified as a Broker or Dealer (BD), First Trust Advisors L.P. as an Investment Adviser (IA), and The Charger Corporation as a Parent Holding Company (HC).
• The Charger Corporation is the General Partner of both First Trust Portfolios L.P. and First Trust Advisors L.P.
• The shares are primarily held by unit investment trusts sponsored by First Trust Portfolios L.P. and other registered investment companies, pooled investment vehicles, and/or separately managed accounts for which First Trust Advisors L.P. serves as investment advisor/sub-advisor.
• The reporting persons explicitly state they have no sole or shared voting power over these shares; voting power resides with the trustee of the unit investment trusts.
• They possess shared dispositive power over all 5,861,155 shares.
• The securities were acquired and are held in the ordinary course of business and not for the purpose or effect of changing or influencing the control of the issuer.

Sentiment

Score: 5

Explanation: Neutral. This is a routine regulatory filing (Schedule 13G) disclosing passive ownership, with no explicit positive or negative operational or financial news for the issuer. The content is purely informational regarding a significant, non-controlling stake.

Positives

• The filing confirms a significant, stable institutional ownership stake by First Trust entities, indicating continued investment in the fund.
• The explicit statement that the shares are held in the ordinary course of business and not for control purposes suggests a passive, long-term investment approach, which can be a positive for market stability.

Risks

• The reporting persons disclaim beneficial ownership of the shares, as they are held by unit investment trusts and other investment vehicles, which could imply a lack of direct control over the investment decisions by the reporting entities themselves.

Future Outlook

This Schedule 13G filing is a disclosure of current beneficial ownership and does not contain any forward-looking statements or guidance regarding the future performance or strategy of Virtus Stone Harbor Emerging Markets Income Fund or the reporting entities.

Management Comments

• "The securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect."

Industry Context

This filing is a routine regulatory disclosure for institutional investors holding a significant stake (over 5%) in a publicly traded company. It reflects the ongoing investment activities of large asset managers like First Trust in various funds, including those focused on emerging markets income. Such disclosures provide transparency into major ownership positions within the investment management industry.

Comparison to Industry Standards

• The filing of a Schedule 13G for a passive stake exceeding 5% is a standard compliance requirement for institutional investors in the U.S. market.
• The structure of ownership through unit investment trusts (UITs) and other managed accounts is a common practice for large investment firms like First Trust, allowing them to manage diverse portfolios for various clients.
• The explicit disclaimer of voting power by the reporting entities, with voting rights residing with the trustee of the UITs, aligns with typical arrangements for certain pooled investment vehicles where the sponsor's role is primarily administrative and supervisory rather than direct voting control.

Stakeholder Impact

• Shareholders: Provides transparency regarding significant institutional ownership, confirming a large, passive stake by First Trust entities, which may contribute to market stability.
• Regulatory Authorities: Fulfills SEC disclosure requirements for significant beneficial ownership, ensuring market transparency.

Key Dates

Keywords

Virtus Stone Harbor Emerging Markets Income Fund, First Trust Portfolios, First Trust Advisors, The Charger Corporation, Schedule 13G, beneficial ownership, institutional ownership, investment fund, emerging markets, income fund, SEC filing, passive investment