VIRTUS ASSET TRUST (Form: 485BPOS, Received: 04/25/2019 16:06:22)

101 Munson Street
Greenfield, Massachusetts 01301
(Address of Principal Executive Offices)

Kevin J. Carr, Esq.
Counsel
Virtus Investment Partners, Inc.
100 Pearl St.
Hartford, Connecticut 06103
(Name and Address of Agent for Service)

Copies of All Correspondence to:
David C. Mahaffey, Esq.
Sullivan & Worcester LLP
1666 K Street, N.W.
Washington, D.C. 20006

TABLE OF CONTENTS

PROSPECTUS

VIRTUS ASSET TRUST

April 30, 2019

TICKER SYMBOL BY CLASS

FUND

Virtus Ceredex Large-Cap Value Equity Fund

SVIIX

SVIFX

STVTX

STVZX

Virtus Ceredex Mid-Cap Value Equity Fund

SAMVX

SMVFX

SMVTX

SMVZX

Virtus Ceredex Small-Cap Value Equity Fund

SASVX

STCEX

SCETX

VVERX

Virtus Seix Core Bond Fund

STGIX

STIGX

SCIGX

STGZX

Virtus Seix Corporate Bond Fund

SAINX

STIFX

STICX

Virtus Seix Floating Rate High Income Fund

SFRAX

SFRCX

SAMBX

SFRZX

Virtus Seix High Grade Municipal Bond Fund

SFLTX

SCFTX

Virtus Seix High Income Fund

SAHIX

STHTX

STHIX

STHZX

Virtus Seix High Yield Fund

HYPSX

SAMHX

HYLSX

HYIZX

Virtus Seix Investment Grade Tax-Exempt Bond Fund

SISIX

STTBX

Virtus Seix Short-Term Bond Fund

STSBX

SCBSX

SSBTX

Virtus Seix Short-Term Municipal Bond Fund

SMMAX

CMDTX

Virtus Seix Total Return Bond Fund

CBPSX

SAMFX

SCBLX

SAMZX

Virtus Seix U.S. Government Securities Ultra-Short Bond Fund

SSAGX

SIGVX

SIGZX

Virtus Seix U.S. Mortgage Fund

SLTMX

SCLFX

SLMTX

Virtus Seix Ultra-Short Bond Fund

SASSX

SISSX

Virtus Silvant Large-Cap Growth Stock Fund

STCIX

STCFX

STCAX

STCZX

Virtus Silvant Small-Cap Growth Stock Fund

SCGIX

SSCFX

SSCTX

Virtus WCM International Equity Fund

SCIIX

STITX

SCIZX

Virtus Zevenbergen Innovative Growth Stock Fund

SAGAX

SCATX

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. This prospectus contains important information that you should know before investing in Virtus mutual funds. Please read it carefully and retain it for future reference.

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports will no longer be sent by mail, unless specifically requested from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

You may elect at any time to receive not only shareholder reports but also certain other communications such as prospectuses from the fund electronically, or you may elect to receive all future shareholder reports in paper free of charge. If you own your shares directly with the fund, you may make such elections by calling the fund at 1-800-243-1574 or, with respect to requesting electronic delivery, by visiting www.virtus.com. An election made directly with the fund will apply to all Virtus Mutual Funds in which you own shares directly. If you own your shares through a financial intermediary, please contact your financial intermediary to make your request and to determine whether your election will apply to all funds in which you own shares through that intermediary.

Not FDIC Insured • No Bank Guarantee • May Lose Value

TABLE OF CONTENTS

Virtus Ceredex Large-Cap Value Equity Fund

Investment Objective

The fund has an investment objective of seeking to provide a high level of capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Fees and Expenses

The tables below illustrate the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Virtus Funds. Information about these and other discounts is available: (i) from your financial advisor or other financial intermediary; (ii) under “Sales Charges” on page 144 of the fund’s statutory prospectus; (iii) with respect to purchase of shares through specific intermediaries, in Appendix A to the fund’s statutory prospectus, entitled “Intermediary Sales Charge Discounts and Waivers;” and (iv) under “Alternative Purchase Arrangements” on page 114 of the fund’s statement of additional information.

The Virtus Ceredex Large-Cap Value Equity Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Ceredex Large Cap Value Equity Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.66	%		0.66	%		0.66	%		0.66	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses		0.36	%		0.26	%		0.36	%		0.17	%
Total Annual Fund Operating Expenses		1.27	%		1.92	%		1.02	%		0.83	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.03)	%		(0.20)	%		(0.05)	%		(0.11)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)		1.24	%		1.72	%		0.97	%		0.72	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.24% for Class A Shares, 1.72% for Class C Shares, 0.97% for Class I Shares and 0.72% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. It shows your costs if you sold your shares at the end of the period or continued to hold them. The example also assumes that your investment has a 5% return each year, that the fund’s operating expenses remain the same and that the expense reimbursement agreement remains in place for the contractual period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Virtus Ceredex Large-Cap Value Equity Fund 1

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$694		$952		$1,229		$2,018
Class C	Sold		$275		$584		$1,018		$2,227
Class C	Held		$175		$584		$1,018		$2,227
Class I	Sold or Held		$99		$320		$558		$1,243
Class R6	Sold or Held		$74		$254		$450		$1,015

Portfolio Turnover

The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal period, the fund’s portfolio turnover rate was 128% of the average value of its portfolio.

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S.-traded equity securities of large-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). As of the date of this prospectus, the subadviser considers large-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 1000 ® Index. As of December 31, 2018, the market capitalization range of the companies in the Russell 1000 ® Index was $365 million to $780 billion. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more and the fund may focus its investments in one or more sectors.

In selecting investments for purchase and sale, the subadviser chooses companies that it believes are undervalued in the market relative to the industry sector and the company’s own valuation history. The subadviser evaluates potential catalysts that may cause an upward re-rating of the stock’s valuation. The common stocks purchased for the fund generally pay dividends at the time of purchase or are expected to pay dividends soon after their purchase.

Principal Risks

The fund may not achieve its objective(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or companies in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The principal risks of investing in the fund are:

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

Equity Securities Risk. The risk that events negatively affecting issuers, industries or financial markets in which the fund invests will impact the value of the stocks held by the fund and, thus, the value of the fund’s shares over short or extended periods. Investments in a particular style or in small or medium-sized companies may enhance that risk.

Large Market Capitalization Companies Risk. The risk that the value of investments in larger companies may not rise as much as smaller companies, or that larger companies may be unable to respond quickly to competitive challenges, such as changes in technology and consumer tastes.

Market Volatility Risk. The risk that the value of the securities in which the fund invests may go up or down in response to the prospects of individual issuers and/or general economic conditions. Such price changes may be temporary or may last for extended periods.

Portfolio Turnover Risk. The risk that the fund’s principal investment strategies will result in a consistently high portfolio turnover rate. See the “Portfolio Turnover” section above for more information about the impact that portfolio turnover can have on your investment.

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Redemption Risk. The risk that redemption by one or more large shareholders or groups of shareholders of their holdings in the fund has an adverse impact on the remaining shareholders in the fund by causing the fund to take actions it would not otherwise take at a given time.

Sector Focused Investing Risk. The risk that events negatively affecting a particular market sector in which the fund focuses its investments will cause the value of the fund’s shares to decrease, perhaps significantly.

Value Stocks Risk. The risk that the fund will underperform when value investing is out of favor or that the fund’s investments will not appreciate in value as anticipated.

Performance Information

The bar chart and table below provide some indication of the potential risks of investing in the fund. The fund’s past performance, before and after taxes, is not necessarily an indication of how the fund will perform in the future. The fund has adopted the past performance of the Predecessor Fund as its own. The Predecessor Fund and the fund have identical investment objectives and strategies.

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: HEQ295IV9QOEKRK35VRRKEOVOI1O.JPG]

Best Quarter:

Q2/2009:

15.26%

Worst Quarter:

Q3/20118:

-16.98%

Year to Date (3/31/19):

11.64%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R6 Since Inception (8/1/14)
Class I
Return Before Taxes		-10.39	%		4.96	%		11.19	%			—
Return After Taxes on Distributions		-15.25	%		1.91	%		9.02	%			—
Return After Taxes on Distributions and Sale of Fund Shares		-2.52	%		3.73	%		9.05	%			—
Class A
Return Before Taxes		-15.77	%		3.43	%		10.22	%			—
Class C
Return Before Taxes		-11.09	%		4.17	%		10.25	%			—
Class R6
Return Before Taxes		-10.22	%			—			—		4.90	%
Russell 1000 ® Value Index (reflects no deduction for fees, expenses or taxes)		-8.27	%		5.95	%		11.18	%		5.33	%

Virtus Ceredex Large-Cap Value Equity Fund 3

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The Russell 1000 ® Value Index is a market capitalization-weighted index of value-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. After-tax returns are shown only for Class I Shares; after-tax returns for other classes will vary. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Ceredex Value Advisors LLC (“Ceredex”).

Portfolio Management

Mills Riddick, CFA, Chief Investment Officer of Ceredex, has managed the fund since 1995.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Class R6 Shares are available only to the following investors without a minimum initial investment or minimum additional purchases: certain employer-sponsored retirement plans, including Section 401(k), 403(b) and 457 plans, profit-sharing plans, money purchase pension and defined benefit plans, and non-qualified deferred compensation plans, in each case provided that plan level or omnibus accounts are held on the books of the fund. Other institutional investors may be permitted to purchase Class R6 Shares subject to the fund’s determination of eligibility and may be subject to a $2,500,000 minimum initial investment requirement.

In general, you may buy or sell shares of the fund by mail or telephone on any business day. You also may buy and sell shares through a financial advisor, broker-dealer or other financial intermediary.

Taxes

The fund’s distributions are taxable to you as either ordinary income or capital gains, except when your investment is through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the fund over another investment.

4 Virtus Ceredex Large-Cap Value Equity Fund

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Virtus Ceredex Mid-Cap Value Equity Fund

Investment Objective

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Fees and Expenses

The Virtus Ceredex Mid-Cap Value Equity Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Ceredex Mid-Cap Value Equity Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.69	%		0.69	%		0.69	%		0.69	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses		0.37	%		0.28	%		0.32	%		0.18	%
Total Annual Fund Operating Expenses		1.31	%		1.97	%		1.01	%		0.87	%
Recoupment of expenses previously reimbursed and/or waived		0.07	%		0.00	%		0.00	%		0.00	%
Less: Fee Waivers and/or Expense Reimbursements (b)		0.00	%		(0.18)	%		0.00	%		(0.08)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)		1.38	%		1.79	%		1.01	%		0.79	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.79% for Class C Shares and 0.79% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

6 Virtus Ceredex Mid-Cap Value Equity Fund

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$707		$973		$1,258		$2,069
Class C	Sold		$282		$601		$1,046		$2,281
Class C	Held		$182		$601		$1,046		$2,281
Class I	Sold or Held		$103		$322		$558		$1,236
Class R6	Sold or Held		$81		$270		$474		$1,065

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S.-traded equity securities of mid-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). As of the date of this prospectus, the subadviser considers mid-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell Midcap ® Index. As of December 31, 2018, the market capitalization range of the companies in the Russell Midcap ® Index was $365 million to $67.9 billion. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more and the fund may focus its investments in one or more sectors.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

Medium Market Capitalization Companies Risk. The risk that the fund’s investments in medium market capitalization companies will increase the volatility and risk of loss to the fund, as compared with investments in larger, more established companies.

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Value Stocks Risk. The risk that the fund will underperform when value investing is out of favor or that the fund’s investments will not appreciate in value as anticipated.

Performance Information

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: IOUGBKPNLEMSAH2QCNG46FA0A70E.JPG]

Best Quarter:

Q3/2009:

24.79%

Worst Quarter:

Q3/2011:

-24.11%

Year to Date (3/31/19):

14.34%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R6 Since Inception (8/1/14)
Class I
Return Before Taxes		-7.83	%		5.23	%		13.62	%			—
Return After Taxes on Distributions		-11.23	%		2.00	%		10.71	%			—
Return After Taxes on Distributions and Sale of Fund Shares		-3.26	%		3.39	%		10.45	%			—
Class A
Return Before Taxes		-13.36	%		3.68	%		12.62	%			—
Class C
Return Before Taxes		-8.53	%		4.48	%		12.72	%			—
Class R6
Return Before Taxes		-7.58	%			—			—		5.19	%
Russell Midcap ® Value Index (reflects no deduction for fees, expenses or taxes)		-12.29	%		5.44	%		13.03	%		4.42	%

8 Virtus Ceredex Mid-Cap Value Equity Fund

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The Russell Midcap ® Value Index is a market capitalization-weighted index of medium-capitalization, value-oriented stocks. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Ceredex Value Advisors LLC (“Ceredex”).

Portfolio Management

Don Wordell, CFA, Managing Director of Ceredex, has managed the fund since 2001.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

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Virtus Ceredex Small-Cap Value Equity Fund

Investment Objective

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Fees and Expenses

The Virtus Ceredex Small-Cap Value Equity Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Ceredex Small Cap Value Equity Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.84	%		0.84	%		0.84	%		0.84	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses		0.37	%		0.25	%		0.34	%		0.18	% (b)
Total Annual Fund Operating Expenses		1.46	%		2.09	%		1.18	%		1.02	%
Less: Fee Waivers and/or Expense Reimbursements (c)		0.00	%		(0.19)	%		0.00	%		(0.14)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (c)		1.46	%		1.90	%		1.18	%		0.88	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

Estimated for current fiscal year, as annualized.

(c)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.90% for Class C Shares and 0.88% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$715		$1,010		$1,327		$2,221
Class C	Sold		$293		$637		$1,106		$2,406
Class C	Held		$193		$637		$1,106		$2,406
Class I	Sold or Held		$120		$375		$649		$1,432
Class R6	Sold or Held		$90		$311		$550		$1,235

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S.-traded equity securities of small-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). As of the date of this prospectus, the subadviser considers small-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 2000 ® Index. As of December 31, 2018, the market capitalization range of the companies in the Russell 2000 ® Index was $7.9 million to $6.2 billion. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

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Small Market Capitalization Companies Risk. The risk that the fund’s investments in small market capitalization companies may be less liquid and more vulnerable to adverse business or economic developments, which may increase the volatility and risk of loss to the fund, as compared with investments in larger, more established companies.

Value Stocks Risk. The risk that the fund will underperform when value investing is out of favor or that the fund’s investments will not appreciate in value as anticipated.

Performance Information

Performance for Class R6 Shares is not shown here as Class R6 Shares did not begin operations until February 26, 2019 and therefore had no performance for the periods shown.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: ASRD2I3I25LVVTN6MKNGLMHE8RFN.JPG]

Best Quarter:

Q3/2009:

19.65%

Worst Quarter:

Q3/2011:

-19.94%

Year to Date (3/31/19):

11.33%

Average Annual Total Returns (for the periods ended 12/31/18; includes returns of a predecessor fund)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		-12.42	%		3.70	%		12.30	%
Return After Taxes on Distributions		-15.77	%		-0.29	%		9.76	%
Return After Taxes on Distributions and Sale of Fund Shares		-4.96	%		2.65	%		10.11	%
Class A
Return Before Taxes		-17.72	%		2.18	%		11.31	%
Class C
Return Before Taxes		-13.07	%		2.99	%		11.40	%
Russell 2000 ® Value Index (reflects no deduction for fees, expenses or taxes)		-12.86	%		3.61	%		10.40	%

The Russell 2000 ® Value Index is a market capitalization-weighted index of value-oriented stocks of the smallest 2,000 companies in the Russell universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

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After-tax returns are not relevant to investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Ceredex Value Advisors LLC (“Ceredex”).

Portfolio Management

Brett Barner, CFA, Managing Director of Ceredex, has managed the fund since 1995.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

No compensation, administrative payments, sub-transfer agency payments or service payments are paid to brokers or other entities from fund assets or the Distributor’s or an affiliate’s resources on sales of or investments in Class R6 Shares. Class R6 Shares do not carry sales commissions or pay Rule 12b-1 fees, or make payments to brokers or other entities to assist in, or in connection with, the sale of the fund’s shares.

Ask your financial advisor or visit your financial intermediary’s website for more information.

14 Virtus Ceredex Small-Cap Value Equity Fund

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Virtus Seix Core Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Fees and Expenses

The Virtus Seix Core Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Core Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

3.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R			Class R6
Management Fees		0.25	%		0.25	%		0.25	%		0.25	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		0.50	%		Non	e
Other Expenses		0.39	%		0.37	%		0.23	%		0.23	%
Total Annual Fund Operating Expenses		0.89	%		0.62	%		0.98	%		0.48	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.25)	%		(0.12)	%		(0.07)	%		(0.12)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		0.64	%		0.50	%		0.91	%		0.36	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.64% for Class A Shares, 0.50% for Class I Shares, 0.91% for Class R Shares and 0.36% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$438		$624		$826		$1,408
Class I	Sold or Held		$51		$186		$334		$763
Class R	Sold or Held		$93		$305		$535		$1,195
Class R6	Sold or Held		$37		$142		$257		$592

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund invests in various types of income-producing debt instruments including mortgage- and asset-backed securities, government and agency obligations, and corporate obligations. The fund may invest in debt obligations of U.S. and non-U.S. issuers, including investment grade rated emerging market debt. The fund’s investment in non-U.S. issuers may at times be significant.

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in investment grade fixed income securities. These investments will be chosen from the broad universe of available fixed income instruments rated investment grade, or unrated securities that the subadviser believes are of comparable quality.

There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual assets in which the fund may invest. The subadviser may retain invetments if the rating of the instrument falls below investment grade if the subadviser deems retention of the investment to be in the best interest of the fund. Such instruments are sometimes referred to as “junk bonds.” The fund may also invest a portion of its assets in instruments that are restricted as to resale. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more. In selecting investments for purchase and sale, the subadviser generally selects a greater weighting in corporate obligations and mortgage-backed securities relative to the fund’s comparative benchmark, and a lower relative weighting in U.S. Treasury and government agency issues.

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Aggregate Bond Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Aggregate Bond Index is 5 years, the fund’s duration may be 4-6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Aggregate Bond Index was 5.87 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters, and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may also utilize Treasury Inflation Protection Securities (“TIPS”) opportunistically. The fund may count the market value of certain derivatives with investment grade fixed income characteristics and TIPS towards its policy to invest, under normal circumstances, at least 80% of its net assets in fixed income securities.

Principal Risks

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invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The principal risks of investing in the fund are:

Call Risk. The risk that issuers will prepay fixed rate obligations when interest rates fall, forcing the fund to reinvest in obligations with lower interest rates than the original obligations and otherwise not benefit fully from the increase in value that other fixed income investments experience when interest rates decline.

Credit Risk. The risk that the issuer of an instrument will fail to pay interest or principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of the instrument to decline. Debt instruments rated below investment grade are especially susceptible to this risk.

Derivatives Risk. The risk that the fund will incur a loss greater than the fund’s investment in, or will experience greater share price volatility as a result of investing in, a derivative contract. Derivatives may include, among other things, futures, options, forwards and swap agreements and may be used in order to hedge portfolio risks, create leverage, or to attempt to increase yield.

Emerging Market Investing Risk. The risk that prices of emerging markets securities will be more volatile, or will be more greatly affected by negative conditions, than those of their counterparts in more established foreign markets.

Foreign Investing Risk. The risk that the prices of foreign securities in the fund’s portfolio will be more volatile than those of domestic securities, or will be negatively affected by currency fluctuations, less regulated or liquid securities markets, or economic, political or other developments.

High-Yield/High-Risk Fixed Income Securities (Junk Bonds) Risk. The risk that the issuers of high-yield/high-risk securities in the fund’s portfolio will default, that the prices of such securities will be volatile, and that the securities will not be liquid.

Illiquid and Restricted Securities. Certain securities in which a fund invests may be difficult to sell at the time and price beneficial to the fund, for example due to low trading volumes or legal restrictions.

Income Risk. The risk that income received from the fund will vary widely over the short- and/or long-term and/or be less than anticipated if the proceeds from maturing securities in the fund are reinvested in lower-yielding securities.

Inflation Protected Investing Risk. The risk that inflation-protected securities will react differently from other fixed income securities to changes in interest rates. The values of inflation-protected securities are anticipated to change in response to changes in “real” interest rates, which represent nominal (stated) interest rates reduced by the expected impact of inflation. Generally, the value of an inflation-protected security will fall when real interest rates rise and will rise when real interest rates fall.

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Mortgage-Backed and Asset-Backed Securities Risk. The risk that changes in interest rates will cause both extension and prepayment risks for mortgage-backed and asset-backed securities in which the fund invests, or that an impairment of the value of collateral underlying such securities will cause the value of the securities to decrease.

Unrated Fixed Income Securities Risk. The risk that the subadviser will be unable to accurately assess the quality of an unrated fixed income security, so that the fund invests in a security with greater risk than intended, or that the liquidity of unrated fixed income securities in which the fund invests will be hindered, making it difficult for the fund to sell them.

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U.S. Government Securities Risk. The risk that U.S. Government securities in the fund’s portfolio will be subject to price fluctuations, or that an agency or instrumentality will default on an obligation not backed by the full faith and credit of the United States.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A10T5PLM7J9K0PHDA11S3G7QCL16.JPG]

Best Quarter:

Q3/2011:

6.26%

Worst Quarter:

Q4/2016:

-2.81%

Year to Date (3/31/19):

2.58%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R Since Inception (7/31/09)			Class R6 Since Inception (8/3/15)
Class I
Return Before Taxes		-0.14	%		2.47	%		3.44	%			—			—
Return After Taxes on Distributions		-1.08	%		1.39	%		2.05	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		-0.09	%		1.43	%		2.20	%			—			—
Class A
Return Before Taxes		-4.02	%		1.52	%		2.80	%			—			—
Class R
Return Before Taxes		-0.54	%		2.05	%			—		2.64	%			—
Class R6
Return Before Taxes		-0.02	%			—			—			—		1.62	%
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		0.01	%		2.52	%		3.48	%		3.31	%		1.72	%

The Bloomberg Barclays 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 and not available for direct investment.

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classes will vary. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2008.

Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2007.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2004.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

For Class R Shares, there is no minimum initial investment and there is no minimum for additional purchases. Class R Shares are available only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans and other retirement plan platforms, including brokers, dealers, banks, insurance companies, retirement plan record-keepers and others, in each case provided that plan level or omnibus accounts are held on the books of the fund.

In general, you can buy or sell shares of the fund by mail or telephone on any business day. You also may buy and sell shares through a financial advisor, broker-dealer or other financial intermediary.

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Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Seix Corporate Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Fees and Expenses

The Virtus Seix Corporate Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Corporate Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

3.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.40	%		0.40	%		0.40	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e
Other Expenses		0.70	%		0.72	%		0.63	%
Acquired Fund Fees and Expenses		0.01	%		0.01	%		0.01	%
Total Annual Fund Operating Expenses (b)		1.36	%		2.13	%		1.04	%
Less: Fee Waivers and/or Expense Reimbursements (c)		(0.40)	%		(0.47)	%		(0.33)	%
Total Annual Fund Operating Expenses After Expense Reimbursements (b) (c)		0.96	%		1.66	%		0.71	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets appearing in the Financial Highlights tables, which tables reflect only the operating expenses of the fund and do not include acquired fund fees and expenses.

(c)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.95% for Class A Shares, 1.65% for Class C Shares and 0.70% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$469		$752		$1,055		$1,915
Class C	Sold		$269		$622		$1,101		$2,425
Class C	Held		$169		$622		$1,101		$2,425
Class I	Sold or Held		$73		$298		$542		$1,241

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund primarily invests in a diversified portfolio of U.S. dollar denominated corporate obligations and other fixed income s that are rated investment grade (BBB-/Baa3 or better) or unrated instruments that the subadviser believes are of comparable quality. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in corporate bonds. The fund may also invest in U.S. Treasury and agency obligations, floating rate loans, and below investment grade, high yield debt obligations (sometimes referred to as “junk bonds”), including emerging market securities. The fund may invest in U.S. dollar denominated obligations of U.S. and non-U.S. issuers. The fund may invest a portion of its assets in instruments that are restricted as to resale.

Buy and sell decisions are based on a wide number of factors that determine the risk-reward profile of each investment within the context of the broader portfolio. The subadviser attempts to identify investment grade corporate bonds offering above-average total return. In selecting corporate debt investments for purchase and sale, the subadviser seeks out companies with good fundamentals and above-average return prospects that are currently priced at attractive levels. The primary basis for asset selection is the potential income offered by the asset relative to the subadviser’s assessment of the issuer’s ability to generate the cash flow required to meet its obligations. The subadviser employs a “bottom-up” approach, identifying potential investment opportunities based on the underlying financial and economic fundamentals of the specific issuer.

The subadviser anticipates that the fund’s modified-adjusted-duration will mirror that of the Bloomberg Barclays U.S. Corporate Investment Grade Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Corporate Investment Grade Index is 5 years, the fund’s duration may be 4–6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Corporate Investment Grade Index was 7.510 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with corporate bond characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in corporate bonds.

Principal Risks

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Loan Risk. The risks that, in addition to the risks typically associated with high-yield/high-risk fixed income securities, loans (including floating rate loans) in which the fund invests may be unsecured or not fully collateralized, may be subject to restrictions on resale, and/or some loans may trade infrequently on the secondary market. Loans settle on a delayed basis, potentially leading to the sale proceeds of loans not being available to meet redemptions for a substantial period of time after the sale of the loans.

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Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: AE0G6QSHBR28FE3B1TFAKHJFQ0F5.JPG]

Best Quarter:

Q2/2009:

7.54%

Worst Quarter:

Q2/2013:

-4.04%

Year to Date (3/31/19):

4.70%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		-3.81	%		3.38	%		5.01	%
Return After Taxes on Distributions		-5.16	%		1.60	%		3.00	%
Return After Taxes on Distributions and Sale of Fund Shares		-2.25	%		1.87	%		3.27	%
Class A
Return Before Taxes		-7.51	%		2.32	%		4.31	%
Class C
Return Before Taxes		-4.61	%		2.40	%		4.00	%
Bloomberg Barclays U.S. Corporate Investment Grade Index (reflects no deduction for mutual fund fees or expenses)		-2.51	%		3.28	%		5.92	%

The Bloomberg Barclays U.S. Corporate Investment Grade Index measures the U.S. investment grade fixed rate taxable securities sold by industrial, utility and financial issuers. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. After-tax returns are shown only for Class I Shares; after-tax other classes will vary. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

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Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2008.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2004.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Seix Floating Rate High Income Fund

Investment Objective

The fund has an investment objective of attempting to provide a high level of current income.

Fees and Expenses

The Virtus Seix Floating Rate High Income Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Floating Rate High Income Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

2.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.41	%		0.41	%		0.41	%		0.41	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses		0.29	%		0.21	%		0.29	%		0.17	%
Total Annual Fund Operating Expenses		0.95	%		1.62	%		0.70	%		0.58	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.01)	%		(0.10)	%		(0.08)	%		(0.06)	%
Total Annual Fund Operating Expenses After Expense Reimbursements (b)		0.94	%		1.52	%		0.62	%		0.52	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.94% for Class A Shares, 1.52% for Class C Shares, 0.62% for Class I Shares and 0.52% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

26 Virtus Seix Floating Rate High Income Fund

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$368		$568		$785		$1,408
Class C	Sold		$255		$501		$872		$1,914
Class C	Held		$155		$501		$872		$1,914
Class I	Sold or Held		$63		$216		$382		$863
Class R6	Sold or Held		$53		$180		$318		$720

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in a combination of first- and second-lien senior floating rate loans and other floating rate debt instruments. These loans are loans made by banks and other large financial institutions to various companies and are senior in the borrowing companies’ capital structure. Coupon rates are generally floating, not fixed, and are tied to a benchmark lending rate, the most popular of which is the London Interbank Offered Rate (“LIBOR”) or are set at a specified floor, whichever is higher.

The fund invests all or substantially all of its assets in first- and second-lien senior floating rate loans, or debt instruments that are rated below investment grade by Moody’s and Standard & Poor’s (sometimes referred to as “junk bonds”) or in comparable unrated instruments. The fund may also invest up to 20% of its net assets in any combination of junior debt instruments or instruments with a lien on collateral lower than a senior claim on collateral, high yield fixed-rate bonds, investment grade fixed income debt obligations, asset-backed securities (such as special purpose trusts investing in bank loans), and short-term investments, including money market securities and repurchase agreements. The fund may invest a portion of its assets in instruments that are restricted as to resale.

In selecting investments for purchase and sale, the subadviser will emphasize loans and instruments which are within the segment of the high yield market it has targeted, which are loans and instruments rated below investment grade or unrated loans and instruments that the subadviser believes are of comparable quality. The fund may invest up to 20% of its total assets in senior loans made to non-U.S. borrowers provided that no more than 5% of the portfolio’s loans are non-U.S. dollar denominated. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest. The fund may also engage in certain hedging transactions.

In order to meet short-term liquidity needs, the fund employs a variety of techniques, such as investing in highly-liquid fixed income instruments and holding a portion of its assets in cash. Although not a principal investment strategy, the fund may, under certain market conditions, borrow an amount up to 33 1/3% of its total assets (including the amount borrowed) for investment purposes, to meet redemption requests and for temporary, extraordinary or emergency purposes.

Some types of senior loans in which the fund may invest require that an open loan for a specific amount be continually offered to a borrower. These types of senior loans are commonly referred to as revolvers. Because revolvers contractually obligate the lender (and therefore those with an interest in the loan) to fund the revolving portion of the loan at the borrower’s discretion, the fund must have funds sufficient to cover its contractual obligation. Therefore, the fund will maintain, on a daily basis, high-quality, liquid assets in an amount at least equal in value to its contractual obligation to fulfill the revolving senior loan. The fund will not encumber any assets that are otherwise encumbered.

Virtus Seix Floating Rate High Income Fund 27

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such as interest rate or credit risks. The fund may count the value of certain derivatives with floating rate loan or high yield bond characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in a combination of first- and second-lien senior floating rate loans and other floating rate debt instruments.

Principal Risks

Asset-Backed Securities. The risk that changes in interest rates will cause both extension and prepayment risks for asset-backed securities in which the fund invests, or that an impairment of the value of collateral underlying such securities will cause the value of the securities to decrease.

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

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Short-Term Investments Risk. The risk that the fund’s short-term investments will not provide the liquidity or protection intended or will prevent the fund from experiencing positive movements in the fund’s principal investment strategies.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A8N635T14L4AD36U1ELFSSBCUOO2.JPG]

Best Quarter:

Q2/2009:

12.47%

Worst Quarter:

Q3/2011:

-3.66%

Year to Date (3/31/19):

4.01%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R6 Since Inception (1/30/15)
Class I
Return Before Taxes		0.22	%		2.88	%		6.98	%			—
Return After Taxes on Distributions		-1.77	%		0.88	%		4.92	%			—
Return After Taxes on Distributions and Sale of Fund Shares		0.15	%		1.30	%		4.64	%			—
Class A
Return Before Taxes		-2.85	%		2.00	%		6.35	%			—
Class C
Return Before Taxes		-0.68	%		1.97	%		5.99	%			—
Class R6
Return Before Taxes		0.20	%			—			—		3.51	%
Credit Suisse Leveraged Loan Index (reflects no deduction for fees, expenses or taxes)		1.14	%		3.33	%		8.30	%		3.65	%

The Credit Suisse Leveraged Loan Index is a market-weighted index that tracks the investable universe of the U.S. dollar-denominated leveraged loan market. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Vincent Flanagan, Vice President and Portfolio Manager of Seix, has co-managed the fund since 2011.

George Goudelias, Managing Director and Head of Leveraged Finance of Seix, has managed the fund since 2006.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

30 Virtus Seix Floating Rate High Income Fund

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For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

Virtus Seix Floating Rate High Income Fund 31

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Virtus Seix High Grade Municipal Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize total return through (i) current income that is exempt from federal income taxes and (ii) capital appreciation consistent with capital preservation.

Fees and Expenses

The Virtus Seix High Grade Municipal Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix High Grade Municipal Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

2.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I
Management Fees		0.50	%		0.50	%
Distribution and Shareholder Servicing (12b-1) Fees		0.15	%		Non	e
Other Expenses		0.30	%		0.35	%
Acquired Fund Fees and Expenses		0.01	%		0.01	%
Total Annual Fund Operating Expenses (a)		0.96	%		0.86	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.20)	%		(0.25)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a) (b)		0.76	%		0.61	%

(a)

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.75% for Class A Shares and 0.60% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$350		$553		$772		$1,403
Class I	Sold or Held		$62		$249		$452		$1,038

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in investment grade municipal securities, including securities subject to the U.S. federal alternative minimum tax, with income exempt from regular U.S. federal income tax. The fund may invest its remaining assets in cash, cash equivalents and certain taxable debt securities. There are no limits on the fund’s effective maturity or on the remaining maturities of individual securities in which the fund may invest. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

In selecting investments for purchase and sale, the subadviser tries to manage risk as much as possible. Based on the subadviser’s analysis of municipalities, credit risk, market trends and investment cycles, the subadviser attempts to invest more of the fund’s assets in undervalued municipal securities and less in overvalued municipal securities taking into consideration maturity, sector, credit, state and supply and demand levels.

The subadviser also attempts to identify and invest in municipal issuers with improving credit and avoid those with deteriorating credit. The fund invests in securities rated investment grade by at least one nationally recognized statistical rating organization or unrated securities that the subadviser believes are of comparable quality. The subadviser may retain securities if the rating of the security falls below investment grade and the subadviser deems retention of the security to be in the best interests of the fund.

Principal Risks

The fund may not achieve its objective(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or municipalities in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The principal risks of investing in the fund are:

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Municipal Bond Market Risk. The risk that events negatively impacting a particular municipal security, or the municipal bond market in general, will cause the value of the fund’s shares to decrease, perhaps significantly.

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Tax-Exempt Securities The risk that tax-exempt securities may not provide a higher after-tax return than taxable securities, or that the tax-exempt status of such securities may be lost or limited.

Tax Liability Risk. The risk that noncompliant conduct by a municipal bond issuer, or certain adverse interpretations or actions by a government or tax authority, could cause interest from a security to become taxable, possibly retroactively, subjecting shareholders to increased tax liability.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: ANH2USD6QPNTKFM8RH2HFB1B0FHD.JPG]

Best Quarter:

Q3/2009:

7.78%

Worst Quarter:

Q4/2010:

-4.89%

Year to Date (3/31/19):

2.83%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		0.67	%		4.11	%		5.37	%
Return After Taxes on Distributions		0.54	%		3.57	%		4.96	%
Return After Taxes on Distributions and Sale of Fund Shares		1.60	%		3.55	%		4.76	%
Class A
Return Before Taxes		-2.32	%		3.36	%		4.91	%
Bloomberg Barclays U.S. Municipal Bond Index (reflects no deduction for fees, expenses or taxes)		1.28	%		3.82	%		4.85	%

The Bloomberg Barclays U.S. Municipal Bond Index is a market capitalization-weighted index that measures the long-term tax-exempt bond market. The index includes investment grade bonds, general obligations, revenue bonds, insured bonds and pre-funded bonds. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Ronald Schwartz, CFA, Managing Director and Senior Portfolio Manager of Seix, has managed the fund since 1994.

Dusty Self, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since June 2018.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Virtus Seix High Grade Municipal Bond Fund 35

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Virtus Seix High Income Fund

Investment Objective

The fund has an investment objective of seeking high current income and, secondarily, total return (comprised of capital appreciation and income).

Fees and Expenses

The Virtus Seix High Income Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix High Income Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

3.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R			Class R6
Management Fees		0.55	%		0.55	%		0.55	%		0.55	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		0.50	%		Non	e
Other Expenses		0.31	%		0.33	%		0.20	%		0.20	%
Total Annual Fund Operating Expenses		1.11	%		0.88	%		1.25	%		0.75	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.08)	%		(0.08)	%		(0.03)	%		(0.11)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		1.03	%		0.80	%		1.22	%		0.64	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.03% for Class A Shares, 0.80% for Class I Shares, 1.22% for Class R Shares and 0.64% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

Virtus Seix High Income Fund 37

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$476		$707		$956		$1,669
Class I	Sold or Held		$82		$273		$480		$1,077
Class R	Sold or Held		$124		$394		$683		$1,509
Class R6	Sold or Held		$65		$229		$406		$920

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund invests primarily in a diversified portfolio of higher yielding, lower-rated income-producing debt instruments, including corporate obligations, floating rate loans and other debt obligations. The fund may invest in debt obligations of U.S. and non-U.S. issuers, including emerging market corporate debt. The fund’s investment in non-U.S. issuers may at times be significant. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest. The fund will invest at least 65%, and may invest up to 100%, of its assets in securities rated below investment grade by the ICE BofAML US Cash Pay High Yield Index or in unrated securities that the subadviser believes are of comparable quality. Such securities are commonly known as “junk bonds” and present greater risks than investment grade debt securities. The fund may also invest a portion of its assets in instruments that are restricted as to resale. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with below investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 65% of its net assets in non-investment grade fixed income securities.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Virtus Seix High Income Fund 39

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Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: URGL0QHUHGG4V23SL9BO60TQEIEH.JPG]

Best Quarter:

Q2/2009:

18.23%

Worst Quarter:

Q3/2011:

-9.22%

Year to Date (3/31/19):

7.16%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R Since Inception (7/31/09)			Class R6 Since Inception (8/1/14)
Class I
Return Before Taxes		-3.20	%		3.13	%		10.87	%			—			—
Return After Taxes on Distributions		-5.50	%		0.31	%		7.75	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		-1.85	%		1.15	%		7.43	%			—			—
Class A
Return Before Taxes		-7.04	%		2.12	%		10.18	%			—			—
Class R
Return Before Taxes		-3.59	%		2.73	%			—		7.44	%			—
Class R6
Return Before Taxes		-3.05	%			—			—			—		2.75	%
Bloomberg Barclays U.S. Corporate High Yield Bond Index (reflects no deduction for fees, expenses or taxes)		-2.08	%		3.83	%		11.12	%		8.05	%		3.54	%

The Bloomberg Barclays U.S. Corporate High Yield Bond Index measures fixed rate, non-investment grade debt securities of U.S. corporations. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

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Portfolio Management

James FitzPatrick, CFA, Managing Director and Portfolio Manager of Seix, has co-managed the fund since 2013.

Michael Kirkpatrick, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since 2011.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

Virtus Seix High Income Fund 41

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Virtus Seix High Yield Fund

Investment Objective

The fund has an investment objective of seeking high income and, secondarily, capital appreciation.

Fees and Expenses

The Virtus Seix High Yield Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix High Yield Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

3.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R			Class R6
Management Fees		0.45	%		0.45	%		0.45	%		0.45	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		0.50	%		Non	e
Other Expenses		0.32	%		0.31	%		0.21	%		0.19	%
Total Annual Fund Operating Expenses		1.02	%		0.76	%		1.16	%		0.64	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.20)	%		(0.12)	%		(0.12)	%		(0.11)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		0.82	%		0.64	%		1.04	%		0.53	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.82% for Class A Shares, 0.64% for Class I Shares, 1.04% for Class R Shares and 0.53% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$456		$668		$898		$1,559
Class I	Sold or Held		$65		$231		$411		$931
Class R	Sold or Held		$106		$357		$627		$1,398
Class R6	Sold or Held		$54		$194		$346		$788

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests in various types of lower-rated, higher yielding debt instruments, including corporate obligations, floating rate loans and other debt obligations. The fund may invest in debt obligations of U.S. and non-U.S. issuers, including emerging market debt. The fund’s investment in non-U.S. issuers may at times be significant.

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in high yield securities. These securities will be chosen from the broad universe of available U.S. dollar denominated, high yield securities rated below investment grade by the ICE BofAML US Cash Pay High Yield Index or unrated securities that the subadviser believes are of comparable quality. Such securities are commonly known as “junk bonds” and present greater risks than investment grade bonds. Although the fund seeks to achieve its investment objective primarily through investment in high yield securities, the fund may invest up to 20% of its net assets in investment grade instruments.

The fund will be managed with a duration that is close to the fund’s comparative benchmark, the ICE BofAML US High Yield BB-B Constrained Index, which is generally between 3 and 6 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years or days. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. The fund may also invest a portion of its assets in instruments that are restricted as to resale.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as swaps, including credit default swaps, futures and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with below investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in high yield securities.

Principal Risks

Virtus Seix High Yield Fund 43

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

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Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: AKJ7A1NILK4V5VEFPVLBRSPUULQT.JPG]

Best Quarter:

Q2/2009:

11.39%

Worst Quarter:

Q3/2011:

-6.75%

Year to Date (3/31/19):

6.61%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R Since Inception (7/31/09)			Class R6 Since Inception (8/1/16)
Class I
Return Before Taxes		-1.70	%		3.02	%		8.57	%			—			—
Return After Taxes on Distributions		-3.90	%		0.05	%		5.48	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		-0.98	%		1.06	%		5.55	%			—			—
Class A
Return Before Taxes		-5.74	%		2.01	%		7.94	%			—			—
Class R
Return Before Taxes		-2.10	%		2.61	%			—		6.11	%			—
Class R6
Return Before Taxes		-1.74	%			—			—			—		3.85	%
ICE BofAML US High Yield BB-B Constrained Index (reflects no deduction for fees, expenses or taxes)		-2.04	%		3.88	%		9.99	%		7.48	%		3.57	%

The ICE BofAML US High Yield BB-B Constrained Index measures performance of BB/B U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market, and is restricted to a maximum of 2% per issuer. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

James FitzPatrick, CFA, Managing Director and Portfolio Manager of Seix, has co-managed the fund since 2013.

Virtus Seix High Yield Fund 45

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Michael Kirkpatrick, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since 2007.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

46 Virtus Seix High Yield Fund

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Virtus Seix Investment Grade Tax-Exempt Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize high total return through (i) current income that is exempt from federal income taxes and (ii) capital appreciation consistent with capital preservation.

Fees and Expenses

The Virtus Seix Investment Grade Tax-Exempt Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Investment Grade Tax-Exempt Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

2.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I
Management Fees		0.50	%		0.50	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e
Other Expenses		0.25	%		0.30	%
Acquired Fund Fees and Expenses		0.01	%		0.01	%
Total Annual Fund Operating Expenses (a)		1.01	%		0.81	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.25)	%		(0.20)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a) (b)		0.76	%		0.61	%

(a)

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.75% for Class A Shares and 0.60% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$350		$564		$794		$1,455
Class I	Sold or Held		$62		$239		$430		$983

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in investment grade tax-exempt obligations, such as municipal securities, including securities subject to the U.S. federal alternative minimum tax. The issuers of these securities may be located in any U.S. state, territory or possession. The fund may invest up to 20% of its assets in securities subject to the U.S. federal income tax. The fund may also invest a portion of its net assets in certain taxable debt securities. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

The subadviser also attempts to identify and invest in municipal issuers with improving credit and avoid those with deteriorating credit. The subadviser anticipates that the fund’s effective maturity will range from 4 to 10 years but there is no limit on the maturities of individual securities in which the fund may invest. The fund invests in securities rated investment grade by at least one nationally recognized statistical rating organization or unrated securities that the subadviser believes are of comparable quality. The subadviser may retain securities if the rating of the security falls below investment grade and the subadviser deems retention of the security to be in the best interests of the fund.

Principal Risks

The fund may not achieve its objective(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or municipalities in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The principal risks of investing in the fund are:

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

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Tax-Exempt Securities The risk that tax-exempt securities may not provide a higher after-tax return than taxable securities, or that the tax-exempt status of such securities may be lost or limited.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: NAOUS47P3N42O01TG9SAEE65V2FB.JPG]

Best Quarter:

Q3/2009:

6.32%

Worst Quarter:

Q4/2010:

-3.51%

Year to Date (3/31/19):

2.58%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		0.60	%		2.75	%		4.02	%
Return After Taxes on Distributions		0.46	%		2.36	%		3.55	%
Return After Taxes on Distributions and Sale of Fund Shares		1.50	%		2.57	%		3.58	%
Class A
Return Before Taxes		-2.31	%		2.04	%		3.54	%
Bloomberg Barclays U.S. Municipal Bond 1-15 Year Blend (1-17) Index (reflects no deduction for fees, expenses or taxes)		1.58	%		3.00	%		3.90	%

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The Bloomberg Barclays U.S. Municipal Bond 1-15 Year Blend (1-17) Index is a market capitalization-weighted index of investment grade tax-exempt bonds with maturities of 1-17 years. The index includes investment grade bonds, general obligations, revenue bonds, insured bonds and pre-funded bonds. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Ronald Schwartz, CFA, Managing Director and Senior Portfolio Manager of Seix, has managed the fund since 1992.

Dusty Self, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since June 2018.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Distributions of net investment income attributed to the tax-exempt interest earned by the fund and designated as “exempt-interest dividends” will be exempt from the federal income tax. Such net investment income attributable to “private activity” bonds (other than private activity bonds issued in 2009 or 2010) may be a preference item for purposes of the federal alternative minimum tax. Income exempt from federal tax may be subject to state and local income tax. The fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income tax.

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

50 Virtus Seix Investment Grade Tax-Exempt Bond Fund

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Virtus Seix Short-Term Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Fees and Expenses

The Virtus Seix Short-Term Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Short-Term Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

2.25

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.40	%		0.40	%		0.40	%
Distribution and Shareholder Servicing (12b-1) Fees		0.20	%		1.00	%		Non	e
Other Expenses		1.08	%		1.08	%		1.03	%
Total Annual Fund Operating Expenses		1.68	%		2.48	%		1.43	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.88)	%		(0.91)	%		(0.83)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)		0.80	%		1.57	%		0.60	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.80% for Class A Shares, 1.57% for Class C Shares and 0.60% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

Virtus Seix Short-Term Bond Fund 51

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$305		$659		$1,036		$2,095
Class C	Sold		$260		$686		$1,239		$2,747
	Held		$160		$686		$1,239		$2,747
Class I	Sold or Held		$61		$371		$702		$1,641

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of short- to medium-term investment grade U.S. Treasury, corporate debt, mortgage-backed and asset-backed securities. These securities may be rated investment grade by at least one nationally recognized statistical rating organization or may be unrated securities that the subadviser believes are of comparable quality. The fund’s investment in non-U.S. issuers may at times be significant.

There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual securities in which the fund may invest. The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays 1-3 Year Government/Credit Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays 1-3 Year Government/Credit Index is 1.5 years, the fund’s duration may be 1.2 to 1.8 years. As of December 31, 2018, the duration of the Bloomberg Barclays 1-3 Year Government/Credit Index was 1.90 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

The subadviser may retain securities if the rating of the security falls below investment grade and the subadviser deems retention of the security to be in the best interests of the fund. The fund may invest a portion of its assets in securities that are restricted as to resale. As a result of its investment strategies, the fund’s portfolio turnover rate may be 100% or more.

In selecting securities for purchase and sale, the subadviser attempts to identify securities that are expected to offer a comparably better investment return for a given level of risk. For example, short-term bonds generally have better returns than money market instruments with a fairly modest increase in risk and/or volatility. The subadviser manages the fund from a total return perspective. That is, the subadviser makes day-to-day investment decisions for the fund with a view towards maximizing returns. The subadviser analyzes, among other things, yields, market sectors and credit risk in an effort to identify attractive investments with attractive risk/reward trade-offs.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as swaps, including credit default swaps, futures and options) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk.

Principal Risks

52 Virtus Seix Short-Term Bond Fund

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Virtus Seix Short-Term Bond Fund 53

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Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: AHF0M0FIEQ8PLMAJDNCT2N6SR8FC.JPG]

Best Quarter:

Q2/2009:

3.85%

Worst Quarter:

Q4/2016:

-0.52%

Year to Date (3/31/19):

1.11%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		1.11	%		0.69	%		2.03	%
Return After Taxes on Distributions		0.44	%		0.27	%		1.43	%
Return After Taxes on Distributions and Sale of Fund Shares		0.65	%		0.34	%		1.33	%
Class A
Return Before Taxes		-1.46	%		0.05	%		1.58	%
Class C
Return Before Taxes		0.14	%		-0.09	%		1.12	%
Bloomberg Barclays 1-3 Year Government/Credit Index (reflects no deduction for fees, expenses or taxes)		1.60	%		1.03	%		1.52	%

The Bloomberg Barclays 1-3 Year Government/Credit Index measures U.S. investment grade and corporate debt securities with an average maturity of 1 to 3 years. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

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Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

Virtus Seix Short-Term Bond Fund 55

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Virtus Seix Short-Term Municipal Bond Fund

Investment Objective

Fees and Expenses

The Virtus Seix Short-Term Municipal Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Short-Term Municipal Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

2.25

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I
Management Fees		0.35	%		0.35	%
Distribution and Shareholder Servicing (12b-1) Fees		0.15	%		Non	e
Other Expenses		0.55	%		0.54	%
Acquired Fund Fees and Expenses		0.02	%		0.02	%
Total Annual Fund Operating Expenses (a)		1.07	%		0.91	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.40)	%		(0.41)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a) (b)		0.67	%		0.50	%

(a)

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.65% for Class A Shares and 0.48% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$292		$519		$764		$1,466
Class I	Sold or Held		$51		$249		$464		$1,082

56 Virtus Seix Short-Term Municipal Bond Fund

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in municipal securities, including securities subject to the U.S. federal alternative minimum tax, with the income exempt from regular U.S. federal income tax. The fund will invest primarily in investment grade short-term municipal securities. The issuers of these securities may be located in any U.S. state, territory or possession. The fund may also invest a portion of its net assets in certain taxable debt securities. The fund expects that it will normally maintain an effective maturity of 3 years or less.

Principal Risks

The fund may not achieve its objective(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or municipalities in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The principal risks of investing in the fund are:

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

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Tax-Exempt Securities The risk that tax-exempt securities may not provide a higher after-tax return than taxable securities, or that the tax-exempt status of such securities may be lost or limited.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: ANM93VA3O9CT7P9LL1UT9VLTF3GM.JPG]

Best Quarter:

Q3/2009:

6.09%

Worst Quarter:

Q4/2010:

-4.71%

Year to Date (3/31/19):

1.26%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		1.37	%		0.83	%		3.01	%
Return After Taxes on Distributions		1.36	%		0.74	%		2.76	%
Return After Taxes on Distributions and Sale of Fund Shares		1.28	%		0.76	%		2.73	%
Class A
Return Before Taxes		-1.18	%		0.21	%		2.62	%
Bloomberg Barclays Year Municipal Bond 1-5 Index (reflects no deduction for fees, expenses or taxes)		1.77	%		1.19	%		1.96	%

The Bloomberg Barclays Year Municipal Bond 1-5 Index is a market capitalization-weighted index of investment grade tax-exempt bonds with maturities ranging of 1-5 years. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

58 Virtus Seix Short-Term Municipal Bond Fund

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Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Ronald Schwartz, CFA, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since 2011.

Dusty Self, Managing Director and Senior Portfolio Manager of Seix, has co-managed the fund since 2011.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Seix Total Return Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Fees and Expenses

The Virtus Seix Total Return Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Total Return Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

3.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R			Class R6
Management Fees		0.25	%		0.25	%		0.25	%		0.25	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		0.50	%		Non	e
Other Expenses		0.35	%		0.30	%		0.18	%		0.19	%
Total Annual Fund Operating Expenses		0.85	%		0.55	%		0.93	%		0.44	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.15)	%		(0.09)	%		0.00	%		(0.13)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		0.70	%		0.46	%		0.93	%		0.31	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.70% for Class A Shares, 0.46% for Class I Shares and 0.31% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

60 Virtus Seix Total Return Bond Fund

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$444		$622		$815		$1,371
Class I	Sold or Held		$47		$167		$298		$681
Class R	Sold or Held		$95		$296		$515		$1,143
Class R6	Sold or Held		$32		$128		$233		$542

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund invests in various types of income-producing debt instruments including mortgage- and asset-backed securities, government and agency obligations, corporate obligations and floating rate loans. The fund may invest in debt obligations of U.S. and non-U.S. issuers, including emerging market debt. The fund’s investment in non-U.S. issuers may at times be significant.

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income securities. These securities will be chosen from the broad universe of available fixed income obligations rated investment grade, or unrated instruments that the subadviser believes are of comparable quality.

There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest. The fund may invest up to 20% of its net assets in below investment grade, high yield debt obligations (sometimes referred to as “junk bonds”). The fund may also invest a portion of its assets in instruments that are restricted as to resale. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Aggregate Bond Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Aggregate Bond Index is 5 years, the fund’s duration may be 4 to 6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Aggregate Bond Index was 5.87 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

In selecting investments for purchase and sale, the subadviser generally selects a greater weighting in corporate obligations and mortgage-backed securities relative to the fund’s comparative benchmark, and a lower relative weighting in U.S. Treasury and government agency issues.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in fixed income securities.

Principal Risks

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

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Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A3KAP4CU8G4VAKS9OH9Q6I57P51T.JPG]

Best Quarter:

Q3/2011:

5.09%

Worst Quarter:

Q4/2016:

-2.66%

Year to Date (3/31/19):

2.47%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R Since Inception (2/13/09)			Class R6 Since Inception (8/1/14)
Class I
Return Before Taxes		-0.32	%		2.37	%		3.67	%			—			—
Return After Taxes on Distributions		-1.18	%		1.35	%		2.34	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		-0.20	%		1.37	%		2.36	%			—			—
Class A
Return Before Taxes		-4.21	%		1.35	%		3.00	%			—			—
Class R
Return Before Taxes		-0.79	%		1.80	%			—		3.08	%			—
Class R6
Return Before Taxes		-0.17	%			—			—			—		1.75	%
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		0.01	%		2.52	%		3.48	%		3.58	%		1.97	%

Virtus Seix Total Return Bond Fund 63

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be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Seth Antiles, Ph.D., Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2007.

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2008.

Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2007.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2002.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

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Virtus Seix U.S. Government Securities Ultra-Short Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

Fees and Expenses

The Virtus Seix U.S. Government Securities Ultra-Short Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix U.S. Government Securities Ultra-Short Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R6
Management Fees		0.19	%		0.19	%		0.19	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		Non	e
Other Expenses		0.19	%		0.31	%		0.18	%
Total Annual Fund Operating Expenses		0.63	%		0.50	%		0.37	%
Less: Fee Waivers and/or Expense Reimbursements (a)		0.00	%		(0.09)	%		(0.11)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		0.63	%		0.41	%		0.26	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.41% for Class I Shares and 0.26% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$64		$202		$351		$786
Class I	Sold or Held		$42		$151		$271		$620
Class R6	Sold or Held		$27		$108		$197		$457

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in short duration U.S. government securities of any credit quality. These securities may include, but are not limited to, U.S. Treasury securities, U.S. agency securities, U.S. agency mortgage-backed securities, repurchase agreements and other U.S. government securities.

The fund expects to maintain an average effective duration between 3 months and 1 year. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years or days. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. Individual purchases will generally be limited to securities with an effective duration of less than 5 years.

In selecting securities for purchase and sale, the subadviser attempts to maximize income by identifying securities that offer an acceptable yield for a given maturity. The fund may use U.S. Treasury securities futures as a vehicle to adjust duration and manage its interest rate exposure.

Principal Risks

Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

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Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: ARC6ENBDPIUQRN0KKIUEMLMM44TR.JPG]

Best Quarter:

Q1/2009:

2.14%

Worst Quarter:

Q2/2013:

-0.23%

Year to Date (3/31/19):

0.60%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class A Since Inception (7/24/18)			Class R6 Since Inception (8/1/16)
Class I
Return Before Taxes		1.73	%		0.91	%		1.46	%			—			—
Return After Taxes on Distributions		0.95	%		0.44	%		0.94	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		1.02	%		0.49	%		0.92	%			—			—
Class A
Return Before Taxes			—			—			—		0.79	%			—
Class R6
Return Before Taxes		1.88	%			—			—					1.53	%
Bloomberg Barclays 3-6 Month U.S. Treasury Bill Index (reflects no deduction for fees, expenses or taxes)		1.92	%		0.69	%		0.45	%		0.97	%		1.22	%

The Bloomberg Barclays 3-6 Month U.S. Treasury Bill Index measures the performance of U.S. Treasury bills with a remaining maturity from 1 up to (but not including) 12 months. It excludes zero coupon strips. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

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•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Seix U.S. Mortgage Fund

Investment Objective

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Fees and Expenses

The Virtus Seix U.S. Mortgage Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix U.S. Mortgage Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

2.25

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.40	%		0.40	%		0.40	%
Distribution and Shareholder Servicing (12b-1) Fees		0.20	%		1.00	%		Non	e
Other Expenses		1.41	%		0.60	%		0.68	%
Total Annual Fund Operating Expenses		2.01	%		2.00	%		1.08	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(1.11)	%		(0.35)	%		(0.38)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)		0.90	%		1.65	%		0.70	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.90% for Class A Shares, 1.65% for Class C Shares and 0.70% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$315		$736		$1,183		$2,423
Class C	Sold		$268		$594		$1,045		$2,299
Class C	Held		$168		$594		$1,045		$2,299
Class I	Sold or Held		$72		$306		$559		$1,283

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S. government agency mortgage-backed securities, such as the Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”) and collateralized mortgage obligations. The fund may invest a portion of its assets in securities that are restricted as to resale. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual securities in which the fund may invest. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

Buy and sell decisions are based on a wide number of factors that determine the risk-reward profile of each security within the context of the broader portfolio. In selecting investments for purchase and sale the subadviser attempts to identify mortgage securities that it expects to perform well in rising and falling markets, such as those which have stable prepayments, call protection, below par prices, and refinancing barriers. The subadviser also attempts to reduce the risk that the underlying mortgages are prepaid by focusing on securities that it believes are less prone to this risk. For example, FNMA or GNMA securities that were issued years ago may be less prone to prepayment risk because there have been many opportunities for refinancing.

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index is 5 years, the fund’s duration may be 4 to 6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index was 4.73 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes to a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

In addition, to implement its investment strategy, the fund may buy or sell, to a limited extent, derivative instruments (such as credit linked notes, futures, options, inverse floaters, swaps and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk and credit risk. Further, the fund may utilize exchange traded futures to manage interest rate exposure.

Principal Risks

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

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Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A035U8ISND6SGEIU0GUR2KB46JNE.JPG]

Best Quarter:

Q3/2011:

3.44%

Worst Quarter:

Q2/2013:

-2.46%

Year to Date (3/31/19):

2.14%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		0.52	%		2.44	%		3.12	%
Return After Taxes on Distributions		-0.31	%		1.60	%		2.24	%
Return After Taxes on Distributions and Sale of Fund Shares		0.30	%		1.50	%		2.06	%
Class A
Return Before Taxes		-1.94	%		1.77	%		2.68	%
Class C
Return Before Taxes		-0.43	%		1.47	%		2.12	%
Bloomberg Barclays U.S. Mortgage Backed Securities Index (reflects no deduction for fees, expenses or taxes)		0.99	%		2.53	%		3.11	%

The Bloomberg Barclays U.S. Mortgage Backed Securities Index measures the agency mortgage-backed pass-through securities (fixed-rate and hybrid ARM) issued by GNMA, FNMA, and FHLMC. The index is calculated on a total return basis. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Seth Antiles, Ph.D., Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2009.

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2008.

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Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2007.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2007.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Seix Ultra-Short Bond Fund

Investment Objective

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

Fees and Expenses

The Virtus Seix Ultra-Short Bond Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Seix Ultra-Short Bond Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I
Management Fees		0.22	%		0.22	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e
Other Expenses		0.37	%		0.40	%
Total Annual Fund Operating Expenses		0.84	%		0.62	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.19)	%		(0.22)	%
Total Annual Fund Operating Expenses After Expense Reimbursements (a)		0.65	%		0.40	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 0.65% for Class A Shares and 0.40% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$66		$249		$447		$1,020
Class I	Sold or Held		$41		$176		$324		$753

Portfolio Turnover

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example, affect the fund’s performance. During the most recent fiscal period, the fund’s portfolio turnover rate was 112% of the average value of its portfolio.

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in short duration fixed income securities. These securities may include, but are not limited to, U.S. Treasury and agency securities, obligations of supranational entities and foreign governments, domestic and foreign-corporate debt obligations, taxable municipal debt securities and mortgage-backed and asset-backed securities. The fund’s investment in foreign issuers may at times be significant.

The fund normally expects to maintain an average effective duration between 3 months and 1 year. Individual purchases will generally be limited to investment-grade securities with an effective duration of less than 5 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of five years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. The fund may invest a portion of its assets in securities that are restricted as to resale.

In selecting investments for purchase and sale, the subadviser attempts to maximize income by identifying securities that offer an acceptable yield for a given level of credit risk and maturity. The subadviser attempts to identify short duration securities that offer a comparably better return potential and yield than money market funds. The subadviser may retain securities if the rating of the security falls below investment grade and the subadviser deems retention of the security to be in the best interests of the fund. Such securities are sometimes referred to as “junk bonds.”

In addition, to implement its investment strategy, the fund may buy or sell, derivative instruments (such as swaps, including credit default swaps, futures and options) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as credit and interest rate risk.

Principal Risks

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Interest Rate Risk. The risk that when interest rates rise, the values of the fund’s debt instruments, especially those with longer maturities, will fall.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. The table shows how the fund’s average annual returns compare to those of a broad-based securities market index that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: M18F67GCD54C1CNNL62TNCS828IF.JPG]

Best Quarter:

Q2/2009:

3.10%

Worst Quarter:

Q3/2011:

-0.43%

Year to Date (3/31/19):

0.94%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Since Inception (7/24/18)
Class I
Return Before Taxes		1.61	%		1.10	%		1.92	%			—
Return After Taxes on Distributions		0.70	%		0.58	%		1.37	%			—
Return After Taxes on Distributions and Sale of Fund Shares		0.95	%		0.61	%		1.26	%			—
Class A
Return Before Taxes			—			—			—		0.48	%
Bloomberg Barclays 3-6 Month U.S. Treasury Bill Index (reflects no deduction for fees, expenses or taxes)		1.92	%		0.69	%		0.45	%		0.97	%

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Seix Investment Advisors LLC (“Seix”).

Portfolio Management

Carlos Catoya, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

James F. Keegan, Chairman, Chief Investment Officer and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Michael Rieger, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Perry Troisi, Managing Director and Senior Portfolio Manager of Seix, has been a member of the fund’s management team since 2014.

Jonathan Yozzo, Managing Director and Portfolio Manager of Seix, has been a member of the fund’s management team since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

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For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Silvant Large-Cap Growth Stock Fund

Investment Objective

The fund has an investment objective of seeking to provide capital appreciation.

Fees and Expenses

The Virtus Silvant Large-Cap Growth Stock Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Silvant Large Cap Growth Stock Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.70	%		0.70	%		0.70	%		0.70	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses		0.65	%		0.35	%		0.40	%		0.25	%
Total Annual Fund Operating Expenses		1.60	%		2.05	%		1.10	%		0.95	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.37)	%		(0.15)	%		(0.13)	%		(0.05)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)		1.23	%		1.90	%		0.97	%		0.90	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.23% for Class A Shares, 1.90% for Class C Shares, 0.97% for Class I Shares and 0.90% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$693		$1,017		$1,363		$2,336
Class C	Sold		$293		$628		$1,090		$2,367
Class C	Held		$193		$628		$1,090		$2,367
Class I	Sold or Held		$99		$337		$594		$1,329
Class R6	Sold or Held		$92		$298		$521		$1,162

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other U.S.-traded equity securities of large-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). The subadviser considers large-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 1000 ® Growth Index. As of December 31, 2018 the market capitalization range of the companies in the Russell 1000 ® Growth Index was $365 million to $780 billion. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

The subadviser will seek out securities it believes have strong business fundamentals, such as revenue growth, improving cash flows, increasing margins and positive earning trends.

In selecting investments for purchase and sale, the subadviser chooses companies that it believes have above-average growth potential to beat expectations. The subadviser uses a “bottom-up” process based on company fundamentals. Risk controls are in place to assist in maintaining a portfolio that is diversified by sector and minimizes unintended risks relative to the primary benchmark. The subadviser then performs in-depth fundamental analysis to determine the quality and sustainability of expectations to determine whether or not the company is poised to beat expectations. The subadviser also applies proprietary quantitative models to rank stocks based on improving fundamentals, valuation, capital deployment and efficiency and sentiment or behavior factors.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

Growth Stocks Risk. The risk that the fund’s investments in growth stocks will be more volatile than investments in other types of stocks, or will perform differently from the market as a whole and from other types of stocks.

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Performance Information

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: RSPDH53JC2UULM4S4KUS3DIT0NTO.JPG]

Best Quarter:

Q1/2012:

18.70%

Worst Quarter:

Q4/2018:

-16.94%

Year to Date (3/31/19):

16.74%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R6 Since Inception (8/1/14)
Class I
Return Before Taxes		-0.75	%		7.61	%		13.70	%			—
Return After Taxes on Distributions		-3.48	%		4.06	%		10.67	%			—
Return After Taxes on Distributions and Sale of Fund Shares		1.73	%		5.79	%		11.16	%			—
Class A
Return Before Taxes		-6.53	%		6.10	%		12.74	%			—
Class C
Return Before Taxes		-1.44	%		6.69	%		12.68	%			—
Class R6
Return Before Taxes		-0.73	%			—			—		8.00	%
Russell 1000 ® Growth Index (reflects no deduction for fees, expenses or taxes)		-1.51	%		10.40	%		15.29	%		10.76	%

The Russell 1000 ® Growth Index is a market capitalization-weighted index of growth-oriented stocks of the 1,000 largest companies in the Russell universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Silvant Capital Management LLC (“Silvant”).

Portfolio Management

Sandeep Bhatia, PhD, CFA, Managing Director of Silvant, has co-managed the fund since 2011.

Michael A. Sansoterra, Chief Investment Officer of Silvant, has co-managed the fund since 2007.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

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For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Silvant Small-Cap Growth Stock Fund

Investment Objective

The fund has an investment objective of seeking to provide long-term capital appreciation.

Fees and Expenses

The Virtus Silvant Small-Cap Growth Stock Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Silvant Small Cap Growth Stock Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.85	%		0.85	%		0.85	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		1.00	%		Non	e
Other Expenses		0.58	%		0.60	%		0.68	%
Acquired Fund Fees and Expenses		0.01	%		0.01	%		0.01	%
Total Annual Fund Operating Expenses (b)		1.69	%		2.46	%		1.54	%
Less: Fee Waivers and/or Expense Reimbursements (c)		(0.41)	%		(0.52)	%		(0.38)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (b)(c)		1.28	%		1.94	%		1.16	%

(a)

The deferred sales charge is imposed on Class C Shares redeemed during the first year only.

(b)

(c)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.27% for Class A Shares, 1.93% for Class C Shares and 1.15% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

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	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$698		$1,039		$1,404		$2,426
Class C	Sold		$297		$717		$1,264		$2,757
Class C	Held		$197		$717		$1,264		$2,757
Class I	Sold or Held		$118		$449		$804		$1,802

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The subadviser considers small-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 2000 ® Growth Index. As of December 31, 2018, the market capitalization range of the companies in the Russell 2000 ® Growth Index was $7.9 million to $6.2 billion. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

In selecting investments for purchase and sale, the subadviser chooses companies that it believes have above-average growth potential to beat expectations as a result of strong business fundamentals, such as revenue growth, improving cash flows, increasing margins and positive earning trends. The subadviser uses a “bottom-up” process based on company fundamentals. Risk controls are in place to assist in maintaining a portfolio that is diversified by sector and minimizes unintended risks relative to the primary benchmark. It then performs in-depth fundamental analysis to determine the quality and sustainability of expectations to determine whether or not the company is poised to beat expectations. The subadviser also applies proprietary quantitative models to rank stocks based on improving fundamentals, valuation, capital deployment and efficiency, and sentiment or behavior factors.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

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Performance Information

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A68J4UDKGB59KVL6PMGRT88M608K.JPG]

Best Quarter:

Q2/2009:

18.78%

Worst Quarter:

Q3/2011:

-22.30%

Year to Date (3/31/19):

22.78%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		-6.64	%		1.60	%		11.42	%
Return After Taxes on Distributions		-8.88	%		-2.50	%		8.27	%
Return After Taxes on Distributions and Sale of Fund Shares		-2.36	%		0.94	%		9.22	%
Class A
Return Before Taxes		-12.05	%		0.32	%		10.59	%
Class C
Return Before Taxes		-7.57	%		0.83	%		10.50	%
Russell 2000 ® Growth Index (reflects no deduction for fees, expenses or taxes)		-9.31	%		5.13	%		13.52	%

The Russell 2000 ® Growth Index is a market capitalization-weighted index of growth-oriented stocks of the smallest 2,000 companies in the Russell universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

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Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Silvant Capital Management LLC (“Silvant”).

Portfolio Management

Sandeep Bhatia, PhD, CFA, Managing Director of Silvant, has co-managed the fund since 2011.

Michael A. Sansoterra, Chief Investment Officer of Silvant, has co-managed the fund since 2007.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A and Class C Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus WCM International Equity Fund

Investment Objective

The fund has an investment objective of seeking to provide long-term capital appreciation.

Fees and Expenses

The Virtus WCM International Equity Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth International Equity Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Class R6

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price
or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I			Class R6
Management Fees		0.85	%		0.85	%		0.85	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e		Non	e
Other Expenses		0.34	%		0.34	%		0.26	%
Total Annual Fund Operating Expenses		1.44	%		1.19	%		1.11	%
Recoupment of expenses previously reimbursed and/or waived		0.00	%		0.01	%		0.00	%
Less: Fee Waivers and/or Expense Reimbursements (a)		(0.02)	%		0.00	%		(0.01)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a)		1.42	%		1.20	%		1.10	%

(a)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.42% for Class A Shares and 1.10% for Class R6 Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$711		$1,002		$1,315		$2,198
Class I	Sold or Held		$122		$379		$655		$1,444
Class R6	Sold or Held		$112		$352		$611		$1,351

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities of foreign companies. These foreign companies may be located in emerging markets. For purposes of the 80% investment policy, the fund’s investment in equity securities may include common stocks, preferred stocks and depositary receipts, as well as other equity securities that may be received as a result of a conversion or spinoff, such as convertible securities or warrants. The fund’s investment in depositary receipts may include American, European, Canadian and Global Depositary Receipts (“ADRs”, “EDRs”, “CDRs”, and “GDRs”, respectively). ADRs are receipts that represent interests in foreign securities held on deposit by U.S. banks. EDRs and GDRs have the same qualities as ADRs, except that they may be traded in various non-U.S. trading markets.

In selecting investments for purchase and sale, the subadviser uses a bottom-up approach that seeks to identify companies with attractive fundamentals, such as long-term growth in revenue and earnings, and that show a strong probability for superior future growth. The subadviser’s investment process focuses on seeking companies that are industry leaders with sustainable competitive advantages; corporate cultures emphasizing strong, quality and experienced management; low or no debt; and attractive relative valuations. The subadviser also considers other factors including political risk, monetary policy risk, and regulatory risk in selecting securities.

Although the fund may invest in any size companies, it will generally invest in large-capitalization established multinational companies. The subadviser considers large-capitalization companies to be those with market capitalization of $3.5 billion or greater at the time of investment. The fund generally considers a company to be a foreign company if it has been organized under the laws of, has its principal offices in, or has its securities principally traded in, a non-U.S country or market, or if the company derives at least 50% of its revenues, net profits or incremental revenue growth (typically over the past five years) from, or has at least 50% of assets or production capacities in, one or more non-U.S. countries or markets. The fund generally will invest in securities of companies located in different regions and, under normal market conditions, will invest a significant portion of its assets in at least three different countries outside of the U.S. However, when market conditions warrant, the fund may have a significant portion of its assets invested in the securities of companies in fewer than three countries. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more and the fund may focus its investments in one or more sectors.

Principal Risks

Convertible Securities Risk. The risk that the value of a convertible security held by the fund will decline as interest rates rise and/or vary with fluctuations in the market value of the underlying securities, or that the security will be called for redemption at a time and/or price unfavorable to the fund.

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

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Geographic Concentration Risk. The risk that events negatively affecting the geographic location where the fund focuses its investments will cause the value of the fund’s shares to decrease, perhaps significantly.

Preferred Stock Risk. The risk that a preferred stock will decline in price, fail to pay dividends when expected, or be illiquid.

Performance Information

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: CACN7SLOO9248E4DJ4HTQ5JVVKG0.JPG]

Best Quarter:

Q2/2009:

30.56%

Worst Quarter:

Q3/2011:

-22.84%

Year to Date (3/31/19):

12.94%

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Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years			Class R6 Since Inception (9/1/15)
Class I
Return Before Taxes		-7.69	%		2.92	%		8.81	%			—
Return After Taxes on Distributions		-7.62	%		2.38	%		7.97	%			—
Return After Taxes on Distributions and Sale of Fund Shares		-4.37	%		2.66	%		7.26	%			—
Class A
Return Before Taxes		-13.19	%		1.51	%		7.93	%			—
Class R6
Return Before Taxes		-7.63	%			—			—		8.17	%
MSCI AC World ex USA Index (net) (reflects no deduction for fees, expenses or taxes)		-14.20	%		0.68	%		6.57	%		4.27	%

The MSCI AC World ex USA Index (net) is a free float-adjusted market capitalization-weighted index that measures equity performance of developed and emerging markets, excluding the United States. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is WCM Investment Management (“WCM”).

Portfolio Management

Paul R. Black, President and co-CEO of WCM, has co-managed the fund since 2015.

Peter J. Hunkel, Portfolio Manager and Business Analyst of WCM, has co-managed the fund since 2015.

Michael B. Trigg, Portfolio Manager and Business Analyst of WCM, has co-managed the fund since 2015.

Kurt R. Winrich, Chairman and co-CEO of WCM, has co-managed the fund since 2015.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

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Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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Virtus Zevenbergen Innovative Growth Stock Fund

Investment Objective

The fund has an investment objective of seeking to provide long-term capital appreciation.

Fees and Expenses

The Virtus Zevenbergen Innovative Growth Stock Fund, a series of Virtus Asset Trust, is the successor of the RidgeWorth Innovative Growth Stock Fund, a series of RidgeWorth Funds (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the fund.

Shareholder Fees (fees paid directly from your investment)

Class A

Class I

Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)

5.75

Non

Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class I
Management Fees		0.80	%		0.80	%
Distribution and Shareholder Servicing (12b-1) Fees		0.25	%		Non	e
Other Expenses		0.37	%		0.38	%
Acquired Fund Fees and Expenses		0.01	%		0.01	%
Total Annual Fund Operating Expenses (a)		1.43	%		1.19	%
Less: Fee Waivers and/or Expense Reimbursements (b)		(0.17)	%		(0.18)	%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (a) (b)		1.26	%		1.01	%

(a)

(b)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) so that such expenses do not exceed 1.25% for Class A Shares and 1.00% for Class I Shares through April 30, 2020. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed and/or fees waived under these arrangements for a period of three years following the date such waiver or reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture.

Example

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$696		$986		$1,296		$2,189
Class I	Sold or Held		$103		$360		$637		$1,438

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Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks of U.S. companies and other U.S.-traded equity securities. The fund considers U.S.-traded equity securities to include American Depositary Receipts (“ADRs”), as well as securities that are traded in the U.S. that have been issued by companies established, domiciled or operating in foreign countries. The fund may invest in companies of any size and may invest a portion of its assets in U.S. or non-U.S. issued securities of foreign companies. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

The fund invests primarily in common stocks of companies that exhibit strong revenue, earnings, and/or cash flow growth characteristics. In selecting investments for purchase and sale, the subadviser uses a fundamental research approach to identify innovative companies with favorable prospects for future growth, due to their long-term product differentiation, customer demand, competitive positioning or other differentiating factors. The fund utilizes a variety of traditional and unconventional resources and techniques to identify growth “drivers” for each company and these growth drivers become critical to the ongoing evaluation process. Industry growth dynamics, company competitive positioning, pricing flexibility, and diversified product offerings are evaluated, providing the foundation for further fundamental research to determine the weighting of the fund’s investments. Generally the fund will hold a limited number of securities.

Principal Risks

Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investments in securities of foreign issuers.

Limited Number of Investments Risk. The risk that the fund’s portfolio will be more susceptible to factors adversely affecting issuers of securities in the fund’s portfolio than would a fund holding a greater number of securities.

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Small and Medium Market Capitalization Risk. The risk that the fund's investments in small and medium market capitalization companies will increase the volatility and risk of loss to the fund, as compared with investments in larger, more established companies.

Performance Information

Calendar year total returns for Class I Shares

Returns do not reflect sales charges applicable to other share classes and would be lower if they did.

[MISSING IMAGE: A0TLEBRD02GOUN9AK3PPH0SK9F81.JPG]

Best Quarter:

Q2/2009:

23.29%

Worst Quarter:

Q4/2018:

-22.49%

Year to Date (3/31/19):

25.24%

Average Annual Total Returns (for the periods ended 12/31/18)

Returns reflect deduction of maximum sales charges and full redemption at end of periods shown.

	1 Year			5 Years			10 Years
Class I
Return Before Taxes		11.07	%		9.82	%		16.71	%
Return After Taxes on Distributions		9.04	%		7.60	%		15.26	%
Return After Taxes on Distributions and Sale of Fund Shares		7.15	%		7.31	%		13.92	%
Class A
Return Before Taxes		4.43	%		8.32	%		15.75	%
Russell 3000 ® Growth Index (reflects no deduction for fees, expenses or taxes)		-2.12	%		9.99	%		15.15	%

The Russell 3000 ® Growth Index is a market capitalization-weighted index that measures the performance of growth-oriented stocks of U.S. companies. The index is calculated on a total-return basis with dividends reinvested. The index is unmanaged and not available for direct investment.

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Management

The fund’s investment adviser is Virtus Fund Advisers, LLC.

The fund’s subadviser is Zevenbergen Capital Investments LLC (“Zevenbergen”).

Portfolio Management

Brooke de Boutray, CFA, CIC, a Managing Director, Portfolio Manager and Analyst of Zevenbergen, has co-managed the fund since 2004.

Joseph Dennison, CFA, a Portfolio Manager and Analyst of Zevenbergen, has co-managed the fund since 2015.

Leslie Tubbs, CFA, CIC, a Managing Director, Portfolio Manager and Analyst of Zevenbergen, has co-managed the fund since 2004.

Anthony Zackery, CFA, a Portfolio Manager and Analyst of Zevenbergen, has co-managed the fund since 2015.

Nancy Zevenbergen, CFA, CIC, President, Chief Investment Officer and Analyst of Zevenbergen, has co-managed the fund since 2004.

Purchase and Sale of Fund Shares

Minimum initial investments applicable to Class A Shares:

•

$2,500, generally

•

$100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

Minimum additional investments applicable to Class A Shares:

•

$100, generally

•

No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.

For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

Ask your financial advisor or visit your financial intermediary’s website for more information.

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More Information About Fund Expenses

Virtus Fund Advisers, LLC (“VFA” or the “Adviser”) has contractually agreed to limit the total operating expenses (excluding front-end or contingent deferred loads, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation) and acquired fund fees and expenses, if any) through April 30, 2020 of certain of the funds so that expenses do not exceed, on an annualized basis, the amounts indicated in the following table.

	Class A Shares			Class C Shares			Class I Shares			Class R Shares			Class R6 Shares
Virtus Ceredex Large-Cap Value Equity Fund		1.24	%		1.72	%		0.97	%		N/A			0.72	%
Virtus Ceredex Mid-Cap Value Equity Fund		1.38	%		1.79	%		1.08	%		N/A			0.79	%
Virtus Ceredex Small-Cap Value Equity Fund		1.55	%		1.90	%		1.24	%		N/A			0.88	%
Virtus Seix Core Bond Fund		0.64	%		N/A			0.50	%		0.91	%		0.36	%
Virtus Seix Corporate Bond Fund		0.95	%		1.65	%		0.70	%		N/A			N/A
Virtus Seix Floating Rate High Income Fund		0.94	%		1.52	%		0.62	%		N/A			0.52	%
Virtus Seix High Grade Municipal Bond Fund		0.75	%		N/A			0.60	%		N/A			N/A
Virtus Seix High Income Fund		1.03	%		N/A			0.80	%		1.22	%		0.64	%
Virtus Seix High Yield Fund		0.82	%		N/A			0.64	%		1.04	%		0.53	%
Virtus Seix Investment Grade Tax-Exempt Bond Fund		0.75	%		N/A			0.60	%		N/A			N/A
Virtus Seix Short-Term Bond Fund		0.80	%		1.57	%		0.60	%		N/A			N/A
Virtus Seix Short-Term Municipal Bond Fund		0.65	%		N/A			0.48	%		N/A			N/A
Virtus Seix Total Return Bond Fund		0.70	%		N/A			0.46	%		1.06	%		0.31	%
Virtus Seix U.S. Government Securities Ultra-Short Bond Fund		0.66	%		N/A			0.41	%		N/A			0.26	%
Virtus Seix U.S. Mortgage Fund		0.90	%		1.65	%		0.70	%		N/A			N/A
Virtus Seix Ultra-Short Bond Fund		0.65	%		N/A			0.40	%		N/A			N/A
Virtus Silvant Large-Cap Growth Stock Fund		1.23	%		1.90	%		0.97	%		N/A			0.90	%
Virtus Silvant Small-Cap Growth Stock Fund		1.27	%		1.93	%		1.15	%		N/A			N/A
Virtus WCM International Equity Fund		1.42	%		N/A			1.20	%		N/A			1.10	%
Virtus Zevenbergen Innovative Growth Stock Fund		1.25	%		N/A			1.00	%		N/A			N/A

Following the contractual period, VFA may discontinue these and/or prior arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed under these arrangements for a period of three years following the date such reimbursement occurred, provided that the recapture does not cause the applicable fund(s) to exceed its expense limit in effect at the time of the waiver/reimbursement or recapture.

For those funds operating under an expense reimbursement arrangement or fee waiver or recoupment by the adviser of expenses previously reimbursed or waived during the prior fiscal year, total (net) fund operating expenses, including acquired fund fees and expenses, if any, after effect of any expense reimbursement and/or fee waivers or recoupment by the adviser of expenses previously reimbursed or waived were:

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	Class A Shares			Class C Shares			Class I Shares			Class R Shares			Class R6 Shares
Virtus Ceredex Large-Cap Value Equity Fund		1.24	%		1.72	%		0.97	%		N/A			0.72	%
Virtus Ceredex Mid-Cap Value Equity Fund		1.38	%		1.79	%		1.01	%		N/A			0.79	%
Virtus Ceredex Small-Cap Value Equity Fund		1.46	%		1.90	%		1.18	%		N/A			N/A
Virtus Seix Core Bond Fund		0.64	%		N/A			0.50	%		0.91	%		0.36	%
Virtus Seix Corporate Bond Fund		0.98	%		1.68	%		0.73	%		N/A			N/A
Virtus Seix Floating Rate High Income Fund		0.94	%		1.52	%		0.62	%		N/A			0.52	%
Virtus Seix High Grade Municipal Bond Fund		0.76	%		N/A			0.61	%		N/A			N/A
Virtus Seix High Income Fund		1.03	%		N/A			0.80	%		1.22	%		0.64	%
Virtus Seix High Yield Fund		0.82	%		N/A			0.64	%		1.04	%		0.53	%
Virtus Seix Investment Grade Tax-Exempt Bond Fund		0.76	%		N/A			0.61	%		N/A			N/A
Virtus Seix Short-Term Bond Fund		0.80	%		1.57	%		0.60	%		N/A			N/A
Virtus Seix Short-Term Municipal Bond Fund		0.67	%		N/A			0.50	%		N/A			N/A
Virtus Seix Total Return Bond Fund		0.70	%		N/A			0.46	%		0.93	%		0.31	%
Virtus Seix U.S. Government Securities Ultra-Short Bond Fund		N/A			N/A			0.41	%		N/A			0.26	%
Virtus Seix U.S. Mortgage Fund		0.90	%		1.65	%		0.70	%		N/A			N/A
Virtus Seix Ultra-Short Bond Fund		N/A			N/A			0.40	%		N/A			N/A
Virtus Silvant Large-Cap Growth Stock Fund		1.23	%		1.90	%		0.97	%		N/A			0.90	%
Virtus Silvant Small-Cap Growth Stock Fund		1.28	%		1.94	%		1.16	%		N/A			N/A
Virtus WCM International Equity Fund		1.42	%		N/A			1.20	%		N/A			1.10	%
Virtus Zevenbergen Innovative Growth Stock Fund		1.26	%		N/A			1.01	%		N/A			N/A

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Virtus Ceredex Large-Cap Value Equity Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide a high level of capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Principal Investment Strategies:

Please see “More Information About Risks Related to Principal Investment Strategies” for information about the risks of investing in the fund. Please refer to “Risks Associated with Additional Investment Techniques and Fund Operations” for other investment techniques of the fund.

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Virtus Ceredex Mid-Cap Value Equity Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Principal Investment Strategies:

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Virtus Ceredex Small-Cap Value Equity Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Principal Investment Strategies:

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by investing, without limit, in cash and cash equivalents. The fund also may invest in investment grade fixed income securities and mid- to large-capitalization common stocks that would not ordinarily be consistent with the fund’s objective. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix Core Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Principal Investment Strategies:

A security’s rating will be governed by the Barclays methodology as follows: when Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc. and Fitch, Inc. provide a rating, the subadviser will use the middle rating of the three; if only two of those three rating agencies rate the security, the subadviser will use the lowest rating; if only one rating agency assigns a rating, the subadviser will use that rating. If none of the three provide a rating, the subadviser may rely on a rating provided by another nationally recognized statistical ratings organization (“NRSRO”).

There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual assets in which the fund may invest. The subadviser may retain investments if the rating of the instrument falls below investment grade if the subadviser deems retention of the investment to be in the best interest of the fund. Such instruments are sometimes referred to as “junk bonds.” The fund may also invest a portion of its assets in instruments that are restricted as to resale. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Aggregate Bond Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Aggregate Bond Index is 5 years, the fund’s duration may be 4–6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Aggregate Bond Index was 5.87 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

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Virtus Seix Corporate Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Principal Investment Strategies:

The fund primarily invests in a diversified portfolio of U.S. dollar denominated corporate obligations and other fixed income instruments that are rated investment grade (BBB-/Baa3 or better) or unrated instruments that the subadviser believes are of comparable quality. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest.

The subadviser anticipates that the fund’s modified-adjusted-duration will mirror that of the Bloomberg Barclays U.S. Corporate Investment Grade Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Corporate Investment Grade Index is 5 years, the fund’s duration may be 4–6 years. As of December 31, 2018, the Bloomberg Barclays U.S. Corporate Investment Grade Index duration was 7.10 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

While the fund generally does not invest in equity securities, equity securities may be obtained through a restructuring of a debt security held in the fund and may be retained in the fund if the subadviser deems it to be in the fund’s best interests.

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Virtus Seix Floating Rate High Income Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of attempting to provide a high level of current income.

Principal Investment Strategies:

These loans are loans made by banks and other large financial institutions to various companies and are senior in the borrowing companies’ capital structure. Coupon rates are generally floating, not fixed, and are tied to a benchmark lending rate, the most popular of which is the London Interbank Offered Rate (“LIBOR”) or are set at a specified floor, whichever is higher. LIBOR is based on rates that contributor banks in London charge each other for interbank deposits and is typically used to set coupon rates on floating rate loans and debt securities. The interest rates of these floating rate loans and debt instruments vary periodically based upon a benchmark indicator of prevailing interest rates.

The fund invests all or substantially all of its assets in first- and second-lien senior floating rate loans, or in debt instruments that are rated below investment grade (BBB-/Baa3 or better) by Moody’s and Standard & Poor’s (sometimes referred to as “junk bonds”), or in comparable unrated instruments. The fund may also invest up to 20% of its net assets in any combination of junior debt instruments or instruments with a lien on collateral lower than a senior claim on collateral, high yield fixed-rate bonds, investment grade fixed income debt obligations, asset-backed securities (such as special purpose trusts investing in bank loans), money market securities and repurchase agreements. The fund may invest a portion of its assets in instruments that are restricted as to resale.

The fund may invest up to 20% of its total assets in senior loans made to non-U.S. borrowers provided that no more than 5% of the portfolio’s loans are non-U.S. dollar denominated. There are no limits on the fund’s average-weighted maturity or on the remaining maturities of individual instruments in which the fund may invest. The fund may also engage in certain hedging transactions.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as swaps, including credit default swaps, futures, credit linked notes, options and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with floating rate loan or high yield bond characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in a combination of first- and second-lien senior floating rate loans and other floating rate debt instruments.

While the fund generally does not invest in equity securities, equity securities may be obtained through a restructuring of a debt instrument or loan held in the fund and may be retained in the fund if the subadviser deems it to be in the fund’s best interests.

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Virtus Seix High Grade Municipal Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize total return through current income that is exempt from federal income taxes and capital appreciation consistent with capital preservation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in investment grade (BBB-/Baa3 or better) municipal securities, including securities subject to the U.S. federal alternative minimum tax, with income exempt from regular U.S. federal income tax. The fund may invest its remaining assets in cash, cash equivalents and certain taxable debt securities. There are no limits on the fund’s effective maturity or on the remaining maturities of individual securities in which the fund may invest. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by holding taxable securities, retaining cash or investing part or all of its assets in cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix High Income Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking high current income and, secondarily, total return (comprised of capital appreciation and income).

Principal Investment Strategies:

In selecting investments for purchase and sale, the subadviser employs a research driven process designed to identify value areas within the high yield market. The subadviser seeks to identify securities that generally meet the following criteria: (i) industries that have sound fundamentals; (ii) companies that have good business prospects and increasing credit strength; and (iii) issuers with stable or growing cash flows and effective management.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with below investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 65% of its net assets in non-investment grade fixed income securities.

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by holding cash or investing, without limit, in cash equivalents or other fixed income securities. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix High Yield Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking high income and, secondarily, capital appreciation.

Principal Investment Strategies:

The fund will be managed with a duration that is close to the fund’s comparative benchmark, the ICE BofAML US High Yield BB-B Constrained Index, which is generally between 3 and 6 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of five years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. The fund may also invest a portion of its assets in instruments that are restricted as to resale.

In selecting investments for purchase and sale, the subadviser employs a research driven process designed to identify value areas within the high yield market and attempts to identify lower-rated, higher yielding bonds offering above-average total return. Additionally, the subadviser will emphasize securities which are within the segment of the high yield market it has targeted for emphasis, which are “BB” and “B” rated issuers. The subadviser seeks to identify securities that generally meet the following criteria: (1) industries that have sound fundamentals; (2) companies that have good business prospects and increasing credit strength; and (3) issuers with stable or growing cash flows and effective management.

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by holding cash or investing, without limit, in cash equivalents or other fixed income securities. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix Investment Grade Tax-Exempt Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize high total return through current income that is exempt from federal income taxes and capital appreciation consistent with capital preservation.

Principal Investment Strategies:

The fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in investment grade tax-exempt obligations, such as municipal securities, including securities subject to the U.S. federal alternative minimum tax. The issuers of these securities may be located in any U.S. state, territory or possession. The fund may invest up to 20% of its assets in securities subject to the U.S. federal alternative minimum tax. The fund may also invest a portion of its net assets in certain taxable debt securities. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more.

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by holding taxable securities, retaining cash or investing part or all of its assets in cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix Short-Term Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Principal Investment Strategies:

Temporary Defensive Strategy : During periods of rising interest rates, unstable pricing and currency exchange, or in response to extreme market fluctuations, the subadviser, at its discretion, may take temporary defensive positions that are inconsistent with its principal investment strategies by investing part or all of the fund’s assets in cash or cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix Short-Term Municipal Bond Fund

Non-Fundamental Investment Objective:

Principal Investment Strategies:

Temporary Defensive Strategy : If the subadviser does not believe that the market conditions are favorable to the fund’s principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies by holding taxable securities, retaining cash or investing part or all of its assets in cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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Virtus Seix Total Return Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income securities. These securities will be chosen from the broad universe of available fixed income obligations rated investment grade (BBB-/Baa3 or better), or unrated instruments that the subadviser believes are of comparable quality.

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Aggregate Bond Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Aggregate Bond Index is 5 years, the fund’s duration may be 4 to 6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Aggregate Bond Index was 5.87 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility.

In addition, to implement its investment strategy, the fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The fund may count the value of certain derivatives with investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in fixed income securities.

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Virtus Seix U.S. Government Securities Ultra-Short Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

Principal Investment Strategies:

The fund expects to maintain an average effective duration between 3 months and 1 year. Individual purchases will generally be limited to securities with an effective duration of less than 5 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of five years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. Individual purchases will generally be limited to securities with an effective duration of less than 5 years.

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Virtus Seix U.S. Mortgage Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Principal Investment Strategies:

The subadviser anticipates that the fund’s modified-adjusted duration will mirror that of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index, plus or minus 20%. For example, if the duration of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index is 5 years, the fund’s duration may be 4 to 6 years. As of December 31, 2018, the duration of the Bloomberg Barclays U.S. Mortgage-Backed Securities Index was 4.73 years. Duration measures a bond or fund’s sensitivity to interest rate or other changes (such as changes in a bond’s yield) and is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of 5 years, its value will change by 5% if yields change by 1%. Shorter duration bonds generally result in lower expected volatility. The fund may invest a portion of its assets in securities that are restricted as to resale.

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Virtus Seix Ultra-Short Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

Principal Investment Strategies:

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Virtus Silvant Large-Cap Growth Stock Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide capital appreciation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other U.S.-traded equity securities of large-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). The subadviser considers large-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 1000 ® Growth Index. As of December 31, 2018, the market capitalization range of the companies in the Russell 1000 ® Growth Index was $365 million to $780 billion. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

The subadviser will seek out securities it believes have strong business fundamentals, such as revenue growth, improving cash flows, increasing margins and positive earning trends.

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Virtus Silvant Small-Cap Growth Stock Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide long-term capital appreciation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S.-traded equity securities of small-capitalization companies. U.S.-traded equity securities may include American Depositary Receipts (“ADRs”). The subadviser considers small-capitalization companies to be companies with market capitalizations generally within those of companies in the Russell 2000 ® Growth Index. As of December 31, 2018, the market capitalization range of the companies in the Russell 2000 ® Growth Index was $7.9 million to $6.2 billion. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

Temporary Defensive Strategy: During periods of rising interest rates, unstable pricing and currency exchange, or in response to extreme market fluctuations, the subadviser, at its discretion, may take temporary defensive positions that are inconsistent with its principal investment strategies by investing part or all of the fund’s assets in cash or cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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Virtus WCM International Equity Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide long-term capital appreciation.

Principal Investment Strategies:

Although the fund may invest in any size companies, it will generally invest in large-capitalization established multinational companies. The subadviser considers large-capitalization companies to be those with market capitalization of $3.5 billion or greater at the time of investment. The fund generally considers a company to be foreign if the company has been organized under the laws of, has its principal offices in, or has its securities principally traded in, a non-U.S country or market, or if the company derives at least 50% of its revenues, net profits or incremental revenue growth (typically over the past five years) from, or has at least 50% of assets or production capacities in, one or more non-U.S. countries or markets. The fund generally will invest in securities of companies located in different regions and, under normal market conditions, will invest a significant portion of its assets in at least three different countries outside of the U.S. However, when market conditions warrant, the fund may have a significant portion of its assets invested in the securities of companies in fewer than three countries. As a result of its investment strategy, the fund’s portfolio turnover rate may be 100% or more and the fund may focus its investments in one or more sectors.

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Virtus Zevenbergen Innovative Growth Stock Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of seeking to provide long-term capital appreciation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks of U.S. companies and other U.S.-traded equity securities. The fund considers U.S.-traded equity securities to include American Depositary Receipts (“ADRs”) as well as securities that are traded in the U.S. that have been issued by companies established, domiciled or operating in foreign countries. The fund may invest in companies of any size and may invest a portion of its assets in U.S. or non-U.S. issued securities of foreign companies. As a result of its investment strategy, the fund may focus its investments in one or more sectors.

Temporary Defensive Strategy: During periods of rising interest rates, unstable pricing and currency exchange, or in response to extreme market fluctuations, the subadviser, at its discretion, may take temporary defensive positions that are inconsistent with its principal investment strategies by investing part or all of the fund’s assets in cash or cash equivalents. When this allocation happens, the fund may not achieve its investment objective.

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More Information About Risks Related to Principal Investment Strategies

Each of the funds may not achieve its objective, and each is not intended to be a complete investment program.

Generally, the value of a fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of such fund’s investments decreases, you will lose money.

Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or companies in which the fund invests can be worse than expected and investments may fail to perform as the adviser or a subadviser expects. As a result, the value of your shares may decrease.

Specific risks of investing in the funds are identified in the below table and described in detail following the table. For certain funds, the indicated risks apply indirectly through the fund’s investments in other funds.

Risks

Virtus
Ceredex
Large-Cap
Value Equity
Fund

Virtus
Ceredex
Mid-Cap
Value Equity
Fund

Virtus
Ceredex
Small-Cap
Value Equity
Fund

Virtus Seix
Core Bond
Fund

Virtus Seix
Corporate
Bond Fund

Virtus Seix
Floating Rate
High Income
Fund

Virtus Seix
High Grade
Municipal
Bond Fund

Virtus Seix
High Income
Fund

Virtus Seix
High Yield
Fund

Virtus Seix
Investment
Grade
Tax-Exempt
Bond Fund

Asset-Backed Securities

Convertible Securities

Debt Instruments

Call

Credit

Interest Rate

Depositary Receipts

Derivatives

Equity Securities

Growth Stocks

Large Market Capitalization Companies

Medium Market Capitalization Companies

Small and Medium Market Capitalization Companies

Small Market Capitalization Companies

Value Stocks

Exchange-Traded Funds ("ETFs")

Foreign Investing

Currency Rate

Emerging Market Investing

Geographic Concentration

High Yield-High Risk Fixed Income Securities (Junk Bonds)

Illiquid and Restricted Securities

Income

Industry/Sector Concentration

Inflation Protected Investing

Limited Number of Investments

Loans

Market Volatility

Mortgage-Backed Securities

Mortgage-Backed and Asset-Backed Securities

Municipal Bond Market

Non-Diversification

Portfolio Turnover

Preferred Stocks

Redemption

Sector Focused Investing

Short-Term Investments

Tax-Exempt Securities

Tax Liability

Unrated Fixed Income Securities

U.S. Government Securities

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Risks

Virtus Seix
Short-Term
Bond Fund

Virtus Seix
Short-Term
Municipal
Bond Fund

Virtus Seix
Total Return
Bond Fund

Virtus Seix
U.S.
Government
Securities
Ultra-Short
Bond Fund

Virtus Seix
U.S. Mortgage
Fund

Virtus Seix
Ultra-Short
Bond Fund

Virtus Silvant
Large-Cap
Growth Stock
Fund

Virtus Silvant
Small-Cap
Growth Stock
Fund

Virtus WCM
International
Equity

Virtus
Zevenbergen
Innovative
Growth Stock
Fund

Asset-Backed Securities

Convertible Securities

Debt Instruments

Call

Credit

Interest Rate

Depositary Receipts

Derivatives

Equity Securities

Growth Stocks

Large Market Capitalization Companies

Medium Market Capitalization Companies

Small and Medium Market Capitalization Companies

Small Market Capitalization Companies

Value Stocks

Exchange-Traded Funds ("ETFs")

Foreign Investing

Currency Rate

Emerging Market Investing

Geographic Concentration

High Yield-High Risk Fixed Income Securities (Junk Bonds)

Illiquid and Restricted Securities

Income

Industry/Sector Concentration

Inflation Protected Investing

Limited Number of Investments

Loans

Market Volatility

Mortgage-Backed Securities

Mortgage-Backed and Asset-Backed Securities

Municipal Bond Market

Non-Diversification

Portfolio Turnover

Preferred Stocks

Redemption

Sector Focused Investing

Short-Term Investments

Tax-Exempt Securities

Tax Liability

Unrated Fixed Income Securities

U.S. Government Securities

Asset-Backed Securities

Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card agreements. The impairment of the value of collateral or other assets underlying an asset-backed security, such as that resulting from non-payment of loans, may result in a reduction in the value of such security and losses to a fund.

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may cause prepayments to occur at a slower than expected rate, which may effectively change a security that was considered short- or intermediate-term into a long-term security. Long-term securities tend to fluctuate in value more widely in response to changes in interest rates than shorter-term securities.

Convertible Securities

Convertible securities are bonds, debentures, notes, preferred stock, rights, warrants or other securities that may be converted into or exchanged for a prescribed amount of common stock or other security of the same or a different issuer or into cash within a particular period of time at a specified price or formula. A convertible security generally entitles the holder to receive interest paid or accrued on debt instruments or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. If a convertible security is called for redemption, the respective fund may have to redeem the security, convert it into common stock or sell it to a third party at a price and time that is not beneficial for the fund. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Securities convertible into common stocks may have higher yields than common stocks but lower yields than comparable nonconvertible securities.

Debt Instruments

Debt instruments are subject to various risks, the most prominent of which are credit risk and interest rate risk. These risks can affect an instrument’s price volatility to varying degrees, depending upon the nature of the instrument. Risks associated with investing in debt instruments include the following:

•

Call Risk. There is a risk that issuers will prepay fixed rate obligations when interest rates fall. A fund holding callable instruments therefore may be forced to reinvest in obligations with lower interest rates than the original obligations and otherwise may not benefit fully from the increase in value that other fixed income investments experience when rates decline.

•

Credit Risk. There is a risk that the issuer of an instrument will fail to pay interest or principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of the instrument to decline. Debt instruments rated below investment-grade are especially susceptible to this risk.

•

Interest Rate Risk. The values of debt instruments usually rise and fall in response to changes in interest rates. Declining interest rates generally increase the value of existing debt instruments, and rising interest rates generally decrease the value of existing debt instruments. Changes in a debt instrument’s value usually will not affect the amount of interest income paid to a fund, but will affect the value of the fund’s shares. Interest rate risk is generally greater for investments with longer maturities.

Certain instruments pay interest at variable or floating rates. Variable rate instruments reset at specified intervals, while floating rate instruments reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the effect of changes in market interest rates on the value of the instrument. However, some instruments do not track the underlying index directly, but reset based on formulas that can produce an effect similar to leveraging; others may also provide for interest payments that vary inversely with market rates. The market prices of these instruments may fluctuate significantly when interest rates change.

Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, a fund might have to reinvest the proceeds in an investment offering a lower yield, and therefore it might not benefit from any increase in value as a result of declining interest rates.

Depositary Receipts

Certain funds may invest in American Depositary Receipts (ADRs) sponsored by U.S. banks, European Depositary Receipts (EDRs), Global Depositary Receipts (GDRs), ADRs not sponsored by U.S. banks, other types of depositary receipts (including non-voting depositary receipts), and other similar instruments representing securities of foreign companies.

Although certain depositary receipts may reduce or eliminate some of the risks associated with foreign investing, these types of securities generally are subject to many of the same risks as direct investment in securities of foreign issuers.

Derivatives

Derivative transactions are contracts whose value is derived from the value of an underlying asset, index or rate, including futures, options, non-deliverable forwards, foreign currency forward contracts and swap agreements. A fund

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may use derivatives to hedge against factors that affect the value of its investments, such as interest rates and foreign currency exchange rates. A fund may also utilize derivatives as part of its overall investment technique to gain or lessen exposure to various securities, markets, volatility, dividend payments and currencies.

Derivatives typically involve greater risks than traditional investments. It is generally more difficult to ascertain the risk of, and to properly value, derivative contracts. Many derivatives, and particularly those that are privately negotiated, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the fund. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Derivatives are usually less liquid than traditional securities and are subject to counterparty risk (the risk that the other party to the contract will default or otherwise not be able to perform its contractual obligations). In addition, some derivatives transactions may involve potentially unlimited losses.

Derivative contracts entered into for hedging purposes may also subject a fund to losses if the contracts do not correlate with the assets, indexes or rates they were designed to hedge. In regard to currency hedging using forward contracts, it is generally not possible to precisely match the foreign currency exposure of such foreign currency forward contracts to the value of the securities involved due to fluctuations in the market values of such securities and cash flows into and out of the fund between the date a foreign currency forward contract is entered into and the date it expires.

As an investment company registered with the SEC, each fund is required to identify on its books (often referred to as “asset segregation”) liquid assets, or engage in other SEC-approved measures, to “cover” open positions with respect to certain kinds of derivative instruments. If a fund investing in such instruments has insufficient cash to meet such requirements, it may have to sell other investments, including at disadvantageous times.

Governments, agencies and/or other regulatory bodies may adopt or change laws or regulations that could adversely affect a fund’s ability to invest in derivatives as the fund’s subadviser intends. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), among other things, grants the Commodity Futures Trading Commission (the “CFTC”) and SEC broad rulemaking authority to implement various provisions of the Dodd-Frank Act including comprehensive regulation of the over-the-counter (“OTC”) derivatives market. The implementation of the Dodd-Frank Act could adversely affect a fund by placing limits on derivative transactions, and/or increasing transaction and/or regulatory compliance costs. For example, the CFTC has recently adopted new rules that will apply a new aggregation standard for position limit purposes, which may further limit a fund’s ability to trade futures contracts and swaps.

There are also special tax rules applicable to certain types of derivatives, which could affect the amount, timing and character of a fund’s income or loss and hence of its distributions to shareholders by causing holding period adjustments, converting short-term capital losses into long-term capital losses, and accelerating a fund’s income or deferring its losses. A fund’s use of derivatives may also increase the amount of taxes payable by shareholders or the resources required by the fund or its adviser and/or subadviser(s) to comply with particular regulatory requirements.

Equity Securities

Generally, prices of equity securities are more volatile than those of fixed income securities. The prices of equity securities will rise and fall in response to a number of different factors. In particular, equity securities will respond to events that affect entire financial markets or industries (such as changes in inflation or consumer demand) and to events that affect particular issuers (such as news about the success or failure of a new product). Equity securities also are subject to “stock market risk,” meaning that stock prices in general may decline over short or extended periods of time. When the value of the stocks held by the fund goes down, the value of the fund’s shares will be affected.

•

Growth Stocks Risk. Growth stocks can react differently to issuer, political, market, and economic developments than the market as a whole and other types of stocks. Growth stocks also tend to be more expensive relative to their earnings or assets compared to other types of stocks, and as a result they tend to be sensitive to changes in their earnings and more volatile than other types of stocks.

•

Large Market Capitalization Companies Risk. The value of investments in larger companies may not rise as much as investments in smaller companies, and larger companies may be unable to respond quickly to competitive challenges, such as changes in technology and consumer tastes.

•

Medium Market Capitalization Companies Risk. Medium-sized companies often have narrower markets, fewer products or services to offer, and more limited managerial and financial resources than larger, more established companies. As a result, the performance of medium-sized companies may be more volatile, and they may face a greater risk of business failure, which could increase the volatility and risk of loss to the fund.

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•

Small and Medium Market Capitalization Companies Risk. Small and medium-sized companies often have narrower markets, fewer products or services to offer, and more limited managerial and financial resources than larger, more established companies. As a result, the performance of small and medium-sized companies may be more volatile, and they may face a greater risk of business failure, which could increase the volatility and risk of loss to the fund.

•

Small Market Capitalization Companies Risk. Small companies often have narrower markets, fewer products or services to offer, and more limited managerial and financial resources than larger, more established companies. As a result, the performance of small companies may be more volatile, and they may face a greater risk of business failure, which could increase the volatility and risk of loss to the fund.

•

Value Stocks Risk. A company may be undervalued due to market or economic conditions, temporary earnings declines, unfavorable developments affecting the company and other factors, or because it is associated with a market sector that generally is out of favor with investors. Undervalued stocks tend to be inexpensive relative to their earnings or assets compared to other types of stock. However, these stocks can continue to be inexpensive for long periods of time and may not realize their full economic value.

Exchange-Traded Funds (ETFs)

ETFs invest in a portfolio of securities designed to track a particular market segment or index. The risks associated with investing in ETFs generally reflect the risks of owning shares of the underlying securities the ETF is designed to track, although lack of liquidity in an ETF could result in its value being more volatile than the underlying portfolio of securities. Assets invested in ETFs incur a layering of expenses, including operating costs and advisory fees that fund shareholders indirectly bear; such expenses may exceed the expenses the fund would incur if it invested directly in the underlying portfolio of securities the ETF is designed to track. Shares of ETFs trade on a securities exchange and may trade at, above, or below their net asset value.

Foreign Investing

Investing in securities of non-U.S. companies involves special risks and considerations not typically associated with investing in U.S. companies, and the values of non-U.S. securities may be more volatile than those of U.S. securities. The values of non-U.S. securities are subject to economic and political developments in countries and regions where the issuers operate or are domiciled, or where the securities are traded, such as changes in economic or monetary policies, and to changes in currency exchange rates. Values may also be affected by restrictions on receiving the investment proceeds from a non-U.S. country.

In general, less information is publicly available about non-U.S. companies than about U.S. companies. Non-U.S. companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. Certain foreign issuers classified as passive foreign investment companies may be subject to additional taxation risk.

•

Currency Rate Risk. Because the foreign securities in which a fund invests generally trade in currencies other than the U.S. dollar, changes in currency exchange rates will affect the fund’s net asset value, the value of dividends and interest earned, and gains and losses realized on the sale of securities. Because the value of each fund’s shares is calculated in U.S. dollars, it is possible for a fund to lose money by investing in a foreign security if the local currency of a foreign market depreciates against the U.S. dollar, even if the local currency value of the fund’s holdings goes up. Generally, a strong U.S. dollar relative to such other currencies will adversely affect the value of the fund’s holdings in foreign securities.

•

Emerging Market Investing Risk. The risks of foreign investments are generally greater in countries whose markets are still developing than they are in more developed markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Since these markets are often small, they may be more likely to suffer sharp and frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few large investors. They may also have policies that restrict investment by foreigners, or that prevent foreign investors from withdrawing their money at will. Certain emerging markets may also face other significant internal or external risks, including the risk of war and civil unrest. For all of these reasons, investments in emerging markets may be considered speculative. To the extent that a fund invests a significant portion of its assets in a particular emerging market, the fund will be more vulnerable to financial, economic, political and other

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developments in that country, and conditions that negatively impact that country will have a greater impact on the fund as compared with a fund that does not have its holdings concentrated in a particular country.

Geographic Concentration

The value of the investments of a fund that focuses its investments in a particular geographic location will be highly sensitive to financial, economic, political and other developments affecting the fiscal stability of that location, and conditions that negatively impact that location will have a greater impact on the fund as compared with a fund that does not have its holdings similarly concentrated. Events negatively affecting such location are therefore likely to cause the value of the fund’s shares to decrease, perhaps significantly.

High-Yield/High-Risk Fixed Income Securities (Junk Bonds)

Securities rated below the four highest rating categories of a nationally recognized statistical rating organization, may be known as “high-yield” securities and commonly referred to as “junk bonds.” The highest of the ratings among these nationally recognized statistical rating organizations is used to determine the security's classification. Such securities entail greater price volatility and credit and interest rate risk than investment-grade securities. Analysis of the creditworthiness of high-yield/high-risk issuers is more complex than for higher-rated securities, making it more difficult for a fund's subadviser to accurately predict risk. There is a greater risk with high-yield/high-risk fixed income securities that an issuer will not be able to make principal and interest payments when due. If the fund pursues missed payments, there is a risk that fund expenses could increase. In addition, lower-rated securities may not trade as often and may be less liquid than higher-rated securities, especially during periods of economic uncertainty or change. As a result of all of these factors, these bonds are generally considered to be speculative.

Illiquid and Restricted Securities

Certain securities in which a fund invests may be difficult to sell at the time and price beneficial to the fund, for example due to low trading volumes or legal restrictions. When there is no willing buyer or a security cannot be readily sold, the fund may have to sell at a lower price or may be unable to sell the security at all. The sale of such securities may also require the fund to incur expenses in addition to those normally associated with the sale of a security.

Income

The income shareholders receive from a fund is based primarily on the dividends and interest the fund earns from its investments, which can vary widely over the short- and long-term. If prevailing market interest rates drop, distribution rates of the fund’s preferred stock holdings and any bond holdings could drop as well. The fund’s income also would likely be affected adversely when prevailing short-term interest rates increase. In certain circumstances, a fund may be treated as receiving income even though no cash is received. A fund may not be able to pay distributions, or may have to reduce distribution levels, if the cash distributions that the fund receives from its investments decline. For investments in inflation-protected treasuries (TIPS), income may decline due to a decline in inflation (or deflation) or due to changes in inflation expectations.

Industry/Sector Concentration

The value of the investments of a fund that focuses its investments in a particular industry or market sector will be highly sensitive to financial, economic, political and other developments affecting that industry or market sector, and conditions that negatively impact that industry or market sector will have a greater impact on the fund as compared with a fund that does not have its holdings similarly concentrated. Events negatively affecting the industries or market sectors in which a fund has invested are therefore likely to cause the value of the fund’s shares to decrease, perhaps significantly.

Inflation-Protected Investing

The current market value of inflation-protected securities is not guaranteed and will fluctuate. Inflation-protected securities may react differently from other fixed income securities to changes in interest rates. Because interest rates on inflation-protected securities are adjusted for inflation, the values of these securities are not materially affected by inflation expectations. Therefore, the value of inflation-protected securities are anticipated to change in response to changes in “real” interest rates, which represent nominal (stated) interest rates reduced by the expected impact of inflation. Generally, the value of an inflation-protected security will fall when real interest rates rise and will rise when real interest rates fall.

Because the interest and/or principal payments on an inflation-protected security are adjusted periodically for changes in inflation, the income distributed by a fund invested in such securities may be irregular. Although the U.S. Treasury guarantees to pay at least the original face value of any inflation-protected securities the Treasury issues, other issuers

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may not offer the same guarantee. Also, inflation-protected securities, including those issued by the U.S. Treasury, are not protected against deflation. As a result, in a period of deflation, the inflation-protected securities held by a fund may not pay any income and the fund may suffer a loss. While inflation-protected securities are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in a fund’s value. If interest rates rise due to reasons other than inflation, a fund’s investment in these securities may not be protected to the extent that the increase is not reflected in the securities’ inflation measures. In addition, positive adjustments to principal generally will result in taxable income to a fund at the time of such adjustments (which generally would be distributed by the fund as part of its taxable dividends), even though the principal amount is not paid until maturity. There can be no assurance that the inflation index used will accurately measure the real rate of inflation in the prices of goods and services. A fund’s investments in inflation-linked securities may lose value in the event that the actual rate of inflation is different from the rate of the inflation index.

Limited Number of Investments

Because the fund invests in a limited number of securities, the fund’s portfolio will be more susceptible to factors adversely affecting issuers of securities in the fund’s portfolio than would a fund holding a greater number of securities.

Loans

Investing in loans (including floating rate loans, loan assignments, loan participations and other loan instruments) carries certain risks in addition to the risks typically associated with high-yield/high-risk fixed income securities. Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and sometimes trade infrequently on the secondary market. In the event a borrower defaults, a fund’s access to the collateral may be limited or delayed by bankruptcy or other insolvency laws. There is a risk that the value of the collateral securing the loan may decline after a fund invests and that the collateral may not be sufficient to cover the amount owed to the fund. If the loan is unsecured, there is no specific collateral on which the fund can foreclose. In addition, if a secured loan is foreclosed, a fund may bear the costs and liabilities associated with owning and disposing of the collateral, including the risk that collateral may be difficult to sell.

Transactions in many loans settle on a delayed basis that may take more than seven days. As a result, sale proceeds related to the sale of loans may not be available to make additional investments or to meet the Fund’s redemption obligations until potentially a substantial period of time after the sale of the loans. No active trading market may exist for some loans, which may impact the ability of the Fund to realize full value in the event of the need to liquidate such assets. Adverse market conditions may impair the liquidity of some actively traded loans. Loans also may be subject to restrictions on resale, which can delay the sale and adversely impact the sale price. Difficulty in selling a loan can result in a loss. Loans made to finance highly leveraged corporate acquisitions may be especially vulnerable to adverse changes in economic or market conditions. Certain loans may not be considered “securities,” and purchasers, such as a fund, therefore may not be entitled to rely on the strong anti-fraud protections of the federal securities laws. With loan participations, a fund may not be able to control the exercise of any remedies that the lender would have under the loan and likely would not have any rights against the borrower directly, so that delays and expense may be greater than those that would be involved if a fund could enforce its rights directly against the borrower.

Market Volatility

The value of the securities in which a fund invests may go up or down in response to the prospects of individual issuers and/or general economic conditions. Such price changes may be temporary or may last for extended periods.

Instability in the financial markets has exposed each fund to greater market and liquidity risk and potential difficulty in valuing portfolio instruments that it holds. In response to financial markets that experienced extreme volatility, and in some cases a lack of liquidity, the U.S. Government and other governments have taken a number of unprecedented actions, including acquiring distressed assets from financial institutions and acquiring ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear. Additional legislation or government regulation may also change the way in which funds themselves are regulated, which could limit or preclude a fund’s ability to achieve its investment objective.

Mortgage-Backed Securities

Mortgage-backed securities represent interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders. The impairment of the value of collateral underlying a mortgage-backed security, such as that resulting from non-payment of loans, may result in a reduction in the value of such security and losses to a fund.

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Early payoffs in the loans underlying such securities may result in a fund receiving less income than originally anticipated. The variability in prepayments will tend to limit price gains when interest rates drop and exaggerate price declines when interest rates rise. In the event of high prepayments, a fund may be required to invest proceeds at lower interest rates, causing the fund to earn less than if the prepayments had not occurred. Conversely, rising interest rates may cause prepayments to occur at a slower than expected rate, which may effectively change a security that was considered short- or intermediate-term into a long-term security. Long-term securities tend to fluctuate in value more widely in response to changes in interest rates than shorter-term securities.

Mortgage-Backed and Asset-Backed Securities

Mortgage-backed securities represent interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders. Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card arrangements. These two types of securities share many of the same risks.

The impairment of the value of collateral or other assets underlying a mortgage-backed or asset-backed security, such as that resulting from non-payment of loans, may result in a reduction in the value of such security and losses to a fund.

Municipal Bond Market

The amount of public information available about municipal bonds is generally less than that of corporate equities or bonds, and the investment performance of a fund may be more dependent on the analytical abilities of the investment adviser than would be the case for a fund that does not invest in municipal bonds. The secondary market for municipal bonds also tends to be less well-developed and less liquid than many other securities markets, which may adversely affect the fund’s ability to sell its bonds at attractive prices. In addition, municipal obligations can experience downturns in trading activity, and the supply of municipal obligations may exceed the demand in the market. During such periods, the spread can widen between the price at which an obligation can be purchased and the price at which it can be sold. Less liquid obligations can become more difficult to value and be subject to erratic price movements. Economic and other events (whether real or perceived) can reduce the demand for certain investments or for investments generally, which may reduce market prices and cause the value of the fund’s shares to fall. The frequency and magnitude of such changes cannot be predicted. A fund may invest in municipal obligations that do not appear to be related, but in fact depend on the financial rating or support of a single government unit, in which case, events that affect one of the obligations will also affect the others and will impact the fund’s portfolio to a greater degree than if the fund’s investments were not so related. The increased presence of non-traditional participants in the municipal markets may lead to greater volatility in the markets.

Non-Diversification

As a non-diversified investment company, the fund is not limited in the proportion of assets that it may invest in the securities of any one issuer. If the fund takes concentrated positions in a small number of issuers, the fund may be more susceptible to the risks associated with those issuers, or to a single economic, political, regulatory or other event affecting those issuers.

Portfolio Turnover

A fund’s investment strategy may result in consistently frequently high turnover rate. A high portfolio turnover rate may result in correspondingly greater brokerage commission expenses and the distribution to shareholders of additional capital gains for tax purposes, some of which may be taxable at ordinary income rates. These factors may negatively affect the fund’s performance.

Preferred Stocks

Preferred stocks may provide a higher dividend rate than the interest yield on debt instruments of the same issuer, but are subject to greater risk of fluctuation in market value and greater risk of non-receipt of income. Unlike interest on debt

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instruments, dividends on preferred stocks must be declared by the issuer’s board of directors before becoming payable. Preferred stocks are in many ways like perpetual debt instruments, providing a stream of income but without stated maturity date. Because they often lack a fixed maturity or redemption date, preferred stocks are likely to fluctuate substantially in price when interest rates change. Such fluctuations generally are comparable to or exceed those of long-term government or corporate bonds (those with maturities of fifteen to thirty years). Preferred stocks have claims on assets and earnings of the issuer which are subordinate to the claims of all creditors but senior to the claims of common stockholders. A preferred stock rating differs from a bond rating because it applies to an equity issue which is intrinsically different from, and subordinated to, a debt issue. Preferred stock ratings generally represent an assessment of the capacity and willingness of an issuer to pay preferred stock dividends and any applicable sinking fund obligations. Preferred stock also may be subject to optional or mandatory redemption provisions, and may be significantly less liquid than many other securities, such as U.S. Government securities, corporate debt or common stock.

Redemption

The redemption by one or more large shareholders or groups of shareholders of their holdings in the fund could have an adverse impact on the remaining shareholders in the fund by, for example, accelerating the realization of capital gains and/or increasing the fund’s transaction costs.

Sector Focused Investing

The value of the investments of a fund that focuses its investments in a particular market sector will be highly sensitive to financial, economic, political and other developments affecting that market sector, and conditions that negatively impact that market sector will have a greater impact on the fund as compared with a fund that does not have its holdings similarly focused. Events negatively affecting the market sectors in which a fund has invested are therefore likely to cause the value of the fund’s shares to decrease, perhaps significantly.

Short-Term Investments

Short-term investments include money market instruments, repurchase agreements, certificates of deposit and bankers’ acceptances and other short-term instruments that are not U.S. Government securities. These securities generally present less risk than many other investments, but they are generally subject to credit risk and may be subject to other risks as well.

Tax-Exempt Securities

Tax-exempt securities may not provide a higher after-tax return than taxable securities, or the tax-exempt status of such securities may be lost or limited.

Tax Liability

Distributions by a fund could become taxable to shareholders as ordinary income due to noncompliant conduct by a municipal bond issuer, unfavorable changes in federal or state tax laws, or adverse interpretations of tax laws by applicable tax authorities. Such adverse interpretations or actions could cause interest from a security to become taxable, possibly retroactively, subjecting shareholders to increased tax liability. In addition, such adverse interpretations or actions could cause the value of a security, and therefore the value of a fund’s shares, to decline.

Unrated Fixed Income Securities

A fund’s subadviser has the authority to make determinations regarding the quality of unrated fixed-income securities for the purposes of assessing whether they meet the fund’s investment restrictions. However, analysis of unrated securities is more complex than that of rated securities, making it more difficult for the subadviser to accurately predict risk. Unrated fixed income securities may not be lower in quality than rated securities, but due to their perceived risk they may not have as broad a market as rated securities, making it more difficult to sell unrated securities.

U.S. Government Securities

Obligations issued or guaranteed by the U.S. Government, its agencies, authorities and instrumentalities and backed by the full faith and credit of the United States only guarantee principal and interest will be timely paid to holders of the securities. The entities do not guarantee that the value of fund shares will increase, and in fact, the market values of such obligations may fluctuate. In addition, not all U.S. Government securities are backed by the full faith and credit of the United States; some are the obligation solely of the entity through which they are issued. There is no guarantee that the U.S. Government would provide financial support to its agencies and instrumentalities if not required to do so by law.

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Management of the Funds

The Adviser

Virtus Fund Advisers, LLC (“VFA” or the “Adviser”), formerly RidgeWorth Capital Management LLC, located at One Financial Plaza, Hartford, Connecticut 06103 and 3333 Piedmont Road, NE, Suite 1500 Atlanta, Georgia 30305, serves as the investment adviser to the funds. VFA, an indirect, wholly-owned subsidiary of Virtus Investment Partners, Inc., a publicly-traded multi-manager asset management business, acts as an investment adviser to mutual funds and as adviser to institutional clients. As of December 31, 2018, the Adviser managed approximately $30.3 billion in assets.

Subject to the direction of the funds’ Board of Trustees, the Adviser is responsible for managing the funds’ investment programs and for the general operations of the funds, including oversight of the funds’ subadvisers.

The Adviser has appointed and oversees the activities of each of the subadvisers for the funds shown in the table below. For the funds shown below, each subadviser manages the investments of each fund to conform with its investment policies as described in this prospectus.

		Virtus Ceredex Large-Cap Value Equity Fund				Ceredex
		Virtus Ceredex Mid-Cap Value Equity Fund				Ceredex
		Virtus Ceredex Small-Cap Value Equity Fund				Ceredex
		Virtus Seix Core Bond Fund				Seix
		Virtus Seix Corporate Bond Fund				Seix
		Virtus Seix Floating Rate High Income Fund				Seix
		Virtus Seix High Grade Municipal Bond Fund				Seix
		Virtus Seix High Income Fund				Seix
		Virtus Seix High Yield Fund				Seix
		Virtus Seix Investment Grade Tax-Exempt Bond Fund				Seix
		Virtus Seix Short-Term Bond Fund				Seix
		Virtus Seix Short-Term Municipal Bond Fund				Seix
		Virtus Seix Total Return Bond Fund				Seix
		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund				Seix
		Virtus Seix U.S. Mortgage Fund				Seix
		Virtus Seix Ultra-Short Bond Fund				Seix
		Virtus Silvant Large-Cap Growth Stock Fund				Silvant
		Virtus Silvant Small-Cap Growth Stock Fund				Silvant
		Virtus WCM International Equity Fund				WCM
		Virtus Zevenbergen Innovative Growth Stock Fund				Zevenbergen

Management Fees

Each fund pays the Adviser an investment management fee that is accrued daily against the value of the fund’s net assets at the following annual rates:

		Virtus Ceredex Large-Cap Value Equity Fund						0.70%
		Virtus Ceredex Mid-Cap Value Equity Fund						0.75%
		Virtus Ceredex Small-Cap Value Equity Fund						0.85%
		Virtus Seix Core Bond Fund						0.25%
		Virtus Seix Corporate Bond Fund						0.40%
		Virtus Seix Floating Rate High Income Fund						0.45%
		Virtus Seix High Grade Municipal Bond Fund						0.50%
		Virtus Seix High Income Fund						0.55%
		Virtus Seix High Yield Fund						0.45%
		Virtus Seix Investment Grade Tax-Exempt Bond Fund						0.50%
		Virtus Seix Short-Term Bond Fund						0.40%
		Virtus Seix Short-Term Municipal Bond Fund						0.35%
		Virtus Seix Total Return Bond Fund						0.25%
		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund						0.20%

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		Virtus Seix U.S. Mortgage Fund						0.40 %
		Virtus Seix Ultra-Short Bond Fund						0.22 %
		Virtus Silvant Large-Cap Growth Stock Fund						0.70 %
		Virtus Silvant Small-Cap Growth Stock Fund						0.85 %
		Virtus WCM International Equity Fund						0.85 %
		Virtus Zevenbergen Innovative Growth Stock Fund						0.80 %

The above fees are also subject to breakpoint discounts at the following asset levels for each fund:

First $500 million = none — no discount from full fee

Next $500 million = 5% discount from full fee

Next $4 billion = 10% discount from full fee

Over $5 billion = 15% discount from full fee

In its last fiscal year, each fund paid fees to the Adviser (after waivers) at the following percentage of average net assets:

		Virtus Ceredex Large-Cap Value Equity Fund						0.66 %
		Virtus Ceredex Mid-Cap Value Equity Fund						0.69 %
		Virtus Ceredex Small-Cap Value Equity Fund						0.84 %
		Virtus Seix Core Bond Fund						0.25 %
		Virtus Seix Corporate Bond Fund						0.40 %
		Virtus Seix Floating Rate High Income Fund						0.41 %
		Virtus Seix High Grade Municipal Bond Fund						0.50 %
		Virtus Seix High Income Fund						0.55 %
		Virtus Seix High Yield Fund						0.45 %
		Virtus Seix Investment Grade Tax-Exempt Bond Fund						0.50 %
		Virtus Seix Short-Term Bond Fund						0.40 %
		Virtus Seix Short-Term Municipal Bond Fund						0.35 %
		Virtus Seix Total Return Bond Fund						0.25 %
		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund						0.19 %
		Virtus Seix U.S. Mortgage Fund						0.40 %
		Virtus Seix Ultra-Short Bond Fund						0.22 %
		Virtus Silvant Large-Cap Growth Stock Fund						0.70 %
		Virtus Silvant Small-Cap Growth Stock Fund						0.85 %
		Virtus WCM International Equity Fund						0.85 %
		Virtus Zevenbergen Innovative Growth Stock Fund						0.80 %

The Subadvisers

Ceredex, an affiliate of the Adviser, is located at 301 East Pine Street, Suite 500, Orlando, Florida 32801. Ceredex is an investment adviser registered with the SEC. The firm was established in 2008 after 19 years functioning as the Adviser’s value style investment management team. As of December 31, 2018, Ceredex had approximately $8.0 billion in assets under management. Ceredex is a value equity asset management firm that seeks to identify catalysts that may lead to appreciation in undervalued, dividend-paying stocks.

Seix, an affiliate of the Adviser, is located at One Maynard Drive, Suite 3200, Park Ridge, New Jersey 07656. Seix was established in 2008 as a wholly-owned subsidiary of the Adviser, and is an investment adviser registered with the SEC. Its predecessor, Seix Investment Advisors, Inc., was founded in 1992 and was independently owned until 2004 when the firm joined the Adviser as the institutional fixed income management division. Seix is a fundamental, credit driven fixed income boutique specializing in investment grade and high yield bond and leveraged loan management. Seix has employed its bottom-up, research-oriented approach to fixed income management for over 20 years. Seix selects, buys and sells assets for the funds it subadvises under the supervision of the Adviser and the Board of Trustees. As of December 31, 2018, Seix had approximately $21.2 billion in assets under management.

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Silvant, an affiliate of the Adviser, is located at 3333 Piedmont Road, Suite 1500, Atlanta, Georgia 30305. Silvant is an investment adviser registered with the SEC. The firm was established in 2008 after 24 years functioning as the Adviser’s growth style investment management team. As of December 31, 2018, Silvant had approximately $747 million in assets under management. Silvant focuses on managing growth equity products for a diverse range of institutional clients.

WCM is located at 280 Brooks Street, Laguna Beach, California 92651. WCM is an employee-owned investment adviser registered with the SEC. The firm was established in 1976. As of December 31, 2018, WCM had approximately $29.8 billion in assets under management.

Zevenbergen, a minority-owned affiliate of the Adviser, is located at 601 Union Street, Suite 4600, Seattle, Washington 98101. Zevenbergen is an investment adviser registered with the SEC. The firm was established in 1987 and, as of December 31, 2018, had approximately $2.3 billion in assets under management. Zevenbergen specializes in aggressive growth-equity investment advisory services for separately managed portfolios and mutual funds.

The Adviser pays each subadviser a subadvisory fee which is calculated on the fund’s average daily net assets at the following annual rates:

		Virtus Ceredex Large-Cap Value Equity Fund				50% of net investment management fee
		Virtus Ceredex Mid-Cap Value Equity Fund				50% of net investment management fee
		Virtus Ceredex Small-Cap Value Equity Fund				50% of net investment management fee
		Virtus Seix Core Bond Fund				50% of net investment management fee
		Virtus Seix Corporate Bond Fund				50% of net investment management fee
		Virtus Seix Floating Rate High Income Fund				50% of net investment management fee
		Virtus Seix High Grade Municipal Bond Fund				50% of net investment management fee
		Virtus Seix High Income Fund				50% of net investment management fee
		Virtus Seix High Yield Fund				50% of net investment management fee
		Virtus Seix Investment Grade Tax-Exempt Bond Fund				50% of net investment management fee
		Virtus Seix Short-Term Bond Fund				50% of net investment management fee
		Virtus Seix Short-Term Municipal Bond Fund				50% of net investment management fee
		Virtus Seix Total Return Bond Fund				50% of net investment management fee
		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund				50% of net investment management fee
		Virtus Seix U.S. Mortgage Fund				50% of net investment management fee
		Virtus Seix Ultra-Short Bond Fund				50% of net investment management fee
		Virtus Silvant Large-Cap Growth Stock Fund				50% of net investment management fee
		Virtus Silvant Small-Cap Growth Stock Fund				50% of net investment management fee
		Virtus WCM International Equity Fund				60% of net investment management fee with respect to the first $500 million under management; 62% of net investment management fee with respect to the next $500 million under management; 63% of net investment management fee with respect to the next $4 billion under management; and 65% of net investment management fee with respect to assets under management in excess of $5 billion.
		Virtus Zevenbergen Innovative Growth Stock Fund				0.44% of the fund’s average daily net assets

A discussion regarding the basis for the Board of Trustees approving the investment advisory and subadvisory agreements of the funds is available in the funds’ annual report covering the period January 1, 2018 through December 31, 2018.

The funds and the Adviser have received shareholder approval to rely on an exemptive order from the SEC that permits the Adviser, subject to certain conditions and without the approval of shareholders to: (a) select both unaffiliated subadvisers and certain wholly-owned affiliated subadvisers to manage all or a portion of the assets of a fund, and enter into subadvisory agreements with such subadvisers; (b) materially amend subadvisory agreements with such subadvisers; and (c) continue the employment of an existing subadviser on the same subadvisory agreement terms where an agreement has been assigned because of a change in control of the subadviser. In such circumstances, shareholders would receive notice of such action, including, if applicable, instructions regarding how to obtain the information concerning the new subadviser that normally is provided in a proxy statement.

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Portfolio Management

To the extent that more than one individual is listed for a given fund, the following individuals are jointly and primarily responsible for management of that fund unless otherwise indicated.

Ceredex

		Virtus Ceredex Large-Cap Value Equity Fund				Mills Riddick, CFA (since 1995)
		Virtus Ceredex Mid-Cap Value Equity Fund				Don Wordell, CFA (since 2001)
		Virtus Ceredex Small-Cap Value Equity Fund				Brett Barner, CFA (since 1995)

Brett Barner, CFA. Mr. Barner currently serves as Managing Director of Ceredex. He has worked in investment management since 1985.

Mills Riddick, CFA. Mr. Riddick currently serves as Chief Investment Officer of Ceredex. He has worked in investment management since 1982.

Don Wordell, CFA. Mr. Wordell currently serves as Managing Director of Ceredex. He has worked in investment management since 1996.

Seix

Seix utilizes a team management approach for the funds for which it acts as subadviser. Seix is organized into teams of portfolio managers and credit analysts along sectors and broad investment categories, including government securities, corporate bonds, securitized assets, high yield bonds, high yield loans, emerging market debt, non-U.S. securities and global currencies. The senior portfolio managers are responsible for security selection, portfolio structure and rebalancing, compliance with stated investment objectives, and cash flow monitoring.

		Virtus Seix Core Bond Fund				Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2004) Jonathan Yozzo (since 2015)
		Virtus Seix Corporate Bond Fund				Carlos Catoya (since 2015) James F. Keegan (since 2008) Perry Troisi (since 2004) Jonathan Yozzo (since 2015)
		Virtus Seix Floating Rate High Income Fund				Vincent Flanagan (since 2011) George Goudelias (since 2006) (Lead Portfolio Manager)
		Virtus Seix High Grade Municipal Bond Fund				Ronald Schwartz (since 1994) Dusty Self (since June 2018)
		Virtus Seix High Income Fund				James FitzPatrick (since 2013) Michael Kirkpatrick (since 2011)
		Virtus Seix High Yield Fund				James FitzPatrick (since 2013) Michael Kirkpatrick (since 2007)
		Virtus Seix Investment Grade Tax-Exempt Bond Fund				Ronald Schwartz (since 1992) Dusty Self (since June 2018)
		Virtus Seix Short-Term Bond Fund				Carlos Catoya (since 2015) James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014) Jonathan Yozzo (since 2015)
		Virtus Seix Short-Term Municipal Bond Fund				Ronald Schwartz (since 2011) (Lead Portfolio Manager) Dusty Self (since 2011)
		Virtus Seix Total Return Bond Fund				Seth Antiles (since 2007) Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2002) Jonathan Yozzo (since 2015)

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		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund				James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014)
		Virtus Seix U.S. Mortgage Fund				Seth Antiles (since 2009) Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2007) Jonathan Yozzo (since 2015)
		Virtus Seix Ultra-Short Bond Fund				Carlos Catoya (since 2015) James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014) Jonathan Yozzo (since 2015)

Seth Antiles. Mr. Antiles joined Seix in 2005 and serves as Senior Portfolio Manager and Managing Director. He specializes in global macro strategies. Mr. Antiles is focused on research and oversight for all emerging market and non-dollar investments and is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1994.

Carlos Catoya. Mr. Catoya joined Seix in 2001 and serves as Portfolio Manager for Credit, Managing Director and Head of High Grade Credit Research. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1994.

James FitzPatrick. Mr. FitzPatrick joined Seix in 1997 and serves as Portfolio Manager, Managing Director and Head of Leveraged Finance Trading. He has worked in investment management since 1996.

Vince Flanagan. Mr. Flanagan joined Seix in 2006 and serves as a Portfolio Manager and Senior High Yield Research Analyst focusing on Media and Technology. He has worked in investment management since 1997.

George Goudelias. Mr. Goudelias is a Senior Portfolio Manager and Head of Leveraged Finance at Seix. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has extensive experience covering the telecommunications industry. He has worked in investment management since 1987.

James F. Keegan. Mr. Keegan joined Seix in 2008 and serves as Chief Investment Officer and Chairman of Seix. He has oversight responsibilities for the Seix investment teams and specific portfolio management responsibilities within the Investment Grade team. Mr. Keegan leads the Seix Investment Policy Group, which determines firm-wide asset allocation policy.

Michael Kirkpatrick. Mr. Kirkpatrick joined Seix in 2002 and serves as Senior Portfolio Manager, Managing Director and Senior High Yield Research Analyst primarily covering the Gaming and Finance sectors. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1991.

Michael Rieger. Mr. Rieger joined Seix in 2007 and serves as Senior Portfolio Manager and Managing Director. He focuses on the securitized sector and is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1986.

Ronald Schwartz. Mr. Schwartz joined Seix Investment Advisors’ predecessor firm in 1988 and currently serves as Senior Portfolio Manager and Managing Director and leads the Investment Grade Tax-Exempt group at Seix. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1982.

Dusty Self. Ms. Self is a Senior Portfolio Manager and Managing Director at Seix and provides analysis for all the Investment Grade Tax-Exempt Bond Funds. Ms. Self began her career as a portfolio specialist and then as a performance analyst at Seix Investment Advisors’ predecessor firm. She has worked in investment management since 1992.

Perry Troisi. Mr. Troisi joined Seix in 1999 and serves as Senior Portfolio Manager and Managing Director. He is responsible for the government, government-related, and securitized (residential mortgage-backed security/commercial mortgage-backed security/asset-backed security) asset classes. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1986.

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Jonathan Yozzo. Mr. Yozzo joined Seix in 2000 and serves as Portfolio Manager for Credit, Managing Director and Head of Investment Grade Corporate Trading. He is a member of the Seix Investment Policy Group, which determines firm-wide asset allocation policy. He has worked in investment management since 1991.

Silvant

		Virtus Silvant Large-Cap Growth Stock Fund				Sandeep Bhatia, PhD, CFA (since 2011) Michael A. Sansoterra (since 2007) (Lead Portfolio Manager)
		Virtus Silvant Small-Cap Growth Stock Fund				Sandeep Bhatia, PhD, CFA (since 2011) (Lead Portfolio Manager) Michael A. Sansoterra (since 2007)

Sandeep Bhatia, PhD, CFA. Mr. Bhatia currently serves as Managing Director of Silvant. He has been associated with Silvant or an affiliate since 2007. Prior to joining the Silvant team, Mr. Bhatia served as a Senior Research Analyst for Eagle Asset Management, focusing on the healthcare sector from 2005 to 2007. He has worked in investment management since 2000.

Michael A. Sansoterra. Mr. Sansoterra currently serves as Chief Investment Officer of Silvant. Prior to joining the Silvant team, Mr. Sansoterra served as Large Cap Diversified Growth Portfolio Manager and Senior Equity Analyst of Principal Global Investors from 2003 to 2007. He has worked in investment management since 1996.

WCM

Virtus WCM International Equity Fund

Paul R. Black (since 2015)

Peter J. Hunkel (since 2015)

Michael B. Trigg (since 2015)

Kurt R. Winrich, CFA (since 2015)

Paul R. Black. Mr. Black currently serves as President and co-CEO of WCM. He has worked in investment management since 1983.

Peter J. Hunkel. Mr. Hunkel currently serves as Portfolio Manager and Business Analyst of WCM. He has worked in investment management since 1998.

Michael B. Trigg. Mr. Trigg currently serves as Portfolio Manager and Business Analyst of WCM. He has worked in investment management since 2000.

Kurt R. Winrich, CFA. Mr. Winrich currently serves as Chairman and co-CEO of WCM. He has worked in investment management since 1984.

Zevenbergen

Virtus Zevenbergen Innovative Growth Stock Fund

Nancy Zevenbergen (since 2004)

Brooke de Boutray (since 2004)

Leslie Tubbs (since 2004)

Joseph Dennison (since 2015)

Anthony Zackery (since 2015)

Brooke de Boutray, CFA, CIC. Ms. de Boutray joined Zevenbergen in 1992 and has served as Managing Director, Portfolio Manager and Analyst since 2004. She has worked in investment management since 1981.

Joseph Dennison, CFA. Mr. Dennison joined Zevenbergen in 2011 and serves as Portfolio Manager of Virtus Zevenbergen Innovative Growth Stock Fund. He has worked in investment management since 2011.

Leslie Tubbs, CFA, CIC. Ms. Tubbs joined Zevenbergen in 1994 and has served as Managing Director, Portfolio Manager and Analyst since 2004. She has worked in investment management since 1994.

Anthony Zackery, CFA. Mr. Zackery joined Zevenbergen in 2011 and serves as Portfolio Manager of Virtus Zevenbergen Innovative Growth Stock Fund. He has worked in investment management since 2011.

Nancy Zevenbergen, CFA, CIC. Ms. Zevenbergen has served as President and Chief Investment Officer of Zevenbergen since 1987. She has worked in investment management since 1981.

Please refer to the SAI for additional information about the funds' portfolio managers, including the structure of and method of computing compensation, other accounts they manage and their ownership of shares of the funds.

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Risks Associated with Additional Investment Techniques and Fund Operations

In addition to the Principal Investment Strategies and Risks Related to Principal Investment Strategies, each of the funds listed in the chart below may engage in additional investment techniques that present additional risks to a fund as described below. Those additional investment techniques in which a fund is expected to engage as of the date of this prospectus are indicated in the chart below, although other techniques may be utilized from time to time. The information below the chart describes the additional investment techniques and their risks. Many of the additional investment techniques that a fund may use, as well as other investment techniques that are relied upon to a lesser degree, are more fully described in the SAI.

Risks

Virtus
Ceredex
Large-Cap
Value Equity
Fund

Virtus
Ceredex
Mid-Cap
Value Equity
Fund

Virtus
Ceredex
Small-Cap
Value Equity
Fund

Virtus Seix
Core Bond
Fund

Virtus Seix
Corporate
Bond Fund

Virtus Seix
Floating Rate
High Income
Fund

Virtus Seix
High Grade
Municipal
Bond Fund

Virtus Seix
High Income
Fund

Virtus Seix
High Yield
Fund

Virtus Seix
Investment
Grade
Tax-Exempt
Bond Fund

Convertible Securities

Cybersecurity

Equity Securities

High-Yield/High-Risk Fixed Income Securities (Junk Bonds)

Investment Grade Securities

Leverage

Money Market Instruments

Mortgage-Backed and Asset-Backed Securities

Municipal Securities

Mutual Fund Investing

Operational

Repurchases Agreements

U.S. and Foreign Government Obligations

Variable Rate, Floating Rate and Variable Amount Securities

Risks

Virtus Seix
Short-Term
Bond Fund

Virtus Seix
Short-Term
Municipal
Bond Fund

Virtus Seix
Total Return
Bond Fund

Virtus Seix
U.S.
Government
Securities
Ultra-Short
Bond Fund

Virtus Seix
U.S. Mortgage
Fund

Virtus Seix
Ultra-Short
Bond Fund

Virtus Silvant
Large-Cap
Growth Stock
Fund

Virtus Silvant
Small-Cap
Growth Stock
Fund

Virtus WCM
International
Equity

Virtus
Zevenbergen
Innovative
Growth Stock
Fund

Convertible Securities

Cybersecurity

Equity Securities

High-Yield/High-Risk Fixed Income Securities (Junk Bonds)

Investment Grade Securities

Leverage

Money Market Instruments

Mortgage-Backed and Asset-Backed Securities

Municipal Securities

Mutual Fund Investing

Operational

Repurchases Agreements

U.S. and Foreign Government Obligations

Variable Rate, Floating Rate and Variable Amount Securities

Convertible Securities

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because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Securities convertible into common stocks may have higher yields than common stocks but lower yields than comparable nonconvertible securities.

Cybersecurity

With the increased use of technologies such as the Internet to conduct business, the funds have become potentially more susceptible to operational and information security risks through breaches in cybersecurity. In general, a breach in cybersecurity can result from either a deliberate attack or an unintentional event. Cybersecurity breaches may involve, among other things, infection by computer viruses or other malicious software code or unauthorized access to the digital information systems, networks or devices of the funds or their service providers (including, but not limited to, the funds’ investment adviser, transfer agent, custodian, administrators and other financial intermediaries) through “hacking” or other means, in each case for the purpose of misappropriating assets or sensitive information (including, for example, personal shareholder information), corrupting data or causing operational disruption or failures in the physical infrastructure or operating systems that support the funds. Any such cybersecurity breaches or losses of service may cause the funds to lose proprietary information, suffer data corruption or lose operational capacity, which, in turn, could cause the funds to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures, and/or financial loss. While the funds and their service providers have established business continuity plans and risk management systems designed to prevent or reduce the impact of cybersecurity attacks, there are inherent limitations in such plans and systems due in part to the ever-changing nature of technology and cybersecurity attack tactics, and there is a possibility that certain risks have not been adequately identified or prepared for. Cybersecurity risks may also impact issuers of securities in which the funds invest, which may cause the funds’ investments in such issuers to lose value.

Equity Securities

High-Yield/High-Risk Fixed Income Securities (Junk Bonds)

Investment Grade Securities

A fund may invest in all types of long-term or short-term investment-grade debt obligations of U.S. issuers. In addition to the types of securities mentioned in connection with the fund’s principal investment strategies, the fund may also invest in other bonds, debentures, notes, municipal bonds, equipment lease certificates, equipment trust certificates, conditional sales contracts and commercial paper. Debt instruments with lower credit ratings have a higher risk of default on payment of principal and interest, and securities with longer maturities are subject to greater price fluctuations in response to changes in interest rates. If interest rates rise, the value of debt instruments generally will fall.

Leverage

When a fund makes investments in futures contracts, forward contracts, swaps and other derivative instruments, the futures contracts, forward contracts, swaps and certain other derivatives provide the economic effect of financial leverage by creating additional investment exposure, as well as the potential for greater loss. When a fund uses leverage through activities such as borrowing, entering into short sales, purchasing securities on margin or on a

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when-issued basis, or purchasing derivative instruments in an effort to increase its returns, the fund has the risk of magnified capital losses that occur when losses affect an asset base, enlarged by borrowings or the creation of liabilities, that exceeds the net assets of the fund. The value of the shares of a fund employing leverage will be more volatile and sensitive to market movements. Leverage may also involve the creation of a liability that requires the fund to pay interest.

Money Market Instruments

To meet margin requirements, redemptions or for investment purposes, a fund may hold money market instruments, including full faith and credit obligations of the United States, high quality short-term notes and commercial paper.

Mortgage-Backed and Asset-Backed Securities

Mortgage-backed securities represent interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders. Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card arrangements. These two types of securities share many of the same risks.

Municipal Securities

The amount of public information available about municipal bonds is generally less than that for corporate equities or bonds, and the investment performance of a fund may be more dependent on the analytical abilities of the investment adviser than would be the case for a fund that does not invest in municipal bonds. The secondary market for municipal bonds also tends to be less well-developed and less liquid than many other securities markets, which may adversely affect the fund’s ability to sell its bonds at attractive prices. In addition, municipal obligations can experience downturns in trading activity, and the supply of municipal obligations may exceed the demand in the market. During such periods, the spread can widen between the price at which an obligation can be purchased and the price at which it can be sold. Less liquid obligations can become more difficult to value and be subject to erratic price movements. Economic and other events (whether real or perceived) can reduce the demand for certain investments or for investments generally, which may reduce market prices and cause the value of the fund’s shares to fall. The frequency and magnitude of such changes cannot be predicted. A fund may invest in municipal obligations that do not appear to be related, but in fact depend on the financial rating or support of a single government unit, in which case, events that affect one of the obligations will also affect the others and will impact the fund’s portfolio to a greater degree than if the fund’s investments were not so related. The increased presence of non-traditional participants in the municipal markets may lead to greater volatility in the markets.

Mutual Fund Investing

Through its investments in other mutual funds, a fund is exposed not only to the risks of the underlying funds’ investments but also to certain additional risks. Assets invested in other mutual funds incur a layering of expenses, including operating costs, advisory fees and administrative fees that you, as a shareholder in the fund, indirectly bear. Such fees and expenses may exceed the fees and expenses the fund would have incurred if it invested in the underlying fund’s assets directly. To the extent that the expense ratio of an underlying fund changes, the weighted average operating expenses borne by the fund may increase or decrease. An underlying fund may change its investment objective or policies without the approval of the fund, and the fund might be forced to withdraw its investment from the underlying fund at a time that is unfavorable to the fund. If a fund invests in closed-end funds, it may incur added expenses such as additional management fees and trading costs and additional risks associated with trading at a discount to NAV and use of leverage.

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Operational

An investment in a fund, like any mutual fund, can involve operational risks arising from factors such as processing errors, human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel and errors caused by third-party service providers. The occurrence of any of these failures, errors or breaches could result in a loss of information, regulatory scrutiny, reputational damage or other events, any of which could have a material adverse effect on a fund. While the funds seek to minimize such events through controls and oversight, there may still be failures that could cause losses to a fund.

Repurchase Agreements

A fund may invest in repurchase agreements with commercial banks, brokers and dealers considered by the fund’s subadviser to be creditworthy. Such agreements subject the fund to the risk of default or insolvency of the counterparty.

U.S. and Foreign Government Obligations

Variable Rate, Floating Rate and Variable Amount Securities

Variable rate, floating rate, or variable amount securities are generally short-term, unsecured, fluctuating, interest-bearing notes of private issuers. The absence of an active secondary market with respect to certain such instruments could make it difficult for the fund to dispose of the instrument if the issuer defaulted on its payment obligation or during periods that a fund is not entitled to exercise its demand rights, and the fund could, for these or other reasons, suffer a loss with respect to such instruments.

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Pricing of Fund Shares

How is the Share Price determined?

Each fund calculates a share price for each class of its shares. The share price (net asset value or “NAV”) for each class is based on the net assets of the fund and the number of outstanding shares of that class. In general, each fund calculates a share price for each class by:

•

adding the values of all securities and other assets of the fund;

•

subtracting liabilities; and

•

dividing the result by the total number of outstanding shares of that class.

Assets: Equity securities are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded, or, if no closing price is available, at the last bid price. Shares of other investment companies are valued at such companies’ NAVs. Debt instruments, including restricted securities, are valued based on evaluated quotations received from independent pricing services or from dealers who make markets in such securities. Other assets, such as accrued interest, accrued dividends and cash are also included in determining the fund’s NAV. As required, some securities and assets are valued at fair value as determined in good faith by, or under the direction of, the Board of Trustees.

Liabilities: Accrued liabilities for class-specific expenses (if any), distribution fees, service fees and other liabilities are deducted from the assets of each class. Accrued expenses and liabilities that are not class-specific (such as management fees) are allocated to each class in proportion to each class’s net assets except where an alternative allocation can be more appropriately made.

Net Asset Value (NAV): The liabilities allocated to a class are deducted from the proportionate interest of such class in the assets of the applicable fund. The resulting amount for each class is then divided by the number of shares outstanding of that class to produce each class’s NAV per share.

The NAV per share of each class of each fund is determined as of the close of regular trading (generally 4:00 PM Eastern Time) on days when the New York Stock Exchange (“NYSE”) is open for trading. A fund will not calculate its NAV per share class on days when the NYSE is closed for trading. If a fund (or underlying fund, as applicable) holds securities that are traded on foreign exchanges that trade on weekends or other holidays when the funds do not price their shares, the NAV of the fund’s shares may change on days when shareholders will not be able to purchase or redeem the fund’s shares.

How are securities fair valued?

If market quotations are not readily available or available prices are not reliable, the funds determine a “fair value” for an investment according to policies and procedures approved by the Board of Trustees. The types of assets for which such pricing might be required include: (i) securities whose trading has been suspended; (ii) securities where the trading market is unusually thin or trades have been infrequent; (iii) debt instruments that have recently gone into default and for which there is no current market quotation; (iv) a security whose market price is not available from an independent pricing source and for which otherwise reliable quotes are not available; (v) securities of an issuer that has entered into a restructuring; (vi) a security whose price as provided by any pricing source does not, in the opinion of the adviser/subadviser, reflect the security’s market value; (vii) foreign securities subject to trading collars for which no or limited trading takes place; (viii) securities where the market quotations are not readily available as a result of “significant” events; and (ix) securities whose principal exchange or trading market is closed for an entire business day on which a fund needs to determine its NAV. This list is not inclusive of all situations that may require a security to be fair valued, nor is it intended to be conclusive in determining whether a specific event requires fair valuation.

The value of any portfolio security held by a fund for which market quotations are not readily available shall be determined in good faith and in a manner that assesses the security’s “fair value” on the valuation date (i.e., the amount that the fund might reasonably expect to receive for the security upon its current sale), based on a consideration of all available facts and all available information, including, but not limited to, the following: (i) the fundamental analytical data relating to the investment; (ii) the value of other relevant financial instruments, including derivative securities, traded on other markets or among dealers; (iii) an evaluation of the forces which influence the market in which these securities are purchased and sold (e.g., the existence of merger proposals or tender offers that might affect the value of the security); (iv) the type of the security; (v) the size of the holding; (vi) the initial cost of the security; (vii) trading volumes on markets, exchanges or among broker-dealers; (viii) price quotes from dealers and/or pricing services; (ix)

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values of baskets of securities traded on other markets, exchanges, or among dealers; (x) changes in interest rates; (xi) information obtained from the issuer, analysts, other financial institutions and/or the appropriate stock exchange (for exchange traded securities); (xii) an analysis of the company’s financial statements; (xiii) government (domestic or foreign) actions or pronouncements; (xiv) recent news about the security or issuer; (xv) whether two or more dealers with whom the adviser/subadviser regularly effects trades are willing to purchase or sell the security at comparable prices; and (xvi) other news events or relevant matters.

Certain non-U.S. securities may be fair valued in cases where closing prices are not readily available or are deemed not reflective of readily available market prices. For example, significant events (such as movement in the U.S. securities market, or other regional and local developments) may occur between the time that non-U.S. markets close (where the security is principally traded) and the time that a fund calculates its NAV at the close of regular trading on the New York Stock Exchange (“NYSE”) (generally 4 p.m. Eastern time) that may impact the value of securities traded in these non-U.S. markets. In such cases, the funds fair value non-U.S. securities using an independent pricing service which considers the correlation of the trading patterns of the non-U.S. security to the intraday trading in the U.S. markets for investments such as ADRs, financial futures, ETFs, and certain indexes, as well as prices for similar securities. Because the frequency of significant events is not predictable, fair valuation of certain non-U.S. common stocks may occur on a frequent basis.

The value of a security, as determined using the funds’ fair valuation procedures, may not reflect such security’s market value.

At what price are shares purchased?

All investments received by the funds’ authorized agents in good order prior to the close of regular trading on the NYSE (generally 4:00 PM Eastern Time) will be executed based on that day’s NAV; investments received by the funds’ authorized agent in good order after the close of regular trading on the NYSE will be executed based on the next business day’s NAV. Shares credited to your account from the reinvestment of a fund’s distributions will be in full and fractional shares that are purchased at the closing NAV on the next business day on which the fund’s NAV is calculated following the dividend record date.

Sales Charges

An investor may be required to pay commissions and/or other forms of compensation to a broker for transactions in any share class, which are not reflected in the disclosure in this section.

What are the classes and how do they differ?

Each fund offers multiple classes of shares. Each class of shares has different sales and distribution charges. (See “Fund Fees and Expenses” in each fund’s “Fund Summary,” previously in this prospectus.) For certain classes of shares, the funds have adopted distribution and service plans allowed under Rule 12b-1 of the Investment Company Act of 1940, as amended, that authorize the funds to pay distribution and service fees (“Rule 12b-1 Fees”) for the sale of their shares and for services provided to shareholders.

The Rule 12b-1 Fees paid by each class of the fund currently are as follows (“N/A” indicates that the fund does not offer the referenced share class, whereas “None” indicates that the share class has no applicable fees.):

Fund

Class A

Class C

Class I

Class R

Class R6

Virtus Ceredex Large-Cap Value Equity Fund

0.25 %

1.00 %

None

N/A

None

Virtus Ceredex Mid-Cap Value Equity Fund

0.25 %

1.00 %

None

N/A

None

Virtus Ceredex Small-Cap Value Equity Fund

0.25 %

1.00 %

None

N/A

None

Virtus Seix Core Bond Fund

0.25 %

N/A

None

0.50 %

None

Virtus Seix Corporate Bond Fund

0.25 %

1.00 %

None

N/A

Virtus Seix Floating Rate High Income Fund

0.25 %

1.00 %

None

N/A

None

Virtus Seix High Grade Municipal Bond Fund

0.15 %

N/A

None

N/A

Virtus Seix High Income Fund

0.25 %

N/A

None

0.50 %

None

Virtus Seix High Yield Fund

0.25 %

N/A

None

0.50 %

None

Virtus Seix Investment Grade Tax-Exempt Fund

0.25 %

N/A

None

N/A

Virtus Seix Short-Term Bond Fund

0.20 %

1.00 %

None

N/A

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Fund

Class A

Class C

Class I

Class R

Class R6

Virtus Seix Short-Term Municipal Bond Fund

0.15%

N/A

None

N/A

Virtus Seix Total Return Bond Fund

0.25%

N/A

None

0.50%

None

Virtus Seix U.S. Government Securities Ultra-Short Bond Fund

0.25%

N/A

None

N/A

None

Virtus Seix U.S. Mortgage Fund

0.20%

1.00%

None

N/A

Virtus Seix Ultra-Short Bond Fund

0.25%

N/A

None

N/A

Virtus Silvant Large-Cap Growth Stock Fund

0.25%

1.00%

None

N/A

None

Virtus Silvant Small-Cap Growth Stock Fund

0.25%

1.00%

None

N/A

Virtus WCM International Equity Fund

0.25%

N/A

None

N/A

None

Virtus Zevenbergen Innovative Growth Stock Fund

0.25%

N/A

None

N/A

What arrangement is best for you?

The different classes of shares permit you to choose the method of purchasing shares that is most beneficial to you. In choosing a class of shares, consider the amount of your investment, the length of time you expect to hold the shares, whether you decide to receive distributions in cash or to reinvest them in additional shares, and any other personal circumstances. Depending upon these considerations, the accumulated distribution and service fees and contingent deferred sales charges of one class of shares may be more or less than the initial sales charge and accumulated distribution and service fees of another class of shares bought at the same time. Because distribution and service fees are paid out of a fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

Your financial representative should recommend only those arrangements that are suitable for you based on known information. In certain instances, you may be entitled to a reduction or waiver of sales charges. For instance, you may be entitled to a sales charge discount on Class A Shares if you purchase more than certain breakpoints.

To determine your eligibility for a sales charge discount on Class A Shares, you may aggregate all of your accounts (including joint accounts, retirement accounts such as individual retirement accounts (“IRAs”), non-IRAs, etc.) and those of your spouse, domestic partner, children and minor grandchildren.

The availability of certain sales charge waivers and discounts may depend on whether you purchase your shares directly from the fund or through a financial intermediary. Different intermediaries may impose different sales charges (including partial reduction in or waivers of sales charges) other than those listed in this section. Such intermediary-specific sales charge variations are described in Appendix A to this prospectus, entitled “Intermediary Sales Charges Discounts and Waivers.” Appendix A is incorporated herein by reference and is legally part of this prospectus.

Your financial representative may request that you provide an account statement or other holdings information to determine your eligibility for a breakpoint and/or waiver and to make certain all involved parties have the necessary data. In all instances, it is the purchaser’s responsibility to notify the fund or the purchaser’s financial representative at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, in order to receive these waivers or discounts shareholders will have to purchase fund shares through another intermediary offering such waivers or discounts or directly from the fund if the fund offers such waivers or discounts.

Additional information about the classes of shares offered, sales charges, breakpoints and discounts follows in this section and also may be found in the SAI in the section entitled “How to Buy Shares.” Intermediary-specific sales charge variations are described in Appendix A to this prospectus, entitled “Intermediary Sales Charges Discounts and Waivers.” This information is available free of charge, and in a clear and prominent format, at the Individual Investors section of virtus.com. Please be sure that you fully understand these choices before investing. If you or your financial representative requires additional assistance, you may also contact Virtus Fund Services by calling toll-free 800-243-1574.

Class A Shares. You will not pay any sales charge on purchases of Class A Shares of Virtus Seix U.S. Government Securities Ultra-Short Bond Fund and Virtus Seix Ultra-Short Bond Fund (the “Ultra-Short Bond Funds”) (except to the extent an exchange into an Ultra-Short Bond Fund triggers a contingent deferred sales charge (“CDSC”) on the shares being exchanged for the Ultra-Short Bond Fund shares, as discussed below). If you purchase Class A Shares of other funds in this prospectus, you will pay a sales charge at the time of purchase equal to the following: for Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund, 2.25% of

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the offering price (2.30% of the amount invested); for Virtus Seix Floating Rate High Income Fund, Virtus Seix High Grade Municipal Bond Fund and Virtus Seix Investment Grade Tax-Exempt Bond Fund, 2.75% of the offering price (2.83% of the amount invested); for Virtus Seix Core Bond Fund, Virtus Seix Corporate Bond Fund, Virtus Seix High Income Fund, Virtus Seix High Yield Fund, and Virtus Seix Total Return Bond Fund 3.75% of the offering price (3.90% of the amount invested, and for the other funds, 5.75% of the offering price (6.10% of the amount invested). The sales charge may be reduced or waived under certain conditions. (See “Initial Sales Charge Alternative—Class A Shares” and “Class A Sales Charge Reductions and Waivers” below.) Generally, Class A Shares are not subject to any charges by the fund when redeemed; however, a CDSC may be imposed on certain redemptions (including exchanges into the Ultra-Short Bond Funds) on which a finder’s fee has been paid. For Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 12 months of a finder’s fee being paid; for all other funds (except the Ultra-Short Bond Funds), the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 18 months of a finder’s fee being paid. The Distributor may pay broker-dealers a finder’s fee for eligible Class A Share purchases in excess of $250,000 for Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund and eligible Class A Share purchases in excess of $1 million for all other funds in this prospectus (except the Ultra-Short Bond Funds). No front-end sales load is applied to purchases on which a finder's fee is paid. The 12- or 18-month period begins on the last day of the month preceding the month in which the purchase was made, and shares not subject to a finder’s fee will be deemed to be redeemed first. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares). Class A Shares have lower distribution and service fees (0.15% for Virtus High Grade Municipal Bond Fund, Virtus Seix Investment Grade Tax-Exempt Bond Fund and Virtus Seix Short-Term Municipal Bond Fund; 0.20% for Virtus Seix Short-Term Bond Fund and Virtus Seix U.S. Mortgage Fund; and 0.25% for all other Virtus Mutual Funds) and generally pay higher dividends than Class C Shares. If you transact in Class A Shares through a financial intermediary, your financial intermediary may charge you a fee outside of the fund, such as brokerage commission or an investment advisory fee. You should consult your financial intermediary regarding the different share classes available to you, how their fees and expenses differ, and whether the fees charged by your financial intermediary differ depending upon which share class you choose.

Class C Shares (Virtus Ceredex Large-Cap Value Equity Fund, Virtus Ceredex Mid-Cap Value Equity Fund, Virtus Ceredex Small-Cap Value Equity Fund, Virtus Seix Corporate Bond Fund, Virtus Seix Floating Rate High Income Fund, Virtus Seix Short-Term Bond Fund, Virtus Seix U.S. Mortgage Fund, Virtus Silvant Large-Cap Growth Stock Fund and Virtus Silvant Small-Cap Growth Stock Fund only). If you purchase Class C Shares, you will not pay a sales charge at the time of purchase. If you sell your Class C Shares within the first year after they are purchased, you will pay a deferred sales charge of 1%. (See “Deferred Sales Charge Alternative—Class C Shares” below.) Class C Shares have higher distribution and services fees (1.00%) and pay lower dividends than Class A Shares. Effective January 1, 2019, with certain exceptions, Class C Shares will convert to Class A Shares after ten years, thus reducing future annual expenses. If you transact in Class C Shares through a financial intermediary, your financial intermediary may charge you a fee outside of the fund, such as brokerage commission or an investment advisory fee. You should consult your financial intermediary regarding the different share classes available to you, how their fees and expenses differ, and whether the fees charged by your financial intermediary differ depending upon which share class you choose.

Class I Shares. Class I Shares are offered primarily to clients of financial intermediaries that (i) charge such clients an ongoing fee for advisory, investment, consulting, or similar services; or (ii) have entered into an agreement with the fund's distributor to offer Class I Shares through a no-load network or platform. Such clients may include pension and profit sharing plans, other employee benefit trusts, endowments, foundations and corporations. Class I Shares are also offered to private and institutional clients of, or referred by, the adviser, a subadviser or their affiliates, and to Trustees of the funds and trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus and its affiliates. If you are eligible to purchase and do purchase Class I Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class I Shares. If you transact in Class I Shares through a financial intermediary, your financial intermediary may charge you a fee outside of the fund, such as brokerage commission or an investment advisory fee. You should consult your financial intermediary regarding the different share classes available to you, how their fees and expenses differ, and whether the fees charged by your financial intermediary differ depending upon which share class you choose.

Class R Shares (Virtus Seix Core Bond Fund, Virtus Seix High Income Fund, Virtus Seix High Yield Fund and Virtus Seix Total Return Bond Fund only). Class R Shares are designed to be sold only through various third-party

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intermediaries that offer employer-sponsored defined contribution retirement plans and other retirement plan platforms, including brokers, dealers, banks, insurance companies, retirement plan record-keepers and others. Class R Shares require an agreement with the funds prior to investment. Class R Shares may also be purchased by shareholders of the Virtus Seix Total Return Bond Fund (formerly, the RidgeWorth Seix Total Return Bond Fund) who owned Class C Shares in the Fund on February 12, 2009 and by shareholders of the Virtus Seix Core Bond Fund (formerly, the RidgeWorth Seix Core Bond Fund), the Virtus Seix High Income Fund (formerly, the RidgeWorth Seix High Income Fund), and the Virtus Seix High Yield Fund (formerly, the RidgeWorth Seix High Yield Fund) who owned Class C Shares in the applicable Fund on July 31, 2009. If you are eligible to purchase and do purchase Class R Shares, you will pay no sales charge at any time. Class R Shares have higher distribution and service fees (0.50%) and pay lower dividends than Class A Shares. Class R Shares do not convert to any other class of shares of the funds, so the higher distribution and service fees paid by Class R Shares continue for the life of the account. If you transact in Class R Shares through a financial intermediary, your financial intermediary may charge you a fee outside of the fund, such as brokerage commission or an investment advisory fee. You should consult your financial intermediary regarding the different share classes available to you, how their fees and expenses differ, and whether the fees charged by your financial intermediary differ depending upon which share class you choose.

Class R6 Shares (Virtus Ceredex Large-Cap Value Equity Fund, Virtus Ceredex Mid-Cap Value Equity Fund, Virtus Ceredex Small-Cap Value Equity Fund, Virtus Seix Core Bond Fund, Virtus Seix Floating Rate High Income Fund, Virtus Seix High Income Fund, Virtus Seix High Yield Fund, Virtus Seix Total Return Bond Fund, Virtus Seix U.S. Government Securities Ultra-Short Bond Fund, Virtus Silvant Large-Cap Growth Stock Fund and Virtus WCM International Equity Fund only). Class R6 Shares are offered to the following investors (provided that they do not require or receive any compensation, administrative payments, sub-transfer agency payments or service payments with respect to Class R6 Shares) without a minimum initial investment: (i) qualified retirement plans, including, but not limited to, 401(k) plans, 457 plans, employer sponsored 403(b) plans, defined benefit plans and other accounts or plans whereby Class R6 Shares are held on the books of the fund through plan level or omnibus accounts; (ii) banks and trust companies; (iii) insurance companies; (iv) registered investment companies; and (v) non-qualified deferred compensation plans. Other institutional investors may be permitted to purchase Class R6 Shares subject to the fund’s determination of eligibility and may be subject to a $2,500,000 minimum initial investment requirement. The minimum initial investment amount may be waived subject to the fund’s discretion. If you are eligible to purchase and do purchase Class R6 Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class R6 Shares. If you transact in Class R6 Shares through a financial intermediary, your financial intermediary may charge you a fee outside of the fund, such as brokerage commission or an investment advisory fee. You should consult your financial intermediary regarding the different share classes available to you, how their fees and expenses differ, and whether the fees charged by your financial intermediary differ depending upon which share class you choose.

Initial Sales Charge Alternative—Class A Shares. There is no sales charge applied to purchases of the Ultra-Short Bond Funds. The public offering price of Class A Shares of the other funds in this prospectus is the NAV plus a sales charge that varies depending on the size of your purchase. (See “Class A Shares—Reduced Initial Sales Charges” in the SAI.) Shares purchased based on the automatic reinvestment of income dividends or capital gain distributions are not subject to any sales charges. The sales charge, if any, is divided between your investment dealer and the fund's underwriter, VP Distributors, LLC (“VP Distributors” or the “Distributor”).

Sales Charge you may pay to purchase Class A Shares

Virtus Seix U.S. Government Securities Ultra-Short Bond Fund and Virtus Seix Ultra-Short Bond Fund

There is no sales charge applied to purchases of Virtus Seix U.S. Government Securities Ultra-Short Bond Fund and Virtus Seix Ultra-Short Bond Fund (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares).

Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund

Sales Charge as a percentage of

Amount of Transaction at Offering Price

Offering Price

Net Amount Invested

Under $100,000

2.25 %

2.30 %

$100,000 but under $250,000

1.75

1.78

$250,000 or more

None

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Virtus Seix Floating Rate High Income Fund, Virtus Seix High Grade Municipal Bond Fund and Virtus Seix Investment Grade Tax-Exempt Bond Fund,

	Sales Charge as a percentage of
Amount of Transaction at Offering Price	Offering Price		Amount Invested
Under $50,000		2.75 %		2.83 %
$50,000 but under $100,000		2.25		2.30
$100,000 but under $250,000		1.75		1.78
$250,000 but under $500,000		1.25		1.27
$500,000 but under $1,000,000		1.00		1.00
$1,000,000 or more		None		None

Virtus Seix Core Bond Fund, Virtus Seix Corporate Bond Fund, Virtus Seix High Income Fund, Virtus Seix High Yield Fund and Virtus Seix Total Return Bond Fund

	Sales Charge as a percentage of
Amount of Transaction at Offering Price	Offering Price		Amount Invested
Under $50,000		3.75 %		3.90 %
$50,000 but under $100,000		3.50		3.63
$100,000 but under $250,000		3.25		3.36
$250,000 but under $500,000		2.25		2.30
$500,000 but under $1,000,000		1.75		1.78
$1,000,000 or more		None		None

All Other Funds

	Sales Charge as a percentage of
Amount of Transaction at Offering Price	Offering Price		Net Amount Invested
Under $50,000		5.75 %		6.10 %
$50,000 but under $100,000		4.75		4.99
$100,000 but under $250,000		3.75		3.90
$250,000 but under $500,000		2.50		2.56
$500,000 but under $1,000,000		2.00		2.04
$1,000,000 or more		None		None

Class A Sales Charge Reductions and Waivers

Investors may qualify for reduced or no initial (front-end) sales charges, as shown in the table above, through utilization of Combination Purchase Privilege, Letter of Intent, Right of Accumulation, Purchase by Associations or the Account Reinstatement Privilege. These programs are summarized below and are described in greater detail in the SAI. These reductions and waivers do not apply to any CDSC that may be applied to certain Class A Share redemptions.

Combination Purchase Privilege. Your purchase of any class of shares of these funds or any other Virtus Mutual Fund, (other than Class A Shares of the Ultra-Short Bond Funds) if made at the same time by the same person, will be added together with any existing Virtus Mutual Fund account values to determine whether the combined sum entitles you to an immediate reduction in sales charges. A “person” is defined in this and the following sections as either: (a) any individual, his or her spouse or domestic partner, children and minor grandchildren purchasing shares for his, her or their own account (including an IRA account) including his, her or their own sole proprietorship or trust where any of the above is a named beneficiary; (b) a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary account (even though more than one beneficiary may exist); (c) multiple accounts (up to 200) under a qualified employee benefit plan or administered by a third party administrator; or (d) trust companies, bank trust departments, registered investment advisers, and similar entities placing orders or providing administrative services with respect to accounts over which they exercise discretionary investment authority and which are held in a fiduciary, agency, custodial or similar capacity, provided all shares are held of record in the name, or nominee name, of the entity placing the order.

Letter of Intent. If you sign a Letter of Intent, your purchase of any class of shares of these funds or any other Virtus Mutual Fund, (other than Class A Shares of the Ultra-Short Bond Funds) if made by the same person within a 13-month

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period, will be added together to determine whether you are entitled to an immediate reduction in sales charges. Sales charges are reduced based on the overall amount you indicate that you will buy under the Letter of Intent. The Letter of Intent is a mutually non-binding arrangement between you and Virtus Mutual Funds. Shares worth 5% of the Letter of Intent amount will be held in escrow (while remaining registered in your name) to secure payment of the higher sales charges applicable to the shares actually purchased in the event the full intended amount is not purchased.

Right of Accumulation. The value of your account(s) in any class of shares of these funds or any other Virtus Mutual Fund, (other than Class A Shares of the Ultra-Short Bond Funds) if made over time by the same person, may be added together at the time of each purchase to determine whether the combined sum entitles you to a prospective reduction in sales charges. You must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.

Gifting of Shares. If you make a gift of shares of a Virtus Mutual Fund, upon your request you may combine purchases, if made at the same time, of any class of shares of these funds or any other Virtus Mutual Fund at the sales charge discount allowed for the combined purchase. The receiver of the gift may also be entitled to a prospective reduction in sales charges in accordance with the funds’ right of accumulation or other provisions. You or the receiver of the gift must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.

Purchase by Associations. Certain groups or associations may be treated as a “person” and qualify for reduced Class A Share sales charges. The group or association must: (1) have been in existence for at least six months; (2) have a legitimate purpose other than to purchase mutual fund shares at a reduced sales charge; (3) work through an investment dealer; and (4) not be a group whose sole reason for existing is to consist of members who are credit card holders of a particular company, policyholders of an insurance company, customers of a bank or a broker-dealer or clients of an investment adviser.

Account Reinstatement Privilege. Subject to the funds’ policies and procedures regarding market timing, for 180 days after you sell your Class A Shares on which you previously paid a sales charge, you may purchase Class A Shares of any Virtus Mutual Fund at NAV, with no sales charge, by reinvesting all or part of your proceeds, but not more.

Sales at Net Asset Value. In addition to the programs summarized above, the funds may sell their Class A Shares at NAV without an initial sales charge to certain types of accounts or account holders, as described below.

If you fall within any one of the following categories, you will not have to pay a sales charge on your purchase of Class A Shares, provided that such purchase is made upon the written assurance of the purchaser that the purchase is made for investment purposes and that the shares so acquired will not be resold except to the Fund:

(1) Trustee, director or officer of any Virtus Mutual Fund, or any other mutual fund advised, subadvised or distributed by the Adviser, Distributor or any of their corporate affiliates;

(2) Any director or officer, or any full-time employee or sales representative (for at least 90 days), of the applicable Fund’s Adviser, subadviser or Distributor;

(3) Any private client of an Adviser or subadviser to any Virtus Mutual Fund;

(4) Registered representatives and employees of securities dealers with whom the Distributor has sales agreements;

(5) Any qualified retirement plan exclusively for persons described above;

(6) Any officer, director or employee of a corporate affiliate of the Adviser, a subadviser or the Distributor;

(7) Any spouse or domestic partner, child, parent, grandparent, brother or sister of any person named in (1), (2), (4) or (6) above;

(8) Employee benefit plans for employees of the Adviser, Distributor and/or their corporate affiliates;

(9) Any employee or agent who retires from the Distributor and/or their corporate affiliates or from PNX, as long as, with respect to PNX employees or agents, such individual was employed by PNX prior to December 31, 2008;

(10) Any Virtus direct account held in the name of a qualified employee benefit plan, endowment fund or foundation if, on the date of the initial investment, the plan, fund or foundation has assets of $10,000,000 or more or at least 100 eligible employees;

(11) Any person with a direct rollover transfer of shares from an established Virtus Mutual Fund or Virtus qualified plan;

(12) Any state, county, city, department, authority or similar agency prohibited by law from paying a sales charge;

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(13) Any unallocated account held by a third party administrator, registered investment adviser, trust company, or bank trust department which exercises discretionary authority and holds the account in a fiduciary, agency, custodial or similar capacity, if in the aggregate such accounts held by such entity equal or exceed $1,000,000;

(14) Any deferred compensation plan established for the benefit of any trustee or director of Virtus, any Virtus Mutual Fund, or any open-or closed-end fund advised, subadvised or distributed by the Adviser, the Distributor or any of their corporate affiliates.

If you fall within any one of the following categories, you also will not have to pay a sales charge on your purchase of Class A Shares:

(15) Individuals purchasing through an account with an unaffiliated brokerage firm having an agreement with the Distributor to waive sales charges for its clients (see Appendix A to this prospectus for a description of broker-dealers offering various sales load waivers);

(16) Purchasers of Class A Shares bought through investment advisers and financial planners who charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of their clients;

(17) Retirement plans and deferred compensation plans and trusts used to fund those plans (including, for example, certain plans qualified or created under Sections 401(a), 403(b) or 457 of the Internal Revenue Code (the "Code")), and “rabbi trusts” that buy shares for their own accounts, in each case if those purchases are made through a broker or agent or other financial intermediary that has made special arrangements with the Distributor for such purchases; or

(18) Clients of investment advisors or financial planners who buy shares for their own accounts but only if their accounts are linked to a master account of their investment advisor or financial planner on the books and records of the broker, agent or financial intermediary with which the Distributor has made such special arrangements. Each of the investors described in (15) through (18) may be charged a fee by the broker, agent or financial intermediary for purchasing shares.

CDSC you may pay on Class A Shares (except the Ultra-Short Bond Funds)

Investors buying Class A Shares on which a finder’s fee has been paid may incur a CDSC if they redeem their shares or exchange their shares for shares of the Ultra-Short Bond Funds. For Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions (including exchanges into the Ultra-Short Bond Funds) made within 12 months of a finder’s fee being paid; for all other funds in this prospectus (except the Ultra-Short Bond Funds), the CDSC may be imposed on redemptions (including exchanges into the Ultra-Short Bond Funds) made within 18 months of a finder’s fee being paid. For Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds in this prospectus (except the Ultra-Short Bond Funds), the CDSC is 1.00%. The 12- or 18-month period begins on the last day of the month preceding the month in which the purchase was made, and shares not subject to a finder’s fee will be deemed to be redeemed first. The CDSC will be multiplied by the then current market value or the initial cost of the shares being redeemed, whichever is less. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares).

Deferred Sales Charge Alternative—Class C Shares

Class C Shares are purchased without an initial sales charge; however, shares sold within one year of purchase are subject to a CDSC of 1.00%. The sales charge will be multiplied by the then-current market value or the initial cost of the shares being redeemed, whichever is less. No sales charge will be imposed on increases in NAV or on shares purchased through the reinvestment of income dividends or capital gain distributions. To minimize the sales charge, shares not subject to any charge will be redeemed first, followed by shares held the longest. The date of purchase will be used to calculate the number of shares owned and time period held.

Effective January 1, 2019, with certain exceptions, Class C Shares, and any reinvested dividends and other distributions paid on such shares, will automatically convert to Class A Shares after 10 years. However, for investors invested in Class C Shares through a financial intermediary or recordkeeper, it is the responsibility of the financial intermediary or recordkeeper to ensure that the investor is credited with the proper holding period for the shares redeemed. The automatic conversion of Class C Shares to Class A Shares shall not apply to shares held through intermediaries or recordkeepers that do not track the length of time that a participant has held such shares or that are not otherwise able to operationally support the automatic conversion feature.

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additional information. Class C Shares that have been held directly with the fund, and not through a financial intermediary, for fewer than 10 years may be exchanged for Class A Shares at the fund’s or transfer agent’s discretion if (i) the Class C Shares are not subject to a CDSC, and (ii) a commission was not paid on the sale of such Class C Shares.

All conversions and exchanges from Class C Shares to Class A Shares will be on the basis of the relative NAVs per share, without the imposition of any sales load, fee or other charge. Automatic conversions of Class C shares to Class A shares will generally be processed monthly on or about the 10th day of the month, although for investors invested in Class C Shares through a financial intermediary or recordkeeper, it is the responsibility of the financial intermediary or recordkeeper to determine the timing of the conversions. As of the date of this Prospectus, conversions and exchanges from Class C Shares to Class A Shares of the same fund are not expected to be considered taxable events for Federal income tax purposes. Shareholders should consult their tax advisors regarding their own tax considerations.

Deferred Sales Charge you may pay to sell Class C Shares

Year			1						2+
CDSC					1 %						0 %

Class A and Class C CDSC Reductions and Waivers

The CDSC is waived on the redemption (sale) of Class A Shares and Class C Shares if the redemption is made:

(a)

within one year of death;

(i) of the sole shareholder on an individual account,

(ii) of a joint tenant where the surviving joint tenant is the deceased’s spouse or domestic partner,

(iii) of the beneficiary of a Uniform Gifts to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial account, or

(iv) of the “grantor” on a trust account;

(b)

within one year of disability, as defined in Code Section 72(m)(7);

(c)

as a mandatory distribution upon reaching age 70½ under certain retirement plans qualified under Code Sections 401, 408 or 403(b) or resulting from the tax-free return of an excess contribution to an IRA;

(d)

by 401(k) plans using an approved participant tracking system for participant hardships, death, disability or normal retirement, and loans which are subsequently repaid;

(e)

based on the exercise of exchange privileges among Class A Shares and Class C Shares of these funds or any of the Virtus Mutual Funds;

(f)

based on any direct rollover transfer of shares from an established Virtus Mutual Fund qualified plan into a Virtus Mutual Fund IRA by participants terminating from the qualified plan; and

(g)

based on the systematic withdrawal program, provided such withdrawals do not exceed more than 1% monthly or 3% quarterly of the aggregate net investments. (See “Systematic Withdrawal Program” in this SAI for additional information about these restrictions.)

If, as described in condition (a) above, an account is transferred to an account registered in the name of a deceased’s estate, the CDSC will be waived on any redemption from the estate account occurring within one year of the death.

The availability of certain sales charge waivers and discounts may depend on whether you purchase your shares through a financial intermediary offering them. Different intermediaries may impose different sales charges (including partial reduction in or waivers of sales charges) other than those listed in this section, provided that they do not exceed the maximum sales charge listed. Such intermediary-specific sales charge variations are described in Appendix A to this prospectus, entitled “Intermediary Sales Charge Discounts and Waivers.” Appendix A is incorporated herein by reference and is legally part of this prospectus.

Compensation to Dealers

Class A Shares, Class C Shares and Class I Shares Only

Dealers with whom the Distributor has entered into sales agreements receive a discount or commission on Class A Shares as described below.

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Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund

Amount of Transaction at Offering Price

Sales Charge as a
Percentage of Offering
Price

Sales Charge as a
Percentage of Amount
Invested

Dealer Discount as a
Percentage of Offering
Price

Under $100,000

2.25 %

2.30 %

2.00 %

$100,000 but under $250,000

1.75

1.78

1.50

$250,000 or more

None

Virtus Seix Floating Rate High Income Fund, Virtus Seix High Grade Municipal Bond Fund and Virtus Seix Investment Grade Tax-Exempt Bond Fund

Amount of Transaction at Offering Price	Sales Charge as a Percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		2.75 %		2.83 %		2.25 %
$50,000 but under $100,000		2.25		2.30		2.00
$100,000 but under $250,000		1.75		1.78		1.50
$250,000 but under $500,000		1.25		1.27		1.00
$500,000 but under $1,000,000		1.00		1.01		1.00
$1,000,000 or more		None		None		None

Virtus Seix Core Bond Fund, Virtus Seix Corporate Bond Fund, Virtus Seix High Income Fund, Virtus Seix High Yield Fund and Virtus Seix Total Return Bond Fund

Amount of Transaction at Offering Price	Sales Charge as a Percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		3.75 %		3.90 %		3.25 %
$50,000 but under $100,000		3.50		3.63		3.00
$100,000 but under $250,000		3.25		3.36		2.75
$250,000 but under $500,000		2.25		2.30		2.00
$500,000 but under $1,000,000		1.75		1.78		1.50
$1,000,000 or more		None		None		None

All Other Funds

Amount of Transaction at Offering Price	Sales Charge as a Percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		5.75 %		6.10 %		5.00 %
$50,000 but under $100,000		4.75		4.99		4.25
$100,000 but under $250,000		3.75		3.90		3.25
$250,000 but under $500,000		2.75		2.83		2.25
$500,000 but under $1,000,000		2.00		2.04		1.75
$1,000,000 or more		None		None		None

With respect to Class C Shares, the Distributor intends to pay investment dealers a sales commission of 1% of the sale price of Class C Shares sold by such dealers. Your broker, dealer or financial advisor may also charge you additional commissions or fees for their services in selling shares to you provided they notify the Distributor of their intention to do so.

Dealers and other entities that enter into special arrangements with the Distributor or the funds’ transfer agent, Virtus Fund Services, LLC (the “Transfer Agent”), may receive compensation for the sale and promotion of shares of these funds. Such fees are in addition to the sales commissions referenced above and may be based upon the amount of sales of fund shares by a dealer; the provision of assistance in marketing of fund shares; access to sales personnel and information dissemination services; and other criteria as established by the Distributor. Depending on the nature of the services, these fees may be paid either from the funds through distribution fees, service fees or, in some cases, the Distributor may pay certain fees from its own profits and resources.

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Dealers and other entities that enter into special arrangements with the Distributor or the Transfer Agent may receive compensation from or on behalf of the funds for providing certain recordkeeping and related services to the funds or their shareholders. These fees may also be referred to as shareholder accounting fees, administrative services fees, sub-transfer agent fees or networking fees. They are not for the sale, promotion or marketing of fund shares.

From its own profits and resources, the Distributor may, from time to time, make payments to qualified wholesalers, registered financial institutions and third party marketers for marketing support services and/or retention of assets. These payments are sometimes referred to as “revenue sharing.” Among others, the Distributor has agreed to make such payments for marketing support services to AXA Advisors, LLC. Additionally, for Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund, the Distributor may pay broker-dealers a finder’s fee in an amount equal to 0.50% of eligible Class A Share purchases from $250,000 to $3,000,000 and 0.25% on amounts greater than $3,000,000. For all other Virtus fixed income funds (except the Ultra-Short Bond Funds), the Distributor may pay broker-dealers a finder’s fee in an amount equal to 0.50% of eligible Class A Share purchases from $1,000,000 to $3,000,000 and 0.25% on amounts greater than $3,000,000. For all other Virtus Mutual Funds in this prospectus (except the Ultra-Short Bond Funds), the Distributor may pay broker-dealers a finder’s fee of 1.00% on amounts from $1,000,000 to $3,000,000, 0.50% on amounts of $3,000,001 to $10,000,000, and 0.25% on amounts greater than $10,000,000. Purchases of Class A Shares by an account in the name of a qualified employee benefit plan are eligible for a finder’s fee only if such plan has at least 100 eligible employees. A CDSC may be imposed on certain redemptions (including exchanges into the Ultra-Short Bond Funds) of such Class A investments. For Virtus Seix Short-Term Bond Fund, Virtus Seix Short-Term Municipal Bond Fund and Virtus Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions within 12 months of a finder’s fee being paid; for all other funds in this prospectus to which a CDSC applies, the CDSC may be imposed on redemptions within 18 months of a finder’s fee being paid. For Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds in this prospectus (except the Ultra-Short Bond Funds), the CDSC is 1.00%. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares). For purposes of determining the applicability of the CDSC, the 12- or 18-month period begins on the last day of the month preceding the month in which the purchase was made. The Distributor will also pay broker-dealers a service fee of up to 0.25% beginning in the thirteenth month following purchase of Class A Shares on which a finder’s fee has been paid. (For the exact rate for your fund(s), please refer to the chart in the section of this prospectus entitled “Sales Charges” under “What are the classes and how do they differ?”) VP Distributors reserves the right to discontinue or alter such fee payment plans at any time.

From its own resources or pursuant to the distribution and shareholder servicing plans, and subject to the dealers’ prior approval, the Distributor may provide additional compensation to registered representatives of dealers in the form of travel expenses, meals, and lodging associated with training and educational meetings sponsored by the Distributor. The Distributor may also provide gifts amounting in value to less than $100, and occasional meals or entertainment, to registered representatives of dealers. Any such travel expenses, meals, lodging, gifts or entertainment paid will not be preconditioned upon the registered representatives’ or dealers’ achievement of a sales target. The Distributor may, from time to time, reallow the entire portion of the sales charge on Class A Shares which it normally retains to individual selling dealers. However, such additional reallowance generally will be made only when the selling dealer commits to substantial marketing support such as internal wholesaling through dedicated personnel, internal communications and mass mailings.

The Distributor has also agreed to pay fees to certain distributors for preferred marketing opportunities. These arrangements may be viewed as creating a conflict of interest between these distributors and investors. Investors should make due inquiry of their selling agents to ensure that investors are receiving the requisite point of sale disclosures and suitable recommendations free of any influence by reason of these arrangements.

The categories of payments the Distributor and/or the Transfer Agent may make to other parties are not mutually exclusive, and such parties may receive payments under more than one or all categories. These payments could be significant to a party receiving them, creating a conflict of interest for such party in making investment recommendations to investors. Investors should make due inquiry of any party recommending the funds for purchase to ensure that such investors are receiving the requisite point of sale disclosures and suitable recommendations free of any influence by reason of these arrangements.

A document containing information about sales charges, including breakpoint (volume) discounts, is available free of charge on the Internet at virtus.com . In the Individual Investors section, go to the tab “Investors Knowledge Base” and click on the link for Breakpoint (Volume) Discounts.

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Class R6 Shares Only

Your Account

Opening an Account

Class A Shares, Class C Shares and Class I Shares Only

Your financial advisor can assist you with your initial purchase as well as all phases of your investment program. If you are opening an account by yourself, please follow the instructions outlined below.

The funds have established the following preferred methods of payment for fund shares:

•

Checks drawn on an account in the name of the investor and made payable to Virtus Mutual Funds;

•

Checks drawn on an account in the name of the investor’s company or employer and made payable to Virtus Mutual Funds; or

•

Wire transfers or Automated Clearing House (“ACH”) transfers from an account in the name of the investor, or the investor’s company or employer.

Payment in other forms may be accepted at the discretion of the funds; however, the funds generally do not accept such other forms of payment as cash equivalents (such as traveler’s checks, cashier’s checks, money orders or bank drafts), starter checks, credit card convenience checks, or certain third party checks. Please specify the name(s) of the fund or funds in which you would like to invest on the check or transfer instructions.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. Accordingly, when you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may check the information you provide against publicly available databases, information obtained from consumer reporting agencies, other financial institutions or other sources. If, after reasonable effort, we cannot verify your identity, we reserve the right to close the account and redeem the shares at the NAV next calculated after the decision is made by us to close the account.

Step 1.

Your first choice will be the initial amount you intend to invest in each fund.

Minimum initial investments applicable to Class A and Class C Shares:

•

$100 for individual retirement accounts (“IRAs”), accounts that use the systematic exchange privilege, or accounts that use the Systematic Purchase program. (See Investor Services and Other Information for additional details.)

•

There is no initial dollar requirement for defined contribution plans, asset-based fee programs, profit-sharing plans, or employee benefit plans. There is also no minimum for reinvesting dividends and capital gains into another account.

•

$2,500 for all other accounts.

Minimum additional investments applicable to Class A and Class C Shares:

•

$100 for any account.

•

There is no minimum additional investment requirement for defined contribution plans, asset-based fee programs, profit-sharing plans, or employee benefit plans. There is also no minimum additional investment requirement for reinvesting dividends and capital gains into another account.

Minimum initial investments applicable to Class I Shares:

•

$100,000 for any account for qualified investors. (Call Virtus Fund Services at 800-243-1574 for additional details.)

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There is no minimum additional investment requirement applicable to Class I Shares.

Step 2.

Your second choice will be what class of shares to buy. Each share class, except Class I Shares and Class R6 Shares, has different sales and distribution charges. Because all future investments in your account will be made in the share class you choose when you open your account, you should make your decision carefully. Your financial advisor can help you pick the share class that makes the most sense for your situation.

Step 3.

Your next choice will be how you want to receive any dividends and capital gain distributions. Your options are:

•

Receive both dividends and capital gain distributions in additional shares;

•

Receive dividends in additional shares and capital gain distributions in cash;

•

Receive dividends in cash and capital gain distributions in additional shares; or

•

Receive both dividends and capital gain distributions in cash.

No interest will be paid on uncashed distribution checks.

Class R Shares Only

If you are participating in an employer-sponsored defined contribution retirement plan or other retirement plan platform, your financial institution or financial intermediary will provide you with the information you need to open an account and buy Class R Shares.

Class R6 Shares Only

If you are investing through a qualified retirement plan, bank or trust company, insurance company, registered investment company or non-qualified deferred compensation plan, your financial institution or financial intermediary will provide you with the information you need to open an account and buy Class R6 Shares. If you are a qualified institutional investor, please refer to the instructions above for Class A Shares, Class C Shares and Class I Shares, except for the application of any minimum initial and/or additional purchase requirements.

All Share Classes

The funds reserve the right to refuse any purchase order for any reason. The fund will notify the investor of any such rejection in accordance with industry and regulatory standards, which is generally within three business days.

How to Buy Shares

Class A Shares, Class C Shares and Class I Shares Only

						To Open An Account
		Through a financial advisor				Contact your advisor. Some advisors may charge a fee and may set different minimum investments or limitations on buying shares.
		Through the mail				Complete a new account application and send it with a check payable to the fund. Mail them to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.
		Through express delivery				Complete a new account application and send it with a check payable to the fund. Send them to: Virtus Mutual Funds, 4400 Computer Drive, Westborough, MA 01581-1722.
		By Federal Funds wire				Call us at 800-243-1574 (press 1, then 0).
		By Systematic Purchase				Complete the appropriate section on the application and send it with your initial investment payable to the fund. Mail them to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.
		By telephone exchange				Call us at 800-243-1574 (press 1, then 0).

Class R Shares Only

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Class R6 Shares Only

If you are investing through a qualified retirement plan, bank or trust company, insurance company, registered investment company or non-qualified deferred compensation plan, your financial institution or financial intermediary will provide you with the information you need to buy Class R6 Shares. If you are a qualified institutional investor, please refer to the instructions above for Class A Shares, Class C Shares and Class I Shares.

All Share Classes

The price at which a purchase is effected is based on the NAV next determined after receipt of a purchase order in good order by the funds’ Transfer Agent or an authorized agent. A purchase order is generally in “good order” if an acceptable form of payment accompanies the purchase order and the order includes the appropriate application(s) and/or other form(s) and any supporting legal documentation required by the fund's Transfer Agent or an authorized agent, each in legible form. However, the funds, their Transfer Agent or other authorized agent may consider a request to be not in good order even after receiving all required information if any of them suspects that the request is fraudulent or otherwise not valid.

Each fund reserves the right to refuse any order that may disrupt the efficient management of that fund.

How to Sell Shares

Class A Shares, Class C Shares and Class I Shares Only

						To Sell Shares
		Through a financial advisor				Contact your advisor. Some advisors may charge a fee and may set different minimums on redemptions of accounts.
		Through the mail				Send a letter of instruction to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. Be sure to include the registered owner’s name, fund and account number and number of shares or dollar value you wish to sell.
		Through express delivery				Send a letter of instruction to: Virtus Mutual Funds, 4400 Computer Drive, Westborough, MA 01581-1722. Be sure to include the registered owner’s name, fund and account number and number of shares or dollar value you wish to sell.
		By telephone				For sales up to $50,000, requests can be made by calling 800-243-1574.
		By telephone exchange				Call us at 800-243-1574 (press 1, then 0).
		By check (Ultra-Short Bond Funds only)				If you selected the checkwriting feature, you may write checks for amounts of $250 or more. Checks may not be used to close accounts.

Class R Shares Only

Class R6 Shares Only

If you are investing through a qualified retirement plan, bank or trust company, insurance company, registered investment company or non-qualified deferred compensation plan, your financial institution or financial intermediary will provide you with the information you need to sell Class R6 Shares. If you are a qualified institutional investor, please refer to the instructions above for Class A Shares, Class C Shares and Class I Shares.

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All Share Classes

You have the right to have the funds buy back shares at the NAV next determined after receipt of a redemption request in good order by the funds' Transfer Agent or an authorized agent. In the case of a Class C Share redemption, and certain Class A Share redemptions, you will be subject to the applicable contingent deferred sales charge, if any, for such shares. Subject to certain restrictions, shares may be redeemed by telephone or in writing. In addition, shares may be sold through securities dealers, brokers or agents who may charge customary commissions or fees for their services. The funds do not charge any redemption fees.

Regardless of the method used by the funds for payment (e.g., check, wire or electronic transfer (ACH)), payment for shares redeemed will normally be sent one business day after the request is received in good order by the transfer agent, or one business day after the trade has settled for trades submitted through the NSCC, but will in any case be made within seven days after tender. The funds expect to meet redemption requests, both under normal circumstances and during periods of stressed market conditions, by using cash, by selling portfolio assets to generate cash, or by borrowing funds under a line of credit, subject to availability of capacity in such line of credit. The right to redeem shares may be suspended and payment postponed during periods when the NYSE is closed, other than customary weekend and holiday closings, or if permitted by rules of the SEC, during periods when trading on the NYSE is restricted or during any emergency which makes it impracticable for a fund to dispose of its securities or to determine fairly the value of its net assets or during any other period permitted by order of the SEC for the protection of investors. Furthermore, the Transfer Agent will not mail redemption proceeds until checks received for shares purchased have cleared, which may take up to 15 days.

Things You Should Know When Selling Shares

You may realize a taxable gain or loss (for federal income tax purposes) if you redeem or exchange shares of the funds.

Class A Shares, Class C Shares, Class I Shares

Redemption requests will not be honored until all required documents, in proper form, have been received. Additional documentation will be required for redemptions by organizations, fiduciaries, or retirement plans, or if a redemption is requested by anyone but the shareholder(s) of record. Even after all required documents have been received, a redemption request may not be considered in good order by the funds, their Transfer Agent or other authorized agents if any of them suspects that the request is fraudulent or otherwise not valid. To avoid delay in redemption or transfer, shareholders having questions about specific requirements should contact the funds’ Transfer Agent at 800-243-1574.

Transfers between broker-dealer “street” accounts are governed by the accepting broker-dealer. Questions regarding this type of transfer should be directed to your financial advisor.

As stated in the applicable account applications, accounts associated with certain types of retirement plans and individual retirement accounts may incur fees payable to the Transfer Agent in the event of redeeming an account in full. Shareholders with questions about this should contact the funds’ Transfer Agent at 800-243-1574.

Redemptions by Mail

➔ If you are selling shares held individually, jointly, or as custodian under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act:

Send a clear letter of instruction if both of these apply:

•

The proceeds do not exceed $50,000.

•

The proceeds are payable to the registered owner at the address on record.

Send a clear letter of instructions with a signature guarantee when any of these apply:

•

You are selling more than $50,000 worth of shares.

•

The name or address on the account has changed within the last 30 days.

•

You want the proceeds to go to a different name or address than on the account.

➔ If you are selling shares held in a corporate or fiduciary account, please contact the funds’ Transfer Agent at 800-243-1574.

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The signature guarantee, if required, must be a STAMP 2000 Medallion guarantee made by an eligible guarantor institution as defined by the funds’ Transfer Agent in accordance with its signature guarantee procedures. Guarantees using previous technology medallions will not be accepted. As of the date of this prospectus, the Transfer Agent’s signature guarantee procedures generally permit guarantees by banks, broker-dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations.

Selling Shares by Telephone

The Transfer Agent will use reasonable procedures to confirm that telephone instructions are genuine. Address and bank account information are verified, redemption instructions are taped, and all redemptions are confirmed in writing.

The individual investor bears the risk from instructions given by an unauthorized third party that the Transfer Agent reasonably believed to be genuine. The funds, their Transfer Agent and their other authorized agents will not be liable for any loss, liability, cost or expense resulting from acting upon telephone instructions that are reasonably believed to be genuine.

The Transfer Agent may modify or terminate the telephone redemption privilege at any time with 60 days’ notice to shareholders, except for instances of disruptive trading or market timing; in such cases, the telephone redemption privilege may be suspended immediately, followed by written notice. (See “Disruptive Trading and Market Timing” in this prospectus.)

During times of drastic economic or market changes, telephone redemptions may be difficult to make or temporarily suspended; however, shareholders would be able to make redemptions through other methods described above.

Class R Shares Only

Class R6 Shares Only

If you are investing through a qualified retirement plan, bank or trust company, insurance company, registered investment company or non-qualified deferred compensation plan, your financial institution or financial intermediary will provide you with the information you need to know when selling Class R6 Shares. If you are a qualified institutional investor, please refer to the instructions above for Class A Shares, Class C Shares and Class I Shares.

All Share Classes

Payment of Redemptions In Kind

Each fund reserves the right to pay large redemptions “in kind” (i.e., in securities owned by the fund) rather than in cash. Large redemptions are those that exceed $250,000 or 1% of the fund’s net assets, whichever is less, over any 90-day period. Additional documentation will be required for redemptions by organizations, fiduciaries, or retirement plans, or if a redemption is requested by anyone but the shareholder(s) of record. Investors who are paid redemption proceeds in kind will receive a pro rata share of the fund’s portfolio, which may include illiquid securities. Any securities received remain at market risk until sold. Brokerage commissions and capital gains may be incurred when converting securities received into cash. On any illiquid securities received, the investor will bear the risk of not being able to sell the securities at all.

Account Policies

Account Reinstatement Privilege

Subject to the fund’s policies and procedures regarding market timing, for 180 days after you sell your Class A Shares on which you previously paid a sales charge, you may purchase Class A Shares of any Virtus Mutual Fund at NAV, with no sales charge, by reinvesting all or part of your proceeds, but not more. Send your written request to Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. You can call Virtus Mutual Funds at 800-243-1574 for more information.

Please remember, a redemption and reinvestment are considered to be a sale and purchase for tax-reporting purposes.

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Annual Fee on Small Accounts

To help offset the costs associated with maintaining small accounts, the funds reserve the right to assess an annual $25 small account fee on fund accounts with a balance below $2,500. The small account fee may be waived in certain circumstances, such as for accounts that have elected electronic delivery of statements/regulatory documents and accounts owned by shareholders having multiple accounts with a combined value of over $25,000. The small account fee does not apply to accounts held through a financial intermediary.

The small account fee will be collected through the automatic sale of shares in your account. We will send you written notice before we charge the $25 fee so that you may increase your account balance above the minimum, sign up for electronic delivery, consolidate your accounts or liquidate your account. You may take these actions at any time by contacting your investment professional or the Transfer Agent.

Redemption of Small Accounts

Due to the high cost of maintaining small accounts, if your redemption activity causes your account balance to fall below $200, you may receive a notice requesting you to bring the balance up to $200 within 60 days. If you do not, the shares in the account will be sold at NAV, and a check will be mailed to the address of record. Any applicable sales charges will be deducted.

Distributions of Small Amounts

Distributions in amounts less than $10 will automatically be reinvested in additional shares of the fund.

Uncashed Checks

If any correspondence sent by a fund is returned by the postal or other delivery service as “undeliverable,” your dividends or any other distribution may be automatically reinvested in the fund.

If your distribution check is not cashed within six months, the distribution may be reinvested in the fund at the current NAV. You will not receive any interest on uncashed distribution or redemption checks. This provision may not apply to certain retirement or qualified accounts.

Inactive Accounts

As required by the laws of certain states, if no activity occurs in an account within the time period specified by your state law, Virtus may be required to transfer the assets to your state under the state's abandoned property law.

Exchange Privileges

You should read the prospectus of the Virtus Mutual Fund(s) into which you want to make an exchange before deciding to make an exchange. You can obtain a prospectus from your financial advisor; by calling 800-243-4361; or on the Internet at virtus.com .

•

You generally may exchange shares of one fund for the same class of shares of another fund (e.g., Class A Shares for Class A Shares). Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended. Class C Shares of any fixed income fund in this prospectus are exchangeable for Class A Shares of the Ultra-Short Bond Funds. Class C Shares are also exchangeable for Class C1 Shares of those Virtus Mutual Funds offering them.

•

Class A Shares of the the Ultra-Short Bond Funds are exchangeable at net asset value plus the applicable sales charge of the Class A Shares into which you are exchanging. Please note, however, that exchanges into the Ultra-Short Bond Funds may be subject to a CDSC in the event that a finder’s fee was paid on the shares you are exchanging. See the “CDSC you may pay on Class A Shares” section of this prospectus for additional information. In the event that you are charged such a CDSC and later exchange your shares of an Ultra-Short Bond Fund for shares of another Virtus Mutual Fund, your shares of that Virtus Mutual Fund will not be subject to a sales charge or finder’s fee.

•

Exchanges may be made by telephone (800-243-1574) or by mail (Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074).

•

The amount of the exchange must be equal to or greater than the minimum initial investment required, unless the minimum has been waived (as described in the SAI).

•

The exchange of shares of one fund for shares of a different fund is treated as a sale of the original fund's shares and any gain on the transaction may be subject to federal income tax.

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•

Financial intermediaries are permitted to initiate exchanges from one class of a fund into another class of the same fund if, among other things, the financial intermediary agrees to follow procedures established by the fund, the Distributor or the Transfer Agent, which generally will require that (i) the exchanges be carried out within accounts that are maintained and controlled by the intermediary and meet investor eligibility requirements, if applicable, for the share class or account type, and (ii) no contingent deferred sales charges are outstanding, or the applicable intermediary agrees to cause any outstanding contingent deferred sales charges to be paid in a manner agreed to by the fund, the Distributor or the Transfer Agent. The fund’s ability to make this type of exchange may be limited by operational or other limitations, requiring the fund or its agent to process the transaction as a liquidation and purchase, at the same closing NAV. The financial intermediary will be ultimately responsible for reporting the transaction in accordance with their instruction.

Shareholders owning shares of a fund through accounts established directly with the Transfer Agent (i.e., not established with a financial intermediary who deals with the Transfer Agent exclusively on the investor’s behalf) may be permitted to exchange shares of one class of the fund into another class of the same fund, if they meet the investor eligibility requirements associated with the class into which they wish to exchange, at the discretion of the fund or the Transfer Agent. A shareholder’s ability to make this type of exchange may be limited by operational or other limitations of his or her financial intermediary or the fund. Under the Code, generally if a shareholder exchanges shares from one class of a fund into another class of the same fund, the transaction should not be subject to U.S. federal income taxes; however, each shareholder should consult both the relevant financial intermediary and the shareholder’s tax advisor regarding the treatment of any specific exchange carried out under the terms of this paragraph.

Disruptive Trading and Market Timing

These funds are not suitable for market timers, and market timers are discouraged from becoming investors. Your ability to make exchanges among Virtus Mutual Funds is subject to modification if we determine, in our sole opinion, that your exercise of the exchange privilege may disadvantage or potentially harm the rights or interests of other shareholders.

Frequent purchases, redemptions and exchanges, programmed exchanges, exchanges into and then out of a fund in a short period of time, and exchanges of large amounts at one time may be indicative of market timing and otherwise disruptive trading (“Disruptive Trading”) which can have risks and harmful effects for other shareholders. These risks and harmful effects include:

•

dilution of the interests of long-term investors, if market timers or others exchange into a fund at prices that are below the true value or exchange out of a fund at prices that are higher than the true value;

•

an adverse effect on portfolio management, as determined by the adviser or subadviser in its sole discretion, such as causing a fund to maintain a higher level of cash than would otherwise be the case, or causing a fund to liquidate investments prematurely; and

•

reducing returns to long-term shareholders through increased brokerage and administrative expenses.

Additionally, the nature of the portfolio holdings of certain funds (or the underlying funds as applicable), may expose those funds to investors who engage in the type of market timing trading that seeks to take advantage of possible delays between the change in the value of a mutual fund’s portfolio holdings and the reflection of the change in the NAV of the fund’s shares, sometimes referred to as “time-zone arbitrage.” Arbitrage market timers seek to exploit possible delays between the change in the value of a mutual fund’s portfolio holdings and the NAV of the fund’s shares in funds that hold significant investments in foreign securities because certain foreign markets close several hours ahead of the U.S. markets. If an arbitrageur is successful, the value of the fund’s shares may be diluted if redeeming shareholders receive proceeds (and buying shareholders receive shares) based upon NAVs which do not reflect appropriate fair value prices.

In order to attempt to protect our shareholders from the potential harmful effects of Disruptive Trading, the funds’ Board of Trustees has adopted market timing policies and procedures designed to discourage Disruptive Trading. The Board of Trustees has adopted these policies and procedures as a preventive measure to protect all shareholders from the potential effects of Disruptive Trading, while also abiding by any rights that shareholders may have to make exchanges and provide reasonable and convenient methods of making exchanges that do not have the potential to harm other shareholders.

Excessive trading activity is measured by the number of roundtrip transactions in an account. A roundtrip transaction is one where a shareholder buys and then sells, or sells and then buys, shares of any fund within 30 days. Shareholders

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of the funds are limited to one roundtrip transaction within any rolling 30-day period. Roundtrip transactions are counted at the shareholder level. In considering a shareholder’s trading activity, the funds may consider, among other factors, the shareholder’s trading history both directly and, if known, through financial intermediaries, in the funds, in other funds within the Virtus Mutual Fund complex, in non-Virtus funds or in accounts under common control or ownership. We do not include exchanges made pursuant to the dollar cost averaging or other similar programs when applying our market timing policies. Systematic withdrawal and/or contribution programs, mandatory retirement distributions, and transactions initiated by a plan sponsor also will not count towards the roundtrip limits. The funds may permit exchanges that management believes, in the exercise of their judgment, are not disruptive. The size of the fund and the size of the requested transaction may be considered when determining whether or not the transaction would be disruptive.

Shareholders holding shares for at least 30 days following investment will ordinarily be in compliance with the funds’ policies regarding excessive trading activity. The funds may, however, take action if activity is deemed disruptive even if shares are held longer than 30 days, such as a request for a transaction of an unusually large size. The size of the fund and the size of the requested transaction may be considered when determining whether or not the transaction would be disruptive.

Under our market timing policies, we may modify your exchange privileges for some or all of the funds by not accepting an exchange request from you or from any person, asset allocation service, and/or market timing service made on your behalf. We may also limit the amount that may be exchanged into or out of any fund at any one time, or may revoke your right to make Internet, telephone or facsimile exchanges. We may reinstate Internet, telephone and facsimile exchange privileges after they are revoked, but we will not reinstate these privileges if we have reason to believe that they might be used thereafter for Disruptive Trading.

The funds currently do not charge exchange or redemption fees, or any other administrative charges on fund exchanges. The funds reserve the right to impose such fees and/or charges in the future.

Orders for the purchase of fund shares are subject to acceptance by the relevant fund. We reserve the right to reject, without prior notice, any exchange request into any fund if the purchase of shares in the corresponding fund is not accepted for any reason.

The funds do not have any arrangements with any person, organization or entity to permit frequent purchases and redemptions of fund shares.

We may, without prior notice, take whatever action we deem appropriate to comply with or take advantage of any state or federal regulatory requirement. The funds reserve the right to reject any purchase or exchange transaction at any time. If we reject a purchase or exchange for any reason, we will notify you of our decision in writing.

The funds cannot guarantee that their policies and procedures regarding market timing will be effective in detecting and deterring all Disruptive Trading.

Retirement Plans

Shares of the funds may be used as investments under the following retirement plans: traditional IRA, rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k) plans, profit-sharing, money purchase plans, and certain 403(b) plans. For more information, call 800-243-4361.

Investor Services and Other Information

Systematic Purchase is a systematic investment plan that allows you to have a specified amount automatically deducted from your checking or savings account and then deposited into your mutual fund account. (Complete the “Systematic Purchase” section on the application and include a voided check.)

Systematic Exchange allows you to automatically move money from one Virtus Mutual Fund to another on a monthly, quarterly, semiannual or annual basis. Shares of one Virtus Mutual Fund will be exchanged for shares of the same class of another Virtus Mutual Fund at the interval you select. (Complete the “Systematic Exchange” section on the application.) Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended.

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Telephone Exchange lets you exchange shares of one Virtus Mutual Fund for the same class of shares in another Virtus Mutual Fund, using our customer service telephone number (800-243-1574). (See the “Telephone Exchange” section on the application.) Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended.

Systematic Withdrawal allows you to periodically redeem a portion of your account on a predetermined monthly, quarterly, semiannual, or annual basis. Sufficient shares from your account will be redeemed at the closing NAV on the applicable payment date, with proceeds to be mailed to you or sent through ACH to your bank (at your selection). For payments to be mailed, shares will be redeemed on the 15 th of the month so that the payment is made about the 20 th of the month. For ACH payments, you may select the day of the month for the payments to be made; if no date is specified, the payments will occur on the 15 th of the month. The minimum withdrawal is $25, and minimum account balance requirements continue to apply. Shareholders in the program must own Virtus Mutual Fund shares worth at least $5,000.

Disclosure of Fund Portfolio Holdings. A description of the funds' policies and procedures with respect to the disclosure of the funds' portfolio securities is available in the SAI.

Tax Status of Distributions

The funds plan to make distributions from net investment income at intervals stated in the table below and to distribute net realized capital gains, if any, at least annually.

		Fund				Dividend Paid
		Virtus Ceredex Large-Cap Value Equity Fund				Semiannually
		Virtus Ceredex Mid-Cap Value Equity Fund				Semiannually
		Virtus Ceredex Small-Cap Value Equity Fund				Semiannually
		Virtus Seix Core Bond Fund				Monthly
		Virtus Seix Corporate Bond Fund				Monthly
		Virtus Seix Floating Rate High Income Fund				Monthly
		Virtus High Grade Municipal Bond Fund				Monthly
		Virtus Seix High Income Fund				Monthly
		Virtus Seix High Yield Fund				Monthly
		Virtus Seix Investment Grade Tax-Exempt Bond Fund				Monthly
		Virtus Seix Short-Term Bond Fund				Monthly
		Virtus Seix Short-Term Municipal Bond Fund				Monthly
		Virtus Seix Total Return Bond Fund				Monthly
		Virtus Seix U.S. Government Securities Ultra-Short Bond Fund				Monthly
		Virtus Seix U.S. Mortgage Fund				Monthly
		Virtus Seix Ultra-Short Bond Fund				Monthly
		Virtus Silvant Large-Cap Growth Stock Fund				Semiannually
		Virtus Silvant Small-Cap Growth Stock Fund				Semiannually
		Virtus WCM International Equity Fund				Semiannually
		Virtus Zevenbergen Innovative Growth Stock Fund				Semiannually

Distributions of short-term capital gains (gains on securities held for a year or less) and net investment income are generally taxable to shareholders as ordinary income. Certain distributions of long-term capital gains and certain dividends are taxable at a lower rate than ordinary income. Long-term capital gains, if any, which are distributed to shareholders and which are designated by a fund as capital gain distributions, are taxable to shareholders as long-term capital gain distributions regardless of the length of time you have owned your shares.

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Financial Highlights

These tables are intended to help you understand each fund’s financial information (including that for a Predecessor Fund) for the past six periods. Some of this information reflects financial information for a single fund share. The total returns in the tables represent the rate that an investor would have earned or lost on an investment in a fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, the funds’ independent registered public accounting firm. PricewaterhouseCoopers LLP’s report, together with each fund’s financial statements, is included in the funds’ most recent Annual Report, which is available upon request.

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income(Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Ceredex Large-Cap Value Equity Fund
Class A
1/1/18 to 12/31/18		$	16.20		0.18		(1.81 )		(1.63 )		(0.24 )		(3.12 )		(3.36 )		(4.99 )		11.21		(10.63 )%		$	223,853		1.24 %		1.27 %		1.16 %		128 %
4/1/2017 to 12/31/2017 (6)			16.98		0.13		1.84		1.97		(0.20 )		(2.55 )		(2.75 )		(0.78 )		16.20		12.14			323,202		1.24		1.30		1.04		54
4/1/2016 to 3/31/2017			14.60		0.23		2.43		2.66		(0.22 )		(0.06 )		(0.28 )		2.38		16.98		18.31			335,256		1.25		1.36		1.45		77
4/1/2015 to 3/31/2016			16.48		0.17		(0.56 )		(0.39 )		(0.19 )		(1.30 )		(1.49 )		(1.88 )		14.60		(2.46 )			362,805		1.27		1.37		1.09		66
4/1/2014 to 3/31/2015			16.90		0.18		0.99		1.17		(0.18 )		(1.41 )		(1.59 )		(0.42 )		16.48		6.98			461,642		1.25		1.36		1.03		73
4/1/2013 to 3/31/2014			15.67		0.19		3.27		3.46		(0.19 )		(2.04 )		(2.23 )		1.23		16.90		22.60			379,768		1.19		1.37		1.13		81

Class C
1/1/18 to 12/31/18		$	15.78		0.11		(1.77 )		(1.66 )		(0.14 )		(3.12 )		(3.26 )		(4.92 )		10.86		(11.09 )%		$	14,625		1.72 %		1.92 %		0.69 %		128 %
4/1/2017 to 12/31/2017 (6)			16.59		0.08		1.78		1.86		(0.12 )		(2.55 )		(2.67 )		(0.81 )		15.78		11.76			17,744		1.68		1.86		0.61		54
4/1/2016 to 3/31/2017			14.28		0.15		2.37		2.52		(0.15 )		(0.06 )		(0.21 )		2.31		16.59		17.70			18,590		1.72		1.72		0.98		77
4/1/2015 to 3/31/2016			16.15		0.10		(0.55 )		(0.45 )		(0.12 )		(1.30 )		(1.42 )		(1.87 )		14.28		(2.88 )			19,053		1.71		1.71		0.65		66
4/1/2014 to 3/31/2015			16.59		0.10		0.97		1.07		(0.10 )		(1.41 )		(1.51 )		(0.44 )		16.15		6.50			21,207		1.71		1.71		0.57		73
4/1/2013 to 3/31/2014			15.42		0.10		3.22		3.32		(0.11 )		(2.04 )		(2.15 )		1.17		16.59		21.98			20,239		1.71		1.71		0.62		81

Class I
1/1/18 to 12/31/18		$	16.35		0.23		(1.84 )		(1.61 )		(0.28 )		(3.12 )		(3.40 )		(5.01 )		11.34		(10.39 )%		$	799,262		0.97 %		1.02 %		1.43 %		128 %
4/1/2017 to 12/31/2017 (6)			17.11		0.17		1.86		2.03		(0.24 )		(2.55 )		(2.79 )		(0.76 )		16.35		12.42			1,300,385		0.97		1.05		1.31		54
4/1/2016 to 3/31/2017			14.71		0.28		2.45		2.73		(0.27 )		(0.06 )		(0.33 )		2.40		17.11		18.63			1,432,996		0.97		1.09		1.73		77
4/1/2015 to 3/31/2016			16.60		0.22		(0.57 )		(0.35 )		(0.24 )		(1.30 )		(1.54 )		(1.89 )		14.71		(2.19 )			1,440,587		0.97		1.09		1.40		66
4/1/2014 to 3/31/2015			17.02		0.23		0.99		1.22		(0.23 )		(1.41 )		(1.64 )		(0.42 )		16.60		7.25			1,927,039		0.95		1.07		1.33		73
4/1/2013 to 3/31/2014			15.76		0.24		3.29		3.53		(0.23 )		(2.04 )		(2.27 )		1.26		17.02		22.94			1,799,158		0.91		1.06		1.42		81

Class R6 (formerly Class IS)
1/1/18 to 12/31/18		$	16.41		0.27		(1.85 )		(1.58 )		(0.32 )		(3.12 )		(3.44 )		(5.02 )		11.39		(10.22 )%		$	272,596		0.72 %		0.83 %		1.69 %		128 %
4/1/2017 to 12/31/2017 (6)			17.18		0.21		1.85		2.06		(0.28 )		(2.55 )		(2.83 )		(0.77 )		16.41		12.60			336,516		0.72		0.80		1.57		54
4/1/2016 to 3/31/2017			14.77		0.32		2.46		2.78		(0.31 )		(0.06 )		(0.37 )		2.41		17.18		18.92			322,129		0.72		0.72		1.98		77
4/1/2015 to 3/31/2016			16.66		0.23		(0.53 )		(0.30 )		(0.29 )		(1.30 )		(1.59 )		(1.89 )		14.77		(1.90 )			272,861		0.72		0.72		1.48		66
8/1/2014 to 3/31/2015 (7)			17.54		0.19		0.54		0.73		(0.20 )		(1.41 )		(1.61 )		(0.88 )		16.66		4.26			37,570		0.71		0.71		1.65		73

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income(Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Ceredex Mid-Cap Value Equity Fund
Class A
1/1/18 to 12/31/18		$	12.50		0.07		(1.02 )		(0.95 )		(0.09 )		(1.35 )		(1.44 )		(2.39 )		10.11		(8.08 )%		$	271,620		1.38 % (9)		1.31 %		0.55 %		109 %
4/1/2017 to 12/31/2017 (6)			14.33		0.08		0.69		0.77		(0.08 )		(2.52 )		(2.60 )		(1.83 )		12.50		5.87			320,717		1.38		1.37 (8)		0.75 (8)		82
4/1/2016 to 3/31/2017			12.22		0.11		2.63		2.74		(0.13 )		(0.50 )		(0.63 )		2.11		14.33		22.69			369,102		1.39		1.45		0.81		108
4/1/2015 to 3/31/2016			13.60		0.11		(0.70 )		(0.59 )		(0.10 )		(0.69 )		(0.79 )		(1.38 )		12.22		(4.11 )			397,599		1.40		1.45		0.86		98
4/1/2014 to 3/31/2015			13.96		0.09		0.92		1.01		(0.08 )		(1.29 )		(1.37 )		(0.36 )		13.60		7.45			590,327		1.38		1.41		0.64		94
4/1/2013 to 3/31/2014			12.96		0.10		2.62		2.72		(0.09 )		(1.63 )		(1.72 )		1.00		13.96		21.68			611,880		1.35		1.40		0.76		108

Class C
1/1/18 to 12/31/18		$	12.18		0.02		(1.00 )		(0.98 )		(0.01 )		(1.35 )		(1.36 )		(2.34 )		9.84		(8.53 )%		$	53,419		1.79 %		1.97 %		0.17 %		109 %
4/1/2017 to 12/31/2017 (6)			14.02		0.03		0.68		0.71		(0.03 )		(2.52 )		(2.55 )		(1.84 )		12.18		5.52			48,877		1.80		1.92		0.33		82
4/1/2016 to 3/31/2017			11.96		0.05		2.58		2.63		(0.07 )		(0.50 )		(0.57 )		2.06		14.02		22.23			55,580		1.80		1.80		0.39		108
4/1/2015 to 3/31/2016			13.34		0.06		(0.68 )		(0.62 )		(0.07 )		(0.69 )		(0.76 )		(1.38 )		11.96		(4.49 )			64,160		1.78		1.78		0.50		98
4/1/2014 to 3/31/2015			13.72		0.04		0.90		0.94		(0.03 )		(1.29 )		(1.32 )		(0.38 )		13.34		7.06			87,115		1.75		1.75		0.28		94
4/1/2013 to 3/31/2014			12.77		0.05		2.58		2.63		(0.05 )		(1.63 )		(1.68 )		0.95		13.72		21.26			81,961		1.76		1.76		0.36		108

Class I
1/1/18 to 12/31/18		$	12.66		0.12		(1.05 )		(0.93 )		(0.13 )		(1.35 )		(1.48 )		(2.41 )		10.25		(7.83 )%		$	1,775,643		1.01 % (10)		1.01 %		0.92 %		109 %
4/1/2017 to 12/31/2017 (6)			14.48		0.12		0.70		0.82		(0.12 )		(2.52 )		(2.64 )		(1.82 )		12.66		6.21			2,187,625		1.04		1.04		1.09		82
4/1/2016 to 3/31/2017			12.34		0.15		2.66		2.81		(0.17 )		(0.50 )		(0.67 )		2.14		14.48		23.08			2,716,560		1.08		1.08		1.12		108
4/1/2015 to 3/31/2016			13.74		0.15		(0.71 )		(0.56 )		(0.15 )		(0.69 )		(0.84 )		(1.40 )		12.34		(3.85 )			2,717,761		1.12		1.12		1.16		98
4/1/2014 to 3/31/2015			14.09		0.13		0.93		1.06		(0.12 )		(1.29 )		(1.41 )		(0.35 )		13.74		7.76			3,552,288		1.10		1.10		0.92		94
4/1/2013 to 3/31/2014			13.06		0.14		2.64		2.78		(0.12 )		(1.63 )		(1.75 )		1.03		14.09		22.03			3,159,585		1.09		1.10		1.02		108

Class R6 (formerly Class IS)
1/1/18 to 12/31/18		$	12.67		0.15		(1.05 )		(0.90 )		(0.15 )		(1.35 )		(1.50 )		(2.40 )		10.27		(7.58 )%		$	411,922		0.79 %		0.87 %		1.17 %		109 %
4/1/2017 to 12/31/2017 (6)			14.49		0.15		0.70		0.85		(0.15 )		(2.52 )		(2.67 )		(1.82 )		12.67		6.41			388,495		0.80		0.85		1.37		82
4/1/2016 to 3/31/2017			12.36		0.19		2.66		2.85		(0.22 )		(0.50 )		(0.72 )		2.13		14.49		23.34			291,554		0.80		0.80		1.44		108
4/1/2015 to 3/31/2016			13.76		0.21		(0.72 )		(0.51 )		(0.20 )		(0.69 )		(0.89 )		(1.40 )		12.36		(3.45 )			192,640		0.80		0.80		1.68		98
8/1/2014 to 3/31/2015 (7)			14.28		0.13		0.77		0.90		(0.13 )		(1.29 )		(1.42 )		(0.52 )		13.76		6.54			23,398		0.75		0.75		1.39		94

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income(Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Ceredex Small-Cap Value Equity Fund
Class A
1/1/18 to 12/31/18		$	11.53		0.08		(1.51 )		(1.43 )		(0.15 )		(1.50 )		(1.65 )		(3.08 )		8.45		(12.70 )%		$	69,223		1.46 % (10)		1.46 %		0.68 %		44 %
4/1/2017 to 12/31/2017 (6)			12.58		0.14		0.90		1.04		(0.16 )		(1.93 )		(2.09 )		(1.05 )		11.53		8.74			114,673		1.47		1.50		1.52		15
4/1/2016 to 3/31/2017			10.96		0.07		2.20		2.27		(0.09 )		(0.56 )		(0.65 )		1.62		12.58		20.81			123,495		1.55		1.55		0.58		29
4/1/2015 to 3/31/2016			15.25		0.08		(0.50 )		(0.42 )		(0.15 )		(3.72 )		(3.87 )		(4.29 )		10.96		(1.07 )			121,367		1.55		1.55		0.62		36
4/1/2014 to 3/31/2015			17.61		0.15		0.38		0.53		(0.10 )		(2.79 )		(2.89 )		(2.36 )		15.25		3.79			162,732		1.52		1.52		0.89		10
4/1/2013 to 3/31/2014			15.19		0.12		3.05		3.17		(0.11 )		(0.64 )		(0.75 )		2.42		17.61		20.96			195,098		1.50		1.50		0.73		37

Class C
1/1/18 to 12/31/18		$	10.31		0.02		(1.34 )		(1.32 )		(0.08 )		(1.50 )		(1.58 )		(2.90 )		7.41		(13.07 )%		$	14,473		1.90 %		2.09 %		0.23 %		44 %
4/1/2017 to 12/31/2017 (6)			11.46		0.09		0.80		0.89		(0.11 )		(1.93 )		(2.04 )		(1.15 )		10.31		8.28			20,658		1.90		2.07		1.05		15
4/1/2016 to 3/31/2017			10.04		0.02		2.02		2.04		(0.06 )		(0.56 )		(0.62 )		1.42		11.46		20.35			24,529		1.90		1.90		0.22		29
4/1/2015 to 3/31/2016			14.31		0.03		(0.47 )		(0.44 )		(0.11 )		(3.72 )		(3.83 )		(4.27 )		10.04		(1.34 )			27,410		1.90		1.90		0.28		36
4/1/2014 to 3/31/2015			16.71		0.08		0.36		0.44		(0.05 )		(2.79 )		(2.84 )		(2.40 )		14.31		3.42			33,793		1.88		1.88		0.54		10
4/1/2013 to 3/31/2014			14.47		0.06		2.90		2.96		(0.08 )		(0.64 )		(0.72 )		2.24		16.71		20.53			38,408		1.87		1.87		0.36		37

Class I
1/1/18 to 12/31/18		$	11.98		0.12		(1.58 )		(1.46 )		(0.19 )		(1.50 )		(1.69 )		(3.15 )		8.83		(12.50 )%		$	474,591		1.18 % (10)		1.18 %		0.99 %		44 %
4/1/2017 to 12/31/2017 (6)			12.99		0.16		0.94		1.10		(0.18 )		(1.93 )		(2.11 )		(1.01 )		11.98		8.94			673,458		1.22		1.22		1.72		15
4/1/2016 to 3/31/2017			11.30		0.11		2.27		2.38		(0.13 )		(0.56 )		(0.69 )		1.69		12.99		21.15			786,245		1.24		1.24		0.87		29
4/1/2015 to 3/31/2016			15.59		0.13		(0.50 )		(0.37 )		(0.20 )		(3.72 )		(3.92 )		(4.29 )		11.30		(0.64 )			820,124		1.21		1.21		0.93		36
4/1/2014 to 3/31/2015			17.95		0.20		0.38		0.58		(0.15 )		(2.79 )		(2.94 )		(2.36 )		15.59		4.07			1,118,190		1.21		1.21		1.16		10
4/1/2013 to 3/31/2014			15.45		0.17		3.11		3.28		(0.14 )		(0.64 )		(0.78 )		2.50		17.95		21.34			1,528,174		1.22		1.22		1.01		37

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Core Bond Fund
Class A
1/1/18 to 12/31/18		$	10.63		0.22		(0.25 )		(0.03 )		(0.23 )		(0.01 )		—		(0.24 )		(0.27 )		10.36		(0.28 )%		$	5,993		0.64 %		0.89 %		2.18 %		172 %
4/1/2017 to 12/31/2017 (6)			10.56		0.14		0.08		0.22		(0.12 )		(0.03 )		—		(0.15 )		0.07		10.63		2.12			8,433		0.65 (12)		0.79		1.73		130
4/1/2016 to 3/31/2017			10.86		0.16		(0.06 )		0.10		(0.19 )		—		(0.21 )		(0.40 )		(0.30 )		10.56		0.90			10,363		0.64		0.64		1.45		210
4/1/2015 to 3/31/2016			11.04		0.18		(0.07 )		0.11		(0.20 )		—		(0.09 )		(0.29 )		(0.18 )		10.86		1.01			10,170		0.65		0.65		1.65		232
4/1/2014 to 3/31/2015			10.65		0.18		0.41		0.59		(0.20 )		—		—		(0.20 )		0.39		11.04		5.58			7,411		0.67		0.67		1.70		168
4/1/2013 to 3/31/2014			11.16		0.15		(0.23 )		(0.08 )		(0.19 )		—		(0.24 )		(0.43 )		(0.51 )		10.65		(0.66 )			9,848		0.71		0.71		1.38		208

Class I
1/1/18 to 12/31/18		$	10.63		0.24		(0.26 )		(0.02 )		(0.24 )		(0.01 )		—		(0.25 )		(0.27 )		10.36		(0.14 )%		$	136,247		0.50 %		0.62 %		2.31 %		172 %
4/1/2017 to 12/31/2017 (6)			10.57		0.15		0.07		0.22		(0.13 )		(0.03 )		—		(0.16 )		0.06		10.63		2.13			186,029		0.51 (12)		0.58		1.87		130
4/1/2016 to 3/31/2017			10.86		0.17		(0.04 )		0.13		(0.21 )		—		(0.21 )		(0.42 )		(0.29 )		10.57		1.15			199,622		0.49		0.49		1.58		210
4/1/2015 to 3/31/2016			11.04		0.20		(0.08 )		0.12		(0.21 )		—		(0.09 )		(0.30 )		(0.18 )		10.86		1.18			255,522		0.48		0.48		1.82		232
4/1/2014 to 3/31/2015			10.65		0.21		0.40		0.61		(0.22 )		—		—		(0.22 )		0.39		11.04		5.80			191,905		0.45		0.45		1.90		168
4/1/2013 to 3/31/2014			11.16		0.18		(0.23 )		(0.05 )		(0.22 )		—		(0.24 )		(0.46 )		(0.51 )		10.65		(0.38 )			200,371		0.42		0.42		1.67		208

Class R
1/1/18 to 12/31/18		$	10.64		0.20		(0.26 )		(0.06 )		(0.20 )		(0.01 )		—		(0.21 )		(0.27 )		10.37		(0.54 )%		$	3,095		0.91 %		0.98 %		1.92 %		172 %
4/1/2017 to 12/31/2017 (6)			10.58		0.12		0.07		0.19		(0.10 )		(0.03 )		—		(0.13 )		0.06		10.64		1.82			3,153		0.92 (12)		1.05		1.45		130
4/1/2016 to 3/31/2017			10.87		0.13		(0.05 )		0.08		(0.16 )		—		(0.21 )		(0.37 )		(0.29 )		10.58		0.73			3,124		0.91		0.91		1.18		210
4/1/2015 to 3/31/2016			11.05		0.15		(0.07 )		0.08		(0.17 )		—		(0.09 )		(0.26 )		(0.18 )		10.87		0.78			3,448		0.88		0.88		1.41		232
4/1/2014 to 3/31/2015			10.66		0.16		0.41		0.57		(0.18 )		—		—		(0.18 )		0.39		11.05		5.37			3,490		0.85		0.85		1.51		168
4/1/2013 to 3/31/2014			11.17		0.14		(0.24 )		(0.10 )		(0.17 )		—		(0.24 )		(0.41 )		(0.51 )		10.66		(0.80 )			4,115		0.85		0.85		1.29		208

Class R6 (formerly Class IS)
1/1/18 to 12/31/18		$	10.63		0.25		(0.26 )		(0.01 )		(0.25 )		(0.01 )		—		(0.26 )		(0.27 )		10.36		(0.02 )%		$	114		0.36 %		0.48 %		2.40 %		172 %
4/1/2017 to 12/31/2017 (6)			10.57		0.16		0.08		0.24		(0.15 )		(0.03 )		—		(0.18 )		0.06		10.63		2.24			3,279		0.36		0.46		1.96		130
4/1/2016 to 3/31/2017			10.86		0.19		(0.05 )		0.14		(0.22 )		—		(0.21 )		(0.43 )		(0.29 )		10.57		1.29			1,352		0.35		0.35		1.78		210
8/3/2015 to 3/31/2016 (13)			10.77		0.14		0.13		0.27		(0.15 )		—		(0.03 )		(0.18 )		0.09		10.86		2.51			22		0.34		0.34		2.00		232

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Corporate Bond Fund
Class A
1/1/18 to 12/31/18		$	8.76		0.26		(0.60 )		(0.34 )		(0.25 )		—		(0.02 )		(0.27 )		(0.61 )		8.15		(3.90 )%		$	345		0.95 %		1.35 %		3.08 %		299 %
4/1/2017 to 12/31/2017 (6)			8.69		0.18		0.21		0.39		(0.16 )		—		(0.16 )		(0.32 )		0.07		8.76		4.53			363		0.95		1.34		2.68		80
4/1/2016 to 3/31/2017			8.50		0.24		0.27		0.51		(0.24 )		—		(0.08 )		(0.32 )		0.19		8.69		6.01			591		0.95		1.15		2.75		182
4/1/2015 to 3/31/2016			8.99		0.23		(0.29 )		(0.06 )		(0.22 )		(0.01 )		(0.20 )		(0.43 )		(0.49 )		8.50		(0.52 )			500		0.95		1.11		2.68		84
4/1/2014 to 3/31/2015			8.84		0.24		0.32		0.56		(0.24 )		—		(0.17 )		(0.41 )		0.15		8.99		6.40			807		0.95		0.99		2.67		90
4/1/2013 to 3/31/2014			9.35		0.25		(0.21 )		0.04		(0.26 )		—		(0.29 )		(0.55 )		(0.51 )		8.84		0.52			783		0.92		0.93		2.76		143

Class C
1/1/18 to 12/31/18		$	8.72		0.20		(0.60 )		(0.40 )		(0.19 )		—		(0.02 )		(0.21 )		(0.61 )		8.11		(4.61 )%		$	5,459		1.65 %		2.12 %		2.37 %		299 %
4/1/2017 to 12/31/2017 (6)			8.65		0.13		0.21		0.34		(0.11 )		—		(0.16 )		(0.27 )		0.07		8.72		4.02			6,518		1.62		2.10		2.02		80
4/1/2016 to 3/31/2017			8.46		0.18		0.27		0.45		(0.18 )		—		(0.08 )		(0.26 )		0.19		8.65		5.29			7,369		1.65		1.82		2.03		182
4/1/2015 to 3/31/2016			8.95		0.17		(0.29 )		(0.12 )		(0.16 )		(0.01 )		(0.20 )		(0.37 )		(0.49 )		8.46		(1.22 )			8,105		1.65		1.80		2.01		84
4/1/2014 to 3/31/2015			8.80		0.18		0.32		0.50		(0.18 )		—		(0.17 )		(0.35 )		0.15		8.95		5.69			9,289		1.64		1.67		1.97		90
4/1/2013 to 3/31/2014			9.30		0.19		(0.21 )		(0.02 )		(0.19 )		—		(0.29 )		(0.48 )		(0.50 )		8.80		(0.07 )			10,385		1.62		1.63		2.18		143

Class I
1/1/18 to 12/31/18		$	8.73		0.27		(0.60 )		(0.33 )		(0.27 )		—		(0.02 )		(0.29 )		(0.62 )		8.11		(3.81 )%		$	35,244		0.70 %		1.03 %		3.33 %		299 %
4/1/2017 to 12/31/2017 (6)			8.65		0.19		0.23		0.42		(0.18 )		—		(0.16 )		(0.34 )		0.08		8.73		4.86			8,382		0.70		1.18		2.93		80
4/1/2016 to 3/31/2017			8.46		0.26		0.27		0.53		(0.26 )		—		(0.08 )		(0.34 )		0.19		8.65		6.29			12,651		0.70		0.93		2.99		182
4/1/2015 to 3/31/2016			8.95		0.25		(0.29 )		(0.04 )		(0.24 )		(0.01 )		(0.20 )		(0.45 )		(0.49 )		8.46		(0.29 )			8,943		0.70		0.83		2.86		84
4/1/2014 to 3/31/2015			8.80		0.26		0.32		0.58		(0.26 )		—		(0.17 )		(0.43 )		0.15		8.95		6.73			24,172		0.66		0.69		2.95		90
4/1/2013 to 3/31/2014			9.30		0.28		(0.21 )		0.07		(0.28 )		—		(0.29 )		(0.57 )		(0.50 )		8.80		0.91			28,017		0.63		0.64		3.18		143

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Floating Rate High Income Fund
Class A
1/1/18 to 12/31/18		$	8.70		0.40		(0.40 )		—		(0.40 )		—		—		(0.40 )		(0.40 )		8.30		(0.11 )%		$	68,213		0.94 %		0.95 %		4.58 %		75 %
4/1/2017 to 12/31/2017 (6)			8.75		0.26		(0.05 )		0.21		(0.26 )		—		—		(0.26 )		(0.05 )		8.70		2.47			113,611		0.92		0.93		4.00		55
4/1/2016 to 3/31/2017			8.33		0.39		0.41		0.80		(0.38 )		—		—		(0.38 )		0.42		8.75		9.78			135,833		0.94		0.94		4.51		79
4/1/2015 to 3/31/2016			8.86		0.38		(0.54 )		(0.16 )		(0.37 )		—		—		(0.37 )		(0.53 )		8.33		(1.79 )			143,325		0.92		0.92		4.42		33
4/1/2014 to 3/31/2015			9.06		0.36		(0.19 )		0.17		(0.37 )		—		—		(0.37 )		(0.20 )		8.86		1.88			147,560		0.91		0.91		4.06		29
4/1/2013 to 3/31/2014			9.06		0.35		(0.01 )		0.34		(0.34 )		—		—		(0.34 )		—		9.06		3.86			212,336		0.89		0.89		3.82		47

Class C
1/1/18 to 12/31/18		$	8.70		0.35		(0.40 )		(0.05 )		(0.35 )		—		—		(0.35 )		(0.40 )		8.30		(0.68 )%		$	45,588		1.52 %		1.62 %		4.01 %		75 %
4/1/2017 to 12/31/2017 (6)			8.76		0.22		(0.06 )		0.16		(0.22 )		—		—		(0.22 )		(0.06 )		8.70		1.89			51,551		1.52		1.60		3.40		55
4/1/2016 to 3/31/2017			8.33		0.34		0.42		0.76		(0.33 )		—		—		(0.33 )		0.43		8.76		9.28			56,981		1.52		1.52		3.94		79
4/1/2015 to 3/31/2016			8.86		0.33		(0.54 )		(0.21 )		(0.32 )		—		—		(0.32 )		(0.53 )		8.33		(2.37 )			55,203		1.51		1.51		3.82		33
4/1/2014 to 3/31/2015			9.07		0.31		(0.21 )		0.10		(0.31 )		—		—		(0.31 )		(0.21 )		8.86		1.16			64,445		1.50		1.50		3.46		29
4/1/2013 to 3/31/2014			9.06		0.29		0.01		0.30		(0.29 )		—		—		(0.29 )		0.01		9.07		3.33			83,149		1.51		1.51		3.21		47

Class I
1/1/18 to 12/31/18		$	8.70		0.43		(0.40 )		0.03		(0.43 )		—		—		(0.43 )		(0.40 )		8.30		0.22 %		$	4,380,792		0.62 %		0.70 %		4.92 %		75 %
4/1/2017 to 12/31/2017 (6)			8.75		0.28		(0.05 )		0.23		(0.28 )		—		—		(0.28 )		(0.05 )		8.70		2.70			4,546,547		0.62		0.69		4.29		55
4/1/2016 to 3/31/2017			8.33		0.41		0.42		0.83		(0.41 )		—		—		(0.41 )		0.42		8.75		10.13			4,459,175		0.63		0.63		4.80		79
4/1/2015 to 3/31/2016			8.86		0.40		(0.53 )		(0.13 )		(0.40 )		—		—		(0.40 )		(0.53 )		8.33		(1.50 )			3,040,875		0.62		0.62		4.69		33
4/1/2014 to 3/31/2015			9.06		0.39		(0.20 )		0.19		(0.39 )		—		—		(0.39 )		(0.20 )		8.86		2.17			6,048,771		0.61		0.61		4.34		29
4/1/2013 to 3/31/2014			9.06		0.38		(0.01 )		0.37		(0.37 )		—		—		(0.37 )		—		9.06		4.16			8,965,312		0.60		0.60		4.13		47

Class R6 (formerly Class IS)
1/1/18 to 12/31/18		$	8.71		0.43		(0.40 )		0.03		(0.44 )		—		—		(0.44 )		(0.41 )		8.30		0.20 %		$	805,046		0.52 %		0.58 %		5.00 %		75 %
4/1/2017 to 12/31/2017 (6)			8.76		0.29		(0.05 )		0.24		(0.29 )		—		—		(0.29 )		(0.05 )		8.71		2.78			1,277,730		0.52		0.59		4.39		55
4/1/2016 to 3/31/2017			8.33		0.43		0.42		0.85		(0.42 )		—		—		(0.42 )		0.43		8.76		10.37			1,307,701		0.52		0.52		4.94		79
4/1/2015 to 3/31/2016			8.86		0.41		(0.53 )		(0.12 )		(0.41 )		—		—		(0.41 )		(0.53 )		8.33		(1.39 )			1,127,337		0.51		0.51		4.83		33
2/2/2015 to 3/31/2015 (14)			8.74		0.07		0.12		0.19		(0.07 )		—		—		(0.07 )		0.12		8.86		2.15			12,629		0.47		0.47		5.08		29

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix High Grade Municipal Bond Fund
Class A
1/1/18 to 12/31/18		$	11.94		0.31		(0.26 )		0.05		(0.31 )		—		(0.06 )		(0.37 )		(0.32 )		11.62		0.44 %		$	6,767		0.80 % (12)		0.95 %		2.63 %		130 %
4/1/2017 to 12/31/2017 (6)			11.69		0.21		0.27		0.48		(0.22 )		—		(0.01 )		(0.23 )		0.25		11.94		4.12			8,175		0.80		0.91		2.39		173
4/1/2016 to 3/31/2017			12.36		0.24		(0.22 )		0.02		(0.24 )		—		(0.45 )		(0.69 )		(0.67 )		11.69		0.27			12,276		0.80		0.80		1.99		218
4/1/2015 to 3/31/2016			12.29		0.25		0.19		0.44		(0.25 )		—		(0.12 )		(0.37 )		0.07		12.36		3.70			13,996		0.79		0.79		2.07		171
4/1/2014 to 3/31/2015			11.86		0.29		0.59		0.88		(0.29 )		—		(0.16 )		(0.45 )		0.43		12.29		7.48			16,499		0.80		0.80		2.38		228
4/1/2013 to 3/31/2014			12.11		0.32		(0.20 )		0.12		(0.32 )		—		(0.05 )		(0.37 )		(0.25 )		11.86		1.16			8,967		0.80		0.82		2.75		227

Class I
1/1/18 to 12/31/18		$	11.93		0.32		(0.25 )		0.07		(0.32 )		—		(0.06 )		(0.38 )		(0.31 )		11.62		0.67 %		$	41,769		0.65 % (12)		0.85 %		2.77 %		130 %
4/1/2017 to 12/31/2017 (6)			11.68		0.23		0.26		0.49		(0.23 )		—		(0.01 )		(0.24 )		0.25		11.93		4.24			75,684		0.65		0.82		2.55		173
4/1/2016 to 3/31/2017			12.36		0.26		(0.23 )		0.03		(0.26 )		—		(0.45 )		(0.71 )		(0.68 )		11.68		0.33			78,729		0.65		0.71		2.12		218
4/1/2015 to 3/31/2016			12.29		0.27		0.19		0.46		(0.27 )		—		(0.12 )		(0.39 )		0.07		12.36		3.85			99,803		0.65		0.69		2.21		171
4/1/2014 to 3/31/2015			11.86		0.31		0.59		0.90		(0.31 )		—		(0.16 )		(0.47 )		0.43		12.29		7.64			95,761		0.65		0.69		2.53		228
4/1/2013 to 3/31/2014			12.10		0.34		(0.19 )		0.15		(0.34 )		—		(0.05 )		(0.39 )		(0.24 )		11.86		1.40			47,737		0.65		0.68		2.90		227

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix High Income Fund
Class A
1/1/18 to 12/31/18		$	6.53		0.36		(0.57 )		(0.21 )		(0.36 )		—		—		(0.36 )		(0.57 )		5.96		(3.42 )%		$	14,327		1.03 %		1.11 %		5.56 %		77 %
4/1/2017 to 12/31/2017 (6)			6.46		0.28		0.07		0.35		(0.28 )		— (11 )		—		(0.28 )		0.07		6.53		5.52			29,592		1.02		1.10		5.69		45
4/1/2016 to 3/31/2017			5.92		0.38		0.53		0.91		(0.37 )		—		—		(0.37 )		0.54		6.46		15.69			63,104		1.04		1.04		5.92		95
4/1/2015 to 3/31/2016			6.68		0.38		(0.75 )		(0.37 )		(0.39 )		—		—		(0.39 )		(0.76 )		5.92		(5.68 )			43,433		1.03		1.03		6.08		77
4/1/2014 to 3/31/2015			7.27		0.38		(0.38 )		—		(0.38 )		—		(0.21 )		(0.59 )		(0.59 )		6.68		0.26			65,121		0.99		0.99		5.34		86
4/1/2013 to 3/31/2014			7.32		0.42		0.11		0.53		(0.42 )		—		(0.16 )		(0.58 )		(0.05 )		7.27		7.60			157,360		0.97		0.97		5.82		110

Class I
1/1/18 to 12/31/18		$	6.52		0.37		(0.57 )		(0.20 )		(0.37 )		—		—		(0.37 )		(0.57 )		5.95		(3.20 )%		$	264,435		0.80 %		0.88 %		5.87 %		77 %
4/1/2017 to 12/31/2017 (6)			6.46		0.29		0.06		0.35		(0.29 )		— (11 )		—		(0.29 )		0.06		6.52		5.53 %		$	390,665		0.81 (12)		0.87		5.93		45
4/1/2016 to 3/31/2017			5.92		0.39		0.54		0.93		(0.39 )		—		—		(0.39 )		0.54		6.46		15.59			465,928		0.80		0.81		6.15		95
4/1/2015 to 3/31/2016			6.67		0.40		(0.75 )		(0.35 )		(0.40 )		—		—		(0.40 )		(0.75 )		5.92		(5.31 )			546,793		0.79		0.79		6.34		77
4/1/2014 to 3/31/2015			7.26		0.40		(0.38 )		0.02		(0.40 )		—		(0.21 )		(0.61 )		(0.59 )		6.67		0.47			753,851		0.77		0.77		5.63		86
4/1/2013 to 3/31/2014			7.32		0.43		0.11		0.54		(0.44 )		—		(0.16 )		(0.60 )		(0.06 )		7.26		7.68			783,072		0.77		0.77		6.00		110

Class R
1/1/18 to 12/31/18		$	6.53		0.35		(0.57 )		(0.22 )		(0.35 )		—		—		(0.35 )		(0.57 )		5.96		(3.59 )%		$	11,166		1.22 %		1.25 %		5.46 %		77 %
4/1/2017 to 12/31/2017 (6)			6.46		0.27		0.07		0.34		(0.27 )		— (11 )		—		(0.27 )		0.07		6.53		5.36			12,160		1.23 (12)		1.30		5.49		45
4/1/2016 to 3/31/2017			5.92		0.36		0.54		0.90		(0.36 )		—		—		(0.36 )		0.54		6.46		15.47			14,699		1.22		1.22		5.73		95
4/1/2015 to 3/31/2016			6.68		0.37		(0.76 )		(0.39 )		(0.37 )		—		—		(0.37 )		(0.76 )		5.92		(5.87 )			14,574		1.23		1.23		5.92		77
4/1/2014 to 3/31/2015			7.27		0.37		(0.38 )		(0.01 )		(0.37 )		—		(0.21 )		(0.58 )		(0.59 )		6.68		0.05			20,887		1.21		1.21		5.20		86
4/1/2013 to 3/31/2014			7.32		0.40		0.12		0.52		(0.41 )		—		(0.16 )		(0.57 )		(0.05 )		7.27		7.37			22,317		1.20		1.20		5.57		110

Class R6 (formerly class IS)
1/1/18 to 12/31/18		$	6.52		0.38		(0.57 )		(0.19 )		(0.38 )		—		—		(0.38 )		(0.57 )		5.95		(3.05 )%		$	4,927		0.64 %		0.75 %		6.03 %		77 %
4/1/2017 to 12/31/2017 (6)			6.45		0.30		0.07		0.37		(0.30 )		— (11 )		—		(0.30 )		0.07		6.52		5.82			5,898		0.64		0.73		6.09		45
4/1/2016 to 3/31/2017			5.92		0.40		0.53		0.93		(0.40 )		—		—		(0.40 )		0.53		6.45		15.96			4,125		0.64		0.64		6.26		95
4/1/2015 to 3/31/2016			6.68		0.40		(0.75 )		(0.35 )		(0.41 )		—		—		(0.41 )		(0.76 )		5.92		(5.30 )			1,117		0.63		0.63		6.27		77
8/1/2014 to 3/31/2015 (7)			7.22		0.28		(0.33 )		(0.05 )		(0.28 )		—		(0.21 )		(0.49 )		(0.54 )		6.68		(0.51 )			3,455		0.63		0.63		5.99		86

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix High Yield Fund
Class A
1/1/18 to 12/31/18		$	8.21		0.43		(0.59 )		(0.16 )		(0.43 )		—		—		(0.43 )		(0.59 )		7.62		(2.07 )%		$	2,910		0.82 %		1.02 %		5.32 %		59 %
4/1/2017 to 12/31/2017 (6)			8.16		0.34		0.03		0.37		(0.30 )		(0.02 )		—		(0.32 )		0.05		8.21		4.63			4,810		0.83 (12)		0.97		5.43		41
4/1/2016 to 3/31/2017			7.61		0.44		0.55		0.99		(0.44 )		—		—		(0.44 )		0.55		8.16		13.20			6,214		0.82		0.82		5.51		87
4/1/2015 to 3/31/2016			8.51		0.44		(0.89 )		(0.45 )		(0.45 )		—		—		(0.45 )		(0.90 )		7.61		(5.36 )			7,463		0.84		0.84		5.48		76
4/1/2014 to 3/31/2015			9.72		0.51		(0.43 )		0.08		(0.50 )		—		(0.79 )		(1.29 )		(1.21 )		8.51		1.24			8,110		0.87		0.87		5.31		72
4/1/2013 to 3/31/2014			10.03		0.55		0.05		0.60		(0.55 )		—		(0.36 )		(0.91 )		(0.31 )		9.72		6.39			69,921		0.81		0.81		5.57		89

Class I
1/1/18 to 12/31/18		$	8.41		0.45		(0.58 )		(0.13 )		(0.46 )		—		—		(0.46 )		(0.59 )		7.82		(1.70 )%		$	286,931		0.64 %		0.76 %		5.53 %		59 %
4/1/2017 to 12/31/2017 (6)			8.37		0.34		0.04		0.38		(0.32 )		(0.02 )		—		(0.34 )		0.04		8.41		4.64			403,198		0.65 (12)		0.73		5.38		41
4/1/2016 to 3/31/2017			7.80		0.46		0.57		1.03		(0.46 )		—		—		(0.46 )		0.57		8.37		13.48			483,080		0.64		0.64		5.65		87
4/1/2015 to 3/31/2016			8.73		0.47		(0.92 )		(0.45 )		(0.48 )		—		—		(0.48 )		(0.93 )		7.80		(5.23 )			523,206		0.61		0.61		5.71		76
4/1/2014 to 3/31/2015			9.95		0.54		(0.43 )		0.11		(0.54 )		—		(0.79 )		(1.33 )		(1.22 )		8.73		1.53			695,060		0.58		0.58		5.63		72
4/1/2013 to 3/31/2014			10.26		0.58		0.06		0.64		(0.59 )		—		(0.36 )		(0.95 )		(0.31 )		9.95		6.65			1,211,146		0.55		0.55		5.79		89

Class R
1/1/18 to 12/31/18		$	8.41		0.42		(0.59 )		(0.17 )		(0.42 )		—		—		(0.42 )		(0.59 )		7.82		(2.10 )%		$	52		1.04 %		1.16 %		5.11 %		59 %
4/1/2017 to 12/31/2017 (6)			8.36		0.30		0.07		0.37		(0.30 )		(0.02 )		—		(0.32 )		0.05		8.41		4.45			119		1.04		1.20		4.80		41
4/1/2016 to 3/31/2017			7.80		0.43		0.56		0.99		(0.43 )		—		—		(0.43 )		0.56		8.36		12.90			130		1.04		1.04		5.32		87
4/1/2015 to 3/31/2016			8.72		0.44		(0.91 )		(0.47 )		(0.45 )		—		—		(0.45 )		(0.92 )		7.80		(5.52 )			573		1.04		1.04		5.29		76
4/1/2014 to 3/31/2015			9.94		0.49		(0.42 )		0.07		(0.50 )		—		(0.79 )		(1.29 )		(1.22 )		8.72		1.05			782		1.04		1.04		5.18		72
4/1/2013 to 3/31/2014			10.26		0.53		0.05		0.58		(0.54 )		—		(0.36 )		(0.90 )		(0.32 )		9.94		6.04			1,237		1.04		1.04		5.31		89

Class R6 (formerly Class IS)
1/1/18 to 12/31/18		$	8.42		0.44		(0.58 )		(0.14 )		(0.46 )		—		—		(0.46 )		(0.60 )		7.82		(1.74 )%		$	1,009		0.53 %		0.64 %		5.31 %		59 %
4/1/2017 to 12/31/2017 (6)			8.37		0.35		0.05		0.40		(0.33 )		(0.02 )		—		(0.35 )		0.05		8.42		4.85			45,035		0.54 (12)		0.62		5.50		41
8/1/2016 to 3/31/2017 (15)			8.17		0.33		0.18		0.51		(0.31 )		—		—		(0.31 )		0.20		8.37		6.34			42,695		0.54		0.54		5.86		87

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Investment Grade Tax-Exempt Bond Fund
Class A
1/1/18 to 12/31/18		$	11.75		0.28		(0.23 )		0.05		(0.28 )		—		(0.07 )		(0.35 )		(0.30 )		11.45		0.45 %		$	9,999		0.80 % (12)		1.00 %		2.47 %		105 %
4/1/2017 to 12/31/2017 (6)			11.65		0.22		0.10		0.32		(0.22 )		—		—		(0.22 )		0.10		11.75		2.76			11,066		0.80		0.96		2.46		130
4/1/2016 to 3/31/2017			12.24		0.26		(0.32 )		(0.06 )		(0.26 )		—		(0.27 )		(0.53 )		(0.59 )		11.65		(0.48 )			20,281		0.80		0.92		2.16		138
4/1/2015 to 3/31/2016			12.30		0.26		0.08		0.34		(0.26 )		—		(0.14 )		(0.40 )		(0.06 )		12.24		2.89			24,861		0.80		0.93		2.17		139
4/1/2014 to 3/31/2015			12.14		0.29		0.32		0.61		(0.29 )		—		(0.16 )		(0.45 )		0.16		12.30		5.09			29,439		0.80		0.91		2.37		144
4/1/2013 to 3/31/2014			12.47		0.26		(0.24 )		0.02		(0.26 )		—		(0.09 )		(0.35 )		(0.33 )		12.14		0.23			30,100		0.80		0.90		2.13		104

Class I
1/1/18 to 12/31/18		$	11.73		0.30		(0.23 )		0.07		(0.30 )		—		(0.07 )		(0.37 )		(0.30 )		11.43		0.60 %		$	307,001		0.65 % (12)		0.80 %		2.61 %		105 %
4/1/2017 to 12/31/2017 (6)			11.64		0.23		0.09		0.32		(0.23 )		—		—		(0.23 )		0.09		11.73		2.79 %			463,968		0.65		0.76		2.62 %		130
4/1/2016 to 3/31/2017			12.22		0.28		(0.31 )		(0.03 )		(0.28 )		—		(0.27 )		(0.55 )		(0.58 )		11.64		(0.24 )			519,784		0.65		0.70		2.30		138
4/1/2015 to 3/31/2016			12.29		0.28		0.07		0.35		(0.28 )		—		(0.14 )		(0.42 )		(0.07 )		12.22		2.96			629,435		0.65		0.68		2.32		139
4/1/2014 to 3/31/2015			12.13		0.31		0.32		0.63		(0.31 )		—		(0.16 )		(0.47 )		0.16		12.29		5.25			657,851		0.65		0.68		2.53		144
4/1/2013 to 3/31/2014			12.45		0.28		(0.23 )		0.05		(0.28 )		—		(0.09 )		(0.37 )		(0.32 )		12.13		0.48			643,828		0.64		0.64		2.29		104


Virtus Seix Short-Term Bond Fund
Class A
1/1/18 to 12/31/18		$	9.90		0.14		(0.06 )		0.08		(0.14 )		(0.01 )		—		(0.15 )		(0.07 )		9.83		0.81 %		$	2,028		0.80 %		1.68 %		1.43 %		93 %
4/1/2017 to 12/31/2017 (6)			9.95		0.07		(0.04 )		0.03		(0.07 )		(0.01 )		—		(0.08 )		(0.05 )		9.90		0.27			2,210		0.80		1.26		0.89		145
4/1/2016 to 3/31/2017			10.01		0.06		(0.06 )		—		(0.06 )		—		—		(0.06 )		(0.06 )		9.95		0.03			2,308		0.80		0.80		0.58		129
4/1/2015 to 3/31/2016			10.00		0.04		0.02		0.06		(0.05 )		—		—		(0.05 )		0.01		10.01		0.58			2,104		0.80		0.81		0.38		87
4/1/2014 to 3/31/2015			9.98		0.04		0.02		0.06		(0.04 )		—		—		(0.04 )		0.02		10.00		0.63			2,316		0.80		0.81		0.37		199
4/1/2013 to 3/31/2014			10.03		0.10		(0.05 )		0.05		(0.10 )		—		—		(0.10 )		(0.05 )		9.98		0.54			2,748		0.78		0.80		1.00		79

Class C
1/1/18 to 12/31/18		$	9.89		0.07		(0.06 )		0.01		(0.06 )		(0.01 )		—		(0.07 )		(0.06 )		9.83		0.14 %		$	1,461		1.57 %		2.48 %		0.66 %		93 %
4/1/2017 to 12/31/2017 (6)			9.94		0.02		(0.05 )		(0.03 )		(0.01 )		(0.01 )		—		(0.02 )		(0.05 )		9.89		(0.26 )			1,257		1.48		2.04		0.21		145
4/1/2016 to 3/31/2017			10.00		— (11 )		(0.06 )		(0.06 )		—		—		—		—		(0.06 )		9.94		(0.57 )			1,310		1.40		1.57		(0.03 )		129
4/1/2015 to 3/31/2016			10.00		(0.01 )		0.01		—		— (11 )		—		—		— (11 )		—		10.00		—			1,742		1.29		1.58		(0.10 )		87
4/1/2014 to 3/31/2015			9.97		(0.01 )		0.04		0.03		— (11 )		—		—		— (11 )		0.03		10.00		0.31			1,730		1.22		1.58		(0.06 )		199
4/1/2013 to 3/31/2014			10.02		0.02		(0.04 )		(0.02 )		(0.03 )		—		—		(0.03 )		(0.05 )		9.97		(0.24 )			1,899		1.56		1.56		0.23		79

Class I
1/1/18 to 12/31/18		$	9.86		0.16		(0.05 )		0.11		(0.16 )		(0.01 )		—		(0.17 )		(0.06 )		9.80		1.11 %		$	5,719		0.60 %		1.43 %		1.62 %		93 %
4/1/2017 to 12/31/2017 (6)			9.92		0.08		(0.05 )		0.03		(0.08 )		(0.01 )		—		(0.09 )		(0.06 )		9.86		0.31			7,918		0.60		0.91		1.05		145
4/1/2016 to 3/31/2017			9.98		0.08		(0.06 )		0.02		(0.08 )		—		—		(0.08 )		(0.06 )		9.92		0.23			52,024		0.60		0.69		0.77		129
4/1/2015 to 3/31/2016			9.98		0.06		0.01		0.07		(0.07 )		—		—		(0.07 )		—		9.98		0.68			49,749		0.60		0.68		0.58		87
4/1/2014 to 3/31/2015			9.95		0.05		0.04		0.09		(0.06 )		—		—		(0.06 )		0.03		9.98		0.93			50,689		0.60		0.67		0.52		199
4/1/2013 to 3/31/2014			10.00		0.12		(0.05 )		0.07		(0.12 )		—		—		(0.12 )		(0.05 )		9.95		0.75			38,400		0.58		0.58		1.22		79

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Short-Term Municipal Bond Fund
Class A
1/1/18 to 12/31/18		$	9.91		0.09		0.02		0.11		(0.10 )		—		— (11 )		(0.10 )		0.01		9.92		1.10 %		$	1,411		0.65 %		1.05 %		0.96 %		50 %
4/1/2017 to 12/31/2017 (6)			9.93		0.05		(0.01 )		0.04		(0.05 )		—		(0.01 )		(0.06 )		(0.02 )		9.91		0.39			1,765		0.65		0.95		0.70		56
4/1/2016 to 3/31/2017			9.98		0.05		(0.03 )		0.02		(0.06 )		—		(0.01 )		(0.07 )		(0.05 )		9.93		0.26			1,810		0.65		0.74		0.54		59
4/1/2015 to 3/31/2016			10.00		0.02		— (11 )		0.02		(0.02 )		—		(0.02 )		(0.04 )		(0.02 )		9.98		0.23			7,354		0.67		0.72		0.24		82
4/1/2014 to 3/31/2015			9.99		0.03		0.08		0.11		(0.03 )		—		(0.07 )		(0.10 )		0.01		10.00		1.06			3,863		0.70		0.75		0.26		148
4/1/2013 to 3/31/2014			10.01		0.01		0.01		0.02		(0.01 )		—		(0.03 )		(0.04 )		(0.02 )		9.99		0.25			5,900		0.65		0.82		0.10		260

Class I
1/1/18 to 12/31/18		$	9.91		0.11		0.02		0.13		(0.11 )		—		— (11 )		(0.11 )		0.02		9.93		1.37 %		$	19,043		0.48 %		0.89 %		1.12 %		50 %
4/1/2017 to 12/31/2017 (6)			9.93		0.07		(0.01 )		0.06		(0.07 )		—		(0.01 )		(0.08 )		(0.02 )		9.91		0.52			31,289		0.48		0.81		0.87		56
4/1/2016 to 3/31/2017			9.98		0.08		(0.04 )		0.04		(0.08 )		—		(0.01 )		(0.09 )		(0.05 )		9.93		0.40			26,710		0.48		0.66		0.75		59
4/1/2015 to 3/31/2016			10.00		0.04		— (11 )		0.04		(0.04 )		—		(0.02 )		(0.06 )		(0.02 )		9.98		0.41			32,184		0.51		0.62		0.41		82
4/1/2014 to 3/31/2015			9.99		0.04		0.08		0.12		(0.04 )		—		(0.07 )		(0.11 )		0.01		10.00		1.21			38,669		0.55		0.62		0.42		148
4/1/2013 to 3/31/2014			10.01		0.02		0.01		0.03		(0.02 )		—		(0.03 )		(0.05 )		(0.02 )		9.99		0.37			30,852		0.54		0.71		0.21		260

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Total Return Bond Fund
Class A
1/1/2018 to 12/31/2018		$	10.77		0.23		(0.28 )		(0.05 )		(0.20 )		—		—		(0.20 )		(0.25 )		10.52		(0.48 )%		$	10,717		0.70 %		0.85 %		2.18 %		169 %
4/1/2017 to 12/31/2017 (6)			10.77		0.15		—		0.15		(0.09 )		(0.06 )		—		(0.15 )		—		10.77		1.37			13,227		0.71 (12)		0.84		1.86		150
4/1/2016 to 3/31/2017			11.02		0.20		(0.06 )		0.14		(0.22 )		—		(0.17 )		(0.39 )		(0.25 )		10.77		1.22			27,284		0.70		0.70		1.85		210
4/1/2015 to 3/31/2016			11.11		0.17		(0.06 )		0.11		(0.19 )		—		(0.01 )		(0.20 )		(0.09 )		11.02		1.02			32,366		0.71		0.71		1.55		181
4/1/2014 to 3/31/2015			10.77		0.21		0.35		0.56		(0.22 )		—		—		(0.22 )		0.34		11.11		5.28			43,401		0.71		0.71		1.90		173
4/1/2013 to 3/31/2014			11.15		0.20		(0.28 )		(0.08 )		(0.20 )		—		(0.10 )		(0.30 )		(0.38 )		10.77		(0.70 )			41,134		0.70		0.70		1.82		217

Class I
1/1/2018 to 12/31/2018		$	10.42		0.24		(0.28 )		(0.04 )		(0.21 )		—		—		(0.21 )		(0.25 )		10.17		(0.32 )%		$	335,999		0.46 %		0.55 %		2.39 %		169 %
4/1/2017 to 12/31/2017 (6)			10.42		0.17		(0.01 )		0.16		(0.10 )		(0.06 )		—		(0.16 )		—		10.42		1.56			618,010		0.46		0.53		2.15		150
4/1/2016 to 3/31/2017			10.67		0.22		(0.07 )		0.15		(0.23 )		—		(0.17 )		(0.40 )		(0.25 )		10.42		1.44			790,997		0.46		0.46		2.10		210
4/1/2015 to 3/31/2016			10.75		0.19		(0.05 )		0.14		(0.21 )		—		(0.01 )		(0.22 )		(0.08 )		10.67		1.35			971,159		0.45		0.45		1.82		181
4/1/2014 to 3/31/2015			10.43		0.23		0.34		0.57		(0.25 )		—		—		(0.25 )		0.32		10.75		5.47			972,117		0.44		0.44		2.17		173
4/1/2013 to 3/31/2014			10.79		0.22		(0.26 )		(0.04 )		(0.22 )		—		(0.10 )		(0.32 )		(0.36 )		10.43		(0.31 )			1,022,101		0.41		0.41		2.12		217

Class R
1/1/2018 to 12/31/2018		$	10.42		0.20		(0.28 )		(0.08 )		(0.17 )		—		—		(0.17 )		(0.25 )		10.17		(0.79 )%		$	27,437		0.93 % (10)		0.93 %		1.95 %		169 %
4/1/2017 to 12/31/2017 (6)			10.42		0.13		(0.01 )		0.12		(0.06 )		(0.06 )		—		(0.12 )		—		10.42		1.18			31,959		0.99		1.00		1.62		150
4/1/2016 to 3/31/2017			10.67		0.16		(0.07 )		0.09		(0.17 )		—		(0.17 )		(0.34 )		(0.25 )		10.42		0.83			39,541		1.06		1.06		1.48		210
4/1/2015 to 3/31/2016			10.75		0.13		(0.05 )		0.08		(0.15 )		—		(0.01 )		(0.16 )		(0.08 )		10.67		0.74			50,402		1.06		1.06		1.21		181
4/1/2014 to 3/31/2015			10.43		0.17		0.33		0.50		(0.18 )		—		—		(0.18 )		0.32		10.75		4.83			64,539		1.05		1.06		1.56		173
4/1/2013 to 3/31/2014			10.80		0.16		(0.27 )		(0.11 )		(0.16 )		—		(0.10 )		(0.26 )		(0.37 )		10.43		(1.02 )			72,556		1.03		1.07		1.52		217

Class R6 (formerly Class IS)
1/1/2018 to 12/31/2018		$	10.42		0.26		(0.28 )		(0.02 )		(0.23 )		—		—		(0.23 )		(0.25 )		10.17		(0.17 )%		$	70,626		0.31 %		0.44 %		2.55 %		169 %
4/1/2017 to 12/31/2017 (6)			10.42		0.19		(0.02 )		0.17		(0.11 )		(0.06 )		—		(0.17 )		—		10.42		1.68			145,096		0.31		0.40		2.38		150
4/1/2016 to 3/31/2017			10.67		0.25		(0.08 )		0.17		(0.25 )		—		(0.17 )		(0.42 )		(0.25 )		10.42		1.58			101,022		0.31		0.31		2.40		210
4/1/2015 to 3/31/2016			10.75		0.21		(0.06 )		0.15		(0.22 )		—		(0.01 )		(0.23 )		(0.08 )		10.67		1.49			56,133		0.31		0.31		1.95		181
4/1/2014 to 3/31/2015 (7)			10.56		0.16		0.20		0.36		(0.17 )		—		—		(0.17 )		0.19		10.75		3.39			71,520		0.31		0.31		2.20		173

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix U.S. Government Securities Ultra-Short Bond Fund
Class A
7/24/2018 (16) to 12/31/2018		$	10.00		0.09		(0.01 )		0.08		(0.08 )		(0.01 )		—		(0.09 )		(0.01 )		9.99		0.79 %		$	5,497		0.63 % (10)		0.63 %		2.10 %		28 % (17)

Class I
1/1/2018 to 12/31/2018		$	10.01		0.19		(0.01 )		0.18		(0.19 )		(0.01 )		—		(0.20 )		(0.02 )		9.99		1.83 %		$	1,232,473		0.41 %		0.50 %		1.89 %		28 %
4/1/2017 to 12/31/2017 (6)			10.03		0.09		(0.01 )		0.08		(0.09 )		(0.01 )		—		(0.10 )		(0.02 )		10.01		0.82			1,343,042		0.41		0.47		1.17		48
4/1/2016 to 3/31/2017			10.03		0.07		0.03		0.10		(0.10 )		—		—		(0.10 )		—		10.03		0.98			1,367,242		0.42		0.42		0.72		77
4/1/2015 to 3/31/2016			10.12		0.06		(0.07 )		(0.01 )		(0.08 )		—		—		(0.08 )		(0.09 )		10.03		(0.11 )			1,557,899		0.41		0.41		0.57		52
4/1/2014 to 3/31/2015			10.12		0.06		0.02		0.08		(0.08 )		—		—		(0.08 )		—		10.12		0.77			1,665,888		0.39		0.39		0.55		34
4/1/2013 to 3/31/2014			10.17		0.03		(0.02 )		0.01		(0.06 )		—		—		(0.06 )		(0.05 )		10.12		0.13			1,993,215		0.38		0.38		0.31		36

Class R6 (formerly Class IS)
1/1/2018 to 12/31/2018		$	10.03		0.20		(0.01 )		0.19		(0.21 )		(0.01 )		—		(0.22 )		(0.03 )		10.00		1.88 %		$	32,940		0.26 %		0.37 %		2.01 %		28 %
4/1/2017 to 12/31/2017 (6)			10.04		0.10		— (11 )		0.10		(0.10 )		(0.01 )		—		(0.11 )		(0.01 )		10.03		1.04			43,072		0.26		0.33		1.32		48
8/1/2016 to 3/31/2017 (15)			10.04		0.08		—		0.08		(0.08 )		—		—		(0.08 )		—		10.04		0.87			32,657		0.26		0.26		1.12		77


Virtus Seix U.S. Mortgage Fund
Class A
1/1/2018 to 12/31/2018		$	11.09		0.20		(0.17 )		0.03		(0.20 )		(0.05 )		—		(0.25 )		(0.22 )		10.87		0.31 %		$	3,727		0.90 %		2.01 %		1.88 %		129 %
4/1/2017 to 12/31/2017 (6)			11.10		0.12		0.04		0.16		(0.11 )		(0.06 )		—		(0.17 )		(0.01 )		11.09		1.45			2,566		0.90		1.59		1.48		89
4/1/2016 to 3/31/2017			11.31		0.05		(0.04 )		0.01		(0.18 )		—		(0.04 )		(0.22 )		(0.21 )		11.10		0.04			3,594		0.90		0.98		0.41		118
4/1/2015 to 3/31/2016			11.29		0.08		0.11		0.19		(0.17 )		—		—		(0.17 )		0.02		11.31		1.72			6,560		0.90		1.10		0.76		223
4/1/2014 to 3/31/2015			10.88		0.16		0.47		0.63		(0.22 )		—		—		(0.22 )		0.41		11.29		5.86			5,201		0.89		1.43		1.45		165
4/1/2013 to 3/31/2014			11.14		0.11		(0.18 )		(0.07 )		(0.19 )		—		—		(0.19 )		(0.26 )		10.88		(0.58 )			1,721		0.86		1.27		1.02		236

Class C
1/1/2018 to 12/31/2018		$	11.11		0.12		(0.17 )		(0.05 )		(0.12 )		(0.05 )		—		(0.17 )		(0.22 )		10.89		(0.43 )%		$	3,174		1.65 %		2.00 %		1.09 %		129 %
4/1/2017 to 12/31/2017 (6)			11.11		0.05		0.06		0.11		(0.05 )		(0.06 )		—		(0.11 )		—		11.11		0.99 %			3,722		1.62		1.98		065		89
4/1/2016 to 3/31/2017			11.33		(0.03 )		(0.06 )		(0.09 )		(0.09 )		—		(0.04 )		(0.13 )		(0.22 )		11.11		(0.79 )			4,300		1.65		1.71		(0.26 )		118
4/1/2015 to 3/31/2016			11.32		— (11 )		0.10		0.10		(0.09 )		—		—		(0.09 )		0.01		11.33		0.88			5,478		1.65		1.79		0.01		223
4/1/2014 to 3/31/2015			10.90		0.09		0.47		0.56		(0.14 )		—		—		(0.14 )		0.42		11.32		5.15			3,989		1.65		2.15		0.79		165
4/1/2013 to 3/31/2014			11.16		0.03		(0.18 )		(0.15 )		(0.11 )		—		—		(0.11 )		(0.26 )		10.90		(1.36 )			4,780		1.66		2.04		0.23		236

Class I
1/1/2018 to 12/31/2018		$	11.11		0.22		(0.17 )		0.05		(0.22 )		(0.05 )		—		(0.27 )		(0.22 )		10.89		0.52 %		$	17,615		0.70 %		1.08 %		2.05 %		129 %
4/1/2017 to 12/31/2017 (6)			11.12		0.13		0.05		0.18		(0.13 )		(0.06 )		—		(0.19 )		(0.01 )		11.11		1.60 %			18,967		0.70		1.08		1.52		89
4/1/2016 to 3/31/2017			11.33		0.07		(0.04 )		0.03		(0.20 )		—		(0.04 )		(0.24 )		(0.21 )		11.12		0.24			17,620		0.70		0.86		0.66		118
4/1/2015 to 3/31/2016			11.32		0.12		0.09		0.21		(0.20 )		—		—		(0.20 )		0.01		11.33		1.84			25,068		0.70		0.86		1.03		223
4/1/2014 to 3/31/2015			10.90		0.19		0.48		0.67		(0.25 )		—		—		(0.25 )		0.42		11.32		6.16			3,650		0.69		1.26		1.75		165
4/1/2013 to 3/31/2014			11.16		0.12		(0.16 )		(0.04 )		(0.22 )		—		—		(0.22 )		(0.26 )		10.90		(0.38 )			3,692		0.66		1.10		1.08		236

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Tax Return of Capital		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Seix Ultra-Short Bond Fund
Class A
7/24/2018 (16) to 12/31/2018		$	9.97		0.11		(0.06 )		0.05		(0.10 )		—		—		(0.10 )		(0.05 )		9.92		0.48 %		$	1,698		0.65 %		0.84 %		2.46 %		112 % (17)

Class I
1/1/2018 to 12/31/2018		$	9.97		0.22		(0.06 )		0.16		(0.22 )		—		—		(0.22 )		(0.06 )		9.91		1.61 %		$	60,041		0.40 %		0.62 %		2.21 %		112 %
4/1/2017 to 12/31/2017 (6)			9.96		0.11		0.01		0.12		(0.11 )		—		—		(0.11 )		0.01		9.97		1.21			59,548		0.42 (12)		0.56		1.44		53
4/1/2016 to 3/31/2017			9.93		0.10		0.04		0.14		(0.11 )		—		—		(0.11 )		0.03		9.96		1.41			87,344		0.40		0.40		1.05		142
4/1/2015 to 3/31/2016			9.97		0.08		(0.04 )		0.04		(0.08 )		—		—		(0.08 )		(0.04 )		9.93		0.42			104,950		0.38		0.38		0.77		59
4/1/2014 to 3/31/2015			9.98		0.06		— (11 )		0.06		(0.07 )		—		—		(0.07 )		(0.01 )		9.97		0.55			142,680		0.37		0.37		0.57		54
4/1/2013 to 3/31/2014			9.98		0.07		0.01		0.08		(0.08 )		—		—		(0.08 )		—		9.98		0.76			122,053		0.35		0.35		0.65		134

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Silvant Large-Cap Growth Stock Fund
Class A
1/1/2018 to 12/31/2018		$	5.49		(0.02 )		0.03		0.01		—		(0.90 )		(0.90 )		(0.89 )		4.60		(0.83 )%		$	45,779		1.23 %		1.60 %		(0.29 )%		11 %
4/1/2017 to 12/31/2017 (6)			7.20		(0.01 )		1.21		1.20		—		(2.91 )		(2.91 )		(1.71 )		5.49		17.88			63,051		1.23		1.46		(0.09 )		14
4/1/2016 to 3/31/2017			7.81		(0.02 )		0.57		0.55		—		(1.16 )		(1.16 )		(0.61 )		7.20		7.83			60,900		1.23		1.24		(0.27 )		42
4/1/2015 to 3/31/2016			8.75		(0.03 )		(0.11 )		(0.14 )		—		(0.80 )		(0.80 )		(0.94 )		7.81		(2.13 )			62,115		1.20		1.21		(0.39 )		10
4/1/2014 to 3/31/2015			8.35		(0.02 )		1.20		1.18		—		(0.78 )		(0.78 )		0.40		8.75		14.83			65,953		1.18		1.19		(0.26 )		13
4/1/2013 to 3/31/2014			7.27		(0.02 )		1.96		1.94		—		(0.86 )		(0.86 )		1.08		8.35		26.99			64,288		1.19		1.20		(0.20 )		21

Class C
1/1/2018 to 12/31/2018		$	2.42		(0.02 )		0.04		0.02		—		(0.90 )		(0.90 )		(0.88 )		1.54		(1.44 )%		$	31,782		1.90 %		2.05 %		(0.95 )%		11 %
4/1/2017 to 12/31/2017 (6)			4.62		(0.03 )		0.74		0.71		—		(2.91 )		(2.91 )		(2.20 )		2.42		17.32 %			36,930		1.91		2.02		(0.77 )		14
4/1/2016 to 3/31/2017			5.45		(0.05 )		0.38		0.33		—		(1.16 )		(1.16 )		(0.83 )		4.62		7.16			36,141		1.90		1.90		(0.95 )		42
4/1/2015 to 3/31/2016			6.38		(0.06 )		(0.07 )		(0.13 )		—		(0.80 )		(0.80 )		(0.93 )		5.45		(2.77 )			40,086		1.88		1.89		(1.06 )		10
4/1/2014 to 3/31/2015			6.32		(0.06 )		0.90		0.84		—		(0.78 )		(0.78 )		0.06		6.38		14.20			46,678		1.86		1.87		(0.90 )		13
4/1/2013 to 3/31/2014			5.71		(0.06 )		1.53		1.47		—		(0.86 )		(0.86 )		0.61		6.32		26.09			34,249		1.88		1.88		(0.90 )		21

Class I
1/1/2018 to 12/31/2018		$	7.53		— (11 )		— 11 )		—		—		(0.90 )		(0.90 )		(0.90 )		6.63		(0.75 )%		$	19,234		0.97 %		1.10 %		(0.02 )%		11 %
4/1/2017 to 12/31/2017 (6)			8.92		0.01		1.51		1.52		—		(2.91 )		(2.91 )		(1.39 )		7.53		18.04			24,621		0.97		1.22		0.22		14
4/1/2016 to 3/31/2017			9.38		— (11 )		0.70		0.70		—		(1.16 )		(1.16 )		(0.46 )		8.92		8.14			92,638		0.97		1.26		(0.02 )		42
4/1/2015 to 3/31/2016			10.32		(0.02 )		(0.12 )		(0.14 )		—		(0.80 )		(0.80 )		(0.94 )		9.38		(1.79 )			110,562		0.97		1.24		(0.15 )		10
4/1/2014 to 3/31/2015			9.70		—		1.40		1.40		—		(0.78 )		(0.78 )		0.62		10.32		15.03			127,236		0.94		1.17		(0.04 )		13
4/1/2013 to 3/31/2014			8.31		0.01		2.24		2.25		—		(0.86 )		(0.86 )		1.39		9.70		27.35			188,294		0.92		1.08		0.07		21

Class R6 (formerly Class IS)
1/1/2018 to 12/31/2018		$	7.59		— (11 )		— (11 )		—		—		(0.90 )		(0.90 )		(0.90 )		6.69		(0.73 )%		$	110		0.90 %		0.95 %		0.03 %		11 %
4/1/2017 to 12/31/2017 (6)			8.94		0.02		1.54		1.56		—		(2.91 )		(2.91 )		(1.35 )		7.59		18.53			464		0.91		0.93		0.28		14
4/1/2016 to 3/31/2017			9.39		0.01		0.70		0.71		—		(1.16 )		(1.16 )		(0.45 )		8.94		8.23			24,261		0.90		0.90		(0.05 )		42
4/1/2015 to 3/31/2016			10.33		(0.01 )		(0.13 )		(0.14 )		—		(0.80 )		(0.80 )		(0.94 )		9.39		(1.80 )			37,087		0.88		0.89		(0.06 )		10
4/1/2014 to 3/31/2015 (7)			9.97		0.01		1.13		1.14		—		(0.78 )		(0.78 )		0.36		10.33		12.02			52,967		0.85		0.87		0.16		13

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)			Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)(4)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)		Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus Silvant Small-Cap Growth Stock Fund
Class A
1/1/2018 to 12/31/2018		$	6.92		(0.06 )			(0.36 )		(0.42 )		—		(0.82 )		(0.82 )		(1.24 )		5.68		(6.69 )%		$	5,725		1.41 % (12)		1.68 %		(0.88 )%		36 %
4/1/2017 to 12/31/2017 (6)			7.28		(0.04 )			0.80		0.76		—		(1.12 )		(1.12 )		(0.36 )		6.92		10.73			6,840		1.42		1.64		(0.70 )		24
4/1/2016 to 3/31/2017			7.13		(0.04 )		$	1.38		1.34		—		(1.19 )		(1.19 )		0.15		7.28		19.30			7,008		1.41		1.43		(0.55 )		56
4/1/2015 to 3/31/2016			13.23		(0.08 )			(1.35 )		(1.43 )		—		(4.67 )		(4.67 )		(6.10 )		7.13		(13.38 )			6,856		1.37		1.37		(0.76 )		73
4/1/2014 to 3/31/2015			15.30		(0.13 )			0.56		0.43		—		(2.50 )		(2.50 )		(2.07 )		13.23		4.21			9,889		1.32		1.32		(0.96 )		31
4/1/2013 to 3/31/2014			14.46		(0.15 )			3.90		3.75		—		(2.91 )		(2.91 )		0.84		15.30		25.92			10,880		1.29		1.29		(0.94 )		90

Class C
1/1/2018 to 12/31/2018		$	2.58		(0.04 )			(0.11 )		(0.15 )		—		(0.82 )		(0.82 )		(0.97 )		1.61		(7.57 )%		$	3,565		2.07 % (12)		2.45 %		(1.54 )%		36 %
4/1/2017 to 12/31/2017 (6)			3.37		(0.03 )			0.36		0.33		—		(1.12 )		(1.12 )		(0.79 )		2.58		10.46			4,319		2.09		2.39		(1.37 )		24
4/1/2016 to 3/31/2017			3.88		(0.05 )			0.73		0.68		—		(1.19 )		(1.19 )		(0.51 )		3.37		18.39			4,758		2.08		2.09		(1.21 )		56
4/1/2015 to 3/31/2016			9.53		(0.10 )			(0.88 )		(0.98 )		—		(4.67 )		(4.67 )		(5.65 )		3.88		(13.91 )			4,686		2.02		2.02		(1.40 )		73
4/1/2014 to 3/31/2015			11.82		(0.17 )			0.38		0.21		—		(2.50 )		(2.50 )		(2.29 )		9.53		3.55			6,397		1.96		1.96		(1.60 )		31
4/1/2013 to 3/31/2014			11.77		(0.20 )			3.16		2.96		—		(2.91 )		(2.91 )		0.05		11.82		25.10			7,255		1.94		1.94		(1.59 )		90

Class I
1/1/2018 to 12/31/2018		$	8.78		(0.07 )			(0.47 )		(0.54 )		—		(0.82 )		(0.82 )		(1.36 )		7.42		(6.64 )%		$	14,513		1.29 % (12)		1.53 %		(0.76 )%		36 %
4/1/2017 to 12/31/2017 (6)			8.95		(0.04 )			0.99		0.95		—		(1.12 )		(1.12 )		(0.17 )		8.78		10.86		$	18,637		1.30		1.53		(0.58 )		24
4/1/2016 to 3/31/2017			8.52		(0.04 )			1.66		1.62		—		(1.19 )		(1.19 )		0.43		8.95		19.45			26,929		1.29		1.43		(0.44 )		56
4/1/2015 to 3/31/2016			14.83		(0.10 )			(1.54 )		(1.64 )		—		(4.67 )		(4.67 )		(6.31 )		8.52		(13.36 )			36,436		1.30		1.39		(0.74 )		73
4/1/2014 to 3/31/2015			16.82		(0.14 )			0.65		0.51		—		(2.50 )		(2.50 )		(1.99 )		14.83		4.31			126,223		1.28		1.34		(0.92 )		31
4/1/2013 to 3/31/2014			15.66		(0.16 )			4.23		4.07		—		(2.91 )		(2.91 )		1.16		16.82		25.98			170,409		1.26		1.31		(0.91 )		90

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain (Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value		Net Asset Value End of Period		Total Return (2)		Net Assets End of Period (in thousands)			Ratio of Net Expenses to Average Net Assets (3)(5)			Ratio of Gross Expenses to Average Net Assets (3)(5)		Ratio of Net Investment Income (Loss) to Average Net Assets (3)		Portfolio Turnover Rate (4)
Virtus WCM International Equity Fund
Class A
1/1/2018 to 12/31/2018		$	11.90		— (11 )		(0.94 )		(0.94 )		(0.01 )		—		(0.01 )		(0.95 )		10.95		(7.90 )%		$	22,233		1.42 %			1.44 %		0.03 %		37 %
4/1/2017 to 12/31/2017 (6)			10.05		0.02		1.84		1.86		(0.01 )		—		(0.01 )		1.85		11.90		18.50			18,567		1.43			1.56		0.20		17
4/1/2016 to 3/31/2017			9.18		0.01		0.93		0.94		(0.03 )		(0.04 )		(0.07 )		0.87		10.05		10.41			14,116		1.33 (18)			1.43 (18)		0.12		37
4/1/2015 to 3/31/2016			10.34		0.09		(0.27 )		(0.18 )		(0.06 )		(0.92 )		(0.98 )		(1.16 )		9.18		(1.77 )			3,756		1.51			1.77		0.89		114
4/1/2014 to 3/31/2015			12.35		0.20		(0.87 )		(0.67 )		(0.22 )		(1.12 )		(1.34 )		(2.01 )		10.34		(4.87 )			4,123		1.57			1.66		1.79		41
4/1/2013 to 3/31/2014			11.51		0.20		2.00		2.20		(1.14 )		(0.22 )		(1.36 )		0.84		12.35		19.72			4,802		1.47			1.47		1.66		43

Class I
1/1/2018 to 12/31/2018		$	12.09		0.03		(0.96 )		(0.93 )		(0.03 )		—		(0.03 )		(0.96 )		11.13		(7.69 )%		$	67,543		1.20 % (9)			1.19 %		0.28 %		37 %
4/1/2017 to 12/31/2017 (6)			10.19		0.04		1.87		1.91		(0.01 )		—		(0.01 )		1.90		12.09		18.79			70,342		1.20			1.27		0.42		17
4/1/2016 to 3/31/2017			9.30		0.03		0.94		0.97		(0.04 )		(0.04 )		(0.08 )		0.89		10.19		10.54			51,120		1.14 (18)			1.24 (18)		0.34		37
4/1/2015 to 3/31/2016			10.45		0.13		(0.29 )		(0.16 )		(0.07 )		(0.92 )		(0.99 )		(1.15 )		9.30		(1.59 )			28,756		1.30			1.67		1.28		114
4/1/2014 to 3/31/2015			12.45		0.25		(0.90 )		(0.65 )		(0.23 )		(1.12 )		(1.35 )		(2.00 )		10.45		(4.59 )			19,023		1.37			1.48		2.15		41
4/1/2013 to 3/31/2014			11.64		0.55		1.65		2.20		(1.17 )		(0.22 )		(1.39 )		0.81		12.45		19.52			26,932		1.20			1.20		4.55 (19)		43

Class R6 (formerly Class IS)
1/1/2018 to 12/31/2018 (20)		$	12.11		0.05		(0.97 )		(0.92 )		(0.04 )		—		(0.04 )		(0.96 )		11.15		(7.63 )%		$	48		1.10 %			1.11 %		0.43 %		37 %
4/1/2017 to 12/31/2017 (6)			10.20		0.04		1.89		1.93		(0.02 )		—		(0.02 )		1.91		12.11		18.89			9,279		1.10			1.19		0.42		17
4/1/2016 to 3/31/2017			9.31		0.05		0.93		0.98		(0.05 )		(0.04 )		(0.09 )		0.89		10.20		10.62			6,558		1.03 (18)			1.14 (18)		0.49		37
9/1/2015 to 3/31/2016 (21)			9.85		— (11 )		0.38		0.38		—		(0.92 )		(0.92 )		(0.54 )		9.31		3.81			5,832		1.14			1.54		0.09		114


Virtus Zevenbergen Innovative Growth Stock Fund
Class A
1/1/2018 to 12/31/2018		$	19.96		(0.33 )		2.57		2.24		—		(1.37 )		(1.37 )		0.87		20.83		10.80 %		$	24,902		1.48	% (9)(12)		1.47 %		(1.35 )%		103 %
4/1/2017 to 12/31/2017 (6)			18.56		(0.21 )		3.74		3.53		—		(2.13 )		(2.13 )		1.40		19.96		19.18			5,484		1.51			1.66		(1.40 )		50
4/1/2016 to 3/31/2017			18.37		(0.26 )		3.67		3.41		—		(3.22 )		(3.22 )		0.19		18.56		20.42			6,375		1.50			1.55		(1.39 )		64
4/1/2015 to 3/31/2016			20.76		(0.29 )		(0.57 )		(0.86 )		—		(1.53 )		(1.53 )		(2.39 )		18.37		(4.96 )			8,127		1.49			1.49		(1.38 )		59
4/1/2014 to 3/31/2015			20.53		(0.28 )		1.17		0.89		—		(0.66 )		(0.66 )		0.23		20.76		4.47			10,535		1.45			1.45		(1.34 )		42
4/1/2013 to 3/31/2014			15.16		(0.24 )		6.80		6.56		—		(1.19 )		(1.19 )		5.37		20.53		43.45			19,950		1.40			1.40		(1.18 )		49
4/1/2012 to 3/31/2013			15.54		(0.18 )		0.42		0.24		—		(0.62 )		(0.62 )		(0.38 )		15.16		1.63			3,580		1.49			1.53		(1.24 )		24


Class I
1/1/2018 to 12/31/2018		$	21.10		(0.30 )		2.72		2.42		—		(1.37 )		(1.37 )		1.05		22.15		11.07 %		$	72,404		1.27	% (9)(12)		1.23 %		(1.15 )%		103 %
4/1/2017 to 12/31/2017 (6)			19.49		(0.19 )		3.93		3.74		—		(2.13 )		(2.13 )		1.61		21.10		19.34			17,630		1.31			1.50		(1.19 )		50
4/1/2016 to 3/31/2017			19.11		(0.23 )		3.83		3.60		—		(3.22 )		(3.22 )		0.38		19.49		20.63			22,330		1.30			1.44		(1.18 )		64
4/1/2015 to 3/31/2016			21.49		(0.26 )		(0.59 )		(0.85 )		—		(1.53 )		(1.53 )		(2.38 )		19.11		(4.74 )			18,203		1.31			1.39		(1.20 )		59
4/1/2014 to 3/31/2015			21.20		(0.26 )		1.21		0.95		—		(0.66 )		(0.66 )		0.29		21.49		4.61			24,321		1.31			1.34		(1.20 )		42
4/1/2013 to 3/31/2014			15.60		(0.22 )		7.01		6.79		—		(1.19 )		(1.19 )		5.60		21.20		43.70			39,495		1.29			1.37		(1.08 )		49

(1)

Calculated using average shares outstanding.

(2)

Sales charges where applicable are not reflected in the Total Return calculation.

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Financial Highlights (continued)

(3)

Annualized for periods less than one year.

(4)

Not annualized for periods less than one year.

(5)

The Fund will also indirectly bear its prorated share of expenses of any underlying funds in which it invests. Such expenses are not included in the calculation of this ratio.

(6)

The Fund changed its fiscal period end to December 31 during the period.

(7)

R6 (formerly IS) Shares commenced operations on August 1, 2014 for the predecessor fund (see Note 1 in the Notes to Financial Statements in the Annual Report).

(8)

The ratio excludes expenses waived/reimbursed net of amount recaptured. If expenses waived/reimbursed net of amount recaptured were included, the ratio would have been higher than the ratio shown.

(9)

See note 3D in the Notes to Financial Statements in the Annual Report for information on recapture of expenses previously waived.

(10)

The Fund and/or specific share class, is currently under its expense limitation.

(11)

Rounds to less than $0.005 per share or less than 0.01%, as applicable.

(12)

Due to a change in expense cap, the ratio shown is a blended expense ratio.

(13)

R6 (formerly IS) Shares commenced operations on August 3, 2015 for the predecessor fund (see Note 1 in the Notes to Financial Statements in the Annual Report).

(14)

R6 (formerly IS) Shares commenced operations on February 2, 2015 for the predecessor fund (see Note 1 in the Notes to Financial Statements in the Annual Report).

(15)

R6 (formerly IS) Shares commenced operations on August 1, 2016 for the predecessor fund (see Note 1 in the Notes to Financial Statements in the Annual Report).

(16)

Inception date.

(17)

Portfolio turnover is representative of the Fund for the entire year ended December 31, 2018.

(18)

Net investment income per share and the ratio of net investment income to average net assets include a non-recurring refund for overbilling of prior years’ custodian out-of-pocket fees which amounted to $0.01 per share and 0.09%, 0.07% and 0.07% of average net assets for Class A, Class I and Class IS, respectively.

(19)

The amount shown for the net investment income ratio does not represent the actual pro rata amount allocated to the share class due to large redemptions during the year.

(20)

From November 9 through November 13, 2018, the Fund’s Class R6 shares did not have any investors, though the net asset value continued to be calculated using another share class adjusted for class expenses.

(21)

R6 (formerly IS) Shares commenced operations on September 1, 2015 for the predecessor fund (see Note 1 in the Notes to Financial Statements in the Annual Report).

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This Appendix A is part of, and is incorporated into, the prospectus.

Appendix A
Intermediary Sales Charge Discounts and Waivers

Specific intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or CDSC waivers, which are discussed below. In all instances, it is the purchaser's responsibility to notify the fund or the purchaser's financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, in order to receive these waivers or discounts shareholders will have to purchase fund shares through another intermediary offering such waivers or discounts or directly from the fund if the fund offers such waivers or discounts. Please see the section entitled “Sales Charges – What arrangement is best for you?” for more information on sales charges and waivers available for different classes.

Ameriprise Financial

Effective June 1, 2018, shareholders purchasing fund shares through an Ameriprise Financial platform or account will be eligible for the following front-end sales charge waivers and discounts, which may differ from those disclosed elsewhere in this fund’s prospectus or SAI.

•

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.

•

Shares purchased through an Ameriprise Financial investment advisory program (if an Advisory or similar share class for such investment advisory program is not available).

•

Shares purchased by third party investment advisors on behalf of their advisory clients through Ameriprise Financial’s platform (if an Advisory or similar share class for such investment advisory program is not available).

•

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the same fund family).

•

Shares exchanged from Class C shares of the same fund in the month of or following the 10-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to such shares following a shorter holding period, that waiver will apply to exchanges following such shorter period. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares for load waived shares, that waiver will also apply to such exchanges.

•

Employees and registered representatives of Ameriprise Financial or its affiliates and their immediate family members.

•

Shares purchased by or through qualified accounts (including IRAs, Coverdell Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit plans) that are held by a covered family member, defined as an Ameriprise financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor’s lineal descendant (son, step-son, daughter, step-daughter, grandson, granddaughter, great grandson, great granddaughter) or any spouse of a covered family member who is a lineal descendant.

•

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e. Rights of Reinstatement).

Merrill Lynch

Effective April 10, 2017, shareholders purchasing fund shares through a Merrill Lynch platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this fund's prospectus or SAI.

Front-end Sales Load Waivers on Class A Shares available at Merrill Lynch

•

Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan.

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•

Shares purchased by or through a 529 Plan.

•

Shares purchased through a Merrill Lynch affiliated investment advisory program.

•

Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch's platform.

•

Shares of funds purchased through the Merrill Edge Self-Directed platform.

•

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).

•

Shares exchanged from Class C (i.e. level-load) shares of the same fund in the month of or following the 10-year anniversary of the purchase date.

•

Employees and registered representatives of Merrill Lynch or its affiliates and their family members.

•

Trustees of the fund, and employees of the fund's investment adviser or any of its affiliates, as described in this prospectus.

•

CDSC Waivers on Class A Shares and Class C Shares available at Merrill Lynch

•

Death or disability of the shareholder.

•

Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus.

•

Return of excess contributions from an IRA Account.

•

Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70½.

•

Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch.

•

Shares acquired through a right of reinstatement.

•

Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A and C shares only).

Front-end Load Discounts on Class A Shares Available at Merrill Lynch: Breakpoints, Rights of Accumulation & Letters of Intent

•

Breakpoints as described in this prospectus.

•

Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.

•

Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time.

Morgan Stanley

Effective July 1, 2018, shareholders purchasing fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers with respect to Class A shares, which may differ from and may be more limited than those disclosed elsewhere in this fund’s Prospectus or SAI. Front-end Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth Management.

Front-end Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth Management

•

Morgan Stanley employee and employee-related accounts according to Morgan Stanley’s account linking rules.

Virtus Mutual Funds 201

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•

Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund.

•

Shares purchased through a Morgan Stanley self-directed brokerage account.

•

Class C (i.e., level-load) Shares that are no longer subject to a contingent deferred sales charge and are converted to Class A Shares of the same fund pursuant to Morgan Stanley Wealth Management’s share class conversion program.

•

Shares purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge.

Raymond James & Associates, Inc., Raymond James Financial Services & Raymond James affiliates (“Raymond James”)

Effective March 1, 2019, shareholders purchasing fund shares through a Raymond James platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this fund’s prospectus or SAI.

Front-end Sales Load Waivers on Class A Shares available at Raymond James

•

Shares purchased in an investment advisory program.

•

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).

•

Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.

•

A shareholder in the Fund’s Class C shares will have their shares converted at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of Raymond James.

CDSC Waivers on Class A Shares and Class C Shares available at Raymond James

•

Death or disability of the shareholder.

•

Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus.

•

Return of excess contributions from an IRA Account.

•

Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70½ as described in the Fund’s prospectus.

•

Shares sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.

•

Shares acquired through a right of reinstatement.

Front-end Load Discounts on Class A Shares Available at Raymond James: Breakpoints, and/or Rights of Accumulation

•

Breakpoints as described in this prospectus.

•

Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the rights of accumulation calculation only if the shareholder notifies his or her financial advisor about such assets.

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Virtus Mutual Funds
P.O. Box 9874
Providence, RI 02940-8074

ADDITIONAL INFORMATION

You can find more information about the funds in the following documents:

Appendix A – Intermediary Sales Charge Discounts and Waivers

Appendix A – Intermediary Sales Charge Discounts and Waivers contains more information about specific sales charge discounts and waivers available for shareholders who purchase fund shares through a specific intermediary. Appendix A is incorporated by reference and is legally part of this prospectus.

Annual and Semiannual Reports Annual and semiannual reports contain more information about the funds’ investments. The annual report discusses the market conditions and investment strategies that significantly affected the funds’ performance during the last fiscal year.

Statement of Additional Information (SAI) The SAI contains more detailed information about the funds. It is incorporated by reference and is legally part of the prospectus.

To obtain free copies of these documents, you can download copies from the Our Products section of virtus.com , or you can request copies by calling Virtus Fund Services toll-free at 800-243-1574. You may also call this number to request other information about the funds or to make shareholder inquiries.

Information about the funds (including the SAI) can be reviewed and copied at the Securities and Exchange Commission’s (“SEC”) Public Reference Room in Washington, DC. For information about the operation of the Public Reference Room, call 202-551-8090. Reports and other information about the funds are available in the EDGAR database on the SEC’s Internet site at sec.gov . You may also obtain copies upon payment of a duplicating fee by writing the Public Reference Section of the SEC, Washington, DC 20549-6009 or by electronic request at publicinfo@sec.gov .

Virtus Fund Services: 800-243-1574

Daily NAV Information

The daily NAV for each fund may be obtained from the Our Products section of virtus.com .

	Investment Company Act File No. 811-07705			4-19

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Virtus Asset Trust

STATEMENT OF ADDITIONAL INFORMATION

April 30, 2019

Virtus Asset Trust (the “Trust”) is an open-end management investment company issuing shares in 20 separate series or “Funds”, all of which are publicly offered and described herein:

TICKER SYMBOL BY CLASS

FUND

Virtus Ceredex Large-Cap Value Equity Fund

SVIIX

SVIFX

STVTX

STVZX

Virtus Ceredex Mid-Cap Value Equity Fund

SAMVX

SMVFX

SMVTX

SMVZX

Virtus Ceredex Small-Cap Value Equity Fund

SASVX

STCEX

SCETX

VVERX

Virtus Seix Core Bond Fund

STGIX

STIGX

SCIGX

STGZX

Virtus Seix Corporate Bond Fund

SAINX

STIFX

STICX

Virtus Seix Floating Rate High Income Fund

SFRAX

SFRCX

SAMBX

SFRZX

Virtus Seix High Grade Municipal Bond Fund

SFLTX

SCFTX

Virtus Seix High Income Fund

SAHIX

STHTX

STHIX

STHZX

Virtus Seix High Yield Fund

HYPSX

SAMHX

HYLSX

HYIZX

Virtus Seix Investment Grade Tax-Exempt Bond Fund

SISIX

STTBX

Virtus Seix Short-Term Bond Fund

STSBX

SCBSX

SSBTX

Virtus Seix Short-Term Municipal Bond Fund

SMMAX

CMDTX

Virtus Seix Total Return Bond Fund

CBPSX

SAMFX

SCBLX

SAMZX

Virtus Seix U.S. Government Securities Ultra-Short Bond Fund

SSAGX

SIGVX

SIGZX

Virtus Seix U.S. Mortgage Fund

SLTMX

SCLFX

SLMTX

Virtus Seix Ultra-Short Bond Fund

SASSX

SISSX

Virtus Silvant Large-Cap Growth Stock Fund

STCIX

STCFX

STCAX

STCZX

Virtus Silvant Small-Cap Growth Stock Fund

SCGIX

SSCFX

SSCTX

Virtus WCM International Equity Fund

SCIIX

STITX

SCIZX

Virtus Zevenbergen Innovative Growth Stock Fund

SAGAX

SCATX

This Statement of Additional Information (“SAI”) relates to the Class A, Class C, Class I, Class R and Class R6 shares of the Funds (defined below). This SAI is not a prospectus, and it should be read in conjunction with the Prospectuses for the Funds dated April 30, 2019, as described below and as supplemented and amended from time to time. Each Fund’s Prospectuses are incorporated by reference into this SAI, and the portions of this SAI that relate to each Fund have been incorporated by reference into such Fund’s Prospectuses. The portions of this SAI that do not relate to a Fund do not form a part of such Fund’s SAI, have not been incorporated by reference into such Fund’s Prospectuses and should not be relied upon by investors in such Fund.

The Prospectuses may be obtained by downloading them from virtus.com ; by calling Virtus Mutual Funds at 800-243-1574; or by writing to the Distributor at One Financial Plaza, Hartford, CT 06103.

Capitalized terms used and not defined herein have the same meanings as those used in the Prospectuses.

The audited financial statements for the Funds appear in each Fund’s annual report for the fiscal year ended December 31, 2018. The financial statements from the foregoing annual report are incorporated herein by reference. Shareholders may obtain a copy of the Funds’ Annual Report dated December 31, 2018, without charge, by calling 800-243-1574 or by downloading it from virtus.com .

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Glossary

	1933 Act			The Securities Act of 1933, as amended
	1940 Act			The Investment Company Act of 1940, as amended
	ACH			Automated Clearing House, a nationwide electronic money transfer system that provides for the inter-bank clearing of credit and debit transactions and for the exchange of information among participating financial institutions
	Administrator			The Trust’s administrative agent, Virtus Fund Services, LLC
	ADRs			American Depositary Receipts
	ADSs			American Depositary Shares
	Adviser			The investment adviser to the Funds, Virtus Fund Advisers, LLC, formerly RidgeWorth Capital Management LLC
	BNY Mellon			BNY Mellon Investment Servicing (US) Inc., the sub-administrative and accounting agent and sub-transfer agent for the Funds
	Board			The Board of Trustees of Virtus Asset Trust (also referred to herein as the “Trustees”)
	CCO			Chief Compliance Officer
	CDRs			Continental Depositary Receipts (another name for EDRs)
	CDSC			Contingent Deferred Sales Charge
	CEA			Commodity Exchange Act, which is the U.S. law governing trading in commodity futures
	Ceredex			Ceredex Value Advisors LLC, subadviser to the Ceredex Large-Cap Value Equity Fund, Ceredex Mid-Cap Value Equity Fund and Ceredex Small-Cap Value Equity Fund
	Ceredex Funds			Collectively, Ceredex Large-Cap Value Equity Fund, Ceredex Mid-Cap Value Equity Fund and Ceredex Small-Cap Value Equity Fund
	Ceredex Large-Cap Value Equity Fund			Virtus Ceredex Large-Cap Value Equity Fund
	Ceredex Mid-Cap Value Equity Fund			Virtus Ceredex Mid-Cap Value Equity Fund
	Ceredex Small-Cap Value Equity Fund			Virtus Ceredex Small-Cap Value Equity Fund
	CFTC			Commodity Futures Trading Commission, which is the U.S. regulator governing trading in commodity futures
	Code			The Internal Revenue Code of 1986, as amended, which is the law governing U.S. federal taxes
	Custodian			The custodian of the Funds’ assets, The Bank of New York Mellon
	Distributor			The principal underwriter of shares of the Funds, VP Distributors, LLC
	EDRs			European Depositary Receipts (another name for CDRs)
	ETFs			Exchange-traded Funds
	FHFA			Federal Housing Finance Agency, an independent Federal agency that regulates FNMA, FHLMC and the twelve Federal Home Loan Banks
	FHLMC			Federal Home Loan Mortgage Corporation, also known as “Freddie Mac”, which is a government-sponsored corporation formerly owned by the twelve Federal Home Loan Banks and now owned entirely by private stockholders
	FINRA			Financial Industry Regulatory Authority, a self-regulatory organization with authority over registered broker-dealers operating in the United States, including VP Distributors
	Fitch			Fitch Ratings, Inc.
	FNMA			Federal National Mortgage Association, also known as “Fannie Mae”, which is a government-sponsored corporation owned entirely by private stockholders and subject to general regulation by the Secretary of Housing and Urban Development

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	Fund Complex			The group of Funds sponsored by Virtus and managed by the Adviser or its affiliates, including the Virtus Mutual Funds, Virtus Variable Insurance Trust and certain other closed-end funds
	Funds			The series of the Trust discussed in this SAI
	GDRs			Global Depositary Receipts
	GICs			Guaranteed Investment Contracts
	GNMA			Government National Mortgage Association, also known as “Ginnie Mae”, which is a wholly-owned United States Government corporation within the Department of Housing and Urban Development
	IMF			International Monetary Fund, an international organization seeking to promote international economic cooperation, international trade, employment and exchange rate stability, among other things
	Independent Trustees			Those members of the Board who are not “interested persons” as defined by the 1940 Act
	IRA			Individual Retirement Account
	IRS			The United States Internal Revenue Service, which is the arm of the U.S. government that administers and enforces the Code
	LIBOR			London Interbank Offering Rate, an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market
	Moody’s			Moody’s Investors Service, Inc.
	NAV			Net Asset Value, which is the per-share price of a Fund
	NYSE			New York Stock Exchange
	OCC			Options Clearing Corporation, a large equity derivatives clearing corporation
	OECD			Organization for Economic Cooperation and Development, an international organization seeking to promote economic progress and world trade
	PERLS			Principal Exchange Rate Linked Securities
	PNX			Phoenix Life Insurance Company, which is the former parent company of Virtus Investment Partners, Inc., and certain of its corporate affiliates
	Predecessor Funds			Series of RidgeWorth Funds that have been reorganized with and into the Funds.
	Prospectuses			The prospectuses for the Funds, as amended from time to time
	PwC			PricewaterhouseCoopers, LLP, the independent registered public accounting firm for the Trust
	Regulations			The Treasury Regulations promulgated under the Code
	RIC			Regulated Investment Company, a designation under the Code indicating a U.S.-registered investment company meeting the specifications under the Code allowing the investment company to be exempt from paying U.S. federal income taxes
	RidgeWorth			RidgeWorth Capital Management LLC (renamed Virtus Fund Advisers, LLC), the Adviser to the Funds
	S&P			Standard & Poor’s Corporation
	S&P 500 ® Index			The Standard & Poor’s 500 ® Index, which is a free-float market capitalization-weighted index of 500 of the largest U.S. companies, calculated on a total return basis with dividends reinvested
	SAI			This Statement of Additional Information
	SEC			U.S. Securities and Exchange Commission
	Seix			Seix Investment Advisors LLC, subadviser to the Seix Core Bond Fund, Seix Corporate Bond Fund, Seix Floating Rate High Income Fund, Seix High Grade Municipal Bond Fund, Seix High Income Fund, Seix High Yield Fund, Seix Investment Grade Tax-Exempt Bond Fund, Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund, Seix Total Return Bond Fund, Seix U.S. Government Securities Ultra-Short Bond Fund, Seix U.S. Mortgage Fund and Seix Ultra-Short Bond Fund

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	Seix Core Bond Fund			Virtus Seix Core Bond Fund
	Seix Corporate Bond Fund			Virtus Seix Corporate Bond Fund
	Seix Floating Rate High Income Fund			Virtus Seix Floating Rate High Income Fund
	Seix Funds			Collectively, Seix Core Bond Fund, Seix Corporate Bond Fund, Seix Floating Rate High Income Fund, Seix High Grade Municipal Bond Fund, Seix High Income Fund, Seix High Yield Fund, Seix Investment Grade Tax-Exempt Bond Fund, Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund, Seix Total Return Bond Fund, Seix U.S. Government Securities Ultra-Short Bond Fund, Seix U.S. Mortgage Fund and Seix Ultra-Short Bond Fund
	Seix High Grade Municipal Bond Fund			Virtus Seix High Grade Municipal Bond Fund
	Seix High Income Fund			Virtus Seix High Income Fund
	Seix High Yield Fund			Virtus Seix High Yield Fund
	Seix Investment Grade Tax-Exempt Bond Fund			Virtus Seix Investment Grade Tax-Exempt Bond Fund
	Seix Short-Term Bond Fund			Virtus Seix Short-Term Bond Fund
	Seix Short-Term Municipal Bond Fund			Virtus Seix Short-Term Municipal Bond Fund
	Seix Total Return Bond Fund			Virtus Seix Total Return Bond Fund
	Seix U.S. Government Securities Ultra-Short Bond Fund			Virtus Seix U.S. Government Securities Ultra-Short Bond Fund
	Seix U.S. Mortgage Fund			Virtus Seix U.S. Mortgage Fund
	Seix Ultra-Short Bond Fund			Virtus Seix Ultra-Short Bond Fund
	SIFMA			Securities Industry and Financial Markets Association (formerly, the Bond Market Association), a financial industry trade group consisting of broker-dealers and asset managers across the United States
	Silvant			Silvant Capital Management LLC, subadviser to the Silvant Large-Cap Growth Stock Fund and Silvant Small-Cap Growth Stock Fund
	Silvant Funds			Collectively, Silvant Large-Cap Growth Stock Fund and Silvant Small-Cap Growth Stock Fund
	Silvant Large-Cap Growth Stock Fund			Virtus Silvant Large-Cap Growth Stock Fund
	Silvant Small-Cap Growth Stock Fund			Virtus Silvant Small-Cap Growth Stock Fund
	SMBS			Stripped Mortgage-backed Securities
	State Street			State Street Bank and Trust Company, previously the Custodian, sub-administrative and accounting agent for the Funds
	Transfer Agent			The Trust’s transfer agent, Virtus Fund Services, LLC
	Trust			Virtus Asset Trust
	Ultra-Short Bond Funds			Collectively, Seix U.S. Government Securities Ultra-Short Bond Fund and Seix Ultra-Short Bond Fund
	VIA			Virtus Investment Advisers, Inc., an affiliated investment adviser of the Adviser
	Virtus			Virtus Investment Partners, Inc., which is the parent company of the Adviser, VIA, the Distributor, the Administrator/Transfer Agent, Ceredex, Seix and Silvant and a minority owner of Zevenbergen
	Virtus Fund Advisers			Virtus Fund Advisers, LLC, the Adviser to the Funds
	Virtus Fund Services			Virtus Fund Services, LLC, the Administrator/Transfer Agent to the Funds
	Virtus Mutual Funds			The family of funds consisting of the Funds, the series of Virtus Alternative Solutions Trust, the series of Virtus Equity Trust and the series of Virtus Opportunities Trust
	VP Distributors			VP Distributors, LLC, the Trust's Distributor

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GENERAL INFORMATION AND HISTORY

The Trust is an open-end management investment company organized as a Delaware statutory trust on May 24, 1996. Prior to May 22, 2006, the Trust was named “Phoenix-Kayne Funds.” From May 22, 2006 to August 28, 2008, the Trust was named “Phoenix Asset Trust.”

The Trust’s Prospectuses describe the investment objectives of the Funds and the strategies that each Fund will employ in seeking to achieve its investment objective. The respective investment objective(s) for each Fund is a non-fundamental policy of that Fund and may be changed without shareholder approval upon 60 days’ notice. The following discussion supplements the disclosure in the Prospectuses.

Fund Type

Fund

Investment Objective(s)

Value

Ceredex Large-Cap Value Equity Fund

The fund has an investment objective of seeking to provide a high level of capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Ceredex Mid-Cap Value Equity Fund

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Ceredex Small-Cap Value Equity Fund

The fund has an investment objective of seeking to provide capital appreciation. As a secondary goal, the fund also seeks to provide current income.

Growth

Silvant Large-Cap Growth Stock Fund

The fund has an investment objective of seeking to provide capital appreciation.

Silvant Small-Cap Growth Stock Fund

The fund has an investment objective of seeking to provide long-term capital appreciation.

Zevenbergen Innovative Growth Stock Fund

The fund has an investment objective of seeking to provide long-term capital appreciation.

International

WCM International Equity Fund

The fund has an investment objective of seeking to provide long-term capital appreciation.

Investment Grade

Seix Core Bond Fund

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Seix Corporate Bond Fund

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Seix Total Return Bond Fund

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

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Fund Type

Fund

Investment Objective(s)

Seix U.S. Mortgage Fund

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Short Duration

Seix Short-Term Bond Fund

The fund has an investment objective of seeking to maximize long term total return through a combination of current income and capital appreciation, consistent with capital preservation.

Seix U.S. Government Securities Ultra-Short Bond Fund

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

Seix Ultra-Short Bond Fund

The fund has an investment objective of seeking to maximize current income consistent with capital preservation.

High Yield

Seix Floating Rate High Income Fund

The fund has an investment objective of seeking to provide a high level of current income.

Seix High Income Fund

The fund has an investment objective of seeking high current income and, secondarily, total return (comprised of capital appreciation and income).

Seix High Yield Fund

The fund has an investment objective of seeking high income and, secondarily, capital appreciation.

Municipal Bond

Seix High Grade Municipal Bond Fund

Seix Investment Grade Tax-Exempt Bond Fund

Seix Short-Term Municipal Bond Fund

Capital Stock and Organization of the Trust

The capitalization of the Trust consists solely of an unlimited number of shares of beneficial interest. The Trust currently offers shares in different series called Funds and different classes of those Funds. Holders of shares of a Fund have equal rights with regard to voting, redemptions, dividends, distributions, and liquidations with respect to that Fund. Shareholders of all Funds vote on the election of Trustees. On matters affecting an individual Fund (such as approval of an investment advisory agreement or a change in fundamental investment policies) and also on matters affecting an individual class (such as approval of matters relating to a Plan of Distribution for a particular class of shares), a separate

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vote of that Fund or class is required. The Trust does not hold regular meetings of shareholders of the Funds. The Board will call a meeting of shareholders of a Fund when at least 10% of the outstanding shares of that Fund so request in writing. If the Board fails to call a meeting after being so notified, the shareholders may call the meeting. The Board will assist the shareholders by identifying other shareholders or mailing communications, as required under Section 16(c) of the 1940 Act.

Shares are fully paid, non-assessable, redeemable and fully transferable when they are issued. Shares do not have cumulative voting rights, preemptive rights or subscription rights. The assets received by the Trust for the issue or sale of shares of each Fund, and any class thereof and all income, earnings, profits and proceeds thereof, are allocated to such Fund, and class, respectively, subject only to the rights of creditors, and constitute the underlying assets of such Fund or class. The underlying assets of each Fund are required to be segregated on the books of account, and are to be charged with the expenses in respect to such Fund and with a share of the general expenses of the Trust. Any general expenses of the Trust not readily identifiable as belonging to a particular Fund or class will be allocated by or under the direction of the Board as it determines to be fair and equitable. The Trust is not bound to recognize any transfer of shares of a Fund or class until the transfer is recorded on the Trust’s books pursuant to policies and procedures of the Transfer Agent.

As a Delaware statutory trust, the Trust’s operations are governed by its Amended and Restated Agreement and Declaration of Trust dated January 6, 2017 as amended. A copy of the Trust’s Certificate of Trust, as amended, is on file with the Office of the Secretary of State of the State of Delaware. Upon the initial purchase of shares, the shareholder agrees to be bound by the Trust’s Agreement and Declaration of Trust, as amended. Generally, Delaware statutory trust shareholders are not personally liable for obligations of the Delaware statutory trust under Delaware law. The Delaware Statutory Trust Act (the “Delaware Act”) provides that a shareholder of a Delaware statutory trust shall be entitled to the same limitation of liability extended to shareholders of private for-profit corporations. The Trust’s Amended and Restated Agreement and Declaration of Trust expressly provides that the Trust has been organized under the Delaware Act and that the Declaration of Trust is to be governed by Delaware law. It is nevertheless possible that a Delaware statutory trust, such as the Trust, might become a party to an action in another state whose courts refused to apply Delaware law, in which case the Trust’s shareholders could be subject to personal liability. To guard against this risk, the Amended and Restated Agreement and Declaration of Trust (i) contains an express disclaimer of shareholder liability for acts or obligations of the Trust and provides that notice of such disclaimer may be given in each agreement, obligation and instrument entered into or executed by the Trust or its Trustees, (ii) provides for the indemnification out of Trust property of any shareholders held personally liable for any obligations of the Trust or any series of the Trust and (iii) provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, the risk of a Trust shareholder incurring financial loss beyond his or her investment because of shareholder liability is limited to circumstances in which all of the following factors are present: (1) a court refused to apply Delaware law; (2) the liability arose under tort law or, if not, no contractual limitation of liability was in effect; and (3) the Trust itself would be unable to meet its obligations. In the light of Delaware law, the nature of the Trust’s business and the nature of its assets, the risk of personal liability to a Fund shareholder is remote.

The Amended and Restated Agreement and Declaration of Trust further provides that the Trust shall indemnify each of its Trustees and officers against liabilities and expenses reasonably incurred by them, in connection with, or arising out of, any action, suit or proceeding, threatened against or otherwise involving such Trustee or officer, directly or indirectly, by reason of being or having been a Trustee or officer of the Trust. The Amended and Restated Agreement and Declaration of Trust does not authorize the Trust to indemnify any Trustee or officer against any liability to which he or she would otherwise be subject by reason of or for willful misfeasance, bad faith, gross negligence or reckless disregard of such person’s duties.

Under the Amended and Restated Agreement and Declaration of Trust, the Trust is not required to hold annual meetings to elect Trustees or for other purposes. It is not anticipated that the Trust will hold shareholders’ meetings unless required by law or the Declaration of Trust. The Trust will be required to hold a meeting to elect Trustees to fill any existing vacancies on the Board if, at any time, fewer than a majority of the Trustees have been elected by the shareholders of the Trust. The Board is required to call a meeting for the purpose of considering the removal of persons serving as Trustee if requested in writing to do so by the holders of not less than 10% of the outstanding shares of the Trust.

Shares of the Trust do not entitle their holders to cumulative voting rights, so that the holders of more than 50% of the outstanding shares of the Trust may elect all of the Trustees, in which case the holders of the remaining shares would not be able to elect any Trustees. As determined by the Trustees, shareholders are entitled to one vote for each dollar of NAV (number of shares held times the NAV of the applicable class of the applicable Fund).

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Pursuant to the Amended and Restated Agreement and Declaration of Trust, the Trustees may create additional funds by establishing additional series of shares in the Trust. The establishment of additional series would not affect the interests of current shareholders in the existing Funds. Pursuant to the Amended and Restated Agreement and Declaration of Trust, the Trustees may establish and issue multiple classes of shares for each Fund.

Each share of each class of a Fund is entitled to such dividends and distributions out of the income earned on the assets belonging to that Fund which are attributable to such class as are declared in the discretion of the Trustees. In the event of the liquidation or dissolution of the Trust, shares of each class of each Fund are entitled to receive their proportionate share of the assets which are attributable to such class of such Fund and which are available for distribution as the Trustees in their sole discretion may determine. Shareholders are not entitled to any preemptive, conversion or subscription rights. All shares, when issued, will be fully paid and non-assessable by the Trust.

Subject to shareholder approval (if then required), the Trustees may authorize each Fund to invest all or part of its investable assets in a single open-end investment company that has substantially the same investment objectives, policies and restrictions as the Fund. As of the date of this SAI, the Trustees do not have any plan to authorize any Fund to so invest its assets.

Diversification of Funds

Each Fund is diversified under the 1940 Act. Each Fund also intends to diversify its assets to the extent necessary to qualify for tax treatment as a regulated investment company under the Code. (For information regarding qualification under the Code, see “Dividends, Distributions and Taxes” in this SAI.)

Fund Names and Investment Policies

Each of the Funds, other than Seix High Income Fund, has a name that suggests a focus on a particular type of investment. In accordance with Rule 35d-1 under the 1940 Act, each of these Funds has adopted a policy that it will, under normal circumstances, invest at least 80% of its assets in investments of the type suggested by its name. For this policy, “assets” means net assets plus the amount of any borrowings for investment purposes. In addition, in appropriate circumstances, synthetic investments may be included in the 80% basket if they have economic characteristics similar to the other investments included in the basket. With the exception of Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund and Seix Short-Term Municipal Bond Fund, a Fund’s policy to invest at least 80% of its assets in such a manner is not a “fundamental” one, which means that it may be changed without a vote of a majority of the Fund’s outstanding shares as defined in the 1940 Act. However, under Rule 35d-1, shareholders must be given written notice at least 60 days prior to any change by a Fund of its 80% investment policy. With respect to each of Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund and Seix Short-Term Municipal Bond Fund, the Fund’s 80% investment policy is a fundamental policy that cannot be changed without the consent of the respective holders of a majority of the Fund’s outstanding shares.

Portfolio Turnover

The portfolio turnover rate of each Fund is calculated by dividing the lesser of purchases or sales of portfolio securities during the fiscal year by the monthly average of the value of the Fund’s securities (excluding all securities, including options, with maturities at the time of acquisition of one year or less). All long-term securities, including long-term U.S. Government securities, are included. A high rate of portfolio turnover generally involves correspondingly greater brokerage commission expenses, which must be borne directly by the Fund. Turnover rates may vary greatly from year to year as well as within a particular year and also may be affected by cash requirements for redemptions of each Fund’s shares by requirements that enable the Trust to receive certain favorable tax treatments. The portfolio turnover rate for each Fund is set forth in its summary prospectus and under “Financial Highlights” in the statutory prospectus.

Disclosure of Portfolio Holdings

The Trustees of the Trust have adopted a policy with respect to the protection of certain non-public information which governs disclosure of the Funds’ portfolio holdings. This policy provides that the Funds’ portfolio holdings information generally may not be disclosed to any party prior to the information becoming public.

Divulging Fund portfolio holdings to selected third parties is permissible only when the affected party has legitimate business purposes for doing so and the recipients are subject to a duty of confidentiality.

Public Disclosures

In accordance with rules established by the SEC, each Fund sends semiannual and annual reports to shareholders that contain a full listing of portfolio holdings as of the second and fourth fiscal quarters, respectively, within 60 days of quarter end. The Funds also disclose complete portfolio holdings as of the end of the first and third fiscal quarters on

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Form N-Q, which is filed with the SEC within 60 days of quarter end. The Funds’ shareholder reports are available on Virtus’ Web site at virtus.com . Certain Funds also make publicly available on Virtus’ Web site a full listing of portfolio holdings as of the end of each month with a 15-day delay, while other of the Funds make such full listings available as of the end of each quarter with a 15-, 30-, 45- or 60-day delay. Portfolio holdings may be released sooner at the Administrator's discretion. Additionally, each Fund provides its top 10 holdings and summary composition data derived from portfolio holdings information on Virtus’ Web site. This information is posted to the Web site at the end of each month with respect to the top 10 holdings, and at the end of each quarter with respect to summary composition information, generally within 10 business days. With respect to certain Funds, the top 10 holdings and summary composition information may be reported on a one-month lag. This information will be available on the Web site until full portfolio holdings information becomes publicly available as described above. The Funds also provide publicly-available portfolio holdings information directly to ratings agencies, the frequency and timing of which is determined under the terms of the contractual arrangements with such agencies, and may provide to financial intermediaries, upon request, monthly portfolio holdings for periods included in publicly-available quarterly portfolio holdings disclosures.

Other Disclosures

The Trust and/or the Administrator may authorize the disclosure of non-public portfolio holdings information under certain limited circumstances. The Funds’ policy provides that non-public disclosures of a Fund's portfolio holdings may only be made if (i) the Fund has a legitimate business purpose for making such disclosure and (ii) the party receiving the non-public information is subject to a duty of confidentiality. Federal law also prohibits recipients of non-public portfolio holdings information from trading on such information. The Administrator will consider any actual or potential conflicts of interest between Virtus and the Funds’ shareholders and will act in the best interest of the Funds’ shareholders with respect to any such disclosure of portfolio holdings information. If a potential conflict can be resolved in a manner that does not present detrimental effects to the Funds’ shareholders, the Administrator may authorize release of portfolio holdings information. Conversely, if the potential conflict cannot be resolved in a manner that does not present detrimental effects to the Funds’ shareholders, the Administrator will not authorize such release.

Ongoing Arrangements to Disclose Portfolio Holdings

As previously authorized by the Funds’ Board and/or the Funds’ Administrator, the Funds periodically disclose non-public portfolio holdings on a confidential basis to various service providers that require such information in order to assist the Funds in their day-to-day operations, as well as public information to certain ratings organizations. In addition to Virtus and its affiliates, the entities receiving non-public portfolio holdings as of the date of this SAI are described in the following table. The table also includes information as to the timing of these entities receiving the portfolio holdings information from the Funds.

Non-Public Portfolio Holdings Information

Type of Service Provider

Name of Service Provider

Timing of Release of Portfolio Holdings
Information

Adviser

Virtus Fund Advisers

Daily with no delay

Subadviser

Ceredex

Daily with no delay

Subadviser

Seix

Daily with no delay

Subadviser

Silvant

Daily with no delay

Subadviser

WCM

Daily with no delay

Subadviser

Zevenbergen

Daily with no delay

Administrator

Virtus Fund Services, LLC

Daily with no delay

Distributor

VP Distributors, LLC

Daily with no delay

Custodian and Security Lending Agent

The Bank of New York Mellon

Daily with no delay

Class Action Service Provider

Financial Recovery Technologies and Institutional Shareholder Services

Monthly with no delay

Sub-administrative and Accounting Agent and Sub-transfer Agent

BNY Mellon

Daily with no delay

Independent Registered Public Accounting Firm

PwC

Annually, within 15 business days of end of fiscal year.

Performance Analytic Firm

FactSet Research Systems, Inc.

Daily with no delay

Reconciliation Service

Electra Information Systems

Daily with no delay.

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Type of Service Provider

Name of Service Provider

Timing of Release of Portfolio Holdings
Information

Typesetting and Printing Firm for Financial Reports

Donnelley Financial Solutions, Inc.

Quarterly, within 15 days of end of reporting period.

Proxy Voting Service

Institutional Shareholder Services

Monthly

Public Portfolio Holdings Information

Type of Service Provider

Name of Service Provider

Timing of Release of Portfolio Holdings
Information

Portfolio Redistribution Firms

Bloomberg, FactSet Research Systems, Inc. and Thompson Reuters

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with a 15 day delay or quarterly with a 15, 30, 45 or 60 day delay.

Rating Agencies

Lipper Inc. and Morningstar

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with a 15 day delay or quarterly with a 15, 30, 45 or 60 day delay.

Virtus Public Web site

Virtus Investment Partners, Inc.

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with a 15 day delay or quarterly with a 15, 30, 45 or 60 day delay.

These service providers are required to keep all non-public information confidential and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Funds. There is no guarantee that the Funds’ policies on use and dissemination of holdings information will protect the Funds from the potential misuse of holdings by individuals or firms in possession of such information.

Other Virtus Mutual Funds

In addition to the Funds of the Trust, the funds commonly referred to as “Virtus Mutual Funds” also include the series of Virtus Alternative Solutions Trust, Virtus Equity Trust and Virtus Opportunities Trust. Virtus Mutual Funds are generally offered in multiple classes. The following chart shows the share classes offered by each Virtus Mutual Fund as of the date of this SAI:

Trust

Fund

Class/Shares

Virtus Alternative Solutions Trust

Aviva Multi-Strategy Target Return Fund

Duff & Phelps Select MLP and Energy Fund

KAR Long/Short Equity Fund

Virtus Equity Trust

KAR Capital Growth Fund

KAR Global Quality Dividend Fund

KAR Mid-Cap Core Fund

KAR Mid-Cap Growth Fund

KAR Small-Cap Core Fund

KAR Small-Cap Growth Fund

KAR Small-Cap Value Fund

KAR Small-Mid Cap Core Fund

Rampart Enhanced Core Equity Fund

SGA Global Growth Fund

Tactical Allocation Fund

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MORE INFORMATION ABOUT FUND INVESTMENT STRATEGIES & RELATED RISKS

The following investment strategies and policies supplement each Fund’s investment strategies and policies set forth in the Funds' prospectuses. Some of the investment strategies and policies described below and in each Fund's prospectus set forth percentage limitations on a Fund’s investment in, or holdings of, certain types of investments. Unless otherwise required by law or stated in this SAI, compliance with these strategies and policies will be determined immediately after the acquisition of such investments by the Fund. Subsequent changes in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the Fund’s investment strategies and policies.

Throughout this section, the term “adviser” may be used to refer to a subadviser, if any, and the term the “Fund” may be used to refer to any Fund.

Investment Technique	Description and Risks	Fund-Specific Limitations
Commodities-Related Investing	Commodity-related companies may underperform the stock market as a whole. The value of securities issued by commodity-related companies may be affected by factors affecting a particular industry or commodity. The operations and financial performance of commodity-related companies may be directly affected by commodity prices, especially those commodity-related companies that own the underlying commodity. The stock prices of such companies may also experience greater price volatility than other types of common stocks. Securities issued by commodity-related companies are sensitive to changes in the supply and demand for, and thus the prices of, commodities. Volatility of commodity prices, which may lead to a reduction in production or supply, may also negatively impact the performance of commodity and natural resources companies that are solely involved in the transportation, processing, storing, distribution or marketing of commodities. Volatility of commodity prices may also make it more difficult for commodity-related companies to raise capital to the extent the market perceives that their performance may be directly or indirectly tied to commodity prices. Certain types of commodities instruments (such as commodity-linked notes) are subject to the risk that the counterparty to the instrument will not perform or will be unable to perform in accordance with the terms of the instrument. Exposure to commodities and commodities markets may subject the Fund to greater volatility than investments in traditional securities. No active trading market may exist for certain commodities investments, which may impair the ability of the Fund to sell or to realize the full value of such investments in the event of the need to liquidate such investments. In addition, adverse market conditions may impair the liquidity of actively traded commodities investments.
Debt Investing	Each Fund may invest in debt, or fixed income, securities. Debt, or fixed income, securities (which include corporate bonds, commercial paper, debentures, notes, government securities, municipal obligations, state- or state agency-issued obligations, obligations of foreign issuers, asset- or mortgage-backed securities, and other obligations) are used by issuers to borrow money and thus are debt obligations of the issuer. Holders of debt securities are creditors of the issuer, normally ranking ahead of holders of both common and preferred stock as to dividends or upon liquidation. The issuer usually pays a fixed, variable, or floating rate of interest and must repay the amount borrowed at the security’s maturity. Some debt securities, such as zero-coupon securities (discussed below), do not pay interest but may be sold at a deep discount from their face value. Yields on debt securities depend on a variety of factors, including the general conditions of the money, bond, and note markets, the size of a particular offering, the maturity date of the obligation, and the rating of the issue. Debt securities with longer maturities tend to produce higher yields and are generally subject to greater price fluctuations in

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Investment Technique	Description and Risks	Fund-Specific Limitations
	response to changes in market conditions than obligations with shorter maturities. An increase in interest rates generally will reduce the market value of portfolio debt securities, while a decline in interest rates generally will increase the value of the same securities. The achievement of a Fund’s investment objective depends in part on the continuing ability of the issuers of the debt securities in which the Fund invests to meet their obligations for the payment of principal and interest when due. Obligations of issuers of debt securities are subject to the provisions of bankruptcy, insolvency, sovereign immunity, and other laws that affect the rights and remedies of creditors. There is also the possibility that, as a result of litigation or other conditions, the ability of an issuer to pay, when due, the principal of and interest on its debt securities may be materially affected.
Acquisitional/Equipment Lines (delayed-draw term loans)	Acquisitional/equipment lines (delayed-draw term loans) are credits that may be drawn down for a given period to purchase specified assets or equipment or to make acquisitions. The issuer pays a fee during the commitment period (a ticking fee). The lines are then repaid over a specified period (the term-out period). Repaid amounts may not be re-borrowed. To avoid any leveraging concerns, the Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its repurchase obligations.
Collateralized Debt Obligations	Collateralized Debt Obligations (“CDOs”) are securitized interests in pools of assets. Assets called collateral usually comprise loans or debt instruments. A CDO may be called a collateralized loan obligation (“CLO”) or collateralized bond obligation (“CBO”) if it holds only loans or bonds, respectively. Investors bear the credit risk of the collateral. Multiple tranches of securities are issued by the CDO, offering investors various maturity and credit risk characteristics. Tranches are categorized as senior, mezzanine, and subordinated/equity, according to their degree of credit risk. Senior and mezzanine tranches are typically rated, with the former receiving ratings of A to AAA/Aaa and the latter receiving ratings of B to BBB/Baa. The ratings reflect both the credit quality of underlying collateral as well as how much protection a given tranche is afforded by tranches that are subordinate to it.
Contingent Capital Securities	Contingent capital securities (sometimes referred to as “CoCos”) are debt or preferred securities with loss absorption characteristics built into the terms of the security, for example a mandatory conversion into common stock of the issuer under certain circumstances, such as the issuer’s capital ratio falling below a certain level. Since the common stock of the issuer may not pay a dividend, investors in these instruments could experience a reduced income rate, potentially to zero, and conversion would deepen the subordination of the investor, hence worsening a Fund’s standing in a bankruptcy. Some CoCos provide for a reduction in the value or principal amount of the security under such circumstances. In addition, most CoCos are considered to be high yield or “junk” securities and are therefore subject to the risks of investing in below investment grade securities.
Convertible Securities	A convertible security is a bond, debenture, note, or other security that entitles the holder to acquire common stock or other equity securities of the same or a different issuer within a particular period of time at a specific price or formula. It generally entitles the holder to receive interest paid or accrued until the security matures or is redeemed, converted, or exchanged. Convertible securities may have several unique investment characteristics such as (1) higher yields than common stocks, but lower yields than comparable nonconvertible

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Investment Technique	Description and Risks	Fund-Specific Limitations
	securities, (2) a lesser degree of fluctuation in value than the underlying stock since they have fixed income characteristics and (3) the potential for capital appreciation if the market price of the underlying common stock increases. Before conversion, convertible securities have characteristics similar to nonconvertible debt securities. Convertible securities often rank senior to common stock in a corporation’s capital structure and, therefore, are often viewed as entailing less risk than the corporation’s common stock, although the extent to which this is true depends in large measure on the degree to which the convertible security sells above its value as a fixed income security. However, because convertible securities are often viewed by the issuer as future common stock, they are often subordinated to other senior securities and therefore are rated one category lower than the issuer’s nonconvertible debt obligations or preferred stock. A convertible security may be subject to redemption or conversion at the option of the issuer at a predetermined price. If a convertible security held by the Fund is called for redemption, the Fund could be required to permit the issuer to redeem the security and convert it to the underlying common stock. The Fund generally would invest in convertible securities for their favorable price characteristics and total return potential, and would normally not exercise an option to convert. The Fund might be more willing to convert such securities to common stock. A Fund’s subadviser will select only those convertible securities for which it believes (a) the underlying common stock is a suitable investment for the Fund and (b) a greater potential for total return exists by purchasing the convertible security because of its higher yield and/or favorable market valuation. However, the Fund may invest in convertible debt securities rated less than investment grade. Debt securities rated less than investment grade are commonly referred to as “junk bonds.” (For information about debt securities rated less than investment grade, see “High-Yield/High-Risk Fixed Income Securities (Junk Bonds)” under “Debt Investing” in this section of the SAI; for additional information about ratings on debt obligations, see Appendix A to this SAI.)
Corporate Debt Securities	Each Fund may invest in debt securities issued by corporations, limited partnerships and other similar entities. A Fund’s investments in debt securities of domestic or foreign corporate issuers include bonds, debentures, notes and other similar corporate debt instruments, including convertible securities that meet the Fund’s minimum ratings criteria or if unrated are, in the Fund’s subadviser’s opinion, comparable in quality to corporate debt securities that meet those criteria. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies or to the value of commodities, such as gold.
Custodial Receipts	A custodial receipt represents an indirect interest in a tax-exempt bond that is deposited with a custodian. Custodial receipts may be used to permit the sale of the deposited bond in smaller denominations than would otherwise be permitted. Frequently, custodial receipts are issued to attach bond insurance or other forms of credit enhancement to the deposited tax-exempt bond. Because a “separate security” is not created by the issuance of a receipt, many of the tax advantages bestowed upon holders of the deposited tax-exempt bond are also conferred upon the custodial receipt holder.

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Investment Technique	Description and Risks	Fund-Specific Limitations
Dollar-denominated Foreign Debt Securities (“Yankee Bonds”)	Each Fund may invest in “Yankee bonds”, which are dollar-denominated instruments issued in the U.S. market by foreign branches of U.S. banks and U.S. branches of foreign banks. Since these instruments are dollar-denominated, they are not affected by variations in currency exchange rates. They are influenced primarily by interest rate levels in the United States and by the financial condition of the issuer, or of the issuer’s foreign parent. However, investing in these instruments may present a greater degree of risk than investing in domestic securities, due to less publicly available information, less securities regulation, war or expropriation. Special considerations may include higher brokerage costs and thinner trading markets. Investments in foreign countries could be affected by other factors including extended settlement periods. (See “Foreign Investing” in this section of the SAI for additional information about investing in foreign countries.)
Duration	Duration is a time measure of a bond’s interest-rate sensitivity, based on the weighted average of the time periods over which a bond’s cash flows accrue to the bondholder. Time periods are weighted by multiplying by the present value of its cash flow divided by the bond’s price. (A bond’s cash flows consist of coupon payments and repayment of capital.) A bond’s duration will almost always be shorter than its maturity, with the exception of zero-coupon bonds, for which maturity and duration are equal.
Equipment Trust Certificates (ETCs)	ETCs are issued by a trust formed to finance large purchases of equipment, such as airplanes, at favorable interest rates. Legal title on such equipment is held by a trustee. The trustee leases the equipment and sells ETCs at a small discount to the purchase price of the equipment. The lease payments are then used to pay principal and interest to the ETC holders.
Equity-Linked Securities	Each Fund may invest in equity-linked securities, including, among others, PERCS, ELKS or LYONs, which are securities that are convertible into, or the value of which is based upon the value of, equity securities upon certain terms and conditions. The amount received by an investor at maturity of such securities is not fixed but is based on the price of the underlying common stock. It is impossible to predict whether the price of the underlying common stock will rise or fall. Trading prices of the underlying common stock will be influenced by the issuer’s operational results, by complex, interrelated political, economic, financial or other factors affecting the capital markets, the stock exchanges on which the underlying common stock is traded and the market segment of which the issuer is a part. In addition, it is not possible to predict how equity-linked securities will trade in the secondary market. The market for such securities may be shallow, and high volume trades may be possible only with discounting. In addition to the foregoing risks, the return on such securities depends on the creditworthiness of the issuer of the securities, which may be the issuer of the underlying securities or a third-party investment banker or other lender. The creditworthiness of such third-party issuer equity-linked securities may, and often does, exceed the creditworthiness of the issuer of the underlying securities. The advantage of using equity-linked securities over traditional equity and debt securities is that the former are income producing vehicles that may provide a higher income than the dividend income on the underlying equity securities while allowing some participation in the capital appreciation of the underlying equity securities.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Another advantage of using equity-linked securities is that they may be used for hedging to reduce the risk of investing in the generally more volatile underlying equity securities.
Preferred Equity Redemption Cumulative Stock (PERCS)	PERCS technically is preferred stock with some characteristics of common stock. PERCS are mandatorily convertible into common stock after a period of time, usually three years, during which the investors’ capital gains are capped, usually at 30%. Commonly, PERCS may be redeemed by the issuer at any time or if the issuer’s common stock is trading at a specified price level or better. The redemption price starts at the beginning of the PERCS duration period at a price that is above the cap by the amount of the extra dividends the PERCS holder is entitled to receive relative to the common stock over the duration of the PERCS and declines to the cap price shortly before maturity of the PERCS. In exchange for having the cap on capital gains and giving the issuer the option to redeem the PERCS at any time or at the specified common stock price level, the Fund may be compensated with a substantially higher dividend yield than that on the underlying common stock.
Equity-Linked Securities (ELKS)	ELKS differ from ordinary debt securities, in that the principal amount received at maturity is not fixed but is based on the price of the issuer’s common stock. ELKS are debt securities commonly issued in fully registered form for a term of three years under an indenture trust. At maturity, the holder of ELKS will be entitled to receive a principal amount equal to the lesser of a cap amount, commonly in the range of 30% to 55% greater than the current price of the issuer’s common stock, or the average closing price per share of the issuer’s common stock, subject to adjustment as a result of certain dilution events, for the 10 trading days immediately prior to maturity. Unlike PERCS, ELKS are commonly not subject to redemption prior to maturity. ELKS usually bear interest six times during the three-year term at a substantially higher rate than the dividend yield on the underlying common stock. In exchange for having the cap on the return that might have been received as capital gains on the underlying common stock, the Fund may be compensated with the higher yield, contingent on how well the underlying common stock does.
Liquid Yield Option Notes (LYONs)	LYONs differ from ordinary debt securities, in that the amount received prior to maturity is not fixed but is based on the price of the issuer’s common stock. LYONs are zero-coupon notes that sell at a large discount from face value. For an investment in LYONs, a Fund will not receive any interest payments until the notes mature, typically in 15 to 20 years, when the notes are redeemed at face, or par value. The yield on LYONs, typically, is lower-than-market rate for debt securities of the same maturity, due in part to the fact that the LYONs are convertible into common stock of the issuer at any time at the option of the holder of the LYONs. Commonly, the LYONs are redeemable by the issuer at any time after an initial period or if the issuer’s common stock is trading at a specified price level or better, or, at the option of the holder, upon certain fixed dates.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	The redemption price typically is the purchase price of the LYONs plus accrued original issue discount to the date of redemption, which amounts to the lower-than-market yield. A Fund will receive only the lower-than-market yield unless the underlying common stock increases in value at a substantial rate. LYONs are attractive to investors, like a Fund, when it appears that they will increase in value due to the rise in value of the underlying common stock.
Exchange-Traded Notes (ETNs)	Generally, ETNs are senior, unsecured, unsubordinated debt securities whose returns are linked to the performance of a particular market benchmark or strategy minus applicable fees. ETNs are traded on an exchange during normal trading hours. However, investors can also hold the ETN until maturity. At maturity, the issuer pays to the investor a cash amount equal to the principal amount, subject to the day’s market benchmark or strategy factor. ETNs do not make periodic coupon payments or provide principal protection. ETNs are subject to credit risk, and the value of the ETN may drop due to a downgrade in the issuer’s credit rating, despite the underlying market benchmark or strategy remaining unchanged. The value of an ETN may also be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying assets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events that affect the referenced underlying asset. When a Fund invests in ETNs it will bear its proportionate share of any fees and expenses borne by the ETN. The Fund’s decision to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange, the issuer may not be required to maintain the listing, and there can be no assurance that a secondary market will exist for an ETN. ETNs are also subject to tax risk. No assurance can be given that the IRS will accept, or a court will uphold, how a Fund characterizes and treats ETNs for tax purposes. Further, the IRS and Congress are considering proposals that would change the timing and character of income and gains from ETNs. An ETN that is tied to a specific market benchmark or strategy may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable market benchmark or strategy. Some ETNs that use leverage can, at times, be relatively illiquid and, thus, they may be difficult to purchase or sell at a fair price. Leveraged ETNs are subject to the same risks as other instruments that use leverage in any form. The market value of ETNs may differ from that of their market benchmark or strategy. This difference in price may be due to the fact that the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities, commodities or other components underlying the market benchmark or strategy that the ETN seeks to track. As a result, there may be times when an ETN trades at a premium or discount to its market benchmark or strategy.
High-Yield/High-Risk Fixed Income Securities (“Junk Bonds”)	Investments in securities rated “BB” or below by S&P or Fitch, or “Ba” or below by Moody’s generally provide greater income (leading to the name “high-yield” securities) and opportunity for capital appreciation than investments in higher quality securities, but they also typically entail greater price volatility, liquidity, and principal and income risk. These securities are regarded as predominantly speculative as to the issuer’s continuing ability to meet principal and interest payment obligations. Analysis of the creditworthiness of issuers of lower-quality

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Investment Technique			Description and Risks			Fund-Specific Limitations
			debt securities may be more complex than for issuers of higher-quality debt securities. Interest-bearing securities typically experience appreciation when interest rates decline and depreciation when interest rates rise. The market values of low-rated securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates. Low-rated securities also tend to be more sensitive to economic conditions than higher-rated securities. As a result, they generally involve more credit risks than securities in the higher-rated categories. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of low-rated securities may experience financial stress and may not have sufficient revenues to meet their payment obligations. The issuer’s ability to service its debt obligations may also be adversely affected by specific corporate developments, the issuer’s inability to meet specific projected business forecasts or the unavailability of additional financing. The risk of loss due to default by an issuer of low-rated securities is generally considered to be significantly greater than issuers of higher-rated securities because such securities are usually unsecured and are often subordinated to other creditors. Further, if the issuer of a low-rated security defaulted, the applicable Fund might incur additional expenses in seeking recovery. Periods of economic uncertainty and changes would also generally result in increased volatility in the market prices of low-rated securities and thus in the applicable Fund’s NAV. Low-rated securities often contain redemption, call or prepayment provisions which permit the issuer of the securities containing such provisions to, at its discretion, redeem the securities. During periods of falling interest rates, issuers of low-rated securities are likely to redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities or otherwise redeem them, the applicable Fund may have to replace the securities with a lower yielding security which would result in lower returns for the Fund. A Fund may have difficulty disposing of certain low-rated securities because there may be a thin trading market for such securities. Because not all dealers maintain markets in all low-rated securities, there is no established retail secondary market for many of these securities. The Funds anticipate that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a secondary trading market does exist, it is generally not as liquid as the secondary market for higher-rated securities. The lack of a liquid secondary market may have an adverse impact on the market price of the security, and accordingly, the NAV of a particular Fund and its ability to dispose of particular securities when necessary to meet its liquidity needs, or in response to a specific economic event, or an event such as a deterioration in the creditworthiness of the issuer. The lack of a liquid secondary market for certain securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its respective portfolio. Market quotations are generally available on many low-rated issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During periods of thin trading, the spread between bid and asked prices is likely to increase significantly. In addition, adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of low-rated securities, especially in a thinly-traded market. If a Fund experiences unexpected net redemptions, it may be forced to liquidate a portion of its portfolio securities without regard to their investment merits. Due to the limited liquidity of low-rated securities, the Fund may be forced to liquidate these securities at a substantial discount.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Any such liquidation would reduce the Fund’s asset base over which expenses could be allocated and could result in a reduced rate of return for the Fund.
Interest Rate Environment Risk	In the wake of the financial crisis that began in 2007, the Federal Reserve System attempted to stabilize the U.S. economy and support the U.S. economic recovery by keeping the federal funds rate at or near zero percent. In addition, the Federal Reserve has purchased large quantities of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities on the open market (the “quantitative easing program”). The Federal Reserve has since increased the federal funds rate as of December 2015, however, the United States continues to experience historically low interest rate levels. A low interest rate environment may have an adverse impact on each Fund’s ability to provide a positive yield to its shareholders and pay expenses out of Fund assets because of the low yields from the Fund’s portfolio investments. However, continued economic recovery and the cessation of the quantitative easing program increase the risk that interest rates will continue to rise in the near future and that the Funds will face a heightened level of interest rate risk. Federal Reserve policy changes may expose fixed-income and related markets to heightened volatility and may reduce liquidity for certain Fund investments, which could cause the value of a Fund’s investments and a Fund’s share price to decline or create difficulties for the Fund in disposing of investments. A Fund that invests in derivatives tied to fixed-income markets may be more substantially exposed to these risks than a Fund that does not invest in derivatives. A Fund could also be forced to liquidate its investments at disadvantageous times or prices, thereby adversely affecting the Fund. To the extent a Fund experiences high redemptions because of these policy changes, the Fund may experience increased portfolio turnover, which will increase the costs that the Fund incurs and lower the Fund’s performance.
Inverse Floating Rate Obligations	Certain variable rate securities pay interest at a rate that varies inversely to prevailing short-term interest rates (sometimes referred to as inverse floaters). For example, upon reset the interest rate payable on a security may go down when the underlying index has risen. During periods when short-term interest rates are relatively low as compared to long-term interest rates, the Fund may attempt to enhance its yield by purchasing inverse floaters. Certain inverse floaters may have an interest rate reset mechanism that multiplies the effects of changes in the underlying index. While this form of leverage may increase the security’s yield, it may also increase the volatility of the security’s market value. Similar to other variable and floating rate obligations, effective use of inverse floaters requires skills different from those needed to select most portfolio securities. If movements in interest rates are incorrectly anticipated, a Fund holding these instruments could lose money and its NAV could decline.
Letters of Credit	Debt obligations, including municipal obligations, certificates of participation, commercial paper and other short-term obligations, may be backed by an irrevocable letter of credit of a bank that assumes the obligation for payment of principal and interest in the event of default by the issuer. Only banks that, in the opinion of the relevant Fund’s subadviser, are of investment quality comparable to other permitted investments of the Fund may be used for Letter of Credit-backed investments.
Loan and Debt Participations and Assignments	A loan participation agreement involves the purchase of a share of a loan made by a bank to a company in return for a corresponding share of the borrower’s principal and interest payments. Loan participations

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Investment Technique	Description and Risks	Fund-Specific Limitations
	of the type in which the Fund may invest include interests in both secured and unsecured corporate loans. When a Fund purchases loan assignments from lenders, it will acquire direct rights against the borrower, but these rights and the Fund’s obligations may differ from, and be more limited than, those held by the assignment lender. The principal credit risk associated with acquiring loan participation and assignment interests is the credit risk associated with the underlying corporate borrower. There is also a risk that there may not be a readily available market for participation loan interests and, in some cases, this could result in the Fund disposing of such securities at a substantial discount from face value or holding such securities until maturity. In the event that a corporate borrower failed to pay its scheduled interest or principal payments on participations held by the Fund, the market value of the affected participation would decline, resulting in a loss of value of such investment to the Fund. Accordingly, such participations are speculative and may result in the income level and net assets of the Fund being reduced. Moreover, loan participation agreements generally limit the right of a participant to resell its interest in the loan to a third party and, as a result, loan participations may be deemed by the Fund to be illiquid investments. A Fund will invest only in participations with respect to borrowers whose creditworthiness is, or is determined by the Fund’s subadviser to be, substantially equivalent to that of issuers whose senior unsubordinated debt securities are rated B or higher by Moody’s or S&P. For the purposes of diversification and/or concentration calculations, both the borrower and issuer will be considered an “issuer.” The Funds may purchase from banks participation interests in all or part of specific holdings of debt obligations. Each participation interest is backed by an irrevocable letter of credit or guarantee of the selling bank that the relevant Fund’s subadviser has determined meets the prescribed quality standards of the Fund. Thus, even if the credit of the issuer of the debt obligation does not meet the quality standards of the Fund, the credit of the selling bank will. Loan participations and assignments may be illiquid and therefore subject to the Funds’ limitations on investments in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Senior Loans	A senior floating rate loan (“Senior Loan”) is typically originated, negotiated and structured by a U.S. or foreign commercial bank, insurance company, finance company or other financial institution (the “Agent”) for a group of loan investors (“Loan Investors”). The Agent typically administers and enforces the Senior Loan on behalf of the other Loan Investors in the syndicate. In addition, an institution, typically but not always the Agent, holds any collateral on behalf of the Loan Investors. Senior Loans primarily include senior floating rate loans and secondarily senior fixed rate loans, and interests therein. Loan interests primarily take the form of assignments purchased in the primary or secondary market. Loan interests may also take the form of participation interests in a Senior Loan. Such loan interests may be acquired from U.S. or foreign commercial banks, insurance companies, finance companies or other financial institutions who have made loans or are Loan Investors or from other investors in loan interests. The Fund typically purchases “assignments” from the Agent or other Loan Investors. The purchaser of an assignment typically succeeds to all the rights and obligations under the Loan Agreement of the assigning Loan Investor and becomes a Loan Investor under the Loan Agreement with the same rights and obligations as the assigning Loan Investor.	Each Fund other than Seix Floating Rate High Income Fund may invest up to 10% of its total assets in “participations.”

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			Assignments may, however, be arranged through private negotiations between potential assignees and potential assignors, and the rights and obligations acquired by the purchaser of an assignment may differ from, and be more limited than, those held by the assigning Loan Investor. Each Fund is permitted to invest a portion of its total assets in “participations.” Loan participations are interests in loans to corporations, which loans are administered by the lending bank or agent for a syndicate of lending banks. In a Loan participation, the borrower corporation is the underlying issuer of the loan, but the Fund derives its rights in the loan participation from the intermediary bank. Because the intermediary bank does not guarantee a Loan participation, it is subject to the credit risks associated with the underlying corporate borrower. Participations by the Fund in a Loan Investor’s portion of a Senior Loan typically will result in the Fund having a contractual relationship only with such Loan Investor, not with the borrower. As a result, the Fund may have the right to receive payments of principal, interest and any fees to which it is entitled only from the Loan Investor selling the participation and only upon receipt by such Loan Investor of such payments from the borrower. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the Loan Agreement, nor any rights with respect to any funds acquired by other Loan Investors through set-off against the borrower and the Fund may not directly benefit from the collateral supporting the Senior Loan in which it has purchased the participation. As a result, the Fund may assume the credit risk of both the borrower and the Loan Investor selling the participation. In the event of the insolvency of the Loan Investor selling a participation, the Fund may be treated as a general creditor of such Loan Investor. The selling Loan Investors with respect to such participations will likely conduct their principal business activities in the banking, finance and financial services industries. Persons engaged in such industries may be more susceptible to, among other things, fluctuations in interest rates, changes in the Federal Open Market Committee’s monetary policy, governmental regulations concerning such industries and capital raising activities generally, and fluctuations in the financial markets generally. In the event of bankruptcy or insolvency of the corporate borrower, a Loan participation may be subject to certain defenses that can be asserted by the borrower as a result of improper conduct by the seller. In addition, in the event the underlying corporate borrower fails to pay principal and interest when due, the Fund may be subject to delays, expenses, and risks that are greater than those that would have been involved if the Fund had purchased a direct obligation of the borrower. Under the terms of a Loan participation, the Fund may be regarded as a creditor of the seller of the loan participation (rather than of the underlying corporate borrower), so that the Fund may also be subject to the risk that the seller of the loan participation may become insolvent. The secondary market for loan participations is limited and any such participation purchased by the Fund may be regarded as illiquid. A borrower must comply with various restrictive covenants contained in a loan agreement or note purchase agreement between the borrower and the holders of the Senior Loan (the “Loan Agreement”). The Fund will generally rely upon the Agent or an intermediate

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			participant to receive and forward to the Fund its portion of the principal and interest payments on the Senior Loan. Furthermore, unless under the terms of a Participation Agreement the Fund has direct recourse against the borrower, the Fund will rely on the Agent and the other Loan Investors to use appropriate credit remedies against the borrower. With respect to Senior Loans for which the Agent does not perform administrative and enforcement functions, the Fund will perform such tasks on its own behalf, although a collateral bank will typically hold any collateral on behalf of the Fund and the other Loan Investors pursuant to the applicable Loan Agreement. A Fund may purchase and retain in its portfolio a Senior Loan where the borrower has experienced, or may be perceived to be likely to experience, credit problems, including involvement in or recent emergence from bankruptcy reorganization proceedings or other forms of debt restructuring. Such investments may provide opportunities for enhanced income as well as capital appreciation. At times, in connection with the restructuring of a Senior Loan either outside of bankruptcy court or in the context of bankruptcy court proceedings, a Fund may determine or be required to accept equity securities or junior debt securities in exchange for all or a portion of a Senior Loan. As soon as reasonably practical, a Fund will divest itself of any equity securities or any junior debt securities received if it is determined that the security is an ineligible holding for a Fund. A Fund may acquire interests in Senior Loans which are designed to provide temporary or “bridge” financing to a borrower pending the sale of identified assets or the arrangement of longer-term loans or the issuance and sale of debt obligations. Bridge loans are often unrated. A Fund may also invest in Senior Loans of borrowers that have obtained bridge loans from other parties. A borrower’s use of bridge loans involves a risk that the borrower may be unable to locate permanent financing to replace the bridge loan, which may impair the borrower’s perceived creditworthiness. A Fund will be subject to the risk that collateral securing a loan will decline in value or have no value. Such a decline, whether as a result of bankruptcy proceedings or otherwise, could cause the Senior Loan to be under-collateralized or unsecured. In most credit agreements there is no formal requirement to pledge additional collateral. In addition, a Fund may invest in Senior Loans guaranteed by, or secured by assets of, shareholders or owners, even if the Senior Loans are not otherwise collateralized by assets of the borrower; provided, however, that such guarantees are fully secured. If a borrower becomes involved in bankruptcy proceedings, a court may invalidate a Fund’s security interest in the loan collateral or subordinate a Fund’s rights under the Senior Loan to the interests of the borrower’s unsecured creditors or cause interest previously paid to be refunded to the borrower. If a court requires interest to be refunded, it could negatively affect a Fund’s performance. Such action by a court could be based, for example, on a “fraudulent conveyance” claim to the effect that the borrower did not receive fair consideration for granting the security interest in the loan collateral to a Fund or a “preference claim” that a pre-petition creditor received a greater recovery on an existing debt than it would have in a liquidation situation. There are also other events, such as the failure to perfect a security interest due to faulty documentation or faulty official filings, which could lead to the invalidation of a Fund’s security interest in loan collateral.

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	If a Fund’s security interest in loan collateral is invalidated or the Senior Loan is subordinated to other debt of a borrower in bankruptcy or other proceedings, a Fund would have substantially lower recovery, and perhaps no recovery on the full amount of the principal and interest due on the Loan, or a Fund could also have to refund interest. A Fund may acquire warrants and other equity securities as part of a unit combining a Senior Loan and equity securities of a borrower or its affiliates. The acquisition of such equity securities will only be incidental to a Fund’s purchase of a Senior Loan. A Fund may also acquire equity securities or debt securities (including non-dollar denominated debt securities) issued in exchange for a Senior Loan or issued in connection with the debt restructuring or reorganization of a borrower, or if such acquisition, in the judgment of the Subadviser, may enhance the value of a Senior Loan or would otherwise be consistent with a Fund’s investment policies. Economic and other market events may reduce the demand for certain senior loans held by the Fund, which may adversely impact the net asset value of the Fund.
Municipal Securities and Related Investments	Tax-exempt municipal securities are debt obligations issued by the various states and their subdivisions (e.g., cities, counties, towns, and school districts) to raise funds, generally for various public improvements requiring long-term capital investment. Purposes for which tax-exempt bonds are issued include flood control, airports, bridges and highways, housing, medical facilities, schools, mass transportation and power, water or sewage plants, as well as others. Tax-exempt bonds also are occasionally issued to retire outstanding obligations, to obtain funds for operating expenses or to loan to other public or, in some cases, private sector organizations or to individuals. Yields on municipal securities are dependent on a variety of factors, including the general conditions of the money market and the municipal bond market, the size of a particular offering, the maturity of the obligations and the rating of the issue. Municipal securities with longer maturities tend to produce higher yields and are generally subject to potentially greater capital appreciation and depreciation than obligations with shorter maturities and lower yields. The market prices of municipal securities usually vary, depending upon available yields. An increase in interest rates will generally reduce the value of portfolio investments, and a decline in interest rates will generally increase the value of portfolio investments. The ability of the Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of municipal securities in which the Fund invests to meet their obligations for the payment of interest and principal when due. The ratings of Moody’s and S&P represent their opinions as to the quality of municipal securities which they undertake to rate. Ratings are not absolute standards of quality; consequently, municipal securities with the same maturity, coupon, and rating may have different yields. There are variations in municipal securities, both within a particular classification and between classifications, depending on numerous factors. It should also be pointed out that, unlike other types of investments, municipal securities have traditionally not been subject to regulation by, or registration with, the SEC, although there have been proposals which would provide for such regulation in the future. The federal bankruptcy statutes relating to the debts of political subdivisions and authorities of states of the United States provide that, in certain circumstances, such subdivisions or authorities may be authorized to initiate bankruptcy proceedings without prior notice to or consent of creditors, which proceedings could result in material and adverse changes in the rights of holders of their obligations.

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	Lawsuits challenging the validity under state constitutions of present systems of financing public education have been initiated or adjusted in a number of states, and legislation has been introduced to effect changes in public school financing in some states. In other instances there have been lawsuits challenging the issuance of pollution control revenue bonds or the validity of their issuance under state or federal law which could ultimately affect the validity of those municipal securities or the tax-free nature of the interest thereon. Descriptions of some of the municipal securities and related investment types most commonly acquired by the Funds are provided below. In addition to those shown, other types of municipal investments are, or may become, available for investment by the Funds. For the purpose of each Fund’s investment restrictions set forth in this SAI, the identification of the “issuer” of a municipal security which is not a general obligation bond is made by the applicable Fund’s subadviser on the basis of the characteristics of the obligation, the most significant of which is the source of funds for the payment of principal and interest on such security.
Municipal Bonds	Municipal bonds, which meet longer-term capital needs and generally have maturities of more than one year when issued, have two principal classifications: general obligation bonds and revenue bonds. Another type of municipal bond is referred to as an industrial development bond.
General Obligation Bonds	Issuers of general obligation bonds include states, counties, cities, towns, and regional districts. The proceeds of these obligations are used to fund a wide range of public projects, including construction or improvement of schools, highways and roads, and water and sewer systems. The basic security behind general obligation bonds is the issuer’s pledge of its full faith and credit and taxing power for the payment of principal and interest. The taxes that can be levied for the payment of debt service may be limited or unlimited as to the rate or amount of special assessments.
Industrial Development Bonds	Industrial development bonds, which are considered municipal bonds if the interest paid is exempt from Federal income tax, are issued by or on behalf of public authorities to raise money to finance various privately operated facilities for business and manufacturing, housing, sports arenas and pollution control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility’s user to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment.
Revenue Bonds	The principal security for a revenue bond is generally the net revenues derived from a particular facility, group of facilities, or, in some cases, the proceeds of a special excise or other specific revenue source. Revenue bonds are issued to finance a wide variety of capital projects including: electric, gas, water and sewer systems; highways, bridges, and tunnels; port and airport facilities; colleges and universities; and hospitals. Although the principal security behind these bonds may vary, many provide additional security in the form of a debt service reserve fund whose money may be used to make principal and interest payments on the issuer’s obligations. Housing finance authorities have a wide range of security; including partially or fully insured mortgages, rent subsidized and/or collateralized mortgages, and/or the net revenues from housing or other public projects. Some authorities provide further security in the form of a state’s ability (without obligation) to make up deficiencies in the debt service reserve fund.

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Investment Technique	Description and Risks	Fund-Specific Limitations
Municipal Forwards	Municipal forwards are forward commitments for the purchase of tax-exempt bonds with a specified coupon to be delivered by an issuer at a future date, typically exceeding 45 days but, normally less than one year after the commitment date. Municipal forwards are normally used as a refunding mechanism for bonds that may only be redeemed on a designated future date.
Municipal Leases	Each Fund may acquire participations in lease obligations or installment purchase contract obligations (hereinafter collectively called “lease obligations”) of municipal authorities or entities. Although lease obligations do not constitute general obligations of the municipality for which the municipality’s taxing power is pledged, a lease obligation may be backed by the municipality’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In addition to the “non-appropriation” risk, these securities represent a relatively new type of financing that has not yet developed the depth of marketability associated with more conventional bonds. In the case of a “non-appropriation” lease, the Fund’s ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property in the event foreclosure might prove difficult. The Fund’s subadviser will evaluate the credit quality of a municipal lease and whether it will be considered liquid. (See “Illiquid and Restricted Investments” in this section of the SAI for information regarding the implications of these investments being considered illiquid.)
Municipal Notes	Municipal notes generally are used to provide for short-term working capital needs and generally have maturities of one year or less. Municipal notes include bond anticipation notes, construction loan notes, revenue anticipation notes and tax anticipation notes.
Bond Anticipation Notes	Bond anticipation notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the notes.
Construction Loan Notes	Construction loan notes are sold to provide construction financing. After successful completion and acceptance, many projects receive permanent financing through FNMA or GNMA.
Revenue Anticipation Notes	Revenue anticipation notes are issued in expectation of receipt of other types of revenue, such as Federal revenues available under Federal revenue sharing programs.
Tax Anticipation Notes	Tax anticipation notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of various seasonal tax revenue, such as income, sales, use and business taxes, and are payable from these specific future taxes.
Taxable Municipal Securities	Taxable municipal securities are municipal securities the interest on which is not exempt from federal income tax. Taxable municipal securities include “private activity bonds” that are issued by or on behalf of states or political subdivisions thereof to finance privately-owned or operated facilities for business and manufacturing, housing, sports, and pollution control and to finance activities of and facilities for charitable institutions. Private activity bonds are also used to finance public facilities such as airports, mass transit systems, ports, parking lots, and low income housing. The payment of the principal and interest on private activity bonds is not backed by a pledge of tax revenues, and is dependent solely on the ability of the facility’s user to

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	meet its financial obligations, and may be secured by a pledge of real and personal property so financed. Interest on these bonds may not be exempt from federal income tax.
Tax-Exempt Commercial Paper	Tax-exempt commercial paper is a short-term obligation with a stated maturity of 365 days or less. It is issued by state and local governments or their agencies to finance seasonal working capital needs or as short-term financing in anticipation of longer-term financing.
Participation on Creditors’ Committees	While the Funds do not invest in securities to exercise control over the securities’ issuers, each Fund may, from time to time, participate on committees formed by creditors to negotiate with the management of financially troubled issuers of securities held by the Fund. Such participation may subject the relevant Fund to expenses such as legal fees and may deem the Fund an “insider” of the issuer for purposes of the Federal securities laws, and expose the Fund to material non-public information of the issuer, and therefore may restrict the Fund’s ability to purchase or sell a particular security when it might otherwise desire to do so. Participation by a Fund on such committees also may expose the Fund to potential liabilities under the federal bankruptcy laws or other laws governing the rights of creditors and debtors. A Fund will participate on such committees only when the Fund’s subadviser believes that such participation is necessary or desirable to enforce the Fund’s rights as a creditor or to protect the value of securities held by the Fund.
Payable in Kind (“PIK”) Bonds	PIK bonds are obligations which provide that the issuer thereof may, at its option, pay interest on such bonds in cash or “in kind”, which means in the form of additional debt securities. Such securities benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of such cash. The Funds will accrue income on such investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the Funds’ distribution obligations. The market prices of PIK bonds generally are more volatile than the market prices of securities that pay interest periodically, and they are likely to respond to changes in interest rates to a greater degree than would otherwise similar bonds on which regular cash payments of interest are being made.
Ratings	The rating or quality of a debt security refers to a rating agency’s assessment of the issuer’s creditworthiness, i.e., its ability to pay principal and interest when due. Higher ratings indicate better credit quality, as rated by independent rating organizations such as Moody’s, S&P or Fitch, which publish their ratings on a regular basis. Appendix A provides a description of the various ratings provided for bonds (including convertible bonds), municipal bonds, and commercial paper. After a Fund purchases a debt security, the rating of that security may be reduced below the minimum rating acceptable for purchase by the Fund. A subsequent downgrade does not require the sale of the security, but the Fund’s subadviser will consider such an event in determining whether to continue to hold the obligation. To the extent that ratings established by Moody’s or S&P may change as a result of changes in such organizations or their rating systems, a Fund will invest in securities which are deemed by the Fund’s subadviser to be of comparable quality to securities whose current ratings render them eligible for purchase by the Fund. Credit ratings issued by credit rating agencies evaluate the safety of principal and interest payments of rated securities. They do not, however, evaluate the market-value risk and therefore may not fully

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	reflect the true risks of an investment. In addition, credit rating agencies may or may not make timely changes in a rating to reflect changes in the economy or in the condition of the issuer that affect the market value of the security. Consequently, credit ratings are used only as a preliminary indicator of investment quality.
Revolving Credit Facilities (Revolvers)	Revolvers are borrowing arrangements in which the lender agrees to make loans up to a maximum amount upon demand by the borrower during a specified term. As the borrower repays the loan, an amount equal to the repayment may be borrowed again during the term of the Revolver and usually provides for floating or variable rates of interest. These commitments may have the effect of requiring the Fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To avoid any leveraging concerns, the Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its obligations to fund Revolvers. The Fund may invest in Revolvers with credit quality comparable to that of issuers of its other investments. Revolvers may be subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, the Fund may be unable to sell such investments at an opportune time or may have to resell them at less than fair market value. Each Fund currently intends to treat Revolvers for which there is no readily available market as illiquid for purposes of that Fund’s limitation on illiquid investments.
Sovereign Debt	Each Fund may invest in “sovereign debt,” which is issued or guaranteed by foreign governments (including countries, provinces and municipalities) or their agencies and instrumentalities. Sovereign debt may trade at a substantial discount from face value. The Funds may hold and trade sovereign debt of foreign countries in appropriate circumstances to participate in debt conversion programs. Emerging-market country sovereign debt involves a higher degree of risk than that of developed markets, is generally lower-quality debt, and is considered speculative in nature due, in part, to the extreme and volatile nature of debt burdens in such countries and because emerging market governments can be relatively unstable. The issuer or governmental authorities that control sovereign-debt repayment (“sovereign debtors”) may be unable or unwilling to repay principal or interest when due in accordance with the terms of the debt. A sovereign debtor’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash-flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy towards the IMF, and the political constraints to which the sovereign debtor may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearage on their debt. The commitment of these third parties to make such disbursements may be conditioned on the sovereign debtor’s implementation of economic reforms or economic performance and the timely service of the debtor’s obligations. The sovereign debtor’s failure to meet these conditions may cause these third parties to cancel their commitments to provide funds to the sovereign debtor, which may further impair the debtor’s ability or willingness to timely service its debts. In certain instances, the Funds may invest in sovereign debt that is in default as to

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	payments of principal or interest. In the event that the Funds hold non-performing sovereign debt, the Funds may incur additional expenses in connection with any restructuring of the issuer’s obligations or in otherwise enforcing their rights thereunder.
Brady Bonds	Each Fund may invest a portion of its assets in certain sovereign debt obligations known as “Brady Bonds.” Brady Bonds are issued under the framework of the Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure their outstanding external indebtedness. The Brady Plan contemplates, among other things, the debtor nation’s adoption of certain economic reforms and the exchange of commercial bank debt for newly issued bonds. In restructuring its external debt under the Brady Plan framework, a debtor nation negotiates with its existing bank lenders as well as the World Bank or the IMF. The World Bank or IMF supports the restructuring by providing funds pursuant to loan agreements or other arrangements that enable the debtor nation to collateralize the new Brady Bonds or to replenish reserves used to reduce outstanding bank debt. Under these loan agreements or other arrangements with the World Bank or IMF, debtor nations have been required to agree to implement certain domestic monetary and fiscal reforms. The Brady Plan sets forth only general guiding principles for economic reform and debt reduction, emphasizing that solutions must be negotiated on a case-by-case basis between debtor nations and their creditors. Brady Bonds are often viewed as having three or four valuation components: (i) the collateralized repayment of principal at final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity (these uncollateralized amounts constitute the “residual risk”). In light of the residual risk of Brady Bonds and, among other factors, the history of defaults with respect to commercial bank loans by public and private entities of countries issuing Brady Bonds, investments in Brady Bonds can be viewed as speculative.
Stand-by Commitments	Each Fund may purchase securities together with the right to resell them to the seller or a third party at an agreed-upon price or yield within specified periods prior to their maturity dates. Such a right to resell is commonly known as a stand-by commitment, and the aggregate price which a Fund pays for securities with a stand-by commitment may increase the cost, and thereby reduce the yield, of the security. The primary purpose of this practice is to permit the Fund to be as fully invested as practicable in municipal securities while preserving the necessary flexibility and liquidity to meet unanticipated redemptions. Stand-by commitments acquired by a Fund are valued at zero in determining the Fund’s NAV. Stand-by commitments involve certain expenses and risks, including the inability of the issuer of the commitment to pay for the securities at the time the commitment is exercised, non-marketability of the commitment, and differences between the maturity of the underlying security and the maturity of the commitment.
Strip Bonds	Strip bonds are debt securities that are stripped of their interest (usually by a financial intermediary) after the securities are issued. The market value of these securities generally fluctuates more in response to changes in interest rates than interest-paying securities of comparable maturity.
Tax Credit Bonds (“Build America Bonds”)	Build America Bonds are taxable bonds issued by federal and state local governments that allow a new direct federal payment subsidy. At the election of the state and local governments, the Treasury Department will make a direct payment to the state or local

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	governmental issuer in an amount equal to 35% of the interest payment on the Build America Bonds. As a result, state and local governments will have lower net borrowing costs. This will also make Build America Bonds attractive to a broader group of investors that typically invest in traditional state and local tax-exempt bonds, where interest rates have historically been 20% lower than taxable interest rates.
Tender Option Bonds	Tender option bonds are relatively long-term bonds that are coupled with the option to tender the securities to a bank, broker-dealer or other financial institution at periodic intervals and receive the face value of the bond. This investment structure is commonly used as a means of enhancing a security’s liquidity.
Variable and Floating Rate Obligations	Each Fund may purchase securities having a floating or variable rate of interest. These securities pay interest at rates that are adjusted periodically according to a specific formula, usually with reference to some interest rate index or market interest rate (the “underlying index”). The floating rate tends to decrease the security’s price sensitivity to changes in interest rates. These securities may carry demand features permitting the holder to demand payment of principal at any time or at specified intervals prior to maturity. Accordingly, as interest rates decrease or increase, the potential for capital appreciation or depreciation is less than for fixed-rate obligations. The floating and variable rate obligations that the Funds may purchase include variable rate demand securities. Variable rate demand securities are variable rate securities that have demand features entitling the purchaser to resell the securities to the issuer at an amount approximately equal to amortized cost or the principal amount thereof plus accrued interest, which may be more or less than the price that the Fund paid for them. The interest rate on variable rate demand securities also varies either according to some objective standard, such as an index of short-term, tax-exempt rates, or according to rates set by or on behalf of the issuer. When a Fund purchases a floating or variable rate demand instrument, the Fund’s subadviser will monitor, on an ongoing basis, the ability of the issuer to pay principal and interest on demand. The Fund’s right to obtain payment at par on a demand instrument could be affected by events occurring between the date the Fund elects to demand payment and the date payment is due that may affect the ability of the issuer of the instrument to make payment when due, except when such demand instrument permits same day settlement. To facilitate settlement, these same day demand instruments may be held in book entry form at a bank other than the Funds’ custodian subject to a sub-custodian agreement between the bank and the Funds’ custodian. The floating and variable rate obligations that the Funds may purchase also include certificates of participation in such obligations purchased from banks. A certificate of participation gives the Fund an undivided interest in the underlying obligations in the proportion that the Fund’s interest bears to the total principal amount of the obligation. Certain certificates of participation may carry a demand feature that would permit the holder to tender them back to the issuer prior to maturity. The income received on certificates of participation in tax-exempt municipal obligations constitutes interest from tax-exempt obligations. Each Fund will limit its purchases of floating and variable rate obligations to those of the same quality as it otherwise is allowed to purchase. Similar to fixed rate debt instruments, variable and floating rate instruments are subject to changes in value based on changes in prevailing market interest rates or changes in the issuer’s creditworthiness.

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	A floating or variable rate instrument may be subject to a Fund’s percentage limitation on illiquid securities if there is no reliable trading market for the instrument or if the Fund may not demand payment of the principal amount within seven days. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Zero and Deferred Coupon Debt Securities	Each Fund may invest in debt obligations that do not make any interest payments for a specified period of time prior to maturity (“deferred coupon” bonds) or until maturity (“zero coupon” bonds). The nonpayment of interest on a current basis may result from the bond’s having no stated interest rate, in which case the bond pays only principal at maturity and is normally initially issued at a discount from face value. Alternatively, the bond may provide for a stated rate of interest, but provide that such interest is not payable until maturity, in which case the bond may initially be issued at par. The value to the investor of these types of bonds is represented by the economic accretion either of the difference between the purchase price and the nominal principal amount (if no interest is stated to accrue) or of accrued, unpaid interest during the bond’s life or payment deferral period. Because deferred and zero coupon bonds do not make interest payments for a certain period of time, they are generally purchased by a Fund at a deep discount and their value fluctuates more in response to interest rate changes than does the value of debt obligations that make current interest payments. The degree of fluctuation with interest rate changes is greater when the deferred period is longer. Therefore, when a Fund invests in zero or deferred coupon bonds, there is a risk that the value of the Fund’s shares may decline more as a result of an increase in interest rates than would be the case if the Fund did not invest in such bonds. Even though zero and deferred coupon bonds may not pay current interest in cash, each Fund is required to accrue interest income on such investments and to distribute such amounts to shareholders. Thus, a Fund would not be able to purchase income-producing securities to the extent cash is used to pay such distributions, and, therefore, the Fund’s current income could be less than it otherwise would have been. Instead of using cash, the Fund might liquidate investments in order to satisfy these distribution requirements.
Derivative Instruments	Each Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. Each Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each Fund may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or in pursuit of its investment objective(s) and policies (to seek to enhance returns). When a Fund invests in a derivative, the risks of loss of that derivative may be greater than the derivative’s cost. No Fund may use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. In addition to other considerations, a Fund’s ability to use derivative instruments may be limited by tax considerations. (See “Dividends, Distributions and Taxes” in this SAI.) Investments in derivatives may subject a Fund to special risks in addition to normal market fluctuations and other risks inherent in investment in securities. For example, a percentage of the Fund’s assets may be segregated to cover its obligations with respect to the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	derivative investment, which may make it more difficult for the Fund’s subadviser to meet redemption requests or other short-term obligations. Investments in derivatives in general are also subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case.
Commodity Interests	Certain of the derivative investment types permitted for the Funds may be considered commodity interests for purposes of the CEA and regulations approved by the CFTC. However, each Fund intends to limit the use of such investment types as required to qualify for exclusion or exemption from being considered a “commodity pool” or otherwise as a vehicle for trading in commodity interests under such regulations. As a result, except as otherwise noted in the Fund Specific Limitations column to the right, each Fund has filed a notice of exclusion under CFTC Regulation 4.5 or exemption under another CFTC regulation. The CFTC has adopted amendments to its rules that may affect the Funds’ ability to continue to claim exclusion or exemption from regulation. If a Fund’s use of these techniques would cause the Fund to be considered a “commodity pool” under the CEA, then the Adviser would be subject to registration and regulation as the Fund’s commodity pool operator, and the Fund’s subadviser may be subject to registration and regulation as the Fund’s commodity trading advisor. A Fund may incur additional expense as a result of the CFTC’s registration and regulation obligations, and the Fund’s use of these techniques and other instruments may be limited or restricted.	As of the date of this SAI, each Fund intends to limit the use of such investment types as required to qualify for exclusion or exemption from being considered a “commodity pool” or otherwise as a vehicle for trading in commodity interests under such regulations, and each Fund has filed a notice of exclusion under CFTC Regulation 4.5 or exemption under another CFTC regulation.
Credit-linked Notes	Credit-linked notes are derivative instruments used to transfer credit risk. The performance of the notes is linked to the performance of the underlying reference obligation or reference portfolio (“reference entities”). The notes are usually issued by a special purpose vehicle that sells credit protection through a credit default swap agreement in return for a premium and an obligation to pay the transaction sponsor should a reference entity experience a credit event, such as bankruptcy. The special purpose vehicle invests the proceeds from the notes to cover its contingent obligation. Revenue from the investments and the money received as premium are used to pay interest to note holders. The main risk of credit linked notes is the risk of default to the reference obligation of the credit default swap. Should a default occur, the special purpose vehicle would have to pay the transaction sponsor, subordinating payments to the note holders. Credit linked notes also may not be liquid and may be subject to currency and interest rate risks as well.
Equity-linked Derivatives	Each Fund may invest in equity-linked derivative products, the performance of which is designed to correspond generally to the performance of a specified stock index or “basket” of stocks, or to a single stock. Investments in equity-linked derivatives involve the same risks associated with a direct investment in the types of securities such products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives will equal the underlying value of the securities purchased to replicate a particular investment or that such basket will replicate the investment.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Investments in equity-linked derivatives may constitute investments in other investment companies. (See “Mutual Fund Investing” in this section of the SAI for information regarding the implications of a Fund investing in other investment companies.)
Eurodollar Instruments	The Funds may invest in Eurodollar instruments. Eurodollar instruments are dollar-denominated certificates of deposit and time deposits issued outside the U.S. capital markets by foreign branches of U.S. banks and by foreign banks. Eurodollar futures contracts enable purchasers to obtain a fixed rate for the lending of funds and sellers to obtain a fixed rate for borrowings. A Fund might use Eurodollar instruments to hedge against changes in interest rates or to enhance returns. Eurodollar obligations are subject to the same risks that pertain to domestic issuers, most notably income risk (and, to a lesser extent, credit risk, market risk, and liquidity risk). Additionally, Eurodollar obligations are subject to certain sovereign risks. One such risk is the possibility that a sovereign country might prevent capital, in the form of dollars, from flowing across its borders. Other risks include adverse political and economic developments, the extent and quality of government regulation of financial markets and institutions, the imposition of foreign withholding taxes, and expropriation or nationalization of foreign issuers. However, Eurodollar obligations will undergo the same type of credit analysis as domestic issuers in which a Fund invests.
Foreign Currency Forward Contracts, Futures and Options	Each Fund may engage in certain derivative foreign currency exchange and option transactions involving investment risks and transaction costs to which the Fund would not be subject absent the use of these strategies. If a Fund’s subadviser’s predictions of movements in the direction of securities prices or currency exchange rates are inaccurate, the Fund may experience adverse consequences, leaving it in a worse position than if it had not used such strategies. Risks inherent in the use of option and foreign currency forward and futures contracts include: (1) dependence on the Fund’s subadviser’s ability to correctly predict movements in the direction of securities prices and currency exchange rates; (2) imperfect correlation between the price of options and futures contracts and movements in the prices of the securities or currencies being hedged; (3) the fact that the skills needed to use these strategies are different from those needed to select portfolio securities; (4) the possible absence of a liquid secondary market for any particular instrument at any time; and (5) the possible need to defer closing out certain hedged positions to avoid adverse tax consequences. The Fund’s ability to enter into futures contracts is also limited by the requirements of the Code for qualification as a regulated investment company. (See the “Dividends, Distributions and Taxes” section of this SAI.) A Fund may engage in currency exchange transactions to protect against uncertainty in the level of future currency exchange rates. In addition, a Fund may write covered put and call options on foreign currencies for the purpose of increasing its return. A Fund may enter into contracts to purchase or sell foreign currencies at a future date (“forward contracts”) and purchase and sell foreign currency futures contracts. For certain hedging purposes, the Fund may also purchase exchange-listed and over-the-counter put and call options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the Fund the right to assume a short position in the futures contract until the expiration of the option. A put option on a currency gives the Fund the right to sell the currency at an exercise price until the expiration of the option. A

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Investment Technique			Description and Risks			Fund-Specific Limitations
			call option on a futures contract gives the Fund the right to assume a long position in the futures contract until the expiration of the option. A call option on a currency gives the Fund the right to purchase the currency at the exercise price until the expiration of the option. When engaging in position hedging, a Fund enters into foreign currency exchange transactions to protect against a decline in the values of the foreign currencies in which its portfolio securities are denominated (or an increase in the values of currency for securities which the Fund expects to purchase, when the Fund holds cash or short-term investments). In connection with position hedging, the Fund may purchase put or call options on foreign currency and on foreign currency futures contracts and buy or sell forward contracts and foreign currency futures contracts. (A Fund may also purchase or sell foreign currency on a spot basis, as discussed in “Foreign Currency Transactions” under “Foreign Investing” in this section of the SAI.) The precise matching of the amounts of foreign currency exchange transactions and the value of the portfolio securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the dates the currency exchange transactions are entered into and the dates they mature. It is also impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, it may be necessary for a Fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security or securities being hedged is less than the amount of foreign currency the Fund is obligated to deliver and a decision is made to sell the security or securities and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security or securities if the market value of such security or securities exceeds the amount of foreign currency the Fund is obligated to deliver. Hedging techniques do not eliminate fluctuations in the underlying prices of the securities which a Fund owns or intends to purchase or sell. They simply establish a rate of exchange which one can achieve at some future point in time. Additionally, although these techniques tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain which might result from the increase in value of such currency. A Fund may seek to increase its return or to offset some of the costs of hedging against fluctuations in currency exchange rates by writing covered put options and covered call options on foreign currencies. In that case, the Fund receives a premium from writing a put or call option, which increases the Fund’s current return if the option expires unexercised or is closed out at a net profit. A Fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written. A Fund’s currency hedging transactions may call for the delivery of one foreign currency in exchange for another foreign currency and may at times not involve currencies in which its portfolio securities are then denominated. A Fund’s subadviser will engage in such “cross hedging” activities when it believes that such transactions provide significant hedging opportunities for the Fund. Cross hedging transactions by a Fund involve the risk of imperfect correlation between changes in the values of the currencies to which such transactions relate and changes in the value of the currency or other asset or liability which is the subject of the hedge.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Foreign currency forward contracts, futures and options may be traded on foreign exchanges. Such transactions may not be regulated as effectively as similar transactions in the United States; may not involve a clearing mechanism and related guarantees; and are subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities. The value of such positions also could be adversely affected by (i) other complex foreign political, legal and economic factors, (ii) lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the relevant Fund’s ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) lesser trading volume. The types of derivative foreign currency exchange transactions most commonly employed by the Funds are discussed below, although each Fund is also permitted to engage in other similar transactions to the extent consistent with the Fund’s investment limitations and restrictions.
Foreign Currency Forward Contracts	A foreign currency forward contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days (“term”) from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts are traded directly between currency traders (usually large commercial banks) and their customers. A Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily in an amount not less than the value of the Fund’s total assets committed to forward foreign currency exchange contracts entered into for the purchase of a foreign currency. If the value of the securities specifically designated declines, additional cash or securities will be added so that the specifically designated amount is not less than the amount of the Fund’s commitments with respect to such contracts.
Foreign Currency Futures Transactions	Each Fund may use foreign currency futures contracts and options on such futures contracts. Through the purchase or sale of such contracts, a Fund may be able to achieve many of the same objectives attainable through the use of foreign currency forward contracts, but more effectively and possibly at a lower cost. Unlike forward foreign currency exchange contracts, foreign currency futures contracts and options on foreign currency futures contracts are standardized as to amount and delivery period and are traded on boards of trade and commodities exchanges. It is anticipated that such contracts may provide greater liquidity and lower cost than forward foreign currency exchange contracts. Purchasers and sellers of foreign currency futures contracts are subject to the same risks that apply to the buying and selling of futures generally. In addition, there are risks associated with foreign currency futures contracts similar to those associated with options on foreign currencies. (See “Foreign Currency Options” and “Futures Contracts and Options on Futures Contracts”, each in this sub-section of the SAI.) The Fund must accept or make delivery of the underlying foreign currency, through banking arrangements, in accordance with any U.S. or foreign restrictions or regulations regarding the maintenance of foreign banking arrangements by U.S. residents and may be required to pay any fees, taxes or charges associated with such delivery which are assessed in the issuing country.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	To the extent required to comply with SEC Release No. IC-10666, when entering into a futures contract or an option transaction, a Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the net amount of the Fund’s obligation. For foreign currency futures transactions, the prescribed amount will generally be the daily value of the futures contract, marked to market. Futures contracts are designed by boards of trade which are designated “contracts markets” by the CFTC. Futures contracts trade on contracts markets in a manner that is similar to the way a stock trades on a stock exchange and the boards of trade, through their clearing corporations, guarantee performance of the contracts. As of the date of this SAI, the Funds may invest in futures contracts under specified conditions without being regulated as commodity pools. However, under recently amended CFTC rules the Funds’ ability to maintain the exclusions/exemptions from the definition of commodity pool may be limited. (See “Commodity Interests” in this section of the SAI.)
Foreign Currency Options	A foreign currency option provides the option buyer with the right to buy or sell a stated amount of foreign currency at the exercise price at a specified date or during the option period. A call option gives its owner the right, but not the obligation, to buy the currency, while a put option gives its owner the right, but not the obligation, to sell the currency. The option seller (writer) is obligated to fulfill the terms of the option sold if it is exercised. However, either seller or buyer may close its position during the option period for such options any time prior to expiration. A call rises in value if the underlying currency appreciates. Conversely, a put rises in value if the underlying currency depreciates. While purchasing a foreign currency option can protect a Fund against an adverse movement in the value of a foreign currency, it does not limit the gain which might result from a favorable movement in the value of such currency. For example, if the Fund were holding securities denominated in an appreciating foreign currency and had purchased a foreign currency put to hedge against a decline in the value of the currency, it would not have to exercise its put. Similarly, if the Fund had entered into a contract to purchase a security denominated in a foreign currency and had purchased a foreign currency call to hedge against a rise in the value of the currency but instead the currency had depreciated in value between the date of purchase and the settlement date, the Fund would not have to exercise its call but could acquire in the spot market the amount of foreign currency needed for settlement. The value of a foreign currency option depends upon the value of the underlying currency relative to the other referenced currency. As a result, the price of the option position may vary with changes in the value of either or both currencies and have no relationship to the investment merits of a foreign security, including foreign securities held in a “hedged” investment portfolio. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the use of foreign currency options, the Funds may be disadvantaged by having to deal in an odd lot market (generally consisting of transactions of less than $1 million) for the underlying foreign currencies at prices that are less favorable than for round lots. As in the case of other kinds of options, the use of foreign currency options constitutes only a partial hedge, and a Fund could be required to purchase or sell foreign currencies at disadvantageous exchange rates, thereby incurring losses. The purchase of an option on a foreign

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Investment Technique	Description and Risks	Fund-Specific Limitations
	currency may not necessarily constitute an effective hedge against fluctuations in exchange rates and, in the event of rate movements adverse to the Fund’s position, the Fund may forfeit the entire amount of the premium plus related transaction costs. Options on foreign currencies written or purchased by a Fund may be traded on U.S. or foreign exchanges or over the counter. There is no systematic reporting of last sale information for foreign currencies traded over the counter or any regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely basis. Quotation information available is generally representative of very large transactions in the interbank market and thus may not reflect relatively smaller transactions (i.e., less than $1 million) where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market. To the extent that the options markets are closed while the markets for the underlying currencies remain open, significant price and rate movements may take place in the underlying markets that are not reflected in the options market. For additional information about options transactions, see “Options” under “Derivative Investments” in this section of the SAI.
Foreign Currency Warrants	Foreign currency warrants such as currency exchange warrants are warrants that entitle the holder to receive from the issuer an amount of cash (generally, for warrants issued in the United States, in U.S. dollars) that is calculated pursuant to a predetermined formula and based on the exchange rate between two specified currencies as of the exercise date of the warrant. Foreign currency warrants generally are exercisable upon their issuance and expire as of a specified date and time. Foreign currency warrants may be used to reduce the currency exchange risk assumed by purchasers of a security by, for example, providing for a supplemental payment in the event the U.S. dollar depreciates against the value of a major foreign currency such as the Japanese Yen or Euro. The formula used to determine the amount payable upon exercise of a foreign currency warrant may make the warrant worthless unless the applicable foreign currency exchange rate moves in a particular direction (e.g., unless the U.S. dollar appreciates or depreciates against the particular foreign currency to which the warrant is linked or indexed). Foreign currency warrants are severable from the debt obligations with which they may be offered, and may be listed on exchanges. Foreign currency warrants may be exercisable only in certain minimum amounts, and an investor wishing to exercise warrants who possesses less than the minimum number required for exercise may be required either to sell the warrants or to purchase additional warrants, thereby incurring additional transaction costs. Upon exercise of warrants, there may be a delay between the time the holder gives instructions to exercise and the time the exchange rate relating to exercise is determined, thereby affecting both the market and cash settlement values of the warrants being exercised. The expiration date of the warrants may be accelerated if the warrants should be delisted from an exchange or if their trading should be suspended permanently, which would result in the loss of any remaining “time value” of the warrants (i.e., the difference between the current market value and the exercise value of the warrants), and, if the warrants were “out-of-the-money,” in a total loss of the purchase price of the warrants. Warrants are generally unsecured obligations of their issuers and are not standardized foreign currency options issued by the OCC. Unlike foreign currency options issued by OCC, the terms of foreign exchange warrants generally will not be amended in the event of

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Investment Technique	Description and Risks	Fund-Specific Limitations
	governmental or regulatory actions affecting exchange rates or in the event of the imposition of other regulatory controls affecting the international currency markets. The initial public offering price of foreign currency warrants could be considerably in excess of the price that a commercial user of foreign currencies might pay in the interbank market for a comparable option involving larger amounts of foreign currencies. Foreign currency warrants are subject to significant foreign exchange risk, including risks arising from complex political or economic factors.
Performance Indexed Paper	Performance indexed paper is commercial paper the yield of which is linked to certain currency exchange rate movements. The yield to the investor on performance indexed paper is established at maturity as a function of spot exchange rates between the designated currencies as of or about the time (generally, the index maturity two days prior to maturity). The yield to the investor will be within a range stipulated at the time of purchase of the obligation, generally with a guaranteed minimum rate of return that is below, and a potential maximum rate of return that is above, market yields on commercial paper, with both the minimum and maximum rates of return on the investment corresponding to the minimum and maximum values of the spot exchange rate two business days prior to maturity.
Principal Exchange Rate Linked Securities (“PERLS”)	PERLS are debt obligations the principal on which is payable at maturity in an amount that may vary based on the exchange rate between the particular currencies at or about that time. The return on “standard” principal exchange rate linked securities is enhanced if the currency to which the security is linked appreciates against the base currency, and is adversely affected by increases in the exchange value of the base currency. “Reverse” PERLS are like the “standard” securities, except that their return is enhanced by increases in the value of the base currency and adversely impacted by increases in the value of other currency. Interest payments on the securities are generally made at rates that reflect the degree of currency risk assumed or given up by the purchaser of the notes (i.e., at relatively higher interest rates if the purchaser has assumed some of the currency exchange risk, or relatively lower interest rates if the issuer has assumed some of the currency exchange risk, based on the expectations of the current market). PERLS may in limited cases be subject to acceleration of maturity (generally, not without the consent of the holders of the securities), which may have an adverse impact on the value of the principal payment to be made at maturity.
Futures Contracts and Options on Futures Contracts	Each Fund may use interest rate, foreign currency, dividend, volatility or index futures contracts. An interest rate, foreign currency, dividend, volatility or index futures contract provides for the future sale by one party and purchase by another party of a specified quantity of a financial instrument, foreign currency, dividend basket or the cash value of an index at a specified price and time. A futures contract on an index is an agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to the difference between the value of the index at the close of the last trading day of the contract and the price at which the index contract was originally written. Although the value of an index might be a function of the value of certain specified securities, no physical delivery of these securities is made. A public market exists in futures contracts covering several indexes as well as a number of financial instruments and foreign currencies, and it is expected that other futures contracts will be developed and traded in the future. Interest rate and volatility futures contracts currently are traded in the United States primarily on the floors of the Chicago Board of Trade and the International Monetary Market of the Chicago Mercantile Exchange. Interest rate futures also are traded on foreign exchanges such as the London International Financial Futures Exchange and the Singapore International

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Investment Technique			Description and Risks			Fund-Specific Limitations
			Monetary Exchange. Volatility futures also are traded on foreign exchanges such as Eurex. Dividend futures are also traded on foreign exchanges such as Eurex, NYSE Euronext Liffe, London Stock Exchange and the Singapore International Monetary Exchange. A Fund may purchase and write call and put options on futures. Futures options possess many of the same characteristics as options on securities and indexes discussed above. A futures option gives the holder the right, in return for the premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of option. Upon exercise of a call option, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. In the case of a put option, the opposite is true. Except as otherwise described in this SAI, the Funds will limit their use of futures contracts and futures options to hedging transactions and in an attempt to increase total return, in accordance with Federal regulations. The costs of, and possible losses incurred from, futures contracts and options thereon may reduce the Fund’s current income and involve a loss of principal. Any incremental return earned by the Fund resulting from these transactions would be expected to offset anticipated losses or a portion thereof. The Funds will only enter into futures contracts and futures options which are standardized and traded on a U.S. or foreign exchange, board of trade, or similar entity, or quoted on an automated quotation system. When a purchase or sale of a futures contract is made by a Fund, the Fund is required to deposit with its custodian (or broker, if legally permitted) a specified amount of cash or U.S. Government securities (“initial margin”). The margin required for a futures contract is set by the exchange on which the contract is traded and may be modified during the term of the contract. The initial margin is in the nature of a performance bond or good faith deposit on the futures contract which is returned to the Fund upon termination of the contract, assuming all contractual obligations have been satisfied. The Funds expect to earn interest income on their initial margin deposits. A futures contract held by a Fund is valued daily at the official settlement price of the exchange on which it is traded. Each day the Fund pays or receives cash, called “variation margin,” equal to the daily change in value of the futures contract. This process is known as “marking to market.” Variation margin does not represent a borrowing or loan by the Fund but is instead a settlement between the Fund and the broker of the amount one would owe the other if the futures contract expired. In computing daily NAV, the Fund will mark to market its open futures positions. The Funds are also required to deposit and maintain margin with respect to put and call options on futures contracts written by them. Such margin deposits will vary depending on the nature of the underlying futures contract (and the related initial margin requirements), the current market value of the option, and other futures positions held by the relevant Fund. To the extent required to comply with SEC Release No. IC-10666, when entering into a futures contract or an option on a futures contract, a Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the prescribed amount. Generally, for cash-settled futures contracts the prescribed amount is the net amount of the Fund’s obligation, and for non-cash-settled futures contracts the prescribed about is the notional value of the reference obligation.

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Investment Technique			Description and Risks			Fund-Specific Limitations
			Futures contracts are designed by boards of trade which are designated “contracts markets” by the CFTC. Futures contracts trade on contracts markets in a manner that is similar to the way a stock trades on a stock exchange and the boards of trade, through their clearing corporations, guarantee performance of the contracts. A Fund’s ability to claim an exclusion or exemption from the definition of a commodity pool may be limited when the Fund invests in futures contracts. (See “Commodity Interests” in this SAI.) The requirements of the Code for qualification as a regulated investment company also may limit the extent to which a Fund may enter into futures, futures options or forward contracts. (See the “Dividends, Distributions and Taxes” section of this SAI.) Although some futures contracts call for making or taking delivery of the underlying securities, generally these obligations are closed out prior to delivery by offsetting purchases or sales of matching futures contracts (same exchange, underlying security or index, and delivery month). If an offsetting purchase price is less than the original sale price, the Fund realizes a capital gain, or if it is more, the Fund realizes a capital loss. Conversely, if an offsetting sales price is more than the original purchase price, the Fund realizes a capital gain, or if it is less, the Fund realizes a capital loss. The transaction costs must also be included in these calculations. Positions in futures contracts and related options may be closed out only on an exchange which provides a secondary market for such contracts or options. The Fund will enter into an option or futures position only if there appears to be a liquid secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular option or futures contract at any specific time. Thus, it may not be possible to close out a futures or related option position. In the case of a futures position, in the event of adverse price movements the Fund would continue to be required to make daily margin payments. In this situation, if the Fund has insufficient cash to meet daily margin requirements it may have to sell portfolio securities to meet its margin obligations at a time when it may be disadvantageous to do so. In addition, the Fund may be required to take or make delivery of the securities underlying the futures contracts it holds. The inability to close out futures positions also could have an adverse impact on the Fund’s ability to hedge its portfolio effectively. There are several risks in connection with the use of futures contracts as a hedging device. While hedging can provide protection against an adverse movement in market prices, it can also limit a hedger’s opportunity to benefit fully from a favorable market movement. In addition, investing in futures contracts and options on futures contracts will cause the Fund to incur additional brokerage commissions and may cause an increase in the Fund’s portfolio turnover rate. The successful use of futures contracts and related options may also depend on the ability of the relevant Fund’s subadviser to forecast correctly the direction and extent of market movements, interest rates and other market factors within a given time frame. To the extent market prices remain stable during the period a futures contract or option is held by a Fund or such prices move in a direction opposite to that anticipated, the Fund may realize a loss on the transaction which is not offset by an increase in the value of its portfolio securities. Options and futures may also fail as a hedging technique in cases where the movements of the securities underlying the options and futures do not follow the price movements of the hedged portfolio securities. As a result, the Fund’s total return for the period may be less than if it had not engaged in the hedging transaction. The loss from investing in futures transactions is potentially unlimited.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Utilization of futures contracts by a Fund involves the risk of imperfect correlation in movements in the price of futures contracts and movements in the price of the securities which are being hedged. If the price of the futures contract moves more or less than the price of the securities being hedged, the Fund will experience a gain or loss which will not be completely offset by movements in the price of the securities. It is possible that, where a Fund has sold futures contracts to hedge its portfolio against a decline in the market, the market may advance and the value of securities held in the Fund’s portfolio may decline. If this occurred, the Fund would lose money on the futures contract and would also experience a decline in value in its portfolio securities. Where futures are purchased to hedge against a possible increase in the prices of securities before the Fund is able to invest its cash (or cash equivalents) in securities (or options) in an orderly fashion, it is possible that the market may decline; if the Fund then determines not to invest in securities (or options) at that time because of concern as to possible further market decline or for other reasons, the Fund will realize a loss on the futures that would not be offset by a reduction in the price of the securities purchased. The market prices of futures contracts may be affected if participants in the futures market elect to close out their contracts through off-setting transactions rather than to meet margin deposit requirements. In such case, distortions in the normal relationship between the cash and futures markets could result. Price distortions could also result if investors in futures contracts opt to make or take delivery of the underlying securities rather than to engage in closing transactions because such action would reduce the liquidity of the futures market. In addition, from the point of view of speculators, because the deposit requirements in the futures markets are less onerous than margin requirements in the cash market, increased participation by speculators in the futures market could cause temporary price distortions. Due to the possibility of price distortions in the futures market and because of the imperfect correlation between movements in the prices of securities and movements in the prices of futures contracts, a correct forecast of market trends may still not result in a successful hedging transaction. Compared to the purchase or sale of futures contracts, the purchase of put or call options on futures contracts involves less potential risk for the Fund because the maximum amount at risk is the premium paid for the options plus transaction costs. However, there may be circumstances when the purchase of an option on a futures contract would result in a loss to the Fund while the purchase or sale of the futures contract would not have resulted in a loss, such as when there is no movement in the price of the underlying securities. For additional information about options transactions, see “Options” under “Derivative Investments” in this section of the SAI.
Mortgage-Related and Other Asset-Backed Securities	Each Fund may purchase mortgage-related and other asset-backed securities, which collectively are securities backed by mortgages, installment contracts, credit card receivables or other financial assets. Asset-backed securities represent interests in “pools” of assets in which payments of both interest and principal on the securities are made periodically, thus in effect “passing through” such payments made by the individual borrowers on the assets that underlie the securities, net of any fees paid to the issuer or guarantor of the securities. The average life of asset-backed securities varies with the maturities of the underlying instruments, and the average life of a mortgage-backed instrument, in particular, is likely to be less than the original maturity of the mortgage pools underlying the securities as a result of mortgage prepayments, where applicable. For this and other

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Investment Technique			Description and Risks			Fund-Specific Limitations
			reasons, an asset-backed security’s stated maturity may be different, and the security’s total return may be difficult to predict precisely. If an asset-backed security is purchased at a premium, a prepayment rate that is faster than expected will reduce yield to maturity, while a prepayment rate that is slower than expected will have the opposite effect of increasing yield to maturity. Conversely, if an asset-backed security is purchased at a discount, faster than expected prepayments will increase yield to maturity, while slower than expected prepayments will decrease yield to maturity. Prepayments of principal of mortgage-related securities by mortgagors or mortgage foreclosures affect the average life of the mortgage-related securities in the Fund’s portfolio. Mortgage prepayments are affected by the level of interest rates and other factors, including general economic conditions and the underlying location and age of the mortgage. In periods of rising interest rates, the prepayment rate tends to decrease, lengthening the average life of a pool of mortgage-related securities. The longer the remaining maturity of a security the greater the effect of interest rate changes will be. Changes in the ability of an issuer to make payments of interest and principal and in the market’s perception of its creditworthiness also affect the market value of that issuer’s debt securities. In periods of falling interest rates, the prepayment rate tends to increase, shortening the average life of a pool. Because prepayments of principal generally occur when interest rates are declining, it is likely that the Fund, to the extent that it retains the same percentage of debt securities, may have to reinvest the proceeds of prepayments at lower interest rates than those of its previous investments. If this occurs, that Fund’s yield will correspondingly decline. Thus, mortgage-related securities may have less potential for capital appreciation in periods of falling interest rates than other fixed income securities of comparable duration, although they may have a comparable risk of decline in market value in periods of rising interest rates. To the extent that the Fund purchases mortgage-related securities at a premium, unscheduled prepayments, which are made at par, result in a loss equal to any unamortized premium. Duration is one of the fundamental tools used by a Fund’s subadviser in managing interest rate risks including prepayment risks. Traditionally, a debt security’s “term to maturity” characterizes a security’s sensitivity to changes in interest rates. “Term to maturity,” however, measures only the time until a debt security provides its final payment, taking no account of prematurity payments. Most debt securities provide interest (“coupon”) payments in addition to a final (“par”) payment at maturity, and some securities have call provisions allowing the issuer to repay the instrument in full before maturity date, each of which affect the security’s response to interest rate changes. “Duration” therefore is generally considered a more precise measure of interest rate risk than “term to maturity.” Determining duration may involve a subadviser’s estimates of future economic parameters, which may vary from actual future values. Generally fixed income securities with longer effective durations are more responsive to interest rate fluctuations than those with shorter effective durations. For example, if interest rates rise by 1%, the value of securities having an effective duration of three years will generally decrease by approximately 3%. Descriptions of some of the different types of mortgage-related and other asset-backed securities most commonly acquired by the Funds are provided below. In addition to those shown, other types of mortgage-related and asset-backed investments are, or may become, available for investment by the Funds.

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Investment Technique	Description and Risks	Fund-Specific Limitations
Collateralized Mortgage Obligations (“CMOs”)	CMOs are hybrid instruments with characteristics of both mortgage-backed and mortgage pass-through securities. Interest and prepaid principal on a CMO are paid, in most cases, monthly. CMOs may be collateralized by whole mortgage loans but are more typically collateralized by portfolios of mortgage pass-through securities guaranteed by entities such as GNMA, FHLMC, or FNMA, and their income streams. CMOs are typically structured in multiple classes, each bearing a different stated maturity. Actual maturity and average life will depend upon the prepayment experience of the collateral. CMOs provide for a modified form of call protection through a de facto breakdown of the underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of principal received from the pool of underlying mortgages, including prepayments, is first returned to investors holding the shortest maturity class. Investors holding the longer maturity classes typically receive principal only after the first class has been retired. An investor may be partially guarded against a sooner than desired return of principal because of the sequential payments. FHLMC CMOs are debt obligations of FHLMC issued in multiple classes having different maturity dates and are secured by the pledge of a pool of conventional mortgage loans purchased by FHLMC. The amount of principal payable on each monthly payment date is determined in accordance with FHLMC’s mandatory sinking fund schedule. Sinking fund payments in the CMOs are allocated to the retirement of the individual classes of bonds in the order of their stated maturities. Payments of principal on the mortgage loans in the collateral pool in excess of the amount of FHLMC’s minimum sinking fund obligation for any payment date are paid to the holders of the CMOs as additional sinking-fund payments. Because of the “pass-through” nature of all principal payments received on the collateral pool in excess of FHLMC’s minimum sinking fund requirement, the rate at which principal of the CMOs is actually repaid is likely to be such that each class of bonds will be retired in advance of its scheduled maturity date. If collection of principal (including prepayments) on the mortgage loans during any semiannual payment period is not sufficient to meet FHLMC’s minimum sinking fund obligation on the next sinking fund payment date, FHLMC agrees to make up the deficiency from its general funds.
CMO Residuals	CMO residuals are derivative mortgage securities issued by agencies or instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans. As described above, the cash flow generated by the mortgage assets underlying a series of CMOs is applied first to make required payments of principal and interest on the CMOs and second to pay the related administrative expenses of the issuer. The “residual” in a CMO structure generally represents the interest in any excess cash flow remaining after making the foregoing payments. Each payment of such excess cash flow to a holder of the related CMO residual represents income and/or a return of capital. The amount of residual cash flow resulting from a CMO will depend on, among other things, the characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates, the amount of administrative expenses and, in particular, the prepayment experience on the mortgage assets. In addition, if a series of a CMO includes a class that bears interest at an adjustable rate, the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the level of the index upon which interest rate adjustments are based. In certain circumstances a Fund may fail to recoup fully its initial investment in a CMO residual.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	CMO residuals are generally purchased and sold by institutional investors through several investment banking firms acting as brokers or dealers. The CMO residual market currently may not have the liquidity of other more established securities trading in other markets. CMO residuals may be subject to certain restrictions on transferability, may be deemed illiquid and therefore subject to the Funds’ limitations on investment in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Mortgage Pass-through Securities	Mortgage pass-through securities are interests in pools of mortgage loans, assembled and issued by various governmental, government-related, and private organizations. Unlike other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates, these securities provide a monthly payment consisting of both interest and principal payments. In effect, these payments are a “pass-through” of the monthly payments made by the individual borrowers on their residential or commercial mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Additional payments are caused by repayments of principal resulting from the sale of the underlying property, refinancing or foreclosure, net of fees or costs. “Modified pass-through” securities (such as securities issued by GNMA) entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of certain fees, at the scheduled payment dates regardless of whether or not the mortgagor actually makes the payment. The principal governmental guarantor of U.S. mortgage-related securities is GNMA. GNMA is authorized to guarantee, with the full faith and credit of the United States Government, the timely payment of principal and interest on securities issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of Federal Housing Administration insured or Veterans Administration guaranteed mortgages. Government-related guarantors whose obligations are not backed by the full faith and credit of the United States Government include FNMA and FHLMC. FNMA purchases conventional (i.e., not insured or guaranteed by any government agency) residential mortgages from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. FHLMC issues Participation Certificates that represent interests in conventional mortgages from FHLMC’s national portfolio. FNMA and FHLMC guarantee the timely payment of interest and ultimate collection of principal on securities they issue, but the securities they issue are neither issued nor guaranteed by the United States Government. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Pools created by such non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government or agency guarantees of payments for such securities. However, timely payment of interest and principal of these pools may be supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. Such insurance and guarantees and the creditworthiness of the

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Investment Technique			Description and Risks			Fund-Specific Limitations
			issuers thereof will be considered in determining whether a mortgage-related security meets a Fund’s investment quality standards. There can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. A Fund may buy mortgage-related securities without insurance or guarantees if, through an examination of the loan experience and practices of the originator/servicers and poolers, the Fund’s subadviser determines that the securities meet the Fund’s quality standards. Securities issued by certain private organizations may not be readily marketable and may therefore be subject to the Funds’ limitations on investments in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.) Mortgage-backed securities that are issued or guaranteed by the U.S. Government, its agencies or instrumentalities, are not subject to the Funds’ industry concentration restrictions set forth in the “Investment Restrictions” section of this SAI by virtue of the exclusion from the test available to all U.S. Government securities. The assets underlying such securities may be represented by a portfolio of first lien residential mortgages (including both whole mortgage loans and mortgage participation interests) or portfolios of mortgage pass-through securities issued or guaranteed by GNMA, FNMA or FHLMC. Mortgage loans underlying a mortgage-related security may in turn be insured or guaranteed by the Federal Housing Administration or the Department of Veterans Affairs. The Funds will consider the assets underlying privately-issued, mortgage-related securities, and other asset-backed securities, when determining the industry of such securities for purposes of the Funds’ industry concentration restrictions set forth in the ‘Investment Restrictions’ section of this SAI, and as a result such securities may not be deemed by the Funds to represent the same industry or group of industries. In the case of private issue mortgage-related securities whose underlying assets are neither U.S. Government securities nor U.S. Government-insured mortgages, to the extent that real properties securing such assets may be located in the same geographical region, the security may be subject to a greater risk of default than other comparable securities in the event of adverse economic, political or business developments that may affect such region and, ultimately, the ability of residential homeowners to make payments of principal and interest on the underlying mortgages. It is possible that the availability and the marketability (that is, liquidity) of the securities discussed in this section could be adversely affected by the actions of the U.S. Government to tighten the availability of its credit. On September 7, 2008, the FHFA, an agency of the U.S. Government, placed FNMA and FHLMC into conservatorship, a statutory process with the objective of returning the entities to normal business operations. FHFA will act as the conservator to operate FNMA and FHLMC until they are stabilized. The conservatorship is still in effect as of the date of this SAI and has no specified termination date. There can be no assurance as to when or how the conservatorship will be terminated or whether FNMA or FHLMC will continue to exist following the conservatorship or what their respective business structures will be during or following the conservatorship. FHFA, as conservator, has the power to repudiate any contract entered into by FNMA or FHLMC prior to its appointment if it determines that performance of the contract is burdensome and repudiation of the contract promotes the orderly administration of FNMA’s or FHLMC’s affairs. Furthermore, FHFA has the right to transfer or sell any asset or liability of FNMA or FHLMC without any approval, assignment or consent. If FHFA were to transfer any such guarantee obligation to another party, holders of FNMA or FHLMC mortgage-backed securities would have to rely on that party for

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Investment Technique	Description and Risks	Fund-Specific Limitations
	satisfaction of the guarantee obligation and would be exposed to the credit risk of that party.
Other Asset-Backed Securities	Through trusts and other special purpose entities, various types of securities based on financial assets other than mortgage loans are increasingly available, in both pass-through structures similar to mortgage pass-through securities described above and in other structures more like CMOs. As with mortgage-related securities, these asset-backed securities are often backed by a pool of financial assets representing the obligations of a number of different parties. They often include credit-enhancement features similar to mortgage-related securities. Financial assets on which these securities are based include automobile receivables; credit card receivables; loans to finance boats, recreational vehicles, and mobile homes; computer, copier, railcar, and medical equipment leases; and trade, healthcare, and franchise receivables. In general, the obligations supporting these asset-backed securities are of shorter maturities than mortgage loans and are less likely to experience substantial prepayments. However, obligations such as credit card receivables are generally unsecured and the obligors are often entitled to protection under a number of consumer credit laws granting, among other things, rights to set off certain amounts owed on the credit cards, thus reducing the balance due. Other obligations that are secured, such as automobile receivables, may present issuers with difficulties in perfecting and executing on the security interests, particularly where the issuer allows the servicers of the receivables to retain possession of the underlying obligations, thus increasing the risk that recoveries on defaulted obligations may not be adequate to support payments on the securities.
Stripped Mortgage-backed Securities (“SMBS”)	SMBS are derivative multi-class mortgage securities. They may be issued by agencies or instrumentalities of the U.S. Government, or by private originators of, or investors in, mortgage loans. SMBS are usually structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. A common type of SMBS will have one class receiving some of the interest and most of the principal from the mortgage assets, while the other class will receive most of the interest and the remainder of the principal. In the most extreme case, one class will receive all of the interest (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). The yield to maturity on an IO class security is extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets, and a rapid rate of principal payments may have a material adverse effect on a Fund’s yield to maturity from these securities. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Fund may fail to recoup fully its initial investment in these securities even if the security is in one of the highest rating categories. The market value of the PO class generally is unusually volatile in response to changes in interest rates. Although SMBS are purchased and sold by institutional investors through several investment banking firms acting as brokers or dealers, these securities were only recently developed. As a result, established trading markets have not yet developed and, accordingly, these securities may be deemed illiquid and therefore subject to the Funds’ limitations on investment in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.) Each Fund may invest in other mortgage-related securities with features similar to those described above, to the extent consistent with the relevant Fund’s investment objectives and policies.

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Investment Technique			Description and Risks			Fund-Specific Limitations
Options			Each Fund may purchase or sell put and call options on securities, indices and other financial instruments. Options may relate to particular securities, foreign and domestic securities indices, financial instruments, volatility, credit default, foreign currencies or the yield differential between two securities. Such options may or may not be listed on a domestic or foreign securities exchange and may or may not be issued by the OCC. A call option for a particular security gives the purchaser of the option the right to buy, and a writer the obligation to sell, the underlying security at the stated exercise price before the expiration of the option, regardless of the market price of the security. A premium is paid to the writer by the purchaser in consideration for undertaking the obligation under the option contract. A put option for a particular security gives the purchaser the right to sell and a writer the obligation to buy the security at the stated exercise price before the expiration date of the option, regardless of the market price of the security. To the extent required to comply with SEC Release No. IC-10666, options written by a Fund will be covered and will remain covered as long as the Fund is obligated as a writer. A call option is “covered” if the Fund owns the underlying security or its equivalent covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration if such cash is segregated) upon conversion or exchange of other securities held in its portfolio. A call option is also covered if the Fund holds on a share-for-share or equal principal amount basis a call on the same security as the call written where the exercise price of the call held is equal to or less than the exercise price of the call written or greater than the exercise price of the call written if appropriate liquid assets representing the difference are segregated by the Fund. A put option is “covered” if the Fund maintains appropriate liquid securities with a value equal to the exercise price, or owns on a share-for-share or equal principal amount basis a put on the same security as the put written where the exercise price of the put held is equal to or greater than the exercise price of the put written. A Fund’s obligation to sell an instrument subject to a covered call option written by it, or to purchase an instrument subject to a secured put option written by it, may be terminated before the expiration of the option by the Fund’s execution of a closing purchase transaction. This means that a Fund buys an option of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. Such a purchase does not result in the ownership of an option. A closing purchase transaction will ordinarily be effected to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The cost of such a closing purchase plus related transaction costs may be greater than the premium received upon the original option, in which event the Fund will experience a loss. There is no assurance that a liquid secondary market will exist for any particular option. A Fund that has written an option and is unable to effect a closing purchase transaction will not be able to sell the underlying instrument (in the case of a covered call option) or liquidate the segregated assets (in the case of a secured put option) until the option expires or the optioned instrument is delivered upon exercise. The Fund will be subject to the risk of market decline or appreciation in the instrument during such period. To the extent required to comply with SEC Release No. IC-10666, when entering into an option transaction, a Fund will specifically designate on its accounting records any asset, including equity

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Investment Technique			Description and Risks			Fund-Specific Limitations
			securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the prescribed amount. For options transactions, the prescribed amount will generally be the market value of the underlying instrument but will not be less than the exercise price. Options purchased are recorded as an asset and written options are recorded as liabilities to the extent of premiums paid or received. The amount of this asset or liability will be subsequently marked-to-market to reflect the current value of the option purchased or written. The current value of the traded option is the last sale price or, in the absence of a sale, the current bid price. If an option purchased by a Fund expires unexercised, the Fund will realize a loss equal to the premium paid. If a Fund enters into a closing sale transaction on an option purchased by it, the Fund will realize a gain if the premium received by the Fund on the closing transaction is more than the premium paid to purchase the option, or a loss if it is less. If an option written by a Fund expires on the stipulated expiration date or if a Fund enters into a closing purchase transaction, it will realize a gain (or loss if the cost of a closing purchase transaction exceeds the net premium received when the option is sold), and the liability related to such option will be eliminated. If an option written by a Fund is exercised, the proceeds of the sale will be increased by the net premium originally received and the Fund will realize a gain or loss. Options trading is a highly specialized activity that entails more complex and potentially greater than ordinary investment risk. Options may be more volatile than the underlying instruments and, therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves. There are several other risks associated with options. For example, there are significant differences among the securities, currency, volatility, credit default and options markets that could result in an imperfect correlation among these markets, causing a given transaction not to achieve its objectives. In addition, a liquid secondary market for particular options, whether traded over-the-counter or on an exchange, may be absent for reasons that include the following: there may be insufficient trading interest in certain options; restrictions may be imposed by an exchange on opening transactions or closing transactions or both; trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities or currencies; unusual or unforeseen circumstances may interrupt normal operations on an exchange; the facilities of an exchange or the OCC may not at all times be adequate to handle current trading value; or one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options that had been issued by the OCC as a result of trades on that exchange would continue to be exercisable in accordance with their terms. The staff of the SEC currently takes the position that options not traded on registered domestic securities exchanges and the assets used to cover the amount of the Fund’s obligation pursuant to such options are illiquid, and are therefore subject to each Fund’s limitation on investments in illiquid securities. However, for options written with “primary dealers” in U.S. Government securities pursuant to an agreement requiring a closing transaction at the formula price, the amount considered to be illiquid may be calculated by reference to a formula price. (See “Illiquid and Restricted Securities” in this section of the SAI.)

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Investment Technique	Description and Risks	Fund-Specific Limitations
Options on Indexes and “Yield Curve” Options	Each Fund may enter into options on indexes or options on the “spread,” or yield differential, between two fixed income securities, in transactions referred to as “yield curve” options. Options on indexes and yield curve options provide the holder with the right to make or receive a cash settlement upon exercise of the option. With respect to options on indexes, the amount of the settlement will equal the difference between the closing price of the index at the time of exercise and the exercise price of the option expressed in dollars, times a specified multiple. With respect to yield curve options, the amount of the settlement will equal the difference between the yields of designated securities. With respect to yield curve options, a call or put option is covered if a Fund holds another call or put, respectively, on the spread between the same two securities and maintains in a segregated account liquid assets sufficient to cover the Fund’s net liability under the two options. Therefore, the Fund’s liability for such a covered option is generally limited to the difference between the amount of the Fund’s liability under the option it wrote less the value of the option it holds. A Fund may also cover yield curve options in such other manner as may be in accordance with the requirements of the counterparty with which the option is traded and applicable laws and regulations. The trading of these types of options is subject to all of the risks associated with the trading of other types of options. In addition, however, yield curve options present risk of loss even if the yield of one of the underlying securities remains constant, if the spread moves in a direction or to an extent which was not anticipated.
Reset Options	In certain instances, a Fund may purchase or write options on U.S. Treasury securities, which provide for periodic adjustment of the strike price and may also provide for the periodic adjustment of the premium during the term of each such option. Like other types of options, these transactions, which may be referred to as “reset” options or “adjustable strike” options grant the purchaser the right to purchase (in the case of a call) or sell (in the case of a put), a specified type of U.S. Treasury security at any time up to a stated expiration date (or, in certain instances, on such date). In contrast to other types of options, however, the price at which the underlying security may be purchased or sold under a “reset” option is determined at various intervals during the term of the option, and such price fluctuates from interval to interval based on changes in the market value of the underlying security. As a result, the strike price of a “reset” option, at the time of exercise, may be less advantageous than if the strike price had been fixed at the initiation of the option. In addition, the premium paid for the purchase of the option may be determined at the termination, rather than the initiation, of the option. If the premium for a reset option written by a Fund is paid at termination, the Fund assumes the risk that (i) the premium may be less than the premium which would otherwise have been received at the initiation of the option because of such factors as the volatility in yield of the underlying Treasury security over the term of the option and adjustments made to the strike price of the option, and (ii) the option purchaser may default on its obligation to pay the premium at the termination of the option. Conversely, where a Fund purchases a reset option, it could be required to pay a higher premium than would have been the case at the initiation of the option.
Swaptions	A Fund may enter into swaption contracts, which give the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date. Over-the-counter swaptions, although providing greater flexibility, may involve greater credit risk than exchange-traded options as they are not backed by the clearing organization of the exchanges where they are traded, and as

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Investment Technique	Description and Risks	Fund-Specific Limitations
	such, there is a risk that the seller will not settle as agreed. A Fund’s financial liability associated with swaptions is linked to the marked-to-market value of the notional underlying investments. Purchased swaption contracts are exposed to a maximum loss equal to the price paid for the option/swaption (the premium) and no further liability. Written swaptions, however, give the right of potential exercise to a third party, and the maximum loss to the Fund in the case of an uncovered swaption is unlimited.
Swap Agreements	Each Fund may enter into swap agreements on, among other things, interest rates, indices, securities and currency exchange rates. A Fund’s subadviser may use swaps in an attempt to obtain for the Fund a particular desired return at a lower cost to the Fund than if the Fund had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index. The “notional amount” of the swap agreement is only a fictive basis on which to calculate the obligations the parties to a swap agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will generally be equal only to the amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the “net amount”). A Fund’s obligations under a swap agreement will be accrued daily on the Fund’s accounting records (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by specifically designating on the accounting records of the Fund liquid assets to avoid leveraging of the Fund’s portfolio. Because swap agreements are two-party contracts and may have terms of greater than seven days, they may be considered to be illiquid and therefore subject to the Funds’ limitations on investment in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.) Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. A Fund’s subadviser will cause the Fund to enter into swap agreements only with counterparties that would be eligible for consideration as repurchase agreement counterparties under the Funds’ repurchase agreement guidelines. (See “Repurchase Agreements” in this section of the SAI.) Certain restrictions imposed on the Funds by the Code may limit the Funds’ ability to use swap agreements. (See the “Dividends, Distributions and Taxes” section of this SAI.) The swaps market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect a Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements. Certain swap agreements are exempt from most provisions of the CEA and, therefore, are not regulated as futures or commodity option transactions under the CEA, pursuant to regulations of the CFTC. To qualify for this exemption, a swap agreement must be entered into by eligible participants and must meet certain conditions (each pursuant to the CEA and regulations of the CFTC). However, recent CFTC rule amendments dictate that certain swap agreements be considered

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Investment Technique	Description and Risks	Fund-Specific Limitations
	commodity interests for purposes of the CEA. (See “Commodity Interests” in this section of the SAI for additional information regarding the implications of investments being considered commodity interests under the CEA.) Recently, the SEC and the CFTC have developed rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act to create a new, comprehensive regulatory framework for swap transactions. Under the new regulations, certain swap transactions will be required to be executed on a regulated trading platform and cleared through a derivatives clearing organization. Additionally, the new regulations impose other requirements on the parties entering into swap transactions, including requirements relating to posting margin, and reporting and documenting swap transactions. A Fund engaging in swap transactions may incur additional expenses as a result of these new regulatory requirements. The Adviser is continuing to monitor the implementation of the new regulations and to assess their impact on the Funds.
Credit Default Swap Agreements	Each Fund may enter into credit default swap agreements. A credit default swap is a bilateral financial contract in which one party (the protection buyer) pays a periodic fee in return for a contingent payment by the protection seller following a credit event of a reference issuer. The protection buyer must either sell particular obligations issued by the reference issuer for its par value (or some other designated reference or strike price) when a credit event occurs or receive a cash settlement based on the difference between the market price and such reference price. A credit event is commonly defined as bankruptcy, insolvency, receivership, material adverse restructuring of debt, or failure to meet payment obligations when due. A Fund may be either the buyer or seller in the transaction. If a Fund is a buyer and no event of default occurs, the Fund loses its investment and recovers nothing; however, if an event of default occurs, the Fund receives full notional value for a reference obligation that may have little or no value. As a seller, a Fund receives a periodic fee throughout the term of the contract, provided there is no default event; if an event of default occurs, the Fund must pay the buyer the full notional value of the reference obligation. The value of the reference obligation received by the Fund as a seller, coupled with the periodic payments previously received, may be less than the full notional value the Fund pays to the buyer, resulting in a loss of value to the Fund. As with other swaps, when a Fund enters into a credit default swap agreement, to the extent required by applicable law and regulation the Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily, equal to the Fund’s net exposure under the swap (the “Segregated Assets”). Generally, the minimum cover amount for a swap agreement is the amount owed by the Fund, if any, on a daily mark-to-market basis. With respect to swap contracts that provide for the netting of payments, the net amount of the excess, if any, of the Fund’s obligations over its entitlements with respect to each swap contract will be accrued on a daily basis and an amount of Segregated Assets having an aggregate market value at least equal to the accrued excess will be maintained to cover the transactions in accordance with SEC positions. With respect to swap contracts that do not provide for the netting of payments by the counterparties, the full notional amount for which the Fund is obligated under the swap contract with respect to each swap contract will be accrued on a daily basis and an amount of Segregated Assets having an aggregate market value at least equal to the accrued full notional value will be maintained to cover the transactions in accordance with SEC positions. When the Fund sells protection on an individual credit default swap, upon a credit event, the

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	Fund may be obligated to pay the cash equivalent value of the asset. Therefore, the cover amount will be the notional value of the underlying credit. With regard to selling protection on an index (CDX), as a practical matter, the Fund would not be required to pay the full notional amount of the index; therefore, only the amount owed by the Fund, if any, on a daily mark-to-market basis is required as cover. Credit default swaps involve greater risks than if the Fund had invested in the reference obligation directly. In addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risks. A Fund will enter into swap agreements only with counterparties deemed creditworthy by the Fund’s subadviser.
Dividend Swap Agreements	A dividend swap agreement is a financial instrument where two parties contract to exchange a set of future cash flows at set dates in the future. One party agrees to pay the other the future dividend flow on a stock or basket of stocks in an index, in return for which the other party gives the first call options. Dividend swaps generally are traded over the counter rather than on an exchange.
Inflation Swap Agreements	Inflation swap agreements are contracts in which one party agrees to pay the cumulative percentage increase in a price index (e.g., the Consumer Price Index with respect to CPI swaps) over the term of the swap (with some lag on the inflation index), while the other pays a compounded fixed rate. Inflation swap agreements may be used by a Fund to hedge the inflation risk associated with non-inflation indexed investments, thereby creating “synthetic” inflation-indexed investments. One factor that may lead to changes in the values of inflation swap agreements is a change in real interest rates, which are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, which may lead to a decrease in value of an inflation swap agreement.
Total Return Swap Agreements	“Total return swap” is the generic name for any non-traditional swap where one party agrees to pay the other the “total return” of a defined underlying asset, usually in return for receiving a stream of cash flows based upon an agreed rate. A total return swap may be applied to any underlying asset but is most commonly used with equity indices, single stocks, bonds and defined portfolios of loans and mortgages. A total return swap is a mechanism for the user to accept the economic benefits of asset ownership without utilizing the balance sheet. The other leg of the swap, which is often LIBOR, is spread to reflect the non-balance sheet nature of the product. Total return swaps can be designed with any underlying asset agreed between the two parties. No notional amounts are exchanged with total return swaps.
Variance and Correlation Swap Agreements	Variance swap agreements are contracts in which two parties agree to exchange cash payments based on the difference between the stated level of variance and the actual variance realized on an underlying asset or index. “Actual variance” as used here is defined as the sum of the square of the returns on the reference asset or index (which in effect is a measure of its “volatility”) over the length of the contract term. In other words, the parties to a variance swap can be said to exchange actual volatility for a contractually stated rate of volatility. Correlation swap agreements are contracts in which two parties agree to exchange cash payments based on the differences between the stated and the actual correlation realized on the underlying equity securities within a given equity index. “Correlation” as used here is defined as the weighted average of the correlations between the daily returns of each pair of securities within a given equity index. If two assets are said to be closely correlated, it means that their daily returns vary in similar proportions or along similar trajectories. A Fund

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	may enter into variance or correlation swaps in an attempt to hedge equity market risk or adjust exposure to the equity markets.
Equity Securities	The Funds may invest in equity securities. Equity securities include common stocks, preferred stocks and preference stocks; securities such as bonds, warrants or rights that are convertible into stocks; and depositary receipts for those securities. Common stockholders are the owners of the company issuing the stock and, accordingly, usually have the right to vote on various corporate governance matters such as mergers. They are not creditors of the company, but rather, in the event of liquidation of the company, would be entitled to their pro rata shares of the company’s assets after creditors (including fixed income security holders) and, if applicable, preferred stockholders are paid. Preferred stock is a class of stock having a preference over common stock as to dividends or upon liquidation. A preferred stockholder is a shareholder in the company and not a creditor of the company as is a holder of the company’s fixed income securities. Dividends paid to common and preferred stockholders are distributions of the earnings or other surplus of the company and not interest payments, which are expenses of the company. Equity securities owned by the Fund may be traded in the over-the-counter market or on a securities exchange and may not be traded every day or in the volume typical of securities traded on a major U.S. national securities exchange. As a result, disposition by the Fund of a portfolio security to meet redemptions by shareholders or otherwise may require the Fund to sell the security at less than the reported value of the security, to sell during periods when disposition is not desirable, or to make many small sales over a lengthy period of time. The market value of all securities, including equity securities, is based upon the market’s perception of value and not necessarily the book value of an issuer or other objective measure of a company’s worth. Stock values may fluctuate in response to the activities of an individual company or in response to general market and/or economic conditions. Historically, common stocks have provided greater long-term returns and have entailed greater short-term risks than other types of securities. Smaller or newer issuers may be more likely to realize more substantial growth or suffer more significant losses. Investments in these companies can be both more volatile and more speculative. Fluctuations in the value of equity securities in which a Fund invests will cause the NAV of the Fund to fluctuate.
Initial Public Offerings	A Fund may invest in a company’s securities at the time of a company’s initial public offering (“IPO”). Companies involved in IPOs are often smaller and have a limited operating history, which involves a greater risk that the value of their securities will be impaired following the IPO. In addition, market psychology prevailing at the time of an IPO can have a substantial and unpredictable effect on the price of an IPO security, causing the price of a company’s securities to be particularly volatile at the time of its IPO and for a period thereafter. As a result, a Fund’s Adviser or subadviser might decide to sell an IPO security more quickly than it would otherwise, which may result in significant gains or losses to the Fund.
Securities of Small and Mid Capitalization Companies	While small and medium-sized issuers in which a Fund invests may offer greater opportunities for capital appreciation than larger market capitalization issuers, investments in such companies may involve greater risks and thus may be considered speculative. For example, smaller companies may have limited product lines, markets or financial resources, or they may be dependent on a limited management group. In addition, many small and mid-capitalization company stocks trade less frequently and in smaller volume, and may be subject to more abrupt or erratic price movements, than stocks of

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	larger companies. The securities of small and mid-capitalization companies may also be more sensitive to market changes than the securities of larger companies. When a Fund invests in small or mid-capitalization companies, these factors may result in above-average fluctuations in the NAV of the Fund’s shares. Therefore, a Fund investing in such securities should be considered as a long-term investment and not as a vehicle for seeking short-term profits. Similarly, an investment in a Fund solely investing in such securities should not be considered a complete investment program. Market capitalizations of companies in which the Funds invest are determined at the time of purchase.
Unseasoned Companies	As a matter of operating policy, each Fund may invest to a limited extent in securities of unseasoned companies and new issues. The Adviser regards a company as unseasoned when, for example, it is relatively new to, or not yet well established in, its primary line of business. Such companies generally are smaller and younger than companies whose shares are traded on the major stock exchanges. Accordingly, their shares are often traded over-the-counter and their share prices may be more volatile than those of larger, exchange-listed companies. Generally a Fund will not invest more than 5% of its total assets in securities of any one company with a record of fewer than three years’ continuous operation (including that of predecessors).
Foreign Investing	The Funds may invest in a broad range of securities of foreign issuers, including equity, debt and convertible securities and foreign government securities. The Funds may purchase the securities of issuers from various countries, including countries commonly referred to as “emerging markets.” The Funds may also invest in domestic securities denominated in foreign currencies. Investing in the securities of foreign companies involves special risks and considerations not typically associated with investing in U.S. companies. These include differences in accounting, auditing and financial reporting standards, generally higher commission rates on foreign portfolio transactions, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investments in foreign countries, and potential restrictions on the flow of international capital. Foreign issuers may become subject to sanctions imposed by the United States or another country, which could result in the immediate freeze of the foreign issuers’ assets or securities. The imposition of such sanctions could impair the market value of the securities of such foreign issuers and limit a Fund’s ability to buy, sell, receive or deliver the securities. Additionally, dividends payable on foreign securities may be subject to foreign taxes withheld prior to distribution. Foreign securities often trade with less frequency and volume than domestic securities and therefore may exhibit greater price volatility. Changes in foreign exchange rates will affect the value of those securities which are denominated or quoted in currencies other than the U.S. dollar. Many of the foreign securities held by a Fund will not be registered with, nor will the issuers thereof be subject to the reporting requirements of, the SEC. Accordingly, there may be less publicly available information about the securities and about the foreign company or government issuing them than is available about a domestic company or government entity. Moreover, individual foreign economies may differ favorably or unfavorably from the United States economy in such respects as growth of Gross National Product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions. Finally, the Funds may encounter difficulty in obtaining and enforcing judgments against issuers of foreign securities.

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	Securities of U.S. issuers denominated in foreign currencies may be less liquid and their prices more volatile than securities issued by domestic issuers and denominated in U.S. dollars. In addition, investing in securities denominated in foreign currencies often entails costs not associated with investment in U.S. dollar-denominated securities of U.S. issuers, such as the cost of converting foreign currency to U.S. dollars, higher brokerage commissions, custodial expenses and other fees. Non-U.S. dollar denominated securities may be subject to certain withholding and other taxes of the relevant jurisdiction, which may reduce the yield on the securities to the Funds and which may not be recoverable by the Funds or their investors. The Trust may use an eligible foreign custodian in connection with its purchases of foreign securities and may maintain cash and cash equivalents in the care of a foreign custodian. The amount of cash or cash equivalents maintained in the care of eligible foreign custodians will be limited to an amount reasonably necessary to effect the Trust’s foreign securities transactions. The use of a foreign custodian invokes considerations which are not ordinarily associated with domestic custodians. These considerations include the possibility of expropriations, restricted access to books and records of the foreign custodian, inability to recover assets that are lost while under the control of the foreign custodian, and the impact of political, social or diplomatic developments. Settlement procedures relating to the Funds’ investments in foreign securities and to the Funds’ foreign currency exchange transactions may be more complex than settlements with respect to investments in debt or equity securities of U.S. issuers, and may involve certain risks not present in the Funds’ domestic investments. For example, settlement of transactions involving foreign securities or foreign currency may occur within a foreign country, and a Fund may be required to accept or make delivery of the underlying securities or currency in conformity with any applicable U.S. or foreign restrictions or regulations, and may be required to pay any fees, taxes or charges associated with such delivery. Such investments may also involve the risk that an entity involved in the settlement may not meet its obligations. Settlement procedures in many foreign countries are less established than those in the United States, and some foreign country settlement periods can be significantly longer than those in the United States.
Depositary Receipts	Each Fund permitted to hold foreign securities may also hold ADRs, ADSs, GDRs and EDRs. ADRs and ADSs typically are issued by an American bank or trust company and evidence ownership of underlying securities issued by a foreign corporation. EDRs, which are sometimes referred to as CDRs, are issued in Europe typically by foreign banks and trust companies and evidence ownership of either foreign or domestic securities. GDRs are similar to EDRs and are designed for use in several international financial markets. Generally, ADRs and ADSs in registered form are designed for use in United States securities markets and EDRs in bearer form are designed for use in European securities markets. For purposes of a Fund’s investment policies, its investments in ADRs, ADSs, GDRs and EDRs will be deemed to be investments in the underlying foreign securities. Depositary Receipts may be issued pursuant to sponsored or unsponsored programs. In sponsored programs, an issuer has made arrangements to have its securities traded in the form of Depositary Receipts. In unsponsored programs, the issuer may not be directly involved in the creation of the program. Although regulatory requirements with respect to sponsored and unsponsored programs are generally similar, in some cases it may be easier to obtain financial information from an issuer that has participated in the creation of a

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Investment Technique	Description and Risks	Fund-Specific Limitations
	sponsored program. Accordingly, there may be less information available regarding issuers of securities underlying unsponsored programs and there may not be a correlation between such information and the market value of the Depositary Receipts. For purposes of the Fund’s investment policies, investments in Depositary Receipts will be deemed to be investments in the underlying securities. Thus, a Depositary Receipt representing ownership of common stock will be treated as common stock. Depositary Receipts are generally subject to the same sort of risks as direct investments in a foreign country, such as currency risk, political and economic risk, and market risk, because their values generally depend on the performance of a foreign security denominated in its home currency. (The risks of foreign investing are addressed above in this section of the SAI under the heading “Foreign Investing.”) In addition to risks associated with the underlying portfolio of securities, receipt holders also must consider credit standings of the custodians and broker/dealer sponsors. The receipts are not registered with the SEC and qualify as Rule 144A securities which may make them more difficult and costly to sell. (For information about Rule 144A securities, see “Illiquid and Restricted Securities” in this section of the SAI.)
Emerging Market Securities	The Funds may invest in countries or regions with relatively low gross national product per capita compared to the world’s major economies, and in countries or regions with the potential for rapid economic growth (emerging markets). Emerging markets will include any country: (i) having an “emerging stock market” as defined by the International Finance Corporation; (ii) with low-to-middle-income economies according to the World Bank; (iii) listed in World Bank publications as developing; or (iv) determined by the adviser to be an emerging market as defined above. Certain emerging market countries are either comparatively underdeveloped or are in the process of becoming developed and may consequently be economically dependent on a relatively few or closely interdependent industries. A high proportion of the securities of many emerging market issuers may also be held by a limited number of large investors trading significant blocks of securities. While a Fund’s subadviser will strive to be sensitive to publicized reversals of economic conditions, political unrest and adverse changes in trading status, unanticipated political and social developments may affect the values of the Fund’s investments in such countries and the availability of additional investments in such countries. The risks of investing in foreign securities may be intensified in the case of investments in emerging markets. Securities of many issuers in emerging markets may be less liquid and more volatile than securities of comparable domestic issuers. Emerging markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion of the assets of a Fund is uninvested and no return is earned thereon. The inability of a Fund to make intended security purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result either in losses to the Fund due to subsequent declines in value of portfolio securities or, if a Fund has entered into a contract to sell the security, in possible liability to the purchaser. Securities prices in emerging markets can be significantly more volatile than in the more developed nations of the world, reflecting the greater uncertainties of investing in less established markets and economies. In particular, countries with emerging markets may have relatively unstable governments, present the risk of nationalization of businesses,

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	restrictions on foreign ownership, or prohibitions of repatriation of assets, and may have less protection of property rights than more developed countries. Certain emerging markets may require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, a country could impose temporary restrictions on foreign capital remittances, whether because deterioration occurs in an emerging market’s balance of payments or for other reasons. The Funds could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as by the application to the Funds of any restrictions on investments. Investments in certain foreign emerging market debt obligations may be restricted or controlled to varying degrees. These restrictions or controls may at times preclude investment in certain foreign emerging market debt obligations and increase the expenses of the Funds.
Foreign Currency Transactions	When investing in securities denominated in foreign currencies, the Funds will be subject to the additional risk of currency fluctuations. An adverse change in the value of a particular foreign currency as against the U.S. dollar, to the extent that such change is not offset by a gain in other foreign currencies, will result in a decrease in the Fund’s assets. Any such change may also have the effect of decreasing or limiting the income available for distribution. Foreign currencies may be affected by revaluation, adverse political and economic developments, and governmental restrictions. Further, no assurance can be given that currency exchange controls will not be imposed on any particular currency at a later date. As a result of its investments in foreign securities, a Fund may receive interest or dividend payments, or the proceeds of the sale or redemption of such securities, in the foreign currencies in which such securities are denominated. In that event, the Fund may convert such currencies into dollars at the then current exchange rate. Under certain circumstances, however, such as where the Fund’s subadviser believes that the applicable rate is unfavorable at the time the currencies are received or the Fund’s subadviser anticipates, for any other reason, that the exchange rate will improve, the Fund may hold such currencies for an indefinite period of time. In addition, a Fund may be required to receive delivery of the foreign currency underlying forward foreign currency contracts it has entered into. This could occur, for example, if an option written by the Fund is exercised or the Fund is unable to close out a forward contract. A Fund may hold foreign currency in anticipation of purchasing foreign securities. A Fund may also elect to take delivery of the currencies’ underlying options or forward contracts if, in the judgment of the Fund’s subadviser, it is in the best interest of the Fund to do so. In such instances as well, the Fund may convert the foreign currencies to dollars at the then current exchange rate, or may hold such currencies for an indefinite period of time. While the holding of currencies will permit a Fund to take advantage of favorable movements in the applicable exchange rate, it also exposes the Fund to risk of loss if such rates move in a direction adverse to the Fund’s position. Such losses could reduce any profits or increase any losses sustained by the Fund from the sale or redemption of securities, and could reduce the dollar value of interest or dividend payments received. In addition, the holding of currencies could adversely affect the Fund’s profit or loss on currency options or forward contracts, as well as its hedging strategies.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	When a Fund effects foreign currency exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing in the foreign exchange market, the Fund incurs expenses in converting assets from one currency to another. A Fund may also effect other types of foreign currency exchange transactions, which have their own risks and costs. For information about such transactions, please see “Foreign Currency Forward Contracts, Futures and Options” under “Derivatives” in this section of the SAI.
Foreign Investment Companies	Some of the countries in which the Funds may invest may not permit, or may place economic restrictions on, direct investment by outside investors. Investments in such countries may be permitted only through foreign government-approved or -authorized investment vehicles, which may include other investment companies. These funds may also invest in other investment companies that invest in foreign securities. Investing through such vehicles may involve frequent or layered fees or expenses and may also be subject to limitation under the 1940 Act. As a shareholder of another investment company, the Fund would bear, along with other shareholders, its pro rata portion of the other investment company’s expenses, including advisory fees. Those expenses would be in addition to the advisory and other expenses that the Fund bears directly in connection with its own operations. For additional information, see “Mutual Fund Investing” in this section of the SAI.
Privatizations	The governments of some foreign countries have been engaged in programs of selling part or all of their stakes in government owned or controlled enterprises (“privatizations”). Privatizations may offer opportunities for significant capital appreciation. In certain foreign countries, the ability of foreign entities such as the Funds to participate in privatizations may be limited by local law, or the terms on which a Fund may be permitted to participate may be less advantageous than those for local investors. There can be no assurance that foreign governments will continue to sell companies currently owned or controlled by them or that privatization programs will be successful.
Funding Agreements	Each Fund may invest in funding agreements, which are insurance contracts between an investor and the issuing insurance company. For the issuer, they represent senior obligations under an insurance product. For the investor, and from a regulatory perspective, these agreements are treated as securities. These agreements, like other insurance products, are backed by claims on the general assets of the issuing entity and rank on the same priority level as other policy holder claims. Funding agreements typically are issued with a one-year final maturity and a variable interest rate, which may adjust weekly, monthly, or quarterly. Some agreements carry a seven-day put feature. A funding agreement without this feature is considered illiquid and will therefore be subject to the Funds’ limitations on investments in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.) Funding agreements are regulated by the state insurance board of the state where they are executed.
Guaranteed Investment Contracts	Each Fund may invest in GICs issued by U.S. and Canadian insurance companies. A GIC requires the investor to make cash contributions to a deposit fund of an insurance company’s general account. The insurance company then makes payments to the investor based on negotiated, floating or fixed interest rates. A GIC is a general obligation of the issuing insurance company and not a separate account. The purchase price paid for a GIC becomes part of the general assets of the insurance company, and the contract is paid from the insurance company’s general assets. Generally, a GIC is not assignable or transferable without the permission of the issuing insurance company, and an active secondary market in GICs does not

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	currently exist. Therefore, these investments may be deemed to be illiquid, in which case they will be subject to the Funds’ limitations on investments in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Illiquid and Restricted Securities	Illiquid securities are investments that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Each Fund may invest up to 15% of its net assets in illiquid securities. Historically, illiquid securities have included securities subject to contractual or legal restrictions on resale because they have not been registered under the 1933 Act (“restricted securities”), securities that are otherwise not readily marketable, such as over-the-counter options, and repurchase agreements not entitling the holder to payment of principal in seven days. Such securities may offer higher yields than comparable publicly traded securities, and they also may incur higher risks. Repurchase agreements, reverse repurchase agreements and time deposits that do not provide for payment to the Fund within seven days after notice or which have a term greater than seven days are deemed illiquid securities for this purpose unless such securities are variable amount master demand notes with maturities of nine months or less or unless the Fund’s subadviser has determined that an adequate trading market exists for such securities or that market quotations are readily available. The Funds may purchase Rule 144A securities sold to institutional investors without registration under the 1933 Act and commercial paper issued in reliance upon the exemption in Section 4(a)(2) of the 1933 Act, for which an institutional market has developed. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on the issuer’s ability to honor a demand for repayment of the unregistered security. Although the investments described in this section generally will be considered illiquid, an investment’s contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of the investment and therefore these investments may be determined to be liquid in accordance with guidelines established by the Board. The Trustees have delegated to each Fund’s investment adviser the determination of the liquidity of such investments in the respective Fund’s portfolio as administrator of the Fund’s liquidity risk management program. The Fund’s investment adviser will take into account relevant market, trading and investment-specific considerations when determining whether an investment is illiquid. If illiquid securities exceed 15% of a Fund’s net assets after the time of purchase, the Fund will take steps to reduce in an orderly fashion its holdings of illiquid securities. Because illiquid securities may not be readily marketable, the relevant Fund’s subadviser may not be able to dispose of them in a timely manner. As a result, the Fund may be forced to hold illiquid securities while their price depreciates. Depreciation in the price of illiquid securities may cause the NAV of the Fund holding them to decline. An investment that is determined by a Fund’s investment adviser to be liquid may subsequently revert to being illiquid if not enough buyer interest exists. Restricted securities ordinarily can be sold by the Fund in secondary market transactions to certain qualified investors pursuant to rules established by the SEC, in privately negotiated transactions to a limited number of purchasers or in a public offering made pursuant to an effective registration statement under the 1933 Act. When registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable time may elapse

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	between the decision to sell and the sale date. If, during such period, adverse market conditions were to develop, the Fund might obtain a less favorable price than the price which prevailed when it decided to sell. Restricted securities will be priced at fair value as determined in good faith by the Trustees or their delegate.
Leverage	Each Fund may employ investment techniques that create leverage, either by using borrowed capital to increase the amount invested, or investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies that involve leverage can result in losses that greatly exceed the amount originally invested. The SEC takes the position that transactions that have a leveraging effect on the capital structure of a mutual fund or are economically equivalent to borrowing can be viewed as constituting a form of borrowing by the fund for purposes of the 1940 Act. These transactions can include buying and selling certain derivatives (such as futures contracts); selling (or writing) put and call options; engaging in sale-buybacks; entering into firm-commitment and stand-by commitment agreements; engaging in when-issued, delayed-delivery, or forward-commitment transactions; and other similar trading practices (additional discussion about a number of these transactions can be found throughout this section of the SAI). As a result, when a Fund enters into such transactions the transactions may be subject to the same requirements and restrictions as borrowing. (See “Borrowing” below for additional information.) The following are some of the Funds’ permitted investment techniques that are generally viewed as creating leverage for the Funds.
Borrowing	A Fund’s ability to borrow money is limited by its investment policies and limitations, by the 1940 Act, and by applicable exemptions, no-action letters, interpretations, and other pronouncements issued from time to time by the SEC and its staff or any other regulatory authority with jurisdiction. Under the 1940 Act, a Fund is required to maintain continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with an exception for borrowings not in excess of 5% of the Fund’s total assets made for temporary or emergency purposes. Any borrowings for temporary purposes in excess of 5% of the Fund’s total assets must maintain continuous asset coverage. If the 300% asset coverage should decline as a result of market fluctuations or for other reasons, a Fund may be required to sell some of its portfolio holdings within three days (excluding Sundays and holidays) to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time. Borrowing will tend to exaggerate the effect on net asset value of any increase or decrease in the market value of a Fund’s portfolio. Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. A Fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.
Mortgage “Dollar-Roll” Transactions	Each Fund may enter into mortgage “dollar-roll” transactions pursuant to which it sells mortgage-backed securities for delivery in the future and simultaneously contracts to repurchase substantially similar securities on a specified future date. During the roll period, the Fund forgoes principal and interest paid on the mortgage-backed securities.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	The Fund is compensated for the lost interest by the difference between the current sales price and the lower price for the future purchase (often referred to as the “drop”) as well as by the interest earned on, and gains from, the investment of the cash proceeds of the initial sale. The Fund may also be compensated by receipt of a commitment fee. If the income and capital gains from the Fund’s investment of the cash from the initial sale do not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of the Fund compared with what the performance would have been without the use of the dollar roll. Dollar-roll transactions involve the risk that the market value of the securities the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker-dealer to whom the Fund sells securities becomes insolvent, the Fund’s right to purchase or repurchase securities may be restricted. Successful use of dollar rolls may depend upon the Fund’s subadviser’s ability to correctly predict interest rates and prepayments. There is no assurance that dollar rolls can be successfully employed.
Reverse Repurchase Agreements	Reverse repurchase agreements are transactions in which the Fund sells a security and simultaneously commits to repurchase that security from the buyer, such as a bank or broker-dealer, at an agreed-upon price on an agreed-upon future date. The resale price in a reverse repurchase agreement reflects a market rate of interest that is not related to the coupon rate or maturity of the sold security. For certain demand agreements, there is no agreed-upon repurchase date and interest payments are calculated daily, often based upon the prevailing overnight repurchase rate. Generally, a reverse repurchase agreement enables the Fund to recover for the term of the reverse repurchase agreement all or most of the cash invested in the portfolio securities sold and to keep the interest income associated with those portfolio securities. Such transactions are only advantageous if the interest cost to the Fund of the reverse repurchase transaction is less than the cost of obtaining the cash otherwise. In addition, interest costs on the money received in a reverse repurchase agreement may exceed the return received on the investments made by the Fund with those monies. Using reverse repurchase agreements to earn additional income involves the risk that the interest earned on the invested proceeds is less than the expense of the reverse repurchase agreement transaction. Because reverse repurchase agreements are considered borrowing under the 1940 Act, while a reverse repurchase agreement is outstanding, the Fund will maintain cash and appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. A Fund will enter into reverse repurchase agreements only with parties that the Fund’s subadviser deems creditworthy, but such investments are still subject to the risks of leverage discussed above.
Leveraged Buyouts	A Fund may invest in leveraged buyout limited partnerships and funds that, in turn, invest in leveraged buyout transactions (“LBOs”). An LBO, generally, is an acquisition of an existing business by a newly formed corporation financed largely with debt assumed by such newly formed corporation to be later repaid with funds generated from the acquired company. Equity investments in LBOs may appreciate substantially in value given only modest growth in the earnings or cash flow of the acquired business. Investments in LBO limited partnerships and funds, however, present a number of risks. Investments in LBO limited

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	partnerships and funds will normally lack liquidity and may be subject to intense competition from other LBO limited partnerships and funds. Additionally, if the cash flow of the acquired company is insufficient to service the debt assumed in the LBO, the LBO limited partnership or fund could lose all or part of its investment in such acquired company.
Master Limited Partnerships (“MLP”)	An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Conflicts of interest exist between common unit holders and the general partner, including those arising from incentive distribution payments. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The fees that MLPs charge for transportation of oil and gas products through their pipelines are subject to government regulation, which could negatively impact the revenue stream. Investing in MLPs also involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. These include the risk of environmental incidents, terrorist attacks, demand destruction from high commodity prices, proliferation of alternative energy sources, inadequate supply of external capital, and conflicts of interest with the general partner. There are also certain tax risks associated with investment in MLPs. The benefit derived from a Fund’s investment in MLPs is somewhat dependent on the MLP being treated as a partnership for federal income tax purposes, so any change to this status would adversely affect the price of MLP units. Historically, a substantial portion of the gross taxable income of MLPs has been offset by tax losses and deductions reducing gross income received by investors, and any change to these tax rules would adversely affect the price of an MLP unit. Certain MLPs may trade less frequently than other securities, and those with limited trading volumes may display volatile or erratic price movements.
Money Market Instruments	Each Fund may invest in money market instruments, which are high-quality short-term investments. The types of money market instruments most commonly acquired by the Funds are discussed below, although each Fund is also permitted to invest in other types of money market instruments to the extent consistent with the Fund’s investment limitations and restrictions.
Banker's Acceptances	A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction (to finance the import, export, transfer or storage of goods). The borrower, as well as the bank, is liable for payment, and the bank unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in secondary markets prior to maturity.
Certificates of Deposit	Certificates of deposit are generally short-term, interest-bearing negotiable certificates issued by banks or savings and loan associations against funds deposited in the issuing institution. They generally may be withdrawn on demand but may be subject to early withdrawal penalties which could reduce the Fund’s yield. Deposits subject to early withdrawal penalties or that mature in more than seven days are treated as illiquid securities if there is no readily available market for the securities.
Commercial Paper	Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months.

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Obligations of Foreign Banks and Foreign Branches of U.S. Banks	The money market instruments in which the Funds may invest include negotiable certificates of deposit, bankers’ acceptances and time deposits of foreign branches of U.S. banks, foreign banks and their non-U.S. branches (Eurodollars), U.S. branches and agencies of foreign banks (Yankee dollars), and wholly-owned banking-related subsidiaries of foreign banks. For the purposes of each Fund’s investment policies with respect to money market instruments, obligations of foreign branches of U.S. banks and of foreign banks are obligations of the issuing bank and may be general obligations of the parent bank. Such obligations, however, may be limited by the terms of a specific obligation and by government regulation. As with investment in non-U.S. securities in general, investments in the obligations of foreign branches of U.S. banks and of foreign banks may subject a Fund to investment risks that are different in some respects from those of investments in obligations of domestic issuers.
Time Deposits	Time deposits are deposits in a bank or other financial institution for a specified period of time at a fixed interest rate for which a negotiable certificate is not received.
U.S. Government Obligations	Securities issued or guaranteed as to principal and interest by the United States Government include a variety of Treasury securities, which differ only in their interest rates, maturities, and times of issuance. Treasury bills have maturities of one year or less. Treasury notes have maturities of one to ten years, and Treasury bonds generally have maturities of greater than ten years. Agencies of the United States Government which issue or guarantee obligations include, among others, Export-Import Bank of the United States, Farmers Home Administration, Federal Housing Administration, GNMA, Maritime Administration, Small Business Administration and The Tennessee Valley Authority. Obligations of instrumentalities of the United States Government include securities issued or guaranteed by, among others, FNMA, Federal Home Loan Banks, FHLMC, Federal Intermediate Credit Banks, Banks for Cooperatives, and the U.S. Postal Service. Some of these securities are supported by the full faith and credit of the U.S. Government, others are supported by the right of the issuer to borrow from the Treasury, while still others are supported only by the credit of the instrumentality. There is no guarantee that the U.S. Government will provide financial support to its agencies or instrumentalities, now or in the future, if it is not obligated to do so by law. Accordingly, although these securities have historically involved little risk of loss of principal if held to maturity, they may involve more risk than securities backed by the full faith and credit of the U.S. Government because the Fund must look principally to the agency or instrumentality issuing or guaranteeing the securities for repayment and may not be able to assert a claim against the United States if the agency or instrumentality does not meet its commitment.
Mutual Fund Investing	Each Fund is authorized to invest in the securities of other investment companies subject to the limitations contained in the 1940 Act. Investment companies in which the Fund may invest may include ETFs. An ETF is an investment company classified as an open-end investment company or unit investment trust that is traded similarly to a publicly traded company. Most ETFs seek to achieve the same return as a particular market index. That type of ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An index-based ETF will invest in all of the securities included in the index, a representative sample of the securities included in the index, or other investments expected to produce returns substantially similar to that of the index.

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			Other types of ETFs include leveraged or inverse ETFs, which are ETFs that seek to achieve a daily return that is a multiple or an inverse multiple of the daily return of a securities index. An important characteristic of these ETFs is that they seek to achieve their stated objectives on a daily basis, and their performance over longer periods of time can differ significantly from the multiple or inverse multiple of the index performance over those longer periods of time. ETFs also include actively managed ETFs that pursue active management strategies and publish their portfolio holdings on a frequent basis. In connection with the management of its daily cash positions, each Fund may invest in securities issued by investment companies that invest in short-term debt securities (which may include municipal obligations that are exempt from Federal income taxes) and that seek to maintain a $1.00 NAV per share. In certain countries, investments by the Funds may only be made through investments in other investment companies that, in turn, are authorized to invest in the securities that are issued in such countries. (See “Foreign Investment Companies” under “Foreign Investing” in this section of the SAI.) Under the 1940 Act, a Fund generally may not own more than 3% of the outstanding voting stock of an investment company, invest more than 5% of its total assets in any one investment company, or invest more than 10% of its total assets in the securities of investment companies. In some instances, a Fund may invest in an investment company in excess of these limits; for instance, with respect to investments in money market funds or investments made pursuant to exemptive rules adopted and/or orders granted by the SEC. The SEC has adopted exemptive rules to permit funds of funds to exceed these limits when complying with certain conditions, which differ depending upon whether the funds in which a fund of funds invests are affiliated or unaffiliated with the fund of funds. Many ETFs have obtained exemptive relief from the SEC to permit unaffiliated funds to invest in the ETF’s shares beyond the statutory limitations discussed above, subject to certain conditions. The Funds may rely on these exemptive rules and/or orders to invest in affiliated or unaffiliated mutual funds and/or unaffiliated ETFs. In addition to this, the Trust has obtained exemptive relief permitting the Funds to exceed the limitations with respect to investments in affiliated and unaffiliated funds that are not themselves funds of funds, subject to certain conditions. The risks associated with investing in other investment companies generally reflect the risks of owning shares of the underlying securities in which those investment companies invest, although lack of liquidity in an investment company could result in its value being more volatile than the underlying portfolio of securities. For purposes of complying with investment policies requiring a Fund to invest a percentage of its assets in a certain type of investments (e.g., stocks of small capitalization companies), the Fund generally will look through an investment company in which it invests, to categorize the investment company in accordance with the types of investments the investment company holds. Certain investment companies in which the Funds may invest may be considered commodity pools under the CEA and applicable CFTC regulations. If a Fund invests in such an investment company, the Fund will be required to treat some or all of its holding of the investment company’s shares as a commodity interest for the purposes of determining whether the Fund is qualified to claim exclusion or exemption from regulation by the CFTC. (See “Commodity Interests” in this section of the SAI for additional information regarding the implications to the Funds of investing in commodity interests.)

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	Investors in each Fund should recognize that when a Fund invests in another investment company, the Fund will bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Real Estate Investment Trusts (REITs)	Each Fund may invest in REITs. REITs pool investors’ funds for investment primarily in income producing commercial real estate or real estate related loans. A REIT is not taxed on income distributed to shareholders if it complies with several requirements relating to its organization, ownership, assets, and income and a requirement that it distribute to its shareholders at least 90% of its taxable income (other than net capital gains) for each taxable year. REITs can generally be classified as follows: • Equity REITs, which invest the majority of their assets directly in real property and derive their income primarily from rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. • Mortgage REITs, which invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments. • Hybrid REITs, which combine the characteristics of both equity REITs and mortgage REITs. REITs are structured similarly to closed-end investment companies in that they are essentially holding companies. An investor should realize that by investing in REITs indirectly through the Fund, he will bear not only his proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the underlying REITs. (See “Mutual Fund Investing” in this section of the SAI.) Selecting REITs requires an evaluation of the merits of each type of asset a particular REIT owns, as well as regional and local economics. Due to the proliferation of REITs in recent years and the relative lack of sophistication of certain REIT managers, the quality of REIT assets has varied significantly. The risks associated with REITs are similar to those associated with the direct ownership of real estate. These include declines in the value of real estate, risks related to general and local economic conditions, dependence on management skill, cash flow dependence, possible lack of availability of long-term mortgage funds, over-building, extended vacancies of properties, decreased occupancy rates and increased competition, increases in property taxes and operating expenses, changes in neighborhood values and the appeal of the properties to tenants and changes in interest rates. Equity REITs may be affected by changes in the value of the underlying properties they own, while mortgage REITs may be affected by the quality of any credit extended. Further, equity and mortgage REITs are dependent upon management skills and generally are not diversified. Equity and mortgage REITs are also subject to potential defaults by borrowers, self-liquidation, and the possibility of failing to qualify for tax-free status of income under the Code and failing to maintain exemption from the 1940 Act. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting its investments. In addition, investment in REITs could cause the Fund to possibly fail to qualify as a regulated investment company. (See the “Dividends, Distributions and Taxes” section of the SAI.)
Repurchase Agreements	Each Fund may enter into repurchase agreements by which the Fund purchases portfolio securities subject to the seller’s agreement to repurchase them at a mutually agreed-upon time and price. The repurchase price may be higher than the purchase price, the	Repurchase agreements of more than seven days’ duration are subject to

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	difference being income to the Fund, or the purchase and repurchase price may be the same, with interest payable to the Fund at a stated rate together with the repurchase price on repurchase. In either case, the income to the Fund is unrelated to the interest rate on the security. A repurchase agreement must be collateralized by obligations that could otherwise be purchased by the Fund (except with respect to maturity), and these must be maintained by the seller in a segregated account for the Fund. The value of such collateral will be monitored throughout the term of the repurchase agreement in an attempt to ensure that the market value of the collateral always equals or exceeds the repurchase price (including accrued interest). If the value of the collateral dips below such repurchase price, additional collateral will be requested and, when received, added to the account to maintain full collateralization. Repurchase agreements will be entered into with commercial banks, brokers and dealers considered by the relevant Fund’s subadviser to be creditworthy. However, the use of repurchase agreements involves certain risks such as default by, or insolvency of, the other party to the transaction. The Fund also might incur disposition costs in connection with liquidating the underlying securities or enforcing its rights. Typically, repurchase agreements are in effect for one week or less, but they may be in effect for longer periods of time.	each Fund’s limitation on investments in illiquid securities, which means that no more than 15% of the market value of a Fund’s total assets may be invested in repurchase agreements with a maturity of more than seven days and in other illiquid securities.
Securities Lending	Subject to certain investment restrictions, each Fund may, subject to the Trustees’ and Trust Treasurer’s approval, lend securities from its portfolio to brokers, dealers and financial institutions deemed creditworthy and receive, as collateral, cash or cash equivalents which at all times while the loan is outstanding will be maintained in amounts equal to at least 100% of the current market value of the loaned securities. Any cash collateral will be invested in short-term securities that will increase the current income of the Fund lending its securities. A Fund will have the right to regain record ownership of loaned securities to exercise beneficial rights such as voting rights and subscription rights. While a securities loan is outstanding, the Fund is to receive an amount equal to any dividends, interest or other distributions with respect to the loaned securities. A Fund may pay reasonable fees to persons unaffiliated with the Trust for services in arranging such loans. Even though securities lending usually does not impose market risks on the lending Fund, as with any extension of credit, there are risks of delay in recovery of the loaned securities and in some cases loss of rights in the collateral should the borrower of the securities fail financially. In addition, the value of the collateral taken as security for the securities loaned may decline in value or may be difficult to convert to cash in the event that a Fund must rely on the collateral to recover the value of the securities. Moreover, if the borrower of the securities is insolvent, under current bankruptcy law, the Fund could be ordered by a court not to liquidate the collateral for an indeterminate period of time. If the borrower is the subject of insolvency proceedings and the collateral held might not be liquidated, the result could be a material adverse impact on the liquidity of the lending Fund. No Fund will lend securities having a value in excess of 33 1/3% of its assets, including collateral received for loaned securities (valued at the time of any loan).
Short Sales	Each Fund may sell securities short as part of its overall portfolio management strategies involving the use of derivative instruments and to offset potential declines in long positions in similar securities. A short sale is a transaction in which a Fund sells a security it does not own or have the right to acquire, or that it owns but does not wish to

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	deliver, in anticipation that the market price of that security will decline. A short sale is “against the box” to the extent the Fund contemporaneously owns, or has the right to obtain at no added cost, securities identical to those sold short. All other short sales are commonly referred to as “naked” short sales. When a Fund makes a short sale, the broker-dealer through which the short sale is made must borrow the security sold short and deliver it to the party purchasing the security. The Fund is required to make a margin deposit in connection with such short sales; the Fund may have to pay a fee to borrow particular securities and will often be obligated to pay over any dividends and accrued interest on borrowed securities. If the price of the security sold short increases between the time of the short sale and the time the Fund covers its short position, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged. If a Fund sells securities short against the box, it may protect unrealized gains, but will lose the opportunity to profit on such securities if the price rises. If a Fund engages in naked short sales, the Fund’s risk of loss could be as much as the maximum attainable price of the security (which could be limitless) less the price paid by the Fund for the security at the time it was borrowed. When a Fund sells securities short, to the extent required by applicable law and regulation the Fund will “cover” the short sale, which generally means that the Fund will segregate any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily, equal to the market value of the securities sold short, reduced by any amount deposited as margin. Alternatively, the Fund may “cover” a short sale by (a) owning the underlying securities, (b) owning securities currently convertible into the underlying securities at an exercise price equal to or less than the current market price of the underlying securities, or (c) owning a purchased call option on the underlying securities with an exercise price equal to or less than the price at which the underlying securities were sold short.
Special Situations	Each Fund may invest in special situations that the Fund’s subadviser believes present opportunities for capital growth. Such situations most typically include corporate restructurings, mergers, and tender offers. A special situation arises when, in the opinion of the Fund’s subadviser, the securities of a particular company will, within a reasonably estimable period of time, be accorded market recognition at an appreciated value solely by reason of a development particularly or uniquely applicable to that company and regardless of general business conditions or movements of the market as a whole. Developments creating special situations might include, among others, the following: liquidations, reorganizations, recapitalizations, mergers, or tender offers; material litigation or resolution thereof; technological breakthroughs; and new management or management policies. Although large and well-known companies may be involved, special situations often involve much greater risk than is inherent in ordinary investment securities.
Standby Commitments and Puts	A Fund may purchase securities at a price which would result in a yield to maturity lower than that generally offered by the seller at the time of purchase when the Fund can simultaneously acquire the right to sell the securities back to the seller, the issuer or a third-party (the “writer”) at an agreed-upon price at any time during a stated period or on a

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	certain date. Such a right is generally denoted as a “standby commitment” or a “put.” The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity to permit a Fund to meet redemptions and remain as fully invested as possible in municipal securities. The Funds reserve the right to engage in put transactions. The right to put the securities depends on the writer’s ability to pay for the securities at the time the put is exercised. A Fund would limit its put transactions to institutions which the Subadviser believes present minimal credit risks, and the Subadviser would use its best efforts to initially determine and continue to monitor the financial strength of the sellers of the options by evaluating their financial statements and such other information as is available in the marketplace. It may, however, be difficult to monitor the financial strength of the writers because adequate current financial information may not be available. In the event that any writer is unable to honor a put for financial reasons, a Fund would be a general creditor (i.e., on a parity with all other general unsecured creditors) of the writer. Furthermore, particular provisions of the contract between a Fund and the writer may excuse the writer from repurchasing the securities. For example, a change in the published rating of the underlying securities or any similar event that has an adverse effect on the issuer’s credit or a provision in the contract that the put will not be exercised except in certain special cases (such as to maintain portfolio liquidity). A Fund could, however, at any time sell the underlying portfolio security in the open market or wait until the portfolio security matures, at which time it should realize the full par value of the security. The securities purchased subject to a put may be sold to third persons at any time, even though the put is outstanding, but the put itself, unless it is an integral part of the security as originally issued, may not be marketable or otherwise assignable. Therefore, the put would have value only to a Fund. Sale of the securities to third parties or lapse of time with the put unexercised may terminate the right to put the securities. Prior to the expiration of any put option, a Fund could seek to negotiate terms for the extension of such an option. If such a renewal cannot be negotiated on terms satisfactory to a Fund, the Fund could, of course, sell the portfolio security. The maturity of the underlying security will generally be different from that of the put. There will be no limit to the percentage of portfolio securities that a Fund may purchase subject to a standby commitment or put, but the amount paid directly or indirectly for all standby commitments or puts which are not integral parts of the security as originally issued held in a Fund will not exceed one-half of 1% of the value of the total assets of such Fund calculated immediately after any such put is acquired.
Stapled Securities	A stapled security consists of two or more securities that are combined to form one security such that the individual securities cannot be traded separately. For example, an interest in a portfolio of real estate properties (a REIT) may be combined with an interest in the operating company that manages the portfolio of those properties. Investors in stapled securities are subject to the risks inherent with each security that makes up the stapled security.
Structured Notes	Structured Notes are derivatives where the amount of principal repayment and or interest payments is based upon the movement of one or more factors. These factors include, but are not limited to, currency exchange rates, interest rates (such as the prime lending rate and LIBOR) and stock indices such as the S&P 500 ® Index.

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	In some cases, the impact of the movements of these factors may increase or decrease through the use of multipliers or deflators. The use of structured notes allows the Fund to tailor its investments to the specific risks and returns the Subadviser wishes to accept while avoiding or reducing certain other risks.
Supranational Agency Obligations	Supranational Agency Obligations are obligations of supranational entities established through the joint participation of several governments, including the Asian Development Bank, Inter-American Development Bank, International Bank for Reconstruction and Development (also known as the “World Bank”), African Development Bank, European Union, European Investment Bank, and the Nordic Investment Bank.
Temporary Investments	When business or financial conditions warrant, each Fund may assume a temporary defensive position by investing in money-market instruments, including obligations of the U.S. Government and its agencies and instrumentalities, obligations of foreign sovereigns, other debt securities, commercial paper including bank obligations, certificates of deposit (including Eurodollar certificates of deposit) and repurchase agreements. (See “Money Market Instruments” in this section of the SAI for more information about these types of investments.) For temporary defensive purposes, during periods in which a Fund’s subadviser believes adverse changes in economic, financial or political conditions make it advisable, the Fund may reduce its holdings in equity and other securities and may invest up to 100% of its assets in certain short-term (less than twelve months to maturity) and medium-term (not greater than five years to maturity) debt securities and in cash (U.S. dollars, foreign currencies, or multicurrency units). The short-term and medium-term debt securities in which a Fund may invest for temporary defensive purposes will be those that the Fund’s subadviser believes to be of high quality (i.e., subject to relatively low risk of loss of interest or principal). If rated, these securities will be rated in one of the three highest rating categories by rating services such as Moody’s or S&P (i.e., rated at least A).	The Funds are not prohibited from investing in bank obligations issued by clients of the Funds’ administrator or distributor or their respective parent or affiliated companies. The purchase of Fund shares by these banks or their customers will not be a consideration in deciding which bank obligations the Funds will purchase. A Fund will not purchase obligations issued by the Adviser, Subadvisers, or their affiliates. The Ceredex Small-Cap Value Equity Fund also may invest in investment grade fixed income securities and mid- to large-capitalization common stocks that would not ordinarily be consistent with the Fund’s objective.
Trust Preferred Securities	Trust preferred securities are convertible preferred shares issued by a trust where proceeds from the sale are used to purchase convertible subordinated debt from the issuer. The convertible subordinated debt is the sole asset of the trust. The coupon from the issuer to the trust exactly mirrors the preferred dividend paid by the trust. Upon conversion by the investors, the trust in turn converts the convertible debentures and passes through the shares to the investors.
Warrants or Rights to Purchase Securities	Each Fund may invest in or acquire warrants or rights to purchase equity or fixed income securities at a specified price during a specific period of time. A Fund will make such investments only if the underlying securities are deemed appropriate by the Fund’s subadviser for inclusion in the Fund’s portfolio. Included are warrants and rights whose underlying securities are not traded on principal domestic or foreign exchanges. Warrants and stock rights are almost identical to call options in their nature, use and effect except that they are issued by the issuer of the underlying security, rather than an

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	option writer, and they generally have longer expiration dates than call options. (See “Options” in this section of the SAI for information about call options.) Bonds with warrants attached to purchase equity securities have many characteristics of convertible bonds and their prices may, to some degree, reflect the performance of the underlying stock. However, unlike convertible securities and preferred stocks, warrants do not pay a fixed dividend. Bonds also may be issued with warrants attached to purchase additional fixed income securities at the same coupon rate. A decline in interest rates would permit a Fund holding such warrants to buy additional bonds at the favorable rate or to sell the warrants at a profit. If interest rates rise, the warrants would generally expire with no value. A Fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more specified securities indices (“index warrants”). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of exercise. In general, if the value of the underlying index rises above the exercise price of the index warrant, the holder of a call warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the value of the index and the exercise price of the warrant; if the value of the underlying index falls, the holder of a put warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the exercise price of the warrant and the value of the index. The holder of a warrant would not be entitled to any payments from the issuer at any time when, in the case of a call warrant, the exercise price is greater than the value of the underlying index or, in the case of a put warrant, the exercise price is less than the value of the underlying index. If a Fund were not to exercise an index warrant prior to its expiration, then the Fund would lose the amount of the purchase price paid by it for the warrant. A Fund will normally use index warrants in a manner similar to its use of options on securities indices. The risks of the Fund’s use of index warrants are generally similar to those relating to its use of index options. (See “Options” in this section of the SAI for information about index options.) Unlike most index options, however, index warrants are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only by the credit of the bank or other institution which issues the warrant. Also, index warrants generally have longer terms than index options. Although a Fund will normally invest only in exchange-listed warrants, index warrants are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the terms of index warrants may limit a Fund’s ability to exercise the warrants at such time, or in such quantities, as the Fund would otherwise wish to do.
When-Issued and Delayed Delivery Transactions	Each Fund may purchase securities on a when-issued or forward commitment basis. These transactions are also known as delayed delivery transactions. (The phrase “delayed delivery” is not intended to include purchases where a delay in delivery involves only a brief period required by the selling party solely to locate appropriate certificates and prepare them for submission for clearance and settlement in the customary way.) Delayed delivery transactions involve a commitment by the Fund to purchase or sell securities at a future date (ordinarily up to 90 days later). The price of the underlying securities (usually expressed in terms of yield) and the date when the securities will be delivered and paid for (the settlement date) are fixed at the time the transaction is negotiated. When-issued purchases and forward commitments are negotiated directly with the selling party.

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Investment Technique			Description and Risks			Fund-Specific Limitations
			When-issued purchases and forward commitments enable the Fund to lock in what is believed to be an attractive price or yield on a particular security for a period of time, regardless of future changes in interest rates. For example, in periods of rising interest rates and falling bond prices, the Fund might sell debt securities it owns on a forward commitment basis to limit its exposure to falling prices. In periods of falling interest rates and rising prices, the Fund might sell securities it owns and purchase the same or similar securities on a when-issued or forward commitment basis, thereby obtaining the benefit of currently higher yields. The Fund will not enter into such transactions for the purpose of leverage. The value of securities purchased on a when-issued or forward commitment basis and any subsequent fluctuations in their value will be reflected in the Fund’s NAV starting on the first business day after the date of the agreement to purchase the securities. The Fund will be subject to the rights and risks of ownership of the securities on the agreement date. However, the Fund will not earn interest on securities it has committed to purchase until they are paid for and received. A seller’s failure to deliver securities to the Fund could prevent the Fund from realizing a price or yield considered to be advantageous and could cause the Fund to incur expenses associated with unwinding the transaction. When a Fund makes a forward commitment to sell securities it owns, the proceeds to be received upon settlement will be included in the Fund’s assets. Fluctuations in the market value of the underlying securities will not be reflected in the Fund’s NAV as long as the commitment to sell remains in effect. Settlement of when-issued purchases and forward commitment transactions generally takes place up to 90 days after the date of the transaction, but the Fund may agree to a longer settlement period. The Funds will make commitments to purchase securities on a when-issued basis or to purchase or sell securities on a forward commitment basis only with the intention of completing the transaction and actually purchasing or selling the securities. If deemed advisable as a matter of investment strategy, however, a Fund may dispose of or renegotiate a commitment after it is entered into. A Fund also may sell securities it has committed to purchase before those securities are delivered to the Fund on the settlement date. The Fund may realize a capital gain or loss in connection with these transactions. When a Fund purchases securities on a when-issued or forward-commitment basis, the Fund will specifically designate on its accounting records securities having a value (determined daily) at least equal to the amount of the Fund’s purchase commitments. These procedures are designed to ensure that each Fund will maintain sufficient assets at all times to cover its obligations under when-issued purchases and forward commitments.

SEIX INVESTMENT GRADE TAX-EXEMPT BOND FUND AND SEIX SHORT-TERM MUNICIPAL BOND FUND ONLY

Risk Factors Associated with Puerto Rico (The Seix Investment Grade Tax-Exempt Bond Fund, and Seix Short-Term Municipal Bond Fund may invest in Puerto Rico debt obligations as part of their principal investment strategies.)

Since 2006, the Commonwealth of Puerto Rico (“Commonwealth”) has been in an economic recession with a decreasing gross national product (“GNP”) (except FY 2012), recurring budget gaps, and pension funds shortfalls. As a result, the credit ratings of Puerto Rico’s general obligation bonds, guaranteed bonds, as well as the ratings of most of its public corporations, have been downgraded to noninvestment grade by Moody’s, S&P, and Fitch. As of 2018, Puerto Rico owed approximately $74 billion to bondholders and had an estimated $50 billion in pension obligations. On June 30, 2016, then President of the United States of America, Barack Obama, signed into law the Puerto Rico Oversight Management and Economic Stability Act (“PROMESA”). PROMESA imposed an automatic stay on creditors’ liability claims (defined generally as bonds, notes and other financial debt) and created a federal Financial Oversight and

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Management Board (“Oversight Board”) with broad powers over Puerto Rico’s fiscal and budgetary matters. PROMESA requires the Commonwealth and its instrumentalities to develop, prepare, and submit proposed budgets and fiscal plans to the Oversight Board for approval. Additionally, PROMESA provides for a process of submission and approval of voluntary agreements to modify bond claims and for the voluntary commencement of a debt adjustment case pursuant to Title III that is similar, though not identical, to a petition filed under Chapter 9 of the U.S. Bankruptcy Code. On May 3, 2017, the Oversight Board filed Title III voluntary petitions with the United States District Court for the District of Puerto Rico (“Court”) seeking to restructure the debts of: the Commonwealth; the Puerto Rico Sales Tax Financing Corporation (better known as “COFINA”); the Puerto Rico Highway and Transportation Authority (“PRHTA”); the Government of Puerto Rico Employees Retirement System (“ERS”); and, the Puerto Rico Electric Power Authority (“PREPA”). Also, on May 13, 2017, the Commonwealth’s fiscal Plan (“Fiscal Plan”) was certified by the Oversight Board. On September 20, 2017, Hurricane Maria made landfall as a Category 4 storm. The widespread destruction caused significant damage to the Commonwealth’s economy. As a result, the Commonwealth’s Fiscal Plan was revised and the Oversight Board certified the “Revised Fiscal Plan” on June 29, 2018. The TCJA is expected to have a significant impact on U.S. businesses operating in Puerto Rico through the controlled foreign corporation (“CFC”) model, which is a common setup among manufacturing companies with local operations. The TCJA’s modifications to the Code’s international tax system, which includes current income inclusion of global intangible low-taxed income and a base erosion minimum tax, increase U.S. businesses’ tax liability with respect to income derived from local operations and may further deteriorate the already compromised economy. Puerto Rico’s lobbying efforts in the United States Congress to minimize the impact of the tax reform legislation are expected to continue, but the outcome of such effort is uncertain. On July of 2018, the Oversight Board entered into a preliminary restructuring support agreement and term sheet with PREPA, the Puerto Rico Fiscal Agency and Advisory Authority, and certain PREPA bondholders, to restructure PREPA’s debt. On October 19, 2018, the Oversight Board announced an agreement reached with certain COFINA creditors and the Commonwealth (“COFINA Agreement”). The Oversight Board also filed in Court a plan of adjustment for COFINA that reflects agreements reached with COFINA creditors (“COFINA Plan”). The COFINA Plan provides for: (i) the restructuring of the COFINA debt; (ii) a $17.5 billion reduction in future debt service payments; and, (iii) the resolution of the COFINA-Commonwealth dispute regarding ownership of the sales and use tax. On October 23, 2018, the Oversight Board certified another revised Fiscal Plan for the Commonwealth (“October 2018 Fiscal Plan”). According to the October 2018 Fiscal Plan, the Commonwealth’s GNP and population declined by 8% and 5%, respectively, following Hurricane Maria. Further, according to the October 2018 Fiscal Plan, over $80 billion in United States federal funding will be awarded and invested in the recovery and reconstruction of Puerto Rico following Hurricane Maria and the United States federal government has approved an additional $200 billion in community disaster loans to municipalities. On November 29, 2018, the Government Development Bank of Puerto Rico (“GDB”) Debt Recovery Authority issued over $2.5 billion of 7.5% GDB Debt Recovery Authority Bonds to certain GDB bondholders. These new bonds are secured by a statutory lien on certain GDB assets transferred to the GDB Debt Recovery Authority. The Government Development Bank Restructuring Act provides for the restructuring of the GDB debt as well as for the winding down of the GDB pursuant to Title VI of PROMESA. On December 10, 2018, the Governor signed Act No. 257 (“Act 257”) to amend certain provisions of the Puerto Rico Internal Revenue Code of 2011, as amended, applicable to individuals, corporations and partnerships, as well as certain sales and use tax provisions. Under PROMESA, the Governor must provide to the Oversight Board cost estimates and a certification that the law does not adversely affect the Commonwealth’s compliance with the October 2018 Fiscal Plan. As of December 2018, the Oversight Board concluded that the compliance certification failed to provide an adequate estimation of the fiscal impact of some of the provisions of Act 257. Therefore, at this time, the implementation of certain provisions of Act 257 is uncertain.

INVESTMENT LIMITATIONS

Fundamental Investment Limitations

Each Fund is subject to the investment limitations enumerated in this section, which may be changed with respect to a particular Fund only by a vote of the holders of a majority of such Fund’s outstanding shares. As used in this SAI and in the Prospectuses, a “majority of the outstanding shares” of a Fund means the lesser of (a) 67% of the shares of the particular Fund represented at a meeting at which the holders of more than 50% of the outstanding shares of such Fund are present in person or by proxy, or (b) more than 50% of the outstanding shares of such Fund.

With respect to all of the Funds, except as noted, each Fund may not:

(1)

With respect to 75% of its total assets, purchase securities of an issuer (other than the U.S. Government, its agencies, instrumentalities or authorities or repurchase agreements collateralized by U.S. Government securities and other investment companies), if: (a) such purchase would, at the time, cause more than 5% of the Fund’s total assets taken at market value to be invested in the securities of such issuer; or (b) such purchase would, at the time, result in more than 10% of the outstanding voting securities of such issuer being held by the Fund.

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(2)

Purchase such securities if, after giving effect to the purchase, more than 25% of its total assets would be invested in the securities of one or more issuers conducting their principal business activities in the same industry (excluding the U.S. Government or its agencies or instrumentalities).

(3)

Borrow money, except (i) in amounts not to exceed one-third of the value of the Fund’s total assets (including the amount borrowed) from banks, and (ii) up to an additional 5% of its total assets from banks or other lenders for temporary purposes. For purposes of this restriction, (a) investment techniques such as margin purchases, short sales, forward commitments, and roll transactions, (b) investments in instruments such as futures contracts, swaps, and options and (c) short-term credits extended in connection with trade clearance and settlement, shall not constitute borrowing.

(4)

Issue “senior securities” in contravention of the 1940 Act. Activities permitted by SEC exemptive orders or staff interpretations of the SEC shall not be deemed to be prohibited by this restriction.

(5)

Underwrite the securities issued by other persons, except to the extent that, in connection with the disposition of portfolio securities, the Fund may be deemed to be an underwriter under applicable law.

(6)

Purchase or sell real estate, except that the Fund may (i) acquire or lease office space for its own use, (ii) invest in securities of issuers that invest in real estate or interests therein, (iii) invest in mortgage-related securities and other securities that are secured by real estate or interests therein, and (iv) hold and sell real estate acquired by the Fund as a result of the ownership of securities.

(7)

Purchase or sell commodities or commodity contracts, except the Fund may purchase and sell derivatives (including, but not limited to, options, futures contracts and options on futures contracts) whose value is tied to the value of a financial index or a financial instrument or other asset (including, but not limited to, securities indexes, interest rates, securities, currencies and physical commodities).

(8)

Lend securities or make any other loans if, as a result, more than 331∕3% of its total assets would be lent to other parties, except that the Fund may purchase debt securities, may enter into repurchase agreements and may acquire loans, loan participations and assignments (both funded and unfunded) and other forms of debt instruments.

(9)

Change its 80% investment policy. (This restriction applies only to the Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund, and Seix Short-Term Municipal Bond Fund.)

With respect to investment limitation (2) above, when selecting investments for a Fund, the Subadviser will consider the concentration policy of any exchange-traded funds (“ETFs”), mutual funds and closed-end funds. For purposes of determining the amount of each Fund’s assets invested in the securities of one or more issuers conducting their principal business activities in the same industry or group of related industries, the Funds will look through to the securities held by an affiliated mutual fund in which the Fund invests; however, as of the date of this SAI the Funds will not look through to the securities held by any ETFs, unaffiliated mutual funds and/or closed-end funds in which the Fund invests.

Except with respect to investment restriction (3) above, if any percentage restriction described above for a Fund is adhered to at the time of investment, a subsequent increase or decrease in the percentage resulting from a change in the value of the Fund’s assets will not constitute a violation of the restriction. With respect to investment restriction (3), in the event that asset coverage for all borrowings shall at any time fall below 300 per centum, the Fund shall, within three days thereafter (not including Sundays and holidays) or such longer period as the SEC may prescribe by rules and regulations, reduce the amount of its borrowings to an extent that the asset coverage of such borrowings shall be at least 300 per centum.

Section 12 of the 1940 Act limits the percentage of shares of other mutual funds that a fund may purchase. The Funds have obtained exemptive relief from the SEC to permit them to invest in affiliated and unaffiliated funds, including ETFs, beyond the statutory limitations, subject to certain conditions. Many ETFs also have obtained exemptive relief from the SEC to permit unaffiliated funds to invest in the ETF’s shares beyond these statutory limitations, subject to certain conditions. Each Fund may rely on the various exemptive orders to invest in shares of other mutual funds, including ETFs as applicable.

Non-Fundamental Investment Limitations

The Board has adopted the following additional investment restrictions for the Funds. These restrictions are operating policies of the Fund and may be changed by the Trustees without shareholder approval.

With respect to all Funds, except as noted, each Fund may not:

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(a)

With respect to each Fund that is subject to Rule 35d-1 under the 1940 Act, except the Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund and Seix Short-Term Municipal Bond Fund, make any change to a Fund’s investment policy of investing at least 80% of such Fund’s net assets in a particular type or category of securities without providing at least 60 days prior written notice to shareholders.

(b)

Purchase or hold illiquid securities (i.e., securities that cannot be disposed of for their approximate carrying value in seven days or less (which term includes repurchase agreements and time deposits maturing in more than seven days)) if, in the aggregate, more than 15% of its net assets would be invested in illiquid securities.

MANAGEMENT OF THE TRUST

Trustees and Officers

The Board is responsible for the overall supervision of the Trust, including establishing the Funds’ policies and general supervision and review of their investment activities, and performs the various duties imposed on Trustees by the 1940 Act and Delaware statutory trust law. The officers, who administer the Funds’ daily operations, are appointed by the Board and generally are employees of the Administrator or one of its affiliates. The current Trustees and officers of the Trust performing a policy-making function and their affiliations and principal occupations for the past five years are set forth below. The Trust has no employees.

Unless otherwise noted, each Trustee of the Trust also serves as a Trustee of other Virtus Funds and the address of each individual is One Financial Plaza, Hartford, CT 06103. There is no stated term of office for Trustees or officers of the Trust.

Independent Trustees *

Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Brown, Thomas J.

YOB: 1945

Since

2017

Retired.

Trustee (since 2016), Virtus Mutual Fund Family (53 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2011), Virtus Variable Insurance Trust (8 portfolios); Director (since 2010), D’Youville Senior Care Center; and Director (since 2005), VALIC Company Funds (49 portfolios).

Burke, Donald C.

YOB: 1960

Since

2017

Retired.

Trustee (since 2016), Virtus Mutual Fund Family (53 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Director (since 2014), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); Director, Avista Corp. (energy company) (since 2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); and Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010).

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Harris, Sidney E.

YOB: 1949

Since 2017

Professor and Dean Emeritus (since April 2015), Professor (1997 to 2014), Dean (1997 to 2004), J. Mack Robinson College of Business, Georgia State University.

Trustee (since 2019), Mutual Fund Directors Forum; Trustee (since 2017), Virtus Mutual Fund Family (53 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2013), KIPP Metro Atlanta; Trustee (since 1999) Total System Services, Inc.; Trustee (2004 to 2017), RidgeWorth Funds; Trustee (since 2012), International University of the Grand Bassam Foundation; and Trustee (2011 to 2015), Genspring Family Offices, LLC.

Mallin, John R.

YOB: 1950

Since 2017

Partner/Attorney (since 2003), McCarter & English LLP (law firm) Real Property Practice Group; and Member (since 2014), Counselors of Real Estate.

Trustee (since 2016), Virtus Mutual Fund Family (53 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Director (since 2013), Horizons, Inc. (non-profit); and Trustee (since 1999), Virtus Variable Insurance Trust (8 portfolios).

McClellan, Hassell H.

YOB: 1945

Since 2017

Retired (since 2013). Professor (1984 to 2013), Wallace E. Carroll School of Management, Boston College.

Chairperson of the Board (since 2017) and Trustee (since 2000), John Hancock Fund Complex (collectively, 227 portfolios); Trustee (since 2016), Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2015), Virtus Mutual Fund Family (53 portfolios); Director (since 2010), Barnes Group, Inc. (diversified global components manufacturer and logistical services company); and Trustee (since 2008), Virtus Variable Insurance Trust (8 portfolios).

McDaniel, Connie D.

YOB: 1958

Since 2017

Retired (since 2013). Vice President, Chief of Internal Audit, Corporate Audit Department (2009 to 2013); Vice President Global Finance Transformation (2007 to 2009); Vice President and Controller (1999 to 2007), The Coca-Cola Company.

Trustee (since 2017), Virtus Mutual Fund Family (53 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2014), Total System Services, Inc.; and Trustee (2005 to 2017), RidgeWorth Funds.

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

McLoughlin, Philip Chairman

YOB: 1946

Since

1989

Retired.

Director and Chairman (since 2016), Virtus Total Return Fund Inc. and Virtus Global Dividend & Income Fund Inc.; Director and Chairman (since 2014) Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Trustee and Chairman (since 2011), Virtus Global Multi-Sector Income Fund; Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (8 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); Director (since 1991) and Chairman (since 2010), Lazard World Trust Fund (closed-end investment firm in Luxembourg); and Trustee (since 1989) and Chairman (since 2002), Virtus Mutual Fund Family (53 portfolios).

McNamara, Geraldine M. YOB: 1951

Since

2002

Retired.

Trustee (since 2016), Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (8 portfolios); Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); and Trustee (since 2001), Virtus Mutual Fund Family (53 portfolios).

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Oates, James M.

YOB: 1946

Since

2005

Managing Director (since 1994), Wydown Group (consulting firm).

Director (since 2016), Virtus Global Dividend & Income Fund Inc. and Virtus Total Return Fund Inc.; Trustee (since 2016), Virtus Variable Insurance Trust (8 portfolios); Director (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2011), Virtus Global Multi-Sector Income Fund; Trustee (since 2005) and Chairman (2005 to 2017), John Hancock Fund Complex (227 portfolios); Director (2002 to 2014), New Hampshire Trust Company; Chairman (2000 to 2016), Emerson Investment Management, Inc.; Non-Executive Chairman (2000 to 2014), Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services); Chairman and Director (1999 to 2014), Connecticut River Bank; Director (since 1996), Stifel Financial; and Trustee (since 1987), Virtus Mutual Fund Family (53 portfolios).

Segerson, Richard E.

YOB: 1946

Since 2005

Retired. Managing Director (1998 to 2013), Northway Management Company.

Trustee (since 2016), Virtus Alternative Solutions Trust (3 portfolios) and Virtus Variable Insurance Trust (8 portfolios); and Trustee (since 1983), Virtus Mutual Fund Family (53 portfolios).

* Those Trustees listed as “Independent Trustees” are not “interested persons” of the Trust, as that term is defined in the 1940 Act.

Interested Trustee **

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Aylward, George R.

YOB: 1964

Since

2006

Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various senior officer positions with Virtus affiliates (since 2005).

Chairman and Trustee (since 2015), Virtus ETF Trust II (1 portfolio); Director, President and Chief Executive Officer (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and President (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Director (since 2013), Virtus Global Funds, PLC (4 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2011), Virtus Global Multi-Sector Income Fund; Trustee and President (since 2006) and Executive Vice President (2004 to 2006), Virtus Mutual Fund Family (53 portfolios); and Director, President and Chief Executive Officer (since 2006), Virtus Global Dividend & Income Fund Inc. and Virtus Total Return Fund Inc.

** Mr. Aylward is an “interested person” as defined in the Investment Company Act of 1940, by reason of his position as President and Chief Executive Officer of Virtus, the ultimate parent company of the Adviser, and various positions with its affiliates including the Adviser.

Officers of the Trust Who Are Not Trustees

	Name, Address and Year of Birth			Position(s) Held with the Trust and Length of Time Served			Principal Occupation(s) During Past 5 Years
	Batchelar, Peter YOB: 1970			Senior Vice President (since 2017).			Senior Vice President, Product Development (since 2017), and Vice President, Product Development (2008 to 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2008) with Virtus affiliates; Senior Vice President (since 2017), and Vice President (2008 to 2016), Virtus Mutual Fund Family; Senior Vice President (since 2017), and Vice President (2010 to 2016), Virtus Variable Insurance Trust; and Senior Vice President (since 2017), and Vice President (2013 to 2016), Virtus Alternative Solutions Trust.

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Name, Address and Year of Birth	Position(s) Held with the Trust and Length of Time Served	Principal Occupation(s) During Past 5 Years
Bradley, W. Patrick YOB: 1972	Executive Vice President (since 2016), Senior Vice President (2013 to 2016), and Chief Financial Officer and Treasurer (since 2006).	Executive Vice President, Fund Services (since 2016), and Senior Vice President, Fund Services (2010 to 2016), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2006) with Virtus affiliates; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), and Chief Financial Officer and Treasurer (since 2004), Virtus Variable Insurance Trust; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), Chief Financial Officer and Treasurer (since 2006), Virtus Mutual Fund Family; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2012 to 2013) and Treasurer and Chief Financial Officer (since 2010), Virtus Total Return Fund Inc. and Virtus Global Dividend & Income Fund Inc.; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), and Chief Financial Officer and Treasurer (since 2011), Virtus Global Multi-Sector Income Fund; Executive Vice President (since 2016), Senior Vice President (2014 to 2016), Chief Financial Officer and Treasurer (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Vice President and Assistant Treasurer (since 2011), Duff & Phelps Global Utility Income Fund Inc.; Director (since 2013), Virtus Global Funds, PLC; and Executive Vice President (since 2016), Senior Vice President (2013 to 2016), and Chief Financial Officer and Treasurer (since 2013), Virtus Alternative Solutions Trust.
Carr, Kevin J. YOB: 1954	Senior Vice President (since 2013), Vice President (2005 to 2013), Chief Legal Officer, Counsel and Secretary (since 2005).	Vice President and Senior Counsel (2017 to Present), Senior Vice President (2009 to 2017), Vice President, Counsel and Secretary (2008 to 2009), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions (since 2005) with Virtus affiliates; Senior Vice President (since 2013), Vice President (2005 to 2013), Chief Legal Officer, Counsel and Secretary (since 2005), Virtus Mutual Fund Family; Senior Vice President (2013 to 2014), Vice President (2012 to 2013), Secretary and Chief Legal Officer (2005 to 2013), and Assistant Secretary (2013 to 2014 and since 2017), Virtus Total Return Fund Inc. and Virtus Global Dividend & Income Fund Inc.; Senior Vice President (since 2017), Assistant Secretary (since 2013), Vice President, Chief Legal Officer, Counsel and Secretary (2010 to 2013), Virtus Variable Insurance Trust; Senior Vice President (2013 to 2014), Vice President (2011 to 2013), and Assistant Secretary (since 2011), Virtus Global Multi-Sector Income Fund; Assistant Secretary (since 2015), Duff & Phelps Select Energy MLP Fund Inc.; Senior Vice President (since 2017) and Assistant Secretary (since 2013), Virtus Alternative Solutions Trust; Secretary (since 2015), ETFis Series Trust I; and Secretary (since 2015), Virtus ETF Trust II.

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Name, Address and Year of Birth	Position(s) Held with the Trust and Length of Time Served	Principal Occupation(s) During Past 5 Years
Engberg, Nancy J. YOB: 1956	Senior Vice President (since 2017), Vice President (2011 to 2017) and Chief Compliance Officer (since 2011).	Senior Vice President (since 2017), Vice President (2008 to 2017) and Chief Compliance Officer (2008 to 2011 and since 2016), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2003) with Virtus affiliates; Senior Vice President (since 2017), Vice President (2011 to 2017) and Chief Compliance Officer (since 2011), Virtus Mutual Fund Family; Senior Vice President (since 2017), Vice President (2010 to 2017) and Chief Compliance Officer (since 2011), Virtus Variable Insurance Trust; Senior Vice President (since 2017), Vice President (2011 to 2017) and Chief Compliance Officer (since 2011), Virtus Global Multi-Sector Income Fund; Senior Vice President (since 2017), Vice President (2012 to 2017) and Chief Compliance Officer (since 2012), Virtus Total Return Fund Inc. and Virtus Global Dividend & Income Fund Inc.; Senior Vice President (since 2017), Vice President (2013 to 2017) and Chief Compliance Officer (since 2013), Virtus Alternative Solutions Trust; Senior Vice President (since 2017), Vice President (2014 to 2017) and Chief Compliance Officer (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Chief Compliance Officer (since 2015), ETFis Series Trust I; and Chief Compliance Officer (since 2015), Virtus ETF Trust II.
Short, Julia R. YOB: 1972	Senior Vice President (since 2017).	Senior Vice President (since 2018), Virtus Closed-End Funds; Senior Vice President, Product Development (since 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2017), Virtus Mutual Fund Family; Senior Vice President (since 2018), Virtus Closed-End Funds; President and Chief Executive Officer, RidgeWorth Funds (2007 to 2017); and Managing Director, Product Manager, RidgeWorth Investments (2004 to 2017).
Waltman, Francis G. YOB: 1962	Executive Vice President (since 2013), Senior Vice President (2008 to 2013).	Executive Vice President, Product Development (since 2009), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions (since 2006) with Virtus affiliates; Executive Vice President (since 2013), Senior Vice President (2008 to 2013), Virtus Mutual Fund Family; Executive Vice President (since 2013), Senior Vice President (2010 to 2013), Virtus Variable Insurance Trust; Executive Vice President (since 2013), Senior Vice President (2011 to 2013), Virtus Global Multi-Sector Income Fund; Executive Vice President (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2013), Virtus Global Funds PLC; and Executive Vice President (since 2013), Virtus Alternative Solutions Trust.

Leadership Structure and the Board of Trustees

The Board is currently composed of 11 trustees, including 10 Independent Trustees. In addition to four regularly scheduled meetings per year, the Board holds special meetings either in person or via telephone to discuss specific matters that may require consideration prior to the next regular meeting. As discussed below, the Board has established several standing committees to assist the Board in performing its oversight responsibilities, and each such committee has a chairperson. The Board may also designate working groups or ad hoc committees as it deems appropriate.

The Board has appointed Mr. McLoughlin, an Independent Trustee, to serve in the role of Chairman. The Chairman’s primary role is to participate in the preparation of the agenda for meetings of the Board and the identification of information to be presented to the Board with respect to matters to be acted upon by the Board. The Chairman also presides at all meetings of the Board and between meetings generally acts as a liaison with the Trust’s service providers, officers, legal counsel, and the other Trustees. The Chairman may perform such other functions as may be requested by the Board from time to time. Except for any duties specified herein or pursuant to the Trust’s Declaration of Trust or By-laws, or as assigned by the Board, the designation of Chairman does not impose on such Independent Trustee any duties, obligations or liability that is greater than the duties, obligations or liability imposed on such person as a member of the Board, generally.

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The Board believes that this leadership structure is appropriate because it allows the Board to exercise informed and independent judgment over matters under its purview, and it allocates areas of responsibility among committees or working groups of Trustees and the full Board in a manner that enhances effective oversight. Mr. McLoughlin previously served as the Chairman and Chief Executive Officer of the company that is now Virtus; however, he is now an Independent Trustee due to (a) the fact that Virtus is no longer affiliated with The Phoenix Companies, Inc. (which was its parent company when Mr. McLoughlin retired) and (b) the passage of time. As a result of this balance, it is believed that Mr. McLoughlin has the ability to provide independent oversight of the Trust’s operations within the context of his detailed understanding of the perspective of the Adviser and the Trust’s other service providers. The Board therefore considers leadership by Mr. McLoughlin as enhancing the Board’s ability to provide effective independent oversight of the Trust’s operations and meaningful representation of the shareholders’ interests.

The Board also believes that having a super-majority of Independent Trustees is appropriate and in the best interest of the Funds’ shareholders. Nevertheless, the Board also believes that having an interested person serve on the Board brings corporate and financial viewpoints that are, in the Board’s view, crucial elements in its decision-making process. In addition, the Board believes that Mr. Aylward, who is currently the Chairman and President of the Adviser, and the President and Chief Executive Officer of Virtus, and serves in various executive roles with other affiliates of the Adviser who provide services to the Trust, provides the Board with the Adviser’s perspective in managing and sponsoring the Virtus Mutual Funds as well as the perspective of other service providers to the Trust. The leadership structure of the Board may be changed at any time and in the discretion of the Board, including in response to changes in circumstances or the characteristics of the Trust.

The Board has established several standing committees to oversee particular aspects of the Funds’ management. The members of each Committee are set forth below:

The Audit Committee

The Audit Committee is responsible for overseeing the Funds’ accounting and auditing policies and practices. The Audit Committee reviews the Funds’ financial reporting procedures, their system of internal control, the independent audit process, and the Funds’ procedures for monitoring compliance with investment restrictions and applicable laws and regulations and with the Code of Ethics. The Audit Committee is composed entirely of Independent Trustees; its members are Thomas J. Brown, Chairperson, Donald C. Burke, Connie D. McDaniel and Richard E. Segerson. The Committee met four times during the Trust’s last fiscal year.

The Compliance Committee

The Compliance Committee is responsible for overseeing the Funds’ compliance matters. The Compliance Committee oversees and reviews (1) information provided by the Funds’ officers, including the Funds’ CCO, the Funds’ investment adviser and other principal service providers, and others as appropriate; (2) the codes of ethics; (3) whistleblower reports; (4) cybersecurity programs; and (5) distribution programs. The Compliance Committee is composed entirely of Independent Trustees; its members are Hassell H. McClellan, Chairperson, Sidney E. Harris, John R. Mallin, Geraldine M. McNamara, and James M. Oates. The Committee met four times during the Trust’s last fiscal year.

The Executive Committee

The function of the Executive Committee is to serve as a delegate of the full Board, as well as act on behalf of the Board when it is not in session, subject to limitations as set by the Board. The Executive Committee is composed entirely of Independent Trustees; its members are Philip R. McLoughlin, Chairperson, Thomas J. Brown, Hassell H. McClellan and James M. Oates. The Committee met once during the Trust’s last fiscal year.

The Governance and Nominating Committee

The Governance and Nominating Committee is responsible for developing and maintaining governance principles applicable to the Funds, for nominating individuals to serve as Trustees, including as Independent Trustees, and annually evaluating the Board and Committees. The Governance and Nominating Committee is composed entirely of Independent Trustees; its members are James M. Oates, Chairperson, Philip R. McLoughlin and Geraldine M. McNamara. The Committee met four times during the Trust’s last fiscal year.

The Governance and Nominating Committee considers candidates for trusteeship and makes recommendations to the Board with respect to such candidates. There are no specific required qualifications for trusteeship. The committee considers all relevant qualifications of candidates for trusteeship, such as industry knowledge and experience, financial expertise, current employment and other board memberships, and whether the candidate would be qualified to be considered an Independent Trustee. The Board believes that having among its members a diversity of viewpoints, skills and experience and a variety of complementary skills enhances the effectiveness of the Board in its oversight role. The committee considers the qualifications of candidates for trusteeship in this context.

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The Board has adopted a policy for consideration of Trustee nominees recommended by shareholders. With regards to such policy, an individual shareholder or shareholder group submitting a nomination must hold either individually or in the aggregate for at least one full year as of the date of nomination 5% of the shares of a series of the Trust, among other qualifications and restrictions. Shareholders or shareholder groups submitting nominees must comply with all requirements set forth in the Trust’s policy for consideration of Trustee nominees recommended by shareholders and any such submission must be in writing, directed to the Trust’s secretary. Any shareholder nominee recommendations should be sent to the attention of the committee in care of the Trust’s Secretary, and should include biographical information, including business experience for the past ten years and a description of the qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to be an Independent Trustee, if applicable. Shareholder nominees for Trustee will be given the same consideration as any candidate provided the nominee meets certain minimum requirements.

Information about Each Trustee’s Qualification, Experience, Attributes or Skills

In addition to the information set forth above, the following provides further information about each Trustee’s specific experience, qualifications, attributes or skills. The information in this section should not be understood to mean that any of the Trustees is an “expert” within the meaning of the federal securities laws.

George R. Aylward

In addition to his positions with the Trust, Mr. Aylward is a Director and the President and Chief Executive Officer of Virtus, the ultimate parent company of the Adviser. He also holds various executive positions with the Adviser, certain Funds’ subadvisers, the Distributor and the Administrator to the Trust, and various of their affiliates, and previously held such positions with the former parent company of Virtus. He therefore has experience in all aspects of the development and management of registered investment companies, and the handling of various financial, staffing, regulatory and operational issues. Mr. Aylward is a certified public accountant and holds an MBA, and he also serves as an officer and director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

Thomas J. Brown

Mr. Brown, currently retired, was employed in senior business and accounting roles with financial services companies for over twenty-five years, and he has over sixteen years of experience as a director/trustee of unaffiliated funds. Mr. Brown is also a trustee of several other open-end funds managed by the Adviser.

Donald C. Burke

Mr. Burke, currently retired, has extensive experience with mutual funds, including as president and Chief Executive Officer of a major fund complex, and subsequently as an independent trustee of another major fund complex. He also has extensive knowledge of the utility industry, derived from his service on the board of a public company involved in the production, transmission and distribution of energy. He is also a director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

Sidney E. Harris

Dr. Sidney Harris has extensive knowledge of best practices in executive management, familiarity with international business practices and expertise in corporate strategy implementation, risk management, technology, asset management compliance and investments. Dr. Harris is currently Professor and Dean Emeritus at the J. Mack Robinson College of Business at Georgia State University. He has been affiliated with the J. Mack Robinson College of Business since 1997, serving as Professor (1997 to 2014) and Dean (1997 to 2004). Most recently, Dr. Harris was Professor of Computer Information Systems, Management and International Business. Prior to joining Georgia State University, Dr. Harris was Professor (1987 to 1996) and former Dean (1991 to 1996) of the Peter F. Drucker Graduate School of Management at Claremont Graduate University (currently Peter F. Drucker and Masotoshi Ito Graduate School of Management). He served as Independent Trustee of the RidgeWorth Funds Board of Trustees (2004 to 2017) and as Independent Chairman (2007 to 2017). He served as a member of the RidgeWorth Funds Governance and Nominating Committee (2004 to 2017) and Audit Committee (2006 to 2017). Dr. Harris previously served on the Board of Transamerica Investors (1995 to 2005). Dr. Harris is a Director of Total System Services, Inc. He serves on the Board of Directors of KIPP Metro Atlanta, served as Chairman of the International University of the Grand-Bassam (IUGB) Foundation (2012 to 2017), and serves on the Board of Directors of the International University of the Grand-Bassam (IUGB) Foundation (since 2012). Dr. Harris also serves as a Trustee of the Mutual Funds Directors Forum (since 2019).

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John R. Mallin

Mr. Mallin is a real estate partner and former practice group leader for the Real Property Practice Group at McCarter & English LLP. During his career, he has been involved in all aspects of real estate development and financial transactions related to real estate. Mr. Mallin also has oversight and corporate governance experience as a director, including as a chair, of non-profit entities. Mr. Mallin is also a trustee of several other open-end funds managed by the Adviser.

Hassell H. McClellan

Mr. McClellan, currently retired, has extensive business experience in advising and consulting with companies to improve the companies’ management and operations, as well as serving as a business educator at several colleges. Mr. McClellan also has over twelve years of experience as a director of unaffiliated funds. Mr. McClellan is also a trustee of several other open-end funds managed by the Adviser.

Connie D. McDaniel

Ms. McDaniel, currently retired, has extensive domestic and international business experience, particularly with respect to finance, strategic planning, risk management and risk assessment functions. She is retired from The Coca-Cola Company, where she served as Vice President and Chief of Internal Audit, Corporate Audit Department (2009 to 2013), Vice President, Global Finance Transformation (2007 to 2009), Vice President and Controller (1999 to 2007), and held various management positions (1989 to 1999). While at The Coca-Cola Company, Ms. McDaniel chaired that company’s Ethics and Compliance Committee (2009 to 2013) and developed a knowledge of corporate governance matters. Prior to The Coca-Cola Company, she was associated with Ernst & Young (1980 to 1989). Ms. McDaniel served as Independent Trustee of the RidgeWorth Funds Board of Trustees from 2005 to 2017. She was Chairman of the RidgeWorth Funds Audit Committee (2008 to 2017), designated Audit Committee Financial Expert (2007 to 2017) and a member of the RidgeWorth Funds Governance and Nominating Committee (2015 to 2017). Ms. McDaniel is also a Director of Total System Services, Inc. and currently serves as Chair of the Georgia State University Robinson College of Business Board of Advisors.

Philip R. McLoughlin

Mr. McLoughlin has an extensive legal, financial and asset management background. In 1971, he joined Phoenix Investment Partners, Ltd. (then, Phoenix Equity Planning Corp.), the predecessor of Virtus Investment Partners, Inc., as Assistant Counsel with responsibility for various compliance and legal functions. During his tenure, Mr. McLoughlin assumed responsibility for most functions in the firm's advisory, broker-dealer and fund management operations, and eventually ascended to the role of President. Mr. McLoughlin then served as General Counsel, and later Chief Investment Officer, of Phoenix Mutual Life Insurance Company, the parent company of Phoenix Investment Partners. Among other functions, he served as the senior management liaison to the boards of directors of the insurance company's mutual funds and closed-end funds, and had direct oversight responsibility for the funds' portfolio managers. In 1994, Mr. McLoughlin was named Chief Executive Officer of Phoenix Investment Partners, and continued in that position, as well as Chief Investment Officer of Phoenix Mutual Life Insurance Company, until his retirement in 2002.

Geraldine M. McNamara

Ms. McNamara was an executive at U.S. Trust Company of New York for 24 years, where she rose to the position of Managing Director. Her responsibilities at U.S. Trust included the oversight of U.S. Trust’s personal banking business. In addition to her managerial and banking experience, Ms. McNamara has experience in advising individuals on their personal financial management, which has given her an enhanced understanding of the goals and expectations that individual investors may have. Ms. McNamara is also a trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

James M. Oates

Mr. Oates was instrumental in the founding of a private global finance, portfolio management and administration company, and he has also served in executive and director roles for various types of financial services companies. As a senior officer and director of investment management companies, Mr. Oates has experience in investment management. He also previously served as chief executive officer of two banks, and holds an MBA. Mr. Oates also has experience as a director of other publicly traded companies and served for a number of years as the Chairman of the Board of a large family of mutual funds unaffiliated with the Trust. Mr. Oates is also a director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

Richard E. Segerson

Mr. Segerson has served in financial and other executive roles with various operating companies, including serving as the Chief Financial Officer, Controller and Chief Operating Officer of such entities. These roles have provided him with an understanding of financial and operational issues, as has his experience as a public accountant. Mr. Segerson also

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has over 30 years of experience serving as a trustee to various mutual funds, and he holds an MBA. Mr. Segerson also has served for a number of years as the Managing Director of a family office, providing wealth management services to individuals. This experience enhances his understanding of the perspective of individual fund shareholders. Mr. Segerson is also a trustee of several other open-end funds managed by the Adviser.

Board Oversight of Risk Management

As a registered investment company, the Trust is subject to a variety of risks, including investment risks, financial risks, compliance risks and regulatory risks. As part of its overall activities, the Board oversees the management of the Trust’s risk management structure by the Trust’s Adviser, Administrator, Distributor, Transfer Agent, officers and others. The responsibility to manage the Funds’ risk management structure on a day-to-day basis is subsumed within the other responsibilities of these parties.

The Board considers risk management issues as part of its general oversight responsibilities throughout the year at regular meetings of the Board and its committees, and within the context of any ad hoc communications with the Trust’s service providers and officers. The Trust’s Adviser, subadvisers, Distributor, Administrator, Transfer Agent, officers and legal counsel prepare regular reports to the Board that address certain investment, valuation, compliance and other matters, and the Board as a whole or its committees may also receive special written reports or presentations on a variety of risk issues at the request of the Board, a committee, the Chairman or a senior officer.

The Board receives regular written reports describing and analyzing the investment performance of the Funds. In addition, the portfolio managers of the Funds and senior management of the Funds’ subadvisers meet with the Board periodically to discuss portfolio performance and answer the Board’s questions with respect to portfolio strategies and risks. To the extent that a Fund changes a primary investment strategy, the Board generally is consulted in advance with respect to such change.

The Board receives regular written reports from the Trust’s Chief Financial Officer that enable the Board to monitor the number of fair valued securities in the Funds’ portfolios, the reasons for the fair valuation and the methodology used to arrive at the fair value. Such reports also include information concerning illiquid securities within the Funds’ portfolios. The Board and/or the Audit Committee may also review valuation procedures and pricing results with the Funds’ independent auditors in connection with the review of the results of the audit of the Funds’ year-end financial statements.

The Board also receives regular compliance reports prepared by the compliance staff of the Adviser and meets regularly with the Trust’s CCO to discuss compliance issues, including compliance risks. As required under applicable rules, the Independent Trustees meet regularly in executive session with the CCO, and the CCO prepares and presents an annual written compliance report to the Board. The CCO, as well as the compliance staff of the Adviser and Virtus, provide the Board with reports on their examinations of functions and processes within the Adviser and the subadvisers that affect the Funds. The Board also adopts compliance policies and procedures for the Trust and approves such procedures for the Trust’s service providers. The compliance policies and procedures are specifically designed to detect and prevent violations of the federal securities laws.

In its annual review of the Funds’ advisory, subadvisory and distribution agreements, the Board reviews information provided by the Adviser, the subadvisers and the Distributor relating to their operational capabilities, financial conditions and resources. The Board may also discuss particular risks that are not addressed in its regular reports and processes.

The Board recognizes that it is not possible to identify all of the risks that may affect the Funds or to develop processes and controls to eliminate or mitigate their occurrence or effects. The Board periodically reviews the effectiveness of its oversight of the Funds and the other funds in the Virtus Mutual Funds family, and the processes and controls in place to limit identified risks. The Board may, at any time and in its discretion, change the manner in which it conducts its risk oversight role.

Trustees’ Fund Holdings

As of December 31, 2018, the Trustees beneficially owned shares of the Funds as set forth in the table below.

Independent Trustees			Dollar Range of Equity Securities in a Fund of the Trust			Aggregate Dollar Range of Trustee Ownership in all Funds Overseen by Trustee in Family of Investment Companies *
Thomas J Brown			Ceredex Mid-Cap Value Equity Fund – $10,001-$50,000			Over $100,000

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Independent Trustees	Dollar Range of Equity Securities in a Fund of the Trust	Aggregate Dollar Range of Trustee Ownership in all Funds Overseen by Trustee in Family of Investment Companies *
Donald C. Burke	Ceredex Large-Cap Value Equity Fund – $1-$10,000 Ceredex Mid-Cap Value Equity Fund – $1-$10,000 Ceredex Small-Cap Value Equity Fund – $1-$10,000 Seix Floating Rate High Income Fund – $1-$10,000 Seix High Income Fund – $1-$10,000 Seix High Yield Bond Fund – $1-$10,000 Seix Investment Grade Tax-Exempt Bond Fund – $1-$10,000 Seix Total Return Bond Fund – $1-$10,000 Seix U.S. Government Securities Ultra-Short Bond Fund – $1-$10,000 WCM International Equity Fund – $1-$10,000 Zevenbergen Innovative Growth Stock Fund – $1-$10,000	Over $100,000
Sidney E. Harris	Seix Ultra-Short Bond Fund – $1-$10,000 WCM International Equity Fund – $10,001-$50,000	Over $100,000
John R. Mallin	None	Over $100,000
Hassell H. McClellan	None	None
Connie D. McDaniel	Ceredex Large-Cap Value Fund – $10,001-$50,000 Ceredex Mid-Cap Value Equity Fund – $50,001-$100,000 Ceredex Small-Cap Value Equity Fund – $10,001-$50,000 Seix Floating Rate High Income Fund – $10,001-$50,000 Seix High Yield Bond Fund – $50,001-$100,000 Silvant Large-Cap Growth Fund – $10,001-$50,000 Zevenbergen Innovative Growth Stock Fund – $50,001-$100,000	Over $100,000
Philip McLoughlin	None	Over $100,000
Geraldine M. McNamara	Ceredex Large-Cap Value Fund – $10,001-$50,000	Over $100,000
James M. Oates	Ceredex Mid-Cap Value Equity Fund – Over $100,000	Over $100,000
Richard E. Segerson	None	Over $100,000

Holdings exclude any exposure through the Deferred Compensation Plan, which may be counted towards the Trustee Ownership Policy but are not considered ownership for any other purpose.

Interested Trustee
George R. Aylward			Ceredex Mid-Cap Value Equity Fund – $50,001-$100,000			Over $100,000

As of April 3, 2019, the Trustees and officers as a group owned less than 1% of the then outstanding shares of any of the Funds.

Trustee Compensation

Trustees who are not employed by the Adviser or its affiliates receive an annual retainer and fees and expenses for attendance at Board and Committee meetings. Officers and employees of the Adviser of the Funds who are interested persons are compensated for their services by the Adviser of the Funds, or an affiliate of the Adviser of the Funds, and receive no compensation from the Funds. The Trust does not have any retirement plan for its Trustees.

For the Trust’s fiscal year ended December 31, 2018, the current Trustees received the following compensation:

	Aggregate Compensation from Trust	Total Compensation From Trust and Fund Complex Paid to Trustees
Independent Trustees
Thomas J. Brown	$112,418	$315,000 (70 funds)
Donald C. Burke	$99,927	$372,000 (74 funds)
Sidney E. Harris	$114,203	$320,000 (70 funds)
John R. Mallin	$99,927	$280,000 (70 funds)
Hassell H. McClellan	$123,125	$345,000 (70 funds)
Connie D. McDaniel	$99,927	$280,000 (70 funds)
Philip R. McLoughlin	$174,873	$736,000 (78 funds)

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	Aggregate Compensation from Trust	Total Compensation From Trust and Fund Complex Paid to Trustees
Geraldine M. McNamara	$114,203	$412,000 (74 funds)
James M. Oates	$107,065	$437,500 (74 funds)
Richard E. Segerson	$99,927	$280,000 (70 funds)
Interested Trustee
George R. Aylward	None	None

A deferred compensation plan is available to the Trustees. Neither the Trust nor any affiliates provide additional compensation with respect to this deferred compensation plan. Under this deferred compensation plan, the following trustees have deferred compensation in 2018 as follows:

Mr. Brown — $84,314

Mr. Harris — $11,420

Mr. Mallin — $99,927

Mr. McClellan — $43,094

Mr. McLoughlin — $43,718

Sales Loads

The Trust’s Trustees are permitted to invest in Class I shares of each Fund without initial or subsequent minimum investment requirements. Class I shares do not carry a sales load.

Code of Ethics

The Trust, its Adviser, subadvisers and Distributor have each adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940 Act. Personnel subject to the Codes of Ethics may purchase and sell securities for their personal accounts, including securities that may be purchased, sold or held by the Funds, subject to certain restrictions and conditions. Generally, personal securities transactions are subject to preclearance procedures, reporting requirements and holding period rules. The Codes also restrict personal securities transactions in private placements, initial public offerings and securities in which a Fund has a pending order. The Trust has also adopted a Code of Ethics for Chief Executive and Senior Financial Officers as required by Section 406 of the Sarbanes-Oxley Act of 2002.

Proxy Voting Policies

The Trust has adopted a Policy Regarding Proxy Voting (the "Policy") stating the Trust’s intention for the Funds to exercise stock ownership rights with respect to portfolio securities in a manner that is reasonably anticipated to further the best economic interests of shareholders of the Funds. The Funds or their voting delegates will endeavor to analyze and vote all proxies that are likely to have financial implications, and where appropriate, to participate in corporate governance, shareholder proposals, management communications and legal proceedings. The Funds or their voting delegates must also identify potential or actual conflicts of interest in voting proxies and must address any such conflict of interest in accordance with the Policy.

In the absence of a specific direction to the contrary from the Board, the Adviser or the subadviser that is managing a Fund is responsible for voting proxies for such Fund, or for delegating such responsibility to a qualified, independent organization engaged by the Adviser or respective subadviser to vote proxies on its behalf. The applicable voting party will vote proxies in accordance with the Policy or its own policies and procedures, which must be reasonably designed to further the best economic interests of the affected Fund shareholders. Because the Policy and the applicable voting party’s policies and procedures used to vote proxies for the Funds both are designed to further the best economic interests of the affected Fund shareholders, they are not expected to conflict with one another although the types of factors considered by the applicable voting party under its own policies and procedures may be in addition to or different from the ones listed below for the Policy.

The Policy specifies the types of factors to be considered when analyzing and voting proxies on certain issues when voting in accordance with the Policy, including, but not limited to:

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Anti-takeover measures – the overall long-term financial performance of the target company relative to its industry competition.

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Corporate Governance Matters – tax and economic benefits of changes in the state of incorporation; dilution or improved accountability associated with changes in capital structure.

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Contested elections – the qualifications of all nominees; independence and attendance record of board and key committee members; entrenchment devices in place that may reduce accountability.

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Stock Option and Other Management Compensation Issues—executive pay and spending on perquisites, particularly in conjunction with sub-par performance and employee layoffs.

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Shareholder proposals – whether the proposal is likely to enhance or protect shareholder value; whether identified issues are more appropriately or effectively addressed by legal or regulatory changes; whether the issuer has already appropriately addressed the identified issues; whether the proposal is unduly burdensome or prescriptive; whether the issuer’s existing approach to the identified issues is comparable to industry best practice.

The Funds and their voting delegates seek to avoid actual or perceived conflicts of interest of Fund shareholders, on the one hand, and those of the Adviser, subadviser, other voting delegate, Distributor, or any affiliated person of the Funds, on the other hand.

Depending on the type and materiality, the Board or its delegates may take the following actions, among others, in addressing any material conflicts of interest that arise with respect to voting (or directing voting delegates to vote): (i) rely on the recommendations of an established, independent third party proxy voting vendor; (ii) vote pursuant to the recommendation of the proposing delegate; (iii) abstain; (iv) where two or more delegates provide conflicting requests, vote shares in proportion to the assets under management of each proposing delegate; (v) vote shares in the same proportion as the vote of all other shareholders of such issuer; or (vi) the Adviser may vote proxies where the subadviser has a direct conflict of interest. The Policy requires each Adviser/subadviser that is a voting delegate to notify the Chief Compliance Officer of the Trust (or, in the case of a subadviser, the Chief Compliance Officer of the Adviser) of any actual or potential conflict of interest that is identified, and provide a recommended course of action for protecting the best interests of the affected Fund’s shareholders. No Adviser/subadviser or other voting delegate may waive any conflict of interest or vote any conflicted proxies without the prior written approval of the Board (or the Executive Committee thereof) or the Chief Compliance Officer of the Trust.

The Policy further imposes certain record-keeping and reporting requirements on each Adviser/subadviser or other voting delegate.

Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available, no later than August 31 of each year, free of charge by calling, toll-free, 800.243.1574, or on the SEC’s Web site at www.sec.gov .

Ceredex Funds

Ceredex has a Proxy Committee (“Proxy Committee”) that is responsible for establishing policies and procedures designed to enable Ceredex to ethically and effectively discharge its fiduciary obligation to vote all applicable proxies on behalf of all discretionary client accounts and funds. Annually (or more often as needed), the Proxy Committee will review, reaffirm and/or amend guidelines, strategies and proxy policies for all client accounts, funds and product lines.

Ceredex votes all shares per the Ceredex Proxy Guidelines unless the client chooses custom guidelines. In the case that a ballot item is not covered under the policy or is coded as case-by-case in Ceredex’s guidelines, a research analyst or portfolio manager will review the available information and will utilize such information, along with his knowledge of the company, to make a vote recommendation to the Proxy Committee. The Proxy Committee members consider the information and recommendation, and will then vote on that ballot item. As reflected in the Ceredex Proxy Policy, the Proxy Committee will affirmatively vote proxies for proposals that it deems to be in the best economic interest of its clients, as a whole, as shareholders and beneficiaries of those actions.

Due to Ceredex’s diverse client base, product lines, and affiliations, Ceredex’s Proxy Committee may determine a potential conflict exists in connection with a proxy vote based on applicable SEC guidelines. For these situations, the Committee will determine how to address the conflict and that may include voting strictly in accordance with policy and/or allowing the third party service provider to vote in accordance with its guidelines. Additional conflicts of interests will be evaluated by the Committee on an individual basis. Although Ceredex does its best to alleviate or diffuse known conflicts, there is no guarantee that all situations have been or will be mitigated through proxy policy incorporation.

Ceredex utilizes the services of Institutional Shareholder Services, Inc. as its agent in the provision of certain administrative, clerical, functional recordkeeping, and support services related to Ceredex’s proxy voting processes/procedures, which include, but are not limited to:

The collection of proxy material from its clients’ custodians;

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The facilitation of proxy voting, reconciliation, and disclosure, in accordance with Ceredex’s Proxy Policy and the Proxy Committee’s direction; and

Recordkeeping and voting record retention.

https://www.ceredexvalue.com/legal-compliance/proxy-voting or may obtain a copy of the complete Proxy Guidelines by contacting Ceredex’s Proxy Voting Committee Administrator at (860) 263-4731 or proxyoperations@virtus.com .

Seix Funds

Seix has a Proxy Committee (“Proxy Committee”) that is responsible for establishing policies and procedures designed to enable Seix to ethically and effectively discharge its fiduciary obligation to vote all applicable proxies on behalf of all discretionary client accounts and funds. Annually (or more often as needed), the Proxy Committee will review, reaffirm and/or amend guidelines, strategies and proxy policies for all client accounts, funds and product lines.

Seix votes any proxies per the Seix Proxy Guidelines unless the client chooses custom guidelines. In the case that a ballot item is not covered under the policy or is coded as case-by-case in Seix’s guidelines, a research analyst or portfolio manager will review the available information and will utilize such information, along with his knowledge of the company, to make a vote recommendation to the Proxy Committee. The Proxy Committee members consider the information and recommendation, and will then vote on that ballot item. As reflected in the Seix Proxy Policy, the Proxy Committee will affirmatively vote proxies for proposals that it deems to be in the best economic interest of its clients, as a whole, as shareholders and beneficiaries of those actions.

Due to Seix’s diverse client base, product lines, and affiliations, Seix’s Proxy Committee may determine a potential conflict exists in connection with a proxy vote based on applicable SEC guidelines. In such instances, Seix’s Proxy Committee will review the potential conflict to determine if it is material. Examples of material conflicts of interest which may arise could include those where the shares to be voted involve:

An issuer having substantial and numerous banking, investment, or other financial relationships with Seix; and

A senior officer of Seix serving on the board of a publicly held company.

Although Seix utilizes a pre-determined proxy voting policy, occasions may arise in which a conflict of interest could be deemed to be material. In this case, Seix’s Proxy Committee will determine the most fair and reasonable procedure to be followed in order to properly address all conflict concerns. The Proxy Committee may retain an independent fiduciary to vote the securities. Although Seix does its best to alleviate or diffuse known conflicts, there is no guarantee that all situations have been or will be mitigated through proxy policy incorporation.

Seix utilizes the services of Institutional Shareholder Services, Inc. as its agent in the provision of certain administrative, clerical, functional recordkeeping, and support services related to Seix’s proxy voting processes/procedures, which include, but are not limited to:

The collection of proxy material from its clients’ custodians;

The facilitation of proxy voting, reconciliation, and disclosure, in accordance with Seix’s Proxy Policy and the Proxy Committee’s direction; and

Recordkeeping and voting record retention.

Shareholders may view the Seix complete Proxy Policy at http://www.seixadvisors.com/ legal-privacy-policy#proxy-voting-policies or may obtain a copy of the complete Proxy Guidelines by contacting Seix’s Chief Compliance Officer at One Maynard Drive, Suite 3200, Park Ridge, NJ 07656 or (201) 391-0300.

Silvant Fund s

Silvant has a Proxy Committee (“Proxy Committee”) that is responsible for establishing policies and procedures designed to enable Silvant to ethically and effectively discharge its fiduciary obligation to vote all applicable proxies on behalf of all discretionary client accounts and funds. Annually (or more often as needed), the Proxy Committee will review, reaffirm and/or amend guidelines, strategies and proxy policies for all client accounts, funds and product lines.

Silvant votes all shares per the Silvant Proxy Guidelines unless the client chooses custom guidelines. In the case that a ballot item is not covered under the policy or is coded as case-by-case in Silvant’s guidelines, a research analyst or portfolio manager will review the available information and will utilize such information, along with his knowledge of the company, to make a vote recommendation to the Proxy Committee. The Proxy Committee members consider the information and recommendation, and will then vote on that ballot item. As reflected in the Silvant Proxy Policy, the Proxy Committee will affirmatively vote proxies for proposals that it deems to be in the best economic interest of its clients, as a whole, as shareholders and beneficiaries of those actions.

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Due to Silvant’s diverse client base, product lines, and affiliations, Silvant’s Proxy Committee may determine a potential conflict exists in connection with a proxy vote based on applicable SEC guidelines. For these situations, the Committee will determine how to address the conflict and that may include voting strictly in accordance with policy and/or allowing the third party service provider to vote in accordance with its guidelines. Additional conflicts of interests will be evaluated by the Committee on an individual basis. Although Silvant does its best to alleviate or diffuse known conflicts, there is no guarantee that all situations have been or will be mitigated through proxy policy incorporation.

Silvant utilizes the services of Institutional Shareholder Services, Inc. as its agent in the provision of certain administrative, clerical, functional recordkeeping, and support services related to Silvant’s proxy voting processes/procedures, which include, but are not limited to:

The collection of proxy material from its clients’ custodians;

The facilitation of proxy voting, reconciliation, and disclosure, in accordance with Silvant’s Proxy Policy and the Proxy Committee’s direction; and

Shareholders may view Silvant’s complete Proxy Policy at https://www.silvantcapital.com/legal-compliance or may obtain a copy of the complete Proxy Guidelines by contacting Silvant’s Proxy Voting Committee Administrator at (860) 263-4731 or proxyoperations@virtus.com.

WCM International Equity Fund

WCM has written proxy voting policies and procedures as required by Advisers Act Rule 206(4)-6. Under these policies and procedures, WCM votes proxies relating to equity portfolio securities in the best economic interests of clients, unless the client contract specifies that WCM will not vote. WCM believes that its clients’ best economic interest with regards to proxy voting is best served by engaging an independent firm that specializes in researching companies and their management for the purpose of increasing Investors potential financial gain through voting proxies. WCM has therefore engaged and adopted the U.S. Policy, International Policy and Investment Manager Policy of Glass Lewis. In limited circumstances, WCM may choose to vote a proxy against the recommendation of Glass Lewis, if WCM believes such vote is in the best economic interest of its clients. In such cases, this decision will be made by WCM’s Investment Strategy Group (ISG) who will maintain documentation to support WCM’s decision.

WCM acknowledges its responsibility for identifying material conflicts of interest relating to voting proxies. When a material conflict of interest between WCM’s interests and its clients’ interests appears to exist, WCM will either (1) obtain a client’s consent to how the ISG will vote the proxy; or (2) vote in accordance with Glass Lewis’s recommendation. In the event that a conflict of interest arises between Glass Lewis or the proxy issuer and a client of WCM, WCM will evaluate the circumstances and either (1) elevate the decision to the ISG who will make a determination as to what would be in the client’s best interest; (2) if practical, notify affected clients of the conflict of interest and seek a waiver of the conflict; or (3) if agreed upon in writing with the clients, forward the proxies to affected clients allowing them to vote their own proxies.

Shareholders may obtain copies of WCM’s written proxy voting policies and procedures by contacting WCM at 281 Brooks Street, Laguna Beach, CA 92651, or (949) 380-0200.

Zevenbergen Innovative Growth Stock Fund

Zevenbergen maintains written Proxy Voting Policy and Proxy Voting Guidelines, which are used to determine how to vote. The following are key guiding principles of Zevenbergen’s Proxy Voting Policy:

•

Consider only the best interests of the fiduciary accounts’ beneficiaries.

•

Consider economic and ethical implications in determining the best interests of the beneficiaries.

•

Base the decision on how to vote using reasonable skill and care in determining the issues involved.

•

Vote proxies at the written request of a client (as may be allowed), should their specific choice of votes differ from the way Zevenbergen would vote under its own Proxy Voting Guidelines.

•

Resolve material conflicts of interest in the best interest of clients.

•

Vote on every proxy issue.

•

Make every effort to vote proxies for all shares unless voting responsibility has been retained by the client or securities are on loan.

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The policy also outlines procedures on how Zevenbergen identifies and deals with conflicts of interest to include following an independent third-party’s advice on voting proxy issues, as well as required recordkeeping of proxy voting history for clients. Any client may elect to retain proxy voting authority.

A copy of Zevenbergen’s Proxy Voting Policy and Proxy Voting Guidelines may be obtained by contacting Zevenbergen at 601 Union Street, Suite 4600 Seattle, WA 98101, or (206) 682-8469.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of April 3, 2019, the persons who owned of record, or were known by the Trust to own beneficially, 5% or more of the outstanding shares of any class, or 25% or more of the outstanding shares of all classes, of the Funds included in this SAI are shown in Appendix B — Control Persons and Principal Shareholders.

INVESTMENT ADVISORY AND OTHER SERVICES

Investment Adviser

The investment adviser to each of the Funds is Virtus Fund Advisers, LLC (formerly, RidgeWorth Capital Management LLC), located at 3333 Piedmont Road, NE, Suite 1500, Atlanta, Georgia 30305 and One Financial Plaza, Hartford, Connecticut 06103. The Adviser, an indirect, wholly-owned subsidiary of Virtus, is a professional investment management firm registered with the SEC. As of December 31, 2018, the Adviser had approximately $30.3 billion in assets under management.

Investment Advisory Agreement and Expense Limitation Agreement

The investment advisory agreement, approved by the Board, provides that the Trust will bear all costs and expenses (other than those specifically referred to as being borne by the Adviser) incurred in the operation of the Trust. Such expenses include, but shall not be limited to, all expenses incurred in the operation of the Trust and any public offering of its shares, including, among others, leverage expenses, acquired fund fees and expenses, interest, taxes, brokerage fees and commissions, fees of Trustees who are not employees of the Adviser, Virtus or any of its affiliates, expenses of Trustees, and shareholders’ meetings, expenses of printing and mailing proxy soliciting material, expenses of the insurance premiums for fidelity and other coverage, expenses of the repurchase and redemption of shares, expenses of the issue and sale of shares (to the extent not borne by VP Distributors under its agreement with the Trust), association membership dues, charges of custodians, transfer agents, dividend disbursing agents and financial agents, and bookkeeping, auditing and legal expenses. The Trust will also pay the fees and bear the expense of registering and maintaining the registration of the Trust and its shares with the SEC and registering or qualifying its shares under state or other securities laws and the expense of preparing and mailing prospectuses and reports to shareholders. If authorized by the Board, the Trust will also pay for extraordinary expenses and expenses of a non-recurring nature which may include, but shall not be limited to, the reasonable cost of any reorganization or acquisition of assets and the cost of legal proceedings to which the Trust is a party.

Each Fund will pay expenses incurred in its own operation and will also pay a portion of the Trust’s general administration expenses allocated on the basis of the asset values of the respective Funds.

For managing, or directing the management of, the investments of each fund, the Adviser is entitled to a fee, payable monthly, at the following annual rates based on each Fund’s average daily net assets:

Fund			Investment Advisory Fee
Ceredex Large-Cap Value Equity Fund			0.70%
Ceredex Mid-Cap Value Equity Fund			0.75%
Ceredex Small-Cap Value Equity Fund			0.85%
Seix Core Bond Fund			0.25%
Seix Corporate Bond Fund			0.40%
Seix Floating Rate High Income Fund			0.45%
Seix High Grade Municipal Bond Fund			0.50%
Seix High Income Fund			0.55%
Seix High Yield Fund			0.45%
Seix Investment Grade Tax-Exempt Bond Fund			0.50%
Seix Short-Term Bond Fund			0.40%
Seix Short-Term Municipal Bond Fund			0.35%
Seix Total Return Bond Fund			0.25%

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Fund			Investment Advisory Fee
Seix U.S. Government Securities Ultra-Short Bond Fund			0.20%
Seix U.S. Mortgage Fund			0.40%
Seix Ultra-Short Bond Fund			0.22%
Silvant Large-Cap Growth Stock Fund			0.70%
Silvant Small-Cap Growth Stock Fund			0.85%
WCM International Equity Fund			0.85%
Zevenbergen Innovative Growth Stock Fund			0.80%

The above fees are also subject to breakpoint discounts at the following asset levels for each Fund:

First $500 million = none — no discount from full fee

Next $500 million = 5% discount from full fee

Next $4 billion = 10% discount from full fee

Over $5 billion = 15% discount from full fee

The Adviser may waive any portion of its investment advisory fees or reimburse Fund expenses from time to time. The Adviser has contractually agreed to limit the annual operating expenses (excluding certain expenses, such as front-end or contingent deferred sales charges, taxes, leverage expenses, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, unusual or infrequently occurring expenses (such as litigation), acquired fund fees and expenses, and dividend expenses, if any) for the funds listed below through April 30, 2020, so that such expenses do not exceed, on an annualized basis, the amounts indicated in the following table (expressed as a percentage of daily net assets):

	Class A	Class C	Class I	Class R	Class R6
Ceredex Large-Cap Value Equity Fund	1.24%	1.72%	0.97%	N/A	0.72%
Ceredex Mid-Cap Value Equity Fund	1.38%	1.79%	1.08%	N/A	0.79%
Ceredex Small-Cap Value Equity Fund	1.55%	1.90%	1.24%	N/A	0.88%
Seix Core Bond Fund	0.64%	N/A	0.50%	0.91%	0.36%
Seix Corporate Bond Fund	0.95%	1.65%	0.70%	N/A	N/A
Seix Floating Rate High Income Fund	0.94%	1.52%	0.62%	N/A	0.52%
Seix High Grade Municipal Bond Fund	0.75%	N/A	0.60%	N/A	N/A
Seix High Income Fund	1.03%	N/A	0.80%	1.22%	0.64%
Seix High Yield Fund	0.82%	N/A	0.64%	1.04%	0.53%
Seix Investment Grade Tax-Exempt Bond Fund	0.75%	N/A	0.60%	N/A	N/A
Seix Short-Term Bond Fund	0.80%	1.57%	0.60%	N/A	N/A
Seix Short-Term Municipal Bond Fund	0.65%	N/A	0.48%	N/A	N/A
Seix Total Return Bond Fund	0.70%	N/A	0.46%	1.06%	0.31%
Seix U.S. Government Securities Ultra-Short Bond Fund	0.66%	N/A	0.41%	N/A	0.26%
Seix U.S. Mortgage Fund	0.90%	1.65%	0.70%	N/A	N/A
Seix Ultra-Short Bond Fund	0.65%	N/A	0.40%	N/A	N/A
Silvant Large-Cap Growth Stock Fund	1.23%	1.90%	0.97%	N/A	0.90%
Silvant Small-Cap Growth Stock Fund	1.27%	1.93%	1.15%	N/A	N/A
WCM International Equity Fund	1.42%	N/A	1.20%	N/A	1.10%
Zevenbergen Innovative Growth Stock Fund	1.25%	N/A	1.00%	N/A	N/A

Following the contractual period, if any, the Adviser may discontinue the expense caps at any time. The Adviser may recapture operating expenses reimbursed under this arrangement, for a period of three years following the date on which such reimbursement occurred, provided that the recapture does not cause the fund to exceed its expense limit in effect at the time of the waiver or reimbursement, or at the time of recapture

The Adviser also may, at its discretion, from time to time pay for other Fund expenses from its own assets, or reduce the management fee of a Fund in excess of that required. Any fee reimbursed and/or any Fund expense absorbed by the Adviser pursuant to an agreed upon expense cap shall be reimbursed by the Fund to the Adviser, if so requested by the Adviser, provided the aggregate amount of the Fund’s current operating expense for such fiscal year does not exceed the applicable limitation on Fund expenses.

The investment advisory agreement also provides that the Adviser shall not be liable to the Trust or to any shareholder of the Trust for any error of judgment or mistake of law or for any loss suffered by the Trust or by any shareholder of the

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Trust in connection with the matters to which the agreement relates, except a loss resulting from willful misfeasance, bad faith, gross negligence or reckless disregard on the part of such Adviser in the performance of its duties thereunder.

Provided it has been approved by a vote of the majority of the outstanding shares of a Fund of the Trust which is subject to its terms and conditions, the investment advisory agreement continues from year to year with respect to such Fund so long as (1) such continuance is approved at least annually by the Board or by a vote of the majority of the outstanding shares of such Fund and (2) the terms and any renewal of the agreement with respect to such Fund have been approved by the vote of a majority of the Trustees who are not parties to the agreement or interested persons, as that term is defined in the 1940 Act, of the Trust or the relevant Adviser, cast in person at a meeting called for the purpose of voting on such approval. On sixty days’ written notice and without penalty the agreement may be terminated as to the Trust or as to a Fund by the Board or by the relevant Adviser and may be terminated as to a Fund by a vote of the majority of the outstanding shares of such Fund. The Agreement automatically terminates upon its assignment (within the meaning of the 1940 Act). The agreement provides that upon its termination, or at the request of the relevant Adviser, the Trust will eliminate all reference to Virtus from its name, and will not thereafter transact business in a name using the word Virtus.

Adviser Affiliates

George Aylward, Peter Batchelar and Frank Waltman, each serve as an officer of the Trust and as an officer and/or directors of the Adviser.

Advisory Fees

For services to the Funds (or Predecessor Funds, as applicable) during the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018, the Adviser received fees shown in the table below, under the investment advisory agreements in effect. Of these totals, the Adviser received fees from each Fund (or Predecessor Fund, as applicable) as follows:

	Gross Advisory Fee ($)						Advisory Fee Waived and/or Expenses Reimbursed ($)						Net Advisory Fee ($)
Fund	3/31/2017		12/31/2017		12/31/2018		3/31/2017		12/31/2017		12/31/2018		3/31/2017		12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund		13,960,279		9,876,390		11,346,770		2,178,652		1,035,769		973,192		11,781,627		8,840,621		10,373,578
Ceredex Mid-Cap Value Equity Fund		22,594,937		15,782,899		20,061,642		243,891		75,834		201,494		22,351,046		15,707,065		19,860,148
Ceredex Small-Cap Value Equity Fund		7,779,690		5,369,196		6,045,537		2,929		18,560		35,950		7,776,761		5,350,636		6,009,587
Seix Core Bond Fund		611,681		405,278		430,828		0		129,740		213,406		611,681		275,538		217,422
Seix Corporate Bond Fund		77,773		55,241		89,092		40,902		55,482		81,710		36,871		(241 )		7,382
Seix Floating Rate High Income Fund		19,502,286		18,829,152		25,609,302		0		2,992,692		4,515,278		19,502,286		15,836,460		21,094,024
Seix High Grade Municipal Bond Fund		531,149		321,867		372,507		49,128		100,300		146,253		482,021		221,567		226,254
Seix High Income Fund		3,251,539		2,054,077		2,032,705		20,361		222,421		306,631		3,231,178		1,831,656		1,726,074
Seix High Yield Fund		2,475,941		1,661,369		1,631,684		0		304,178		442,676		2,475,941		1,357,191		1,189,008
Seix Investment Grade Tax-Exempt Bond		3,074,220		1,979,804		2,098,089		291,442		426,312		637,737		2,782,778		1,553,492		1,460,352
Seix Short-Term Bond Fund		215,396		98,485		39,068		48,049		78,168		82,744		167,347		20,317		(43,676 )
Seix Short-Term Municipal Bond Fund		117,677		86,602		86,848		57,092		79,550		101,532		60,585		7,052		(14,684 )
Seix Total Return Bond Fund		2,443,768		1,723,512		1,648,660		0		454,345		649,161		2,443,768		1,269,167		999,499
Seix U.S. Government Securities Ultra-Short Bond Fund		2,859,419		2,013,439		2,538,944		0		596,201		1,148,702		2,859,419		1,417,238		1,390,242
Seix U.S. Mortgage Fund		134,253		75,495		98,703		43,772		68,539		116,481		90,481		6,956		(17,778 )
Seix Ultra-Short Bond Fund		224,130		112,520		120,972		0		74,215		120,252		224,130		38,305		720
Silvant Large-Cap Growth Stock Fund		1,604,583		866,064		874,614		292,474		206,908		324,660		1,312,109		659,156		549,954
Silvant Small-Cap Growth Stock Fund		401,915		221,194		243,742		46,193		57,754		77,697		355,722		163,440		166,045
WCM International Equity Fund		515,041		562,296		812,011		64,503		51,076		(3,230 )		450,538		511,220		815,241
Zevenbergen Innovative Growth Stock Fund		203,727		180,528		637,408		26,011		35,729		(25,597 )		177,716		144,799		663,005

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Gross Advisory Fee ($)

Advisory Fee Waived and/or
Expenses Reimbursed ($)

Net Advisory Fee ($)

Fund

3/31/2017

12/31/2017

12/31/2018

3/31/2017

12/31/2017

12/31/2018

3/31/2017

12/31/2017

12/31/2018

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

Subadvisers and Subadvisory Agreements

The Adviser has entered into subadvisory agreements with respect to certain Funds. Each subadvisory agreement provides that the Adviser will delegate to the respective subadviser the performance of certain of its investment management services under the Investment Advisory Agreement with respect to each of the Funds for which that subadviser provides subadvisory services. Each subadviser furnishes at its own expense the office facilities and personnel necessary to perform such services. The Adviser remains responsible for the supervision and oversight of each subadviser’s performance. Each subadvisory agreement will continue in effect from year to year if specifically approved by the Trustees, including a majority of the Independent Trustees. The subadvisory fees are paid by the Adviser out of its advisory fees from the Funds.

Ceredex Value Advisors LLC — Ceredex Large-Cap Value Equity Fund, Ceredex Mid-Cap Value Equity Fund and Ceredex Small-Cap Value Equity Fund

Ceredex, an affiliate of the Adviser, is located at 301 East Pine Street, Suite 500, Orlando, Florida 32801. Ceredex is an investment adviser registered with the SEC. The firm was established in 2008 after 19 years functioning as RidgeWorth’s value style investment management team. As of December 31, 2018, Ceredex had approximately $8.0 billion in assets under management. Ceredex is a value equity asset management firm that seeks to identify catalysts that may lead to appreciation in undervalued, dividend-paying stocks.

For its services as subadviser, the Adviser pays Ceredex a fee at the rate of 50% of the net advisory fee paid by each Fund for which Ceredex acts as subadviser.

Seix Investment Advisors LLC — Seix Core Bond Fund, Seix Corporate Bond Fund, Seix Floating Rate High Income Fund, Seix High Grade Municipal Bond Fund, Seix High Income Fund, Seix High Yield Fund, Seix Investment Grade Tax-Exempt Bond Fund, Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund, Seix Total Return Bond Fund, Seix U.S. Government Securities Ultra-Short Bond Fund, Seix U.S. Mortgage Fund and Seix Ultra-Short Bond Fund

Seix, an affiliate of the Adviser, is located at One Maynard Drive, Suite 3200, Park Ridge, New Jersey 07656. Seix was established in 2008 as a wholly-owned subsidiary of RidgeWorth, and is an investment adviser registered with the SEC. Its predecessor, Seix Investment Advisors, Inc., was founded in 1992 and was independently owned until 2004 when the firm joined RidgeWorth as the institutional fixed income management division. As of December 31, 2018, Seix had approximately $21.2 billion in assets under management.

For its services as subadviser, the Adviser pays Seix a fee at the rate of 50% of the net advisory fee paid by each Fund for which Seix acts as subadviser.

Silvant Capital Management LLC — Silvant Large-Cap Growth Stock Fund and Silvant Small-Cap Growth Stock Fund

Silvant, an affiliate of the Adviser, is located at 3333 Piedmont Road, Suite 1500, Atlanta, Georgia 30305. Silvant is an investment adviser registered with the SEC. The firm was established in 2008 after 24 years functioning as RidgeWorth’s growth style investment management team. As of December 31, 2018, Silvant had approximately $747 million in assets under management. Silvant focuses on managing growth equity products for a diverse range of institutional clients.

For its services as subadviser, the Adviser pays Silvant a fee at the rate of 50% of the net advisory fee paid by each Fund for which Silvant acts as subadviser.

WCM Investment Management — WCM International Equity Fund

WCM is located at 280 Brooks Street, Laguna Beach, California 92651. WCM is an investment adviser registered with the SEC. The firm was established in 1976. As of December 31, 2018, WCM had approximately $29.8 billion in assets under management.

For its services as subadviser, the Adviser pays WCM an annual fee paid equal to 60% of the first $500 million; 62% of the next $500 million; 63% of the next $4 billion; and 65% in excess of $5 billion of the net advisory fee paid by WCM International Equity Fund.

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Zevenbergen Capital Investments LLC — Zevenbergen Innovative Growth Stock Fund

Zevenbergen, a minority-owned affiliate of the Adviser, is located at 601 Union Street, Suite 4600 Seattle, Washington 98101. Zevenbergen is an investment adviser registered with the SEC. The firm was established in 1987. As of December 31, 2018, Zevenbergen had approximately $2.3 billion in assets under management. Zevenbergen specializes in aggressive growth-equity investment advisory services for separately managed portfolios and mutual funds.

For its services as subadviser, the Adviser pays Zevenbergen a fee at the rate of 0.44% of the net advisory fee paid by Zevenbergen Innovative Growth Stock Fund.

The following table shows the dollar amount of fees payable to each subadviser for managing the respective Fund(s) (or respective Predecessor Fund(s), as applicable), the amount of expenses reimbursed by the subadviser, and the actual fee received by the subadviser for the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018.

Subadvisory Fee Table

	Gross Subadvisory Fee ($)						Subadvisory Fee Waived and/or Expenses Reimbursed ($)						Net Subadvisory Fee ($)
Fund	3/31/2017		12/31/2017		12/31/2018		3/31/2017		12/31/2017		12/31/2018		3/31/2017		12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund		6,980,140		4,938,195		5,673,451		0		260,473		486,581		6,980,140		4,677,722		5,186,870
Ceredex Mid-Cap Value Equity Fund		11,297,469		7,891,450		10,030,942		0		26,092		102,663		11,297,469		7,865,358		9,928,279
Ceredex Small-Cap Value Equity Fund		3,889,845		2,684,598		3,022,879		0		(3,821 )		17,975		3,889,845		2,688,419		3,004,904
Seix Core Bond Fund		305,841		202,639		215,414		0		63,030		106,703		305,841		139,609		108,711
Seix Corporate Bond Fund		38,887		27,620		44,548		11,965		25,956		40,855		26,922		1,664		3,693
Seix Floating Rate High Income Fund		9,751,143		9,414,575		12,804,537		0		1,494,202		2,257,639		9,751,143		7,920,373		10,546,898
Seix High Grade Municipal Bond Fund		265,574		160,934		186,259		0		41,719		73,126		265,574		119,215		113,133
Seix High Income Fund		1,625,770		1,027,039		1,016,357		0		109,995		153,315		1,625,770		917,044		863,042
Seix High Yield Fund		1,237,971		830,684		815,852		0		147,951		221,338		1,237,971		682,733		594,514
Seix Investment Grade Tax-Exempt Bond		1,537,110		989,903		1,049,083		0		169,533		318,869		1,537,110		820,370		730,214
Seix Short-Term Bond Fund		107,698		49,243		19,534		0		31,292		41,372		107,698		17,951		(21,838 )
Seix Short-Term Municipal Bond Fund		58,838		43,329		43,424		14,585		35,590		50,766		44,253		7,739		(7,342 )
Seix Total Return Bond Fund		1,221,884		861,755		824,330		0		226,963		324,581		1,221,884		634,792		499,749
Seix U.S. Government Securities Ultra-Short Bond Fund		1,429,709		1,006,720		1,269,467		0		296,117		574,609		1,429,709		710,603		694,858
Seix U.S. Mortgage Fund		67,126		37,748		49,351		1,237		30,675		58,236		65,889		7,073		(8,885 )
Seix Ultra-Short Bond Fund		112,065		56,260		60,488		0		32,638		60,126		112,065		23,622		362
Silvant Large-Cap Growth Stock Fund		802,291		433,033		437,316		0		66,861		162,330		802,291		366,172		274,986
Silvant Small-Cap Growth Stock Fund		200,957		110,601		121,895		4,345		23,277		38,848		196,612		87,324		83,047
WCM International Equity Fund		309,024		337,377		487,194		5,312		4,254		(2,579 )		303,712		333,123		489,773
Zevenbergen Innovative Growth Stock Fund		105,459		93,449		332,240		0		0		0		105,459		93,449		332,240

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

Administrator

Virtus Fund Services, LLC (“VFS”) is the administrator of the Trust. VFS is an indirect, wholly-owned subsidiary of Virtus and an affiliate of the Adviser. For its services as administrator, VFS receives an administration fee based upon the average net assets across all series of the Virtus Mutual Funds at the following annual rates:

	First $15 billion			0.10%
	$15+ billion to $30 billion			0.095%

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	$30+ billion to $50 billion			0.09%
	Greater than $50 billion			0.085%

For the purposes of applying the fee breakpoints, the Virtus Mutual Funds’ average net assets may be aggregated with the average net assets of the series of VVIT.

Prior to July 14, 2017, State Street served as the administrator to the Predecessor Funds.

The following table shows the dollar amount of fees that the Funds (or Predecessor Funds, as applicable) paid to the administrator for its administrative services with respect to each Fund (or Predecessor Fund, as applicable), for the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018.

	Administration Fee ($)
Fund	3/31/2017		12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund		211,567		934,527		1,630,367
Ceredex Mid-Cap Value Equity Fund		323,824		1,406,067		2,741,509
Ceredex Small-Cap Value Equity Fund		92,970		392,429		685,634
Seix Core Bond Fund		24,270		100,811		163,561
Seix Corporate Bond Fund		1,929		8,094		21,152
Seix Floating Rate High Income Fund		470,239		2,918,260		5,992,238
Seix High Grade Municipal Bond Fund		10,537		42,393		70,715
Seix High Income Fund		59,127		226,307		350,773
Seix High Yield Fund		54,843		224,351		344,142
Seix Investment Grade Tax-Exempt Bond		61,585		245,683		398,262
Seix Short-Term Bond Fund		5,342		11,379		9,270
Seix Short-Term Municipal Bond Fund		3,335		15,985		23,550
Seix Total Return Bond Fund		99,557		435,727		634,162
Seix U.S. Government Securities Ultra-Short Bond Fund		149,311		660,066		1,259,709
Seix U.S. Mortgage Fund		3,329		11,823		23,422
Seix Ultra-Short Bond Fund		10,109		29,412		52,195
Silvant Large-Cap Growth Stock Fund		22,739		66,367		118,592
Silvant Small-Cap Growth Stock Fund		4,690		15,512		27,222
WCM International Equity Fund		6,012		43,631		90,672
Zevenbergen Innovative Growth Stock Fund		2,378		13,067		71,690

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

Sub-administrative and Accounting Agent

The Trust has entered into an agreement with BNY Mellon, 301 Bellevue Parkway, Wilmington, DE 19809, pursuant to which BNY Mellon acts as sub-administrative and accounting agent of the Trust.

For its services in this capacity, BNY Mellon receives a fee based on the Funds’ aggregate average net assets.

In addition to the asset-based fee, BNY Mellon is entitled to certain non-material fees, as well as out of pocket expenses.

The following table shows the net amount of fees received by the Sub-administrative and Accounting Agent for the fiscal period ended December 31, 2017 *, and the fiscal year ended December 31, 2018, for its services with respect to each Fund. For the period July 15, 2017 through October 20, 2017, State Street served as Sub-administrative and Accounting Agent to the Funds. Prior to July 15, 2017, there was no Sub-administrative and Accounting Agent for the Predecessor Funds.

	Sub-administrative Fees ($)
Fund	12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund		247,278		254,181
Ceredex Mid-Cap Value Equity Fund		376,367		424,317
Ceredex Small-Cap Value Equity Fund		106,513		109,366
Seix Core Bond Fund		25,960		29,347

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	Sub-administrative Fees ($)
Fund	12/31/2017		12/31/2018
Seix Corporate Bond Fund		2,251		7,520
Seix Floating Rate High Income Fund		717,318		922,784
Seix High Grade Municipal Bond Fund		10,536		15,114
Seix High Income Fund		63,658		58,045
Seix High Yield Fund		60,484		57,029
Seix Investment Grade Tax-Exempt Bond Fund		64,032		65,317
Seix Short-Term Bond Fund		4,867		5,697
Seix Short-Term Municipal Bond Fund		3,802		7,886
Seix Total Return Bond Fund		113,669		101,478
Seix U.S. Government Securities Ultra-Short Bond Fund		168,547		197,367
Seix U.S. Mortgage Fund		3,093		7,866
Seix Ultra-Short Bond Fund		10,058		12,277
Silvant Large-Cap Growth Stock Fund		21,664		22,452
Silvant Small-Cap Growth Stock Fund		4,469		8,448
WCM International Equity Fund		9,935		18,173
Zevenbergen Innovative Growth Stock Fund		3,205		15,262

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

Distributor

VP Distributors, a broker-dealer registered with FINRA and which is an indirect, wholly-owned subsidiary of Virtus and an affiliate of the Adviser and certain subadvisers, serves as distributor of the Funds’ shares. Fund shares are offered on a continuous basis. The principal office of VP Distributors is located at One Financial Plaza, Hartford, Connecticut 06103. George R. Aylward, Kevin J. Carr and Nancy J. Engberg, each serve as an officer of the Trust and as an officer for the Distributor.

The Trust and VP Distributors have entered into an underwriting agreement under which VP Distributors has agreed to use its best efforts to find purchasers for Trust shares and the Trust has granted to VP Distributors the exclusive right to purchase from the Funds and resell, as principal, shares needed to fill unconditional orders for Fund shares. VP Distributors may sell Fund shares through its registered representatives or through securities dealers with whom it has sales agreements. VP Distributors may also sell Fund shares pursuant to sales agreements entered into with bank-affiliated securities brokers who, acting as agent for their customers, place orders for Fund shares with VP Distributors. It is not anticipated that termination of sales agreements with banks and bank affiliated securities brokers would result in a loss to their customers or a change in the NAV per share of a Fund of the Trust.

For its services under the underwriting agreement, VP Distributors receives sales charges on transactions in Fund shares and retains such charges less the portion thereof allowed to its registered representatives and to securities dealers and securities brokers with whom it has sales agreements. In addition, VP Distributors may receive payments from the Trust pursuant to the Distribution Plans described below.

During the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018, purchasers of shares of the Funds (or Predecessor Funds, as applicable) paid aggregate sales charges of $418,808, $244,495 and $333,102, respectively, of which the Distributor, received net commissions of $54,431, $212,678 and $291,113, respectively, for its services, the balance being paid to dealers. For the fiscal year ended December 31, 2018, the Distributor received net commissions of $40,608 for Class A Shares and there were $0 in deferred sales charges for Class A Shares and $0 for Class C Shares.

Prior to July 15, 2017, RidgeWorth Distributors LLC (“RWD”) served as the distributor to the Predecessor Funds.

The distribution agreement/underwriting agreement may be terminated at any time by 60 days written notice, without payment of a penalty, by the Distributor, by vote of a majority of the appropriate Class of outstanding voting securities of the Funds, or by vote of a majority of the Trust’s Trustees who are not parties to the distribution agreement/underwriting agreement or “interested persons” of any party and who have no direct or indirect financial interest in the operation of the Distribution Plans or in any related agreements. The distribution agreement/underwriting agreement will terminate automatically in the event of its “assignment,” as defined in Section 2(a)(4) of the 1940 Act.

The following table shows the dollar amount of sales charges paid by the Funds (or Predecessor Funds as applicable) to the Distributor and/or RWD for the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * ,

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and the fiscal year ended December 31, 2018, with respect to sales of Class A Shares of the Funds (or Predecessor Funds as applicable) and the amount of sales charges retained by the Distributor and/or RWD and reallowed to other persons.

	Aggregate Sales Charges Payable to Distributor ($)					Amount Reallowed by Distributor ($)
Fund	3/31/2017	12/31/2017		12/31/2018		3/31/2017		12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund	21,757		23,855		42,426		2,789		20,779		37,462
Ceredex Mid-Cap Value Equity Fund	67,720		59,487		31,162		9,224		50,763		27,129
Ceredex Small-Cap Value Equity Fund	3,523		174		291		589		151		253
Seix Core Bond Fund	4,133		89		264		682		78		228
Seix Corporate Bond Fund	435		463		707		68		391		607
Seix Floating Rate High Income Fund	164,839		85,428		86,130		17,679		75,561		75,705
Seix High Grade Municipal Bond Fund	22,766		2,562		699		2,530		2,348		610
Seix High Income Fund	23,466		13,105		13,376		4,053		10,848		11,486
Seix High Yield Fund	10,703		4,786		1,398		1,983		3,887		1,196
Seix Investment Grade Tax-Exempt Bond	2,395		6,695		1,849		405		5,863		1,594
Seix Short-Term Bond Fund	61		133		390		7		118		341
Seix Short-Term Municipal Bond Fund	0		2,754		229		—		2,333		201
Seix Total Return Bond Fund	3,832		—		175		852		—		150
Seix U.S. Government Securities Ultra-Short Bond Fund	—		—		—		—		—		—
Seix U.S. Mortgage Fund	744		—		1,289		69		—		1,120
Seix Ultra-Short Bond Fund	—		—		—		—		—		—
Silvant Large-Cap Growth Stock Fund	10,405		3,433		7,838		1,448		2,971		6,869
Silvant Small-Cap Growth Stock Fund	2,720		1,808		3,862		382		1,561		3,415
WCM International Equity Fund	38,151		17,397		14,770		6,649		15,212		12,780
Zevenbergen Innovative Growth Stock Fund	6,187		12,347		122,003		818		11,038		106,284

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

For the fiscal year ended December 31, 2018, there were no deferred sales charges paid to the Distributor with respect to Class A Shares of the Funds.

Dealer Concessions

Class A Shares, Class R Shares, Class C Shares and Class I Shares Only

Dealers with whom the Distributor has entered into sales agreements receive a discount or commission on Class A Shares as described below.

Ultra-Short Bond Funds

There are no discounts or commissions applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares).

Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund and Seix U.S. Mortgage Fund

Amount of Transaction at Offering Price	Sales Charge as a percentage of Offering Price		Sales Charge as a percentage of Net Amount Invested		Dealer Discount as a percentage of Offering Price
Under $100,000		2.25 %		2.30 %		2.00 %
$100,000 but under $250,000		1.75 %		1.78 %		1.50 %
$250,000 but under $3,000,000		None		None		0.50 %
$3,000,000 or more		None		None		0.25 %

Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund and Seix Floating Rate High Income Fund

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Amount of Transaction at Offering Price	Sales Charge as a percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		2.75 %		2.83 %		2.25 %
$50,000 but under $100,000		2.25		2.30		2.00
$100,000 but under $250,000		1.75		1.78		1.50
$250,000 but under $500,000		1.25		1.27		1.00
$500,000 but under $1,000,000		1.00		1.01		1.00
$1,000,000 or more		None		None		None

Seix Core Bond Fund, Seix Corporate Bond Fund, Seix High Income Fund, Seix High Yield Fund and Seix Total Return Bond Fund

Amount of Transaction at Offering Price	Sales Charge as a percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		3.75 %		3.90 %		3.25 %
$50,000 but under $100,000		3.50		3.63		3.00
$100,000 but under $250,000		3.25		3.36		2.75
$250,000 but under $500,000		2.25		2.30		2.00
$500,000 but under $1,000,000		1.75		1.78		1.50
$1,000,000 or more		None		None		None

All Other Funds

Amount of Transaction at Offering Price	Sales Charge as a Percentage of Offering Price		Sales Charge as a Percentage of Amount Invested		Dealer Discount as a Percentage of Offering Price
Under $50,000		5.75 %		6.10 %		5.00 %
$50,000 but under $100,000		4.75		4.99		4.25
$100,000 but under $250,000		3.75		3.90		3.25
$250,000 but under $500,000		2.75		2.83		2.25
$500,000 but under $1,000,000		2.00		2.04		1.75
$1,000,000 or more		None		None		None

Dealers and other entities that enter into special arrangements with the Distributor may receive compensation for the sale and promotion of shares of the Funds. Such fees are in addition to the sales commissions referenced above and may be based upon the amount of sales of fund shares by a dealer; the provision of assistance in marketing of Fund shares; access to sales personnel and information dissemination services; and other criteria as established by the Distributor. Depending on the nature of the services, these fees may be paid either from the funds through distribution fees, service fees or in some cases, the Distributor may pay certain fees from its own profits and resources.

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greater than $3,000,000. There is no sales charge applied to purchases of Class A Shares of the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a contingent deferred sales charge (“CDSC”) on the shares being exchanged for the Ultra-Short Bond Fund shares, as discussed below). For all other Virtus fixed income funds in this SAI (except the Ultra-Short Bond Funds), the Distributor may pay broker-dealers a finder’s fee in an amount equal to 0.50% of eligible Class A Share purchases from $1,000,000 to $3,000,000 and 0.25% on amounts greater than $3,000,000. For all other Virtus Mutual Funds in this SAI (except the Ultra-Short Bond Funds), the Distributor may pay broker-dealers a finder’s fee in an amount equal to 1.00% of eligible Class A Share purchases from $1,000,000 to $3,000,000, 0.50% on amounts of $3,000,001 to $10,000,000, and 0.25% on amounts greater than $10,000,000. Purchases of Class A Shares by an account in the name of a qualified employee benefit plan are eligible for a finder’s fee only if such plan has at least 100 eligible employees. A CDSC may be imposed on certain redemptions made (including exchanges into the Ultra-Short Bond Funds) of such Class A investments. For Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund and Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 12 months of a finder’s fee being paid; for all other funds (except the Ultra-Short Bond Funds), the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 18 months of a finder’s fee being paid. For Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds in this SAI (except the Ultra-Short Bond Funds), the CDSC is 1.00%. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares). For purposes of determining the applicability of the CDSC, the 12- or 18-month period, as applicable, begins on the last day of the month preceding the month in which the purchase was made. The Distributor will also pay broker-dealers a service fee of 0.25% beginning in the thirteenth month following purchase of Class A Shares on which a finder’s fee has been paid. (For the exact rate for your fund(s), please refer to the chart in the section of the Funds’ prospectus entitled “Sales Charges” under “What are the classes and how do they differ?”) VP Distributors reserves the right to discontinue or alter such fee payment plans at any time.

The Distributor has also agreed to pay fees to certain distributors for preferred marketing opportunities. These arrangements may be viewed as creating a conflict of interest between these distributors and investors. Investors should make due inquiry of their selling agents to ensure that they are receiving the requisite point of sale disclosures and suitable recommendations free of any influence by reason of these arrangements.

A document containing information about sales charges, including breakpoint (volume) discounts, is available free of charge on the Internet at virtus.com . In the “Our Products” section, go to the Mutual Funds page under “Individual Investors” and click on the link for Breakpoint (Volume) Discounts.

Class R6 Shares Only

Custodian

The Bank of New York Mellon, 240 Greenwich Street, New York, NY 10286, serves as the custodian (the “Custodian”) of the Funds’ assets. The Custodian designated by the Board holds the securities in the Funds’ portfolios and other assets for safe keeping. The Custodian does not and will not participate in making investment decisions for the Funds.

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The Trust has authorized the Custodian to appoint one or more sub-custodians for the assets of the Funds held outside the United States. The securities and other assets of each Fund are held by its Custodian or any sub-custodian separate from the securities and assets of each other Fund.

Securities Lending Agent

Bank of New York Mellon (BNYM) served as securities lending agent for each Fund participating in the securities lending program from September 10, 2018 forward. In that role, BNYM administered each Fund’s securities lending program pursuant to the terms of a securities lending agency agreement entered into between the Trust and BNYM.

As securities lending agent, BNYM is responsible for the administration and management of each Fund’s securities lending program, including:

•

negotiation, preparation and execution of an agreement with each approved borrower governing the terms and conditions of any securities loan,

•

credit review and monitoring of approved borrowers,

•

loan negotiation,

•

ensuring that securities loans are properly coordinated and documented with the Funds’ custodian, sub custodians/depositories,

•

daily marking to market of loans,

•

monitoring and maintaining cash collateral levels,

•

arranging for the investment of cash collateral received from borrowers in accordance with each Fund’s investment guidelines,

•

initiating and monitoring loan terminations/recalls

•

ensuring that all dividends and other distributions from corporate actions with respect to loaned securities are credited to the relevant Funds

•

maintaining records relating to the Fund’s securities lending activity and providing monthly/quarterly statements

BNYM receives as compensation for its services a portion of the amount earned by each participating Fund for lending securities.

For each Fund participating in the securities lending program, the table below sets forth, for the most recently completed fiscal year, the Fund’s gross income received from securities lending activities, the fees and/or other compensation paid by the Fund for securities lending activities, and the net income earned by the Fund for securities lending activities. The table below also discloses any other fees or payments incurred by each Fund resulting from lending securities.

	Fees and/or compensation for securities lending activities and related services:
Fund		Gross income from securities lending activities			Fees paid to securities lending agent from a revenue split			Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle)			Administrative fees not included in revenue split		Indemnification fee not included in revenue split		Rebate (paid to borrower)			Other fees not included in revenue split (specify)		Aggregate fees/ compensation for securities lending activities			Net income from securities lending activities
Ceredex Large-Cap Value Equity Fund			$	16,735		$	477		$	3,935		—		—		$	9,618		—		$	4,413		$	2,704
Ceredex Mid-Cap Value Equity Fund			$	4			—		$	1		—		—		$	2		—		$	1		$	1
Silvant Large-Cap Growth Stock Fund			$	3,900		$	122		$	947		—		—		$	2,141		—		$	1,069		$	690
Silvant Small-Cap Growth Stock Fund			$	3,131		$	156		$	737		—		—		$	1,351		—		$	893		$	887
WCM International Equity Fund			$	15,677		$	472		$	3,631		—		—		$	8,900		—		$	4,103		$	2,674

Transfer Agent and Sub-Transfer Agent

Virtus Fund Services acts as transfer agent for the Trust. Pursuant to a Transfer Agent and Service Agreement, Virtus Fund Services receives a fee, based on the average net assets at an annual rate ranging from 0.045% to 0.0375%. Virtus Fund Services is authorized to engage subagents to perform certain shareholder servicing functions from time to

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time for which such agents shall be paid a fee by Virtus Fund Services or the Funds. Pursuant to an agreement among the Trust, Virtus Fund Services and BNY Mellon, BNY Mellon serves as sub-transfer agent to perform certain shareholder servicing functions for the Funds. For performing such services, BNY Mellon receives a monthly fee from the Funds as approved by the Board.

Legal Counsel to the Trust and the Independent Trustees

Sullivan & Worcester, LLP, 1666 K Street, NW, Washington, DC 20006, acts as legal counsel to the Trust and its Independent Trustees and reviews certain legal matters for the Trust in connection with the shares offered by the Prospectus.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP serves as the independent registered public accounting firm for the Trust. PwC audits the Trust’s annual financial statements and expresses an opinion thereon. The independent registered public accounting firm also provides other accounting and tax-related services as requested by the Trust from time to time. PwC's business address is Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103.

DISTRIBUTION PLANS

The Trust has adopted a distribution plan for each class of shares (except Class I Shares and Class R6 Shares) (i.e., a plan for the Class A Shares, a plan for the Class C Shares and a plan for the Class R Shares; collectively, the “Plans”) in accordance with Rule 12b-1 under the 1940 Act, to compensate the Distributor for the services it provides and for the expenses it bears under the underwriting agreement. Each class of shares pays a service fee at a rate of 0.25% per annum of the average daily net assets of such class of the Fund (0.15% for Seix High Grade Municipal Bond Fund and Seix Short-Term Municipal Bond Fund, and 0.20% for Seix Short-Term Bond Fund and Seix U.S. Mortgage Fund) and a distribution fee based on average daily net assets at a rate of 0.75% per annum for Class C Shares.

Expenditures under the Plans may consist of: (i) commissions to sales personnel for selling shares of the Fund (including underwriting fees and financing expenses incurred in connection with the payment of commissions); (ii) compensation, sales incentives and payments to sales, marketing and service personnel; (iii) payments to broker-dealers and other financial institutions which have entered into agreements with the Distributor in the form of the Dealer Agreement for Virtus Mutual Funds for services rendered in connection with the sale and distribution of shares of the Fund; (iv) payment of expenses incurred in sales and promotional activities, including advertising expenditures related to the Fund; (v) the costs of preparing and distributing promotional materials; (vi) the cost of printing the Fund’s Prospectuses and SAI for distribution to potential investors; (vii) expenses related to the cost of financing or providing such financing from the Distributor’s or an affiliate’s resources in connection with the Distributor’s payment of such distribution expenses; and (viii) such other similar services that the Trustees determine are reasonably calculated to result in the sale of shares of the Fund. From the fees received, the Distributor expects to pay a quarterly fee to qualifying broker-dealer firms, as compensation for providing personal services and/or the maintenance of shareholder accounts, with respect to shares sold by such firms. In the case of shares of the Funds being sold to an affiliated fund of funds, fees payable under the Plans shall be paid to the distributor of the fund of funds. This fee will not exceed on an annual basis 0.25% of the average annual NAV of such shares, and will be in addition to sales charges on Fund shares which are re-allowed to such firms. To the extent that the entire amount of the fees received is not paid to such firms, the balance will serve as compensation for personal and account maintenance services furnished by the Distributor. The Distributor also pays to dealers an additional compensation with respect to Class C Shares at the rate of 0.75% of the average annual NAV of that class.

In order to receive payments under the Plans, participants must meet such qualifications to be established in the sole discretion of the Distributor, such as providing services to the Funds’ shareholders; or providing the Funds with more efficient methods of offering shares to coherent groups of clients, members or prospects of a participant; or providing services permitting bulking of purchases or sales, or transmission of such purchases or sales by computerized tape or other electronic equipment; or providing other processing. Dealers must have an aggregate value of $50,000 or more per Fund CUSIP to qualify for payment in that Fund class.

On a quarterly basis, the Funds’ Board reviews a report on expenditures under the Plans and the purposes for which expenditures were made. The Trustees conduct an additional, more extensive review annually in determining whether the Plans will be continued. By its terms, continuation of the Plans from year to year is contingent on annual approval by a majority of the Funds’ Trustees and by a majority of the Trustees who are not “interested persons” (as defined in the 1940 Act) and who have no direct or indirect financial interest in the operation of the Plans or any related agreements (the “Plan Trustees”). The Plans provide that they may not be amended to increase materially the costs which the Funds may bear pursuant to the Plans without approval of the shareholders of that class of the Funds and that other

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material amendments to the Plans must be approved by a majority of the Plan Trustees by vote cast in person at a meeting called for the purpose of considering such amendments. The Plans further provide that while they are in effect, the selection and nomination of Trustees who are not “interested persons” shall be committed to the discretion of the Trustees who are not “interested persons.” The Plans may be terminated at any time by vote of the Plan Trustees or a majority of the outstanding shares of the relevant class of the Funds.

Rule 12b-1 Fees Paid

The following table shows Rule 12b-1 Fees paid by the Funds (or Predecessor Funds, as applicable) to the distributor with respect to Class A Shares and Class C Shares of each Fund (or Predecessor Fund, as applicable) for which such fees were paid for the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * and the fiscal year ended December 31, 2018.

Fund	12b-1 Fees Paid ($)
	3/31/2017	12/31/2017	12/31/2018
Ceredex Large-Cap Value Equity Fund	1,205,637	599,649	879,875
Ceredex Mid-Cap Value Equity Fund	1,739,127	825,541	1,485,958
Ceredex Small-Cap Value Equity Fund	632,483	306,046	423,897
Seix Core Bond Fund	59,912	27,002	34,278
Seix Corporate Bond Fund	73,690	32,092	59,804
Seix Floating Rate High Income Fund	1,337,186	522,471	756,041
Seix High Grade Municipal Bond Fund	34,290	10,669	11,078
Seix High Income Fund	241,680	112,773	111,910
Seix High Yield Fund	53,989	8,370	10,031
Seix Investment Grade Tax-Exempt Bond Fund	99,835	26,627	26,254
Seix Short-Term Bond Fund	20,524	6,744	13,453
Seix Short-Term Municipal Bond Fund	9,385	1,917	2,317
Seix Total Return Bond Fund	384,705	148,014	174,427
Seix U.S. Government Securities Ultra-Short Bond Fund	103,710	—	813
Seix U.S. Mortgage Fund	57,077	18,694	40,716
Seix Ultra-Short Bond Fund	7,427	—	688
Silvant Large-Cap Growth Stock Fund	528,320	292,469	530,179
Silvant Small-Cap Growth Stock Fund	66,033	34,554	59,766
WCM International Equity Fund	24,708	29,219	46,761
Zevenbergen Innovative Growth Stock Fund	15,156	9,749	42,710

* Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

For the fiscal year ended December 31, 2018, the Funds paid Rule 12b-1 fees in the amount of $4,710,956. The Distributor retained $407,653 and paid $4,303,303 to unaffiliated broker-dealers. The Rule 12b-1 payments were used for (1) compensation to dealers, $4,430,402; (2) compensation to sales personnel, $4,797,538; (3) advertising, $1,071,763; (4) printing and mailing of prospectuses to other than current shareholders, $27,057; and (5) other $362,091.

No interested person of the Funds other than the Distributor and no Trustee who is not an interested person of the Funds, as that term is defined in the 1940 Act, has had any direct or indirect financial interest in the operation of the Plans or related agreements.

PORTFOLIO MANAGERS

Other Accounts Managed by Portfolio Managers and Potential Conflicts of Interest

As described in each Fund’s prospectus, the portfolio manager(s) who are responsible for the Funds are:

Fund			Portfolio Manager(s)
Ceredex Large-Cap Value Equity Fund			Mills Riddick, CFA (since 1995)
Ceredex Mid-Cap Value Equity Fund			Don Wordell, CFA (since 2001)
Ceredex Small-Cap Value Equity Fund			Brett Barner, CFA (since 1995)

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Fund			Portfolio Manager(s)
Seix Core Bond Fund			Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2004) Jonathan Yozzo (since 2015)
Seix Corporate Bond Fund			Carlos Catoya (since 2015) James F. Keegan (since 2008) Perry Troisi (since 2004) Jonathan Yozzo (since 2015)
Seix Floating Rate High Income Fund			Vincent Flanagan (since 2011) George Goudelias (since 2006) (Lead Portfolio Manager)
Seix High Grade Municipal Bond Fund			Ronald Schwartz (since 1994) Dusty Self (since June 2018)
Seix High Income Fund			James FitzPatrick (since 2013) Michael Kirkpatrick (since 2011)
Seix High Yield Fund			James FitzPatrick (since 2013) Michael Kirkpatrick (since 2007)
Seix Investment Grade Tax-Exempt Bond Fund			Ronald Schwartz (since 1992) Dusty Self (since June 2018)
Seix Short-Term Bond Fund			Carlos Catoya (since 2015) James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014) Jonathan Yozzo (since 2015)
Seix Short-Term Municipal Bond Fund			Ronald Schwartz (since 2011) (Lead Portfolio Manager) Dusty Self (since 2011)
Seix Total Return Bond Fund			Seth Antiles (since 2007) Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2002) Jonathan Yozzo (since 2015)
Seix U.S. Government Securities Ultra-Short Bond Fund			James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014)
Seix U.S. Mortgage Fund			Seth Antiles (since 2009) Carlos Catoya (since 2015) James F. Keegan (since 2008) Michael Rieger (since 2007) Perry Troisi (since 2007) Jonathan Yozzo (since 2015)
Seix Ultra-Short Bond Fund			Carlos Catoya (since 2015) James F. Keegan (since 2014) Michael Rieger (since 2014) Perry Troisi (since 2014) Jonathan Yozzo (since 2015)
Silvant Large-Cap Growth Stock Fund			Sandeep Bhatia, PhD, CFA (since 2011) Michael A. Sansoterra (since 2007) (Lead Portfolio Manager)

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Fund			Portfolio Manager(s)
Silvant Small-Cap Growth Stock Fund			Sandeep Bhatia, PhD, CFA (since 2011) (Lead Portfolio Manager) Michael A. Sansoterra (since 2007)
WCM International Equity Fund			Paul R. Black (since 2015) Peter J. Hunkel (since 2015) Michael B. Trigg (since 2015) Kurt R. Winrich, CFA (since 2015)
Zevenbergen Innovative Growth Stock Fund			Brooke de Boutray (since 2004) Joseph Dennison (since 2015) Leslie Tubbs (since 2004) Anthony Zackery (since 2015) Nancy Zevenbergen (since 2004)

There may be certain inherent conflicts of interest that arise in connection with the portfolio managers’ management of a Fund’s investments and the investments of any other accounts they manage. Such conflicts could include the aggregation of orders for all accounts managed by a particular portfolio manager, the allocation of purchases across all such accounts, the allocation of IPOs and any soft dollar arrangements that the relevant subadviser may have in place that could benefit the Funds and/or such other accounts. The Board has adopted on behalf of the Funds policies and procedures designed to address any such conflicts of interest to ensure that all transactions are executed in the best interest of the Funds’ shareholders. Each subadviser is required to certify its compliance with these procedures to the Board on a quarterly basis. There have been no material compliance issues with respect to any of these policies and procedures during the Predecessor Funds’ most recent fiscal year. Additionally, any conflicts of interest between the investment strategies of a Fund and the investment strategies of other accounts managed by portfolio managers are not expected to be material since portfolio managers generally manage funds and other accounts having similar investment strategies.

Ceredex, Silvant and Seix

The Adviser and each Subadviser has established policies and procedures to ensure that the purchase and sale of securities among all accounts it manages are allocated in a manner the Subadviser believes is fair and equitable.

WCM

WCM has several accounts with performance-based fees. Performance-based fees are based on a percentage of the capital appreciation of the assets in a fund or account. Because WCM manages accounts that are charged an asset-based fee and accounts that are charged a performance-based fee, it can be deemed that there may be an incentive for WCM to favor accounts for which they receive a performance-based fee and/or to make investments that are riskier or more speculative than would be the case in the absence of such a compensation framework. However, all accounts are managed to the same model and are subject to the same trade allocation policies and procedures, ensuring that no accounts are systematically favored/disfavored.

Zevenbergen

Zevenbergen currently provides investment advisory services to a client whereby Zevenbergen is compensated (in part) by the investment performance of the client’s account (performance fee). Zevenbergen also provides investment advisory services to certain accounts of, or related to, employees and/or their family members. Zevenbergen has procedures in place to ensure that the accounts described above are not shown preferential treatment over other accounts in the allocation of investments. Zevenbergen’s compliance staff conducts quarterly testing of these procedures to ensure their continued effectiveness.

To address and manage these potential conflicts of interest, Zevenbergen has adopted compliance policies and procedures to allocate investment opportunities and to ensure that each of its clients is treated on a fair and equitable basis. Such policies and procedures include, but are not limited to, investment and trade aggregation and allocation policies and oversight by Zevenbergen’s compliance team.

The following table provides information as of December 31, 2018, regarding all accounts managed by the portfolio managers and portfolio management team members for each of the funds as named in the prospectus. In the table, Registered Investment Companies include all open and closed-end mutual funds. Pooled Investment Vehicles (PIVs) include, but are not limited to, securities of issuers exempt from registration under Section 3(c) of the Investment Company Act, such as private placements and hedge funds. Other accounts would include, but are not limited to, individual managed accounts, separate accounts, institutional accounts, pension funds, collateralized bond obligations and collateralized debt obligations.

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Other Accounts Managed (No Performance-Based Fees)

	Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
	Number of Accts	Total Assets	Number of Accts	Total Assets	Number of Accts	Total Assets
Seth Antiles	2	$469 million	2	$925 million	81	$5.0 billion
Brett Barner	1	$556 million	0	N/A	18	$1.3 billion
Sandeep Bhatia	2	$121 million	0	N/A	3	$139 million
Paul R. Black	20	$11.6 billion	19	$3.12 billion	591	$13.2 billion
Brooke de Boutray	3	$133 million	0	N/A	143	$2.22 billion
Carlos Catoya	6	$725 million	2	$925 million	81	$5.0 billion
Joseph Dennison	3	$133 million	0	N/A	143	$2.22 billion
James FitzPatrick	2	$587 million	5	$1.3 billion	19	$2.1 billion
Vince Flanagan	1	$5.3 billion	2	$925 million	1	$90.3 million
George Goudelias	2	$5.8 billion	2	$925 million	1	$90.3 million
Peter J. Hunkel	20	$11.6 billion	19	$3.12 billion	591	$13.2 billion
James F. Keegan	7	$2.0 billion	2	$925 million	81	$5.0 billion
Michael Kirkpatrick	2	$587 million	5	$1.3 billion	19	$2.1 billion
Mills Riddick	3	$2.0 billion	4	$166 million	14	$825 billion
Michael Rieger	6	$1.9 billion	2	$925 million	81	$5.0 billion
Michael A. Sansoterra	2	$121 million	0	N/A	9	$447 million
Ronald Schwartz	6	$506 million	0	N/A	18	$426 million
Dusty Self	6	$506 million	0	N/A	18	$426 million
Michael B. Trigg	20	$11.6 billion	19	$3.12 billion	591	$13.2 billion
Perry Troisi	7	$2.0 billion	2	$925 million	81	$5.0 billion
Leslie Tubbs	3	$133 million	0	N/A	143	$2.22 billion
Kurt R. Winrich	20	$11.6 billion	19	$3.12 billion	591	$13.2 billion
Don Wordell	3	$2.8 billion	1	$68 million	7	$284 million
Jonathan Yozzo	6	$725 million	2	$925 million	81	$5.0 billion
Anthony Zackery	3	$133 million	0	N/A	143	$2.22 billion
Nancy Zevenbergen	3	$133 million	0	N/A	143	$2.22 billion

Other Accounts Managed (With Performance-Based Fees)

Registered Investment Companies

Other Pooled Investment Vehicles

Other Accounts

Number of
Accts

Total Assets

Number of
Accts

Total Assets

Number of
Accts

Total Assets

Seth Antiles

N/A

$357 million

Paul R. Black

N/A

$1.38 billion

Carlos Catoya

N/A

$357 million

Vince Flanagan

N/A

$2.3 billion

N/A

George Goudelias

N/A

$2.9 billion

N/A

Peter J. Hunkel

N/A

$1.38 billion

James F. Keegan

N/A

$357 million

Michael Rieger

N/A

$357 million

Michael A. Sansoterra

N/A

$3.16 million

Michael B. Trigg

N/A

$1.38 billion

Perry Troisi

N/A

$357 million

Kurt R. Winrich

N/A

$1.38 billion

Jonathan Yozzo

N/A

$357 million

Portfolio Manager Compensation

Ceredex, Silvant and Seix

Portfolio manager compensation generally consists of base salary, bonus, and various employee benefits and may also include long-term stock awards, retention bonuses, or incentive guarantees. These components are tailored in an effort to retain high quality investment professionals and to align compensation with performance.

A portfolio manager’s base salary is determined by the individual’s experience, responsibilities within the firm, performance in the role, and market rate for the position.

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Each portfolio manager’s bonus may be structured differently but generally incorporates an evaluation of the Fund’s investment performance as well as other subjective factors. Investment performance may be evaluated directly against a peer group and/or benchmark, or indirectly by measuring overall business unit financial performance over a period of time. Where applicable, investment performance is determined by comparing a Fund’s pre-tax total return to the returns of the Fund’s peer group and/or benchmark over multi-year periods. Where portfolio managers are responsible for multiple Funds or other managed accounts, each product is weighted based on its size and relative strategic importance to the Adviser and/or Subadviser. Other subjective factors that may be considered in the calculation of incentive bonuses include: adherence to compliance policies, risk management practices, sales/marketing, leadership, communications, corporate citizenship, and overall contribution to the firm. Bonuses are typically paid annually.

In addition, certain portfolio managers may participate in the Adviser’s equity plan designed to provide compensation opportunities linking a participant’s compensation to the financial and operational performance of the Adviser. Retention bonuses and/or incentive guarantees for a fixed period may also be used when the Adviser and/or Subadviser deem it necessary to recruit or retain the employee.

All full-time employees of the Adviser and Subadvisers, including the Funds’ portfolio managers, are provided a benefits package on substantially similar terms. The percentage of each individual’s compensation provided by these benefits is dependent upon length of employment, salary level, and several other factors.

WCM

WCM’s compensation practices employ a multi-pronged approach and play an important role in rewarding and retaining key professionals, whether investment (research), sales, or operations.

Specifically, then, for investment (research) professionals, compensation breakdown includes:

•

Base Salaries: all investment professionals receive competitive base salaries reflective of their role and contribution to the investment (research) team.

•

Bonuses: Additional compensation comes in the form of periodic (normally semi-annual) bonuses. WCM employs a qualitative, discretionary bonus system to incentivize and reward its team members based primarily on their performance in contributing to team results. This springs from WCM’s belief (supported by various academic studies) that small, cohesive, collaborative teams can and do provide better results than “star systems” or “armies of analysts”. And even though WCM subscribes to that old aphorism, “the whole can be greater than the sum of the parts,” individual performance is not ignored — it simply plays a subordinate role to team success. These evaluations are made on a regular basis by the investment (research) team leaders, utilizing a review system that begins with a “return-on-time” assessment for each investment (research) team member and is then supplemented, reviewed, and approved by the WCM’s “leadership team” (i.e., board of directors).

•

Profit-Sharing: WCM does not utilize a “cash” profit-sharing plan, but it does include a profit-sharing component in the Employee Benefit Plan (see below).

•

Employee Benefit Plan: All employees are eligible to participate in the WCM Employee Savings Plan (“401(k)”) after six full months of employment. Besides the normal employee pre-tax deferral, the 401(k) has two possible employer components: 1) discretionary employer match, and 2) discretionary employer profit-sharing contribution. Currently, the only employer component being utilized is the profit sharing component, which is determined annually and contributes a substantial amount to each employee’s retirement account. There is no vesting period for employer contributions.

•

Equity Ownership: All employees, upon completing three years of full-time employment, are eligible to be offered (and purchase) shares, or equity ownership. (WCM is a California sub-chapter S corporation and has only one class of stock.) Further, WCM groups its shareholders into two categories: Principal Owners (shareholders of more than the 3% of the outstanding stock), and Regular Owners (shareholders of less than 3%). All four of the portfolio managers for the Fund fall into this Principal Owner category and together own over 70% of the firm.

•

WCM categorizes its non-investment (non-research) personnel into two groups: Sales, and Operations. Compensation breakdown for these non-investment (non-research) personnel is identical in form and structure to that for investment (research) personnel with two differences:

•

Evaluations forming the basis for WCM’s qualitative, discretionary bonus system are made by the apropos team leaders, but are still supplemented, reviewed, and approved by the firm’s “leadership team” (i.e., board of directors);

•

For Sales personnel only, an additional component in compensation is an ongoing revenue share intended to incentivize both sales and client service.

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Zevenbergen

Nancy Zevenbergen, CFA, CIC, Brooke de Boutray, CFA, CIC, and Leslie Tubbs, CFA, CIC are the Portfolio Managers principally responsible for the day-to-day management of the Funds’ portfolio. Joseph Dennison, CFA and Anthony Zackery, CFA are the Associate Portfolio Managers that support Zevenbergen’s Portfolio Managers with active recommendations on security selection and portfolio construction through original research. Zevenbergen compensates Portfolio Managers and Associate Portfolio Managers with salaries reflective of their individual experience and commensurate with industry standards and those of regional competitors. In addition to salaries, portfolio managers receive additional compensation (either through annual incentive payments or as a result of ownership interests in Zevenbergen) based on the firm’s collective effort to drive revenue and profit growth through 1) working in the best interest of clients by delivering superior investment performance, 2) concentrating on stellar service to ensure client retention, and 3) effectively marketing to garner new clients.

Portfolio Manager Fund Ownership

The following table states, as of December 31, 2018, (i) the dollar range of equity securities beneficially owned by each Portfolio Manager in each Fund that he or she managed, and (ii) to the extent such information is applicable and has been made available to the Funds, the dollar range of financial exposure, including through compensation plans, to any other investment vehicles he or she managed that have substantially similar investment objectives, policies and strategies to such Funds. The other investment vehicles may include separately managed accounts or private placement vehicles, and the financial exposure to such other investment vehicles may or may not include ownership from a legal perspective. Typically, exposure through a deferred compensation plan does not include legal ownership, but the plan participant’s account value rises and falls with the value of the investments selected within the plan.

Portfolio Manager

Fund

Dollar Range of Equity
Securities Beneficially
Owned in Fund
Managed

Dollar Value of
Financial Exposure
Through Similar
Strategies

Total Ownership/
Financial Exposure

Seth Antiles

Seix Total Return Bond Fund

$1 – $10,000

None

$1 – $10,000

Seix U.S. Mortgage Fund

None

Brett Barner

Ceredex Small Cap Value Equity Fund

$500,001 – $1,000,000

None

$500,001 – $1,000,000

Sandeep Bhatia

Silvant Large Cap Growth Stock Fund

$10,001 – $50,000

None

$10,001 – $50,000

Silvant Small Cap Growth Stock Fund

$50,001 – $100,000

None

$50,001 – $100,000

Paul R. Black

WCM International Equity Fund

None

Brooke de Boutray

Zevenbergen Innovative Growth Stock Fund

None

Carlos Catoya

Seix Core Bond Fund

None

Seix Corporate Bond Fund

None

Seix Short-Term Bond Fund

None

Seix Total Return Bond Fund

$100,001 – $500,000

None

$100,001 – $500,000

Seix U.S. Mortgage Fund

None

Seix Ultra-Short Bond Fund

None

Joseph Dennison

Zevenbergen Innovative Growth Stock Fund

None

$10,001 – $50,000

James FitzPatrick

Seix High Income Fund

$10,001 – $50,000

None

$10,001 – $50,000

Seix High Yield Fund

$10,001 – $50,000

None

$10,001 – $50,000

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Portfolio Manager

Fund

Dollar Range of Equity
Securities Beneficially
Owned in Fund
Managed

Dollar Value of
Financial Exposure
Through Similar
Strategies

Total Ownership/
Financial Exposure

Vince Flanagan

Seix Floating Rate High Income Fund

None

$50,001 – $100,000

George Goudelias

Seix Floating Rate High Income Fund

$100,001 – $500,000

$500,001 – $1,000,000

Peter J. Hunkel

WCM International Equity Fund

None

$500,001 – $1,000,000

James F. Keegan

Seix Core Bond Fund

None

Seix Corporate Bond Fund

None

Seix Short-Term Bond Fund

None

Seix Total Return Bond Fund

$100,001 – $500,000

$10,001 – $50,000

$100,001 – $500,000

Seix U.S. Government Securities Ultra-Short Bond Fund

None

Seix U.S. Mortgage Fund

None

Seix Ultra-Short Bond Fund

None

Michael Kirkpatrick

Seix High Income Fund

$10,001 – $50,000

None

$10,001 – $50,000

Seix High Yield Fund

$10,001 – $50,000

None

$10,001 – $50,000

Mills Riddick

Ceredex Large Cap Value Equity Fund

Over $1,000,000

None

Over $1,000,000

Michael Rieger

Seix Core Bond Fund

None

Seix Short-Term Bond Fund

None

Seix Total Return Bond Fund

$100,001 – $500,000

None

$100,001 – $500,000

Seix U.S. Mortgage Fund

None

Seix U.S. Government Securities Ultra-Short Bond Fund

None

Seix Ultra-Short Bond Fund

$100,001 – $500,000

None

$100,001 – $500,000

Michael A. Sansoterra

Silvant Large Cap Growth Stock Fund

$100,001 – $500,000

None

$100,001 – $500,000

Silvant Small Cap Growth Stock Fund

None

Ronald Schwartz

Seix High Grade Municipal Bond Fund

$10,001 – $50,000

None

$10,001 – $50,000

Seix Investment Grade Tax-Exempt Bond Fund

$10,001 – $50,000

None

$10,001 – $50,000

Seix Short-Term Municipal Bond Fund

$10,001 – $50,000

None

$10,001 – $50,000

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Portfolio Manager

Fund

Dollar Range of Equity
Securities Beneficially
Owned in Fund
Managed

Dollar Value of
Financial Exposure
Through Similar
Strategies

Total Ownership/
Financial Exposure

Dusty Self

Seix High Grade Municipal Bond Fund

None

Seix Investment Grade Tax-Exempt Bond Fund

None

Seix Short-Term Municipal Bond Fund

$10,001 – $50,000

None

$10,001 – $50,000

Michael B. Trigg

WCM International Equity Fund

None

$100,001 – $500,000

Perry Troisi

Seix Core Bond Fund

None

Seix Corporate Bond Fund

None

Seix Short-Term Bond Fund

None

Seix Total Return Bond Fund

$100,001 – $500,000

None

$100,001 – $500,000

Seix U.S. Government Securities Ultra-Short Bond Fund

None

Seix U.S Mortgage Fund

None

Seix Ultra-Short Bond Fund

None

Leslie Tubbs

Zevenbergen Innovative Growth Stock Fund

None

$100,001 – $500,000

Don Wordell

Mid-Cap Value Equity Fund

$500,001 – $1,000,000

None

$500,001 – $1,000,000

Kurt R. Winrich

WCM International Equity Fund

None

Jonathan Yozzo

Seix Core Bond Fund

None

Seix Corporate Bond Fund

None

Seix Short-Term Bond Fund

None

Seix Total Return Bond Fund

$100,001 – $500,000

None

$100,001 – $500,000

Seix U.S Mortgage Fund

None

Seix Ultra-Short Bond Fund

None

Anthony Zackery

Zevenbergen Innovative Growth Stock Fund

None

$10,001 – $50,000

Nancy Zevenbergen

Zevenbergen Innovative Growth Stock Fund

None

Over $1,000,000

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BROKERAGE ALLOCATION AND OTHER PRACTICES

In effecting transactions for the Funds, the adviser or applicable subadviser (throughout this section, "Subadviser") adheres to the Trust's policy of seeking best execution and price, determined as described below, except to the extent it is permitted to pay higher brokerage commissions for "brokerage and research services" as defined herein. The determination of what may constitute best execution and price in the execution of a securities transaction by a broker involves a number of considerations including, without limitation, the overall direct net economic result to the Funds (involving both price paid or received and any commissions and other costs paid), the efficiency with which the transaction is effected, the ability to effect the transaction at all where a large block is involved, availability of the broker to stand ready to execute possibly difficult transactions in the future, the financial strength and stability of the broker and its ability to provide research services. Such considerations are judgmental and are weighed by the Subadviser in determining the overall reasonableness of brokerage commissions paid by the Funds.

The Subadviser may cause a Fund to pay a broker an amount of commission for effecting a securities transaction in excess of the amount of commission which another broker or dealer would have charged for effecting that transaction if the Subadviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research services provided by such broker. As provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research services" include advising as to the value of securities, the advisability of investing in, purchasing or selling securities, the availability of securities or purchasers or sellers of securities; furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts, and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Brokerage and research services provided by brokers to the Funds are considered to be in addition to and not in lieu of services required to be performed by each Subadviser under its contract with the Trust and may benefit both the Funds and other accounts of the Subadviser. Conversely, brokerage and research services provided by brokers to other accounts of the Subadviser may benefit the Funds.

If the securities in which a particular Fund invests are traded primarily in the over-the-counter market, where possible the Fund will deal directly with the dealers who make a market in the securities involved unless better prices and executions are available elsewhere. Such securities may be purchased directly from the issuer. Bonds and money market instruments are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes.

Some fund transactions are, subject to the Conduct Rules of the FINRA and to obtaining best prices and executions, effected through dealers (excluding VP Distributors) who sell shares of the Funds.

The Trust has Board-approved policies and procedures reasonably designed to prevent (i) the Subadvisers' personnel responsible for the selection of broker-dealers to effect fund portfolio securities transactions from taking into account, in making those decisions, a broker-dealer's promotion or sales efforts, and (ii) the Trust, its Adviser, Subadvisers and Distributor from entering into any agreement or other understanding under which the Funds direct brokerage transactions or revenue generated by those transactions to a broker-dealer to pay for distribution of Fund shares. These policies and procedures are designed to prevent the Trust from entering into informal arrangements to direct portfolio securities transactions to a particular broker.

The Trust has adopted a policy governing the execution of aggregated advisory client orders ("bunching policy") in an attempt to lower commission costs on a per-share and per-dollar basis. According to the bunching policy, no Subadviser shall aggregate transactions unless it believes in its sole discretion that such aggregation is consistent with its duty to seek best execution (which shall include the duty to seek best price) for the Funds. No advisory account of the Subadviser is to be favored over any other account and each account that participates in an aggregated order is expected to participate at the average share price for all transactions of the Subadviser in that security on a given business day, with all transaction costs shared pro rata based on the Fund's participation in the transaction. If the aggregated order is filled in its entirety, it shall be allocated among the Subadviser's accounts in accordance with the allocation order, and if the order is partially filled, it shall be allocated pro rata based on the allocation order. Notwithstanding the foregoing, the order may be allocated on a basis different from that specified in the allocation order if good reason for such different allocation is provided and approved in accordance with the Subadviser’s policies and procedures adopted in accordance with the Trust’s policy. The Board will review the bunching policy from time to time as they deem appropriate.

The Funds of Funds generally do not invest directly in securities, but rather invest in ETFs and shares of underlying mutual funds. The shares of the underlying affiliated mutual funds are purchased at NAV of the shares of that fund without payment of a brokerage commission or a sales charge. The shares of ETFs are purchased through broker-dealers in transactions on a securities exchange, and the Funds will pay customary brokerage commissions for each purchase and sale.

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The adviser or subadvisers to the underlying mutual funds execute the portfolio transactions for their respective fund(s). In allocating portfolio transactions, each underlying fund’s adviser or subadviser must comply with the brokerage and allocation procedures adopted by the board of trustees of the underlying mutual fund. The above discussion of the portfolio transactions and brokerage procedures of the Funds also applies to those underlying mutual funds that are affiliated with the Funds.

The following table shows aggregate amount of brokerage commissions paid by each Fund (or Predecessor Fund, as applicable) for the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018.

	Aggregate Amount of Brokerage Commissions ($)
Fund	3/31/2017		12/31/2017		12/31/2018
Ceredex Large Cap Value Equity Fund		1,779,381		912,484		1,333,049
Ceredex Mid-Cap Value Equity Fund		4,720,071		3,360,629		2,873,919
Ceredex Small-Cap Value Equity Fund		566,709		320,788		546,668
Seix Core Bond Fund		0		0		0
Seix Corporate Bond Fund		0		0		0
Seix Floating Rate High Income Fund		0		0		3,595
Seix High Grade Municipal Bond Fund		0		0		0
Seix High Income Fund		0		0		1,656
Seix High Yield Fund		0		0		0
Seix Investment Grade Tax-Exempt Bond Fund		0		0		0
Seix Short-Term Bond Fund		0		0		0
Seix Short-Term Municipal Bond Fund		0		0		0
Seix Total Return Bond Fund		0		0		0
Seix U.S. Gov’t Securities Ultra-Short Bond Fund		0		0		5,350
Seix U.S. Mortgage Fund		0		0		0
Seix Ultra-Short Bond Fund		0		0		0
Silvant Large Cap Growth Stock Fund		92,771		41,148		12,529
Silvant Small Cap Growth Stock Fund		52,332		19,700		16,638
WCM International Equity Fund		79,205		21,479		69,082
Zevenbergen Innovative Growth Stock Fund		20,277		17,138		87,101

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

In fiscal year December 31, 2018, no brokerage commissions were paid by the funds to any affiliate of the Funds, the Adviser or the Distributor, or to any affiliate of any affiliate of the Funds, the Adviser or the Distributor. Brokerage commissions of $759,851 paid during the fiscal year ended December 31, 2018, were paid on portfolio transactions aggregating $1,472,948,849 executed by brokers who provided research and other statistical information.

For the fiscal year ended March 31, 2017, the fiscal period ended December 31, 2017 * , and the fiscal year ended December 31, 2018, each Fund (or Predecessor Fund, as applicable) paid the following commissions on brokerage transactions directed to brokers pursuant to an agreement or understanding whereby the broker provided research or other brokerage services to the Adviser or subadviser:

	Total Dollar Amount of Brokerage Commissions for Research Services ($)					Total Dollar Amount of Transactions Involving Brokerage Commissions For Research Services ($)
Fund	3/31/2017		12/31/2017		12/31/2018	3/312017		12/31/2017		12/31/2018
Ceredex Large-Cap Value Equity Fund		1,607,401		856,623			3,079,512,152		2,398,617,375
Ceredex Mid-Cap Value Equity Fund		4,233,196		3,098,180			6,726,405,065		5,171,778,634
Ceredex Small-Cap Value Equity Fund		506,371		305,641			668,201,971		422,896,349
Seix Core Bond Fund		6,769		0			15,417,902		0
Seix Corporate Bond Fund		0		0			0		0
Seix Floating Rate High Income Fund		0		0			0		0

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	Total Dollar Amount of Brokerage Commissions for Research Services ($)					Total Dollar Amount of Transactions Involving Brokerage Commissions For Research Services ($)
Fund	3/31/2017		12/31/2017		12/31/2018	3/312017		12/31/2017		12/31/2018
Seix High Grade Municipal Bond Fund		0		0			0		0
Seix High Income Fund		0		0			0		0
Seix High Yield Fund		0		0			0		0
Seix Investment Grade Tax-Exempt Bond		0		0			0		0
Seix Short-Term Bond Fund		0		0			0		0
Seix Short-Term Municipal Bond Fund		0		0			0		0
Seix Total Return Bond Fund		0		0			0		0
Seix U.S. Government Securities Ultra-Short Bond Fund		0		0			0		0
Seix U.S. Mortgage Fund		0		0			0		0
Seix Ultra-Short Bond Fund		0		0			0		0
Silvant Large-Cap Growth Stock Fund		50,592		40,638			69,685,850		153,456,270
Silvant Small-Cap Growth Stock Fund		85,122		19,629			227,482,949		40,984,386
WCM International Equity Fund		25,483		16,156			26,065,790		12,405,651
Zevenbergen Innovative Growth Stock Fund		18,291		14,236			22,722,928		26,013,125

Effective September 21, 2017, the Trust moved its fiscal year to be December 31 of each year.

Securities of Regular Broker-Dealers

The Funds are required to identify the securities of their regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or their parent companies held by the Funds as of the close of their most recent fiscal year. During the fiscal year ended December 31, 2018, the Funds (or Predecessor Funds, as applicable) acquired securities of certain of the Funds (or Predecessor Funds, as applicable) regular broker dealers or the parents of such firms. The aggregate holdings of the Funds (or Predecessor Funds, as applicable) of those brokers or dealers as of December 31, 2018 (amounts in thousands, except shares) were as follows:

Fund	Broker/Dealer	Value
Ceredex Large-Cap Value Equity Fund	Citigroup, Inc.		37,364
	JPMorgan Chase & Co.		46,486
Ceredex Small-Cap Value Equity Fund	Evercore, inc.		14,348
Seix Core Bond Fund	Citigroup, Inc.		508
	JPMorgan Chase & Co.		404
	Morgan Stanley		690
Seix Corporate Bond Fund	Citigroup, Inc.		829
	JPMorgan Chase & Co.		778
	Morgan Stanley		1,647
Seix High Income Fund	Jefferies & Co		1,032
Seix High Yield Fund	Jefferies & Co		973
Seix Short-Term Bond Fund	Citigroup, Inc.		75
	Morgan Stanley		96
Seix Total Return Bond Fund	Citigroup, Inc.		1,481
	JPMorgan Chase & Co.		1,267
	Morgan Stanley		4,929
Seix Ultra-Short Bond Fund	Citigroup, Inc.		670
	JPMorgan Chase & Co.		599
	Morgan Stanley		583
Silvant Large-Cap Growth Stock Fund	Morgan Stanley		1,027

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PURCHASE, REDEMPTION AND PRICING OF SHARES

How to Buy Shares

For Class A Shares and Class C Shares, the minimum initial investment is $2,500 and the minimum subsequent investment is $100. However, both the initial and subsequent minimum investment amounts are $100 for investments pursuant to the “Systematic Purchase” plan, a bank draft investing program administered by the Transfer Agent, or pursuant to the Systematic Exchange privilege or for an IRA. In addition, there are no subsequent minimum investment amounts in connection with the reinvestment of dividend or capital gain distributions.

For Class I Shares, the minimum initial investment is $100,000 and there is no subsequent minimum investment. For purchases of Class I Shares (i) by private clients of the adviser, subadviser and their affiliates, (ii) through certain programs and defined contribution plans with which the Distributor or Transfer Agent has an arrangement or (iii) by Trustees of the funds and directors, officers and employees of Virtus and its affiliates, the minimum initial investment is waived. Completed applications for the purchase of shares should be mailed to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.

For Class R Shares, there is no minimum initial investment and there is no minimum for additional purchases. Class R Shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans and other retirement plan platforms, including brokers, dealers, banks, insurance companies, retirement plan record-keepers and others. Class R Shares require an agreement with the Funds prior to investment.

Class R6 Shares are available only to the following investors without a minimum initial investment or minimum additional purchases: certain employer sponsored retirement plans, including profit-sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans, and plans described in Section 401(k), 403(b) and 457 of the Internal Revenue Code, in each case provided that plan level or omnibus accounts are held on the books of the fund. Other institutional investors may be permitted to purchase Class R6 Shares subject to the fund’s determination of eligibility and may be subject to a $2,500,000 minimum initial investment requirement. If you are participating in an employer sponsored retirement plan, such as a 401(k) plan, profit-sharing plan, defined benefit plan or other employer-directed plan, your company will provide you with the information you need to open an account and buy Class R6 Shares. If you are a qualified institutional investor, completed applications for the purchase of shares should be mailed to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.

The Trust has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate other intermediaries to accept purchase and redemption orders on the Trust’s behalf. The Trust will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker’s authorized designee, accepts the order. Customer orders will be priced at the Funds’ NAVs next computed after they are received in good order by an authorized broker or the broker’s authorized designee.

Alternative Purchase Arrangements

Shares may be purchased from investment dealers at a price equal to their NAV per share, plus a sales charge which, at the election of the purchaser, may be imposed either (i) at the time of the purchase (the “initial sales charge alternative”) or (ii) on a contingent deferred basis (the “deferred sales charge alternative”). Certain Funds also offer Class I Shares that may be purchased by certain institutional investors at a price equal to their NAV per share. Orders received by dealers prior to the close of trading on the NYSE are confirmed at the offering price effective at that time, provided the order is received by an authorized broker or broker’s authorized designee prior to its close of business.

The alternative purchase arrangements permit an investor to choose the method of purchasing shares that is more beneficial given the amount of the purchase, the length of time the investor expects to hold the shares, whether the investor wishes to receive distributions in cash or to reinvest them in additional shares of the Funds, and other circumstances. Investors should consider whether, during the anticipated life of their investment in the Fund, the accumulated continuing distribution and services fees and CDSC on Class C Shares would be less than the initial sales charge and accumulated distribution services fee on Class A Shares purchased at the same time.

Investors should understand that the purpose and function of the CDSC and ongoing distribution and services fees with respect to the Class C Shares are the same as those of the initial sales charge and ongoing distribution and services fees with respect to the Class A Shares.

The distribution expenses incurred by the Distributor in connection with the sale of the shares will be paid, in the case of Class A Shares, from the proceeds of the initial sales charge and the ongoing distribution and service fee. For Class C Shares, the ongoing distribution and service fee will be used to pay for the distribution expenses incurred by the

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Distributor. Sales personnel of broker-dealers distributing the Funds’ shares may receive differing compensation for selling Class A Shares and Class C Shares.

Dividends paid by a Fund, if any, with respect to each class of shares will be calculated in the same manner at the same time on the same day, except that fees such as higher distribution and service fees and any incremental transfer agency costs relating to each class of shares will be borne exclusively by that class. (See “Dividends, Distributions and Taxes” in this SAI.)

Class A Shares

There is no sales charge applied to purchases of Class A Shares of the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a contingent deferred sales charge (“CDSC”) on the shares being exchanged for the Ultra-Short Bond Fund shares, as discussed below). Class A Shares of all other Funds incur a sales charge when they are purchased and enjoy the benefit of not being subject to any sales charge when they are redeemed, except that a CDSC may apply on certain redemptions made (including exchanges into the Ultra-Short Bond Funds) on which a finder's fee has been paid. For Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund and Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 12 months of a finder’s fee being paid; for all other Funds in this SAI (except the Ultra-Short Bond Funds), the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 18 months of a finder’s fee being paid. For all fixed income Funds in this SAI, the CDSC is 0.50%; for all other Virtus Mutual Funds in this SAI, the CDSC is 1.00%. The CDSC period begins on the last day of the month preceding the month in which the purchase was made. Such deferred sales charges may be waived under certain conditions as determined by the Distributor. Class A Shares are subject to ongoing distribution and services fees at an annual rate of 0.25% (0.15% for Seix High Grade Municipal Bond Fund, Seix Investment Grade Tax-Exempt Bond Fund and Seix Short-Term Municipal Bond Fund and 0.20% for Seix Short-Term Bond Fund and Seix U.S. Mortgage Fund) of the Fund’s aggregate average daily net assets attributable to the Class A Shares. In addition, certain purchases of Class A Shares qualify for reduced initial sales charges. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds (except to the extent an exchange into an Ultra-Short Bond Fund triggers a CDSC on the shares being exchanged for the Ultra-Short Bond Fund shares).

Class C Shares (Ceredex Large-Cap Value Equity Fund, Ceredex Mid-Cap Value Equity Fund, Ceredex Small- Cap Value Equity Fund, Seix Corporate Bond Fund, Seix Floating Rate High Income Fund, Seix Short-Term Bond Fund, Seix U.S. Mortgage Fund, Silvant Large-Cap Growth Stock Fund and Silvant Small-Cap Growth Stock Fund, only)

Class C Shares are purchased without an initial sales charge but are subject to a deferred sales charge if redeemed within one year of purchase. The deferred sales charge may be waived in connection with certain qualifying redemptions.

Shares issued in conjunction with the automatic reinvestment of income distributions and capital gain distributions are not subject to any sales charges. Class C Shares are subject to ongoing distribution and service fees of up to 1.00% of each Fund’s aggregate average daily net assets attributable to Class C Shares. Class C Shares enjoy the benefit of permitting all of the investor’s dollars to work from the time the investment is made. The higher ongoing distribution and services fee paid by Class C Shares will cause such shares to have a higher expense ratio and to pay lower dividends, to the extent any dividends are paid, than those related to Class A Shares.

Effective January 1, 2019, with certain exceptions, Class C Shares, and any reinvested dividends and other distributions paid on such shares (on a prorated basis), will automatically convert to Class A Shares after 10 years. However, for investors invested in Class C Shares through a financial intermediary or recordkeeper, it is the responsibility of the financial intermediary or recordkeeper to ensure that the investor is credited with the proper holding period for the shares redeemed. The automatic conversion of Class C Shares to Class A Shares shall not apply to shares held through intermediaries or recordkeepers that do not track the length of time that a participant has held such shares or that are not otherwise able to operationally support the automatic conversion feature.

In addition, certain Class C Shares may be exchangeable in advance of the 10 year anniversary. If you hold your shares through a financial intermediary or recordkeeper, please contact your financial intermediary or recordkeeper for additional information. Class C Shares that have been held directly with the Fund, and not through a financial intermediary, for fewer than 10 years may be exchanged at the Fund’s or Transfer Agent’s discretion for Class A Shares if (i) the Class C Shares are not subject to a CDSC, and (ii) a commission was not paid on the sale of such Class C Shares.

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A shares will generally be processed monthly on or about the 10th day of the month, although for investors invested in Class C Shares through a financial intermediary or recordkeeper, it is the responsibility of the financial intermediary or recordkeeper to determine the timing of the conversions. As of the date of this SAI, conversions and exchanges from Class C Shares to Class A Shares of the same Fund are not expected to be considered taxable events for Federal income tax purposes. Shareholders should consult their tax advisors regarding their own tax considerations.

Class I Shares

Class I Shares are offered primarily to clients of financial intermediaries that (i) charge such clients an ongoing fee for advisory, investment, consulting, or similar services; or (ii) have entered into an agreement with the Distributor to offer Class I Shares through a no-load network or platform. Such clients may include pension and profit sharing plans, other employee benefit trusts, endowments, foundations and corporations. Class I Shares are also offered to private and institutional clients of, or referred by, the Adviser, the subadvisers, their affiliates, and to Trustees of the funds and trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus and its affiliates.

Class R Shares (Seix Core Bond Fund, Seix High Income Fund, Seix High Yield Fund and Seix Total Return Bond Fund, only)

Class R Shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans and other retirement plan platforms, including brokers, dealers, banks, insurance companies, retirement plan record-keepers and others. Class R Shares require an agreement with the Funds prior to investment. Class R Shares may also be purchased by shareholders of the Seix Total Return Bond Fund (formerly, the RidgeWorth Seix Total Return Bond Fund) who owned C Shares in the Fund on February 12, 2009 and by shareholders of the Seix Core Bond Fund (formerly, the RidgeWorth Seix Core Bond Fund), the Seix High Income Fund (formerly, the RidgeWorth Seix High Income Fund), and the Seix High Yield Fund (formerly, the RidgeWorth Seix High Yield Fund) who owned C Shares in the applicable Fund on July 31, 2009. If you are eligible to purchase and do purchase Class R Shares, you will pay no sales charge at any time. Class R Shares have higher distribution and service fees (0.50%) and pay lower dividends than Class A Shares. Class R Shares do not convert to any other class of shares of the Funds, so the higher distribution and service fees paid by Class R Shares continue for the life of the account.

Class R6 Shares (Ceredex Large-Cap Value Equity Fund, Ceredex Mid-Cap Value Equity Fund, Ceredex Small-Cap Value Equity Fund, Seix Core Bond Fund, Seix Floating Rate High Income Fund, Seix High Income Fund, Seix High Yield Fund, Seix Total Return Bond Fund, Seix U.S. Government Securities Ultra-Short Bond Fund, Silvant Large-Cap Growth Stock Fund and WCM International Equity Fund, only)

Class R6 Shares are available only to certain employer-sponsored retirement plans, including profit-sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans, and plans described in Section 401(k), 403(b) and 457 of the Internal Revenue Code, where plan level or omnibus accounts are held on the books of the fund. Other institutional investors may be permitted to purchase Class R6 Shares subject to the fund’s determination of eligibility and may be subject to a $2,500,000 minimum initial investment requirement. Class R6 Shares are not available to traditional or Roth IRAs, Coverdell Savings Accounts, Keoghs, SEPs, SARSEPs, or Simple IRAs and are not available through retail, advisory fee-based wrap platforms. Individual shareholders who purchase Class R6 Shares through retirement platforms or other intermediaries are not eligible to hold Class R6 Shares outside of their respective plan or intermediary platform. If you are eligible to purchase and do purchase Class R6 Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class R6 Shares.

Class A Shares — Reduced Initial Sales Charges

Investors choosing Class A Shares may be entitled to reduced initial sales charges. The ways in which initial sales charges may be avoided or reduced are described below. Investors buying Class A Shares on which a finder’s fee has been paid may incur a CDSC if they redeem their shares within specified periods. For Seix Short-Term Bond Fund, Seix Short-Term Municipal Bond Fund and Seix U.S. Mortgage Fund, the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 12 months of a finder’s fee being paid; for all other Funds in this SAI (except the Ultra-Short Bond Funds), the CDSC may be imposed on redemptions made (including exchanges into the Ultra-Short Bond Funds) within 18 months of a finder’s fee being paid. For all Virtus fixed income Funds discussed in this SAI, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. The CDSC period begins on the last day of the month preceding the month in which the purchase was made. Such deferred sales charge may be waived under certain conditions as determined by the Distributor or Transfer Agent. There is no CDSC or finder’s fee applicable to the Ultra-Short Bond Funds.

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Qualified Purchasers