VIRTUS INSIGHT TRUST (Form: 485BPOS, Received: 04/29/2013 17:02:09)

As filed with the Securities and Exchange Commission on April 29, 2013

File No. 033-64915

File No. 811-07447

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

Under


		*the SECURITIES ACT OF 1933*
		Pre-Effective Amendment No.		¨
		Post-Effective Amendment No. 56		x

and/or

REGISTRATION STATEMENT

Under


		*the INVESTMENT COMPANY ACT OF 1940*		¨
		Amendment No. 59		x

(Check appropriate box or boxes)

Virtus Insight Trust

(Exact Name of Registrant as Specified in Charter)

Area Code and Telephone Number: (800) 243-1574

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

It is proposed that this filing will become effective (check appropriate box):

immediately upon filing pursuant to paragraph (b)

on May 1, 2013 pursuant to paragraph (b) of Rule 485

60 days after filing pursuant to paragraph (a)(1)

on or at such later date as the Commission shall order pursuant to paragraph (a)(2)

75 days after filing pursuant to paragraph (a)(2)

on pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

LOGO


PROSPECTUS

	TICKER SYMBOL BY CLASS
FUND	A	C	I
Virtus Emerging Markets Opportunities Fund	HEMZX	PICEX	HIEMX

Virtus High Yield Income Fund	HHYZX	PYHCX	HHYIX

Virtus Insight Government Money Market Fund	HIGXX		HGCXX

Virtus Insight Money Market Fund	HICXX		HACXX

Virtus Insight Tax-Exempt Money Market Fund	HITXX		HTCXX

Virtus Low Duration Income Fund	HIMZX	PCMZX	HIBIX

Virtus Tax-Exempt Bond Fund	HXBZX	PXCZX	HXBIX


TRUST NAME:
VIRTUS INSIGHT TRUST				May 1, 2013

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.

Not FDIC Insured

No Bank Guarantee May Lose Value

Virtus Mutual Funds



Table of Contents

FUND SUMMARIES
Virtus Emerging Markets Opportunities Fund			1
Virtus High Yield Income Fund			5
Virtus Insight Government Money Market Fund			9
Virtus Insight Money Market Fund			12
Virtus Insight Tax-Exempt Money Market Fund			15
Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)			18
Virtus Tax-Exempt Bond Fund			22

MORE INFORMATION ABOUT FUND EXPENSES			26

MORE INFORMATION ABOUT INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES			27
Virtus Emerging Markets Opportunities Fund			28
Virtus High Yield Income Fund			29
Virtus Insight Government Money Market Fund			30
Virtus Insight Money Market Fund			31
Virtus Insight Tax-Exempt Money Market Fund			32
Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)			33
Virtus Tax-Exempt Bond Fund			35

MORE INFORMATION ABOUT RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES			36

MANAGEMENT OF THE FUNDS			40

ADDITIONAL INVESTMENT TECHNIQUES			45

PRICING OF FUND SHARES			49

SALES CHARGES			50

YOUR ACCOUNT			56

HOW TO BUY SHARES			58

HOW TO SELL SHARES			59

THINGS YOU SHOULD KNOW WHEN SELLING SHARES			60

ACCOUNT POLICIES			61

INVESTOR SERVICES AND OTHER INFORMATION			64

TAX STATUS OF DISTRIBUTIONS			65

MASTER FUND/FEEDER FUND STRUCTURE			65

FINANCIAL HIGHLIGHTS			66

Virtus Emerging Markets Opportunities Fund

Investment Objective

The fund has an investment objective of providing capital appreciation.

Fees and Expenses

The tables below illustrate all 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 Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and under “Sales Charges” on page 50 of the fund’s prospectus and “Alternative Purchase Arrangements” on page 101 of the fund’s statement of additional information.

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%

None

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

1.00%

^(a)

1.00%

^(b)

None


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			0.96%			0.96%			0.96%
Distribution and Shareholder Servicing (12b-1) Fees			0.25%			1.00%			None
Other Expenses:
Shareholder Servicing Fees		None			None			0.05%
Remainder of Other Expenses		0.35%			0.35%			0.35%
Total Other Expenses ^(c)			0.35%			0.35%			0.40%
Acquired Fund Fees and Expenses			0.01%			0.01%			0.01%
Total Annual Fund Operating Expenses ^(d)			1.57%			2.32%			1.37%

(a)

Generally, Class A Shares are not subject to any charges by the Fund when redeemed; however, a contingent deferred sales charge may be imposed on certain redemptions within 18 months on exchanges from a Virtus non-money market fund into a Virtus money market fund and purchases on which a finder’s fee has been paid. The 18-month period begins on the last day of the month preceding the month in which the purchase was made.

(b)

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

(c)

Restated to reflect current expenses.

(d)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expense 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.

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. 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 and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$726		$1,042		$1,381		$2,335
Class C	Sold		$335		$724		$1,240		$2,656
	Held		$235		$724		$1,240		$2,656
Class I	Sold or Held		$139		$434		$750		$1,646


Virtus Emerging Markets Opportunities Fund			1

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 year, the fund’s portfolio turnover rate was 28% of the average value of its portfolio.

Investments, Risks and Performance

Principal Investment Strategies

This fund offers investors exposure to emerging economies through well-established companies. The securities selected for inclusion in the fund are those that in the opinion of the subadviser are well-managed businesses with consistent operating histories and financial performance that have favorable long-term economic prospects and, in most cases, generate free cash flow. Over full market cycles, the investment style is designed with the objective of capturing part of the up market cycles and may offer protection in down market cycles.

Under normal circumstances, the fund invests at least 80% of its assets in equity securities or equity-linked instruments of issuers located in emerging markets countries; such issuers may be of any capitalization. Emerging markets countries generally include every nation in the world except the U.S., Canada, Japan, Australia, New Zealand and most nations located in Western Europe. In determining “location” of an issuer, the subadviser primarily relies on the country where the issuer is incorporated. However, the country of risk is ultimately determined based on analysis of the following criteria: actual building address (domicile), primary exchange on which the security is traded and country in which the greatest percentage of company revenue is generated. This evaluation is conducted so as to determine that the issuer’s assets are exposed to the economic fortunes and risks of the designated country.

Principal Risks

The fund may not achieve its objective, 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 adviser expects. As a result, the value of your shares may decrease. The principal risks of investing in the fund are:

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.

Equity-Linked Instruments Risk. The risk that, in addition to market risk and other risks of the referenced equity security, the fund may experience a return that is different from that of the referenced equity security. Equity-linked instruments also subject the fund to counterparty risk, including the risk that the issuing entity may not be able to honor its financial commitment, which could result in a loss of all or part of the fund’s investment.

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 small and medium-sized companies may be more volatile than investments in larger companies.

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 economic, political or other developments.

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.

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 companies and/or general economic conditions. Price changes may be temporary or may last for extended periods.


2		Virtus Emerging Markets Opportunities Fund

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 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 and a more narrowly-based benchmark 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.

LOGO


Best Quarter: Q2/2009: 26.74%		Worst Quarter: Q3/2008: -21.96%		Year-to-date (3/31/13): 1.55%

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

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


	1 Year		5 Years		10 Years		Since Inception Class C (6/26/06)
Class I
Return Before Taxes		19.88%		3.68%		17.65%		—
Return After Taxes on Distributions		18.51%		3.08%		15.45%		—
Return After Taxes on Distributions and Sale of Fund Shares		12.03%		2.90%		15.20%		—
Class A
Return Before Taxes		12.75%		2.22%		16.69%		—
Class C
Return Before Taxes		18.66%		2.69%		—		11.23%
S&P 500 ^® Index (reflects no deduction for fees, expenses or taxes)		16.00%		1.66%		7.10%		4.26%
MSCI Emerging Markets Free Index (net) (reflects no deduction for fees, expenses or taxes)		18.22%		-0.92%		16.52%		9.00%

The S&P 500 ^® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The MSCI Emerging Markets Free Index (net) is a free float-adjusted market capitalization-weighted index that measures developed equity market performance in the global emerging markets. The indexes are calculated on a total return basis with net dividends reinvested. The indexes are 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.


Virtus Emerging Markets Opportunities Fund			3

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc.

The fund’s subadviser is Vontobel Asset Management, Inc. (“Vontobel”).

Portfolio Manager

Rajiv Jain, Managing Director at Vontobel. Mr. Jain has served as a Portfolio Manager of the fund since 2006.

Purchase and Sale of Fund Shares

NOTE: Virtus Emerging Markets Opportunities Fund is no longer available for purchase by new investors. Please see “How to Buy Shares” in the fund’s prospectus for details.


Purchase Minimums (except Class I Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

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


4		Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Investment Objective

The fund has an investment objective of providing a high level of total return through a combination of income and capital appreciation.

Fees and Expenses

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%

None

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

0.50%

^(a)

1.00%

^(b)

None


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			0.45%			0.45%			0.45%
Distribution and Shareholder Servicing (12b-1) Fees			0.25%			1.00%			None
Other Expenses:
Shareholder Servicing Fees		None			None			0.05%
Remainder of Other Expenses		0.33%			0.33%			0.33%
Total Other Expenses ^(c)			0.33%			0.33%			0.38%
Total Annual Fund Operating Expenses			1.03%			1.78%			0.83%

(a)

(b)

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

(c)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$476		$691		$922		$1,587
Class C	Sold		$281		$560		$964		$2,095
	Held		$181		$560		$964		$2,095
Class I	Sold or Held		$85		$265		$460		$1,025

Portfolio Turnover


Virtus High Yield Income Fund			5

Investments, Risks and Performance

Principal Investment Strategies

The fund will seek to achieve its investment objective by investing in a diversified pool of fixed income securities, primarily within the U.S. non-investment grade bond market. The fund aims to generate excess returns by balancing risk and reward through rigorous asset selection and continual monitoring of portfolio positions. The fund seeks to provide investors with current income, relatively low volatility and capital preservation over time.

Under normal circumstances, the fund invests at least 80% of its assets in a diversified portfolio of domestic and foreign high-yield, high-risk fixed income securities. The subadviser generally maintains the duration of the fund in line with that of its style benchmark, the BofA Merrill Lynch U.S. High Yield Master II Constrained Index.

Principal Risks

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.

Credit Risk. The risk that the issuer of a security 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 security to decline.

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.

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

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

Long-Term Maturities/Durations Risk. The risk of greater price fluctuations than would be associated with securities having shorter maturities or durations.

U.S. Government Securities Risk. The risk that the 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.


6		Virtus High Yield Income Fund

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.

LOGO


Best Quarter: Q2/2009: 11.28%		Worst Quarter: Q4/2008: -13.71%		Year-to-date (3/31/13): 2.60%

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

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


							Since Inception
	1 Year		5 Years		10 Years		Class A (5/14/04)		Class C (6/26/06)
Class I
Return Before Taxes		12.59%		6.55%		7.25%		—		—
Return After Taxes on Distributions		5.28%		2.87%		4.06%		—		—
Return After Taxes on Distributions and Sale of Fund Shares		3.43%		2.97%		4.11%		—		—
Class A
Return Before Taxes		7.97%		5.51%		—		5.73%		—
Class C
Return Before Taxes		11.37%		5.49%		—		—		5.54%
Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		4.22%		5.95%		5.18%		5.64%		6.52%
High Yield Income Linked Benchmark (reflects no deduction for fees, expenses or taxes)		15.55%		10.27%		10.51%		9.24%		9.56%

The Barclays U.S. Aggregate Bond Index measures the U.S. investment-grade fixed-rate bond market. The High Yield Income Linked Benchmark consists of the BofA Merrill Lynch U.S. High Yield Master II Constrained Index, a capitalization-weighted index which measures the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Total index allocation to an individual issuer is limited to 2%. Performance of the High Yield Income Linked Benchmark prior to 5/18/2010 is that of the Barclays U.S. High Yield 2% Issuer Capped Bond Index. The indexes are calculated on a total return basis. The indexes are unmanaged and not available for direct investment.


Virtus High Yield Income Fund			7

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc.

The fund’s subadviser is Monegy, Inc. (“Monegy”).

Portfolio Managers

Lori J. Marchildon, CFA, Portfolio Manager at Monegy and a member of its Investment Policy Committee. Ms. Marchildon has served as a Portfolio Manager of the fund since May 2010.

Ovidiu Sandu, CFA, Associate Portfolio Manager and Senior Quantitative Analyst at Monegy and a member of its Investment Policy Committee. Mr. Sandu has served as an Assistant Portfolio Manager of the fund since May 2010.

Sadhana Valia, CFA, Head of the High Yield Team and Senior Portfolio Manager at Monegy and a member of its Investment Policy Committee. Ms. Valia has served as a Portfolio Manager of the fund since May 2010.

Purchase and Sale of Fund Shares


Purchase Minimums (except Class I Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries


8		Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Investment Objective

The fund has an investment objective of providing as high a level of current income from government obligations as is consistent with preservation of capital and liquidity.

Fees and Expenses

The tables below illustrate all fees and expenses that you may pay if you buy and hold shares of 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)		None		None
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)		None		None


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			0.10%			0.10%
Distribution and Shareholder Servicing (12b-1) Fees			0.10%			None
Other Expenses:
Shareholder Servicing Fees		0.25%			0.05%
Remainder of Other Expenses		0.07%			0.07%
Total Other Expenses ^(a)			0.32%			0.12%
Total Annual Fund Operating Expenses			0.52%			0.22%

(a)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$53		$167		$291		$653
Class I	Sold or Held		$23		$71		$124		$280

Investments, Risks and Performance

Principal Investment Strategies

With an emphasis on preservation of capital and liquidity, this fund seeks to generate high current income by investing in high-quality short-term money market instruments that, in the opinion of the fund’s subadviser, present minimal credit risks. The fund normally invests at least 80% of its assets in government money market securities.

Principal Risks

The fund may not achieve its objective, 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. An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The principal risks of investing in the fund are:

Counterparty Risk. The risk that a party upon whom the fund relies to consummate a transaction will default.


Virtus Insight Government Money Market Fund			9

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

Principal Stability Risk. The risk that the fund may not be able to maintain a stable net asset value of $1.00.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

LOGO


Best Quarter: Q 2/2007: 1.28%		Worst Quarter: Q2/2011: 0.00%		Year-to-date (3/31/13): 0.00%

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


	1 Year		5 Years		10 Years
Class I		0.01%		0.52%		1.78%
Class A		0.01%		0.40%		1.56%

As of December 31, 2012, the fund’s 7-day yield for Class A Shares was 0.01% and for Class I Shares was 0.01%. For current yield information, call 800-243-1574.

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc.

The fund’s subadviser is BMO Asset Management Corp. (“BMO AM”).

Portfolio Managers

Peter J. Arts, Managing Director and Head of Fixed Income at BMO AM. Mr. Arts has served as a Portfolio Manager of the fund since 2004.

Boyd R. Eager, Director and Senior Portfolio Manager at BMO AM. Mr. Eager has served as a Portfolio Manager of the fund since 2004.

Purchase and Sale of Fund Shares


Purchase Minimums (Class A Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum


10		Virtus Insight Government Money Market Fund

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

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.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries


Virtus Insight Government Money Market Fund			11

Virtus Insight Money Market Fund

Investment Objective

The fund has an investment objective of providing as high a level of current income as is consistent with its investment policies and with preservation of capital and liquidity.

Fees and Expenses

The tables below illustrate all fees and expenses that you may pay if you buy and hold shares of 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)		None		None
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)		None		None


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			0.11%			0.11%
Distribution and Shareholder Servicing (12b-1) Fees			0.10%			None
Other Expenses:
Shareholder Servicing Fees		0.25%			0.05%
Remainder of Other Expenses		0.10%			0.10%
Total Other Expenses ^(a)			0.35%			0.15%
Total Annual Fund Operating Expenses			0.56%			0.26%

(a)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$57		$179		$313		$701
Class I	Sold or Held		$27		$84		$146		$331

Investments, Risks and Performance

Principal Investment Strategies

The fund invests only in high-quality short-term money market instruments that, in the opinion of the fund’s subadviser, present minimal credit risks. The fund invests in a broad range of short-term money market instruments, including U.S. Government securities, repurchase agreements, as well as bank and commercial obligations. Commercial paper purchases by the fund will consist of U.S. dollar-denominated direct obligations of domestic and foreign corporate issuers, including bank holding companies.

Principal Risks

The fund may not achieve its objective, 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. An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The principal risks of investing in the fund are:

Counterparty Risk. The risk that a party upon whom the fund relies to consummate a transaction will default.


12		Virtus Insight Money Market Fund

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

Principal Stability Risk. The risk that the fund may not be able to maintain a stable net asset value of $1.00.

Performance Information

The bar chart shows changes in the fund’s performance from year to year over a 10-year period. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

LOGO


Best Quarter: Q3/2007: 1.34%		Worst Quarter: Q3/2012: 0.00%		Year-to-date (3/31/13): 0.00%

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


	1 Year		5 Years		10 Years
Class I		0.03%		0.73%		1.94%
Class A		0.01%		0.56%		1.70%

As of December 31, 2012, the fund’s 7-day yield for Class A Shares was 0.01% and for Class I Shares was 0. 18%. For current yield information, call 800-243-1574.

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc.

The fund’s subadviser is BMO Asset Management Corp. (“BMO AM”).

Portfolio Managers

Peter J. Arts, Managing Director and Head of Fixed Income at BMO AM. Mr. Arts has served as a Portfolio Manager of the fund since 2004.

Boyd R. Eager, Director and Senior Portfolio Manager at BMO AM. Mr. Eager has served as a Portfolio Manager of the fund since 2004.


Virtus Insight Money Market Fund			13

Purchase and Sale of Fund Shares


Purchase Minimums (Class A Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries


14		Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Investment Objective

The fund has an investment objective of providing as high a level of current income that is exempt from federal income taxes as is consistent with its investment policies and with preservation of capital and liquidity.

Fees and Expenses

The tables below illustrate all fees and expenses that you may pay if you buy and hold shares of 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)		None		None
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)		None		None


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			0.12%			0.12%
Distribution and Shareholder Servicing (12b-1) Fees			0.10%			None
Other Expenses:
Shareholder Servicing Fees		0.25%			0.05%
Remainder of Other Expenses		0.09%			0.09%
Total Other Expenses ^(a)			0.34%			0.14%
Total Annual Fund Operating Expenses			0.56%			0.26%

(a)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$57		$179		$313		$701
Class I	Sold or Held		$27		$84		$146		$331

Investments, Risks and Performance

Principal Investment Strategies

The fund normally invests primarily in U.S. dollar-denominated municipal securities. Under normal circumstances, the fund invests at least 80% of its assets in high-quality short-term money market instruments that generate income that is generally exempt from federal income tax and not subject to the alternative minimum tax.

Principal Risks

The fund may not achieve its objective, 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. An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The principal risks of investing in the fund are:

Counterparty Risk. The risk that a party upon whom the fund relies to consummate a transaction will default.


Virtus Insight Tax-Exempt Money Market Fund			15

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

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.

Principal Stability Risk. The risk that the fund may not be able to maintain a stable net asset value of $1.00.

Tax-Exempt Securities Risk. The risk that tax-exempt securities may not provide a higher after-tax return than taxable securities.

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. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

LOGO


Best Quarter: Q2/2006: 0.93%		Worst Quarter: Q3/2012: 0.00%		Year-to-date (3/31/13): 0.00%

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


	1 Year		5 Years		10 Years
Class I		0.01%		0.53%		1.37%
Class A		0.01%		0.39%		1.13%

As of December 31, 2012, the fund’s 7-day yield for Class A Shares was 0.01% and for Class I Shares was 0.01%. For current yield information, call 800-243-1574.

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc.

The fund’s subadviser is BMO Asset Management Corp. (“BMO AM”).

Portfolio Managers

Peter J. Arts, Managing Director and Head of Fixed Income BMO AM. Mr. Arts has served as a Portfolio Manager of the fund since 2004.

Boyd R. Eager, Director and Senior Portfolio Manager at BMO AM. Mr. Eager has served as a Portfolio Manager of the fund since 2006.


16		Virtus Insight Tax-Exempt Money Market Fund

Purchase and Sale of Fund Shares


Purchase Minimums (Class A Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

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


Virtus Insight Tax-Exempt Money Market Fund			17

Virtus Low Duration Income Fund

(formerly Virtus Short/Intermediate Bond Fund)

Investment Objective

The fund’s investment objective is to provide a high level of total return, including a competitive level of current income, while limiting fluctuations in net asset value due to changes in interest rates.

Fees and Expenses

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%

None

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

0.50%

^(a)

1.00%

^(b)

None


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			0.55%			0.55%			0.55%
Distribution and Shareholder Servicing (12b-1) Fees			0.25%			1.00%			None
Other Expenses:
Shareholder Servicing Fees		None			None			0.05%
Remainder of Other Expenses		0.36%			0.36%			0.36%
Total Other Expenses ^(c)			0.36%			0.36%			0.41%
Total Annual Fund Operating Expenses			1.16%			1.91%			0.96%

(a)

(b)

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

(c)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$341		$585		$849		$1,602
Class C	Sold		$294		$600		$1,032		$2,233
	Held		$194		$600		$1,032		$2,233
Class I	Sold or Held		$98		$306		$531		$1,178


18		Virtus Low Duration Income Fund

Portfolio Turnover

Investments, Risks and Performance

Principal Investment Strategies

The fund seeks current income with an emphasis on maintaining low volatility and overall short duration (within a range of 1-3 years) by investing primarily in higher quality, more liquid securities across 14 fixed income sectors. The fund seeks to achieve its objective by applying a time-tested approach of active sector rotation, extensive credit research and disciplined risk management designed to capitalize on opportunities across undervalued areas of the fixed income markets.

Under normal circumstances, the fund invests at least 80% of its assets in fixed income debt obligations of various types of issuers, to include some or all of the following:

Securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities, including collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs), and other pass-through securities;

Debt securities issued by foreign issuers, including foreign governments and their political subdivisions;

Investment-grade securities (primarily of U.S. issuers, secondarily of non-U.S. issuers), which are securities with credit ratings within the four highest rating categories of a nationally recognized statistical rating organization; and

High-yield debt instruments, including bank loans (which are generally floating-rate).

The fund may invest in all or some of these sectors.

Principal Risks

The fund may not achieve its objectives, 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 adviser expects. As a result, the value of your shares may decrease. The principal risks of investing in the fund are:

Emerging Market 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.

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

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


Virtus Low Duration Income Fund			19

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.

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.

LOGO


Best Quarter: Q2/2009: 5.42%		Worst Quarter: Q3/2008: -3.18%		Year-to-date (3/31/13): 0.51%

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

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


	1 Year		5 Years		10 Years		Since Inception (6/26/06)
Class I
Return Before Taxes		6.40%		5.44%		4.44%		—
Return After Taxes on Distributions		3.98%		3.82%		2.90%		—
Return After Taxes on Distributions and Sale of Fund Shares		2.59%		3.57%		2.81%		—
Class A
Return Before Taxes		3.75%		4.70%		3.94%		—
Class C
Return Before Taxes		5.44%		4.41%		—		4.54%
Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		4.22%		5.95%		5.18%		6.52%
Barclays U.S. Intermediate Government/Credit Bond Index (reflects no deduction for fees, expenses or taxes)		3.89%		5.18%		4.62%		5.84%


20		Virtus Low Duration Income Fund

The Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The Barclays U.S. Intermediate Government/Credit Bond Index measures U.S. investment grade government and corporate debt securities with an average maturity of four to five years. The indexes are calculated on a total return basis. The indexes are unmanaged and not available for direct investment.

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc. (“VIA”).

The fund’s subadviser is Newfleet Asset Management, LLC (“Newfleet”), an affiliate of VIA.

Portfolio Managers

David L. Albrycht, CFA, President and Chief Investment Officer at Newfleet. Mr. Albrycht has served as a Portfolio Manager of the fund since May 2012.

Benjamin Caron, CFA, Senior Managing Director and Portfolio Manager at Newfleet. Mr. Caron has served as a Portfolio Manager of the fund since May 2012.

Christopher J. Kelleher, CFA, CPA, Senior Managing Director and Senior Portfolio Manager at Newfleet. Mr. Kelleher has served as a Portfolio Manager of the fund since October 2012.

Purchase and Sale of Fund Shares


Purchase Minimums (except Class I Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries


Virtus Low Duration Income Fund			21

Virtus Tax-Exempt Bond Fund

Investment Objective

The fund has an investment objective of providing a high level of current income that is exempt from federal income tax.

Fees and Expenses

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)

2.75%

None

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

0.50%

^(a)

1.00%

^(b)

None


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			0.45%			0.45%			0.45%
Distribution and Shareholder Servicing (12b-1) Fees			0.25%			1.00%			None
Other Expenses:
Shareholder Servicing Fees		None			None			0.05%
Remainder of Other Expenses		0.29%			0.29%			0.29%
Total Other Expenses ^(c)			0.29%			0.29%			0.34%
Total Annual Fund Operating Expenses			0.99%			1.74%			0.79%

(a)

(b)

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

(c)

Restated to reflect current expenses.

Example


	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held		$373		$582		$807		$1,455
Class C	Sold		$277		$548		$944		$2,052
	Held		$177		$548		$944		$2,052
Class I	Sold or Held		$81		$252		$439		$978

Portfolio Turnover


22		Virtus Tax-Exempt Bond Fund

Investments, Risks and Performance

Principal Investment Strategies

The fund seeks to generate high current income exempt from federal income tax by investing in a diversified portfolio of municipal bonds with varying maturities. The management team focuses on high quality tax-exempt municipal bonds, gauging the value of a security by issue type, credit quality, and bond structure.

Under normal circumstances, as a matter of fundamental policy, the fund invests at least 80% of its assets in municipal bonds, the income from which is exempt from federal income tax. The portion of the fund’s assets not invested in tax-exempt securities may be invested in taxable fixed income securities. Income from these investments may be subject to federal, state, and local taxes.

Principal Risks

Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.

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

Tax-Exempt Securities Risk. The risk that tax-exempt securities may not provide a higher rate of return than taxable securities.

Performance Information


Virtus Tax-Exempt Bond Fund			23

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.

LOGO


Best Quarter: Q3/2009: 10.03%		Worst Quarter: Q3/2008: -5.64%		Year-to-date (3/31/13): -0.07%

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

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


	1 Year		5 Years		10 Years		Since Inception Class C (6/26/06)
Class I
Return Before Taxes		7.72%		6.51%		5.26%		—
Return After Taxes on Distributions		4.68%		5.89%		4.86%		—
Return After Taxes on Distributions and Sale of Fund Shares		3.05%		5.54%		4.77%		—
Class A
Return Before Taxes		4.50%		5.66%		4.71%		—
Class C
Return Before Taxes		6.74%		5.47%		—		5.19%
Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		4.22%		5.95%		5.18%		6.52%
Barclays Municipal Bond Index (reflects no deduction for fees, expenses or taxes)		6.78%		5.91%		5.10%		5.78%

The Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The Barclays Municipal Bond Index is a market capitalization-weighted index that measures the long-term tax-exempt bond market. The indexes are calculated on a total return basis. The indexes are unmanaged and not available for direct investment.


24		Virtus Tax-Exempt Bond Fund

Management

The fund’s investment adviser is Virtus Investment Advisers, Inc. (“VIA”).

The fund’s subadviser is Newfleet Asset Management, LLC (“Newfleet”), an affiliate of VIA.

Portfolio Managers

Timothy M. Heaney, CFA, Senior Managing Director and Senior Portfolio Manager—Municipal Securities at Newfleet. Mr. Heaney has served as a Portfolio Manager of the fund since June 2012.

Lisa H. Leonard, Managing Director and Portfolio Manager—Municipal Securities at Newfleet. Ms. Leonard has served as a Portfolio Manager of the fund since June 2012.

Purchase and Sale of Fund Shares


Purchase Minimums (except Class I Shares)
Minimum Initial Purchase		$2,500
Individual Retirement Accounts (IRAs), systematic purchase or systematic exchange accounts		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum
Minimum Additional Purchase		$100
Defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans		No minimum

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

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.

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries


Virtus Tax-Exempt Bond Fund			25

More Information About Fund Expenses

Virtus Investment Advisers, Inc. (“VIA”) has voluntarily agreed to limit the total operating expenses (excluding interest, taxes, extraordinary expenses and acquired fund fees and expenses, if any) of certain of the funds so that such expenses do not exceed, on an annualized basis, the amounts indicated in the following table.


	Class A Shares		Class C Shares		Class I Shares
Virtus Low Duration Income Fund		0.95%		1.70%		0.75%
Virtus Tax-Exempt Bond Fund		0.85%		1.60%		0.65%

VIA may discontinue these arrangements at any time. Under certain conditions, VIA may recapture operating expenses waived or reimbursed under these arrangements for a period of three years following the fiscal year in which such reimbursement and/or waiver occurred.

With respect to all of the funds, the funds’ distributor has voluntarily agreed to waive the Class I Shares’ shareholder servicing fees. The distributor may discontinue this voluntary waiver at any time.

With respect to Virtus Insight Government Money Market Fund, Virtus Insight Money Market Fund and Virtus Insight Tax-Exempt Money Market Fund, the distributor may from time to time waive the Distribution (12b-1) Fees and/or Shareholder Servicing Fees on Class A Shares. Also, with respect to these funds, VIA may from time to time waive all or a portion of its management fees. If waived, the Distribution (12b-1) Fees, Shareholder Servicing Fees and/or management fees may be reinstated at any time.

For those funds operating under an expense reimbursement arrangement and/or fee waiver for 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 were:


	Class A Shares		Class C Shares		Class I Shares
Virtus Emerging Markets Opportunities Fund		1.61%		2.36%		1.36%
Virtus High Yield Income Fund		1.04%		1.79%		0.79%
Virtus Insight Government Money Market Fund		0.15%		N/A		0.15%
Virtus Insight Money Market Fund		0.22%		N/A		0.20%
Virtus Insight Tax-Exempt Money Market Fund		0.13%		N/A		0.13%
Virtus Low Duration Income Fund		0.96%		1.71%		0.73%
Virtus Tax-Exempt Bond Fund		0.87%		1.62%		0.62%


26		Virtus Mutual Funds

More Information About Investment Objectives and Principal Investment Strategies

The investment objectives and principal strategies of each fund are described in this section. Each of the funds has a non-fundamental investment objective. A non-fundamental investment objective may be changed by the Board of Trustees of that fund without shareholder approval. If a fund’s investment objective is changed, the prospectus will be supplemented to reflect the new investment objective. To the extent that there is a material change in a fund’s investment objective, shareholders will be provided with reasonable notice. There is no guarantee that a fund will achieve its objective.

Please see the statement of additional information (“SAI”) for additional information about the securities and investment strategies described in this prospectus and about additional securities and investment strategies that may be used by the funds.


Virtus Mutual Funds			27

Virtus Emerging Markets Opportunities Fund

NOTE: Virtus Emerging Markets Opportunities Fund is no longer available for purchase by new investors. Please see “How to Buy Shares” in this prospectus for details.

Non-Fundamental Investment Objective:

The fund has an investment objective of providing capital appreciation.

Principal Investment Strategies:

Under normal circumstances, at least 80% of the fund’s assets are invested in equity securities of issuers located in emerging markets countries. The World Bank and other international agencies define an emerging or developing country on the basis of such factors as trade initiatives, per capita income and level of industrialization. Emerging markets countries generally include every nation in the world except the U.S., Canada, Japan, Australia, New Zealand and most nations located in Western Europe. The fund’s policy of investing at least 80% of its assets in the securities of issuers located in emerging markets countries may be changed only upon 60 days’ written notice to shareholders.

Generally, the subadviser uses a bottom-up stock and business analysis approach. The subadviser makes its assessments by examining companies one at a time, regardless of size, country of organization, place of principal business activity, or other similar selection criteria. The fund may invest substantially all of its assets in common stocks if the subadviser believes that common stocks will appreciate in value. The subadviser seeks to identify companies whose businesses are highly profitable, have consistent operating histories and financial performance and enjoy generally favorable long-term economic prospects.

A company may be sensibly priced when, in the opinion of the subadviser, the company is selling for a price that is below its intrinsic worth. A company may be sensibly priced due to market or economic conditions, temporary earnings declines, unfavorable developments affecting the company or other factors. Such factors may include buying opportunities at attractive prices compared to the subadviser’s calculation of future earnings power. The subadviser believes that buying these securities at a price that is below their intrinsic worth may generate greater returns for the fund than those obtained by paying a premium price for companies currently in favor in the market.

The subadviser seeks to achieve attractive absolute returns that exceed the “normalized risk-free” rate, defined as the rate of return available on long-term government securities or their equivalent in each country in which the fund invests. Utilization of an “absolute” rather than a “relative” valuation yardstick is designed not only to achieve a satisfactory return over the risk-free rate over a full market cycle, but at the same time to seek safety of principal. The subadviser considers the riskiness of an investment to be a function of the issuer’s business rather than the volatility of its stock price.

In determining which portfolio securities to sell, the subadviser focuses on the operating results of the portfolio companies, not price quotations, to measure the success of an investment. In making sell decisions, the subadviser considers, among other things, whether a security’s price target has been met, whether there has been an overvaluation of the issuer by the market, whether there has been a clear deterioration of future earnings power and whether, in the subadviser’s opinion, there has been a loss of a long-term competitive advantage.

Temporary Defensive Strategy: If the subadviser does not believe that 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 all of its assets in domestic and foreign short-term money market instruments, including government obligations, certificates of deposit, bankers’ acceptances, time deposits, commercial paper, short-term corporate debt securities and repurchase agreements. When this allocation happens, the fund may not achieve its investment objective.

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


28		Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of providing a high level of total return through a combination of income and capital appreciation.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its assets in a diversified portfolio of domestic and foreign high-yield, high-risk fixed income securities. The fund’s policy of investing 80% of its assets in high-yield fixed income securities may be changed only upon 60 days’ written notice to shareholders.

The subadviser uses an investment process that seeks to add value by balancing risk and reward through rigorous issuer and security selection, opportunistic trading, continual monitoring and active management.

The subadviser employs a bottom-up quantitative approach to security selection, complemented by fundamental analysis and a top-down sector overlay. Issuers believed by the subadviser to exhibit a relatively low default risk and provide bond yields/spreads that adequately compensate for the risk, are generally over weighted.

The subadviser puts an emphasis on quality issuers with attractive yields/spreads and mitigates credit risk by using quantitative screens designed to eliminate high-risk issuers and unattractive risk/return securities from consideration. To ensure selection of quality securities the manager uses quantitative analytics and conducts fundamental analysis focusing on the issuer’s competitive position, industry dynamics, cash flow, asset mix, liquidity position, debt coverage, degree of leverage and management.

Principally, securities are selected from a broad universe of domestic high-yield corporate bonds, although the fund may also invest in other types of high-yield securities.

The subadviser generally maintains the duration of the fund in line with that of its style benchmark, the BofA Merrill Lynch U.S. High Yield Master II Constrained Index. Duration measures the interest rate sensitivity of a fixed income security by assessing and weighting the present value of the security’s payment pattern. Generally, the longer the maturity the greater the duration and, therefore, the greater effect interest rate changes have on the price of the security.

Temporary Defensive Strategy: During periods of adverse market conditions, the fund may temporarily invest a significant portion of its assets in investment grade fixed income securities and money market instruments. When this allocation happens, the fund may not achieve its objective.


Virtus High Yield Income Fund			29

Virtus Insight Government Money Market Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of providing as high a level of current income from government obligations as is consistent with preservation of capital and liquidity.

Principal Investment Strategies:

The fund invests only in high-quality, short-term money market instruments that, in the opinion of the fund’s subadviser, present minimal credit risks. Under normal circumstances, the fund invests at least 80% of its assets in government money market securities which are defined as:

U.S. Treasury securities whose interest and principal payments are backed by the full faith and credit of the U.S. Government and securities issued by U.S. Government agencies and instrumentalities whose interest and principal payments may be supported by the full faith and credit of the U.S. Treasury (such as Government National Mortgage Association participation certificates); or

Securities issued by the U.S. Government whose interest and principal payments are not backed by the full faith and credit of the U.S. Government and may be supported by the limited authority of the issuer to borrow from the U.S. Treasury (such as securities of the Federal Home Loan Bank); the discretionary authority of the U.S. Government to purchase certain obligations (such as securities of the Federal National Mortgage Association); or the credit of the issuer only; and repurchase agreements collateralized by U.S. Government securities.

The fund’s policy of investing at least 80% of its assets in government short-term money market instruments may be changed only upon 60 days’ written notice to shareholders.

The fund will purchase only securities (other than U.S. Government securities) that have been rated within the two highest rating categories by at least two nationally recognized statistical rating organizations (or, if not rated, are considered by the adviser to be of comparable quality) unless only one such agency has rated the security. No more than 3% of the fund’s assets will be invested in the second highest rating category. The fund’s current income generally will be lower than the income provided by funds that invest in securities with longer maturities or lower quality.


30		Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of providing as high a level of current income as is consistent with its investment policies and with preservation of capital and liquidity.

Principal Investment Strategies:

The fund invests only in high-quality, short-term money market instruments that, in the opinion of the fund’s subadviser, present minimal credit risks. The fund invests in a broad range of short-term money market instruments, including U.S. Government securities, repurchase agreements, and bank and commercial obligations. Commercial paper purchased by the fund will consist of U.S. dollar-denominated direct obligations of domestic and foreign corporate issuers, including bank holding companies.

The fund will purchase only U.S. dollar-denominated securities. In addition, the fund will purchase only securities (other than U.S. Government securities) that have been rated within the highest rating category by at least two nationally recognized statistical rating organizations (or, if not rated, are considered by the subadviser to be of comparable quality) unless only one such agency has rated the security. The fund’s current income generally will be lower than the income provided by funds that invest in securities with longer maturities or lower quality.


Virtus Insight Money Market Fund			31

Virtus Insight Tax-Exempt Money Market Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of providing as high a level of current income that is exempt from federal income taxes as is consistent with its investment policies and preservation of capital and liquidity.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its assets in high-quality, short-term money market instruments that generate income that is generally exempt from federal income tax and is not subject to the alternative minimum tax. This policy is fundamental and may only be changed by shareholder approval. The fund may also invest in securities that generate income that is not exempt from federal or state income tax.

Income exempt from federal or state income tax may be subject to state or local income tax. Any capital gains distributed by the fund may be taxable.

The fund will invest in primarily U.S. dollar-denominated municipal securities.

The fund will purchase only securities (other than U.S. Government securities) that have been rated within the highest rating category by at least two nationally recognized statistical rating organizations (or, if not rated, are considered by the subadviser to be of comparable quality) unless only one such agency has rated the security. The fund’s current income generally will be lower than the income provided by funds that invest in securities with longer maturities or lower quality.

Depending on market conditions, the fund may temporarily hold up to 20% of the current value of its assets in securities whose interest income is subject to taxation.


32		Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund

(formerly Virtus Short/Intermediate Bond Fund)

Non-Fundamental Investment Objective:

The fund has an investment objective of providing a high level of total return, including a competitive level of current income, while limiting fluctuations in net asset value due to changes in interest rates.

Principal Investment Strategies:

Under normal circumstances, the fund invests at least 80% of its assets in fixed income debt obligations of various types of issuers. The fund’s average duration will range from one to three years. Principally, the fund invests in investment-grade securities, which are securities rated, at the time of investment, within the four highest rating categories of a nationally recognized statistical rating organization, or if unrated, those that the subadviser determines, pursuant to procedures reviewed and approved by the Board of Trustees, are of comparable quality. The fund may invest up to 20% of its total assets in securities rated below investment grade at time of purchase. The fund may continue to hold securities whose credit quality falls below investment grade.

The fund seeks to achieve its objective by applying a time-tested approach and extensive credit research designed to capitalize on opportunities across undervalued areas of the bond markets. Under normal circumstances, the fund’s investments will include some or all of the following:

Debt securities issued by foreign issuers, including foreign governments and their political subdivisions, and issuers located in emerging markets;

Investment grade securities (primarily of U.S. issuers, secondarily of non-U.S. issuers), including short-term securities; and

High-yield debt instruments, including bank loans (which are generally floating-rate).

The fund may invest in all or some of these sectors. The fund’s policy of investing 80% of its assets in bonds may be changed only upon 60 days’ written notice to shareholders.

The fund employs active sector rotation and disciplined risk management to portfolio construction. The fund seeks diversification among various sectors of the fixed income markets, which, as of the date of this Prospectus, may include some or all of the following: corporate investment grade; corporate high yield; bank loans; non-agency commercial mortgage-backed securities (CMBS); agency and non-agency residential mortgage-backed securities (RMBS); non-U.S. dollar securities; emerging market high yield; Yankee investment grade bonds; asset-backed securities; taxable municipal bonds; tax-exempt municipal bonds; and securities issued or guaranteed as to principal and interest by the U.S. government, its agencies, authorities, or instrumentalities.

The fund’s investable assets are typically allocated among various sectors of the fixed income market using a top-down, relative value approach that looks at factors such as yield and spreads, supply and demand, investment environment, and sector fundamentals. The subadviser then selects particular investments using a bottom-up, fundamental research driven analysis that includes assessment of credit risk, company management, issue structure, technical market conditions, and valuations. Securities selected for investment are those that the subadviser believes offer the best potential to achieve the fund’s investment objective of providing a high level of total return, including a competitive level of current income, while preserving capital. The subadviser seeks to adjust the proportion of fund investments primarily in the sectors described above and the selections within sectors to obtain higher relative returns. The subadviser regularly reviews the fund’s portfolio construction, endeavoring to minimize risk exposure by closely monitoring portfolio characteristics such as sector concentration and portfolio duration and by investing no more than 5% of the fund’s total assets in securities of any single issuer (excluding the U.S. government, its agencies, authorities or instrumentalities).


Virtus Low Duration Income Fund			33

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.


34		Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

Non-Fundamental Investment Objective:

The fund has an investment objective of providing a high level of current income that is exempt from federal income tax.

Principal Investment Strategies:

Under normal circumstances, as a matter of fundamental policy, the fund invests at least 80% of its assets in municipal bonds of varying maturities, the income from which is exempt from federal income tax and not subject to the federal alternative minimum tax. The term “bonds” includes municipal bonds, notes and lease obligations, and tax-exempt commercial paper. Issuers include states, territories and possessions of the United States and their political subdivisions, agencies, authorities, and instrumentalities, including Puerto Rico, Guam, and the U.S. Virgin Islands.

Debt obligations may be of any maturity and will be rated within the four highest rating categories by the nationally recognized statistical rating organizations at the time of investment, or if unrated, those that the adviser determines, pursuant to procedures reviewed and approved by the Board of Trustees, to be of comparable quality.

Securities are selected using an analytical approach that focuses on the relative value of the security considering its credit rating, coupon rate, call features, maturity, and average life.

Issuers are selected based on sector (utility, healthcare, transportation, etc.), and the geographic opportunity presented by areas and regions that are experiencing economic stability.

The portion of the fund’s assets not invested in tax-exempt securities may be invested in taxable fixed income securities, as well as municipal bonds subject to the federal alternative minimum tax. Income from these investments may be subject to federal, state, and local taxes.


Virtus Tax-Exempt Bond Fund			35

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 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.

Risks

Virtus
Emerging
Markets
Opportunities

Fund

Virtus
High
Yield
Income

Fund

Virtus
Insight
Government
Money
Market

Fund

Virtus
Insight
Money
Market

Fund

Virtus
Insight
Tax-
Exempt
Money
Market

Fund

Virtus
Low
Duration
Income

Fund

Virtus
Tax-
Exempt
Bond

Fund

Counterparty

Debt Securities

Call

Credit

Income

Interest Rate

Long-Term Maturities/Durations

Equity Securities

Large Market Capitalization Companies

Small and Medium Market Capitalization Companies

Equity-Linked Instruments

Foreign Investing

Currency Rate

Emerging Market Investing

Geographic Concentration

High Yield-High Risk Securities (Junk Bonds)

Market Volatility

Mortgage-Backed and Asset-Backed Securities

Municipal Bond Market

Principal Stability

Tax-Exempt Securities

Tax Liability

U.S. Government Securities

In order to determine which risks are principal risks for a fund, please refer to the table above.

Counterparty Risk

When the fund engages in investment techniques where it relies on another party to consummate the transaction, the fund is subject to the risk of default by the other party.

Debt Securities Risks

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

Call Risk. There is a risk that issuers will prepay fixed rate obligations when interest rates fall. A fund holding callable securities 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 securities experience when rates decline.


36		Virtus Mutual Funds

Credit Risk. There is a risk that the issuer of a security 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 security to decline. Debt securities rated below investment-grade are especially susceptible to this risk.

Income Risk. The income shareholders receive from the 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.

Interest Rate Risk. The values of debt securities 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 the fund, but will affect the value of the fund’s shares. Interest rate risk is generally greater for investments with longer maturities.

Certain securities pay interest at variable or floating rates. Variable rate securities reset at specified intervals, while floating rate securities 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 security. However, some securities 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 securities 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, the 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.

Long-Term Maturities/Durations Risk. Fixed income securities with longer maturities or durations may be subject to greater price fluctuations due to interest rate, tax law, and general market changes than securities with shorter maturities or durations.

Equity Securities Risks

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.

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

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.

Equity-Linked Instruments

Equity-linked instruments are instruments of various types issued by financial institutions or special purpose entities located in foreign countries to provide the synthetic economic performance of a referenced equity security, including benefits from dividends and other corporate actions, but without certain rights of direct investment in the referenced securities, such as voting rights. In addition to the market and other risks of the referenced equity security, equity-linked instruments involve counterparty risk, which includes the risk that the issuing entity may not be able to honor its


Virtus Mutual Funds			37

financial commitment. Equity-linked instruments have no guaranteed return of principal and may experience a return different from the referenced equity security . Typically, a fund will invest in equity-linked instruments in order to obtain exposure to certain countries in which it does not have local accounts.

Foreign Investing Risks

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 the 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 the fund’s shares is calculated in U.S. dollars, it is possible for the 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.

Geographic Concentration Risk

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) Risk

Securities rated “BB” or below by S&P or “Ba” or below by Moody’s are known as “high yield” securities and are commonly referred to as “junk bonds.” 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 the 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.


38		Virtus Mutual Funds

Market Volatility Risk

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

Instability in the financial markets has led to volatile financial markets that expose 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 has 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 and Asset-Backed Securities Risk

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 agreements. 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.

Early payoffs in the loans underlying such securities may result in the 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, the 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.

Municipal Bond Market Risk

The amount of public information available about municipal bonds is generally less than that for corporate equities or bonds, and the investment performance of the 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. The 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.

Principal Stability Risk

The fund may not be able to maintain a stable net asset value of $1.00.

Tax-Exempt Securities Risk

Tax-exempt securities may not provide a higher after-tax return than taxable securities.


Virtus Mutual Funds			39

Tax Liability Risk

Distributions by the 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.

U.S. Government Securities Risk

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.

Management of the Funds

The Adviser

Virtus Investment Advisers, Inc. (“VIA”) is the investment adviser to the funds and is located at 100 Pearl Street, Hartford, CT 06103. VIA acts as the investment adviser for over 50 mutual funds and as adviser to institutional clients. As of December 31, 2012, VIA had approximately $29.8 billion in assets under management. VIA has acted as an investment adviser for over 80 years and is an indirect wholly-owned subsidiary of Virtus Investment Partners, Inc., a publicly traded multi-manager asset management business.

Subject to the direction of the fund’s Board of Trustees, VIA is responsible for managing the funds’ investment programs and for the general operations of the funds, including oversight of the funds’ subadvisers, and for, recommending their hiring, termination and replacement.

VIA has appointed and oversees the activities of each of the subadvisers for the funds as follows. Each subadviser manages the investments of that fund to conform with its investment policies as described in this prospectus.


Virtus Emerging Markets Opportunities Fund		Vontobel Asset Management, Inc. (Vontobel”)
Virtus High Yield Income Fund		Monegy, Inc. (“Monegy”)
Virtus Insight Government Money Market Fund		BMO Asset Management Corp. (“BMO AM”)
Virtus Insight Money Market Fund		BMO AM
Virtus Insight Tax-Exempt Money Market Fund		BMO AM
Virtus Low Duration Income Fund		Newfleet Asset Management, LLC (“Newfleet”)
Virtus Tax-Exempt Bond Fund		Newfleet

Management Fees

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


Virtus High Yield Income Fund			0.45%
Virtus Tax-Exempt Bond Fund			0.45%


40		Virtus Mutual Funds


	First $1 billion	$1+ billion
Virtus Emerging Markets Opportunities Fund	1.00%	0.95%


	First $1 billion	$1+ billion through $2 billion	$2+ billion
Virtus Low Duration Income Fund	0.55%	0.50%	0.45%

Virtus Insight Government Money Market Fund, Virtus Insight Money Market Fund and Virtus Insight Tax-Exempt Money Market Fund each pay VIA 0.14% on the fund’s first $100 million of net assets, plus 0.10% on the fund’s remaining assets.

In its last fiscal year, each fund paid fees to the adviser at the following percentage of average net assets:


Virtus Emerging Markets Opportunities Fund		0.96%
Virtus High Yield Income Fund		0.45%
Virtus Insight Government Money Market Fund		0.10%
Virtus Insight Money Market Fund		0.11%
Virtus Insight Tax-Exempt Money Market Fund		0.12%
Virtus Low Duration Income Fund		0.55%
Virtus Tax-Exempt Bond Fund		0.45%

The Subadvisers

BMO AM (formerly, Harris Investment Management, Inc.) is located at 115 South LaSalle Street, 11th Floor, P.O. Box 755, Chicago, IL 60603. BMO AM has been an investment adviser since 1989. BMO AM is a wholly-owned subsidiary of BMO Financial Corp., which is wholly owned by Bank of Montreal, a publicly-held Canadian diversified financial services company . As of December 31, 2012, BMO AM had approximately $33 billion in assets under management.

Monegy is located at 302 Bay Street, 12th Floor, Toronto, ON, Canada M5X 1A1. Monegy acts as adviser to institutional investors in the United States, Canada and Australia and has been an investment adviser since 1999. Monegy is owned by BMO AM, described above. As of December 31, 2012, Monegy had approximately $2.2 billion in assets under management.

Newfleet, an affiliate of VIA, is located at 100 Pearl Street, Hartford, CT 06103. Newfleet acts as subadviser to mutual funds and as adviser to institutions and individuals. As of December 31, 2012, Newfleet had approximately $10.9 billion in assets under management. Newfleet has been an investment adviser since 1989.

Vontobel is located at 1540 Broadway, 38th Floor, New York, NY 10036. Vontobel is a wholly-owned and controlled subsidiary of Vontobel Holding AG, a Swiss bank holding company, having its registered offices in Zurich, Switzerland. In addition to U.S. registered investment companies, Vontobel also acts as subadviser to six series of a Luxembourg investment fund that accepts investments from non-U.S. investors only and that was organized by an affiliate of Vontobel. Vontobel has provided investment advisory services to mutual fund clients since 1990. As of December 31, 2012, Vontobel had approximately $35 billion in assets under management.


Virtus Mutual Funds			41

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


Virtus Emerging Markets Opportunities Fund		50% of net investment management fee
Virtus High Yield Income Fund		50% of net investment management fee
Virtus Low Duration Income Fund		50% of net investment management fee
Virtus Tax-Exempt Bond Fund		50% of net investment management fee

With respect to Virtus Insight Government Money Market Fund, Virtus Insight Money Market Fund and Virtus Insight Tax-Exempt Money Market Fund, VIA pays BMO AM a subadvisory fee at the annual rate of 0.07% on each fund’s first $100 million of net assets, plus 0.05% on the fund’s remaining net assets. For each of these three funds, the subadvisory fee payable to BMO AM will be reduced by 50% of any reimbursement or waivers by VIA and increased by 50% of any such reimbursements or waivers subsequently recaptured.

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, 2012 through December 31, 2012.

Portfolio Management

The following individuals are responsible for the day-to-day management of the funds’ portfolios.

BMO AM


Virtus Insight Government Money Market Fund		Peter J. Arts Boyd R. Eager (both since 2004)
Virtus Insight Money Market Fund		Peter J. Arts Boyd R. Eager (both since 2004)
Virtus Tax-Exempt Money Market Fund		Peter J. Arts (since 2004) Boyd R. Eager (since 2006)

Peter J. Arts. Mr. Arts joined BMO AM in 1993 and serves as Managing Director and Head of Fixed Income, responsible for the team charged with management of the short-, intermediate- and long-duration fixed income strategies. He has over 22 years of investment management experience.

Boyd R. Eager. Mr. Eager joined BMO AM in 1996 and serves as Director and Senior Portfolio Manager. He is a member of the liquidity products team which has principal responsibility for the firm’s long duration and cash management strategies. He has over 17 years of investment management experience.

Monegy

Virtus High Yield Income Fund

Lori J. Marchildon, CFA (since May 2010)

Ovidiu Sandu, CFA (since May 2010)

Sadhana Valia, CFA (since May 2010)

Lori J. Marchildon, CFA. Ms. Marchildon is a Portfolio Manager and a member of Monegy’s Investment Policy Committee. Ms. Marchildon has portfolio management responsibilities with credit coverage accountability for the Capital Goods, Consumer Products and Super Retail sectors. Prior to joining Monegy in 2001, Ms. Marchildon spent five years with BMO Financial Group’s Risk Management Group where she led the design and implementation of a risk framework to address credit risk for trading, underwriting and investment portfolios. Ms. Marchildon’s prior experience


42		Virtus Mutual Funds

also includes working as an economist with the federal Canadian Department of Finance. She has 17 years experience in the financial industry.

Ovidiu Sandu, CFA. Mr. Sandu is an Associate Portfolio Manager, Senior Quantitative Analyst, and member of Monegy’s Investment Policy Committee. Mr. Sandu has credit responsibility for the Aerospace, Metals/Mining, Steel and Service sectors and has focused on high yield since joining Monegy in 2000. His prior experience includes emerging market equity research, mergers and acquisitions and privatizations with a European bank. Mr. Sandu has 16 years experience in the financial industry

Sadhana Valia, CFA. Ms. Valia is head of the High Yield Team Senior Portfolio Manager for Monegy’s high yield portfolios, and a member of Monegy’s Investment Policy Committee. Ms. Valia serves as President of Monegy and is a member of its Board of Directors, as well as a member of BMO AM’s management team. She has focused on high yield since joining Monegy in 1998. She previously held senior positions in BMO Financial Group’s Corporate & Investment Banking Group, including the origination, structuring and syndication of project, mergers and acquisition, leveraged buyout and corporate loan financings. Ms. Valia’s prior experience includes three years as an executive in BMO’s Credit Department with responsibility for large corporate, institutional and government accounts. She has 28 years experience managing credit risk assets.

Newfleet

Virtus Low Duration Income Fund

David L. Albrycht, CFA (since May 2012)

Benjamin Caron, CFA (since May 2012)

Christopher J. Kelleher, CFA, CPA (since October 2012)

Virtus Tax-Exempt Bond Fund

Timothy M. Heaney, CFA (since June 2012)

Lisa H. Leonard (since June 2012)

David L. Albrycht, CFA. Mr. Albrycht is President and Chief Investment Officer at Newfleet (since June 2011). Until June 2011, Mr. Albrycht was executive managing director and senior portfolio manager of Goodwin Capital Advisors, Inc. (“Goodwin”). He is also the lead portfolio manager of several open-end and closed-end funds managed by Newfleet. Previously, Mr. Albrycht was associated with VIA, at which time it was an affiliate of Goodwin. He managed fixed income portfolios for Goodwin affiliates beginning in 1991.

Benjamin Caron, CFA. Mr. Caron is Senior Managing Director and Portfolio Manager at Newfleet (since June 2011). Prior to June 2011, Mr. Caron was on the fixed income team at Goodwin. Mr. Caron also is a portfolio manager of a closed-end fund managed by Newfleet, in addition to assisting the senior portfolio manager in the management of several open-end funds managed by Newfleet. Mr. Caron joined Goodwin in 2002 as a client service associate for the institutional markets group focusing on institutional fixed income clients.

Timothy M. Heaney, CFA. Mr. Heaney is Senior Managing Director and Senior Portfolio Manager—Municipal Securities at Newfleet (since 2011) and served as Senior Vice President and Portfolio Manager, Fixed Income of VIA (2008 to 2011). Previously, he was associated with Goodwin (2007 to 2008), at which time it was an affiliate of VIA, and was also Managing Director, Fixed Income (1997 to 2007), Director, Fixed Income Research (1996 to 1997) and Investment Analyst (1992 to 1996) of VIA. Mr. Heaney also manages the Virtus CA Tax-Exempt Bond Fund, as well as high net worth municipal bond portfolios for Newfleet and institutional municipal bond portfolios for Virtus’ affiliated manager, Duff & Phelps Investment Management Co. (“Duff & Phelps”), as well as DTF Tax-Free Income, Inc., a closed-end fund managed by Duff & Phelps.

Christopher J. Kelleher, CFA, CPA. Mr. Kelleher is Senior Managing Director and Senior Portfolio Manager (since January 2012) at Newfleet. Prior to joining Newfleet, Mr. Kelleher was retired for two years from Goodwin, where he was Managing Director and Senior Portfolio Manager (1997 to January 2010). Previously, he was an investment officer with Phoenix Life Insurance Company (1983 to 1997), at which time it was an affiliate of Goodwin and VIA. Mr. Kelleher also is co-portfolio manager for Virtus Balanced Fund and Virtus Bond Fund. He has more than 25 years of investment experience in all bond market sectors, including both publicly traded and private placements.


Virtus Mutual Funds			43

Lisa H. Leonard. Ms. Leonard is Managing Director and Portfolio Manager—Municipal Securities at Newfleet (since 2011) and served as Vice President and Portfolio Manager, Fixed Income of VIA (2008 to 2011). Previously, she was associated with Goodwin (2007 to 2008), at which time it was an affiliate of VIA, and was also Director, Municipal Research (1998 to 2007), Director, Investment Operations (1994 to 1998) and Fixed Income Trader (1987 to 1993) of VIA. Ms. Leonard manages high net worth municipal bond portfolios for Newfleet and institutional municipal bond portfolios for Duff & Phelps. Ms. Leonard is also on the management team of DTF Tax-Free Income, Inc., a closed-end fund managed by Duff & Phelps.

Vontobel


Virtus Emerging Markets Opportunities Fund		Rajiv Jain (since 2006)

Rajiv Jain. Mr. Jain is a Managing Director (since 2002) at Vontobel. Mr. Jain joined Vontobel in 1994 as an equity analyst and associate manager of its international equity portfolios. He has been a portfolio manager of Vontobel’s global equity products since 2002.

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.


44		Virtus Mutual Funds

Additional Investment Techniques

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 indicated in the chart 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.


Investment Techniques and Risks	Virtus Emerging Markets Opportunities Fund	Virtus High Yield Income Fund	Virtus Insight Money Market Fund	Virtus Low Duration Income Fund	Virtus Tax- Exempt Bond Fund
Convertible Securities				X
Counterparty	X	X		X	X
Debt Securities	X
Call	X
Credit	X
Interest Rate	X
Derivatives				X
Equity Securities				X
Illiquid and Restricted Securities				X
Leverage				X	X
Loan Participation Agreements				X
Municipal Bond Market			X
Mutual Fund Investing				X
Repurchase Agreements				X
Securities Lending	X	X		X	X
Short-Term Investments				X
Unrated Fixed Income Securities				X
When-Issued and Delayed Delivery Securities				X
Zero Coupon, Step Coupon, Deferred Coupon and PIK Bonds				X

In order to determine which investment techniques apply to a fund, please refer to the table above.

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 securities 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.

Counterparty Risk

When a fund engages in investment techniques where it relies on another party to consummate the transaction, the fund is subject to the risk of default by the other party.


Virtus Mutual Funds			45

Debt Securities

Interest Rate Risk. The values of debt securities 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.

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.

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, forward foreign currency exchange contracts and swap agreements. A fund 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 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. 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. Gains and losses derived from hedging transactions are, therefore, more dependent upon the subadviser’s ability to correctly predict the movement of the underlying asset prices, indexes or rates. 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


46		Virtus Mutual Funds

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 a fund goes down, the value of the fund’s shares will be affected.

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.

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 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.

Loan Participation Agreements

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 borrower’s principal and interest payments. The principal credit risk associated with acquiring loan participation 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 loan participation interests and, in some cases, this could result in a fund disposing of such securities at a substantial discount from face value or holding such securities until maturity.

Municipal Bond Market Risk

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 to 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


Virtus Mutual Funds			47

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 the fund invests in closed-end funds, it may incur added expenses such as additional management fees and trading costs.

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. (See “Counterparty Risk” above.)

Securities Lending

Each of the funds (except the Virtus Insight Money Market Funds) may loan portfolio securities with a value up to one-third of its assets to increase its investment returns. If the borrower is unwilling or unable to return the borrowed securities when due, the lending fund can suffer losses. In addition, there is a risk of delay in receiving additional collateral or in the recovery of the securities, and a risk of loss of rights in the collateral, in the event that the borrower fails financially. There is also a risk that the value of the investment of the collateral could decline, causing a loss to the fund.

Short-Term Investments

Short-term investments include money market instruments, repurchase agreements, certificates of deposits 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.

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.

When-Issued and Delayed-Delivery Securities

A fund may purchase securities on a when-issued or delayed-delivery basis. The value of the security on settlement date may be more or less than the price paid as a result of changes in interest rates and market conditions. If the value on settlement date is less than the price paid by the fund, the value of your shares may decline.

Zero Coupon, Step Coupon, Deferred Coupon and PIK Bonds

A fund may invest in any combination of zero coupon and step coupon bonds and bonds on which interest is payable in kind (“PIK”). The market prices of these bonds generally are more volatile than the market prices of securities that pay interest on a regular basis. Since the fund will not receive cash payments earned on these securities on a current basis, the fund may be required to make distributions from other sources. This may result in higher portfolio turnover rates and the sale of securities at a time that is less favorable.

The funds may buy other types of securities or employ other portfolio management techniques. Please refer to the SAI for more detailed information about these and other investment techniques of the funds.


48		Virtus Mutual Funds

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 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’ net asset values (“NAVs”). Debt securities (other than short-term investments) are valued on the basis of broker quotations or valuations provided by a pricing service, which in determining value utilizes information with respect to recent sales, market transactions in comparable securities, quotations from dealers, and various relationships between securities. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. 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. Other assets, such as accrued interest, accrued dividends and cash are also included in determining a fund’s NAV.

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.

For Virtus non-money market funds, the NAV per share of each class of each fund is determined as of the close of trading (normally 4:00 PM eastern time) on days when the New York Stock Exchange (“NYSE”) is open for trading. A Virtus non-money market fund will not calculate its NAV per share class on days when the NYSE is closed for trading. For the money market funds, the NAV of each class of each fund generally is determined as of the times indicated in the table below on each business day, except on those days the Securities Industry and Financial Markets Association (formerly, the Bond Market Association) (“SIFMA”) recommends that the U.S. bond market remains closed. The money market funds may price their shares at an earlier time if an early close is recommended by SIFMA. Information regarding whether they are expected to do so on any such day will be available to investors who call Virtus Mutual Fund Services toll-free at 800-243-1574. A money market fund will not calculate its NAV per share class on days SIFMA has recommended that the U.S. bond market remains closed.

Normal Pricing Times for Virtus Insight Money Market Funds


Virtus Insight Government Money Market Fund		4:30 PM eastern time
Virtus Insight Money Market Fund		4:30 PM eastern time
Virtus Insight Tax-Exempt Money Market Fund		12:00 Noon eastern time

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


Virtus Mutual Funds			49

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 securities 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; and (viii) securities where the market quotations are not readily available as a result of “significant” events. 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) 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); (iii) price quotes from dealers and/or pricing services; (iv) an analysis of the company’s financial statements; (v) trading volumes on markets, exchanges or among dealers; (vi) recent news about the security or issuer; (vii) changes in interest rates; (viii) information obtained from the issuer, analysts, other financial institutions and/or the appropriate stock exchange (for exchange traded securities); (ix) whether two or more dealers with whom the adviser/subadviser regularly effects trades are willing to purchase or sell the security at comparable prices; (x) other news events or relevant matters; and (xi) government (domestic or foreign) actions or pronouncements.

Certain foreign common stocks 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, events (such as movement in the U.S. securities market, or other regional and local developments) may occur between the time that foreign markets close (where the security is principally traded) and the time that the fund calculates its NAV (generally, the close of regular trading on the NYSE) that may impact the value of securities traded in these foreign markets. In such cases, information from an external vendor may be utilized to adjust closing market prices of certain foreign common stocks to reflect their fair value. Because the frequency of significant events is not predictable, fair valuation of certain foreign 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?

For non-money market funds, all investments received by the funds’ authorized agents in good order prior to the close of regular trading on the NYSE (normally 4:00 PM eastern time) will be executed based on that day’s NAV. For money market funds, investments received in good order will be executed based on the next-determined NAV. Shares credited to your account from the reinvestment of fund distributions will be in full and fractional shares that are purchased at the closing NAV on the next business day on which the respective fund’s NAV is calculated following the dividend record date.

Sales Charges

What are the classes and how do they differ?

Each fund offers from two to three classes of shares. Each class has different sales and distribution charges. (See “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 for the sale of their shares and for services provided to shareholders. The money market funds have adopted shareholder servicing plans in addition to the distribution and service plans allowed under Rule 12b-1.


50		Virtus Mutual Funds

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 breakpoint amounts. You should inform or inquire of your financial representative whether or not you may be entitled to a sales charge discount attributable to your total holdings in a fund or affiliated funds. To determine eligibility for a sales charge discount, 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 and minor children. The financial representative may request you to provide an account statement or other holdings information to determine your eligibility for a breakpoint and to make certain all involved parties have the necessary data. 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.” 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 require additional assistance, you may also contact Virtus Mutual Fund Services by calling toll-free 800-243-1574.

Class A Shares. If you purchase Class A Shares of the equity funds, you will pay a sales charge at the time of purchase equal to 5.75% of the offering price (6.10% of the amount invested). If you purchase Class A Shares of the fixed income funds, you will pay a sales charge at the time of purchase equal to 4.75% of the offering price (4.99% of the amount invested). If you purchase Class A Shares of the money market funds, you will not pay a sales charge at the time of purchase. The sales charge may be reduced or waived under certain conditions. (See “Initial Sales Charge Alternative—Class A Shares” below.) Generally, Class A Shares are not subject to any charges by the funds when redeemed; however, a contingent deferred sales charge (“CDSC”) may be imposed on certain redemptions within 18 months on exchanges from a Virtus non-money market fund into a Virtus money market fund and purchases on which a finder’s fee has been paid. For all Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. The 18-month period begins on the last day of the month preceding the month in which the purchase was made. Class A Shares have lower distribution and service fees (0.25%) and pay higher dividends than Class C Shares.

Class C Shares (not offered by Intermediate Government Bond Fund and Money Market Funds). 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 do not convert to any other class of shares of the funds, so the higher distribution and service fees paid by Class C Shares continue for the life of the account.

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 funds’ 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 Investment Partners 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. For additional information about purchasing Class I Shares, please contact Virtus Mutual Fund Services by calling 800-243-1574.


Virtus Mutual Funds			51

Initial Sales Charge Alternative—Class A Shares

The public offering price of Class A Shares of Virtus non-money market funds 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 is divided between your investment dealer and the funds’ underwriter, VP Distributors, LLC (“VP Distributors” or “Distributor”).

Sales Charge you may pay to purchase Class A Shares

Virtus Emerging Markets Fund only


	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		2.75			2.83
$500,000 but under $1,000,000		2.00			2.04
$1,000,000 or more		None			None

Virtus High Yield Income Fund only


	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

Virtus Tax-Exempt Bond Fund only


	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			1.01
$1,000,000 or more		None			None


52		Virtus Mutual Funds

Virtus Low Duration Income Fund only


	Sales Charge as a Percentage of
Amount of Transaction at Offering Price	Offering Price			Amount Invested
Under $50,000		2.25	%		2.30	%
$50,000 but under $100,000		1.25			1.27
$250,000 but under $500,000		1.00			1.01
$500,000 but under $1,000,000		0.75			0.76
$1,000,000 or more		None			None

Class A Sales Charge Reductions and Waivers

Investors may reduce or eliminate sales charges applicable to purchases of Class A Shares 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. Investors buying Class A Shares on which a finder’s fee has been paid may incur a CDSC if they redeem their shares within 18 months of purchase. For all Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%.

Combination Purchase Privilege. Your purchase of any class of shares of these funds or any other Virtus Mutual Fund (other than any Virtus money market fund), 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 (a) any individual, his or her spouse and minor children purchasing shares for his, her or their own account (including an IRA account) including his, her or their own trust; (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 employer trusts or certain Section 403(b) plans for the same employer; (d) multiple accounts (up to 200) under a qualified employee benefit plan or administered by a third party administrator; or (e) 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 any Virtus money market fund), if made by the same person within a 13-month 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 commitment. Shares worth 5% of the amount of each purchase 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 any Virtus money market fund), 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.

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 have 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.


Virtus Mutual Funds			53

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, including, but not limited to: trustees of the Virtus Mutual Funds; directors, officers, employees and sales representatives of the adviser, subadvisers and Distributor and corporate affiliates of the adviser, subadvisers and Distributor; private clients of the adviser and subadvisers to any of the Virtus Mutual Funds; registered representatives and employees of dealers with which the Distributor has sales agreements; and certain qualified employee benefit plans, endowment funds or foundations. Please see the SAI for more information about qualifying for purchases of Class A Shares at NAV.

Deferred Sales Charge Alternative—Class C Shares

Class C Shares are purchased without an initial sales charge; however, shares sold within a specified time period are subject to a declining CDSC at the rates listed below. 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 time. To calculate the number of shares owned and time period held, all Class C Shares are considered purchased on the trade date.

All Funds Offering Class C Shares


Year	1			2+
CDSC		1	%		0	%

Compensation to Dealers

Dealers with whom the Distributor has entered into sales agreements receive a discount or commission on Class A Shares as described below.

Virtus Emerging Markets Opportunities Fund only


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

Virtus High Yield Income Fund only


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			3.75
$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


54		Virtus Mutual Funds

Virtus Tax-Exempt Bond Fund only


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			1.01
$1,000,000 or more		None			None			None

Virtus Low Duration Income Fund only


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		2.25	%		2.30	%		2.00	%
$50,000 but under $100,000		1.25			1.27			1.00
$100,000 but under $500,000		1.00			1.01			1.00
$500,000 but under $1,000,000		0.75			0.76			0.75
$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. (This sales commission will not be paid to dealers for sales of Class C Shares purchased by 401(k) participants of the Merrill Lynch Daily K Plan due to a waiver of the CDSC for these plan participants’ purchases.) 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 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.

Dealers and other entities that enter into special arrangements with the Distributor or the funds’ transfer agent, Virtus Fund Services, LLC (“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 fixed income 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, 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 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 of such investments within 18 months of purchase. For all Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. For purposes of determining the applicability of the CDSC, the 18-month period begins on the last day of the


Virtus Mutual Funds			55

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. 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 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.

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.

Your Account

Opening an Account

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. These procedures do not apply to purchases of Class I Shares. For information about purchasing Class I Shares, please contact Virtus Mutual Fund Services by calling 800-243-1574.

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.


56		Virtus Mutual Funds

Step 1.

Your first choice will be the initial amount you intend to invest.

Minimum initial investments:

$100 for IRAs, accounts that use the systematic exchange privilege or accounts that use the Systematic Purchase program. (See below for more information on the Systematic Purchase program.)

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:

$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 an existing account.

The funds reserve the right to refuse a purchase order for any reason.

Step 2.

Your second choice will be what class of shares to buy. Each share class 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.


Virtus Mutual Funds			57

How to Buy Shares


		To Open An Account (Class A and Class C Shares only)
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).

The price at which a purchase is effected is based on the applicable NAV determined after receipt of a purchase order in good order by the funds’ Transfer 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 form(s) and any supporting legal documentation required by the Transfer Agent, each in legible form. For the Virtus money market funds, orders in proper form placed prior to 12:00 Noon (Virtus Insight Tax-Exempt Money Market Fund) or 4:30 PM (Virtus Insight Government Money Market Fund and Virtus Insight Money Market Fund) and payments for which are received in or converted into Federal Funds by the funds’ custodian by 6:00 PM generally will become effective at the price determined on that day at 12:00 Noon or 4:30 PM, respectively (all provided that the fund and the fund’s custodian are open for business on that day and the fund has not calculated its NAV earlier due to an earlier close recommendation by SIFMA). In either case, shares purchased will receive the dividend on that day. Orders for Class A shares of the Virtus Insight Money Market Funds placed after 12:00 Noon (Virtus Insight Tax-Exempt Money Market Fund) or 4:30 PM (Virtus Insight Government Money Market Fund and Virtus Insight Money Market Fund) will become effective at the applicable price next determined after receipt of the order, which generally will be on the next business day. Orders for Class I shares of the Virtus Insight Money Market Funds placed after 12:00 Noon (Virtus Insight Tax-Exempt Money Market Fund) or 4:30 PM (Virtus Insight Government Money Market Fund and Virtus Insight Money Market Fund) will not be accepted and executed; notice of the purchase order being rejected will be given to the institution placing the order, and any payments received will be returned promptly to the sending institution. For all funds, specified times are eastern time.

Each fund reserves the right to refuse any order that may disrupt the efficient management of that fund.

Important Information about Virtus Emerging Markets Opportunities Fund

Virtus Emerging Markets Opportunities Fund is no longer available for purchase by new investors. The fund will continue to be available for purchase by existing investors; however, the fund reserves the right to refuse any order that may disrupt the efficient management of the fund. Currently, only the following investors may make purchases in the fund:

Current shareholders of the fund, whether they hold their shares directly or through a financial intermediary, may continue to add to their accounts through the purchase of additional shares and through the reinvestment of dividends and capital gains. Financial intermediaries may continue to purchase shares on behalf of existing shareholders only.

Exchanges into the fund may only be made by shareholders with an existing account in the fund.

An investor who has previously entered into a letter of intent with the distributor prior to the closing date may fulfill the obligation.


58		Virtus Mutual Funds

Trustees of the fund, trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus, its affiliates and Vontobel, and their family members, may continue to open new accounts.

New and additional investments may be made through discretionary platform models within mutual fund advisory (WRAP) programs and other fee based programs established with the Distributor prior to February 1, 2013.

The fund will also remain open to Defined Contribution and Defined Benefit retirement plans and will continue to accept payroll contributions and other types of purchase transactions into the fund from both existing and new participants and existing and new plans.

Notwithstanding the above exceptions, the fund does intend to discontinue new and subsequent sales through any financial intermediary at its discretion.

The fund and the Distributor reserve the right to modify these policies at anytime, including on a case-by-case basis.

How to Sell Shares

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, 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. Payment for shares redeemed is generally made within seven days; however, redemption proceeds will not be disbursed until each check used for purchases of shares has been cleared for payment by your bank, which may take up to 15 days after receipt of the check.

For the Virtus money market funds, written redemption requests will be priced at the NAV next calculated after the written request is received in proper form. If the redemption proceeds are wired to you on the same day your order is priced, you will not receive the dividend declared on that day. If a check for your redemption proceeds is mailed to you on the next business day after your request is priced, you will be entitled to dividends through the day on which the fund priced your request.

Also for the Virtus money market funds, provided in each case that the fund and the funds’ custodian are open for business on that day, telephone redemption requests received by 12:00 Noon for any Virtus Insight Money Market Fund generally will be processed so that redemption proceeds are sent by 1:30 PM; telephone redemption requests received by 3:30 PM for either Virtus Insight Government Money Market Fund or Virtus Insight Money Market Fund generally will be processed so that redemption proceeds are sent by 4:45 PM; and telephone redemption requests received by 4:30 PM for either Virtus Insight Government Money Market Fund or Virtus Insight Money Market Fund generally will be processed so that redemption proceeds are sent by 5:45 PM (all provided that the fund has not calculated its NAV earlier due to an earlier close recommendation by SIFMA). In all such instances, the shares being redeemed will not receive the dividend declared on that day. Telephone redemption requests for Class A shares of a Money Market Fund made after 12:00 Noon (Virtus Insight Tax-Exempt Money Market Fund) or 4:30 PM (Virtus Insight Government Money Market Fund and Virtus Insight Money Market Fund), or made before such applicable time on a day when the fund or the funds’ custodian is closed or made before such applicable time but after the time the fund has calculated its NAV on a day the fund has calculated its NAV earlier due to an earlier recommendation by SIFMA, generally will be processed so that payment is made the next business day on which the funds’ custodian is open for business. Telephone redemption requests for Class I shares of a Virtus money market fund placed after the applicable fund calculates its NAV will not be accepted and executed; appropriate notice will be given to the institution placing the


Virtus Mutual Funds			59

request. For all funds, specified times are eastern time. For information about selling Class I Shares, please contact the funds’ Transfer Agent at 800-243-1574.


		To Sell Shares (Class A and Class C Shares only)
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 (fixed income 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.

Things You Should Know When Selling Shares

You may realize a taxable gain or loss (for federal income tax purposes) if you redeem shares of the funds. Except for the Virtus money market funds, 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. 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.

Redemption requests will not be honored until all required documents, in proper form, have been received. To avoid delay in redemption or transfer, shareholders having questions about specific requirements should contact the funds’ Transfer Agent at 800-243-1574. 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 instruction 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.


60		Virtus Mutual Funds

If required, the signature guarantee must be a STAMP 2000 Medallion guarantee and be 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 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.

Account Policies

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. Send your written request to Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. You can call us 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.

Annual Fee on Small Accounts

To help offset the costs associated with maintaining small accounts, Virtus Mutual 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.

Distributions of Small Amounts

Distributions in amounts less than $10 will automatically be reinvested in additional shares of the applicable fund.


Virtus Mutual Funds			61

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 respective 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, the assets in your account may be transferred to the state.

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 may exchange shares of one fund for the same class of shares of another Virtus Mutual Fund ( e.g. , Class A Shares for Class A Shares). Class C Shares are also exchangeable for Class T Shares of those Virtus Mutual Funds offering them. Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended.

On exchanges into Class A of a Virtus money market fund from Class A of a Virtus non-money market fund made within 18 months of a finder’s fee being paid on such Virtus non-money market fund shares, a CDSC may be assessed on exchange proceeds. For all Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%.

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 is treated as a sale and a purchase for federal income tax purposes.

In certain circumstances, a fund, the Distributor or the Transfer Agent may enter into an agreement with a financial intermediary to permit exchanges from one class of a fund into another class of the same fund, subject to certain conditions. Such exchanges will only be permitted 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 the exchanges be carried out (i) within accounts maintained and controlled by the intermediary, (ii) on behalf of all or a particular segment of beneficial owners holding shares of the affected fund within those accounts, and (iii) all at once or within a given time period, or as agreed upon in writing by the fund, the Distributor or the Transfer Agent and the financial intermediary. 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.

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


62		Virtus Mutual Funds

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 portfolio management in its sole discretion, such as causing the fund to maintain a higher level of cash than would otherwise be the case, or causing the 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 the Virtus Emerging Markets Opportunities Fund 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 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 mutual 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 they believe, 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 market timing. 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 services 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 could 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.


Virtus Mutual Funds			63

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. (See the “Systematic Purchase” section on the application.)

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. (See the “Systematic Exchange” section on the application.) Exchange privileges may not be available for all Virtus Mutual Funds, and may be rejected or suspended.

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 service. (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.


64		Virtus Mutual Funds

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 Emerging Markets Opportunities Fund		Semiannually
Virtus High Yield Income Fund		Monthly ⁽¹⁾
Virtus Insight Government Money Market Fund		Monthly ⁽¹⁾
Virtus Insight Money Market Fund		Monthly ⁽¹⁾
Virtus Insight Tax-Exempt Money Market Fund		Monthly ⁽¹⁾
Low Duration Income Fund		Monthly ⁽¹⁾
Virtus Tax-Exempt Bond Fund		Monthly ⁽¹⁾

(1) Although a dividend is paid monthly, it is accrued daily.

Distributions of short-term capital gains (gains on securities held for a year or less) and net investment income are taxable to shareholders as ordinary income. Under the Jobs and Growth Tax Reconciliation Act of 2003, certain distributions of long-term capital gains and certain dividends are taxable at a lower rate than ordinary income for a limited number of years. This lower rate terminates for tax years after 2010. Long-term capital gains, if any, 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.

Unless you elect to receive distributions in cash, dividends and capital gain distributions are paid in additional shares. All distributions, cash or additional shares, are subject to federal income tax and may be subject to state, local and other taxes.

Master Fund/Feeder Fund Structure

The Board of Trustees has the authority to convert any fund to a “feeder” fund in a Master Fund/Feeder Fund Structure in which the fund, instead of investing in portfolio securities directly, would seek to achieve its investment objective by investing all of its investable assets in a separate “master” fund having the same investment objectives and substantially similar investment restrictions. Other funds with similar objectives and restrictions could also invest in the same Master Fund. The purpose of such an arrangement is to achieve greater operational efficiencies and reduce costs.


Virtus Mutual Funds			65

Financial Highlights

These tables are intended to help you understand the funds’ financial performance for the past five years or since inception. Some of the information reflects financial information for a single fund share. The total returns in the tables represent the rate that a investor would have earned or lost on an investment in the 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 the funds’ 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) ⁽²⁾			Net Realized and Unrealized Gain/(loss)			Total from Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Gains			Total Distributions			Net Asset Value, End of Period
Emerging Markets Opportunities Fund
Class I
1/1/12 to 12/31/12	$	8.70		0.10			1.62			1.72			(0.08	)		(0.03	)		(0.11	)	$	10.31
1/1/11 to 12/31/11		9.10		0.12			(0.38	)		(0.26	)		(0.07	)		(0.07	)		(0.14	)		8.70
1/1/10 to 12/31/10		7.17		0.10			1.91			2.01			(0.08	)		—	⁽³⁾		(0.08	)		9.10
1/1/09 to 12/31/09		4.90		0.10			2.26			2.36			(0.09	)		—			(0.09	)		7.17
1/1/08 to 12/31/08		10.08		0.06			(4.43	)		(4.37	)		(0.11	)		(0.70	)		(0.81	)		4.90
Class A
1/1/12 to 12/31/12	$	8.44		0.07			1.57			1.64			(0.05	)		(0.03	)		(0.08	)	$	10.00
1/1/11 to 12/31/11		8.83		0.09			(0.37	)		(0.28	)		(0.04	)		(0.07	)		(0.11	)		8.44
1/1/10 to 12/31/10		6.96		0.07			1.86			1.93			(0.06	)		—	⁽³⁾		(0.06	)		8.83
1/1/09 to 12/31/09		4.76		0.08			2.20			2.28			(0.08	)		—			(0.08	)		6.96
1/1/08 to 12/31/08		9.80		0.05			(4.30	)		(4.25	)		(0.09	)		(0.70	)		(0.79	)		4.76
Class C
1/1/12 to 12/31/12	$	8.31		—	⁽³⁾		1.56			1.56			(0.02	)		(0.03	)		(0.05	)	$	9.82
1/1/11 to 12/31/11		8.72		0.03			(0.37	)		(0.34	)		—	⁽³⁾		(0.07	)		(0.07	)		8.31
1/1/10 to 12/31/10		6.90		—	⁽³⁾		1.85			1.85			(0.03	)		—	⁽³⁾		(0.03	)		8.72
1/1/09 to 12/31/09		4.72		0.02			2.19			2.21			(0.03	)		—			(0.03	)		6.90
1/1/08 to 12/31/08		9.69		—	⁽³⁾		(4.23	)		(4.23	)		(0.04	)		(0.70	)		(0.74	)		4.72
High Yield Income Fund
Class I
1/1/12 to 12/31/12	$	10.60		0.71			0.59			1.30			(0.74	)		—			(0.74	)	$	11.16
1/1/11 to 12/31/11		10.74		0.73			(0.16	)		0.57			(0.71	)		—			(0.71	)		10.60
1/1/10 to 12/31/10		10.19		0.76			0.53			1.29			(0.74	)		—			(0.74	)		10.74
1/1/09 to 12/31/09		8.45		0.84			1.74			2.58			(0.84	)		—			(0.84	)		10.19
1/1/08 to 12/31/08		11.87		0.88			(3.42	)		(2.54	)		(0.88	)		—			(0.88	)		8.45
Class A
1/1/12 to 12/31/12	$	10.63		0.68			0.59			1.27			(0.71	)		—			(0.71	)	$	11.19
1/1/11 to 12/31/11		10.75		0.71			(0.15	)		0.56			(0.68	)		—			(0.68	)		10.63
1/1/10 to 12/31/10		10.20		0.73			0.53			1.26			(0.71	)		—			(0.71	)		10.75
1/1/09 to 12/31/09		8.45		0.81			1.75			2.56			(0.81	)		—			(0.81	)		10.20
1/1/08 to 12/31/08		11.87		0.85			(3.42	)		(2.57	)		(0.85	)		—			(0.85	)		8.45
Class C
1/1/12 to 12/31/12	$	10.61		0.60			0.58			1.18			(0.63	)		—			(0.63	)	$	11.16
1/1/11 to 12/31/11		10.74		0.63			(0.16	)		0.47			(0.60	)		—			(0.60	)		10.61
1/1/10 to 12/31/10		10.19		0.65			0.53			1.18			(0.63	)		—			(0.63	)		10.74
1/1/09 to 12/31/09		8.45		0.74			1.74			2.48			(0.74	)		—			(0.74	)		10.19
1/1/08 to 12/31/08		11.87		0.78			(3.42	)		(2.64	)		(0.78	)		—			(0.78	)		8.45

The footnote legend is at the end of the financial highlights.


66		Virtus Mutual Funds


Total Return ⁽¹⁾			Net Assets, End of Period (in thousands)		Ratio of Net Operating Expenses to Average Net Assets			Ratio of Gross Operating Expenses to Average Net Assets			Ratio of Net Investment Income to Average Net Assets			Portfolio Turnover Rate


	19.88	%	$	5,352,379		1.35	%		1.40	%		0.99	%		28	%
	(2.92	)		2,082,147		1.36			1.41			1.34			29
	28.15			801,366		1.41			1.46			1.25			33
	48.52			232,325		1.47			1.52			1.64			50
	(45.90	)		63,699		1.54			1.59			0.77			126

	19.62	%	$	1,208,195		1.60	%		1.60	%		0.78	%		28	%
	(3.13	)		474,368		1.61			1.61			1.09			29
	27.82			224,015		1.66			1.66			0.87			33
	48.12			42,658		1.72			1.72			1.34			50
	(46.04	)		11,281		1.79			1.79			0.65			126

	18.66	%	$	203,974		2.35	%		2.35	%		0.01	%		28	%
	(3.77	)		70,198		2.36			2.36			0.36			29
	26.88			36,971		2.41			2.41			0.03			33
	47.29			4,206		2.49			2.49			0.30			50
	(46.50	)		307		2.54			2.54			(0.05	)		126


	12.59	%	$	60,771		0.79	%		0.84	%		6.47	%		29	%
	5.47			51,829		0.78			0.83			6.84			29
	13.24			48,212		0.91			0.96			7.30			62
	31.67			43,061		0.79			0.84			8.91			117
	(22.44	)		31,932		0.83			0.88			8.33			121

	12.17	%	$	2,080		1.04	%		1.04	%		6.26	%		29	%
	5.39			2,214		1.02			1.02			6.58			29
	12.84			2,303		1.16			1.16			6.92			62
	31.60			840		1.06			1.06			8.90			117
	(22.63	)		3,550		1.08			1.08			8.09			121

	11.37	%	$	945		1.79	%		1.79	%		5.48	%		29	%
	4.52			710		1.78			1.78			5.85			29
	12.01			661		1.91			1.91			6.27			62
	30.49			382		1.79			1.79			7.75			117
	(23.21	)		117		1.84			1.84			7.37			121


Virtus Mutual Funds			67

Financial Highlights (continued)


	Net Asset Value, Beginning of Period		Net Investment Income (loss) ⁽²⁾			Net Realized and Unrealized Gain/(loss)			Total from Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Gains			Total Distributions			Net Asset Value, End of Period
Insight Government Money Market Fund
Class I
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/08 to 12/31/08		1.00		0.02			—	⁽³⁾		0.02			(0.02	)		—			(0.02	)		1.00
Class A
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/08 to 12/31/08		1.00		0.02			—	⁽³⁾		0.02			(0.02	)		—			(0.02	)		1.00
Insight Money Market Fund
Class I
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—			—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—			—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		0.01			—	⁽³⁾		0.01			(0.01	)		—	⁽³⁾		(0.01	)		1.00
1/1/08 to 12/31/08		1.00		0.03			—	⁽³⁾⁽⁵⁾		0.03			(0.03	)		—			(0.03	)		1.00
Class A
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—			—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/08 to 12/31/08		1.00		0.02			—	⁽³⁾⁽⁵⁾		0.02			(0.02	)		—			(0.02	)		1.00

The footnote legend is at the end of the financial highlights.


68		Virtus Mutual Funds


Total Return ⁽¹⁾			Net Assets, End of Period (in thousands)		Ratio of Net Operating Expenses to Average Net Assets			Ratio of Gross Operating Expenses to Average Net Assets			Ratio of Net Investment Income to Average Net Assets			Portfolio Turnover Rate


	0.01	%	$	1,215,780		0.15	%		0.22	%		0.01	%		N/A
	0.01			1,339,716		0.11			0.22			0.01			N/A
	0.06			122,384		0.23			0.28			0.05			N/A
	0.30			131,990		0.24			0.29			0.31			N/A
	2.25			428,314		0.21			0.26			2.12			N/A

	0.01	%	$	83,159		0.15	%		0.52	%		0.01	%		N/A
	0.01			72,490		0.12			0.53			0.01			N/A
	0.02			156,216		0.26			0.58			0.01			N/A
	0.09			168,054		0.46			0.59			0.09			N/A
	1.89			229,729		0.56			0.56			1.84			N/A


	0.03	%	$	233,967		0.20	%		0.26	%		0.03	%		N/A
	0.06	%		376,475		0.19			0.24			0.08			N/A
	0.15	⁽⁴⁾		1,536,180		0.19			0.24			0.14			N/A
	0.62	⁽⁴⁾		2,054,581		0.23			0.28			0.52			N/A
	2.82	⁽⁵⁾		1,619,040		0.19			0.24			2.86			N/A

	0.01	%	$	289,910		0.22	%		0.56	%		0.01	%		N/A
	0.01			326,702		0.23			0.54			0.01			N/A
	0.01	⁽⁴⁾		383,931		0.33			0.54			0.01			N/A
	0.31	⁽⁴⁾		532,034		0.55			0.59			0.26			N/A
	2.47	⁽⁵⁾		706,353		0.54			0.55			2.52			N/A


Virtus Mutual Funds			69

Financial Highlights (continued)


	Net Asset Value, Beginning of Period		Net Investment Income (loss) ⁽²⁾			Net Realized and Unrealized Gain/(loss)			Total from Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Gains			Total Distributions			Net Asset Value, End of Period
Insight Tax-Exempt Money Market Fund
Class I
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—			—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/08 to 12/31/08		1.00		0.02			—	⁽³⁾		0.02			(0.02	)		—	⁽³⁾		(0.02	)		1.00
Class A
1/1/12 to 12/31/12	$	1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾	$	1.00
1/1/11 to 12/31/11		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/10 to 12/31/10		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—			—	⁽³⁾		1.00
1/1/09 to 12/31/09		1.00		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		—	⁽³⁾		1.00
1/1/08 to 12/31/08		1.00		0.02			—	⁽³⁾		0.02			(0.02	)		—	⁽³⁾		(0.02	)		1.00
Low Duration Income Fund
Class I
1/1/12 to 12/31/12	$	10.54		0.26			0.41			0.67			(0.25	)		—			(0.25	)	$	10.96
1/1/11 to 12/31/11		10.51		0.31			0.03			0.34			(0.31	)		—			(0.31	)		10.54
1/1/10 to 12/31/10		10.21		0.40			0.30			0.70			(0.40	)		—			(0.40	)		10.51
1/1/09 to 12/31/09		9.41		0.44			0.80			1.24			(0.44	)		—			(0.44	)		10.21
1/1/08 to 12/31/08		10.05		0.43			(0.64	)		(0.21	)		(0.43	)		—			(0.43	)		9.41
Class A
1/1/12 to 12/31/12	$	10.54		0.23			0.41			0.64			(0.22	)		—			(0.22	)	$	10.96
1/1/11 to 12/31/11		10.51		0.28			0.03			0.31			(0.28	)		—			(0.28	)		10.54
1/1/10 to 12/31/10		10.20		0.37			0.31			0.68			(0.37	)		—			(0.37	)		10.51
1/1/09 to 12/31/09		9.41		0.41			0.79			1.20			(0.41	)		—			(0.41	)		10.20
1/1/08 to 12/31/08		10.05		0.41			(0.64	)		(0.23	)		(0.41	)		—			(0.41	)		9.41
Class C
1/1/12 to 12/31/12	$	10.54		0.15			0.42			0.57			(0.14	)		—			(0.14	)	$	10.97
1/1/11 to 12/31/11		10.51		0.20			0.03			0.23			(0.20	)		—			(0.20	)		10.54
1/1/10 to 12/31/10		10.21		0.29			0.30			0.59			(0.29	)		—			(0.29	)		10.51
1/1/09 to 12/31/09		9.41		0.34			0.80			1.14			(0.34	)		—			(0.34	)		10.21
1/1/08 to 12/31/08		10.05		0.33			(0.64	)		(0.31	)		(0.33	)		—			(0.33	)		9.41

The footnote legend is at the end of the financial highlights.


70		Virtus Mutual Funds


Total Return ⁽¹⁾			Net Assets, End of Period (in thousands)		Ratio of Net Operating Expenses to Average Net Assets			Ratio of Gross Operating Expenses to Average Net Assets			Ratio of Net Investment Income to Average Net Assets			Portfolio Turnover Rate


	0.01	%	$	92,766		0.13	%		0.26	%		0.01	%		N/A
	0.01			86,601		0.15			0.26			0.02			N/A
	0.09			604,209		0.19			0.24			0.09			N/A
	0.36			844,557		0.22			0.27			0.37			N/A
	2.22			1,190,802		0.20			0.25			2.16			N/A

	0.01	%	$	78,466		0.13	%		0.57	%		0.01	%		N/A
	0.01			92,796		0.14			0.57			0.01			N/A
	0.01			112,608		0.27			0.54			0.01			N/A
	0.09			199,472		0.50			0.57			0.09			N/A
	1.86			224,685		0.55			0.55			1.82			N/A


	6.40	%	$	29,513		0.73	% ⁽⁶⁾		0.99	%		2.40	%		87	% ⁽⁷⁾
	3.25			65,206		0.70			0.93			2.91			47
	6.93			60,777		0.70			0.91			3.81			49
	13.39			80,733		0.70			0.83			4.46			21
	(2.16	)		116,639		0.70			0.80			4.36			46

	6.14	%	$	28,266		0.96	% ⁽⁶⁾		1.20	%		2.12	%		87	% ⁽⁷⁾
	2.99			15,145		0.95			1.13			2.62			47
	6.77			10,273		0.95			1.12			3.52			49
	13.00			8,176		0.95			1.03			4.08			21
	(2.41	)		3,996		0.95			1.00			4.13			46

	5.44	%	$	20,156		1.71	% ⁽⁶⁾		1.95	%		1.38	%		87	% ⁽⁷⁾
	2.23			13,761		1.70			1.88			1.86			47
	5.88			8,138		1.70			1.87			2.76			49
	12.26			5,121		1.70			1.78			3.29			21
	(3.13	)		1,350		1.70			1.76			3.44			46


Virtus Mutual Funds			71

Financial Highlights (continued)


	Net Asset Value, Beginning of Period		Net Investment Income (loss) ⁽²⁾		Net Realized and Unrealized Gain/(loss)			Total from Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Gains			Total Distributions			Net Asset Value, End of Period
Tax-Exempt Bond Fund
Class I
1/1/12 to 12/31/12	$	11.10		0.33		0.52			0.85			(0.33	)		—			(0.33	)	$	11.62
1/1/11 to 12/31/11		10.38		0.41		0.74			1.15			(0.43	)		—			(0.43	)		11.10
1/1/10 to 12/31/10		10.55		0.43		(0.17	)		0.26			(0.43	)		—			(0.43	)		10.38
1/1/09 to 12/31/09		9.32		0.45		1.23			1.68			(0.45	)		—			(0.45	)		10.55
1/1/08 to 12/31/08		10.36		0.45		(1.03	)		(0.58	)		(0.45	)		(0.01	)		(0.46	)		9.32
Class A
1/1/12 to 12/31/12	$	11.10		0.30		0.52			0.82			(0.30	)		—			(0.30	)	$	11.62
1/1/11 to 12/31/11		10.38		0.39		0.74			1.13			(0.41	)		—			(0.41	)		11.10
1/1/10 to 12/31/10		10.55		0.40		(0.17	)		0.23			(0.40	)		—			(0.40	)		10.38
1/1/09 to 12/31/09		9.32		0.43		1.23			1.66			(0.43	)		—			(0.43	)		10.55
1/1/08 to 12/31/08		10.36		0.42		(1.02	)		(0.60	)		(0.43	)		(0.01	)		(0.44	)		9.32
Class C
1/1/12 to 12/31/12	$	11.10		0.21		0.54			0.75			(0.22	)		—			(0.22	)	$	11.63
1/1/11 to 12/31/11		10.38		0.31		0.74			1.05			(0.33	)		—			(0.33	)		11.10
1/1/10 to 12/31/10		10.56		0.32		(0.18	)		0.14			(0.32	)		—			(0.32	)		10.38
1/1/09 to 12/31/09		9.33		0.35		1.23			1.58			(0.35	)		—			(0.35	)		10.56
1/1/08 to 12/31/08		10.36		0.35		(1.02	)		(0.67	)		(0.35	)		(0.01	)		(0.36	)		9.33

Footnote Legend:

⁽¹⁾	Sales charges, where applicable, are not reflected in total return calculation.

⁽²⁾	Computed using average shares outstanding.

⁽³⁾	Amount is less than $0.005.

⁽⁴⁾

The Insight Money Market Fund received $3,642 for 2009 and $316 for 2010 (in thousands) in distributions from the Tyco International Ltd. Securities Litigation Settlement proceeds. If these proceeds had not been received, the total return would have been lower by 0.11% and 0.07% for Class I and Class A, respectively for 2009 and 0.02% for Class I for 2010.

⁽⁵⁾	Includes the effect of a payment by affiliate. Without this effect, the total return would have been 2.27% for Class I shares and 1.91% for Class A shares. The impact to the net investment income (loss) per share was less than $0.005.

⁽⁶⁾	Includes extraordinary expenses.

⁽⁷⁾	Portfolio turnover calculation excludes security transactions distributed as a result of a redemption-in-kind. For additional information, see Note 14 in the Notes to Financial Statements in the Annual Report.


72		Virtus Mutual Funds


Total Return ⁽¹⁾			Net Assets, End of Period (in thousands)		Ratio of Net Operating Expenses to Average Net Assets			Ratio of Gross Operating Expenses to Average Net Assets			Ratio of Net Investment Income to Average Net Assets			Portfolio Turnover Rate


	7.72	%	$	162,094		0.62	% ⁽⁶⁾		0.79	%		2.84	%		35	%
	11.36			94,228		0.57			0.77			3.78			59
	2.39			47,202		0.60			0.82			3.99			36
	18.26			25,394		0.60			0.78			4.46			91
	(5.62	)		41,662		0.60			0.75			4.49			111

	7.45	%	$	143,397		0.87	% ⁽⁶⁾		1.00	%		2.61	%		35	%
	10.98			107,873		0.81			0.98			3.62			59
	2.23			77,853		0.85			1.01			3.74			36
	17.96			59,226		0.85			0.98			4.19			91
	(5.85	)		49,160		0.85			0.95			4.25			111

	6.74	%	$	39,792		1.62	% ⁽⁶⁾		1.75	%		1.86	%		35	%
	10.15			28,641		1.54			1.70			2.91			59
	1.37			17,809		1.60			1.77			2.96			36
	17.18			6,175		1.60			1.72			3.33			91
	(6.57	)		1,469		1.60			1.70			3.56			111


Virtus Mutual Funds			73

LOGO

ADDITIONAL INFORMATION

You can find more information about the funds in the following documents:

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 Individual Investors section of virtus.com , or you can request copies by calling Virtus Mutual Fund Services toll-free at 800-243-1574.

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. This information is also available 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 Mutual Fund Services: 800-243-1574


Investment Company Act File No. 811-7447		5-13
8003

VIRTUS INSIGHT TRUST

101 Munson Street

Greenfield, MA 01301

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2013

Virtus Insight Trust is an open-end management investment company issuing shares in 7 separate series or “Funds”, all of which are publicly offered and described herein:


FUND	TICKER SYMBOL BY CLASS
	A	C	I
Virtus Emerging Markets Opportunities Fund	HEMZX	PICEX	HIEMX
Virtus High Yield Income Fund	HHYZX	PYHCX	HHYIX
Virtus Insight Government Money Market Fund	HIGXX		HGCXX
Virtus Insight Money Market Fund	HICXX		HACXX
Virtus Insight Tax-Exempt Money Market Fund	HITXX		HTCXX
Virtus Low Duration Income Fund	HIMZX	PCMZX	HIBIX
Virtus Tax-Exempt Bond Fund	HXBZX	PXCZX	HXBIX

This Statement of Additional Information relates to the Class A, Class C and Class I shares of the Funds. This SAI is not a prospectus and it should be read in conjunction with the Prospectuses for the Funds as described below and as supplemented 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 VP Distributors, LLC at 800.243.1574; or by writing to the Distributor at 100 Pearl Street, 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 its most recent fiscal year. The financial statements from the foregoing annual report are incorporated herein by reference. Shareholders may obtain a copy of the Annual Report dated December 31, 2012, without charge, by calling 800.243.1574 or by downloading it from virtus.com .

Transfer Agent: 800.243.1574

Adviser Consulting Group: 800.243.4361

Telephone Orders: 800.367.5877

Web Site: virtus.com

TABLE OF CONTENTS


	PAGE
Glossary		3
General Information and History		5
More Information About Fund Investment Strategies & Related Risks		12
Investment Limitations		76
Management of the Trust		77
Control Persons and Principal Holders of Securities		86
Investment Advisory and Other Services		86
Service and Distribution Plans		93
Portfolio Managers		95
Brokerage Allocation and Other Practices		99
Purchase, Redemption and Pricing of Shares		100
Investor Account Services and Policies		108
Dividends, Distributions and Taxes		110
Performance Information		115
Financial Statements		117
Appendix A — Description of Ratings		118
Appendix B — Principal Shareholders		120

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

ADRs		American Depositary Receipts

ADSs		American Depositary Shares

Administrator		The Trust’s administrative agent, Virtus Fund Services, LLC

Adviser		The investment adviser to the Funds, Virtus Investment Advisers, Inc.

BMO AM		BMO Asset Management Corp. (formerly known as Harris Investment Management, Inc.), subadviser to the Money Market Funds

BNY Mellon		BNY Mellon Investment Servicing (US) Inc., the sub-administrative and accounting agent for the Funds

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

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, JPMorgan Chase Bank, N.A.

Distributor		The principal underwriter of shares of the Funds, VP Distributors, LLC

EDRs		European Depositary Receipts (another name for CDRs)

Emerging Markets Opportunities Fund		Virtus Emerging Markets Opportunities Fund

ETFs		Exchange-traded Funds

FHFA		Federal Housing Finance Agency, an independent Federal agency that regulates FNMA, FDMC 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

Fixed Income Funds		Collectively, Virtus High Yield Income Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund

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



Funds		The series of the Trust discussed in this SAI

GDRs		Global Depositary Receipts

GNMA		Government National Mortgage Association, also known as “Ginnie Mae”, is a wholly-owned United States Government corporation within the Department of Housing and Urban Development

High Yield Income Fund		Virtus High Yield Income Fund

IMF		International Monetary Fund, an international organization seeking to promote international economic cooperation, international trade, employment and exchange rate stability, among other things

Insight Government Money Market Fund		Virtus Insight Government Money Market Fund

Insight Money Market Fund		Virtus Insight Money Market Fund

Insight Tax-Exempt Money Market Fund		Virtus Insight Tax-Exempt Money Market Fund

GICs		Guaranteed Investment Contracts

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

JPMorgan		JPMorgan Chase Bank, N.A.

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

Low Duration Income Fund		Virtus Low Duration Income Fund

Monegy		Monegy, Inc. (formerly known as HIM Monegy, Inc.), subadviser to the High Yield Income Fund

Money Market Funds		Collectively, Virtus Insight Government Money Market Fund, Virtus Insight Money Market Fund and Virtus Insight Tax-Exempt Money Market Fund

Moody’s		Moody’s Investors Service, Inc.

NAV		Net Asset Value, which is the per-share price of a Fund

Newfleet		Newfleet Asset Management, LLC, subadviser to the Low Duration Income Fund and the Tax-Exempt Bond Fund

Non-Money Market Funds		When used in reference to the Funds described in this SAI: each Fund other than the Money Market Funds When used in reference to the Virtus Mutual Funds: each Virtus Mutual Fund other than the Money Market Funds

NYSE		New York Stock Exchange

OCC		Options Clearing Corporation, the world’s largest 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 its corporate affiliates

Prospectuses		The prospectuses for the Funds, as amended from time to time

Regulations		The Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended



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

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

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

SMBS		Stripped Mortgage-backed Securities

Tax-Exempt Bond Fund		Virtus Tax-Exempt Bond Fund

Transfer Agent		The Trust’s transfer agent, Virtus Fund Services, LLC

Trust		Virtus Insight Trust

VIA		Virtus Investment Advisers, Inc.

VVIT		Virtus Variable Insurance Trust, a separate trust consisting of several series advised by VIA and distributed by VP Distributors

Virtus		Virtus Investment Partners, Inc., which is the parent company of the Adviser, the Distributor, the Administrator/Transfer Agent, and Newfleet

Virtus Fund Services		Virtus Fund Services, LLC

Virtus Mutual Funds		The family of funds consisting of the Funds, the series of Virtus Equity Trust and the series of Virtus Opportunities Trust

Vontobel		Vontobel Asset Management, Inc., subadviser to the Emerging Markets Opportunities Fund

VP Distributors		VP Distributors, LLC

World Bank		International Bank for Reconstruction and Development, an international financial institution that provides loans to developing countries for capital programs

GENERAL INFORMATION AND HISTORY

The Trust is an open-end management investment company organized as a Massachusetts business trust on December 6, 1995. Prior to May 18, 2006, the Trust was named “Harris Insight Funds Trust.” From May 18, 2006 to October 20, 2008, the Trust was named “Phoenix Insight Funds Trust.”

The Trust’s Prospectuses describe the investment objectives of the Funds and the strategies that the Funds will employ in seeking to achieve their investment objectives. Each Fund’s investment objective is a non-fundamental policy of that Fund and may be changed by the Board of Trustees without the approval of the Fund’s shareholders.


Fund Type	Fund	Investment Objective
Equity Fund	Emerging Markets Opportunities Fund	To provide capital appreciation.
Fixed Income Funds	High Yield Income Fund	To provide a high level of total return through a combination of income and capital appreciation.


Fund Type	Fund	Investment Objective
	Low Duration Income Fund	To provide a high level of total return, including a competitive level of current income, while limiting fluctuations in net asset value due to changes in interest rates.
	Tax-Exempt Bond Fund	To provide a high level of current income that is exempt from federal income tax.
Money Market Funds	Insight Government Money Market Fund	To provide as high a level of current income from government obligations as is consistent with preservation of capital and liquidity.
	Insight Money Market Fund	To provide as high a level of current income as is consistent with its investment policies and with preservation of capital and liquidity.
	Insight Tax-Exempt Money Market Fund	To provide as high a level of current income that is exempt from federal income taxes as is consistent with its investment policies and with preservation of capital and liquidity.

The following discussion supplements the disclosure in the Prospectuses.

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 vote of that Fund or class is required. The Trust does not hold regular meetings of shareholders of the Funds. The Board of Trustees 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 of Trustees fails to call a meeting after being so notified, the shareholders may call the meeting. The Board of Trustees 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, nonassessable, 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 of Trustees 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 Massachusetts business trust, the Trust’s operations are governed by its Declaration of Trust dated December 6, 1995, as amended. A copy of the Trust’s Establishment and Designation of Series and classes of Shares, as amended, is on file with the Office of the Secretary of the Commonwealth of Massachusetts. Upon the initial purchase of shares, the shareholder agrees to be bound by the Trust’s Declaration of Trust, as amended.

Generally, Massachusetts business trust shareholders are not personally liable for obligations of the Massachusetts business trust under Massachusetts law. The Trust’s Declaration of Trust expressly provides that the Trust has been organized under Massachusetts law and that the Declaration of Trust is to be governed by Massachusetts law. It is nevertheless possible that a Massachusetts business trust, such as the Trust, might become a party to an action in another state whose courts refused to apply Massachusetts law, in which case the Trust’s shareholders could be subject to personal liability. To guard against this risk, the 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 by reason of a claim or demand relating to such person being or having been a shareholder (as opposed to such person’s actions or omissions), 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 Massachusetts 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 Massachusetts 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 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 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.

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.)

Open/Closed Status of Funds

Virtus Emerging Markets Opportunities Fund is no longer available for purchase by new investors. This Fund continues to be available for purchase by existing investors; however, it reserves the right to refuse any order that may disrupt the efficient management of the Fund. Currently, only the following investors may make purchases in the Fund after the closing date:

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Current shareholders of the Fund, whether they hold their shares directly or through a financial intermediary, may continue to add to their accounts through the purchase of additional shares and through the reinvestment of dividends and capital gains. Financial intermediaries may continue to purchase shares on behalf of existing shareholders only.

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Exchanges into the Fund may only be made by shareholders with an existing account in the Fund.

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An investor who has previously entered into a letter of intent with the Distributor prior to the closing date may fulfill the obligation.

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Trustees of the Fund, trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus, its affiliates and Vontobel, and their family members, may continue to open new accounts.

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The Fund will also remain open to Defined Contribution and Defined Benefit retirement plans and will continue to accept payroll contributions and other types of purchase transactions into the fund from both existing and new participants and existing and new plans.

Notwithstanding the above exceptions, the Fund does intend to discontinue new and subsequent sales through any financial intermediary at its discretion. The Fund and the Distributor reserve the right to modify these policies at anytime, including on a case-by-case basis.

Virtus also sponsors a family of mutual funds that are primarily used as investment options for variable annuity contracts and variable life insurance contracts issued by insurance companies, and for certain retirement plans. Virtus Investment Advisers, Inc. is also the investment adviser to those funds.

Fund Names and Investment Policies

All of the Funds other than Insight Money Market Fund have names that suggest 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. 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.

Portfolio Turnover

The portfolio turnover rate of each Series 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 Series’ 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 Series. 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 Series’ shares by requirements that enable the Trust to receive certain favorable tax treatments. The portfolio turnover rates for each Series are set forth in the summary prospectus and under “Financial Highlights” in the statutory prospectus.

Disclosure of Portfolio Holdings

The Trustees of the Trust have adopted policies with respect to the disclosure of the Funds’ portfolio holdings. These policies provide that the Funds’ portfolio holdings information generally may not be disclosed to any party prior to the information becoming public. Certain limited exceptions are described below. Additionally, the Funds’ policies prohibit Virtus and the Funds’ service providers from entering into any agreement to disclose Fund portfolio holdings in exchange for any form of compensation or consideration. These policies apply to disclosures to all categories of persons, including individual investors, institutional investors, intermediaries who sell shares of the Funds, third parties providing services to the Funds (accounting agent, print vendors, etc.), rating and ranking organizations (Lipper, Morningstar, etc.) and affiliated persons of the Funds.

The Board of Trustees has delegated to the Trust’s Administrator the authority to make decisions regarding requests for information on portfolio holdings prior to public disclosure. The Administrator will authorize the disclosure of portfolio holdings only if it determines such disclosure to be in the best interests of Fund shareholders. The Administrator generally carries out this duty through its chief compliance officer, in consultation with other officers representing various areas of management.

The Trust’s Compliance Officer is responsible for monitoring the use of portfolio holdings information, for the Funds’ compliance with these policies and for providing reports to the Board of Trustees regarding their compliance, including information with respect to any potential conflicts of interest between the interests of Fund shareholders and those of Virtus and its affiliates identified during the reporting period and how such conflicts were resolved.

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 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 of the Funds also make publicly available on Virtus’ Web site a full listing of portfolio holdings as of the end of each month with a 30-day delay, while other of the Funds make such full listings available as of the end of each quarter with a 60-day delay. 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. 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 Administrator may authorize the disclosure of non-public portfolio holdings information under certain limited circumstances. The Funds’ policies provide that non-public disclosures of a Funds’ 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 enters into a confidentiality agreement, which includes a duty not to trade on the non-public 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 of Trustees 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 Investment Advisers, Inc.	Daily, with no delay
Subadviser	Newfleet Asset Management, LLC	Daily, with no delay
Subadviser	BMO Asset Management Corp.	Daily, with no delay
Subadviser	Vontobel Asset Management, Inc.	Daily, with no delay
Subadviser	Monegy, Inc.	Daily, with no delay
Subadviser Back Office	Northern Trust Co.	Daily, with no delay
Administrator	Virtus Fund Services, LLC	Daily, with no delay
Distributor	VP Distributors, LLC	Daily, with no delay
Custodian	JPMorgan	Daily, with no delay
Sub-Financial Agent	BNY Mellon	Daily, with no delay
Broker-Dealer	Morgan Stanley Smith Barney	Weekly, with one week delay
Independent Registered Public Accounting Firm	PricewaterhouseCoopers, LLP	Annual Reporting Period is within 15 business days of end of reporting period Semiannual Reporting Period is within 31 business days of end of reporting period.
Filing Agent	RR Donnelley & Sons Co.	For filing Form N-MFP by money market funds, monthly, four business days before month end and first business day after month end.


Type of Service Provider	Name of Service Provider	Timing of Release of Portfolio Holdings Information
Typesetting and Printing Firm for Financial Reports	RR Donnelley & Sons Co.	Quarterly, within 15 days of end of reporting period
Proxy Voting Service	Institutional Shareholder Services	Daily, weekly, monthly, quarterly depending on Adviser.
TV Financial Markets Talk Shows	CNBC	Monthly, with no delay, for holdings over 1% of issuer equity, in aggregate.*
Class Action Provider	Glass Lewis/Battea	Daily, with no delay
Financial Consulting Firm	Rogercasey	Monthly, with four day delay
Financial Consulting Firm	Vestek	Fiscal quarter, with 20 day delay

Public Portfolio Holdings Information


Type of Recipients	Names of Recipients	Timing of Release of Portfolio Holdings Information
Portfolio Redistribution Firms	Bloomberg, Standard & Poor’s and Thomson Reuters	Certain funds are monthly, with 30-day delay. Other funds are quarterly, 60 days after fiscal quarter end.
Rating Agencies	Lipper Inc. and Morningstar	Certain funds are monthly, with 30-day delay. Other funds are quarterly, 60 days after fiscal quarter end.
Rating Agencies	Standard & Poor’s, Fitch, Mercer and Moody’s	Money market funds are weekly.
Public	Public (via virtus.com )	Certain funds are monthly, with 30-day delay. Other funds are quarterly, 60 days after fiscal quarter end. Money market funds are monthly, within the first five business days.

*	A Virtus representative may, from time to time, appear as host or guest of various programming. CNBC requires certain holdings disclosure in order to monitor potential conflicts of interest.

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 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 Equity Trust

Balanced Fund

Growth & Income Fund

Mid-Cap Core Fund

Mid-Cap Growth Fund

Mid-Cap Value Fund

Quality Large-Cap Value Fund

Quality Small-Cap Fund

Small-Cap Core Fund

Small-Cap Sustainable Growth Fund

Strategic Growth Fund

Tactical Allocation Fund

Trust

Fund

Class/Shares

Virtus Insight Trust

Emerging Markets Opportunities Fund

High Yield Income Fund

Insight Government Money Market Fund

Insight Money Market Fund

Insight Tax-Exempt Money Market Fund

Low Duration Income Fund

Tax-Exempt Bond Fund

Virtus Opportunities Trust

Allocator Premium AlphaSector Fund

AlphaSector Rotation Fund

Alternatives Diversifier Fund

Bond Fund

CA Tax-Exempt Bond Fund

Disciplined Equity Style Fund

Disciplined Select Bond Fund

Disciplined Select Country Fund

Dynamic AlphaSector Fund

Emerging Markets Debt Fund

Emerging Markets Equity Income Fund

Foreign Opportunities Fund

Global Commodities Stock Fund

Global Dividend Fund (formerly Global Infrastructure Fund)

Global Opportunities Fund

Global Premium AlphaSector Fund

Global Real Estate Securities Fund

Greater Asia ex Japan Opportunities Fund

Greater European Opportunities Fund

Herzfeld Fund

High Yield Fund

International Equity Fund

International Real Estate Securities Fund

International Small-Cap Fund

Multi-Sector Intermediate Bond Fund

Multi-Sector Short Term Bond Fund

Premium AlphaSector Fund

Real Estate Securities Fund

Senior Floating Rate Fund

Wealth Masters Fund

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.


Investment Technique	Description and Risks	Fund-Specific Limitations
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 are 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 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.

*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	The Money Market Funds may not invest in convertible securities.


Investment Technique	Description and Risks	Fund-Specific Limitations
	redeemed, converted, or exchanged. Convertible securities have several unique investment characteristics such as (1) higher yields than common stocks, but lower yields than comparable nonconvertible securities, (2) a lesser degree of fluctuation in value then 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 rank senior to common stock in a corporation’s capital structure and, therefore, generally entail 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 usually viewed by the issuer as future common stock, they are generally subordinated to other senior securities and therefore are rated one category lower than the issuer’s non-convertible 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 (Junk Bonds) Securities” 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


Investment Technique	Description and Risks	Fund-Specific Limitations
	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.

*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.

High-Yield, High-Risk Fixed Income Securities	Investments in securities rated “BB” or below by S&P 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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 significantly greater than issuers of higher-rated securities because such securities are generally 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 typically 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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.

*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 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	The Money Market Funds, the High-Yield Income Fund and the Tax-Exempt Bond Fund may not invest in loan participations and assignments.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.)

*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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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’s 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. 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.


Investment Technique	Description and Risks	Fund-Specific Limitations
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.

Municipal Leases	The Tax-Exempt Bond 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


Investment Technique	Description and Risks	Fund-Specific Limitations
	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.

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.


Investment Technique	Description and Risks	Fund-Specific Limitations
*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 make the Fund an “insider” of the issuer for purposes of the federal securities laws, 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 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 purchase 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 of low-rated securities and therefore may not fully 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.

*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 high degree of risk, 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 payments of principal or interest. In the event that the Funds hold non-performing sovereign debt, the Funds may incur additional expenses in	The Insight Government Money Market Fund and the Insight Tax-Exempt Money Market Fund may not invest in sovereign debt obligations.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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,	The Money Market Funds and the High Yield Income Fund may not purchase stand-by commitments.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.

*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 types of securities are relatively long-term instruments that often 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. In order to most effectively use these investments, a Fund’s subadviser must correctly assess probable movements in interest rates. This involves different skills than those used to select most portfolio securities. If the Fund’s subadviser incorrectly forecasts such movements, the Fund could be adversely affected by the use of variable or floating 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	The Money Market Funds may invest in certificates of participation even if the underlying obligations carry stated maturities in excess of thirteen months, upon compliance with certain conditions contained in a rule of the SEC.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 Investments	The 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. The 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. The Fund may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not 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. The Fund’s ability to use derivative instruments may also be limited by tax considerations. (See “Dividends, Distributions and Taxes” in this SAI.) Investments in derivatives in general are 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.	The Money Market Funds may not invest in any types of Derivative Investments.

*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


Investment Technique	Description and Risks	Fund-Specific Limitations

	or exemption from being considered a “commodity pool” or otherwise as a vehicle for trading in commodity interests under such regulations. As a result, each Fund has filed a notice of exclusion under CFTC Regulation 4.5 or exemption under CFTC Regulation 4.13(a)(3). The CFTC recently 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.

*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.

*Eurodollar Instruments*	The Funds may invest in Eurodollar instruments. Eurodollar instruments are U.S. dollar-denominated futures contracts or options thereon which are linked to the LIBOR, although foreign currency-denominated instruments are available from time to time. 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 futures contracts and options thereon to hedge against changes in LIBOR, to which many interest rate swaps and fixed income instruments are linked.	The High Yield Income Fund and the Tax-Exempt Bond Fund may not invest in Eurodollar instruments.

*Equity-linked Derivatives*	Each Fund may invest in equity-linked derivative products designed to replicate the composition and performance of particular indices. Examples of such products include Standard & Poor’s Depositary Receipts (SPDRs), World Equity Benchmark Series (WEBs), NASDAQ 100 tracking shares (QQQs), Dow Jones


Investment Technique	Description and Risks	Fund-Specific Limitations

	Industrial Average Instruments (DIAMONDS) and Optimized Portfolios as Listed Securities (OPALS). Investments in equity-linked derivatives involve the same risks associated with a direct investment in the types of securities included in the indices 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 basket of securities purchased to replicate a particular index or that such basket will replicate the index. 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.)

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 adverse consequences to the Fund may leave the Fund 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. Generally, a Fund may engage in both “transaction hedging” and “position hedging.” When it engages in transaction hedging, a Fund enters into foreign currency transactions with respect to specific receivables or payables, generally arising in connection with the purchase or sale of portfolio securities. A Fund will engage in transaction hedging when it desires to “lock in” the U.S. dollar price of a security it has agreed to	The Tax-Exempt Bond Fund may not invest in foreign currency forward contracts, futures and options.


Investment Technique	Description and Risks	Fund-Specific Limitations

	purchase or sell, or the U.S. dollar equivalent of a dividend or interest payment in a foreign currency. By transaction hedging, the Fund will attempt to protect itself against a possible loss resulting from an adverse change in the exchange rate between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received. 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 transaction 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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. Transaction and position hedging 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. 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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


Investment Technique	Description and Risks	Fund-Specific Limitations

	pay any fees, taxes or charges associated with such delivery which are assessed in the issuing country. 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 prescribed amount. 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	The value of a foreign currency option depends upon the value of the underlying currency relative to the U.S. dollar. 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 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 U.S. 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 a specified foreign currency and the U.S. dollar 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 have


Investment Technique	Description and Risks	Fund-Specific Limitations

	been issued in connection with U.S. dollar-denominated debt offerings by major corporate issuers in an attempt to reduce the foreign currency exchange risk that, from the point of view of prospective purchasers of the securities, is inherent in the international fixed income marketplace. Foreign currency warrants may be used to reduce the foreign 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 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 is generally considerably in excess of the price that a commercial user of foreign currencies might pay in the interbank market for a comparable option involving significantly larger amounts of foreign currencies. Foreign currency warrants are subject to significant foreign exchange risk, including risks arising from complex political or economic factors.


Investment Technique	Description and Risks	Fund-Specific Limitations

Performance Indexed Paper	Performance indexed paper is U.S. dollar-denominated commercial paper the yield of which is linked to certain foreign 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 U.S. dollar and a designated currency 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 U.S. dollar-denominated 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 U.S. dollar and a particular foreign currency at or about that time. The return on “standard” principal exchange rate linked securities is enhanced if the foreign currency to which the security is linked appreciates against the U.S. dollar, and is adversely affected by increases in the foreign exchange value of the U.S. dollar, “reverse” PERLS are like the “standard” securities, except that their return is enhanced by increases in the value of the U.S. dollar and adversely impacted by increases in the value of foreign currency. Interest payments on the securities are generally made in U.S. dollars at rates that reflect the degree of foreign 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 foreign exchange risk, or relatively lower interest rates if the issuer has assumed some of the foreign 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 or index futures contracts. An interest rate, foreign currency 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 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	A Fund will sell index futures only if the amount resulting from the multiplication of the then-current level of the indices upon which its futures contracts which would be outstanding do not exceed one-third of the value of the Fund’s net assets. Also, no Fund may purchase or sell index futures if, immediately thereafter, the sum of the premiums paid for unexpired


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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 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. 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	options on futures contracts and margin deposits on the Fund’s outstanding futures contracts would exceed 5% of the market value of the Fund’s total assets. Each Fund is limited to investing no more than 25% of its net assets in index futures and options on index futures. No Fund may purchase or sell futures contracts or purchase options on futures contracts if, immediately thereafter, more than one-third of its net assets would be hedged, or the sum of the amount of margin deposits on the Fund’s existing futures contracts and premiums paid for options would exceed 5% of the value of the Fund’s total assets.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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, each Fund may invest in futures contracts under specified conditions without registering as a commodity pool with the CFTC. However, under the recent rule amendments the Funds’ ability to claim the exclusion/exemption from the definition of a commodity pool may be limited. (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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 also depends 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. 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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	The Money Market Funds and the Tax-Exempt Bond Fund may not invest in mortgage-backed securities.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 substantially less than the original maturity of the mortgage pools underlying the securities as a result of mortgage prepayments. For this and other reasons, an asset-backed security’s stated maturity may be shortened, 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	Duration is one of the fundamental tools used by the adviser 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” is considered a more precise measure of interest rate risk than “term to maturity.” Determining duration may involve the adviser’s estimates of future economic parameters, which may vary from actual future values. Fixed income securities with effective durations of three years are more responsive to interest rate fluctuations than those with effective durations of one year. 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.

Collateralized Mortgage Obligations (“CMOs”)	CMOs are hybrid instruments with characteristics of both mortgage-backed and mortgage pass-through securities. Similar to a bond, interest and prepaid principal on a CMO are paid, in most cases, semiannually. 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. Unlike FHLMC Participation Certificates, payments of principal and interest on the CMOs are made semiannually rather than monthly. The amount of principal payable on each semiannual 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. CMO residuals are generally purchased and sold by institutional investors through several investment banking firms acting as brokers or dealers. The CMO residual


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 issuers thereof will be considered in determining whether a mortgage-related security meets the 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 Funds will take the position that privately-issued, mortgage-related securities do not represent interests in any particular “industry” or group of industries. 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. 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 state and federal 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.


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, 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. 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 on an exchange 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the prescribed amount. 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 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 and options markets that could result in an imperfect correlation among these markets,


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.)

Options on Indexes and “Yield Curve” Options	Each Fund may enter into options on indexes or options 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.

Swap Agreements	Each Fund may enter into interest rate, index and currency exchange rate swap agreements in attempts to obtain 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 ranging from a few weeks to more than one year. In a standard “swap”


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 (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 commodity


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 and finalized rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act to create a new, comprehensive regulatory framework for swap transactions, and as of the date of this SAI they are continuing to develop and finalize additional rules. 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 will 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 finalization and 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. The “buyer” in a credit default contract is obligated to pay the “seller” a periodic, stream of payments over the term of the contract provided no event of default has occurred. In the event of default, the seller must pay the buyer the “par value” (full notional value) of the reference obligation in exchange for the reference obligation (typically emerging market debt). 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 fixed rate of income throughout the term of the contract, which typically is between six months and three years, 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. 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

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.	The Money Market Funds may not invest in equity securities.

Securities of Small and Mid Capitalization Companies	While small and medium-sized issuers in which a Fund invests will 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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 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. In order to avoid undue risks, the 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. 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	The Emerging Markets Opportunities Fund may invest up to 10% of its total assets in dollar-denominated foreign equity and debt securities. The High Yield Income Fund and the Low Duration Income Fund (each with respect to 20% of its total assets) may invest in non-convertible and convertible debt of foreign banks, foreign corporations and foreign governments which obligations are denominated in and pay interest in U.S. dollars. The Insight Money Market Fund may invest in non-convertible debt of foreign banks, foreign corporations and foreign governments which obligations are denominated in and pay interest in U.S. dollars.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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 a 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 Series’ 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 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 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	The Money Market Funds and the Tax-Exempt Bond Fund may not invest in Depositary Receipts.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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


Investment Technique	Description and Risks	Fund-Specific Limitations

	emerging markets may have relatively unstable governments, present the risk of nationalization of businesses, 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. Although the Funds will invest only in securities denominated in foreign currencies that are fully convertible into U.S. dollars without legal restriction at the time of investment, 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

*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 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.)	The Insight Government Money Market Fund, the Insight Tax-Exempt Money Market Fund, the High Yield Income Fund and the Tax-Exempt Bond Fund may not invest in guaranteed investment contracts.

Illiquid and Restricted Securities	Each Fund may invest up to 15% of its net assets in securities that are considered illiquid. 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	While the other Funds will limit their investments in illiquid securities to 15% of their net assets, the Money Market Funds will limit such investments to 5% of their net assets.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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(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 securities described in this section generally will be considered illiquid, a security’s contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of the security and therefore these securities may be determined to be liquid in accordance with guidelines established by the Trust’s Board of Trustees. The Trustees have delegated to each Fund’s subadviser the day-to-day determination of the liquidity of such securities in the respective Fund’s portfolio, although they have retained oversight and ultimate responsibility for such determinations. Although no definite quality criteria are used, the Trustees have directed the subadvisers to consider such factors as (i) the nature of the market for a security (including the institutional private resale markets); (ii) the terms of these securities or other instruments allowing for the disposition to a third party or the issuer thereof (e.g. certain repurchase obligations and demand instruments); (iii) and availability of market quotations; and (iv) other permissible factors. The Trustees monitor implementation of the guidelines on a periodic basis. 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	securities may cause the NAV of the Fund holding them to decline. A security that is determined by a Fund’s subadviser 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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 foregoes principal and interest paid on the mortgage-backed securities. 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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. 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.

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.

*Bankers’ Acceptances*	A bankers’ 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

*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.

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.	The Money Market Fund limits its investments in domestic bank obligations to obligations of U.S. banks (including foreign branches and thrift institutions) that have more than $1 billion in total assets at the time of investment and are members of the Federal Reserve System, are examined by Comptroller of the Currency or whose deposits are insured by the Federal Deposit Insurance Corporation (“U.S. banks”). The Money Market Fund limits its investments in foreign bank obligations to U.S. dollar-denominated obligations of foreign banks (including U.S. branches): (a) which banks at the time of investment (i) have more than $10 billion, or the equivalent in other currencies, in total assets and (ii) are among the 100 largest banks in the world, as determined on the basis of assets, and have branches or agencies in the U.S.; and (b) which obligations, in the opinion of the Adviser, are of an investment quality comparable to obligations of U.S. banks that may be purchased by such Money Market Fund. The Money Market Fund may invest more than 25% of the current value of its total assets in obligations including of: (a) U.S. banks; (b) U.S. branches of foreign banks


Investment Technique	Description and Risks	Fund-Specific Limitations

		that are subject to the same regulation as U.S. banks by the U.S. Government or its agencies or instrumentalities; or (c) foreign branches of U.S. banks if the U.S. banks would be unconditionally liable in the event the foreign branch failed to pay on such obligations for any reason.

*Rule 2a-7 Considerations*	Each of the Money Market Funds must comply with the requirements of Rule 2a-7 under the 1940 Act (“Rule 2a-7”). Under the applicable quality requirements of Rule 2a-7, such Funds may purchase only U.S. dollar-denominated instruments that are determined to present minimal credit risks and that are at the time of acquisition “eligible securities” as defined in Rule 2a-7. Generally, eligible securities are divided into “first tier” and “second tier” securities. First tier securities are generally those in the highest rating category (e.g., A-1 by S&P) or unrated securities deemed to be comparable in quality, government securities and securities issued by other money market funds. Second tier securities are generally those in the second highest rating category (e.g., A-2 by S&P) or unrated securities deemed to be comparable in quality. (See Appendix A to this SAI for more information about ratings.) Each Money Market Fund may not invest in second tier securities with a remaining maturity of greater than 45 calendars days, invest more than 3% of its total assets in second tier securities nor more than 0.5% of its total assets in the second tier securities of a single issuer. Each Money Market Fund will maintain a dollar-weighted average maturity of 90 days or less and will limit its investments to securities that have remaining maturities of 397 calendar days or less or other features that shorten maturities in a manner consistent with the requirements of Rule 2a-7, such as interest rate reset and demand features.

*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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 either all of the securities or a representative sample of the securities included in the index. 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 daily basis.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 Series 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 Series 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 an exemptive order granted by the SEC. 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 Series may rely on these exemptive orders to invest in unaffiliated ETFs. In addition to this, the Trust has obtained exemptive relief permitting the Series 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	of the SAI for additional information regarding the implications to the Funds of investing in commodity interests.) 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 like 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.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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.	Repurchase agreements of more than seven days’ duration are subject to each Fund’s limitation on investments in illiquid securities, which means that no more than 15% (5% with respect to each Money Market Fund) 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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 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


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.

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.

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,	The Money Market Funds may not assume temporary defensive positions, as their investment strategies under normal circumstances are designed to be appropriate for short-term negative business or financial conditions. In the case of the Emerging Markets Opportunities Fund, the short-term and medium-term debt securities it may employ on a temporary basis consist of (a) obligations of governments, agencies or instrumentalities of any member state of the OECD; (b) bank deposits and bank


Investment Technique	Description and Risks	Fund-Specific Limitations

	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).	obligations (including certificates of deposit, time deposits and bankers’ acceptances) of banks organized under the laws of any member state of the OECD, denominated in any currency; (c) floating rate securities and other instruments denominated in any currency issued by international development agencies; (d) finance company and corporate commercial paper and other short-term corporate debt obligations of corporations organized under the laws of any member state of the OECD meeting the Fund’s credit quality standards; and (e) repurchase agreements with banks and broker-dealers covering any of the foregoing securities.

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 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	The Money Market Funds may not invest in warrants.


Investment Technique	Description and Risks	Fund-Specific Limitations

	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.


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.

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.

(1)

No Fund may invest more than 25% of its assets (valued at the time of investment) in securities of companies in any one industry, except that (a) this restriction does not apply to investments in (i) securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, (ii) municipal obligations (for purposes of this restriction, private activity bonds shall not be deemed municipal obligations if the payment of principal and interest on such bonds is the ultimate responsibility of non-governmental users), and (iii) in the case of the Money Market Funds, bank obligations that are otherwise permitted as investments, and (b) all or substantially all of the assets of the Fund may be invested in another registered investment company having the same investment objective and substantially similar investment policies.

(2)	No Fund may borrow money except to the extent permitted by applicable law, regulation or order.

(3)	No Fund may issue any senior security except to the extent permitted by applicable law, regulation or order.

(4)

No Fund may underwrite the distribution of securities of other issuers; however, (a) the Fund may acquire “restricted” securities that, in the event of a resale, might be required to be registered under the 1933 Act on the ground that the Fund could be regarded as an underwriter as defined by that act with respect to such resale and (b) all or substantially all of the assets of the Fund may be invested in another registered investment company having the same investment objective and substantially similar investment policies.

(5)

No Fund may make loans, but this restriction shall not prevent the Fund from (a) investing in debt obligations, (b) investing in money market instruments or repurchase agreements, (c) participating in an interfund lending program among Funds having a common investment adviser or distributor to the extent permitted by applicable law or (d) lending its portfolio securities. The Fund will not 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).

(6)

No Fund may purchase or sell real estate or interests in real estate, although it may invest in securities secured by interests in real estate and securities of enterprises that invest in real estate or interests in real estate, and may acquire and dispose of real estate or interests in real estate acquired through the exercise of rights as a holder of debt obligations secured by real estate or interests therein.

(7)	No Fund may purchase or sell commodities or commodity contracts, except that it may enter into (a) futures, options, and options on futures, (b) forward contracts, and (c) other financial transactions not requiring the delivery of physical commodities.

(8)	No Fund may invest in the securities of other investment companies except to the extent permitted by applicable law, regulation or order or rule of the Securities and Exchange Commission (the “SEC”).

(9)

As a matter of fundamental policy, none of the fundamental or non-fundamental investment policies or restrictions of a Fund shall prohibit a Fund from investing all or substantially all of its assets in the shares of another registered open-end investment company having the same investment objective and substantially similar policies and restrictions.

Non-Fundamental Investment Limitations

Additional investment limitations adopted by each Fund, which may be changed by the Board of Trustees without shareholder approval, are as follows:

(1)

No diversified Fund may, with respect to 75% of its assets, invest more than 5% of its assets (valued at the time of investment) in securities of any one issuer, except for securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities or repurchase agreements for such securities, and except that all or substantially all of the assets of the Fund may be invested in another registered investment company having the same investment objective and substantially similar investment policies.

(2)	No Fund may, with respect to 75% of its assets, acquire securities of any one issuer that at the time of investment represent more than 10% of the voting securities of the issuer, except that all or substantially all of

the assets of the Fund may be invested in another registered investment company having the same investment objective and substantially similar investment policies.

(3)	No Fund may purchase securities on margin (except for use of short-term credits as are necessary for the clearance of transactions) or participate in a joint or on a joint or several basis in any trading account in securities.

(4)	No Fund may invest more than 15% (5% in the case of a Money Market Fund) of its net assets (valued at the time of investment) in illiquid securities, including repurchase agreements maturing in more than seven days.

(5)

No Fund may make short sales of securities unless (a) the Fund owns at least an equal amount of such securities, or owns securities that are convertible or exchangeable, without payment of further consideration, into at least an equal amount of such securities or (b) the securities sold are “when issued” or “when distributed” securities that the Fund expects to receive in a recapitalization, reorganization or other exchange for securities that it contemporaneously owns or has the right to obtain and provided that transactions in options, futures and options on futures are not treated as short sales.

Application of Investment Limitations

Except as noted below, 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 fundamental investment restriction (1), “municipal obligations” are tax-exempt municipal obligations and “bank obligations” are bank obligations of domestic banks.

With respect to fundamental investment restriction (2), 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.

For purposes of these investment restrictions, as well as for purposes of diversification under the 1940 Act, the identification of the issuer of a municipal obligation depends on the terms and conditions of the obligation. If the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government creating the subdivision and the obligation is backed only by the assets and revenues of the subdivision, such subdivision would be regarded as the sole issuer. Similarly, in the case of a “private activity bond,” if the bond is backed only by the assets and revenues of the non-governmental user, the non-governmental user would be deemed to be the sole issuer. If in either case the creating government or another entity guarantees an obligation, the guarantee would be considered a separate security and be treated as an issue of such government or entity.

MANAGEMENT OF THE TRUST

Trustees and Officers

The Board of Trustees of the Trust is responsible for the overall supervision of the Trust and performs the various duties imposed on Trustees by the 1940 Act and Delaware statutory trust law. The Board of Trustees is responsible for the overall supervision of the Funds, including establishing the Funds’ policies, general supervision and review of their investment activities. The officers, who administer the Funds’ daily operations, are appointed by the Board of Trustees and generally are employees of the Adviser 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 Mutual Funds and the address of each individual is 100 Pearl Street, 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

Leroy Keith, Jr. YOB: 1939	Served since 1993.	48	Chairman (since 2010), Bloc Global Services Group, LLC (construction and redevelopment company); Managing Director (2007 to 2008), Almanac Capital Management (commodities business).	Director/Trustee (since 2010), Wells Fargo Funds (139 series) and their predecessors, Evergreen Funds (1989 to 2010); Director (2003 to 2010), Diversapack Co. (soft packaging company); and Trustee (since 1980), Virtus Mutual Fund Complex.

Philip McLoughlin Chairman YOB: 1946	Served since 1993.	63	Partner (since 2006), Cross Pond Partners, LLC (strategy consulting firm); Managing Director (2009 to 2010), SeaCap Asset Management Fund I, L.P. and SeaCap Partners, LLC (2009 to 2010) (investment management).	Director (since 1991) and Chairman (since 2010), World Trust Fund; Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (9 portfolios); Trustee and Chairman (since 2011), Virtus Closed-End Funds (2 portfolios); Trustee (since 1989), Virtus Mutual Fund Complex; Director (since 1996), closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios); and Director (1985 to 2009), Argo Group International Holdings Inc. and its predecessor, PXRE Corporation (insurance).

Geraldine M. McNamara YOB: 1951	Served since 2001.	52	Retired.	Trustee (since 2001), Virtus Mutual Fund Complex and Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios).


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

James M. Oates YOB: 1946	Served since 1993.	48	Managing Director (since 1994), Wydown Group (consulting firm).	Chairman and Trustee (since 2005), John Hancock Fund Complex (234 portfolios); Director (since 1996), Stifel Financial; Chairman and Director (since 1999), Connecticut River Bank and Director (since 1998), Connecticut River Bancorp; Chairman (since 2000), Emerson Investment Management, Inc.; Director (since 2002), New Hampshire Trust Company; Non-Executive Chairman (2007 to 2011), Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services); and Trustee (since 1987), Virtus Mutual Fund Complex.

Richard E. Segerson YOB: 1946	Served since 1983.	48	Managing Director (since 1998), Northway Management Company.	Trustee (since 1993), Virtus Mutual Fund Complex.

Ferdinand L.J. Verdonck YOB: 1942	Served since 2004.	48	Director (since 1998), The J.P. Morgan European Investment Trust; Director (since 2005), Galapagos N.V. (biotechnology); Mr. Verdonck is also a director of several non-U.S. companies.	Trustee (since 2002), Virtus Mutual Fund Complex.

*	Those Trustees listed as “Independent Trustees” are not “interested persons” of the Trust, as that term is defined in the 1940 Act.

Interested Trustee


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

George R. Aylward** Trustee and President YOB: 1964	Served Since 2006.	61	Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions with Virtus affiliates (since 2005).	Chairman, President and Chief Executive Officer (since 2006), The Zweig Closed-End Funds (2 portfolios); Trustee and President (since 2011), Virtus Closed-End Funds (2 portfolios); Trustee (since 2012), Virtus Variable Insurance Trust (9 portfolios); and Trustee (since 2006), Virtus Mutual Fund Complex.

**	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

W. Patrick Bradley YOB: 1972	Vice President, since 2011; Chief Financial Officer and Treasurer, since 2006.	Senior Vice President, Fund Services (since 2010), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2006) with Virtus affiliates; Vice President (since 2011), Chief Financial Officer and Treasurer (since 2004), Virtus Variable Insurance Trust; Vice President, Chief Financial Officer and Treasurer (since 2011), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund; Vice President (since 2012) and Treasurer (Chief Financial Officer) (since 2007), The Zweig Fund, Inc. and Zweig Total Return Fund, Inc.; Vice President and Assistant Treasurer (since 2011), Duff & Phelps Global Utility Income Fund Inc.

Kevin J. Carr YOB: 1954	Vice President, Chief Legal Officer, Counsel and Secretary, since 2005.	Senior Vice President (since 2009), 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; Vice President, Chief Legal Officer, Counsel and Secretary (since 2010), Virtus Variable Insurance Trust; Vice President and Assistant Secretary (since 2012), Vice President, Chief Legal Officer, Counsel and Secretary (2011-2012), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund; Vice President and Assistant Secretary (since 2012), Secretary and Chief Legal Officer (2005-2012), The Zweig Fund, Inc. and Zweig Total Return Fund, Inc.; Vice President and Assistant Secretary (since 2011), Duff & Phelps Global Utility Income Fund Inc.

Nancy J. Engberg YOB: 1956	Vice President and Chief Compliance Officer, since 2011.	Vice President (since 2008) and Chief Compliance Officer (2008 to 2011), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2003) with Virtus affiliates; Vice President (since 2010), Chief Compliance Officer (since 2011), Virtus Variable Insurance Trust; Vice President and Chief Compliance Officer (since 2011), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund; Vice President and Chief Compliance Officer (since 2012), The Zweig Fund, Inc. and Zweig Total Return Fund, Inc.


Name, Address and Year of Birth	Position(s) Held with the Trust and Length of Time Served	Principal Occupation(s) During Past 5 Years

Francis G. Waltman YOB: 1962	Senior Vice President, since 2008.	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; Senior Vice President (since 2010), Virtus Variable Insurance Trust; Senior Vice President (since 2011), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund.

Leadership Structure and the Board of Trustees

The Board is currently composed of seven trustees, including six 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.

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), (b) the passage of time and (c) the manner in which Mr. McLoughlin conducts his trusteeship. 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 of Trustees 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 James M. Oates, Chairperson, Dr. Leroy Keith, Jr., Philip R. McLoughlin, Geraldine M. McNamara, Richard E. Segerson and Ferdinand L.J. Verdonck. 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 of Trustees, as well as act on behalf of the Board when it is not in session, subject to limitations as set by the Board. Its members are Philip R. McLoughlin, Chairperson, Dr. Leroy Keith, Jr., and James M. Oates. Each of the members is an Independent Trustee. 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 Dr. Leroy Keith, Jr., Chairperson, Philip R. McLoughlin, Geraldine M. McNamara, James M. Oates, Richard E. Segerson and Ferdinand L.J. Verdonck. 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.

The Board has adopted a policy for consideration of Trustee nominees recommended by shareholders. With regards to such policy, an individual shareholder submitting a nomination must hold for at least one full year 5% of the shares of a series of the Trust. 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 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 of two closed-end funds managed by an affiliate of the Adviser and two closed-end funds managed by the Adviser.

Leroy Keith, Jr.

Dr. Keith has served in various roles in business and education, and has over 30 years of experience serving as a trustee to various mutual fund families. He holds both a masters degree and a doctorate in education and business administration. Dr. Keith has also served as an executive in commodities businesses for a number of years, and he has broad experience with respect to corporate governance and organizational leadership.

Philip R. McLoughlin

Mr. McLoughlin has extensive knowledge regarding asset management and the financial services industry, having served for a number of years in various executive and director positions of the company that is now Virtus and its affiliates, culminating in his role as chairman and chief executive officer. He also served as legal counsel and chief compliance officer to the investment companies associated with those companies at the time, giving him an understanding of the legal and compliance issues applicable to mutual funds. Mr. McLoughlin also has worked with U.S. and foreign companies in the insurance and reinsurance industry. He is also a Director of four closed-end funds managed by an affiliate of the Adviser and two closed-end funds managed by the Adviser.

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’s decades of advising individuals on their personal financial management have given her an enhanced understanding of the goals and expectations that individual investors bring to the Funds, ensuring that this important perspective is regularly included in the deliberations of the Board. Ms. McNamara is also a Director of four closed-end funds managed by an affiliate of the Adviser.

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 has served for a number of years as the Chairman of the Board of a family of mutual funds unaffiliated with the Trust, with over $294 billion in assets.

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 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.

Ferdinand L.J. Verdonck

Mr. Verdonck brings to the Board a broad background in finance, investments, banking and international business. His experience includes serving as the chief financial officer of the U.S. subsidiary of an international company, and as a senior vice president of a major U.S. investment firm. He also holds degrees in both law and economics. Mr. Verdonck has served for more than 25 years on the boards and audit committees of various U.S. and foreign companies.

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, 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 then 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, 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, 2012

As of December 31, 2012, the Trustees owned shares of the Funds as set forth in the table below. The following are the ranges: none, $1-$10,000, $10,001-$50,000, $50,001-$100,000 or over $100,000.


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
Leroy Keith, Jr.	None	$10,001 – $50,000
Philip R. McLoughlin	Emerging Markets Opportunities Fund – Over $100,000	Over $100,000
Geraldine M. McNamara	Emerging Markets Opportunities Fund – $10,001 – $50,000	Over $100,000
James M. Oates	Emerging Markets Opportunities Fund – $50,001 – $100,000	Over $100,000
Richard E. Segerson	Insight Money Market Fund – Over $100,000	Over $100,000
Ferdinand L.J. Verdonck	Emerging Markets Opportunities Fund – $1 – $10,000	Over $100,000

Interested Trustee
George R. Aylward	Emerging Markets Opportunities Fund – $10,001 – $50,000	Over $100,000

As of April 1, 2013, the Trustees and Officers of the Trust as a whole owned less than 1% of the outstanding shares of any of the Funds or their classes.

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, 2012, the current Trustees received the following compensation:


	Aggregate Compensation from Trust	Total Compensation From Trust and Fund Complex Paid to Trustees

Independent Trustees
Leroy Keith, Jr.	$50,020	$167,000 (48 Funds)
Philip R. McLoughlin	$83,000	$503,000 (63 Funds)
Geraldine M. McNamara	$48,581	$248,000 (52 Funds)
James M. Oates	$51,459	$174,000 (48 Funds)
Richard E. Segerson	$48,581	$164,000 (48 Funds)
Ferdinand L.J. Verdonck	$48,581	$164,000 (48 Funds)

Interested Trustee
George R. Aylward	None	None

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 17-j1 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 Senior Management Code of Ethics as required by Section 406 of the Sarbanes-Oxley Act of 2002.

Proxy Voting Policies

The Trust has adopted on behalf of the Funds a Policy Regarding Proxy Voting stating the Trust’s intention 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 have committed 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 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.

The Policy stipulates that the Funds’ Adviser will vote proxies, or delegate such responsibility to a subadviser. The applicable voting party will vote proxies in accordance with this Policy, or its own policies and procedures, which in no event will conflict with the Trust’s Policy. The Adviser or applicable subadviser may engage a qualified, independent organization to vote proxies on its behalf (a “delegate”). Matters that may affect substantially the rights and privileges of the holders of securities to be voted will be analyzed and voted on a case-by-case basis taking into consideration such relevant factors as enumerated in the Policy. The views of management of a portfolio company will be considered.

The Policy specifies certain factors that will be considered when analyzing and voting proxies on certain issues, including, but not limited to:

_•

Corporate Governance Matters—tax and economic benefits of changes in the state of incorporation; dilution or improved accountability associated with anti-takeover provisions such as staggered boards, poison pills and supermajority provisions.

_•

Stock Option and Other Management Compensation Issues—executive pay and spending on perquisites, particularly in conjunction with sub-par performance and employee layoffs.

_•

Social and Corporate Responsibility Issues—the Adviser or subadviser will generally vote against shareholder social and environmental issue proposals.

The Funds and their delegates seek to avoid actual or perceived conflicts of interest of Fund shareholders, on the one hand, and those of the Adviser, subadviser, delegate, Distributor, or any affiliated person of the Funds, on the other hand.

Depending on the type and materiality, any conflicts of interest will be handled by (i) relying on the recommendations of an established, independent third party proxy voting vendor; (ii) voting pursuant to the recommendation of the delegate; (iii) abstaining; or (iv) where two or more delegates provide conflicting requests, voting shares in proportion to the assets under management of each delegate. The Policy requires each Adviser/subadviser or delegate to notify the President of the Trust of any actual or potential conflict of interest. No Adviser/subadviser or delegate may waive any conflict of interest or vote any conflicted proxies without the prior written approval of the Board of Trustees or the President of the Trust.

The Policy further imposes certain record keeping and reporting requirements on each Adviser/subadviser or delegate. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ending June 30 will be available free of charge by calling, toll-free, 800.243.1574, or on the SEC’s Web site at www.sec.gov .

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of April 1, 2013, the persons who owned of record, or were known by the Trusts to own beneficially, 5% or more of the outstanding shares of any class of the Funds included in this SAI are shown in Appendix B—Principal Shareholders.

INVESTMENT ADVISORY AND OTHER SERVICES

Investment Adviser

The investment adviser to each of the Funds is Virtus Investment Advisers, Inc., located at 100 Pearl Street, Hartford, Connecticut 06103. VIA, an indirect, wholly-owned subsidiary of Virtus, acts as the investment adviser for over 50 mutual funds and as adviser to institutional clients. VIA has acted as an investment adviser for over 80 years. As of December 31, 2012, VIA had approximately $29.8 billion in assets under management.

Investment Advisory Agreement and Expense Limitation Agreement

The investment advisory agreement, approved by the Board of Trustees, 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, interest, taxes, brokerage fees and commissions, fees of Trustees who are not employees of VIA 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 of Trustees, 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, VIA is entitled to a fee, payable monthly, at the following annual rates:


Fund	Management Fees
High Yield Income Fund	0.45%
Tax-Exempt Bond Fund	0.45%
Emerging Markets Opportunities Fund	First$1 billion	$1+ billion
	1.00%	0.95%
Low Duration Income Fund	First$1 billion	$1+ billion through $2 billion	$2+ billion
	0.55%	0.50%	0.45%
	First $100 million	Remaining net assets
Insight Government Money Market Fund	0.14%	0.10%
Insight Money Market Fund	0.14%	0.10%
Insight Tax-Exempt Money Market Fund	0.14%	0.10%

VIA may waive any portion of its investment advisory fees or reimburse Fund expenses from time to time. VIA has voluntarily agreed to limit the annual operating expenses (excluding acquired fund fees and expenses (if any), interest, taxes and extraordinary expenses) of the following Funds (expressed as a percentage of daily net assets):


Fund	Class I Shares	Class A Shares	Class C Shares
Low Duration Income Fund	0.75%	0.95%	1.70%
Tax Exempt Bond Fund	0.65%	0.85%	1.60%

The Adviser may discontinue these voluntary expense caps and/or fee waivers at any time. The Adviser may recapture operating expenses reimbursed under this arrangement, for a period of three years following the fiscal year in which such reimbursement occurred.

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 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 of Trustees 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 of Trustees 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, Kevin Carr and Frank Waltman, each serve as an officer of the Trust and as an officer and/or director of the Adviser. The other principal executive officers and directors of the Adviser are: Michael Angerthal, Executive Vice President, Chief Financial Officer and a Director; Mark Flynn, Executive Vice President, General Counsel and Assistant Clerk; and David Fusco, Vice President and Chief Compliance Officer.

Advisory Fees

The following table shows the dollar amount of fees payable to VIA for its services with respect to each Fund, the amount of fees waived and/or expenses reimbursed by VIA, if any, and the actual fee received by VIA for the past three fiscal years.


	Gross Advisory Fee ($)						Advisory Fee Waived and/or Expenses Reimbursed ($)*						Net Advisory Fee ($)
Fund	2010		2011		2012		2010		2011		2012		2010		2011		2012
Emerging Markets Oppor tunities Fund		4,768,823		17,209,434		43,454,977		—		—		—		4,768,823		17,209,434		43,454,977
High Yield Income Fund		218,119		235,425		272,647		—		—		—		218,119		235,425		272,647
Insight Govern ment Money Market Fund		320,259		1,042,540		1,223,569		11,848		639,760		246,023		308,411		402,780		977,546
Insight Money Market Fund		1,938,584		1,323,558		529,870		—		73,349		37,738		1,938,584		1,250,209		492,132
Insight Tax-Exempt Money Market Fund		850,784		268,409		212,404		—		171,552		145,225		850,784		96,857		67,179
Low Duration Income Fund		472,388		460,640		419,822		69,542		148,854		167,853		402,846		311,786		251,969
Tax-Exempt Bond Fund		565,717		706,295		1,391,281		103,182		273,833		394,087		462,535		432,462		997,194

Under the terms of the agreement by which VIA adopted the Trust from BMO AM (then Harris Investment Management, Inc.), VIA is responsible for 50% of the amounts paid for fee waivers and/or reimbursement of Fund operating expenses for funds subadvised by BMO AM, with BMO AM being responsible for the remaining 50%. The amount shown reflects VIA’s portion only. VIA will pay to BMO AM 50% of any such reimbursements that are subsequently recaptured.

Subadvisers and Subadvisory Agreements

VIA has entered into subadvisory agreements with respect to each Fund. Each subadvisory agreement provides that VIA 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. VIA 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.

BMO Asset Management Corp. — Insight Government Money Market Fund, Insight Money Market Fund, Insight Tax-Exempt Money Market Fund

BMO AM (formerly known as Harris Investment Management, Inc.) is located at 115 South LaSalle Street, 11th Floor, P.O. Box 755, Chicago, IL 60603. BMO AM is a wholly-owned subsidiary of BMO Bankcorp, Inc., which is wholly owned by BMO Financial Corp. BMO Financial Corp. is wholly owned by Bank of Montreal, a publicly-traded Canadian banking institution. As of December 31, 2012 BMO AM had approximately $33 billion in assets under management.

For its services as a subadviser, VIA will pay BMO AM the following annual subadvisory fee rate (expressed as a percentage of average daily net assets):


Fund		Subadvisory Fee (%)*
Insight Government Money Market Fund		0.07% on each Fund’s first $100 million of net assets, plus
Insight Money Market Fund		0.05% on the Fund’s remaining net assets.
Insight Tax-Exempt Money Market Fund

*	For each Fund, the subadvisory fee paid to BMO AM will be reduced by 50% of any reimbursements or waivers by VIA and increased by 50% any such reimbursements of waivers subsequently recaptured.

Monegy, Inc. — High Yield Income Fund

Monegy (formerly known as HIM Monegy, Inc.) is located at 302 Bay Street, 12th Floor, Toronto, ON, Canada M5X 1A1. Monegy is owned by BMO AM. As of December 31, 2012, Monegy had approximately $2.2 billion in assets under management.

For its services as a subadviser, VIA will pay Monegy a fee at the rate of 50% of the net advisory fee paid by each Fund for which Monegy acts as a subadviser.

Newfleet Asset Management — Low Duration Income Fund and Tax-Exempt Bond Fund

Newfleet, 100 Pearl Street, Hartford, CT, is an indirect, wholly-owned subsidiary of Virtus and an affiliate of VIA. Newfleet acts as subadviser to open- and closed-end funds and as investment adviser to institutions and individuals. As of December 31, 2012, Newfleet had approximately $10.9 billion in assets under management.

For its services as a subadviser, VIA pays Newfleet a fee at the rate of 50% of the net investment management fee paid by each Fund for which Newfleet acts as a subadviser.

Vontobel Asset Management, Inc. — Emerging Markets Opportunities Fund

Vontobel , 1540 Broadway, 38 ^th Floor, New York, NY 10036, is a wholly-owned subsidiary of Vontobel Holding AG, a Swiss bank holding company which is traded on the Swiss Stock Exchange. As of December 31, 2012, Vontobel had approximately $35 billion in assets under management.

For its services as a subadviser, VIA pays Vontobel a fee at the rate of 50% of the net advisory fee paid by each Fund for which Vontobel acts as a subadviser.

Subadvisory Fees

The following table shows the dollar amount of fees payable to each subadviser for managing the applicable Fund(s), the amount of expenses reimbursed by the subadviser, and the actual fee received by the subadviser for the fiscal years ended December 31, 2010, 2011 and 2012.


	Gross Subadvisory Fee ($)						Subadvisory Fee Waived and/or Expenses Reimbursed ($)*						Net Subadvisory Fee ($)
Fund	2010		2011		2012		2010		2011		2012		2010		2011		2012
Emerging Market Opport unities Fund		4,768,823		17,209,434		43,454,977		—		—		—		4,768,823		17,209,434		43,454,977
High Yield Income Fund		218,119		235,425		272,647		—		—		—		218,119		235,425		272,647
Insight Govern ment Money Market Fund		313,168		1,042,550		1,223,569		8,033		320,812		122,689		305,135		721,738		1,100,880
Insight Money Market Fund		1,937,239		1,323,564		529,870		—		36,675		18,838		1,937,239		1,286,889		511,032
Insight Tax-Exempt Money Market Fund		850,784		268,410		212,405		—		85,863		72,363		850,784		182,547		140,042
Low Duration Income Fund		472,388		460,640		419,822		69,542		74,427		83,927		402,846		386,213		335,895
Tax-Exempt Bond Fund		565,717		706,295		1,391,281		130,182		136,917		197,043		462,535		569,378		1,194,238

Under the terms of the agreement by which VIA adopted the Trust from BMO AM (then Harris Investment Management, Inc.), VIA is responsible for 50% of the amounts paid for fee waivers and/or reimbursement of Fund operating expenses for funds subadvised by BMO AM, with BMO AM being responsible for the remaining 50%. The amount shown reflects BMO AM’s portion only. VIA will pay to BMO AM 50% of any such reimbursements that are subsequently recaptured.

Administrator

Effective January 1, 2013, Virtus Fund Services, LLC is the administrator of the Trust. Prior to January 1, 2013, VP Distributors served as the administrator of the Trust. Virtus Fund Services and VP Distributors are indirect, wholly-owned subsidiaries of Virtus and affiliates of the Adviser. For its services as administrator for the fiscal year ended December 31, 2012, VP Distributors received, and for its services as administrator as of the date of this SAI Virtus Fund Services is entitled to receive, an administration fee based upon the average net assets across all non-money market series of the Virtus Mutual Funds at the following annual rates:


First $15 billion	0.10	%
$15+ billion to $30 billion	0.095	%
$30+ billion to $50 billion	0.09	%
Greater than $50 billion	0.085	%

For the money market funds, the fee is 0.015% of the average net assets across all Virtus money market funds within Virtus Mutual Funds. From April 14, 2010 until December 31, 2010, the fee was based upon the average net assets across all non-money market series of the Virtus Mutual Funds at the annual rate of 0.10%.

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 April 14, 2010, VP Distributors was paid at the following incremental annual rates (based upon average net assets across all non-money market series of Virtus Mutual Funds):


First 5 billion	0.09	%
$5 billion to $15 billion	0.08	%
Greater than $15 billion	0.07	%

For the Money Market Funds, the fee was 0.015% of the average net assets across all Virtus Money Market Funds within the Virtus Mutual Funds.

The following table shows the dollar amount of fees paid to VP Distributors for the fiscal years ended December 31, 2010, 2011 and 2012, for its administrative services with respect to each Fund.


Administration Fee ($)
Fund	2010		2011		2012
Emerging Markets Opportunities Fund		495,957		1,750,397		4,444,795
High Yield Income Fund		50,555		52,077		59,582
Insight Government Money Market Fund		68,142		150,381		177,559
Insight Money Market Fund		480,209		192,539		73,507
Insight Tax-Exempt Money Market Fund		211,087		34,297		25,836
Low Duration Income Fund		88,663		81,851		75,084
Tax-Exempt Bond Fund		132,268		156,728		304,041

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 average net assets across all Non-Money Market Funds within the Virtus Mutual Funds at the following incremental rates:


First $15 billion	0.0358	%
Over $15 billion	0.025	%

For the money market Funds, the fee is 0.02% of the average net assets across all Virtus money market Funds within the Virtus Mutual Funds. For the purposes of applying the fee breakpoints, the Virtus Mutual Funds’ average net assets may be aggregated with the average net assets of an affiliated fund complex for which Virtus Fund Services acts as administrator.

Distributor

VP Distributors, a broker-dealer registered with the 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. The principal office of VP Distributors is located at 100 Pearl Street, 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.

The following table shows the dollar amount of sales charges paid to VP Distributors for the fiscal years ended December 31, 2010, 2011, and 2012, with respect to sales of Class A Shares of each Fund and the amount of sales charges retained by the distributor and not reallowed to other persons. There were no sales charges paid to the distributor with respect to Class A Shares of the Funds not mentioned below. However, shareholders of the Emerging Markets Opportunities Fund paid Class A deferred sales charges of $3,813 and Tax-Exempt Bond Fund paid Class A deferred sales charges of $2,652.


	Aggregate Underwriting Commissions ($)						Amount Retained by the Distributor ($)						Amount Reallowed ($)
	2010		2011		2012		2010		2011		2012		2010		2011		2012
Emerging Markets Opportunities Fund		919,471		1,322,121		3,633,267		114,736		149,931		476,178		804,736		1,172,190		3,157,089
High Yield Income Fund		5,277		1,526		15,713		574		214		2,163		4,703		1,312		13,550
Low Duration Income Fund		37,640		8,713		41,125		4,505		1,749		7,610		33,135		6,964		33,515
Tax-Exempt Bond Fund		330,454		64,831		180,257		34,922		6,126		28,411		295,533		58,705		151,846

Dealer Concessions

Dealers with whom the Distributor has entered into sales agreements receive a discount or commission on purchases of Class A Shares as set forth below.

Virtus Low Duration Income Fund


Amount of Transaction at Offering Price	Sales Charge as a Percentage of Offering Price			Sales Charge as Percentage of Amount Invested			Dealer Discount Percentage of Offering Price
Under $50,000		2.25	%		2.30	%		2.00	%

$50,000 but under $100,000		1.25			1.27			1.00

$100,000 but under $500,000		1.00			1.01			1.00

$500,000 but under $1,000,000		0.75			0.76			0.75

$1,000,000 or more		None			None			None

Virtus 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 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 High Yield Income 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 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

Emerging Markets Opportunities 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 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. This sales commission will not be paid to dealers for sales of Class C Shares purchased by 401(k) participants of the Merrill Lynch Daily K Plan (the “Plan”) due to waiver of the CDSC for these Plan participants’ purchases. 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 who enter into special arrangements with the Distributor may receive compensation for the sale and promotion of shares of the Trust and/or for providing other shareholder services. 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; provision of recordkeeping and administrative services to qualified employee benefit plans; and other criteria as established by the Distributor. Depending on the nature of the services, these fees may be paid either from the Trust through distribution fees, service fees or transfer agent fees or in some cases, the Distributor may pay certain fees from its own profits and resources.

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. Among others, the Distributor has agreed to make such payments for marketing support services to AXA Advisors, LLC. Additionally, for Virtus fixed income 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, 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 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 of such investments within 18 months of purchase. For all Virtus fixed income funds, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. For purposes of determining the applicability of the CDSC, the 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 0.25% beginning in the thirteenth month following purchase of Class A Shares on which a finder’s fee has been paid. VP Distributors reserves the right to discontinue or alter such fee payment plans at any time.

From its own resources or pursuant to the Trust’s Distribution Plan, 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, re-allow 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.

Custodian

JPMorgan Chase Bank, N.A., One Chase Manhattan Plaza, 19 ^th Floor, New York, NY 10005, serves as the custodian (the “Custodian”) of the Funds’ assets. The Custodian designated by the Board of Trustees 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. 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.

Transfer Agent and Sub-Transfer Agent

Effective January 1, 2013, Virtus Fund Services acts as transfer agent for the Trust. Prior to January 1, 2013, VP Distributors served as the transfer agent. Pursuant to a Transfer Agent and Service Agreement, Virtus Fund Services receives a fee, based on the average net assets across all series of Virtus Mutual Funds at an annual rate ranging from 0.045% to 0.0025%, depending on asset class. Virtus Fund Services is authorized to engage subagents to perform certain shareholder servicing functions from time to 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. Fees paid by the Funds, in addition to the fee paid to Virtus Fund Services, will be reviewed and approved by the Board of Trustees.

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. PricewaterhouseCoopers LLP 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.

SERVICE AND DISTRIBUTION PLANS

The Trust has adopted a service and/or a distribution plan for each class of shares, as indicated below (collectively, the “Plans”), to compensate the Distributor for the services it provides and for the expenses it bears under the underwriting agreement. The Service Plans provide for the Funds to pay service fees up to the amounts indicated, but do not authorize payments under the Plan to be made for distribution purposes and have not been adopted under Rule 12b-1 of the 1940 Act. The Distribution Plans provide for the Funds to pay distribution/service

fees in the amounts indicated and have been adopted in accordance with Rule 12b-1. Fees are calculated at the indicated annual rate against the average daily net assets of each applicable Fund.


Plan Name	Plan Applicable to Named Funds	Amount Authorized under Plan			Amount Currently Authorized by Board of Trustees
Distribution Plan Pursuant to Rule 12b-1 – Class A Shares	All Non-Money Market Funds		0.25	%		0.25	%
Distribution Plan Pursuant to Rule 12b-1 – Class A Shares	All Money Market Funds		0.10	%		0.10	%
Distribution Plan Pursuant to Rule 12b-1 –Class C Shares	All Funds		1.00	%		1.00	%
Service Plan – Class A Shares	All Money Market Funds		0.25	%		0.25	%
Service Plan – Class I Shares	All Funds		0.25	%		0.05	%

Under each Plan, the Distributor will 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 (a “service fee”). Under the Distribution Plans, the amounts paid may be used for distribution related activities. 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 reallowed to such firms. To the extent that the entire amount of the service fee is not paid to such firms, the balance will serve as compensation for personal and account maintenance services furnished by the Distributor.

Each Plan requires that at least quarterly the Board of Trustees of the Trust review a written report with respect to the amounts expended under the Plans and the purposes for which such expenditures were made. While the Plans are in effect, the Trust will be required to commit the selection and nomination of candidates for Independent Trustees to the discretion of other Independent Trustees. Each Plan continues in effect from year to year provided such continuance is approved annually in advance by votes of the majority of both (a) the Board of Trustees of the Trust and (b) the Independent Trustees, cast in person at a meeting called for the purpose of voting on the Plan and any agreements related to the Plan.

In order to receive payments under the Plans, participants (“Service Organizations”) 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.

The following table shows Service Organization fees paid by the Funds to VP Distributors with respect to Class A Shares, Class C Shares and Class I Shares of each Fund for which such fees were paid for the period ended December 31, 2012. The Rule 12b-1 Fees were primarily used to compensate broker dealers and financial institutions for services that they provided.


Fund	Shareholder Servicing Plan Fees Paid ($)		Shareholder Servicing Plan Fees Waived ($)		Rule 12b-1 Fees Paid ($)		Rule 12b-1 Fees Waived ($)
Emerging Markets Opportunities Fund		1,779,965		1,779,983		3,395,496		—
High Yield Income Fund		28,706		28,706		14,612		—
Insight Government Money Market Fund		552,613		552,615		78,355		272,845
Insight Money Market Fund		125,793		125,793		238,289		793,329
Insight Tax-Exempt Money Market Fund		43,694		43,694		85,018		297,445
Low Duration Income Fund		20,547		20,547		207,825		—
Tax-Exempt Bond Fund		73,205		73,205		665,872		—

For the fiscal year ended December 31, 2012, the Funds paid Rule 12b-1 distribution fees in the amount of $4,763,934 of which the principal underwriter paid $3,390,253 and unaffiliated broker-dealers received $1,373,681. Distributor expenses under the 12b-1 Plans consisted of: (1) compensation to dealers, $3,892,631; (2) compensation to sales personnel, $2,989,889; (3) advertising, $436,333; (4) printing and mailing of prospectuses to other than current shareholders, $40,446; and (5) other, $86,596.

For the fiscal year ended December 31, 2012, the Funds paid service fees in the amount of $1,004,154 of which the Distributor received $(4,431) and unaffiliated broker-dealers received $1,008,585. Distributor expenses under the Service Plans consisted of compensation to dealers of $51,445.

No interested person of the Trust and no Trustee who is not an interested person of the Trust, as that term is defined in the 1940 Act, had any direct or indirect financial interest in the operation of the Plans or related agreements.

The Board of Trustees has also adopted a Plan Pursuant to Rule 18f-3 under 1940 Act permitting the issuance of shares in multiple classes.

The FINRA regards certain distribution fees as asset-based sales charges subject to FINRA sales load limits. The FINRA’s maximum sales charge rule may require the Board of Trustees to suspend distribution fees or amend the Plans.

PORTFOLIO MANAGERS

Other Accounts Managed by Portfolio Managers and Potential Conflicts of Interest

As described in each Fund’s prospectuses, the portfolio manager(s) who are responsible for the Funds are:


Fund		Portfolio Manager(s)
Emerging Markets Opportunities Fund		Rajiv Jain

High Yield Income Fund		Lori J. Marchildon Ovidiu Sandu Sadhana Valia

Insight Government Money Market Fund		Peter J. Arts Boyd R. Eager

Insight Money Market Fund		Peter J. Arts Boyd R. Eager

Insight Tax-Exempt Money Market Fund		Peter J. Arts Boyd R. Eager

Low Duration Income Fund		David L. Albrycht Benjamin Caron Christopher J. Kelleher

Virtus Tax-Exempt Bond Fund		Timothy M. Heaney Lisa H. Leonard

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 of Trustees 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 of Trustees on a quarterly basis. There have been no material compliance issues with respect to any of these policies and procedures during the 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.

The following table provides information as of December 31, 2012, 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. The portfolio managers managing the Funds may also manage or be members of management teams for other Virtus Mutual Funds or other similar accounts.

Registered Investment
Companies

Other Pooled Investment
Vehicles
(PIVs)

Other
Accounts

Portfolio Manager

Number

Accounts

Total

Assets

Number

Accounts

Total

Assets

Number

Accounts

Total

Assets

David L. Albrycht

9.2 billion

None

N/A

None

N/A

Peter J. Arts ⁽¹⁾

2 billion

35 million

100

13 billion

Benjamin Caron

322 million

None

N/A

None

N/A

Boyd R. Eager ⁽¹⁾

2 billion

35 million

600 million

Timothy M. Heaney

56 million

None

N/A

None

N/A

Rajiv Jain ⁽²⁾

2.01 billion

11.7 billion

13.3 billion

Christopher J. Kelleher

346 million

None

N/A

387 million

Lisa H. Leonard

None

N/A

None

N/A

None

N/A

Lori J. Marchildon

616 million

74 million

1.4 billion

Ovidiu Sandu

None

N/A

None

N/A

None

N/A

Sadhana Valia

616 million

74 million

1.4 billion

(1)	Assets by portfolio manager include those accounts of BMO AM and affiliates and member companies of BMO Global Asset Management.

(2)

As of December 31, 2012, the portfolio managers, except for Mr. Jain who manages one separate account totaling $201 million in assets that pays Vontobel performance fees, did not manage any accounts with respect to which the advisory fee is based on the performance of the account, nor do they manage any hedge funds.

Portfolio Manager Compensation

BMO Asset Management

The compensation program for investment professionals of BMO AM, including the portfolio managers of the Funds, is designed to provide a total compensation package that (a) serves to align employees’ interests with those of their clients, and (b) helps management to attract and retain high quality investment professionals.

All investment professionals are compensated through a combination of a fixed base salary and bonus. Senior management retains a national compensation consultant to undertake a study, at least annually, to determine appropriate levels of base compensation for the firm’s investment professionals. Bonus amounts are determined by many factors including: the pre-tax investment performance of the portfolio manager compared to the performance of benchmarks relevant to their managed investment strategies and performance of a peer group of funds and investment managers over a rolling one- and three-year performance period. The relevant benchmarks and peer groups for the Funds are set forth below:


Fund	Performance Benchmark	Peer Group (Lipper Universe Averages)
Insight Government Money Market	Peer Group	Lipper Institutional US Government Money Market Funds

Insight Money Market	Peer Group	Lipper Institutional Money Market Funds

Insight Tax-Exempt Money Market	Peer Group	Lipper Institutional Tax-Exempt Money Market Funds

Additional factors include each individual’s contributions to the success of the firm, and certain other factors at the discretion of senior management. The objective with regard to each component of compensation is to provide competitive compensation to investment professionals.

BMO AM has maintained a deferred incentive compensation program (nonqualified plan) which provides that certain key employees (currently, those who have been designated a Partner or Senior Partner of BMO AM, and

including portfolio managers, analysts, and certain non-investment personnel) are granted incentive awards annually, payment of which must be deferred to a future date. Awards through the end of fiscal year 2010 were invested in BMO AM’s managed funds and vest three years from the end of the specific year for which the awards were granted. Awards are payable to participants based on the provisions of the program and the elections of the participants. Beginning in 2011, deferred awards are delivered as Restricted Share Units (RSUs) that reflect the performance of Bank of Montreal common shares on the TSX and earn dividend equivalents in the form of additional units. Also, for key employees, including all senior investment professionals and management direct reports to the President & CEO of BMO AM, a portion of their deferred award is delivered as a Sustained Growth Award (SGA) that has business specific (i.e. BMO AM) post grant performance measures that are directly tied to the longer-term performance of the managed funds and the business as a whole. The incentive pool funding metrics for both the RSU and SGA are aligned to specific business financial objectives and awards vest at the end of three years following the end of the specific year for which the awards were granted. All non-vested awards are forfeited on resignation. The purpose of the deferred programs is to reinforce specific growth objectives, reward individual performance that is focused on the longer-term success of the business, and to provide assurance to investors in managed funds/portfolios that key employees have a personal stake in the investment performance of the funds.

Monegy

The High Yield Team’s compensation/incentive program for portfolio managers and research analysts consists of three components: (1) base salary; (2) short-term incentive program (annual bonus); and (3) long-term incentive program (deferred restricted share units and/or stock options of parent Bank). All investment professionals (portfolio managers, traders, research analysts, product specialists) are eligible to receive the three components of compensation. Each individual’s annual bonus combines individual contribution with overall firm performance, and the High Yield Team’s bonus pool is funded by a portion of its before-tax profits. Portfolio manager compensation is tied more closely to performance of the composites relative to their respective benchmarks as well as to the overall growth in assets under management and firm profitability, while credit analyst compensation is weighted more toward the quality and timeliness of credit recommendations (buy/sell/hold), and the performance of their sectors relative to benchmark.

The compensation program has a dual mandate to align the investment team’s interests with those of the client, and to attract and retain high caliber investment professionals. Senior management relies on Human Resources professionals to conduct periodic industry surveys, typically on an annual basis, to determine appropriate market levels of base and total compensation for all investment professionals.

With respect to any perceived conflicts of interest relating to the payment model, the risk management focus of the investment process drives all key decision making. Likewise, individual compensation is weighted more toward long term profit from fee-based client relationships than it is on short term fund performance, which further motivates the team to achieve stable long-term fee-based relationships through consistent benchmark outperformance and capital preservation. Finally, the deferred equity-linked component of the incentive compensation plan promotes a long-term interest in firm value.

Newfleet Asset Management

Virtus and certain of its affiliated investment management firms, including Newfleet (collectively, “Virtus”), believe that the firm’s compensation program is adequate and competitive to attract and retain high-caliber investment professionals. Investment professionals at Virtus receive a competitive base salary, an incentive bonus opportunity and a benefits package. Certain professionals who supervise and manage others also participate in a management incentive program reflecting their personal contribution and team performance. Certain key individuals also have the opportunity to take advantage of a long-term incentive compensation program, including potential awards of Virtus restricted stock units (“Virtus RSUs”) with multi-year vesting, subject to Virtus board of directors’ approval. Following is a more detailed description of Virtus’ compensation structure.

Base Salary. Each portfolio manager is paid a fixed base salary, which is designed to be competitive in light of the individual’s experience and responsibilities. Base salary is determined using compensation survey results of investment industry compensation conducted by an independent third party in evaluating competitive market compensation for its investment management professionals.

Incentive Bonus. Annual incentive payments are based on targeted compensation levels, adjusted based on profitability, investment performance factors and a subjective assessment of contribution to the team effort. The short-term incentive payment is generally paid in cash, but a portion may be made in Virtus RSUs. Individual payments are assessed using comparisons of actual investment performance with specific peer group or index measures. (Current benchmarks and/or peer groups are indicated in the table below.) Performance of the Funds

managed is generally measured over one-, three- and five year periods and an individual manager’s participation is based on the performance of each Fund/account managed.


Fund	Performance Benchmark	Peer Group (Lipper Universe Averages)
Low Duration Income Fund	Peer Group	Lipper Short-Intermediate Investment Grade Funds

Tax-Exempt Bond Fund	Peer Group	Lipper General Municipal Debt Funds

While portfolio manager compensation contains a performance component, this component is adjusted to reward investment personnel for managing within the stated framework and for not taking unnecessary risk. This approach ensures that investment management personnel remain focused on managing and acquiring securities that correspond to a Fund’s mandate and risk profile and are discouraged from taking on more risk and unnecessary exposure to chase performance for personal gain. Virtus believes it has appropriate controls in place to handle any potential conflicts that may result from a substantial portion of portfolio manager compensation being tied to performance.

Other benefits. Portfolio managers are also eligible to participate in broad-based plans offered generally to employees of Virtus and its affiliates, including 401(k), health and other employee benefit plans.

Vontobel Asset Management

The portfolio manager for the Emerging Markets Opportunities Fund is compensated by Vontobel. The portfolio manager’s compensation consists of two components. The first component is base salary, which is fixed. The second component of compensation is a small percentage of the gross revenues received by Vontobel which are generated by the products that the portfolio manager manages. Such incentive compensation accrues over and above specific threshold amounts of investment management fee generation of each strategy. Incentive compensation is paid quarterly in arrears. A significant portion of such incentive compensation is subject to 3 year deferrals. All amounts deferred must be invested in publicly traded mutual funds or non-registered commingled funds managed by the firm. In the case of the portfolio manager(s), amounts deferred equal approximately one year’s total compensation on a rolling basis. The portfolio manager does not receive any compensation directly from the Fund or the Adviser.

Portfolio Manager Fund Ownership

The following chart sets forth the dollar range of equity securities beneficially owned by each portfolio manager in each fund described in the funds’ prospectuses that he or she managed as of December 31, 2012:

None

$1-$10,000

$10,001-

$50,000

$50,001-

$100,000

$100,001-

$500,000

$500,001-

$1,000,000

over

$1,000,000

Emerging Markets Opportunities Fund

Rajiv Jain

High Yield Income Fund

Lori J. Marchildon

Ovidiu Sandu

Sadhana Valia

Insight Government Money Market Fund

Peter J. Arts

Boyd R. Eager

Insight Money Market Fund

Peter J. Arts

Boyd R. Eager

Insight Tax-Exempt Money Market Fund

Peter J. Arts

Boyd R. Eager

Low Duration Income Fund

David L. Albrycht

Benjamin Caron

Christopher J. Kelleher

Tax-Exempt Bond Fund

Timothy M. Heaney

Lisa H. Leonard

BROKERAGE ALLOCATION AND OTHER PRACTICES

In effecting transactions for the Funds, the 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 and the financial strength and stability of the broker. 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 implemented, and the Board of Trustees has 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 and procedures governing the execution of aggregated advisory client orders (“bunching procedures”) in an attempt to lower commission costs on a per-share and per-dollar basis. According to the bunching procedures, a Subadviser shall aggregate transactions unless it believes in its sole discretion that such aggregation is inconsistent 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 share 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 all accounts of the Subadviser whose orders are allocated receive fair and equitable treatment and the reason for such different allocation is explained in writing and is approved in writing by the Subadviser’s compliance officer prior to the execution of the order. If an aggregated order is partially filled and allocated on a basis different from that specified in the allocation order, no account that is benefited by such different allocation may intentionally and knowingly effect any purchase or sale for a reasonable period following the execution of the aggregated order that would result in it receiving or

selling more shares than the amount of shares it would have received or sold had the aggregated order been completely filled. The Board of Trustees will review these procedures from time to time as they deem appropriate.

For the Emerging Markets Opportunities Fund, Vontobel currently uses approximately 35 brokerage firms and independent consulting firms in addition to its internal professional staff, including Vontobel’s affiliates for brokerage and research services. Vontobel periodically evaluates the execution performance of the broker-dealers it selects for client transactions. Vontobel attempts to maintain a constant awareness of general street practices and policies with regard to commission levels and rates charged by most reputable brokerage firms, which allows Vontobel to take full advantage of the competitive environment and obtain rates that are considered fair and reasonable for its clients.

The following table shows aggregate amount of brokerage commissions paid by Emerging Markets Opportunities Fund. This information is for the past three fiscal years.

Aggregate Amount of
Brokerage Commissions ($)

2010

2011

2012

Emerging Markets Opportunities Fund

1,483,511

3,278,771

7,140,080

Investment decisions for the Trust are made independently from those of the other investment companies or accounts advised by the Subadvisers. It may frequently happen that the same security is held in the portfolio of more than one fund or account. Simultaneous transactions are inevitable when several funds or accounts are managed by the same investment adviser, particularly when the same security is suited for the investment objectives of more than one fund or account. When two or more funds or accounts advised by the Subadviser are simultaneously engaged in the purchase or sale of the same security, the transactions are allocated among the funds or accounts in a manner equitable to each fund or account. It is recognized that in some cases this system could have a detrimental effect on the price or volume of the security as far as the Funds are concerned. In other cases, however, it is believed that the ability of the Funds to participate in volume transactions will produce better executions for the Funds. It is the opinion of the Board of Trustees of the Trust that the desirability of utilizing each Subadviser as an investment adviser to the Funds outweighs the disadvantages that may be said to exist from simultaneous transactions.

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, 2012, the Funds acquired securities of certain of the Funds’ regular broker dealers or the parents of such firms. The aggregate holdings of the Funds of those brokers or dealers as of December 31, 2012 (amounts in thousands, except shares) were as follows:


Fund	Broker/Dealer	Value ($)
Insight Money Market Fund	Toronto Dominion LLC	11,000
Low Duration Income Fund	Morgan Stanley & Co., Inc.	2,130
	JPMorgan Chase & Co.	4,741
	Bank of America LLC	976
	Barclays Bank Plc	2,323
	Goldman Sachs & Co.	1,787
	Macquarie Securities (USA) Inc.	83
	Citicorp Securities Services, Inc.	2,761
	JPMorgan Chase & Co.	85

A Fund need only disclose information about an issuer that derived more than 15% of its gross revenues from the business of a broker, a dealer, an underwriter, or an investment adviser during its most recent fiscal year.

During the fiscal year ended December 31, 2012, the Funds had no directed brokerage transactions to brokers for proprietary and third party research services.

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

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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.

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 offers Class I Shares that may be purchased by certain institutional investors at a price equal to their NAV per share. For Non-Money Market Funds, 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 the authorized agent prior to its close of business. For money market funds, orders received by dealers are confirmed at the next-determined offering price following receipt by the authorized agent, provided the order is received by the authorized agent 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 services fee. For Class C Shares, the ongoing distribution and services fee will be used to pay for the distribution expenses incurred by the Distributor. Sales personnel of broker-dealers distributing the Funds’ shares may receive differing compensation for selling Class A Shares or Class C Shares.

Dividends paid by the 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 services 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—Non-Money Market Funds

Class A Shares 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 within 18 months following purchases on which a finder’s fee has been paid. For all fixed income Virtus Mutual Funds, Virtus AlphaSector Rotation Fund and Virtus Disciplined Bond Fund, 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 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% 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.

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Class A Shares—Money Market Funds

Class A Shares of the Money Market Funds are purchased without any sales charges. Class A Shares are subject to ongoing distribution and shareholder servicing (12b-1) fees at an annual rate of 0.10%. In addition, the Money Market Funds have adopted Shareholder Servicing Plans with an annual fee rate of 0.25%. The Distributor may from time to time temporarily waive the distribution and/or shareholder servicing fees on Class A Shares of the Money Market Funds. If waived, the distribution fees and/or shareholder servicing fees may be reinstated at any time.

Class C Shares—Non-Money Market Funds

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 services fees at an aggregate annual rate of up to 1.00% of the 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. However, 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. Class C Shares do not convert to another class of shares and long term investors may therefore pay more through accumulated distribution fees than the economic equivalent of any applicable sales charge and accumulated distribution fees in the other classes.

Class I Shares—All Funds

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 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.

Qualified Purchasers

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 the Virtus Mutual Funds, 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, 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 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; (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.

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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) former Class N Shareholders who received Class A Shares as a result of the conversion of Class N Shares to Class A Shares; (16) individuals purchasing through an account with an unaffiliated brokerage firm having an agreement with the Distributor to waive sales charges for its clients; (17) 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; (18) 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 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; (19) 401(k) participants in the Merrill Lynch Daily K Plan if such Plan has at least $3 million in assets or 500 or more eligible employees; or (20) 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 (16) through (20) may be charged a fee by the broker, agent or financial intermediary for purchasing shares.

Combination Purchase Privilege

Your purchase of any class of shares of these Funds or any other Virtus Mutual Fund (other than any Money Market Fund), 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 (a) any individual, his or her spouse and minor children purchasing shares for his, her or their own account (including an IRA account) including his, her or their own trust; (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 employer trusts or certain Section 403(b) plans for the same employer; (d) multiple accounts (up to 200) under a qualified employee benefit plan or administered by a third party administrator; or (e) 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 any Money Market Fund), if made by the same person within a 13-month 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 commitment. Since the Funds and their agents do not know whether you will ultimately fulfill the Letter of Intent, shares worth 5% of the amount of each purchase will be set aside until you fulfill the Letter of Intent. When you buy enough shares to fulfill the Letter of Intent, these shares will no longer be restricted. If, on the other hand, you do not satisfy the Letter of Intent, or otherwise wish to sell any restricted shares, you will be given the choice of either buying enough shares to fulfill the Letter of Intent or paying the difference between any sales charge you previously paid and the otherwise applicable sales charge. You will be given 20 days to make this decision. If you do not exercise either election, the Transfer Agent will automatically redeem the number of your restricted shares needed to make up the deficiency in sales charges received. The Transfer Agent will redeem restricted Class A Shares before Class B Shares or Class C Shares, respectively. Oldest shares will be redeemed before selling newer shares. Any remaining shares will then be deposited to your account.

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 any Money Market Fund), 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 the Funds and their agents at the time of purchase to exercise this right.

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

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of a particular company, policyholders of an insurance company, customers of a bank or a broker-dealer or clients of an investment adviser.

Class A and Class C Shares—Waiver of Deferred Sales Charges

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, (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 70 ¹ / ₂ 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 or any other Virtus Mutual Fund; (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. 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.

How to Redeem Shares

Under the 1940 Act, payment for shares redeemed must ordinarily be made within seven days after tender. 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 or more.

The Trust has authorized one or more brokers to receive 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.

Redemptions by Class A and Class C shareholders will be subject to the applicable deferred sales charge, if any.

A shareholder should contact his/her broker-dealer if he/she wishes to transfer shares from an existing broker-dealer street name account to a street name account with another broker-dealer. The Funds have no specific procedures governing such account transfers.

Redemption of Small Accounts

Each shareholder account in the Funds which has been in existence for at least one year and which has a value of less than $200, due to redemption activity may be redeemed upon the giving of not less than 60 days written notice to the shareholder mailed to the account address of record. During the 60-day period following such notice, the shareholder has the right to add to the account to bring its value to $200 or more. (See the Funds’ current Prospectuses for more information.)

Redemptions by Mail

Shareholders may redeem shares by making written request, executed in the full name of the account, directly to Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. (See the Funds’ current Prospectuses for more information.)

Redemptions by Telephone

Generally, shareholders may redeem by telephone up to $50,000 worth of their shares held in book-entry form. (See the Funds’ current Prospectuses for more information.) Corporations that have completed a Corporate Authorized Trader form may redeem more than $50,000 worth of shares in most instances.

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Redemptions by Check (Fixed Income Funds only)

Any shareholder of a Fixed Income Fund may elect to redeem shares held in his account by check. Checks will be sent to an investor upon receipt by the Transfer Agent of a completed application and signature card (attached to the application). If the signature card accompanies an individual’s initial account application, the signature guarantee section of the form may be disregarded. However, the Trust reserves the right to require that all signatures be guaranteed prior to the establishment of a check writing service account. When an authorization form is submitted after receipt of the initial account application, all signatures must be guaranteed regardless of account value.

Checks may be drawn payable to any person in an amount of not less than $250, provided that immediately after the payment of the redemption proceeds the balance in the shareholder’s account is $250 or more.

When a check is presented to the Transfer Agent for payment, a sufficient number of full and fractional shares in the shareholder’s account will be redeemed to cover the amount of the check. The number of shares to be redeemed will be determined on the date the check is received by the Transfer Agent. Presently there is no charge to the shareholder for the check writing service, but this may be changed or modified in the future upon two weeks written notice to shareholders. Checks drawn from Class A and Class C accounts are subject to the applicable deferred sales charge, if any.

The check writing procedure for redemption enables a shareholder to receive income accruing on the shares to be redeemed until such time as the check is presented to the Transfer Agent for payment. Inasmuch as canceled checks are returned to shareholders monthly, no confirmation statement is issued at the time of redemption.

Shareholders utilizing withdrawal checks will be subject to the Transfer Agent’s rules governing checking accounts. A shareholder should make sure that there are sufficient shares in his or her account to cover the amount of any check drawn. If insufficient shares are in the account and the check is presented to the Transfer Agent on a banking day on which the Trust does not redeem shares (for example, a day on which the NYSE is closed), or if the check is presented against redemption proceeds of an investment made by check which has not been in the account for at least fifteen calendar days, the check may be returned marked “Non-sufficient Funds” and no shares will be redeemed. A shareholder may not close his or her account by a withdrawal check because the exact value of the account will not be known until after the check is received by the Transfer Agent.

Redemptions in Kind

To the extent consistent with state and federal law, the Funds, except the Money Market Funds, may make payment of the redemption price either in cash or in kind. However, the Funds have elected to pay in cash all requests for redemption by any shareholder of record, limited in respect to each shareholder during any 90-day period to the lesser of $250,000 or 1% of the NAV of the Fund at the beginning of such period. This election has been made pursuant to Rule 18f-1 under the 1940 Act and is irrevocable while the Rule is in effect unless the SEC, by order, permits the withdrawal thereof. In case of a redemption in kind, securities delivered in payment for shares would generally represent the shareholder’s proportionate share of the Fund’s current net assets and be valued at the same value assigned to them in computing the NAV per share of the Fund. A shareholder receiving such securities would incur brokerage costs when selling the securities.

Account Reinstatement Privilege

Shareholders who may have overlooked features of their investment at the time they redeemed have a privilege of reinvestment of their investment at NAV. (See the Funds’ current Prospectuses for more information.)

Returned/Uncashed Checks Policy

For the protection of Fund shareholders, if you have elected to receive dividends and other distributions in cash, and the check is returned to the Fund as undeliverable or you do not respond to mailings from Virtus with regard to uncashed distribution checks, we may take any of the following actions:

_•

The distribution option on your account(s) will be changed to reinvest and all subsequent payments will be reinvested in additional shares of the Fund.

_•

Any systematic withdrawal plan will be stopped immediately.

_•

If a check is not presented for payment within six months, the Fund reserves the right to reinvest the check proceeds.

_•

If reinvested, distributions will be reinvested in the Fund at the earliest date practicable after the waiting period at the then-current NAV of such Fund.

_•

No interest will accrue on amounts represented by uncashed dividend, distribution or redemption checks.

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This policy may not apply to certain retirement or qualified accounts, closed accounts or accounts under the applicable Fund’s required minimum threshold.

Reinvestment of future distributions will continue until you notify us of your election to reinstate cash payment of the dividends and other distributions. You will also be required to confirm your current address and daytime telephone number.

Pricing of Shares

For Non-Money Market Funds, the NAV per share of each class of each fund generally is determined as of the close of regular trading (normally 4:00 PM eastern time) on days when the NYSE is open for trading. A Non-Money Market Fund will not calculate its NAV per share class on days when the NYSE is closed for trading. For Money Market Funds, the NAV of each class of each Fund generally is determined as of the times indicated in the table below on each business day, except on those days the SIFMA recommends that the U.S bond market remains closed.

The Money Market Funds may price their shares at an earlier time if an early close is recommended by SIFMA. Information regarding whether they are expected to do so on any such day will be available to investors who call the Transfer Agent toll free at 800.243.1574. A Money Market Fund generally will not calculate its NAV per share class on days SIFMA has recommended that the U.S. bond market remains closed.


Normal Pricing Times for Money Market Funds
Insight Government Money Market Fund		4:30 PM eastern time
Insight Money Market Fund		4:30 PM eastern time
Insight Tax-Exempt Money Market Fund		12:00 Noon eastern time

The NYSE will be closed on the following observed national holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Since the Funds do not price securities on weekends or United States national holidays, the NAV of a Fund’s foreign assets may be significantly affected on days when the investor may not be able to purchase or sell shares of the Funds. The NAV per share of a Fund is determined by adding the values of all securities and other assets of the Fund, subtracting liabilities, and dividing by the total number of outstanding shares of the Fund. Assets and liabilities are determined in accordance with generally accepted accounting principles and applicable rules and regulations of the SEC. The total liability allocated to a class, plus that class’s distribution fee and any other expenses allocated solely to that class, are deducted from the proportionate interest of such class in the assets of the Fund, and the resulting amount of each is divided by the number of shares of that class outstanding to produce the NAV per share.

Security valuation procedures for each Fund, which include nightly price variance as well as back-testing such as bi-weekly unchanged price, monthly secondary source and transaction analysis, have been approved by the Board of Trustees. All internally fair valued securities are approved by a valuation committee (the “Valuation Committee”) appointed by the Board. The Valuation Committee is comprised of the treasurer and assistant treasurer of the Trust, along with two appointees of the Adviser who are identified to the Board of Trustees. All internally fair valued securities, referred to below, are updated daily and reviewed in detail by the Valuation Committee monthly unless changes occur within the period. The Valuation Committee reviews the validity of any model inputs and any changes to the model when applicable. Internal fair valuations are reviewed by the Board of Trustees at least quarterly.

Each Fund utilizes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

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Level 1 – quoted prices in active markets for identical securities

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Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

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Level 3 – prices determined using significant unobservable inputs (including the valuation committee’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

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A description of the valuation techniques applied to a Fund’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

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 and are categorized as Level 1 in the hierarchy. Restricted equity securities and private placements that are not widely traded, are illiquid or are internally fair valued by the valuation committee, are generally categorized as Level 3 in the hierarchy.

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 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, exchange traded funds, and certain indexes as well as prices for similar securities. Such fair valuations are categorized as Level 2 in the hierarchy. Because the frequency of significant events is not predictable, fair valuation of certain non-U.S. common stocks may occur on a frequent basis.

Debt securities, including restricted securities, are valued based on evaluated quotations received from independent pricing services or from dealers who make markets in such securities. For most bond types, the pricing service utilizes matrix pricing which considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type, and current day trade information, as well as dealer supplied prices. These valuations are generally categorized as Level 2 in the hierarchy. Structured debt instruments such as mortgage-backed and asset-backed securities may also incorporate collateral analysis and utilize cash flow models for valuation and are generally categorized as Level 2 in the hierarchy. Pricing services do not provide pricing for all securities and therefore indicative bids from dealers are utilized which are based on pricing models used by market makers in the security and are generally categorized as Level 2 in the hierarchy. Debt securities that are not widely traded, are illiquid, or are internally fair valued by the valuation committee are generally categorized as Level 3 in the hierarchy.

Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized as Level 1 in the hierarchy.

Over-the-counter (OTC) derivative contracts, which include forward currency contracts and equity linked instruments, do not require material subjectivity as pricing inputs are observed from actively quoted markets and are categorized as Level 2 in the hierarchy.

Investments in open-end mutual funds are valued at their closing NAV each business day and are categorized as Level 1 in the hierarchy.

Short-term notes having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market, and are generally categorized as Level 2 in the hierarchy.

Each of the Money Market Funds uses the amortized cost method to determine the value of its portfolio securities pursuant to Rule 2a-7. The amortized cost method involves valuing a security at its cost and amortizing any discount or premium over the period until maturity, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which the value, as determined by amortized cost, is higher or lower than the price that a Fund would receive if the security were sold. During these periods the yield to a shareholder may differ somewhat from that which could be obtained from a similar fund that uses a method of valuation based upon market prices. Thus, during periods of declining interest rates, if the use of the amortized cost method resulted in a lower value of a Fund’s portfolio on a particular day, a prospective investor in that Fund would be able to obtain a somewhat higher yield than would result from investments in a fund using solely market values, and existing Fund shareholders would receive correspondingly less income. The converse would apply during periods of rising interest rates.

Rule 2a-7 provides that in order to value its portfolio using the amortized cost method, each of the Money Market Funds must maintain a dollar-weighted average portfolio maturity of 90 days or less, purchase securities having remaining maturities (as defined in Rule 2a-7) of 397 days or less and invest only in securities determined by the Trust’s Board of Trustees to meet the quality and minimal credit risk requirements of Rule 2a-7. The maturity of an instrument is generally deemed to be the period remaining until the date when the principal amount thereof is due or the date on which the instrument is to be redeemed. Rule 2a-7 provides, however, that the maturity of an

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instrument may be deemed shorter in the case of certain instruments, including certain variable and floating rate instruments subject to demand features. Pursuant to Rule 2a-7, the Board is required to establish procedures designed to stabilize at $1.00, to the extent reasonably possible, the price per share of each of the Money Market Funds as computed for the purpose of sales and redemptions. Such procedures include review of the portfolio holdings of each of the Money Market Funds by the Board of Trustees, at such intervals as it may deem appropriate, to determine whether a Fund’s NAV calculated by using available market quotations deviates from $1.00 per share based on amortized cost. The extent of any deviation will be examined by the Board of Trustees. If such deviation exceeds 1/2 of 1%, the Board will promptly consider what action, if any, will be initiated. In the event the Board determines that a deviation exists that may result in material dilution or other unfair results to investors or existing shareholders, the Board will take such corrective action as it regards as necessary and appropriate, including the sale of portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity, withholding dividends or establishing a NAV per share by using available market quotations.

INVESTOR ACCOUNT SERVICES AND POLICIES

The Funds offer accumulation plans, withdrawal plans and reinvestment and exchange privileges. Certain privileges may not be available in connection with all classes. In most cases, changes to account services may be accomplished over the phone. Inquiries regarding policies and procedures relating to shareholder account services should be directed to the Transfer Agent at 800.243.1574. Broker-dealers may impose their own restrictions and limits on accounts held through the broker-dealer. Please consult with your broker-dealer for account restrictions and limit information. The Funds and their agents reserve the right to modify or terminate these services upon reasonable notice.

Exchanges

Under certain circumstances, shares of any Virtus Mutual Fund (except any of the Money Market Funds) may be exchanged for shares of the same class of another Virtus Mutual Fund on the basis of the relative NAVs per share at the time of the exchange. Class C Shares are also exchangeable for Class T Shares of those Virtus Mutual Funds offering them. Exchanges are subject to the minimum initial investment requirement of the designated Fund, except if made in connection with the Systematic Exchange privilege described below. Shareholders may exchange shares held in book-entry form for an equivalent number (value) of the same class of shares of any other Virtus Mutual Fund, if currently offered. Exchanges will be based upon each Fund’s NAV per share next computed following receipt of a properly executed exchange request without sales charge. On exchanges into Class A Shares of a Money Market Fund from Class A Shares of a Non-Money Market Fund made within 18 months of a finder’s fee being paid on such Non-Money Market Fund shares, a CDSC may be assessed on exchange proceeds. For all fixed income Virtus Mutual Funds, Virtus AlphaSector Rotation Fund and Virtus Disciplined Bond Fund, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. The CDSC may be waived upon return of the finder’s fee by the dealer. On exchanges with share classes that carry a CDSC, the CDSC schedule of the original shares purchased continues to apply. The exchange of shares is treated as a sale and purchase for federal income tax purposes. (See also “Dividends, Distributions and Taxes” in this SAI.) Exchange privileges may not be available for all Virtus Mutual Funds, and may be rejected or suspended.

In certain circumstances, a Fund, the Distributor or the Transfer Agent may enter into an agreement with a financial intermediary to permit exchanges from one class of a Fund into another class of the same Fund, subject to certain conditions. Such exchanges will only be permitted 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 the exchanges be carried out (i) within accounts maintained and controlled by the intermediary, (ii) on behalf of all or a particular segment of beneficial owners holding shares of the affected Fund within those accounts, and (iii) all at once or within a given time period, or as agreed upon in writing by the Fund, the Distributor or the Transfer Agent, and the financial intermediary. 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.

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Systematic Exchanges

If the conditions above have been met, you or your broker may, by telephone or written notice, elect to have shares exchanged for the same class of shares of another Virtus Mutual Fund automatically on a monthly, quarterly, semiannual or annual basis or may cancel this privilege at any time. If you maintain an account balance of at least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated on the basis of the NAV of the shares held in a single account), you may direct that shares be automatically exchanged at predetermined intervals for shares of the same class of another Virtus Mutual Fund. Systematic exchanges will be executed upon the close of business on the 10th day of each month or the next succeeding business day. Exchanges will be based upon each Fund’s NAV per share next computed after the close of business on the 10th day of each month (or next succeeding business day), without sales charge. Systematic exchange forms are available from the Transfer Agent.

Dividend Reinvestment Across Accounts

If you maintain an account balance of at least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated on the basis of the NAV of the shares held in a single account), you may direct that any dividends and distributions paid with respect to shares in that account be automatically reinvested in a single account of one of the other Virtus Mutual Funds at NAV. You should obtain a current prospectus and consider the objectives and policies of each Virtus Mutual Fund carefully before directing dividends and distributions to another Virtus Mutual Fund. Reinvestment election forms and prospectuses are available from the Transfer Agent. Distributions may also be mailed to a second payee and/or address. Requests for directing distributions to an alternate payee must be made in writing with a signature guarantee of the registered owner(s). To be effective with respect to a particular dividend or distribution, notification of the new distribution option must be received by the Transfer Agent at least three days prior to the record date of such dividend or distribution. If all shares in your account are repurchased or redeemed or transferred between the record date and the payment date of a dividend or distribution, you will receive cash for the dividend or distribution regardless of the distribution option selected.

Invest-by-Phone

This expedited investment service allows a shareholder to make an investment in an account by requesting a transfer of funds from the balance of the shareholder’s bank account. Once a request is phoned in, the Transfer Agent or its subagent will initiate the transaction by wiring a request for monies to the shareholder’s commercial bank, savings bank or credit union via ACH. The shareholder’s bank, which must be an ACH member, will in turn forward the monies to the Transfer Agent or its subagent for credit to the shareholder’s account. ACH is a computer based clearing and settlement operation established for the exchange of electronic transactions among participating depository institutions.

To establish this service, please complete an Invest-by-Phone Application and attach a voided check if applicable. Upon acceptance of the authorization form (usually within two weeks) shareholders may call toll free 800.367.5877 prior to 3:00 p.m. (Eastern Time) to place their purchase request. Instructions as to the account number and amount to be invested must be communicated to the Transfer Agent. The Transfer Agent or its subagent will then contact the shareholder’s bank via ACH with appropriate instructions. The purchase is normally credited to the shareholder’s account the day following receipt of the verbal instructions. The Fund may delay the mailing of a check for redemption proceeds of Fund shares purchased with a check or via Invest-by-Phone service until the Fund has assured itself that good payment has been collected for the purchase of the shares, which may take up to 15 days. The Trust and the Transfer Agent reserve the right to modify or terminate the Invest-by-Phone service for any reason or to institute charges for maintaining an Invest-by-Phone account.

Systematic Withdrawal Program

The Systematic Withdrawal Program allows you to periodically redeem a portion of your account on a predetermined monthly, quarterly, semiannual or annual basis. A sufficient number of full and fractional shares will be redeemed so that the designated payment is made on or about the 20th day of the month. Shares are tendered for redemption by the Transfer Agent, as agent for the shareowner, on or about the 15th of the month at the closing NAV on the date of redemption. The Systematic Withdrawal Program also provides for redemptions with proceeds to be directed through ACH to your bank account. 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 15th of the month. In addition to the limitations stated below, withdrawals may not be less than $25 and minimum account balance requirements shall continue to apply.

Shareholders participating in the Systematic Withdrawal Program must own shares of a Fund worth $5,000 or more, as determined by the then current NAV per share, and elect to have all dividends reinvested. The purchase

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of shares while participating in the Systematic Withdrawal Program will ordinarily be disadvantageous to the Class A Shares investor since a sales charge will be paid by the investor on the purchase of Class A Shares at the same time as other shares are being redeemed. For this reason, investors in Class A Shares may not participate in an automatic investment program while participating in the Systematic Withdrawal Program.

Through the Systematic Withdrawal Program, Class C shareholders may withdraw up to 1% of their aggregate net investments (purchases, at initial value, to date net of non-Program redemptions) each month or up to 3% of their aggregate net investments each quarter without incurring otherwise applicable CDSCs. Class C shareholders redeeming more shares than the percentage permitted by the Systematic Withdrawal Program will be subject to any applicable CDSC on all shares redeemed. Accordingly, the purchase of Class C Shares will generally not be suitable for an investor who anticipates withdrawing sums in excess of the above limits shortly after purchase.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Qualification as a Regulated Investment Company

Each Fund within the Trust is separate for investment and accounting purposes and is treated as a separate corporation for United States federal income tax purposes. Each Fund has elected to qualify and intends to qualify as a RIC under Subchapter M of the Code. In each taxable year that a Fund qualifies as a RIC and distributes to its shareholders as dividends (not including “capital gains dividends,” discussed below) at least 90% of its ordinary investment income and short-term capital gains, with certain modifications, it (but not its shareholders) will be relieved of United States federal income tax on that portion of its net investment income and net capital gains that are currently distributed (or deemed distributed) to its shareholders. To the extent that a Fund fails to distribute all of its taxable income, it will be subject to corporate income tax (currently at a maximum rate of 35%) on any retained ordinary investment income or short-term capital gains and undistributed long-term capital gains.

Each Fund intends to make timely distributions, if necessary, sufficient in amount to avoid the non-deductible 4% excise tax that is imposed on a RIC to the extent that it fails to distribute, with respect to each calendar year, at least 98% of its ordinary income (not including tax-exempt interest) for such calendar year and 98.2% of its capital gain net income as determined for a one-year period ending on October 31 of such calendar year (or as determined on a fiscal year basis if the Fund’s fiscal year ends on November 30 or December 31, if the Fund so elects). In addition, an amount equal to any undistributed investment company taxable income or capital gain net income from the previous calendar year must also be distributed to avoid the excise tax. The excise tax is imposed on the amount by which the RIC does not meet the foregoing distribution requirements. If a Fund has taxable income that would be subject to the excise tax, the Fund intends to distribute such income so as to avoid payment of the excise tax. Notwithstanding the foregoing, there may be certain circumstances under which it would be appropriate for a Fund to pay the excise tax.

Each Fund must satisfy the following tests each year in order to qualify as a RIC: (a) derive in each taxable year at least 90% of its gross income from dividends, interest and gains from the sale or other disposition of securities and certain other investment income; and (b) meet specified diversification requirements at the end of each quarter of each taxable year. Each Fund intends to satisfy these requirements. With respect to the diversification requirement, each Fund must also diversify its holdings so that, at the close of each quarter of its taxable year, (i) at least 50% of the value of its total assets consists of cash, cash items, United States government securities and securities of other RICs, and other securities limited generally with respect to any one issuer to not more than 5% of the total assets of that Fund and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any issuer (other than United States government securities or the securities of other RICs). Each Fund intends to comply with all of the foregoing criteria for qualification as a RIC; however, there can be no assurance that each Fund will so qualify and continue to maintain its status as a RIC. If in any taxable year a Fund does not qualify as a RIC or fails to distribute at least 90% of the Fund’s investment company taxable income, all of its taxable income will be taxed at corporate rates, the Fund would not be entitled to deduct distributions to shareholders, and any capital gain dividend would not retain its character in the hands of the shareholder for tax purposes. The Code provides relief for certain de minimis failures to meet the asset or income tests or for certain failures due to reasonable cause. These relief provisions may prevent a Fund from being disqualified as a RIC and/or reduce the amount of tax on the Fund’s income as a result of the failure to meet certain tests.

Taxation of Debt Securities

Certain debt securities can be originally issued or acquired at a discount. Special rules apply under the Code to the recognition of income with respect to such debt securities. Under the special rules, a Fund may recognize

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income for tax purposes without a corresponding current receipt of cash. In addition, gain on a disposition of a debt security subject to the special rules may be treated wholly or partially as ordinary income, not capital gain.

A Fund may invest in certain investments that may cause it to realize income prior to the receipt of cash distributions, including securities bearing original issue discount. The level of such investments is not expected to affect a Fund’s ability to distribute adequate income to qualify as RIC.

Taxation of Derivatives and Foreign Currency Transactions

Many futures contracts and foreign currency contracts entered into by a Fund and all listed non-equity options written or purchased by a Fund (including options on debt securities, options on futures contracts, options on securities indices and options on broad-based stock indices) are governed by Section 1256 of the Code. Absent a tax election to the contrary, gain or loss attributable to the lapse, exercise or closing out of any such position is treated as 60% long-term and 40% short-term capital gain or loss, and on the last trading day of a Fund’s taxable year (and, generally on October 31 for purposes of the 4% excise tax), all outstanding Section 1256 positions are marked-to-market (i.e., treated as if such positions were closed out at their closing price on such day), and any resulting gain or loss is treated as 60% long-term and 40% short-term capital gain or loss. Under certain circumstances, entry into a futures contract to sell a security may constitute a short sale for United States federal income tax purposes, causing an adjustment in the holding period of the underlying security or a substantially identical security in a Fund’s portfolio.

Equity options written by a Fund (covered call options on portfolio stock) will be subject to the provisions under Section 1234 of the Code. If a Fund writes a call option, no gain is recognized upon its receipt of a premium. If such an option lapses or is closed out, any gain or loss is treated as a short-term capital gain or loss. If such an option is exercised, any resulting gain or loss is a short-term or long-term capital gain or loss depending on the holding period of the underlying stock.

Positions of a Fund which consist of at least one stock and at least one stock option or other position with respect to a related security which substantially diminishes the Fund’s risk of loss with respect to such stock could be treated as a “straddle” that is governed by Section 1092 of the Code, the operation of which may cause deferral of losses, adjustments in the holding periods of stock or securities and conversion of short-term capital losses into long-term capital losses. An exception to these straddle rules exists for any “qualified covered call options” on stock options written by a Fund.

Positions of a Fund which consist of at least one debt security not governed by Section 1256 of the Code and at least one futures or currency contract or listed non-equity option governed by Section 1256 of the Code which substantially diminishes the Fund’s risk of loss with respect to such debt security are treated as a “mixed straddle.” Although mixed straddles are subject to the straddle rules of Section 1092 of the Code, certain tax elections exist for them that reduce or eliminate the operation of these rules. Each Fund will monitor these transactions and may make certain tax elections in order to mitigate the operation of these rules and prevent disqualification of the Fund as a RIC for United States federal income tax purposes.

Under the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues interest or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time it actually collects such receivables or pays such liabilities generally are treated as ordinary income or loss. Similarly, on disposition of debt securities denominated in a foreign currency and on disposition of certain futures contracts, forward contracts and options, gains or losses attributable to fluctuations in the value of the foreign currency between the date of acquisition of the security or contract and the date of disposition also are treated as ordinary income or loss. Generally, these gains and losses, referred to under the Code as Section 988 gains or losses, may increase or decrease the amount of each Fund’s investment company taxable income to be distributed to its shareholders as ordinary income.

These special tax rules applicable to options, futures and currency transactions 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.

The IRS has not provided guidance on the tax consequences of certain investments and other activities that the Funds may make or undertake. While the Funds will endeavor to treat the tax items arising from these transactions in a manner believed to be appropriate, guarantees cannot be given that the IRS or a court will concur with the Funds’ treatment and that adverse tax consequences will not ensue.

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Taxation of Foreign Investments

If a Fund invests in stock of certain passive foreign investment companies, the Fund may be subject to special United States federal income taxation rules applicable to any “excess distribution” with respect to such stock or gain from the disposition of such stock treated as an “excess distribution.” The tax would be determined by allocating such distribution or gain ratably to each day of the Fund’s holding period for the stock. The distributions or gain so allocated to any taxable year of the Fund, other than the taxable year of the excess distribution or disposition, would be taxed to the Fund at the highest ordinary income rate in effect for such year, and the tax would be further increased by an interest charge to reflect the value of the tax deferral deemed to have resulted from the ownership of the foreign company’s stock. Any amount of distribution or gain allocated to the taxable year of the distribution or disposition would be included in the Fund’s investment company taxable income and, accordingly, would not be taxable to the Fund to the extent distributed by the Fund as a dividend to its shareholders. The Fund may elect to mark-to-market (i.e., treat as if sold at their closing market price on the same day) its investments in certain passive foreign investment companies and avoid any tax and/or interest charge on excess distributions.

The Funds may be subject to tax on dividend or interest income received from securities of non-United States issuers withheld by a foreign country at the source. The United States has entered into tax treaties with many foreign countries that entitle a Fund to a reduced rate of tax or exemption from tax on income. It is impossible to determine the effective rate of foreign tax in advance since the amount of a Fund’s assets to be invested within various countries is not known. Each Fund intends to operate so as to qualify for tax treaty benefits where applicable. If more than 50% of the value of a Fund’s total assets at the close of its taxable year is comprised of stock or securities issued by foreign corporations, the Fund may elect to “pass through” to the Fund’s shareholders the amount of foreign income taxes paid by the Fund. If a Fund does elect to “pass through,” each shareholder will receive a written statement from the Fund identifying the amount of such shareholder’s pro rata share of (i) the foreign taxes paid and (ii) the Fund’s gross income from foreign sources. In addition, if at least 50% of the value of a Fund’s assets at the close of each quarter of the tax year is represented by interests in other RICs, then such Fund may “pass through” foreign income taxes paid without regard to whether more than 50% of the Fund’s total assets at the close of the tax year consisted of stock and securities issued by foreign corporations. If a Fund passes through foreign taxes, each shareholder will be required to include the amount of such shareholder’s pro rata share of such taxes in gross income (in addition to dividends actually received), and the shareholder will be entitled to deduct such foreign taxes (if the shareholder itemizes deductions) in computing taxable income or claim a credit against U.S. federal income tax liability, subject to limitations.

Taxation of Distributions to Shareholders

Certain qualified dividend income and long-term capital gains are taxed at a lower federal income tax rate (maximum 20%) for individual shareholders. The reduced rate for qualified dividend income applies to dividends from domestic corporations and certain qualified foreign corporations subject to various requirements and a minimum holding period applicable to both a Fund and its shareholders. Ordinary distributions made by a Fund to its shareholders are eligible for the reduced rate to the extent the underlying income in the Fund is qualified dividend income. An additional 3.8% tax will apply to the lesser of (i) an individual’s net investment income or (ii) the excess of modified adjusted gross income over $200,000 (in the case of single filers) or $250,000 (in the case of a joint return).

Distributions made by a Fund from ordinary investment income and net short-term capital gains will be taxed to such Fund’s shareholders as ordinary dividend income to the extent of the earnings and profits of the Fund. Ordinary income dividends received by corporate shareholders of a Fund will qualify for the 70% dividends-received deduction to the extent the Fund designates such amounts as qualifying dividend distributions; however, the portion that may be so designated is subject to certain limitations. Distributions by a Fund that are reported by the Fund as capital gain dividends in written statements furnished to its shareholders (e.g., Form 1099) will be taxed to the shareholders as long-term capital gain, and will not be eligible for the corporate dividends-received deduction.

Dividends declared by a Fund to shareholders of record in October, November or December will be taxable to such shareholders in the year that the dividend is declared, even if it is not paid until the following year (so long as it is actually paid by the Fund in January of such following year). Also, shareholders will be taxable on amounts reported by a Fund in written statements to shareholders as capital gain dividends, even if such amounts are not actually distributed to them. Shareholders will be entitled to claim a credit against their own United States federal income tax liability for taxes paid by each Fund on such undistributed capital gains, if any.

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Dividends and capital gain distributions will be taxable to shareholders as described above whether received in cash or in shares under a Fund’s distribution reinvestment plan. With respect to distributions received in cash or reinvested in shares purchased on the open market, the amount of the distribution for tax purposes will be the amount of cash distributed or allocated to the shareholder.

Shareholders should be aware that the price of shares of a Fund that are purchased prior to a dividend or distribution by the Fund may reflect the amount of the forthcoming dividend or distribution. Such dividend or distribution, when made, would be taxable to shareholders under the principles discussed above even though the dividend or distribution may reduce the NAV of shares below a shareholder’s cost and thus represent a return of a shareholder’s investment in an economic sense.

A high portfolio turnover rate may result in the realization of larger amounts of short-term gains, which are taxable to shareholders as ordinary income.

Each Fund intends to accrue dividend income for United States federal income tax purposes in accordance with the rules applicable to RICs. In some cases, these rules may have the effect of accelerating (in comparison to other recipients of the dividend) the time at which the dividend is taken into account by the Fund as taxable income.

Shareholders should consult their own tax advisor about their tax situation.

Income and capital gain distributions are determined in accordance with rules set forth in the Code and the Regulations that may differ from United States Generally Accepted Accounting Principles.

Taxation of Distributions to Shareholders—Virtus Insight Tax-Exempt Money Market Fund, and Virtus Tax-Exempt Bond Fund only

If at least 50% of the value of a Fund’s assets at the close of each quarter of the tax year is comprised of tax-exempt state and local bonds, then such Fund is qualified to pay exempt-interest dividends for United States federal income tax purposes to the Fund’s shareholders. Virtus Insight Tax-Exempt Money Market Fund and Virtus Tax-Exempt Bond Fund intend to comply with this standard, and each such Fund will provide shareholders with a written statement identifying each shareholder’s amount of exempt-interest dividends. Exempt-interest dividends received by a shareholder are treated as items of tax-exempt interest to the shareholder.

Sale or Exchange of Fund Shares

Gain or loss will be recognized by a shareholder upon the sale of his or her shares in a Fund or upon an exchange of his or her shares in a Fund for shares in another Fund. Provided that the shareholder is not a dealer in such shares, such gain or loss will generally be treated as capital gain or loss, measured by the difference between the adjusted basis of the shares and the amount realized from the sale. Under current law, capital gains (whether long-term or short-term) of individuals and corporations are fully includable in taxable income. Capital losses (whether long-term or short-term) may offset capital gains plus (for non-corporate taxpayers only) up to $3,000 per year of ordinary income.

Redemptions, including exchanges, of shares may give rise to recognized gains or losses. All or a portion of a loss realized upon the redemption, including exchanges, of shares may be disallowed under “wash sale” rules to the extent shares are purchased (including shares acquired by means of reinvested dividends) within a 61-day period beginning 30 days before and ending 30 days after such redemption. Any loss realized upon a shareholder’s sale, redemption or other disposition of shares with a tax holding period of six months or less will be treated as a long-term capital loss to the extent of any capital gain dividend distributed with respect to such shares. The “wash sale” restrictions also apply to an investor who holds a security both within a tax-deferred account and in a taxable account; sales and repurchases between two accounts will be considered as wash sales.

Under certain circumstances, the sales charge incurred in acquiring shares of a Fund may not be taken into account in determining the gain or loss on the disposition of those shares. This rule applies where shares of a Fund are disposed of within 90 days after the date on which they were acquired and new shares of a RIC are acquired without a sales charge or at a reduced sales charge. In that case, the gain or loss realized on the disposition will be determined by excluding from the tax basis of the shares disposed of all or a portion of the sales charge incurred in acquiring those shares. This exclusion applies to the extent that the otherwise applicable sales charge with respect to the newly acquired shares is reduced as a result of the shareholder having incurred a sales charge initially. The portion of the sales charge affected by this rule will be treated as a sales charge paid for the new shares.

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For shares of a Fund acquired on or after January 1, 2012, each shareholder’s Form 1099 will report the cost basis of any such shares that were redeemed, sold, or exchanged during the year, and the form will report whether the gain or loss is treated as short-term or long-term. This information will be reported to the IRS. Each shareholder should inform the Fund of such shareholder’s cost selection for tax reporting purposes at the time of the sale or exchange of Fund shares or provide in advance a standing cost basis method for the shareholder’s account. If a shareholder does not provide cost basis instructions, the Fund’s default method will be used.

Tax Information Notices

Written notices will be sent by United States mail to shareholders regarding the tax status of all distributions made (or deemed to have been made) during each taxable year, including the amount of qualified dividend income for individuals, the amount qualifying for the corporate dividends-received deduction (if applicable) and the amount of capital gain dividends, undistributed capital gains (if any), tax credits (if applicable), and cumulative return of capital (if any).

Important Notice Regarding Taxpayer IRS Certification and Backup Withholding

Pursuant to the Regulations, the Funds may be required to withhold a percentage of all reportable payments, including any taxable dividends, capital gains distributions or share redemption proceeds, at the specified rate in effect when such payments are made, for an account which does not have a taxpayer identification number and certain required certifications. The Funds reserve the right to refuse to open an account for any person failing to provide a taxpayer identification number along with the required certifications. The Funds will furnish shareholders, within 31 days after the end of the calendar year, with the information that is required by the IRS for preparing income tax returns. The Fund will also provide this same information to the IRS in the manner required by the IRS. Depending on your state of residence, the information may also be filed with your state taxing authority.

Some shareholders may be subject to withholding of United States federal income tax on dividends and redemption payments from the Funds (“backup withholding”) at the specified rate in effect when such payments are made. Corporate shareholders and certain other shareholders specified in the Code generally are exempt from such backup withholding. Generally, shareholders subject to backup withholding will be (i) those for whom a certified taxpayer identification number is not on file with the Fund, (ii) those about whom notification has been received (either by the shareholder or the Fund) from the IRS that they are subject to backup withholding or (iii) those who, to the Fund’s knowledge, have furnished an incorrect taxpayer identification number. Generally, to avoid backup withholding, a shareholder must, at the time an account is opened, certify under penalties of perjury that the social security number or taxpayer identification number furnished is correct and that he or she is not subject to backup withholding. From time to time, the shareholder may also be requested to provide certification of the validity of their taxpayer identification number.

Foreign Shareholders

Dividends paid by any of the Funds from net investment income and net realized short-term capital gains to a shareholder who is a nonresident alien individual, a foreign trust or estate, a foreign corporation or a foreign partnership (a “foreign shareholder”) will be subject to United States withholding tax at a rate of 30% unless a reduced rate of withholding or a withholding exemption is provided under an applicable tax treaty. Foreign shareholders are urged to consult their own tax advisors concerning the applicability of the United States withholding tax and any foreign taxes.

Other Tax Consequences

In addition to the United States federal income tax consequences described above, there may be other foreign, United States federal, state or local tax considerations and estate tax considerations applicable to the circumstances of a particular investor. The foregoing discussion is based upon the Code, judicial decisions and administrative regulations, rulings and practices in effect as of January 2013, all of which are subject to change and which, if changed, may be applied retroactively to a Fund, its shareholders and/or its assets. No rulings have been sought from the IRS or any other tax authority with respect to any of the tax matters discussed above.

From time to time, proposals are introduced before the United States Congress that if enacted would affect the foregoing discussion with respect to taxes and could also affect the availability of certain investments to a Fund.

The information included in the Prospectus with respect to taxes, including this section entitled Dividends, Distributions and Taxes, is a general and abbreviated summary of applicable provisions of the Code and Regulations as interpreted by the courts and the IRS as of January 2013 and is not intended as tax advice to any person. The Code and Regulations, as well as the current interpretations thereof, may be changed at any time by

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legislative, judicial, or administrative action. Accordingly, prospective purchasers are urged to consult their own tax advisors with specific reference to their own tax situation, including the potential application of United States federal, state, local and foreign tax laws.

Except as expressly set forth above, the foregoing discussion of United States federal income tax law relates solely to the application of that law to United States persons, i.e., United States citizens and residents and United States corporations, partnerships, trusts and estates. Each shareholder who is not a United States person should consider the United States and foreign tax consequences of ownership of shares of a Fund, including the possibility that such a shareholder may be subject to a United States withholding tax at a rate of 30% (or at a lower rate under an applicable tax treaty) on amounts constituting ordinary income received by him or her, where such amounts are treated as income from United States sources under the Code. The foregoing discussion does not address the special tax rules applicable to certain classes of investors, such as dealers in securities or currencies, traders in securities, banks, tax-exempt entities, life insurance companies, persons holding an interest in a Fund as a hedge or as part of a straddle or conversion transaction, or holders whose functional currency is not the United States dollar.

Tax Sheltered Retirement Plans

Shares of the Funds are offered in connection with the following retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k), Profit-Sharing, Money Purchase Pension Plans and certain 403(b) Retirement Plans. Write or call the Distributor at 800.243.4361 for further information about the plans.

Merrill Lynch Daily K Plan

Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan (the “Plan”) participants at NAV without an initial sales charge if:

(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more in assets invested in broker-dealer funds not advised or managed by Merrill Lynch Asset Management L.P. (“MLAM”) that are made available pursuant to a Service Agreement between Merrill Lynch and the fund’s principal underwriter or distributor and in funds advised or managed by MLAM (collectively, the “Applicable Investments”);

(ii) the Plan is recordkept on a daily valuation basis by an independent recordkeeper whose services are provided through a contract or alliance arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more in assets, excluding money market funds, invested in Applicable Investments; or

(iii) the Plan has 500 or more eligible employees, as determined by a Merrill Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service Agreement.

Plans recordkept on a daily basis by Merrill Lynch or an independent recordkeeper under a contract with Merrill Lynch that are currently investing in Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5 million invested in Applicable Investments, or after the normal holding period of seven years from the initial date of purchase.

PERFORMANCE INFORMATION

Performance information for the Funds (and any class of the Funds) may be included in advertisements, sales literature or reports to shareholders or prospective investors. Performance information in advertisements and sales literature may be expressed as a yield of a class of shares and as a total return of a class of shares.

The Funds may from time to time include in advertisements containing total return the ranking of those performance figures relative to such figures for groups of mutual funds having similar investment objectives as categorized by ranking services such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc. Additionally, each Fund may compare its performance results to other investment or savings vehicles (such as certificates of deposit) and may refer to results published in various publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business Week and Investor’s Business Daily, Stanger’s Mutual Fund Monitor, The Stanger Register, Stanger’s Investment Adviser, The Wall Street Journal, The New York Times, Consumer Reports, Registered Representative, Financial Planning, Financial Services Weekly, Financial World, U.S. News and World Report, Standard & Poor’s The Outlook and Personal Investor. The Funds may from time to time illustrate the benefits of tax deferral by comparing taxable investments to investments made through tax-deferred retirement plans. The total return may

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also be used to compare the performance of each Fund against certain widely acknowledged outside standards or indices for stock and bond market performance, such as the Barclays Capital Intermediate Government/Credit Bond Index, Barclays Capital U.S. Aggregate Bond Index, Barclays Capital U.S. High-Yield 2% Capped Bond Index, Barclays Capital Municipal Bond Index, Barclays Capital 3-15 Year Blend (2-17) Municipal Bond Index, MSCI Emerging Markets Free Index (net), Russell 1000 ^® Index, Russell 1000 ^® Value Index, Russell 2000 ^® Index, and the ^® S&P 500 ^® Index.

Advertisements, sales literature and other communications may contain information about the Funds’ and their subadvisers’ current investment strategies and management style. Current strategies and style may change to allow the Funds to respond quickly to changing market and economic conditions. From time to time the Funds may include specific portfolio holdings or industries in such communications. To illustrate components of overall performance, each Fund may separate its cumulative and average annual returns into income and capital gains components.

Performance information reflects only the performance of a hypothetical investment in each class during the particular time period on which the calculations are based. Performance information should be considered in light of a Fund’s investment objectives and policies, characteristics and quality of the portfolio, and the market condition during the given time period, and should not be considered as a representation of what may be achieved in the future.

Total Return

Standardized quotations of average annual total return for each class of shares will be expressed in terms of the average annual compounded rate of return for a hypothetical investment in such class of shares over periods of 1, 5 and 10 years or up to the life of the class of shares, calculated for each class separately pursuant to the following formula: P((1+T)(n)) = ERV (where P = a hypothetical initial payment of $1,000, T = the average annual total return, n = the number of years, and ERV = the ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period). All total return figures reflect the deduction of a proportional share of each class’s expenses (on an annual basis), deduction of the maximum initial sales load in the case of Class A Shares and the maximum CDSC applicable to a complete redemption of the investment in the case of Class C Shares, and assume that all dividends and distributions on Class A Shares, Class C Shares and Class I Shares are reinvested when paid.

For average “after-tax” total return, the SEC rules mandate several assumptions, including that the calculations use the historical highest individual federal marginal income tax rates at the time of reinvestment, and that the calculations do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. These returns, for instance, assume that an investor has sufficient capital gains of the same character from other investments to offset any capital losses from the redemption. As a result, returns after taxes on distributions and sale of Fund shares may exceed returns after taxes on distributions (but before sale of Fund shares). These returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements.

The Funds may also compute cumulative total return for specified periods based on a hypothetical account with an assumed initial investment of $10,000. The cumulative total return is determined by dividing the NAV of this account at the end of the specified period by the value of the initial investment and is expressed as a percentage. Calculation of cumulative total return reflects payment of the Class A Shares’ maximum sales charge of 5.75% and assumes reinvestment of all income dividends and capital gain distributions during the period.

The Funds also may quote annual, average annual and annualized total return and cumulative total return performance data, for any class of shares of the Funds, both as a percentage and as a dollar amount based on a hypothetical $10,000 investment for various periods other than those noted above. Such data will be computed as described above, except that (1) the rates of return calculated will not be average annual rates, but rather, actual annual, annualized or cumulative rates of return and (2) the maximum applicable sales charge will not be included with respect to annual, annualized or cumulative rate of return calculations.

Yield

The Trust makes available various yield quotations with respect to each class of shares of the Money Market Funds. These amounts are calculated based on 7-day periods, by calculating the net change in value, exclusive of capital changes, of a hypothetical account having a balance of one share at the beginning of the period, dividing the net change in value by the value of the account at the beginning of the base period to obtain the base period return, and multiplying the base period return by 365/7, with the resulting yield figure carried to the nearest hundredth of one percent. The net change in value of an account consists of the value of additional shares

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purchased with dividends from the original share plus dividends declared on both the original share and any such additional shares (not including realized gains or losses and unrealized appreciation or depreciation) less applicable expenses. Effective yield quotations for Class I Shares of each of the Money Market Funds are also made available. These amounts are calculated in a similar fashion to yield, except that the base period return is compounded by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: Effective Yield = [(Base Period Return + 1) ^365/7 ] – 1. Current yield for all of the Money Market Funds will fluctuate from time to time, unlike bank deposits or other investments that pay a fixed yield for a stated period of time, and does not provide a basis for determining future yields.

From time to time each of the Money Market Funds may advertise its “30-day average yield” and its “monthly average yield.” Such yields refer to the average daily income generated by an investment in such Fund over a 30-day period, as appropriate (which period will be stated in the advertisement).

A standardized “tax-equivalent yield” may be quoted for the Tax-Exempt Bond Fund and the Insight Tax-Exempt Money Market Fund, which is computed by: (a) dividing the portion of the Fund’s yield (as calculated above) that is exempt from federal income tax by one minus a stated federal income rate; and (b) adding the figure resulting from (a) above to that portion, if any, of the yield that is not exempt from federal income tax.

The Trust makes available 30-day yield quotations with respect to Class A Shares and Class I Shares of the Non-Money Market Funds. As required by regulations of the SEC, the 30-day yield is computed by dividing a Fund’s net investment income per share earned during the period by the NAV on the last day of the period. The average daily number of shares outstanding during the period that are eligible to receive dividends is used in determining the net investment income per share. Income is computed by totaling the interest earned on all debt obligations during the period and subtracting from that amount the total of all recurring expenses incurred during the period. The 30-day yield is then annualized assuming semiannual reinvestment and compounding of net investment income.

FINANCIAL STATEMENTS

The fiscal year of the Trust ends on December 31. The Trust will send financial statements to its shareholders at least semiannually. An annual report containing financial statements audited by the Trust’s independent registered public accounting firm, PricewaterhouseCoopers LLP, will be sent to shareholders each year and is available without charge upon request.

The Funds’ financial statements for the Trust’s fiscal year ended December 31, 2012, appearing in the Funds’ 2012 Annual Report to Shareholders, are incorporated herein by reference.

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APPENDIX A — DESCRIPTION OF RATINGS

Moody’s Investors Service, Inc.

Aaa— Bonds that are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge.” Interest payments are protected by a large or exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.

Aa— Bonds that are rated Aa are judged to be of high quality by all standards. Together with the Aaa group the comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.

A— Bonds that are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.

Baa— Bonds that are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Moody’s also provides credit ratings for preferred stocks. Preferred stock occupies a junior position to bonds within a particular capital structure.

aaa— An issue that is rated “aaa” is considered to be a top-quality preferred stock. This rating indicates good asset protection and the least risk of dividend impairment within the universe of preferred stocks.

aa— An issue that is rated “aa” is considered a high-grade preferred stock. This rating indicates that there is a reasonable assurance that earnings and asset protection will remain relatively well maintained in the foreseeable future.

a— An issue that is rated “a” is considered to be an upper-medium grade preferred stock. While risks are judged to be somewhat greater than in the “aaa” and “aa” classifications, earnings and asset protections are, nevertheless, expected to be maintained at adequate levels.

baa— An issue that is rated “baa” is considered to be a medium grade preferred stock, neither highly protected nor poorly secured. Earnings and asset protection appear adequate at present but may be questionable over any great length of time.

Moody’s ratings for municipal notes and other short-term loans are designated Moody’s Investment Grade (MIG). This distinction is in recognition of the differences between short-term and long-term credit risk. Loans bearing the designation MIG 1 are of the best quality, enjoying strong protection by establishing cash flows of funds for their servicing or by established and broad-based access to the market for refinancing, or both. Loans bearing the designation MIG 2 are of high quality, with margins of protection ample although not so large as in the preceding group. A short term issue having a demand feature (i.e., payment relying on external liquidity and usually payable on demand rather than fixed maturity dates) is differentiated by Moody’s with the use of the Symbol VMIG, instead of MIG.

Standard & Poor’s Corporation

AAA— Bonds rated AAA have the higher rating assigned by Standard & Poor’s Corporation. Capacity to pay interest and repay principal is extremely strong.

AA— Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the higher rated issues only in small degree.

A— Bonds rated A have a very strong capacity to pay interest and repay principal, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories.

BBB— Bonds rated BBB are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.

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S&P’s top ratings for municipal notes issued after July 29, 1984 are SP-1 and SP-2. The designation SP-1 indicates a very strong capacity to pay principal and interest. A “+” is added for those issues determined to possess overwhelming safety characteristics. An “SP-2” designation indicates a satisfactory capacity to pay principal and interest.

Commercial paper rated A-2 or better by S&P is described as having a very strong degree of safety regarding timeliness and capacity to repay. Additionally, as a precondition for receiving an S&P commercial paper rating, a bank credit line and/or liquid assets must be present to cover the amount of commercial paper outstanding at all times.

The Moody’s Prime-2 rating and above indicates a strong capacity for repayment of short-term promissory obligations.

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APPENDIX B — PRINCIPAL SHAREHOLDERS

The following table sets forth information as of April 1, 2013 with respect to each person who owns of record or is known by the Trust to own of record or beneficially own 5% or more of any class of any Fund’s outstanding securities, as noted:


Name and Address	Name of Fund	Percentage of Class Outstanding (%)
AMERICAN ENTERPRISE INVESTMENT SVC ⁽¹⁾ 707 2 ^ND AVE S MINNEAPOLIS MN 55402-2405	Emerging Markets Opportunities Fund – Class A High Yield Income Fund – Class A High Yield Income Fund – Class C Low Duration Income Fund – Class A Low Duration Income Fund – Class C Tax-Exempt Bond Fund – Class A Tax-Exempt Bond Fund – Class C	6.47% 6.67% 5.51% 16.38% 5.77% 19.09% 5.79%

BMO HARRIS BANK FBO ATTN APPLICATION BALANCING 1200 E. WARRENVILLE ROAD NAPERVILLE IL 60563-3529	Insight Government Money Market Fund – Class A Insight Money Market Fund – Class A Insight Tax-Exempt Money Market Fund – Class A	35.59% 35.38% 73.19%

BMO HARRIS BANK FBO ATTN APPLICATION BALANCING II 1200 E. WARRENVILLE ROAD NAPERVILLE IL 60563-3529	Insight Government Money Market Fund – Class A Insight Money Market Fund – Class A Insight Tax-Exempt Money Market – Class A	11.03% 31.16% 8.56%

CHARLES SCHWAB & CO INC ⁽¹⁾ SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE BENEFIT OF CUSTOMERS 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151	Emerging Markets Opportunities Fund – Class I	10.88%

FIRST CLEARING, LLC ⁽¹⁾ 2801 MARKET STREET SAINT LOUIS MO 63103	Emerging Markets Opportunities Fund – Class C Emerging Markets Opportunities Fund – Class I High Yield Income Fund – Class A High Yield Income Fund – Class C Low Duration Income Fund – Class C Low Duration Income Fund – Class I Tax-Exempt Bond Fund – Class A Tax-Exempt Bond Fund – Class C Tax-Exempt Bond Fund – Class I	12.65% 16.17% 26.88% 8.85% 11.52% 19.90% 8.65% 11.66% 23.08%

ILLINOIS TOOL WORKS INC EMPLOYEES BENEFIT TRUST CUST FBO NORTHERN TRUST COMPANY TTEE S/D ATTN FELIX RODRIGUEZ GLENVIEW IL 60026-5811	Insight Tax-Exempt Money Market Fund – Class I	34.60%

SANDRA KINION TOD PHOENIX AZ 85086-5525	High Yield Income Fund – Class C	25.38%

LPL FINANCIAL ⁽¹⁾ 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1968	Low Duration Income Fund – Class I Tax-Exempt Bond Fund – Class I	10.33% 8.92%

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Name and Address	Name of Fund	Percentage of Class Outstanding (%)
MAC & CO ⁽¹⁾ MUTUAL FUND OPERATIONS PO BOX 3198 525 WILLIAM PENN PLACE PITTSBURGH PA 15230-3198	High Yield Income Fund – Class I High Yield Income Fund – Class I Insight Government Money Market Fund – Class I	39.96% 51.23% 11.18%

MARIL & CO A PARTNERSHIP ATTN ACM DEPARTMENT 11270 W PARK PLACE, STE 400 MILWAUKEE WI 53224-3638	Insight Money Market Fund – Class I Insight Tax-Exempt Money Market Fund – Class I	28.61% 6.07%

MLPF&S ⁽¹⁾ FOR THE SOLE BENEFIT OF ITS CUSTOMERS ATTN FUND ADMINISTRATION 4800 DEER LAKE DR E 3 ^rd FL JACKSONVILLE FL 32246-6484	Emerging Markets Opportunities Fund – Class C High Yield Income Fund – Class A High Yield Income Fund – Class C Low Duration Income Fund – Class C Low Duration Income Fund – Class I Tax-Exempt Bond Fund – Class C Tax-Exempt Bond Fund – Class I	12.02% 6.18% 17.02% 25.77% 14.61% 19.47% 14.40%

MORGAN STANLEY SMITH BARNEY ⁽¹⁾ HARBORSIDE FINANCIAL CTR PLZ 2 FL 3 JERSEY CITY NJ 07311	Insight Government Money Market – Class A Emerging Markets Opportunities Fund – Class A Emerging Markets Opportunities Fund – Class C Emerging Markets Opportunities Fund – Class I Low Duration Income Fund – Class A Low Duration Income Fund – Class C Low Duration Income Fund – Class I Tax-Exempt Bond Fund – Class A Tax-Exempt Bond Fund – Class C Tax-Exempt Bond Fund – Class I	5.57% 24.30% 35.34% 23.01% 9.46% 16.48% 19.10% 9.82% 15.71% 7.85%

NFS LLC FEBO THE NORTHERN TRUST COMPANY PO BOX 92956 CHICAGO IL 60675-0001	Low Duration Income Fund – Class I	6.83%

PERSHING LLC ⁽¹⁾ 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002	Emerging Markets Opportunities Fund – Class A Low Duration Income Fund – Class A Low Duration Income Fund – Class C Tax-Exempt Bond Fund – Class A Tax-Exempt Bond Fund – Class C Tax-Exempt Bond Fund – Class I	5.31% 10.86% 5.32% 6.84% 5.04% 8.57%

SEI PRIVATE TRUST COMPANY C/O BMO HARRIS BANK ATTN: MUTUAL FUND ADMINISTRATOR ONE FREEDOM VALLEY DRIVE OAKS, PA 19456	Insight Government Money Market Fund – Class A Insight Government Money Market Fund – Class I Insight Money Market Fund – Class A Insight Money Market Fund – Class I Insight Tax-Exempt Money Market Fund – Class A Insight Tax-Exempt Money Market Fund – Class I	32.33% 87.46% 8.26% 40.03% 16.86% 59.22%

STATE STREET BANK & TRUST CO CUST ⁽¹⁾ FBO ADP/ACCESS 1 LINCOLN ST BOSTON MA 02111-2900	Insight Government Money Market – Class A	5.57%

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Name and Address	Name of Fund	Percentage of Class Outstanding (%)

ST. OLAF COLLEGE ATTN MARK R GELLE, ASST. TREASURER 1520 SAINT OLAF AVE NORTHFIELD MN 55057-1574	Insight Money Market Fund – Class I	21.22%

UBS WM USA ⁽¹⁾ OMNI ACCOUNT M/F ATTN DEPARTMENT MANAGER 1000 HARBOR BLVD FL 5 WEEHAWKEN NJ 07086-6761	Emerging Markets Opportunities Fund – Class A Emerging Markets Opportunities Fund –Class C High Yield Income Fund – Class A High Yield Income Fund – Class C Low Duration Income Fund – Class A Low Duration Income Fund – Class C Tax-Exempt Bond Fund – Class A Tax-Exempt Bond Fund – Class C	28.09% 14.36% 9.95% 24.95% 27.43% 13.04% 17.56% 28.51%

(1)	These entities are omnibus accounts for many individual shareholder accounts. The Funds are not aware of the size or identity of the underlying individual accounts.

The shares described above as held by BMO Harris Bank and SEI Private Trust Company C/O BMO Harris Bank are being held on behalf of various accounts and not as beneficial owners. To the extent that any shareholder is the beneficial owner of more than 25% of the outstanding shares of any Fund, such shareholder may be deemed to be a “control person” of that Fund for purposes of the 1940 Act.

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VIRTUS INSIGHT TRUST

PART C — OTHER INFORMATION

Item 28. Exhibits

(a)	Amended Declaration of Trust

Declaration of Trust of the Registrant, dated December 6, 1995, filed via EDGAR with initial Registration Statement (File No. 033-64915) on December 12, 1995 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated November 4, 1996, filed via EDGAR with Post-Effective Amendment No. 3 (File No. 033-64915) on February 28, 1997 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated June 6, 1997, filed via EDGAR with Post-Effective Amendment No. 5 (File 033-64915) on June 13, 1997 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated November 2, 1998, filed via EDGAR with Post-Effective Amendment No. 9 (File No. 033-64915) on November 9, 1998 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated February 18, 1999, filed via EDGAR with Post-Effective Amendment No. 10 (File No. 033-64915) on March 2, 1999 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated May 1, 2000, filed via EDGAR with Post-Effective Amendment No. 14 (File 033-64915) on May 1, 2000 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated September 5, 2000, filed via EDGAR with Post-Effective Amendment No. 16 (File No. 033-64915) on September 5, 2000 and incorporated herein by reference.

Amendment to Declaration of Trust of the Registrant, dated May 18, 2006, filed via EDGAR with Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006 and incorporated herein by reference.

Amendment to the Declaration of Trust of the Registrant, dated November 16, 2006, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

10.

Amendment to the Declaration of Trust of the Registrant, dated October 20, 2008, filed via EDGAR with Post-Effective Amendment No. 48 (File No. 033-64915) on April 28, 2009 and incorporated herein by reference.

(b)

Bylaws

Amended and Restated Bylaws of the Registrant, dated August 23, 2006, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

Amendment No. 1 to the Amended and Restated Bylaws of the Registrant, dated November 17, 2011, filed via EDGAR with Post-Effective Amendment No. 54 (File No. 033-64915) on April 27, 2012 and incorporated herein by reference.

(c)	See Articles V, VI, VII and IX of Registrant’s Declaration of Trust and Articles II and VII of Registrant’s Bylaws, each as amended.

(d)	Investment Advisory Contracts

Investment Advisory Agreement between Registrant and Virtus Investment Advisers, Inc. (“VIA”), dated May 18, 2006, filed via EDGAR with Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006 and incorporated herein by reference.

First Amendment to Investment Advisory Agreement between Registrant and VIA, dated January 1, 2010, filed via EDGAR (as Exhibit d.6.) with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

Subadvisory Agreement between VIA and BMO Asset Management Corp. (formerly Harris Investment Management, Inc.) (“BMO”), dated May 18, 2006, filed via EDGAR (as Exhibit d.2.) with Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006 and incorporated herein by reference.

Subadvisory Agreement between VIA and Vontobel Asset Management, Inc. (“Vontobel”), dated May 18, 2006, filed via EDGAR (as Exhibit d.3.) with Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006 and incorporated herein by reference.

First Amendment to Subadvisory Agreement between VIA and Vontobel, dated January 1, 2010, filed via EDGAR (as Exhibit d.5.) with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

C-1

Subadvisory Agreement between VIA and Monegy, Inc. (formerly HIM Monegy, Inc.) (“Monegy) dated May 18, 2010, filed via EDGAR (as Exhibit d.4.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

6. ^*

Subadvisory Agreement between VIA and Newfleet Asset Management , LLC (“Newfleet”) on behalf of Low Duration Income Fund dated May 18, 2012, filed via EDGAR herewith.

7. ^*

First Amendment to Subadvisory Agreement between VIA and Newfleet on behalf of Tax-Exempt Bond Fund, dated June 15, 2012, filed via EDGAR herewith.

(e)	Distribution Agreement

Distribution Agreement between Registrant and VP Distributors, LLC (formerly, VP Distributors, Inc.) (“VP Distributors”), dated May 18, 2006, filed via EDGAR with Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006 and incorporated herein by reference.

2. ^*

Form of Sales Agreement between VP Distributors and dealers (December 18, 2012), filed via EDGAR herewith.

(f)

None.

(g)	Custodian Agreement

1. ^*

Master Global Custody Agreement between the Registrant and JPMorgan Chase Bank, N.A. dated March 1, 2013, filed via EDGAR herewith.

(h)	Other Material Contracts

Amended and Restated Transfer Agency and Service Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated January 1, 2010, filed via EDGAR (as Exhibit h.5.) with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

Amendment to Amended and Restated Transfer Agent and Service Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated April 14, 2010, filed via EDGAR (as Exhibit h.7.) with Post-Effective Amendment No. 51 (File No. 033-64915) on April 28, 2010 and incorporated herein by reference.

Second Amendment to Amended and Restated Transfer Agent and Service Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated March 15, 2011, filed via EDGAR (as Exhibit h.16.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

c) ^*

Third Amendment to Amended and Restated Transfer Agent and Service Agreement between the Registrant and Virtus Fund Services, LLC dated January 1, 2013, filed via EDGAR herewith.

Sub-Transfer Agency and Shareholder Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”), dated April 15, 2011, filed via EDGAR (as Exhibit h.6.) with Post-Effective Amendment No. 54 (File No. 033-64915) on April 27, 2012 and incorporated herein by reference.

Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated January 1, 2010, filed via EDGAR with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

First Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated April 14, 2010, filed via EDGAR (as Exhibit h.8.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Second Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated June 30, 2010 filed via EDGAR (as Exhibit h.9.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Third Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated September 14, 2010, filed via EDGAR (as Exhibit h.10.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Fourth Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated January 1, 2011, filed via EDGAR (as Exhibit h.11.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

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Fifth Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated March 15, 2011, filed via EDGAR (as Exhibit h.12.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

f) ^*

Sixth Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated August 28, 2012, filed via EDGAR herewith.

g) ^*

Seventh Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated December 18, 2012, filed via EDGAR herewith.

Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated January 1, 2010, filed via EDGAR with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

First Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated June 30, 2010 filed via EDGAR (as Exhibit h.13.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Second Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated September 14, 2010 filed via EDGAR (as Exhibit h.14.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Third Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated March 15, 2011 filed via EDGAR (as Exhibit h.15.) with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

d) ^*

Fourth Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated August 28, 2012, filed via EDGAR herewith.

e) ^*

Fifth Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated December 18, 2012, filed via EDGAR herewith.

Money Market Fund Services Amendment to Sub-Administration and Accounting Services Agreement among the Registrant and BNY Mellon and VP Distributors (since assigned to Virtus Fund Services, LLC) made as of September 28, 2011 and retroactive to December 1, 2010, filed via EDGAR (as Exhibit h.17.) with Post-Effective Amendment No. 54 (File No. 033-64915) on April 27, 2012 and incorporated herein by reference.

Second Amended and Restated Expense Limitation Agreement between Registrant and VIA dated August 23, 2007, filed via EDGAR (as Exhibit h.1.) with Post-Effective Amendment No. 47 (File No. 033-64915) on April 28, 2008 and incorporated herein by reference.

Fee Waiver Agreement (Class I Shares) between Registrant and VP Distributors dated May 1, 2007, filed via EDGAR (as Exhibit h.2.) with Post-Effective Amendment No. 47 (File No. 033-64915) on April 28, 2008 and incorporated herein by reference.

8. ^*

Form of Indemnification Agreement with each trustee of the Registrant, effective as of March 18, 2013, filed via EDGAR herewith.

(i)	Legal Opinion

Opinion and Consent of Counsel filed via EDGAR with Post-Effective Amendment No. 43 (File No. 033-19423) on May 17, 2006 and incorporated herein by reference.

(j)	Other Opinions

1. ^*

Consent of Independent Registered Public Accounting Firm, filed via EDGAR herewith.

(k)	Not applicable

(l)	Initial Capital Agreements

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Form of Purchase Agreement relating to Initial Capital filed via EDGAR with Post-Effective Amendment No. 3 (File No. 033-64915) on February 28, 1997 and incorporated herein by reference.

Subscription Agreement dated January 14, 1999 between Registrant and FDI Distribution Services, Inc. relating to Advisor Shares filed via EDGAR with Post-Effective Amendment No. 10 (File No. 033-64915) on March 2, 1999 and incorporated herein by reference.

Subscription Agreement dated December 6, 2000 between Registrant and Provident Distributors, Inc. relating to B Shares filed via EDGAR with Post-Effective Amendment No. 18 (File No. 033-64915) on December 28, 2000 and incorporated herein by reference.

(m)	Rule 12b-1 Plans

Class A Shares Amended and Restated Distribution Plan Pursuant to Rule 12b-1 under the Investment Company Act of 1940, dated March 1, 2007, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

Class C Shares Amended and Restated Distribution Plan Pursuant to Rule 12b-1 under the Investment Company Act of 1940, dated March 1, 2007, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

A Shares Amended and Restated Shareholder Services Plan Not Pursuant to Rule 12b-1 under the Investment Company Act of 1940, dated March 1, 2007, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

I Shares Amended and Restated Shareholder Services Plan Not Pursuant to Rule 12b-1 under the Investment Company Act of 1940, dated March 1, 2007, filed via EDGAR with Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007 and incorporated herein by reference.

(n)	Rule 18f-3 Plan

Amended and Restated Plan Pursuant to Rule 18f-3 under the Investment Company Act of 1940, adopted August 19, 2009, filed via EDGAR with Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010 and incorporated herein by reference.

First Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the Investment Company Act of 1940, adopted June 30, 2010, filed via EDGAR with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Second Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the Investment Company Act of 1940, adopted September 14, 2010, filed via EDGAR with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

Third Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the Investment Company Act of 1940, adopted March 15, 2011, filed via EDGAR with Post-Effective Amendment No. 52 (File No. 033-64915) on April 28, 2011 and incorporated herein by reference.

d) ^*

Fourth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of August 8, 2012, filed via EDGAR herewith.

e) ^*

Fifth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of August 28, 2012, filed via EDGAR herewith.

f) ^*

Sixth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of September 21, 2012, filed via EDGAR herewith.

g) ^*

Seventh Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of December 18, 2012, filed via EDGAR herewith.

(o)

Reserved.

(p)	Codes of Ethics

Amended and Restated Code of Ethics of the Registrant dated February 2012, filed via EDGAR with Post-Effective Amendment No. 54 (File No. 033-64915) on April 27, 2012 and incorporated herein by reference.

2. ^*

Amended and Restated Code of Ethics of the Adviser (VIA) and Newfleet dated October 1, 2012, filed via EDGAR herewith.

C-4

3. ^*

Standards of Business Conduct and Code of Ethics of Subadviser BMO and Monegy amended as of July 1, 2012, filed via EDGAR herewith.

4. ^*

Code of Ethics of Subadviser Vontobel dated February 2, 2012, filed via EDGAR herewith.

(q)	Power of Attorney for all Trustees, filed via EDGAR with Post-Effective Amendment No. 47 (File No. 033-64915) on February 28, 2008 and incorporated herein by reference.

*	Filed herewith.

Item 29.

Persons Controlled by or Under Common Control with the Fund

None.

Item 30.

Indemnification

The indemnification of Registrant’s principal underwriter against certain losses is provided for in Section 18 of the Underwriting Agreement incorporated herein by reference to Exhibit E.1 of the Registrant’s Registration Statement filed on June 2, 2006. Indemnification of Registrant’s Custodian is provided for in section 7 of the Master Global Custody Agreement incorporated herein by reference to Exhibit G of the Registrant’s Registration Statement filed herewith. The indemnification of Registrant’s Transfer Agent and Administrator is provided in Article 6 of the Amended and Restated Transfer Agency and Service Agreement incorporated herein by reference to Exhibit h.5 of the Registrant’s Registration Statement filed on February 25, 2010. The Trust has entered into Indemnification Agreements with each trustee dated March 18, 2013, the form of which is incorporated herein by reference to Exhibit H.8 of the Registrant’s Registration Statement filed herewith, whereby the Registrant shall indemnify the trustee for expenses incurred in any proceeding in connection with the trustee’s service to the Registrant.

In addition, Article IV of the Registrant’s Declaration of Trust incorporated herein by reference to Exhibit A.1 of the Registrant’s Registration Statement filed on December 12, 1995, provides in relevant part as follows:

“Section 4.1 No Shareholder shall be subject to any personal liability whatsoever to any Person in connection with Trust Property or the acts, obligations or affairs of the Trust. No Trustee, officer, employee or agent of the Trust shall be subject to any personal liability whatsoever to any Person, other than to the Trust or its Shareholders, in connection with Trust Property or the affairs of the Trust, save only that arising from bad faith, willful misfeasance, gross negligence or reckless disregard of his duties with respect to such Person; and all such Persons shall look solely to the Trust Property, or to the Property of one or more specific Series of the Trust if the claim arises from the conduct of such Trustee, officer, employee or agent with respect to only such Series, for satisfaction of claims of any nature arising in connection with the affairs of the Trust. If any Shareholder, Trustee, officer, employee or agent, as such, of the Trust, is made a party to any suit or proceeding to enforce any such liability of the Trust, he shall not, on account thereof, be held to any personal liability. The Trust shall indemnify and hold each Shareholder harmless from and against all claims and liabilities, to which such Shareholder may become subject by reason of his being or having been a Shareholder, and shall reimburse such Shareholder out of the Trust Property for all legal and other expenses reasonably incurred by him in connection with any such claim or liability. The indemnification and reimbursement required by the preceding sentence shall be made only out of the assets of the one or more Series whose Shares were held by said Shareholder at the time the act or event occurred which gave rise to the claim against or liability of said Shareholder. The rights accruing to a Shareholder under this Section 4.1 shall not impair any other right to which such Shareholder may be lawfully entitled, nor shall anything herein contained restrict the right of the Trust to indemnify or reimburse a Shareholder in any appropriate situation even though not specifically provided herein.

Section 4.3 (a) Subject to the exceptions and limitations contained in paragraph (b) below: (i) every person who is, or has been, a Trustee or officer of the Trust shall be indemnified by the Trust, or by one or more Series thereof if the claim arises from his or her conduct with respect to only such Series, to the fullest extent permitted by the law against all liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof; (ii) the words ‘claim’, ‘action’, ‘suit’, or ‘proceeding’ shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened; and the words ‘liability’ and ‘expenses’ shall include, without limitation, attorneys’ fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Trustee or officer: (i) against any liability to the Trust, a Series thereof or the Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office; (ii) with respect to any matter as to which he shall have been finally adjudicated not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust or a Series thereof; (iii) in the event of a settlement or other disposition not involving a final adjudication as provided in paragraph (b)(ii) resulting in a payment by a Trustee or officer, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office: (A) by the court or other body approving the settlement or other disposition; or (B) based upon a review of readily available facts (as opposed to a full trial-type inquiry) by (x) vote of a majority of the Non-interested Trustees acting on the matter (provided that a majority of the Non-interested Trustees then in office act on the matter) or (y) written opinion of independent legal counsel.”

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Article VI Section 2 of the Registrant’s Bylaws incorporated herein by reference to Exhibit B.1 of the Registrant’s Registration Statement filed on Form N-1A on April 24, 2007, provides in relevant part, subject to certain exceptions and limitations, “every agent shall be indemnified by the Trust to the fullest extent permitted by law against all liabilities and against all expenses reasonably incurred or paid by him or her in connection with any proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been an agent.” Such indemnification would not apply in the case of any liability to which the Registrant would otherwise be subject by reason of or for willful misfeasance, bad faith, gross negligence or reckless disregard of such person’s duties.

The Investment Advisory Agreement, Subadvisory Agreements, Master Global Custody Agreement, Sub-Administration Agreement and Sub-Transfer Agency and Service Agreement, each as amended, respectively provide that the Registrant will indemnify the other party (or parties, as the case may be) to the agreement for certain losses. Similar indemnities to those listed above may appear in other agreements to which the Registrant is a party.

The Registrant, in conjunction with VIA, the Registrant’s Trustees, and other registered investment management companies managed by VIA, maintains insurance on behalf of any person who is or was a Trustee, officer, employee, or agent of the Registrant, or who is or was serving at the request of the Registrant as a trustee, director, officer, employee or agent of another trust or corporation, against any liability asserted against such person and incurred by him or arising out of his position. However, in no event will Registrant maintain insurance to indemnify any such person for any act for which the Registrant itself is not permitted to indemnify him.

Insofar as indemnification for liability arising under the Securities Act of 1933, as amended (the “Act”), may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 31.

Business and Other Connections of the Investment Adviser and Subadvisers

See “Management of the Funds” in the Prospectus and “Investment Advisory and Other Services” and “Management of the Trust” in the Statement of Additional Information for information which is included in this Post-Effective Amendment regarding the business of the Adviser and Subadvisers. For information as to the business, profession, vocation or employment of a substantial nature of directors and officers of the Adviser and Subadvisers in the last two years, reference is made to the Adviser’s and Subadvisers’ current Form ADV filed under the Investment Advisers Act of 1940, incorporated herein by reference.


Adviser		SEC File No.:
VIA		801-5995
BMO		801-35533
Monegy		801-62435
Newfleet (f/k/a SCM Advisors)		801-51559
Vontobel		801-21953

Item 32.

Principal Underwriter

(a) VP Distributors, LLC also serves as the principal underwriter for the following registrants: Virtus Equity Trust, Virtus Opportunities Trust and Virtus Variable Insurance Trust.

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(b) Directors and executive officers of VP Distributors, 100 Pearl Street, Hartford, CT 06103 are as follows:


Name and Principal Business Address	Positions and Offices with Distributor	Positions and Offices with Registrant

George R. Aylward	Director and Executive Vice President	President and Trustee

Kevin J. Carr	Vice President, Counsel and Secretary	Vice President, Counsel, Chief Legal Officer and Secretary

Nancy J. Engberg	Vice President and Assistant Secretary	Vice President and Chief Compliance Officer

David Hanley	Vice President and Treasurer	None

David C. Martin	Vice President and Chief Compliance Officer	None

Jeff Cerutti	Director and President	None

Francis G. Waltman	Director	Senior Vice President

(c)

To the best of the Registrant’s knowledge, no commissions or other compensation was received by any principal underwriter who is not an affiliated person of the Registrant or an affiliated person of such affiliated person, directly or indirectly, from the Registrant during the Registrant’s last fiscal year.

Item 33.

Location of Accounts and Records

Persons maintaining physical possession of accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder include:


Secretary of the Trust:		Principal Underwriter:
Kevin J. Carr, Esq. 100 Pearl Street Hartford, CT 06103		VP Distributors, LLC 100 Pearl Street Hartford, CT 06103

Investment Adviser:		Custodian:
Virtus Investment Advisers, Inc. 100 Pearl Street Hartford, CT 06103		JPMorgan Chase Bank, National Association One Chase Manhattan Plaza, 19 ^th Floor New York, NY 10005

Fund Accountant, Sub-administrator, and Dividend Dispersing Agent:		Administrator and Transfer Agent:
BNY Mellon Investment Servicing (US) Inc. 301 Bellevue Parkway Wilmington, DE 19809		Virtus Fund Services, LLC 100 Pearl Street Hartford, CT 06103

Subadviser to Insight Government Money Market Fund, Insight Money Market Fund and Insight Tax-Exempt Money Market Fund:		Subadviser to Low Duration Income Fund and Tax-Exempt Bond Fund:
BMO Asset Management Corp. 190 South LaSalle Street, 4th Floor Chicago, IL 60603		Newfleet Asset Management, LLC 100 Pearl Street Hartford, CT 06103

Subadviser to Emerging Markets Opportunities Fund:		Subadviser to High Yield Income Fund: Monegy, Inc.
Vontobel Asset Management, Inc. 1540 Broadway, 38 ^th Floor New York, NY 10036		302 Bay Street, 12 ^th Floor Toronto, ON M5X 1A1 Canada

Sub-Transfer Agent, Fund Accountant, & Subadministrator:
BNY Mellon Investment Servicing (US) Inc. 301 Bellevue Parkway Wilmington, DE 19809

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Item 34.

Management Services

None.

Item 35.

Undertakings

Not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Hartford and the State of Connecticut on the 29 ^th day of April, 2013.


VIRTUS INSIGHT TRUST

By:		/s/ George R. Aylward
		George R. Aylward President

Pursuant to the requirements of the Securities Act of 1933, as amended, this amendment to the registration statement has been signed below by the following persons in the capacities indicated on the 29 ^th day of April, 2013.


Signature		Title

/s/ George R. Aylward George R. Aylward		Trustee and President (principal executive officer)

/s/ W. Patrick Bradley W. Patrick Bradley		Vice President, Chief Financial Officer and Treasurer

/s/ Leroy Keith, Jr. Leroy Keith, Jr.*		Trustee

/s/ Philip R. McLoughlin Philip R. McLoughlin*		Trustee and Chairman

/s/ Geraldine M. McNamara Geraldine M. McNamara*		Trustee

/s/ James M. Oates James M. Oates*		Trustee

/s/ Richard E. Segerson Richard E. Segerson*		Trustee

/s/ Ferdinand L.J. Verdonck Ferdinand L.J. Verdonck*		Trustee

/s/ George R. Aylward *George R. Aylward, Attorney-in-Fact, pursuant to a power of attorney

Exhibit List



d.6		Subadvisory Agreement between VIA and Newfleet Asset Management , LLC (“Newfleet”) on behalf of Low Duration Income Fund dated May 18, 2012.

d.7		First Amendment to Subadvisory Agreement between VIA and Newfleet on behalf of Tax-Exempt Bond Fund, dated June 15, 2012.

e.2		Form of Sales Agreement between VP Distributors and dealers [December 18, 2012].

g.1		Master Global Custody Agreement between the Registrant and JPMorgan Chase Bank, N.A. dated March 1, 2013.

h.1.c		Third Amendment to Amended and Restated Transfer Agent and Service Agreement between the Registrant and Virtus Fund Services, LLC dated January 1, 2013.

h.3.f		Sixth Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated August 28, 2012

h.3.g		Seventh Amendment to Amended and Restated Administration Agreement between the Registrant and VP Distributors (since assigned to Virtus Fund Services, LLC) dated December 18, 2012.

h.4.d		Fourth Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated August 28, 2012.

h.4.e		Fifth Amendment to Sub-Administration and Accounting Services Agreement among the Registrant, VP Distributors (since assigned to Virtus Fund Services, LLC) and BNY Mellon dated December 18, 2012.

h.8		Form of Indemnification Agreement with each trustee of the Registrant, effective as of [March 18, 2013].

j.1		Consent of Independent Registered Public Accounting Firm.

n.1.d		Fourth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of August 8, 2012.

n.1.e		Fifth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of August 28, 2012.

n.1.f		Sixth Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of September 21, 2012.

n.1.g		Seventh Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of December 18, 2012.

p.2		Amended and Restated Code of Ethics of the Adviser (VIA) and Newfleet dated October 1, 2012.

p.3		Standards of Business Conduct and Code of Ethics of Subadviser BMO and Monegy amended as of July 1, 2012.

p.4		Code of Ethics of Subadviser Vontobel dated February 2, 2012.

VIRTUS INSIGHT TRUST

Virtus Low Duration Income Fund

SUBADVISORY AGREEMENT

May 18, 2012

Newfleet Asset Management, LLC

100 Pearl Street, 9 ^th Floor

Hartford, CT 06103

RE:

Subadvisory Agreement

Ladies and Gentlemen:

Virtus Insight Trust (the “Fund”) is an open-end investment company of the series type registered under the Investment Company Act of 1940 (the “Act”), and is subject to the rules and regulations promulgated thereunder. The shares of the Fund are offered or may be offered in several series, including the Virtus Low Duration Income Fund (collectively, sometimes hereafter referred to as the “Series”).

Virtus Investment Advisers, Inc. (the “Adviser”) evaluates and recommends series advisers for the Series and is responsible for the day-to-day management of the Series.

Employment as a Subadviser . The Adviser, being duly authorized, hereby employs Newfleet Asset Management, LLC (the “Subadviser”) as a discretionary series adviser to invest and reinvest that discrete portion of the assets of the Series designated by the Adviser as set forth on Schedule F attached hereto (the “Designated Series”) on the terms and conditions set forth herein. The services of the Subadviser hereunder are not to be deemed exclusive; the Subadviser may render services to others and engage in other activities that do not conflict in any material manner with the Subadviser’s performance hereunder.

Acceptance of Employment; Standard of Performance . The Subadviser accepts its employment as a discretionary series adviser of the Designated Series and agrees to use its best professional judgment to make investment decisions for the Designated Series in accordance with the provisions of this Agreement and as set forth in Schedule D attached hereto and made a part hereof.

Services of Subadviser . In providing management services to the Designated Series, the Subadviser shall be subject to the investment objectives, policies and restrictions of the Fund as they apply to the Designated Series and as set forth in the Fund’s then current prospectus (“Prospectus”) and statement of additional information (“Statement of Additional Information”) filed with the Securities and Exchange Commission (the “SEC”) as part of the Fund’s Registration Statement, as may be periodically amended and provided to the Subadviser by the Adviser, and to the investment restrictions set forth in the Act and the Rules thereunder, to the supervision and control of the Trustees of the Fund (the “Trustees”), and to instructions from the Adviser. The Subadviser shall not, without the Fund’s prior written approval, effect any transactions that would cause the Designated Series at the time of the transaction to be out of compliance with any of such restrictions or policies.

Transaction Procedures . All series transactions for the Designated Series shall be consummated by payment to, or delivery by, the Custodian(s) from time to time designated by the Fund (the “Custodian”), or such depositories or agents as may be designated by the Custodian in writing, of all cash and/or securities due to or from the Series. The Subadviser shall not have possession or custody of such cash and/or securities or any responsibility or liability with respect to such

custody. The Subadviser shall advise the Custodian and confirm in writing to the Fund all investment orders for the Designated Series placed by it with brokers and dealers at the time and in the manner set forth in Schedule A hereto (as amended from time to time). The Fund shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by the Subadviser. The Fund shall be responsible for all custodial arrangements and the payment of all custodial charges and fees, and, upon giving proper instructions to the Custodian, the Subadviser shall have no responsibility or liability with respect to custodial arrangements or the act, omissions or other conduct of the Custodian.

5.	Allocation of Brokerage . The Subadviser shall have authority and discretion to select brokers and dealers to execute Designated Series transactions initiated by the Subadviser, and to select the markets on or in which the transactions will be executed.

In placing orders for the sale and purchase of Designated Series securities for the Fund, the Subadviser’s primary responsibility shall be to seek the best execution of orders at the most favorable prices. However, this responsibility shall not obligate the Subadviser to solicit competitive bids for each transaction or to seek the lowest available commission cost to the Fund, so long as the Subadviser reasonably believes that the broker or dealer selected by it can be expected to obtain a “best execution” market price on the particular transaction and determines in good faith that the commission cost is reasonable in relation to the value of the brokerage and research services (as defined in Section 28(e)(3) of the Securities Exchange Act of 1934) provided by such broker or dealer to the Subadviser, viewed in terms of either that particular transaction or of the Subadviser’s overall responsibilities with respect to its clients, including the Fund, as to which the Subadviser exercises investment discretion, notwithstanding that the Fund may not be the direct or exclusive beneficiary of any such services or that another broker may be willing to charge the Fund a lower commission on the particular transaction.

The Subadviser may manage other portfolios and expects that the Fund and other portfolios the Subadviser manages will, from time to time, purchase or sell the same securities. The Subadviser may aggregate orders for the purchase or sale of securities on behalf of the Designated Series with orders on behalf of other portfolios the Subadviser manages. Securities purchased or proceeds of securities sold through aggregated orders, as well as expenses incurred in the transaction, shall be allocated to the account of each portfolio managed by the Subadviser that bought or sold such securities in a manner considered by the Subadviser to be equitable and consistent with the Subadviser’s fiduciary obligations in respect of the Designated Series and to such other accounts.

The Subadviser shall not execute any Series transactions for the Designated Series with a broker or dealer that is (i) an “affiliated person” (as defined in the Act) of the Fund, the Subadviser, any subadviser to any other Series of the Fund, or the Adviser; (ii) a principal underwriter of the Fund’s shares; or (iii) an affiliated person of such an affiliated person or principal underwriter; in each case, unless such transactions are permitted by applicable law or regulation and carried out in compliance with any applicable policies and procedures of the Fund. The Fund shall provide the Subadviser with a list of brokers and dealers that are “affiliated persons” of the Fund or the Adviser, and applicable policies and procedures.

Consistent with its fiduciary obligations to the Fund in respect of the Designated Series and the requirements of best price and execution, the Subadviser may, under certain circumstances, arrange to have purchase and sale transactions effected directly between the Designated Series and another account managed by the Subadviser (“cross transactions”), provided that such transactions are carried out in accordance with applicable law or regulation and any applicable policies and procedures of the Fund. The Fund shall provide the Subadviser with applicable policies and procedures.

Proxies .

Unless the Adviser or the Fund gives the Subadviser written instructions to the contrary, the Subadviser, or a third party designee acting under the authority and supervision of the Subadviser, shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the assets of the Designated Series. Unless the Adviser or the Fund gives the Subadviser written instructions to the contrary, the Subadviser will, in compliance with the proxy voting procedures of the Designated Series then in effect, vote or abstain from voting, all proxies solicited by or with respect to the issuers of securities in which assets of the Designated Series may be invested. The Adviser shall cause the Custodian to forward promptly to the Subadviser all proxies upon receipt, so as to afford the Subadviser a reasonable amount of time in which to determine how to vote such proxies. The Subadviser agrees to provide the Adviser in a timely manner with a record of votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Fund to file Form N-PX as required by Rule 30b1-4 under the Act.

The Subadviser is authorized to deal with reorganizations, exchange offers and other voluntary corporate actions with respect to securities held in the Series in such manner as the Subadviser deems advisable, unless the Fund or the Adviser otherwise specifically directs in writing. With the Adviser’s approval, the Subadviser shall also have the authority to: (i) identify, evaluate and pursue legal claims, including commencing or defending suits, affecting the securities held at any time in the Series, including claims in bankruptcy, class action securities litigation and other litigation; (ii) participate in such litigation or related proceedings with respect to such securities as the Subadviser deems appropriate to preserve or enhance the value of the Series, including filing proofs of claim and related documents and serving as “lead plaintiff” in class action lawsuits; (iii) exercise generally any of the powers of an owner with respect to the supervision and management of such rights or claims, including the settlement, compromise or submission to arbitration of any claims, the exercise of which the Subadviser deems to be in the best interest of the Series or required by applicable law, including ERISA, and (iv) employ suitable agents, including legal counsel, and to pay their reasonable fees, expenses and related costs from the Series.

Prohibited Conduct . In providing the services described in this Agreement, the Subadviser’s responsibility regarding investment advice hereunder is limited to the Designated Series, and the Subadviser will not consult with any other investment advisory firm that provides investment advisory services to the Fund or any other investment company sponsored by Virtus Investment Partners, Inc. regarding transactions for the Fund in securities or other assets. The Fund shall provide the Subadviser with a list of investment companies sponsored by Virtus Investment Partners, Inc. and the Subadviser shall be in breach of the foregoing provision only if the investment company is included in such a list provided to the Subadviser prior to such prohibited action. In addition, the Subadviser shall not, without the prior written consent of the Fund and the Adviser, delegate any obligation assumed pursuant to this Agreement to any affiliated or unaffiliated third party.

8.	Information and Reports .

The Subadviser shall keep the Fund and the Adviser informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Designated Series. In this regard, the Subadviser shall provide the Fund, the Adviser and their respective officers with such periodic reports

concerning the obligations the Subadviser has assumed under this Agreement as the Fund and the Adviser may from time to time reasonably request. In addition, prior to each meeting of the Trustees, the Subadviser shall provide the Adviser and the Trustees with reports regarding the Subadviser’s management of the Designated Series during the most recently completed quarter, which reports: (i) shall include Subadviser’s representation that its performance of its investment management duties hereunder is in compliance with the Fund’s investment objectives and practices, the Act and applicable rules and regulations under the Act, and the diversification and minimum “good income” requirements of Subchapter M under the Internal Revenue Code of 1986, as amended, and (ii) otherwise shall be in such form as may be mutually agreed upon by the Subadviser and the Adviser.

Each of the Adviser and the Subadviser shall provide the other party with a list, to the best of the Adviser’s or the Subadviser’s respective knowledge, of each affiliated person (and any affiliated person of such an affiliated person) of the Adviser or the Subadviser, as the case may be, and each of the Adviser and Subadviser agrees promptly to update such list whenever the Adviser or the Subadviser becomes aware of any changes that should be added to or deleted from the list of affiliated persons.

The Subadviser shall also provide the Adviser with any information reasonably requested by the Adviser regarding its management of the Designated Series required for any shareholder report, amended registration statement, or Prospectus supplement to be filed by the Fund with the SEC.

Fees for Services . The compensation of the Subadviser for its services under this Agreement shall be calculated and paid by the Adviser in accordance with the attached Schedule C. Pursuant to the Investment Advisory Agreement between the Fund and the Adviser, the Adviser is solely responsible for the payment of fees to the Subadviser.

10.

Limitation of Liability . Except as otherwise stated in this Agreement, the Subadviser shall not be liable for any action taken, omitted or suffered to be taken by it in its best professional judgment, in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement, or in accordance with specific directions or instructions from the Fund, provided, however, that such acts or omissions shall not have constituted a material breach of the investment objectives, policies and restrictions applicable to the Designated Series as defined in the Prospectus and Statement of Additional Information , or a material breach of any laws, rules, regulations or orders applicable to the Designated Series, and that such acts or omissions shall not have resulted from the Subadviser’s willful misfeasance, bad faith or gross negligence, or reckless disregard of its obligations and duties hereunder.

11.

Confidentiality . Subject to the duty of the Subadviser and the Fund to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Designated Series and the actions of the Subadviser and the Fund in respect thereof. Notwithstanding the foregoing, the Fund and the Adviser agree that the Subadviser may (i) disclose in marketing materials and similar communications that the Subadviser has been engaged to manage assets of the Designated Series pursuant to this Agreement, and (ii) include performance statistics regarding the Series in composite performance statistics regarding one or more groups of Subadviser’s clients published or included in any of the foregoing communications, provided that the Subadviser does not identify any performance statistics as relating specifically to the Series.

12.

Assignment . This Agreement shall terminate automatically in the event of its assignment, as that term is defined in Section 2(a)(4) of the Act. The Subadviser shall notify the Fund and the Adviser in writing sufficiently in advance of any proposed change of control, as defined in Section 2(a)(9) of the Act, as will enable the Fund to consider whether an assignment as defined in Section 2(a)(4) of the Act will occur, and to take the steps necessary to enter into a new contract with the Subadviser.

13.	Representations, Warranties and Agreements of the Subadviser . The Subadviser represents, warrants and agrees that:

It is registered as an “investment adviser” under the Investment Advisers Act of 1940, as amended (“Advisers Act”).

It will maintain, keep current and preserve on behalf of the Fund, in the manner required or permitted by the Act and the Rules thereunder including the records identified in Schedule B (as Schedule B may be amended from time to time). The Subadviser agrees that such records are the property of the Fund, and shall be surrendered to the Fund or to the Adviser as agent of the Fund promptly upon request of either. The Fund acknowledges that Subadviser may retain copies of all records required to meet the record retention requirements imposed by law and regulation.

It shall maintain a written code of ethics (the “Code of Ethics”) complying with the requirements of Rule 204A-1 under the Advisers Act and Rule 17j-l under the Act and shall provide the Fund and the Adviser with a copy of the Code of Ethics and evidence of its adoption. It shall institute procedures reasonably necessary to prevent Access Persons (as defined in Rule 17j-1) from violating its Code of Ethics. The Subadviser acknowledges receipt of the written code of ethics adopted by and on behalf of the Fund. Each calendar quarter while this Agreement is in effect, a duly authorized compliance officer of the Subadviser shall certify to the Fund and to the Adviser that the Subadviser has complied with the requirements of Rules 204A-1 and 17j-l during the previous calendar quarter and that there has been no material violation of its Code of Ethics, or of Rule 17j-1(b), or that any persons covered under its Code of Ethics has divulged or acted upon any material, non-public information, as such term is defined under relevant securities laws, and if such a violation has occurred or the code of ethics of the Fund, or if such a violation of its Code of Ethics has occurred, that appropriate action was taken in response to such violation. Annually, the Subadviser shall furnish to the Fund and the Adviser a written report which complies with the requirements of Rule 17j-1 concerning the Subadviser’s Code of Ethics. The Subadviser shall permit the Fund and the Adviser to examine the reports required to be made by the Subadviser under Rules 204A-1(b) and 17j-l(d)(1) and this subparagraph.

It has adopted and implemented, and throughout the term of this Agreement shall maintain in effect and implement, policies and procedures reasonably designed to prevent, detect and correct violations by the Subadviser and its supervised persons, and, to the extent the activities of the Subadviser in respect of the Fund could affect the Fund, by the Fund, of “federal securities laws” (as defined in Rule 38a-1 under the Act), and that the Subadviser has provided the Fund with true and complete copies of its policies and procedures (or summaries thereof) and related information reasonably requested by the Fund and/or the Adviser. The Subadviser agrees to cooperate with periodic reviews by the Fund’s and/or the Adviser’s compliance personnel of the Subadviser’s policies and procedures, their operation and implementation and other compliance matters and to provide to the Fund and/or the Adviser from time to time such additional information and certifications in respect of the Subadviser’s policies and procedures, compliance by the Subadviser with federal securities laws and related matters as the Fund’s and/or the Adviser’s compliance personnel may reasonably request. The Subadviser agrees to promptly notify the Adviser of any compliance violations which affect the Designated Series.

The Subadviser will immediately notify the Fund and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9 of the Act or otherwise. The Subadviser will also immediately notify the Fund and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of the Designated Series.

14.

No Personal Liability . Reference is hereby made to the Declaration of Trust establishing the Fund, a copy of which has been filed with the Secretary of the Commonwealth of Massachusetts and elsewhere as required by law, and to any and all amendments thereto so filed with the Secretary of the Commonwealth of Massachusetts and elsewhere as required by law, and to any and all amendments thereto so filed or hereafter filed. The name “Virtus Insight Trust” refers to the Trustees under said Declaration of Trust, as Trustees and not personally, and no Trustee, shareholder, officer, agent or employee of the Fund shall be held to any personal liability in connection with the affairs of the Fund; only the trust estate under said Declaration of Trust is liable. Without limiting the generality of the foregoing, neither the Subadviser nor any of its officers, directors, partners, shareholders or employees shall, under any circumstances, have recourse or cause or willingly permit recourse to be had directly or indirectly to any personal, statutory, or other liability of any shareholder, Trustee, officer, agent or employee of the Fund or of any successor of the Fund, whether such liability now exists or is hereafter incurred for claims against the trust estate.

15.

Entire Agreement; Amendment . This Agreement, together with the Schedules attached hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be amended at any time, but only by written agreement among the Subadviser, the Adviser and the Fund, which amendment, other than amendments to Schedules A, B, D, E and F, is subject to the approval of the Trustees and the shareholders of the Series as and to the extent required by the Act, subject to any applicable orders of exemption issued by the SEC.

16.

Effective Date; Term . This Agreement shall become effective on the date set forth on the first page of this Agreement, and shall continue in effect until December 31, 2013. The Agreement shall continue from year to year thereafter only so long as its continuance has been specifically approved at least annually by the Trustees in accordance with Section 15(a) of the Act, and by the majority vote of the disinterested Trustees in accordance with the requirements of Section 15(c) thereof.

17.

Termination . This Agreement may be terminated by any party, without penalty, immediately upon written notice to the other parties in the event of a material breach of any provision thereof by a party so notified, or otherwise upon thirty (30) days’ written notice to the other parties, but any such termination shall not affect the status, obligations or liabilities of any party hereto to the other parties with respect to events occurring prior to such termination. In the event that this Agreement is terminated pursuant to the immediately preceding sentence with respect to some but not all of the Designated Series, this Agreement shall remain in full force and effect in accordance with its terms with respect to each of the remaining Designated Series with respect to which it has not been terminated.

18.

Applicable Law . To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the Commonwealth of Massachusetts.

19.

Severability . If any term or condition of this Agreement shall be invalid or unenforceable to any extent or in any application, then the remainder of this Agreement shall not be affected thereby, and each and every term and condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

20.

Notices. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered personally or by overnight delivery service or mailed by certified or registered mail, return receipt requested and postage prepaid, or sent by facsimile addressed to the parties at their respective addresses set forth below, or at such other address as shall be designated by any party in a written notice to the other party.

(a)

To Virtus or the Fund at:

Virtus Investment Advisers, Inc.

100 Pearl Street

Hartford, Connecticut 06103

Attn: Kevin J. Carr

Telephone: (860) 263-4791

Facsimile: (860) 241-1024

E-mail: kevin.carr@virtus.com

(b)

To the Subadviser at Newfleet Asset Management, LLC:

Newfleet Asset Management, LLC

100 Pearl Street, 9 ^th Floor

Hartford, Connecticut 06103

Attn: Kevin J. Carr

Telephone: (860) 263-4791

Facsimile: (860) 241-1024

E-mail: kevin.carr@virtus.com

21.

Certifications. The Subadviser hereby warrants and represents that it will provide the requisite certifications reasonably requested by the chief executive officer and chief financial officer of the Fund necessary for those named officers to fulfill their reporting and certification obligations on Form N-CSR and Form N-Q as required under the Sarbanes-Oxley Act of 2002 to the extent that such reporting and certifications relate to the Subadviser’s duties and responsibilities under this Agreement. Subadviser shall provide a quarterly certification in a form substantially similar to that attached as Schedule E.

22.

Indemnification . The Subadviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities, or damages (including reasonable attorney’s fees and other related expenses) (collectively, “Losses”) arising from the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Subadviser’s obligation under this Paragraph shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Adviser, is caused by or is otherwise directly related to (i) any breach by the Adviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Adviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Prospectus or SAI, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Fund(s) or the omission to state therein a material fact known to the Adviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Subadviser or the Trust, or the omission of such information, by the Adviser for use therein.

The Adviser shall indemnify and hold harmless the Subadviser from and against any and all Losses arising from the Adviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Adviser’s obligation under this Paragraph shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Subadviser, is caused by or is otherwise directly related to (i) any breach by the Subadviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Subadviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Prospectus or SAI, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Fund(s) or the omission to state therein a material fact known to the Subadviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Adviser or the Trust, or the omission of such information, by the Subadviser for use therein.

A party seeking indemnification hereunder (the “Indemnified Party”) will (i) provide prompt notice to the other of any claim (“Claim”) for which it intends to seek indemnification, (ii) grant control of the defense and /or settlement of the Claim to the other party, and (iii) cooperate with the other party in the defense thereof. The Indemnified Party will have the right at its own expense to participate in the defense of any Claim, but will not have the right to control the defense, consent to judgment or agree to the settlement of any Claim without the written consent of the other party. The party providing the indemnification will not consent to the entry of any judgment or enter any settlement which (i) does not include, as an unconditional term, the release by the claimant of all liabilities for Claims against the Indemnified Party or (ii) which otherwise adversely affects the rights of the Indemnified Party.

No party will be liable to another party for consequential damages under any provision of this Agreement.

23.	Receipt of Disclosure Document . The Fund and the Adviser acknowledge receipt, at least 48 hours prior to entering into this Agreement, of a copy of Part II of the Subadviser’s Form ADV containing certain information concerning the Subadviser and the nature of its business.

24.

Counterparts; Fax Signatures . This Agreement may be executed in any number of counterparts (including executed counterparts delivered and exchanged by facsimile transmission) with the same effect as if all signing parties had originally signed the same document, and all counterparts shall be construed together and shall constitute the same instrument. For all purposes, signatures delivered and exchanged by facsimile transmission shall be binding and effective to the same extent as original signatures.

[signature page follows]


VIRTUS INSIGHT TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley
		Title: Vice President, Chief Financial Officer & Treasurer


VIRTUS INVESTMENT ADVISERS, INC.

By:		/s/ Francis G. Waltman
		Name: Francis G. Waltman
		Title: Executive Vice President


ACCEPTED:

NEWFLEET ASSET MANAGEMENT, LLC

By:		/s/ Francis G. Waltman
		Name: Francis G. Waltman
		Title: Executive Vice President


SCHEDULES:	A.	Operational Procedures
	B.	Record Keeping Requirements
	C.	Fee Schedule
	D.	Subadviser Functions
	E.	Form of Sub-Certification
	F.	Designated Series

SCHEDULE A

OPERATIONAL PROCEDURES

In order to minimize operational problems, it will be necessary for a flow of information to be supplied by Subadviser to The Bank of New York Mellon (the “Custodian”) and BNY Mellon Investment Servicing (US) Inc., (the “Sub-Accounting Agent”) for the Fund.

The Subadviser must furnish the Custodian and the Sub-Accounting Agent with daily information as to executed trades, or, if no trades are executed, with a report to that effect, no later than 5:00 p.m. (Eastern Time) on the day of the trade each day the Fund is open for business. When necessary, trade information for executed trades can be sent to the Sub-Accounting Agent on trade date +1 by 11:00 a.m. (Subadviser will be responsible for reimbursement to the Fund for any loss caused by the Subadviser’s failure to comply.) The necessary information can be sent via facsimile machine or electronic delivery to the Custodian and by facsimile machine or batch files to the Sub-Accounting Agent. Information provided to the Custodian and the Sub-Accounting Agent shall include the following:

Purchase or sale;

Security name;

CUSIP number, ISIN or Sedols (as applicable);

Number of shares and sales price per share or aggregate principal amount;

Executing broker;

Settlement agent;

Trade date;

Settlement date;

Aggregate commission or if a net trade;

10.

Interest purchased or sold from interest bearing security;

11.

Other fees;

12.

Net proceeds of the transaction;

13.

Exchange where trade was executed;

14.

Identified tax lot (if applicable); and

15.

Trade commission reason: best execution, soft dollar or research.

When opening accounts with brokers for, and in the name of, the Fund, the account must be a cash account. No margin accounts are to be maintained in the name of the Fund. Delivery instructions are as specified by the Custodian. The Custodian will supply the Subadviser daily with a cash availability report via access to the Custodian website, or by email or by facsimile and the Sub-Accounting Agent will provide a five day cash projection. This will normally be done by email or, if email is unavailable, by another form of immediate written communication, so that the Subadviser will know the amount available for investment purposes.

SCHEDULE B

RECORDS TO BE MAINTAINED BY THE SUBADVISER

1.	(Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other series purchases and sales, given by the Subadviser on behalf of the Fund for, or in connection with, the purchase or sale of securities, whether executed or unexecuted. Such records shall include:

The name of the broker;

The terms and conditions of the order and of any modifications or cancellations thereof;

The time of entry or cancellation;

The price at which executed;

The time of receipt of a report of execution; and

The name of the person who placed the order on behalf of the Fund.

(Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten (10) days after the end of the quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of series securities to named brokers or dealers was effected, and the division of brokerage commissions or other compensation on such purchase and sale orders. Such record:

Shall include the consideration given to:

(i)

The sale of shares of the Fund by brokers or dealers.

(ii)

The supplying of services or benefits by brokers or dealers to:

(a)

The Fund,

(b)

The Adviser,

(c)

The Subadviser, and

(d)

Any person other than the foregoing.

(iii)

Any other consideration other than the technical qualifications of the brokers and dealers as such.

Shall show the nature of the services or benefits made available.

Shall describe in detail the application of any general or specific formula or other determinant used in arriving at such allocation of purchase and sale orders and such division of brokerage commissions or other compensation.

Shall show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.

(Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum identifying the person or persons, committees or groups authorizing the purchase or sale of series securities. Where a committee or group makes an authorization, a record shall be kept of the names of its members who participate in the authorization. There shall be retained as part of this record: any memorandum, recommendation or instruction supporting or authorizing the purchase or sale of series securities and such other information as is appropriate to support the authorization.*

4.	(Rule 31a-1(f)) Such accounts, books and other documents as are required to be maintained by registered investment advisers by rule adopted under Section 204 of the Advisers Act, to the extent such records are necessary or appropriate to record the Subadviser’s transactions for the Fund.

5.	Records as necessary under Board approved Virtus Mutual Funds policies and procedures, including without limitation those related to valuation determinations.

*	Such information might include: current financial information, annual and quarterly reports, press releases, reports by analysts and from brokerage firms (including their recommendations, i.e., buy, sell, hold) or any internal reports or subadviser review.

SCHEDULE C

SUBADVISORY FEE

(a) For services provided to the Fund, the Adviser will pay to the Subadviser a fee, payable monthly in arrears, at the annual rate stated below. The fee shall be prorated for any month during which this Agreement is in effect for only a portion of the month. In computing the fee to be paid to the Subadviser, the net asset value of each Designated Series shall be valued as set forth in the then current registration statement of the Fund.

(b)

Name of Series

Proposed Subadvisory Fee to be

Paid by VIA to Newfleet

Virtus Low Duration Income Fund

50% of the net advisory fee

For this purpose, the “net advisory fee” means the advisory fee paid to the Adviser after accounting for any applicable fee waiver and/or expense limitation agreement, which shall not include reimbursement of the Adviser for any expenses or recapture of prior waivers. In the event that the Adviser waives its entire fee and also assumes expenses of the Fund pursuant to an applicable expense limitation agreement, the Subadviser will similarly waive its entire fee and will share in the expense assumption by contributing 50% of the assumed amount. However, because the Subadviser shares the fee waiver and/or expense assumption equally with the Adviser, if during the term of this Agreement the Adviser later recaptures some or all of the fees so waived or expenses so assumed by the Adviser and the Subadviser together, the Adviser shall pay to the Subadviser 50% of the amount recaptured.

SCHEDULE D

SUBADVISER FUNCTIONS

With respect to managing the investment and reinvestment of the Designated Series’ assets, the Subadviser shall provide, at its own expense:

(a)

An investment program for the Designated Series consistent with its investment objectives based upon the development, review and adjustment of buy/sell strategies approved from time to time by the Board of Trustees and the Adviser in paragraph 3 of this Subadvisory Agreement and implementation of that program;

(b)

Periodic reports, on at least a quarterly basis, in form and substance acceptable to the Adviser, with respect to: i) compliance with the Code of Ethics and the Fund’s code of ethics; ii) compliance with procedures adopted from time to time by the Trustees of the Fund relative to securities eligible for resale under Rule 144A under the Securities Act of 1933, as amended; iii) diversification of Designated Series assets in accordance with the then prevailing Prospectus and Statement of Additional Information pertaining to the Designated Series and governing laws, regulations, rules and orders; iv) compliance with governing restrictions relating to the fair valuation of securities for which market quotations are not readily available or considered “illiquid” for the purposes of complying with the Designated Series’ limitation on acquisition of illiquid securities; v) any and all other reports reasonably requested in accordance with or described in this Agreement; and vi) the implementation of the Designated Series’ investment program, including, without limitation, analysis of Designated Series performance;

(c)

Promptly after filing with the SEC an amendment to its Form ADV, a copy of such amendment to the Adviser and the Trustees;

(d)

Attendance by appropriate representatives of the Subadviser at meetings requested by the Adviser or Trustees at such time(s) and location(s) as reasonably requested by the Adviser or Trustees; and

(e)

Notice to the Trustees and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.

(f)

Provide reasonable assistance in the valuation of securities including the participation of appropriate representatives at fair valuation committee meetings.

SCHEDULE E

FORM OF SUB-CERTIFICATION

To:

Re:	Subadviser’s Form N-CSR and Form N-Q Certification for the [Name of Designated Series].

From:

[Name of Subadviser]

Representations in support of Investment Company Act Rule 30a-2 certifications of Form N-CSR and Form N-Q.

[Name of Designated Series].

In connection with your certification responsibility under Rule 30a-2 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, I have reviewed the following information presented in the schedule of investments for the period ended [Date of Reporting Period] (the “Report”) which forms part of the N-CSR or N-Q, as applicable, for the Fund.

Schedule of Investments

Our organization has designed, implemented and maintained internal controls and procedures, designed for the purpose of ensuring the accuracy and completeness of relevant portfolio trade data transmitted to those responsible for the preparation of the Schedule of Investments. As of the date of this certification there have been no material modifications to these internal controls and procedures.

In addition, our organization has:

Designed such internal controls and procedures to ensure that material information is made known to the appropriate groups responsible for servicing the above-mentioned mutual fund.

Evaluated the effectiveness of our internal controls and procedures, as of a date within 90 days prior to the date of this certification and we have concluded that such controls and procedures are effective.

In addition, to the best of my knowledge, there has been no fraud, whether or not material, that involves our organization’s management or other employees who have a significant role in our organization’s control and procedures as they relate to our duties as subadviser to the Designated Series.

I have read the draft of the Report which I understand to be current as of [Date of Reporting Period] and based on my knowledge, such draft of the Report does not, with respect to the Designated Series, contain any untrue statement of a material fact or omit to state a material fact necessary to make the information contained therein, in light of the circumstances under which such information is presented, not misleading with respect to the period covered by such draft Report.

I have disclosed, based on my most recent evaluation, to the Designated Series’ Chief Accounting Officer:

All significant changes, deficiencies and material weakness, if any, in the design or operation of the Subadviser’s internal controls and procedures which could adversely affect the Registrant’s ability to record, process, summarize and report financial data with respect to the Designated Series in a timely fashion;

Any fraud, whether or not material, that involves the Subadviser’s management or other employees who have a significant role in the Subadviser’s internal controls and procedures for financial reporting.

I certify that to the best of my knowledge:

The Subadviser’s Portfolio Manager(s) has/have complied with the restrictions and reporting requirements of the Code of Ethics (the “Code”). The term Portfolio Manager is as defined in the Code.

The Subadviser has complied with the Prospectus and Statement of Additional Information of the Designated Series and the Policies and Procedures of the Designated Series as adopted by the Designated Series Board of Trustees.

I have no knowledge of any compliance violations except as disclosed in writing to the Virtus Compliance Department by me or by the Subadviser’s compliance administrator.

The Subadviser has complied with the rules and regulations of the 33 Act and 40 Act, and such other regulations as may apply to the extent those rules and regulations pertain to the responsibilities of the Subadviser with respect to the Designated Series as outlined above.

Since the submission of our most recent certification there have not been any divestments of securities of issuers that conduct or have direct investments in business operations in Sudan.

This certification relates solely to the Designated Series named above and may not be relied upon by any other fund or entity.

The Subadviser does not maintain the official books and records of the above Designated Series. The Subadviser’s records are based on its own portfolio management system, a record-keeping system that is not intended to serve as the Designated Series official accounting system. The Subadviser is not responsible for the preparation of the Report.

[Name of Subadviser]

[Name of Authorized Signer]

[Title of Authorized Signer]

Date

SCHEDULE F

DESIGNATED SERIES

Virtus Low Duration Income Fund

FIRST AMENDMENT

TO SUBADVISORY AGREEMENT

THIS AMENDMENT effective as of the 15 ^th day of June, 2012 amends that certain Subadvisory Agreement effective May 18, 2012, (the “Agreement”) among Virtus Insight Trust (the “Trust”), a Massachusetts business trust on behalf of its series Virtus Tax-Exempt Bond Fund (the “Fund”), Virtus Investment Advisers, Inc., a Massachusetts corporation (the “Adviser”) and Newfleet Asset Management, LLC, a Delaware limited liability company (the “Subadviser”) as follows:

1.	Virtus Tax-Exempt Bond Fund is hereby added as an additional Series to the Agreement.

The term of this Amendment to the Agreement, taken together with the entire Agreement, with respect to Virtus Tax-Exempt Bond Fund, shall become effective on the date set forth above, and shall continue in effect until December 31, 2013. The term of the other Designated Series is unaffected by this Amendment. The Agreement shall continue from year to year thereafter only so long as its continuance has been specifically approved at least annually by the Trustees in accordance with Section 15(a) of the Act, and by the majority vote of the disinterested Trustees in accordance with the requirements of Section 15(c) thereof.

3.	The Subadvisory fee for Virtus Tax-Exempt Bond Fund is hereby set forth on Schedule C to the Agreement, Schedule C is hereby deleted and Schedule C attached hereto is substituted in its place to reflect such addition.

4.	Schedule F to the Agreement is hereby deleted and Schedule F attached hereto is substituted in its place to reflect the addition of Virtus Tax-Exempt Bond Fund.

5.	Except as expressly amended hereby, all provisions of the Agreement shall remain in full force and effect and are unchanged in all other respects. All initial capitalized terms used herein shall have such meanings as ascribed thereto in the Agreement.

This Agreement may be executed in any number of counterparts (including executed counterparts delivered and exchanged by facsimile transmission) with the same effect as if all signing parties had originally signed the same document, and all counterparts shall be construed together and shall constitute the same instrument. For all purposes, signatures delivered and exchanged by facsimile transmission shall be binding and effective to the same extent as original signatures.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto intending to be legally bound have caused this Agreement to be executed by their duly authorized officers.


VIRTUS INSIGHT TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley
		Title: Vice President, Chief Financial Officer & Treasurer


VIRTUS INVESTMENT ADVISERS, INC.

By:		/s/ David G. Hanley
Name: David G. Hanley
Title: Vice President & Treasurer


ACCEPTED:

NEWFLEET ASSET MANAGEMENT, LLC

By:		/s/ Francis G. Waltman
Name: Francis G. Waltman
Title: Executive Vice President

SCHEDULE C

SUBADVISORY FEE

(b)


Name of Series		Proposed Subadvisory Fee to be Paid by VIA to Newfleet
Virtus Low Duration Income Fund		50% of the net advisory fee
Virtus Tax-Exempt Bond Fund		50% of the net advisory fee

SCHEDULE F

DESIGNATED SERIES

Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

LOGO

VP Distributors, LLC.

100 Pearl Street

Hartford, CT 06103

VIRTUS FUNDS

SALES AGREEMENT

To:	Dealer Name

Attention:

Address

City, State, Zip Code

VP Distributors, LLC (“VPD”, “we”, “us”, or “our”) invites you to participate in the sale and distribution of shares of registered investment companies (which shall collectively be referred to hereinafter as the “Funds”) for which we are national distributor or principal underwriter, and which may be listed in Annex A hereto which such Annex may be amended by us from time to time. Upon acceptance of this agreement by VPD, you may offer and sell shares of each of the Funds (hereafter “Shares”) subject, however, to the terms and conditions hereof including our right to suspend or cease the sale of such shares. For the purposes hereof, the above referenced dealer shall be referred to as “you”.

You understand and agree that in all sales of Shares to the public, you shall act as dealer for your own account. All purchase orders and applications are subject to acceptance or rejection by us in our sole discretion and are effective only upon confirmation by us. Each purchase will be deemed to have been consummated in our principal office subject to our acceptance and effective only upon confirmation to you by us.

2.	You agree that all purchases of Shares by you shall be made only for the purpose of covering purchase orders already received from your customers (who may be any person other than a securities dealer or broker) or for your own bona-fide investment.

You shall offer and sell Shares purchased pursuant to this agreement for the purpose of covering purchase orders of your customers, to the extent applicable, (a) at the current public offering price (“Offering Price”) for Class A Shares or (b) at the Net Asset Value for Class B and Class C shares as set forth in the current prospectus of each of the funds.

You shall pay us for Shares purchased within three (3) business days of the date of our confirmation to you of such purchase or within such time as required by applicable rule or law. The purchase price shall be (a) the Offering Price, less only the applicable dealer discount (Dealer Discount) for Class A Shares, if applicable, or (b) the Net Asset Value, less only the applicable sales commission (Sales Commission) for Class C Shares, if applicable, as set forth in the current prospectus at the time the purchase is received by us. We have the right, without notice, to cancel any order for which payment of good and sufficient funds has not been received by us as provided in this paragraph, in which case you may be held responsible for any loss suffered by us resulting from your failure to make payment as aforesaid.

You understand and agree that any Dealer Discount, Sales Commission or fee is subject to change from time to time without prior notice. Any orders placed after the effective date of any such change shall be subject to the Dealer Discount or Sales Commission in effect at the time such order is received by us.

You understand and agree that Shares purchased by you under this Agreement will not be delivered until payment of good and sufficient funds has been received by us. Delivery of Shares will be made by credit to a shareholder open account unless delivery of certificates is specified in the purchase order. In order to avoid unnecessary delay, it is understood that, at your request, any Shares resold by you to one of your customers will be delivered (whether by credit to a shareholder open account or by delivery of certificates) in the name of your customer.

You understand that on all purchases of Shares to which the terms of this Agreement are applicable by a shareholder for whom you are dealer of record, we will pay you an amount equal to the Dealer Discount, Sales Commission or fees which would have been paid to you with respect to such Shares if such Shares had been purchased through you. You understand and agree that the dealer of record for this purpose shall be the dealer through whom such shareholder most recently purchased Shares of such fund, unless the shareholder or you have instructed us otherwise. You understand that all amounts payable to you under this paragraph and currently payable under this agreement will be paid as of the end of the month unless specified otherwise for the total amount of Shares to which this paragraph is applicable but may be paid more frequently as we may determine in our discretion. Your request for Dealer Discount or Sales Commission reclaims will be considered if adequate verification and documentation of the purchase in question is supplied to us, and the reclaim is requested within three years of such purchase.

We appoint the transfer agent (or identified sub-transfer agent) for each of the Funds as our agent to execute the purchase transaction of Shares and to confirm such purchases to your customers on your behalf, and you guarantee the legal capacity of your customers so purchasing such Shares. You further understand that if a customer’s account is established without the customer signing the application form, you hereby represent that the instructions relating to the registration and shareholder options selected (whether on the application form, in some other document or orally) are in accordance with the customer’s instructions and you agree to indemnify the Funds, the transfer agent (or identified sub-transfer agent) and us for any loss or liability resulting from acting upon such instructions.

9.	Upon the purchase of Class A Shares pursuant to a Letter of Intent, you will promptly return to us any excess of the Dealer Discount previously allowed or paid to you over that allowable in respect to such larger purchases.

10.

Unless at the time of transmitting a purchase order you advise us to the contrary, we may consider that the investor owns no other Shares and may further assume that the investor is not entitled to any lower sales charge than that accorded to a single transaction in the amount of the purchase order, as set forth in the current prospectus.

11.

You understand and agree that if any Shares purchased by you under the terms of this Agreement are, within seven (7) business days after the date of our confirmation to you of the original purchase order for such Shares, repurchased by us as agent for such fund or are tendered to such fund for redemption, you shall forfeit the right to, and shall promptly pay over to us the amount of, any Dealer Discount or Sales Commission allowed to you with respect to such Shares. We will notify you of such repurchase or redemption within ten (10) days of the date upon which certificates are delivered to us or to such fund or the date upon which the holder of Shares held in a shareholder open account places or causes to be placed with us or with such fund an order to have such shares repurchased or redeemed.

12.

You agree that, in the case of any repurchase of any Shares made more than seven (7) business days after confirmation by us of any purchase of such Shares, except in the case of Shares purchased from you by us for your own bona fide investment, you will act only as agent for the holders of such Shares and will place the orders for repurchase only with us. It is understood that you may charge the holder of such Shares a fair commission for handling the transaction.

13.

Our obligations to you under this Agreement are subject to all the provisions of the respective distribution agreements entered into between us and each of the Funds. You understand and agree that in performing your services under this agreement you are acting in the capacity of an independent contractor, and we are in no way responsible for the manner of your performance or for any of your acts or omissions in connection therewith. Nothing in the Agreement shall be construed to constitute you or any of your agents, employees, or representatives as our agent, partner or employee, or the agent, partner of employee of any of the Funds.

In connection with the sale and distribution of shares of Virtus Funds, you agree to indemnify and hold us and our affiliates, employees, and/or officers harmless from any damage or expense as a result of (a) the negligence, misconduct or wrongful act by you or any employee, representative, or agent of yours and/or (b) any actual or alleged violation of any securities laws, regulations or orders. Any indebtedness or obligation of yours to us whether arising hereunder or otherwise, and any liabilities incurred or moneys paid by us to any person as a result of any misrepresentation, wrongful or unauthorized act or omission, negligence of, or failure of you or your employees, representatives or agents to comply with the Sales Agreement, shall be set off against any compensation payable under this agreement. Any differential between such expenses and compensation payable hereunder shall be payable to us upon demand. The terms of this provision shall not be impaired by the termination of this agreement.

In connection with the sale and distribution of shares of Virtus Funds, we agree to indemnify and hold you harmless from any damage or expense on account of the gross and willful negligence, misconduct or wrongful act of us or any employee, representative, or agent of ours which arises out of or is based upon any untrue statement or alleged untrue statement of material fact, or the omission or alleged omission of a material fact in: (i) any registration statement, including any prospectus or any post-effective amendment thereto; or (ii) any material prepared and/or supplied by us for use in conjunction with the offer or sale of Virtus Funds; or (iii) any state registration or other document filed in any state or jurisdiction in order to qualify any Fund under the securities laws of such state or jurisdiction. The terms of this provision shall not be impaired by the termination of this agreement.

14.

We will supply you with reasonable quantities of the current prospectus, periodic reports to shareholders, and sales materials for each of the Funds. You agree not to use any other advertising or sales material relating to the sale of shares of any of the Funds unless other advertising or sales material is pre-approved in writing by us.

15.

You agree to offer and sell Shares only in accordance with the terms and conditions of the then current prospectus of each of the Funds and subject to the provisions of this Agreement, and you will make no representations not contained in any such prospectus or any authorized supplemental sales material supplied by us. You agree to use your best efforts in the development and promotion of sales of the Shares covered by this Agreement, and agree to be responsible for the proper instruction, training and supervision of all sales representatives employed by you in order that such Shares will be offered in accordance with the terms and conditions of this Agreement and all applicable laws, rules and regulations. All expenses incurred by you in connection with your activities under this Agreement shall be borne by you. In consideration for the extension of the right to exercise telephone exchange and redemption privileges to you and your registered representatives, you agree to bear the risk of any loss resulting from any unauthorized telephone exchange or redemption instructions from you or your registered representatives. In the event we determine to refund any amounts paid by any investor by reason of such violation on your part, you shall forfeit the right to, and pay over to us, the amount of any Dealer Discount or Sales Commission allowed to you with respect to the transaction for which the refund is made.

16.

You represent that you are properly registered as a broker or dealer under the Securities and Exchange Act of 1934 and are member of the Financial Industry Regulatory Authority, Inc. (FINRA) and agree to maintain membership with FINRA or in the alternative, that you are a foreign dealer not eligible for membership with FINRA. You agree to notify us promptly of any change, termination or suspension of the foregoing status. You agree to abide by all the rules and regulations of FINRA and NASD Rules, including NASD Conduct Rule 2830, which is incorporated herein by reference as if set forth in full. You further agree to comply with all applicable state and Federal laws and the rules and regulations of applicable regulatory agencies. You further agree that you will not sell, or offer for sale, Shares in any jurisdiction in which such Shares have not been duly registered or qualified for sale. You agree to promptly notify us with respect to (a) the initiation and disposition of any formal disciplinary action by the FINRA or any other agency or instrumentality having jurisdiction with respect to the subject matter hereof against you or any of your employees or agents; (b) the issuance of any form of deficiency notice by the FINRA or any such agency regarding your training, supervision or sales practices; and (c) the effectuation of any consensual order with respect thereto.

16.1

Patriot Act. You shall employ policies and procedures designed to comply with the rules and regulations promulgated from time to time by the Office of Foreign Asset Control (including transactions involving embargoed countries or Specifically Designated Nationals and Blocked Persons) and all other applicable money laundering restrictions, including, without limitation, such restrictions as may be adopted pursuant to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) of 2001 with respect to similarly situated financial institutions as VPD. You agree that you will perform the Customer Identification Program requirements of the USA Patriot Act, as applicable, with respect to Accounts established and transactions made pursuant to this Agreement.

16.2

Sarbanes-Oxley Act. You agree to cooperate with VPD and will facilitate the filing by VPD, each underlying registered investment companies (collectively, the “Funds”) and/or their respective officers and auditors of any and all certifications or attestations as required by the Sarbanes-Oxley Act of 2002, including, without limitation, furnishing such sub-certifications from your relevant officers with respect to the services performed by you under this Agreement as reasonably requested from time to time.

16.3

Rule 38a-1. Upon reasonable request, you agree to provide your written policies and procedures to the Funds’ chief compliance officer for review and the Funds’ board of trustees’ approval to assist our compliance with Rule 38a-1 under the Investment Company Act of 1940, as amended. You further agree to cooperate with VPD in its review of such written policies and procedures, including, without limitation, furnishing such certifications and sub-certifications as VPD shall reasonably request from time to time. You agree that you shall promptly notify VPD and Funds in the event that a “material compliance matter” (as such term is defined pursuant to Rule 38a-1 under the 1940 Act) arises with respect the services you provide under this Agreement.

16.4

Late Trading. You will accept no orders for the purchase and redemption of Fund shares after 4:00 p.m. Eastern time on any Business Day. For the purposes hereof, a “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which a Fund calculates its net asset value pursuant to the rules of the Securities and Exchange Commission (hereinafter, the “SEC”), as amended from time to time, subject to such terms and conditions as may be set forth in the registration statements for the Funds as filed with the SEC, as the same shall be amended from time to time.

16.5

Market Timing. VPD may refuse to sell shares of any Fund (or series thereof) to any person, or suspend or terminate the offering of shares of any Fund (or series thereof), if such action is required by law or by regulatory authorities having jurisdiction with respect to VPD or Fund, as the case may be, or is, in the reasonable discretion of VPD, reasonably necessary in order to protect the best interests of its investors. You shall establish and maintain policies and procedures reasonably designed to detect, monitor and deter (including, without limitation, rejecting specific purchase orders) account owners (or their agents) whose purchase and redemption activity follows a market timing pattern, and to take such other actions as you deem necessary to discourage or reduce market timing activity. For the purposes hereof, “market timing activity” shall mean and refer to any discernable pattern of excessive trading in and out of a Fund (or series thereof) by one or more account owners (or their agents), including, without limitation, any purchase and sale (round trip) in and out of a single series of a Fund within any thirty day period. The parties acknowledge that, if necessary, such policies and procedures may include the identification of account owners engaged in such market timing activity and the imposition of restrictions on their requests to purchase or exchange Fund shares. You shall provide reasonable reports regarding your implementation and enforcement of such restrictions on purchase and redemption activity that follows a market-timing pattern upon request.

17.

Shareholder Information and SEC Rule 22c-2. If trading as an Intermediary (a broker, dealer, bank or other entity that holds securities of record issued by the Funds in nominee name; and in the case of a participant-directed employee benefit plan that owns securities issued by the Funds; a retirement plan administrator under ERISA or any entity that maintains the plan’s participant records) you hereby agree as follows:

17.1

Agreement to Provide Information. Intermediary agrees to provide the Funds, upon written request, the taxpayer information number (“TIN”), if known, of any or all Shareholder(s) of the account and the amount, date, name or other identifier of any investment professional(s) associated with the Shareholder(s) or account (if known), and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer, or exchange of Fund shares held through an account maintained by the Intermediary during the period covered by the request.

17.1.1

Period Covered by Request. Requests must set forth a specific period, not to exceed 180 days from the date of the request, for which transaction information is sought. The Fund may request transaction information older than 180 days from the date of the request as it deems necessary to investigate compliance with policies established by the Fund for the purposes of eliminating or reducing any dilution of the value of the outstanding shares issued by the Fund. If requested by the Fund, Intermediary agrees to provide the information specified in 17.1 for each trading day.

17.1.2

Form and Timing of Response. Intermediary agrees to transmit the requested information that is on its books and records to the Funds or its designee promptly, but in any event not later than 10 business days, after receipt of a request. If the requested information is not on the Intermediary’s books and records, Intermediary agrees to use reasonable efforts to: (i) promptly obtain and transmit the requested information; (ii) obtain assurances from the accountholder that the requested information will be

provided directly to the Fund Agent promptly; or (iii) if directed by the Fund Agent, block further purchases of Fund shares from such accountholder. In such instance, Intermediary agrees to inform the Fund Agent whether it plans to perform (i), (ii) or (iii). Responses required by this paragraph must be communicated in writing and in format mutually agreed upon by the parties. To the extent practicable, the format for any transaction information provided to the Fund Agent should be consistent with the NSCC Standardized Data Reporting Format.

17.1.3

Limitations on Use of Information. The Fund Agent agrees not to use the information received for marketing or any other similar purpose without the prior written consent of the Intermediary.

17.2.

Agreement to Restrict Trading. Intermediary agrees to execute written instructions from the Fund Agent to restrict or prohibit further purchases or exchanges of Fund shares by a Shareholder that has been identified by the Fund Agent as having engaged in transactions of the Funds’ shares (directly or indirectly through the Intermediary’s account) that violate policies established by the Funds for the purposes of eliminating or reducing any dilution of the value of the outstanding shares issued by the Funds.

17.2.1

Form of Instructions. Instructions must include the TIN, if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include any equivalent identifying number of the Shareholder(s) or account(s) or other agreed upon information to which the instruction relates.

17.2.2

Timing of Response. Intermediary agrees to execute instructions as soon as reasonably practicable, but not later than five business days after receipt of the instructions by the Intermediary.

17.2.3

Confirmation by Intermediary. Intermediary must provide written confirmation to the Fund Agent that instructions have been executed. Intermediary agrees to provide confirmation as soon as reasonably practicable, but not later than ten business days after the instructions have been executed.

17.3

Definitions. For purposes of this paragraph:

17.3.1

The term “Funds” includes the fund’s principal underwriter and transfer agent. The term not does include any “excepted funds” as defined in SEC Rule 22c-2(b) under the Investment Company Act of 1940.

17.3.2

The term “Shares” means the interests of Shareholders corresponding to the redeemable securities of record issued by the Fund under the Investment Company Act of 1940 that are held by the Intermediary.

17.3.3

The term “Shareholder” means the beneficial owner of Shares, whether the Shares are held directly or by the Intermediary in nominee name or, if applicable, the Plan participant notwithstanding that the Plan may be deemed to be the beneficial owner of Shares.

18.

Either party may terminate this agreement for any reason by written or electronic notice to the other party which termination shall become effective fifteen (15) days after the date of mailing or electronically transmitting such notice to the other party. We may also terminate this agreement for cause or as a result of a violation by you, as determined by us in our discretion, of any of the provisions of this Agreement, said termination to be effective on the date of mailing written or electronic notice to you of the same. Without limiting the generality of the foregoing, your own expulsion from the FINRA will automatically terminate this Agreement without notice. Your suspension from the FINRA or violation of applicable state or Federal laws or rules and regulations of applicable regulatory agencies will terminate this Agreement effective upon the date of our mailing written notice or transmitting electronic notice to you of such termination. Our failure to terminate this Agreement for any cause shall not constitute a waiver of our right to so terminate at a later date.

19.	All communications and notices to you or us shall be sent to the addresses set forth at the beginning of this Agreement or to such other address as may be specified in writing from time to time.

20.

VPD agrees to comply with all laws, rules, regulations, and ordinances relating to privacy, confidentiality, security, data security, and the handling of customer information which may from time to time be established. VPD agrees not to disclose or use any consumer nonpublic personal information (including nonpublic personal financial information and nonpublic personal health information), which may be supplied by you to VPD in performance under this Agreement other than to: a) carry out the purpose for which the information was provided; and b) to use or disclose the information as otherwise permitted or required by law. You agree to comply with all laws, rules, regulations, and ordinances relating to privacy, confidentiality, security, data security, and the handling of

customer information which may from time to time be established. You agree not to disclose or use any consumer nonpublic personal information (including nonpublic personal financial information and nonpublic personal health information), which may be supplied by VPD to you in performance under this Agreement other than to: a) carry out the purpose for which the information was provided; and b) to use or disclose the information as otherwise permitted or required by law. This provision will survive and continue in full force and effect after the termination of this Agreement.

21.

This agreement shall become effective upon the date of its acceptance by us as set forth herein. This agreement may be amended by VPD from time to time. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Connecticut. This agreement is not assignable or transferable, except that we may assign or transfer this agreement to any successor distributor of the Shares described herein.


ACCEPTED ON BEHALF OF		ACCEPTED ON BEHALF OF

VP DISTRIBUTORS, LLC
		Name of Dealer Firm

Date		Date

By		By

Name	Jeffery T. Cerutti	Print Name

Title	President	Print Title

		FINRA CRD Number

VPD 80 (9/6/12)

LOGO

Virtus Mutual Funds Sales Agreement

Amended Annex A December 2012

VP Distributors, LLC

Virtus Mutual Funds and Available Share Classes


ALTERNATIVES		FIXED INCOME
Virtus Alternatives Diversifier Fund	A C I	Virtus Bond Fund	A C I
Virtus Dynamic AlphaSector ^TM Fund	A C I	Virtus CA Tax-Exempt Bond Fund	A I
Virtus Global Commodities Stock Fund	A C I	Virtus Disciplined Select Bond Fund	A C I
Virtus Global Dividend Fund	A C I	Virtus Emerging Markets Debt Fund	A C I
Virtus Global Real Estate Securities Fund	A C I	Virtus High Yield Fund	A C I
Virtus International Real Estate Securities Fund	A C I	Virtus High Yield Income Fund	A C I
Virtus Real Estate Securities Fund	A C I	Virtus Insight Government Money Market Fund	A I
		Virtus Insight Money Market Fund	A I
ASSET ALLOCATION		Virtus Insight Tax-Exempt Money Market Fund	A I
Virtus Allocator Premium AlphaSector ^TM Fund	A C I	Virtus Low Duration Income Fund	A C I
Virtus Balanced Fund	A C	Virtus Multi-Sector Fixed Income Fund	A C I
Virtus Herzfeld Fund	A C I	Virtus Multi-Sector Short Term Bond Fund	A C I T
Virtus Tactical Allocation Fund	A C	Virtus Senior Floating Rate Fund	A C I
		Virtus Tax-Exempt Bond Fund	A C I
EQUITY
Virtus AlphaSector ^TM Rotation Fund	A C I	INTERNATIONAL/GLOBAL
Virtus Disciplined Equity Style Fund	A C I
Virtus Growth & Income Fund	A C I	Virtus Disciplined Select Country Fund	A C I
Virtus Mid-Cap Core Fund	A C I	Virtus Emerging Markets Equity Income Fund	A C I
Virtus Mid-Cap Growth Fund	A C I	Virtus Emerging Market Opportunities Fund	A C I
Virtus Mid-Cap Value Fund	A C I	Virtus Foreign Opportunities Fund	A C I
Virtus Premium AlphaSector ^TM Fund	A C I	Virtus Global Opportunities Fund	A C I
Virtus Quality Large-Cap Value Fund	A C I	Virtus Global Premium AlphaSector ^TM Fund	A C I
Virtus Quality Small-Cap Fund	A C I	Virtus Greater Asia ex Japan Opportunities Fund	A C I
Virtus Small-Cap Core Fund	A C I	Virtus Greater European Opportunities Fund	A C I
Virtus Small-Cap Sustainable Growth Fund	A C I	Virtus International Equity Fund	A C I
Virtus Strategic Growth Fund	A C I	Virtus International Small-Cap Fund	A C I
Virtus Value Equity Fund	A C I
Virtus Wealth Masters Fund	A C I

VP Distributors, LLC 100 Pearl Street, Hartford, CT 06103


Marketing: (800) 243-4361		Customer Service: (800) 243-1574		www.Virtus.com

Applicable waivers of Class A sales charges and Class B and C contingent deferred sales charges are described in the prospectus.

Class A Shares


	Equity, Asset Allocation, International/Global, Alternative Funds:						Bond, High Yield, Multi-Sector Fixed Income, and High Yield Income Funds:

Amount of Transaction Plus Applicable Rights of Accumulation:	Sales Charge As Percentage of Offering Price			Dealer Discount or Agency Fee As Percentage of Offering Price			Sales Charge As Percentage of Offering Price			Dealer Discount or Agency Fee As Percentage of Offering Price
Less than $50,000		5.75	%		5.00	%		3.75	%		3.25	%
$50,000 but under $100,000		4.75			4.25			3.50			3.00
$100,000 but under $250,000		3.75			3.25			3.25			2.75
$250,000 but under $500,000		2.75			2.25			2.25			2.00
$500,000 but under $1,000,000		2.00			1.75			1.75			1.50
$1,000,000 or more		None			None			None			None

	Tax-Exempt Bond, CA Tax-Exempt Bond, and Senior Floating Rate Funds:						Multi-Sector Short Term Bond Fund and Low Duration Income Fund:

Amount of Transaction Plus Applicable Rights of Accumulation:	Sales Charge As Percentage of Offering Price			Dealer Discount or Agency Fee As Percentage of Offering Price			Sales Charge As Percentage of Offering Price			Dealer Discount or Agency Fee As Percentage of Offering Price
Less than $50,000		2.75	%		2.25	%		2.25	%		2.00	%
$50,000 but under $100,000		2.25			2.00			1.25			1.00
$100,000 but under $250,000		1.75			1.50			1.00			1.00
$250,000 but under $500,000		1.25			1.00			1.00			1.00
$500,000 but under $1,000,000		1.00			1.00			0.75			0.75
$1,000,000 or more		None			None			None			None

There is no Class A sales charge for the Virtus Money Market Funds.

Distribution Fee: 0.10% For distribution services with respect to the Virtus Insight Money Market Fund, Virtus Insight Government Money Market Fund and the Virtus Insight Tax-Exempt Money Market Fund, VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.10% annually, based on the average daily net asset value of such Funds sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. Dealers must have an aggregate value of $50,000 in each Fund Class to qualify for payment in that Fund Class. See the last page of this Annex A for Terms and Conditions for Service and Distribution Fees.

Service Fee: 0.25% For providing shareholder services such as responding to shareholder inquiries; processing redemptions; changing dividend options, account designations, and addresses; transmitting proxy statements, annual reports, prospectuses and other correspondence from the Funds to shareholders; and providing such other information and assistance to shareholders as may be reasonably requested by such shareholders, VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.25% annually. The Service Fee is based on the average daily net asset value of Class A shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. Dealers must have an aggregate value of $50,000 or more in a Fund Class to qualify for payment in that Fund Class. The Service Fee for shares on which a Finder’s Fee has been paid will commence in the thirteenth month following purchase of Class A shares. See the last page of this Annex A for Terms and Conditions for Service and Distribution Fees.

Finder’s Fee and CDSC Applicable to AlphaSector Rotation and Fixed Income Funds (excluding Money Market Funds): VPD 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. Purchases 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 contingent deferred sales charge of 0.50% may apply on certain redemptions made within 18 months following purchases of Class A shares on which a Finder’s Fee has been paid to a dealer. The 18 month period begins on the last day of the month preceding the month in which the purchase was made.

Finder’s Fee and CDSC Applicable to Equity, Asset Allocation, International/Global, and Alternative Funds Class A Shares: (excluding AlphaSector Rotation Fund) VPD 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 $3,000,0001 to $10,000,000 and 0.25% on amounts greater than $10,000,000. Purchases 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 contingent deferred sales charge of 1% may apply on certain redemptions made within 18 months following purchases of Class A shares on which a Finder’s Fee has been paid to a dealer. The 18 month period begins on the last day of the month preceding the month in which the purchase was made.

Class B Shares

As of December 1, 2009, Class B shares of the Virtus Mutual Funds are no longer available for purchase by new or existing shareholders, except for the reinvestment of dividends or capital gains distributions into existing Class B share accounts, and for exchanges from existing Class B share accounts to other Virtus Mutual Funds with Class B shares.


	CDSC (Except Virtus Multi-Sector Short Term Bond Fund and Virtus Dynamic AlphaSector Fund)			CDSC Virtus Multi-Sector Short Term Bond Fund			CDSC Virtus Dynamic Alphasector Fund

Years since Each Purchase:	Contingent Deferred Sales Charge:			Contingent Deferred Sales Charge:			Contingent Deferred Sales Charge
First		5.0	%		2.0	%		5.0	%
Second		4.0			1.5			4.0
Third		3.0			1.0			3.0
Fourth		2.0			0.0			3.0
Fifth		2.0			0.0			2.0
Sixth		0.0			0.0			1.0

Dealers maintaining omnibus accounts, upon redemption of a customer account within the time frames specified above, shall charge such customer account the appropriate contingent deferred sales charge as indicated and shall forward the proceeds to VPD.

Service Fee: 0.25% For providing shareholder services such as responding to shareholder inquiries; processing redemptions; changing dividend options, account designations, and addresses; transmitting proxy statements, annual reports, prospectuses and other correspondence from the Funds to shareholders; and providing such other information and assistance to shareholders as may be reasonably requested by such shareholders, VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.25% annually, based on the average daily net asset value of Class B shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. Dealers must have an aggregate value of $50,000 or more in a Fund Class to qualify for payment in that Fund Class. The Class B Service Fee is paid beginning in the 13 ^th month following each purchase. See the last page of this Annex A for Terms and Conditions for Service and Distribution Fees.

Class C Shares

Sales Commission:

1% for all Class C Funds except Virtus Multi-Sector Short Term Bond Fund

0% for Virtus Multi-Sector Short Term Bond Fund

For exchanges from Virtus Multi-Sector Short Term Bond Fund Class C to other Class C shares, the dealer will receive 1% sales commission on the exchanged amount.

CDSC: 1% for all Class C Funds, except Virtus Dynamic AlphaSector Fund (1.25% CDSC) and Virtus Multi-Sector Short Term Bond Fund (no CDSC). Dealers maintaining omnibus accounts, upon redemption of a customer account within the time frames specified below, shall charge such customer account the appropriate contingent deferred sales charge as indicated and shall forward the proceeds to VPD. The CDSC on Class C shares is 1% for one year from each purchase.

Distribution Fee: 0.25%—0.75% VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.25% annually for Virtus Multi-Sector Short Term Bond Fund, 0.70% for the Virtus Dynamic AlphaSector Fund, and 0.75% annually for all other Class C Funds, based on the average daily net asset value of Class C shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. The Class C Trail Fee is paid beginning in the 13 ^th month following each purchase. There is no hold for the Class C Trail Fee for the Virtus Multi-Sector Short Term Bond Fund. See the last page of this Annex A for Terms and Conditions for Service and Distribution Fees.

Service Fee: 0.25% For providing shareholder services such as responding to shareholder inquiries; processing redemptions; changing dividend options, account designations, and addresses; transmitting proxy statements, annual reports, prospectuses and other correspondence from the Funds to shareholders; and providing such other information and assistance to shareholders as may be reasonably requested by such shareholders, VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.25% annually, based on the average daily net asset value of Class C shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. The Class C Service Fee is paid beginning in the 13 ^th month following each purchase. There is no hold for the Class C Service Fee for the Virtus Multi-Sector Short Term Bond Fund. See the last page of this Annex A for Terms and Conditions for Service and Distribution Fees.

Class I Shares

There is no dealer compensation payable on Class I shares.

Class T Shares – Virtus Multi-Sector Short Term Bond Fund only

Dealer Concession: 1%

CDSC: 1% for one year from the date of each purchase.

Service Fee: 0.25% For providing shareholder services such as responding to shareholder inquiries; processing redemptions; changing dividend options, account designations, and addresses; transmitting proxy statements, annual reports, prospectuses and other correspondence from the Funds to shareholders; and providing such other information and assistance to shareholders as may be reasonably requested by such shareholders, VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.25% annually, based on the average daily net asset value of Class T shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. The Class T Service Fee is paid beginning in the 13 ^th month following each purchase. See below for Terms and Conditions for Service and Distribution Fees.

Distribution Fee: 0.75% VPD intends to pay a quarterly fee to qualifying dealers at the equivalent of 0.75% annually, based on the average daily net asset value of Class T shares sold by such dealers and remaining on the Funds’ books during the period in which the fee is calculated. The Class T Distribution Fee is paid beginning in the 13 ^th month following each purchase. See below for Terms and Conditions for Service and Distribution Fees.

Terms and Conditions for Service and Distribution Fees – All Share Classes

Applicable Service and Distribution Fees are paid pursuant to one or more distribution and/or service plans (“Plan”) adopted by certain of the Funds pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the “Act”). Payment of these fees will automatically terminate in the event such Plan terminates or is not continued or in the event that this Agreement terminates, is assigned or ceases to remain in effect. In addition, these fees may be terminated at any time, without the payment of any penalty, by vote of a majority of the members of the Funds’ Board of Trustees who are not interested persons of the Funds and have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan, or by vote of a majority of the outstanding voting securities of any Fund or Funds on not more than sixty days’ written notice to any other party to the Agreement.

VPD80A (December 2012 rev.)

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Global Custody Agreement – New York – General – May 2012

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Table of contents


1.	INTENTION OF THE PARTIES; DEFINITIONS	1
1.1	Intention of the Parties	1
1.2	Definitions; Interpretation	1

2.	WHAT J.P. MORGAN IS REQUIRED TO DO	4
2.1	Set Up Accounts	4
2.2	Cash Account	5
2.3	Segregation of Assets; Nominee Name	5
2.4	Settlement of Transactions	6
2.5	Contractual Settlement Date Accounting	6
2.6	Actual Settlement Date Accounting	7
2.7	Income Collection (AutoCredit®)	7
2.8	Miscellaneous Administrative Duties	8
2.9	Corporate Actions	9
2.10	Class Action Litigation	9
2.11	Proxies	9
2.12	Statements of Account	10
2.13	Access to J.P. Morgan’s Records	10
2.14	Maintenance of Financial Assets at Subcustodian Locations	11
2.15	Tax Relief Services	11
2.16	Foreign Exchange Transactions	11
2.17	Notifications	12
2.18	Sealed Envelopes	12

3.	INSTRUCTIONS	12
3.1	Acting on Instructions; Method of Instruction and Unclear Instructions	12
3.2	Verification and Security Procedures	13
3.3	Instructions; Contrary to Law/Market Practice	13
3.4	Cut-Off Times	13
3.5	Electronic Access	13

4.	FEES, EXPENSES AND OTHER AMOUNTS OWING TO J.P. MORGAN	13
4.1	Fees and Expenses	13
4.2	Overdrafts	14
4.3	J.P. Morgan’s Right Over Securities; Set-off	14

5.	SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS	15
5.1	Appointment of Subcustodians; Use of Securities Depositories	15
5.2	Liability for Subcustodians	16

6.	ADDITIONAL PROVISIONS	16
6.1	Representations of the Customer and J.P. Morgan	16
6.2	The Customer is Liable to J.P. Morgan Even if it is Acting for Another Person	17
6.3	Special Settlement Services	17

Global Custody Agreement – New York – General – May 2012

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7.	WHEN J.P. MORGAN IS LIABLE TO THE CUSTOMER	17
7.1	Standard of Care; Liability	17
7.1	Standard of Care; Liability	17
7.2	Force Majeure	18
7.3	J.P. Morgan May Consult With Counsel	19
7.4	J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Result	19
7.5	Assets Held Outside J.P. Morgan’s Control	19
7.6	Ancillary services	19
7.7	Service Locations	20

8.	TAXATION	20
8.1	Tax Obligations	20
8.2	Tax Relief Services	21

9.	TERMINATION	21
9.1	Termination	21
9.2	Exit Procedure	22

10.	MISCELLANEOUS	22
10.1	Notifications	22
10.2	Successors and Assigns	23
10.3	Entire Agreement	23
10.4	Information Concerning Deposits at J.P. Morgan’s Non-US Branch	23
10.5	Insurance	23
10.6	Security Holding Disclosure	23
10.7	USA PATRIOT Act Disclosure	23
10.8	Governing Law and Jurisdiction	24
10.9	Severability; Waiver; and Survival	24
10.10	Confidentiality	24
10.11	Counterparts	25
10.12	No Third Party Beneficiaries	25
SCHEDULE A – List of Customers as of [Date]		27
SCHEDULE 1 List of Subcustodians and Markets Used by J.P. Morgan		28
SCHEDULE 2 Form of Board Resolution		29
SCHEDULE 3 J.P. Morgan Worldwide Securities Services Custody Restricted Markets Schedule		30
ANNEX A Electronic Access		34

Global Custody Agreement – New York – General – May 2012


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GLOBAL CUSTODY AGREEMENT

This Agreement, dated March 1, 2013, is between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (“J.P. Morgan”), with a place of business at One Chase Manhattan Plaza, 19th Floor, New York, New York 10005; and each trust listed on Schedule A attached hereto (each a “Customer”), each with a place of business at 101 Munson Street, Greenfield, Massachusetts 01301.

1.	INTENTION OF THE PARTIES; DEFINITIONS

1.1

Intention of the Parties

(a)

This Agreement sets out the terms on which J.P. Morgan will provide custodial, settlement and other associated services to the Customer. J.P. Morgan will be responsible for the performance of only those duties expressly set forth in this Agreement.

(b)

Investing in Financial Assets and cash in foreign jurisdictions may involve risks of loss or other burdens and costs. The Customer acknowledges that J.P. Morgan is not providing any legal, tax or investment advice in providing the services under this Agreement and will not be liable for any losses resulting from Country Risk.

(c)

The terms and conditions of this Agreement are applicable only to the services which are specified in this Agreement.

1.2

Definitions; Interpretation

(a)

As used herein, the following terms have the meaning hereinafter stated.

“Account” has the meaning set forth in Section 2.1 of this Agreement.

“Affiliate” means an entity controlling, controlled by, or under common control with, J.P. Morgan or the Customer, as the case may be.

“Affiliated Subcustodian Bank ” means a Subcustodian that is both a subsidiary of JPMorgan Chase & Co. and either (i) a bank chartered or incorporated in the United States of America or (ii) a branch or subsidiary of such a bank.

“Applicable Law” means any applicable statute, treaty, rule, regulation or common law and any applicable decree, injunction, judgment, order, formal interpretation or ruling issued by a court or governmental entity.

“Authorized Person” means any person who has been designated by written notice from the Customer in the form as provided by J.P. Morgan (or by written notice in the form as provided by J.P. Morgan from any agent designated by the Customer, including, without limitation, an investment manager) to act on behalf of the Customer under this Agreement and any person who has been given an access code by a security administrator appointed by the Customer which allows the provision of Instructions. Such persons will continue to be Authorized Persons until such time as J.P. Morgan receives and has had reasonable time to act upon Instructions from the Customer (or its agent) that any such person is no longer an Authorized Person.

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“Cash Account” has the meaning set forth in Section 2.1(a)(ii).

“Confidential Information” means and includes all non public information concerning the Customer or the Accounts which J.P. Morgan receives in the course of providing services under this Agreement. Nevertheless, the term Confidential Information shall not include information which is or becomes available to the general public by means other than J.P. Morgan’s breach of the terms of this Agreement or information which J.P. Morgan obtains on a non—confidential basis from a person who is not known to be subject to any obligation of confidence to any person with respect to that information.

“Corporate Action” means any subscription right, bonus issue, stock repurchase plan, redemption, exchange, tender offer, or similar matter with respect to a Financial Asset in the Securities Account that requires discretionary action by the beneficial owner of the Security, but does not include rights with respect to class action litigation or proxy voting.

“Country Risk” means the risk of investing or holding assets in a particular country or market, including, but not limited to, risks arising from nationalization, expropriation or other governmental actions; the country’s financial infrastructure, including prevailing custody, tax and settlement practices; laws applicable to the safekeeping and recovery of Financial Assets and cash held in custody; the regulation of the banking and securities industries, including changes in market rules; currency restrictions, devaluations or fluctuations; and market conditions affecting the orderly execution of securities transactions or the value of assets.

“Entitlement Holder” means the person named on the records of a Securities Intermediary as the person having a Securities Entitlement against the Securities Intermediary.

“ Financial Asset” means a Security and refers, as the context requires, either to the asset itself or to the means by which a person’s claim to it is evidenced, including a Security, a security certificate, or a Securities Entitlement. “Financial Asset” does not include cash.

“Instruction” means an instruction that has been verified in accordance with a Security Procedure or, if no Security Procedure is applicable, which J.P. Morgan believes in good faith to have been given by an Authorized Person.

“J.P. Morgan Indemnitees ” means J.P. Morgan, its Affiliates, its Subcustodians, and their respective nominees, directors, officers, employees and agents.

“J.P. Morgan’s London Branch ” means the London branch office of JPMorgan Chase Bank, N.A.

“Liabilities” means any liabilities, losses, claims, costs, damages, penalties, fines, obligations, taxes (other than taxes based solely on J.P. Morgan’s income), or expenses of any kind whatsoever (whether actual or contingent and including, without limitation, reasonable attorneys’, accountants’, consultants’ or experts’ fees and disbursements and, where relevant, any and all amounts owing to J.P. Morgan by the Customer’s counterparty in connection with collateral/control accounts established at J.P. Morgan pursuant to the Customer’s Instruction) outstanding from time to time.

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“Sealed Envelope” means a sealed envelope which the Customer requests J.P. Morgan to hold in custody. Nothing in this definition shall obligate J.P. Morgan to accept any such Sealed Envelope.

“Securities” means shares, stocks, debentures, bonds, notes or other like obligations, whether issued in certificated or uncertificated form, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same that are commonly traded or dealt in on securities exchanges or financial markets and any other property as may be acceptable to J.P. Morgan for the Securities Account.

“Securities Account” means each Securities custody account on J.P. Morgan’s records to which Financial Assets are or may be credited under this Agreement.

“Securities Depository” means any securities depository, dematerialized book entry system or similar system for the central handling of Securities, whether or not acting in that capacity.

“Securities Entitlement” means the rights and property interests of an Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform Commercial Code of the State of New York, as the same may be amended from time to time.

“Securities Intermediary” means J.P. Morgan, a Subcustodian, a Securities Depository, and any other financial institution which in the ordinary course of business maintains Securities custody accounts for others and acts in that capacity.

“Security Procedure ” means a security procedure to be followed by the Customer upon the issuance of an Instruction and/or by J.P. Morgan upon the receipt of an Instruction, so as to enable J.P. Morgan to verify that such Instruction is authorized, as set forth in service level documentation in effect from time to time between the parties with respect to the services set forth in this Agreement, or as otherwise agreed in writing by the parties. A Security Procedure may, without limitation, involve the use of algorithms, codes, passwords, encryption or telephone call backs, and may be updated by J.P. Morgan from time to time upon notice to the Customer. The Customer acknowledges that the Security Procedure is designed to verify the authenticity of, and not detect errors in, Instructions. For the avoidance of doubt, the parties agree that a SWIFT message issued in the name of the Customer through any third party utility agreed upon by the parties as being a method for providing Instructions and authenticated in accordance with that utility’s customary procedures, shall be deemed to be an authorized Instruction.

“Subcustodian” means any of the subcustodians appointed by J.P. Morgan from time to time to hold Securities and act on its behalf in different jurisdictions (and being at the date of this Agreement the entities listed in Schedule 1) and includes any Affiliated Subcustodian Bank.

(b)

Headings are for reference and convenience only and are not intended to affect interpretation.

(c)

References to Articles and Sections are to Articles and Sections of this Agreement and references to sub-sections and paragraphs are to sub-sections of the Sections and paragraphs of the sub-sections in which they appear.

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(d)

Unless the context requires otherwise, references in this Agreement to “persons” shall include legal as well as natural entities; references importing the singular shall include the plural (and vice versa); use of the generic masculine pronoun shall include the feminine; use of the term “including” shall be deemed to mean “including but not limited to,” and references to appendices and numbered sections shall be to such addenda and provisions herein; all such addenda are hereby incorporated in this Agreement by reference.

2.	WHAT J.P. MORGAN IS REQUIRED TO DO

2.1

Set Up Accounts

(a)

J.P. Morgan will establish and maintain the following accounts (“Accounts”):

(i)

one or more Securities Accounts in the name of the Customer (or in another name requested by the Customer that is acceptable to J.P. Morgan) for Financial Assets, which may be held by J.P. Morgan or a Subcustodian or a Securities Depository for J.P. Morgan on behalf of the Customer, including as an Entitlement Holder; and

(ii)

one or more accounts in the name of the Customer (or in another name requested by the Customer that is acceptable to J.P. Morgan) (“Cash Account”) for any and all cash in any currency received by or on behalf of J.P. Morgan for the account of the Customer.

Notwithstanding paragraph 2.1(a)(ii), cash held in respect of those markets where the Customer is required to have a cash account in its own name held directly with the relevant Subcustodian or Securities Depository will be held in that manner and will not be part of the Cash Account.

(b)

At the request of the Customer, additional Accounts may be opened in the future, and such additional Accounts shall be subject to the terms of this Agreement.

(c)

In the event that the Customer requests the opening of any additional Account for the purpose of holding collateral pledged by the Customer to a securities exchange, clearing corporation, or other central counterparty (a “Counterparty”) to secure trading activity by the Customer, or the pledge to a Counterparty of cash or individual Securities held in an Account, that Account (or the pledged cash or Securities) shall be subject to the collateral arrangements in effect between J.P. Morgan and the Counterparty in addition to the terms of this Agreement.

(d)

J.P. Morgan’s obligation to open Accounts pursuant to Section 2.1(a) is conditional upon J.P. Morgan receiving such of the following documents as J.P. Morgan may require:

(i)

a certified copy of the Customer’s constitutional documents as currently in force;

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(ii)

evidence reasonably satisfactory to J.P. Morgan of the due authorization and execution of this Agreement by the Customer (for example by a certified copy of a resolution of the Customer’s board of directors or equivalent governing body, substantially in the form set out in Schedule 2);

(iii)

J.P. Morgan’s standard form fund manager mandate completed by the fund manager designated by the Customer; and

(iv)

in the case of any Account opened in a name not that of the Customer, documentation with respect to that name similar to that set forth in sub-sections (i) – (iii).

2.2

Cash Account

(a)

Any amount standing to the credit of the Cash Account will be either:

(i)

deposited during the period it is credited to the Accounts in one or more deposit accounts at J.P. Morgan’s head office or at one of its non-U.S. branch offices and will constitute a debt owing to the Customer by J.P. Morgan as a banker, provided that any cash so deposited with a non—U.S. branch office will be payable exclusively by that branch office in the applicable currency, subject to compliance with Applicable Law, including, without limitation, any restrictions on transactions in the applicable currency imposed by the country of the applicable currency; or

(ii)

placed by J.P. Morgan with a bank or other financial institution in the country in which the applicable currency is issued, in which case the deposit will constitute a debt owing to the Customer by that bank or other financial institution and not J.P. Morgan, payable exclusively in the applicable currency at that bank or financial institution.

(b)

Any amounts credited by J.P. Morgan to the Cash Account on the basis of a notice or an interim credit from a third party, may be reversed if J.P. Morgan does not receive final payment in a timely manner. J.P. Morgan will notify the Customer promptly of any such reversal.

2.3

Segregation of Assets; Nominee Name

(a)

J.P. Morgan will identify in its books that Financial Assets credited to the Customer’s Securities Account belong to the Customer (except as otherwise may be agreed by J.P. Morgan and the Customer).

(b)

To the extent permitted by Applicable Law or market practice, J.P. Morgan will require each Subcustodian to identify in its own books that Financial Assets held at such Subcustodian by J.P. Morgan on behalf of its customers belong to customers of J.P. Morgan, such that it is readily apparent that the Financial Assets do not belong to J.P. Morgan or the Subcustodian.

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(c)

J.P. Morgan is authorized, in its discretion:

(i)

to hold in bearer form, such Financial Assets as are customarily held in bearer form or are delivered to J.P. Morgan or its Subcustodian in bearer form;

(ii)

to hold Securities in or deposit Securities with any Securities Depository;

(iii)

to hold Securities in omnibus accounts on a fungible basis and to accept delivery of Securities of the same class and denomination as those deposited with J.P. Morgan or its Subcustodian;

(iv)

to register in the name of the Customer, J.P. Morgan, a Subcustodian, a Securities Depository, or their respective nominees, such Financial Assets as are customarily held in registered form; and

(v)

to decline to accept any asset or property which it deems to be unsuitable or inconsistent with its custodial operations.

2.4

Settlement of Transactions

Subject to Article 3 and Section 4.2 of this Agreement, J.P. Morgan will act in accordance with Instructions with respect to settlement of transactions. Settlement will be conducted in accordance with prevailing standards of the market in which the transaction occurs. Without limiting the generality of the foregoing, the Customer authorizes J.P. Morgan to deliver Securities or payment in accordance with applicable market practice in advance of receipt or settlement of consideration expected in connection with such delivery or payment, and the Customer acknowledges and agrees that such action alone will not of itself constitute negligence, fraud, or willful misconduct of J.P. Morgan, and the risk of loss arising from any such action will be borne by the Customer. In the case of the failure of the Customer’s counterparty (or other appropriate party) to deliver the expected consideration as agreed, J.P. Morgan will notify the Customer of such failure. If the Customer’s counterparty continues to fail to deliver the expected consideration, J.P. Morgan will provide information reasonably requested by the Customer that J.P. Morgan has in its possession to allow the Customer to enforce rights that the Customer has against the Customer’s counterparty, but neither J.P. Morgan nor its Subcustodians will be obliged to institute legal proceedings, file a proof of claim in any insolvency proceeding or take any similar action. J.P. Morgan agrees to consult with Customer and provide the Customer with such assistance as it determines is reasonable in the circumstances (at Customer’s expense) in the event that the Customer wishes to institute legal proceedings, file a proof of claim in any insolvency proceedings, or take any similar action in its own name.

2.5

Contractual Settlement Date Accounting

(a)

J.P. Morgan will effect book entries on a contractual settlement date accounting basis as described below with respect to the settlement for those Financial Assets and transactions as to which J.P. Morgan customarily offers contractual settlement date accounting. J.P. Morgan reserves the right to restrict in good faith the availability of contractual settlement date accounting for credit or operational reasons.

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(i)

Sales: On the settlement date for a sale, J.P. Morgan will credit the Cash Account with the proceeds of the sale and, if not already delivered, transfer the relevant Financial Assets to an account at J.P. Morgan pending settlement of the transaction.

(ii)

Purchases: On the settlement date for a purchase (or earlier, if market practice requires delivery of the purchase price before the settlement date), J.P. Morgan will debit the Cash Account for the settlement amount and credit a separate account at J.P. Morgan. J.P. Morgan will then post the Securities Account as awaiting receipt of the expected Financial Assets. The Customer will not be entitled to the delivery of Financial Assets until J.P. Morgan or a Subcustodian actually receives them.

Upon request, J.P. Morgan shall provide the Customer with a list of those markets for which it provides contractual settlement date accounting. J.P. Morgan may add markets to or remove markets from such list upon reasonable notice to the Customer.

(b)

J.P. Morgan may reverse any debit or credit made pursuant to Section 2.5(a) prior to a transaction’s actual settlement upon notice to the Customer in cases where J.P. Morgan reasonably believes that the transaction will not settle in the ordinary course within a reasonable time. The Customer will be responsible for any costs or Liabilities resulting from such reversal. The Customer acknowledges that the procedures described in Section 2.5 are of an administrative nature, and J.P. Morgan does not undertake to make loans and/or Financial Assets available to the Customer.

2.6

Actual Settlement Date Accounting

With respect to settlement of a transaction that is not posted to the Account on the contractual settlement date as referred to in Section 2.5, J.P. Morgan will post the transaction on the date on which the cash or Financial Assets received as consideration for the transaction is actually received and settled by J.P. Morgan.

2.7

Income Collection (AutoCredit®)

(a)

J.P. Morgan will monitor information publicly available in the applicable market about forthcoming income payments on the Financial Assets, and will promptly notify the Customer of such information.

(b)

J.P. Morgan will credit the Cash Account with income proceeds on Financial Assets on the anticipated payment date, net of any taxes that are withheld by J.P. Morgan or any third party (“AutoCredit”) for those Financial Assets and/or markets as to which J.P. Morgan customarily

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offers an AutoCredit service. J.P. Morgan reserves the right to restrict in good faith the availability of AutoCredit for credit or operational reasons. Upon request, J.P. Morgan shall provide the Customer with a list of AutoCredit eligible markets. J.P. Morgan may add markets to or remove markets from the list of AutoCredit markets upon notice to the Customer that is reasonable in the circumstances. J.P. Morgan may reverse AutoCredit credits upon oral or written notification to the Customer if J.P. Morgan believes that the corresponding payment will not be received by J.P. Morgan within a reasonable period or the credit was incorrect.

(c)

When the AutoCredit service is not available, income on Financial Assets, net of any taxes withheld by J.P. Morgan or any third party, will be credited only after actual receipt and reconciliation by J.P. Morgan.

(d)

J.P. Morgan will use reasonable efforts to contact appropriate parties to collect unpaid interest, dividends or redemption proceeds and notify the Customer of the late payment, but neither J.P. Morgan nor its Subcustodians will be obliged to file any formal notice of default, institute legal proceedings, file a proof of claim in any insolvency proceeding or take any similar action.

2.8

Miscellaneous Administrative Duties

(a)

Until J.P. Morgan receives Instructions to the contrary, J.P. Morgan will:

(i)

present all Financial Assets for which J.P. Morgan has received notice of a call for redemption or that have otherwise matured, and all income and interest coupons and other income items that call for payment upon presentation;

(ii)

execute in the name of the Customer such certificates as may be required to obtain payment in respect of Financial Assets; and

(iii) exchange interim or temporary documents of title held in the Securities Account for definitive documents of title.

(b)

In the event that, as a result of holding of Financial Assets in an omnibus account, the Customer receives fractional interests in Financial Assets arising out of a Corporate Action or class action litigation, J.P. Morgan will credit the Customer with the amount of cash it would have received had the Financial Assets not been held in an omnibus account, and the Customer shall relinquish to J.P. Morgan its interest in such fractional interests.

(c)

If some, but not all, of an outstanding class of Financial Assets is called for redemption, J.P. Morgan may allot the amount redeemed among the respective beneficial holders of such a class of Financial Assets on a pro rata basis or in a similar manner J.P. Morgan deems fair and equitable.

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(d)

J.P. Morgan reserves the right to reverse any transactions that are credited to the Accounts due to mis-postings and other such similar actions.

2.9

Corporate Actions

(a)

J.P. Morgan will act in accordance with local market practice to obtain information concerning Corporate Actions that is publicly available in the local market. J.P. Morgan also will review information obtained from sources to which it subscribes for information concerning such Corporate Actions. J.P. Morgan will promptly provide that information (or summaries that reflect the material points concerning the applicable Corporate Action) to the Customer or its Authorized Person.

(b)

J.P. Morgan will act in accordance with the Customer’s Instructions in relation to such Corporate Actions. If the Customer fails to provide J.P. Morgan with timely Instructions with respect to any Corporate Action, neither J.P. Morgan nor its Subcustodians or their respective nominees will take any action in relation to that Corporate Action, except as otherwise agreed in writing by J.P. Morgan and the Customer or as may be set forth by J.P. Morgan as a default action in the notification it provides under Section 2.9(a) with respect to that Corporate Action.

2.10

Class Action Litigation

Any notices received by J.P. Morgan’s corporate actions department about settled securities class action litigation that requires action by affected owners of the underlying Financial Assets will be promptly notified to the Customer if J.P. Morgan, using reasonable care and diligence in the circumstances, identifies that the Customer was a shareholder and held the relevant Financial Assets in custody with J.P. Morgan at the relevant time. J.P. Morgan will not make filings in the name of the Customer in respect to such notifications except as otherwise agreed in writing between the Customer and J.P. Morgan. The services set forth in this Section 2.10 are available only in certain markets, details of which are available from J.P. Morgan on request.

2.11

Proxies

(a)

J.P. Morgan will monitor information distributed to holders of Financial Assets about upcoming shareholder meetings, promptly notify the Customer of such information and, subject to Section 2.11(c), act in accordance with the Customer’s Instructions in relation to such meetings (the “Proxy Voting Service”).

(b)

The Proxy Voting Service is available only in certain markets, details of which are available from J.P. Morgan on request. Provision of the Proxy Voting Service is conditional upon receipt by J.P. Morgan of a duly completed enrolment form as well as additional documentation that may be required for certain markets.

(c)

The Proxy Voting Service does not include physical attendance at shareholder meetings. Requests for physical attendance at shareholder meetings can be made but they will be evaluated and agreed to by J.P. Morgan on a case by case basis.

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(d)

The Customer acknowledges that the provision of the Proxy Voting Service may be precluded or restricted under a variety of circumstances. These circumstances include, but are not limited to:

(i)

the Financial Assets being on loan or out for registration;

(ii)

the pendency of conversion or another corporate action;

(iii)

the Financial Assets being held in a margin or collateral account at J.P. Morgan or another bank or broker, or otherwise in a manner which affects voting;

(iv)

local market regulations or practices, or restrictions by the issuer; and

(v)

J.P. Morgan being required to vote all shares held for a particular issue for all of J.P. Morgan’s customers on a net basis (i.e., a net yes or no vote based on voting instructions received from all its customers). Where this is the case, J.P. Morgan will notify the Customer.

2.12

Statements of Account

(a)

J.P. Morgan will provide the Customer with electronic access to Account information (the “Information”) that will enable the Customer to generate or receive reports and statements of account for each Account, identifying cash and Financial Assets held in the Account as well as Account transactions. The Customer will review the Information and give J.P. Morgan written notice of (i) any suspected error or omission or (ii) the Customer’s inability to access any such Information. The Customer will provide J.P. Morgan such notice within a reasonable time after (x) the Information is made available to the Customer or (y) the Customer discovers that it is unable to access the Information, as the case may be.

(b)

The Customer acknowledges that information available to it electronically with respect to transactions posted after the close of the prior business day may not be accurate due to mis-postings, delays in updating Account records, and other causes. J.P. Morgan will not be liable for any loss or damage arising out of any such information accessed electronically that is subsequently updated or corrected by the close of business on the first business day after the original transaction was posted.

2.13

Access to J.P. Morgan’s Records

(a)

J.P. Morgan will allow the Customer’s auditors and independent public accountants such reasonable access to the records of J.P. Morgan relating to the Accounts as may be required in connection with their examination of books and records pertaining to the Customer’s affairs. Subject to restrictions under the relevant local law, J.P. Morgan shall

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direct any Subcustodian to permit the Customer’s auditors and independent public accountants, reasonable access to the records of any Subcustodian of Financial Assets held in the Securities Account as may be required in connection with such examination.

(b)

J.P. Morgan will, upon reasonable written notice, allow the Customer reasonable access during normal working hours to the records of J.P. Morgan relating to the Accounts. J.P. Morgan may impose reasonable restrictions on the number of individuals allowed access, the frequency and length of such access, and the scope of the records made available. The Customer shall reimburse J.P. Morgan for the reasonable cost of copying, collating and researching archived information.

2.14

Maintenance of Financial Assets at Subcustodian Locations

(a)

Unless Instructions require another location acceptable to J.P. Morgan, Financial Assets will be held in the country or jurisdiction in which their principal trading market is located, where such Financial Assets may be presented for payment, where such Financial Assets were acquired, or where such Financial Assets are located. J.P. Morgan reserves the right to refuse to accept delivery of Financial Assets or cash in countries and jurisdictions other than those referred to in Schedule 1 to this Agreement, as in effect from time to time. J.P. Morgan may modify Schedule 1 to this Agreement upon notice to the Customer.

(b)

J.P. Morgan reserves the right to restrict the services it provides in certain markets that are deemed by J.P. Morgan to be restricted markets from time to time. A current list of these markets, and a summary of the related restrictions, is set forth on Schedule 3. J.P. Morgan may update Schedule 3 from time to time upon notice to the Customer.

2.15

Tax Relief Services

J.P. Morgan will provide tax relief services as provided in Section 8.2.

2.16

Foreign Exchange Transactions

To facilitate the administration of the Customer’s trading and investment activity, J.P. Morgan may, but will not be obliged to, enter into spot or forward foreign exchange contracts with the Customer, or an Authorized Person, and may also provide foreign exchange contracts and facilities through its Affiliates or Subcustodians; provided that, subject to J.P. Morgan’s business consideration, J.P. Morgan will endeavor to enter into foreign exchange contracts as requested by Customer and such contracts will be in accordance with the terms as indicated in the J.P. Morgan Foreign Exchange Pricing Agreement with Customer which may be amended from time to time. In all cases where J.P. Morgan or its Affiliates or Subcustodians enter into foreign exchange contracts or facilities with the Customer, J.P. Morgan will not be executing or otherwise placing any foreign exchange transaction as the Customer’s agent, and the terms and conditions of such foreign exchange

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contracts or facilities (as the case may be) will apply to such transactions. With respect to the Customer’s foreign exchange contracts or facilities with J.P. Morgan, J.P. Morgan will be acting as the Customer’s principal counterparty on such foreign exchange contracts or facilities (as the case may be).

2.17

Notifications

If the Customer has agreed to access information concerning the Accounts through J.P. Morgan’s website, except as required in Section 10.1 of the Agreement, J.P. Morgan may make any notifications required under this Agreement by posting it on the website or by other electronic means acceptable to J.P. Morgan as may be reasonably requested in writing by Customer.

2.18

Sealed Envelopes

From time to time, at the Customer’s request, J.P. Morgan may agree to hold certain Sealed Envelopes in custody for the Customer. Notwithstanding anything in this Agreement to the contrary, J.P. Morgan’s sole responsibility with regards to Sealed Envelopes will be to hold them in J.P. Morgan’s or in a Subcustodian’s possession. J.P. Morgan shall not be responsible for verifying the content of any Sealed Envelope purported to contain assets or assessing the value, validity or transferability of any such assets (including the existence or value of any investments contained in any Sealed Envelope). With respect to Sealed Envelopes, neither J.P. Morgan nor its Subcustodians will be obligated to perform any service or action described in this Agreement, including, but not limited to, asset servicing, tax services, corporate actions, income or dividend collection, settlement services or class action litigation.

3.	INSTRUCTIONS

3.1

Acting on Instructions; Method of Instruction and Unclear Instructions

(a)

The Customer authorizes J.P. Morgan to accept, rely upon and/or act upon any Instructions received by it without inquiry. The Customer will indemnify the J.P. Morgan Indemnitees against, and hold each of them harmless from, any Liabilities that may be imposed on, incurred by, or asserted against the J.P. Morgan Indemnitees as a result of any action or omission taken in accordance with any Instruction.

(b)

To the extent possible, instructions to J.P. Morgan shall be sent via electronic instruction or trade information system acceptable to J.P. Morgan or via facsimile transmission. Where reasonably practicable, the Customer will use automated and electronic methods of sending Instructions.

(c)

J.P. Morgan shall promptly notify an Authorized Person if J.P. Morgan determines that an Instruction does not contain all information reasonably necessary for J.P. Morgan to carry out the Instruction. J.P. Morgan may decline to act upon an Instruction if it does not receive clarification or confirmation satisfactory to it. J.P. Morgan will not be liable for any loss arising from any reasonable delay in carrying out any such Instruction while it seeks information, clarification or confirmation or in declining to act upon any Instruction for which it does not receive clarification satisfactory to it.

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3.2

Verification and Security Procedures

(a)

J.P. Morgan and the Customer shall comply with any applicable Security Procedures with respect to the delivery or authentication of Instructions and shall ensure that any codes, passwords or similar devices are reasonably safeguarded.

(b)

Either party may record any of their telephone communications.

3.3

Instructions; Contrary to Law/Market Practice

J.P. Morgan need not act upon Instructions which it reasonably believes to be contrary to law, regulation or market practice, and J.P. Morgan shall be under no duty to investigate whether any Instructions comply with Applicable Law or market practice. In the event J.P. Morgan does not act upon such Instructions, J.P. Morgan will notify the Customer where reasonably practicable.

3.4

Cut-Off Times

J.P. Morgan has established cut-off times for receipt of Instructions, which will be made available to the Customer. If J.P. Morgan receives an Instruction after its established cut-off time, J.P. Morgan will attempt to act upon the Instruction on the day requested if J.P. Morgan deems it practicable to do so or otherwise as soon as practicable after that day.

3.5

Electronic Access

Access by the Customer to certain applications or products of J.P. Morgan via J.P. Morgan’s web site or otherwise shall be governed by this Agreement and the terms and conditions set forth in Annex A.

4.	FEES, EXPENSES AND OTHER AMOUNTS OWING TO J.P. MORGAN

4.1

Fees and Expenses

The Customer will pay J.P. Morgan for its services under this Agreement such fees as may be agreed upon in writing from time to time, together with J.P. Morgan’s reasonable out-of-pocket or incidental expenses, including, but not limited to, legal fees and tax or related fees incidental to processing charged directly or indirectly by governmental authorities, issuers, or their agents. Invoices will be payable within thirty (30) days of the date of the invoice. If the Customer disputes an invoice it shall nevertheless pay on or before the date that payment is due such portion of the invoice that is not subject to a bona fide dispute. J.P. Morgan may deduct amounts invoiced from the Cash Account except to the extent that the Customer has objected to the invoice within thirty (30) days of the date of the invoice (or such other period as the parties may agree in writing). Without prejudice to J.P. Morgan’s other rights, J.P. Morgan reserves the right to charge interest on overdue amounts from the due date until actual payment at such rate as J.P. Morgan customarily charges for similar overdue amounts.

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4.2

Overdrafts

If a debit to any currency in the Cash Account results in a debit balance, then J.P. Morgan may, in its discretion, (i) advance an amount equal to the overdraft, (ii) refuse to settle in whole or in part the transaction causing such debit balance, or (iii) if any such transaction is posted to the Securities Account, reverse any such posting. If J.P. Morgan elects to make such an advance, the advance will be deemed a loan to the Customer, payable on demand, bearing interest at the applicable rate charged by J.P. Morgan from time to time, for such overdrafts, from the date of such advance to the date of payment (including after the date any judgment may be entered against the Customer with respect to any overdraft) and otherwise on the terms on which J.P. Morgan makes similar overdrafts available from time to time. No prior action or course of dealing on J.P. Morgan’s part with respect to the settlement of transactions on the Customer’s behalf will be asserted by the Customer against J.P. Morgan for J.P. Morgan’s refusal to make advances to the Cash Account or to settle any transaction for which the Customer does not have sufficient available funds in the applicable currency in the Account. The Customer shall be deemed to be in default with respect to any such advance upon the occurrence of any event of the type specified in section 365(e)(1) of the U.S. Bankruptcy Code, as amended from time to time.

4.3

J.P. Morgan’s Right Over Securities; Set-off

(a)

Without prejudice to J.P. Morgan’s rights under Applicable Law, J.P. Morgan and its Affiliates shall have, and the Customer grants to J.P. Morgan a first priority, perfected and continuing security interest in and a lien on all cash, Financial Assets and any other property of every kind that are credited to the Account or otherwise held for the Customer by J.P. Morgan (“ Account Assets ”) as security for any and all Liabilities of the Customer to J.P. Morgan or any of its Affiliates, and J.P. Morgan shall be entitled without notice to the Customer, to withhold delivery of such Account Assets, sell or otherwise realize any of such Account Assets and to apply the proceeds and any other monies credited to the Cash Account in satisfaction of such Liabilities; provided, where practicable, J.P. Morgan will endeavor to apprise the Customer prior to any action being initiated in connection with the foregoing. For this purpose, J.P. Morgan may make such currency conversions as may be necessary at its then current rates for the sale and purchase of relevant currencies.

(b)

Without prejudice to J.P. Morgan’s rights under Applicable Law, J.P. Morgan may set off against any Liabilities of the Customer to J.P. Morgan or any of its Affiliates, any amount in any currency (i) standing to the credit of any of the Customer’s accounts (whether deposit or otherwise) with any J.P. Morgan branch or office or with any Affiliate of J.P. Morgan or (ii) owed to the Customer by any J.P. Morgan branch or office or by any Affiliate of J.P. Morgan. For this purpose, J.P. Morgan shall be entitled to accelerate the maturity of any fixed term deposits and to effect such currency conversions as may be necessary at its current rates for the sale and purchase of the relevant currencies.

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5.	SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS

5.1

Appointment of Subcustodians; Use of Securities Depositories

(a)

J.P. Morgan is authorized under this Agreement to act through and hold the Customer’s Financial Assets with Subcustodians. J.P. Morgan will use reasonable care in the selection, monitoring and continued appointment of such Subcustodians. In addition, J.P. Morgan and each Subcustodian may deposit Securities with, and hold Securities in any Securities Depository on such terms as such Securities Depository customarily operates and the Customer will provide J.P. Morgan with such documentation or acknowledgements that J.P. Morgan may require to hold the Financial Assets in such Securities Depository.

(b)

Unless required otherwise by Applicable law in the relevant market, any agreement J.P. Morgan enters into with a Subcustodian for holding J.P. Morgan’s customers’ assets will provide that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors except a claim for payment for their safe custody or administration, or, in the case of cash deposits, except for liens or rights in favor of creditors of the Subcustodian arising under bankruptcy, insolvency or similar law, and that the beneficial ownership thereof will be freely transferable without the payment of money or value other than for safe custody or administration. J.P. Morgan shall be responsible for all claims for payment of fees for safe custody or administration so that no Subcustodian exercises any claim for such payment against the Customer’s assets. Where a Subcustodian deposits Securities with a Securities Depository, J.P. Morgan will cause the Subcustodian to identify on its records that the Securities deposited by the Subcustodian at such Securities Depository belong to J.P. Morgan, as agent. This Section 5.1(b) will not apply to the extent of any special agreement or arrangement made by the Customer with any particular Subcustodian.

(c)

Subject to Section 2.20, J.P. Morgan is not responsible for the selection or monitoring of any Securities Depository and will not be liable for any act or omission by (or the insolvency of) any Securities Depository. In the event the Customer incurs a loss due to the negligence, willful default, or insolvency of a Securities Depository, J.P. Morgan will make reasonable efforts, in its discretion, to seek recovery from the Securities Depository, but J.P. Morgan will not be obligated to institute legal proceedings, file proof of claim in any insolvency proceeding, or take any similar action.

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5.2

Liability for Subcustodians

(a)

Subject to Section 7.1(b), J.P. Morgan will be liable for direct losses incurred by the Customer that result from:

(i)

the failure by a Subcustodian to use reasonable care in the provision of custodial services by it in accordance with the standards prevailing in the relevant market or from the fraud or willful misconduct of such Subcustodian in the provision of custodial services by it; or

(ii)

the insolvency of any Affiliated Subcustodian Bank.

(b)

Subject to Section 5.1(a) and J.P. Morgan’s duty to use reasonable care in the monitoring of a Subcustodian’s financial condition as reflected in its published financial statements and other publicly available financial information concerning it customarily reviewed by J.P. Morgan in its oversight process, J.P. Morgan will not be responsible for any losses (whether direct or indirect) incurred by the Customer that result from the insolvency of any Subcustodian which is not a branch or an Affiliated Subcustodian Bank.

(c)

J.P. Morgan reserves the right to add, replace or remove Subcustodians. J.P. Morgan will give prompt notice of any such action, which will be advance notice if practicable. Upon request by the Customer, J.P. Morgan will identify the name, address and principal place of business of any Subcustodian and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian.

6.	ADDITIONAL PROVISIONS

6.1

Representations of the Customer and J.P. Morgan

(a)

The Customer represents, warrants and covenants that (i) it has full authority and power, and has obtained all necessary authorizations and consents, to deposit and control the Financial Assets, Sealed Envelopes and cash in the Accounts, to use J.P. Morgan as its custodian in accordance with the terms of this Agreement, to borrow money (either short term or intraday borrowings in order to settle transactions prior to receipt of covering funds), grant a lien over Financial Assets as contemplated by Section 4.3, and enter into foreign exchange transactions; (ii) assuming execution and delivery of this Agreement by J.P. Morgan, this Agreement is the Customer’s legal, valid and binding obligation, enforceable against the Customer in accordance with its terms and it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement; (iii) it has not relied on any oral or written representation made by J.P. Morgan or any person on its behalf, and acknowledges that this Agreement sets out to the fullest extent the duties of J.P. Morgan; (iv) it is a resident of the United States and shall notify J.P. Morgan of any changes in residency; (v) the Financial Assets, Sealed Envelopes and cash deposited in the Accounts (other than those assets held in Accounts established pursuant to certain account control agreements (“Control Account Assets”) among the Customer, J.P. Morgan and secured party named therein) are not subject to any

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encumbrance or security interest whatsoever and the Customer undertakes that, so long as Liabilities of the Customer under or in connection with this Agreement are outstanding, it will not create or permit to subsist any encumbrance or security interest over such Financial Assets, Sealed Envelopes or cash (other than Control Account Assets); (vi) no delivery of Securities by the Customer to J.P. Morgan and no Instruction by the Customer with respect to such Securities will contravene Applicable Law; and (vii) none of the Financial Assets, Sealed Envelopes and cash to be held under this Agreement are “plan assets” as defined in Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended, or the regulations thereunder except as otherwise expressly notified to J.P. Morgan.

J.P. Morgan may rely upon the certification of such other facts as may be required to administer J.P. Morgan’s obligations under this Agreement and the Customer shall indemnify J.P. Morgan against all losses, liability, claims or demands arising directly or indirectly from any such certifications.

(b)

J.P. Morgan represents and warrants that (i) assuming execution and delivery of this Agreement by the Customer, this Agreement is J.P. Morgan’s legal, valid and binding obligation, enforceable against J.P. Morgan in accordance with its terms and (ii) it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement.

6.2

The Customer is Liable to J.P. Morgan Even if it is Acting for Another Person

If the Customer is acting as an agent or for another person as envisaged in Section 2.1(a) in respect of any transaction, cash, or Financial Asset, J.P. Morgan nevertheless will treat the Customer as its principal for all purposes under this Agreement. In this regard, the Customer will be liable to J.P. Morgan as a principal in respect of any transactions relating to the Account. The foregoing will not affect any rights J.P. Morgan might have against the Customer’s principal or the other person envisaged by Section 2.1(a).

6.3

Special Settlement Services

J.P. Morgan may, but shall not be obliged to, make available to the Customer from time to time special settlement services (including continuous linked settlement) for transactions involving Securities, cash, foreign exchange, and other instruments or contracts. The Customer shall comply, and shall cause its Authorized Persons to comply, with the requirements of any external settlement agency through which such settlements may be processed, including, without limitation, its rules and by-laws, where applicable.

7.	WHEN J.P. MORGAN IS LIABLE TO THE CUSTOMER

7.1

Standard of Care; Liability

(a)

J.P. Morgan will use reasonable care in performing its obligations under this Agreement. J.P. Morgan will not be in violation of this Agreement with respect to any matter as to which it has satisfied its obligation of reasonable care.

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(b)

J.P. Morgan will be liable for the Customer’s direct damages to the extent they result from J.P. Morgan’s fraud, negligence or willful misconduct in performing its duties as set out in this Agreement and to the extent provided in Section 5.2(a). Nevertheless, under no circumstances will J.P. Morgan be liable for any indirect, incidental, consequential or special damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, with respect to the Accounts, J.P. Morgan’s performance under this Agreement, or J.P. Morgan’s role as custodian.

(c)

The Customer will indemnify the J.P. Morgan Indemnitees against, and hold them harmless from, any Liabilities that may be imposed on, incurred by or asserted against any of the J.P. Morgan Indemnitees in connection with or arising out of (i) J.P. Morgan’s performance under this Agreement, provided the J.P. Morgan Indemnitees have not acted with negligence or engaged in fraud or willful misconduct in connection with the Liabilities in question or (ii) any J.P. Morgan Indemnitee’s status as a holder of record of the Customer’s Financial Assets. Nevertheless, the Customer will not be obligated to indemnify any J.P. Morgan Indemnitee under the preceding sentence with respect to any Liability for which J.P. Morgan is liable under Section 5.2(a) of this Agreement.

(d)

The Customer agrees that J.P. Morgan provides no service in relation to, and therefore has no duty or responsibility to: (i) question Instructions or make any suggestions to the Customer or an Authorized Person regarding such Instructions; (ii) supervise or make recommendations with respect to investments or the retention of Financial Assets; (iii) advise the Customer or an Authorized Person regarding any default in the payment of principal or income of any Security other than as provided in Section 2.7(b) of this Agreement; and (iv) evaluate or report to the Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which J.P. Morgan is instructed to deliver Financial Assets or cash. J.P. Morgan is not responsible or liable in any way for the genuineness or validity of any Security or instrument received, delivered or held by J.P. Morgan in physical form that appears to be genuine and valid.

7.2

Force Majeure

J.P. Morgan will maintain and update from time to time business continuation and disaster recovery procedures with respect to its global custody business that it determines from time to time meet reasonable commercial standards. J.P. Morgan will have no liability, however, for any damage, loss, expense or liability of any nature that the Customer may suffer or incur, caused by an act of God, fire, flood, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint, fraud or forgery (other than on the part of J.P. Morgan or its employees), malfunction of equipment or software (except where such malfunction is primarily and directly attributable to J.P. Morgan’s negligence in maintaining the equipment or software), currency re-denominations, failure of

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or the effect of rules or operations of any external funds transfer system, inability to obtain or interruption of external communications facilities, or any other cause beyond the reasonable control of J.P. Morgan (including without limitation, the non-availability of appropriate foreign exchange).

7.3

J.P. Morgan May Consult With Counsel

J.P. Morgan will be entitled to rely on, and may act upon the advice of professional advisors in relation to matters of law, regulation or market practice (which may be the professional advisors of the Customer), and will not be liable to the Customer under this Agreement for any action taken or omitted pursuant to such advice.

7.4

J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Result

The Customer hereby authorizes J.P. Morgan to act under this Agreement notwithstanding that: (a) J.P. Morgan or any of its divisions, branches or Affiliates may have a material interest in transactions entered into by the Customer with respect to the Account or that circumstances are such that J.P. Morgan may have a potential conflict of duty or interest, including the fact that J.P. Morgan or its Affiliates may act as a market maker in the Financial Assets to which Instructions relate, provide brokerage services to other customers, act as financial adviser to the issuer of such Financial Assets, act in the same transaction as agent for more than one customer, have a material interest in the issue of the Financial Assets; or earn profits from any of the activities listed herein and (b) J.P. Morgan or any of its divisions, branches or Affiliates may be in possession of information tending to show that the Instructions received may not be in the best interests of the Customer. J.P. Morgan is not under any duty to disclose any such information.

7.5

Assets Held Outside J.P. Morgan’s Control

J.P. Morgan will not be obliged to (a) hold Financial Assets or cash with any person not agreed to by J.P. Morgan or (b) register or record Financial Assets in the name of any person not agreed to by J.P. Morgan. Furthermore, J.P. Morgan will not be obliged to register or record on J.P. Morgan’s records Financial Assets held outside J.P. Morgan’s control. If, however, the Customer makes any such request and J.P. Morgan agrees to the request, the consequences of doing so will be at the Customer’s own risk. J.P. Morgan shall not be liable for any losses incurred as a result and may be precluded from providing some of the services referred to in this Agreement (for example, and without limitation, income collection, proxy voting, class action litigation and Corporate Action notification and processing).

7.6

Ancillary Services

J.P. Morgan and its Subcustodians may use third party delivery services and providers of information regarding non-core custody services matters such as pricing, proxy voting, corporate actions and class action litigation and use local agents to provide extraordinary services such as attendance at annual meetings of issuers of Securities. Although J.P. Morgan will use reasonable care (and cause its Subcustodians to use reasonable care) in the selection and retention of such third party providers and local agents, it will not be responsible for any errors or omissions made by them in providing the relevant information or services.

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7.7

Service Locations

J.P. Morgan maintains various operational/service centers and locations through the United States and foreign jurisdictions. The services provided under this Agreement may be provided from one or more such locations. J.P. Morgan may change the operational/service centers and locations as it deems necessary or appropriate for its business concerns.

8.	TAXATION

8.1

Tax Obligations

(a)

The Customer will pay or reimburse J.P. Morgan, and confirms that J.P. Morgan is authorized to deduct from any cash received or credited to the Cash Account, any taxes or levies required by any revenue or governmental authority for whatever reason in respect of the Customer’s Accounts.

(b)

The Customer will provide to J.P. Morgan such certifications, declarations, documentation, and information as it may require in connection with taxation, and warrants that, when given, this information is true and correct in every respect, not misleading in any way, and contains all material information. The Customer undertakes to notify J.P. Morgan immediately if any information requires updating or correcting. J.P. Morgan has no duty in respect of, or liability for any taxes, penalties, interest or additions to tax, payable or paid that result from (i) the inaccurate completion of documents by the Customer or any third party; (ii) provision to J.P. Morgan or a third party of inaccurate or misleading information by the Customer or any third party; (iii) the withholding of material information by the Customer or any third party; or (iv) any delay by any revenue authority or any other cause beyond J.P. Morgan’s control.

(c)

If J.P. Morgan does not receive appropriate certifications, documentation and information then, as and when appropriate and required, additional tax shall be deducted from all income received in respect of the Financial Assets issued (including, but not limited to, United States non-resident alien tax and/or backup withholding tax).

(d)

The Customer will be responsible in all events for the timely payment of all taxes relating to the Financial Assets in the Securities Account; provided, however, that J.P. Morgan will be responsible for any penalty or additions to tax due solely as a result of J.P. Morgan’s negligent acts or omissions with respect to paying or withholding tax or reporting interest, dividend or other income paid or credited to the Cash Account.

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8.2

Tax Relief Services

(a)

Subject to the provisions of this Section, J.P. Morgan will provide (i) a “relief at source” service to obtain a reduction of withholding tax withheld as may be available in the applicable market in respect of income payments on Financial Assets credited to the Securities Account that J.P. Morgan believes may be available to the Customer and/or (ii) a tax reclaim service on certain qualifying Financial Assets. To defray expenses pertaining to nominal tax claims, J.P. Morgan may from time-to-time set minimum thresholds as to a de minimis value of tax reclaims or reduction of withholding which it will pursue in respect of income payments under this Section.

(b)

The provision of a tax relief service by J.P. Morgan is conditional upon J.P. Morgan receiving from the Customer (i) a declaration of its identity and place of residence and (ii) certain other documentation (pro forma copies of which are available from J.P. Morgan), prior to the receipt of Financial Assets in the Account and/or the payment of income.

(c)

J.P. Morgan will perform tax relief services only with respect to taxation levied by the revenue authorities of the countries advised to the Customer from time to time and J.P. Morgan may, by notification in writing, in its absolute discretion, supplement or amend the countries in which the tax relief services are offered. Other than as expressly provided in this Section 8.2, J.P. Morgan will have no responsibility with regard to the Customer’s tax position or status in any jurisdiction.

9.	TERMINATION

9.1

Termination

(a)

Either party may terminate this Agreement on sixty (60) days’ written notice to the other party; provided the Customer shall pay a termination fee to J.P. Morgan in the amount of (i) $500,000 (U.S.) if the Customer provides such written notice within one hundred and eighty (180) days from and including the date on which J.P. Morgan commenced providing services under this Agreement or (ii) $250,000 (U.S.) if the Customer provides such written notice during the subsequent one hundred and eighty (180) days. For the avoidance of doubt, in the event J.P. Morgan terminates the Agreement pursuant to this Section 9.1(a), the Customer will not be required to pay the above termination fee.

(b)

Notwithstanding Section 9.1(a):

(i)

Either party may terminate this Agreement immediately on written notice to the other party in the event that a material breach of this Agreement by the other party has not been cured within thirty (30) days’ of that party being given written notice of the material breach;

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(ii)

Either party may terminate this Agreement immediately on written notice to the other party upon the other party being declared bankrupt, entering into a composition with creditors, obtaining a suspension of payment, being put under court controlled management, being subject to an involuntary order for the transfer of all or part of its business by a statutory authority, having any of its issued shares suspended from trading on any exchange on which they are listed (if applicable) or being the subject of a similar measure; and

(iii)

J.P. Morgan may terminate this Agreement on thirty (30) days’ written notice to the Customer in the event that J.P. Morgan reasonably determines that the Customer has ceased to satisfy J.P. Morgan’s customary credit requirements.

9.2

Exit Procedure

The Customer will provide J.P. Morgan full details of the persons to whom J.P. Morgan must deliver Financial Assets and cash within a reasonable period before the effective time of termination of this Agreement. If the Customer fails to provide such details in a timely manner, J.P. Morgan shall be entitled to continue to be paid fees under this Agreement until such time as it is able to deliver the Financial Assets and cash to its successor custodian, but J.P. Morgan may take such steps as it reasonably determines to be necessary to protect itself following the effective time of termination, including ceasing to provide transaction settlement services in the event that J.P. Morgan is unwilling to assume any related credit risk. J.P. Morgan will in any event be entitled to deduct any amounts owing to it prior to delivery of the Financial Assets and cash (and, accordingly, J.P. Morgan will be entitled to sell Financial Assets and apply the sale proceeds in satisfaction of amounts owing to it). The Customer will reimburse J.P. Morgan promptly for all reasonable out-of-pocket expenses it incurs in delivering Financial Assets upon termination. Termination will not affect any of the liabilities either party owes to the other arising under this Agreement prior to such termination.

10.

MISCELLANEOUS

10.1

Notices

Notices pursuant to Section 9 of this Agreement shall be sent or served by registered mail, overnight delivery services, such as Federal Express (FedEx) or United Parcel Service (UPS), etc., courier services or hand delivery to the address of the respective parties as set out on the first page of this Agreement, unless notice of a new address is given to the other party in writing.

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10.2

Successors and Assigns

This Agreement will be binding on each of the parties’ successors and assigns. The parties agree that neither party can assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent will not be unreasonably withheld or delayed; except J.P. Morgan may assign this Agreement without the Customer’s consent to (a) any Affiliate or subsidiary of J.P. Morgan or (b) in connection with a merger, reorganization, stock sale or sale of all or substantially all of J.P. Morgan’s custody business.

10.3

Entire Agreement

This Agreement, including the Schedules, Exhibits, and Riders (and any separate agreement which J.P. Morgan and the Customer may enter into with respect to any Cash Account), sets out the entire Agreement between the parties in connection with the subject matter hereof, and this Agreement supersedes any other agreement, statement or representation relating to custody, whether oral or written. Amendments must be in writing and, except where this Agreement provides for amendments by notice from J.P. Morgan, signed by both parties.

10.4

Information Concerning Deposits at J.P. Morgan’s Non-US Branch

Under U.S. federal law, deposit accounts that the Customer maintains in J.P. Morgan’s foreign branches (outside of the U.S.) are not insured by the Federal Deposit Insurance Corporation. In the event of J.P. Morgan’s liquidation, foreign branch deposits have a lesser preference than U.S. deposits, and such foreign deposits are subject to cross-border risks.

10.5

Insurance

The Customer acknowledges that J.P. Morgan will not be required to maintain any insurance coverage specifically for the benefit of the Customer. J.P. Morgan will, however, provide summary information regarding its own general insurance coverage to the Customer upon written request.

10.6

Security Holding Disclosure

With respect to Securities and Exchange Commission Rule 14b-2 under The U.S Shareholder Communications Act, regarding disclosure of beneficial owners to issuers of Securities, J.P. Morgan is instructed not to disclose the name, address or Security positions of the Customer in response to shareholder communications requests regarding the Account.

10.7

USA PATRIOT Act Disclosure

Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires J.P. Morgan to implement reasonable procedures to verify the identity of any person that opens a new Account with it. Accordingly, the Customer acknowledges that Section 326 of the USA PATRIOT Act and J.P. Morgan’s identity verification procedures require J.P. Morgan to obtain information which may be used to confirm the Customer’s identity, including without limitation the Customer’s name, address and organizational documents (“identifying information”). The Customer may also be asked to provide information about its financial status such as its current audited and unaudited financial statements. The Customer agrees to provide J.P. Morgan with and consents to J.P. Morgan obtaining from third parties any such identifying and financial information required as a condition of opening an account with or using any service provided by J.P. Morgan.

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10.8

Governing Law and Jurisdiction

This Agreement will be construed, regulated, and administered under the laws of the United States or State of New York, as applicable, without regard to New York’s principles regarding conflict of laws, except that the foregoing shall not reduce any statutory right to choose New York law or forum. The United States District Court for the Southern District of New York will have the sole and exclusive jurisdiction over any lawsuit or other judicial proceeding relating to or arising from this Agreement. If that court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York, New York County will have sole and exclusive jurisdiction. Either of these courts will have proper venue for any such lawsuit or judicial proceeding, and the parties waive any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of process to vest personal jurisdiction over them in any of these courts. The parties further hereby knowingly, voluntarily and intentionally waive, to the fullest extent permitted by applicable law, any right to a trial by jury with respect to any such lawsuit or judicial proceeding arising or relating to this Agreement or the transactions contemplated hereby. To the extent that in any jurisdiction the Customer or J.P. Morgan may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, the Customer or J.P. Morgan shall not claim, and it hereby irrevocably waives, such immunity.

10.9

Severability; Waiver; and Survival

(a)

If one or more provisions of this Agreement are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions will not in any way be affected or impaired.

(b)

Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right under this Agreement operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision of this Agreement, or waiver of any breach or default, is effective unless it is in writing and signed by the party against whom the waiver is to be enforced.

(c)

The parties’ rights, protections, and remedies under this Agreement shall survive its termination.

10.10

Confidentiality

(a)

Subject to Clause 10.10(b) J.P. Morgan will hold all Confidential Information in confidence and will not disclose any Confidential Information except as may be required by Applicable Law, a regulator with jurisdiction over J.P. Morgan’s business, or with the consent of the Customer.

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(b)

The Customer authorizes J.P. Morgan to disclose Confidential Information to:

(i)

any Subcustodian, subcontractor, agent, Securities Depository, securities exchange, broker, third party agent, proxy solicitor, issuer, or any other person that J.P. Morgan believes it is reasonably required in connection with J.P. Morgan’s provision of relevant services under this Agreement;

(ii)

its professional advisors, auditors or public accountants;

(iii)

its Affiliates and branches; and

(iv)

any revenue authority or any governmental entity in relation to the processing of any tax relief claim.

(c)

Except as otherwise required by Applicable Law or as needed to enforce the terms of this Agreement, the parties shall hold the terms and conditions, including, without limitation, any commercial terms, of this Agreement in confidence.

10.11

Counterparts

This Agreement may be executed in several counterparts each of which will be deemed to be an original and together will constitute one and the same agreement.

10.12

No Third Party Beneficiaries

A person who is not a party to this Agreement shall have no right to enforce any term of this Agreement.

[ Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date set forth above.


ON BEHALF OF EACH TRUST LISTED ON SCHEDULE A ATTACHED TO THIS AGREEMENT

By:		/s/ W. Patrick Bradley
Name:		W. Patrick Bradley
Title:		VP& Treasurer
Date:		2/27/2013

JPMORGAN CHASE BANK, N.A.

By:		/s/ Matthew Caulfield
Name:		Matthew Caulfield
Title:		MD
Date:		3/1/2013

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SCHEDULE A – LIST OF CUSTOMERS AS OF MARCH 1, 2013

VIRTUS INSIGHT TRUST

VIRTUS OPPORTUNITIES TRUST

VIRTUS EQUITY TRUST

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SCHEDULE 1

List of Subcustodians and Markets Used by J.P. Morgan

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SCHEDULE 2

Form of Board Resolution

To:	JPMorgan Chase Bank, N.A.

We hereby certify that the following is a true copy of the minutes of the Board of Directors of * (the “ Company ”) which was duly called and held on , 20 and at which a duly qualified quorum was present throughout and entitled to vote.

There was produced to the meeting a form of Custody Agreement provided by JPMorgan Chase Bank, N.A. (“J.P. Morgan”) for use in connection with the opening of one or more cash and securities accounts and the conduct of such other transactions between the Company and J.P. Morgan as referred to therein. The form of Custody Agreement produced had been completed by an officer of the Company, and in particular it was noted that details of the Authorized Persons (as defined therein) and details of persons authorized to give instructions on behalf of the Company had been provided to J.P. Morgan. Details of any Fund Managers and Advisers had also been provided to J.P. Morgan. The indemnities given to J.P. Morgan in the Custody Agreement were also noted. The meeting considered the form of the Custody Agreement.

IT WAS RESOLVED that the form of Custody Agreement (together with the Schedule and Appendices), completed in the manner and form produced at the meeting, be and is hereby approved and that ** be and he/she is hereby authorized, for and on behalf of the Company, to sign and deliver the same together with such changes and amendments thereto as he/she may in his/her sole discretion think fit.

There was produced to the meeting a form of power of attorney (“ power of attorney ”) to be given by the Company to J.P. Morgan to enable J.P. Morgan to provide tax reclaim services as provided for in the Custody Agreement. The meeting considered the form of the power of attorney and in particular the indemnities contained in it. IT WAS RESOLVED that that power of attorney be and it is hereby approved and that it be executed under seal in accordance with the Company’s constitution.

Director

Secretary

*	Name of Company in full.

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SCHEDULE 3

J.P. Morgan Worldwide Securities Services Custody Restricted Markets Schedule

The following table identifies certain markets that J.P. Morgan has determined to be restricted markets and provides summary information about the nature of the restrictions applicable in each. J.P. Morgan reserves the right to update this Schedule from time to time upon notice to Customer.


Market		Restrictions
Costa Rica		Local currency will be held in one or more separate cash accounts that J.P. Morgan opens for the benefit of its customers with J.P. Morgan’s Costa Rican Subcustodian. If J.P. Morgan’s Costa Rican Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Securities that are safekept in Costa Rica. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit.

Iceland		Until further notice from J.P. Morgan, no deposits of Icelandic currency will be held in the Customer’s Cash Account except for the proceeds of sales of Icelandic Securities or where income and corporate action proceeds are paid in local currency. Until further notice from J.P. Morgan, any credit of Icelandic currency to the Customer’s Cash Account with J.P. Morgan will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be applied at Customer’s Instruction to the purchase of Icelandic Securities or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Icelandic Subcustodian via a foreign exchange transaction (upon Instruction received from Customer). In this regard, Customer will be entitled to no more than Customer’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan.

Lithuania		Until further notice from J.P. Morgan, no deposits of Lithuanian currency will be held in the Customer’s Cash Account except for any existing balances and future proceeds of sales of Securities safekept in Lithuania (“Lithuanian Securities”) or where income and corporate action proceeds are paid in local currency. Until further notice from J.P. Morgan, any credit of Lithuanian currency to Customer’s Cash Account with J.P. Morgan will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be applied at Customer’s direction to the purchase of Lithuanian Securities or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Lithuanian Subcustodian via a foreign exchange transaction (upon Instruction received from Customer). In this regard, Customer will be entitled to no more than Customer’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan.

Malawi		Local currency will be held in one or more separate cash accounts that J.P. Morgan opens for the benefit of its customers with J.P. Morgan’s Malawi Subcustodian. Due to unclear standards in the Malawi market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to Securities safekept in Malawi (“Malawi Securities”). If J.P. Morgan’s Malawi Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Malawi Securities. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit.

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Market		Restrictions
Palestinian Territories		Until further notice from J.P. Morgan, any credit of U.S. Dollars or Jordanian Dinars to the Customer’s Cash Account with J.P. Morgan applied at Customer’s direction to the purchase or sale of Securities safekept in the Palestinian Territories will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be repatriated or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Subcustodian in the Palestinian Territories via a capital remittance transaction (upon Instruction received from Customer). In this regard, Customer will be entitled to no more than Customer’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan. J.P. Morgan’s Palestinian Subcustodian, HSBC Bank Middle East Limited, Palestinian Autonomous Area, advises that the Palestinian Territories are subject to social and political unrest. There is no well defined legal system in place, no satisfactory mechanism for resolving any disputes and an embryonic oversight control of the Palestinian institutions. In the event of bankruptcy of the Palestine Exchange who owns and operates the Central Depository and Settlement Department, there is no system of insurance in place and no mandate at the Palestine Monetary Authority to rescue a failing bank. Clients should therefore be aware that, due to the political uncertainties and ongoing development, issues may arise in the Palestinian Territories in connection with any of the services which the Palestinian Subcustodian is providing under our subcustodian agreement with them. As a result, J.P. Morgan wishes to highlight that there could be disruption in services, and that these disruptions or limitations in service would be considered as force majeure.

Russia (for Russian Equities only)		Customer should refer to the current version of the applicable J.P. Morgan’s Russia briefing memo regarding the registrar company system of recording ownership of equity Securities issued by a Russian issuer (“Russian Equities”). Registrar companies licensed in Russia to provide share registration services to an issuer of Russian Equities (“Russian Registrar Company”) are not Securities Depositories or Subcustodians or otherwise agents of J.P. Morgan. J.P. Morgan provides custody services with respect to Russian Equities only when held through a Russian securities depository in which the Russian Subcustodian participates or when the Russian Subcustodian has a contract with the applicable Russian Registrar Company. Customer should refer to the current version of the applicable Russia briefing memo for information concerning these contracts and steps J.P. Morgan currently takes to monitor the performance of Russian Registrar Companies. J.P. Morgan’s responsibility with respect to the safekeeping of Russian Equities shall be limited to maintaining electronic records of Russian Equities holdings owned by Customer based on either (i) fax or scanned copies of share re-registration notifications issued by a Russian Registrar Company in respect of the Russian Equities (“Russian Share Notifications”), as provided to J.P. Morgan by either the custodian of the Customer’s counterparty in the case of a purchase transaction or by the Russian Registrar Company in the case of a sales transaction, or (ii) electronic copies of notifications issued by a Russian Securities Depository (“Russian Depository Notifications”). J.P. Morgan shall not be responsible for ensuring the validity or genuineness of the notifications (originals or copies) it receives.

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Market		Restrictions
		Due to unclear standards in the Russian market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to Russian Equities. For clients settling through Russian Registrar Companies, proxy services are available where a signed agreement is in place between the Russian Subcustodian and the applicable Russian Registrar Company.

Tanzania		Local currency will be held in one or more separate cash accounts that J.P. Morgan opens for the benefit of its customers with J.P. Morgan’s Tanzanian Subcustodian. Due to the unclear standards in the Tanzanian market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to Securities safekept in Tanzania (“Tanzanian Securities”). If J.P. Morgan’s Tanzanian Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Tanzanian Securities. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit.

Ukraine (for Ukrainian Equities only)		Customer should refer to the current version of the applicable J.P. Morgan’s Ukraine briefing memo regarding the account structure and corporate action nuances of the Ukrainian market. For client opening accounts in Ukraine and unincorporated client types in particular, due to unclear standards in the Ukrainian market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to equity Securities safekept in Ukraine.

West African Economic and Monetary Union (“WAEMU”)		Local currency will be held in one or more separate cash accounts that J.P. Morgan opens for the benefit of its customers with J.P. Morgan’s WAEMU Subcustodian. If J.P. Morgan’s WAEMU Subcustodian exits the market or becomes an unacceptable provider of subcustody services, or if market conditions otherwise deteriorate within one or more of the member states of WAEMU, J.P. Morgan may cease to provide custody services with respect to Securities issued in member states of WAEMU that are settled and safekept at Dépositaire Central/Banque de Règlement S.A.. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit.

Zimbabwe		Until further notice from J.P. Morgan, any credit of U.S. Dollars to the Customer’s Cash Account with J.P. Morgan applied at Customer’s direction to the purchase or sale of Zimbabwe Securities will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be repatriated or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Zimbabwean Subcustodian via a capital remittance transaction (upon Instruction received from Customer). In this regard, Customer will be entitled to no more than Customer’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan.

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Market		Restrictions
		If J.P. Morgan’s Zimbabwean Subcustodian exits the market or becomes an unacceptable provider of subcustody services, or if market conditions otherwise deteriorate, J.P. Morgan may cease to provide custody services with respect to Securities that are safekept in Zimbabwe. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit.

U.K. Client Money Terms

Funds held in cash accounts that J.P. Morgan opens with a Subcustodian for the benefit of its customers will be subject to the protections of the U.K. FSA Client Money Rules and such cash accounts treated as Designated Client Money Accounts for purposes of those rules. In this regard, J.P. Morgan shall not place any of its proprietary funds in any of these cash accounts. However, Customer’s funds in these cash accounts may be commingled (though distinguishable via books and records kept at J.P. Morgan) with funds belonging to other J.P. Morgan clients. These cash accounts are not an obligation of J.P. Morgan. In cases where the market is located outside of the European Economic Area (“EEA”), these cash accounts may be subject to the laws of the market in which the Subcustodian operates such cash accounts. As a result, the Customer’s rights relating to such deposits may differ from its rights in deposits held at banks in the EEA. In the event that the Subcustodian pays interest on any of these cash accounts, the Customer shall be entitled to its proportionate share of that interest.

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ANNEX A

Electronic Access

1. J.P. Morgan may permit the Customer and its Authorized Persons to access certain electronic systems and applications (collectively, the “Products”) and to access or receive electronically Data (as defined below) in connection with the Agreement (collectively, the “Products”). J.P. Morgan may, from time to time, introduce new features to the Products or otherwise modify or delete existing features of the Products in its sole discretion. J.P. Morgan shall endeavor to give the Customer reasonable notice of its termination or suspension of access to the Products, but may do so immediately if J.P. Morgan determines, in its sole discretion, that providing access to the Products would violate Applicable Law or that the security or integrity of the Products is at risk. Access to the Products shall be subject to the Security Procedures.

2. In consideration of the fees paid by the Customer to J.P. Morgan and subject to any applicable software license addendum in relation to J.P. Morgan-owned or sublicensed software provided for a particular application and Applicable Law, J.P. Morgan grants to the Customer a non-exclusive, non-transferable, limited and revocable license to use the Products and the information and data made available through the Products or transferred electronically (the “Data”) for the Customer’s internal business use only. The Customer may download the Data and print out hard copies for its reference, provided that it does not remove any copyright or other notices contained therein. The license granted herein will permit use by the Customer’s Authorized Person, provided that such use shall be in compliance with the Agreement, including this Annex. The Customer acknowledges that elements of the Data, including prices, corporate action information, and reference data, may have been licensed by J.P. Morgan from third parties and that any use of such Data beyond that authorized by the foregoing license, may require the permission of one or more third parties in addition to J.P. Morgan.

3. The Customer acknowledges that there are security, corruption, transaction error and access availability risks associated with using open networks such as the internet, and the Customer hereby expressly assumes such risks. The Customer is solely responsible for obtaining, maintaining and operating all software (including antivirus software, anti-spyware software, and other internet security software) and personnel necessary for the Customer to access and use the Products. All such software must be interoperable with J.P. Morgan’s software. Each of the Customer and J.P. Morgan shall be responsible for the proper functioning, maintenance and security of its own systems, services, software and other equipment.

4. In cases where J.P. Morgan’s web site is unexpectedly down or otherwise unavailable, J.P. Morgan shall, absent a force majeure event, provide other appropriate means for the Customer or its Authorized Persons to instruct J.P. Morgan or obtain reports from J.P. Morgan. J.P. Morgan shall not be liable for any Liabilities arising out of the Customer’s use of, access to or inability to use the Products via J.P. Morgan’s web site in the absence of J.P. Morgan’s gross negligence or willful misconduct.

5. Use of the Products may be monitored, tracked, and recorded. In using the Products, the Customer hereby expressly consents to such monitoring, tracking, and recording. Individuals and organizations should have no expectation of privacy unless local law, regulation, or contract provides otherwise. J.P. Morgan shall own all right, title and interest in the data reflecting the Customer usage of the Products or J.P. Morgan’s web site (including, but not limited to, general usage data and aggregated transaction data). J.P. Morgan may use and sublicense data obtained by it regarding the Customer’s use of the Products or J.P. Morgan’s website, as long as J.P. Morgan does not disclose to others that the Customer was the source of such data or the details of individual transactions effected using the Products or web site.

Global Custody Agreement – New York – General – May 2012


EXECUTION COPY

6. The Customer shall not knowingly use the Products to transmit (i) any virus, worm, or destructive element or any programs or data that may be reasonably expected to interfere with or disrupt the Products or servers connected to the Products; (ii) material that violates the rights of another, including but not limited to the intellectual property rights of another; and (iii) “junk mail”, “spam”, “chain letters” or unsolicited mass distribution of e-mail.

7. The Customer shall promptly and accurately designate in writing to J.P. Morgan the geographic location of its users upon written request. The Customer further represents and warrants to J.P. Morgan that the Customer shall not access the service from any jurisdiction which J.P. Morgan informs the Customer or where the Customer has actual knowledge that the service is not authorized for use due to local regulations or laws, including applicable software export rules and regulations. Prior to submitting any document which designates the persons authorized to act on the Customer’s behalf, the Customer shall obtain from each individual referred to in such document all necessary consents to enable J.P. Morgan to process the data set out therein for the purposes of providing the Products.

8. The Customer will be subject to and shall comply with all applicable laws, rules and regulations concerning restricting collection, use, disclosure, processing and free movement of the Data (collectively, the “Privacy Regulations”). The Privacy Regulations may include, as applicable, the Federal “Privacy of Consumer Financial Information” Regulation (12 CFR Part 30), as amended from time to time, issued pursuant to Section 504 of the Gramm-Leach-Bliley Act of 1999 (15 U.S.C. §6801, et seq.), the Health and Insurance Portability and Accountability Act of 1996 (42 U.S.C. §1320d), The Data Protection Act 1998 and Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to processing of personal data and the free movement of such data.

9. The Customer shall be responsible for the compliance of its Authorized Persons with the terms of the Agreement, including this Annex.

Global Custody Agreement – New York – General – May 2012

THIRD AMENDMENT TO AMENDED AND RESTATED

TRANSFER AGENCY AND SERVICE AGREEMENT

This Amendment, effective as of January 1, 2013, is made by and between the undersigned entities (hereinafter each referred to as the “Fund” and collectively referred to as the “Virtus Mutual Funds”) and Virtus Fund Services, LLC (hereinafter referred to as the “Transfer Agent”).

WHEREAS:

The Transfer Agent and the Virtus Mutual Funds are parties to an Amended and Restated Transfer Agency and Service Agreement dated January 1, 2010 (the “Agreement”); and

WHEREAS:

The Agreement has recently been assigned to the Transfer Agent by VP Distributors, LLC (formerly VP Distributors, Inc.) (“VP Distributors”) with the consent of the Board of Trustees of Virtus Mutual Funds; and

WHEREAS:

The parties desire to make amendments to the Agreement to reflect the assignment, to reflect certain changes to the fees under the Agreement, and to remove one trust of the Virtus Mutual Funds as a party; and

WHEREAS:

Article 11 of the Agreement states that amendments to the Agreement shall be set forth in a written amendment signed by both parties;

NOW THEREFORE, the parties agree as follows:

All references in the Agreement to VP Distributors in the Agreement are hereby changed to refer to Virtus Fund Services, LLC.

Schedule A to the Agreement is hereby replaced with the attached new Schedule A.

Virtus Institutional Trust is hereby removed as a party to the Agreement.

[signatures appear on next page]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed in their names and on their behalf and through their duly authorized officers, as of the day and year first above written.


VIRTUS EQUITY TRUST VIRTUS INSIGHT TRUST VIRTUS INSTITUTIONAL TRUST VIRTUS OPPORTUNITIES TRUST (collectively, the “Virtus Mutual Funds”)

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley Title: Vice President, Chief Financial Officer and Treasurer


VIRTUS FUND SERVICES, LLC

By:		/s/ Heidi Griswold
		Name: Heidi Griswold Title: Vice President, Mutual Fund Services

Schedule A

Fee Schedule

Effective Date: January 1, 2013


	Total Transfer Agent Fee		BNYM portion of Total Fee
			0
Direct Accounts	$ 9.20 per account		$ 9.20 per account
Networked Accounts	$6.20 per account		$ 6.20 per account
Closed Accounts	$ .50 per account		$ 0.50 per account
Compliance Fee	4.25% of per account fees		4.25% of per account fees
Oversight & Service	Money Market Funds		0
	All assets	0.25bps
	Other Funds
	0 - $15,000,000,000	4.50 bps
	$15,000,000,001 - $30,000,000,000	4.25 bps
	$30,000,000,001 - $50,000,000,000	4.00 bps
	Over $50,000,000,000	3.75 bps

Account Charges :

Account Charges will be allocated on the basis of the number of accounts.

Base Fees :

Base Fees will be allocated according to average net assets.

Out-of-Pocket Expenses :

Out-of-pocket expenses include, but are not limited to: expenses invoiced by broker-dealers and financial institutions for shareholder servicing, confirmation production, postage, forms, telephone, microfilm, microfiche, stationary and supplies, and expenses incurred at the specific direction of the Fund. Postage for mass mailings is due seven days in advance of the mailing date.

SIXTH AMENDMENT

AMENDED AND RESTATED ADMINISTRATION AGREEMENT

THIS AMENDMENT made effective as of the 28 ^th day of August, 2012 amends that certain amended and restated administration agreement, dated as of January 1, 2010, as amended, between the Trusts listed on Schedule A including the Funds listed under each Trust and VP Distributors, LLC (formerly VP Distributors, Inc.) (the “Administration Agreement”) as herein below provided.

W I T N E S S E T H :

WHEREAS, Pursuant to Section 8, Amendments to the Agreement, of the Administration Agreement, the Trusts and the Funds wish to amend Schedule A of the Administration Agreement to add the following new Funds: Virtus Emerging Markets Debt Fund, Virtus Emerging Markets Equity Income Fund, Virtus Herzfeld Fund, Virtus International Small-Cap Fund and Virtus Wealth Masters Fund.

NOW, THEREFORE, in consideration of the foregoing premise, the parties to the Administration Agreement hereby agree that the Administration Agreement is amended as follows:

Schedule A to the Administration Agreement is hereby replaced with Schedule A attached hereto and made a part hereof.

The name VP Distributors, Inc. is hereby amended throughout the Agreement to be “VP Distributors, LLC”.

Virtus Institutional Trust is hereby removed as a party to the Agreement.

Except as herein provided, the Administration Agreement shall be and remain unmodified and in full force and effect. All initial capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Administration Agreement.

This Amendment may be executed in any number of counterparts (including executed counterparts delivered and exchanged by facsimile transmission) with the same effect as if all signing parties had originally signed the same document, and all counterparts shall be construed together and shall constitute the same instrument. For all purposes, signatures delivered and exchanged by facsimile transmission shall be binding and effective to the same extent as original signatures.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers.


VIRTUS MUTUAL FUNDS VIRTUS EQUITY TRUST VIRTUS INSIGHT TRUST VIRTUS INSTITUTIONAL TRUST VIRTUS OPPORTUNITIES TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley Title: Vice President, Chief Financial Officer and Treasurer


VP DISTRIBUTORS, LLC

By:		/s/ David G. Hanley
		Name: David G. Hanley Title: Vice President and Treasurer

SCHEDULE A

(as of August 28, 2012)

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Infrastructure Fund

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

SEVENTH AMENDMENT

AMENDED AND RESTATED ADMINISTRATION AGREEMENT

THIS AMENDMENT made effective as of the 18 ^th day of December, 2012 amends that certain amended and restated administration agreement, dated as of January 1, 2010, as amended, between the Trusts listed on Schedule A including the Funds listed under each Trust and VP Distributors, LLC (formerly VP Distributors, Inc.) (the “Administration Agreement”) as herein below provided.

W I T N E S S E T H :

WHEREAS, Pursuant to Section 8, Amendments to the Agreement, of the Administration Agreement, the Trusts and the Funds wish to amend Schedule A of the Administration Agreement to add the following new Funds: Virtus Disciplined Equity Style Fund, Virtus Disciplined Select Bond Fund and Virtus Disciplined Select Country Fund and to otherwise update the schedule.

NOW, THEREFORE, in consideration of the foregoing premise, the parties to the Administration Agreement hereby agree that the Administration Agreement is amended as follows:

Schedule A to the Administration Agreement is hereby replaced with Schedule A attached hereto and made a part hereof.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers.


VIRTUS MUTUAL FUNDS VIRTUS EQUITY TRUST VIRTUS INSIGHT TRUST VIRTUS OPPORTUNITIES TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley Title: Vice President, Chief Financial Officer and Treasurer


VP DISTRIBUTORS, LLC

By:		/s/ David G. Hanley
		Name: David G. Hanley Title: Vice President and Treasurer

SCHEDULE A

(as of December 15, 2012)

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Disciplined Equity Style Fund

Virtus Disciplined Select Bond Fund

Virtus Disciplined Select Country Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Dividend Fund (formerly Virtus Global Infrastructure Fund)

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

FOURTH AMENDMENT

SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT

THIS AMENDMENT made effective as of the 28 ^th day of August, 2012 amends that certain sub-administration and accounting services agreement, dated as of January 1, 2010, as amended, among the Funds listed on Exhibit A and the Portfolios listed on Exhibit B, VP Distributors, LLC (formerly VP Distributors, Inc.) and BNY Mellon Investment Servicing (US) Inc. (formerly known as PNC Global Investment Servicing (U.S.) Inc.) (the “Sub-Administration Agreement”) as herein below provided.

W I T N E S S E T H :

WHEREAS, Pursuant to Section 17, Amendments, of the Sub-Administration Agreement, the Funds and the Portfolios wish to amend Exhibit B of the Sub-Administration Agreement to add the following new Funds: Virtus Emerging Markets Debt Fund, Virtus Emerging Markets Equity Income Fund, Virtus Herzfeld Fund, Virtus International Small-Cap Fund and Virtus Wealth Masters Fund.

NOW, THEREFORE, in consideration of the foregoing premise, the parties to the Sub-Administration Agreement hereby agree that the Sub-Administration Agreement is amended as follows:

Exhibit A to the Sub-Administration Agreement is hereby replaced with Exhibit A attached hereto and made a part hereof

Exhibit B to the Sub-Administration Agreement is hereby replaced with Exhibit B attached hereto and made a part hereof.

The name VP Distributors, Inc. is hereby amended throughout the Agreement to be “VP Distributors, LLC”.

Virtus Institutional Trust is hereby removed as a party to the Agreement.

Except as herein provided, the Sub-Administration Agreement shall be and remain unmodified and in full force and effect. All initial capitalized terms used herein shall have the meanings ascribed thereto in the Sub-Administration Agreement.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers.


VIRTUS MUTUAL FUNDS VIRTUS EQUITY TRUST VIRTUS INSIGHT TRUST VIRTUS INSTITUTIONAL TRUST VIRTUS OPPORTUNITIES TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley Title: Vice President, Chief Financial Officer and Treasurer


VP DISTRIBUTORS, LLC

By:		/s/ David G. Hanley
		Name: David G. Hanley Title: Vice President and Treasurer


BNY MELLON INVESTMENT SERVICING (US) INC.

By:		/s/ Jay F. Nusblatt
		Name: Jay Nusblatt Title: Executive Vice President

EXHIBIT A

THIS EXHIBIT A, dated as of August 28, 2012, is Exhibit A to that certain Sub-Administration and Accounting Services Agreement dated as of January 1, 2010 by and among BNY Mellon Investment Servicing (US) Inc. (formerly PNC Global Investment Servicing (U.S.) Inc.), VP Distributors, LLC (formerly VP Distributors, Inc.) and the investment companies known as the Virtus Mutual Funds as listed below.

FUNDS

Virtus Equity Trust

Virtus Insight Trust

Virtus Opportunities Trust

[Remainder of Page Intentionally Left Blank]

EXHIBIT B

THIS EXHIBIT B, dated as of August 28, 2012, is Exhibit B to that certain Sub-Administration and Accounting Services Agreement dated as of January 1, 2010 by and among BNY Mellon Investment Servicing (US) Inc. (formerly known as PNC Global Investment Servicing (U.S.) Inc.), VP Distributors, LLC (formerly VP Distributors, Inc.) and the investment companies known as the Virtus Mutual Funds.

PORTFOLIOS

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Infrastructure Fund

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

FUNDS OF FUNDS

Virtus Alternatives Diversifier Fund

Virtus AlphaSector ^SM Rotation Fund

Virtus Premium AlphaSector ^SM Fund

Virtus Allocator Premium AlphaSector Fund

Virtus Global Premium AlphaSector Fund

FIFTH AMENDMENT

SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT

THIS AMENDMENT made effective as of the 18 ^th day of December, 2012 amends that certain sub-administration and accounting services agreement, dated as of January 1, 2010, as amended, among the Funds listed on Exhibit A and the Portfolios listed on Exhibit B, VP Distributors, LLC (formerly VP Distributors, Inc.) and BNY Mellon Investment Servicing (US) Inc. (formerly known as PNC Global Investment Servicing (U.S.) Inc.) (the “Sub-Administration Agreement”) as herein below provided.

W I T N E S S E T H :

WHEREAS, Pursuant to Section 17, Amendments, of the Sub-Administration Agreement, the Funds and the Portfolios wish to amend Exhibit B of the Sub-Administration Agreement to add the following new Funds: Virtus Disciplined Equity Style Fund, Virtus Disciplined Select Bond Fund and Virtus Disciplined Select Country Fund and to otherwise update the Exhibit.

NOW, THEREFORE, in consideration of the foregoing premise, the parties to the Sub-Administration Agreement hereby agree that the Sub-Administration Agreement is amended as follows:

Exhibit B to the Sub-Administration Agreement is hereby replaced with Exhibit B attached hereto and made a part hereof.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers.


VIRTUS MUTUAL FUNDS VIRTUS EQUITY TRUST VIRTUS INSIGHT TRUST VIRTUS OPPORTUNITIES TRUST

By:		/s/ W. Patrick Bradley
		Name: W. Patrick Bradley
		Title: Vice President, Chief Financial Officer and Treasurer


VP DISTRIBUTORS, LLC

By:		/s/ David G. Hanley
		Name: David G. Hanley
		Title: Vice President and Treasurer


BNY MELLON INVESTMENT SERVICING (US) INC.

By:		/s/ Jay F. Nusblatt
		Name: Jay Nusblatt
		Title: Executive Vice President

EXHIBIT B

THIS EXHIBIT B, dated as of December 18, 2012, is Exhibit B to that certain Sub-Administration and Accounting Services Agreement dated as of January 1, 2010 by and among BNY Mellon Investment Servicing (US) Inc. (formerly known as PNC Global Investment Servicing (U.S.) Inc.), VP Distributors, LLC (formerly VP Distributors, Inc.) and the investment companies known as the Virtus Mutual Funds.

PORTFOLIOS

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)

Virtus Tax-Exempt Bond Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Disciplined Equity Style Fund

Virtus Disciplined Select Bond Fund

Virtus Disciplined Select Country Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Dividend Fund (formerly Virtus Global Infrastructure Fund)

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

FUNDS OF FUNDS

Virtus Alternatives Diversifier Fund

Virtus AlphaSector ^SM Rotation Fund

Virtus Disciplined Equity Style Fund

Virtus Disciplined Select Bond Fund

Virtus Disciplined Select Country Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Herzfeld Fund

Virtus Premium AlphaSector ^SM Fund

Virtus Allocator Premium AlphaSector Fund

Virtus Global Premium AlphaSector Fund

FORM OF INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”) is made as of [__] by and between (i) Virtus Insight Trust (the “Trust”), acting on behalf of itself and each of its portfolio series, whether existing on the date hereof (as listed on Appendix A hereto) or subsequently established (the “Series”) and (ii) the trustee of the Trust whose name is set forth on the signature page (the “Trustee”).

WHEREAS, the Trustee is a trustee of the Trust, and the Trust wishes the Trustee to continue to serve in that capacity;

WHEREAS, the declaration of trust of the Trust (the “Declaration of Trust”) provides that the business of the Trust shall be managed by the Trustees and they shall have all powers necessary to carry out that responsibility, does not limit any rights to indemnification that the Trustee may be entitled to by contract or otherwise under law and the Trustees have duly authorized this Agreement; and

WHEREAS, to induce the Trustee to continue to provide services to the Trust as a trustee of the Trust and to provide the Trustee with contractual assurance that indemnification will be available to the Trustee, the Trust desires to provide the Trustee with protection against personal liability and delineate certain procedural aspects relating to indemnification and advancement of expenses, as more fully set forth herein,

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements set forth herein, the parties hereby agree as set forth below.

1. Definitions . For purposes of this Agreement, the following terms shall have the following meanings:

(a) “ Disabling Conduct ” shall mean the Trustee’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

(b) “ Expenses ” shall include without limitation all judgments, penalties, fines, amounts paid in settlement or compromise, prohibited transaction excise taxes, liabilities, losses, interest, expenses of investigation, attorneys’ fees, accountants’ fees, retainers, court costs, transcript costs, fees of experts and witnesses, expenses of preparing for and attending depositions and other proceedings, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other costs, disbursements or expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or acting as a witness in a Proceeding.

(c) “ Final Adjudication ” shall mean a final decision on the merits by court order or judgment of the court or other body before which a matter was brought, from which no further right of appeal or review exists.

(d) “ Non-Party Trustee ” shall mean a trustee of the Trust who is not (i) an “interested person” of the Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, (ii) a party to the Proceeding with respect to which indemnification or advances are sought or (iii) a party to any other Proceeding based on the same or similar grounds that is then or has been pending.

(e) The term “ Proceeding ” shall include without limitation any threatened, pending or completed claim, demand, discovery request, request for testimony or information, action, suit, arbitration, alternative dispute mechanism, investigation, hearing or other proceeding, including any appeal from any of the foregoing, whether civil, criminal, administrative, legislative or investigative and, except as otherwise provided herein, shall also include any proceeding brought by or in the right of the Trust or any Series and any proceeding brought by a Trustee against the Trust or any Series.

(f) The Trustee’s “ service to the relevant Series ” shall include without limitation the Trustee’s service as a trustee or advisory trustee of the Trust and his or her service at the request of the Trust or the Series as a trustee, director, officer, employee, agent or representative of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

(g) “ Special Counsel ” shall mean a law firm, or a member of a law firm, that is experienced in matters of investment company law and neither at the time of designation is, nor in the five years immediately preceding such designation was, retained to represent (i) the Trust or the Trustee (except that a majority of the Non-Party Trustees may determine, in their sole discretion, that any prior representation of the Trust or Trustee shall not disqualify such law firm or a member of a law firm from representation, if the prior representation is not related to the issue in dispute) or (ii) any other party to the Proceeding (or any party reasonably expected to become a party to the Proceeding) giving rise to a claim for indemnification or advancements hereunder. Notwithstanding the foregoing, however, the term “ Special Counsel ” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Trust or the Trustee in an action to determine the Trustee’s rights pursuant to this Agreement, regardless of when the Trustee’s act or failure to act occurred.

2. Indemnification . The Trust on behalf of each Series severally shall indemnify and hold harmless the Trustee against any and all Expenses actually incurred or paid by the Trustee in any Proceeding in connection with the Trustee’s service to the relevant Series, subject to the provisions of the following sentence and the provisions of Section 3 and paragraph (i) of Section 6 of this Agreement, provided that in any Proceeding initiated by the Trustee, other than one instituted pursuant to Section 6(e) or 6(g), the initiation of the Proceeding by the Trustee was approved in advance by a majority of the Non-Party Trustees. The Trustee shall be indemnified pursuant to this Section 2 against any and all Expenses unless (i) the Trustee is subject to such Expenses by reason of the Trustee’s not having acted in good faith in the reasonable belief that his or her action was in or not opposed to the best interests of the Series, (ii) the Trustee is liable to the Series or its shareholders by reason of the Trustee’s Disabling Conduct or (iii) in the case of a criminal proceeding, the Trustee had reasonable cause to believe that his or her conduct was unlawful, and with respect to each of (i), (ii) and (iii), there has been a Final Adjudication in the relevant Proceeding that the Trustee’s conduct fell within (i), (ii) or (iii).

-2-

3. Advancement of Expenses . Expenses, including accountants’ and counsel fees incurred by the Trustee (but excluding amounts paid in satisfaction of judgments, in compromise or as fines or penalties), shall be paid from time to time by the Trust on behalf of a Series in advance of Final Adjudication of a Proceeding in connection with the Trustee’s service to a Series, upon receipt by the Trust of an undertaking by or on behalf of the Trustee to repay amounts so paid to the Trust if it is ultimately determined that the Trustee is not entitled to indemnification of such Expenses under this Agreement, provided, that (a) the Trustee shall provide a surety bond or some other appropriate security for his or her undertaking, (b) the Trust shall be insured against losses arising by reason of the Trustee’s failure to fulfill his or her undertaking, or (c) a majority of a quorum of the Non-Party Trustees (provided that a majority of such Non-Party Trustees then in office act on the matter) or Special Counsel in a written opinion shall determine, based on a review of readily available facts (but not a full trial-type inquiry), that there is reason to believe the Trustee ultimately will be entitled to indemnification.

4. Presumptions . For purposes of the determination or opinion referred to in clause (c) of Section 3 or clauses (y)(i) or (y)(ii) of subsection (i) of Section 6 of this Agreement, the Non-Party Trustees or Special Counsel, as the case may be, shall be entitled to rely upon a rebuttable presumption that the Trustee has not engaged in Disabling Conduct.

5. Witness Expenses . To the extent the Trustee is, by reason of the Trustee’s service to the relevant Series, a witness for any reason in any Proceeding to which such Trustee is not a party, such Trustee shall be indemnified against any and all Expenses actually incurred by or on behalf of such Trustee in connection therewith.

6. Procedure for Determination of Entitlement to Indemnification and Advancements . A request by the Trustee for indemnification or advancement of Expenses shall be made in writing and shall be accompanied by such relevant documentation and information as is reasonably available to the Trustee. The Secretary of the Trust shall promptly advise the trustees of the Trust of such request.

(a) Methods of Determination . Upon the Trustee’s request for indemnification or advancement of Expenses, a determination with respect to the Trustee’s entitlement thereto shall be made in a manner consistent with the terms of this Agreement and the Declaration of Trust. The Trustee shall cooperate with the person or persons making such determination, including without limitation providing to such person or persons upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and is reasonably available to the Trustee and reasonably necessary to such determination. Any failure by the Trustee to cooperate with the person or persons making such determination shall extend as necessary and appropriate the period or periods described in paragraph (d) of this Section 6 regarding determinations deemed to have been made. Any Expenses incurred by the Trustee in so cooperating shall be borne by the relevant Series, irrespective of the determination as to the Trustee’s entitlement to indemnification or advancement of Expenses.

(b) Determinations Regarding Indemnification . A determination that the Covered Person is entitled to indemnification may be made by: (i) a Final Adjudication that the Trustee was not liable by reason of Disabling Conduct, (ii) dismissal of a court action or an administrative proceeding against the Trustee for insufficiency of evidence of Disabling Conduct, (iii) a reasonable determination, based upon a review of readily available facts (as opposed to a full trial-type inquiry), that the indemnitee was not liable by reason of Disabling

-3-

Conduct by (a) a vote of a majority of a quorum of the Non-Party Trustees or (b) a Special Counsel in a written opinion, or (iv) a vote of a majority of the shares of beneficial interest of the Trust outstanding and entitled to vote (excluding such shares owned of record or beneficially by the Trustee).

(c) Special Counsel . If the determination of entitlement to indemnification or advancement of Expenses is to be made by Special Counsel, the Special Counsel shall be selected by a majority of the Non-Party Trustees of the Trust (or, if there are no Non-Party Trustees with respect to the matter in question, by a majority of the Trustees of the Trust who are not “interested persons” of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “Independent Trustees”)), and the Trust shall give written notice to the Trustee advising the Trustee of the identity of the Special Counsel selected. The Trustee may, within five (5) days after receipt of such written notice, deliver to the Trust a written objection to such selection. Such objection may be asserted only on the ground that the Special Counsel so selected does not meet the requirements set forth in Section 1 and shall set forth with particularity the factual basis of such assertion. The Non-Party Trustees (or Independent Trustees, as the case may be) of the Trust shall determine the merits of the objection and, in their discretion, either determine that the proposed Special Counsel shall, despite the objection, act as such hereunder or select another Special Counsel who shall act as such hereunder.

If within fourteen (14) days after submission by the Trustee of a written request for indemnification or advancement of Expenses no such Special Counsel shall have been finally selected as provided in the previous paragraph, then either the Trust or the Trustee may petition an appropriate court of the Commonwealth of Massachusetts or any other court of competent jurisdiction for the appointment as Special Counsel of a person selected by the court or by such other person as the court shall designate, and the person so appointed shall act as Special Counsel.

The relevant Series shall pay all reasonable fees and Expenses charged or incurred by Special Counsel in connection with his, her or its determinations pursuant to this Agreement and shall pay all reasonable fees and Expenses incident to the procedures described in this paragraph, regardless of the manner in which such Special Counsel was selected or appointed.

(d) Failure to Make Timely Determination . Subject to paragraph (a) of this Section 6, if the person or persons empowered or selected to determine whether the Trustee is entitled to indemnification or advancement of Expenses (other than determinations that are made or to be made by a court) shall not have made such determination within thirty (30) days after receipt by the Trust of the request therefor, the requisite determination of entitlement to indemnification or advancement of Expenses shall be deemed to have been made, and the Trustee shall be entitled to such indemnification or advancement, absent (i) an intentional misstatement by the Trustee of a material fact, or an intentional omission of a material fact necessary to make the Trustee’s statement not materially misleading, in connection with the request for indemnification or advancement of Expenses, (ii) a prohibition of such indemnification or advancements under applicable law or the Declaration of Trust or the Trust’s by-laws, (iii) a requirement under the Investment Company Act of 1940, as amended, for insurance or security, which has not been satisfied, or (iv) a subsequent Final Adjudication or, in a matter disposed of without a Final Adjudication, determination pursuant to subsection (i) of Section 6, that the Trustee is not

-4-

entitled to indemnification under this Agreement; provided , however , that such period may be extended for a reasonable period of time, not to exceed an additional thirty (30) days, if the person or persons making the determination in good faith require such additional time to obtain or evaluate documentation or information relating thereto. Any assertion under clauses (i), (ii), or (iii) of this Section 6(d) shall be made in writing, specify the basis for the assertion, and be delivered to the Trustee within thirty (30) days after receipt by the Trust of the request for indemnification or advancement of Expenses (or any extension of such period provided under this Section 6(d)). The Trustee shall be entitled to adjudication of such assertion in an appropriate court of the Commonwealth of Massachusetts or any other court of competent jurisdiction.

(e) Payment upon Determination of Entitlement . If a determination is made pursuant to Section 2 or Section 3 (or is deemed to be made pursuant to paragraph (d) of this Section 6 and, in the case of advancement of Expenses, the other conditions are satisfied) that the Trustee is entitled to indemnification or advancement of Expenses, payment of any indemnification amounts or advancements owing to the Trustee shall be made within ten (10) days after such determination (and, in the case of advancements of further Expenses, within ten (10) days after submission of supporting information, including the required undertaking and evidence of any required security). If such payment is not made when due, the Trustee shall be entitled to adjudication of the Trustee’s entitlement to such indemnification or advancements in an appropriate court of the Commonwealth of Massachusetts or any other court of competent jurisdiction. The Trustee shall commence any proceeding seeking adjudication within 60 days following the date on which he or she first has the right to commence such proceeding pursuant to this paragraph (e). In any such proceeding, the Trust and the relevant Series shall be bound by the determination that the Trustee is entitled to indemnification or advancements, absent (i) an intentional misstatement by the Trustee of a material fact, or an intentional omission of a material fact necessary to make his or her statement not materially misleading, in connection with the request for indemnification or advancements, (ii) a prohibition of such indemnification or advancements under applicable law or (iii) a requirement under the Investment Company Act of 1940, as amended, for insurance or security, which has not been satisfied.

(f) Appeal of Adverse Determination . If a determination is made that the Trustee is not entitled to indemnification or advancements (other than determinations that are made by a court), the Trustee shall be entitled to adjudication of such matter in an appropriate court of the Commonwealth of Massachusetts or any other court of competent jurisdiction. Alternatively, the Trustee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. The Trustee shall commence such proceeding or arbitration within 60 days following the date on which the adverse determination is made. Any such judicial proceeding or arbitration shall be conducted in all respects as a de novo trial or arbitration on the merits, and the Trustee shall not be prejudiced by reason of such prior adverse determination.

(g) Expenses of Appeal . If the Trustee seeks arbitration or a judicial adjudication to determine or enforce his or her rights under, or to recover damages for breach of, the indemnification or Expense advancement provisions of this Agreement, the Trustee shall be entitled to recover from the relevant Series, and shall be indemnified by the relevant Series against, any and all Expenses actually incurred by the Trustee in such arbitration or judicial

-5-

adjudication, but only if the Trustee prevails therein. If it shall be determined in such arbitration or judicial adjudication that the Trustee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the expenses incurred by the Trustee in connection with such arbitration or judicial adjudication shall be appropriately prorated.

(h) Validity of Agreement . In any arbitration or judicial proceeding commenced pursuant to this Section 6, the Trust shall be precluded from asserting that the procedures and presumptions set forth in this Agreement are not valid, binding and enforceable against the Trust or relevant Series and shall stipulate in any such court or before any such arbitrator that the Trust is bound by all the provisions of this Agreement.

(i) Lack of Adjudication . Notwithstanding any provision herein to the contrary, as to any matter disposed of (whether by compromise payment, pursuant to a consent decree or otherwise) without a Final Adjudication by a court, or by any other body before which the Proceeding was brought, that the Trustee either (a) did not act in good faith in the reasonable belief that the Trustee’s action was in or not opposed to the best interests of the Series or (b) is liable to the Series or its shareholders by reason of Disabling Conduct, indemnification shall be provided if (x) there has been a determination that the Trustee did not engage in Disabling Conduct by the court or other body approving any settlement or other disposition of the matter or (y) there has been a reasonable determination, based upon a review of readily available facts (but not a full trial-type inquiry), that the Trustee acted in good faith in the reasonable belief that the Trustee’s action was in or not opposed to the best interests of the Series and is not liable to the Trust and the relevant Series or its shareholders by reason of Disabling Conduct, by (i) the vote of a majority of the Non-Party Trustees (provided that a majority of such Non-Party Trustees then in office act on the matter) or (ii) Special Counsel in a written opinion.

7. General Provisions .

(a) Non-Exclusive Rights . The provisions for indemnification of, and advancement of Expenses to, the Trustee set forth in this Agreement shall not be deemed exclusive of any other rights to which the Trustee may otherwise be entitled, including any other rights to be indemnified or have Expenses advanced by the Trust. The Trust shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Trustee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise, if such payment is not recoverable from the Trustee.

(b) Continuation of Provisions . This Agreement shall be binding upon all successors of the Trust, including without limitation any transferee of all or substantially all assets of a Series and any successor by merger, consolidation or operation of law and shall inure to the benefit of the Trustee’s spouse, heirs, assigns, devisees, executors, administrators and legal representatives. The provisions of this Agreement shall continue with respect to the Trust until the later of (i) ten (10) years after the Trustee has ceased to provide any service to the Trust or any Series and (ii) the final termination of all Proceedings in respect of which the Trustee has asserted, is entitled to assert or has been granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by the Trustee pursuant to Section 6 relating thereto. No amendment of the Declaration of Trust or by-laws of the Trust shall limit or eliminate the right of the Trustee to indemnification and advancement of Expenses set forth in this Agreement. The Trustee’s right of indemnification and advancement of Expenses set forth in this Agreement shall survive the Trustee’s death, disability, retirement or resignation as a Trustee.

-6-

(c) Selection of Counsel . The Trust shall be entitled to assume the defense of any Proceeding for which the Trustee seeks indemnification or advancement of Expenses under this Agreement. However, counsel selected by the Trustee shall conduct the defense of the Trustee to the extent reasonably determined by such counsel to be necessary to protect the interests of the Trustee, and the relevant Series shall indemnify the Trustee therefor to the extent otherwise permitted under this Agreement, if (i) the Trustee reasonably determines that there may be a conflict in the Proceeding between the positions of the Trustee and the positions of the Trust or the other parties to the Proceeding that are indemnified by the Trust and not represented by separate counsel, or the Trustee otherwise reasonably concludes that representation of both the Trustee, the Trust and such other parties by the same counsel would not be appropriate, or (ii) the Proceeding involves the Trustee but neither the Trust nor any such other party who is indemnified by the Trust and the Trustee reasonably withholds consent to being represented by counsel selected by the Trust. If the Trust shall not have elected to assume the defense of any such Proceeding for the Trustee within thirty (30) days after receiving written notice thereof from the Trustee, the Trust shall be deemed to have waived any right it might otherwise have to assume such defense. If the Trust does not assume or conduct the defense of any Proceeding, the Trustee shall not consent to a settlement or any other disposition not involving a Final Adjudication without the prior written consent of the Trust.

(d) D&O Insurance . To the extent the Trust maintains an insurance policy or policies providing liability insurance to its trustees or its trustees who are not “interested persons” of the Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, the Trustee shall be covered by such policy or policies at all times when serving as a trustee of the Trust, in accordance with its or their terms, to the maximum extent of the coverage available for any similarly situated trustee of the Trust. For a period of six (6) years after the Trustee has ceased to serve as a trustee of the Trust, whether through resignation, death or otherwise, and to the extent insurance as provided in the previous sentence does not continue to cover the Trustee even though he or she is no longer serving as a trustee of the Trust, the Trust shall purchase and maintain in effect, through “tail” or other appropriate coverage, one or more policies of insurance on behalf of the Trustee to the maximum extent of the coverage provided to then serving trustees of the Trust (or, if the Trust has been terminated, the coverage in effect immediately prior to such termination), unless the purchase of such insurance by the Trust is not permitted by applicable law, including for these purposes any fiduciary duties applicable to the persons then constituting the trustees of the Trust, such insurance is not generally available, or in the reasonable business judgment of the persons then constituting the trustees of the Trust, the premium for such insurance is substantially disproportionate to the amount of coverage afforded. In the event of liquidation of the Trust, the Trust shall, prior to such liquidation, establish one or more reserves in amounts reasonably necessary to meet its obligations under this Agreement, including, without limitation, amounts reasonably necessary to pay insurance premiums, to pay deductibles, or to meet claims for indemnification or defense costs that are not reasonably likely to be recovered under applicable insurance policies.

-7-

(e) Subrogation . In the event of any payment by any Series pursuant to this Agreement, the Series shall be subrogated to the extent of such payment to all of the rights of recovery of the Trustee, who shall, upon reasonable written request by the Trust on behalf of the Series and at the Series’ expense, execute all such documents and take all such reasonable actions as are necessary to enable the Trust to enforce such rights. Nothing in this Agreement shall be deemed to diminish or otherwise restrict the right of the Trust or the Trustee to proceed or collect against any insurers or to give such insurers any rights against the Trust under or with respect to this Agreement, including without limitation any right to be subrogated to the Trustee’s rights hereunder, unless otherwise expressly agreed to by the Trust in writing, and the obligation of such insurers to the Trust and the Trustee shall not be deemed to be reduced or impaired in any respect by virtue of the provisions of this Agreement.

(f) Notice of Proceedings . The Trustee shall promptly notify the Trust in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding that may be subject to indemnification or advancement of Expenses pursuant to this Agreement, but no delay in providing such notice shall in any way limit or affect the Trustee’s rights or the Trust’s obligations under this Agreement.

(g) Notices . All notices, requests, demands and other communications to a party pursuant to this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally (with a written receipt by the addressee) or two (2) days after being sent (i) by certified or registered mail, postage prepaid, return receipt requested or (ii) by nationally recognized overnight courier service to 100 Pearl Street, Hartford, CT 06103 (if addressed to the Trust), the address specified on the signature page of this Agreement (if addressed to the Trustee) or such other address as may have been furnished by such party by notice in accordance with this paragraph.

(h) Severability . If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, in whole or in part, for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation each portion of any Section of this Agreement containing any provision that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the remaining provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

(i) Modification and Waiver . This Agreement supersedes any existing or prior agreement between the Trust and the Trustee pertaining to the subject matter of indemnification and advancement of Expenses, other than the Declaration of Trust, the by-laws of the Trust and the terms of any liability insurance policies, which shall not be modified or amended by this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties or their respective successors or legal representatives; provided , however , that any supplements, modifications or amendments to the Declaration of Trust, by-laws or the terms of the liability insurance policy or policies of the Trust shall not be deemed to constitute supplements, modifications or amendments to this Agreement. Any waiver by either party of any breach by the other party of any provision contained in this Agreement to be performed by the other party must be in writing and signed by the waiving party or such party’s successor or legal representative, and no such waiver shall be deemed a waiver of similar or other provisions at the same or any prior or subsequent time.

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(j) Joinder of New Series . In the event that additional Series are created and added to the Trust from time to time, Appendix A listing each Series of the Trust covered by this Agreement may be amended to add the additional Series by the Trust’s execution and delivery to the Trustee of an amended Appendix A . Irrespective of whether the Trust executes and delivers to the Trustee an amended Appendix A , the additional Series shall be deemed a “Series” for all purposes of this Agreement as of the date that it is created and added to the Trust.

(k) Headings . The headings of the Sections of this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

(l) Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which when taken together shall constitute one document.

(m) Applicable Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts without reference to principles of conflict of laws.

(n) WAIVER OF RIGHT TO JURY TRIAL. BY EXECUTING THIS AGREEMENT, THE PARTIES KNOWINGLY AND WILLINGLY WAIVE ANY RIGHT THEY HAVE UNDER APPLICABLE LAW TO A TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE ISSUES RAISED BY THAT DISPUTE.

(o) Miscellaneous . Copies of the Declaration of Trust are on file with the Secretary of the Commonwealth of the Commonwealth of Massachusetts. The obligations of or arising out of this Agreement are not binding upon any of the Trust’s trustees, officers, employees, agents or shareholders individually, but are binding solely upon the assets and property of the respective Series in accordance with their proportionate interests hereunder. The assets and liabilities of each of the Series are separate and distinct, and the obligations of or arising out of this instrument are binding solely upon the assets or property of the respective Series.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in its name and on its behalf on the date set forth above.


VIRTUS INSIGHT TRUST, on behalf of Itself and each of its Series listed on Appendix A Attached Hereto				TRUSTEE


Name:				Name:
Title:
				Address for Notices:

APPENDIX A

INDEMNIFICATION AGREEMENT

RELATING TO TRUSTEES OF

VIRTUS INSIGHT TRUST

Virtus Insight Trust, on behalf of each of:

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

A-1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated February 22, 2013, relating to the financial statements and financial highlights which appears in the December 31, 2012 Annual Report to Shareholders of Virtus Insight Trust, which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings “Financial Highlights”, “Non-Public Portfolio Holdings Information”, “Independent Registered Public Accounting Firm” and “Financial Statements” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

April 29, 2013

VIRTUS MUTUAL FUNDS

FOURTH AMENDMENT

AMENDED AND RESTATED

PLAN PURSUANT TO RULE 18f-3

under the

INVESTMENT COMPANY ACT OF 1940

THIS AMENDMENT made effective as of the 8th day of August, 2012, amends that certain amended and restated plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended, duly adopted by the Board of Trustees on August 19, 2009 (the “Rule 18f-3 Plan”), as herein below provided:

W I T N E S S E T H:

WHEREAS, the Trusts and the Funds wish to amend Schedule A of the Rule 18f-3 Plan to: add Class I shares to the Virtus High Yield Fund and Virtus Global Opportunities Fund and to otherwise update the Schedule.

NOW, THEREFORE, in consideration of the foregoing premise, the Trusts and the Funds hereby agree that the Rule 18f-3 Plan is amended as follows:

1. Schedule A to the Rule 18f-3 Plan is hereby replaced with Schedule A attached hereto and made a part of the Rule 18f-3 Plan.

2. Except as herein provided, the Rule 18f-3 Plan shall be and remain unmodified and in full force and effect. All initial capitalized terms used herein shall have such meanings as ascribed thereto in the Rule 18f-3 Plan.

SCHEDULE A

(as of June 4, 2012)

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Balanced Allocation Fund

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund (formerly Virtus Short/Intermediate Bond Fund)

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector ^SM Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Infrastructure Fund

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus High Yield Fund

Virtus International Equity Fund

Virtus International Real Estate Securities Fund

Virtus Dynamic AlphaSector Fund (formerly Virtus Market Neutral Fund)

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector ^SM Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

VIRTUS MUTUAL FUNDS

FIFTH AMENDMENT

AMENDED AND RESTATED

PLAN PURSUANT TO RULE 18f-3

under the

INVESTMENT COMPANY ACT OF 1940

THIS AMENDMENT made effective as of the 28th day of August, 2012, amends that certain amended and restated plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended, duly adopted by the Board of Trustees on August 19, 2009 (the “Rule 18f-3 Plan”) and amended from time to time, as herein below provided:

W I T N E S S E T H:

WHEREAS, the Trusts and the Funds wish to amend Schedule A of the Rule 18f-3 Plan to reflect the addition of the following new series: Virtus Emerging Markets Debt Fund, Virtus Emerging Markets Equity Income Fund, Virtus Herzfeld Fund, Virtus International Small-Cap Fund and Virtus Wealth Masters Fund and to otherwise update the Schedule.

NOW, THEREFORE, in consideration of the foregoing premise, the Trusts and the Funds hereby agree that the Rule 18f-3 Plan is amended as follows:

Schedule A to the Rule 18f-3 Plan is hereby replaced with Schedule A attached hereto and made a part of the Rule 18f-3 Plan.

Except as herein provided, the Rule 18f-3 Plan shall be and remain unmodified and in full force and effect. All initial capitalized terms used herein shall have such meanings as ascribed thereto in the Rule 18f-3 Plan.

SCHEDULE A

(as of August 28, 2012)

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Dynamic AlphaSector Fund

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Infrastructure Fund

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

VIRTUS MUTUAL FUNDS

SIXTH AMENDMENT

AMENDED AND RESTATED

PLAN PURSUANT TO RULE 18f-3

under the

INVESTMENT COMPANY ACT OF 1940

THIS AMENDMENT made effective as of the 21 ^st day of September, 2012, amends that certain amended and restated plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended, duly adopted by the Board of Trustees on August 19, 2009 (the “Rule 18f-3 Plan”) and amended from time to time, as herein below provided:

W I T N E S S E T H:

WHEREAS, the Trusts and the Funds wish to amend Schedule A of the Rule 18f-3 Plan to reflect the conversion of all Class B shares of Virtus Growth & Income Fund into Class A shares of the Fund and to otherwise update the Schedule.

NOW, THEREFORE, in consideration of the foregoing premise, the Trusts and the Funds hereby agree that the Rule 18f-3 Plan is amended as follows:

Schedule A to the Rule 18f-3 Plan is hereby replaced with Schedule A attached hereto and made a part of the Rule 18f-3 Plan.

SCHEDULE A

(as of September 21, 2012)

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus Equity Trust

Virtus Balanced Fund

Virtus Growth & Income Fund

Virtus Mid-Cap Core Fund

Virtus Mid-Cap Growth Fund

Virtus Mid-Cap Value Fund

Virtus Quality Large-Cap Value Fund

Virtus Quality Small-Cap Fund

Virtus Small-Cap Core Fund

Virtus Small-Cap Sustainable Growth Fund

Virtus Strategic Growth Fund

Virtus Tactical Allocation Fund

Virtus Insight Trust

Virtus Core Equity Fund

Virtus Emerging Markets Opportunities Fund

Virtus High Yield Income Fund

Virtus Insight Government Money Market Fund

Virtus Insight Money Market Fund

Virtus Insight Tax-Exempt Money Market Fund

Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

Virtus Value Equity Fund

Virtus Opportunities Trust

Virtus Allocator Premium AlphaSector Fund

Virtus AlphaSector Rotation Fund

Virtus Alternatives Diversifier Fund

Virtus Bond Fund

Virtus CA Tax-Exempt Bond Fund

Virtus Dynamic AlphaSector Fund

Virtus Emerging Markets Debt Fund

Virtus Emerging Markets Equity Income Fund

Virtus Foreign Opportunities Fund

Virtus Global Commodities Stock Fund

Virtus Global Infrastructure Fund

Virtus Global Opportunities Fund

Virtus Global Premium AlphaSector Fund

Virtus Global Real Estate Securities Fund

Virtus Greater Asia ex Japan Opportunities Fund

Virtus Greater European Opportunities Fund

Virtus Herzfeld Fund

Virtus High Yield Fund

Virtus International Equity Fund

A
Shares

B
Shares

C
Shares

I
Shares

T
Shares

X
Shares

Y
Shares

Virtus International Real Estate Securities Fund

Virtus International Small-Cap Fund

Virtus Multi-Sector Fixed Income Fund

Virtus Multi-Sector Short Term Bond Fund

Virtus Premium AlphaSector Fund

Virtus Real Estate Securities Fund

Virtus Senior Floating Rate Fund

Virtus Wealth Masters Fund

VIRTUS MUTUAL FUNDS

SEVENTH AMENDMENT

AMENDED AND RESTATED

PLAN PURSUANT TO RULE 18f-3

under the

INVESTMENT COMPANY ACT OF 1940

THIS AMENDMENT made effective as of the 18 ^th day of December, 2012, amends that certain amended and restated plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended, duly adopted by the Board of Trustees on August 19, 2009 (the “Rule 18f-3 Plan”) and amended from time to time, as herein below provided:

W I T N E S S E T H:

WHEREAS, the Trusts and the Funds wish to amend Schedule A of the Rule 18f-3 Plan to reflect the addition of the following new series: Virtus Disciplined Equity Style Fund, Virtus Disciplined Select Bond Fund and Virtus Disciplined Select Country Fund and to otherwise update the Schedule.

NOW, THEREFORE, in consideration of the foregoing premise, the Trusts and the Funds hereby agree that the Rule 18f-3 Plan is amended as follows:

Schedule A to the Rule 18f-3 Plan is hereby replaced with Schedule A attached hereto and made a part of the Rule 18f-3 Plan.

SCHEDULE A

(as of December 18, 2012)


	A Shares	B Shares	C Shares	I Shares	T Shares
Virtus Equity Trust
Virtus Balanced Fund	X	X	X
Virtus Growth & Income Fund	X		X	X
Virtus Mid-Cap Core Fund	X		X	X
Virtus Mid-Cap Growth Fund	X	X	X	X
Virtus Mid-Cap Value Fund	X		X	X
Virtus Quality Large-Cap Value Fund	X		X	X
Virtus Quality Small-Cap Fund	X		X	X
Virtus Small-Cap Core Fund	X	X	X	X
Virtus Small-Cap Sustainable Growth Fund	X		X	X
Virtus Strategic Growth Fund	X	X	X	X
Virtus Tactical Allocation Fund	X	X	X
Virtus Insight Trust
Virtus Core Equity Fund	X		X	X
Virtus Emerging Markets Opportunities Fund	X		X	X
Virtus High Yield Income Fund	X		X	X
Virtus Insight Government Money Market Fund	X			X
Virtus Insight Money Market Fund	X			X
Virtus Insight Tax-Exempt Money Market Fund	X			X
Virtus Low Duration Income Fund	X		X	X
Virtus Tax-Exempt Bond Fund	X		X	X
Virtus Value Equity Fund	X		X	X
Virtus Opportunities Trust
Virtus Allocator Premium AlphaSector Fund	X		X	X
Virtus AlphaSector Rotation Fund	X		X	X
Virtus Alternatives Diversifier Fund	X		X	X
Virtus Bond Fund	X	X	X	X
Virtus CA Tax-Exempt Bond Fund	X			X
Virtus Disciplined Equity Style Fund	X		X	X
Virtus Disciplined Select Bond Fund	X		X	X
Virtus Disciplined Select Country Fund	X		X	X
Virtus Dynamic AlphaSector Fund	X	X	X
Virtus Emerging Markets Debt Fund	X		X	X
Virtus Emerging Markets Equity Income Fund	X		X	X
Virtus Foreign Opportunities Fund	X		X	X
Virtus Global Commodities Stock Fund	X		X	X
Virtus Global Dividend Fund (formerly Virtus Global Infrastructure Fund)	X		X	X
Virtus Global Opportunities Fund	X	X	X	X
Virtus Global Premium AlphaSector Fund	X		X	X
Virtus Global Real Estate Securities Fund	X		X	X
Virtus Greater Asia ex Japan Opportunities Fund	X		X	X


	A Shares	B Shares	C Shares	I Shares	T Shares
Virtus Greater European Opportunities Fund	X		X	X
Virtus Herzfeld Fund	X		X	X
Virtus High Yield Fund	X	X	X	X
Virtus International Equity Fund	X		X	X
Virtus International Real Estate Securities Fund	X		X	X
Virtus International Small-Cap Fund	X		X	X
Virtus Multi-Sector Fixed Income Fund	X	X	X
Virtus Multi-Sector Short Term Bond Fund	X	X	X	X	X
Virtus Premium AlphaSector Fund	X		X	X
Virtus Real Estate Securities Fund	X	X	X	X
Virtus Senior Floating Rate Fund	X		X	X
Virtus Wealth Masters Fund	X		X	X

CODE OF ETHICS

Amended and Restated October 1, 2012

1.	Introduction

This Code of Ethics (the “Code”) has been adopted individually by the entities listed in Schedule A, referred to herein (individually) as the “Firm”. This Code is administered by each Firm’s designated Chief Compliance Officer or their delegate as a separate program. Each Firm may attach to this Code an appendix describing any unique provisions the Firm has made to provide additional requirements or modify requirements set forth by this Code.

2.	Standard of Business Conduct

Statement of Ethical Principles

The Firm holds its Supervised Persons to a high standard of integrity and business practices. In serving their respective shareholders and clients, the Firm strives to avoid conflicts of interest or the appearance of conflicts of interest related to the personal trading activities of its Supervised Persons and the securities transactions in any managed account.

The Firm acknowledges its confidence in the integrity and good faith of all of its Supervised Persons. The Firm recognizes that the knowledge of present or future portfolio transactions or the power to influence portfolio transactions, if held by such individuals, could place them in a position where their personal interests might conflict with those of the managed account, if they were to trade in securities eligible for investment by the managed account.

In view of the foregoing and of the provisions of Sections 204-2 and 204A-1 under the Investment Advisers Act of 1940 (Advisers Act), as amended, and Rule 17j-1 of the Investment Company Act, as amended, the Firm has adopted this Code to specify and prohibit certain types of transactions deemed to create conflicts of interest or the potential for or appearance of such a conflict, and to establish reporting requirements and enforcement procedures. Because the Firm cannot foresee all possible situations, the Firm ultimately relies upon the integrity and judgment of its personnel, in addition to requirements set forth by this Code. This Code presents a framework against which all Supervised Persons should seek to measure their conduct. When Supervised Persons covered by this Code engage in personal securities transactions, they must adhere to the following general principles and the Code’s specific provisions:

At all times, the interests of the Firm and its Clients must be paramount;

Personal transactions must be conducted consistent with this Code in a manner that avoids any actual or potential conflict of interest;

No inappropriate advantage should be taken of any position of trust and responsibility;

Information about the identity of security holdings and financial circumstances of Clients is confidential;

Ensure that the investment management and overall business of the Firm complies with the policies of the Firm, Virtus Investment Partners (Virtus) and applicable U.S. federal and state securities laws and regulations; and

Supervised Persons are required to adhere to the standards of business conduct in the Virtus Code of Conduct.

Unlawful Actions

It is unlawful for any Supervised Person, in connection with the purchase or sale, directly or indirectly, by them of a security held or to be held by any Client account to:

Employ any device, scheme or artifice to defraud any Client;

Make any untrue statement of a material fact to any Client or omit to state a material fact necessary in order to make the statements made to any Client, in light of the circumstances under which they are made, not misleading;

Engage in any act, practice or course of business that operates or would operate as a fraud or deceit on any Client; or to engage in any manipulative practice with respect to any Client; and

Divulge or act upon any material, non-public information, as is defined under relevant securities laws.

3.	Definitions

A. “Access Person” means all directors, officers, general partners, partners of the Firm and Advisory Persons of Firm’s Advisers (or other persons occupying a similar status or performing similar functions). In addition, Access Person means all Supervised Persons, who:

Are involved in making securities recommendations to Clients; or

Have access to nonpublic information regarding the following:

(a)

Any Clients’ purchase or sale of securities, or recommendation to purchase or sell such securities; or

(b)

Information regarding the portfolio holdings of any fund the Firm or its control affiliates manage.

“Advisers Act” means the Investment Advisers Act of 1940, as amended.

“Advisory Person” means (i) any Access Person of the Firm or of any company in a control relationship to the Firm, who, in connection with their regular functions or duties, makes, participates in or obtains information regarding the purchase or sale of a security by the Firm for a Client, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Firm who obtains information concerning recommendations made to the Client with regard to the purchase or sale of a security.

“Affiliated Officer” means (i) any corporate officer or director of the Firm who is not a resident at the Firm’s business location; and (ii) is subject to the provisions of an affiliate’s code of ethics for personal trading.

“Affiliated Open-End Mutual Fund” means any open-end mutual fund to which the Firm or its control affiliate(s) serve as the investment adviser or principal underwriter. Currently, this means all open-end (non-exchange traded) Virtus Mutual Funds. See also the definition of “Unaffiliated Open-End Mutual Fund” in section W. below.

“Being considered for Purchase or Sale” means when a security for which a recommendation to purchase or sell has been made and communicated; and with respect to the Advisory Person making the recommendation, when such person seriously considers making such a recommendation.

“Beneficial Ownership” shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (the Exchange Act) in determining whether a person is the beneficial owner of a security for purposes of Section 16 of the Exchange Act and the rules and regulations there under. It includes ownership by any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in a security. For purposes hereof,

“Pecuniary Interest” means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security.

“Indirect Pecuniary Interest” includes, but is not limited to:

(a)

Securities held by Immediate Family Members sharing the same household;

(b)

A general partner’s proportionate interest in portfolio securities held by a general or limited partnership;

(c)

A person’s right to dividends that is separated or separable from the underlying securities (otherwise, a right to dividends alone will not constitute a pecuniary interest in securities);

(d)

A person’s interest in securities held by a trust;

(e)

A person’s right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable; and

(f)

A performance-related fee, other than an asset based fee, received by any broker, dealer, bank, insurance company, investment company, investment manager, trustee, or person or entity performing a similar function, with certain exceptions (see Rule 16a-1(a)(2)of the Exchange Act).

An Access Person is presumed to have Beneficial Ownership in, and so an obligation to report, the securities held by his or her Immediate Family Members. Access Persons should note that the Firm’s policies and procedures with respect to personal securities transactions also apply to transactions by a spouse, domestic partner, child or other Immediate Family Member residing in the same household. See definition of “Immediate Family Member” in section M. below.

“Chief Compliance Officer” or “CCO” refers to the person appointed by the Firm pursuant to the provisions of Section 206(4)-7 of the Advisers Act.

“Client” means each and every investment company, or series thereof, or other account managed by the Firm.

“Control” shall have the same meaning as that in Section 2(a) (9) of the Investment Company Act.

“Covered Associate” is a term used in the Firm’s Pay to Play Policy and Procedures and is incorporated by reference.

“Firm” means each of the entities listed in Schedule A who have each adopted this Code and administer it under their respective individual compliance programs managed by their designated Chief Compliance Officer or his/her delegate.

“Immediate Family Member” shall have the following meaning: With respect to personal securities reporting requirements, terms such as “Employee”, “Personal Brokerage Account”, “Supervised Person” and “Access Person” are defined to include any Supervised Person’s or Access Person’s spouse or domestic partner who share their household and any relative by blood, adoption or marriage living in the Supervised or Access Person’s household. This definition includes children (including financially dependent children away at school), stepchildren, grandchildren, parents, stepparents, grandparents, siblings and parents-children-or siblings-in-law.

“Initial Public Offering” or “IPO” means an offering of securities registered under the Securities Act of 1933 as amended, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act.

“ Investment Company Act” means the Investment Company Act of 1940, as amended.

“Managed Fund or Portfolio” shall mean those Clients, individually and collectively, for whom the Portfolio Manager makes buy and sell decisions.

“Personal Brokerage Account” refers to any account (including, without limitation, a custody account, safekeeping account and an account maintained by an entity that may act in a brokerage or a principal capacity) in which securities may be traded or custodied, and in which an Access Person has any Beneficial Ownership, and any such account of an Immediate Family Member. The meaning of “Personal Brokerage Account” includes accounts in which an Access Person may hold or acquire Reportable Securities, even though the account currently holds only non-Reportable Securities (such as unaffiliated open-end mutual funds). To the extent that the Virtus 401(k) plan and potentially 401(k) plans of an Access Person’s prior employer(s) or 401(k) plans of Immediate Family Members have the capacity to invest in Affiliated Open-end Mutual Funds and/or other Reportable Securities, such accounts are considered “Personal Brokerage Accounts”. Furthermore, Individual Retirement Accounts (i.e.: “IRAs”) that are constructed within a brokerage account capable of transacting in Reportable Securities are also considered “Personal Brokerage Accounts”.

The meaning of “Personal Brokerage Account” does not include the following: open-end mutual funds held directly with the sponsor in an account that is not capable of transacting in Reportable Securities; 401(k) accounts that may only hold non-affiliated open-end mutual funds; other accounts that cannot transact in Reportable Securities as determined by the Compliance Department; and direct purchase accounts such as “DRIP” plans.

“Fund Portfolio Manager” or “Portfolio Manager” is an Advisory Person (or one of the Advisory Persons) entrusted with the day-to-day management of the Fund’s portfolio.

“Private Placement” or “Limited Offering” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) thereof, or pursuant to Rule 504, Rule 505 or Rule 506 there under.

“Purchase or sale of a Reportable Security” includes, among other things, the writing of an option to purchase or sell a security, or the purchase or sale of a security, that is exchangeable for or convertible into, a security that is held or to be acquired for a Client.

“Reportable Security” shall have the meaning set forth in Section 2(a)(36) of the Investment Company Act, and Rule 204A-1 of the Advisers Act as amended, and includes common stocks, preferred stocks, stock options (put, call and straddle), debt securities, privilege on any security or on any group or index of securities (including any interest therein or based on the value thereof) and derivative instruments, ETFs, UIT ETFs, closed-end funds, other well-known stock indices vehicles, such as the Standard & Poor’s 500 Composite Stock Indices (such as but not limited to SPDR S&P 500, SPDR S&P MidCap 400, “iShares”, etc.); affiliated open-end mutual funds and municipal securities.

The meaning of “Reportable Security” shall not include transactions and holdings in direct obligations of the Government of the United States; money market instruments; bankers’ acceptances, bank certificates of deposit, commercial paper, repurchase agreements and other high quality short-term debt instruments; shares of money market funds; transactions and holdings in shares of non-affiliated open-end mutual funds; and transactions in units of a unit investment trust if the unit investment trust is invested exclusively in unaffiliated open-end mutual funds. Note: This exception extends only to open end funds registered in the U.S.; therefore, transactions and holdings in offshore funds ARE reportable .

“Supervised Person” means any director, officer, and partner of the Firm (or other person occupying a similar status or performing similar functions); an employee of the Firm; and any other person who provides advice on behalf of the Firm and is subject to the Firm’s supervision and control. To affect such policies as required by this Code, the Firm’s CCO shall further classify certain Supervised Persons as an “Access Person”, or “Advisory Person”.

“Unaffiliated Open-End Mutual Fund” means any open-end mutual fund not falling within the definition of “Affiliated Open-End Mutual Fund” defined in section E. above, i.e., any open-end mutual fund to which the Firm or its control affiliate(s) do not serve as the investment adviser or principal underwriter for the fund. Currently, this means all open-end (non-exchange traded) mutual funds except for the Virtus Mutual Funds.

4.	Disclosure of Personal Brokerage Accounts ¹

All Access Persons must disclose their Personal Brokerage Accounts to their respective Compliance Department. Each Access Person’s responsibility is to notify their respective Compliance Department of all Personal Brokerage Accounts and to direct the broker to provide their Compliance Department with brokerage transaction confirmations and account statements (and verify that it has been done). Access Persons cannot assume that the broker-dealer will automatically arrange for this information to be set up and forwarded correctly. Access Persons do not need to disclose the existence of their Virtus-Fidelity 401(k) account, however any other Virtus Fidelity account holding securities, options or restricted stock of Virtus must be disclosed. 401(k) plans of an Access Person’s prior employer(s) or 401(k) plans of Immediate Family Members must be disclosed if such accounts have the capacity to invest in Affiliated Open-end Mutual Funds and/or other Reportable Securities.

5.	Prohibited Activities for Access Persons

Initial Public Offering (“IPO”) Rule: No Access Person may directly or indirectly acquire beneficial ownership in any securities in an IPO, without the prior written approval of the CCO. This also applies to IPO’s offered through the internet. No FINRA registered person or Portfolio Manager may participate in an IPO pursuant to FINRA Rule 5130.

Private Placement / Limited Offering Rule: No Access Person may directly or indirectly acquire beneficial ownership in any securities in a Private Placement or Limited Offering without the prior written approval of the CCO. The approved purchase should be disclosed to the Client if they are considering that issuer’s securities for purchase or sale.

Preclearance Rule: No Access Person may directly or indirectly acquire or dispose of beneficial ownership in a Reportable Security unless the transaction has been pre-cleared by the Compliance Department. Preclearance is valid through the next business day at the close of the U.S. market following the approval. An order not executed within that time must be re-submitted for preclearance approval. Access Persons must wait for approval before placing the order with their broker.

¹	Certain Supervised Persons are subject to the requirements of Section 4. Please see the Appendix following this Code.

Exceptions: The following Reportable Securities transactions do not require preclearance:

Purchases or sales of up to and including 500 shares per month of Reportable Securities in any issuer ranked in the S&P 500 at the time of the transaction. An S&P 500 holding list is updated quarterly and available on the Virtus intranet website. A copy is also available for review in your Firm’s Compliance Department. The Compliance Department monitors de minimis trading for patterns of abuse. If a pattern of abuse is determined to have occurred, the Compliance Department reserves the right to suspend or cancel the ability of an Access Person to conduct de minimis transactions.

Transactions in Affiliated Open-End Mutual Funds.

Purchase orders of Reportable Securities sent directly to the issuer via mail (other than in connection with a Private Placement or Limited Offering) or sales of such securities that are redeemed directly by the issuer via mail.

Purchases or sales of Reportable Securities effected in any account over which the Access Person has no direct or indirect influence or control in the reasonable estimation of the Firm’s CCO. This exemption will apply to Personal Brokerage Accounts for which a third party, such as a broker or financial advisor, makes all investment decisions on behalf of the Access Person and the Access Person does not discuss any specific transactions for the account with the third-party manager.

Purchases or sales of Reportable Securities (i) not eligible for purchase or sale by the Client; or (ii) specified from time to time by the Firm’s Directors, subject to rules the Firm’s Directors shall specify.

Purchases of shares of Reportable Securities necessary to establish an automatic investment or dividend reinvestment plan, as well as any subsequent purchases and sales pursuant to any such automatic investment or dividend reinvestment plan.

Purchases of Reportable Securities effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent the rights were acquired from the issuer, and sales of such rights so acquired.

Purchases or sales of Reportable Securities issued under an employee stock purchase or incentive program unless otherwise restricted.

Non-volitional transactions (such as stock splits, dividends, corporate actions, etc.).

Note: The foregoing are exceptions to the Preclearance Rule only; other provisions of this Code may apply.

The Firm’s CCO or other designated compliance personnel may deny approval of any transaction requiring preclearance under this Pre-clearance Rule, even if nominally permitted under the Code, if believed that denial is necessary for the protection of the Client or the Firm.

Open Order Rule: No Access Person may directly or indirectly acquire or dispose of the Beneficial Ownership in any Reportable Security that requires preclearance (i.e., is not exempt from preclearance) when a Client has a pending buy or sell for that security of the same type until the Client’s order is executed or withdrawn.

Blackout Rule: Portfolio Managers and Advisory Persons may not directly or indirectly acquire or dispose of Beneficial Ownership in a Reportable Security within seven calendar days before and after the portfolio(s) associated with the Portfolio Manager’s and Advisory Person’s assigned duties trades in that security. The seven-day period is exclusive of the execution date. The Blackout Rule applies to transactions in securities that are required to be precleared.

Holding Period Rule: Access Persons must hold all Reportable Securities for no less than sixty (60) days, whether or not the purchase was an exempt transaction under any other provision of Section 5. Generally, a first-in first-out (“FIFO”) accounting methodology will be applied for determining compliance with this holding rule.

Gifts and Entertainment: Supervised Persons designated by the Firm’s CCO may not give or receive gifts or payments that may be construed to have an influence on business transactions conducted by the Firm. Gifts to or from Consultants or Clients must not exceed $100 per person per year. Gifts include any items of value, including sports paraphernalia or equipment, wine or food baskets, gift certificates for shopping or to a restaurant or spa. Tickets to events are considered gifts if the associate does not attend the event. The $100 limit that applies to gifts does not apply to entertainment. Nonetheless, entertainment must be neither so frequent nor so extensive as to raise any question of impropriety. The CCO or other designated personnel will

maintain records of all gifts and payments of $100 or more per person and all entertainment. ALL gifts and entertainment received or given must be reported to the Compliance Department. Supervised Persons designated by the Firm’s CCO are required to submit a log quarterly.

Serving on Boards of Directors: No Advisory Person shall serve on the board of directors of a publicly traded company without prior authorization from Virtus Investment Partners Inc. Counsel or the Firm’s CCO. If authorized, the Advisory Person shall have no role in making investment decisions with respect to the publicly traded company.

Excessive Trading Rule: No Portfolio Manager shall engage in excessive trading or market timing activities with respect to any mutual fund regardless of whether or not the mutual fund is managed by that Firm/Sub-advisor or any affiliated adviser/sub-advisor. Market timing is defined as a purchase and redemption, regardless of size, in and out of the same mutual fund within any sixty (60) day period. The foregoing restrictions shall not apply to Portfolio Managers investing in mutual funds through asset allocation programs, automatic reinvestment programs, and any other non-volitional investment vehicles.

Material, Non-public Information: No Supervised Person shall divulge or act upon any material, non-public information as defined under relevant securities laws. For more information, refer to the Firm’s Insider Trading Policy and Procedures .

Pay to Play Rule: The SEC has adopted Rule 206(4)-5 of the Advisers Act (the Rule or Pay to Play Rule) as a means to curtail the ability of investment advisers to use political contributions to influence state and municipal government officials responsible for hiring the investment advisers, otherwise known as pay for play practices. Under the Rule, political contributions made by advisers or their personnel or affiliates may result in serious limitations on the advisers’ ability to receive compensation for the management of certain public funds. It does not prohibit political contributions but does prohibit the adviser from receiving compensation from that government plan. The Rule does not preempt state or local pay to play laws. The Firm and its Covered Associates, as defined in the Firm’s Pay to Play policy (“policy”), are prohibited from doing anything indirectly which, if done directly, would violate the Rule. This could include contributions made by Immediate Family Members even though they are not considered Covered Associates.

Effective with this Code, if a Covered Associate, as defined in the policy, is entitled to vote for a government official, they may only contribute $350 or less to that official per election. If they are not entitled to vote for a government official, they may only contribute $150 or less to that official per election. Contributions to political parties and PACs are prohibited if they are made as a means to do indirectly what is prohibited if done directly (for example, the contribution is earmarked or known to be provided for the benefit of a particular Official). For this reason, contributions in excess of the de minimus amounts above should not be made to a PAC known to be controlled by, or affiliated with, an Official or to a state or local political party if it is reasonably expected to benefit an Official. Associates are required to report to Compliance all contributions made on a quarterly basis. Please refer to the Firm’s Pay to Play separate policy.

6.	Reporting & Compliance Procedures ²

Duplicate Trade Confirmations and Personal Brokerage Account Statements: All Access Persons shall direct their brokers to supply, at the same time that they are sent to the Access Person, a copy of the confirmation for each personal Reportable Securities trade in a Personal Brokerage Account and a copy, at least quarterly, of an account statement for each Personal Brokerage Account to their respective Compliance Department (an electronic feed from the broker will satisfy these requirements). Access to duplicate confirmations and account statements will be restricted to those persons assigned to perform review functions, and all materials will be kept confidential except as required by law.

Quarterly Transactions Reports: Access Persons shall report to the Firm the information (specified further below) with respect to transactions in any Reportable Security in which the Access Person has, or by reason of that transaction acquires, any direct or indirect Beneficial Ownership in the Reportable Security.

Access Persons shall not be required to make a report with respect to transactions effected for any account over which that person lacks any direct or indirect influence or control in the reasonable estimation of the Firm’s CCO.

²	Certain Supervised Persons are subject to the requirements of Sections 6A, 6B and 6C. Please see the Appendix following this Code.

Every Quarterly Transaction Report shall be made no later than 15 days after the end of the calendar quarter and shall include all transactions in Reportable Securities effected during the calendar quarter being reported on. Quarterly Transaction Reports shall contain the following information:

(i)

The date of the transaction in the Reportable Security, the title and number of shares of equity securities; or, the maturity date, principal amount and interest rate of debt securities, of each Reportable Security involved; and as applicable, the exchange ticker symbol or cusip number;

(ii)

The type of transaction (i.e., purchase, sale, or any other type of acquisition or disposition);

(iii)

The price of the Reportable Security at which the transaction was effected;

(iv)

The name of the broker, dealer or bank with or through whom the transaction was effected; and

(v)

The date the report is submitted.

To the extent that the Access Person certified that the Compliance Department is receiving duplicate statements of Personal Brokerage Accounts, the above disclosures are considered to have been made for transactions in Reportable Securities occurring in those Personal Brokerage Accounts.

Initial and Annual Holdings Reports: Each Access Person shall submit an Initial Holdings and Annual Holdings Report listing all personal Reportable Securities holdings to their Firm’s Compliance Department upon the commencement of service and annually thereafter (the Initial Holdings Report and the Annual Holdings Report , respectively). The information on the Initial Holdings Report must be current as of a date not more than 45 days prior to the date the individual becomes an Access Person. An Initial Holdings Report and certification must be submitted to their Firm’s Compliance Departments no later than 10 days after becoming an Access Person. The Annual Holdings Report holdings information shall be as of December 31 of the prior year. Access Persons shall submit the Annual Holdings Report and certification to their Firm’s Compliance Department by January 31 of each year. Access Persons shall include on their Annual Holdings Report any holdings in Affiliated Open-end Mutual Funds including those held in the Access Person’s Virtus-Fidelity 401(k) plan.

Every Initial Holdings Report and Annual Holdings Report required pursuant to this section shall contain the following information for Reportable Securities:

(i)

The title, type and number of shares of equity securities; and/or the maturity date, principal amount and interest rate of debt securities; and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Reportable Security in which the Access Person has any direct or indirect Beneficial Ownership;

(ii)

The name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect Beneficial Ownership;

(iii)

The date the Access Person submits the report; and

(iv)

For Initial Holdings Reports and Annual Holdings Reports, a certification by the Supervised Person that he or she has read, understood, has complied, and shall continue to comply with the requirements of this Code and the Firm’s Insider Trading Policy and Procedures.

Exceptions to reporting requirements (Quarterly Transactions and Initial and Annual Holdings):

(i)

Any report of Reportable Securities held in accounts over which the Access Person had no direct or indirect influence or control;

(ii)

A Quarterly Transaction Report of Reportable Securities transactions effected pursuant to an automatic investment plan; and

(iii)

A Quarterly Transaction Report if it would duplicate information contained in broker trade confirmations or account statements received no later than 30 days after the end of the applicable calendar quarter.

Any report made under this Section 6 may contain a statement that the report shall not be construed as an admission by the person making such reports that he or she has any direct or indirect Beneficial Ownership in the security to which the report relates.

The Firm’s CCO shall submit an annual report to the Fund Board of Directors/Trustee for any fund advised or sub-advised by the Firm that summarizes the current Code procedures, identifies any violations requiring significant remedial action, and recommends appropriate changes to the Code, if any.

Any Supervised Person must promptly report possible violations of the Code to the Firm’s CCO or other designee (including but not limited to potential conflicts of interest) when they suspect, in good faith, that a violation may have occurred or is reasonably likely to occur. If a matter implicates the Firm’s CCO or other designee, notice of a violation should be reported to the Virtus Investment Partners Inc. CCO. Failure to do so is in itself a violation of this Code. No retaliation or retribution of any kind will be taken against any Supervised Person who, in good faith, reports a suspected violation of this Code. To the extent possible under the circumstances, all information will be kept confidential.

The Firm’s Compliance Department will review all reports and other information submitted under Section 6. This review will include comparisons with trading records of Client accounts as are necessary or appropriate in determining whether there have been any violations of the Code.

The Firm’s Compliance Personnel will maintain a list of all Supervised Persons, Access Persons, Advisory Persons, and Portfolio Managers who are required to make reports under the Code, and shall inform such individuals of their reporting obligations and if any requirement of this Code has not been complied with.

The Firm shall provide a copy of the Code and any amendments to all Supervised Persons and obtain their written acknowledgement of receipt.

7.	401(k) Plans and the Requirements of the Code ³

Disclosure of Personal Brokerage Accounts: Access Persons are not required to disclose the existence of their Virtus-Fidelity 401(k) plan, but Access Persons must disclose any other 401(k) account if the account can transact in Affiliated Open-end Mutual Funds and/or other Reportable Securities.

Preclearance Rule: Access Persons are not required to preclear transactions in Affiliated Open-end Mutual Funds (e.g., transferring amounts from one fund to another) or contributions in the form of payroll deductions. Access Persons are required to preclear transactions in Reportable Securities that are not exceptions to the Preclearance Rule of Section 5 (e.g., the sale of previous employer’s stock).

Duplicate Trade Confirmations and Personal Brokerage Account Statements: If an Access Person has a 401(k) account from a previous employer that can transact in Affiliated Open-end Mutual Funds and/or other Reportable Securities, the Access Person shall direct her broker to supply, at the same time that they are sent to the Access Person, a copy of the confirmation for each personal Reportable Securities trade and a copy, at least quarterly, of an account statement to the Access Person’s Compliance Department for each 401(k) account other than the Virtus-Fidelity 401(k) plan.

³	Certain Supervised Persons are subject to the requirements of Sections 7A and 7C – 7E. Please see the Appendix following this Code.

Quarterly Transactions Reports: If the Compliance Department is not receiving copies of broker trade confirmations or account statements, Access Persons are required to submit a Quarterly Transaction Report for transactions in Reportable Securities (e.g., Affiliated Open-end Mutual Funds or a previous employer’s stock) for 401(k) accounts other than the Virtus-Fidelity 401(k) plan.

Initial and Annual Holdings Reports: Access Persons are required to report all holdings in Reportable Securities, including holdings in the Virtus-Fidelity 401(k) plan (e.g., Affiliated Open-end Mutual Funds).

8.	Recordkeeping Requirements

The Firm will maintain in an easily accessible place, the following records:

A copy of any Code for the organization that is in effect, or at any time within the past five (5) calendar years was in effect;

A record of any Code violation or action taken as a result of the violation that occurred during the current year and the past five (5) calendar years;

A record of all written acknowledgments as required by Rule 204A-1 of the Advisers Act for each Supervised Person who is currently, or within the past five (5) calendar years was, a Supervised Person;

A copy of each report made by an Access Person during the current year and the past five (5) calendar years as required by Rule 17j-1 of the Investment Company Act and/or Rule 204A-1 of the Advisers Act and Sections 6B and 6C of this Code, including any information provided in lieu of the reports under Section 6B and 6C above;

A list of all persons, currently or within the past five (5) calendar years who are or were required to make reports pursuant to Rule 17j-1 of the Investment Company Act and/or Rule 204A-1 of the Advisers Act and Sections 6B and 6C above, or who were responsible for reviewing those reports, together with an appropriate description of their title or employment;

A copy of each report made by the Firm’s CCO pursuant to Section 6E above during the current year and the past five (5) calendar years;

A record of any decision made during the current year and the past five (5) calendar years by the Firm’s CCO, and the reasons supporting each decision, to grant prior approval pursuant to Sections 5A and 5B above for acquisition by an Access Person of securities in an IPO or a Private Placement transaction;

The Virtus Investment Partners Inc. Corporate Compliance Department (or at its direction, another Firm CCO) is responsible for administration of all aspects of this Code with respect to those individuals designated as Affiliated Officers by providing written affirmation that the provisions of this Code were upheld and that these Affiliated Officers were or were not in compliance with the Code and/or providing any required records to the applicable Firm (or other affiliate) CCO.

As required by enhanced recordkeeping requirement under Rule 204-2 of the Adviser Act, records related to contributions made by the Firm and its Covered Associates to officials and candidates and of payments to state or local political parties or PACS including the following:

A list of Covered Associates (including names, titles, business and residence addresses) currently or within the past five (5) calendar years. This five-year recordkeeping requirement would not apply to periods prior to March 14, 2011; and

A list of government entities to which the Firm has provided advisory services in the past five (5) calendar years. This five-year recordkeeping requirement would not apply to periods prior to September 13, 2010.

Sanctions

Upon discovering a violation of this Code, the Parent of the Firm or if applicable the Funds Board of Directors, besides any remedial action already taken by the respective adviser or related entity, may impose sanctions as it deems appropriate (see under separate cover the currently imposed sanctions), including, among other things, a letter of censure or suspension or termination of employment, or suspension of personal trading privileges for such period as it may deem appropriate.

Any profits realized by a Portfolio Manager or Advisory Person on a personal trade in violation of Section 5E (Blackout Rule) must be disgorged. In addition, the Firm’s CCO may direct any Supervised Person to disgorge any profit realized (or loss avoided) on a personal trade in violation of this Code.

10.	Exceptions

The Firm’s CCO may grant written exceptions to provisions of the Code based on equitable considerations. The exceptions may be granted to individuals or classes of individuals with respect to particular transactions, classes of transactions or all transactions, and may apply to past as well as future transactions. However, no exception will be granted when it would result in a violation of Section 204-2 of the Advisers Act. Exceptions granted are reported to the Directors of the Firm, as well as the Boards of any managed Fund.

Appendix

Additional requirements for Euclid Advisors LLC, Newfleet Asset Management, LLC—Hartford, Newfleet Asset Management, LLC—San Francisco, Virtus Alternative Investment Advisers, Inc., Virtus Investment Advisers, Inc., VP Distributors, LLC and Zweig Advisers LLC are as follows:

All Supervised Persons of the above Firms are subject to the same requirements as Access Persons as indicated in Section 4. “Disclosure of Personal Brokerage Accounts”, Section 6. “Reporting & Compliance Requirements” (Sections: 6A, 6B, and 6C) and Section 7. “401(k) Accounts and the Requirements of the Code” (Sections: 7A and 7C – 7E). Specifically the term “Access Person(s)” as used in those sections is hereby replaced with the term “Access Person(s) and Supervised Person(s)”.

Additional requirements for Kayne Anderson Rudnick Investment Management, LLC (“KAR”) are as follows:

All KAR employees are considered Access Persons. KAR employees are permitted to buy or sell exchange traded funds (“ETFs”) without receiving pre-clearance from Compliance. However, all ETF transactions should be included on the quarterly personal trade certifications.

KAR employees follow the policy on gifts and entertainment discussed below. However, any KAR employee who is registered with VP Distributors, LLC will follow the gift and entertainment policy in Section 5 (g) of this Code of Ethics.

A conflict of interest occurs when the personal interests of employees interfere or could potentially interfere with their responsibilities to the firm and its clients. Supervised Persons should not accept inappropriate gifts, favors, entertainment, special accommodations, or other things of material value that could influence their decision-making or make them feel beholden to a person or firm. Supervised Persons should not offer gifts, favors, entertainment, or other things of value that could be viewed as overly generous or aimed at influencing decision-making or making a client feel beholden to the firm or the supervised person.

•

Gifts . No Supervised Person may receive any gift, services, or other things of more than a $175.00 value per year from any person or entity that does business with or on behalf of KAR, without pre-approval by the Chief Compliance Officer or Chief Operating Officer. No Supervised Person may give or offer any gift of more than a $175.00 value per year to existing clients, prospective clients, or any entity that does business with or on behalf of the adviser without pre-approval by the Chief Compliance Officer or the Chief Operating Officer. Compliance will maintain a Gift Log of all gifts over $175 given or received from by any KAR employees, which are not broker/dealer related. The Gift Log will include: employee name, type of gift, dollar amount of gift, and sender of the gift. In addition, Compliance will maintain a Gift Log of all gifts over $100 given or received by any broker/dealer. The broker/dealer Gift Log will include: employee name, type of gift, dollar amount of gift, and broker who sent the gift.

•

Cash . No Supervised Person may give or accept cash gifts or cash equivalents to or from a client, prospective client, or any entity that does business with or on behalf of KAR without approval from the Chief Compliance Officer.

•

Entertainment . No Supervised Person may provide or accept extravagant or excessive entertainment to or from a client, prospective client, or any person or entity that does or seeks to do business with or on behalf of KAR. Supervised Persons may provide or accept a business entertainment event, such as dinner or a sporting event.

Schedule A

On October 1, 2012, the following entities adopted this Code of Ethics:

Euclid Advisors LLC

Duff & Phelps Investment Management Co.

Kayne Anderson Rudnick Investment Management, LLC

Newfleet Asset Management, LLC—Hartford

Newfleet Asset Management, LLC—San Francisco

Rampart Investment Management Company, LLC

Virtus Alternative Investment Advisers, Inc.

Virtus Investment Advisers, Inc.

VP Distributors, LLC

Zweig Advisers LLC

On October 4, 2012, the following entity adopted this Code of Ethics:

Newfound Investments, LLC / VP Advisers, LLC

STANDARDS OF BUSINESS CONDUCT

AND CODE OF ETHICS

BMO Harris Bank N.A.

BMO Asset Management Corp.

Monegy, Inc.

Marshall & Ilsley Trust Company N.A.

Marshall Funds, Inc. (BMO Funds)

North Star Trust Company

Stoker Ostler Wealth Advisors, Inc.

July 1, 2012

STANDARDS OF BUSINESS CONDUCT

AND CODE OF ETHICS

Table of Contents


I.	INTRODUCTION	4
II.	DEFINITIONS	4
A.	“A CCESS P ERSON ”	4
B.	“A DVISERS ”	5
C.	“A DVISORY P ERSON ”	5
D.	“A PPROVED T HIRD P ARTY M ANAGER A CCOUNT ”	5
E.	“A FFILIATE ”	5
F.	“A SSOCIATED P ROCEDURES ”	5
G.	“A UTOMATIC I NVESTMENT P LAN ”	5
H.	“B ANK A DVISORY P ERSON ”	5
I.	“B ENEFICIAL O WNERSHIP ”	5
J.	“BMO E NTITIES ”	6
K.	“BMO F UNDS ”	6
L.	“C LIENT ”	6
M.	“C OMPLIANCE C OMMITTEE ”	6
N.	“C ONFIDENTIAL I NFORMATION ”	6
O.	“C ONTROL ”	6
P.	“C OVERED P ERSON ”	6
Q.	“D ESIGNATED R EPORTING P ERSON ”	6
R.	“D ISINTERESTED D IRECTOR ”	7
S.	“F EDERAL S ECURITIES L AWS ”	7
T.	“I NITIAL P UBLIC O FFERING OR IPO”	7
U.	“I NVESTMENT P ERSONNEL ”	7
V.	“L IMITED O FFERING ”	7
W.	“P UBLIC C OMPANY ”	7
X.	“P URCHASE OR SALE OF A S ECURITY ”	7
Y.	“R EPORTABLE A CCOUNT ”	7
Z.	“R EPORTABLE F UND ”	7
AA.	“R EPORTABLE S ECURITY ”	8
BB.	“S ECURITY ”	8
CC.	“S UPERVISED P ERSON ”	8
III.	STANDARDS OF CONDUCT AND COMPLIANCE WITH LAWS	9
IV.	INSIDER TRADING AND THE PROTECTION OF MATERIAL NON-PUBLIC INFORMATION	10
V.	MARKET MANIPULATION	12
VI.	PERSONAL SECURITIES TRADING AND REPORTING	13
VII.	GIFTS AND ENTERTAINMENT POLICY	20


A.	G IFTS	20
B.	E NTERTAINMENT	21
C.	S PECIAL C ONSIDERATIONS FOR C ERTAIN C LIENT T YPES	22
VIII.	SERVICE AS BOARD DIRECTOR OR MEMBER	22
IX.	CERTIFICATION AND ACKNOWLEDGEMENT OF THE CODE AND ITS PROVISIONS	22
X.	DISINTERESTED DIRECTORS	23
A.	P ROHIBITED S ECURITIES T RANSACTIONS	23
B.	E XEMPTED T RANSACTIONS	23
C.	R EPORTING S ECURITIES T RANSACTIONS	23
D.	T RANSACTIONS WITH A F UND OR THE BMO F UNDS	24
XI.	WAIVERS BY THE DESIGNATED REPORTING PERSON	24
XII.	REVIEWING AND MONITORING	24
XIII.	REPORTING VIOLATIONS AND SANCTIONS	25
XIV.	ANNUAL REPORT TO AND REVIEW BY BMO FUNDS BOARD OF DIRECTORS	25
XV.	RECORDKEEPING	25
XVI.	FORM ADV	26
XVII.	CONFIDENTIALITY	26

STANDARDS OF BUSINESS CONDUCT

AND CODE OF ETHICS

I.	I NTRODUCTION

This Code of Ethics (the “Code”) establishes standards for both business conduct and personal investments by Covered Persons of BMO Entities, defined herein. This Code has been adopted by the Advisers to comply with Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and Rule 17j-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The BMO Entities believe that the provisions of this Code and any Associated Procedures contain procedures reasonably necessary to prevent Covered Persons from violating the Code.

Each Covered Person is to read, understand and follow this Code and is to certify as to having done so. See Section IX-Certification and Acknowledgement of the Code and Its Provisions.

In addition to the specific requirements of the Code, Covered Persons are required to comply with all applicable BMO Financial Group corporate policies, directives and procedures (e.g. First Principles and Code of Business Conduct) and all applicable Federal Securities Laws. Such laws include laws regulating privacy, anti-money laundering, insider trading, offerings and sales of securities, and fraud.

This Code is not intended to deal with every possible situation Covered Persons may encounter. If a situation arises that is not covered in the Code, or if a Covered Person is uncertain about any aspect of the Code, he/she is asked to consult with their Designated Reporting Person.

II.

D EFINITIONS

“Access Person” means

Any Advisory Person of the Advisers;

ii.

Any Supervised Person of the Advisers who has access to nonpublic information regarding any Clients purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any Reportable Fund;

iii.

Any Supervised Person of the Advisers who is involved in making securities recommendations to Clients of the Advisers, or who has access to such recommendations that are nonpublic;

iv.

Any director or officer of the principal underwriter of BMO Funds, who, in the ordinary course of business, makes, participates in, or obtains information regarding, the purchase or sale of Reportable Securities by BMO Funds, or whose functions or duties in the ordinary course of business relate to the making of any recommendations to BMO Funds regarding the purchase or sale of Reportable Securities; and

Any director or officer of the Advisers or BMO Funds, who is not a Disinterested Director.

“Advisers” means the BMO Entities that are investment advisers registered under the Advisers Act including, BMO Asset Management Corp., Monegy, Inc. and Stoker Ostler Wealth Advisors, Inc.

“Advisory Person” means

Any director, officer, or employee of the BMO Entities (or of any company in a Control relationship to the Advisers or the BMO Funds), who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the current purchases or sales of a Reportable Security by a Client, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and

ii.

Any natural person in a Control relationship to the Advisers or the BMO Funds who normally obtains information concerning current recommendations made to a Reportable Fund with regard to the purchases or sales of a Reportable Security.

“Approved Third Party Manager Account” means any Reportable Account over which the Covered Person has no direct or indirect influence or control, other than the right to terminate the account, such as an account where the Covered Person has granted full discretionary authority to a registered broker-dealer, a registered investment adviser, or other investment manager acting in a similar fiduciary capacity, that has been approved by the Covered Person’s Designated Reporting Person.

“Affiliate” with respect to any referenced entity, means an entity that is Controlled by, Controls or is under common Control with such entity.

“Associated Procedures” means those policies, procedures and/or statements that have been adopted by the BMO Entities, and which are designed to supplement this Code and its provisions.

“Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.

“Bank Advisory Person” means Advisory Persons of Stoker Ostler Wealth Advisors, Inc., and certain divisions of BMO Harris Bank N.A. Marshall & Ilsley Trust Company N.A. and North Star Trust Company.

“Beneficial Ownership” shall be interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934, and the rules and regulations thereunder, except that the determination of direct or indirect beneficial ownership shall apply to all Securities which an Covered Person has or acquires. “Beneficial Ownership” will be attributed to an Covered Person in all instances where the Covered Person (i) possesses the ability to purchase or sell the Securities (or the ability to direct the disposition of the Securities);

(ii) possesses voting power (including the power to vote or to direct the voting) over such Securities; or (iii) receives any benefits substantially equivalent to those of ownership.

A person is presumed to be the Beneficial Owner of Securities held by immediate family members or held by other persons, by reason of any contract, arrangement, understanding, or relationship that provides the Covered Person with direct or indirect pecuniary interest in the Securities, sharing the Covered Person’s household (“immediate family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse or equivalent domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships).

“BMO Entities” covered by this Code of Ethics include BMO Asset Management Corp., Monegy, BMO Funds, Stoker Ostler Wealth Advisors, Inc., and certain divisions of BMO Harris Bank N.A., Marshall & Ilsley Trust Company N.A. and North Star Trust Company.

“BMO Funds” means Marshall Funds, Inc.

“Client” means anyone for whom investment management or advice is provided by the BMO Entities, and it includes registered and unregistered investment companies and other pooled investment vehicles, advisers for whom a BMO Entity acts as sub-adviser, and, unless the context requires otherwise, prospective clients.

“Compliance Committee” comprises all Designated Reporting Persons and as appointed by the Wealth Management Risk Committee representatives from senior management of the BMO Entities and PCG Legal Department.

“Confidential Information” means information not publicly available and includes, but is not limited to: the composition of Client holdings and transactions, Clients’ financial information, corporate financial activity, lists of Clients, Working List Securities, investment models, methods, processes, and formulae and other proprietary information such as certain records, procedures, systems, pending research recommendations and software.

“Control” shall have the same meaning as that set forth in Section 2(a)(9) of the Investment Company Act.

“Covered Person” means any Access Person of the Advisers and BMO Funds, any Advisory Person of certain divisions of BMO Harris Bank N.A., Marshall & Ilsley Trust Company N.A. and North Star Trust Company, and any other Supervised Person.

“Designated Reporting Person” means the chief compliance officer (or his or her designee) of the respective BMO Entities. A Covered Person’s Designated Reporting Person is the Designated Reporting Person for which the Covered Person primarily performs duties.

“Disinterested Director” means a director or trustee of the BMO Funds who is not an “interested person” of the BMO Funds within the meaning of Section 2(a)(19) of the Investment Company Act.

“Federal Securities Laws” include the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, Title V of the Gramm-Leach-Bliley Act, and the Bank Secrecy Act as it applies to funds and investment advisers, all as amended from time to time, and the rules and regulations thereunder.

“Initial Public Offering or IPO” means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registrations, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934.

“Investment Personnel” include: Covered Persons with direct responsibility and authority to make investment decisions affecting a Clients portfolio (such as fund or portfolio managers); Covered Persons who provide information and advice to such managers (such as securities analysts); Covered Persons who assist in executing investment decisions for a Client (such as traders); and any natural person who Controls the Advisers or the BMO Funds and who obtains information concerning recommendations made to a Client regarding the purchase or sale of securities by a Client. As the context requires, “Investment Personnel” may refer to one or more Covered Persons.

“Limited Offering” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act of 1933.

“Public Company” means any entity subject to the reporting requirements of the Securities Exchange Act of 1934.

“Purchase or sale of a Security” includes the purchase, sale or writing of an option to purchase or sell a Security. A Security is “ being considered for purchase or sale ” when a recommendation to purchase or sell a Security has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation.

“Reportable Account” means any account in which any securities are held for the Covered Person’s direct or indirect benefit. This includes but is not limited to broker-dealer accounts, trust accounts, pension accounts, deferred compensation plans, employee stock purchase plans, accounts managed by third party managers, and any other account that may hold a Security such as 401(k), 403(b), directly held Reportable Fund accounts, and 529 Plans.

“Reportable Fund” means each investment company (and any series or portfolios of such company) registered under the Investment Company Act that is advised or sub-advised by the Advisers or its Affiliates. Reportable Funds include common and collective funds, private funds, and any other pooled vehicle advised or sub-advised by the BMO Entities. Reportable Funds do not include money market funds.

AA.

“Reportable Security” shall have the same meaning as “Security” defined below, except that Reportable Securities include Exchange Traded Funds (“ETFs”) but do not include:

Direct obligations of the Government of the United States;

ii.

Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;

iii.

Shares issued by non-affiliated open-end U.S. registered investment companies and non-affiliated common and collective trusts ; and

iv.

Shares issued by money market funds, including BMO and Virtus Money Market Funds.

As circumstances warrant for the equitable administration of this Code, the Compliance Department may construe the definition of “Reportable Security” on a case-by-case basis as matters are presented to it, to take into account the exemptions and exclusions from the definition of “Security” adopted under the Federal Securities Laws.

BB.

“Security” shall have the meaning set forth in Section 2(a)(36) of the Investment Company Act or Section 202(a)(18) of the Advisers Act. Security means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

CC.

“Supervised Person” means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of a BMO Entity, or other person who provides investment advice on behalf of the BMO Entity and is subject to the supervision and Control of the BMO Entity. In addition, any employee of an Affiliate who is licensed as, or considered, an investment adviser representative of one of the Advisers and certain members of their staff are considered Supervised Persons of such Adviser. Additionally, based on circumstance, the Designated Reporting Persons or his or her designee may consider non-employees of the BMO Entities to be Supervised Persons and subject to this Code. The Designated Reporting Persons (or his or her designee) will maintain a list of all Supervised Persons and provide each Supervised Person with notification of his or her status as such, this Code and any amendments.

III.

S TANDARDS OF C ONDUCT AND C OMPLIANCE WITH L AWS

As a fiduciary to our clients, the BMO Entities strive to act in the best interest of our clients and Fund shareholders and to place their interests ahead of our own. We believe over the long run the BMO Entities’ interests will be best served by this philosophy. This Code of Ethics is based on concepts of fiduciary duty, securities laws, and internal policies adopted by the BMO Entities. It is intended to promote the highest standards of ethical and professional conduct.

Covered Persons must not disclose, directly or indirectly, any Confidential Information to anyone other than to the Client, to authorized persons of the BMO Entities, to authorized agents so that they may discharge their professional duties, to other persons as the Client authorizes and when such information is legally required to be disclosed, e.g., when duly requested by regulatory authorities or a court.

Covered Persons also must not use, directly or indirectly, any Confidential Information for their personal benefit, e.g., front-running Client transactions.

Furthermore, Covered Persons shall not (directly or indirectly) in connection with securities-related and advisory-related activities:

•

Employ any device, scheme or artifice to defraud;

•

Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading;

•

Engage in any transaction, practice or course of business which operates or would operate as a fraud or deceit upon any person; or

•

Engage in any act, practice or course of business which is fraudulent, deceptive or manipulative.

Section VI of the Code deals with personal securities trading by Covered Persons. The general fiduciary principles that govern personal investment activities are:

•

The duty at all times to place the interests of Clients, and Fund shareholders first;

•

The requirement that all personal securities transactions be conducted in such a manner as to be consistent with the Code and to avoid any actual or potential conflict of interest or any abuse of a Covered Person’s position of trust and responsibility; and

•

The principle that the BMO Entities’ personnel should not take inappropriate advantage of their positions.

We recognize that independence in the investment decision-making process is vital. Causing a portfolio to take action or to fail to take action for the purpose of achieving a personal benefit rather than to benefit the portfolio is a violation of this Code. Investment Personnel have an affirmative duty to bring suitable securities to the attention of those making investment decisions. Consequently, the failure to recommend or buy a suitable security for a Client or Fund in order to avoid the appearance of conflict from a personal transaction in that security will be considered a violation of this Code.

Inducing or causing a Client to take action, or to fail to take action, for the purpose of achieving a personal benefit, rather than a benefit for a Client is a violation of this Code. Examples of this would include causing a Client to purchase a Security owned by the Covered Person for the purpose of supporting or driving up the price of the Security, and causing the Client to refrain from selling a Security in an attempt to protect the value of the Covered Person’s investment, such as an outstanding option.

Using knowledge of Client portfolio transactions to profit by the market effect of such transactions is a violation of this Code. This could be a single, series or pattern of Securities transactions by Covered Persons. However, it is important to note that a violation could result from a single, series or pattern of transactions if the circumstances warranted a finding that the provisions of this Code have been violated.

IV.

I NSIDER T RADING AND THE P ROTECTION OF M ATERIAL N ON -P UBLIC I NFORMATION

“Insider Trading” is generally understood as the purchase or sale of securities while in possession of “inside information” i.e., material, non-public information (information not available to the general public but important in making a decision to buy or sell a security). “Insider trading” includes making such information available (“tipping”), directly or indirectly, to others who may trade based on that information.

A Covered Person who becomes aware of material information that has not been disclosed to the marketplace generally should not, without first discussing the matter with your Designated Reporting Person or a member of the BMO Entities Legal Department,

•

Engage in any act, practice or course of business which is fraudulent, deceptive or manipulative;

•

Trade in (purchase or sell) the securities of the company to which the information relates, either on behalf of a Client or for his or her own or a related account;

•

Recommend transactions in such securities; or

•

Disclose that information (tip) to others.

These restrictions apply if such information has been acquired improperly or, though acquired properly, has been obtained in circumstances in which there is a reasonable expectation that it will not be used for trading purposes, or where the information relates to a tender offer and came from a tender offer participant.

In particular, no employee should trade, tip, or recommend the securities of any issuer having obtained material nonpublic information on a confidential basis, from an insider in breach of his or her duty, or through misappropriation. On the other hand, there is no prohibition against using information obtained legitimately through one’s own analyses or appropriate investigative efforts.

Any Covered Person who acquires material nonpublic information may not discuss that company with others, other than to report such fact to your Designated Reporting Person and/or a member of the BMO Entities Legal Department. Once material nonpublic information has been disclosed to a person, he or she is precluded from trading in the security to which that information relates, making any comment which could be viewed as a recommendation, or otherwise further disclosing the information, as long as he or she possesses material nonpublic information. In this regard, particular restraint should be exercised to avoid the transmission of information which is not likely to become public in the short term.

Materiality. Information is “material” if it has market significance, that is, if its public dissemination is likely to affect the market value of securities, or if it is otherwise information that a reasonable investor would want to know before making an investment decision.

While it is impossible to list all types of information which might be deemed material under particular circumstances, information dealing with the following subjects is often found to be material:

•

Earnings estimates and other financial projections

•

Dividends

•

Major new discoveries or advances in research

•

Acquisitions, including mergers and tender offers

•

Sales of substantial assets

•

Changes in debt ratings

•

Significant write-downs of assets or additions to reserves for bad debts or contingent liabilities

On the other hand, information is generally not material if its public dissemination would not have a market impact, or if the information would not likely influence a reasonable investor making an investment decision. Since such judgments may ultimately be challenged with the benefit of hindsight, and the consequences of a wrong decision are potentially severe, an employee should contact their Designated Reporting Person for advice as to whether particular information is material

Nonpublic. Information that has not been disclosed to the public generally is “nonpublic.” To demonstrate that certain information is public, the Covered Person should be able to point to some fact showing that it is widely available. Information would generally be deemed widely available if it has been disclosed, for example, in the broad tape, Wall Street Journal, or widely circulated public disclosure documents, such as prospectuses, annual reports, or proxy statements.

Nonpublic information may include, but is not limited to;

•

Information available to a select group of analysts or brokers or institutional investors,

•

Undisclosed facts which are the subject of rumors, even if the rumors are widely circulated, and

•

Information that has been imparted on a confidential basis, unless and until the information is made public and enough time has elapsed for the market to respond to a public announcement of the information.

Information from Affiliates. Because the BMO Entities are under common control with affiliate banks and other financial institutions, all of which could be a source of nonpublic information, the BMO Entities’ employees must be particularly careful to consider the nature of the information they receive before using it. Use of “insider” information obtained from an Affiliate of Bank of Montreal is prohibited and could subject both the BMO Entities and the Affiliate to penalties for insider trading.

Information Obtained on a Confidential Basis. When the BMO Entities’ employee obtains information from a source with the expectation that he or she will keep such information confidential, the BMO Entities and its employees are prohibited from using that information to trade, tip, or recommend securities and such confidential information may not be given to affiliates of the BMO Entities. The expectation of confidentiality may be either explicitly set forth or implied by the nature of the BMO Entities relationship with the source of the information.

Information Obtained through a Breach of Fiduciary Duty. Even in the absence of an expectation of confidentiality, the BMO Entities’ employees are prohibited from trading, tipping, or recommending securities on the basis of material nonpublic information disclosed by an insider in breach of a fiduciary or similar duty.

Information Obtained Through Misappropriation. “Misappropriated” information is information that has been improperly obtained or, though obtained properly, is being used improperly for a purpose contrary to the purpose for which it was given. For example, if a printer, a commercial banker, or a lawyer passes along to others material nonpublic information entrusted to him or her by a Client, misappropriation may have occurred. Thus, if such a person divulges the information to a person who knows of that relationship, and the person trades, tips, or recommends the Client’s securities, liability as a “tippee” with respect to the misappropriated information may be found. For this reason, absent approval by your Designated Reporting Person on the basis of a full exploration of the facts, no employee may trade, tip, or make recommendations regarding affected securities where he or she has reason to believe the information has been misappropriated.

Any violation of the procedures in this Section, or any other disclosure or use of material nonpublic information, should be reported to your Designated Reporting Person immediately. Violations may result in disciplinary action taken by the Compliance Committee with potential further SEC or regulatory sanctions.

Any question as to the applicability or interpretation of these guidelines or the propriety of any desired action must be discussed with your Designated Reporting Person prior to trading or disclosure of the information.

V.	M ARKET M ANIPULATION

The BMO Entities prohibits any member, officer, director, employee or other Covered Person from engaging in rumor creation or dissemination involving knowingly putting false information into the market in order to artificially change the stock price of any publicly-traded security, or from engaging in fraud and manipulation with the intent to profit. This conduct is frequently referred to as market manipulation. This policy applies to all Covered Persons and extends to activities within and outside their duties at the BMO Entities.

The term “market manipulation” is not specifically delineated in the federal securities laws, however, the laws refer to the prohibition against creating and disseminating false or misleading statements, or to the prohibition against fraud and manipulation. Market manipulation is viewed as an emerging area of the law. The Securities and Exchange Commission has not pursued many such cases in the past because of the difficulty of tracing where a false rumor originates and of proving it was knowingly false. But now the increased use of technologies, such as emails, instant messages, and other electronic communications, which enable the quick spread of rumors, are enabling law enforcement officials to track down the origin of false rumors and prove that they were knowingly false.

While the laws concerning market manipulation are not static, it is generally understood that the laws prohibit:

•

Knowingly creating and/or disseminating information that is nonpublic, false, or speculative without factual support.

•

Disseminating information from unknown or unidentified sources.

Market manipulation involves knowingly putting false information into the market in order to artificially change the stock price of any publicly-traded security, or engaging in fraud and manipulation with the intent to profit. This becomes particularly important when a firm owns the securities in question. A rumor can be disseminated through all forms of communication, including, but not limited to, emails, instant messages, blogs, chat rooms, telephones, faxes, messages, letters, and memos. It can entail creating a false rumor, but can also occur through the omission of a material fact. It can be in the form of a statement or a question. The materiality of the rumor is considered, i.e. it must be reasonably likely to affect the stock price or the value of the target toward which the rumor is directed.

The BMO Entities prohibits any Covered Person from knowingly creating and/or disseminating information that is nonpublic, false, or speculative without factual support. Because intent to manipulate is presumed if a rumor is traced back to an individual or firm that profited from the rumor, members, officers, directors and employees are prohibited from entering any securities-related chat rooms or posting on securities-related blogs to avoid “inadvertent” manipulation.

The BMO Entities also prohibits any Covered Person from disseminating information from unknown or identified sources. Even if it is not clear that a rumor is false at the time, you can still be charged if you assisted in disseminating the rumor. As such, dissemination must be limited to information that is derived from known and/or reliable sources.

Employees who believe they may have inadvertently (or consciously) manipulated the market or employees who believe they may have been pressured into such actions are expected to immediately report such actions to their Designated Reporting Person.

VI.

P ERSONAL S ECURITIES T RADING AND R EPORTING

The Code requires Covered Persons to conduct any personal securities trading activities in compliance with the provisions of the Code and to periodically report their personal securities transactions and holdings to the Compliance Department. Personal trading activities of a Covered Person include transactions in accounts in which the Covered Person has any direct or indirect Beneficial Ownership, which includes immediate family members sharing the Covered Person’s household (See definition of Beneficial Ownership, on page 5).

Covered Persons must submit holdings and transaction reports for Reportable Securities in which the Covered Person has, or acquires, any direct or indirect Beneficial Ownership. Reporting obligations may be met by submitting the necessary reports on the Sungard Protegent PTA (“Protegent PTA”) web-based personal trade monitoring system located on the intranet via the following address; https://mi.ptaconnect.com/pta/pages/logon.jsp .

Certain Supervised Persons of the Advisers who are not considered Access Persons are not subject to the pre-clearance requirements detailed in Section VI.A.i below except related to Limited Offerings and IPOs. Such Supervised Persons will be notified if they are not subject to the pre-clearance requirements.

Personal Trading Procedures

Personal transactions by a Covered Person, or immediate family member sharing the Covered Person’s household, whether a transaction is a purchase or sale, in any Reportable Security that the Covered Person has direct or indirect Beneficial Ownership shall be prohibited if the Covered Person knows, or should have known, at the time the personal transaction was contemplated that such a purchase or sale; (i) is being considered for purchase or sale by a Client or (ii) is being purchased or sold by a Client, including but not limited to, portfolio re-optimizations, unless the personal transaction meets a pre-clearance exception listed below in Section VI.A.ii below.

Trading Guidelines and Restrictions

1. Pre-Clearance Requirements – Covered Persons must pre-clear every purchase or sale of a Reportable Security in which the Covered Person has a Beneficial Ownership in a Reportable Account, unless a personal transaction meets a pre-clearance exception listed under Section VI.A.ii. Equity-related and Fixed Income securities must be pre-cleared using Protegent PTA. Pre-clearance approval and the receipt of express prior pre-clearance approval does not exempt you from the prohibitions outlined in this Code.

•

Pre-clearance approval may be granted between 8:30a.m. CT and 3p.m. CT.

•

Pre-clearance approval remains in effect until the end of the trading day on which it was granted.

•

When trading options, the Covered Person must pre-clear the underlying security before entering into the option contract.

•

When entering limit orders for transactions that do not meet the de minimis exemption, Covered Persons must obtain pre-clearance approval each day the order is outstanding.

2. Limited Offerings – All Covered Persons may not acquire Securities for their personal accounts in a Limited Offering unless;

•

such transaction otherwise comply with all other provisions of this Code;

•

the Covered Person submits the full details of the proposed transaction.to its Designated Reporting Person, including written certification that the investment opportunity did not arise by virtue of the Covered Person’s position with BMO, the BMO Entities or their Affiliate;

•

The Designated Reporting Person has (i) concluded (after having reviewed the details supplied by the Covered Person, received the written certification, and consulted with other BMO investment advisory personnel) that no Client accounts have a foreseeable interest in purchasing such securities and (ii) granted pre-clearance approval.

The Covered Person, after purchasing an approved Limited Offering, may not participate in any investment decision making regarding that Limited Offering for any Client. As such, a recommendation to a Client of the BMO Entities to purchase or sell Securities of such an issuer (following a purchase by a Covered Person in an approved personal transaction) will be subject to an independent review by the President of the Adviser (or his or her designee), so long as the person conducting such review has no personal interest in the issuer. The Covered Person will affirmatively disclose to the Chief Compliance Officer any such independent review.

3. Initial Public Offerings (IPOs) – All Covered Persons are prohibited from acquiring any Security distributed in an initial public offering (“IPO”), until trading of the Security commences in the secondary market. This restriction also applies to transactions in IPO’s in an account where the Covered Person has granted full discretionary authority to an Approved Third Party Manager. The Compliance Department reserves the right to contact your Approved Third Party Manager to verify they are not participating in IPO’s in your account.

4. Blackout Periods –

All Covered Persons are prohibited from executing a personal transaction in any Reportable Security on a day during which a Client has a pending “buy” or “sell” order for that Reportable Security, and for seven (7) calendar days after a Client purchases or sells the same Reportable Security. Any purchases or sales of any Reportable Security by an Covered Person within seven (7) days before a Client purchases or sells the same Reportable Security are subject to review on a case-by-case basis for purposes of determining whether a violation of this Code has or may have occurred, unless a personal transaction meets a pre-clearance exception listed under Section VI.A.ii.

All Covered Persons, with knowledge of a reoptimation, are prohibited from executing a personal transaction in any Reportable Security from, unless a personal transaction meets a pre-clearance exception listed under Section VI.A.ii;

(i)

the time of dissemination of the output of any investment model until the time of publication of the final list of pending transactions based upon the investment model; and

(ii)

from the time of publication of the final list of pending transactions based upon the investment model until seven (7) calendar days after a Client account has completed its transactions in that security.

5. When purchasing, exchanging, or redeeming shares of a Reportable Fund, Covered Persons must comply in all respects with the policies and standards set forth in the then current prospectus, including restrictions on short-term trading.

6. Short-Term Trading – Covered Persons are generally discouraged from engaging in short-term speculative trading, excessive trading and trading which interferes the Covered Person’s job responsibilities.

7. BMO Securities – Covered Persons are prohibited from engaging in transactions in Bank of Montreal Securities or related financial instruments that are:

call or put options or short selling (selling directly or indirectly, Bank of Montreal Securities or related financial instruments that you do not own); or

transactions (e.g., monetization transactions, forward sale contracts, equity swaps, collars, purchases of units of exchange funds, entering into exchange contracts or limited recourse loans secured primarily by Bank of Montreal Securities, etc) if those transactions are designed to hedge or offset the economic risk of holding Bank of Montreal Securities or related financial instruments.

ii.

Exceptions from Pre-Clearance Requirements

The following exceptions are from pre-clearance only ; please see Section B for applicable reporting requirements.

Covered Persons are not required to pre-clear the following:

Purchases or sales of (2,000) common shares or less (or the purchase, sale, writing of, the right to or voluntary exercise of 20 options contracts or less) in a public company or closed-end mutual fund whose market capitalization is greater than $5 billion at the time of the purchase or sale;

Transactions over which the Covered Person has no control, such as the expiration of an option contract or option exercise thresholds that trigger an automatic exercise of options;

Purchases or sales in Exchange Traded Funds (ETFs) including options on ETFs;

Transactions in a Reportable Fund, except that a Covered Person of the Adviser or sub-Adviser to the Reportable Fund must pre-clear such transaction;

Transactions in a Bank of Montreal (BMO) 401(k) plans, except for transactions in Reportable Funds as described above.

Purchases or sales in foreign currency futures or forwards;

Purchases or sales of options, futures, or forwards on broad-based indices, defined as indices consisting of 100 names or more;

The execution of options of BMO acquired as the result of employment at BMO or its Affiliates, subject to any applicable BMO trading windows;

Purchases which are made through an Automatic Investment Plan;

10.

Purchases made through the ESPP or 401(k) that are a part of an automatic payroll deduction plan whereby an employee purchases securities issued by an employer or a Reportable Fund; however, any sale or other purchase of a Reportable Fund or employer securities in a 401(k) or the sale of securities purchased through the ESPP are subject to the pre-clearance requirements described herein.

11.

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its Securities, to the extent such rights were acquired from such issuer, and any sales of such rights so acquired;

12.

The acquisition of Reportable Securities through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, and other similar corporate reorganizations or distributions generally applicable to all holders of the same class of securities;

13.

Purchases which (upon advance notification and approval from your Designated Reporting Person or his or her designee) are part of an offering(s) made available to a member of the Covered Person’s household solely by virtue of that person’s employment;

14.

Purchases or sales effected in any account over which the Covered Person has no direct or indirect influence or control with and Approved Third Party Manager(s). However, if prior to making any request you advised the discretionary account manager to enter into or refrain from a specific transaction or class of transactions, you must first consult your Designated Reporting Person and obtain approval prior to making such request; or

15.

Any transaction in which your Designated Reporting Person or his or her designee determines that the nature of the Security traded or the facts surrounding the transaction are sufficient enough to make pre-clearance unwarranted.

Reporting Requirements

Failure to complete the reports described in this Section of the Code in the specified timeframe is a violation of Rule 17j-1 and Rule 204A-1 under the Investment Company Act and the Advisers Act, respectively, as well as the Code. Covered Persons reporting obligations may be met by submitting the necessary reports on Protegent PTA. The Compliance Department generally maintains these reports within Protegent PTA.

Any report submitted pursuant to this Section may contain a statement that the report shall not be construed as an admission by the Covered Person that such person has in fact any direct or indirect Beneficial Ownership in the securities to which the report relates.

Initial and Annual Holdings Reports

Within ten calendar days of becoming a Covered Person, Covered Persons must submit an Initial Report listing all Reportable Accounts along with any in which they are a Beneficial Owner and all holdings within these accounts. Furthermore, annually, Covered Persons must report all Reportable Accounts along with any in which they are a Beneficial Owner and all transactions within these accounts unless the transaction is an Exempt Transaction.

Every Covered Person shall report the information described below to their Designated Reporting Person (or his or her designee):

The full name (title), description (type and exchange ticker symbol or CUSIP number), number of shares and principal amount of each Reportable Security in which the Covered Person or any immediate family member sharing the same household had any direct or indirect Beneficial Ownership when the person became a Covered Person;

The name of any broker, dealer or bank maintaining an account in which any Securities that the Covered Person has any indirect or direct Beneficial Ownership are held; and

Date the report is submitted and signature.

Covered Persons are required to submit a Holdings Report:

No later than 10 calendar days after the person becomes a Covered Person, an initial holdings report listing all of the information described above which must be current as of a date no more than 45 days prior to the date the person becomes a Covered Person; and

By February 14 of each year, an annual holdings report listing all of the information described above as of December 31 of the prior year.

Covered Persons are not required to report holdings in any account over which the Covered Person has no direct or indirect influence or control, other than the right to terminate the account (i.e., Approved Third Party Manager Accounts).

ii.

Quarterly Transaction Reports

1. Within 30 calendar days after the end of each quarter, each Covered Person will provide their Designated Reporting Person (or his or her designee) with a transaction report covering, at a minimum, all transactions during the most recent quarter in which the Covered Person had any direct or indirect Beneficial Ownership (the “Quarterly Transaction Report”) containing the following information:

The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, the number of shares and the principal amount of each Reportable Security involved;

The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition such as a gift or charitable contribution);

The price at which the transaction was effected;

The name of the broker, dealer or bank with or through which the transaction was effected;

Going forward on a quarterly basis you must certify that any personal investments effected during the quarter were done in compliance with this Code.

Date the report is submitted and signature; and

If there were no personal transactions in Reportable Securities during the period, either a statement to that effect or the word “None” (or some similar designation).

Covered Persons are not required to report:

Purchases which are made through an automatic investment plans;

Purchases made through the ESPP or 401(k) that are a part of an automatic payroll deduction plan whereby an employee purchases securities issued by an employer; However, any transaction that overrides the pre-set schedule or allocations of the automatic investment plan must be pre-cleared, as appropriate, and reported. If a Covered Person makes a change that will remain in effect for the following periods, such change will not be considered to be an “override.” For example, if a Covered Person decides to increase his routine automatic contribution into a Reportable Security from $1,000 to $2,000, and this change will remain in effect for the foreseeable future, he does not need to pre-clear or report this. However, if a Covered Person is increasing his automatic contribution from $1,000 to $2,000 as a one-time occurrence, and the following automatic investment will revert back to the $1,000 following the $2,000 transaction, then this transaction must be reported and possibly pre-cleared depending on the type of security (please refer to Section VI.A);

Purchases or sales effected in any account over which the Covered Person has no direct or indirect influence or control, other than the right to terminate the account.

iii.

New Reportable Accounts Reports

Covered Persons will be required to disclose to their Designated Reporting Person (or his or her designee) any new broker, dealer or bank accounts established during the previous quarter in which any Securities that the Covered Person has any indirect or direct Beneficial Ownership were held during the quarter. Ideally, Covered Persons should report new brokerage accounts when they are opened. The report shall include;

•

The name of the broker, dealer or bank with whom the Covered Person established the account,

•

The date the account was established, and

•

The date the report was submitted.

Duplicate Statements and Use of Approved Broker for Reportable Accounts

The Compliance Department may request duplicate copies of trade confirmations and periodic account statements for Reportable Accounts from brokers. Such confirmations and statements may be received through Protegent PTA.

Third Party Managers Account Approval

As described above, Covered Persons are not required to provide initial or annual holdings or quarterly transaction reports on any Reportable Account over which the Covered Person has no direct or indirect influence or control, other than the right to terminate the account, such as an account where the Covered Person has granted full discretionary authority to a registered broker-dealer, a registered investment adviser, or other investment manager acting in a similar fiduciary capacity. In these situations, the Covered Person must provide to its Designated Reporting Person;

•

the terms of each account relationship (“Agreement” and any amendment to the Agreement) in writing; and

•

a certification to its Designated Reporting Person at the time such account relationship commences, and annually thereafter, that such Covered Person does not have direct or indirect influence or control over the account, other than the right to terminate the account.

The Compliance Department reserves the right to request confirmations and statements on such Third Party Manager Account.

VII.

Gifts and Entertainment Policy

Gifts

No Covered Person shall accept or provide a gift worth more than $100, in aggregate within any 12-month period, from or to any outside person or entity that does business, or seeks to do business, with the BMO Entities for which the Covered Person performs duties or over which the Covered Person exercises managerial influence, without prior approval from the Designated Reporting Person. The affiliates and agents of an outside person or entity shall be considered a single person. Under no circumstances should cash or cash equivalent gifts be given to or accepted from any outside person or entity, including gift cards.

Notwithstanding the above, the aggregate gift limit only (i.e., such gifts must be still reported as described below) does not apply to the following items:

The offer or acceptance of gifts, meals, refreshments, or entertainment of reasonable value, which is generally $100 or less, that are related to commonly recognized major events related to employment, such as a promotion, new job, etc.; or

ii.

The offer or acceptance of personal gifts such as a wedding gift or a congratulatory gift for the birth of a child, provided that these gifts are not given as a result of the business relationship ¹ and the individual giving the gift bears the cost of the gift and not the employer (e.g., the gift is not paid for by the BMO Entity, or its affiliates, or any entity with which they transact business).

Any gifts offered or received, unless exempted from the definition of “gift” below, must be reported by the Covered Person no less frequently than quarterly. The report must include a description of the gift given or received, the name of the person receiving or giving the gift and the estimated value of the gift. This reporting obligation can be met by submitting a gift reporting form through PTA.

Furthermore, the following items are exempted from the definition of “gift” under this policy:

•

Salaries, wages, fees or other compensation paid, or expenses paid or reimbursed, in the usual scope of an Covered Person’s employment responsibilities for the Covered Person’s employer;

•

The offer or acceptance of meals, refreshments or entertainment of reasonable value in the course of a meeting or other occasion, the purpose of which is to hold bona fide business discussions;

•

The offer or acceptance of advertising or promotional material of nominal value, which is generally $50 or less, such as pens, pencils, note pads, key chains, calendars and similar items;

•

The offer or acceptance of awards, from an employer to an employee, for recognition of service and accomplishment.

Entertainment

No Covered Person shall provide or accept any business entertainment to or from any outside person or entity unless the entertainment is considered to be a customary business practice, is reasonable under the circumstances, and is not so excessive, frequent, lavish, or extravagant as to raise questions of propriety.

¹	For example, in situations where there is a pre-existing personal or family relationship between the person giving the gift and the recipient.

Moreover, any such business entertainment shall only be permitted if;

•

The Covered Person shall be in attendance;

•

The entertainment is for business purposes;

•

The Covered Person’s travel and lodging related to the business entertainment is paid for by a BMO line of Business.

Special Considerations for Certain Client Types

Regulations related to the investment management of state or municipal pension funds and other retirement plans often severely restrict or prohibit the offer of gifts or entertainment of any value to government officials (elected officials and employees of elected officials) who have involvement or influence over the selection of an investment manager. Prior to providing any gift or entertainment, the Covered Person will generally consult with such individuals.

Keep in mind your specific department may have additional policies and procedures that you need to adhere and may restrict any gifts or entertainment to government officials or agents of retirement plans.

VIII.

S ERVICE AS B OARD D IRECTOR OR M EMBER

All Covered Persons are prohibited from serving on the boards of directors of any Public Company, absent express prior authorization from the Compliance Committee. Authorization to serve on the board of a Public Company may be granted in instances where the Compliance Committee determines that such board service would be consistent with the interests of a Client, including shareholders of the Company. If prior approval to serve as a director of a Public Company is granted, a Covered Person has an affirmative duty to excuse himself from participating in any deliberations by the BMO Entities regarding possible investments in the securities issued by the Public Company on whose board the Covered Person sits.

IX.

C ERTIFICATION AND A CKNOWLEDGEMENT OF THE C ODE AND I TS P ROVISIONS

The Designated Reporting Person (or his or her designee) is responsible for notifying Covered Persons of their status and obligations under this Code and for providing to each of those individuals a copy of this Code and copies of amendments from time to time.

Upon becoming a Covered Person and annually by February 14 of each year, every Covered Person will provide their Designated Reporting Person (or his or her designee) with certification that he or she has received, read, and understands the provisions of this Code, and that they recognize that they are subject to its provisions. The annual certification shall also include a statement that, during the prior year, the Covered Person has complied with the requirements of this Code and that the Covered Person has disclosed or reported all personal transactions in Reportable Securities that are required to be disclosed or reported pursuant to the requirements of this Code.

In addition, should there be any material amendments to the Code, as determined by your Designated Reporting Person, each Covered Persons will be asked to certify that he or she has received, read and understands the provisions of this Code.

X.	D ISINTERESTED D IRECTORS

Prohibited Securities Transactions

1. No Disinterested Director shall purchase or sell, directly or indirectly, any security in which he or she has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership or interest when the Disinterested Director knows or has reason to believe that securities of the same class are being purchased or sold or considered for purchase or sale by the or any series thereof, until those transactions have been completed or consideration of such transactions is abandoned.

This prohibition does not apply to any transaction in an investment advisory account of any Disinterested Director (either alone or with others) over which the investment adviser for the account exercises investment discretion if the Disinterested Director did not have knowledge of the transaction until after the transaction had been executed.

Exempted Transactions

The provisions of this Code are not intended to restrict unnecessarily the personal investment activities of Disinterested Directors. Therefore, the provisions of Section X.A of this Code shall not apply to:

Purchases or sales over which a Disinterested Director has no direct or indirect influence or control;

Purchases or sales of securities that are not eligible for purchase or sale by a BMO Fund;

Purchases or sales that are non-volitional on the part of either the Disinterested Director or a Fund;

Purchases that are part of an automatic investment or dividend reinvestment plan;

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities to the extent such rights were acquired from such issuer, and sales of such rights so acquired; and

Purchases or sales that receive the prior approval of the BMO Funds Chief Compliance Officer on the ground that they are not inconsistent with this Code or the provisions of Rule 17-j-l(a).

Reporting Securities Transactions

Duty to Report - If any Disinterested Director has a Beneficial Ownership in a transaction in a security and at the time of the transaction knew, or in the ordinary course of fulfilling his or her official duties as a director should have known, that on the day of the transaction or within 15 days before or after that day a purchase or sale of that class of security was made or being considered for a Fund, he or she shall report the transaction to the Chief Compliance Officer within 30 days after the end of the calendar quarter in which the transaction occurred.

Form of Report - A report pursuant to Section X.C.i may be in any form, such as that in Exhibit A, (including a copy of a confirmation or monthly brokerage statement) but must include:

The date of the transaction;

The title, interest rate and maturity date (if applicable), number of shares, and the principal amount (if applicable) of the security;

The nature of the transaction (i.e., purchase, sale, gift, or other type of acquisition or disposition);

The price at which the transaction was effected;

The name of the broker, dealer or bank with or through whom the transaction was effected;

The name of the reporting person; and

The date on which the report is submitted.

Initial and Annual Holdings Reports - Disinterested Directors shall not be required to complete and submit Initial and Annual Holdings Reports.

Transactions with a Fund or the BMO Funds

No Disinterested Director will knowingly sell to or purchase from a Fund any security or other property except securities issued by a Fund.

XI.

W AIVERS BY THE D ESIGNATED R EPORTING P ERSON

The Designated Reporting Person or his or her designee may, in his or her discretion, waive compliance by a Covered Person with the provisions of the Code, if he or she finds that such a waiver:

•

is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances;

•

will not be inconsistent with the purposes and objectives of the Code;

•

will not adversely affect the interests of any Client of the Advisers or the interests of the Adviser or its affiliates; and

•

will not result in a transaction or conduct that would violate provisions of applicable laws or regulations. Any waiver shall be in writing and shall contain a statement of the basis for the waiver.

XII.

R EVIEWING AND M ONITORING

The Compliance Department will review all reports required under this Code, and personal trading activity and trading records to identify improper trades or patterns of trading or possible violations of the provisions or spirit of this Code. The Designated Reporting Person may designate one or more individuals to assist with the review of these items.

The Compliance Department shall institute and periodically review procedures (1) reasonably necessary to prevent violations of this Code and (2) pursuant to which appropriate management or compliance personnel review all reports required by this Code.

XIII.

R EPORTING V IOLATIONS AND S ANCTIONS

Covered Persons who are aware of any possible violations of this Code must promptly report them to their Designated Reporting Person. Upon discovering that a Covered Person has not complied with the requirements or spirit of this Code, a Designated Reporting Person shall submit the findings to the Compliance Committee. The Compliance Committee may impose on that Covered Person sanctions the Compliance Committee deems appropriate, including, among other things, the unwinding of the transaction, and the disgorgement of profits, suspension or termination of employment, or removal from office. These sanctions may be assessed individually or in combination. Prior violations by the Covered Person and the degree of responsibility exercised by the Covered Person will be taken into consideration in the assessment of sanctions. In instances where a member of the Covered Person’s household commits the violation, any sanction will be imposed on the Covered Person.

XIV.

A NNUAL R EPORT TO AND R EVIEW BY BMO F UNDS B OARD OF D IRECTORS

No less frequently than annually, the Adviser, the sub-adviser to any Fund, the Company’s distributor and the Company are each required to furnish to the Company’s Board of Directors a written report that:

(a)

describes any issues arising under the Code of Ethics since the last report to the Board of Directors, including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to the material violations; and

(b)

certifies that the Adviser and the Company have adopted procedures reasonably necessary to prevent access persons from violating the Code.

In addition, each Adviser to an investment company registered under the Investment Company Act will, no less frequently than annually, also furnish to the respective investment company’s board of directors, the written report described above.

At least annually and, in any case, within months of adopting any material change to this Code, the each Adviser to a registered investment company under the Investment Company Act shall submit to such investment company’s Board of Directors for approval any recommended or previously adopted changes to this Code.

XV.

R ECORDKEEPING

The Compliance Department will maintain copies of the Code, records of persons subject to reporting under the Code, copies of Covered Persons’ written acknowledgement of receipt of the Code, records of personal securities transactions and holdings reports and the Compliance Department’s review of the same, records of decisions relating to approvals of investments in limited offerings or private placements, records of violations of the Code and actions taken as a result of the violations, and records of the annual reports provided to the BMO Funds’ Board of Directors. These records will be maintained (generally for five full fiscal years) in accordance with applicable laws and rules there under.

XVI.

F ORM ADV

The Advisers will describe its Code of Ethics in Form ADV Part 2A and, upon request, furnish the clients with a copy of the Code.

XVII.

C ONFIDENTIALITY

All reports and records monitored, prepared or maintained pursuant to this Code shall be considered confidential and proprietary to the BMO Entities and shall be maintained and protected accordingly; however, such reports and records may be made available, to the BMO Entities’ Board of Directors, the Board of Directors of investment companies for whom an Adviser provides services, BMO Corporate Audit, regulators, or other appropriate persons as may be reasonable and necessary to accomplish the purpose of this Code.

EXHIBIT A

BMO F UNDS

T RANSACTION R EPORTING F ORM FOR D ISINTERESTED D IRECTORS

Background. Marshall Funds, Inc. (the “BMO Funds” or “Funds”) has adopted a code of ethics (the “Code of Ethics”) to comply with Rule 17j-1 of the Investment Company Act. The Code of Ethics requires “access persons” to report their personal securities transactions. While the definition of “access person” includes directors of Marshall Funds, a director who is not an “interested person” of the Funds (i.e. a “Disinterested Director”) and who would be required to make a report solely by reason of being a Fund director, is not required to submit initial or annual holdings reports and is only required to report transactions in Securities (as defined by the Code of Ethics) on a quarterly basis if the director knew or, in the ordinary course of fulfilling his or her official duties as a Fund director, should have known that during the 15-day period immediately before or after the director’s transaction in a Security, a Fund purchased or sold the Security, or the Fund or its investment adviser considered purchasing or selling the Security.

Transaction Reporting. Each Disinterested Director shall submit to the Chief Compliance Officer of BMO Asset Management Corp., the Fund’s investment adviser, a list of any applicable transactions, as described above, within 30 days of each calendar quarter end on this Form. To the extent the Disinterested Director does not have any applicable transactions, this Form need not be submitted. The Disinterested Directors will be reminded periodically of their reporting responsibilities. The reporting of any transaction below shall not be construed as an admission of any direct or indirect beneficial ownership in the subject security.

T RANSACTION R ECORD FOR ( Print Name ) F OR THE Q UARTER E NDED

I am reporting below all transactions required to be reported for the quarter pursuant to the Code of Ethics.

Date of

Transaction

Name of Security

and Ticker

Interest

Rate

Maturity

Date

Principal

Amount

Number of

Shares or Par

Type of Transaction

(B) (S) (Other)

Price

Broker/Bank/Other

Name of Account

(if other than yourself)



Disinterested Director Signature				Date


REVIEWED:
	Date	Compliance Review Signature
FOLLOW-UP ACTION (if any):

Exhibit A - 1

Vontobel Asset Management, Inc.

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CODE OF ETHICS

Updated: February 2, 2012



Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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TABLE OF CONTENTS


		Page(s)
1. STATEMENT OF GENERAL PRINCIPLES		2
1.1. Adherence to Ethical Standards of Vontobel Group		2
1.2. Compliance with Applicable U.S. Legislation		2
1.3. General Principles		3

2. DEFINITIONS		4-5

3. PRINCIPLES FOR DOING BUSINESS		6
3.1. Confidentiality		6
3.2. Conflicts of Interest		6
3.3. Service as a Director		6
3.4. Personal Fiduciary Appointments		6
3.5. Service on Civic and Charitable Organizations		6
3.6. Fees to Consultants and Agents		7
3.7. Personal Benefits		7
3.8. Personal Fees and Commissions		8
3.9. Dealings with Suppliers		8
3.10. Borrowing		8
3.11. Political Contributions		8
3.12. Political Contributions by Vontobel Employees		8-13
3.13. Duty to Report Violations or Potential Conflicts of Interest		13
3.14. Full Disclosure		13
3.15. Policy for Portfolio Holding Disclosure		14

4. PERSONAL SECURITIES TRANSACTIONS		15
4.1. Summary		15
4.2. Prohibited and Restricted Transactions		15
4.3. Blackout Period		16
4.4. Short-Term Trading		17
4.5. Prior Written Clearance of Personal Securities Trades and Full Disclosure of Securities Holdings		17-18

5. INSIDER TRADING		19
5.1. Policy and Policy Statement		19
5.2. Elements of Insider Trading		19-20
5.3. Penalties for Insider Trading		20-21
5.4. Procedures		21-22
5.5. Supervision		22-23

Appendix A Excerpts from cited SEC legislation		24
Appendix B Officers authorized to approve trades		33
Appendix C Security list (included and excluded)		34


		1
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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1.	STATEMENT OF GENERAL PRINCIPLES

1.1	Adherence to Ethical Standards of Vontobel Group

The emphasis placed on the observance of the highest ethical standards by the Vontobel Group’s management is well known to the Swiss financial marketplace. The cornerstones of its standing in the financial community are its integrity and, as a predominantly family-controlled organization, its independence from commercial considerations that could lead it to place its own interest before that of its clients. As a subsidiary of Vontobel Holding, Vontobel Asset Management, Inc. is held to the same standards of ethical conduct that govern the business activities of the Vontobel Group.

1.2	Compliance with Applicable U.S. Legislation

As an investment adviser registered with the US Securities and Exchange Commission (“SEC”), Vontobel Asset Management, Inc. is subject to the provisions of the Investment Advisers Act of 1940 (the “Advisers Act”). Rule 204A-1 under the Advisers Act requires all investment advisers to adopt and maintain a code of ethics and requires the adviser’s personnel to prepare and submit certain specified reports. A copy of Section 204A-1 is included in Appendix A.

Section 206 of the Advisers Act provides that it shall be unlawful for any investment adviser:

(1)

to employ any device, scheme, or artifice to defraud any client or prospective client;

(2)

to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;

(3)

(4)

to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative.

Vontobel Asset Management, Inc. is also subject to certain provisions of the Investment Company Act of 1940 (“the Investment Company Act”) with respect to fraudulent trading, as discussed in Section 4 hereunder, and the Insider Trading and Securities Fraud Enforcement Act of 1988, as discussed in Section 5 hereunder.

Vontobel Personnel shall at all times comply with these and all other laws and regulations that may be applicable to Vontobel Asset Management, Inc.‘s business. In some instances, where such laws and regulations may be ambiguous and difficult to interpret, Vontobel Personnel shall seek the advice of Vontobel Asset Management, Inc.‘s management, who shall obtain the advice of outside counsel as is necessary to comply with this policy of observance of all applicable laws and regulations. Excerpts from the securities legislation cited above are provided in Appendix A .


		2
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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1.3	General Principles

This Code of Ethics is based on the following principles:

(a)

The officers, directors and employees of Vontobel Asset Management, Inc. owe a fiduciary duty to all Vontobel Clients and, therefore, must at all times place the interests of Vontobel Clients ahead of their own.

(b)

Vontobel Personnel shall avoid any conduct that could create any actual or potential conflict of interest, and must ensure that their personal securities transactions do not in any way interfere with, or appear to take advantage of, the portfolio transactions undertaken on behalf of Vontobel Clients.

(c)

Vontobel Personnel shall not take inappropriate advantage of their positions with Vontobel Asset Management, Inc. to secure personal benefits that would otherwise be unavailable to them.

It is imperative that all Vontobel Personnel avoid any situation that might compromise, or call into question, the exercise of fully independent judgment in the interests of Vontobel Clients. All Vontobel Personnel are expected to adhere to these general principles in the conduct of the firm’s business, even in situations that are not specifically addressed in this Code’s provisions, procedures and restrictions. Serious and/or repeated violations of this Code may constitute grounds for dismissal.


		3
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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2.	DEFINITIONS

For purposes of this Code:

“Beneficial Ownership” and “Beneficial Owner(s)” shall be as defined in Section 16 of the Securities Exchange Act of 1934, which, generally speaking, encompasses those situations where the Beneficial Owner has the right to enjoy some economic benefits which are substantially equivalent to ownership regardless of who is the registered owner (see Appendix A ). This would include:

(a)

securities which a person holds for his or her own benefit either in bearer form, registered in his or her own name or otherwise, regardless of whether the securities are owned individually or jointly;

(b)

securities held in the name of a member of his or her immediate family or any adult living in the same household;

(c)

securities held by a trustee, executor, administrator, custodian or broker;

(d)

securities owned by a general partnership of which the person is a member or a limited partnership of which such person is a general partner;

(e)

securities held by a corporation which can be regarded as a personal holding company of a person; and

(f)

securities recently purchased by a person and awaiting transfer into his or her name.

The “Corporation” shall mean Vontobel Asset Management, Inc.

“Security” shall have the meaning set forth in Section 202(a)(18)of the Advisers Act (see Appendix A ), irrespective of whether the issuer is a US or non-US entity and whether the security is being held by a US or non-US custodian or, directly or indirectly, in personal custody ; except that it shall not include:

•

shares of an investment club account

•

securities issued by the US Government or US federal agencies that are direct obligations of the US

•

bankers’ acceptances, bank certificates of deposits and commercial paper

•

shares of registered open-end investment companies (mutual funds) that Vontobel does not advise or sub-advise

•

ETFs that Vontobel does not manage and that are based on a broad-based index

•

common securities indicies

•

commodities or commodity futures


		4
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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In addition to the items defined to be securities in Section 202(a)(18) of the Advisers Act, the following are expressly deemed to be securities subject to this Code :

•

ADR’s, ADS’s, GDR’s,

•

any type of preferred stock

•

corporate bonds

•

shares of registered open-end investment companies (mutual funds) that Vontobel advises or sub-advises.

•

closed-end investment funds that Vontobel advises or sub-advises.

For a more complete listing of items that are and are not securities please refer to Appendix C .

“Purchase or sale of a security” shall include the writing of an option to purchase or sell a security.

A security is “being considered for purchase or sale” or is “being purchased or sold” when a recommendation to purchase or sell the security by a Vontobel Asset Management, Inc. portfolio manager is under serious consideration or has already been made and the transaction executed.

“Restricted List” shall mean the list of securities (i) being considered for purchase or sale on behalf of a Vontobel Client; or (ii) being purchased or sold by a Vontobel Client.

“Vontobel Client(s)” shall mean both individual and institutional clients (including corporations, investment companies, trusts, endowments, foundations and other legal entities), whether resident or non-US-resident, for whom Vontobel Asset Management, Inc. provides investment supervisory services (discretionary management) or manages investment advisory accounts not involving investment supervisory services (non-discretionary management).

“Vontobel Employee(s)” shall include officers and employees of the Corporation.

“Vontobel Personnel” shall include officers, employees and directors of the Corporation.

“New Security” shall mean the establishment of a position which is not currently held by a client portfolio on the day the position is established.


		5
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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3.	PRINCIPLES FOR DOING BUSINESS

3.1	Confidentiality

Confidentiality is a fundamental principle of the investment management business. Vontobel Employees must maintain the confidential relationship between the Corporation and each of its Clients. Confidential information such as the identity of Vontobel Clients and the extent of their account relationship, must be held inviolate by those to whom it is entrusted and must never be discussed outside the normal and necessary course of the Corporation’s business. To the extent possible, all information concerning Vontobel Clients and their accounts shall be shared among Vontobel Employees on a strictly need-to-know basis. In this regard, Vontobel Employees shall be careful not to divulge to their colleagues or any third party any information concerning a Vontobel Client that could be considered “inside information”, as that term is defined in Section 5 hereof.

3.2	Conflicts of Interest

It shall be the first obligation of every Vontobel Employee to fulfill his or her fiduciary duty to Vontobel Clients. No Vontobel Employee shall undertake any outside employment, or engage in any personal business interest, that would interfere with the performance of this fiduciary duty. No Vontobel Employee may act on behalf of the Corporation in any transaction involving persons or organizations with whom he or she, or his or her family, have any significant connection or financial interest. In any closely held enterprise, even a modest financial interest held by the Vontobel Employee, or any member of his or her family, should be viewed as significant.

3.3	Service as an Outside Director

No Vontobel Employee shall become a director or any official of a business organized for profit without first obtaining written approval from the Board of Directors of the Corporation based upon its determination that such board service would not be inconsistent with the interests of the Corporation and its Clients.

3.4	Personal Fiduciary Appointments

No Vontobel Employee shall accept a personal fiduciary appointment without first obtaining the written approval of the Board of Directors of the Corporation, unless such appointment results from a close family relationship.

3.5	Service on Civic and Charitable Organizations

The Corporation encourages its employees to participate in local civic and charitable activities. In some cases, however, it may be improper for a Vontobel Employee to serve as a member, director, officer or employee of a municipal corporation, agency, school board, or library board. Such service is appropriate when adequate assurances, in writing, are first given to the Corporation that business relationships between the Corporation and such entities would not be prohibited or limited because of statutory or administrative requirements regarding conflicts of interest.


		6
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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3.6	Fees to Consultants and Agents

Any and all fees and payments, direct or indirect, to consultants, agents, solicitors and other third-party providers of professional services must be approved by the Chief Executive Officer prior to conclusion of any formal arrangements for services. No remuneration or consideration of any type shall be given by any Vontobel Employee to any person or organization outside of a contractual relationship that has received the prior approval of the Chief Executive Officer.

3.7	Personal Benefits

No Vontobel Employee, or member of his or her family, may give or accept a personal gift, benefit, service, form of entertainment, or anything of more than de minimis or nominal value ($200) (“gift”) from Vontobel Clients, suppliers, service providers, brokers and all other parties with whom the Corporation has contractual or other business arrangements (“Vontobel Client”), if such gift is made because of the recipient’s affiliation with the Corporation or with a Vontobel Employee.

Any Vontobel Employee who receives a gift, regardless of value, from a Vontobel Client shall promptly notify the Chief Compliance Officer, or his designee, via an online compliance system known as Employee TradeSphere.

Vontobel has retained a third party service provider, Financial Tracking Technologies, LLC (FTT), to provide web-based automated compliance services. Among a suite of compliance-related offerings by FTT, the employee compliance module, Employee TradeSphere (ETS), is a portal through which employees meet their compliance obligations. Through this secure, web-based platform, Vontobel Employees are able to perform a variety of compliance-related tasks, including, among other tasks:

•

Personal trade pre-clearance

•

Code of Ethics delivery and certification

•

Compliance Manual delivery and certification

•

Political contribution pre-clearance and certification

•

Gifts giving or acceptance pre-clearance

•

Personal account establishment or modification

•

Holdings and Transactions reporting and certification

•

Outside Business Activity

A request for gift pre-clearance is made on ETS through a 4-step, paperless process:

(1)

An employee enters ETS through a login and password on their website;

(2)

After logging in, the employee locates the new activity tab, the clicking of which opens a web form containing the fields necessary to enter information about the proposed gift;

(3)

Once the necessary information has been filled in, the request is then sent electronically for approval or denial to the Chief Compliance Officer or designee who shall determine whether the gift exceeds the de minimis value and whether the gift shall be retained by the Vontobel Employee or member of his or her family, returned to the donor, or donated without tax deduction to a charitable organization selected by the Chief Compliance Officer, subject to the approval of the Chief Executive Officer. Where the value of the gift is not readily ascertainable, the Chief Compliance Officer or designee shall make a good faith determination of the gift’s value based on the known value of comparable items; and,

(4)

The decision of the Chief Compliance Officer or designee is then sent via email to the Vontobel Employee, who may not accept the gift until such decision has been received.


		7
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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Any Vontobel Employee who wishes to give a gift, regardless of value, to a Vontobel Client shall promptly pre-clear the gift with the Chief Compliance Officer or designee in the manner described above and may give the gift only upon prior approval. The Chief Compliance Officer or designee shall determine whether the gift exceeds the de minimis value and whether the gift shall be given by the Vontobel Employee.

3.8	Personal Fees and Commissions

No Vontobel Employee shall accept personal fees, commissions or any other form of remuneration in connection with any transactions on behalf of the Corporation or any of its Clients.

3.9	Dealings with Suppliers

Vontobel Employees shall award orders or contracts to outside suppliers on behalf of the Corporation solely on the basis of merit and competitive pricing, without regard to favoritism or nepotism.

3.10

Borrowing

No Vontobel Employee, or member of his or her family, may borrow money from any Vontobel Client or any of the Corporation’s suppliers, service providers, brokers and all other parties with whom the Corporation has contractual or other business arrangements under any circumstances.

3.11	Political Contributions by Vontobel

Vontobel Asset Management, Inc. shall make no contributions to political parties or candidates for public office.

3.12	Political Contributions by Vontobel Employees – “Pay to Play” Policy

I. PURPOSE

This Policy establishes the procedures through which Vontobel will comply with Rule 206(4)-5 under the Investment Advisers Act of 1940 (“Advisers Act”) and related recordkeeping rules in Advisers Act Rule 204-2, regarding political activity by investment advisers who do business with government entities.

The intent of Advisers Act Rule 206(4)-5 is to remove the connection between political contributions to state and local officials who may have influence over the awarding of government and public pension investment advisory business (i.e., “pay-to-play” practices). Rule 206(4)-5 is designed to address pay-to-play practices by:

•

Prohibiting investment advisers from being compensated for investment advisory services provided to a state or local government entity for two years if covered employees of the firm make political contributions to certain officials of that government entity in excess of certain de minimis levels;

•

Prohibiting solicitation or coordination of political contributions to such officials or certain state or local party committees;

•

Only allowing employees of the investment adviser and certain regulated entities to solicit investment advisory business from government entities; and


		8
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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•

Requiring investment advisers to maintain books and records relating to state and local government entity clients, political contributions, use of placement agents, and information relating to covered employees.

II.

DEFINITIONS

A. Contribution means any payment, gift, subscription, loan, advance, or deposit of money or anything of value made for:

The purpose of influencing any election for federal, state or local office;

The payment of debt incurred in connection with any such election; or

Transition or inaugural expenses incurred by the successful candidate for state or local office.

This includes not only monetary contributions, but also in-kind contributions such as payment for services or use of facilities, personnel or other resources to benefit any federal, state or local candidate campaign, political party committee, or other political committee or political organization exempt from federal income taxes under Section 527 of the Internal Revenue Code (such as the Republican or Democratic Governors Association); or the inaugural committee or transition team of a successful candidate. Volunteer services provided to a campaign by Vontobel Employees on their own personal time are not considered Contributions.

B. Covered Associate means, for purposes of this Policy, all Vontobel Employees. The determination of whether any other person or entity is a Covered Associate shall be made by the Compliance Department.

C. Solicit a Government Entity for Investment Advisory Services means a direct or indirect communication with a state or local Public Official or Government Entity for the purpose of obtaining or retaining Investment Advisory Services. The following are examples of when such solicitation may result:

Leading, participating in or being present at a sales/solicitation meeting with a state or local Public Official or Government Entity, such as a government pension plan or general fund;

Holding oneself out as part of the investment advisory services sales/solicitation effort with a state or local Public Official or Government Entity;

Signing a submission to a Request for Proposal in connection with Investment Advisory Services with a state or local Public Official or Government entity;

Receiving a finder’s fee for helping Vontobel obtain or retain Investment Advisory Services with a state or local Government Entity; and,

Making introductions between Public Officials and one or more Vontobel Employees.


		9
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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All specific questions regarding activities that may be considered an impermissible solicitation under this Policy should be directed to the Compliance Department.

D. Public Official means any person (including any election committee for the person) who was, at the time of the Contribution, an incumbent, candidate or successful candidate for elective office of a Government Entity.

E. Government Entity means any state or local government; any agency, authority or instrumentality of a state or local government; any pool of assets sponsored by a state or local government (such as a defined benefit pension plan, separate account or general fund); and any participant-directed government plan (such as 529, 403(b), or 457 plans).

F. Investment Advisory Services - The types of business subject to SEC Rule 206(4)-5 include:

Providing investment advisory services directly to a Government Entity;

Being an adviser (e.g., general or managing partner) or sub-adviser to the following types of investment pools/funds:

(a)

Investment pools/funds that are registered with the SEC (such as mutual funds) that are offered by a Government Entity in a government-sponsored plan (such as a 529, 403(b), or 457 plan) as an option for participants/retirees to invest in. Unless the registered investment pool/fund is offered as an option in such government plan, a Government Entity merely investing in the registered pool is NOT covered.

(b)

Investment pools/funds that are not registered with the SEC, such as hedge funds, private equity funds, venture capital funds, and collective investment trusts in which Government Entities invest.

G. Coordinating Contributions means bundling, pooling, delivering or otherwise facilitating the Contributions made by other persons.

H. Soliciting Contributions means to communicate, directly or indirectly, for the purpose of obtaining or arranging a Contribution.

G. Political Action Committee (PAC) includes, but is not limited to, political committees generally referred to as PACs, such as separate segregated funds or non-connected committees within the meaning of the Federal Election Campaign Act, or any state or local law equivalent.

III.

POLICIES AND PROCEDURES FOR POLITICAL ACTIVITY BY COVERED ASSOCIATES

A. Pre-Approval of Contributions, Coordination and Solicitation of Contributions, and Fundraising

Contributions: All Vontobel Employees are required to obtain approval from the Compliance Department prior to making any Contribution. Vontobel Employees may request such approval via a specially designated web form in ETS in the manner described above in Section 3.7. The Compliance Department will review and evaluate each Contribution request to determine whether the Contribution is permissible based upon the requirements of Rule 206(4)-5 and any other Vontobel policy.


		10
Vontobel Asset Management, Inc.	1540 Broadway, 38th Floor	Telephone +1-212-415 70 00
	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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Coordinating or Soliciting Contributions, or Political Fundraising: Also via ETS, all Vontobel Employees must obtain approval from the Compliance Department prior to Coordinating or Soliciting Contributions, or engaging in any other political fundraising.

B. Prohibition Against Establishing or Controlling a Political Action Committee

Vontobel Employees are prohibited from establishing, controlling, contributing to or otherwise being involved with a PAC without pre-approval from the Compliance Department.

C. Examples of Permissible or Potentially Permissible Contributions; Pre-Approval Required

Although all Vontobel Employee Contributions must be pre-approved by the Compliance Department, the Contributions described below are examples of those which may be approved pursuant to the pre-approval process.

Contributions to any Public Official, if:

The Vontobel Employee is entitled to vote for such Public Official and the Contribution(s) do not exceed $350 per election; or

The Vontobel Employee is not entitled to vote for such Public Official and the Contribution(s) do not exceed $150 per election.

All other requested Contributions will be considered on a case-by-case basis and will only be permitted if the Compliance Department determines that such Contribution will not violate Rule 206(4)-5.

D. Indirect Contributions

Vontobel Employees are prohibited from performing any act which would result in a violation of Rule 206(4)-5 and/or this Policy, whether directly or indirectly, or through or by any other person or means. This means that they may not use other persons or entities, including Vontobel affiliates, placement agents, or third-party PACs, as “conduits” to circumvent Rule 206(4)-5 and/or this Policy. Contributions made by others (for example, spouses, family members, attorneys, businesses, etc.) at the direction or suggestion of an Vontobel Employee are considered to be made by that Vontobel Employee for purposes of this Policy and must be pre-cleared.

E. Volunteering for a Campaign

Vontobel Employees are not prohibited from volunteering to serve on political campaigns or providing any other services that would not be considered a Contribution under this Policy. However, no Vontobel Employee may undertake any political activity (i) using Vontobel’s name, (ii) during working hours, (iii) on Vontobel’ premises and/or (iv) with the use of any Vontobel equipment, property or personnel without obtaining pre-approval from the Compliance Department via ETS.

F. Quarterly Political Contributions Certification Form

At the end of each calendar quarter, Vontobel Employees are required to report and certify to the Compliance Department via a specially designated web form in ETS their political contributions for the quarter. The Compliance Department will review the report for any Contributions that were not pre-cleared or otherwise violated this Policy and take corrective action as prescribed under Rule 206(4)-5.

G. New Vontobel Employees

Because Contributions made within two years prior to becoming a Vontobel Employee may trigger a ban on receiving compensation for Advisory Services, the Compliance Department will review each individual’s prior Contributions before allowing him or her to become an Vontobel Employee.


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IV.

POLICIES AND PROCEDURES REGARDING THE USE OF PLACEMENT AGENTS

No Vontobel Employee may directly or indirectly use a third-party or an affiliate (i.e., anyone who is not an Employee of Vontobel) to solicit a Public Official or Government Entity for Investment Advisory Services without pre-approval from the Compliance Department. Among other things, the Compliance Department will ensure that the third-party or affiliate is a permissible placement agent under Rule 206(4)-5 and applicable state and local statutes.


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RECORDKEEPING

A. Records Retention

Please note that the Compliance Department will keep necessary records based on the information gathered under this Policy, in compliance with Rule 204-2. Specifically, the Compliance Department will maintain:

A list of the names, titles and business and residence addresses of all Covered Associates;

A list of all Government Entities to which Vontobel provides or has provided Investment Advisory Services, or which are or were investors in any covered investment pool to which Vontobel provides or has provided investment advisory services in the past five years;

A list of all Contributions made by Vontobel or any of its Covered Associates, which identifies in chronological order:

The name and title of each contributor;

The name and title (including any city/county/State or other political subdivision) of each recipient of a Contribution;

The amount and date of each Contribution; and,

Whether any such Contribution was the subject of the exception for certain returned contributions pursuant to Rule 275.206(4)-5(b)(2)

The name and business address of each regulated person to whom Vontobel provides or agrees to provide, directly or indirectly, payment to solicit a Government Entity for Investment Advisory Services on its behalf, in accordance with Rule 275.206(4)-5(a)(2).

3.13	Duty to Report Violations or Potential Conflicts of Interest

The Corporation’s management and Board of Directors must be informed at all times of matters that may constitute violations of this Code of Ethics, or that may be considered of fraudulent or illegal nature, or potentially injurious to the good reputation of the Corporation or the Vontobel Group. Vontobel Employees shall have a duty to report such events immediately to the Chief Compliance Officer or the Chief Executive Officer or, if such events concern the Corporation’s management, they should be reported to the Chairman.

3.14	Full Disclosure

In responding to requests for information concerning the Corporation’s business practices from the Corporation’s internal or independent accountants and auditors, counsel, regulatory agencies or other third parties, Vontobel Employees shall be truthful in their communications and shall make full disclosure at all times.


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3.15	Policy for Portfolio Holding Disclosure

For existing separate, institutional and commingled accounts (or the consultant representing the account), advised and sub-advised portfolios and managed accounts, full portfolio holdings are available upon request by the client or the consultant representing the client. Full portfolio holdings for representative accounts will be disseminated monthly with a 30 day lag to consultant databases, RFP’s, questionnaires, client reports, marketing books, and finals presentations.

Top 10 holdings with portfolio weightings for representative accounts will be disseminated monthly and or quarterly with a 10 day lag to consultant databases, upon client request, questionnaires, RFP’s, quarterly client reports, marketing books, and finals presentations.

Sector, industry, and country weightings will be made available to existing clients upon request as of the most recent month end with no lag. Sector, industry and country weightings for representative accounts will be disseminated monthly with no lag to consultant databases, RFP’s, questionnaires, quarterly client reports, upon client request, marketing books, and finals presentations.


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4.	PERSONAL SECURITIES TRANSACTIONS

4.1

Summary

This Section 4 of the Code of Ethics is based upon Rule 204A-1 under the Advisers Act which requires investment advisers to adopt policies and procedures relating to, among other things, the personal securities transactions of their employees. The key provisions of this Code with respect to personal trading are summarized as follows:

•

Prohibition on investing in initial public offerings

•

Restrictions on investing in private placements

•

Prior written clearance of personal trades

•

Seven-day blackout period

•

Thirty-day ban on short-term trading profits of securities held, or being considered for purchase for the portfolios of Vontobel Clients

•

Full disclosure of all securities trades and securities holdings

4.2	Prohibited and Restricted Transactions

4.2.1

Rule 204A-1 requires investment advisers to adopt written codes of ethics designed to reflect the business standards and fiduciary obligations of its employees, to prevent fraudulent trading and, further, to use reasonable diligence and institute procedures reasonably necessary to prevent violations of their code of ethics. Vontobel Employees shall not engage in any act, practice or course of conduct that would violate the provisions of Rule 204A-1 under the Advisers Act or any other provisions of the federal securities laws.

All Vontobel Personnel are considered “access persons” as that term is defined under Rule 204A-1 of the Advisers Act. As may be required by the investment companies for which it acts as adviser or subadviser, Vontobel shall provide periodic reports with respect to the personal securities transactions of its access persons, as well as an annual compliance report.

No Vontobel Employee shall purchase or sell, directly or indirectly, any security listed on the firm’s Restricted List; except that the prohibitions of this section shall not apply to:

(a)

purchases or sales which are non-volitional on the part of any Vontobel Employee;

(b)

purchases which are part of an automatic dividend reinvestment or other plan established by any Vontobel Employee prior to the time the security involved came within the purview of this Code; and

(c)

purchases effected upon the rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.

4.2.2

No Vontobel Employee shall acquire any securities in an initial public offering.

4.2.3

No Vontobel Employee shall acquire securities in a private placement without the prior approval of the Chief Compliance Officer or other officer designated by the Chief Executive Officer. The request and subsequent decision are made online via a specially designated web form in ETS as described in Section 3.7. In considering a request to invest in a private placement, the Chief Compliance Officer will take into account, among other factors, whether the investment opportunity should be reserved for a Vontobel Client, and whether the opportunity is being offered to a Vontobel Employee by virtue of his or her position with the Corporation.


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4.3	Blackout Period*

4.3.1

No Vontobel Employee shall execute a securities transaction on a day during which Vontobel Asset Management, Inc. has a pending “buy” or “sell” order in that same security for a Vontobel Client or its own account until that order is executed or withdrawn.

4.3.2

Vontobel Employees are prohibited from purchasing or selling a security within seven (7) calendar days before or after the date on which a transaction in the same security is effected for a Vontobel Client.

Should any Vontobel Employee make an authorized personal trade within such blackout period, the Chief Compliance Officer (or, in his absence, any officer authorized to approve trades), shall, in his sole discretion and based on his assessment of the facts and circumstances surrounding such personal trade, determine whether the Vontobel Employee can be deemed to have benefited, or appear to have benefited, from the market effect of the trade for the Vontobel Client. If such officer so determines, the Vontobel Employee shall cancel the trade or promptly disgorge the imputed profit, if any, from his or her personal trade that shall have accrued between the date thereof and the trade date of the transaction in the same security for the Vontobel Client. Imputed profit shall in all cases mean the difference between the price at which the Vontobel Employee transacted and the price at which the trade for the Vontobel Client was transacted.

The prohibitions of this section shall not apply to:

(a)

purchases or sales which are non-volitional on the part of either the Vontobel Employee or the Vontobel Client account;

(b)

purchases or sales which are part of an automatic dividend reinvestment or other plan established by Vontobel Employees prior to the time the security involved came within the purview of this Code;

(c)

purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired; and

(d)

purchases or sales on any one day of up to the greater of (i) 2,000 shares or (ii) one (1) percent of the prior ten (10) day average trading volume of any security listed on an exchange and held in a client account (or subsequently purchased for a client’s account). Vontobel’s Chief Compliance Officer along with the firm’s trading desk will review the liquidity of each requested purchase or sale prior to the transaction being approved. No Vontobel Employee will be allowed to effect a purchase or sale of a security while a client has a pending purchase or sale order, for that security, until the client’s order is executed or withdrawn.

The purpose of the blackout period before a client trade is to address front-running violations that occur when personal trades are made shortly before a client trade and benefit from the market effect of that trade. The blackout period after a client trade is intended to allow dissipation of the market effect of the client trade. It is also designed to prevent individuals from benefiting from a trade that is opposite the client trade (e.g., selling a security shortly after a purchase of the same security for a client boosted its price, or purchasing a security shortly after a sale of the same security for a client lowered its price).


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4.4	Short-Term Trading

No Vontobel Employee shall profit from the purchase and sale, or sale and purchase, of the same (or equivalent) securities which are owned by a Vontobel Client or which are being considered for purchase on behalf of Vontobel Clients, within thirty (30) calendar days. Any profits realized on such short-term trades must be disgorged and the profits will be paid to a charity selected by the Chief Compliance Officer and the Chief Executive Officer. The Chief Compliance Officer and any other officer authorized by the Chief Executive Officer to approve trades (see Appendix B ) may permit exemptions to the prohibition of this section on a case-by-case basis when no abuse is involved and the circumstances of the subject trades, as they are best able to determine, support an exemption, and shall note the reason for any such exemption on the trading authorization form (see 4.5.1. below). Vontobel Employees may sell a security covered by this section at a loss within thirty (30) calendar days of purchase, provided, however, that in such instance the Vontobel Employee may not repurchase the same security in less than thirty (30) calendar days.

4.5	Prior Written Clearance of Personal Securities Trades and Full Disclosure of Securities Holdings

4.5.1

Except with regard to those items listed in Appendix C that have been exempted from the firm’s pre-clearance requirements, all Vontobel Employees shall obtain authorization of their personal securities transactions prior to executing an order. Via a specially designated web form in ETS, a request must be submitted to one of the officers listed in Appendix B , and such officer must give his authorization prior to the Vontobel Employee’s placing a purchase or sell order with a broker. Should such officer deny the request, he will give a reason for the denial. An approved request will remain valid for two (2) business days from the date of the approval

Vontobel has retained a third party service provider, Financial Tracking Technologies, LLC (FTT), to provide web-based automated compliance services. Among a suite of compliance-related offerings by FTT, the Vontobel Employee compliance module, Vontobel Employee TradeSphere (ETS), is a portal through which Vontobel Employees meet their compliance obligations. Through this secure, web-based platform, Vontobel Employees are able to perform personal trade pre-clearance (See Section 3.7 for more information about ETS).

As with Gifts and Political Contributions, a request for authorization for a personal trade is made on ETS through a 4-step, paperless process:

(1)

A Vontobel Employee enters ETS through a login and password on their website;

(2)

After logging in, the Vontobel Employee locates the new trade tab, the clicking of which opens a web form containing the fields necessary to enter trade data;

(3)

Once the necessary trade data have been filled in, the request is then sent electronically for approval or denial to a designated officer (See, Appendix B ), who, with the assistance of a database, ultimately determines whether the trade is permissible under Code of Ethics strictures; and,

(4)

The decision of the designated officer is then sent via email to the Vontobel Employee, who may not trade until such decision has been received.


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Should any Vontobel Employee make an unauthorized personal trade in a security, he or she may be obliged, without benefit of tax deduction, to sell the position promptly and/or disgorge any imputed or realized profit that shall have accrued between the date of such unauthorized personal trade and the date of disgorgement. Profits disgorged by Vontobel Employees pursuant to this Code shall be paid to a charity selected by the Chief Compliance Officer and approved by the Chief Executive Officer.

4.5.2

Vontobel Employees shall instruct their broker(s), including the Corporation’s affiliate brokers, to supply the Chief Compliance Officer, on a timely basis (but in no event more than 30 days after the close of the calendar quarter in which the transactions occurred), with duplicate copies of confirmations of all personal securities transactions and copies of all periodic statements for all securities accounts containing securities in which Vontobel Employees have Beneficial Ownership.

4.5.3

The Chief Compliance Officer, or his designee, shall review the personal securities holdings and transaction reports of Vontobel Employees and evidence such review in writing.

4.5.5

The Chief Compliance Officer shall receive and maintain all reports required hereunder.

4.5.6

All Vontobel Employees shall promptly report to the Chief Compliance Officer any apparent violation of this Code. The Chief Compliance Officer shall conduct an investigation into the alleged violation and, in consultation with the CEO, impose whatever sanctions are appropriate under the circumstances. On a semi-annual basis, the Chief Compliance Officer shall report any violations of the Code to the Board of Directors. The Chief Compliance Officer shall be responsible for maintaining and updating Vontobel’s Code of Ethics.

4.5.7

This Code of Ethics, a copy of each report made by Vontobel Personnel, each memorandum made by the Chief Compliance Officer hereunder, and a record of any violation hereof and any action taken as a result of such violation, shall be maintained by the Chief Compliance Officer, as required by Rule 204-2(a)(12) of the Advisers Act.

4.5.8

Vontobel Employees shall disclose their personal securities holdings to the Chief Compliance Officer within ten (10) days of the commencement of employment.

4.5.9

Annually, Vontobel Personnel shall be required to certify that they have (a) read and understand the Code, and recognize that they are subject thereto; (b) instructed each financial institution through which they, or any member of their household, effect securities transactions to send duplicate copies of their account statements and trading confirmations to Vontobel; (c) complied with the requirements of the Code; (d) disclosed and reported all personal securities transactions required to be disclosed; and (e) disclosed all personal securities holdings. Such annual report and certification shall be submitted within thirty (30) days of the end of the calendar year and shall be current as of a date no more than forty-five (45) days before submission.

4.5.10

The Chief Compliance Officer shall prepare an annual report to the Corporation’s Board of Directors. Such report shall (a) include a copy of the Code of Ethics; (b) summarize existing procedures concerning personal investing and any changes in the Code’s policies or procedures during the past year; (c) identify any violations of the Code; and (d) identify any recommended changes in existing restrictions, policies or procedures based upon the Corporation’s experience under the Code, any evolving practices, or developments in applicable laws or regulations.


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5.	INSIDER TRADING

The Insider Trading and Securities Fraud Enforcement Act of 1988 (“ITSFEA”) requires that all investment advisers and broker-dealers establish, maintain and enforce written policies and procedures designed to detect and prevent the misuse of material nonpublic information by such investment adviser and/or broker-dealer, or any person associated with the investment adviser and/or broker-dealer.

Section 204A of the Advisers Act states that an investment adviser must adopt and disseminate written policies with respect to ITSFEA, and an investment adviser must also vigilantly review, update and enforce them. Accordingly, Vontobel Asset Management, Inc. has adopted the following policy, procedures and supervisory procedures as an integral part of its Code of Ethics applicable to all of its officers, employees and directors (sometimes referred to herein as Vontobel Personnel).

5.1

Policy

The purpose of this Section 5 is to familiarize Vontobel Personnel with issues concerning insider trading and assist them in putting into context the policy and procedures on insider trading.

Policy Statement :

No Vontobel Personnel may trade in a security, either personally or on behalf of Vontobel Clients, while in possession of material, nonpublic information regarding that security; nor may any officer, employee or director communicate material, nonpublic information to others in violation of the law. This conduct is commonly referred to as “insider trading”. This policy extends to activities within and without the individual job functions of Vontobel Personnel and covers not only their personal transactions, but indirect trading by family, friends and others, or the nonpublic distribution of inside information from them to others. Any questions regarding the policy and procedures should be referred to the Chief Compliance Officer.

The term “insider trading” is not defined in federal securities laws, but generally is used to refer to the use of material nonpublic information to trade in securities (whether or not one is an “insider”) or the communication of material nonpublic information to others who may then seek to benefit from such information.

While the law concerning insider trading is not static and may undergo revisions from time to time, it is generally understood that the law prohibits:

(a)

trading by an insider, while in possession of material nonpublic information, or

(b)

trading by a non-insider, while in possession of material nonpublic information, where the information either was disclosed to the non-insider in violation of an insider’s duty to keep it confidential or was misappropriated, or

(c)

communicating material nonpublic information to others.

5.2	Elements of Insider Trading

5.2.1

Who Is an Insider?


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The concept of “insider” is broad. It includes officers, directors and employees of a company. In addition, a person can be a “temporary insider” if he or she enters into a special confidential relationship in the conduct of a company’s affairs and as a result is given access to information solely for the company’s purposes. A temporary insider can include, among others, a company’s attorneys, accountants, consultants, bank lending officers, and the employees of such service providers. In addition, an investment adviser may become a temporary insider of a company it advises or for which it performs other services. According to the Supreme Court, the company must expect the outsider to keep the disclosed nonpublic information confidential and the relationship must at least imply such a duty before the outsider will be considered an insider.

5.2.2

What Is Material Information?

Trading on inside information can be the basis for liability when the information is material. In general, information is “material” when there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company’s securities. Information that officers, directors and employees should consider material includes, but is not limited to: dividend changes, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems and extraordinary management developments.

5.2.3

What Is Nonpublic Information?

Information is nonpublic until it has been effectively communicated to the marketplace. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the SEC, or appearing in Bloomberg electronic news reports, or in The Wall Street Journal or other publications of general circulation would be considered public. (Depending on the nature of the information, and the type and timing of the filing or other public release, it may be appropriate to allow for adequate time for the information to be “effectively” disseminated.)

5.2.4

Legal Bases for Liability

(a)

Fiduciary Duty Theory : In 1980 the Supreme Court found that there is no general duty to disclose before trading on material nonpublic information, but that such a duty arises only where there is a direct or indirect fiduciary relationship with the issuer or its agents. That is, there must be a relationship between the parties to the transaction such that one party has a right to expect that the other party will disclose any material nonpublic information or refrain from trading.

(b)

Misappropriation Theory : Another basis for insider trading liability is the “misappropriation theory”, where liability is established when trading occurs on material on nonpublic information that was stolen or misappropriated from any other person.

5.3	Penalties for Insider Trading

Penalties for trading on or communicating material nonpublic information are severe, both for individuals and their employers. An individual can be subject to some or all of the penalties below even if he or she does not personally benefit from the violation:

•

civil injunctions


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•

treble damages

•

disgorgement of profits

•

jail sentences

•

fines for the person who committed the violation of up to three times the profit gained or loss avoided, whether or not the person actually benefitted, and

•

fines for the employer or other controlling person of up to the greater of $1 million or three times the amount of the profit gained or loss avoided.

5.4.	Procedures

The following procedures have been established to aid Vontobel Personnel in avoiding insider trading, and to aid in preventing, detecting and imposing sanctions against insider trading. Vontobel Personnel must follow these procedures or risk serious sanctions, including dismissal, substantial personal liability and/or criminal penalties. If you have any questions about these procedures, you should consult the Chief Compliance Officer.

5.4.1

Identifying Inside Information . Before trading for yourself or others, including Vontobel Clients, in the securities of a company about which you may have potential inside information, ask yourself the following questions:

(a)

Is the information material? Is this information that an investor would consider important in making his or her investment decisions? If this information that would substantially affect the market price of the securities if generally disclosed?

(b)

Is the information nonpublic? To whom has this information been provided? Has the information been effectively communicated to the marketplace, e.g., by being published electronically by Bloomberg, or in The Wall Street Journal or other publications of general circulation?

If, after consideration of the above, you believe that the information is material and nonpublic, or if you have questions as to whether the information is material and nonpublic, you should report the matter immediately to the Chief Compliance Officer. Until he has had an opportunity to review the matter, you should not (i) purchase or sell the security on behalf of yourself or others, including Vontobel Clients, and (ii) communicate the information to anyone, other than to the Chief Compliance Officer. After the Chief Compliance Officer has reviewed the issue, you will be instructed to either continue the prohibitions against trading and communication, or you will be allowed to communicate the information and then trade.

5.4.2

Personal Security Trading . Each officer, director and employee must instruct their broker(s) to supply the Chief Compliance Officer, on a timely basis, with duplicate copies of confirmations of all personal securities transactions and copies of all periodic statements for all securities accounts owned or controlled by them or their families (including the spouse, minor children, and adults living in the same household), and trusts of which they are trustees or in which they have beneficial ownership or have participated.

5.4.3

Restricting Access to Material Nonpublic Information . Any information in your possession that you identify as material and nonpublic may not be communicated other than in the course of performing your duties to anyone, including your colleagues at Vontobel Asset Management, Inc., with the exception of the Chief Compliance Officer as provided in subparagraph 5.4.1 above. In addition, care should be taken so that such information is secure. For example, files containing material nonpublic information should be locked; access to computer files containing material nonpublic information should be restricted.


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5.4.4

Resolving Issues Concerning Insider Trading . If, after considerations of the items set forth in Section 5.2, doubt remains as to whether information is material or nonpublic, or if there is any unresolved question as to the applicability or interpretation of the foregoing procedures, or as to the propriety of any action, it must be discussed with the Chief Compliance Officer before trading or communicating the information to anyone.

5.5	Supervision

The supervisory role of the Chief Compliance Officer is critical to the implementation and maintenance of this Statement on Insider Trading, and encompasses the following.

5.5.1

Prevention of Insider Trading

To prevent insider trading, the Chief Compliance Officer shall:

•

answer promptly any questions regarding the Statement on Insider Trading

•

resolve issues of whether information received by any officer, employee or director is material and nonpublic

•

update the Statement on Insider Trading and distribute amendments thereto, as necessary, to all officers, employees and directors

•

obtain an annual written acknowledgement from all officers, employees and directors that they have reviewed the Corporation’s Code of Ethics, including the Statement on Insider Trading contained in this Section 5

•

when it has been determined that any officer, director or employee has material nonpublic information:

(i)

implement measures to prevent dissemination of such information, and

(ii)

if necessary, restrict officers, directors and employees from trading the securities.

5.5.2

Detection of Insider Trading

To detect insider trading, the Chief Compliance Officer shall:

•

Review for each officer, director and employee the periodic account statements and duplicate confirmations forwarded by their brokers to ensure that no trading took place in securities in which the Corporation was in possession of material nonpublic information;

•

review the trading activity of the mutual funds and private account portfolios managed by the Corporation quarterly; and

•

coordinate, if necessary, the review of such reports with other appropriate officers, directors or employees of the Corporation.


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5.5.3

Special Reports to Management

Promptly upon learning of a potential violation of the Statement on Insider Trading, the Chief Compliance Officer shall prepare a written report to the Chief Executive Officer and the Board of Directors of the Corporation and, if the violation occurred with respect to an investment company client, provide a copy of such report to the Board of Directors of the investment company concerned.

5.5.4

Annual Reports

On an annual basis, the Chief Compliance Officer shall prepare a written report to the Corporation’s Board of Directors setting forth the following:

•

a summary of the existing procedures to detect and prevent insider trading;

•

full details of any investigation, either internal or by a regulatory agency, of any suspected insider trading and the results of such investigation;

•

an evaluation of the current procedures and any recommendations for improvement.

An annual compliance report shall be furnished to the Board of Directors of the investment companies to which the Corporation acts as investment adviser or subadviser.


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APPENDIX A

Excerpts from cited SEC legislation:

Rule 204A-1 of the Investment Advisers Act of 1940 - Investment Adviser Code of Ethics

Section 204A of the Investment Advisers Act of 1940 - Prevention of Misuse of Nonpublic Information

Section 206 of the Investment Advisers Act of 1940 - Prohibited Transactions by Investment Advisers

Definitions:

“Beneficial Owner” - as defined in Section 16 of the Securities Exchange Act of 1934

“Security(ies) - as defined in Section 202(a)(18) of the Investment Advisers Act of 1940


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Rule 204A-1 Investment Adviser Codes of Ethics.

(a) Adoption of code of ethics. If you are an investment adviser registered or required to be registered under section 203 of the Act (15 U.S.C. 80b–3), you must establish, maintain and enforce a written code of ethics that, at a minimum, includes:

(1) A standard (or standards) of business conduct that you require of your supervised persons, which standard must reflect your fiduciary obligations and those of your supervised persons;

(2) Provisions requiring your supervised persons to comply with applicable Federal securities laws;

(3) Provisions that require all of your access persons to report, and you to review, their personal securities transactions and holdings periodically as provided below;

(4) Provisions requiring supervised persons to report any violations of your code of ethics promptly to your chief compliance officer or, provided your chief compliance officer also receives reports of all violations, to other persons you designate in your code of ethics; and

(5) Provisions requiring you to provide each of your supervised persons with a copy of your code of ethics and any amendments, and requiring your supervised persons to provide you with a written acknowledgment of their receipt of the code and any amendments.

(b) Reporting requirements —(1) Holdings reports. The code of ethics must require your access persons to submit to your chief compliance officer or other persons you designate in your code of ethics a report of the access person’s current securities holdings that meets the following requirements:

(i) Content of holdings reports. Each holdings report must contain, at a minimum:

(A) The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security in which the access person has any direct or indirect beneficial ownership;

(B) The name of any broker, dealer or bank with which the access person maintains an account in which any securities are held for the access person’s direct or indirect benefit; and

(ii) Timing of holdings reports. Your access persons must each submit a holdings report:

(A) No later than 10 days after the person becomes an access person, and the information must be current as of a date no more than 45 days prior to the date the person becomes an access person.

(B) At least once each 12-month period thereafter on a date you select, and the information must be current as of a date no more than 45 days prior to the date the report was submitted.

(2) Transaction reports. The code of ethics must require access persons to submit to your chief compliance officer or other persons you designate in your code of ethics securities transactions reports that meet the following requirements:


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(i) Content of transaction reports. Each transaction report must contain, at a minimum, the following information about each transaction involving a reportable security in which the access person had, or as a result of the transaction acquired, any direct or indirect beneficial ownership:

(A) The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable security involved;

(B) The nature of the transaction ( i.e. , purchase, sale or any other type of acquisition or disposition);

(D) The name of the broker, dealer or bank with or through which the transaction was effected; and

(E) The date the access person submits the report.

(ii) Timing of transaction reports. Each access person must submit a transaction report no later than 30 days after the end of each calendar quarter, which report must cover, at a minimum, all transactions during the quarter.

(3) Exceptions from reporting requirements. Your code of ethics need not require an access person to submit:

(i) Any report with respect to securities held in accounts over which the access person had no direct or indirect influence or control;

(ii) A transaction report with respect to transactions effected pursuant to an automatic investment plan;

(iii) A transaction report if the report would duplicate information contained in broker trade confirmations or account statements that you hold in your records so long as you receive the confirmations or statements no later than 30 days after the end of the applicable calendar quarter.

(c) Pre-approval of certain investments. Your code of ethics must require your access persons to obtain your approval before they directly or indirectly acquire beneficial ownership in any security in an initial public offering or in a limited offering.

(d) Small advisers. If you have only one access person ( i.e. , yourself), you are not required to submit reports to yourself or to obtain your own approval for investments in any security in an initial public offering or in a limited offering, if you maintain records of all of your holdings and transactions that this section would otherwise require you to report.

(e) Definitions. For the purpose of this section:

(1) Access person means:

(i) Any of your supervised persons:

(A) Who has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund, or


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(B) Who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.

(ii) If providing investment advice is your primary business, all of your directors, officers and partners are presumed to be access persons.

(2) Automatic investment plan means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.

(3) Beneficial ownership is interpreted in the same manner as it would be under §240.16a–1(a)(2) of this chapter in determining whether a person has beneficial ownership of a security for purposes of section 16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p) and the rules and regulations thereunder. Any report required by paragraph (b) of this section may contain a statement that the report will not be construed as an admission that the person making the report has any direct or indirect beneficial ownership in the security to which the report relates.

(4) Federal securities laws means the Securities Act of 1933 (15 U.S.C. 77a–aa), the Securities Exchange Act of 1934 (15 U.S.C. 78a–mm), the Sarbanes-Oxley Act of 2002 (Pub. L. 107–204, 116 Stat. 745 (2002)), the Investment Company Act of 1940 (15 U.S.C. 80a), the Investment Advisers Act of 1940 (15 U.S.C. 80b), title V of the Gramm-Leach-Bliley Act (Pub. L. 106–102, 113 Stat. 1338 (1999), any rules adopted by the Commission under any of these statutes, the Bank Secrecy Act (31 U.S.C. 5311–5314; 5316–5332) as it applies to funds and investment advisers, and any rules adopted thereunder by the Commission or the Department of the Treasury.

(5) Fund means an investment company registered under the Investment Company Act.

(6) Initial public offering means an offering of securities registered under the Securities Act of 1933 (15 U.S.C. 77a), the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).

(7) Limited offering means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) (15 U.S.C. 77d(2) or 77d(6)) or pursuant to §§230.504, 230.505, or 230.506 of this chapter.

(8) Purchase or sale of a security includes, among other things, the writing of an option to purchase or sell a security.

(9) Reportable fund means:

(i) Any fund for which you serve as an investment adviser as defined in section 2(a)(20) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(20)) ( i.e. , in most cases you must be approved by the fund’s board of directors before you can serve); or

(ii) Any fund whose investment adviser or principal underwriter controls you, is controlled by you, or is under common control with you. For purposes of this section, control has the same meaning as it does in section 2(a)(9) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(9)).


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(10) Reportable security means a security as defined in section 202(a)(18) of the Act (15 U.S.C. 80b–2(a)(18)), except that it does not include:

(i) Direct obligations of the Government of the United States;

(ii) Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;

(iii) Shares issued by money market funds;

(iv) Shares issued by open-end funds other than reportable funds; and

(v) Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are reportable funds.

[69 FR 41708, July 9, 2004]

Section 206 of the Investment Advisers Act of 1940

Prohibited Transactions by Investment Advisers

It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly–

(1)	to employ any device, scheme, or artifice to defraud any client or prospective client;

(2)	to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;

(3)

acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph (3) shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction;

(4)

to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.

Section 206A of the Investment Advisers Act of 1940

Exemptions

The Commission, by rules and regulations, upon its own motion, or by order upon application, may conditionally or unconditionally exempt any person or transaction, or any class or classes or persons, or transactions, from any provision or provisions of this title or of any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this title.


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Section 204A of the Investment Advisers Act of 1940

Prevention of Misuse of Nonpublic Information

Every investment adviser subject to section 204 of this title shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such investment adviser’s business, to prevent the misuse in violation of this Act or the Securities Exchange Act of 1934, or the rules or regulations thereunder, of material, nonpublic information by such investment adviser or any person associated with such investment adviser. The Commission, as it deems necessary or appropriate in the public interest or for the protection of investors, shall adopt rules or regulations to require specific policies or procedures reasonably designed to prevent misuse in violation of this Act or the Securities Exchange Act of 1934 (or the rules or regulations thereunder) of material, nonpublic information.

Definitions:

“Beneficial Owner”—as defined in Section 16 of the Securities Exchange Act of 1934— The term beneficial owner shall have the following applications:

Solely for purposes of determining whether a person is a beneficial owner of more than ten percent of any class of equity securities registered pursuant to section 12 of the Act, the term “beneficial owner” shall mean any person who is deemed a beneficial owner pursuant to section 13(d) of the Act and the rules thereunder; provided, however, that the following institutions or persons shall not be deemed the beneficial owner of securities of such class held for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business (or in the case of an employee benefit plan specified in paragraph (a)(1)(vi) of this section, of securities of such class allocated to plan participants where participants have voting power) as long as such shares are acquired by such institutions or persons without the purpose or effect of changing or influencing control of the issuer or engaging in any arrangement subject to Rule 13d-3(b) (§ 240.13d-3(b)):

A broker or dealer registered under section 15 of the Act (15 U.S.C. 78o);

A bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c);

An insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c);

An investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8);

Any person registered as an investment adviser under Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) or under the laws of any state;

An employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001 et seq. (“ERISA”) that is subject to the provisions of ERISA, or any such plan that is not subject to ERISA that is maintained primarily for the benefit of the employees of a state or local government or instrumentality, or an endowment fund;

A parent holding company or control person, provided the aggregate amount held directly by the parent or control person, and directly and indirectly by their subsidiaries or affiliates that are not persons specified in paragraphs (a)(1)(i) through (ix), does not exceed one percent of the securities of the subject class;

A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);

A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3); and

A group, provided that all the members are persons specified in § 240.16a-1(a)(1)(i) through (ix).

A group, provided that all the members are persons specified in § 240.16a-1(a)(1) (i) through (vii).


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Note to paragraph (a). Pursuant to this section, a person deemed a beneficial owner of more than ten percent of any class of equity securities registered under section 12 of the Act would file a Form 3 (§ 249.103), but the securities holdings disclosed on Form 3, and changes in beneficial ownership reported on subsequent Forms 4 (§ 249.104) or 5 (§ 249.105), would be determined by the definition of “beneficial owner” in paragraph (a)(2) of this section.

Other than for purposes of determining whether a person is a beneficial owner of more than ten percent of any class of equity securities registered under Section 12 of the Act, the term beneficial owner shall mean any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in the equity securities, subject to the following:

The term pecuniary interest in any class of equity securities shall mean the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities.

The term indirect pecuniary interest in any class of equity securities shall include, but not be limited to:

Securities held by members of a person’s immediate family sharing the same household; provided, however, that the presumption of such beneficial ownership may be rebutted; see also § 240.16a-1(a)(4);

A general partner’s proportionate interest in the portfolio securities held by a general or limited partnership. The general partner’s proportionate interest, as evidenced by the partnership agreement in effect at the time of the transaction and the partnership’s most recent financial statements, shall be the greater of:

The general partner’s share of the partnership’s profits, including profits attributed to any limited partnership interests held by the general partner and any other interests in profits that arise from the purchase and sale of the partnership’s portfolio securities; or

The general partner’s share of the partnership capital account, including the share attributable to any limited partnership interest held by the general partner.

A performance-related fee, other than an asset-based fee, received by any broker, dealer, bank, insurance company, investment company, investment adviser, investment manager, trustee or person or entity performing a similar function; provided, however, that no pecuniary interest shall be present where:

The performance-related fee, regardless of when payable, is calculated based upon net capital gains and/or net capital appreciation generated from the portfolio or from the fiduciary’s overall performance over a period of one year or more; and

Equity securities of the issuer do not account for more than ten percent of the market value of the portfolio. A right to a nonperformance-related fee alone shall not represent a pecuniary interest in the securities;

A person’s right to dividends that are separated or separable from the underlying securities. Otherwise, a right to dividends alone shall not represent a pecuniary interest in the securities;


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A person’s interest in securities held by a trust, as specified in § 240.16a-8(b); and

A person’s right to acquire equity securities through the exercise or conversion of any derivative security, whether or not presently exercisable.

A shareholder shall not be deemed to have a pecuniary interest in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity’s portfolio.

Where more than one person subject to section 16 of the Act is deemed to be a beneficial owner of the same equity securities, all such persons must report as beneficial owners of the securities, either separately or jointly, as provided in § 240.16a-3(j). In such cases, the amount of short-swing profit recoverable shall not be increased above the amount recoverable if there were only one beneficial owner.

Any person filing a statement pursuant to section 16(a) of the Act may state that the filing shall not be deemed an admission that such person is, for purposes of section 16 of the Act or otherwise, the beneficial owner of any equity securities covered by the statement.

The following interests are deemed not to confer beneficial ownership for purposes of section 16 of the Act:

Interests in portfolio securities held by any holding company registered under the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.);

Interests in portfolio securities held by any investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.); and

Interests in securities comprising part of a broad-based, publicly traded market basket or index of stocks, approved for trading by the appropriate federal governmental authority.

The term call equivalent position shall mean a derivative security position that increases in value as the value of the underlying equity increases, including, but not limited to, a long convertible security, a long call option, and a short put option position.

The term derivative securities shall mean any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege at a price related to an equity security, or similar securities with a value derived from the value of an equity security, but shall not include:

Rights of a pledgee of securities to sell the pledged securities;

Rights of all holders of a class of securities of an issuer to receive securities pro rata, or obligations to dispose of securities, as a result of a merger, exchange offer, or consolidation involving the issuer of the securities;

Rights or obligations to surrender a security, or have a security withheld, upon the receipt or exercise of a derivative security or the receipt or vesting of equity securities, in order to satisfy the exercise price or the tax withholding consequences of receipt, exercise or vesting;

Interests in broad-based index options, broad-based index futures, and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority;


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Interests or rights to participate in employee benefit plans of the issuer;

Rights with an exercise or conversion privilege at a price that is not fixed; or

Options granted to an underwriter in a registered public offering for the purpose of satisfying over-allotments in such offering.

The term equity security of such issuer shall mean any equity security or derivative security relating to an issuer, whether or not issued by that issuer.

The term immediate family shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

The term “officer” shall mean an issuer’s president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller), any vice-president of the issuer in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the issuer. Officers of the issuer’s parent(s) or subsidiaries shall be deemed officers of the issuer if they perform such policy-making functions for the issuer. In addition, when the issuer is a limited partnership, officers or employees of the general partner(s) who perform policy-making functions for the limited partnership are deemed officers of the limited partnership. When the issuer is a trust, officers or employees of the trustee(s) who perform policy-making functions for the trust are deemed officers of the trust.

Note: “Policy-making function” is not intended to include policy-making functions that are not significant. If pursuant to Item 401(b) of Regulation S-K (§ 229.401(b)) the issuer identifies a person as an “executive officer,” it is presumed that the Board of Directors has made that judgment and that the persons so identified are the officers for purposes of Section 16 of the Act, as are such other persons enumerated in this paragraph (f) but not in Item 401(b).

The term portfolio securities shall mean all securities owned by an entity, other than securities issued by the entity.

The term put equivalent position shall mean a derivative security position that increases in value as the value of the underlying equity decreases, including, but not limited to, a long put option and a short call option position.

“Security(ies)—as defined in Section 202(a)(18) of the Investment Advisers Act of 1940 — “Security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.


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APPENDIX B

Officers authorized to approve trades:

Joseph Mastoloni

Henry Schlegel

Thomas Wittwer


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APPENDIX C

The following items are expressly included within the Code’s definition of “Security” and must be pre-cleared:

•

Equity security

•

warrants

•

rights

•

convertible security

•

ADR’s, ADS’s, GDR’s

•

any type of preferred stock

•

corporate bonds

•

shares of registered open-end investment companies (mutual funds) that Vontobel advises or sub-advises

•

closed-end investment funds that Vontobel advises or sub-advises

The following items are expressly excluded from the Code’s definition of “Security” and do not require pre-clearance:

•

shares of an investment club account

•

securities issued by the US Government or US federal agencies that are direct obligations of the US

•

bankers’ acceptances, bank certificates of deposits and commercial paper

•

shares of registered open-end investment companies (mutual funds) that Vontobel does not advise or sub-advise

•

ETFs that Vontobel does not manage and that are based on a broad-based index

•

common securities indicies

•

commodities or commodity futures


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