VIRTUS OPPORTUNITIES TRUST (Form: 485BPOS, Received: 09/23/2016 15:33:02)

Name of Issuer and Title
of Security

No. of Shares (if
applicable)

Principal Amount,
Maturity Date and Interest
Rate (if applicable)

As filed with the Securities and Exchange Commission on September 23, 2016

File No. 033-65137

File No. 811-07455

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. 88		x

and/or

REGISTRATION STATEMENT

Under the INVESTMENT COMPANY ACT OF 1940

Amendment No. 89

(Check appropriate box or boxes)

Virtus Opportunities 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 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.

This Post-Effective Amendment consists of the following:

1. Facing Sheet of the Registration Statement

2. Prospectus for Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund

3. SAI covering all funds of Virtus Opportunities Trust, updated to include these three new funds

4. Part C

5. Signature Page

This Post-Effective Amendment is being filed for the sole purpose of completing the registration of the above-named funds.

Part A of Registrant’s Post-Effective Amendment No.85 to its registration statement filed on January 28, 2016, as supplemented, is incorporated by reference herein and this Post-Effective Amendment No. 88 is being filed for the sole purpose of registering shares of Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund.

TABLE OF CONTENTS

PROSPECTUS

TICKER SYMBOL BY CLASS

FUND

Class R6

Virtus Emerging Markets Opportunities Fund

HEMZX

PICEX

HIEMX

VREMX

Virtus Low Duration Income Fund

HIMZX

PCMZX

HIBIX

Virtus Tax-Exempt Bond Fund

HXBZX

PXCZX

HXBIX

	TRUST NAME:			SEPTEMBER 23, 2016
	VIRTUS OPPORTUNITIES TRUST

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

TABLE OF CONTENTS

Virtus Mutual Funds

Table of Contents

	FUND SUMMARIES
	Virtus Emerging Markets Opportunities Fund			1
	Virtus Low Duration Income Fund			6
	Virtus Tax-Exempt Bond Fund			11
	MORE INFORMATION ABOUT FUND EXPENSES			15
	MORE INFORMATION ABOUT INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES			16
	Virtus Emerging Markets Opportunities Fund			17
	Virtus Low Duration Income Fund			18
	Virtus Tax-Exempt Bond Fund			20
	MORE INFORMATION ABOUT RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES			21
	MANAGEMENT OF THE FUNDS			25
	RISKS ASSOCIATED WITH ADDITIONAL INVESTMENT TECHNIQUES AND FUND OPERATIONS			28
	PRICING OF FUND SHARES			32
	SALES CHARGES			34
	YOUR ACCOUNT			40
	HOW TO BUY SHARES			41
	HOW TO SELL SHARES			42
	THINGS YOU SHOULD KNOW WHEN SELLING SHARES			42
	ACCOUNT POLICIES			44
	INVESTOR SERVICES AND OTHER INFORMATION			46
	TAX STATUS OF DISTRIBUTIONS			47
	FINANCIAL HIGHLIGHTS			48

TABLE OF CONTENTS

Virtus Emerging Markets Opportunities Fund

Investment Objective

The fund has an investment objective of 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 34 of the fund’s prospectus and “Alternative Purchase Arrangements” on page 108 of the fund’s statement of additional information.

Shareholder Fees (fees paid directly from your investment)

Class A

Class C

Class I

Class R6

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

5.75

Non

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

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I			Class R6
Management Fees		0.95	%		0.95	%		0.95	%		0.95	%
Distribution and Service (12b-1) Fees		0.25	%		1.00	%		Non	e		Non	e
Other Expenses (b)		0.35	%		0.35	%		0.35	%		0.22	%
Acquired Fund Fees and Expenses (b)		0.01	%		0.01	%		0.01	%		0.01	%
Total Annual Fund Operating Expenses (c)		1.56	%		2.31	%		1.31	%		1.18	%

(a)

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

(b)

Estimated based on Predecessor Fund’s fiscal year ended December 31, 2015.

(c)

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

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		$725		$1,039		$1,376		$2,325
Class C	Sold		$334		$721		$1,235		$2,646
Class C	Held		$234		$721		$1,235		$2,646
Class I	Sold or Held		$133		$415		$718		$1,579
Class R6	Sold or Held		$120		$375		$649		$1,432

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 Predecessor Fund’s portfolio turnover rate was 27% of the average value of its portfolio.

Virtus Emerging Markets Opportunities Fund 1

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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. Equity-linked instruments are instruments issued by financial institutions or special purpose entities located in foreign countries to provide the synthetic economic performance of a referenced equity security; these securities are valued at market value for purposes of the fund’s requirement to invest 80% of its assets in emerging markets countries. 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(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or companies in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The redemption by one or more large shareholders or groups of shareholders of their holdings in the fund could have an adverse impact on the remaining shareholders in the fund including by accelerating the realization of capital gains and increasing the fund's transaction costs. 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 a particular style or in small or medium-sized companies may enhance that risk.

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

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

2 Virtus Emerging Markets Opportunities Fund

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Performance Information

The Virtus Emerging Markets Opportunities Fund, a series of Virtus Opportunities Trust (“Successor Fund”), is the successor of the Virtus Emerging Markets Opportunities Fund, a series of Virtus Insight Trust (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the Successor Fund on September 23, 2016. The Predecessor Fund and the Successor Fund have identical investment objectives and strategies. The Successor Fund has adopted the past performance of the Predecessor Fund as its own.

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 that reflects the market sectors in which the fund invests. Updated performance information is available at virtus.com or by calling 800-243-1574.

Calendar year total returns for Class I Shares

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

[MISSING IMAGE: EFSLB91MME5PL1IBBUNF5BQFTU0V.JPG]

Best Quarter:

Q2/2009:

26.74%

Worst Quarter:

Q3/2008:

-21.96%

Year-to-date (6/30/16):

8.53%

Average Annual Total Returns (for the periods ended 12/31/15)

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)			Since Inception Class R6 (11/12/14)
Class I
Return Before Taxes		-8.55	%		1.03	%		6.79	%			—			—
Return After Taxes on Distributions		-8.62	%		0.84	%		5.18	%			—			—
Return After Taxes on Distributions and Sale of Fund Shares		-4.54	%		0.92	%		5.73	%			—			—
Class A
Return Before Taxes		-14.01	%		-0.41	%		5.90	%			—			—
Class C
Return Before Taxes		-9.50			0.02	%			—		6.09	%			—
Class R6
Return Before Taxes		-8.44				—			—			—		-11.24	%
MSCI Emerging Markets Index (net) (reflects no deduction for fees, expenses or taxes)		-14.92	%		-4.81	%		3.61	%		3.77	%		-16.15	%

The MSCI Emerging Markets Index (net) is a free float-adjusted market capitalization-weighted index that measures developed equity market performance in the global emerging markets. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged and not available for direct investment.

Virtus Emerging Markets Opportunities Fund 3

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

Management

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

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

Portfolio Management

Brian Bandsma, a Director and Portfolio Manager at Vontobel, is Deputy Portfolio Manager of the fund. Mr. Bandsma has served as Deputy Portfolio Manager of the fund since June 2016.

Matthew Benkendorf, Chief Investment Officer and Managing Director at Vontobel, is Lead Portfolio Manager of the fund. Mr. Benkendorf has served as Lead Portfolio Manager of the fund since March 2016.

Jin Zhang, CFA, a Director and Portfolio Manager at Vontobel, is Deputy Portfolio Manager of the fund. Mr. Zhang has served as Deputy Portfolio Manager of the fund since June 2016.

Purchase and Sale of Fund Shares

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

•

$2,500, generally

•

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

•

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

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

•

$100, generally

•

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

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

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

Taxes

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

Payments to Broker-Dealers and Other Financial Intermediaries

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

4 Virtus Emerging Markets Opportunities Fund

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

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

Virtus Emerging Markets Opportunities Fund 5

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Virtus Low Duration Income 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

Non

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

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.55	%		0.55	%		0.55	%
Distribution and Service (12b-1) Fees		0.25	%		1.00	%		Non	e
Other Expenses (b)		0.32	%		0.32	%		0.32	%
Total Annual Fund Operating Expenses		1.12	%		1.87	%		0.87	%
Less: Expense Reimbursement (c)		(0.37	%)		(0.37	%)		(0.37	%)
Total Annual Fund Operating Expenses After Expense Reimbursement (c)		0.75	%		1.50	%		0.50	%

(a)

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

(b)

Estimated based on Predecessor Fund’s fiscal year ended December 31, 2015.

(c)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding dividend and interest expenses, taxes, brokerage commissions, extraordinary expenses and acquired fund fees and expenses) so that such expenses do not exceed 0.75% for Class A Shares, 1.50% for Class C Shares and 0.50% for Class I Shares through September 30, 2017. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed under these arrangements for a period of three years following the time such reimbursement occurred.

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, that the fund’s operating expenses remain the same and that the expense reimbursement arrangement remains in place for the contractual period. 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		$300		$537		$793		$1,525
Class C	Sold		$253		$552		$977		$2,160
Class C	Held		$153		$552		$977		$2,160
Class I	Sold or Held		$51		$241		$446		$1,038

Portfolio Turnover

6 Virtus Low Duration Income Fund

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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. Duration represents the interest rate sensitivity of a fixed income fund. 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;

•

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

•

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), which are securities with credit ratings within the four highest rating categories of a nationally recognized statistical rating organization, including short-term securities; and

•

High-yield/high-risk debt instruments (so-called “junk bonds”), including bank loans (which are generally floating-rate).

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

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 and otherwise not benefit fully from the increase in value that other fixed income securities experience when interest rates decline.

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.

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

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.

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

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

The Virtus Low Duration Income Fund, a series of Virtus Opportunities Trust (“Successor Fund”), is the successor of the Virtus Low Duration Income Fund, a series of Virtus Insight Trust (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the Successor Fund on September 23, 2016. The Predecessor Fund and the Successor Fund have identical investment objectives and strategies. The Successor Fund has adopted the past performance of the Predecessor Fund as its own.

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.

[MISSING IMAGE: SJFUOFTB2NVTL5MMMPFEAE6LJ2NR.JPG]

Best Quarter:

Q2/2009:

5.42%

Worst Quarter:

Q3/2008:

-3.18%

Year-to-date (6/30/16):

2.48%

8 Virtus Low Duration Income Fund

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Average Annual Total Returns (for the periods ended 12/31/15)

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		1.24	%		2.78	%		4.03	%			—
Return After Taxes on Distributions		0.38	%		1.84	%		2.78	%			—
Return After Taxes on Distributions and Sale of Fund Shares		0.70	%		1.75	%		2.64	%			—
Class A
Return Before Taxes		-1.38	%		2.06	%		3.53	%			—
Class C
Return Before Taxes		0.13	%		1.76	%			—		3.22	%
Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		0.55	%		3.25	%		4.52	%		4.90	%
Barclays U.S. Intermediate Government/Credit Bond Index (reflects no deduction for fees, expenses or taxes)		1.07	%		2.58	%		4.04	%		4.32	%

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 Management

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

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

•

$2,500, generally

•

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

•

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

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

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•

$100, generally

•

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

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

Taxes

Payments to Broker-Dealers and Other Financial Intermediaries

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Virtus 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

Non

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

Non

1.00

% (a)

Non

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Class A			Class C			Class I
Management Fees		0.45	%		0.45	%		0.45	%
Distribution and Service (12b-1) Fees		0.25	%		1.00	%		Non	e
Other Expenses (b)		0.30	%		0.30	%		0.30	%
Total Annual Fund Operating Expenses		1.00	%		1.75	%		0.75	%
Less: Expense Reimbursement (c)		(0.15	%)		(0.15	%)		(0.15	%)
Total Annual Fund Operating Expenses After Expense Reimbursement (c)		0.85	%		1.60	%		0.60	%

(a)

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

(b)

Estimated based on Predecessor Fund’s fiscal year ended December 31, 2015.

(c)

The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding dividend and interest expenses, taxes, brokerage commissions, extraordinary expenses and acquired fund fees and expenses) so that such expenses do not exceed 0.85% for Class A Shares, 1.60% for Class C Shares and 0.60% for Class I Shares through September 30, 2017. Following the contractual period, the adviser may discontinue these expense reimbursement arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed under these arrangements for a period of three years following the time such reimbursement occurred.

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, that the fund’s operating expenses remain the same and that the expense reimbursement arrangement remains in place for the contractual period. 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		$359		$570		$798		$1,453
Class C	Sold		$263		$536		$935		$2,050
Class C	Held		$163		$536		$935		$2,050
Class I	Sold or Held		$61		$225		$402		$916

Portfolio Turnover

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Investments, Risks and Performance

Principal Investment Strategies

The fund seeks to generate current income exempt from federal income taxes by investing in a diversified portfolio with municipal bonds of varying maturities. The management team focuses on higher quality tax-exempt municipal bonds, gauging the value of a security by issue type, credit quality, and bond structure; however, the fund may invest up to 20% of its net assets in below investment grade tax-exempt municipal bonds. Below investment grade tax-exempt municipal bonds are considered high-yield/high-risk fixed income securities (so-called "junk bonds").

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

Principal Risks

The fund may not achieve its objective(s), and it is not intended to be a complete investment program. The value of the fund’s investments that supports your share value may decrease. If between the time you purchase shares and the time you sell shares the value of the fund’s investments decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting the overall economy or specific municipalities in which the fund invests can be worse than expected, and investments may fail to perform as the subadviser expects. As a result, the value of your shares may decrease. Purchase and redemption activities by fund shareholders may impact the management of the fund and its ability to achieve its investment objective(s). The redemption by one or more large shareholders or groups of shareholders of their holdings in the fund could have an adverse impact on the remaining shareholders in the fund including by accelerating the realization of capital gains and increasing the fund's transaction costs. The principal risks of investing in the fund are:

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

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

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

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

Performance Information

The Virtus Tax-Exempt Bond Fund, a series of Virtus Opportunities Trust (“Successor Fund”), is the successor of the Virtus Tax-Exempt Bond Fund, a series of Virtus Insight Trust (“Predecessor Fund”), resulting from a reorganization of the Predecessor Fund with and into the Successor Fund on September 23, 2016. The Predecessor Fund and the

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Successor Fund have identical investment objectives and strategies. The Successor Fund has adopted the past performance of the Predecessor Fund as its own.

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.

[MISSING IMAGE: NRNTIUR9S94V64HSB9D6A8MMBK6N.JPG]

Best Quarter:

Q3/2009:

10.03%

Worst Quarter:

Q3/2008:

-5.64%

Year-to-date (6/30/16):

3.24%

Average Annual Total Returns (for the periods ended 12/31/15)

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		2.64	%		5.21	%		4.78	%			—
Return After Taxes on Distributions		2.62	%		5.20	%		4.72	%			—
Return After Taxes on Distributions and Sale of Fund Shares		2.73	%		4.79	%		4.57	%			—
Class A
Return Before Taxes		-0.43	%		4.34	%		4.23	%			—
Class C
Return Before Taxes		1.62	%		4.15	%			—		3.97	%
Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)		0.55	%		3.25	%		4.52	%		4.90	%
Tax-Exempt Bond Linked Benchmark (reflects no deduction for fees, expenses or taxes)		3.07	%		5.11	%		4.60	%		4.82	%

The Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The Tax-Exempt Bond Linked Benchmark consists of the BofA Merrill Lynch 1-22 Year US Municipal Securities Index, a subset of the BofA Merrill Lynch US Municipal Securities Index including all securities with a remaining term to final maturity less than 22 years, calculated on a total return basis. Performance of the Tax-Exempt Bond Linked Benchmark prior to 6/30/2012 is that of the Barclays U.S. Municipal Bond Index. The indexes are calculated on a total return basis. The indexes are unmanaged and not available for direct investment.

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non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.

Management

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

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

Portfolio Management

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

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

•

$2,500, generally

•

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

•

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

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

•

$100, generally

•

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

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

Taxes

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

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More Information About Fund Expenses

VIA has contractually agreed to limit the total operating expenses (excluding dividend and interest expenses, taxes, brokerage commissions, extraordinary expenses and acquired fund fees and expenses, if any) of certain of the funds so that expenses do not exceed, on an annualized basis, the amounts indicated in the following table.

	Class A Shares			Class C Shares			Class I Shares			Through Date
Virtus Low Duration Income Fund		0.75	%		1.50	%		0.50	%	September 30, 2017
Virtus Tax-Exempt Bond Fund		0.85	%		1.60	%		0.60	%	September 30, 2017

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

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

	Class A Shares			Class C Shares			Class I Shares			Class R6 Shares
Virtus Low Duration Income Fund		0.75	%		1.50	%		0.50	%		N/A
Virtus Tax-Exempt Bond Fund		0.85	%		1.60	%		0.60	%		N/A

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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 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.

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Virtus Emerging Markets Opportunities Fund

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 or equity-linked instruments of issuers located in emerging markets countries. Equity-linked instruments are instruments issued by financial institutions or special purpose entities located in foreign countries to provide the synthetic economic performance of a referenced equity security; these securities are valued at market value for purposes of the fund’s requirement to invest 80% of its assets 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.

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Virtus Low Duration Income 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:

•

Securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies, authorities or instrumentalities;

•

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

•

High-yield/high-risk debt instruments (so-called “junk bonds”), 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).

The fund manages duration utilizing a duration neutral strategy. 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

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security. Under normal circumstances, the fund’s average duration is maintained at a level similar to that of its benchmark, the Barclays U.S. Aggregate Bond Index. As of June 30, 2016, the modified adjusted duration of the Barclays U.S. Aggregate Bond Index was 5.47 years; the modified adjusted duration of the fund was 2.58 years. Typically, for a fund maintaining a modified adjusted duration of 2.58 years, a one percent increase in interest rates would cause a 2.58% decrease in the value of the fund’s fixed income assets. Similarly, a one percent decrease in interest rates typically would cause the value of the fund’s fixed income assets to increase by 2.58%.

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

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Virtus 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.

Debt obligations may be of any maturity. Investment grade debt obligations will normally be rated within the four highest rating categories by the nationally recognized statistical rating organizations at the time of investment. The fund may invest up to 20% of its net assets in below investment grade tax-exempt municipal bonds. The fund may invest in unrated fixed income securities; the subadviser will determine such securities to be of comparable quality to either investment grade or below investment grade pursuant to procedures reviewed and approved by the Board of Trustees. Below investment grade tax-exempt municipal bonds are considered high-yield/high-risk fixed income securities (so-called “junk bonds”).

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.

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More Information About Risks Related to Principal Investment Strategies

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

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

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

Specific risks of investing in each fund are identified in the below table and described in detail following the table.

Risks

Virtus Emerging Markets Opportunities Fund

Virtus Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

Debt Securities

Call

Credit

Interest Rate

Equity Securities

Large Market Capitalization Companies

Small and Medium Market Capitalization Companies

Foreign Investing

Currency Rate

Emerging Market Investing

Equity-Linked Instruments

Geographic Concentration

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

Income

Loans

Market Volatility

Mortgage-Backed and Asset-Backed Securities

Municipal Bond Market

Tax-Exempt Securities

Tax Liability

Debt Securities

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.

•

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.

•

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.

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.

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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.

Equity Securities

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

•

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.

Foreign Investing

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

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

•

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

•

Emerging Market Investing Risk. The risks of foreign investments are generally greater in countries whose markets are still developing than they are in more developed markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Since these markets are often small, they may be more likely to suffer sharp and frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few large investors. They may also have policies that restrict investment by foreigners, or that prevent foreign investors from withdrawing their money at will. Certain emerging markets may also face other significant internal or external risks, including the risk of war and civil unrest. For all of these reasons, investments in emerging markets may be considered speculative. To the extent that a fund invests a significant portion of its assets in a particular emerging market, the fund will be more vulnerable to financial, economic, political and other developments in that country, and conditions that negatively impact that country will have a greater impact on the fund as compared with a fund that does not have its holdings concentrated in a particular country.

•

Equity-Linked Instruments Risk. 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

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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 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.

Geographic Concentration

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

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

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

Income

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

Loans

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

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

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Market Volatility

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

Mortgage-Backed and Asset-Backed Securities

Mortgage-backed securities represent interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders. Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card 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 a fund receiving less income than originally anticipated. The variability in prepayments will tend to limit price gains when interest rates drop and exaggerate price declines when interest rates rise. In the event of high prepayments, a fund may be required to invest proceeds at lower interest rates, causing the fund to earn less than if the prepayments had not occurred. Conversely, rising interest rates may cause prepayments to occur at a slower than expected rate, which may effectively change a security that was considered short- or intermediate-term into a long-term security. Long-term securities tend to fluctuate in value more widely in response to changes in interest rates than shorter-term securities.

Municipal Bond Market

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.

Tax-Exempt Securities

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

Tax Liability

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

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Management of the Funds

The Adviser

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, 2015, VIA had approximately $29 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.

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
		Virtus Low Duration Income Fund				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 Tax-Exempt Bond Fund

0.45 %

						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 %

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						0.95 %
		Virtus Low Duration Income Fund						0.55 %
		Virtus Tax-Exempt Bond Fund						0.45 %

The Subadvisers

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, 2015, Newfleet had approximately $11.5 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, 2015, Vontobel had approximately $48 billion in assets under management.

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 Low Duration Income Fund				50% of net investment management fee
		Virtus Tax-Exempt Bond Fund				50% of net investment management fee

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, 2015 through December 31, 2015.

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Portfolio Management

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

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 Lisa H. Leonard (both since June 2012)

David L. Albrycht, CFA. Mr. Albrycht is President and Chief Investment Officer at Newfleet. Prior to joining Newfleet in 2011, he was Executive Managing Director (2008 to 2011) and Vice President (2005 to 2008), Fixed Income, of Goodwin Capital Advisers, Inc. (“Goodwin”). Previously, he was associated with VIA, which at the time was an affiliate of Goodwin. He managed fixed income portfolios for Goodwin affiliates since 1991. Mr. Albrycht also manages several fixed income and variable investment options as well as two closed-end funds.

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, Virtus Bond Fund and Virtus Strategic Allocation Series. He has more than 26 years of investment experience in all bond market sectors, including both publicly traded and private placements.

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 also manges a closed-end fund managed by an affiliate of Newfleet and VIA.

Vontobel

Virtus Emerging Markets Opportunities Fund

Brian Bandsma (since June 2016)

Matthew Benkendorf (since March 2016)

Jin Zhang, CFA (since June 2016)

Brian Bandsma. Mr. Bandsma is a Director and Portfolio Manager (since June 2016) of Vontobel. He serves as Deputy Portfolio Manager of the Emerging Markets Opportunities Fund (since June 2016). He also serves as lead portfolio manager of the Vontobel Far East Equity Strategy (since June 2016), and previously served as deputy portfolio manager of that strategy (2013 to June 2016). Mr. Bandsma joined Vontobel in 2002 as a senior research analyst and continues to maintain his research responsibilities, with a focus on the information technology, financial, telecom services and consumer discretionary sectors. He began his financial career in 1998.

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Matthew Benkendorf. Mr. Benkendorf is Chief Investment Officer of Vontobel. He serves as Lead Portfolio Manager of the EM Opportunities Fund (since March 2016), the Foreign Opportunities Fund (since March 2016) and the Global Opportunities Fund (since March 2016) and previously served as Deputy Portfolio Manager (January 2015 to March 2016) and Co-Portfolio Manager (2009 through 2014) of the Global Opportunities Fund. Previously at Vontobel he served as a Managing Director (April 2013 to March 2016); Executive Director (April 2012 to April 2013); Director (July 2009 to April 2012); Vice President (2007 to 2009); Assistant Vice President (2005 to 2007); and Senior Research Analyst (2002 to 2005). Mr. Benkendorf joined Vontobel in 1999 as a Portfolio Administrator.

Jin Zhang, CFA. Mr. Zhang is a Director and Portfolio Manager (since June 2016) of Vontobel. He serves as Deputy Portfolio Manager of the Emerging Markets Opportunities Fund (since June 2016). Mr. Zhang also serves as deputy portfolio manager of the Vontobel Emerging Markets Equity Strategy (since June 2016). Mr. Zhang joined Vontobel in 2005 as a senior research analyst and continues to maintain his research responsibilities, with a focus on the consumer staples and financial sectors. He began his financial career in 1995.

Please refer to the SAI for additional information about the funds' portfolio managers, including the structure of and method of computing compensation, other accounts they manage and their ownership of shares of the funds.

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Risks Associated with Additional Investment Techniques and Fund Operations

In addition to the Principal Investment Strategies and Risks Related to Principal Investment Strategies, each of the funds listed in the chart below may engage in additional investment techniques that present additional risks to a fund. 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, as well as certain operational 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 Low Duration Income Fund

Virtus Tax-Exempt Bond Fund

Convertible Securities

Counterparty

Cybersecurity

Debt Securities

Call

Credit

Interest Rate

Derivatives

Equity Securities

Illiquid and Restricted Securities

Leverage

Mutual Fund Investing

Operational

Repurchase Agreements

Securities Lending

Short-Term Investments

Unrated Fixed Income Securities

When-Issued and Delayed Delivery Securities

Zero Coupon, Step Coupon, Deferred Coupon and PIK Bonds

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

When a fund engages in investment techniques in which it relies on another party to consummate the transaction, the fund is subject to the risk of default by the other party. To the extent that a fund enters into multiple transactions with a single or limited number of counterparties, the fund will be subject to increased levels of counterparty risk.

Cybersecurity

With the increased use of technologies such as the Internet to conduct business, the funds have become potentially more susceptible to operational and information security risks through breaches in cybersecurity. In general, a breach in cybersecurity can result from either a deliberate attack or an unintentional event. Cybersecurity breaches may involve, among other things, infection by computer viruses or other malicious software code or unauthorized access to the digital information systems, networks or devices of the funds or their service providers (including, but not limited to, the funds’ investment adviser, transfer agent, custodian, administrators and other financial intermediaries) through “hacking” or other means, in each case for the purpose of misappropriating assets or sensitive information (including,

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for example, personal shareholder information), corrupting data or causing operational disruption or failures in the physical infrastructure or operating systems that support the funds. Any such cybersecurity breaches or losses of service may cause the funds to lose proprietary information, suffer data corruption or lose operational capacity, which, in turn, could cause the funds to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures, and/or financial loss. While the funds and their service providers have established business continuity plans and risk management systems designed to prevent or reduce the impact of cybersecurity attacks, there are inherent limitations in such plans and systems due in part to the ever-changing nature of technology and cybersecurity attack tactics, and there is a possibility that certain risks have not been adequately identified or prepared for. Cybersecurity risks may also impact issuers of securities in which the funds invest, which may cause the funds’ investments in such issuers to lose value.

Debt Securities

•

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, volatility, dividend payments and currencies.

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

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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.

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

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

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

Equity Securities

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.

Mutual Fund Investing

Through its investments in other mutual funds, a fund is exposed not only to the risks of the underlying funds’ investments but also to certain additional risks. Assets invested in other mutual funds incur a layering of expenses, including operating costs, advisory fees and administrative fees that you, as a shareholder in the fund, indirectly bear. Such fees and expenses may exceed the fees and expenses the fund would have incurred if it invested in the underlying fund’s assets directly. To the extent that the expense ratio of an underlying fund changes, the weighted average operating expenses borne by the fund may increase or decrease. An underlying fund may change its

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investment objective or policies without the approval of the fund, and the fund might be forced to withdraw its investment from the underlying fund at a time that is unfavorable to the fund. If a fund invests in closed-end funds, it may incur added expenses such as additional management fees and trading costs and additional risks associated with trading at a discount to NAV and use of leverage.

Operational

An investment in a fund, like any mutual fund, can involve operational risks arising from factors such as processing errors, human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel and errors caused by third-party service providers. The occurrence of any of these failures, errors or breaches could result in a loss of information, regulatory scrutiny, reputational damage or other events, any of which could have a material adverse effect on a fund. While the funds seek to minimize such events through controls and oversight, there may still be failures that could cause losses to a fund.

Repurchase Agreements

A fund may invest in repurchase agreements with commercial banks, brokers and dealers considered by the fund’s subadviser to be creditworthy. Such agreements subject the fund to the risk of default or insolvency of the counterparty.

Securities Lending

A fund may loan portfolio securities with a value up to one-third of its total 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 lending fund.

Short-Term Investments

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

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 of such a security on its settlement date is less than the price paid by the fund, the value of the fund's 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.

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Pricing of Fund Shares

How is the Share Price determined?

Each fund calculates a share price for each class of its shares. The share price (net asset value or “NAV”) for each class is based on the net assets of the fund and the number of outstanding shares of that class. In general, each fund calculates a share price for each class by:

•

adding the values of all securities and other assets of the fund;

•

subtracting liabilities; and

•

dividing the result by the total number of outstanding shares of that class.

Assets: Equity securities are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded, or, if no closing price is available, at the last bid price. Shares of other investment companies are valued at such companies’ NAVs. Debt 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. Other assets, such as accrued interest, accrued dividends and cash are also included in determining a fund’s NAV. As required, some securities and assets are valued at fair value as determined in good faith by, or under the direction of, the Board of Trustees.

Liabilities: Accrued liabilities for class-specific expenses (if any), distribution fees, service fees and other liabilities are deducted from the assets of each class. Accrued expenses and liabilities that are not class-specific (such as management fees) are allocated to each class in proportion to each class’s net assets except where an alternative allocation can be more appropriately made.

Net Asset Value (NAV): The liabilities allocated to a class are deducted from the proportionate interest of such class in the assets of the applicable fund. The resulting amount for each class is then divided by the number of shares outstanding of that class to produce each class’s NAV per share.

The NAV per share of each class of each fund is determined as of the close of regular trading (normally 4:00 PM eastern time) on days when the New York Stock Exchange (“NYSE”) is open for trading. A fund will not calculate its NAV per share class on days when the NYSE is closed for trading. If a fund (or underlying fund, as applicable) holds securities that are traded on foreign exchanges that trade on weekends or other holidays when the funds do not price their shares, the NAV of the fund’s shares may change on days when shareholders will not be able to purchase or redeem the fund’s shares.

How are securities fair valued?

If market quotations are not readily available or available prices are not reliable, the funds (or underlying fund, as applicable) determine a “fair value” for an investment according to policies and procedures approved by the Board of Trustees. The types of assets for which such pricing might be required include: (i) securities whose trading has been suspended; (ii) securities where the trading market is unusually thin or trades have been infrequent; (iii) debt 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; (viii) securities where the market quotations are not readily available as a result of “significant” events; and (ix) securities whose principal exchange or trading market is closed for an entire business day on which a fund needs to determine its NAV. This list is not inclusive of all situations that may require a security to be fair valued, nor is it intended to be conclusive in determining whether a specific event requires fair valuation.

The value of any portfolio security held by a fund for which market quotations are not readily available shall be determined in good faith and in a manner that assesses the security’s “fair value” on the valuation date (i.e., the amount that the fund might reasonably expect to receive for the security upon its current sale), based on a consideration of all available facts and all available information, including, but not limited to, the following: (i) the fundamental analytical data relating to the investment; (ii) the value of other relevant financial instruments, including derivative securities, traded on other markets or among dealers; (iii) an evaluation of the forces which influence the market in which these

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securities are purchased and sold ( e.g. , the existence of merger proposals or tender offers that might affect the value of the security); (iv) the type of the security; (v) the size of the holding; (vi) the initial cost of the security; (vii) trading volumes on markets, exchanges or among broker-dealers; (viii) price quotes from dealers and/or pricing services; (ix) values of baskets of securities traded on other markets, exchanges, or among dealers; (x) changes in interest rates; (xi) information obtained from the issuer, analysts, other financial institutions and/or the appropriate stock exchange (for exchange traded securities); (xii) an analysis of the company’s financial statements; (xiii) government (domestic or foreign) actions or pronouncements (xiv) recent news about the security or issuer; (xv) whether two or more dealers with whom the adviser/subadviser regularly effects trades are willing to purchase or sell the security at comparable prices; and (xvi) other news events or relevant matters.

Certain 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?

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; investments received by the funds’ authorized agent in good order after the close of regular trading on the NYSE will be executed based on the next business day’s NAV. Shares credited to your account from the reinvestment of a fund’s distributions will be in full and fractional shares that are purchased at the closing NAV on the next business day on which the fund’s NAV is calculated following the dividend record date.

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Sales Charges

What are the classes and how do they differ?

Currently, each fund offers multiple classes of shares. Each class of shares 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 (Rule 12b-1 Fees), that authorize the funds to pay distribution and service fees for the sale of their shares and for services provided to shareholders.

The Rule 12b-1 fees for each class of each fund are as follows:

Fund

Class A

Class C

Class I

Class R6

Virtus Emerging Markets Opportunities Fund

0.25 %

1.00 %

None

Virtus Low Duration Income Fund

0.25 %

1.00 %

None

N/A

Virtus Tax-Exempt Bond Fund

0.25 %

1.00 %

None

N/A

What arrangement is best for you?

The different classes of shares permit you to choose the method of purchasing shares that is most beneficial to you. In choosing a class of shares, consider the amount of your investment, the length of time you expect to hold the shares, whether you decide to receive distributions in cash or to reinvest them in additional shares, and any other personal circumstances. Depending upon these considerations, the accumulated distribution and service fees and contingent deferred sales charges of one class of shares may be more or less than the initial sales charge and accumulated distribution and service fees of another class of shares bought at the same time. Because distribution and service fees are paid out of a fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

Your financial representative should recommend only those arrangements that are suitable for you based on known information. In certain instances, you may be entitled to a reduction or waiver of sales charges. For instance, you may be entitled to a sales charge discount on Class A Shares if you purchase more than certain 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 or domestic partner, children and minor grandchildren. Your financial representative may request that you 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 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). 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 of a finder's fee being 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, and shares not subject to a finder's fee will be deemed to be redeemed first. Class A Shares have lower distribution and service fees (0.25%) and as a result pay higher dividends than Class C Shares.

Class C Shares. 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 fund, so the higher distribution and services fees paid by Class C Shares continue for the life of the account.

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Class I Shares. Class I Shares are offered primarily to clients of financial intermediaries that (i) charge such clients an ongoing fee for advisory, investment, consulting, or similar services; or (ii) have entered into an agreement with the fund's distributor to offer Class I Shares through a no-load network or platform. Such clients may include pension and profit sharing plans, other employee benefit trusts, endowments, foundations and corporations. Class I Shares are also offered to private and institutional clients of, or referred by, the adviser, a subadviser or their affiliates, and to Trustees of the funds and trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus and its affiliates. If you are eligible to purchase and do purchase Class I Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class I Shares.

Class R6 Shares (Virtus Emerging Markets Opportunities Fund only) Class R6 Shares are available only to employer sponsored retirement plans, including profit-sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans, and plans described in Section 401(k), 403(b) and 457 of the Internal Revenue Code, where the employer, administrator, sponsor or related person has entered into an agreement with the fund’s Transfer Agent to make Class R6 Shares available to plan participants where plan level or omnibus accounts are held on the books of the fund. Class R6 Shares are not available to traditional or Roth IRAs, Coverdell Savings Accounts, Keoghs, SEPs, SARSEPs, or Simple IRAs and are not available through retail, advisory fee-based wrap platforms. Individual shareholders who purchase Class R6 Shares through retirement platforms or other intermediaries are not eligible to hold Class R6 Shares outside of their respective plan or intermediary platform. If you are eligible to purchase and do purchase Class R6 Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class R6 Shares.

Initial Sales Charge Alternative—Class A Shares. The public offering price of Class A Shares 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 fund's underwriter, VP Distributors, LLC (“VP Distributors” or the “Distributor”).

Sales Charge you may pay to purchase Class A Shares

Virtus Emerging Markets Opportunities 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 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		1.00
$1,000,000 or more		None		None

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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
$100,000 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.

Combination Purchase Privilege. Your purchase of any class of shares of these funds or any other Virtus Mutual 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 either: (a) any individual, his or her spouse or domestic partner, children and minor grandchildren purchasing shares for his, her or their own account (including an IRA account) including his, her or their own sole proprietorship or trust where any of the above is a named beneficiary; (b) a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary account (even though more than one beneficiary may exist); (c) multiple accounts (up to 200) under a qualified employee benefit plan or administered by a third party administrator; or (d) trust companies, bank trust departments, registered investment advisers, and similar entities placing orders or providing administrative services with respect to accounts over which they exercise discretionary investment authority and which are held in a fiduciary, agency, custodial or similar capacity, provided all shares are held of record in the name, or nominee name, of the entity placing the order.

Letter of Intent. If you sign a Letter of Intent, your purchase of any class of shares of these funds or any other Virtus Mutual Fund, 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 arrangement between you and Virtus Mutual Funds. 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 if made over time by the same person, may be added together at the time of each purchase to determine whether the combined sum entitles you to a prospective reduction in sales charges. You must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.

Gifting of Shares. If you make a gift of shares of a Virtus Mutual Fund, upon your request you may combine purchases, if made at the same time, of any class of shares of these funds or any other Virtus Mutual Fund at the sales charge discount allowed for the combined purchase. The receiver of the gift may also be entitled to a prospective reduction in sales charges in accordance with the funds’ right of accumulation or other provisions. You or the receiver of the gift must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.

Purchase by Associations. Certain groups or associations may be treated as a “person” and qualify for reduced Class A Share sales charges. The group or association must: (1) have been in existence for at least six months; (2) have a legitimate purpose other than to purchase mutual fund shares at a reduced sales charge; (3) work through an investment dealer; and (4) not be a group whose sole reason for existing is to consist of members who are credit card holders of a particular company, policyholders of an insurance company, customers of a bank or a broker-dealer or clients of an investment adviser.

Account Reinstatement Privilege. Subject to the funds’ policies and procedures regarding market timing, for 180 days after you sell your Class A Shares on which you previously paid a sales charge, you may purchase Class A Shares of any Virtus Mutual Fund at NAV, with no sales charge, by reinvesting all or part of your proceeds, but not more.

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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, a subadviser or the Distributor and corporate affiliates of the adviser, a subadviser or the Distributor; private clients of an adviser or subadviser 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.

Contingent Deferred Sales Charge you may pay on Class A Shares

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 Virtus fixed income funds and Virtus Sector Trend Fund, 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, and shares not subject to a finder’s fee will be deemed to be redeemed first. The CDSC will be multiplied by the then current market value or the initial cost of the shares being redeemed, whichever is less.

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.

Deferred Sales Charge you may pay to sell Class C Shares

Year			1						2+
CDSC					1 %						0 %

Compensation to Dealers

Class A, Class C and Class I Shares Only

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

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 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		1.00
$1,000,000 or more		None		None		None

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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 sold by such dealers. Your broker, dealer or financial advisor may also charge you additional commissions or fees for their services in selling shares to you provided they notify the Distributor of their intention to do so.

Dealers and other entities that enter into special arrangements with the Distributor or the funds’ transfer agent, Virtus Fund Services, LLC (the “Transfer Agent”), may receive compensation for the sale and promotion of shares of these funds. Such fees are in addition to the sales commissions referenced above and may be based upon the amount of sales of fund shares by a dealer; the provision of assistance in marketing of fund shares; access to sales personnel and information dissemination services; and other criteria as established by the Distributor. Depending on the nature of the services, these fees may be paid either from the funds through distribution fees, service fees or, in some cases, the Distributor may pay certain fees from its own profits and resources.

Dealers and other entities that enter into special arrangements with the Distributor or the Transfer Agent may receive compensation from or on behalf of the funds for providing certain recordkeeping and related services to the funds or their shareholders. These fees may also be referred to as shareholder accounting fees, administrative services fees, sub-transfer agent fees or networking fees. They are not for the sale, promotion or marketing of fund shares.

From its own profits and resources, the Distributor may, from time to time, make payments to qualified wholesalers, registered financial institutions and third party marketers for marketing support services and/or retention of assets. These payments are sometimes referred to as “revenue sharing.” Among others, the Distributor has agreed to make such payments for marketing support services to AXA Advisors, LLC. Additionally, for Virtus fixed income funds and Virtus Sector Trend Fund, the Distributor may pay broker-dealers a finder’s fee in an amount equal to 0.50% of eligible Class A Share purchases from $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 of Class A Shares by an account in the name of a qualified employee benefit plan are eligible for a finder’s fee only if such plan has at least 100 eligible employees. A CDSC may be imposed on certain redemptions of such Class A investments within 18 months of purchase. For all Virtus fixed income funds and Virtus Sector Trend Fund, 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 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.

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The Distributor has also agreed to pay fees to certain distributors for preferred marketing opportunities. These arrangements may be viewed as creating a conflict of interest between these distributors and investors. Investors should make due inquiry of their selling agents to ensure that they are receiving the requisite point of sale disclosures and suitable recommendations free of any influence by reason of these arrangements.

The categories of payments the Distributor and/or the Transfer Agent may make to other parties are not mutually exclusive, and such parties may receive payments under more than one or all categories. These payments could be significant to a party receiving them, creating a conflict of interest for such party in making investment recommendations to investors. Investors should make due inquiry of any party recommending the funds for purchase to ensure that such investors are receiving the requisite point of sale disclosures and suitable recommendations free of any influence by reason of these arrangements.

A document containing information about sales charges, including breakpoint (volume) discounts, is available free of charge on the Internet at virtus.com . In the Individual Investors section, go to the tab “Investors Knowledge Base” and click on the link for Breakpoint (Volume) Discounts.

Class R6 Shares Only

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Your Account

Opening an Account

Class A, Class C and Class I Shares Only

Your financial advisor can assist you with your initial purchase as well as all phases of your investment program. If you are opening an account by yourself, please follow the instructions outlined below.

The funds have established the following preferred methods of payment for fund shares:

•

Checks drawn on an account in the name of the investor and made payable to Virtus Mutual Funds;

•

Checks drawn on an account in the name of the investor’s company or employer and made payable to Virtus Mutual Funds; or

•

Wire transfers or Automated Clearing House (ACH) transfers from an account in the name of the investor, or the investor’s company or employer.

Payment in other forms may be accepted at the discretion of the funds; however, the funds generally do not accept such other forms of payment as cash equivalents (such as traveler’s checks, cashier’s checks, money orders or bank drafts), starter checks, credit card convenience checks, or certain third party checks. Please specify the name(s) of the fund or funds in which you would like to invest on the check or transfer instructions.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. Accordingly, when you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may check the information you provide against publicly available databases, information obtained from consumer reporting agencies, other financial institutions or other sources. If, after reasonable effort, we cannot verify your identity, we reserve the right to close the account and redeem the shares at the NAV next calculated after the decision is made by us to close the account.

Step 1.

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

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

•

$100 for individual retirement accounts ("IRAs"), accounts that use the systematic exchange privilege or accounts that use the Systematic Purchase program. (See Investor Services and Other Information for additional detail.)

•

There is no initial dollar requirement for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans. There is also no minimum for reinvesting dividends and capital gains into another account.

•

$2,500 for all other accounts.

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

•

$100 for any account.

•

There is no minimum additional investment requirement for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans. There is also no minimum additional investment requirement for reinvesting dividends and capital gains into another account.

Minimum initial investments applicable to Class I Shares:

•

$100,000 for any account for qualified investors. (Call Virtus Fund Services at 800-243-1574 for additional detail.)

There is no minimum additional investment requirement applicable to Class I Shares.

Step 2.

Your second choice will be what class of shares to buy. Each share class, except Class I Shares and Class R6 Shares, has different sales and distribution charges. Because all future investments in your account will be made in the share class you choose when you open your account, you should make your decision carefully. Your financial advisor can help you pick the share class that makes the most sense for your situation.

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Step 3.

Your next choice will be how you want to receive any dividends and capital gain distributions. Your options are:

•

Receive both dividends and capital gain distributions in additional shares;

•

Receive dividends in additional shares and capital gain distributions in cash;

•

Receive dividends in cash and capital gain distributions in additional shares; or

•

Receive both dividends and capital gain distributions in cash.

No interest will be paid on uncashed distribution checks.

Class R6 Shares Only

If you are participating in an employer sponsored retirement plan, such as a 401(k) plan, profit-sharing plan, defined benefit plan or other employer-directed plan, your company will provide you with the information you need to open an account and buy Class R6 Shares.

All Share Classes

The funds reserve the right to refuse any purchase order for any reason. The fund will notify the investor of any such rejection in accordance with industry and regulatory standards, which is generally within three business days.

How to Buy Shares

Class A, Class C and Class I Shares Only

						To Open An Account
		Through a financial advisor				Contact your advisor. Some advisors may charge a fee and may set different minimum investments or limitations on buying shares.
		Through the mail				Complete a new account application and send it with a check payable to the fund. Mail them to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.
		Through express delivery				Complete a new account application and send it with a check payable to the fund. Send them to: Virtus Mutual Funds, 4400 Computer Drive, Westborough, MA 01581-1722.
		By Federal Funds wire				Call us at 800-243-1574 (press 1, then 0).
		By Systematic Purchase				Complete the appropriate section on the application and send it with your initial investment payable to the fund. Mail them to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.
		By telephone exchange				Call us at 800-243-1574 (press 1, then 0).

Class R6 Shares Only

All Share Classes

The price at which a purchase is effected is based on the NAV next determined after receipt of a purchase order in good order by the funds’ Transfer Agent or an authorized agent. A purchase order is generally in “good order” if an acceptable form of payment accompanies the purchase order and the order includes the appropriate application(s) and/or other form(s) and any supporting legal documentation required by the fund's Transfer Agent or an authorized agent, each in legible form.

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

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How to Sell Shares

Class A, Class C and Class I Shares Only

						To Sell Shares
		Through a financial advisor				Contact your advisor. Some advisors may charge a fee and may set different minimums on redemptions of accounts.
		Through the mail				Send a letter of instruction to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. Be sure to include the registered owner’s name, fund and account number and number of shares or dollar value you wish to sell.
		Through express delivery				Send a letter of instruction to: Virtus Mutual Funds, 4400 Computer Drive, Westborough, MA 01581-1722. Be sure to include the registered owner’s name, fund and account number and number of shares or dollar value you wish to sell.
		By telephone				For sales up to $50,000, requests can be made by calling 800-243-1574.
		By telephone exchange				Call us at 800-243-1574 (press 1, then 0).
		By check (certain 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. Please call us at 800-243-1743 for a listing of funds offering this feature.

Class R6 Shares Only

All Share Classes

You have the right to have the funds buy back shares at the NAV next determined after receipt of a redemption request in good order by the funds' Transfer Agent or an authorized agent. In the case of a Class C Share redemption and certain Class A Share redemptions, you will be subject to the applicable contingent deferred sales charge, if any, for such shares. Subject to certain restrictions, shares may be redeemed by telephone or in writing. In addition, shares may be sold through securities dealers, brokers or agents who may charge customary commissions or fees for their services. The funds do not charge any redemption fees. 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.

Things You Should Know When Selling Shares

You may realize a taxable gain or loss (for federal income tax purposes) if you redeem or exchange shares of the funds.

Class A Shares, Class C Shares and Class I Shares

Redemption requests will not be honored until all required documents, in proper form, have been received. Additional documentation will be required for redemptions by organizations, fiduciaries, or retirement plans, or if a redemption is requested by anyone but the shareholder(s) of record. To avoid delay in redemption or transfer, shareholders having questions about specific requirements should contact the funds’ Transfer Agent at 800-243-1574.

Transfers between broker-dealer “street” accounts are governed by the accepting broker-dealer. Questions regarding this type of transfer should be directed to your financial advisor.

As stated in the applicable account applications, accounts associated with certain types of retirement plans and individual retirement accounts may incur fees payable to the Transfer Agent in the event of redeeming an account in full. Shareholders with questions about this should contact the funds’ Transfer Agent at 800-243-1574.

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Redemptions by Mail

➔ If you are selling shares held individually, jointly, or as custodian under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act:

Send a clear letter of instruction if both of these apply:

•

The proceeds do not exceed $50,000.

•

The proceeds are payable to the registered owner at the address on record.

Send a clear letter of instructions with a signature guarantee when any of these apply:

•

You are selling more than $50,000 worth of shares.

•

The name or address on the account has changed within the last 30 days.

•

You want the proceeds to go to a different name or address than on the account.

➔ If you are selling shares held in a corporate or fiduciary account, please contact the funds’ Transfer Agent at 800-243-1574.

The signature guarantee, if required, must be a STAMP 2000 Medallion guarantee made by an eligible guarantor institution as defined by the funds’ Transfer Agent in accordance with its signature guarantee procedures. Guarantees using previous technology medallions will not be accepted. As of the date of this prospectus, the Transfer Agent’s signature guarantee procedures generally permit guarantees by banks, broker-dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations.

Selling Shares by Telephone

The Transfer Agent will use reasonable procedures to confirm that telephone instructions are genuine. Address and bank account information are verified, redemption instructions are taped, and all redemptions are confirmed in writing.

The individual investor bears the risk from instructions given by an unauthorized third party that the Transfer Agent reasonably believed to be genuine.

The Transfer Agent may modify or terminate the telephone redemption privilege at any time with 60 days’ notice to shareholders, except for instances of disruptive trading or market timing; in such cases, the telephone redemption privilege may be suspended immediately, followed by written notice. (See “Disruptive Trading and Market Timing” in this prospectus.)

During times of drastic economic or market changes, telephone redemptions may be difficult to make or temporarily suspended; however, shareholders would be able to make redemptions through other methods described above.

Class R6 Shares Only

All Share Classes

Payment of Redemptions In Kind

Each fund reserves the right to pay large redemptions “in kind” (i.e., in securities owned by the fund) rather than in cash. Large redemptions are those that exceed $250,000 or 1% of the fund’s net assets, whichever is less, over any 90-day period. Additional documentation will be required for redemptions by organizations, fiduciaries, or retirement plans, or if a redemption is requested by anyone but the shareholder(s) of record. Investors who are paid redemption proceeds in kind will receive a pro rata share of the fund’s portfolio, which may include illiquid securities. Any securities received remain at market risk until sold. Brokerage commissions and capital gains may be incurred when converting securities received into cash. On any illiquid securities received, the investor will bear the risk of not being able to sell the securities at all.

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Account Policies

Account Reinstatement Privilege

Subject to the fund’s policies and procedures regarding market timing, for 180 days after you sell your Class A Shares on which you previously paid a sales charge, you may purchase Class A Shares of the fund or of any Virtus Mutual Fund at NAV, with no sales charge, by reinvesting all or part of your proceeds, but not more. Send your written request to Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074. You can call Virtus Mutual Funds at 800-243-1574 for more information.

Please remember, a redemption and reinvestment are considered to be a sale and purchase for tax-reporting purposes.

Annual Fee on Small Accounts

To help offset the costs associated with maintaining small accounts, the funds reserve the right to assess an annual $25 small account fee on fund accounts with a balance below $2,500. The small account fee may be waived in certain circumstances, such as for accounts that have elected electronic delivery of statements/regulatory documents and accounts owned by shareholders having multiple accounts with a combined value of over $25,000. The small account fee does not apply to accounts held through a financial intermediary.

The small account fee will be collected through the automatic sale of shares in your account. We will send you written notice before we charge the $25 fee so that you may increase your account balance above the minimum, sign up for electronic delivery, consolidate your accounts or liquidate your account. You may take these actions at any time by contacting your investment professional or the Transfer Agent.

Redemption of Small Accounts

Due to the high cost of maintaining small accounts, if your redemption activity causes your account balance to fall below $200, you may receive a notice requesting you to bring the balance up to $200 within 60 days. If you do not, the shares in the account will be sold at NAV, and a check will be mailed to the address of record. Any applicable sales charges will be deducted.

Distributions of Small Amounts

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

Uncashed Checks

If any correspondence sent by a fund is returned by the postal or other delivery service as “undeliverable,” your dividends or any other distribution may be automatically reinvested in the fund.

If your distribution check is not cashed within six months, the distribution may be reinvested in the fund at the current NAV. You will not receive any interest on uncashed distribution or redemption checks. This provision may not apply to certain retirement or qualified accounts.

Inactive Accounts

As required by the laws of certain states, if no activity occurs in an account within the time period specified by your state law, Virtus may be required to transfer the assets to your state under the state's abandoned property law.

Exchange Privileges

You should read the prospectus of the Virtus Mutual Fund(s) into which you want to make an exchange before deciding to make an exchange. You can obtain a prospectus from your financial advisor; by calling 800-243-4361; or on the Internet at virtus.com .

•

You 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.

•

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).

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•

The exchange of shares of one fund for shares of a different fund is treated as a sale of the original fund's shares and any gain on the transaction may be subject to federal income tax.

•

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, Distributor or 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 disruptive trading (“Disruptive Trading”) which can have risks and harmful effects for other shareholders. These risks and harmful effects include:

•

dilution of the interests of long-term investors, if market timers or others exchange into a fund at prices that are below the true value or exchange out of a fund at prices that are higher than the true value;

•

an adverse effect on portfolio management, as determined by the adviser or subadviser in its sole discretion, such as causing a fund to maintain a higher level of cash than would otherwise be the case, or causing a fund to liquidate investments prematurely; and

•

reducing returns to long-term shareholders through increased brokerage and administrative expenses.

Additionally, the nature of the portfolio holdings of certain funds (or the underlying funds as applicable), may expose those funds to investors who engage in the type of market timing trading that seeks to take advantage of possible delays between the change in the value of a mutual fund’s portfolio holdings and the reflection of the change in the NAV of the fund’s shares, sometimes referred to as “time-zone arbitrage.” Arbitrage market timers seek to exploit possible delays between the change in the value of a mutual fund’s portfolio holdings and the NAV of the fund’s shares in funds that hold significant investments in foreign securities because certain foreign markets close several hours ahead of the U.S. markets. If an arbitrageur is successful, the value of the fund’s shares may be diluted if redeeming shareholders receive proceeds (and buying shareholders receive shares) based upon NAVs which do not reflect appropriate fair value prices.

In order to attempt to protect our shareholders from the potential harmful effects of Disruptive Trading, the funds’ Board of Trustees has adopted market timing policies and procedures designed to discourage Disruptive Trading. The Board of Trustees has adopted these policies and procedures as a preventive measure to protect all shareholders from the potential effects of Disruptive Trading, while also abiding by any rights that shareholders may have to make exchanges and provide reasonable and convenient methods of making exchanges that do not have the potential to harm other shareholders.

Excessive trading activity is measured by the number of roundtrip transactions in an account. A roundtrip transaction is one where a shareholder buys and then sells, or sells and then buys, shares of any fund within 30 days. Shareholders of the funds are limited to one roundtrip transaction within any rolling 30-day period. Roundtrip transactions are counted at the shareholder level. In considering a shareholder’s trading activity, the funds may consider, among other factors, the shareholder’s trading history both directly and, if known, through financial intermediaries, in the funds, in other funds within the Virtus Mutual Fund complex, in non-Virtus funds or in accounts under common control or ownership. We do not include exchanges made pursuant to the dollar cost averaging or other similar programs when applying our market timing policies. Systematic withdrawal and/or contribution programs, mandatory retirement distributions, and

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transactions initiated by a plan sponsor also will not count towards the roundtrip limits. The funds may permit exchanges that management believes, in the exercise of their judgment, are not disruptive. The size of the fund and the size of the requested transaction may be considered when determining whether or not the transaction would be disruptive.

Shareholders holding shares for at least 30 days following investment will ordinarily be in compliance with the funds’ policies regarding excessive trading activity. The funds may, however, take action if activity is deemed disruptive even if shares are held longer than 30 days, such as a request for a transaction of an unusually large size. The size of the fund and the size of the requested transaction may be considered when determining whether or not the transaction would be disruptive.

Under our market timing policies, we may modify your exchange privileges for some or all of the funds by not accepting an exchange request from you or from any person, asset allocation service, and/or market timing service made on your behalf. We may also limit the amount that may be exchanged into or out of any fund at any one time, or may revoke your right to make Internet, telephone or facsimile exchanges. We may reinstate Internet, telephone and facsimile exchange privileges after they are revoked, but we will not reinstate these privileges if we have reason to believe that they might be used thereafter for Disruptive Trading.

The funds currently do not charge exchange or redemption fees, or any other administrative charges on fund exchanges. The funds reserve the right to impose such fees and/or charges in the future.

Orders for the purchase of fund shares are subject to acceptance by the relevant fund. We reserve the right to reject, without prior notice, any exchange request into any fund if the purchase of shares in the corresponding fund is not accepted for any reason.

The funds do not have any arrangements with any person, organization or entity to permit frequent purchases and redemptions of fund shares.

We may, without prior notice, take whatever action we deem appropriate to comply with or take advantage of any state or federal regulatory requirement. The funds reserve the right to reject any purchase or exchange transaction at any time. If we reject a purchase or exchange for any reason, we will notify you of our decision in writing.

The funds cannot guarantee that their policies and procedures regarding market timing will be effective in detecting and deterring all Disruptive Trading.

Retirement Plans

Shares of the funds may be used as investments under the following retirement plans: traditional IRA, rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k) plans, profit-sharing, money purchase plans, and certain 403(b) plans. For more information, call 800-243-4361 .

Investor Services and Other Information

Systematic Purchase is a systematic investment plan that allows you to have a specified amount automatically deducted from your checking or savings account and then deposited into your mutual fund account. (Complete the “Systematic Purchase” section on the application and include a voided check.)

Systematic Exchange allows you to automatically move money from one Virtus Mutual Fund to another on a monthly, quarterly, semiannual or annual basis. Shares of one Virtus Mutual Fund will be exchanged for shares of the same class of another Virtus Mutual Fund at the interval you select. (Complete the “Systematic Exchange” section on the application.) Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended.

Telephone Exchange lets you exchange shares of one Virtus Mutual Fund for the same class of shares in another Virtus Mutual Fund, using our customer service telephone number (800-243-1574). (See the “Telephone Exchange” section on the application.) Exchange privileges may not be available for all Virtus Mutual Funds and may be rejected or suspended.

Systematic Withdrawal allows you to periodically redeem a portion of your account on a predetermined monthly, quarterly, semiannual, or annual basis. Sufficient shares from your account will be redeemed at the closing NAV on the applicable payment date, with proceeds to be mailed to you or sent through ACH to your bank (at your selection). For payments to be mailed, shares will be redeemed on the 15 th of the month so that the payment is made about the 20 th of

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the month. For ACH payments, you may select the day of the month for the payments to be made; if no date is specified, the payments will occur on the 15 th of the month. The minimum withdrawal is $25, and minimum account balance requirements continue to apply. Shareholders in the program must own Virtus Mutual Fund shares worth at least $5,000.

Disclosure of Fund Portfolio Holdings. A description of the funds' policies and procedures with respect to the disclosure of the funds' portfolio securities is available in the SAI.

Tax Status of Distributions

The funds plan to make distributions from net investment income at intervals stated in the table below and to distribute net realized capital gains, if any, at least annually.

		Fund				Dividend Paid
		Virtus Emerging Markets Opportunities Fund				Semiannually
		Low Duration Income Fund				Monthly (1)
		Virtus Tax-Exempt Bond Fund				Monthly

(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. Certain distributions of long-term capital gains and certain dividends are taxable at a lower rate than ordinary income. Long-term capital gains, if any, which are distributed to shareholders and which are designated by a fund as capital gain distributions, are taxable to shareholders as long-term capital gain distributions regardless of the length of time you have owned your shares.

With respect to Tax-Exempt Bond Fund, 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 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 Tax-Exempt Bond Fund may invest a portion of its assets in securities that generate income that is not exempt from federal income tax.

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

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Financial Highlights

These tables present performance of the Predecessor Funds. No information is presented for the Successor Funds since each commenced operations on the date of this prospectus. The information is intended to help you understand the respective Predecessor Fund’s financial performance for the past five years or since inception. Some of this information reflects financial information for a single fund share. The total returns in the tables represent the rate that a Predecessor Fund shareholder would have earned or lost on an investment in a fund (assuming reinvestment of all dividends and distributions). This information for each fiscal year shown has been audited by PricewaterhouseCoopers LLP, the funds' independent registered public accounting firm for each of the Predecessor Funds; information for the period January 1, 2016 through June 30, 2016 is unaudited. PricewaterhouseCoopers LLP's report, together with each Predecessor Fund’s financial statements, is included in the Predecessor Fund’s most recent Annual Report, which is available upon request.

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain/(Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Total Distributions		Change in Net Asset Value			Net Asset Value, End of Period			Total Return (2)		Net Assets, End of Period (in thousands)			Ratio of Net Operating Expenses to Average Net Assets (8)		Ratio of Gross Operating Expenses to Average Net Assets (8)		Ratio of Net Investment Income to Average Net Assets		Portfolio Turnover Rate
Emerging Markets Opportunities Fund
Class A
1/1/16 to 6/30/16 (14)		$	8.68		0.03		0.71		0.74		—		—		—			0.74		$	9.42		8.53 % (11)		$	752,257		1.60 % (10)(12)(15)		1.60 % (10)		0.67 % (10)		14 % (11)
1/1/15 to 12/31/15			9.58		0.07		(0.91 )		(0.84 )		(0.06 )		—		(0.06 )			(0.90 )			8.68		(8.77 )			745,947		1.56 (12)		1.56		0.73		27
1/1/14 to 12/31/14			9.26		0.07		0.42		0.49		(0.06 )		(0.11 )		(0.17 )			0.32			9.58		5.23			770,941		1.55		1.55		0.71		28
1/1/13 to 12/31/13			10.00		0.08		(0.74 )		(0.66 )		(0.08 )		— (3 )		(0.08 )			(0.74 )			9.26		(6.58 )			1,097,753		1.58		1.58		0.79		31
1/1/12 to 12/31/12			8.44		0.07		1.57		1.64		(0.05 )		(0.03 )		(0.08 )			1.56			10.00		19.62			1,208,195		1.60		1.60		0.78		28
1/1/11 to 12/31/11			8.83		0.09		(0.37 )		(0.28 )		(0.04 )		(0.07 )		(0.11 )			(0.39 )			8.44		(3.13 )			474,368		1.61		1.61		1.09		29

Class C
1/1/16 to 6/30/16 (14)		$	8.49		—		0.69		0.69		—		—		—			0.69		$	9.18		8.25 % (11)		$	216,652		2.35 % (10)(12)(15)		2.35 % (10)		(0.10 )% (10)		14 % (11)
1/1/15 to 12/31/15			9.37		—		(0.88 )		(0.88 )		—		—		—			(0.88 )			8.49		(9.50 )			223,303		2.31 (12)		2.31		(0.01 )		27
1/1/14 to 12/31/14			9.08		(0.01 )		0.42		0.41		(0.01 )		(0.11 )		(0.12 )			0.29			9.37		4.40			228,652		2.30		2.30		(0.13 )		28
1/1/13 to 12/31/13			9.82		0.01		(0.72 )		(0.71 )		(0.03 )		— (3 )		(0.03 )			(0.74 )			9.08		(7.21 )			217,034		2.33		2.33		0.07		31
1/1/12 to 12/31/12			8.31		— (5 )		1.56		1.56		(0.02 )		(0.03 )		(0.05 )			1.51			9.82		18.66			203,974		2.35		2.35		0.01		28
1/1/11 to 12/31/11			8.72		0.03		(0.37 )		(0.34 )		— (3 )		(0.07 )		0.07 )			(0.41 )			8.31		(3.77 )			70,198		2.36		2.36		0.36		29

Class I
1/1/16 to 6/30/16 (14)		$	8.96		0.03		0.75		0.78		—		—		—		$	0.78		$	9.74		8.71 % (11)		$	5,999,257		1.34 % (10)(12)(15)		1.34 (10)		0.78 (10)		14 % (11)
1/1/15 to 12/31/15			9.89		0.10		(0.95 )		(0.85 )		(0.08 )		—		(0.08 )			(0.93 )			8.96		(8.55 )			8,726,303		1.31 (12)		1.32		0.99		27
1/1/14 to 12/31/14			9.55		0.09		0.45		0.54		(0.09 )		(0.11 )		(0.20 )			0.34			9.89		5.54			7,572,633		1.30		1.35		0.85		28
1/1/13 to 12/31/13			10.31		0.11		(0.76 )		(0.65 )		(0.11 )		— (3 )		(0.11 )			(0.76 )			9.55		(6.32 )			6,357,443		1.33		1.38		1.06		31
1/1/12 to 12/31/12			8.70		0.10		1.62		1.72		(0.08 )		(0.03 )		(0.11 )			1.61			10.31		19.88			5,352,379		1.35		1.40		0.99		28
1/1/11 to 12/31/11			9.10		0.12		(0.38 )		(0.26 )		(0.07 )		(0.07 )		(0.14 )			(0.40 )			8.70		(2.92 )			2,082,147		1.36		1.41		1.34		29

Class R6
1/1/16 to 6/30/16 (14)		$	8.96		0.04		0.74		0.78		—		—		—			0.78		$	9.74		8.71 % (11)		$	36,529		1.21 % (10)(12)(15)		1.21 % (10)		0.93 % (10)		14 % (11)
1/1/15 to 12/31/15		$	9.89		0.08		(0.91 )		(0.83 )		(0.10 )		—		(0.10 )			(0.93 )		$	8.96		(8.44 )%		$	34,379		1.21 % (12)		1.21 %		0.90 %		27 %
11/12/14 (7) to 12/31/14			10.42		(0.01 )		(0.45 )		(0.46 )		(0.06 )		(0.01 )		(0.07 )			(0.53 )			9.89		(4.60 ) (11)			95		1.24 (10)		1.24 (10)		(0.41 ) (10)		28 (9)(11)

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain/(Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Return of Capital		Total Distributions		Payment from Affiliate		Change in Net Asset Value		Net Asset Value, End of Period			Total Return (2)		Net Assets, End of Period (in thousands)			Ratio of Net Operating Expenses to Average Net Assets (8)		Ratio of Gross Operating Expenses to Average Net Assets (8)		Ratio of Net Investment Income to Average Net Assets		Portfolio Turnover Rate
Low Duration Income Fund
Class A
1/1/16 to 6/30/16 (14)		$	10.70		0.10		0.16		0.26		(0.09 )		—		—		(0.09 )		—		0.17		$	10.87		2.48 % (11)		$	97,547		0.76 (10)(15)		1.10 % (10)		1.92 % (10)		23 % (11)
1/1/15 to 12/31/15			10.82		0.19		(0.09 )		0.10		(0.19 )		—		(0.03 )		(0.22 )		— (13 )		(0.12 )			10.70		0.89			85,666		0.75		1.12		1.77		56
1/1/14 to 12/31/14			10.83		0.22		(0.01 )		0.21		(0.22 )		—		—		(0.22 )		—		(0.01 )			10.82		1.94			75,456		0.92 (6)		1.11		2.02		58
1/1/13 to 12/31/13			10.96		0.21		(0.13 )		0.08		(0.21 )		—		—		(0.21 )		—		(0.13 )			10.83		0.76			39,436		0.95		1.14		1.93		51
1/1/12 to 12/31/12			10.54		0.23		0.41		0.64		(0.22 )		—		—		(0.22 )		—		0.42			10.96		6.14			28,266		0.96 (4)		1.20		2.12		87 (5)
1/1/11 to 12/31/11			10.51		0.28		0.03		0.31		(0.28 )		—		—		(0.28 )		—		0.03			10.54		2.99			15,145		0.95		1.13		2.62		47

Class C
1/1/16 to 6/30/16 (14)		$	10.70		0.06		0.17		0.23		(0.06 )		—		—		(0.06 )		—		0.17		$	10.87		2.11 (11)		$	48,090		1.51 % (10)(15)		1.85 % (10)		1.17 % (10)		23 % (11)
1/1/15 to 12/31/15			10.82		0.11		(0.10 )		0.01		(0.10 )		—		(0.03 )		(0.13 )		— (13 )		(0.12 )			10.70		0.13			44,621		1.50		1.86		1.02		56
1/1/14 to 12/31/14			10.84		0.14		(0.02 )		0.12		(0.14 )		—		—		(0.14 )		—		(0.02 )			10.82		1.08			51,303		1.68 (6)		1.87		1.28		58
1/1/13 to 12/31/13			10.97		0.13		(0.13 )		—		(0.13 )		—		—		(0.13 )		—		(0.13 )			10.84		0.01			25,463		1.70		1.89		1.17		51
1/1/12 to 12/31/12			10.54		0.15		0.42		0.57		(0.14 )		—		—		(0.14 )		—		0.43			10.97		5.44			20,156		1.71 (4)		1.95		1.38		87 (5)
1/1/11 to 12/31/11			10.51		0.20		0.03		0.23		(0.20 )		—		—		(0.20 )		—		0.03			10.54		2.23			13,761		1.70		1.88		1.86		47

Class I
1/1/16 to 6/30/16 (14)		$	10.70		0.12		0.15		0.27		(0.11 )		—		—		(0.11 )		—		0.16		$	10.86		2.51 % (11)		$	218,647		0.51 % (10)(15)		0.85 % (10)		2.18 % (10)		23 % (11)
1/1/15 to 12/31/15			10.81		0.22		(0.09 )		0.13		(0.21 )		—		(0.03 )		(0.24 )		— (13 )		(0.11 )			10.70		1.24			150,977		0.50		0.88		2.03		56
1/1/14 to 12/31/14			10.83		0.25		(0.02 )		0.23		(0.25 )		—		—		(0.25 )		—		(0.02 )			10.81		2.10			92,794		0.68 (6)		0.91		2.27		58
1/1/13 to 12/31/13			10.96		0.24		(0.13 )		0.11		(0.24 )		—		—		(0.24 )		—		(0.13 )			10.83		1.02			52,790		0.70		0.94		2.18		51
1/1/12 to 12/31/12			10.54		0.26		0.41		0.67		(0.25 )		—		—		(0.25 )		—		(0.42 )			10.96		6.40			29,513		0.73 (4)		0.99		2.40		87 (5)
1/1/11 to 12/31/11			10.51		0.31		0.03		0.34		(0.31 )		—		—		(0.31 )		—		0.03			10.54		3.25			65,206		0.70		0.93		2.91		47

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Financial Highlights (continued)

	Net Asset Value, Beginning of Period			Net Investment Income (Loss) (1)		Net Realized and Unrealized Gain/(Loss)		Total from Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Gains		Return of Capital		Total Distributions		Payment from Affiliate		Change in Net Asset Value		Net Asset Value, End of Period			Total Return (2)		Net Assets, End of Period (in thousands)			Ratio of Net Operating Expenses to Average Net Assets (8)		Ratio of Gross Operating Expenses to Average Net Assets (8)		Ratio of Net Investment Income to Average Net Assets		Portfolio Turnover Rate
Tax-Exempt Bond Fund
10/1/15 to 3/31/16 (14)		$	11.43		0.15		0.22		0.37		(0.15 )		—		—		(0.15 )		—		0.22		$	11.65		3.24 % (11)		$	72,495		0.86 % (10)(15)		1.01 % (10)		2.53 % (10)		4 % (11)
1/1/15 to 12/31/15			11.46		0.30		(0.03 )		0.27		(0.29 )		(0.01 )		—		(0.30 )		—		(0.03 )			11.43		2.39			74,418		0.85		1.00		2.60		10
1/1/14 to 12/31/14			10.91		0.31		0.56		0.87		(0.32 )		— (3 )		—		(0.32 )		—		0.55			11.46		7.94			79,906		0.85		0.99		2.73		22
1/1/13 to 12/31/13			11.62		0.30		(0.71 )		(0.41 )		(0.30 )		—		—		(0.30 )		—		(0.71 )			10.91		(3.48 )			89,303		0.85		0.98		2.66		29
1/1/12 to 12/31/12			11.10		0.30		0.52		0.82		(0.30 )		—		—		(0.30 )		—		0.52			11.62		7.45			143,397		0.87 (4)		1.00		2.61		35
1/1/11 to 12/31/11			10.38		0.39		0.74		1.13		(0.41 )		—		—		(0.41 )		—		0.72			11.10		10.98			107,873		0.81		0.98		3.62		59

Class C
10/1/15 to 3/31/16 (14)		$	11.43		0.10		0.23		0.33		(0.11 )		—		—		(0.11 )		—		0.22		$	11.65		2.86 % (11)		$	27,678		1.61 % (10)(15)		1.76 % (10)		1.78 % (10)		4 % (11)
1/1/15 to 12/31/15			11.46		0.21		(0.03 )		0.18		(0.20 )		(0.01 )		—		(0.21 )		—		(0.03 )			11.43		1.62			30,316		1.60		1.75		1.85		10
1/1/14 to 12/31/14			10.92		0.22		0.55		0.77		(0.23 )		— (3 )		—		(0.23 )		—		0.54			11.46		7.13			30,967		1.60		1.74		1.98		22
1/1/13 to 12/31/13			11.63		0.22		(0.72 )		(0.50 )		(0.21 )		—		—		(0.21 )		—		(0.71 )			10.92		(4.29 )			28,845		1.60		1.73		1.92		29
1/1/12 to 12/31/12			11.10		0.21		0.54		0.75		(0.22 )		—		—		(0.22 )		—		0.53			11.63		6.74			39,792		1.62 (4)		1.75		1.86		35
1/1/11 to 12/31/11			10.38		0.31		0.74		1.05		(0.33 )		—		—		(0.33 )		—		0.72			11.10		10.15			28,641		1.54		1.70		2.91		59

Class I
10/1/15 to 3/31/16 (14)		$	11.43		0.16		0.22		0.38		(0.16 )		—		—		(0.16 )		—		0.22		$	11.65		3.36 % (11)		$	102,071		0.61 % (10)(15)		0.76 % (10)		2.78 % (10)		4 % (11)
1/1/15 to 12/31/15			11.46		0.33		(0.03 )		0.30		(0.32 )		(0.01 )		—		(0.33 )		—		(0.03 )			11.43		2.64			90,912		0.60		0.77		2.85		10
1/1/14 to 12/31/14			10.91		0.34		0.56		0.90		(0.35 )		— (3 )		—		(0.35 )		—		0.55			11.46		8.30			86,459		0.60		0.79		2.98		22
1/1/13 to 12/31/13			11.62		0.33		(0.71 )		(0.38 )		(0.33 )		—		—		(0.33 )		—		(0.71 )			10.91		(3.33 )			82,936		0.60		0.77		2.88		29
1/1/12 to 12/31/12			11.10		0.33		0.52		0.85		(0.33 )		—		—		(0.33 )		—		0.52			11.62		7.72			162,094		0.62 (4)		0.79		2.84		35
1/1/11 to 12/31/11			10.38		0.41		0.74		1.15		(0.43 )		—		—		(0.43 )		—		0.72			11.10		11.36			94,228		0.57		0.77		3.78		59

(1)

Computed using average shares outstanding.

(2)

Sales charges, where applicable, are not reflected in the total return calculation.

(3)

Amount is less than $0.005.

(4)

Includes extraordinary expenses.

(5)

Portfolio turnover calculation excludes security transactions that were distributed as a result of a redemption-in-kind.

(6)

Due to a change in the expense ratio, the ratio shown is a blended expense ratio.

(7)

Inception Date.

(8)

The Funds will indirectly bear their prorated share of expenses of the underlying funds in which they invest. Such expenses are not included in the calculation of this ratio.

(9)

Reported on Fund level not class level.

(10)

Annualized.

(11)

Not Annualized.

(12)

Earnings credits from Custodian were not material, as reflected in the Statements of Operations, and had no impact on Financial Highlights.

(13)

Payment from affiliate had no impact on total return.

(14)

Unaudited.

(15)

Net expense ratio includes proxy expenses..

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Virtus Mutual Funds
P.O. Box 9874
Providence, RI 02940-8074

ADDITIONAL INFORMATION

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

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 our Web site, virtus.com , or you can request copies by calling Virtus Fund Services toll-free at 800-243-1574. You may also call this number to request other information about the funds or to make shareholder inquiries.

Information about the funds (including the SAI) can be reviewed and copied at the Securities and Exchange Commission’s ("SEC") Public Reference Room in Washington, DC. For information about the operation of the Public Reference Room, call 202-551-8090. Reports and other information about the funds are available in the EDGAR database on the SEC’s Internet site at sec.gov . You may also obtain copies upon payment of a duplicating fee by writing the Public Reference Section of the SEC, Washington, DC 20549-6009 or by electronic request at publicinfo@sec.gov .

Virtus Fund Services: 800-243-1574

Daily NAV Information

The daily NAV for each fund may be obtained from the Our Products section of our Web site, virtus.com .

	Investment Company Act File No. 811-7455			9-16
	8020

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Virtus Opportunities Trust

STATEMENT OF ADDITIONAL INFORMATION

September 23, 2016

Virtus Opportunities Trust (The “Trust”) is an open-end management investment company issuing shares in 31 separate series or “Funds”, all of which are publicly offered and described herein:

TICKER SYMBOL BY CLASS

FUND

Virtus Alternatives Diversifier Fund

PDPAX

PDPCX

VADIX

Virtus Bond Fund

SAVAX

SAVBX

SAVCX

SAVYX

Virtus CA Tax-Exempt Bond Fund

CTESX

CTXEX

Virtus Emerging Markets Debt Fund

VEDAX

VEDCX

VIEDX

Virtus Emerging Markets Equity Income Fund

VEIAX

VEICX

VEIIX

Virtus Emerging Markets Opportunities Fund

HEMZX

PICEX

HIEMX

VREMX

Virtus Emerging Markets Small-Cap Fund

VAESX

VCESX

VIESX

Virtus Equity Trend Fund

VAPAX

VAPCX

VAPIX

VRPAX

Virtus Essential Resources Fund

VERAX

VERCX

VERIX

Virtus Foreign Opportunities Fund

JVIAX

JVICX

JVXIX

VFOPX

Virtus Global Equity Trend Fund

VGPAX

VGPCX

VGPIX

Virtus Global Infrastructure Fund

PGUAX

PGUCX

PGIUX

Virtus Global Opportunities Fund

NWWOX

WWOBX

WWOCX

WWOIX

Virtus Global Real Estate Securities Fund

VGSAX

VGSCX

VGISX

Virtus Greater European Opportunities Fund

VGEAX

VGECX

VGEIX

Virtus Herzfeld Fund

VHFAX

VHFCX

VHFIX

Virtus High Yield Fund

PHCHX

PHCCX

PGHCX

PHCIX

Virtus International Equity Fund

VIEAX

VIECX

VIIEX

Virtus International Real Estate Securities Fund

PXRAX

PXRCX

PXRIX

Virtus International Small-Cap Fund

VISAX

VCISX

VIISX

VRISX

Virtus International Wealth Masters Fund

VIWAX

VIWCX

VWIIX

Virtus Low Duration Income Fund

HIMZX

PCMZX

HIBIX

Virtus Low Volatility Equity Fund

VLVAX

VLVCX

VLVIX

Virtus Multi-Asset Trend Fund

VAAAX

VAACX

VAISX

Virtus Multi-Sector Intermediate Bond Fund

NAMFX

NBMFX

NCMFX

VMFIX

VMFRX

Virtus Multi-Sector Short Term Bond Fund

NARAX

PBARX

PSTCX

PIMSX

PMSTX

Virtus Real Estate Securities Fund

PHRAX

PHRBX

PHRCX

PHRIX

VRREX

Virtus Sector Trend Fund

PWBAX

PWBCX

VARIX

Virtus Senior Floating Rate Fund

PSFRX

PFSRX

PSFIX

Virtus Tax-Exempt Bond Fund

HXBZX

PXCZX

HXBIX

Virtus Wealth Masters Fund

VWMAX

VWMCX

VWMIX

This Statement of Additional Information ("SAI") relates to the Class A, Class B, Class C, Class I, Class T and Class R6 shares of the Funds. This SAI is not a prospectus, and it should be read in conjunction with the Prospectuses for Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund dated September 23, 2016 and the Prospectuses for the other Funds dated January 28, 2016 as described below and as supplemented and amended from time to time. Each Fund’s Prospectuses are incorporated by reference into this SAI, and the portions of this SAI that relate to each Fund have been incorporated by reference into such Fund’s Prospectuses. The portions of this SAI that do not relate to a Fund do not form a part of such Fund’s SAI, have not been incorporated by reference into such Fund’s Prospectuses and should not be relied upon by investors in such Fund.

The Prospectuses may be obtained by downloading them from virtus.com ; by calling 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.

For Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund, the audited financial statements appear in each Fund’s annual report for its most recent fiscal year and the unaudited

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financial statements for the funds appear in each Fund's semiannual report for its most recent seimannual period. Shareholders may obtain a copy of the Annual Report dated December 31, 2015 and/or the Semiannual Report dated June 30, 2016, without charge, by calling 800.243.1574 or by downloading it from virtus.com. The financial statements from the foregoing annual and semiannual reports are incorporated herein by reference. The audited financial statements for the other Funds appear in each Fund’s annual report for its most recent fiscal year. Shareholders may obtain a copy of the Annual Report dated September 30, 2015, without charge, by calling 800.243.1574 or by downloading it from virtus.com . The financial statements from the foregoing annual report are incorporated herein by reference.

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Table of Contents

	Page
Glossary		4
General Information and History		8
More Information About Fund Investment Strategies & Related Risks		16
Investment Limitations		72
Management of the Trust		75
Control Persons and Principal Holders of Securities		86
Investment Advisory and Other Services		86
Distribution Plans		96
Portfolio Managers		98
Brokerage Allocation and Other Practices		105
Purchase, Redemption and Pricing of Shares		108
Investor Account Services and Policies		116
Dividends, Distributions and Taxes		118
Performance Information		123
Financial Statements		125
Appendix A — Description of Ratings		126
Appendix B — Control Persons and Principal Shareholders		127

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Glossary

	1933 Act			The Securities Act of 1933, as amended
	1940 Act			The Investment Company Act of 1940, as amended
	ACH			Automated Clearing House, a nationwide electronic money transfer system that provides for the inter-bank clearing of credit and debit transactions and for the exchange of information among participating financial institutions
	Administrator			The Trust’s administrative agent, Virtus Fund Services, LLC
	ADRs			American Depositary Receipts
	ADSs			American Depositary Shares
	Adviser			The investment adviser to the Funds, Virtus Investment Advisers, Inc.
	Alternatives Diversifier Fund			Virtus Alternatives Diversifier Fund
	BNY Mellon			BNY Mellon Investment Servicing (US) Inc., the sub-administrative and accounting agent for the Funds
	Board			The Board of Trustees of Virtus Opportunities Trust (also referred to herein as the “Trustees”)
	Bond Fund			Virtus Bond Fund
	CA Tax-Exempt Bond Fund			Virtus CA Tax-Exempt Bond Fund
	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
	Duff & Phelps			Duff & Phelps Investment Management Co., subadviser to the Global Infrastructure Fund, Global Real Estate Fund, International Equity Fund, International Real Estate Fund and Real Estate Fund
	EDRs			European Depositary Receipts (another name for CDRs)
	EM Debt Fund			Virtus Emerging Markets Debt Fund
	EM Equity Income Fund			Virtus Emerging Markets Equity Income Fund
	EM Opportunities Fund			Virtus Emerging Markets Opportunities Fund
	EM Small-Cap Fund			Virtus Emerging Markets Small-Cap Fund
	Equity Trend Fund			Virtus Equity Trend Fund
	Essential Resources Fund			Virtus Essential Resources Fund
	ETFs			Exchange-traded Funds
	FHFA			Federal Housing Finance Agency, an independent Federal agency that regulates FNMA, FHLMC and the twelve Federal Home Loan Banks
	FHLMC			Federal Home Loan Mortgage Corporation, also known as “Freddie Mac”, which is a government-sponsored corporation formerly owned by the twelve Federal Home Loan Banks and now owned entirely by private stockholders
	FINRA			Financial Industry Regulatory Authority, a self-regulatory organization with authority over registered broker-dealers operating in the United States, including VP Distributors
	Fitch			Fitch Ratings, Inc.

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	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
	Foreign Opportunities Fund			Virtus Foreign Opportunities Fund
	Fund Complex			The group of Funds sponsored by Virtus and managed by VIA, including the Funds, Virtus Variable Insurance Trust and certain other closed-end funds.
	Funds			The series of the Trust discussed in this SAI
	Funds of Funds			Collectively, Alternatives Diversifier Fund, Herzfeld Fund, Low Volatility Fund and Trend Funds
	GDRs			Global Depositary Receipts
	GICs			Guaranteed Investment Contracts
	Global Equity Trend Fund			Virtus Global Equity Trend Fund
	Global Infrastructure Fund			Virtus Global Infrastructure Fund
	Global Opportunities Fund			Virtus Global Opportunities Fund
	Global Real Estate Fund			Virtus Global Real Estate Securities Fund
	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
	Greater European Fund			Virtus Greater European Opportunities Fund
	Herzfeld			Thomas J. Herzfeld Advisors, Inc., subadviser to the Herzfeld Fund
	Herzfeld Fund			Virtus Herzfeld Fund
	High Yield Fund			Virtus High Yield Fund
	Horizon			Horizon Asset Management LLC, subadviser to the International Wealth Masters Fund and the Wealth Masters Fund
	IMF			International Monetary Fund, an international organization seeking to promote international economic cooperation, international trade, employment and exchange rate stability, among other things
	Independent Trustees			Trustees who are not “interested persons” of the Trust, as that term is defined by the 1940 Act
	International Equity Fund			Virtus International Equity Fund
	International Real Estate Fund			Virtus International Real Estate Securities Fund
	International Small-Cap Fund			Virtus International Small-Cap Fund
	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.
	Kayne Anderson Rudnick			Kayne Anderson Rudnick Investment Management, LLC, subadviser to the EM Small-Cap Fund and International Small-Cap Fund
	KBIGI (North America)			KBI Global Investors (North America) Ltd., subadviser to the EM Equity Income Fund and Essential Resources Fund
	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
	Low Volatility Fund			Virtus Low Volatility Equity Fund
	Moody’s			Moody’s Investors Service, Inc.
	Multi-Asset Trend Fund			Virtus Multi-Asset Trend Fund
	Multi-Sector Intermediate Bond Fund			Virtus Multi-Sector Intermediate Bond Fund
	Multi-Sector Short Term Bond Fund			Virtus Multi-Sector Short Term Bond Fund
	NAV			Net Asset Value, which is the per-share price of a Fund

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	Newfleet			Newfleet Asset Management, LLC, subadviser to the Bond Fund, CA Tax-Exempt Bond Fund, EM Debt Fund, High Yield Fund, Low Duration Income Fund, Multi-Sector Intermediate Bond Fund, Multi-Sector Short Term Bond Fund, Senior Floating Rate Fund and Tax-Exempt Bond Fund
	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 certain of its corporate affiliates
	Prospectuses			The prospectuses for the Funds, as amended from time to time
	PwC			PricewaterhouseCoopers, LLP, the independent registered public accounting firm for the Trust
	Rampart			Rampart Investment Management Company, LLC, subadviser to the Low Volatility Equity Fund
	Real Estate Fund			Virtus Real Estate Securities Fund
	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
	SEC			U.S. Securities and Exchange Commission
	Sector Trend Fund			Virtus Sector Trend Fund
	Senior Floating Rate Fund			Virtus Senior Floating Rate Fund
	SIFMA			Securities Industry and Financial Markets Association (formerly, the Bond Market Association), a financial industry trade group consisting of broker-dealers and asset managers across the United States
	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
	Trend Funds			Collectively, Virtus Equity Trend Fund, Virtus Global Equity Trend Fund, Virtus Multi-Asset Trend Fund and Virtus Sector Trend Fund
	VIA			Virtus Investment Advisers, Inc., the Adviser to the Funds
	Virtus			Virtus Investment Partners, Inc., which is the parent company of the Adviser, the Distributor, the Administrator/Transfer Agent, Duff & Phelps, Kayne Anderson Rudnick, Newfleet and Rampart
	Virtus Mutual Funds			The family of funds consisting of the Funds, the series of Virtus Alternative Solutions Trust, the series of Virtus Equity Trust and the series of Virtus Retirement Trust
	Vontobel			Vontobel Asset Management, Inc., subadviser to the EM Opportunities Fund, Foreign Opportunities Fund, Global Opportunities Fund and Greater European Fund
	VP Distributors			VP Distributors, LLC , the Trust's Distributor

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

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GENERAL INFORMATION AND HISTORY

The Trust is an open-end management investment company organized as a Delaware statutory trust December 18, 1995. Prior to January 27, 2006, the Trust was named “Phoenix-Seneca Funds.” From January 27, 2006 to October 20, 2008, the Trust was named “Phoenix Opportunities Trust.”

The Trust’s Prospectuses describe the investment objectives of the Funds and the strategies that each Fund will employ in seeking to achieve its investment objective. The respective investment objective(s) for Multi-Sector Short Term Bond Fund, Real Estate Fund and Sector Trend Fund is a fundamental policy and may not be changed without the vote of a majority of the outstanding voting securities of that Fund. The respective investment objective(s) for each of the other Funds is a non-fundamental policy of that Fund and may be changed without shareholder approval upon 60 days' notice. The following discussion supplements the disclosure in the Prospectuses. Prior to October 1, 2008, each of the funds indicated with an asterisk (*) below had "Phoenix" in their names instead of "Virtus".

Fund Type

Fund

Investment Objective

Alternatives

Alternatives Diversifier Fund

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

Global Infrastructure Fund *

The fund has investment objectives of both capital appreciation and current income.

Global Real Estate Fund

The fund has a primary investment objective of long-term capital appreciation, with a secondary investment objective of income.

Herzfeld Fund

The fund has investment objectives of capital appreciation and current income.

International Real Estate Fund *

The fund has a primary investment objective of long-term capital appreciation, with a secondary investment objective of income.

Real Estate Fund *

The fund has investment objectives of capital appreciation and income with approximately equal emphasis.

Asset Allocation

Multi-Asset Trend Fund

The fund has an investment objective of capital appreciation. In pursuing this objective, the fund maintains an emphasis on preservation of capital.

Equity

Equity Trend Fund

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

Essential Resources Fund

The fund has an investment objective of capital appreciation.

Low Volatility Fund

The fund has an investment objective of capital appreciation with lower volatility than the U.S. equity markets over a full market cycle.

Sector Trend Fund *

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

Wealth Masters Fund

The fund has an investment objective of capital appreciation.

Fixed Income

Bond Fund *

The fund has an investment objective of high total return from both current income and capital appreciation.

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Fund Type

Fund

Investment Objective

CA Tax-Exempt Bond Fund *

The fund has an investment objective of obtaining a high level of current income exempt from California state and local income taxes, as well as federal income tax, consistent with the preservation of capital.

EM Debt Fund

The fund has an investment objective of total return from current income and capital appreciation.

High Yield Fund *

The fund has a primary investment objective of high current income and a secondary objective of capital growth.

Low Duration Income Fund

Multi-Sector Intermediate Bond Fund *

The fund has an investment objective of maximizing current income while preserving capital.

Multi-Sector Short Term Bond Fund *

The fund has an investment objective of providing high current income while attempting to limit changes in the fund’s net asset value per share caused by interest rate changes.

Senior Floating Rate Fund *

The fund has an investment objective of high total return from both current income and capital appreciation.

Tax-Exempt Bond Fund

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

International/Global

EM Equity Income Fund

The fund has investment objectives of seeking capital appreciation and income.

EM Opportunities Fund

The fund has an investment objective of capital appreciation.

EM Small-Cap Fund *

The fund has an investment objective of capital appreciation.

Foreign Opportunities Fund *

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

Global Equity Trend Fund

The fund has an investment objective of capital appreciation. In pursuing this objective, the fund maintains an emphasis on preservation of capital.

Global Opportunities Fund *

The fund has an investment objective of capital appreciation.

Greater European Fund

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

International Equity Fund

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

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Fund Type

Fund

Investment Objective

International Small-Cap Fund

The fund has an investment objective of capital appreciation.

International Wealth Masters Fund

The fund has an investment objective of capital appreciation.

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 will call a meeting of shareholders of a Fund when at least 10% of the outstanding shares of that Fund so request in writing. If the Board fails to call a meeting after being so notified, the shareholders may call the meeting. The Board will assist the shareholders by identifying other shareholders or mailing communications, as required under Section 16(c) of the 1940 Act.

Shares are fully paid, 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 as it determines to be fair and equitable. The Trust is not bound to recognize any transfer of shares of a Fund or class until the transfer is recorded on the Trust’s books pursuant to policies and procedures of the Transfer Agent.

As a Delaware statutory trust, the Trust’s operations are governed by its Amended and Restated Agreement and Declaration of Trust dated March 1, 2001, as amended. A copy of the Trust’s Certificate of Trust, as amended, is on file with the Office of the Secretary of State of the State of Delaware. Upon the initial purchase of shares, the shareholder agrees to be bound by the Trust’s Agreement and Declaration of Trust, as amended. Generally, Delaware statutory trust shareholders are not personally liable for obligations of the Delaware statutory trust under Delaware law. The Delaware Statutory Trust Act (the “Delaware Act”) provides that a shareholder of a Delaware statutory trust shall be entitled to the same limitation of liability extended to shareholders of private for-profit corporations. The Trust’s Amended and Restated Agreement and Declaration of Trust expressly provides that the Trust has been organized under the Delaware Act and that the Declaration of Trust is to be governed by Delaware law. It is nevertheless possible that a Delaware statutory trust, such as the Trust, might become a party to an action in another state whose courts refused to apply Delaware law, in which case the Trust’s shareholders could be subject to personal liability. To guard against this risk, the Amended and Restated Agreement and Declaration of Trust (i) contains an express disclaimer of shareholder liability for acts or obligations of the Trust and provides that notice of such disclaimer may be given in each agreement, obligation and instrument entered into or executed by the Trust or its Trustees, (ii) provides for the indemnification out of Trust property of any shareholders held personally liable for any obligations of the Trust or any series of the Trust and (iii) provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, the risk of a Trust shareholder incurring financial loss beyond his or her investment because of shareholder liability is limited to circumstances in which all of the following factors are present: (1) a court refused to apply Delaware law; (2) the liability arose under tort law or, if not, no contractual limitation of liability was in effect; and (3) the Trust itself would be unable to meet its obligations. In the light of Delaware law, the nature of the Trust’s business and the nature of its assets, the risk of personal liability to a Fund shareholder is remote.

The Amended and Restated Agreement and Declaration of Trust further provides that the Trust shall indemnify each of its Trustees and officers against liabilities and expenses reasonably incurred by them, in connection with, or arising out of, any action, suit or proceeding, threatened against or otherwise involving such Trustee or officer, directly or indirectly, by reason of being or having been a Trustee or officer of the Trust. The Amended and Restated Agreement and Declaration of Trust does not authorize the Trust to indemnify any Trustee or officer against any liability to which he or she would otherwise be subject by reason of or for willful misfeasance, bad faith, gross negligence or reckless disregard of such person’s duties.

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Under the Amended and Restated Agreement and Declaration of Trust, the Trust is not required to hold annual meetings to elect Trustees or for other purposes. It is not anticipated that the Trust will hold shareholders’ meetings unless required by law or the Declaration of Trust. The Trust will be required to hold a meeting to elect Trustees to fill any existing vacancies on the Board if, at any time, fewer than a majority of the Trustees have been elected by the shareholders of the Trust. The Board is required to call a meeting for the purpose of considering the removal of persons serving as Trustee if requested in writing to do so by the holders of not less than 10% of the outstanding shares of the Trust.

Shares of the Trust do not entitle their holders to cumulative voting rights, so that the holders of more than 50% of the outstanding shares of the Trust may elect all of the Trustees, in which case the holders of the remaining shares would not be able to elect any Trustees. As determined by the Trustees, shareholders are entitled to one vote for each dollar of NAV (number of shares held times the NAV of the applicable class of the applicable Fund).

Pursuant to the Amended and Restated Agreement and Declaration of Trust, the Trustees may create additional funds by establishing additional series of shares in the Trust. The establishment of additional series would not affect the interests of current shareholders in the existing Funds. Pursuant to the Amended and Restated Agreement and Declaration of Trust, the Trustees may establish and issue multiple classes of shares for each Fund.

Each share of each class of a Fund is entitled to such dividends and distributions out of the income earned on the assets belonging to that Fund which are attributable to such class as are declared in the discretion of the Trustees. In the event of the liquidation or dissolution of the Trust, shares of each class of each Fund are entitled to receive their proportionate share of the assets which are attributable to such class of such Fund and which are available for distribution as the Trustees in their sole discretion may determine. Shareholders are not entitled to any preemptive, conversion or subscription rights. All shares, when issued, will be fully paid and non-assessable by the Trust.

Subject to shareholder approval (if then required), the Trustees may authorize each Fund to invest all or part of its investable assets in a single open-end investment company that has substantially the same investment objectives, policies and restrictions as the Fund. As of the date of this SAI, the Trustees do not have any plan to authorize any Fund to so invest its assets.

Diversification of Funds

Each Fund is diversified under the 1940 Act with the exception of Alternatives Diversifier Fund, which is a non-diversified fund. Each Fund also intends to diversify its assets to the extent necessary to qualify for tax treatment as a regulated investment company under the Code. (For information regarding qualification under the Code, see “Dividends, Distributions and Taxes” in this SAI.)

Fund Names and Investment Policies

Each of the Funds noted below has a name that suggests a focus on a particular type of investment. In accordance with Rule 35d-1 under the 1940 Act, each of these Funds has adopted a policy that it will, under normal circumstances, invest at least 80% of its assets in investments of the type suggested by its name. For this policy, “assets” means net assets plus the amount of any borrowings for investment purposes. In addition, in appropriate circumstances, synthetic investments may be included in the 80% basket if they have economic characteristics similar to the other investments included in the basket. 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.

These funds have a policy that states at least 80% of its assets in investments of the type suggested by its name.

	Bond Fund			High Yield Fund
	CA Tax-Exempt Bond Fund			International Equity Fund
	EM Debt Fund			International Real Estate Fund
	EM Equity Income Fund			International Small-Cap Fund
	EM Opportunities Fund			Low Duration Income Fund
	EM Small-Cap Fund			Low Volatility Fund
	Essential Resources Fund			Multi-Sector Intermediate Bond Fund
	Foreign Opportunities Fund			Multi-Sector Short-Term Bond Fund
	Global Infrastructure Fund			Real Estate Fund

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	Global Real Estate Fund			Senior Floating Rate Fund
	Greater European Fund			Tax-Exempt Bond Fund

Portfolio Turnover

The portfolio turnover rate of each Fund is calculated by dividing the lesser of purchases or sales of portfolio securities during the fiscal year by the monthly average of the value of the Fund's securities (excluding all securities, including options, with maturities at the time of acquisition of one year or less). All long-term securities, including long-term U.S. Government securities, are included. A high rate of portfolio turnover generally involves correspondingly greater brokerage commission expenses, which must be borne directly by the Fund. Turnover rates may vary greatly from year to year as well as within a particular year and also may be affected by cash requirements for redemptions of each Fund's shares by requirements that enable the Trust to receive certain favorable tax treatments. The portfolio turnover rate for each Fund that has completed a fiscal period of operations is set forth in its summary prospectus and under "Financial Highlights" in the statutory prospectus.

Disclosure of Portfolio Holdings

The Trustees of the Trust have adopted 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 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 generally carries out this duty through its chief compliance officer, in consultation with other officers representing various areas of management.

The Trust’s CCO is responsible for monitoring the use of portfolio holdings information, for the Funds’ compliance with these policies and for providing reports to the Board 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 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 15-, 30- or 60-day delay. Portfolio holdings may be released sooner at the Administrator's discretion. Additionally, each Fund except certain of the Trend Funds provides its top 10 holdings and summary composition data derived from portfolio holdings information on Virtus’ Web site. This information is posted to the Web site at the end of each month with respect to the top 10 holdings, and at the end of each quarter with respect to summary composition information, generally within 10 business days. With respect to certain Funds, the top 10 holdings and summary composition information may be reported on a one-month lag. This information will be available on the Web site until full portfolio holdings information becomes publicly available as described above. The Funds also provide publicly-available portfolio holdings information directly to ratings agencies, the frequency and timing of which is determined under the terms of the contractual arrangements with such agencies, and may provide to financial intermediaries, upon request, monthly portfolio holdings for periods included in publicly-available quarterly portfolio holdings disclosures.

Other Disclosures

The 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 Fund's portfolio holdings may only be made if (i) the Fund has a legitimate business purpose for making such disclosure and (ii) the party receiving the non-public information 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

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will act in the best interest of the Funds’ shareholders with respect to any such disclosure of portfolio holdings information. If a potential conflict can be resolved in a manner that does not present detrimental effects to the Funds’ shareholders, the Administrator may authorize release of portfolio holdings information. Conversely, if the potential conflict cannot be resolved in a manner that does not present detrimental effects to the Funds’ shareholders, the Administrator will not authorize such release.

Ongoing Arrangements to Disclose Portfolio Holdings

As previously authorized by the Funds’ Board and/or the Funds’ Administrator, the Funds periodically disclose non-public portfolio holdings on a confidential basis to various service providers that require such information in order to assist the Funds in their day-to-day operations, as well as public information to certain ratings organizations. In addition to Virtus and its affiliates, the entities receiving non-public portfolio holdings as of the date of this SAI are described in the following table. The table also includes information as to the timing of these entities receiving the portfolio holdings information from the Funds.

Non-Public Portfolio Holdings Information

Type of Service Provider

Name of Service Provider

Timing of Release of Portfolio Holdings
Information

Adviser

Virtus Investment Advisers, Inc.

Daily with no delay

Subadviser (Global Infrastructure Fund, Global Real Estate Fund, International Equity Fund, International Real Estate Fund and Real Estate Fund)

Duff & Phelps Investment Management Co.

Daily with no delay

Subadviser (Herzfeld Fund)

Thomas J. Herzfeld Advisors, Inc.

Daily with no delay

Subadviser (International Wealth Masters Fund and Wealth Masters Fund)

Horizon Asset Management LLC

Daily with no delay

Subadviser (EM Small-Cap Fund and International Small-Cap Fund)

Kayne Anderson Rudnick Investment Management, LLC

Daily with no delay

Subadviser (EM Equity Income Fund and Essential Resources Fund)

KBI Global Investors (North America) Ltd.

Daily with no delay

Subadviser (Bond Fund, CA Tax-Exempt Bond Fund, EM Debt Fund, High Yield Fund, Low Duration Income Fund, Multi-Sector Intermediate Bond Fund, Multi-Sector Short Term Bond Fund, Senior Floating Rate Fund and Tax-Exempt Bond Fund)

Newfleet Asset Management, LLC

Daily with no delay

Subadviser (Low Volatility Fund)

Rampart Investment Management Company, LLC

Daily with no delay

Subadviser (EM Opportunities Fund, Foreign Opportunities Fund, Global Opportunities Fund and Greater European Fund)

Vontobel Asset Management, Inc.

Daily with no delay

Subadviser Trading Support (EM Opportunities Fund, Foreign Opportunities Fund, Global Opportunities Fund and Greater European Fund)

Northern Trust Corporation

Daily with no delay

Administrator

Virtus Fund Services, LLC

Daily with no delay

Distributor

VP Distributors, LLC

Daily with no delay

Custodian

JPMorgan Chase Bank, N.A.

Daily with no delay

Class Action Service Provider

Battea

Daily with no delay

Sub-Financial Agent

BNY Mellon Investment Servicing (US) Inc.

Daily with no delay

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Type of Service Provider

Name of Service Provider

Timing of Release of Portfolio Holdings
Information

Consultant (EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund)

Vestek

Fiscal quarter with 20 day delay

Consultant (Foreign Opportunities Fund)

Rogercasey

Monthly with four day delay

Reconciliation Firm for Subadviser (Kayne Anderson Rudnick) (EM Small-Cap Fund and International Small-Cap Fund)

Fiserve, Inc.

Daily with no delay

Middle Office for Subadviser (Duff & Phelps) (Global Infrastructure Fund, Global Real Estate Fund, International Real Estate Fund and Real Estate Fund), (Kayne Anderson Rudnick) (EM Small-Cap Fund and International Small-Cap Fund), (Rampart) (Low Volatility Fund)

SS&C, Inc.

Daily with no delay

Distributor (EM Opportunities Fund, Foreign Opportunities Fund, Real Estate Fund, Multi-Sector Short Term Bond Fund)

Morgan Stanley Smith Barney LLC

Monthly with four day delay

Portfolio Redistribution Firm (Foreign Opportunities Fund)

Thomson Financial LLC

Fiscal quarter with 20 day delay

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP

Annually, within 15 business days of end of fiscal year.

Performance Analytics Firm

FactSet Research Systems, Inc.

Daily with no delay

Back-end Compliance Monitoring System

Financial Tracking Technologies, LLC

Daily with no delay

Typesetting and Printing firm for Financial Reports

R.R. Donnelley & Sons Co.

Quarterly, within 15 days of end of reporting period.

Security Lending (as applicable)

Brown Brothers Harriman & Co.

Daily with no delay

Proxy Voting Service

Institutional Shareholder Services

Daily, weekly, monthly, quarterly depending on subadviser

Intermediary Selling Shares of the Fund

Merrill Lynch

Quarterly within 10 days of quarter end

Public Portfolio Holdings Information

Portfolio Redistribution Firms

Bloomberg, Standard & Poor’s and Thompson Reuters

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with 30-day delay or fiscal quarter with a 15-,30-, or 60-day delay.

Rating Agencies

Lipper Inc. and Morningstar

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with 30-day delay or fiscal quarter with a 15-,30-, or 60-day delay.

Virtus Public Web site

Virtus Investment Partners, Inc.

Various frequencies depending on the fund, which includes, but is not limited to: Monthly with 30-day delay or fiscal quarter with a 15-,30-, or 60-day delay.

These service providers are required to keep all non-public information confidential and are prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the Funds. There is no guarantee that the Funds’ policies on use and dissemination of holdings information will protect the Funds from the potential misuse of holdings by individuals or firms in possession of such information.

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Other Virtus Mutual Funds

In addition to the Funds of the Trust, the funds commonly referred to as “Virtus Mutual Funds” also include the series of Virtus Alternative Solutions Trust, Virtus Equity Trust and Virtus Retirement Trust, although the series of Virtus Alternative Solutions Trust are overseen by a different board of trustees than the Board. 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:

Class/Shares

Trust

Fund

Virtus Alternative Solutions Trust

Credit Opportunities Fund

Multi-Strategy Target Return Fund

Select MLP and Energy Fund

Strategic Income Fund

Virtus Equity Trust

Balanced Fund

Contrarian Value Fund

Growth & Income Fund

Mid-Cap Core Fund

Mid-Cap Growth 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

Virtus Retirement Trust

DFA 2015 Target Date Retirement Income Fund

DFA 2020 Target Date Retirement Income Fund

DFA 2025 Target Date Retirement Income Fund

DFA 2030 Target Date Retirement Income Fund

DFA 2035 Target Date Retirement Income Fund

DFA 2040 Target Date Retirement Income Fund

DFA 2045 Target Date Retirement Income Fund

DFA 2050 Target Date Retirement Income Fund

DFA 2055 Target Date Retirement Income Fund

DFA 2060 Target Date Retirement Income Fund

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MORE INFORMATION ABOUT FUND INVESTMENT STRATEGIES & RELATED RISKS

The following investment strategies and policies supplement each Fund’s investment strategies and policies set forth in the Funds' prospectuses. Some of the investment strategies and policies described below and in each Fund's prospectus set forth percentage limitations on a Fund’s investment in, or holdings of, certain types of investments. Unless otherwise required by law or stated in this SAI, compliance with these strategies and policies will be determined immediately after the acquisition of such investments by the Fund. Subsequent changes in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the Fund’s investment strategies and policies.To the extent that a Fund invests primarily in other funds, including ETFs, except as otherwise noted the following descriptions pertain to the underlying mutual funds in which such Fund invests. Generally, Alternatives Diversifier Fund, Herzfeld Fund and Low Volatility Fund and certain of the Trend Funds do not use these techniques directly. Each of those Funds pursues its investment objective(s) by investing its assets in underlying mutual funds and/or ETFs. Each underlying mutual fund will engage in certain investment techniques and practices to the extent permitted and consistent with the underlying mutual fund’s investment objective. The following is a description of key investment techniques, and their associated risks, of the underlying mutual funds in which the Alternatives Diversifier Fund, the Herzfeld Fund, the Low Volatility Fund and the applicable Trend Funds invest as of the date of this SAI. Please refer to the prospectus and SAI for each ETF and underlying mutual fund for specific details.

Throughout this section, the term “adviser” may be used to refer to a subadviser, if any, and the term the “Fund” may be used to refer to any Fund.

Investment Technique	Description and Risks	Fund-Specific Limitations
Commodities-Related Investing	Commodity-related companies may underperform the stock market as a whole. The value of securities issued by commodity-related companies may be affected by factors affecting a particular industry or commodity. The operations and financial performance of commodity-related companies may be directly affected by commodity prices, especially those commodity-related companies that own the underlying commodity. The stock prices of such companies may also experience greater price volatility than other types of common stocks. Securities issued by commodity-related companies are sensitive to changes in the supply and demand for, and thus the prices of, commodities. Volatility of commodity prices, which may lead to a reduction in production or supply, may also negatively impact the performance of commodity and natural resources companies that are solely involved in the transportation, processing, storing, distribution or marketing of commodities. Volatility of commodity prices may also make it more difficult for commodity-related companies to raise capital to the extent the market perceives that their performance may be directly or indirectly tied to commodity prices. Certain types of commodities instruments (such as commodity-linked notes) are subject to the risk that the counterparty to the instrument will not perform or will be unable to perform in accordance with the terms of the instrument. Exposure to commodities and commodities markets may subject the Fund to greater volatility than investments in traditional securities. No active trading market may exist for certain commodities investments, which may impair the ability of the Fund to sell or to realize the full value of such investments in the event of the need to liquidate such investments. In addition, adverse market conditions may impair the liquidity of actively traded commodities investments.
Debt Investing	Each Fund may invest in debt, or fixed income, securities. Debt, or fixed income, securities (which include corporate bonds, commercial paper, debentures, notes, government securities, municipal obligations, state- or state agency-issued obligations, obligations of foreign issuers, asset- or mortgage-backed securities, and other obligations) are used by issuers to borrow money and thus are debt obligations of the issuer. Holders of debt securities are creditors of the issuer, normally ranking ahead of holders of both common and preferred stock as to dividends or upon liquidation. The issuer usually pays a fixed, variable, or floating rate of interest and must repay the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	amount borrowed at the security’s maturity. Some debt securities, such as zero-coupon securities (discussed below), do not pay interest but may be sold at a deep discount from their face value. Yields on debt securities depend on a variety of factors, including the general conditions of the money, bond, and note markets, the size of a particular offering, the maturity date of the obligation, and the rating of the issue. Debt securities with longer maturities tend to produce higher yields and are generally subject to greater price fluctuations in 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 redeemed, converted, or exchanged. Convertible securities may have several unique investment characteristics such as (1) higher yields than common stocks, but lower yields than comparable nonconvertible securities, (2) a lesser degree of fluctuation in value than the underlying stock since they have fixed income characteristics and (3) the potential for capital appreciation if the market price of the underlying common stock increases. Before conversion, convertible securities have characteristics similar to nonconvertible debt securities. Convertible securities often rank senior to common stock in a corporation’s capital structure and, therefore, are often viewed as entailing less risk than the corporation’s common stock, although the extent to which this is true depends in large measure on the degree to which the convertible security sells above its value as a fixed income security. However, because convertible securities are often viewed by the issuer as future common stock, they are often subordinated to other senior securities and therefore are rated one category lower than the issuer’s nonconvertible debt obligations or preferred stock. A convertible security may be subject to redemption or conversion at the option of the issuer at a predetermined price. If a convertible security held by the Fund is called for redemption, the Fund could be required to permit the issuer to redeem the security and convert it to the underlying common stock. The Fund generally would invest in convertible securities for their favorable price characteristics and total return potential, and would normally not exercise an option to convert. The Fund might be more willing to convert such securities to common stock. A Fund’s subadviser will select only those convertible securities for which it believes (a) the underlying common stock is a suitable investment for the Fund and (b) a greater potential for total return exists by purchasing the convertible security because of its higher yield and/or favorable market valuation. However, the Fund may invest in convertible debt securities rated less than investment grade. Debt securities rated less than investment grade are commonly

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Investment Technique	Description and Risks	Fund-Specific Limitations
	referred to as “junk bonds.” (For information about debt securities rated less than investment grade, see “High-Yield/High-Risk Fixed Income Securities (Junk Bonds)” under “Debt Investing” in this section of the SAI; for additional information about ratings on debt obligations, see Appendix A to this SAI.)
Corporate Debt Securities	Each Fund may invest in debt securities issued by corporations, limited partnerships and other similar entities. A Fund’s investments in debt securities of domestic or foreign corporate issuers include bonds, debentures, notes and other similar corporate debt instruments, including convertible securities that meet the Fund’s minimum ratings criteria or if unrated are, in the Fund’s subadviser’s opinion, comparable in quality to corporate debt securities that meet those criteria. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies or to the value of commodities, such as gold.
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.
Exchange-Traded Notes (ETNs)	Generally, ETNs are senior, unsecured, unsubordinated debt securities whose returns are linked to the performance of a particular market benchmark or strategy minus applicable fees. ETNs are traded on an exchange during normal trading hours. However, investors can also hold the ETN until maturity. At maturity, the issuer pays to the investor a cash amount equal to the principal amount, subject to the day’s market benchmark or strategy factor. ETNs do not make periodic coupon payments or provide principal protection. ETNs are subject to credit risk, and the value of the ETN may drop due to a downgrade in the issuer’s credit rating, despite the underlying market benchmark or strategy remaining unchanged. The value of an ETN may also be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying assets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events that affect the referenced underlying asset. When a Fund invests in ETNs it will bear its proportionate share of any fees and expenses borne by the ETN. The Fund’s decision to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange, the issuer

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	may not be required to maintain the listing, and there can be no assurance that a secondary market will exist for an ETN. ETNs are also subject to tax risk. No assurance can be given that the IRS will accept, or a court will uphold, how a Fund characterizes and treats ETNs for tax purposes. Further, the IRS and Congress are considering proposals that would change the timing and character of income and gains from ETNs. An ETN that is tied to a specific market benchmark or strategy may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable market benchmark or strategy. Some ETNs that use leverage can, at times, be relatively illiquid and, thus, they may be difficult to purchase or sell at a fair price. Leveraged ETNs are subject to the same risks as other instruments that use leverage in any form. The market value of ETNs may differ from that of their market benchmark or strategy. This difference in price may be due to the fact that the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities, commodities or other components underlying the market benchmark or strategy that the ETN seeks to track. As a result, there may be times when an ETN trades at a premium or discount to its market benchmark or strategy.
High-Yield/High-Risk Fixed Income Securities (“Junk Bonds”)	Investments in securities rated “BB” or below by S&P or Fitch, or “Ba” or below by Moody’s generally provide greater income (leading to the name “high-yield” securities) and opportunity for capital appreciation than investments in higher quality securities, but they also typically entail greater price volatility, liquidity, and principal and income risk. These securities are regarded as predominantly speculative as to the issuer’s continuing ability to meet principal and interest payment obligations. Analysis of the creditworthiness of issuers of lower-quality debt securities may be more complex than for issuers of higher-quality debt securities. Interest-bearing securities typically experience appreciation when interest rates decline and depreciation when interest rates rise. The market values of low-rated securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates. Low-rated securities also tend to be more sensitive to economic conditions than higher-rated securities. As a result, they generally involve more credit risks than securities in the higher-rated categories. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of low-rated securities may experience financial stress and may not have sufficient revenues to meet their payment obligations. The issuer’s ability to service its debt obligations may also be adversely affected by specific corporate developments, the issuer’s inability to meet specific projected business forecasts or the unavailability of additional financing. The risk of loss due to default by an issuer of low-rated securities is generally considered to be significantly greater than issuers of higher-rated securities because such securities are usually unsecured and are often subordinated to other creditors. Further, if the issuer of a low-rated security defaulted, the applicable Fund might incur additional expenses in seeking recovery. Periods of economic uncertainty and changes would also generally result in increased volatility in the market prices of low-rated securities and thus in the applicable Fund’s NAV. Low-rated securities often contain redemption, call or prepayment provisions which permit the issuer of the securities containing such provisions to, at its discretion, redeem the securities. During periods of falling interest rates, issuers of low-rated securities are likely to

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	redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities or otherwise redeem them, the applicable Fund may have to replace the securities with a lower yielding security which would result in lower returns for the Fund. A Fund may have difficulty disposing of certain low-rated securities because there may be a thin trading market for such securities. Because not all dealers maintain markets in all low-rated securities, there is no established retail secondary market for many of these securities. The Funds anticipate that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a secondary trading market does exist, it is generally not as liquid as the secondary market for higher-rated securities. The lack of a liquid secondary market may have an adverse impact on the market price of the security, and accordingly, the NAV of a particular Fund and its ability to dispose of particular securities when necessary to meet its liquidity needs, or in response to a specific economic event, or an event such as a deterioration in the creditworthiness of the issuer. The lack of a liquid secondary market for certain securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its respective portfolio. Market quotations are generally available on many low-rated issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During periods of thin trading, the spread between bid and asked prices is likely to increase significantly. In addition, adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of low-rated securities, especially in a thinly-traded market. If a Fund experiences unexpected net redemptions, it may be forced to liquidate a portion of its portfolio securities without regard to their investment merits. Due to the limited liquidity of low-rated securities, the Fund may be forced to liquidate these securities at a substantial discount. Any such liquidation would reduce the Fund’s asset base over which expenses could be allocated and could result in a reduced rate of return for the Fund.
Interest Rate Environment Risk	In the wake of the financial crisis that began in 2007, the Federal Reserve System attempted to stabilize the U.S. economy and support the U.S. economic recovery by keeping the federal funds rate at or near zero percent. In addition, the Federal Reserve has purchased large quantities of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities on the open market (the “quantitative easing program”). The Federal Reserve has since increased the federal funds rate as of December 2015, however, the United States continues to experience historically low interest rate levels. A low interest rate environment may have an adverse impact on each Fund’s ability to provide a positive yield to its shareholders and pay expenses out of Fund assets because of the low yields from the Fund’s portfolio investments. However, continued economic recovery and the cessation of the quantitative easing program increase the risk that interest rates will rise in the near future and that the Funds will face a heightened level of interest rate risk. Federal Reserve policy changes may expose fixed-income and related markets to heightened volatility and may reduce liquidity for certain Fund investments, which could cause the value of a Fund’s investments and a Fund’s share price to decline or create difficulties for the Fund in disposing of investments. A Fund that invests in derivatives tied to fixed-income markets may be more substantially exposed to these risks than a Fund that does not invest in derivatives. A Fund could also be forced to liquidate its investments at disadvantageous times or prices, thereby adversely affecting the Fund. To the extent a Fund experiences high redemptions because of

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	these policy changes, the Fund may experience increased portfolio turnover, which will increase the costs that the Fund incurs and lower the Fund’s performance.
Inverse Floating Rate Obligations	Certain variable rate securities pay interest at a rate that varies inversely to prevailing short-term interest rates (sometimes referred to as inverse floaters). For example, upon reset the interest rate payable on a security may go down when the underlying index has risen. During periods when short-term interest rates are relatively low as compared to long-term interest rates, the Fund may attempt to enhance its yield by purchasing inverse floaters. Certain inverse floaters may have an interest rate reset mechanism that multiplies the effects of changes in the underlying index. While this form of leverage may increase the security’s yield, it may also increase the volatility of the security’s market value. Similar to other variable and floating rate obligations, effective use of inverse floaters requires skills different from those needed to select most portfolio securities. If movements in interest rates are incorrectly anticipated, a Fund holding these instruments could lose money and its NAV could decline.	No Fund will invest more than 5% of its assets in inverse floaters.
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 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. There is typically a limited amount of public information available about loans because loans normally are not registered with the SEC or any state securities commission or listed on any securities exchange. Certain of the loans in which a Fund may invest may not be considered “securities,” and therefore the Fund may not be entitled to rely on the anti-fraud protections of the federal securities laws with respect to those loans in the event of fraud or misrepresentation by a borrower. A Fund may come into possession of material, non-public information about a borrower as a result of the Fund’s ownership of a loan or other floating-rate instrument of the borrower. Because of prohibitions on trading in securities of issuers while in possession of material, non-public information, the Fund might be unable to enter into a transaction in a publicly-traded security of the borrower when it would otherwise be advantageous to do so. Loans trade in an unregulated inter-dealer or inter-bank secondary market. Purchases and sales of loans are generally subject to contractual restrictions that must be satisfied before a loan can be	The Tax-Exempt Bond Fund may not invest in loan participations and assignments.

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	bought or sold. These restrictions may (i) impede the Fund’s ability to buy or sell loans; (ii) negatively affect the transaction price; (iii) affect the counterparty credit risk borne by the Fund; (iv) impede the Fund’s ability to timely vote or otherwise act with respect to loans; and (v) expose the Fund to adverse tax or regulatory consequences. 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 maturities tend to produce higher yields and are generally subject to potentially greater capital appreciation and depreciation than obligations with shorter maturities and lower yields. The market prices of municipal securities usually vary, depending upon available yields. An increase in interest rates will generally reduce the value of portfolio investments, and a decline in interest rates will generally increase the value of portfolio investments. The ability of the Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of municipal securities in which the Fund invests to meet their obligations for the payment of interest and principal when due. The ratings of Moody’s and S&P represent their opinions as to the quality of municipal securities which they undertake to rate. Ratings are not absolute standards of quality; consequently, municipal securities with the same maturity, coupon, and rating may have different yields. There are variations in municipal securities, both within a particular classification and between classifications,

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	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.
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,

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	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	Each Fund may acquire participations in lease obligations or installment purchase contract obligations (hereinafter collectively called “lease obligations”) of municipal authorities or entities. Although lease obligations do not constitute general obligations of the municipality for which the municipality’s taxing power is pledged, a lease obligation may be backed by the municipality’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease obligations contain “non-appropriation” clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In addition to the “non-appropriation” risk, these securities represent a relatively new type of financing that has not yet developed the depth of marketability associated with more conventional bonds. In the case of a “non-appropriation” lease, the Fund’s ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property in the event foreclosure might prove difficult. The Fund’s subadviser will evaluate the credit quality of a municipal lease and whether it will be considered liquid. (See “Illiquid and Restricted Investments” in this section of the SAI for information regarding the implications of these investments being considered illiquid.)
Municipal Notes	Municipal notes generally are used to provide for short-term working capital needs and generally have maturities of one year or less. Municipal notes include bond anticipation notes, construction loan notes, revenue anticipation notes and tax anticipation notes.
Bond Anticipation Notes	Bond anticipation notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the notes.
Construction Loan Notes	Construction loan notes are sold to provide construction financing. After successful completion and acceptance, many projects receive permanent financing through FNMA or GNMA.
Revenue Anticipation Notes	Revenue anticipation notes are issued in expectation of receipt of other types of revenue, such as Federal revenues available under Federal revenue sharing programs.
Tax Anticipation Notes	Tax anticipation notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of various seasonal tax revenue, such as income, sales, use and business taxes, and are payable from these specific future taxes.
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.

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Participation on Creditors’ Committees	While the Funds do not invest in securities to exercise control over the securities’ issuers, each Fund may, from time to time, participate on committees formed by creditors to negotiate with the management of financially troubled issuers of securities held by the Fund. Such participation may subject the relevant Fund to expenses such as legal fees and may deem the Fund an “insider” of the issuer for purposes of the Federal securities laws, and expose the Fund to material non-public information of the issuer, and therefore may restrict the Fund’s ability to purchase or sell a particular security when it might otherwise desire to do so. Participation by a Fund on such committees also may expose the Fund to potential liabilities under the federal bankruptcy laws or other laws governing the rights of creditors and debtors. A Fund will participate on such committees only when the Fund’s subadviser believes that such participation is necessary or desirable to enforce the Fund’s rights as a creditor or to protect the value of securities held by the Fund.
Payable in Kind (“PIK”) Bonds	PIK bonds are obligations which provide that the issuer thereof may, at its option, pay interest on such bonds in cash or “in kind”, which means in the form of additional debt securities. Such securities benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of such cash. The Funds will accrue income on such investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the Funds’ distribution obligations. The market prices of PIK bonds generally are more volatile than the market prices of securities that pay interest periodically, and they are likely to respond to changes in interest rates to a greater degree than would otherwise similar bonds on which regular cash payments of interest are being made.
Ratings	The rating or quality of a debt security refers to a rating agency’s assessment of the issuer’s creditworthiness, i.e., its ability to pay principal and interest when due. Higher ratings indicate better credit quality, as rated by independent rating organizations such as Moody’s, S&P or Fitch, which publish their ratings on a regular basis. Appendix A provides a description of the various ratings provided for bonds (including convertible bonds), municipal bonds, and commercial paper. After a Fund purchases a debt security, the rating of that security may be reduced below the minimum rating acceptable for purchase by the Fund. A subsequent downgrade does not require the sale of the security, but the Fund’s subadviser will consider such an event in determining whether to continue to hold the obligation. To the extent that ratings established by Moody’s or S&P may change as a result of changes in such organizations or their rating systems, a Fund will invest in securities which are deemed by the Fund’s subadviser to be of comparable quality to securities whose current ratings render them eligible for purchase by the Fund. Credit ratings issued by credit rating agencies evaluate the safety of principal and interest payments of rated securities. They do not, however, evaluate the market-value risk and therefore may not fully 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.

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Sovereign Debt	Each Fund may invest in “sovereign debt,” which is issued or guaranteed by foreign governments (including countries, provinces and municipalities) or their agencies and instrumentalities. Sovereign debt may trade at a substantial discount from face value. The Funds may hold and trade sovereign debt of foreign countries in appropriate circumstances to participate in debt conversion programs. Emerging-market country sovereign debt involves a higher degree of risk than that of developed markets, is generally lower-quality debt, and is considered speculative in nature due, in part, to the extreme and volatile nature of debt burdens in such countries and because emerging market governments can be relatively unstable. The issuer or governmental authorities that control sovereign-debt repayment (“sovereign debtors”) may be unable or unwilling to repay principal or interest when due in accordance with the terms of the debt. A sovereign debtor’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash-flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy towards the IMF, and the political constraints to which the sovereign debtor may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearage on their debt. The commitment of these third parties to make such disbursements may be conditioned on the sovereign debtor’s implementation of economic reforms or economic performance and the timely service of the debtor’s obligations. The sovereign debtor’s failure to meet these conditions may cause these third parties to cancel their commitments to provide funds to the sovereign debtor, which may further impair the debtor’s ability or willingness to timely service its debts. In certain instances, the Funds may invest in sovereign debt that is in default as to payments of principal or interest. In the event that the Funds hold non-performing sovereign debt, the Funds may incur additional expenses in connection with any restructuring of the issuer’s obligations or in otherwise enforcing their rights thereunder.
Brady Bonds	Each Fund may invest a portion of its assets in certain sovereign debt obligations known as “Brady Bonds.” Brady Bonds are issued under the framework of the Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure their outstanding external indebtedness. The Brady Plan contemplates, among other things, the debtor nation’s adoption of certain economic reforms and the exchange of commercial bank debt for newly issued bonds. In restructuring its external debt under the Brady Plan framework, a debtor nation negotiates with its existing bank lenders as well as the World Bank or the IMF. The World Bank or IMF supports the restructuring by providing funds pursuant to loan agreements or other arrangements that enable the debtor nation to collateralize the new Brady Bonds or to replenish reserves used to reduce outstanding bank debt. Under these loan agreements or other arrangements with the World Bank or IMF, debtor nations have been required to agree to implement certain domestic monetary and fiscal reforms. The Brady Plan sets forth only general guiding principles for economic reform and debt reduction, emphasizing that solutions must be negotiated on a case-by-case basis between debtor nations and their creditors. Brady Bonds are often viewed as having three or four valuation components: (i) the collateralized repayment of principal at final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity (these uncollateralized amounts

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	constitute the “residual risk”). In light of the residual risk of Brady Bonds and, among other factors, the history of defaults with respect to commercial bank loans by public and private entities of countries issuing Brady Bonds, investments in Brady Bonds can be viewed as speculative.
Stand-by Commitments	Each Fund may purchase securities together with the right to resell them to the seller or a third party at an agreed-upon price or yield within specified periods prior to their maturity dates. Such a right to resell is commonly known as a stand-by commitment, and the aggregate price which a Fund pays for securities with a stand-by commitment may increase the cost, and thereby reduce the yield, of the security. The primary purpose of this practice is to permit the Fund to be as fully invested as practicable in municipal securities while preserving the necessary flexibility and liquidity to meet unanticipated redemptions. Stand-by commitments acquired by a Fund are valued at zero in determining the Fund’s NAV. Stand-by commitments involve certain expenses and risks, including the inability of the issuer of the commitment to pay for the securities at the time the commitment is exercised, non-marketability of the commitment, and differences between the maturity of the underlying security and the maturity of the commitment.
Strip Bonds	Strip bonds are debt securities that are stripped of their interest (usually by a financial intermediary) after the securities are issued. The market value of these securities generally fluctuates more in response to changes in interest rates than interest-paying securities of comparable maturity.
Tender Option Bonds	Tender option bonds are relatively long-term bonds that are coupled with the option to tender the securities to a bank, broker-dealer or other financial institution at periodic intervals and receive the face value of the bond. This investment structure is commonly used as a means of enhancing a security’s liquidity.
Variable and Floating Rate Obligations	Each Fund may purchase securities having a floating or variable rate of interest. These securities pay interest at rates that are adjusted periodically according to a specific formula, usually with reference to some interest rate index or market interest rate (the “underlying index”). The floating rate tends to decrease the security’s price sensitivity to changes in interest rates. These securities may carry demand features permitting the holder to demand payment of principal at any time or at specified intervals prior to maturity. Accordingly, as interest rates decrease or increase, the potential for capital appreciation or depreciation is less than for fixed-rate obligations. 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 other 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.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	When a Fund purchases a floating or variable rate demand instrument, the Fund’s subadviser will monitor, on an ongoing basis, the ability of the issuer to pay principal and interest on demand. The Fund’s right to obtain payment at par on a demand instrument could be affected by events occurring between the date the Fund elects to demand payment and the date payment is due that may affect the ability of the issuer of the instrument to make payment when due, except when such demand instrument permits same day settlement. To facilitate settlement, these same day demand instruments may be held in book entry form at a bank other than the Funds’ custodian subject to a sub-custodian agreement between the bank and the Funds’ custodian. The floating and variable rate obligations that the Funds may purchase also include certificates of participation in such obligations purchased from banks. A certificate of participation gives the Fund an undivided interest in the underlying obligations in the proportion that the Fund’s interest bears to the total principal amount of the obligation. Certain certificates of participation may carry a demand feature that would permit the holder to tender them back to the issuer prior to maturity. The income received on certificates of participation in tax-exempt municipal obligations constitutes interest from tax-exempt obligations. Each Fund will limit its purchases of floating and variable rate obligations to those of the same quality as it otherwise is allowed to purchase. Similar to fixed rate debt instruments, variable and floating rate instruments are subject to changes in value based on changes in prevailing market interest rates or changes in the issuer’s creditworthiness. A floating or variable rate instrument may be subject to a Fund’s percentage limitation on illiquid securities if there is no reliable trading market for the instrument or if the Fund may not demand payment of the principal amount within seven days. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Zero and Deferred Coupon Debt Securities	Each Fund may invest in debt obligations that do not make any interest payments for a specified period of time prior to maturity (“deferred coupon” bonds) or until maturity (“zero coupon” bonds). The nonpayment of interest on a current basis may result from the bond’s having no stated interest rate, in which case the bond pays only principal at maturity and is normally initially issued at a discount from face value. Alternatively, the bond may provide for a stated rate of interest, but provide that such interest is not payable until maturity, in which case the bond may initially be issued at par. The value to the investor of these types of bonds is represented by the economic accretion either of the difference between the purchase price and the nominal principal amount (if no interest is stated to accrue) or of accrued, unpaid interest during the bond’s life or payment deferral period. Because deferred and zero coupon bonds do not make interest payments for a certain period of time, they are generally purchased by a Fund at a deep discount and their value fluctuates more in response to interest rate changes than does the value of debt obligations that make current interest payments. The degree of fluctuation with interest rate changes is greater when the deferred period is longer. Therefore, when a Fund invests in zero or deferred coupon bonds, there is a risk that the value of the Fund’s shares may decline more as a result of an increase in interest rates than would be the case if the Fund did not invest in such bonds.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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	Each Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. Each Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each Fund may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or in pursuit of its investment objective(s) and policies (to seek to enhance returns). When a Fund invests in a derivative, the risks of loss of that derivative may be greater than the derivative’s cost. No Fund may use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. In addition to other considerations, a Fund’s ability to use derivative instruments may be limited by tax considerations. (See “Dividends, Distributions and Taxes” in this SAI.) Investments in derivatives may subject a Fund to special risks in addition to normal market fluctuations and other risks inherent in investment in securities. For example, a percentage of the Fund’s assets may be segregated to cover its obligations with respect to the derivative investment, which may make it more difficult for the Fund’s subadviser to meet redemption requests or other short-term obligations. Investments in derivatives in general are also subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case.
Commodity Interests	Certain of the derivative investment types permitted for the Funds may be considered commodity interests for purposes of the CEA and regulations approved by the CFTC. However, each Fund intends to limit the use of such investment types as required to qualify for exclusion or exemption from being considered a “commodity pool” or otherwise as a vehicle for trading in commodity interests under such regulations. As a result, except as otherwise noted below 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	As of the date of this SAI, each Fund intends to limit the use of such investment types as required to qualify for exclusion from being considered a “commodity pool” or otherwise as a vehicle for trading in commodity interests under such regulations, and each Fund has filed a notice of exclusion under CFTC Regulation 4.5 or exemption under

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Investment Technique	Description and Risks	Fund-Specific Limitations
	CFTC’s registration and regulation obligations, and the Fund’s use of these techniques and other instruments may be limited or restricted.	CFTC Regulation 4.13(a)(3).
Credit-linked Notes	Credit-linked notes are derivative instruments used to transfer credit risk. The performance of the notes is linked to the performance of the underlying reference obligation or reference portfolio (“reference entities”). The notes are usually issued by a special purpose vehicle that sells credit protection through a credit default swap agreement in return for a premium and an obligation to pay the transaction sponsor should a reference entity experience a credit event, such as bankruptcy. The special purpose vehicle invests the proceeds from the notes to cover its contingent obligation. Revenue from the investments and the money received as premium are used to pay interest to note holders. The main risk of credit linked notes is the risk of default to the reference obligation of the credit default swap. Should a default occur, the special purpose vehicle would have to pay the transaction sponsor, subordinating payments to the note holders. Credit linked notes also may not be liquid and may be subject to currency and interest rate risks as well.
Equity-linked Derivatives	Each Fund may invest in equity-linked derivative products, the performance of which is designed to correspond generally to the performance of a specified stock index or “basket” of stocks, or to a single stock. Investments in equity-linked derivatives involve the same risks associated with a direct investment in the types of securities such products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives will equal the underlying value of the securities purchased to replicate a particular investment or that such basket will replicate the investment. Investments in equity-linked derivatives may constitute investments in other investment companies. (See “Mutual Fund Investing” in this section of the SAI for information regarding the implications of a Fund investing in other investment companies.)
Eurodollar Instruments	The Funds may invest in Eurodollar instruments. Eurodollar instruments are dollar-denominated certificates of deposit and time deposits issued outside the U.S. capital markets by foreign branches of U.S. banks and by foreign banks. Eurodollar futures contracts enable purchasers to obtain a fixed rate for the lending of funds and sellers to obtain a fixed rate for borrowings. A Fund might use Eurodollar instruments to hedge against changes in interest rates or to enhance returns. Eurodollar obligations are subject to the same risks that pertain to domestic issuers, most notably income risk (and, to a lesser extent, credit risk, market risk, and liquidity risk). Additionally, Eurodollar obligations are subject to certain sovereign risks. One such risk is the possibility that a sovereign country might prevent capital, in the form of dollars, from flowing across its borders. Other risks include adverse political and economic developments, the extent and quality of government regulation of financial markets and institutions, the imposition of foreign withholding taxes, and expropriation or nationalization of foreign issuers. However, Eurodollar obligations will undergo the same type of credit analysis as domestic issuers in which a Fund invests.	The Tax-Exempt Bond Fund may not invest in Eurodollar instruments.
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	The Tax-Exempt Bond Fund may not invest in foreign currency forward contracts, futures and options.

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			forward and futures contracts include: (1) dependence on the Fund’s subadviser’s ability to correctly predict movements in the direction of securities prices and currency exchange rates; (2) imperfect correlation between the price of options and futures contracts and movements in the prices of the securities or currencies being hedged; (3) the fact that the skills needed to use these strategies are different from those needed to select portfolio securities; (4) the possible absence of a liquid secondary market for any particular instrument at any time; and (5) the possible need to defer closing out certain hedged positions to avoid adverse tax consequences. The Fund’s ability to enter into futures contracts is also limited by the requirements of the Code for qualification as a regulated investment company. (See the “Dividends, Distributions and Taxes” section of this SAI.) A Fund may engage in currency exchange transactions to protect against uncertainty in the level of future currency exchange rates. In addition, a Fund may write covered put and call options on foreign currencies for the purpose of increasing its return. A Fund may enter into contracts to purchase or sell foreign currencies at a future date (“forward contracts”) and purchase and sell foreign currency futures contracts. For certain hedging purposes, the Fund may also purchase exchange-listed and over-the-counter put and call options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the Fund the right to assume a short position in the futures contract until the expiration of the option. A put option on a currency gives the Fund the right to sell the currency at an exercise price until the expiration of the option. A call option on a futures contract gives the Fund the right to assume a long position in the futures contract until the expiration of the option. A call option on a currency gives the Fund the right to purchase the currency at the exercise price until the expiration of the option. When engaging in position hedging, a Fund enters into foreign currency exchange transactions to protect against a decline in the values of the foreign currencies in which its portfolio securities are denominated (or an increase in the values of currency for securities which the Fund expects to purchase, when the Fund holds cash or short-term investments). In connection with position hedging, the Fund may purchase put or call options on foreign currency and on foreign currency futures contracts and buy or sell forward contracts and foreign currency futures contracts. (A Fund may also purchase or sell foreign currency on a spot basis, as discussed in “Foreign Currency Transactions” under “Foreign Investing” in this section of the SAI.) The precise matching of the amounts of foreign currency exchange transactions and the value of the portfolio securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the dates the currency exchange transactions are entered into and the dates they mature. It is also impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, it may be necessary for a Fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security or securities being hedged is less than the amount of foreign currency the Fund is obligated to deliver and a decision is made to sell the security or securities and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security or securities if the market value of such security or securities exceeds the amount of foreign currency the Fund is obligated to deliver.

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	Hedging techniques do not eliminate fluctuations in the underlying prices of the securities which a Fund owns or intends to purchase or sell. They simply establish a rate of exchange which one can achieve at some future point in time. Additionally, although these techniques tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain which might result from the increase in value of such currency. A Fund may seek to increase its return or to offset some of the costs of hedging against fluctuations in currency exchange rates by writing covered put options and covered call options on foreign currencies. In that case, the Fund receives a premium from writing a put or call option, which increases the Fund’s current return if the option expires unexercised or is closed out at a net profit. A Fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written. A Fund’s currency hedging transactions may call for the delivery of one foreign currency in exchange for another foreign currency and may at times not involve currencies in which its portfolio securities are then denominated. A Fund’s subadviser will engage in such “cross hedging” activities when it believes that such transactions provide significant hedging opportunities for the Fund. Cross hedging transactions by a Fund involve the risk of imperfect correlation between changes in the values of the currencies to which such transactions relate and changes in the value of the currency or other asset or liability which is the subject of the hedge. Foreign currency forward contracts, futures and options may be traded on foreign exchanges. Such transactions may not be regulated as effectively as similar transactions in the United States; may not involve a clearing mechanism and related guarantees; and are subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities. The value of such positions also could be adversely affected by (i) other complex foreign political, legal and economic factors, (ii) lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the relevant Fund’s ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) lesser trading volume. The types of derivative foreign currency exchange transactions most commonly employed by the Funds are discussed below, although each Fund is also permitted to engage in other similar transactions to the extent consistent with the Fund’s investment limitations and restrictions.
Foreign Currency Forward Contracts	A foreign currency forward contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days (“term”) from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts are traded directly between currency traders (usually large commercial banks) and their customers. A Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily in an amount not less than the value of the Fund’s total assets committed to forward foreign currency exchange contracts entered into for the purchase of a foreign currency. If the value of the securities specifically designated declines, additional cash or securities will be

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	added so that the specifically designated amount is not less than the amount of the Fund’s commitments with respect to such contracts.
Foreign Currency Futures Transactions	Each Fund may use foreign currency futures contracts and options on such futures contracts. Through the purchase or sale of such contracts, a Fund may be able to achieve many of the same objectives attainable through the use of foreign currency forward contracts, but more effectively and possibly at a lower cost. Unlike forward foreign currency exchange contracts, foreign currency futures contracts and options on foreign currency futures contracts are standardized as to amount and delivery period and are traded on boards of trade and commodities exchanges. It is anticipated that such contracts may provide greater liquidity and lower cost than forward foreign currency exchange contracts. Purchasers and sellers of foreign currency futures contracts are subject to the same risks that apply to the buying and selling of futures generally. In addition, there are risks associated with foreign currency futures contracts similar to those associated with options on foreign currencies. (See “Foreign Currency Options” and “Futures Contracts and Options on Futures Contracts”, each in this sub-section of the SAI.) The Fund must accept or make delivery of the underlying foreign currency, through banking arrangements, in accordance with any U.S. or foreign restrictions or regulations regarding the maintenance of foreign banking arrangements by U.S. residents and may be required to pay any fees, taxes or charges associated with such delivery which are assessed in the issuing country. To the extent required to comply with SEC Release No. IC-10666, when entering into a futures contract or an option transaction, a Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the net amount of the Fund’s obligation. For foreign currency futures transactions, the prescribed amount will generally be the daily value of the futures contract, marked to market. Futures contracts are designed by boards of trade which are designated “contracts markets” by the CFTC. Futures contracts trade on contracts markets in a manner that is similar to the way a stock trades on a stock exchange and the boards of trade, through their clearing corporations, guarantee performance of the contracts. As of the date of this SAI, the Funds may invest in futures contracts under specified conditions without being regulated as commodity pools. However, under recently amended CFTC rules the Funds’ ability to maintain the exclusions/exemptions from the definition of commodity pool may be limited. (See “Commodity Interests” in this section of the SAI.)
Foreign Currency Options	A foreign currency option provides the option buyer with the right to buy or sell a stated amount of foreign currency at the exercise price at a specified date or during the option period. A call option gives its owner the right, but not the obligation, to buy the currency, while a put option gives its owner the right, but not the obligation, to sell the currency. The option seller (writer) is obligated to fulfill the terms of the option sold if it is exercised. However, either seller or buyer may close its position during the option period for such options any time prior to expiration. A call rises in value if the underlying currency appreciates. Conversely, a put rises in value if the underlying currency depreciates. While purchasing a foreign currency option can protect a Fund against an adverse movement in the value of a foreign currency, it does not limit the gain which might result from a favorable movement in the value of such currency. For example, if the Fund were holding

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	securities denominated in an appreciating foreign currency and had purchased a foreign currency put to hedge against a decline in the value of the currency, it would not have to exercise its put. Similarly, if the Fund had entered into a contract to purchase a security denominated in a foreign currency and had purchased a foreign currency call to hedge against a rise in the value of the currency but instead the currency had depreciated in value between the date of purchase and the settlement date, the Fund would not have to exercise its call but could acquire in the spot market the amount of foreign currency needed for settlement. The value of a foreign currency option depends upon the value of the underlying currency relative to the other referenced currency. As a result, the price of the option position may vary with changes in the value of either or both currencies and have no relationship to the investment merits of a foreign security, including foreign securities held in a “hedged” investment portfolio. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the use of foreign currency options, the Funds may be disadvantaged by having to deal in an odd lot market (generally consisting of transactions of less than $1 million) for the underlying foreign currencies at prices that are less favorable than for round lots. As in the case of other kinds of options, the use of foreign currency options constitutes only a partial hedge, and a Fund could be required to purchase or sell foreign currencies at disadvantageous exchange rates, thereby incurring losses. The purchase of an option on a foreign currency may not necessarily constitute an effective hedge against fluctuations in exchange rates and, in the event of rate movements adverse to the Fund’s position, the Fund may forfeit the entire amount of the premium plus related transaction costs. Options on foreign currencies written or purchased by a Fund may be traded on U.S. or foreign exchanges or over the counter. There is no systematic reporting of last sale information for foreign currencies traded over the counter or any regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely basis. Quotation information available is generally representative of very large transactions in the interbank market and thus may not reflect relatively smaller transactions (i.e., less than $1 million) where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market. To the extent that the options markets are closed while the markets for the underlying currencies remain open, significant price and rate movements may take place in the underlying markets that are not reflected in the options market. For additional information about options transactions, see “Options” under “Derivative Investments” in this section of the SAI.
Foreign Currency Warrants	Foreign currency warrants such as currency exchange warrants are warrants that entitle the holder to receive from the issuer an amount of cash (generally, for warrants issued in the United States, in U.S. dollars) that is calculated pursuant to a predetermined formula and based on the exchange rate between two specified currencies as of the exercise date of the warrant. Foreign currency warrants generally are exercisable upon their issuance and expire as of a specified date and time. Foreign currency warrants may be used to reduce the currency exchange risk assumed by purchasers of a security by, for example, providing for a supplemental payment in the event the U.S. dollar depreciates against the value of a major foreign currency such as the Japanese Yen or Euro. The formula used to determine the amount payable upon exercise of a foreign currency warrant may make the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 could be considerably in excess of the price that a commercial user of foreign currencies might pay in the interbank market for a comparable option involving larger amounts of foreign currencies. Foreign currency warrants are subject to significant foreign exchange risk, including risks arising from complex political or economic factors.
Performance Indexed Paper	Performance indexed paper is commercial paper the yield of which is linked to certain currency exchange rate movements. The yield to the investor on performance indexed paper is established at maturity as a function of spot exchange rates between the designated currencies as of or about the time (generally, the index maturity two days prior to maturity). The yield to the investor will be within a range stipulated at the time of purchase of the obligation, generally with a guaranteed minimum rate of return that is below, and a potential maximum rate of return that is above, market yields on commercial paper, with both the minimum and maximum rates of return on the investment corresponding to the minimum and maximum values of the spot exchange rate two business days prior to maturity.
Principal Exchange Rate Linked Securities (“PERLS”)	PERLS are debt obligations the principal on which is payable at maturity in an amount that may vary based on the exchange rate between the particular currencies at or about that time. The return on “standard” principal exchange rate linked securities is enhanced if the currency to which the security is linked appreciates against the base currency, and is adversely affected by increases in the exchange value of the base currency. “Reverse” PERLS are like the “standard” securities, except that their return is enhanced by increases in the value of the base currency and adversely impacted by increases in the value of other currency. Interest payments on the securities are generally made at rates that reflect the degree of currency risk assumed or given up by the purchaser of the notes (i.e., at relatively higher interest rates if the purchaser has assumed some of the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	currency exchange risk, or relatively lower interest rates if the issuer has assumed some of the currency exchange risk, based on the expectations of the current market). PERLS may in limited cases be subject to acceleration of maturity (generally, not without the consent of the holders of the securities), which may have an adverse impact on the value of the principal payment to be made at maturity.
Futures Contracts and Options on Futures Contracts	Each Fund may use interest rate, foreign currency, dividend, volatility or index futures contracts. An interest rate, foreign currency, dividend, volatility or index futures contract provides for the future sale by one party and purchase by another party of a specified quantity of a financial instrument, foreign currency, dividend basket or the cash value of an index at a specified price and time. A futures contract on an index is an agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to the difference between the value of the index at the close of the last trading day of the contract and the price at which the index contract was originally written. Although the value of an index might be a function of the value of certain specified securities, no physical delivery of these securities is made. A public market exists in futures contracts covering several indexes as well as a number of financial instruments and foreign currencies, and it is expected that other futures contracts will be developed and traded in the future. Interest rate and volatility futures contracts currently are traded in the United States primarily on the floors of the Chicago Board of Trade and the International Monetary Market of the Chicago Mercantile Exchange. Interest rate futures also are traded on foreign exchanges such as the London International Financial Futures Exchange and the Singapore International Monetary Exchange. Interest rate futures also are traded on foreign exchanges such as the London International Financial Futures Exchange and the Singapore International Monetary Exchange. Volatility futures also are traded on foreign exchanges such as Eurex. Dividend futures are also traded on foreign exchanges such as Eurex, NYSE Euronext Liffe, London Stock Exchange and the Singapore International Monetary Exchange. A Fund may purchase and write call and put options on futures. Futures options possess many of the same characteristics as options on securities and indexes discussed above. A futures option gives the holder the right, in return for the premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of option. Upon exercise of a call option, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. In the case of a put option, the opposite is true. Except as otherwise described in this SAI, the Funds will limit their use of futures contracts and futures options to hedging transactions and in an attempt to increase total return, in accordance with Federal regulations. The costs of, and possible losses incurred from, futures contracts and options thereon may reduce the Fund’s current income and involve a loss of principal. Any incremental return earned by the Fund resulting from these transactions would be expected to offset anticipated losses or a portion thereof. The Funds will only enter into futures contracts and futures options which are standardized and traded on a U.S. or foreign exchange, board of trade, or similar entity, or quoted on an automated quotation system. When a purchase or sale of a futures contract is made by a Fund, the Fund is required to deposit with its custodian (or broker, if legally permitted) a specified amount of cash or U.S. Government securities (“initial margin”). The margin required for a futures contract is set by the exchange on which the contract is traded and may be modified	Each of EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond 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, these Funds may not purchase or sell index futures if, immediately thereafter, the sum of the premiums paid for unexpired 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 of EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund is limited to investing no more than 25% of its net assets in index futures and options on index futures. These Funds may not purchase or sell futures contracts or purchase options on futures contracts if, immediately thereafter, more than one-third of the applicable Fund’s 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

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			during the term of the contract. The initial margin is in the nature of a performance bond or good faith deposit on the futures contract which is returned to the Fund upon termination of the contract, assuming all contractual obligations have been satisfied. The Funds expect to earn interest income on their initial margin deposits. A futures contract held by a Fund is valued daily at the official settlement price of the exchange on which it is traded. Each day the Fund pays or receives cash, called “variation margin,” equal to the daily change in value of the futures contract. This process is known as “marking to market.” Variation margin does not represent a borrowing or loan by the Fund but is instead a settlement between the Fund and the broker of the amount one would owe the other if the futures contract expired. In computing daily NAV, the Fund will mark to market its open futures positions. The Funds are also required to deposit and maintain margin with respect to put and call options on futures contracts written by them. Such margin deposits will vary depending on the nature of the underlying futures contract (and the related initial margin requirements), the current market value of the option, and other futures positions held by the relevant Fund. To the extent required to comply with SEC Release No. IC-10666, when entering into a futures contract or an option on a futures contract, a Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the prescribed amount. Generally, for cash-settled futures contracts the prescribed amount is the net amount of the Fund’s obligation, and for non-cash-settled futures contracts the prescribed about is the notional value of the reference obligation. Futures contracts are designed by boards of trade which are designated “contracts markets” by the CFTC. Futures contracts trade on contracts markets in a manner that is similar to the way a stock trades on a stock exchange and the boards of trade, through their clearing corporations, guarantee performance of the contracts. A Fund’s ability to claim an exclusion or exemption from the definition of a commodity pool may be limited when the Fund invests in futures contracts. (See “Commodity Interests” in this SAI.) The requirements of the Code for qualification as a regulated investment company also may limit the extent to which a Fund may enter into futures, futures options or forward contracts. (See the “Dividends, Distributions and Taxes” section of this SAI.) Although some futures contracts call for making or taking delivery of the underlying securities, generally these obligations are closed out prior to delivery by offsetting purchases or sales of matching futures contracts (same exchange, underlying security or index, and delivery month). If an offsetting purchase price is less than the original sale price, the Fund realizes a capital gain, or if it is more, the Fund realizes a capital loss. Conversely, if an offsetting sales price is more than the original purchase price, the Fund realizes a capital gain, or if it is less, the Fund realizes a capital loss. The transaction costs must also be included in these calculations. Positions in futures contracts and related options may be closed out only on an exchange which provides a secondary market for such contracts or options. The Fund will enter into an option or futures position only if there appears to be a liquid secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular option or futures contract at any specific time. Thus, it may not be possible to close out a futures or related option position. In the case of a futures position, in the event of adverse price movements the Fund would continue to be required to			options would exceed 5% of the value of the Fund’s total assets.

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			make daily margin payments. In this situation, if the Fund has insufficient cash to meet daily margin requirements it may have to sell portfolio securities to meet its margin obligations at a time when it may be disadvantageous to do so. In addition, the Fund may be required to take or make delivery of the securities underlying the futures contracts it holds. The inability to close out futures positions also could have an adverse impact on the Fund’s ability to hedge its portfolio effectively. There are several risks in connection with the use of futures contracts as a hedging device. While hedging can provide protection against an adverse movement in market prices, it can also limit a hedger’s opportunity to benefit fully from a favorable market movement. In addition, investing in futures contracts and options on futures contracts will cause the Fund to incur additional brokerage commissions and may cause an increase in the Fund’s portfolio turnover rate. The successful use of futures contracts and related options may also depend on the ability of the relevant Fund’s subadviser to forecast correctly the direction and extent of market movements, interest rates and other market factors within a given time frame. To the extent market prices remain stable during the period a futures contract or option is held by a Fund or such prices move in a direction opposite to that anticipated, the Fund may realize a loss on the transaction which is not offset by an increase in the value of its portfolio securities. Options and futures may also fail as a hedging technique in cases where the movements of the securities underlying the options and futures do not follow the price movements of the hedged portfolio securities. As a result, the Fund’s total return for the period may be less than if it had not engaged in the hedging transaction. The loss from investing in futures transactions is potentially unlimited. Utilization of futures contracts by a Fund involves the risk of imperfect correlation in movements in the price of futures contracts and movements in the price of the securities which are being hedged. If the price of the futures contract moves more or less than the price of the securities being hedged, the Fund will experience a gain or loss which will not be completely offset by movements in the price of the securities. It is possible that, where a Fund has sold futures contracts to hedge its portfolio against a decline in the market, the market may advance and the value of securities held in the Fund’s portfolio may decline. If this occurred, the Fund would lose money on the futures contract and would also experience a decline in value in its portfolio securities. Where futures are purchased to hedge against a possible increase in the prices of securities before the Fund is able to invest its cash (or cash equivalents) in securities (or options) in an orderly fashion, it is possible that the market may decline; if the Fund then determines not to invest in securities (or options) at that time because of concern as to possible further market decline or for other reasons, the Fund will realize a loss on the futures that would not be offset by a reduction in the price of the securities purchased. The market prices of futures contracts may be affected if participants in the futures market elect to close out their contracts through off-setting transactions rather than to meet margin deposit requirements. In such case, distortions in the normal relationship between the cash and futures markets could result. Price distortions could also result if investors in futures contracts opt to make or take delivery of the underlying securities rather than to engage in closing transactions because such action would reduce the liquidity of the futures market. In addition, from the point of view of speculators, because the deposit requirements in the futures markets are less onerous than margin requirements in the cash market, increased participation by speculators in the futures market could cause temporary price distortions. Due to the possibility of price distortions in the futures

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Investment Technique	Description and Risks	Fund-Specific Limitations
	market and because of the imperfect correlation between movements in the prices of securities and movements in the prices of futures contracts, a correct forecast of market trends may still not result in a successful hedging transaction. Compared to the purchase or sale of futures contracts, the purchase of put or call options on futures contracts involves less potential risk for the Fund because the maximum amount at risk is the premium paid for the options plus transaction costs. However, there may be circumstances when the purchase of an option on a futures contract would result in a loss to the Fund while the purchase or sale of the futures contract would not have resulted in a loss, such as when there is no movement in the price of the underlying securities. For additional information about options transactions, see “Options” under “Derivative Investments” in this section of the SAI.
Mortgage-Related and Other Asset-Backed Securities	Each Fund may purchase mortgage-related and other asset-backed securities, which collectively are securities backed by mortgages, installment contracts, credit card receivables or other financial assets. Asset-backed securities represent interests in “pools” of assets in which payments of both interest and principal on the securities are made periodically, thus in effect “passing through” such payments made by the individual borrowers on the assets that underlie the securities, net of any fees paid to the issuer or guarantor of the securities. The average life of asset-backed securities varies with the maturities of the underlying instruments, and the average life of a mortgage-backed instrument, in particular, is likely to be less than the original maturity of the mortgage pools underlying the securities as a result of mortgage prepayments, where applicable. For this and other reasons, an asset-backed security’s stated maturity may be different, and the security’s total return may be difficult to predict precisely. If an asset-backed security is purchased at a premium, a prepayment rate that is faster than expected will reduce yield to maturity, while a prepayment rate that is slower than expected will have the opposite effect of increasing yield to maturity. Conversely, if an asset-backed security is purchased at a discount, faster than expected prepayments will increase yield to maturity, while slower than expected prepayments will decrease yield to maturity. Prepayments of principal of mortgage-related securities by mortgagors or mortgage foreclosures affect the average life of the mortgage-related securities in the Fund’s portfolio. Mortgage prepayments are affected by the level of interest rates and other factors, including general economic conditions and the underlying location and age of the mortgage. In periods of rising interest rates, the prepayment rate tends to decrease, lengthening the average life of a pool of mortgage-related securities. The longer the remaining maturity of a security the greater the effect of interest rate changes will be. Changes in the ability of an issuer to make payments of interest and principal and in the market’s perception of its creditworthiness also affect the market value of that issuer’s debt securities. In periods of falling interest rates, the prepayment rate tends to increase, shortening the average life of a pool. Because prepayments of principal generally occur when interest rates are declining, it is likely that the Fund, to the extent that it retains the same percentage of debt securities, may have to reinvest the proceeds of prepayments at lower interest rates than those of its previous investments. If this occurs, that Fund’s yield will correspondingly decline. Thus, mortgage-related securities may have less potential for capital appreciation in periods of falling interest rates than other fixed income securities of comparable duration, although they may have a comparable risk of decline in market value in periods of rising interest rates. To the extent that the Fund purchases mortgage-related securities at a premium,	The Tax-Exempt Bond Fund may not invest in mortgage-backed securities.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	unscheduled prepayments, which are made at par, result in a loss equal to any unamortized premium. Duration is one of the fundamental tools used by a Fund's subadviser in managing interest rate risks including prepayment risks. Traditionally, a debt security’s “term to maturity” characterizes a security’s sensitivity to changes in interest rates. “Term to maturity,” however, measures only the time until a debt security provides its final payment, taking no account of prematurity payments. Most debt securities provide interest (“coupon”) payments in addition to a final (“par”) payment at maturity, and some securities have call provisions allowing the issuer to repay the instrument in full before maturity date, each of which affect the security’s response to interest rate changes. “Duration” therefore is generally considered a more precise measure of interest rate risk than “term to maturity.” Determining duration may involve a subadviser’s estimates of future economic parameters, which may vary from actual future values. Generally, fixed income securities with longer effective durations are more responsive to interest rate fluctuations than those with shorter effective durations. For example, if interest rates rise by 1%, the value of securities having an effective duration of three years will generally decrease by approximately 3%. Descriptions of some of the different types of mortgage-related and other asset-backed securities most commonly acquired by the Funds are provided below. In addition to those shown, other types of mortgage-related and asset-backed investments are, or may become, available for investment by the Funds.
Collateralized Mortgage Obligations (“CMOs”)	CMOs are hybrid instruments with characteristics of both mortgage-backed and mortgage pass-through securities. Interest and prepaid principal on a CMO are paid, in most cases, monthly. CMOs may be collateralized by whole mortgage loans but are more typically collateralized by portfolios of mortgage pass-through securities guaranteed by entities such as GNMA, FHLMC, or FNMA, and their income streams. CMOs are typically structured in multiple classes, each bearing a different stated maturity. Actual maturity and average life will depend upon the prepayment experience of the collateral. CMOs provide for a modified form of call protection through a de facto breakdown of the underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of principal received from the pool of underlying mortgages, including prepayments, is first returned to investors holding the shortest maturity class. Investors holding the longer maturity classes typically receive principal only after the first class has been retired. An investor may be partially guarded against a sooner than desired return of principal because of the sequential payments. FHLMC CMOs are debt obligations of FHLMC issued in multiple classes having different maturity dates and are secured by the pledge of a pool of conventional mortgage loans purchased by FHLMC. The amount of principal payable on each monthly payment date is determined in accordance with FHLMC’s mandatory sinking fund schedule. Sinking fund payments in the CMOs are allocated to the retirement of the individual classes of bonds in the order of their stated maturities. Payments of principal on the mortgage loans in the collateral pool in excess of the amount of FHLMC’s minimum sinking fund obligation for any payment date are paid to the holders of the CMOs as additional sinking-fund payments. Because of the “pass-through” nature of all principal payments received on the collateral pool in excess of FHLMC’s minimum sinking fund requirement, the rate at which principal of the CMOs is actually repaid is likely to be such that each class of bonds will be retired in advance of its

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 market currently may not have the liquidity of other more established securities trading in other markets. CMO residuals may be subject to certain restrictions on transferability, may be deemed illiquid and therefore subject to the Funds’ limitations on investment in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.)
Mortgage Pass-through Securities	Mortgage pass-through securities are interests in pools of mortgage loans, assembled and issued by various governmental, government-related, and private organizations. Unlike other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates, these securities provide a monthly payment consisting of both interest and principal payments. In effect, these payments are a “pass-through” of the monthly payments made by the individual borrowers on their residential or commercial mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Additional payments are caused by repayments of principal resulting from the sale of the underlying property, refinancing or foreclosure, net of fees or costs. “Modified pass-through” securities (such as securities issued by GNMA) entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of certain fees, at the scheduled payment dates regardless of whether or not the mortgagor actually makes the payment. The principal governmental guarantor of U.S. mortgage-related securities is GNMA. GNMA is authorized to guarantee, with the full faith and credit of the United States Government, the timely payment of principal and interest on securities issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of Federal Housing Administration insured or Veterans Administration guaranteed mortgages. Government-related guarantors whose obligations are not backed by the full faith and credit of the United States Government include FNMA and FHLMC. FNMA purchases conventional (i.e., not

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Investment Technique			Description and Risks			Fund-Specific Limitations
			insured or guaranteed by any government agency) residential mortgages from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. FHLMC issues Participation Certificates that represent interests in conventional mortgages from FHLMC’s national portfolio. FNMA and FHLMC guarantee the timely payment of interest and ultimate collection of principal on securities they issue, but the securities they issue are neither issued nor guaranteed by the United States Government. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/ or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Pools created by such non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government or agency guarantees of payments for such securities. However, timely payment of interest and principal of these pools may be supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. Such insurance and guarantees and the creditworthiness of the issuers thereof will be considered in determining whether a mortgage-related security meets a Fund’s investment quality standards. There can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. A Fund may buy mortgage-related securities without insurance or guarantees if, through an examination of the loan experience and practices of the originator/servicers and poolers, the Fund’s subadviser determines that the securities meet the Fund’s quality standards. Securities issued by certain private organizations may not be readily marketable and may therefore be subject to the Funds’ limitations on investments in illiquid securities. (See “Illiquid and Restricted Securities” in this section of the SAI.) Mortgage-backed securities that are issued or guaranteed by the U.S. Government, its agencies or instrumentalities, are not subject to the Funds’ industry concentration restrictions set forth in the “Investment Restrictions” section of this SAI by virtue of the exclusion from the test available to all U.S. Government securities. The Funds will take the position that privately-issued, mortgage-related securities, and other asset-backed 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 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.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 and are less likely to experience substantial prepayments. However, obligations such as credit card receivables are generally unsecured and the obligors are often entitled to protection under a number of consumer credit laws granting, among other things, rights to set off certain amounts owed on the credit cards, thus reducing the balance due. Other obligations that are secured, such as automobile receivables, may present issuers with difficulties in perfecting and executing on the security interests, particularly where the issuer allows the servicers of the receivables to retain possession of the underlying obligations, thus increasing the risk that recoveries on defaulted obligations may not be adequate to support payments on the securities.
Stripped Mortgage-backed Securities (“SMBS”)	SMBS are derivative multi-class mortgage securities. They may be issued by agencies or instrumentalities of the U.S. Government, or by private originators of, or investors in, mortgage loans. SMBS are usually structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. A common type of SMBS will have one class receiving some of the interest and most of the principal from the mortgage assets, while the other class will receive most of the interest and the remainder of the principal. In the most extreme case, one class will

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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.
Options	Each Fund may purchase or sell put and call options on securities, indices and other financial instruments. Options may relate to particular securities, foreign and domestic securities indices, financial instruments, volatility, credit default, foreign currencies or the yield differential between two securities. Such options may or may not be listed on a domestic or foreign securities exchange and may or may not be issued by the OCC. A call option for a particular security gives the purchaser of the option the right to buy, and a writer the obligation to sell, the underlying security at the stated exercise price before the expiration of the option, regardless of the market price of the security. A premium is paid to the writer by the purchaser in consideration for undertaking the obligation under the option contract. A put option for a particular security gives the purchaser the right to sell and a writer the obligation to buy the security at the stated exercise price before the expiration date of the option, regardless of the market price of the security. To the extent required to comply with SEC Release No. IC-10666, options written by a Fund will be covered and will remain covered as long as the Fund is obligated as a writer. A call option is “covered” if the Fund owns the underlying security or its equivalent covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration if such cash is segregated) upon conversion or exchange of other securities held in its portfolio. A call option is also covered if the Fund holds on a share-for-share or equal principal amount basis a call on the same security as the call written where the exercise price of the call held is equal to or less than the exercise price of the call written or greater than the exercise price of the call written if appropriate liquid assets representing the difference are segregated by the Fund. A put option is “covered” if the Fund maintains appropriate liquid securities with a value equal to the exercise price, or owns on a share-for-share or equal principal amount basis a put on the same security as the put written where the exercise price of the put held is equal to or greater than the exercise price of the put written. A Fund’s obligation to sell an instrument subject to a covered call option written by it, or to purchase an instrument subject to a secured put option written by it, may be terminated before the expiration of the	Options written by the Low Volatility Fund will not be required to be covered as described herein, except to the extent required to comply with SEC Release No. IC-10666.

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Investment Technique			Description and Risks			Fund-Specific Limitations
			option by the Fund’s execution of a closing purchase transaction. This means that a Fund buys an option of the same series (i.e., same underlying instrument, exercise price and expiration date) as the option previously written. Such a purchase does not result in the ownership of an option. A closing purchase transaction will ordinarily be effected to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The cost of such a closing purchase plus related transaction costs may be greater than the premium received upon the original option, in which event the Fund will experience a loss. There is no assurance that a liquid secondary market will exist for any particular option. A Fund that has written an option and is unable to effect a closing purchase transaction will not be able to sell the underlying instrument (in the case of a covered call option) or liquidate the segregated assets (in the case of a secured put option) until the option expires or the optioned instrument is delivered upon exercise. The Fund will be subject to the risk of market decline or appreciation in the instrument during such period. To the extent required to comply with SEC Release No. IC-10666, when entering into an option transaction, a Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily equal to the prescribed amount. For options transactions, the prescribed amount will generally be the market value of the underlying instrument but will not be less than the exercise price. Options purchased are recorded as an asset and written options are recorded as liabilities to the extent of premiums paid or received. The amount of this asset or liability will be subsequently marked-to-market to reflect the current value of the option purchased or written. The current value of the traded option is the last sale price or, in the absence of a sale, the current bid price. If an option purchased by a Fund expires unexercised, the Fund will realize a loss equal to the premium paid. If a Fund enters into a closing sale transaction on an option purchased by it, the Fund will realize a gain if the premium received by the Fund on the closing transaction is more than the premium paid to purchase the option, or a loss if it is less. If an option written by a Fund expires on the stipulated expiration date or if a Fund enters into a closing purchase transaction, it will realize a gain (or loss if the cost of a closing purchase transaction exceeds the net premium received when the option is sold), and the liability related to such option will be eliminated. If an option written by a Fund is exercised, the proceeds of the sale will be increased by the net premium originally received and the Fund will realize a gain or loss. Options trading is a highly specialized activity that entails more complex and potentially greater than ordinary investment risk. Options may be more volatile than the underlying instruments and, therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves. There are several other risks associated with options. For example, there are significant differences among the securities, currency, volatility, credit default and options markets that could result in an imperfect correlation among these markets, causing a given transaction not to achieve its objectives. In addition, a liquid secondary market for particular options, whether traded over-the-counter or on an exchange, may be absent for reasons that include the following: there may be insufficient trading interest in certain options; restrictions may be imposed by an exchange on opening

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 on the “spread,” or yield differential, between two fixed income securities, in transactions referred to as “yield curve” options. Options on indexes and yield curve options provide the holder with the right to make or receive a cash settlement upon exercise of the option. With respect to options on indexes, the amount of the settlement will equal the difference between the closing price of the index at the time of exercise and the exercise price of the option expressed in dollars, times a specified multiple. With respect to yield curve options, the amount of the settlement will equal the difference between the yields of designated securities. With respect to yield curve options, a call or put option is covered if a Fund holds another call or put, respectively, on the spread between the same two securities and maintains in a segregated account liquid assets sufficient to cover the Fund’s net liability under the two options. Therefore, the Fund’s liability for such a covered option is generally limited to the difference between the amount of the Fund’s liability under the option it wrote less the value of the option it holds. A Fund may also cover yield curve options in such other manner as may be in accordance with the requirements of the counterparty with which the option is traded and applicable laws and regulations. The trading of these types of options is subject to all of the risks associated with the trading of other types of options. In addition, however, yield curve options present risk of loss even if the yield of one of the underlying securities remains constant, if the spread moves in a direction or to an extent which was not anticipated.
Reset Options	In certain instances, a Fund may purchase or write options on U.S. Treasury securities, which provide for periodic adjustment of the strike price and may also provide for the periodic adjustment of the premium during the term of each such option. Like other types of options, these transactions, which may be referred to as “reset” options or “adjustable strike” options grant the purchaser the right to purchase (in the case of a call) or sell (in the case of a put), a specified type of U.S. Treasury security at any time up to a stated expiration date (or, in certain instances, on such date). In contrast to other types of options, however, the price at which the underlying security may be purchased

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Investment Technique	Description and Risks	Fund-Specific Limitations
	or sold under a “reset” option is determined at various intervals during the term of the option, and such price fluctuates from interval to interval based on changes in the market value of the underlying security. As a result, the strike price of a “reset” option, at the time of exercise, may be less advantageous than if the strike price had been fixed at the initiation of the option. In addition, the premium paid for the purchase of the option may be determined at the termination, rather than the initiation, of the option. If the premium for a reset option written by a Fund is paid at termination, the Fund assumes the risk that (i) the premium may be less than the premium which would otherwise have been received at the initiation of the option because of such factors as the volatility in yield of the underlying Treasury security over the term of the option and adjustments made to the strike price of the option, and (ii) the option purchaser may default on its obligation to pay the premium at the termination of the option. Conversely, where a Fund purchases a reset option, it could be required to pay a higher premium than would have been the case at the initiation of the option.
Swaptions	A Fund may enter into swaption contracts, which give the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date. Over-the-counter swaptions, although providing greater flexibility, may involve greater credit risk than exchange-traded options as they are not backed by the clearing organization of the exchanges where they are traded, and as such, there is a risk that the seller will not settle as agreed. A Fund’s financial liability associated with swaptions is linked to the marked-to-market value of the notional underlying investments. Purchased swaption contracts are exposed to a maximum loss equal to the price paid for the option/swaption (the premium) and no further liability. Written swaptions, however, give the right of potential exercise to a third party, and the maximum loss to the Fund in the case of an uncovered swaption is unlimited.
Swap Agreements	Each Fund may enter into swap agreements on, among other things, interest rates, indices, securities and currency exchange rates. A Fund’s subadviser may use swaps in an attempt to obtain for the Fund a particular desired return at a lower cost to the Fund than if the Fund had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index. The “notional amount” of the swap agreement is only a fictive basis on which to calculate the obligations the parties to a swap agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will generally be equal only to the amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the “net amount”). A Fund’s obligations under a swap agreement will be accrued daily on the Fund’s accounting records (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by specifically designating on the accounting records of the Fund liquid assets to avoid leveraging of the Fund’s portfolio.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 interests for purposes of the CEA. (See “Commodity Interests” in this section of the SAI for additional information regarding the implications of investments being considered commodity interests under the CEA.) Recently, the SEC and the CFTC have developed rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act to create a new, comprehensive regulatory framework for swap transactions. Under the new regulations, certain swap transactions will be required to be executed on a regulated trading platform and cleared through a derivatives clearing organization. Additionally, the new regulations impose other requirements on the parties entering into swap transactions, including requirements relating to posting margin, and reporting and documenting swap transactions. A Fund engaging in swap transactions may incur additional expenses as a result of these new regulatory requirements. The Adviser is continuing to monitor the implementation of the new regulations and to assess their impact on the Funds.
Credit Default Swap Agreements	Each Fund may enter into credit default swap agreements. A credit default swap is a bilateral financial contract in which one party (the protection buyer) pays a periodic fee in return for a contingent payment by the protection seller following a credit event of a reference issuer. The protection buyer must either sell particular obligations issued by the reference issuer for its par value (or some other designated reference or strike price) when a credit event occurs or receive a cash settlement based on the difference between the market price and such reference price. A credit event is commonly defined as bankruptcy, insolvency, receivership, material adverse restructuring of debt, or failure to meet payment obligations when due. A Fund may be either the buyer or seller in the transaction. If a Fund is a buyer and no event of default occurs, the Fund loses its investment and recovers nothing; however, if an event of default occurs, the Fund receives full notional value for a reference obligation that may have little or no value. As a seller, a Fund receives a periodic fee throughout the term of the contract, provided there is no default event; if an event of default occurs, the Fund must pay the buyer the full notional value of the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	reference obligation. The value of the reference obligation received by the Fund as a seller, coupled with the periodic payments previously received, may be less than the full notional value the Fund pays to the buyer, resulting in a loss of value to the Fund. As with other swaps, when a Fund enters into a credit default swap agreement, to the extent required by applicable law and regulation the Fund will specifically designate on its accounting records any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily, equal to the Fund’s net exposure under the swap (the “Segregated Assets”). Generally, the minimum cover amount for a swap agreement is the amount owed by the Fund, if any, on a daily mark-to-market basis. With respect to swap contracts that provide for the netting of payments, the net amount of the excess, if any, of the Fund’s obligations over its entitlements with respect to each swap contract will be accrued on a daily basis and an amount of Segregated Assets having an aggregate market value at least equal to the accrued excess will be maintained to cover the transactions in accordance with SEC positions. With respect to swap contracts that do not provide for the netting of payments by the counterparties, the full notional amount for which the Fund is obligated under the swap contract with respect to each swap contract will be accrued on a daily basis and an amount of Segregated Assets having an aggregate market value at least equal to the accrued full notional value will be maintained to cover the transactions in accordance with SEC positions. When the Fund sells protection on an individual credit default swap, upon a credit event, the Fund may be obligated to pay the cash equivalent value of the asset. Therefore, the cover amount will be the notional value of the underlying credit. With regard to selling protection on an index (CDX), as a practical matter, the Fund would not be required to pay the full notional amount of the index; therefore, only the amount owed by the Fund, if any, on a daily mark-to-market basis is required as cover. Credit default swaps involve greater risks than if the Fund had invested in the reference obligation directly. In addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risks. A Fund will enter into swap agreements only with counterparties deemed creditworthy by the Fund’s subadviser.
Dividend Swap Agreements	A dividend swap agreement is a financial instrument where two parties contract to exchange a set of future cash flows at set dates in the future. One party agrees to pay the other the future dividend flow on a stock or basket of stocks in an index, in return for which the other party gives the first call options. Dividend swaps generally are traded over the counter rather than on an exchange.
Inflation Swap Agreements	Inflation swap agreements are contracts in which one party agrees to pay the cumulative percentage increase in a price index (e.g., the Consumer Price Index with respect to CPI swaps) over the term of the swap (with some lag on the inflation index), while the other pays a compounded fixed rate. Inflation swap agreements may be used by a Fund to hedge the inflation risk associated with non-inflation indexed investments, thereby creating “synthetic” inflation-indexed investments. One factor that may lead to changes in the values of inflation swap agreements is a change in real interest rates, which are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, which may lead to a decrease in value of an inflation swap agreement.

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Investment Technique	Description and Risks	Fund-Specific Limitations
Total Return Swap Agreements	“Total return swap” is the generic name for any non-traditional swap where one party agrees to pay the other the “total return” of a defined underlying asset, usually in return for receiving a stream of cash flows based upon an agreed rate. A total return swap may be applied to any underlying asset but is most commonly used with equity indices, single stocks, bonds and defined portfolios of loans and mortgages. A total return swap is a mechanism for the user to accept the economic benefits of asset ownership without utilizing the balance sheet. The other leg of the swap, which is often LIBOR, is spread to reflect the non-balance sheet nature of the product. Total return swaps can be designed with any underlying asset agreed between the two parties. No notional amounts are exchanged with total return swaps.
Variance and Correlation Swap Agreements	Variance swap agreements are contracts in which two parties agree to exchange cash payments based on the difference between the stated level of variance and the actual variance realized on an underlying asset or index. “Actual variance” as used here is defined as the sum of the square of the returns on the reference asset or index (which in effect is a measure of its “volatility”) over the length of the contract term. In other words, the parties to a variance swap can be said to exchange actual volatility for a contractually stated rate of volatility. Correlation swap agreements are contracts in which two parties agree to exchange cash payments based on the differences between the stated and the actual correlation realized on the underlying equity securities within a given equity index. “Correlation” as used here is defined as the weighted average of the correlations between the daily returns of each pair of securities within a given equity index. If two assets are said to be closely correlated, it means that their daily returns vary in similar proportions or along similar trajectories. A Fund may enter into variance or correlation swaps in an attempt to hedge equity market risk or adjust exposure to the equity markets.
Equity Securities	The Funds may invest in equity securities. Equity securities include common stocks, preferred stocks and preference stocks; securities such as bonds, warrants or rights that are convertible into stocks; and depositary receipts for those securities. Common stockholders are the owners of the company issuing the stock and, accordingly, usually have the right to vote on various corporate governance matters such as mergers. They are not creditors of the company, but rather, in the event of liquidation of the company, would be entitled to their pro rata shares of the company’s assets after creditors (including fixed income security holders) and, if applicable, preferred stockholders are paid. Preferred stock is a class of stock having a preference over common stock as to dividends or upon liquidation. A preferred stockholder is a shareholder in the company and not a creditor of the company as is a holder of the company’s fixed income securities. Dividends paid to common and preferred stockholders are distributions of the earnings or other surplus of the company and not interest payments, which are expenses of the company. Equity securities owned by the Fund may be traded in the over-the-counter market or on a securities exchange and may not be traded every day or in the volume typical of securities traded on a major U.S. national securities exchange. As a result, disposition by the Fund of a portfolio security to meet redemptions by shareholders or otherwise may require the Fund to sell the security at less than the reported value of the security, to sell during periods when disposition is not desirable, or to make many small sales over a lengthy period of time. The market value of all securities, including equity securities, is based upon the market’s perception of value and not necessarily the book value of an issuer or other objective measure of a company’s worth.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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.
Securities of Small and Mid Capitalization Companies	While small and medium-sized issuers in which a Fund invests may offer greater opportunities for capital appreciation than larger market capitalization issuers, investments in such companies may involve greater risks and thus may be considered speculative. For example, smaller companies may have limited product lines, markets or financial resources, or they may be dependent on a limited management group. In addition, many small and mid-capitalization company stocks trade less frequently and in smaller volume, and may be subject to more abrupt or erratic price movements, than stocks of larger companies. The securities of small and mid-capitalization companies may also be more sensitive to market changes than the securities of larger companies. When a Fund invests in small or mid-capitalization companies, these factors may result in above-average fluctuations in the NAV of the Fund’s shares. Therefore, a Fund investing in such securities should be considered as a long-term investment and not as a vehicle for seeking short-term profits. Similarly, an investment in a Fund solely investing in such securities should not be considered a complete investment program. Market capitalizations of companies in which the Funds invest are determined at the time of purchase.
Unseasoned Companies	As a matter of operating policy, each Fund may invest to a limited extent in securities of unseasoned companies and new issues. The Adviser regards a company as unseasoned when, for example, it is relatively new to, or not yet well established in, its primary line of business. Such companies generally are smaller and younger than companies whose shares are traded on the major stock exchanges. Accordingly, their shares are often traded over-the-counter and their share prices may be more volatile than those of larger, exchange-listed companies. Generally a Fund will not invest more than 5% of its total assets in securities of any one company with a record of fewer than three years’ continuous operation (including that of predecessors).
Foreign Investing	The Funds may invest in a broad range of securities of foreign issuers, including equity, debt and convertible securities and foreign government securities. The Funds may purchase the securities of issuers from various countries, including countries commonly referred to as “emerging markets.” The Funds may also invest in domestic securities denominated in foreign currencies. Investing in the securities of foreign companies involves special risks and considerations not typically associated with investing in U.S. companies. These include differences in accounting, auditing and financial reporting standards, generally higher commission rates on foreign portfolio transactions, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investments in foreign countries, and potential restrictions on the flow of international capital. Foreign issuers may become subject to sanctions imposed by the United States or another country, which could result in the immediate freeze of the foreign issuers’ assets or securities. The imposition of such sanctions could impair the market	The Emerging Markets Opportunities Fund may invest up to 10% of its total assets in dollar-denominated foreign equity and debt securities. The Low Duration Income Fund (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

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Investment Technique	Description and Risks	Fund-Specific Limitations
	value of the securities of such foreign issuers and limit a Fund’s ability to buy, sell, receive or deliver the securities. Additionally, dividends payable on foreign securities may be subject to foreign taxes withheld prior to distribution. Foreign securities often trade with less frequency and volume than domestic securities and therefore may exhibit greater price volatility. Changes in foreign exchange rates will affect the value of those securities which are denominated or quoted in currencies other than the U.S. dollar. Many of the foreign securities held by a Fund will not be registered with, nor will the issuers thereof be subject to the reporting requirements of, the SEC. Accordingly, there may be less publicly available information about the securities and about the foreign company or government issuing them than is available about a domestic company or government entity. Moreover, individual foreign economies may differ favorably or unfavorably from the United States economy in such respects as growth of Gross National Product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions. Finally, the Funds may encounter difficulty in obtaining and enforcing judgments against issuers of foreign securities. Securities of U.S. issuers denominated in foreign currencies may be less liquid and their prices more volatile than securities issued by domestic issuers and denominated in U.S. dollars. In addition, investing in securities denominated in foreign currencies often entails costs not associated with investment in U.S. dollar-denominated securities of U.S. issuers, such as the cost of converting foreign currency to U.S. dollars, higher brokerage commissions, custodial expenses and other fees. Non-U.S. dollar denominated securities may be subject to certain withholding and other taxes of the relevant jurisdiction, which may reduce the yield on the securities to the Funds and which may not be recoverable by the Funds or their investors. The Trust may use an eligible foreign custodian in connection with its purchases of foreign securities and may maintain cash and cash equivalents in the care of a foreign custodian. The amount of cash or cash equivalents maintained in the care of eligible foreign custodians will be limited to an amount reasonably necessary to effect the Trust’s foreign securities transactions. The use of a foreign custodian invokes considerations which are not ordinarily associated with domestic custodians. These considerations include the possibility of expropriations, restricted access to books and records of the foreign custodian, inability to recover assets that are lost while under the control of the foreign custodian, and the impact of political, social or diplomatic developments. Settlement procedures relating to the Funds’ investments in foreign securities and to the Funds’ foreign currency exchange transactions may be more complex than settlements with respect to investments in debt or equity securities of U.S. issuers, and may involve certain risks not present in the Funds’ domestic investments. For example, settlement of transactions involving foreign securities or foreign currency may occur within a foreign country, and a Fund may be required to accept or make delivery of the underlying securities or currency in conformity with any applicable U.S. or foreign restrictions or regulations, and may be required to pay any fees, taxes or charges associated with such delivery. Such investments may also involve the risk that an entity involved in the settlement may not meet its obligations. Settlement procedures in many foreign countries are less established than those in the United States, and some foreign country settlement periods can be significantly longer than those in the United States.	pay interest in U.S. dollars.
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	The Tax-Exempt Bond Fund may not invest in Depositary Receipts.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	underlying securities issued by a foreign corporation. EDRs, which are sometimes referred to as CDRs, are issued in Europe typically by foreign banks and trust companies and evidence ownership of either foreign or domestic securities. GDRs are similar to EDRs and are designed for use in several international financial markets. Generally, ADRs and ADSs in registered form are designed for use in United States securities markets and EDRs in bearer form are designed for use in European securities markets. For purposes of a Fund’s investment policies, its investments in ADRs, ADSs, GDRs and EDRs will be deemed to be investments in the underlying foreign securities. Depositary Receipts may be issued pursuant to sponsored or unsponsored programs. In sponsored programs, an issuer has made arrangements to have its securities traded in the form of Depositary Receipts. In unsponsored programs, the issuer may not be directly involved in the creation of the program. Although regulatory requirements with respect to sponsored and unsponsored programs are generally similar, in some cases it may be easier to obtain financial information from an issuer that has participated in the creation of a sponsored program. Accordingly, there may be less information available regarding issuers of securities underlying unsponsored programs and there may not be a correlation between such information and the market value of the Depositary Receipts. For purposes of the Fund’s investment policies, investments in Depositary Receipts will be deemed to be investments in the underlying securities. Thus, a Depositary Receipt representing ownership of common stock will be treated as common stock. Depositary Receipts are generally subject to the same sort of risks as direct investments in a foreign country, such as currency risk, political and economic risk, and market risk, because their values generally depend on the performance of a foreign security denominated in its home currency. (The risks of foreign investing are addressed above in this section of the SAI under the heading “Foreign Investing.”) In addition to risks associated with the underlying portfolio of securities, receipt holders also must consider credit standings of the custodians and broker/dealer sponsors. The receipts are not registered with the SEC and qualify as Rule 144A securities which may make them more difficult and costly to sell. (For information about Rule 144A securities, see “Illiquid and Restricted Securities” in this section of the SAI.)
Emerging Market Securities	The Funds may invest in countries or regions with relatively low gross national product per capita compared to the world’s major economies, and in countries or regions with the potential for rapid economic growth (emerging markets). Emerging markets will include any country: (i) having an “emerging stock market” as defined by the International Finance Corporation; (ii) with low-to-middle-income economies according to the World Bank; (iii) listed in World Bank publications as developing; or (iv) determined by the adviser to be an emerging market as defined above. Certain emerging market countries are either comparatively underdeveloped or are in the process of becoming developed and may consequently be economically dependent on a relatively few or closely interdependent industries. A high proportion of the securities of many emerging market issuers may also be held by a limited number of large investors trading significant blocks of securities. While a Fund’s subadviser will strive to be sensitive to publicized reversals of economic conditions, political unrest and adverse changes in trading status, unanticipated political and social developments may affect the values of the Fund’s investments in such countries and the availability of additional investments in such countries.

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	The risks of investing in foreign securities may be intensified in the case of investments in emerging markets. Securities of many issuers in emerging markets may be less liquid and more volatile than securities of comparable domestic issuers. Emerging markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion of the assets of a Fund is uninvested and no return is earned thereon. The inability of a Fund to make intended security purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result either in losses to the Fund due to subsequent declines in value of portfolio securities or, if a Fund has entered into a contract to sell the security, in possible liability to the purchaser. Securities prices in emerging markets can be significantly more volatile than in the more developed nations of the world, reflecting the greater uncertainties of investing in less established markets and economies. In particular, countries with emerging markets may have relatively unstable governments, present the risk of nationalization of businesses, restrictions on foreign ownership, or prohibitions of repatriation of assets, and may have less protection of property rights than more developed countries. Certain emerging markets may require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, a country could impose temporary restrictions on foreign capital remittances, whether because deterioration occurs in an emerging market’s balance of payments or for other reasons. The Funds could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as by the application to the Funds of any restrictions on investments. Investments in certain foreign emerging market debt obligations may be restricted or controlled to varying degrees. These restrictions or controls may at times preclude investment in certain foreign emerging market debt obligations and increase the expenses of the Funds.
Foreign Currency Transactions	When investing in securities denominated in foreign currencies, the Funds will be subject to the additional risk of currency fluctuations. An adverse change in the value of a particular foreign currency as against the U.S. dollar, to the extent that such change is not offset by a gain in other foreign currencies, will result in a decrease in the Fund’s assets. Any such change may also have the effect of decreasing or limiting the income available for distribution. Foreign currencies may be affected by revaluation, adverse political and economic developments, and governmental restrictions. Further, no assurance can be given that currency exchange controls will not be imposed on any particular currency at a later date. As a result of its investments in foreign securities, a Fund may receive interest or dividend payments, or the proceeds of the sale or redemption of such securities, in the foreign currencies in which such securities are denominated. In that event, the Fund may convert such currencies into dollars at the then current exchange rate. Under certain circumstances, however, such as where the Fund’s subadviser believes that the applicable rate is unfavorable at the time the currencies are received or the Fund’s subadviser anticipates, for any other reason, that the exchange rate will improve, the Fund may hold such currencies for an indefinite period of time.

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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.
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

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	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 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 marketable, such as over-the-counter options, and repurchase agreements not entitling the holder to payment of principal in seven days. Such securities may offer higher yields than comparable publicly traded securities, and they also may incur higher risks. Repurchase agreements, reverse repurchase agreements and time deposits that do not provide for payment to the Fund within seven days after notice or which have a term greater than seven days are deemed illiquid securities for this purpose unless such securities are variable amount master demand notes with maturities of nine months or less or unless the Fund’s subadviser has determined that an adequate trading market exists for such securities or that market quotations are readily available. The Funds may purchase Rule 144A securities sold to institutional investors without registration under the 1933 Act and commercial paper issued in reliance upon the exemption in Section 4(a)(2) of the 1933 Act, for which an institutional market has developed. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on the issuer’s ability to honor a demand for repayment of the unregistered security. Although the 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 Board. 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.

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	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) 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 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 regulatory authority

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Investment Technique	Description and Risks	Fund-Specific Limitations
	with jurisdiction. Under the 1940 Act, a Fund is required to maintain continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with an exception for borrowings not in excess of 5% of the Fund’s total assets made for temporary or emergency purposes. Any borrowings for temporary purposes in excess of 5% of the Fund’s total assets must maintain continuous asset coverage. If the 300% asset coverage should decline as a result of market fluctuations or for other reasons, a Fund may be required to sell some of its portfolio holdings within three days (excluding Sundays and holidays) to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time. Borrowing will tend to exaggerate the effect on net asset value of any increase or decrease in the market value of a Fund’s portfolio. Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. A Fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.
Mortgage “Dollar-Roll” Transactions	Each Fund may enter into mortgage “dollar-roll” transactions pursuant to which it sells mortgage-backed securities for delivery in the future and simultaneously contracts to repurchase substantially similar securities on a specified future date. During the roll period, the Fund forgoes principal and interest paid on the mortgage-backed securities. The Fund is compensated for the lost interest by the difference between the current sales price and the lower price for the future purchase (often referred to as the “drop”) as well as by the interest earned on, and gains from, the investment of the cash proceeds of the initial sale. The Fund may also be compensated by receipt of a commitment fee. If the income and capital gains from the Fund’s investment of the cash from the initial sale do not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of the Fund compared with what the performance would have been without the use of the dollar roll. Dollar-roll transactions involve the risk that the market value of the securities the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker-dealer to whom the Fund sells securities becomes insolvent, the Fund’s right to purchase or repurchase securities may be restricted. Successful use of dollar rolls may depend upon the Fund’s subadviser’s ability to correctly predict interest rates and prepayments. There is no assurance that dollar rolls can be successfully employed.
Reverse Repurchase Agreements	Reverse repurchase agreements are transactions in which the Fund sells a security and simultaneously commits to repurchase that security from the buyer, such as a bank or broker-dealer, at an agreed-upon price on an agreed-upon future date. The resale price in a reverse repurchase agreement reflects a market rate of interest that is not related to the coupon rate or maturity of the sold security. For certain demand agreements, there is no agreed-upon repurchase date and interest payments are calculated daily, often based upon the prevailing overnight repurchase rate. Generally, a reverse repurchase agreement enables the Fund to recover for the term of the reverse repurchase agreement all or most of the cash invested in the portfolio securities sold and to keep the interest income associated with those portfolio securities. Such transactions are only advantageous if the interest cost to the Fund of

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Investment Technique	Description and Risks	Fund-Specific Limitations
	the reverse repurchase transaction is less than the cost of obtaining the cash otherwise. In addition, interest costs on the money received in a reverse repurchase agreement may exceed the return received on the investments made by the Fund with those monies. Using reverse repurchase agreements to earn additional income involves the risk that the interest earned on the invested proceeds is less than the expense of the reverse repurchase agreement transaction. Because reverse repurchase agreements are considered borrowing under the 1940 Act, while a reverse repurchase agreement is outstanding, the Fund will maintain cash and appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. A Fund will enter into reverse repurchase agreements only with parties that the Fund’s subadviser deems creditworthy, but such investments are still subject to the risks of leverage discussed above.
Master Limited Partnerships	An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Conflicts of interest exist between common unit holders and the general partner, including those arising from incentive distribution payments. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The fees that MLPs charge for transportation of oil and gas products through their pipelines are subject to government regulation, which could negatively impact the revenue stream. Investing in MLPs also involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. These include the risk of environmental incidents, terrorist attacks, demand destruction from high commodity prices, proliferation of alternative energy sources, inadequate supply of external capital, and conflicts of interest with the general partner. There are also certain tax risks associated with investment in MLPs. The benefit derived from a Fund’s investment in MLPs is somewhat dependent on the MLP being treated as a partnership for federal income tax purposes, so any change to this status would adversely affect the price of MLP units. Historically, a substantial portion of the gross taxable income of MLPs has been offset by tax losses and deductions reducing gross income received by investors, and any change to these tax rules would adversely affect the price of an MLP unit. Certain MLPs may trade less frequently than other securities, and those with limited trading volumes may display volatile or erratic price movements.
Money Market Instruments	Each Fund may invest in money market instruments, which are high-quality short-term investments. The types of money market instruments most commonly acquired by the Funds are discussed below, although each Fund is also permitted to invest in other types of money market instruments to the extent consistent with the Fund’s investment limitations and restrictions.
Banker's Acceptances	A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction (to finance the import, export, transfer or storage of goods). The borrower, as well as the bank, is liable for payment, and the bank unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in secondary markets prior to maturity.
Certificates of Deposit	Certificates of deposit are generally short-term, interest-bearing negotiable certificates issued by banks or savings and loan associations against funds deposited in the issuing institution. They

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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.
Time Deposits	Time deposits are deposits in a bank or other financial institution for a specified period of time at a fixed interest rate for which a negotiable certificate is not received.
U.S. Government Obligations	Securities issued or guaranteed as to principal and interest by the United States Government include a variety of Treasury securities, which differ only in their interest rates, maturities, and times of issuance. Treasury bills have maturities of one year or less. Treasury notes have maturities of one to ten years, and Treasury bonds generally have maturities of greater than ten years. Agencies of the United States Government which issue or guarantee obligations include, among others, Export-Import Bank of the United States, Farmers Home Administration, Federal Housing Administration, GNMA, Maritime Administration, Small Business Administration and The Tennessee Valley Authority. Obligations of instrumentalities of the United States Government include securities issued or guaranteed by, among others, FNMA, Federal Home Loan Banks, FHLMC, Federal Intermediate Credit Banks, Banks for Cooperatives, and the U.S. Postal Service. Some of these securities are supported by the full faith and credit of the U.S. Government, others are supported by the right of the issuer to borrow from the Treasury, while still others are supported only by the credit of the instrumentality. There is no guarantee that the U.S. Government will provide financial support to its agencies or instrumentalities, now or in the future, if it is not obligated to do so by law. Accordingly, although these securities have historically involved little risk of loss of principal if held to maturity, they may involve more risk than securities backed by the full faith and credit of the U.S. Government because the Fund must look principally to the agency or instrumentality issuing or guaranteeing the securities for repayment and may not be able to assert a claim against the United States if the agency or instrumentality does not meet its commitment.
Mutual Fund Investing	Each Fund is authorized to invest in the securities of other investment companies subject to the limitations contained in the 1940 Act.

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Investment Technique			Description and Risks			Fund-Specific Limitations
			Investment companies in which the Fund may invest may include ETFs. An ETF is an investment company classified as an open-end investment company or unit investment trust that is traded similarly to a publicly traded company. Most ETFs seek to achieve the same return as a particular market index. That type of ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An index-based ETF will invest in all of the securities included in the index, a representative sample of the securities included in the index, or other investments expected to produce returns substantially similar to that of the index. Other types of ETFs include leveraged or inverse ETFs, which are ETFs that seek to achieve a daily return that is a multiple or an inverse multiple of the daily return of a securities index. An important characteristic of these ETFs is that they seek to achieve their stated objectives on a daily basis, and their performance over longer periods of time can differ significantly from the multiple or inverse multiple of the index performance over those longer periods of time. ETFs also include actively managed ETFs that pursue active management strategies and publish their portfolio holdings on a frequent basis. In connection with the management of its daily cash positions, each Fund may invest in securities issued by investment companies that invest in short-term debt securities (which may include municipal obligations that are exempt from Federal income taxes) and that seek to maintain a $1.00 NAV per share. In certain countries, investments by the Funds may only be made through investments in other investment companies that, in turn, are authorized to invest in the securities that are issued in such countries. (See “Foreign Investment Companies” under “Foreign Investing” in this section of the SAI.) Under the 1940 Act, a Fund generally may not own more than 3% of the outstanding voting stock of an investment company, invest more than 5% of its total assets in any one investment company, or invest more than 10% of its total assets in the securities of investment companies. In some instances, a Fund may invest in an investment company in excess of these limits; for instance, with respect to investments in money market funds or investments made pursuant to exemptive rules adopted and/or orders granted by the SEC. The SEC has adopted exemptive rules to permit funds of funds to exceed these limits when complying with certain conditions, which differ depending upon whether the funds in which a fund of funds invests are affiliated or unaffiliated with the fund of funds. Many ETFs have obtained exemptive relief from the SEC to permit unaffiliated funds to invest in the ETF’s shares beyond the statutory limitations discussed above, subject to certain conditions. The Funds may rely on these exemptive rules and/or orders to invest in affiliated or unaffiliated mutual funds and/or unaffiliated ETFs. In addition to this, the Trust has obtained exemptive relief permitting the Funds to exceed the limitations with respect to investments in affiliated and unaffiliated funds that are not themselves funds of funds, subject to certain conditions. The risks associated with investing in other investment companies generally reflect the risks of owning shares of the underlying securities in which those investment companies invest, although lack of liquidity in an investment company could result in its value being more volatile than the underlying portfolio of securities. For purposes of complying with investment policies requiring a Fund to invest a percentage of its assets in a certain type of investments (e.g., stocks of small capitalization companies), the Fund generally will look through an investment company in which it invests, to categorize the investment company in accordance with the types of investments the investment company holds.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	Certain investment companies in which the Funds may invest may be considered commodity pools under the CEA and applicable CFTC regulations. If a Fund invests in such an investment company, the Fund will be required to treat some or all of its holding of the investment company’s shares as a commodity interest for the purposes of determining whether the Fund is qualified to claim exclusion or exemption from regulation by the CFTC. (See “Commodity Interests” in this section of the SAI for additional information regarding the implications to the Funds of investing in commodity interests.) Investors in each Fund should recognize that when a Fund invests in another investment company, the Fund will bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Real Estate Investment Trusts (REITs)	Each Fund may invest in REITs. REITs pool investors’ funds for investment primarily in income producing commercial real estate or real estate related loans. A REIT is not taxed on income distributed to shareholders if it complies with several requirements relating to its organization, ownership, assets, and income and a requirement that it distribute to its shareholders at least 90% of its taxable income (other than net capital gains) for each taxable year. REITs can generally be classified as follows: • Equity REITs, which invest the majority of their assets directly in real property and derive their income primarily from rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. • Mortgage REITs, which invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments. • Hybrid REITs, which combine the characteristics of both equity REITs and mortgage REITs. REITs are structured similarly to closed-end investment companies in that they are essentially holding companies. An investor should realize that by investing in REITs indirectly through the Fund, he will bear not only his proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the underlying REITs. (See “Mutual Fund Investing” in this section of the SAI.) Selecting REITs requires an evaluation of the merits of each type of asset a particular REIT owns, as well as regional and local economics. Due to the proliferation of REITs in recent years and the relative lack of sophistication of certain REIT managers, the quality of REIT assets has varied significantly. The risks associated with REITs are similar to those associated with the direct ownership of real estate. These include declines in the value of real estate, risks related to general and local economic conditions, dependence on management skill, cash flow dependence, possible lack of availability of long-term mortgage funds, over-building, extended vacancies of properties, decreased occupancy rates and increased competition, increases in property taxes and operating expenses, changes in neighborhood values and the appeal of the properties to tenants and changes in interest rates. Equity REITs may be affected by changes in the value of the underlying properties they own, while mortgage REITs may be affected by the quality of any credit extended. Further, equity and mortgage REITs are dependent upon management skills and generally are not diversified. Equity and mortgage REITs are also subject to potential defaults by borrowers, self-liquidation, and the possibility of failing to qualify for tax-free status of income under the

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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% of the market value of a Fund’s total assets may be invested in repurchase agreements with a maturity of more than seven days and in other illiquid securities.
Securities Lending	Subject to certain investment restrictions, each Fund may, subject to the Trustees’ and Trust Treasurer’s approval, lend securities from its portfolio to brokers, dealers and financial institutions deemed creditworthy and receive, as collateral, cash or cash equivalents which at all times while the loan is outstanding will be maintained in amounts equal to at least 100% of the current market value of the loaned securities. Any cash collateral will be invested in short-term securities that will increase the current income of the Fund lending its securities. A Fund will have the right to regain record ownership of loaned securities to exercise beneficial rights such as voting rights and subscription rights. While a securities loan is outstanding, the Fund is to receive an amount equal to any dividends, interest or other distributions with respect to the loaned securities. A Fund may pay reasonable fees to persons unaffiliated with the Trust for services in arranging such loans. Even though securities lending usually does not impose market risks on the lending Fund, as with any extension of credit, there are risks of delay in recovery of the loaned securities and in some cases loss of rights in the collateral should the borrower of the securities fail financially. In addition, the value of the collateral taken as security for the securities loaned may decline in value or may be difficult to convert to cash in the event that a Fund must rely on the collateral to recover the value of the securities. Moreover, if the borrower of the securities is insolvent, under current bankruptcy law, the Fund could be ordered by a court not to liquidate the collateral for an

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 short sale and the time the Fund covers its short position, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged. If a Fund sells securities short against the box, it may protect unrealized gains, but will lose the opportunity to profit on such securities if the price rises. If a Fund engages in naked short sales, the Fund’s risk of loss could be as much as the maximum attainable price of the security (which could be limitless) less the price paid by the Fund for the security at the time it was borrowed. When a Fund sells securities short, to the extent required by applicable law and regulation the Fund will “cover” the short sale, which generally means that the Fund will segregate any asset, including equity securities and non-investment-grade debt so long as the asset is liquid, unencumbered and marked to market daily, equal to the market value of the securities sold short, reduced by any amount deposited as margin. Alternatively, the Fund may “cover” a short sale by (a) owning the underlying securities, (b) owning securities currently convertible into the underlying securities at an exercise price equal to or less than the current market price of the underlying securities, or (c) owning a purchased call option on the underlying securities with an exercise price equal to or less than the price at which the underlying securities were sold short.
Special Situations	Each Fund may invest in special situations that the Fund’s subadviser believes present opportunities for capital growth. Such situations most typically include corporate restructurings, mergers, and tender offers. A special situation arises when, in the opinion of the Fund’s subadviser, the securities of a particular company will, within a reasonably estimable period of time, be accorded market recognition at an appreciated value solely by reason of a development particularly or uniquely applicable to that company and regardless of general business conditions or movements of the market as a whole.

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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, 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).	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 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

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Investment Technique	Description and Risks	Fund-Specific Limitations
	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 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

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Investment Technique			Description and Risks			Fund-Specific Limitations
			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. 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.

CA TAX-EXEMPT BOND FUND ONLY

Special California Risk Factors

The following information as to certain State risk factors is provided to investors in view of the policy of the Fund to concentrate its investments in State and municipal issues. Such information does not purport to be a complete description, including official statements relating to securities offerings of State and municipal issuers and periodic publications by national rating organizations. Such information, however, has not been independently verified by the Fund.

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The California Constitution and various state statutes limit the taxing and spending authority of the state of California (the “State”). This may impair the ability of State issuers to maintain debt service on their obligations, as summarized below.

Certain of the State’s municipal securities in which the Fund may invest may be obligations of issuers that rely in whole or in part on State revenues for payment of these obligations. Property tax revenues and a portion of the State’s General Fund surplus are distributed to counties, cities and their various taxing entities and the State assumes certain obligations previously paid out of local funds. Whether and to what extent a portion of the State’s General Fund will be distributed in the future to counties, cities and various entities is unclear.

Article XIIIA, Article XIIIB, Article XIIIC, Article XIIID and Propositions 98, 111 and 39 were each adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time to time other initiative measures could be adopted, further affecting State revenues or the State’s ability to expend revenues. Certain legislation enacted in the State could significantly limit State agencies’, local governments’ and districts’ ability to collect sufficient funds to meet debt service on bonds and other obligations.

Article XIIIA of the California Constitution, as amended, places restrictions and limits on California taxing entities in their ability to increase real property taxes. Article XIIIB of the California Constitution, imposes on State and municipal entities an annual appropriations limit with respect to certain expenditures and requires the allocation of excess revenues to State education funds. Annual appropriations limits are adjusted annually to reflect changes in consumer prices, population, and certain services provided by these entities. The California Constitution, through amendments made by Propositions 98 and 111, also requires minimum levels of funding for public school and community college districts. Articles XIIIC and XIIID of the California Constitution provide for limitations on the ability of local government agencies to impose or raise various taxes, fees, charges, and assessments without voter approval. Certain “general taxes” imposed after January 1, 1995 by local government must be approved by voters in order to remain in effect, and local voters may have the right to present initiatives to reduce taxes, fees, assessments, or charges imposed by the local government. In March 2004, State voters approved two ballot measures, collectively known as the Economic Recovery Bond Measures, Propositions 57 and 58. The “Balanced Budget Act” was implemented as a result of these measures.

The Balanced Budget Act includes a provision for a “Rainy Day” fund requiring that beginning in fiscal 2006-07, depending on the strength of the economy, from 1% to 3% of annual General Fund revenues must be set aside in a reserve fund, the Budget Stabilization Account (“BSA”). Additionally, the Balanced Budget Act mandates that projected expenditures cannot exceed projected revenues. In November 2010, State voters approved two more ballot measures, Propositions 25 and 26. Proposition 25 amends the State Constitution to change the legislative vote requirement necessary to pass the State budget and spending bills related to the budget from two-thirds to a simple majority, while preserving the two-thirds requirement for changes in tax rates. Proposition 26 amends the State Constitution to require a two-thirds supermajority vote in the California State Legislature to pass many fees, levies, charges and tax revenue allocations that under the state’s previous rules could be enacted by a simple majority vote.

In November 2012 State voters approved Proposition 30 to increase sales and income taxes throughout the next several fiscal years. The State’s sales tax increased to 7.5% from 7.25% for a period of four years, and State income taxes increased for a period of seven years on taxpayers earning more than $250,000 per year by amounts ranging from 1% on taxpayers earning over $250,000 but less than $300,000 per year to 3% on taxpayers earning more than $1 million per year. The increase was retroactive to January 1, 2012. The Legislative Analyst’s Office (“LAO”) projected that Proposition 30 would result in an average annual State revenue gain of $5 billion per year from fiscal years 2012-13 through 2016-17, and approximately $5.4 billion in fiscal 2017-18 and $2.2 billion in fiscal 2018-19. Governor Jerry Brown projected that if his policies remained in effect and revenues continued to increase as projected, $11.8 billion of approximately $24.9 billion of budgetary borrowings and deferrals incurred prior to 2011 and outstanding as of June 30, 2014, would be repaid in fiscal 2014-15, with the remainder fully eliminated by the end of fiscal year 2017-18. Smaller amounts of revenue are expected from Proposition 39, which requires multistate businesses to pay State income taxes based on sales in the State and eliminates other alternative formulas for calculating California income taxes. The LAO estimates Proposition 39 will generate $1 billion in additional revenue annually, growing over time.

On May 14, 2015, Governor Brown revised the State’s 2015-16 Budget. The 2015-16 May Revision forecasted General Fund revenues at $3.3 billion higher for fiscal year 2014-15 and $1.6 billion higher for fiscal year 2015-16 than were projected in the original Proposed 2015-16 Budget. The 2015-16 May Revision assumes approximately $0.8 billion more in spending in fiscal year 2014-15. After accounting for these changes and others, the May Revision anticipates that the State would end fiscal year 2015-16 with a $1.1 billion reserve.

In November 2014, State voters approved Proposition 2, which amends the State Constitution by requiring the State to spend a minimum amount on debt repayment, altering the State’s requirements for the BSA, and establishing a Public

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School System Stabilization Account (“PSSSA”). Proposition 2 requires the State to spend at least 0.75 percent of General Fund revenues, currently approximately $800 million, each year to pay down debts for pension and retiree health benefits (in addition to funds already required under law) and specified debts to local governments and other state accounts. The State also will be required to use a portion of higher-than-average capital gains-tax related revenues to pay down additional debt. Proposition 2 also changes the amount deposited annually in the BSA, increasing the maximum size of the BSA to 10 percent of General Fund revenues, and restricting the situations in which the State can deposit a lesser amount into the BSA or withdraw money from the BSA to specified “budget emergencies.” The PSSSA established by Proposition 2 will be funded by a transfer of a portion of above-average capital gains-related tax revenues if and when generated.

Certain State municipal securities that the Fund may own may be secured in whole or in part by mortgages or real property deeds of trust, and the rights of the Fund to obtain payment from such security may be constrained by State laws addressing nonjudicial foreclosure rights and transfers of title by sale by private owner, antideficiency provisions, and limits on the ability to receive pre-payment charges on mortgage loans. These types of State statutes, among other limits imposed by State law, could affect the flow of revenues to an issuer for debt service on outstanding debt obligations.

Litigation may play a role in the future of the State’s economy, as it is a party to numerous legal proceedings, many of which normally occur in governmental operations. In addition, the State is involved in certain other legal proceedings which, if decided against the State, may require the State to make significant future expenditures or may impair future revenue sources.

On May 29, 2002, the California Court of Appeal for the Second District decided the case of Howard Jarvis Taxpayers Association, et al. v. Kathleen Connell (as Controller of the State of California). The Court of Appeal held that a final budget bill, an emergency appropriation, a self-executing authorization pursuant to state statutes (such as continuing appropriations) or the California Constitution or a federal mandate is necessary for the State Controller to disburse funds. To the extent the holding in such case would apply to payments expected to be received by an issuing state agency, the requirement that there be either a final budget bill or an emergency appropriation may result in the delay of such payments to such agency if such required legislative action is delayed, unless the payments are self-executing authorizations or are subject to a federal mandate. On May 1, 2003, the California Supreme Court upheld the holding of the Court of Appeal, stating that the Controller is not authorized under State law to disburse funds prior to the enactment of a budget or other proper appropriation, but under federal law, the Controller is required, notwithstanding a budget impasse and the limitations imposed by State law, to pay timely those State employees who are subject to the minimum wage and overtime compensation provisions of the federal Fair Labor Standards Act.

California Economic Outlook

The effect that general economic conditions within the State and the effect that the State’s budgetary problems may have in the future on the ability of State issuers to meet their obligations cannot be predicted. In addition to unfunded liabilities of government pensions (see below), California faces $340 billion in debts.

In 2011 the State faced $20 billion in expected annual gaps between its revenues and spending for the ensuing several years. After significant spending cuts enacted during fiscal years 2011-12 and 2012-13, new temporary revenues provided by the passage of Proposition 30 and the 2015-2016 Budget, the State budget forecasts a $1.1 billion positive reserve for the 2015-2016 fiscal year.

As of July 1, 2015, the state had more than $87.0 billion of outstanding general obligation bonds and lease revenue bonds payable principally from the state’s General Fund or from lease payments paid from the operating budget of the respective lessees, which operating budgets are primarily, but not exclusively, derived from the General Fund. As of July 1, 2015, there were more than $30 billion of authorized and unissued long-term voter-approved general obligation bonds which, when issued, will be payable principally from the General Fund and approximately $4.0 billion of authorized and unissued lease revenue bonds.

General Fund revenues and transfers for fiscal year 2014-15 were projected at $105.5 billion, an increase of $3.3 billion or 3.2 percent compared with fiscal year 2013-14. General Fund expenditures for fiscal year 2014-15 were projected at $108.0 billion, an increase of $7.3 billion or 7.2 percent compared with fiscal year 2013-14. The projected excess of expenditures over revenues and transfers is due in part to the budgetary accounting treatment of the BSA transfer, described in the next paragraph, and to the significant amount of expenditures to pay down the State’s “wall of debt” liabilities.

For the first time since the 2007-08 fiscal year, full funding (determined by reference to the pre-Proposition 2 maximum amount) of the BSA is projected to occur during fiscal year 2014-15. Pursuant to Proposition 58 of 2004, the State will

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set aside 3 percent of estimated General Fund revenues, estimated at about $3.5 billion by the end of fiscal year 2015-16, in the BSA. In recent years the State has paid off billions of dollars of budgetary borrowings, debts and deferrals that were accumulated in order to balance budgets during the previous recession and prior years. Under Proposition 58, half this amount will remain in the BSA, and half will be transferred to a redemption account to retire Economic Recovery Bonds. Under the Proposition 2 requirements, the 2015 Budget Act directs an additional $1.9 billion to pay off loans from special funds, pay down past liabilities from Proposition 98, and help the University of California reduce its employee pension unfunded liability. In addition, the 2015-16 Budget repays the remaining $1 billion in budgetary deferrals to schools and community colleges, discharges the last of the $15 billion in Economic Recovery Bonds that were issued to cover budget deficits from as far back as 2002, repays local governments $765 million in mandated reimbursements, and reduces outstanding mandate liabilities owed to schools and community colleges by $3.8 billion.

The State manages its cash flow requirements during the fiscal year primarily with a combination of external borrowing and internal borrowing by the General Fund from over 700 special funds. Since June 2008, the General Fund has typically ended each fiscal year with a net borrowing from these special funds. However, the General Fund had a cash surplus of $1.9 billion as of June 30, 2014, and $2.5 billion as of June 30, 2015, and did not owe any monies to these special funds and other state funds from internal borrowing for cash management purposes (compared to almost $2.435 billion owed at June 30, 2013 and $9.593 billion at June 30, 2012).

Despite the recent significant budgetary improvements, there remain a number of major risks and pressures that threaten the state’s financial condition, including the need to repay billions of dollars of obligations which were deferred to balance budgets during the economic downturn.

Combined, the total unfunded pension liabilities for all State and local government workers in California hit $281 billion at June 30, 2013 (the latest year for which data is available). The two main state pension funds face large unfunded future liabilities. The California Public Employees Retirement System ("CalPERS") reported an unfunded accrued liability allocable to state employees (excluding judges and elected officials) as of June 30, 2013, of $36.4 billion on an actuarial value of assets (“AVA”) basis (an increase of $8.2 billion from the June 30, 2012 Valuation) and $49.9 billion on a market value of assets (“MVA”) basis (an increase of $4.4 billion from the June 30, 2012 Valuation) that decreased to $43.3 billion as of June 30, 2014. The California State Teachers’ Retirement System (“CalSTRS”) reported the unfunded accrued liability of its Defined Benefit Plan as of June 30, 2013 at $73.7 billion on an AVA basis (an increase of $2.7 billion from the June 30, 2012 valuation), and $74.4 billion on an MVA basis (a decrease of $6 billion from the June 30, 2012 valuation).

General Fund contributions to CalPERS and CalSTRS are estimated to be approximately $2.9 billion and $1.9 billion, respectively, for the 2015-16 fiscal year. The combined contributions represent about 4.2 percent of all General Fund expenditures in fiscal year 2015-16.

There can be no assurances that the state’s annual required contributions to CalPERS and CalSTRS will not significantly increase in the future. The actual amount of any increases will depend on a variety of factors, including but not limited to investment returns, actuarial assumptions, experience and retirement benefit adjustments. The Governor signed Chapter 47, Statutes of 2014 (AB 1469) on June 24, 2014, that increases statutorily required contributions to CalSTRS from the state, school districts, and teachers beginning July 1, 2014. The AB 1469 funding plan includes additional increases in contribution rates for the state, school districts, and teachers over the next several years in order to eliminate the current CalSTRS unfunded liability by 2045-46. Recent action by the CalPERS Board to revise amortization and smoothing policies is expected to result in more rapid increases in state retirement contributions commencing in fiscal year 2015-16. The Board in February 2014 also adopted staff recommendations to change mortality and other assumptions, which will result in increased contribution rates that started in fiscal year 2014-15.

The State also provides postemployment health care and dental benefits to state employees and their spouses and dependents (when applicable) and utilizes a “pay-as-you-go” funding policy. These are sometimes referred to as Other Post Employments Benefits or “OPEB.” As reported in the state’s OPEB Actuarial Valuation Report, the state has an Unfunded Actuarial Accrued Liability relating to state retirees’ other postemployment benefits of approximately $71.81 billion as of June 30, 2014 (as compared to $64.57 billion estimated as of June 30, 2013).

In addition, the state’s revenues (particularly the personal income tax) can be volatile and correlate to overall economic conditions. There can be no assurance that the State will not face fiscal stress and cash pressures again, or that other impacts of the current economic situation will not materially adversely affect the financial condition of the State.

Impact of Health Care Reform

The federal Affordable Care Act (the “ACA”) has resulted in a significant net increase in General Fund program costs in fiscal year 2013-14 and subsequent fiscal years. The net impact of the ACA on the General Fund will depend on a variety of factors, including levels of individual and employer participation, changes in insurance premiums and savings

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resulting from the ACA as beneficiaries in current State-only programs receive coverage through Medi-Cal or the California Health Benefit Exchange. The Governor’s Proposed 2015-16 Budget includes $573.3 million from the General Fund in fiscal year 2015-16 for the costs of expanded eligibility under health care reform. The 2013-14 State Budget implemented the ACA’s optional expansion to include adults up to 138 percent of the federal poverty level. Under the ACA, the federal government has promised initially to pay for 100 percent of the cost of benefits for newly eligible individuals served under this optional expansion; federal funding will gradually decrease to 90 percent by 2020. Other costs will be shared 50-50, with the State’s estimated share of these other costs being approximately $1.7 billion ($766 million from the General Fund) for fiscal year 2014-15. In December 2014, the State indicated in an official statement that the ACA has resulted in a significant net increase of General Fund program costs in fiscal year 2013-14 and beyond.

Earthquake Risk

Substantially all of California is within an active geologic region subject to major seismic activity. Northern California in 1989 and Southern California in 1994 experienced major earthquakes causing billions of dollars in damages. The federal government provided more than $13 billion in aid for both earthquakes, and neither event has had any long-term negative economic impact. Any obligation in the Fund could be affected by an interruption of revenues because of damaged facilities, or, consequently, income tax deductions for casualty losses or property tax assessment reductions. Compensatory financial assistance could be constrained by the inability of (i) an issuer to have obtained earthquake insurance coverage rates; (ii) an insurer to perform on its contracts of insurance in the event of widespread losses; or (iii) the federal or State government to appropriate sufficient funds within their respective budget limitations.

Bond Ratings

As of July 2, 2015, the State’s general obligation debt was rated Aa3 by Moody’s, AA- by S&P, and A+ by Fitch. Moody’s, S&P and Fitch have assigned stable outlooks for their ratings. These ratings apply to only the State’s general obligation bonds. They are not indicative of ratings assigned to bonds issued by counties, cities, districts or other local agencies.

Obligations carrying the same rating are not claimed to be of absolutely equal credit quality. In a broad sense, they are alike in position, but since there are a limited number of rating classes used in grading thousands of bonds, the symbols cannot reflect the same shadings of risk which actually exist. See the description of “Ratings” under the heading “More Information About Fund Investment Strategies & Related Risks” for additional information about securities ratings.

Puerto Rico

Puerto Rico’s business cycles have generally tracked those of the United States as a whole, although with somewhat greater volatility. Private sector employment growth in Puerto Rico fell sharply in each of the last four recessions, and bottomed out roughly at the end of the downturn on the mainland.

Gross national product (“GNP”) has been subdued for many years. Puerto Rico has been in a recession since fiscal year 2007. Puerto Rico suffers from chronic budget gaps, an economy in or near recession for nine years, and interest rates far higher than those paid by any U.S. state.

Since February of 2014, the credit ratings of the Commonwealth’s general obligation bonds and Commonwealth guaranteed bonds, as well as the ratings of most of the Commonwealth’s public corporations, have been lowered (more than once in most cases) to noninvestment grade by Moody’s, S&P, and Fitch. The most recent rating downgrade occurred in September of 2015. According to the above-referenced ratings agencies, further downgrades are possible.

In June 2015, the Governor of Puerto Rico, Alejandro García Padilla announced that Puerto Rico’s debt is “unpayable” under its current terms. On June 28, 2014, the Commonwealth had enacted Act 71-2014, known as the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the “Recovery Act”). Before the enactment of the Recovery Act, there was no Commonwealth statute providing an orderly recovery regime for public corporations experiencing financial difficulties. At the same time, Chapters 9 and 11 of the United States Bankruptcy Code are generally inapplicable to public corporations that are governmental instrumentalities of the Commonwealth. Thus, the Recovery Act was intended to fill this statutory gap and provide for an orderly legal process governing the enforcement and restructuring of the debts and other obligations of certain public corporations of the Commonwealth. The Recovery Act was challenged in federal court, which held that it is unconstitutional and preempted by the United States Bankruptcy Code. The Court of Appeals for the First Circuit upheld the decision of the district court. It is currently undergoing review by the Supreme Court of the United States. The case is expected to be heard sometime in the spring of 2016.

The Commonwealth has implemented several expense reduction and cash management measures to address its liquidity challenges. However, even after taking into account such measures, there is a high probability that the

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Commonwealth will not only run a General Fund budget deficit in fiscal year 2016, but that it will also have insufficient liquidity before the end of this calendar year to meet all of its debt service obligations while continuing to provide essential services to the residents of Puerto Rico. Accordingly, while the Commonwealth pursues a voluntary debt exchange offer in order to obtain financial relief, the Commonwealth may have to take additional extraordinary expense reduction and/or revenue measures in order to maintain sufficient liquidity to provide essential government services.

While analysts have seen Puerto Rico's budget deficit as the immediate threat to its credit, it will be hard for the Puerto Rico government to return to a structurally balanced operating budget just with tax increases and spending cuts, without a turnaround in the economy. Many see its underfunded pensions as a long-term threat. A significant component of the Commonwealth’s budget is the cost of its retirement systems (the “Retirement Systems”). The three principal pension systems of the Commonwealth (the Employees Retirement System, the Teachers Retirement System and the Judiciary Retirement System) have a significant unfunded actuarial accrued liability and a very low funding ratio. Although the Commonwealth enacted legislation in 2013 that attempts to reform the Retirement Systems by, among other measures, reducing benefits, increasing employer and employee contributions, and replacing most of the defined benefit elements of the system with a defined contribution system, these reforms were primarily designed to address the Retirement Systems’ cash flow needs in order to allow them to make benefit payments when due. As a result, even after enacting these reforms, the Retirement Systems will continue to have a large unfunded actuarial accrued liability and a low funding ratio for several decades.

The actuarial valuation report of the Employees Retirement System as of June 30, 2014, under GASB 67, reflects a Total Pension Liability of $30.2 billion, a Fiduciary Net Position of $127 million (total assets of $3.4 billion net of liabilities of $3.3 billion, consisting principally of $3.1 billion in pension obligation bonds), and a Net Pension Liability of $30.1 billion. The Fiduciary Net Position as a percentage of Total Pension Liability (the “Funded Ratio”) is 0.42%. The net assets of the System were exhausted during fiscal year 2015.

The Teachers Retirement System’s latest actuarial valuation, as of June 30, 2014, under GASB 67, reflects a total pension liability of $14.8 billion, a fiduciary net position of $1.7 billion, a net pension liability (including basic and system administered benefits) of $13.1 billion and a Funded Ratio of 11.5%.

On the other hand, the Judiciary Retirement System’s latest actuarial valuation report, as of June 30, 2014, reflects an increase in pension liabilities and a decrease in the funded level for financial reporting purposes. The valuation performed under GASB 67 shows a Total Pension Liability of $504.4 million, a Fiduciary Net Position of $62.1 million, and a Net Pension Liability of $442.3 million. Based on this report, its Funded Ratio is 12.3%.

Finally, on October 21, 2015, the Obama Administration presented to Congress a comprehensive roadmap that would alleviate Puerto Rico’s economic and fiscal problems. The plan’s proposal included: granting Puerto Rico access to Chapter 9 of the U.S. Bankruptcy Code by which all of Puerto Rico’s debt could be reorganized; a Congress – created independent fiscal oversight board for the island; equal treatment for Puerto Rico on the disbursement of Medicaid benefits; and participation in the Earned Income Tax Credit program. Both the U.S. Senate and the House of Representatives have directed several committees to come up with a responsible solution by the end of the first quarter of 2016.

INVESTMENT LIMITATIONS

Fundamental Investment Limitations

Each Fund is subject to the investment limitations enumerated in this section, which may be changed with respect to a particular Fund only by a vote of the holders of a majority of such Fund’s outstanding shares. As used in this SAI and in the Prospectuses, a “majority of the outstanding shares” of a Fund means the lesser of (a) 67% of the shares of the particular Fund represented at a meeting at which the holders of more than 50% of the outstanding shares of such Fund are present in person or by proxy, or (b) more than 50% of the outstanding shares of such Fund.

With respect to all of the Funds, except as noted, each Fund may not:

(1)

With respect to 75% of its total assets, purchase securities of an issuer (other than the U.S. Government, its agencies, instrumentalities or authorities or repurchase agreements collateralized by U.S. Government securities and other investment companies), if: (a) such purchase would, at the time, cause more than 5% of the Fund’s total assets taken at market value to be invested in the securities of such issuer; or (b) such purchase would, at the time, result in more than 10% of the outstanding voting securities of such issuer being held by the Fund. (This restriction does not apply to the Alternatives Diversifier Fund, EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund.)

(2)

Purchase securities if, after giving effect to the purchase, more than 25% of its total assets would be invested in the

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securities of one or more issuers conducting their principal business activities in the same industry (excluding the U.S. Government or its agencies or instrumentalities), except: (a) the Global Infrastructure Fund will concentrate its assets in the public infrastructure industry which includes, but is not limited to, companies engaged in the production, transmission or distribution of electric energy or gas, or in telephone services; and (b) the Global Real Estate Fund, International Real Estate Fund and Real Estate Fund will each concentrate its assets in the real estate industry. Additionally, this prohibition shall not apply to the purchase of investment company shares by any of the Fund of Funds.

(3)

Borrow money, except (i) in amounts not to exceed one-third of the value of the Fund’s total assets (including the amount borrowed) from banks, and (ii) up to an additional 5% of its total assets from banks or other lenders for temporary purposes. For purposes of this restriction, (a) investment techniques such as margin purchases, short sales, forward commitments, and roll transactions, (b) investments in instruments such as futures contracts, swaps, and options and (c) short-term credits extended in connection with trade clearance and settlement, shall not constitute borrowing.

(4)

Issue “senior securities” in contravention of the 1940 Act. Activities permitted by SEC exemptive orders or staff interpretations of the SEC shall not be deemed to be prohibited by this restriction.

(5)

Underwrite the securities issued by other persons, except to the extent that, in connection with the disposition of portfolio securities, the Fund may be deemed to be an underwriter under applicable law.

(6)

Purchase or sell real estate, except that the Fund may (i) acquire or lease office space for its own use, (ii) invest in securities of issuers that invest in real estate or interests therein, (iii) invest in mortgage-related securities and other securities that are secured by real estate or interests therein, and (iv) hold and sell real estate acquired by the Fund as a result of the ownership of securities.

(7a)

Purchase or sell commodities or commodity contracts, except the Fund may purchase and sell derivatives (including, but not limited to, options, futures contracts and options on futures contracts) whose value is tied to the value of a financial index or a financial instrument or other asset (including, but not limited to, securities indexes, interest rates, securities, currencies and physical commodities). (This restriction applies to all Funds except Emerging Markets Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund.)

(7b)

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. (This restriction applies to the Emerging Markets Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund.)

(8a)

Make loans, except that the Fund may (i) lend portfolio securities, (ii) enter into repurchase agreements, (iii) purchase all or a portion of an issue of debt securities, bank loan participation interests, bank certificates of deposit, bankers’ acceptances, debentures or other securities, whether or not the purchase is made upon the original issuance of the securities and (iv) participate in an interfund lending program with other registered investment companies. (This restriction applies to the Real Estate Fund and Sector Trend Fund.)

(8b)

Lend securities or make any other loans if, as a result, more than 33 1/3% of its total assets would be lent to other parties, except that the Fund may purchase debt securities, may enter into repurchase agreements and may acquire loans, loan participations and assignments (both funded and unfunded) and other forms of debt instruments. (This restriction applies to the Alternatives Diversifier Fund, Bond Fund, CA Tax-Exempt Bond Fund, EM Debt Fund, EM Equity Income Fund, EM Small-Cap Fund, Equity Trend Fund, Essential Resources Fund, Foreign Opportunities Fund, Global Equity Trend Fund, Global Infrastructure Fund, Global Opportunities Fund, Global Real Estate Fund, Greater European Fund, Herzfeld Fund, High Yield Fund, International Equity Fund, International Real Estate Fund, International Small-Cap Fund, International Wealth Masters Fund, Low Volatility Fund, Multi-Asset Trend Fund, Multi-Sector Intermediate Bond Fund, Multi-Sector Short Term Bond Fund, Senior Floating Rate Fund and Wealth Masters Fund.)

(8c)

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). (This restriction applies to the Emerging Markets Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund.)

With respect to investment limitation (2) above, when selecting investments for a Fund, the Subadviser will consider the concentration policy of any exchange-traded fund (“ETFs”), mutual funds and closed-end funds. For purposes of

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determining the amount of each Fund's assets invested in the securities of one or more issuers conducting their principal business activities in the same industry or group of related industries, the Funds will look through to the securities held by an affiliated mutual fund in which the Fund invests; however, as of the date of this SAI the Funds will not look through to the securities held by any ETFs, unaffiliated mutual funds and/or closed-end funds in which the Fund invests.

Except with respect to investment restriction (3) above, if any percentage restriction described above for a Fund is adhered to at the time of investment, a subsequent increase or decrease in the percentage resulting from a change in the value of the Fund's assets will not constitute a violation of the restriction. With respect to investment restriction (3), in the event that asset coverage for all borrowings shall at any time fall below 300 per centum, the Fund shall, within three days thereafter (not including Sundays and holidays) or such longer period as the SEC may prescribe by rules and regulations, reduce the amount of its borrowings to an extent that the asset coverage of such borrowings shall be at least 300 per centum.

Section 12 of the 1940 Act limits the percentage of shares of other mutual funds that a fund may purchase. The Funds have obtained exemptive relief from the SEC to permit them to invest in affiliated and unaffiliated funds, including ETFs, beyond the statutory limitations, subject to certain conditions. Many ETFs also have obtained exemptive relief from the SEC to permit unaffiliated funds to invest in the ETF’s shares beyond these statutory limitations, subject to certain conditions. Each Fund may rely on the various exemptive orders to invest in shares of other mutual funds, including ETFs as applicable.

Non-Fundamental Investment Restrictions (Foreign Opportunities Fund only)

The Board has adopted the following additional investment restrictions for the Foreign Opportunities Fund. These restrictions are operating policies of the Fund and may be changed by the Trustees without shareholder approval.

(1)

The Fund may sell securities short if it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short without the payment of any additional consideration therefore (“short sales against the box”). In addition, the Fund may engage in “naked” short sales, which involve selling a security that a Fund borrows and does not own. The total market value of all of a Fund’s naked short sale positions will not exceed 8% of its assets. Transactions in futures, options, swaps and forward contracts are not deemed to constitute selling securities short.

(2)

The Fund does not currently intend to purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments and other deposits in connection with transactions in futures, options, swaps and forward contracts shall not be deemed to constitute purchasing securities on margin.

(3)

The Fund may not mortgage or pledge any securities owned or held by it in amounts that exceed, in the aggregate, 15% of the Fund’s NAV, provided that this limitation does not apply to reverse repurchase agreements, deposits of assets to margin, options, swaps or forward contracts, or the segregation of assets in connection with such contracts.

(4)

The Fund does not currently intend to purchase any security or enter into a repurchase agreement if, as a result, more than 15% of its net assets would be invested in repurchase agreements not entitling the holder to payment of principal and interest within seven days and in securities that are illiquid by virtue of legal or contractual restrictions on resale or the absence of a readily available market. The Trustees, or the Fund’s investment adviser or subadviser acting pursuant to authority delegated by the Trustees, may determine that a readily available market exists for securities eligible for resale pursuant to Rule 144A under the 1933 Act (“Rule 144A”), or any successor to such rule, Section 4(2) commercial paper and municipal lease obligations. Accordingly, such securities may not be subject to the foregoing limitation. The factors that may be considered when determining liquidity are described under “Illiquid Securities” in the “Investment Strategies and Related Risks” section.

(5)

The Fund may not invest in companies for the purpose of exercising control of management.

Non-Fundamental Investment Limitations (Emerging Markets Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund only)

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

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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% 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.

MANAGEMENT OF THE TRUST

Trustees and Officers

The Board is responsible for the overall supervision of the Trust, including establishing the Funds’ policies and general supervision and review of their investment activities, and performs the various duties imposed on Trustees by the 1940 Act and Delaware statutory trust law. The officers, who administer the Funds’ daily operations, are appointed by the Board and generally are employees of the Administrator or one of its affiliates. The current Trustees and officers of the Trust performing a policy-making function and their affiliations and principal occupations for the past five years are set forth below. The Trust has no employees.

Unless otherwise noted, each Trustee of the Trust also serves as a Trustee of other Virtus 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

Brown, Thomas J. YOB: 1945

Served since 2016.

Retired

Trustee (since 2016), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2011), Virtus Variable Insurance Trust (9 portfolios); Director (since 2005), VALIC Company Funds (49 portfolios); and Director (since 2010), D’Youville Senior Care Center.

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Burke, Donald C. YOB: 1961

Served since 2016.

Retired.

Trustee (since 2016), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2016), Virtus Variable Insurance Trust (9 portfolios); Director (since 2014) closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios); Director, Avista Corp. (energy company) (since 2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010).

Gelfenbien, Roger A. YOB: 1943

Served since 2016.

Retired.

Trustee (since 2016), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2000), Virtus Variable Insurance Trust (9 portfolios); and Director (since 1999), USAllianz Variable Insurance Product Trust (42 portfolios).

Mallin, John R. YOB: 1950

Served since 2016.

Partner/Attorney (since 2003), McCarter & English LLP Real Property Practice Group and Member (since 2014), Counselors of Real Estate.

Trustee (since 2016), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 1999), Virtus Variable Insurance Trust (9 portfolios); and Director (since 2013), Horizons, Inc. (non-profit).

McClellan, Hassell H. YOB: 1945

Served since 2015.

Retired. Professor (1984 to 2013), Wallace E. Carroll School of Management, Boston College.

Trustee (since 2015), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2008), Virtus Variable Insurance Trust (9 portfolios); Trustee (since 2000), John Hancock Fund Complex (collectively, 228 portfolios); and Director (since 2010), Barnes Group, Inc. (diversified global components manufacturer and logistical services company).

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

McLoughlin, Philip

Chairman

YOB: 1946

Served since 1999.

Retired

Chairman (since 2002) and Trustee (since 1989), Virtus Mutual Fund Complex (52 portfolios); Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (9 portfolios); Trustee/Director and Chairman (since 2011), Virtus Closed-End Funds (3 portfolios); Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (4 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios); and Director (since 1991) and Chairman (since 2010), World Trust Fund (closed-end investment firm in Luxembourg).

McNamara, Geraldine M.

YOB: 1951

Served since 2001.

Retired.

Trustee (since 2001), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (9 portfolios); and Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (4 portfolios).

Oates, James M.

YOB: 1946

Served since 2000.

Managing Director (since 1994), Wydown Group (consulting firm).

Trustee (since 1987), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2016) Virtus Variable Insurance Trust (9 portfolios); Trustee/Director (since 2013), Virtus Closed-End Funds (3 portfolios); Trustee (since 2013), Virtus Alternative Solutions Trust (4 portfolios); Director (since 1996), Stifel Financial; Chairman and Director (1999 to 2014), Connecticut River Bank; Director (2002 to 2014), New Hampshire Trust Company; Chairman and Trustee (since 2005), John Hancock Fund Complex (228 portfolios); and Non-Executive Chairman (2000 to 2014), Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services).

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Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Segerson, Richard E.

YOB: 1946

Served since 2000.

Retired.

Trustee (since 1983), Virtus Mutual Fund Complex (52 portfolios); Trustee (since 2016) Virtus Variable Insurance Trust (9 portfolios); and Managing Director (1998 to 2013), Northway Management Company.

Verdonck, Ferdinand L.J.

YOB: 1942

Served since 2005.

Director (1998 to July 2015), The J.P. Morgan Continental European Investment Trust; Director (2005 to 2013), Galapagos N.V. (biotechnology); Director (1998 to 2015) Groupe SNEF; Vice Chairman (since 2014), Affirmed Therapeutics (biotechnology); and Mr. Verdonck is also a director of several non-U.S. companies.

Trustee (since 2002), Virtus Mutual Fund Complex (52 portfolios); and Trustee (since 2016) Virtus Variable Insurance Trust (9 portfolios).

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

Interested Trustee

Name and Year of Birth

Length of
Time Served

Number of
Portfolios
in Fund
Complex
Overseen
by Trustee

Principal Occupation(s) During Past
5 Years

Other Directorships Held by Trustee
During Past 5 Years

Aylward, George R.

YOB: 1964

Served since 2006.

Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various senior officer positions with Virtus affiliates (since 2005).

Trustee (since 2006), Virtus Mutual Funds (52 portfolios); Chairman, President and Chief Executive Officer (since 2006), The Zweig Closed-End Funds (2 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (9 portfolios); Trustee and President (since 2011), Virtus Closed-End Funds (3 portfolios); Director (since 2013), Virtus Global Funds, PLC (2 portfolios); Trustee (since 2013), Virtus Alternative Solutions Trust (4 portfolios); and Chairman and Trustee (since 2015), Virtus ETF Trust II.

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

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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
Bradley, W. Patrick YOB: 1972	Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), and Chief Financial Officer and Treasurer (since 2006), Virtus Mutual Fund Complex.	Executive Vice President, Fund Services (since 2016), and Senior Vice President, Fund Services (2010 to 2016), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2006) with Virtus affiliates; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), and Chief Financial Officer and Treasurer (since 2004), Virtus Variable Insurance Trust; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2012 to 2013) and Treasurer (Chief Financial Officer) (since 2007), The Zweig Closed-End Funds; Executive Vice President (since 2016), Senior Vice President (2013 to 2016), Vice President (2011 to 2013), and Chief Financial Officer and Treasurer (since 2011), Virtus Closed-End Funds; Vice President and Assistant Treasurer (since 2011), Duff & Phelps Global Utility Income Fund Inc.; Director (since 2013), Virtus Global Funds, PLC; and Executive Vice President (since 2016), Senior Vice President (2013 to 2016), and Chief Financial Officer and Treasurer (since 2013), Virtus Alternative Solutions Trust.
Carr, Kevin J. YOB: 1954	Senior Vice President (since 2013), Vice President (2005 to 2013), and Chief Legal Officer, Counsel and Secretary (since 2005), Virtus Mutual Fund Complex.	Senior Vice President (since 2009), and Vice President, Counsel and Secretary (2008 to 2009), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions (since 2005) with Virtus affiliates; Senior Vice President (2013 to 2014), Vice President (2012 to 2013), Assistant Secretary (since 2012), and Secretary and Chief Legal Officer (2005 to 2012), The Zweig Closed-End Funds; Assistant Secretary (since 2013), Vice President, Chief Legal Officer, Counsel and Secretary (2010 to 2013), Virtus Variable Insurance Trust; Vice President and Assistant Secretary (since 2011), Duff & Phelps Global Utility Income Fund Inc.; Senior Vice President and Assistant Secretary (2013 to 2014), Vice President and Assistant Secretary (2012 to 2013), and Vice President, Chief Legal Officer, Counsel and Secretary (2011 to 2012), Virtus Closed-End Funds; and Assistant Secretary (since 2013), Virtus Alternative Solutions Trust.
Engberg, Nancy J. YOB: 1956	Vice President and Chief Compliance Officer (since 2011), Virtus Mutual Fund Complex.	Vice President (since 2008) and Chief Compliance Officer (2008 to 2011 and since 2016), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2003) with Virtus affiliates; Vice President (since 2010) and Chief Compliance Officer (since 2011), Virtus Variable Insurance Trust; Vice President and Chief Compliance Officer (since 2011), Virtus Closed-End Funds; Vice President and Chief Compliance Officer (since 2012), The Zweig Closed-End Funds; Vice President and Chief Compliance Officer (since 2013), Virtus Alternative Solutions Trust; Chief Compliance Officer (since 2015), ETFis Series Trust I; and Chief Compliance Officer (since 2015), Virtus ETF Trust II.
Waltman, Francis G. YOB: 1962	Executive Vice President (since 2013), and Senior Vice President (2008 to 2013), Virtus Mutual Fund Complex.	Executive Vice President, Product Development (since 2009), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various senior officer positions (since 2006) with Virtus affiliates; Executive Vice President (since 2013), and Senior Vice President (2010 to 2013), Virtus Variable Insurance Trust; Executive Vice President (since 2013), and Senior Vice President (2011 to 2013), Virtus Closed-End Funds; Director (since 2013), Virtus Global Funds PLC; and Executive Vice President (since 2013), Virtus Alternative Solutions Trust.

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Leadership Structure and the Board of Trustees

The Board is currently composed of eleven trustees, including ten 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) and (b) the passage of time. As a result of this balance, it is believed that Mr. McLoughlin has the ability to provide independent oversight of the Trust’s operations within the context of his detailed understanding of the perspective of the Adviser and the Trust’s other service providers. The Board therefore considers leadership by Mr. McLoughlin as enhancing the Board’s ability to provide effective independent oversight of the Trust’s operations and meaningful representation of the shareholders’ interests.

The Board also believes that having a super-majority of Independent Trustees is appropriate and in the best interest of the Funds’ shareholders. Nevertheless, the Board also believes that having an interested person serve on the Board brings corporate and financial viewpoints that are, in the Board’s view, crucial elements in its decision-making process. In addition, the Board believes that Mr. Aylward, who is currently the Chairman and President of the Adviser, and the President and Chief Executive Officer of Virtus, and serves in various executive roles with other affiliates of the Adviser who provide services to the Trust, provides the Board with the Adviser’s perspective in managing and sponsoring the Virtus Mutual Funds as well as the perspective of other service providers to the Trust. The leadership structure of the Board may be changed at any time and in the discretion of the Board, including in response to changes in circumstances or the characteristics of the Trust.

The Board has established several standing committees to oversee particular aspects of the Funds’ management. The members of each Committee are set forth below:

The Audit Committee

The Audit Committee is responsible for overseeing the Funds’ accounting and auditing policies and practices. The Audit Committee reviews the Funds’ financial reporting procedures, their system of internal control, the independent audit process, and the Funds’ procedures for monitoring compliance with investment restrictions and applicable laws and regulations and with the Code of Ethics. The Audit Committee is composed entirely of Independent Trustees; its members are Thomas J. Brown, Chairperson, Donald C. Burke, Roger A. Gelfenbien, Richard E. Segerson and Ferdinand L.J. Verdonck. The Committee met four times during the Trust's last fiscal year.

The Compliance Committee

The Compliance Committee will be responsible for overseeing the Funds’ compliance matters. The Compliance Committee will oversee and review (1) information provided by the Funds’ officers, including the Funds’ CCO, the Funds’ investment adviser and other principal service providers, and others as appropriate; (2) the codes of ethics; (3) whistleblower reports; (4) cybersecurity programs; and (5) distribution programs. The Compliance Committee will be composed entirely of Independent Trustees; if all Nominees are elected as Trustees, its members will be Hassell H. McClellan, Chairperson, John R. Mallin, Geraldine M. McNamara, and James M. Oates. The Committee was established on May 26, 2016, and therefore did not meet during the Trust's last fiscal year.

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The Executive Committee

The function of the Executive Committee is to serve as a delegate of the full Board, as well as act on behalf of the Board when it is not in session, subject to limitations as set by the Board. The Executive Committee is composed entirely of Independent Trustees; its members are Philip R. McLoughlin, Chairperson, Thomas J. Brown, Hassell H. McClellan and James M. Oates. The Committee did not meet during the Trust's last fiscal year.

The Governance and Nominating Committee

The Governance and Nominating Committee is responsible for developing and maintaining governance principles applicable to the Funds, for nominating individuals to serve as Trustees, including as Independent Trustees, and annually evaluating the Board and Committees. The Governance and Nominating Committee is composed entirely of Independent Trustees; its members are James M. Oates, Chairperson, Philip R. McLoughlin and Geraldine M. McNamara. The Committee met four times during the Trust's last fiscal year.

The Governance and Nominating Committee considers candidates for trusteeship and makes recommendations to the Board with respect to such candidates. There are no specific required qualifications for trusteeship. The committee considers all relevant qualifications of candidates for trusteeship, such as industry knowledge and experience, financial expertise, current employment and other board memberships, and whether the candidate would be qualified to be considered an Independent Trustee. The Board believes that having among its members a diversity of viewpoints, skills and experience and a variety of complementary skills enhances the effectiveness of the Board in its oversight role. The committee considers the qualifications of candidates for trusteeship in this context.

The Board has adopted a policy for consideration of Trustee nominees recommended by shareholders. With regards to such policy, an individual shareholder or shareholder group submitting a nomination must hold either individually or in the aggregate for at least one full year as of the date of nomination 5% of the shares of a series of the Trust, among other qualifications and restrictions. Shareholders or shareholder groups submitting nominees must comply with all requirements set forth in the Trust’s policy for consideration of Trustee nominees recommended by shareholders and any such submission must be in writing, directed to the Trust’s secretary. Any shareholder nominee recommendations should be sent to the attention of the committee in care of the Trust’s Secretary, and should include biographical information, including business experience for the past ten years and a description of the qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to be an Independent Trustee, if applicable. Shareholder nominees for Trustee will be given the same consideration as any candidate provided the nominee meets certain minimum requirements.

Information about Each Trustee’s Qualification, Experience, Attributes or Skills

In addition to the information set forth above, the following provides further information about each Trustee’s specific experience, qualifications, attributes or skills. The information in this section should not be understood to mean that any of the Trustees is an “expert” within the meaning of the federal securities laws.

George R. Aylward

In addition to his positions with the Trust, Mr. Aylward is a Director and the President and Chief Executive Officer of Virtus, the ultimate parent company of the Adviser. He also holds various executive positions with the Adviser, certain Funds’ subadvisers, the Distributor and the Administrator to the Trust, and various of their affiliates, and previously held such positions with the former parent company of Virtus. He therefore has experience in all aspects of the development and management of registered investment companies, and the handling of various financial, staffing, regulatory and operational issues. Mr. Aylward is a certified public accountant and holds an MBA, and he also serves as an officer and director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

Thomas J. Brown

Mr. Brown, currently retired, was employed in senior business and accounting roles with financial services companies for over twenty-five years, and he has over sixteen years of experience as a director/trustee of unaffiliated funds. Mr. Brown is also a trustee of several other open-end funds managed by the Adviser.

Donald C. Burke

Mr. Burke, currently retired, has extensive experience with mutual funds, including as president and Chief Executive Officer of a major fund complex, and subsequently as an independent trustee of another major fund complex. He also has extensive knowledge of the utility industry, derived from his service on the board of a public company involved in the production, transmission and distribution of energy. He is also a director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

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Roger A. Gelfenbien

Mr. Gelfenbien, currently retired, was employed as an accountant and consultant in the financial services sector for over thirty years, as well as having over eleven years experience with an unaffiliated fund as a director. Mr. Gelfenbien is also a trustee of several other open-end funds managed by the Adviser.

John R. Mallin

Mr. Mallin is a real estate partner and former practice group leader for the Real Property Practice Group at McCarter & English LLP. During his career, he has been involved in all aspects of real estate development and financial transactions related to real estate. Mr. Mallin also has oversight and corporate governance experience as a director, including as a chair, of non-profit entities. Mr. Mallin is also a trustee of several other open-end funds managed by the Adviser.

Hassell H. McClellan

Mr. McClellan, currently retired, has extensive business experience in advising and consulting with companies to improve the companies’ management and operations, as well as serving as a business educator at several colleges. Mr. McClellan also has over twelve years of experience as a director of unaffiliated funds. Mr. McClellan is also a trustee of several other open-end funds managed by the Adviser.

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/trustee of several other open-end and closed-end funds managed by the Adviser and its affiliates.

Geraldine M. McNamara

Ms. McNamara was an executive at U.S. Trust Company of New York for 24 years, where she rose to the position of Managing Director. Her responsibilities at U.S. Trust included the oversight of U.S. Trust’s personal banking business. In addition to her managerial and banking experience, Ms. McNamara has experience in advising individuals on their personal financial management, which has given her an enhanced understanding of the goals and expectations that individual investors may have. Ms. McNamara is also a trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

James M. Oates

Mr. Oates was instrumental in the founding of a private global finance, portfolio management and administration company, and he has also served in executive and director roles for various types of financial services companies. As a senior officer and director of investment management companies, Mr. Oates has experience in investment management. He also previously served as chief executive officer of two banks, and holds an MBA. Mr. Oates also has experience as a director of other publicly traded companies and has served for a number of years as the Chairman of the Board of a large family of mutual funds unaffiliated with the Trust. Mr. Oates is also a director/trustee of several open-end and closed-end funds managed by the Adviser and its affiliates.

Richard E. Segerson

Mr. Segerson has served in financial and other executive roles with various operating companies, including serving as the Chief Financial Officer, Controller and Chief Operating Officer of such entities. These roles have provided him with an understanding of financial and operational issues, as has his experience as a public accountant. Mr. Segerson also has over 30 years of experience serving as a trustee to various mutual funds, and he holds an MBA. Mr. Segerson also has served for a number of years as the Managing Director of a family office, providing wealth management services to individuals. This experience enhances his understanding of the perspective of individual fund shareholders. Mr. Segerson is also a trustee of several other open-end funds managed by the Adviser.

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

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has served for more than 25 years on the boards and audit committees of various U.S. and foreign companies. He is also a trustee of several other open-end funds managed by the Adviser.

Board Oversight of Risk Management

As a registered investment company, the Trust is subject to a variety of risks, including investment risks, financial risks, compliance risks and regulatory risks. As part of its overall activities, the Board oversees the management of the Trust’s risk management structure by the Trust’s Adviser, Administrator, Distributor, officers and others. The responsibility to manage the Funds’ risk management structure on a day-to-day basis is subsumed within the other responsibilities of these parties.

The Board considers risk management issues as part of its general oversight responsibilities throughout the year at regular meetings of the Board and its committees, and within the context of any ad hoc communications with the Trust’s service providers and officers. The Trust’s Adviser, subadvisers, Distributor, 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, 2015

As of December 31, 2015, the Trustees beneficially owned shares of the Funds as set forth in the table below.

Independent Trustees	Dollar Range of Equity Securities in a Fund of the Trust (1)	Aggregate Dollar Range of Trustee Ownership in all Funds Overseen by Trustee in Family of Investment Companies (1)
Thomas J Brown (2)	None	None
Donald C. Burke (2)	None	Over $100,000
Roger A. Gelfenbien (2)	None	None
John R. Mallin (2)	None	None
Hassell H. McClellan	None	None

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Independent Trustees	Dollar Range of Equity Securities in a Fund of the Trust (1)	Aggregate Dollar Range of Trustee Ownership in all Funds Overseen by Trustee in Family of Investment Companies (1)
Philip McLoughlin	EM Debt Fund – $10,001-$50,000 EM Equity Income Fund – $10,001-$50,000 EM Opportunities Fund – Over $100,000 Equity Trend Fund – $10,001-$50,000 Foreign Opportunities Fund – $10,001-$50,000 Global Infrastructure Fund – $50,001-$100,000 Herzfeld Fund – $10,001-$50,000 International Real Estate Fund – $1-$10,000 International Wealth Masters Fund – $10,001-$50,000 Multi-Sector Short Term Bond Fund – $10,001-$50,000 Real Estate Fund – $50,001-$100,000 Sector Trend Fund – $10,001-$50,000 Senior Floating Rate Fund – $1-$10,000	Over $100,000
Geraldine M. McNamara	EM Opportunities Fund – $10,001-$50,000 Foreign Opportunities Fund – $50,001-$100,000 Global Infrastructure Fund – Over $100,000 Low Duration Income Fund – Over $100,000 Multi-Sector Short Term Bond Fund – over $100,000 Real Estate Fund – $50,001-$100,000 Senior Floating Rate Fund – $10,001-$50,000	Over $100,000
James M. Oates	EM Opportunities Fund – $50,001-$100,000 Foreign Opportunities Fund – Over $100,000 Global Infrastructure Fund – $10,001-$50,000 Global Opportunities Fund – Over $100,000 Herzfeld Fund – Over $100,000 International Equity Fund – $10,001-$50,000 Wealth Masters Fund – $10,001-$50,000	Over $100,000
Richard E. Segerson	Equity Trend Fund – $10,001-$50,000 Foreign Opportunities Fund – $10,001-$50,000 Multi-Sector Short Term Bond Fund – $10,001-$50,000 Real Estate Fund – $10,001-$50,000	Over $100,000
Ferdinand L.J. Verdonck	EM Opportunities Fund $10,001-$50,000 Foreign Opportunities Fund – $10,001-$50,000 Global Infrastructure Fund – $10,001-$50,000 Multi-Sector Intermediate Bond Fund – $10,001-$50,000 Real Estate Fund – $1-$10,000	Over $100,000

(1)

Holdings exclude any exposure through the Deferred Compensation Plan, which may be counted towards the Trustee Ownership Policy but are not considered ownership for any other purpose

(2)

Became a Trustee effective May 26, 2016.

Interested Trustee
George R. Aylward			Alternatives Diversifier Fund – $1-$10,000 Equity Trend Fund – $10,001-$50,000 Foreign Opportunities Fund – $1-$10,000 Herzfeld Fund – $10,001-$50,000 Multi-Sector Short Term Bond Fund – Over $100,000			Over $100,000

As of September 8, 2016, the Trustees and officers as a group owned less than 1% of the then outstanding shares of any of the Funds.

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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 September 30, 2015, the current Trustees received the following compensation:

	Aggregate Compensation from Trust	Total Compensation From Trust and Fund Complex Paid to Trustees
Independent Trustees
Hassell H. McClellan	$154,561	$314,000 (55 Funds)
Philip R. McLoughlin	$244,427	$722,000 (69 funds)
Geraldine M. McNamara	$168,352	$389,406 (59 funds)
James M. Oates	$172,706	$374,500 (56 funds)
Richard E. Segerson	$168,352	$243,000 (46 funds)
Ferdinand L.J. Verdonck	$168,352	$243,000 (46 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 Code of Ethics for Chief Executive and Senior Financial Officers as required by Section 406 of the Sarbanes-Oxley Act of 2002.

Proxy Voting Policies

The Trust has adopted 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.

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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 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 September 8, 2016, the persons who owned of record, or were known by the Trust to own beneficially, 5% or more of the outstanding shares of any class of the Funds included in this SAI are shown in Appendix B — Control Persons and Principal Shareholders.

INVESTMENT ADVISORY AND OTHER SERVICES

Investment Adviser

The investment adviser to each of the Funds is Virtus 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 September 30, 2015, 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, 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, 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

Investment Advisory Fee

Alternatives Diversifier

0.00%

Essential Resources Fund

1.10%

Tax-Exempt Bond Fund

0.45%

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Fund	Investment Advisory Fee
	1 st $1 Billion	$1+ Billion through $2 Billion		$2+ Billion
CA Tax-Exempt Bond Fund	0.45%		0.40 %		0.35 %
Global Infrastructure Fund	0.65%		0.60 %		0.55 %
Global Opportunities Fund	0.85%		0.80 %		0.75 %
Global Real Estate Fund	0.85%		0.80 %		0.75 %
High Yield Fund	0.65%		0.60 %		0.55 %
International Real Estate Fund	1.00%		0.95 %		0.90 %
Low Duration Income Fund	0.55%		0.50 %		0.45 %
Multi-Sector Intermediate Bond Fund	0.55%		0.50 %		0.45 %
Real Estate Fund	0.75%		0.70 %		0.65 %
Senior Floating Rate Fund	0.60%		0.55 %		0.50 %
	1 st $2 Billion	$2+ Billion through $4 Billion		$4+ Billion
Foreign Opportunities Fund	0.85%		0.80 %		0.75 %
Global Equity Trend Fund	1.00%		0.95 %		0.90 %
International Equity Fund	0.85%		0.80 %		0.75 %
Low Volatility Fund	0.95%		0.90 %		0.85 %
Multi-Asset Trend Fund	1.00%		0.95 %		0.90 %
		1 st $1 Billion		$1+ Billion
Bond Fund			0.45 %		0.40 %
EM Debt Fund			0.75 %		0.70 %
EM Equity Income Fund			1.05 %		1.00 %
EM Opportunities Fund			1.00 %		0.95 %
EM Small-Cap Fund			1.20 %		1.15 %
Greater European Fund			0.85 %		0.80 %
Herzfeld Fund			1.00 %		0.95 %
International Small-Cap Fund			1.00 %		0.95 %
International Wealth Masters Fund			0.90 %		0.85 %
Sector Trend Fund			0.45 %		0.40 %
Wealth Masters Fund			0.85 %		0.80 %
	1 st $10 Billion	$10+ Billion
Equity Trend Fund	1.00%		0.95 %
	1 st $1 Billion	$1+ Billion through $2 Billion		$2+ Billion through $10 Billion		$10+ Billion
Multi-Sector Short Term Bond Fund	0.55%		0.50 %		0.45 %		0.425 %

VIA may waive any portion of its investment advisory fees or reimburse Fund expenses from time to time. VIA has contractually agreed to limit the annual operating expenses (excluding dividend and interest, expenses, brokerage commissions, taxes, extraordinary expenses and acquired fund fees and expenses (if any)) of Low Duration Income Fund and Tax-Exempt Bond Fund through September 30, 2017 and of all other Funds through January 31, 2017 (expressed as a percentage of daily net assets):

	Class A	Class B		Class C		Class I		Class R6		Class T
Bond Fund	0.85%		1.60 %		1.60 %		0.60 %		N/A		N/A
CA Tax-Exempt Bond Fund	0.85%		N/A		N/A		0.60 %		N/A		N/A
EM Debt Fund	1.35%		N/A		2.10 %		1.10 %		N/A		N/A
EM Equity Income Fund	1.75%		N/A		2.50 %		1.50 %		N/A		N/A
EM Small-Cap Fund	1.85%		N/A		2.60 %		1.60 %		N/A		N/A
Equity Trend Fund	1.70%		N/A		2.45 %		1.45 %		1.38 %		N/A
Essential Resources Fund	1.65%		N/A		2.40 %		1.40 %		N/A		N/A
Global Equity Trend Fund	1.75%		N/A		2.50 %		1.50 %		N/A		N/A
Global Opportunities Fund	1.55%		2.30 %		2.30 %		1.30 %		N/A		N/A

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	Class A	Class B		Class C		Class I		Class R6		Class T
Global Real Estate Fund	1.40%		N/A		2.15 %		1.15 %		N/A		N/A
Greater European Fund	1.45%		N/A		2.20 %		1.20 %		N/A		N/A
Herzfeld Fund	1.60%		N/A		2.35 %		1.35 %		N/A		N/A
High Yield Fund	1.15%		1.90 %		1.90 %		0.90 %		N/A		N/A
International Equity Fund	1.50%		N/A		2.25 %		1.25 %		N/A		N/A
International Real Estate Fund	1.50%		N/A		2.25 %		1.25 %		N/A		N/A
International Small-Cap Fund	1.60%		N/A		2.35 %		1.35 %		1.26 %		N/A
International Wealth Masters Fund	1.55%		N/A		2.30 %		1.30 %		N/A		N/A
Low Duration Income Fund	0.75%		N/A		1.50 %		N/A		0.50 %		N/A
Low Volatility Equity Fund	1.55%		N/A		2.30 %		1.30 %		N/A		N/A
Multi-Asset Trend Fund	1.75%		N/A		2.50 %		1.50 %		N/A		N/A
Multi-Sector Short Term Bond Fund	1.10%		1.60 %		1.35 %		0.85 %		N/A		1.85 %
Senior Floating Rate Fund (1)	1.20%		N/A		1.95 %		0.95 %		N/A		N/A
Tax-Exempt Bond Fund	0.85%		N/A		1.60 %		N/A		0.60 %		N/A
Wealth Masters Fund	1.45%		N/A		2.20 %		1.20 %		N/A		N/A

(1)

Excludes leverage expenses, if any.

Following the contractual period, if any, the Adviser may discontinue the expense caps at any time. The Adviser may recapture operating expenses reimbursed under this arrangement, for a period of three years following the fiscal year in which such reimbursement occurred, subject to certain conditions.

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 or by a vote of the majority of the outstanding shares of such Fund and (2) the terms and any renewal of the agreement with respect to such Fund have been approved by the vote of a majority of the Trustees who are not parties to the agreement or interested persons, as that term is defined in the 1940 Act, of the Trust or the relevant Adviser, cast in person at a meeting called for the purpose of voting on such approval. On sixty days’ written notice and without penalty the agreement may be terminated as to the Trust or as to a Fund by the Board or by the relevant Adviser and may be terminated as to a Fund by a vote of the majority of the outstanding shares of such Fund. The Agreement automatically terminates upon its assignment (within the meaning of the 1940 Act). The agreement provides that upon its termination, or at the request of the relevant Adviser, the Trust will eliminate all reference to Virtus from its name, and will not thereafter transact business in a name using the word Virtus.

Adviser Affiliates

George Aylward, 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 and Chief Financial Officer; 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.

For services to the Funds during the fiscal years ended September 30, 2013, 2014 and 2015 the Adviser received fees of $139,392,140, $218,534,628 and $161,006,705, respectively, under the investment advisory agreements in effect. Of these totals, the Adviser received fees from each Fund as follows:

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	Gross Advisory Fee ($)						Advisory Fee Waived and/or Expenses Reimbursed ($)						Net Advisory Fee ($)
Fund	2013		2014		2015		2013		2014		2015		2013		2014		2015
Alternatives Diversifier Fund		N/A		N/A		N/A		75,069		N/A		N/A		(75,069 )		N/A		N/A
Bond Fund		459,077		361,464		345,204		222,422		197,383		205,945		236,655		164,081		139,259
CA Tax-Exempt Bond Fund		241,206		187,631		152,183		99,886		102,965		110,116		141,323		84,666		42,067
EM Debt Fund		209,569		225,525		219,620		63,649		40,094		39,412		145,920		185,431		180,208
EM Equity Income Fund		74,141		698,005		721,560		95,377		13,063		5,508		21,236		684,942		716,052
EM Small-Cap Fund		N/A		31,545		54,032		N/A		79,695		78,771		N/A		(48,150 )		(24,739 )
Equity Trend Fund		48,240,325		80,240,592		48,366,683		N/A		N/A		N/A		48,240,325		80,240,592		48,366,683
Essential Resources Fund		0		0		27,213		0		0		113,490		0		0		(86,277 )
Foreign Opportunities Fund		12,823,198		16,102,721		16,385,696		N/A		N/A		N/A		12,823,198		16,102,721		16,385,696
Global Equity Trend		1,107,451		2,214,660		1,405,850		N/A		N/A		N/A		1,107,451		2,214,660		1,405,850
Global Infrastructure Fund		791,485		929,987		1,139,495		N/A		N/A		N/A		791,485		929,987		1,139,495
Global Opportunities Fund		903,383		1,005,754		1,167,887		(56,144 )		(24,815 )		N/A		(959,527 )		1,030,569		1,167,887
Global Real Estate Fund		295,391		398,371		644,721		90,145		79,379		78,920		205,246		318,992		565,801
Greater European Fund		96,791		432,063		164,705		87,476		79,818		84,670		9,315		352,245		80,035
Herzfeld Fund		49,034		161,708		318,937		67,663		55,653		39,709		(18,629 )		106,055		279,228
High Yield Fund		672,085		589,524		570,902		161,344		149,806		147,710		510,741		439,718		423,192
International Equity Fund		194,205		68,067		77,987		66,903		74,200		72,176		127,302		(6,133 )		5,811
International Real Estate Fund		388,317		436,457		422,074		95,019		99,999		114,355		293,298		336,458		307,719
International Small-Cap Fund		96,179		432,063		494,889		84,361		60,034		67,372		11,548		372,029		427,517
International Wealth Masters Fund		0		0		40,306		0		0		101,091		0		0		(60,785 )
Low Volatility Fund		4,498		18,636		43,369		29,374		81,438		55,457		(24,876 )		(62,802 )		(12,088 )
Multi-Asset Trend Fund		5,042,988		7,913,586		5,544,092		N/A		N/A		N/A		5,042,988		7,913,586		5,544,092
Multi-Sector Intermediate Bond Fund		2,353,736		2,001,508		1,985,853		N/A		N/A		15,651		2,353,736		2,001,508		1,970,202
Multi-Sector Short Term Bond Fund		36,323,212		40,406,445		39,612,385		N/A		N/A		95,780		36,323,212		40,406,445		39,516,605
Real Estate Fund		10,113,100		10,618,109		11,537,537		N/A		N/A		N/A		10,113,100		10,618,109		11,537,537
Sector Trend Fund		2,418,021		3,671,100		3,603,337		N/A		N/A		N/A		2,418,021		3,671,100		3,603,337
Senior Floating Rate Fund		3,858,787		6,085,858		4,688,491		N/A		N/A		14,140		3,858,787		6,085,858		4,674,351
Wealth Masters Fund		31,634		902,867		1,248,952		96,102		8,041		13,526		(64,468 )		894,826		1,235,426
EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no fees were paid to the Adviser for those funds for the fiscal years indicated.

Subadvisers and Subadvisory Agreements

VIA has entered into subadvisory agreements with respect to certain Funds. 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. The subadvisory fees are paid by VIA out of its advisory fees from the Funds.

Duff & Phelps Investment Management Co. — Global Infrastructure Fund, Global Real Estate Fund, International Real Estate Fund and Real Estate Fund

Duff & Phelps is located at 200 S. Wacker Drive, Suite 500, Chicago, IL 60606, is an indirect, wholly-owned subsidiary of Virtus and an affiliate of VIA. Duff & Phelps acts as adviser and subadviser to open- and closed-end funds and as investment adviser to institutions and individuals. As of September 30, 2015, Duff & Phelps had approximately $9.5 billion in assets under management.

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

Thomas J. Herzfeld Advisors, Inc. — Herzfeld Fund

Herzfeld is located at 119 Washington Avenue, Suite 504, Miami, FL 33139. Herzfeld has specialized in the closed-end fund industry since its founding in 1984. As of September 30, 2015, Herzfeld had $275 million in assets under management.

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For its services as subadviser, VIA pays Herzfeld a fee at the rate of 50% of the net advisory fee paid by Herzfeld Fund.

Horizon Asset Management LLC — International Wealth Masters Fund and Wealth Masters Fund

Horizon is located at 470 Park Avenue South, New York, NY 10016 and has been an investment adviser since 1994. Horizon is owned by Horizon Kinetics LLC (“Horizon Kinetics”), an independently owned and operated firm formed in May 2011. As of September 30, 2015, Horizon Kinetics had approximately $7.6 billion in assets under management.

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

Kayne Anderson Rudnick Investment Management, LLC — EM Small-Cap Fund and International Small-Cap Fund

Kayne Anderson Rudnick is located at 1800 Avenue of the Stars, 2 nd Floor, Los Angeles, CA 90067 and is a wholly-owned indirect subsidiary of Virtus and an affiliate of VIA. Kayne Anderson Rudnick also serves as subadviser for other mutual funds. As of September 30, 2015, Kayne Anderson Rudnick had approximately $9.1 billion in assets under management.

For its service as a subadviser, VIA pays Kayne Anderson Rudnick a fee at the rate of 50% of the net advisory fee paid by each fund for which Kayne Anderson Rudnick acts as subadviser.

KBI Global Investors (North America) Ltd. — EM Equity Income Fund and Essential Resources Fund

KBIGI (North America) is located at 3 rd Floor, 2 Harbourmaster Place, IFSC, Dublin 1, Ireland, and with a registered office at One Rockefeller Plaza, 32nd Floor, New York, NY 10020. As of September 30, 2015, KBIGI (North America) and KBI Global Investors Ltd. had $7.9 billion in combined assets under management.

For its services as subadviser, VIA pays KBIGI (North America) a fee at the rate of 50% of the net advisory fee paid by each fund for which KBIGI (North America) acts as subadviser.

Newfleet Asset Management, LLC — Bond Fund, CA Tax-Exempt Bond Fund, EM Debt Fund, High Yield Fund, Low Duration Income Fund, Multi-Sector Intermediate Bond Fund, Multi-Sector Short Term Bond Fund, Senior Floating Rate Fund and Tax-Exempt Bond Fund

Newfleet is located at 100 Pearl Street, Hartford, CT and 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 September 30, 2015, Newfleet had approximately $11.8 billion in assets under management.

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

Rampart Investment Management Company, LLC — Low Volatility Fund

Rampart is located at One International Place, 14 th Floor, Boston, MA 02110 and is an indirect wholly-owned subsidiary of Virtus and an affiliate of VIA. Rampart has been an investment adviser since 1983 and provides investment management services to mutual funds, institutions and high net worth investors. As of September 30, 2015, Rampart had approximately $598 million in assets under management.

For its services as subadviser, VIA pays Rampart a fee at the rate of 50% of the net advisory fee paid by Low Volatility Fund.

Vontobel Asset Management, Inc. — EM Opportunities Fund, Foreign Opportunities Fund, Global Opportunities Fund and Greater European Fund

Vontobel is located at 1540 Broadway, 38 th Floor, New York, NY 10036 and is a wholly-owned subsidiary of Vontobel Holding AG, a Swiss bank holding company which is traded on the Swiss Stock Exchange. As of September 30, 2015, Vontobel had in excess of $46 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 September 30, 2013, 2014 and 2015.

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	Gross Subadvisory Fee ($)						Subadvisory Fee and/or Expenses Reimbursed ($)						Net Subadvisory Fee ($)
Fund	2013		2014		2015		2013		2014		2015		2013		2014		2015
Alternatives Diversifier Fund		0		0		0		37,535		0		0		(37,535 )		0		0
Bond Fund		229,539		180,732		172,602		111,211		98,691		102,972		118,328		82,041		69,630
CA Tax-Exempt Bond Fund		120,603		93,816		76,092		49,943		51,483		55,058		70,660		42,333		21,034
EM Debt Fund		104,785		112,762		109,810		31,824		20,047		19,706		72,961		92,716		90,104
EM Equity Income Fund		37,071		349,002		360,780		47,689		6,531		7,420		(10,618 )		342,471		353,360
EM Small-Cap Fund		0		15,658		27,017		0		39,847		39,386		0		(24,189 )		(12,369 )
Equity Trend Fund		33,768,227		56,168,415		28,978,934		0		0		0		33,768,227		56,168,415		28,978,934
Essential Resources Fund		0		0		13,607		0		0		56,745		0		0		(43,139 )
Foreign Opportunities Fund		6,411,599		8,051,360		8,192,849		0		0		0		6,411,599		8,051,360		8,192,849
Global Equity Trend Fund		775,216		1,550,262		835,002		(27,559 )		(22,766 )		0		802,775		1,573,028		835,002
Global Infrastructure Fund		395,743		464,994		569,748		0		0		0		395,743		464,994		569,748
Global Opportunities Fund		451,692		502,877		583,943		(28,071 )		0		0		479,763		502,877		583,943
Global Real Estate Fund		147,695		199,186		322,361		45,073		39,689		39,460		102,623		159,496		282,901
Greater European Fund		48,395		72,668		82,353		43,738		39,908		42,335		4,657		32,760		40,018
Herzfeld Fund		24,517		80,854		159,469		33,832		27,826		19,855		(9,314 )		53,028		139,614
High Yield Fund		336,042		294,762		285,451		80,672		74,903		73,856		255,370		219,859		0
International Equity Fund		97,102		34,033		38,994		33,452		37,100		36,088		63,651		(3,067 )		2,906
International Real Estate Fund		194,158		218,229		211,037		47,510		50,000		57,178		146,649		168,229		153,860
International Small-Cap Fund		48,090		216,038		247,445		42,316		30,017		33,681		5,774		186,021		213,764
International Wealth Masters Fund		0		0		20,154		0		0		50,546		0		0		(30,392 )
Virtus Low Volatility Equity Fund		2,249		9,318		21,685		14,687		40,719		27,729		(12,438 )		(31,401 )		(6,044 )
Multi-Asset Trend Fund		3,530,091		5,539,510		3,221,251		0		0		0		3,530,091		5,539,510		3,221,251
Multi-Sector Intermediate Bond Fund		1,176,868		1,000,754		992,926		0		0		7,825		1,176,868		1,000,754		985,101
Multi-Sector Short Term Bond Fund		18,161,606		20,203,222		19,806,192		0		0		47,889		18,161,606		20,203,222		19,758,303
Real Estate Fund		5,056,550		5,309,054		5,768.769		0		0		0		5,056,550		5,309,054		5,768,769
Sector Trend Fund		1,692,615		2,365,820		1,829,321		0		0		0		1,692,615		2,365,820		1,829,321
Senior Floating Rate Fund		1,929,394		3,042,929		2,344,246		0		0		7,070		1,929,394		3,042,929		2,337,176
Wealth Masters Fund		15,817		451,433		624,477		48,051		4,021		8,617		(32,234 )		447,413		615,860
EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no fees were paid to the subdvisers for those funds for the fiscal years indicated.

Administrator

Virtus Fund Services, LLC ("VFS") is the administrator of the Trust. VFS is an indirect, wholly-owned subsidiary of Virtus and an affiliate of the Adviser. For its services as administrator, VFS received an administration fee based upon the average net assets across all series of the Virtus Mutual Funds at the following annual rates:

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

For the purposes of applying the fee breakpoints, the Virtus Mutual Funds’ average net assets may be aggregated with the average net assets of the series of VVIT.

The following table shows the dollar amount of fees paid to the Administrator for the fiscal years ended September 30, 2013, 2014 and 2015 for its administrative services with respect to each Fund.

	Administration Fee ($)
Fund	2013		2014		2015
Alternatives Diversified Fund		174,830		154,925		105,386
Bond Fund		91,938		70,412		73,310
CA Tax-Exempt Bond Fund		45,240		33,441		32,098
EM Debt Fund		18,976		22,321		27,772
EM Equity Income Fund		(1,157 )		57,181		65,532

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	Administration Fee ($)
Fund	2013		2014		2015
EM Small-Cap Fund		0		(591 )		4,161
Equity Trend Fund		4,218,734		6,974,654		4,290,328
Essential Resources		0		0		2,410
Foreign Opportunities Fund		1,447,144		1,806,480		1,852,234
Global Equity Trend		90,527		186,233		124,414
Global Infrastructure Fund		110,867		130,463		168,180
Global Opportunities Fund		95,996		106,779		131,719
Global Real Estate Fund		27,009		38,396		72,577
Greater European Fund		4,512		9,907		18,240
Herzfeld Fund		(3,247 )		9,021		30,311
High Yield Fund		93,268		80,337		84,003
International Equity Fund		15,592		1,209		8,413
International Real Estate Fund		30,968		35,313		40,160
International Small-Cap Fund		1,294		34,900		47,172
International Wealth Masters Fund		0		0		4,464
Low Volatility Equity Fund		(1,700 )		(4,578 )		4,002
Multi-Asset Trend Fund		435,239		682,046		493,743
Multi-Sector Intermediate Bond Fund		406,166		341,791		346,478
Multi-Sector Short Term Bond Fund		7,452,147		8,267,518		8,133,657
Real Estate Fund		1,317,470		1,376,862		1,514,317
Sector Trend Fund		511,396		774,285		767,942
Senior Floating Rate Fund		612,883		966,314		749,743
Wealth Masters Fund		(4,382 )		95,211		140,837
EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no fees were paid to the Administrator for those funds for the fiscal years indicated.

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 series within the Virtus Mutual Funds at the following incremental rates:

	First $15 billion			0.0325%
	$15+ billion to $30 billion			0.0225%
	$30+ billion to $50 billion			0.0075%
	Greater than $50 billion			0.005%

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 FINRA and which is an indirect, wholly-owned subsidiary of Virtus and an affiliate of the Adviser and certain subadvisers, serves as distributor of the Funds’ shares. Fund shares are offered on a continuous basis. The principal office of VP Distributors is located at 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

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dealers and securities brokers with whom it has sales agreements. In addition, VP Distributors may receive payments from the Trust pursuant to the Distribution Plans described below.

During the fiscal years ended September 30, 2013, 2014 and 2015, purchasers of shares of the Funds paid aggregate sales charges of $18,006,520, $18,679,151 and $7,422,956 respectively, of which the Distributor received net commissions of $2,596,868, $3,407,086 and $2,395,878 respectively, for its services, the balance being paid to dealers. For the fiscal year ended September 30, 2015, the Distributor received net commissions of $534,826 for Class A Shares and deferred sales charges of $441,186 for Class A Shares, $65 for Class B Shares, $1,357,812 for Class C Shares and $61,989 for Class T Shares.

The distribution agreement/underwriting agreement may be terminated at any time by 60 days written notice, without payment of a penalty, by the Distributor, by vote of a majority of the appropriate Class of outstanding voting securities of the Funds, or by vote of a majority of the Trust’s Trustees who are not parties to the distribution agreement/underwriting agreement or “interested persons” of any party and who have no direct or indirect financial interest in the operation of the Distribution Plans or in any related agreements. The distribution agreement/underwriting agreement will terminate automatically in the event of its “assignment,” as defined in Section 2(a)(4) of the 1940 Act.

The following table shows the dollar amount of sales charges paid to VP Distributors for the fiscal years ended September 30, 2013, 2014 and 2015, 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.

	Aggregate Underwriting Commissions($)						Amount Retained by the Distributors($)						Amount Reallowed($)
	2013		2014		2015		2013		2014		2015		2013		2014		2015
Alternatives Diversifier Fund		59,290		201,493		2,901		8,765		4,494		519		50,525		196,999		2,382
Bond Fund		56,262		323,276		29,835		10,332		6,669		3,882		45,930		316,607		25,953
CA Tax-Exempt Bond Fund		12,990		25,766		5,342		11,846		158		1,012		1,144		25,608		4,330
EM Debt Fund		20,522		55,746		276,847		2,410		1,211		120		18,112		54,535		276,727
EM Equity Fund		12,200		38,326		2,198		1,121		827		244		11,079		37,499		1,954
EM Small-Cap Fund		—		3.508		8,925		—		472		1,432		—		3,036		7,493
Equity Trend Fund		7,244,089		1,688,404		1,950,241		1,049,773		1,655,594		220,097		6,194,316		32,810		1,730,144
Essential Resources Fund		—		—		—		—		—		—		—		—		—
Foreign Opportunities Fund		1,018,212		8,953,742		217,102		111,080		75,881		21,309		907,132		8,877,861		195,793
Global Equity Trend Fund		202,827		47,748		17,703		28,950		38,912		2,078		173,877		8,836		15,625
Global Infrastructure Fund		421,103		34,511		291,179		51,890		33,365		31,907		369,213		1,146		259,272
Global Opportunities Fund		52,930		11,736		60,678		7,144		6,586		4,662		45,786		5,150		56,016
Global Real Estate Fund		55,289		31,894		75,556		7,811		8,981		8,492		47,478		22,913		67,064
Greater European Fund		66,160		15,676		28,693		8,860		5,539		3,145		57,300		10,137		25,548
Herzfeld Fund		46,636		1,212,423		82,180		4,611		5,257		9,876		42,025		1,207,166		72,304
High Yield Fund		43,198		223,588		39,964		10,159		12,768		4,971		33,039		210,820		34,993
International Equity Fund		400		2,388		10,612		52		2,226		611		348		162		10,001
International Real Estate Fund		23,103		3,803		6,143		3,162		2,959		1,223		19,941		844		4,920
International Small-Cap Fund		1,440		4,642		4,436		190		1,620		492		1,250		3,022		3,944
International Wealth Masters Fund		—		—		24		—		—		3		—		—		21
Low Volatility Equity Fund		572		7,753		4,276		72		995		485		500		6,758		3,791
Multi-Asset Trend Fund		1,344,970		2,991,013		237,118		207,789		251,776		27,143		1,137,181		2,739,237		209,975
Multi-Sector Intermediate Bond Fund		287,052		33,116		125,243		61,494		30,080		15,069		225,558		3,036		110,174
Multi-Sector Short Term Bond Fund		2,545,616		253,339		576,370		392,169		213,538		37,671		2,153,447		39,810		529,699
Real Estate Fund		471,454		57,086		200,218		75,558		31.413		22,922		395,896		25,673		177,296
Sector Trend Fund		716,534		1,227,951		442,740		102,469		190,110		50,583		614,065		1,037,841		392,157
Senior Floating Rate Fund		674,172		136,440		54,929		130,064		135,986		4,839		544,108		454		50,090
Wealth Masters Fund		61,691		218,367		271,923		8,025		115,724		30,546		53,666		102,643		241,377
EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no fees were paid to VP Distributors with respect to Class A Shares for those funds for the fiscal years indicated.

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Dealer Concessions

Class A Shares, Class B Shares, Class C Shares, Class I Shares and Class T Shares Only

Multi-Sector Short Term Bond Fund and Low Duration Income Fund

Amount of Transaction at Offering Price	Sales Charge as Percentage of Offering Price		Sales Charge as Percentage of Net Amount Invested		Dealer Discount or Agency Fee as 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

CA Tax-Exempt Bond Fund, Senior Floating Rate Fund and Tax-Exempt Bond Fund

Amount of Transaction at Offering Price	Sales Charge as Percentage of Offering Price		Sales Charge as Percentage of Amount Invested		Dealer Discount or Agency Fee as 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

Bond Fund, EM Debt Fund, High Yield Fund and Virtus Multi-Sector Intermediate Bond Fund

Amount of Transaction at Offering Price	Sales Charge as Percentage of Offering Price		Sales Charge as Percentage of Amount Invested		Dealer Discount or Agency Fee as 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

Equity Funds, Trend Funds and Alternative Diversifier Fund

Amount of Transaction at Offering Price	Sales Charge as Percentage of Offering Price		Sales Charge as Percentage of Amount Invested		Dealer Discount or Agency Fee as 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. With respect to Class C Shares and Class T Shares of the Short Term Bond Fund, the Distributor does not pay a sales commission on Class C Shares and intends to pay investment dealers a sales commission of 1% of the sale price of Class T Shares sold by such dealers. Your broker, dealer or financial advisor may also charge you additional commissions or fees for their services in selling shares to you provided they notify the Distributor of their intention to do so.

Dealers and other entities that enter into special arrangements with the Distributor may receive compensation for the sale and promotion of shares of the Funds. Such fees are in addition to the sales commissions referenced above and may be based upon the amount of sales of Fund shares by a dealer; the provision of assistance in marketing of Fund shares; access to sales personnel and information dissemination services; provision of recordkeeping and

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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. Dealers must have an aggregate of $50,000 or more per Fund share class to qualify for payment of compensation applicable to that Fund share class.

Dealers and other entities that enter into special arrangements with the Distributor or the Transfer Agent may receive compensation from or on behalf of the Funds for providing certain recordkeeping and related services to the Funds or their shareholders. These fees may also be referred to as shareholder accounting fees, administrative services fees, sub-transfer agent fees or networking fees. They are not for the sale, promotion or marketing of Fund shares.

From its own profits and resources, the Distributor may, from time to time, make payments to qualified wholesalers, registered financial institutions and third party marketers for marketing support services and/or retention of assets. These payments are sometimes referred to as "revenue sharing". Among others, the Distributor has agreed to make such payments for marketing support services to AXA Advisors, LLC. Additionally, for Virtus fixed income funds and the Sector Trend Fund, the Distributor may pay broker-dealers a finder’s fee in an amount equal to 0.50% of eligible Class A Share purchases from $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 of Class A Shares by an account in the name of a qualified employee benefit plan are eligible for a finder’s fee only if such plan has at least 100 eligible employees. A CDSC may be imposed on certain redemptions of such Class A investments within 18 months of purchase. For all Virtus fixed income funds and the Sector Trend Fund, 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 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.

A document containing information about sales charges, including breakpoint (volume) discounts, is available free of charge on the Internet at virtus.com. In the Individual Investors section, go to the tab “Investors Knowledge Base” and click on the link for Breakpoint (Volume) Discounts.

Class R6 Shares Only

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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 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

Virtus Fund Services acts as transfer agent for the Trust. Pursuant to a Transfer Agent and Service Agreement, Virtus Fund Services receives a fee, based on the average net assets at an annual rate ranging from 0.045% to 0.0025%, 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.

Legal Counsel to the Trust and the Independent Trustees

Sullivan & Worcester, LLP, 1666 K Street, NW, Washington, DC 20006, acts as legal counsel to the Trust and its Independent Trustees and reviews certain legal matters for the Trust in connection with the shares offered by the Prospectus.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP serves as the independent registered public accounting firm for the Trust. PwC audits the Trust’s annual financial statements and expresses an opinion thereon. The independent registered public accounting firm also provides other accounting and tax-related services as requested by the Trust from time to time. PwC's business address is Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103.

DISTRIBUTION PLANS

The Trust has adopted a distribution plan for each class of shares (except Class I Shares and Class R6 Shares) (i.e., a plan for the Class A Shares, a plan for the Class B Shares, a plan for the Class C Shares and a plan for the Class T Shares; collectively, the “Plans”) in accordance with Rule 12b-1 under the 1940 Act, to compensate the Distributor for the services it provides and for the expenses it bears under the underwriting agreement. Each class of shares pays a service fee at a rate of 0.25% per annum of the average daily net assets of such class of the Fund and a distribution fee based on average daily net assets at a rate of 0.75% per annum for Class B Shares (0.55% for the Multi-Sector Short Term Bond Fund), at a rate of 0.75% per annum for Class C Shares (0.25% for the Multi-Sector Short Term Bond Fund), and at a rate of 0.75% per annum for Class T Shares.

Expenditures under the Plans may consist of: (i) commissions to sales personnel for selling shares of the Fund (including underwriting fees and financing expenses incurred in connection with the payment of commissions); (ii) compensation, sales incentives and payments to sales, marketing and service personnel; (iii) payments to broker-dealers and other financial institutions which have entered into agreements with the Distributor in the form of the Dealer Agreement for Virtus Mutual Funds for services rendered in connection with the sale and distribution of shares of the Fund; (iv) payment of expenses incurred in sales and promotional activities, including advertising expenditures related to the Fund; (v) the costs of preparing and distributing promotional materials; (vi) the cost of printing the Fund’s Prospectuses and SAI for distribution to potential investors; (vii) expenses related to the cost of financing or providing such financing from the Distributor’s or an affiliate’s resources in connection with the Distributor’s payment of such distribution expenses; and (viii) such other similar services that the Trustees determine are reasonably calculated to result in the sale of shares of the Fund. From the fees received, the Distributor expects to pay a quarterly fee to qualifying broker-dealer firms, as compensation for providing personal services and/or the maintenance of shareholder accounts, with respect to shares sold by such firms. In the case of shares of the Funds being sold to an affiliated fund of funds, fees payable under the Plans shall be paid to the distributor of the fund of funds. This fee will not exceed on an annual basis 0.25% of the average annual NAV of such shares, and will be in addition to sales charges on Fund shares which are re-allowed to such firms. To the extent that the entire amount of the fees received is not paid to such firms, the balance will serve as compensation for personal and account maintenance services furnished by the Distributor. The Distributor also pays to dealers an additional compensation with respect to Class C Shares at the rate of 0.75% of the average annual NAV of that class.

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In order to receive payments under the Plans, participants must meet such qualifications to be established in the sole discretion of the Distributor, such as providing services to the Funds’ shareholders; or providing the Funds with more efficient methods of offering shares to coherent groups of clients, members or prospects of a participant; or providing services permitting bulking of purchases or sales, or transmission of such purchases or sales by computerized tape or other electronic equipment; or providing other processing. Dealers must have an aggregate value of $50,000 or more per Fund CUSIP to qualify for payment in that Fund class.

On a quarterly basis, the Funds’ Board reviews a report on expenditures under the Plans and the purposes for which expenditures were made. The Trustees conduct an additional, more extensive review annually in determining whether the Plans will be continued. By its terms, continuation of the Plans from year to year is contingent on annual approval by a majority of the Funds’ Trustees and by a majority of the Trustees who are not “interested persons” (as defined in the 1940 Act) and who have no direct or indirect financial interest in the operation of the Plans or any related agreements (the “Plan Trustees”). The Plans provide that they may not be amended to increase materially the costs which the Funds may bear pursuant to the Plans without approval of the shareholders of that class of the Funds and that other material amendments to the Plans must be approved by a majority of the Plan Trustees by vote cast in person at a meeting called for the purpose of considering such amendments. The Plans further provide that while they are in effect, the selection and nomination of Trustees who are not “interested persons” shall be committed to the discretion of the Trustees who are not “interested persons.” The Plans may be terminated at any time by vote of the Plan Trustees or a majority of the outstanding shares of the relevant class of the Funds.

Rule 12b-1 Fees Paid

The following table shows Rule 12b-1 Fees paid by the Funds to VP Distributors with respect to Class A Shares, Class B Shares, Class C Shares and Class T Shares of each Fund for which such fees were paid for the period ending September 30, 2015. The Rule 12b-1 Fees were primarily used to compensate broker dealers and financial institutions for services that they provided.

Fund	Rule 12b-1 Fees Paid ($)	Rule 12b-1 Fees Waived ($)
Alternitives Diversifier Fund	166,738	N/A
Bond Fund	148,766	N/A
CA Tax-Exempt Bond Fund	56,441	N/A
EM Debt Fund	38,850	N/A
EM Equity Income Fund	4,536	N/A
EM Small-Cap Fund	1,069	N/A
Equity Trend Fund	6,504,647	N/A
Essential Resources Fund	265	N/A
Foreign Opportunities Fund	1,503,122	N/A
Global Equity Trend Fund	215,657	(6,771)
Global Infrastructure Fund	283,959	N/A
Global Opportunities Fund	85,765	N/A
Global Real Estate Fund	100,350	N/A
Greater European Fund	36,590	N/A
Herzfeld Fund	55,294	N/A
High Yield Fund	203,106	N/A
International Equity Fund	10,487	N/A
International Real Estate Fund	36,777	N/A
International Small-Cap Fund	7,848	N/A
International Wealth Masters Fund	524	N/A
Low Volatility Equity Fund	7,389	N/A
Multi-Asset Trend Fund	848,215	(19,458)
Multi-Sector Intermediate Bond Fund	537,006	N/A
Multi-Sector Short Term Bond Fund	10,021,629	N/A
Real Estate Fund	2,132,334	N/A
Sector Trend Fund	1,353,758	N/A
Senior Floating Rate Fund	1,087,647	N/A
Wealth Masters Fund	250,199	N/A

For the fiscal year ended September 30, 2015, the Funds paid Rule 12b-1 fees in the amount of $58,137,712, of which the Distributor received $48,054,655 and unaffiliated broker-dealers received $11,161,547. The Rule 12b-1 payments

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were used for (1) compensation to dealers, $56,928,943; (2) compensation to sales personnel, $16,954,377; (3) advertising, $3,059,767; (4) printing and mailing of prospectuses to other than current shareholders, $308,408; and (5) other, $711,229.

EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no 12b-1 fees were paid for those funds for the fiscal year indicated.

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

FINRA regards certain distribution fees as asset-based sales charges subject to FINRA sales load limits. FINRA’s maximum sales charge rule may require the Board to suspend distribution fees or amend the Plans. In order to address this issue, the Distributor has contractually agreed with respect to the Rule 12b-1 Plan applicable to Class C Shares of the Low Volatility Fund and the Trend Funds to waive its fees to the extent that such funds’ investments in underlying ETFs with their own 12b-1 fees would otherwise cause the funds to exceed the applicable limits.

PORTFOLIO MANAGERS

Other Accounts Managed by Portfolio Managers and Potential Conflicts of Interest

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

Fund			Portfolio Manager(s)
Alternatives Diversifier Fund			Warun Kumar
Bond Fund			David L. Albrycht Christopher J. Kelleher
CA Tax-Exempt Bond Fund			Timothy M. Heaney
EM Debt Fund			David L. Albrycht Stephen H. Hooker Daniel P. Senecal
EM Equity Income Fund			James Collery David Hogarty John Looby Ian Madden Gareth Maher Massimiliano Tondi
EM Opportunities Fund			Brian Bandsma Matthew Benkendorf Jin Zhang
EM Small-Cap Fund			Craig Thrasher
Equity Trend Fund			Michael Davis Brendan R. Finneran Robert F. Hofeman, Jr. Warun Kumar
Essential Resources Fund			Andros Florides Colm O'Connor Noel O'Halloran
Foreign Opportunities Fund			Matthew Benkendorf Daniel Kranson David Souccar
Global Equity Trend Fund			Michael Davis Brendan R. Finneran Robert F. Hofeman, Jr. Warun Kumar
Global Infrastructure Fund			Connie M. Luecke Randle L. Smith

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Fund			Portfolio Manager(s)
Global Opportunities Fund			Matthew Benkendorf Ramiz Chelat
Global Real Estate Fund			Geoffrey P. Dybas Frank J. Haggerty
Greater European Fund			Daniel Kranson
Herzfeld Fund			Erik M. Herzfeld Thomas J. Herzfeld
High Yield Fund			David L. Albrycht Kyle A. Jennings Francesco Ossino Jonathan R. Stanley
International Equity Fund			Frederick A. Brimberg
International Real Estate Securities Fund			Geoffrey P. Dybas Frank J. Haggerty
International Small-Cap Fund			Craig Stone Craig Thrasher
International Wealth Masters Fund			Matthew Houk Murray Stahl
Low Duration Income Fund			David L. Albrycht Benjamin Caron Christopher J. Kelleher
Low Volatility Fund			Michael Davis Brendan R. Finneran Robert F. Hofeman, Jr. Warun Kumar
Multi-Asset Trend Fund			Michael Davis Brendan R. Finneran Robert F. Hofeman, Jr. Warun Kumar
Multi-Sector Intermediate Bond Fund			David L. Albrycht
Multi-Sector Short Term Bond Fund			David L. Albrycht
Real Estate Fund			Geoffrey P. Dybas Frank J. Haggerty
Sector Trend Fund			Michael Davis Brendan R. Finneran Robert F. Hofeman, Jr. Warun Kumar
Senior Floating Rate Fund			David L. Albrycht Kyle A. Jennings Francesco Ossino
Virtus Tax-Exempt Bond Fund			Timothy M. Heaney Lisa H. Leonard
Wealth Masters Fund			Matthew Houk Murray Stahl

There may be certain inherent conflicts of interest that arise in connection with the portfolio managers’ management of a Fund’s investments and the investments of any other accounts they manage. Such conflicts could include the aggregation of orders for all accounts managed by a particular portfolio manager, the allocation of purchases across all such accounts, the allocation of IPOs and any soft dollar arrangements that the relevant subadviser may have in place that could benefit the Funds and/or such other accounts. The Board has adopted on behalf of the Funds policies and

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procedures designed to address any such conflicts of interest to ensure that all transactions are executed in the best interest of the Funds’ shareholders. Each subadviser is required to certify its compliance with these procedures to the Board on a quarterly basis. There have been no material compliance issues with respect to any of these policies and procedures during the 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 September 30, 2015, 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.

Other Accounts Managed (No Performance-Based Fees)

	Registered Investment Companies		Other Pooled Investment Vehicles (PIVs)		Other Accounts
Portfolio Manager	Number of Accounts	Total Assets	Number of Accounts	Total Assets	Number of Accounts	Total Assets
David L. Albrycht	13	$1.7 billion	1	$22 million	0	$0
Brian Bandsma *	3	$7.3 billion	7	$8.1 billion	18	$6.6 billion
Matthew Benkendorf	1	$14 million	12	$5.4 billion	17	$3.1 billion
Frederick Brimberg *	3	$286 million	0	$0	402	$99.7 million
Ramiz Chelat *	2	$201 million	11	$4.4 billion	20	$3.8 billion
James Collery	9	$2.0 billion	14	$1.5 billion	15	$ 1.8 billion
Michael Davis *	0	$0	0	$0	0	$0
Geoffrey Dybas	1	$86.9 million	1	$24.2 million	11	$588 million
Brendan R. Finneran *	2	$161 million	0	$0	129	$459 million
Andros Florides	0	$0	2	$60.1 million	4	$80.7 million
Frank J. Haggerty, Jr.	1	$86.9 million	1	$24.2 million	11	$588 million
Timothy M. Heaney	1	$192 million	0	$0	16	$200 million
Erik Herzfeld	1	$37 million	0	$0	286	$200 million
Thomas J. Herzfeld	1	$37 million	0	$0	286	$200 million
Robert F. Hofeman, Jr. *	2	$161 million	0	$0	129	$459 million
David Hogarty	9	$2.0 billion	14	$1.5 billion	15	$1.8 billion
Stephen H. Hooker	0	$0	0	$0	0	$0
Matthew Houk	2	$328 million	0	$0	0	$0
Kyle A. Jennings	2	$255 million	1	$5 million	0	$0
Christopher J. Kelleher	4	$702 million	0	$0	0	$0
Daniel Kranson	0	$0	2	$955 million	0	$0
Warun Kumar *	5	$1.75 billion	0	$0	0	$0
John Looby	9	$2.0 billion	14	$1.5 billion	15	$1.8 billion
Connie M. Luecke	1	$101 million	0	$0	0	$0
Ian Madden	9	$2.0 billion	14	$1.5 billion	15	$1.8 billion
Gareth Maher	9	$2.0 billion	14	$1.5 billion	15	$1.8 billion
Colm O'Connor	1	$81.2 million	2	$99.9 million	3	$78.4 million
Noel O'Halloran	1	$4.0 million	13	$769 million	0	$0
Francesco Ossino	2	$272 million	1	$5 million	0	$0
Daniel Senecal	1	$218 million	0	$0	0	$0
Randle L. Smith	1	$101 million	0	$0	0	$0
David Souccar *	5	$2.2 billion	6	$2.1 billion	3	$712 million
Murray Stahl	9	$1.4 billion	1	$102 million	1036	$1.3 billion
Jonathan R. Stanley	3	$490 million	0	$0	0	$0
Craig Stone	6	$549 million	0	$0	406	$2 billion

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Registered Investment Companies

Other Pooled Investment Vehicles
(PIVs)

Other Accounts

Portfolio Manager

Number of
Accounts

Total Assets

Number of
Accounts

Total Assets

Number of
Accounts

Total Assets

Craig Thrasher

$44 million

$7 million

Massimiliano Tondi

$2.0 billion

$1.5 billion

$1.8 billion

Jin Zhang *

$7.3 billion

$6.6 billion

Other Accounts Managed (With Performance-Based Fees)

	Registered Investment Companies		Other Pooled Investment Vehicles (PIVs)		Other Accounts
Portfolio Manager	Number of Accounts	Total Assets	Number of Accounts	Total Assets	Number of Accounts	Total Assets
David Albrycht	1	$89 million	0	$0	0	$0
Brian Bandsma *	0	$0	0	$0	1	$73.3 million
Matthew Benkendorf	0	$0	1	$271 million	0	$0
Ramiz Chelat *	0	$0	1	$304 million	0	$0
James Collery	0	$0	0	$0	2	$349 million
David Hogarty	0	$0	0	$0	2	$349 million
Kyle A. Jennings	1	$89 million	1	$59 million	0	$0
John Looby	0	$0	0	$0	2	$349 million
Ian Madden	0	$0	0	$0	2	$349 million
Gareth Maher	0	$0	0	$0	2	$349 million
Francesco Ossino	1	$89 million	1	$59 million	0	$0
Murray Stahl	0	$0	19	$385 million	6	$262 million
Massimiliano Tondi	0	$0	0	$0	2	$349 million
Jin Zhang *	0	$0	0	$0	1	$73.3 million

As of June 30, 2016

Portfolio Manager Compensation

VIA, Duff & Phelps, Kayne, Newfleet and Rampart

Virtus and certain of its affiliated investment management firms (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			Benchmark(s) and/or Peer Group
Bond Fund			Barclays U.S. Aggregate Bond Index
CA Tax-Exempt Bond Fund			Lipper California Municipal Debt Universe
EM Debt Fund			Lipper Emerging Markets Debt

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Fund			Benchmark(s) and/or Peer Group
Global Infrastructure Fund			MSCI World Infrastructure Sector Capped Index
Global Real Estate Fund			FTSE EPRA NAREIT Developed Rental Index
High Yield Fund			Barclays Capital U.S. High-Yield 2% Issuer Capped Bond Index
International Real Estate Fund			FTSE Global Rental x U.S. Index
International Small-Cap Fund			MSCI ACWI ex U.S. Small Cap Index
Low Duration Income Fund			Lipper Short-Intermediate Investment Grade Funds
Low Volatility Equity Fund			Strategic Insights Alternative US Option Hedge Strategy Fund
Multi-Sector Intermediate Bond Fund			Lipper Multi-Sector Income Funds
Multi-Sector Short Term Bond Fund			Lipper Short Investment Grade Debt Funds
Real Estate Fund			FTSE NAREIT Equity REITs Index
Senior Floating Rate Fund			Lipper Loan Participation Funds
Tax-Exempt Bond Fund			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.

Herzfeld

Thomas J. Herzfeld has an employment contract with Thomas J. Herzfeld Advisors, Inc. at a fixed salary plus bonus based on the profitability of the firm. No specific formula is indicated in the contract. Thomas J. Herzfeld Advisors, Inc. is majority owned by Thomas J. Herzfeld therefore his compensation is directly related to the profitability of the firm.

The compensation of all other employees is at management’s discretion and based on annual year-end reviews or more frequent reviews if requested by the employee. All key personnel are paid by salary and year-end bonus based on the profitability of the firm and the discretion of management.

Employees are paid in cash.

At present, portfolio managers provide input related to their own compensation. There are currently no specific incentives related to specific portfolio performance, but rather to performance of the firm as a whole.

Horizon

Compensation for professional and supervisory personnel for the Fund consists of a salary and discretionary bonus. Salary is typically a function of the skill and experience of the particular individual, and discretionary bonuses are based on the overall contribution to the Firm, but are not tied directly to performance. Additionally, shareholders of the Firm, some of whom are team members that will be responsible for management of the Fund, derive benefits normally associated with the ownership of a profitable corporation such as distributions of profits.

KBI Global Investors (North America) Ltd.

KBI Global Investors’ key personnel are passionate about what they do and determined to succeed. From a remuneration perspective, we conduct regular surveys of industry practice, in terms of variable and fixed pay to ensure that key value generators are retained and incentivised. As part of this process, the firm also takes into account local legislation and guidelines relating to remuneration to prevent excessive risk-taking which has been incorporated into the firm’s Remuneration policy.

The portfolio managers are high conviction investors with a number of different components to compensation and these are set out below:

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Base Salary: Benchmarked to industry.

Variable Pay: The overall company pool is determined by the profitability of KBI Global Investors Ltd. with 30% of Profit before Tax being set aside for variable pay. This pool funds the Annual Bonus and Profit Share.

Annual Bonus: For portfolio managers, the amount paid is based predominantly on relative investment performance for the relevant strategies/funds assessed over 1, 2 and 3 year rolling numbers. This ensures a longer term investment perspective rather than a year by year focus. Senior executives are obliged to take a proportion of the annual bonus in parent company equity which is then locked in for three years. If the executives cease employment with the firm, a portion of this equity is forfeited.

Retention Programme: In 2010, selected employees were granted company shares to the value of 10% of the value of KBIGI (North America). This was originally a 5 year programme and, as we come close to vesting, the company has put additional retention arrangements in place for employees in key positions. This extends the retention programme into 2017 and is structured as a minimum guaranteed value with potential upside if business targets are achieved. It is complementary to normal profit share and bonus arrangements.

Profit Share: Secondly, we have also an ongoing profit sharing scheme in operation which has additional built in lock-ins. 30% of PBT is set aside and, any funds remaining after annual bonus awards, is distributed among selected key employees. Payments under the profit sharing scheme are through a combination of cash, parent company equity and units in KBIGI (North America) funds. Equity and fund holdings are held in trust for a three year period with forfeiture provisions if the individual leaves the firm.

Vontobel Asset Management

Portfolio managers are paid a competitive base salary by Vontobel. Their incentive compensation is tied to the investment fees generated by the strategies they manage or co-manage. 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 portion of such incentive compensation is subject to three-year deferrals. All amounts deferred must be invested in publicly traded mutual funds or non-registered commingled funds managed or subadvised by Vontobel. 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 September 30, 2015:

Portfolio Manager	Dollar Range of Equity Securities Beneficially Owned in Fund Managed
David L. Albrycht	Bond Fund	None
	EM Debt Fund	None
	High Yield Fund	None
	Multi-Sector Intermediate Bond Fund	$10,001 - $100,000
	Multi-Sector Short Term Bond Fund	$10,001 - $100,000
	Senior Floating Rate Fund	None
Brian Bandsma *	EM Opportunities Fund	None
Matthew Benkendorf	EM Opportunities Fund	None
	Foreign Opportunities Fund	None
	Global Opportunities Fund	Over $1,000,000
Frederick A. Brimberg *	International Equity Fund	$10,001 - $100,000
Ramiz Chelat *	EM Opportunities Fund	None
James Collery	EM Equity Income Fund	None
Michael Davis *	Equity Trend Fund Global Equity Trend Fund Low Volatility Fund Multi-Asset Trend Fund Sector Trend Fund	None None None None None
Geoffrey Dybas	Global Real Estate Fund	$100,001 - $500,000
	International Real Estate Fund	$10,001 - $100,000
	Real Estate Fund	$100,001- $500,000

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Portfolio Manager	Dollar Range of Equity Securities Beneficially Owned in Fund Managed
Brendan R. Finneran *	Equity Trend Fund Global Equity Trend Fund Low Volatility Fund Multi-Asset Trend Fund Sector Trend Fund	None None $10,001 - $100,000 None None
Andros Florides	Essential Resources Fund	None
Frank J. Haggerty, Jr.	Global Real Estate Fund	None
	International Real Estate Fund	$10,001 - $100,000
	Real Estate Fund	$10,001 - $100,000
Timothy M. Heaney	CA Tax-Exempt Bond Fund	None
Erik M. Herzfeld	Herzfeld Fund	$500,001 - $1,000,000
Thomas J. Herzfeld	Herzfeld Fund	$100,001 - $500,000
Robert F. Hofeman, Jr. *	Equity Trend Fund Global Equity Trend Fund Low Volatility Fund Multi-Asset Trend Fund Sector Trend Fund	None None $10,001 - $100,000 None None
David Hogarty	EM Equity Income Fund	None
Stephen H. Hooker	EM Debt Fund	None
Matthew Houk	International Wealth Masters Fund	None
	Wealth Masters Fund	$1 - $10,000
Kyle A. Jennings	High Yield Fund	None
	Senior Floating Rate Fund	None
Christopher J. Kelleher	Bond Fund	None
Daniel Kranson, CFA **	Foreign Opportunities Fund Greater European Fund	None $10,001 - $100,000
Warun Kumar *	Alternatives Diversifier Fund Equity Trend Fund Global Equity Trend Fund Low Volatility Fund Multi-Asset Trend Fund Sector Trend Fund	None None None None None None
John Looby	EM Equity Income Fund	None
Connie M. Luecke	Global Infrastructure Fund	$500,001 - $1,000,000
Ian Madden	EM Equity Income Fund	None
Gareth Maher	EM Equity Income Fund	None
Colm O'Connor	Essential Resources Fund	None
Noel O'Halloran	Essential Resources Fund	None
Francesco Ossino	High Yield Fund	None
	Senior Floating Rate Fund	$100,001 - $500,000
Daniel P. Senecal	EM Debt Fund	$1 - $10,000
Randle L. Smith	Global Infrastructure Fund	$100,001 - $500,000
Murray Stahl	International Wealth Masters Fund	None
	Wealth Masters Fund	None
David Souccar *	Foreign Opportunities Fund	None
Jonathan R. Stanley	High Yield Fund	None
Craig Stone	International Small-Cap Fund	$100,001 - $500,000
Craig Thrasher	International Small-Cap Fund	$10,001 - $100,000
	EM Small-Cap Fund	None
Massimiliano Tondi	EM Equity Income Fund	None
Jin Zhang *	EM Opportunities Fund	$100,000 - $500,000

As of June 30, 2016.

As of March 31, 2016.

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BROKERAGE ALLOCATION AND OTHER PRACTICES

The Funds of Funds generally do not invest directly in securities, but rather invest in ETFs and shares of underlying mutual funds. The shares of the underlying affiliated mutual funds are purchased at NAV of the shares of that fund without payment of a brokerage commission or a sales charge. The shares of ETFs are purchased through broker-dealers in transactions on a securities exchange, and the Funds will pay customary brokerage commissions for each purchase and sale.

The adviser or subadvisers to the underlying mutual funds execute the portfolio transactions for their respective fund. In allocating portfolio transactions, each underlying fund’s adviser must comply with the brokerage and allocation procedures adopted by the board of trustees of the underlying mutual fund. The following is a discussion of the portfolio transactions and brokerage procedures of those underlying mutual funds that are affiliated with the Funds, with the exception of the Funds of Funds.

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 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

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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 in accordance with applicable policies and procedures. 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 will review these procedures from time to time as they deem appropriate.

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

	Aggregate Amount of Brokerage Commissions ($)
Fund	2013		2014		2015
Alternatives Diversifier Fund		7,257		11,270		13,236
Bond Fund		N/A		N/A		N/A
CA Tax-Exempt Bond Fund		N/A		N/A		N/A
EM Debt Fund		N/A		N/A		53
EM Equity Income Fund		9,150		74,774		59,583
EM Small Cap Fund		N/A		10,679		8,475
Equity Trend Fund		1,523,912		2,889,384		3,924,639
Essential Resources		N/A		N/A		5,760
Foreign Opportunities Fund		1,065,828		891,751		842,609
Global Equity Trend Fund		59,109		110,452		176,400
Global Infrastructure Fund		38,887		40,777		53,947
Global Opportunities Fund		72,906		51,842		53,540
Global Real Estate Fund		17,488		19,218		32,660
Greater European Fund		12,493		12,960		11,731
Herzfeld Fund		6,161		12,362		26,360
High Yield Fund		N/A		970		1,970
International Equity Fund		206,822*		18,477		17,112
International Real Estate Fund		15,378		21,160		16,014
International Small-Cap Fund		17,947		78,348		100,236
International Wealth Masters Fund		N/A		N/A		5,612
Low Volatility Equity Fund		212		743		562
Multi-Asset Trend Fund		208,135		380,978		461,360
Multi-Sector Intermediate Bond Fund		47		697		N/A
Multi-Sector Short Term Bond Fund		6,800		570		N/A
Real Estate Fund		469,702		449,837		408,884
Sector Trend Fund		161,114		198,890		509,691
Senior Floating Rate Fund		152		2,010		N/A
Wealth Masters Fund		17,491		69,382		8,475

*In the interest of protecting fund shareholders from an adverse tax consequence, management directed the sale and repurchase of certain portfolio securities. This event, along with a change of subadviser and the resulting change in investment strategies, resulted in higher brokerage commissions paid during 2013 than in prior periods.

EM Opportunities Fund, Low Duration Income Fund and Tax-Exempt Bond Fund have been in existence only since the date of this SAI; therefore no brokerage commissions were paid by those funds for the fiscal years indicated.

In fiscal years 2013, 2014 and 2015, no brokerage commissions were paid by the funds to any affiliate of the Funds, the Adviser or the Distributor, or to any affiliate of any affiliate of the Funds, the Adviser or the Distributor. Brokerage commissions of $8,612,036 paid during the fiscal year ended September 30, 2015, were paid on portfolio transactions aggregating $41,027,450,026 executed by brokers who provided research and other statistical information.

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

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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 a 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 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.

During the fiscal year ended September 30, 2015 the Funds had no directed brokerage transactions to brokers for proprietary and third party research services.

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 September 30, 2015, 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 September 30, 2015 (amounts in thousands, except shares) were as follows:

Fund	Broker/Dealer	Value ($)
Bond Fund	Bank of America LLC		$	1,221
	Citicorp Securities Services LLC			370
	JPMorgan Chase & Co.			1,871
	Morgan Stanley			3,351
	Jefferies & Company, Inc.			190
	Goldman Sachs & Co.			1,667
	Barclays Bank PLC			270
	Citigroup Global Markets, Inc.			368
	Deutsche Bank Securities, Inc.			192
	Wells Fargo & Co.			760
Foreign Opportunities Fund	UBS AG			33,420
High Yield Fund	Citicorp Securities Services LLC			123
	Goldman Sachs & Co.			479
	JPMorgan Chase & Co.			243
Multi-Sector Intermediate Bond Fund	Credit Suisse First Boston Corp.			955
	Wells Fargo & Co.			2,943
	Bank of America LLC			7,383
	JPMorgan Chase & Co.			4,965
	Morgan Stanley			2,496
	Barclays Bank PLC			483
	Goldman Sachs & Co.			2,995
	Jefferies & Company, Inc.			1,157
	Citicorp Securities Services LLC			3,567
	Deutsche Bank Securities, Inc.			918
Multi-Sector Short-Term Bond Fund	Goldman Sachs & Co.			57,853
	Wells Fargo & Co.			233,181
	JPMorgan Chase & Co.			364,827
	Barclays Bank PLC			57,865
	Morgan Stanley			111,445
	Bank of America LLC			191,495
	Citicorp Securities Services LLC			143,174
	Jefferies & Company, Inc.			28,549
	Credit Suisse First Boston Corp.			97,124
	Deutsche Bank Securities, Inc.			6,733

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Fund	Broker/Dealer	Value ($)
Global Opportunities Fund	Wells Fargo & Co.		5,004
	JPMorgan Chase & Co.		2,013

During the fiscal year ended September 30, 2015 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, Class C Shares and Class T Shares, the minimum initial investment is $2,500 and the minimum subsequent investment is $100. However, both the initial and subsequent minimum investment amounts are $100 for investments pursuant to the “Systematic Purchase” plan, a bank draft investing program administered by the Transfer Agent, or pursuant to the Systematic Exchange privilege or for an IRA. In addition, there are no subsequent minimum investment amounts in connection with the reinvestment of dividend or capital gain distributions. For Class I Shares, the minimum initial investment is $100,000 and there is no subsequent minimum investment. For purchases of Class I Shares (i) by private clients of the adviser, subadviser and their affiliates, (ii) through certain programs and defined contribution plans with which the Distributor or Transfer Agent has an arrangement or (iii) by Trustees of the funds and directors, officers and employees of Virtus and its affiliates, the minimum initial investment is waived. Completed applications for the purchase of shares should be mailed to: Virtus Mutual Funds, P.O. Box 9874, Providence, RI 02940-8074.

For Class R6 Shares, there is no minimum initial investment and there is no minimum for additional purchases. R6 Shares are available only to certain employer-sponsored retirement plans, including Section 401(k), 403(b) and 457, profit-sharing, money purchase pension and defined benefit plans and non-qualified deferred compensation plans, in each case provided that plan level or omnibus accounts are held on the books of the fund. If you are participating in an employer sponsored retirement plan, such as a 401(k) plan, profit-sharing plan, defined benefit plan or other employer-directed plan, your company will provide you with the information you need to open an account and buy Class R6 Shares.

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. Orders received by dealers prior to the close of trading on the NYSE are confirmed at the offering price effective at that time, provided the order is received by an authorized broker or broker’s authorized designee prior to its close of business.

The alternative purchase arrangements permit an investor to choose the method of purchasing shares that is more beneficial given the amount of the purchase, the length of time the investor expects to hold the shares, whether the investor wishes to receive distributions in cash or to reinvest them in additional shares of the Funds, and other circumstances. Investors should consider whether, during the anticipated life of their investment in the Fund, the accumulated continuing distribution and services fees and CDSC on Class C Shares or Class T 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 and Class T 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. In the case of Class B Shares, distribution expenses incurred by the Distributor in connection with the sale of the shares will be paid from the proceeds of the ongoing distribution and services fee and the CDSC incurred upon redemption within five years of purchase for the Fixed Income Fund and within three years of purchase for the Short Term Bond Fund. For Class C Shares, the ongoing distribution and services fee will be used to pay for the distribution expenses incurred by

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the Distributor. In the case of Class T Shares, distribution expenses incurred by the Distributor in connection with the sale of the shares will be paid from the proceeds of the ongoing distribution and services fee and the CDSC incurred upon redemption within one year of purchase. Sales personnel of broker-dealers distributing the Funds’ shares may receive differing compensation for selling Class A Shares, Class C Shares or Class T 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

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 Virtus fixed income fund and Virtus Sector Trend 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.

Class B Shares

➛

NOTE: Class B Shares are no longer available for purchase, except through reinvestment of dividends/capital gain distributions by existing shareholders and exchange of Class B shares of a fund for Class B shares of other Virtus Mutual Funds as permitted by the existing exchange privileges (as set forth in the Funds’ prospectuses).

Class B Shares do not incur a sales charge when they are purchased, but they are subject to a sales charge if they are redeemed within five years of purchase. Class B Shares of the Short Term Bond Fund do not incur a sales charge when they are purchased, but they are subject to a sales charge if they are redeemed within three years of purchase. The deferred sales charge may be waived in connection with certain qualifying redemptions. (See “Class A Shares, Class B Shares, Class C Shares and Class T Shares—Waiver of Deferred Sales Charges” in this SAI.)

Class B Shares are subject to ongoing distribution and service fees at an annual rate of up to 1.00% of each Fund’s aggregate average daily net assets attributable to the Class B Shares. Class B Shares enjoy the benefit of permitting all of the investor’s dollars to work from the time the investment is made. The higher ongoing distribution and service fees paid by Class B 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 B Shares will automatically convert to Class A Shares eight years after the end of the calendar month in which the shareholder’s order to purchase was accepted. Class B Shares of the Short Term Bond Fund convert to Class A Shares six years after the end of the calendar month in which the shareholder’s order to purchase was accepted. The purpose of the conversion feature is to relieve the holders of the Class B Shares that have been outstanding for a period of time sufficient for the Distributor to have been compensated for distribution expenses related to the Class B Shares from most of the burden of such distribution related expenses.

Class B Shares include all shares purchased pursuant to the deferred sales charge alternative which have been outstanding for less than the period ending eight years after the end of the month in which the shares were issued. Class B Shares of the Short Term Bond Fund include all shares purchased pursuant to the deferred sales charge alternative which have been outstanding for less than the period ending six years after the end of the month in which the shares were issued. At the end of this period, Class B Shares will automatically convert to Class A Shares and will no longer be subject to the higher distribution and service fees. Such conversion will be on the basis of the relative NAV of the two classes without the imposition of any sales load, fee or other charge.

For purposes of conversion to Class A Shares, shares purchased through the reinvestment of dividends and distributions paid in respect of Class B Shares in a shareholder’s account will be considered to be held in a separate subaccount. Each time any Class B Shares in the shareholder’s account (other than those in the subaccount) convert to Class A Shares, a pro rata portion of the Class B Shares in the subaccount will also convert to Class A Shares.

Class C Shares

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. Class C Shares of the Multi-Sector Short Term Bond Fund are not subject to a sales charge when redeemed. The deferred sales charge may be waived in connection with certain qualifying redemptions.

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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 of up to 1.00% of each Fund’s aggregate average daily net assets attributable to Class C Shares. Class C Shares of the Multi-Sector Short Term Bond Fund are subject to ongoing distribution and service fees of up to 0.50% of the Funds’ aggregate average daily net assets attributable to Class C Shares. Class C Shares enjoy the benefit of permitting all of the investor’s dollars to work from the time the investment is made. The higher ongoing distribution and services fee paid by Class C Shares will cause such shares to have a higher expense ratio and to pay lower dividends, to the extent any dividends are paid, than those related to Class A Shares. 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 T Shares (Short Term Bond Fund Only)

Class T Shares do not incur a sales charge when they are purchased, but they are subject to a sales charge if they are redeemed within the first year of purchase. The deferred sales charge may be waived in connection with certain qualifying redemptions. (See “Class A Shares, Class B Shares, Class C Shares and Class T Shares—Waiver of Deferred Sales Charges” in this SAI.) Class T Shares are subject to an ongoing distribution and services fee at an annual rate of 1.00% of the Short Term Bond Fund’s aggregate average daily net assets attributable to the Class T Shares. Class T Shares enjoy the benefit of permitting all of the investor’s dollars to work from the time the investment is made. The higher ongoing distribution and services fee paid by Class T 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 T Shares of the Short Term Bond Fund 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 T shares can be exchanged for Class C Shares of any Virtus Mutual Fund.

Class I Shares

Class I Shares are offered primarily to clients of financial intermediaries that (i) charge such clients an ongoing fee for advisory, investment, consulting, or similar services; or (ii) have entered into an agreement with the Distributor to offer Class I Shares through a no-load network or platform. Such clients may include pension and profit sharing plans, other employee benefit trusts, endowments, foundations and corporations. Class I Shares are also offered to private and institutional clients of, or referred by, the Adviser, the subadvisers, their affiliates, and to Trustees of the funds and trustees/directors of affiliated open- and closed-end funds, and directors, officers and employees of Virtus and its affiliates.

Class R6 Shares

Class R6 Shares are available only to employer sponsored retirement plans, including profit-sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans, and plans described in Section 401(k), 403(b) and 457 of the Internal Revenue Code, where the employer, administrator, sponsor or related person has entered into an agreement with the fund’s Transfer Agent to make Class R6 Shares available to plan participants where plan level or omnibus accounts are held on the books of the fund. Class R6 Shares are not available to traditional or Roth IRAs, Coverdell Savings Accounts, Keoghs, SEPs, SARSEPs, or Simple IRAs and are not available through retail, advisory fee-based wrap platforms. Individual shareholders who purchase Class R6 Shares through retirement platforms or other intermediaries are not eligible to hold Class R6 Shares outside of their respective plan or intermediary platform. If you are eligible to purchase and do purchase Class R6 Shares, you will pay no sales charge at any time. There are no distribution and service fees applicable to Class R6 Shares.

Class A Shares — Reduced Initial Sales Charges

Investors choosing Class A Shares may be entitled to reduced inital sales charges. The ways in which initial sales charges may be avoided or reduced are described below. Investors buying Class A Shares on which a finder's fee has been paid may incur a CDSC if they redeem their shares within 18 months of purchase. For all Virtus fixed income funds and Virtus Sector Trend 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 charge may be waived under certain conditions as determined by the Distributor or Transfer Agent.

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:

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(1) trustee, director or officer of any Virtus Mutual Fund, or any other mutual fund advised, subadvised or distributed by the Adviser, Distributor or any of their corporate affiliates;

(2) any director or officer, or any full-time employee or sales representative (for at least 90 days), of the applicable Fund’s Adviser, subadviser or Distributor;

(3) any private client of an Adviser or subadviser to any Virtus Mutual Fund;

(4) registered representatives and employees of securities dealers with whom the Distributor has sales agreements;

(5) any qualified retirement plan exclusively for persons described above;

(6) any officer, director or employee of a corporate affiliate of the Adviser, a subadviser or the Distributor;

(7) any spouse or domestic partner, child, parent, grandparent, brother or sister of any person named in (1), (2), (4) or (6) above;

(8) employee benefit plans for employees of the Adviser, Distributor and/or their corporate affiliates;

(9) any employee or agent who retires from the Distributor and/or their corporate affiliates or from PNX, as long as, with respect to PNX employees or agents, such individual was employed by PNX prior to December 31, 2008;

(10) any Virtus direct account held in the name of a qualified employee benefit plan, endowment fund or foundation if, on the date of the initial investment, the plan, fund or foundation has assets of $10,000,000 or more or at least 100 eligible employees;

(11) any person with a direct rollover transfer of shares from an established Virtus Mutual Fund or Virtus qualified plan;

(12) any state, county, city, department, authority or similar agency prohibited by law from paying a sales charge;

(13) any unallocated account held by a third party administrator, registered investment adviser, trust company, or bank trust department which exercises discretionary authority and holds the account in a fiduciary, agency, custodial or similar capacity, if in the aggregate such accounts held by such entity equal or exceed $1,000,000;

(14) any deferred compensation plan established for the benefit of any trustee or director of Virtus, any Virtus Mutual Fund, or any open-or closed-end fund advised, subadvised or distributed by the Adviser, the Distributor or any of their corporate affiliates.

If you fall within any one of the following categories, you also will not have to pay a sales charge on your purchase of Class A Shares:

(15) individuals purchasing through an account with an unaffiliated brokerage firm having an agreement with the Distributor to waive sales charges for its clients;

(16) purchasers of Class A Shares bought through investment advisers and financial planners who charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of their clients;

(17) retirement plans and deferred compensation plans and trusts used to fund those plans (including, for example, certain plans qualified or created under Sections 401(a), 403(b) or 457 of the Code), and “rabbi trusts” that buy shares for their own accounts, in each case if those purchases are made through a broker or agent or other financial intermediary that has made special arrangements with the Distributor for such purchases; or

(18) clients of investment advisors or financial planners who buy shares for their own accounts but only if their accounts are linked to a master account of their investment advisor or financial planner on the books and records of the broker, agent or financial intermediary with which the Distributor has made such special arrangements. Each of the investors described in (15) through (18) may be charged a fee by the broker, agent or financial intermediary for purchasing shares.

Combination Purchase Privilege

Your purchase of any class of shares of these Funds or any other Virtus Mutual 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 either:

(a) any individual, his or her spouse or domestic partner, children and minor grandchildren purchasing shares for his, her or their own account (including an IRA account) including his, her or their own sole proprietorship or trust where any of the above is the named beneficiary;

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(b) a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary account (even though more than one beneficiary may exist);

(c) multiple accounts (up to 200) under a qualified employee benefit plan or administered by a third party administrator; or

(d) trust companies, bank trust departments, registered investment advisers, and similar entities placing orders or providing administrative services with respect to accounts over which they exercise discretionary investment authority and which are held in a fiduciary, agency, custodial or similar capacity, provided all shares are held of record in the name, or nominee name, of the entity placing the order.

Right of Accumulation

The value of your account(s) in any class of shares of these Funds or any other Virtus Mutual 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 or their agents at the time of purchase to exercise this right.

Gifting of Shares

If you make a gift of shares of a Virtus Mutual Fund, upon your request you may combine purchases, if made at the same time, of any class of shares of these Funds or any other Virtus Mutual Fund at the sales charge discount allowed for the combined purchase. The receiver of the gift may also be entitled to a prospective reduction in sales charges in accordance with the funds’ right of accumulation or other provisions. You or the receiver of the gift must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.

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.

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, 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 Letter of Intent amount 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, Class C Shares or Class T Shares, respectively. Oldest shares will be redeemed before selling newer shares. Any remaining shares will then be deposited to your account.

Waiver of Deferred Sales Charges

The CDSC is waived on the redemption (sale) of Class A Shares, Class B Shares, Class C Shares and Class T Shares if the redemption is made

(a) within one year of death,

(i) of the sole shareholder on an individual account,

(ii) of a joint tenant where the surviving joint tenant is the deceased’s spouse or domestic partner,

(iii) of the beneficiary of a Uniform Gifts to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial account, or

(iv) of the “grantor” on a trust account;

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(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, Class B Shares, Class C Shares and Class T Shares of these Funds or 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, provided such withdrawals do not exceed more than 1% monthly or 3% quarterly of the aggregate net investments. (See "Systematic Withdrawal Program" in this SAI for additional information about these restrictions.)

If, as described in condition (a) above, an account is transferred to an account registered in the name of a deceased’s estate, the CDSC will be waived on any redemption from the estate account occurring within one year of the death. If the Class B Shares are not redeemed within one year of the death, they will remain subject to the applicable CDSC.

How to Redeem Shares

Customer orders will be priced at the Funds’ NAVs next computed after they are received in good order by the Funds’ Transfer Agent, an authorized broker or the broker’s authorized designee.

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.

Class A Shares, Class B Shares, Class C Shares and Class I Shares Only

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.

Redemptions by Class A, Class B 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.

Class R6 Shares Only

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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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 Check (Certain Fixed Income Funds only)

Any shareholder of a Fixed Income Fund may elect to redeem shares held in his account by check. Please call us at 800-243-1574 for a listing of funds offering this feature. 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, each Virtus Mutual Fund, 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:

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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.

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Any systematic withdrawal plan will be stopped immediately.

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

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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.

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

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

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 Fund will not calculate its NAV per share class on days when the NYSE is closed for trading.

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.

A security that is listed or traded on more than one exchange generally is valued at the official closing price on the exchange representing the principal exchange for such security. Because of the need to obtain prices as of the close of trading on various exchanges throughout the world, the calculation of NAV may not take place for any Fund which invests in foreign securities contemporaneously with the determination of the prices of the majority of the portfolio securities of such Fund. The foreign currency exchange rate used to price the currency in which foreign securities are denominated is generally the 4 p.m. Eastern Time spot rate. If at any time a Fund has investments where market quotations are not readily available or are determined not to be reliable indicators of the value of the securities priced, such investments are valued at the fair value thereof as determined in good faith in accordance with policies and procedures approved by the Board.

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. 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 and two appointees of the Administrator who are identified to the Board. 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 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.

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.

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 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

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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. For all Virtus fixed income funds and Virtus Sector Trend Fund, the CDSC is 0.50%; for all other Virtus Mutual Funds, the CDSC is 1.00%. 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.

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 10 th 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 10 th 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

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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 20 th day of the month. Shares are tendered for redemption by the Transfer Agent, as agent for the shareowner, on or about the 15 th of the month at the closing NAV on the date of redemption. The 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 15 th 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 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 of shares while participating in the 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 Program.

Through the Program, Class B, Class C and Class T 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 B, Class C and Class T shareholders redeeming more shares than the percentage permitted by the Program will be subject to any applicable CDSC on all shares redeemed. Accordingly, the purchase of share classes on which a CDSC may be payable 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, at least 50% of the value of its total

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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 not more than 25% of the value of its assets is invested in the securities of any one issuer (other than United States government securities or the securities of other RICs). In addition, the Fund may not hold more than 25% of the securities (other than of other RICs) of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses or 25% of the securities of one or more qualified publicly traded partnerships. 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 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 a 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

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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.

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.

United States Federal and California Taxation of Distributions—CA Tax-Exempt Bond Fund

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. The CA Tax-Exempt Bond Fund intends to comply with this standard because at least 80% of the assets of the Fund will normally be invested in California municipal securities, and the 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.

In addition, distributions or parts thereof derived from interest received on state and local issues and United States government obligations held by the CA Tax-Exempt Bond Fund will be exempt from California personal income taxes in

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ratable proportion of income of the California investments and United States government obligations of the CA Tax-Exempt Bond Fund, provided that the Fund has complied with the requirement that at least 50% of its assets be invested in State and local issues and United States government issues at the end of each fiscal quarter. The CA Tax-Exempt Bond Fund intends to comply with this standard because at least 80% of the assets of the Fund will normally be invested in California municipal securities. Distributions derived from other earnings will be subject to California personal income tax for California residents and other persons subject to California income tax.

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 generally 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.

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 advisors about their tax situations.

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.

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.

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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.

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 to shareholders (by United States mail and/or electronic delivery, as applicable) 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

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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 December 2015, 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 December 2015 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 legislative, judicial, or administrative action. Accordingly, prospective purchasers are urged to consult their own tax advisors with specific reference to their own tax situations, 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.

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 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 S&P 500 ® Index, Dow Jones Industrial Average, Barclays Capital U.S. Aggregate Bond Index, Russell Midcap ® Growth Index, MSCI EAFE Index ® (Europe Australia Far East), Consumer Price Index, Barclays Capital California Municipal Bond Index, Barclays Capital U.S. High-Yield 2% Issuer Capped Bond Index, BofA Merrill Lynch 1-3 Year A-BBB US Corporate Index, MSCI World Index, FTSE EPRA/NAREIT Developed Rental ex-U.S. Index, Citigroup 90-Day Treasury Bill Index and FTSE NAREIT U.S. Real Estate Index.

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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 B Shares, Class C Shares and Class T Shares, and assume that all dividends and distributions on each class of 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 Share’s 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 30-day yield quotation as to a class of shares may be computed by dividing the net investment income for the period as to shares of that class by the maximum offering price of each share of that class on the last day of the period, according to the following formula:

Where:

a = dividends and interest earned during the period.

b = net expenses accrued for the period.

c = the average daily number of shares of the class outstanding during the period that were entitled to receive dividends.

d = the maximum offering price per share of the class on the last day of the period.

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A standardized “tax-equivalent yield” may be quoted for the Tax-Exempt Bond Fund, which is computed by: (a) dividing the portion of the Fund’s yield 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.

FINANCIAL STATEMENTS

The fiscal year of the Trust ends on September 30. 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.

For Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund, the Funds’ audited financial statements for the fiscal year ended December 31, 2015, appearing in the Predecessor Funds’ 2015 Annual Report to Shareholders, and the Predecessor Fund's unaudited financial statements for the semiannual period ended June 30, 2016, appearing in the Funds' 2016 Semiannual Report to Shareholders, are incorporated herein by reference.

All other Funds’ financial statements for the Trust’s fiscal year ended September 30, 2015, appearing in the Funds’ 2015 Annual Report to Shareholders, are incorporated herein by reference.

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APPENDIX A — DESCRIPTION OF RATINGS

A-1 and P-1 Commercial Paper Ratings

The Trust will only invest in commercial paper which at the date of investment is rated A-1 by Standard & Poor’s Corporation or P-1 by Moody’s Investors Services, Inc. (Moody’s), or, if not rated, is issued or guaranteed by companies which at the date of investment have an outstanding debt issue rated AA or higher by Standard & Poor’s or Aa or higher by Moody’s.

Commercial paper rated A-1 by Standard & Poor’s Corporation (“S&P”) has the following characteristics: Liquidity ratios are adequate to meet cash requirements. Long-term senior debt is rated “A” or better. The issuer has access to at least two additional channels of borrowing. Basic earnings and cash flow have an upward trend with allowance made for unusual circumstances. Typically, the issuer’s industry is well established and the issuer has a strong position within the industry. The reliability and quality of management are unquestioned.

The rating P-1 is the highest commercial paper rating assigned by Moody’s. Among the factors considered by Moody’s in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer’s industry or industries and an appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer’s products in relation to competition and customer acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationship which exists with the issuer; and (8) recognition by the management of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations.

Moody’s Investors Service, Inc.

Aaa — Bonds which 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 which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they 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 which 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 which 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 which 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 which 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 which 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 which 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

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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.

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

Standard and Poor’s Corporation Corporate Bond Ratings

AAA —

Bonds rated AAA have the highest 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 AAA 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.

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.

Fitch

Rated entities in a number of sectors, including financial and non-financial corporations, sovereigns and insurance companies, are generally assigned Issuer Default Ratings (IDRs). IDRs opine on an entity's relative vulnerability to default on financial obligations. The "threshold" default risk addressed by the IDR is generally that of the financial obligations whose non-payment would best reflect the uncured failure of that entity. As such, IDRs also address relative vulnerability to bankruptcy, administrative receivership or similar concepts, although the agency recognizes that issuers may also make pre-emptive and therefore voluntary use of such mechanisms.

In aggregate, IDRs provide an ordinal ranking of issuers based on the agency's view of their relative vulnerability to default, rather than a prediction of a specific percentage likelihood of default. For historical information on the default experience of Fitch-rated issuers, please consult the transition and default performance studies available from the Fitch Ratings website.

AAA: Highest credit quality. 'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA: Very high credit quality. 'AA' ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A: High credit quality. 'A' ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

BBB: Good credit quality. 'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.

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APPENDIX B — CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
The following table sets forth information as of September 8, 2016, 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 (Principal Shareholders) and the name of each person who has beneficial ownership, either directly or through one or more controlled companies, of more than 25% of the voting securities of a Fund (Control Person), as noted below.

*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.

CONTROL PERSON NAME AND ADDRESS	FUND	PERCENTAGE (%) OF FUND OUTSTANDING
AMERICAN ENTERPRISE INVESTMENT SVC * FBO #XXXX9970 707 2ND AVE S MINNEAPOLIS MN 55402-2405	VIRTUS GREATER EUROPEAN OPPORTUNITIES FUND		30.04	%
FIRST CLEARING LLCC * SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE BENEFIT OF CUSTOMER 2801 MARKET STREET ST LOUIS MO 63103	VIRTUS MULTI-ASSET TREND FUND		34.56	%
MORGAN STANLEY SMITH BARNEY * HARBORSIDE FINANCIAL CTR PLZ 2 FL 3 JERSEY CITY NJ 07311	VIRTUS EMERGING MARKETS OPPORTUNITIES FUND VIRTUS HERZFELD FUND		29.60 29.92	% %
NATIONAL FINANCIAL SERVICES LLC * FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS ATTN MUTUAL FUNDS DEPT 4TH FLOOR 499 WASHINGTON BLVD JERSEY CITY NJ 07310	VIRTUS CA TAX-EXEMPT BOND FUND VIRTUS EMERGING MARKETS SMALL-CAP FUND VIRTUS INTERNATIONAL SMALL-CAP FUND		33.13 34.17 81.45	% % %
PERSHING LLC * 1 PERSHING PLAZA JERSEY CITY NJ 07399-0002	VIRTUS LOW VOLATILITY EQUITY FUND		29.45	%
UBS WM USA * XXX XXXXX 6100 OMNI ACCOUNT M/F ATTN DEPARTMENT MANAGER 1000 HARBOR BLVD FL 5 WEEHAWKEN NJ 07086-6761	VIRTUS SENIOR FLOATING RATE FUND		38.85	%
VIRTUS PARTNERS INC 100 PEARL ST 8TH FL HARTFORD CT 06103-4500	VIRTUS EMERGING MARKETS DEBT FUND VIRTUS EMERGING MARKETS SMALL-CAP FUND VIRTUS ESSENTIAL RESOURCES FUND VIRTUS INTERNATIONAL WEALTH MASTERS FUND VIRTUS LOW VOLATILITY EQUITY FUND		94.28 60.33 95.04 96.92 47.54	% % % % %

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PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
ADELE KIRCHER PISCATAWAY NJ 08854-1569	VIRTUS GLOBAL OPPORTUNITIES FUND - CLASS B		7.59	%
AMERICAN ENTERPRISE INVESTMENT SVC *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		12.65	%
FBO #XXXX9970	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		5.74	%
707 2ND AVE S	VIRTUS EMERGING MARKETS DEBT FUND-CLASS A		50.18	%
MINNEAPOLIS MN 55402-2405	VIRTUS EMERGING MARKETS DEBT FUND-CLASS C		6.94	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS A		37.32	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS C		19.48	%
	VIRTUS EQUITY TREND FUND-CLASS A		18.03	%
	VIRTUS EQUITY TREND FUND-CLASS C		8.66	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		24.26	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		11.85	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS A		12.34	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS C		32.69	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS A		26.98	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		13.76	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS A		11.56	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		25.03	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS A		50.02	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		19.46	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS A		34.84	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS C		26.81	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		24.02	%
	VIRTUS HERZFELD FUND-CLASS A		14.38	%
	VIRTUS HIGH YIELD FUND-CLASS B		17.57	%
	VIRTUS HIGH YIELD FUND-CLASS C		5.36	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS A		41.53	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS A		9.44	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		6.08	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		24.30	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS C		26.51	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS A		14.67	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		12.50	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		13.86	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		27.91	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS C		8.21	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		9.32	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		29.65	%
	VIRTUS SECTOR TREND FUND-CLASS A		13.94	%
	VIRTUS SECTOR TREND FUND-CLASS C		12.46	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS A		7.50	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS C		6.31	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		41.24	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		16.35	%
BNYM I S TRUST CO CUST FOR THE IRA OF KUO HUA HUNG QUINCY MA 02170-1429	VIRTUS HIGH YIELD FUND-CLASS B		9.61	%
BNYM I S TRUST CO CUST FOR THE SEP IRA OF PATRICK J IRISH CORINNA ME 04928-3615	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS B		6.09	%
BNYM I S TRUST CO CUST FOR THE SEP IRA OF DENIS L LABARRE WEST SUFFIELD CT 06093-3502	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS A		9.47	%

128

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
BNYM I S TRUST CO CUST FOR THE SEP IRA OF GALEN P MCKENNEY CORINNA ME 04928-3514	VIRTUS GLOBAL EQUITY TREND FUND-CLASS A		7.39	%
BNYM I S TRUST CO CUST FOR THE NON-DFI SIMPLE IRA OF DARIN B HILL BAILEYVILLE ME 04694-0000	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS B		16.93	%
BNYM I S TRUST CO CUST FOR NON-DFI SIMPLE IRA NORMA J THURLOW SOUTHFIELD MI 48075-7610	VIRTUS BOND FUND-CLASS B		23.77	%
BNYM I S TRUST CO CUST FOR THE NON-DFI SIMPLE IRA OF WILLIAM A RICHEY DENVER CO 80247-6814	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND - CLASS B		8.20	%
BNYM I S TRUST CO CUST FOR THE SEP IRA OF MATTHEW L BELL SANGERVILLE ME 04479-3533	VIRTUS GLOBAL OPPORTUNITIES FUND - CLASS B		7.16	%
BNYM I S TRUST CO CUST FOR THE SEP IRA OF ROBERT G WELCH AUSTIN TX 78731-1158	VIRTUS INTERNATIONAL EQUITY FUND-CLASS A		8.53	%
CHARLES SCHWAB & CO *	VIRTUS BOND FUND-CLASS I		7.42	%
SPECIAL CUSTODY ACCT FBO CUSTOMERS	VIRTUS CA TAX-EXEMPT BOND FUND-CLASS A		6.08	%
ATTN MUTUAL FUNDS	VIRTUS CA TAX-EXEMPT BOND FUND-CLASS I		5.54	%
211 MAIN STREET	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS A		9.50	%
SAN FRANCISCO CA 94105-1905	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS A		7.20	%
	VIRTUS EQUITY TREND FUND-CLASS A		6.20	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		6.89	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS I		11.61	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS C		6.41	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS I		8.08	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS A		5.64	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		9.37	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS I		15.32	%
	VIRTUS HIGH YIELD FUND-CLASS B		11.23	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS C		36.67	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS A		5.53	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS I		10.51	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS C		7.50	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		11.91	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS I		13.29	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS R6		59.67	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		7.87	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		10.64	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		7.95	%

129

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
EDWARD D. JONES AND CO * FOR THE BENEFIT OF CUSTOMERS 12555 MANCHESTER ROAD ST LOUIS MO 63131-3710	VIRTUS REAL ESTATE SECURITIES FUND - CLASS I		21.26	%
EPTC TTE FBO RKEENAN OPT WARRENTON VA 20188	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND - CLASS C		12.20	%
FIRST CLEARING LLCC *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		9.73	%
SPECIAL CUSTODY ACCT FOR THE EXCLUSIVE	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		9.03	%
BENEFIT OF CUSTOMER	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		6.41	%
2801 MARKET STREET	VIRTUS BOND FUND-CLASS C		7.77	%
ST LOUIS MO 63103	VIRTUS BOND FUND-CLASS I		7.75	%
	VIRTUS EQUITY TREND FUND-CLASS A		17.86	%
	VIRTUS EQUITY TREND FUND-CLASS C		21.69	%
	VIRTUS EQUITY TREND FUND-CLASS I		25.53	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		6.75	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS C		14.69	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS I		5.82	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS A		9.67	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		10.29	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		8.41	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		10.17	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS I		18.88	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		17.14	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS I		16.74	%
	VIRTUS HIGH YIELD FUND-CLASS C		15.49	%
	VIRTUS HIGH YIELD FUND-CLASS I		28.41	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS I		8.29	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		5.10	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS I		6.27	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS A		23.41	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		36.29	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS I		40.99	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		7.83	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS C		12.86	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS I		9.55	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		6.18	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS C		18.60	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS I		10.41	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS T		16.00	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		6.56	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS I		6.49	%
	VIRTUS SECTOR TREND FUND-CLASS A		12.53	%
	VIRTUS SECTOR TREND FUND-CLASS C		17.03	%
	VIRTUS SECTOR TREND FUND-CLASS I		13.87	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS C		13.98	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS I		9.17	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		10.53	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		8.46	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		17.18	%
GREAT-WEST TRUST COMPANY LLC TTEE F	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		5.43	%
EMPLOYEE BENEFITS CLIENTS 401K	VIRTUS REAL ESTATE SECURITIES FUND-CLASS R6		8.79	%
8515 E ORCHARD RD 2T2
GREENWOOD VILLAGE CO 80111

130

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
LPL FINANCIAL *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		15.44	%
OMNIBUS CUSTOMER ACCOUNT	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		8.92	%
ATTN LINDSAY OTOOLE	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS C		8.93	%
4707 EXECUTIVE DRIVE	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		5.88	%
SAN DIEGO CA 92121	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS I		7.67	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		5.88	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		5.67	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		6.71	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS A		13.99	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS C		6.87	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		6.04	%
	VIRTUS HIGH YIELD FUND-CLASS A		5.41	%
	VIRTUS HIGH YIELD FUND-CLASS C		8.66	%
	VIRTUS HIGH YIELD FUND-CLASS I		28.13	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS C		20.53	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS A		8.34	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		5.82	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS I		15.04	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS B		63.14	%
	VIRTUS SECTOR TREND FUND-CLASS A		5.82	%
MATRIX TRUST COMPANY CUST. FBO BAYSIDE ORTHOPAEDIC & REHABILITATIO 717 17TH STREET SUITE 1300 DENVER CO 80202	VIRTUS GLOBAL EQUITY TREND FUND - CLASS I		30.42	%
MATT HILL JODI HILL JT WROS WETHERSFIELD CT 06109-0000	VIRTUS EMERGING MARKETS DEBT FUND-CLASS A		9.87	%
MG TRUST COMPANY CUST. FBO HUTCHINSON, MOORE & RAUCH, LLC 717 17TH STREET SUITE 1300 DENVER CO 80202	VIRTUS GLOBAL EQUITY TREND FUND-CLASS I		5.90	%
MIAMI UNIVERSITY FOUNDATION ATTN BRUCE GUIOT 107 ROUDEBUSH HALL OXFORD OH 45056	VIRTUS GLOBAL OPPORTUNITIES FUND - CLASS I		57.36	%
MID ATLANTIC TRUST COMPANY	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS R6		22.17	%
FBO CHESAPEAKE BAY CANDLE LLC	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		8.79	%
401(K) PROFIT SHARING PLAN & TRUST
1251 WATERFRONT PLACE SUITE 525
PITTSBURGH, PA 15222
MILDRED S GOODMAN GALE G WARREN JT WROS JAMESVILLE NY 13078-9519	VIRTUS HIGH YIELD FUND - CLASS B		7.16	%
MLPF&S *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		6.45	%
FOR THE SOLE BENEFIT OF ITS CUSTOMERS	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		17.84	%
ATTN FUND ADMINISTRATION	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		13.57	%
4800 DEER LAKE DR E 3RD FL	VIRTUS BOND FUND-CLASS A		5.88	%
JACKSONVILLE FL 32246-6484	VIRTUS BOND FUND-CLASS C		14.60	%
	VIRTUS EQUITY TREND FUND-CLASS A		6.76	%
	VIRTUS EQUITY TREND FUND-CLASS C		14.04	%
	VIRTUS EQUITY TREND FUND-CLASS I		17.57	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		6.36	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		9.74	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS A		5.32	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		14.08	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		15.32	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		5.70	%
	VIRTUS HIGH YIELD FUND-CLASS B		23.16	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		6.03	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS I		8.39	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		7.30	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS C		21.97	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS I		20.90	%

131

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		7.51	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS I		12.50	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS T		34.42	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		12.19	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		7.93	%
	VIRTUS SECTOR TREND FUND-CLASS A		12.09	%
	VIRTUS SECTOR TREND FUND-CLASS C		21.59	%
	VIRTUS SECTOR TREND FUND-CLASS I		21.41	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS A		5.39	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS C		13.89	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS I		25.93	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		17.03	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		5.73	%
MORGAN STANLEY SMITH BARNEY *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		8.86	%
HARBORSIDE FINANCIAL CTR PLZ 2 FL 3	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		37.01	%
JERSEY CITY NJ 07311	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		26.03	%
	VIRTUS BOND FUND-CLASS A		5.26	%
	VIRTUS BOND FUND-CLASS C		5.68	%
	VIRTUS CA TAX-EXEMPT BOND FUND-CLASS A		8.81	%
	VIRTUS EQUITY TREND FUND-CLASS A		8.55	%
	VIRTUS EQUITY TREND FUND-CLASS C		20.17	%
	VIRTUS EQUITY TREND FUND-CLASS I		14.01	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		22.45	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS I		33.83	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		20.77	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		7.02	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS A		9.33	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		17.39	%
	VIRTUS HERZFELD FUND-CLASS A		13.46	%
	VIRTUS HERZFELD FUND-CLASS C		34.97	%
	VIRTUS HERZFELD FUND-CLASS I		32.05	%
	VIRTUS HIGH YIELD FUND-CLASS C		16.16	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		23.40	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		6.94	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS C		41.90	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		7.79	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS I		7.79	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		7.41	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS C		15.99	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS I		27.28	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		9.08	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS C		23.52	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS I		29.76	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS T		19.15	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		13.34	%
	VIRTUS SECTOR TREND FUND-CLASS A		5.36	%
	VIRTUS SECTOR TREND FUND-CLASS C		15.89	%
	VIRTUS SECTOR TREND FUND-CLASS I		31.37	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS A		5.12	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS C		23.29	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS I		17.97	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		6.60	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		15.06	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		8.99	%

132

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
NATIONAL FINANCIAL SERVICES LLC *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		11.50	%
FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		5.43	%
ATTN MUTUAL FUNDS DEPT 4TH FLOOR	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		15.37	%
499 WASHINGTON BLVD	VIRTUS BOND FUND-CLASS B		55.42	%
JERSEY CITY NJ 07310	VIRTUS BOND FUND-CLASS I		33.83	%
	VIRTUS CA TAX-EXEMPT BOND FUND-CLASS I		88.57	%
	VIRTUS EMERGING MARKETS DEBT FUND-CLASS A		5.99	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS A		5.37	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS A		14.35	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS I		36.79	%
	VIRTUS EQUITY TREND FUND-CLASS A		6.60	%
	VIRTUS EQUITY TREND FUND-CLASS I		6.13	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		10.93	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		17.94	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS I		15.27	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS C		15.27	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS I		10.19	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS A		7.35	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		15.41	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS A		6.22	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS A		9.98	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		7.37	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS I		21.72	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS A		9.28	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		11.05	%
	VIRTUS HERZFELD FUND-CLASS I		12.82	%
	VIRTUS HIGH YIELD FUND-CLASS A		5.31	%
	VIRTUS HIGH YIELD FUND-CLASS B		26.20	%
	VIRTUS HIGH YIELD FUND-CLASS C		21.87	%
	VIRTUS HIGH YIELD FUND-CLASS I		29.08	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS A		19.57	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS C		5.00	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS I		14.96	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS A		8.48	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		6.17	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS I		25.81	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		8.59	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS I		88.30	%
	VIRTUS INTERNATIONAL WEALTH MASTERS FUND-CLASS A		45.06	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS A		22.54	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS C		6.05	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS A		11.19	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		8.17	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS B		5.16	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		10.66	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		25.74	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		6.75	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		16.67	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS I		14.03	%
	VIRTUS SECTOR TREND FUND-CLASS I		6.91	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		6.79	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		19.49	%
NFS LLC FEBO *	VIRTUS FOREIGN OPPORTUNITIES FUND - CLASS R6		73.98	%
FIIOC AS AGENT FOR	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND - CLASS R6		93.83	%
QUALIFIED EMPLOYEE BENEFIT PLANS	VIRTUS REAL ESTATE SECURITIES FUND - CLASS R6		27.69	%
(401K) FINOPS-IC FUNDS
100 MAGELLAN WAY # KW1C
COVINGTON KY 41015
PANAGOULA TSAKANIKA TOD SUBJECT TO VIR TOD RULES ATHENS GREECE 1712216	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		5.39	%

133

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
PERSHING LLC *	VIRTUS BOND FUND-CLASS A		5.35	%
1 PERSHING PLAZA	VIRTUS BOND FUND-CLASS C		14.69	%
JERSEY CITY NJ 07399-0002	VIRTUS CA TAX-EXEMPT BOND FUND-CLASS A		6.66	%
	VIRTUS EMERGING MARKETS DEBT FUND-CLASS C		11.70	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS A		16.30	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS C		31.54	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS A		26.11	%
	VIRTUS EQUITY TREND FUND-CLASS A		7.70	%
	VIRTUS EQUITY TREND FUND-CLASS C		5.19	%
	VIRTUS ESSENTIAL RESOURCES FUND-CLASS A		45.41	%
	VIRTUS ESSENTIAL RESOURCES FUND-CLASS C		22.78	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS A		18.35	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS C		13.21	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS A		11.29	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		6.02	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		11.29	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS A		11.52	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		7.80	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS A		14.04	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		11.54	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS A		27.95	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS C		12.03	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		6.87	%
	VIRTUS HERZFELD FUND-CLASS A		35.04	%
	VIRTUS HERZFELD FUND-CLASS C		42.02	%
	VIRTUS HIGH YIELD FUND-CLASS C		9.43	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS A		5.82	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS C		24.40	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS I		28.41	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS A		25.51	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		7.92	%
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS I		9.48	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		5.59	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS A		63.42	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS C		13.39	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS A		9.39	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		5.72	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		12.54	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS B		84.88	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS C		8.12	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		7.38	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		8.66	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		16.58	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		6.46	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS I		8.67	%
	VIRTUS SECTOR TREND FUND-CLASS A		5.01	%
	VIRTUS SECTOR TREND FUND-CLASS C		7.22	%
	VIRTUS WEALTH MASTERS FUND-CLASS A		6.39	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		6.16	%

134

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
RAYMOND JAMES *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS A		10.05	%
OMNIBUS FOR MUTUAL FUNDS	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		7.00	%
HOUSE ACCT FIRM XXXXX015	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS C		11.45	%
ATTN COURTNEY WALLER	VIRTUS EQUITY TREND FUND-CLASS A		5.03	%
880 CARILLON PARKWAY ST PETERSBURG FL 33716	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		6.22	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS I		11.49	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		6.70	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS I		5.01	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		5.14	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS I		13.73	%
	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS C		42.18	%
	VIRTUS HERZFELD FUND-CLASS A		6.64	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS C		20.27	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS A		6.51	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS C		15.73	%
	VIRTUS MULTI-ASSET TREND FUND-CLASS C		8.35	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS A		5.39	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS B		5.33	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS C		25.08	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS A		9.82	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		5.25	%
RBC CAPITAL MARKETS LLC *	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		27.81	%
MUTUAL FUND OMNIBUS PROCESSING	VIRTUS INTERNATIONAL WEALTH MASTERS FUND-CLASS A		7.55	%
OMNIBUS ATTN MUTUAL FUND OPS MANAGER	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS I		8.99	%
60 S 6TH ST
MINNEAPOLIS MN 55402-4400
SEYMOUR FREIDBERG ARLENE FREIDBERG JT WROS TOD BOYNTON BEACH FL 33437-8411	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS B		7.28	%
STATE STREET BANK AND TRUST COMPANY AS TTEE AND OR CUSTODIAN (FBO) ADP ACCESS PRODUCT 1 LINCOLN ST BOSTON MA 02111-2901	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS A		5.07	%
SUSANNE E BONN ELLINGTON CT 06029-2412	VIRTUS EMERGING MARKETS DEBT FUND-CLASS C		5.58	%
TD AMERITRADE FBO KIMBERLY HOFEMAN SEP IRA TD AMERITRADE CLEARING, CUSTODIAN HANOVER MA 02339-1500	VIRTUS GREATER EUROPEAN OPPS FUND-CLASS I		5.63	%
TD AMERITRADE INC * FOR THE EXCLUSIVE BENEFIT OF OUR CLIENTS PO BOX 2226 OMAHA NE 68103-2226	VIRTUS GLOBAL OPPORTUNITIES FUND - CLASS I		16.66	%
UBS WM USA *	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS C		7.78	%
XXX XXXXX 6100	VIRTUS ALTERNATIVES DIVERSIFIER FUND-CLASS I		18.69	%
OMNI ACCOUNT M/F	VIRTUS BOND FUND-CLASS C		26.14	%
ATTN DEPARTMENT MANAGER	VIRTUS BOND FUND-CLASS I		36.33	%
1000 HARBOR BLVD FL 5	VIRTUS EMERGING MARKETS DEBT FUND-CLASS C		31.77	%
WEEHAWKEN NJ 07086-6761	VIRTUS EQUITY TREND FUND-CLASS A		5.44	%
	VIRTUS EQUITY TREND FUND-CLASS C		5.86	%
	VIRTUS EQUITY TREND FUND-CLASS I		19.47	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS C		11.09	%
	VIRTUS FOREIGN OPPORTUNITIES FUND-CLASS I		5.51	%
	VIRTUS GLOBAL EQUITY TREND FUND-CLASS A		6.95	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS C		14.09	%
	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		5.05	%
	VIRTUS GLOBAL OPPORTUNITIES FUND-CLASS C		8.89	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS C		13.28	%
	VIRTUS GLOBAL REAL ESTATE SEC FUND-CLASS I		7.76	%
	VIRTUS HERZFELD FUND-CLASS A		9.29	%
	VIRTUS HERZFELD FUND-CLASS C		11.14	%
	VIRTUS HERZFELD FUND-CLASS I		37.03	%
	VIRTUS HIGH YIELD FUND-CLASS C		6.47	%
	VIRTUS HIGH YIELD FUND-CLASS I		5.85	%

135

PRINCIPAL SHAREHOLDER NAME AND ADDRESS	FUND/CLASS	PERCENTAGE (%) OF CLASS OUTSTANDING
	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS C		17.46	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS C		10.86	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS A		7.85	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS C		19.82	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND FUND-CLASS I		17.63	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS A		12.08	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS C		20.10	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS I		26.47	%
	VIRTUS MULTI-SECTOR SHORT TERM BOND FUND-CLASS T		12.73	%
	VIRTUS REAL ESTATE SECURITIES FUND-CLASS I		6.07	%
	VIRTUS SECTOR TREND FUND-CLASS C		6.31	%
	VIRTUS SECTOR TREND FUND-CLASS I		14.12	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS A		59.35	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS C		18.91	%
	VIRTUS SENIOR FLOATING RATE FUND-CLASS I		27.34	%
	VIRTUS WEALTH MASTERS FUND-CLASS C		8.01	%
	VIRTUS WEALTH MASTERS FUND-CLASS I		19.09	%
VIRTUS DIVERSIFIER FUND	VIRTUS GLOBAL INFRASTRUCTURE FUND-CLASS I		24.19	%
ATTN AMY ROBINSON	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND-CLASS I		23.06	%
C/O VIRTUS INVESTMENT PARTNERS
100 PEARL ST
HARTFORD CT 06103-4506
VIRTUS PARTNERS INC	VIRTUS EMERGING MARKETS DEBT FUND-CLASS A		13.68	%
100 PEARL ST 8TH FL	VIRTUS EMERGING MARKETS DEBT FUND-CLASS C		26.59	%
HARTFORD CT 06103-4500	VIRTUS EMERGING MARKETS DEBT FUND-CLASS I		97.54	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS A		11.33	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS C		15.18	%
	VIRTUS EMERGING MARKETS EQUITY INCOME FUND-CLASS I		7.85	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS A		25.82	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS C		82.12	%
	VIRTUS EMERGING MARKETS SMALL-CAP FUND-CLASS I		62.74	%
	VIRTUS EQUITY TREND FUND-CLASS R6		100.00	%
	VIRTUS ESSENTIAL RESOURCES FUND-CLASS A		53.80	%
	VIRTUS ESSENTIAL RESOURCES FUND-CLASS C		75.36	%
	VIRTUS ESSENTIAL RESOURCES FUND-CLASS I		97.11	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS A		6.93	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS C		9.77	%
	VIRTUS INTERNATIONAL EQUITY FUND-CLASS I		30.15	%
	VIRTUS INTERNATIONAL SMALL-CAP FUND-CLASS R6		100.00	%
	VIRTUS INTERNATIONAL WEALTH MASTERS FUND-CLASS A		45.59	%
	VIRTUS INTERNATIONAL WEALTH MASTERS FUND-CLASS C		86.44	%
	VIRTUS INTERNATIONAL WEALTH MASTERS FUND-CLASS I		99.50	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS A		7.28	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS C		22.22	%
	VIRTUS LOW VOLATILITY EQUITY FUND-CLASS I		97.20	%
	VIRTUS MULTI-SECTOR INTERMEDIATE BOND-CLASS R6		5.42	%
VP DISTRIBUTORS LLC ATTN CORP ACCOUNTING 100 PEARL ST HARTFORD CT 06103-4506	VIRTUS INTERNATIONAL REAL ESTATE SECURITIES FUND - CLASS A		25.9 8	%

136

VIRTUS OPPORTUNITIES TRUST

PART C—OTHER INFORMATION

Item 28.

Exhibits

(a)

Amended Declaration of Trust.

Amended and Restated Agreement and Declaration of Trust dated March 1, 2001, filed via EDGAR (as Exhibit a) with Post-Effective Amendment No. 12 (File No. 033-65137) on January 25, 2002, and incorporated herein by reference.

Amendment to the Declaration of Trust of Virtus Opportunities Trust (“VOT” or the “Registrant”), dated November 16, 2006, filed via EDGAR (as Exhibit a.2) with Post-Effective Amendment No. 23 (File No. 033-65137) on January 30, 2007, and incorporated herein by reference.

Amendment to the Declaration of Trust of VOT, dated August 20, 2015, filed via EDGAR (as Exhibit a.3) with Post-Effective Amendment No. 85 (File No. 033-65137) on January 27, 2016, and incorporated herein by reference.

(b)

Bylaws.

Amended and Restated By-Laws dated November 16, 2005, filed via EDGAR (as Exhibit b.1) with Post-Effective Amendment No. 23 (File No. 033-65137) on January 30, 2007, and incorporated herein by reference.

Amendment No. 1 to the Amended and Restated By-Laws of the Registrant, dated August 23, 2006, filed via EDGAR (as Exhibit b.2) with Post-Effective Amendment No. 23 (File No. 033-65137) on January 30, 2007, and incorporated herein by reference.

Amendment No. 2 to the Amended and Restated By-Laws of the Registrant, dated August November 17, 2011, filed via EDGAR (as Exhibit b.3) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

(c)

See Articles III, V, VI and VIII of Registrant’s Agreement and Declaration of Trust and Articles II and VII of Registrant’s Bylaws, each as amended.

(d)

Investment Advisory Contracts.

Amended and Restated Investment Advisory Agreement between the Registrant, on behalf of Bond Fund, and Virtus Investment Advisers, Inc. (“VIA”) effective November 20, 2002, filed via EDGAR (as Exhibit d.1) with Post-Effective Amendment No. 14 (File No. 033-65137) on January 29, 2004, and incorporated herein by reference.

Amendment to Amended and Restated Investment Advisory Agreement between Registrant and VIA dated June 8, 2006, filed via EDGAR (as Exhibit d.6) with Post-Effective Amendment No. 22 (File No. 033-65137) on June 9, 2006, and incorporated herein by reference.

Second Amendment to Amended and Restated Investment Advisory Agreement between Registrant and VIA, dated June 27, 2007, on behalf of CA-Tax Exempt Bond Fund, Global Dividend Fund (formerly Global Infrastructure Fund), High Yield Fund, Market Neutral Fund, Multi-Sector Fixed Income Fund, Multi-Sector Short Term Bond Fund and Real Estate Securities Fund, filed via EDGAR (as Exhibit d.7) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

Third Amendment to Amended and Restated Investment Advisory Agreement between Registrant and VIA dated September 24, 2007, on behalf of Alternatives Diversifier Fund, Foreign Opportunities Fund, Global Opportunities Fund, International Real Estate Securities Fund, AlphaSector Rotation Fund (now known as Virtus Sector Trend Fund) and AlphaSector Allocation Fund, filed via EDGAR (as Exhibit d.10) with Post-Effective Amendment No. 28 (File No. 033-65137) on November 14, 2007, and incorporated herein by reference.

Fourth Amendment to Amended and Restated Investment Advisory Agreement, between the Registrant and VIA on behalf of Senior Floating Rate Fund effective as of January 31, 2008, filed via EDGAR (as Exhibit d.13) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Fifth Amendment to Amended and Restated Investment Advisory Agreement, by and between the Registrant and VIA effective as of October 1, 2008, filed via EDGAR (as Exhibit d.14) with Post-Effective Amendment No. 32 (File No. 033-65137) on January 28, 2009, and incorporated herein by reference.

Sixth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA on behalf of Global Real Estate Securities Fund, Greater Asia ex Japan Opportunities Fund and Greater European Opportunities Fund effective as of March 2, 2009, filed via EDGAR (as Exhibit d.17) with Post-Effective Amendment No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Seventh Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of May 29, 2009, filed via EDGAR (as Exhibit d.18) with Post-Effective Amendment No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Eighth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of September 29, 2009, filed via EDGAR (as Exhibit d.22) with Post-Effective Amendment No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Ninth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of January 1, 2010, filed via EDGAR (as Exhibit d.26) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Tenth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of June 30, 2010, filed via EDGAR (as Exhibit d.27) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Eleventh Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of September 14, 2010, filed via EDGAR (as Exhibit d.28) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Twelfth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of January 1, 2011, filed via EDGAR (as Exhibit d.29) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Thirteenth Amendment to Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of March 15, 2011, filed via EDGAR (as Exhibit d.30) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Fourteenth Amendment to Amended and Restated Investment Advisory Agreement between Registrant and VIA effective as of February 6, 2012, on behalf of Dynamic Trend Fund (formerly Dynamic AlphaSector Fund and Market Neutral Fund), filed via EDGAR (as Exhibit d.15) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Fifteenth Amendment to the Amended and Restated Investment Advisory Agreement between Registrant and VIA effective as of August 28, 2012, on behalf of Emerging Markets Debt Fund,

Emerging Markets Equity Income Fund, Herzfeld Fund, International Small-Cap Fund and Wealth Masters Fund, filed via EDGAR (as Exhibit d.16) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Sixteenth Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of December 18, 2012, on behalf of Disciplined Equity Style Fund, Disciplined Select Bond Fund and Disciplined Select Country Fund, filed via EDGAR (as Exhibit d.17) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Seventeenth Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of June 10, 2013, on behalf of Low Volatility Equity Fund, filed via EDGAR (as Exhibit d.18) with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

Eighteenth Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of December 18, 2013, on behalf of Emerging Markets Small Cap Fund, filed via EDGAR (as Exhibit d.1.r) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Nineteenth Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of November 13, 2014, on behalf of International Wealth Masters Fund filed via EDGAR (as Exhibit d.1.s) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Twentieth Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of January 6, 2015, filed via EDGAR (as Exhibit d.1.t) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Twenty-First Amendment to the Amended and Restated Investment Advisory Agreement, by and between Registrant and VIA effective as of March 19, 2015, on behalf of Virtus Essential Resources Fund, filed via EDGAR (as Exhibit d.1.u) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Twenty-Second Amendment to the Amended and Restated Investment Advisory Agreement, by and between the Registrant and VIA effective as of May 11, 2015, on behalf of Virtus Multi-Asset Trend Fund, Virtus Sector Trend Fund, Virtus Dynamic Trend Fund, Virtus Global Equity Trend Fund and Virtus Equity Trend Fund, filed via EDGAR (as Exhibit d.1.v) with Post-Effective Amendment No. 85 (File No. 033-65137) on January 27, 2016, and incorporated herein by reference.

*Twenty-Third Amendment to the Amended and Restated Investment Advisory Agreement, by and between the Registrant and VIA effective as of February 8, 2016, on behalf of Virtus Equity Trend Fund, filed via EDGAR (as Exhibit d.1.w) herewith.

Investment Advisory Agreement between Virtus Insight Trust (“VIT”) and Virtus Investment Advisers, Inc. (“VIA”), dated May 18, 2006, filed via EDGAR (as Exhibit d.1) 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 VIT and VIA, dated January 1, 2010, filed via EDGAR (as Exhibit d.7) with VIT’s Post-Effective Amendment No. 50 (File No. 033-64915) on February 25, 2010, and incorporated herein by reference.

Subadvisory Agreement between VIA and Duff & Phelps Investment Management Co. (“Duff & Phelps”), dated June 27, 2007, on behalf of Global Dividend Fund and Real Estate Securities Fund, filed via EDGAR (as Exhibit d.9) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

First Amendment to Subadvisory Agreement between VIA and Duff & Phelps dated September 24, 2007, on behalf of International Real Estate Securities Fund, filed via EDGAR (as Exhibit d.11) with Post-Effective Amendment No. 28 (File No. 033-65137) on November 14, 2007, and incorporated herein by reference.

Second Amendment to Subadvisory Agreement between VIA and Duff & Phelps on behalf of Global Real Estate Securities Fund dated March 2, 2009, filed via EDGAR (as Exhibit d.20) with Post-Effective Amendment No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Third Amendment to Subadvisory Agreement between VIA and Duff & Phelps on behalf of Global Dividend Fund, Global Real Estate Securities Fund, International Real Estate Securities Fund and Real Estate Securities Fund dated January 1, 2010, filed via EDGAR (as Exhibit d.31) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

*Interim Subadvisory Agreement between VIA and Duff & Phelps on behalf of Virtus International Equity Fund dated September 7, 2016, filed via EDGAR (as Exhibit d.3.d) herewith.

Subadvisory Agreement between VIA and Thomas J. Herzfeld Advisors, Inc. (“Herzfeld”) on behalf of Herzfeld Fund dated August 28, 2012, filed via EDGAR (as Exhibit d.32) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Subadvisory Agreement between VIA and Horizon Asset Management LLC (“Horizon”) on behalf of Wealth Masters Fund dated August 28, 2012, filed via EDGAR (as Exhibit d.25) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Subadvisory Agreement between VIA and Horizon on behalf of International Wealth Masters Fund dated November 13, 2014, filed via EDGAR (as Exhibit d.13) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Subadvisory Agreement between VIA and Kayne Anderson Rudnick Investment Management, LLC (“Kayne Anderson Rudnick”) on behalf of International Small-Cap Equity Fund dated August 28, 2012, filed via EDGAR (as Exhibit d.26) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Amendment to Subadvisory Agreement between VIA and Kayne Anderson Rudnick dated December 18, 2013, on behalf of Emerging Markets Small-Cap Fund, filed via EDGAR (as Exhibit d.11.a) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Subadvisory Agreement between VIA and Kleinwort Benson Investors International, Ltd. (“KBI”) on behalf of Emerging Markets Equity Income Fund dated August 28, 2012, filed via EDGAR (as Exhibit d.27) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Subadvisory Agreement between VIA and KBI on behalf of Virtus Essential Resources Fund dated March 19, 2015, filed via EDGAR (as Exhibit d.16) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

10.

*Interim Subadvisory Agreement between VIA and KBI on behalf of Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources Fund dated January 13, 2016, filed via EDGAR (as Exhibit d.10) herewith.

11.

*Subadvisory Agreement between VIA and KBI on behalf of Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources Fund dated May 26, 2016, filed via EDGAR (as Exhibit d.11) herewith.

12.

*Subadvisory Agreement between VIA and KBI Global Investors (North America) Ltd. (fka Kleinwort Benson Investors International, Ltd.) (“KBI Global”) on behalf of Virtus Emerging Markets

Equity Income Fund and Virtus Essential Resources Fund dated August 31, 2016, filed via EDGAR (as Exhibit d.12) herewith.

13.

Subadvisory Agreement between VIA and Newfleet Asset Management, LLC (formerly SCM Advisors LLC) (“Newfleet”) dated July 1, 1998, filed via EDGAR (as Exhibit d.2) with Post-Effective Amendment No. 15 (File No. 033-65137) on January 25, 2005, and incorporated herein by reference.

Investment Subadvisory Agreement Amendment between VIA and Newfleet effective July 1, 1998 for the purpose of amending the Subadvisory Agreement of the same date in order to correct a typographical error in such Subadvisory Agreement, filed via EDGAR (as Exhibit d.3) with Post-Effective Amendment No. 15 (File No. 033-65137) on January 25, 2005, and incorporated herein by reference.

Amendment to Subadvisory Agreement between VIA and Newfleet dated November 20, 2002, filed via EDGAR (as Exhibit d.4) with Post-Effective Amendment No. 15 (File No. 033-65137) on January 25, 2005, and incorporated herein by reference.

Third Amendment to Subadvisory Agreement between VIA and Newfleet dated September 1, 2006, filed via EDGAR (as Exhibit d.5) with Post-Effective Amendment No. 23 (File No. 033-65137) on January 30, 2007, and incorporated herein by reference.

Fourth Amendment to Subadvisory Agreement between VIA and Newfleet, on behalf of High Yield Fund, dated June 27, 2007, filed via EDGAR (as Exhibit d.9) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

Fifth Amendment to Subadvisory Agreement between VIA and Newfleet, on behalf of Bond Fund and High Yield Fund, dated January 1, 2010, filed via EDGAR (as Exhibit d.23) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Sixth Amendment to Subadvisory Agreement between VIA and Newfleet on behalf of Multi-Sector Fixed Income Fund, Multi-Sector Short Term Bond Fund and Senior Floating Rate Fund dated June 2, 2011, filed via EDGAR (as Exhibit d.38) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Seventh Amendment to Subadvisory Agreement between VIA and Newfleet on behalf of CA Tax-Exempt Bond Fund dated September 30, 2011, filed via EDGAR (as Exhibit d.39) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

14.

Subadvisory Agreement between VIA and Newfleet on behalf of Low Duration Income Fund, dated May 18, 2012, filed via EDGAR (as Exhibit d.6) with VIT’s Post-Effective Amendment No. 56 (File No. 033-64915) on April 29, 2013, and incorporated herein by reference.

First Amendment to Subadvisory Agreement between VIA and Newfleet on behalf of Tax-Exempt Bond Fund, dated June 15, 2012, filed via EDGAR (as Exhibit d.7) with VIT’s Post-Effective Amendment No. 56 (File No. 033-64915) on April 29, 2013, and incorporated herein by reference.

15.

Subadvisory Agreement between VIA and Newfleet on behalf of Emerging Markets Debt Fund dated August 28, 2012, filed via EDGAR (as Exhibit d.29) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

16.

Subadvisory Agreement between VIA and Rampart Investment Management Company, LLC (“Rampart”) on behalf of Low Volatility Equity Fund dated June 10, 2013, filed via EDGAR with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

17.

Subadvisory Agreement between VIA and Vontobel Asset Management, Inc. (“Vontobel”) dated September 24, 2007, on behalf of Foreign Opportunities Fund, filed via EDGAR (as Exhibit d.12) with

Post-Effective Amendment No. 28 (File No. 033-65137) on November 14, 2007, and incorporated herein by reference.

First Amendment to Subadvisory Agreement between VIA and Vontobel dated January 1, 2009, filed via EDGAR (as Exhibit d.15) with Post-Effective Amendment No. 33 (File No. 033-65137) on March 2, 2009, and incorporated by reference.

Second Amendment to Subadvisory Agreement between VIA and Vontobel on behalf of Global Opportunities Fund dated January 28, 2009, filed via EDGAR (as Exhibit d.16) with Post-Effective Amendment No. 33 (File No. 033-65137) on March 2, 2009, and incorporated by reference.

Third Amendment to Subadvisory Agreement between VIA and Vontobel on behalf of Greater Asia ex Japan Opportunities Fund and Greater European Opportunities Fund dated April 21, 2009, filed via EDGAR (as Exhibit d.19) with Post-Effective Amendment No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Fourth Amendment to Subadvisory Agreement between VIA and Vontobel on behalf of Foreign Opportunities Fund, Global Opportunities Fund, Greater Asia ex Japan Opportunities Fund and Greater European Opportunities Fund dated January 1, 2010, filed via EDGAR (as Exhibit d.24) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

18.

Subadvisory Agreement between VIA and Vontobel on behalf of Emerging Markets Opportunities Fund, dated May 18, 2006, filed via EDGAR (as Exhibit d.3) with VIT’s 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 on behalf of Emerging Markets Opportunities Fund, 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.

(e)

Underwriting Agreement.

Underwriting Agreement between VP Distributors, LLC (formerly VP Distributors, Inc.) (“VP Distributors”) and Registrant dated July 1, 1998 and filed via EDGAR (as Exhibit e.1) with Post-Effective Amendment No. 15 (File No. 033-65137) on January 25, 2005, and incorporated herein by reference.

Distribution Agreement between Registrant and VP Distributors, LLC, dated May 18, 2006, filed via EDGAR (as Exhibit e.1) with VIT’s Post-Effective Amendment No. 44 (File No. 033-64915) on June 2, 2006, and incorporated herein by reference.

Form of Sales Agreement between VP Distributors and dealers, effective January, 2016, filed via EDGAR (as Exhibit e.2) with Post-Effective Amendment No. 35 to the Registration Statement of Virtus Retirement Trust (“VRT”); formerly known as Virtus Institutional Trust) (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

(f)

None.

(g)

Custodian Agreement.

Master Global Custody Agreement between each of Registrant, Virtus Equity Trust (“VET”) and VIT (collectively, “Virtus Mutual Funds”), and JPMorgan Chase Bank, N.A., dated March 1, 2013, filed via EDGAR (as Exhibit g.1) with Post-Effective Amendment No. 56 to the Registration Statement of VIT (File No. 033-64915) on April 29, 2013, and incorporated herein by reference.

Amendment to Master Global Custody Agreement, containing a revised Schedule A, by and among Registrant, Virtus Mutual Funds, VRT and JPMorgan Chase Bank, N.A., effective as of December 17, 2015, filed via EDGAR (as Exhibit g.1.a) with Post-Effective Amendment No. 85 to the Registration Statement of VOT (File No. 033-65137) on January 27, 2016, and incorporated herein by reference.

(h)

Other Material Contracts.

Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services, LLC (“Virtus Fund Services”)) dated January 1, 2010, filed via EDGAR (as Exhibit h.2) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Amendment to Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services) effective as of April 14, 2010, filed via EDGAR (as Exhibit h.2) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Second Amendment to Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services) effective as of March 15, 2011, filed via EDGAR (as Exhibit h.3) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Corrected Third Amendment to Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds, VRT and Virtus Fund Services effective as of January 1, 2013, filed via EDGAR (as Exhibit h.1.c) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Fourth Amendment to Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of January 1, 2015, filed via EDGAR (as Exhibit h.1.d) with Post-Effective Amendment No. 104 to VET’s Registration Statement (File No. 002-16590) on July 28, 2015, and incorporated herein by reference.

Fifth Amendment to Amended and Restated Transfer Agency and Service Agreement between Virtus Mutual Funds, VRT, and Virtus Fund Services, dated January 8, 2016, filed via EDGAR (as Exhibit h.1.e) with Post-Effective Amendment No. 35 to the Registration Statement of VRT (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

Sub-Transfer Agency and Shareholder Services Agreement among Virtus Mutual Funds, VP Distributors (since assigned to Virtus Fund Services) 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 to the Registration Statement of VIT (File No. 033-64915) on April 27, 2012, and incorporated herein by reference.

Adoption and Amendment Agreement among Virtus Mutual Funds, Virtus Alternative Solutions Trust (“VAST”), Virtus Fund Services and BNY Mellon dated as of March 21, 2014, filed via EDGAR (as Exhibit h.2.b) with Pre-Effective Amendment No. 4 to VAST’s Registration Statement (File No. 333-191940) on April 4, 2014, and incorporated herein by reference.

Amendment to Sub-Transfer Agency and Shareholder Services Agreement among Virtus Mutual Funds, VAST, Virtus Fund Services and BNY Mellon dated as of March 21, 2014, filed via EDGAR (as Exhibit h.2.a) with Post-Effective Amendment No. 4 to VAST’s Registration Statement (File No. 333-191940) on September 8, 2014, and incorporated herein by reference.

Amendment to Sub-Transfer Agency and Shareholder Services Agreement among Virtus Mutual Funds, VAST, Virtus Fund Services and BNY Mellon dated as of November 12, 2014, filed via EDGAR (as Exhibit h.2.c) with Post-Effective Amendment No. 80 (File No. 033-65137) on January 27, 2015, and incorporated herein by reference.

Amendment to Sub-Transfer Agency and Shareholder Services Agreement among Virtus Mutual Funds, VAST, Virtus Fund Services and BNY Mellon dated as of May 28, 2015, filed via EDGAR (as Exhibit h.2.d) with Post-Effective Amendment No. 18 to VAST’s Registration Statement (File No. 333-191940) on June 5, 2015, and incorporated herein by reference.

Amendment to Sub-Transfer Agency and Shareholder Services Agreement among Virtus Mutual Funds, VAST, VRT, Virtus Fund Services and BNY Mellon dated as of December 10, 2015, filed via

EDGAR (as Exhibit h.2.e) with Post-Effective Amendment No. 35 to the Registration Statement of VRT (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of January 1, 2010, filed via EDGAR (as Exhibit h.4) with PEA No. 36 (File No. 033-65137) on January 28, 2010, and incorporated herein by reference.

First Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of April 14, 2010, filed via EDGAR (as Exhibit h.5) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Second Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of June 30, 2010, filed via EDGAR (as Exhibit h.6) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Third Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of September 14, 2010, filed via EDGAR (as Exhibit h.7) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Fourth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of January 1, 2011, filed via EDGAR (as Exhibit h.8) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Fifth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of March 15, 2011, filed via EDGAR (as Exhibit h.9) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Sixth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and VP Distributors (since assigned to Virtus Fund Services), effective as of August 28, 2012, filed via EDGAR (as Exhibit h.2.f) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Seventh Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and VP Distributors (since assigned to Virtus Fund Services), effective as of December 18, 2012, filed via EDGAR (as Exhibit h.2.g) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Eighth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of June 10, 2013, filed via EDGAR with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

Ninth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of December 18, 2013, filed via EDGAR (as Exhibit h.3.i) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Tenth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of November 13, 2014, filed via EDGAR (as Exhibit h.3.j) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Eleventh Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of January 1, 2015, filed via EDGAR (as Exhibit h.3.k) with Post-Effective Amendment No. 80 (File No. 033-65137) on January 27, 2015, and incorporated herein by reference.

Twelfth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds and Virtus Fund Services, effective as of March 19, 2015, filed via EDGAR (as Exhibit h.3.l) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Thirteenth Amendment to Amended and Restated Administration Agreement between Virtus Mutual Funds, VRT and Virtus Fund Services, effective as of January 8, 2016, filed via EDGAR (as Exhibit h.3.m) with Post-Effective Amendment No. 35 to the Registration Statement of VRT (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of January 1, 2010, filed via EDGAR (as Exhibit h.5) with Post-Effective Amendment No. 50 to the Registration Statement of VIT (File No. 033-64915) on February 25, 2010, and incorporated herein by reference.

First Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of June 30, 2010 filed via EDGAR (as Exhibit h.13.) with Post-Effective Amendment No. 52 to the Registration Statement of VIT (File No. 033-64915) on April 28, 2011, and incorporated herein by reference.

Second Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of September 14, 2010 filed via EDGAR (as Exhibit h.14.) with Post-Effective Amendment No. 52 to the Registration Statement of VIT (File No. 033-64915) on April 28, 2011, and incorporated herein by reference.

Third Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of March 15, 2011 filed via EDGAR (as Exhibit h.15.) with Post-Effective Amendment No. 52 to the Registration Statement of VIT (File No. 033-64915) on April 28, 2011, and incorporated herein by reference.

Fourth Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of August 28, 2012, filed via EDGAR (as Exhibit h.4.d) with Post-Effective Amendment No. 56 to the Registration Statement of VIT (File No. 033-64915) on April 29, 2013, and incorporated herein by reference.

Fifth Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VP Distributors (since assigned to Virtus Fund Services) and BNY Mellon, effective as of December 18, 2012, filed via EDGAR (as Exhibit h.4.e) with Post-Effective Amendment No. 56 to the Registration Statement of VIT (File No. 033-64915) on April 29, 2013, and incorporated herein by reference.

Sixth Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, Virtus Fund Services and BNY Mellon, effective as of June 10, 2013, filed via EDGAR (as Exhibit h.4.f) with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

Seventh Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, Virtus Fund Services and BNY Mellon, effective as of December 18,

2013, filed via EDGAR (as Exhibit h.4.g) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Joinder Agreement and Amendment to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VAST, Virtus Variable Insurance Trust (“VVIT”), VATS Offshore Fund, Ltd. (“VATS”), Virtus Fund Services and BNY Mellon dated February 24, 2014, filed via EDGAR (as Exhibit h.4.h) with Pre-Effective Amendment No. 3 to VAST’s Registration Statement (File No. 333-191940) on March 28, 2014, and incorporated herein by reference.

Joinder Agreement to Sub-Administration and Accounting Services Agreement among Virtus Mutual Funds, VRT, VVIT, VAST, VATS, Virtus Fund Services and BNY Mellon dated December 10, 2015, filed via EDGAR (as Exhibit h.4.i) with Post-Effective Amendment No. 35 to the Registration Statement of VRT (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

*Twenty-Fifth Amended and Restated Expense Limitation Agreement between Registrant and VIA, effective as of February 8, 2016, filed via EDGAR (as Exhibit h.5) herewith.

Sixth Amended and Restated Expense Limitation Agreement between VIT and VIA, effective as of September 1, 2015, filed via EDGAR (as Exhibit h.5) with Post-Effective Amendment No. 65 to the Registration Statement of VIT (File No. 033-64915) on April 20, 2016, and incorporated herein by reference.

Second Amended and Restated Fee Waiver Agreement between Registrant and VP Distributors, dated as of March 17, 2011, filed via EDGAR (as Exhibit h.6) with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

First Amended Fee Waiver Agreement (Class I Shares) between VIT and VP Distributors, effective as of December 1, 2014, filed via EDGAR (as Exhibit h.8) with Post-Effective Amendment No. 63 to the Registration Statement of VIT (File No. 033-64915) on April 29, 2015, and incorporated herein by reference.

Form of Indemnification Agreement with Trustees George R. Aylward, Leroy Keith, Jr., Hassell H. McClellan, Philip R. McLoughlin, Geraldine M. McNamara, James M. Oates, Richard E. Segerson and Ferdinand L.J. Verdonck, effective as of January 21, 2015, filed via EDGAR (as Exhibit h.8) with Post-Effective Amendment No. 104 to the Registration Statement of VET (File No. 002-16590) on July 28, 2015, and incorporated herein by reference.

10.

Form of Indemnification Agreement with Trustees Thomas J. Brown, Donald C. Burke, Roger A. Gelfenbien and John R. Mallin, effective as of May 26, 2016, filed via EDGAR (as Exhibit h.8) with Post-Effective Amendment No. 87 to the Registration Statement of VOT on July 8, 2016, and incorporated herein by reference.

(i)

Legal Opinion.

Opinion and consent of Morris, Nichols, Arsht & Tunnell, filed via EDGAR (as Exhibit e.10) with Pre-Effective Amendment No. 2 (File No. 033-65137) on February 29, 1996, and incorporated herein by reference.

Opinion of Counsel as to legality of shares dated March 13, 2015, filed via EDGAR (as Exhibit i.2) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Opinion as to legality of the shares filed via EDGAR (as Exhibit i.1) with VIT’s Post-Effective Amendment No. 61 (File No. 033-64915) on November 12, 2014, and incorporated herein by reference.

*Opinion of Counsel as to legality of shares dated September 23, 2016, filed via EDGAR (as Exhibit i.4) herewith.

*Consent of Sullivan & Worcester, filed via EDGAR (as Exhibit i.5) herewith.

(j)

Other Opinions.

*Consent of Independent Registered Public Accounting Firm filed via EDGAR (as Exhibit j.1) herewith.

(k)

Not applicable.

(l)

Initial Capital Agreements

Share Purchase Agreement (the “Share Purchase Agreement”) between Registrant and GMG/Seneca Capital Management, L.P., filed via EDGAR with Pre-Effective Amendment No. 2 (File No. 033-65137) on February 29, 1996, and incorporated herein by reference.

Form of Purchase Agreement relating to Initial Capital filed via EDGAR with VIT’s 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 VIT’s 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 VIT’s 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 of Registrant Pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), effective March 1, 2007, filed via EDGAR (as Exhibit m.1.) with Post-Effective Amendment No. 25 (File No. 033-65137) on June 27, 2007, and incorporated herein by reference.

Amendment to Class A Shares Amended and Restated Distribution Plan Pursuant to Rule 12b-1 under the 1940 Act, effective June 27, 2007, filed via EDGAR (as Exhibit m.4) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

Amendment No. 2 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective September 24, 2007, filed via EDGAR (as Exhibit m.8) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 3 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective October 1, 2007, filed via EDGAR (as Exhibit m.11) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 4 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective January 31, 2008, filed via EDGAR (as Exhibit m.13) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 5 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective March 2, 2009, filed via EDGAR (as Exhibit m.15) with Post-Effective No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Amendment No. 6 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective April 21, 2009, filed via EDGAR (as

Exhibit m.16) with Post-Effective No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Amendment No. 7 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 30, 2010, filed via EDGAR (as Exhibit m.19) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Amendment No. 8 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective September 14, 2010, filed via EDGAR (as Exhibit m.21) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Amendment No. 9 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective March 15, 2011, filed via EDGAR (as Exhibit m.23) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Amendment No. 10 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective August 28, 2012, filed via EDGAR (as Exhibit m.1.j) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Amendment No. 11 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective December 18, 2012, filed via EDGAR (as Exhibit m.1.k) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Amendment No. 12 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 10, 2013, filed via EDGAR with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

Amendment No. 13 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective December 18, 2013, on behalf of Emerging Markets Small-Cap Fund, filed via EDGAR (as Exhibit m.1.m) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Amendment No. 14 to Class A Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective November 13, 2014, filed via EDGAR (as Exhibit m.1.n) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Amendment No. 15 to Class A Shares Amended and Restated Distribution Plan Pursuant to Rule 12b-1 under the 1940 Act, effective March 19, 2015, filed via EDGAR (as Exhibit m.1.o) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Class A Shares Amended and Restated Distribution Plan of VIT Pursuant to Rule 12b-1 under the 1940 Act, dated March 1, 2007, filed via EDGAR (as Exhibit m.1) with VIT’s Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007, and incorporated herein by reference

Class A Shares Amended and Restated Shareholder Services Plan of VIT Not Pursuant to Rule 12b-1 under the 1940 Act, dated March 1, 2007, filed via EDGAR (as Exhibit m.3) with VIT’s Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007, and incorporated herein by reference.

Class B Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective March 1, 2007, filed via EDGAR (as Exhibit m.2) with Post-Effective Amendment No. 25 (File No. 033-65137) on June 27, 2007, and incorporated herein by reference.

Amendment to Class B Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 27, 2007, filed via EDGAR (as Exhibit m.5) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

Amendment No. 2 to Class B Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective September 24, 2007, filed via EDGAR (as Exhibit m.9) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective March 1, 2007, filed via EDGAR (as Exhibit m.3) with Post-Effective Amendment No. 25 (File No. 033-65137) on June 27, 2007, and incorporated herein by reference.

Amendment to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 27, 2007, filed via EDGAR (as Exhibit m.6) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

Amendment No. 2 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective September 24, 2007, filed via EDGAR (as Exhibit m.10) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 3 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective October 1, 2007, filed via EDGAR (as Exhibit m.12) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 4 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective January 31, 2008, filed via EDGAR (as Exhibit m.14) with Post-Effective Amendment No. 29 (File No. 033-65137) on January 28, 2008, and incorporated herein by reference.

Amendment No. 5 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective March 2, 2009, filed via EDGAR (as Exhibit m.17) with Post-Effective No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Amendment No. 6 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective April 21, 2009, filed via EDGAR (as Exhibit m.18) with Post-Effective No. 34 (File No. 033-65137) on October 1, 2009, and incorporated herein by reference.

Amendment No. 7 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective June 30, 2010, filed via EDGAR (as Exhibit m.20) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Amendment No. 8 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective September 14, 2010, filed via EDGAR (as Exhibit m.22) with Post-Effective Amendment No. 44 (File No. 033-65137) on January 27, 2011, and incorporated herein by reference.

Amendment No. 9 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective March 15, 2011, filed via EDGAR (as Exhibit m.24) with Post-Effective Amendment No. 51 (File No. 033-65137) on January 27, 2012, and incorporated herein by reference.

Amendment No. 10 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective August 28, 2012, filed via EDGAR (as Exhibit m.3.j) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Amendment No. 11 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act effective December 18, 2012, filed via EDGAR (as Exhibit m.3.k) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

Amendment No. 12 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 10, 2013, filed via EDGAR (as Exhibit m.3.l) with Post-Effective Amendment No. 64 (File No. 033-65137) on June 10, 2013, and incorporated herein by reference.

Amendment No. 13 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective December 18, 2013, filed via EDGAR (as Exhibit m.3.m) with Post-Effective Amendment No. 70 (File No. 033-65137) on January 27, 2014, and incorporated herein by reference.

Amendment No. 14 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective November 13, 2014, filed via EDGAR (as Exhibit m.3.n) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Amendment No. 15 to Class C Shares Amended and Restated Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective March 19, 2015, filed via EDGAR (as Exhibit m.3.o) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Class C Shares Amended and Restated Distribution Plan of VIT Pursuant to Rule 12b-1 under the 1940 Act, dated March 1, 2007, filed via EDGAR (as Exhibit m.2) with VIT’s 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 of VIT Not Pursuant to Rule 12b-1 under the 1940 Act, dated March 1, 2007, filed via EDGAR (as Exhibit m.5) with VIT’s Post-Effective Amendment No. 46 (File No. 033-64915) on April 24, 2007, and incorporated herein by reference.

Class T Shares Distribution Plan of Registrant Pursuant to Rule 12b-1 under the 1940 Act, effective June 27, 2007, filed via EDGAR (as Exhibit m.7) with Post-Effective Amendment No. 27 (File No. 033-65137) on September 24, 2007, and incorporated herein by reference.

(n)

Rule 18f-3 Plans.

Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of August 21, 2014, filed via EDGAR (as Exhibit n.1) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

First Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of November 13, 2014, filed via EDGAR (as Exhibit n.1.a) with Post-Effective Amendment No. 75 (File No. 033-65137) on November 12, 2014, and incorporated herein by reference.

Second Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of March 19, 2015, filed via EDGAR (as Exhibit n.1.b) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Third Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 under the 1940 Act, effective as of January 8, 2016, filed via EDGAR (as Exhibit n.1.c) with Post-Effective Amendment No. 35 to the Registration Statement of VRT (File No. 033-80057) on January 8, 2016, and incorporated herein by reference.

(o)

Reserved.

(p)

Code of Ethics.

*Amended and Restated Code of Ethics of the Virtus Mutual Funds effective August 2016, filed via EDGAR (as Exhibit p.1) herewith.

*Amended and Restated Code of Ethics of VIA, VP Distributors and other Virtus Affiliates dated June 30, 2016, filed via EDGAR (as Exhibit p.2) herewith.

*Code of Ethics of Subadviser Vontobel dated November, 2015, filed via EDGAR (as Exhibit p.3) herewith.

Code of Ethics of Subadviser Herzfeld dated May 23, 2012, filed via EDGAR (as Exhibit p.8) with Post-Effective Amendment No. 61 (File No. 033-65137) on January 25, 2013, and incorporated herein by reference.

*Code of Ethics of Subadviser Horizon dated December 2015, filed via EDGAR (as Exhibit p.5) herewith.

*Code of Ethics of Subadviser KBI dated November 2015, filed via EDGAR (as Exhibit p.6) herewith.

(q)

Powers of Attorney

Power of Attorney for all Trustees, dated June 2, 2010, filed via EDGAR (as Exhibit q) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Power of Attorney for Trustee Hassell H. McClellan, dated January 21, 2015, filed via EDGAR (as Exhibit r) with Post-Effective Amendment No. 82 (File No. 033-65137) on March 13, 2015, and incorporated herein by reference.

Power of Attorney for Trustees Thomas J. Brown, Donald C. Burke, Roger A. Gelfenbien and John R. Mallin, dated June 30, 2016, filed via EDGAR (as Exhibit q.3) with Post-Effective Amendment No. 87 (File No. 033-65137) on July 8, 2016, 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 January 25, 2005. Indemnification of Registrant’s Custodian is provided for in Section 7 of the Master Global Custody Agreement incorporated herein by reference to Exhibit G.1 of the Registration Statement of VIT (File No. 033-64915) filed April 29, 2013. The indemnification of Registrant’s Transfer Agent is provided for in Article 6 of the Amended and Restated

Transfer Agency and Service Agreement incorporated herein by reference to Exhibit h.6 of the Registration Statement of VIT (File No. 033-64915) filed on February 25, 2010. The Trust has entered into Indemnification Agreements with each trustee, the form of which is incorporated herein by reference to Exhibit H.8 of VET’s Registration Statement filed on July 28, 2015, whereby the Registrant shall indemnify the trustee for expenses incurred in any proceeding in connection with the trustee’s service to the Registrant subject to certain limited exceptions.

In addition, Article VII sections 2 and 3 of the Registrant’s Agreement and Declaration of Trust incorporated herein by reference to Exhibit A of the Registrant’s Registration Statement filed on January 25, 2002, provides in relevant part as follows:

“A Trustee, when acting in such capacity, shall not be personally liable to any Person, other than the Trust or a Shareholder to the extent provided in this Article VII, for any act, omission or obligation of the Trust, of such Trustee or of any other Trustee. The Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, Manager or Principal Underwriter of the Trust. The Trust (i) may indemnify an agent of the Trust or any Person who is serving or has served at the Trust’s request as an agent of another organization in which the Trust has any interest as a shareholder, creditor or otherwise and (ii) shall indemnify each Person who is, or has been, a Trustee, officer or employee of the Trust and any Person who is serving or has served at the Trust’s request as a director, officer, trustee, or employee of another organization in which the Trust has any interest as a shareholder, creditor or otherwise, in the case of (i) and (ii), to the fullest extent consistent with the Investment Company Act of 1940, as amended (the “1940 Act”) and in the manner provided in the By-Laws; provided that such indemnification shall not be available to any of the foregoing Persons in connection with a claim, suit or other proceeding by any such Person against the Trust or a Series (or Class) thereof.

All persons extending credit to, contracting with or having any claim against the Trust or the Trustees shall look only to the assets of the appropriate Series (or Class thereof if the Trustees have included a Class limitation on liability in the agreement with such person as provided below), or, if the Trustees have yet to establish Series, of the Trust for payment under such credit, contract or claim; and neither the Trustees nor the Shareholders, nor any of the Trust’s officers, employees or agents, whether past, present or future, shall be personally liable therefor.

Every note, bond, contract, instrument, certificate or undertaking and every other act or thing whatsoever executed or done by or on behalf of the Trust or the Trustees by any of them in connection with the Trust shall conclusively be deemed to have been executed or done only in or with respect to his or their capacity as Trustee or Trustees, and such Trustee or Trustees shall not be personally liable thereon. …

… A Trustee shall be liable to the Trust and to any Shareholder solely for her or his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust, and shall be under no liability for any act or omission in accordance with such advice nor for failing to follow such advice.”

In addition, Article III section 7 of such Agreement and Declaration of Trust provides for the indemnification of shareholders of the Registrant as follows: “If any Shareholder or former Shareholder shall be exposed to liability by reason of a claim or demand relating to such Person being or having been a Shareholder, and not because of such Person's acts or omissions, the Shareholder or former Shareholder (or such Person's heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled to be held harmless from and indemnified out of the assets of the Trust against all cost and expense reasonably incurred in connection with such claim or demand, but only out of the assets held with respect to the particular Series of Shares of which such Person is or was a Shareholder and from or in relation to which such liability arose. The Trust may, at its option and shall, upon request by the Shareholder, assume the

defense of any claim made against the Shareholder for any act or obligation of the Trust and satisfy any judgment thereon from the assets held with respect to the particular series.”

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 January 30, 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 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 which is included in this Post-Effective Amendment. For information as to the business, profession, vocation or employment of a substantial nature of directors and officers of the Adviser and Subadvisers, reference is made to the Adviser’s and each Subadviser’s current Form ADV filed under the Investment Advisers Act of 1940, and incorporated herein by reference.

Adviser		SEC File No.:
VIA		801-5995
Duff & Phelps		801-14813
Herzfeld		801-20866
Horizon		801-47515
Kayne Anderson		801-24241
KBI		801-60358
Newfleet		801-51559
Rampart		801-77244
Vontobel		801-21953

Item 32.

Principal Underwriter

(a)

VP Distributors, LLC serves as the principal underwriter for the following registrants:

Virtus Alternative Solutions Trust, Virtus Equity Trust, Virtus Opportunities Trust Virtus Variable Insurance Trust and Virtus Retirement Trust.

(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	Executive Vice President	President and Trustee
Kevin J. Carr	Vice President, Counsel and Secretary	Senior Vice President, Chief Legal Officer, Counsel and Secretary
Nancy J. Engberg	Vice President and Assistant Secretary	Vice President and Chief Compliance Officer
David Hanley	Vice President and Treasurer	None
Barry Mandinach	President	None
David C. Martin	Vice President and Chief Compliance Officer	None
Francis G. Waltman	Executive Vice President	Executive 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 1940 Act 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

Administrator & Transfer Agent:
Virtus Fund Services, LLC 100 Pearl Street Hartford, CT 06103

Fund Accountant, Sub-Administrator, Sub-Transfer Agent and Dividend Dispersing Agent:
BNY Mellon Investment Servicing (US) Inc. 301 Bellevue Parkway Wilmington, DE 19809

Subadviser to: Global Infrastructure Fund, Global Real Estate Securities Fund, International Equity Fund, International Real Estate Securities Fund and Real Estate Securities Fund
Duff & Phelps Investment Management Co. 200 South Wacker Drive, Suite 500 Chicago, IL 60606

Subadviser to: Herzfeld Fund		Subadviser to: International Wealth Masters Fund and Wealth Masters Fund
Thomas J. Herzfeld Advisors, Inc. 119 Washington Avenue, Suite 504 Miami Beach, FL 33139		Horizon Asset Management LLC 470 Park Avenue South New York, NY 10016

Subadviser to: Emerging Markets Small-Cap Fund and International Small-Cap Equity Fund		Subadviser to: Emerging Markets Equity Income Fund and Essential Resources Fund
Kayne Anderson Rudnick Investment Management, LLC 1800 Avenue of the Stars, 2nd Floor Los Angeles, CA 90067		KBI Global Investors (North America) Ltd 3 ^rd Floor, 2 Harbourmaster Place IFSC, Dublin 1, Ireland

Subadviser to: CA Tax-Exempt Bond Fund, Bond Fund, Emerging Markets Debt Fund, High Yield Fund, Low Duration Income Fund, Multi-Sector Fixed Income Fund, Multi-Sector Short Term Bond Fund, Senior Floating Rate Fund and Tax-Exempt Bond Fund		Subadviser to: Emerging Markets Opportunities Fund, Foreign Opportunities Fund, Global Opportunities Fund, and Greater European Opportunities Fund
Newfleet Asset Management, LLC 100 Pearl Street Hartford, CT 06103		Vontobel Asset Management, Inc. 1540 Broadway, 38th Floor New York, NY 10036

Subadviser to: Low Volatility Equity Fund
Rampart Investment Management Company, LLC One International Place, 14th Floor Boston, MA 02110

Item 34.

Management Services

None.

Item 35.

Undertakings

None.

Item 28.

Exhibits

d.1.w	Twenty-Third Amendment to the Amended and Restated Investment Advisory Agreement
d.3.d	Interim Subadvisory Agreement between VIA and Duff & Phelps on behalf of Virtus International Equity Fund
d.10	Interim Subadvisory Agreement between VIA and KBI on behalf of Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources Fund
d.11	Subadvisory Agreement between VIA and KBI on behalf of Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources Fund
d.12	Subadvisory Agreement between VIA and KBI Global Investors (North America) Ltd. (fka Kleinwort Benson Investors International, Ltd.) on behalf of Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources Fund
h.5	Twenty-Fifth Amended and Restated Expense Limitation Agreement between Registrant and VIA
i.4	Opinion of Counsel as to legality of shares dated September 23, 2016
i.5	Consent of Sullivan & Worcester
j.1	Consent of Independent Registered Public Accounting Firm
p.1	Amended and Restated Code of Ethics of the Virtus Mutual Funds
p.2	Amended and Restated Code of Ethics of VIA, VP Distributors and other Virtus Affiliates
p.3	Code of Ethics of Subadviser Vontobel Asset Management, Inc.
p.5	Code of Ethics of Subadviser Horizon
p.6	Code of Ethics of Subadviser Kleinwort Benson Investors International Ltd.

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 for this registration statement under Rule 485(b) of 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 23 ^rd day of September, 2016.

VIRTUS OPPORTUNITIES 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 23 ^rd day of September, 2016.

Signature		Title

/s/ George R. Aylward
George R. Aylward		Trustee and President (principal executive officer)

/s/ W. Patrick Bradley
W. Patrick Bradley		Chief Financial Officer and Treasurer
		(principal financial and accounting officer)

/s/ Thomas J. Brown
Thomas J. Brown*		Trustee

/s/ Donald C. Burke
Donald C. Burke*		Trustee

/s/ Roger A. Gelfenbien
Roger A. Gelfenbien*		Trustee

/s/ John R. Mallin
John R. Mallin*		Trustee

/s/ Hassell H. McClellan
Hassell H. McClellan*		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

*By:	/s/ George R. Aylward
	*George R. Aylward, Attorney-in-Fact, pursuant to a power of attorney

Exhibit d.1.w

TWENTY-THIRD AMENDMENT

TO AMENDED AND RESTATED

INVESTMENT ADVISORY AGREEMENT

THIS AMENDMENT effective as of the 8 ^th day of February 2016, amends that certain Amended and Restated Investment Advisory Agreement dated as of November 20, 2002, and amended as of June 8, 2006, June 27, 2007, September 24, 2007, January 31, 2008, October 1, 2008, March 2, 2009, May 29, 2009, September 29, 2009, January 1, 2010, June 30, 2010, September 14, 2010, January 1, 2011, March 15, 2011, February 6, 2012, August 28, 2012, December 18, 2012, June 10, 2013, December 18, 2013, November 13, 2014, January 6, 2015, March 19, 2015, and May 11, 2015 (the “Agreement”), by and between Virtus Opportunities Trust, a Delaware statutory trust (the “Trust”), and Virtus Investment Advisers, Inc., a Massachusetts corporation (the “Adviser”), as follows:

The investment advisory fees for Virtus Equity Trend Fund are hereby set forth on Schedule A to the Agreement, Schedule A is hereby deleted and Schedule A attached hereto is substituted in its place to reflect such addition.

Schedule A is hereby deleted and Schedule A attached hereto is substituted in its place.

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 but not defined herein shall have the meanings ascribed thereto in the Agreement, as amended.

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 of other representatives.

	VIRTUS OPPORTUNITIES TRUST

	By:	/s/ W. Patrick Bradley
	Name:	W. Patrick Bradley
	Title:	Senior Vice President, Chief Financial Officer & Treasurer

	VIRTUS INVESTMENT ADVISERS, INC.

	By:	/s/ Francis G. Waltman
	Name:	Francis G. Waltman
	Title:	Executive Vice President

SCHEDULE A

Series	Investment Advisory Fee

Virtus Alternatives Diversifier Fund		0.00	%
Virtus Essential Resources Fund		1.10	%

	1 ^st $1 Billion			$1+ Billion through $2 Billion			$2+ Billion

Virtus CA Tax-Exempt Bond Fund		0.45	%		0.40	%		0.35	%
Virtus Global Commodities Stock Fund		1.00	%		0.95	%		0.90	%
Virtus Global Dividend Fund		0.65	%		0.60	%		0.55	%
Virtus Global Opportunities Fund		0.85	%		0.80	%		0.75	%
Virtus Global Real Estate Securities Fund		0.85	%		0.80	%		0.75	%
Virtus High Yield Fund		0.65	%		0.60	%		0.55	%
Virtus International Real Estate Securities Fund		1.00	%		0.95	%		0.90	%
Virtus Multi-Sector Intermediate Bond Fund		0.55	%		0.50	%		0.45	%
Virtus Real Estate Securities Fund		0.75	%		0.70	%		0.65	%
Virtus Senior Floating Rate Fund		0.60	%		0.55	%		0.50	%

	1 ^st $2 Billion			$2+ Billion through $4 Billion			$4+ Billion

Virtus Multi-Asset Trend Fund		1.00	%		0.95	%		0.90	%
Virtus Disciplined Select Country Fund		1.10	%		1.05	%		1.00	%
Virtus Disciplined Select Bond Fund		0.80	%		0.75	%		0.70	%
Virtus Disciplined Equity Style Fund		1.00	%		0.95	%		0.90	%
Virtus Foreign Opportunities Fund		0.85	%		0.80	%		0.75	%
Virtus Global Equity Trend Fund		1.00	%		0.95	%		0.90	%
Virtus International Equity Fund		0.85	%		0.80	%		0.75	%
Virtus Low Volatility Equity Fund		0.95	%		0.90	%		0.85	%

	1 ^st $1 Billion			$1+ Billion

Virtus Sector Trend Fund		0.45	%		0.40	%
Virtus Bond Fund		0.45	%		0.40	%
Virtus Emerging Markets Debt Fund		0.75	%		0.70	%
Virtus Emerging Markets Small-Cap Fund		1.20	%		1.15	%
Virtus Emerging Markets Equity Income Fund		1.05	%		1.00	%
Virtus Greater European Opportunities Fund		0.85	%		0.80	%
Virtus Herzfeld Fund		1.00	%		0.95	%
Virtus International Small-Cap Fund		1.00	%		0.95	%
Virtus International Wealth Masters Fund		0.90	%		0.85	%
Virtus Wealth Masters Fund		0.85	%		0.80	%

	1st $4 Billion			$4+ Billion

Virtus Equity Trend Fund		1.00	%		0.95	%

1 ^st $1 Billion

$1+ Billion
through

$2 Billion

$2+ Billion
through $10
billion

$10+
Billion

Virtus Multi-Sector Short Term Bond Fund

0.55

0.50

0.45

0.425

Exhibit d.3.d

VIRTUS OPPORTUNITIES TRUST

VIRTUS INTERNATIONAL EQUITY FUND

INTERIM SUBADVISORY AGREEMENT

September 7, 2016

Duff & Phelps Investment Management Co.

200 S. Wacker Drive, Suite 500

Chicago, IL 60606

RE:

Interim Subadvisory Agreement

Ladies and Gentlemen:

Virtus Opportunities Trust (the “Fund”) is an open-end investment company of the series type registered under the Investment Company Act of 1940 (the “Act”), as amended, 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 Virtus International Equity Fund (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 Duff & Phelps Investment Management Co. (the “Subadviser”) as a discretionary series adviser to invest and reinvest that discrete portion of the assets of the Series designated by the Adviser (the “Allocated Portion”) as set forth on Schedule F attached hereto 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. It is acknowledged and agreed that the Adviser may appoint from time to time other subadvisers in addition to the Subadviser to manage the assets of the Series that do not constitute the Allocated Portion and nothing in this Agreement shall be construed or interpreted to grant the Subadviser an exclusive arrangement to act as the sole subadviser to the Series. It is further acknowledged and agreed that the Adviser makes no commitment to designate any portion of the Series assets to the Subadviser as the Allocated Portion.

Acceptance of Employment; Standard of Performance . The Subadviser accepts its employment as a discretionary series adviser of the Allocated Portion of the Series and agrees to use its best professional judgment to make investment decisions for the Allocated Portion of the 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 Allocated Portion of the Series, the Subadviser shall be subject to the investment objectives, policies and restrictions of the Fund as they apply to the 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 Allocated Portion of the Series at the time of the transaction to be out of compliance with any of such restrictions or policies. Except as expressly set forth in this Agreement, the Subadviser shall not be responsible for aspects of the Series’ investment program other than managing the Allocated Portion in accordance with the terms and conditions of this Agreement, including without limitation the requirements of this Section 3 and Schedule D of this Agreement.

Transaction Procedures . All series transactions for the Allocated Portion of the 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 Allocated Portion of the 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.

Allocation of Brokerage . The Subadviser shall have authority and discretion to select brokers and dealers to execute the Allocated Portion of the 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 securities for the Allocated Portion of the Series, 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 Allocated Portion of the Series, 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 Allocated Portion of the Series, as to which the Subadviser exercises investment discretion, notwithstanding that the Allocated Portion of the Series may not be the direct or exclusive beneficiary of any such services or that another broker may be willing to charge the Allocated Portion of the Series a lower commission on the particular transaction.

The Subadviser may manage other portfolios and expects that the Allocated Portion of the Series 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 Allocated Portion of the 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 Allocated Portion of the Series and to such other accounts.

The Subadviser shall not execute any Series transactions for the Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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.

Information and Reports .

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 Allocated Portion of the 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 Allocated Portion of the 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 Allocated Portion of the 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 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 Allocated Portion of the 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 Allocated Portion of the Series pursuant to this Agreement, and (ii) include performance statistics regarding the Allocated Portion of 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

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 such records on behalf of the Fund, in the manner required or permitted by the Act and the Rules thereunder as are required of an investment adviser of a registered investment company (to the extent applicable). 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, written policies and procedures reasonably designed to prevent violation, by it and its supervised persons, of the Advisers Act and the rules that the SEC has adopted under the Advisers Act. Throughout the term of this Agreement, the Subadviser shall provide the Adviser with any certifications, information and access to personnel and resources (including those resources that will permit testing of Subadviser’s compliance policies by the Adviser) that the Adviser may reasonably request to enable the Fund to comply with Rule 38a-1 under the Act. 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 Allocated Portion of the 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 Allocated Portion of the Series.

The Fund represents, warrants and agrees that:

the Fund is a statutory trust established pursuant to the laws of State of Delaware;

the Fund is duly registered as an investment company under the 1940 Act;

the execution, delivery and performance of this Agreement are within the Fund’s powers, have been and remain duly authorized by all necessary action (including without limitation all necessary approvals and other actions required under the 1940 Act) and will not violate or constitute a default under any applicable law or regulation or of any decree, order, judgment, agreement or instrument binding on the Fund;

no consent of any applicable governmental authority or body is necessary, except for such consents as have been obtained and are in full force and effect, and all conditions of which have been duly complied with; and

this Agreement constitutes a legal, valid and binding obligation enforceable against the Fund in accordance with its terms.

The Adviser represents, warrants and agrees that:

The Adviser is a corporation duly established, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the failure to so qualify would have a material adverse effect on its business;

Adviser is duly registered as an “investment adviser” under the Advisers Act;

Adviser has been duly appointed by the Trustees and shareholders of the Fund to provide investment services to the Fund as contemplated by the advisory contract;

the execution, delivery and performance of this Agreement are within Adviser’s powers, have been and remain duly authorized by all necessary corporate action and will not violate or constitute a default under any applicable law or regulation or of any decree, order, judgment, agreement or instrument binding on Adviser;

this Agreement constitutes a legal, valid and binding obligation enforceable against Adviser.

14.

to any and all amendments thereto so filed with the Secretary of the State of Delaware and elsewhere as required by law, and to any and all amendments thereto so filed or hereafter filed. The name “Virtus Opportunities 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 for up to 150 days or until a new subadvisory agreement between the Adviser and the Subadviser with respect to the Series is approved by the Fund’s shareholders if necessary at a meeting called for such purpose, whichever is earlier.

17.

Termination . This Agreement may be terminated at any time without payment of any penalty (i) by the Board, or by a vote of a majority of the outstanding voting securities of the Fund (as defined in the Act), upon 30 days’ prior written notice to the Adviser and the Subadviser, (ii) by the Subadviser upon 30 days’ prior written notice to the Adviser and the Fund, or (iii) by the Adviser upon 30 days’ written notice to the Subadviser. This Agreement may also be terminated, without the payment of any penalty, by the Adviser or the Board immediately upon the material breach by the Subadviser of this Agreement or by the Subadviser immediately upon the material breach by the Adviser of this Agreement. This Agreement shall terminate automatically and immediately upon termination of the Advisory Agreement. This Agreement shall terminate automatically and immediately in the event of its assignment, as such term is defined in and interpreted under the terms of the Act and the rules promulgated thereunder. Provisions of this Agreement relating to indemnification shall survive any termination of this Agreement.

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 State of Delaware.

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:

Duff & Phelps Investment Management Co.

200 S. Wacker Drive, Suite 500

Chicago, IL 60606

Attn: Joyce Riegel, Chief Compliance Officer

Telephone: (312) 917-6541

Facsimile: (312) 876-1057

Email: Joyce.Riegel@dpimc.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 6 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.

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.

Relationship of Parties . By virtue of this Agreement, the Adviser, the Fund and Subadviser are not partners or joint venturers with each other and nothing in this Agreement shall be construed so as to make them partners or joint venturers or impose any liability as such on either of them. Subadviser shall perform its duties under this Agreement as an independent contractor and not as an agent of the Fund, the Trustees or the Adviser.

24.

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.

25.

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 OPPORTUNITIES TRUST

	By:	/s/ W. Patrick Bradley
		Name: W. Patrick Bradley
		Title: Executive Vice President, Chief Financial Officer & Treasurer

	VIRTUS INVESTMENT ADVISERS, INC.

	By:	/s/ Francis G. Waltman
		Name: Francis G. Waltman
		Title: Executive Vice President

ACCEPTED:

DUFF & PHELPS INVESTMENT MANAGEMENT CO.

By:	/s/ Nathan Partain
	Name: Nathan Partain
	Title: President and CIO

SCHEDULES:	A.	Operational Procedures
	B.	Record Keeping Requirements
	C.	Fee Schedule
	D.	Subadviser Functions
	E.	Form of Sub-Certification
	F.	Allocated Portion of the Series

SCHEDULE A

OPERATIONAL PROCEDURES

In order to minimize operational problems, it will be necessary for trade information to be supplied in a secure manner by the Subadviser to the Fund’s Service Providers, including: JPMorgan Chase Bank, National Association (the “Custodian”), Virtus Fund Services (the “Fund Administrator”) BNY Mellon Investment Servicing (US) Inc., (the “Sub-Accounting Agent”), any Prime Broker to the Series, and all other Counterparties/Brokers as required. The Subadviser must furnish the Fund’s service providers with required daily information as to executed trades in a format and time-frame agreed to by the Subadviser, Custodian, Fund Administrator, Sub-Accounting Agent and Prime Broker/Counterparties and designated persons of the Fund. Trade information sent to the Custodian, Fund Administrator, Sub-Accounting Agent and Prime Broker/Counterparties must include all necessary data within the required timeframes to allow such parties to perform their obligations to the Series.

The Sub-Accounting Agent specifically requires a daily trade blotter with a summary of all trades, in addition to trade feeds, including, if no trades are executed, a report to that effect. Daily information as to executed trades for same-day settlement and future trades must be sent to the Sub-Accounting Agent no later than 4:30 p.m. (Eastern Time) on the day of the trade each day the Fund is open for business. All other executed trades must be delivered to the Sub-Accounting Agent on Trade Date plus 1 by Noon (Eastern Time) to ensure that they are part of the Series’ NAV calculation. (The Subadviser will be responsible for reimbursement to the Fund for any loss caused by the Subadviser’s failure to comply with the requirements of this Schedule A.) On fiscal quarter ends and calendar quarter ends, all trades must be delivered to the Sub-Accounting Agent by 4:30 p.m. (Eastern Time) for inclusion in the financial statements of the Series. The data to be sent to the Sub-Accounting Agent and/or Fund Administrator will be as agreed by the Subadviser, Fund Administrator, Sub-Accounting Agent and designated persons of the Fund and shall include (without limitation) the following:

1.	Transaction type (e.g., purchase, sale, open, close, put call);
2.	Security type (e.g., equity, fixed income, swap, future, option, short, long);
3.	Security name;
4.	Exchange identifier (e.g., CUSIP, ISIN, Sedol, OCC Symbol) (as applicable);
5.	Number of shares and par, original face, contract amount, notional amount;
6.	Transaction price per share (clean if possible);
7.	Strike price;
8.	Aggregate principal amount;
9.	Executing broker;
10.	Settlement agent;
11.	Trade date;
12.	Settlement date;
13.	Aggregate commission or if a net trade;
14.	Interest purchased or sold from interest bearing security;
15.	Net proceeds of the transaction;
16.	Trade commission reason: best execution, soft dollar or research (to be provided quarterly);
17.	Derivative terms;
18.	Non-deliverable forward classification (to be provided quarterly);
19.	Maturity/expiration date; and
20.	Details of margin and collateral movement.

SCHEDULE B

RECORDS TO BE MAINTAINED BY THE SUBADVISER

(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. ^*

(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.

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 the 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 Duff & Phelps Investment Management Co.
Virtus International Equity Fund		50% of the net advisory fee payable to the adviser

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 assets of the Allocated Portion of the Series, the Subadviser shall provide, at its own expense:

(a)

An investment program for the Allocated Portion of the 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 assets of the Allocated Portion of the Series in accordance with the then prevailing Prospectus and Statement of Additional Information pertaining to the 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 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 Series’ investment program, including, without limitation, analysis of Allocated Portion of the 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 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 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 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 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 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 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 Series and the Policies and Procedures of the Series as adopted by the 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 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 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 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 Series official accounting system. The Subadviser is not responsible for the preparation of the Report.


[Name of Subadviser]		Date
[Name of Authorized Signer]
[Title of Authorized Signer]

SCHEDULE F

SERIES

Virtus International Equity Fund

Exhibit d.10

VIRTUS OPPORTUNITIES TRUST

VIRTUS EMERGING MARKETS EQUITY INCOME FUND

VIRTUS ESSENTIAL RESOURCES FUND

INTERIM SUBADVISORY AGREEMENT

January 13, 2016

Kleinwort Benson Investors International, Ltd.

3rd Floor, 2 Harbourmaster Place, IFSC

Dublin 1, Ireland

RE:

Interim Subadvisory Agreement

Ladies and Gentlemen:

Virtus Opportunities 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 Virtus Emerging Markets Equity Income Fund and Virtus Essential Resources 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 Kleinwort Benson Investors International Ltd. (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.

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.

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 .

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.

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.

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.

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.

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.

13.

Representations, Warranties and Agreements

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”).

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.

The Fund represents, warrants and agrees that:

the Fund is a statutory trust established pursuant to the laws of State of Delaware;

the Fund is duly registered as an investment company under the 1940 Act;

this Agreement constitutes a legal, valid and binding obligation enforceable against the Fund in accordance with its terms.

The Adviser represents, warrants and agrees that:

Adviser is duly registered as an “investment adviser” under the Advisers Act;

Adviser has been duly appointed by the Trustees and shareholders of the Fund to provide investment services to the Fund as contemplated by the advisory contract;

this Agreement constitutes a legal, valid and binding obligation enforceable against Adviser.

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 State of Delaware and elsewhere as required by law, and to any and all amendments thereto so filed with the Secretary of the State of Delaware and elsewhere as required by law, and to any and all amendments thereto so filed or hereafter filed. The name “Virtus Opportunities 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 for up to 150 days or until a new subadvisory agreement between the Adviser and the Subadviser with respect to the Series is approved by the Fund’s shareholders at a meeting called for such purpose, whichever is earlier.

17.

18.

19.

20.

(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:

Kleinwort Benson Investors International Ltd.

One Boston Place

201 Washington Street

Boston, MA 02108

Attn: Geoff Blake, Director – Head of Business Development

Telephone: 1 617 621 7140

Cell Phone: +1 917 455 5215

E-mail: Geoff.Blake@KBInvestors.US

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.

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.

partners or joint venturers or impose any liability as such on either of them. Subadviser shall perform its duties under this Agreement as an independent contractor and not as an agent of the Fund, the Trustees or the Adviser.

24.

25.

[signature page follows]

VIRTUS OPPORTUNITIES 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:

KLEINWORT BENSON INVESTORS INTERNATIONAL LTD.

By:	/s/ Derval Murray
	Name:	Derval Murray
	Title:	Chief Compliance Officer

By:	/s/ Geoff Blake
	Name:	Geoff Blake
	Title:	Director

SCHEDULES:

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

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.

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 show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.

Records as necessary under Board approved Virtus Mutual Funds policies and procedures, including without limitation those related to valuation determinations.

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 Kleinwort Benson Investors International Ltd.
Virtus Essential Resources Fund		50% of the net advisory fee payable to the adviser
Virtus Emerging Markets Equity Income Fund		50% of the net advisory fee payable to the adviser

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)

(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].

Schedule of Investments

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.

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:

I certify that to the best of my knowledge:

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.

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]		Date
[Name of Authorized Signer]
[Title of Authorized Signer]

SCHEDULE F

DESIGNATED SERIES

Virtus Essential Resources Fund

Virtus Emerging Markets Equity Income Fund

Exhibit d.11

VIRTUS OPPORTUNITIES TRUST

VIRTUS EMERGING MARKETS EQUITY INCOME FUND

VIRTUS ESSENTIAL RESOURCES FUND

SUBADVISORY AGREEMENT

May 26, 2016

Kleinwort Benson Investors International, Ltd.

3rd Floor, 2 Harbourmaster Place, IFSC

Dublin 1, Ireland

RE:

Subadvisory Agreement

Ladies and Gentlemen:

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.

Proxies .

Information and Reports .

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.

13.

Representations, Warranties and Agreements

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”).

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.

The Fund represents, warrants and agrees that:

the Fund is a statutory trust established pursuant to the laws of State of Delaware;

the Fund is duly registered as an investment company under the 1940 Act;

this Agreement constitutes a legal, valid and binding obligation enforceable against the Fund in accordance with its terms.

The Adviser represents, warrants and agrees that:

Adviser is duly registered as an “investment adviser” under the Advisers Act;

Adviser has been duly appointed by the Trustees and shareholders of the Fund to provide investment services to the Fund as contemplated by the advisory contract;

this Agreement constitutes a legal, valid and binding obligation enforceable against Adviser.

14.

15.

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, 2017. 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.

18.

19.

20.

(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:

Kleinwort Benson Investors International Ltd.

One Boston Place

201 Washington Street

Boston, MA 02108

Attn: Geoff Blake, Director – Head of Business Development

Telephone: 1 617 621 7140

Cell Phone: +1 917 455 5215

E-mail: Geoff.Blake@KBInvestors.US

21.

22.

No party will be liable to another party for consequential damages under any provision of this Agreement.

23.

24.

25.

[signature page follows]

	VIRTUS OPPORTUNITIES 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:

KLEINWORT BENSON INVESTORS INTERNATIONAL LTD.

By:	/s/ Geoff Blake
	Name: Geoff Blake
	Title: Director

By:	/s/ Derval Murray
	Name: Derval Murray
	Title: Chief Compliance Officer

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

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.

SCHEDULE B

RECORDS TO BE MAINTAINED BY THE SUBADVISER

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.

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 show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.

Records as necessary under Board approved Virtus Mutual Funds policies and procedures, including without limitation those related to valuation determinations.

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 Kleinwort Benson Investors International Ltd.
Virtus Essential Resources Fund		50% of the net advisory fee payable to the adviser
Virtus Emerging Markets Equity Income Fund		50% of the net advisory fee payable to the adviser

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)

(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)

(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].

Schedule of Investments

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.

I have disclosed, based on my most recent evaluation, to the Designated Series’ Chief Accounting Officer:

I certify that to the best of my knowledge:

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.

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.


[Name of Subadviser]		Date
[Name of Authorized Signer]
[Title of Authorized Signer]

SCHEDULE F

DESIGNATED SERIES

Virtus Essential Resources Fund

Virtus Emerging Markets Equity Income Fund

Exhibit d.12

VIRTUS OPPORTUNITIES TRUST

VIRTUS EMERGING MARKETS EQUITY INCOME FUND

VIRTUS ESSENTIAL RESOURCES FUND

SUBADVISORY AGREEMENT

August 31, 2016

KBI Global Investors (North America) Ltd.

3rd Floor, 2 Harbourmaster Place, IFSC

Dublin 1, Ireland

RE:

Subadvisory Agreement

Ladies and Gentlemen:

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 KBI Global Investors (North America) Ltd. (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.

Proxies .

Information and Reports .

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.

13.

Representations, Warranties and Agreements

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”).

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.

The Fund represents, warrants and agrees that:

the Fund is a statutory trust established pursuant to the laws of State of Delaware;

the Fund is duly registered as an investment company under the 1940 Act;

this Agreement constitutes a legal, valid and binding obligation enforceable against the Fund in accordance with its terms.

The Adviser represents, warrants and agrees that:

Adviser is duly registered as an “investment adviser” under the Advisers Act;

Adviser has been duly appointed by the Trustees and shareholders of the Fund to provide investment services to the Fund as contemplated by the advisory contract;

this Agreement constitutes a legal, valid and binding obligation enforceable against Adviser.

14.

15.

16.

17.

18.

19.

20.

(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:

KBI Global Investors (North America) Ltd.

One Boston Place

201 Washington Street

Boston, MA 02108

Attn: Geoff Blake, Director – Head of Business Development

Telephone: 1 617 621 7140

Cell Phone: +1 917 455 5215

E-mail: Geoff.Blake@KBInvestors.US

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.

No party will be liable to another party for consequential damages under any provision of this Agreement.

23.

24.

25.

[signature page follows]

	VIRTUS OPPORTUNITIES 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:

KBI GLOBAL INVESTORS (NORTH AMERICA) LTD.

By:	/s/ Geoff Blake
	Name: Geoff Blake
	Title: Director

By:	/s/ Derval Murray
	Name: Derval Murray
	Title: Chief Compliance Officer

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

1.	Transaction type (e.g., purchase, sale, open, close, put call);
2.	Security type (e.g., equity, fixed income, swap, future, option, short, long);
3.	Security name;
4.	Exchange identifier (e.g., CUSIP, ISIN, Sedol, OCC Symbol) (as applicable);
5.	Number of shares and par, original face, contract amount, notional amount;
6.	Transaction price per share (clean if possible);
7.	Strike price;
8.	Aggregate principal amount;
9.	Executing broker;
10.	Settlement agent;
11.	Trade date;
12.	Settlement date;
13.	Aggregate commission or if a net trade;
14.	Interest purchased or sold from interest bearing security;
15.	Net proceeds of the transaction;
16.	Trade commission reason: best execution, soft dollar or research (to be provided quarterly);
17.	Derivative terms;
18.	Non-deliverable forward classification (to be provided quarterly);
19.	Maturity/expiration date; and
20.	Details of margin and collateral movement.

SCHEDULE B

RECORDS TO BE MAINTAINED BY THE SUBADVISER

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.

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 show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.

Records as necessary under Board approved Virtus Mutual Funds policies and procedures, including without limitation those related to valuation determinations.

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 Kleinwort Benson Investors International Ltd.
Virtus Essential Resources Fund		50% of the net advisory fee payable to the adviser
Virtus Emerging Markets Equity Income Fund		50% of the net advisory fee payable to the adviser

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)

(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)

(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].

Schedule of Investments

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.

I have disclosed, based on my most recent evaluation, to the Designated Series’ Chief Accounting Officer:

I certify that to the best of my knowledge:

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.

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.


[Name of Subadviser]		Date
[Name of Authorized Signer]
[Title of Authorized Signer]

SCHEDULE F

DESIGNATED SERIES

Virtus Essential Resources Fund

Virtus Emerging Markets Equity Income Fund

Exhibit h.5

TWENTY-FIFTH AMENDED AND RESTATED

EXPENSE LIMITATION AGREEMENT

VIRTUS OPPORTUNITIES TRUST

This Twenty-Fifth Amended and Restated Expense Limitation Agreement (the “Agreement”), effective as of February 8 ^th , 2016, amends and restates that certain Amended & Restated Expense Limitation Agreement effective as of September 1, 2015, by and between Virtus Opportunities Trust, a Delaware statutory trust (the “Registrant”), on behalf of each series of the Registrant listed in Appendix A (each a “Fund” and collectively, the “Funds”) and the Adviser of each of the Funds, Virtus Investment Advisers, Inc., a Massachusetts corporation (the “Adviser”).

WHEREAS, the Adviser renders advice and services to the Funds pursuant to the terms and provisions of one or more Investment Advisory Agreements entered into between the Registrant and the Adviser (the “Advisory Agreement”);

WHEREAS, the Adviser desires to maintain the expenses of each Fund at a level below the level to which each such Fund might otherwise be subject; and

WHEREAS, the Adviser understands and intends that the Registrant will rely on this Agreement in accruing the expenses of the Registrant for purposes of calculating net asset value and for other purposes, and expressly permits the Registrant to do so.

NOW, THEREFORE, the parties hereto agree as follows:

Limit on Fund Expenses. The Adviser has agreed to limit the respective rate of Total Fund Operating Expenses or Other Expenses (“Expense Limit”) for each Fund as specified in Appendix A of this Agreement, for the time period indicated.

Definitions.

2.1.

For purposes of this Agreement, the term “Total Fund Operating Expenses” with respect to a Fund is defined to include all expenses necessary or appropriate for the operation of the Fund including the Adviser’s investment advisory or management fee under the Advisory Agreement and other expenses described in the Advisory Agreement that the Fund is responsible for and have not been assumed by the Adviser, but excludes front-end or contingent deferred loads, taxes, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, extraordinary expenses (such as litigation) or acquired fund fees and expenses and for Virtus Senior Floating Rate Fund also does not include leverage expenses, if any.

Recoupment and Recapture of Fees and Expenses. Each Fund has agreed to reimburse the Adviser and/or certain of its affiliates (collectively, “Virtus”) out of assets belonging to the relevant class of the Fund for any Total Fund Operating Expenses or Other Expenses, as the case may be, of the relevant class of the Fund in excess of the Expense Limit paid, waived or assumed by Virtus for that Fund, provided that Virtus would not be entitled to reimbursement for any amount that would cause the applicable Expense Limit to be exceeded or, if the Expense Limit has been removed, then the previous Expense Limit, at the time that the reimbursement would be made, and provided further that no amount would be reimbursed by the Fund more than three years after the fiscal year in which it was incurred or waived by Virtus.

Term, Termination and Modification. This Agreement is effective for the time period indicated on Appendix A, unless sooner terminated as provided below in this Paragraph. Subsequent to the initial

term indicated on Appendix A, the amount of the Expense Limit and term applicable to each Fund shall be as disclosed in the then current prospectus of that Fund. This Agreement shall remain in effect with respect to each Fund subject to a Voluntary Expense Limitation until such time as specified in a notice of its termination provided by one party to the other party which, for the avoidance of doubt, may be provided verbally or in writing. This Agreement also may be terminated by the Registrant on behalf of any one or more of the Funds at any time without payment of any penalty or by the Board of Trustees of the Registrant upon thirty (30) days’ written notice to the Adviser. In addition, this Agreement shall terminate with respect to a Fund upon termination of the Advisory Agreement with respect to such Fund.

Assignment. This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party.

Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall otherwise be rendered invalid, the remainder of this Agreement shall not be affected thereby.

Captions. The captions in this Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of Delaware without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any Federal securities law, regulation or rule, including the Investment Company Act of 1940, as amended and the Investment Advisers Act of 1940, as amended and any rules and regulations promulgated thereunder.

Computation. If the fiscal year-to-date Total Fund Operating Expenses of a Fund or Other Expenses, as applicable, at the end of any month during which this Agreement is in effect exceed the Expense Limit for that Fund (the “Excess Amount”), the Adviser shall (at its option) waive or reduce its fee under the Advisory Agreement and/or remit to that Fund an amount that is sufficient to pay the Excess Amount computed on the last day of the month.

10.

Liability. Virtus agrees that it shall look only to the assets of the relevant class of each respective relevant Fund for performance of this Agreement and for payment of any claim Virtus may have hereunder, and neither any other Fund (including the other series of the Registrant) or class of the Fund, nor any of the Registrant’s trustees, officers, employees, agents or shareholders, whether past, present or future, shall be personally liable therefor.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers.

VIRTUS OPPORTUNITIES TRUST		VIRTUS INVESTMENT ADVISERS, INC.

By:	/s/ W. Patrick Bradley	By:	/s/ Francis G. Waltman
	W. Patrick Bradley		Francis G. Waltman
	Senior Vice President, Chief Financial Officer and Treasurer		Executive Vice President

APPENDIX A

Contractual Expense Limitations*

Virtus Mutual Fund	Total Fund Operating Expense Limit													Term
		Class A		Class B		Class C		Class I		Class R6		Class T

Virtus Bond Fund		0.85	%	1.60	%	1.60	%	0.60	%	—		—			September 1, 2015 – January 31, 2017
Virtus CA Tax Exempt Bond Fund		0.85	%	—		—		0.60	%	—		—			September 1, 2015 – January 31, 2017
Virtus Emerging Markets Debt Fund		1.35	%	—		2.10	%	1.10	%	—		—			September 1, 2015 – January 31, 2017
Virtus Emerging Markets Equity Income Fund		1.75	%	—		2.50	%	1.50	%	—		—			September 1, 2015 – January 31, 2017
Virtus Emerging Markets Small-Cap Fund		1.85	%	—		2.60	%	1.60	%	—		—			September 1, 2015 – January 31, 2017
Virtus Equity Trend Fund		1.42	%	—		2.02	%	1.24	%	1.03	%	—			February 8, 2016 – January 31, 2017
Virtus Essential Resources Fund		1.65	%	—		2.40	%	1.40	%	—		—			March 19, 2015 – January 31, 2017
Virtus Global Equity Trend Fund		1.75	%	—		2.50	%	1.50	%	—		—			September 1, 2015 – January 31, 2017
Virtus Global Opportunities Fund		1.55	%	2.30	%	2.30	%	1.30	%	—		—			September 1, 2015 – January 31, 2017
Virtus Global Real Estate Securities Fund		1.40	%	—		2.15	%	1.15	%	—		—			September 1, 2015 – January 31, 2017
Virtus Greater European Opportunities Fund		1.45	%	—		2.20	%	1.20	%	—		—			September 1, 2015 – January 31, 2017
Virtus Herzfeld Fund		1.60	%	—		2.35	%	1.35	%	—		—			September 1, 2015 – January 31, 2017
Virtus High Yield Fund		1.15	%	1.90	%	1.90	%	0.90	%	—		—			September 1, 2015 – January 31, 2017
Virtus International Equity Fund		1.50	%	—		2.25	%	1.25	%	—		—			September 1, 2015 – January 31, 2017
Virtus International Real Estate Securities Fund		1.50	%	—		2.25	%	1.25	%	—		—			September 1, 2015 – January 31, 2017
Virtus International Small- Cap Fund		1.60	%	—		2.35	%	1.35	%	1.26	%	—			September 1, 2015 – January 31, 2017
Virtus International Wealth Masters Fund		1.55	%	—		2.30	%	1.30	%	—		—			November 17, 2014 – January 31, 2017
Virtus Low Volatility Equity Fund		1.55	%	—		2.30	%	1.30	%	—		—			September 1, 2015 – January 31, 2017
Virtus Multi-Asset Trend Fund		1.75	%	—		2.50	%	1.50	%	—		—			September 1, 2015 – January 31, 2017
Virtus Multi-Sector Short Term Bond Fund		1.10	%	1.60	%	1.35	%	0.85	%	—		1.85	%		September 1, 2015 – January 31, 2017
Virtus Senior Floating Rate Fund ¹		1.20	%	—		1.95	%	0.95	%	—		—			September 1, 2015 – January 31, 2017
Virtus Wealth Masters Fund		1.45	%	—		2.20	%	1.20	%	—		—			September 1, 2015 – January 31, 2017

¹ Excludes leverage expenses, if any.

Voluntary Expense Limitations**

Virtus Mutual Fund

Total Fund Operating Expense Limit

Effective Date

Class

N/A

*Following the contractual period, VIA may discontinue these arrangements at any time. Under certain conditions, the adviser may recapture operating expenses reimbursed under these arrangements for a period of three years following the fiscal year in which such reimbursement occurred.

** Voluntary expense limitations are terminable at any time upon notice.

Exhibit i.4

100 Pearl Street

Hartford, CT 06103

800.248.7971

VIRTUS.COM

September 23, 2016

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Re:		Virtus Opportunities Trust (the “Trust)
		Post-Effective Amendment No. 88
		to Registration Statement 033-65137

Ladies and Gentlemen:

This opinion is furnished in connection with the registration under the Securities Act of 1933, as amended, of shares (the “Shares”) of the above-referenced Trust. In rendering this opinion, I have examined such documents, records and matters of law as deemed necessary for purposes of this opinion. I have assumed the genuineness of all signatures of all parties, the authenticity of all documents submitted as originals, the correctness of all copies and the correctness of all written or oral statements made to me.

Based upon and subject to the foregoing, it is my opinion that the Shares that will be issued by the Trust when sold will be legally issued, fully paid and non-assessable.

My opinion is rendered solely in connection with the Registration Statement on Form N1-A under which the Shares will be registered and may not be relied upon for any other purpose without my written consent. I hereby consent to the use of this opinion as an exhibit to such Registration Statement.

Very truly yours,

/s/ Kevin J. Carr

Kevin J. Carr

Senior Vice President, Chief Legal Officer, Counsel and Secretary

Virtus Mutual Funds

Securities distributed by VP Distributors, LLC

Exhibit i.5

CONSENT OF SULLIVAN & WORCESTER LLP

We hereby consent to the use of our name and any reference to our firm in the Statement of Additional Information of Virtus Opportunities Trust (the “Trust”), included as part of Post-Effective Amendment No. 88 to the Trust’s Registration Statement on Form N-1A (File No. 033-65137). In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.

/s/ Sullivan & Worcester LLP

Sullivan & Worcester LLP

Washington, DC

September 23, 2016

Exhibit j.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 reports dated November 20, 2015, relating to the financial statements and financial highlights which appear in the September 30, 2015 Annual Report to Shareholders of Virtus Opportunities Trust and our report dated February 18, 2016, relating to the financial statements and financial highlights which appear in the December 31, 2015 Annual Report to Shareholders of Virtus Emerging Markets Opportunities Fund, Virtus Low Duration Income Fund and Virtus Tax-Exempt Bond Fund and , which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Highlights”, “Glossary”, “Independent Registered Public Accounting Firm” and "Financial Statements" in such Registration Statement.

/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 23, 2016

Exhibit p.1

CODE OF ETHICS

Each Fund ¹ has adopted this Code of Ethics pursuant to Rule 17j-1 of the Investment Company Act of 1940 (the “1940 Act”) and it applies to a Fund’s Access Persons. Individuals that may meet the definition of Access Person below may not be required to comply with this particular Code of Ethics if such individuals are subject to another code of ethics that satisfies Rule 17j-1 of the 1940 Act. For example, the Fund’s investment advisers and service providers that are subsidiaries of Virtus Investment Partners, Inc. (“Virtus”) and affiliates of one another have adopted separate codes of ethics (the “Affiliate Codes”) that are substantially similar to this Code of Ethics, satisfy Rule 17j-1 and apply to individuals who would otherwise be covered by this Code of Ethics. In addition, the Fund’s subadvisers, if any, that are not Virtus affiliates have adopted their own codes of ethics.

This Code of Ethics is administered by the Virtus Compliance Department on behalf of the Funds together with the Affiliate Codes.

Standard of Business Conduct

The Fund acknowledges the integrity and good faith of all of the employees, officers, trustees or directors of the Fund and of those entities providing services on behalf of the Fund. The Fund recognizes, however, 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 the interests of the Fund if they were to trade in securities eligible for investment by the Fund.

In view of the foregoing and of the provisions of Rule 17j-1 under the 1940 Act, the Fund has adopted this Code of Ethics to specify and prohibit certain types of transactions deemed to create conflicts of interest (or at least the potential for or the appearance of such conflicts) and to establish related reporting requirements and enforcement procedures.

When persons covered by the terms of this Code of Ethics engage in personal securities transactions, they must adhere to the following general principles as well as to the Code’s specific provisions:

(a)

At all times, the interests of Fund shareholders must be paramount;

(b)

Personal transactions must be conducted consistent with this Code of Ethics in a manner that avoids or mitigates any actual or potential conflict of interest;

¹ Registered Investment Companies (“Funds”) include ETFis Series Trust I, Virtus ETF Trust II, Virtus Alternative Solutions Trust, Virtus Equity Trust, Virtus Insight Trust, Virtus Opportunities Trust, Virtus Retirement Trust, Virtus Global Multi-Sector Income Fund, Virtus Total Return Fund, Virtus Variable Insurance Trust, Duff & Phelps Select Energy MLP Fund, Inc., The Zweig Fund, Inc., and The Zweig Total Return Fund, Inc.

2016.8

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(c)

No inappropriate advantage should be taken of any position of trust or responsibility;

(d)

Non-public information regarding security holdings in any Fund must remain confidential;

(e)

Compliance with all applicable federal securities laws must be maintained; and

(f)

Access Persons are required to adhere to the standards of business conduct in the Virtus Code of Conduct.

Definitions of Terms Used in this Code

“Access Person” of a Fund means any Advisory Person of a Fund. In addition, all of the Fund’s directors, officers, and general partners are presumed to be Access Persons of the Fund. Access Persons also includes any director, officer or general partner of ETF Distributors LLC, VP Distributors, LLC and Virtus Fund Services, LLC who, in the ordinary course of business, makes, participates in or obtains information regarding the purchase or sale of Covered Securities by the Fund for which ETF Distributors, VP Distributors or Virtus Fund Services acts as service provider, distributor or principal underwriter, or whose functions or duties in the ordinary course of business relate to the making of any recommendation to the Fund regarding the purchase or sale of Covered Securities.

“Advisory Person” of a Fund means:

(a)

Any director, officer, general partner or employee of the Fund or its investment adviser (or of any company in a control relationship to the Fund or its investment adviser) who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding, the purchase or sale of Covered Securities by a Fund, or whose functions relate to the making of any recommendations with respect to such purchases or sales;

(b)

Any natural person in a control relationship to the Fund or its investment adviser who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of Covered Securities by the Fund; and

(c)

Any Investment Personnel.

“Affiliated Open-End Mutual Fund” means any open-end mutual fund as to which a Virtus affiliate serves as the investment adviser or principal underwriter.

“Affiliated person” of another person means (A) any person directly or indirectly owning, controlling, or holding with power to vote, 5 per centum or more of the outstanding voting securities of such other person; (B) any person 5 per centum or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other

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person; (C) any person directly or indirectly controlling, controlled by, or under common control with, such other person; (D) any officer, director, partner, copartner, or employee of such other person; (E) if such other person is an investment company, any investment adviser thereof or any member of an advisory board thereof; and (F) if such other person is an unincorporated investment company not having a board of directors, the depositor thereof.

“Being considered for Purchase or Sale” means 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) in determining whether a person is the beneficial owner of a security for purposes of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations there under. Generally, Beneficial Ownership means having or sharing, directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, a direct or indirect “pecuniary interest” in the security. For the purposes hereof,

(a)

“Pecuniary interest” means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security.

(b)

“Indirect pecuniary interest” includes, but is not limited to:

(i) securities held by members of the person’s “immediate family” (this means any child, child-in-law, stepchild, grandchild, parent, parent-in-law, stepparent, grandparent, spouse, partner, sibling, or sibling-in-law and includes adoptive relationships) sharing the same household (which ownership interest may be rebutted);

(ii) a general partner’s proportionate interest in portfolio securities held by a general or limited partnership;

(iii) 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);

(iv) a person’s interest in securities held by a trust;

(v) a person’s right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable; and

(vi) 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).

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“Crowdfunding Offering” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(6).

“Chief Compliance Officer” or “CCO” refers to the person appointed by the Boards of the Funds pursuant to the provisions of Rule 38a-1.

“Control” shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

“Covered Security” means a security as defined in Section 2(a)(36) of the 1940 Act, except securities that are direct obligations of the Government of the United States, bankers’ acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements and shares of traditional, unaffiliated registered open-end investment companies.

“Disinterested Trustee or Director” means a Member of the Board of Trustees or Board of Directors of a Fund who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.

“Immediate Family Member” any Access Person’s spouse or domestic partner who shares the same household and any relative by blood, adoption or marriage living in the 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 Personnel” shall mean:

(a)

any employee of the Fund or its adviser (or of any company in a control relationship to the Fund or its adviser) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund; and

(b)

any natural person who controls the Fund or its adviser and who obtains information concerning recommendations made to the Fund regarding the purchase or sale of securities by the Fund. Investment Personnel includes any Portfolio Manager or other investment person, such as an analyst or trader, who provides information and advice to a Portfolio Manager or assists in the execution of the investment decisions.

“Limited Offering” or “Private Placement” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) or Section 4(a)(5), or pursuant to Rule 504, Rule 505, or Rule 506 thereunder.

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“Managed Portfolio” shall mean those Funds, individually and collectively, for which the Portfolio Manager makes buy and sell decisions. For those Funds operating as series companies, Managed Portfolio shall include only the series for which the Portfolio Manager serves as the Portfolio Manager.

“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, through 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 (“IRA’s”) 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 Unaffiliated Open-end Mutual Funds; other accounts that cannot transact in Reportable Securities as determined by the Virtus Compliance Department; direct purchase accounts such as “DRIP” plans and Section 529 Plans that are not managed, distributed marketed or underwritten by a Virtus affiliate.

“Portfolio Manager” means the person or portfolio management team entrusted to make or participate in the making of the buy and sell decisions for a Fund, or series thereof; as disclosed in the Fund(s) prospectus.

“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.

“Reportable Security” means a security as defined in Section 2(a)(36) of the 1940 Act and includes: common stocks, preferred stocks, stock options (put, call and straddles, etc.), debt securities, privileges 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, stock indices vehicles (such as the Standard & Poor’s Composite Stock Indices, SPDR S&P 500, SPDR S&P MidCap 400, “iShares”, etc.); Affiliated Open-end Mutual Funds and municipal securities.

“Reportable Security” does not include 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; shares of Unaffiliated Open-end Mutual Funds; and units of a unit investment trust if the unit investment trust is invested exclusively in Unaffiliated Open-end Mutual Funds. Note:

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This exception extends only to open-end funds registered in the U.S.; therefore, transactions and holdings in offshore funds are reportable.

“Security Held or to be Acquired” by a Fund means:

(i)

any Covered Security which, within the most recent 15 days:

(A)

is or has been held by the Fund; or

(B)

is being or has been considered by the Fund or any of its investment advisers for purchase by the Fund; and

(ii)

any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security.

“Unaffiliated Open-End Mutual Fund” means any open-end mutual fund as to which a Virtus affiliate does not serve as the investment adviser or principal underwriter for the fund.

Unlawful Actions

It is unlawful for any Affiliated person of any Fund or any of its advisers, in connection with the purchase or sale, directly or indirectly, by the person of a Security Held or to be Acquired by any Fund:

(a)

to employ any device, scheme or artifice to defraud any Fund;

(b)

to make any untrue statement of a material fact to any Fund or omit to state a material fact necessary in order to make the statements made to any Fund, in light of the circumstances under which they are made, not misleading;

(c)

to engage in any act, practice or course of business that operates or would operate as a fraud or deceit on any Fund;

(d)

to engage in any manipulative practice with respect to any Fund; or

(e)

to divulge or act upon any material, non-public information, as such term is defined under relevant securities laws.

Disclosure of Personal Brokerage Accounts

All Access Persons must disclose their Personal Brokerage Accounts to their respective Compliance Department. It is each Access Person’s responsibility 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 do not need to disclose the existence of their Virtus-Fidelity 401(k) account, however, any other Virtus Fidelity account holding securities,

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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.

Prohibited Activities and Restrictions

Initial Public Offering (“IPO”) Rule : No Access Person may directly or indirectly acquire beneficial ownership in any securities in an Initial Public Offering (including IPOs offered through the Internet), except with the prior written approval of the Virtus Compliance Department. No FINRA registered person may participate in an IPO pursuant to FINRA Rule 5130.

Crowdfunding Offering/Limited Offering/Private Placement Rule : No Access Person may directly or indirectly acquire beneficial ownership in any securities in a Crowdfunding Offering, Limited Offering or Private Placement except with the prior written approval of the Virtus Compliance Department.

Preclearance Rule : No Advisory Person may directly or indirectly acquire or dispose of beneficial ownership in a Reportable Security unless such transaction has been precleared by the Virtus Compliance Department. Preclearance is valid through the next business day to the close of the U.S. Market following the approval. An order not executed within that time must be resubmitted for pre-clearance approval. Advisory Persons must wait for approval before placing the order with their broker.

Exceptions : The following transactions do not require preclearance:

(a)

Purchases or sales of up to and including 500 shares per month of Reportable Securities of an issuer ranked in the Standard & Poor’s 500 Composite Stock Index (S&P 500) at the time of the transaction. An S&P 500 constituent list is updated quarterly and available on the Virtus intranet website. A copy is also available for review in the Compliance Department.

(b)

Affiliated Open-end Mutual Funds. (However such funds are subject to Quarterly Transaction and Annual Holdings reporting requirements.)

(c)

Purchases or sales which are non-volitional on the part of either the Advisory Person or the Fund.

(d)

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.

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(e)

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 plan.

(f)

Purchases or sales effected in any account over which the Advisory Person has no direct or indirect influence or control in the reasonable estimation of the Virtus Compliance Department. This exemption will also apply to Personal Brokerage Accounts for which a third party (e.g. broker or financial adviser) makes all investment decisions on behalf of the Advisory Person. The discretionary arrangement must be documented to the Virtus Compliance Department.

(g)

Purchases or sales of Reportable Securities not eligible for purchase or sale by the Fund(s).

(h)

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.

(i)

Purchase or sale of securities issued under an employee stock purchase or incentive program unless otherwise restricted.

Open Order Rule : No Advisory Person may directly or indirectly acquire or dispose of Beneficial Ownership in any Reportable Security which requires preclearance on a day during which a Fund has a pending order for that security of the same type (i.e.. buy or sell) as the proposed personal trade, until the Fund’s order is executed or withdrawn.

Black-Out Rule : Investment Personnel 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 Investment Personnel’s assigned duties trades in that security. The seven day period is exclusive of the execution date. The Black-Out Rule applies to transactions in securities that are required to be precleared.

Holding Period Rule : Except as provided herein, Advisory Persons must hold all Reportable Securities, including options, for no less than sixty (60) days, regardless of whether or not the purchase was exempt from preclearance under this Code. Generally, a first in, first out (“FIFO”) accounting methodology will be applied for determining compliance with this holding rule.

This Holding Period Rule does not apply to the following Reportable Securities and transactions:

Affiliated Open-End Mutual Funds;

Sales of Virtus shares after restricted stock units vest;

Sales of Virtus shares after exercising employee stock options; or

Sales effected in any account over which the Advisory Person has no direct or indirect influence or control.

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Gifts and Entertainment : Access Persons may not give or receive gifts or entertainment that may be construed to have an influence on business transactions conducted by the Fund(s) or its investment adviser. Moreover, pursuant to Section 17(e) of the 1940 Act, gifts and entertainment may not be received by fund advisory personnel as compensation for the purchase or sale of any Fund property.

Gifts include any items of value, including sports paraphernalia or equipment, wine or food baskets, and gift certificates for good or services. Tickets to events are also considered gifts if the provider of such tickets does not attend the event. Gifts to or from any person or entity doing business with or seeking to do business with the Fund(s) or its investment adviser must not exceed $100 per person per year.

Entertainment includes events that are attended by the provider and recipient, and 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.

All gifts and entertainment received or given must be reported to the Virtus Compliance Department.

Service as Director : No Advisory Person shall serve on the board of directors of a publicly traded company without prior authorization by the President or the Chief Compliance Officer of the Fund. If board service is authorized, such Advisory Person shall have no role in making investment decisions with respect to the publicly traded company.

Excessive Trading Rule: Access Persons shall comply with any mutual funds disruptive trading or market timing policies.

Reporting Requirements

The Code of Ethics, and any amendments thereto, shall be provided to every Access Person. Access Persons will provide written acknowledgement of receipt.

Duplicate Trade Confirmations and Personal Brokerage Account Statements : All Access Persons (other than Disinterested Trustees or Directors) 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 Reportable Securities trade in a Personal Brokerage Account, and a copy, at least quarterly, of an account statement for each Personal Brokerage Account to the Virtus 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 Transaction Reports : Access Persons shall report to the Fund the information (specified further below) with respect to transactions in any Reportable Security in which such Access Person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Reportable Security.

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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 Virtus Compliance Department which may make reasonable periodic inquiries and request reasonable assurances in making such determination.

Every Quarterly Transaction Report shall be made not 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 such information as the Virtus Compliance Department may request and shall be reported in such manner (e.g., utilizing an on-line service) as the Virtus Compliance Department directs.

Initial and Annual Holdings Reports : Each Access Person shall submit an Initial Holdings and Annual Holdings Report listing all personal Reportable Securities holdings to the Virtus Compliance Department, upon commencement of service and annually thereafter (the Initial Holdings Report and the Annual Holdings Report , respectively) in the form and content requested by the Virtus Compliance Department. 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 the designated Compliance Officer no later than 10 days after becoming an Access Person. The Annual Holdings Report information shall be as of December 31 of the prior year. Access Persons shall submit the Annual Holdings Report and Certification to the designated Compliance Officer 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.

Disinterested Trustees and Directors

A Disinterested Trustee or Director of the Fund who would be considered an Access Person solely by reason of being a trustee or director of the Fund shall not be subject to the pre-clearance or reporting requirements applicable to Access Persons or the IPO Rule or Limited Offering/Private Placement Rule set forth in this Code of Ethics, except that such Trustee or Director shall report any transaction where the Trustee or Director knew, or, in the ordinary course of fulfilling his or her official duties as a Fund Trustee or Director, should have known, that during the 15-day period immediately before or after the Trustee’s/Director’s transaction in a Covered Security, the Fund purchased or sold the Covered Security or the Fund or any of its investment advisers or subadvisers considered purchasing or selling the Covered Security. Any report made pursuant to the Reporting Requirements of this Code of Ethics may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the security to which the report relates.

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401(k) Plans

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: Advisory 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. Advisory Persons are required to preclear transactions in Reportable Securities that are not exceptions to the Preclearance Rule (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 his or 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 Virtus Compliance Department for each 401(k) account other than the Virtus-Fidelity 401(k) plan.

Quarterly Transactions Reports: For 401(k) accounts other than the Virtus-Fidelity 401(k) plan, 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).

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).

Administration

At least annually, the Fund’s Chief Compliance Officer shall obtain certification that the Fund, each investment adviser and principal underwriter, as applicable, has adopted procedures reasonably necessary to prevent Access Persons from violating this Code of Ethics or another code of ethics that satisfies Rule 17j-1 of the 1940 Act.

Any Access Person shall immediately report any potential violation of this Code of which he or she becomes aware to the Fund CCO or the Virtus Compliance Department

The Virtus Compliance Department will maintain a list of all Access Persons who are required to make reports under this Code of Ethics, and shall inform those Access Persons of their reporting obligations. The Virtus Compliance Department shall promptly notify any Access Person when any report has not been filed on a timely basis.

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Recordkeeping Requirements

Documents and records required to be made and maintained in connection with this Code of Ethics shall be made and maintained in accordance with the Fund’s Policy Regarding Books and Records.

Sanctions

Upon discovering a violation of this Code, the Virtus Compliance Department may impose such sanctions as it deems appropriate, including, among other things, a letter of censure, suspension of personal trading privileges for a period of time, or suspension or termination of employment; and the Virtus Compliance Department shall advise the Fund CCO accordingly.

Exceptions

The Virtus Compliance Department may, in consultation with the Fund’s Chief Legal Officer and/or Fund CCO as appropriate, 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, provided, however, that no exception will be granted where the exceptions would result in a violation of Rule 17j-1. To the extent any such exception relates to an Access Person of a Fund, the exception will be reported to the Fund CCO for reporting to the Fund’s Board at its next regularly scheduled meeting.

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CERTIFICATION:

By my signature below, I certify that I have received, read, and understood the foregoing policies of the Virtus Funds Code of Ethics, and will comply in all respects with such policies.


Signature		Date

Please print or type name:

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Exhibit p.2

CODE OF ETHICS

Amended and Restated June 30, 2016

A message from George Aylward, Chief Executive Officer:

At Virtus Investment Partners, our goal is to be a distinctive and trusted provider of asset management products and services that is profitable, growing and consistently delivers value for our clients and shareholders. In this highly competitive industry we need to distinguish Virtus through our products, our service approach, and our values in managing our company.

Foremost among those values is the expectation I have that each member of the Virtus team adhere to the highest standards of legal and ethical conduct in all of our business dealings.

By demonstrating Virtus is a company that our clients can trust with their assets, a company that our distribution partners respect, and a company that all of our stakeholders think of with admiration, we can accomplish our business goals.

George Aylward

Chief Executive Officer

Virtus Investment Partners, Inc.

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.

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.

Definitions

“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:

Any Clients’ purchase or sale of securities, or recommendation to purchase or sell such securities; or

Information regarding the portfolio holdings of any fund the Firm or its control affiliates manages.

“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) funds managed by Virtus or its affiliates. A chart of such funds is available at Schedule B and on the Virtus Compliance Intranet site. Schedule B may be updated from time to time without being considered an amendment to this Code of Ethics. See also the definition of “Unaffiliated Open-End Mutual Fund” 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:

Securities held by Immediate Family Members sharing the same household;

A general partner’s proportionate interest in portfolio securities held by a general or limited partnership;

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);

A person’s interest in securities held by a trust;

A person’s right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable; and

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” 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”, “Third Party Managed 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 held in custody, and in which a Supervised Person or 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 a Supervised Person or 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 a Supervised Person or 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; Third Party Managed Accounts; other accounts that cannot transact in Reportable Securities as determined by the Compliance Department; and direct purchase accounts such as “DRIP” plans.

“Portfolio Manager” or “Fund 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 and securities offered and sold under “Regulation Crowdfunding” under Section 4(a)(6) of the Securities Act of 1933.

“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”.

“Third Party Managed Account” is an account where the Supervised Person or Access person has no direct or indirect influence or control. A third-party, such as a broker or financial advisor, makes all investment decisions on behalf of the Supervised Person or Access Person and the Supervised Person or Access Person does not discuss any specific transactions for the account with the third-party manager. In particular, the Supervised Person or Access person and any other persons named on the account are not permitted to engage in the following activities:

Suggest or direct that the individual advising the account make any particular purchase or sale of securities.

Consult with the individual advising the account as to the particular allocation of specific securities to be made in the account(s).

“Unaffiliated Open-End Mutual Fund” means any open-end (non-exchange traded) mutual fund not falling within the definition of “Affiliated Open-End Mutual Fund” defined 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.

Disclosure of Personal Brokerage Accounts ¹

All Access Persons must disclose their Personal Brokerage Accounts and Third Party Managed 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

¹ Certain Supervised Persons are subject to the requirements of Section 4. Please see the Appendix following this Code.

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.

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/ Crowdfunding Rule: No Access Person may directly or indirectly acquire beneficial ownership in any securities in a Private Placement, Limited Offering, or Crowdfunding 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 .

Exceptions: The following Reportable Securities transactions do not require preclearance:

Purchases or sales of up to and including 500 shares per calendar month (in total for all of the Access Person’s Personal Brokerage Accounts) 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, including Third Party Managed Accounts.

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 only to transactions in securities that are required to be precleared.

Holding Period Rule: Access Persons must hold all Reportable Securities, (see the definition of “Reportable Security” in Section 3 of this Code of Ethics), for no less than sixty (60) days, whether or not the purchase was an exempt transaction under any other provision of Section 5 except for the following:

Affiliated Open-End Mutual Funds;

Sales of shares of Virtus Investment Partners, Inc. common stock received through vesting of Restricted Stock Units (“RSUs”), grants;

Striking VRTS call options and selling the shares, where such options have been provided as grants; or

Third Party Managed Accounts to which the Holding Period Rule does not apply.

Generally, a first-in first-out (“FIFO”) accounting methodology will be applied for determining compliance with this holding period rule.

Gifts and Entertainment: Supervised Persons may not give or receive gifts or payments that may be construed to have an influence on business transactions conducted by the Firm. Consequently, gifts to or from any person or entity doing business with, or seeking to do business with Virtus or its affiliates, must not exceed $100 per person per year. Gifts include any items of value, including sports paraphernalia or equipment, wine or food baskets and gift certificates for goods or services. Tickets to events are considered gifts if the provider does not attend the event. The $100 limit that applies to gifts does not apply to “entertainment” (when the provider attends the event). 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 promptly reported to the Compliance Department using FTT (or Sales Page for certain designated individuals).

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, Third Party Managed Accounts 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 Securities and Exchange Commission (“SEC”) adopted Rule 206(4)-5 (“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 officials responsible for the hiring of investment advisers, otherwise known as “pay to play” practices. Under the Rule, political contributions made by advisers or their Covered Associates may result in serious limitations on advisers’ ability to receive compensation for the management of certain public funds. The Rule does not prohibit political contributions but prohibits the adviser from receiving compensation from the government plan. The Rule does not preempt state and local pay to play or other laws restricting political contributions which may be more restrictive.

Virtus Pay to Play Policy prohibits political contributions to state or local government officials or candidates by Covered Associates in excess of the contribution limits established by the Rule. This prohibition includes contributions made by a Covered Associate’s spouse or family members living in the same household. The Policy also applies to certain contributions to Political Action Committees (“PACs”) and state and local political parties or committees. All contributions to state and local government officials and candidates, state and local political parties and committees and PACs must be reported in accordance with the Policy. Please refer to Virtus Pay to Play Policy for further information.

Reporting & Compliance Procedures ²

Duplicate Trade Confirmations and Personal Brokerage Account Statements: For all Personal Brokerage Accounts and Third Party Managed Accounts, 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, and a copy, at least quarterly, of an account statement for each account to their respective Compliance Department (an electronic feed from the broker will satisfy these requirements). If the broker does not provide an account statement, then it is the employee’s responsibility to provide pertinent information such as a Quarterly Transaction Report to their respective Compliance Department. 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.

² Certain Supervised Persons are subject to the requirements of Sections 6A, 6B and 6C. Please see the Appendix following this Code.

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 Person’s Quarterly Transaction Reports shall contain the following information:

(i)

All transactions in Reportable Securities effected during the calendar quarter being reported on;

(ii)

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;

(iii)

The type of transaction (i.e., purchase, sale, or any other type of acquisition or disposition);

(iv)

The price of the Reportable Security at which the transaction was effected;

(v)

The name of the broker, dealer or bank with or through whom the transaction was effected; and

(vi)

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, and Third Party Managed Accounts, the above disclosures are considered to have been made for transactions in Reportable Securities occurring in those accounts.

The Firm’s CCO may grant an extension to the 15-day quarterly reporting deadline for cases of hardship, illness, system unavailability or other extenuating circumstances provided that such extension does not exceed the 30-day limit required by Rule 204A-1 of the Investment Advisers Act of 1940, as amended. Such extension will not be considered a waiver of this Code of Ethics.

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. In addition, Access Persons need to disclose any Third Party Managed Accounts in the Initial and Annual Holdings Reports.

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.

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 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.

The Firm shall provide a copy of the Code and any amendments to all Supervised Persons and obtain their written acknowledgement of receipt.

Exceptions to reporting requirements: The Firm’s CCO may predetermine certain accounts are not within the Access Person’s direct or indirect control and provide exemption (in writing) to any and all of the requirements of the Code of Ethics.

401(k) Plans and the Requirements of the Code ³

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.

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.

³ Certain Supervised Persons are subject to the requirements of Sections 7A and 7C – 7E. Please see the Appendix following this Code.

Pay to Play Rule Reporting

Covered Associates shall refer to Virtus Pay to Play Policy for reporting requirements.

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;

As required by enhanced recordkeeping requirements under Rule 204-2 of the Adviser Act, records related to political contributions made by the Firm and its Covered Associates are specified in Virtus Pay to Play Policy.

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 (aka “waivers”) 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. Extensions to reporting deadlines that are not exceptions or waivers are reported only to the Virtus Corporate CCO.

Appendix

Additional requirements for Euclid Advisors LLC, Newfleet Asset Management, LLC, 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 ETFs are considered Reportable Securities and are subject to the applicable rules in Section 5 of this Code of Ethics. 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.

Additional requirement for Access Persons of Cliffwater Investments LLC (“Cliffwater”) are as follows: Preclearance and Holding Period Rule: It is understood that Cliffwater does not as a general practice maintain trading operations for its clients; nor does it complete research, consider or recommend transactions on individual securities. Therefore, as long as this is the case, Cliffwater Access Persons shall not be required to preclear transactions as required by Sections 5.C. and 5.D. Rather, Cliffwater Access Persons will be required to preclear any security that is listed on the Cliffwater Restricted List. The Restricted List shall be maintained in Virtus’s Hartford Compliance Department and circulated to Cliffwater Access Persons whenever there are changes made thereto, or no less than quarterly. Cliffwater Access Persons shall be subject to all other requirements of this Code of Ethics. Furthermore, Section 5.F is modified to reflect that Cliffwater’s Access Persons must hold all Reportable Securities for no less than thirty (30) 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.

Additional requirement for Access and Advisory Persons of Virtus ETF Advisers LLC (“VEA”) are as follows: Preclearance and Holding Period Rule: VEA Access Persons and Advisory Persons will be required to preclear transactions as required by Sections 5.C. and 5.D. VEA will provide Virtus with a “daily data file” that will include current holdings. The “daily data file” will be used to populate the VEA Restricted List. Issuers in addition to those indicated by the “daily data file” may be added to the Restricted List from time-to-time determined to be appropriate by Virtus Compliance. VEA Access and Advisory Persons shall be subject to all other requirements of this Code of Ethics. Furthermore, Section 5.F. shall continue to apply to all purchases such that VEA Access and Advisory 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.

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

Rampart Investment Management Company, LLC

Virtus Alternative Investment Advisers, Inc.

Virtus Investment Advisers, Inc.

VP Distributors, LLC

Zweig Advisers LLC

On January 22, 2014, the following entity adopted this Code of Ethics:

Cliffwater Investments LLC

On April 10, 2015, the following entities adopted this Code of Ethics:

Virtus ETF Advisers LLC and its affiliates (Virtus ETF Solutions LLC and ETF Distributors LLC)

On September 4, 2015, the following entity adopted this Code of Ethics:

Virtus Retirement Investment Advisers, LLC

This Schedule will be updated from time to time without being considered an amendment to the Code of Ethics).

Schedule B

Listing of Affiliated Open-End Mutual Funds

Section 3.E. of the Code of Ethics adopted by Virtus and its affiliates defines an “Affiliated Open-End Mutual Fund” to mean 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) funds managed by Virtus and its affiliates. Such funds are listed below:

Virtus Insight Trust (all funds)

Virtus Equity Trust (all funds)

Virtus Opportunities Trust (all funds)

Virtus Variable Insurance Trust (all funds)

Virtus Retirement Trust aka “Virtus DFA Target Date Retirement Income Funds” (all funds)

Virtus Alternative Solutions Trust (all funds)

Dunham Corporate / Government Bond Fund

Dreyfus Select Managers Small Cap Value Fund

UBS Pace Small Medium Co Value Equity Investment

Dunham Floating Rate Bond Fund

SunAmerica Flexible Credit Fund

This Schedule will be updated from time to time without being considered an amendment to the Code of Ethics).

Exhibit p.3

Vontobel Asset Management, Inc.

CODE OF ETHICS

Updated: November, 2015

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.

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

3.	PRINCIPLES FOR DOING BUSINESS		7
	3.1.	Confidentiality	7
	3.2.	Conflicts of Interest	7
	3.3.	Service as a Director	7
	3.4.	Personal Fiduciary Appointments	8
	3.5.	Service on Civic and Charitable Organizations	8
	3.6.	Fees to Consultants and Agents	8
	3.7.	Personal Benefits	8
	3.8.	Personal Fees and Commissions	9
	3.9.	Dealings with Suppliers	9
	3.10.	Borrowing	9
	3.11.	Political Contributions	10
	3.12.	Political Contributions by Vontobel Employees	10
	3.13.	Duty to Report Violations or Potential Conflicts of Interest	15
	3.14.	Full Disclosure	15

4.	PERSONAL SECURITIES TRANSACTIONS		16
	4.1.	Summary	16
	4.2.	Prohibited and Restricted Transactions	16
	4.3.	Blackout Period	17
	4.4.	Short-Term Trading	18
	4.5.	Prior Written Clearance of Personal Securities Trades and Full Disclosure of Securities Holdings	18

5.	INSIDER TRADING		22
	5.1.	Policy and Policy Statement	22
	5.2.	Elements of Insider Trading	23
	5.3.	Penalties for Insider Trading	24
	5.4.	Procedures	24
	5.5.	Supervision	25

	Appendix A Excerpts from cited SEC legislation		28
	Appendix B Officers authorized to approve trades		38
	Appendix C Security list (included and excluded)		39

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.

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, AG, 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, as amended (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, as amended (“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 amended, 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 Legal and Compliance Department, 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 relevant securities laws and regulations cited above are provided in Appendix A .

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.

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.

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.

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, as amended, 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.

“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

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	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

commodities or commodity futures

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 :

equity 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

options on equity securities

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.

“Restricted Security” shall mean a security (i) being considered for purchase or sale on behalf of a Vontobel Client; (ii) being purchased or sold by a Vontobel Client; or (iii) about which material, non-public information is held.

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.

“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 regular full- and part-time officers and employees, and temporary employees of the Corporation.

“Vontobel Personnel” shall include Vontobel 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.

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.

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.

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 or Other Outside Business Activity

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 or its Clients.

After approval from the Board of Directors is obtained, the CCO or designee shall monitor continually the board or official service of the Vontobel Employee to ensure its on-going consistency with the interests of the Corporation or its Clients. To this end, the Vontobel Employee shall provide to the CCO or designee a certification to that effect no more than 10 business days after the last day of every calendar quarter. The certification shall be submitted via an online compliance platform in the manner described in Section 3.7 below.

In addition, as part of the Semi-Annual Compliance Certification to the Board of Directors, the CCO shall certify that any board or official service of a Vontobel Employee during the period was consistent with the interests of the Corporation or its Clients.

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.

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.

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 Co-Chief Executive Officer or designee 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 Co-Chief Executive Officer or designee.

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 notify the Chief Compliance Officer promptly, or his designee, via an online compliance system.

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

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.

•

Outside Business Activity pre-clearance

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 “Pre-Activity Approval > New” link, the selection 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. 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.

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.

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.

3.12

Political Contributions by Vontobel Employees – “Pay to Play” Policy

PURPOSE

This Policy establishes the procedures through which Vontobel will comply with Rule 206(4)-5 under the Investment Advisers Act of 1940, as amended (“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

•

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

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

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	New York, N.Y.10036	Telefax +1-212-415-70 87

Vontobel Asset Management, Inc.

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 Legal and 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.

All specific questions regarding activities that may be considered an impermissible solicitation under this Policy should be directed to the Legal and 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:

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.

(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

Pre-Approval of Contributions, Coordination and Solicitation of Contributions, and Fundraising

Contributions: All Vontobel Employees are required to obtain approval from the Legal and 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 Legal and 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.

Coordinating or Soliciting Contributions, or Political Fundraising: Also via ETS, all Vontobel Employees must obtain approval from the Legal and Compliance Department prior to Coordinating or Soliciting Contributions, or engaging in any other political fundraising.

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 Legal and Compliance Department.

Examples of Permissible or Potentially Permissible Contributions; Pre-Approval Required

Although all Vontobel Employee Contributions must be pre-approved by the Legal and 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:

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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 Legal and Compliance Department determines that such Contribution will not violate Rule 206(4)-5.

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.

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 Legal and Compliance Department via ETS.

Quarterly Political Contributions Certification Form

At the end of each calendar quarter, Vontobel Employees are required to report and certify to the Legal and Compliance Department via a specially designated web form in ETS their political contributions for the quarter. The Legal and 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.

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 Legal and Compliance Department will review each individual’s prior Contributions before allowing him or her to become a Vontobel Employee.

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 Legal and Compliance Department. Among other things, the Legal and 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

Records Retention

Please note that the Legal and Compliance Department will keep necessary records based on the information gathered under this Policy, in compliance with Rule 204-2. Specifically, the Legal and 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)

4. 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, the General Counsel or the Co-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, outside 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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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 categorized under the definition of Restricted Security; 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.

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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 Co-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.

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.

In the case of a personal securities transaction proposed to be executed within 7 calendar days before a client trade in the same security (the “pre-trade blackout period”), the Trading Desk shall be consulted to determine whether the trade falls within the pre-trade blackout period and whether an exception applies, as described in this section.

In the case of a personal securities transaction proposed to be executed within 7 calendar days after a client trade in the same security (the “post-trade blackout period”), the Trading Desk shall be consulted to determine whether the personal trade falls within the post-trade blackout period and whether an exception applies, as described in this section.

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:

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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(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 (in shares) of any security listed on an exchange and held in a client account (or subsequently purchased for a client’s account). In the instance where a given security or issue trades in multiple markets, the average trading volume will be determined only with respect to that specific security or issue. 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.

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 proceeds paid to a charity selected by the Chief Compliance Officer. The Chief Compliance Officer and any other officer authorized by the Co-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 authorization prior to the placement of a purchase or sell order with a broker by a Vontobel Employee. Should such officer deny the request, he or she will give a reason for the denial. An approved request will remain valid, in the case of a U.S.-based Vontobel Employee, until the U.S. market close on the same business

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day the request is made, and, in the case of all other Vontobel Employees, until the expiration of 2 business days, inclusive of the day of the request.

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, 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 “Pre-Trade Approval > New” link, the selection 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 the firm’s trading desk and 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.

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.

4.5.2

In accordance with Rule 204A-1(a)(3), Vontobel Employees shall instruct their broker(s), including the Corporation’s affiliate broker-dealers, 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. For the avoidance of doubt, the above requirements shall not apply to accounts containing only instruments expressly excluded from the Code’s definition of “Security” in Section 2 and in Appendix C.

In keeping with June 2015 guidance from the US Securities and Exchange Commission regarding the scope of the exception to the above-described Rule 204A-1(a)(3) reporting requirements, the fact that a securities account is an account managed by a third-party with discretionary investment authority or is a trust administered by a trustee with such authority shall not, by itself, mean the Vontobel Employee has not exercised direct or indirect influence or control over the account, thus triggering the reporting exception. The reporting exception shall apply only if in actual practice the Vontobel

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Employee exerted no direct or indirect influence or control, to any degree, over the account. All other securities accounts must be reported to the Chief Compliance Officer in accordance with the Rule and this Section.

With respect to such accounts, each Vontobel Employee, upon the commencement of employment and annually thereafter, shall certify specifically that, for the previous calendar year, he or she did not (a) suggest that the trustee or third-party discretionary manager make a particular securities transaction for an account; (b) direct the trustee or discretionary manager to make such a transaction; or, (c) consult with the trustee or discretionary manager regarding allocation of investments in an account.

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. The review may be performed, and the evidence recorded, electronically and in an automated fashion by the online compliance system, and such a review and recording shall satisfy the requirement.

4.5.4

The Chief Compliance Officer shall receive and maintain all reports required hereunder. The reports may be generated and maintained electronically and in an automated fashion by the online compliance system, and such reports shall satisfy the requirement.

4.5.5

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 General Counsel, 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 or designee shall be responsible for maintaining and updating Vontobel’s Code of Ethics.

4.5.6

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.

4.5.7

Vontobel Employees shall disclose their personal securities holdings to the Chief Compliance Officer or designee within ten (10) days of the commencement of employment. In keeping with guidance from the Securities and Exchange Commission, this disclosure shall include the certification described in Section 4.5.2 above.

4.5.8

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.

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4.5.9

The Chief Compliance Officer shall prepare a semi-annual report to the Corporation’s Board of Directors. Such report shall (a) include a copy of the Code of Ethics, if recently amended; (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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INSIDER TRADING

The Insider Trading and Securities Fraud Enforcement Act of 1988, as amended (“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 and / or the General Counsel.

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.

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5.2

Elements of Insider Trading

5.2.1

Who Is an Insider?

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 U.S. 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.

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(c)

Tipper/Tippee Liability : In 2015, the U.S. Supreme Court denied certiorari in United States v. Newman. This left intact the decision of the U.S. Court of Appeals for the Second Circuit. The Second Circuit held that: (i) unlawful insider trading requires proof that the remote tippee of inside information knew that he or she was trading on inside information that had been improperly disclosed in exchange for a personal benefit; and (ii) a personal benefit can only be inferred from a personal relationship between tipper and tippee when there is evidence of a “meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of pecuniary or similarly valuable nature.”

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

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 and / or the General Counsel.

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?

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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 and the General Counsel. Until they have 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 and the General Counsel. After the General Counsel and Chief Compliance Officer have 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 General Counsel and 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.

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 General Counsel and 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

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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.

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 Co-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

Semi-Annual Reports

On a semi-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.

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5.5.5

Annual Reports

Pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended, 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.

5.5.6

Using Industry Experts for Research

As part of the investment research process, Vontobel Employees, specifically Vontobel investment professionals, may use expert network firms. Expert network firms (“Expert Network”) facilitate consultations with paid industry experts. Vontobel maintains controls with respect to the use of Expert Networks. These controls include, but are not limited to, the following:

The CCO or designee will conduct annual due diligence meetings with Expert Networks in order to guard against conflicts and to ensure their procedures and internal controls are reasonably designed to prevent the transmission of confidential information, including material, non-public information (“confidential information”).

Before an Expert Network is allowed to schedule a consultation for Vontobel with an industry expert, the industry expert must first complete a pre-screening questionnaire confirming, among other things, that he or she will not (1) share confidential information, (2) otherwise breach a confidentiality obligation, or (3) provide information about a current or recent employer.

Randomly and without prior notice, the CCO or designee can listen-in on expert network telephone consultations with Vontobel investment professionals.

In keeping with Section 5.4.1, Vontobel investment professionals are required immediately to report to the General Counsel and CCO or designee any actual or suspected revelation of confidential information during a consultation.

Annually, each Vontobel Employee will certify that he or she complied with Vontobel’s Expert Network policy and procedures.

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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:

(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:

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(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

(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.

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(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)).

(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;

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(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.

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

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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;

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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;

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;

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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;

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

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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

Carl Thomas

Andrea Cheung

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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

options on equity securities

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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Exhibit p.5

CODE OF ETHICS

Updated:

December 2015

Horizon Kinetics LLC

470 Park Avenue South, 4 ^th Floor

New York, New York 10016

(646) 291-2300

www.horizonkinetics.com

www.kineticsfunds.com

Table of Contents

1.	Introduction and Purpose of the Code	3
2.	Definitions	4
3.	Statement of General Principles	9
4.	General Guidelines	9
5.	Personal Trading Policy	11
6.	Reporting Obligations	13
7.	Sanctions	15
8.	Records and Confidentiality	15

Exhibits

Exhibit A	Policies and Procedures Designed to Detect and Prevent Insider Trading
Exhibit B	Gift and Entertainment Policy
Exhibit C	Employee Complaint (Whistleblower) Reporting and Procedures
Exhibit D	Personal Trading Guidelines
Exhibit E	Reportable Funds
Exhibit F	Political Contribution (Pay-to-Play) Policies

SECTION 1. Introduction and Purpose of the Code.

Horizon Kinetics LLC (“ HK ”) is the parent holding company of Horizon Asset Management LLC (“ HAM ”), Kinetics Asset Management LLC (“KAM”), Kinetics Advisers, LLC (“KA” ), each an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), and KBD Securities, LLC (“ KBD ”), and Kinetics Funds Distributor LLC (“ KFD ”), each a broker-dealer registered with the SEC and members of the Financial Industry Regulatory Authority (“FINRA”) (collectively, HK, HAM, KAM, KA, KBD and KFD are referred to as the “Firm” or “Firms”).

HAM primarily publishes research, serves as sub-adviser to both investment companies registered with the SEC and UCIT funds registered in Ireland and also manages separate accounts and private funds. KAM is the investment adviser to the Kinetics Mutual Funds, Inc. (“KMF”), a series of U.S. registered investment companies, serves as a sub-adviser to UCIT funds registered in Ireland, and manages separate accounts. KA manages U.S. and non-U.S. private funds. KBD supports the marketing efforts of the Firm, and KFD serves as principal underwriter/distributor for KMF. The Firms have adopted this Code of Ethics (the “Code”) to specify and prohibit, among other things, certain types of conduct, including personal securities transactions deemed to create a conflict of interest, or at least the potential for, or appearance of, such a conflict, and to establish reporting requirements and preventive procedures pursuant to the provisions of Rule 17j-1(b)(1) under the Investment Company Act of 1940 (the “1940 Act”) and Section 204A-1 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as applicable.

This Code makes it unlawful for Affiliated Persons (as defined below) of the Firms, in connection with the purchase or sale, directly or indirectly, of a Security Held or to be Acquired (as defined below) by the Firms or any investment product managed by the Firms:

To employ any device, scheme or artifice to defraud the Firms or any investment products managed by the Firms;

To make any untrue statement of a material fact to the Firms or any investment products managed by the Firms or omit to state a material fact necessary in order to make the statements made to the Firms or any investment products managed by the Firms, in light of the circumstances under which they are made, not misleading;

Engage in any act, practices or course of business that operates or would operate as a fraud or deceit on the Firms or any investment products managed by the Firms; or

To engage in any manipulative practices with respect to the Firms or any investment products managed by the Firms.

Similarly, Section 206 of the Advisers Act provides that it is unlawful for any investment adviser, directly or indirectly:

To employ any device, scheme or artifice to defraud any client or prospective client;

To engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client; or

To engage in any act, practice or course of business that is fraudulent, deceptive or manipulative.

In addition, Section 204A of the Advisers Act requires every investment adviser to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse in violation of the Advisers Act or the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), or the rules or regulations thereunder of material, non-public information by such investment adviser or any person associated with such investment adviser. Pursuant to Section 204A, the SEC has adopted Rule 204A-1 which requires the Firms to establish, maintain and enforce a written code or ethics.

In compliance with paragraph (c)(1) of Rule 17j-1 of the 1940 Act and Section 204A of the Advisers Act, this Code has been adopted by the Firms for purposes of implementing policies and procedures reasonably designed to prevent Access Persons (as defined below) of the Firms from engaging in any conduct prohibited by Rule 17j-1. All personnel of the Firms must follow not only the letter of this Code but also must abide by the spirit of this Code and the principles articulated herein, which, among other things, requires the Firms and its directors, officer and employees to place the interests of the Firms’ clients first and to operate in a manner that promotes fair dealing and honesty. The Firms and each director, officer and employee owe a fiduciary duty to the Firms’ clients.

The Firms also maintain other compliance-oriented policies and procedures, which include Policies and Procedures Designed to Detect and Prevent Insider Trading (Exhibit A), Gift and Entertainment Policy (Exhibit B), Employee Complaint (Whistleblower) Reporting Procedures (Exhibit C), Personal Trading Guidelines (Exhibit D) and Political Contributions (Pay-to-Play) Policies (Exhibit F), all of which are hereby adopted and incorporated into this Code, and which are attached as Exhibits at the end of this Code.

Questions about the Code should be directed to the Firm’s Chief Compliance Officer (“CCO”) or his/her designee. In the event that any provision of this Code conflicts with any other of the Firms’ policies or procedures, the terms herein shall apply. All directors, officers and employees are expected to read the Code carefully and to observe and adhere to its guidelines at all times. On at least an annual basis, and at such other times as the CCO may deem necessary or appropriate, every director, officer and employee must acknowledge in writing that he or she has read and understands the Code and agrees, as a condition of employment, to comply with the Code.

SECTION 2. Definitions.

“Access Person” – means:

any director, officer, general partner, full-time employee, or part-time employee of the Firms regardless of title or job function;

any natural person who has influence or control over the Firms and who obtains or provides information (other than publicly available information) concerning investment recommendations to the Firms or to the investment products managed by the Firms.

The CCO will maintain a list of individuals who would otherwise be considered Access Persons, but whom the CCO determined were not.

“Affiliated Person” means:

Any immediate family member (defined as spouse, child, mother, father, brother, sister or other similar relative) of an Access Person that lives in the same household, including those relationships recognized by law (e.g., domestic or civil unions, etc.);

Any natural person that is financially dependent on an Access Person;

Any account for which an Access Person is a custodian, trustee or otherwise acting in a fiduciary capacity or with respect to which any such Access Person either has the authority to make investment decisions or from time to time gives investment advice;

Any partnership, corporation, joint venture, trust or other entity in which an Access Person, directly or indirectly, in the aggregate, has a 10% or more beneficial interest (defined below) or for which such Access Person is a general partner or executive officer.

“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.

“Beneficial Ownership” – shall be defined as and interpreted in the same manner as in determining whether an Access Person or Affiliated Person is subject to the provisions of Section 16 of the Securities Exchange Act and the rules and regulations thereunder, which generally encompasses those situations where the Access Person or Affiliated Person has the right to enjoy some economic benefit from the account, regardless of the identity of the registered owner of the account.

“Beneficial Ownership Account” – means accounts where an Access Person or Affiliated Person has Beneficial Ownership, and that contain Covered Securities (or which are eligible to hold Covered Securities, defined below). This would include:

an account where an Access Person or Affiliated Person holds securities for his or her own benefit either in bearer form, registered in his or her name or otherwise, regardless of whether the securities are owned individually or jointly;

an account held in the name of an Access Person or Affiliated Person’s immediate family (spouse or minor child) sharing the same household;

an account where an Access Person or Affiliated Person acts as trustee, executor, administrator, custodian or broker;

an account owned by a general partnership of which the Access Person or Affiliated Person is a member or a limited partnership of which such Access Person or

Affiliated Person is a general partner;

an account held by a corporation (other than with respect to treasury shares of a corporation) of which such person is an officer, director, trustee or 10% or greater stockholder or by a corporation which can be regarded as a personal holding company of an Access Person or Affiliated Person;

an account recently purchased by a person and awaiting transfer into the Access Person or Affiliated Person’s name;

an account held by any other person if, by reason of contract, understanding, relationship, agreement or other arrangement, such Access Person or Affiliated Person obtains therefrom benefits substantially equivalent to those of ownership;

an account held by an Access Person or Affiliated Person’s spouse or minor children or any other person, if, even though such Access Person or Affiliated Person does not obtain therefrom the above-mentioned benefits of ownership, such Access Person or Affiliated Person can vest or re-vest title in himself or herself at once or at some future time; and

an account where an Access Person or Affiliated Person, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise, has or shares voting power and/or investment power with respect to such account. For purposes of this provision, “voting power” shall include the power to vote, the power to dispose, or to direct disposition of Covered Securities in such account.

“Control” – shall have the same meaning as set forth in Section 2(a)(9) of the 1940 Act.

“Covered Security” – means a reportable security as defined in Section 202(a)(18) of the Advisers Act or Section 2(a)(36) of the 1940 Act, and shall include any note, stock treasury stock, security future, bond, including corporate bond, zero coupon bond and Treasury bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit of 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 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 in a national securities exchange relating to a 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, including without limitation rights in ADRs or IDRs, except however , that in accordance with Rule 17j-1 under the 1940 Act, a Covered Security shall NOT include:

Direct obligations of the Government of the United States;

Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;

Shares issued by open-end funds (other than those that are managed or sub-advised by the Firms which are defined as “Reportable Funds ¹ ”);

Shares of funds structured under 2a-7 of the 1940 Act, otherwise referred to as money market funds;

“Chief Compliance Officer” – means Jay Kesslen or his successor appointed by the Firms, who is charged with the responsibility for administering this Code and the policies and procedures thereunder.

“Federal Securities Laws” – means the Securities Act of 1933, the Securities Exchange Act, the Sarbanes-Oxley Act of 2002, the 1940 Act, the Advisers Act, Title V of the Gramm-Leach-Bliley Act, and any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to investment companies and investment advisers, and any rules adopted thereunder by the SEC, applicable Self-Regulatory Organizations, or the Department of Treasury, as they may apply to the Firms or the investment products managed by the Firms.

10.

“FRMO Corporation” – means the publicly traded corporation (ticker currently FRMO).

11.

“Holding Period” – means the period of time after the purchase or short sale of a Covered Security during which an Access Person or Affiliated Person is prohibited from selling or buying back the Covered Security. This period is 30 days.

12.

“Initial Public Offering” (“IPO”) – means an offering of securities registered under the Securities Act of 1933, 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.

13.

“Non-Discretionary Account” – means a Beneficial Ownership Account for which neither an Access Person nor Affiliated Person has control or discretion of the purchases or sales being made therein.

14.

“Outside Business Activity” – means any activity by an Access Person where they are actively engaged in:

any investment related business or occupation; or

any business or occupation for compensation that provides greater than 10% of the Access Person’s income or for which the Access Person devotes a substantial percentage of their time.

¹ A list of Reportable Funds can be found in Exhibit E.

15.

“Pre-Clearance Security” – means an instrument that requires pre-clearance with the CCO, which includes all instruments defined as Covered Securities but which shall not include any of the exclusions from the definition of Covered Securities or any of the following:

Direct Obligations of foreign governments;

Municipal bonds and other fixed income instruments that are based on municipal bonds, such as principal protected notes and variable rate demand notes;

Options or futures on direct obligations of the United States;

Options or futures on index or sector basket proxies;

Commodity and commodity contracts;

Foreign currencies, options thereon and currency futures thereon; and

Passively managed exchange traded funds and notes (“ETFs” and “ETNs”).

16.

“Purchase or sale of a Covered Security” – includes, among other things, the writing of an option to purchase or sell a Covered Security.

17.

“Purchase or sale of a security” – includes, among other things, the purchase or writing of an option to purchase or sell a security.

18.

“Reportable Fund” – means any investment company registered under the 1940 Act for which the Firms serve as investment adviser as defined in Section 2(a)(20) of the 1940 Act or an investment company registered under the 1940 Act whose investment adviser or principal underwriter controls the Firms, is controlled by the Firms or is under common control with the Firms or for which the Firm acts as adviser or sub-adviser thereto. Reportable Funds must be pre-cleared prior to purchase or sale.

19.

“Restricted List” – means a list of securities that, due to the determination of the Firms, are prohibited from being traded in client accounts and are prohibited from being traded in Beneficial Ownership Accounts.

20.

“Security Held or to be Acquired” – means:

Any Covered Security which, within the most recent 15 days:

Is or has been held by the Firms or any investment product managed by the Firms; or

ii.

Is being or has been considered for purchase by the Firms or any of the investment products managed by the Firms; and

Any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in paragraph (i) of this definition.

SECTION 3. Statement of General Principles.

It is the policy of the Firms that Access Persons comply with applicable Federal Securities Laws and that no Access Persons engage in any act or practice or course of conduct that would violate the provisions of Rule 17j-1 of the 1940 Act or Sections 204 or 206 of the Advisers Act. The following general fiduciary principles shall govern the personal investment activities of all Access Persons.

Each Access Person shall adhere to the highest ethical standards and shall:

At all times, place the interests of the Firms and the investment products managed by the Firms before his or her personal interests;

Conduct all personal securities transaction in a manner consistent with this Code, so as to avoid any actual or potential conflicts of interest, or an abuse of a position of trust and responsibility; and

Not take any inappropriate advantage of his or her position with or on behalf of the Firms or investment products managed by the Firms.

SECTION 4. General Guidelines

General

No Access Person shall recommend to, or cause or attempt to cause, the Firms or any of the investment products managed by the Firms to acquire, dispose of or hold any Covered Security (including any option, warrant or other right or interest relating to such Covered Security) in which such Access Person or Affiliated Person has direct or indirect Beneficial Ownership unless such Access Person first discloses in writing to the CCO, or his/her authorized designee, all facts reasonably necessary to identify the nature of the ownership and any potential conflicts of interest relating to the ownership by the Access Person or Affiliated Person in such Covered Security.

If, as a result of fiduciary obligations to other persons or entities, an Access Person believes that he or she is unable to comply with certain provisions of the Code, such Access Person shall advise the CCO in writing, setting forth with reasonable specificity the nature of such fiduciary obligations and the reasons why such Access Person believes they are unable to comply with any such provisions. The CCO may, in his/her discretion, exempt such Access Person or an Affiliated Person from any such provisions, if the CCO determines that the services of such Access Person are valuable to the Firms and investment products managed by the Firms and the failure to grant such exemptions is likely to cause such Access Person to be unable to render services to the Firms or any investment products managed by the Firms. Any Access Person granted an exemption (including, an exception for an Affiliated Person of such Access Person), pursuant to this paragraph shall, within 3 business days after engaging in a purchase or sale of a Covered Security Held or to be Acquired by the Firms or investment products managed by the Firms, furnish the CCO with a written report concerning such transaction setting forth the date of the transaction(s)

involving Covered Securities, the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares and principal amount, nature of the transaction, price at which the transaction was effected and the name of the broker, dealer or bank through whom the transaction was effected.

From time to time, Access Persons may establish special “insider” relationships with one or more issuers of Covered Securities (i.e., an Access Person may become an officer, director, or trustee of an issuer, a member of a creditors committee which engages in material negotiations with an issuer, etc.). In such cases, the “insider” relationships must first be disclosed to the CCO, who will make a determination as to whether the issuer should be put on a restricted list of securities that are not eligible for purchase or sale by the Firms or investment products managed by the Firms or any Access Persons thereof.

Access Persons shall bear the responsibility of production for any notices, disclosures, evidence and filings that are required under this Code which relate to Affiliated Persons who are designated as such as a result of their relationship with such Access Persons.

Service as a Trustee

No Advisory Person shall serve on a board of trustees/directors of a publicly traded company without prior authorization from the CCO, based upon a determination that such board service would be consistent with the interests of the Firms and investment products managed by the Firms.

If board service of an Access Person is authorized by the CCO, such Access Person shall be isolated from the investment making decisions regarding the purchase or sale by the Firm or any investment product managed by the Firms of the securities of the company upon whose board they serve.

Insider Trading

Access Persons are subject to the Firms’ Insider Trading Policies and Procedures, which are administered by the CCO and which generally prohibit Access Persons from trading, either personally or on behalf of others (including for accounts of the Firms and/or clients thereof), while in possession of material, non-public information. Access Persons are also prohibited from disclosing to outside parties material non-public information. Strict sanctions apply for breaches of the Insider Trading Policies and Procedures.

Gifts

No Advisory Person shall give or receive any gift or other item of value to or from any person or entity that does business with or on behalf of any of the Firms, if such gift could pose a potential conflict of interest or appearance of impropriety. Access Persons shall comply with the Firms’ Gift and Entertainment Policy.

Outside Business Activities

All Outside Business Activities must be disclosed and approved by the CCO prior to an Access Person’s engaging in such activity.

Whistleblower Procedures

All Access Persons are subject to the Firms’ Employee Complaint (Whistleblower) Reporting Procedures, which are administered by the CCO.

SECTION 5. Personal Trading Policy

Initial Public Offerings

Access Persons may not acquire, directly or indirectly, any Beneficial Ownership in any securities (other than municipal bonds) in an IPO without prior approval in writing from the CCO as described in the Firms’ Personal Trading Guidelines, attached as Exhibit D. Furthermore, should written consent of the CCO be given, Access Persons are required to disclose such investment when they participate, in any manner, in subsequent consideration of the Firms’ investment products managed by the Firms to make investments in such issuer. In such circumstances, the decision to purchase securities of the issuer for the Firms, investment products managed by the Firms and/or clients of the Firms should be subject to an independent review by Access Persons with no personal interest in the issuer.

Private Placements and Limited Offerings

Access Persons may not acquire, directly or indirectly, any beneficial ownership in any securities in a private placement or limited offering without the prior written consent of the CCO. Furthermore, should written consent be given, Access Persons are required to disclose such investment when they, participate, in any manner, in the subsequent consideration of the Firm’s investment products managed by the Firms to make investments in such issuer. In such circumstances, the decision to purchase securities of the issuer for the Firms, investment products managed by the Firm and/or clients of the Firms should be subject to an independent review by Access Persons with no personal interest in the issuer.

Holding Period Restrictions

No Access Person shall engage in a closing transaction (i.e., selling a position held, or buying back a security for which a short-sale was executed) of the same (or equivalent) Pre-Clearance Security of which such Access Person or Affiliated Person has Beneficial Ownership within thirty (30) calendar days of such purchase or sale unless such purchase or sale falls within the exceptions listed in the Personal Trading Guidelines, attached as Exhibit D. The Firm may impose additional holding period restrictions for Access Persons and Affiliated Persons, in its discretion, and may exempt such holding period requirements in instances where the Pre-Clearance Security is not held or being traded in client accounts.

The Holding Period shall be measured using the Last In, First Out (LIFO) method to determine the trade date of the opening trade for such position being closed out.

The CCO may waive the holding period in his/her discretion in situations not deemed to present a conflict of interest or be disadvantageous to the Firms or its clients, or in instances such as when, for example, an Access Person is selling a position at a loss or where such Access Person is selling for purposes of tax loss harvesting.

Personal Trading and Pre-Clearance Procedures

Access Persons and Affiliated Persons are permitted to engage in personal trading. An Access Person or an Affiliated Person may not, directly or indirectly, acquire or dispose of a Pre-Clearance Security in a Beneficial Ownership Account unless such purchase or sale has been approved by the CCO or his/her designee; the approved transaction is completed on the same day approval is received ² ; and the CCO has not rescinded such approval prior to execution of the transaction. Pre-clearance is not required for instruments that are not Covered Securities, are excluded from the definition of Covered Security, or which are not explicitly listed under the definition of Pre-Clearance Security.

Pre-Clearance Process

Submissions to trade Pre-Clearance Securities should be made to the CCO or his/her designee through My Compliance Office (“MCO”), the Firm’s web-based compliance system.

ii.

The CCO may deny any trade requests, in his/her sole discretion.

iii.

The CCO’s trades will be pre-cleared by another member within the Legal and Compliance Department who will report such transactions to the Board of Directors periodically.

iv.

Approvals by the CCO or his/her designee are only valid on the day they are given. Approvals for securities that only trade in the overnight market are assumed to be given for that night’s trading session.

Good until Cancel orders or any orders extending beyond one day are not permitted without the express permission of the CCO or his/her designee.

vi.

Private Placement and Limited Offering Transaction approvals shall be valid on the next immediately available subscription date or as may otherwise be approved by the CCO or his/her designee.

vii.

Access Persons are responsible for compliance with this Code on behalf of Affiliated Persons.

2 I . Approvals for securities that only trade in the overnight market are assumed to be given for that night’s trading session.

viii.

The CCO, in his discretion, may waive any applicable restrictions when such transactions are deemed not to create a material conflict of interest and do not otherwise disadvantage the Firm, the investment products managed by the Firm or its clients.

ix.

The CCO will maintain a list of any waivers granted hereunder.

SECTION 6. Reporting Requirements

Access Persons are required to notify the CCO of any Beneficial Ownership Accounts, and to assist the CCO in ensuring such Beneficial Ownership Accounts are set up through MCO. Such information to be provided to the CCO via email is the name of the brokerage firm and the date the account was established.

Statements and Confirms

The CCO shall receive, electronically through MCO, statements and confirms from brokerage firms, banks, or other custodians at which the Access Person or Affiliated Persons have a Beneficial Ownership Account. If the CCO is unable to receive confirms and statements via MCO, Access Persons will supply the CCO, on a timely basis, with duplicate copies of such Beneficial Ownership Account confirms and statements. All Access Persons shall promptly inform the CCO of any newly established Beneficial Ownership Account on behalf of the Access Persons or Affiliated Persons.

Filings

All Access Persons shall make the following attestations regarding the accuracy of, through MCO, no later than 30 calendar days after the end of each calendar quarter, the following information:

The date of any transaction involving a Covered Security, the date the report is being submitted by the Access Person under Rule 17j-1(d)(1)(ii)(A)(5), the title, and as applicable, the exchange ticker symbol or CUSIP number, interest rate and maturity date, and the number of shares and the principal amount of each Covered Security involved;

The nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition);

The price at which the transaction was effected; and

The name of the broker, dealer or bank with or through whom the transactions was effected.

Annual Reporting

No later than 10 days after becoming an Access Person, provided that the information must be current as of a date no more than 45 days prior to the date the person becomes an

Access Person, and thereafter on an annual basis as of December 31 of each year no later than thirty (30) calendar days after the end of each calendar year, each Access Person shall attest the accuracy of, in MCO, the following information, which must be current as of a date no more than 45 days before the report is submitted:

the title, type of security, the date that the report is submitted by the Access Person per Rule 17j-1(d)(1)(iii)(C) and as applicable, the exchange ticker symbol or CUSIP number, number of shares and principal amount of each Covered Security in a Beneficial Ownership Account;

the name of any broker, dealer or bank with whom the Access Person or Affiliated Person maintains a Beneficial Ownership Account; and

a statement that the Access Person (1) has reviewed and understands the Code, (2) recognizes that the Access Person is subject to the Code, and (3) if such Access Person was subject to the Code during the past year, has complied with its requirements, including the requirements regarding reporting of personal securities transactions hereunder.

No Admission of Ownership

Any report filed with the CCO pursuant to this Section 6 may contain a statement that it shall not be construed as an admission by the person making the report that he or she has any direct or indirect beneficial ownership in the security to which the report relates.

Review

The CCO shall notify each Access Person that he or she is subject to the reporting requirements set forth herein and shall deliver a copy of this Code to each such Access Person upon request.

The CCO or his/her designee shall review all personal holdings reports submitted by each Access Person and Affiliated Person, including confirmations of personal securities transactions, to ensure that no trading has taken place in violation of Rule 17j-1 of the 1940 Act, Section 204A of the Advisers Act, or the Code.

The CCO will review employee trading as well as client trading, with the goal of assessing the actual or potential misuse of material, non-public information (regardless of the source), examining items such as certain short-term trades, trades in a security before it was added to the Firm’s Restricted List, and trades made in securities with large price changes. This review also encompasses a comparison of the reported personal securities transactions with completed and contemplated portfolio transactions on behalf of clients to determine whether a violation of this Code may have occurred. A member within the Legal and Compliance Department will review the reports of the CCO.

In reviewing transactions, the CCO shall take into account the exemptions allowed under this Code. Before making any determination that a violation has been committed by any person, the CCO shall give such person an opportunity to supply additional information regarding the transaction in question. The CCO shall maintain a list of personnel responsible for reviewing transaction and personal holdings reports.

SECTION 7. Sanctions.

If the CCO determines that a material violation of this Code has occurred, he/she may impose such sanctions that he/she deems appropriate, including, among other things, disgorgement of profits, censure, suspension and/or termination of the employment of the violator. All violations of this Code and any sanctions imposed as a result thereof shall be documented and maintained by the CCO.

The CCO shall submit a report to the Board of the Firm, no less frequently than annually, which shall identify any material violations of the Code, along with the circumstances giving rise to the violations, any action that was taken or is recommended to be taken as a result of the violations and what changes, if any, were made or are being made to the Code during the last 12 months.

The Firms reserve the right to take any legal action they may deem appropriate against any Access Person for violations of this code and to hold Access Persons liable for any and all damages (including but not limited to Attorney fees) that the Firms may incur as a direct or indirect result of any such Access Person’s violation of this Code or related law or regulation.

SECTION 8. Records and Confidentiality.

Records

The CCO shall maintain records in the manner and to the extent set forth below, which records may be maintained on microfilm under the conditions described in Rule 204-2(g) of the Advisers Act and Rule 17j-1 and Rule 31a-2(f) under the 1940 Act, and shall be available for examination by representatives of the SEC:

a copy of this Code and any other code which is, or at any time within the past five years has been, in effect shall be preserved in an easily accessible place;

a record of any decision and the reasons supporting the decision to approve any acquisition or sale by Access Persons or Affiliated Persons of Covered Securities in an IPO or Limited Offering;

each memorandum made by the CCO hereunder;

a record of any violation of this Code and of any action taken as a result of such violation shall be preserved in an easily accessible place for a period of not less than five (5) years following the end of the fiscal year in which the violation occurs;

a copy of each report made pursuant to this Code shall be preserved for a period of not less than five (5) years from the end of the fiscal year in which it is made, the first two (2) years in an easily accessible place;

a copy of all written acknowledgements for each person who is currently, or within the past five years was, an Access Person; and

a list of all persons who, within the past five (5) years have been required to make reports pursuant to this Code or who are or were responsible for reviewing the reports under this Code, shall be maintained in an easily accessible place.

Confidentiality

The current portfolio and account positions and current portfolio transactions pertaining to the Firms or investment products managed by the Firms must be kept confidential.

If material non-public information regarding the Firms or investment products managed by the Firms should become known to any Access Person, whether in the line of duty or otherwise, he or she should not reveal it to anyone unless it is properly part of his or her work to do so.

If anyone is asked about investment portfolios or whether a security has been sold or bought, his or her reply should be that this is an improper question and that this answer does not mean that the Firms or investment products managed by the Firms have bought, sold or retained the particular security. Reference, however, may, of course, be made to the latest published report of the investment portfolios or accounts for the Firms or investment products managed by the Firms.

Interpretation of Provisions

The Firms may from time to time adopt such interpretations of this Code as they deem appropriate.

Exhibit A

POLICIES AND PROCEDURES

DESIGNED TO DETECT AND PREVENT INSIDER TRADING

Section I.

Policy Statement on Insider Trading.

The Firms forbid any of their Access Persons from trading, either personally or on behalf of others on material nonpublic information or communicating material nonpublic information to others in violation of the law. This conduct is frequently referred to as "insider trading." The Firms’ policy applies to every Access Person and extends to activities within and outside the scope of Access Persons' duties at the Firms. Every Access Person must read and retain this Policy Statement on Insider Trading. Any questions regarding this Policy Statement should be referred to the CCO or in his/her absence, his/her designee, who is responsible for monitoring this Policy Statement on Insider Trading and the procedures established herein.

THIS POLICY STATEMENT ON INSIDER TRADING APPLIES TO THE FIRM, ACCESS PERSONS AND THE ADVISORY CLIENTS

The term "insider trading" is not defined in the federal securities laws, but is generally understood to refer to the use of material nonpublic information, and to the communication of material nonpublic information to others, to trade in securities (whether or not one is an "insider" of the issuer of the securities being traded).

While the law concerning insider trading is not static, it is generally understood that the law prohibits:

(i)

trading by an insider while in possession of material nonpublic information;

(ii)

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

(iii)

an insider, or a non-insider described in clause (ii) above, from communicating material nonpublic information to others.

The elements of insider trading and the penalties for such unlawful conduct are discussed below. If, after reviewing this Policy Statement on Insider Trading, you have any questions, you should consult the CCO or his/her designee.

Who is an Insider?

The concept of "insider" is broad. It potentially includes all Access Persons of the Firms. 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. The Firms may become a temporary insider of a company they advise or for which they perform other services. Temporary insiders can also include, among others, a company's law firm, accounting firm, consulting firm, bank, and the employees of such organizations.

What is Material Information?

Trading on inside information is not a basis for liability unless the information is material. "Material information" is generally defined as (i) information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, (ii) information that, if publicly disclosed, is reasonably certain to have a substantial effect on the price of a company's securities, or (iii) information that could cause insiders to change their trading patterns. Information that Access Persons should consider material includes, without limitation, changes in dividend policies, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidity problems, and significant new products, services or contracts.

Material information can also relate to events or circumstances affecting the market for a company's securities. For example, in 1987, the Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a reporter from The Wall Street Journal was found criminally liable for disclosing to others the dates that reports on various companies would appear in The Wall Street Journal and whether those reports would be favorable or not.

What is Nonpublic Information?

Information is nonpublic until such time as 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 Dow Jones , Reuters Economic Services , The Wall Street Journal or other publications of general circulation, would be considered public. In addition, if information is being disseminated to traders generally by brokers or institutional analysts, such information would be considered public unless there is a reasonable basis to believe that such information is confidential and came from a corporate insider.

Bases for Liability

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 where there is a fiduciary relationship. A relationship must exist between the parties to a transaction such that one party has a right to expect that the other party will disclose any material nonpublic information or will refrain from trading.

In 1983, the Supreme Court stated that outsiders can acquire the fiduciary duties of insiders (i) by entering into a confidential relationship with a company through which the outsider gains material nonpublic information ( e.g. , attorneys, accountants, underwriters or consultants), or (ii) by becoming a "tippee" if the outsider is, or should have been, aware that it has been given confidential information by an insider who has violated his or her fiduciary duty to the company's shareholders.

However, in the "tippee" situation, a breach of duty occurs only if the insider personally benefits, directly or indirectly, from the disclosure. The benefit does not have to be pecuniary, but can be

a gift, a reputational benefit that will translate into future earnings, or even evidence of a relationship that suggests a quid pro quo .

Misappropriation Theory

Another basis for insider trading liability is the "misappropriation theory", where liability is established when trading occurs on material nonpublic information that was stolen or misappropriated from another person. The Supreme Court found, in 1987, that a columnist defrauded The Wall Street Journal when he stole information from The Wall Street Journal and used it for trading in the securities markets. It should be noted that the misappropriation theory can be used to reach a variety of individuals not previously thought to be encompassed under the fiduciary duty theory.

Penalties for Insider Trading

Penalties for trading on or communicating material nonpublic information are severe, both for individuals involved in such unlawful conduct and their employers. A person can be subject to some or all of the following penalties, even if he or she does not personally benefit from the violation. Penalties include civil injunctions; treble damages; disgorgement of profits; jail sentences; and substantial fines . In addition, any violation of this Policy Statement on Insider Trading can be expected to result in serious sanctions by the Firms, including dismissal of any Access Persons involved.

Section II. Procedures to Implement the Firms’ Policies Against Insider Trading and to Comply with Section 204A under the Advisers Act

The following procedures have been established to aid Access Persons in avoiding insider trading, to aid the Firms in preventing, detecting and imposing sanctions against insider trading, and to comply with Section 204A under the Advisers Act, as amended. Every Access Person must follow these procedures or risk serious sanctions, including dismissal, substantial personal liability and criminal penalties. If you have any questions about these procedures, you should consult the CCO or his/her designee.

Identifying Inside Information

Before trading for yourself or others (including an Advisory Client) in the securities of a company about which you may have potential inside information, ask yourself the following questions:

(i)

Is the information material ? Is this information that an investor would consider important in making his or her investment decisions? Is this information that would substantially affect the market price of the securities if generally disclosed? Is this information which could cause insiders to change their trading habits?

(ii)

Is the information nonpublic ? To whom has this information been provided? Has the information been filed with the SEC, or been effectively communicated to the marketplace by being published in Reuters Economic Services , The Wall Street Journal or other publications of general circulation, or by appearing on the wire services?

If, after consideration of the above, you believe that the information is material and nonpublic, or if you have a question as to whether the information is material and nonpublic, you should take the following steps:

(i)

Report the matter immediately to the CCO or his/her designee;

(ii)

Do not purchase or sell the securities of the relevant company on behalf of yourself or others, including the Advisory Clients; and

(iii)

Do not communicate the information to anyone inside or outside the Firm, other than to the CCO or his/her designee.

After the CCO or his/her designee has reviewed the issue, you will be instructed to continue the prohibitions against trading and communication, or you will be allowed to trade and communicate the information.

Restricting Access to Material Nonpublic Information

Information in your possession that you identify as material and nonpublic may not be communicated to anyone, including persons within the Firm. The Firm is establishing this policy to help avoid conflicts, appearances of impropriety, and the misuse of confidential, proprietary information. In addition, care should be taken to ensure that all material nonpublic information is secure. For example, files containing material nonpublic information should be sealed, and access to computer files containing material nonpublic information should be restricted.

Contacts with Third Parties

Requests of third parties, such as the press and analysts, for information should be directed to the CCO or his/her designee.

Resolving Issues Concerning Insider Trading

If, after consideration of the items set forth in this Appendix A, doubt remains as to whether information is material or nonpublic, or if there are any unresolved questions as to the applicability or interpretation of the foregoing procedures or as to the propriety of any action, these matters must be promptly discussed with the CCO or his/her designee before trading on or communicating the information to anyone.

Section III. Supervisory Procedures

The role of the CCO is critical to the implementation and maintenance of the Firm’s policies and procedures against insider trading. Supervisory procedures can be divided into two classifications – prevention of insider trading and detection of insider trading.

Prevention of Insider Trading

To prevent insider trading, the CCO should:

(i)

ensure that Access Persons are familiar with the Firms’ policies and procedures;

(ii)

answer questions regarding the Firms’ policies and procedures;

(iii)

resolve issues of whether information received by an Access Person is material and nonpublic;

(iv)

review on a regular basis and update as necessary the Firms’ policies and procedures;

When it has been determined that an Access Person has material nonpublic information, the CCO should:

(i)

implement measures to prevent dissemination of such information, and

(ii)

restrict Access Persons from trading in the securities.

Detection of Insider Trading

To detect insider trading, the CCO or his/her designee should:

(i)

review the trading activity and other reports received from each Access Person;

(ii)

review the trading activity of Advisory Clients; and

(iii)

coordinate the review of such reports with other appropriate Access Persons.

Exhibit B

Gift and Entertainment Policy (“GEP”)

The Firm strives to maintain a high standard of business ethics, which it believes are consistent with good corporate citizenship. To ensure that these standards are not being violated, the Firm requires all Employees to perform their jobs in an ethical and legal fashion. The Firm competes and earns its business and its reputation through the quality of the service and expertise it provides, not by gifts, lavish entertainment, and the like. Moreover, the provision or exchange of gifts or lavish entertainment can result in violations of laws, rules, and regulations.

The GEP sets forth the Firm’s rules and restrictions related to giving/receiving gifts and entertainment. Application of the rules of the GEP can vary depending upon the business or social context, who the recipient is, the nature of the gift or entertainment, and the entity involved.

ALL gifts and entertainment exceeding a total of $25 must be pre-cleared through MCO, the Firms’ electronic compliance and reporting system. For any gift or entertainment that could not reasonably be pre-cleared, the Employee should nonetheless inform the CCO as soon afterwards as practicable.

A. Gifts

· An Employee may not give or receive a gift that could influence or appear to influence the business judgment of the Employee or the Recipient/Donor.

· An Employee may not give/receive cash or cash equivalents (including gift certificates) to/from anyone doing business with the Firm unless approved by the CCO.

· There are significant limitations and/or prohibitions on giving gifts to: government officials; principals, officers and employees of exchanges and regulatory organizations; U.S. union officials; and fiduciaries of ERISA Plans (collectively “Restricted Recipient”). As a practical matter, no Firm Employee shall knowingly give a gift to a Restricted Recipient.

· In general, each gift is restricted to a total of $100 per person. When seeking approval in MCO, the Employee shall provide the date, na m e and employer of the person offering/receiving the gift, a description and the approximate value of the gift.

· De minimis gifts (token gifts, i.e. – pens, notepads, desk ornament), Promotional Gifts (umbrellas, tote bags, t-shirts) and Bereavement Gifts (reasonable and customary gifts such as flowers or food baskets given in connection with a funeral or memorial service) are not included in the calculation of the $100 limit.

· Personal gifts (Employee’s relationship with the other party is a personal one, which typically would be long-standing or arises primarily out of activities or relationships not involving the Firms) are not restricted by this policy.

B. Meals and Entertainment

The Firm generally encourages participation in appropriate entertainment events to foster better business relationships. Although there is not a defined limit on the value of meals or entertainment to be received or offered, the Firm advises Employees to utilize discretion in accepting or offering either. Keep in mind that providing or receiving even the most nominal meal or entertainment requires reporting through MCO.

An Employee may not entertain or be entertained if such entertainment could influence or appear to influence proper business judgment.

The Employee and the Recipient/Donor both must attend the entertainment event. Entertainment will be

considered a gift, and fall under the limitations and restrictions that apply to gifts if the Donor does not attend the event.

Lavish entertainment is prohibited. In general, events such as meals, theater, sporting events, leisure activities, and day outings would not be considered lavish. If you have a question about whether or not entertainment is “lavish”, contact the CCO.

Excessive entertainment – e.g., where the Employee or the Recipient is repeatedly being taken to meals, sporting events or other leisure activities is prohibited. Although excessive entertainment clearly depends upon the facts and circumstances, a pattern of entertainment, even if consistent with industry standards, may raise issues in hindsight.

C. Violations of the GEP

If an Employee fails to get approval, exceeds the guidelines, or otherwise fails to comply with the GEP, the Firm may take appropriate disciplinary action, including but not limited to, returning gifts, not reimbursing out-of-pocket expenses or other remedial action against the offending Employee.

Exhibit C

Employee Complaint (Whistleblower) Reporting and Procedures

The Firm is committed to achieving compliance with all applicable securities laws and regulations, accounting standards, accounting controls and audit practices. Accordingly, a process has been created to allow all Employees to submit a good faith complaint without fear of dismissal or retaliation of any kind, to the Firm’s Human Resources Director (the “HR Director”). The HR Director, together with the CCO, will oversee the treatment of Employee complaints. As a first step, you are always obligated to report any irregularities in the matters set forth above to your immediate supervisor or another manager. If, however, you are uncomfortable doing so for any reason or simply prefer not to report to those persons, you may submit your complaint to the CCO. If you prefer to submit a complaint anonymously, you may mail such complaint or message to the CCO or to any officer or director of the Firm. The following is a brief summary of the procedures for submitting a complaint:

Content of Complaints. – The complaint or concern should, to the extent possible, contain (i) a complete description of the alleged event, matter or issue that is the subject of the complaint, including the approximate date and location; (ii) the name of each person allegedly involved in the conduct giving rise to the complaint or concern; and (iii) any additional information, documentation or other evidence available to support the complaint or concern or aid the investigation. Complaints or concerns that contain unspecified wrongdoing (for example, “John Doe is a crook”) or broad allegations without verifiable support may reduce the likelihood that an investigation based on such complaints or concerns will be initiated.

Treatment of Complaints after Submission. – The HR Director is responsible for monitoring the whistleblower submissions. After receiving a complaint, the HR Director will review the complaint and determine the proper course of action and/or response to the complaint.

Determining the Status of Your Complaint. – If you want to follow up on the status of your complaint, you may contact the HR Director. However, depending upon the sensitive or confidential nature of the issues, you may not be able to be advised of the status of the complaint.

Confidentiality/Anonymity. – The anonymity of the Employee making a complaint will be maintained to the extent reasonably practicable within the legitimate needs of law and any ensuing evaluation or investigation. If you would like to discuss any matter with the HR Director or any other officer or director of the Firm, you should indicate this in the submission and include a telephone number or email address at which you may be contacted, if appropriate.

No Retaliation Permitted. – The Firm does not permit retaliation against, nor will it discharge, demote, suspend, threaten, harass or discriminate against, any Employee for submitting a complaint made in good faith. “Good Faith” means that the Employee has a reasonably held belief that the complaint is true.

EXHIBIT D

Personal Trading Guidelines

These Personal Trading Guidelines set forth the general policy and procedures for employees of the Firm (defined in the Code as Access Persons and Affiliated Persons) with respect to personal trading, but where appropriate, the Firm reserves the right to change or modify these standards.

Access Persons and Affiliated Persons who wish to engage in transactions that are not explicitly exempt from the pre-clearance process (listed below and defined in the Code as “Pre-Clearance Securities”) are required to submit their trade requests through My Compliance Office (“MCO”), the Firm’s electronic reporting system and to obtain pre-clearance prior to engaging in the trade.

Reporting

Access Persons are required to notify the CCO of any Beneficial Ownership Accounts (defined as accounts in which an Access Person or their immediate family members residing in the same household have beneficial ownership), and to assist the CCO in ensuring such Beneficial Ownership Accounts are set up such that the CCO may obtain confirms and duplicate account statements on a quarterly basis, generally through MCO.

Statements and Confirms

The CCO shall receive, electronically through MCO, statements and confirms from brokerage firms, banks, or other custodians at which the Access Person or Affiliated Persons has a Beneficial Ownership Account. If the CCO is unable to receive confirms and statements via MCO, Access Persons will supply the CCO, on a timely basis, with duplicate copies of such Beneficial Ownership Account confirms and statements. All Access Persons shall promptly inform the CCO of any newly established Beneficial Ownership Account on behalf of the Access Person or Affiliated Persons.

HOLDING PERIOD REQUIREMENTS

No Access Person or Affiliated Person shall engage in a closing transaction (i.e., selling a position held, or buying back a security for which a short-sale was executed) of the same (or equivalent) Pre-Clearance Security in a Beneficial Ownership Account within thirty (30) calendar days of such purchase or sale (the “Holding Period”). Similarly, all options must have an expiration date that is thirty (30) calendar days or greater from the purchase date. The Holding Period shall be measured using the Last In, First Out (LIFO) method. The CCO may modify the Holding Period as he/she deems appropriate, including by waiving or shortening the period, such as in the following instances:

For purposes of tax loss harvesting;

To meet a bona fide margin call;

To effectuate a sale of shares that were acquired as a result of a rights offering, spin-off or similar corporate action;

PRE-CLEARANCE OF TRADES

Most securities transactions are required to be submitted to the CCO or his/her designee and pre-cleared via MCO prior to an Access Person or an Affiliated Person engaging in the proposed trade. Approvals by the CCO or his/her designee are only valid on the day they are given. Approvals for securities that only trade in the overnight market are assumed to be given for that night’s trading session.

RESTRICTED LIST AND OTHER TRADING CONSIDERATIONS

Access Persons and Affiliated Persons may not trade securities that are on the Firm’s Restricted List, and may only trade securities that are also being traded for clients (or have been traded within the previous business day) under the following de minimis conditions, which shall apply to each Beneficial Ownership Account:

Up to half of one percent (0.5%) shares per day of a security’s 30-day Average Daily Trading Volume (ADTV), calculated as of the last business day of the prior month, or such other available date.

The amount is no greater than $10,000 par value of a debt obligation instrument whose issuer has a market capitalization of at least $2 billion, or $20,000 par value of an issuer with a market capitalization of at least $5 billion, at the time of investment;

Purchases and sales of no greater than 500 shares of a closed-end fund that is not managed or sub-advised by the Firm.

EXHIBIT E

Reportable Funds

As of December 31, 2015, the list below contains all Reportable Funds, as referenced in the Code of Ethics:

Non-Kinetics Funds

EQ Advisors Trust AXA/Horizon Small Cap Value Portfolio

Liberty Street Horizon Spin-off and Corporate Restructuring Fund

Virtus Wealth Masters Fund

Virtus International Wealth Masters Fund

Kinetics Funds

Kinetics Global Fund

Kinetics Internet Fund

Kinetics Market Opportunities Fund

Kinetics Medical Fund

Kinetics Multi-Disciplinary Income Fund

Kinetics Paradigm Fund

Kinetics Small Cap Opportunities Fund

Kinetics Alternative Income Fund

EXHIBIT F

Political Contribution (Pay-to-Play) Policies

Introduction

On July 1, 2011, the Securities and Exchange Commission (“SEC”) adopted Rule 206(4)-5 (the “Rule”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) addressing “pay to play” practices by registered investment advisers. Pay to play practices involve payments, including political contributions, made or solicited by investment managers to government officials or candidates who may directly or indirectly influence the awarding of advisory contracts for state and local government entities including, for example, public pension plans or other government funds. As registered investment advisers subject to the Rule, Horizon Asset Management LLC, Kinetics Asset Management LLC and Kinetics Advisers, LLC (collectively the “Firms”) are required to establish and implement internal policies reasonably designed to ensure compliance under the Rule. Accordingly the Firms have adopted these policies (the “Political Contribution Policies”) to adhere to the Rule and the spirit thereof.

Definitions

(1)

“ Contributions ” are defined as any 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 of inaugural expenses incurred by a successful candidate for state or local office.

(2)

“ Covered Associates ” means, as it relates to the Firms, any:

General Partner, managing member, executive officer (or President or other person in charge of a business unit, division or other function that performs a policy-making function) or other person with similar status or function;

Employee who solicits a government entity (and any such person who supervises, directly or indirectly, such employee); and

Political Action Committees (“PACs”) that are controlled by the investment adviser.

(3)

“ Covered Investment Pool ” is defined as:

A registered investment company that is an investment option of a plan or program of a Government Entity; or

Any company that would be an investment company as defined in section 3(a) of the Investment Company Act of 1940 (the “Investment Company Act”) but for the exclusion from the definition of “investment company” under Sections 3(c)-1, 3(c)-7 or 3(c)-11 of the Investment Company Act.

(4)

“ Government Entity ” includes all state and local governments, their agencies and instrumentalities, and all public pension plans and other collective government funds.

(5)

“ Official ” includes incumbents, candidates or successful candidates for elective office of a government entity if the office, or a person that the office has authority to appoint, is directly or indirectly responsible for, or can influence the outcome of, the hiring of a fund manager or an investment in an underlying fund.

Two-Year “Time-Out” for Contributions

Under the Rule, the Firms shall not provide advisory services for compensation to a Government Entity for two years after the Firms or a Covered Associate makes a Contribution to an Official of such Government Entity. In accordance with the Rule, the Firms must also determine whether any Covered Associates, during the last two years ³ , gave Contributions to Officials of Government Entity clients.

The Rule contains a de minimis exception that allows Covered Associates of the Firms to contribute: (i) up to $350 to an Official per election (primary and general elections count separately) if the Covered Associate was entitled to vote for the Official at the time of the Contribution, and (ii) up to $150 to an Official per election if the Covered Associate was not entitled to vote for the Official at the time of the Contribution. Contributions under this de minimis exception would not trigger the two-year time-out under the Rule.

Reporting by Covered Associates

It is the policy of the Firms that Covered Associates pre-clear any Contributions to Officials of a Government Entity which do not meet the de minimis exceptions described in Section C through the Firm’s web-based document retention and compliance system, MyCompliance Office, or through any other means as may be deemed acceptable by the Chief Compliance Officer (“CCO”).

Covered Associates shall be required to provide details on the following items:

(i)

The date and dollar amount of the proposed contribution;

(ii)

Name of the Candidate, Government Entity or PAC as applicable;

(iii)

Whether the Covered Associate is eligible to vote for the Candidate; and

(iv)

Whether the Covered Associate is aware of any previous, existing or potential business relationship between the Candidate, Government Entity or PAC and the Firms.

Once the Covered Associate receives written approval from the CCO, he or she may proceed with the political contribution within a reasonable time frame thereafter. If the CCO denies the contribution, the Covered Associate shall not engage in the contribution.

³ The Rule requires a two-year look-back for all covered associates who solicit clients, but only a six month look-back for “new” covered associates who do not solicit clients. The “look-back” period will follow covered associates that change investment advisers such that a prohibited contribution by a covered associate will result in a “time-out” for the covered associate’s new firm for the remainder of the two-year or six-month period, depending on whether the covered associate solicits clients for the new firm.

New hires will be required to disclose political contribution activity, which includes the details above, that were made during the previous six-month period and which were above the de minimis exceptions described under Section C.

Ban on using Third Parties to Solicit Government Business

The Firms or a Covered Associate shall not pay (or agree to pay), directly or indirectly, any person to solicit a Government Entity for advisory services on behalf of the Firms unless the person is: (i) a registered investment adviser that has not made, coordinated or solicited a Contribution within the last two years that would violate the Rule, (ii) a broker-dealer registered with the Financial Industry Regulatory Authority (“FINRA”), or (iii) an executive officer, general partner, managing member (or person with similar status or function), or employee of the Firms.

Ban on Soliciting and Coordinating Contributions and Payments

The Firms or a Covered Associate shall not coordinate or solicit a person or political action committee (“PAC”) to: (i) contribute to an Official of a Government Entity to which the Firms provide or seek to provide advisory services, or (ii) make a payment to a political party of a state or locality in which the Firms provide or seek to provide advisory services to a Government Entity.

Application to pooled investment vehicles

Under the Rule, the Firms will be held to the same standards and prohibitions set forth in these Political Contribution Policies whether a Government Entity is a direct prospective client of the Firms or whether the Government Entity is a prospective investor in a Covered Investment Pool.

Record Keeping and Training

To the extent the Firms provide investment advisory services to a Government Entity or a Covered Investment Pool in which a Government Entity is an investor, the Firms shall collect and maintain the below information, which shall be maintained in the Firms’ MyCompliance Office application, or in another format as may be permitted by the CCO:

(i)

The names, titles and business and resident addresses of all Covered Associated of the Firms;

(ii)

All Government Entities to which the Firms provide or have provided investment advisory services (directly or indirectly through a Covered Investment Pool) in the last five years;

(iii)

All direct and indirect Contributions made by the Firms or Covered Associates to an Official of a Government Entity or direct and indirect payments made to a political party or PAC; and

(iv)

The Name and business address of each regulated person to which the Firms agree to provide direct or indirect payment to solicit a Government Entity.

The Firms shall conduct reviews with Covered Associates that are departing the Firms to ensure that political contribution activities do not trigger a time-out. Moreover, the Firms shall perform employee training on a

periodic basis for Covered Associates and new hires that fall within the definition of a Covered Associate relating to the requirements under the Rule and the process for reporting. To the extent certain Covered Associates are actively engaged in soliciting Officials and Government Entities, the Firms may obtain written assurances from such Covered Associates sufficient to ensure political contribution activities do not result in a time-out or other breach under the Rule.

Addressing a Potential Time-Out

To the extent a time-out under the Rule is imposed against the Firms, the Firms shall determine whether to seek SEC exemptive relief, during which time, the Firms shall establish an escrow account for any fees that would have been owed by a Government Entity, but for which may not be permitted due to political contributions that were made by Covered Associates or the Firms.

Exhibit p.6

KLEINWORT BENSON INVESTORS

CODE OF ETHICS

Department:		Compliance and Risk
Policy name:		KBI Code of Ethics
Applicable to:		KBI Dublin Ltd & KBI International Ltd
Date:		Nov 2015
Reviewed/Updated by:		Aisling Carvill
Approved by:		Derval Murray
Version:		4
Summary of Changes:		Updated to reflect changes to internal process & limits for gifts given and for SEC Guidance on personal discretionary accounts
Executive Committee Approval Date:		26/11/15

While affirming its confidence in the integrity and good faith of all its employees, officers and directors, Kleinwort Benson Investors International Ltd and its direct parent, Kleinwort Benson Investors Dublin Ltd (“KBI Dublin”) (collectively the “Adviser”) recognizes that knowledge of present or future portfolio transactions and, in certain instances, the power to influence portfolio transactions made by or for its Advisory Clients which may be possessed by certain of its personnel could place such individuals, if they engage in personal transactions in Securities which are eligible for investment by Advisory Clients, in a position where their personal interest may conflict with the interests of the Advisory Clients.

In view of the foregoing, the Adviser’s Code of Conduct, the provisions of Rule 17j-1(b)(1) as amended under the Investment Company Act of 1940 (the “1940 Act”) and Section 204A of the Investment Advisers Act 1940 as amended the Adviser has determined to adopt this Code of Ethics to set forth standards of conduct expected of its Advisory personnel, specify and prohibit certain types of transactions deemed to create conflicts of interest (or at least the potential for or the appearance of such a conflict), and to establish reporting requirements and enforcement procedures.

In addition Kleinwort Benson Investors Dublin Ltd and its subsidiaries are subject to supervision by a number of regulatory bodies in the EU in addition to its home regulator the Central Bank of Ireland. These regulators require that an explicit Code of Conduct covering personal share dealing & gifts must be made available to all executive directors and members of staff.

At all times, the Adviser and its personnel must comply with the spirit and the letter of the applicable securities laws and the rules governing the capital markets. The CCO administers this Code of Ethics and all questions regarding the provisions contained herein should be directed to the CCO. Employees must cooperate to the fullest extent reasonably requested by the CCO to enable (i) the Adviser to comply with all applicable securities laws and (ii) the CCO to discharge her duties as outlined in this Code of Ethics and other written policies and procedures.

STATEMENT OF GENERAL PRINCIPLES

In recognition of the trust and confidence placed in the Adviser by its Advisory Clients and to give effect to the Adviser’s belief that its operations should be directed to the benefit of its Advisory Clients, the Adviser hereby adopts the following general principles to guide the actions of its employees, officers and directors:

(1)

The interests of the Advisory Clients are paramount, and all of the Adviser’s personnel must conduct themselves and their operations to give maximum effect to this tenet by assiduously placing the interests of the Advisory Clients before their own.

(2)

All of the Adviser’s personnel are also required to act in the best interests of the Adviser’s Advisory Clients especially regarding execution and brokerage services. In this regard the Adviser’s personnel are reminded to adhere to the

Adviser’s policies and procedures regarding brokerage, including allocation, best execution, soft dollars and directed brokerage.

(3)

All personal transactions in Securities by the Adviser’s personnel must be accomplished so as to avoid even the appearance of a conflict of interest on the part of such personnel with the interest of any Advisory Client.

(4)

All of the Adviser’s personnel must avoid actions or activities that allow (or appear to allow) a person to profit or benefit from his or her position with respect to an Advisory Client, or that otherwise bring into question the person’s independence or judgment.

(5)

All information about the Adviser’s Clients (including former Clients) must be kept in strict confidence, including the Client’s identity (unless the Client consents), the Client’s financial circumstances, the Client’s Security holdings and advice furnished to the Client by the Adviser.

(6)

Independence in the investment decision making process is paramount.

II.

DEFINITIONS

(1)

“Access person” for an Investment Adviser, whose primary business is the business of providing investment advice, includes any “Supervised Person” who:

Has access to nonpublic information regarding any Clients’ purchase or sale of Securities, or nonpublic information regarding portfolio holdings of any fund the Adviser or its control affiliates manage; or

Is involved in making Securities recommendations to Clients or has access to such recommendations that are nonpublic.

If the Adviser’s primary business in providing investment advice, all of the Adviser’s executive directors, officers, and partners are presumed to be Access Persons.

“A ccess Persons for Mutual Funds” means any officer, director, general partner or Advisory Person of the Adviser who, with respect to the Funds:

(i)

Makes any recommendation or participates in the determination of which recommendation will be made; or

(ii)

Whose principal function or duties relate to the determination of which recommendation will be made or who, in connection with his or her

duties, obtains any information concerning recommendations on Securities made by the Adviser to the Fund.

The Adviser’ s “Access Persons” shall include: (a) all executive directors of the Adviser, (b) Asset Managers, (c) Researchers, (d) Middle Office Personnel, (e) Information Technology personnel who have access to PORTIA and “”OMS trading system and/or any such other system that holds pre-trade information, (f) Compliance Unit personnel, and (g) any other managers or individuals whom the Review Officer determines to be Access Persons from time to time. A list of all such Access Persons is available from the Adviser on request and includes Clients, regulatory authorities and any other entity/person that the CCO deems it appropriate to provide such information.

(2)

“Advisory Client” means any client or fund to which the Adviser provides investment advice .

(3)

“Advisory Person” means any employee of the Adviser who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of Securities by an Advisory Client, or whose functions relate to the purchase or sale of Securities by an Advisory Client.

All Advisory Persons are Access Persons .

(4)

“Beneficial Ownership” of a Security is to be determined in the same manner as it is for purposes of Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1(a)(2) there under. This means that a person should generally consider him or herself the beneficial owner of any Securities in which he or she has a direct or indirect pecuniary interest. In addition, a person should consider him or herself the beneficial owner of Securities held by his or her spouse, minor children, a relative who shares his or her home, or other persons by reason of any contract, arrangement, understanding or relationship that provides him or her with sole or shared voting or investment power.

(5)

“Control” shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

(6)

“Fund” means an investment company registered under the 1940 Act for which the Kleinwort Benson Investors International Ltd acts as adviser or sub-adviser.

(7)

“High quality short-term debt instrument” means any instrument that has a maturity at issuance of 365 days or less and that is rated in one of the two highest rating categories by a nationally recognized statistical rating organization.

(8)

“Investment Personnel” means a) any employee of the Adviser (or of any company in a control relationship to the Adviser ) who, in connection with his or her regular functions or duties , makes or participates in making recommendations

regarding the purchase or sale of Securities by the Advisory Client (b) any employee who helps execute and/or implement the asset manager’s decision and (c) any natural person who controls the Adviser and who obtains infor mation concerning recommendations made to an Advisory Client regarding the purchase or sale of Securities by such Advisory Client .

(9)

“Initial public offering” (i.e . IPO), means an offering of Securities registered under the Securities Act of 1933, the issuer of which, immediately before registration, was not subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934.

(10)

“ Limited offering” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2), Section 4(6), Rule 504, Rule 505 or Rule 506.

(11)

A “personal securities account” means any account in which any securities are held for the person’s direct or indirect benefit.

(12)

“Purchase or sale of a Security” includes, among other things, the writing of an option to purchase or sell a Security.

“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. Also included is any regulated instrument under MiFID (as defined in Schedule 1 Part 3 of European Communities (Markets in Financial Instruments) Regulations 2007 ¹ ) and the Investor Intermediaries Act 1995 ² such as units in collective investment schemes, shares in an investment company, units in a unit trust or units in a common contractual fund, capital contributions to an investment limited partnership, dealings in stock, shares, loan stock, warrants, rights, options, spread betting, traded options, futures contracts, money market instruments, financial contracts for difference, swaps, forward rate agreements, tracker bonds, hybrid instruments, repurchase and reverse repurchase agreements, regular savings plans operated by way of an investment trust In addition, derivative contracts relating to:

securities, currencies, interest rates or yields, financial indices

commodities

¹ http://www.finance.gov.ie/documents/publications/statutoryinstruments/SINo60of2007.pdf

² http://www.irishstatutebook.ie/1995/en/act/pub/0011/print.html

climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics if the contracts must be settled in cash

derivative instruments for the transfer of credit risk.

(13)

A “Security held or to be acquired” by an Advisory Client means (a) any Security which, within the most recent 15 days, (i) is or has been held by an Advisory Client or (ii) is being or has been considered by the Adviser for purchase by an Advisory Client and (b) any option to purchase or sell, and any Security convertible into or exchangeable for, a Security.

(14)

A Security is “being purchased or sold” by an Advisory Client from the time when a purchase or sale program has been communicated to the person who places the buy and sell order for an Advisory Client until the time when such program has been fully completed or terminated.

(15)

“Supervised Person” includes:

Directors, officers and partners of the Adviser (or other persons occupying a similar status or performing similar functions)

Employees of the Adviser; and

Any other person who provides advice on behalf of the Adviser and is subject to the Adviser’s supervision and control

The Adviser also has the discretion to include some or all of the following categories of persons as “Supervised Persons”:

Temporary workers

Consultants

Independent Contractors

Certain employees of affiliates; or

Particular persons designated by the Chief Compliance Officer

(16)

The designated “Review Officer” shall be the Chief Compliance Officer of the Adviser.

III.

GENERAL PROHIBITION AGAINST INSIDER-DEALING, FRAUD, DECEIT AND MANIPULATION

(1)

No Access Person shall:

(a)

Engage in any manipulative practice with respect to Securities, including price manipulation;

(b)

Engage in any trading, either personally or on behalf of others, while in possession of material, non public information (including the following):

Preliminary profit announcements for a year, half year of other period.

Dividends and other distributions to shareholders recommended or declared or resolved to be paid and any decision to pass any dividend or interest payment.

Proposed changes in capital, structure or redemption of securities.

Material acquisitions or realisation of assets as defined by the Stock Exchange.

Matters requiring disclosure to the Stock Exchange under the provisions of the City Code on Takeovers and Mergers.

Any changes in the Directorate other than normal retirements and replacements.

Proposed changes in the general character or nature of the business.

Matters requiring to be notified to a company (interests of 5% or more of the nominal value of any class of voting capital) or any variation thereof.

Changes in the status of a company under the close company provisions (as defined by the Irish Revenue) of the various tax acts as amended.

(c)

Engage in communicating any material non-public information to others in violation of the law. ”Material non-public information” relates not only to issuers but also to the Adviser’s Client, the Securities investments made by the Adviser on behalf of the Client, information about contemplated Securities transactions, or information regarding the Adviser’s trading strategies except as required to effect Securities transactions on behalf of the Client or for regulatory and/or other legitimate business purposes.

Where an Access Person becomes an “insider” regarding an issuer s/he must report the matter to the Review Officer where it will be dealt with in line with the Adviser’s procedures and the issuer will become a “restricted issuer” until such time that the Adviser is no longer an insider.

(2)

No Access Person shall, in connection with the purchase or sale, directly or indirectly, by such person of a Security held or to be acquired by any Advisory Client:

(a)

Employ any device, scheme or artifice to defraud such Advisory Client;

(b)

Make to such Advisory Client any untrue statement of a material fact or omit to state to such Advisory Client a material fact necessary in order to make the statements made;

(c)

Engage in any act, practice or course of business which would operate as a fraud or deceit upon such Advisory Client; or

(d)

Engage in any manipulative practice with respect to such Advisory Client.

If an Access Person engages in any of the practices listed above or any practices associated with these practices the Adviser will commence enforcing its disciplinary procedures as set out in its HR policies.

IV.

PROHIBITED PURCHASES AND SALES OF SECURITIES

(1)

Except as provided in Sections V(3) and V(4) of this Code of Ethics , no Access Person shall purchase or sell, directly or indirectly, any Security in which he or she had or by reason of such transaction acquired any Beneficial Ownership, within 24 hours (seven (7) working days, in the case of Investment Personnel – such persons are determined by the CCO and the individuals are informed accordingly) before or after the time that the same (or a related) Security is being purchased or sold by any Advisory Client. The Review Officer also performs a review of all personal transactions on a post trade basis and there is a separate documented procedure for this. Subject to determination by the Review Officer, such Access Person may be required to sell any Security and to disgorge any profits realized on trades within these proscribed periods. The Review Officer’s determination shall be made in writing and a record of such shall be maintained in accordance with Section X(7) of this Code of Ethics. In the event of the absence of the Review Officer, a member of the Adviser’s Compliance team will make such determination.

(2)

No Access Person (including Investment Personnel) may acquire Securities, whether acquired directly or indirectly (through Beneficial Ownership), as part of an initial public offering without obtaining the written approval of the designated Review Officer before either directly or indirectly acquiring a Beneficial Ownership in such Securities.

(3)

No Access Person shall purchase a Security, whether purchased directly or indirectly (through Beneficial Ownership), offered in a limited offering (e.g. private placement) without the specific, prior written approval of the Adviser’s designated Review Officer. Where an Access Person has been authorized to purchase a Security in a limited offering they will be required to disclose that investment when they play a part in any Client’s subsequent consideration of an investment in the issuer and in such circumstances the decision to purchase Securities of the issuer for the Client be made either by another employee or, at a minimum, should be subject to an independent review by investment personnel with no personal interest in the issuer.

(4)

No Access Person shall profit from the purchase and sale, or sale and purchase, of the same (or equivalent) Security, whether held directly or indirectly (through Beneficial Ownership), within a 60-day period . Profit due to any such short-term trades will be disgorged. Exceptions to this policy are permitted only with the written approval of the Review Officer of the Adviser and then only in an emergency or extraordinary circumstances.

(5)

No Access Person shall make speculative purchases or sales of securities or currencies to the detriment of the Company’s good name or for which insufficient funds are available. In particular, the purchase or sale of shares where settlement

depends on a subsequent sale or purchase, within the same account, period must be avoided.

(6)

Additional Rules for Dealing in Options

An Access Person may only undertake options dealings, whatever the underlying asset, in accordance with the following addition rules:

Uncovered calls – the writing of uncovered calls is not permitted.

Uncovered puts – the writing of uncovered puts is not permitted.

Covered calls – covered calls may be written where one of the following conditions is satisfied:

Previously or at the same time a long call position is established which covers the short call. This means that the exercise price of the long call must be the same or lower than that of the short call and the expiry date of the long call must be at least as long as that of the short call. (It is not permissible to close out the long position prior to the closing of the short call position).

The underlying security is held by the individual, and pledged as collateral to a recognized clearing house. It is not permissible to sell the underlying security prior to closing of the short call position.

Covered puts – covered puts may be written when the following condition is satisfied:

Previously or at the same time a long put position is established which covers the short put in the following manner:

The exercise price of the long put must be the same or higher than that of the short put and the expiry date of the long put must be at least as long as that of the short put. It is not permissible to close out the long position prior to the closing of the short put option.

Buying of puts and calls will be permitted provided the size of the financial commitment is suitable with regard to the individual’s financial situation.

PRE-CLEARANCE OF TRANSACTIONS

(1)

Except as provided in Section V(3), each Access Person must pre-clear each proposed transaction in securities with the Review Officer prior to proceeding with the transaction. Where an Access Person undertakes dealings on behalf of third parties or in nominee names outside the course of their normal duties, prior written approval must be sought also. No transaction in Securities shall be effected without the prior written approval of the Review Officer. Pre-clearance is obtained by filling out the ‘Pre-Clearance Request Form’ available to all access persons on the PRISM (Internal website). The completed form should be given in person to the Review Officer who will carry out the necessary checks to determine whether or not to grant approval for the personal transaction. Pre-clearance trading authorisation is valid for 48 hours only. In determining whether to grant such clearance, the Review Officer shall abide by Section V(4), below.

(2)

In determining whether to grant approval for the purchase of a Security offered in a limited offering , the Review Officer shall take into account, among other factors, whether the investment opportunity should be reserved for an Advisory Client, and whether the opportunity is being offered to the Access Person by virtue of his or her position with the Adviser.

(3)

The pre-clearance requirements of Section V(1) shall not apply to the following transactions:

(A)

Purchases or sales over which the Access Person has no direct or indirect influence or control*.

(B)

Purchases or sales which are non-volitional on the part of the Access Person, including purchases or sales upon exercise of puts or calls written by the Access Person and sales from a margin account pursuant to a bona fide margin call.

(C)

Purchases that are effected as part of an automatic dividend reinvestment plan.

(D)

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.

(E)

Acquisitions of securities through stock dividends, stock splits, reverse stock splits, mergers, consolidations, spin-offs, and other similar corporate reorganisations or distributions generally applicable to all holders of the same class of Securities;

(F)

Acquisitions of Securities through gifts or bequests; and

(G)

Transactions in Securities of open-end mutual funds, other than:

shares of all investment companies/funds advised by the Adviser or its affiliates or sub-advised by the Adviser

Exchange Traded Funds

* Please refer to Section VIII for definition of ‘no direct or indirect influence or control’.

(4)

The following transactions generally would be expected to receive pre- clearance from the Review Officer absent extenuating circumstances:

(A)

Transactions which appear upon reasonable inquiry and investigation to present no reasonable likelihood of harm to any Advisory Client and which are otherwise in accordance with Rule 17j-1 and Section 204. Such transactions would normally include purchases or sales of up to 1,000 shares of a Security, which is being considered for purchase or sale by an Advisory Client (but not then being purchased or sold) if the issuer has a market capitalization of over $1 billion. Permission to purchase Securities described above is not assumed or automatic, but rather may be granted by the Review Officer after extensive review of the facts surrounding such transaction and the effect such transaction would have on the shareholders of the Fund and/or Advisory Clients.

(B)

Purchases or sales of Securities which are not eligible for purchase or sale by any Advisory Client as determined by reference to the 1940 Act, the Investment Advisers Act and regulations there under, or any relevant “blue sky” laws, the investment objectives policies and investment restrictions of any Advisory Client or undertakings made to regulatory authorities.

(C)

Transactions that the Review Officer, or other appropriate officers of the Adviser, as a group and after consideration of all the facts and circumstances, determine to be in accordance with Section III and to present no reasonable likelihood of harm to an Advisory Client.

(5)

The Compliance Department of the Adviser will maintain pre-clearance records for 6 years

VI.

ADDITIONAL RESTRICTIONS AND REQUIREMENTS

(1)

Access Persons should not accept inappropriate gifts, favours, entertainment, special accommodation, or other things of material value that could influence their decision-making or make them feel beholden to a person or a firm. Similarly Access Persons should not offer gifts, favours, 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 Adviser or the Access Person.

This is particularly the case where the Adviser in managing state or municipal pension funds as certain laws or rules in various states may prohibit or limit gifts or entertainment extended to public officials. Access Persons are prohibited from making political contributions for the purposes of obtaining or retaining advisory contracts with government entities.

No Access Person may accept any gift and/or entertainment packages of more than €100.00 or equivalent from any person or entity that it does business with or proposes to do business with on behalf of the Adviser or its direct parent, Kleinwort Benson Investors Dublin Ltd, or an Advisory Client, without prior approval by the Review Officer and their supervising director. Approval should be sought by sending an email containing the following information; nature of gift/entertainment, approximate value, donor & recipient(s). The Review Officer/Supervising Director reserves the right to approve or deny such gifts/entertainment packages.

All gifts/entertainment packages of less than €100.00 or equivalent received by any Access Person from any person or entity that it does business with or proposes to do business with on behalf of the Adviser or its direct parent, Kleinwort Benson Investors Dublin Ltd, or an Advisory Client must be notified to the Review Officer and their supervising Director . Such notification should be made via e-mail and shall be logged by the Review Officer in the Gifts Register.

All gifts/entertainment packages of more than €50 or equivalent offered by any Access Person to any person or entity that it does business with or proposes to do business with on behalf of the Adviser or its direct parent, Kleinwort Benson Investors Dublin Ltd, or an Advisory Client must be recorded in the relevant section of CRM- Interactions under one of the following heading types;

Conferences

Lunch/Dinner/Transport (e.g. airport transfers etc.)

Entertainment e.g. golf, concert, match tickets etc.

Sponsorship e.g. golf sponsorship. Charity events (no KBI attendees)

Gifts

The gift/entertainment should be tagged to the relevant client or clients by the organizer and the description and the value must be recorded in the ‘title’ of the interaction. Such records shall be tracked and reviewed by the Review Officer as part of the Compliance & Risk Unit’s on-going monitoring programme.

No Access Person may offer any gift and/or entertainment packages of more than €500.00 or equivalent to any person or entity that it does business with or proposes to do business with on behalf of the Adviser or its direct parent,

Kleinwort Benson Investors Dublin Ltd, or an Advisory Client, without prior advance approval by their supervising Director and the Review Officer. Approval should be sought by sending an email containing the following information; nature of gift/entertainment, approximate value, donor & recipient(s). Entertainment includes lunches, dinners, transport, gifts, sporting/other tickets, sponsorship & conferences etc.

No business related travel and or accommodation (regardless of value) may be accepted or offered without pre approval from the supervising director and the Review Officer e.g. offering to cover the travel/accommodation costs of a prospective client, accepting travel/accommodation from a broker along with a match/concert ticket etc.

No Access Person may give or accept cash gifts or cash equivalents to or from a Client, prospective Client, or any entity that it does business with or on behalf of the Adviser, or its direct patent.

Occasional participation in lunches, dinners, sporting activities or similar gatherings conducted for business purposes are not prohibited. However where the Access Person would feel compromised by accepting such invitations s/he is advised to refuse the offer or consult with the Review Officer if in any doubt.

The Adviser and its Access Persons are prohibited from giving gifts or providing meals or entertainment for business purposes that would appear lavish or extravagant in nature.

Policy at Christmas time: All gifts received at Christmas time e.g. hampers, cases or bottles of wine etc. will be centrally pooled and raffled among staff prior to Christmas. All gifts given during Christmas time to Advisory Clients, investors, or any persons or entities with whom the Adviser does business must be reported to the Reporting Officer as described above.

Where you are in doubt about any gift and/or entertainment being offered or received you should contact the Review Officer or his/her designate immediately.

(2)

Special restrictions will apply to all personal dealings in BHF Kleinwort Benson Group securities. At set periods during the year ‘Closed Periods’ will exist during which time the purchase or sale of BHF Kleinwort Benson Group securities is prohibited. During ‘Open Periods’ the purchase or sale of BHF Kleinwort Benson Group securities will be permitted subject to the Code of Ethics Personal Share Dealing rules. Access persons are reminded that they must not at any time deal in securities whilst in the possession of Inside Information. Additionally, where Access Persons make purchases of BHF Kleinwort Benson Group securities they will be required to hold such securities for a minimum of 6 months.

(4)

No Investment Personnel shall accept a position as a director, trustee or general partner of a publicly-traded company or partnership unless the acceptance of such position has been approved by the Review Officer and is consistent with the interests of all Advisory Clients.

(5)

In general, all Access Persons are reminded that they must disclose any personal interest that might present a conflict of interest or harm the reputation of the Adviser or its affiliates.

(6)

All Access Persons are reminded that all oral and written statements, including those made to Clients, prospective clients, their representatives, or the media must be professional, accurate, balanced and not misleading in any way. All written marketing or promotional material must be approved by the Review Officer or his/her designate, in line with procedure, prior to being issued.

(7)

Non-public information about the Adviser’s investment strategies, trading and Advisory Client holdings may not be shared with third parties except as is necessary to implement investment decisions and conduct other legitimate business. Access Persons must never disclose proposed or pending trades or other sensitive information to any third party without the prior approval of the CCO. Securities laws may prohibit the dissemination of such information and doing so may be considered a violation of the fiduciary duty that Adviser owes to its Advisory Clients.

With respect to Adviser’s unregistered fund clients (e.g., Kleinwort Benson Investors Investment Trust & Kleinwort Benson Investors Delaware Statutory Trust), Access Persons may disclose information about the funds to investors and certain other third-parties (e.g., fund service providers investor representatives) that have a legitimate business need to know such information. Such information should generally be limited to the following:

Fund holdings information contained in marketing materials should be at least thirty days old;

Discussions of specific, current fund holdings should be limited to one-on-one conversations with existing investors or their representatives;

Discussions of pending transactions are strictly prohibited; and

All investors should have equal access to information about a fund’s holdings and activities. Any questions regarding this policy should be addressed to the CCO.

VII.

REPORTING AND COMPLIANCE OBLIGATIONS

(1)

The Review Officer shall create and thereafter maintain a list of all Access Persons.

(2)

Each Access Person must provide duplicate copies of their account statement (on an annual basis) and brokerage confirmations (post trade contract notes) promptly to the Review Officer.

(3)

As provided in Section VII(5) below, each Access Person must provide to the Review Officer a complete listing of all Securities owned by such person as of the later of adoption of this Code of Ethics or 10 days after becoming an Access Person. Each Access Person must disclose all memberships of Investment Clubs to the Compliance and Risk Unit. Where they do not participate in decision making, the transaction does not need to be approved but should be reported in the Access Person’s Annual Holdings Report. Each Access Person must submit a list of Securities holdings to the Review Officer within 45 days after the end of each calendar year.

(4)

Every Access Person shall certify annually that he or she:

(A)

Has read and understands this Code of Ethics ;

(B)

Recognizes that he or she is subject to this Code of Ethics;

(C)

Has complied with this Code of Ethics; and

(D)

Has disclosed and reported all personal Securities transactions and personal securities accounts required to be disclosed or reported by this Code of Ethics .

(5)

Reports.

(A)

Initial Holdings Reports : Every Access Person must provide to the Review Officer a complete listing of all Securities owned by such person, including the title, the exchange ticker or SEDOL number, the type of Security, the number of shares and principal amount, as well as all personal securities accounts, including the name of the broker, dealer or bank at which such account is maintained. Personal securities accounts over which the Access Person has no direct or indirect influence or control should also be included. Such accounts could include a discretionary investment account managed by a third party e.g. stockbroker account, a trust in which the Access Person is a beneficiary and has no knowledge of the holdings etc. (hereafter referred to as “accounts with no direct or indirect influence or control”). Such reports need not show transactions effected for, or Securities held in, personal securities accounts over which the person has no direct or indirect influence or control and which they

have certified to be the case. All information must be provided within ten days of the later of the adoption of this Code of Ethics or such person’s becoming an Access Person. A form of Initial Holdings Report is attached as Appendix I.

(B)

Annual Holdings Reports : On an annual basis, each Access Person must submit to the Review Officer a listing of all Securities beneficially owned by such person, including the title, number of shares and principal amount, as well as all personal securities accounts held, including the name of the broker, dealer or bank at which such account is maintained. This report must also include details of any accounts held where the Access Person has no direct or indirect influence or control. In relation to such accounts a certification must be provided by the Access Person to confirm that they have no direct influence or control over such accounts. Such reports need not show transactions effected for, or Securities held in, personal securities accounts over which the person has no direct or indirect influence or control and which they have certified to be the case. The list must be current as of a date no more than 45 days before the report is submitted and must be received within 45 days of the end of the calendar year. A form of Annual Holdings Report is attached as Appendix II.

(C)

Quarterly Reports :

Each Access Person shall report all transactions in Securities in which the person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership. Reports shall be filed with the Review Officer quarterly. Each Access Person must also report any personal securities accounts established during the quarter. This report must also include details of any accounts established during the quarter where the Access Person has no direct or indirect influence or control. Such reports need not show transactions effected for, or Securities held in, personal securities accounts over which the person has no direct or indirect influence or control and which they have certified that this is the case. The Review Officer shall submit confidential quarterly reports with respect to his or her own personal Securities transactions and personal securities accounts established to an officer designated to receive his or her reports, who shall act in all respects in the manner prescribed herein for the Review Officer.

Every quarterly report shall be made no later than 30 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information (a form of Quarterly Report Form is attached as Appendix III):

(a)

The date of the transaction, the title, the exchange ticker or SEDOL no, the interest rate and maturity (if applicable), the number of shares and principal amount of each Security involved;

(b)

The nature of the transaction (i.e . purchase, sale or any other type of acquisition or disposition);

(c)

The price of the Security at which the transaction was effected;

(d)

The name of the broker, dealer or bank with or through which the transaction was effected;

(e)

The date the report is submitted by the Access Person; and

(f)

With respect to any personal securities account established during the quarter, the broker, dealer or bank with whom the account was established, and the date the account was established.

In the event the Access Person has no reportable items during the quarter, the report should so note and be returned signed and dated.

(D)

Other than Annual Holdings Report: Following a period of prolonged leave each Access Person must provide to the Review Officer a complete list of all Securities owned by such person, including the title, number of shares and principal amount, as well as all personal securities accounts, including the name of the broker, dealer or bank at which such account is maintained .

(E)

Any reports covered by this Code of Ethics may contain a statement that the report shall not be construed as an admission by the person making such report that he has any direct or indirect beneficial ownership in the Security to which the report relates.

(F)

Every Access Person shall report the name of any publicly-traded company (or any company that such Access Person is aware of is anticipating a public offering of its equity Securities) and the total number of its shares beneficially owned by him or her if such total ownership is more than 1% of the company’s outstanding shares.

(G)

Every Access Person who owns Securities acquired in a limited offering shall disclose such ownership to the Review Officer if such person is involved in any subsequent consideration of an investment in the issuer by

an Advisory Client. The Adviser’s decision to recommend the purchase of such issuer’s Securities to an Advisory Client will be subject to independent review by Investment Personnel with no personal interest in the issuer.

(6)

Reporting Violations of the Code of Ethics

All Access Persons are required to report violations of the Adviser’s Code of Ethics promptly to the Review Officer or other appropriate personnel as designated in this Code, provided the Review Officer also receives reports of all violations. The violations that should be reported include noncompliance with applicable laws, rules and regulations, fraud or illegal acts involving any aspect of the Adviser’s business, material misstatements in regulatory filings, internal books and records, Clients reports and, activity that is harmful to Clients, including fund shareholders and deviations from required controls and procedures that safeguard Clients and the Adviser. This list is not exhaustive.

Such reports will be treated confidentially to the extent permitted by law and investigated promptly and appropriately. Retaliation against an individual who reports a violation is prohibited and constitutes a further violation of the Code.

VIII .

ACCOUNTS OVER WHICH ACCESS PERSONS HAVE NO DIRECT OR INDIRECT INFLUENCE OR CONTROL

Rule 204A-1 of the Investment Advisers Act 1940 allows for a “reporting exception” from some of the above reporting and pre clearance requirements for personal security accounts over which an Access Person has ‘no direct or indirect influence or control’.

To avail of this exception it is necessary for an Access Person to certify that they have no influence or control over the relevant account(s).

An Access Person is deemed to have “no direct or indirect influence or control” over the relevant account(s) if they can definitively answer ‘No’ to all of the following questions on an on-going basis:

Did you suggest purchases or sales of investments to the third-party discretionary stockbroker or trustee for this account during x time period?

Did you direct purchases or sales of investments for this account during x time period, or;

Did you consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in the account during x time period?

If an Access Person cannot answer ‘No’ to all of the above questions, at all times during the existence of the account, then such account(s) do not qualify for the reporting exception and are therefore subject to the full reporting and pre-clearance of transactions requirements as set out in this policy.

Any doubt or queries in relation to any individual circumstances should be raised with the Review Officer.

Where an Access Person holds such an account the Review Officer is obliged to implement additional controls to establish a reasonable belief that an Access Person has no direct or indirect influence or control over the trust or account and can therefore rely on the exception.

To monitor the nature of such accounts and determine whether or not an Access Person has any influence or control over the account, in addition to the disclosure and certification requirements set out above the Review Officer may also carry out the following checks:

Obtain information about a third party manager’s or trustee’s relationship with the Access Person (e.g.is the trustee an independent professional of a friend or relative)

On a sample basis, request reports on holdings/transactions made on the discretionary account or trust.

IX.

REVIEW AND ENFORCEMENT

(1)

The Review Officer’s Duties and Responsibilities . The Review Officer shall notify each person who becomes an Access Person and who is required under this Code of Ethics of his or her reporting requirements, on a best endeavors basis, within ten days before the first quarter in which such person is required to begin reporting.

(2)

The Review Officer will, on a quarterly basis, compare all confirmations, account statements and other reports received with a list of Securities that have been purchased or sold on behalf of any Advisory Client to determine whether a violation of this Code of Ethics may have occurred. Before determining that a person has violated the Code of Ethics, the Review Officer shall give such person an opportunity to supply additional explanatory material.

If the Review Officer determines that a violation has occurred, or believes that a Code of Ethics violation may have occurred, the Review Officer must submit a written report regarding the possible violation, together with any confirmations, account statements or other reports and any additional explanatory material provided by the Access Person, to the Access Person’s primary supervisor, and legal counsel for the Adviser, who shall make an independent determination as to whether a violation has occurred. If the primary supervisor is unavailable or is unable to review the transaction, the alternate supervisor shall act in all respects in the manner prescribed herein for the primary supervisor.

If the primary or alternate supervisor finds that a violation has occurred, the CCO in consultation with the supervisor shall impose upon the individual such sanctions as he or she deems appropriate.

ANNUAL WRITTEN REPORTS TO SENIOR MANAGEMENT AND THE BOARD

At least annually, the Adviser will provide a written report to the Senior Management of the Adviser and to each Fund Client’s Adviser for onward reporting to the Fund Board of Trustees, or Board of Directors (collectively the “Board”), as the case may be, as follows:

(1)

Issues Arising Under the Code of Ethics . The report must describe any issue(s) that arose during the previous year under the Code of Ethics or procedures thereto, including any material Code of Ethics or procedural violations, and any resulting sanction(s). The Adviser may report to senior management of the Adviser and/or the Adviser’s Board more frequently as it deems necessary or appropriate and shall do so as requested by the Board.

(2)

Certification . Each report must be accompanied by a certification to senior management and/or the Board that the Adviser has adopted procedures reasonably necessary to prevent its Access Persons from violating this Code of Ethics.

XI.

RECORDKEEPING

The Adviser will maintain the records set forth below. These records will be maintained in accordance with the 1940 Act, Rule 204 of the Investment Advisers Act, 1940 and the following requirements. They will be available for examination by representatives of the Securities and Exchange Commission and other regulatory agencies.

(1)

A copy of this Code of Ethics and any other code adopted by the Adviser under Rule 17j-1 of the IC Act and/or Rule 204 of the Investment Advisers Act 1940, which is, or at any time within the past five years has been, in effect will be preserved in an easily accessible place.

(2)

A record of any Code of Ethics violation and of any sanctions taken will be preserved in an easily accessible place for a period of at least five years following the end of the fiscal year in which the violation occurred.

(3)

A copy of each Quarterly Report, Initial Holdings Report, and Annual Holdings Report submitted under this Code of Ethics, including any information provided in addition to any such reports made under this Code of Ethics, will be preserved for a period of at least five years from the end of the fiscal year on which it is made, for the first two years in an easily accessible place.

(4)

A record of all persons, currently or within the past five years, who are or were required to submit reports under this Code of Ethics, or who are or were responsible for reviewing these reports, will be maintained in an easily accessible place.

(5)

A copy of each annual report required by Section IX of this Code of Ethics must be maintained for at least five years from the end of the fiscal year in which it is made, for the first two years in any easily accessible place.

(6)

A record of any decision and the reasons supporting the decision, to approve the acquisition of Securities acquired in an IPO or a limited offering, for at least five years after the end of the fiscal year in which the approval is granted.

(7)

A record of any decision, and the reasons supporting the decision, related to the Review Officer’s determination regarding an Access Person’s transaction in a Security as described in Section IV(1).

XII.

MISCELLANEOUS

(1)

Confidentiality . All reports and other confirmations and reports of Securities transactions, and any other information filed with the Adviser pursuant to this Code of Ethics, shall be treated as confidential, provided such reports and information may be produced to the Securities and Exchange Commission and other regulatory agencies.

(2)

Interpretation of Provisions . The Adviser may from time to time adopt such interpretations of this Code of Ethics as it deems appropriate.

(3)

Compliance Certification . Within ten days of becoming an Access Person, and each year thereafter, each such person must complete a Compliance Certification. A Compliance Certification Form is attached as Appendices IV & V.

APPENDICES

APPENDIX I

KLEINWORT BENSON INVESTORS INTERNATIONAL LIMITED

INITIAL HOLDINGS REPORT

Name of Reporting Person:

Date Person Became Subject to the Code’s Reporting Requirements:

Information in Report Dated as of:

Date Report Due:

Date Report Submitted:

Securities Holdings

If you have no securities holdings to report, please check here. ¨

If you do not want this report to be construed as an admission that you have beneficial ownership of one or more securities reported above, please describe below and indicate which securities are at issue.

Securities Accounts

Name of Broker, Dealer or Bank		Name(s) on and Type of Account

If you have no securities accounts to report, please check here. ¨

Accounts over which you have no direct or indirect influence or control

Please list below any accounts where you are the beneficial owner and over which you have no direct or indirect influence or control, e.g. discretionary investment account managed by a third party (e.g. stockbroker account), a trust in which you are a beneficiary and have no knowledge of the holdings etc.

Please provide the following information for each account(s):

Name of Broker, Investment Manager, Trustee	Name(s) on and Type of Account	Access Persons relationship to Manager/Trustee (independent professional, friend, relative, etc.)

If you have listed any account(s) above, please complete Section A below.

Otherwise please tick here to confirm you do not hold any such accounts & proceed to certification at end of page ¨

SECTION A

In relation to the above listed account(s):

(i)

Have you ever suggested purchases or sales of investments to the third-party discretionary stockbroker or trustee on any account above? Yes ¨ No ¨

(ii)

Have you ever directed purchases or sales of investments for any account above? Yes ¨ No ¨

(iii)

Have you ever consulted with the trustee or third-party discretionary stockbroker as to the particular allocation of investments to be made in any account above? Yes ¨ No ¨

If you have answered ‘Yes’ to any of (i), (ii) or (iii) above, this account(s) does not qualify under the reporting exception as described in Section VIII above and such account(s) are subject to the full reporting and pre-clearance requirements as set out in this policy.

If you have answered ‘No’ to all of the above 3 questions, please confirm that you acknowledge and certify that:

1) You have no direct or indirect influence or control over the Accounts;

2) If your control over the Accounts should change in any way, you will immediately notify the Review Officer in writing of such a change; and

3) You agree to provide reports of holdings and/or transactions (including, but not limited to, duplicate account statements and trade confirmations) made in the Accounts at the request of the Review Officer

Signature:

Date:

I certify that I have included on this report all securities transactions and accounts required to be reported pursuant to the Code of Ethics.

Signature:

Date:

APPENDIX II

KLEINWORT BENSON INVESTORS INTERNATIONAL LTD

ANNUAL HOLDINGS REPORT

Name of Reporting Person:

Information in Report Dated as of:

Date Report Due:

Date Report Submitted:

Calendar Year Ended: December 31,

Securities Holdings

If you have no securities holdings to report for the year, please check here. ¨

Securities Accounts

Name of Broker, Dealer or Bank	Date Account was Established	Name(s) on and Type of Account

If you have no securities accounts to report for the year, please check here. ¨

Accounts over which you have no direct or indirect influence or control

Name of Broker, Dealer or Bank	Name(s) on and Type of Account	Relationship to Manager (independent professional, friend, relative, etc.)

If you have listed any account(s) above, please complete Section A below.

Otherwise please tick here to confirm you do not hold any such accounts & proceed to certification at end of page ¨

SECTION A

In relation to the above listed account(s):

(i)

Within the last calendar year, did you suggest purchases or sales of investments to the trustee or third-party discretionary manager for any account above? Yes ¨ No ¨

(ii)

Within the last calendar year, did you direct purchases or sales of investments for any account above? Yes ¨ No ¨

(iii)

Within the last calendar year, did you consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in any account above? Yes ¨ No ¨

If you have answered ‘No’ to all of the above 3 questions, please confirm that you acknowledge and certify that:

I have no direct or indirect influence or control over the Accounts;

If my control over the Accounts should change in any way, I will immediately notify the Review Officer in writing of such a change and will provide any required information regarding holdings and transactions in the Accounts pursuant to the Rule; and

I agree to provide reports of holdings and/or transactions (including, but not limited to, duplicate account statements and trade confirmations) made in the Accounts at the request of the Review Officer

Signature:

Date:

I certify that I have included on this report all securities transactions and accounts required to be reported pursuant to the Code of Ethics.

Signature:

Date:

APPENDIX III

KLEINWORT BENSON INVESTORS INTERNATIONAL LIMITED

QUARTERLY PERSONAL SECURITIES TRANSACTIONS REPORT

Name of Reporting Person:

Calendar Quarter Ended:

Date Report Due:

Date Report Submitted:

Securities Transactions

Date of
Transaction

Name of
Issuer and
Title of
Security

SEDOL

No. Of
Shares (if
applicable)

Principal
Amount,
Maturity Date
and Interest
Rate
(if applicable)

Type of
Transaction

Price

Name of
Broker, Dealer
or Bank
Effecting
Transaction

If you had no reportable transactions during the quarter, please check here. ¨

Securities Accounts

If you established an account within the quarter, please provide the following information:

Name of Broker, Dealer or Bank		Date Account was Established		Name(s) on and Type of Account

If you did not establish a securities account during the quarter, please check here . ¨

Accounts over which you have no direct or indirect influence or control

If you established an account(s) where you are the beneficial owner and over which you have no direct or indirect influence or control, e.g. discretionary investment account managed by a third party (e.g. stockbroker account), a trust in which you are a beneficiary and has no knowledge of the holdings etc., please provide the following information:

Name of Broker, Dealer or Bank	Name(s) on and Type of Account	Relationship to Manager (independent professional, friend, relative, etc.)

If you have listed any account(s) above, please complete Section A below.

Otherwise please tick here to confirm you did not establish any such accounts & proceed to certification at end of page ¨

SECTION A:

In relation to the above listed account(s):

(i)

Have you ever suggested purchases or sales of investments to the trustee or third-party discretionary manager any account above? Yes ¨ No ¨

(ii)

Have you ever directed purchases or sales of investments for any account above? Yes ¨ No ¨

(iii)

Have you ever consulted with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in any account above? Yes ¨ No ¨

If you have answered ‘Yes’ to any of the 3 questions above, this account(s) does not qualify under the reporting exception as described in section VIII above and such account(s) are subject to the full reporting and pre-clearance requirements as set out in this policy. Transactions in such accounts during the previous quarter should be listed in the Securities Transactions box at the top of the first page.

If you have answered ‘No’ to all of the above 3 questions, please confirm that you acknowledge and certify that:

I have no direct or indirect influence or control over the Accounts;

Signature:

Date:

I certify that I have included on this report all securities transactions and accounts required to be reported pursuant to the Code of Ethics.

Signature:

Date:

APPENDIX IV

KLEINWORT BENSON INVESTORS INTERNATIONAL LTD

INITIAL COMPLIANCE CERTIFICATION

INITIAL CERTIFICATION

I certify that I:

(i)

have received, read and reviewed the Code of Ethics;

(ii)

understand the policies and procedures in the Code of Ethics;

(iii)

recognize that I am subject to such policies and procedures;

(iii)

understand the penalties for non-compliance;

(v)

will fully comply with the Code of Ethics; and

(vi)

have fully and accurately completed this Certificate.

Signature:

Name:		(Please print)

Date Submitted:

Date Due:

APPENDIX V

KLEINWORT BENSON INVESTORS INTERNATIONAL LTD.

ANNUAL COMPLIANCE CERTIFICATION

ANNUAL CERTIFICATION

I certify that I:

(i)

have received, read and reviewed the Code of Ethics as amended;;

(ii)

understand the policies and procedures in the Code of Ethics;

(iii)

recognise that I am subject to such policies and procedures;

(iv)

understand the penalties for non-compliance;

(v)

have complied with the Code of Ethics and any applicable reporting requirements during this past year;

(vi)

have fully disclosed any exceptions to my compliance with the Code of Ethics below;

(vii)

have complied with the gifts and benefits notification, recording and pre-approval requirements outlined in the Code of Ethics

(viii)

will fully comply with the Code of Ethics; and

(ix)

have fully and accurately completed this Certificate.

EXCEPTION(S):

Signature:

Name:		(Please print)

Date Submitted:

Date Due:

INITIAL CERTIFICATION PURSUANT TO RULE 17j-1

The undersigned, _______________________________________, in his/her capacity as ____________________, of Kleinwort Benson Investors International Limited (KBII the sub-adviser to the [ insert name of Fund to which cert is being provided] (the “Fund”) hereby certifies the following:

KBII has adopted a Code of Ethics (the “Code”) covering the sub-adviser, pursuant to, and in compliance with, Rule 17j-1 under the Investment Company Act of 1940;

KBII has adopted procedures reasonably necessary to prevent its access persons from violating the Code;

KBII’s Code of Ethics contains provisions reasonably necessary to prevent access persons from violating Rule 17j-1(b); and

In accordance with Rule 17j-1, KBII has submitted its Code of Ethics to the Fund’s Board of Directors for approval.

Witness my hand this ____ day of _________, 20

Signature:

Printed Name:

Title: