VIRTUS MULTI-SECTOR SHORT TERM BOND FUND

Virtus Multi-Sector Short Term Bond Fund

Investment Objective

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

Fees and Expenses

The tables below illustrate the fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Virtus Mutual Funds. More information about these and other discounts is available from your financial advisor and under “Sales Charges” on page 201 of the fund’s prospectus and “Alternative Purchase Arrangements” on page 105 of the fund’s statement of additional information.

Shareholder Fees (fees paid directly from your investment)

Shareholder Fees - VIRTUS MULTI-SECTOR SHORT TERM BOND FUND	Class A	Class B		Class C	Class I	Class T
Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)	2.25%	none		none	none	none
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)	none	2.00%	[1]	none	none	1.00%	[1]

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Annual Fund Operating Expenses - VIRTUS MULTI-SECTOR SHORT TERM BOND FUND	Class A	Class B	Class C	Class I	Class T
Management Fees	0.47%	0.47%	0.47%	0.47%	0.47%
Distribution and Shareholder Servicing (12b-1) fees	0.25%	0.75%	0.50%	none	1.00%
Other Expenses	0.25%	0.25%	0.25%	0.25%	0.25%
Total Annual Fund Operating Expenses	0.97%	1.47%	1.22%	0.72%	1.72%

Example

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. In the case of Class B Shares, it assumes that your shares are converted to Class A Shares after six years. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Expense Example - VIRTUS MULTI-SECTOR SHORT TERM BOND FUND - USD ($)	Share Status	1 Year	3 Years	5 Years	10 Years
Class A	Sold	322	527	749	1,388
Class B	Sold	300	465	803	1,498
Class C	Sold	124	387	670	1,477
Class I	Sold	74	230	401	894
Class T	Sold	272	516	860	1,720

Expense Example, No Redemption - VIRTUS MULTI-SECTOR SHORT TERM BOND FUND - USD ($)	Share Status	1 Year	3 Years	5 Years	10 Years
Class A	Held	322	527	749	1,388
Class B	Held	150	465	803	1,498
Class C	Held	124	387	670	1,477
Class I	Held	74	230	401	894
Class T	Held	172	516	860	1,720

Portfolio Turnover

The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund's portfolio turnover rate was 37%of the average value of its portfolio.

Investments, Risks and Performance

Principal Investment Strategies

The fund seeks current income with an emphasis on maintaining low volatility and overall short duration by investing primarily in higher quality, more liquid securities across 14 bond market sectors. The fund utilizes a value-oriented, research driven approach that seeks to strategically overweight undervalued sectors while applying strict risk controls.

Under normal circumstances, the fund invests at least 80% of its assets in bonds, which are fixed income debt obligations of various types of issuers. The fund seeks to achieve its objective by investing in a diversified portfolio of primarily short-term fixed income securities having an expected dollar-weighted average maturity of three years or less and that are in one of the following market sectors:

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

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

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• Investment grade securities; and

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• High yield-high risk fixed income securities (so called “junk bonds”).

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

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:

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• 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. Debt securities rated below investment-grade are especially susceptible to this risk.

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• 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.

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• 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.

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• 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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• 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.

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

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• 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.

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

Performance Information

The bar chart and table below provide some indication of the potential risks of investing in the fund. The fund’s past performance, before and after taxes, is not necessarily an indication of how the fund will perform in the future.

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

Calendar year total returns for Class A Shares (includes returns of a predecessor fund)

Returns do not reflect sales charges and would be lower if they did.

Annual Return (%)

Best Quarter: Q2/2009: 10.79% Worst Quarter: Q4/2008: -9.05%

Average Annual Total Returns (for the periods ended 12/31/15; includes returns of a predecessor fund)

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

Average Annual Total Returns - VIRTUS MULTI-SECTOR SHORT TERM BOND FUND	Label	1 Year	5 Years	10 Years	Since Inception	Inception Date
Class A	Return Before Taxes	(2.16%)	2.51%	4.25%
Class A | Return After Taxes on Distributions	Return After Taxes on Distributions	(3.16%)	1.08%	2.54%
Class A | Return After Taxes on Distributions and Sale of Fund Shares	Return After Taxes on Distributions and Sale of Fund Shares	(1.22%)	1.34%	2.61%
Class B	Return Before Taxes	(1.88%)	2.48%	3.95%
Class C	Return Before Taxes	0.04%	2.77%	4.23%
Class I	Return Before Taxes	0.55%	3.27%		5.12%	Jun. 06, 2008
Class I | Barclays U.S. Aggregate Bond Index	Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)				4.27%	Jun. 06, 2008
Class I | BofA Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index	BofA Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index (reflects no deduction for fees, expenses or taxes)				3.24%	Jun. 06, 2008
Class T	Return Before Taxes	(0.67%)	2.22%	3.70%
Barclays U.S. Aggregate Bond Index	Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)	0.55%	3.25%	4.52%
BofA Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index	BofA Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index (reflects no deduction for fees, expenses or taxes)	1.00%	2.18%	3.68%

The Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The BofA Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index measures performance of U.S. investment grade corporate bond issues rated BBB and A by Standard and Poor’s/Moody’s with maturities between one and three years. The indexes are calculated on a total return basis. The indexes are unmanaged and not available for direct investment.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. After-tax returns are shown only for Class A 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.

[1] The maximum deferred sales charge is imposed on Class B Shares redeemed during the first year; thereafter, it decreases 0.50% annually to 1% during the third year and to 0% after the third year. The deferred sales charge is imposed on Class T Shares redeemed during the first year only.