485APOS 1 t1500010.htm VIRTUS ALTERNATIVE SOLUTIONS TRUST

As filed with the Securities and Exchange Commission on January 22, 2015

File No. 333-191940

File No. 811-22906

 

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. 9 x

and/or

REGISTRATION STATEMENT

Under the INVESTMENT COMPANY ACT OF 1940 ¨
     
Amendment No. 15 x

(Check appropriate box or boxes)

Virtus Alternative Solutions 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)

 

Jennifer Fromm, Esq.

Senior 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 [date] pursuant to paragraph (b) of Rule 485

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

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

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

¨ on [date] 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.

 

 

 
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Prospectus
 
TICKER SYMBOL BY CLASS
FUND
A
C
I
Virtus Long/Short Equity Fund
[TBD]
[TBD]
[TBD]
Virtus Multi-Strategy Target Return Fund
[TBD]
[TBD]
[TBD]
 
TRUST NAME
March XX, 2015
VIRTUS ALTERNATIVE SOLUTIONS TRUST
 
The Securities and Exchange Commission, the Commodity Futures Trading Commission, and the state securities commissions have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. This prospectus contains important information that you should know before investing in Virtus Mutual Funds. Please read it carefully and retain it for future reference.
Not FDIC Insured
No Bank Guarantee
May Lose Value

Virtus Mutual Funds
Table of Contents
 
FUND SUMMARY
Virtus Long/Short Equity Fund
Virtus Multi-Strategy Target Return Fund
MORE INFORMATION ABOUT FUND EXPENSES
MORE INFORMATION ABOUT INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
Virtus Long/Short Equity Fund
Virtus Multi-Strategy Target Return Fund
MORE INFORMATION ABOUT RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES
MANAGEMENT OF THE FUNDS
ADDITIONAL INVESTMENT TECHNIQUES
PRICING OF FUND SHARES
SALES CHARGES
YOUR ACCOUNT
HOW TO BUY SHARES
HOW TO SELL SHARES
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
ACCOUNT POLICIES
INVESTOR SERVICES AND OTHER INFORMATION
TAX STATUS OF DISTRIBUTIONS

Virtus Long/Short Equity Fund
Investment Objective
The fund has an investment objective of total return.
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 Funds. More information about these and other discounts is available from your financial advisor and under Sales Charges on page 54 of the funds prospectus and Alternative Purchase Arrangements on page 98 of the funds statement of additional information.
 
Shareholder Fees (fees paid directly from your investment)
Class A
Class C
Class I
Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)
5.75%
None
None
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)
None
1.00%(a)
None
 
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Class A
Class C
Class I
Management Fees
____%
____%
____%
Distribution and Shareholder Servicing (12b-1) Fees
0.25%
1.00%
0.00%
Other Expenses(b)
____%
____%
____%
Total Annual Fund Operating Expenses
____%
____%
____%
Less: Expense Reimbursement(c)
(____)%
(____)%
(____)%
Total Annual Fund Operating Expenses After Expense Reimbursement(b)(c)
____%
____%
____%
(a)
  • The deferred sales charge is imposed on Class C Shares redeemed during the first year only.
(b)
  • Estimated for current fiscal year, as annualized.
(c)
  • The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding dividend and interest expenses, taxes, brokerage commissions, extraordinary expenses and acquired fund fees and expenses) so that such expenses do not exceed [____]% for Class A Shares, [____]% for Class C Shares and [____]% for Class I Shares through February 28, 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 fiscal year in which 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 an investment of $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 funds operating expenses remain the same and that the expense limitations are in place for the periods indicated. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Share Status
1 Year
3 Years
Class A
Sold or Held
$
$
Class C
Sold
$
$
Held
$
$
Class I
Sold or Held
$
$
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 funds performance. As of the date of this prospectus, the fund has not commenced operations; therefore, portfolio turnover information for the fund is not shown here.

Investments, Risks and Performance
Principal Investment Strategies
The fund pursues its investment objective by taking both long and short positions. Under normal circumstances, the fund invests at least 80% of its net assets in equity securities (or derivative or other strategic instruments with similar economic characteristics). The funds portfolio of equity securities may include, without limitation, common and preferred stocks, convertible securities, rights and warrants, depositary receipts, real estate investment trusts, pooled investment vehicles, including other investment companies and exchange-traded funds (ETFs), and master limited partnerships.
The Fund may invest in fixed income securities and other debt instruments, including bank debt, U.S. Treasury securities and money market instruments. Fixed income securities in which the fund invests may be of any maturity and credit quality, including high-yield/high-risk securties.
The fund may invest in securities of issuers of any market capitalization. The funds investments may include securities of U.S. and foreign issuers, including securities of issuers in emerging market countries and securities denominated in a currency other than the U.S. dollar. The fund may significantly overweight or underweight certain companies, industries or market sectors.
The fund expects to maintain significant short positions in equity securities and equity-related instruments, including the derivative instruments described below and shares of ETFs. Although the fund intends to maintain an overall long position in its portfolio investments, in certain circumstances, the funds short positions may approach or reach the size of the funds overall long position.
The fund seeks to identify overvalued, undervalued or mispriced stocks and other assets through fundamental evaluations, research and various analytical measurements. The fund takes long positions primarily in securities that the subadviser believes will outperform or that they believe are undervalued, and may also sell short stocks that they believe will underperform, or that they believe are overvalued.
The fund may use derivative instruments, such as options, futures, forwards, swaps (including total return swaps) and other derivative instruments or combinations of derivative instruments, as a substitute for investing directly in an underlying asset, as an alternative to selling a security short, to increase returns, to manage foreign currency risk, as part of a hedging strategy or for other purposes related to the management of the fund. There is no limit to the amount of the funds assets that may be invested in derivative instruments. To the extent such instruments have similar economic characteristics to equity securities as described in the funds policy with respect to the investment of at least 80% of its net assets, these investments will be considered investments included within such policy.
Principal Risks
The fund may not achieve its objectives, and it is not intended to be a complete investment program. The value of the funds 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 funds 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 subadvisers expect. 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 funds transaction costs. In addition, you will also be subject to the risks associated with the principal investment strategies of any other funds or collective investment vehicles in which the fund invests. The principal risks of investing in the fund are:
>
  • Call Risk. The risk that issuers will prepay fixed rate obligations when interest rates fall, forcing the fund to reinvest in obligations with lower interest rates than the original obligations and otherwise not benefit fully from the increase in value that other fixed income securities experience when ratings 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 issuers ability to make such payments will cause the price of the security to decline.
>
  • Convertible Securities Risk. The risk that a convertible security held by the fund will be called for redemption at a time and/or price unfavorable to the fund.
>
  • Counterparty Risk. The risk that a party upon whom the fund relies to consummate a transaction will default.

>
  • Currency Rate Risk. The risk that fluctuations in the exchange rates between currencies may negatively affect the value of the funds shares.
>
  • Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investment in securities of foreign issuers.
>
  • Derivatives Risk. The risk that the fund will incur a loss greater than the funds investment in, or will experience greater share price volatility as a result of investing in, a derivative contract. Derivatives may include, among other things, futures, options, forwards and swap agreements and may be used in order to hedge portfolio risks, create leverage, or to attempt to increase yield.
>
  • Emerging Market Investing Risk. The risk that prices of emerging markets securities may be more volatile, or will be more greatly affected by negative conditions, than those of their counterparts in more established foreign markets.
>
  • Equity REIT Securities Risk. The risk that, in addition to the risks associated with investing in the real estate industry, the value of the Series shares will be negatively affected by factors specific to investing through a pooled vehicle, such as through poor management of the REIT or REIT-like entity, concentration risk, or other risks typically associated with investing in small or medium market capitalization companies.
>
  • 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 funds shares over short or extended periods. Investments in a particular style or in small or medium-sized companies may enhance that risk.
>
  • Exchange-Traded Funds (ETFs) Risk. The risk that the value of an ETF will be more volatile than the underlying portfolio of securities the ETF is designed to track, or that the costs to the fund of owning shares of the ETF will exceed those the fund would incur by investing in such securities directly.
>
  • Foreign Currency Transactions Risk. The risk that the funds transactions designed to hedge the funds exposure to foreign currency risks are not successful or have the effect of limiting gains from favorable market movements.
>
  • Foreign Investing Risk. The risk that the prices of foreign securities in the funds portfolio will be more volatile than those of domestic securities, or will be negatively affected by currency fluctuations or economic, political or other developments.
>
  • High-Yield/High-Risk Fixed Income Securities (Junk Bond) Risk. The risk that issuers of high-yield/high-risk securities in the funds portfolio will default, that the prices of such securities will be volatile, and that the securities will not be liquid.
>
  • Interest Rate Risk. The risk that when interest rates rise, the values of the funds debt securities, especially those with longer maturities, will fall.
>
  • 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.
>
  • New Fund Risk. The risk that the fund may not grow to an economically viable size, in which case the fund may cease operations and investors may be required to liquidate or transfer their investments at an inopportune time.
>
  • Preferred Stocks Risk. The risk that a preferred stock will decline in price, fail to pay dividends when expected, or be illiquid.
>
  • Sector Concentration Risk. The risk that events negatively affecting a particular market sector in which the fund focuses its investments will cause the value of the funds shares to decrease, perhaps significantly. To the extent the fund focuses its assets in a particular market sector, the fund is more vulnerable to conditions that negatively affect such market sector as compared to a fund that does not focus holdings in such securities.
>
  • Short Sales Risk. The risk that the fund will experience a loss if the price of a borrowed security increases between the date of a short sale and the date on which the fund acquires the security.

>
  • Small and Medium Market Capitalization Risk. The risk that the funds investments in small and medium market capitalization companies will increase the volatility and risk of loss to the fund, as compared with investments in larger, more established companies.
>
  • U.S. Government Securities Risk. The risk that the U.S. Government securities in the funds 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 fund has not had a full calendar year of operations; therefore, performance information is not shown here.
Management
The funds investment adviser is Virtus Alternative Investment Advisers, Inc. (VAIA).
The funds subadviser is Sirios Capital Management, L.P. ("Sirios")
Portfolio Management
>
  • John F. Brennan, Jr., Managing Director at Sirios, is the manager of the fund. Mr. Brennan has served as the Portfolio Manager of the fund since inception in March 2015.
Purchase and Sale of Fund Shares
Minimum initial investments applicable to Class A and Class C Shares:
  • $2,500, generally
  • $100 for Individual Retirement Accounts (IRAs), systematic purchase or exchange accounts
  • No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans
Minimum additional investments applicable to Class A and Class C Shares:
  • $100, generally
  • No minimum for defined contribution plans, asset-based fee programs, profit-sharing plans or employee benefit plans.
For Class I Shares, the minimum initial purchase is $100,000; there is no minimum for additional purchases.
In general, you may buy or sell shares of the fund by mail or telephone on any business day. You also may buy and sell shares through a financial advisor.
Taxes
The funds distributions are taxable to you as either ordinary income or capital gains, except when your investment is through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediarys Web site for more information.

Virtus Multi-Strategy Target Return Fund
Investment Objective
The fund has an investment objective of long-term total return.
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 Funds. More information about these and other discounts is available from your financial advisor and under Sales Charges on page 54 of the funds prospectus and Alternative Purchase Arrangements on page 98 of the funds statement of additional information.
 
Shareholder Fees (fees paid directly from your investment)
Class A
Class C
Class I
Maximum Sales Charge (load) Imposed on Purchases (as a percentage of offering price)
5.75%
None
None
Maximum Deferred Sales Charge (load) (as a percentage of the lesser of purchase price or redemption proceeds)
None
1.00%(a)
None
 
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Class A
Class C
Class I
Management Fees
____%
____%
____%
Distribution and Shareholder Servicing (12b-1) Fees
0.25%
1.00%
0.00%
Other Expenses(b)
____%
____%
____%
Total Annual Fund Operating Expenses
____%
____%
____%
Less: Fee Waiver and/or Expense Reimbursement(c)
(____)%
(____)%
(____)%
Total Annual Fund Operating Expenses After Expense Reimbursement(b)(c)
____%
____%
____%
(a)
  • The deferred sales charge is imposed on Class C Shares redeemed during the first year only.
(b)
  • Estimated for current fiscal year, as annualized.
(c)
  • The fund's investment adviser has contractually agreed to limit the fund's total operating expenses (excluding dividend and interest expenses, taxes, brokerage commissions, extraordinary expenses and acquired fund fees and expenses) so that such expenses do not exceed ____% for Class A Shares, ____% for Class C Shares and ____% for Class I Shares through February 28, 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 fiscal year in which 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 an investment of $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 funds operating expenses remain the same and that the expense limitations are in place for the periods indicated. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Share Status
1 Year
3 Years
Class A
Sold or Held
$
$
Class C
Sold
$
$
Held
$
$
Class I
Sold or Held
$
$
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 funds performance. As of the date of this prospectus, the fund has not commenced operations; therefore, portfolio turnover information for the fund is not shown here.

Investments, Risks and Performance
Principal Investment Strategies
The fund seeks to achieve its investment objective by identifying investment ideas and opportunities across and within a wide range of asset classes. The fund will utilize a large range of investments, including fixed income, currencies, equity, money market instruments, bank deposits, collective investment vehicles, and derivative instruments to pursue its objective.
Equity securities in which the fund invests will be of issuers of any market capitalization. Fixed income investments may be in bonds across the full spectrum of credit sectors and maturities. Derivatives will be used extensively and may include futures, options, swaps, swaptions, total return swaps, foreign exchange options and forwards. From time to time, the fund's portfolio may be concentrated in a particular market sector where the subadviser believes the best opportunities reside.
The fund may take both long and synthetic short positions. Derivative usage may include but is not limited to derivatives on interest rates, inflation rates, bonds, credit, equity, financial indices, volatility, dividend payments and currencies. Derivatives usage may be for the purposes of hedging, efficient portfolio management, or investment and may be exchange traded or traded off exchange through market counterparties.
To meet the funds objective and to help manage portfolio volatility, the subadviser picks strategies based on views on asset classes, sectors, currencies, interest rates, inflation, and volatility. These strategies will be actively managed and will adjust over time.
Principal Risks
The fund may not achieve its objectives, and it is not intended to be a complete investment program. The value of the funds 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 funds 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 subadvisers expect. As a result, the value of your shares may decrease. In addition, you will also be subject to the risks associated with the principal investment strategies of any other funds or collective investment vehicles in which the fund invests. 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 funds transaction costs. The principal risks of investing in the fund are:
>
  • Call Risk. The risk that issuers will prepay fixed rate obligations when interest rates fall, forcing the fund to reinvest in obligations with lower interest rates than the original obligations and otherwise not benefit fully from the increase in value that other fixed income securities experience when ratings decline.
>
  • Commodity Pool Risk. The risk that the funds regulation as a commodity pool under the Commodity Exchange Act (CEA) and the rules of the Commodity Futures Trading Commission (CFTC) will subject the fund to additional costs and/or affect the operations of the fund.
>
  • Convertible Securities Risk. The risk that a convertible security held by the fund will be called for redemption at a time and/or price unfavorable to the fund.
>
  • Counterparty Risk. The risk that a party upon whom the fund relies to consummate a transaction will default.
>
  • 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 issuers ability to make such payments will cause the price of the security to decline.
>
  • Currency Rate Risk. The risk that fluctuations in the exchange rates between currencies may negatively affect the value of the funds shares.
>
  • Depositary Receipts Risk. The risk that investments in foreign companies through depositary receipts will expose the fund to the same risks as direct investment in securities of foreign issuers.
>
  • Derivatives Risk. The risk that the fund will incur a loss greater than the funds investment in, or will experience greater share price volatility as a result of investing in, a derivative contract. Derivatives may include, among other things, futures, options, forwards and swap agreements and may be used in order to hedge portfolio risks, create leverage or attempt to increase returns.

>
  • Emerging Market Investing Risk. The risk that prices of emerging markets securities may be more volatile, or will be more greatly affected by negative conditions, than those of their counterparts in more established foreign markets.
>
  • 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 funds shares over short or extended periods. Investments in a particular style or in small or medium-sized companies may enhance that risk.
>
  • Exchange-Traded Funds (ETFs) Risk. The risk that the value of an ETF will be more volatile than the underlying portfolio of securities the ETF is designed to track, or that the costs to the fund of owning shares of the ETF will exceed those the fund would incur by investing in such securities directly.
>
  • Foreign Currency Transactions Risk. The risk that the funds transactions with respect to foreign currency are not successful or have the effect of limiting gains from favorable market movements.
>
  • Foreign Investing Risk. The risk that the prices of foreign securities in the funds portfolio will be more volatile than those of domestic securities, or will be negatively affected by currency fluctuations or economic, political or other developments.
>
  • High-Yield/High-Risk Fixed Income Securities (Junk Bond) Risk. The risk that issuers of high-yield/high-risk securities in the funds portfolio will default, that the prices of such securities will be volatile, and that the securities will not be liquid.
>
  • Income Risk. The risk that income received from the fund will vary widely over the short- and long-term.
>
  • Interest Rate Risk. The risk that when interest rates rise, the values of the funds debt securities, especially those with longer maturities, will fall.
>
  • Leverage Risk. The risk that leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair the fund's liquidity, cause it to liquidate positions at an unfavorable time, increase its volatility or otherwise cause it not to achieve its intended result.
>
  • Liquidity Risk. The risk that certain securities may be difficult or impossible to sell at the time and price beneficial to the fund.
>
  • 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.
>
  • New Fund Risk. The risk that the fund may not grow to an economically viable size, in which case the fund may cease operations and investors may be required to liquidate or transfer their investments at an inopportune time.
>
  • Non-Diversification Risk. The risk that the fund will be more susceptible to factors negatively impacting the securities in its portfolio to the extent that each such security represents a significant portion of the funds assets.
>
  • Portfolio Turnover Risk. The risk that the funds principal investment strategies will result in a consistently high portfolio turnover rate. See the Portfolio Turnover section above for more information about the impact that portfolio turnover can have on your investment.
>
  • Sector Concentration Risk. The risk that events negatively affecting a particular market sector in which the fund focuses its investments will cause the value of the funds shares to decrease, perhaps significantly. To the extent the fund focuses its assets in a particular market sector, the fund is more vulnerable to conditions that negatively affect such market sector as compared to a fund that does not focus holdings in such securities.
>
  • Short-Term Investments Risk. The risk that the funds short-term investments will not provide the liquidity or protection intended or will prevent the fund from experiencing positive movements in the funds principal investment strategies.
>
  • Short Sales Risk. The risk that the fund will experience a loss if the price of a borrowed security increases between the date of a short sale and the date on which the fund acquires the security.

>
  • Small and Medium Market Capitalization Risk. The risk that the fund's investments in small and medium market capitalization companies will increase the volatility and risk of loss to the fund, as compared with investments in larger, more established companies.
Performance Information
The fund has not had a full calendar year of operations; therefore, performance information is not shown here.
Management
The funds investment adviser is Virtus Investment Advisers, Inc. (VAIA).
The funds subadviser is Aviva Investors Americas LLC ("AIA").
Portfolio Management [to be filed by amendment]
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.
Taxes
The funds distributions are taxable to you as either ordinary income or capital gains, except when your investment is through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the fund over another investment. Ask your financial advisor or visit your financial intermediarys Web site for more information.

More Information About Fund Expenses
VAIA has contractually agreed to limit the total operating expenses (excluding dividend and interest expenses, taxes, leverage expenses, extraordinary expenses and acquired fund fees and expenses, if any) of the funds so that such expenses do not exceed, on an annualized basis, the amounts indicated in the following table.
 
Class A Shares
Class C Shares
Class I Shares
Through Date
Virtus Long/Short Equity Fund
____%
____%
____%
February 28, 2017
Virtus Multi-Strategy Target Return Fund
_____%
____%
____%
February 28, 2017
Following the contractual period, VAIA may discontinue these arrangements at any time. Under certain conditions, VAIA may recapture operating expenses waived or reimbursed under these expense limitation arrangements for a period of three years following the end of the fiscal period in which such waiver or reimbursement occurred, provided that the recapture does not cause the applicable fund(s) to exceed its expense limit in effect at the recapture.

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 funds 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 funds investment objective, shareholders will be provided with reasonable notice. There is no guarantee that a fund will achieve its objective.
Please see the statement of additional information (SAI) for additional information about the securities and investment strategies described in this prospectus and about additional securities and investment strategies that may be used by the funds.

Virtus Long/Short Equity Fund
Non-Fundamental Investment Objectives
The fund has an investment objective of total return.
Principal Investment Strategies:
The fund pursues its investment objective by taking both long and short positions. Under normal circumstances, the fund invests at least 80% of its net assets in equity securities (or derivative or other strategic instruments with similar economic characteristics). The funds portfolio of equity securities may include, without limitation, common and preferred stocks, convertible securities, rights and warrants, depositary receipts, real estate investment trusts, pooled investment vehicles, including other investment companies and exchange-traded funds (ETFs), and master limited partnerships.
The Fund may invest in fixed income securities and other debt instruments, including bank debt, U.S. Treasury securities and money market instruments.
The fund may invest in securities of issuers of any market capitalization. The funds investments may include securities of U.S. and foreign issuers, including securities of issuers in emerging market countries and securities denominated in a currency other than the U.S. dollar. The fund may significantly overweight or underweight certain companies, industries or market sectors.
The fund expects to maintain significant short positions in equity securities and equity-related instruments, including the derivative instruments described below and shares of ETFs. Although the fund intends to maintain an overall long position in its portfolio investments, in certain circumstances, the funds short positions may approach or reach the size of the funds overall long position. The fund seeks to identify overvalued, undervalued or mispriced stocks and other assets through fundamental evaluations, research and various analytical measurements. The fund takes long positions primarily in securities that the subadviser believes will outperform or that they believe are undervalued, and may also sell short stocks that they believe will underperform, or that they believe are overvalued.
The fund may use derivative instruments, such as options, futures, forwards, swaps (including total return swaps) and other derivative instruments or combinations of derivative instruments, as a substitute for investing directly in an underlying asset, as an alternative to selling a security short, to increase returns, to manage foreign currency risk, as part of a hedging strategy or for other purposes related to the management of the fund. There is no limit to the amount of the funds assets that may be invested in derivative instruments. To the extent such instruments have similar economic characteristics to equity securities as described in the funds policy with respect to the investment of at least 80% of its net assets, these investments will be considered investments included within such policy.
The fund's policy of investing 80% of its assets in equity securities and equity-related instruments may be changed only upon 60 days' written notice to shareholders.
Temporary Defensive Strategy: If a subadviser does not believe that market conditions are favorable for the funds principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal strategies by investing in cash or money market instruments, including, but not limited to, U.S. Government obligations maturing within one year from the date of purchase. When this allocation happens, the fund may not achieve its investment objectives.
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.

Virtus Multi-Strategy Target Return Fund
Non-Fundamental Investment Objective:
The fund has an investment objective of long term total return.
Principal Investment Strategies:
The fund seeks to achieve its investment objective by identifying investment ideas and opportunities across and within a wide range of asset classes. The fund will utilize a large range of investments, including fixed income, currencies, equity, money market instruments, bank deposits, collective investment vehicles, and derivative instruments to pursue its objective.
Equity securities in which the fund invests will be of issuers of any market capitalization. Fixed income investments may be in bonds across the full spectrum of credit sectors and maturities. Derivatives will be used extensively and may include futures, options, swaps, swaptions, total return swaps, foreign exchange options and forwards.
The fund may take both long and synthetic short positions. Derivative usage may include but is not limited to derivatives on interest rates, inflation rates, bonds, credit, equity, financial indices, volatility, dividend payments and currencies. Derivatives usage may be for the purposes of hedging, efficient portfolio management, or investment and may be exchange traded or traded off exchange through market counterparties.
To meet the funds objective and to help manage portfolio volatility, the subadivser picks strategies based on views on asset classes, sectors, currencies, interest rates, inflation, and volatility. These strategies will be actively managed and will adjust over time.
The fund is considered non-diversified under federal securities laws, which means that it may concentrate its investments in fewer issuers than permitted for diversified mutual funds.
Temporary Defensive Strategy: If a subadviser does not believe that market conditions are favorable to the funds principal investment strategies, the fund may take temporary defensive positions that are inconsistent with its principal strategies by investing in cash or money market instruments, including, but not limited to, U.S. Government obligations maturing within one year from the date of purchase. When this allocation happens, the fund may not achieve its investment objectives.
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.

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 funds 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 funds investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the overall economy, specific industries or companies in which the fund invests can be worse than expected and investments may fail to perform as the adviser or a subadviser expects. As a result, the value of your shares may decrease.
Specific risks of investing in the funds are identified in the below table and described in detail following the table. For certain funds, the indicated risks apply indirectly through the funds investments in other funds.
 
Risks
Virtus Long/Short Equity Fund
Virtus Multi-Strategy Target Return Fund
Commodity Pool Risk
X
Convertible Securities
X
X
Counterparty
X
X
Debt Securities
X
X
Call
X
X
Credit
X
X
Interest Rate
X
X
Depositary Receipts
X
X
Derivatives
X
X
Equity REIT Securites
X
Equity Securities
X
X
Small and Medium Market Capitalization Companies
X
X
Exchange-Traded Funds
X
X
Foreign Currency Transactions
X
X
Foreign Investing
X
X
Currency Rate
X
X
Emerging Market Investing
X
X
High Yield-High Risk Securities (Junk Bonds)
X
X
Income
X
Leverage
X
X
Liquidity
X
Market Volatility
X
X
Master Limited Partnership ("MLP")
X
New Fund
X
X
Non-Diversification
X
Portfolio Turnover
X
Preferred Stocks
X
Sector Concentration
X
X
Short-Term Investments
X
Short Sales
X
X
U.S. Government Securities
X
In order to determine which risks are relevant to each fund, please refer to the table above.
Commodity Pool Risk
A funds investments in certain instruments deemed to be commodity interests under the Commodity Exchange Act (CEA) and the rules of the Commodity Futures Trading Commission (CFTC) may cause the fund to be deemed a commodity pool, thereby subjecting the fund to regulation under the CEA and CFTC rules. In that event, the funds Adviser will be registered as a Commodity Pool Operator, certain of the funds subadvisers will be registered as Commodity Trading Advisers, and the fund will be operated in accordance with CFTC rules. Because of the applicable registration requirements and rules, investing the funds assets in commodity interests could cause the fund to incur additional expenses. Alternatively, if the fund limits its exposure to commodity interests in order to qualify for exemption from being considered a commodity pool, the funds use of investment techniques described in this prospectus may be limited or restricted.

Convertible Securities
Convertible securities are bonds, debentures, notes, preferred stock, rights, warrants or other securities that may be converted into or exchanged for a prescribed amount of common stock or other security of the same or a different issuer or into cash within a particular period of time at a specified price or formula. A convertible security generally entitles the holder to receive interest paid or accrued on debt securities or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. If a convertible security is called for redemption, the respective fund may have to redeem the security, convert it into common stock or sell it to a third-party at a price and time that is not beneficial for the fund. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Securities convertible into common stocks may have higher yields than common stocks but lower yields than comparable nonconvertible securities.
Counterparty Risk
When a fund engages in investment techniques 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.
Debt Securities Risks
Debt securities are subject to various risks, the most prominent of which are credit risk and interest rate risk. These risks can affect a securitys 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 issuers 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 instruments value usually will not affect the amount of interest income paid to a fund, but will affect the value of the funds shares. Interest rate risk is generally greater for investments with longer maturities. Certain securities pay interest at variable or floating rates. Variable rate securities reset at specified intervals, while floating rate securities reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the effect of changes in market interest rates on the value of the security. However, some securities do not track the underlying index directly, but reset based on formulas that can produce an effect similar to leveraging; others may also provide for interest payments that vary inversely with market rates. The market prices of these securities may fluctuate significantly when interest rates change.
Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, a fund might have to reinvest the proceeds in an investment offering a lower yield, and therefore it might not benefit from any increase in value as a result of declining interest rates.
Depositary Receipts Risks
Certain funds may invest in American Depositary Receipts (ADRs) sponsored by U.S. banks, European Depositary Receipts (EDRs), Global Depositary Receipts (GDRs), ADRs not sponsored by U.S. banks, other types of depositary receipts (including non-voting depositary receipts), and other similar instruments representing securities of foreign companies.
Although certain depositary receipts may reduce or eliminate some of the risks associated with foreign investing, these types of securities generally are subject to many of the same risks as direct investment in securities of foreign issuers.
Derivatives Risk
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.
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 subadvisers 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 funds ability to invest in derivatives as the funds 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 funds 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 funds 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 funds income or deferring its losses. A funds 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 REIT Securities Risks
REITs are financial vehicles that pool investor capital to purchase or finance real estate. Equity REITs invest primarily in direct ownership or lease of real property, and they derive most of their income from rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Investing in equity REITs and REIT-like entities involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs and REIT-like entities are typically small or medium market capitalization companies, and they are subject to management fees and other expenses. A fund that invests in REITs and REIT-like entities will bear its proportionate share of the costs of the REITs and REIT-like entities operations. REITs and REIT-like entities are dependent upon management skill, may not be diversified, and are subject to heavy cash flow dependency and self-liquidation. REITs and REIT-like entities also are subject to the possibility of failing to qualify for tax-free pass-through of income. Also, because REITs and REIT-like entities typically are invested in a limited number of projects or in a particular market segment, these entities are more susceptible to adverse developments affecting a single project or market segment than more broadly diversified investments. In the event of a default by a borrower or lessee, a 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, depending upon the nature of dividends received by the fund.
Equity Securities Risks
Prices of equity securities may be 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 a fund goes down, the value of the funds shares will be affected.
  • Small and Medium-Sized 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.
Exchange-Traded Funds (ETFs) Risk
ETFs invest in a portfolio of securities designed to track a particular market segment or index. The risks associated with investing in ETFs generally reflect the risks of owning interest in the underlying securities the ETF is designed to track, although lack of liquidity in an ETF could result in its value being more volatile than the underlying portfolio of securities. Assets invested in ETFs incur a layering of expenses, including operating costs and advisory fees that fund shareholders indirectly bear; such expenses may exceed the expenses the fund would incur if it invested directly in the underlying portfolio of securities the ETF is designed to track. Shares of ETFs trade on a securities exchange and may trade at, above, or below their net asset value. There is further risk that the ETF will not perform as expected.
Foreign Currency Transactions Risk
A fund may engage in foreign currency transactions, including foreign currency forward contracts, options, swaps and other similar strategic transactions. These transactions may be for the purposes of hedging or efficient portfolio management, or may be for investment purposes, and they may be exchange traded or traded directly with market counterparties. Such transactions may not prove successful or may have the effect of limiting gains from favorable markets movements.
A fund may use derivatives to acquire positions in various currencies, which presents the risk that the fund could lose money on its exposure to a particular currency and also lose money on the derivative. A fund also may take positions in currencies that do not correlate to the currency exposure presented by the funds other investments. As a result, the funds currency exposure may differ, in some cases significantly, from the currency exposure of its other investments and/or its benchmarks.
Foreign Investing Risks
Investing in securities of non-U.S. companies involves special risks and considerations not typically associated with investing in U.S. companies, and the values of non-U.S. securities may be more volatile than those of U.S. securities. The values of non-U.S. securities are subject to economic and political developments in countries and regions where the issuers operate or are domiciled, or where the securities are traded, such as changes in economic or monetary policies, and to changes in currency exchange rates. Values may also be affected by restrictions on receiving the investment proceeds from a non-U.S. country.
In general, less information is publicly available about non-U.S. companies than about U.S. companies. Non-U.S. companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. Certain foreign issuers classified as passive foreign investment companies may be subject to additional taxation risk.
  • Currency Rate Risk. Because the foreign securities in which a fund invests generally trade in currencies other than the U.S. dollar, changes in currency exchange rates will affect the funds 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 funds 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 funds holdings goes up. Generally, a strong U.S. dollar relative to such other currencies will adversely affect the value of the funds 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 or 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.
High-Yield/High-Risk Fixed Income Securities (Junk Bonds) Risk
Securities rated BB or below by S&P or Fitch or Ba or below by Moodys may be known as high yield securities and commonly referred to as junk bonds. The highest of the ratings among S&P, Fitch and Moodys 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 the subadviser to accurately predict risk. There is a greater risk with high-yield/high-risk fixed income securities that an issuer will not be able to make principal and interest payments when due. If a 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 Risk
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 funds preferred stock holdings and any bond holdings could drop as well. The funds income also would likely be affected adversely when prevailing short-term interest rates increase.
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  • Industry/Sector Concentration Risk. The risk that events negatively affecting an industry or market sector in which a fund focuses its investments will cause the value of the funds shares to decrease, perhaps significantly. To the extent that the fund invests a significant portion of its portfolio in one or more industries (such as communications, consumer cyclicals and consumer non-cyclicals) or sectors, the fund is more vulnerable to conditions that negatively affect such industries or sectors as compared to a fund that is not significantly invested in such industries or sector.
Leverage Risks
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.
Liquidity Risk
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.
In addition to this, certain shareholders, including affiliates of a funds investment adviser and/or subadviser(s), may from time to time own or control a significant percentage of the funds shares. Redemptions by these shareholders of their shares of the fund may increase the funds liquidity risk by causing the fund to have to sell securities at an unfavorable time and/or price.
Market Volatility Risk
The value of the securities in which a fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or may last for extended periods.

Instability in the financial markets has 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 funds ability to achieve its investment objective.
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. 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. The benefit derived from the funds investment in MLPs is largely dependent on the MLPs being treated as partnerships for federal income tax purposes, so any change to this status would adversely affect the price of the MLP units.
New Fund Risk
Each fund is a new fund which may result in additional risk. There can be no assurance that a fund will grow to an economically viable size, in which case the fund may cease operations. In such an event, investors may be required to liquidate or transfer their investments at an inopportune time. You should consider your own investment goals, time horizon and risk tolerance before investing in the fund.
Non-Diversification Risk
As a non-diversified investment company, the fund is not limited in the proportion of assets that it may invest in the securities of any one issuer. If the fund takes concentrated positions in a small number of issuers, the fund may be more susceptible to the risks associated with those issuers, or to a single economic, political, regulatory or other event affecting those issuers.
Portfolio Turnover Risk
A funds investment strategy may result in consistently frequently high turnover rate. A high portfolio turnover rate may result in correspondingly greater brokerage commission expenses and the distribution to shareholders of additional capital gains for tax purposes, some of which may be taxable at ordinary income rates. These factors may negatively affect the funds performance.
Preferred Stocks Risk
Preferred stocks may provide a higher dividend rate than the interest yield on debt securities of the same issuer, but are subject to greater risk of fluctuation in market value and greater risk of non-receipt of income. Unlike interest on debt securities, dividends on preferred stocks must be declared by the issuers board of directors before becoming payable. Preferred stocks are in many ways like perpetual debt securities, providing a stream of income but without stated maturity date. Because they often lack a fixed maturity or redemption date, preferred stocks are likely to fluctuate substantially in price when interest rates change. Such fluctuations generally are comparable to or exceed those of long-term government or corporate bonds (those with maturities of fifteen to thirty years). Preferred stocks have claims on assets and earnings of the issuer which are subordinate to the claims of all creditors but senior to the claims of common stockholders. A preferred stock rating differs from a bond rating because it applies to an equity issue which is intrinsically different from, and subordinated to, a debt issue. Preferred stock ratings generally represent an assessment of the capacity and willingness of an issuer to pay preferred stock dividends and any applicable sinking fund obligations. Preferred stock also may be subject to optional or mandatory redemption provisions, and may be significantly less liquid than many other securities, such as U.S. Government securities, corporate debt or common stock.
Sector Concentration Risk
The value of the investments of a fund that focuses its investments in a particular market sector will be highly sensitive to financial, economic, political and other developments affecting that market sector, and conditions that negatively

impact that market sector will have a greater impact on the fund as compared with a fund that does not have its holdings similarly focused. Events negatively affecting the market sectors in which a fund has invested are therefore likely to cause the value of the funds shares to decrease, perhaps significantly.
Short-Term Investments
Short-term investments include money market instruments, repurchase agreements, certificates of deposits and bankers acceptances and other short-term instruments that are not U.S. Government securities. These securities generally present less risk than many other investments, but they are generally subject to credit risk and may be subject to other risks as well.
Short Sales Risk
The fund may engage in short sales, which are transactions in which the fund sells a security that it does not own (or that it owns but does not intend to deliver) in anticipation that the price of the security will decline. In order to establish a short position in a security, a fund must first borrow the security from a broker or other institution to complete the sale. The fund may not always be able to borrow a security, or to close out a short position at a particular time or at an acceptable price. If the price of the borrowed security increases between the date of the short sale and the date on which the fund acquires the security, the fund may experience a loss. The funds loss on a short sale is limited only by the maximum attainable price of the security (which could be limitless) less the price the fund paid for the security at the time it was borrowed.
U.S. Government Securities Risk
Obligations issued or guaranteed by the U.S. Government, its agencies, authorities and instrumentalities and backed by the full faith and credit of the United States only guarantee principal and interest will be timely paid to holders of the securities. The entities do not guarantee that the value of fund shares will increase, and in fact, the market values of such obligations may fluctuate. In addition, not all U.S. Government securities are backed by the full faith and credit of the United States; some are the obligation solely of the entity through which they are issued. There is no guarantee that the U.S. Government would provide financial support to its agencies and instrumentalities if not required to do so by law.

Management of the Funds
The Adviser
Virtus Alternative Investment Advisers, Inc. (VAIA) is the investment adviser to the funds and is located at 100 Pearl Street, Hartford, CT 06103. VAIA, an indirect, wholly-owned subsidiary of Virtus Investment Partners, Inc., a publicly traded multi-manager asset management business, acts as the investment adviser to open- and closed-end funds totaling $____ million in assets under management as of December 31, 2014.
Subject to the direction of the funds Board of Trustees, VAIA is responsible for managing the funds investment programs and for the general operations of the funds, including oversight of the funds subadvisers, and recommending their hiring, termination and replacement.
As of the date of this prospectus, VAIA has appointed and oversees the activities of each of the subadvisers for the funds as follows. Each subadviser manages the invetments of the fund to conform with its investment policies as described in this prospectus.
 
Virtus Long/Short Equity Fund
Sirios Capital Management, L.P. ("Sirios")
Virtus Multi-Strategy Target Return Fund
Aviva Investors Americas LLC ("AIA")
Management Fees
Each fund pays VAIA an investment management fee that is accrued daily against the value of the funds average daily net assets at the annual rates shown in the table below.
 
First $x billion
$x+ billion
Virtus Long/Short Equity Fund
____
%
____
%
Virtus Multi-Strategy Target Return Fund
____
%
____
%
Out of its investment management fee, VAIA pays each subadviser a subadvisory fee.
The Subadvisers
AIA is located at 225 West Wacker Drive, Suite 1750, Chicago, IL 60606 and as been a registered investment adviser since 2012. As of December 31, 2014, AIA had assets under management of approximately $____.
Sirios is located at One International Place, Boston, MA 02110 and has been an investment adviser since 1999. As of December 31, 2014, Sirios had assets under management of approxately $3.7 billion.
A discussion regarding the basis for the Board of Trustees approving the investment advisory and subadvisory agreements for the funds is expected to be available in the funds semiannual report covering the period from inception through April 30, 2015.
The funds and VAIA have received an exemptive order from the Securities and Exchange Commission (SEC) that permits VAIA, subject to certain conditions and without the approval of shareholders to: (a) select both unaffiliated subadvisers and certain wholly-owned affiliated subadvisers to manage all or a portion of the assets of a fund, and enter into subadvisory agreements with such subadvisers, and (b) materially amend subadvisory agreements with such subadvisers. In such circumstances, shareholders would receive notice of such action.
Portfolio Management
The following individuals are jointly and primarily responsible for the day-to-day management of the funds portfolios.
AIA
 
Virtus Multi-Strategy Target Return Fund
[PM name to be filed by amendment]
[PM name to be filed by amendment] [PM bio to be filed by amendment]
Sirios
 
Virtus Long/Short Equity Fund
John F. Brennan, Jr. (since March 2015)
John F. Brennan, Jr. Mr. Brennan co-founded Sirios in 1999 and currently serves as Managing Director. Prior to co-founding Sirios, Mr. Brennan was a senior vice president (1998 to 1999) of MFS Investment Management where he served as analyst and portfolio manager (1985 to 1999) and member of the MFS Advisory Board and MFS Equity Management Group (1998 to 1999).

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.

Additional Investment Techniques
In addition to the Principal Investment Strategies and Risks Related to Principal Investment Strategies, each of the funds may engage in additional investment techniques that present additional risks to a fund as described below. Those additional investment techniques in which a fund is expected to engage as of the date of this prospectus are described below, although other techniques may be utilized from time to time. The information below the chart describes the additional investment techniques and their risks. Many of the additional investment techniques that a fund may use, as well as other investment techniques that are relied upon to a lesser degree, are more fully described in the SAI.
 
Risks
Long/Short Equity Fund
Multi-Strategy Target Return Fund
Equity REIT Securities
X
Illiquid and Restricted Securities
X
Loan Participations
X
Mutual Fund Investing
X
Preferred Stocks
X
Private Placements
X
Securities Lending
X
X
In order to determine which investment techniques apply to a fund, please refer to the table above.
Equity REIT Securities
REITs are financial vehicles that pool investor capital to purchase or finance real estate. Equity REITs invest primarily in direct ownership or lease of real property, and they derive most of their income from rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Investing in equity REITs and REIT-like entities involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs and REIT-like entities are typically small or medium market capitalization companies, and they are subject to management fees and other expenses. A fund that invests in REITs and REIT-like entities will bear its proportionate share of the costs of the REITs and REIT-like entities operations. REITs and REIT-like entities are dependent upon management skill, may not be diversified, and are subject to heavy cash flow dependency and self-liquidation. REITs and REIT-like entities also are subject to the possibility of failing to qualify for tax-free pass-through of income. Also, because REITs and REIT-like entities typically are invested in a limited number of projects or in a particular market segment, these entities are more susceptible to adverse developments affecting a single project or market segment than more broadly diversified investments. In the event of a default by a borrower or lessee, a 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, depending upon the nature of dividends received by the fund.
Illiquid and Restricted Securities Risk
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.
Loan Participation Risk
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 borrowers principal and interest payments. The principal credit risk associated with acquiring loan participation interests is the credit risk associated with the underlying corporate borrower. There is also a risk that there may not be a readily available market for loan participation interests and, in some cases, this could result in a fund disposing of such securities at a substantial discount from face value or holding such securities until maturity.
Mutual Fund Investing Risk
Through its investments in other mutual funds, a fund is exposed to not only to the risks of the underlying funds investments but also to certain additional risks. Assets invested in other mutual funds incur a layering of expenses, including operating costs, advisory fees and administrative fees that you, as a shareholder in the fund, indirectly bear. Such fees and expenses may exceed the fees and expenses the fund would have incurred if it invested in the underlying funds assets directly. To the extent that the expense ratio of an underlying fund changes, the weighted average operating expenses borne by the fund may increase or decrease. An underlying fund may change its

investment objective or policies without the approval of the fund, and the fund might be forced to withdraw its investment from the underlying fund at a time that is unfavorable to the fund. If a fund invests in closed-end funds, it may incur added expenses such as additional management fees and trading costs and additional risks associated with trading at a discount to NAV and use of leverage.
Preferred Stock
Preferred stocks may provide a higher dividend rate than the interest yield on debt securities of the same issuer, but are subject to greater risk of fluctuation in market value and greater risk of non-receipt of income. Unlike interest on debt securities, dividends on preferred stocks must be declared by the issuers board of directors before becoming payable. Preferred stocks are in many ways like perpetual debt securities, providing a stream of income but without stated maturity date. Because they often lack a fixed maturity or redemption date, preferred stocks are likely to fluctuate substantially in price when interest rates change. Such fluctuations generally are comparable to or exceed those of long-term government or corporate bonds (those with maturities of fifteen to thirty years). Preferred stocks have claims on assets and earnings of the issuer which are subordinate to the claims of all creditors but senior to the claims of common stockholders. A preferred stock rating differs from a bond rating because it applies to an equity issue which is intrinsically different from, and subordinated to, a debt issue. Preferred stock ratings generally represent an assessment of the capacity and willingness of an issuer to pay preferred stock dividends and any applicable sinking fund obligations. Preferred stock also may be subject to optional or mandatory redemption provisions, and may be significantly less liquid than many other securities, such as U.S. Government securities, corporate debt or common stock.
Private Placements
A fund may purchase securities which have been privately issued to qualified institutional investors under special rules adopted by the SEC. Such securities may offer higher yields than comparable publicly traded securities. Privately issued securities ordinarily can be sold by a fund only in secondary market transactions to certain qualified investors pursuant to rules established by the SEC or privately negotiated transactions to a limited number of purchasers. Therefore, sales of such securities by a fund may involve significant delays and expense.
Securities Lending
The 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 respective fund can suffer losses. In addition, there is a risk of delay in receiving additional collateral or in the recovery of the securities, and a risk of loss of rights in the collateral, in the event that the borrower fails financially. There is also a risk that the value of the investment of the collateral could decline, causing a loss to the fund.

Pricing of Fund Shares
How is the Share Price Determined?
Each fund calculates a share price for each class of its shares. The share price for each class is based on the net assets of the fund and the number of outstanding shares of that class. In general, each fund calculates a share price for each class by:
  • adding the values of all securities and other assets of the fund;
  • subtracting liabilities; and
  • dividing the result by the total number of outstanding shares of that class.
Assets: Equity securities are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded, or, if no closing price is available, at the last bid price. Shares of other investment companies are valued at such companies net asset values (NAVs). Debt securities (other than short-term investments) are valued on the basis of broker quotations or valuations provided by a pricing service, which in determining value utilizes information with respect to recent sales, market transactions in comparable securities, quotations from dealers, and various relationships between securities. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Other assets, such as accrued interest, accrued dividends and cash are also included in determining a funds 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 classs 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 classs 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 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 funds shares may change on days when shareholders will not be able to purchase or redeem the funds shares.
How are securities fair valued?
If market quotations are not readily available or available prices are not reliable, the funds determine a fair value for an investment according to policies and procedures approved by the Board of Trustees. The types of assets for which such pricing might be required include: (i) securities whose trading has been suspended; (ii) securities where the trading market is unusually thin or trades have been infrequent; (iii) debt 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 securitys 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 securitys fair value on the valuation date (i.e., the amount that the fund might reasonably expect to receive for the security upon its current sale), based on a consideration of all available facts and all available information, including, but not limited to, the following: (i) the fundamental analytical data relating to the investment; (ii) the value of other relevant financial instruments, including derivative securities, traded on other markets or among dealers; (iii) an evaluation of the forces which influence the market in which these securities are purchased and sold (e.g., the existence of merger proposals or tender offers that might affect the value of

the security); (iv) the type of the security; (v) the size of the holding; (vi) the initial cost of the security; (vii) trading volumes on markets, exchanges or among broker- dealers; (viii) price quotes from dealers and/or pricing services; (ix) 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 companys 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 securitys 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 days 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 days NAV. Shares credited to your account from the reinvestment of a funds distributions will be in full and fractional shares that are purchased at the closing NAV on the next business day on which the funds NAV is calculated following the dividend record date.

Sales Charges
What are the classes and how do they differ?
Currently, each fund offers three classes of shares. Each class of shares has different sales and distribution charges. (See Fund Fees and Expenses in each funds 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
Virtus Long/Short Equity Fund
0.25
%
1.00
%
None
Virtus Multi-Strategy Target Return Fund
0.25
%
1.00
%
None
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 funds 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 and minor children. The financial representative may request that you provide an account statement or other holdings information to determine your eligibility for a breakpoint and 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 Alternative Solutions 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 Virtus Strategic Income Fund, you will pay a sales charge at time of purchase equal to 3.75% of the offering price (3.90% 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 finders fee being paid. For Virtus fixed income funds, Virtus AlphaSector Rotation Fund and Virtus Disciplined Select Bond 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 finders 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.

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, 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.
Initial Sales Charge AlternativeClass 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 funds underwriter, VP Distributors, LLC (VP Distributors or the Distributor).
Sales Charge you may pay to purchase Class A Shares
Virtus Strategic Income Fund
 
Sales Charge as a percentage of
Amount of Transaction at Offering Price
Offering Price
Net Amount Invested
Under $50,000
3.75
%
3.90
%
$50,000 but under $100,000
3.50
3.63
$100,000 but under $250,000
3.25
3.36
$250,000 but under $500,000
2.25
2.30
$500,000 but under $1,000,000
1.75
1.78
$1,000,000 or more
None
None
All Other Funds
 
Sales Charge as a percentage of
Amount of Transaction at Offering Price
Offering Price
Net Amount Invested
Under $50,000
5.75
%
6.10
%
$50,000 but under $100,000
4.75
4.99
$100,000 but under $250,000
3.75
3.90
$250,000 but under $500,000
2.75
2.83
$500,000 but under $1,000,000
2.00
2.04
$1,000,000 or more
None
None
Class A Sales Charge Reductions and Waivers
Investors may 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 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 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 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 the applicable Virtus Funds or their agents at the time of purchase to exercise this right.
Gifting of Shares. If you make a gift of shares of a Virtus Mutual Fund, upon your request you may combine purchases, if made at the same time, of any class of shares of these funds or any other Virtus Mutual Fund at the sales charge discount allowed for the combined purchase. The receiver of the gift may also be entitled to a prospective reduction in sales charges in accordance with the funds right of accumulation or other provisions. You or the receiver of the gift must provide certain account information to Virtus Mutual Funds or their agents at the time of purchase to exercise this right.
Purchase by Associations. Certain groups or associations may be treated as a person and qualify for reduced Class A Share sales charges. The group or association must: (1) have been in existence for at least six months; (2) have a legitimate purpose other than to purchase mutual fund shares at a reduced sales charge; (3) work through an investment dealer; and (4) not be a group whose sole reason for existing is to consist of members who are credit card holders of a particular company, policyholders of an insurance company, customers of a bank or a broker-dealer or clients of an investment adviser.
Account Reinstatement Privilege. Subject to the funds policies and procedures regarding market timing, for 180 days after you sell your Class A Shares on which you previously paid a sales charge, you may purchase Class A Shares of any Virtus Mutual Fund at NAV, with no sales charge, by reinvesting all or part of your proceeds, but not more.
Sales at Net Asset Value. In addition to the programs summarized above, the funds may sell their Class A Shares at NAV without an initial sales charge to certain types of accounts or account holders, including, but not limited to: trustees of these funds and/or 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 finders fee has been paid may incur a CDSC if they redeem their shares within 18 months of purchase. For Virtus fixed income funds, Virtus AlphaSector Rotation Fund and Virtus Disciplined Select Bond 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 finders 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 AlternativeClass 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
%