Mutual Fund Summary Prospectus (497k)
June 13 2013 - 3:49PM
Edgar (US Regulatory)
Summary Prospectus January 31, 2013,
as supplemented and revised June 11, 2013
Virtus Allocator Premium
AlphaSector
SM
Fund
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A: VAAAX
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C: VAACX
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I: VAISX
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Before you invest, you may want to review the funds prospectus, which contains more information about the fund and its risks.
You can find the funds prospectus, statement of additional information (SAI), annual report and other information about the fund online at
virtus.com/products/prospectuses
.
You can also get this information at no cost by calling 800-243-1574 or by sending an e-mail to:
virtus.investment.partners@virtus.com
. If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the prospectus and other information will also be available from your financial intermediary.
The funds prospectus dated January 31, 2013, as supplemented and revised June 11, 2013, and SAI dated June 10,
2013, are incorporated by reference into this Summary Prospectus.
Investment
Objective
The fund has an investment objective of capital appreciation. In pursuing this objective, the fund maintains an emphasis on
preservation of capital.
Fees
and Expenses
The tables below illustrate all fees and expenses that you may pay if you buy and hold shares of the fund. You may qualify for
sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Virtus Mutual Funds. More information about these and other discounts is available from your financial advisor and under Sales
Charges on page 198 of the funds prospectus and Alternative Purchase Arrangements on page 91 of the funds statement of additional information.
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Shareholder Fees
(fees paid directly from your investment)
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Class A
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Class C
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Class I
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Maximum Sales Charge (load) Imposed on Purchases (as a percentage of
offering price)
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5.75%
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None
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None
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Maximum Deferred Sales Charge (load) (as a percentage of the lesser of
purchase price or redemption proceeds)
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1.00%
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(a)
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1.00%
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(
b
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None
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Annual Fund Operating
Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Class A
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Class C
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Class I
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Management Fees
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1.10%
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1.10%
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1.10%
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Distribution and Shareholder Servicing (12b-1) Fees
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0.25%
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1.00%
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(
e
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None
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Other Expenses
(d)
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0.35%
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0.35%
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0.35%
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Acquired Fund Fees and Expenses
(
c
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0.29%
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0.29%
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0.29%
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Recapture of Previously Waived Expenses
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0.03%
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0.03%
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0.03%
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Total Annual Fund Operating Expenses
(
d
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2.02%
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2.77%
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1.77%
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Less: Fee Waiver
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(0.02)%
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(
e
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Total Annual Fund Operating Expenses After Fee Waiver
(d)
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2.02%
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2.75%
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1.77%
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(a)
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Generally, Class A Shares are not subject to any charges by the Fund when redeemed; however, a contingent deferred sales charge may be imposed on certain redemptions (i)
within 18 months on exchanges from a Virtus non-money market fund into a Virtus money market fund; and (ii) on purchases on which a finders fee has been paid. The 18-month period begins on the last day of the month preceding the month in which
the purchase was made.
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(b)
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The deferred sales charge is imposed on Class C Shares redeemed during the first year only.
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(c)
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The Total Annual Fund Operating Expenses do not correlate to the ratio of expense to average net assets appearing in the Financial Highlights tables, which tables reflect only
the operating expenses of the fund and do not include acquired fund fees and expenses.
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(d)
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Restated to reflect current expenses.
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(e)
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The funds distributor has contractually agreed to waive its 12b-1 fees applicable to Class C Shares to the extent that the funds investments in underlying ETFs with
their own 12b-1 fees would otherwise cause the total 12b-1 fees paid directly or indirectly by the fund to exceed the limits set forth in applicable law or regulation.
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Example
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the funds operating expenses remain the same and that the expense reimbursement
arrangement remains in place only for the period indicated. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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Share
Status
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1 Year
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3 Year
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5 Year
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10 Year
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Class A
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Sold or Held
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$768
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$1,172
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$1,600
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$2,788
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Class C
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Sold
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$378
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$853
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$1,454
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$3,080
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Held
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$278
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$853
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$1,454
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$3,080
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Class I
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Sold or Held
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$180
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$557
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$959
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$2,084
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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. During the most recent fiscal year, the funds portfolio turnover rate was 211% of the average value of its portfolio.
Investments, Risks and Performance
Principal Investment Strategies
The fund
allocates net assets to multiple asset classes including: U.S. Equity, International Equity, Fixed Income, and Alternative. Allocations within each asset class are based on proprietary quantitative models.
The U.S. Equity allocation may be invested in ETFs and/or securities representing the primary sectors of the S&P 500
®
Index. The primary sectors of the S&P 500
®
Index are: consumer discretionary, consumer staples, energy, financials, healthcare, industrials, materials, technology, and utilities. The International Equity
allocation may be invested in ETFs and/or securities representing both developed markets (EAFE) and emerging markets. The Fixed Income allocation may be invested in ETFs and/or securities representing fixed income sectors including: high yield,
investment grade corporate, mortgages, intermediate treasuries and inflation-protected treasuries (TIPS). The Alternative allocation may be invested in ETFs and/or securities representing gold, real estate and broad-based equity securities. The fund
may also invest in stocks (without restriction as to market capitalization), bonds (without restriction as to credit quality) and short-term securities. The fund may invest in a basket of securities to represent a sector if it determines that
investment in the ETF for that sector is not feasible or otherwise not in the best interest of the fund. The fund may also deviate from a model allocation if it is determined that tracking the model allocation is likely to violate applicable legal
or regulatory restrictions or otherwise result in adverse consequences for the fund. In times of market weakness, the fund has the ability to move partially or fully to short-term cash equivalents.
Principal Risks
The fund may not achieve its objective, 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 adviser expects. 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 ETFs in which the fund invests. The principal risks of investing in the fund are:
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Commodity Risk.
The risk that
investments in commodities, such as gold, or commodity-linked notes will subject the funds portfolio to greater volatility than investments in traditional securities, or that commodity-linked instruments will experience returns different from
the commodities they attempt to track.
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Credit Risk.
The risk that the
issuer of a security will fail to pay interest or principal in a timely manner, or that negative perceptions of the issuers ability to make such payments will cause the price of the security to decline.
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Emerging Market Investing Risk.
The
risk that prices of emerging markets securities will be more volatile, or will be more greatly affected by negative conditions, than those of their counterparts in more established foreign markets.
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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
smaller companies may be more volatile than investments in larger companies.
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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.
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>
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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 economic, political or other developments.
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High Yield-High Risk Fixed Income Securities Risk.
The risk that the 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.
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Interest Rate Risk.
The risk that
when interest rates rise, the values of the funds debt securities, especially those with longer maturities, will fall.
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Market Volatility Risk.
The risk
that the value of the securities in which the fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or may last for extended periods.
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Model Portfolio Risk.
The risk that
investments selected using quantitative models may perform differently from the market as a whole or from their expected performance. There can be no assurance that use of a quantitative model will enable the fund to achieve positive returns or
outperform the market.
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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 fund
performance.
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Real Estate Investment Risk.
The
risk that the value of the funds shares will be negatively affected by factors specific to the real estate market, including interest rate risk, leverage risk, property risk and management risk.
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Sector Focused Investing Risk.
The
risk that events negatively affecting a particular industry or market sector in which the 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 ETFs representing one or more of the primary sectors of the S&P 500
®
Index
(such as consumer discretionary, energy, healthcare) or in an ETF representing U.S. Treasuries, the fund is more vulnerable to conditions that negatively affect such sectors as compared to a fund that is not significantly invested in such sectors.
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U.S. Government Securities Risk.
The risk that 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.
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Performance Information
The bar chart and table below provide some indication of the potential risks of investing in the fund. The funds past performance,
before and after taxes, is not necessarily an indication of how the fund will perform in the future.
The bar chart shows changes in the funds
performance for its first full year of operations. The table shows how the funds average annual returns compare to those of a broad-based securities market index and a composite benchmark. Updated performance information is available at
virtus.com
or by calling 800-243-1574.
Calendar year total returns for Class A Shares
Returns do not reflect sales charges and would be lower if they did.
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Best
Quarter: Q1/2012: 4.87%
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Worst Quarter:
Q2/2012: -0.55%
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Average Annual Total Returns
(for the periods ended
12/31/12)
Returns reflect deduction of maximum sales charges and full redemption at end of
periods shown.
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1 Year
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Since
Inception
(3/15/11)
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Class A
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Return Before Taxes
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2.51%
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0.85%
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Return After Taxes on
Distributions
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2.46%
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0.79%
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Return After Taxes on Distributions and
Sale of Fund Shares
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1.89%
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0.76%
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Class C
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Return Before Taxes
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7.99%
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3.52%
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Class I
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Return Before Taxes
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8.97%
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4.49%
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S&P 500
®
Index (reflects no deduction for fees, expenses or taxes)
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16.00%
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8.45%
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Dow Jones Global Moderate Portfolio Index
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11.24%
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5.99%
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The S&P 500
®
Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The Dow Jones Global Moderate Portfolio Index is a benchmark that
takes 60% of the risk of the global securities market. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash. The Index is the efficient allocation of stocks, bonds, and cash in a portfolio with 60% of the
risk of the Dow Jones Aggressive Portfolio Index. The indexes are calculated on a total return basis with dividends reinvested. The indexes are unmanaged and not available for direct investment.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
After-tax returns are shown only for Class A Shares; after-tax returns for other classes will vary. Actual after-tax returns depend on the investors tax situation and may differ from those shown. After-tax returns are not relevant to
investors who hold fund shares in tax-deferred accounts or to shares held by non-taxable entities. In certain cases, the Return After Taxes on Distributions and Sale of Fund Shares for a period may be higher than other return figures for the same
period. This will occur when a capital loss is realized upon the sale of fund shares and provides an assumed tax benefit that increases the return.
Management
The funds investment adviser is Virtus Investment Advisers, Inc.
(VIA).
The funds subadvisers are Euclid Advisors LLC (Euclid), an affiliate of VIA, and F-Squared Institutional Advisors,
LLC (F-Squared Institutional).
3
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c/o Virtus Mutual Funds
P.O. Box 9874
Providence, RI 02940-8074
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Portfolio Management
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Howard Present,
Co-founder,
President and CEO of F-Squared Institutional, is a manager of the fund. Mr. Present has served as a Portfolio Manager of the fund since inception in March 2011.
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Amy Robinson,
Managing Director at
Euclid, is a manager of the fund. Ms. Robinson has served as a Portfolio Manager of the fund since inception in March 2011.
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Purchase and Sale of Fund Shares
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Purchase Minimums
(except Class I
Shares)
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Minimum Initial Purchase
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$2,500
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Individual Retirement Accounts (IRAs),
systematic purchase or systematic exchange accounts
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$100
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Defined contribution plans, asset-based
fee programs, profit-sharing plans or employee benefit plans
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No minimum
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Minimum Additional Purchase
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$100
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Defined contribution plans, asset-based
fee programs, profit-sharing plans or employee benefit plans
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No minimum
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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 either as 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.
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