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Investment Opportunity

The fund has an investment objective of high total return from current income and capital appreciation and seeks to deliver the returns of the Newfound Select Bond Total Return Index (NSBX), a public index published by NASDAQ. The fund seeks to generate excess returns in the fixed income market by capturing relative performance opportunities between Treasuries, Treasury Inflation Protected Securities (TIPS), and Corporate Bonds. Each allocation may be invested in ETFs and/or baskets of securities representative of such ETFs. The fund may invest in a basket of securities to represent an ETF if it determines that investment in the ETF is not feasible or otherwise not in the best interest of the fund.

Fund Risks

Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a security may fail to make payments in a timely manner. Values of debt securities may rise and fall in response to changes in interest rates. This risk may be enhanced with longer-term maturities.

The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.

There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Securities in the fund may go up or down in response to the prospects of individual companies and general economic conditions. Price changes may be short or long term.

U.S. government securities may be subject to price fluctuations. An agency may default on an obligation not backed by the United States. Any guarantee on U.S. government securities does not apply to the value of the fund's shares.

Key Stats (as of 4/15/2014)

Inception: 12/18/2012
Ticker: VDBAX
CUSIP: 92828W726
Fund No: 2413
Net Assets by Fund: $1,055,118
Net Assets by Class: $151,218

Management Team

Corey Hoffstein
Corey Hoffstein Newfound Investments

Industry start date: 2008

Start date with Fund: 2012

Amy Robinson
Amy Robinson Newfound Investments

Industry start date: 1979

Start date with Fund: 2012

Newfound Investments

Newfound Investments is a partnership between Virtus Investment Partners and Newfound Research, a financial technology and product innovation firm offering clients agile and accessible quantitative solutions. The capabilities of Newfound Research range from proprietary tactical timing models and proprietary risk measures to customized allocation techniques. Newfound Investments leverages the research capabilities and tactical asset allocation models of Newfound Research with the objective of building alpha-generating portfolios across asset classes.

Average Annual Total Returns

Monthly Performance (%) (as of 3/31/2014)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 1.93 1.93 -2.73 NA NA NA -2.21
POP -1.90 -1.90 -6.38 NA NA NA -5.09
Quarterly Performance (%) (as of 3/31/2014)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 1.93 1.93 -2.73 NA NA NA -2.21
POP -1.90 -1.90 -6.38 NA NA NA -5.09
Index 1.84 1.84 -0.10 3.75 4.80 4.46 NA

3 Mon., YTD and 1 Year performance is not annualized.

Index: Barclays U.S. Aggregate Bond Index
The Barclays U.S. Aggregate Bond Index measures the U.S. investment grade fixed rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Sales Charge and Expense

POP (Public Offering Price) performance reflects the deduction of the maximum sales charge of 3.75%. A contingent deferred sales charge of 0.50% may be imposed on certain redemptions within 18 months on exchanges from a Virtus non-money market fund into a Virtus money market fund and purchases on which a finder’s fee has been paid.

Fund class operating expenses are 1.40% and gross operating expenses are 9.63%.

Operating expenses reflect a voluntary expense reimbursement, which may be discontinued at any time.

Operating expenses do not include indirect expenses incurred by the underlying funds in which the Fund invests.

Daily Price (as of 4/15/2014)

NAV Change ($)
9.61 0.02
POP Change ($)
9.98 0.02

Yields/Distributions1 (as of 12/31/2013)

Distribution Yield (at NAV) 3.29%
SEC Yield 3.05%
SEC Yield (gross) -2.57%
Distributions Current Month $0.077000
Distributions YTD $0.157000

Distribution History2 (March 2014)

Ex-Date 03/28/2014
Income $0.010000
STCG $0.000000
LTCG $0.000000
Reinvest NAV $9.52

Investors should carefully consider the investment objectives, risks, charges and expenses of any Virtus Mutual Fund before investing. The prospectus and summary prospectus contains this and other information about the fund. Please contact your financial representative, call 1-800- 243-4361 or visit www.virtus.com to obtain a current prospectus and/or summary prospectus. You should read the prospectus and/or summary prospectus carefully before you invest or send money.


Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Average annual total return is the annual compound return for the indicated period. It reflects the change in share price and the reinvestment of all dividends and capital gains. NAV returns do not include the effect of any applicable sales charges. POP and w/CDSC returns include the effect of maximum applicable sales charges.

Returns for periods of less than one year are cumulative total returns.

1 Yields/Distributions: Distribution Yield (at NAV) is calculated by annualizing the latest month's distribution and dividing by the NAV on the last business day of the period. SEC Yield represents the net investment income earned by a fund over a 30-day period (7-day period for Money Market Funds), expressed as an annual percentage rate based on the fund's public offering share price at the end of the 30-day period (7-day period for Money Market Funds).

2 Distribution History: Distributions are represented on a cash basis and may be reclassified at year end for tax purposes. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. STCG: Short Term Capital Gain, LTCG: Long Term Capital Gain

3 Risk Statistics:  R2 is a statistical measure that represents the percentage of a fund or security's movements that can be explained by movements in a benchmark index. Beta is a quantitative measure of the volatility of a given portfolio to the overall market. Alpha is a risk adjusted measure of an investment's excess return relative to a benchmark. A positive Alpha indicates that the investment produced a return greater than expected for the risk (as measured by Beta) taken. Standard Deviation measures variability of returns around the average return for an investment fund. Higher standard deviation suggests greater risk. Risk Statistics are calculated using 36 monthly returns.

4 Characteristics: For Equity Funds:Trailing P/E: Per-share stock price divided by the latest12-months Earnings per Share; Price/Cash Flow: Per-share stock price divided by the per-share operating cash flow; Price/Book: Per-share stock price divided by the latest 12-month per-share Book Value; 3-Year EPS Growth Rate: Average of earnings per share growth for latest 3-year period. The 3-Year EPS Growth Rate is not a forecast of the fund's performance.

4 Characteristics: For Fixed Income Funds:  Duration represents the interest rate sensitivity of a fixed income fund. For example, if a fund's duration is five years, a 1% increase in interest rates would result in a 5% decline in the fund's price. Similarly, a 1% decline in interest rates would result in a 5% gain in the fund's price.



Morningstar Disclosures: 
For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for a variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in an investment category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. Ratings are for the A Shares as shown only; other share classes bear different fees and expenses, which affect performance.

Load-waived A share star ratings do not include any front-end sales load and are intended for those investors who have access to such purchase terms (e.g., plan participants of a defined contribution plan). Not all A share mutual funds for which Morningstar calculates a load-waived A share star rating may actually waive their front-end sales load. Therefore, Morningstar strongly encourages investors to contact their investment professional to determine whether they are eligible to purchase the A share without paying the front load.

© 2013 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.