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Investment Opportunity

Diversified across stocks, bonds, and cash, the portfolio's tactical allocation approach seeks to generate a combination of capital appreciation and income. For the fund's equity allocation, the portfolio managers employ a growth at a reasonable price philosophy in the security selection process. The fixed income manager seeks to generate high current income and total return by applying extensive credit research and a time-tested approach to capitalize on opportunities across undervalued sectors of the bond market.

Fund Risks

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.

Allocation: The fund's exposure to different asset classes may not be optimal for market conditions at a given time. Asset allocation does not guarantee a profit or protect against a loss in declining markets.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Prospectus: For additional information on risks, please see the fund's prospectus.

Key Stats (as of 3/30/2015)

Inception: 9/17/1984
CUSIP: 92829L406
Net Assets by Fund: $126,626,428
Net Assets by Class: $126,626,428

Management Team

Carlton Neel
Carlton Neel Euclid Advisors LLC

Industry start date: 1990

Start date with Series: 2009

David Dickerson
David Dickerson Euclid Advisors LLC

Industry start date: 1993

Start date with Series: 2009

David L. Albrycht, CFA
David L. Albrycht, CFA Newfleet Asset Management

Industry start date: 1985

Start date with Series: 2007

Newfleet Asset Management

Newfleet leverages the knowledge and skill of a team of investment professionals with expertise in every sector of the bond market, including evolving, specialized, and out-of-favor sectors. The team employs active sector rotation and disciplined risk management to portfolio construction, avoiding interest rate bets and remaining duration neutral to each strategy's stated benchmark.

Morningstar Ratings

Overall Rating Non Load-Waived

As of 2/27/2015 the Fund was rated 3 stars out of 200 funds, 4 stars out of 170 funds and 4 stars out of 97 funds within the Moderate Allocation category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.

Average Annual Total Returns

Monthly Performance (%) (as of 2/27/2015)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 2.06 2.03 7.60 10.53 11.06 6.79 9.42
Quarterly Performance (%) (as of 12/31/2014)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 2.75 7.51 7.51 12.89 10.67 6.48 9.40
Index 3.67 10.62 10.62 13.12 11.18 6.77 NA

Index: Composite: 60% S&P 500® / 40% Barclays U.S. Aggregate Bond
The composite index consists of 60% S&P 500® Index (a free-float market capitalization-weighted index of 500 of the largest U.S. companies, calculated on a total return basis with dividends reinvested) and 40% Barclays U.S. Aggregate Bond Index (an index that measures the U.S. investment grade fixed rate bond market, calculated on a total return basis). The composite 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

Fund class operating expenses are 0.98% and gross operating expenses are 1.11%.

Operating expenses reflect a contractual expense reimbursement in effect through 04/30/2015.

Risk Statistics3 (as of 12/31/2014)

  Fund Index
R2 0.88 1.00
Beta 1.23 1.00
Alpha -3.00 0.00
Std Dev 7.22 5.48
Index: Composite: 60% S&P 500® / 40% Barclays U.S. Aggregate Bond

Daily Price (as of 3/30/2015)

NAV Change ($)
14.53 0.10

Top Holdings (% Fund)
(as of 12/31/2014)

Ford Motor Company 1.32
JPMorgan Chase & Co. 1.30
Alaska Air Group, Inc. 1.29
Western Digital Corporation 1.28
Southwest Airlines Co. 1.27
QUALCOMM Incorporated 1.26
T. Rowe Price Group 1.26
UnitedHealth Group Incorporated 1.25
Lincoln National Corporation 1.25
Archer-Daniels-Midland Company 1.24

Top Sectors (% Equity)
(as of 12/31/2014)

Consumer Discretionary 20.15
Information Technology 18.53
Financials 17.62
Industrials 16.42
Health Care 12.11

Characteristics4
(as of 12/31/2014)

Avg Weighted Market Cap (bn) $72.17
Median Market Cap (bn) $28.01
Trailing P/E 16.13x
Price-to-Cash Flow 13.63
Price-to-Book Value 3.07
3-Year EPS Growth Rate 17.81

Morningstar Ratings

Overall Rating Non Load-Waived

As of 2/27/2015 the Fund was rated 3 stars out of 200 funds, 4 stars out of 170 funds and 4 stars out of 97 funds within the Moderate Allocation category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.

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.

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

The investments for the Series are managed by the same portfolio manager(s) who manage one or more other funds that have similar names, investment objectives and investment styles as the Series. You should be aware that the Series is likely to differ from the other mutual funds in size, cash flow pattern and tax matters. Accordingly, the holdings and performance of the Series can be expected to vary from those of the other mutual funds.

Shares of the separate Series of Virtus Variable Insurance Trust are sold only through the currently effective prospectuses and are not available to the general public. Shares of the VIT Series may be purchased only by life insurance companies to be used with their separate accounts which fund variable annuity and variable life insurance policies or qualified retirement plans and are also available as an underlying investment fund for certain qualified retirement plans. The performance information for the Series does not reflect fees and expenses of the insurance companies. If such fees and expenses were deducted, performance would be lower.

Please carefully consider the investment objectives, risks, charges, and expenses of the Series before investing. For this and other information about any Virtus Variable Insurance Trust Series, call 1-800-367-5877 or visit Virtus.com for a prospectus and/or summary prospectus. Read it carefully before you invest or send money.


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

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.

Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.

Distributed by VP Distributors, LLC, member FINRA and subsidiary of Virtus Investment Partners, Inc.