Risk Table - Virtus AlphaSimplex Global Alternatives Fund
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Risk [Text Block] |
| Principal Risks |
Principal
Risks The fund may not achieve its objective(s), and it is not intended to be a complete
investment program. The value of the fund’s investments that supports your share value may decrease.
If between the time you purchase shares and the time you sell shares the value of the fund’s investments
decreases, you will lose money. Investment values can decrease for a number of reasons. Conditions affecting
the overall economy, specific industries or companies in which the fund invests can be worse than expected,
and investments may fail to perform as the subadviser expects. As a result, the value of your shares
may decrease. Purchase and redemption activities by fund shareholders may impact the management of the
fund and its ability to achieve its investment objective(s). The principal risks of investing in the
fund are identified below.
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| Risk Lose Money [Member] |
If between the time you purchase shares and the time you sell shares the value of the fund’s investments
decreases, you will lose money.
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| Mutual Fund and ETF Investing Risk |
> Mutual
Fund and ETF Investing Risk: The fund will be indirectly affected by factors,
risks and performance specific to any other mutual fund and/or exchange-traded fund (ETF) (“underlying
fund”) in which it invests. Further, the net asset value per share of each underlying fund will include
the effect of any fees and expenses of the underlying fund, so the fund’s investment in such underlying
funds will cause the fund to indirectly bear its proportionate share of such fees and expenses, which
are reflected in the fund’s Fees and Expenses table as “Acquired Fund Fees and Expenses” if they
are estimated to amount to at least 0.01% of the fund’s total net assets. ETF shares are traded on
a securities exchange, and the market price of an ETF’s shares may fluctuate so that they trade at
a premium or discount to their net asset value per share. As a result, the fund may pay more or receive
less than the net asset value of the ETF shares it buys or sells.
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| Affiliated Fund and ETF Risk |
> Affiliated Fund and ETF Risk: Because the fund’s subadviser
or its affiliate(s) may receive fees from affiliated funds and/or exchange-traded funds (ETFs), some
of which pay the subadviser or its affiliate(s) more than others, the fund’s subadviser has a conflict
of interest in choosing between affiliated and unaffiliated mutual funds/ETFs when selecting and substituting
investments for the fund.
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| Leverage Risk |
> Leverage Risk: When
the fund leverages its portfolio by borrowing or by engaging in certain types of transactions or instruments,
including derivatives, the fund may be less liquid, may liquidate positions at an unfavorable time, and
the volatility of the fund’s value may increase.
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| Derivatives – Futures and Forward Contracts Risk |
> Derivatives
– Futures and Forward Contracts Risk: The use of futures and forwards
involves the risk that changes in the value of the contract may not correlate as expected with the underlying
security, currency, commodity, index, interest rate or other reference measure. Because these instruments
may involve economic leverage, a relatively small movement in the underlying reference measure may result
in a disproportionately large gain or loss to the fund.
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| Equity Securities Risk |
> Equity Securities Risk: The
value of the stocks held by the fund may be negatively affected by the financial market, industries in
which the fund invests, or issuer-specific events. Focus on a particular style or in small or medium-sized
companies may enhance that risk.
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| Short Sales Risk |
> Short
Sales Risk: Generally, to the extent the price of a security sold short
increases between the time of the short sale and the time the fund covers its short position, the fund
will incur a loss. The amount of a potential loss on an uncovered short sale transaction is theoretically
unlimited.
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| Quantitative Model Risk |
> Quantitative Model Risk:
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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| Commodity and Commodity-linked Instruments Risk |
> Commodity
and Commodity-linked Instruments Risk: Commodities and commodity-linked instruments
will subject the fund’s portfolio to greater volatility than investments in traditional securities,
and will depend on factors such as drought, floods, weather, livestock disease, embargoes, tariffs and
other regulatory developments or supply and demand disruptions. Commodity-linked instruments may experience
returns different from the commodity they attempt to track and may also be exposed to counterparty risk.
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| Currency Rate Risk |
> Currency Rate Risk: Fluctuations in the exchange
rates between the U.S. dollar and foreign currencies may negatively affect the value of the fund’s
shares.
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| Foreign Currency Transactions Risk |
> Foreign Currency Transactions Risk: The fund’s transactions with respect to foreign currency may not be successful
or have the effect of limiting gains from favorable market movements.
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| Foreign Investing Risk |
> Foreign Investing Risk: Investing in foreign securities
subjects the fund to additional risks such as increased volatility; currency fluctuations; less liquidity;
less publicly available information about the foreign investment; and political, regulatory, economic,
and market risk.
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| Interest Rate Risk |
> Interest Rate Risk: The
values of debt instruments may rise or fall in response to changes in interest rates, and this risk may
be enhanced for securities with longer maturities.
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| Credit Risk |
> Credit
Risk: If the issuer of a debt instrument fails to pay interest or
principal in a timely manner, or negative perceptions exist in the market of the issuer’s ability to
make such payments, the price of the security may decline.
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| Portfolio Turnover Risk |
> Portfolio
Turnover Risk: The fund’s principal investment strategies may result in
a high portfolio turnover rate. Effects of frequent trading of securities and other instruments, including
derivatives, may include high transaction costs, which may lower the fund’s return, and realization
of greater short-term capital gains, distributions of which are taxable as ordinary income to taxable
shareholders. Trading costs and tax effects associated with frequent trading may adversely affect the
fund’s performance. See the “Portfolio Turnover” section above for more information about the impact
that portfolio turnover can have on your investment.
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| Market Volatility Risk |
> Market
Volatility Risk: The value of the securities in the fund may go up or down
in response to the prospects of individual companies and/or general economic conditions. Price changes
may be short- or long-term. Local, regional or global events such as war or military conflict (e.g.,
Russia’s invasion of Ukraine), geopolitical risk, acts of terrorism, the spread of infectious illness
or other public health issue, recessions, tariffs and other restrictions on trade, or the threat or potential
of one or more such events and developments, could have a significant impact on the fund and its investments,
including hampering the ability of the fund’s portfolio manager(s) to invest the fund’s assets as
intended.
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| Counterparty Risk |
> Counterparty Risk:
There is risk that a party upon whom the fund relies to complete a transaction will default.
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| Hedge Fund Investing Risk |
> Hedge Fund Investing Risk: Although the fund will not
invest directly in hedge funds, because the fund’s investments are intended to provide exposure to
the factors that drive hedge fund returns, an investment in the fund will be subject to many of the same
risks associated with an investment in a diversified portfolio of hedge funds including that the fund’s
performance may be lower than the returns of the broader stock market and the fund’s net asset value
may fluctuate substantially over time.
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| Hedge Fund Correlation Risk |
> Hedge
Fund Correlation Risk: Although the fund does not seek to track any
particular index, the fund seeks to analyze the factors that drive hedge fund returns, as determined
by reference to one or more indices. These indices may not provide an accurate representation of hedge
fund returns generally, and the subadviser’s strategy may not successfully identify or be able to replicate
factors that drive returns. There is a risk that hedge fund return data provided by third party hedge
fund index providers may be inaccurate or may not accurately reflect hedge fund returns due to survivorship
bias, self-reporting bias or other biases.
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| Absolute Return Strategy Investing Risk |
> Absolute
Return Strategy Investing Risk: Absolute return strategies may not achieve
their objective of generating positive returns regardless of the direction of traditional equity and
fixed income markets and may underperform traditional equity and fixed income investments, potentially
by large amounts.
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| Long/Short Strategy Investing Risk |
> Long/Short Strategy Investing Risk: Long/short investing strategies bear the risks associated with both equity investing
and short sales. In addition, a long/short strategy may fail to limit losses during periods of market
decline, and the fund may underperform a long-only equity strategy when equity markets rise significantly.
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| Real Assets Risk |
> Real Assets Risk: Real assets may be particularly
sensitive to changes in commodity prices, inflation and inflation expectations, interest rates, economic
activity, supply and demand, environmental events and natural disasters, political and geopolitical developments,
government regulation and taxation.
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| Liquidity Risk |
> Liquidity
Risk: Certain instruments may be difficult or impossible to sell
at a time and price beneficial to the fund.
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| Management Risk |
> Management
Risk: The subadviser’s judgments about the attractiveness and
potential appreciation of a security may prove to be inaccurate and may not produce the desired results.
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| Allocation Risk |
> Allocation Risk: If the fund’s exposure
to equities and fixed income securities, or to other asset classes, deviates from the intended allocation,
or if the fund’s allocation is not optimal for market conditions at a given time, the fund’s performance
may suffer.
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| Non-U.S. Government Securities Risk |
> Non-U.S. Government Securities Risk: When the Fund invests in debt instruments issued by a government outside the U.S.,
the Fund is exposed to the risks that: (a) the governmental entity that controls the repayment of government
debt may not be willing or able to repay the principal and/or to pay the interest when it becomes due,
due to factors such as political considerations, the relative size of the governmental entity’s debt
position in relation to the economy, cash flow problems, insufficient foreign currency reserves, the
failure to put in place economic reforms required by the International Monetary Fund or other multilateral
agencies, and/or other national economic factors; (b) the issuing government may default on its debt
instruments, which may require holders of such securities to participate in debt rescheduling; and (c)
there is no legal or bankruptcy process by which defaulted government debt may be collected in whole
or in part.
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| Redemption Risk |
> Redemption Risk: One
or more large shareholders or groups of shareholders may redeem their holdings in the fund, resulting
in an adverse impact on remaining shareholders in the fund by causing the fund to take actions it would
not otherwise have taken. The effects of taxable gains resulting from large redemptions of fund shares
would particularly impact non-redeeming shareholders who do not hold their fund shares in a tax-advantaged
or tax-exempt vehicle. Such large shareholder redemptions, which may occur rapidly or unexpectedly, may
cause a fund to sell portfolio securities at times when it would not otherwise do so, which may negatively
impact the fund’s net asset value and liquidity. In addition, a large redemption could result in the
fund’s current expenses being allocated over a smaller asset base, leading to an increase in the fund’s
expense ratio.
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| Government Securities Risk |
> U.S.
Government Securities Risk: U.S. Government securities may be subject to
price fluctuations. An agency may default on an obligation not backed by the full faith and credit of
the United States. Any guarantee on U.S. government securities does not apply to the value of the fund’s
shares.
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| Valuation Risk |
> Valuation Risk:
This is the risk that the fund has valued certain securities or positions at a higher price than the
price at which they can be sold. This risk may be especially pronounced for investments, such as derivatives,
that may be illiquid or may become illiquid.
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