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Monday, March 21, 2011

Virtus Bets on Alpha and Commodities With Three New Funds

Reported by Neil Anderson, Managing Editor

Virtus Investment Partners [see profile] just launched three new mutual funds, with support from Coxe Advisors, F-Square Investments and Harris Investment Management. Today the Hartford-based mutual fund firm unveiled the Virtus Allocator Premium AlphaSector Fund, the Virtus Global Premium AlphaSector Fund and the Virtus Global Commodities Stock Fund.

Harris, with support from Coxe, sub-advises the Global Commodities Stock Fund, investing in companies related to commodities. F-Square subadvises both new AlphaSector funds using a "proprietary quantitative analytical model" that taps into both ETFs and cash. (Virtus already uses the F-Squared model in two other funds, Virtus Premium AlphaSector and Virtus AlphaSector Rotation.)

The Allocator Premium AlphaSector Fund offers A shares for up to 575 basis points of load and an expense ratio of 208 bps, C shares with a deferred load of up to 100 bps and an expense ratio of 283 bps, and I shares with an expense ratio of 183 bps. The Global Premium AlphaSector Funds' shares include the same loads but expense ratios of 1 bp more across the board. F-Squared co-founder, president and CEO Howard Present and Virtus vice president Amy Robinson PM both new AlphaSector funds.

The Global Commodities Stock Funds' shares also include the same loads, with an 165 bps expense ratio for A shares, 240 bps for C shares and I shares for 140 bps. Coxe chairman and portfolio strategist Donald Coxe and Harris senior PM Andrew Janes both PM the new commodities fund.

Company Press Release

HARTFORD, Conn., March 21, 2011 -- Virtus Investment Partners (Nasdaq:VRTS - News), which operates a multi-manager asset management business, has launched three new mutual funds: the Virtus Allocator Premium AlphaSector™ Fund, the Virtus Global Premium AlphaSector™ Fund, and the Virtus Global Commodities Stock Fund.

"The addition of these three funds expands the breadth and depth of our product offerings and provides additional options for advisors to utilize when constructing portfolios for their clients," said Frank Waltman, executive vice president, product management at Virtus. "The new AlphaSector funds add to the array of product solutions that use the AlphaSector approach, which seeks to minimize portfolio risk during severe market downturns. Through the Virtus Global Commodities Stock Fund, we are able to offer a new product that will help investors gain exposure to the ongoing and increasing global demand for commodities."

About the Funds

The Virtus Allocator Premium AlphaSector Fund (Class A:VAAAX) and the Virtus Global Premium AlphaSector Fund (Class A:VGPAX) invest in a combination of exchange traded funds (ETFs) and cash equivalents. The funds employ a proprietary quantitative analytical model – developed by F-Squared Investments and used in the Virtus Premium AlphaSector™ Fund and the Virtus AlphaSector™ Rotation Fund – that seeks to provide risk controls in down markets and enhanced alpha in up markets.

The Virtus Allocator Premium AlphaSector Fund is a multi-strategy approach that offers global diversification through allocations to four asset classes using ETFs across domestic equities, international and emerging markets equities, fixed income, and alternatives such as real estate and gold. The Global Premium AlphaSector Fund allocates assets to domestic and international equities through the use of nine ETFs which represent the primary sectors of the S&P 500® Index and two international ETFs, representing developed international and emerging markets.

Both funds can take a defensive position in volatile, downward trending markets and allocate up to 100% of assets in cash equivalents and/or Treasuries in the case of the Virtus Allocator Premium AlphaSector Fund and up to 100% of assets in cash equivalents in the case of the Virtus Global Premium AlphaSector Fund.

The Virtus Global Commodities Stock Fund (Class A:VGCAX) invests in the equity securities of commodity and commodity-related companies. The fund will allocate among four commodities sectors: base metals, precious metals, energy, and agriculture. It is designed to take advantage of rising global demand for commodities in both developing and emerging markets.

The Virtus Global Commodities Stock Fund is subadvised by Harris Investment Management in conjunction with specialty commodity firm Coxe Advisors LLP. Portfolio manager Donald Coxe's expertise in global capital markets and commodities is leveraged through macroeconomic research on commodity sectors which is then combined with fundamental, bottom-up security analysis.

About F-Squared Investments, Inc.

F-Squared Investments is an SEC-registered investment advisor whose innovative business model delivers scalable, transparent investment strategies and customizable capabilities with the objective of outperforming the strategy's stated benchmark while also seeking to deliver lower volatility, low beta, and low correlation. The firm creates investment solutions with the goal of generating repeatable, consistently high investment value-add.

About Harris Investments

Harris Investments(SM) is a service mark used by Harris Investment Management, Inc. Harris Investment Management, Inc. is a registered investment adviser with the SEC, and wholly owned subsidiary of Harris Bankcorp, which is a wholly owned subsidiary of Harris Financial Corp., a wholly owned subsidiary of Bank of Montreal. Harris Investments is part of BMO Asset Management™, the umbrella group for BMO Financial Group's institutional investment management companies, which offer a range of investment management products and services to retail and institutional clients globally.

About Coxe Advisors LLP

Coxe Advisors LLP, is an investment management firm located in Chicago, Illinois, providing asset management services for its clients. Coxe Advisors also serves as a Strategy Advisor to BMO Financial Group and Harris Investments which is wholly owned by Harris Bankcorp Inc., which is an indirect wholly owned subsidiary of Bank of Montreal. In addition, Coxe Advisors acts as a Portfolio Consultant to Harris Investment Management regarding the Virtus Global Commodities Stock Fund. Coxe Advisors LLP is a registered investment advisor with the SEC.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (Nasdaq:VRTS - News) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. The company provides investment management products and services through its affiliated managers and select subadvisers, each with a distinct investment style, autonomous investment process and individual brand. Virtus Investment Partners offers access to a variety of investment styles across multiple disciplines to meet a wide array of investor needs. Additional information can be found at www.virtus.com.

Investors should carefully consider a Fund's investment objectives, risks, charges and expenses before investing. For this and other information about any Virtus mutual fund, call 1-800-243-4361 or visit Virtus.com for a prospectus. Read it carefully before you invest or send money.

Lack of liquidity in an ETF could result in its value being more volatile than the underlying portfolio of securities. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio, or that diversification among different asset classes reduces risk. Because the funds hold a limited number of securities, they will be impacted by each security's performance more than funds with larger numbers of holdings. The guarantee on U.S. government securities applies only to the underlying securities of the fund's portfolio, and not to the value of the fund's shares. Commodity or commodity-related equity prices may fluctuate widely over short time periods. Investing internationally, especially in emerging markets, involves additional currency, political, accounting, and economic and market risks. Because the funds are heavily weighted in a single sector, they will be affected by that sector's performance more than funds with broader sector diversification. Non-diversified portfolios may be more susceptible to any single economic, political or regulatory event affecting an issuer than a diversified portfolio.

Active Index Solutions, LLC is the source and owner of the trademarks, service marks and copyrights related to the AlphaSector Index. AlphaSector is a trademark of Active Index Solutions, LLC.

Mutual Funds distributed by VP Distributors, Inc., member FINRA and subsidiary of Virtus Investment Partners, Inc. 

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