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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| 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 Risk |
> Derivatives Risk: Derivatives and other similar
instruments (collectively referred to in this section as “derivatives”) may include, among other
things, futures, options, forwards and swap agreements and may be used in order to hedge portfolio risks,
create leverage or attempt to increase returns. Investments in derivatives may result in increased volatility
and the fund may incur a loss greater than its principal investment.
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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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| 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 NAV 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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| Subsidiary Risk |
> Subsidiary
Risk: By investing in the Subsidiary, the fund is
indirectly exposed to the risks associated with the Subsidiary’s investments, which are generally similar
to those that are permitted to be held by the fund. The Subsidiary is not registered under the Investment
Company Act of 1940, as amended (the “1940 Act”) and is not subject to all of the investor protections
of the 1940 Act. Changes in the laws of the United States and/or the Cayman Islands could result in the
inability of the fund and/or the Subsidiary to operate as described in this prospectus and the fund’s
Statement of Additional Information, and could adversely affect the fund.
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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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