UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22906
Virtus Alternative Solutions Trust
(Exact name of registrant as specified in charter)
101 Munson Street
Greenfield, MA 01301
(Address of principal executive offices) (Zip code)
Jennifer Fromm, Esq.
Vice President, Chief Legal Officer, Counsel and Secretary for Registrant
One Financial Plaza
Hartford, CT 06103-4506
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800)-243-1574
Date of fiscal year end: October 31
Date of reporting period: October 31, 2022
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
Virtus Duff & Phelps Select MLP and Energy Fund |
Virtus KAR Long/Short Equity Fund* |
1 | ||
2 | ||
4 | ||
Fund | Fund Summary | Schedule of Investments |
6 | 14 | |
10 | 16 | |
18 | ||
20 | ||
21 | ||
22 | ||
24 | ||
32 | ||
33 | ||
34 | ||
35 | ||
36 |
President, Virtus Alternative Solutions Trust
Beginning Account Value May 1, 2022 | Ending Account Value October 31, 2022 | Annualized Expense Ratio* | Expenses Paid During Period** | |||||
Duff & Phelps Select MLP and Energy Fund | ||||||||
Class A | $ 1,000.00 | $ 1,102.30 | 1.43% | $ 7.58 | ||||
Class C | 1,000.00 | 1,097.70 | 2.19 | 11.58 | ||||
Class I | 1,000.00 | 1,104.00 | 1.19 | 6.31 | ||||
KAR Long/Short Equity Fund | ||||||||
Class A | 1,000.00 | 975.40 | 2.19 | 10.90 | ||||
Class C | 1,000.00 | 972.20 | 2.93 | 14.57 | ||||
Class I | 1,000.00 | 977.40 | 1.93 | 9.62 | ||||
Class R6 | 1,000.00 | 977.50 | 1.86 | 9.27 |
* | Annualized expense ratios include dividend expense on securities sold short and interest expense on securities sold short. |
** | Expenses are equal to the relevant Fund’s annualized expense ratio, which is net of waived fees and reimbursed expenses, if applicable, multiplied by the average account value over the period, multiplied by the number of days (184) expenses were accrued in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. |
Beginning Account Value May 1, 2022 | Ending Account Value October 31, 2022 | Annualized Expense Ratio* | Expenses Paid During Period** | |||||
Duff & Phelps Select MLP and Energy Fund | ||||||||
Class A | $ 1,000.00 | $1,018.00 | 1.43% | $ 7.27 | ||||
Class C | 1,000.00 | 1,014.17 | 2.19 | 11.12 | ||||
Class I | 1,000.00 | 1,019.21 | 1.19 | 6.06 |
Beginning Account Value May 1, 2022 | Ending Account Value October 31, 2022 | Annualized Expense Ratio* | Expenses Paid During Period** | |||||
KAR Long/Short Equity Fund | ||||||||
Class A | $1,000.00 | $1,014.17 | 2.19% | $11.12 | ||||
Class C | 1,000.00 | 1,010.44 | 2.93 | 14.85 | ||||
Class I | 1,000.00 | 1,015.48 | 1.93 | 9.80 | ||||
Class R6 | 1,000.00 | 1,015.83 | 1.86 | 9.45 |
* | Annualized expense ratios include dividend and interest expense on securities sold short. |
** | Expenses are equal to the relevant Fund’s annualized expense ratio, which is net of waived fees and reimbursed expenses, if applicable, multiplied by the average account value over the period, multiplied by the number of days (184) expenses were accrued in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. |
October 31, 2022
Ticker Symbols: | |
Class A: VLPAX | |
Class C: VLPCX | |
Class I: VLPIX |
Duff & Phelps Investment Management Co.
■ | The Fund is non-diversified and has an investment objective of total return with a secondary objective of income. There is no guarantee that the Fund will meet its objective. |
■ | For the fiscal year ended October 31, 2022, the Fund’s Class A shares at NAV returned 29.24%, Class C shares at NAV returned 28.17%, and Class I shares at NAV returned 29.48%. For the same period, the Alerian Midstream Energy Index, which serves as both the Fund’s broad-based and style-specific benchmark appropriate for comparison, returned 16.94%. |
Common Stocks & MLP Interests | 98% | |
Gathering/Processing | 29% | |
Diversified | 22 | |
Downstream/Other | 14 | |
Liquefied Natural Gas | 13 | |
Petroleum Transportation & Storage | 9 | |
Electric, LDC & Power | 7 | |
Natural Gas Pipelines | 4 | |
Short-Term Investment | 2 | |
Total | 100% |
1 Year | 5 Years | Since inception | Inception date | ||
Class A shares at NAV2 | 29.24 % | 8.90 % | 5.81 % | 9/9/15 | |
Class A shares at POP3,4 | 22.13 | 7.67 | 4.98 | 9/9/15 | |
Class C shares at NAV2 and with CDSC4 | 28.17 | 8.07 | 5.01 | 9/9/15 | |
Class I shares at NAV2 | 29.48 | 9.16 | 6.06 | 9/9/15 | |
Alerian Midstream Energy Index 5 | 16.94 | — | — | — | |
Alerian MLP Index 5 | 30.19 | 5.55 | 2.56 6 | — | |
Fund Expense Ratios7: A Shares: Gross 2.02%, Net 1.40%; C Shares: Gross 2.77%, Net 2.15%; I Shares: Gross 1.77%, Net 1.15%. |
All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end. |
1 | Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions. |
2 | “NAV” (Net Asset Value) total returns do not include the effect of any sales charge. |
3 | “POP” (Public Offering Price) total returns include the effect of the maximum front-end 5.50% sales charge. |
4 | “CDSC” (contingent deferred sales charge) is applied to redemptions of certain classes of shares that do not have a sales charge applied at the time of purchase. CDSC for certain redemptions of Class A shares made within 18 months of a finder’s fee being paid and all Class C shares are 1% within the first year and 0% thereafter. |
5 | Effective January 1, 2022, the benchmark to which performance of the Fund is compared changed to the Alerian Midstream Energy Index. The Fund’s subadviser believes the Alerian Midstream Energy Index better reflects the markets and securities in which the Fund’s portfolio is invested than its previous benchmark, the Alerian MLP Index. The Alerian Midstream Energy Index is a capped, float-adjusted, market capitalization-weighted index. The index is abroad-based composite of North American energy infrastructure companies that earn the majority of their cash flow from midstream activities involving energy commodities. The index is unmanaged and not available for direct investment. The Alerian Midstream Energy Index inception date was June 25, 2018. There was no reportable performance prior to the inception date. |
6 | The since inception index return is from the Fund’s inception date. |
7 | The expense ratios of the Fund are set forth according to the prospectus for the Fund effective February 28, 2022, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through June 26, 2023. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds. |
Ticker Symbols: | |
Class A : VLSAX | |
Class C: VLSCX | |
Class I: VLSIX | |
Class R6: VLSRX |
Kayne Anderson Rudnick Investment Management, LLC
■ | The Fund is non-diversified and has an investment objective of seeking long-term capital appreciation. There is no guarantee that the Fund will meet its objective. |
■ | For the fiscal year October 31, 2022, the Fund’ Class A shares at NAV returned -16.18%, Class C shares at NAV returned -16.80%, Class I shares at NAV returned -15.95%, and Class R6 shares at NAV returned -15.87%. For the same period, the Russell 3000® Index which serves as both the Fund’s broad-based and style-specific index appropriate for comparison, returned -16.52%. |
Common Stocks | 124% | |
Information Technology | 35% | |
Financials | 29 | |
Industrials | 15 | |
Consumer Staples | 12 | |
Health Care | 9 | |
Communication Services | 9 | |
Consumer Discretionary | 8 | |
All other Common Stocks | 7 | |
Short-Term Investment | 3 | |
Securities Sold Short | (27) | |
Consumer Discretionary | (9) | |
Industrials | (9) | |
Real Estate | (5) | |
Consumer Staples | (2) | |
Financials | (2) | |
Total | 100% |
1 Year | Since inception | Inception date | ||
Class A shares at NAV2 | -16.18 % | 12.99 % | 12/6/18 | |
Class A shares at POP3,4 | -20.79 | 11.36 | 12/6/18 | |
Class C shares at NAV2 and with CDSC4 | -16.80 | 12.16 | 12/6/18 | |
Class I shares at NAV2 | -15.95 | 13.29 | 12/6/18 | |
Class R6 shares at NAV2 | -15.87 | 13.36 | 12/6/18 | |
Russell 3000® Index | -16.52 | 11.09 5 | — | |
Fund Expense Ratios6: A Shares: Gross 2.31%, Net 2.23%; C Shares: Gross 2.99%, Net 2.98%; I Shares: Gross 2.07%, Net 1.98%, R6 Shares: Gross 1.93%, Net 1.91%. |
All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end. |
1 | Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions. |
2 | “NAV” (Net Asset Value) total returns do not include the effect of any sales charge. |
3 | “POP” (Public Offering Price) total returns include the effect of the maximum front-end 5.50% sales charge. |
4 | “CDSC” (contingent deferred sales charge) is applied to redemptions of certain classes of shares that do not have a sales charge applied at the time of purchase. CDSC for certain redemptions of Class A shares made within 18 months of a finder’s fee being paid and all Class C shares are 1% within the first year and 0% thereafter. |
5 | The since inception index return is from the Fund’s inception date. |
6 | The expense ratios of the Fund are set forth according to the prospectus for the Fund effective February 28, 2022, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through February 28, 2023. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds. |
Shares | Value | ||
Common Stocks & MLP Interests—97.8% | |||
Diversified—21.9% | |||
Energy Transfer LP | 207,831 | $ 2,654 | |
Enterprise Products Partners LP | 31,642 | 799 | |
Keyera Corp. | 15,314 | 328 | |
Kinder Morgan, Inc. | 42,470 | 769 | |
MPLX LP | 31,359 | 1,052 | |
ONEOK, Inc. | 19,791 | 1,174 | |
Pembina Pipeline Corp. | 27,471 | 907 | |
7,683 | |||
Downstream/Other—13.7% | |||
Chart Industries, Inc.(1) | 3,127 | 697 | |
Enviva, Inc. | 23,331 | 1,396 | |
Marathon Petroleum Corp. | 12,017 | 1,366 | |
Valero Energy Corp. | 10,660 | 1,338 | |
4,797 | |||
Electric, LDC & Power—7.2% | |||
Entergy Corp. | 3,331 | 357 | |
NextEra Energy Partners LP | 8,520 | 631 | |
Sempra Energy | 6,251 | 944 | |
Sunrun, Inc.(1) | 26,000 | 585 | |
2,517 | |||
Gathering/Processing—28.8% | |||
DCP Midstream LP | 33,678 | 1,338 | |
DT Midstream, Inc. | 28,003 | 1,672 | |
EnLink Midstream LLC(1) | 66,000 | 784 | |
Equitrans Midstream Corp. | 41,900 | 353 | |
Hess Midstream LP Class A | 54,311 | 1,572 | |
Targa Resources Corp. | 42,470 | 2,903 | |
Western Midstream Partners LP | 50,252 | 1,443 | |
10,065 | |||
Liquefied Natural Gas—12.9% | |||
Cheniere Energy, Inc. | 20,352 | 3,590 | |
Golar LNG Ltd.(1) | 18,960 | 527 |
Shares | Value | ||
Liquefied Natural Gas—continued | |||
New Fortress Energy, Inc. Class A | 7,000 | $ 386 | |
4,503 | |||
Natural Gas Pipelines—4.0% | |||
Williams Cos., Inc. (The) | 43,226 | 1,415 | |
Petroleum Transportation & Storage—9.3% | |||
Enbridge, Inc. | 14,509 | 565 | |
Genesis Energy LP | 29,000 | 334 | |
Magellan Midstream Partners LP | 18,314 | 988 | |
Plains GP Holdings LP Class A(1) | 109,103 | 1,368 | |
3,255 | |||
Total Common Stocks & MLP Interests (Identified Cost $27,356) | 34,235 | ||
Total Long-Term Investments—97.8% (Identified Cost $27,356) | 34,235 | ||
Short-Term Investment—1.6% | |||
Money Market Mutual Fund—1.6% | |||
Dreyfus Government Cash Management Fund - Institutional Shares (seven-day effective yield 2.912%)(2) | 544,314 | 544 | |
Total Short-Term Investment (Identified Cost $544) | 544 | ||
TOTAL INVESTMENTS—99.4% (Identified Cost $27,900) | $34,779 | ||
Other assets and liabilities, net—0.6% | 210 | ||
NET ASSETS—100.0% | $34,989 |
Abbreviations: | |
LLC | Limited Liability Company |
LP | Limited Partnership |
MLP | Master Limited Partnership |
Footnote Legend: | |
(1) | Non-income producing. |
(2) | Shares of this fund are publicly offered, and its prospectus and annual report are publicly available. |
Country Weightings (Unaudited)† | |
United States | 93% |
Canada | 5 |
Bermuda | 2 |
Total | 100% |
† % of total investments as of October 31, 2022. |
Ownership Structure (Unaudited)†,†† | |
Major Midstream Companies | 36% |
Midstream MLP | 25 |
MLP Affiliates & Other | 19 |
Embedded General Partner | 14 |
Pure Play General Partner | 4 |
Cash & Other | 2 |
Total | 100% |
† % of total investments as of October 31, 2022. |
Total Value at October 31, 2022 | Level 1 Quoted Prices | ||
Assets: | |||
Equity Securities: | |||
Common Stocks & MLP Interests | $34,235 | $34,235 | |
Money Market Mutual Fund | 544 | 544 | |
Total Investments | $34,779 | $34,779 |
October 31, 2022
Shares | Value | ||
Common Stocks—97.5% | |||
Communication Services—7.3% | |||
Alphabet, Inc. Class C(1) | 34,624 | $ 3,278 | |
MediaAlpha, Inc. Class A(1) | 150,655 | 1,654 | |
Trade Desk, Inc. (The) Class A(1) | 47,240 | 2,515 | |
7,447 | |||
Consumer Discretionary—6.3% | |||
Home Depot, Inc. (The)(2) | 11,028 | 3,266 | |
Pool Corp.(2) | 10,619 | 3,230 | |
6,496 | |||
Consumer Staples—9.5% | |||
Lamb Weston Holdings, Inc. | 73,835 | 6,366 | |
Monster Beverage Corp.(1) | 35,894 | 3,364 | |
9,730 | |||
Financials—23.1% | |||
Bank of Hawaii Corp. | 34,817 | 2,644 | |
Berkley (W.R.) Corp. | 59,296 | 4,411 | |
LPL Financial Holdings, Inc. | 9,397 | 2,402 | |
Moody’s Corp. | 13,555 | 3,590 | |
Primerica, Inc. | 41,590 | 6,018 | |
Ryan Specialty Holdings, Inc. Class A(1) | 101,082 | 4,534 | |
23,599 | |||
Health Care—7.4% | |||
Cooper Cos., Inc. (The) | 9,616 | 2,629 | |
Silk Road Medical, Inc.(1) | 55,470 | 2,445 | |
Zoetis, Inc. Class A(2) | 16,388 | 2,471 | |
7,545 | |||
Industrials—11.7% | |||
Lennox International, Inc. | 10,102 | 2,359 | |
Old Dominion Freight Line, Inc. | 11,173 | 3,068 | |
TransUnion | 37,925 | 2,248 | |
Verisk Analytics, Inc. Class A(2) | 23,321 | 4,264 | |
11,939 | |||
Information Technology—27.3% | |||
CDW Corp. | 22,597 | 3,905 | |
Clearwater Analytics Holdings, Inc. Class A (1) | 196,278 | 3,197 | |
EVERTEC, Inc. | 167,124 | 5,985 |
Shares | Value | ||
Information Technology—continued | |||
Intuit, Inc. | 8,281 | $ 3,540 | |
Jack Henry & Associates, Inc.(2) | 16,675 | 3,319 | |
nCino, Inc.(1) | 121,491 | 3,825 | |
Visa, Inc. Class A(2) | 20,330 | 4,212 | |
27,983 | |||
Materials—1.4% | |||
Scotts Miracle-Gro Co. (The) | 32,158 | 1,476 | |
Real Estate—3.5% | |||
Lamar Advertising Co. Class A | 38,658 | 3,566 | |
Total Common Stocks (Identified Cost $87,058) | 99,781 | ||
Total Long-Term Investments—97.5% (Identified Cost $87,058) | 99,781 | ||
Short-Term Investment—2.5% | |||
Money Market Mutual Fund—2.5% | |||
Dreyfus Government Cash Management Fund - Institutional Shares (seven-day effective yield 2.912%)(3) | 2,581,282 | 2,581 | |
Total Short-Term Investment (Identified Cost $2,581) | 2,581 | ||
TOTAL INVESTMENTS, BEFORE SECURITIES SOLD SHORT—100.0% (Identified Cost $89,639) | 102,362 | ||
Securities Sold Short(4)—(21.2)% | |||
Consumer Discretionary—(7.2)% | |||
Boot Barn Holdings, Inc.(5) | (21,085) | (1,198) | |
H&R Block, Inc. | (74,278) | (3,057) | |
ODP Corp. (The)(5) | (41,379) | (1,637) | |
Snap One Holdings Corp.(5) | (126,371) | (1,506) | |
(7,398) | |||
Consumer Staples—(1.7)% | |||
Central Garden & Pet Co. Class A(5) | (43,531) | (1,704) |
Shares | Value | ||
Financials—(1.1)% | |||
Focus Financial Partners, Inc. Class A(5) | (33,895) | $ (1,179) | |
Industrials—(7.1)% | |||
ACCO Brands Corp. | (208,852) | (961) | |
Allison Transmission Holdings, Inc. | (45,520) | (1,923) | |
ArcBest Corp. | (20,499) | (1,628) | |
Deluxe Corp. | (76,871) | (1,413) | |
Werner Enterprises, Inc. | (34,393) | (1,348) | |
(7,273) | |||
Real Estate—(4.1)% | |||
Compass, Inc. Class A(5) | (563,767) | (1,488) | |
Paramount Group, Inc. | (192,637) | (1,247) | |
Retail Opportunity Investments Corp. | (98,974) | (1,433) | |
(4,168) | |||
Total Securities Sold Short (Proceeds $(25,644)) | (21,722) | ||
TOTAL INVESTMENTS, NET OF SECURITIES SOLD SHORT—78.8% (Identified Cost $63,995) | $ 80,640 | ||
Other assets and liabilities, net—21.2% | 21,704 | ||
NET ASSETS—100.0% | $102,344 |
Footnote Legend: | |
(1) | Non-income producing. |
(2) | All or portion segregated as collateral for securities sold short. The value of securities segregated as collateral is $15,561. |
(3) | Shares of this fund are publicly offered, and its prospectus and annual report are publicly available. |
(4) | The Fund is contractually responsible to the lender for any dividends payable and interest accrued on securities while those securities are in a short position. These dividends and interest are recorded as an expense of the Fund. |
(5) | No dividend expense on security sold short. |
Total Value at October 31, 2022 | Level 1 Quoted Prices | ||
Assets: | |||
Equity Securities: | |||
Common Stocks | $ 99,781 | $ 99,781 | |
Money Market Mutual Fund | 2,581 | 2,581 | |
Total Assets | 102,362 | 102,362 | |
Liabilities: | |||
Securities Sold Short: | |||
Common Stocks | (21,722) | (21,722) | |
Total Liabilities | (21,722) | (21,722) | |
Total Investments | $ 80,640 | $ 80,640 |
Duff & Phelps Select MLP and Energy Fund | KAR Long/Short Equity Fund | ||
Assets | |||
Investment in securities at value(1) | $ 34,779 | $102,362 | |
Cash | 50 | 50 | |
Due from broker | — | 21,770 | |
Receivables | |||
Fund shares sold | 159 | 99 | |
Dividends and interest | 142 | 30 | |
Tax reclaims | 2 | — | |
Tax receivable | 4 | — | |
Prepaid Trustees’ retainer | — (a) | 1 | |
Prepaid expenses | 27 | 59 | |
Other assets | 3 | 10 | |
Total assets | 35,166 | 124,381 | |
Liabilities | |||
Securities sold short(2) | — | 21,722 | |
Payables | |||
Fund shares repurchased | 45 | 123 | |
Investment advisory fees | 46 | 108 | |
Distribution and service fees | 2 | 1 | |
Administration and accounting fees | 24 | 9 | |
Transfer agent and sub-transfer agent fees and expenses | 8 | 28 | |
Professional fees | 27 | 35 | |
Trustee deferred compensation plan | 3 | 10 | |
Interest expense and/or commitment fees | — (a) | 1 | |
Other accrued expenses | 22 | — | |
Total liabilities | 177 | 22,037 | |
Net Assets | $ 34,989 | $102,344 | |
Net Assets Consist of: | |||
Capital paid in on shares of beneficial interest | $ 135,230 | $ 86,745 | |
Accumulated earnings (loss) | (100,241) | 15,599 | |
Net Assets | $ 34,989 | $102,344 | |
Duff & Phelps Select MLP and Energy Fund | KAR Long/Short Equity Fund | ||
Net Assets: | |||
Class A | $ 8,668 | $ 1,202 | |
Class C | $ 743 | $ 367 | |
Class I | $ 25,578 | $ 100,256 | |
Class R6 | $ — | $ 519 | |
Shares Outstanding (unlimited number of shares authorized, no par value): | |||
Class A | 737,659 | 75,733 | |
Class C | 64,090 | 23,823 | |
Class I | 2,207,486 | 6,255,037 | |
Class R6 | — | 32,315 | |
Net Asset Value and Redemption Price Per Share:* | |||
Class A | $ 11.75 | $ 15.87 | |
Class C | $ 11.59 | $ 15.41 | |
Class I | $ 11.59 | $ 16.03 | |
Class R6 | $ — | $ 16.07 | |
Maximum Offering Price Per Share (NAV/(1-5.50%)): | |||
Class A | $ 12.43 | $ 16.79 | |
Maximum Sales Charge - Class A | 5.50% | 5.50% | |
(1) Investment in securities at cost | $ 27,900 | $ 89,639 | |
(2) Securities sold short proceeds | $ — | $ 25,644 |
(a) | Amount is less than $500. |
* | Net Asset Value and Redemption Price Per Share are calculated using unrounded net assets. |
YEAR ENDED October 31, 2022
Duff & Phelps Select MLP and Energy Fund | KAR Long/Short Equity Fund | ||
Investment Income | |||
Dividends | $1,398 | $ 1,295 | |
Less: return of capital distributions | (826) | — | |
Interest | — | 119 | |
Securities lending, net of fees | — | — (1) | |
Foreign taxes withheld | (20) | — | |
Refund of previously paid foreign taxes | 44 | — | |
Total investment income | 596 | 1,414 | |
Expenses | |||
Investment advisory fees | 268 | 1,600 | |
Distribution and service fees, Class A | 15 | 9 | |
Distribution and service fees, Class C | 5 | 4 | |
Administration and accounting fees | 37 | 135 | |
Transfer agent fees and expenses | 16 | 53 | |
Sub-transfer agent fees and expenses, Class A | 6 | 5 | |
Sub-transfer agent fees and expenses, Class C | — (1) | — (1) | |
Sub-transfer agent fees and expenses, Class I | 22 | 175 | |
Custodian fees | — (1) | 1 | |
Printing fees and expenses | 12 | 38 | |
Professional fees | — | 45 | |
Interest expense and/or commitment fees | 1 | 2 | |
Registration fees | 42 | 58 | |
Trustees’ fees and expenses | — | 7 | |
Miscellaneous expenses | — (1) | 15 | |
Total expenses | 424 | 2,147 | |
Dividend expense and interest expense on securities sold short | — | 475 | |
Total expenses, including dividend and interest expense on securities sold short | 424 | 2,622 | |
Less net expenses reimbursed and/or waived by investment adviser(2) | (56) | (133) | |
Less low balance account fees | — (1) | — | |
Net expenses | 368 | 2,489 | |
Net investment income (loss) | 228 | (1,075) | |
Net Realized and Unrealized Gain (Loss) on Investments | |||
Net realized gain (loss) from: | |||
Investments | 2,702 | 6,306 | |
Securities sold short | — | (6,478) | |
Foreign currency transactions | (1) | (16) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 4,122 | (36,447) | |
Securities sold short | — | 11,768 | |
Foreign currency transactions | — (1) | — | |
Net realized and unrealized gain (loss) on investments | 6,823 | (24,867) | |
Net increase (decrease) in net assets resulting from operations | $7,051 | $(25,942) |
(1) | Amount is less than $500. |
(2) | See Note 3D in Notes to Financial Statements. |
Duff & Phelps Select MLP and Energy Fund | KAR Long/Short Equity Fund | ||||||
Year Ended October 31, 2022 | Year Ended October 31, 2021 | Year Ended October 31, 2022 | Year Ended October 31, 2021 | ||||
Increase (Decrease) in Net Assets Resulting from Operations | |||||||
Net investment income (loss) | $ 228 | $ 32 | $ (1,075) | $ (1,864) | |||
Net realized gain (loss) | 2,701 | 586 | (188) | 687 | |||
Net change in unrealized appreciation (depreciation) | 4,122 | 4,520 | (24,679) | 21,419 | |||
Increase (decrease) in net assets resulting from operations | 7,051 | 5,138 | (25,942) | 20,242 | |||
Dividends and Distributions to Shareholders | |||||||
Net Investment Income and Net Realized Gains: | |||||||
Class A | — | (14) | (23) | (24) | |||
Class C | — | (2) | (2) | (5) | |||
Class I | — | (155) | (564) | (1,030) | |||
Class R6 | — | — | (1) | (1) | |||
Return of Capital: | |||||||
Class A | (264) | (38) | — | — | |||
Class C | (15) | (5) | — | — | |||
Class I | (732) | (434) | — | — | |||
Total dividends and distributions to shareholders | (1,011) | (648) | (590) | (1,060) | |||
Change in Net Assets from Capital Transactions (See Note 5): | |||||||
Class A | 5,824 | 1,419 | (3,447) | 3,900 | |||
Class C | 325 | 135 | (12) | (114) | |||
Class I | (2,092) | 14,088 | (28,075) | 25,344 | |||
Class R6 | — | — | 229 | 204 | |||
Increase (decrease) in net assets from capital transactions | 4,057 | 15,642 | (31,305) | 29,334 | |||
Net increase (decrease) in net assets | 10,097 | 20,132 | (57,837) | 48,516 | |||
Net Assets | |||||||
Beginning of period | 24,892 | 4,760 | 160,181 | 111,665 | |||
End of Period | $ 34,989 | $ 24,892 | $ 102,344 | $ 160,181 |
THROUGHOUT EACH PERIOD
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total from Investment Operations | Dividends from Net Investment Income | Return of Capital | Distributions from Net Realized Gains | Total Distributions | Change in Net Asset Value | Net Asset Value, End of Period | Total Return(2)(3) | Net Assets, End of Period (in thousands) | Ratio of Net Expenses to Average Net Assets (including dividend and interest expense on securities sold short)(4) | Ratio of Gross Expenses to Average Net Assets(4) | Ratio of Net Investment Income (Loss) to Average Net Assets(4) | Portfolio Turnover Rate(2) | ||
Duff & Phelps Select MLP and Energy Fund | |||||||||||||||||
Class A | |||||||||||||||||
11/1/21 to 10/31/22 | $ 9.37 | 0.04 | 2.69 | 2.73 | — | (0.35) | — | (0.35) | 2.38 | $11.75 | 29.24% | $ 8,668 | 1.42 % (5) | 1.60 % | 0.34 % | 43 % | |
11/1/20 to 10/31/21 | 5.19 | (0.01) | 4.49 | 4.48 | (0.08) | (0.22) | — | (0.30) | 4.18 | 9.37 | 86.75 | 2,117 | 1.40 | 2.02 | (0.14) | 49 | |
11/1/19 to 10/31/20 | 8.09 | 0.06 | (2.65) | (2.59) | — | (0.31) | — | (0.31) | (2.90) | 5.19 | (32.15) | 317 | 1.40 | 3.11 | 0.95 | 41 | |
11/1/18 to 10/31/19 | 9.26 | 0.14 | (0.82) | (0.68) | (0.12) | (0.37) | — | (0.49) | (1.17) | 8.09 | (7.22) | 447 | 1.40 | 2.59 | 1.56 | 82 | |
11/1/17 to 10/31/18 | 9.39 | 0.02 | 0.07 | 0.09 | (0.17) | (0.05) | — | (0.22) | (0.13) | 9.26 | 0.79 | 321 | 1.45 (6) | 2.87 | 0.21 | 29 | |
Class C | |||||||||||||||||
11/1/21 to 10/31/22 | $ 9.25 | (0.02) | 2.62 | 2.60 | — | (0.26) | — | (0.26) | 2.34 | $11.59 | 28.17 % | $ 743 | 2.16 % (5) | 2.32 % | (0.16) % | 43 % | |
11/1/20 to 10/31/21 | 5.12 | (0.07) | 4.45 | 4.38 | (0.07) | (0.18) | — | (0.25) | 4.13 | 9.25 | 85.81 | 297 | 2.15 | 2.77 | (0.83) | 49 | |
11/1/19 to 10/31/20 | 8.01 | 0.02 | (2.64) | (2.62) | — | (0.27) | — | (0.27) | (2.89) | 5.12 | (32.76) | 79 | 2.15 | 3.85 | 0.28 | 41 | |
11/1/18 to 10/31/19 | 9.20 | (0.03) | (0.70) | (0.73) | (0.09) | (0.37) | — | (0.46) | (1.19) | 8.01 | (7.84) | 126 | 2.16 | 3.36 | (0.32) | 82 | |
11/1/17 to 10/31/18 | 9.36 | (0.05) | 0.05 | — | (0.11) | (0.05) | — | (0.16) | (0.16) | 9.20 | (0.13) | 143 | 2.21 (6) | 3.61 | (0.55) | 29 | |
Class I | |||||||||||||||||
11/1/21 to 10/31/22 | $ 9.22 | 0.09 | 2.62 | 2.71 | — | (0.34) | — | (0.34) | 2.37 | $11.59 | 29.48 % | $ 25,578 | 1.17 % (5) | 1.36 % | 0.90 % | 43 % | |
11/1/20 to 10/31/21 | 5.10 | 0.02 | 4.42 | 4.44 | (0.08) | (0.24) | — | (0.32) | 4.12 | 9.22 | 87.52 | 22,478 | 1.15 | 1.78 | 0.28 | 49 | |
11/1/19 to 10/31/20 | 7.99 | 0.08 | (2.63) | (2.55) | — | (0.34) | — | (0.34) | (2.89) | 5.10 | (32.03) | 4,364 | 1.15 | 2.79 | 1.30 | 41 | |
11/1/18 to 10/31/19 | 9.25 | 0.05 | (0.70) | (0.65) | (0.24) | (0.37) | — | (0.61) | (1.26) | 7.99 | (6.98) | 4,255 | 1.16 | 2.31 | 0.62 | 82 | |
11/1/17 to 10/31/18 | 9.40 | 0.04 | 0.07 | 0.11 | (0.21) | (0.05) | — | (0.26) | (0.15) | 9.25 | 0.99 | 4,989 | 1.21 (6) | 2.56 | 0.45 | 29 | |
KAR Long/Short Equity Fund | |||||||||||||||||
Class A | |||||||||||||||||
11/1/21 to 10/31/22 | $18.99 | (0.20) | (2.85) | (3.05) | — | — | (0.07) | (0.07) | (3.12) | $15.87 | (16.18) % | $ 1,202 | 2.19 % (5)(7) | 2.31 % | (1.16) % | 26 % | |
11/1/20 to 10/31/21 | 16.44 | (0.29) | 2.98 | 2.69 | — | — | (0.14) | (0.14) | 2.55 | 18.99 | 16.47 | 5,578 | 2.23 (7) | 2.31 | (1.59) | 19 | |
11/1/19 to 10/31/20 | 12.69 | (0.20) | 4.00 | 3.80 | — | — | (0.05) | (0.05) | 3.75 | 16.44 | 30.01 | 1,210 | 2.32 (7) | 2.51 | (1.34) | 33 | |
12/6/18 (8) to 10/31/19 | 10.00 | (0.11) | 2.80 | 2.69 | — | — | — | — | 2.69 | 12.69 | 26.90 | 134 | 2.40 (7) | 4.26 | (1.03) | 56 | |
Class C | |||||||||||||||||
11/1/21 to 10/31/22 | $18.59 | (0.30) | (2.81) | (3.11) | — | — | (0.07) | (0.07) | (3.18) | $15.41 | (16.80) % | $ 367 | 2.93 % (5)(7) | 2.96 % | (1.82) % | 26 % | |
11/1/20 to 10/31/21 | 16.21 | (0.40) | 2.92 | 2.52 | — | — | (0.14) | (0.14) | 2.38 | 18.59 | 15.65 | 456 | 3.00 (7) | 3.01 | (2.29) | 19 | |
11/1/19 to 10/31/20 | 12.61 | (0.28) | 3.93 | 3.65 | — | — | (0.05) | (0.05) | 3.60 | 16.21 | 29.01 | 504 | 3.09 (7) | 3.28 | (2.02) | 33 | |
12/6/18 (8) to 10/31/19 | 10.00 | (0.18) | 2.79 | 2.61 | — | — | — | — | 2.61 | 12.61 | 26.10 | 138 | 3.15 (7) | 5.02 | (1.78) | 56 | |
Class I | |||||||||||||||||
11/1/21 to 10/31/22 | $19.14 | (0.14) | (2.90) | (3.04) | — | — | (0.07) | (0.07) | (3.11) | $16.03 | (15.95) % | $100,256 | 1.94 % (5)(7) | 2.04 % | (0.83) % | 26 % | |
11/1/20 to 10/31/21 | 16.53 | (0.24) | 2.99 | 2.75 | — | — | (0.14) | (0.14) | 2.61 | 19.14 | 16.75 | 153,771 | 1.98 (7) | 2.07 | (1.31) | 19 | |
11/1/19 to 10/31/20 | 12.72 | (0.15) | 4.01 | 3.86 | — | — | (0.05) | (0.05) | 3.81 | 16.53 | 30.41 | 109,819 | 2.07 (7) | 2.30 | (1.05) | 33 | |
12/6/18 (8) to 10/31/19 | 10.00 | (0.10) | 2.82 | 2.72 | — | — | — | — | 2.72 | 12.72 | 27.20 | 17,813 | 2.04 (7) | 3.99 | (0.94) | 56 | |
Class R6 | |||||||||||||||||
11/1/21 to 10/31/22 | $19.17 | (0.12) | (2.91) | (3.03) | — | — | (0.07) | (0.07) | (3.10) | $16.07 | (15.87) % | $ 519 | 1.85 % (5)(7) | 1.88 % | (0.72) % | 26 % | |
11/1/20 to 10/31/21 | 16.54 | (0.24) | 3.01 | 2.77 | — | — | (0.14) | (0.14) | 2.63 | 19.17 | 16.86 | 376 | 1.90 (7) | 1.92 | (1.30) | 19 | |
11/1/19 to 10/31/20 | 12.73 | (0.13) | 3.99 | 3.86 | — | — | (0.05) | (0.05) | 3.81 | 16.54 | 30.39 | 132 | 2.07 (7) | 2.24 | (0.95) | 33 | |
12/6/18 (8) to 10/31/19 | 10.00 | (0.07) | 2.80 | 2.73 | — | — | — | — | 2.73 | 12.73 | 27.30 | 3,437 | 2.08 (7) | 4.00 | (0.71) | 56 |
Footnote Legend: | |
(1) | Calculated using average shares outstanding. |
(2) | Not annualized for periods less than one year. |
(3) | Sales charges, where applicable, are not reflected in the total return calculation. |
(4) | Annualized for periods less than one year. |
(5) | Net expense ratio includes extraordinary proxy expenses. |
(6) | Due to a change in expense cap, the ratio shown is a blended expense ratio. |
(7) | The ratio of net expenses to average net assets excluding dividend and interest expense on securities sold short for the KAR Long/Short Equity Fund for Class A are 1.81%, 1.80%, 1.80% and 1.80%, for Class C is 2.56%, 2.55%, 2.55% and 2.55%, for Class I is 1.56%, 1.55%, 1.55% and 1.55% and for Class R6 is 1.50%, 1.48%, 1.48% and 1.48% for the years ended October 31, 2022, October 31, 2021, October 31, 2020 and the period ended October 31, 2019, respectively. |
(8) | Inception date. |
October 31, 2022
A. | Security Valuation |
Each Fund utilizes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The Funds’ policy is to recognize transfers into or out of Level 3 at the end of the reporting period. | |
• Level 1 – quoted prices in active markets for identical securities (security types generally include listed equities). |
B. | Security Transactions and Investment Income |
Security transactions are recorded on the trade date. Realized gains and losses from the sale of securities are determined on the identified cost basis. Dividend income and capital gain distributions are recognized on the ex-dividend date or, in the case of certain foreign securities, as soon as a Fund is notified. Interest income is recorded on the accrual basis. Each Fund amortizes premiums and accretes discounts using the effective interest method. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. | |
Dividend income from REIT and MLP investments is recorded using management’s estimate of the percentage of income included in distributions received from such investments based on historical information and other industry sources. The return of capital portion of the estimate is a reduction to investment income and a reduction in the cost basis of each investment which increases net realized gain (loss) and net change in unrealized appreciation (depreciation). If the return of capital distributions exceed their cost basis, the distributions are treated as realized gains. The Duff & Phelps Select MLP and Energy Fund invests in MLPs that make distributions that are primarily attributable to return of capital. The actual amounts of income, return of capital, and capital gains are only determined by each REIT and MLP after its fiscal year-end, and may differ from the estimated amounts. | |
C. | Income Taxes |
Each Fund is treated as a separate taxable entity. It is the intention of each Fund to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes or excise taxes has been made. | |
The Funds may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Each Fund will accrue such taxes and recoveries as applicable based upon current interpretations of the tax rules and regulations that exist in the markets in which it invests. | |
Management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Each Fund’s U.S. federal income tax return is generally subject to examination by the Internal Revenue Service for a period of three years after it is filed. State, local and/or non-U.S. tax returns and/or other filings may be subject to examination for different periods, depending upon the tax rules of each applicable jurisdiction. | |
D. | Distributions to Shareholders |
Distributions are recorded by each Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. | |
E. | Expenses |
Expenses incurred together by a Fund and other affiliated mutual funds are allocated in proportion to the net assets of each such fund, except where allocation of direct expenses to each Fund and other fund, or an alternative allocation method can be more appropriately used. | |
In addition to the net annual operating expenses that a Fund bears directly, the shareholders of a Fund indirectly bear the pro-rata expenses of any underlying mutual funds in which the Fund invests. | |
F. | Foreign Currency Transactions |
Non-U.S. investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the foreign currency exchange rate effective at the end of the reporting period. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement date of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates between |
the date income is accrued and the date it is paid is treated as a gain or loss on foreign currency. The Funds do not isolate that portion of the results of operations arising from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held and such fluctuations are included with the net realized and unrealized gain or loss on investments. | |
G. | Short Sales |
Each Fund may sell securities short. A short sale is a transaction in which a Fund sells a security it does not own in anticipation of a decline in market price. To sell a security short, a Fund must borrow the security. The Fund’s obligation to replace the security borrowed and sold short will be fully collateralized at all times by the proceeds from the short sale retained by the broker and by cash and securities deposited in a segregated account with the Fund’s custodian. If the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will realize a loss, and if the price declines during the period, the Fund will realize a gain. Any realized gain will be decreased, and any realized loss increased, by the amount of transaction costs. On ex-dividend date, dividends on short sales are recorded as an expense to the Fund. | |
In addition, in accordance with the terms of its prime brokerage agreement, KAR Long/Short Equity Fund may receive rebate income or be charged a fee on borrowed securities. Such income or fee is calculated on a daily basis based upon the market value of each borrowed security and a variable rate that is dependent upon the availability of such security. The dividends on short sales and rebate income/fees are recorded under “Dividend expense and interest expense on securities sold short” on the Statement of Operations. | |
H. | Securities Lending |
The Funds may loan securities to qualified brokers through a securities lending agency agreement with The Bank of New York Mellon (“BNYM”). Under the securities lending policy, when lending securities a Fund is required to maintain collateral with a market value not less than 100% of the market value of loaned securities. Collateral is adjusted daily in connection with changes in the market value of securities on loan bringing the collateral market value in line with the required percent. Due to timing of collateral adjustments, the market value of collateral held with respect to a loaned security, may be more or less than the value of the security on loan. | |
Collateral may consist of cash and securities issued by the U.S. Government or its agencies. Cash collateral is invested in a short-term money market fund. Dividends earned on the collateral and premiums paid by the broker are recorded as income by the Fund net of fees and rebates charged/paid by BNYM for its services as securities lending agent and in connection with this securities lending program. Lending portfolio securities involves a risk of delay in the recovery of the loaned securities or in the declining value of the collateral. | |
Securities lending transactions are entered into by each Fund under a Master Securities Lending Agreement (“MSLA”) which permits the Fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset amounts payable by the Fund to the same counterparty against amounts to be received and create one single net payment due to or from the Fund. | |
At October 31, 2022, the Funds had no securities on loan. |
A. | Investment Adviser |
Virtus Alternative Investment Advisers, Inc. (“VAIA” or the “Adviser”), an indirect, wholly-owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”), is the investment adviser to the Funds. The Adviser manages the Funds’ investment programs and general operations of the Funds, including oversight of the Funds’ subadvisers. | |
As compensation for its services to the Funds, the Adviser is entitled to a fee, which is calculated daily and paid monthly based upon the following annual rates as a percentage of the average daily net assets of each Fund. |
First $1 Billion | $1+ Billion | ||
Duff & Phelps Select MLP and Energy Fund | 0.90% | 0.85% | |
KAR Long/Short Equity Fund | 1.25 | 1.20 |
B. | Subadvisers |
The subadvisers manage the investments of each Fund for which they are paid a fee by the Adviser. | |
The subadvisers and the Funds they serve as of the end of the period are as follows: Duff & Phelps Investment Management Co. (“Duff & Phelps”), an indirect wholly-owned subsidiary of Virtus, for Duff & Phelps Select MLP and Energy Fund; and Kayne Anderson Rudnick Investment Management, LLC (“KAR”), an indirect wholly-owned subsidiary of Virtus, for KAR Long/Short Equity Fund. | |
C. | Expense Limitations |
The Adviser has contractually agreed to limit Duff & Phelps Select MLP and Energy Fund’s and KAR Long/Short Equity Fund’s annual total operating expenses, subject to certain exclusions, so that such expenses do not exceed, on an annualized basis, the following respective percentages of average daily net assets through June 26, 2023 and February 28, 2023 respectively. Following the contractual period, the Adviser |
may discontinue these expense reimbursement arrangements at any time. The waivers and reimbursements are accrued daily and received monthly. |
Fund | Class A | Class C | Class I | Class R6 | ||||
Duff & Phelps Select MLP and Energy Fund | 1.40% | 2.15% | 1.15% | N/A | ||||
KAR Long/Short Equity Fund | 1.80 | 2.55 | 1.55 | 1.48 % |
D. | Expense Recapture |
Under certain conditions, the Adviser may recapture operating expenses reimbursed or fees waived under these arrangements within three years after the date on which such amounts were incurred or waived. A Fund must pay its ordinary operating expenses before the Adviser is entitled to any reimbursement and must remain in compliance with any applicable expense limitations or, if none, the expense limitation in effect at the time of the waiver or reimbursement. All or a portion of the following Adviser reimbursed expenses may be recaptured by the period ending October 31: |
Expiration | ||||||||
Fund | 2023 | 2024 | 2025 | Total | ||||
Duff & Phelps Select MLP and Energy Fund | ||||||||
Class A | $ 9 | $ 6 | $ 13 | $ 28 | ||||
Class C | 1 | 1 | 1 | 3 | ||||
Class I | 62 | 77 | 62 | 201 | ||||
KAR Long/Short Equity Fund | ||||||||
Class A | 1 | 3 | 4 | 8 | ||||
Class C | 1 | — (1) | — (1) | 1 | ||||
Class I | 139 | 126 | 129 | 394 | ||||
Class R6 | 5 | — (1) | — (1) | 5 |
(1) | Amount is less than $500. |
Fund | Class A | Class C | Class I | Class R6 | Total | |||||
Duff & Phelps Select MLP and Energy Fund | $ 2 | $— (1) | $18 | $— | $ 20 | |||||
KAR Long/Short Equity Fund | — | — (1) | — | — (1) | — (1) |
(1) | Amount is less than $500. |
E. | Distributor |
VP Distributors, LLC (“VP Distributors”), an indirect, wholly-owned subsidiary of Virtus, serves as the distributor of each Fund’s shares. VP Distributors has advised the Funds that for the fiscal year (the “period”) ended October 31, 2022, it retained net commissions of $8 for Class A shares and CDSC of $—(1) and $1 for Class A shares and Class C shares, respectively. | |
In addition, each Fund pays VP Distributors 12b-1 fees under a 12b-1 Plan as a percentage of the average daily net assets of each respective class at the annual rates of 0.25% for Class A shares and 1.00% for Class C shares. Class I and Class R6 shares are not subject to a 12b-1 Plan. | |
Under certain circumstances, shares of certain Virtus Mutual Funds may be exchanged for shares of the same class of certain other Virtus Mutual Funds on the basis of the relative NAV per share at the time of the exchange. On exchanges with share classes that carry a CDSC, the CDSC schedule of the original shares purchased continues to apply. | |
(1) Amount is less than $500. | |
F. | Administrator and Transfer Agent |
Virtus Fund Services, LLC, an indirect, wholly-owned subsidiary of Virtus, serves as the administrator and transfer agent to the Funds. | |
For the period ended October 31, 2022, the Funds incurred administration fees totaling $146 which are included in the Statements of Operations within the line item “Administration and accounting fees.” The fees are calculated daily and paid monthly. | |
For the period ended October 31, 2022, the Funds incurred transfer agent fees totaling $66 which are included in the Statements of Operations within the line item “Transfer agent fees and expenses.” The fees are calculated daily and paid monthly. | |
G. | Trustee Compensation |
The Trust provides a deferred compensation plan for its Trustees who receive compensation from the Trust. Under the deferred compensation plan, Trustees may elect to defer all or a portion of their compensation. Amounts deferred are retained by the Trust, and then, to the extent permitted by |
the 1940 Act, in turn, may be invested in the shares of affiliated or unaffiliated mutual funds selected by the participating Trustees. Investments in such instruments are included in “Other assets” in the Statements of Assets and Liabilities at October 31, 2022. |
Purchases | Sales | ||
Duff & Phelps Select MLP and Energy Fund | $15,596 | $12,462 | |
KAR Long/Short Equity Fund | 38,564 | 70,118 |
Duff & Phelps Select MLP and Energy Fund | KAR Long/Short Equity Fund | ||||||||||||||
Year Ended October 31, 2022 | Year Ended October 31, 2021 | Year Ended October 31, 2022 | Year Ended October 31, 2021 | ||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | SHARES | AMOUNT | SHARES | AMOUNT | ||||||||
Class A | |||||||||||||||
Shares sold and cross class conversions | 1,128 | $ 12,244 | 240 | $ 2,035 | 76 | $ 1,393 | 316 | $ 5,616 | |||||||
Reinvestment of distributions | 24 | 261 | 5 | 48 | 1 | 23 | 1 | 24 | |||||||
Shares repurchased and cross class conversions | (640) | (6,681) | (80) | (664) | (295) | (4,863) | (97) | (1,740) | |||||||
Net Increase / (Decrease) | 512 | $ 5,824 | 165 | $ 1,419 | (218) | $ (3,447) | 220 | $ 3,900 | |||||||
Class C | |||||||||||||||
Shares sold and cross class conversions | 44 | $ 454 | 24 | $ 193 | 1 | $ 25 | 8 | $ 134 | |||||||
Reinvestment of distributions | 1 | 12 | — (1) | 4 | — (1) | 2 | — (1) | 4 | |||||||
Shares repurchased and cross class conversions | (13) | (141) | (7) | (62) | (2) | (39) | (14) | (252) | |||||||
Net Increase / (Decrease) | 32 | $ 325 | 17 | $ 135 | (1) | $ (12) | (6) | $ (114) | |||||||
Class I | |||||||||||||||
Shares sold and cross class conversions | 485 | $ 5,152 | 27 | $ 212 | 1,868 | $ 31,484 | 3,139 | $ 56,417 | |||||||
Shares Issued-Merger(2) | — | — | 2,835 | 24,844 | — | — | — | — | |||||||
Reinvestment of distributions | 48 | 546 | 45 | 412 | 29 | 563 | 59 | 1,028 | |||||||
Shares repurchased and cross class conversions | (764) | (7,790) | (1,323) | (11,380) | (3,677) | (60,122) | (1,808) | (32,101) | |||||||
Net Increase / (Decrease) | (231) | $ (2,092) | 1,584 | $ 14,088 | (1,780) | $ (28,075) | 1,390 | $ 25,344 | |||||||
Class R6 | |||||||||||||||
Shares sold and cross class conversions | — | $ — | — | $ — | 20 | $ 340 | 12 | $ 204 | |||||||
Reinvestment of distributions | — | — | — | — | — (1) | 1 | — (1) | — (1) | |||||||
Shares repurchased and cross class conversions | — | — | — | — | (7) | (112) | — | — | |||||||
Net Increase / (Decrease) | — | $ — | — | $ — | 13 | $ 229 | 12 | $ 204 |
(1) | Amount is less than $500 or 500 shares. |
(2) | See Note 12. |
% of Shares Outstanding | Number of Accounts | ||
Duff & Phelps Select MLP and Energy Fund | 28 % | 2 * | |
KAR Long/Short Equity Fund | 91 | 2 |
* | Includes affiliated shareholder account(s). |
Sector | Percentage of Total Investments | ||
Duff & Phelps Select MLP and Energy Fund | Gathering/Processing | 29% | |
KAR Long/Short Equity Fund | Financials | 27 | |
KAR Long/Short Equity Fund | Information Technology | 35 |
Fund | Interest Incurred on Borrowing | Average Dollar Amount of Borrowing | Weighted Average Interest Rate on Borrowing | Days Loan was Open | ||||
Duff & Phelps Select MLP and Energy Fund | $1 | $1,278 | 2.41% | 9 | ||||
KAR Long/Short Equity Fund | 1 | 4,475 | 1.15 | 4 |
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||
Duff & Phelps Select MLP and Energy Fund | $ 27,494 | $ 7,979 | $ (694) | $ 7,285 | ||||
KAR Long/Short Equity Fund | 94,186 | 21,832 | (13,656) | 8,176 | ||||
KAR Long/Short Equity Fund (Short Sales) | (25,644) | 5,369 | (1,447) | 3,922 |
Fund | Short-Term | Long-Term | ||
Duff & Phelps Select MLP and Energy Fund | ||||
Expires 10/31/2023 | $ 15,978 | $— | ||
Expires 10/31/2024 | 91,225 | — | ||
Total | 107,203 | — |
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Late Year Ordinary Losses Deferred | Capital Loss Deferred | ||||
Duff & Phelps Select MLP and Energy Fund | $— | $ — | $ 115 | $ 107,203 | |||
KAR Long/Short Equity Fund | — | 4,363 | 853 | — |
Ordinary Income | Long-Term Capital Gains | Return of Capital | Total | ||||
Duff & Phelps Select MLP and Energy Fund | |||||||
10/31/22 | $ — | $ — | $ 1,011 | $1,011 | |||
10/31/21 | 171 | — | 477 | 648 | |||
KAR Long/Short Equity Fund | |||||||
10/31/22 | — | 590 | — | 590 | |||
10/31/21 | 954 | 106 | — | 1,060 |
Merged Fund | Shares Outstanding | Acquiring Fund | Shares Converted | Merged Fund Net Asset Value of Converted Shares | ||||||
Duff & Phelps Select MLP and Midstream Energy Fund Inc. | 2,623,355 | Duff & Phelps Select MLP and Energy Fund | Class I | 2,834,705 | $24,844 |
Merged Fund | Net Assets | Acquiring Fund | Net Assets | |||
Duff & Phelps Select MLP and Midstream Energy Fund Inc. | $24,844 | Duff & Phelps Select MLP and Energy Fund | $9,617 |
Net investment income (loss) | $(1,023)(a) |
Net realized and unrealized gain (loss) on investments | 15,555 (b) |
Net increase (decrease) in net assets resulting from operations | $ 14,532 |
Philadelphia, Pennsylvania
December 22, 2022
Long-Term Capital Gain Distributions ($) | |
KAR Long/Short Equity Fund | $ 4,372 |
Nominee | Votes For | Votes Withheld |
Sarah E. Cogan | 108,108,611.06 | 895,102.03 |
Deborah A. DeCotis | 108,108,611.06 | 895,102.03 |
F. Ford Drummond | 108,137,164.32 | 866,548.77 |
Sidney E. Harris | 107,982,982.61 | 1,020,730.48 |
Connie D. McDaniel | 108,108,611.06 | 895,102.03 |
R. Keith Walton | 108,137,164.32 | 866,548.77 |
Brian T. Zino | 108,100,104.91 | 903,608.18 |
Fund | Votes For | Votes Against | Abstain |
Virtus KAR Long/Short Equity Fund | $79,668,580.95 or 71.589% of Fund | $95,138.45 or 0.085% of Fund | $105,740.58 or 0.095% of Fund |
Name, Year of Birth, Length of Time Served and Number of Portfolios in Fund Complex Overseen by Trustee | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Trustee During Past 5 Years |
Burke, Donald C. YOB: 1960 Served Since: 2016 103 Portfolios | Private investor (since 2009). Formerly, President and Chief Executive Officer, BlackRock U.S. Funds (2007 to 2009); Managing Director, BlackRock, Inc. (2006 to 2009); and Managing Director, Merrill Lynch Investment Managers (1990 to 2006). | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund® ,The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (11 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (2 portfolios); Director (since 2014), closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); Director, Avista Corp. (energy company) (since 2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); and Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010). |
Cogan, Sarah E. YOB: 1956 Served Since: 2021 107 Portfolios | Retired Partner, Simpson Thacher & Bartlett LLP (“STB”) (law firm) (since 2019); Director, Girl Scouts of Greater New York (since 2016); Trustee, Natural Resources Defense Council, Inc. (since 2013); and formerly, Partner, STB (1989 to 2018). | Trustee (since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios) and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), PIMCO Access Income Fund and PIMCO California Flexible Municipal Income Fund; Trustee (since 2021), PIMCO Flexible Emerging Markets Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Trustee (since 2019), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2019), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2019), PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PIMCO Energy and Tactical Credit Opportunities Fund, PCM Fund, Inc, PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO Strategic Income Fund, Inc., PIMCO Flexible Credit Income Fund and PIMCO Flexible Municipal Income Fund; Trustee (since 2019), PIMCO Managed Accounts Trust (5 portfolios); and Trustee (2019 to 2021), PIMCO Dynamic Credit and Mortgage Income Fund and PIMCO Income Opportunity Fund. |
Name, Year of Birth, Length of Time Served and Number of Portfolios in Fund Complex Overseen by Trustee | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Trustee During Past 5 Years |
DeCotis, Deborah A. YOB: 1952 Served Since: 2021 107 Portfolios | Director, Cadre Holdings Inc. (since 2022); Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Member, Circle Financial Group (since 2009); Member, Council on Foreign Relations (since 2013); and Trustee, Smith College (since 2017). Formerly, Director, Watford Re (2017 to 2021); Co-Chair Special Projects Committee, Memorial Sloan Kettering (2005 to 2015); and Trustee, Stanford University (2010 to 2015). | Trustee (since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios) and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), PIMCO Access Income Fund and PIMCO California Flexible Municipal Income Fund; Director, Cadre Holdings Inc. (since 2022); Trustee (since 2021), PIMCO Flexible Emerging Markets Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Trustee (since 2020), PIMCO Dynamic Income Opportunities Fund; Trustee (since 2019), PIMCO Energy and Tactical Credit Opportunities Fund and Virtus Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2018), PIMCO Flexible Municipal Income Fund; Trustee (since 2017), PIMCO Flexible Credit Income Fund and Virtus Convertible & Income 2024 Target Term Fund; Trustee (since 2015), Virtus Diversified Income & Convertible Fund; Trustee (since 2014), Virtus Investment Trust (13 portfolios); Trustee (2013 to 2021), PIMCO Dynamic Credit and Mortgage Income Fund; Trustee (since 2012), PIMCO Dynamic Income Fund; Trustee (since 2011), Virtus Strategy Trust (8 portfolios); Trustee (since 2011), PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PCM Fund, Inc., PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO Strategic Income Fund, Inc., and PIMCO Managed Accounts Trust (5 portfolios); Trustee (since 2011), Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; and Trustee (2011 to 2021), PIMCO Income Opportunity Fund. |
Drummond, F. Ford YOB: 1962 Served Since: 2021 107 Portfolios | Owner/Operator (since 1998), Drummond Ranch; and Director (since 2015), Texas and Southwestern Cattle Raisers Association. Formerly Chairman, Oklahoma Nature Conservancy (2019 to 2020); Board Member (2006 to 2020) and Chairman (2016 to 2018), Oklahoma Water Resources Board; Director (1998 to 2008), The Cleveland Bank; and General Counsel (1998 to 2008), BMIHealth Plans (benefits administration). | Trustee (since 2022) and Advisory Board Member (2021 to 2022), Virtus Alternative Solutions Trust (2 portfolios), Virtus Mutual Fund Family (61 portfolios), and Virtus Variable Insurance Trust (8 portfolios); Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund, Virtus Stone Harbor Emerging Markets Total Income Fund, The Merger Fund®, The Merger Fund® VL, and Virtus Event Opportunities Trust (2 portfolios); Advisory Board Member (February 2021 to June 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2021), Virtus Global Multi-Sector Income Fund and Virtus Total Return Fund Inc.; Trustee (since 2019), Virtus Artificial Intelligence & Technology Opportunities Fund; Trustee (since 2017), Virtus Convertible & Income 2024 Target Term Fund; Trustee (since 2015), Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Dividend, Interest & Premium Strategy Fund and Virtus Equity & Convertible Income Fund; Trustee (since 2014), Virtus Strategy Trust (8 portfolios); Director (since 2011), Bancfirst Corporation; and Trustee (since 2006), Virtus Investment Trust (13 portfolios). |
Name, Year of Birth, Length of Time Served and Number of Portfolios in Fund Complex Overseen by Trustee | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Trustee During Past 5 Years |
Harris, Sidney E. YOB: 1949 Served Since: 2017 100 Portfolios | Private Investor (since 2021); Dean Emeritus (since 2015), Professor (2015 to 2021 and 1997 to 2014), and Dean (1997 to 2004), J. Mack Robinson College of Business, Georgia State University. | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2019), Mutual Fund Directors Forum; Trustee (since 2017), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios), and Virtus Alternative Solutions Trust (2 portfolios); Trustee (2013 to 2020) and Honorary Trustee (since 2020), KIPP Metro Atlanta; Director (1999 to 2019), Total System Services, Inc.; Trustee (2004 to 2017), RidgeWorth Funds; Chairman (2012 to 2017), International University of the Grand Bassam Foundation; Trustee (since 2012), International University of the Grand Bassam Foundation; and Trustee (2011 to 2015), Genspring Family Offices, LLC. |
Mallin, John R. YOB: 1950 Served Since: 2016 100 Portfolios | Partner/Attorney (since 2003), McCarter & English LLP (law firm) Real Property Practice Group; and Member (since 2014), Counselors of Real Estate. | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (61 portfolios) and Virtus Alternative Solutions Trust (2 portfolios); Director (since 2019), 1892 Club, Inc. (non-profit); Director (2013 to 2020), Horizons, Inc. (non-profit); and Trustee (since 1999), Virtus Variable Insurance Trust (8 portfolios). |
McDaniel, Connie D. YOB: 1958 Served Since: 2017 100 Portfolios | Retired (since 2013). Vice President, Chief of Internal Audit, Corporate Audit Department (2009 to 2013); Vice President, Global Finance Transformation (2007 to 2009); and Vice President and Controller (1999 to 2007), The Coca-Cola Company. | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Director (since 2019), Global Payments Inc.; Chairperson (since 2019), Governance & Nominating Committee, Global Payments Inc; Trustee (since 2017), Virtus Mutual Fund Family (61 portfolios), Virtus Variable Insurance Trust (8 portfolios), and Virtus Alternative Solutions Trust (2 portfolios); Director (since 2021), North Florida Land Trust; Director (2014 to 2019), Total System Services, Inc.; Member (since 2011) and Chair (2014 to 2016), Georgia State University, Robinson College of Business Board of Advisors; and Trustee (2005 to 2017), RidgeWorth Funds. |
McLoughlin, Philip YOB: 1946 Served Since: 2013 110 Portfolios | Private investor since 2010. | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2022) and Advisory Board Member (2021), Virtus Convertible & Income 2024 Target Term Fund and Virtus Convertible & Income Fund; Director and Chairman (since 2016), Virtus Total Return Fund Inc.; Director and Chairman (2016 to 2019), the former Virtus Total Return Fund Inc.; Director and Chairman (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (2 portfolios); Trustee and Chairman (since 2011), Virtus Global Multi-Sector Income Fund; Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (8 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); Director (1991 to 2019) and Chairman (2010 to 2019), Lazard World Trust Fund (closed-end investment firm in Luxembourg); and Trustee (since 1989) and Chairman (since 2002), Virtus Mutual Fund Family (61 portfolios). |
Name, Year of Birth, Length of Time Served and Number of Portfolios in Fund Complex Overseen by Trustee | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Trustee During Past 5 Years |
McNamara, Geraldine M. YOB: 1951 Served Since: 2016 103 Portfolios | Private investor (since 2006); and Managing Director, U.S. Trust Company of New York (1982 to 2006). | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Director (2020 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Director (since 2020), Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016) Virtus Alternative Solutions Trust (2 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (8 portfolios); Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (3 funds); and Trustee (since 2001), Virtus Mutual Fund Family (61 portfolios). |
Walton, R. Keith YOB: 1964 Served Since: 2020 107 Portfolios | Venture and Operating Partner (since 2020), Plexo Capital, LLC; Venture Partner (since 2019) and Senior Adviser (2018 to 2019), Plexo, LLC; and Partner (since 2006), Global Infrastructure Partners. Formerly, Managing Director (2020 to 2021), Lafayette Square Holding Company LLC; Senior Adviser (2018 to 2019), Vatic Labs, LLC; Executive Vice President, Strategy (2017 to 2019), Zero Mass Water, LLC; and Vice President, Strategy (2013 to 2017), Arizona State University. | Trustee (since 2022) and Advisory Board Member (January 2022 to July 2022), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income Fund and Virtus Equity & Convertible Income Fund; Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2022), Virtus Diversified Income & Convertible Fund; Advisory Board Member (since 2022), Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund II and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2020) Virtus Alternative Solutions Trust (2 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (61 portfolios); Director (since 2017), certain funds advised by Bessemer Investment Management LLC; Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (2006 to 2019), Systematica Investments Limited Funds; Director (2006 to 2017), BlueCrest Capital Management Funds; Trustee (2014 to 2017), AZ Service; Director (since 2004), Virtus Total Return Fund Inc.; and Director (2004 to 2019), the former Virtus Total Return Fund Inc. |
Zino, Brian T. YOB: 1952 Served Since: 2020 107 Portfolios | Retired. Various roles (1982 to 2009), J. & W. Seligman & Co. Incorporated, including President (1994 to 2009). | Trustee (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Trustee (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee (since 2022) and Advisory Board Member (2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; Trustee (since 2020) Virtus Alternative Solutions Trust (2 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (61 portfolios); Director (2016 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (since 2014), Virtus Total Return Fund Inc.; Director (2014 to 2019), the former Virtus Total Return Fund Inc.; Trustee (since 2011), Bentley University; Director (1986 to 2009) and President (1994 to 2009), J&W Seligman Co. Inc.; Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002), ICI Mutual Insurance Company; Member, Board of Governors of ICI (1998 to 2008). |
Name, Year of Birth, Length of Time Served and Number of Funds Overseen | Principal Occupation(s) During Past 5 Years | Principal Occupation(s) During Past 5 Years and Other Directorships Held by Trustee |
Aylward, George R.* Trustee and President YOB: 1964 Served Since: 2013 112 Portfolios | Director, President and Chief Executive Officer (since 2008),Virtus Investment Partners, Inc. and/or certain of its subsidiaries, and various senior officer positions with Virtus affiliates (since 2005). | Trustee, President and Chief Executive Officer (since 2022), Virtus Stone Harbor Emerging Markets Income Fund and Virtus Stone Harbor Emerging Markets Total Income Fund; Member, Board of Governors of the Investment Company Institute (since 2021); Trustee and President (since 2021), The Merger Fund®, The Merger Fund® VL, Virtus Event Opportunities Trust (2 portfolios), Virtus Investment Trust (13 portfolios) and Virtus Strategy Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2021), Virtus Artificial Intelligence & Technology Opportunities Fund, Virtus Convertible & Income 2024 Target Term Fund, Virtus Convertible & Income Fund, Virtus Convertible & Income Fund II, Virtus Diversified Income & Convertible Fund, Virtus Equity & Convertible Income Fund, and Virtus Dividend, Interest & Premium Strategy Fund; Chairman and Trustee (since 2015), Virtus ETF Trust II (5 portfolios); Director, President and Chief Executive Officer (2014 to 2021), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and President (since 2013), Virtus Alternative Solutions Trust (2 portfolios); Director (since 2013), Virtus Global Funds, PLC (5 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2011), Virtus Global Multi-Sector Income Fund; Trustee and President (since 2006) and Executive Vice President (2004 to 2006), Virtus Mutual Fund Family (61 portfolios); Director, President and Chief Executive Officer (since 2006), Virtus Total Return Fund Inc.; and Director, President and Chief Executive Officer (2006 to 2019), the former Virtus Total Return Fund Inc. |
Name, Address and Year of Birth | Position(s) Held with Trust and Length of Time Served | Principal Occupation(s) During Past 5 Years |
Batchelar, Peter J. YOB: 1970 | Senior Vice President (since 2017), and Vice President (2013 to 2016). | Senior Vice President, Product Development (since 2017), Vice President, Product Development (2008 to 2017), and various officer positions (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2008) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc. |
Bradley, W. Patrick YOB: 1972 | Executive Vice President (since 2016); Senior Vice President (2013 to 2016); Chief Financial Officer and Treasurer (since 2013). | Executive Vice President, Fund Services (since 2016), Senior Vice President, Fund Services (2010 to 2016) and various officer positions (since 2004), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2006) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; Member (since 2022), BNY Mellon Asset Servicing Client Advisory Board. |
Branigan, Timothy YOB: 1976 | Vice President and Fund Chief Compliance Officer (since 2022); Assistant Vice President and Deputy Fund Chief Compliance Officer (March to May 2022); and Assistant Vice President and Assistant Chief Compliance Officer (2021 to 2022). | Various officer positions (since 2019) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc. |
Carr Kevin J. YOB: 1954 | Senior Vice President (since 2017) and Assistant Secretary (since 2013). | Vice President and Senior Counsel (since 2017), Senior Vice President (2009 to 2017), Vice President, Counsel and Secretary (2008 to 2009) and various officer positions (since 2005), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various officer positions (since 2005) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc. |
Fromm, Jennifer YOB: 1973 | Vice President, Chief Legal Officer, Counsel and Secretary (since 2013). | Vice President (since 2016) and Senior Counsel, Legal (since 2007) and various officer positions (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; various officer positions (since 2008) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc |
Name, Address and Year of Birth | Position(s) Held with Trust and Length of Time Served | Principal Occupation(s) During Past 5 Years |
Short, Julia R. YOB: 1972 | Senior Vice President (since 2021). | Senior Vice President, Product Development (since 2017), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Senior Vice President (since 2017) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; and Managing Director, Product Manager, RidgeWorth Investments (2004 to 2017). |
Smirl, Richard W. YOB: 1967 | Executive Vice President (since 2021). | Chief Operating Officer (since 2021), Virtus Investment Partners, Inc.; Executive Vice President (since 2021), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; Executive Vice President (since 2021) of various registered funds advised by subsidiaries of Virtus Investment Partners, Inc.; Chief Operating Officer (2018 to 2021), Russell Investments; Executive Director (Jan. to July 2018), State of Wisconsin Investment Board; and Partner and Chief Operating Officer (2004 to 2018), William Blair Investment Management. |
a series of Virtus Alternative Solutions Trust
Virtus KAR Long/Short Equity Fund | Julie Biel, CFA (since March 2022) |
Chris Wright, CFA (since the Fund’s inception in December 2018) |
Accounting Firm
Mutual Fund Services | 1-800-243-1574 |
Adviser Consulting Group | 1-800-243-4361 |
Website | Virtus.com |
The Securities and Exchange Commission has modified mailing regulations for semiannual and annual shareholder fund reports to allow mutual fund companies to send a single copy of these reports to shareholders who share the same mailing address. If you would like additional copies, please call Mutual Fund Services at 1-800-243-1574.
please contact us at 1-800-243-1574, or visit Virtus.com.
8555 | 12-22 |
(b) | Not applicable. |
Item 2. Code of Ethics.
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | Other than certain non-substantive changes, there have been no amendments during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics described in Item 2(b) of the instructions for completion of Form N-CSR. A copy of the currently applicable code is included as an exhibit. |
(d) | The registrant has not granted any waivers during the period covered by this report, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
(a)(1) | The Registrant’s Board of Trustees has determined that the Registrant has an “audit committee financial expert” serving on its Audit Committee. |
(a)(2) | The Registrant’s Board of Trustees has determined that Donald C. Burke, Connie D. McDaniel and Brian T. Zino each possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an “audit committee financial expert.” Each such individual is an “independent” trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. |
(a)(3) | Not applicable. |
Item 4. Principal Accountant Fees and Services.
Audit Fees
(a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $45,760 for 2022 and $41,600 for 2021. |
Audit-Related Fees
(b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $1,107 for 2022 and $2,272 for 2021. Such audit-related fees include out of pocket expenses and fees related to a new fund launch. |
Tax Fees
(c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $19,246 for 2022 and $24,725 for 2021. |
“Tax Fees” are primarily associated with review of the Trust’s tax provision and qualification as a regulated investment company (RIC) in connection with audits of the Trust’s financial statement, review of year-end distributions by the Fund to avoid excise tax for the Trust, periodic discussion with management on tax issues affecting the Trust, and reviewing and signing the Fund’s federal income tax returns.
All Other Fees
(d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2022 and $0 for 2021. |
(e)(1) | Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
The Board of Trustees of Virtus Alternative Solutions Trust (the “Fund”) has adopted policies and procedures with regard to the pre-approval of services provided by its independent auditors. Audit, audit-related and tax compliance services provided to the Fund on an annual basis require specific pre-approval by the Audit Committee. The Audit Committee also must approve other non-audit services provided to the Fund and those non-audit services provided to the Fund’s Affiliated Service Providers that relate directly to the operations and financial reporting of the Fund. Certain of these non-audit services that the Audit Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent auditors may be approved by the Audit Committee without consideration on a specific case-by-case basis (“general pre-approval”).
The Audit Committee has determined that the Chair of the Audit Committee, may provide pre-approval for such services that meet the above requirements but are not included in the general pre-approval in the event such approval is sought between regularly scheduled meetings. In any event, the Audit Committee is informed of, and ratifies, each service approved at the next regularly scheduled in-person Audit Committee meeting.
(e)(2) | The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
(b) 0%
(c) 0%
(d) N/A
(f) | The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $20,353 for 2022 and $26,997 for 2021. |
(h) | The registrant’s audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
(i) | Not applicable. |
(j) | Not applicable. |
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form.
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s most recent fiscal period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) |
(a)(2) |
(a)(2)(1) | Not applicable. |
(a)(2)(2) | Not applicable. |
(b) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Virtus Alternative Solutions Trust |
By (Signature and Title)* /s/ George R. Aylward |
George R. Aylward, President |
(principal executive officer) |
Date 12/29/2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ George R. Aylward |
George R. Aylward, President |
(principal executive officer) |
Date 12/29/2022 |
By (Signature and Title)* /s/ W. Patrick Bradley |
W. Patrick Bradley, Executive Vice President, Chief Financial Officer and Treasurer |
(principal financial and accounting officer) |
Date 12/29/2022 |
* | Print the name and title of each signing officer under his or her signature. |