INVESTMENT OBJECTIVE: The Virtus Diversified Income & Convertible Fund seeks to provide total return through a combination of current income and capital appreciation, while seeking to provide downside protection against capital loss. The Fund will terminate on the first business day following the fifteenth anniversary of the effective date of this registration statement, 5/22/2030, unless such term is extended by the Trustees and absent Trustee and shareholder approval to amend the limited term.

FUND STRATEGY: Under normal market conditions, the Fund will seek to achieve its investment objective by investing in a combination of convertible securities, debt and other income-producing instruments and common stocks and other equity securities. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of convertible securities, income-producing equity securities and income-producing debt and other instruments of varying maturities. It is expected that substantially all of the Fund’s debt instruments and a substantial portion of its convertible securities will consist of securities rated below investment grade or unrated but determined by the sub-adviser to be of comparable quality (sometimes referred to as high yield securities or junk bonds). The Fund also expects to normally employ a strategy of writing (selling) covered call options on the stocks held in the equity portion of the portfolio (the Option Strategy). The Option Strategy is designed to generate gains from option premiums in an attempt to enhance amounts available for distributions payable to the Fund’s shareholders. The Fund currently anticipates that it will initially engage in bank borrowings through the use of a short-term credit facility for leverage, as soon as practicable after the closing of this offering, with an aggregate principal amount equal to approximately 28% of the Fund’s managed assets (including the assets obtained through such borrowings) immediately after issuance of such borrowings. The Fund currently expects to replace all or a portion of such short-term borrowings with longer-term, fixed-rate financing within the Fund’s first year of operations. The Fund’s intends to make monthly distributions at rates that reflect the past and projected net income of the Fund.