Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings made for investment purposes) in the securities of companies that pay dividend income. The Fund will invest in securities of companies that are tied economically to countries with developed non-US securities markets. Virtus Systematic (“Systematic”), a division of Virtus Advisers, LLC, the Fund’s sub-adviser, defines developed non-US securities markets as securities markets that are more sophisticated than emerging markets in terms of participation by investors, analyst coverage, liquidity and/or regulation. The Fund may invest some portion of its assets in Hong Kong listed equity securities of companies which are exposed to China’s economic activity.

Systematic believes that behavioral biases of investors contribute to market inefficiencies, creating opportunities. Systematic’s quantitative investment process begins with a proprietary alpha model that uses artificial intelligence to power Natural Language Processing for sentiment analysis, which blends behavioral factors (e.g., human behaviors and biases) and intrinsic valuation factors (e.g., tangible measures of a company’s underlying worth). The final investment and trading decisions are made by Systematic’s’s portfolio management personnel. In order to arrive at the final investment portfolio selection, Systematic’s’s portfolio management personnel complement the recommendations produced by the alpha model with a dynamic risk management overlay and qualitative reviews.

Specifically, Systematic’s utilizes a risk model for portfolio construction, with constraints at the individual security and industry levels to manage exposures relative to the Fund’s benchmark. Additionally, all investment recommendations are thoroughly vetted at the individual company level to confirm the investment rationale and suitability before a purchase or sale.

The Fund normally invests primarily in common stocks, either directly or indirectly through depositary receipts. In addition to common stocks, equity securities in which the fund may invest include, without limitation, preferred stocks, convertible securities and warrants. The Fund may invest in issuers of any size market capitalization, including smaller capitalization companies. The Fund may utilize foreign currency exchange contracts, options, stock index futures contracts and other derivative instruments. The Fund may also use participatory notes (“P-Notes”) or other equity-linked notes to gain exposure to issuers in certain countries. P-Notes are equity-linked instruments used by investors to obtain exposure to non-U.S. equity investments without trading directly in the local market.

The Fund is an actively managed ETF and, thus, does not seek to replicate the performance of a specified index of securities. Instead, it uses an active investment strategy that seeks to meet its investment objective.

In addition, from time to time the Fund may focus its investments (i.e., invest more than 15% of its total assets) in one or more particular sectors. As of the date of this Prospectus, the Fund focused its investments in the Financials and Industrials sectors.