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 and are tied economically to emerging market countries. Virtus Systematic (“Systematic”), a division of Virtus Advisers, LLC, the Fund’s sub-adviser, defines emerging market countries as countries with securities markets that are less sophisticated than more developed markets in terms of participation by investors, analyst coverage, liquidity and/or regulation. The Fund will normally invest primarily in companies located in the countries represented in the Fund’s benchmark, the MSCI Emerging Markets Index (each an “Emerging Market Country”). The Fund considers a company to be economically tied to an Emerging Market Country if (i) its stock is listed on an emerging market exchange; or (ii) it is domiciled or headquartered or primarily operates in, or derives a majority of its profits, revenues, sales, or income from an Emerging Market Country. The Fund may invest a substantial portion of its assets in equity securities of companies located in China.

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 portfolio management personnel. In order to arrive at the final investment portfolio selection, Systematic’s portfolio management personnel complement the recommendations produced by the alpha model with a dynamic risk management overlay and qualitative reviews.

Specifically, Systematic 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 Information Technology sectors.