Q2 EQUITY | GLOBAL EQUITY 21 QUARTERLY COMMENTARY Virtus Vontobel Global Opportunities Fund A: NWWOX (92828R446) | C: WWOCX (92828R420) | I: WWOIX (92828W775) | R6: VRGOX (92828W213)

MARKET REVIEW PORTFOLIO CHANGES Global equities notched up another quarter of solid returns, We purchased Korean Samsung Electronics, the top global player supported by the further reopening of economies enabled by the in memory semiconductors, smartphones, OLED display panels, loosening of COVID-19 restrictions. Although markets have been and TVs; U.S.-based Abbott Laboratories, a diversified healthcare buoyant, there are also concerns of the rising threat of inflation products company focused on medical devices, diagnostics, due to a recovering global economy, tighter supply chains, and nutritionals, and branded generic drugs; and Ashtead Group, a higher commodity prices. U.K. provider of industrial equipment rentals with most of its business in the U.S. We exited our positions in U.S. healthcare PERFORMANCE company Johnson & Johnson, U.S. industrials company IHS In the quarter, the Fund returned 8.33% (Class I), outperforming Markit, German information technology company SAP, Chinese the MSCI All Country World Index, which returned 7.39%. communication services company NetEase, U.S. communication services company Comcast, and U.S. consumer staples company Microsoft and Alphabet were the largest contributors to absolute PepsiCo to reallocate capital to better opportunities. returns for the quarter. > Microsoft announced fiscal Q3 results that were strong in OUTLOOK various areas. As its digital transformation continued, revenues We expect rising inflation will continue to be an issue in the rose to $42 billion, a 19% year-over-year increase. Microsoft’s second half of this year. While some price increases are slowing cloud business, Azure, saw a 46% increase in revenues, and for goods like lumber and used cars, others remain high. We Dynamics 365 (digital applications, cloud, enhanced security) expect inflation to ease further into 2022 after unemployment saw a 40% rise year over year. Non-GAAP EBIT margins rose benefits expire and wage pressures normalize. The Fed is likely to 40.9%. Microsoft is enjoying an acceleration of growth in its to take a gradual approach to tapering and raising interest rates. various businesses, and it remains a top position in the portfolio. Valuations for many growth companies have declined while value > Alphabet’s Q1 results were a positive surprise. The company’s stock multiples have generally increased, driven by cyclical total revenues grew 31% to $51 billion year over year. Alphabet is optimism and stimulus. As a result, the price-to-earnings (P/E) the parent of search engine Google, video platform YouTube, and multiple premium of growth versus value in the U.S. has other hardware and software businesses. We believe Alphabet narrowed dramatically. Of the value sectors that are still somewhat continues to benefit from advertising spend moving to digital, as cheap, energy is prone to low predictability while financials are well as from cloud services, where it is the number three provider challenged by low loan growth longer term and an uncertain after Amazon and Microsoft, and from other secular growth drivers outlook on net interest margins. Hence, we believe that a large in media, e-commerce, and technology. part of the value rally has already taken place. Booking Holdings and Flutter Entertainment were the largest In our view, the fundamental drivers of quality growth detractors from absolute returns. companies remain intact. Structural themes, such as e-commerce > Internet travel company Booking Holdings released Q1 figures penetration, cash-to-card migration, and premiumization in in early May, but given the company is in the travel and leisure consumer discretionary, should persist as the recovery continues. industry, its numbers were negative year over year due to Quality growth stocks can also benefit from cyclical tailwinds. COVID-19. However, Booking saw improvement in room-rate For example, companies like Google with online travel advertising, decline in Q2 versus Q1, and summer bookings in Europe, which is still weak, and Mastercard, with roughly one-third of its its biggest market, were reported as within 30% of 2019’s earnings related to cross-border travel, could benefit from a strong numbers. Booking is a leader in its field but still has only a rebound in travel in 2022. single-digit market share, suggesting room for growth in the Chinese technology companies have been impacted by concerns coming years. We continue to view the company favorably. about competition and regulatory pressure. Several e-commerce > Flutter Entertainment is an international gaming company players are investing in online grocery, which should hold back with strong market positions in the U.K., Ireland, U.S., and earnings this year. However, core earnings growth is strong and we Australia. The company is experiencing secular growth that expect a good recovery in growth in 2022 as these companies comes from the long-term trend toward legal gambling and shift lap those investments. Hence, the current depressed valuations to internet-based gambling. Flutter reported strong revenue should represent attractive levels on a 12-month view and particularly growth (+33%) for fiscal Q1, resulting in analyst upgrades to on a three-year view. We believe the leading Chinese internet names full-year sales and earnings. At the same time, it unexpectedly currently represent an attractive mix of value and quality. announced that U.S. business FanDuel’s well-regarded CEO was Related Resource: Vontobel Q2 Market Review and Outlook: resigning, and that FanDuel’s listing would be delayed as the Fundamental Growth Drivers Continue company sought his replacement. While this development caused weakness in the share price, we believe Flutter should exhibit better performance once a new CEO is announced. Q2 Virtus Vontobel Global Opportunities Fund 21 QUARTERLY COMMENTARY

INVESTMENT ADVISER PORTFOLIO MANAGERS TOP TEN HOLDINGS % Fund Virtus Investment Advisers, Inc. Matthew Benkendorf Microsoft Corp. 5.70 Industry start date: 1998 Amazon.com Inc. 4.75 INVESTMENT SUBADVISER Start date as Fund Portfolio Manager: 2009 Mastercard Inc. 4.15 Vontobel Asset Management Ramiz Chelat Nestlé SA 4.12 Industry start date: 1997 Visa Inc. 3.89 Start date as Fund Portfolio Manager: 2016 CME Group Inc. 3.82 Alphabet, Inc.- Cl C 3.71 UnitedHealth Group Inc. 3.21 Housing Development AVERAGE ANNUAL TOTAL RETURNS (%) as of 06/30/21 Finance Corp., Ltd. 3.13 n Fund Class I n Index Coca-Cola Co./The 3.13 Holdings are subject to change. 39.26 TOP FIVE CONTRIBUTORS % Contribution 33.19 Microsoft Corp. 0.82 Alphabet, Inc.- Cl C 0.71 15.97 15.56 14.61 14.57 13.20 12.30

11.60 Nestlé SA 0.55 9.40 8.33 7.39 Amazon.com Inc. 0.52 n/a n/a PayPal Holdings Inc. 0.52 QTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception (08/08/12) TOP FIVE DETRACTORS % Contribution Performance data quoted represents past performance. Past performance does not guarantee future Flutter Entertainment PLC -0.47 results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth Booking Holdings Inc. -0.15 more or less than their original cost. Current performance may be lower or higher than the performance Tencent Holdings Ltd. -0.09 data quoted. Please visit virtus.com for performance data current to the most recent month end. This share class has no sales charges and is not available to all investors. Other share classes have sales Housing Development charges. See virtus.com for details. Finance Corp., Ltd. -0.07 The fund class gross expense ratio is 1.17%. The net expense ratio is 1.09%, which reflects a contractual Walt Disney Co./The -0.05 expense reimbursement in effect through 2/1/2022. % Contribution: Absolute weighted contribution. Average annual total return is the annual compound return for the indicated period and reflects the change in share price and To obtain the top/bottom holdings calculation the reinvestment of all dividends and capital gains. Returns for periods of one year or less are cumulative returns. methodology, call 800-243-4361. Index: The MSCI All Country World Index (net) is a free float-adjusted market capitalization-weighted index that measures equity performance of developed and emerging markets. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Notes on Risk: Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk. Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk. Market Volatility: Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the ability of the portfolio manager(s) to invest the portfolio’s assets as intended Prospectus: For additional information on risks, please see the fund’s prospectus. The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities. Please consider a Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other information about any Virtus Fund, contact your financial professional, call 800-243-4361, or visit virtus.com for a prospectus or summary prospectus. Read it carefully before investing. Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value. Distributed by VP Distributors, LLC, member FINRA and subsidiary of Virtus Investment Partners, Inc. 2044 07-21 © 2021 Virtus Mutual Funds