SEC Company Response from VIRTUS EQUITY TRUST (CIK 0000034273) — Nov 13, 2020
VIRTUS EQUITY TRUST (CIK 0000034273)
Date: Nov. 13, 2020 · CIK: 0000034273 · Accession: 0001104659-20-124941
AI Filing Summary & Sentiment
File numbers found in text: 811-00945
Letter
One Financial Plaza, Hartford, CT 06103 | 800.248.7971 | Virtus.com
November 13, 2020
VIA EDGAR
EDGAR Operations Branch
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Attention: Anu Dubey
Virtus Equity Trust (the “Trust”)
485A Filing
CIK 0000034273
File No. 811-00945
Ladies and Gentlemen:
Thank you for your additional telephonic comments of the staff of the U.S. Securities and Exchange Commission (the “Staff”) provided by you on November 11, 2020, pertaining to the above referenced 485A filing (the “Registration Statement”) submitted by Virtus Equity Trust (the “Trust”) on August 31, 2020. Below, we describe the changes made to the Registration Statement in response to the comments and provide any responses to or any supplemental explanations for such comments, as requested. Unless otherwise noted, capitalized terms have the same meanings as used in the Registration Statement.
Set forth below is each comment and the Trust’s response thereto.
1. Comment: Regarding response #5 in your previous response letter, the Staff’s continues to believe that “New Leaders” in the name of the fund indicates a type of investment that, under Rule 35d-1, and should have any accompanying 80% policy. The 80% policy should also define in the Principal Investment Strategies what is a New Leader.
Response: We have thoroughly reviewed Rule 35d-1 and related guidance, and we do not believe the term “new leaders” in the fund’s name to be subject to the name rule, as the term “new leaders” is not descriptive of a particular type of investment but instead indicates an investment strategy. We have amended the disclosure to clarify the intended meaning of “new leaders” as follows: “The fund’s subadviser, Sustainable Growth Advisers, LP (“SGA”), uses an investment process to identify companies that it believes have a high degree of predictability, strong profitability and above average earnings and cash flow growth. From such companies, SGA identifies “new leaders” which are companies early in their life cycle, with a focus on companies that demonstrate high quality balance sheets and sustainable revenue and earnings which the subadviser believes is an indicator of a company’s positive growth trajectory. The fund’s assets are expected to be primarily invested in such companies.” However, we have made no other changes in response to this item.
2. Comment: Regarding response #14 in your previous response letter, please disclose what “model/emulation assets” means in Item 10 where the subadviser’s experience is described.
Response: We have added the following sentence, “Model/emulation assets refer to assets for which SGA is under contract to deliver a model portfolio only; they are not considered regulatory assets under management.”
Securities distributed by VP Distributors, LLC
One Financial Plaza, Hartford, CT 06103 | 800.248.7971 | Virtus.com
If you would like to discuss any of these responses in further detail or if you have any questions, please feel free to contact Holly van den Toorn at 404-845-7679. Thank you.
Best regards,
/s/ Jennifer Fromm
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CORRESP 1 filename1.htm One Financial Plaza, Hartford, CT 06103 | 800.248.7971 | Virtus.com November 13, 2020 VIA EDGAR EDGAR Operations Branch Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Attention: Anu Dubey Virtus Equity Trust (the “Trust”) 485A Filing CIK 0000034273 File No. 811-00945 Ladies and Gentlemen: Thank you for your additional telephonic comments of the staff of the U.S. Securities and Exchange Commission (the “Staff”) provided by you on November 11, 2020, pertaining to the above referenced 485A filing (the “Registration Statement”) submitted by Virtus Equity Trust (the “Trust”) on August 31, 2020. Below, we describe the changes made to the Registration Statement in response to the comments and provide any responses to or any supplemental explanations for such comments, as requested. Unless otherwise noted, capitalized terms have the same meanings as used in the Registration Statement. Set forth below is each comment and the Trust’s response thereto. 1. Comment: Regarding response #5 in your previous response letter, the Staff’s continues to believe that “New Leaders” in the name of the fund indicates a type of investment that, under Rule 35d-1, and should have any accompanying 80% policy. The 80% policy should also define in the Principal Investment Strategies what is a New Leader. Response: We have thoroughly reviewed Rule 35d-1 and related guidance, and we do not believe the term “new leaders” in the fund’s name to be subject to the name rule, as the term “new leaders” is not descriptive of a particular type of investment but instead indicates an investment strategy. We have amended the disclosure to clarify the intended meaning of “new leaders” as follows: “The fund’s subadviser, Sustainable Growth Advisers, LP (“SGA”), uses an investment process to identify companies that it believes have a high degree of predictability, strong profitability and above average earnings and cash flow growth. From such companies, SGA identifies “new leaders” which are companies early in their life cycle, with a focus on companies that demonstrate high quality balance sheets and sustainable revenue and earnings which the subadviser believes is an indicator of a company’s positive growth trajectory. The fund’s assets are expected to be primarily invested in such companies.” However, we have made no other changes in response to this item. 2. Comment: Regarding response #14 in your previous response letter, please disclose what “model/emulation assets” means in Item 10 where the subadviser’s experience is described. Response: We have added the following sentence, “Model/emulation assets refer to assets for which SGA is under contract to deliver a model portfolio only; they are not considered regulatory assets under management.” Securities distributed by VP Distributors, LLC One Financial Plaza, Hartford, CT 06103 | 800.248.7971 | Virtus.com If you would like to discuss any of these responses in further detail or if you have any questions, please feel free to contact Holly van den Toorn at 404-845-7679. Thank you. Best regards, /s/ Jennifer Fromm Jennifer Fromm cc: Holly van den Toorn, Esq. Ralph Summa Securities distributed by VP Distributors, LLC