SEC Info - Virtus Variable Insurance Trust

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		Alternative Formats (Word, et al.) Consideration of Advisory and Subadvisory Agreements by the Board of Trustees Disclosure of Series Expenses Duff & Phelps Real Estate Securities Series Financial Highlights KAR Capital Growth Series KAR Equity Income Series KAR Small-Cap Growth Series KAR Small-Cap Value Series Key Investment Terms Management Tables Message to Investors Newfleet Multi-Sector Intermediate Bond Series Notes to Financial Statements Report of Independent Registered Public Accounting Firm SGA International Growth Series Statements of Assets and Liabilities Statements of Changes in Net Assets Statements of Operations Strategic Allocation Series Table of Contents Tax Information Notice
1	1st Page – Filing Submission
"	Table of Contents
"	Message to Investors
"	Disclosure of Series Expenses
"	Key Investment Terms
"	Duff & Phelps Real Estate Securities Series
"	KAR Capital Growth Series
"	KAR Equity Income Series
"	KAR Small-Cap Growth Series
"	KAR Small-Cap Value Series
"	Newfleet Multi-Sector Intermediate Bond Series
"	SGA International Growth Series
"	Strategic Allocation Series
"	Statements of Assets and Liabilities
"	Statements of Operations
"	Statements of Changes in Net Assets
"	Financial Highlights
"	Notes to Financial Statements
"	Report of Independent Registered Public Accounting Firm
"	Tax Information Notice
"	Consideration of Advisory and Subadvisory Agreements by the Board of Trustees
"	Management Tables

ANNUAL REPORT

VIRTUS VARIABLE INSURANCE TRUST

December 31, 2023

Virtus Duff & Phelps Real Estate Securities Series

Virtus KAR Capital Growth Series*

Virtus KAR Equity Income Series

Virtus KAR Small-Cap Growth Series*

Virtus KAR Small-Cap Value Series

Virtus Newfleet Multi-Sector Intermediate Bond Series

Virtus SGA International Growth Series

Virtus Strategic Allocation Series*

*Prospectus supplement applicable to this fund appears at the back of this annual report.

Not FDIC Insured • No Bank Guarantee • May Lose Value

Table of Contents

Message to Investors		1
Disclosure of Series Expenses		2
Key Investment Terms		4
Series	Series Summary	Schedule of Investments
Virtus Duff & Phelps Real Estate Securities Series (“Duff & Phelps Real Estate Securities Series”)	8	28
Virtus KAR Capital Growth Series (“KAR Capital Growth Series”)	11	30
Virtus KAR Equity Income Series (“KAR Equity Income Series”)	13	31
Virtus KAR Small-Cap Growth Series (“KAR Small-Cap Growth Series”)	15	33
Virtus KAR Small-Cap Value Series (“KAR Small-Cap Value Series”)	17	34
Virtus Newfleet Multi-Sector Intermediate Bond Series (“Newfleet Multi-Sector Intermediate Bond Series”)	19	35
Virtus SGA International Growth Series (“SGA International Growth Series”)	22	48
Virtus Strategic Allocation Series (“Strategic Allocation Series”)	25	50
Statements of Assets and Liabilities		60
Statements of Operations		62
Statements of Changes in Net Assets		64
Financial Highlights		68
Notes to Financial Statements		71
Report of Independent Registered Public Accounting Firm		82
Tax Information Notice		83
Consideration of Advisory and Subadvisory Agreements by the Board of Trustees		84
Management Tables		88

Proxy Voting Procedures and Voting Record (Form N-PX)

The subadvisers vote proxies, if any, relating to portfolio securities in accordance with procedures that have been approved by the Board of Trustees of the Trust (“Trustees”, or the “Board”). You may obtain a description of these procedures, along with information regarding how the Series voted proxies during the most recent 12-month period ended June 30, free of charge, by calling toll-free 1-800-367-5877. This information is also available through the Securities and Exchange Commission’s (the “SEC”) website at https://www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The Trust files a complete schedule of portfolio holdings for each Series with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT-P. Form N-PORT-P is available on the SEC’s website at https://www.sec.gov.

Table of Contents

MESSAGE TO INVESTORS

To Virtus Variable Insurance Trust Investors:

I am pleased to present this annual report, which reviews the performance of your Series for the 12 months ended December 31, 2023.

After a challenging 2022, most markets posted positive returns in 2023. Inflation slowed measurably while the U.S. economy showed strength. The efforts of the Federal Reserve (“Fed”) and other central banks to manage inflation appeared more likely to generate an economic “soft landing.” A brief banking crisis in March of 2023 was quickly resolved without impacting economic growth, and investor optimism about the possibilities for artificial intelligence (AI) drove stocks higher. By year-end, interest rates were moderating and the Fed announced that rate cuts might be on the horizon, driving equity markets higher.

Domestic equity indexes demonstrated strong performance for the 12 months ended December 31, 2023. U.S. large-capitalization stocks were up 26.29%, as measured by the S&P 500^® Index, while small-cap stocks returned 16.93%, as measured by the Russell 2000^® Index. International equities also performed well, with developed markets, as measured by the MSCI EAFE^® Index (net), returning 18.24%, while emerging markets, as measured by the MSCI Emerging Markets Index (net), returned 9.83%.

In fixed income markets, the yield on the 10-year Treasury made a round trip in 2023, closing at 3.88% on December 31, 2023, from 3.88% on December 31, 2022. The broader U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, returned 5.53% for the 12-month period, while non-investment grade bonds, as measured by the Bloomberg U.S. Corporate High Yield Bond Index, were up 13.45%.

Thank you for entrusting the Virtus Funds with your assets. Please call our customer service team at 800-367-5877 if you have questions about your account or require assistance. We appreciate your business and remain committed to your long-term financial success.

Sincerely,

George R. Aylward
President, Virtus Variable Insurance Trust
February 2024

Refer to the Series Summary section for your Series’ performance. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above.

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VIRTUS VARIABLE INSURANCE TRUST

DISCLOSURE OF SERIES EXPENSES (Unaudited)

FOR THE SIX-MONTH PERIOD OF July 1, 2023 TO December 31, 2023

We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As an investor in a Virtus Variable Insurance Trust series (each, a “Series”), you incur ongoing costs, including investment advisory fees and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in Series and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period. The Annualized Expense Ratios may be different from the expense ratios in the Financial Highlights which are for the fiscal year ended December 31, 2023.

Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect additional fees and expenses associated with the annuity or life insurance policy through which you invest. Therefore, the accompanying tables are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if the annuity or life insurance policy costs were included, your costs would have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

		Beginning Account Value July 1, 2023	Ending Account Value December 31, 2023	Annualized Expense Ratio	Expenses Paid During Period*
Duff & Phelps Real Estate Securities Series
	Class A	$ 1,000.00	$ 1,059.30	1.07 %	$ 5.55
	Class I	1,000.00	1,060.80	0.82	4.26
KAR Capital Growth Series
	Class A	1,000.00	1,093.20	1.01	5.33
KAR Equity Income Series
	Class A	1,000.00	1,036.60	0.95	4.88
KAR Small-Cap Growth Series
	Class A	1,000.00	1,065.00	1.12	5.83
	Class I	1,000.00	1,066.00	0.87	4.53
KAR Small-Cap Value Series
	Class A	1,000.00	1,115.30	1.08	5.76
Newfleet Multi-Sector Intermediate Bond Series
	Class A	1,000.00	1,051.00	0.92	4.76
	Class I	1,000.00	1,053.30	0.67	3.47
SGA International Growth Series
	Class A	1,000.00	1,037.30	1.12	5.75
	Class I	1,000.00	1,038.60	0.87	4.47
Strategic Allocation Series
	Class A	1,000.00	1,070.70	0.96	5.01

^*

Expenses are equal to the relevant Series’ annualized expense ratio, which is net of waived fees and reimbursed expenses, if applicable, multiplied by the average account value over the period, multiplied by the number of days (184) expenses were accrued in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period.

For Series which may invest in other funds, the annualized expense ratios noted above do not reflect fees and expenses associated with any underlying funds. If such fees and expenses had been included, the expenses would have been higher.

You can find more information about a Series’ expenses in the Financial Statements section that follows. For additional information on operating expenses and other investor costs, refer to that Series’ prospectus.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on a Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Series and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other mutual funds.

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VIRTUS VARIABLE INSURANCE TRUST

DISCLOSURE OF SERIES EXPENSES (Unaudited) (Continued)

FOR THE SIX-MONTH PERIOD OF July 1, 2023 TO December 31, 2023

		Beginning Account Value July 1, 2023	Ending Account Value December 31, 2023	Annualized Expense Ratio	Expenses Paid During Period*
Duff & Phelps Real Estate Securities Series
	Class A	$ 1,000.00	$ 1,019.81	1.07 %	$ 5.45
	Class I	1,000.00	1,021.07	0.82	4.18
KAR Capital Growth Series
	Class A	1,000.00	1,020.11	1.01	5.14
KAR Equity Income Series
	Class A	1,000.00	1,020.42	0.95	4.84
KAR Small-Cap Growth Series
	Class A	1,000.00	1,019.56	1.12	5.70
	Class I	1,000.00	1,020.82	0.87	4.43
KAR Small-Cap Value Series
	Class A	1,000.00	1,019.76	1.08	5.50
Newfleet Multi-Sector Intermediate Bond Series
	Class A	1,000.00	1,020.57	0.92	4.69
	Class I	1,000.00	1,021.83	0.67	3.41
SGA International Growth Series
	Class A	1,000.00	1,019.56	1.12	5.70
	Class I	1,000.00	1,020.82	0.87	4.43
Strategic Allocation Series
	Class A	1,000.00	1,020.37	0.96	4.89

^*

Expenses are equal to the relevant Series’ annualized expense ratio, which is net of waived fees and reimbursed expenses, if applicable, multiplied by the average account value over the period, multiplied by the number of days (184) expenses were accrued in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period.

For Series which may invest in other funds, the annualized expense ratios noted above do not reflect fees and expenses associated with any underlying funds. If such fees and expenses had been included, the expenses would have been higher.

You can find more information about a Series’ expenses in the Financial Statements section that follows. For additional information on operating expenses and other investor costs, refer to that Series’ prospectus.

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VIRTUS VARIABLE INSURANCE TRUST

KEY INVESTMENT TERMS (Unaudited)

December 31, 2023

American Depositary Receipt (“ADR”)

Represents shares of foreign companies traded in U.S. dollars on U.S. exchanges that are held by a U.S. bank or a trust. Foreign companies use ADRs in order to make it easier for Americans to buy their shares.

Asset-Backed Securities (“ABS”)

Asset-backed securities represent interests in pools of underlying assets such as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card arrangements.

Bloomberg U.S. Aggregate Bond Index

The Bloomberg U.S. Aggregate Bond Index measures the U.S. investment-grade fixed-rate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Bloomberg U.S. Corporate High Yield Bond Index

The Bloomberg U.S. Corporate High Yield Bond Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Build America Municipal Insured (“BAM”)

Build America Municipal Insured Bonds are municipal bonds insured against default by Build America Mutual, a Financial Guaranty insurance company.

Consumer Price Index (“CPI”)

The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Exchange-Traded Fund (“ETF”)

An open-end fund that is traded on a stock exchange. Most ETFs have a portfolio of stocks or bonds that track a specific market index.

Federal Funds Rate

The target interest rate set by the Federal Reserve at which commercial banks borrow and lend their extra reserves to one another overnight.

Federal Reserve (“Fed”)

The central bank of the U.S., the Fed is responsible for controlling the money supply, interest rates, and credit with the goal of keeping the U.S. economy and currency stable. Governed by a seven-member board, the system includes 12 regional Federal Reserve Banks, 25 branches, and all national and state banks that are part of the system.

FTSE Nareit Equity REITs Index

The FTSE Nareit Equity REITs Index is a free-float market capitalization-weighted index measuring equity tax-qualified real estate investment trusts, which meet minimum size and liquidity criteria, that are listed on the New York Stock Exchange (“NYSE”), the American Stock Exchange and the NASDAQ National Market System. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Gross Domestic Product (“GDP”)

The GDP represents the market value of all goods and services produced by the economy during the period measured, including personal consumption, government purchases, private inventories, paid-in construction costs, and the foreign trade balance.

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VIRTUS VARIABLE INSURANCE TRUST

KEY INVESTMENT TERMS (Unaudited) (Continued)
December 31, 2023

Headline Inflation

Headline inflation is the total inflation in an economy, as measured by inflation in the prices of a basket of goods that includes commodities like food and energy.

Joint Stock Company (“JSC”)

A joint stock company is a business entity in which shares of the company’s stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.

London Interbank Offered Rate (“LIBOR”)

A benchmark rate that some of the world’s leading banks charge each other for short-term loans and that serves as the first step to calculating interest rates on various loans throughout the world.

Mortgage-Backed Securities (“MBS”)

Mortgage-backed securities represent interests in pools of mortgage loans purchased from individual lenders by a federal agency or originated and issued by private lenders.

MSCI All Country World ex USA Index (net)

The MSCI All Country World ex USA Index (net) is a free float-adjusted market capitalization-weighted index that measures equity performance of developed and emerging markets, excluding the United States. 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 it is not available for direct investment.

MSCI All Country World Index ex USA Small Mid Cap Index (net)

The MSCI All Country World Index ex USA Small Mid Cap Index (net) is a free float-adjusted market capitalization-weighted index that measures mid- and small-cap performance across 22 of 23 Developed Market countries (excluding the U.S.) and 24 Emerging Markets countries. 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.

MSCI EAFE^® Index (net)

The MSCI EAFE^® (Europe, Australasia, Far East) Index (net) is a free float-adjusted market capitalization-weighted index that measures developed foreign market equity performance, excluding the U.S. and Canada. 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 it is not available for direct investment.

MSCI Emerging Markets Index (net)

The MSCI Emerging Markets Index (net) is a free float-adjusted market capitalization-weighted index designed to measure equity market performance in the global 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 it is not available for direct investment.

MSCI USA High Dividend Yield Index (net)

The MSCI USA High Dividend Yield Index is based on the MSCI USA Index, its parent index, and includes large and mid-cap stocks. The index is designed to reflect the performance of equities in the parent index (excluding REITs) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent.

Payment-in-Kind Security (“PIK”)

A bond which pays interest in the form of additional bonds, or preferred stock which pays dividends in the form of additional preferred stock.

Prime Rate

The federal funds rate commercial banks charge their most creditworthy corporate customers.

Real Estate Investment Trust (“REIT”)

A publicly traded company that owns, develops, and operates income-producing real estate such as apartments, office buildings, hotels, shopping centers, and other commercial properties.

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VIRTUS VARIABLE INSURANCE TRUST

KEY INVESTMENT TERMS (Unaudited) (Continued)
December 31, 2023

Risk Asset

A risk asset is generally any asset that has a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate, and currencies.

Russell 1000^® Growth Index

The Russell 1000^® Growth Index is a market capitalization-weighted index of growth-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Russell 1000^® Value Index

The Russell 1000^® Value Index is a market capitalization-weighted index of value-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Russell 2000^® Index

The Russell 2000^® Index is a market capitalization-weighted index of the 2,000 smallest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Russell 2000^® Growth Index

The Russell 2000^® Growth Index is a market capitalization-weighted index of growth-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Russell 2000^® Value Index

The Russell 2000^® Value Index is a market capitalization-weighted index of value-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

S&P 500^® Index

The S&P 500^® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and it is not available for direct investment.

Secured Overnight Financing Rate (“SOFR”)

A broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities.

Sponsored ADR

An ADR which is issued with the cooperation of the company whose stock will underlie the ADR. Sponsored ADRs generally carry the same rights normally given to stockholders, such as voting rights. ADRs must be sponsored to be able to trade on a major U.S. exchange such as the NYSE.

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VIRTUS VARIABLE INSURANCE TRUST

KEY INVESTMENT TERMS (Unaudited) (Continued)
December 31, 2023

Strategic Allocation Series Linked Benchmark

Effective June 4, 2019, the Strategic Allocation Series Linked Benchmark consists of an allocation of 45% Russell 1000^® Growth Index, 15% MSCI ACWI ex USA SMID Cap Index, and 40% Bloomberg U.S. Aggregate Bond Index. Performance of the Strategic Allocation Series Linked Benchmark from September 7, 2016, to June 3, 2019, consists of an allocation of 45% Russell 1000^® Growth Index, 15% MSCI EAFE^® Index, and 40% Bloomberg U.S. Aggregate Bond Index; and performance of the Strategic Allocation Series Linked Benchmark prior to September 7, 2016, consists of an allocation of 60% S&P 500^® Index and 40% Bloomberg U.S. Aggregate Bond Index. The indexes are unmanaged and it is not available for direct investment.

Yield Curve

A yield curve is a line on a graph plotting the interest rates, at a set point in time, of bonds having equal credit quality but different maturity dates.

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Duff & Phelps Real Estate Securities Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Duff & Phelps Investment Management Co.

■	The Series is diversified and has investment objectives of capital appreciation and income with approximately equal emphasis. There is no guarantee that the Series will meet its objectives.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 11.03% and Class I shares at NAV returned 11.31%. For the same period, the FTSE Nareit Equity REITs Index, which serves as the Series’ broad-based and style-specific benchmark appropriate for comparison, returned 13.73%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

The investment landscape throughout 2023 was marked by the undulating trajectory of interest rates. The first three quarters saw interest rates navigating a terrain of heightened volatility as they moved to levels not seen since 2007. This created an environment of uncertainty for investors, primarily in bonds and capital-intensive sectors such as real estate. However, a pivotal moment occurred in late October as softer Consumer Price Index (CPI) data allowed central banks some breathing room, which signaled a notable shift in this trend. For context, the yield on the U.S. 10-year Treasury started the year at 3.9% and peaked at 5.0% in late October, before finishing the year at 3.9% for a full round trip.

The notable decline in interest rates over the last two months of 2023 played a big role in propelling global financial markets higher. Amid the broader market rally, sectors sensitive to interest rate movements, such as technology and longer-maturity bonds, experienced notable gains. However, the S&P real

estate sector demonstrated remarkable resilience, coming in as the top-performing S&P sector for the fourth quarter of 2023.

During the fiscal year, the S&P 500^® Index delivered a 26.3% return while the FTSE NAREIT Equity REITs Index, the Series’ benchmark, increased 13.7%. Over the year, performance across real estate was led by data centers, regional malls, and specialty real estate investment trusts (REITs). Conversely, property sectors with operational question marks, such as diversified, freestanding retail, and office, lagged. Despite interest rates moving higher over the past two years, listed real estate demonstrated operational efficiency through positive earnings and cash flow growth throughout the fiscal year.

What factors affected the Series’ performance during its fiscal year?

The Series trailed its benchmark for the 12 months ended December 31, 2023. Security selection and sector allocation both detracted.

Combining property sector allocation and security selection, the strongest relative contributors to performance for the fiscal year were data centers, diversified, and health care. Security selection was the larger driver of returns for data centers, health care, and lodging/resorts. From a property sector allocation perspective, the largest contributor was the Series’ zero weight to diversified.

At the security level, the Series’ positions in Digital Realty and Equinix, two U.S.-based data center REITs, and Ryman Hospitality, a U.S. lodging REIT, contributed to performance. Digital Realty and Equinix experienced strong secular growth tailwinds during 2023, as data center demand increased meaningfully, while artificial intelligence-related data demand soared over the year. Secular trends are those that can have a longer time frame than the current business cycle and can be less economically dependent. Ryman Hospitality benefited from strength in the group travel segment of the lodging sector, which supported an ongoing recovery in Ryman’s occupancy, as well as healthy pricing power.

Not owning Medical Properties Trust, a U.S. health care REIT, was the largest positive contributor on a relative basis, as the company underperformed due to concerns over balance sheet health.

Combining property sector allocation and security selection, the largest relative detractors from performance were apartments, telecommunications REITs, and manufactured homes. Security selection was a larger relative driver of underperformance for apartments. An overweight allocation to telecommunications REITs detracted, and manufactured homes detracted due to an overweight allocation and selection.

At the security level, the Series’ exposure to Healthpeak, a U.S. health care REIT, was the largest negative contributor on an absolute basis. Healthpeak underperformed due to concerns about increasing supply in the life science sector, the external acquisition of Physicians Realty Trust, and specific tenant issues. Over the year, we reduced this position to a slight underweight. The Series’ exposures to Rexford, a U.S. industrial REIT, and Mid-America Apartments, a U.S. Sunbelt-focused apartment REIT, also detracted from performance. Concerns over the Port of Southern California weighed on investor sentiment toward Rexford, leading to underperformance across most of the year. Mid-America experienced pricing pressure over supply concerns. Despite the company maintaining a strong balance sheet, we reduced our position over the course of the year.

Not owning Life Storage, a U.S. self storage REIT that was bought out for a premium above its pre-acquisition price, detracted from the Series’ relative performance.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Real Estate: The Series may be negatively affected by factors specific to the real estate market, including interest rates, leverage, property, and management.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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Duff & Phelps Real Estate Securities Series (Continued)

Industry/Sector Concentration: A Series that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated series.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be short- or long-term. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Industrial/Office	21%
Residential	20
Retail	15
Data Centers	13
Health Care	12
Self Storage	9
Gaming REITs	4
Other	6
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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Duff & Phelps Real Estate Securities Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	11.03 %	8.55%	7.95%
Class I shares at NAV²	11.31	8.84	8.22
FTSE Nareit Equity REITs Index	13.73	7.39	7.65
Series Expense Ratios³: Class A shares: Gross 1.18%, Net 1.10%; Class I shares: Gross 0.93%, Net 0.85%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. The performance of the other share class may be greater or less than that shown based on differences in inception dates, fees, and sales charges. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

10

Table of Contents

KAR Capital Growth Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Kayne Anderson Rudnick Investment Management, LLC

■	The Series is diversified and has an investment objective of long-term growth of capital. There is no guarantee that the Series will meet its objective.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 34.71%. For the same period, the Russell 1000^® Growth Index, which serves as the Series’ broad- based and style-specific benchmark appropriate for comparison, returned 42.68%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

The year 2023 proved to be an outstanding one for the capital markets. As we began 2023, investors were braced for an imminent recession, which never materialized. The S&P 500^® Index advanced 26.29%. Large-capitalization growth stocks, as measured by the Russell 1000^® Growth Index, were the best performers, gaining 42.68% for the year. Value stocks, as measured by the Russell 1000^® Value Index, lagged their growth peers, returning 11.46% for the year. The Magnificent Seven

(Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) were responsible for most of the outperformance by large growth stocks during 2023.

Market breadth started to improve in the fourth quarter of 2023, with the Russell 2000^® Index of small-capitalization stocks advancing 14.03% in the quarter and gaining 16.93% for the year. After a year of worry over interest rate increases, falling interest rates due to the continued improvement in the inflation outlook was the principal reason equities performed so well.

What factors affected the Series’ performance during its fiscal year?

The Series underperformed its benchmark, the Russell 1000^® Growth Index, for the fiscal year ended December 31, 2023. Poor stock selection and an overweight in financials, as well as poor stock selection in consumer discretionary, detracted from performance. Positive stock selection and an underweight in health care, as well as positive stock selection in industrials, contributed to performance.

The biggest contributors to performance during the period were NVIDIA, Amazon.com, Uber Technologies, Fair Isaac, and MongoDB.

The biggest detractors from performance during the period were Paycom Software, Estee Lauder, Bank of America, BILL, and Danaher.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Technology Sector Concentration: Because the Series is presently heavily weighted in the technology sector, it will be impacted by that sector’s performance more than a portfolio with broader sector diversification.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Information Technology	31%
Consumer Discretionary	20
Financials	12
Health Care	9
Industrials	9
Communication Services	8
Consumer Staples	4
Other	7
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

11

Table of Contents

KAR Capital Growth Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	34.71 %	15.19%	11.97%
Russell 1000^® Growth Index	42.68	19.50	14.86
Series Expense Ratios³: Class A shares: Gross 1.10%, Net 1.03%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

12

Table of Contents

KAR Equity Income Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Kayne Anderson Rudnick Investment Management, LLC

■	The Series is diversified and has investment objectives of capital appreciation and current income. There is no guarantee that the Series will meet its objectives.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 1.49%. For the same period, the MSCI USA High Dividend Yield Index (net), which serves as both the Series’ broad-based and style-specific index appropriate the comparison, returned 5.83%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

The year 2023 proved to be an outstanding one for the capital markets. As we began 2023, investors were braced for an imminent recession, which never materialized. The S&P 500^® Index advanced 26.29%. Large-capitalization growth stocks, as measured by the Russell 1000^® Growth Index, were the best performers, gaining 42.68% for the year. Value stocks, as measured by the Russell 1000^® Value Index, lagged their growth peers, returning 11.46% for the year. The Magnificent Seven

(Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) were responsible for most of the outperformance by large growth stocks during 2023.

Market breadth started to improve in the fourth quarter of 2023, with the Russell 2000^® Index of small-capitalization stocks advancing 14.03% in the quarter and gaining 16.93% for the year. After a year of worry over interest rate increases, falling interest rates due to the continued improvement in the inflation outlook was the principal reason equities performed so well.

What factors affected the Series’ performance during its fiscal year?

The Series underperformed its benchmark, the MSCI USA High Dividend Yield Index (net), for the fiscal year ended December 31, 2023. Poor stock selection and underweights in information technology and consumer discretionary detracted from performance. Positive stock selection and overweights in industrials and communication services contributed to performance.

The biggest contributors to performance during the period were Watsco, BAE Systems, IBM, MSC Industrial Direct, and Zurich Insurance.

The biggest detractors from performance during the period were Pfizer, Advance Auto Parts, AMCOR, Flowers Foods, and U.S. Bancorp.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Limited Number of Investments: Because the Series has a limited number of securities, it may be more susceptible to factors adversely affecting its securities than a series with a greater number of securities.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Financials	18%
Industrials	17
Health Care	14
Information Technology	10
Consumer Staples	9
Utilities	8
Materials	7
Other (includes securities lending collateral)	17
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

13

Table of Contents

KAR Equity Income Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	1.49 %	11.46%	7.25%
MSCI USA High Dividend Yield Index (net)	5.83	8.29	8.35
Series Expense Ratios³: Class A shares: Gross 1.13%, Net 0.98%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

14

Table of Contents

KAR Small-Cap Growth Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Kayne Anderson Rudnick Investment Management, LLC

■	The Series is diversified and has an investment objective of long-term capital growth. There is no guarantee that the Series will meet its objective.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 19.70% and Class I shares at NAV returned 19.99%. For the same period, the Russell 2000^® Growth Index, which serves as the Series’ broad-based and style-specific benchmark appropriate for comparison, returned 18.66%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

The year 2023 proved to be an outstanding one for the capital markets. As we began 2023, investors were braced for an imminent recession, which never materialized. The S&P 500^® Index advanced 26.29%. Large-capitalization growth stocks, as measured by the Russell 1000^® Growth Index, were the best performers, gaining 42.68% for the year. Value stocks, as measured by the Russell 1000^® Value Index, lagged their growth peers, returning 11.46% for the year. The Magnificent Seven (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) were responsible for most of the outperformance by large growth stocks during 2023.

Market breadth started to improve in the fourth quarter of 2023, with the Russell 2000^® Index of small-capitalization stocks advancing 14.03% in the

quarter and gaining 16.93% for the year. After a year of worry over interest rate increases, falling interest rates due to the continued improvement in the inflation outlook was the principal reason equities performed so well.

What factors affected the Series’ performance during its fiscal year?

The Series outperformed its benchmark, the Russell 2000^® Growth Index, for the fiscal year ended December 31, 2023. Positive stock selection in communication services and an underweight in health care contributed to performance. Poor stock selection in consumer discretionary, as well as poor stock selection and an underweight in consumer staples, detracted from performance.

The biggest contributors to performance during the period were Dream Finders Homes, Auto Trader, AAON, Morningstar, and Duck Creek Technologies.

The biggest detractors from performance during the period were Fox Factory, Revolve Group, BILL, Omega Flex, and ServisFirst Bancshares.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Foreign Investing: Investing in foreign securities subjects the Series to additional risks such as increased volatility, currency fluctuations ;less liquidity; less publicly available information about the foreign investment; and political, regulatory, economic, and market risk.

Limited Number of Investments: Because the Series has a limited number of securities, it may be more susceptible to factors adversely affecting its

securities than a series with a greater number of securities.

Sector Focused Investing: Events negatively affecting a particular industry or market sector in which the Series focuses its investments may cause the value of the Series to decrease.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be short- or long-term. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Financials	34%
Information Technology	26
Consumer Discretionary	15
Communication Services	12
Industrials	8
Health Care	4
Consumer Staples	1
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

15

Table of Contents

KAR Small-Cap Growth Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	19.70 %	11.70%	13.85%
Class I shares at NAV²	19.99	11.98	14.14
Russell 2000^® Growth Index	18.66	9.22	7.16
Series Expense Ratios³: Class A shares: Gross 1.27%, Net 1.14%; Class I shares: Gross 1.03%, Net 0.89%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. The performance of the other share class may be greater or less than that shown based on differences in inception dates, fees, and sales charges. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

16

Table of Contents

KAR Small-Cap Value Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Kayne Anderson Rudnick Investment Management, LLC

■	The Series is diversified and has an investment objective of long-term capital appreciation. There is no guarantee that the Series will meet its objective.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 19.05%. For the same period, the Russell 2000^® Value Index, which serves as the Series’ broad-based and style-specific benchmark appropriate for comparison, returned 14.65%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

The year 2023 proved to be an outstanding one for the capital markets. As we began 2023, investors were braced for an imminent recession, which never materialized. The S&P 500^® Index advanced 26.29%. Large-capitalization growth stocks, as measured by the Russell 1000^® Growth Index, were the best performers, gaining 42.68% for the year. Value stocks, as measured by the Russell 1000^® Value Index, lagged their growth peers, returning 11.46% for the year. The Magnificent Seven (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) were responsible for most of the outperformance by large growth stocks during 2023.

Market breadth started to improve in the fourth quarter of 2023, with the Russell 2000^® Index of small-capitalization stocks advancing 14.03% in the quarter and gaining 16.93% for the year. After a year

of worry over interest rate increases, falling interest rates due to the continued improvement in the inflation outlook was the principal reason equities performed so well.

What factors affected the Series’ performance during its fiscal year?

The Series outperformed its benchmark, the Russell 2000^® Value Index, for the fiscal year ended December 31, 2023. Positive stock selection and an overweight in industrials, as well as positive stock selection and an underweight in health care, contributed to performance. Poor stock selection in consumer discretionary, as well as poor stock selection and an underweight in information technology, detracted from performance.

The biggest contributors to performance during the period were Watsco, Thor Industries, Construction Partners, Houlihan Lokey, and Primerica.

The biggest detractors from performance during the period were Leslie’s, Stock Yards Bancorp, UniFirst, American Software, and Getty Realty.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Limited Number of Investments: Because the Series has a limited number of securities, it may be more susceptible to factors adversely affecting its securities than a series with a greater number of securities.

Sector Focused Investing: Events negatively affecting a particular industry or market sector in which the Series focuses its investments may cause the value of the Series to decrease.

Industrial Concentration: Because the Series is presently heavily weighted in the industrial sector, it will be impacted by that sector’s performance more than a series with broader sector diversification.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be short- or long-term. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Industrials	37%
Financials	26
Consumer Discretionary	15
Consumer Staples	7
Materials	6
Health Care	4
Information Technology	3
Other	2
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

17

Table of Contents

KAR Small-Cap Value Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	19.05 %	11.80%	8.42%
Russell 2000^® Value Index	14.65	10.00	6.76
Series Expense Ratios³: Class A shares: Gross 1.34%, Net 1.10%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

18

Table of Contents

Newfleet Multi-Sector Intermediate Bond Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Newfleet Asset Management

■	The Series is diversified and has an investment objective of long-term total return. There is no guarantee that the Series will meet its objective.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 8.69% and Class I shares at NAV returned 8.93%. For the same period, the Bloomberg U.S. Aggregate Bond Index, which serves as the broad-based and style-specific benchmark index appropriate for comparison, returned 5.53%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

Few economists or strategists anticipated that 2023 would play out the way it did in financial markets. While economies slowed around the globe and geopolitical events remained top of mind, central bankers appeared close to declaring victory over the inflation that had ravaged the landscape since the COVID-19 pandemic. The U.S., in particular, defied expectations for an economic slowdown and a more meaningful increase in the unemployment rate following 11 increases in the Federal funds rate for a total of 5.25% since March of 2022. By year-end, the consensus was that the Federal Reserve (the Fed) had pulled off an elusive “soft landing” for the U.S. economy. As this consensus grew, financial markets responded in kind with rallies in risk assets as well as risk-free rates, such as U.S. Treasuries. Fed fund futures were pricing in the peak in interest rates for this cycle, however, we remained cautious at year-end, given that the impact of monetary policy typically acts on the economy with variable lags and in unpredictable ways.

During the 12-month period, there was significant progress on headline inflation readings as supply chains healed, demand shifted from goods to services, and energy prices rebalanced. Core readings of inflation, while still stubbornly above targets at the end of 2023, were annualizing toward levels that were consistent with central bank goals. With markets pricing in a peak in rates and even cuts across most major global central banks, investors anticipated that 2024 could deliver the first interest rate cuts from policymakers across developed markets. Toward year end, the Fed’s latest summary of economic projections showed meaningful deviation from market expectations for the timing and magnitude of future rate cuts.

The U.S. Treasury yield curve flattened in 2023 as expectations built for the U.S. to avoid recession and Fed to begin easing monetary policy, with a majority of that flattening occurring late in the year. The 2-year Treasury yield decreased 0.18%, the 5-year Treasury yield decreased by 0.16%, the 10-year Treasury yield was unchanged, and the 30-year Treasury yield moved 0.06% higher.

What factors affected the Series’ performance during its fiscal year?

The Series outperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index, for the 12 months ended December 31, 2023.

The Series’ underweight to U.S. Treasuries contributed to performance during the period. Allocation to and selection within investment grade corporate bonds, as well as allocations to corporate high yield bonds and bank loans, had a positive impact on performance.

The Series’ duration, or sensitivity to changes in interest rates, and yield curve positioning within U.S. Treasuries and yankee high quality securities detracted from performance. The allocation to asset-backed securities detracted from performance, however, issue selection within the sector had a positive impact on performance during the 12-month period.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee

of future results, and there is no guarantee that market forecasts will be realized.

Credit & Interest: Debt instruments are subject to various risks, including credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

High Yield Fixed Income Securities: There is a greater risk of issuer default, less liquidity, and increased price volatility related to high yield securities than investment grade securities.

Bank Loans: Bank loans may be unsecured or not fully collateralized, may be subject to restrictions on resale, may be less liquid and may trade infrequently on the secondary market. Bank loans settle on a delayed basis; thus, sale proceeds may not be available to meet redemptions for a substantial period of time after the sale of the loan.

Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the Series to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk.

ABS/MBS: Changes in interest rates can cause both extension and prepayment risks for asset- and mortgage-backed securities. These securities are also subject to risks associated with the non-repayment of underlying collateral, including losses to the Series.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the Series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Prospectus: For additional information on risks, please see the Series’ prospectus.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

19

Table of Contents

Newfleet Multi-Sector Intermediate Bond Series (Continued)

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Corporate Bonds and Notes		42%
Financials	14%
Energy	7
Health Care	3
All other Corporate Bonds and Notes	18
Mortgage-Backed Securities		21
Asset-Backed Securities		16
Leveraged Loans		10
Foreign Government Securities		5
U.S. Government Securities		3
Other (includes securities lending collateral)		3
Total		100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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Newfleet Multi-Sector Intermediate Bond Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	8.69 %	3.19%	2.94%
Class I shares at NAV²	8.93	3.44	3.19
Bloomberg U.S. Aggregate Bond Index	5.53	1.10	1.81
Series Expense Ratios³: Class A shares: Gross 0.95%, Net 0.94%; Class I shares: Gross 0.70%, Net 0.69%

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. The performance of the other share class may be greater or less than that shown based on differences in inception dates, fees, and sales charges. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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SGA International Growth Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Sustainable Growth Advisers, LP

■	The Series is diversified and has an investment objective of high total return consistent with reasonable risk. There is no guarantee that the Series will meet its objective.
■	For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 18.00% † and Class I shares at NAV returned 18.24%†. For the same period, the MSCI All Country World ex USA Index (net), which serves as the Series’ broad-based and style-specific benchmark appropriate for comparison, returned 15.62%.

† See footnote 3 on page 24.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

Rising investor appetites for risk amid signs of moderating inflation, expectations for central bank pivots in the U.S. and Europe, and solid growth in emerging markets outside of China supported a broad-based rally in international markets to finish 2023. Long-duration assets, or those that are more sensitive to changes in interest rates, rallied amid the decline in bond yields. This led to better performance for growth stocks in the fourth quarter, although it was not enough to overcome their significant underperformance in the third quarter, which resulted in growth stocks underperforming the MSCI All Country World ex USA Index (net) for the year.

Despite rising optimism, the economic growth backdrop was muted in Europe as weak consumption and business spending weighed on economic activity. In contrast, growth came in better than expected in Mexico and Brazil, where falling inflation supported expectations for interest rate cuts. Despite

better-than-expected third-quarter gross domestic product (GDP) growth in China, investor sentiment toward Chinese stocks remained weak during the year as concerns about the health of China’s property market and economic recovery, as well as geopolitical tensions, continued to linger. Indian equities performed well on the back of strong economic growth and optimism around future growth prospects given the country’s favorable demographics, stable democracy, and growing middle class.

Emerging markets lagged developed markets for the year despite strong performance in Latin American stocks. Although all sectors posted positive returns in 2023, information technology, industrials, and financials were the only sectors to outperform the MSCI All Country World ex USA Index (net) in 2023, while the consumer staples, real estate, and communication services sectors delivered the lowest returns.

What factors affected the Series’ performance during its fiscal year?

The Series outperformed its benchmark, the MSCI All Country World ex USA Index (net), for the 12 months ended December 31, 2023. Stock selection contributed positively to relative performance, while sector allocation, a residual effect of our bottom-up investment process, detracted. Selection was strongest in the consumer staples, materials, and health care sectors, while selection in financials detracted from relative performance. Overweight exposures to the consumer staples and health care sectors partially offset the benefit from stock selection. From a regional perspective, stock selection in developed market stocks benefited performance most, while an underweight exposure to non-U.S. developed markets detracted.

The top five contributors to Series performance for the 12-month period were FEMSA, Novo Nordisk, Temenos, Atlassian, and L’Oréal. The five largest detractors from Series performance for the period were Shandong Weigao, AIA Group, Yum China, Diageo, and CP ALL.

The preceding information is the opinion of portfolio management only through the end of the period stated on the cover. Any such opinions are subject to change at any time based upon market or other conditions and should not be relied upon as investment advice. Past performance is no guarantee

of future results, and there is no guarantee that market forecasts will be realized.

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, medium, or large-sized companies may enhance that risk.

Foreign & Emerging Markets: Investing in foreign securities, especially in emerging markets, subjects the Series to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk.

Market Volatility: The value of the securities in the Series may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the Series, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended.

Limited Number of Investments: Because the Series has a limited number of securities, it may be more susceptible to factors adversely affecting its securities than a series with a greater number of securities.

Industrial Concentration: Because the Series is presently heavily weighted in the industrial sector, it will be impacted by that sector’s performance more than a series with broader sector diversification.

ESG: The Series’ consideration of ESG factors could cause the Series to perform differently from other series. While the subadviser believes that the integration of ESG factors into the Series’ investment process has the potential to contribute to performance, ESG factors may not be considered for every investment decision and there is no guarantee that the integration of ESG factors will result in better performance.

Currency Rate: Fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect the value of the Series’ shares.

Depositary Receipts: Investments in foreign companies through depositary receipts may expose the Series to the same risks as direct investments in securities of foreign issuers.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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SGA International Growth Series (Continued)

Prospectus: For additional information on risks, please see the Series’ prospectus.

Asset Allocation

The following table presents asset allocation within certain sectors as a percentage of total investments as of December 31, 2023.

Health Care	23%
Consumer Staples	22
Financials	16
Information Technology	15
Industrials	9
Materials	7
Consumer Discretionary	4
Other (includes securities lending collateral)	4
Total	100%

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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SGA International Growth Series (Continued)

Average Annual Total Returns¹for periods ended 12/31/23

	1 Year	5 Years	10 Years
Class A shares at NAV²	18.00 % ³	8.80%	2.23%
Class I shares at NAV²	18.24 ³	9.07	2.48
MSCI All Country World ex USA Index (net)	15.62	7.08	3.83
Series Expense Ratios⁴: Class A shares: Gross 1.18%, Net 1.14%; Class I shares: Gross 0.93%, Net 0.89%.

All returns represent past performance which is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
The above table and graph below do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. Please visit Virtus.com for performance data current to the most recent month-end.

Growth of $10,000 for periods ended 12/31

This chart assumes an initial investment of $10,000 made on December 31, 2013, for Class A shares. The performance of the other share class may be greater or less than that shown based on differences in inception dates, fees, and sales charges. Returns shown include the reinvestment of all distributions at net asset value, and the change in share price for the stated period.

¹	Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gain distributions.
²	“NAV” (Net Asset Value) total returns do not reflect any fees or expenses associated with the separate insurance products.
³	Total Return for the report period presented in the table differs from the return in the Financial Highlights. The total return presented in the above table is calculated based on the NAV at which shareholder transactions were processed. The total return presented in the Financial Highlights section of the report is calculated in the same manner, but also takes into account certain adjustments that are necessary under generally accepted accounting principles required in the annual report and semiannual report.
⁴	The expense ratios of the Series are set forth according to the prospectus for the Series effective April 28, 2023, as supplemented and revised, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. See the Financial Highlights for more current expense ratios. Net Expense: Expenses reduced by a contractual expense limitation in effect through April 30, 2024. Gross Expense: Does not reflect the effect of the expense limitation. Expense ratios include fees and expenses associated with any underlying funds.

The index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

24

Table of Contents

Strategic Allocation Series

Series Summary (Unaudited)

Portfolio Manager Commentary by
Kayne Anderson Rudnick Investment Management, LLC (Domestic and International Equity Portfolio) and Newfleet Asset Management (Fixed Income Portfolio)

■

The Series is diversified and has an investment objective of high total return over an extended period of time consistent with prudent investment risk. There is no guarantee that the Series will meet its objective.

■

For the fiscal year ended December 31, 2023, the Series’ Class A shares at NAV returned 22.22%. For the same period, the Bloomberg U.S. Aggregate Bond Index, a broad-based fixed income index, returned 5.53%; MSCI All Country World ex USA Small Mid Cap Index (net) broad-based international index, returned 15.79%; and Russell 1000^® Growth Index, a broad-based U.S. equity index, returned 42.68%. The Strategic Allocation Series Linked Benchmark, the Series’ style-specific benchmark, returned 22.87%.

All performance figures assume reinvestment of distributions and exclude the effect of fees and expenses associated with the variable life insurance or annuity product through which you invest. Performance data quoted represents past results. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown above. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit Virtus.com for performance data current to the most recent month-end.

How did the markets perform during the Series’ fiscal year ended December 31, 2023?

Equities

The year 2023 proved to be an outstanding one for the capital markets. As we began 2023, investors were braced for an imminent recession, which never materialized. The S&P 500^® Index advanced 26.29%. Large-capitalization growth stocks, as measured by the Russell 1000^® Growth Index, were the best performers, gaining 42.68% for the year. Value stocks, as measured by the Russell 1000^® Value Index, lagged their growth peers, returning 11.46% for the year. The Magnificent Seven

(Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) were responsible for most of the outperformance by large growth stocks during 2023.

Market breadth started to improve in the fourth quarter of 2023, with the Russell 2000^® Index of small-capitalization stocks advancing 14.03% in the quarter and gaining 16.93% for the year. International and emerging markets stocks continued to lag U.S. markets. The MSCI EAFE^® Index (net) advanced 18.24% while the MSCI Emerging Markets Index (net) increased 9.83% for the year. After a year of worry over interest rate increases, falling interest rates due to the continued improvement in the inflation outlook was the principal reason equities performed so well.

Fixed Income

Few economists or strategists anticipated that 2023 would play out the way it did in financial markets. While economies slowed around the globe and geopolitical events remained top of mind, central bankers appeared close to declaring victory over the inflation that had ravaged the landscape since the COVID-19 pandemic. The U.S., in particular, defied expectations for an economic slowdown and a more meaningful increase in the unemployment rate following 11 increases in the Federal funds rate for a total of 5.25% since March of 2022. By year-end, the consensus was that the Federal Reserve (the Fed) had pulled off an elusive “soft landing” for the U.S. economy. As this consensus grew, financial markets responded in kind with rallies in risk assets as well as risk-free rates, such as U.S. Treasuries. Fed fund futures were pricing in the peak in interest rates for this cycle, however, we remained cautious at year-end, given that the impact of monetary policy typically acts on the economy with variable lags and in unpredictable ways.

During the 12-month period, there was significant progress on headline inflation readings as supply chains healed, demand shifted from goods to services, and energy prices rebalanced. Core readings of inflation, while still stubbornly above targets at the end of 2023, were annualizing toward levels that were consistent with central bank goals. With markets pricing in a peak in rates and even cuts across most major global central banks, investors anticipated that 2024 could deliver the first interest rate cuts from policymakers across developed

markets. Toward year end, the Fed’s latest summary of economic projections showed meaningful deviation from market expectations for the timing and magnitude of future rate cuts.

The U.S. Treasury yield curve flattened in 2023 as expectations built for the U.S. to avoid recession and Fed to begin easing monetary policy, with a majority of that flattening occurring late in the year. The 2-year Treasury yield decreased 0.18%, the 5-year Treasury yield decreased by 0.16%, the 10-year Treasury yield was unchanged, and the 30-year Treasury yield moved 0.06% higher.

What factors affected the Series’ performance during its fiscal year?

U.S. Equities

The U.S. equity portfolio of the Series underperformed its benchmark, the Russell 1000^® Growth Index, for the fiscal year ended December 31, 2023. Poor stock selection and an overweight in financials, as well as poor stock selection in consumer discretionary, detracted from performance. Positive stock selection and an underweight in health care, as well as positive stock selection in industrials, contributed to performance.

The biggest contributors to performance during the period were NVIDIA, Amazon.com, Uber Technologies, Fair Isaac, and Mongo DB.

The biggest detractors from performance during the period were Paycom Software, Estee Lauder, BILL, Bank of America, and Danaher.

International Equities

The international equity portfolio of the Series outperformed its benchmark, the MSCI ACWI ex USA SMID Cap Index (net), for the fiscal year ended December 31, 2023. Positive stock selection in communication services, as well as positive stock selection and an underweight in materials, contributed to performance. Poor stock selection in information technology and industrials detracted from performance. From a geographic perspective, positive stock selection in Europe ex. U.K., as well as positive stock selection and an overweight in the U.K., contributed to performance. A lack of exposure to strongly performing markets in India and Taiwan during the period detracted from performance.

For information regarding the indexes and certain investment terms, see the Key Investment Terms starting on page 4.

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Strategic Allocation Series (Continued)

The biggest contributors to performance during the period were Baltic Classifieds, Auto Trader, Mortgage Advice Bureau, Howden Joinery, and Corporacion Moctezuma.

The biggest detractors from performance during the period were New Work, FDM Group, Dayamitra Telekomunikasi, Mercari, and Enento Group.

Fixed Income

The fixed income portfolio’s underweight to U.S. Treasuries contributed to performance during the period. Allocation to and selection within investment grade corporate bonds, as well as allocations to corporate high yield bonds and bank loans, had a positive impact on performance.

The portfolio’s duration, or sensitivity to changes in interest rates, and yield curve positioning within U.S. Treasuries detracted from performance. The allocation to municipal bonds detracted from performance, however, issue selection within the sector had a positive impact on performance during the 12-month period.