PRE 14A 1 d938649dpre14a.htm PRE 14A PRE 14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

 

 

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☐    Definitive Proxy Statement
☐    Definitive Additional Materials
☐    Soliciting Materials Pursuant to §240.14a-12

Allianz Funds

Allianz Funds Multi-Strategy Trust

1633 Broadway

New York, New York 10019

 

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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ALLIANZ FUNDS

ALLIANZ FUNDS MULTI-STRATEGY TRUST

1633 Broadway, New York, New York 10019

For proxy information, please call [phone number]

For account information, please call:

1-800-498-5413 (Institutional Class, Class R6, Class P and Administrative Class)

1-800-988-8380 (Class A, Class C and Class R Shares)

Dear Shareholder:

On behalf of the Board of Trustees (the “Board”) of each of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts”), we are pleased to invite you to a combined special meeting of the Shareholders of the Trusts scheduled for [10:00] a.m., Eastern time, on [October 28], 2020, to be held via [live audio webcast at [website]], for purposes of approving a series of changes to the Trusts that will allow a transition (the “Transition”) to a new management structure in line with the recently announced strategic partnership between AllianzGI U.S., the manager of the Trusts, and Virtus Investment Advisers, Inc. (“Virtus”).

On July 7, 2020, AllianzGI U.S. announced that it had agreed to a strategic partnership with Virtus Investment Partners, Inc., which operates a multi-boutique asset management business. Central to the strategic partnership, Virtus will become investment adviser to certain of AllianzGI U.S.’s retail open- and closed-end funds (the “Funds”), as well as the named investment adviser to AllianzGI U.S.’s retail separate account clients, while AllianzGI U.S. assumes the role of sub-adviser to these client assets. As part of the strategic partnership, affiliates of Virtus will become distributor, administrator and transfer agent of the Funds.

The target closing date of the Transition is December 31, 2020 (the “Closing”). Under the strategic partnership, Virtus will become the investment adviser of all series of the Trusts not liquidating prior to the Closing (the “Continuing Funds”), the governance of the Trusts is expected to be more closely aligned with other Virtus-sponsored funds, and the same AllianzGI U.S. portfolio management teams will continue to manage their series of the Trusts in a sub-advisory capacity. AllianzGI U.S.’s portfolio managers will continue to manage the Continuing Funds’ investment strategies in a subadvisory capacity either in their current roles as employees or associated persons of AllianzGI U.S. (the “AllianzGI-Subadvised Continuing Funds”) or, in the case of AllianzGI U.S.’s Dallas-based Value Equity U.S. team, as employees of NFJ Investment Group, LLC (the “Virtus Value Equity Subadviser”), a newly formed Virtus affiliated registered investment adviser (the “Value Equity Continuing Funds”). As investment adviser, Virtus would be responsible for overseeing AllianzGI U.S., including the portfolio management teams of each Fund. The specific matters on which you will be asked to vote, all of which are discussed in more detail in the accompanying Proxy Statement (the “Proposals”), are as follows:

 

  1.

Approval of the election of thirteen (13) Trustees by Shareholders of each Trust. Three (3) nominees are currently Trustees of one or more of the Trusts;

 

  2.

Approval of a new Investment Advisory Agreement with Virtus by Shareholders of the Continuing Funds;

 

  3A.

Approval of a new Subadvisory Agreement with AllianzGI U.S. by Shareholders of the AllianzGI-Subadvised Continuing Funds;

  3B.

Approval of a new Subadvisory Agreement with the Virtus Value Equity Subadviser by Shareholders of the Value Equity Continuing Funds;

 

  4.

Approval authorizing Virtus to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Continuing Funds without shareholder approval, and to permit the Continuing Funds to disclose advisory and subadvisory fee information in an aggregated manner;

 

  5.

Approval of a change in the classification of AllianzGI Focused Growth Fund from a “diversified” fund to a “non-diversified” fund by Shareholders of the Fund; and

 

  6.

The transaction of such other business as may properly come before the Meeting and any adjournment(s) or postponement(s) thereof.

The Board of each Trust, including trustees whom are not “interested persons” (within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended) of the Fund or of AllianzGI U.S. (the “Independent Trustees”), are asking you to approve significant changes for the Funds. If approved by Shareholders, Virtus will become investment adviser and other subsidiaries of its parent company, Virtus Investment Partners, Inc., will become distributor, administrator and transfer agent of the Continuing Funds. AllianzGI U.S.’s portfolio managers will continue to manage the Continuing Funds’ investment strategies in a subadvisory capacity as described above, providing continuity for Shareholders, subject to Virtus’ oversight as investment adviser. Investment management/advisory fees for the Continuing Funds will also remain the same upon Closing, and the Continuing Funds will have expense limitation arrangements in place to ensure that their net total expenses are no higher than they are immediately before the new arrangements go into effect. The strategic partnership between AllianzGI U.S. and Virtus is complementary in nature. The Funds will benefit from Virtus’ and its affiliates’ high quality of fund services and oversight, and increased economies of scale, and will be well-positioned for further growth, while continuing to receive the same day-to-day portfolio management services of the investment teams that currently manage the Funds, but with the oversight of Virtus as investment adviser.

Your vote is important

After considering the Proposals, each Trust’s Board unanimously voted to approve the Proposals for the Trusts and to recommend that the Shareholders of the Trusts vote in favor of the Proposals, as more fully described in the accompanying Proxy Statement. Additionally, after considering Proposal 1, the Governance and Nominating Committee of the Board of each of Allianz Funds and MST unanimously nominated each of the proposed candidates for election and your Board unanimously voted to recommend that Shareholders of the Trust and each of its series vote in favor of the Trustee nominees, as more fully described in the accompanying Proxy Statement.

No matter how many shares you own, your timely vote is important. If you are not available to attend the meeting, then please promptly give your voting instructions by telephone or via the internet by following the enclosed instructions or you may vote by completing, signing, dating and returning the proxy card in order to avoid the added cost of follow-up solicitations. If you vote by telephone or via the internet, you will be asked to enter a unique code that has been assigned to you, which is printed on your proxy card. This code is designed to confirm your identity, provide access to the voting site and confirm that your instructions are properly recorded. If you have any questions regarding the Proxy Statement, please call Broadridge Financial Solutions, Inc. at [proxy phone number].

Thank you in advance for your participation in this important vote.

Sincerely,

Angela Borreggine

Secretary and Chief Legal Officer

New York, New York

[    ], 2020

In light of uncertainties relating to COVID-19, the Trusts reserve the flexibility to change the date, time, location or means of conducting the Meeting. In the event of such a change, the Trusts will issue a press release announcing the change and file the announcement on the SEC’s EDGAR system, among other steps, but may not deliver additional soliciting materials to Shareholders or otherwise amend the Trusts’ proxy materials. Although no decision has been made, the Trusts may consider imposing additional procedures or limitations on Meeting attendees, subject to any restrictions imposed by applicable law. The Trusts plan to announce these changes, if any, at http://[                 ], and encourage you to check this website prior to the Meeting.

 

ALLIANZ FUNDS

ALLIANZ FUNDS MULTI-STRATEGY TRUST

1633 Broadway, New York, NY 10019

[Online Virtual Meeting Only—No Physical Meeting Location

[website]]

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

To the Shareholders:

Notice is hereby given that a combined Special Meeting of Shareholders (the “Meeting”) of the series of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts,” and each series thereof a “Fund” and together, the “Funds”) scheduled for [10:00] a.m. Eastern time on [October 28, 2020], to be held [via live audio webcast at [website]].

Shareholders of all of the series of Allianz Funds and of MST as of the Record Date will be required to vote on the election of Trustees (proposal 1 below). Prior to the effectiveness of any of the changes reflected in the proposals to be voted on at the Meeting, the Trustees have already taken action to effect the liquidation and termination of several series of MST. With respect to all other proposals included in the Proxy Statement, only Shareholders of series of Allianz Funds and MST Funds that will be continuing in operation after consummation of the proposed management transition from Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) to Virtus Investment Advisers, Inc. (“Virtus”) (the “Transition”) will be asked to vote, in each case voting solely with respect to that Fund.

The series of Allianz Funds listed below are expected to continue to operate following the Transition. They are referred to collectively as the “AF Continuing Funds”, and are divided between the “AllianzGI-Subadvised AF Continuing Funds” and the “Value Equity AF Continuing Funds”:

AllianzGI-Subadvised AF Continuing Funds

AllianzGI Emerging Markets Opportunities Fund

AllianzGI Focused Growth Fund

AllianzGI Global Small-Cap Fund

AllianzGI Health Sciences Fund

AllianzGI Income & Growth Fund

AllianzGI Mid-Cap Fund

AllianzGI Small-Cap Fund

AllianzGI Technology Fund

Value Equity AF Continuing Funds

AllianzGI Dividend Value Fund

AllianzGI International Value Fund

AllianzGI Large-Cap Value Fund

AllianzGI Mid-Cap Value Fund

AllianzGI Small-Cap Value Fund

The series of MST listed below are expected to continue to operate following the Transition. They are referred to collectively as the “MST Continuing Funds”, and are divided between the “AllianzGI-Subadvised MST Continuing Funds” and the “Value Equity MST Continuing Funds”:

AllianzGI-Subadvised MST Continuing Funds

AllianzGI Convertible Fund

AllianzGI Core Plus Bond Fund

AllianzGI Emerging Markets Consumer Fund

AllianzGI Global Allocation Fund

AllianzGI Global Dynamic Allocation Fund

AllianzGI Global Sustainability Fund

AllianzGI High Yield Bond Fund

AllianzGI International Small-Cap Fund

AllianzGI Preferred Securities and Income Fund

AllianzGI Short Duration High Income Fund

AllianzGI Water Fund

Value Equity MST Continuing Funds

AllianzGI Emerging Markets Value Fund

All AllianzGI-Subadvised AF Continuing Funds and AllianzGI-Subadvised MST Continuing Funds are referred to collectively as “AllianzGI-Subadvised Continuing Funds.” All Value Equity AF Continuing Funds and Value Equity MST Continuing Funds are referred to collectively as “Value Equity Continuing Funds.” All current series of MST not listed above are referred to as “MST Liquidating Funds.”

As described in the Proxy Statement, the Meeting has been called for the following purposes:

1. To be voted on by all Shareholders of each Trust (including Shareholders of each Fund), voting separately by each such Trust: to elect Trustees of the Trusts, as described in Section I of the attached Proxy Statement;

2. To be voted on by all Shareholders of each of the AF Continuing Funds and MST Continuing Funds, voting separately by each such Fund: To approve a new Investment Advisory Agreement between each Trust and Virtus, as described in Section II of the attached Proxy Statement;

3A. To be voted on by all Shareholders of each of the AllianzGI-Subadvised Continuing Funds and AllianzGI-Subadvised MST Continuing Funds, voting separately by each such Fund: To approve a new Subadvisory Agreement by and among each Trust, Virtus and AllianzGI U.S., as described in Section III.A of the attached Proxy Statement;

3B. To be voted on by all Shareholders of each of the Value Equity AF Continuing Funds and the Value Equity MST Continuing Funds, voting separately by each such Fund: To approve a new Subadvisory Agreement by and among each Trust, Virtus and the Virtus Value Equity Subadviser, as described in Section III.B of the attached Proxy Statement;

4. To be voted on by all Shareholders of each Continuing Fund, voting separately by each such Fund: To approve a proposal authorizing Virtus to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Continuing Funds without shareholder approval, and to permit the Continuing Funds to disclose advisory and subadvisory fee information in an aggregated manner, as described in Section V of the attached Proxy Statement;

5. To be voted on by all Shareholders of AllianzGI Focused Growth Fund (the “Focused Growth Fund”), a series of Allianz Funds: To approve a change in the classification of AllianzGI Focused Growth Fund from a “diversified” fund to a “non-diversified” fund, as such terms are defined in the Investment Company Act of 1940, as amended, as described in Section VI of the attached Proxy Statement; and

6. To consider and act upon such other matters as may properly come before the Meeting and any adjourned or postponed session thereof.

The Board of Trustees of each Trust unanimously recommends that you vote FOR the Proposals specified above.

Proposals 1 through 4 are each contingent on sufficient Shareholder support for AllianzGI U.S. and Virtus to proceed with the Closing of the Transition. No changes to the Trustees of the Trusts would be made if the Closing does not occur. With respect to each individual Fund, the Proposals for the approval of contracts (items #2 and #3 in the summary list above) are contingent on one another. Additionally, no approved contracts will be executed to terminate the current management/advisory arrangements until sufficient approvals are received to prompt the Closing of the Transition. This is because the proposed Transition relates to a new constellation of management and distribution arrangements under the structure currently in place through Virtus. Furthermore, if the Shareholders of some Funds do not approve these Proposals, but AllianzGI U.S. and Virtus proceed to Closing, AllianzGI U.S. will continue to be contractually obligated to act as investment adviser and provide services under the existing arrangements and the Trustees will take such further action as they may deem to be in the best interests of the Shareholders of the relevant Funds for which the votes failed, with one possible outcome being the liquidation and termination of those Funds.

The Boards of Trustees of the Trusts have fixed the close of business on [September 10], 2020 as the record date for the determination of Shareholders entitled to notice of, and to vote at, the Meeting or any adjournment or postponement thereof. With respect to each Trust, the proxy is being solicited on behalf of the Board of Trustees of such Trust.

 

By order of the Boards of Trustees
Angela Borreggine
Secretary and Chief Legal Officer

New York, New York

[    ], 2020

YOUR VOTE IS IMPORTANT

It is important that your shares be represented at the Meeting by virtual presence or by proxy, no matter how many shares you own. If you do not expect to attend the Meeting, then please give your voting instructions by internet, by touch-tone telephone, or by marking, dating and signing the enclosed proxy card and returning it in the prepaid envelope enclosed for your convenience to ensure that your shares are represented. Please give your voting instructions or submit your proxy card promptly in order to avoid any additional costs of further proxy solicitations and in order for the Meeting to be held as scheduled.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON [OCTOBER 28], 2020

Shareholders can find important information about each Fund of Allianz Funds in its annual report, dated June 30, 2020, including financial reports for the fiscal year ended June 30, 2020, and in such Fund’s semi-annual report, dated December 31, 2019. Shareholders can find important information about each Fund of MST in such Fund’s annual report, dated September 30, 2019, including financial reports for the fiscal year ended September 30, 2019, and in such Fund’s semi-annual report, dated March 31, 2020. Upon request and without charge, the Trusts will furnish each person to whom the Proxy Statement is delivered with a copy of these reports. You may obtain copies of these reports without charge by calling 1-800-498-5413 (for Institutional Class, Class R6, Class P and Administrative Class Shares) or 1-800-988-8380 (for Class A, Class C and Class R Shares), by writing to the Trust at the address appearing above or on the Funds’ website at us.allianzgi.com.

 

PROXY STATEMENT

FOR THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

The Notice of the Meeting, this Proxy Statement and the proxy card are being made available to Shareholders of record as of [September 10], 2020 (the “Record Date”) beginning on or about [September 11], 2020.

 

 

ALLIANZ FUNDS

1633 Broadway, New York, NY 10019

 

AllianzGI Dividend Value Fund

    AllianzGI International Value Fund

AllianzGI Emerging Markets Opportunities Fund

    AllianzGI Large-Cap Value Fund

AllianzGI Focused Growth Fund

    AllianzGI Mid-Cap Value Fund

AllianzGI Global Small-Cap Fund

    AllianzGI Small-Cap Value Fund

AllianzGI Health Sciences Fund

    AllianzGI Small-Cap Fund

AllianzGI Income & Growth Fund

    AllianzGI Technology Fund

AllianzGI Mid-Cap Fund

   

ALLIANZ FUNDS MULTI-STRATEGY TRUST

1633 Broadway, New York, NY 10019

 

AllianzGI Best Styles Global Equity Fund

    AllianzGI Retirement 2025 Fund

AllianzGI Best Styles U.S. Equity Fund

    AllianzGI Retirement 2030 Fund

AllianzGI Convertible Fund

    AllianzGI Retirement 2035 Fund

AllianzGI Core Bond Fund

    AllianzGI Retirement 2040 Fund

AllianzGI Core Plus Bond Fund

    AllianzGI Retirement 2045 Fund

AllianzGI Emerging Markets Consumer Fund

    AllianzGI Retirement 2050 Fund

AllianzGI Emerging Markets Small-Cap Fund

    AllianzGI Retirement 2055 Fund

AllianzGI Emerging Markets SRI Debt Fund

    AllianzGI PerformanceFee Managed Futures Strategy Fund

AllianzGI Emerging Markets Value Fund

    AllianzGI PerformanceFee Structured US Equity Fund

AllianzGI Floating Rate Noted Fund

    AllianzGI Preferred Securities and Income Fund

AllianzGI Global Allocation Fund

    AllianzGI Short Duration High Income Fund

AllianzGI Global Dynamic Allocation Fund

    AllianzGI Short Term Bond Fund

AllianzGI Global Sustainability Fund

    AllianzGI Structured Return Fund

AllianzGI Green Bond Fund

    AllianzGI Water Fund

AllianzGI High Yield Bond Fund

   

AllianzGI International Small-Cap Fund

   

AllianzGI Multi-Asset Income Fund

   

AllianzGI Retirement 2020 Fund

   

The series of Allianz Funds listed above are expected to continue to operate following the proposed management transition from Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) to Virtus Investment Advisers, Inc. (“Virtus”) (the “Transition”). They are referred to collectively as the “AF Continuing Funds.” Prior to the effectiveness of any of the changes reflected in the proposals to be voted on at the Meeting, the Trustees have already taken action to effect the liquidation and termination of several series of the Allianz Funds

 

1

Multi-Strategy Trust (“MST”). The series of MST expected to continue to operate following the Transition include AllianzGI Convertible Fund, AllianzGI Core Plus Bond Fund, AllianzGI Emerging Markets Consumer Fund, AllianzGI Emerging Markets Value Fund, AllianzGI Global Allocation Fund, AllianzGI Global Dynamic Allocation Fund, AllianzGI Global Sustainability Fund, AllianzGI High Yield Bond Fund, AllianzGI International Small-Cap Fund, AllianzGI Preferred Securities and Income Fund, AllianzGI Short Duration High Income Fund and AllianzGI Water Fund (collectively, the “MST Continuing Funds” and together with the AF Continuing Funds, the “Continuing Funds”). Upon Closing of the Transition, it is also expected that the naming convention of the Continuing Funds will change. “Virtus” will be inserted before the current name of each of the AllianzGI-Subadvised Continuing Funds (as defined herein) and “Virtus NFJ” will replace “AllianzGI” in the current name of each of the Value Equity Continuing Funds (as defined herein).

INTRODUCTION

The Board of Trustees (each a “Board” or “Trustees”) of each of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST” and together with Allianz Funds, the “Trusts”), is soliciting proxies from the Shareholders of each series of each Trust listed above (each, a “Fund” and together, the “Funds”) in connection with a special meeting (the “Meeting”) of Shareholders of the Funds to be at [10:00] a.m., Eastern time, on [October 28, 2020] [via live audio webcast at [ ]].

The Boards have considered an arrangement pursuant to which: (i) Virtus Investment Advisers, Inc. (“Virtus”) will serve as the new investment adviser to the Continuing Funds, (ii) AllianzGI U.S. and the Virtus Value Equity Subadviser will serve as subadvisers to the Continuing Funds, and (iii) ten (10) new Trustees will take office for each of MST and Allianz Funds to serve with three of the current Trustees. Virtus offers comprehensive services and greater scale in the U.S. mutual fund business, leverage and negotiating power with service providers. As part of the Transition, affiliates of Virtus will become distributor, administrator and transfer agent for the Funds. The Funds will benefit from Virtus’s and its affiliates’ high quality of fund services and oversight, increased economies of scale, and will be well-positioned for further growth. Investment management/advisory fees for the Continuing Funds will be maintained at current levels, net total expenses will be capped at current levels, and no changes to the investment teams, investment strategies or investment processes will occur as a result of the Transition.

Shareholders are NOT being asked to vote on the Transition. Rather, as described below, Shareholders are being asked to vote on certain proposals that are being presented to them as a result of the Transition. It is anticipated that the Transition will be completed prior to December 31, 2020 (the “Closing”). If approved, each of the new investment advisory agreements and subadvisory agreements will go into effect as of the Closing. Proposals #1 through #4 are each contingent on sufficient Shareholder support for AllianzGI U.S. and Virtus to proceed with the Closing of the Transition, and similarly approval of the changes to the Trusts’ Boards of Trustees are contingent on the approval of contracts. No changes to the Trustees of the Trusts would be made if shareholders do not approve the contracts. With respect to each individual Fund, the Proposals for the approval of contracts (items #2 and #3 in the summary list below) are contingent on one another. Additionally, no approved contracts will be executed to terminate the current management/advisory arrangements until sufficient approvals are received to prompt the Closing of the Transition. This is because the proposed Transition relates to a new constellation of management and distribution arrangements under the structure currently in place through Virtus. Furthermore, if the Shareholders of some Funds do not approve these Proposals, but AllianzGI U.S. and Virtus proceed to Closing, AllianzGI U.S. will continue to be contractually obligated to act as investment adviser and provide services under the existing arrangements and the Trustees will take such further action as they may deem to be in the best interests of the Shareholders of the relevant Funds for which the votes failed, with one possible outcome being the liquidation and termination of those Funds.

Throughout this Proxy Statement, the Board of Allianz Funds is referred to as the “Allianz Funds Board” and the Board of MST is referred to as the “MST Board.” The Notice of the Meeting, this Proxy Statement and the proxy card are being made available to Shareholders of record as the Record Date beginning on or about

 

2

[September 11], 2020. Upon request and without charge, the Trusts will furnish each person to whom this Proxy Statement is delivered with a copy of the Funds’ latest annual and semi-annual reports (if any) to Shareholders. You may obtain copies of one or more reports without charge by calling 1-800-498-5413 (for Institutional Class, Class R6, Class P and Administrative Class Shares) or 1-800-988-8380 (for Class A, Class C and Class R Shares), by writing to the Trust at the address appearing above or on the Funds’ website at us.allianzgi.com.

The Meeting is being called for the following purposes: (1) to elect Trustees of the Trusts, (2) to approve a new Investment Advisory Agreement between each Trust and Virtus, (3) to approve new Subadvisory Agreements between each Trust and each of AllianzGI U.S. and the Virtus Value Equity Subadviser, (4) to approve reliance by Virtus upon certain manager of managers exemptive relief from the Securities and Exchange Commission (“SEC”), (5) to approve a change in the classification of AllianzGI Focused Growth Fund from a “diversified” fund to a “non-diversified” fund, and (6) to transact such other business as may properly come before the Meeting or any postponement or adjournment thereof.

SUMMARY OF THE PROPOSALS

As summarized below, the Shareholders of the Funds have the right to vote on:

1. the election of Trustees of the Trusts, as described in Section I below;

2. the approval of a new Investment Advisory Agreement between each Trust and Virtus, as described in Section II below;

3. the approval of a Subadvisory Agreement by and among each Trust, Virtus and AllianzGI U.S. and by and among each Trust, Virtus and the Virtus Value Equity Subadviser, as described in Section III below;

4. the approval authorizing Virtus to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Continuing Funds without shareholder approval, and to permit the Continuing Funds to disclose advisory and subadvisory fee information in an aggregated manner, as described in Section V below;

5. the approval of a change in the classification of AllianzGI Focused Growth Fund from a “diversified” fund to a “non-diversified” fund, as described in Section VI below; and

6. To consider and act upon such other matters as may properly come before the Meeting and any adjourned or postponed session thereof.

The Boards of the Trusts know of no business other than the Proposals set forth herein to be considered at the Meeting. If any other business is properly presented before the Meeting, including any adjournment or postponement thereof, the persons named as proxies will vote in their sole discretion.

The principal executive offices of the Trusts are located at 1633 Broadway, New York, New York 10019.

 

3

I. ELECTION OF BOARDS OF TRUSTEES

Background

The Boards of the Trusts, or the “Boards”, are responsible for the overall management of the Trusts and each Fund thereof, including general supervision and review of the Funds’ investment activities. The Boards of the Trusts, in turn, elect the officers of the Funds who are responsible for administering the Funds’ day-to-day operations. Among other things, the Boards generally oversee the portfolio management of the Funds and review and approve the Funds’ advisory and subadvisory agreements, as discussed in detail below. Each Board is currently composed of eleven Trustees, nine of whom are not currently “interested persons” of the Trusts (“the Independent Trustees”) as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”), and two of whom are “interested persons” as defined in Section 2(a)(19) of the 1940 Act (the “Interested Trustees”).

As part of the Transition, it is proposed that the thirteen nominees described herein (the “Nominees”) be elected to the Boards at the Meeting (the “Post-Closing Board”). The Boards of Trustees propose that three (3) of such Nominees, Sarah E. Cogan, Deborah A. DeCotis and F. Ford Drummond, who are Trustees, continue to serve as Trustees of the Trusts. In addition, the Boards of Trustees propose that the remainder of the Nominees, each of whom currently serves as a director/trustee on the boards of the Virtus-Advised Funds (as defined below), be newly elected as Trustees of the Trusts. [The current Trustees will remain on the Boards of the Trusts until the Closing.] As part of the strategic partnership with Virtus, AllianzGI U.S. agreed to use its reasonable efforts, subject to all applicable laws and fiduciary duties, to obtain a positive recommendation of the Boards of Trustees with respect to the new Nominees. The current Boards of the Trusts considered the benefits to the Funds of the Boards of Trustees being comprised of both incumbent Trustees and nominees that currently serve on the boards of trustees for certain Virtus-Advised Funds (as defined below). Among the anticipated benefits, the current Boards of the Trusts considered the familiarity of the new Nominees with the investment and organizational philosophies, capabilities, personnel and ethics of Virtus and the incumbent Nominees’ familiarity and experience with AllianzGI U.S., the individual Funds and their investment strategies, and the portfolio managers responsible for the Funds’ day-to-day management. Accordingly, the Boards considered the attendant benefits to the Funds of having Post-Closing Boards comprised of Nominees with prior experience either serving the Trusts or with oversight and management of funds advised by Virtus, as well as the likelihood of enhanced efficiency of the Boards after the Transition given this experience. The Boards noted that Virtus operates a multi-manager asset management business, comprising numerous open-end and closed-end funds for which Virtus and/or its affiliates provide investment advisory services (each a “Virtus-Advised Fund and collectively, the “Virtus-Advised Funds”) that each have their own investment process and brand. The Boards also noted that, notwithstanding the individuality of such Virtus-Advised Funds, the oversight and leadership structures that underpin the management of such Virtus-Advised Funds, including Virtus’ investment oversight, is notably consistent across the Virtus complex. They also considered the importance of having the continuity of the three incumbent Nominees who are familiar with the Funds and their investment strategies, the Funds’ prior performance history and the portfolio managers responsible for the Funds subject to Virtus’ oversight. The current Boards of the Trusts noted the foregoing factors, among others, as consistent with good governance and that the election of the proposed Nominees, was not likely to adversely affect the Funds.

In selecting the Nominees, the Boards also considered representations from Virtus and AllianzGI U.S. regarding the expected enhanced administrative and cost efficiencies of a unified, integrated Post-Closing Board responsible for overseeing the Virtus-Advised Funds, including the Funds. In this connection, it is expected that the three incumbent Nominees named above also will be proposed for nomination to the boards of the current Virtus-Advised Funds in order to achieve a unified Post-Closing Board with overlapping Board members. Such appointment is expected to have the additional effect of aligning the Funds’ proposed governance structure with the governance structure of Virtus-Advised Funds, if approved by the Post-Closing Boards, and to provide related operational and logistical efficiencies in the oversight of the broader complex of funds managed by Virtus.

 

4

Lastly, the Boards of the Trusts considered that the Fifth Amended and Restated Agreement and Declaration of Trust of Allianz Funds and the Amended and Restated Agreement and Declaration of Trust of MST (each a “Declaration of Trust” and together the “Declarations of Trust”), do not provide for the annual election of Trustees. However, in accordance with the 1940 Act, (i) each Trust will hold a Shareholders’ meeting for the election of Trustees at such time as less than a majority of the Trustees holding office have been elected by Shareholders; and (ii) if, as a result of a vacancy in a board of trustees, less than two-thirds of the trustees holding office have been elected by the Shareholders, that vacancy may only be filled by a vote of the Shareholders. The business of each Trust is managed under the direction of such Trust’s Board. Subject to the provisions of each Trust’s Declaration of Trust, its Bylaws and the laws of the Commonwealth of Massachusetts, the current Trustees have all powers necessary and convenient to carry out this responsibility, including the election and removal of each Trust’s officers.

Election of Nominees

In consideration of the various foregoing considerations, the current Boards of the Trusts have determined that, if the proposed investment advisory agreements and subadvisory agreements are approved by Shareholders and entered into by the Trusts, it would be in the best interests of the Funds and their Shareholders if the Post-Closing Boards were each comprised of the Nominees.

Accordingly, the Boards of the Trusts now propose that the following persons be newly elected as Trustees of the Trusts: George R. Aylward, Donald C. Burke; Sidney E. Harris; John R. Mallin; Connie D. McDaniel; Philip R. McLoughlin; Geraldine M. McNamara; James M. Oates; Keith R. Walton; and Brian T. Zino, and that the following incumbent Trustees be elected as Trustees of the Trusts: Sarah E. Cogan; Deborah A. DeCotis; and F. Ford Drummond. Twelve of the Nominees, as indicated in the table below, are not expected to be “interested persons” of the Trusts as defined in Section 2(a)(19) of the 1940 Act (the “Disinterested Nominees”), and one of the Nominees, as indicated in the table below, is expected to be an “interested person” (defined as noted above) (the “Interested Nominee”).

At meetings held by live webcast on August 27 and August 31, 2020, the current Governance and Nominating Committees of the Boards of the Trusts, the voting members of which are Independent Trustees, nominated each of the Nominees to stand for election by Shareholders, and the Boards of the Trusts determined to propose such Nominees, who are described below, for election by Shareholders at the Meeting.

Information about Nominees

Information about the Nominees is presented below. Except as shown, each Nominee’s principal occupation and business experience for the last five years have been with the employer(s) indicated, although in some cases the Nominee may have held different positions with such employer(s). In addition to the Funds, which are managed by AllianzGI U.S., certain of the incumbent Trustees serve as trustees of certain funds managed by Pacific Investment Management Company LLC (“PIMCO”) (the “PIMCO Funds”). The Funds and the PIMCO Funds are considered to be in the same Fund Complex as the Funds.

 

5

Disinterested Nominees

Name, Address and Year
of Birth*

  

Position with
the Trusts

  

Length of
Time Served

  

Principal Occupation(s)
During Past 5 Years

   Number of
Portfolios
In Fund
Complex
Overseen
by
Trustee
or Nominee		  

Other Directorships Held by
Trustee or Nominee

Donald C. Burke

1960

   None.   N/A   Retired.   0   Director (since 2020), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; and Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (54 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Director (since 2014), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); Director, Avista Corp. (energy company) (since 2011); Trustee, Goldman Sachs Fund Complex (2010 to 2014); and Director, BlackRock Luxembourg and Cayman Funds (2006 to 2010).

Sarah E. Cogan

1956

1633 Broadway,

New York, NY 10019

   Trustee  

AF/MST:

Since

January

2019

   Of Counsel, Simpson Thacher & Bartlett LLP (“STB”) (law firm). Formerly, Partner, STB (1989-2018); Director, Girl Scouts of Greater New York (since 2016) and Trustee, Natural Resources Defense Council, Inc. (since 2013).   83**   None.

Deborah A. DeCotis

1952

1633 Broadway,

New York, NY 10019

   Trustee  

AF: Since

June 2014

 

MST: Since

March 2011

   Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Member, Circle Financial Group (since 2009); Member, Council on Foreign Relations (since 2013); Trustee, Smith College (since 2017); and Director, Watford Re (since 2017). Formerly, Co-Chair Special Projects Committee, Memorial Sloan Kettering (2005-2015); Trustee, Stanford University (2010-2015); and Principal, LaLoop LLC, a retail accessories company (1999-2014).   84***   None.

F. Ford Drummond

1962

1633 Broadway,

New York, NY 10019

   Trustee  

AF: Since

January 2006

 

MST: Since

December 2014

   Owner/Operator, Drummond Ranch; and Board Member, Oklahoma Water Resources Board. Formerly, Director, The Cleveland Bank; and General Counsel, BMIHealth Plans (benefits administration); and Chairman, Oklahoma Water Resources Board.   55   Director,
BancFirst
Corporation.

Sidney E. Harris

1949

   None.   N/A   Retired.   0   Director (since 2020), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; and Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2019), Mutual Fund Directors Forum; Trustee (since 2017), Virtus Mutual Fund Family (54 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2013), KIPP Metro Atlanta; Trustee (1999 to 2019) Total System Services, Inc.; Trustee (2004 to 2017), RidgeWorth Funds; Trustee (since 2012), International University of the Grand Bassam Foundation; and Trustee (2011 to 2015), Genspring Family Offices, LLC.

John R. Mallin

1950

   None.   N/A   Partner/Attorney (since 2003), McCarter & English LLP (law firm) Real Property Practice Group; and Member (since 2014), Counselors of Real Estate.   0   Director (since 2020), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Mutual Fund Family (54 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Director (since 2013), Horizons, Inc. (non-profit); and Trustee (since 1999), Virtus Variable Insurance Trust (8 portfolios).

 

6

Connie D. McDaniel

1958

   None.   N/A   Retired (since 2013). Vice President, Chief of Internal Audit, Corporate Audit Department (2009 to 2013); Vice President Global Finance Transformation (2007 to 2009); Vice President and Controller (1999 to 2007), The Coca-Cola Company.   0   Director (since 2020), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Director (since 2019), Global Payments Inc.; Trustee (since 2017), Virtus Mutual Fund Family (54 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Alternative Solutions Trust (3 portfolios); Trustee (2014 to 2019), Total System Services, Inc.; and Trustee (2005 to 2017), RidgeWorth Funds.

Philip R. McLoughlin

1946

   None.   N/A   Retired.   0   Director and Chairman (since 2016), Virtus Total Return Fund Inc.; Director and Chairman (2016 to 2019), the former Virtus Total Return Fund Inc.; Director and Chairman (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and Chairman (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Trustee and Chairman (since 2011), Virtus Global Multi-Sector Income Fund; Chairman and Trustee (since 2003), Virtus Variable Insurance Trust (8 portfolios); Director (since 1995), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); Director (1991 to 2019) and Chairman (2010 to 2019), Lazard World Trust Fund (closed-end investment firm in Luxembourg); and Trustee (since 1989) and Chairman (since 2002), Virtus Mutual Fund Family (54 portfolios).

Geraldine M. McNamara

1951

   None.   N/A   Retired.   0   Director (since 2020), Duff & Phelps Select MLP and Midstream Energy Fund Inc. and Virtus Total Return Fund Inc.; Trustee (since 2020), Virtus Global Multi-Sector Income Fund; Trustee (since 2016), Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2015), Virtus Variable Insurance Trust (8 portfolios); Director (since 2003), closed-end funds managed by Duff & Phelps Investment Management Co. (4 funds); and Trustee (since 2001), Virtus Mutual Fund Family (54 portfolios).

James M. Oates

1946

   None.   N/A   Managing Director (since 1994), Wydown Group (consulting firm).   0   Director (since 2016), Virtus Total Return Fund Inc.; Director (2016 to 2019), the former Virtus Total Return Fund; Trustee (since 2016), Virtus Variable Insurance Trust (8 portfolios); Director (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Trustee (since 2011), Virtus Global Multi-Sector Income Fund; Trustee (since 2005) and Chairperson (2005 to 2017), John Hancock Fund Complex (227 portfolios); Director (2002 to 2014), New Hampshire Trust Company; Chairman (2000 to 2016), Emerson Investment Management, Inc.; Non-Executive Chairman (2000 to 2014), Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services); Chairman and Director (1999 to 2014), Connecticut River Bank; Director (since 1996), Stifel Financial; and Trustee (since 1987), Virtus Mutual Fund Family (54 portfolios).

Keith R. Walton

1964

   None.   N/A   Senior Adviser (since 2018), Vatic Labs, LLC; Venture Partner (since 2019) Plexo, LLC; Executive Vice President, Strategy (2017 to 2019), Zero Mass Water, LLC; Vice President, Strategy (2013 to 2017), Arizona State University; Principal and Chief Administrative Officer (2006 to 2019) and Partner (since 2006), Global Infrastructure Partners.   0   Trustee (since 2020) Virtus Alternative Solutions Trust (3 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (54 portfolios); Director (since 2017), certain funds advised by Bessemer Investment Management LLC; Director (since 2016), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (2006 to 2019), Systematica Investments Limited Funds; Director (2006 to 2017), BlueCrest Capital Management Limited Funds; Trustee (2014 to 2017), AZ Service; Director (since 2004), Virtus Total Return Fund Inc.; Director (2004 to 2019), the former Virtus Total Return Fund Inc.; and Director (since 2006), Blue Crest Capital Management Funds.

Brian T. Zino

1952

   None.   N/A   Retired. Various roles (1982 to 2008), J. & W. Seligman & Co. Incorporated, including President (1994 to 2008).   0   Trustee (since 2020) Virtus Alternative Solutions Trust (3 portfolios), Virtus Variable Insurance Trust (8 portfolios) and Virtus Mutual Fund Family (54 portfolios); Director (since 2016), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee (since 2016), Virtus Global Multi-Sector Income Fund; Director (since 2014), Virtus Total Return Fund Inc.; Director (2014 to 2019), the former Virtus Total Return Fund Inc.; Trustee (since 2011), Bentley University; Director (1986 to 2008) and President (1994 to 2008), J&W Seligman Co. Inc.; Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002), ICI Mutual Insurance Company; Member, Board of Governors of ICI (1998 to 2008).

 

7

Interested Nominee

Name and Age

  

Position
with
the Trust

  

Length of
Time Served

  

Principal Occupation(s)
During Past 5 Years

   Number of
Portfolios in
Fund
Complex
Overseen by
Trustee or
Nominee		  

Other Directorships Held by
Trustee or Nominee

George R. Aylward

1964

   None.   N/A   Director, President and Chief Executive Officer (since 2008), Virtus Investment Partners, Inc. and/or certain of its subsidiaries; and various senior officer positions with Virtus affiliates (since 2005).   0   Chairman and Trustee (since 2015), Virtus ETF Trust II (2 portfolios); Director, President and Chief Executive Officer (since 2014), Duff & Phelps Select MLP and Midstream Energy Fund Inc.; Trustee and President (since 2013), Virtus Alternative Solutions Trust (3 portfolios); Director (since 2013), Virtus Global Funds, PLC (4 portfolios); Trustee (since 2012) and President (since 2010), Virtus Variable Insurance Trust (8 portfolios); Trustee, President and Chief Executive Officer (since 2011), Virtus Global Multi-Sector Income Fund; Trustee and President (since 2006) and Executive Vice President (2004 to 2006), Virtus Mutual Fund Family (54 portfolios); Director, President and Chief Executive Officer (since 2006), Virtus Total Return Fund Inc.; and Director, President and Chief Executive Officer (2006 to 2019), the former Virtus Total Return Fund Inc.

 

*

Unless otherwise indicated, the business address of the persons listed above is c/o Virtus Investment Partners, Inc., One Financial Plaza, Hartford, Connecticut 06103.

**

Includes 28 PIMCO Funds that the incumbent Trustee currently presides over.

***

Includes 29 PIMCO Funds that the incumbent Trustee currently presides over.

The term of office of each person elected as Trustee will be until his or her successor is elected and qualified. Each of the Nominees has agreed to serve as a Trustee if elected. If any of the Nominees should be unavailable for election at the time of the Meeting (which is not presently anticipated), the persons named as proxy may vote for other persons in their discretion, or the Trustees may vote to fix the number of Trustees at fewer than thirteen.

Trustee Qualifications

The Boards have determined that each Nominee should serve or continue to serve, as the case may be, as a Trustee based on several factors (none of which alone is decisive). All of the Nominees have served on either the Boards of the Trusts or on the board of the Virtus-Advised Funds, and all of the Nominees that are not currently Trustees are familiar with the oversight of Virtus and its service provider arrangements, including its use of a manager-of-managers structure. Among the factors the Boards considered when concluding that an individual should serve on the Post-Closing Boards were the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s ability to work effectively with other members of the Post-Closing Boards; (iii) in respect of each incumbent Nominee that is a Trustee, the individual’s previous working relationship on the Boards, and their familiarity with the Funds’ and their strategies, as well as the portfolio managers responsible for managing the Funds; (iv) the individual’s prior experience, if any, serving on the boards of public companies (including, where relevant, other investment companies) and other complex enterprises and organizations; and (v) how the individual’s skills, experiences and attributes, including with respect to diversity, would contribute to an appropriate mix of relevant skills and experience on each Post-Closing Board. The following is a summary of various qualifications, experiences and skills of each Nominee (in addition to business experience during the past five years set forth in the table above) that contributed to the Boards’ conclusion that an individual should serve on each Post-Closing Board. References to qualifications, experiences and skills are not intended to hold out the Boards or individual Nominees as having any special expertise or experience, and shall not impose any greater responsibility or liability on any such person or on the Post-Closing Boards by reason thereof.

 

8

Interested Nominee

George R. Aylward1 — Mr. Aylward is a Director and the President and Chief Executive Officer of Virtus Investment Partners, Inc. He also holds various executive positions with Virtus, VP Distributors, LLC and Virtus Fund Services, LLC, and various of their affiliates, and previously held such positions with the former parent company of Virtus. He therefore has experience in all aspects of the development and management of registered investment companies, and the handling of various financial, staffing, regulatory and operational issues. Mr. Aylward is a certified public accountant and holds an MBA, and he also serves as an officer and director/trustee of several open-end and closed-end funds managed by Virtus and its affiliates.

Disinterested Nominees

Donald C. Burke — Mr. Burke, currently retired, has extensive experience with mutual funds, including as president and Chief Executive Officer of a major fund complex, and subsequently as an independent trustee of another major fund complex. He also has extensive knowledge of the utility industry, derived from his service on the board of a public company involved in the production, transmission and distribution of energy. He is also a director/trustee of several open-end and closed-end funds managed by Virtus and its affiliates.

Sarah E. Cogan — Ms. Cogan has substantial legal background and experience in the investment management industry. She was a partner at Simpson Thacher & Bartlett LLP, a large international law firm, in the corporate department for over 25 years and former head of the registered funds practice. She has extensive experience in oversight of investment company boards through her experience as counsel to the Independent Trustees of the series of the Trusts and as counsel to other independent trustees, investment companies and asset management firms.

Deborah A. DeCotis — Ms. DeCotis has substantial senior executive experience in the investment banking industry, having served as a Managing Director for Morgan Stanley. She has extensive board experience and/or experience in oversight of investment management functions through her experience as a trustee of Stanford University and Smith College and as a director of Armor Holdings and The Helena Rubinstein Foundation, Stanford Graduate School of Business.

F. Ford Drummond — Mr. Drummond has substantial legal background and experience in the oversight and management of regulated companies through his work as General Counsel of BMI Health Plans, a benefits administrator. He has substantial board experience in the banking sector as a director of BancFirst Corporation, Oklahoma’s largest state chartered bank, and as a former director of The Cleveland Bank. Mr. Drummond also serves as a member and is a past chairman of the Oklahoma Water Resources Board, which provides tax exempt financing for water infrastructure projects in the state.

Sidney E. Harris — Dr. Sidney Harris has extensive knowledge of best practices in executive management, familiarity with international business practices and expertise in corporate strategy implementation, risk management, technology, asset management compliance and investments. Dr. Harris is currently Professor and Dean Emeritus at the J. Mack Robinson College of Business at Georgia State University. He has been affiliated with the J. Mack Robinson College of Business since 1997, serving as Professor (1997 to 2014) and Dean (1997 to 2004). Most recently, Dr. Harris was Professor of Computer Information Systems, Management and International Business. Prior to joining Georgia State University, Dr. Harris was Professor (1987 to 1996) and

 

1 

Mr. Aylward would be an “interested person” of the Trusts on account of the positions he currently holds at Virtus and affiliates of Virtus.

 

9

former Dean (1991 to 1996) of the Peter F. Drucker Graduate School of Management at Claremont Graduate University (currently Peter F. Drucker and Masotoshi Ito Graduate School of Management). He served as Independent Trustee of the RidgeWorth Funds Board of Trustees (2004 to 2017) and as Independent Chairman (2007 to 2017). He served as a member of the RidgeWorth Funds Governance and Nominating Committee (2004 to 2017) and Audit Committee (2006 to 2017). Dr. Harris previously served on the Board of Transamerica Investors (1995 to 2005). Dr. Harris is a Director of Total System Services, Inc. He served on the Board of Directors of KIPP Metro Atlanta, served as Chairman of the International University of the Grand-Bassam (IUGB) Foundation (2012 to 2017), and serves on the Board of Directors of the IUGB Foundation (since 2012). Dr. Harris also serves as a Trustee of the Mutual Funds Directors Forum (since 2019).

John R. Mallin — Mr. Mallin is a real estate partner and former practice group leader for the Real Property Practice Group at McCarter & English LLP. During his career, he has been involved in all aspects of real estate development and financial transactions related to real estate. Mr. Mallin also has oversight and corporate governance experience as a director, including as a chair, of non-profit entities. Mr. Mallin is also a trustee of several other open-end funds managed by Virtus.

Connie D. McDaniel — Ms. McDaniel, currently retired, has extensive domestic and international business experience, particularly with respect to finance, strategic planning, risk management and risk assessment functions. She is retired from The Coca-Cola Company, where she served as Vice President and Chief of Internal Audit, Corporate Audit Department (2009 to 2013), Vice President, Global Finance Transformation (2007 to 2009), Vice President and Controller (1999 to 2007), and held various management positions (1989 to 1999). While at The Coca-Cola Company, Ms. McDaniel chaired that company’s Ethics and Compliance Committee (2009 to 2013) and developed a knowledge of corporate governance matters. Prior to The Coca-Cola Company, she was associated with Ernst & Young (1980 to 1989). Ms. McDaniel served as Independent Trustee of the RidgeWorth Funds Board of Trustees from 2005 to 2017. She was Chairman of the RidgeWorth Funds Audit Committee (2008 to 2017), designated Audit Committee Financial Expert (2007 to 2017) and a member of the RidgeWorth Funds Governance and Nominating Committee (2015 to 2017). Ms. McDaniel also served as a Director of Total System Services, Inc. (2014 to 2019) and currently serves as a Director of Global Payments Inc. and as Chair of the Georgia State University Robinson College of Business Board of Advisors.

Philip R. McLoughlin — Mr. McLoughlin has an extensive legal, financial and asset management background. In 1971, he joined Phoenix Investment Partners, Ltd. (then, Phoenix Equity Planning Corp.), the predecessor of Virtus Investment Partners, Inc., as Assistant Counsel with responsibility for various compliance and legal functions. During his tenure, Mr. McLoughlin assumed responsibility for most functions in the firm’s advisory, broker-dealer and fund management operations, and eventually ascended to the role of President. Mr. McLoughlin then served as General Counsel, and later Chief Investment Officer, of Phoenix Mutual Life Insurance Company, the parent company of Phoenix Investment Partners. Among other functions, he served as the senior management liaison to the boards of directors of the insurance company’s mutual funds and closed-end funds, and had direct oversight responsibility for the funds’ portfolio managers. In 1994, Mr. McLoughlin was named Chief Executive Officer of Phoenix Investment Partners, and continued in that position, as well as Chief Investment Officer of Phoenix Mutual Life Insurance Company, until his retirement in 2002.

Geraldine M. McNamara — Ms. McNamara was an executive at U.S. Trust Company of New York for 24 years, where she rose to the position of Managing Director. Her responsibilities at U.S. Trust included the oversight of U.S. Trust’s personal banking business. In addition to her managerial and banking experience, Ms. McNamara has experience in advising individuals on their personal financial management, which has given her an enhanced understanding of the goals and expectations that individual investors may have. Ms. McNamara is also a trustee of several open-end and closed-end funds managed by Virtus and its affiliates.

 

10

James M. Oates — Mr. Oates was instrumental in the founding of a private global finance, portfolio management and administration company, and he has also served in executive and director roles for various types of financial services companies. As a senior officer and director of investment management companies, Mr. Oates has experience in investment management. He also previously served as chief executive officer of two banks, and holds an MBA. Mr. Oates also has experience as a director of other publicly traded companies and served for a number of years as the Chairman of the Board of a large family of mutual funds unaffiliated with the Trust. Mr. Oates is also a director/trustee of several open-end and closed-end funds managed by Virtus and its affiliates.

R. Keith Walton — Mr. Walton’s business and legal background, and his extensive service with other boards, provide valuable insight to the Board and its committees regarding corporate governance and best practices. He is an honors graduate of Yale College and the Harvard Law School. Mr. Walton was a Director of Systematica Investments Limited Funds (2006 to 2019) and a Director of BlueCrest Capital Management Limited Funds (2006 to 2017). He is also the founding Principal and Chief Administrative Officer at Global Infrastructure Partners (since 2006) and a Director of Blue Crest Capital Management Funds (since 2006).

Brian T. Zino — Mr. Zino, currently retired, was employed by J. & W. Seligman and Co. Inc., a privately held New York City investment firm managing Closed End Investment Companies, a family of mutual funds, institutional accounts and operating a trust company (1998 to 2009). For the last 15 of those years, he served as president and CEO of Seligman. His extensive mutual fund, financial and business background and years of service as a director of a large non-affiliated family of both open- and closed-end funds bring valuable skills and business judgment to the Board and its committees. Mr. Zino is also a certified public accountant and has an extensive background in accounting matters relating to investment companies. He also served as a Director (1998 to 2009), Chairman (2002 to 2004) and Vice Chairman (2000 to 2002) on the board of the ICI Mutual Insurance Company and as a Member of the Board of Governors of ICI (1998 to 2008).]

Current and Anticipated Board Leadership Structures

As noted above, the Boards of Trustees are recommending the election of thirteen (13) Trustees. Three (3) of the Nominees are currently Trustees of both of the Trusts. Shareholder approval of the foregoing Proposal is expected to lead to changes in the leadership structure of the Boards. While any such changes would be implemented after the Closing, the Boards anticipate the new leadership structure to be identical to what the existing Virtus-sponsored mutual funds currently have in place, subject to approval by the Post-Closing Boards. In order to provide a helpful point of comparison, provided below are the current leadership structures of the Boards of Trustees and the anticipated structures post-Closing, subject to approval by the Post-Closing Boards.

Current Board Leadership Structure

As noted above, the current Boards of the Trusts are composed of eleven Trustees, nine of whom are Independent Trustees and two of whom are Interested Trustees. An Independent Trustee serves as Chairman of the Trustees (the “Independent Chairman”) and is selected by vote of the majority of the Independent Trustees. The Independent Chairman presides at meetings of the Boards of the Trusts and acts as a liaison with service providers, officers, attorneys and other Trustees generally between meetings, and performs such other functions as may be requested by the Boards of the Trusts from time to time.

The Boards of the Trusts meet regularly four times each year to discuss and consider matters concerning the Trusts and the applicable Funds, and also hold special meetings to address matters arising between regular meetings. The Independent Trustees regularly meet outside the presence of each Trust’s management and are advised by independent legal counsel. Regular meetings generally take place in-person2; other meetings may take place in-person or by telephone.

 

2 

Due to the effects of the novel coronavirus (“COVID-19”) pandemic, and public health and safety concerns related to in-person meetings in light of COVID-19, each Board has availed itself of recent SEC conditional exemptive relief from the in-person board meeting and voting requirements of the 1940 Act and the rules thereunder.

 

11

The Boards of the Trusts have established six standing Committees (each a “Committee” and collectively, the “Committees”) to facilitate the Trustees’ oversight of the management of the Trusts, as discussed in greater detail below: the Audit Oversight Committee, the Governance and Nominating Committee, the Contracts Committee, the Compliance and Risk Oversight Committee, the Performance Committee and the Valuation Committee.

Each Board reviews its leadership structure periodically and has determined that this leadership structure, including an Independent Chairman, a supermajority of Independent Trustees on the Boards and limiting Committee chairs to Independent Trustees, is appropriate in light of the characteristics and circumstances of the applicable Trust. In reaching this conclusion, each Board considered, among other things, the role of AllianzGI U.S. in the day-to-day management of Fund affairs, the extent to which the work of the Boards is conducted through the Committees, the number of portfolios that comprise the Trusts overseen, the variety of asset classes those series include, the net assets of each Fund overseen, and the investment advisory, administration, distribution and other service arrangements of each Fund. Each Board also believes that its structure, including the presence of one or more Trustees who are executives with various entities affiliated with AllianzGI U.S., the Interested Trustee(s), facilitates an efficient flow of information concerning the management of the Trusts to the Independent Trustees.

Anticipated Board Leadership Structure

The leadership structures of Virtus-Advised Funds and their boards are generally consistent across the Virtus complex. It is expected that the post-Closing leadership structures and philosophies of the Post-Closing Boards will align with the structures and philosophies of other Virtus-Advised Funds and their boards, subject to the Post-Closing Boards’ approval. Therefore, if the Nominees are elected and take office as Trustees, it is anticipated that the Post-Closing Boards will each consist of thirteen Trustees, twelve of whom are anticipated to be Independent Trustees and one of whom is anticipated to be an Interested Trustee. The boards of other Virtus-Advised Funds meet regularly four times per year, and it is anticipated that the Post-Closing Boards will do the same and hold special meetings either in person or via telephone to discuss specific matters that may require consideration prior to the next regular meeting. As discussed below, it is anticipated that the Post-Closing Boards will establish several standing committees to assist the in performing their oversight responsibilities, and that each such committees will each appoint a chairperson. It is anticipated that the Post-Closing Boards will also designate working groups or ad hoc committees, as appropriate.

It is expected that the Post-Closing Boards will establish the following four committees: the audit committee, the executive committee, the compliance committee and the governance and nominating committee.

The Post-Closing Board will appoint an Independent Trustee to serve in the role of chairman. The chairman’s primary role is expected to be to participate in the preparation of the agenda for meetings of the Post-Closing Boards and the identification of information to be presented to the Post-Closing Boards with respect to matters to be acted upon. The chairman is also expected to preside at all meetings of the Post-Closing Boards and between meetings generally would act as a liaison with the Trusts’ service providers, officers, legal counsel, and the other Trustees. It is anticipated that the chairman will also perform such other functions as may be requested by the Post-Closing Boards from time to time. Except for any duties specified herein or pursuant to the Declarations of Trust or Bylaws, or as assigned by the Post-Closing Boards, it is expected that the designation of chairman will not impose on such Independent Trustee any duties, obligations or liability that is greater than the duties, obligations or liability imposed on such person as a member of the Post-Closing Boards, generally.

 

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The proposed post-Closing leadership structure, including a supermajority of Independent Trustees, would be appropriate because it would allow each Post-Closing Board to exercise informed and independent judgment over matters under its purview, and it would allocate areas of responsibility among committees or working groups of the Trustees and the full Post-Closing Board of each Trust in a manner that enhances effective oversight. In addition, the presence of at least one Interested Trustee on each Post-Closing Board would bring corporate and financial viewpoints that are crucial elements in any board’s decision-making process as well as transparency regarding Virtus’ internal operations and decision-making.

The leadership structure of each Post-Closing Board may be changed at any time and in the discretion of the relevant Post-Closing Board, including in response to changes in circumstances or the characteristics of the applicable Trust.

Current and Anticipated Committees of the Boards of Trustees

As noted above, the Boards of Trustees are recommending that Virtus replace AllianzGI U.S. as the investment manager of each Trust pursuant to a proposed new investment advisory agreement between the Trust and Virtus, as described in Section II. In addition, the Boards of Trustees are recommending the approval of the election of thirteen (13) Trustees, three (3) of which are currently Trustees of both of the Trusts. Shareholder approval of the foregoing proposals, as well as other proposals of the Boards of Trustees, are expected to lead to changes in the composition, structure and functions of some or all of the Committees of the Boards of Trustees currently in place, including but not limited to the number of standing Committees. Provided below are the current Committees of the Boards of Trustees and the anticipated committees post-Closing.

Current Committees of the Boards of Trustees

Audit Oversight Committee. The Trusts’ Boards have established Audit Oversight Committees in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Each Trust’s Audit Oversight Committee is currently composed of Messrs. Drummond, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon, and Mses. Cogan and DeCotis, each of whom is an Independent Trustee. Mr. Jacobson is the current Chair of the Trust’s Audit Oversight Committee.

Each Trust’s Audit Oversight Committee provides oversight with respect to the internal and external accounting and auditing procedures of each Fund and, among other things, determines the selection of the independent registered public accounting firm for the Funds and considers the scope of the audit, approves all audit and permitted non-audit services proposed to be performed by the independent registered public accounting firm on behalf of the Funds, and approves non-audit services to be performed by the independent registered public accounting firm for certain affiliates, including the Adviser and entities in a control relationship with the Adviser, that provide services to the Funds where the engagement relates directly to the operations and financial reporting of the Funds. Each Audit Oversight Committee considers the possible effect of those services on the independence of the Funds’ independent registered public accounting firm. The Audit Oversight Committee of Allianz Funds convened five times during the fiscal year ended June 30, 2020. The Audit Oversight Committee of MST convened four times during the fiscal year ended September 30, 2019.

Compliance and Risk Oversight Committee. Each Trust’s Compliance and Risk Oversight Committee is currently composed of Messrs. Drummond, Fuccillo, Holt, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon and Mses. Cogan and DeCotis. Mr. Drummond is the current Chair of each Trust’s Compliance and Risk Oversight Committee. The Compliance and Risk Oversight

 

13

Committees’ responsibilities include providing oversight with respect to regulatory and fiduciary compliance matters involving the Trust, reviewing and making recommendations regarding compliance policies and procedures, receiving reports from the CCO as to the results of internal audit functions, advising the Boards on matters relating to the CCO and serving as principal liaison between the applicable Board and compliance officers. The Committees also have responsibilities with respect to oversight of AllianzGI U.S.’s risk management program relating to the Funds, including operational, reputational, cybersecurity, business continuity and information technology risks, and they also review and oversee the Boards’ processes for overseeing the management of various areas of risk applicable to the Funds by AllianzGI U.S. and perform any other risk oversight functions delegated to them by the Boards. The Compliance and Risk Oversight Committee of Allianz Funds convened four times during the fiscal year ended June 30, 2020. The Compliance and Risk Oversight Committee of MST convened four times during the fiscal year ended September 30, 2019.

Contracts Committee. Each Trust’s Contracts Committee is currently composed of Messrs. Drummond, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon, and Mses. Cogan and DeCotis, each of whom is an Independent Trustee. Ms. Cogan is the current Chair of each Trust’s Contracts Committee. The Contracts Committees’ responsibilities include reviewing and considering the annual renewal of the Funds’ investment advisory and administration and distribution agreements and plans. The Contracts Committee of Allianz Funds convened seven times during the fiscal year ended June 30, 2020. The Contracts Committee of MST convened six times during the fiscal year ended September 30, 2019.

Governance and Nominating Committee. Each Trust’s Governance and Nominating Committee is currently composed of Messrs. Drummond, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon, and Mses. Cogan and DeCotis, each of whom is an Independent Trustee. Mr. Rappaport is the Chair of each Trust’s Governance and Nominating Committee. The Governance and Nominating Committees’ responsibilities include the oversight of matters relating to the functions and duties of the Boards of Trustees (including education initiatives of the Boards) and the screening and nomination of candidates for election to the Boards of Trustees as independent trustees of the Trusts. It is the policy of each of the Governance and Nominating Committees to consider trustee nominees recommended by Shareholders. The procedures by which Shareholders can submit nominee recommendations to the Governance and Nominating Committees are summarized below. The Governance and Nominating Committees will periodically review and recommend for approval by each Board the structure and level of compensation and any related benefits to be paid or provided by its Trust to the Independent Trustees for their services on such Board and any committees thereof. The Governance and Nominating Committee of Allianz Funds convened four times during the fiscal year ended June 30, 2020. The Governance and Nominating Committee of MST convened four times during the fiscal year ended September 30, 2019.

Qualifications, Evaluation and Identification of Trustee Nominees. Each Governance and Nominating Committee requires that Trustee candidates have a college degree or equivalent business experience, but has not otherwise established specific, minimum qualifications that must be met by an individual to be considered by the Governance and Nominating Committee for nomination as a Trustee. The Governance and Nominating Committees may take into account a wide variety of factors in considering Trustee candidates, including, but not limited to: (i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities on the Boards; (ii) relevant industry and related experience; (iii) educational background; (iv) ability, judgment and expertise; and (v) overall diversity of the Boards’ composition. The Governance and Nominating Committees may consider candidates for Trustee recommended by the applicable Trust’s current Trustees, the Trust’s officers, the investment adviser, Shareholders of any Fund and any other source the Governance and Nominating Committees deem appropriate. The Governance and Nominating Committees may, but are not required to, retain a third-party search firm at the Trusts’ expense to identify potential candidates.

Consideration of Candidates Recommended by Shareholders. The Governance and Nominating Committees will review and consider nominees recommended by Shareholders to serve as Trustee, provided that the recommending Shareholder follows the Procedures for Shareholders to Submit Nominee Candidates, which are set forth as Exhibit A to each Trust’s Governance and Nominating Committee Charter and attached as Appendix A to this Proxy Statement. Among other requirements, these procedures provide that the recommending Shareholder must submit any recommendation in writing to the applicable Trust, to the attention of the Trust’s Secretary, at the address of the principal executive offices of the Trust.

 

14

Any recommendation must include certain biographical and other information regarding the candidate and the recommending Shareholder, and must include a written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected. The foregoing description of the requirements is only a summary. Please refer to the Governance and Nominating Committee Charter, available at https://us.allianzgi.com/documents/Nominating-Committee-Charter.

The Governance and Nominating Committees have full discretion to reject nominees recommended by Shareholders, and there is no assurance that any such person properly recommended and considered by the Governance and Nominating Committees will be nominated for election to the applicable Board of Trustees.

Performance Committee. Each Trust’s Performance Committee is currently composed of Messrs. Drummond, Fuccillo, Holt, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon and Mses. Cogan and DeCotis. Mr. MacLeod is the current Chair of each Trust’s Performance Committee. The Performance Committees’ responsibilities include reviewing the performance of the Funds and any changes in investment philosophy, approach and personnel of the Funds’ investment adviser, AllianzGI U.S. The Performance Committee of Allianz Funds convened nine times during the fiscal year ended June 30, 2020. The Performance Committee of MST convened eight times during the fiscal year ended September 30, 2019.

Valuation Committee. Each Trust’s Valuation Committee is currently composed of Messrs. Drummond, Fuccillo, Holt, Jacobson, Kertess, MacLeod, Ogden, Rappaport and Scoon, and Mses. Cogan and DeCotis. Mr. Ogden is the current Chair of each Trust’s Valuation Committee. The Valuation Committees have been delegated responsibility by each Trust’s Board of Trustees for overseeing determinations of the fair value of the Funds’ portfolio securities on behalf of such Board in accordance with the Funds’ valuation procedures. The Valuation Committees review and approve procedures for the fair valuation of the Funds’ portfolio securities and periodically reviews information from the adviser, AllianzGI U.S., regarding fair value and liquidity determinations made pursuant to Board-approved procedures, and make related recommendations to the full Boards and assist the full Boards in resolving particular fair valuation and other valuation matters. The Valuation Committee of Allianz Funds convened eight times during the fiscal year ended June 30, 2019. The Valuation Committee of MST convened four times during the fiscal year ended September 30, 2019.

Anticipated Committees of the Boards of Trustees Post-Closing

If approved by the Post-Closing Boards, it is expected that the Post-Closing Boards will align with the standing committee structure approach adopted by other Virtus-Advised Funds and their boards and implemented across the Virtus complex, if and once approved by the Post-Closing Boards. Certain functions overseen by a particular Committee under the Boards’ current governance structure will be overseen by new or different committees, or in some cases, by the full Post-Closing Boards.

Audit Committee. The audit committee will be responsible for overseeing the accounting and auditing policies and practices. The audit committee typically reviews the Funds’ financial reporting procedures, their system of internal control, the independent audit process, and the Funds’ procedures for monitoring compliance with investment restrictions and applicable laws and regulations and with the code of ethics. It is expected that the Post-Closing Boards’ audit committees will be composed entirely of Independent Trustees. It is also expected that the Post-Closing Boards’ audit committees will meet four times during each fiscal year.

Compliance Committee. The compliance committee is responsible for overseeing the Funds’ compliance matters. The compliance committee typically oversees and reviews (1) information provided by the Funds’ officers, including the Funds’ CCO, the Funds’ investment adviser and other principal service providers, and others as appropriate; (2) the codes of ethics; (3) whistleblower reports; (4) cybersecurity programs; and (5)

 

15

distribution programs. It is expected that the Post-Closing Boards’ compliance committees will be composed entirely of Independent Trustees. It is also expected that the Post-Closing Boards’ compliance committees will meet four times each fiscal year.

Executive Committee. The executive committee will act as a delegate of the Post-Closing Board. The executive committee acts on behalf of the Boards when they are not in session, subject to limitations as set by the Boards. It is expected that the Post-Closing Boards’ executive committees will be composed entirely of Independent Trustees. It is also expected that the Post-Closing Boards’ executive committees will meet at least once each fiscal year.

Governance and Nominating Committee. The governance and nominating committee is responsible for developing and maintaining governance principles applicable to the Funds it oversees, for nominating individuals to serve as trustees, including as Independent Trustees, and annually evaluating the board and other committees. It is expected that the Post-Closing Boards’ governance and nominating committees will be composed entirely of Independent Trustees. It is also expected that the Post-Closing Boards’ governance and nominating committees will meet four times each fiscal year.

The governance and nominating committee typically considers candidates for trusteeship and makes recommendations to such board with respect to such candidates. There are typically no specific required qualifications for trusteeship. The governance and nominating committee considers all relevant qualifications of candidates for trusteeship, such as industry knowledge and experience, financial expertise, current employment and other board memberships, and whether the candidate would be qualified to be considered an independent trustee.

It is expected that the governance and nominating committees of the Post-Closing Boards will each adopt a policy related to the consideration of trustee nominees recommended by Shareholders. Under such policy, it is expected that an individual Shareholder or Shareholder group submitting a nomination would be required to hold either individually or in the aggregate for at least one full year as of the date of nomination 5% of the shares of a series of the applicable Trust, among other qualifications and restrictions. Shareholders or Shareholder groups submitting nominees would be expected to comply with all requirements set forth in such policy for consideration of Trustee nominees recommended by Shareholders and any such submission must be in writing, directed to the attention of the governance and nominating committees of the Post-Closing Boards in care of the applicable Trust’s secretary, whom it is anticipated will be appointed by the Post-Closing Boards, and would be expected to include biographical information, including business experience for the past ten years and a description of the qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to be an independent trustee, if applicable. Shareholder nominees for Trustee will be given the same consideration as any candidate provided the nominee meets certain minimum requirements.

Current Risk Oversight

Under the current management and governance structure, each of the Funds has retained AllianzGI U.S. to provide investment advisory services and administrative services. AllianzGI U.S. is immediately responsible for the management of risks that may arise from Fund investments and operations. Some employees of AllianzGI U.S. and its affiliates serve as the Trusts’ officers, including the Trusts’ principal executive officer and principal financial and accounting officer, chief compliance officer and chief legal officer. AllianzGI U.S. employs different processes, procedures and controls to identify and manage different types of risks that may affect the Funds. The Boards oversee the performance of these functions by AllianzGI U.S., both directly and through the Committee structure it has established. For example, the Boards’ Compliance and Risk Oversight Committees provide oversight with respect to regulatory and fiduciary compliance matters involving the Trusts, reviewing and making recommendations regarding compliance policies and procedures and receiving reports from the CCO as to the results of internal audit functions, among other oversight activities. The Boards receive from AllianzGI U.S. a wide range of reports and

 

16

presentations, both on a regular and as-needed basis, relating to the Funds’ activities and to the actual and potential risks of the Funds and the Trusts as a whole. These include, among others, reports and presentations on investment risks, custody and valuation of the Funds’ assets, compliance with applicable laws, the Funds’ financial accounting and reporting and the Boards’ oversight of risk management functions. The Boards also regularly receive, from the Funds’ principal underwriter and the CCO (as defined below), reports regarding the distribution, sale and marketing of the Funds’ shares, as well as related risks. In addition, the Boards meet periodically with the individual portfolio managers of the Funds or their delegates to receive reports regarding the portfolio management of the Funds and their performance, including their investment risks. In the course of these meetings and discussions with AllianzGI U.S., the Boards have emphasized the importance of maintaining vigorous risk-management programs and procedures.

In addition, the Board has appointed a Chief Compliance Officer (“CCO”) of the Trusts. The CCO oversees the development of compliance policies and procedures that are reasonably designed to minimize the risk of violations of the federal securities laws (“Compliance Policies”). The CCO reports directly to the Independent Trustees, interacts with individuals within AllianzGI U.S.’s organization including its Head of Risk Management, and provides presentations to the Boards at their quarterly meetings and an annual report on the application of the Compliance Policies. The Boards periodically discuss relevant risks affecting the Trusts with the CCO at these meetings. The Boards have approved the Compliance Policies and review the CCO’s reports. Further, the Boards annually review the sufficiency of the Compliance Policies, as well as the appointment and compensation of the CCO.

The Boards recognize that the reports they receive concerning risk management matters are, by their nature, typically summaries of the relevant information. Moreover, the Boards recognize that not all risks that may affect the Funds can be identified in advance; that it may not be practical or cost-effective to eliminate or mitigate certain risks; that it may be necessary to bear certain risks (such as investment-related risks) in seeking to achieve the Funds’ investment objectives; and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and for other reasons, the Boards’ risk management oversight is subject to substantial limitations.

Anticipated Risk Oversight Post-Closing

As a registered management investment company, each Trust is subject to a variety of risks, including investment risks, financial risks, compliance risks and regulatory risks. As part of its overall activities, the Post-Closing Boards are expected to oversee the management of each Trust’s risk management structure by each Trust’s investment adviser, administrator, distributor, transfer agent, officers and others. It is anticipated that the responsibility to manage the Funds’ risk management structure on a day-to-day basis will be subsumed within the other responsibilities of these parties.

Subject to consideration and approval by the Post-Closing Boards, the Post-Closing Boards will consider risk management issues as part of their general oversight responsibilities throughout the year at regular meetings of the Post-Closing Boards and their committees, and within the context of any ad hoc communications with each Trust’s service providers and officers. It is expected that each Trust’s investment adviser, administrator, distributor, transfer agent, officers and legal counsel will prepare regular reports to the relevant Post-Closing Board that address certain investment, valuation, compliance and other matters, and it is expected that such Post-Closing Board as a whole or its committees will also receive special written reports or presentations on a variety of risk issues at the request of such Post-Closing Board, a committee, its chairman or a senior officer.

 

17

The Post-Closing Boards will receive regular written reports describing and analyzing the investment performance of the Funds. In addition, it is anticipated that the portfolio managers of the Funds will meet with the applicable Post-Closing Board periodically to discuss portfolio performance and answer the applicable Post-Closing Board’s questions with respect to portfolio strategies and risks. To the extent that a Fund changes a primary investment strategy, it is expected that the applicable Post-Closing Board would be consulted in advance with respect to such change.

Each Post-Closing Board will receive regular written reports from each Trust’s Chief Financial Officer that would enable such Post-Closing Board to monitor the number of fair valued securities in the Funds’ portfolios, the reasons for the fair valuation and the methodology used to arrive at the fair value. Such reports would also include information concerning illiquid securities within the Funds’ portfolios. It is expected that each Post-Closing Board and/or its audit committee will also review valuation procedures and pricing results with the Funds’ independent auditors in connection with the review of the results of the audit of the Funds’ year-end financial statements.

Each Post-Closing Board will also receive regular compliance reports prepared by the compliance staff of Virtus and its affiliates and meet regularly with each Trust’s CCO to discuss compliance issues, including compliance risks. As required under applicable rules, the Independent Trustees of the Post-Closing Boards will meet regularly in executive session with each Trust’s CCO, and the CCO will prepare and present an annual written compliance report to each Post-Closing Board. Each Trust’s CCO, as well as the compliance staff of Virtus, will provide the respective Post-Closing Board with reports on certain examinations of functions and processes within the compliance staff of Virtus that might affect the Funds. It is expected that each Post-Closing Board will also adopt compliance policies and procedures for its Trust and approve such procedures for the Trust’s service providers. It is further expected that such compliance policies and procedures will be specifically designed to detect and prevent violations of the federal securities laws.

In its annual review of the Funds’ advisory and distribution agreements, it is anticipated that each Post-Closing Board will review information provided by Virtus and the Funds’ distributor relating to their operational capabilities, financial conditions and resources. Each Post-Closing Board is expected to also discuss particular risks that are not addressed in its regular reports and processes.

Each Post-Closing Board will recognize that it is not possible to identify all of the risks that may affect the Funds or to develop processes and controls to eliminate or mitigate their occurrence or effects. The Post-Closing Boards will review periodically the effectiveness of their oversight of the Funds [and the other funds in the Funds Complex (as such term is defined in the instructions to Form N-1A),] and the processes and controls in place to limit identified risks. Each Post-Closing Board might, at any time and in its discretion, change the manner in which it conducts its risk oversight role.

Securities Ownership

As of [August 31], 2020, to the best knowledge of each Trust, the [Trustees, Nominees] and officers as a group owned less than 1% of the outstanding shares of each class of the Funds, except as set forth below.

 

Fund

    Class    Percent of Class Beneficially Owned  

[    ]

    [    ]      [     ]% 

 

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As of [August 31], 2020 to the best knowledge of each Trust, each of the Trustees, Nominees and named executive officers owned less than 1% of the outstanding shares of each class of the Funds, except as set forth below.

 

Name

    Fund   Share Class     Amount of
Shares
Owned		   Percentage
of Share
Class		  

[    ]

    [    ]     [     ]    [    ]     [     ]% 

For each Trustee and Nominee, the following table discloses the dollar range of equity securities beneficially owned by the Trustee or Nominee in each Fund overseen or to be overseen and, on an aggregate basis, in any registered investment companies overseen or to be overseen by the Trustee or Nominee within the Trusts’ family of investment companies, as of [August 31], 2020. The dollar ranges used in the table are: (i) None; (ii) $1-$10,000; (iii) $10,001-$50,000; (iv) $50,001-$100,000; and (v) Over $100,000. The following table includes securities in which a Nominee holds an economic interest through the deferred compensation plan described below.

Securities Ownership as of [August 31], 2020

 

Name

    Dollar Range of Equity
Securities in the Funds		      Aggregate Dollar Range of Equity
Securities in Funds Overseen or
to be Overseen by Trustee or
Nominee in Fund Complex		  

Nominees

      

Donald C. Burke(2)

      [    ]        [    ]  

Sarah E. Cogan(1)(2)

      [    ]        [    ]  

Deborah A. DeCotis(1)(2)

      [    ]        [    ]  

F. Ford Drummond(1)(2)

      [    ]        [    ]  

Sidney E. Harris(2)

      [    ]        [    ]  

John R. Mallin (2)

      [    ]        [    ]  

Connie D. McDaniel(2)

      [    ]        [    ]  

Phillip R. McLoughlin(2)

      [    ]        [    ]  

Geraldine M. McNamara(2)

      [    ]        [    ]  

James M. Oates(2)

      [    ]        [    ]  

R. Keith Walton(2)

      [    ]        [    ]  

Brian T. Zino(2)

      [    ]        [    ]  

George R. Aylward(3)

      [    ]        [    ]  

Trustees(4)

      

James A. Jacobson(1)(2)

      [    ]        [    ]  

Hans W. Kertess(1)(2)

      [    ]        [    ]  

James S. MacLeod(1)(2)

      [    ]        [    ]  

William B. Ogden IV(1)(2)

      [    ]        [    ]  

Alan Rappaport(1)(2)

      [    ]        [    ]  

Davey S. Scoon(1)(2)

      [    ]        [    ]  

Thomas J. Fuccillo(1)(3)

      [    ]        [    ]  

Erick R. Holt(1)(3)

      [    ]        [    ]  

 

(1)

Current Trustee.

(2)

Independent Trustees or Disinterested Nominees, as applicable.

(3)

Interested Trustees or Interested Nominees, as applicable.

(4)

Includes all Trustees other than those Trustees that are Nominees.

 

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The Nominees and their immediate family members did not beneficially own any securities in an investment adviser or principal underwriter of the Trusts, or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment adviser or principal underwriter of the Trusts, as of [August 31], 2020.

Trustees’ Compensation

The following table sets forth information regarding compensation received by the Independent Trustees as of December 31, 2019. (Trustees who are interested persons of the Trusts and officers of the Trusts receive no compensation from the Trust).

 

Name of Trustee

    Aggregate
Compensation
from Trusts(1)		      Pension or
Retirement
Benefits
Accrued as Part
of Trust
Expenses		      Estimated Annual
Benefits Upon
Retirement		      Total Compensation
from Trust and
Fund Complex Paid
to Trustees for
Calendar
Year Ended
December 31, 2019(1)(2)		  

Deborah A. DeCotis

    $ 206,135      $ 0      $ 0      $ 535,000  

F. Ford Drummond

      210,521        0        0        240,000  

James S. MacLeod

      214,907        0        0        245,000  

Davey S. Scoon

      205,935        0        0        235,000  

James A. Jacobson

      228,065        0        0        535,000  

Hans W. Kertess

      206,135        0        0        460,000  

William B. Ogden, IV

      210,521        0        0        465,000  

Alan Rappaport

      271,923        0        0        535,000  

Sarah E. Cogan

      218,907        0        0        470,000  

 

(1)

All compensation figures in this table include payments deferred by Trustees for the relevant period. As of December 31, 2019, the total amount of deferred compensation accrued and outstanding across the Fund Complex (relating to deferrals during the calendar year ended December 31, 2019 and any prior years) was as follows: Drummond $3,107,672, MacLeod $208,531, Rappaport $1,238,551 and Scoon $1,515,365.

(2)

In addition to the Funds, which are managed by AllianzGI U.S., during each Fund’s most recently completed fiscal year, each of Mses. Cogan and DeCotis and Messrs. Kertess, Jacobson, Ogden and Rappaport served as trustees of PIMCO Funds, which are managed by PIMCO. The Funds and the PIMCO Funds are considered to be in the same Fund Complex as the Funds. Ms. Cogan and Messers. Kertess, Jacobson, Ogden and Rappaport currently serve as trustee or director of 83 funds in the Fund Complex, including the PIMCO Funds. Ms. DeCotis currently serves as trustee or director of 84 funds in the Fund Complex. For the calendar year ended December 31, 2019, amounts received by these Trustees from Allianz-Sponsored Funds were: for Mr. Jacobson, $260,000; for Ms. DeCotis, $235,000; and for Messrs. Kertess, Ogden and Rappaport, $235,000, $240,000 and $310,000, respectively. These amounts are included in the Fund Complex totals in the table above.

[Certain Material Interests of Nominees]

Shareholder Communications with the Boards of Trustees

Current Board of Trustees

Each Board has adopted procedures by which Shareholders may send communications to the Board. Shareholders may mail written communications to each Board to the attention of the Board, c/o Angela Borreggine, Chief Legal Officer, Allianz Global Investors U.S. LLC, 1633 Broadway, New York, New York 10019. Shareholder communications should identify (i) the Shareholder, (ii) the Fund or Funds that they are writing about, (iii) the firm through which the Shareholder purchased the Fund or Funds and (iv) the share class they own (if known).

These procedures do not apply to any communication from an officer or Trustee or any communication from any employee or agent of a Trust, unless such communication is made solely in such employee’s or agent’s capacity as a Shareholder, but do apply to any Shareholder proposal submitted pursuant to Rule 14a-8 under the Exchange Act, or any communication made in connection with such a proposal.

 

20

Each Board has designated the applicable Trust’s President, or his designee (which may or may not be an officer of the Trust), as the designated representative to attend the Meeting.

Anticipated Board of Trustees Post-Closing

The Post-Closing Board is expected to adopt procedures by which Shareholders may send communications to the Board that are substantially similar to the current procedures. However, Shareholders are expected to be directed to mail written communications to the Board in care of the applicable Trust’s Secretary, at One Financial Plaza, Hartford, Connecticut 06103.

Trustee Indemnification

Each Declaration of Trust provides that the particular Trust will indemnify its Trustees and officers against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with the Trust, except with respect to any matter as to which it has been determined that (i) they have not acted in good faith in the reasonable belief that their actions were in or were not opposed to the best interests of the Trust, or (ii) such indemnification would relieve any officer or Trustee of any liability to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties. Each Declaration of Trust also provides for the advancement of defense expenses in certain circumstances and for indemnification in the event of settlement, provided that a quorum of the Independent Trustees finds, or independent legal counsel opines, that the person seeking indemnification acted in accordance with the standard above. The Bylaws of each Trust provide that such finding or opinion may be based upon a rebuttable presumption that the person seeking indemnification neither has engaged in willful misfeasance, nor has acted in bad faith, with gross negligence or in reckless disregard of his or her duties. The Trustees and officers of each Trust are covered by liability insurance.

Information about the Trusts, including certain information about AllianzGI U.S., the principal underwriter and administrator, independent registered public accounting firm, executive officers and the interests of certain persons appears below under “Section VII — Trust Information.”

Required Vote

The proposal requires a vote by the Shareholders of each Trust. Shareholders of each Trust, including each Fund and class of shares thereof, will vote collectively as a single class, but separately from the other Trust, on the election of each Nominee to the particular Trust’s Board. The election of each Nominee must be approved by a vote of a plurality of the relevant Trust’s shares voted at the Meeting telephonically or by proxy. The outcome of the proposal for one Trust will not impact the outcome of the proposal for the other Trust. This Proposal 1 is contingent upon Proposals 2 and 3 receiving sufficient Shareholder support for AllianzGI U.S. and Virtus to proceed with the Closing of the Transition. Therefore, no changes to the Trustees of the Trusts would be made if the Closing does not occur.

THE BOARD OF TRUSTEES OF EACH TRUST UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE TRUSTS AND THEIR FUNDS VOTE FOR EACH NOMINEE.

 

21

II. APPROVAL OF THE PROPOSED INVESTMENT ADVISORY AGREEMENTS

Introduction

As noted previously, the Boards of the Trusts have considered an arrangement pursuant to which Virtus will serve as the new investment adviser to the AF Continuing Funds and MST Continuing Funds (each as defined below) upon consummation of the Transition.

The following Funds constitute the “AF Continuing Funds” and are divided between the “AllianzGI-Subadvised AF Continuing Funds” and the “Value Equity AF Continuing Funds”:

AF Continuing Funds

AllianzGI-Subadvised AF Continuing Funds

AllianzGI Emerging Markets Opportunities Fund

AllianzGI Focused Growth Fund

AllianzGI Global Small-Cap Fund

AllianzGI Health Sciences Fund

AllianzGI Income & Growth Fund

AllianzGI Mid-Cap Fund

AllianzGI Small-Cap Fund

AllianzGI Technology Fund

Value Equity AF Continuing Funds

AllianzGI Dividend Value Fund

AllianzGI International Value Fund

AllianzGI Large-Cap Value Fund

AllianzGI Mid-Cap Value Fund

AllianzGI Small-Cap Value Fund

The following Funds constitute the “MST Continuing Funds” and are divided between the “AllianzGI-Subadvised MST Continuing Funds” and the “Value Equity MST Continuing Funds”:

MST Continuing Funds

AllianzGI-Subadvised MST Continuing Funds

AllianzGI Convertible Fund

AllianzGI Core Plus Bond Fund

AllianzGI Emerging Markets Consumer Fund

AllianzGI Global Allocation Fund

AllianzGI Global Dynamic Allocation Fund

AllianzGI Global Sustainability Fund

AllianzGI High Yield Bond Fund

AllianzGI International Small-Cap Fund

AllianzGI Preferred Securities and Income Fund

AllianzGI Short Duration High Income Fund

AllianzGI Water Fund

 

22

Value Equity MST Continuing Funds

AllianzGI Emerging Markets Value Fund

Shareholders of the AF Continuing Funds and MST Continuing Funds are being asked to approve the proposed investment advisory agreement with Virtus (this Proposal 2); Shareholders of the AllianzGI-Subadvised AF Continuing Funds and the AllianzGI-Subadvised MST Continuing Funds are being asked to approve a new Subadvisory Agreement with AllianzGI U.S. (Proposal 3A); and (iii) Shareholders of the Value Equity AF Continuing Funds and the Value Equity MST Continuing Funds are being asked to approve a new Subadvisory Agreement with the Virtus Value Equity Subadviser (Proposal 3B).

As described above, Proposals 1 through 4 are each contingent on sufficient Shareholder support for AllianzGI U.S. and Virtus to proceed with the Closing of the Transition. The Proposals for the approval of contracts (Proposals 2 and 3) are contingent on one another. Additionally, no approved contracts will be executed to terminate the current management/advisory arrangements until sufficient approvals are received to prompt the Closing of the Transition. If the Shareholders of some Funds do not approve these Proposals, but AllianzGI U.S. and Virtus proceed to Closing, the Trustees will take such further action as they may deem to be in the best interests of the Shareholders of the relevant Funds for which the votes failed, with one possible outcome being the liquidation and termination of those Funds.

The Boards’ and AllianzGI U.S.’s Rationale for the Proposal

Background. While AllianzGI U.S. has served the Trusts well for many years, it has determined to exit the U.S. fund business except in its role as subadviser. AllianzGI U.S. believes the proposal to replace AllianzGI U.S. with Virtus as each Trust’s investment adviser and for affiliates of Virtus to assume responsibility for administrative services for each Trust will enhance the Continuing Funds’ growth opportunities, expanding the Continuing Funds’ access and presence in the U.S. retail markets. The combination of AllianzGI U.S.’s portfolio management expertise with Virtus’ investment oversight, retail distribution, and administration capabilities is intended to result in mutually beneficial growth.

Operational and Administrative Efficiencies. The Boards and AllianzGI U.S. believe that each Continuing Fund’s Shareholders will benefit by moving to a combined management structure due, in part, to the operational and administrative efficiencies that are expected to result from the Transition. In coming to this conclusion, the Boards and AllianzGI U.S. considered, among other things, the following factors:

 

  •  

Virtus offers the Continuing Funds an integrated set of high-quality investment management, administrative and distribution/aftermarket support services under a single platform, which each Board and AllianzGI U.S. believe will allow for greater efficiencies, operational economies of scale and enhanced coordination among various investment management and administrative functions.

 

  •  

Virtus provides comprehensive and quality fund services; strong legal and compliance controls; and greater scale, leverage and negotiating power with service providers.

 

  •  

Virtus Fund Services, LLC, which is the fund administrator affiliated with Virtus provides administrative services for approximately $44 billion in assets (as of July 31, 2020), including in open-end funds and closed-end funds which, like the Continuing Funds, are U.S. registered investment companies.

 

  •  

Virtus has substantial prior experience in the administration of U.S. registered open-end funds.

 

  •  

The same investment professionals who are currently responsible for managing each Continuing Fund’s portfolios will continue to do so following the Transition, and each Trust will continue to have the same investment objective(s) and policies following the Transition.

Description of the Current Investment Management Agreements

AllianzGI U.S. currently serves as the investment manager for each MST Continuing Fund pursuant to an Investment Management Agreement and as the investment adviser and administrator for each Allianz Funds’

 

23

Continuing Fund pursuant to an Investment Advisory Agreement (the “Current IMA(s)”). The Board of each Trust, including a majority of the Independent Trustees, most recently approved the continuation of each Trust’s Current IMA on June 25, 2020. The following chart provides the date of the Current IMA with respect to each Continuing Fund and the date such agreement was last submitted to such Continuing Fund’s Shareholders for approval.

 

Allianz Funds Multi-Strategy Trust

   

Date of Current
Agreement

   

Date Submitted to
Shareholders

AllianzGI Convertible Fund

    December 11, 2017    April 9, 2010

AllianzGI Core Plus Bond Fund

    December 11, 2017    March 6, 2018

AllianzGI Emerging Markets Consumer Fund

    December 11, 2017    November 25, 2014

AllianzGI Emerging Markets Value Fund

    December 11, 2017    December 18, 2012

AllianzGI Global Allocation Fund

    December 11, 2017    May 1, 2009

AllianzGI Global Dynamic Allocation Fund

    December 11, 2017    April 27, 2009

AllianzGI Global Sustainability Fund

    December 11, 2017    November 25, 2014

AllianzGI High Yield Bond Fund

    December 11, 2017    April 9, 2010

AllianzGI International Small-Cap Fund

    December 11, 2017    April 9, 2010

AllianzGI Preferred Securities and Income Fund

    December 11, 2017    March 6, 2018

AllianzGI Short Duration High Income Fund

    December 11, 2017    October 3, 2011

AllianzGI Water Fund

    December 11, 2017    March 31, 2008

 

(1)

Last submitted to the Fund’s sole shareholder with the organization of the Trust.

(2)

Last submitted to the Fund’s sole initial shareholder in connection with the Fund’s organization.

 

Allianz Funds

   

Date of Current
Agreement

   

Date Submitted to
Shareholders

AllianzGI Dividend Value Fund

    October 1, 2016    [    ]

AllianzGI Emerging Markets Opportunities Fund

    October 1, 2016    [    ]

AllianzGI Focused Growth Fund

    October 1, 2016    [    ]

AllianzGI Global Small-Cap Fund

    October 1, 2016    [    ]

AllianzGI Health Sciences Fund

    October 1, 2016    [    ]

AllianzGI Income & Growth Fund

    October 1, 2016    February 28, 2011

AllianzGI International Value Fund

    October 1, 2016    November 2, 2009

AllianzGI Large-Cap Value Fund

    October 1, 2016    [    ]

AllianzGI Mid-Cap Fund

    October 1, 2016    April 2, 2012

AllianzGI Mid-Cap Value Fund

    October 1, 2016    February 28, 2011

AllianzGI Small-Cap Fund

    October 1, 2016    November 2, 2009

AllianzGI Small-Cap Value Fund

    October 1, 2016    [    ]

AllianzGI Technology Fund

    October 1, 2016    [    ]

 

(1)

Last submitted to the Fund’s sole shareholder with the organization of the Trust.

(2)

Last submitted to the Fund’s sole initial shareholder in connection with the Fund’s organization.

 

 

24

Services. Under the terms of each Current IMA, AllianzGI U.S., subject to the supervision of the Board, is obligated to furnish continuously an investment program for the Continuing Funds, to make investment decisions on behalf of the Continuing Funds, to place all orders for the purchase and sale of portfolio securities, and to provide administrative services reasonably necessary for the operation of the Continuing Funds, including but not limited to furnishing office space and equipment, providing bookkeeping and clerical services (excluding determination of net asset value and Shareholder accounting services) and paying all salaries, fees and expenses of the officers and Trustees of the Continuing Funds who are affiliated with AllianzGI U.S. Each Current IMA provides that AllianzGI U.S. may alternatively, at its expense, select and contract with portfolio managers to perform investment management services for the Continuing Funds, in which case the obligation of AllianzGI U.S. under the Current IMA with respect to the investment management of a Continuing Fund is to determine and review with the portfolio manager the investment policies of the Continuing Fund. In such cases, the portfolio manager shall have the obligation of furnishing continuously an investment program, making investment decisions and placing trades for the Continuing Fund, adhering to applicable investment objectives, policies and restrictions, and placing all orders for the purchase and sale of portfolio securities and other investments for the Continuing Fund. AllianzGI U.S. (and not the Continuing Fund) is responsible for compensating any such portfolio manager under the Current IMAs.

Compensation. As compensation for AllianzGI U.S.’s services rendered, and for the facilities furnished and for the expenses borne by AllianzGI U.S., each Continuing Fund pays AllianzGI U.S. a management fee under the applicable Current IMA. The management fees are accrued daily and paid monthly.

 

Allianz Funds Multi-Strategy Trust

    Annual Management
Fee Rate Under the
MST Investment
Management
Agreement (1)		  

AllianzGI Convertible Fund

      0.57 % 

AllianzGI Core Plus Bond Fund

      0.30 % 

AllianzGI Emerging Markets Consumer Fund

      0.85 % 

AllianzGI Emerging Markets Value Fund

      0.85 % 

AllianzGI Global Allocation Fund

      0.70 % 

AllianzGI Global Dynamic Allocation Fund

      0.70 % 

AllianzGI Global Sustainability Fund

      0.80 % 

AllianzGI High Yield Bond Fund

      0.48 % 

AllianzGI International Small-Cap Fund

      1.00 % 

AllianzGI Preferred Securities and Income Fund

      0.45 % 

AllianzGI Short Duration High Income Fund

      0.48 % 

AllianzGI Water Fund

      0.95 % 

 

  (1) 

Management fees are set at an annualized rate based on the average daily net assets of each MST Continuing Fund.

 

Allianz Funds

    Annual Management
Fee Rate Under the
Allianz Funds
Investment
Advisory
Agreement (1) (2)		  

AllianzGI Dividend Value Fund

      0.45 % 

AllianzGI Emerging Markets Opportunities Fund

      0.85 % 

AllianzGI Focused Growth Fund

      0.45 % 

AllianzGI Global Small-Cap Fund

      0.90 % 

 

25

AllianzGI Health Sciences Fund

      0.80 % 

AllianzGI Income & Growth Fund

      0.65 % 

AllianzGI International Value Fund

      0.60 % 

AllianzGI Large-Cap Value Fund

      0.45 % 

AllianzGI Mid-Cap Fund

      0.47 % 

AllianzGI Mid-Cap Value Fund

      0.60 % 

AllianzGI Small-Cap Fund

      0.60 % 

AllianzGI Small-Cap Value Fund

      0.60 % 

AllianzGI Technology Fund

      0.90 % 

 

  (1) 

Management fees are set at an annualized rate based on the average daily net assets of each Allianz Funds’ Continuing Fund.

  (2)

Management fees rates provided here for Allianz Funds only account for fees attributable to advisory services under the unitary fee structure.

In addition to the investment management fees paid by each Continuing Fund under its Current IMA as described above, MST currently directly bears expenses for other administrative services and costs outside of its Current IMA, including expenses associated with various third-party service providers, such as audit, custodial, legal, transfer agency, printing and other services required by the Continuing Funds. The fees and expenses for these services are currently included in each Continuing Fund’s total expenses and are borne by the Common Shareholders of the Continuing Fund.

Each of the Allianz Funds pays for the advisory and administrative services it requires under what is essentially an all-in or unitary fee structure. While each Continuing Fund pays a fee under separate agreements for the advisory and administrative services it requires, these services are provided in a “suite of services” structure. AllianzGI U.S., as the investment manager and administrator, provides both the advisory and administrative services to the Continuing Funds. Although provided under separate agreements, together these services are essential to the daily operations of the Continuing Funds.

Term/Termination/Amendment. Each Current IMA took full force and effect as to the applicable Continuing Fund for an initial two-year period, and has been subject thereafter to annual approval in accordance with the 1940 Act (i.e., approval by the Board of Trustees, or a majority of the Continuing Fund’s outstanding voting securities and, in either event, by the vote cast in person by a majority of the Independent Trustees). Each Current IMA can also be terminated without penalty at any time (i) by the applicable Continuing Fund (either by vote of a majority of the Continuing Fund’s outstanding voting securities or by vote of a majority of Trustees); or (ii) by AllianzGI U.S., in each case on 60 days’ written notice delivered to the other party. Additionally, each Current IMA terminates automatically in the event of its assignment (as defined in the 1940 Act). A Current IMA may not be materially amended unless such material amendment is approved at a meeting by the affirmative vote of a majority of the outstanding voting securities of the applicable Continuing Fund, and by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Independent Trustees of the applicable Continuing Fund.

If the Proposal is approved with respect to a Continuing Fund, the Trust’s Current IMA will be terminated with respect to that Continuing Fund in connection with the effectiveness of the Continuing Fund’s proposed investment advisory agreements (“Proposed Investment Advisory Agreements”).

Liability. Each Current IMA provides that, in the absence of willful misfeasance, bad faith or gross negligence on the part of AllianzGI U.S., or reckless disregard of its obligations and duties under the applicable Current IMA, AllianzGI U.S., including its officers, directors and partners, will not be subject to any liability to the applicable Continuing Fund, or to any Shareholder, officer, partner or Trustee/Director thereof, for any act or omission in the course of, or in connection with, rendering services under such Current IMA.

 

26

Description of the Proposed Investment Advisory Agreements

At meetings held via live webcast on August 27 and 31, 2020, the Board of each Trust, including the Independent Trustees, unanimously approved, subject to the approval of the Shareholders of the applicable Trust, the Proposed Investment Advisory Agreement(s) between Virtus and each Trust, a form of which is attached to this Proxy Statement as Appendix B. The description of the Proposed Investment Advisory Agreements below is qualified in its entirety by reference to the actual terms of the form of agreement in Appendix B.

Services. Pursuant to the Proposed Investment Advisory Agreements, Virtus shall provide to each Trust the below investment management services:

 

  •  

Investment research, advice and supervision;

 

  •  

An investment program for the Continuing Funds under each Trust

 

  •  

consistent with their investment objectives, policies and procedures; and

 

  •  

designed to manage cash, cash equivalents and short-term investments for each such Continuing Fund with respect to assets designated from time to time to be managed by a sub-adviser to each such Continuing Fund

 

  •  

Determinations as to Continuing Fund assets’ liquidity and monitor assets that are not liquid;

 

  •  

Advice and assistance on the general operations of the Trust; and

 

  •  

Regular reports to the Trustees on the implementation of each Continuing Fund’s investment program.

Virtus will also furnish at its own expense, or pay the expenses of each Trust for, the following:

 

  •  

Office facilities, including office space, furniture and equipment;

 

  •  

Personnel necessary to perform the functions required to manage the investment and reinvestment of each Continuing Fund’s assets (including those required for research, statistical and investment work);

 

  •  

Except as otherwise approved by the Board, personnel are to serve without direct compensation from the Trust as officers or agents of each Trust. Virtus need not provide personnel to perform, or pay the expenses of each Trust for, services customarily performed for an open-end management investment company by its national distributor, custodian, financial agent, transfer agent, registrar, dividend disbursing agent, auditors and legal counsel;

 

  •  

Compensation and expenses, if any, of the Trustees who are also affiliated persons of Virtus or any of its affiliated persons; and

 

  •  

Any sub-adviser recommended by the Virtus and appointed to act on behalf of each Trust.

Compensation. Under the Proposed Investment Advisory Agreements, as compensation for Virtus’s services rendered, and for the facilities furnished and for the expenses borne by Virtus, each Continuing Fund will pay Virtus an advisory fee, accrued daily and paid monthly, at the rates set forth below. These rates mirror the investment management/advisory rates described above under the Current IMAs.

 

27

Allianz Funds Multi-Strategy Trust

    Annual Management
Fee Rate Under each
Proposed Investment
Advisory Agreement (1)

AllianzGI Convertible Fund

    0.57%

AllianzGI Core Plus Bond Fund

    0.30%

AllianzGI Emerging Markets Consumer Fund

    0.85%

AllianzGI Emerging Markets Value Fund

    0.85%

AllianzGI Global Allocation Fund

    0.70%

AllianzGI Global Dynamic Allocation Fund

    0.70%

AllianzGI Global Sustainability Fund

    0.80%

AllianzGI High Yield Bond Fund

    0.48%

AllianzGI International Small-Cap Fund

    1.00%

AllianzGI Preferred Securities and Income Fund

    0.45%

AllianzGI Short Duration High Income Fund

    0.48%

AllianzGI Water Fund

    0.95%

 

  (1) 

Management fees are set at an annualized rate based on the average daily net assets of each MST Continuing Fund.

 

Allianz Funds

    Annual Management
Fee Rate Under each
Proposed Investment
Advisory Agreement (1)

AllianzGI Dividend Value Fund

    0.45%

AllianzGI Emerging Markets Opportunities Fund

    0.85%

AllianzGI Focused Growth Fund

    0.45%

AllianzGI Global Small-Cap Fund

    0.90%

AllianzGI Health Sciences Fund

    0.80%

AllianzGI Income & Growth Fund

    0.64%

AllianzGI International Value Fund

    0.60%

AllianzGI Large-Cap Value Fund

    0.45%

AllianzGI Mid-Cap Fund

    0.47%

AllianzGI Mid-Cap Value Fund

    0.55%

AllianzGI Small-Cap Fund

    0.60%

AllianzGI Small-Cap Value Fund

    0.60%

AllianzGI Technology Fund

    0.90%

 

  (1) 

Management fees are set at an annualized rate based on the average daily net assets of each Allianz Funds’ Continuing Fund.

Comparison of Current IMAs and the Proposed Investment Advisory Agreements.

Fees and Expenses.

The tables in Appendix C set forth the total annual expenses incurred by each Continuing Fund during the its most recent fiscal year (expressed as a percentage of net assets) and estimates of the pro forma total annual expenses that each Continuing Fund would have incurred during the same period if the Proposed Investment Advisory Agreement had been in place. With respect to the series of Allianz Funds, the tables illustrate that the investment advisory fees under the Proposed Investment Advisory Agreement would be lower than the management fees currently payable by the series of Allianz Funds under its unitary fee structure, while the “Other Expenses” payable under the Current IMA would be higher if those Continuing Funds were operating under the Proposed Investment Advisory Agreement because each such Fund’s administrative services, which are currently paid by AllianzGI U.S. out of the unitary fee, would be included in “Other Expenses” under the Proposed Investment Advisory Agreement in which administrative services are provided under a separate agreement. The fees payable under the Proposed Investment Advisory Agreement, when added to the administration fee, are expected to result in most of the series of Allianz Funds having lower total expenses before fee waivers or expense reimbursements paid by Shareholders than under the Current IMA, as indicated in the tables. The tables also illustrate that the investment advisory fees under the Proposed Investment Advisory Agreement applicable to the series of MST would be the same as the management fees currently payable by the series of MST under the Current IMA, while the “Other Expenses” for most such Continuing Funds would be

 

28

the same as or lower than under the Current IMA if they were operating under the Proposed Investment Advisory Agreement. The fees payable under the Proposed Investment Advisory Agreement, when added to the administration fee, are expected to result in most of the series of MST having total expenses before fee waivers or expense reimbursements that are the same as or lower than under the Current IMA, as indicated in the tables. Virtus has also agreed to contractually limit each Continuing Fund’s expenses for two years from the date the Proposed Investment Advisory Agreement is effective, so that each Continuing Fund’s net total expenses do not exceed the Continuing Fund’s net total expenses immediately before such effectiveness.

The Proposed Investment Advisory Agreement is substantially similar to the Current IMA, except that Virtus will not provide administrative functions under the Proposed Investment Advisory Agreement for the Continuing Funds. Virtus Fund Services (“VFS”) would provide corresponding services to the Continuing Funds as the Continuing Funds’ administrator and would also act as the Continuing Funds’ transfer agent under the new combined management structure. Any material differences between the Proposed Investment Advisory Agreements and the Current IMAs are described below. The following is intended to be an overview and is not intended to be a comprehensive description of all of the Proposed Investment Advisory Agreements’ terms.

Material Differences in Compensation. Under both the Current IMAs and the Proposed Investment Advisory Agreements, each Trust pays a monthly fee to the Adviser based on the average daily net assets of each Continuing Fund. With respect to the series of Allianz Funds, the investment advisory fees under the Proposed Investment Advisory Agreement are lower than the management fees currently payable by the Continuing Funds under the Current IMA, because the Current IMA contemplates a unitary fee structure in which the Continuing Funds pay AllianzGI a single fee out of which AllianzGI is compensated for investment advisory and administrative functions and pays third party service providers. An affiliate of Virtus is expected to be paid administration and transfer agency fees under separate agreements, so a portion of the decrease in management fees is expected to shift to “Other Expenses” rather than being eliminated. However, eliminating the unitary fee structure is expected to result in most of the series of Allianz Funds having lower total expenses before waivers or reimbursement than they do under the Current IMA, and Virtus has separately agreed to contractually limit each Continuing Fund’s expenses for two years from the date the Proposed Investment Advisory Agreement is effective, so that each Continuing Fund’s net total expenses do not exceed the Continuing Fund’s net total expenses immediately before such effectiveness. With respect to the series of MST, each Continuing Fund will pay Virtus an advisory fee equal to the management fee it currently pays under the applicable Current IMA. The management and advisory fees are accrued daily and paid monthly.

Material Differences in Other Terms. The Proposed Investment Advisory Agreements will be governed under the laws of Massachusetts and any suit, action or proceeding brought by any Shareholder would be brought exclusively in the courts of Massachusetts, whereas the Current IMAs either fall under California law or do not otherwise specify. The Proposed Investment Advisory Agreements also include a confidentiality clause whereby parties to the agreement shall treat all information and actions pertaining to the Continuing Funds as confidential. There are no confidentiality provisions under the Current IMAs.

Virtus Fund Comparisons. Although Virtus manages other open-end and closed-end funds, Virtus does not manage any other funds or accounts that it has determined are substantially similarly to the Continuing Funds, which is one reason it has pursued a strategic partnership with AllianzGI U.S.

 

29

Effective Date. If the Proposed Investment Advisory Agreements are approved by Shareholders, they will take effect with respect to the applicable Trust concurrent with the termination of the Current IMAs. The actual effective date of the Proposed Investment Advisory Agreements for each Trust will be at a date and time mutually agreeable to the Continuing Funds, Virtus and AllianzGI U.S. in order to effect an efficient transition for the Continuing Funds and their Shareholders.

Term/Termination/Amendment. The Proposed Investment Advisory Agreements, if approved by Shareholders, will remain in full force and effect as to each Continuing Fund, unless sooner terminated by such Continuing Fund, for an initial two year period and shall continue thereafter on an annual basis with respect to each Continuing Fund provided that such continuance is specifically approved at least annually (i) by either the Trustees or a vote of the majority of the outstanding voting securities (as defined in the 1940 Act) of each Fund; and (ii) the terms and any continuation of the Proposed Investment Advisory Agreements have been approved by a majority of the Trustees who are not parties or interested persons to each agreement, in a vote cast in person at a meeting called for such purpose (or otherwise, as consistent with applicable laws, regulations and related guidance and relief). It can also be terminated with respect to a Fund at any time on 60 days’ written notice to Virtus, or by Virtus on 60 days’ written notice to the Trust, without the payment of any penalty, by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of a Fund or by a vote of the Trustees. Additionally, the Proposed Investment Advisory Agreements will terminate automatically in the event of their assignment (as defined in the 1940 Act). The Proposed Investment Advisory Agreements may be amended from time to time to add new Funds upon the agreement in writing of the applicable Trust and Virtus.

Liability. The Proposed Investment Advisory Agreements provide that Virtus shall not be liable to either Trust or any Shareholder of each Trust, for any error of judgment or mistake of law or for any loss suffered, except for losses resulting by reason of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of Virtus’s duties under the Proposed Investment Advisory Agreements. Additionally, the Proposed Investment Advisory Agreements do not impose any personal liability upon any of the Trustees, Shareholders, nominees, agents or employees of each Trust.

Boards’ Consideration of the Proposed Investment Advisory Agreements and Subadvisory Agreements with AllianzGI U.S. and Virtus Value Equity Subadviser

The Boards’ Process

The 1940 Act requires that each Board, including a majority of the Independent Trustees, voting separately, approve (1) the Proposed Investment Advisory Agreements with Virtus, on behalf of each Fund, (2) the Subadvisory Agreement for each Continuing Fund that will be subadvised by AllianzGI U.S., and (3) the Subadvisory Agreement for each Continuing Fund that will be subadvised by the Virtus Value Equity Subadviser (collectively, the “Agreements”). At their meeting held on August 31, 2020, the Boards, including the Independent Trustees, unanimously approved the Proposed Investment Advisory Agreements and the applicable Subadvisory Agreements with respect to each Fund.3 Throughout the Boards’ process for reviewing the Agreements, the Independent Trustees received separate legal advice from independent legal counsel that is experienced in 1940 Act matters and that is independent of Virtus, AllianzGI U.S. and the Virtus Value Equity

 

3 

The Boards, including a majority of the Independent Trustees, determined to rely on the relief granted by an exemptive order issued by the U.S. Securities and Exchange Commission (the “SEC”) that permits fund boards of directors to approve advisory contracts at a meeting held remotely rather than in-person in response to the impact of COVID-19 on investment advisers and funds. The Boards determined that reliance on the exemptive order was necessary and appropriate due to circumstances related to current or potential effects of COVID-19, and prior to commencing the approval meeting, the Boards confirmed that all Board members could hear each other simultaneously during the meeting. The Boards noted that they intended to ratify any actions taken at this meeting pursuant to the SEC relief at their next in-person meeting.

 

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Subadviser (“Independent Counsel”), and with whom they met separately throughout the process. In evaluating the Agreements, the Boards, including the Independent Trustees, reviewed extensive materials provided by Virtus and AllianzGI U.S. in response to questions submitted by the Independent Trustees and Independent Counsel. In conducting this review, the Independent Trustees did not identify any particular information that was all-important or controlling, and each Trustee may have attributed different weights to the various factors.

The Boards’ process for reviewing the Agreements consisted of multiple meetings and discussions that included meetings of the Contracts Committees, meetings of the Independent Trustees and Independent Counsel, and meetings of the full Boards, all leading up to the Boards’ consideration of the Agreements. Representatives from Virtus and AllianzGI U.S. participated in portions of those meetings and discussions to review the impact of the Transition on the Funds and report on their personnel, operations, and financial condition, among other topics. The Boards established a separate Subcommittee composed of a subset of the Independent Trustees to address questions as they arose relating to the Boards’ process and consideration of the Agreements, and the Subcommittee held several meetings with Independent Counsel. The Boards also organized separate diligence meetings with personnel from Virtus and AllianzGI U.S., led and attended by each Board Committee Chair relating to each Committee’s responsibilities for the areas relevant for the Boards’ consideration of the Agreements. A purpose of these diligence meetings led by the Committee Chairs was to attempt to address the challenges of not being able to meet with Virtus personnel in person due to COVID-19.

The Boards’ Section 15(c) review of the Current IMAs and continuity of current fee and expense structures and portfolio managers under Agreements

Consideration of the Agreements followed soon after the Boards’ annual consideration of the renewals of the Current IMAs, carried out pursuant to Section 15(c) of the 1940 Act, at the June 2020 Board meeting. At that meeting, the Boards, including a majority of the Independent Trustees, unanimously determined that the Current IMAs were fair and reasonable and that their renewals would be in the best interests of each Fund and its shareholders.

Accordingly, in considering the Proposed Investment Advisory Agreements, the Independent Trustees took into account (1) that the advisory fees for each Fund, including any breakpoints, under the Proposed Investment Advisory Agreements would be identical to those under the Current IMAs, and (2) that the total expenses of each Fund would be capped at current levels for a period of at least two years following the Closing. In considering the Subadvisory Agreements with Allianz GI U.S. and with the Virtus Value Equity Subadviser, respectively, the Independent Trustees considered that, for each Fund, as applicable, that (1) there would be no changes proposed to the personnel providing portfolio management services to the Funds as a result of the Transition, and the portfolio managers would have the benefit of Virtus’ investment and performance oversight; and (2) they had reviewed the performance of each Fund as part of the recent annual Section 15(c) renewals. In connection with the renewal of the Current IMAs at its June 2020 Board meeting, the Boards had reviewed extensive materials provided by AllianzGI U.S. which included, among other items: (1) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”) on the investment performance of a group of funds with substantially similar investment classifications/objectives as each Fund identified by Broadridge and the performance of applicable benchmark indices, (2) information on the management fees and other expenses of comparable funds identified by Broadridge, (3) information regarding the investment performance and management fees of comparable portfolios of other clients of AllianzGI U.S., and (4) descriptions of various functions performed by AllianzGI U.S. for each Fund, such as compliance monitoring and portfolio trading practices. A summary of the factors considered by the Boards in connection with the 2020 annual renewals of the Current IMAs appears in Allianz Funds’ most recent shareholder report, dated June 30, 2020 and will appear in the MST shareholder report dated September 30, 2020.

 

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Overall impact of the Transition on the Continuing Funds; Consideration of the nature and quality of the services and fairness of the Agreements

In evaluating the Agreements, the Independent Trustees considered how the Transition would impact the Continuing Funds and considered the representations from Virtus and AllianzGI U.S. regarding the potential benefits of their strategic partnership with respect to the Continuing Funds. The Independent Trustees inquired whether Virtus and AllianzGI U.S. had specific plans for the future structure of the Continuing Funds, whether they plan to propose to eliminate any Funds, and whether there are plans to change the fees or expense structure of any of the Continuing Funds. The Independent Trustees considered in this regard that following the Transition there were no changes planned to the current organizational structure of each Continuing Fund. They also considered that Virtus had agreed to contractually limit each Continuing Fund’s total operating expenses for all classes of shares so that, on a net basis, such expenses are expected to be equal to or lower than current total expenses for at least two years following the Closing. The Independent Trustees considered, however, that with respect to the expense structure for the series of the Allianz Funds the “unitary” administration fee would be eliminated under the Proposed Investment Advisory Agreements. They considered that under the “unitary” administration fee structure AllianzGI U.S. used that fee to pay for the provision of legal, audit, custody, transfer agency and other services necessary for the ordinary operation of the Funds, and that under the Proposed Investment Advisory Agreements, the AF Continuing Funds would pay for such services directly. In this connection, the Independent Trustees received and reviewed information on a pro forma basis showing the potential impact of this change on the total annual operating expenses for each AF Continuing Fund.

In addition, the Independent Trustees considered the following in connection with their consideration of the Agreements: (1) the nature, extent, and quality of the services expected to be provided by Virtus, AllianzGI U.S. and the Virtus Value Equity Subadviser; and (2) the fairness of the Agreements. With respect to the nature, extent and quality of the services, the Independent Trustees considered the following, among other factors: (1) Virtus’ experience as a manager of managers of the Virtus funds whose portfolios are managed by subadvisers; (2) the experience and education of key Virtus personnel responsible for oversight of the Continuing Funds; (3) the experience of Virtus and its affiliates in providing administrative, distribution and other services, including its oversight of third-party service providers; (4) the quality of the services provided by Virtus and its affiliates to the Virtus funds and the performance history and third-party rankings of those funds; (5) Virtus’s risk management program, including with respect to enterprise, operational and other risks; (6) the growth over time and net flows of the Virtus fund complex and the stated commitment of Virtus to actively promote the sale of shares of the Continuing Funds using their extensive distribution network and relationships with intermediaries; and (7) Virtus’ representations regarding the soundness of Virtus’ financial condition and its relationship to a large financial services enterprise with substantial financial resources.

With respect to the fairness of the Agreements, the Independent Trustees considered the following, among other matters: (1) the projected profitability of Virtus and its affiliates from their potential relationship with each Continuing Fund; (2) the projected profitability of AllianzGI U.S. and Value Equity Subadviser, respectively, as applicable, related to becoming a subadviser to a Continuing Fund; (3) the pro forma expenses of each Continuing Fund following the Transition, including reflecting any proposed changes in service providers to the Continuing Funds, and for each AF Continuing Fund, the move away from the unitary administration fee to a pass-through fee structure; (4) the extent to which economies of scale might be realized as each Continuing Fund grows and any potential reduction in expenses associated with being part of a larger fund complex; (5) whether fee levels reflect any such potential economies of scale for the benefit of investors in each Continuing Fund; and (6) any potential “fall-out” benefits from the relationships of Virtus, AllianzGI U.S. and Virtus Value Equity Subadviser with the Continuing Funds, such as reputational value derived from serving as the adviser or subadviser to the Continuing Funds. In considering the estimate of the projected profitability of Virtus, AllianzGI U.S. and Virtus

 

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Value Equity Subadviser from their relationships with each Continuing Fund, as applicable, the Boards determined that such profitability was not excessive in light of the nature, scope and quality of services expected to be provided.

Recommendations and other factors considered

In unanimously approving and recommending shareholder approval of the Agreements, the Independent Trustees concluded, as considered in the context of AllianzGI U.S.’s representation that it is exiting the U.S. fund business (except as subadviser), that the terms of each Agreement are fair and reasonable and that approval of the Agreements is in the best interests of each Continuing Fund and its shareholders. In reaching these determinations in the exercise of their business judgment, the Independent Trustees considered the following factors, among others, in addition to those noted above:

 

  (1)

the terms of the Proposed Investment Advisory Agreements are substantially similar in all material respects to those of the Current IMAs, with the exception of the move away from the unitary administration fee to a pass-through structure for the AF Continuing Funds;

 

  (2)

the various potential benefits of the Transition to the shareholders of each Continuing Fund, including the potential benefit of access to an enhanced distribution network, which could result in the growth of Continuing Fund assets and economies of scale over time;

 

  (3)

the investment and performance oversight process used by Virtus under its multi-manager model under which it contracts with and oversees affiliated and unaffiliated subadvisers, and its ability to adequately and effectively oversee and perform due diligence on those subadvisers, including AllianzGI U.S. and the Virtus Value Equity Subadviser;

 

  (4)

the structure of the Virtus Value Equity Subdviser as an affiliated manager of Virtus and its access to resources, including Virtus’ investment oversight capabilities, trading and compliance infrastructure;

 

  (5)

the compliance history of Virtus and AllianzGI U.S. and their respective compliance programs, including Virtus’ oversight of the compliance programs of the subadvisers it employs;

 

  (6)

the adequacy of Virtus’ resources to service the Continuing Funds, including its resources with respect to its investment oversight, legal, compliance, valuation, fund administration and accounting functions, and its commitment to add additional resources to support those areas as necessary with the addition of the Continuing Funds to the Virtus fund complex, in connection with and following the Transition;

 

  (7)

there would be no proposed changes to each Continuing Fund’s principal investment objectives and strategies as a direct result of the Transition;

 

  (8)

the performance of the Continuing Funds relative to comparable mutual funds and unmanaged indices, as reviewed during the Boards’ 2020 annual Section 15(c) renewal process;

 

  (9)

the continuity of the portfolio managers for each of the Continuing Funds, the representations from Virtus to AllianzGI U.S. as to the length and terms of the sub-advisory relationship as reflected in the strategic partnership agreement between AllianzGI U.S. and Virtus (the “Strategic Partnership Agreement”), and any impact of the subadvisory arrangements on the retention of those portfolio managers by AllianzGI U.S. or the Virtus Value Equity Subadviser;

 

  (10)

the advisory fees, including breakpoints, under the Proposed Investment Advisory Agreements are identical to those paid under the Current IMAs;

 

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  (11)

the fees and expense ratios of the Continuing Funds relative to comparable mutual funds, as reviewed during the Boards’ 2020 annual Section 15(c) renewal process;

 

  (12)

information provided by AllianzGI U.S. and Virtus regarding the fees and expense ratios of any funds or accounts managed by AllianzGI U.S. or Virtus (if any) using a comparable investment strategy to those of the Continuing Funds;

 

  (13)

the reasonableness of the proposed “fee split” in the advisory and subadvisory fees, including whether the split in the fee appropriately reflects the services provided by Virtus on the one hand, and the services that would be provided by AllianzGI U.S. or the Virtus Value Equity Subadviser, on the other;

 

  (14)

that Virtus has agreed to contractually limit each Continuing Fund’s total operating expenses for all classes of shares so that, on a net basis, such expenses are expected to be equal to or lower than current total expenses for at least two years following the Closing, although the Independent Trustees noted that total operating expenses could increase after that date unless the expense limitation agreement is continued;

 

  (15)

the change from the unitary administration fee for the AF Continuing Funds could result in either an increase or decrease in total annual operating expenses for certain Continuing Funds on a pro forma basis, while taking into account the commitment from Virtus to maintain each Continuing Fund’s current total annual operating expenses of each class for at least two years following the Closing and the potential for additional economies of scale for these administration expenses due to the increase in fund assets managed by Virtus;

 

  (16)

the ability to spread fixed costs over a larger combined asset base among the funds in the Virtus fund complex, which has the potential to result in a reduction in the per share expenses paid by shareholders of each Continuing Fund over the longer term;

 

  (17)

the commitment of Virtus and AllianzGI U.S. to pay the expenses of each Continuing Fund associated with the Transition, including all legal expenses associated with the Transition and the Boards’ approval of the Agreements, as well as the expenses associated with the proxy solicitation, so that shareholders of the Continuing Funds would not have to bear any such expenses;

 

  (18)

the possible benefits that may be realized by each Continuing Fund and by Virtus, AllianzGI U.S. and Virtus Value Equity Subadviser as a result of the Transition, including certain payouts to AllianzGI U.S. based on a percentage of the advisory fees of certain Continuing Funds, as reflected in the Strategic Partnership Agreement;

 

  (19)

AllianzGI U.S.’s communication to the Boards that it is exiting the U.S. fund business (except as a subadviser) and has entered into the Strategic Partnership Agreement with Virtus;

 

  (20)

any impact on Virtus or AllianzGI U.S. or their operations related to the COVID-19 pandemic and the resulting market volatility and the functioning of their business continuity during this time;

 

  (21)

Virtus’ experience with other similar fund adoptions and the related transitions;

 

  (22)

compensation expected to be paid by the Continuing Funds to Virtus affiliates for other services;

 

  (23)

that other proposed changes to the Continuing Funds’ other service providers are not expected to result in any diminution in the quality or extent of the services as compared with the services currently provided to each Continuing Fund and its shareholders;

 

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  (24)

that three of the Independent Trustees will, subject to required approvals, (a) remain on the Boards of Trustees of each Fund in order to maintain the continuity and historical knowledge of those Boards with respect to AllianzGI U.S., the individual Fund strategies, and the portfolio managers of each Fund, among other matters; and (b) be proposed for nomination to the boards of trustees of the open-end funds and certain closed-end funds in the Virtus fund complex in order to realize administrative and cost efficiencies involved with having one unified, integrated board with one set of board meetings as requested and recommended by Virtus and AllianzGI U.S. as part of their strategic alliance; and

 

  (25)

the commitment from Virtus and AllianzGI U.S. that they will refrain from imposing or seeking to impose, for a period of two years after the Closing, any “unfair burden” within the meaning of Section 15(f) of the 1940 Act on the Continuing Funds.

Conclusions

After reviewing these and other factors, the Boards concluded, with respect to each Continuing Fund, within the context of their overall conclusions regarding the Agreements and in their business judgment that they were satisfied with Virtus’ and AllianzGI U.S.’s responses to their requests for information, including Virtus’ representations regarding its efforts to improve performance for underperforming Continuing Funds following the Transition. The Boards also concluded that the fees payable under the Agreements represent reasonable compensation in light of the nature, extent and quality of services expected to be provided by Virtus, AllianzGI U.S. and the Virtus Value Equity Subadviser, taking into account Virtus’ agreement to continue existing expense limitations for at least a two-year period following the Closing. Based on their evaluation of factors they deemed to be material, including, but not limited to, those factors described above, the Boards, including the Independent Trustees, unanimously concluded that the approval of the Agreements with respect to each Continuing Fund was in the best interests of the Continuing Funds and their shareholders, and determined to recommend that the Agreements be submitted for approval by Continuing Fund shareholders.

Information about Virtus

Virtus Investment Advisers, Inc. is a wholly-owned subsidiary of Virtus Partners, Inc., which in turn is a wholly-owned subsidiary of Virtus Investment Partners, Inc., all of which are located at One Financial Plaza, Hartford, CT 06103. Virtus acts as the investment adviser for over 40 mutual funds. As of June 30, 2020, Virtus had approximately $32.1 billion in assets under management. Virtus has acted as an investment adviser for over 80 years and is an indirect wholly-owned subsidiary of Virtus Investment Partners, Inc., a publicly traded multi-manager asset management business.

The principal executive officers and directors of Virtus are presented in Appendix D.

Required Vote

Approval of the Proposed Investment Advisory Agreement with respect to each Continuing Fund requires the “affirmative vote of a majority of the outstanding shares” of that Continuing Fund, which means the affirmative vote, at a duly called and held meeting of Shareholders, (a) of the holders of 67% or more of the outstanding voting securities of such Continuing Fund present (in person or by proxy) and entitled to vote at such meeting, if the holders of more than 50% of the outstanding voting securities of such Continuing Fund entitled to vote at such meeting are present in person or by proxy, or (b) of the holders of more than 50% of the outstanding voting securities of such Continuing Fund entitled to vote at such meeting, whichever is less. The approval of this Proposal with respect to a Continuing Fund is not contingent upon the approval of the Proposal with respect to any other Fund. Furthermore, if the Shareholders of some Funds do not approve Proposals 2 and 3, but AllianzGI U.S. and Virtus proceed to Closing, AllianzGI U.S. will continue to be contractually obligated to act as investment adviser and provide services under the existing arrangements and the Trustees will take such further action as they may deem to be in the best interests of the Shareholders of the relevant Funds for which the votes failed, with one possible outcome being the liquidation and termination of those Funds.

 

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THE BOARD OF TRUSTEES OF EACH TRUST, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL FOR YOUR CONTINUING FUND.

 

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III. APPROVAL OF THE PROPOSED SUBADVISORY AGREEMENTS

Overview

The following description provides an overview of the Proposal on which you are being asked to vote. Under the Proposal, two new subadvisory agreements are proposed (the “Subadvisory Agreements”): (i) a new subadvisory agreement with AllianzGI U.S. is proposed for the AllianzGI-Subadvised Continuing Funds and (ii) a new subadvisory agreement with the Virtus Value Equity Subadviser (together with AllianzGI U.S., the “Subadviser(s)”) is proposed for the Value Equity Continuing Funds. The Subadvisory Agreements will be substantially similar in form. Common elements between the Subadvisory Agreements are discussed in the below description while elements specific to the AllianzGI U.S. Subadvisory Agreement are discussed in Section III.A. and elements specific to the Virtus Value Equity Subadviser Subadvisory Agreement are discussed in Section III.B. Please read the remainder of this Proxy Statement for information and further details about the Proposal and the Boards’ and AllianzGI U.S.’s rationale for recommending it to Shareholders. The Subadvisory Agreements are being proposed in connection with a strategic partnership between AllianzGI U.S. and Virtus, whereby Virtus and its affiliates will become investment adviser, distributor, administrator and transfer agent of the Continuing Funds, while continuing to provide Shareholders the same investment strategies and portfolio management teams through subadvisory relationships with AllianzGI U.S. and the value equity team currently with AllianzGI U.S. who will move to a new affiliate of Virtus to become a separate Subadviser. As investment adviser, Virtus would be responsible for overseeing the performance of AllianzGI U.S. and Virtus Value Equity Subadviser, respectively. Upon closing, AllianzGI U.S. will also receive separate consideration from Virtus with respect to the Transition. AllianzGI U.S. and Virtus believe that this arrangement provides an opportunity for Shareholders to benefit from each company’s strengths in a cohesive manner.

Description of the Proposed New Subadvisory Agreements

Services. Under the Subadvisory Agreements, which are attached to this Proxy Statement as Appendix E, the Subadvisers would be obligated, subject always to the direction and oversight of the Boards of Trustees and Virtus, to furnish continuously an investment program for the Continuing Funds’ portfolios.

In providing management services to the Continuing Funds, the Subadvisers shall be subject to the investment objectives, policies and restrictions of the Trust as they apply to each Continuing Fund and as set forth in the Trust’s then current prospectus (“Prospectus”) and statement of additional information (“Statement of Additional Information”) filed with the SEC as part of the Trust’s registration statement (the “Registration Statement”), as may be periodically amended and provided to the Subadvisers by Virtus, and to the investment restrictions set forth in the 1940 Act and the rules thereunder, to the supervision and control of the Board, and to instructions from Virtus. The Subadvisers shall not, without a Trust’s prior written approval, effect any transactions that would cause the Continuing Funds at the time of the transaction to be out of compliance with any of such restrictions or policies. Virtus agrees to provide the Subadvisers with such assistance as may be reasonably requested by the Subadvisers to facilitate the Subadvisers’ services under the Subadvisory Agreements, including, without limitation, providing information concerning the Trusts and Continuing Funds, contact information for parties to provide information about funds available or to become available for investment, and information generally as to the conditions of the Continuing Funds or the Trust’s affairs.

Fees. The total advisory fee that each Continuing Fund pays to Virtus under the Proposed Investment Advisory Agreements will not change as a result of Proposals 3A and 3B. Under the Subadvisory Agreements, Virtus will pay a subadvisory fee to each Subadviser at the rate of 50% of the net advisory fee paid by the applicable Fund to Virtus. For this purpose, the “net advisory fee” is the advisory fee paid to Virtus, based on the Fund’s average daily net assets, after accounting for any applicable fee waiver and/or expense limitation

 

37

agreement, which does not include reimbursement of Virtus for any expenses or recapture of prior waivers. The advisory fee rate for each Continuing Fund under the Proposed Investment Advisory Agreements before reimbursement of expenses and/or waivers is listed above under Proposal 2. Virtus believes the subadvisory fee to be charged by each Subadviser is reasonable in light of the subadvisory services to be provided to each Continuing Fund. The fees shall be prorated for any month during which the applicable Subadvisory Agreement is in effect for only a portion of the month. In computing the fee to be paid to the Subadviser, the net asset value of the applicable Fund shall be calculated as set forth in the then current Registration Statement of that Fund.

Effective Date. If a proposed Subadvisory Agreement is approved by Shareholders of a Continuing Fund, that Subadvisory Agreement will take effect with respect to the applicable Continuing Fund concurrent with the effectiveness of the Proposed Investment Advisory Agreement taking effect with respect to that Continuing Fund. The actual effective date of the Subadvisory Agreements will be at a date and time mutually agreeable to each Trust, Virtus and AllianzGI U.S. or the Virtus Value Equity Subadviser, as applicable, in order to effect an efficient transition for the Continuing Funds and their Shareholders. [As part of the strategic partnership, Virtus has agreed to not recommend termination of the Subadvisory Agreements for certain Funds whenever the Subadvisory Agreements are next considered for renewal or approval except to the extent required by applicable law or its fiduciary duties.]

Required Vote

Approval of the Subadvisory Agreements for each Continuing Fund requires the “affirmative vote of a majority of the outstanding shares” of such Continuing Fund, which means the affirmative vote, at a duly called and held meeting of Shareholders, (a) of the holders of 67% or more of the outstanding voting securities of such Fund present (in person or by proxy) and entitled to vote at such meeting, if the holders of more than 50% of the outstanding voting securities of such Fund entitled to vote at such meeting are present in person or by proxy, or (b) of the holders of more than 50% of the outstanding voting securities of such Fund entitled to vote at such meeting, whichever is less. The approval of this Proposal with respect to a Continuing Fund is not contingent upon the approval of the Proposal with respect to any other Continuing Fund. Furthermore, if the Shareholders of some Funds do not approve Proposals 2 and 3, but AllianzGI U.S. and Virtus proceed to Closing, AllianzGI U.S. will continue to be contractually obligated to act as investment adviser and provide services under the existing arrangements and the Trustees will take such further action as they may deem to be in the best interests of the Shareholders of the relevant Funds for which the votes failed, with one possible outcome being the liquidation and termination of those Funds.

III.A. Approval of the Proposed Subadvisory Agreements with AllianzGI U.S.

 

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Description of the Proposed AllianzGI U.S. Subadvisory Arrangements

The Subadvisory Agreement with AllianzGI U.S. calls for AllianzGI U.S. to continue to provide the same portfolio management services, in the same strategies, as are currently being provided to the AllianzGI-Subadvised Continuing Funds by AllianzGI U.S. No changes to the portfolio management team or the principal investment strategies or risks of the AllianzGI-Subadvised Continuing Funds are expected in connection with the Subadvisory Agreement, although as described in Section II AllianzGI U.S. is currently the investment manager to all of the Continuing Funds and would instead become the Subadviser to the AllianzGI-Subadvised Continuing Funds. As investment adviser, Virtus would be responsible for overseeing the Subadvisers’ and their performance.

Trustees’ Considerations Related to the Proposed AllianzGI U.S. Subadvisory Agreements

The 1940 Act requires that both the full Boards of Trustees and a majority of the Independent Trustees, voting separately, approve the proposed AllianzGI U.S. Subadvisory Agreements. The Boards met via videoconference on August 31, 2020 for the specific purpose of considering whether to approve the proposed AllianzGI U.S. Subadvisory Agreements. Information about the Boards’ deliberations is included in Section I in the subsection “Trustees Considerations Related to the Proposed Investment Advisory Agreements and Subadvisory Agreements” as the Proposed Investment Advisory Agreements and Subadvisory Agreements are cross-contingent and were considered together for approval by the Boards.

Information about AllianzGI U.S.

AllianzGI U.S. is located at 1633 Broadway, New York, New York 10019. Organized in 2000, AllianzGI U.S. provides investment management and advisory services to a number of closed-end and open-end investment company clients. As of December 31, 2019, AllianzGI U.S. and its investment management affiliates had approximately $122.3 billion in assets under management.

AllianzGI U.S. is a wholly-owned indirect subsidiary of Allianz Asset Management of America L.P. (“AAMA”). AAMA, acting through an investment management division, was the former investment adviser to the Trust. AAMA was organized as a limited partnership under Delaware law in 1987. AAMA’s sole general partner is Allianz Asset Management of America LLC. Allianz Asset Management of America LLC has three members, Allianz of America, Inc. (“Allianz of America”), a Delaware corporation that owns a 99.8% non-managing interest, Allianz Asset Management GmbH, a German company that owns a 0.1% non-managing interest, and Allianz Asset Management of America Holdings Inc., a Delaware corporation that owns a 0.1% managing interest. Allianz of America is a wholly-owned indirect subsidiary of Allianz SE. Allianz Asset Management of America Holdings Inc. is a wholly-owned subsidiary of Allianz Asset Management GmbH, which is an indirect subsidiary of Allianz SE. Allianz SE indirectly holds a controlling interest in AAMA. Allianz SE is a European-based, multinational insurance and financial services holding company. The address for AAMA, Allianz Asset Management of America LLC and Allianz Asset Management of America Holdings Inc. is 650 Newport Center Drive, Newport Beach, California 92660. The address for Allianz Asset Management GmbH is Seidlstrasse, 24-24a, D-80335, Munich, Germany. Allianz SE’s address is Koeniginstrasse 28, D-80802, Munich, Germany.

The principal executive officers and directors of AllianzGI U.S. are presented in Appendix F.

Certain Trustees and Officers of the Funds. The following table lists the names of each Trustee and officer of the Funds who is also an officer, employee, director, general partner or Shareholder of AllianzGI U.S.

 

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Name    Position with Fund    Position with AllianzGI U.S.
Thomas J. Fuccillo    Interested Trustee, President and Chief Executive Officer    Managing Director and Head of US Funds of Allianz Global Investors U.S. Holdings LLC; Managing Director of Allianz Global Investors Distributors LLC
Scott Whisten    Financial and Accounting Officer    Director of Allianz Global Investors U.S. LLC
Thomas Harter    Chief Compliance Officer    Director, Senior Compliance Manager of Allianz Global Investors U.S. Holdings LLC; Director, Deputy Chief Compliance Officer of Allianz Global Investors U.S. LLC
Angela Borreggine    Chief Legal Officer and Secretary    Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC
Richard J. Cochran    Assistant Treasurer    Vice President of Allianz Global Investors U.S. LLC
Orhan Dzemaili    Assistant Treasurer    Director of Allianz Global Investors U.S. LLC
Debra Rubano    Assistant Secretary    Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC
Craig Ruckman    Assistant Secretary    Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; Chief Legal Officer of Allianz Global Investors Distributors LLC

Other Funds Managed by AllianzGI U.S.

[To be updated in the definitive proxy statement.]

AllianzGI U.S. currently serves as investment manager of the Trusts. If the Proposed Investment Advisory Agreement is approved with respect to a Continuing Fund, AllianzGI U.S. will no longer serve in such capacity for such Continuing Fund and will be replaced by Virtus, at a date and time mutually agreeable to the Trusts, Virtus and AllianzGI U.S. following such shareholder approval in order to effect an efficient transition for the Continuing Funds and their Shareholders.

III.B. Approval of the Proposed Subadvisory Agreements with the Virtus Value Equity Subadviser

 

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Description of the Proposed Virtus Value Equity Subadviser Subadvisory Arrangements

The portfolio management team to be employed by the Virtus Value Equity Subadviser is the same portfolio management team currently providing portfolio management with respect to value equity strategies for the Funds as employees of AllianzGI U.S. In connection with the strategic partnership between AllianzGI U.S. and Virtus, that team will no longer be employed by AllianzGI U.S. and will instead be employed by a new affiliate of Virtus expected to be called NFJ Investment Group, LLC (the “Virtus Value Equity Subadviser”). The Subadvisory Agreement with the Virtus Value Equity Subadviser calls for that portfolio management team to continue to provide the same portfolio management services, in the same strategies, as are currently being provided to the Virtus Value Equity Team-Subadvised Continuing Funds by AllianzGI U.S. managed in a value equity investment strategy. No changes to the portfolio management team or the principal investment strategies or risks of the Virtus Value Equity Team -Subadvised Continuing Funds are expected in connection with the Subadvisory Agreement, although as described in Section II AllianzGI U.S. is currently the investment manager to all of the Continuing Funds and would cease providing services to with respect to the Continuing Funds’ value equity strategies. As investment adviser, Virtus would be responsible for overseeing the performance and operations of the Virtus Value Equity Subadviser.

Trustees’ Considerations Related to the Proposed Virtus Value Equity Subadviser Subadvisory Agreements

The 1940 Act requires that both the full Boards of Trustees and a majority of the Independent Trustees, voting separately, approve the proposed Virtus Value Equity Subadviser Subadvisory Agreements. The Boards met via videoconference on August 31, 2020 for the specific purpose of considering whether to approve the proposed Virtus Value Equity Subadviser Subadvisory Agreements. Information about the Boards’ deliberations is included in Section I in the subsection “Trustees Considerations Related to the Proposed Investment Advisory Agreements and Subadvisory Agreements” as the Proposed Investment Advisory Agreements and Subadvisory Agreements are cross-contingent and were considered together for approval by the Boards.

Information about the Virtus Value Equity Subadviser

The Virtus Value Equity Subadviser has offices at One Financial Plaza, Hartford, Connecticut 06103 and 2100 Ross Avenue, Dallas, Texas 75201. The Virtus Value Equity Subadviser is newly organized for the purpose of carrying out the services described herein and did not yet manage any assets as of the date of this proxy statement.

The Virtus Value Equity Subadviser is a wholly-owned indirect subsidiary of Virtus Investment Partners, Inc., as a wholly-owned subsidiary of Virtus Partners, Inc. which is wholly-owned by Virtus Investment Partners, Inc. The address for each of these entities is One Financial Plaza, Hartford, Connecticut 06103.

The principal executive officers and directors of the Virtus Value Equity Subadviser are presented in Appendix G.

Certain Trustees and Officers of the Funds. The following table lists the names of each Trustee and officer of the Funds who is also an employee or officer of the Virtus Value Equity Subadviser. There are no directors or members of the Virtus Value Equity Subadviser who are Trustees or officers of the Funds.

[ ]

 

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THE BOARD OF TRUSTEES OF EACH TRUST, INCLUDING THE INDEPENDENT TRUSTEES,

UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL FOR YOUR

CONTINUING FUND.

 

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IV. APPROVAL OF A PROPOSAL TO PERMIT VIRTUS TO HIRE AND REPLACE SUBADVISERS OR TO MODIFY SUBADVISORY AGREEMENTS WITHOUT SHAREHOLDER APPROVAL, AND TO PERMIT THE FUND TO DISCLOSE ADVISORY AND SUBADVISORY FEE INFORMATION IN AN AGGREGATED MANNER

The Boards have approved, and recommend that Shareholders approve, a proposal (the “Manager of Managers Proposal”) that would enable the Continuing Funds to be managed in a “manager of managers” structure, whereby Virtus is responsible for the management of the Continuing Funds’ investment programs and for evaluating and selecting subadvisers on an ongoing basis and making any recommendations to the Board regarding hiring, retaining or replacing subadvisers, while the selected subadvisers are responsible for portfolio management, compliance with the respective Fund’s(s’) investment policies and procedures, compliance with applicable securities laws and assurances thereof. The specific terms and conditions of the proposal are discussed below.

Shareholders of each Continuing Fund have previously approved operating in a “manager of managers” structure in which AllianzGI U.S. would have the authority to enter into new or amended sub-advisory agreements with one or more sub-advisers with respect to each Fund without obtaining shareholder approval of such agreements, subject to the conditions of an exemptive order that has been granted by the SEC (the “Allianz Exemptive Order”) with respect to certain other open-end funds within the Allianz family of funds. One such condition is that the Allianz Exemptive Order would only permit such actions with respect to unaffiliated and wholly-owned subadvisers (as defined below). The Continuing Funds currently are not using the Allianz Exemptive Order, and its relief will no longer be available if Virtus becomes the investment adviser to the Continuing Funds.

For purposes of this section, an unaffiliated subadviser is an investment subadviser that is not an affiliate of the affected fund or Virtus, which means that (a) it does not control and is not owned or controlled by the same parent of the applicable Trust or Virtus, (b) it does not own or control 5% of the outstanding voting shares of the fund or Virtus, or (c) the fund or Virtus does not own or control 5% of its outstanding voting shares (an “Unaffiliated Subadviser”) and a wholly-owned subadviser for an affected fund means a subadviser which is wholly-owned (meaning an entity that owns or controls all of the equity of another entity, either directly or indirectly through other subsidiaries) by either Virtus or a sister company of Virtus, which is itself wholly-owned by a company that wholly owns Virtus (a “Wholly-Owned Subadviser”).

The Manager of Managers Proposal

Shareholder Approval of Subadvisory Agreements. Federal securities laws generally require that Shareholders approve agreements with a subadviser. Shareholder approval also is required if the terms of existing agreements are changed materially or if there is a change in control of the subadviser or investment manager. In order to obtain Shareholder approval, the Continuing Funds must call and conduct Shareholder meetings, prepare and distribute proxy materials and solicit votes from Shareholders. The process can be costly and time-consuming. The Board believes that it is in Shareholders’ best interests if the Board represents their interests in approving or rejecting recommendations made by Virtus regarding subadvisers. This approach will avoid the costs and delays associated with holding Shareholder meetings to obtain approval for future changes. This approach also will align the policies of the Continuing Funds with respect to the ability to implement subadvisory changes with those of most of the funds currently managed by Virtus.

The combined flexibility provided by the Virtus Exemptive Order and No-Action Relief, as defined and outlined below, would be useful in a number of scenarios, including (i) if the Board in the future wishes for a

 

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portion of any Fund to be managed according to a strategy that requires the unique expertise of one or more third-party advisers, (ii) if a Fund merges with another fund with a third-party adviser that will continue to manage a portion of the portfolio or (iii) if it is advisable for Virtus and either AllianzGI U.S. or NFJ to materially change any aspect of their contractual relationship. Importantly, in the event that there are changes to the ownership structure of a subadviser, including certain kinds of internal reorganizations either at the subadviser or owner entity level, the 1940 Act could deem the applicable subadvisory agreement “assigned” and therefore require reapproval. The Virtus Exemptive Order and related relief would allow the Board to reinstate the subadvisory agreements with such subadviser in these technical “assignment” situations without having to seek shareholder approval and without the delay and expense inherent in holding shareholder meetings.

SEC Exemptive Order. On October 25, 2016, the SEC granted an order exempting Virtus from the federal securities law requirements to obtain Shareholder approval regarding Unaffiliated Subadvisers and Wholly-Owned Subadvisers, subject to various terms and conditions (the “Virtus Exemptive Order”). The Virtus Exemptive Order permits Virtus to hire new Unaffiliated Subadvisers and Wholly-Owned Subadvisers, and to amend subadvisory agreements with such subadvisers, with the approval of the board of the affected fund, but without the approval of Shareholders, provided Shareholders approve Virtus’s authority to operate in this manner. In addition, the Virtus Exemptive Order allows for funds to disclose their advisory fees paid on an aggregate, rather than individual, basis in disclosure documents. The Virtus Exemptive Order is available to all funds advised by Virtus, which would include, if Proposals 1, 2 and 3 are approved and implemented, the Continuing Funds. Shareholders of the Allianz Funds have previously approved a similar proposal that allowed AllianzGI U.S. to enter into new or amended subadvisory agreements with one or more subadvisers without obtaining Shareholder approval of such agreements, subject to the conditions of the Allianz Exemptive Order.

Shareholder approval of the Manager of Managers Proposal will not result in an increase or decrease in the total amount of investment management fees that would be paid by the Funds to Virtus.

The Virtus Exemptive Order would be available in the following situations, among others, if the Manager of Managers Proposal is approved:

 

  •  

Virtus recommends that a Fund’s day-to-day management be diversified by adding another subadviser;

 

  •  

Virtus recommends that a subadviser be removed because of performance issues and be replaced with a different subadviser; or

 

  •  

There is a change of control of a subadviser.

Under the Virtus Exemptive Order, the affected funds and Virtus are subject to several conditions imposed by the SEC to ensure that the interests of the funds’ shareholders are adequately protected. Before a Continuing Fund may rely on the Virtus Exemptive Order, its use must be approved by a majority vote of the Continuing Fund’s shareholders (as defined in the 1940 Act), and the Continuing Fund must disclose in its prospectus that it relies on the Virtus Exemptive Order, and that Virtus has the ultimate responsibility, subject to oversight by the Board, to oversee and recommend the hiring, termination and replacement of subadvisers.

Virtus will continue to have overall supervisory responsibility for the general management and investment of the Continuing Fund’s assets. Subject to the Board’s review and approval, Virtus will set the Continuing Fund’s investment strategies; evaluate, select and recommend subadvisers to the Continuing Fund; and implement procedures reasonably designed to ensure subadvisers comply with the Continuing Fund’s investment objective,

 

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policies and restrictions. Virtus will also monitor and evaluate the performance of subadvisers, and inform shareholders of the hiring of a new subadviser within 90 days of such hiring. A Continuing Fund may not, however, enter into a new or amended subadvisory agreement with a Partially-Owned Subadviser or into a new or amended subadvisory agreement that results in an increase in the Continuing Fund’s advisory fee without first receiving shareholder approval.

At least a majority of the Board will be Independent Trustees at all times, and independent legal counsel, as defined in Rule 0-1(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection and nomination of new or additional Independent Trustees, and the selection of independent legal counsel, will be within the discretion of the then-existing Independent Trustees.

No less frequently than quarterly, and when a subadviser is hired or terminated, Virtus must provide the Board with the relevant information about its profitability. In addition, when a subadviser change is proposed for a Continuing Fund in reliance on the Virtus Exemptive Order, the Board will make a separate finding that (i) the change is in the best interests of the Continuing Fund and its shareholders, and (ii) the change does not involve a conflict of interest from which Virtus or the subadviser receives an inappropriate advantage.

Any ownership interest in a subadviser by a Trustee or officer of an affected fund, or partner, director, manager, or officer of Virtus, must be limited to (i) ownership interests in Virtus and certain entities that controls, is controlled by, or is under common control with Virtus; or (ii) ownership of less than 1% of the outstanding securities of any class of equity or debt of a subadviser that is a publicly-traded company or an entity that controls, is controlled by or is under common control with a subadviser.

Lastly, if the SEC adopts a rule under the 1940 Act that provides substantially similar relief that the Virtus Exemptive Order provides, the Virtus Exemptive Order will expire on the effective date of that rule.

Although shareholder approval would not be required for Virtus to terminate subadvisory agreements under the expanded relief, shareholders of an affected fund have the right to terminate subadvisory agreements for the fund at any time by a vote of a majority of the outstanding voting securities of the fund, and this right of shareholders will not be affected by any of the provisions in the expanded relief.

Related No-Action Relief. Last year, the SEC issued a no-action letter (the “No-Action Relief”) that would permit Virtus to apply the same relief in the Virtus Exemptive Order with respect to any existing and future partially-owned subadvisers, in addition to Unaffiliated Subadvisers and Wholly-Owned Subadvisers, if approved by shareholders. A partially-owned subadviser for an affected fund means a subadviser which is partially-owned (meaning an entity that owns or controls a portion of the equity of another entity, either directly or indirectly through other subsidiaries) by Virtus, a sister company of Virtus, which is itself wholly-owned by a company that wholly owns Virtus, or a parent company of Virtus (“Partially-Owned Subadviser” and, together with Wholly-Owned Subadvisers, “Affiliated Subadvisers”). This proposal also seeks shareholder approval to apply this No-Action Relief to the Continuing Funds. If this proposal is approved by shareholders, Virtus and the Trusts generally intend to rely on the No-Action Relief and to comply with its conditions which are summarized below. If, however, after this proposal is approved by shareholders the No-Action Relief is rescinded, Virtus and the Trusts intend to rely on the Virtus Exemptive Order and to comply with its conditions which are also summarized below.

Virtus and the Trust would be permitted, subject to certain conditions and with the approval of the Board, to do the following without obtaining prior approval from shareholders of an affected fund:

 

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(a) to also engage or retain Partially-Owned, in addition to Unaffiliated Subadvisers and Wholly-Owned Subadvisers (or only Wholly-Owned and Unaffiliated Subadvisers if the no-action letter is rescinded);

(b) to subsequently change such subadvisers; or

(c) to continue the employment of existing Subadvisers after events that under the 1940 Act and the relevant subadvisory agreements would otherwise cause an automatic termination of the subadvisory agreements.

In addition, the No-Action relief would permit an affected fund to disclose its advisory fees as follows (collectively, the “Aggregate Fee Disclosure”):

(a) advisory fees paid by the Fund to Virtus and the subadvisory fees paid by Virtus to Wholly-Owned Subadvisers for the fund may be disclosed on an aggregate basis, rather than disclosing the amounts paid to each individually; and

(b) subadvisory fees paid by Virtus to multiple Partially-Owned and Unaffiliated Subadvisers for the fund may be disclosed on an aggregate basis, rather than disclosing the amounts paid to each Partially-Owned and Unaffiliated Subadviser individually (or to only Wholly-Owned and Unaffiliated Subadvisers if the No-Action Relief is rescinded).

For a Continuing Fund to rely upon the No-Action Relief, it must comply with certain conditions as summarized below.

Before the Continuing Fund may rely on the No-Action Relief, its use must be approved by a majority vote of the Continuing Fund’s shareholders (as defined in the 1940 Act), and the Continuing Fund must disclose in its prospectus that it relies on such relief, and that Virtus has the ultimate responsibility, subject to oversight by the Board, to oversee and recommend the hiring, termination and replacement of subadvisers.

Virtus will continue to have overall supervisory responsibility for the general management and investment of the Continuing Fund’s assets. Subject to the Board’s review and approval, Virtus will set the Continuing Fund’s investment strategies; evaluate, select and recommend subadvisers to the Continuing Fund; and implement procedures reasonably designed to ensure subadvisers comply with the Continuing Fund’s investment objective, policies and restrictions. Virtus will also monitor and evaluate the performance of subadvisers, and inform shareholders of the hiring of a new subadviser within 90 days of such hiring. The Continuing Fund may not, however, enter into a new or amended subadvisory agreement with any subadviser that results in an increase in the Continuing Fund’s advisory fee without first receiving shareholder approval.

At least a majority of the Board will be Independent Trustees at all times, and independent legal counsel, as defined in Rule 0-1(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection and nomination of new or additional Independent Trustees, and the selection of independent legal counsel, will be within the discretion of the then-existing Independent Trustees.

When a subadviser is hired or terminated, Virtus must provide the Board with information about its profitability with respect to the Continuing Fund. In addition, when a subadviser change is proposed for a Continuing Fund in reliance on the expanded relief, the Board will evaluate any material conflicts that may be present in the proposed subadvisory arrangement and make a separate finding that (i) the change is in the best interests of the Continuing Fund and its shareholders, and (ii) the change does not involve a conflict of interest from which Virtus or the subadviser receives an inappropriate advantage.

 

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Lastly, if the SEC adopts a rule under the 1940 Act that provides substantially similar relief that the expanded relief provides, the expanded relief will expire on the effective date of that rule.

Board Considerations Regarding Approval of the Manager of Managers’ Proposal

Based on representations and a recommendation provided by AllianzGI U.S., the Boards have concluded that it is in the best interest of the Funds and their Shareholders to afford Virtus the flexibility to provide investment advisory services to each Fund through one or more subadvisers that have particular expertise in the type of investments in which a Fund invests.

As is described above, without the ability to utilize the Virtus Exemptive Order, in order for Virtus to appoint a new subadviser or modify a subadvisory agreement materially, a Board must call and hold a Shareholder meeting of that Fund, create and distribute proxy materials and solicit votes from the Fund’s Shareholders. This process is time consuming and costly. Without the delay inherent in holding Shareholder meetings, Virtus would be able to act more quickly to appoint a new subadviser if and when the Board and Virtus believe that the appointment would benefit the Fund. Each Board believes that granting Virtus (subject to review and approval by such Board) maximum flexibility to select subadvisers, without incurring the delay or expense of obtaining further Shareholder approval, is in the best interest of Shareholders because it will allow each Fund to operate more efficiently.

In addition, each Board determined that it is appropriate to vest the selection of subadvisers in Virtus (subject to review and approval by the Board) in light of Virtus’s investment advisory expertise and its experience in selecting subadvisers. The Board believes that if in the future it becomes appropriate to add or change a subadviser to your Fund, it can access this expertise and experience in ways that can add value to the Fund and its Shareholders.

Finally, the Board of each Trust will continue to evaluate and to approve all proposed subadvisory agreements, as well as any proposed modifications to existing subadvisory agreements. In doing so, the Trustees will analyze such factors that they consider to be relevant to the determination. As with each Fund’s investment advisory agreement, the terms of each subadvisory agreement will include those required by applicable provisions of the 1940 Act, except for the specific provisions of the 1940 Act from which the Virtus Exemptive Order provides relief.

Required Vote and Recommendation

Approval of the Manager of Managers Proposal for each Fund requires the affirmative vote of a “majority of the outstanding voting securities” of the Fund, which for this purpose means the affirmative vote of the lesser of (a) more than 50% of the outstanding voting securities of such Fund or (ii) 67% or more of the outstanding voting securities of such Fund present at the Meeting if more than 50% of the outstanding voting securities of such Fund are present at the Meeting in person or represented by proxy. This Proposal 4 is contingent upon Proposals 1 through 3 receiving sufficient Shareholder support for AllianzGI U.S. and Virtus to proceed with the Closing of the Transition.

THE BOARDS OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE CONTINUING FUNDS VOTE FOR THE PROPOSAL.

 

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V. APPROVAL OF THE RECLASSIFICATION OF ALLIANZGI FOCUSED GROWTH FUND FROM A “DIVERSIFIED” TO A “NON-DIVERSIFIED” FUND

The Trustees have approved, on behalf of AllianzGI Focused Growth Fund (for the purposes of this Section V, the “Fund”), and recommends that Shareholders of the Fund approve, the reclassification of the Fund from a “diversified” fund to a “non-diversified” fund, as such terms are defined in the Investment Company Act of 1940, as amended from time to time, and the rules and regulations thereunder (the “1940 Act”) (the “Reclassification”). The Reclassification is proposed, among other reasons, as discussed below, to better reflect the Fund’s current and expected investment activity. Based on its experience and investment analysis, AllianzGI U.S. believes that, given the Fund’s strategy to focus its investments in a small number of business sectors or industries, the reclassification of the Fund to non-diversified may increase the probability of improved absolute and relative performance over the long-term. The Fund’s current classification as diversified has limited the Fund’s investment universe, in terms of relative weighting, when compared to its benchmark index. In order to avoid potentially limiting the Fund’s ability to pursue attractive investment activities and enhance absolute and relative performance, the Trustees are proposing that the Shareholders approve the Reclassification.

The Fund is currently classified as a diversified fund under the 1940 Act. This means that it may not, with respect to 75% of its total assets, invest more than 5% of its total assets in securities of any one issuer or purchase more than 10% of the outstanding voting securities of any one issuer, except obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities and except securities of other investment companies. With respect to the remaining 25% of the Fund’s total assets, there is no limitation on the amount of assets the Fund may invest in any one issuer. By changing its classification to a “non-diversified” fund, the Fund would no longer be subject to these restrictions. Under the 1940 Act, Shareholder approval is necessary for a change from a diversified fund to a non-diversified fund.

Although approval of the Reclassification may change certain diversification requirements under the 1940 Act, the Fund would continue to be subject to certain independent diversification requirements under the Internal Revenue Code of 1986 (the “Code”). Under the Code, with respect to 50% of the Fund’s total assets, it may not invest more than 5% of its total assets in securities of any one issuer and may not purchase more than 10% of the outstanding voting securities of any one issuer, except obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities and except securities of other investment companies. With respect to the remaining 50% of the Fund’s assets, the Fund may not invest more than 25% of its assets in securities of any one issuer. These limits apply only as of the end of such quarter of the Fund’s fiscal year, so the Fund may actually have a higher concentration in an issuer during periods between the ends of its fiscal quarters. There will be no adverse tax consequences as a result of the Reclassification.

The Russell 1000 Growth Index (the “Index”), the broad-based securities market index against which the Fund’s performance is compared, represents the universe of securities in which the Fund typically invests its assets. The Index is highly concentrated, and the relative weighting of certain constituent issuers regularly exceeds the maximum percentage of assets a diversified fund may invest in any one issuer under the 1940 Act. In addition, the weightings of the constituent issuers of the Index are annually reevaluated to ensure that such weightings accurately reflect each constituent issuer’s current market capitalization and investment style (a so-called “reconstitution”). After each such reconstitution, the Fund may be required to partially off-load its holdings of certain constituent issuers’ securities, namely the securities of those issuers that have systematically outperformed and displaced their Index peers, in order to remain under 1940 Act limits. Such a scenario could impede the Fund from achieving its absolute and relative performance objectives. A post-reconstitution sell-off by the Fund in order to meet 1940 Act limits could also drive up transaction costs, which are borne by the Fund. Therefore, AllianzGI U.S. is seeking the change to enhance its flexibility to invest the Fund’s assets by easing the restriction on AllianzGI U.S.’s ability to manage the portfolio and granting the freedom to invest larger portions of the

 

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Fund’s portfolio in a single issuer. AllianzGI U.S. believes that this increased investment flexibility would also permit it to more effectively manage the Fund and may provide more opportunities to enhance the Fund’s absolute and relative performance. In order to avoid potentially limiting the Fund’s ability to pursue attractive investment activities and enhanced absolute and relative performance, the Trustees are proposing that the Shareholders approve the Reclassification.

This increased investment flexibility may, however, make the Fund more susceptible to economic, business, political or other factors affecting the particular issuers in which it invests because larger investments may have a greater effect on a non-diversified fund’s performance. Therefore, the Fund may be more exposed to the risks of loss and volatility from individual holdings than a fund that invests more broadly. However, it is important to note that, with respect to 50% of the Fund, the additional diversification requirements under the Code will continue to limit investments to 5% of total assets in securities of any one issuer. It is also important to note that the Fund will continue to be subject to its policy of investing, under normal circumstances, primarily in equity securities of U.S. companies with market capitalizations of at least $1 billion.

If Shareholders approve the Reclassification, such approved changes will take effect shortly after the Meeting; however the portfolio management team does not currently expect that the reclassification of the Fund will result in an immediate or any significant change in portfolio composition. If Shareholders do not approve the Reclassification, the Fund will continue to operate as a “diversified” fund.

Required Vote

The Proposal requires a vote by the Shareholders of the Fund. Approval of the Proposal requires the affirmative vote of a “majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund, which means the affirmative vote of the lesser of (A) 67% or more of the outstanding shares present or represented by proxy at the Meeting, if the holders of more than 50% of the outstanding shares of the Fund are present or represented by proxy; or (B) more than 50% of the outstanding shares of the Fund.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND VOTE FOR THE PROPOSAL.

 

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VI. TRUST INFORMATION

This section provides certain information about each Trust, including information about its investment adviser and administrator or investment manager, principal underwriter, independent registered public accounting firm, executive officers and the identity of persons holding more than 5% of the outstanding shares of any class of any Fund.

Allianz Funds is an open-end management investment company organized in 1990 as a business trust under the laws of the Commonwealth of Massachusetts. Allianz Funds currently consists of thirteen separate investment series. The address of Allianz Funds is 1633 Broadway, New York, New York 10019.

MST is an open-end management investment company organized in 2008 as a business trust under the laws of the Commonwealth of Massachusetts. MST currently consists of thirty-two separate investment series. The address of MST is 1633 Broadway, New York, New York 10019.

Current Investment Manager/Investment Adviser/Administrator

AllianzGI U.S., with principal offices at 1633 Broadway, New York, New York 10019, serves as the investment adviser and administrator for the series of Allianz Funds and as investment manager (responsible for advisory and administrative functions) for the series of MST. AllianzGI U.S. is a wholly-owned indirect subsidiary of AAMA. AAMA, acting through an investment management division, was the former investment adviser to Allianz Funds. AAMA was organized as a limited partnership under Delaware law in 1987. AAMA’s sole general partner is Allianz Asset Management of America LLC. Allianz Asset Management of America LLC has three members, Allianz of America, Inc. (“Allianz of America”), a Delaware corporation that owns a 99.8% non-managing interest, Allianz Asset Management Aktiengesellschaft, a German Company that owns a 0.1% non-managing interest, and Allianz Asset Management of America Holdings Inc., a Delaware corporation that owns a 0.1% managing interest. Allianz of America is a wholly-owned indirect subsidiary of Allianz SE. Allianz Asset Management of America Holdings Inc. is a wholly-owned subsidiary of Allianz Asset Management Aktiengesellschaft, which is an indirect subsidiary of Allianz SE. Allianz SE indirectly holds a controlling interest in AAMA. Allianz SE is a European-based, multinational insurance and financial services holding company. The address for Allianz Asset Management of America LLC and Allianz Asset Management of America Holdings Inc. is 680 Newport Center Drive, Suite 250, Newport Beach, California 92660. The address for Allianz Asset Management Aktiengesellschaft is Seidlstrasse, 24-24a, D-80335, Munich, Germany. Allianz SE’s address is Koeniginstrasse 28, D-80802, Munich, Germany. AAMA’s address is 680 Newport Center Drive, Suite 250, Newport Beach, California 92660.

Current Principal Underwriter

Allianz Global Investors Distributors LLC (the “Distributor”) serves as the principal underwriter of each class of shares of Allianz Funds and MST pursuant to a distribution contract with each Trust. The Distributor is an indirect wholly-owned subsidiary of AAMA. The Distributor, located at 1633 Broadway, New York, New York 10019, is a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority (“FINRA”).

Affiliated Service Providers

As part of the Transition, affiliates of Virtus will become distributor, administrator and transfer agent for the Continuing Funds. Upon Closing, VP Distributors, LLC will become distributor for the Trusts and Virtus Fund Services, LLC (“VFS”) will become administrator and transfer agent to the Continuing Funds. VFS intends to sub-delegate certain sub-administration, accounting and sub-transfer agency services to the Funds’ current

 

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service providers. The transition to VFS as administrator and transfer agent to the Continuing Funds is not expected to result in any increases in the fees charged by the Funds’ current service providers.

Brokerage and Research Services

The Funds did not pay any commissions to an affiliated broker during the most recently completed fiscal year.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP (the “Independent Registered Public Accounting Firm”), serves as the independent registered public accounting firm for each Trust and its Funds. The Independent Registered Public Accounting Firm provides audit services, tax return review and assistance and consultation in connection with review of SEC filings. The Independent Registered Public Accounting Firm is located at 300 Madison Avenue, New York, New York 10017 for each Trust.

Representatives of the Independent Registered Public Accounting Firm will be available at the Meeting by telephone to answer any appropriate questions and will have the opportunity to make a statement if they desire to do so.

Pre-approval Policies and Procedures. Each Trust’s Audit Oversight Committee has adopted written policies relating to the pre-approval of audit and permitted non- audit services to be performed by the Trust’s independent registered public accounting firm. Under the policies, on an annual basis, a Trust’s Audit Oversight Committee reviews and pre-approves proposed audit and permitted non-audit services to be performed by the independent registered public accounting firm on behalf of each Trust. The President of each Fund also pre-approves any permitted non-audit services to be provided to the Fund.

In addition, each Trust’s Audit Oversight Committee pre-approves annually any permitted non-audit services (including audit-related services) to be provided by the independent registered public accounting firm to the Investment Manager and any entity controlling, controlled by, or under common control with the Investment Manager that provides ongoing services to the Funds (together, the “Accounting Affiliates”), provided, in each case, that the engagement relates directly to the operations and financial reporting of the Funds. Although the Audit Oversight Committee does not pre-approve all services provided by the independent registered public accounting firm to Accounting Affiliates (for instance, if the engagement does not relate directly to the operations and financial reporting of the Funds), the Committee receives an annual report from the independent registered public accounting firm showing the aggregate fees paid by Accounting Affiliates for such services.

Each Trust’s Audit Oversight Committee may also from time to time pre-approve individual non-audit services to be provided to the Funds or an Accounting Affiliate that were not pre-approved as part of the annual process described above. The Chair of each Trust’s Audit Oversight Committee (or any other member of the Committee to whom this responsibility has been delegated) may also pre-approve these individual non-audit services, provided that the fee for such services does not exceed certain pre- determined dollar thresholds. Any such pre-approval by the Chair (or by a delegate) is reported to the full Audit Oversight Committee at its next regularly scheduled meeting.

The pre-approval policies provide for waivers of the requirement that the Audit Oversight Committee pre-approve permitted non-audit services provided to the Funds or their Accounting Affiliates pursuant to de minimis exceptions described in Section 10A of the Exchange Act and applicable regulations (referred to herein as the “de minimis exception”).

 

51

Fees. The following tables set forth, for each Trust’s two most recent fiscal years, as applicable, the fees billed by the Independent Registered Public Accounting Firm for (a) all audit and non-audit services provided directly to the applicable Trust and (b) those non-audit services provided to AllianzGI U.S. and any entity controlling, controlled by or under common control with AllianzGI U.S. that provides ongoing services to the Trust (collectively, “Service Entities”) that relate directly to the Funds’ operations and financial reporting:

Allianz Funds

 

Fiscal Year Ended

    Audit Fees      Audit-Related
Fees		      Tax Fees      All Other
Fees		  

June 30, 2020

    $ 559,910      $ 0      $ 155,000      $ 0  

June 30, 2019

    $ 565,959      $ 0      $ 202,830      $ 0  

MST

 

Fiscal Year Ended

    Audit Fees      Audit-Related
Fees		      Tax Fees      All Other
Fees		  

September 30, 2019

    $ 1,150,392      $ 0      $ 514,451      $ 0  

September 30, 2018

    $ 1,109,663      $ 0      $ 557,792      $ 0  

“Audit Fees” represent fees billed for each of the last two fiscal years or professional services rendered for the audit of each Trust’s annual financial statements for those fiscal years or services that are normally provided by the accountant in connection with statutory or regulatory filings or engagements for those fiscal years. “Audit-Related Fees” represent fees billed for each of the last two fiscal years for assurance and related services reasonably related to the performance of the audit of each Trust’s annual financial statements for those years. “Tax Fees” represent fees billed for each of the last two fiscal years for professional services related to tax compliance, tax advice and tax planning, including preparation of federal and state income tax returns, review of excise tax distribution requirements and preparation of excise tax returns. “All Other Fees” represent fees, if any, billed for other products and services rendered by the principal accountant to each Trust for the last two fiscal years. With respect to each series of Allianz Funds, AllianzGI U.S., in its role as administrator, bears the cost of these audit services at its own expense under its administration agreement with the Funds.

To the extent required by applicable regulations, the Audit Committees of the Boards must approve in advance all audit and non-audit services rendered to the applicable Trust(s) by the Independent Registered Public Accounting Firm and all non-audit services to the Service Entities, if the engagement relates directly to the operations and financial reporting of a Trust. Such services may also be approved by a designated member of the Audit Committees of the Board if the fees for such services are below a designated amount. Such amount varies depending on the type of service. Currently, such amounts are $500,000 for audit services and $500,000 for audit-related services, tax services and non-audit services provided to Service Entities or other permitted services. During the last two fiscal years, [no services described above under “Audit-Related Fees,” “Tax Fees” or “All Other Fees” were approved pursuant to the “de minimis” exception set forth in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X].

The following table sets forth the percentage of “Audit-Related Fees”, “Tax Fees” or “All Other Fees” that were approved by the Audit Committees of the Boards pursuant to the “de minimis” exception during the last two fiscal years:

 

52

Allianz Funds

 

Fiscal Year Ended

    Audit Fees      Audit-Related
Fees		      Tax Fees      All Other
Fees		  

June 30, 2020

           %      [     ]            %      [     ]            %      [     ]            %      [     ] 

June 30, 2019

           %      [     ]            %      [     ]            %      [     ]            %      [     ] 

MST

 

Fiscal Year Ended

    Audit Fees      Audit-Related
Fees		      Tax Fees      All Other
Fees		  

September 30, 2020

           %      [     ]            %      [     ]            %      [     ]            %      [     ] 

September 30, 2019

           %      [     ]            %      [     ]            %      [     ]            %      [     ] 

For each Trust’s two most recent fiscal years, as applicable, the aggregate non-audit fees billed by the Independent Registered Public Accounting Firm for services rendered to the Trust and the Service Entities were as follows:

Allianz Funds

 

Entity

    Aggregate Non-Audit Fees Billed to Entity  
     June 30, 2020      June 30, 2019  

Allianz Funds

    $ 1,738,597      $ 1,479,004  

Service Entities

    $ [     ]     $ 170,577  

MST

 

Entity

    Aggregate Non-Audit Fees Billed to Entity  
     September 30, 2019      September 30, 2019  

MST

    $ 1,594,163      $ 2,998,017  

Service Entities

    $ 270,577      $ 230,598  

Allianz Funds

 

Fiscal Year Ended

    Audit-Related
Fees		      Tax Fees      All Other
Fees		  

June 30, 2020

    $ 0      $ 155,000      $ 0  

June 30, 2019

    $ 0      $ 202,830      $ 0  

MST

 

Fiscal Year Ended

    Audit-Related
Fees		      Tax Fees      All Other
Fees		  

September 30, 2019

    $ 0      $ 514,451      $ 0  

September 30, 2018

    $ 0      $ 557,792      $ 0  

 

53

Executive Officers

The following table provides information about the current executive officers of the Trusts, including their principal occupations, which, unless specific dates are shown, are of more than five years’ duration, although the titles may not have been the same throughout. Unless otherwise indicated, each is currently an executive officer of Allianz Funds and MST. Unless otherwise indicated, the business address of the persons listed below is 1633 Broadway, New York, NY 10019. It is expected that none of these officers will remain as officers of the Trusts following the Transition, as the newly elected Boards are expected to appoint officers from the Virtus organization.

 

Name and

Address

  

Position(s) Held

with the Fund

  

Term of Office and

Length of Time

Served

  

Principal Occupation(s)

During the Past 5 Years

Thomas J. Fuccillo

   President and Chief Executive Officer  

AF/MST:

Trustee since March 2019; President and Chief Executive Officer 4/2016 to present

   Managing Director and Head of US Funds of Allianz Global Investors U.S. Holdings LLC; Managing Director of Allianz Global Investors Distributors LLC; Trustee, President and Chief Executive Officer of The Korea Fund, Inc. and The Taiwan Fund, Inc.; and President and Chief Executive Officer of 55 funds in the Fund Complex. Formerly, Associate General Counsel, Head of US Funds and Retail Legal of Allianz Global Investors U.S. Holdings LLC; Chief Legal Officer and Secretary of Allianz Global Investors Distributors LLC (2013-2019); Vice President, Secretary and Chief Legal Officer of numerous funds in the Fund Complex (2004-2016).

Scott Whisten

  

Treasurer,

Principal Financial and Accounting Officer

  

AF/MST:

4/2018 to present

   Director of Allianz Global Investors U.S. LLC; and Treasurer, Principal Financial and Accounting Officer of 55 funds in the Fund Complex. Formerly, Assistant Treasurer of numerous funds in the Fund Complex (2007-2018).

Angela Borreggine

   Chief Legal Officer and Secretary  

AF/MST:

4/2016 to present

   Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; Chief Legal Officer and Secretary of 55 funds in the Fund Complex; Secretary and Chief Legal Officer of The Korea Fund, Inc. Formerly, Assistant Secretary of numerous funds in the Fund Complex (2015-2016).

 

54

Thomas L. Harter, CFA

   Chief Compliance Officer  

AF:

4/2013 to present

 

MST:

6/2013 to present

   Director of Allianz Global Investors U.S. Holdings LLC; Director, Deputy Chief Compliance Officer of Allianz Global Investors U.S. LLC; Chief Compliance Officer of 55 funds in the Fund Complex and of The Korea Fund, Inc.

Orhan Dzemaili

   Assistant Treasurer  

AF/MST

1/2011 to present

   Director of Allianz Global Investors U.S. LLC; Treasurer, Principal Financial and Accounting Officer of The Korea Fund, Inc. Assistant Treasurer of 55 funds in the Fund Complex. Formerly, Assistant Treasurer of The Korea Fund, Inc. (2016 - 2018).

Richard J. Cochran

   Assistant Treasurer  

AF/MST:

5/2008 to present

   Vice President of Allianz Global Investors U.S. LLC; and Assistant Treasurer of 55 funds in the Fund Complex and of The Korea Fund, Inc.

Debra Rubano

   Assistant Secretary  

AF/MST:

12/2015 to present

   Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC; and Assistant Secretary of 55 funds in the Fund Complex.

Craig Ruckman

   Assistant Secretary  

AF/MST:

12/2017 to present

   Director of Allianz Global Investors U.S. Holdings LLC; Chief Legal Officer of Allianz Global Investors Distributors LLC and Assistant Secretary of 55 funds in the Fund Complex. Formerly, Associate of K&L Gates LLP (2012-2016).

Each of the Trusts’ executive officers is an “interested person” of the Trusts (as defined in Section 2(a)(19) of the 1940 Act) as a result of his or her position(s) set forth in the table above.

Please see the following table for information about relationships between the Trusts’ officers and certain of the Trusts’ affiliates.

Certain Affiliations

The following table lists the positions held by each Trust’s officers and any Trustee or Nominee who is an “interested person” of such Trust with affiliated persons or the principal underwriter of such Trust:

 

Name

   

Positions and Offices with Principal

Underwriter

Craig Ruckman

    Chief Legal Officer

 

55

Outstanding Shares and Significant Shareholders

Information about the number of outstanding shares and significant Shareholders of the Funds is set forth in Appendix H.

 

56

VII. VOTING INFORMATION

Record Date, Quorum and Methods of Tabulation

Shareholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Meeting. With respect to the election of Trustees, the holders of 30% of the shares of each Trust outstanding as of the Record Date, virtually present or represented by proxy, constitute a quorum for the transaction of business by the Shareholders of that Trust at the Meeting. With respect to the other Proposals, the holders of 30% of the shares of the relevant Continuing Fund in each case outstanding as of the Record Date, virtually present or by proxy, constitute a quorum for the transaction of business by the Shareholders of that Continuing Fund at the Meeting.

Each whole share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional share shall be entitled to a proportionate fractional vote. Shares represented by timely, duly executed proxies will be voted as you instruct. If no specification is made, shares will be voted in accordance with the recommendation of the Trustees. Proxies may be revoked at any time before they are exercised by sending a written revocation which is received by the Secretary of the applicable Trust prior to any such exercise, by properly executing a later-dated proxy, or by virtually attending the Meeting and voting.

Votes cast by proxy or by virtual presence at the Meeting will be counted by persons appointed by the Trusts as tellers both for the purpose of determining the presence of a quorum and for calculating the votes cast on the issues before the Meeting. Abstentions and “broker non-votes” (i.e., proxies representing shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or the persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) will be counted for quorum purposes. So long as a quorum is present, neither abstentions nor broker non-votes will have any effect on the outcome of the proposal to elect Trustees.

Adjournments

In the event that a quorum is not present for purposes of acting on a proposal for a Trust or Continuing Fund, as applicable, or if sufficient votes in favor of a proposal are not received by the time of the Meeting, the persons named as proxies may propose one or more adjournments of the Meeting for such Trust or Continuing Fund, as applicable, to permit further solicitation of proxies. For each Trust or Continuing Fund, as applicable, any such adjournment will require the affirmative vote of a plurality of the shares of such Trust or Continuing Fund, as applicable, virtually present or represented by proxy at the session of the Meeting to be adjourned. The persons named as proxies will vote in favor of such adjournment those proxies which they are entitled to vote in favor of any proposal that has not then been adopted. They will vote against such adjournment those proxies required to be voted against each proposal that has not then been adopted and will not vote any proxies that direct them to abstain from voting on such proposals.

Solicitation of Proxies

The solicitation of proxies by personal interview, mail and telephone may be made by officers and Trustees of each Trust and officers and employees of AllianzGI U.S., its affiliates and other representatives of the Trusts. The Trusts have retained Broadridge to serve as tabulator of proxies and this cost as well as the legal, audit and other costs of preparing, printing and mailing this Proxy Statement and the cost of holding the Meeting (including the costs of any additional solicitation and any adjourned session) are anticipated to be approximately $2,000,000 and will be borne (i) 50% by AllianzGI U.S. and (ii) 50% by Virtus.

 

57

Methods of Voting

Electronic Voting: You may give your voting instructions via the Internet or by following the instructions found on the proxy card.

Telephone Voting: You may give your voting instructions over the telephone by calling the phone number listed on your proxy card. When receiving your instructions by telephone, the representative may ask you for your full name and address to confirm that you have received the proxy statement in the mail. If the information you provide matches the information provided to Broadridge by the Trusts, then a representative can record your instructions over the phone.

As the Meeting date approaches, you may receive a call from a representative of the Trusts, Broadridge, AllianzGI U.S. or its affiliates if the Trusts have not yet received your vote.

Voting by Mail: If you wish to participate in the Meeting, but do not wish to give a proxy by telephone or via the Internet, you can complete, sign, date and mail the proxy card received with the proxy statement by following the instructions on the proxy card, or you can virtually attend the Meeting by [live audio webcast].]

Shareholder Proposals at Future Meetings

Under the Declarations of Trust, the Trusts are not required to hold annual meetings of Trust Shareholders to elect Trustees or for other purposes. Except as described below, it is not anticipated that a Trust will hold Shareholders’ meetings unless required by law or its Declaration of Trust. In this regard, each Trust will be required to hold a meeting to elect Trustees to fill any existing vacancies on the Board if, at any time, fewer than a majority of the Trustees have been elected by the Shareholders of the Trust. Shareholder proposals to be virtually presented at any future meeting of Shareholders of a Trust must be received by the Trust a reasonable time before that meeting in order for such proposals to be considered for inclusion in the proxy materials relating to that meeting. As discussed above under “Election of a Board of Trustees—Shareholder Communications with the Boards of Trustees,” any such proposals should be submitted to the attention of the Board, c/o Chief Legal Officer, 1633 Broadway, New York, New York 10019.

Other Matters

Although the Meeting has been called to transact any other business that may properly come before it, the only business that management intends to virtually present or that it knows that others will virtually present are the Proposals listed in the Notice of Special Meeting. If any other matters properly come before the Meeting, the persons named in properly executed proxies have discretionary authority to vote such proxies as they shall decide.

[Only one copy of the Proxy Statement may be mailed to a household, even if more than one person in a household is a Fund Shareholder of record, unless the Fund has received contrary instructions from one or more of the Shareholders. If you need additional copies of this Proxy Statement and you are a holder of record of your shares, please call [            ]. If your shares are held in broker street name, please contact your financial service firm to obtain additional copies of this Proxy Statement. If in the future you do not want the mailing of proxy statements and information statements to be combined with those of other members of your household, or if you have received multiple copies of this Proxy Statement and want future mailings to be combined with those of other members of your household, please contact [Allianz Global Investors U.S.] in writing at [email address], or by telephone at [phone number] for Class A, Class C and Class R shares and [phone number] for Class R6, Institutional Class, Class P and Administrative Class shares, or contact your financial service firm.]

 

58

INDEX OF APPENDICES

 

APPENDIX A

    GOVERNANCE AND NOMINATING CHARTER

APPENDIX B

    FORM OF PROPOSED INVESTMENT ADVISORY AGREEMENT

APPENDIX B-1

    SCHEDULE A TO PROPOSED INVESTMENT ADVISORY AGREEMENT – ALLIANZ FUNDS

APPENDIX B-2

    SCHEDULE A TO PROPOSED INVESTMENT ADVISORY AGREEMENT – MST

APPENDIX C

    PRO FORMA FEES AND EXPENSE INFORMATION

APPENDIX D

    PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF VIRTUS

APPENDIX E

    FORM OF SUBADVISORY AGREEMENTS

APPENDIX F

    PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF ALLIANZGI U.S.

APPENDIX G

    PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF NFJ INVESTMENT COMPANY, LLC

APPENDIX H

    OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS

 

59

Appendix A

Governance and Nominating Committee Charter

Allianz Funds, Allianz Funds Multi-Strategy Trust

and Allianz Global Investors U.S. LLC Sponsored Closed-End Funds

The Board of Trustees (each a “Board”) of each of Allianz Funds, Allianz Funds Multi-Strategy Trust, AllianzGI Institutional Multi-Series Trust and Premier Multi-Series VIT (each a “Trust,” and each series or portfolio of such Trust, a “Fund”) and of each of the closed-end funds sponsored by Allianz Global Investors U.S. LLC (each also a “Trust” or a “Fund”) has adopted this Charter to govern the activities of the Governance and Nominating Committee (the “Committee”) of the Board. This Charter applies separately to each Trust and its particular Board and Committee, and shall be interpreted accordingly. This Charter supersedes and replaces any governance and/or nominating committee charter previously adopted by any Board.

Statement of Purpose and Responsibility

The primary purposes and responsibilities of the Committee are (i) advising and making recommendations to the Board on matters concerning Board governance and related Trustee practices, and (ii) the screening and nomination of candidates for election to the Board as Trustees, including Independent Trustees (as defined below).

Organization

1.    The Committee shall consist of as many Trustees as the Board shall determine, but in any event not fewer than two (2) Trustees. The Committee shall consist exclusively of Board members who are not “interested persons” of the Trust (“Independent Trustees”), as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”). Each Board may remove or replace any member of the Committee, with or without cause, at any time in its sole discretion.

2.    One or more members of the Committee may be designated by the Board as the Committee’s chair or vice chair, as the case may be, and shall serve for such term or terms as the Board may determine. The Committee Chair shall: (1) schedule meetings to take place at such times and frequency as he or she deems appropriate; (2) provide input to management regarding its establishment of an agenda for each Committee meeting, with assistance from other Committee members as the Chair deems appropriate; (3) serve as chair of each Committee meeting; (4) serve as the primary Committee member who shall interface with management regarding Committee-related matters; and (5) perform such other duties as the Board or the Committee deems appropriate. The Chair can delegate to one or more other Committee members one or more of such duties as he or she deems appropriate.

3.    The Committee will have at least one regularly scheduled meeting per year to consider the compensation of Independent Trustees and other matters the Committee deems appropriate. Additional Committee meetings shall be held as and when the Committee or the Board determines necessary or appropriate in accordance with the Trust’s Bylaws.

 

A-1

Duties and Responsibilities for Governance Matters

1.    Overview of Responsibilities. The responsibilities of the Committee of each Trust include considering and making recommendations to the Board regarding: (1) governance, retirement and other policies, procedures and practices relating to the Board and the Trustees; (2) in consultation with the Chair of the Trustees, matters concerning the functions and duties of the Trustees and committees of the Board; (3) the size of the Board and, in consultation with the Chair of the Trustees, the Board’s committees and their composition; and (4) Board and committee meeting procedures, including the appropriateness and adequacy of the information supplied to the Trustees in connection with such meetings.

2.    Trustee Compensation. The Committee will periodically review and recommend for approval by the Board the structure and levels of compensation and any related benefits to be paid or provided by the Trust to the Independent Trustees for their services on the Board and any committees of the Board.

3.    Board Governance Policies. The Committee shall review the Board Governance Policies designed to enhance the independence and effectiveness of the Independent Trustees in serving the interests of the Funds and their shareholders. The Committee shall review these Policies no less than every two years and shall recommend any changes to the Board for its approval. In addition to other areas that the Board may assign, the Committee shall be responsible for reviewing the appointment of independent legal counsel, reviewing the Trustees’ insurance coverage, and overseeing Trustee education.

4.    The Committee shall discharge any other duties or responsibilities delegated to the Committee by the Board from time to time.

Trustee and Officer Nominations

1.    Qualifications for Trustee Nominees. A Trustee candidate must have a college degree or equivalent business experience. The Committee may take into account a wide variety of factors in considering Trustee candidates, including (but not limited to): (i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities on the Board, (ii) relevant industry and related experience, (iii) educational background, (iv) ability, judgment and expertise and (v) overall diversity of the Board’s composition. The Committee shall consider the effect of any relationships delineated in the 1940 Act or other types of relationships, e.g., business, financial or family relationships with the investment adviser(s) or other principal service providers, which might impair independence.

2.    Identification of Nominees. In identifying potential nominees for a Board, the Committee may consider candidates recommended by the following sources: (i) the Trust’s current Trustees; (ii) the Trust’s officers; (iii) the Fund’s investment adviser or sub-advisers; (iv) shareholders of the Fund (see below); and (v) any other source the Committee deems to be appropriate. The Committee may, but is not required to, retain a third party search firm at the Trust’s expense to identify potential candidates. With respect to annual nominations for the Closed-End Funds, absent circumstances warranting different action, the Board expects that such nominations will be made in a manner designed to maintain common Board membership with the other Funds.

 

A-2

3.    Consideration of Candidates Recommended By Shareholders. The Committee will consider and evaluate nominee candidates properly submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. Appendix A (for all Funds other than the Allianz Global Investors U.S. LLC Sponsored Closed-End Funds) and Appendix B (for the Allianz Global Investors U.S. LLC Sponsored Closed-End Funds) to this Charter, as they may be amended from time to time by the Committee, set forth procedures that must be followed by shareholders to submit properly a nominee candidate to the Committee (recommendations not properly submitted in accordance with Appendix A or Appendix B (as applicable) will not be considered by the Committee or the Board).

4.    Recommendation of Candidates to the Board. The Committee will recommend to the Board the Trustee candidates that it deems qualified to serve as Independent Trustees on the Board. To the extent practicable, the Committee will rank such potential nominees for the Board in order of preference. The Committee may also consider and recommend to the Board Trustee candidates who would not qualify as Independent Trustees.

5.    Fund Officers. The Committee shall nominate annually candidates to serve as officers of the Funds.

Operating Guidelines

1.    The appropriate officers of the Trust shall provide or arrange to provide such information, data, and services as the Committee may request. The Committee shall have the resources and authority necessary or appropriate for purposes of discharging its responsibilities under this Charter, including the authority to engage such legal counsel and other experts and consultants at the Trust’s expense as the Committee, in its discretion, deems necessary or appropriate to carry out its responsibilities.

2.    Absent actual knowledge to the contrary, each Committee member is entitled to rely upon (1) the integrity and competence of those persons and organizations that render services to the Trust and from whom the Committee receives information or reports and (2) the accuracy and completeness (both at the time of presentation and on a continuing basis, as appropriate) of the information and reports provided to the Committee by such persons or organizations. Nothing in this Charter is intended to impose, or should be interpreted as imposing, on any member of the Committee any additional duties or responsibilities over and above those placed on the member in his or her capacity as a Trustee of a Trust, under federal and state law.

 

A-3

Exhibit A

Procedures for Shareholders to Submit Nominee Candidates for all Funds other than the

Allianz Global Investors U.S. LLC Sponsored Closed-End Funds

A shareholder of a Trust must follow the following procedures in order to submit properly a nominee recommendation for the Committee’s consideration.

1.    The shareholder must submit any such recommendation (a “Shareholder Recommendation”) in writing to a Trust, to the attention of the Secretary, at the address of the principal executive offices of the Trust. Once each quarter, if any Shareholder Recommendations have been received by the Secretary during the quarter, the Secretary will inform the Committee of the new Shareholder Recommendations. Because the Trust does not hold annual or other regular meetings of shareholders for the purpose of electing Trustees, the Committee will accept Shareholder Recommendations on a continuous basis.

2.    All Shareholder Recommendations properly submitted to a Trust will be held by the Secretary until such time as (i) the Committee convenes to consider candidates to fill Board vacancies or newly created Board positions (a “Trustee Consideration Meeting”) or (ii) the Committee instructs the Secretary to discard a Shareholder Recommendation following a Trustee Consideration Meeting or an Interim Evaluation (as defined below).

3.    At a Trustee Consideration Meeting, the Committee will consider each Shareholder Recommendation then held by the Secretary. Following a Trustee Consideration Meeting, the Committee may instruct the Secretary to discard any or all of the Shareholder Recommendations currently held by the Secretary.

4.    The Committee may, in its discretion and at any time, convene to conduct an evaluation of validly submitted Shareholder Recommendations (each such meeting, an “Interim Evaluation”) for the purpose of determining which Shareholder Recommendations will be considered at the next Trustee Consideration Meeting. Following an Interim Evaluation, the Committee may instruct the Secretary to discard any or all of the Shareholder Recommendations currently held by the Secretary.

5.    The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name, date of birth, business address, residence address and nationality of the person recommended by the shareholder (the “candidate”); (B) the number of shares (and class) of the Fund(s) of the Trust owned of record or beneficially by the candidate, as reported to such shareholder by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation or rule subsequently adopted by the Securities and Exchange Commission or any successor agency applicable to the Trust); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with the election of Trustees or directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the candidate is or will be an “interested person” of the Trust (as defined in the Investment Company Act of 1940, as amended) and, if not an “interested person,” information regarding the candidate that will be sufficient for the Trust to make such determination; (ii) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected;

(iii) the recommending shareholder’s name as it appears on the Trust’s books; (iv) the number of shares (and class) of the Fund(s) of the Trust owned beneficially and of record by the recommending shareholder; and (v) a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder. In addition, the Committee may require the candidate to furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve on the Board or to satisfy applicable law.

 

A-4

Procedures for Shareholders to Submit Nominee Candidates for

the Allianz Global Investors U.S. LLC Sponsored Closed-End Funds

A Trust shareholder must follow the following procedures in order to properly submit a nominee recommendation for the Committee’s consideration.

1.    The shareholder/stockholder must submit any such recommendation (a “Shareholder Recommendation”) in writing to a Trust, to the attention of the Secretary, at the address of the principal executive offices of the Trust.

2.    The Shareholder Recommendation must be delivered to or mailed and received at the principal executive offices of a Trust not less than forty-five (45) calendar days nor more than seventy-five (75) calendar days prior to the date of the Board or shareholder meeting at which the nominee would be elected.

3.    The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person recommended by the shareholder (the “candidate”); (B) the class and number of all shares of the Trust owned of record or beneficially by the candidate, as reported to such shareholder by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation or rule subsequently adopted by the Securities and Exchange Commission or any successor agency applicable to the Trust); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with solicitation of proxies for election of Trustees or directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the candidate is or will be an “interested person” of the Trust (as defined in the Investment Company Act of 1940, as amended) and, if not an “interested person,” information regarding the candidate that will be sufficient for the Trust to make such determination; (ii) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected; (iii) the recommending shareholder’s name as it appears on the Trust’s books; (iv) the class and number of all shares of the Trust owned beneficially and of record by the recommending shareholder; and (v) a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder. In addition, the Committee may require the candidate to furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve on the Board.

 

A-5

Appendix B

 

[ALLIANZ FUNDS]

[ALLIANZ FUNDS MULTI-STRATEGY TRUST]

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT, effective as of the [    ] day of [                ], 20[    ] (the “Contract Date”) by and between [Allianz Funds] / [Allianz Funds Multi-Strategy Trust], a Massachusetts business trust (the “Trust”), and Virtus Investment Advisers, Inc., a Massachusetts corporation (the “Adviser”).

WITNESSETH THAT:

1.    The Trust hereby appoints the Adviser to act as investment adviser to the Trust on behalf of each of the portfolio series of the Trust established and designated by the Board of Trustees of the Trust (the “Trustees”) on or before the date hereof, as listed on attached Schedule A (collectively, the “Existing Series”), for the period and on the terms set forth herein. The Adviser accepts such appointment and agrees to render the services described in this Agreement for the compensation herein provided.

2.    In the event that the Trustees desire to retain the Adviser to render investment advisory services hereunder with respect to one or more of the additional series (the “Additional Series”), by agreement in writing, the Trust and the Adviser may agree to amend Schedule A to include such Additional Series, whereupon such Additional Series shall become subject to the terms and conditions of this Agreement.

3.    The Adviser shall furnish continuously an investment program for the portfolio of each Existing Series and the portfolio of any Additional Series which may become subject to the terms and conditions set forth herein (the Existing Series and the Additional Series sometimes collectively referred to as the “Series”) and shall manage the investment and reinvestment of the assets of the portfolio of each Series, subject at all times to the supervision of the Trustees.

4.    With respect to managing the investment and reinvestment of the portfolio of the Series’ assets, the Adviser shall provide, at its own expense:

 

  (a)

Investment research, advice and supervision;

 

  (b)

An investment program for each Series consistent with its investment objectives, policies and procedures;

 

  (c)

Implementation of the investment program for each Series including the purchase and sale of securities;

 

  (d)

Implementation of an investment program designed to manage cash, cash equivalents and short-term investments for a Series with respect to assets designated from time to time to be managed by a subadviser to such Series;

 

B-1

Appendix B

 

  (e)

Advice and assistance on the general operations of the Trust; and

 

  (f)

Regular reports to the Trustees on the implementation of each Series’ investment program.

5.    The Adviser shall, for all purposes herein, be deemed to be an independent contractor.

6.    The Adviser shall furnish at its own expense, or pay the expenses of the Trust, for the following:

 

  (a)

Office facilities, including office space, furniture and equipment;

 

  (b)

Personnel necessary to perform the functions required to manage the investment and reinvestment of each Series’ assets (including those required for research, statistical and investment work);

 

  (c)

Except as otherwise approved by the Board, personnel are to serve without direct compensation from the Trust as officers or agents of the Trust. The Adviser need not provide personnel to perform, or pay the expenses of the Trust for, services customarily performed for an open-end management investment company by its national distributor, custodian, financial agent, transfer agent, registrar, dividend disbursing agent, auditors and legal counsel;

 

  (d)

Compensation and expenses, if any, of the Trustees who are also affiliated persons of the Adviser or any of its affiliated persons; and

 

  (e)

Any subadviser recommended by the Adviser and appointed to act on behalf of the Trust.

7.    All costs and expenses not specifically enumerated herein as payable by the Adviser shall be paid by the Trust. Such expenses shall include, but shall not be limited to, all expenses (other than those specifically referred to as being borne by the Adviser) incurred in the operation of the Trust and any public offering of its shares, including, among others, interest, taxes, brokerage fees and commissions, fees of Trustees who are not affiliated persons of the Adviser or any of its affiliated persons, expenses of Trustees’ and shareholders’ meetings including the cost of printing and mailing proxies, expenses of Adviser personnel attending Trustee meetings as required, expenses of insurance premiums for fidelity and other coverage, expenses of repurchase and redemption of shares, expenses of issue and sale of shares (to the extent not borne by its national distributor under its agreement with the Trust), expenses of printing and mailing share certificates representing shares of the Trust, association membership dues, charges of custodians, transfer agents, dividend disbursing agents and financial agents, bookkeeping, auditing and legal expenses. The Trust will also pay the fees and bear the expense of registering and maintaining the registration of the Trust and its shares with the Securities and Exchange Commission and

 

B-2

Appendix B

 

registering or qualifying its shares under state or other securities laws and the expense of preparing and mailing prospectuses and reports to shareholders. Additionally, if authorized by the Trustees, the Trust shall pay for extraordinary expenses and expenses of a non-recurring nature which may include, but not be limited to the reasonable and proportionate cost of any reorganization or acquisition of assets and the cost of legal proceedings to which the Trust is a party.

8.    The Adviser shall adhere to all applicable requirements under laws, regulations, rules and orders of regulatory or judicial bodies and all applicable policies and procedures as adopted from time to time by the Trustees, including but not limited to the following:

 

  (a)

Code of Ethics. The Adviser shall adopt a Code of Ethics designed to prevent “access persons” (as defined therein in accordance with Rule 17j-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”)) from engaging in fraudulent acts or transactions that are, or have the potential of being viewed as, a conflict of interest, and shall monitor for compliance with its Code of Ethics and report any violations to the Trust’s Compliance Officer.

 

  (b)

Policy with Respect to Portfolio Transactions. The Adviser shall have full trading discretion in selecting broker-dealers for Series transactions on a day to day basis so long as each selection is in conformance with the Trust’s Policy with Respect to Portfolio Transactions. Such discretion shall include use of “soft dollars” for certain broker and research services, also in conformance with the Trust’s Policy with Respect to Portfolio Transactions. The Adviser may delegate the responsibilities under this section to a Subadviser of a Series.

 

  (c)

Procedures for the Determination of Liquidity of Assets. It shall be the responsibility of the Adviser to monitor the Series’ assets that are not liquid, making such determinations as to liquidity of a particular asset as may be necessary, in accordance with the Trust’s Procedures for the Determination of Liquidity of Assets. The Adviser may delegate the responsibilities under this section to a Subadviser of a Series.

 

  (d)

Policy with Respect to Proxy Voting. In the absence of specific direction to the contrary by the Trustees and in a manner consistent with the Trust’s Policy with Respect to Proxy Voting, the Adviser shall be responsible for voting proxies with respect to portfolio holdings of the Trust. The Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the assets under management by the Adviser in accordance with such policies and procedures adopted or approved by each Series. Unless the Trust gives the Adviser written instructions to the contrary, the Adviser will, in compliance with the proxy voting procedures of the Series then in effect or approved by the Series, vote or abstain from voting, all proxies solicited by or with respect to the issuers of securities in which the assets of the Series may be invested. The Adviser shall cause the Custodian to forward promptly to the Adviser (or designee)

 

B-3

Appendix B

 

  all proxies upon receipt so as to afford the Adviser a reasonable amount of time in which to determine how to vote such proxies. The Adviser agrees to provide the Trust with quarterly proxy voting reports in such form as the Trust may request from time to time. The Adviser may delegate the responsibilities under this section to a Subadviser of a Series.

 

  (e)

Procedures for the Valuation of Securities. It shall be the responsibility of the Adviser to fully comply with the Trust’s Valuation Procedures. The Adviser may delegate the responsibilities under this section to a Subadviser of a Series.

9.    For providing the services and assuming the expenses outlined herein, the Trust agrees that the Adviser shall be compensated as follows:

 

  (a)

The Trust shall pay a monthly fee calculated at an annual rate as specified in Schedule A. The amounts payable to the Adviser with respect to the Series shall be based upon the average of the values of the net assets of the Series as of the close of business each day, computed in accordance with the Trust’s Declaration of Trust.

 

  (b)

Compensation shall accrue immediately upon the effective date of this Agreement.

 

  (c)

If there is termination of this Agreement with respect to any Series during a month, the Series’ fee for that month shall be proportionately computed upon the average of the daily net asset values of such Series for such partial period in such month.

 

  (d)

The Adviser agrees to reimburse the Trust for the amount, if any, by which the total operating and management expenses of the portfolio of any Series (including the Adviser’s compensation, pursuant to this paragraph, but excluding taxes, interest, costs of portfolio acquisitions and dispositions and extraordinary expenses), for any “fiscal year” exceed the level of expenses which such Series is permitted to bear under the most restrictive expense limitation (which is not waived by the State), if any, imposed on open-end investment companies by any state in which shares of such Series are then qualified. Such reimbursement, if any, will be made by the Adviser to the Trust within five days after the end of each month. For the purpose of this subparagraph (d), the term “fiscal year” shall include the portion of the then current fiscal year which shall have elapsed at the date of termination of this Agreement.

10.    The services of the Adviser to the Trust are not to be deemed exclusive, the Adviser being free to render services to others and to engage in other activities. Without relieving the Adviser of its duties hereunder and subject to the prior approval of the Trustees and subject further to compliance with applicable provisions of the Investment Company Act, as amended, the Adviser may appoint one or more agents to perform any of the functions and services which are to be provided under the terms of this Agreement upon such terms and conditions as may be mutually agreed upon among the Trust, the Adviser and any such agent.

 

B-4

Appendix B

 

11.     The Adviser shall not be liable to the Trust or to any shareholder of the Trust for any error of judgment or mistake of law or for any loss suffered by the Trust or by any shareholder of the Trust in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith, gross negligence or reckless disregard on the part of the Adviser in the performance of its duties hereunder.

12.    It is understood that:

 

  (a)

Trustees, officers, employees, agents and shareholders of the Trust are or may be “interested persons” of the Adviser as directors, officers, shareholders or otherwise;

 

  (b)

Directors, officers, employees, agents and stockholders of the Adviser are or may be “interested persons” of the Trust as Trustees, officers, shareholders or otherwise; and

 

  (c)

The existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder.

13.     This Agreement shall take effect as of the date hereof, and shall remain in effect, unless sooner terminated as provided herein, with respect to a Series for a period of two years following the date set forth on the attached Schedule A. This Agreement shall continue thereafter on an annual basis with respect to a Series provided that (a) such continuance with respect to any such Series is approved at least annually by either the Trustees or by a “vote of the majority of the outstanding voting securities” of such Series and (b) the terms and any continuation of this Agreement with respect to any such Series have been approved by a vote of a majority of the Trustees who are not parties to this Agreement or “interested persons” of any such party cast in person (or otherwise, as consistent with applicable laws, regulations and related guidance and relief) at a meeting called for the purpose of voting on such approval.

Any approval of this Agreement by a vote of the holders of a “majority of the outstanding voting securities” of any Series shall be effective to continue this Agreement with respect to such Series notwithstanding (a) that this Agreement has not been approved by a “vote of a majority of the outstanding voting securities” of any other Series of the Trust affected thereby and (b) that this Agreement has not been approved by the holders of a “vote of a majority of the outstanding voting securities” of the Trust, unless either such additional approval shall be required by any other applicable law or otherwise.

14.     The Trust may terminate this Agreement with respect to the Trust or to any Series upon 60 days’ written notice to the Adviser at any time, without the payment of any penalty, by vote of the Trustees or, as to any Series, by a “vote of the majority of the outstanding voting securities” of such Series. The Adviser may terminate this Agreement upon 60 days’ written notice to the Trust, without the payment of any penalty. This Agreement shall immediately terminate in the event of its “assignment”.

 

B-5

Appendix B

 

15.    The terms “majority of the outstanding voting securities”, “interested persons” and “assignment”, when used herein, shall have the respective meanings in the Investment Company Act.

16.    In the event of termination of this Agreement, or at the request of the Adviser, subject to applicable regulatory requirements in each case, the Trust will eliminate all reference to “Virtus” from its name, and will not thereafter transact business in a name using the word “Virtus” in any form or combination whatsoever, or otherwise use the word “Virtus” as a part of its name. The Trust will thereafter in all prospectuses, advertising materials, letterheads, and other material designed to be read by investors or prospective investors delete from the name the word “Virtus” or any approximation thereof. If the Adviser chooses to withdraw the Trust’s right to use the word “Virtus,” it agrees to submit the question of continuing this Agreement to a vote of the Trust’s shareholders at the time of such withdrawal.

17.    It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Trust personally, but bind only the trust property of the Trust, as provided in the Declaration of Trust. The execution and delivery of this Agreement have been authorized by the Trustees and shareholders of the Trust and signed by the President of the Trust, acting as such, and neither such authorization by such Trustees and shareholders nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or be binding upon or impose any liability on any of them personally, but shall bind only the trust property of the Trust as provided in its Declaration of Trust.

18.    This Agreement does not benefit any third-party not expressly named in the Agreement. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of The Commonwealth of Massachusetts.

19.    Unless the parties hereto mutually consent in writing to the selection of an alternative forum, any suit, action or proceeding brought by or in the right of any shareholder or any person claiming any interest in any shares seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement, any Series or class or any shares, including any claim of any nature against the Trust, any Series or class, the Trustees or officers of the Trust, shall be brought exclusively in a federal or state court located within The Commonwealth of Massachusetts (and the appropriate appellate courts therefrom).

20.    Subject to the duty of the Adviser and the Trust to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Series and any Additional Series that may be named, and the actions of the Adviser and the Trust in respect thereof.

 

B-6

Appendix B

 

21.    In the case of class action suits involving securities held in the Series’ portfolios, the Adviser may include information about the Series for purposes of participating in any settlements.

22.    A copy of the Trust’s Agreement and Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on behalf of the Trustees of the Trust as Trustees and not individually and that the obligations of this instrument are not binding upon any of the Trustees or shareholders individually but are binding only upon the assets and property of the Trust.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first written above.

 

[ALLIANZ FUNDS]
[ALLIANZ FUNDS MULTI-STRATEGY TRUST]
By:  

 

Name:  
Title:  
[VIRTUS INVESTMENT ADVISERS, INC.]
By:  

 

Name:  
Title:  

 

B-7

Appendix B-1

ALLIANZ FUNDS

SCHEDULE A

SERIES AND FEES

As of [    ]

 

Fund Name

    Effective Date   Management Fee (annualized
percentage of net assets)		  

AllianzGI Dividend Value Fund

    [    ]     0.45 % 

AllianzGI Emerging Markets Opportunities Fund

    [    ]     0.85 % 

AllianzGI Focused Growth Fund

    [    ]     0.45 % 

AllianzGI Global Small-Cap Fund

    [    ]     0.90 % 

AllianzGI Health Sciences Fund

    [    ]     0.80 % 

AllianzGI Income & Growth Fund

    [    ]     0.64 % 

AllianzGI International Value Fund

    [    ]     0.60 % 

AllianzGI Large-Cap Value Fund

    [    ]     0.45 % 

AllianzGI Mid-Cap Fund

    [    ]     0.47 % 

AllianzGI Mid-Cap Value Fund

    [    ]     0.55 % 

AllianzGI Small-Cap Fund

    [    ]     0.60 % 

AllianzGI Small-Cap Value Fund

    [    ]     0.60 % 

AllianzGI Technology Fund

    [    ]     0.90 % 

 

B-1-1

Appendix B-1

IN WITNESS WHEREOF, ALLIANZ FUNDS and VIRTUS INVESTMENT ADVISERS, INC. have each caused this Schedule A to the Investment Advisory Agreement to be signed in its behalf by its duly authorized representative, all as of the day and year first written above.

 

ALLIANZ FUNDS
By:  

 

Name:
Title:
[VIRTUS INVESTMENT ADVISERS, INC.]
By:  

 

Name:
Title:

 

B-1-2

Appendix B-2

ALLIANZ FUNDS MULTI-STRATEGY TRUST

SCHEDULE A

SERIES AND FEES

As of [    ]

 

Fund Name

    Effective Date   Management Fee (annualized
percentage of net assets)		  

AllianzGI Convertible Fund

    [    ]     0.57 % 

AllianzGI Core Plus Bond Fund

    [    ]     0.30 % 

AllianzGI Emerging Markets Consumer Fund

    [    ]     0.85 % 

AllianzGI Global Allocation Fund

    [    ]     0.70 % 

AllianzGI Global Dynamic Allocation Fund

    [    ]     0.70 % 

AllianzGI Global Sustainability Fund

    [    ]     0.80 % 

AllianzGI High Yield Bond Fund

    [    ]     0.48 % 

AllianzGI International Small-Cap Fund

    [    ]     1.00 % 

AllianzGI Emerging Markets Value Fund

    [    ]     0.85 % 

AllianzGI Preferred Securities and Income Fund

    [    ]     0.45 % 

AllianzGI Short Duration High Income Fund

    [    ]     0.48 % 

AllianzGI Water Fund

    [    ]     0.95 % 

 

B-2-1

Appendix B-2

IN WITNESS WHEREOF, ALLIANZ FUNDS MULTI-STRATEGY TRUST and VIRTUS INVESTMENT ADVISERS, INC. have each caused this Schedule A to the Investment Advisory Agreement to be signed in its behalf by its duly authorized representative, all as of the day and year first written above.

 

ALLIANZ FUNDS MULTI-STRATEGY TRUST
By:  

 

Name:
Title:
[VIRTUS INVESTMENT ADVISERS, INC.]
By:  

 

Name:
Title:

 

B-2-2

Appendix C

 

Pro Forma Expenses of the Trusts Under the Virtus Expense Structure

Allianz Funds

AllianzGI Dividend Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.85 %      0.85       0.85       0.75       0.70       0.85       0.75       0.45       0.45       0.45       0.45       0.45       0.45       0.45  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.35       0.35       0.35       0.35       0.20       0.35       0.35  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.12 %      1.87       1.37       0.77       0.72       0.87       1.02       1.06       1.81       1.31       0.81       0.65       0.81       1.06  

Expense Reductions(2)

     (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.02 )      (0.02 )      (0.02 )      (0.12 )      (0.01 )      (0.02 )      (0.12 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)(3)

     1.05 %      1.80       1.30       0.7       0.65       0.80       0.95       1.04       1.79       1.29       0.69       0.64       0.79       0.94  

 

1 

Based on net assets as of June 1, 2020.

2 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, an irrevocable waiver of a portion of its advisory fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.075%

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

     Current IMA      Proposed IMA  
   Example: Assuming you redeem your
shares at the end of each period		      Example: Assuming you do not redeem
your shares		      Example: Assuming you redeem your
shares at the end of each period		      Example: Assuming you do not
redeem your shares		  

Share Class

    1 year      3
years		      5
years		      10 years      1 year      3
years		      5
years		      10 years      1 year      3
years		      5
years		      10
years		      1 year      3
years		      5
years		      10
years		  

Class A

    $  651      $  880      $  1127      $  1832      $  651      $  880      $  1127      $  1832        651        866        1099        1768        651        866        1099        1768  

Class C

      283        581        1004        2185        183        581        1004        2185        283        567        977        2121        183        567        977        2121  

Class R

      132        427        743        1640        132        427        743        1640        132        413        715        1573        132        413        715        1573  

Institutional

      72        239        421        948        72        239        421        948        72        236        426        977        72        236        426        977  

Class R6

      66        223        394        888        66        223        394        888        66        208        363        813        66        208        363        813  

Class P

      82        271        475        1066        82        271        475        1066        82        256        446        996        82        256        446        996  

Administrative

      97        318        556        1241        97        318        556        1241        97        314        562        1270        97        314        562        1270  

AllianzGI Emerging Markets Opportunities Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA     Proposed IMA(1)  

Share Class

    Class
A		     Class
C		     Institutional     Class
R6		     Class
P		     Class
A		     Class
C		     Institutional     Class
R6		     Class
P		  

Management Fees

      1.35 %      1.35       1.25       1.2       1.35       0.85       0.85       0.85       0.85       0.85  

Distribution and/or Service (12b-1) Fees

      0.25 %      1       None       None       None       0.25       1.00       None       None       None  

Other Expenses

      0.04 %      0.04       0.04       0.04       0.04       0.40       0.40       0.40       0.29       0.40  

Admin Fee

      *       *       *       *       *       0.09       0.09       0.09       0.09       0.09  

TA Fee

      *       *       *       *       *       0.04       0.04       0.04       0.04       0.04  

Acquired Fund Fees and Expenses

      0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01  

Total Annual Fund Operating Expenses(2)

      1.65 %      2.4       1.3       1.25       1.4       1.51       2.26       1.26       1.14       1.26  

Expense Reductions(3)

      (0.35 )      (0.35 )      (0.35 )      (0.35 )      (0.35 )      (0.25 )      (0.25 )      (0.35 )      (0.28 )      (0.25 ) 

Total Annual Fund Operating Expenses
After Expense Reductions(3) (4)

      1.30 %      2.05       0.95       0.9       1.05       1.26       2.01       0.91       0.86       1.01  

 

C-1

Appendix C

 

1

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses do not match the Ratio of Expenses to Average Net Assets of the Fund as set forth in the Financial Highlights table of the Fund’s prospectus, in part, because the Ratio of Expenses to Average Net Asset in the prospectus reflects the operating expenses of the Fund and does not include Acquired Fund Fees and Expenses.

3 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, (i) an irrevocable waiver of a portion of its advisory fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.20%, and (ii) an irrevocable waiver of a portion of its administration fees, which reduces the contractual fee rate by 0.15%.

4 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

     Current IMA      Proposed IMA  
   Example: Assuming you redeem your
shares at the end of each period		      Example: Assuming you do not redeem
your shares		      Example: Assuming you
redeem your shares at the end
of each period		      Example: Assuming you do not
redeem your shares		  

Share Class

    1 year      3 years      5 years      10 years      1 year      3 years      5 years      10 years      1
year		      3
years		      5
years		      10
years		      1
year		      3
years		      5
years		      10
years		  

Class A

    $  675      $  1009      $  1367      $  2369      $  675      $  1009      $1367        $  2369        675        962        1292        2223        675        962        1292        2223  

Class C

      308        715        1249        2710        208        715        1249        2710        308        666        1173        2567        208        666        1173        2567  

Institutional

      97        378        679        1537        97        378        679        1537        97        337        632        1472        97        337        632        1472  

Class R6

      92        362        653        1480        92        362        653        1480        92        315        584        1354        92        315        584        1354  

Class P

      107        409        732        1649        107        409        732        1649        107        358        652        1490        107        358        652        1490  

AllianzGI Focused Growth Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA     Proposed IMA(1)  

Share Class

    Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		      Class
C		      Class
R		      Institutional     Class
R6		     Class
P		      Administrative  

Management Fees

      0.85%       0.85       0.85       0.75       0.7       0.85       0.75       0.45        0.45        0.45        0.45       0.45       0.45        0.45  

Distribution and/or Service (12b-1) Fees

      0.25%       1.00       0.5       None       None       None       0.25       0.25        1.00        0.50        None       None       None        0.25  

Other Expenses

      0.02%       0.02       0.02       0.02       0.02       0.02       0.02       0.28        0.28        0.28        0.28       0.18       0.28        0.28  

Admin Fee

      *       *       *       *       *       *       *       0.09        0.09        0.09        0.09       0.09       0.09        0.09  

TA Fee

      *       *       *       *       *       *       *       0.04        0.04        0.04        0.04       0.04       0.04        0.04  

Total Annual Fund Operating Expenses

      1.12%       1.87       1.37       0.77       0.72       0.87       1.02       0.98        1.73        1.23        0.73       0.63       0.73        0.98  

Expense Reductions(2)

      (0.12)       (0.10)       (0.10)       (0.10)       (0.10)       (0.10)       (0.10)       None        None        None        (0.06)       (0.01)       None        (0.06)  

Total Annual Fund Operating Expenses After Expense Reductions(2) (3)

      1.00%       1.77       1.27       0.67       0.62       0.77       0.92       0.98        1.73        1.23        0.67       0.62       0.73        0.92  

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

3 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, (i) an irrevocable waiver of a portion of its advisory fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.10%, and (ii) an irrevocable waiver of a portion of its administration fees for Class A shares, which reduces the contractual fee rate by 0.02%.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

     Current IMA      Proposed IMA  
   Example: Assuming you redeem
your shares at the end of each period		      Example: Assuming you do not
redeem your shares		      Example: Assuming you
redeem your shares at the end
of each period		      Example: Assuming you do not
redeem your shares		  

Share Class

    1 year      3
years		      5 years      10
years		      1 year      3
years		      5
years		      10
years		      1
year		      3
years		      5
years		      10
years		      1
year		      3
years		      5
years		      10
years		  

Class A

    $ 646      $ 875      $ 1122      $ 1828      $ 646      $ 875      $ 1122      $ 1828        644        845        1061        1684        644        845        1061        1684  

Class C

      280        578        1002        2182        180        578        1002        2182        276        545        938        2040        176        545        938        2040  

Class R

      129        424        740        1638        129        424        740        1638        125        390        675        1487        125        390        675        1487  

Institutional

      68        236        418        945        68        236        418        945        68        221        393        894        68        221        393        894  

Class R6

      63        220        391        885        63        220        391        885        63        200        350        786        63        200        350        786  

Class P

      79        268        472        1063        79        268        472        1063        74        233        405        905        74        233        405        905  

Administrative

      94        315        554        1239        94        315        554        1239        94        300        529        1189        94        300        529        1189  

 

C-2

Appendix C

 

AllianzGI Global Small-Cap Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA      Proposed IMA(1)

Share Class

    Class
A		     Class
C		      Institutional      Class
R6		      Class
P		      Class
A		   Class
C		   Institutional   Class
R6		   Class
P

Management Fees

      1.35%       1.35        1.25        1.20        1.35      0.90   0.90   0.90   0.90   0.90

Distribution and/or Service (12b-1) Fees

      0.25%       1.00        None        None        None      0.25   1.00   None   None   None

Other Expenses

      0.03%       0.03        0.03        0.03        0.03      0.58   0.58   0.58   0.44   0.58

Admin Fee

      *       *        *        *        *      0.09   0.09   0.09   0.09   0.09

TA Fee

      *       *        *        *        *      0.04   0.04   0.04   0.04   0.04

Total Annual Fund Operating Expenses

      None       None        None        None        None      1.73   2.48   1.48   1.34   1.48

Expense Reductions

      None       None        None        None        None      (0.11)   (0.11)   (0.21)   (0.11)   (0.11)

Total Annual Fund Operating Expenses After Expense Reductions(2)

      1.63%       2.38        1.28        1.23        1.38      1.62   2.37   1.27   1.23   1.37

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

     Current IMA      Proposed IMA  
   Example: Assuming you redeem your
shares at the end of each period		      Example: Assuming you do not
redeem your shares		      Example: Assuming you redeem your
shares at the end of each period		      Example: Assuming you do not redeem
your shares		  

Share Class

    1 year      3 years      5 years      10 years      1 year      3 years      5 years      10
years		      1 year      3
years		      5
years		      10
years		      1 year      3
years		      5
years		      10
years		  

Class A

    $ 707      $ 1036      $ 1388      $ 2376      $ 707      $ 1036      $ 1388      $ 2376        707        1046        1419        2463        707        1046        1419        2463  

Class C

      341        742        1270        2716        241        742        1270        2716        341        753        1302        2801        241        753        1302        2801  

Institutional

      130        406        702        1545        130        406        702        1545        130        428        769        1733        130        428        769        1733  

Class R6

      125        390        676        1489        125        390        676        1489        125        402        712        1593        125        402        712        1593  

Class P

      140        437        755        1657        140        437        755        1657        140        448        789        1751        140        448        789        1751  

AllianzGI Health Sciences Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA      Proposed IMA(1)  

Share Class

    Class
A		     Class
C		      Institutional      Class
R6		      Class
P		      Class
A		      Class
C		      Institutional      Class
R6		      Class
P		  

Management Fees

      1.20%       1.20        1.10        1.05        1.20        0.80        0.80        0.80        0.80        0.80  

Distribution and/or Service (12b-1) Fees

      0.25%       1.00        None        None        None        0.25        1.00        None        None        None  

Other Expenses

      0.02%       0.02        0.02        0.02        0.02        0.32        0.32        0.32        0.23        0.32  

Admin Fee

      *       *        *        *        *        0.09        0.09        0.09        0.09        0.09  

TA Fee

      *       *        *        *        *        0.04        0.04        0.04        0.04        0.04  

Total Annual Fund Operating Expenses

      None       None        None        None        None        1.37        2.12        1.12        1.03        1.12  

Expense Reductions

      None       None        None        None        None        —          —          —          —          —    

Total Annual Fund Operating Expenses After Expense Reductions(2)

      1.47       2.22        1.12        1.07        1.22        1.37        2.12        1.12        1.03        1.12  

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

 

C-3

Appendix C

 

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 691     $ 989     $ 1309     $ 2211     $ 691     $ 989     $ 1309     $ 2211       682       961       1261       2111       682       961       1261       2111  

Class C

     325       694       1190       2554       225       694       1190       2554       316       665       1141       2457       216       665       1141       2457  

Institutional

     114       356       617       1363       114       356       617       1363       115       357       620       1369       115       357       620       1369  

Class R6

     109       340       590       1306       109       340       590       1306       105       328       569       1259       105       328       569       1259  

Class P

     124       387       670       1477       124       387       670       1477       115       357       620       1369       115       357       620       1369  

AllianzGI Income & Growth Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		  

Management Fees

     1.02 %      1.02       1.02       0.92       0.87       1.02       0.64       0.64       0.64       0.64       0.64       0.64  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.5       None       None       None       0.25       1.00       0.50       —         —         —    

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.25       0.25       0.25       0.25       0.17       0.25  

Admin Fee

     *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.29 %      2.04       1.54       0.94       0.89       1.04       1.14       1.89       1.39       0.89       0.81       0.89  

Expense Reductions(2)

     (0.01 )      (0.01 )      (0.01 )      (0.01 )      (0.01 )      (0.01 )      —         —         —         —         —         —    

Total Annual Fund Operating Expenses After Expense
Reductions(2) (3)

     1.28 %      2.03       1.53       0.93       0.88       1.03       1.14       1.89       1.39       0.89       0.81       0.89  

 

1 

Based on net assets as of June 1, 2020.

2 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, an irrevocable waiver of a portion of its advisory fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the 0.65% contractual fee rate by 0.01% on net assets in excess of $2 billion, by an additional 0.015% on net assets in excess of $3 billion and by an additional 0.025% on net assets in excess of $5 billion, each based on the Fund’s average daily net assets.

3 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 673     $ 936     $ 1218     $ 2020     $ 673     $ 936     $ 1218     $ 2020       660       893       1145       1863       660       893       1145       1863  

Class C

     306       639       1097       2368       206       639       1097       2368       292       595       1023       2215       192       595       1023       2215  

Class R

     156       485       838       1834       156       485       838       1834       142       441       762       1672       142       441       762       1672  

Institutional

     95       299       519       1154       95       299       519       1154       91       285       495       1100       91       285       495       1100  

Class R6

     90       283       492       1095       90       283       492       1095       [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ] 

Class P

     105       330       573       1270       105       330       573       1270       91       285       495       1100       91       285       495       1100  

 

C-4

Appendix C

 

AllianzGI International Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Admini-
strative		     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Admini-
strative		  

Management Fees

     1.10 %      1.10       1.10       1.00       0.95       1.10       1.00       0.60       0.60       0.60       0.60       0.60       0.60       0.60  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.46       0.46       0.46       0.46       0.33       0.46       0.46  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.37 %      2.12       1.62       1.02       0.97       1.12       1.27       1.31       2.06       1.56       1.06       0.93       1.06       1.31  

Expense Reductions(2)

     (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      (0.07 )      None       None       None       (0.10 )      (0.02 )      None       (0.10 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2) (3)

     1.30 %      2.05       1.55       0.95       0.90       1.05       1.20       1.31       2.06       1.56       0.96       0.91       1.06       1.21  

 

1 

Based on net assets as of June 1, 2020.

2 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, (i) an irrevocable waiver of a portion of its advisory fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.05%, and (ii) an irrevocable waiver of a portion of its administration fees, which reduces the contractual fee rate by 0.025%.

3 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 675     $ 953     $ 1252     $ 2100     $ 675     $ 953     $ 1252     $ 2100       675       941       1228       2044       675       941       1228       2044  

Class C

     308       657       1133       2446       208       657       1133       2446       308       644       1108       2391       208       644       1108       2391  

Class R

     158       504       875       1916       158       504       875       1916       158       491       849       1858       158       491       849       1858  

Institutional

     97       318       556       1241       97       318       556       1241       97       315       564       1277       97       315       564       1277  

Class R6

     92       302       529       1183       92       302       529       1183       92       291       510       1141       92       291       510       1141  

Class P

     107       349       610       1357       107       349       610       1357       107       336       584       1296       107       336       584       1296  

Administrative

     122       396       690       1528       122       396       690       1528       122       393       698       1563       122       393       698       1563  

AllianzGI Large-Cap Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.85 %      0.85       0.85       0.75       0.70       0.85       0.75       0.45       0.45       0.45       0.45       0.45       0.45       0.45  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.35       0.35       0.35       0.35       0.24       0.35       0.35  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.12 %      1.87       1.37       0.77       0.72       0.87       1.02       1.05       1.80       1.30       0.80       0.68       0.80       1.05  

Expense Reductions

     None       None       None       None       None       None       None       None       None       None       (0.03 )      None       None       (0.03 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

     1.12 %      1.87       1.37       0.77       0.72       0.87       1.02       1.05       1.80       1.30       0.77       0.68       0.80       1.02  

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

 

 

C-5

Appendix C

 

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 658     $ 886     $ 1133     $ 1838     $ 658     $ 886     $ 1133     $ 1838       651       865       1097       1761       651       865       1097       1761  

Class C

     290       588       1011       2190       190       588       1011       2190       283       566       974       2115       183       566       974       2115  

Class R

     139       434       750       1646       139       434       750       1646       132       412       712       1566       132       412       712       1566  

Institutional

     79       246       428       954       79       246       428       954       79       249       438       983       79       249       438       983  

Class R6

     74       230       401       894       74       230       401       894       69       218       379       847       69       218       379       847  

Class P

     89       278       482       1073       89       278       482       1073       82       255       444       988       82       255       444       988  

Administrative

     104       325       563       1248       104       325       563       1248       104       328       573       1276       104       328       573       1276  

AllianzGI Mid-Cap Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.87 %      0.87       0.87       0.77       0.72       0.87       0.77       0.47       0.47       0.47       0.47       0.47       0.47       0.47  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.29       0.29       0.29       0.29       0.20       0.29       0.29  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.14 %      1.89       1.39       0.79       0.74       0.89       1.04       1.01       1.76       1.26       0.76       0.67       0.76       1.01  

Expense Reductions

     None       None       None       None       None       None       None       —         —         —         —         —         —         —    

Total Annual Fund Operating Expenses After Expense Reductions(2)

     1.14 %      1.89       1.39       0.79       0.74       0.89       1.04       1.01       1.76       1.26       0.76       0.67       0.76       1.01  

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 660     $ 892     $ 1143     $ 1860     $ 660     $ 892     $ 1143     $ 1860       647       854       1078       1720       647       854       1078       1720  

Class C

     292       594       1021       2212       192       594       1021       2212       279       555       955       2075       179       555       955       2075  

Class R

     142       440       761       1669       142       440       761       1669       128       400       692       1524       128       400       692       1524  

Institutional

     81       252       439       978       81       252       439       978       78       243       423       944       78       243       423       944  

Class R6

     91       284       493       1096       91       284       493       1096       68       214       373       835       68       214       373       835  

Class P

     106       331       574       1271       106       331       574       1271       78       243       423       944       78       243       423       944  

Administrative

     76       237       411       918       76       237       411       918       103       322       559       1238       103       322       559       1238  

AllianzGI Mid-Cap Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.95 %      0.95       0.95       0.85       0.80       0.95       0.85       0.55       0.55       0.55       0.55       0.55       0.55       0.55  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.29       0.29       0.29       0.29       0.19       0.29       0.29  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.22 %      1.97       1.47       0.87       0.82       0.97       1.12       1.09       1.84       1.34       0.84       0.74       0.84       1.09  

Expense Reductions(2)

     (0.22 )      (0.22 )      (0.22 )      (0.22 )      (0.22 )      (0.22 )      (0.22 )      (0.10 )      (0.10 )      (0.10 )      (0.20 )      (0.15 )      (0.10 )      (0.20 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2) (3)

     1.00 %      1.75       1.25       0.65       0.6       0.75       0.9       0.99       1.74       1.24       0.64       0.59       0.74       0.89  

 

1 

Based on net assets as of June 1, 2020.

2 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, an irrevocable waiver of a portion of its administration fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.22%

3 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

 

C-6

Appendix C

 

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 646     $ 895     $ 1163     $ 1928     $ 646     $ 895     $ 1163     $ 1928       646       861       1102       1794       646       861       1102       1794  

Class C

     278       597       1042       2278       178       597       1042       2278       278       561       980       2147       178       561       980       2147  

Class R

     127       443       782       1739       127       443       782       1739       127       407       718       1601       127       407       718       1601  

Institutional

     66       256       461       1052       66       256       461       1052       66       230       429       1005       66       230       429       1005  

Class R6

     61       240       433       993       61       240       433       993       61       208       384       893       61       208       384       893  

Class P

     77       287       515       1170       77       287       515       1170       77       250       449       1024       77       250       449       1024  

Administrative

     92       334       596       1343       92       334       596       1343       92       308       565       1298       92       308       565       1298  

AllianzGI Small-Cap Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA      Proposed IMA(1)  

Share Class

    Class
A		     Class
C		     Institutional     Class
R6		     Class
P		      Class
A		     Class
C		     Institutional     Class
R6		     Class
P		  

Management Fees

      1.00 %      1.00       0.90       0.85       1.00        0.60       0.60       0.60       0.60       0.60  

Distribution and/or Service (12b-1) Fees

      0.25 %      1.00       None       None       None        0.25       1.00       None       None       None  

Other Expenses

      0.02 %      0.02       0.02       0.02       0.02        0.56       0.56       0.56       0.35       0.56  

Admin Fee

      *       *       *       *       *        0.09       0.09       0.09       0.09       0.09  

TA Fee

      *       *       *       *       *        0.04       0.04       0.04       0.04       0.04  

Acquired Fund Fees and Expenses

      0.05       0.05       0.05       0.05       0.05        0.05       0.05       0.05       0.05       0.05  

Total Annual Fund Operating Expenses

      1.32 %      2.07       0.97       0.92       1.07        1.41       2.16       1.16       0.95       1.16  

Expense Reductions(2)

      (0.10 )      (0.10 )      (0.10 )      (0.10 )      (0.10 )       (0.22 )      (0.22 )      (0.32 )      (0.16 )      (0.22 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2) (3)

      1.22 %      1.97       0.87       0.82       0.97        1.19       1.94       0.84       0.79       0.94  

 

1 

Based on net assets as of June 1, 2020.

2 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, an irrevocable waiver of a portion of its administration fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.22%.

3 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
    Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 667     $ 936     $ 1225     $ 2045     $ 667     $ 936     $ 1225     $ 2045       667       941       1259       2160       667       941       1259       2160  

Class C

     300       639       1104       2392       200       639       1104       2392       300       644       1139       2505       200       644       1139       2505  

Institutional

     89       299       527       1181       89       299       527       1181       89       315       597       1403       89       315       597       1403  

Class R6

     84       283       500       1122       84       283       500       1122       84       281       515       1188       84       281       515       1188  

Class P

     99       330       580       1297       99       330       580       1297       99       335       617       1422       99       335       617       1422  

 

C-7

Appendix C

 

AllianzGI Small-Cap Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Admini-
strative		     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Admini-
strative		  

Management Fees

     1.00 %      1.00       1.00       0.90       0.85       1.00       0.90       0.60       0.60       0.60       0.60       0.60       0.60       0.60  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.5       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.02 %      0.02       0.02       0.02       0.02       0.02       0.02       0.43       0.43       0.43       0.43       0.22       0.43       0.43  

Admin Fee

     *       *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     *       *       *       *       *       *       *       0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Acquired Fund Fees and Expenses

     0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01       0.01  

Total Annual Fund Operating Expenses(2)

     1.28 %      2.03       1.53       0.93       0.88       1.03       1.18       1.28       2.03       1.53       1.03       0.82       1.03       1.28  

Expense Reductions(3)

     (0.10 )      (0.10 )      (0.10 )      (0.10 )      (0.10 )      (0.10 )      (0.10 )      (0.11 )      (0.11 )      (0.11 )      (0.21 )      (0.05 )      (0.11 )      (0.21 ) 

Total Annual Fund Operating Expenses After Expense Reductions(3) (4)

     1.18 %      1.93       1.43       0.83       0.78       0.93       1.08       1.17       1.92       1.42       0.82       0.77       0.92       1.07  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses do not match the Ratio of Expenses to Average Net Assets of the Fund as set forth in the Financial Highlights table of the Fund’s prospectus, in part, because the Ratio of Expenses to Average Net Asset in the prospectus reflects the operating expenses of the Fund and does not include Acquired Fund Fees and Expenses.

3 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.”) has contractually agreed to observe, through August 31, 2021, an irrevocable waiver of a portion of its administration fees (“Management Fees” in the table above consist of administration fees and advisory fees paid to AllianzGI U.S.), which reduces the contractual fee rate by 0.10%.

4 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 664     $ 924     $ 1205     $ 2002     $ 664     $ 924     $ 1205     $ 2002       664       915       1197       2000       664       915       1197       2000  

Class C

     296       627       1084       2351       196       627       1084       2351       296       618       1077       2349       196       618       1077       2349  

Class R

     146       474       825       1815       146       474       825       1815       146       464       817       1813       146       464       817       1813  

Institutional

     85       286       505       1134       85       286       505       1134       85       288       531       1230       85       288       531       1230  

Class R6

     80       271       478       1075       80       271       478       1075       80       255       451       1017       80       255       451       1017  

Class P

     95       318       559       1250       95       318       559       1250       95       308       551       1248       95       308       551       1248  

Administrative

     110       365       639       1423       110       365       639       1423       110       366       665       1516       110       366       665       1516  

AllianzGI Technology Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     1.29 %      1.29       1.19       1.14       1.29       1.19       0.90       0.90       0.90       0.90       0.90       0.90  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       None       None       None       0.25       0.25       1.00       None       None       None       0.25  

Other Expenses

     0.03 %      0.03       0.03       0.03       0.03       0.03       0.25       0.25       0.25       0.17       0.25       0.25  

Admin Fee

     *       *       *       *       *       *       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     1.57 %      2.32       1.22       1.17       1.32       1.47       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     None       None       None       None       None       None       1.40       2.15       1.15       1.07       1.15       1.40  

Expense Reductions

     None       None       None       None       None       None       None       None       None       None       None       None  

Total Annual Fund Operating Expenses After Expense Reductions(2)

     1.57 %      2.32       1.22       1.17       1.32       1.47       1.40       2.15       1.15       1.07       1.15       1.40  

 

1 

Based on net assets as of June 1, 2020.

2 

Per Prospectus dated August 27, 2020.

*

Management Fees under the Current IMA consist of both administration fees (including transfer agency costs) and advisory fees paid to AllianzGI U.S.

 

C-8

Appendix C

 

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 701     $ 1018     $ 1358     $ 2315     $ 701     $ 1018     $ 1358     $ 2315       685       969       1275       2139       685       969       1275       2139  

Class C

     335       724       1240       2656       235       724       1240       2656       318       674       1155       2485       218       674       1155       2485  

Institutional

     124       387       670       1477       124       387       670       1477       117       366       634       1400       117       366       634       1400  

Class R6

     119       372       644       1420       119       372       644       1420       109       340       590       1306       109       340       590       1306  

Class P

     134       418       723       1590       134       418       723       1590       117       366       634       1400       117       366       634       1400  

Administrative

     150       465       803       1757       150       465       803       1757       143       444       767       1682       143       444       767       1682  

Allianz Funds Multi-Strategy Trust

AllianzGI Convertible Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
P		     Administrative  

Management Fees

     0.57 %      0.57       0.57       0.57       0.57       0.57       0.57       0.57       0.57       0.57       0.57       0.57  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       0.25       0.25       1.00       0.50       None       None       0.25  

Other Expenses

     0.20 %      0.18       0.10       0.15       0.18       0.15       0.21       0.22       0.17       0.20       0.17       0.21  

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.02 %      1.75       1.17       0.72       0.75       0.97       1.04       1.79       1.25       0.77       0.75       1.03  

Expense Reductions(2)

     (0.06 )      (0.02 )      (0.00 )      (0.01 )      (0.01 )      (0.04 )      (0.08 )      (0.06 )      (0.08 )      (0.06 )      (0.01 )      (0.10 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

     0.96 %      1.73       1.17       0.71       0.74       0.93       0.96       1.73       1.17       0.71       0.74       0.93  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 0.96% for Class A shares, 1.73% for Class C shares, 1.17% for Class R shares, 0.71% for Institutional Class shares, 0.74% for Class P shares and 0.93% for Administrative Class shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

C-9

Appendix C

 

    Current IMA     Proposed IMA  
    Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 643     $ 851     $ 1077     $ 1724     $ 643     $ 851     $ 1077     $ 1724     $ 643     $ 847     $ 1,076     $ 1,733     $ 643     $ 847     $ 1,076     $ 1,733  

Class C

     276       549       947       2061       176       549       947       2061       276       552       959       2,098       176       552       959       2,098  

Class R

     119       372       644       1420       119       372       644       1420       119       380       669       1,492       119       380       669       1,492  

Institutional

     73       229       400       894       73       229       400       894       73       234       415       941       73       234       415       941  

Class P

     76       239       416       929       76       239       416       929       76       237       413       924       76       237       413       924  

Administrative

     95       305       532       1186       95       305       532       1186       95       307       549       1,241       95       307       549       1,241  

AllianzGI Core Plus Bond Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Institutional     Class
R6		     Class
P		     Institutional     Class
R6		     Class
P		  

Management Fees

     0.30 %      0.30       0.30       0.30       0.30       0.30  

Distribution and/or Service (12b-1) Fees

     None       None       None       None       None       None  

Other Expenses

     20.63 %      0.54       0.53       18.37       0.46       0.46  

Admin Fee

     [     ]      [     ]      [     ]      0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     20.93 %      0.84       0.83       18.67       0.76       0.76  

Expense Reductions(2)

     (20.63 )      (0.59 )      (0.48 )      (18.37 )      (0.51 )      (0.41 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

     0.30 %      0.25       0.35       0.30       0.25       0.35  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2022 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 0.30% for Institutional Class shares, 0.25% for Class R6 shares and 0.35% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do not
redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do not
redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Institutional

   $ 31     $ 2174     $ 5442     $ 10011     $ 31     $ 2174     $ 5442     $ 10011     $ 31     $ 1,970     $ 5,037     $ 9,078     $ 31     $ 1,970     $ 5,037     $ 9,078  

Class R6

     26       146       347       924       26       146       347       924       26       138       320       845       26       138       320       845  

Class P

     36       166       363       934       36       166       363       93       36       159       340       865       36       159       340       865  

AllianzGI Emerging Markets Consumer Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class A     Institutional     Class A     Institutional  

Management Fees(2)

     0.85 %      0.85       0.85       0.85  

Distribution and/or Service (12b-1) Fees

     0.25 %      None       0.25       None  

Other Expenses

     0.61 %      0.54       0.90       0.83  

Admin Fee

     [     ]      [     ]      0.09       0.09  

TA Fee

     [     ]      [     ]      0.04       0.04  

Total Annual Fund Operating Expenses

     1.71 %      1.39       2.00       1.68  

Expense Reductions(3)

     (0.32 )      (0.34 )      (0.61 )      (0.63 ) 

Total Annual Fund Operating Expenses After Expense Reductions(3)

    1.39 %      1.05       1.39       1.05  

 

C-10

Appendix C

 

1 

Based on net assets as of June 1, 2020.

2 

Effective July 1, 2019, the Manager contractually agreed to observe a permanent reduction in the Management Fee, which reduces the 0.90% contractual fee rate by 0.05% to 0.85%.

3 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 1.39% for Class A shares and 1.05% for Institutional Class shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
    Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do not
redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do not
redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 684     $ 1030     $ 1399     $ 2433     $ 684     $ 1030     $ 1399     $ 2433     $ 684     $ 1,028     $ 1,460     $ 2,656     $ 684     $ 1,028     $ 1,460     $ 2,656  

Institutional

     107       407       728       1639       107       407       728       1639       107       403       790       1,876       107       403       790       1,876  

AllianzGI Emerging Markets Value Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA      Proposed IMA(1)  

Share Class

    Class
A		     Class
C		     Institutional     Class
P		      Class
A		     Class
C		     Institutional     Class
P		  

Management Fees

      0.85 %      0.85       0.85       0.85        0.85       0.85       0.85       0.85  

Distribution and/or Service (12b-1) Fees

      0.25 %      1.00       None       None        0.25       1.00       None       None  

Other Expenses

      0.55 %      0.55       0.52       0.47        0.65       0.66       0.60       0.48  

Admin Fee

      [     ]      [     ]      [     ]      [     ]       0.09       0.09       0.09       0.09  

TA Fee

      [     ]      [     ]      [     ]      [     ]       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

      1.65 %      2.40       1.37       1.32        1.75       2.52       1.46       1.33  

Expense Reductions(2)

      (0.51 )      (0.51 )      (0.48 )      (0.34 )       (0.61 )      (0.63 )      (0.57 )      (0.35 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

      1.14 %      1.89       0.89       0.98        1.14       1.89       0.89       0.98  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 1.14% for Class A shares, 1.89% for Class C shares, 0.89% for Institutional Class shares and 0.98% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 660     $ 995     $ 1352     $ 2357     $ 660     $ 995     $ 1352     $ 2357     $ 660     $ 955     $ 1,337     $ 2,403     $ 660     $ 955     $ 1,337     $ 2,403  

Class C

     292       700       1234       2698       192       700       1234       2698       292       661       1,222       2,754       192       661       1,222       2,754  

Institutional

     91       387       704       1605       91       387       704       1605       91       346       684       1,641       91       684       684       1,641  

Class P

     100       385       691       1561       100       385       691       1561       100       351       661       1,542       100       351       661       1,542  

 

C-11

Appendix C

 

AllianzGI Global Allocation Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.70 %      0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.19 %      0.21       0.26       0.19       0.12       0.21       0.12       0.73       0.82       0.80       0.67       0.65       0.65       0.65  

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Acquired Fund Fees and Expenses

     0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.40       0.70  

Total Annual Fund Operating Expenses(2)

     1.54 %      2.31       1.86       1.29       1.22       1.31       1.47       1.68       2.52       2.00       1.37       1.35       1.35       1.60  

Expense Reductions(3) (4)

     (0.53 )      (0.55 )      (0.65 )      (0.55 )      (0.51 )      (0.50 )      (0.51 )      (0.67 )      (0.76 )      (0.79 )      (0.63 )      (0.64 )      (0.54 )      (0.64 ) 

Total Annual Fund Operating Expenses After Expense Reductions(3) (4)

     1.01 %      1.76       1.21       0.74       0.71       0.81       0.96       1.01       1.76       1.21       0.74       0.71       0.81       0.96  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses do not match the Ratio of Expenses to Average Net Assets of the Fund as set forth in the Financial Highlights table of the Fund’s prospectus, in part, because the Ratio of Expenses to Average Net Assets in the prospectus reflects the operating expenses of the Fund and does not include Acquired Fund Fees and Expenses.

3 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) has contractually agreed to irrevocably waive a portion of its management fee equal to 0.55% of the average daily net assets of the Fund that are attributable to investments in other mutual funds. This waiver with respect to investments in funds for which the Manager or an affiliated person thereof serves as investment adviser is terminable only by the Board of Trustees of the Trust, and the waiver with respect to investments in unaffiliated funds will continue through at least January 31, 2021.

4 

The Manager has contractually agreed, until January 31, 2021, to irrevocably waive its management fee, or reimburse the Fund, to the extent that, after the application of the fee waiver described in footnote 3 above, Total Annual Fund Operating Expenses, including Acquired Fund Fees and Expenses, but excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 1.01% for Class A shares, 1.76% for Class C shares, 1.21% for Class R shares, 0.71% for Class R6 shares, 0.74% for Institutional Class shares, 0.81% for Class P shares and 0.96% for Administrative Class shares of the Fund’s average net assets attributable to Class A shares, Class C shares, Class R shares, Class R6 shares, Institutional Class shares, Class P shares and Administrative Class shares, respectively. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 647     $ 961     $ 1296     $ 2241     $ 647     $ 961     $ 1296     $ 2241     $ 647     $ 923     $ 1,289     $ 2,317     $ 647     $ 923     $ 1,289     $ 2,317  

Class C

     279       669       1185       2603       179       669       1185       2603       279       635       1,200       2,737       179       635       1,200       2,737  

Class R

     157       554       976       2154       157       554       976       2154       123       470       928       2,198       123       470       928       2,198  

Class R6

     73       337       621       1432       73       337       621       1432       73       297       612       1,506       73       297       612       1,506  

Institutional

     76       355       655       1508       76       355       655       1508       76       306       627       1,537       76       306       627       1,537  

Class P

     83       366       670       1535       83       366       670       1535       83       318       632       1,524       83       318       632       1,524  

Administrative

     98       415       754       1714       98       415       754       1714       98       376       745       1,786       98       376       745       1,786  

AllianzGI Global Dynamic Allocation Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.70 %      0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70       0.70  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.30 %      0.31       0.38       0.24       0.21       0.33       0.22       0.78       0.77       0.91       0.79       0.69       0.69       0.69  

 

C-12

Appendix C

 

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Acquired Fund Fees and Expenses

     0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10       0.10  

Total Annual Fund Operating
Expenses(2)

     1.35 %      2.11       1.68       1.04       1.01       1.13       1.27       1.73       2.47       2.11       1.50       1.39       1.39       1.64  

Expense Reductions(3)

     (0.34 )      (0.33 )      (0.30 )      (0.30 )      (0.27 )      (0.29 )      (0.28 )      (0.72 )      (0.69 )      (0.73 )      (0.76 )      (0.65 )      (0.55 )      (0.65 ) 

Total Annual Fund Operating Expenses After Expense Reductions(3) (4)

     1.01 %      1.78       1.38       0.74       0.74       0.84       0.99       1.01       1.78       1.38       0.74       0.74       0.84       0.99  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses do not match the Ratio of Expenses to Average Net Assets of the Fund as set forth in the Financial Highlights table of the Fund’s prospectus, in part, because the Ratio of Expenses to Average Net Assets in the prospectus reflects the operating expenses of the Fund and does not include Acquired Fund Fees and Expenses.

3 

Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) has contractually agreed to irrevocably waive a portion of its management fee equal to 0.55% of the average daily net assets of the Fund that are attributable to investments in other mutual funds. This waiver with respect to investments in funds which the Manager or an affiliated person thereof serves as investment adviser is terminable only by the Board of Trustees of the Trust, and the waiver with respect to investments in unaffiliated funds will continue through at least January 31, 2021.

4 

The Manager has contractually agreed, until January 31, 2021, to irrevocably waive its management fee, or reimburse the Fund, to the extent that, after the application of the fee waiver described in footnote 3 above, Total Annual Fund Operating Expenses, including Acquired Fund Fees and Expenses, but excluding interest, tax, and extraordinary expenses and certain credits and other expenses, exceed 1.01% for Class A shares, 1.78% for Class C shares, 1.38% for Class R shares, 0.74% for Class R6 shares, 0.74% for Institutional Class shares, 0.84% for Class P shares and 0.99% for Administrative Class shares of the Fund’s average net assets attributable to Class A shares, Class C shares, Class R shares, Class R6 shares, Institutional Class shares, Class P shares and Administrative Class shares, respectively. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver or reimbursement. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 647     $ 922     $ 1218     $ 2057     $ 647     $ 922     $ 1218     $ 2057     $ 647     $ 928     $ 1,306     $ 2,362     $ 647     $ 928     $ 1,306     $ 2,362  

Class C

     281       629       1104       2415       181       629       1104       2415       281       634       1,188       2,699       181       634       1,188       2,699  

Class R

     140       500       884       1962       140       500       884       1962       140       516       995       2,319       140       516       995       2,319  

Class R6

     76       295       532       1212       76       295       532       1212       76       308       633       1,553       76       308       633       1,553  

Institutional

     76       301       545       1244       76       301       545       1244       76       320       668       1,652       76       320       668       1,652  

Class P

     86       330       594       1349       86       330       594       1349       86       329       653       1,571       86       329       653       1,571  

Administrative

     101       375       670       1509       101       375       670       1509       101       387       766       1,832       101       387       766       1,832  

AllianzGI Global Sustainability Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA     Proposed IMA(1)  

Share Class

    Class
A		     Institutional     Class
P		     Class
A		     Institutional     Class
P		  

Management Fees

      0.80 %      0.80       0.80       0.80       0.80       0.80  

Distribution and/or Service (12b-1) Fees

      0.25 %      None       None       0.25       None       None  

Other Expenses

      0.79 %      0.86       0.85       0.35       0.33       0.32  

Admin Fee

      [     ]      [     ]      [     ]      0.09       0.09       0.09  

TA Fee

      [     ]      [     ]      [     ]      0.04       0.04       0.04  

Total Annual Fund Operating Expenses

      1.84 %      1.66       1.65       1.40       1.13       1.12  

Expense Reductions(2)

      (0.90 )      (0.97 )      (0.86 )      (0.46 )      (0.44 )      (0.33 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

      0.94 %      0.69       0.79       0.94       0.69       0.79  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 0.94% for Class A shares, 0.69% for Institutional Class shares and 0.79% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, don’t exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

 

C-13

Appendix C

 

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 641     $ 1014     $ 1411     $ 2520     $ 641     $ 1014     $ 1411     $ 2520     $ 641     $ 881     $ 1,189     $ 2,062     $ 641     $ 881     $ 1,189     $ 2,062  

Institutional

     70       428       811       1884       70       428       811       1884       70       269       534       1,292       70       269       534       1,292  

Class P

     81       436       816       1882       81       436       816       1882       81       289       551       1,302       81       289       551       1,302  

AllianzGI High Yield Bond Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Administrative  

Management Fees

     0.48 %      0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       0.25       1.00       0.50       None       None       None       0.25  

Other Expenses

     0.34 %      0.28       0.50       0.31       0.15       0.25       0.21       0.54       0.45       0.76       0.47       0.34       0.34       0.35  

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.07 %      1.76       1.48       0.79       0.63       0.73       0.94       1.27       1.93       1.74       0.95       0.82       0.82       1.08  

Expense Reductions

     None       None       None       None       None       None       None       (0.20 )      (0.17 )      (0.26 )      (0.16 )      (0.19 )      (0.09 )      (0.14 ) 

Total Annual Fund Operating Expenses After Expense Reductions

     1.07 %      1.76       1.48       0.79       0.63       0.73       0.94       1.07       1.76       1.48       0.79       0.63       0.73       0.94  

 

1 

Based on net assets as of June 1, 2020.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 480     $ 703     $ 943     $ 1632     $ 480     $ 703     $ 943     $ 1632     $ 480     $ 723     $ 1,007     $ 1,814     $ 480     $ 723     $ 1,007     $ 1,814  

Class C

     279       554       954       2073       179       554       954       2073       279       572       1,010       2,225       179       572       1,010       2,225  

Class R

     151       468       808       1768       151       468       808       1768       151       496       893       2,004       151       496       893       2,004  

Class R6

     64       202       351       786       64       202       351       786       64       223       417       977       64       223       417       977  

Institutional

     81       252       439       978       81       252       439       978       81       270       494       1,139       81       270       494       1,139  

Class P

     75       233       406       906       75       233       406       906       75       244       438       1,001       75       244       438       1,001  

Administrative

     96       300       520       1155       96       300       520       1155       96       315       568       1,293       96       315       568       1,293  

 

C-14

Appendix C

 

AllianzGI International Small-Cap Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA    

 

     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		     Class
A		     Class
C		     Class
R		     Institutional     Class
R6		     Class
P		  

Management Fees

     1.00 %      1.00       1.00       1.00       1.00       1.00       1.00       1.00       1.00       1.00       1.00       1.00  

Distribution and/or Service (12b-1) Fees

     0.25 %      1.00       0.50       None       None       None       0.25       1.00       0.50       None       None       None  

Other Expenses

     0.69 %      0.59       0.80       0.61       0.49       0.58       0.83       0.73       0.88       0.71       0.54       0.54  

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     1.94 %      2.59       2.30       1.61       1.49       1.58       2.09       2.73       2.38       1.71       1.54       1.54  

Expense Reductions(2)

     (0.69 )      (0.59 )      (0.71 )      (0.57 )      (0.49 )      (0.48 )      (0.84 )      (0.73 )      (0.79 )      (0.67 )      (0.54 )      (0.44 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

     1.25 %      2.00       1.59       1.04       1.00       1.10       1.25       2.00       1.59       1.04       1.00       1.10  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 1.25% for Class A shares, 2.00% for Class C shares, 1.59% for Class R shares, 1.00% for Class R6 shares, 1.04% for Institutional Class shares and 1.10% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, don’t exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do not
redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 670     $ 1062     $ 1479     $ 2637     $ 670     $ 1062     $ 1479     $ 2637     $ 670     $ 1,010     $ 1,460     $ 2,704     $ 670     $ 1,010     $ 1,460     $ 2,704  

Class C

     303       749       1323       2881       203       749       1323       2881       303       705       1,311       2,950       203       705       1,311       2,950  

Class R

     162       650       1166       2581       162       650       1166       2581       162       587       1,122       2,590       162       587       1,122       2,590  

Class R6

     102       423       767       1738       102       423       767       1738       102       378       736       1,744       102       378       736       1,744  

Institutional

     106       452       822       1863       106       452       822       1863       106       404       800       1,907       106       404       800       1,907  

Class P

     112       452       815       1838       112       452       815       1838       398       398       755       1,761       398       398       755       1,761  

AllianzGI Preferred Securities and Income Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA     Proposed IMA(1)  

Share Class

    Institutional     Class
R6		     Class
P		     Institutional     Class
R6		     Class
P		  

Management Fees

      0.45 %      0.45       0.45       0.45       0.45       0.45  

Distribution and/or Service (12b-1) Fees

      None       None       None       None       None       None  

Other Expenses

      1.46 %      1.25       1.24       0.66       0.62       0.62  

Admin Fee

      [     ]      [     ]      [     ]      0.09       0.09       0.09  

TA Fee

      [     ]      [     ]      [     ]      0.04       0.04       0.04  

Total Annual Fund Operating Expenses

      1.91 %      1.70       1.69       1.12       1.07       1.07  

Expense Reductions(2)

      (1.36 )      (1.20 )      (1.09 )      (0.57 )      (0.57 )      (0.47 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

      0.55 %      0.50       0.60       0.55       0.50       0.60  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2022 to the extent that Total Annual Fund Operating Expenses excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 0.55% for Institutional Class shares, 0.50% for Class R6 shares and 0.60% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each

 

C-15

Appendix C

 

year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Institutional

   $ 56     $ 327     $ 770     $ 2,003     $ 56     $ 327     $ 770     $ 2,003     $ 56     $ 238     $ 501     $ 1,252     $ 56     $ 238     $ 501     $ 1,252  

Class R6

     51       293       690       1,801       51       293       690       1,801       51       223       475       1,196       51       223       475       1,196  

Class P

     61       313       706       1,809       61       313       706       1,809       61       243       495       1,215       61       243       495       1,215  

AllianzGI Short Duration High Income Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

    Current IMA     Proposed IMA(1)  

Share Class

   Class
A		     Class
C		     Institutional     Class
R6		     Class
P		     Class
A		     Class
C		     Institutional     Class
R6		     Class
P		  

Management Fees

     0.48 %      0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48       0.48  

Distribution and/or Service (12b-1) Fees

     0.25 %      0.50       None       None       None       0.25       0.50       None       None       None  

Other Expenses

     0.15 %      0.16       0.15       0.09       0.17       0.28       0.31       0.29       0.21       0.21  

Admin Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      0.09       0.09       0.09       0.09       0.09  

TA Fee

     [     ]      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

     0.88 %      1.14       0.63       0.57       0.65       1.01       1.29       0.77       0.69       0.69  

Expense Reductions(2)

     (0.02 )      (0.03 )      (0.03 )      (0.02 )      0.00       (0.15 )      (0.18 )      (0.17 )      (0.14 )      (0.04 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

     0.86 %      1.11       0.60       0.55       0.65       0.86       1.11       0.60       0.55       0.65  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AllianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 0.86% for Class A shares, 1.11% for Class C shares, 0.60% for Institutional Class shares, 0.65% for Class P shares and 0.55% for Class R6 shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, do not exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 311     $ 497     $ 700     $ 1283     $ 311     $ 497     $ 700     $ 1283     $ 311     $ 510     $ 742     $ 1,409     $ 311     $ 510     $ 742     $ 1,409  

Class C

     213       359       625       1383       113       359       625       1383       213       372       672       1,524       113       372       672       1,524  

Institutional

     61       199       348       783       61       199       348       783       61       212       395       926       61       212       395       926  

Class P

     66       208       362       810       66       208       362       810       66       213       376       851       66       213       376       851  

Class R6

     56       181       316       712       56       181       316       712       56       192       356       832       56       192       356       832  

AllianzGI Water Fund

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

     Current IMA     Proposed IMA(1)  

Share Class

    Class
A		     Class
C		     Institutional     Class
P		     Class
A		      Class
C		      Institutional      Class
P		  

Management Fees

      0.95 %      0.95       0.95       0.95       0.95        0.95        0.95        0.95  

Distribution and/or Service (12b-1) Fees

      0.25 %      1.00       None       None       0.25        1.00        None        None  

Other Expenses

      0.20 %      0.20       0.23       0.22       0.30        0.31        0.32        0.23  

Admin Fee

      [     ]      [     ]      [     ]      [     ]      0.09        0.09        0.09        0.09  

 

C-16

Appendix C

 

TA Fee

      [     ]      [     ]      [     ]      [     ]      0.04       0.04       0.04       0.04  

Total Annual Fund Operating Expenses

      1.40 %      2.15       1.18       1.17       1.50       2.26       1.27       1.18  

Expense Reductions(2)

      (0.18 )      (0.18 )      (0.25 )      (0.23 )      (0.28 )      (0.29 )      (0.34 )      (0.24 ) 

Total Annual Fund Operating Expenses After Expense Reductions(2)

      1.22 %      1.97       0.93       0.94       1.22       1.97       0.93       0.94  

 

1 

Based on net assets as of June 1, 2020.

2 

Total Annual Fund Operating Expenses After Expense Reductions reflect the effect of a contractual agreement by Allianz Global Investors U.S. LLC (“AIIianzGI U.S.” or the “Manager”) to irrevocably waive its management fee and/or reimburse the Fund through January 31, 2021 to the extent that Total Annual Fund Operating Expenses, excluding interest, tax, and extraordinary expenses, and certain credits and other expenses, exceed 1.22% for Class A shares, 1.97% for Class C shares, 0.93% for Institutional Class shares and 0.94% for Class P shares. Under the Expense Limitation Agreement, the Manager may recoup waived or reimbursed amounts for three years, provided total expenses, including such recoupment, don’t exceed the annual expense limit in effect at the time of such waiver/reimbursement or recoupment. The Expense Limitation Agreement is terminable by the Trust or by mutual agreement of the parties.

Examples. The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has a 5% return each year, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, the Examples show what your costs would be based on these assumptions. The Examples are based, for the first year, on Total Annual Fund Operating Expenses After Expense Reductions and, for all other periods, on Total Annual Fund Operating Expenses.

 

    Current IMA     Proposed IMA  
  Example: Assuming you
redeem your shares at the
end of each period		     Example: Assuming you do
not redeem your shares		     Example: Assuming you
redeem your shares at the end
of each period		     Example: Assuming you do
not redeem your shares		  

Share Class

   1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years     1 year     3 years     5 years     10 years  

Class A

   $ 667     $ 952     $ 1257     $ 2123     $ 667     $ 952     $ 1257     $ 2123     $ 667     $ 945     $ 1,272     $ 2,197     $ 667     $ 945     $ 1,272     $ 2,197  

Class C

     300       656       1138       2469       200       656       1138       2469       300       650       2,553       2,553       200       650       2,553       2,553  

Institutional

     95       350       625       1410       95       350       625       1410       95       334       630       1,471       95       334       630       1,471  

Class P

     96       349       621       1400       96       349       621       1400       96       326       602       1,389       96       326       602       1,389  

 

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Appendix D

 

Principal Executive Officers and Directors of Virtus

 

Name    Position with Virtus
George R. Aylward    Director, President and Chairman
Michael A. Angerthal    Director, Executive Vice President and Chief Financial Officer
Francis G. Waltman    Director, Executive Vice President
Kevin J. Carr    Vice President and Clerk
Jennifer Fromm    Assistant Clerk
David Fusco    Vice President and Chief Compliance Officer
David G. Hanley    Senior Vice President and Treasurer
Wendy J. Hills    Executive Vice President, General Counsel and Assistant Clerk
David Martin    Vice President

 

D-1

Appendix E

 

[ALLIANZ FUNDS]

[ALLIANZ FUNDS MULTI-STRATEGY TRUST]

SUBADVISORY AGREEMENT

[Date]

Allianz Global Investors U.S. LLC

1633 Broadway, Floor 41

New York, NY 10019

[NFJ Investment Group, LLC

Address]

RE:    Subadvisory Agreement

Ladies and Gentlemen:

[Allianz Funds] / [Allianz Funds Multi-Strategy Trust] (the “Trust”) is an open-end investment company of the series type registered under the Investment Company Act of 1940, as amended (the “Act”), and is subject to the rules and regulations promulgated thereunder. The shares of the Trust are offered or may be offered in several series (sometimes hereafter referred to as the “Series”).

Virtus Investment Advisers, Inc. (the “Adviser”) evaluates and recommends series advisers for the Series and is responsible for the day-to-day management of the Series.

 

1.

Appointment as a Subadviser. The Adviser, being duly authorized, hereby appoints [Allianz Global Investors U.S. LLC] / [NFJ Investment Group, LLC], a Delaware limited liability company (the “Subadviser”), as a discretionary series adviser to invest and reinvest the assets of the Series designated by the Adviser as set forth on Schedule F attached hereto (the “Designated Series”) on the terms and conditions set forth herein. The services of the Subadviser hereunder are not to be deemed exclusive; the Subadviser may render services to others and engage in other activities that do not conflict in any material manner with the Subadviser’s performance hereunder.

 

2.

Acceptance of Appointment; Standard of Performance. The Subadviser accepts its appointment as a discretionary series adviser of the Designated Series and agrees, subject to the oversight of the Board of Trustees of the Trust (the “Board”) and the Adviser, to use its best professional judgment to make investment decisions for the Designated Series in accordance with the provisions of this Agreement and as set forth in Schedule D attached hereto and made a part hereof. The Subadviser shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority or obligation to act for or represent the Adviser, the Trust or the Series in any way.

 

3.

Services of Subadviser. In providing management services to the Designated Series, the Subadviser shall be subject to the investment objectives, policies and restrictions of the Trust as they apply to the Designated Series and as set forth in the Trust’s then current prospectus (“Prospectus”) and statement of additional information (“Statement of Additional Information”) filed with the Securities and Exchange Commission (the “SEC”) as part of the Trust’s registration statement (the “Registration Statement”), as may be periodically amended and provided to the Subadviser by the Adviser, and to the investment restrictions set forth in the Act and the Rules thereunder, to the supervision and control of the Board, and to instructions from the Adviser. The Subadviser shall not, without the Trust’s prior written approval, effect any transactions that would cause

 

E-1

  the Designated Series at the time of the transaction to be out of compliance with any of such restrictions or policies. The Adviser agrees to provide the Subadviser with such assistance as may be reasonably requested by the Subadviser to facilitate the Subadviser’s services under this Subadvisory Agreement, including, without limitation, providing information concerning the Trust and Designated Series, contact information for parties to provide information about funds available or to become available for investment, and information generally as to the conditions of the Designated Series or the Trust’s affairs.

 

4.

Transaction Procedures. All series transactions for the Designated Series shall be consummated by payment to, or delivery by, the custodian(s) from time to time designated by the Trust (the “Custodian”), or such depositories or agents as may be designated by the Custodian in writing, of all cash and/or securities due to or from the Series. The Subadviser shall not have possession or custody of such cash and/or securities or any responsibility or liability with respect to such custody. The Subadviser shall advise the Custodian and confirm in writing to the Trust all investment orders for the Designated Series placed by it with brokers and dealers at the time and in the manner set forth in Schedule A hereto (as amended from time to time). The Trust shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by the Subadviser. The Trust shall instruct the Custodian to (a) carry out all investment instructions as may be directed by the Subadviser with respect to a Designated Series (which instructions may be orally given if confirmed in writing to the extent the Custodian accepts such manner of transmission); and (b) provide the Subadviser with all operational information in the Custodian’s possession that is reasonably necessary for the Subadviser to trade on behalf of the Designated Series. The Trust shall be responsible for all custodial arrangements and the payment of all custodial charges and fees, and, upon giving proper instructions to the Custodian, the Subadviser shall have no responsibility or liability with respect to custodial arrangements or the acts, omissions or other conduct of the Custodian. The Trust or the Adviser shall notify the Subadviser of the identities of its custodian banks and custody arrangements therewith with respect to the Designated Series and shall give the Subadviser written notice of any changes in such custodian banks or custody arrangements.

 

5.

Allocation of Brokerage. The Subadviser shall have authority and discretion to select brokers and dealers to execute Designated Series transactions initiated by the Subadviser, and to select the markets on or in which the transactions will be executed.

 

  A.

In placing orders for the sale and purchase of Designated Series securities for the Trust, the Subadviser’s primary responsibility shall be to seek the best execution of orders at the most favorable prices. However, this responsibility shall not obligate the Subadviser to solicit competitive bids for each transaction or to seek the lowest available commission cost to the Trust, as long as the Subadviser reasonably believes that the broker or dealer selected by it can be expected to obtain a “best execution” market price on the particular transaction and determines in good faith that the commission cost is reasonable in relation to the value of the brokerage and research services (as defined in Section 28(e)(3) of the Securities Exchange Act of 1934, as amended) provided by such broker or dealer to the Subadviser, viewed in terms of either that particular transaction or of the Subadviser’s overall responsibilities with respect to its clients, including the Trust, as to which the Subadviser exercises investment discretion, notwithstanding that the Trust may not be the direct or exclusive beneficiary of any such services or that another broker may be willing to charge the Trust a lower commission on the particular transaction.

 

  B.

The Subadviser may manage other portfolios and expects that the Trust and other portfolios the Subadviser manages will, from time to time, purchase or sell the same securities. The Subadviser may aggregate orders for the purchase or sale of securities on behalf of the Designated Series with orders on behalf of other portfolios the Subadviser manages. Securities purchased or proceeds of securities sold through aggregated orders, as well as expenses incurred in the transaction, shall be allocated to the account of each portfolio managed by the Subadviser that bought or sold such securities in a manner considered by the Subadviser to be equitable and consistent with the Subadviser’s fiduciary obligations in respect of the Designated Series and to such other accounts. It is recognized that in some cases, this procedure may adversely affect the price paid or received by a Designated Series or the size of the position obtainable for, or disposed of by, the Designated Series.

 

E-2

  C.

The Subadviser shall not execute any transactions for the Designated Series with a broker or dealer that is an “affiliated person” (as defined in the Act) of (i) the Designated Series; (ii) another series of the Trust; (iii) the Adviser; (iv) the Subadviser or any other subadviser to the Designated Series; (v) a principal underwriter of the Trust’s shares; or (vi) any other affiliated person of the Series, in each case, unless such transactions are permitted by applicable law or regulation and carried out in compliance with any applicable policies and procedures of the Trust. The Trust shall provide the Subadviser with a list of brokers and dealers that are “affiliated persons” of the Trust, the Adviser or the principal underwriter, and applicable policies and procedures. Upon the request of the Adviser, the Subadviser shall promptly, and in any event within three business days of a request, indicate whether any entity identified by the Adviser in such request is an “affiliated person,” as such term is defined in the Act, of (i) the Subadviser or (ii) any affiliated person of the Subadviser, subject in each case to any confidentiality requirements applicable to the Subadviser and/or its affiliates. Further, the Subadviser shall provide the Adviser with a list of (x) each broker-dealer entity that is an “affiliated person,” as such term is defined in the Act, of the Subadviser and (y) each affiliated person of the Subadviser that has outstanding publicly-issued debt or equity. Each of the Adviser and the Subadviser agrees promptly to update such list(s) whenever the Adviser or the Subadviser becomes aware of any changes that should be added to or deleted from such list of affiliated persons.

 

  D.

Consistent with its fiduciary obligations to the Trust in respect of the Designated Series and the requirements of best price and execution, the Subadviser may, under certain circumstances, arrange to have purchase and sale transactions effected directly between the Designated Series and another account managed by the Subadviser (“cross transactions”), provided that such transactions are carried out in accordance with applicable law or regulation and any applicable policies and procedures of the Trust. The Trust shall provide the Subadviser with applicable policies and procedures.

 

6.

Proxies and Other Shareholder Actions.

 

  A.

Unless the Adviser or the Trust gives the Subadviser written instructions to the contrary, the Subadviser, or a third party designee acting under the authority and supervision of the Subadviser, shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the assets of the Designated Series. Unless the Adviser or the Trust gives the Subadviser written instructions to the contrary, provided that the Adviser has reviewed the Subadviser’s proxy voting procedures then in effect and determined them to comply with the requirements of the Trust’s proxy voting policy, the Subadviser will, in compliance with the Subadviser’s proxy voting procedures then in effect, vote or abstain from voting, all proxies solicited by or with respect to the issuers of securities in which assets of the Designated Series may be invested. The Adviser shall cause the Custodian, the Administrator or another party, to forward promptly to the Subadviser all proxies upon receipt, so as to afford the Subadviser a reasonable amount of time in which to determine how to vote such proxies. The Subadviser agrees to provide the Adviser in a timely manner with any changes to the Subadviser’s proxy voting procedures. The Subadviser further agrees to provide the Adviser in a timely manner with a record of votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Trust to file Form N-PX as required by Rule 30b1-4 under the Act. The Subadviser shall provide disclosure regarding its proxy voting policies and procedures in accordance with the requirements of Form N-1A for inclusion in the Registration Statement of the Trust. During any annual period in which the Subadviser has voted proxies for the Trust, the Subadviser shall, as may reasonably be requested by the Adviser, certify as to its compliance with its proxy voting policies and procedures and applicable federal statutes and regulations.

 

  B.

The Subadviser is authorized to deal with reorganizations, exchange offers and other voluntary corporate actions with respect to securities held in the Designated Series in such manner as the Subadviser deems advisable, unless the Trust or the Adviser otherwise specifically directs in writing. It is acknowledged and agreed that the Subadviser shall not be responsible for the filing of claims (or otherwise causing the Trust

 

E-3

  to participate) in class action settlements or similar proceedings in which shareholders may participate related to securities currently or previously associated with the Designated Series. With the Adviser’s approval, on a case-by-case basis the Subadviser may obtain the authority and take on the responsibility to: (i) identify, evaluate and pursue legal claims, including commencing or defending suits, affecting the securities held at any time in the Designated Series, including claims in bankruptcy, class action securities litigation and other litigation; (ii) participate in such litigation or related proceedings with respect to such securities as the Subadviser deems appropriate to preserve or enhance the value of the Designated Series, including filing proofs of claim and related documents and serving as “lead plaintiff” in class action lawsuits; (iii) exercise generally any of the powers of an owner with respect to the supervision and management of such rights or claims, including the settlement, compromise or submission to arbitration of any claims, the exercise of which the Subadviser deems to be in the best interest of the Designated Series or required by applicable law, including ERISA, and (iv) employ suitable agents, including legal counsel, and to pay their reasonable fees, expenses and related costs from the Designated Series.

 

7.

Prohibited Conduct. In accordance with Rule 12d3-1 and Rule 17a-10 under the 1940 Act and any other applicable law or regulation, the Subadviser’s responsibility regarding investment advice hereunder is limited to the Designated Series, and the Subadviser will not consult with any other investment advisory firm that provides investment advisory services to the Trust or any other investment company sponsored by Virtus Investment Partners, Inc. or its affiliates regarding transactions in securities or other assets for the Trust. The Trust shall provide the Subadviser with a list of investment companies sponsored by Virtus Investment Partners, Inc. and its affiliates, and the Subadviser shall be in breach of the foregoing provision only if the investment company is included in such a list provided to the Subadviser prior to such prohibited action. The Subadviser, and its affiliates and agents, shall refrain from making any written or oral statements concerning the Designated Series, the Trust, any other investment company sponsored by Virtus Investment Partners, Inc. or its affiliates, and any substantially similar products, that are reasonably likely to mislead investors regarding either (i) the services rendered by the Subadviser to the Designated Series or the Trust, or (ii) the Designated Series, including without limitation with respect to the investment strategies and/or risks, and/or the performance thereof. In addition, the Subadviser shall not, without the prior written consent of the Trust and the Adviser, delegate any obligation assumed pursuant to this Agreement to any affiliated or unaffiliated third party. The parties acknowledge and agree that the Subadviser may, in its discretion, utilize personnel employed by affiliates of the Subadviser to perform services pursuant to this Agreement by way of a “participating affiliate” agreement in accordance with, and to the extent permitted by, the Act and the Investment Advisers Act of 1940, as amended (the “Advisers Act”), including the published interpretations thereof by the SEC or its staff. Such participating affiliate agreement shall subject the personnel providing such services to the Subadviser’s compliance and other programs with respect to their activities on behalf of the Designated Series. For the avoidance of doubt, it is acknowledged and agreed that the Subadviser assumes full responsibility for all actions, and any failure to act, by each person utilized by the Subadviser to perform services under this Agreement.

 

8.

Information and Reports.

 

  A.

The Subadviser shall keep the Trust and the Adviser informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Designated Series. In this regard, the Subadviser shall provide the Trust, the Adviser and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement as the Trust and the Adviser may from time to time reasonably request. In addition, prior to each meeting of the Board, the Subadviser shall provide the Adviser and the Board with reports regarding the Subadviser’s management of the Designated Series during the most recently completed quarter, which reports: (i) shall include Subadviser’s representation that its performance of its investment management duties hereunder is in compliance with the Designated Series’ investment objectives and practices, the Act and applicable rules and regulations under the Act, and the diversification and minimum “good income” requirements of Subchapter M under the Internal Revenue Code of 1986, as amended, and (ii) otherwise shall be in such form as may be reasonably required by the Adviser.

 

E-4

  B.

Each of the Adviser and the Subadviser shall provide the other party with a list, to the best of the Adviser’s or the Subadviser’s respective knowledge, of each affiliated person (and any affiliated person of such an affiliated person) of the Adviser or the Subadviser, as the case may be, and each of the Adviser and Subadviser agrees promptly to update such list whenever the Adviser or the Subadviser becomes aware of any changes that should be added to or deleted from the list of affiliated persons.

 

  C.

The Subadviser shall also provide the Adviser with any information reasonably requested by the Adviser regarding its management of the Designated Series required for any shareholder report, amended Registration Statement, or Prospectus supplement to be filed by the Trust with the SEC.

 

  D.

The Subadviser shall promptly notify the Adviser and the Trust in the event that any of the Subadviser’s employees or contractors raise any issues concerning any actual or potential material violation of any law, regulation or internal policy of the Subadviser, in each case actually or potentially affecting the Designated Series.

 

9.

Fees for Services. The compensation of the Subadviser for its services under this Agreement shall be calculated and paid by the Adviser in accordance with the attached Schedule C. Pursuant to the Investment Advisory Agreement between the Trust and the Adviser, the Adviser is solely responsible for the payment of fees to the Subadviser.

 

10.

Limitation of Liability. Absent the Subadviser’s breach of this Agreement or the willful misconduct, bad faith, gross negligence, or reckless disregard of the obligations or duties hereunder on the part of the Subadviser, or its officers, directors, partners, agents, employees and controlling persons, the Subadviser shall not be liable for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any position; provided, however, that the Subadviser shall be responsible for, and shall indemnify and hold the Trust and the Adviser and each of their respective directors or trustees, members, officers, employees and shareholders, and each person, if any, who controls the Trust or the Adviser within the meaning of Section 15 of the Securities Act of 1933, as amended (the “Securities Act”), harmless against, any and all Losses (as defined below) arising out of or resulting from a “Trade Error” (as defined in the compliance policies and procedures of the Trust and/or the Subadviser), as the same may be amended from time to time) caused by the negligent action or negligent omission of the Subadviser or its agent. The Adviser agrees to provide prior written notice to the Subadviser of any material changes to the definition of Trade Error becoming effective with respect to the Designated Series unless, in the reasonable discretion of the Adviser, such change must become effective earlier due to any applicable law, rule, regulation or court order. It is acknowledged and agreed that any Trade Error that results in a gain to the Series shall inure to the benefit of the Series. For the avoidance of doubt, it is acknowledged and agreed that the Series is a third party beneficiary of the indemnity granted in this Section 10, and the indemnity is intended to cover claims by the Series, the Trust (on behalf of the Series), or the Adviser against the Subadviser for recovery pursuant to this section.

 

11.

Confidentiality. Subject to the duty of the Subadviser and the Trust to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Designated Series and the actions of the Subadviser and the Trust in respect thereof. Notwithstanding the foregoing, the Trust and the Adviser agree that the Subadviser may (i) disclose in marketing materials and similar communications that the Subadviser has been engaged to manage assets of the Designated Series pursuant to this Agreement, and (ii) include performance statistics regarding the Designated Series in composite performance statistics regarding one or more groups of Subadviser’s clients published or included in any of the foregoing communications, provided that the Subadviser does not identify any performance statistics as relating specifically to the Series.

 

12.

Assignment. This Agreement shall terminate automatically in the event of its assignment, as that term is defined in Section 2(a)(4) of the Act. The Subadviser shall notify the Trust and the Adviser in writing sufficiently in advance of any proposed change of control, as defined in Section 2(a)(9) of the Act, as will enable the Trust to consider whether an assignment as defined in Section 2(a)(4) of the Act will occur, and to take the steps necessary to enter into a new contract with the Subadviser.

 

E-5

13.

Representations, Warranties and Agreements of the Subadviser. The Subadviser represents, warrants and agrees that:

 

  A.

It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which failure to be so qualified would reasonably be expected to have a material adverse effect upon it. It (i) is registered as an “investment adviser” under the Investment Advisers Act of 1940, as amended (“Advisers Act”) and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the Act or the Advisers Act from performing the services contemplated by this Agreement; provided, however, that the Subadviser makes no representation or warranty with regard to the approval of this Agreement by the Board under Section 15 of the Act; (iii) has appointed a Chief Compliance Officer under Rule 206(4)-7 under the Advisers Act; (iv) has adopted written policies and procedures that are reasonably designed to prevent violations of the Advisers Act from occurring, and correct promptly any violations that have occurred, and will provide notice promptly to the Adviser of any material violations relating to the Trust; (v) has materially met and will seek to continue to meet for so long as this Agreement remains in effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency.

 

  B.

It is either registered as a commodity trading advisor or duly exempt from such registration with the U.S. Commodity Futures Trading Commission (“CFTC”), and it will maintain such registration or exemption continuously during the term of this Agreement or, alternatively, will become a commodity trading advisor duly registered with the CFTC and will be a member in good standing with the National Futures Association.

 

  C.

It will maintain, keep current and preserve on behalf of the Trust, records in the manner required or permitted by the Act and the Rules thereunder including the records identified in Schedule B (as Schedule B may be amended from time to time). The Subadviser agrees that such records are the property of the Trust, and shall be surrendered to the Trust or to the Adviser as agent of the Trust promptly upon request of either. The Trust acknowledges that the Subadviser may retain copies of all records required to meet the record retention requirements imposed by law and regulation.

 

  D.

It shall maintain a written code of ethics (the “Code of Ethics”) complying with the requirements of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Act and shall provide the Trust and the Adviser with a copy of the Code of Ethics and evidence of its adoption. It shall institute procedures reasonably necessary to prevent Access Persons (as defined in Rule 17j-1) from violating its Code of Ethics. The Subadviser acknowledges receipt of the written code of ethics adopted by and on behalf of the Trust. Each calendar quarter while this Agreement is in effect, a duly authorized compliance officer of the Subadviser shall certify to the Trust and to the Adviser that the Subadviser has complied with the requirements of Rules 204A-1 and 17j-1 during the previous calendar quarter and that there has been no material violation of its Code of Ethics, or of Rule 17j-1(b), or that any persons covered under its Code of Ethics has divulged or acted upon any material, non-public information, as such term is defined under relevant securities laws, and if such a violation of the code of ethics of the Trust has occurred, or if such a violation of its Code of Ethics has occurred, that appropriate action was taken in response to such violation. The Subadviser shall notify the Adviser promptly of any material violation of the Code of Ethics involving the Trust. The Subadviser will provide such additional information regarding violations of the Code of Ethics directly affecting the Trust as the Trust or its Chief Compliance Officer on behalf of the Trust or the Adviser may reasonably request

 

E-6

  in order to assess the functioning of the Code of Ethics or any harm caused to the Trust from a violation of the Code of Ethics. Further, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, nonpublic information by the Subadviser and its employees. The Subadviser will explain what it has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish to the Trust and the Adviser a written report which complies with the requirements of Rule 17j-1 concerning the Subadviser’s Code of Ethics. The Subadviser shall permit the Trust and the Adviser to examine the reports required to be made by the Subadviser under Rules 204A-1(b) and 17j-1(d)(1) and this subparagraph.

 

  E.

It has adopted and implemented, and throughout the term of this Agreement shall maintain in effect and implement, policies and procedures reasonably designed to prevent, detect and correct violations by the Subadviser and its supervised persons, and, to the extent the activities of the Subadviser in respect of the Trust could affect the Trust, by the Trust, of “federal securities laws” (as defined in Rule 38a-1 under the Act), and that the Subadviser has provided the Trust with true and complete copies of its policies and procedures (or summaries thereof) and related information reasonably requested by the Trust and/or the Adviser. The Subadviser agrees to cooperate with periodic reviews by the Trust’s and/or the Adviser’s compliance personnel of the Subadviser’s policies and procedures, their operation and implementation and other compliance matters and to provide to the Trust and/or the Adviser from time to time such additional information and certifications in respect of the Subadviser’s policies and procedures, compliance by the Subadviser with federal securities laws and related matters as the Trust’s and/or the Adviser’s compliance personnel may reasonably request. The Subadviser agrees to promptly notify the Adviser of any compliance violations which affect the Designated Series.

 

  F.

The Subadviser will immediately notify the Trust and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9 of the Act or otherwise. The Subadviser will also immediately notify the Trust and the Adviser if it is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, including but not limited to the SEC and the CFTC, involving the affairs of the Designated Series.

 

  G.

To the best of its knowledge, there are no material pending, threatened, or contemplated actions, suits, proceedings, or investigations before or by any court, governmental, administrative or self-regulatory body, board of trade, exchange, or arbitration panel to which it or any of its directors, officers, employees, partners, shareholders, members or principals, or any of its affiliates is a party or to which it or its affiliates or any of its or its affiliates’ assets are subject, nor has it or any of its affiliates received any notice of an investigation, inquiry, or dispute by any court, governmental, administrative, or self-regulatory body, board of trade, exchange, or arbitration panel regarding any of its or their activities, which might reasonably be expected to result in (i) a material adverse effect on the Trust or (ii) a material adverse change in the Subadviser’s condition (financial or otherwise) or business, or which might reasonably be expected to materially impair the Subadviser’s ability to discharge its obligations under this Agreement. The Subadviser will also immediately notify the Trust and the Adviser if the representation in this Section 13.G is no longer accurate.

 

  H.

The Subadviser shall promptly notify the Adviser of any changes in its executive officers, partners or in its key personnel, including, without limitation, any change in the portfolio manager(s) responsible for the Designated Series or if there is an actual or expected change in control or management of the Subadviser.

 

14.

No Personal Liability. A copy of the Trust’s Agreement and Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on

 

E-7

  behalf of the Trustees of the Trust as Trustees and not individually and that the obligations of the Trust pursuant to this instrument (if any) are not binding upon any of the Trustees or shareholders individually but are binding only upon the assets and property of the Trust. Without limiting the generality of the foregoing, neither the Subadviser nor any of its officers, directors, partners, shareholders or employees shall, under any circumstances, have recourse or cause or willingly permit recourse to be had directly or indirectly to any personal, statutory, or other liability of any shareholder, Trustee, officer, agent or employee of the Trust or of any successor of the Trust, whether such liability now exists or is hereafter incurred for claims against the trust estate.

 

15.

Entire Agreement; Amendment. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be amended at any time, but only by written agreement among the Subadviser, the Adviser and the Trust, which amendment, other than amendments to Schedules A, B, D, E and F, is subject to the approval of the Board (including those trustees who are not “interested persons” of the Trust) and, if required by the Act or applicable SEC rules and regulations, a vote of a majority of the Series’ outstanding voting securities; provided, however, that, notwithstanding the foregoing, this Agreement may be amended or terminated in accordance with any exemptive order issued to the Adviser, the Trust or its affiliates.

 

16.

Effective Date; Term. This Agreement shall take effect as of the date hereof, and shall remain in effect, unless sooner terminated as provided herein, with respect to a Series for a period of two years following the date set forth on the attached Schedule F. This Agreement shall continue thereafter from year to year only so long as its continuance has been specifically approved at least annually (i) by a vote of the Board of the Trust or by vote of a majority of outstanding voting securities of the Designated Series and (ii) by vote of a majority of the trustees who are not interested persons of the Trust (as defined in the Act) or of any person party to this Agreement, cast in person (or otherwise, as consistent with applicable laws, regulations and related guidance and relief) at a meeting called for the purpose of such approval.

 

17.

Termination.

 

  A.

This Agreement may be terminated at any time without payment of any penalty (i) by the Board, or by a vote of a majority of the outstanding voting securities of the Designated Series, upon 60 days’ prior written notice to the Adviser and the Subadviser, (ii) by the Subadviser upon 60 days’ prior written notice to the Adviser and the Trust, or (iii) by the Adviser upon 60 days’ prior written notice to the Subadviser. This Agreement may also be terminated, without the payment of any penalty, by the Adviser or the Board immediately (i) upon the material breach by the Subadviser of this Agreement or (ii) at the terminating party’s discretion, if the Subadviser or any officer, director or key portfolio manager of the Subadviser is accused in any regulatory, self-regulatory or judicial investigation or proceeding as having violated the federal securities laws or engaged in criminal conduct.

 

  B.

This Agreement may also be terminated, without the payment of any penalty, by the Subadviser immediately (i) upon the material breach by the Adviser of this Agreement or (ii) at the discretion of the Subadviser, if the Adviser or any officer or director of the Adviser is accused in any regulatory, self-regulatory or judicial investigation or proceeding as having violated the federal securities laws or engaged in criminal conduct. This Agreement shall terminate automatically and immediately upon termination of the Investment Advisory Agreement. This Agreement shall terminate automatically and immediately in the event of its assignment, as such term is defined in and interpreted under the terms of the 1940 Act and the rules promulgated thereunder. Termination of this Agreement will not affect any outstanding orders or transactions or any legal rights or obligations which may already have arisen. Transactions in progress at the date of termination will be completed by the Subadviser as soon as reasonably practicable. Provisions of this Agreement relating to indemnification and the preservation of records, as well as any responsibilities or obligations of the parties hereto arising from matters initiated prior to termination, shall survive any termination of this Agreement.

 

E-8

18.

Applicable Law. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of The Commonwealth of Massachusetts applicable to contracts entered into and fully performed within The Commonwealth of Massachusetts.

 

19.

Severability. If any term or condition of this Agreement shall be invalid or unenforceable to any extent or in any application, then the remainder of this Agreement shall not be affected thereby, and each and every term and condition of this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

20.

Notices. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered personally or by overnight delivery service or mailed by certified or registered mail, return receipt requested and postage prepaid, or sent by facsimile or e-mail transmission addressed to the parties at their respective addresses set forth below, or at such other address as shall be designated by any party in a written notice to the other party.

 

  (a)

To the Adviser or the Trust at:

[                                             ]

Attn: [                    ]

Telephone: [                    ]

Facsimile: [                    ]

Email: [                    ]

 

  (b)

To the Subadviser at:

[Allianz Global Investors U.S. LLC

1633 Broadway, Floor 41

New York, NY 10019

Attn: [                    ]

Telephone: [                    ]

Facsimile: [                    ]

Email: [                    ]]

[NFJ Investment Group, LLC

Address

Attn: [                    ]

Telephone: [                    ]

Facsimile: [                    ]

Email: [                    ]]

 

21.

Certifications. The Subadviser shall timely provide to the Adviser and the Trust, all information and documentation they may reasonably request as necessary or appropriate in order for the Adviser and the Board to oversee the activities of the Subadviser and in connection with the compliance by any of them with the requirements of this Agreement, the Registration Statement, the policies and procedures referenced herein, and any applicable law, including, without limitation, (i) information and commentary relating to the Subadviser or the Designated Series for the Trust’s annual and semi-annual reports, in a format reasonably approved by the Adviser, together with (A) a certification that such information and commentary discuss all of the factors that materially affected the performance of the Series, including the relevant market conditions and the investment techniques and strategies used and (B) additional certifications related to the Subadviser’s management of the Trust in order to support the Trust’s filings on Form N-CSR and other applicable forms, and the Trust’s Principal Executive Officer’s and Principal Financial

 

E-9

  Officer’s certifications under Rule 30a-2 under the Act, thereon; (ii) within 5 business days of a quarter-end, a quarterly certification with respect to compliance and operational matters related to the Subadviser and the Subadviser’s management of the Designated Series (including, without limitation, compliance with the applicable procedures), in a format reasonably requested by the Adviser, as it may be amended from time to time; and (iii) an annual certification from the Subadviser’s Chief Compliance Officer, appointed under Rule 206(4)-7 under the Advisers Act with respect to the design and operation of the Subadviser’s compliance program, in a format reasonably requested by the Adviser or the Trust. Without limiting the foregoing, the Subadviser shall provide a semiannual certification in a form substantially similar to that attached as Schedule E.

 

22.

Indemnification.

 

  A.

The Subadviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities, or damages (including reasonable attorney’s fees and other related expenses) (collectively, “Losses”) arising from the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Subadviser’s obligation under this Section 22 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Adviser, is caused by or is otherwise directly related to (i) any breach by the Adviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Adviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Registration Statement, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Trust or the omission to state therein a material fact known to the Adviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Subadviser or the Trust, or the omission of such information, by the Adviser for use therein.

 

  B.

The Adviser shall indemnify and hold harmless the Subadviser from and against any and all Losses arising from the Adviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties under this Agreement in the performance of its obligations under this Agreement; provided, however, that the Adviser’s obligation under this Section 22 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Subadviser, is caused by or is otherwise directly related to (i) any breach by the Subadviser of its representations or warranties made herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence of the Subadviser in the performance of any of its duties or obligations hereunder, or (iii) any untrue statement of a material fact contained in the Registration Statement, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Trust or the omission to state therein a material fact known to the Subadviser that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Adviser or the Trust, or the omission of such information, by the Subadviser for use therein.

 

  C.

A party seeking indemnification hereunder (the “Indemnified Party”) will (i) provide prompt written notice to the other of any claim (“Claim”) for which it intends to seek indemnification, (ii) grant control of the defense and /or settlement of the Claim to the other party, and (iii) cooperate with the other party in the defense thereof. The Indemnified Party will have the right at its own expense to participate in the defense of any Claim, but will not have the right to control the defense, consent to judgment or agree to the settlement of any Claim without the written consent of the other party. The party providing the indemnification will not consent to the entry of any judgment or enter any settlement which (i) does not include, as an unconditional term, the release by the claimant of all liabilities for Claims against the Indemnified Party or (ii) which otherwise adversely affects the rights of the Indemnified Party.

 

E-10

  D.

No party will be liable to another party for consequential damages under any provision of this Agreement.

 

23.

Receipt of Disclosure Documents. The Trust and the Adviser acknowledge receipt, at least 48 hours prior to entering into this Agreement, of a copy of Part 2 of the Subadviser’s Form ADV containing certain information concerning the Subadviser and the nature of its business. The Subadviser will, promptly after making any amendment to its Form ADV, furnish a copy of such amendment to the Adviser. On an annual basis and upon request, the Subadviser will provide a copy of its audited financial statements, including balance sheets, for the two most recent fiscal years and, if available, each subsequent fiscal quarter. At the time of providing such information, the Subadviser shall describe any material adverse change in its financial condition since the date of its latest financial statement.

 

24.

Use of Names. The parties agree that the names of the Subadviser, the names of any affiliates of the Subadviser and any derivative or logo or trademark or service mark or trade name of each (collectively, “Subadviser’s Marks”) are the valuable property of the Subadviser, and its affiliates. Accordingly, the Adviser and the Designated Series shall have the right to use Subadviser’s Marks only as set forth in the Trademark License Agreement by and between the Allianz SE, Virtus Investment Advisers, Inc., and VP Distributors, LLC.

 

25.

Counterparts; Fax Signatures. This Agreement may be executed in any number of counterparts (including executed counterparts delivered and exchanged by facsimile transmission) with the same effect as if all signing parties had originally signed the same document, and all counterparts shall be construed together and shall constitute the same instrument. For all purposes, signatures delivered and exchanged by facsimile transmission shall be binding and effective to the same extent as original signatures.

 

26.

Bankruptcy and Related Events. Each of the Adviser and the Subadviser agrees that it will provide prompt notice to the other in the event that: (i) it makes an assignment for the benefit of creditors, files a voluntary petition in bankruptcy, or is otherwise adjudged bankrupt or insolvent by a court of competent jurisdiction; or (ii) a material event occurs that could reasonably be expected to adversely impair its ability to perform this Agreement. The Adviser further agrees that it will provide prompt notice to the Subadviser in the event that the Trust ceases to be registered as an investment company under the Act.

[signature page follows]

 

E-11

[ALLIANZ FUNDS]/[ALLIANZ FUNDS MULTI-STRATEGY TRUST]
By:                                                                        
  Name:
  Title:
VIRTUS [                    ]
By:                                                                        
  Name:
  Title:
 

ACCEPTED:

[ALLIANZ GLOBAL INVESTORS U.S. LLC]

[NFJ INVESTMENT GROUP, LLC]

 

By:    
  Name:
  Title:

SCHEDULES:                 A.    Operational Procedures

B.    Record Keeping Requirements

C.    Fee Schedule

D.    Subadviser Functions

E.    Form of Sub-Certification

F.    Designated Series

 

E-12

SCHEDULE A

OPERATIONAL PROCEDURES

In order to minimize operational problems, it will be necessary for a flow of information to be supplied in a secure manner by Subadviser to the Trust’s service providers, including: [    ] (the “Custodian”), Virtus Fund Services, LLC (the “Fund Administrator”), [    ] (the “Sub-Accounting Agent”), [                             (the “Prime Broker”)] and all other Counterparties/Brokers as required.

The Subadviser must furnish the Trust’s service providers with required daily information as to executed trades in a format and time-frame agreed to by the Subadviser, Custodian, Fund Administrator, Accounting Agent and Prime Broker/Counterparties and designated persons of the Trust. Trade information sent to the Custodian, Fund Administrator, Accounting Agent and Prime Broker/Counterparties must include all necessary data within the required timeframes to allow such parties to perform their obligations to the Series.

The Accounting Agent specifically requires a daily trade blotter with a summary of all trades, in addition to trade feeds, including, if no trades are executed, a report to that effect. Daily information as to executed trades for same-day settlement and future trades must be sent to the Accounting Agent no later than 5:00 p.m. (Eastern Time) on the day of the trade each day the Trust is open for business. All other executed trades must be delivered to the Accounting Agent on trade date +1 by 11:00 a.m. (Eastern Time) to ensure that they are part of the Series’ NAV calculation. (Subadviser will be responsible for reimbursement to the Trust for any loss caused by the Subadviser’s failure to comply with the requirements of this Schedule A.) On fiscal quarter ends and calendar quarter ends, all trades must be delivered to the Accounting Agent by 4:30 p.m. (Eastern Time) for inclusion in the financial statements of the Series. The data to be sent to the Accounting Agent and/or Fund Administrator will be as agreed by the Subadviser, Fund Administrator, Accounting Agent and designated persons of the Trust and shall include (without limitation) the following:

 

1.

Transaction type (e.g., purchase, sale, open, close, put call);

2.

Security type (e.g., equity, fixed income, swap, future, option, short, long);

3.

Security name;

4.

Exchange identifier (e.g., CUSIP, ISIN, Sedol, OCC Symbol) (as applicable);

5.

Number of shares and par, original face, contract amount, notional amount;

6.

Transaction price per share (clean if possible);

7.

Strike price;

8.

Aggregate principal amount;

9.

Executing broker;

10.

Settlement agent;

11.

Trade date;

12.

Settlement date;

13.

Aggregate commission or if a net trade;

14.

Interest purchased or sold from interest bearing security;

15.

Net proceeds of the transaction;

16.

Trade commission reason: best execution, soft dollar or research (to be provided quarterly);

17.

Derivative terms;

18.

Non-deliverable forward classification (to be provided quarterly);

19.

Maturity/expiration date; and

20.

Details of margin and collateral movement.

When opening accounts with brokers for, and in the name of, the Trust, the account must be a cash account. No margin accounts are to be opened by the Subadviser in the name of the Trust or any Series except as specifically approved by the Trust and the Fund Administrator. Delivery instructions are as specified by the Custodian. The Custodian will supply the Subadviser daily with a cash availability report via access to the Custodian website, or by email or by facsimile and the Accounting Agent will provide a five-day cash projection. This will normally be done by email or, if email is unavailable, by another form of immediate written communication, so that the Subadviser will know the amount available for investment purposes.

 

E-13

SCHEDULE B

RECORDS TO BE MAINTAINED BY THE SUBADVISER

 

1.

(Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other series purchases and sales, given by the Subadviser on behalf of the Trust for, or in connection with, the purchase or sale of securities, whether executed or unexecuted. Such records shall include:

 

  A.

The name of the broker;

 

  B.

The terms and conditions of the order and of any modifications or cancellations thereof;

 

  C.

The time of entry or cancellation;

 

  D.

The price at which executed;

 

  E.

The time of receipt of a report of execution; and

 

  F.

The name of the person who placed the order on behalf of the Trust.

 

2.

(Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten (10) days after the end of the quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of series securities to named brokers or dealers was effected, and the division of brokerage commissions or other compensation on such purchase and sale orders. Such record:

 

  A.

Shall include the consideration given to:

 

  (i)

The sale of shares of the Trust by brokers or dealers.

 

  (ii)

The supplying of services or benefits by brokers or dealers to:

  (a)

The Trust,

  (b)

The Adviser,

  (c)

The Subadviser, and

  (d)

Any person other than the foregoing.

 

  (iii)

Any other consideration other than the technical qualifications of the brokers and dealers as such.

 

  B.

Shall show the nature of the services or benefits made available.

 

  C.

Shall describe in detail the application of any general or specific formula or other determinant used in arriving at such allocation of purchase and sale orders and such division of brokerage commissions or other compensation.

 

  D.

Shall show the name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation.

 

3.

(Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum identifying the person or persons, committees or groups authorizing the purchase or sale of series securities. Where a committee or group makes an authorization, a record shall be kept of the names of its members who participate in the authorization. There shall be retained as part of this record: any memorandum, recommendation or instruction supporting or authorizing the purchase or sale of series securities and such other information as is appropriate to support the authorization.*

 

4.

(Rule 31a-1(f)) Such accounts, books and other documents as are required to be maintained by registered investment advisers by rule adopted under Section 204 of the Advisers Act, to the extent such records are necessary or appropriate to record the Subadviser’s transactions for the Trust.

 

5.

Records as necessary under Board-approved policies and procedures of the Trust, including without limitation those related to valuation determinations.

 

* 

Such information might include: current financial information, annual and quarterly reports, press releases, reports by analysts and from brokerage firms (including their recommendations, i.e., buy, sell, hold) or any internal reports or subadviser review.

 

E-14

SCHEDULE C

SUBADVISORY FEE

For services provided to the Trust, the Adviser will pay to the Subadviser a fee, payable monthly in arrears, equal to 50% of the net advisory fee applicable to the Designated Series, calculated as follows:

 

  1.

The total expenses of the Designated Series will be calculated in accordance with the terms of its prospectus, including application of the gross advisory fee.

 

  2.

Such total expenses will be reduced by the application of any applicable fee waiver and/or expense limitation agreement, in accordance with the terms thereof.

 

  3.

The net advisory fee applicable to the Designated Series will then be calculated by subtracting from the gross advisory fee any amount required to be waived under the applicable fee waiver(s) and/or reimbursed under such applicable expense limitation agreement.

 

  4.

In the event that the Adviser waives its entire fee and also assumes expenses of the Designated Series pursuant to an applicable expense limitation agreement, the Subadviser will similarly waive its entire fee and will share in the expense assumption by contributing 50% of the assumed amount.

 

  5.

If during the term of this Agreement the Adviser later recaptures some or all of the fees waived or expenses assumed by the Adviser and the Subadviser together, the Adviser shall pay to the Subadviser a pro rata amount of the fee(s)/expense(s) recaptured that is attributable to the Subadviser’s portion of the original waiver/assumed expense.

 

E-15

SCHEDULE D

SUBADVISER FUNCTIONS

With respect to managing the investment and reinvestment of the Designated Series’ assets, the Subadviser shall provide, at its own expense:

 

  (a)

An investment program for the Designated Series consistent with its investment objectives based upon the development, review and adjustment of buy/sell strategies approved from time to time by the Board and the Adviser in paragraph 3 of this Subadvisory Agreement and implementation of that program;

 

  (b)

Periodic reports, on at least a quarterly basis, in form and substance acceptable to the Adviser, with respect to: i) compliance with the Code of Ethics and the Trust’s code of ethics; ii) compliance with procedures adopted from time to time by the Board relative to securities eligible for resale under Rule 144A under the Securities Act of 1933, as amended; iii) diversification of Designated Series assets in accordance with the then prevailing Prospectus and Statement of Additional Information pertaining to the Designated Series and governing laws, regulations, rules and orders; iv) compliance with governing restrictions relating to the fair valuation of securities for which market quotations are not readily available or considered “illiquid” for the purposes of complying with the Designated Series’ limitation on acquisition of illiquid securities; v) any and all other reports reasonably requested in accordance with or described in this Agreement; vi) the implementation of the Designated Series’ investment program, including, without limitation, analysis of Designated Series performance; vii) compliance with the Investment Guidelines; viii) description of material changes in policies or procedures; and ix) description of any significant firm related developments;

 

  (c)

Promptly after filing with the SEC an amendment to its Form ADV, a copy of such amendment to the Adviser and the Board;

 

  (d)

Attendance by appropriate representatives of the Subadviser at meetings requested by the Adviser or Board at such time(s) and location(s) as reasonably requested by the Adviser or Board; and

 

  (e)

Notice to the Board and the Adviser of the occurrence of any event which would disqualify the Subadviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the Act or otherwise.

 

  (f)

Reasonable assistance in the valuation of securities including the participation of appropriate representatives at fair valuation committee meetings.

 

E-16

SCHEDULE E

FORM OF SUB-CERTIFICATION

To:

 

Re:

Subadviser’s Form N-CSR Certification for the [Name of Designated Series].

 

From:

[Name of Subadviser]

Representations in support of Investment Company Act Rule 30a-2 certifications of Form N-CSR.

[Name of Designated Series].

In connection with your certification responsibility under Rule 30a-2 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, I have reviewed the following information presented in the schedule of investments for the period ended [Date of Reporting Period] (the “Report”) which forms part of the N-CSR for the Trust.

Schedule of Investments

Our organization has designed, implemented and maintained internal controls and procedures, designed for the purpose of ensuring the accuracy and completeness of relevant portfolio trade data transmitted to those responsible for the preparation of the Schedule of Investments. As of the date of this certification there have been no material modifications to these internal controls and procedures.

In addition, our organization has:

 

  a.

Designed such internal controls and procedures to ensure that material information is made known to the appropriate groups responsible for servicing the above-mentioned mutual fund.

 

  b.

Designed and implemented controls which ensure that all transactions provided to the fund’s custodians/prime broker and accounting agent (“vendors”) have been delivered in a secure manner by authorized persons, and that access to the fund’s records maintained by the fund’s vendors is restricted to authorized persons of our firm or, if applicable, any third party administrator utilized by our firm. Such controls include review of the authorized persons at least annually and prompt communication of any changes to authorized persons to the fund’s vendors.

 

  c.

Evaluated the effectiveness of our internal controls and procedures, as of a date within 90 days prior to the date of this certification and we have concluded that such controls and procedures are effective.

 

  d.

In addition, to the best of my knowledge, there has been no fraud, whether or not material, that involves our organization’s management or other employees who have a significant role in our organization’s control and procedures as they relate to our duties as subadviser to the Designated Series.

I have read the draft of the Report which I understand to be current as of [Date of Reporting Period] and based on my knowledge, such draft of the Report, including the Fund Summary and Asset Allocations (as applicable), does not, with respect to the Designated Series, contain any untrue statement of a material fact or omit to state a material fact necessary to make the information contained therein, in light of the circumstances under which such information is presented, not misleading with respect to the period covered by such draft Report.

I have disclosed, based on my most recent evaluation, to the Designated Series’ Chief Accounting Officer:

 

  a.

All significant changes, deficiencies and material weakness, if any, in the design or operation of the Subadviser’s internal controls and procedures which could adversely affect the Registrant’s ability to record, process, summarize and report financial data with respect to the Designated Series in a timely fashion;

 

E-17

  b.

Any fraud, whether or not material, that involves the Subadviser’s management or other employees who have a significant role in the Subadviser’s internal controls and procedures for financial reporting.

I certify that to the best of my knowledge:

 

  a.

The Subadviser’s Portfolio Manager(s) has/have complied with the restrictions and reporting requirements of the Code of Ethics (the “Code”). The term Portfolio Manager is as defined in the Code.

 

  b.

The Subadviser has complied with the Prospectus and Statement of Additional Information of the Designated Series and the Policies and Procedures of the Designated Series as adopted by the Designated Series Board of Trustees.

 

  c.

I have no knowledge of any compliance violations except as disclosed in writing to the Virtus Compliance Department by me or by the Subadviser’s compliance administrator.

 

  d.

The Subadviser has complied with the rules and regulations of the 33 Act and 40 Act, and such other regulations as may apply to the extent those rules and regulations pertain to the responsibilities of the Subadviser with respect to the Designated Series as outlined above.

 

  e.

Since the submission of our most recent certification there have not been any divestments of securities of issuers that conduct or have direct investments in business operations in Iran or Sudan.

 

  f.

The subadviser has disclosed to the Adviser or the Designated Series any holdings required to be disclosed under the Iran Threat Reduction and Syria Human Rights Act of 2012, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act of 1996, as Amended and Executive Orders 13224, and 13382.

This certification relates solely to the Designated Series named above and may not be relied upon by any other fund or entity.

The Subadviser does not maintain the official books and records of the above Designated Series. The Subadviser’s records are based on its own portfolio management system, a record-keeping system that is not intended to serve as the Designated Series official accounting system. The Subadviser is not responsible for the preparation of the Report.

 

 

   

 

[Name of Subadviser]    Date
[Name of Authorized Signer]   
[Title of Authorized Signer]   

 

E-18

SCHEDULE F

DESIGNATED SERIES

As of [    ]

Allianz Funds

 

Fund Name

    Effective Date

AllianzGI Dividend Value Fund*

    [    ]

AllianzGI Emerging Markets Opportunities Fund

    [    ]

AllianzGI Focused Growth Fund

    [    ]

AllianzGI Global Small-Cap Fund

    [    ]

AllianzGI Health Sciences Fund

    [    ]

AllianzGI Income & Growth Fund

    [    ]

AllianzGI International Value Fund*

    [    ]

AllianzGI Large-Cap Value Fund*

    [    ]

AllianzGI Mid-Cap Fund

    [    ]

AllianzGI Mid-Cap Value Fund*

    [    ]

AllianzGI Small-Cap Fund

    [    ]

AllianzGI Small-Cap Value Fund*

    [    ]

AllianzGI Technology Fund

    [    ]

Allianz Funds Multi-Strategy Trust

 

Fund Name

    Effective Date

AllianzGI Convertible Fund

    [    ]

AllianzGI Core Plus Bond Fund

    [    ]

AllianzGI Emerging Markets Consumer Fund

    [    ]

AllianzGI Global Allocation Fund

    [    ]

AllianzGI Global Dynamic Allocation Fund

    [    ]

AllianzGI Global Sustainability Fund

    [    ]

AllianzGI High Yield Bond Fund

    [    ]

AllianzGI International Small-Cap Fund

    [    ]

AllianzGI Emerging Markets Value Fund*

    [    ]

AllianzGI Preferred Securities and Income Fund

    [    ]

AllianzGI Short Duration High Income Fund

    [    ]

AllianzGI Water Fund

    [    ]

 

*

NFJ-managed Fund.

 

E-19

IN WITNESS WHEREOF, [ALLIANZ GLOBAL INVESTORS U.S. LLC] [NFJ INVESTMENT GROUP,LLC] and VIRTUS INVESTMENT ADVISERS, INC. have each caused this Schedule F to the Subadvisory Agreement to be signed in its behalf by its duly authorized representative, all as of the day and year first written above.

 

[VIRTUS INVESTMENT ADVISERS, INC.]
By:    
Name:
Title:

 

[ALLIANZ GLOBAL INVESTORS U.S. LLC]

[NFJ INVESTMENT GROUP, LLC]

By:    
Name:
Title:

 

E-20

Appendix F

Principal Executive Officers and Directors of AllianzGI U.S.

 

F-1

Appendix G

Principal Executive Officers and Directors of NFJ Investment Company, LLC.

 

G-1

Appendix H

Outstanding Shares and Significant Shareholders

Outstanding Shares

As of [            ], 2020 as shown on the books of the Trusts, there were issued and outstanding the following number of shares of beneficial interest of each class of each Fund of each Trust:

 

Fund Name and Class

    Shares
Outstanding		     

Fund Name and Class

    Shares
Outstanding		  
        

 

H-1

Significant Shareholders

CERTAIN OWNERSHIP OF TRUST SHARES

As of [            ], 2020, the following persons owned of record or beneficially 5% or more of the noted class of shares of the following Funds:

a = Entity owned 25% or more of the outstanding shares of beneficial interest of the Funds, and therefore may be presumed to “control” the Funds, as that term is defined in the 1940 Act.

Allianz Funds

 

Fund Name

    Registration     

Number of Shares

    Percentage of
Outstanding
Shares of Class
Owned		  
                        
                        
                        

Allianz Funds Multi-Strategy Trust

 

Fund Name

    Registration   

Number of Shares

    Percentage of
Outstanding
Shares of Class
Owned

 

H-2

LOGO

 

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. THE MATTERS WE ARE SUBMITTING FOR YOUR CONSIDERATION ARE SIGNIFICANT TO THE FUND AND TO YOU AS A FUND SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!

   

ALLIANZGI EMERGING MARKETS OPPORTUNITIES FUND

A Series of Allianz Funds

 

To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand.

2) Go to the website www.proxyvote.com or scan the QR barcode above.

3) Follow the instructions provided on the website.

4) To attend and vote at the meeting, please register at [website URL].

 

To vote by Telephone

1) Read the Proxy Statement and have the proxy card below at hand.

2) Call [phone number].

3) Follow the instructions.

 

To vote by Mail

1) Read the Proxy Statement.

2) Check the appropriate boxes on the proxy card below.

3) Sign and date the proxy card.

4) Return the proxy card in the envelope provided.

PROXY IN CONNECTION WITH THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of the series of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts,” and each series thereof a “Fund” and together, the “Funds”), hereby appoint Thomas J. Fuccillo, Scott Whisten and Angela Borreggine and each of them separately, with power of substitution and re-substitution, as proxies to vote at the Special Meeting of Shareholders (the “Special Meeting”) to be held via live audio webcast on [October 28], 2020, at [10:00 a.m.] Eastern Time and at any adjournment thereof. The undersigned named will vote the shares represented by this proxy in accordance with the choices made on this ballot. If this proxy is executed and returned in time and no choice is indicated as to an item, this proxy will be voted “FOR” the proposal. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF EACH TRUST, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH PROPOSAL.

IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO A PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” SUCH PROPOSAL.

 

 

Please refer to the Proxy Statement for a discussion of each Proposal.

PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [OCTOBER 28], 2020. [The Proxy Statement is also available at [www.proxyonline.com/docs/AllianzGlSpecialMeeting.pdf].]

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

ALLIANZGI EMERGING MARKETS OPPORTUNITIES FUND       LOGO
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED.      

 

SIGNATURE (AND TITLE IF APPLICABLE)            DATE

Please sign exactly as your name(s) appear(s) on the proxy card. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, the signature should be that of an authorized officer who should state his or her title.      
     
     

 

SIGNATURE (IF HELD JOINTLY)                             DATE

     
     
     
     

 

 

TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example: 🌑

PROPOSAL

 

         FOR      WITHOLD       

1.  Election of Trustees

               
 

    (01) Donald C. Burke

        O        O     
 

    (02) Sarah E. Cogan

        O        O     
 

    (03) Deborah A. DeCotis

        O        O     
 

    (04) F. Ford Drummond

        O        O     
 

    (05) Sidney E. Harris

        O        O     
 

    (06) John R. Mallin

        O        O     
 

    (07) Connie D. McDaniel

        O        O     
 

    (08) Phillip R. McLoughlin

        O        O     
 

    (09) Geraldine M. McNamara

        O        O     
 

    (10) James M. Oates

        O        O     
 

    (11) R. Keith Walton

        O        O     
 

    (12) Brian T. Zino

        O        O     
 

    (13) George R. Aylward

 

       

 

 O

 

 

       

 

 O

 

 

     
         FOR      AGAINST      ABSTAIN  

2.  To approve an Investment Management Agreement between the Trust, on behalf of the Fund, and Virtus Investment Advisers, Inc.

        O        O        O

3.  To approve a Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc. and AllianzGI U.S. LLC.

    O      O      O  

4.  To approve a proposal to permit Virtus Investment Advisers, Inc., as the investment adviser to the Fund, to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Fund without shareholder approval, and to permit the Fund to disclose advisory and subadvisory fee information in an aggregated manner.

    O      O      O  

You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.

PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

THANK YOU FOR VOTING

 

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

LOGO

 

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. THE MATTERS WE ARE SUBMITTING FOR YOUR CONSIDERATION ARE SIGNIFICANT TO THE FUND AND TO YOU AS A FUND SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!

   

ALLIANZGI FOCUSED GROWTH FUND

A Series of Allianz Funds

 

To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand.

2) Go to the website www.proxyvote.com or scan the QR barcode above.

3) Follow the instructions provided on the website.

4) To attend and vote at the meeting, please register at [website URL].

 

To vote by Telephone

1) Read the Proxy Statement and have the proxy card below at hand.

2) Call [phone number].

3) Follow the instructions.

 

To vote by Mail

1) Read the Proxy Statement.

2) Check the appropriate boxes on the proxy card below.

3) Sign and date the proxy card.

4) Return the proxy card in the envelope provided.

PROXY IN CONNECTION WITH THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of the series of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts,” and each series thereof a “Fund” and together, the “Funds”), hereby appoint Thomas J. Fuccillo, Scott Whisten and Angela Borreggine and each of them separately, with power of substitution and re-substitution, as proxies to vote at the Special Meeting of Shareholders (the “Special Meeting”) to be held via live audio webcast on [October 28], 2020, at [10:00 a.m.] Eastern Time and at any adjournment thereof. The undersigned named will vote the shares represented by this proxy in accordance with the choices made on this ballot. If this proxy is executed and returned in time and no choice is indicated as to an item, this proxy will be voted “FOR” the proposal. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF EACH TRUST, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH PROPOSAL.

IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO A PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” SUCH PROPOSAL.

 

 

Please refer to the Proxy Statement for a discussion of each Proposal.

PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [OCTOBER 28], 2020. [The Proxy Statement is also available at [www.proxyonline.com/docs/AllianzGlSpecialMeeting.pdf].]

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

ALLIANZGI FOCUSED GROWTH FUND       LOGO
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED.      

 

SIGNATURE (AND TITLE IF APPLICABLE)            DATE

Please sign exactly as your name(s) appear(s) on the proxy card. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, the signature should be that of an authorized officer who should state his or her title.      
     
     
     

 

SIGNATURE (IF HELD JOINTLY)                             DATE

     
     
     
     

 

 

TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example: 🌑

PROPOSAL

 

         FOR        WITHOLD           

1.  Election of Trustees

         
 

    (01) Donald C. Burke

      O        O     
 

    (02) Sarah E. Cogan

      O        O     
 

    (03) Deborah A. DeCotis

      O        O     
 

    (04) F. Ford Drummond

      O        O     
 

    (05) Sidney E. Harris

      O        O     
 

    (06) John R. Mallin

      O        O     
 

    (07) Connie D. McDaniel

      O        O     
 

    (08) Phillip R. McLoughlin

      O        O     
 

    (09) Geraldine M. McNamara

      O        O     
 

    (10) James M. Oates

      O        O     
 

    (11) R. Keith Walton

      O        O     
 

    (12) Brian T. Zino

      O        O     
 

    (13) George R. Aylward

 

     

 

 O

 

  

 

     

 

 O

 

  

 

   
         FOR        AGAINST        ABSTAIN    

2.  To approve an Investment Management Agreement between the Trust, on behalf of the Fund, and Virtus Investment Advisers, Inc.

      O        O        O  

3.  To approve a Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc. and AllianzGI U.S. LLC.

    O      O      O  

4.  To approve a proposal to permit Virtus Investment Advisers, Inc., as the investment adviser to the Fund, to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Fund without shareholder approval, and to permit the Fund to disclose advisory and subadvisory fee information in an aggregated manner.

    O      O      O  

5.  Approval of a change in the classification of AllianzGI Focused Growth Fund from a “diversified” fund to a “non-diversified” fund by Shareholders of the Fund.

    O      O      O  

You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.

PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

THANK YOU FOR VOTING

 

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

LOGO

 

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. THE MATTERS WE ARE SUBMITTING FOR YOUR CONSIDERATION ARE SIGNIFICANT TO THE FUND AND TO YOU AS A FUND SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!

   

ALLIANZGI DIVIDEND VALUE FUND

A Series of Allianz Funds

 

To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand.

2) Go to the website www.proxyvote.com or scan the QR barcode above.

3) Follow the instructions provided on the website.

4) To attend and vote at the meeting, please register at [website URL].

 

To vote by Telephone

1) Read the Proxy Statement and have the proxy card below at hand.

2) Call [phone number].

3) Follow the instructions.

 

To vote by Mail

1) Read the Proxy Statement.

2) Check the appropriate boxes on the proxy card below.

3) Sign and date the proxy card.

4) Return the proxy card in the envelope provided.

PROXY IN CONNECTION WITH THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of the series of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts,” and each series thereof a “Fund” and together, the “Funds”), hereby appoint Thomas J. Fuccillo, Scott Whisten and Angela Borreggine and each of them separately, with power of substitution and re-substitution, as proxies to vote at the Special Meeting of Shareholders (the “Special Meeting”) to be held via live audio webcast on [October 28], 2020, at [10:00 a.m.] Eastern Time and at any adjournment thereof. The undersigned named will vote the shares represented by this proxy in accordance with the choices made on this ballot. If this proxy is executed and returned in time and no choice is indicated as to an item, this proxy will be voted “FOR” the proposal. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF EACH TRUST, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH PROPOSAL.

IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO A PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” SUCH PROPOSAL.

 

 

Please refer to the Proxy Statement for a discussion of each Proposal.

PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [OCTOBER 28], 2020. [The Proxy Statement is also available at [www.proxyonline.com/docs/AllianzGlSpecialMeeting.pdf].]

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

ALLIANZGI DIVIDEND VALUE FUND       LOGO
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED.      

 

SIGNATURE (AND TITLE IF APPLICABLE)            DATE

Please sign exactly as your name(s) appear(s) on the proxy card. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, the signature should be that of an authorized officer who should state his or her title.      
     
     
     

 

SIGNATURE (IF HELD JOINTLY)                             DATE

     
     
     
     

 

 

TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example: 🌑

PROPOSAL

 

         FOR      WITHOLD       

1.  Election of Trustees

         
 

      (01) Donald C. Burke

    O    O   
 

      (02) Sarah E. Cogan

    O    O   
 

      (03) Deborah A. DeCotis

    O    O   
 

      (04) F. Ford Drummond

    O    O   
 

      (05) Sidney E. Harris

    O    O   
 

      (06) John R. Mallin

    O    O   
 

      (07) Connie D. McDaniel

    O    O   
 

      (08) Phillip R. McLoughlin

    O    O   
 

      (09) Geraldine M. McNamara

    O    O   
 

      (10) James M. Oates

    O    O   
 

      (11) R. Keith Walton

    O    O   
 

      (12) Brian T. Zino

    O    O   
 

      (13) George R. Aylward

 

   

O

 

   

O

 

   
         FOR      AGAINST      ABSTAIN  

2.  To approve an Investment Management Agreement between the Trust, on behalf of the Fund, and Virtus Investment Advisers, Inc.

    O    O    O

3.  To approve a Subadvisory Agreement by and among the Trust, Virtus Investment Advisers, Inc. and NFJ Investment Group, LLC.

    O      O      O  

4.  To approve a proposal to permit Virtus Investment Advisers, Inc., as the investment adviser to the Fund, to hire, terminate and replace affiliated (both wholly-owned and partially-owned) and unaffiliated subadvisers for the Fund or to modify subadvisory agreements for the Fund without shareholder approval, and to permit the Fund to disclose advisory and subadvisory fee information in an aggregated manner.

    O    O    O

You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.

PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

THANK YOU FOR VOTING

 

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

LOGO

 

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. THE MATTERS WE ARE SUBMITTING FOR YOUR CONSIDERATION ARE SIGNIFICANT TO THE FUND AND TO YOU AS A FUND SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!

   

ALLIANZGI BEST STYLES GLOBAL EQUITY FUND

A Series of Allianz Funds Multi-Strategy Trust

 

To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand.

2) Go to the website www.proxyvote.com or scan the QR barcode above.

3) Follow the instructions provided on the website.

4) To attend and vote at the meeting, please register at [website URL].

 

To vote by Telephone

1) Read the Proxy Statement and have the proxy card below at hand.

2) Call [phone number].

3) Follow the instructions.

 

To vote by Mail

1) Read the Proxy Statement.

2) Check the appropriate boxes on the proxy card below.

3) Sign and date the proxy card.

4) Return the proxy card in the envelope provided.

PROXY IN CONNECTION WITH THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [OCTOBER 28], 2020

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of the series of Allianz Funds (“Allianz Funds”) and Allianz Funds Multi-Strategy Trust (“MST,” and together with Allianz Funds, the “Trusts,” and each series thereof a “Fund” and together, the “Funds”), hereby appoint Thomas J. Fuccillo, Scott Whisten and Angela Borreggine and each of them separately, with power of substitution and re-substitution, as proxies to vote at the Special Meeting of Shareholders (the “Special Meeting”) to be held via live audio webcast on [October 28], 2020, at [10:00 a.m.] Eastern Time and at any adjournment thereof. The undersigned named will vote the shares represented by this proxy in accordance with the choices made on this ballot. If this proxy is executed and returned in time and no choice is indicated as to an item, this proxy will be voted “FOR” the proposal. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF EACH TRUST, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH PROPOSAL.

IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO A PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” SUCH PROPOSAL.

 

 

Please refer to the Proxy Statement for a discussion of each Proposal.

PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [OCTOBER 28], 2020. [The Proxy Statement is also available at [www.proxyonline.com/docs/AllianzGlSpecialMeeting.pdf].]

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]

ALLIANZGI BEST STYLES GLOBAL EQUITY FUND       LOGO
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED.      

 

SIGNATURE (AND TITLE IF APPLICABLE)            DATE

Please sign exactly as your name(s) appear(s) on the proxy card. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, the signature should be that of an authorized officer who should state his or her title.      
     
     
     

 

SIGNATURE (IF HELD JOINTLY)                             DATE

     
     
     
     

 

 

TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example: 🌑

PROPOSAL

 

         FOR        WITHOLD           

1.  Election of Trustees

         
 

(01) Donald C. Burke

      O        O     
 

(02) Sarah E. Cogan

      O        O     
 

(03) Deborah A. DeCotis

      O        O     
 

(04) F. Ford Drummond

      O        O     
 

(05) Sidney E. Harris

      O        O     
 

(06) John R. Mallin

      O        O              
 

(07) Connie D. McDaniel

      O        O     
 

(08) Phillip R. McLoughlin

      O        O     
 

(09) Geraldine M. McNamara

      O        O     
 

(10) James M. Oates

      O        O     
 

(11) R. Keith Walton

      O        O     
 

(12) Brian T. Zino

      O        O     
 

(13) George R. Aylward

      O        O     

You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.

 

PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

THANK YOU FOR VOTING

 

 

                [PROXY ID NUMBER HERE]

 

    [BAR CODE HERE]    [CUSIP HERE]