Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 79

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 79
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quintile of its Expense Universe.

NIE . The Board considered that the Fund’s gross management fee and net total expenses after waivers were below the median of the Expense Universe. The Board also considered that the Fund’s net management fee was in the 2 ndquintile of its Expense Universe and net total expenses were in the 1 stquintile of its Expense Universe.

Profitability

The Board also considered certain
information relating to profitability that had been provided by VIA. In this regard, the Board considered information regarding the overall profitability, as well as on a fund-by-fund basis, of VIA for its management of the Funds, as well as its
profits and those of its affiliates including NFJ Investment Group and the administrator. In addition to the fees paid to VIA and its affiliates, including the NFJ Investment Group and the administrator, the Board considered other benefits derived
by VIA or its affiliates from their relationships with the Funds. The Board reviewed the methodology used to allocate costs to the Funds, taking into account the fact that allocation methodologies are inherently subjective and various allocation
methodologies may each be reasonable while producing different results. The Board concluded that the profitability to VIA and its affiliates from each Fund was not excessive in light of the quality of the services rendered to the Funds by VIA and
its affiliates, and other factors considered.

In considering the profitability to the
Subadvisers in connection with their relationships to the Funds, the Board noted that the fees payable under the Subadvisory Agreements are paid by VIA out of the fees that VIA receives under the Advisory Agreements, and not by the Subadvisers. In
considering the reasonableness of the fee payable by VIA to the Subadvisers, the Board noted that, because NFJ Investment Group is an affiliate of VIA, such profitability might be directly or indirectly shared by VIA in addition, with respect to
Voya, the unaffiliated Subadviser, the Board relied on the ability of VIA to negotiate the Subadvisory Agreement and the fees thereunder at arm’s length.

Economies of Scale

The Board received
and discussed information concerning whether the Adviser realizes economies of scale as the Funds’ assets grow.. The Board noted that expense limitation agreements were also in place for all of the Funds. The Board also took into account
management’s discussion of each Fund’s advisory fee and subadvisory fee structure. The Board also took into account the current sizes of the Funds. The Board noted that