Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 77

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 77
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 the Fund outperformed the median of its Performance Universe for the 5- year period, performed the same as the median of its Performance Universe for the 1- and 10-year periods, and underperformed the median of its Performance Universe for the first quarter and 3-year periods. The Board also noted that the Fund underperformed its benchmark for the first quarter and 1-, 3-, 5- and 10-year periods.

The Board also considered management’s
discussion about the reasons for, or actions taken to address, each Fund’s underperformance, as applicable, relative to its Performance Universe or benchmark. The Board also considered that the Funds had changed subadvisers during several of
the performance periods shown, so that some of the performance shown was that of a prior subadviser. The Board also considered the distribution rates for each Fund relative to peers. After reviewing these and related factors, the Board concluded
that each Fund’s overall performance was satisfactory.

Management Fees and Total Expenses

The
Board considered the fees charged to the Funds for advisory services as well as the total expense levels of the Funds. This information included comparisons of each Fund’s contractual and net management fee and net total expense level to those
of its peer universe (the “Expense Universe”) and ranked according to quintile (the first quintile being lowest and, therefore, best in these expense component rankings, and fifth being highest and, therefore, worst in these expense
component rankings). In comparing each Fund’s net management fee to that of comparable funds, the Board noted that in the materials presented by management such fee was comprised of advisory and administration fees. The Board also noted that
each Fund had an expense limitation agreement in place to limit the total expenses incurred by the Fund and its shareholders. The Board also noted that the subadvisory fees were paid by VIA out of its management fees rather than paid separately by
the Fund. In this regard, the Board took into account management’s discussion with respect to the advisory/subadvisory fee structure, including the amount of the advisory fee retained by VIA after payment of the subadvisory fee and the
services provided, respectively, by VIA and the Subadvisers. The Board also considered the fee rates payable by comparable accounts managed by each Subadviser. They also considered the capital structures for NCV and NCZ, respectively. With respect
to the fees and expenses related to each Fund’s use of leverage, the Board considered the conflicts of interest involved