Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 23

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 23
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About
the Fund:

Equity & Convertible
Income Fund’s (NYSE: NIE) (the “Fund”) investment objective is to seek total return comprised of capital appreciation, current income and gains. There is no guarantee that the Fund will achieve its investment objective.

Manager Comments - Voya
Investment Management Co. LLC (“Voya IM”)

Voya IM manages the Fund. As the asset
management business of Voya Financial (NYSE: VOYA), Voya IM seeks to understand and anticipate client needs, delivering differentiated solutions across public and private fixed income, equity, and multi-asset platforms, including private markets and
alternatives. The following commentary is provided by the portfolio team at Voya IM.

How did the markets perform during the Fund’s fiscal year
period ended January 31, 2025?

Risk
assets advanced during the reporting period, with the equity and convertible securities markets finishing higher for the 12 months ended January 31, 2025. The S&P 500 ® Index returned 26.38% and the ICE BofA U.S. Convertibles Index returned 15.43%.

Equities made multiple new all-time highs
during the reporting period, helped by strong corporate profitability, rising earnings estimates, and broad-based sector gains.

Convertible securities were positively
impacted by underlying stock price strength and credit spread tightening. Spread refers to the additional yield over the yield of a risk-free government bond. Sector performance was mostly positive, and primary market activity increased.

Against this backdrop, corporate earnings
results were generally better than expected, with most companies beating top- and bottom-line forecasts. The U.S. economy expanded, inflation continued to normalize, the unemployment rate remained low, the manufacturing sector began to stabilize,
and the U.S. Federal Reserve (the “Fed”) cut interest rates by a total of 1.00% during the 12-month period.

What factors affected the Fund’s performance during its
fiscal year?

For the fiscal year ended
January 31, 2025, the Fund’s net asset value (“NAV”) returned 20.45%, while its market price returned 27.08%. For the same period, the Fund’s composite benchmark, which consists of 60% Russell 1000 ® Growth Index (representing equities) and 40% ICE BofA U.S. Convertibles Index (representing convertible securities), returned 25.67%. The underlying indexes returned 32.68%
for equities and 15