Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 24

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 24
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.43% for convertible securities.

The Fund delivered consistent income and a
positive total return for the 12-month period. The portfolio benefited from strength across risk assets including equities and convertible securities.

Top contributors to performance were led by a
semiconductor company that consistently exceeded expectations due to strong demand for its chips, which train and deploy generative artificial intelligence (“AI”) applications. Several holdings in e-commerce and social media that are
seeking to capitalize on secular trends around AI and cloud migration contributed to Fund returns. Other outperformers included a technology hardware company that benefited from several successful product launches and advancements, and an aerospace
manufacturer that saw significant earnings growth and profit margin expansion during the period.

Top detractors were led by a medical
technology company that declined due to lower procedure volumes. A pharmaceutical holding was hurt by an unfavorable regulatory ruling, and a software provider was negatively impacted by competitive concerns and weaker-than-expected monetization.
Other detractors included a holding in information technology (“IT”) infrastructure that saw inconsistent demand in its AI segment, as well as a real estate platform operator that faced adverse effects from higher interest rates.

Many written options positions expired below
the strike price, and the portfolio was able to retain the set premiums.

#### Managed Distribution Plan
As discussed on the inside cover of this
Report, the Fund currently operates under a Managed Distribution Plan (the “Plan”) pursuant to which the Fund makes a quarterly distribution at a rate of $0.50 per share. As a result of execution on the Plan, the Fund may pay
distributions in excess of the Fund’s taxable net investment income and net realized gains. During the most recent fiscal year, the Plan did not have a material impact on the Fund’s investment strategy. Please refer to the financial
highlights and federal income tax information note in this report for further information about the Fund’s distributions and its effect on net asset value.

The preceding information is the opinion of
portfolio management only through the end of the period of the report as stated on the cover. Any such opinions are subject to change at any time based upon market conditions and should not be relied upon as investment advice.

The Fund’s portfolio holdings are
subject to change and may not be representative of the portfolio managers’ current or future investment decisions. The mention of individual securities held by the Fund is for informational purposes only and should not be construed as a
recommendation to purchase or sell any securities. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed