Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 18

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 18
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 certain adjustments that are necessary under generally accepted accounting principles required in the annual report and semiannual report.      |
| 4 | The                                                                                                                                                                                                                                                      
 index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with active management of an actual portfolio.                                                                           |
| 5 | The                                                                                                                                                                                                                                                      
 since inception index return is from the Fund’s inception date.                                                                                                                                                                                          |

For information regarding the indexes and certain key investment terms, see Key Investment Terms starting on page 18. 10

#### Dividend, Interest &
Premium Strategy Fund (NFJ)

### MANAGER’S DISCUSSION OF FUND
PERFORMANCE (Unaudited)

#### January 31, 2025
About
the Fund:

Dividend, Interest &
Premium Strategy Fund’s (NYSE: NFJ) (the “Fund”) investment objective is to seek current income and gains, with a secondary objective of long-term capital appreciation. There is no guarantee that the Fund will achieve its investment objective.

For the fiscal year ended January 31, 2025,
the Fund’s net asset value returned 9.90%, and its market price returned 17.41%. For the same period, the Fund’s composite benchmark, which consists of 75% Russell
1000 ® Value and 25% ICE BofA U.S. Convertibles Index returned 18.55%.

As announced on August 29, 2024, NFJ
increased its quarterly distribution rate by 9% from $0.28 per share to $0.305 per share, effective with its September 2024 distribution, as part of an ongoing effort to enhance shareholder value by both seeking to provide a more attractive
distribution rate and furthering its efforts to reduce the current discount to net asset value at which its shares currently trade.

On February 18, 2025, the Fund announced that
the Board of Trustees has adopted a share purchase program to repurchase, at a discount to net asset value (“NAV”), up to 5% of its outstanding common shares in open market transactions. The share repurchase program is intended to
enhance shareholder value, as repurchases made at a discount may have the effect of increasing NAV per share of the Fund’s remaining shares.

Manager Comments – Voya Investment Management Co. LLC
(“Voya IM”) and NFJ Investment Group, LLC (“NFJ Investment Group”)

Voya IM manages the Fund’s convertible
securities portfolio, while NF