Company: NCZ-PA
Filing Date: 2025-04-11
Form Type: N-CSR
Source: 0001193125-25-079060
Chunk: 19

Company: Virtus Convertible & Income Fund II
Filing Date: 2025-04-11
Form: N-CSR
Chunk 19
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J Investment Group manages the Fund’s equity and options portfolios. The Voya IM team and NFJ Investment Group have been working together for more than 15 years. 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 NFJ Investment Group
investment team has been managing value equities for clients for over 30 years. They seek to invest in companies with low market expectations and the strongest prospects for returning capital to shareholders. The following commentary is provided by
the portfolio teams at NFJ Investment Group and Voya IM and cover the Fund’s portfolio for the year ended January 31, 2025.

#### NFJ Investment Group, LLC
How did the equity markets perform during the Fund’s
fiscal year ended January 31, 2025?

The
value of U.S. equities generally appreciated during the 12-month period, lifted in part by robust gains from the highest momentum names in the first half of 2024. While stubborn inflation remained a concern, the Federal Reserve (the
“Fed”) initiated an interest rate cutting cycle in the third quarter, which benefited more rate-sensitive areas of the market. In the Russell 1000 ® Value Index,
financials climbed 38%, followed by 20%+ gains from the utilities and industrials sectors. Conversely, the health care, energy, and materials sectors posted the weakest returns. The Cboe Volatility Index ® (VIX ® ) rose during the second half of 2024, spiking to over 38 in August and over 27 in
December.

What factors affected the performance of the
Fund’s equity portfolio during the fiscal year?

For the 12 months ended January 31, 2025, the
Fund’s equity portfolio returned 8.76% (gross of fees and expenses). For the same period, the Fund’s benchmark, the Russell 1000 ® Value Index, returned
19.54%.

In the equity sleeve, relative
underperformance versus the Russell 1000 ® Value Index was due to negative stock selection. Sector allocation somewhat contributed over the reporting period. Stock selection
was positive across the communication services and energy sectors. However, these gains were offset by negative selection across the real estate and consumer discretionary sectors. Underweight positions in the health care and communication services
sectors contributed to performance.