Virtus Convertible & Income Fund: Key Insights Before the Jun 12, 2025 Ex-Dividend Date

Virtus Convertible & Income Fund (NCV) announced a dividend of $0.136 per share, payable on Jun 27, 2025. This figure is higher than the average of the last ten dividends, which stood at $0.090. Announced on Mar 6, 2025, with the ex-dividend date set for Jun 12, 2025, the dividend is characterized as a cash distribution. Previously, on May 29, 2025, the company also issued a cash dividend of $0.136 per share.

Recently, Virtus Convertible & Income Fund declared monthly distributions, highlighting its approach to maintaining steady income for investors. The fund's commitment is evident in its June 2025 dividend announcement, which signifies a 298% increase from its previous monthly rate of $0.034. This adjustment aligns with updated performance metrics, indicating a managed distribution plan designed to balance risk and reward. Although the fund avoids explicit mention of return of capital (ROC) for June, historical distributions have included ROC components, which investors should consider for tax planning.

Over the past week, analysts have noted NCV's strategy of using leverage—38.35% effective leverage split between preferred shares and borrowed debt—to enhance returns. This approach supports a high distribution rate of 12.69% annualized as of Apr 2025 while also increasing downside risk. With 56.67% of its portfolio in convertibles and 39.86% in high-yield bonds, the fund balances capital appreciation and income. However, investors must monitor leverage levels as rising rates or credit downgrades could impact this structure.

As of late, NCV shares have traded at a consistent discount to net asset value (NAV), currently at -9.37% as of Jun 2025, presenting a potential buying opportunity for those betting on NAV recovery. Despite this discount, NCV's one-year NAV return of 14.58% outperformed the S&P 500's 11.82% gain, indicating strong income potential. Yet, the shares' market price returns of 16.20% over 12 months reflect both income potential and the risk of NAV erosion, necessitating careful risk management.

In conclusion, Virtus Convertible & Income Fund offers a compelling income opportunity for aggressive investors, but it is crucial to manage risks associated with leverage and ROC. As a reminder, the ex-dividend date is Jun 12, 2025, and investors must purchase shares by this date to be eligible for the upcoming dividend distribution. Any purchases made after this date will not qualify for the dividend.