Virtus Convertible & Income Fund Announces $0.136 Dividend: Market Impact and Recovery Outlook on Ex-Dividend Date

Introduction

Virtus Convertible & Income Fund (NCV) has maintained a consistent dividend policy, aligning with its structure as a closed-end fund focused on income generation. The fund’s latest dividend announcement of $0.136 per share, scheduled with an ex-dividend date of September 12, 2025, continues its history of regular payouts. In a market environment where yield-seeking investors remain active, NCV's ex-dividend behavior is of particular interest to those evaluating its short-term price volatility and longer-term income potential.

Dividend Overview and Context

Understanding the key dividend metrics is essential for investors. The ex-dividend date, in this case September 12, 2025, marks the cutoff for investors to receive the dividend. On this date, the fund’s stock price typically drops by an amount roughly equivalent to the dividend payout, assuming no major news events or market shifts. For NCV, this means a potential price drop of approximately $0.136, affecting both institutional and retail investors.

While NCV does not issue stock dividends, its cash dividend of $0.136 reflects its ongoing commitment to distributing returns to shareholders. This payout is supported by the fund's financial performance, including a strong net income of $59.59 million and total revenue of $24.07 million for the latest reporting period.

Backtest Analysis

Historical backtesting of NCV's ex-dividend price behavior shows a predictable and positive pattern. Over 18 dividend events, the fund has demonstrated an average recovery time of just 3.07 days from the ex-dividend price drop, with an 83% probability of full price recovery within 15 days. This suggests strong investor confidence and liquidity, as well as a market that efficiently absorbs the impact of the dividend distribution.

Driver Analysis and Implications

NCV’s ability to maintain and grow its dividend is rooted in its strong operating performance. The fund reported a net income of $59.59 million, far exceeding its operating income of $19.74 million, indicating the presence of non-operational gains. The total basic earnings per common share stood at $0.6593, significantly outperforming the dividend payout of $0.136. This suggests that the fund has substantial earnings capacity, which can support dividend sustainability and potential growth in the future.

From a broader market perspective, NCV's performance reflects the appeal of high-yield equity funds in a low-interest-rate environment. As fixed-income returns remain subdued, income-oriented investors continue to seek stable sources of cash flow, making NCV an attractive option for those prioritizing yield without sacrificing liquidity.

Investment Strategies and Recommendations

• Short-Term Strategy: Investors who do not wish to be affected by the ex-dividend price drop may consider selling prior to September 12. Alternatively, those who plan to hold can look to the fund's historical recovery trend as a signal of price normalization within a few trading days.
• Long-Term Strategy: For income-focused investors, NCV presents a compelling opportunity. Given its strong financial position and consistent dividend record, the fund can serve as a core holding in a diversified income portfolio. Reinvestment of dividends through a dividend reinvestment plan (DRIP) can further enhance long-term returns.

Conclusion & Outlook

The upcoming ex-dividend date on September 12, 2025, marks another milestone in Virtus Convertible & Income Fund’s dividend history. With its strong earnings performance and well-established recovery pattern, NCV is positioned to continue delivering reliable returns. Investors are encouraged to monitor the fund's next earnings and dividend announcements for further insights into its ongoing performance and strategy.

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