Virtus Convertible & Income Fund II Announces $0.12 Dividend on Ex-Dividend Date September 12

Introduction

Virtus Convertible & Income Fund II (VCRFX) has a well-established history of generating consistent income for shareholders through regular dividend distributions. The fund's latest cash dividend of $0.12 per share, set to go ex-dividend on September 12, 2025, is in line with its broader dividend strategy and reflects its ability to maintain payouts amid shifting interest rate and market conditions.

The current market environment features a mixed outlook, with bond yields remaining elevated and equity valuations stabilizing after a volatile summer. This backdrop sets the stage for a measured investor response to the ex-dividend event.

Dividend Overview and Context

Dividend per Share (DPS) remains a critical metric for income-focused investors. VCRFX’s latest cash dividend of $0.12 per share underscores the fund's ongoing commitment to distributing value to shareholders. As a closed-end fund, VCRFX generates returns through its actively managed portfolio, and the consistent dividend payout indicates strong operational performance and liquidity management.

The ex-dividend date is set for September 12, 2025, and the stock price is expected to adjust accordingly by this date, typically by the amount of the dividend. Investors purchasing the stock on or after this date will not be eligible for this payout. The dividend adjustment often results in a minor downward price correction, which is generally short-lived.

Backtest Analysis

The backtest results for the fund’s ticker, NCZ (used for reference), indicate strong historical performance following ex-dividend dates. The average dividend recovery duration is just 1.87 days, with an 83% probability of price recovery within 15 days. These figures highlight the fund’s ability to bounce back quickly after a dividend payout, reducing the risk of prolonged underperformance.

These findings suggest that VCRFX investors can expect a relatively stable price path following the ex-dividend adjustment, with strong potential for rapid normalization.

Driver Analysis and Implications

VCRFX’s ability to sustain its dividend is supported by robust financials. The fund reported a net income of $46,457,000 for the latest reporting period, with total revenue reaching $17,910,000. Despite significant interest expenses of $2,828,000 and marketing and administrative costs of $438,000, the fund maintains a healthy operating income of $14,538,000 and earnings per share (EPS) of $0.6103.

The high EPS and strong net income provide a solid foundation for dividend sustainability, even as macroeconomic factors such as interest rates and credit spreads remain in flux. The fund’s active management and focus on convertible securities enable it to capitalize on market dislocations, further supporting its income-generating capabilities.

Investment Strategies and Recommendations

• Short-Term Strategy: Investors seeking to capture the $0.12 dividend should ensure purchases are made before the ex-dividend date. Those holding the stock may benefit from the backtested price normalization pattern, which supports the decision to retain the shares post-dividend.
• Long-Term Strategy: For long-term investors, VCRFX offers an attractive yield with a strong historical pattern of price recovery. Reinvesting the dividend can enhance compounding potential, particularly in a diversified income portfolio.

Conclusion & Outlook

The announcement of a $0.12 dividend by Virtus Convertible & Income Fund II reflects its strong operational and financial performance. With a robust balance sheet and a proven track record of dividend sustainability, the fund continues to provide income-oriented investors with a reliable option in today’s market environment.

Investors should closely watch the fund’s next earnings report and potential future dividend announcement for further signals on its trajectory. The upcoming ex-dividend event on September 12, 2025, is likely to proceed with minimal market disruption, supported by favorable historical performance and strong underlying fundamentals.