Virtus Convertible & Income Fund II (XNCZX)

Overview

Virtus Convertible & Income Fund II, initially known as AGIC Convertible & Income Fund II, is a structured entity specializing in fixed income investments within the United States' market. Launched on July 31, 2003, and domiciled in the U.S., it operates as a closed-ended fixed income mutual fund. Its management is handled by Allianz Global Investors Fund Management LLC, with Allianz Global Investors U.S. LLC serving as the co-manager. The fund's main objective is to generate income through investments primarily in convertible securities and non-convertible high-yield bonds that are rated below investment grade. It aims for a broad investment range in terms of maturities, focusing on a weighted average maturity period of five to ten years. The Virtus Convertible & Income Fund II employs a meticulous investment strategy, rooted in fundamental analysis complemented by a bottom-up stock picking approach. The underlying process is supported by in-house research, leveraging proprietary models to make informed investment decisions.

Products and Services

• Convertible Securities

These are corporate bonds or preferred shares that can be converted into a predetermined number of the issuing company's common shares. Convertible securities blend features of both debt and equity, offering the potential for income through interest or dividends and the possibility for capital appreciation. Virtus Convertible & Income Fund II invests in these securities to capitalize on their hybrid nature, seeking to benefit from the upside potential of equity markets while also aiming to protect against downside risks.

• Non-Convertible High-Yield Bonds

Non-convertible high-yield bonds, often referred to as junk bonds, are bonds rated below investment grade, carrying a higher risk of default compared to higher-rated, investment-grade securities. In exchange for this increased risk, they offer higher interest payments. The fund targets these securities as part of its income-generating strategy, aiming to achieve a higher yield by accepting a higher level of credit risk. This component of the fund's portfolio is intended to provide a steady stream of income.