Share-split context: A reverse split was recorded on Feb 10, 2025 with coefficient 0.25. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

Understanding Virtus Convertible & Income Fund II (NCZ)

What this ETF is trying to do

Virtus Convertible & Income Fund II (ticker: NCZ) is an ETF traded on the NYSE. While the specific investment strategy details are not listed in the provided data, the fund's name suggests it focuses on convertible securities and generating income for its investors.

What the numbers show

When looking at NCZ, it is important to understand the difference between price return and total return. Price return only tracks how much the share price moves. Total return includes both the price changes and the cash distributions paid out to investors.

• Year-to-Date (YTD): The price return is approximately 1.74%, while the total return is much higher at approximately 9.29%.

• One-Year: The price return is approximately 1.01%, while the total return is approximately 11.33%.

• Three-Year: The price return is approximately 28.86%, while the total return is approximately 80.29%.

Because this ETF has a history of reverse splits, we use split-adjusted returns to see how the investment performed. In a reverse split, multiple old shares are combined into fewer new shares, which causes the per-share price to rise mechanically. This does not mean the investment gained value; it is just a structural change.

Income and distribution explanation

NCZ is designed to provide regular cash to investors. The distribution yield is approximately 10.27%. This means the fund paid out a significant amount of cash relative to its current price of $14.02.

The fund typically pays distributions monthly, with trailing distributions totaling $1.44 per share over the last year. Most of these payments have occurred on Mondays. It is important to remember that a high distribution yield does not guarantee the same level of total return, and high payouts do not guarantee that your original investment (the principal) will stay the same.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, we can look at the erosion-risk score, which is 94. This is labeled as "Stable / sideways" with a "good" severity rating. There is no severe erosion-risk flag for this ETF.

Pros

• High Distribution Yield: The fund offers a high distribution yield of approximately 10.27%.

• Strong Total Returns: Over the last three years, the total return has been approximately 80.29%.

• Consistent Payouts: The fund has a history of monthly distributions.

Cons

• Price vs. Total Return Gap: The price return is much lower than the total return, meaning most of the gains come from distributions rather than the share price going up.

• Reverse Split History: The fund has undergone a reverse split in the past (most recently on February 10, 2025).

Beginner takeaway

NCZ is an ETF that focuses heavily on providing cash distributions. While the share price itself has seen modest growth, the total return—which includes those cash payments—has been much higher. Investors should note that high yields are not the same as total profit and should always look at the total return to see how the fund is actually performing.