SCHEDULE: Morgan Stanley Discloses 5.4% Stake in Virtus Fund II

Morgan Stanley and its subsidiary, Morgan Stanley Smith Barney LLC, reported a 5.4% beneficial ownership stake in Virtus Convertible & Income Fund II's Series A Preferred Shares.

Summary

• Morgan Stanley and its wholly-owned subsidiary, Morgan Stanley Smith Barney LLC, jointly reported beneficial ownership of 233,601 shares of Virtus Convertible & Income Fund II's 5.50% Series A Cumulative Preferred Shares.
• This aggregate amount represents 5.4% of the total class of securities.
• The event requiring this filing occurred on September 30, 2025.
• The securities were acquired and are held in the ordinary course of business and not for the purpose of changing or influencing the control of the issuer.

Sentiment

Score: 5

Explanation: The filing is a neutral, factual disclosure of beneficial ownership, providing no inherent positive or negative sentiment regarding the issuer's performance or prospects.

Positives

• A major financial institution, Morgan Stanley, holds a significant stake (5.4%) in the preferred shares, which may signal institutional confidence in the security.

Negatives

• No specific negative information regarding the issuer or the security is disclosed in this ownership report.

Risks

• The reporting persons explicitly certified that the securities were not acquired or held for the purpose of changing or influencing the control of the issuer, mitigating potential risks associated with activist investor involvement.

Future Outlook

NA

Management Comments

• "By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under §§ 240.14a-11."

Industry Context

This filing reflects routine institutional investment activity where large financial entities disclose significant ownership stakes in publicly traded securities, particularly preferred shares which are often held for income generation and portfolio diversification.

Related Party Transactions

• Morgan Stanley Smith Barney LLC, one of the reporting persons, is a wholly-owned subsidiary of Morgan Stanley, the other reporting person, indicating a related party relationship in the beneficial ownership structure.

Stakeholder Impact

• Shareholders of Virtus Convertible & Income Fund II are informed of a significant institutional holder of their preferred shares, which can influence market perception and liquidity.

Key Dates

Keywords

Morgan Stanley, Virtus Convertible & Income Fund II, Preferred Shares, Beneficial Ownership, Schedule 13G, Institutional Ownership, Investment Fund, Fixed Income