SCHEDULE: Morgan Stanley Discloses 5% Stake in Virtus Fund II

Morgan Stanley and its subsidiary, Morgan Stanley Smith Barney LLC, have disclosed a 5.0% beneficial ownership stake in Virtus Convertible & Income Fund II, totaling 954,846 common shares.

Summary

• Morgan Stanley and Morgan Stanley Smith Barney LLC jointly reported beneficial ownership of 954,846 Common Shares of Beneficial Interest in Virtus Convertible & Income Fund II.
• This aggregate amount represents 5.0% of the class of securities.
• The reporting persons have shared dispositive power over all 954,846 shares.
• Shared voting power is reported as 1.00.
• The event requiring this filing occurred on September 30, 2025.
• Morgan Stanley Smith Barney LLC is identified as a wholly-owned subsidiary of Morgan Stanley.

Sentiment

Score: 5

Explanation: The filing is a factual disclosure of beneficial ownership and does not inherently convey positive or negative sentiment regarding the issuer's performance or prospects.

Positives

• The disclosure of a 5.0% stake by a major financial institution like Morgan Stanley may signal institutional confidence in Virtus Convertible & Income Fund II.
• Increased institutional ownership can sometimes lead to greater market stability and liquidity for the issuer's shares.

Future Outlook

This filing is a disclosure of beneficial ownership and does not contain forward-looking statements or guidance regarding the issuer's or reporting persons' future performance or outlook.

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

Schedule 13G filings are standard disclosures required when an institutional investor acquires beneficial ownership of 5% or more of a company's voting equity securities. This indicates a significant, but passive, investment by Morgan Stanley in Virtus Convertible & Income Fund II, a closed-end fund. Such disclosures provide transparency into major institutional holdings, which can influence market perception and investor sentiment.

Comparison to Industry Standards

• Not applicable for this type of filing as it reports beneficial ownership rather than operational or financial results.

Related Party Transactions

• Morgan Stanley Smith Barney LLC, a wholly-owned subsidiary of Morgan Stanley, is a co-reporting person, indicating that the beneficial ownership is held within the broader Morgan Stanley corporate structure.

Stakeholder Impact

• Shareholders of Virtus Convertible & Income Fund II gain transparency into a significant institutional holder, which may influence their perception of the fund's stability and attractiveness.
• The market may react to the news of a major financial institution taking a 5% stake, potentially affecting the fund's share price.

Key Dates

Keywords

Morgan Stanley, Virtus Convertible & Income Fund II, Beneficial Ownership, Schedule 13G, Institutional Investment, Common Shares, Closed-End Fund