The Virtus Convertible Fund Institutional primarily focuses its investment strategy on convertible securities. Typically, at least 80% of the fund's net assets, including any capital acquired through borrowing for investment purposes, will be allocated to these types of instruments. Convertible securities are financial instruments that hold the option to be transformed or exchanged into equity shares or other equity-linked assets. This category encompasses a variety of holdings, such as corporate bonds, debentures, notes, preferred stocks, and various hybrid versions thereof. Their defining characteristic is the ability to convert into common stock or other securities, like warrants or options, which ultimately provide an opportunity for participation in the equity ownership of a company.