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Reflation Trades Will Work Again: CPLIX Commentary

The latest commentary from Michael Grant, Senior Co-Portfolio Manager of the Calamos Phineus Long/Short Fund (CPLIX), addresses two scenarios:

  • The resumption of reflation trades, an extension of the bull market for the rest of the year and the Standard & Poor’s 500 peaking 5%-10% above current levels.
  • The bull market peaking within one to two quarters if reflation doesn’t perform in the second half of the year.
cplix-may-2017-positioning

The fund continues to be positioned for the first outcome as Grant expects a sustained reflation cycle into next year, which would benefit financials, select cyclicals and growth technology stocks.

“The Fed funds rate and yield curve do not point to recession until late 2018 at the earliest: stocks still have runway, led by acceleration in year over year growth in sales and earnings into late 2017,” Grant writes in a May 31 Performance Review & Portfolio Positioning Commentary.

Regionally, here’s how CPLIX, a global long/short equity fund, is positioned:

  • United States: “Sentiment of both consumers and corporates is positive and suggest the economic cycle is working.”
  • Europe: Grant remains bullish on European companies’ sustained cyclical improvement. Even so, he says, markets are likely to pause in the short term.
  • Emerging markets: The fund sees “selective opportunities at appropriate valuations.” China’s failure to delever, however, is a risk to Grant’s positive global outlook.

Advisors, there is more detail including 5/31/17 fund performance, sector weights and net exposure in the For Investment Professional Use Only-commentary. For your copy, please talk to your Calamos Investment Consultant at 888-571-2567 or caminfo@calamos.com.

 

 

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance reflected at NAV does not include the Fund’s maximum front-end sales load of 4.75%. Had it been included, the Fund’s return would have been lower. For the most recent month-end fund performance information visit www.calamos.com.

Alternative investments may not be suitable for all investors, and the risks of alternative investments vary based on the underlying strategies used. Many alternative investments are highly illiquid, meaning that you may not be able to sell your investment when you wish to. Unmanaged index returns assume reinvestment of any and all distributions and, unlike fund returns, do not reflect fees, expenses or sales charges. Investors cannot invest directly in an index.

An investment in the Fund(s) is subject to risks, and you could lose money on your investment in the Fund(s). There can be no assurance that the Fund(s) will achieve its investment objective. Your investment in the Fund(s) is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the Fund(s) can increase during times of significant market volatility. The Fund(s) also has specific principal risks, which are described below. More detailed information regarding these risks can be found in the Fund’s prospectus.

The principal risks of investing in the Calamos Phineus Long/Short Fund include: equity securities risk consisting of market prices declining in general, short sale risk consisting of potential for unlimited losses, foreign securities risk, currency risk, geographic concentration risk, other investment companies (including ETFs) risk, derivatives risk, options risk, and leverage risk.

S&P 500 Index – generally considered representative of the U.S. stock market

Before investing carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information or call 1-800-582-6959. Read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

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