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Convertible Opportunities and Income Fund (CHI)
Objective
Fund Objective
The Fund seeks total return through a combination of capital appreciation and current income by investing in a diversified portfolio of convertible securities and below-investment-grade (high-yield) fixed-income securities.
Investor Profile
This Fund's enhanced fixed-income strategy uses all ranges of credit quality and a variety of debt instruments to achieve its objective. The strategy provides an alternative to investment-grade fixed-income instruments. Offering potential capital appreciation while delivering an attractive stable monthly distribution, the Fund may be suitable for investors who are focused on long-term total return and are looking for dynamic asset allocation to maintain a consistent risk/reward balance throughout the market cycle.
Fund Highlights As Of 6/30/08
- Attractive current annualized distribution rate of 11.93%1
- Steady distribution since inception
- Strong historical performance
- Positioned as enhanced fixed-income
- Closed-end fund portfolio with a mix of convertible and high-yield bonds
- Complements the income portion of an investor's asset allocation
- Less susceptible to rising interest rates than traditional fixed-income funds
- Managed by an experienced team with a proven track record
Approaching the Investment Process as a Team
At Calamos Investments, we've established ourselves as leaders in the asset management industry by investing according to John Calamos' vision: positioning our portfolios for risk management and staying fully invested through all stages of the market cycle. If you look behind the scenes, you'll see an entire team of experienced investment professionals implementing that vision.
Our "one team, one process" management philosophy means the same group of managers uses the same proprietary methodology to analyze companies and securities for every one of our portfolios. Although predicting the future is impossible, our research helps us hone in on indicators that a company may be undervalued or positioned for exceptional growth. Only after closely examining a company's balance sheet, credit quality, growth prospects, most probable range of price movement and fit within the portfolio do we determine whether its security is likely to benefit our strategy.
We've shown our skill at growing wealth for our clients during our nearly 30 years in the business. As active money managers, our ultimate goal—no matter what the market is doing—is to achieve the optimal risk/reward balance.
Data and Distributions as of 6/30/08
Fund Data  View All Holdings |
| Total assets (including leverage) |
$1,047,282,006 |
| Total common share assets |
$663,282,006 |
| Shares outstanding |
48,516,916 |
| Average daily volume (mo.) |
122,806 |
| Total Percent Leveraged5 |
36.67% |
| Debt Coverage Ratio |
3.74 |
| Equity Coverage Ratio |
2.73 |
| Leverage assets |
$384,000,000 |
| Debt Leverage |
$280,000,000 |
| Equity Leverage (ARPS) |
$104,000,000 |
| Shares outstanding |
4,160 |
| Rolling 90-day average rate |
3.21% |
| Portfolio turnover |
55.93% |
| Expense ratio (based upon common share assets) |
1.35% |
| Weighted Average Credit Quality4 |
BBB |
| Distribution History (Latest 12 months) as of 7/01/08 |
| July |
$0.14000 |
| June |
$0.14000 |
| May |
$0.14000 |
| April |
$0.14000 |
| March |
$0.14000 |
| February |
$0.14000 |
| January |
$0.17360* |
| December |
$0.14000 |
| November |
$0.15000 |
| October |
$0.15000 |
| September |
$0.15000 |
| August |
$0.15000 |
 View the Fund's distribution history
* Includes $0.03360 in net realized long-term capital gains.
| Fees and Expenses |
| |
Common |
Total Fund |
| Management fees |
1.23% |
0.80% |
| Debt Leverage |
0.17% |
0.11% |
| Other Expenses |
0.23% |
0.15% |
| Waiver |
-0.28% |
-0.18% |
| Total |
1.35% |
0.88% |
Using a Level Distribution Policy to Promote Total Return
We understand the importance that investors place on the stability of dividends, along with long-term total return. In June 2005, CHI announced the adoption of a level rate distribution policy. Under this policy, the Fund, subject to market conditions at the time of declaration, will pay monthly distributions on each common share at a rate of $0.14000 per share.
The goal is to provide investors with significant long-term total return, based on our belief that closed-end fund investors consider consistent, dependable distributions to be an important component of total-return.
As a reminder, shareholders can accumulate more shares via the dividend reinvestment plan whether the Fund trades at a premium or discount. If the Fund is trading at a premium, the dividend is reinvested at NAV or at 95% of the market price, whichever is greater. If the Fund is trading at a discount, the dividend is reinvested at the market price.
Performance as of 6/30/08
Performance
| Performance-Calendar Year Total Return |
| |
2008 (Year-To-Date) |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 (Since Inception) |
| Market Price |
1.68% |
-20.37% |
14.19% |
7.04% |
14.06% |
47.49% |
11.96% |
| NAV |
-5.69% |
3.32% |
13.00% |
2.94% |
12.74% |
38.29% |
7.36% |
Composition as of 6/30/08
| Portfolio Asset Allocation* View All Holdings |
| Corporate Bonds |
57.7% |
| Convertible Securities |
38.8% |
| Common Stock |
0.7% |
| Other Assets/Liabilities |
2.8% |
| Sector Weightings* |
| Consumer Discretionary |
18.3% |
| Information Technology |
14.6% |
| Financials |
12.0% |
| Industrials |
11.5% |
| Consumer Staples |
11.2% |
| Materials |
8.6% |
| Energy |
8.5% |
| Health Care |
6.9% |
| Telecommunication Services |
5.1% |
| Utilities |
0.5% |
| Representative Holdings^ |
| Description |
Asset Type |
|
| Intel Corp. 2.95%, 12/15/35 |
Convertible Bond |
3.1% |
| Schering-Plough Corp. |
Convertible Preferred Stock |
2.5% |
| Freeport McMoRan Copper & Gold Inc. |
Convertible Preferred Stock |
2.4% |
| Mandalay Resort Group 8.38%, 02/01/11 |
Corporate Bond |
1.7% |
| Invitrogen Corp. 3.25%, 06/15/25 |
Convertible Bond |
1.6% |
| Bayer, AG |
Convertible Preferred Stock |
1.6% |
| VeriSign, Inc. 3.25%, 08/15/37 |
Convertible Bond |
1.5% |
| Bank of America Corp. |
Convertible Preferred Stock |
1.3% |
| Linear Technology Corp. 3.00%, 05/01/27 |
Convertible Bond |
1.3% |
| Citigroup Inc. |
Convertible Preferred Stock |
1.3% |
| Quality Allocation^4 |
| AAA |
1.0% |
| AA |
3.5% |
| A |
18.0% |
| BBB |
15.0% |
| BB |
29.2% |
| B |
15.8% |
| CCC or below |
0.5% |
| Not Rated |
17.0% |
The portfolio is actively managed. Holdings and weightings are subject to change at any time without notice.
^ Data is based on portfolio holdings.
* Sector and portfolio asset allocation are based on total assets.
* U.S. Treasury securities are direct debt obligations issued by the U.S. government. Since Treasury securities are backed by the full faith and credit of the U.S. government, they are generally considered to be free of credit risk and typically carry lower yields than other securities.
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Fund Snapshot
| NYSE Ticker |
CHI |
| NAV Ticker |
XCHIX |
Daily Prices and Rate
as of 7/23/08 |
Current Annualized
Distribution Rate1 |
12.4% |
| Market Price |
$13.55 |
| Market Price Change |
$-0.04 |
| NAV |
$13.34 |
| NAV Change |
$0.01 |
| Premium/(Discount) |
1.57% |
| Team Managed |
Led by Co-Chief Investment Officers:
- John P. Calamos, Sr.
- Chairman, Chief Executive Officer and Chief Investment Officer
- Nick P. Calamos
- Senior Executive Vice President, Head of Investments and Chief Investment Officer
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Past Performance
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. You can purchase or sell common shares daily. Like any other stock, market price will fluctuate with the market. Upon sale, your shares may have a market price that is above or below net asset value and may be worth more or less than your original investment. Shares of closed-end funds frequently trade at a market price that is below their net asset value.
Important Fund Information
There are certain risks associated with an investment in a convertible bond such as default risk—that the company issuing a convertible security may be unable to repay principal and interest—and interest rate risk—that the convertible may decrease in value if interest rates increase.
Investments by the Fund in lower-rated securities involve substantial risk of loss and present greater risks than investments in higher-rated securities, including less liquidity and increased price sensitivity to changing interest rates and to a deteriorating economic environment.
Fixed-income securities are subject to interest rate risk; as interest rates go up, the value of debt securities in the Fund's portfolio generally will decline.
Footnotes
1Current annualized distribution rate on market price is the rate at which the Fund distributes dividend, interest income, and gains earned on the Fund's portfolio, expressed as an annualized percentage of the Fund's current market price per share.
2Total return measures net investment income and capital gain or loss from portfolio investments, assuming reinvestment of income and capital gain distributions.
3Average annual return measures net investment income and capital gain or loss from portfolio investments as an annualized average, assuming reinvestment of income and capital gain distributions.
4Credit quality shown reflects the higher of the ratings of Standard & Poor's Corporation or Moody's Investors Service, Inc. Ratings are relative, subjective and not absolute standards of quality. Excludes equity securities and cash.
5Leverage creates risks which may adversely affect return, including the likelihood of greater volatility of net asset value and market price of common shares; and fluctuations in dividend rates on preferred shares. To attempt to limit the effects of rate increases on the cost of leverage, the Fund has entered into interest-rate swap agreements. These agreements mature in 2008 at costs ranging from 2.69% to 3.60%.
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