Objective
The Fund seeks total return through capital appreciation and current income by investing in a diversified portfolio of convertible securities and high yield corporate bonds.
Investment Strategy & Process
The integrated investment team employs an investment process that considers global macroeconomic factors and investment themes. A comprehensive, investment process includes both fundamental and quantitative research to evaluate the source, sustainability and risk of investment opportunities. Risk is monitored and managed at the diversified portfolio and individual security level.
Fund Highlights As Of 3/31/13
- A diversified portfolio includes a mix of convertible securities and high yield corporate bonds.
- One of the first closed-end funds to combine multiple asset classes in an effort to enhance returns and manage risk.
- Seeks a level-rate distribution policy designed with the goal of providing stable, monthly distributions.
- Seeks to be less susceptible to rising interest rates than traditional fixed-income funds.
- At least 35% in convertible securities and at least 80% income securities (convertible or non-convertible).
Fund Data as of 3/31/13
| Managed Assets |
$1,166,395,513 |
| Total Common Share Assets |
$866,395,513 |
| Shares Outstanding |
67,547,533 |
| Average Daily Volume (mo.) |
220,474 |
| Total Percent Leveraged |
25.12% |
| Debt Coverage Ratio |
389% |
| Leverage assets |
$300,000,000 |
| Debt Leverage |
$300,000,000 |
| Average Portfolio Turnover |
62.9% |
| Expense Ratio (based upon managed assets) |
1.11% |
| Duration Rates |
|
| Fees & Expenses as of 3/31/13 |
Total Fund |
| Management Fees |
0.80% |
| Debt Leverage Expense |
0.26% |
| Other Expenses |
0.05% |
| Total |
1.11% |
* Current Annualized Distribution Rate is the Fund’s distribution, expressed as an annualized percentage of the Fund’s current market price per share. Under the Fund’s level rate distribution policy, distributions paid to common shareholders typically include net investment income and net realized short-term capital gains. When the net investment income and net realized short-term capital gains are not sufficient, a portion of the level rate distribution will be a return of capital. In additional a limited number of distributions per calendar year may include net realized long-term capital gains. Distributions are subject to re-characterization for tax purposes after the end of the fiscal year.
Debt Coverage Ratio is the amount of cash flow available to meet annual interest and principal payments on debt. A Debt Coverage Ratio of less than 1 would mean a negative cash flow. For example, a ratio of 0.95, would mean that there is only enough net operating income to cover 95% of annual debt payments.
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
The Fund may invest up to 100% of its assets in foreign securities and invest in an array of security types and market-cap sizes, each of which has a unique risk profile. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities. These include fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining 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.
The Fund may invest in derivative securities, including options. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. There is no assurance that any derivative strategy used by the Fund will succeed. One of the risks associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised.
The Fund may seek to purchase index put options to help reduce downside exposure however, the effectiveness of the Fund’s index option-based risk management strategy may be reduced if the Fund’s equity portfolio does not correlate to the performance of the underlying option positions. The Fund also risks losing all or part of the cash paid for purchasing index options. Unusual market conditions or lack of a ready market of any particular option at a specific time may reduce the effectiveness of the Fund’s option strategies, and for these and other reasons the Fund’s option strategies may not reduce the Fund’s volatility to the extent desired. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline.
The goal of the level-rate distribution policy is to provide investors a predictable, though not assured, level of cash flow. Monthly distributions paid may include net investment income, net realized short-term capital gains and, if necessary, return of capital. Maintenance of this policy may increase transaction and tax costs associated with the fund.
Leverage 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 the variable rates of the leverage financing. The ratio is the percent of borrowing to total assets.
Each fund have specific risks, which are outlined in the respective fund's prospectus. The general risks involved in investing in a closed end fund, include market volatility risk, dividend and income risk and loss of investment risk. Please refer to each fund's prospectus, annual and semi annual reports at calamos.com for a complete information on the fund's performance, investments and risks.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
Distribution History
AS OF 4/30/13
Current Year Distribution Detail
| Ex Date | Payable Date | Distribution | Ordinary Income | Long-Term Capital Gains | Return Of Capital | Press Releases |
| May | 5/08/13 | 5/15/13 | 0.0950 | 0.0950 | 0.0000 | 0.0000 | Press Release |
| April | 4/08/13 | 4/15/13 | 0.0950 | 0.0625 | 0.0000 | 0.0325 | Press Release |
| March | 3/08/13 | 3/15/13 | 0.0950 | 0.0000 | 0.0000 | 0.0950 | Press Release |
| February | 2/08/13 | 2/15/13 | 0.0950 | 0.0776 | 0.0000 | 0.0174 | Press Release |
Prior Year Distribution Detail
For 2012 final tax characterization of distributions click here. Previously posted distribution estimates for the 2012 calendar year have been removed.
Ordinary income includes net investment income and short-term capital gains. The distribution tables provided here are for informational purposes only. Estimates are calculated on a tax basis rather than on a generally accepted accounting principles (GAAP) basis, but should not be used for tax reporting purposes. Distributions may be subject to re-characterization for tax purposes after the end of the fiscal year. Individual (non-corporate) shareholders with taxable accounts will receive written notification regarding the components and tax treatment for distributions via Form 1099-DIV. If your distributions are reinvested in additional shares, you will receive a statement reflecting the reinvestment of the distribution. This information is not legal or tax advice. Consult a professional regarding your specific legal or tax matters.
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.
The goal is to provide investors with 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.
* Current Annualized Distribution Rate is the Fund’s distribution, expressed as an annualized percentage of the Fund’s current market price per share. Under the Fund’s level rate distribution policy, distributions paid to common shareholders typically include net investment income and net realized short-term capital gains. When the net investment income and net realized short-term capital gains are not sufficient, a portion of the level rate distribution will be a return of capital. In additional a limited number of distributions per calendar year may include net realized long-term capital gains. Distributions are subject to re-characterization for tax purposes after the end of the fiscal year.
Debt Coverage Ratio is the amount of cash flow available to meet annual interest and principal payments on debt. A Debt Coverage Ratio of less than 1 would mean a negative cash flow. For example, a ratio of 0.95, would mean that there is only enough net operating income to cover 95% of annual debt payments.
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
The Fund may invest up to 100% of its assets in foreign securities and invest in an array of security types and market-cap sizes, each of which has a unique risk profile. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities. These include fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining 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.
The Fund may invest in derivative securities, including options. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. There is no assurance that any derivative strategy used by the Fund will succeed. One of the risks associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised.
The Fund may seek to purchase index put options to help reduce downside exposure however, the effectiveness of the Fund’s index option-based risk management strategy may be reduced if the Fund’s equity portfolio does not correlate to the performance of the underlying option positions. The Fund also risks losing all or part of the cash paid for purchasing index options. Unusual market conditions or lack of a ready market of any particular option at a specific time may reduce the effectiveness of the Fund’s option strategies, and for these and other reasons the Fund’s option strategies may not reduce the Fund’s volatility to the extent desired. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline.
The goal of the level-rate distribution policy is to provide investors a predictable, though not assured, level of cash flow. Monthly distributions paid may include net investment income, net realized short-term capital gains and, if necessary, return of capital. Maintenance of this policy may increase transaction and tax costs associated with the fund.
Leverage 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 the variable rates of the leverage financing. The ratio is the percent of borrowing to total assets.
Each fund have specific risks, which are outlined in the respective fund's prospectus. The general risks involved in investing in a closed end fund, include market volatility risk, dividend and income risk and loss of investment risk. Please refer to each fund's prospectus, annual and semi annual reports at calamos.com for a complete information on the fund's performance, investments and risks.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
SHARE PRICE / NAV HISTORY
PREMIUM / DISCOUNT
* Current Annualized Distribution Rate is the Fund’s distribution, expressed as an annualized percentage of the Fund’s current market price per share. Under the Fund’s level rate distribution policy, distributions paid to common shareholders typically include net investment income and net realized short-term capital gains. When the net investment income and net realized short-term capital gains are not sufficient, a portion of the level rate distribution will be a return of capital. In additional a limited number of distributions per calendar year may include net realized long-term capital gains. Distributions are subject to re-characterization for tax purposes after the end of the fiscal year.
Debt Coverage Ratio is the amount of cash flow available to meet annual interest and principal payments on debt. A Debt Coverage Ratio of less than 1 would mean a negative cash flow. For example, a ratio of 0.95, would mean that there is only enough net operating income to cover 95% of annual debt payments.
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
The Fund may invest up to 100% of its assets in foreign securities and invest in an array of security types and market-cap sizes, each of which has a unique risk profile. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities. These include fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining 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.
The Fund may invest in derivative securities, including options. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. There is no assurance that any derivative strategy used by the Fund will succeed. One of the risks associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised.
The Fund may seek to purchase index put options to help reduce downside exposure however, the effectiveness of the Fund’s index option-based risk management strategy may be reduced if the Fund’s equity portfolio does not correlate to the performance of the underlying option positions. The Fund also risks losing all or part of the cash paid for purchasing index options. Unusual market conditions or lack of a ready market of any particular option at a specific time may reduce the effectiveness of the Fund’s option strategies, and for these and other reasons the Fund’s option strategies may not reduce the Fund’s volatility to the extent desired. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline.
The goal of the level-rate distribution policy is to provide investors a predictable, though not assured, level of cash flow. Monthly distributions paid may include net investment income, net realized short-term capital gains and, if necessary, return of capital. Maintenance of this policy may increase transaction and tax costs associated with the fund.
Leverage 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 the variable rates of the leverage financing. The ratio is the percent of borrowing to total assets.
Each fund have specific risks, which are outlined in the respective fund's prospectus. The general risks involved in investing in a closed end fund, include market volatility risk, dividend and income risk and loss of investment risk. Please refer to each fund's prospectus, annual and semi annual reports at calamos.com for a complete information on the fund's performance, investments and risks.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
Sector Weightings
AS OF 4/30/13
|
|
% of Assets
|
|
Energy
|
16.6%
|
|
Consumer Discretionary
|
16.3%
|
|
Industrials
|
14.9%
|
|
Information Technology
|
13.7%
|
|
Health Care
|
11.4%
|
|
Financials
|
10.3%
|
|
Materials
|
5.8%
|
|
Consumer Staples
|
3.4%
|
|
Utilities
|
2.9%
|
|
Telecommunication Services
|
2.3%
|
|
Index Options
|
0.0%
|
|
Sovereign Bonds
|
0.0%
|
|
Other
|
0.0%
|
Portfolio Asset Allocation
AS OF 4/30/13
AS OF 4/30/13
|
Company
|
Security Type
|
% of Net Assets
|
|
United Technologies Corp.
|
Convertible Preferred Stock
|
2.4%
|
|
Gilead Sciences, Inc.
|
Convertible Bonds
|
1.7%
|
|
Chesapeake Energy Corp.
|
Convertible Preferred Stock
|
1.7%
|
|
Affiliated Managers Group, Inc.
|
Convertible Preferred Stock
|
1.6%
|
|
SanDisk Corp.
|
Convertible Bonds
|
1.5%
|
|
Liberty Interactive, LLC
|
Convertible Bonds
|
1.5%
|
|
NextEra Energy, Inc.
|
Convertible Preferred Stock
|
1.5%
|
|
Mentor Graphics Corp.
|
Convertible Bonds
|
1.4%
|
|
General Motors Company
|
Convertible Preferred Stock
|
1.3%
|
|
WellPoint, Inc.
|
Convertible Bonds
|
1.3%
|
|
Total
|
|
15.9%
|
Country Exposure
AS OF 4/30/13
| United States | 86.6% |
| Canada | 3.1% |
| Ireland | 1.9% |
| Germany | 1.3% |
| United Kingdom | 1.2% |
| Netherlands | 0.9% |
| France | 0.8% |
| Australia | 0.7% |
| Norway | 0.6% |
| Cyprus | 0.6% |
Regional Exposure
AS OF 4/30/13
| North America |
89.4% |
| Europe |
6.5% |
| Caribbean |
1.0% |
| Asia/Pacific |
0.7% |
| Latin America |
0.0% |
| Middle East/Africa |
0.0% |
Quality Allocation
AS OF 4/30/13
| AAA |
0.4% |
| AA |
0.0% |
| A |
5.7% |
| BBB |
9.9% |
| BB |
47.7% |
| B |
27.6% |
| CCC and below |
1.5% |
| Unrated Securities |
7.2% |
Swaps
AS OF 4/30/13
|
Total % of Leverage Swapped
|
Maturity
|
Notional
Amount
|
% of Total Swap
|
Swap
Rate
|
|
31.0%
|
04/19/2017
|
$55,000,000
|
31.0%
|
1.1600%
|
|
46.0%
|
04/14/2014
|
$80,000,000
|
46.0%
|
2.4300%
|
|
23.0%
|
03/14/2017
|
$40,000,000
|
23.0%
|
1.1400%
|
Important Fund Information
Leverage 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 any preferred shares.
The use of swap transactions involves investments techniques and risks that are different from those associated with portfolio security transactions. If Calamos is incorrect in its forecasts of market values, interest rates, and other applicable factors, the investment performance of the Fund will be less favorable than if those techniques had not been used. Those instruments are typically not traded on exchanges. Accordingly, there is risk that the other party to certain of these instruments will not perform its obligations to the Fund or that the Fund may be unable to enter into offsetting positions to terminate its exposure or liquidate its position under certain of these instruments when it wishes to do so. Such occurrences could result in losses to the Fund.
Shares of closed-end funds frequently trade at a market price that is below their net asset value.
Sectors, Securities, and Countries mentioned are presented to illustrate sectors in which the fund may invest. Portfolio holdings are subject to change daily.
* Current Annualized Distribution Rate is the Fund’s distribution, expressed as an annualized percentage of the Fund’s current market price per share. Under the Fund’s level rate distribution policy, distributions paid to common shareholders typically include net investment income and net realized short-term capital gains. When the net investment income and net realized short-term capital gains are not sufficient, a portion of the level rate distribution will be a return of capital. In additional a limited number of distributions per calendar year may include net realized long-term capital gains. Distributions are subject to re-characterization for tax purposes after the end of the fiscal year.
Debt Coverage Ratio is the amount of cash flow available to meet annual interest and principal payments on debt. A Debt Coverage Ratio of less than 1 would mean a negative cash flow. For example, a ratio of 0.95, would mean that there is only enough net operating income to cover 95% of annual debt payments.
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
The Fund may invest up to 100% of its assets in foreign securities and invest in an array of security types and market-cap sizes, each of which has a unique risk profile. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities. These include fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining 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.
The Fund may invest in derivative securities, including options. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. There is no assurance that any derivative strategy used by the Fund will succeed. One of the risks associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised.
The Fund may seek to purchase index put options to help reduce downside exposure however, the effectiveness of the Fund’s index option-based risk management strategy may be reduced if the Fund’s equity portfolio does not correlate to the performance of the underlying option positions. The Fund also risks losing all or part of the cash paid for purchasing index options. Unusual market conditions or lack of a ready market of any particular option at a specific time may reduce the effectiveness of the Fund’s option strategies, and for these and other reasons the Fund’s option strategies may not reduce the Fund’s volatility to the extent desired. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline.
The goal of the level-rate distribution policy is to provide investors a predictable, though not assured, level of cash flow. Monthly distributions paid may include net investment income, net realized short-term capital gains and, if necessary, return of capital. Maintenance of this policy may increase transaction and tax costs associated with the fund.
Leverage 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 the variable rates of the leverage financing. The ratio is the percent of borrowing to total assets.
Each fund have specific risks, which are outlined in the respective fund's prospectus. The general risks involved in investing in a closed end fund, include market volatility risk, dividend and income risk and loss of investment risk. Please refer to each fund's prospectus, annual and semi annual reports at calamos.com for a complete information on the fund's performance, investments and risks.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
Literature
CHI Quarterly Commentary A quarterly discussion of the Calamos Convertible Opportunities and Income Fund performance, related market commentary, and outlook. CHI Fact Sheet The CHI 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. CHI Annual Report The CHI annual report includes a letter from John P. Calamos, Sr. to shareholders outlining the fund performance, as well as a comprehensive review of the fund’s activities and financial performance. CHI Semiannual Report The CHI semiannual report includes a letter from John P. Calamos, Sr. to shareholders and provides a comprehensive review of the fund’s activities and financial performance for a six month period. CHI Prospectus This prospectus supplement, together with the accompanying prospectus, sets forth concisely the information that you should know before investing. You should read the accompanying prospectus and prospectus supplement, which contain important information, before deciding whether to invest in our securities.
* Current Annualized Distribution Rate is the Fund’s distribution, expressed as an annualized percentage of the Fund’s current market price per share. Under the Fund’s level rate distribution policy, distributions paid to common shareholders typically include net investment income and net realized short-term capital gains. When the net investment income and net realized short-term capital gains are not sufficient, a portion of the level rate distribution will be a return of capital. In additional a limited number of distributions per calendar year may include net realized long-term capital gains. Distributions are subject to re-characterization for tax purposes after the end of the fiscal year.
Debt Coverage Ratio is the amount of cash flow available to meet annual interest and principal payments on debt. A Debt Coverage Ratio of less than 1 would mean a negative cash flow. For example, a ratio of 0.95, would mean that there is only enough net operating income to cover 95% of annual debt payments.
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
The Fund may invest up to 100% of its assets in foreign securities and invest in an array of security types and market-cap sizes, each of which has a unique risk profile. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities. These include fluctuations in currency exchange rates, increased price volatility, and difficulty obtaining 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.
The Fund may invest in derivative securities, including options. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. There is no assurance that any derivative strategy used by the Fund will succeed. One of the risks associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised.
The Fund may seek to purchase index put options to help reduce downside exposure however, the effectiveness of the Fund’s index option-based risk management strategy may be reduced if the Fund’s equity portfolio does not correlate to the performance of the underlying option positions. The Fund also risks losing all or part of the cash paid for purchasing index options. Unusual market conditions or lack of a ready market of any particular option at a specific time may reduce the effectiveness of the Fund’s option strategies, and for these and other reasons the Fund’s option strategies may not reduce the Fund’s volatility to the extent desired. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline.
The goal of the level-rate distribution policy is to provide investors a predictable, though not assured, level of cash flow. Monthly distributions paid may include net investment income, net realized short-term capital gains and, if necessary, return of capital. Maintenance of this policy may increase transaction and tax costs associated with the fund.
Leverage 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 the variable rates of the leverage financing. The ratio is the percent of borrowing to total assets.
Each fund have specific risks, which are outlined in the respective fund's prospectus. The general risks involved in investing in a closed end fund, include market volatility risk, dividend and income risk and loss of investment risk. Please refer to each fund's prospectus, annual and semi annual reports at calamos.com for a complete information on the fund's performance, investments and risks.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE