First published: May 6, 2021
If recent data is to be believed, you can expect more of your baby boomer clients to be approaching you about accelerating their retirement date.
Consider these two reports:
Here’s a fresh idea for these clients whose relative young age at retirement will mean they’ll need a considerable cushion: Calamos Global Opportunities Fund (CGCIX). Investing in a diversified portfolio of global equity and convertible
securities, CGCIX provides a core holding option that aims to maintain a consistent risk posture throughout the market cycle. The goal: to participate in the upside movements of the global equity market while lessening the damage of down periods.
Let’s look at a hypothetical example of how the fund would have provided consistent growth and income if your client had invested $500,000 at the fund’s I Shares inception in September 1997, and held that investment through September 30, 2021, making an annual withdrawal of $20,000 in December of each year starting in 1997.
The investment made in 1997 was more than capable of funding the retirement income needs for 24 years, and there would have been $1.91 million left in the fund by September 30 of this year. An MSCI ACWI index-based fund also would have completed the period with money remaining, although $658,000 less.
But look at the client’s experience during the period. CGCIX dropped below the invested balance just once, after the first withdrawal in year 2 and never looked back.
However, early on in the period, the balance of the index-based investment suffered a decline and needed three years to climb back to $500,000. It makes a return trip below $500,000 again in 2009, and again needed more time to recover. Clients who retired early to avoid more work drama are likely not signing up for investment drama, and your selection of CGCIX has the potential to help with that.
|Date||Initial Investment at Inception 9-18-97||End-of-year Withdrawals||Calamos Global Opportunities Fund (CGCIX) Year-end Value||MCMSCI ACWI Year-end Value|
Source: Morningstar Past performance does not guarantee future results. Growth of hypothetical $500,000 assumes reinvestment of dividends and annual $20,000 withdrawals, as stated in each table’s title, at the end of December each year. These illustrations should be read along with the average annual total returns for the 1-, 5- and 10-year periods below. MSCI ACWI Index: 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.
Morningstar Overall RatingTM Among 398 World Allocation funds. The Fund's risk-adjusted returns based on load-waived Class I Shares had 5 stars for 3 years, 5 stars for 5 years and 5 stars for 10 years out of 398, 344 and 234 World Allocation Funds, respectively, for the period ended 12/31/2021.
Shareholders in CGCIX potentially benefit from the fund’s flexibility to invest in a variety of securities to capture opportunity and manage risk. Since its inception and through 9/30/21, the fund has captured 129% of the upside with just 81% of the risk (based on standard deviation). It’s a portfolio designed to achieve optimal risk-return asymmetry.
Investment professionals, for more information on CGCIX, contact your Calamos Investment Consultant at 888-571-2567 or email@example.com.
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 which can be obtained by calling 1-800-582-6959. Read it carefully before investing.
The principal risks of investing in the Calamos Global Opportunities Fund include: convertible securities risk consisting of the potential for a decline in value during periods of rising interest rates and the risk of the borrower to miss payments, synthetic convertible instruments risk consisting of fluctuations inconsistent with a convertible security and the risk of components expiring worthless, foreign securities risk, emerging markets risk, equity securities risk, growth stock risk, interest rate risk, credit risk, high yield risk, forward foreign currency contract risk, portfolio selection risk, and liquidity risk. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities, including fluctuations in currency exchange rates, increased price volatility and difficulty obtaining information. In addition, emerging markets may present additional risk due to potential for greater economic and political instability in less developed countries.
The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets and emerging markets.
MSCI Emerging Markets Index is a free float adjusted market capitalization index. It includes market indexes of Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
The MSCI World ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries*-- excluding the United States. With 985 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
The Bloomberg Capital US Government/Credit Bond Index is composed of long-term government and investment-grade corporate debt securities and is generally considered representative of the performance of the broad US bond market.
FTSE World Government Bond Index (WGBI) is a broad index providing exposure to the global sovereign fixed income market, the index measures the performance of fixed-rate, local currency, investment-grade sovereign bonds. It comprises sovereign debt from over 20 countries, denominated in a variety of currencies.
The Bloomberg 1-3 Month US Treasury Bill Index is designed to measure the performance of public obligations of the US Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months.
Morningstar World Allocation Category funds seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. While these portfolios do explore the whole world, most of them focus on the US, Canada, Japan, and the larger markets in Europe. It is rare for such portfolios to invest more than 10% of their assets in emerging markets.
Morningstar RatingsTM are based on risk-adjusted returns and are through 10/31/21 for Class I shares and will differ for other share classes. Morningstar ratings are based on a risk-adjusted return measure that accounts for variation in a fund's monthly historical performance (reflecting sales charges), placing more emphasis on downward variations and rewarding consistent performance. Within each asset class, the top 10%, the next 22.5%, 35%, 22.5%, and the bottom 10% receive 5, 4, 3, 2 or 1 star, respectively. Each fund is rated exclusively against US domiciled funds. The information contained herein is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Source: ©2021 Morningstar, Inc.