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How About a Bond Alternative for Your Cash Balance Plan Clients?

First published: November 20, 2020

About Cash Balance Plans

Most popular with small and medium-size businesses, the majority of cash balance plans are funded by companies with 100 employees or fewer. They’re ideally suited for businesses that have consistent cash flow and are highly profitable—doctors/dentists and lawyers, accountants and financial services firms.

They enable high income business owners and partners in professional services firms to make significant tax deductions while setting aside much more for retirement than a 401(k).

For more, download this whitepaper.

Low yields have everyone on the hunt for new ideas. One group we’re hearing from, in particular, are the investment professionals specializing in cash balance plans. Now representing more than 42% of defined benefit business—up from 3% 20 years ago—cash balance plans tend to be invested conservatively and are heavy in fixed income.

Lately, to reduce vulnerability to rising rates but also to build in some equity upside and as a hedge against inflation, retirement benefits consultants are gravitating toward Calamos Market Neutral Income Fund (R6 ticker symbol: CVSOX). The fund has a 30-year record that delivered bond-like returns with bond-like standard deviation—but without the interest rate sensitivity.

And here’s what retirement specialists especially like about the fund: its consistency in producing positive returns. Since its I Share inception (see below) the fund has produced just two negative rolling three-year periods, data through March 31.

CMNIX rolling three-year period returns

For more about cash balance plans, see our June 2021 whitepaper.

To discuss with your Calamos Investment Consultant, please call 888-571-2567 or

Click here to view CVSOX's standardized performance.

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.

calamos market neutral income fund average annual returns and expense ratio

The principal risks of investing in Calamos Market Neutral Income Fund include: equity securities risk consisting of market prices declining in general, 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, convertible hedging risk, covered call writing risk, options risk, short sale risk, interest rate risk, credit risk, high yield risk, liquidity risk, portfolio selection risk, and portfolio turnover risk.

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