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Non-U.S. Markets Are Gaining on the U.S.—Are Your Clients Positioned to Benefit?

If there was ever a time to boost your clients’ exposure to non-U.S. markets, it may be now. That’s according to Nick Niziolek, Co-CIO, Head of International and Global Strategies, Senior Co-Portfolio Manager.

top performing companies across the globe

us represents fraction of global gdp

“The global recovery may be uneven, with the advantage going to Asian and European markets,” says Niziolek.

American investment portfolios have long favored American companies and, given the strength of U.S. equities, such “complacency” has had little consequence.

But here’s how Niziolek breaks down the case for non-U.S investing at this point halfway through a memorable year.

  • U.S. political uncertainty is weighing on U.S. returns. Yes, the S&P 500 returned 20.5% in the second quarter and almost 2% in June alone. Still, Niziolek notes that European, emerging market, and Asian benchmarks gained significantly more in June in what he believes could be the start of a multi-year cycle.

    june outperformance the start of a multi-year cycle

  • A global recovery could favor the cyclically tilted markets of EM, Europe and Asia.
  • Relative valuations—the crisis began with cheaper valuations overseas, and that continues to be the case.

    international equities provide more attractive valuations
  • The weak U.S. dollar is a tailwind to these markets. Watch for a debate to take shape about this, Niziolek says. “We believed we were entering a weak-dollar regime post-U.S./China trade truce,” he says. “This was delayed due to COVID-19, but the increased U.S. monetary support, synchronized global recovery, and relative FX valuations should all provide tailwinds for further US$ weakness.”

    Demand for the dollar has been flat to falling, and supply has been outpacing other currencies.

    growth of us monetary aggregate outpaces all others

Calamos Global/International Funds Outperformance YTD

Niziolek and team head into the second half of 2020 confident that they’re ready to navigate the uncertainty ahead. Each of the four Global/International funds outperformed in the three very distinct phases of the first half—the start of the year to its peak on February 20, the peak to the trough on March 23, the trough to the end of the second quarter, including the decisive June.

The outperformance against both benchmark and their Morningstar category peers proved the funds’ ability to adapt even as sector leadership changed and industries driving the recovery evolved, Niziolek believes. (Also see this discussion of how the team has identified secular themes to surface companies that are better positioned and have a greater capacity to grow in both favorable and unfavorable economic climates.)

cigix vs bm and morningstar category

cnwix vs bm and morningstar category

cigex vs bm and morningstar category

cgcix vs bm and morningstar category

Investment professionals, is now the time to redeploy clients’ cash into non-U.S. risk assets? To discuss, reach out to your Calamos Investment Consultant at 888-571-2567 or caminfo@calamos.com.

Click here to view CNWIX’s standardized performance.

Click here to view CIGEX's standardized performance.

Click here to view CGCIX's standardized performance.

Click here to view CIGIX'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.

Opinions are subject to change due to changes in the market, economic conditions or changes in the legal and/or regulatory environment and may not necessarily come to pass. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations.

Important Risk Information. 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 Evolving World Growth Fund include: equity securities risk consisting of market prices declining in general, growth stock risk consisting of potential increased volatility due to securities trading at higher multiples, foreign securities risk, emerging markets risk, 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, and portfolio selection 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 principal risks of investing in the Calamos Global Equity Fund include: equity securities risk consisting of market prices declining in general, growth stock risk consisting of potential increased volatility due to securities trading at higher multiples, value stock risk, foreign securities risk, forward foreign currency contract risk, emerging markets risk, small and mid-sized company risk and portfolio selection 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 principal risks of investing in the Calamos Global Growth and Income 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 principal risks of investing in the Calamos International Growth Fund include: equity securities risk consisting of market prices declining in general, growth stock risk consisting of potential increased volatility due to securities trading at higher multiples, foreign securities risk, emerging markets risk, small and mid-sized company risk and portfolio selection 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.

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