Morningstar Overall RatingTM Among 539 Short-Term Bond funds. The Fund's risk-adjusted returns based on load-waived Class I Shares had 4 stars for 3 years out of 539 Short-Term Bond Funds, respectively, for the period ended 12/31/2022.
Pain is on the horizon, Federal Reserve Chairman Jerome Powell promised last month, and made good on today with the Fed’s decision to raise rates by 75 basis points for the third straight month. The move intended to control inflation will slow down the economy, impede corporate earnings, cool borrowing, and likely result in lost jobs. Given today’s news, prospects of a recession improve.
With each move by the Fed, the stock investor is that much more challenged. Volatility has been almost non-stop this year, and the S&P 500 is in a bear market in search of a bottom. Against that backdrop, lower volatility and now higher-yielding fixed income options appeal as they haven’t for years.
We suggested breaking up with TINA (There Is No Alternative to equities) and re-engaging with CINDY (Credit Is Now Delivering Yield) in May. At that time, we quoted a 2.86% yield-to-worst for the Bloomberg US Government/Credit 1-3 Years Index as of April’s end. By the end of July, the Index’s return was 3.23%—only 28 basis points less than the Bloomberg US Aggregate Bond Index. The opportunity, we said then, was to use short duration to take interest rate risk out of portfolios without surrendering yield.
On the day the Fed moved rates to 3.25%—the highest since 2008—we’re back to repeat the same message: In a challenging, even concerning environment for clients, investment professionals have at least one move they can make to reduce risk and generate income.
We recommend Calamos Short-Term Bond Fund (CSTIX), which as of September 15 paid an SEC yield of 3.62% on an 85% investment grade portfolio. There’s no need for your clients to take on credit risk in exchange for duration risk.
Are you ready to discuss? Reach out to your Calamos Investment Consultant at 800-582-6959 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.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. 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.
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 Short-Term Bond Fund include: interest rate risk consisting of loss of value for income securities as interest rates rise, credit risk consisting of the risk of the borrower to miss payments, high yield risk, liquidity risk, mortgage-related and other asset-back securities risk, including extension risk and prepayment risk, US Government security risk, foreign securities risk, non-US Government obligation 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.
Morningstar Short-Term Bond Category funds invest primarily in corporate and other investment-grade US fixed-income issues and typically have durations of 1.0 to 3.5 years. Short-term is defined as 25% to 75% of the three-year average effective duration of the MCBI.
Morningstar RatingsTM are based on risk-adjusted returns and are through 8/31/22 for the share class listed 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: ©2022 Morningstar, Inc.
Morningstar Overall RatingTM Among 550 Short-Term Bond funds. The Fund's risk-adjusted returns based on load-waived Class I Shares had 4 stars for 3 years out of 550 Short-Term Bond Funds, respectively, for the period ended 8/31/2022.
S&P 500 Index is generally considered representative of the US stock market.
Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).
The Bloomberg US Government/Credit 1-3 Years Index includes all medium and larger issues of US government, investment-grade corporate, and investment grade international dollar-denominated bonds that have maturities of between 1 and 3 years and are publicly issued.