From Barron’s (“Small-Company Stocks Are in Line to Be Big Winners in 2022”) to The Wall Street Journal (“Inflation Bets Give a Boost to Small-Cap Stocks”) to Yahoo Finance (“Are Small Caps the Best Bets for 2022?”), everyone’s talking about small caps lately.
Investment professionals, join our December 8 call to hear our PM make the case for assuring that your clients’ portfolios are adequately exposed to small caps now. Calamos Timpani Small Cap Growth Fund (CTSIX) Senior Portfolio Manager Brandon M. Nelson is bullish, and you’ll hear his views on the alignment of several supportive factors: fundamentals, valuations, earnings revisions, and even the seasonality that has historically favored small caps.
CTSIX closed 2020 with a 63% return or 2800 basis points more than the Russell 2000 Growth Index. Even as investors favored small cap value for most of this year, CTSIX—one of the “growthier” funds in its Morningstar category—outperformed. Compare the fund’s YTD return of 20.16% (as of 10/31/21) with the returns of the Russell 2000 Growth Index (+7.64%) and Morningstar Small Growth category (+15.43%).
Small caps began an extended cycle of outperformance starting last September. Fourteen months in—including a period of underperformance from March to September—a winning small cap streak could have more than five years to go, with much of the gains still to come, according to Nelson. When small caps beat large caps, the magnitude of outperformance is about five to one, as shown below with data as of 10/31.
There’s a lot to talk about. Join our call—and get your questions answered, too—Wednesday, Dec. 8.
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 information provided here is reliable, but do not warrant its accuracy or completeness. The material is not intended as an offer or solicitation for the purchase 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 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. The securities highlighted are discussed for illustrative purposes only. They are not 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 Timpani Small Cap 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, and portfolio selection risk. The Fund invests in small capitalization companies, which are often more volatile and less liquid than investments in larger companies. 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 RatingsTM are based on risk-adjusted returns and are through 10/31/21 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: ©2021 Morningstar, Inc.