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The New Retirement Go-to: Total Return from Global Growth Using CGCIX
September 3, 2020
Most investment professionals we work with are finding that it’s time to shake up their thinking about how to fund client retirements.
For years the go-to move was a traditional allocation fund paying a healthy yield. Here are just three reasons that plan needs a reset:
- Many bond yields are at or near historic lows—to sustain their payouts, many traditional allocation funds are relying on a higher weight in low quality credits, while also confronting increased duration risk in higher quality bond allocations.
- Equity income in many funds is being sourced by high dividend stocks, many of which have elevated payout ratios (which may cause future stress), as well as business models that are increasingly disrupted in the value stock cohort.
- Equities’ sharp decline and snapback this year revealed a lack of resiliency on the part of many funds.
If your allocation fund is paying an attractive yield but underperforming your goals on a total return basis, we have an alternative for you: Calamos Global Growth and Income Fund (CGCIX). CGCIX offers a different way to strike a balanced allocation—with both income and price appreciation that produced the results that investment professionals believe are needed to keep retirements on track.
Calamos Global Opportunities Fund (CGCIX)
Morningstar Overall RatingTM Among 377 Global Allocation funds. The Fund's risk-adjusted returns based on load-waived Class I Shares had 3 stars for 3 years, 5 stars for 5 years and 5 stars for 10 years out of 377, 349 and 255 Global Allocation Funds, respectively, for the period ended 8/31/2023.
CGCIX’s year-to-date outperformance versus its index and peers in the Morningstar World Allocation category can be attributed to its historical ability to lose less and make more. The portfolio management team uses a wider set of tools—including growth equities and convertible securities—to actively adjust the portfolio’s risk.
What’s important in an investment earmarked for retirement is growth, lower volatility and downside risk mitigation during drawdowns, and that’s what CGCIX’s differentiated approach delivered. During the correction, CGCIX participated in 78% of the index downside and significantly outran its peers in the rally, capturing 104% of the upside.
Create Your Own Distribution
As opposed to relying on distributions from a traditional fund, “You can use [the growth from] this fund to create your own distribution,” one investment professional remarked to us recently.
In fact, 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 A Shares inception in September 1996, and held that investment through July 31, 2020, assuming an annual withdrawal rate of 6%, or $30,000.
As you can see, the fund would have provided the required 6% in annual income and then some. More than $1.44 million would have remained in the fund at the end of the withdrawal period. This compares to $869,929 in a MSCI ACWI index-based fund.
Calamos Global Growth and Income Fund
- Focuses on higher quality growth companies globally with attractive fundamentals and durable secular themes
- Leverages Calamos capital structure research and invests in convertibles to actively manage the risk profile and seek alpha opportunities
- Provides attractive total return through a combination of convertible securities, dividend-paying equities, bonds and options
- Incorporates ESG analysis and emphasizes countries enacting structural reforms and improving economic freedoms
Since inception, CGCIX has provided dynamically managed capital appreciation, even against the backdrop of the most volatile periods in market history.
Investment professionals, for more information about replacing your traditional allocation fund with CGCIX, contact your Calamos Investment Consultant at 888-571-2567 or caminfo@calamos.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 1-866-363-9219. Read it carefully before investing.
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 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.
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 U.S., 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.
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
Morningstar RatingsTM are based on risk-adjusted returns and are through 7/31/20 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 U.S. 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: ©2020 Morningstar, Inc.
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Archived material may contain dated performance, risk and other information. Current performance may be lower or higher than the performance quoted in the archived material. For the most recent month-end fund performance information visit www.calamos.com. Archived material may contain dated opinions and estimates based on our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions at the time of publishing. We believed the information provided here was 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.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance reflected at NAV does not include the Fund’s maximum front-end sales load. Had it been included, the Fund’s return would have been lower.
Archived material may contain dated performance, risk and other information. Current performance may be lower or higher than the performance quoted in the archived material. For the most recent month-end fund performance information visit www.calamos.com. Archived material may contain dated opinions and estimates based on our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions at the time of publishing. We believed the information provided here was 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.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance reflected at NAV does not include the Fund’s maximum front-end sales load. Had it been included, the Fund’s return would have been lower.
Archived on September 03, 2021