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:
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.
Morningstar Overall RatingTM Among 415 World Allocation funds. The Fund's risk-adjusted returns based on load-waived Class I Shares had 5 stars for 3 years, 5 stars for 5 years and 5 stars for 10 years out of 415, 362 and 229 World Allocation Funds, respectively, for the period ended 6/30/2021.
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.
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.
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 firstname.lastname@example.org.
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.
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.