The New Retirement Go-to: Total Return from Global Growth Using CGCIX

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.

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.

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.