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 July 26, 2018

There’s No Denying Emerging Markets—How EM Bounced Back from the Latest Drawdown

This post was written by Calamos Senior Vice President and Portfolio Specialist Todd Speed.

Given today’s shifting geopolitical landscape, many surprising developments can happen in 18 months. The UK voted to leave the European Union, the Trump administration rode a wave of change into power in the U.S., India implemented a massive demonetization initiative in its economy, and China’s steps to open markets to foreign capital mean that it will play an even larger role in the global investing landscape in the future.

Almost none of this was anticipated on January 21, 2016, when emerging market equities reached a major low point against a backdrop of slowing economic growth, weaker currencies and the prospect of higher interest rates and monetary tightening in the U.S.

What we knew then, however, is that emerging markets have historically bounced back, rewarding the investor who has conviction.

We’ve been checking in on EM’s rebound every six months, and it has mostly tracked previous trends. EM equities’ previous six major drawdowns have been followed by roaring recoveries.

And the last datapoint in the 18-month series confirms that this was true of the 2016-2017 rebound, too: From January 21, 2016 to July 21, 2017, the MSCI EM Index returned more than 60%. This is in line with the average 63% bounceback after the previous six drawdowns. Emerging market equites roared back yet again.

emerging market equities, major drawdowns & subsequent performance

From January to June alone the MSCI Emerging Markets Index gained 18.60%, twice the S&P 500 return of 9.34%. Given the positive environment, there may still be some gas left in the tank for at least the second half of the year (see post).

As noted in our July Economic Outlook, we continue to identify a breadth of opportunities in emerging markets. Many countries are benefiting from strengthening economic fundamentals. Liquidity conditions are improving across many economies as inflation has eased and higher interest rates have attracted capital flows. Emerging markets companies are delivering leading earnings growth and improved balance sheets, reflecting their high degree of competitiveness.

Financial advisors, for more information about investing in emerging markets our way, talk to 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 1-800-582-6959. Read it carefully before investing.

    The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.

    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.

    Foreign Securities Risk: Risks associated with investing in foreign securities include fluctuations in the exchange rates of foreign currencies that may affect the U.S. dollar value of a security, the possibility of substantial price volatility as a result of political and economic instability in the foreign country, less public information about issuers of securities, different securities regulation, different accounting, auditing and financial reporting standards and less liquidity than in U.S. markets.

    Emerging Markets Risk: Emerging market countries may have relatively unstable governments and economies based on only a few industries, which may cause greater instability. The value of emerging market securities will likely be particularly sensitive to changes in the economies of such countries. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluations, which could hurt their economies and securities markets.

    The MSCI Emerging Markets Index represents large and mid-cap companies in emerging markets countries. Unmanaged index returns assume reinvestment of any and all distributions and, unlike fund returns, do not reflect fees, expenses or sales charges. Investors cannot invest directly in an index.

    NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE


    SEND A COMMENT

    We encourage you to send us your comments. We cannot post your comments or respond directly to them, but will review them for future blog discussions.

     

    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 performance information, please CLICK HERE. 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. For the most recent month-end fund performance information visit www.calamos.com.