“CPZ is a unique strategy in the closed-end fund space, particularly with the way it uses equities to support an income stream for investors.” With that as the introduction, the Closed-End Fund Association recently hosted Michael Grant, Co-CIO, Head of Long/Short Strategies, Senior Co-Portfolio Manager, and Robert F. Bush, Jr., Senior Vice President, Director of Closed-End Fund Products, for a podcast about Calamos Long/Short Equity & Dynamic Income Trust (CPZ).
The interview was a check-in on the fund, which was launched in 2019 based on the premise that investors need to look beyond fixed income to satisfy their income requirements, according to Grant.
“The fund’s objective was to deliver a level of income, which in this case is typically 8% annualized yield, and do it within the equity universe rather than the fixed income universe while ultimately still protecting our clients from the risk of capital loss.
“Now,” Grant continued, “what we've all witnessed in the last year is that capital loss is a real possibility, not just in the equity world, but in the fixed income world. In fact, in the last six months, we've seen some of the largest capital losses in both of those universes in many decades. And that is why in addition to the yield objective of the fund, we also have a capital preservation objective.”
In the 35-minute interview, Grant explains CPZ as a multi-asset strategy with a broad range of opportunities and flexibility in managing equity long/short and fixed income sleeves.
“When we look at an opportunity, what's unusual is that we're looking right across the balance sheet of a corporate issuer. This is very unusual in our industry.”
“Most in our industry,” he continued, “you have a bond team, or you have an equity team, you have a preferred team and so forth. Whereas what we're doing is we're looking at a corporate issuer and deciding, ‘Do we want exposure to the equity? Do we want exposure to the bond and how do we want to structure that opportunity?’”
The market has presented its share of challenges since the fund’s inception three years ago, and yet Bush noted, none of CPZ’s distributions included return of capital—another point of departure from many closed-end funds. The Q&A includes Grant’s comments on both navigating the pandemic and positioning for today’s market, which he expects will favor the active, risk-managed over “benchmark-focused” investments.
You can listen to the complete interview and read the transcript on the CEFA site.
Investment professionals, for more information on CPZ, please contact your Calamos Investment Consultant at 888-571-2567 or email@example.com. For information on Calamos Closed-End Funds, subscribe to our monthly Snapshot.
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