On a February 23 webcast, Senior Portfolio Manager Brandon Nelson drew upon his 25 years of experience in the small-cap space to share why he believes the time is ripe for a rebound in small caps, and notably the Calamos Timpani Small Cap Growth Fund (CTSIX).
Nelson recalled, “I’ve seen a lot of cycles, and they’re all a little different.” He explained that the common thread with all cycles is that small caps tend to be more volatile with bigger swings up and down that larger caps. However, he noted that this recent period has been frustrating given how long small caps have had to take it on the chin. The Russell 2000 underperformed the Russell 1000 for the sixth year in a row, which Nelson found shocking because small caps tended to win when we look back over 100 years. The good news, according to Nelson, is that things look to be finally turning around for small caps.
Nelson’s key points:
Nelson expressed a strong conviction that the pendulum is swinging in favor of CTSIX’s strategy and portfolio.
To learn more about how CTSIX’s active strategy strives to capitalize on small-cap companies offering secular growth with visible revenue streams, listen to the full replay and Q&A with Brandon Nelson, CFA, here. He also shared examples of his security selection process in action.
*Source FactSet/Jeffries. Average upside surpise data from 3/31/2012 to 9/30/2022, the most recent quarter available.
Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. The views and strategies described may not be appropriate for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations.
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 Timpani Small Cap Growth Fund include: equity securities risk consisting of market prices declining in general, growth stock risk consisting of potential increased volatility due to securities trading at higher multiples, and portfolio selection risk. The Fund invests in small capitalization companies, which are often more volatile and less liquid than investments in larger companies. 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 the potential for greater economic and political instability in less developed countries.
The S&P 500 Index is generally considered representative of the US stock market.
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 2000 Index is published and maintained by FTSE Russell.
The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index. The Russell 1000 Index is published and maintained by FTSE Russell.
Unmanaged index returns assume reinvestment of any and all distributions and do not reflect any fees, expenses or sales charges. Investors cannot invest directly in an index.