If you're a financial advisor considering a long/short strategy in trying to preserve recent gains, be sure you take into account the fund’s approach—and flexibility.
Unlike many funds whose range of beta or overall exposure to the market are bound by prospectus, Calamos Phineus Long/Short Fund (CPLIX) is distinguished by its freedom to respond to changing market conditions and developing opportunities, without being forced to take mandated risk.
Many long/short funds have tended to hug the S&P 500—prompting Co-CIO and CPLIX Senior Co-Portfolio Manager Michael Grant to dub them “long light.” We noted this a few times previously (see 1000 Basis Points: CPLIX’s Q4 Difference and What You Miss When You Look at CPLIX’s ‘Average’ Annualized Beta).
CPLIX goes its own way, which is demonstrated again in its recent performance. Grant and team have kept the fund’s net exposure neutral, reflecting concern over late-cycle vulnerabilities. As Grant points out: “The unusual longevity of this expansion has created vulnerability in key areas of the economy.”
This stance has enabled CPLIX to withstand much of the market volatility and outperform the S&P 500 over the past three months. CPLIX has a record of outperforming during periods of market duress because it has avoided taking on undue exposure.
What is especially noteworthy is the performance of CPLIX’s peer group in Morningstar’s Long/Short category. The category average return has been negative for the one-month, three-month and quarter-to-date period ending May 31, with the three-month average showing a -1.46% return vs. the S&P 500’s -0.67% decline. CPLIX outperformed both with a positive return of 0.51%.
The disparity in category performance can be explained in part by diversity of the funds in the long/short category. For example, as of 5/31/19, net equity exposure across the category ranged from a net long 124.74% down to net short -39.06%. One-year beta ranged between 1.22 and -0.21. CPLIX had net equity exposure of -2.13%, with one-year beta of 0.29 as of 5/31/19.
Advisors, would you like to learn more about CPLIX? Talk to your Calamos Investment Consultant, who can be reached at 888-571-2567 or email@example.com.
Calamos was #1 in flows to funds in the Morningstar Alternatives Category in 2018, and ranks fourth on the list of alternative fund managers by assets under management as of 5/31/19.
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.
Data as of 3/31/19
An investment in the Fund(s) is subject to risks, and you could lose money on your investment in the Fund(s). There can be no assurance that the Fund(s) will achieve its investment objective. Your investment in the Fund(s) is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the Fund(s) can increase during times of significant market volatility. The Fund(s) also has specific principal risks, which are described below. More detailed information regarding these risks can be found in the Fund's prospectus.
The principal risks of investing in Calamos Phineus Long/Short Fund include: equity securities risk consisting of market prices declining in general, short sale risk consisting of potential for unlimited losses, foreign securities risk, currency risk, geographic concentration risk, other investment companies (including ETFs) risk, derivatives risk, options risk, and leverage risk.
Alternative investments are not suitable for all investors.
S&P 500 Index is generally considered representative of the U.S. stock market.
The MSCI World Index is a market capitalization weighted index composed of companies representative of the market structure of developed market countries in North America, Europe and the Asia/Pacific region.
† Morningstar data as of 5/31/19. Morningstar ratings shown are for Class I shares and do not include any front-end sales load. Not all investors have access to or may invest in the share class shown. Other share classes with front-end or back-end sales charges may have different ratings than the ratings shown.
Calamos Phineus Long/Short Fund’s load-waived Class I shares received an Overall Morningstar rating of 4 stars for 3 years out of 210 Long/Short Equity Funds for the period ended 5/31/19.
Morningstar Ratings™ are based on risk-adjusted returns 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: ©2018 Morningstar, Inc.
Morningstar Long/Short Equity Category funds take a net long stock position, meaning the total market risk from the long positions is not completely offset by the market risk of the short positions. Total return, therefore, is a combination of the return from market exposure (beta) plus any value-added from stock-picking or market-timing (alpha).
©2019 Calamos Investments LLC. All Rights Reserved. Calamos® and Calamos Investments® are registered trademarks of Calamos Investments LLC.
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