Calamos Global Opportunities Fund: Investing in the World’s Most Exciting Growth Themes—with a Risk-managed Approach

Q&A with Dennis Cogan, CFA, SVP and Senior Co-Portfolio Manager

Key Points:

• Calamos Global Opportunities Fund (CGCIX) has delivered better returns than the global equity market with historically less risk since the fund’s inception.
• By tapping into Calamos’ extensive convertible expertise, CGCIX differs from traditional balanced funds.
• We believe now may be an especially good time to consider this fund as tailwinds for overseas markets strengthen.
• CGCIX includes companies at the center of exciting themes, such as the global AI and GLP-1 value chains, as well as trends US investors may not have heard of … yet.

To find out more about how the fund has achieved its historical success and the opportunities it provides to investors today, we asked Dennis Cogan, CFA, a senior member of the fund’s investment team, five key questions.

1. Many investors recognize that global equities offer capital appreciation potential and diversification but are worried about volatility. How does Calamos Global Opportunities Fund seek to solve this challenge?

   
   Our team manages CGCIX to serve as a strategic allocation to global equities—one that can be held for the long-term. Maximizing the opportunity of equities requires staying the course through short-term volatility. We want investors to feel confident about holding the fund through the ups and downs in the market. To make it easier for investors to stay the course, we focus on providing lower-volatility global stock market participation, with an emphasis on mitigating the impact of drawdowns in the market.

2. Since its inception, CGCIX has earned returns comparable to the global equity market with less volatility. What has driven the fund’s historical success?

   
   There are three important drivers, in my opinion:

   1. We’re managing risk/reward differently from many of our peers—in a way that we believe provides better potential outcomes for investors. Traditional balanced funds invest primarily in stocks, bonds and short-term cash instruments. Our multi-asset approach is differentiated by our use of convertible securities and options--core capabilities of Calamos Investments. In our opinion, our experience in convertibles and options can give us an edge in striking a favorable risk/reward balance, or “skew,” over cycles.

   2. Our process is time tested. Each part of a company’s capital structure offers different risk/reward characteristics—and CGCIX seeks to take advantage of that. Since its founding in the 1970s, Calamos has focused not just on identifying the most compelling companies but also on identifying what we believe are the most attractive ways to invest in a company—for example, through a stock, bond or convertible.

      We also analyze top-down macro influences, secular growth trends and short-term cyclical growth themes. Companies aligned with thematic tailwinds don’t just have better return prospects—in our experience, they often have been more resilient during challenging economic environments. So, focusing on themes is another way to manage risk.
   3. Our integrated management team brings extensive experience. Our portfolio management team has worked closely together for nearly two decades, and we’re well seasoned in capital structure research and thematic investing. We’re collaborating closely with our dedicated team of analysts and sector research experts to generate cross-asset-class insights.
3. You mentioned CGCIX’s investments in convertible securities as a key differentiator from peers. Tell us more about the potential benefits of convertibles across market and interest rate cycles.

   
   Convertible securities combine characteristics of stocks and bonds. With active management, convertibles can provide the opportunity for upside equity participation with potentially less exposure to drawdowns. They have been less vulnerable to changes in interest rates than traditional bonds are. So, convertibles provide an attractive way to navigate market volatility and interest rate risk in our opinion.

   Calamos has been investing in convertibles since the 1970s, and our founder and Global Chief Investment Officer John P. Calamos, Sr. is a pioneer in convertible investing, so we’re bringing decades of experience in convertibles to CGCIX.

4. Why do you believe today’s environment is especially compelling for Calamos Global Opportunities Fund?

   
   First, we’d emphasize that the case for global equities is a strategic one. Global funds have greater flexibility than single-country or regional funds, and experienced managers can capitalize on that through market and economic cycles.

   That said, our team believes there is an especially strong case for Calamos Global Opportunities Fund now. We’re finding many opportunities in the United States, but we’re also seeing a growing set of attractively priced opportunities emerge in non-US markets, where thematic, macro and market trends are providing powerful catalysts.

5. Can you give us some examples about how CGCIX is participating in global opportunities?

   
   We believe that if you’re not investing globally, you’re limiting your participation in some of the world’s most powerful themes, such as AI and GLP-1s. There are US companies that have benefited greatly—for example, Nvidia in the case of AI and Eli Lilly in the case of GLP-1s, particularly for indications of obesity. We believe both are fantastic companies and CGCIX has exposure to both.

   But there are also attractive parts of the AI and GLP-1 value chains outside the US that are riding the same waves. In AI, these include leading-edge semiconductor foundry Taiwan Semiconductor and chip designer Alchip in Taiwan. Within GLP-1s, Novo Nordisk of Denmark was the first mover, has leading market share, and boasts the deepest pipeline of related R&D.

   We’re also investing in companies at the forefront of regionally specific trends that are less familiar to US investors. India is a great example here, where improving living standards, favorable demographics, and pro-growth reforms provide one the most attractive investing backdrops in the world. As Indian incomes rise, we’re seeing increased demand for a wide range of goods and services, including travel and tourism. Online travel agent MakeMyTrip is the local leader, and our team believes the company has a long and attractive runway for growth. CGCIX has owned MakeMyTrip’s convertible bond to gain exposure to that growth potential, but in a structure that could limit downside exposure if the underlying equity declines.

   In a more cyclical area, we see an attractive opportunity in memory chips, where a recovery from a significant downcycle is developing. SK Hynix of Korea is a pure-play memory manufacturing company that may benefit from this upcycle. It’s also the leader in high-bandwidth memory, which is essential to AI. When our team looked across SK Hynix’s capital structure, our view was that the convertible bond offered the most attractive risk/reward skew—in other words, the convertible structure provides a potentially less volatile way to gain exposure to an attractive growth company in a historically volatile industry.