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Global Convertibles Extend Their Winning Streak Through 3Q
October 2, 2025
Eli Pars, CFA
Summary Points:
- The global convertible market blazed ahead in the third quarter, outperforming the global equity market, as measured by the FTSE Global Convertibles Index and the MSCI World Index; global convertibles are also ahead for the year-to-date.
- Calamos Global Convertible Fund (CXGCX) posted a strong gain in absolute terms for the quarter, which captured nearly all of the global convertible market’s advance and surpassed the global equity market.
- Global convertible issuance surged during the quarter as companies sought to refinance debt and source capital for growth; excitement over AI infrastructure was a powerful theme.
- Total-return convertibles (those that offer attractive levels of upside equity participation and reduced exposure to equity downside) continue to be the backbone of our lower-volatility approach to global equity participation. We are finding many structures that offer the attractive risk/reward skew we seek, particularly in the new issuance market.
Review
During the third quarter, the global convertible market extended its unusually strong run. The FTSE Global Convertibles Index returned 9.13%, outpacing the MSCI World Index, up 7.36%. For the year-to-date through September, the global convertible market’s gain of 21.33% now exceeds the return of the global equity market by 350 basis points.
In July, we noted that one likely driver for global convertibles’ atypical outperformance was the reversal of fortunes in the Magnificent Seven mega-caps and a broadening of market leadership. This quarter, convertibles also benefited from the excitement surrounding the AI infrastructure buildout. The rally in US small caps that followed the Federal Reserve’s much-hoped-for interest rate cut also provided a nice tailwind. (As we discussed in our whitepaper, “The Case for Strategic Convertible Allocations,” the global convertible market has materially different market capitalization characteristics than broad equity market benchmarks like the MSCI World Index. Although diversified across market caps, small- and mid-caps represent the lion’s share of convertible issuers, while mega-caps are scarcer.)
Calamos Global Convertible Fund (CXGCX) also posted a strong return, while maintaining what we believe is a better risk-reward profile with greater focus on downside risk management and less exposure to speculative names. For the quarter, the fund’s gain of 8.92% captured more than 97% of the FTSE Global Convertibles Index’s 9.13% advance, and more than 121% of the MSCI World Index’s upside. For the year-to-date, the fund’s 18.85% return captured 88% of the global convertible market’s upside and nearly 106% of the MSCI World Index’s 17.83% gain.
Issuance
Performance wasn’t the only unusually strong characteristic of the convertible market during the quarter. Issuance also surged. Led by US companies, which brought more than $33 billion in new paper to market, global convertible issuance totaled more than $54 billion for the quarter. For the year, global issuance totals more than $125 billion, surpassing year-to-date issuance for the past three years, and on track to beat 2001’s high-water mark of $167 billion. Although issuance has been diversified across sectors, names tied to AI infrastructure buildout have been especially well represented; a number of these issuers also have roots in cryptocurrency mining. Meanwhile, although there has been an uptick in investment-grade issuance, we haven’t seen the ramp-up that we thought would be needed to reach current levels.
New issuance at these levels is certainly eye-catching. That said, it pays to be selective. While many of the issues that have recently come to market offer attractive total return features (an attractive balance of upside equity participation and risk mitigation), we’re comfortable passing on others. For example, in line with Calamos Global Convertible Fund’s focus on lower-volatility equity participation, we are cautious of convertibles with more speculative attributes and excessive exposure to equity market downside. As a result, we’ve chosen to limit our cryptocurrency exposure to companies with stronger fundamentals—those we’d consider to be the “blue chips of crypto.” Similarly, we’re concerned about signs of speculative excess in AI datacenters, which has led us to position our datacenter exposure more defensively than the benchmarks.
Global convertible issuance is soaring in 2025
($ billions)
Source: BofA Global Research. Data as of September 30, 2025.
While we would not be surprised to see the extraordinary pace of convertible issuance moderate from here, there are many reasons it could continue at a brisk clip. Even in a lower interest rate environment, convertibles’ cost-savings benefits (i.e., lower borrowing costs) make them a compelling choice for companies seeking to refinance debt (convertible or otherwise) or fund growth initiatives.
Positioning
We continue to emphasize total-return convertibles. On average, the fund’s portfolio has a slightly higher delta than the convertible market, while maintaining what we believe is a better risk-reward profile.
We are bottom-up investors, and our allocations to sectors and regions result from individual security selection decisions, not top-down calls. With that said, as of the end of the quarter, the fund’s largest allocations were to the consumer discretionary and information technology sectors, followed by industrials and health care. Within the fund’s consumer discretionary allocation, Chinese online retailers and companies involved in travel and tourism are well-represented. Regarding the former, we pared exposure during the quarter, taking some chips off the table to lock in gains.
From a geographic perspective, the fund’s largest country allocation is to the United States, followed by China and Japan. As noted above, our allocation to China has come down over the quarter as a result of bottom-up trades. From a broader regional perspective, we remain overweight to Emerging Asia and to North America. We’re maintaining our significant underweight to Europe despite the growing buzz about an improving macro environment; we believe the risk-reward and fundamentals of individual issuers are less appealing than what we’re finding elsewhere.
Conclusion
Economic conditions may not be booming but they aren’t contracting either. Easing monetary policy and stimulative fiscal policy will likely be enough to maintain a slow growth trajectory and provide a favorable backdrop for equities and convertibles. Corporate profits have been resilient, reflecting businesses’ ability to adapt to tariffs and other disruptions. While we are yet to be convinced that near-term AI capex will meet the lofty heights that some forecast, we believe it can provide an upside tailwind to economic growth. That said, there are still political and geopolitical risks that we can’t ignore, and we are wary of getting caught up in speculative pockets of the convertible market. Instead, we believe our emphasis on total return convertibles issued by fundamentally strong companies will continue to serve Calamos Global Convertible Fund well.
Total Returns as of 09/30/25
| 3Q 2025 | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Fund Inception | |
|---|---|---|---|---|---|---|---|
| CXGCX | 8.92% | 18.85% | 19.14% | 15.54% | 6.16% | 8.19% | 7.24% (12/31/14) |
| FTSE Global Convertibles Index | 9.13% | 21.33% | 22.67% | 16.06% | 7.37% | 8.17% | 7.24% |
Source: Morningstar. Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. Please refer to important Risk Information. 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. The funds’ gross expense ratio as of the prospectus dated 2/28/2025 is 1.10% for Class I Shares.
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.
Diversification and asset allocation do not guarantee a profit or protect against a loss.
Indexes are unmanaged, do not include fees or expenses and are not available for direct investment. The FTSE Global Convertible Index is designed to broadly represent the global convertible bond market. The MSCI World Index measures the performance of developed market equities. The ICE BofA All US Convertibles Index is a measure of the US convertible market. The S&P 500 Index is a measure of large-cap US equity performance.
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.
Important Risk Information. 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 the Calamos Global Convertible 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, foreign securities risk, emerging markets risk, currency risk, geographic concentration risk, American depository receipts, midsize company risk, small company risk, portfolio turnover risk and portfolio selection risk.
Foreign security risk. 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.
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