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Leaders of Today, Leaders of Tomorrow: Convertible Opportunity in Focus

Joe Wysocki
June 2, 2026

We believe:

  • Alphabet’s proposed $15 billion mandatory convertible issue demonstrates that the convertible market remains a top choice for the most innovative companies.
  • Large-cap companies like Alphabet and Oracle (which issued $5 billion in mandatory preferred convertibles earlier this year) could add energy to an already exciting market.
  • These mega-cap issuers are a dynamic complement to the small and mid-cap “leaders of tomorrow” that are well represented in the convertible market.
  • Convertibles are especially compelling for growth investors because, in many cases, their structural features offer built-in risk management.
  • Active management is essential for harnessing the opportunity of the asset class; our nearly 50 years of experience gives us a valuable edge.

Convertible securities are hybrid securities that blend the characteristics of stocks and fixed-income securities to meet the needs of issuers and investors alike. Over more than 150 years, the convertible market has evolved and adapted; today’s market includes a range of structures, including traditional convertible bonds, convertible preferreds, and less familiar structures, like convertibles with mandatory conversion features.

Whereas a traditional convertible bond provides the holder with the option but not the obligation to convert the bond into a specific number of shares of the underlying common stock at a pre-determined price, a mandatory convertible requires conversion to equity at a set date, typically three years after issuance. Mandatory convertibles typically provide more income than the common stock in exchange for giving up the bond floor and the downside risk mitigation that a traditional convertible bond provides.

At Calamos, we believe that convertible securities provide a wealth of strategic asset allocation opportunities. As both students and investors of the asset class, we’re tremendously excited to see dynamic issuance trends energizing the market. This includes bellwether mega-cap tech leaders choosing convertibles to fund their plans for AI expansion.

  1. Growth capital for growth companies. Historically, the convertible market has been home to many of the most innovative companies, and we certainly see that today. The convertible market offers a breadth of ways to participate in secular trends, such as the AI buildout. Many of the names in the convertible market may not be familiar—today—but the market has a long history of being home to the leaders of tomorrow.

    Convertibles are not only attractive for issuers seeking to fund growth at lower borrowing costs—they also provide appealing opportunities for risk-conscious, growth-oriented investors. One of the most important potential benefits of convertibles is that they provide investors with a way to access higher-growth opportunities with less downside exposure. This is because the fixed-income characteristics of a convertible can provide a cushion during periods of equity market downside volatility.

    Convertibles provide risk-managed participation in high-growth themes and companies

    Calamos Convertible Fund (CICVX), Top 10 Holdings

    *Issuer provides exposure to AI theme

    CICVX holdings

    Data as of 3/31/2026. Holdings and weightings are subject to change daily. Holdings are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned. Top 10 Holdings are calculated as a percentage of net assets and exclude cash or cash equivalents, any government / sovereign bonds or broad-based index hedging securities the portfolio may hold. You can obtain a complete listing of holdings by visiting www.calamos.com.

  2. Issuance is roaring, energized by diverse issuers. In 2025, companies around the world set a record for new convertible issuance, with $167 billion coming to market. Issuance reflects a variety of conditions, but what’s most important to remember is that convertible issuance is about capital market access, and capital market access is tied to economic growth. As the economy maintains its growth trajectory, issuance in 2026 has surged. Through May, companies have issued more than $92 billion, led by US companies at $54 billion.

    New Issuance for 2026 on Pace to Surpass 2025’s Record-Breaking Year

    Global Convertible New Issuance ($ bil)

    Global Convertible New Issuance as 5/31/26

    Sources: BofA Global Research and Calamos. Year to date through 5/31/2026.

    Alphabet’s recent announcement comes on the heels of Oracle’s $5 billion mandatory preferred offering earlier this year, part of its $50 billion raise to drive AI infrastructure investment. Other important large-cap issuers include NextEra Energy, one of the largest regulated utilities in the US and a serial issuer of convertibles.

    As Calamos Founder and Global Chief Investment Officer John P. Calamos, Sr. and Co-CIO Eli Pars note their white paper, "The Case for Strategic Convertible Allocations," convertible issuance often reflects a “follow the leader” trend, and we view the participation of companies like Alphabet, Oracle, and NextEra as likely catalysts for other large, investment-grade rated companies to join the convertible market.

  3. Active management is key to capitalizing on the opportunities convertible securities can offer. While we don’t invest in the “market” as a whole, we are very encouraged by what we see today. A larger, more diverse market means a more varied opportunity set in terms of deal quality, structure, and pricing—a richer hunting ground where we can maximize the impact of our proprietary approach and decades of experience.

    Not only are we finding compelling entry points to build allocations to first-time convertible issuers with attractive growth characteristics, but we’re also identifying opportunities to enhance our exposure to companies we already hold. Often, new issues offer opportunities to restore convexity (improve upside/downside capture) and restrike a bond floor in names with strong fundamental stories.

Optimistic Outlook

With active management, convertibles can deliver benefits through full economic and market cycles, helping investors avoid market timing decisions and stay invested for the long term. We expect issuance to remain strong as companies seek growth capital.

We believe Calamos Convertible Fund’s historical results demonstrate the benefits of our approach, and we’re excited about the many opportunities we see unfolding in an especially dynamic market.

Calamos Convertible Fund returns as of 5-31-26

Past performance is no guarantee of future results. Source: Morningstar, Calamos. Rankings based on percentile rankings for the I share class within the Morningstar US Convertible Category. As of 5/31/2026, the fund was ranked 4 of 77 funds for the year-to-date period, 3 of 77 funds for the one-year period, 24 of 75 funds for the three-year period, 21 of 72 funds for the five-year period, and 34 of 69 funds for the 10-year period. Indexes are unmanaged, do not include fees or expenses, and are not available for direct investment.



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.

Calamos Convertible Fund average annual returns as of 3/31/26

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 Convertible Fund include: convertible-securities risk consisting of the potential for a decline in value during periods of rising interest rates and the risk of the borrower to miss payments, synthetic-convertible-instruments risk consisting of fluctuations inconsistent with a convertible security and the risk of components expiring worthless, foreign-securities risk, equity-securities risk, interest-rate risk, credit risk, high-yield risk, portfolio-selection risk and liquidity 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.

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.

Diversification and asset allocation do not guarantee a profit or protect against a loss. Alternative strategies entail added risks and may not be appropriate for all investors. Indexes are unmanaged, not available for direct investment and do not include fees and expenses.

NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

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