Investment Team Voices Home Page
Riding the Winds of Change
April 1, 2026
Brandon Nelson, CFA
Summary Points:
- Supported by our fundamental investment style and security selection, the Calamos Timpani funds held up under the pressure of a tremendously volatile Q1.
- Small caps have historically underperformed large caps during periods of elevated geopolitical tensions; this time around, small caps bucked that trend.
- We believe our investment criteria (i.e., seeking secular growers and niche opportunities with sustainable fast and underestimated growth) position the funds advantageously for the environment we see ahead.
Small caps, as measured by the Russell 2000 Index, had an up January, flat February, and down March. Small caps finished the quarter with flat performance but more than 500 basis points ahead of the large-cap Russell 1000 Index, which struggled mightily, led lower by large-cap growth stocks.
Calamos Timpani Funds Held Up When Peers and Benchmarks Faltered
| 1Q26 | |
|---|---|
| CTSIX | 0.55% |
| Russell 2000 Growth Index | -2.81% |
| Morningstar Small Growth Category | -2.07% |
| CTIGX | 0.46% |
| Russell 2500 Growth Index | -3.52% |
| Morningstar Small Growth Category | -2.07% |
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. Performance reflected at NAV does not include the Funds’ maximum front-end sales load of 4.75%. Had it been included, the Funds’ return would have been lower. All performance shown assumes reinvestment of dividends and capital gains distributions. As of the prospectus dated 2/27/2026, CTSIX’s gross expense ratio is 1.09% and CTIGX’s gross expense ratio is 1.40%.
There are always many moving parts to analyze, but winds of change seem to be in the air. The small-cap outperformance during the quarter is significant as it marks a continuation of leadership that began in the second half of 2025. In fact, from July 1, 2025, to March 31, 2026, small caps impressively outperformed large caps by nearly 1000 basis points; and micro caps, the smallest of the small, outperformed large caps by more than 2000 basis points! Small caps even performed in line with large caps in March when sky-high geopolitical tensions would normally trigger significant underperformance relative to large caps.
The investor excitement for small caps is likely being driven by low relative valuations, an uptick in small-cap M&A activity, and an accelerating earnings growth picture, which is being sparked by accommodative fiscal and monetary policy over the last several months. Additionally, there may be an element of investors craving a fresher theme given that small caps went through the longest relative losing streak on record. The streak was so long, investors likely forgot small caps tend to meaningfully outperform over the long haul.
It was a tricky quarter to navigate, but Calamos Timpani Small Cap Growth Fund (CTSIX) and Calamos Timpani SMID Growth Fund (CTIGX) had what we consider admirable quarters. Each fund outperformed its respective benchmark and Morningstar category average during the quarter.
The strong performance was driven by a combination of our fundamental momentum investment style (i.e., sustainably fast and underestimated growth), along with our stock picking and positioning within that investment framework. For both funds, our ratio of big winners to big losers was skewed toward winners, driven by niche positioning in the technology and industrials sectors.
Rising Middle East tensions have pushed oil prices higher, and that’s not great news for earnings in cyclical parts of the market. But the secular growth companies we own are largely insulated from that—and when growth is harder to find, companies that still have it get rewarded. Our funds are heavily weighted toward these secular growers. Combine that with our exposure to an improving small-cap asset class, and I like where we sit.
Total Returns as of 3/31/25
| 1Q 2026 | 1 Year | 3 Year | 5 Year | 10 Year | Fund Inception | |
|---|---|---|---|---|---|---|
| CTSIX | 0.55% | 43.62% | 23.09% | 4.09% | 14.57% | 12.44% (3/23/11) |
| Russell 2000 Growth Index | -2.81% | 23.58% | 12.26% | 1.62% | 9.79% | 9.41% |
| Morningstar Small Growth Category | -2.07% | 18.45% | 9.83% | 1.24% | 10.52% | 9.95% |
| CTIGX | 0.46% | 39.13% | 23.21% | 5.54% | — | 11.91% (7/31/19) |
| Russell 2500 Growth Index | -3.52% | 19.31% | 10.60% | 1.75% | — | 7.85% |
| Morningstar Small Growth Category | -2.07% | 18.45% | 9.83% | 1.24% | — | 7.61% |
Performance data quoted represents past performance, which is no guarantee of future results. Average annual total return measures net investment income and capital gains or losses from portfolio investments as an annualized average. All performance shown assumes reinvestment of dividends and capital gains distributions. Returns of more than one year are annualized.
For CTSIX, the chart shows the performance of the Predecessor Fund’s Institutional Class, which has been adopted by the Class I shares of the Fund for periods prior to the Reorganization. The information shows you how the Predecessor Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The average annual total return table compares the Predecessor Fund’s Institutional Class performance, adopted by the Fund’s Class I shares, and Class Y performance, adopted by the Fund’s Class A shares and adjusted to reflect the maximum sales load of 4.75%, to that of the Russell 2000 Growth Index. "Since Inception" return shown for the Russell 2000 Growth Index is the return since the inception of the Predecessor Fund’s Class Y shares. An index reflects no deduction for fees, expenses or taxes. To the extent that dividends and distributions have been paid by the Predecessor Fund, the performance information for the Predecessor Fund in the chart and table assumes reinvestment of dividends and distributions. If the Predecessor Fund’s investment adviser had not waived or reimbursed certain Predecessor Fund expenses during these periods, the Predecessor Fund’s returns would have been lower. As always, please note that the Fund’s past performance (before and after taxes) cannot predict how it will perform in the future.
Class I shares are offered primarily for direct investment by investors through certain tax-exempt retirement plans and by institutional clients, provided such plans or clients have assets of at least $1 million. For eligibility requirements and other available share classes, see the prospectus and other Fund documents at www.calamos.com.
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.
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.
*Source for index returns: FTSE Russell and Morningstar. The Russell 2000 Index returned 0.89% year to date through March 31, 2026; the Russell 1000 Index returned -4.18%, for a difference of 507 basis points. For the period from July 1, 2025 through March 31, 2026, the Russell 1000 Index returned 5.97%; the Russell 2000 Index returned 15.88% (a difference of 991 basis points; and the Russell Microcap Index returned 26.20% (2023 basis points more than the Russell 1000 Index).
Morningstar Small Growth Category funds focus on faster-growing companies whose shares are at the lower end of the market-capitalization range. Stocks in the bottom 10% of the US equity market’s capitalization are defined as small caps. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). The Russell 1000® Index measures the performance of the large-cap segment of the US equity universe. The Russell 2000® Index measures the performance of the small-cap segment of the US equity universe. The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000® companies with higher price-to-value ratios and higher forecasted growth values. The Russell 2500® Growth Index measures the performance of the small to midcap growth segment of the US equity universe. It includes those Russell 2500 companies with higher growth earnings potential.
Unmanaged index returns, unlike fund returns, do not reflect fees, expenses or sales charges. Investors cannot invest directly in an index. The Russell Microcap® Index measures the performance of the microcap segment of the US equity market, and consists of the smallest 1,000 securities in the small-cap Russell 2000® Index, plus the next 1,000 smallest eligible securities by market cap.
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 Timpani Small Cap Growth Fund and Calamos Timpani SMID Growth Fund include equity securities risk consisting of market prices declining in general, growth stock risk consisting of the potential increased volatility due to securities trading at higher multiples, and portfolio selection risk. The Funds invest in small-capitalization companies, which are often more volatile and less liquid than investments in larger companies.
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.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
026022k 0426