Investment Team Voices Home Page
The Leadership Change Has Arrived
April 1, 2026
Jim Madden, CFA, Tony Tursich, CFA, and Beth Williamson
Summary Points:
- Quality and diversification have started to outperform. If broadening and volatility continue, that advantage should grow.
- We have never lost sight that markets have historically reverted to the mean, and shifts can happen quickly.
- Calamos Antetokounmpo Sustainable Equities Fund (SROIX) has been positioned for the turn, and we believe our well-diversified portfolio of quality core growth names will enjoy strong tailwinds in a more risk-aware environment.
- We’ve found opportunities to add to positions in the data center value chain (industrials and tech), as well as some software stocks that we believe have been oversold relative to the long-term potential we see.
After years of Magnificent 7 dominance, we believe markets are at the beginning of a real leadership rotation. Portfolios with diversification and quality are starting to outperform markets that were dominated by narrow mega-cap concentration. Within the S&P 500, energy and materials are up by double digits year-to-date, followed by utilities and industrials.
Meanwhile, tech stocks are flat, and the business models, performance, and valuations of the Mag 7 are all under pressure. The biggest shift is in the business models themselves. Many of the Mag 7 companies built their premiums on being asset-light, with minimal capital requirements, software-driven margins, and strong free cash flow. But the push into AI has changed the math, and the Mag 7 are now committing well over $600 billion in annual capex. Companies that used to be capital-light compounders are becoming infrastructure businesses, and their valuations are increasingly reflecting that.
The P/E premium between tech and energy was once tremendously wide. It was not too long ago that a Mag 7 tech stock could command a premium of 200-300% over leading oil producers; by early 2026, the gap had collapsed. This is not because energy companies have gotten more attractive; our concerns about their long-term secular risks are entirely intact. Instead, market participants are recognizing that tech companies are becoming more capital-intensive, while the path to AI monetization remains uncertain. The old paradigm of a capital-light tech company and a capital-intensive energy company has been upended.
Early in 2025, we wrote, “Mean reversion and market corrections are common. The global economy faces changes in inflation, interest rates, globalization, corporate profits, demographics, and government finances, with uncertainties in trade and geopolitics. Markets will react accordingly.”
This reversion seems to be well underway in terms of broad market performance. Since 1990, about 48% of S&P 500 stocks beat the index in a typical year. By 2023, that figure collapsed into the high 20% range as Mag 7 dominance carried the index while the average stock lagged badly. By January 2026, that had reversed sharply: nearly 60% of constituents were outperforming, and this has held through quarter-end. During our 25+ years of investing, that kind of broadening doesn’t happen for just one month; historically, it’s marked the beginning of a multiyear regime.
Market Leadership Has Broadened Significantly
Percentage of S&P 500 constituents that outperformed the index, 1990 to January 2026
Past performance is no guarantee of future results. Source: Richard Bernstein Advisors, BofA ML, US Strategy. The chart shows price returns.
We have been positioned for this environment. SROIX holdings emphasize earnings quality, balance sheet strength, and reasonable valuation across diversified sectors and geographies. With volatility elevated and the market starting to differentiate between businesses, we believe this is where diversification and active management prove their value.
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.
Source for sector returns and index returns through March 31, 2026: Bloomberg.
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.
Indexes are unmanaged, do not include fees or expenses, and are not available for direct investment. The S&P 500 Index is a measure of large-cap US equity performance. The S&P 500 Quality Index is designed to track high-quality stocks in the S&P 500 by quality score, which is calculated based on return on equity, accruals ratio and financial leverage ratio. The Russell 2000 Index is a measure of small-cap US equity performance.
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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 Antetokounmpo Sustainable Equities 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, large-capitalization stocks as a group could fall out of favor with the market, small and mid-sized company risk, sector risk, portfolio turnover risk, and portfolio selection risk.
The Fund's ESG policy could cause it to perform differently compared to similar funds that do not have such a policy. The application of the social and environmental standards of Calamos Advisors may affect the Fund's exposure to certain issuers, industries, sectors, and factors that may impact the relative financial performance of the Fund—positively or negatively—depending on whether such investments are in or out of favor.
Calamos Antetokounmpo Asset Management LLC (“CGAM”), an investment adviser registered with the SEC under the Investment Advisers Act of 1940, serves as the Fund’s adviser (“Adviser”). CGAM is jointly owned by Calamos Advisors LLC and Original C Fund, LLC, an entity whose voting rights are wholly owned by Original PE, LLC which, in turn, is wholly owned by Giannis Sina Ugo Antetokounmpo. Giannis Sina Ugo Antetokounmpo is the majority shareholder of Original C, with a 68% ownership interest.
Mr. Antetokounmpo serves on the Adviser’s Board of Directors and has indirect control of half of the Adviser’s Board.
Mr. Antetokounmpo is not a portfolio manager of the Fund and will not be involved in the day-to-day management of the Fund’s investments, and neither Original C nor Mr. Antetokounmpo shall provide any “investment advice” to the Fund. Mr. Antetokounmpo provided input in selecting the initial strategy for the Fund.
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If Mr. Antetokounmpo is no longer involved with the Fund or the Adviser then “Antetokounmpo” will be removed from the name of the Fund and the Adviser. Further, shareholders would be notified of any change in the name of the Fund or its strategy.
The Adviser is jointly owned and controlled by Calamos Advisors LLC and, indirectly, by Mr. Antetokounmpo, a well-known professional athlete. Unanticipated events, including, without limitation, death, adverse reputational events or business disputes, could result in Mr. Antetokounmpo no longer being associated or involved with the Adviser. Any such event could adversely impact the Fund and result in shareholders experiencing substantial losses.
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