Investment Team Voices Home Page
Up to the Task of a Twisting and Turning Market
July 1, 2025
Eli Pars, CFA
Key Points:
- Calamos Global Convertible Fund posted a healthy gain of 9.12% during the first half of 2025, modestly lagging the global convertible market. The fund captured more than 93% of the global equity market's upside, as measured by the MSCI World Index.
- Global convertible issuance has maintained a brisk pace in 2025, and we are optimistic the trend will continue.
- There’s still a lot of uncertainty in the market, but we believe a market with twists and turns plays to our strengths and the potential opportunity of Calamos Global Convertible Fund.
Review
There’s certainly been no shortage of volatility in the markets this year—to both the upside and the downside. And the second quarter seemed to last a lot longer than three months! The quarter kicked off with President Trump’s “Liberation Day” announcement on April 2, catching investors off guard and sending markets into a tailspin. However, as investors digested details of the US government’s tariff proposals and the Trump administration refined what it was seeking, markets climbed back up. Even the outbreak of war between Iran and Israel couldn’t slow the global equity market down for long, and the MSCI World Index gained 9.75% for the year-to-date.
The global convertible market has more than kept pace with the global equity market so far this year, with the FTSE Global Convertible Index rising 11.17% through June. This year-to-date strength builds on the year’s first quarter, when convertible securities also outperformed equities, and global markets outperformed the US across both asset classes.
Convertibles don’t usually capture 115% of an equity move of this magnitude (up ~10%), as they have so far this year. This capture seems driven in part by a reversal of the Magnificent 7-type outperformance of mega-cap equities in recent years. (Broad equity benchmarks include greater representation to mega-caps than the convertible market; our whitepaper, “The Case for Strategic Convertible Allocations,” explores the market-cap differences between equities and convertibles—and the impact on performance—at greater length.)
After outperforming the FTSE Global Convertible Index in the first quarter, the fund trailed in the second quarter, even though it posted a robust gain in absolute terms. An underweight to Europe and an overweight to Chinese consumer names—both of which have helped in the past—hindered relative performance during the second quarter. As active managers, we continually assess our holdings and believe our positioning still makes sense as we look forward.
Issuance
Global convertible issuance surged in June with $26.1 billion in new convertibles coming to market, bringing quarterly issuance to $47.1 billion and year-to-date issuance to nearly $70.5 billion. We continue to forecast a strong new issue calendar for the remainder of the year.
As we have noted in past commentary, the pace of issuance could be more measured if equity markets stay volatile, but we believe the interest-rate environment continues to incentivize issuers to choose convertibles over nonconvertible debt to manage borrowing costs. Over recent quarters, the participation of investment-grade companies and greater regional diversification have energized the convertible market, and we would welcome a continuation of these trends.
Year-to-Date Global Convertible Issuance ($ bil)
Source: ICE BofA Global Research. Data through June 30, 2025.
Positioning
Calamos Global Convertible Fund favors companies that offer a healthy measure of downside risk mitigation and upside equity exposure. We have maintained a significant overweight to consumer discretionary companies, as well as an aforementioned overweight to Chinese issues. These overweights are driven by convertible structures and equity valuations—in other words, by bottom-up security selection not macro calls. On average, the fund’s portfolio has a slightly higher delta, but what we believe is a better risk-reward profile.
Conclusion
While the S&P 500 flirts with new highs, multiple potential sources of volatility could materialize in the coming months. Whether it is tariff deadlines, war in the Middle East, or the sale or ban of TikTok, plenty of things may stir the pot.
We’re ready for more twists and turns, but this is an environment that we believe plays to our experience and strengths. We’ve invested through many periods of turmoil and believe there is always opportunity.
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.
Total Returns as of 06/30/25
| 2Q 2025 | 1 Year | 3 Year | 5 Year | 10 Year | Fund Inception | |
|---|---|---|---|---|---|---|
| CXGCX | 7.19% | 16.76% | 11.29% | 6.10% | 6.65% | 6.55% (12/31/14) |
| FTSE Global Convertible Index | 10.12% | 20.16% | 11.90% | 7.56% | 6.59% | 6.53% |
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.
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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