Although anxiety about the Fed and trade policy have abated, investors should be prepared for elevated volatility, rotation and sideways markets. Still, there are opportunities for active managers in equities, convertibles and fixed income, supported by accommodative monetary policy, stimulative fiscal policy and a resilient U.S. consumer.
The global economy is positioned for continued expansion, buoyed by accommodative monetary policy, low inflation and resilient U.S. consumption. However, a global industrial recession and trade disputes will temper the pace of growth and make market conditions feel fragile. Elevated volatility supports the case for selective, risk-managed approaches to investing.
Looking to the remainder of the year, we believe U.S. GDP growth will remain healthy and stable. Global growth is more concerning, but benign inflation, accommodative monetary policy and a weaker dollar support the case for subdued expansion. Markets can grind higher, but volatility will remain elevated. This creates a favorable backdrop for defensive equity market participation, growth company outperformance, economically sensitive high-yield debt, and liquid alternatives.
Although we see tailwinds for economic growth and opportunities across asset classes—including in growth equities, convertibles and high yield bonds—conditions require a highly selective approach. Volatility and sideways moving markets will characterize this phase of the economic cycle, due to a wide range of entrenched global uncertainties. Given the crosscurrents in the economy and markets, risk-managed alternative strategies can provide timely enhancements for both the equity and fixed income sides of an asset allocation.
The Calamos Investment Committee shares its perspective on the global economy and markets. Although there will be softening in U.S. economic data, the U.S. is positioned for continued slow expansion. The global economy will grow tepidly, with increased potential for acceleration in the second half of the year. Volatility will remain elevated, due to softening global economic data, and elevated political, geopolitical and monetary policy uncertainties.
Economic fundamentals are encouraging but market volatility is likely to intensify. The U.S. economy looks set to continue on its growth trajectory for the next year, if not longer, and we expect growth outside the U.S. to accelerate. Even so, rising interest rates in the U.S., midterms and geopolitical pressures will contribute to elevated levels of market turbulence. The Calamos Investment Committee discusses how our teams are navigating the crosscurrents.
Fears of an imminent U.S. recession are premature; tax policy and a more business-friendly regulatory environment provide long-term catalysts for the economy. Although conditions outside the U.S. are less encouraging, positive global growth should continue, albeit with growing divergence among countries. The need for active risk management has increased at this point of the economic cycle, and we believe the Calamos portfolios are well positioned.
Volatility has returned to the markets in dramatic fashion. The shifting terrain may be jarring for some, but the conditions we are seeing today are more normal than recent years, when investors grew accustomed to record low interest rates, a near-absence of inflation and the subdued volatility. As a more typical environment emerges, our teams are identifying opportunities across asset classes.
January 28, 2020
For nearly 50 years, John P. Calamos, Sr. has helped investors manage the risks that difficult markets and challenging economic environments present. In this paper, he discusses how actively managed convertible securities can provide an array of benefits for the long-term investor. In addition to providing lower-volatility stock market participation, convertibles can be used as a hedge against rising inflation and long-term interest rates.
January 27, 2020
We believe the U.S. small cap equity asset class provides an attractive opportunity for institutional asset owners. Our Calamos Timpani Small Cap Growth Team has managed small cap growth equities through multiple market cycles. In this paper, we discuss how the team is well positioned to capitalize on this current opportunity.
December 20, 2019
The New Year brings continued investment opportunities but also the prospect of market volatility, explains John P. Calamos, Sr. In an environment where risk management matters, the time-tested approach of Calamos Growth and Income Fund may be especially compelling for the core of an asset allocation.
September 10, 2019
John P. Calamos, Sr. and Eli Pars discuss the role of convertible securities within portfolios, the value of active management, and encouraging global trends within the convertible market.
August 14, 2019
In “Strategies for Market Volatility and Rising Uncertainty,” John P. Calamos, Sr. discusses the opportunities and risks in the current environment and their implications for asset allocation.
June 19, 2019
Small company stocks have the potential for outsized growth, but fundamental research is key to identifying opportunities. Senior Portfolio Manager Brandon Nelson shares his perspective on small caps and what differentiates the Calamos approach.
December 21, 2018
In this edition of our investor newsletter, John P. Calamos, Sr. discusses asset allocation strategies for the New Year. He explains why investors may wish to enhance their exposure to defensive equity strategies and the different approaches Calamos offers, including alternative and convertible funds.
February 22, 2018
As volatility has picked up, investors have gained a renewed appreciation for funds that have been able to steer clear of the worst of the downside while still participating in upside. In this Q&A, John P. Calamos, Sr. and Eli Pars discuss how Calamos Hedged Equity Fund has risen to the challenge of volatile markets.
September 27, 2016
Michael Grant, Sr. Co-Portfolio Manager of Calamos Phineus Long/Short Fund, shares his team’s views on why they see more optimistic storylines on the horizon and how macro considerations are influencing the fund’s positioning.
February 13, 2015
This brochure provides an introduction to Alternative Investments, and explores that many types of alternative funds. Learn how an alternative allocation may potentially enhance a portfolio’s diversification and decrease exposure to market volatility.