Convertible Bonds Today
Convertible securities are an opportunity for investors who want to participate in equities but are willing to exchange the maximum possible upside for protection against the downside of equities. The asset class was pioneered by Calamos Founder, Chairman and Global CIO John P. Calamos, Sr., more than 40 years ago.
At right, subscribe to our monthly newsletters, tracking both the US and global convertible securities markets, including performance, issuance and credit quality.
Why Convertibles?
Actively managed convertible securities can be deployed strategically and tactically in an asset allocation, as Calamos Founder, Chairman and Global CIO John Calamos, Sr. and Eli Pars, Co-CIO, Head of Alternative Strategies and Co-Head of Convertible Strategies, and Senior Co-Portfolio Manager discuss in this video.
Opportunities in Global Convertibles: Strategies for Navigating Market Uncertainty
What do convertibles contribute to an overall portfolio?
Why is active management critical when investing in convertible securities?
Convertible Securities: Market Review and Outlook, July 2022
Over recent months economic and market conditions have created an unusual backdrop for all risk assets, convertibles included. To help address investors’ questions about why the convertible market has behaved the way it has this year, we share our midyear assessment.
The Case for Strategic Convertible Allocations
The Case for Strategic Convertible Allocations, written by John P. Calamos, Sr., Founder, Chairman and Global CIO, and Eli Pars, CFA Co-CIO and Senior Co-Portfolio Manager, argues that the structural characteristics of convertibles can serve investors well, given Calamos’ expectations for advancing but volatile equity markets and economic recovery.
Maximizing the Opportunity in Convertible Securities
This guide provides a brief overview of Calamos’ history in the asset class, how convertibles can be used in strategic asset allocation, and the attractive conditions we see in the market today. Included is an overview of the Calamos funds that use convertible securities in varied ways to achieve compelling short and long-term performance.
All About Convertible Securities
Our Convertible Securities: Structures, Valuation, Market Environment and Asset Allocation guide is a resource on how convertible bonds work. It’s written by Calamos Founder, Chairman and Global Chief Investment Officer John P. Calamos, Sr.
Convertibles Bonds Have Been Consistent Top Performers
The top-performing fixed income asset class? While fixed income asset classes may trade places year after year, there has been no asset class that can rival convertible bonds in terms of historical performance consistency.
While struggling in the first half of 2022, convertible bonds have been the top performing asset class for five of the last 10 years.
Source: Bloomberg and Morningstar. Past performance is no guarantee of future returns.
- Convertible bonds are represented by the ICE BofA All US Convertibles Index (VXA0), a gauge of the performance of the US convertible market.
- US aggregate bonds are represented by the Bloomberg US Aggregate Bond Index, covers the US-denominated, investment grade, fixed rate, taxable bond market of SEC-registered securities.
- High yield bonds are represented by the Credit Suisse US High Yield Index, an unmanaged index of high yield debt securities.
- US government bonds are represented by the Bloomberg US Government Index, an unmanaged index considered representative of fixed income obligations issued by the US Treasury, government agencies and quasi-federal corporations.
- Treasury bills are represented by the Bloomberg US Treasury Bill 1-3 Month Index, is a component of the Short Treasury Index and includes aged US Treasury bills, notes and bonds with a remaining maturity from 1 up to (but not including) 12 months.
- US investment grade bonds are represented by the Bloomberg US Corporate Investment Grade Index, consists of publicly issued, fixed rate, nonconvertible, investment grade debt securities.
- Global asset-backed securities are represented by the Bloomberg Global Asset Backed Index, a fixed income index that focuses on asset-backed securities and includes pass-through, controlled-amortization and bullet-structured securities, which have a minimum average life of one year.
- Government bonds ex. US are represented by the ICE BofA Global Government Bond Index, excluding US, tracks the performance of investment grade sovereign debt publicly issued and denominated in the issuer's own domestic market and currency.
The Latest on Convertibles
Investment Ideas Blog: Converts
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Here’s why we call Calamos Market Neutral Income Fund (CMNIX) both consistent and resilient.
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Convertible securities continue to be an attractive means of taking a more measured approach to the equity market.
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Double-digit returns have followed previous drawdowns.
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The structural benefits of convertible securities helped convertible funds outperform both the S&P 500 and the Bloomberg US Aggregate Bond Index in the high inflationary period between 1979 and 1981.
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Video Q&A with Co-CIO, Head of Alternative Strategies, Co-Head of Convertible Strategies and Senior Co-Portfolio Manager Eli Pars touches on convertibles' rising rate period performance, diversifying fixed income and equity holdings with converts, the global convertible market and active management when investing in converts.
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Two Calamos funds place on Barron’s list of funds “that pay over 8% now and have returned at least that much over the past five years.”
Investment Team Voices Blog: Converts
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Despite market volatility and many macro-level uncertainties, our teams continue to identify opportunities across asset classes. With an introduction from Founder and Global Chief Investment Officer John P. Calamos, Sr.
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Drawing on more than 50 years of experience, Calamos Founder and Global CIO John P. Calamos, Sr. shares his time-tested perspective on investing through uncertainty and discusses how to navigate the challenges of the current environment.
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At Calamos, we believe there is opportunity in every market—including the most volatile ones. Senior members of our investment organization discuss how they are managing risk and positioning the Calamos funds. With an introduction from Founder and Global Chief Investment Officer John P. Calamos, Sr.
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During the first quarter, surging volatility and vicious rotations battered the markets. These next months will test the resolve of investors, but our teams continue to see long-term opportunities for active, risk-aware approaches. With an introduction from John P. Calamos, Sr., Founder, Chairman and Global Chief Investment Officer.
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Senior co-portfolio managers Eli Pars and Joe Wysocki discuss the diverse opportunities in the global convertible market. They explain how convertible securities can provide tailwinds to help investors counter the headwinds of rising rates and equity market volatility.
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Stickier inflation, a new wave of Covid cases, and Fed tightening on the horizon give investors much to contemplate as 2022 begins. Senior members of our investment organization share their outlooks and discuss where they are finding opportunity. With an introduction from John P. Calamos, Sr., Founder, Chairman and Global Chief Investment Officer.
@Calamos on #Converts
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Given a global macro outlook that continues to get murkier, the $CXGCX team is identifying the most #convertiblesecurities opportunities in US and Asia. bit.ly/3VggqFs
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To be in a position to benefit from #equities’ reset, $CICVX team maintains emphasis on balanced #convertiblesecurities, while selectively investing in busted issues. bit.ly/3RBL6Oo
Whitepapers
- Convertible Securities Offer Many Benefits, Including as a Hedge Against Inflation
- John P. Calamos, Sr. October 22, 2018 Q&A with Wall Street Transcript
- Convertible Securities: Potential Advantages in Rising Interest Rate Environments
- The Opportunity of Convertible Securities
- The Case for Strategic Convertible Allocations
Accessing the Asset Class
- Calamos Convertible Fund (CICVX)
- Calamos Growth and Income Fund (CGIIX)
- For global exposure: Calamos Global Convertible Fund (CXGCX), the only U.S. based global convertible fund
- Calamos Global Growth and Income Fund (CGCIX)
- In an emerging markets fund: Calamos Evolving World Growth Fund (CNWIX)
- Via a liquid alt: Calamos Market Neutral Income Fund (CMNIX)
FINANCIAL ADVISORS, CONTACT US
Call 888-571-2567 or email caminfo@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 1-800-582-6959. Read it carefully before investing.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. Opinions are subject to change due to changes in the market, economic conditions or changes in the legal and/or regulatory environment and may not necessarily come to pass. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. 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 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.
The principal risks of investing in the Calamos Growth and Income 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, equity securities risk, growth stock risk, small and midsized company risk, interest rate risk, credit risk, liquidity risk, high yield risk, forward foreign currency contract risk and portfolio selection risk.
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, mid-size company risk, small company risk, portfolio turnover risk and portfolio selection risk.
The principal risks of investing in the Calamos Global Opportunities 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, emerging markets risk, equity securities risk, growth stock risk, interest rate risk, credit risk, high yield risk, forward foreign currency contract risk, portfolio selection risk, and liquidity risk.
The principal risks of investing in Calamos Evolving World Growth 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, 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, and portfolio selection risk.
The principal risks of investing in the Calamos Market Neutral Income Fund include: equity securities risk consisting of market prices declining in general, 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, convertible hedging risk, covered call writing risk, options risk, short sale risk, interest rate risk, credit risk, high yield risk, liquidity risk, portfolio selection risk, and portfolio turnover 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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