Global Investment Team: Chart of the Week

In 2025, emerging market equities outperformed US equities. We believe EMs are at the start of something big: the early stages of a multi-year re-rating that could support continued outperformance for several years.

China’s AI token usage is expected to soar over the next five years, and China is well-positioned to create and support its own AI buildout. Our team sees many investment opportunities for Chinese companies, including in the semiconductor and hardware ecosystem, automation, autos, and consumer tech platforms.

Reshoring may be a key focus of US policy and politics, but friendshoring continues to redefine trade relationships worldwide, bringing new economic opportunities to many countries.

The popularity of euro-denominated debt is surging, providing yet another proof point that a Great Global Rebalancing is underway—a shift that we believe will create a breadth of opportunity across global markets.

Global convertibles can be a powerful lever for managing risk and enhancing return. Calamos Global Opportunities Fund’s results demonstrate the potential benefits of using convertibles to support lower-volatility global equity market participation.

“Make in India” is one of the many tailwinds creating exciting investment opportunities in emerging markets. Many Indian companies offer attractive growth potential—from the manufacturing industry to beneficiaries of infrastructure buildout and a growing middle class.

Gold isn’t just a haven for individual investors; central banks—especially China’s—are also seeking out gold as they diversify away from the dollar. We believe that our selective allocation to gold mining companies is one of the many ways our strategies can capitalize on the broadening of global opportunities.

This week, we’re focusing on the principle of “bigger pond, more fish.” As opportunities increase across developed and developing markets, we believe geographic diversification can benefit long-term investors.

The robust growth potential in overseas markets makes the case for including international stock funds—like Calamos International Growth Fund (CIGIX)—in a core equity allocation.

With better earnings-per-share growth prospects than the S&P 500 and broad geographic diversification, Calamos Global Equity Fund’s (CIGEX’s) current portfolio makes a strong case for the fund’s use as core equity allocation.

US equities have posted strong returns year-to-date—but international equity markets have performed far better, thanks to macro tailwinds and company-specific fundamentals that we believe can continue. This week’s chart brings the potential opportunity of international equities into focus.

Positive return on GenAI investments will mark a significant milestone—one that we believe will drive additional AI capex, fuel continued disruption of the status quo, and create new investment opportunities across global markets.

“America First” policies aren’t holding back the Chinese equity market. Supported by stimulative policies and growth programs, China’s equity market has posted outsized gains versus major markets since early 2024, with attractive valuations adding to the appeal of many stocks.

Relative valuations continue to enhance the fundamental and thematic reasons for owning international small caps, an asset class which can provide powerful access to compelling regional- and country-specific growth opportunities.

Investors may think of US mega-caps as the core of AI opportunity, but AI’s unrelenting expansion is a catalyst for companies around the world. Global and international strategies provide a way to benefit from the many niches of opportunity in the AI ecosystem.

Global strategies can capitalize on country-specific growth trends—such as the potential we see in India’s telecom industry.

Many investors have become complacent about US overweights and mega-cap-centric portfolios, but market leadership changes. This week’s chart illustrates the potential perils of complacency by taking a look back at how dominant names of the past have fared more recently.

While investments in US manufacturing should help to rebalance the US economy over the medium term, developing the US manufacturing sector may require greater reliance on foreign inputs in the near term—supporting opportunities for companies around the world, including in China.

International markets’ strong 1H 2025 performance has demonstrated that America First policies have not been the impediment many feared. Indeed, while US stocks continued to provide compelling opportunities, investors increasingly recognized opportunities in international markets.

International small-cap stocks have punched above their weight this year, with outperformance boosted by fundamentals, valuations, and country- and region-specific growth themes.

Foreign currency exposure can deliver a potentially powerful boost to diversification and performance.

Historically, when US equities corrected, the trade-weighted dollar appreciated. That changed during the February 2025 correction. Decreased confidence in the dollar’s safe-haven status is a significant shift that highlights the evolving geopolitical landscape and supports our outlook for strengthening tailwinds for non-US investments.

Recent demand for foreign-domiciled ETFs aligns with broader trends that favor a more globally diversified set of opportunities.

The benefits of greater cloud use across Europe can provide tailwinds to a range of industries as companies and governments better utilize software services, make greater use of their own data, and incorporate AI.

If US imports decline due to tariffs and reshoring, we may see fewer dollars recycled back into the US via financial flows. This dynamic adds to our conviction that a “Great Global Rebalancing” is underway.

Eurozone banks are now seeing the benefits of their long period of deleveraging, and we believe many are well-positioned as European countries seek to bolster growth.

We believe we are in the very early stages of a new trend in US dollar performance, with wide-ranging impacts for global asset allocation.

This week’s chart highlights the changes in US/Europe GDP growth differentials, equity valuations, and historical flows.

The US dollar is no longer acting as the safe-haven asset it historically has been during periods of market stress. We believe a combination of fundamentals and an evolving global trade and geopolitical landscape as the primary culprits.

This week’s chart highlights the significant geographic imbalances in investors’ asset allocations.