February 5, 2019
We don’t know why the convertibles asset class is missing from most asset class quilts (also known as periodic tables)—but rest assured they’re included in the Calamos quilt. Use of the asset class was pioneered by Calamos Founder, Chairman and Global CIO John P. Calamos, Sr. more than 40 years ago.
We believe convertibles belong as a strategic allocation within investment portfolios. To clients invested through full and multiple market cycles, convertibles offer the potential to participate in longer-term equity market upside as well as the potential to be shielded from shorter-term downside equity volatility. (In volatile markets, the bond value provides a floor, and through coupon income, investors are “paid to wait” for the markets to turn—for more, see our explainer.)
Recent heightened interest in convertibles has been driven by rising interest rates, concern about valuations and increased volatility. See this post for how convertibles perform in multiple scenarios.
Fixed Income Asset Classes
To aid advisor understanding of convertibles relative to fixed income, we offer the Fixed Income Asset Classes quilt, which you can download as a PDF or view using our interactive chart. As shown in that graphic, convertible performance topped the chart five of the last 10 years, through December 31, 2018, and placed second two years.
In the Calamos Asset Class Quilt, we broaden the comparison and present the performance of convertibles over the last 10 years along with the performance of a mix of common equity and fixed income asset classes. You can download a PDF or use our interactive chart below.
To isolate the performance of one or more asset classes, click on the name of the asset class at the bottom of the table. Select Show All to return to the full chart or Hide All to start over.
.
Select an asset class to turn on or off.
Source: Bloomberg and Morningstar. Past performance is no guarantee of future returns.
The S&P 500 Index is generally considered representative of the U.S. stock market.
The ICE BofAML All U.S. Convertibles Index (VXA0) comprises approximately 700 issues of only convertible bonds and preferreds of all qualities.
The Russell 2000 Index is an index measuring the performance of approximately 2,000 small-cap companies in theRussell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks.
The MSCI World ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries—excluding the United States. DM countries include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. With 1,011 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
The MSCI Emerging Markets Index is free float-adjusted market capitalization index that represents large-and midcap companies in emerging market countries. It includes market indexes of Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.The MSCI Emerging Markets Index is free float-adjusted market capitalization index that represents large-and midcap companies in emerging market countries. It includes market indexes of Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.
The Bloomberg Barclays U.S. Government Index is an unmanaged index considered representative of fixed-income obligations issued by the U.S. Treasury, government agencies and quasi-federal corporations.
The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market of SEC-registered securities. The index includes bonds from the Treasury, Government-Related, Corporate, MBS (agency fixed rate and hybrid ARM pass-throughs), ABS, and CMBS sectors.
The Bloomberg Barclays U.S. Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market.
The Bloomberg Barclays Global Aggregate Bond Index is a flagship measure of global investment grade debt from 24 local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers.
The FTSE Nareit All Equity REITs Index is a free-float adjusted, market capitalization-weighted index of U.S.equity REITs. Constituents of the index include all tax-qualified REITs with more than 50% of total assets in qualifying real estate assets other than mortgages secured by real property.
The FTSE 3 Month U.S. T Bill + 4% Index is intended to track the daily performance of 3-month U.S.Treasury bills, plus an annual equivalent rate of 4.00%. The index is designed to operate as a benchmark for a series of funds.
Advisors, for more information about convertibles and our convertible-using funds, contact your Calamos Investment Consultant at 888-571-2567 or [emailprotected].
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.
Convertible Securities Risk: The value of a convertible security is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline. The credit standing of the issuer and other factors also, may have an effect on the convertible security’s investment value.
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.
801472 219
