Investors looking to diversify their portfolio and achieve potential high yield may want to consider a closed-end fund ETF. This combines the advantages of closed-end funds (CEFs) with the tax efficiency of an ETF wrapper. Notably, Calamos Investments offers the Calamos CEF Income & Arbitrage ETF (CCEF), which aims to provide investors with capital appreciation and high monthly income by investing in a portfolio of discounted closed-end funds.
A Surplus of Benefits
There are a wide variety of investor strategies that can benefit from the addition of a fund like CCEF, which focuses the Calamos investing strategy on the merits of CEFs as a whole.
- Investors seeking to generate monthly income can utilize the high potential distribution rate of CEFs. These rates can often outperform more traditional asset classes, especially in cases where closed-end funds are trading at a discount.
- Because CCEF primarily invests in discounted, closed-end funds, the ETF aims to capture appreciable returns as the discount between price and NAV narrows.
- Investors seeking portfolio diversification can also potentially benefit from CCEF. The fund invests in a wide variety of closed-end funds. This includes options, equities, and fixed income, providing portfolio diversification while avoiding overconcentration.
Fund flows indicate that investors are increasingly opting into CCEF. As of June 5, 2024, the fund has seen nearly $2 million in net flows over the last month.
While part of this success can be attributed to CCEF’s positive performance, it is also indicative of the fund’s broad appeal. Whether an investor is seeking value with appreciation potential, diversification, monthly income, or experienced CEF investment managers, CCEF can offer a little something for everybody.
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Disclosure Information
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.
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. It 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.
Risks of investing in the Fund include risks associated with (1) the Fund’s investment in closed-end fund shares; (2) the closed-end funds’ investments; and (3) any other investments of the Fund, including investments in ETFs, BDCs, and derivative instruments. The shares of closed-end funds may trade at a discount or premium to, or at, their NAV. The securities of closed-end funds may be leveraged. As a result, the Fund, may be exposed indirectly to leverage through an investment in such securities. An investment in securities of closed-end funds that use leverage may expose the Fund to higher volatility in the market value of such securities and the possibility that the Fund’s long-term returns on such securities (and, indirectly, the long-term returns of its shares) will be diminished.
Additional Information
In addition, closed-end funds are allowed to invest in a greater amount of illiquid securities than open-end mutual funds. Investments in illiquid securities pose risks related to uncertainty in valuations, volatile market prices, and limitations on resale that may have an adverse effect on the ability of the fund to dispose of the securities promptly or at reasonable prices. The Fund may invest in BDCs, which typically operate to invest in, or lend capital to, early stage-to-mature private companies as well as small public companies.
The Fund’s investment in shares of ETFs subjects it to the risks of owning the securities underlying the ETF, as well as the same structural risks faced by an investor purchasing shares of the Fund, including authorized participant concentration risk, market maker risk, premium-discount risk and trading issues risk. Derivatives are instruments, such as futures and forward foreign currency contracts, whose value is derived from that of other assets, rates or indices. The use of derivatives for non-hedging purposes may be considered more speculative than other types of investments.
Calamos Financial Services LLC, Distributor
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
Calamos Financial Services LLC
2020 Calamos Court | Naperville, IL 60563
866.363.9219 | www.calamos.com | [email protected]
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