Income-seeking investors may often turn to closed-end funds (CEFs) as a diversified means to secure potential yield.
Because closed-end funds only issue a fixed number of shares, investors can use them to access income from less-liquid market sectors. However, a more targeted CEF strategy may help investors lock in more efficient income.
A Portfolio of Diversified, Discounted CEFs Strives for More Appreciation and Income
The Calamos CEF Income & Arbitrage ETF (CCEF) stands out among CEF investment options because its income-seeking strategy aims to help investors access strong monthly income and capital appreciation.
To do so, the fund invests in closed-end funds trading at notable discounts. In targeting discounted funds, CCEF can access a greater bandwidth of potential capital appreciation than a standard CEF investment strategy.
CCEF utilizes quantitative and qualitative research to provide investors with quality investments. The fund utilizes quantitative and fundamental returns to locate discounted CEFs that meet the fund’s objectives. CCEF’s fund managers then evaluate the discounted CEFs using a qualitative lens to understand why the assets are being undervalued and whether they have a strong probability of appreciating.
While discounted CEFs help investors capture capital appreciation opportunities, the other goal of CCEF is to provide investors with monthly income, given its our view that well-managed discounted CEFs pay out attractive distributions. As of May 31, 2024, CCEF has a 30-day SEC yield of 7.43%. Of course past performance does not guarantee future results.
The Benefits of Active Management
Calamos’ active fund management may help CCEF outperform other closed-end fund strategies. With its actively managed strategy, CCEF can more nimbly reposition investments to secure stronger yield and capital appreciation. Additionally, active management can be a boon during a market downturn, as thoughtful adaptability can help mitigate downside risk.
CCEF’s active management is bolstered by Calamos’ experience in the closed-end fund market. The Calamos team comprises trusted experts with over two decades of CEF investment experience.
Calamos currently has six ETFs listed in the United States as of the date of publication. These funds account for over $190 million in assets under management.
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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 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.
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. In addition, closed-end funds are allowed to invest in a greater amount of illiquid securities than open-end mutual funds.
Additional Information
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.
30-day SEC yield reflects the dividends and interest earned by the Fund during the 30-day period ended as of the date stated above after deducting the Fund’s expenses for that same period.
Calamos Financial Services LLC, Distributor
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
Calamos Financial Services LLC
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866.363.9219 | www.calamos.com | [email protected]
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