Calamos Convertible and High Income Fund (CHY)
NASDAQ (NGS) NASDAQ (NGS) Primary Summary
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CHY: Not The Ideal Time For This Convertible Fund
CHY offers an attractive 11% yield and monthly distributions, but recent performance has suffered due to high interest rates and inconsistent earnings. The fund's heavy use of leverage and significant exposure to below-investment-grade and unrated debt heighten risk, especially if rates remain elevated. CHY trades at a small premium to NAV, but its price has declined and capital appreciation potential is limited; total returns rely mainly on distributions.
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Calamos Convertible and High Income Fund Profile
| NASDAQ (NGS) Exchange | US Country |
Overview
The Calamos Convertible and High Income Fund is a multifaceted financial instrument created to offer investors a hybrid of current income and capital appreciation. This closed-end fund strategically deploys its investments across convertible securities and high-yield bonds, aiming to leverage the composite benefits of fixed income and potential equity growth. Convertible securities endow the fund with a peculiar flexibility, permitting conversion into a pre-agreed number of common shares, thereby tapping into the equity markets' upside while maintaining a foothold in the relative safety and steady income stream of bonds. Additionally, the inclusion of high-yield bonds, despite their increased risk level, serves to elevate the income generated, setting this fund apart as a distinctive choice for investors inclined towards diversified income avenues alongside capital growth opportunities.
Products and Services
- Convertible Securities:
- High-Yield Bonds:
Convertible securities are a cornerstone of the Calamos Convertible and High Income Fund's investment strategy. By offering the potential for conversion into equity, these instruments provide a pathway to participate in stock market gains without relinquishing the inherent benefits of bonds. This dual nature enhances the fund's adaptability, allowing it to pivot between the security of fixed-income investments and the growth potential of equities based on market conditions.
Another critical component of the fund's portfolio is its commitment to high-yield bonds. These instruments, often characterized as "junk bonds," are selected to augment the fund’s income potential due to their higher interest payments relative to investment-grade bonds. While they introduce a greater level of risk, the inclusion of high-yield bonds is justified by the potential for increased returns, making the fund an attractive option for investors seeking higher income streams in conjunction with capital appreciation prospects.
