CHY - CHY: A Convertible Fund With Strong Track Record Double-Digit Premium

2024-03-06 06:35:45 ET

Summary

• Calamos Convertible & High Income Fund has consistently outperformed its benchmark and peer group, reflected in its double-digit premium to NAV.
• The fund's heavy exposure to convertibles and growth sectors is expected to continue benefiting total returns, but caution is advised due to rich stock market valuations.
• CHY remains attractive for income-oriented investors with a distribution rate of 10% and potential for convertible securities' appreciation.

There is no question that the Calamos Convertible & High Income Fund ( CHY ) has proved very successful over the years, as evidenced by the fund's performance versus the benchmark and the peer group. Such consistent results are reflected in a double-digit premium to NAV, as opposed to other convertible funds not managed by Calamos investments that generally trade at a discount.

While the fund's heavy exposure to convertibles and particularly to growth sectors is expected to remain beneficial to total returns going forward, current stock market valuation is arguably rich after the rally seen in the previous months. This suggests a cautious, long-term approach might be prudent for the time being....

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