CSQ - CSQ: Increasing Exposure To Magnificent 7 Bad For Diversification

2024-05-03 06:10:54 ET

Summary

• Calamos Strategic Total Return Fund offers a 7.92% yield, providing income-focused investors with a high level of income and equity exposure.
• The fund has outperformed convertible securities and investment-grade bonds but underperformed large-cap stocks over the past few months.
• CSQ's leverage ratio is 30.56%, which is higher than many of its peers, but it also delivered better trailing five-year performance.
• The fund failed to cover the distribution during its two most recent fiscal years. However, it appears to have fixed this during the first half of the 2024 fiscal year.
• Calamos is trading at a small discount to net asset value.

The Calamos Strategic Total Return Fund ( CSQ ) is a closed-end fund that income-focused investors can employ as a means for accomplishing their goals of providing themselves with a high level of income from the assets that they already own. This is something that could prove to be very attractive in today's inflationary environment, as the rapidly rising cost of living has led all of us to search for additional sources of income to maintain the lifestyles to which we are accustomed. The fund manages to do reasonably well at this task, as it currently boasts a 7.92% yield. Here is how that compares to some of the fund's peers:

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