CHI: Nearly 12% Yield, Convertibles Fund, Getting Close To A Buy Point

2025-04-06 09:05:00 ET

Summary

• Calamos Convertible Opportunities and Income Fund (CHI) is a dynamically managed high-yield, fixed-income fund that focuses on generating high current income. Its investment portfolio consists of convertible securities and fixed-income corporate bonds.
• CHI currently offers a very attractive 11.70% distribution yield and is currently trading at a small premium of roughly +4%.
• However, there are some risks involved depending on the direction of interest rates. The fund is getting close to being fairly priced, but it can still get cheaper from current levels.

Introduction:

Calamos Convertible Opportunities and Income Fund ( CHI ) is a closed-end fund that was established in Jun. 2002. The fund primarily invests in convertible securities and high-yield, short-duration corporate bonds. The fund is managed dynamically to adjust the asset allocation based on the market environment. A very small portion of the portfolio may also be invested in asset-backed securities and bank/senior loans. The fund also uses high leverage and aims to make judicious use of leverage to seek to enhance overall returns and income....

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