Calamos Dynamic Convertible and Income Fund (NASDAQ: CCD), Calamos Convertible Opportunities and Income Fund (NASDAQ: CHI), Calamos Convertible and High Income Fund (NASDAQ: CHY) to Adopt Level Distribution Policy
Calamos Dynamic Convertible and Income Fund (CCD) and two other Calamos funds will transition from managed to level distribution plans starting January 1, 2025. Under the new policy, CCD will maintain monthly distributions at 19.5 cents per share, while CHI and CHY will distribute 9.5 and 10 cents per share respectively.
The level distribution policy aims to provide stable, consistent, and predictable distribution rates. However, success depends on market conditions, interest rates, and overall market performance. Distributions may include return of capital if insufficient investment income is available, which could increase the funds' expense ratios. The funds may sell portfolio securities to meet distribution requirements, potentially at less opportune times.
Il Calamos Dynamic Convertible and Income Fund (CCD) e altri due fondi Calamos passeranno da una gestione attiva a piani di distribuzione pianificata a partire dal 1 gennaio 2025. Secondo la nuova politica, il CCD manterrà distribuzioni mensili di 19,5 centesimi per azione, mentre CHI e CHY distribuiranno rispettivamente 9,5 e 10 centesimi per azione.
La politica di distribuzione pianificata mira a fornire tassi di distribuzione stabili, coerenti e prevedibili. Tuttavia, il successo dipende dalle condizioni di mercato, dai tassi di interesse e dalle prestazioni complessive del mercato. Le distribuzioni potrebbero includere un ritorno di capitale se non c'è sufficiente reddito da investimenti, il che potrebbe aumentare i rapporti di spese dei fondi. I fondi potrebbero dover vendere titoli del portafoglio per soddisfare i requisiti di distribuzione, possibilmente in momenti meno favorevoli.
El Calamos Dynamic Convertible and Income Fund (CCD) y otros dos fondos de Calamos pasarán de estar gestionados a planes de distribución nivelada a partir del 1 de enero de 2025. Según la nueva política, el CCD mantendrá distribuciones mensuales de 19,5 centavos por acción, mientras que CHI y CHY distribuirán 9,5 y 10 centavos por acción, respectivamente.
La política de distribución nivelada tiene como objetivo proporcionar tasas de distribución estables, coherentes y predecibles. Sin embargo, el éxito depende de las condiciones del mercado, las tasas de interés y el rendimiento general del mercado. Las distribuciones pueden incluir el retorno de capital si no hay ingresos de inversión suficientes disponibles, lo que podría aumentar los ratios de gastos de los fondos. Los fondos podrían vender valores de la cartera para cumplir con los requisitos de distribución, potencialmente en momentos menos oportunos.
칼라모스 다이나믹 전환 및 소득 펀드 (CCD)와 다른 두 개의 칼라모스 펀드는 2025년 1월 1일부터 관리형에서 수준 분배 계획으로 전환됩니다. 새로운 정책에 따라 CCD는 주당 19.5 센트의 월 배당금을 유지하며, CHI와 CHY는 각각 주당 9.5 센트와 10 센트를 분배합니다.
수준 분배 정책은 안정적이고 일관되며 예측 가능한 분배 비율을 제공하는 것을 목표로 합니다. 그러나 성공은 시장 조건, 이자율 및 전반적인 시장 실적에 따라 달라집니다. 배당금에는 투자 수익이 부족한 경우 자본 회수가 포함될 수 있으며, 이는 펀드의 비용 비율을 증가시킬 수 있습니다. 펀드는 분배 요구 사항을 충족하기 위해 포트폴리오 증권을 판매해야 할 수도 있으며, 이는 덜 유리한 시점일 수 있습니다.
Le Calamos Dynamic Convertible and Income Fund (CCD) et deux autres fonds Calamos passeront de la gestion active à des plans de distribution à taux constant à partir du 1er janvier 2025. Selon la nouvelle politique, le CCD maintiendra des distributions mensuelles de 19,5 cents par action, tandis que CHI et CHY distribueront respectivement 9,5 et 10 cents par action.
La politique de distribution à taux constant vise à fournir des taux de distribution stables, cohérents et prévisibles. Cependant, le succès dépend des conditions du marché, des taux d'intérêt et de la performance globale du marché. Les distributions peuvent inclure un retour de capital si les revenus d'investissement sont insuffisants, ce qui pourrait augmenter les ratios de dépenses des fonds. Les fonds peuvent être amenés à vendre des valeurs mobilières du portefeuille pour répondre aux exigences de distribution, potentiellement à des moments moins opportunistes.
Der Calamos Dynamic Convertible and Income Fund (CCD) und zweiWeitere Calamos-Fonds werden ab dem 1. Januar 2025 von der aktiven Verwaltung zu statischen Verteilungsplänen übergehen. Nach der neuen Richtlinie wird CCD monatliche Auszahlungen von 19,5 Cent pro Aktie beibehalten, während CHI und CHY jeweils 9,5 und 10 Cent pro Aktie ausschütten.
Die statische Verteilungspolitik zielt darauf ab, stabile, konsistente und vorhersehbare Verteilungssätze zu bieten. Der Erfolg hängt jedoch von den Marktbedingungen, den Zinssätzen und der allgemeinen Marktperformance ab. Die Ausschüttungen können eine Kapitalrückzahlung enthalten, wenn nicht genügend Investitionseinkommen zur Verfügung steht, was die Kostenquoten der Fonds erhöhen könnte. Die Fonds könnten Portfolio-Wertpapiere verkaufen müssen, um den Verteilungsanforderungen gerecht zu werden, möglicherweise zu weniger günstigen Zeitpunkten.
- Fixed monthly distribution rates provide predictable income for shareholders
- Commitment to maintain current distribution levels (19.5, 9.5, and 10 cents per share)
- Distributions may include return of capital, potentially decreasing fund assets
- May need to sell portfolio securities at unfavorable times to meet distribution requirements
- Policy could lead to increased expense ratios
Insights
The transition from a managed distribution plan to a level distribution policy represents a significant shift in distribution strategy for these Calamos funds. The fixed monthly distribution rates (
The new policy may require more active portfolio rebalancing to maintain these fixed payment levels, potentially impacting total returns. There's also increased risk of return of capital distributions if investment income falls short, which could gradually erode the funds' asset base and increase expense ratios. For income-focused investors, while the predictability is appealing, it's important to monitor the distribution sources and sustainability.
The shift to level distributions introduces both operational challenges and opportunities. Portfolio management flexibility may be constrained by the need to generate consistent cash flows to support fixed distributions. This could influence investment decisions, potentially forcing security sales at suboptimal times to meet distribution requirements.
The timing of this policy change, effective January 2025, suggests careful consideration of market conditions and portfolio positioning. However, in a volatile market environment, maintaining fixed distribution levels while preserving NAV will require sophisticated risk management. The policy's success will heavily depend on market conditions, interest rates and the funds' ability to generate sufficient returns across different market cycles.
METRO
Under the new level distribution policy, each of CCD, CHI and CHY intend to continue their current practice of making monthly distributions to shareholders, at a constant and fixed (but not guaranteed) rate currently set at
Calamos Investments believes this policy will allow each of CCD, CHI, and CHY to maintain stable, consistent and predictable rates of distribution that are sustainable over the long-term. However, there can be no guarantee that the level distribution policy will be successful in achieving its goals. The Funds' ability to maintain a stable level of distributions to shareholders will depend on a number of factors, including changes in the financial market, market interest rates, and performance of overall equity, convertible and fixed income markets. As portfolio and market conditions change, the ability of each Fund to continue to make distributions in accordance with its level distribution policy may be affected.
While Calamos Investments expects that any declaration of distributions to shareholders will continue to be made and announced monthly, the Funds may cease distributions entirely, at any time, without prior notice to shareholders. The announcement of, amendment to, or later termination of a Fund's level distribution policy may have an adverse effect on the market price of the Fund's common shares. The Funds may at times, in their discretion, pay out less than the entire amount of net investment income earned in any particular period, and may at times, pay out such accumulated undistributed income in addition to net investment income earned in other periods in order to allow the Funds to maintain a stable level of distributions.
As a result, the dividend paid by the Funds to shareholders for any particular period may be more or less than the amount of net investment income earned by the Funds during such period. For federal income tax purposes, each Fund is required to distribute substantially all of its net investment income each year—both to reduce its federal income tax liability and to avoid a potential federal excise tax. The Funds intend to distribute all realized net capital gains, if any, at least annually.
To the extent that insufficient investment income is available on a monthly basis, the Funds' distributions may consist of return of capital in order to maintain the distribution amount. A return of capital occurs when some or all of the money that shareholders invested in the respective Fund is paid back to them. A return of capital does not necessarily reflect a Fund's investment performance and should not be confused with 'yield' or 'income.' Any such returns of capital will decrease the respective Fund's total assets and, therefore, will likely have the effect of increasing the Fund's expense ratio. In addition, the level distribution policy may require the Funds to sell their portfolio securities at a less than opportune time to meet the distribution amount.
Investors should not make any conclusions about the respective Fund's investment performance from the amount of that Fund's distributions or that Fund's level distribution policy. With each distribution that does not consist solely of net investment income, the Funds will issue a press release to shareholders providing detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions that will be reported in the notices to shareholders will only be estimates and will not be provided for tax reporting purposes. The actual amounts and sources of the distributions for tax reporting purposes will depend upon each Fund's investment experience during its full fiscal year and may be subject to changes based on tax regulations.
Additional information about the funds can be found on www.calamos.com.
Important Notes about Performance and Risk
Past performance is no guarantee of future results. As with other investments, market price will fluctuate with the market and upon sale, your shares may have a market price that is above or below net asset value and may be worth more or less than your original investment. Returns at NAV reflect the deduction of a Fund's management fee, debt leverage costs and other expenses. You can purchase or sell common shares daily. Like any other stock, market price will fluctuate with the market. Upon sale, your shares may have a market price that is above or below net asset value and may be worth more or less than your original investment. Shares of closed-end funds frequently trade at a discount which is a market price that is below their net asset value.
About Calamos
Calamos Investments is a diversified global investment firm offering innovative investment strategies, including alternatives, multi-asset, convertible, fixed income, private credit, equity, and sustainable equity. With over
*Calamos Investments LLC, referred to herein as Calamos Investments®, is a financial services company offering such services through its subsidiaries: Calamos Advisors LLC, Calamos Wealth Management LLC, Calamos Investments LLP, and Calamos Financial Services LLC.
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FAQ
What are the new distribution rates for CCD, CHI, and CHY under the level distribution policy?
When will CCD's new level distribution policy take effect?
What are the risks of CCD's level distribution policy?
How will CCD's level distribution policy affect shareholders?
Will CCD's distributions be guaranteed under the new policy?
