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.
Calamos Investments has announced an increase in the monthly distribution rate for the Calamos Convertible and High Income Fund (NASDAQ: CHY) from 8.50 cents to 10.00 cents per share, an approximate 18% increase. This new distribution is payable on February 19, 2021, based on a market price of $14.90 per share as of January 20, 2021, resulting in an annualized distribution rate of 8.05%. The decision to raise the dividend reflects the fund's strong performance in 2020, supported by active management and a diversified portfolio.