For investors looking to foster more income in their portfolios, closed-end fund (CEF) ETFs can be a strong option.
Unlike open-end funds, closed-end funds won’t need to repurchase shares from investors. Since they don’t need to hold cash on the sidelines, CEFs have the potential to stay fully invested and build constructive returns.
Investing in CEFs can also help diversify one’s portfolio. CEFs can contain a strong mix of asset classes to diversify returns away from more traditional asset classes.
CCEF Offers Closed-End Fund Expertise
The ETF wrapper can offer investors an easier means of accessing the closed-end fund space. One such fund is the Calamos CEF Income & Arbitrage ETF (CCEF).
The crux of CCEF’s strategy comes from investing in closed-end funds offered at compelling discounts. Calamos utilizes quantitative research to seek out discounts within the field of closed-end funds. The fund then uses qualitative screening to better understand why an individual closed-end fund is trading at a discount.
CCEF leverages the extensive closed end-fund experience possessed by the Calamos Investment portfolio team. Calamos’ longstanding expertise in the closed-end fund market dates back more than two decades.
This experience shines through in CCEF’s income potential. As of January 31, 2025, CCEF is offering a distribution yield of 8.07%.
Given the relative uncertainty of the Fed’s interest rate regimen, diversifying one’s income portfolio can make a great deal of sense right now. This risk-adverse benefit is only bolstered by the flexible active management of the Calamos team.
Monthly income and diversification are not the only benefits that CCEF can provide, either. Due to the fund’s focus on discounted closed-end funds, CCEF can also generate dynamic capital appreciation.
As of January 31, 2025, CCEF’s NAV has risen over 22% in the last year. These results highlight how the fund can be a one-two punch for building income and cultivating long-term returns.
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Disclosure Information
Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.
An investment in the Fund(s) is subject to risks, and you could lose money on your investment in the Fund(s). There can be no assurance that the Fund(s) will achieve its investment objective. Your investment in the Fund(s) is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the Fund(s) can increase during times of significant market volatility. The Fund(s) also has specific principal risks, which are described below. More detailed information regarding these risks can be found in the Fund’s prospectus.
Risks of investing in the Fund include risks associated with (1) the Fund’s investment in closed-end fund shares; (2) the closed-end funds’ investments; and (3) any other investments of the Fund, including investments in ETFs, BDCs, and derivative instruments. The shares of closed-end funds may trade at a discount or premium to, or at, their NAV. The securities of closed-end funds may be leveraged. As a result, the Fund, may be exposed indirectly to leverage through an investment in such securities. An investment in securities of closed-end funds that use leverage may expose the Fund to higher volatility in the market value of such securities and the possibility that the Fund’s long-term returns on such securities (and, indirectly, the long-term returns of its shares) will be diminished. In addition, closed-end funds are allowed to invest in a greater amount of illiquid securities than open-end mutual funds.
Investments in illiquid securities pose risks related to uncertainty in valuations, volatile market prices, and limitations on resale that may have an adverse effect on the ability of the fund to dispose of the securities promptly or at reasonable prices. The Fund may invest in BDCs, which typically operate to invest in, or lend capital to, early stage-to-mature private companies as well as small public companies. The Fund’s investment in shares of ETFs subjects it to the risks of owning the securities underlying the ETF, as well as the same structural risks faced by an investor purchasing shares of the Fund, including authorized participant concentration risk, market maker risk, premium-discount risk and trading issues risk. Derivatives are instruments, such as futures and forward foreign currency contracts, whose value is derived from that of other assets, rates or indices. The use of derivatives for non-hedging purposes may be considered more speculative than other types of investments.
Calamos Financial Services LLC, Distributor
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
Calamos Financial Services LLC
2020 Calamos Court | Naperville, IL 60563
866.363.9219 | www.calamos.com | [email protected]
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Calamos and Calamos Investments are registered trademarks of Calamos LLC.
