Calamos Investments today announced the launch of the Calamos Convertible Equity Alternative ETF (NYSE Arca: CVRT). The actively managed fund provides investors with targeted access to equity-sensitive convertibles in an ETF.
Convertible debt securities are exchangeable for the issuer’s equity securities at a predetermined price. The benefit is that they tend to provide greater appreciation potential than nonconvertible debt securities, such as corporate bonds. While there hasn’t been significant demand for convertible bond ETFs, VettaFi’s Head of Research Todd Rosenbluth suggested CVRT could change that.
“Calamos has a strong heritage of actively investing in convertible bonds,” he said. “Bringing this approach into the ETF industry to meet advisors is a key milestone.”
Filling an ETF Gap With a Convertible Equity Strategy
This is the first time Calamos will offer a convertible strategy through an ETF structure. The company launched the Calamos Antetokounmpo Global Sustainable Equities ETF (SROI), its first equity ETF, in February.
President and CEO John Koudounis said in a news release that Calamos sees “tremendous opportunity across the ETF landscape. It is fitting that one of our earliest products in this space reflects our convertibles heritage.”
Calamos Founder, Chairman, and Global CIO John P. Calamos Sr. said CVRT fills “a gap in the ETF marketplace.” It also meets “financial advisor demand for a high-growth-oriented convertibles strategy.”
With CVRT, Calamos uses credit, convertible, and equity analysis processes to identify potential outperformance areas within the equity-sensitive universe. Matt Kaufman, head of ETFs at Calamos, explained what he sees as the fund’s advantages over passively managed funds: “Unlike most convertible-based ETFs that offer passive exposure to the asset class, CVRT identifies equity-sensitive opportunities.”
CVRT has an expense ratio of 0.69%.
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