CHW: An Aggressive Income Investment

Calamos Global Dynamic Income Fund (ticker: CHW) is a balanced global closed-end fund that should appeal to aggressive income-oriented investors. The fund has the flexibility to dynamically allocate among equities, fixed income securities and structured products across countries, sectors, credit tiers and companies of differing size. The fund can write call options against 100% of the managed assets to generate additional income.

This was the CHW holdings mix in the last report:

  • Common                                  57.1%
  • Convertible Bonds                   18.5%
  • Corporate Bonds                     15.3%
  • Cash                                         4.5%
  • Convertible Pfd                        3.5%
  • Sovereign Bonds                      0.8%
  • Other                                        0.3%

CHW is a fairly liquid with an average daily trading volume of over 200,000 shares a day. Its average credit quality is BB+.

CHW is fairly priced now and is trading at an above average discount to NAV. But it has appreciated quite a bit from the lows in 2009. It is important to use a trailing stop loss or similar risk management technique to protect against major losses.

Here are some relevant statistics on the fund:

CHW: Calamos Global Dynamic Income Fund     pays monthly

  • Total Net Assets= 728.55 MM      Total Common Assets= 537.55 MM
  • Expense ratio= 1.49% (excluding leverage costs)            
  • Discount to NAV= -12.0%
  • Distribution rate: 7.43%            Income Only: 2.69%
  • Leverage: 26.1%
  • Turnover Ratio: 36% (annualized)
  • Call Option Overlay: 10.4%

Full Disclosure: Long CHW.

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One response to “CHW: An Aggressive Income Investment

  1. Closed-end_Trader

    This fund has an attractive discount compared to other Closed-end funds in its category and among Calamos Funds. However, keep in mind that it lowered its distribution from 11c to 8c in Dec ‘08, then to 6c in July ‘09 then to 5c in Nov ‘09 and still most of this distribution remains a return of capital. Although a ROC is not necessarily bad given the discount, the large discount will probably persist until the UNII increases. It is not likely the distribution will be raised anytime soon. Note: I have no position in CHW but I have put it on my watch list. I continue to enjoy reading your blog and appreciate your effort.

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