With the success of U.S. equity strategies still in doubt, many advisors have instead opted to increase their fixed income exposure. One income option that could prove exceptionally useful in this moment is through the use of closed-end fund ETFs.
That being said, bonds are not a foolproof path to success either. The recent Federal Reserve meeting has raised new doubts over when interest rates could come down. This uncertainty makes it more difficult for investors to manage duration risk for bond strategies.
While advisors wait for more clarity, it could do well to look to alternative income strategies. Some advisors may be overlooking closed-end funds, but they can offer a route to portfolio yield outside the bond market. These funds raise their initial capital through a one-time sale of shares. From there, a closed-end fund can steadily accrue both interest and income through its underlying securities.
CCEF Can Offer Both Yield and Long-Term Returns
To see a compelling closed-end fund strategy in action, look no further than the Calamos CEF Income & Arbitrage ETF (CCEF ). CCEF’s strategy revolves around investing in closed-end funds that are trading at an attractive discount.
This enables the fund to pursue both portfolio yield and capital appreciation within a single ticker. The fund selects closed-end funds that can offer competitive amounts of regular monthly income. Meanwhile, the focus on discounted closed-end funds opens up opportunities for long-term returns.
When choosing to add closed-end fund exposure to a portfolio, it helps to pick a manager with extensive experience. Notably, Calamos Investments has been involved with the closed-end fund market since 2002.
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Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus 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]
2023 Calamos Investments LLC. All Rights Reserved.
Calamos and Calamos Investments are registered trademarks of Calamos LLC.
The benefits of expertise are fortified by the fact that CCEF is an actively managed fund. This gives the Calamos team more maneuverability when it comes to navigating the closed-end fund market.
Ultimately, the best way to see if CCEF’s strategy pays off is to simply look at its results. As of April 30th, 2025, CCEF is offering a distribution yield of 8.75%. This income could outpace that of many tried-and-true bond ETFs.
