{"id":32005,"date":"2023-07-06T02:58:12","date_gmt":"2023-07-06T06:58:12","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/calamos-investment-team-outlooks-july-2023\/"},"modified":"2023-07-06T02:58:14","modified_gmt":"2023-07-06T06:58:14","slug":"calamos-investment-team-outlooks-july-2023","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=32005","title":{"rendered":"Calamos Investment Team Outlooks, July 2023"},"content":{"rendered":"
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Introduction from John P. Calamos, Sr., Founder, Chairman and Global Chief Investment Officer<\/h2>\n

During the second quarter, the economy continued to tread a path of \u201cbetter than feared, but far from strong.\u201d US economic data remained steady, but not spectacular. The labor market stayed strong and financial conditions continued to be quite easy despite the best efforts of central bankers around the world. A debt ceiling crisis was averted, and the systematic bank failure that many people feared in the wake of the Silicon Valley Bank (<\/span>OTCPK:SIVBQ) collapse did not come to pass. Inflation data moderated and market participants grew more confident that the Federal Reserve was largely done with its current tightening cycle.<\/span><\/p>\n

During the quarter, the market-cap-weighted S&P 500 Index gained 8.7%, crossing into bull market territory from the lows of 2022. However, the rally was remarkable for its narrowness – a handful of mega-cap names with a strong emphasis on technology drove the gains of the index. Meanwhile, most other stocks in the S&P 500 posted more modest returns, as measured by the Equal Weight Index\u2019s advance of 4.0%. Convertible securities continued to tally up gains, and small caps found their footing, with the Russell 2000 Index advancing a brisk 5.2%. Global benchmarks also advanced but at a more moderate pace than in the first quarter.<\/span><\/p>\n

Global Asset Class Returns, 2Q 2023<\/strong><\/p>\n

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Past performance is no guarantee of future results. Source: Morningstar. Data as of 6\/30\/23 for the Refinitiv Global Convertible Bond Index, the most recent available.<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The quarter will also be remembered – likely for decades to come – for the mass adoption of the first AI \u201ckiller app\u201d ChatGPT. AI dominated earnings calls as the mainstream media focused on little else. Our teams are getting many questions about if and how AI will reshape the world. Certainly, AI offers tremendous potential to drive productivity enhancements and additional innovations across all sectors of the economy – far beyond larger-cap tech names. As our teams discuss in their commentaries, they are carefully analyzing the different opportunities they see within their asset classes.<\/p>\n

Looking to the second half of the year, we believe the US can continue on a growth path, albeit at a slowing pace. Although inflation is moderating, we\u2019re not out of the woods, and fiscal policy uncertainty will only increase as the US presidential election grows nearer. Fed policy has become less of a focal point of investor anxiety, but only time will tell how successful the central bank has been in taming inflation and draining the unprecedented liquidity it pumped into the economy over the years. Other wildcards include how economic growth in China unfolds and geopolitical conflicts.<\/p>\n

We expect that the extraordinarily narrow equity markets will broaden their leadership, with growth-oriented quality companies having the edge. In the fixed income markets, we\u2019re seeing more variation in credit fundamentals.<\/p>\n

We believe the Calamos funds are well positioned. Across asset classes, attention to fundamentals, individual security selection, and risk management will be paramount for navigating higher short-term rates and a moderating economic recovery. It will also be essential to understand the thematic drivers that are disrupting the status quo and creating new winners or losers. Of course, AI is the first that likely comes to mind, but it is not the only one, as you\u2019ll see in our team\u2019s commentaries.<\/p>\n

In this environment, we encourage investors to maintain well-diversified asset allocations. Given our expectation that equity markets will broaden, there are opportunities across the capitalization spectrum, supporting the case for multi-cap approaches and small caps. As you\u2019ll read in our investment team commentaries, there are also many reasons to be excited about non-US markets, including a number of emerging economies.<\/p>\n

Given our expectation of continued market volatility, we see tailwinds for convertible securities, which combine equity and fixed income characteristics. Through active management, convertibles can offer benefits that stocks and bonds alone cannot by providing participation in equity upside with downside risk mitigation. Within traditional fixed income, our teams are continuing to identify opportunities on a bond-by-bond basis.<\/p>\n

The case is as strong as ever for including alternatives within both equity and fixed income allocations. One area that we\u2019re particularly excited about is private credit, which may offer attractive yield and total return potential with less correlation to traditional fixed income investments. We\u2019re pleased to be able to provide investors with access to a broad spectrum of private credit opportunities through our partnership with Aksia, a leader in the asset class.<\/p>\n

Below, our teams share their views on what they see on the horizon, where they are finding opportunity and how they are managing risks.<\/p>\n

The Easy Part of 2023 Is Behind Us<\/h2>\n

Calamos Phineus Long\/Short Fund (<\/em>CPLIX)<\/em><\/p>\n

Michael Grant<\/em><\/p>\n

We believe:<\/p>\n