Convertible Securities

Investment gains through exposure to equities? Some think the only way to get there is to jump in the stock market and endure all its exhilarating ups and nerve-wracking downs. To do anything less—some believe—is to forgo the maximum of what’s possible.

Conceptually, investors understand the benefit of limiting the downside. But there can be a second part to that benefit. Here, according to Calamos Senior Vice President, Co-Portfolio Manager Joseph Wysocki, is what many don’t understand: “Potentially protecting against the downside doesn’t just mean you don’t lose as much, it can lead to more upside through market cycles.”

To illustrate: After 2017 ended as the least volatile year since the VIX’s inception, 2018 and 2019 year-to-date have taken equity investors for quite a ride. Consider what’s occurred over the last 17 months—the Fed changed direction, global, synchronized growth did a fast fade, and trade conflicts now abound, all of which fired off multiple mini-corrections in the S&P 500.


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