Courtney Dobrow: Hi, I'm Courtney Dobrow, a Mutual Fund analyst at Morningstar. I'm here at the Morningstar Investment Conference with John Calamos. He is the chief executive officer, founder and co-CIO of Calamos Asset Management and also manager on a number of the firm's funds including its first fund, Calamos Convertible. Thank you for being with us.
John P. Calamos, Sr.: Thank you, Courtney.
Dobrow: I guess to start out, 2008 was such a brutal market for convertibles. We saw a big – huge return in the market then in 2009 with the Bank of America-Merrill Lynch Index almost doubling the S&P 500's return. Where are we today?
Calamos, Sr.: Well, I think we're in a – obviously, 2008 was not a normal environment. You had a lot of factors that made convertibles act very abnormally. They acted much more like pure equity than the convertible downside protection. And that was because all the deleverage, you know, of the convertible arbitrage and the hedge funds and that type of thing going on. But if you look at the two years, '08 and '09 put together, they acted pretty normal.
So, in other words, they've always produced good defensive characteristics in the slower periods or more difficult periods of the market. I think where we are right now is in that – we're hopefully coming out of a recession, but who knows, that's the big question. We may be in a more volatile market period. Obviously, May shook everybody up from that point of view.
So, I think, convertibles with their defensive characteristics they are acting more like they've acted in every other market cycle than they did in '08. You know, convertibles didn't work very well in the last quarter of '08, but nothing did. But in this volatile equity market period, convertibles, I think their defensive characteristics seem to be holding, valuation seem to be holding well. So, that's important.
Dobrow: Can you talk a little bit about the global convertibles market? Calamos has been managing non-U.S. converts since the late 80s, I believe...
Calamos: We like that market very much, it's growing. The global convertible market last year, for example, half the issuance in the global convertible market was U.S. and half was non-U.S. So, we're seeing good opportunities outside the U.S. in convertibles.
And in some of the areas that many of us would perceive to be higher risk, but may be a very promising but very volatile, emerging markets, we're seeing some convertibles in that area. So, one of the ways to dampen some of that volatility in those emerging markets is to participate in their convertibles. So, that's part of the global convertible play.