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By Miriam Sjoblom, CFA | 09-23-2009 01:22 PM

Calamos: Convertible Issuance Up Dramatically

Calamos Convertible manager John Calamos says increased convertibles issuance is good news for the overall economy and good news for investors

Miriam Sjoblom: Even if convertibles recover to a point where they're not maybe as undervalued as they have been, is now a better time for long-term investors? How has the investing landscape changed for convertibles?

John Calamos: I don't know if it's changed. I've been doing convertible since the 1970s. I've always used them as a way to manage risk. If you look at convertibles over the last 12 months or the last five years, we talk about the last decade of investing and how the equity markets have negative returns--our convertible fund has positive returns.

So they've done well. You can go back to 1985. I don't think there's any difference there. I think we're seeing more issuance these days than we've seen in past years. That's good news. We're seeing issuance on the non-U.S. side, global side. So our global growth and income, which uses a lot of global convertibles, are of interest to us.

As a defensive equity strategy, I think many investors should use them almost like core. That's where you have the comfort level; core should be your comfort level. What that means is when markets go down, I want the defensive equity without making a market-timing decision. That's what I think is important with the convertible strategies.

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