| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 126.89 | 465 |
| Intrinsic value (DCF) | 8.83 | -61 |
| Graham-Dodd Method | 8.47 | -62 |
| Graham Formula | 160.55 | 615 |
Calamos Dynamic Convertible and Income Fund (NASDAQ: CCD) is a closed-end fixed income mutual fund managed by Calamos Advisors LLC, specializing in a diversified portfolio of convertible securities, investment-grade and high-yield bonds, loans, equity-linked notes, and floating-rate securities. Launched in 2014, the fund employs a top-down macroeconomic approach combined with fundamental analysis to optimize returns in the U.S. fixed income market. CCD stands out in the asset management sector by integrating derivatives like options to enhance yield and manage risk. With a focus on income generation, the fund appeals to investors seeking exposure to hybrid securities that blend equity upside with bond-like stability. Its strategy is particularly relevant in volatile or rising rate environments, where convertible securities can offer downside protection. CCD’s $572M market cap and consistent dividend yield (currently $2.34/share) position it as a niche player in the financial services sector, catering to income-focused portfolios.
Calamos Dynamic Convertible and Income Fund (CCD) offers a compelling yield play with a diversified approach to convertible and fixed income securities, supported by a 4.31 diluted EPS and a 2.34/share dividend. Its beta of 1.05 suggests moderate market correlation, appealing for risk-adjusted returns. However, the fund’s negative operating cash flow (-$7.17M) raises liquidity concerns, and its reliance on derivatives introduces complexity. The absence of debt and capital expenditures is a positive, but the niche focus on convertibles may limit appeal during equity bull markets. Investors should weigh the high yield against sector-specific risks, including credit spreads and interest rate sensitivity.
CCD’s competitive edge lies in its hybrid strategy, blending convertible arbitrage with income generation—a rare combination in closed-end funds. Its ability to dynamically allocate across convertibles, high-yield bonds, and derivatives allows it to capitalize on market dislocations, offering downside protection during equity downturns. However, the fund faces stiff competition from larger, more diversified fixed income funds and ETFs with lower fees. Its active management approach (0.95% expense ratio) may deter cost-conscious investors, though the niche focus justifies premiums for specialized expertise. CCD’s performance is highly dependent on Calamos’ macroeconomic analysis, which differentiates it from passive income funds but introduces manager risk. The fund’s small size ($572M AUM) limits scale advantages compared to giants like PIMCO, though agility in trading less liquid securities is a counterbalance. Its zero-debt structure is a strength, but the lack of cash reserves could constrain flexibility during market stress.