Company: CHY
Filing Date: 2025-12-29
Form Type: N-CSR
Source: 0001104659-25-124662
Chunk: 42

Company: CALAMOS CONVERTIBLE & HIGH INCOME FUND
Filing Date: 2025-12-29
Form: N-CSR
Chunk 42
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 demonstrated flexibility by initiating two quarter-point rate cuts—one in the third quarter and another in October—signaling the central bank's transition toward a less restrictive monetary stance while maintaining its data-dependent approach. Throughout the period, US economic fundamentals remained solid, underpinned by pro-growth fiscal policies and robust corporate investment in transformative technologies, particularly artificial intelligence. The AI infrastructure buildout became a defining theme, driving a surge in convertible issuance from energy providers, data centers, and semiconductor manufacturers seeking cost-effective capital to fund expansion. The convertible market performed well through these crosscurrents, ultimately benefiting from the broadening of equity market leadership beyond the inner circle of mega-cap technology stocks to the outer rings of small- and mid-cap companies that dominate the convertible universe. The convertible market also benefited from increased convertible issuance. Global issuance is tracking toward $165 billion, which would mark the strongest year since 1998. This robust activity reflects companies strategically utilizing convertibles as cost-effective tools that offer modestly lower coupons in exchange for their conversion feature, enabling companies to capitalize on growth opportunities and to refinance existing obligations in a higher-rate environment. The surge in convertible issuance provides an expanding opportunity set as many convertibles are being issued with favorable risk-reward profiles, which we can use to replace convertibles that have become too equity- or bond-sensitive. ASSET ALLOCATION AS OF 10/31/25 Fund asset allocations are based on total investments and may vary over time. www.calamos.com
31 Calamos Convertible Opportunities and Income Fund (Unaudited) The composition of new convertible issuance proved particularly encouraging, given the diverse mix of companies accessing the market. The AI infrastructure buildout drove significant activity, but we also saw healthy issuance across sectors from firms pursuing growth capital and balance sheet optimization. Deal terms remained favorable compared to historical norms, featuring higher coupons and lower conversion premiums. In addition, a high proportion of investment-grade credits entered the convertible market. What factors influenced performance over the annual period? Declining interest rates and narrowing credit spreads were supportive of both convertibles and high-yield bonds during the reporting period. As convertibles benefited from the strong performance of their underlying stocks, they significantly outperformed high-yield bonds. The Fund's relative return was boosted by its relatively heavy allocation to convertibles and relatively light allocation to high-yield bonds. From an economic sector perspective, the Fund benefited from favorable security selection and an average overweight position in information technology, as holdings in technology hardware, storage & peripherals, internet services & infrastructure, and application