Company: CPZ
Filing Date: 2025-12-29
Form Type: N-CSR
Source: 0001104659-25-124691
Chunk: 66

Company: Calamos Long/Short Equity & Dynamic Income Trust
Filing Date: 2025-12-29
Form: N-CSR
Chunk 66
---
 the AI infrastructure investment cycle and rotation toward quality growth names. Security selection within consumer discretionary also added value, with broadline retail emerging as a significant contributor. The Fund's lack of exposure to leisure products and favorable positioning in homefurnishing retail further supported returns. From a risk-management perspective, our emphasis on total-return convertibles—those offering attractive equity participation while maintaining meaningful downside protection—helped the portfolio navigate the volatile conditions of early 2025. During the challenging month of April, when tariff-related concerns peaked, the Fund's allocation to more defensive, higher-quality convertible structures, along with our selective approach to credit quality, provided important ballast. The Fund's use of leverage also proved beneficial, as the return proceeds significantly exceeded the cost of leverage during the period. Over the period, security selection within the industrials sector weakened returns. Aerospace & defense lagged, as did heavy electrical equipment. The health care sector presented a mixed picture. While certain holdings contributed positively, positions in health care equipment and health care services detracted overall, and the portfolio's lack of representation in managed health care—which performed well during portions of the period—also impeded relative returns. How is the Fund positioned? We focus on actively managing the risk-reward trade-offs within the portfolio. The characteristics of convertible securities vary: some convertibles are more bond-like, some are more equity-like, and others offer a balance. We have maintained a preference for the balanced portion of the convertible market, which offers a favorable asymmetric payoff profile by providing an attractive level of upside equity participation with reduced exposure to downside moves. CALAMOS CLOSED-END FAMILY OF FUNDS ANNUAL REPORT
50 Calamos Dynamic Convertible and Income Fund (Unaudited) As of October 31, 2025, convertibles accounted for approximately 85% of the portfolio. We believe this allocation enables shareholders to capitalize on selective opportunities in the broader equity markets. In the long term, we think patient investors will be rewarded through an allocation to convertibles and select high-yield bonds that may offer attractive valuations. From a credit-quality perspective, unrated securities comprise approximately 77% of the portfolio. This reflects the structural reality that most convertibles are not rated by traditional credit agencies, requiring us to perform our own rigorous credit analysis. We maintain a selective approach to CCC credits at approximately 1% of the portfolio, while holding a significant allocation to BB-rated securities at roughly 6%. This BB tier offers attractive valuations and provides access to a substantial portion of the convertible