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Calamos Convertible and High Income Fund
The Calamos Convertible and High Income Fund (NASDAQ: CHY) launched in 2003 as an SEC-registered, closed-end management investment company. John P.
Calamos Convertible and High Income Fund
The Calamos Convertible and High Income Fund (NASDAQ: CHY) launched in 2003 as an SEC-registered, closed-end management investment company. John P. Calamos Sr., who founded Calamos Investments in 1977 after serving as a U.S. Air Force pilot, built the strategy on a decades-long track record of navigating convertible bond markets. The fund was seeded with the intellectual capital of an investment shop that had specialized in convertible securities since the late 1970s, well before the asset class became broadly institutionalized. CHY allocates primarily across U.S. convertible bonds, below-investment-grade corporate debt, and, to a lesser degree, equity securities obtained through conversion or exchange provisions. The fund deploys capital into a spectrum of issuers, with historical disclosure showing exposure to sectors such as technology, healthcare, and consumer discretionary — names like Tesla, Wells Fargo, and AT&T have appeared in vintage portfolio reports. The strategy hinges on the convexity embedded in convertible structures: clipping coupon income during flat or down markets while retaining the option to participate in equity rallies. The fund's geographic focus skews overwhelmingly North American, consistent with the dollar-denominated convertible issuance market. Calamos Investments, the fund's adviser, oversees a broader platform spanning equity, alternative, and multi-asset strategies. The firm operates from suburban Chicago in Naperville, Illinois. While the fund's total net assets fluctuate with market conditions and closed-end fund discounts, the Calamos brand footprint expanded materially over the last two decades through a suite of closed-end and open-end vehicles. The senior leadership includes John Koudounis as CEO, who has pushed distribution into the advisory and wirehouse channels, while John Calamos Sr. maintained the CIO role through 2016, with his son John S. Calamos now serving as a portfolio manager. What structurally distinguishes CHY from its direct-issuance peers is the closed-end wrapper itself — a fixed capital base that permits higher structural leverage and removes the asset-liability drag of daily redemptions facing open-end managers. The fund has historically employed leverage up to approximately 30% of managed assets to enhance income generation, a risk-on posture that amplifies both coupon returns and the downside sensitivity that memorably emerged during the 2008 and 2020 liquidity shocks. The vehicle permits the investment team to hold through volatility rather than manage to redemption gates, a structural alignment with its stated multi-cycle income mandate.
General information
Firm type
Asset Manager
Year founded
2003
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Naperville
Corporate office
Naperville, IL, United States
Principals
John P. Calamos Sr.
Founder and Global CIO
Sector focus
Frequently asked questions
What distinct asset-class exposure does the Calamos Convertible and High Income Fund provide?
The fund's mandate is a blend of convertible securities and below-investment-grade corporate debt within a single publicly traded closed-end vehicle. Unlike retail mutual funds, CHY employs a fixed capital base that can sustain structural leverage — historically near 30% of managed assets — to amplify income distributions. The convertible sleeve provides equity optionality while the high-income component anchors the portfolio's yield profile.
How is the fund's capital structure distinct from an open-end mutual fund?
As a closed-end fund, CHY trades on the NASDAQ with a fixed number of shares outstanding. This structure exempts the portfolio managers from daily redemption pressures and allows them to employ leverage through preferred shares or credit facilities. The trade-off for investors is exposure to persistent premiums or, more commonly, discounts to net asset value, which can widen sharply during market dislocations.
Who runs investment decisions at the fund?
John Calamos Sr. founded Calamos Investments in 1977 and served as Global CIO and portfolio manager for decades. His son, John S. Calamos, is a named portfolio manager on the fund. The broader Calamos investment team — headquartered in suburban Chicago — operates under a centralized credit and equity research framework that feeds both the closed-end fund complex and the firm's institutional separate accounts.
Is the fund's income distribution considered return of capital or net investment income?
The fund's monthly distributions have historically included a mix of net investment income, realized capital gains, and, in some periods, return of capital. Closed-end funds employing leverage often show return-of-capital components during periods when distributed income exceeds taxable earnings. Section 19(a) notices, publicly filed with each distribution, specify the exact source breakdown for tax-reporting purposes.
How does leverage affect the fund's risk posture?
Calamos has historically disclosed leverage ratios near 30%, which magnifies the income stream and volatility of the net asset value. During the 2008 credit crisis and the March 2020 COVID repricing, the fund's discount to NAV widened dramatically as credit spreads blew out — a consistent behavior for levered closed-end income vehicles. The structural leverage adds a procyclical tail-risk dimension that buy-and-hold allocators should model explicitly.
What is the fund's relationship to the broader Calamos Investments platform?
CHY is one of several closed-end funds that Calamos Investments advises, with the parent firm managing a broader book of equity, alternative, and multi-asset strategies. The platform was founded by John Calamos Sr. and today operates under CEO John Koudounis. The fund's advisory agreement with Calamos Advisors LLC places it within a scaled asset management business, not a standalone partnership.
What happened to the fund's structure or mandate post-2008 credit crisis?
The fund did not alter its fundamental mandate following the 2008 credit dislocation, though its discount to NAV reached extreme levels — a pattern common across the closed-end fund universe. The advisory team maintained the core convertible-plus-high-yield allocation framework. However, the experience illustrated the liquidity risk embedded in a levered closed-end vehicle during forced deleveraging cycles.
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