Calamos Convertible Opportunities and Income Fund (CHI)

CHI's premium has declined to near parity, making it a more attractive entry point for convertible and high-yield exposure seekers. The fund offers an 11.19% yield, but distributions rely on capital gains as net investment income remains negative, which can be negative in a stretched market. While not a deep bargain, CHI is worth considering now, though waiting for a broader market pullback could provide a better buying opportunity.

We closed out the first half of 2025, making it an appropriate time to give the overall CEF space a fresh look for potential opportunities. As the broader equity indexes have been performing quite well, discounts in the CEF space have narrowed overall. The best relative value more broadly is in the municipal bond space and the "hybrid" funds.

Calamos Convertible Opportunities and Income Fund provides leveraged exposure to convertible and vanilla high-yield bonds. That said, take note of CHI's large portion of unrated holdings. At face value, a yield in excess of 10% and a recent sell-off present a potential opportunity to income-seeking and value investors. Rushing into CHI's headline metrics might leave some disappointed. The fund reported a semi-annual net loss and reverted to ROC in recent months to sustain its yield.

For income investors, closed-end funds remain an attractive investment class that covers various asset classes and promises high distributions and reasonable total returns. Closed-end funds, or CEFs, are generally characterized by higher volatility and deeper drawdowns than the broader market. For these reasons, they are not suited for everyone. In this monthly series, we highlight five CEFs with solid track records that pay high distributions and offer "excess" discounts. We try to separate the wheat from the chaff using our filtering process to select just five CEFs every month from around 500 closed-end funds.

Calamos Convertible Opportunities and Income Fund offers a high 11.3% yield and monthly income, but recent price declines and NAV stagnation temper enthusiasm. The fund's heavy exposure to below-investment-grade and unrated debt, plus aggressive leverage, increases risk in a high-rate environment. CHI trades at a premium to NAV, making its valuation less attractive until interest rate cuts materialize or market conditions improve.

METRO CHICAGO, Ill. , June 2, 2025 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in June 2025 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.

METRO CHICAGO, Ill. , May 1, 2025 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in May 2025 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.

Calamos Convertible Opportunities and Income Fund (CHI) is a dynamically managed high-yield, fixed-income fund that focuses on generating high current income. Its investment portfolio consists of convertible securities and fixed-income corporate bonds. CHI currently offers a very attractive 11.70% distribution yield and is currently trading at a small premium of roughly +4%. However, there are some risks involved depending on the direction of interest rates. The fund is getting close to being fairly priced, but it can still get cheaper from current levels.

The Calamos Convertible Opportunities and Income Fund offers high income potential without sacrificing the upside of equities, better for fighting inflation than traditional bonds. Despite recent underperformance, the CHI closed-end fund's net asset value decline is less severe, suggesting a correction from a previously high premium. The fund appears to be rotating into traditional bonds, which could be a smart strategy, but it is still overweight convertibles.

METRO CHICAGO, Ill. , Feb. 3, 2025 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in February 2025 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.

The Calamos Convertible Opportunities and Income Fund offers a high 9.38% yield, appealing to income-focused investors despite being lower than the peer median of 10.49%. The fund's mixed asset strategy, including convertible securities and bonds, provides equity exposure and income, but its high leverage may increase volatility. The fund's recent performance shows modest gains, underperforming pure equity funds but offering better returns than investment-grade bonds.

METRO CHICAGO, Ill. , Dec. 18, 2024 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in January 2025 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.

METRO CHICAGO, Ill. , Dec. 18, 2024 /PRNewswire/ -- Calamos Investments® announced today that Calamos Dynamic Convertible and Income Fund (NASDAQ: CCD), Calamos Convertible Opportunities and Income Fund (NASDAQ: CHI), and Calamos Convertible and High Income Fund (NASDAQ: CHY) will transition from a managed distribution plan to a level distribution plan effective as of January 1, 2025.

METRO CHICAGO, Ill. , Nov. 1, 2024 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in November 2024 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.

CHI is a strong CEF fund with a focus on convertibles with growth and quality companies. CHI has a high 9.9% yield. The total return has been strong, comparable to the S&P 500 index so far in 2024. It is a great growth income alternative. In 2024, CHI has consistently been trading at an NAV premium, indicating market confidence in its performance. The current premium drop may present a buying opportunity.

METRO CHICAGO, Ill. , Oct. 1, 2024 /PRNewswire/ -- Calamos Investments®* has announced monthly distributions and sources of distributions paid in October 2024 to shareholders of its seven closed-end funds (the Funds) pursuant to the Funds' respective distribution plans.