Calamos Investments, the Naperville, Chicago-based $25.3 billion investment manager better known for its line-up of mutual funds, forayed into the ETF world with the introduction of the Calamos Focus Growth ETF (CFGE) in an attempt to leverage its stock-picking skills.
The Calamos Focus Growth Mutual Fund, which is nearly 11 years old and manages $74 million in assets, returned more than 30 percent over the past year, easily beating the three broad equity indexes.
The new fund, which is listed on the NASDAQ, ventures into the thinly populated world of actively-managed equity ETFs. Most of the more than 90 US-listed actively-managed ETFs are focused on fixed-income products, and Calamos’ expertise in growth investment and active management is likely to give the fund an advantage as it enters an arena that some analysts believe will see robust growth with the picking up of the business cycle.
The current $16 billion actively managed ETF space could grow to a $500 billion asset class by 2020 on increased demand if the regulatory environment becomes more favorable, according to a report by SEI Investments.
CFGE invests in growth-oriented blue-chip US companies with the aim of achieving long-term capital appreciation. The portfolio is highly diversified and seeks exposure in companies with a market capitalization of at least $1 billion.
Since the new ETF is an actively managed product, it doesn’t replicate the performance of any particular index. Rather it picks companies based on fundamentals, which includes strong earnings and revenue growth, low debt-capital ratio, strong global presence and robust returns on invested capital.
It may also invest up-to 25 percent of assets in foreign equities and securities issued by other investment companies, including money-market funds. The fund is bench-marked against the S&P 500 and the Russell 1000 Growth index for performance-measurement purposes.
The fund now holds about 35 stocks in its portfolio with Apple (8.56 percent), Google (6.46 percent) and Facebook (6.18 percent) occupying the top three spots. Following its mutual fund’s investment strategy, CFGE allocates nearly a combined 55 percent of assets to technology and consumer discretionary sectors.
The fund has a 0.90 percent annual net expense ratio.
Disclosure: No holdings
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