The Calamos Dynamic Convertible and Income Fund (CCD) looks particularly interesting right now. CCD is a closed-end fund managed by the convertible bond specialists at Calamos Investments, yielding approximately 10.3% through monthly distributions, explains Michael Gayed, editor of The Lead-Lag Report.
Markets are in a peculiar spot right now. The Federal Reserve is expected to continue cutting rates into the back half of 2026, yet geopolitical flare-ups have pushed the VIX back toward 25 and rattled equity markets. Credit spreads, while still tight by historical standards at roughly 312 basis points for high yield, have started to widen.
Meanwhile, convertible bond issuance hit a record $166 billion in 2025 and shows no signs of slowing. That matters because convertibles sit at a unique intersection — they offer bondholders equity upside through conversion optionality while providing a fixed-income floor when equities sell off.
Calamos Dynamic Convertible and Income Fund (CCD)
With nearly $903 million in managed assets – and a portfolio that’s 85% invested in convertible securities – CCD offers one of the purest high-yield convertible plays available in the CEF market.
Calamos actively allocates across convertibles, corporate bonds, bank loans, and equities to optimize risk-reward over full market cycles. CCD’s portfolio as of Jan. 31 was overwhelmingly positioned in convertible bonds at 85.2%, followed by corporate bonds (9.2%), cash (2.7%), bank loans (1.6%), and common stock (1.1%).
Sector-wise, CCD is heavily tilted toward technology at 36.7%, followed by industrials (14.9%), healthcare (9%), financials (8.4%), and consumer discretionary (7.8%). Geographic exposure is 91.3% US.
I think CCD is reasonably positioned for the current environment. The short duration limits rate risk, the convertible structure provides asymmetric return potential, and the record issuance pipeline gives the portfolio a deep pond to fish in. But the leverage and premium leave little margin for error if we get a genuine credit event.
