Marty Fridson is a leading expert in income investing; the editor of Forbes/Fridson Income Securities Investor looks for opportunities for sophisticated investors, including preferreds, convertibles and — in this case — a pair of closed-end funds designed for global investors.
Calamos Global Total Return Fund (CGO) is a four-star-rated fund by Morningstar. It seeks total return through a combination of capital appreciation and current income, largely through investment in a globally diversified portfolio of equities, convertible securities, and high yield debt issues.
CGO’s objective is to provide consistent income through monthly distributions. Under normal operating circumstances CGO will invest up to 50% of its managed assets in equity securities, including convertible issues. Non-U.S. issuers may account for up to 30% of managed assets in a normal operating environment.
As of 06/30/21, the portfolio’s sector weightings were dominated by Information Technology (21.1%), Consumer Discretionary (18.2%), Financials (13.4%), Industrials (10.7%), and Communication Services (10.3%). Common stocks accounted for 60.6% of the portfolio, followed by convertible securities at 26.0%.
The fund’s top five holdings (all common stock) were Taiwan Semiconductor Manufacturing (3.4%), ASML Holding (2.5%), Microsoft (2.3%), Amazon (2.1%), and Alcon (2.1%).
CGO’s total return performance has been strong in four of the last five years. The market price total return through the first six months of 2021 was a solid 14.08%.
This investment is suitable for medium to highrisk tax-deferred portfolios. Dividends are variable, but are largely taxed as ordinary income. Buy at $18.50 or lower for a 6.49% annualized yield.
Delaware Enhanced Global Dividend & Income Fund (DEX) primarily seeks current income and secondarily capital appreciation.
The fund invests in dividend-paying or income-generating securities across multiple asset classes, including equities, fixed income debt issues, convertible securities, and emerging market issues. DEX also engages in income strategies, utilizing dividend capture trading and option overwriting.
As of 03/31/21, High Yield Bonds accounted for 41.1% of the portfolio, followed by International Equity at 25.6% and Convertible Securities at 10.1%.
The fund’s largest industry sectors were Food (6.8%), Pharmaceuticals (6.2%), Telecom (4.8%), and Retail (4.0%). Equity and debt holdings are typically well diversified, with no material single-name risk in either U.S. or Foreign names.
Historical total return performance has been solid, although results were relatively flat in 2020. The fund, however, reported a 13.95% market price total return for the YTD period ended 06/30/21. This investment is suitable for medium- to high-risk portfolios.
Distributions are taxed on a variable basis, but typically come from net investment income and short-term capital gains, with the balance if necessary from long-term capital gains. Buy at $12.00 or lower for a 6.10% annualized yield.
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