In 2025, the convertible securities market distinguished itself as one of the most resilient and top-performing asset classes. This remarkable achievement was underpinned by a confluence of factors, including a robust U.S. economic landscape and supportive fiscal policies aimed at fostering growth. The market witnessed an unprecedented volume of new convertible bond issuances, underscoring their attractiveness as a flexible and cost-effective funding mechanism for companies. This trend of elevated issuance is anticipated to persist, driving further expansion within the sector. Furthermore, the convertible market's broad participation, particularly from small and mid-capitalization enterprises, positions it favorably as equity market leadership diversifies beyond mega-cap firms. The prospect of increased merger and acquisition activities also presents a significant catalyst for this dynamic market.
Convertible Securities Thrive Amidst Economic Strength and Strategic Investments
As the calendar turned to 2026, the convertible market was already riding a wave of considerable momentum, following a standout performance in the preceding year, 2025, where it emerged as a leading asset class across global capital markets. This success is deeply rooted in the strong economic fundamentals of the United States, bolstered by an array of fiscal policies designed to stimulate economic expansion.
A notable highlight of 2025 was the record-breaking volume of new convertible securities issued. This surge in issuance vividly illustrates the compelling proposition these instruments offer: an efficient avenue for companies to secure growth capital. This trend is not a fleeting one; experts widely anticipate continued high levels of issuance throughout 2026, signaling sustained confidence in this hybrid financial product.
The market's composition, characterized by a significant presence of small and mid-cap companies, is another key strength. This diversity is particularly advantageous at a time when the leadership in equity markets is observed to be broadening, moving beyond the traditional dominance of mega-capitalization giants. Moreover, the anticipation of an uptick in merger and acquisition activities across various sectors is expected to provide an additional impetus, potentially unlocking further value for convertible holders.
Within this vibrant environment, the Calamos Convertible Fund is making strategic allocations. The fund is keenly focused on capitalizing on the transformative power of artificial intelligence (AI), directing investments across the entire data center value chain. Beyond AI, the fund is also targeting other high-growth and strategically important sectors, including cybersecurity, national defense modernization efforts, nuclear energy advancements, and the burgeoning space industry. These targeted investments are designed to leverage secular growth trends and technological innovations, aiming to deliver robust returns for investors.
The outstanding performance of the convertible securities market in 2025 and its promising outlook for 2026 underscore the intrinsic value these instruments offer. Their ability to combine the growth potential of equities with the downside protection of fixed-income assets makes them particularly attractive in today's evolving economic landscape. The strategic emphasis on innovation-driven sectors by funds like Calamos Convertible further highlights a forward-looking approach to investment, aiming to capture the benefits of technological progress and economic resilience. This blend of economic fundamentals, market dynamics, and strategic investment focus positions convertible securities as a compelling consideration for investors seeking both growth and stability.
