Why Has CIGRX Delivered Below-Average Returns?

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Performance evaluation of the Calamos International Growth Fund

The Calamos International Growth Fund – Class A (CIGRX) has had a difficult year so far. It figures as a below-average performer among the 12 funds in this review. It has fared better in the one- and three-month periods until June 17. It has fallen less than its peers, but longer periods have seen poor performance.

We have graphed the fund’s performance against two ETFs: the iShares MSCI ACWI Ex-U. ETF (ACWX) and the Vanguard FTSE All-World Ex-US ETF (VEU).

Let’s look at what has contributed to this below average performance by the fund in YTD 2016.

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Portfolio composition and contribution to returns

London-based investment manager Henderson Group, Prudential (PUK), Italy’s Intesa Sanpaolo (IITSF), and Japan’s Sumitomo Mitsui Financial Group (SMFG) have ensured that financials emerge as the biggest negative contributors in YTD 2016. There are a few small positive contributors, but their combined effect is muted.

The consumer discretionary sector has been led down by Germany’s Daimler AG (DDAIF), Britain’s SuperGroup and Delphi Automotive (DLPH), and China’s automaker Brilliance Auto Group.

Meanwhile, Belgian biopharmaceutical company UCB and Ireland-based Shire (SHPG) are primarily responsible for driving down the healthcare sector. Other major detractors include Novo Nordisk A/S (NVO) and Novartis AG (NVS).

Investor takeaway

The Calamos International Growth Fund – Class A (CIGRX) seems to be cautious about its portfolio positioning for now. Although fund management has increased its exposure to information technology stocks, which do well in a rising market, it is defensive about consumer spending and has increased its exposure to staples while decreasing its exposure to discretionary stocks.

In 2016 so far, CIGRX has grossly underperformed the passively managed ACWX. Although its picks from the staples sector have contributed positively, their quantity is quite low.

CIGRX’s energy exposure has not done as well as that comprising ACWX, either. It will be interesting to see whether the fund’s management settles on the portfolio composition for CIGRX, given its high rate of portfolio turnover.

Let’s now move on to the Calvert International Equity Fund – Class A (CWVGX).

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