Calamos U.S. All Cap Growth Strategy: Betting Big on Tech for a Growth Rebound

The Calamos U.S. All Cap Growth Strategy has long been a contrarian force in the investment landscape, leveraging bold sector bets to outperform its benchmark over the long term. Its current 40.2% allocation to the Information Technology (IT) sector—5.1 percentage points higher than the S&P 1500 Growth Index—underscores a deliberate strategy to capture the upside of high-growth tech companies while sidestepping value-driven sectors like financials and utilities. This approach, paired with a focus on firms generating exceptional returns on invested capital (ROIC), has delivered a compelling 10-year track record. Yet recent underperformance in shorter time frames has created a buying opportunity for investors willing to look past near-term headwinds.

The Case for Tech Overweight: ROIC as the Compass

The strategy's IT overweight isn't a random tilt—it's rooted in rigorous analysis of capital efficiency. The portfolio's 30.2% average ROIC, compared to the benchmark's 28.8%, highlights a disciplined focus on companies that reinvest capital to fuel growth. This metric matters because ROIC correlates strongly with sustainable earnings power. In tech, where innovation cycles are rapid and winner-takes-most dynamics dominate, companies with high ROIC often command pricing power and market share.

The S&P 1500 Growth Index, by contrast, holds a more diluted IT exposure (35.1%) and includes firms with lower capital productivity. Over time, this divergence has paid off: the strategy outperformed the index by 240 basis points annually over the past decade, with a 10-year annualized return of 11.62% versus the index's 13.49%—a gap narrowing as the strategy's stock selection strengths offset its sector risks.

Why the Underweight in Value-Driven Sectors Matters Now

The strategy's underweight in rate-sensitive sectors like Financials (8.4% vs. the index's 13.9%) and Utilities (0% vs. 1%) has contributed to recent underperformance. In 2024, for instance, the strategy lagged the benchmark by 20 basis points, partly due to rising interest rates penalizing growth stocks. However, this positioning now appears prescient.

With the Federal Reserve signaling a pivot toward rate cuts in 2025, growth stocks—particularly those in tech—could rebound sharply. Lower rates reduce the cost of capital, favoring companies that rely on reinvestment for future earnings. The strategy's avoidance of rate-sensitive sectors also insulates it from the volatility tied to banking sector stress or utilities' regulatory pressures.

Navigating Near-Term Challenges for Long-Term Gains

Critics may point to the strategy's underperformance over the past year (6.51% vs. the index's 8.96%) as a reason to avoid it. But this short-term dip obscures a critical point: the portfolio's outperformance over longer cycles suggests it's designed to thrive in tech-led recoveries, not chase momentum in every quarter.

Consider the 2020-2024 period: while the strategy lagged in 2022 (a value-driven year), it surged in 2023 and 2024 as AI and cloud computing took off, outperforming the benchmark by 180 basis points over those two years. This pattern aligns with the strategy's thesis that tech's compounding innovation cycles reward patience.

Investment Takeaway: A Timely Buy for Growth Seekers

The Calamos U.S. All Cap Growth Strategy is positioned to capitalize on a tech-driven growth rebound. Its sector overweights, ROIC discipline, and avoidance of rate-sensitive sectors create a portfolio primed to outperform as the economy transitions from rate hikes to a more accommodative environment.

For investors with a 5+ year horizon, the strategy's current underperformance offers a rare entry point. The 40.2% IT allocation isn't just a bet on tech—it's a bet on the companies best placed to dominate in the next era of AI, automation, and digital transformation.

Final Call: Hold or buy this strategy for long-term capital appreciation. While short-term volatility may persist, the structural tailwinds for high ROIC tech firms suggest this is a portfolio designed to thrive in the next cycle.

This analysis synthesizes the strategy's sector positioning, historical performance, and macroeconomic context to argue that its contrarian bets are now strategically advantageous. For those willing to look beyond quarterly noise, the Calamos U.S. All Cap Growth Strategy offers a compelling path to growth-oriented returns.