Calamos Growth and Income Fund Q3 2025: Performance and Risk Review

Calamos Growth and Income Fund (CGIIX) delivered a 1.87% gain in recent trading, lifting its NAV to $53.13 while posting a 15.27% year-to-date return. This outperformed the S&P 500's 14.83% YTD gain, though the fund's $3.2 billion asset base reflects a cautious approach to volatility.

Amid reduced policy uncertainty, global markets showed strength-particularly international and emerging economies-while U.S. equities lagged. The fund's defensive positioning, blending stocks, convertibles, and fixed income, appears aligned with this environment, though softening labor market signals warrant monitoring.

Q3 earnings growth for the S&P 500 surged 14%, but this momentum was narrowly concentrated in IT and AI infrastructure, which accounted for 40% of earnings gains. While AI-driven demand boosted utilities and industrial stocks, non-AI sectors underperformed, exposing sector dispersion. This fragmentation raises execution risks for funds relying on broad market exposure, even as AI tailwinds persist.

The fund's risk-adjusted strategy remains relevant, yet its lack of disclosed AI exposure could limit upside if tech leadership extends. Investors should weigh this against the broader market's uneven recovery and persistent macro frictions.

Strategy Execution and Risk Management

The fund's multi-asset approach-blending equities, convertible securities, fixed income, and options-provided a structural advantage in Q3 2025. This construction helped drive a 15.27% year-to-date return for Calamos Growth and Income Fund (CGIIX), narrowly outperforming the S&P 500's 14.83% while maintaining lower volatility than broad equity benchmarks. The strategy's emphasis on downside risk management and income generation proved particularly valuable as market conditions shifted.

A core thesis underpinning the fund's resilience centered on mid-cycle economic strength, specifically targeting companies leading in artificial intelligence and infrastructure development. This exposure aligned with broader market trends favoring innovation-driven growth sectors. However, the fund's commentary lacked specific metrics on its AI sector weighting or the precise role of convertibles in risk mitigation, limiting visibility into these tactical drivers.

Tactically, the fund adjusted positioning to navigate evolving macro conditions. Reduced policy uncertainty and a softening labor market required careful calibration, with CGIIX emphasizing income stability alongside growth opportunities. This included leveraging robust corporate fundamentals amid uneven performance across asset classes, with international and emerging markets outpacing U.S. equities.

Despite these efforts, dispersion risks remain significant. The fund's heavy reliance on AI and infrastructure themes creates exposure to sector-specific volatility or policy shifts. Without disclosed volatility metrics or detailed sector breakdowns, the true magnitude of this risk is obscured. Investors should monitor whether AI's momentum persists or if broader market rotation intensifies dispersion in the fund's holdings.

Risurfaces and Constraints

While the fund navigated reduced policy uncertainty in Q3, emerging regulatory pressures in key AI and tech sectors could rekindle volatility. The current calm may not persist as governments grapple with competition implications and data governance, potentially triggering reevaluations of dominant firms. Such shifts could force rapid portfolio adjustments, testing the fund's tactical flexibility.

The fund's significant AI and infrastructure exposure, while driving strong returns, also creates concentrated risk. The 40% earnings surge in IT sectors highlights this exposure, but idiosyncratic setbacks could quickly overshadow broad market gains. While diversification remains a guardrail, rapid innovation cycles mean leadership positions can erode swiftly-a reality the fund must monitor closely given today's stretched valuations for pure-play AI assets.

A softening labor market, explicitly noted in Q3 commentary, poses another headwind. Slower hiring and wage growth could dampen consumer spending, impacting retail and discretionary stocks within the portfolio. This aligns with broader economic fragility emerging from regional Fed surveys, suggesting cautious positioning may be warranted as household balance sheets face pressure.

. The fund's income-oriented constructs could provide resilience here, but earnings visibility may shrink if labor trends persist.