Calamos to hike minimum on convertible-bond managed accounts

Serving smaller convertible-based accounts has become too challenging, so the fund company is raising the investment minimum to $750,000, from $100,000.
JAN 31, 2010
Calamos Investments is raising the investment minimum on its convertible-securities managed-account portfolio to $750,000, from $100,000. The reason for the change, the company said, is that serving smaller convertible-based accounts is too challenging, given the illiquid nature of the market. “During the past 18 months, new trading and market dynamic have intensified the difficulties we encounter as we work to achieve the best results for our clients,” spokesman Chris Allen wrote in an e-mail. “By raising the investment minimum, we hope to ensure that all clients will continue to receive the full benefit of our deep knowledge and expertise in the convertible-security category.” The change will take effect April 9. As a result, Lockwood Advisors Inc. is removing the portfolio from its platform, effective immediately, according to a notice that Lockwood sent to its adviser clients. Investors in the managed account can switch to one of the firm’s convertible-securities mutual funds, according to Mr. Allen. Calamos’ decision to up the investment minimum on its convertible-bond strategies makes sense, given that separate accounts have smaller and more frequent trades than mutual funds, said Nadia Papajiannis, an analyst at Morningstar Inc. “Also, the mutual funds have more flexibility with regard to what they can invest in,” she said.

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