Calamos Keeps Monthly Income Flowing — One Fund Lifts Its Payout

Calamos announces monthly distributions and a boost to one fund’s payout

Calamos Investments’ closed-end funds (NASDAQ: CHI, CHY, CSQ, CGO, CHW, CCD and CPZ) announced their regular monthly distributions today. The company confirmed payment and record dates for the upcoming month and, importantly for income investors, said one of the funds—CSQ—will raise its stated monthly payout. The news is straightforward: distributions will be paid as scheduled, most funds kept their payouts steady, and CSQ’s move is a small but notable increase in the fund’s cash return to shareholders.

What the payment notices say about timing and amounts

Calamos issued separate notices for each fund listing the upcoming payment date, the record/ex-dividend date and the dollar amount per share. The release covers CHI, CHY, CSQ, CGO, CHW, CCD and CPZ and makes clear the distributions are monthly. For most funds the declared per-share amount is unchanged from the prior month; the exception is CSQ, which the firm said will increase its monthly distribution. The company also provided the exact pay and record dates for each fund so shareholders and brokers know when the cash will move and when shares trade ex-dividend.

Because distribution notices are technical documents, they list an exact dollar figure for each fund’s monthly payout and the key dates. Investors should check those notices for the precise cents-per-share number and the single payment date that applies to their holdings. The takeaway: payments are coming on schedule, and CSQ’s stated payout will be higher than last month’s.

Where the cash is coming from and what that means for taxes

Along with the payment numbers, Calamos provided the required disclosure about distribution sources. The notices break down whether the payouts will come from net investment income, realized capital gains, a return of capital (ROC) or a mix of these. That breakdown matters because it changes the tax treatment and the fund’s reported yield.

If a distribution is labelled as net investment income, it’s generally taxable as ordinary income in the year it’s paid. If a portion is reported as a return of capital, it’s not taxed immediately; instead it reduces your cost basis in the shares and can lead to larger capital gains when you sell. Realized gains are usually reported as capital gains and may be taxed differently depending on how long the fund held the underlying assets.

Calamos’ notices are intended to give shareholders the information they need to prepare for tax season. For investors who rely on after-tax income, a distribution funded largely by ROC or realized gains can look attractive in the short run but may reduce future yield or raise future capital gains when assets are sold.

How these payouts can move market prices and what income investors should watch

Monthly distributions affect closed-end funds in two main ways. First, the net asset value (NAV) of a fund typically drops by roughly the per-share distribution on the ex-dividend date because the cash leaves the fund. Second, the market price can move differently from NAV. If buyers see the payout as sustainable, the share price may hold; if they think it’s backed by one-offs or ROC, the fund can widen its discount to NAV as sellers step in.

For income-focused investors, here’s a short checklist:

• Confirm the source of the distribution in the fund notice—income, gains, or return of capital.
• Compare the distribution to the fund’s recent earnings and realized gains to judge sustainability.
• Watch the discount/premium to NAV around the ex-dividend date; it can widen quickly.
• Remember managed distribution policies and leverage can increase payout volatility and risk.

In plain terms: a raised payout is good news for cash flow, but not all raises are equal. If it’s backed by recurring income, it’s stronger; if it’s supported by one-time gains or ROC, it’s less durable.

Where to find the official notices and next steps for shareholders

Calamos posted these distribution notices and the required disclosures through its investor relations channels and the fund press release. Shareholders should review the specific notice for the fund they own to see the exact cents-per-share amount and the listed payment and record dates. Brokers will handle the cash payment or reinvestment according to the shareholder’s chosen dividend election.

Expect the fund to report the final tax-character breakdown after month-end. For now, verify your account election (cash vs reinvest), note the ex-dividend date so you understand when NAV will adjust, and keep the notice for tax reporting—your 1099 next year will reflect the final tax character of these payments. Given the mix of possible sources and the use of leverage in many closed-end funds, treat these distributions as part of a broader income strategy, not a guaranteed income stream.

Sources

• prnewswire.com