ETF Education Report: Calamos Dynamic Convertible and Income Fund (CCD)

What this ETF is trying to do

The Calamos Dynamic Convertible and Income Fund (ticker: CCD) is an exchange-traded fund (ETF) listed on the NASDAQ. While the specific investment strategy is not detailed in the provided data, it is categorized as an ETF that focuses on providing income to its investors.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For CCD, the one-year price return was approximately 9.21%. The year-to-date (YTD) price return was approximately 13.35%.

• Total Return: This is a more complete measure because it includes both the share price changes and the distributions (cash payments) made to investors. For CCD, the one-year total return was approximately 20.84%, and the YTD total return was approximately 20.92%.

To see how the price has moved, we can look at an estimated price from roughly one year ago. The estimated price was $21.65, and the current price is $23.65.

Income and distribution explanation

This ETF is known for providing regular cash payments, known as distributions. The distribution yield for CCD is approximately 9.90%. This number describes the cash distributions relative to the current ETF price.

The fund usually pays out monthly, with 12 payments recorded over the last year. Based on the data, these payments most often occur on Fridays. It is important to remember that a high distribution yield does not mean the investor earned that same percentage as their total return; you must look at the "total return" figure to see the full picture.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Some investors worry that high distributions might come at the expense of the fund's value.

However, for CCD, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has shown positive price returns over the one-year, three-year, and year-to-date periods.

• The total return figures (which include distributions) are higher than the price return figures, showing the impact of the cash payments.

• The erosion-risk measurements suggest the share price has not shown signs of typical erosion.

Cons

• The data provided does not list any specific Top Holdings, so the exact companies held by the fund are unknown from this report.

Beginner takeaway

When studying CCD, notice the difference between the share price movement and the total return. While the share price grew by about 9.21% over the last year, the total return was much higher at approximately 20.84% because of the cash distributions. Always remember that high yields are one part of an investment, and looking at total return provides a clearer view of overall performance.