Calamos Antetokounmpo Global Sustainable Equities ETF (SROI) Celebrates One-Year Anniversary on NYSE ARCA

Understanding Calamos and What Makes SROI Different

To fully appreciate SROI, it’s essential to understand the firm behind it, Calamos Antetokounmpo Asset Management (CGAM) and its parent firm, Calamos Investments. Often, ETF investors may bypass the step of analyzing the management firm during their due diligence, especially for specialized strategies like ESG. However, considering the firm’s background, philosophy, and expertise is crucial for investments targeting specific niches.

The parent firm, is a global investment firm renowned for its prowess in alternatives, convertibles, managing volatility, and private credit. Currently, the firm manages some $35.5 Billion in assets, including $16 billion in liquid alternatives.

But beyond these areas, Calamos has also established a significant presence in sustainable investing, demonstrating a commitment to integrating ethical considerations into its investment processes.

Tony and the sustainable investment team’s journey into ESG investing began over 25 years ago, in 1997, when they launched one of the industry’s first fossil-fuel-free funds. Moreover, CGAM distinguishes itself today by donating a portion of its profits to charitable causes, further underlining its commitment to societal and environmental betterment.

“Our job as fiduciaries is to identify what we call ‘Global Leaders’ with the primary objective of generating benchmark beating returns with lower-than-benchmark volatility,” Tursich says. “Global leaders are companies that are compounding economic profits over time, have better future growth potential than their industry peers, and are also managing their material non-financial risks to improve the chances that strong operating fundamentals and market leadership will continue into the foreseeable future.”

Understanding SROI

SROI is a unique collaboration between Calamos Investments and Giannis Antetokounmpo, embodied in the Calamos Antetokounmpo Asset Management LLC (CGAM), a 50/50 joint venture.

Giannis Antetokounmpo, the two-time NBA MVP Milwaukee Bucks Greek-Nigerian player known for his passion for sustainable investing, played a key role in shaping the initial strategy for the fund.

The fund’s strategy is centered on investing in high-quality companies that demonstrate strong financial metrics across U.S., developed, and emerging markets. It is benchmarked against the MSCI ACWI Index.

With 112 holdings, SROI currently showcases a portfolio with exceptional fundamentals, highlighted by an average return on equity (ROE) of 37.57%, return on invested capital (ROIC) of 21.4%, and gross margin of 56.19% as of January 31, 2024.

A ROE of 37.57% indicates the fund's companies are highly profitable, earning $37.57 for every $100 of shareholder equity. A ROIC of 21.4% reflects efficient use of capital, generating $21.40 in profit for every $100 invested. Finally, a gross margin of 56.19% shows the companies maintain a high profitability on sales, keeping 56.19% of revenue as profit before operating expenses.

These metrics underscore the fund’s focus on companies with robust financial health and strong operational efficiency, indicative of a pronounced quality tilt in its investment approach.

While its sector composition mirrors that of the MSCI ACWI Index to some extent, SROI intentionally forgoes the energy sector, reflecting the team’s view of the sector’s diminishing prospects over time. Additionally, the fund has a slightly lower exposure to the U.S. market at 50%, compared to approximately 60% for the MSCI ACWI as of January 31, 2024, offering a more globally diversified investment option.

Beyond financial factors, SROI also incorporates a rigorous screening for governance, ecological impact, and human development factors, aligning its investments with broader ESG principles.

“We combine fundamental financial analysis with material non-financial analysis in order to make better investment decisions and build stronger, more durable portfolios,” Tursich says.

What truly distinguishes SROI from typical ESG ETFs is its strategic approach to sustainable investing. Instead of relying solely on exclusionary or generic screening processes to filter investments, SROI benefits from Calamos’ in-depth research capabilities.

“We look at a company’s carbon emissions & waste streams, raw materials & water use, employee relations, and the quality and integrity of management and the board of directors,” Tursich says. “It gives us a more holistic and complete view of risk and opportunity—to be clear, we do this because we think it makes us better investors and improves our chances for outperformance with less risk over time.”

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.

Calamos Financial Services LLC, Distributor

Before investing, carefully consider the fund's investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.

Environmental, social and governance (ESG) is based on the premise of investing in companies that have good environmental records, are ethically run and have a positive social impact.

An investment in the Fund(s) is subject to risks, and you could lose money on your investment in the Fund(s). There can be no assurance that the Fund(s) will achieve its investment objective. Your investment in the Fund(s) is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the Fund(s) can increase during times of significant market volatility. The Fund(s) also has specific principal risks, which are described below. More detailed information regarding these risks can be found in the Fund's prospectus.

The principal risks of investing in the Calamos Antetokounmpo Global Sustainable Equities ETF include: equity securities risk consisting of market prices declining in general, growth stock risk consisting of potential increased volatility due to securities trading at higher multiples, value stock risk, foreign securities risk, forward foreign currency contract risk, emerging markets risk, small and mid-sized company risk and portfolio selection risk. As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities, including fluctuations in currency exchange rates, increased price volatility and difficulty obtaining information. In addition, emerging markets may present additional risk due to potential for greater economic and political instability in less developed countries.

The MSCI ACWI Index (Net) is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets and emerging markets. The index is calculated in both US dollars and local currencies. Net return basis accounts for the impact of taxes and other costs associated with holding the constituent securities in the index.

The Fund's ESG policy could cause it to perform differently compared to similar funds that do not have such a policy. The application of the social and environmental standards of Calamos Advisors may affect the Fund's exposure to certain issuers, industries, sectors, and factors that may impact the relative financial performance of the Fund-positively or negatively-depending on whether such investments are in or out of favor.

Calamos Antetokounmpo Asset Management LLC ("CGAM"), an investment adviser registered with the SEC under the Investment Advisers Act of 1940, serves as the Fund's adviser ("Adviser"). CGAM is jointly owned by Calamos Advisors LLC and Original C Fund, LLC, an entity whose voting rights are wholly owned by Original PE, LLC which, in turn, is wholly owned by Giannis Sina Ugo Antetokounmpo.

Mr. Antetokounmpo serves on the Adviser's Board of Directors and has indirect control of half of the Adviser's Board.

Mr. Antetokounmpo is not a portfolio manager of the Fund and will not be involved in the day-to-day management of the Fund's investments, and neither Original C nor Mr. Antetokounmpo shall provide any "investment advice" to the Fund. Mr. Antetokounmpo provided input in selecting the initial strategy for the Fund.

Mr. Antetokounmpo will be involved with marketing efforts on behalf of the Adviser.

If Mr. Antetokounmpo is no longer involved with the Fund or the Adviser then "Antetokounmpo" will be removed from the name of the Fund and the Adviser. Further, shareholders would be notified of any change in the name of the Fund or its strategy.

Giannis Sina Ugo Antetokounmpo is the majority shareholder of Original C, with a 68% ownership interest.

The Adviser is jointly owned and controlled by Calamos Advisors LLC and, indirectly, by Mr. Antetokounmpo, a well-known professional athlete. Unanticipated events, including, without limitation, death, adverse reputational events or business disputes, could result in Mr. Antetokounmpo no longer being associated or involved with the Adviser. Any such event could adversely impact the Fund and result in shareholders experiencing substantial losses.