In the third quarter of 2025, the Calamos Total Return Bond Fund showcased impressive results, closely aligning with the broader investment-grade bond market's upward trend. This positive performance was largely attributable to an unexpectedly resilient economic environment, a reduction in tariff-related anxieties, and the recommencement of the Federal Reserve's monetary easing initiatives. The fund's strategic positioning, maintaining a duration neutral stance against its benchmark, proved effective in navigating these conditions, indicating a well-managed approach in anticipation of sustained moderate economic growth into 2026.
The Bloomberg US Aggregate Index, a key indicator for the US investment-grade bond market, posted a 2.03% return during the third quarter of 2025. This benchmark's robust showing underscored a favorable climate for fixed-income assets. Investors responded positively to indicators of economic strength and stability, which contributed to an improved outlook for credit markets.
Credit markets experienced a period of strong performance in the third quarter. This was bolstered by a series of positive developments, including an economy that defied expectations with its resilience, a significant reduction in concerns over international trade tariffs, and the Federal Reserve's decision to resume its monetary easing program. These factors collectively created an environment conducive to growth and stability in the bond sector, allowing credit instruments to flourish.
For the quarter ending September 30, 2025, the Calamos Total Return Bond Fund delivered a return of 2.05% for its Class I shares at Net Asset Value (NAV). This slightly outperformed the Bloomberg US Aggregate Bond Index, which recorded a gain of 2.03% over the same period. The fund's ability to match and even slightly exceed the benchmark reflects its effective management and strategic asset allocation in a dynamic market.
A core component of the Calamos Total Return Bond Fund's strategy was its duration neutral positioning relative to its benchmark. This approach aims to minimize interest rate risk, ensuring that the fund's sensitivity to changes in interest rates is comparable to that of the overall market. Such a strategy is particularly prudent in periods of evolving monetary policy, helping to protect capital while still capturing market gains.
Looking ahead, the US economy is projected to sustain a path of slow but steady growth throughout 2026. This outlook is underpinned by a respectable, albeit gradually softening, job market and consistent consumer spending. These foundational elements are expected to provide ongoing support for fixed-income markets, contributing to a stable environment for bond investments and aligning with the fund's strategic objectives.
The Calamos Total Return Bond Fund's performance in the third quarter of 2025 highlights a period of significant positive returns within the investment-grade bond market. The fund capitalized on a resilient economic landscape, favorable shifts in monetary policy, and diminishing tariff anxieties, showcasing its capacity for generating strong outcomes. With a prudent duration neutral strategy and an optimistic view on continued economic growth, the fund is well-positioned for future stability and performance.