<PAGE>
PROSPECTUS June 24, 1997
CALAMOS FAMILY OF FUNDS(R)
CLASS A SHARES AND CLASS C SHARES
<TABLE>
<C> <S>
CONVERTIBLE FUND Seeks current income. Growth is a secondary
objective that the Fund also considers when
consistent with its objective of current income.
- -------------------------------------------------------------------------------
GROWTH AND INCOME FUND Seeks high long-term total return through
capital appreciation and current income derived
from a diversified portfolio of convertible,
equity and fixed-income securities.
- -------------------------------------------------------------------------------
STRATEGIC INCOME FUND Seeks high current income consistent with
stability of principal, primarily through
investment in convertible securities and
employing short selling to enhance income and
hedge against market risk.
- -------------------------------------------------------------------------------
GROWTH FUND Seeks long-term capital growth.
- -------------------------------------------------------------------------------
GLOBAL GROWTH AND INCOME FUND Seeks high long-term total return through
capital appreciation and current income derived
from a globally diversified portfolio of
convertible, equity and fixed-income securities.
</TABLE>
MINIMUM INITIAL INVESTMENT: $500
Subsequent investment: $50
INDIVIDUAL RETIREMENT ACCOUNT (IRA) PLAN AVAILABLE
----------------
ALTHOUGH EACH FUND IS PERMITTED TO INVEST WITHOUT LIMIT IN DEBT SECURITIES
RATED BELOW INVESTMENT GRADE, COMMONLY KNOWN AS "JUNK BONDS," ONLY STRATEGIC
INCOME FUND INTENDS TO INVEST AS MUCH AS 35% OR MORE OF ITS NET ASSETS IN SUCH
SECURITIES. Those securities entail greater risks, including default risks,
than those found in higher rated securities. Investors should carefully
consider those risks before investing. See "Debt Securities."
This prospectus contains information you should know before investing in the
funds. Please read it carefully and retain it for future reference. A
statement of additional information dated the date of this prospectus and
containing more detailed information about the funds has been filed with the
Securities and Exchange Commission and (together with any supplements thereto)
is incorporated herein by reference. The statement of additional information
and the most recent financial statements are available without charge at the
address and telephone numbers set forth above.
SHARES OF THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT
OR ANY GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
KEY FEATURES
INVESTMENT OBJECTIVES
The investment objectives of the Funds are stated on the cover of this
prospectus. There can be no assurance that a Fund will achieve its investment
objective.
INVESTMENT RISKS
The Funds are designed for long-term investors who can accept the fluctuations
in portfolio value and other risks associated with seeking high current income
or long-term capital appreciation through investments in securities. The
Funds' investments in debt securities rated below investment grade, foreign
securities and options and futures, and use of short sales also present risks.
The Funds may have high portfolio turnover. See "Common Investment Practices"
and "Risk of Investment" for a more complete description of the risks of
investing in each of the Funds.
DIVIDENDS AND CAPITAL GAINS
Growth Fund pays income dividends annually. Each other Fund pays income
dividends quarterly. Capital gains, if any, are distributed by each Fund at
least annually. Distributions are automatically reinvested in additional
shares at net asset value unless payment in cash is requested. See "Dividends
and Distributions."
PURCHASES AND REDEMPTIONS
Class A shares of each Fund are offered with a front-end sales charge, and
Class C shares of each Fund are offered without a sales charge, as described
below:
CLASS A SHARES Offered at net asset value plus a maximum sales charge of 4.75%
of the offering price, with reduced sales charges on investments of $50,000
or more and no sales charge on purchases of $1 million or more or on
reinvestment of dividends. Class A shares are subject to an annual .25%
service fee and a .25% distribution fee.
CLASS C SHARES Offered at net asset value without an initial or contingent
deferred sales charge if held for at least one year, but subject to an
annual .25% service fee and a .75% distribution fee, and, in the case of
shares redeemed within one year, a 1% contingent deferred sales charge.
Each class of shares of a Fund represents interests in the same portfolio of
investments of the Fund. The minimum initial investment in Class A shares or
Class C shares of a Fund is $500 and subsequent investments in the Fund must
be at least $50. Shares are redeemable at net asset value, which may be more
or less than original cost; however, if Class C shares, or Class A shares for
which the initial purchase price was $1 million or more, on which no sales
charge was imposed, are redeemed within one year, a deferred sales charge of
1% will be imposed. See "How to Purchase Shares" and "How to Redeem Shares."
EXPENSES OF THE FUNDS
Each Fund pays a management fee to the investment adviser. Each Fund also
compensates the Distributor, as expenses allocable to the Class A shares and
the Class C shares, for shareholder servicing and for services in distributing
those shares. See "Management of the Funds."
INVESTMENT ADVISER
Calamos Asset Management, Inc.(R) ("CAM" or the "Adviser").
DISTRIBUTOR
Calamos Financial Services, Inc.(R) ("CFS" or the "Distributor")
2
<PAGE>
EXPENSES
The following tables show certain information concerning shareholder
transaction expenses and projected annual fund operating expenses for Class A
shares and Class C shares of the Funds:
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------
Global
Growth and Strategic Growth and
Convertible Income Income Growth Income
Fund Fund Fund Fund Fund
----------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum sales charge on
purchases
(as a percentage of of-
fering price) (b)....... 4.75% 4.75% 4.75% 4.75% 4.75%
Maximum sales charge on
reinvested dividends.... None None None None None
Deferred sales charge
(c)..................... None None None None None
Exchange fee............. None None None None None
Redemption fees (d)...... None None None None None
ANNUAL FUND OPERATING EX-
PENSES
(AS A PERCENTAGE OF AV-
ERAGE NET ASSETS)
Management fees.......... .75% .75% .75% 1.00% 1.00%
12b-1 fees (e)........... .50 .50 .50 .50 .50
Other expenses (after ex-
pense reimbursement).... .25 .75(a) .85(a) .50(a) .50(a)
---- ---- ---- ---- ----
Total Fund operating ex-
penses
(after expense
reimbursement).......... 1.50% 2.00% 2.10%(a) 2.00% 2.00%
<CAPTION>
Class C Shares
------------------------------------------------------
Global
Growth and Strategic Growth and
Convertible Income Income Growth Income
Fund Fund Fund Fund Fund
----------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum sales charge on
purchases
(as a percentage of of-
fering price) (b)....... None None None None None
Maximum sales charge on
reinvested dividends.... None None None None None
Deferred sales charge
(c)..................... None None None None None
Exchange fee............. None None None None None
Redemption fees (d)...... None None None None None
ANNUAL FUND OPERATING EX-
PENSES
(AS A PERCENTAGE OF AV-
ERAGE NET ASSETS)
Management fees.......... .75% .75% .75% 1.00% 1.00%
12b-1 fees (e)........... 1.00 1.00 1.00 1.00 1.00
Other expenses (after ex-
pense reimbursement).... .25(a) .75(a) .85(a) .50(a) .50(a)
---- ---- ---- ---- ----
Total Fund operating ex-
penses
(after expense
reimbursement).......... 2.00% 2.50% 2.60%(a) 2.50% 2.50%
</TABLE>
- ------------------------------
(a) Because Global Growth and Income Fund is newly organized, its "Other
expenses" reflect an estimate. The Adviser has voluntarily undertaken to
limit the annual ordinary operating expenses of each class of shares of
each Fund, as a percentage of the average net assets of the class, to
2.00% for Class A shares and 2.50% for Class C shares through August 31,
1998, and the percentages shown for "Other expenses" take into account
expected expense reimbursements. Absent that limitation, the "Other
expenses" and "Total
3
<PAGE>
Fund operating expenses," respectively, for Class A shares of the Funds
other than Convertible Fund would be .85% and 2.10% for Growth and Income
Fund; 3.85% and 5.10% for Strategic Income Fund; 1.20% and 2.70% for Growth
Fund; and 2.30% and 3.80% for Global Growth and Income Fund. In the case of
Class C shares of the Funds other than Convertible Fund, absent the expense
limitation, the "Other expenses" and "Total Fund operating expenses,"
respectively, would have been 1.35% and 3.10% for Growth and Income Fund;
3.85% and 5.60% for Strategic Income Fund; 1.20% and 3.20% for Growth Fund;
and 2.30% and 4.30% for Global Growth and Income Fund. See "Management of
the Funds--The Adviser." Each Fund may incur expenses for dividends paid on
short positions that are not subject to the Adviser's expense limitation and
that are not included in "Other expenses." Only Strategic Income Fund had
such expenses, which amounted to .10% of average net assets.
(b) Reduced sales charges apply to purchases of Class A shares of $50,000 or
more. See "How to Purchase Shares--Offering Price."
(c) With respect to Class C shares, or Class A shares for which the initial
purchase price was $1 million or more, on which no initial sales charge was
imposed, if any of such shares are redeemed within one year after purchase
(other than by reinvestment of dividends or distributions), determined on a
first-in, first-out basis, a contingent deferred sales charge of 1% of the
purchase price will be imposed.
(d) A service charge of $15 is deducted from proceeds of redemption paid by
wire.
(e) The Trust's Distribution Plan, as permitted under Rule 12b-1, provides for
payment by each Fund of a service fee of .25%, and a distribution fee of
.25% in the case of Class A shares and .75% in the case of Class C shares,
of the average daily net assets of the respective class. Consequently,
long-term shareholders eventually may pay more than the economic equivalent
of the maximum initial charges permitted by the National Association of
Securities Dealers.
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming (1) a 5%
annual return as required by the Securities and Exchange Commission for
purposes of this example and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Class A Shares
----------------------
One Three Five Ten
Year Years Years Years
---- ----- ----- -----
<S> <C> <C> <C> <C>
Convertible Fund......................................... $62 $93 $125 $218
Growth and Income Fund................................... 67 107 150 269
Strategic Income Fund.................................... 68 110 155 279
Growth Fund.............................................. 67 107 150 269
Global Growth and Income Fund............................ 67 107 150 269
<CAPTION>
Class C Shares
----------------------
One Three Five Ten
Year Years Years Years
---- ----- ----- -----
<S> <C> <C> <C> <C>
Convertible Fund......................................... $20 $62 $107 $231
Growth and Income Fund................................... 25 78 133 284
Strategic Income Fund.................................... 26 81 138 293
Growth Fund.............................................. 25 78 133 284
Global Growth and Income Fund............................ 25 78 N/A N/A
</TABLE>
4
<PAGE>
The purpose of these tables and the examples is to assist you in understanding
the various costs and expenses that an investor in a Fund bears, directly or
indirectly. The examples assume that the percentage amounts listed under
Annual Fund Operating Expenses remain the same through each of the periods,
all income dividends and capital gains distributions are reinvested in
additional shares of the Funds, and each Fund's net assets remain constant.
The examples should not be considered a representation of past or future
expenses; the actual expenses of the Funds and the annual rates of return may
be greater or less than those shown. Although information such as that shown
in the example is useful in reviewing the expenses of the Funds and in
providing a basis for comparison of those expenses with the expenses of other
mutual funds, it should not be used for comparison with other investments
using different assumptions or time periods.
----------------
FINANCIAL HIGHLIGHTS
The tables below reflect the results of the operations of Class A shares and
Class C shares of each Fund. Information in the tables was audited by Ernst &
Young LLP, independent auditors. These tables should be read in conjunction
with each Fund's financial statements and notes thereto. The Funds' annual
report, which may be obtained from the Trust upon request at no charge,
contains additional performance information.
5
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD IS AS FOLLOWS:
CALAMOS CONVERTIBLE FUND
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------------------
Eleven
Year Year Months
Ended Ended Ended
March 31, March 31, March 31, Year Ended April 30,
----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988(b)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 14.49 $ 12.41 $ 13.04 $ 13.96 $ 12.72 $ 11.39 $ 10.29 $ 10.73 $ 10.56 $ 11.94
Income from investment
operations:
Net investment income .36 .40 .38 .40 .42 .41 .49 .60 .59 .62
Net realized and
unrealized gain
(loss) on investments 1.39 3.06 (.01) .53 1.32 1.43 1.25 (.32) .14 (1.24)
----------------------------------------------------------------------------------------------
Total from investment
operations 1.75 3.46 .37 .93 1.74 1.84 1.74 .28 .73 (.62)
----------------------------------------------------------------------------------------------
Less distributions:
Dividends from net in-
vestment income (.45) (.31) (.32) (.39) (.40) (.45) (.52) (.63) (.56) (.66)
Dividends from net re-
alized
capital gains (1.11) (1.07) (.56) (1.46) (.10) - - - - (.10)
Dividends in excess of
net
realized capital gains - - (.12) - - - - - - -
Distributions from paid
in capital - - - - - (.06) (.12) (.09) - -
----------------------------------------------------------------------------------------------
Total distributions (1.56) (1.38) (1.00) (1.85) (.50) (.51) (.64) (.72) (.56) (.76)
----------------------------------------------------------------------------------------------
Net asset value, end of
period $ 14.68 $ 14.49 $ 12.41 $ 13.04 $ 13.96 $ 12.72 $ 11.39 $ 10.29 $ 10.73 $ 10.56
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Total return (a) 12.9% 28.8% 3.2% 6.5% 14.0% 16.5% 17.7% 2.4% 7.2% (5.1%)
Ratios and supplemental
data:
Net assets, end of pe-
riod (000) $35,950 $24,460 $16,646 $17,023 $17,213 $16,940 $13,953 $18,664 $21,270 $23,194
Ratio of expenses to
average
net assets 1.5% 1.5% 1.6%* 1.6% 1.7% 1.2% 1.2% 1.1% 1.1% 1.2%
Ratio of net investment
income
to average net assets 2.8% 3.0% 3.3%* 2.8% 3.2% 3.4% 4.3% 5.5% 5.6% 5.6%
</TABLE>
<TABLE>
<CAPTION>
Class C
--------------------------------
July 5, 1996 through
March 31, 1997
- ----------------------------------------------------
<S> <C>
Net asset value, beginning of
period $13.87
Income from investment opera-
tions:
Net investment income .30
Net realized and unrealized
gain (loss) on investments 1.21
------
Total from investment opera-
tions 1.51
Less distributions:
Dividends from net investment
income (.25)
Dividends from net realized
capital gains (.50)
======
Total distribution (.75)
------
Net asset value, end of period $14.63
======
Total return (a) 11.1%
Ratios and supplemental data:
Net assets, end of period
(000) $3,094
Ratio of expenses to average
net assets 2.0%*
Ratio of net investment in-
come to average net assets 2.7%*
- ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Eleven
Year Year Months
Ended Ended Ended
March 31, March 31, March 31, Year Ended April 30,
------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988(b)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio turnover rate 52.3% 65.2% 42.1% 73.1% 73.1% 83.8% 63.2% 93.4% 84.7% 55.5%
Average commission .0610 .0633 .0936 .0952 .1000 .0966 N/A N/A N/A N/A
</TABLE>
- -----------------------------
(a) Total return is not annualized and does not reflect the effect of sales
charges.
(b) Calamos Asset Management, Inc. became the Fund's investment adviser on
September 1, 1987.
* Annualized.
6
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD IS AS FOLLOWS:
CALAMOS GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------------------------
Eleven Sept. 22,
Year Year Months 1988
Ended Ended Ended to
March 31, March 31, March 31, Year Ended April 30, April 30,
- --------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.62 $12.68 $12.97 $13.90 $13.57 $11.54 $10.46 $10.49 $10.00
Income from investment
operations:
Net investment income .34 .37 .35 .31 .35 .29 .31 .33 .38
Net realized and
unrealized gain on
investments 1.52 3.70 (0.02) .34 1.97 2.02 1.09 .09 .49
----------------------------------------------------------------------------------
Total from investment
operations 1.86 4.07 .33 .65 2.32 2.31 1.40 .42 .87
----------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income (.28) (.42) (.32) (.29) (.36) (.28) (.32) (.28) (.38)
Dividends from net
realized
capital gains (1.68) (.71) (.30) (1.29) (1.63) - - (.17) -
----------------------------------------------------------------------------------
Total distributions (1.96) (1.13) (.62) (1.58) (1.99) (0.28) (0.32) (0.45) (0.38)
----------------------------------------------------------------------------------
Net asset value, end of
period $15.52 $15.62 $12.68 $12.97 $13.90 $13.57 $11.54 $10.46 $10.49
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Total return (b) 12.9% 33.0% 2.8% 4.5% 18.8% 20.2% 13.4% 3.8% 9.0%
Ratios and supplemental
data:
Net assets, end of
period (000) $8,408 $5,813 $3,853 $4,663 $3,655 $2,694 $1,821 $1,345 $ 732
Ratio of expenses to
average net assets (a) 2.0% 2.0% 2.0%* 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%*
Ratio of net investment
income to average net
assets (a) 2.4% 2.6% 3.0%* 2.3% 2.6% 2.3% 2.9% 3.0% 4.8%*
</TABLE>
<TABLE>
<CAPTION>
Class C
--------------------
August 5, 1996 through
March 31, 1997
- ----------------------------------------------------
<S> <C>
Net asset value, beginning
of period $14.52
Income from investment oper-
ations:
Net investment income .26
Net realized and unrealized
gain (loss) on
investments 1.30
------
Total from investment op-
erations 1.56
Less distributions:
Dividends from net invest-
ment income (.25)
Dividends from net realized
capital gains (.33)
------
Total distributions (.58)
------
Net asset value, end of pe-
riod $15.50
======
Total return (b) 10.8%
Ratios and supplemental da-
ta:
Net assets, end of period
(000) $ 330
Ratio of expenses to aver-
age net assets (c) 2.5%*
Ratio of net investment in-
come to average
net assets (c) 2.4%*
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Eleven Sept. 22,
Year Year Months 1988
Ended Ended Ended to
March 31, March 31, March 31, Year Ended April 30, April 30,
- ---------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio turnover rate 91.5% 86.4% 84.7% 155.2% 132.3% 111.6% 103.6% 103.0% 85.0%*
Average commission .0609 .0604 .0924 .1002 .1010 .1004 N/A N/A N/A
</TABLE>
- ------------------------------
(a) After the reimbursement and waiver of expenses by the Adviser equivalent to
0.1%, 0.1%, 0.2%*, 0.1%, 0.5%, 0.5%, 1.7%, 2.3% and 8.4%* of average net
assets, respectively.
(b) Total return is not annualized and does not reflect the effect of sales
charges.
(c) After the reimbursement and waiver of expenses by the Adviser equivalent to
0.6%* of average net assets.
* Annualized.
7
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD IS AS FOLLOWS:
CALAMOS STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
Eleven Sept. 4,
Year Year Months 1990
Ended Ended Ended to
March, March 31, March 31, Year Ended April 30, April 30,
-------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $11.07 $10.13 $10.71 $10.96 $10.58 $10.60 $10.00
Income from investment
operations:
Net investment income .50 .53 .40 .36 .39 .59 .40
Net realized and
unrealized gain (loss)
on investments .29 .83 (.43) .11 .79 .46 .61
-------------------------------------------------------------
Total from investment
operations .79 1.36 (.03) .47 1.18 1.05 1.01
-------------------------------------------------------------
Less distributions:
Dividends from net in-
vestment income (.68) (.42) (.36) (.41) (.41) (.51) (.40)
Dividends from net re-
alized capital gains (.37) - (.19) (.31) (.39) (.56) (.01)
-------------------------------------------------------------
Total distributions (1.05) (.42) (.55) (.72) (.80) (1.07) (.41)
-------------------------------------------------------------
Net asset value, end of
period $10.81 $11.07 $10.13 $10.71 $10.96 $10.58 $10.60
=============================================================
Total return (c) 7.4% 13.60% (0.2%) 4.2% 11.5% 10.5% 10.2%
Ratios and supplemental
data:
Net assets, end of pe-
riod (000) $1,317 $1,620 $2,211 $3,004 $2,522 $1,410 $595
Ratio of expenses to
average net assets
(a)(b) 2.1% 2.2% 2.4%* 2.2% 2.3% 2.5% 2.6%*
Ratio of net investment
income to average net
assets (a) 4.3% 4.6% 4.0%* 3.2% 3.9% 5.3% 6.6%*
Portfolio turnover rate 152.5% 81.1% 59.9% 79.4% 73.8% 97.0% 108.9%*
Average commission .0711 .0636 .0966 .0997 .1056 .1200 N/A
</TABLE>
- ------------------------------
(a) After the reimbursement and waiver of expenses by the Adviser equivalent to
3.0%, 1.6%, 1.1%*, 1.0%, 0.7%,1.25% and 4.8%* of average net assets,
respectively.
(b) Includes 0.1%, 0.2%, 0.4%*, 0.2%, 0.3%, 0.5% and 0.6%*, respectively,
related to dividend expenses on short positions.
(c) Total return is not annualized and does not reflect the effect of sales
charges.
* Annualized.
8
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD IS AS FOLLOWS:
CALAMOS GROWTH FUND
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------
Eleven
Year Year Months Sept. 4,
Ended Ended Ended 1990 to
March 31, March 31, March 31, Year Ended April 30, April 30,
---------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $15.74 $14.18 $14.57 $13.95 $14.04 $12.48 $10.00
Income from investment
operations:
Net investment income
(loss) (.09) (.09) .02 .01 (.02) (.01) .07
Net realized and
unrealized gain (loss)
on investments 3.14 4.69 (.28) 1.21 .20 1.60 2.50
---------------------------------------------------------------
Total from investment
operations 3.05 4.60 (.26) 1.22 .18 1.59 2.57
---------------------------------------------------------------
Less distributions:
Dividends from net in-
vestment income - (.07) - (.01) - - (0.08)
Dividends from net re-
alized capital gains (1.75) (2.97) (.13) (.59) (.27) (.03) (0.01)
---------------------------------------------------------------
Total distributions (1.75) (3.04) (.13) (.60) (.27) (.03) (0.09)
---------------------------------------------------------------
Net asset value, end of
period $17.04 $15.74 $14.18 $14.57 $13.95 $14.04 $12.48
===============================================================
Total return (b) 19.1% 35.2% (1.8%) 8.9% 1.4% 12.7% 25.8%
Ratios and supplemental
data:
Net assets, end of pe-
riod (000) $6,635 $2,866 $1,791 $2,089 $1,861 $1,802 $ 862
Ratio of expenses to
average net assets (a) 2.0% 2.0% 2.0%* 2.0% 2.0% 2.0% 2.0%*
Ratio of net investment
income (loss) to
average net
assets (a) (1.3)% (0.8)% 0.2%* 0.1% (0.1)% (0.1)% 0.8%*
</TABLE>
<TABLE>
<CAPTION>
Class C
-------------------------
September 3, 1996 through
March 31, 1997
- ----------------------------------------------------
<S> <C>
Net asset value, begin-
ning of period $ 17.63
Income from investment
operations:
Net investment income
(loss) (.07)
Net realized and
unrealized gain (loss)
on
investments 1.07
-------
Total from investment op-
erations 1.00
-------
Less distributions:
Dividends from net real-
ized capital gains (1.65)
-------
Net asset value, end of
period $ 16.98
=======
Total return (b) 5.4%
Ratios and supplemental
data:
Net assets, end of pe-
riod (000) $ 8
Ratio of expenses to av-
erage net assets (c) 2.5%*
Ratio of net investment
income (loss) to aver-
age
net assets (c) (1.9)%*
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------------
<CAPTION>
Eleven
Year Year Months Sept. 4,
Ended Ended Ended Year Ended 1990 to
March 31, March 31, March 31, April 30, April 30,
---------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio turnover rate 173.9% 252.4% 104.3% 87.3% 56.8% 47.3% 15.8%*
Average Commission .0614 .0608 .0910 .0996 .1011 .1098 N/A
</TABLE>
- ------------------------------
(a) After the reimbursement and waiver of expenses by the Adviser equivalent to
0.7%, 1.2%, 1.6%*, 1.1%, 0.7%, 0.8%, and 4.5%* of average net assets
respectively.
(b) Total return is not annualized and does not reflect the effect of sales
charges.
(c) After the reimbursement and waiver of expenses by the Adviser equivalent to
0.6% of average net assets.
* Annualized.
9
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD IS AS FOLLOWS:
CALAMOS GLOBAL GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
Class A
-------------------------
September 9, 1996 through
March 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 5.00
Income from investment operations:
Net investment income .04
Net realized and unrealized gain (loss) on invest-
ments .36
------
Total from investment operations .40
------
Less distributions:
Dividends from net investment income (.01)
------
Net asset value, end of period $ 5.39
======
Total return (b) 8.0%
Ratios and supplemental data:
Net assets, end of period (000) $2,926
Ratio of expenses to average net assets (a) 2.0%*
Ratio of net investment income to average net assets
(a) 1.8%*
</TABLE>
<TABLE>
<CAPTION>
Class C
--------------------------
September 24, 1996 through
March 31, 1997
- ------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 5.00
Income from investment operations:
Net investment income .03
Net realized and unrealized gain (loss) on invest-
ments .35
-------
Total from investment operations .38
-------
Less distributions:
Dividends from net investment income (.01)
-------
Net asset value, end of period $ 5.37
=======
Total return (b) 7.6%
Ratios and supplemental data:
Net assets, end of period (000) $ 390
Ratio of expenses to average net assets (a) 2.5%*
Ratio of net investment income to average net as-
sets (a) 1.6%*
- ------------------------------------------------------------------------------
<CAPTION>
September 9, 1996 through
March 31, 1997
- ------------------------------------------------------------------------------
<S> <C>
Portfolio turnover rate 160.4%*
Average Commission .0758
</TABLE>
- ------------------------------
(a) After the reimbursement and waiver of expenses by the Adviser equivalent to
1.8% * of average net assets.
(b) Total return is not annualized and does not reflect the effect of sales
charges.
* Annualized.
10
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Each Fund has a different investment objective and may invest in different
securities. The Funds differ principally in (i) the relative importance each
places on growth potential and current income as considerations in selecting
investments, and (ii) the types of securities selected for investment.
The investment objectives of a Fund may not be changed without the approval of
a "majority of the outstanding" shares of that Fund, as defined in the
Investment Company Act of 1940. There can be no assurance that a Fund will
achieve its objectives.
CONVERTIBLE FUND
Convertible Fund seeks current income. Growth is a secondary objective that
the Fund also considers when consistent with its objective of current income.
The Fund invests in a diversified portfolio of convertible securities,
primarily convertible bonds and convertible preferred stocks. See "Common
Investment Practices--Convertible Securities."
A significant portion of the Fund's portfolio ordinarily is invested in a
number of long-term core positions, selected on the basis of the investment
adviser's assessment of the long-term value of an investment in that issuer.
The Fund's investments are concentrated in investment grade securities, and
the Fund expects to maintain, over the long-term, an average credit quality of
BBB or better. However, debt securities acquired by the Fund may be unrated or
may be rated below investment grade, which would present increased risk. See
"Common Investment Practices--Debt Securities" for more information, including
an analysis of the Fund's past investments in debt securities.
The Fund is substantially invested in convertible securities, including
synthetic convertible securities, under normal market conditions. See "Common
Investment Practices--Convertible Securities." At least 65% of the Fund's
assets ordinarily is invested in "true" convertibles. Any portion of the
Fund's assets not invested in convertible securities as described above may be
invested in non-convertible equity and fixed-income securities, and other
securities as described under "Common Investment Practices."
GROWTH AND INCOME FUND
Growth and Income Fund seeks high long-term total return through capital
appreciation and current income. Under normal market conditions the Fund
invests at least 65% of its total assets in a diversified portfolio of
convertible, equity and fixed-income securities, with equal emphasis on
capital appreciation and current income. See "Common Investment Practices--
Convertible Securities." The Fund's assets not invested in convertible
securities are invested in common stocks that, in the judgment of the
investment adviser, provide opportunities for long-term capital appreciation,
or in other securities as described under "Common Investment Practices."
The Fund generally invests in smaller and medium-sized companies, the
securities of which tend to be more volatile and less liquid than the
securities of larger companies. The debt securities of smaller and medium-
sized companies also are less likely to be rated investment grade, and so the
debt securities acquired by the Fund may be unrated or rated below investment
grade, which would present increased risk. See "Common Investment Practices--
Debt Securities" for more information, including an analysis of the Fund's
past investment in debt securities.
STRATEGIC INCOME FUND
Strategic Income Fund seeks high current income consistent with stability of
principal, primarily through investment in convertible securities and
employing short selling to enhance income and hedge against market risk. Under
normal market conditions, the Fund will invest at least 65% of its assets in
income-producing securities. In furtherance of its objective, the Fund may
also write covered call options and purchase put options and invest in other
types of securities. See "Common Investment Practices."
11
<PAGE>
Any assets of the Fund not invested in convertible securities, common stock
received upon conversion or exchange of convertible securities, or in short
sales with respect to portfolio securities may be invested in other securities
including non-convertible equity and debt securities, options, warrants,
securities of the U.S. Government, its agencies and instrumentalities,
repurchase agreements and money market instruments.
GROWTH FUND
Growth Fund seeks long-term capital growth.
In pursuing Growth Fund's investment objective, the Adviser seeks out
securities that, in its opinion, are undervalued and offer above-average
potential for earnings growth. The selection process emphasizes earnings
growth potential coupled with financial strength and stability. The Adviser
performs its own fundamental analysis, in addition to depending upon
recognized rating agencies and other sources. The portfolio may include
securities of well-established companies with large market capitalizations as
well as small, unseasoned companies. The Fund will not invest more than 5% of
its assets in the securities of unseasoned issuers.
The Adviser anticipates that common stocks will generally afford the best
opportunities for capital growth. However, the Fund may invest in securities
convertible into common stock, preferred stocks, and obligations such as
bonds, debentures and notes that, in the opinion of the Adviser, present
opportunities for capital appreciation. The percentages of Fund assets
invested in various types of securities will vary in accordance with the
judgment of the Adviser. There are no limitations on the amount of the Fund's
assets that may be allocated to the various types of securities, or on the
ratings of debt securities acquired by the Fund. The Fund may also hold cash
and cash equivalents and may invest in other types of securities as described
under "Common Investment Practices."
GLOBAL GROWTH AND INCOME FUND
Global Growth and Income Fund seeks high long-term total return through
capital appreciation and current income. Under normal market conditions the
Fund invests at least 65% of its total assets in a globally diversified
portfolio of convertible, equity and fixed-income securities with equal
emphasis on capital appreciation and current income. Normally the Fund invests
in the securities markets of at least three countries, which may include the
United States.
The Fund generally invests in securities of companies that are medium-sized
and larger relative to the securities markets of the countries in which those
securities are traded. A significant portion of its assets will be invested in
securities of foreign issuers, which may be more volatile and less liquid than
the securities of United States companies. See "Common Investment Practices--
Foreign Securities" for more information.
The Fund's convertible and fixed-income investments are concentrated in
investment grade securities, and the Fund expects to maintain, over the long
term, an average credit quality of BBB or better or, in the case of unrated
securities, of comparable quality as determined by the Adviser. The debt
securities of foreign issuers are less likely to be rated by United States
rating agencies.
COMMON INVESTMENT PRACTICES
GENERAL
In selecting portfolio securities for a Fund, including unrated securities,
the investment adviser performs its own credit analysis in addition to
considering evaluations by recognized rating agencies and other sources,
giving consideration to, among other things, the issuer's financial soundness,
its anticipated cash flow, interest and dividend coverage, asset coverage,
sinking fund provisions, responsiveness to changes in interest rates, business
conditions, and liquidation value relative to the market price of the
security. Securities received by a Fund upon conversion or exercise of
warrants and securities remaining upon the breakup of units or detachments of
warrants may be retained to permit orderly disposition or to establish long-
term holding periods for federal income tax
12
<PAGE>
purposes. Occasionally securities may be purchased on a when-issued or
delayed-delivery basis.
DEBT SECURITIES
In pursuing its investment objectives, each Fund may invest in convertible and
non-convertible debt securities, including lower-rated securities (i.e.,
securities rated BB or lower by Standard & Poor's Corporation ("S&P") or Ba or
lower by Moody's Investor Services, Inc. ("Moody's"), commonly called "junk
bonds") and securities that are not rated. There are no restrictions as to the
ratings of debt securities acquired by a Fund or the portion of a Fund's
assets that may be invested in debt securities in a particular ratings
category, except that no Fund will acquire a security rated below C.
Securities rated BBB or Baa are considered to be medium grade and to have
speculative characteristics. Lower-rated debt securities, in which Strategic
Income Fund intends to invest as much as 35% or more of its assets, are
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal. Investment in medium- or lower-quality debt
securities involves greater investment risk, including the possibility of
issuer default or bankruptcy. An economic downturn could severely disrupt the
market for such securities and adversely affect the value of such securities.
In addition, lower-quality bonds are less sensitive to interest rate changes
than higher-quality instruments and generally are more sensitive to adverse
economic changes or individual corporate developments. During a period of
adverse economic changes, including a period of rising interest rates, issuers
of such bonds may experience difficulty in servicing their principal and
interest payment obligations.
Achievement by each Fund of its investment objectives will be more dependent
on the Adviser's credit analysis than would be the case if the Fund were
investing in higher-quality debt securities. Since the ratings of rating
services (which evaluate the safety of principal and interest payments, not
market risks) are used only as preliminary indicators of investment quality,
the Adviser employs its own credit research and analysis. These analyses may
take into consideration such quantitative factors as an issuer's present and
potential liquidity, profitability, internal capability to generate funds,
debt/equity ratio and debt servicing capabilities, and such qualitative
factors as an assessment of management, industry characteristics, accounting
methodology, and foreign business exposure.
Medium- and lower-quality debt securities may be less marketable than higher-
quality debt securities because the market for them is less broad. The market
for unrated debt securities is even narrower. During periods of thin trading
in these markets, the spread between bid and asked prices is likely to
increase significantly, and a Fund may have greater difficulty selling its
portfolio securities. See "Net Asset Value." The market value of these
securities and their liquidity may be affected by adverse publicity and
investor perceptions.
The table below shows the percentages of net assets (on a dollar-weighted
monthly average basis) invested in debt securities in each ratings category
during the year ended March 31, 1997 for each Fund other than Growth Fund,
which did not invest in debt securities rated below investment grade during
that period.
<TABLE>
<CAPTION>
Global
Growth Growth
and Strategic and
Rating Convertible Income Income Income
Category Fund Fund Fund Fund
---------- ----------- ------ --------- ------
<S> <C> <C> <C> <C>
U.S. Govt. 0.15% 17% 0% 8
AAA -- 0 0 0
AA 0.03 2 0 0
A 0.10 4 9 7
BBB 0.15 11 24 12
BB 0.03 7 6 0
B 0.03 10 32 1
CCC -- 0 0 0
not rated 0.07 3 9 12
</TABLE>
The percentages in the table are based upon ratings by S&P, or by Moody's if
the security was not rated by S&P. A description of the ratings used by S&P
and Moody's is included as an appendix to this prospectus.
13
<PAGE>
CONVERTIBLE SECURITIES
Although each Fund may invest in convertible securities, only Convertible Fund
has a policy of investing at least 65% of its assets in convertible securities
under normal circumstances. Growth and Income Fund and Strategic Income Fund
expect that a significant portion of their respective assets will be invested
in convertible securities, but there is no minimum percentage of their assets
that will be so invested.
The Adviser believes that the characteristics of convertible securities make
them appropriate investments for the Funds. These characteristics include: the
potential for capital appreciation as the value of the underlying common stock
increases; the relatively high yield received from dividend or interest
payments as compared to common stock dividends; and decreased risks of decline
in value relative to the underlying common stock due to their fixed-income
nature. As a result of the conversion feature, however, the interest rate or
dividend preference on a convertible security is generally less than would be
the case if the securities were issued in non-convertible form.
Convertible securities include any corporate debt security or preferred stock
that may be converted into underlying shares of common stock. The common stock
underlying convertible securities may be issued by a different entity than the
issuer of the convertible securities. Convertible securities entitle the
holder to receive interest payments paid on corporate debt securities or the
dividend preference on a preferred stock until such time as the convertible
security matures or is redeemed or until the holder elects to exercise the
conversion privilege.
The value of convertible securities is influenced by both the yield of non-
convertible securities of comparable issuers and by the value of the
underlying common stock. The value of a convertible security viewed without
regard to its conversion feature (i.e., strictly on the basis of its yield) is
sometimes referred to as its "investment value." The investment value of the
convertible security will typically fluctuate inversely with changes in
prevailing interest rates. However, at the same time, the convertible security
will be influenced by its "conversion value," which is the market value of the
underlying common stock that would be obtained if the convertible security
were converted. Conversion value fluctuates directly with the price of the
underlying common stock.
If, because of a low price of the common stock, the conversion value is
substantially below the investment value of the convertible security, the
price of the convertible security is governed principally by its investment
value. If the conversion value of a convertible security increases to a point
that approximates or exceeds its investment value, the value of the security
will be principally influenced by its conversion value. A convertible security
will sell at a premium over its conversion value to the extent investors place
value on the right to acquire the underlying common stock while holding a
fixed income security.
Holders of convertible securities have a claim on the assets of the issuer
prior to the common stockholders but may be subordinated to holders of similar
non-convertible securities of the same issuer. A convertible security may be
subject to redemption at the option of the issuer at a price established in
the governing instrument pursuant to which the convertible security was
issued. If a convertible security held by a Fund is called for redemption, the
Fund will be required to redeem the security, convert it into the underlying
common stock or sell it to a third party. Certain convertible debt securities
may provide a put option to the holder which entitles the holder to cause the
security to be redeemed by the issuer at a premium over the stated principal
amount of the debt security.
"Synthetic" convertible securities, for purposes of this prospectus, are
created by combining separate securities which possess the two principal
characteristics of a true convertible security, i.e., fixed income ("fixed-
income component") and the right to acquire equity securities ("convertible
component"). The fixed-income component is achieved by investing in non-
convertible fixed-income securities such as non-convertible bonds, preferred
stocks and money market
14
<PAGE>
instruments. The convertible component is achieved by investing in warrants,
exchange or NASDAQ listed call options, or stock index call options granting
the holder the right to purchase a specified quantity of securities within a
specified period of time at a specified price or to receive cash in the case
of stock index options. Synthetic convertible securities are not considered
convertible securities for purposes of the policies of Convertible Fund and
Growth and Income Fund to normally invest at least 65% of total assets in
convertible securities.
The synthetic convertible security differs from the true convertible security
in several respects. Unlike a true convertible security, which is a single
security having a unitary market value, a synthetic convertible security is
composed of two or more separate securities, each with its own market value.
Therefore, the "market value" of a synthetic convertible security is the sum
of the values of its fixed-income component and its convertible component. For
this reason, the values of a synthetic convertible security and a true
convertible security will respond differently to market fluctuations.
More flexibility is possible in the assembly of a synthetic convertible
security than in the purchase of a convertible security. Although synthetic
convertible securities may be selected where the two components are issued by
a single issuer, thus making the synthetic convertible security similar to the
true convertible security, the character of a synthetic convertible security
allows the combination of components representing distinct issuers, when
management believes that such a combination would better promote a Fund's
investment objective. A synthetic convertible security also is a more flexible
investment in that its two components may be purchased separately. For
example, a Fund may purchase a warrant for inclusion in a synthetic
convertible security but temporarily hold short-term investments while
postponing the purchase of a corresponding bond pending development of more
favorable market conditions.
A holder of a synthetic convertible security faces the risk of a decline in
the price of the security or the level of the index involved in the
convertible component, causing a decline in the value of the call option or
warrant. Should the price of the stock fall below the exercise price and
remain there throughout the exercise period, the entire amount paid for the
call option or warrant would be lost. Since a synthetic convertible security
includes the fixed-income component as well, the holder of a synthetic
convertible security also faces the risk that interest rates will rise,
causing a decline in the value of the fixed-income instrument.
FOREIGN SECURITIES
Global Growth and Income Fund may invest all of its assets, and each other
Fund may invest up to 25% of its net assets, in securities of foreign issuers
that are not publicly traded in the United States ("foreign securities"). For
this purpose, foreign securities do not include securities represented by
American Depository Receipts (ADRs) or securities guaranteed by a United
States person.
International investing allows you to achieve greater diversification and to
take advantage of changes in foreign economies and market conditions. Many
foreign economies have, from time to time, grown faster than the U.S. economy,
and the returns on investments in those countries have exceeded those of
similar U.S. investments, although there can be no assurance that these
conditions will continue.
You should understand and consider carefully the greater risks involved in
investing internationally. Investing in securities of non-U.S. issuers,
positions in which are generally denominated in foreign currencies, and
utilization of forward foreign currency exchange contracts involve both
opportunities and risks not typically associated with investing in U.S.
securities. These include: fluctuations in exchange rates of foreign
currencies; possible imposition of exchange control regulation or currency
restrictions that would prevent cash from being brought back to the United
States; less public information with respect to issuers of securities; less
governmental supervision of stock exchanges, securities brokers and issuers of
securities; different accounting, auditing and financial reporting standards;
different settlement periods and trading practices; less
15
<PAGE>
liquidity and frequently greater price volatility in foreign markets than in
the United States; imposition of foreign taxes; and sometimes less
advantageous legal, operational and financial protections applicable to
foreign subcustodial arrangements.
Although the Funds try to invest in companies and governments of countries
having stable political environments, there is the possibility of restriction
of foreign investment, expropriation of assets, or confiscatory taxation,
seizure or nationalization of foreign bank deposits or other assets,
establishment of exchange controls, the adoption of foreign government
restrictions, or other adverse political, social or diplomatic developments
that could affect investment in those countries.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the U.S. and other major
markets. There also may be a lower level of monitoring and regulation of
emerging markets and the activities of investors in such markets, and
enforcement of existing regulations has been extremely limited. Economies in
individual emerging markets may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource self-
sufficiency and balance of payments positions. Many emerging market countries
have experienced high rates of inflation for many years, which has had and may
continue to have very negative effects on the economies and securities markets
of those countries.
Any Fund may invest in ADRs that are not sponsored by the issuer of the
underlying security. To the extent it does so, the Fund would probably bear
its proportionate share of the expenses of the depository and might have
greater difficulty in receiving copies of the issuer's shareholder
communications than would be the case with a sponsored ADR.
When a Fund enters into a contract for the purchase or sale of a foreign
portfolio security, it usually is required to settle the purchase transaction
in the relevant foreign currency or receive the proceeds of the sale in that
currency. In either event, the Fund is obliged to acquire or dispose of an
appropriate amount of foreign currency by selling or buying an equivalent
amount of U.S. dollars. The Fund may wish to "lock-in" the U.S. dollar value
of a transaction at or near the time of the purchase or sale of the foreign
portfolio security at the exchange rate or rates then prevailing between the
U.S. dollar and the currency in which the security is denominated. The Fund
may accomplish such "transaction hedging" by purchasing or selling such
foreign currencies on a "spot" (i.e., cash) basis or on a forward basis
whereby the Fund purchases or sells a specific amount of foreign currency, at
a price set at the time of the contract, for receipt or delivery at a
specified date or at any time within a specified time period. In so doing, the
Fund will attempt to insulate itself against possible losses and gains
resulting from a change in the relationship between the U.S. dollar and the
foreign currency during the period between the date the security is purchased
or sold and the date on which payment is made or received. Similar
transactions may be entered into by using other currencies if the Fund seeks
to move investments denominated in one currency to investments denominated in
another.
When a Fund invests in foreign securities, in addition to the risk of change
in the market value of portfolio securities, the value of the portfolio in
U.S. dollars is subject to fluctuations in the exchange rate between the
foreign currencies and the U.S. dollar. When, in the opinion of the Adviser,
it is desirable to limit or reduce exposure in a foreign currency in order to
moderate potential changes in the U.S. dollar value of the portfolio, the Fund
may enter into a forward currency exchange contract to sell or buy such
foreign currency (or another foreign currency that acts as a proxy for that
currency) by which the U.S. dollar value of certain underlying foreign
portfolio securities can be approximately matched by an equivalent U.S. dollar
liability. This technique is known as "currency hedging" and, by locking in a
rate of exchange, is intended to moderate or reduce the risk of change in the
U.S. dollar value of the Fund's portfolio only
16
<PAGE>
during the period of the forward contract. Forward contracts are usually
entered into with banks and broker-dealers, are not exchange traded, and are
usually for less than one year, but may be renewed. A default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or sale of currency, if any, at the current market
price.
Neither type of foreign currency transaction will eliminate fluctuations in
the prices of the Fund's portfolio securities or prevent loss if the price of
such securities should decline. In addition, such forward foreign currency
exchange contracts will diminish the benefit of the appreciation in the U.S.
dollar value of that foreign currency. For further information on forward
foreign currency exchange transactions, see the Statement of Additional
Information.
At March 31, 1997, Global Growth and Income Fund had invested 17% of its net
assets in foreign securities. No other Fund had as much as 1% of its net
assets so invested.
WARRANTS
Each Fund may invest up to 5% of the value of its net assets at the time of
purchase in warrants (not including those acquired in units or attached to
other securities), including up to 2% of its net assets in warrants the
underlying common stock of which is not listed on the New York or American
stock exchange or, in the case of Global Growth and Income Fund, a recognized
foreign exchange. A warrant is a right to purchase common stock at a specific
price (usually at a premium above the market value of the underlying common
stock at time of issuance) during a specified period of time. A warrant may
have a life ranging from less than a year to twenty years or longer, but a
warrant becomes worthless unless it is exercised or sold before expiration. In
addition, if the market price of the common stock does not exceed the
warrant's exercise price during the life of the warrant, the warrant will
expire worthless. Warrants have no voting rights, pay no dividends and have no
rights with respect to the assets of the corporation issuing them. The
percentage increase or decrease in the value of a warrant may tend to be
greater than the percentage increase or decrease in the value of the
underlying common stock.
OPTIONS AND FUTURES
Consistent with its objective, each Fund may purchase and write both call
options and put options on securities and on indexes, and may enter into
interest rate and index futures contracts and options on such futures
contracts ("derivative products") in order to provide additional revenue, or
to hedge against changes in security prices or interest rates. Each Fund will
limit its use of futures contracts and options on futures contracts to hedging
transactions to the extent required to do so by regulatory agencies.
An option on a security (or index) is a contract that gives the holder, in
return for a premium, the right to buy (call) from or sell (put) to the option
seller (writer) the security (or the cash value of the index) underlying the
option at a designated price during the term of the option. Prior to exercise
or expiration, an option may be closed out by an offsetting purchase or sale
of an option of the same series. A Fund may write a call or put option only if
the option is covered.
There are several risks associated with the use of derivative products. As the
writer of a covered call option, a Fund foregoes, during the option's life,
the opportunity to profit from increases in market value of the security
covering the call option above the call price. Because of low margin deposits
required, the use of futures contracts involves a high degree of leverage and
may result in losses in excess of the amount of the margin deposit. Since
there can be no assurance that a liquid market will exist when a Fund seeks to
close out a derivative product position, these risks may become magnified.
Because of these and other risks, successful use of derivative products
depends on the Adviser's ability to predict correctly changes in the level and
the direction of stock prices, interest rates and other market factors, but
even a well-conceived transaction may be unsuccessful because of an imperfect
correlation between the securities and derivative product markets. For a more
complete explanation,
17
<PAGE>
please refer to the Statement of Additional Information.
SHORT SALES
Each Fund may attempt to hedge against market risk and enhance income by: (1)
entering into short sales of securities that it currently has the right to
acquire, without payment of any further consideration, through the conversion
or exchange of other securities that it owns or, to a lesser extent, entering
into short sales of securities that it currently owns; and (2) entering into
arrangements with the broker-dealers through which such securities are sold
short to receive income with respect to the proceeds of short sales while the
Fund's short positions remain open.
In addition, Strategic Income Fund may enter into short sales of securities
that it currently has the right to acquire upon payment of additional
consideration, for instance, upon exercise of any option or warrant. This
technique would be used to hedge against market risk in connection with a
synthetic convertible position in the same way selling short a true
convertible security owned by a Fund would hedge against market risk. During
the time such a short position is open, the Fund would maintain in a
segregated account with the Fund's custodian, cash or U.S. Government
securities in an amount such that the value of the segregated account, plus
the value of any collateral required to be deposited with the broker in
connection with the short sale, (i) will equal the current market value of the
securities sold short and (ii) will not be less than the market value of the
securities at the time they were sold short. Strategic Income Fund will
conduct its short sales so that no more than 10% of the net assets of the
Fund, when added together, will be (i) deposited with brokers as collateral,
and (ii) allocated to segregated accounts in connection with short sales, at
any time.
Short sales and short sales against the box may protect the Funds against the
risk of losses in the value of their portfolio securities because any
unrealized losses with respect to such portfolio securities should be wholly
or partially offset by a corresponding gain in the short position. However,
any potential gains in such portfolio securities should be wholly or partially
offset by a corresponding loss in the short position. The extent to which such
gains or losses are offset will depend upon the amount of securities sold
short relative to the amount the Fund owns, either directly or indirectly,
and, in the case where the Fund owns convertible securities, changes in the
conversion premium.
Short sale transactions involve certain risks. In particular, the variable
degree of correlation between the price movements of the convertible
securities (or portion of the synthetic convertible) and the price movements
of the underlying common stock being sold short creates the possibility that
losses on the short sale hedge position may be greater than gains in the value
of the portfolio securities being hedged. In addition, to the extent that a
Fund pays a conversion premium for a convertible security, the Fund is
generally unable to protect against a loss of such premium by entering into a
short sale hedge. In determining the number of shares to be sold short against
the Fund's position in the convertible securities, the anticipated fluctuation
in the conversion premiums is considered. A Fund will also incur transaction
costs in connection with short sales. Certain provisions of the Internal
Revenue Code may limit the degree to which the Funds are able to enter into
short sales, which limitations might impair a Fund's ability to achieve its
investment objective. Please refer to the Statement of Additional Information
for a more complete explanation.
LENDING PORTFOLIO SECURITIES
In order to generate additional income, each Fund may from time to time lend
securities from its portfolio with a value not exceeding 33 1/3% of its total
assets to brokers, dealers and financial institutions such as banks and trust
companies for which it will receive collateral in cash, United States
Government securities or irrevocable letters of credit that will be maintained
in an amount equal to at least 100% of the current market value of the loaned
securities. Cash collateral will be invested in short-term securities, which
will increase the current income of the Fund. Such loans will be
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<PAGE>
terminable at any time. A Fund will have the right to regain record ownership
of loaned securities to exercise beneficial rights such as voting rights and
rights to interest or other distributions. A Fund may pay reasonable fees to
persons unaffiliated with the Fund for services in arranging such loans. The
lending of portfolio securities exposes a Fund to the risk of failure by the
borrower to return the securities involved in such transactions, in which
event the Fund may incur a loss. In an effort to reduce that risk, the Adviser
will monitor the creditworthiness of the firms to which the Funds lend
portfolio securities.
TEMPORARY INVESTMENTS
Each Fund may make temporary investments without limitation when the Adviser
determines that a defensive position is warranted. Such investments may be in
money market instruments, consisting of obligations of, or guaranteed as to
principal and interest by, the U.S. Government or its agencies or
instrumentalities; certificates of deposit, bankers' acceptances and other
obligations of domestic banks having total assets of at least $500 million and
which are regulated by the U.S. Government, its agencies or instrumentalities;
commercial paper rated in the highest category by a recognized rating agency;
and repurchase agreements. In a repurchase agreement, a Fund purchases a
security and the seller (a bank or securities dealer) simultaneously agrees to
repurchase the security at the same price plus an amount equal to an agreed-
upon interest rate, on a specified date. In the event of a bankruptcy or other
default of a seller of a repurchase agreement, a Fund could experience delays
in liquidating the underlying security and losses.
RISK OF INVESTMENT
All investments, including those in mutual funds, have risks. No investment is
suitable for all investors. Each Fund is designed for long-term investors who
can accept the fluctuations in portfolio value and other risks associated with
investments in securities. There can be no guarantee that a Fund will achieve
its objective.
Each Fund diversifies its portfolio holdings to reduce risk. Although risk
cannot be eliminated, diversification reduces the impact of any single
investment. Certain risk factors may also be associated with the Funds'
investment practices, including investing in debt securities rated below
investment grade, short selling and investing in foreign securities. Risk
factors specific to those practices are described under "Common Investment
Practices."
Although the Funds do not purchase securities with a view to rapid turnover,
there are no limitations on the length of time portfolio securities must be
held. The turnover rate may vary significantly from year to year. The
portfolio turnover rate of any Fund may be greater than 100%. The portfolio
turnover rate of Global Growth and Income Fund is not expected to exceed 100%
under normal circumstances. A higher rate of portfolio turnover may result in
higher transaction costs and the realization of capital gains and losses.
Please refer to the Statement of Additional Information for a more complete
explanation.
INVESTMENT RESTRICTIONS
In pursuing its investment objective, a Fund will not:
1. As to 75% of its assets, invest more than 5% of its total assets, taken at
market value at the time of a particular purchase, in the securities of any
one issuer, except that this restriction does not apply to securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities;
2. Acquire more than 10%, taken at the time of a particular purchase, of the
outstanding voting securities of any issuer; or
3. Invest in a security if more than 25% of its total assets (taken at market
value at the time of a particular purchase) would be invested in the
securities of issuers in any particular industry, except that this
restriction does not apply to securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
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<PAGE>
These are fundamental restrictions that cannot be changed as to a Fund without
the approval of a "majority of the outstanding" voting securities of that Fund,
as defined in the Investment Company Act of 1940. All investment restrictions
for the Funds are described in the Statement of Additional Information.
HOW TO PURCHASE SHARES
Shares of the Funds are sold through selected broker-dealers and banks that
have signed agreements with Calamos Financial Services, Inc. ("CFS"), the
Funds' distributor, or may be purchased by check or wire sent to CFS. The
minimum initial investment by a shareholder is $500 and $50 thereafter. Each
Fund reserves the right to reject any order for the purchase of its shares in
whole or in part, and to suspend the sale of its shares to the public in
response to conditions in the securities markets or otherwise. Each purchase of
shares is confirmed by a written statement mailed to the shareholder, without
issuance of share certificates.
OFFERING PRICE
Class A shares of each Fund are sold to investors at net asset value plus a
sales charge, which may be reduced or waived as described below. Class C shares
of each Fund are sold without an initial sales charge but are subject to higher
ongoing expenses than Class A shares of the same Fund. When placing an order,
you must specify whether the order is for Class A or Class C shares.
The differences between Class A shares and Class C shares lie primarily in
their initial and contingent deferred sales charge structures and in their
asset-based sales charges in the form of Rule 12b-1 distribution fees. These
differences are summarized in the table below. See also "Expenses" and "How to
Redeem Shares." Each class has distinct advantages and disadvantages for
different investors, and you may choose the class that best suits your
circumstances and objectives.
<TABLE>
<CAPTION>
Annual 12b-1 Fees
(as a % of average
Class Initial Sales Charge daily net assets)* Other Information
- ----- -------------------- ------------------ -----------------
<S> <C> <C> <C>
Class Maximum initial sales .50% Initial sales charge waived or
A charge of 4.75% of offer- reduced for certain purchases**
ing price
Class None 1.00%*** 1% deferred sales charge on
C shares redeemed within one year
</TABLE>
- ------------------------------
*Of this amount, .25% is for administrative services and the balance is for
distribution services.
**See the note to the following table.
***The 12b-1 fee of 1% for the first year is advanced to the Selling Dealer by
CFS from its own resources at the time of investment. Annual 12b-1 fees are
paid quarterly in arrears beginning in the second year.
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<PAGE>
The sales charges on sales of Class A shares of each Fund (except when waived
as described below under "How to Purchase Shares--Sales Charge Waiver") are as
follows:
----------------
<TABLE>
<CAPTION>
Sales Charge Paid by Investor on Purchase of Class A Shares
-------------------------------------------------------------
As a % of As a % of % of Offering Price
Net Amount Invested Offering Price Retained by Selling Dealer
------------------- -------------- --------------------------
<S> <C> <C> <C>
Less than $50,000....... 4.99% 4.75% 4.00%
$50,000 but less than
$100,000............... 4.44 4.25 3.50
$100,000 but less than
$250,000............... 3.63 3.50 2.75
$250,000 but less than
$500,000............... 2.56 2.50 2.00
$500,000 but less than
$1,000,000............. 2.04 2.00 1.60
$1,000,000 or more...... None None None
</TABLE>
- ------------------------------
*On an investment of $1 million or more, CFS from its own resources pays the
selling dealer a commission of .25% of the amount of the investment, subject
to repayment of the commission if the shares are redeemed within one year
after purchase. If you purchase such shares without a sales charge, a
contingent deferred sales charge of 1% will be imposed on shares that are
redeemed within one year after purchase (other than by reinvestment of
dividends or distributions), determined on a first-in, first-out basis.
----------------
Each Fund receives the entire net asset value of all of its Class A shares
sold. CFS, the Funds' principal underwriter, retains the sales charge on sales
of Class A shares from which it allows discounts from the applicable public
offering price to investment dealers. The normal discount to dealers is set
forth in the above table. Upon notice to all dealers with whom it has sales
agreements, CFS may reallow up to the full applicable sales charge, as shown in
the above table, during periods and for transactions specified in such notice
and such reallowances may be based upon attainment of minimum sales levels.
Dealers who receive 90% or more of the sales charge may be deemed to be
underwriters under the Securities Act of 1933. CFS retains the entire amount of
any deferred sales charge on Class C shares redeemed within one year of
purchase. CFS may from time to time conduct promotional campaigns in which
incentives would be offered to dealers meeting or exceeding stated target sales
of shares of a Fund. The cost of any such promotional campaign, including any
incentives offered, would be borne entirely by CFS and would have no effect on
either the public offering price of Fund shares or the percentage of the public
offering price retained by the selling dealer.
PURCHASES THROUGH DEALERS
If a purchase order accompanied by payment is received by a dealer prior to the
close of regular session trading on the New York Stock Exchange, the applicable
offering price will be the offering price per share determined on the day the
order is received by the dealer, provided the dealer conveys the order to CFS
prior to 4:30 p.m., Chicago time, on that day. Orders received by dealers or
CFS after such time will be effective on the next business day. Neither CFS nor
the dealers are permitted to withhold placing orders to benefit themselves by a
price change.
PURCHASES BY WIRE
You may also purchase shares by wiring funds from your bank. Please call the
Funds at the numbers on the front cover of this prospectus for wiring
instructions. The applicable offering price for a purchase by wire is the
offering price per share next determined after receipt by the Fund of the wired
funds. After you have wired funds, you must complete the application form and
send it to CFS. A Fund will not honor redemption requests until the completed
application has been received.
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<PAGE>
PURCHASES BY MAIL
You may also purchase shares of a Fund by sending to CFS a check payable to
the Fund, along with information identifying you and your account number. An
initial investment made by check must be accompanied by a completed
application. All checks should be drawn on a U.S. bank in U.S. funds in order
to avoid fees and delays. A charge may be imposed if any check submitted for
investment does not clear.
PURCHASES BY EXCHANGE
You may purchase shares of a Fund by exchange of shares from another Fund, by
exchange of shares of Money Market Portfolio, Government Securities Portfolio
or Tax-Exempt Portfolio, each a portfolio of Cash Account Trust (such shares
are referred to as "Cash Account Shares") either by mail or by instructing
your broker-dealer or other sales agent, who will communicate your order to
CAM. If you have a brokerage account with Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") that holds shares of Summit Cash Reserves
Fund, a series of Financial Institution Series Trust (such shares are referred
to as "Summit Fund Shares"), and the Summit Fund Shares were purchased by
exchange from a Fund, you may purchase shares of a Fund through your Merrill
Lynch broker by exchange of Summit Fund Shares. See "How to Redeem Shares--
Redemption by Exchange." YOU MAY NOT MAKE MORE THAN FOUR EXCHANGES FROM ANY
FUND DURING ANY CALENDAR YEAR. No sales charge is imposed on purchases of
Class A shares by exchange of Class A shares from another Fund or by exchange
of Cash Account Shares or Summit Fund Shares, previously purchased through use
of the exchange privilege. Please review the information under "How to Redeem
Shares--Redemption by Exchange."
SALES CHARGE WAIVER
Dividends and distributions paid by a Fund will be reinvested in shares of
that Fund at net asset value (without the payment of any sales charge) unless
you elect to receive dividends and distributions in cash. Proceeds of shares
redeemed by a Fund within the previous 60 days also may be reinvested in that
Fund's shares at net asset value without the payment of any sales charge. See
"Shareholder Services--Investment in Related Funds."
In addition, the following persons or entities may purchase Class A shares of
a Fund at net asset value without payment of any sales charge, upon written
assurance that the purchase is made for investment purposes and that the
shares will not be sold except through redemption by the Fund: (a) any
investor purchasing shares upon the recommendation of an investment consultant
to which the investor pays a fee for services relating to investment
selection; (b) any investor purchasing shares of a Fund by exchange of Cash
Account Shares or Summit Fund Shares previously purchased through use of the
exchange privilege; (c) any employee benefit plan having more than 200
eligible employees or a minimum of $1 million of plan assets invested in the
Funds; (d) any employee benefit plan purchasing shares through an intermediary
that has signed a participation agreement with CFS specifying certain asset
minimums and qualifications, and marketing, program and trading restrictions;
(e) any insurance company separate account used to fund annuity contracts for
employee benefit plans that in the aggregate have more than 200 eligible
employees or a minimum of $1 million in plan assets invested in the Funds; (f)
any employee or registered representative of CFS, one of its affiliates or a
broker-dealer with a selling group agreement with CFS; (g) any trustee of the
Trust; (h) any member of the immediate family of a person qualifying under (f)
or (g), including a spouse, child, stepchild, sibling, parent, stepparent,
grandchild and grandparent, in each case including in-law and adoptive
relationships; (i) any trust, pension, profit sharing, or other benefit plan
in which any person qualifying under (f) is a participant; (j) any 401(k) plan
(cash or deferred arrangement intended to qualify under section 401(k) of the
Internal Revenue Code) or other qualified retirement plan to which a person
qualifying under (f), (g) or (h) makes voluntary contributions and has
investment self-direction, provided the purchase is for
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<PAGE>
the account of such person; (k) any company exchanging shares with a Fund
pursuant to a merger, acquisition or exchange offer; (l) any investment
advisory client of the Adviser or brokerage customer of CFS who has, in
writing, given investment discretion to CFS, to the extent the investment is
from the account managed by the Adviser or CFS; and (m) any investor purchasing
shares through Charles Schwab & Co. or Fidelity Investments. Please note that,
if you purchase or redeem shares through a broker or dealer, the broker or
dealer may charge a fee for effecting the transaction.
Further, no sales charge will be imposed on the sale of Class A shares of a
Fund purchased and paid for with the proceeds of shares redeemed in the prior
12 months from a mutual fund on which an initial sales charge or contingent
deferred sales charge was paid, provided a waiver of the sales charge is
requested when the purchase order for Fund shares is placed, any requested
evidence of eligibility for the sales charge waiver is furnished. Further, any
shareholder of Convertible Fund at April 30, 1992, the date on which that Fund
became a series of the Trust and sales of Fund shares became subject to a sales
charge, may continue to purchase Class A shares of Convertible Fund without a
sales charge if the Fund or participating broker is notified at the time of
each qualifying purchase.
RIGHTS OF ACCUMULATION
The sales charges described above also apply on a cumulative basis to Class A
shares of the Funds and any other series of the Trust as to which a sales
charge applies, and over any period of time. Therefore, the value of all your
Class A shares of a Fund and any other series of the Trust with respect to
which a sales charge was paid, taken at the current offering price or original
cost, whichever is greater, can be combined with a current purchase to
determine the applicable offering price of the current purchase. In order to
receive the cumulative quantity reduction, you must give CFS or your dealer
notification of the prior purchases at the time of the current purchase.
LETTER OF INTENT
You may reduce the sales charges you pay on the purchase of Class A shares by
making investments pursuant to a letter of intent. The applicable sales charge
then is based upon the indicated amount intended to be invested during a
thirteen-month period in shares of the Funds as to which a sales charge would
be imposed and any other series of the Trust. You may compute the thirteen-
month period starting up to ninety days before the date of execution of the
letter of intent. Your initial investment must be at least 5% of the amount
your letter of intent indicates you intend to invest. Each investment made
during the period receives the reduced sales charge applicable to the total
amount of the intended investment. During the term of the letter of intent,
shares representing 5% of the indicated amount will be held in escrow. Shares
held in escrow have full dividend and voting privileges. The escrowed shares
will be released when the full amount indicated has been purchased. If the full
indicated amount is not purchased during the term of the letter of intent, you
will be required to pay CFS an amount equal to the difference between the
dollar amount of the sales charges actually paid and the amount of the sales
charges which you would have paid on your aggregate purchase if the total of
such purchases had been made at a single time. A letter of intent does not
obligate you to buy or a Fund to sell the indicated amount of the shares but
you should read it carefully before signing. Additional information is
contained in the letter of intent included in the application.
NET ASSET VALUE
The net asset value of the shares of each Fund is determined as of the close of
regular session trading on the New York Stock Exchange, currently 3:00 p.m.
Chicago time, each day that exchange is open for trading by dividing the value
of all of the securities and other assets of the Fund, less its liabilities, by
the number of shares of the Fund outstanding.
Portfolio securities are valued on the basis of market valuation. Securities
and other assets for which market values are not readily available are valued
at a fair
23
<PAGE>
value as determined by a method the board of trustees believes represents a
fair value. For a more complete explanation, please refer to the Statement of
Additional Information.
HOW TO REDEEM SHARES
Shares of the Funds will be redeemed at the respective net asset value next
determined after receipt of a redemption request in good form on any day the
New York Stock Exchange is open for trading. Requests received after the time
for computation of a Fund's net asset value for that day will be processed the
next business day.
If Class C shares, or Class A shares for which the initial purchase price was
$1 million or more, on which no initial sales charge was imposed are redeemed
within one year after purchase (other than by reinvestment of dividends or
distributions), determined on a first-in, first-out basis, a contingent
deferred sales charge of 1% of the purchase price will be imposed.
REDEMPTION BY MAIL
A written request for redemption (and an endorsed share certificate, if issued)
must be received by the Fund's transfer agent, Calamos Asset Management, Inc.
("CAM"), to constitute a valid redemption request.
Your redemption request must:
1. specify the Fund and the number of shares or dollar amount to be redeemed,
if less than all shares are to be redeemed;
2. be signed by all owners exactly as their names appear on the account; and
3. include a signature guarantee for each signature on the redemption request
by CFS, by a securities firm that is a member of the New York Stock
Exchange, or by a bank, savings bank, credit union, savings and loan
association or other entity that is authorized by applicable state law to
guarantee signatures.
In the case of shares held by a corporation, the redemption request must be
signed in the name of the corporation by an officer whose title must be stated,
and a certified bylaw provision or resolution of the board of directors
authorizing the officer to so act may be required. In the case of a trust or
partnership, the signature must include the name of the registered shareholder
and the title of the person signing on its behalf. Under certain circumstances,
before shares can be redeemed, additional documents may be required in order to
verify the authority of the person seeking to redeem.
REDEMPTION BY WIRE OR TELEPHONE
Broker-dealers or other sales agents may communicate redemption orders by wire
or telephone to CAM. These firms may charge for their services in connection
with your redemption request but neither the Funds nor CAM impose any such
charges.
EXPEDITED REDEMPTION
Unless share certificates have been issued to you, you may have redemption
proceeds of at least $5,000 wired directly to a domestic commercial bank
account or brokerage account that you have previously designated. Normally,
such payments will be transmitted no later than the second business day
following receipt of your redemption request (provided redemptions may be made
under the general criteria set forth below). A $15 service charge for payment
of redemption proceeds by wire will be deducted from the proceeds.
REDEMPTION BY EXCHANGE
You may redeem all or any portion of your shares of a Fund and use the proceeds
to purchase shares of any of the other Funds or Cash Account Shares (or Summit
Fund Shares if your Fund shares are held in a brokerage account with Merrill
Lynch and Merrill Lynch has commenced offering the exchange program for Summit
Fund Shares) if your signed, properly completed application is on file. AN
EXCHANGE TRANSACTION IS A SALE AND PURCHASE OF SHARES FOR
24
<PAGE>
FEDERAL INCOME TAX PURPOSES AND MAY RESULT IN CAPITAL GAIN OR LOSS. YOU MAY
NOT MAKE MORE THAN FOUR EXCHANGES FROM ANY FUND IN ANY CALENDAR YEAR. Before
exchanging into Cash Account Shares (or Summit Fund Shares), you should obtain
the prospectus relating to those shares from the Adviser (or from Merrill
Lynch, in the case of Summit Fund Shares) and read it carefully. The exchange
privilege is not an offering or recommendation of Cash Account Shares or
Summit Fund Shares. The registration of the account to which you are making an
exchange must be exactly the same as that of the account from which the
exchange is made and the amount you exchange must meet any applicable minimum
investment of the fund being purchased. An exchange may be made by following
the redemption procedure described above under "Redemption by Mail" and
indicating the fund to be purchased, except that a signature guarantee
normally is not required. An exchange may also be made by instructing your
broker-dealer or other sales agent, who will communicate your instruction to
CAM. No sales charge is imposed on purchases by exchange.
GENERAL
A check for proceeds of a redemption will not be released until the check used
to purchase the shares has been collected, which is usually no more than 15
days after purchase. You may avoid this delay by purchasing shares in such a
way that the Fund receives immediate payment for your purchase, such as by
wire transfer of funds or payment by a certified or cashier's check. A Fund
may suspend the right of redemption under certain extraordinary circumstances
in accordance with the rules of the Securities and Exchange Commission. Due to
the relatively high cost of handling small accounts, each Fund reserves the
right upon 30 days' written notice to involuntarily redeem, at net asset
value, the shares of any shareholder whose account has a value of less than
$500, unless the reduction in value to less than $500 was the result of market
fluctuation.
PLEASE TELEPHONE THE FUNDS IF YOU HAVE ANY QUESTIONS ABOUT REQUIREMENTS FOR A
REDEMPTION BEFORE SUBMITTING A REQUEST. YOU MAY NOT CANCEL OR REVOKE YOUR
REDEMPTION REQUEST ONCE YOUR INSTRUCTIONS HAVE BEEN RECEIVED AND ACCEPTED.
SHAREHOLDER SERVICES
SHAREHOLDER ACCOUNTS
Each shareholder of a Fund receives quarterly account statements showing
transactions in shares of the Fund and with a balance denominated in Fund
shares. A confirmation will be sent to the shareholder upon purchase,
redemption, dividend reinvestment, or change of shareholder address.
RETIREMENT PLANS
You may use the Funds as investments for your Individual Retirement Account
("IRA"), profit sharing or pension plan, Section 40l(k) plan, Section
403(b)(7) plan in the case of employees of public school systems and certain
non-profit organizations, and certain other qualified plans. A master IRA plan
and information regarding plan administration, fees, and other details are
available from CFS and authorized broker-dealers.
SYSTEMATIC WITHDRAWAL PLAN
You may request that a Fund periodically redeem shares having a specified
redemption value and send you a check for the proceeds. In order to initiate
the Systematic Withdrawal Plan, your account must have a share balance of
$25,000 or more. Withdrawal proceeds are likely to exceed dividends and
distributions paid on shares in your account and therefore may deplete and
eventually exhaust your account. The periodic payments are proceeds of
redemption and are taxable as such. Because a sales charge is imposed on
purchases of shares of the Funds, you should not purchase shares while
participating in the Systematic Withdrawal Plan.
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<PAGE>
EXCHANGE PRIVILEGE
You may exchange shares of any Fund for shares of another Fund or for Cash
Account Shares (or for Summit Fund Shares if your Fund shares are held in a
brokerage account with Merrill Lynch) or exchange Cash Account Shares or
Summit Fund Shares for shares of a Fund, without payment of any sales charge
as described above under "How to Purchase Shares--Purchase by Exchange" and
"How to Redeem Shares--Redemption by Exchange."
DIVIDENDS AND DISTRIBUTIONS
Shareholders may receive two kinds of distributions from a Fund: dividends and
capital gains distributions. All dividends and capital gains distributions are
paid in the form of additional shares of the same class credited to your
account at the net asset value per share next computed after the dividend or
distribution is payable to shareholders (without a sales charge) unless you
requested on the account application or in writing that distributions be made
in cash. Convertible Fund, Growth and Income Fund, Strategic Income Fund and
Global Growth and Income Fund declare and pay dividends from net investment
income quarterly; Growth Fund declares dividends annually. Net realized long-
term capital gains, if any, are paid to shareholders by each Fund at least
annually.
If two consecutive dividend checks from a Fund are returned as undeliverable,
undelivered dividends will be invested in additional shares of that Fund at
the current net asset value and the account will be designated as a dividend
reinvestment account.
TAXES
Each Fund intends to continue to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code, and thus not be subject to
federal income taxes on amounts it distributes to shareholders.
You may realize a capital gain or capital loss when you redeem (sell) shares.
The federal tax treatment will depend, of course, on how long you owned the
shares and on your individual tax position. You may be subject to state and
local taxes on your investment in a Fund, depending on the laws of your home
state and locality.
Dividends and distributions paid by a Fund are subject to taxation as of the
date of payment, except that distributions declared in October, November or
December to shareholders of record in one of those months will be treated as
received by shareholders on December 31 of the year in which they are
declared, provided they are paid prior to February 1 of the next year.
Dividends from net investment income and capital gains distributions may be
taxed to shareholders at different rates depending on their individual tax
situations. You will be advised annually as to the source of your
distributions for tax purposes. If you are not subject to income taxation, you
will not be required to pay tax on amounts distributed to you.
Each Fund is required by law to withhold federal income tax from reportable
payments (which may include redemptions, capital gains distributions and other
taxable distributions, if any) paid to any non-exempt shareholder who has
failed to certify to the Fund that the social security or taxpayer
identification number provided to the Fund is correct and that the shareholder
is not subject to backup withholding.
Please refer to the Statement of Additional Information for a more complete
explanation.
MANAGEMENT OF THE FUNDS
THE TRUSTEES
The board of trustees of Calamos Investment Trust (the "Trust") has overall
responsibility for the conduct of the affairs of the Trust. The trustees serve
indefinite terms of unlimited duration. The trustees appoint their own
successors, provided that at least two-thirds of the trustees, after any such
appointment, have been elected
26
<PAGE>
by the shareholders. Shareholders may remove a trustee, with or without cause,
upon the declaration in writing or vote of two-thirds of the Trust's
outstanding shares. A trustee may be removed with or without cause upon the
written declaration of a majority of the trustees.
THE ADVISER
Each Fund's investments are managed by its investment adviser, Calamos Asset
Management, Inc. ("CAM"). At March 31, 1997, CAM managed approximately $1.9
billion in assets of individuals and institutions. CAM is controlled by John
P. Calamos, who has been engaged in the investment advisory business since
1977. Mr. Calamos is also the controlling shareholder of CFS, the distributor
of the Funds.
Subject to the overall authority of the board of trustees, CAM furnishes
continuous investment supervision and management to each Fund under a
management agreement and also furnishes office space, equipment and management
personnel. For these services each Fund pays CAM a fee based on average daily
net assets that is accrued daily and paid monthly. The fee paid by Growth Fund
is at the annual rate of 1% of the first $150 million of average net assets
and .75% of average net assets in excess of $150 million. The fee paid by
Global Growth and Income Fund is at the annual rate of 1% of average net
assets. The fee paid by each other Fund is at the annual rate of .75% of the
first $150 million of average net assets and .50% of average net assets in
excess of $150 million. CAM also acts as transfer agent and dividend
disbursing agent for the Funds under a transfer agency agreement.
The management agreement also provides that the total ordinary expenses of a
Fund (exclusive of taxes, interest, extraordinary litigation expenses and
brokers' commissions and other charges relating to the purchase and sale of
securities but including fees paid to CAM and fees paid pursuant to the
Distribution Plan) shall not exceed the limits, if any, prescribed by any
state in which shares of the Fund are being sold or are qualified for sale,
and CAM has agreed to reimburse the Fund for any such expenses in excess of
such limits. In addition, CAM has voluntarily undertaken to limit the annual
ordinary operating expenses of shares of each Fund, as a percentage of the
average net assets of the particular class of shares, to 2.00% for Class A
shares and 2.50% for Class C shares through August 31, 1998. Subject to those
expense limitations, each Fund pays all of its operating expenses not
specifically assumed by CAM.
John P. Calamos and Nick P. Calamos are responsible for managing the
portfolios of Convertible Fund, Growth and Income Fund and Global Growth and
Income Fund; John P. Calamos and John P. Calamos, Jr. are primarily
responsible for the day-to-day management of the portfolios of Strategic
Income Fund and Growth Fund. During the past five years, John P. Calamos has
been president and a trustee of the Trust and president of CAM and CFS; John
P. Calamos, Jr. has been an employee of CAM; and Nick P. Calamos has been vice
president of the Trust since 1992, a trustee of the Trust since 1997 and a
managing director of CAM and CFS.
DISTRIBUTION PLAN
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940 whereby each Fund pays to CFS fees
accrued daily and paid monthly at annual rates aggregating .50% in the case of
Class A shares, or 1.00% in the case of Class C shares, of the average daily
net assets of the class (.25% as a service fee and the balance as a
distribution fee). In return, CFS bears all expenses incurred in providing
services to shareholders and potential investors, and in the distribution and
promotion of each Fund's shares, including the printing of prospectuses and
reports used for sales purposes, advertisements, expenses of preparation and
printing of sales literature, and other distribution related expenses. CFS may
reallow to investment professionals up to the full amount of the service fee
for services provided to shareholders, and up to the full amount of the
distribution fee for distribution services, based upon the level of services
provided. Reallowances by CFS on Class A shares are
27
<PAGE>
made quarterly in arrears. Plan payments on Class C shares are made as
follows: (1) for the first year after investment, in a single payment advanced
by CFS from its own resources; and (ii) for the second and subsequent years,
quarterly in arrears.
The expenses incurred by CFS may be more or less than the distribution fee
paid to CFS by a Fund. Amounts paid by a Fund pursuant to the Plan are not
intended to finance distribution of the shares of the other Funds.
PERFORMANCE INFORMATION
Information about the performance of each Fund is contained in the Funds'
annual report, which may be obtained from the Trust upon request at no charge.
Each Fund may provide information about the investment performance of its
classes of shares from time to time in advertisements, sales literature and
otherwise. Convertible Fund, Growth and Income Fund and Strategic Income Fund
may quote "yield," an annualized figure based on the amount of net investment
income per share (a hypothetical figure defined by SEC rules) earned during a
30-day period, divided by the public offering price per share on the last day
of the period. Each Fund may advertise its "Total Return" for each class of
shares. Total Return for a class of shares of a Fund for a period is the
percentage change in value during a period of an investment in those shares,
including the value of all shares acquired through reinvestment of all
dividends and capital gains distributions. "Average Annual Total Return" is
the average annual compounded rate of change in value represented by the Total
Return for the period. All of these calculations assume the reinvestment of
dividends and distributions in additional shares of the same class. Quotations
of Average Annual Total Return for Class A shares will take into account the
effect of the sales charge on the amount available for investment; quotations
of Total Return for Class A shares will indicate whether the effect of the
sales charge is included. Income taxes payable by a shareholder are not taken
into account. Please refer to the Statement of Additional Information for a
more complete explanation.
In advertising and sales literature, a Fund's performance may be compared with
that of market indices and other mutual funds, comparative performance as
computed in a ranking determined by Lipper Analytical Services, Inc., an
independent service that monitors the performance of over 1,000 mutual funds,
or that of another service.
Performance of a Fund will vary from time to time, and past results are not
necessarily indicative of future results. Performance information supplied by
a Fund may not provide a basis for comparison with other investments using
different reinvestment assumptions or time periods.
28
<PAGE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Convertible Fund-
A Shares from 6/21/85 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS CONV A Dec-1985 Dec-1986
<S> <C> <C> <C>
Calamos Conver $ 9,525 $10,197 $11,842
Lehman Brother $10,000 $10,973 $12,687
S&P 500 Index $10,000 $11,232 $13,278
CALAMOS CONV Dec-1987 Dec-1988
Calamos Conver $11,312 $12,028
Lehman Brother $12,979 $13,963
S&P 500 Index $13,966 $16,271
CALAMOS CONV Dec-1989 Dec-1990
Calamos Conver $14,022 $13,523
Lehman Brother $15,951 $17,271
S&P 500 Index $21,386 $20,703
CALAMOS CONV Dec-1991 Dec-1992 Dec-1993
Calamos Conver $18,492 $19,901 $23,395
Lehman Brother $20,057 $21,579 $23,960
S&P 500 Index $27,025 $29,102 $32,009
CALAMOS CONV Dec-1994 Dec-1995
Calamos Conver $21,749 $28,112
Lehman Brother $23,122 $27,570
S&P 500 Index $32,434 $44,596
CALAMOS CONV Dec-1996 Mar-1997
Calamos Conver $32,547 $33,224
Lehman Brother $28,370 $28,126
S&P 500 Index $54,963 $56,436
</TABLE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Convertible Fund-
C Shares from 7/5/96 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS CONV CONVERTIBLE FUND LB G/C S&P 500 INDEX
<S> <C> <C> <C>
1996 $10,000 $10,000 $10,000
1996 $10,914 $10,487 $11,180
1997 $11,016 $10,397 $11,480
</TABLE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Growth and Income Fund-
A Shares from 9/22/88 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS GROWTH & INCOME-A GROWTH & INCOME LB G/C INT S&P 500 INDEX
<S> <C> <C> <C>
Sep-1988 $ 9,525 $10,000 $10,000
Dec-1988 $ 9,611 $10,096 $10,302
Dec-1989 $11,188 $11,533 $13,541
Dec-1990 $10,801 $12,488 $13,108
Dec-1991 $15,193 $14,502 $17,112
Dec-1992 $16,729 $15,603 $18,427
Dec-1993 $19,201 $17,324 $20,267
Dec-1994 $18,182 $16,719 $20,536
Dec-1995 $23,480 $19,935 $28,237
Dec-1996 $27,990 $20,513 $34,801
Mar-1997 $28,259 $20,337 $35,733
</TABLE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Growth and Income Fund-
C Shares from 8/5/96 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS GROWTH & INCOME-C/shrs GROWTH & INCOME LB G/C INT S&P 500 INDEX
<S> <C> <C> <C>
Aug-1996 $10,000 $10,000 $10,000
Dec-1996 $10,984 $10,411 $11,698
Mar-1997 $10,965 $10,321 $12,012
</TABLE>
29
<PAGE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Strategic Income Fund
from 9/4/90 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
STRATEGIC INCOME FUND STRATEGIC FUND 30 DAY T BILLS LB G/C INT
<S> <C> <C> <C>
1990 $ 9,525 $10,000 $10,000
1990 $ 9,782 $10,175 $10,509
1991 $11,149 $10,693 $12,204
1992 $12,484 $11,029 $13,120
1993 $13,998 $11,342 $14,579
1994 $12,959 $11,756 $14,069
1995 $14,833 $12,432 $16,777
1996 $16,077 $13,087 $17,674
Mar-97 $16,376 $13,243 $17,522
</TABLE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Growth Fund-
A Shares from 9/4/90 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS GROWTH FUND-A GROWTH FUND S&P 500
<S> <C> <C>
1990 $ 9,525 $10,000
1990 $10,478 $10,898
1991 $14,690 $14,226
1992 $14,878 $15,320
1993 $15,524 $16,850
1994 $14,635 $17,073
1995 $18,649 $23,476
1996 $25,073 $28,933
Mar-1997 $23,566 $29,708
</TABLE>
Growth of a $10,000 Investment Over Time
Based on a hypothetical investment made in the CALAMOS Growth Fund-
C Shares from 9/3/96 through 3/31/97. Returns are adjusted for load.
Past performance is not an indication of future results.
<TABLE>
<CAPTION>
CALAMOS GROWTH FUND-C/shrs GROWTH FUND S&P 500
<S> <C> <C>
1996-3 $10,000 $10,000
1996-4 $11,223 $10,846
1997-1 $10,429 $11,137
</TABLE>
Growth of a $10,000 Investment Since Inception
Based on a hypothetical investment made in the CALAMOS Global Growth
and Income Fund-A from 9/9/96 through 3/31/97. Returns are adjusted
for load. Past performance is not an indication of future results.
<TABLE>
<CAPTION>
GLOBAL GROWTH & INCOME-A GLB GROWTH & INCOME MSCI WORLD
<S> <C> <C>
1996-3 $ 9,525 $10,000
1996-4 $10,041 $10,881
1997-1 $10,289 $10,924
</TABLE>
30
<PAGE>
Growth of a $10,000 Investment Since Inception
Based on a hypothetical investment made in the CALAMOS Global Growth
and Income Fund-C from 9/24/96 through 3/31/97. Returns are adjusted
for load. Past performance is not an indication of future results.
Global Growth & Income-C/shrs Glb Growth & MSCI World
1996-3 $10,000 $10,000
1996-4 $10,543 $10,469
1997-1 $10,656 $10,511
31
<PAGE>
CALAMOS FAMILY OF FUNDS
STANDARDIZED PERFORMANCE
<TABLE>
<CAPTION>
Total Return Average Annual Total Return
------------- -----------------------------------------------
1 Year 5 Years 10 Years Since Inception
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Convertible Fund
A Shares--
Inception: 6/21/85 12.94% 7.59% 12.47% 11.39% 9.78% 9.25% 11.17% 10.71%
C Shares--
Inception: 7/5/96 NA NA NA NA NA NA 11.12%/1/ NA
Growth and Income Fund
A Shares--
Inception: 9/22/88 12.86% 7.49% 13.34% 12.25% NA NA 13.60% 12.95%
C Shares--
Inception: 8/5/96 NA NA NA NA NA NA 10.83%/1/ NA
Strategic Income Fund
A Shares--
Inception: 9/4/90 7.42% 2.34% 7.26% 6.21% NA NA 8.59% 7.79%
Growth Fund
A Shares--
Inception: 9/4/90 19.08% 13.46% 11.04% 9.97% NA NA 14.77% 13.92%
C Shares--
Inception: 9/3/96 NA NA NA NA NA NA 5.35%/1/ NA
Global Growth and
Income Fund
A Shares--
Inception: 9/9/96 NA NA NA NA NA NA 8.04%/1/ 2.89%/1/
C Shares--
Inception: 9/24/96 NA NA NA NA NA NA 7.64%/1/ NA
</TABLE>
This chart provides performance return numbers for the five Funds and shows
both non-load-adjusted and load-adjusted returns, taking into consideration
the maximum 4.75% sales charge on A shares. Total return and average annual
total return performance measure net investment income and capital gain or
loss from portfolio investments and reflect changes in share price,
reinvestment of income and capital gain distributions. Returns for periods of
less than one year are not annualized.
Performance has not been adjusted for the sales charge in the UNSHADED area of
the chart.
Performance has been adjusted for the 4.75% sales charge in the SHADED area of
the chart.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that an investor's shares when redeemed may
be worth more or less than their original cost.
/1/Total return is not annualized.
32
<PAGE>
PORTFOLIO TRANSACTIONS
Consistent with the Trust's policy of obtaining best price and execution on
portfolio transactions, the trustees have determined that portfolio
transactions for a Fund may be executed through CFS if, in the judgment of the
Adviser, the use of CFS is likely to result in a combination of net price and
execution at least as favorable to the Fund as those available from other
qualified brokers and if, in such transactions, CFS charges the Fund
commission rates consistent with those charged by CFS to comparable
unaffiliated customers in similar transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable combination
of net price and execution available and such other policies as the trustees
may determine, the Adviser may consider sales of shares of a Fund as a factor
in the selection of broker-dealers to execute portfolio transactions for that
Fund.
THE TRUST AND ITS SHARES
Each Fund is a series of Calamos Investment Trust (the "Trust"), which was
organized as a Massachusetts business trust on December 21, 1987 and is an
open-end diversified management investment company. Prior to June 23, 1997 the
name of the Trust was CFS Investment Trust. Growth and Income Fund was named
"Calamos Small/Mid Cap Convertible Fund" prior to April 29, 1994.
SHARES
Under the terms of the Agreement and Declaration of Trust, the trustees may
issue an unlimited number of shares of beneficial interest without par value
for each series of shares authorized by the trustees and the trustees may
divide the shares of any series into two or more classes of shares of that
series. Currently the Trust has five series in operation, and each series
offers three classes of shares (Class A, Class C and Class I). All shares
issued will be fully paid and non-assessable and will have no preemptive or
conversion rights.
Class I shares of the Funds, which are offered only with a minimum initial
investment of $5 million, do not bear any sales, marketing or distribution
expenses. In the future, the board of trustees may authorize the issuance of
shares of additional series and additional classes of shares of any series.
Different classes of shares of a single series may bear different sales
charges and other expenses which may affect their relative performance.
Information regarding other classes of shares may be obtained by calling the
Distributor at the telephone number shown on the back cover page of this
prospectus or from any institution that makes available shares of the Funds.
Each Fund's shares are entitled to participate pro rata in any dividends and
other distributions declared by the Trust's board of trustees with respect to
shares of the Fund. All shares of a Fund have equal rights in the event of
liquidation of the Fund.
Under Massachusetts law, the shareholders of the Trust may, under certain
circumstances, be held personally liable for the Trust's obligations. However,
the Trust's Declaration of Trust disclaims liability of the shareholders,
trustees, and officers of the Trust for acts or obligations of a Fund, which
are binding only on the assets and property of the Fund. The Declaration of
Trust requires that notice of such disclaimer be given in each agreement,
obligation, or contract entered into or executed by the Trust or the board of
trustees. The Declaration of Trust provides for indemnification out of a
Fund's assets of all losses and expenses of any Fund shareholder held
personally liable for the Fund's obligations. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is remote, since
it is limited to circumstances in which the disclaimer is inoperative and the
Fund itself is unable to meet its obligations.
VOTING RIGHTS
Each share has one vote and fractional shares have fractional votes. As a
business trust, the Trust is not required to hold annual shareholder meetings.
However, special meetings may be called for purposes such as electing or
removing trustees, changing
33
<PAGE>
fundamental policies or approving an investment advisory agreement. On any
matters submitted to a vote of shareholders, shares are voted by individual
series or class and not in the aggregate, except when voting in the aggregate
is required by the 1940 Act or other applicable law. Shares of a Fund are not
entitled to vote on any matter not affecting that Fund. All shares of the
Trust vote together in the election of trustees.
CERTAIN SHAREHOLDERS
At May 31, 1997, John P. Calamos had the power to vote and dispose of 206,908
shares (50.2%) of Growth Fund and 189,772 shares (30.1%) of Growth and Income
Fund. Of these shares, 85,442 shares (20.8%) of Growth Fund and 120,547 shares
(19.1%) of Growth and Income Fund were held by CFS 401(k) Profit Sharing Plan
and Trust, of which Mr. Calamos is trustee and in which Mr. Calamos and other
employees of Calamos Financial Services, Inc. and Calamos Asset Management,
Inc. are participants. No other person is known to own beneficially 25% or
more of any Fund. Under the 1940 Act, a holder of more than 25% of a Fund's
outstanding shares is presumed to control the Fund. The address of Mr. John
Calamos is 1111 East Warrenville Road, Naperville, Illinois 60563-1493.
SHAREHOLDER INQUIRIES
Inquiries regarding the Funds may be directed to the address or telephone
numbers on the cover of this prospectus.
APPENDIX--DESCRIPTION OF BOND RATINGS
A rating of a rating service represents the service's opinion as to the credit
quality of the security being rated. However, the ratings are general and are
not absolute standards of quality or guarantees as to the creditworthiness of
an issuer. Consequently, the Funds' investment adviser believes that the
quality of debt securities in which a Fund invests should be continuously
reviewed. A rating is not a recommendation to purchase, sell or hold a
security, because it does not take into account market value or suitability
for a particular investor. When a security has received a rating from more
than one service, each rating should be evaluated independently. Ratings are
based on current information furnished by the issuer or obtained by the
ratings services from other sources which they consider reliable. Ratings may
be changed, suspended or withdrawn as a result of changes in or unavailability
of such information, or for other reasons.
The following is a description of the characteristics of ratings used by
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").
MOODY'S RATINGS
AAA--Bonds rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. Although the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such bonds.
AA--Bonds rated Aa are judged to be high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa bonds or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risk appear somewhat larger than in Aaa bonds.
A--Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA--Bonds rated Baa are considered as medium-grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain
34
<PAGE>
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA--Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms
of the contract over any long period of time may be small.
CAA--Bonds rated Caa are of poor standing. Such bonds may be in default or
there may be present elements of danger with respect to principal or interest.
CA--Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
S&P RATINGS
AAA--Bonds rated AAA have the highest rating. Capacity to pay principal and
interest is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay principal and interest
and differ from AAA bonds only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than bonds in higher rated
categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
capacity than for bonds in higher rated categories.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation among such bonds and CC the
highest degree of speculation. Although such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
35
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Key Features............................................................... 2
Expenses................................................................... 3
Financial Highlights....................................................... 5
Investment Objectives and Policies......................................... 11
Common Investment Practices................................................ 12
Risk of Investment......................................................... 19
Investment Restrictions.................................................... 19
How to Purchase Shares..................................................... 20
How to Redeem Shares....................................................... 24
Shareholder Services....................................................... 25
Dividends and Distributions................................................ 26
Taxes...................................................................... 26
Management of the Funds.................................................... 26
Performance Information.................................................... 28
Portfolio Transactions..................................................... 33
The Trust and Its Shares................................................... 33
Appendix--Description of Bond Ratings...................................... 34
</TABLE>
INVESTMENT ADVISER AND
TRANSFER AGENT:
Calamos Asset Management, Inc.(R)
1111 East Warrenville Road
Naperville, Illinois 60563-1493
DISTRIBUTOR:
Calamos Financial Services, Inc.(R)
1111 East Warrenville Road
Naperville, Illinois 60563-1493
COUNSEL:
Bell, Boyd & Lloyd
Chicago, Illinois
INDEPENDENT AUDITORS:
Ernst & Young LLP
Chicago, Illinois
NO DEALER, SALESMAN OR ANY OTHER PERSON IS AUTHORIZED, IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS, TO ACT AS AGENT FOR CALAMOS INVESTMENT
TRUST, NOR IS ANY PERSON AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REP-
RESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN SUPPLEMENTARY INFORMATION
OR IN SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY CALAMOS INVESTMENT TRUST, AND
NO PERSON IS ENTITLED TO RELY UPON ANY INFORMATION OR REPRESENTATION NOT CON-
TAINED HEREIN OR THEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
LOGO
Convertible Fund
Growth And Income Fund
Strategic Income Fund
Growth Fund
Global Growth And Income Fund
PROSPECTUS
June 24, 1997
- --------------------------------------------------------------------------------
Calamos Investment Trust . 1111 East Warrenville Road
Naperville, Illinois 60563-1493 . (800) 823-7386
<PAGE>
Prospectus June 24, 1997
CALAMOS FAMILY OF FUNDS/(R)/
Institutional Shares
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Convertible Fund Seeks current income. Growth is a secondary
objective that the Fund also considers when
consistent with its objective of current income.
- --------------------------------------------------------------------------------
Growth and Income Fund Seeks high long-term total return through capital
appreciation and current income derived from a
diversified portfolio of convertible, equity and
fixed-income securities.
- --------------------------------------------------------------------------------
Strategic Income Fund Seeks high current income consistent with
stability of principal, primarily through
investment in convertible securities and employing
short selling to enhance income and hedge against
market risk.
- --------------------------------------------------------------------------------
Growth Fund Seeks long-term capital growth.
- --------------------------------------------------------------------------------
Global Growth and Seeks high long-term total return through capital
Income Fund appreciation and current income derived from a
globally diversified portfolio of convertible,
equity and fixed-income securities.
- --------------------------------------------------------------------------------
</TABLE>
Minimum initial investment: $5 million
----------------------------
Although each Fund is permitted to invest without limit in debt securities rated
below investment grade, commonly known as "junk bonds," only Strategic Income
Fund intends to invest as much as 35% or more of its net assets in such
securities. Those securities entail greater risks, including default risks, than
those found in higher rated securities. Investors should carefully consider
those risks before investing. See "Debt Securities."
This prospectus contains information you should know before investing in the
funds. Please read it carefully and retain it for future reference. A statement
of additional information dated the date of this prospectus and containing more
detailed information about the funds has been filed with the Securities and
Exchange Commission and (together with any supplements thereto) is incorporated
herein by reference. The statement of additional information and the most recent
financial statements are available without charge at the address and telephone
numbers set forth above.
Shares of the Funds are neither insured nor guaranteed by the U.S. Government or
any government agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
KEY FEATURES
INVESTMENT OBJECTIVES
The investment objectives of the Funds are stated on the cover of this
prospectus. There can be no assurance that a Fund will achieve its investment
objective.
INVESTMENT RISKS
The Funds are designed for long-term investors who can accept the fluctuations
in portfolio value and other risks associated with seeking high current income
or long-term capital appreciation through investments in securities. The Funds'
investments in debt securities rated below investment grade, foreign securities
and options and futures, and use of short sales also present risks. The Funds
may have high portfolio turnover. See "Common Investment Practices" and "Risk of
Investment" for a more complete description of the risks of investing in each of
the Funds.
DIVIDENDS AND CAPITAL GAINS
Growth Fund pays income dividends annually. Each other Fund pays income
dividends quarterly. Capital gains, if any, are distributed by each Fund at
least annually. Distributions are automatically reinvested in additional shares
at net asset value unless payment in cash is requested. See "Dividends and
Distributions."
PURCHASES AND REDEMPTIONS
Class I shares of each Fund (referred to in this prospectus as "Institutional
Shares") are offered without any sales charge and are not subject to any 12b-1
charges. Each Fund also offers shares of two other classes of shares that bear
certain expenses not borne by the Institutional Shares.
Each class of shares of a Fund represents interests in the same portfolio of
investments of the Fund. The minimum initial investment in Institutional Shares
is $5 million. Shares are redeemable at net asset value, which may be more or
less than original cost. See "How to Purchase Shares" and "How to Redeem
Shares."
INVESTMENT ADVISER
Calamos Asset Management, Inc./(R)/
("CAM" or the "Adviser").
DISTRIBUTOR
Calamos Financial Services, Inc./(R)/
("CFS" or the "Distributor").
2
<PAGE>
EXPENSES
The following tables show certain information concerning shareholder transaction
expenses and projected annual fund operating expenses for Institutional Shares
of the Funds:
<TABLE>
<CAPTION>
Global
Growth and Strategic Growth and
Convertible Income Income Growth Income
Fund Fund Fund Fund Fund
---------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge on purchases
(as a percentage of offering price)............ None None None None None
Maximum sales charge on reinvested
dividends...................................... None None None None None
Deferred sales charge......................... None None None None None
Exchange fee................................... None None None None None
Redemption fees (b)............................ None None None None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees................................ .75% .75% .75% 1.00% 1.00%
12b-1 fees..................................... None None None None None
Other expenses (after expense reimbursement)... .25 .75 (a) .75 (a) .50 (a) .50 (a)
---- ------ ------ ------ ------
Total Fund operating expenses
(after expense reimbursement).............. 1.00% 1.50% 1.50% 1.50% 1.50%
</TABLE>
- ------------------
(a) Because Global Growth and Income Fund is newly organized, its "Other
expenses" reflect an estimate. The Adviser has voluntarily undertaken to
limit the annual ordinary operating expenses of Institutional Shares of
each Fund, as a percentage of the average net assets of the class, to
1.50%, and the percentages shown for "Other expenses" take into account
expected expense reimbursements. Absent that limitation, the "Other
expenses" and "Total Fund operating expenses," respectively, for
Institutional Shares of the Funds other than Convertible Fund would be .85%
and 1.60% for Growth and Income Fund; 3.85% and 4.60% for Strategic Income
Fund; 1.20% and 2.20% for Growth Fund; and 2.30% and 3.30% for Global
Growth and Income Fund. See "Management of the Funds - The Adviser." Each
Fund may incur expenses for dividends paid on short positions that are not
subject to the Adviser's expense limitation and that are not included in
"Other expenses." Only Strategic Income Fund had such expenses, which
amounted to .10% of average net assets.
(b) A service charge of $15 is deducted from proceeds of redemption paid by
wire.
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming (1) a 5%
annual return as required by the Securities and Exchange Commission for purposes
of this example and (2) redemption at the end of each time period:
3
<PAGE>
<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
---- ----- ----- -----
<S> <C> <C> <C> <C>
Convertible Fund $10 $32 $55 $122
Growth and Income Fund 15 47 82 179
Strategic Income Fund 16 50 87 190
Growth Fund 15 47 82 179
Global Growth and Income Fund 15 47 N/A N/A
</TABLE>
The purpose of these tables and the examples is to assist you in understanding
the various costs and expenses that an investor in a Fund bears, directly or
indirectly. The examples assume that the percentage amounts listed under Annual
Fund Operating Expenses remain the same through each of the periods, all income
dividends and capital gains distributions are reinvested in additional shares of
the Funds, and each Fund's net assets remain constant.
The examples should not be considered a representation of past or future
expenses; the actual expenses of the Funds and the annual rates of return may be
greater or less than those shown. Although information such as that shown in the
example is useful in reviewing the expenses of the Funds and in providing a
basis for comparison of those expenses with the expenses of other mutual funds,
it should not be used for comparison with other investments using different
assumptions or time periods.
------------------------------------------------------
FINANCIAL HIGHLIGHTS
Institutional Shares of the Funds have not previously been offered. However, the
Funds' annual report, which may be obtained from the Trust upon request at no
charge, contains financial and performance information for the Class A shares
and Class C shares of the Funds.
INVESTMENT OBJECTIVES AND POLICIES
Each Fund has a different investment objective and may invest in different
securities. The Funds differ principally in (i) the relative importance each
places on growth potential and current income as considerations in selecting
investments, and (ii) the types of securities selected for investment.
The investment objectives of a Fund may not be changed without the approval of a
"majority of the outstanding" shares of that Fund, as defined in the Investment
Company Act of 1940. There can be no assurance that a Fund will achieve its
objectives.
CONVERTIBLE FUND
Convertible Fund seeks current income. Growth is a secondary objective that the
Fund also considers when consistent with its objective of current income.
The Fund invests in a diversified portfolio of convertible securities, primarily
convertible bonds and convertible preferred stocks. See "Common Investment
Practices - Convertible Securities."
A significant portion of the Fund's portfolio ordinarily is invested in a number
of long-term core positions, selected on the basis of the investment adviser's
assessment of the long-term value of an investment in that issuer. The Fund's
investments are concentrated in investment grade securities,
4
<PAGE>
and the Fund expects to maintain, over the long-term, an average credit quality
of BBB or better. However, debt securities acquired by the Fund may be unrated
or may be rated below investment grade, which would present increased risk. See
"Common Investment Practices - Debt Securities" for more information, including
an analysis of the Fund's past investments in debt securities.
The Fund is substantially invested in convertible securities, including
synthetic convertible securities, under normal market conditions. See "Common
Investment Practices - Convertible Securities." At least 65% of the Fund's
assets ordinarily is invested in "true" convertibles. Any portion of the Fund's
assets not invested in convertible securities as described above may be invested
in non-convertible equity and fixed-income securities, and other securities as
described under "Common Investment Practices."
GROWTH AND INCOME FUND
Growth and Income Fund seeks high long-term total return through capital
appreciation and current income. Under normal market conditions the Fund invests
at least 65% of its total assets in a diversified portfolio of convertible,
equity and fixed-income securities, with equal emphasis on capital appreciation
and current income. See "Common Investment Practices - Convertible Securities."
The Fund's assets not invested in convertible securities are invested in common
stocks that, in the judgment of the investment adviser, provide opportunities
for long-term capital appreciation, or in other securities as described under
"Common Investment Practices."
The Fund generally invests in smaller and medium-sized companies, the securities
of which tend to be more volatile and less liquid than the securities of larger
companies. The debt securities of smaller and medium-sized companies also are
less likely to be rated investment grade, and so the debt securities acquired by
the Fund may be unrated or rated below investment grade, which would present
increased risk. See "Common Investment Practices - Debt Securities" for more
information, including an analysis of the Fund's past investment in debt
securities.
STRATEGIC INCOME FUND
Strategic Income Fund seeks high current income consistent with stability of
principal, primarily through investment in convertible securities and employing
short selling to enhance income and hedge against market risk. Under normal
market conditions, the Fund will invest at least 65% of its assets in income-
producing securities. In furtherance of its objective, the Fund may also write
covered call options and purchase put options and invest in other types of
securities. See "Common Investment Practices."
Any assets of the Fund not invested in convertible securities, common stock
received upon conversion or exchange of convertible securities, or in short
sales with respect to portfolio securities may be invested in other securities
including non-convertible equity and debt securities, options, warrants,
securities of the U.S. Government, its agencies and instrumentalities,
repurchase agreements and money market instruments.
GROWTH FUND
Growth Fund seeks long-term capital growth.
5
<PAGE>
In pursuing Growth Fund's investment objective, the Adviser seeks out securities
that, in its opinion, are undervalued and offer above-average potential for
earnings growth. The selection process emphasizes earnings growth potential
coupled with financial strength and stability. The Adviser performs its own
fundamental analysis, in addition to depending upon recognized rating agencies
and other sources. The portfolio may include securities of well-established
companies with large market capitalizations as well as small, unseasoned
companies. The Fund will not invest more than 5% of its assets in the securities
of unseasoned issuers.
The Adviser anticipates that common stocks will generally afford the best
opportunities for capital growth. However, the Fund may invest in securities
convertible into common stock, preferred stocks, and obligations such as bonds,
debentures and notes that, in the opinion of the Adviser, present opportunities
for capital appreciation. The percentages of Fund assets invested in various
types of securities will vary in accordance with the judgment of the Adviser.
There are no limitations on the amount of the Fund's assets that may be
allocated to the various types of securities, or on the ratings of debt
securities acquired by the Fund. The Fund may also hold cash and cash
equivalents and may invest in other types of securities as described under
"Common Investment Practices."
GLOBAL GROWTH AND INCOME FUND
Global Growth and Income Fund seeks high long-term total return through capital
appreciation and current income. Under normal market conditions the Fund invests
at least 65% of its total assets in a globally diversified portfolio of
convertible, equity and fixed-income securities with equal emphasis on capital
appreciation and current income. Normally the Fund invests in the securities
markets of at least three countries, which may include the United States.
The Fund generally invests in securities of companies that are medium-sized and
larger relative to the securities markets of the countries in which those
securities are traded. A significant portion of its assets will be invested in
securities of foreign issuers, which may be more volatile and less liquid than
the securities of United States companies. See "Common Investment Practices -
Foreign Securities" for more information.
The Fund's convertible and fixed-income investments are concentrated in
investment grade securities, and the Fund expects to maintain, over the long
term, an average credit quality of BBB or better or, in the case of unrated
securities, of comparable quality as determined by the Adviser. The debt
securities of foreign issuers are less likely to be rated by United States
rating agencies.
Common Investment Practices
GENERAL
In selecting portfolio securities for a Fund, including unrated securities, the
investment adviser performs its own credit analysis in addition to considering
evaluations by recognized rating agencies and other sources, giving
consideration to, among other things, the issuer's financial soundness, its
anticipated cash flow, interest and dividend coverage, asset coverage, sinking
fund provisions, responsiveness to changes in interest rates, business
conditions, and liquidation value relative to the market price of the security.
Securities
6
<PAGE>
received by a Fund upon conversion or exercise of warrants and securities
remaining upon the breakup of units or detachments of warrants may be retained
to permit orderly disposition or to establish long-term holding periods for
federal income tax purposes. Occasionally securities may be purchased on a when-
issued or delayed-delivery basis.
DEBT SECURITIES
In pursuing its investment objectives, each Fund may invest in convertible and
non-convertible debt securities, including lower-rated securities (i.e.,
securities rated BB or lower by Standard & Poor's Corporation ("S&P") or Ba or
lower by Moody's Investor Services, Inc. ("Moody's"), commonly called "junk
bonds") and securities that are not rated. There are no restrictions as to the
ratings of debt securities acquired by a Fund or the portion of a Fund's assets
that may be invested in debt securities in a particular ratings category, except
that no Fund will acquire a security rated below C.
Securities rated BBB or Baa are considered to be medium grade and to have
speculative characteristics. Lower-rated debt securities, in which Strategic
Income Fund intends to invest as much as 35% or more of its assets, are
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. Investment in medium- or lower-quality debt securities
involves greater investment risk, including the possibility of issuer default or
bankruptcy. An economic downturn could severely disrupt the market for such
securities and adversely affect the value of such securities. In addition,
lower-quality bonds are less sensitive to interest rate changes than
higher-quality instruments and generally are more sensitive to adverse economic
changes or individual corporate developments. During a period of adverse
economic changes, including a period of rising interest rates, issuers of such
bonds may experience difficulty in servicing their principal and interest
payment obligations.
Achievement by each Fund of its investment objectives will be more dependent on
the Adviser's credit analysis than would be the case if the Fund were investing
in higher-quality debt securities. Since the ratings of rating services (which
evaluate the safety of principal and interest payments, not market risks) are
used only as preliminary indicators of investment quality, the Adviser employs
its own credit research and analysis. These analyses may take into consideration
such quantitative factors as an issuer's present and potential liquidity,
profitability, internal capability to generate funds, debt/equity ratio and debt
servicing capabilities, and such qualitative factors as an assessment of
management, industry characteristics, accounting methodology, and foreign
business exposure.
Medium- and lower-quality debt securities may be less marketable than higher-
quality debt securities because the market for them is less broad. The market
for unrated debt securities is even narrower. During periods of thin trading in
these markets, the spread between bid and asked prices is likely to increase
significantly, and a Fund may have greater difficulty selling its portfolio
securities. See "Net Asset Value." The market value of these securities and
their liquidity may be affected by adverse publicity and investor perceptions.
The table below shows the percentages of net assets (on a dollar-weighted
monthly average basis) invested in debt securities in each ratings category
during the year ended
7
<PAGE>
March 31, 1997 for each Fund other than Growth Fund, which did not invest in
debt securities rated below investment grade during that period.
<TABLE>
<CAPTION>
Growth Global
and Strategic Growth and
Rating Convertible Income Income Income
Category Fund Fund Fund Fund
- --------------- ------------ ------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Govt. 0.15% 17% 0% 8
AAA - 0 0 0
AA 0.03 2 0 0
A 0.10 4 9 7
BBB 0.15 11 24 12
BB 0.03 7 6 0
B 0.03 10 32 1
CCC - 0 0 0
not rated 0.07 3 9 12
</TABLE>
The percentages in the table are based upon ratings by S&P, or by Moody's if the
security was not rated by S&P. A description of the ratings used by S&P and
Moody's is included as an appendix to this prospectus.
CONVERTIBLE SECURITIES
Although each Fund may invest in convertible securities, only Convertible Fund
has a policy of investing at least 65% of its assets in convertible securities
under normal circumstances. Growth and Income Fund and Strategic Income Fund
expect that a significant portion of their respective assets will be invested in
convertible securities, but there is no minimum percentage of their assets that
will be so invested.
The Adviser believes that the characteristics of convertible securities make
them appropriate investments for the Funds. These characteristics include: the
potential for capital appreciation as the value of the underlying common stock
increases; the relatively high yield received from dividend or interest payments
as compared to common stock dividends; and decreased risks of decline in value
relative to the underlying common stock due to their fixed-income nature. As a
result of the conversion feature, however, the interest rate or dividend
preference on a convertible security is generally less than would be the case if
the securities were issued in non-convertible form.
Convertible securities include any corporate debt security or preferred stock
that may be converted into underlying shares of common stock. The common stock
underlying convertible securities may be issued by a different entity than the
issuer of the convertible securities. Convertible securities entitle the holder
to receive interest payments paid on corporate debt securities or the dividend
preference on a preferred stock until such time as the convertible security
matures or is redeemed or until the holder elects to exercise the conversion
privilege.
The value of convertible securities is influenced by both the yield of non-
convertible securities of comparable issuers and by the value of the underlying
common stock. The value of a convertible security viewed without regard to its
conversion feature (i.e., strictly on the basis of its yield) is sometimes
referred to as its "investment value." The investment value of the convertible
security will typically fluctuate inversely with changes in prevailing interest
rates. However, at the same time, the convertible security will be influenced by
its "conversion value," which is the market value of the underlying common stock
that would be obtained if the convertible security were converted. Conversion
value fluctuates directly with the price of the underlying common stock.
If, because of a low price of the common stock, the conversion value is
substantially below the investment value of the
8
<PAGE>
convertible security, the price of the convertible security is governed
principally by its investment value. If the conversion value of a convertible
security increases to a point that approximates or exceeds its investment value,
the value of the security will be principally influenced by its conversion
value. A convertible security will sell at a premium over its conversion value
to the extent investors place value on the right to acquire the underlying
common stock while holding a fixed income security.
Holders of convertible securities have a claim on the assets of the issuer prior
to the common stockholders but may be subordinated to holders of similar non-
convertible securities of the same issuer. A convertible security may be subject
to redemption at the option of the issuer at a price established in the
governing instrument pursuant to which the convertible security was issued. If a
convertible security held by a Fund is called for redemption, the Fund will be
required to redeem the security, convert it into the underlying common stock or
sell it to a third party. Certain convertible debt securities may provide a put
option to the holder which entitles the holder to cause the security to be
redeemed by the issuer at a premium over the stated principal amount of the debt
security.
"Synthetic" convertible securities, for purposes of this prospectus, are created
by combining separate securities which possess the two principal characteristics
of a true convertible security, i.e., fixed income ("fixed-income component")
and the right to acquire equity securities ("convertible component"). The fixed-
income component is achieved by investing in non-convertible fixed-income
securities such as non-convertible bonds, preferred stocks and money market
instruments. The convertible component is achieved by investing in warrants,
exchange or NASDAQ listed call options, or stock index call options granting the
holder the right to purchase a specified quantity of securities within a
specified period of time at a specified price or to receive cash in the case of
stock index options. Synthetic convertible securities are not considered
convertible securities for purposes of the policies of Convertible Fund and
Growth and Income Fund to normally invest at least 65% of total assets in
convertible securities.
The synthetic convertible security differs from the true convertible security in
several respects. Unlike a true convertible security, which is a single security
having a unitary market value, a synthetic convertible security is composed of
two or more separate securities, each with its own market value. Therefore, the
"market value" of a synthetic convertible security is the sum of the values of
its fixed-income component and its convertible component. For this reason, the
values of a synthetic convertible security and a true convertible security will
respond differently to market fluctuations.
More flexibility is possible in the assembly of a synthetic convertible security
than in the purchase of a convertible security. Although synthetic convertible
securities may be selected where the two components are issued by a single
issuer, thus making the synthetic convertible security similar to the true
convertible security, the character of a synthetic convertible security allows
the combination of components representing distinct issuers, when management
believes that such a combination would better promote a Fund's investment
objective. A synthetic convertible security also is a more flexible investment
in that its two components may be purchased separately.
9
<PAGE>
For example, a Fund may purchase a warrant for inclusion in a synthetic
convertible security but temporarily hold short-term investments while
postponing the purchase of a corresponding bond pending development of more
favorable market conditions.
A holder of a synthetic convertible security faces the risk of a decline in the
price of the security or the level of the index involved in the convertible
component, causing a decline in the value of the call option or warrant. Should
the price of the stock fall below the exercise price and remain there throughout
the exercise period, the entire amount paid for the call option or warrant would
be lost. Since a synthetic convertible security includes the fixed-income
component as well, the holder of a synthetic convertible security also faces the
risk that interest rates will rise, causing a decline in the value of the fixed-
income instrument.
FOREIGN SECURITIES
Global Growth and Income Fund may invest all of its assets, and each other Fund
may invest up to 25% of its net assets, in securities of foreign issuers that
are not publicly traded in the United States ("foreign securities"). For this
purpose, foreign securities do not include securities represented by American
Depository Receipts (ADRs) or securities guaranteed by a United States person.
International investing allows you to achieve greater diversification and to
take advantage of changes in foreign economies and market conditions. Many
foreign economies have, from time to time, grown faster than the U.S. economy,
and the returns on investments in those countries have exceeded those of similar
U.S. investments, although there can be no assurance that these conditions will
continue.
You should understand and consider carefully the greater risks involved in
investing internationally. Investing in securities of non-U.S. issuers,
positions in which are generally denominated in foreign currencies, and
utilization of forward foreign currency exchange contracts involve both
opportunities and risks not typically associated with investing in U.S.
securities. These include: fluctuations in exchange rates of foreign currencies;
possible imposition of exchange control regulation or currency restrictions that
would prevent cash from being brought back to the United States; less public
information with respect to issuers of securities; less governmental supervision
of stock exchanges, securities brokers and issuers of securities; different
accounting, auditing and financial reporting standards; different settlement
periods and trading practices; less liquidity and frequently greater price
volatility in foreign markets than in the United States; imposition of foreign
taxes; and sometimes less advantageous legal, operational and financial
protections applicable to foreign subcustodial arrangements.
Although the Funds try to invest in companies and governments of countries
having stable political environments, there is the possibility of restriction of
foreign investment, expropriation of assets, or confiscatory taxation, seizure
or nationalization of foreign bank deposits or other assets, establishment of
exchange controls, the adoption of foreign government restrictions, or other
adverse political, social or diplomatic developments that could affect
investment in those countries.
10
<PAGE>
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the U.S. and other major
markets. There also may be a lower level of monitoring and regulation of
emerging markets and the activities of investors in such markets, and
enforcement of existing regulations has been extremely limited. Economies in
individual emerging markets may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource self-
sufficiency and balance of payments positions. Many emerging market countries
have experienced high rates of inflation for many years, which has had and may
continue to have very negative effects on the economies and securities markets
of those countries.
Any Fund may invest in ADRs that are not sponsored by the issuer of the
underlying security. To the extent it does so, the Fund would probably bear its
proportionate share of the expenses of the depository and might have greater
difficulty in receiving copies of the issuer's shareholder communications than
would be the case with a sponsored ADR.
When a Fund enters into a contract for the purchase or sale of a foreign
portfolio security, it usually is required to settle the purchase transaction in
the relevant foreign currency or receive the proceeds of the sale in that
currency. In either event, the Fund is obliged to acquire or dispose of an
appropriate amount of foreign currency by selling or buying an equivalent amount
of U.S. dollars. The Fund may wish to "lock-in" the U.S. dollar value of a
transaction at or near the time of the purchase or sale of the foreign portfolio
security at the exchange rate or rates then prevailing between the U.S. dollar
and the currency in which the security is denominated. The Fund may accomplish
such "transaction hedging" by purchasing or selling such foreign currencies on a
"spot" (i.e., cash) basis or on a forward basis whereby the Fund purchases or
sells a specific amount of foreign currency, at a price set at the time of the
contract, for receipt or delivery at a specified date or at any time within a
specified time period. In so doing, the Fund will attempt to insulate itself
against possible losses and gains resulting from a change in the relationship
between the U.S. dollar and the foreign currency during the period between the
date the security is purchased or sold and the date on which payment is made or
received. Similar transactions may be entered into by using other currencies if
the Fund seeks to move investments denominated in one currency to investments
denominated in another.
When a Fund invests in foreign securities, in addition to the risk of change in
the market value of portfolio securities, the value of the portfolio in U.S.
dollars is subject to fluctuations in the exchange rate between the foreign
currencies and the U.S. dollar. When, in the opinion of the Adviser, it is
desirable to limit or reduce exposure in a foreign currency in order to moderate
potential changes in the U.S. dollar value of the portfolio, the Fund may enter
into a forward currency exchange contract to sell or buy such foreign currency
(or another foreign currency that acts as a proxy for that currency) by which
the U.S. dollar value of certain underlying foreign portfolio securities can be
approximately matched by
11
<PAGE>
an equivalent U.S. dollar liability. This technique is known as "currency
hedging" and, by locking in a rate of exchange, is intended to moderate or
reduce the risk of change in the U.S. dollar value of the Fund's portfolio only
during the period of the forward contract. Forward contracts are usually entered
into with banks and broker-dealers, are not exchange traded, and are usually for
less than one year, but may be renewed. A default on the contract would deprive
the Fund of unrealized profits or force the Fund to cover its commitments for
purchase or sale of currency, if any, at the current market price.
Neither type of foreign currency transaction will eliminate fluctuations in the
prices of the Fund's portfolio securities or prevent loss if the price of such
securities should decline. In addition, such forward foreign currency exchange
contracts will diminish the benefit of the appreciation in the U.S. dollar value
of that foreign currency. For further information on forward foreign currency
exchange transactions, see the Statement of Additional Information.
At March 31, 1997, Global Growth and Income Fund had invested 17% of its net
assets in foreign securities. No other Fund had as much as 1% of its net assets
so invested.
WARRANTS
Each Fund may invest up to 5% of the value of its net assets at the time of
purchase in warrants (not including those acquired in units or attached to other
securities), including up to 2% of its net assets in warrants the underlying
common stock of which is not listed on the New York or American stock exchange
or, in the case of Global Growth and Income Fund, a recognized foreign exchange.
A warrant is a right to purchase common stock at a specific price (usually at a
premium above the market value of the underlying common stock at time of
issuance) during a specified period of time. A warrant may have a life ranging
from less than a year to twenty years or longer, but a warrant becomes worthless
unless it is exercised or sold before expiration. In addition, if the market
price of the common stock does not exceed the warrant's exercise price during
the life of the warrant, the warrant will expire worthless. Warrants have no
voting rights, pay no dividends and have no rights with respect to the assets of
the corporation issuing them. The percentage increase or decrease in the value
of a warrant may tend to be greater than the percentage increase or decrease in
the value of the underlying common stock.
OPTIONS AND FUTURES
Consistent with its objective, each Fund may purchase and write both call
options and put options on securities and on indexes, and may enter into
interest rate and index futures contracts and options on such futures contracts
("derivative products") in order to provide additional revenue, or to hedge
against changes in security prices or interest rates. Each Fund will limit its
use of futures contracts and options on futures contracts to hedging
transactions to the extent required to do so by regulatory agencies.
An option on a security (or index) is a contract that gives the holder, in
return for a premium, the right to buy (call) from or sell (put) to the option
seller (writer) the security (or the cash value of the index) underlying the
option at a designated price during the term of the option. Prior to exercise or
expiration, an option may be closed out by an offsetting purchase or sale of an
option of the same series. A Fund may write a call or put option only if the
option is covered.
12
<PAGE>
There are several risks associated with the use of derivative products. As the
writer of a covered call option, a Fund foregoes, during the option's life, the
opportunity to profit from increases in market value of the security covering
the call option above the call price. Because of low margin deposits required,
the use of futures contracts involves a high degree of leverage and may result
in losses in excess of the amount of the margin deposit. Since there can be no
assurance that a liquid market will exist when a Fund seeks to close out a
derivative product position, these risks may become magnified. Because of these
and other risks, successful use of derivative products depends on the Adviser's
ability to predict correctly changes in the level and the direction of stock
prices, interest rates and other market factors, but even a well-conceived
transaction may be unsuccessful because of an imperfect correlation between the
securities and derivative product markets. For a more complete explanation,
please refer to the Statement of Additional Information.
SHORT SALES
Each Fund may attempt to hedge against market risk and enhance income by: (1)
entering into short sales of securities that it currently has the right to
acquire, without payment of any further consideration, through the conversion or
exchange of other securities that it owns or, to a lesser extent, entering into
short sales of securities that it currently owns; and (2) entering into
arrangements with the broker-dealers through which such securities are sold
short to receive income with respect to the proceeds of short sales while the
Fund's short positions remain open.
In addition, Strategic Income Fund may enter into short sales of securities that
it currently has the right to acquire upon payment of additional consideration,
for instance, upon exercise of any option or warrant. This technique would be
used to hedge against market risk in connection with a synthetic convertible
position in the same way selling short a true convertible security owned by a
Fund would hedge against market risk. During the time such a short position is
open, the Fund would maintain in a segregated account with the Fund's custodian,
cash or U.S. Government securities in an amount such that the value of the
segregated account, plus the value of any collateral required to be deposited
with the broker in connection with the short sale, (i) will equal the current
market value of the securities sold short and (ii) will not be less than the
market value of the securities at the time they were sold short. Strategic
Income Fund will conduct its short sales so that no more than 10% of the net
assets of the Fund, when added together, will be (i) deposited with brokers as
collateral, and (ii) allocated to segregated accounts in connection with short
sales, at any time.
Short sales and short sales against the box may protect the Funds against the
risk of losses in the value of their portfolio securities because any unrealized
losses with respect to such portfolio securities should be wholly or partially
offset by a corresponding gain in the short position. However, any potential
gains in such portfolio securities should be wholly or partially offset by a
corresponding loss in the short position. The extent to which such gains or
losses are offset will depend upon the amount of securities sold short relative
to the amount the Fund owns, either directly or indirectly, and, in the case
where the Fund owns convertible securities, changes in the conversion premium.
13
<PAGE>
Short sale transactions involve certain risks. In particular, the variable
degree of correlation between the price movements of the convertible securities
(or portion of the synthetic convertible) and the price movements of the
underlying common stock being sold short creates the possibility that losses on
the short sale hedge position may be greater than gains in the value of the
portfolio securities being hedged. In addition, to the extent that a Fund pays a
conversion premium for a convertible security, the Fund is generally unable to
protect against a loss of such premium by entering into a short sale hedge. In
determining the number of shares to be sold short against the Fund's position in
the convertible securities, the anticipated fluctuation in the conversion
premiums is considered. A Fund will also incur transaction costs in connection
with short sales. Certain provisions of the Internal Revenue Code may limit the
degree to which the Funds are able to enter into short sales, which limitations
might impair a Fund's ability to achieve its investment objective. Please refer
to the Statement of Additional Information for a more complete explanation.
LENDING PORTFOLIO SECURITIES
In order to generate additional income, each Fund may from time to time lend
securities from its portfolio with a value not exceeding 33 1/3% of its total
assets to brokers, dealers and financial institutions such as banks and trust
companies for which it will receive collateral in cash, United States Government
securities or irrevocable letters of credit that will be maintained in an amount
equal to at least 100% of the current market value of the loaned securities.
Cash collateral will be invested in short-term securities, which will increase
the current income of the Fund. Such loans will be terminable at any time. A
Fund will have the right to regain record ownership of loaned securities to
exercise beneficial rights such as voting rights and rights to interest or other
distributions. A Fund may pay reasonable fees to persons unaffiliated with the
Fund for services in arranging such loans. The lending of portfolio securities
exposes a Fund to the risk of failure by the borrower to return the securities
involved in such transactions, in which event the Fund may incur a loss. In an
effort to reduce that risk, the Adviser will monitor the creditworthiness of the
firms to which the Funds lend portfolio securities.
TEMPORARY INVESTMENTS
Each Fund may make temporary investments without limitation when the Adviser
determines that a defensive position is warranted. Such investments may be in
money market instruments, consisting of obligations of, or guaranteed as to
principal and interest by, the U.S. Government or its agencies or
instrumentalities; certificates of deposit, bankers' acceptances and other
obligations of domestic banks having total assets of at least $500 million and
which are regulated by the U.S. Government, its agencies or instrumentalities;
commercial paper rated in the highest category by a recognized rating agency;
and repurchase agreements. In a repurchase agreement, a Fund purchases a
security and the seller (a bank or securities dealer) simultaneously agrees to
repurchase the security at the same price plus an amount equal to an agreed-upon
interest rate, on a specified date. In the event of a bankruptcy or other
default of a seller of a repurchase agreement, a Fund could experience delays in
liquidating the underlying security and losses.
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Risk of Investment
All investments, including those in mutual funds, have risks. No investment is
suitable for all investors. Each Fund is designed for long-term investors who
can accept the fluctuations in portfolio value and other risks associated with
investments in securities. There can be no guarantee that a Fund will achieve
its objective.
Each Fund diversifies its portfolio holdings to reduce risk. Although risk
cannot be eliminated, diversification reduces the impact of any single
investment. Certain risk factors may also be associated with the Funds'
investment practices, including investing in debt securities rated below
investment grade, short selling and investing in foreign securities. Risk
factors specific to those practices are described under "Common Investment
Practices."
Although the Funds do not purchase securities with a view to rapid turnover,
there are no limitations on the length of time portfolio securities must be
held. The turnover rate may vary significantly from year to year. The portfolio
turnover rate of any Fund may be greater than 100%. The portfolio turnover rate
of Global Growth and Income Fund is not expected to exceed 100% under normal
circumstances. A higher rate of portfolio turnover may result in higher
transaction costs and the realization of capital gains and losses. Please refer
to the Statement of Additional Information for a more complete explanation.
Investment Restrictions
In pursuing its investment objective, a Fund will not:
1. As to 75% of its assets, invest more than 5% of its total assets, taken at
market value at the time of a particular purchase, in the securities of
any one issuer, except that this restriction does not apply to securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities;
2. Acquire more than 10%, taken at the time of a particular purchase, of the
outstanding voting securities of any issuer; or
3. Invest in a security if more than 25% of its total assets (taken at market
value at the time of a particular purchase) would be invested in the
securities of issuers in any particular industry, except that
this restriction does not apply to securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities.
These are fundamental restrictions that cannot be changed as to a Fund without
the approval of a "majority of the outstanding" voting securities of that Fund,
as defined in the Investment Company Act of 1940. All investment restrictions
for the Funds are described in the Statement of Additional Information.
How to Purchase Shares
Shares of the Funds are sold by Calamos Financial Services, Inc. ("CFS"), the
Funds' distributor, and may be purchased by check
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or wire sent to CFS. Shares may also be purchased through selected broker-
dealers and banks that have signed agreements with CFS. The minimum initial
investment by a shareholder in Institutional Shares is $5 million. Each Fund
reserves the right to reject any order for the purchase of its shares in whole
or in part, to suspend the sale of its shares to the public in response to
conditions in the securities markets or otherwise or to reduce the minimum
initial investment applicable to certain purchases. Each purchase of shares is
confirmed by a written statement mailed to the shareholder, without issuance of
share certificates.
OFFERING PRICE
Institutional Shares of each Fund are sold without any sales charge. When
placing an order, you must specify that your order is for Institutional Shares.
PURCHASES THROUGH DEALERS
If a purchase order accompanied by payment is received by a dealer prior to the
close of regular session trading on the New York Stock Exchange, the applicable
offering price will be the offering price per share determined on the day the
order is received by the dealer, provided the dealer conveys the order to CFS
prior to 4:30 p.m., Chicago time, on that day. Orders received by dealers or CFS
after such time will be effective on the next business day. Neither CFS nor the
dealers are permitted to withhold placing orders to benefit themselves by a
price change.
PURCHASES BY WIRE
You may also purchase shares by wiring funds from your bank. Please call the
Funds at the numbers on the front cover of this prospectus for wiring
instructions. The applicable offering price for a purchase by wire is the
offering price per share next determined after receipt by the Fund of the wired
funds. After you have wired funds, you must complete the application form and
send it to CFS. A Fund will not honor redemption requests until the completed
application has been received.
PURCHASES BY MAIL
You may also purchase shares of a Fund by sending to CFS a check payable to the
Fund, along with information identifying you and your account number. An initial
investment made by check must be accompanied by a completed application. All
checks should be drawn on a U.S. bank in U.S. funds in order to avoid fees and
delays. A charge may be imposed if any check submitted for investment does not
clear.
PURCHASES BY EXCHANGE
You may purchase shares of a Fund by exchange of shares from another Fund, by
exchange of shares of Money Market Portfolio, Government Securities Portfolio or
Tax-Exempt Portfolio, each a portfolio of Cash Account Trust (such shares are
referred to as "Cash Account Shares") either by mail or by instructing your
broker-dealer or other sales agent, who will communicate your order to CAM. See
"How to Redeem Shares - Redemption by Exchange." You may not make more than four
exchanges from any Fund during any calendar year. No sales charge is imposed on
purchases of Institutional Shares by exchange of Institutional Shares from
another Fund or by exchange of Cash Account Shares provided the aggregate value
of your Institutional Shares of all Funds is at least $5 million. Please review
the information under "How to Redeem Shares - Redemption by Exchange."
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NET ASSET VALUE
The net asset value of the shares of each Fund is determined as of the close of
regular session trading on the New York Stock Exchange, currently 3:00 p.m.
Chicago time, each day that exchange is open for trading by dividing the value
of all of the securities and other assets of the Fund, less its liabilities, by
the number of shares of the Fund outstanding.
Portfolio securities are valued on the basis of market valuation. Securities and
other assets for which market values are not readily available are valued at a
fair value as determined by a method the board of trustees believes represents a
fair value. For a more complete explanation, please refer to the Statement of
Additional Information.
How to Redeem Shares
Shares of the Funds will be redeemed at the respective net asset value next
determined after receipt of a redemption request in good form on any day the New
York Stock Exchange is open for trading. Requests received after the time for
computation of a Fund's net asset value for that day will be processed the next
business day.
REDEMPTION BY MAIL
A written request for redemption (and an endorsed share certificate, if issued)
must be received by the Fund's transfer agent, Calamos Asset Management, Inc.
("CAM"), to constitute a valid redemption request.
Your redemption request must:
1. specify the Fund and the number of shares or dollar amount to be redeemed,
if less than all shares are to be redeemed;
2. be signed by all owners exactly as their names appear on the account; and
3. include a signature guarantee for each signature on the redemption request
by CFS, by a securities firm that is a member of the New York Stock
Exchange, or by a bank, savings bank, credit union, savings and loan
association or other entity that is authorized by applicable state law to
guarantee signatures.
In the case of shares held by a corporation, the redemption request must be
signed in the name of the corporation by an officer whose title must be stated,
and a certified bylaw provision or resolution of the board of directors
authorizing the officer to so act may be required. In the case of a trust or
partnership, the signature must include the name of the registered shareholder
and the title of the person signing on its behalf. Under certain circumstances,
before shares can be redeemed, additional documents may be required in order to
verify the authority of the person seeking to redeem.
REDEMPTION BY WIRE OR TELEPHONE
Broker-dealers or other sales agents may communicate redemption orders by wire
or telephone to CAM. These firms may charge for their services in connection
with your redemption request but neither the Funds nor CAM impose any such
charges.
EXPEDITED REDEMPTION
Unless share certificates have been issued to you, you may have redemption
proceeds of at least $5,000 wired directly to a domestic commercial bank account
or brokerage account that you have previously designated. Normally, such
payments will be transmitted no later than the second business day following
receipt of your redemption request
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(provided redemptions may be made under the general criteria set forth below). A
$15 service charge for payment of redemption proceeds by wire will be deducted
from the proceeds.
REDEMPTION BY EXCHANGE
You may redeem all or any portion of your shares of a Fund and use the proceeds
to purchase shares of any of the other Funds or Cash Account Shares if your
signed, properly completed application is on file. An exchange transaction is a
sale and purchase of shares for federal income tax purposes and may result in
capital gain or loss. You may not make more than four exchanges from any Fund in
any calendar year. Before exchanging into Cash Account Shares, you should obtain
the prospectus relating to those shares from the Adviser and read it carefully.
The exchange privilege is not an offering or recommendation of Cash Account
Shares. The registration of the account to which you are making an exchange must
be exactly the same as that of the account from which the exchange is made and
the amount you exchange must meet any applicable minimum investment of the fund
being purchased. An exchange may be made by following the redemption procedure
described above under "Redemption by Mail" and indicating the fund to be
purchased, except that a signature guarantee normally is not required. An
exchange may also be made by instructing your broker-dealer or other sales
agent, who will communicate your instruction to CAM. No sales charge is imposed
on purchases by exchange.
GENERAL
A check for proceeds of a redemption will not be released until the check used
to purchase the shares has been collected, which is usually no more than 15 days
after purchase. You may avoid this delay by purchasing shares in such a way that
the Fund receives immediate payment for your purchase, such as by wire transfer
of funds or payment by a certified or cashier's check. A Fund may suspend the
right of redemption under certain extraordinary circumstances in accordance with
the rules of the Securities and Exchange Commission. Each Fund reserves the
right upon 30 days' written notice to involuntarily redeem, at net asset value,
the shares of any shareholder whose Institutional Class Shares of all Funds have
an aggregate value of less than $5 million, unless the reduction in value to
less than $5 million was the result of market fluctuation.
Please telephone the Funds if you have any questions about requirements for a
redemption before submitting a request. You may not cancel or revoke your
redemption request once your instructions have been received and accepted.
Shareholder Services
SHAREHOLDER ACCOUNTS
Each shareholder of a Fund receives quarterly account statements showing
transactions in shares of the Fund and with a balance denominated in Fund
shares. A confirmation will be sent to the shareholder upon purchase,
redemption, dividend reinvestment, or change of shareholder address.
SYSTEMATIC WITHDRAWAL PLAN
You may request that a Fund periodically redeem Institutional Shares having a
specified redemption value and send you a check for the proceeds. Withdrawal
proceeds are likely to exceed dividends and
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distributions paid on shares in your account and therefore may deplete and
eventually exhaust your account. The periodic payments are proceeds of
redemption and are taxable as such.
EXCHANGE PRIVILEGE
You may exchange shares of any Fund for shares of another Fund or for Cash
Account Shares or exchange Cash Account Shares for shares of a Fund, without
payment of any sales charge as described above under "How to Purchase Shares -
Purchase by Exchange" and "How to Redeem Shares - Redemption by Exchange."
Dividends and Distributions
Shareholders may receive two kinds of distributions from a Fund: dividends and
capital gains distributions. All dividends and capital gains distributions are
paid in the form of additional shares of the same class credited to your account
at the net asset value per share next computed after the dividend or
distribution is payable to shareholders (without a sales charge) unless you
requested on the account application or in writing that distributions be made in
cash. Convertible Fund, Growth and Income Fund, Strategic Income Fund and Global
Growth and Income Fund declare and pay dividends from net investment income
quarterly; Growth Fund declares dividends annually. Net realized long-term
capital gains, if any, are paid to shareholders by each Fund at least annually.
If two consecutive dividend checks from a Fund are returned as undeliverable,
undelivered dividends will be invested in additional shares of that Fund at the
current net asset value and the account will be designated as a dividend
reinvestment account.
Taxes
Each Fund intends to continue to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code, and thus not be subject to
federal income taxes on amounts it distributes to shareholders.
You may realize a capital gain or capital loss when you redeem (sell) shares.
The federal tax treatment will depend, of course, on how long you owned the
shares and on your individual tax position. You may be subject to state and
local taxes on your investment in a Fund, depending on the laws of your home
state and locality.
Dividends and distributions paid by a Fund are subject to taxation as of the
date of payment, except that distributions declared in October, November or
December to shareholders of record in one of those months will be treated as
received by shareholders on December 31 of the year in which they are declared,
provided they are paid prior to February 1 of the next year.
Dividends from net investment income and capital gains distributions may be
taxed to shareholders at different rates depending on their individual tax
situations. You will be advised annually as to the source of your distributions
for tax purposes. If you are not subject to income taxation, you will not be
required to pay tax on amounts distributed to you.
Each Fund is required by law to withhold federal income tax from reportable
payments (which may include redemptions, capital gains distributions and other
taxable distributions, if any) paid to any non-exempt shareholder who has failed
to certify to the
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Fund that the social security or taxpayer identification number provided to the
Fund is correct and that the shareholder is not subject to backup withholding.
Please refer to the Statement of Additional Information for a more complete
explanation.
Management of the Funds
THE TRUSTEES
The board of trustees of Calamos Investment Trust (the "Trust") has overall
responsibility for the conduct of the affairs of the Trust. The trustees serve
indefinite terms of unlimited duration. The trustees appoint their own
successors, provided that at least two-thirds of the trustees, after any such
appointment, have been elected by the shareholders. Shareholders may remove a
trustee, with or without cause, upon the declaration in writing or vote of two-
thirds of the Trust's outstanding shares. A trustee may be removed with or
without cause upon the written declaration of a majority of the trustees.
THE ADVISER
Each Fund's investments are managed by its investment adviser, Calamos Asset
Management, Inc. ("CAM"). At March 31, 1997, CAM managed approximately $1.9
billion in assets of individuals and institutions. CAM is controlled by John P.
Calamos, who has been engaged in the investment advisory business since 1977.
Mr. Calamos is also the controlling shareholder of CFS, the distributor of the
Funds.
Subject to the overall authority of the board of trustees, CAM furnishes
continuous investment supervision and management to each Fund under a management
agreement and also furnishes office space, equipment and management personnel.
For these services each Fund pays CAM a fee based on average daily net assets
that is accrued daily and paid monthly. The fee paid by Growth Fund is at the
annual rate of 1% of the first $150 million of average net assets and .75% of
average net assets in excess of $150 million. The fee paid by Global Growth and
Income Fund is at the annual rate of 1% of average net assets. The fee paid by
each other Fund is at the annual rate of .75% of the first $150 million of
average net assets and .50% of average net assets in excess of $150 million. CAM
also acts as transfer agent and dividend disbursing agent for the Funds under a
transfer agency agreement.
The management agreement also provides that the total ordinary expenses of a
Fund (exclusive of taxes, interest, extraordinary litigation expenses and
brokers' commissions and other charges relating to the purchase and sale of
securities but including fees paid to CAM and fees paid pursuant to the
Distribution Plan) shall not exceed the limits, if any, prescribed by any state
in which shares of the Fund are being sold or are qualified for sale, and CAM
has agreed to reimburse the Fund for any such expenses in excess of such limits.
In addition, CAM has voluntarily undertaken to limit the annual ordinary
operating expenses of shares of each Fund, as a percentage of the average net
assets of the particular class of shares, to 1.5% for Institutional shares, to
2.00% for Class A shares and 2.50% for Class C shares through August 31, 1998.
Subject to those expense limitations, each Fund pays all of its operating
expenses not specifically assumed by CAM.
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John P. Calamos and Nick P. Calamos are responsible for managing the portfolios
of Convertible Fund, Growth and Income Fund and Global Growth and Income Fund;
John P. Calamos and John P. Calamos, Jr. are primarily responsible for the day-
to-day management of the portfolios of Strategic Income Fund and Growth Fund.
During the past five years, John P. Calamos has been president and a trustee of
the Trust and president of CAM and CFS; John P. Calamos, Jr. has been an
employee of CAM; and Nick P. Calamos has been vice president of the Trust since
1992, a trustee of the Trust since 1997 and a managing director of CAM and CFS.
PERFORMANCE INFORMATION
Information about the performance of each Fund is contained in the Funds' annual
report, which may be obtained from the Trust upon request at no charge.
Each Fund may provide information about the investment performance of its
classes of shares from time to time in advertisements, sales literature and
otherwise. Convertible Fund, Growth and Income Fund and Strategic Income Fund
may quote "yield," an annualized figure based on the amount of net investment
income per share (a hypothetical figure defined by SEC rules) earned during a
30-day period, divided by the public offering price per share on the last day of
the period. Each Fund may advertise its "Total Return" for each class of shares.
Total Return for a class of shares of a Fund for a period is the percentage
change in value during a period of an investment in those shares, including the
value of all shares acquired through reinvestment of all dividends and capital
gains distributions. "Average Annual Total Return" is the average annual
compounded rate of change in value represented by the Total Return for the
period. All of these calculations assume the reinvestment of dividends and
distributions in additional shares of the same class. Income taxes payable by a
shareholder are not taken into account. Please refer to the Statement of
Additional Information for a more complete explanation.
In advertising and sales literature, a Fund's performance may be compared with
that of market indices and other mutual funds, comparative performance as
computed in a ranking determined by Lipper Analytical Services, Inc., an
independent service that monitors the performance of over 1,000 mutual funds, or
that of another service.
Performance of a Fund will vary from time to time, and past results are not
necessarily indicative of future results. Performance information supplied by a
Fund may not provide a basis for comparison with other investments using
different reinvestment assumptions or time periods.
PORTFOLIO TRANSACTIONS
Consistent with the Trust's policy of obtaining best price and execution on
portfolio transactions, the trustees have determined that portfolio transactions
for a Fund may be executed through CFS if, in the judgment of the Adviser, the
use of CFS is likely to result in a combination of net price and execution at
least as favorable to the Fund as those available from other qualified brokers
and if, in such transactions,
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CFS charges the Fund commission rates consistent with those charged by CFS to
comparable unaffiliated customers in similar transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable combination
of net price and execution available and such other policies as the trustees may
determine, the Adviser may consider sales of shares of a Fund as a factor in the
selection of broker-dealers to execute portfolio transactions for that Fund.
The Trust and Its Shares
Each Fund is a series of Calamos Investment Trust (the "Trust"), which was
organized as a Massachusetts business trust on December 21, 1987 and is an open-
end diversified management investment company. Prior to June 23, 1997 the name
of the Trust was CFS Investment Trust. Growth and Income Fund was named "Calamos
Small/Mid Cap Convertible Fund" prior to April 29, 1994.
SHARES
Under the terms of the Agreement and Declaration of Trust, the trustees may
issue an unlimited number of shares of beneficial interest without par value for
each series of shares authorized by the trustees and the trustees may divide the
shares of any series into two or more classes of shares of that series.
Currently the Trust has five series in operation, and each series offers three
classes of shares (Class A, Class C and Class I). All shares issued will be
fully paid and non-assessable and will have no preemptive or conversion rights.
Class A shares of each Fund are offered at net asset value plus a sales charge
of up to 4.75% of the offering price and are subject to an annual .25% service
fee and a .25% distribution fee. Class C shares of each Fund are offered at net
asset value without an initial or contingent deferred sales charge if held for
at least one year but are subject to an annual .25% service fee and a .75%
distribution fee and, in the case of shares redeemed within one year, a 1%
contingent deferred sales charge. In the future, the board of trustees may
authorize the issuance of shares of additional series and additional classes of
shares of any series. Different classes of shares of a single series may bear
different sales charges and other expenses which may affect their relative
performance. Information regarding other classes of shares may be obtained by
calling the Distributor at the telephone number shown on the back cover page of
this prospectus or from any institution that makes available shares of the
Funds.
Each Fund's shares are entitled to participate pro rata in any dividends and
other distributions declared by the Trust's board of trustees with respect to
shares of the Fund. All shares of a Fund have equal rights in the event of
liquidation of the Fund.
Under Massachusetts law, the shareholders of the Trust may, under certain
circumstances, be held personally liable for the Trust's obligations. However,
the Trust's Declaration of Trust disclaims liability of the shareholders,
trustees, and officers of the Trust for acts or obligations of a Fund, which are
binding only on the assets and property of the Fund. The Declaration of Trust
requires that notice of such disclaimer be given in each agreement, obligation,
or contract entered into or executed by the Trust or the board of trustees. The
Declaration of Trust provides for indemnification out of a Fund's assets of
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all losses and expenses of any Fund shareholder held personally liable for the
Fund's obligations. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is remote, since it is limited to circumstances
in which the disclaimer is inoperative and the Fund itself is unable to meet its
obligations.
VOTING RIGHTS
Each share has one vote and fractional shares have fractional votes. As a
business trust, the Trust is not required to hold annual shareholder meetings.
However, special meetings may be called for purposes such as electing or
removing trustees, changing fundamental policies or approving an investment
advisory agreement. On any matters submitted to a vote of shareholders, shares
are voted by individual series or class and not in the aggregate, except when
voting in the aggregate is required by the 1940 Act or other applicable law.
Shares of a Fund are not entitled to vote on any matter not affecting that Fund.
All shares of the Trust vote together in the election of trustees.
CERTAIN SHAREHOLDERS
At May 31, 1997, John P. Calamos had the power to vote and dispose of 206,908
shares (50.2%) of Growth Fund and 189,772 shares (30.1%) of Growth and Income
Fund. Of these shares, 85,442 shares (20.8%) of Growth Fund and 120,547 shares
(19.1%) of Growth and Income Fund were held by CFS 401 (k) Profit Sharing Plan
and Trust, of which Mr. Calamos is trustee and in which Mr. Calamos and other
employees of Calamos Financial Services, Inc. and Calamos Asset Management, Inc.
are participants. No other person is known to own beneficially 25% or more of
any Fund. Under the 1940 Act, a holder of more than 25% of a Fund's outstanding
shares is presumed to control the Fund. The address of Mr. John Calamos is 1111
East Warrenville Road, Naperville, Illinois 60563-1493
SHAREHOLDER INQUIRIES
Inquiries regarding the Funds may be directed to the address or telephone
numbers on the cover of this prospectus.
APPENDIX--DESCRIPTION OF BOND RATINGS
A rating of a rating service represents the service's opinion as to the credit
quality of the security being rated. However, the ratings are general and are
not absolute standards of quality or guarantees as to the creditworthiness of an
issuer. Consequently, the Funds' investment adviser believes that the quality of
debt securities in which a Fund invests should be continuously reviewed. A
rating is not a recommendation to purchase, sell or hold a security, because it
does not take into account market value or suitability for a particular
investor. When a security has received a rating from more than one service, each
rating should be evaluated independently. Ratings are based on current
information furnished by the issuer or obtained by the ratings services from
other sources which they consider reliable. Ratings may be changed, suspended or
withdrawn as a result of changes in or unavailability of such information, or
for other reasons.
The following is a description of the characteristics of ratings used by Moody's
Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P").
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MOODY'S RATINGS
Aaa--Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt-edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. Although the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such bonds.
Aa--Bonds rated Aa are judged to be high quality by all standards. Together with
the Aaa group they comprise what are generally known as high grade bonds. They
are rated lower than the best bonds because margins of protection may not be as
large as in Aaa bonds or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long term risk
appear somewhat larger than in Aaa bonds.
A--Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds rated Baa are considered as medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present, but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba--Bonds rated Ba are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B--Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa--Bonds rated Caa are of poor standing. Such bonds may be in default or there
may be present elements of danger with respect to principal or interest.
Ca--Bonds rated Ca represent obligations which are speculative in a high degree.
Such bonds are often in default or have other marked shortcomings.
S&P Ratings
AAA--Bonds rated AAA have the highest rating. Capacity to pay principal and
interest is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay principal and interest and
differ from AAA bonds only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal
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and interest. Whereas they normally exhibit protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay principal and interest for bonds in this capacity than
for bonds in higher rated categories.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation among such bonds and CC the highest degree of
speculation. Although such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
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<TABLE>
<CAPTION>
<S> <C>
Table of Contents
Page
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Key Features............................2
Expenses................................3
Financial Highlights....................4
Investment Objectives and Policies......4
Common Investment Practices.............6
Risk of Investment.....................15
Investment Restrictions................15
How to Purchase Shares.................15
How to Redeem Shares...................17
Shareholder Services...................18
Dividends and Distributions............19
Taxes..................................19
Management of the Funds................20
Performance Information................21
Portfolio Transactions.................21
The Trust and Its Shares...............22
Appendix--Description of Bond Ratings..23
</TABLE>
INVESTMENT ADVISER AND
TRANSFER AGENT:
CALAMOS ASSET MANAGEMENT, INC./(R)/
1111 East Warrenville Road
Naperville, Illinois 60563-1493
DISTRIBUTOR:
CALAMOS FINANCIAL SERVICES, INC./(R)/
1111 East Warrenville Road
Naperville, Illinois 60563-1493
COUNSEL:
Bell, Boyd & Lloyd
Chicago, Illinois
INDEPENDENT AUDITORS:
Ernst & Young LLP
Chicago, Illinois
No dealer, salesman or any other person is authorized, in connection with the
offer contained in this prospectus, to act as agent for Calamos Investment
Trust, nor is any person authorized to give any information or to make any
representations not contained in this prospectus or in supplementary information
or in supplemental sales material authorized by Calamos Investment Trust, and no
person is entitled to rely upon any information or representation not contained
herein or therein. This prospectus does not constitute an offering in any
jurisdiction in which such offering may not lawfully be made.
CALAMOS FAMILY OF FUNDS/(R)/
CONVERTIBLE FUND
GROWTH AND INCOME FUND
STRATEGIC INCOME FUND
GROWTH FUND
GLOBAL GROWTH AND INCOME FUND
PROSPECTUS
JUNE 24, 1997
1111 EAST WARRENVILLE ROAD
NAPERVILLE, ILLINOIS 60563-1493
(630) 245-7200
(800) 823-7386
