Calamos Phineus Long/Short Fund: Navigating Q3 2025's Shifting Tides

Well, another quarter has certainly flown by, and what a fascinating ride Q3 2025 turned out to be for global markets. It felt like we were constantly re-evaluating, didn't it? Amidst this evolving backdrop, our Calamos Phineus Long/Short Fund continued its mission, diligently working to generate compelling risk-adjusted returns for our investors.

The third quarter of 2025, frankly, presented a bit of a mixed bag. On one hand, we observed persistent inflation concerns, albeit with some signs of moderation in certain areas, keeping central banks firmly in a 'higher for longer' interest rate stance. This, predictably, introduced a certain level of volatility into equity markets. On the other hand, economic data, particularly employment figures, showed surprising resilience, preventing a full-blown recession narrative from taking hold. This tug-of-war between inflationary pressures and economic fortitude led to distinct sector rotations and significant dispersion in individual stock performance – a classic environment, we believe, where active management truly shines.

So, how did we fare in this environment? We're genuinely pleased to report that the Calamos Phineus Long/Short Fund delivered a solid performance during Q3 2025, demonstrating the inherent strength and agility of our long/short strategy. Our objective, as you know, is always about absolute returns and capital preservation, particularly when market conditions become, shall we say, a bit choppier. It's truly in quarters like these that the long/short approach really proves its mettle, allowing us to capture alpha from both sides of the market coin rather than being solely dependent on broad market movements.

Our investment philosophy remains firmly rooted in rigorous fundamental research, focusing on identifying companies with strong underlying business models for our long positions, and uncovering those facing structural headwinds or overvaluation for our short book. During Q3, our long book saw robust contributions from select names within technology and healthcare, where our deep-dive analysis revealed genuine innovation and pricing power that was perhaps underappreciated by the broader market. These companies continued to execute well despite the wider macroeconomic uncertainties.

Meanwhile, the short book proved its worth, acting as a crucial diversifier and a significant contributor to our overall performance. We successfully identified and capitalized on companies facing margin compression, decelerating growth, or those burdened by unsustainable debt loads in a rising rate environment. This balanced approach, the interplay between our carefully selected longs and our thoughtfully constructed shorts, really allowed us to navigate the market's nuances and mitigate some of the downside risks that pure long-only strategies might have encountered.

As we peer into Q4 and indeed, into 2026, the landscape, quite honestly, looks just as nuanced. Inflation, while potentially past its peak, will likely remain a key talking point, influencing central bank policy and corporate earnings. Geopolitical tensions, too, continue to present a background hum of uncertainty. We're keeping a very close eye on consumer spending patterns and the potential for a softening labor market, which could signal a further shift in economic momentum.

Our conviction here is that agility and diligent, bottom-up stock-picking will continue to be paramount. We believe the market will increasingly reward companies with resilient business models, strong balance sheets, and proven management teams, while punishing those lacking these attributes. The Calamos Phineus Long/Short Fund is precisely positioned to capitalize on this ongoing dispersion, leveraging our research capabilities to uncover both compelling long opportunities and effective short ideas. We remain committed to our process and confident in our ability to generate value for our investors in whatever environment unfolds.