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Mutual Funds

A Play on Enhanced Productivity

Calamos International Growth is on a roll, thanks to a big stake in overseas technology stocks.

John Calamos Sr., an experienced growth-stock investor who co-manages Calamos International Growth (symbol CIGRX), chalks up the fund's recent success to a big bet on technology companies, particularly those that help other firms enhance their productivity. "Even in a slow-growth environment, they can continue to do well," says Calamos, who has just over one-third of his fund's assets in tech.

Two big holdings -- British software maker Autonomy Corp. and Baidu, known as China's Google -- embody the productivity-enhancement theme. Autonomy, the fund's top holding, develops software that helps companies automate tasks. Fast-growing Baidu helps Chinese companies conduct Internet searches; its shares have quadrupled over the past year.

In looking for winners, Calamos puts a lot of stock in revenue growth. That's because, he says, there's a limit to how much profit growth can be generated through cost-cutting. Calamos also favors companies that do a lot of business in emerging markets. Another top position, Swatch Group, the Swiss watchmaker, gets 40% of its sales from Asia. "What's important is where companies do business," not where they're based, says Jeff Scudieri, the Calamos firm's co-head of research. The fund shies away from countries, such as Russia, that don't provide strong protection for investor rights.

Calamos funds generally levy sales charges. You can avoid the loads, however, if you invest through a fee-based adviser.