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.

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