Calamos Investments has completed the transition of its Timpani SMID Growth strategy from a traditional mutual fund into an actively managed exchange-traded fund, launching the Calamos Timpani Active SMID Growth ETF under the ticker CTAG on the Texas Stock Exchange on September 21. The transaction converts the former Calamos Timpani SMID Growth Fund into an ETF while keeping the investment mandate centered on growth-oriented small- and mid-cap companies. Calamos said the transaction is the first actively managed mutual-fund-to-ETF conversion to obtain a primary listing on TXSE, making the launch notable both for the investment manager and for the young exchange as it builds its exchange-traded-product franchise.

The launch follows several months of regulatory preparation and shareholder-transition planning. Calamos disclosed earlier in 2026 that it intended to reorganize the mutual fund into an ETF, subject to shareholder approval. Regulatory materials outlined a sequence that included closing the mutual fund to additional purchases, consolidating its existing Class A, Class I and Class R6 shares, transferring the predecessor fund’s assets and liabilities to the new ETF and ultimately listing the ETF. Calamos’ September 21 announcement said CTAG acquired the assets and assumed the liabilities of the predecessor fund as part of the reorganization, allowing the strategy’s operating and performance history to continue into the ETF structure.

CTAG seeks long-term capital appreciation and, under normal circumstances, invests at least 80% of net assets, plus investment-purpose borrowings, in growth equity securities of small- and mid-capitalization companies whose issuers are primarily based in the United States. The portfolio can invest in common stocks and American depositary receipts and may allocate as much as 25% of net assets to foreign securities. The fund uses the Russell 2500 Growth Index as its benchmark but is actively managed rather than designed to replicate an index. That distinction places security selection, portfolio construction and sell decisions with the investment team rather than an index methodology.

Senior Portfolio Manager Brandon Nelson remains responsible for the strategy. Calamos describes the approach as one focused on “fundamental momentum,” using company-level research to identify businesses where operating results, earnings expectations or other fundamental conditions appear to be improving. Regulatory documents state that the adviser evaluates factors including projected earnings growth, book-value growth, sales growth, cash-flow growth and historical earnings growth, while emphasizing management quality and business models that the investment team believes offer the potential for earnings upside. The approach can lead the portfolio toward companies experiencing rapid changes in growth expectations rather than simply holding the largest constituents in the SMID-cap universe.

The strategy itself is not new. The predecessor Calamos Timpani SMID Growth Fund was launched in 2019 after Calamos acquired Timpani Capital Management, and its track record now becomes the historical record associated with CTAG. Calamos said the predecessor fund outperformed both the Morningstar Small Growth category average and the Russell 2500 Growth Index over several periods before the conversion. The firm reported that, through August 31, 2026, the institutional share class ranked in the third percentile of the Morningstar Small Growth category over three years and in the 14th percentile over five years. Those figures describe historical performance and do not establish how CTAG will perform after conversion, particularly because ETF trading, future portfolio decisions and market conditions can produce different outcomes.

The fee change is one of the clearest structural differences for investors. CTAG has a 0.79% unitary management fee. The prospectus lists total annual operating expenses at 0.79%, with the adviser generally responsible for ordinary operating expenses other than specified exceptions. Earlier proxy materials comparing the structures showed gross annual expenses of 1.70% for the predecessor fund’s Class A shares, 1.45% for Class I and 1.40% for Class R6. After contractual waivers, those figures were 1.35%, 1.10% and 1.05%, respectively. The ETF’s 0.79% cost is therefore lower than the expense levels previously applicable to each predecessor share class.

The conversion also changes how investors transact. A conventional open-end mutual fund generally processes purchases and redemptions once daily at net asset value. CTAG trades throughout the session on TXSE, meaning investors can buy and sell shares at market prices that may be above or below the fund’s calculated NAV. Like other ETFs, CTAG issues and redeems shares directly with authorized participants in large creation units rather than redeeming individual retail shares directly. Secondary-market liquidity, bid-ask spreads and the relationship between trading price and NAV consequently become relevant considerations for shareholders who previously interacted with the strategy as a mutual fund.

Calamos cited potential tax efficiency as another reason for the conversion. ETFs can in some circumstances use in-kind creation and redemption transactions to manage portfolio securities without generating the same level of taxable realized gains that could arise from cash redemptions in a mutual fund. The benefit is not automatic, and actual tax outcomes depend on portfolio activity, shareholder circumstances and the fund’s future transactions. The reorganization itself was structured with the expectation that it would qualify as a tax-free reorganization for U.S. federal income-tax purposes, although cash paid in connection with fractional shares could produce taxable gains or losses for affected investors. Regulatory materials advised shareholders to consider their individual tax circumstances.

For existing fund investors, the reorganization was designed to maintain economic exposure rather than require them to make a new investment decision simply to remain in the strategy. Before conversion, the predecessor fund’s share classes were consolidated. Shareholders eligible to hold ETF shares were then positioned to receive CTAG shares representing substantially the same aggregate net asset value as their predecessor-fund holdings, subject to the treatment of fractional interests. Because the ETF did not issue fractional shares as part of the reorganization mechanics, certain residual amounts could be redeemed for cash. Investors whose accounts could not hold ETFs were advised ahead of the conversion to work with their intermediary on alternatives.

For Calamos, CTAG broadens an ETF lineup that has expanded as active managers increasingly use exchange-traded structures for strategies historically sold through mutual funds. The firm said it manages more than $52 billion in assets as of June 30, including more than $23 billion in liquid alternatives, across ETFs, mutual funds, closed-end funds, interval funds and other vehicles. Moving an established equity strategy into an ETF gives Calamos a product with an inherited performance record rather than requiring the firm to build an entirely new investment history from launch, although investors still need to distinguish predecessor-fund results from returns generated after CTAG begins trading as an ETF.

The broader active-ETF market provides an important backdrop. ETFGI reported that actively managed ETFs and ETPs globally held a record $2.59 trillion in assets at the end of July 2026. The segment attracted $89.58 billion of net inflows during July and a record $590.46 billion through the first seven months of the year. Equity-focused active ETFs collected $355.77 billion over that period. ETFGI also counted 1,212 active ETF launches by 269 providers through July, illustrating the intensity of product development as asset managers compete to place traditional discretionary strategies inside the ETF wrapper.

Mutual-fund conversions have become one route into that market because they can allow advisers to preserve an existing shareholder base, portfolio and operating history while changing the fund’s distribution structure. For an asset manager, the approach can avoid the challenge of introducing an ETF with no assets and no historical record. For investors, however, the conversion changes practical features including intraday pricing, brokerage execution, spread costs and the inability of ordinary shareholders to redeem directly with the fund. The relative importance of those differences depends on account type, trading behavior and how long an investor expects to hold the strategy.

The choice of TXSE adds a second strategic dimension. TXSE, headquartered in Dallas, has been building a new national securities exchange intended to compete for U.S. listings and trading activity. The exchange said primary listings of exchange-traded products were scheduled to begin on September 16, followed by corporate securities in October. On September 17, TXSE notified members that CTAG would begin trading at 8:00 a.m. Eastern Time on September 21 and that transactions would be quoted and reported through the SIAC Tape B data feed. The exchange has also announced other early ETP listings as it establishes its primary-listing infrastructure.

For TXSE, obtaining a converted active fund from an established asset manager gives the venue a product whose investment history predates the exchange itself. Calamos, meanwhile, gains visibility as an early participant in the exchange’s listing business. Whether that relationship produces meaningful secondary-market volume will depend on factors beyond the primary listing, including distribution through brokerage and advisory platforms, market-maker participation, investor demand and the depth of the national market system. An ETF’s primary exchange is important for listing administration and opening and closing auctions, but investors can generally trade listed securities across competing market centers under U.S. market structure.

CTAG’s underlying exposure also arrives at a time when asset managers are trying to broaden investor attention beyond mega-cap U.S. equities. Small- and mid-cap growth stocks can offer faster revenue and earnings expansion, but they can also carry greater business, financing and valuation risk than larger established companies. The CTAG prospectus specifically warns that growth securities may trade at higher earnings multiples and can therefore be more sensitive to changes in earnings expectations. Smaller companies can have shorter operating histories, narrower business lines, less access to capital and higher stock-price volatility. Active management gives Nelson and the investment team discretion to respond to those conditions, but it also introduces manager-selection risk because results depend heavily on the adviser’s security choices.

Portfolio turnover is another factor for investors evaluating the strategy. The June prospectus reported that the predecessor fund had a portfolio-turnover rate of 192% for the fiscal year ended October 31, 2025. A high turnover rate can reflect an actively managed strategy that adjusts positions frequently as fundamental conditions change. It can also increase trading costs and, depending on the structure and transactions involved, affect taxable distributions. The ETF wrapper may provide additional tools for managing some tax consequences, but it does not eliminate the market-impact, execution and portfolio-management costs associated with frequent trading.

The conversion therefore changes the delivery mechanism more than the investment thesis. CTAG retains the predecessor fund’s focus on actively selected small- and mid-cap growth companies, the same capital-appreciation objective and continuity of portfolio leadership while moving the strategy into a structure that trades throughout the day and carries a lower stated expense ratio. Calamos is effectively betting that investors who want discretionary SMID-cap exposure increasingly prefer to access it through ETFs rather than traditional mutual-fund share classes.

For the ETF market, CTAG is another example of the boundaries between traditional mutual funds and exchange-traded funds becoming less rigid. Managers with established strategies can increasingly treat the ETF wrapper as a distribution and operating choice rather than a fundamentally different investment product. For TXSE, the September 21 listing adds an active equity strategy during the exchange’s first days of primary ETP listings. The longer-term test for CTAG will be whether its inherited investment record, lower fee and exchange-traded format translate into sustained assets, liquidity and investor adoption after the mechanics of the conversion are complete.