Matt Kaufman of Calamos Investments believes there is an untapped market for exchange-traded funds (ETFs) that could capture trillions of dollars currently sitting in CD and money market accounts. He sees this potential market as larger than the ETF space itself and believes that structured and options ETFs designed for risk management and income could provide stability in a higher-rate environment. Kaufman believes that ETFs can offer capital protection over time periods while still allowing investors to outpace inflation, making them particularly advantageous for retirees.
Kaufman’s belief is grounded in the idea that interest rates will stay higher for longer, making it challenging to generate risk management and income from traditional bonds. However, as rates have increased from historically low levels, structured and options ETFs become a more attractive option to provide stability and income for investors. In this context, ETFs can offer opportunities for growth that are linked to the market with limited downside risk, providing tax-deferred growth for investor portfolios.
Calamos Investments has recently launched a suite of 12 structured protection ETFs in response to the current market environment and investor needs. These ETFs are designed to provide capital protection and income while allowing investors to outpace inflation and take advantage of market opportunities. Kaufman sees these products as particularly beneficial for retirees who are looking for ways to generate income and manage risk in a higher-rate environment where traditional bonds may not provide sufficient returns.
The appeal of ETFs in this context lies in their ability to offer stability and income in a market environment where interest rates are higher, allowing investors to benefit from market growth while protecting their capital. Kaufman believes that ETFs can provide a way for investors to achieve greater returns than the risk-free rate while minimizing downside risk, making them an attractive option for those looking to outpace inflation and generate income over time. With a growing interest in risk management and income generation in a higher-rate environment, ETFs are poised to capture a significant portion of the market for investor portfolios.
The potential market for ETFs targeting risk management and income generation is substantial, as trillions of dollars are currently sitting in CD and money market accounts. Kaufman believes that these funds represent an opportunity for ETFs to capture a significant share of the overall market, offering investors a way to protect their capital and generate income in a higher-rate environment. With interest rates expected to remain elevated for the foreseeable future, structured and options ETFs can provide stability and growth opportunities for investors seeking to outpace inflation and protect their portfolios from market volatility.
In conclusion, ETFs designed for risk management and income generation offer a compelling opportunity for investors looking to navigate a higher-rate environment and protect their portfolios from market volatility. With trillions of dollars currently sitting in CD and money market accounts, there is a substantial untapped market for ETFs to capture, providing investors with a way to outpace inflation and generate income over time. Calamos Investments’ recent launch of a suite of structured protection ETFs highlights the growing interest in these products and their potential to offer stability and growth opportunities for investors in the current market environment.
