A new ETF called the Calamos S&P 500 Structured Alt Protection ETF (CPSM) has started trading, offering investors 100% downside protection against losses in the S&P 500 over a one-year outcome period. This ETF was created by Calamos’ head of ETFs, Matt Kaufman, who explained that the fund enters into three options positions to deliver upside potential of the S&P 500 to a capped extent with full capital protection. The fund will have an annual expense ratio of 0.69% and investors must buy it on the first day of trading to receive the full downside protection promised.
Kaufman emphasized that there are no tricks or magic involved in the new ETF, but rather it is a fully funded options package that aims to protect investors from market volatility while still allowing them to capture some gains tied to the S&P 500. The options reset at the end of the one-year outcome period and continue to provide protection for investors. However, even if investors do not purchase the fund on the first day of trading, there may still be opportunities to buy in later and receive some form of protection against potential losses in the market.
The Calamos S&P 500 Structured Alt Protection ETF is just one of a suite of 12 structured protection ETFs that the firm plans to launch in the coming year. These upcoming funds will aim to provide protection against losses tied to other benchmarks such as the Nasdaq 100 and Russell 2000. The new ETFs are part of an effort to offer investors innovative products that can help shield them from market volatility and downside risk, while still allowing them to participate in potential upside opportunities in the market.
Investors interested in adding downside protection to their portfolios may find the Calamos S&P 500 Structured Alt Protection ETF to be a useful addition. With 100% downside protection against losses in the S&P 500 over a one-year period, this new ETF offers a unique option for those looking to mitigate risk in their investments. The fund’s structured options package aims to balance risk and reward, providing investors with the opportunity to capture gains while also limiting their exposure to market volatility.
It is important for investors to consider the risks and rewards of investing in structured protection ETFs like the CPSM, as they may not be suitable for all investment strategies. While these funds can offer downside protection in volatile markets, they may also have limitations on potential gains tied to the underlying index. By carefully evaluating the features and expenses of these ETFs, investors can make informed decisions about whether to incorporate them into their portfolios to help manage risk and volatility in their investments.
