Investors looking to shield themselves from market volatility now have a new option available to them. The Calamos S&P 500 Structured Alt Protection ETF (CPSM) promises “100% downside protection” against losses in the index over a one-year period. This innovative approach has grabbed the attention of many in the investment community.
The head of ETFs at Calamos, Matt Kaufman, played a key role in developing this new product. Kaufman emphasized that there are no shortcuts or magic tricks involved in the ETF’s strategy. He described it as a “fully funded options package” that limits investors’ ability to capture gains from the S&P 500 while providing complete protection against losses.
The ETF utilizes three options positions to achieve its goal of downside protection. By capping the upside potential tied to the S&P 500 and ensuring 100% capital protection over a 365-day period, the fund offers a unique value proposition. At the end of each year, the options reset, allowing investors to continue benefiting from this innovative approach.
Kaufman highlighted the importance of timing when it comes to benefiting from the ETF’s full downside protection. Investors who purchase the fund on the first day of trading will receive this protection. However, Kaufman also mentioned that opportunities to invest in the fund may arise in the following days, albeit with slightly different terms.
The Calamos S&P 500 Structured Alt Protection ETF is just the first of a series of 12 structured protection ETFs that the firm plans to launch in the coming year. This signals a growing trend towards innovative strategies aimed at minimizing risk and maximizing returns in a volatile market environment.
The introduction of the Calamos S&P 500 Structured Alt Protection ETF represents a significant development in the world of exchange-traded funds. By offering investors a unique way to navigate market volatility while ensuring downside protection, this new ETF has the potential to appeal to a wide range of investors looking to safeguard their portfolios.