Home etftrends.com Calamos’ Kaufman Breaks Down Potential Perks of Structured Protection ETFs

Calamos’ Kaufman Breaks Down Potential Perks of Structured Protection ETFs

When constructing a well-balanced portfolio, downside mitigation remains an integral factor to consider.

The series of Calamos Structured Protection ETFs can provide investors robust loss protection while generating potential upside. Matt Kaufman, senior vice president and head of ETFs at Calamos Investments, recently highlighted these products when he joined Vettafi’s 2024 Alternatives Symposium.

He began by highlighting the broad benefits of Calamos’ Structured Protection suite. Kaufman noted that each ETF provides capped exposure to the S&P 500®, Nasdaq-100®, or Russell 2000® markets.

This exposure is paired with 100% downside protection across the one-year outcome period. Kaufman added that the Structured Protection ETFs possess tax alpha, touting the products as “extremely tax efficient.”

Nasdaq-100 Exposure

Moving on to discuss the Calamos ETF that will launch in June, the Calamos Nasdaq-100® Structured Alt Protection ETF™ – June (CPNJ), Kaufman highlighted the Nasdaq-100’s benefits. In particular, he touted the Nasdaq for being a more growth-oriented broad index. He also added that the Nasdaq reached all-time highs earlier in May.

“One of the reasons I love the Nasdaq for a 100% protection type product is that dividend yield gets applied to the capital appreciation potential. And so, the Nasdaq gives you really great upside opportunity,” Kaufman added.

Downside Protection Benefits

When asked how downside protection works, Kaufman observed that current annuity products on the market deliver similar protective features. With interest rates remaining where they are, he noted that investors are gravitating toward more secure products like CDs, capital-protected notes, and fixed-indexed annuities.

“We’ve simply lifted out the benefits of those types of products but put them inside the efficient, tax-efficient, liquid, transparent ETF wrapper. So, now people can access those types of products, but through the ETF,” added Kaufman.

Portfolio Allocation

Using the Calamos S&P 500® Structured Alt Protection ETF™ – May (CPSM) as an example, Kaufman then explained how these funds can fit into an investor’s portfolio. First, he expressed that he sees Structured Protection ETFs like CPSM working as cash alternatives for investors. Noting that income earned from CDs is subject to ordinary income taxes, while Structured Protection ETFs can deliver significant tax alpha as potential gains will grow tax-deferred and will be taxed at long-term capital gains rates if held for the one-year outcome period.

“[A Structured Protection ETF] allows you to link your cash to the equity markets with no greater downside risk,” Kaufman added.

Along with de-risking equity exposure, he explained how a fund like CPSM can benefit retirees. While retirees face a multitude of investment hurdles, such as financial, longevity, and volatility risks, Kaufman asserted that a Structured Protection ETF “solves all three of those risks.”

“You can essentially outpace inflation and retirement, [and]overcome that spend that you might have from your portfolio,” he added.

For more news, information, and analysis, visit the Alternatives Channel.

Disclosure Information

Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.

An investment in the Fund(s) is subject to risks, and you could lose money on your investment in the Fund(s). There can be no assurance that the Fund(s) will achieve its investment objective. Your investment in the Fund(s) is not a deposit in a bank. It is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the Fund(s) can increase during times of significant market volatility. The Fund(s) also has specific principal risks, which are described below. More detailed information regarding these risks can be found in the Fund’s prospectus.

*The Calamos Russell 2000 Structured Alt Protection ETFs are currently reflected in an initial SEC filing under the name Calamos Capital Protected Russell 2000 ETFs.​

Investing involves risks. Loss of principal is possible. The Funds face numerous market trading risks, including authorized participation concentration risk, cap change risk, capital protection risk, capped upside risk, cash holdings risk, clearing member default risk, correlation risk, derivatives risk, equity securities risk, investment timing risk, large-capitalization investing risk, liquidity risk, market maker risk, market risk, non-diversification risk, options risk, premium-discount risk, secondary market trading risk, sector risk, tax risk, trading issues risk, underlying ETF risk and valuation risk. For a detailed list of fund risks see the prospectus.​

Additional Information

There are no assurances the Fund will be successful in providing the sought-after protection. The outcomes that the Fund seeks to provide may only be realized if you are holding shares on the first day of the Outcome Period. It can continue to hold them on the last day of the Outcome Period, approximately one year. There is no guarantee that the Outcomes for an Outcome Period will be realized or that the Fund will achieve its investment objective. If the Outcome Period has begun and the Underlying ETF has increased in value, any appreciation of the Fund by virtue of increases in the Underlying ETF since the commencement of the Outcome Period will not be protected by the sought-after protection, and an investor could experience losses until the Underlying ETF returns to the original price at the commencement of the Outcome Period.

Fund shareholders are subject to an upside return cap (the “Cap”) that represents the maximum percentage return an investor can achieve from an investment in the funds’ for the Outcome Period, before fees and expenses. If the Outcome Period has begun and the Fund has increased in value to a level near to the Cap, an investor purchasing at that price has little or no ability to achieve gains but remains vulnerable to downside risks. Additionally, the Cap may rise or fall from one Outcome Period to the next. The Cap, and the Fund’s position relative to it, should be considered before investing in the Fund. The Fund’s website, www.calamos.com, provides important Fund information as well information relating to the potential outcomes of an investment in a Fund on a daily basis.

Other Information​

These Funds are designed to provide point-to-point exposure to the price return of the Reference Asset via a basket of Flex Options. As a result, the ETFs are not expected to move directly in line with the Reference Asset during the interim period.​

Investors purchasing shares after an outcome period has begun may experience very different results than fund’s investment objective. Initial outcome periods are approximately 1-year beginning on the fund’s inception date. Following the initial outcome period, each subsequent outcome period will begin on the first day of the month the fund was incepted. After the conclusion of an outcome period, another will begin.​

FLEX Options Risk The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (OCC). In the unlikely event that the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could suffer significant losses. Additionally, FLEX Options may be less liquid than standard options. In a less liquid market for the FLEX Options, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices. The values of FLEX Options do not increase or decrease at the same rate as the reference asset and may vary due to factors other than the price of reference asset.​

Shares are bought and sold at market price, not net asset value (NAV), and are not individually redeemable from the fund. NAV represents the value of each share’s portion of the fund’s underlying assets and cash at the end of the trading day. Market price returns reflect the midpoint of the bid/ask spread as of the close of trading on the exchange where fund shares are listed.​

100% capital protection is over a one-year period before fees and expenses.  All caps are pre-determined.

Cap Range – Maximum percentage return an investor can achieve from an investment in the Fund if held over the Outcome Period. Cap range depicted is the high and low cap rate over the past 15 trading days. Actual cap delivered by the Fund may be different.​

Protection Level – Amount of protection the Fund is designed to achieve over the Days Remaining.

Outcome Period – Number of days in the Outcome Period.

Nasdaq® and Nasdaq-100 are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Calamos Advisors LLC.  The Fund has not been passed on by the Corporations as to their legality or suitability.  The Fund is not issued, endorsed, sold, or promoted by the Corporations.  The Corporations make no warranties and bear no liability with respect to the Fund(s).


Calamos Financial Services LLC, Distributor

Calamos Financial Services LLC​
2020 Calamos Court | Naperville, IL 60563​
866.363.9219 | www.calamos.com | [email protected]
2024 Calamos Investments LLC. All Rights Reserved.​
Calamos and Calamos Investments are registered trademarks of Calamos LLC.​


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