There may be an untapped market for exchange-traded funds.
According to Matt Kaufman of Calamos Investments, there are trillions of dollars in CD and money market accounts and ETFs should look to capture this market.
“This is bigger than almost the ETF space itself,” the company’s ETF chief told CNBC’s “ETF Edge” earlier this week. “There’s a lot of money that could go into this.”
Kaufman, who expects interest rates to stay higher for longer, believes structured ETFs and options ETFs designed for risk management and returns can provide stability.
“We saw that with interest rates so low, it was difficult to manage risk and generate returns from bonds,” he said. “As interest rates have moved from zero to 4.5%, we can afford to provide capital protection over a longer period of time. And if you can do that, there are lots of ways to use these products.”
Kaufman mentioned that in this higher interest rate environment, ETFs can be particularly beneficial for people looking for ways to beat inflation – especially retirees.
“You can get a higher interest rate than the risk-free rate. … Your money is tied to the market without any major downside risk,” Kaufman added. “It’s all tax-deferred growth.”
Kaufman’s firm Calamos just began launching a series of 12 structured protection ETFs.
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2024-05-04 15:00:01
www.cnbc.com
