A new ETF designed to protect investors from the risk of market volatility begins trading on Wednesday.
The Calamos S&P 500 Structured Alt Protection ETF (CPSM) promises investors “100% downside protection” against the index’s losses over a one-year earnings period, the company’s press release said.
Matt Kaufman, head of ETFs at Calamos, helped develop the new product.
“There are no tricks. There is no magic,” he told CNBC’s “ETF Edge” on Monday. “That’s the secret sauce.”
Kaufman explained that the new ETF takes three options positions. Investors in the Fund are subject to limitations on the extent to which they can realize any related gains S&P 500.
“They all work together. It is a fully funded options package that delivers the upside potential of the S&P 500 up to a cap with 100% capital protection over a 365 day outcome period.” he said. “At the end of the year the options are reset, you stay in the ETF and carry on.”
The fund will have an annual expense ratio of 0.69%.
Enlarge symbolArrows point outwards
To get the fund’s promised full downside protection from losses in the S&P 500, investors would have to buy it when it hits the market on Wednesday, according to Kaufman.
“If you buy in on day one, you get 100% protection,” he said. “[But] even on the second day [or] On the third day, there will likely be opportunities to stock up along the way.
Enlarge symbolArrows point outwards
The fund is just one of 12 structured protection ETFs the company plans to launch over the next year. Future funds include those aimed at protecting against losses associated with it Nasdaq 100 And Russell 2000 Standards.
Disclaimer
Source link
2024-04-30 23:07:28
www.cnbc.com
