Calamos Investments has launched a new exchange-traded fund (ETF) designed to help investors manage market volatility, according to an announcement by President and CEO John Koudounis.
In an interview with the Schwab Network, Koudounis explained that with this election, market volatility has become a rising concern for investors. The uncertainty surrounding election outcomes can trigger investor retreats that may hurt their portfolios.
This risk is magnified during election periods as markets react to new policies, leadership changes, and shifts in geopolitical dynamics. Investors often face the dilemma of how to protect their portfolios from potential losses without sacrificing the opportunity for gains. Traditional hedging strategies, such as options and futures, can be complex and costly.
He stressed, however, that some solutions can help investors stay invested in the market, limiting actions based on behavioral biases often associated with near-term risks, like elections. This is where structured protection ETFs may be a fit.
Calamos Investments ETF offers protection against market volatility
Koudounis said that the recently introduced exchange-traded fund (ETF) gives investors access to capped upside participation within the S&P 500.
The Calamos S&P 500 Structured Alt Protection ETF – August (CPSA) introduced on August 1, 2024 is a structured protection ETF. It offers protection to investors from August 2024 to July 2025.
The fund primarily invests in Flexible Exchange (FLEX) Options. As a Calamos Structured Protection ETF, it offers exposure to the S&P 500 with an estimated upside cap of 8.58 percent to 9.07 percent and 100 percent downside protection through July 2025 (before fees and expenses).
With a one-year outcome period, investors will gain protection both before and after the election and allow for optimal upside participation should the markets continue higher.
In addition to downside protection and upside potential growth, these ETFs offer simplicity, Calamos Investments says.
Compared to other hedging strategies, Structured Protection ETFs are relatively straightforward to understand and implement, as investors do not need to manage complex options positions or constantly monitor futures contracts.
As we approach the 2024 election, the markets are already showing signs of increased volatility. Policy proposals, debates, polling data, and party nominees are all contributing factors to potential market swings.
Investors can hedge against the downside risks associated with the election while still capitalizing on potential market gains with Calamos’ Structured Protection ETFs.
History of Calamos Investments
John P. Calamos, Sr., founded Calamos Investments in 1977 to help investors create and build long-term wealth through innovative, risk-managed strategies.
He pioneered the use of convertible strategies and alternative investment solutions to enhance returns and manage risk. Whether through Calamos Wealth Management or Calamos Investments, the firm has remained steadfast in its commitment to put investors first, actively manage risk, and deliver innovation and excellence.
Related: Lessons for Investors from John Calamos: Reflections from a Half-Century in the Markets
