Calamos Responds to Significant Investor Demand for Protected Growth Solutions, Offering Monthly Series of its S&P 500 Structured Protection ETFs

Rhea-AI Summary

Calamos Investments has announced the introduction of its new Calamos S&P 500 Structured Alt Protection ETF – July (CPSJ), set to launch on July 1, 2024. This ETF provides 100% downside protection over a one-year outcome period with an estimated cap range of 9.2%-9.7%. The move comes in response to significant investor demand following the success of their first Structured Protection ETF, CPSM, which launched on May 1, 2024. Calamos will now offer a new S&P 500 version monthly instead of quarterly. The ETF suite leverages Calamos' extensive expertise in alternatives and options investing, combining it with the benefits of the ETF structure, such as liquidity, cost-effectiveness, and tax efficiency.

The CPSJ ETF is designed to offer tax advantages by allowing gains to grow tax-deferred, with long-term capital gain rates applicable if held for more than a year. Portfolio management will be led by Co-CIO Eli Pars and the Alternatives Team, and the ETF will track the price return of the SPDR® S&P 500® ETF Trust (SPY). The annual expense ratio for CPSJ is set at 0.69%.

Positive

• Calamos will launch a new S&P 500 Structured Protection ETF (CPSJ) on July 1, 2024.
• The ETF offers 100% downside protection over a one-year outcome period.
• Estimated cap range for CPSJ is 9.2%-9.7%.
• The annual expense ratio for CPSJ is 0.69%.
• Calamos will now issue new S&P 500 versions monthly instead of quarterly.
• The ETF provides tax advantages, with gains growing tax-deferred and long-term capital gain rates applicable if held over a year.
• Portfolio managed by experienced Co-CIO Eli Pars and the Alternatives Team.

Negative

• No specific negative business aspects were highlighted in the press release.

Financial Analyst

The expansion of Calamos' Structured Protection ETFs to a monthly series presents an innovative investment opportunity for those seeking to balance risk and reward. The 100% downside protection offered by these ETFs is particularly appealing in uncertain market conditions. It ensures that investors will not lose their principal, which is a significant reassurance. However, the cap on upside potential, projected to be 9.2%-9.7% for the July series, means that gains are limited. For comparison, the historical average annual return of the S&P 500 is roughly 10%. This structured approach may be suitable for risk-averse investors or those nearing retirement, but it might not align with the goals of more aggressive investors seeking higher returns.

One short-term benefit is the tax efficiency of these ETFs. Gains are tax-deferred if held for more than a year and taxed at long-term capital gains rates. This can be particularly advantageous for investors in higher tax brackets. Over the long term, if held beyond the one-year minimum, these ETFs can provide significant tax savings. However, the annual reset means that investors need to stay committed to this strategy to maximize its benefits.

The annual expense ratio of 0.69% is also worth noting. While it is competitive compared to actively managed funds, it is higher than many passive index ETFs. Investors should weigh this cost against the potential benefits of downside protection and tax efficiency.

Market Research Analyst

Calamos' decision to offer these ETFs monthly rather than quarterly speaks volumes about investor demand. The success of the initial CPSM launch in May clearly indicates a market appetite for such structured products. This demand is likely driven by the increasing market volatility and economic uncertainty. Investors are seeking products that offer a blend of stability and growth potential, which these ETFs aim to provide.

From a market trends perspective, structured products are gaining popularity as investors look for customized solutions to meet specific financial goals. The monthly issuance allows for greater flexibility in timing investments, potentially attracting those who prefer not to wait for a quarterly issue. It also indicates Calamos' confidence in maintaining a sustained demand for these products.

In the long run, if the demand continues to grow, Calamos could strengthen its position in the alternatives and options-based strategies market, enhancing its overall brand equity. However, it will be important to monitor the performance of these ETFs closely, as any failures could quickly erode investor trust and demand.

• Calamos S&P 500 Structured Alt Protection ETF – July (CPSJ) is slated to launch July 1 with estimated cap range 9.2%-9.7% over a one-year outcome period.
• Following the success of CPSM launched on May 1, Calamos plans to issue a new S&P 500 version monthly beginning in July with CPSJ.
• The Calamos Structured Protection ETF suite combines Calamos' decades-long alternatives and options investing expertise with the liquid, cost-effective and tax-efficient ETF structure.

METRO CHICAGO, June 17, 2024 /PRNewswire/ -- Calamos Investments LLC ("Calamos"), a leading alternatives manager, today announced the expansion of its Structured Protection ETF™ lineup with the July 1st launch of Calamos S&P 500^® Structured Alt Protection ETF – July (CPSJ) providing 100% downside protected S&P 500 exposure over a one-year outcome period. Responding to investor demand following the successful debut of CPSM, Calamos' first Structured Protection ETFs™ launched May 1, Calamos will now list capital-protected strategies on the S&P 500 each month, instead of quarterly as originally planned.

"We have received tremendously positive feedback from our clients about our Structured Protection ETF suite," said John Koudounis, President & CEO. "We have been a trusted provider of alternatives and options-based strategies for decades. Today's investors are experiencing the efficiency and accessibility of the ETF structure for risk managed solutions. This is a natural fit for Calamos."

Calamos S&P 500® Structured Alt Protection ETF™ – July (CPSJ)
Cap Range	Estimated 9.2% - 9.7%
Outcome Period	1 Year: 7/01/2024 to 6/30/2025
Reference Asset	Price return of the SPDR® S&P 500® ETF Trust (SPY), based on the S&P 500® Index
Structured Protection	100% downside protection if held through the one-year outcome period
Annual Expense Ratio	0.69 %
Portfolio Management	Co-CIO Eli Pars and the Alternatives Team
Benchmarks	S&P 500® Index, Price Return MerQube Capital Protected US Large Cap Index – July
Tax Application	Gains in an ETF grow tax-deferred and will be taxed at long- term capital gain rates if held longer than one year

Structured Protection ETFs reset annually, offering investors a new upside cap with refreshed protection against negative returns of the benchmark over the subsequent 12-month period. If shares are held longer than one year, CPSJ can deliver significant tax alpha as potential gains will grow tax-deferred and will be taxed at long-term capital gains rates and can be held indefinitely.

Learn more about the full suite of Calamos Structured Protection ETFs™.

CALAMOS STRUCTURED PROTECTION ETF™ Launch Schedule  

Launch Date		Ticker	ETF Name	Initial Upside Cap or Range	Protection Level	Outcome Period
May 1, 2024		CPSM	Calamos S&P 500 Structured Alt Protection ETF – May	9.8 %	100 %	1 Year
June 3, 2024		CPNJ	Calamos Nasdaq 100 Structured Alt Protection ETF – June	10.2 %	100 %	1 Year
July 1, 2024		CPRJ	Calamos Russell 2000 Structured Alt Protection ETF* – July	10.5%-11.2%	100 %	1 Year
July 1, 2024		CPSJ	Calamos S&P 500 Structured Alt Protection ETF – July	9.2% - 9.7%	100 %	1 Year
August 1, 2024		CPSA	Calamos S&P 500 Structured Alt Protection ETF – August	TBD	100 %	1 Year
September 3, 2024		CPNS	Calamos Nasdaq-100 Structured Alt Protection ETF – September	TBD	100 %	1 Year
September 3, 2024		CPST	Calamos S&P 500 Structured Alt Protection ETF – September	TBD	100 %	1 Year
October 1, 2024		CPRO	Calamos Russell 2000 Structured Alt Protection ETF* – October	TBD	100 %	1 Year
October 1, 2024		CPSO	Calamos S&P 500 Structured Alt Protection ETF – October	TBD	100 %	1 Year
November 1, 2024		CPSN	Calamos S&P 500 Structured Alt Protection ETF – November	TBD	100 %	1 Year
December 2, 2024		CPNQ	Calamos Nasdaq-100 Structured Alt Protection ETF – December	TBD	100 %	1 Year
December 2, 2024		CPSD	Calamos S&P 500 Structured Alt Protection ETF – December	TBD	100 %	1 Year
January 2, 2025		CPRY	Calamos Russell 2000 Structured Alt Protection ETF* – January	TBD	100 %	1 Year
January 2, 2025		CPSY	Calamos S&P 500 Structured Alt Protection ETF – January	TBD	100 %	1 Year
February 3, 2025		CPSF	Calamos S&P 500 Structured Alt Protection ETF – February	TBD	100 %	1 Year
March 3, 2025		CPNM	Calamos Nasdaq-100 Structured Alt Protection ETF – March	TBD	100 %	1 Year
March 3, 2025		CPSR	Calamos S&P 500 Structured Alt Protection ETF – March	TBD	100 %	1 Year
April 1, 2025		CPRA	Calamos Russell 2000 Structured Alt Protection ETF* – April	TBD	100 %	1 Year
April 1, 2025		CPSP	Calamos S&P 500 Structured Alt Protection ETF – April	TBD	100 %	1 Year
June 2, 2025		CPSU	Calamos S&P 500 Structured Alt Protection ETF – June	TBD	100 %	1 Year

About Calamos
Calamos Investments is a diversified global investment firm offering innovative investment strategies, including alternatives, multi-asset, convertible, fixed income, private credit, equity, and sustainable equity. With $37.5 billion in AUM, including more than $16 billion in liquid alternatives assets as of May 31, 2024, the firm offers strategies through ETFs, mutual funds, closed-end funds, interval funds, and UCITS funds and separately managed portfolios. Clients include financial advisors, wealth management platforms, pension funds, foundations & endowments, and individuals, globally. Headquartered in the Chicago metropolitan area, the firm also has offices in New York, San Francisco, Milwaukee, Portland (Oregon), and the Miami area. For more information, visit us on LinkedIn, on Twitter (@Calamos), on Instagram (@calamos_investments), or at www.calamos.com. 

The information in each fund's prospectus and statement of additional information) is not complete and may be changed. We may not sell the securities of any fund until such fund's registration statement filed with the Securities and Exchange Commission is effective. Each fund's prospectus and statement of additional information is not an offer to sell such fund's securities and is not soliciting an offer to buy such fund's securities in any state where the offer or sale is not permitted.

Before investing, carefully consider the fund's investment objectives, risks, and 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.

Calamos Investments LLC, referred to herein Calamos is a financial services company offering such services through its subsidiaries: Calamos Advisors LLC, Calamos Wealth Management LLC, Calamos Investments LLP, and Calamos Financial Services LLC.

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 and 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.

Investing involves risks. Loss of principal is possible. The Fund(s) 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.

There are no assurances the Fund(s) will be successful in providing the sought-after protection. The outcomes that the Fund(s) seeks to provide may only be realized if you are holding shares on the first day of the outcome period and 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(s) will achieve its investment objective. If the outcome period has begun and the underlying ETF has increased in value, any appreciation of the Fund(s) 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 fund(s) for the outcome period, before fees and expenses. If the outcome period has begun and the Fund(s) have 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(s). The Fund(s) website, www.calamos.com, provides important Fund information as well information relating to the potential outcomes of an investment in the Fund(s) on a daily basis. 

The Fund(s) 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(s) 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(s) 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(s) 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 Rate – Maximum percentage return an investor can achieve from an investment in the Fund if held over the Outcome Period.

Cap Range – Cap ranges are based on the last 15 trading days prior to range announcement, based on market conditions during the sample period, and are subject to change. The actual cap rate may be different based on market events.

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

Outcome Period – Number of days in the Outcome Period.

Calamos Financial Services LLC, Distributor

© 2024 Calamos Investments LLC. All Rights Reserved. Calamos® and Calamos Investments® are registered trademarks of Calamos Investments LLC.

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SOURCE Calamos Investments

FAQ

When will Calamos launch the S&P 500 Structured Alt Protection ETF – July (CPSJ)?

The Calamos S&P 500 Structured Alt Protection ETF – July (CPSJ) will be launched on July 1, 2024.

What is the estimated cap range for CPSJ?

The estimated cap range for CPSJ is 9.2%-9.7% over the one-year outcome period.

What protection level does the CPSJ ETF offer?

The CPSJ ETF offers 100% downside protection if held through the one-year outcome period.

What is the annual expense ratio for CPSJ?

The annual expense ratio for CPSJ is 0.69%.

What benchmark does the CPSJ ETF track?

The CPSJ ETF tracks the price return of the SPDR® S&P 500® ETF Trust (SPY), based on the S&P 500 Index.

Who manages the CPSJ ETF portfolio?

The CPSJ ETF portfolio is managed by Co-CIO Eli Pars and the Alternatives Team.

What tax advantages does the CPSJ ETF offer?

The CPSJ ETF offers tax advantages by allowing gains to grow tax-deferred, with long-term capital gain rates applicable if held for more than a year.