The potential market for exchange-traded funds (ETFs) may be much larger than previously thought, according to Matt Kaufman of Calamos Investments. Kaufman believes that there are trillions of dollars currently sitting in CD and money market accounts, presenting an opportunity for ETFs to capture this market. This untapped market is even larger than the size of the entire ETF space itself. Kaufman, the firm’s head of ETFs, emphasized the potential of moving this money into ETFs, providing a significant growth opportunity for the industry.
Kaufman advocates for the use of structured and options ETFs as a means of achieving stability and income in a higher interest rate environment. He argues that traditional bonds have not been effective in providing risk management and income when interest rates are low. However, as interest rates have increased, ETFs designed for risk management and income can offer capital protection over a specific period. This shift in interest rates opens up new opportunities to utilize these products effectively.
In a higher-rate environment, ETFs can be particularly advantageous for individuals seeking to outpace inflation and generate income, especially retirees. Kaufman highlights the ability of these ETFs to provide returns greater than the risk-free rate, linking investments to the market without significant downside risk. Additionally, these investments offer tax-deferred growth, making them an attractive option for long-term investors looking to protect their capital and generate consistent income.
Calamos Investments recently introduced a suite of 12 structured protection ETFs, reflecting the firm’s commitment to providing innovative investment solutions in response to changing market conditions. These ETFs are designed to address the needs of investors in a higher interest rate environment, offering stability, income, and capital protection. With the growing demand for products that can deliver consistent returns and manage risk effectively, Calamos’ new ETF offerings are well-positioned to meet the needs of a diverse range of investors.
Overall, the market for structured and options ETFs appears to be expanding, driven by changing interest rates and investor preferences. As individuals seek ways to navigate market volatility and generate income in a challenging economic environment, ETFs that offer stability, income, and capital protection are likely to gain traction. With innovative offerings such as Calamos Investments’ structured protection ETFs entering the market, investors have access to a broader range of investment options to achieve their financial goals.
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