When choosing new strategies for a portfolio, investors should consider tax alpha.
Tax alpha refers to outperformance resulting from tax-efficient strategies. By mitigating taxable capital gains, for example, funds can provide stronger returns over time.
The Calamos suite of Structured Protection ETFs can help investors realize tax-deferred growth. For example, the Calamos Nasdaq-100® Structured Alt Protection ETF™ – June can potentially generate tax alpha that outperforms similar investment options.
When redeeming CPNJ shares, investors are taxed at a capital gains tax rate. This marks a stark difference between structured protection funds, money market funds, and other cash alternatives. Returns on investments such as certificates of deposit (CDS), structured notes, and annuities, returns are taxed at ordinary income rates.
Higher Return Potential
For high-income earners, long-term capital gains tax rates are far more beneficial than ordinary income tax rates. Consider the optimal scenario with a fund like CPNJ. An investor holds on to the fund for the one-year outcome period, and the fund reaches its 10.20%. From there, an investor in the top tax bracket would bring home closer to 6% in returns.
Investment instruments that utilize ordinary income rates could see notably weaker returns. If a CD or money market fund earns about 5% returns, ordinary income rates will significantly reduce that profit, dropping returns closer to 2%–3%.
This tax-efficient strategy is one of many benefits offered through the Calamos Structured Protection ETFs. These funds also promise 100% protection through the one-year outcome period. Even with the fund’s inherent defensive value, CPNJ provides investors with robust exposure to the Nasdaq-100®.
There are more Calamos Structured Protection ETFs coming, with planned monthly launches occurring through April 2025. Access the "Weekly Rate Sheet":https://www.calamos.com/structured-protection-etfs-weekly-rate-sheet/ to learn more about the timing of each fund launch.
For more news, information, and analysis, visit the Alternatives Channel.
Disclosure Information
Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.
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.
*The Calamos Russell 2000 Structured Alt Protection ETFs are currently reflected in an initial SEC filing under the name Calamos Capital Protected Russell 2000 ETFs.
Investing involves risks. Loss of principal is possible. The Funds 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.
Additional Information
There are no assurances the Fund will be successful in providing the sought-after protection. The outcomes that the Fund 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 will achieve its investment objective. If the Outcome Period has begun and the Underlying ETF has increased in value, any appreciation of the Fund 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 funds’ for the Outcome Period, before fees and expenses. If the Outcome Period has begun and the Fund has 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. The Fund’s website, www.calamos.com, provides important Fund information as well information relating to the potential outcomes of an investment in a Fund on a daily basis.
Other Information
These Funds 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 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 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 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 Range – Maximum percentage return an investor can achieve from an investment in the Fund if held over the Outcome Period. Cap range depicted is the high and low cap rate over the past 15 trading days. Actual cap delivered by the Fund may be different.
Protection Level – Amount of protection the Fund is designed to achieve over the Days Remaining.
Outcome Period – Number of days in the Outcome Period.
Nasdaq® and Nasdaq-100 are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Calamos Advisors LLC. The Fund has not been passed on by the Corporations as to their legality or suitability. The Fund is not issued, endorsed, sold, or promoted by the Corporations. The Corporations make no warranties and bear no liability with respect to the Fund(s).
STRUCTURED ALT PROTECTION ETF and STRUCTURED PROTECTION ETF are trademarks of Calamos Investments LLC.
Calamos Financial Services LLC and its representatives do not provide accounting, tax or legal advice. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Each individual’s tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation. For more information about federal and state taxes, please consult the Internal Revenue Service and the appropriate state-level departments of revenue, respectively. This information is provided for informational purposes only and should not be considered tax or legal advice.
Calamos Financial Services LLC, Distributor
Calamos Financial Services LLC
2020 Calamos Court | Naperville, IL 60563
866.363.9219 | www.calamos.com
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Calamos and Calamos Investments are registered trademarks of Calamos LLC.
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
