Given the turbulent track record of the U.S. market this year, many advisors are turning to ETFs that blend income with equity exposure.
The reasoning behind this shift is fairly straightforward. Should equity market returns sputter out this year, these ETFs could still fortify a portfolio with regular income.
Inversely, if equity markets perform well this year, this kind of strategy can offer simultaneous capital appreciation and portfolio yield. Combined with the tax-efficiency of the ETF wrapper, these funds can prove themselves to be highly efficient investment options.
That being said, it’s important for advisors to do their research before taking on ETFs like these. Each strategy can offer different sector and asset class exposures, and some may be more well-positioned for 2025 than others.
How CANQ Uses Bonds to Stand Apart
Take the Calamos Nasdaq Equity & Income ETF (CANQ ), for instance. This fund offers equity exposure to the Nasdaq-100 through a mix of options and direct investment in individual stocks.
Compared to similar ETFs with equity income strategies, CANQ stands out in regards to how it builds income. Many ETFs that promise equity exposure with income do so through an options overlay on their respective equities.
However, CANQ offers an alternative take on building portfolio yield through the use of bonds. The fund holds a heavy-handed allocation towards bond ETFs and other fixed income securities.
Considering the shaky performance of the U.S. equity market, CANQ’s bond allocation may be more valuable than ever. The bond market has been noticeably more consistent, letting the fund still grow even while equity returns falter.
Powered by the strength of bond returns, CANQ is outperforming many of its peers in the equity income ETF space. The below chart illustrates how CANQ is outpacing the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ ) in terms of returns over the last twelve months.
This long-term portfolio growth comes alongside strong yield opportunities. As of March 31, 2025, CANQ has a 30-day SEC yield of 5.49%.
While the path ahead for U.S. equities may be a bit uncertain, CANQ can help a portfolio stay engaged while simultaneously diversifying its risk profile through bonds. As such, the fund could very well remain an attractive vehicle for navigating macro conditions.
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Disclosure Information
Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Please see the "prospectus and summary prospectus":https://www.calamos.com/resources/ containing 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.
Risks of investing in the *Calamos Nasdaq® Equity & Income ETF* include risks associated with: Authorized Participant Concentration Risk — Only an Authorized Participant may engage in creation or redemption transactions directly with the Fund, and none of those Authorized Participants is obligated to engage in creation and/or redemption transactions; Debt Securities Risk — Debt securities are subject to various risks, including interest rate risk, credit risk and default risk; Equity Securities Risk — The securities markets are volatile, and the market prices of the Fund’s securities may decline generally; *FLEX Options Risk* — The Fund may invest in FLEX Options issued and guaranteed for settlement by The Options Clearing Corporation (“OCC”). FLEX Options are customized option contracts that trade on an exchange but provide investors with the ability to customize key contract terms like strike price, style and expiration date while achieving price discovery in competitive, transparent auctions markets and avoiding the counterparty exposure of over-the-counter options positions; High Yield Risk — High yield securities and unrated securities of similar credit quality (commonly known as “junk bonds”) are subject to greater levels of credit and liquidity risks; LEAPS Options Risk — The Fund’s investments in options contracts may include long-term equity anticipation securities known as LEAPS Options. LEAPS Options are long-term exchange-traded call options that allow holders the opportunity to participate in the underlying securities’ appreciation in excess of a specified strike price without receiving payments equivalent to any cash dividends declared on the underlying securities; Liquidity Risk – FLEX Options — In the event that trading in the underlying FLEX Options is limited or absent, the value of the Fund’s FLEX Options may decrease; Liquidity Risk – LEAPS Options — In the event that trading in the underlying LEAPS Options is limited or absent, the value of the Fund’s LEAPS Options may decrease; Market Maker Risk — If the Fund has lower average daily trading volumes, it may rely on a small number of third-party market makers to provide a market for the purchase and sale of Fund Shares; Market Risk—The risk that the securities markets will increase or decrease in value is considered market risk and applies to any security; New Fund Risk — The Fund is a recently organized investment company with a limited operating history; Non-Diversification Risk — The Fund is classified as “non-diversified” under the 1940 Act; Options Risk—The Fund’s ability to close out its position as a purchaser or seller of an over-the-counter or exchange-listed put or call option is dependent, in part, upon the liquidity of the option market; Other Investment Companies (including ETFs) Risk — The Fund may invest in the securities of other investment companies to the extent that such investments are consistent with the Fund’s investment objective and the policies are permissible under the 1940 Act.
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).
Calamos Financial Services LLC, Distributor
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
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