Although large-cap equities certainly have shown resilience through 2024, investors should consider an allocation to small caps for potential long-term outperformance. With small-cap equities trading at a noticeable discount, investors know they should consider this move ahead of a potential small-cap rebound.
However, currently investing in small caps requires no small leap of faith, given that small caps declined more than 10% in 2023, with saw-toothed performance continuing into the first half of 2024. The question that gives investors pause: “What if they don’t bounce back?”
See Also: Try a More Tax-Efficient Small-Cap Strategy
On the other hand: “What if they do bounce back, and I miss the boat?” After all, The US Federal Reserve is likely to cut interest rates in the coming months, which we see as a powerful catalyst to trigger small-cap outperformance. A catch-up trade for the asset class may soon be on the horizon. (And July 2024 seems to confirm this.)
It’s a classic case of the paralysis of analysis.
Get Small-Cap Exposure with Lower Risk
Calamos Investments recently released a fund to help investors participate in a small-cap comeback while protecting against potential risk. The Calamos Russell 2000 Structured Alt Protection ETF – July CRPJ provides the positive price return of the Russell 2000® up to a defined cap while protecting against 100% of losses over a one-year period (before fees and expenses).
CRPJ can serve as a versatile investment for investors who wish to reap the long-term outperformance potential of small-cap equities while mitigating potential timing missteps and downside risk.
- As a Calamos Structured Protection ETF, CRPJ offers complete downside protection over a one-year outcome period. By securing assets away from underperformance risk across a year, the fund can act as a means to access small-cap while worrying less about when to invest.
- With an upside cap of 11.29% as of July 1, 2024, the fund can provide investors with the strong long-term outperformance potential that one expects from small-cap equities and one that is higher than many of the buffer strategies currently available on the market.
- CRPJ is an actively managed fund that leverages Calamos Investments’ extensive experience in managing options-based strategies. The fund’s active management can better aid investors seeking outperformance in the current market cycle and any number of other cycle scenarios.
CRPJ is one of the more recent Calamos ETF launches, released at the start of July alongside the Calamos S&P 500® Structured Alt Protection ETF – July (CPSJ). Through April 2025, Calamos will continue to release new Structured Protection ETFs on a monthly basis. Investors and advisors can click here for more information on upcoming fund launches from Calamos Investments.
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 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.
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.
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.
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.
The Calamos Russell2000® Structured Alt Protection ETFs (the “Funds”) have been developed solely by Calamos Advisors LLC. The “Funds” are not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell 2000® Index (the “Index”) vest in the relevant LSE Group company which owns the Index. The Russell 2000® Index is a trademark(s) of the relevant LSE Group company and is used by any other LSE Group company under license. e. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
STRUCTURED ALT PROTECTION ETF and STRUCTURED PROTECTION ETF are trademarks of Calamos Investments LLC.
Calamos Financial Services LLC, Distributor
Calamos Financial Services LLC
2020 Calamos Court | Naperville, IL 60563
866.363.9219 | www.calamos.com | [email protected]
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Calamos and Calamos Investments are registered trademarks of Calamos LLC.
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
