It’s no secret that when investors are considering which ETF to add to their portfolio, expense ratios tend to be a factor.
This should not come as a particular surprise. For investors and advisors alike, a lower expense ratio may offer the opportunity to take on a new strategy at a lower cost.
Expense ratios played a crucially important role when spot bitcoin ETFs were finally coming to market. Looking to get a leg up on the competition, many firms offered discounts on their expense ratios. Some fund teams even chose to waive their fees entirely for a limited time.
However, chasing lower expense ratios is not necessarily the most effective way to save money. Oftentimes, the true long-term discounts come from what the fund itself is offering.
CBXA Provides Cost Efficiency Over the Long Term
Currently, Calamos Investments offers the Calamos Bitcoin 90 Series Structured Alt Protection ETF – April (CBXA ) with an expense ratio of 69 basis points. This expense ratio is higher than what many of the traditional spot bitcoin ETFs are offering.
That being said, CBXA is built with protection of principal in mind. After paying the necessary expenses and fees, CBXA limits an investor’s maximum loss to -10% across its one-year outcome period.
Extensive loss protection is then paired with upside opportunity to bitcoin’s price performance. This is achieved through the fund’s use of FLEX options. While CBXA does have an upside cap on total returns, the fund still offers a runway to grow one’s portfolio through bitcoin.
Other bitcoin ETFs may offer a lower expense ratio than CBXA does, but it’s important to note that bitcoin is an inherently risky asset. These discounted funds may expose investors to portfolio losses if bitcoin goes through a bout of volatility.
Meanwhile, CBXA’s portfolio defense allows investors to stick with bitcoin while mitigating much of the asset’s volatility risk. By keeping its investors’ assets relatively safe, CBXA may very well prove to be a more cost-friendly bitcoin ETF in the long-term.
For more news, information, and analysis, visit the Crypto Content Hub.
Before investing, carefully consider a 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.
The Funds seek to provide investment results that, before taking fees and expenses into account, track the positive price return of the CME CF Bitcoin Reference Rate – New York Variant (“BRRNY”) (“Spot bitcoin”) up to a predetermined upside cap (the “Cap”) while seeking to protect against 100%, 90% or 80%, respectively, of losses (before total fund operating fees and expenses) of Spot bitcoin over a period of approximately one (1) year (the “Outcome Period”). The Funds will not invest directly in bitcoin. Instead, the Funds seek to provide investment results that, before taking total fund operating fees and expenses into account, track the positive price return of Spot bitcoin by investing in options that reference the price performance of one or more underlying exchange-traded products (“Underlying ETPs”) which, in turn, own bitcoin and/or one or more indexes that are designed to track the price of bitcoin (“Bitcoin Index”).
The Target Outcome may not be achieved, and investors may lose some or all of their money. The Funds are designed to achieve the Target Outcome only if an investor buys on the first day of the Outcome Period and holds a Fund until the end of the Outcome Period. While the Funds seek to provide 100%, 90% or 80% protection against losses experienced by the price of Spot bitcoin for shareholders who hold Fund Shares for an entire Outcome Period, there is no guarantee a Fund will successfully do so. If a Fund’s NAV has increased significantly, a shareholder that purchases Fund Shares after the first day of an Outcome Period could lose their entire investment. An investment in the Funds is only appropriate for shareholders willing to bear those losses. There is no guarantee the Capital Protection and Cap will be successful, and a shareholder investing at the beginning of an Outcome Period could also lose their entire investment.
An investment in the Funds is subject to risks, and you could lose money on your investment in a Fund. There can be no assurance that a Fund will achieve its investment objective. Your investment in a Fund 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 a Fund can increase during times of significant market volatility. The Funds also have specific principal risks, which are described below. More detailed information regarding these risks can be found in the Funds’ prospectus.
Digital Assets Risk: The Bitcoin network was first launched in 2009 and bitcoins were the first cryptographic digital assets created to gain global adoption and critical mass. Although the Bitcoin network is the most established digital asset network, the Bitcoin network and other cryptographic and algorithmic protocols governing the issuance of digital assets represent a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. Moreover, because digital assets, including bitcoin, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict as of the date of this prospectus. Digital assets represent a new and rapidly evolving industry, and the value of the Underlying ETPs’ shares depends on the acceptance of bitcoin. The realization of one or more of the following risks could materially adversely affect the value of the Underlying ETPs’ shares.
Investing involves risks. Loss of principal is possible. The Funds face numerous market trading risks, including authorized participation concentration risk, underlying ETP risk, cap change risk, capital protection risk, capped upside risk, cash holdings risk, concentration risk, clearing member default risk, correlation risk, costs of buying and selling fund shares, counterparty risk, derivatives risk, equity securities risk, FLEX options risk, interest rate risk, investment in a subsidiary, investment timing risk, liquidity risk, management risk, market maker risk, market risk, new fund risk, non-diversification risk, options risk, OTC options risk, position limits risk, premium-discount risk, secondary market trading risk, sector risk, tax risk, trading issues risk, U.S. Government security risk, U.S. Treasury risk, and valuation risk. For a detailed list of Fund risks see the prospectus.
100%, 90% or 80% capital protection is over a one-year period before fees and expenses. All caps are predetermined.
Cap Rate – Maximum percentage return an investor can achieve from an investment in a Fund if held over the Outcome Period.
Protection Level – Amount of protection a Fund is designed to achieve over the Days Remaining.
Outcome Period – Number of days in the Outcome Period.
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