There's A New ETF Tracking S&P 500 That Offers '100% Downside Protection' But Here's The Catch
Portfolio Pulse from Kaustubh Bagalkote
The Calamos S&P 500 Structured Alt Protection ETF (CPSM) is launching with a unique offer of 100% downside protection for the S&P 500 over a one-year period, with a catch. The protection is available only for first-day purchasers, and upside gains are capped between 9.20% to 9.65%. This ETF contrasts with other S&P 500 ETFs like SPY, IVV, and VOO, which have shown significant returns over the past year. The market context includes potential interest rate hikes and mixed predictions on the stock market's future direction.
April 30, 2024 | 4:03 am
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POSITIVE IMPACT
CPSM offers a unique investment proposition with 100% downside protection and capped gains, appealing to cautious investors amid market uncertainty.
Given its unique offering of downside protection, CPSM is likely to attract investors seeking safety amidst market volatility, potentially increasing its demand and positively impacting its short-term price.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
IVV, showing a one-year return of 27.66%, competes with CPSM's downside protection but caters to a different investor profile seeking higher, uncapped returns.
IVV's appeal lies in its track record of strong returns. CPSM's entry introduces a new option for risk-averse investors, but IVV's uncapped growth potential should maintain its attractiveness, limiting any negative impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
SPY, with a one-year return of 27.48%, may face competition from CPSM but remains a strong choice for investors seeking uncapped market exposure.
While CPSM's downside protection is attractive, SPY's significant past returns and uncapped potential may keep it a preferred choice for those seeking full market exposure, mitigating any negative impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
VOO, with a one-year return of 27.70%, may see interest from investors comparing it to CPSM's downside protection and capped gains.
VOO's consistent performance and uncapped upside make it a compelling option for investors, despite CPSM's novel downside protection feature. The impact on VOO is likely neutral as it appeals to a different investor segment.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70