Matt Kaufman, Global Head of ETFs for Calamos Investments, joined Julie Cooling, Founder and CEO of RIA Channel, at the New York Stock Exchange bell-ringing ceremony to celebrate the launch of the Calamos Autocallable Income ETF (CAIE).
Kaufman notes that autocallable income is a large part of the structured notes market. Calamos is bringing this derivative income strategy into the ETF market. An autocallable income note can be thought of as a bond with a par value and a coupon that is derived from the equity market rather than the bond market.
Investors have allocated $115 billion to the derivative income ETF market. Autocallable notes, which are a put writing strategy, dominate the issuance of the structured note market. The ETF offers the potential of high tax-advantaged income with laddered exposure to a number of autocallable notes, which diversifies maturity and coupon risks. CAIE can play a role in model portfolios and be purchased as a single ticker.
Purchasing autocallable notes in an ETF provides a number of benefits, including liquidity, added transparency, and diversification across a number of note maturities. Advisors find it much easier to allocate to a single ETF than to purchase a portfolio of single notes, which must be replaced after being called or maturing.