Daily ETF Watch: Calamos Sets 1st Launch

July 11, 2014

The shop known for convertibles sets launch for its first ETF, an active equity strategy.

(An earlier version of this article made reference to smart-beta funds. Calamos has obtained regulatory permission to market active ETF strategies, and the first fund is an active ETF and not a "smart beta" fund. We regret the error).

ETF newcomer Calamos ETF Trust, a Naperville, Ill.-based money manager, on Monday, July 14 is launching its own brand of active ETFs wrapper at a time when issuers are trying to slice and dice cap-weighted indexes to extract every ounce of beta they can from markets that are still reaching new highs.

Calamos plans to roll out the Calamos Focus Growth ETF (CFGE), which will invest primarily in growth-oriented companies with market capitalizations of more than $1 billion that the firm believes offer the best opportunities for growth, according to the regulatory filing.

The fund may also invest up to 25 percent of its assets in foreign securities, and may invest in equity securities issued by other investment companies, including money market funds. It has a net expense ratio of 0.90 percent, or $90 for every $10,000 invested.

Calamos, a mutual fund shop with a reputation in convertible securities, is one of many firms lining up in the hopes of offering up active ETF wrappers as the ETF industry continues to grow. The notion of active to some in the ETF industry can extend to new-generation "smart beta" indexes. For example, J.P. Morgan last month launched its quasi-active smart-beta fund, the JPMorgan Diversified Return Global Equity ETF (JPGE | F-19). But the Calamos strategy is actively managed.

The launch comes at a time when the S&P 500 Index is up more than 6 percent year-to-date after it shot up more than 30 percent in 2013. Gains in stocks have been fueled by an accommodative Federal Reserve that continues to keep interest rates at ultra-low levels. Additionally, the U.S. economy has shown steady, if slow, growth, since it began to recover from the market crash of 2008-2009.

To date, the ETF market has expanded to 1,618 funds, with more than $1.868 trillion in assets under management, according to ETF.com’s data screener. But less than 1 percent of those assets are in actively managed strategies.

News of Calamos’ plans to launch its first ETF on July 14 came courtesy of a Nasdaq communique.



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