By coinnews 
00:00 Speaker A
With a record number of Americans turning 65 this year, our next guest says the latest market volatility could put those soon to be retirees’ finances at risk and has some and has some alternative ETF strategies that could be of use to those investors. I want to bring Matt Kaufman, Kalamos investments head of ETFs for this week’s ETF report brought to you by Invesco QQQ. Matt, great to have you on here. Just tell me first about the activity that you are seeing from those soon to be retiree. How have they been positioning in this environment?
00:41 Matt Kaufman
Sure. Thanks for having me on. I appreciate it. What we’re seeing today is a lot of these retirees are largely invested in what we would call target date funds. You know, as these retirees age, the traditional wisdom is to start moving from stocks into bonds. And you know, that economic uncertainty is really nothing new, but seeing people move into those bonds and have those bonds decline in value has not always been the precedent. So sometimes we see bonds providing that diversification that retirees are looking for and other times, those assets become highly correlated with equities and they fall together. And I think it’s those times that we see that that potential portfolio damage to retirees, especially those looking to use that portfolio to provide for themselves when they no longer work.
01:44 Speaker A
And and talk to me about just some of the activity you’ve seen in terms of investors seeking safety in things like the equal weighted S&P 500, but also in foreign markets like Europe, like China, to what extent have you seen that kind of flight to safety?
02:09 Matt Kaufman
Yeah, sure. You know, financial crisis in general is nothing new. We’ve seen global financial crises, we’ve seen a pandemic, we’ve seen increased money supply, 500 basis point interest rate hikes. Today’s catalyst seems to be this tension between a potential trade war, tariffs, while inflation hasn’t really normalized to that 2% level that people are looking for. So we’re up against this environment of the desire or even the need to bring inflation down against policies that are, you know, theoretically inflationary or at least on the short term. So people are wondering where to go with their money, especially retirees who’ve got to outpace that inflation over time. And so we’re seeing those types of investors move into what we would call our protected equity solutions. So those that give you upside opportunity to allow you to stay in the equity markets, which, you know, inflation tends to move through the equity markets over time, but then have a level of downside protection. So we have 100% downside protected ETFs for those who buy in toward the beginning, you can get that 100% protection. CPSP was our April S&P 500 series. That product launched April 1st. People who bought in on April 1st were protected from that drawdown in the equity markets. And we’re seeing people move into those products even now to get that protection, but be able to outpace inflation with the market.
04:23 Speaker A
And Matt, I want to bring in Steve Sosnick of Interactive Brokers, our guest host. He’s got a question for you.
04:32 Speaker B
Great.
04:33 Steve Sosnick
So, hi Matt. You know, looking through the the holdings, let’s say of the CPSP, you know, it’s basically I’m seeing a very, you know, 100 Delta 100 Delta call struck, you know, Spider struck at like 78 cents or something. Then I see a collar on top of it. And so now we’re below the low end of the collar. When when people were buying the, I understand the appeal now because at this point the the strike on the SPY is is is very much in the money. It’s like 559, with the index at about 532 or something, the ETF at about 532. Um, do people, you know, when people were buying in, I understand the appeal. Were they were they really understanding the idea of the collar that you had your upside, that you did have your upside capped as a result of needing to finance the puts that you bought to protect their downside?
06:00 Matt Kaufman
Yeah, oh, absolutely. And and I’m glad you brought that up. One thing that we do in particular at Kalamos is we offer all of that information on our website. So advisors and investors can go to our website, use the tools that we have, and they can see exactly what they’re in for before they buy. You can see your upside opportunity, how much that upside is. You know, there’s no free lunch, there’s a cap on your upside, how much protection you have, and then like to your point, how many days are left in that outcome period. So we see people buying in at the beginning, and then to your point on the optionality today, we see people buying in today after the market has dropped because that ETF might be down 50 basis points or so. And so if you buy in today, you’re going to earn that 50 basis points, no matter what happens in the market over the remaining time frame.
07:11 Speaker A
All right, Matt. Thank you so much. Really appreciate it. Still with me, Steve Sosnick of Interactive Brokers. Steve, we got about 30 seconds left. You told me that for low risk investors, no problem sitting in cash. What is the advice for the high risk investor right now? Or the idea?
07:31 Steve Sosnick
You may you may not want to be, you know, all in all the time with leverage, but I think you do want to be opportunistic. There the key here is there are there are values to be had. The question is finding them and the question is avoiding the minefields. And with something something like Nvidia, which seem like a may have seemed like a good value on a on this pull back recently, now all of a sudden today looks very different. And this is the investing environment you’re in. Be nimble. Look for opportunities. You can do it. If you’re a long-term investor, stay the course if you, you know, if you’re 40 years out from retiring, 30 years out from retiring, just keep the putting the money in your 401k, let it work for you. If you do have short, if you do have shorter term needs, then you want to be, then you want to be pulling in your horns a little bit.