Now a relatively new category of funds known as “ buffered ETFs ” is propelling the ETF industry ’ s asset boom .

Last year , buffered ETFs vacuumed in around $ 14 billion after two consecutive $ 10 billion years .

Sometimes referred to as “ defined outcome ” funds , buffered ETFs are built to offer upside performance to a predetermined cap or ceiling while simultaneously offering downside protection .

During the chaotic 2022 market downturn , buffered equity ETFs delivered on their goals without any hiccups . This , no doubt , instilled confidence in early adopters .

Back in 2018 , the first group of buffered

ETFs were tied to other ETFs linked to popular equity yardsticks like the S & P 500 . Fast-forward to now , and the emergence of cryptocurrencies like bitcoin has led to a slew of buffered ETFs covering this highgrowth area , too .

Among this group is the Calamos Bitcoin Structured Alt Protection ETF — January ( CBOJ ), which was recently listed .

As of January 20 , 2025 , the Calamos fund offered a 10.56 % upside in bitcoin ’ s performance in exchange for 98.95 % in downside protection through the fund ’ s one-year outcome period ending on January 30 , 2026 . Keep in mind that any changes in bitcoin prices between now and the final outcome date will ultimately change the fund ’ s upside cap and downside barrier . The fund ’ s annual expense ratio is 0.69 %.

In February , Calamos plans to add two more funds with similar bitcoin strategies that provide 90 % and 80 % downside protection levels ( their ticker symbols are “ CBXJ ” for the 90 % protection fund and “ CBTJ ” for the 80 % protection fund ). Since both these ETFs will offer less protection than the CBOJ fund , they will carry higher upside potential in bitcoin .

“ This enhancement builds upon the announcement of CBOJ , the world ’ s first 100 % Protected Bitcoin ETF , and continues our tradition of bringing innovative options-based and risk-managed investment solutions to the marketplace ,” says John Koudounis , president and CEO of Calamos .

Other ETF providers like First Trust are planning to launch their own versions of buffered crypto ETFs . And it ’ s easy to understand why . Bitcoin ETFs have been an absolute hit with traders and investors .

After investors waited years for spotpriced bitcoin ETFs , U . S . regulators finally approved them in early 2024 . Last year , the iShares Bitcoin Trust ( IBIT ) took in $ 37.5 billion and was among a short list of ETFs with the biggest inflows .

Many cryptocurrency traders and investors are looking for juicy returns and don ’ t necessarily care about protecting their principal . Nevertheless , buffered bitcoin ETFs might find an audience with risk-averse types and advisors who don ’ t want full exposure to the insane volatility that comes with crypto investing .

Will buffered crypto ETFs achieve the same popularity as 100 % long-only bitcoin funds ? And will they experience the same adoption as their buffered equity peers ?

While it ’ s too early to know the answer , ETF providers with buffered cryptocurrency lineups hold an appeal for defense-minded investors .

But whether this same group is OK with limiting the upside potential of bitcoin remains to be seen .

— Ron DeLegge of their lives . Tactically , only 12 % of advisors are even talking to the children of their clients . These are your next clients .” Such talks can prevent clients from going out the door , she said .

Galli said advisors “ need the ability to charge for service , do it at scale and have the right tools and communication framework to highlight the value they ’ re providing .”

Whether advisors choose to add flat-fee , hourly , subscription-based or performance-based price structures , there should be a sense of urgency in bringing next-gen clients on board , said Catherine Knopf , senior vice president of advisory sales at Osaic . She added that broker-dealers and giant RIAs must help advisors successfully incorporate these changes into their strategy with automation and technology outsourcing and staffing and education services , which will help the advisors manage their fixed costs and deliver new revenue streams to new generations .

— Tracey Longo

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