Reckoner Capital Management, a global asset management firm with specialized expertise in alternative credit, launched the Reckoner Leveraged AAA CLO ETF (NYSE: RAAA), a levered AAA CLO ETF.
“While the CLO ETF market has grown significantly as institutional and retail investors seek alternative credit investment opportunities that offer diversification, attractive yields, low default risk and inflation protection, there is still limited differentiation among AAA CLO ETFs,” John Kim, CEO and co-founder of Reckoner, said. “What is unique about RAAA is that we draw upon our longstanding industry relationships to select attractive, senior AAA CLO bonds, which seek to offer a high degree of capital preservation, and utilize reverse repurchase agreements to create a modest amount of leverage to provide investors with potentially higher yields relative to unlevered AAA CLO bonds.”
RAAA seeks to deliver attractive risk-adjusted returns through the following features:
- Asset Selection and Portfolio Construction –RAAA will invest in a diverse portfolio of primarily AAA-rated, floating rate CLO bonds that sit at the top of the capital structure and are designed to offer a hedge against interest rate volatility.
- Active and Dynamic Portfolio Management – Reckoner will actively manage the CLO bonds in RAAA to help generate attractive yields by borrowing through short-term repurchase agreements. Leverage in RAAA will be limited to 50%, and the team will dynamically manage it.
“Although our name and logo are new, our proven management team has worked together for the past decade and has managed over $16 billion in alternative credit assets,” Kim said. “We have more than a decade of experience structuring complex alternative credit solutions across a wide array of asset classes. We are excited to bring a new and innovative AAA CLO product to the market and pleased to make RAAA broadly accessible to individual investors.”
