How to Invest in CLOs with ETFs

The Recker leveraged AAA clo ETF and your ticker is RAA.

It is an actively managed exchange traded fund.

It is designed to enhance yield on a diverse portfolio of AAA rated CLLO bonds.

What does this fund own and what makes it a compelling solution for fixed income investors? >> So the the fund will own basically senior AAA bonds from tier one managers in the market.

So if you look at the CLO market, there's about 130 140 managers in the US.

A lot of them are issuing several deal deals a year.

Um all of these deals will have a AAA trunch normally uh embedded in that structure.

So we are going to go in and buy a diverse portfolio of AAA bonds.

Um we underwrite the managers, we underwite the loan pools, we underwrite the structures that the CLO's um you know bas basically have you know financially in their structure.

So what we are trying to do is pick the best of the best, pick the safest bonds and the most liquid bonds because of course in an ETF rapper uh liquidity is key.

Um you really want to to be able to sell your portfolio on one day if you need to because it is a daily fund.

So we are very highly concentrated on finding bonds with a lot of bid depth in the market.

Meaning there's a lot of buyers for these bonds. um managers that are really name brand managers um have a long track record in history of selecting good assets to back their bonds and uh and and enough diversity to sort of make um you know make it such that you are not taking risk on any individual name any individual structure so it's very important that that that we select in a way that creates diversity for the investors so that if you buy one share of our ETF you are getting access to all of those um diverse portfolio uh you know benefits, right?

So you have um not only manager and bond but you know the underlying assets which are very diverse