The Specialist Advantage: Reckoner Capital’s Active CLO Focus
In an investment landscape increasingly crowded by ETF generalists, Reckoner Capital stands apart through a singular focus as an active credit manager. Their investment philosophy is rooted in a fundamental principle of serving as a dedicated collateralized loan obligation (CLO) specialist rather than a generalist manager.In doing so, Reckoner Capital can leverage its deep technical mastery and requisite experience in CLO markets by turning this specialized knowledge into actionable innovation for investors. This includes active funds like the Reckoner Yield Enhanced AAA CLO ETF (RAAA ) and the Reckoner BBB-B CLO ETF (RCLO).A Specialist-First ApproachThe structural complexity of the underlying loan pools found in CLOs requires portfolio managers who have the requisite knowledge and understanding of these structured products. As such, we believe it calls for a “specialist-first” approach to the CLO market.
See More: Why Active Management Is Non-Negotiable for CLOs
This approach is the engine behind the firm’s ability to pioneer new CLO ETF structures that differentiate Reckoner Capital’s funds from other offerings. Reckoner Capital doesn’t simply replicate existing strategies, but uses active management to help address specific portfolio challenges. This includes strategically deploying leverage to boost yield potential as seen in RAAA, which is a move that redefined expectations for what a fixed-income-adjacent product could achieve. While RAAA targets the senior-most AAA-rated tranches, RCLO’s focus is on mezzanine tranches that may offer higher yield potential.s
In addition to RAAA and RCLO, Reckoner Capital offers a comprehensive suite of offerings designed to provide investors with alternative paths to their unique investment objectives. This includes capital preservation, reliable current income potential, or long-term capital accumulation potential.Precision-Focused, Active CLO ETFsAs specialists, Reckoner Capital can provide the precision and depth of insight that only years of dedicated focus can offer. Investing in CLOs comes with its own nuances; Reckoner’s actively managed ETF suite can help eliminate these complexities for existing and prospective investors.
While generalist firms may offer a broad menu, Reckoner Capital offers a menu of depth. In addition to RAAA and RCLO, the other options include:
Reckoner Yield Enhanced AAA CLO Reinvesting ETF (RAAR): provides leveraged exposure to AAA-rated CLO bonds seeking compounding value through distribution minimization and continuous reinvestment.
Reckoner Yield Enhanced AAA CLO Annual ETF (RAAY): provides leveraged exposure to AAA-rated CLOs while limiting distributions to a single annual payment.
Reckoner BBB-B CLO Reinvesting ETF (RCLR): provides exposure to primarily BBB- and BB-rated CLO bonds seeking compounding value through distribution minimization and continuous reinvestment.
Reckoner BBB-B CLO Annual ETF (RCLY): provides exposure to primarily BBB- and BB-rated CLO bonds while limiting distributions to a single annual payment.
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Credit ratings are assigned by Nationally Recognized Statistical Rating Organizations (NRSROs) on a typical credit rating scale that ranges from AAA (highest rating) to D (lowest). “Triple B” (BBB) and “Double B” (BB) refer to investment-grade and below-investment-grade ratings, respectively, reflecting the relative creditworthiness or risk of a security or issuer. For more information on credit ratings, please click here.Important Information
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. A prospectus and a summary prospectus which contains this and other information about the fund may be obtained by visiting https://funds.reckoner.com/assets/pdfs/RAAA-RCLO-Prospectus.pdf and https://funds.reckoner.com/assets/pdfs/ReinvestingETFs-Prospectus.pdf or call 212.597.2500. Please read each prospectus carefully before investing.
Investing involves risk. Loss of principal is possible. Each fund’s principal investment risks include all or some of the following risks: management risk, novel structure risk, affiliated fund risk, collateralized loan obligation risk, non-diversified fund risk, new fund risk, leverage risk, and liquidity risk. For additional information about these and other fund risks, please refer to the “Principal Investment Risks” section of each prospectus.
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Past performance is no guarantee of future results.
Collateralized Loan Obligations (“CLOs”) are structured products that issue different tranches, with varying degrees of risk, which are backed by an underlying portfolio consisting primarily of below investment grade corporate loans. Investments in CLOs presents risks similar to those of other credit investments, including interest rate risk, credit risk, liquidity risk, prepayment risk, and the risk of defaults of the underlying assets.
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