Differentiated, actively managed ETF aims to deliver a unique combination of capital preservation and the potential for enhanced yield by investing in AAA CLO bonds

Reckoner Capital Management (“Reckoner”), a global asset management firm with specialized expertise in alternative credit, today announced the launch of the Reckoner Leveraged AAA CLO ETF (NYSE: RAAA), the first-ever 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,” said John Kim, CEO and co-founder of Reckoner. “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.”

As pioneers in the alternative credit space with deep CLO expertise, Reckoner is uniquely positioned to manage RAAA. The team brings deep experience in structuring complex alternative credit solutions and actively and dynamically managing levered credit investment vehicles.

RAAA seeks to deliver attractive risk-adjusted returns through the following features:

• Asset Selection and Portfolio Construction – Leveraging Reckoner’s longstanding industry relationships and access to attractive AAA-rated CLO bonds, 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. Reckoner will use a rigorous, data-driven approach to selecting bonds based on the investment skill, process, track record, reputation, and risk appetite of CLO managers.

• Active and Dynamic Portfolio Management – Capitalizing on its proven risk control capabilities, including hedging strategies and downside risk scenario analysis, 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 - increasing leverage during periods of economic stability and reducing it during periods of market volatility.

“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,” said Kim. “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.”

To learn more about RAAA, please visit www.reckoner.com/raaa.

ABOUT RECKONER CAPITAL MANAGEMENT

Reckoner Capital Management is a global asset management firm with specialized expertise in alternative credit. We are dedicated to delivering superior investment performance to institutional and retail clients by creating bespoke, innovative solutions and products that are directly aligned with their objectives. Leveraging our vast experience, expertise, and relationships, we bring highly differentiated alternative credit investments to Wall Street and Main Street, which has traditionally had limited access to this asset class. We are employee-owned and backed by RedBird Capital Partners, a $12 billion private equity firm.

Important Disclosures

Past performance is no guarantee of future results.

An investor should consider the investment objectives, risks, and charges and expenses of the fund carefully before investing. A prospectus which contains this and other information about the fund and may be obtained by visiting www.reckoner.com/RAAA. The prospectus should be read carefully before investing.

RAAA is different from most funds in that it seeks leveraged returns, which makes it riskier than funds that do not use leverage. Periods of higher market volatility may affect RAAA’s return more than the returns of funds that do not use leverage. Accordingly, RAAA may not be suitable for all investors and should be used only by knowledgeable investors who understand the potential consequences of seeking leveraged investment results. Shareholders should actively manage and monitor their investments.

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.

RAAA is a recently organized investment company with no operating history. As with all ETFs, shares of RAAA may be bought and sold in the secondary market at market prices (not NAV) and are not individually redeemed from RAAA. Total returns are calculated using the daily 4:00pm net asset value (NAV). Although it is expected that the market price of shares of RAAA will approximate the intraday value of RAAA’s holdings used to calculate RAAA’s NAV, there may be times when the market price is more than the intra-day NAV (premium) or less than the intra-day NAV (discount), which may result in a widening of the bid and ask spread, due to supply and demand of shares or during periods of market volatility. Market price returns do not represent the returns you would receive if you traded shares at other times. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for shares in the secondary market, in which case such premiums or discounts may be significant. Unlike other ETFs, RAAA expects to affect most of its creations and redemptions primarily for cash, rather than in-kind securities. Cash purchases and sales may cause RAAA to incur portfolio transaction fees, gains or losses on the sales, or charges or delays in investing the cash that it would otherwise not incur if a purchase or sale was made on an in-kind basis. RAAA’s investment in debt securities may subject it to liquidity risk, interest rate risk, floating-rate obligations risk, call risk, and extension risk.


This is a marketing communication provided for information purposes only and should not be construed as investment advice. It is not an offer to sell or a solicitation of an offer to buy the securities described within.

Reckoner Capital Management LLC or any connected party to RAAA shall not be held responsible for any damages or losses resulting from the use of any information contained within this publication, or from any inaccuracies or incompleteness in it. No guarantee of accuracy is given, and no liability is accepted for any errors or omissions. The information herein may change without notice and should not be used as a basis for investment decisions. The team previously managed assets at a prior firm and not at Reckoner Capital Management LLC.

Distributor: Quasar Distributors, LLC.

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"While the CLO ETF market has grown significantly as institutional and retail investors seek alternative credit investment opportunities…there is still limited differentiation among AAA CLO ETFs.” – John Kim, CEO and co-founder of Reckoner