Reckoner Capital Management introduced its newest ETF, the Reckoner BBB-B CLO ETF (NYSE:RCLO), launched on Wednesday, with more than $27 million in assets under management. The actively managed CLO ETF aims to produce income while maintaining capital, investing a substantial portion of its assets in Collateralized Loan Obligation (CLO) bonds rated BBB- and BB.
John Kim, Reckoner co-founder and CEO, explained the launch timing amid high investor demand for CLO-targeted ETFs, especially from those seeking higher yields and diversification away from conventional fixed-income products. "While most inflows have been directed to the AAA space, BBB- and BB-rated CLOs offer a higher yield than AAA CLOs while still outperforming other credit assets with similar ratings in terms of loss experience. We expect to see more investor interest in these mezzanine tranches as the market continues to develop," he said.
RCLO has an expense ratio of 0.50% and is overseen by Kim together with portfolio managers Tim Wickstrom and Jared Finsterbusch.
Closing The CLO Gap
RCLO tracks the Reckoner Yield Enhanced AAA CLO ETF (NYSE:RAAA), launched in July this year and focused on the highest-rated part of the CLO market. “While most of the inflows have gone into the AAA space, BBB- and BB-rated CLOs provide a higher yield than AAA CLOs but still perform better than other credit assets with similar ratings in terms of loss experience,” Kim explained. He added that demand for such mezzanine tranches should increase as the market matures.
Established in early 2025 with support from private equity firm RedBird Capital Partners, Reckoner has become a structured product specialist focused on CLOs. Traditionally, CLOs have been the preserve of institutional investors, with restricted access for retail players. ETFs like RCLO aim to level the playing field by providing exposure in a liquid, listed form.
As investors turn to alternatives in low-yielding conditions, RCLO is Reckoner’s latest attempt to combine income generation with capital preservation in broadening retail access to the formerly exclusive universe of CLOs.
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