CLOZ provides access to assets typically available to institutional-only strategies.
The CLO-backed ETF seeks to offer an attractive monthly yield and diversification from stocks and bonds.
NEW YORK, Jan. 24, 2023 /PRNewswire/ -- Panagram Structured Asset Management ("Panagram"), a $13.5 billion credit asset manager and a subsidiary of Eldridge, today announced the launch of its first ETF: Panagram BBB-B CLO ETF (NYSE: CLOZ).
The actively managed fund invests in Collateralized Loan Obligations (CLOs), which offer compelling risk-adjusted exposure to corporate credit. CLOs often have historically provided higher yield than similarly rated corporate bonds and benefit from structural rules that may benefit investors from credit loss. Cycle-tested and resilient, CLOs are backed by senior loans that sit at the top of the corporate capital structure and are secured by corporate assets.
Despite growing to $1 trillion in size, the CLO market requires expertise to navigate. Panagram is a CLO investment specialist, managing one of the largest portfolios of CLO debt and majority CLO equity. The Panagram team has extensive experience in originating, structuring, monitoring, and investing in the CLO market. Due to Panagram's long-standing relationships in the institutional CLO market, its move into the ETF space enables access to assets that have the potential to offer monthly income while diversifying away from stocks and bonds.
"Our goal is to provide investors with a liquid alternative to traditional fixed income with attractive structural features and competitive yield," said John Kim, CEO of Panagram and Portfolio Manager of CLOZ. "We recognize how difficult 2022 was, and the historical outperformance of CLO tranches versus other corporates led us to create this innovative floating-rate product for the retail investor. We are excited to launch CLOZ, which seeks to democratize CLO exposure and provide investors with the added benefit of expert oversight."
The portfolio of CLOZ will primarily comprise BBB and BB rated CLO bonds and is expected to pay a monthly dividend. Historically, CLO bonds rated BBB and BB not only tend to provide higher current yield than comparable credit products but also maintain low correlations to public debt and equity markets, making CLOZ a potential portfolio diversifier within today's volatile market environment.
CLOZ is listed on the NYSE and has an expense ratio of 0.50%.
About Panagram
Panagram is a $13.5 billion structured credit asset manager specializing in CLO, ABS, and CRE markets. Together, Panagram's investment team has been managing structured credit assets for Eldridge and its affiliates since 2014. Panagram officially launched in 2021 as a subsidiary of Eldridge and has grown to become one of the largest investors in CLO debt and CLO majority equity. For more information, please visit p-gram.com
Important Disclosures
Past performance is not indicative of, nor a guarantee of, future performance.
An investor should consider the Fund's investment objective, risks, charges, and expenses carefully before investing. The prospectus contains this and other information about the Fund. See CLOZ's website for a prospectus. www.clozfund.com. Please read carefully before investing.
Important Risks
CLO Risk. The risks of investing in CLO securities include both the credit risk associated with the underlying loans combined with the risks associated with the CLO structure governing the priority of payments (and any legal and counterparty risk associated with carrying out the priority of payments). This Fund intends to invest primarily in BBB and BB rated tranches (or equivalent ratings by a NRSRO); however, these ratings do not constitute a guarantee of credit quality and it's possible that under stressed market environments these tranches could experience substantial losses due to actual defaults, write-downs of the equity or other subordinated tranches, increased sensitivity to defaults due to collateral default and impairment of subordinate tranches, market anticipation of defaults, and general market aversion to CLO securities as an asset class.
Subordinated (i.e., mezzanine) CLO tranches are subject to higher credit risk and liquidity risk relative to more senior CLO tranches. The Fund is expected to have significant exposure to below investment grade CLO tranches (up to 70% of its total assets). To the extent a CLO or its underlying loans experience default or are having difficulty making principal and/or interest payments, subordinate CLO tranches will be more likely to experience adverse impacts, and such impacts will be more severe, relative to more senior or higher-rated CLO securities, which in turn will adversely affect the performance of the Fund. Under certain circumstances, no payment of interest or principal can be made to a holder of a mezzanine CLO tranche until the interest or principal payments have been made in full to holders of the Senior tranches.
Distributor: Quasar Distributors, LLC.
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SOURCE Panagram Structured Asset Management
