The global credit markets continue to evolve, enabling advisors to take a more tailored approach to diversifying fixed-income exposure through collateralized loan obligations (CLOs). While the demand for yield is unwavering, some investors aren’t just seeking income. Instead, they want tactical exposure that avoids the tax and administrative drag of monthly distributions — an ideal situation for the Reckoner Yield Enhanced AAA CLO Reinvesting ETF (RAAR) to solve.
Melding Tax Efficiency With Quality
RAAR is one of the newer funds in Reckoner’s growing suite of CLO ETFs. Compared to its sister fund, the Reckoner Yield Enhanced AAA CLO ETF (RAAA), RAAR is managed to seek to minimize distributions and maximize reinvestment, whereas RAAA distributes monthly income.
Maximizing reinvestment benefits long-term investors and/or high-net-worth individuals seeking an accumulation structure. The automatic feature eliminates the need for manual reinvestment, allowing compounding to work uninterrupted within the transparency and intraday flexibility of an ETF wrapper. Instead of distributing monthly income, the fund can defer taxable events until the investor exits the position, due to its reinvestment approach.
Because it focuses on top-tier AAA-rated tranches, RAAR prioritizes quality. In today’s uncertain fixed income environment, obtaining quality is imperative. As Reckoner noted on the fund’s product website, no AAA CLO bond has defaulted in the past 30 years[1].
Furthermore, CLOs have historically offered an attractive yield premium compared to traditional bonds. With virtually zero historical default risk at the AAA level, we believe RAAR is a compelling option as an alternative to or in conjunction with Treasury ETF exposure.
An Active Solution
Because it’s actively managed, RAAR draws on Reckoner’s CLO market expertise and experience. Actively managed funds provide flexible alternatives in today’s market uncertainty.
When it comes to CLOs, active management is a must. The CLO market presents its own unique set of complexities and idiosyncratic risks that require a deep well of experience and knowledge to navigate deftly, which Reckoner has.
With market uncertainty from 2025 returning to 2026, diversifying income is more necessary now than before. Rather than relying solely on traditional sources like bonds, income seekers can look to CLOs like RAAR to support long-term wealth building.
Best of all, investors get all the aforementioned benefits of RAAR at just 40 basis points.
To learn more about RAAR, click here.
[1] Bank of America Research, “CLO Factbook,” 5/30/2025
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Important Information
Carefully consider the fund’s objectives, risks, charges, and expenses before investing. The prospectus at www.reckoner.com/raar provides the full details. Read it carefully before investing. Investing involves risk including the risk of principal loss.
Each of the fund’s above have various principal investment risks which may include 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 the prospectus.
ETFs may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market prices (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Past performance is no guarantee of future results.
Collateralized Loan Obligations (“CLOs”) are structured products that issue tranches with varying degrees of risk. They 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.
Distributor: Quasar Distributors, LLC.
