The latest news in investment offerings, financial products and other services relevant to wealth advisors and their clients.

Reckoner Capital Management 
Reckoner Capital Management, an asset management specializing in alternative credit, has launched an exchange-traded fund based on collateralized loan obligations.

The New York-listed Reckoner BBB-B CLO ETF is designed to generate income while providing the capital preservation of BBB- and BB-rated CLOs, which have outperformed similarly rated corporate bonds over the past decade, Reckoner said in a statement. 

CLOs are structured securities that bundle a pool of lower-rated corporate loans and sell them to investors in tranches. The "BBB rating" applies to one of these investment-grade debt tranches within the CLO, which offers a balance of higher yield and higher risk compared with more senior tranches.

“We continue to see strong demand in the CLO ETF market from investors who are seeking portfolio diversification and attractive yields with low correlation to traditional fixed income classes,” Reckoner co-founder and CEO John Kim, said.

“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,” Kim added.

RCLO invests primarily in BBB- and BB-rated CLO debt, it said. It is owned by its employees and partners with RedBird Capital Partners, a $12 billion private equity firm.