FAAA vs PAAA

FAAAAFIDELITY AAA CLO ETF

PAAAAPGIM AAA CLO ETF

In short

FAAA Fidelity's CLO entrant costs nothing to own right now: the 0.20% management fee is waived in full through January 31, 2027. Underneath sits an actively run book of AAA-rated CLO tranches with floating-rate coupons.

PAAA PGIM's entry in the AAA CLO race: an actively run book of the senior-most slice of collateralized loan obligations, floating-rate, priced at 0.19%, paid out monthly. Same playbook as the category's biggest names, a hair cheaper.

Stated mandate

FAAA The fund seeks to generate income by investing at least 80% of its assets in floating-rate collateralized loan obligations rated AAA.

PAAA The Fund seeks to maximize total return through current income and capital appreciation. It invests primarily in U.S. dollar-denominated AAA-rated CLOs and is actively managed rather than designed to replicate a specific index.

Why people hold it

• FAAA Fee waived in full: 0.00% net on a 0.20% gross expense ratio through January 31, 2027. Peer AAA CLO funds CLOA and JAAA charge 0.20% and PAAA 0.19%, with no waiver.fidelity.com
• At least 80% of assets go into AAA-rated CLO tranches, the senior slice of the structure, and floating-rate coupons keep interest-rate sensitivity short.sec.govfidelity.com
• Actively managed by Fidelity's fixed income group, and per the prospectus the adviser pays the fund's other expenses with limited exceptions, so the headline fee is the fee.sec.govfidelity.com
• Cost and portfolio construction put it among the stronger builds in a crowded AAA CLO field of more than 30 US funds.

• PAAA At 0.19%, one of the cheapest tickets into AAA CLOs, undercutting the 0.20% charged by CLOA, JAAA, FAAA and ACLO and sitting well below the category median.
• Keeps at least 80% of investable assets in US dollar CLOs rated AAA at purchase, the tranche that stands first in line for cash from the underlying loan pool.mutualfunds.compgim.com
• CLO coupons float, so the income stream resets with short-term rates rather than locking to a fixed coupon. Cash goes out monthly.pgim.com
• A multi-billion-dollar fund that trades actively, with spread and execution behavior among the strongest in its peer group.

Worth knowing

• FAAA The zero fee is contractual, not permanent. It runs through January 31, 2027, after which the 0.20% gross rate can apply.fidelity.com
• Launched in 2026, so the track record is short and the fund is smaller and less heavily traded than the category's longest-standing names.
• AAA is the senior CLO tranche, not a loss shield: prices can move in loan-market stress, and income floats with short-term rates on an irregular payout schedule.sec.gov

• PAAA Actively managed against the JP Morgan CLOIE AAA Index, not built to match it. Holdings and results can diverge from the benchmark by design.
• The AAA stamp sits atop a pool of leveraged loans to below-investment-grade borrowers, and up to 20% of investable assets can go outside AAA-rated CLOs.mutualfunds.com
• Launched in 2023, so the track record is short and does not yet span a full credit cycle.

Full FAAA profile⁠

Full PAAA profile⁠