JBBB vs PAAA

JBBBCJanus Henderson B-BBB CLO ETF

PAAAAPGIM AAA CLO ETF

In short

JBBB Most CLO ETFs stop at AAA. JBBB deliberately goes down the stack to BBB+ through B- tranches: floating-rate income with real credit risk attached, from the same Janus Henderson shop that runs its AAA sibling.

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

JBBB The fund seeks capital preservation and current income through floating-rate exposure to collateralized loan obligations generally rated from BBB+ through B-.

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

• JBBB The mezzanine option in a shelf full of AAA funds. While category leaders JAAA, CLOA and PAAA buy top-of-stack paper, JBBB targets CLOs rated BBB+ through B-.janushenderson.com
• CLO coupons float with short-term rates, so interest-rate duration is minimal. Stated goals are capital preservation and current income, and it pays monthly.
• Spread across roughly 220 positions inside a multi-billion-dollar, moderately traded fund, running as a standard 1940 Act ETF since January 2022.

• 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

• JBBB 0.47% a year, close to double the 0.25% median for CLO funds and the roughly 0.20% the large AAA rivals charge.
• BBB+ to B- tranches sit further down the credit ladder than the AAA paper most peers hold. More credit risk is the point, not an accident.
• Floating rate cuts both ways: as short-term rates move lower, the coupons the portfolio collects reset lower with them.

• 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 JBBB profile⁠

Full PAAA profile⁠