PAAA vs PSQA

PAAAAPGIM AAA CLO ETF

PSQACPalmer Square CLO Senior Debt ETF

In short

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.

PSQA The index fund in a category of hand-picked portfolios. PSQA tracks Palmer Square's own CLO Senior Debt Index, a daily CLO benchmark since 2015, holding senior tranches rated AAA or AA at issuance.

Stated mandate

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.

PSQA The Fund seeks to track, before fees and expenses, the price and yield performance of the Palmer Square CLO Senior Debt Index.

Why people hold it

• 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.

• PSQA Passive where the category leans active: it follows a published rulebook for senior CLO debt rather than a manager's tranche-by-tranche calls, as rivals like CLOA do.sec.gov
• It tracks the house benchmark: Palmer Square launched the CLO Senior Debt Index on May 29, 2015, among the first broadly distributed daily CLO benchmarks, now subscribed to worldwide.prnewswire.comyahoo.com
• Fee is 0.21%, with no waiver propping it up. That sits near the category median and within a hair of PAAA (0.19%), JAAA and CLOA (0.20%).
• Scope is the top of the structure: index constituents are CLO debt rated AAA or AA at issuance, the tranches that get paid first.sec.gov

Worth knowing

• 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.

• PSQA Young fund: it listed in September 2024, so the record is short and has not yet run through a full credit cycle.
• The AA allowance puts part of the portfolio a notch below the AAA-only lineup (JAAA, CLOA, PAAA), which means a step up in credit risk.sec.gov
• Fidelity's FAAA and FCLO currently charge 0.00% under waivers running through January 31, 2027, so PSQA's 0.21% is the costlier seat while those waivers last.

Full PAAA profile⁠

Full PSQA profile⁠