PAAA vs RCLY

PAAAAPGIM AAA CLO ETF

RCLYFReckoner BBB-B CLO Annual 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.

RCLY Most bond ETFs pay you monthly. RCLY is built the other way: exposure to BBB through B rated collateralized loan obligations with a stated mandate to make just one distribution a year.

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.

RCLY The Fund seeks total return while targeting only one dividend or distribution payment each year.

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.

• RCLY The mandate is unusual and explicit: seek total return while targeting a single dividend or distribution each year, so income lands as one annual event rather than twelve monthly ones.
• It goes down the CLO stack. The category's largest funds (JAAA, CLOA, PAAA, FAAA) concentrate on AAA tranches; this one targets BBB through B rated slices instead.
• Structurally simple: it is a wrapper on Reckoner's own BBB-B CLO ETF (RCLO), so one portfolio runs the credit exposure while this fund handles the annual payout schedule.

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.

• RCLY Costs 0.55% a year, above the CLO ETF norm: the big AAA funds in the category charge about 0.20%, and the cohort median sits near a quarter point.
• Launched in February 2026, so the track record is short, and it has been a small, lightly traded fund, which can mean wider bid-ask spreads.
• BBB-B rated tranches sit below the AAA paper most CLO ETFs hold, so moves in credit stress can be larger. And by design, cash arrives once a year, not monthly.

Full PAAA profile⁠

Full RCLY profile⁠