CLOX seeks consistent return income with limited downside risk
NEW YORK, July 19, 2023 /PRNewswire/ — Panagram Structured Asset Management (“Panagram”), a $14.7+ billion credit asset manager specializing in collateralized loan obligations (“CLOs”), announced the launch of its second ETF: Panagram AAA CLO ETF (NYSE: CLOX).
CLOX prioritizes capital preservation by investing in AAA-rated CLOs. This sector of the corporate credit market has a long-standing, robust historical track record, with no AAA-rated bond defaults in over 25 years. AAA-rated CLOs have a first priority on the interest and principal from underlying pools of senior secured loans. With CLOX, investors can gain access to a diverse pool of AAA-rated CLO bonds, which can offer higher yields than other similarly rated investments. Additionally, AAA-rated CLO bonds are less correlated to traditional stocks and bonds than other credit assets.
Panagram believes the CLO structure provides the best exposure to the $1.4 trillion senior secured loan market. CLOs have been a traditional institutional-only asset until recently, but investors can now enjoy access to the asset class in an accessible ETF wrapper.
Due to the complexity and specialized nature of the CLO bonds, CLOX requires active management expertise and scale to perform. Panagram is an investment specialist in this space, managing a large portfolio of CLO bonds. Panagram’s long-standing relationships within the institutional CLO market can position CLOX for preferential asset access.
“At Panagram, we have established ourselves as investment specialists in the CLO space, and the launch of CLOX reflects our commitment to providing investors with attractive investment opportunities,” said John Kim, CEO of Panagram and Portfolio Manager of CLOX. “CLOX is designed to be a capital preservation vehicle, offering investors the potential for consistent monthly income and limited downside risk.”
Key features of CLOX include:
Capital Preservation: CLOX can provide investors access to high-quality investments. We believe that CLO AAAs are high-quality investments with robust historical performance and a zero-loss record.
Potential for Higher Income: CLOX is expected to pay a monthly dividend to investors, offering consistent income.
Diverse Exposure: CLOX exposes investors to a diverse portfolio of industries, companies, and institutional loan managers.
Low Correlation: CLO AAA can offer low correlation to public bond and equity markets.
Active Management by CLO Experts: CLOX sets itself apart from the competition through Panagram’s highly skilled team of CLO specialists, leveraging its extensive knowledge and insights to maximize potential returns and mitigate risks.
CLOX is listed on the NYSE and has an expense ratio of 0.20%. A portion of CLOX’s management fees will be donated to Mosholu Montefiore Community Center in furtherance of Panagram’s efforts to drive real change in local New York City communities.
Panagram, a subsidiary of Eldridge, is a $14.7+ billion structured credit asset manager specializing in CLO, ABS, and CRE markets. Panagram’s investment team has been managing structured credit assets for Eldridge and its affiliates since 2014. Panagram officially launched in 2021 and has grown to become one of the largest investors in CLO debt and CLO majority equity. For more information, please visit p-gram.com
Past performance is not indicative of, nor a guarantee of, future performance.
An investor should consider the Fund’s investment objective, risks, charges, and expenses carefully before investing. The prospectus contains this and other information about the Fund. See CLOX’s website for a prospectus: www.cloxfund.com. Please read carefully before investing.
CLO Risk . The risks of investing in CLO securities include both the credit risk associated with the underlying loans combined with the risks associated with the CLO structure governing the priority of payments (and any legal and counterparty risk associated with carrying out the priority of payments). CLOX intends to invest primarily in AAA-rated tranches (or equivalent ratings by a NRSRO); however, these ratings do not constitute a guarantee of credit quality and it is possible that under stressed market environments these tranches could experience substantial losses due to actual defaults, write-downs of the equity or other subordinated tranches, increased sensitivity to defaults due to collateral default and impairment of subordinate tranches, market anticipation of defaults, and general market aversion to CLO securities as an asset class. The most common risks associated with investing in CLOs are interest rate risk, credit risk, liquidity risk, prepayment risk (i.e., the risk that in a declining interest rate period CLO tranches could be refinanced or paid off prior to their maturities and the Fund would then have to reinvest the proceeds at a lower rate), and the risk of default of the underlying assets.
CLOX is a recently organized investment company with no operating history. As with all ETFs, shares of CLOX may be bought and sold in the secondary market at market prices. Although it is expected that the market price of shares of CLOX will approximate the intraday value of CLOX’s holdings used to calculate its NAV, there may be times when the market price is more than the intra-day NAV (premium) or less than the intra-day NAV (discount), which may result in a widening of the bid and ask spread, due to supply and demand of shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for shares in the secondary market, in which case such premiums or discounts may be significant. Unlike other ETFs, CLOX expects to affect most of its creations and redemptions primarily for cash, rather than in-kind securities. Cash purchases and sales may cause the Fund to incur portfolio transaction fees, gains or losses on the sales, or charges or delays in investing the cash that it would otherwise not incur if a purchase or sale was made on an in-kind basis. The Fund’s investment in debt securities may subject it to liquidity risk, interest rate risk, floating-rate obligations risk, call risk, and extension risk.
Distributor: Quasar Distributors, LLC.
SOURCE Panagram Structured Asset Management