Listed Funds Trust – Reckoner BBB-B CLO ETF (RCLO)

Overview

RCLO is dedicated to achieving both income generation and capital preservation through its investments in USD-denominated collateralized loan obligations (CLOs) that are rated between BBB+ and B-. These CLOs are created by trusts or special purpose entities, backed by aggregates of senior secured loans, senior unsecured loans, and subordinate corporate loans. The primary investment focus of the fund is on floating-rate CLOs within its defined target rating spectrum. However, it retains the flexibility to allocate up to 70% of its assets to CLOs rated BB+ or lower, and up to 10% to CLOs rated above BBB+. The investments can be characterized by various maturities and can be procured from both primary and secondary markets.

The investment strategy employed by the fund is a comprehensive bottom-up approach. This involves a meticulous review of documentation related to the issuer's management, individual CLO structures and collateral, as well as each issuer's ability to fulfill its financial obligations, cash flow stability, and trading frequency. As an actively managed Exchange-Traded Fund (ETF), RCLO has the capacity to modify its holdings and retain downgraded CLOs whenever it is in the best interest of the fund. Additionally, it may explore investment opportunities in other similar ETFs, further broadening its investment landscape.

Products and Services

• Collateralized Loan Obligations (CLOs)

  RCLO primarily invests in CLOs rated between BBB+ and B-. These financial instruments are structured securities that pool various senior loans to create tranches with different risk levels. The CLO structure allows investors to gain exposure to a diversified portfolio of loans, which can help in minimizing credit risk.

• Floating-Rate Investments

  The fund emphasizes investments in floating-rate CLOs. This feature allows investors to benefit from fluctuating interest rates, potentially increasing returns in a rising rate environment while minimizing the adverse effects of interest rate risk.

• Active Management

  RCLO is actively managed, which means the fund managers continually assess and select investments based on rigorous criteria, including issuer management quality and cash flow capability. This hands-on approach allows for flexibility in adjusting holdings based on market conditions or asset performance.

• Diversification Strategy

  The fund maintains a diversified portfolio by investing in CLOs across various ratings, including an allocation of up to 70% in lower-rated CLOs (BB+ or below) and up to 10% in CLOs rated above BBB+. This strategy aims to balance risk and return through a range of investment quality.

• Market Flexibility

  RCLO has the ability to purchase CLOs from both primary and secondary markets, allowing for a more comprehensive investment strategy. This flexibility means that the fund can act quickly on attractive opportunities as they arise, whether they are from newly issued securities or existing assets in the market.

• Investment in Similar ETFs

  To further enhance its investment strategy, RCLO may consider investing in other similar ETFs. This allows the fund to diversify its holdings and potentially access additional investment opportunities that align with its objectives of income and capital preservation.