(Bloomberg) — Palmer Sq. Capital Administration is launching a pair of exchange-traded funds that may purchase collateralized mortgage obligations and different property, including to a latest proliferation of such financing autos as investor entry to securitized credit score markets expands.
The ETFs would be the first by the credit-focused various asset supervisor, in keeping with a press release by the agency seen by Bloomberg. Along with investing in credit score markets, Palmer Sq. is a frequent issuer of CLOs and is thought for offering broadly tracked indexes of CLO debt.
The Kansas Metropolis-based agency created the ETFs in response to demand from shoppers, specifically the wealth administration neighborhood, founder Chris Lengthy mentioned in an interview.
“We’ve got loads of shoppers that are not certified traders and might’t purchase personal funds,” Lengthy mentioned. “For them the ETF wrapper is a handy technique to get publicity to those property for which there’s ample demand.”
Till not too long ago CLOs had been accessible solely to massive and complex traders, however over the past two years ETFs that observe the sector have seen an inflow of investor {dollars}. Greater than a dozen ETFs now give attention to the house, together with ones supplied by Janus Henderson and Panagram.
One of many two ETFs Palmer Sq. is launching, referred to as PSQA, will present passive publicity to CLO debt rated AAA and AA by monitoring Palmer Sq.’s CLO Senior Debt Index.
A second ETF, referred to as PSQO, will give attention to relative worth throughout company and structured credit score, together with CLOs, funding grade and excessive yield company bonds, ABS and financial institution loans.
(Corrects third paragraph to say Lengthy is the founder)
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