First Leveraged CLO ETF to Test Retail Crowd’s Appetite for Risk

Reckoner Capital Management is testing investors’ hunger for a new category of risky bets with an exchange-traded fund that uses leverage to juice returns on collateralized loan obligations.

The Reckoner Leveraged AAA CLO ETF (ticker: RAAA) is the first such fund to invest in a variety of top-rated CLO bonds while leveraging up to 50% of that exposure, according to a statement.

The ETF arrives amid strong demand for collateralized loan obligations, which bundle buyout debt into bonds. Retail investors are also embracing leveraged investment strategies, once considered the province of investment professionals, like hedge funds and asset managers, that ...