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M* added six new funds to the Morningstar Prospects List. Parnassus Core Select ETF (PRCS) and Hood River New Opportunities (HRNOX) may be worthy of further investigation. PGIM AAA CLO ETF (PAAA) was also mentioned. PGIM is a good bond firm but I don't know if the current environment is conducive to good CLO performance.
Now that we've had a small opportunity to see how it performed in a more challenging environment (early April 2025), Seeking Alpha has posted a longer piece on PAAA. It includes this graph showing its relative safety (vis a via JAAA).
One can zoom out a little and compare PAAA, JAAA, and FLRN against FFRHX over PAAA's short (two year) lifetime. Here's the Portfolio Visualizer comparison.
All three of those funds hold up much better than bank loan funds; at least they did in spring 2025. PAAA and FLRN held value (on a monthly basis) while JAAA lost a little, and FLRN dipped more significantly. On a daily basis (from M* charts), the max drawdowns from April 2, 2025 were: PAAA -1.04%; FLRN -1.43%; JAAA -1.46%; FFRHX -2.52%.
One short month doesn't prove anything, but it's the best data we've got on PAAA and it offers a small measure of reassurance.
Comments
Last year I posted a line about how PAAA should be the safest of the AAA CLO funds.
https://mutualfundobserver.com/discuss/discussion/comment/183769/#Comment_183769
Now that we've had a small opportunity to see how it performed in a more challenging environment (early April 2025), Seeking Alpha has posted a longer piece on PAAA. It includes this graph showing its relative safety (vis a via JAAA).
https://seekingalpha.com/article/4789069-paaa-among-the-safest-aaa-clo-etf
One can zoom out a little and compare PAAA, JAAA, and FLRN against FFRHX over PAAA's short (two year) lifetime. Here's the Portfolio Visualizer comparison.
All three of those funds hold up much better than bank loan funds; at least they did in spring 2025. PAAA and FLRN held value (on a monthly basis) while JAAA lost a little, and FLRN dipped more significantly. On a daily basis (from M* charts), the max drawdowns from April 2, 2025 were: PAAA -1.04%; FLRN -1.43%; JAAA -1.46%; FFRHX -2.52%.
One short month doesn't prove anything, but it's the best data we've got on PAAA and it offers a small measure of reassurance.