BondBloxx COO on Private Credit CLO ETF (PCMM)

The video discusses the innovation of private credit ETFs, focusing on CLOs that hold loans from middle market companies. These companies are significant economic drivers but lack access to public capital markets. The video explains how liquidity is achieved through CLO structures, with Apollo providing a liquidity backstop. It highlights the importance of diversification and skilled management in mitigating risks. The CLO industry is noted for its stability and low volatility, having performed well during economic downturns.

What makes private credit ETFs different from existing market products?

• They do not provide access to private credit.

• They are more volatile than traditional ETFs.

• They are structured through a CLO.

• They focus on large public companies.

Why are middle market companies significant to the economy?

• They are major drivers of economic growth.

• They have easy access to public markets.

• They employ a small number of people.

• They generate minimal revenue.

How do private credit ETFs make illiquid assets liquid?

• By selling them to public companies.

• By securitizing them through a CLO.

• By avoiding middle market companies.

• By holding them indefinitely.

What is a key benefit of investing in CLOs?

• They are not managed actively.

• They provide diversification benefits.

• They are highly volatile.

• They offer no diversification.

How has the CLO industry performed historically?

• It is less than 10 years old.

• It has shown low volatility and no defaults.

• It has experienced frequent defaults.

• It has been highly volatile.