The Case for RCLO’s High-Conviction CLO Portfolio

Both funds are actively managed and target the same BBB to B-rated tranches within the CLO market. However, a closer look at their portfolio composition reveals a stark divergence. The holdings data provides clear evidence that RCLO follows a high-conviction mandate versus BCLO’s diversified focus.

BCLO maintains a diversified portfolio of 50 distinct holdings. While diversification is often viewed as a safety net, the strategy can also dilute the impact of top-tier manager selection.

Based on VettaFi holdings data, BCLO carries an effective holdings rate of 0.78. This indicates that, while it has greater diversification with more than double the holdings of RCLO, its performance is attributed to 39 of its positions (effective number of holdings). This suggests that BCLO is effectively capturing the broader performance of the BBB-B CLO tranche market rather than making aggressive bets on specific high-alpha tranches.

Comparatively, RCLO operates with a high-conviction, actively managed mandate that prioritizes selectivity rather than sheer volume. The fund holds 23 distinct positions, representing a lean portfolio that allows the fund managers to express their strongest market views.

This concentrated strategy in RCLO offers two major benefits:

• Meaningful allocation: Reckoner Capital managers can make substantial investments in specific CLO managers and tranches they believe are best positioned for yield potential and capital preservation in the current macro environment. RCLO’s top 10 holdings, which command 50.54% of the fund, is evidence of this. Conversely, BCLO’s top 10 represent only 36.83% of its portfolio.
• Active manager selection strength: RCLO’s actively managed approach allows for extreme selectivity. The fund managers can allocate to tranches that offer the most compelling yield per unit of risk. While BCLO’s 50-holding basket casts a wider net for exposure, RCLO’s 23-holding portfolio is carefully curated to optimize capital preservation and yield.

As credit markets face uncertainty in 2026, the high-conviction selection inherent in RCLO’s approach offers a significant tactical advantage. For investors seeking focused exposure to a CLO market that carries its own unique set of risks and complexities, RCLO is a compelling option that emphasizes pure active conviction as opposed to broad-market diversification.

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Important Information

Carefully consider the fund’s objectives, risks, charges, and expenses before investing. The prospectus at each of the links above provides the full details. Read it carefully before investing. Investing involves risk including the risk of principal loss.

The fund’s principal investment risks include management risk, collateralized loan obligation risk, non-diversified fund risk, new fund risk, leverage risk, and liquidity risk. For additional information about these and other fund risks, please refer to the “Principal Investment Risks” section of each prospectus.

ETFs may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market prices (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Comparison chart(s) are provided for illustrative purposes only. Other ETFs shown are included solely for general market context and discussion purposes. Comparative statistics does not suggest, and should not be construed as implying, that past results of any unrelated fund are indicative of any future performance.

Past performance is no guarantee of future results.

Collateralized Loan Obligations (“CLOs”) are structured products that issue different tranches, with varying degrees of risk, which are backed by an underlying portfolio consisting primarily of below investment grade corporate loans. Investments in CLOs presents risks similar to those of other credit investments, including interest rate risk, credit risk, liquidity risk, prepayment risk, and the risk of defaults of the underlying assets.

Distributor: Quasar Distributors, LLC.

RCLO is an actively managed ETF that launched on October 22, 2025, and distributes income monthly. It seeks to generate current income, with a secondary objective of capital preservation. It pursues this objective by investing, under normal circumstances, at least 80% of its net assets in debt tranches of collateralized loan obligations of any maturity or duration that are rated, at the time of purchase, between and including BBB+ and B- or equivalent by an NRSRO. RCLO charges a management fee of 0.50%.

BCLO is an actively managed ETF that launched on January 29, 2025, and distributes income monthly. It seeks to provide capital preservation and current income. It pursues this objective by investing, under normal circumstances, at least 80% of its net assets, plus the amount of borrowings for investment purposes, in CLOs that are, at the time of purchase, rated from BBB+ to B- (or equivalent) by at least one of the major rating agencies or, if unrated, determined by the Fund management team to be of similar quality, and derivatives that provide investment exposure to such securities or to one or more market risk factors associated with such securities. BCLO charges a management fee of 0.45%.

Standardized Performance as of 3/31/2026