Panagram
CLOs Demystified: How Structured Credit ETFs Work
Danielle Gilbert is the co-founder and CEO of Panagram, a digital asset investment firm. Before launching Panagram, she spent about eight years at JP Morgan covering hedge funds and other alternative investment managers on the capital introductions desk, where she got a front-row seat to how institutional investors evaluate and allocate to new strategies. That experience shaped how she approaches building investment products in the crypto space, and the firm now manages the Panagram BBB Score ETF (BBBR) alongside other crypto-linked strategies.
On this episode, Danielle talks with Brad about how she went from traditional finance at JP Morgan to founding a crypto asset manager, the logic behind Panagram's blockchain scoring model, and what it takes to build a regulated crypto investment product that traditional financial advisors can actually use.
From JP Morgan's Capital Intro Desk to Crypto
Gilbert's path into crypto started at JP Morgan, where she spent years sitting between institutional allocators and hedge fund managers, learning what makes investors commit capital to new and unfamiliar strategies. She left JP Morgan and initially joined a blockchain startup before founding Panagram with her business partner. The firm launched during a period when institutional interest in crypto was growing but the infrastructure for regulated, advisor-friendly products barely existed. Panagram positioned itself to fill that gap by applying institutional rigor to digital asset investing.
What sets Gilbert apart from many crypto fund managers is her focus on the advisory channel. She's not trying to sell crypto to crypto-native traders. She's building products for RIAs and wealth managers who need a compliant, transparent vehicle they can allocate to within existing portfolio construction frameworks. That JP Morgan background shows up clearly in how she thinks about product design, client communication, and the importance of meeting advisors where they are rather than asking them to learn an entirely new investment vocabulary.
The BBB Score and How BBBR Works
The Panagram BBB Score ETF (BBBR) is built around a proprietary scoring model that evaluates blockchain networks based on fundamental metrics. Rather than simply buying Bitcoin or weighting by market cap, the model looks at factors like network activity, developer engagement, transaction volumes, and security characteristics to identify which blockchain ecosystems are genuinely growing and building real user adoption. The score is designed to cut through the noise and hype that dominates crypto markets and focus on protocols with tangible adoption curves and growing utility.
The fund doesn't hold crypto directly. Instead, it uses publicly traded equities and other instruments linked to blockchain ecosystems to gain exposure. This structure makes it accessible to advisors who can't or won't hold digital assets directly but want their clients to participate in blockchain ecosystem growth. Rebalancing happens on a systematic basis driven by changes in the underlying scores, and the portfolio typically holds a focused set of positions rather than trying to capture the entire crypto universe. Gilbert emphasizes that the scoring model is entirely quantitative, removing the emotional decision-making and FOMO-driven trading that plague most crypto investors.
Building Crypto Products for Traditional Advisors
One of the more interesting parts of the conversation centers on the challenge of selling crypto exposure to traditional wealth managers. Gilbert notes that most advisors understand they should have some allocation to digital assets but struggle with implementation. Many are constrained by compliance departments, platform restrictions, or simply a lack of technical knowledge about the space. Panagram's approach is to make the product look and feel as close to a traditional ETF as possible, with the same transparency, daily holdings disclosure, and institutional custody infrastructure that advisors expect from any other fund in their lineup.
Gilbert also talks about education as a core part of the sales process. Her team spends significant time explaining not just what BBBR does but why blockchain fundamentals matter and how they differ from simply speculating on token prices. She draws a parallel to the early days of any new asset class: the first movers who build the education layer and develop trust with the advisory community end up capturing a disproportionate share of assets when adoption accelerates. The firms doing the unglamorous work of advisor education today are planting seeds that will pay off as crypto allocations become standard practice across wealth management.
Key Takeaways
- Gilbert spent about eight years on JP Morgan's capital introductions desk covering hedge funds before founding Panagram, bringing institutional product design thinking to digital assets.
- BBBR uses a proprietary scoring model evaluating blockchain networks on fundamental metrics like network activity, developer engagement, and transaction volumes rather than simple market cap weighting.
- The fund uses publicly traded equities and blockchain-linked instruments rather than holding crypto directly, making it accessible to advisors with compliance restrictions on direct digital asset custody.
- Panagram's go-to-market strategy focuses heavily on advisor education, positioning BBBR as a fundamentals-driven alternative to speculative crypto exposure.
- Gilbert views the advisory channel as the key growth vector for crypto products, noting that most RIAs recognize the need for digital asset exposure but lack compliant, transparent vehicles to implement it.
Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.
Full Transcript
5,878 wordsMachine transcribed from Brad Roth's conversation with Panagram, with speakers identified automatically. Timestamps link to that moment on YouTube. Lightly cleaned, otherwise unedited.
Welcome to Behind the Ticker. I'm Brad Roth, Chief Investment Officer of Thor Financial Technologies and Portfolio Manager of THLV, the Thor Low Volatility ETF. Behind the Ticker uncovers the inner workings of the ETF industry. We will interview portfolio managers and ETF service providers to dive deep into their work lives and their businesses. We will learn the inner workings of their strategies and what drives them as they continue to grow their company. Many of these individuals are entrepreneurs and will have unique and compelling insights to share as much goes on behind the ticker. Please note, nothing in this show is investment advice and it is meant solely for educational and entertainment purposes only.
Welcome to Behind the Ticker. Today we have on Danielle Gilbert. She is from Panagram and we are talking structured credit and collateralized loan obligations, better known as CLOs. They recently launched two ETFs, CLOZ and CLOX, one investing in B's, the triple B's, the other investing in the triple A tranche. She does a wonderful job educating me as well as all of you as to what structured credit is and specifically what CLOs are and how they can be a great complement to traditional fixed income inside a diversified model portfolio. So without further ado, please welcome Danielle Gilbert. Hey Danielle, welcome to the show.
Great to see you, Brad. I'm so happy to be here today. So before we get started, always like to know what's your background and how did you eventually get into your role here at Panagram? Am I saying that correctly?
You are. Yes. Okay. So a little bit of background on me. I grew up in the Midwest, suburbs of Chicago, studied engineering. I was always a math and science type of person and I loved New York City. I found myself, arrived in New York City in the early 2000s and had an opportunity to join a training program at UBS. Now UBS at the time, this is pre-global financial crisis in the early 2000s, they had a massive trading floor and I don't know if you're even aware of this trading floor. It was in Connecticut, two football field size, very exciting time to be starting a sales and trading career.
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And in that program, I actually ended up specializing in structure credit, which at the time was very niche. And I picked it because I was actually scared that everything else would soon become automated. Remember, I came from more of an engineering background. So I said, I'm going to pick something really complex that there's still going to be a need for human interaction. But it was actually well-timed because that market has grown to what it is today, which is very institutional. Um, but I had a front seat to that growth. So my role was as a salesperson covering portfolio managers, sophisticated portfolio managers that had pools of capital that they were allocating to structured credit. So I was in pre-GFC, during the GFC, post, a long career in that type of opportunity of
Of settling and covering those types of sophisticated clients. Now it was in that role that I met the Panagram team. So they were working at Eldridge investing capital on behalf of Eldridge and the affiliated balance sheet. They were one of the largest players, um, actually in the CLO investing market and continue to be today. And I was covering them as a client and they came to me and they said, we're launching a new, we're spinning out of Eldridge and we're launching a new platform called Panagram. We have size and scale, but we're, we're going to introduce ourselves to third-party investors. So this was interesting because this was a pretty big, big pivot. And I had been, I've actually been approached in the past to do this type of opportunity, but it wasn't until this team
Actually came to me that I thought it was attractive because first of all, the people, I think you always have to lead with people. They had a great reputation in the market. I enjoyed covering them from like the client perspective. They also had an advantage because they were one of the larger players. And I thought this is going to be an interesting way to launch a new asset manager. We're not launching from scratch. We actually have, um, expertise and we're in this market every day. We're just new to the outside world. So I, I jumped on the opportunity and, and started when we pretty much launched in 2021 to the outside world in the fall of 2021. So it's almost three years ago to lead up business development and kind of solve that.
How do we grow from there?
No, that's great. Um, before we get into more about kind of what Panagram does, I always have to ask any hobbies. What do you like to do when you're not working?
Okay. So I did a little bit of prep and I listened to your podcast before, and I laughed when this question came up because I was like, Oh my gosh, how am I going to answer this one? So I have three children and, uh, I live in New York city and I obviously have this big job that's demanding, but I do have a life outside of work. It just happens to revolve around my, my kids. So, um, and my family, which I love, um, they, their age ranges are 14 soon to be 10 and just turned eight. it's very important when they're that little to kind of quantify it that way. But I would say in the winter time, you'll find me at the bottom of the ski mountain because all of my kids are ski racers and growing
Up in the Midwest where it's very flat, I had to learn how to ski. So I did that a couple of years ago and I'm still kind of hanging with my kids. It certainly will not be at their level maybe anytime soon or ever, but that's okay. And then, um, I do other random things like because we live in the city and my kids go to school in the city, I can pop back and forth. Like a couple of weeks ago, I signed up, um, to be a guest of my daughter's second grade class. And it was funny because you were supposed to talk about what you do for work. And I was Googling and using AI to try and figure out, well, what would be fun to describe to kids finance or finance investing? And there
Were all these different ideas and some were great. Some were really boring. And I, I tossed them all. And I said, I'm going to teach these kids how to make balloon animals because that's fun. Yeah. And the whole point was you can learn anything, even complex things you can teach yourself it's available. And, um, it was actually a big hit. My daughter was proud that I didn't talk about finance and that I taught them how to make a dog out of balloons. Excuse me. So that's a little
Bit of what I do outside of work. So it's, it's funny, my seven-year-old daughter, so she's going into second grade. And even though like, yeah, I do all the sales and trading, we run a billion to an asset. She's like, my dad's on Spotify. It's really, he's kind of, it's really cool. He's on, I'm like that, that's fine. Just tell everybody I'm on Spotify. That's great. Tell everybody you're on Spotify. It's all good. It's funny. Um, anyways, let's get back to, uh, to Panagram. So can you kind of walk through how you guys are helping clients? I know you do a number of things. We're going to talk about the ETFs you have.
Yeah, sure. If you talk about the firm as a whole. Absolutely. So Panagram is a specialized structured credit asset manager. They manage about 17 billion in assets, 16.8 rounding up. Um, and more than half of that is in CLO related investments. We're big investors in CLO bonds and CLO equity. We're not a CLO manager. That's very important distinction. We actually specialize in investing in the management of CLO. So that the, so the structure and the team, the investment team has been working together since 2014. They first started when Eldridge was being formed, managing the assets for Eldridge and the affiliates. Now, one of the larger affiliates that Eldridge owns is an insurance company that requires book yield, healthy book yield, prudent book yield.
And, um, that asset balance, that asset was growing and the team that while they were sitting with Eldridge, they kept deploying the capital to ensure that they had that stable book yield. Then in 2021, with the demand from outside investors, the team spun out to launch Panagram. And that was really to add other investors to, to the access point that they were already providing for Eldridge. So today, what we do on the institutional side is we do specialized SMAs. So we have banks that want to access AAA CLOs, which is a great asset for banks. We have customized SMAs with banks. We have customized SMAs where people want exposure to other structure credit in addition to CLOs. But what we're going to talk about today, which I'm excited about was we,
We launched our first suite of wealth products in 2023. And we saw this as an opportunity to bring access to everyone in the form of the ETF. So in January, 2023, we launched our first CLO, CLO-Z. And then in the second half of last year, we launched our second CLO ETF, CLO-X, which I know we're talking about today. But this was something that we thought we're already in this market every day. We're active. And this is a way to kind of expand into a wrapper that provides more broader access.
Sure. And let's, let's take this moment to kind of do a little bit of education because, we talked, I talked to a ton of RIAs and not a lot of them are utilizing, structured credit in their practice. So can you just explain what structured credit is and how it differs from traditional fixed income investing?
Yeah, sure. And that's a common question that comes out. I think the name actually sounds more complicated than it really is. When you think about structured credit, it's a way to access a diversified pool of contractual cash flows. So think of anything that you can put together that has a contractual cash flow that could be mortgages, it could be credit cards, it could be corporate loans, which is what we're going to talk about today with CLOs. But these products were really started probably like in the 1970s, I think is when the first mortgage backed security was created. And then it was credit cards and evolved over time. CLOs were created in the 1990s. But at the end of the day is it's taking a pool of contractual cash flows, and then creating different risk profiles
For investors to invest in those products. And it's a growing asset class and institutional clients love the ability to have that customized exposure. And the companies love it because it's another
Way for them to fund their businesses. So a CLO or collateralized loan obligation is a one facet of what would be structured credit. Is that correct? That's right. It's just another it's a category of
Structured credit. And I think it's important. If I talk about CLOs right now is the way that I like to explain a CLO is to first kind of start with what it isn't. So remember, structural credit is contractual cash flows. But you want really good quality cash flows. And there's three common misconceptions when somebody will ask, like, what is a CLO? And the first thing that they go to, and I'm saying this in truth and honesty, is the big short. They either have seen the movie, or they read the book, or they lived in the global financial crisis. But they just assume, isn't that the product that like blew up everything 2008? And the Jenga blocks. Yes, exactly. And exactly the Jenga box. And although the structure seems
Similar, when I when I'm going to explain it, it's very different because of the collateral. That was subprime collateral. It was consumer risk, just consumers that weren't going to pay. Remember, their contractual cash flows, if the contract isn't good at the cash flow component, it doesn't matter how you slice and dice it, it's not going to end very well. It's a bad movie, right? It's a sad ending for all those investors. CLOs actually performed well during the global financial crisis. But then the other two misconceptions that people make as it relates to CLOs is they see the yield, or the credit spread, and they say, Oh, it must be risky. Like, if you're getting that much, like, there's got to be a ton of risk. And if you look at the historical
History of the defaults, and you see how resilient CLOs have been since the early since when they came, they early launched in the 90s through the global financial crisis, but through other crises as well. And I think the third misconception, but this is really more new as it relates to this, the ETF wrapper is people assume they're illiquid. And in fact, that's also not true. And that's been defended through a lot of volatility, even in the recent years. But I guess I should probably explain what a CLO actually is now that I've gotten to what it isn't. So a CLO collateralized loan obligation. Let's start with the L, the loan. The loans are senior secured loans. These are loans to corporations, big multinational US companies, small pieces. I'll give you some examples.
American Airlines, restoration hardware, Formula One, names that you're going to be familiar with. The reason why they're called senior secured is they sit at the top of a corporate capital balance sheet. So you have unsecured debt and maybe equity beneath you. But the secured definition is very important because when there's a default, you're obligated the assets backing that pool. So the corporate assets, you have a claim on the corporate assets. So what does that mean? Well, first of all, the default rates are actually quite low for senior secured loans. But even when they do default, historical recoveries are quite high. You're not getting completely wiped out. You're actually recovering anywhere from 60 to 70 cents in the dollar on like the long-term history. In high yield, just to compare that, it's probably going to be
Somewhere in the 40s, 40-ish, 40s to 50-ish range. Of course, there's tails, but I'm just giving you like an average, a long-term average is kind of in that range because you have a claim on assets. So you're taking this pool of loans that I explained, little pieces, 150 to 300, and that's your asset pool that's going to feed into what becomes a CLO. Does this make sense so far?
Makes 100% sense. You're doing great.
We're not even at the C and the L right now. So I want you to envision this pool. And what's the pool doing, right? Those companies are making their payments, they're making their interest payments, and eventually they're going to pay back their principles. So think about these cash flows, right? Those cash flows then feed into what becomes of the CLO structure. The CLO structure is tranched out into AAA, AA, single A, BBB, BBB, and equity. Those are the bonds, the CLO bonds. The AAA receives the cash flows first. They get first priority. They also have the biggest buffer underneath them from any kind of losses. Double Bs are going to be your highest risk adjusted return because they're the first, after having that equity cushion, this is important to describe, there's eight to 10 points of cushion.
They're the first to kind of, that would impair any kind of loss in the credit structure. But remember each loan is supported by, has an LTV of probably like 50-ish. So there's points of equity cushion under each loan. Then you're putting those cash flows here. And then the debt structure still has a cushion at the equity level. Important too, floating rate loans, floating rate bonds. So a CLO AAA would be like three months SOFR plus 100 to 150 range. A BBB is going to be three months SOFR plus 500 to 600 range. So if I'm a bond investor and I'm just doing direct CLO investing, I can invest in which institutions do all day long. I can choose where I want to be along that spectrum of investments.
And the equity actually performs quite well too, because remember the bonds are just, are funding that asset pool, but there's excess that's just feeds into the equity and CLOs aren't created unless there's a prediction that there's going to be more assets flowing at that pool to that equity, which is typically structured as eight to 10 points. Does that make sense?
Well, Danielle, you did a great job of making something very confusing and putting it all together. So thank you for that. That'll be very helpful as kind of the end for the rest of this conversation. So let's get into why we're here. We've got two ETFs that you recently issued. We have CLOZ, which is your triple Bs. And we have CLOX, what's your triple Bs to B. And then CLOX is your triple A's. So let's talk about both. Let's talk about CLOZ first. So at a high level, right? What
Is this fund trying to accomplish? Okay. Well, remember at the end of the day, what are CLOs giving you? They're giving you exposure to loans. Okay. The CLOZ is giving you exposure to loans that are wrapped in CLO, triple B and double Bs. This is the highest risk adjusted portion of the CLO when I described that CLO capital structure. And it's really going to give you income. Like right now, we're distributing income monthly and the SEC 30-day yield, which again, can change, of course, is around nine and a quarter percent. But that income is again, distributed monthly. It's really helpful in any portfolio. What we're trying to do is invest in diverse, high quality CLO bonds. The CLO bonds, those pool of loans, and this is important. I should have described this
When I was describing what a CLO, they're actively managed pools. They're not static pools. And there's a CLO manager that's actively managing that risk. CLO, triple Bs and double Bs, we want to make sure that we're aligned with the highest quality manager. Remember, we're in the market every day. And this market is not automated. It's still OTC. So it's really important to actually be a player and get that access. And we do that every day in this portfolio. But at the end of the day, what is an investor getting? They're getting income. And it's distributed monthly. So anybody needs that income, but without taking duration risk, right? So that's an important component. A lot of people are in their fixed income portfolio are taking duration risk today.
And this is a way to get floating rate exposure, capture the front end of the curve, plus a credit
Spread. So you touched on this kind of briefly in that response. So how are your investment managers screening for kind of the right opportunities to include in this portfolio? I'm assuming there's some preference as to which CLOs are maybe better investments than others?
Oh, absolutely. So the CLO market's over 1 trillion, and there's over probably 125 CLO managers. But you don't see 125 CLO managers in our fund. And that's very intentional. We want to align with the managers that have the best teams and are best equipped with managing the loans in the portfolio. We also want to align, this is important, there's a liquidity component. So I would say there's three different tiers. And this is how the market talks about it. And from my sales and trading side, I would bear witness to it. There's tier ones, there's tier two, and there's tier three. And the managers get clumped into all of those categories. And the statistics, like what's great about the CLO market is you get the data every month. So you can see how everybody's performing. And then another
Data point is whenever a new deal is created, you can see how tight those credit spreads were for those CLO managers. But we are going to shy away from a tier two or a tier three. And the reason why is not only from like the managing of the collateral, but also the way that they're actually marked, or the value, like if I need to sell that bond, the bid-ask spread is actually can become quite wide. If you're aligning with a lower tier, it actually impacts the liquidity and being able to get out of that position. And we don't want to be in that situation. Like any day of the week, I'd rather have a tier one double B, than a tier three triple B. It's not worth the risk to be aligned with with a manager that can't manage the
Portfolio well, but also where you're going to be impacted on the liquidity side and add volatility
To the portfolio. So are your internal PMs like actively trading in and out of the CLOs to try to drive alpha opportunities? Or are you just kind of holding and maintaining and letting the tier one
Managers kind of manage that risk? Well, remember there's two active components happening here. There is the active component of the loan collateral. So that's being tended to by the manager, but then there's the active component of us managing the CLO risk. And we absolutely will opportunistically always try and find, create the most high quality upper tier portfolio. However, to your point, if we see a bond that we've invested in, and we, and we're capturing healthy yield and we're, and we're monitoring the metrics of how that bond is performing in our portfolio, the loan metrics, and we're happy with it. We're not just going to turn it over just for the sake of turning it over.
So I would say it's a combination of both, but part of the active management component is we have the ability to constantly be taking in that data, evaluating our managers and seeing how they perform and being able to pivot when we, when we find it necessary. But what's great is the CLO is set up with a lot of rules and the managers can't really go outside the box too much. This is important. So one thing that I, that I would like to talk about, and it's not a question that you're asking, but I want to make sure that we cover it today is people might say, well, I already own loan exposure. Like I have it maybe in a loan ETF or I have it in a loan mutual fund. Like why do I need to do,
Put something in a C blank O and have this active management? And what's interesting is the institutions love the CLOs because they've actually performed better than having that direct exposure because there's a lot of guardrails around what the manager can actually do. They can't go over certain industry concentration limits. They can't go heavy on a single name. They are limited on the triple C exposure that they can do. So that active management has a lot of rules around it, but when it works, it's beautiful. And I think that that's an important thing to understand. And you've seen that with the outperformance of CLOs too.
So I know, um, the yield can kind of be a moving target, so I'm not going to hold you to anything, but as you're kicking out kind of monthly income distributions, CLOZ, where is that kind of like approximate yield coming in on an annual basis? Oh, well, okay. So where it's a yield coming from,
You have three months over plus a credit spread, right? So how do I, how do I get to that yield today? Well, three months over is high. It's elevated and it's closely tied to Fed fund rates. It's at 5.3. Now, obviously we're, we've been in this higher for longer and there's this expectation that of course the Fed will be, will, and at some point start reducing rates, but you're not taking duration risk here. You have the benefit of kind of capturing that front end. And then the credit spread is really the spread duration component that can change. So just generically the spread on the triple B's could be around 300 today. And for double B's five to 600, that's the component that we get to actively manage. Obviously I can't control what the Fed is doing, but I'm also, you're not going to
Get offsides here. You're just going to, the distribution would come down as rates come down. What we're trying to do is protect that credit spread component, but that's where the yield is derived from today. If you want to kind of break those two pieces out.
Sure. So if, if I'm in kind of a advisor, have a model portfolio, what are the benefits of holding a CLO exposure over say like traditional fixed income investments that they might have in there or traditional fixed income ETFs? Yeah. Well, I think traditional fixed
Income investments obviously can serve a purpose in a portfolio. However, I do think that investors have been looking for alternatives. You saw at the end of 2022, a lot of people were burned because of the increased correlation between traditional equities and traditional fixed income products. even equities, there's something on my desk today. I just printed this out. I'm just showing it to you. It's a Bloomberg article. I'm going to quote it, but this is, we keep hearing about the mag center seven, but I thought this was just a really interesting stat. So the 10 largest stocks in the index by market capitalization, which is mostly obviously the tech giants have posted a median gain of 17%, while the rest have lost 1.3%. So on the equity side, you're already pretty heavily
Indexed to a few names, but then on the fixed income side, I think what's happening just to relate it back to that is you're heavily indexed to duration risk. Most of the 40% is fixed rate. And I think a lot of people have been getting off sides for, for not only because of the increased correlation, because they've been taking on, look at, we saw the regional banks. That was really what took the regional banks down. They would actually have benefited from owning CLO AAAs in their portfolio, but most of them didn't. And it's unfortunate because, again, you're not taking, you're taking spread duration, but you're not taking interest rate duration.
So sorry to go off on a little bit of a tangent here. Daniel, thanks for reminding me of that. As someone who runs equal weight portfolio, sector exposure portfolios, I love continuing to see that stat. I need the rest of the market to participate for, please.
There's other things to look at. So, okay. Why CLOs now? Three reasons. One, you're getting more yield for the risk. So just generically, traditional fixed income is going to be somewhere in the four to 5% range, where CLO ETFs are probably going to be somewhere in the six to 9% range, right? So I'm capturing more yield, but they're more that yield has a better historical track record. We haven't talked about this yet. Since 2010 post GFC, there have been zero defaults in AAA, AA, single A, BBB CLOs. The cumulative default rate for CLO BBs is 47 basis points. If you put a corporate credit equivalent cumulative default, we've done this like the 13 year cumulative default comparison between that number. It's around 15%. Because again, you have the structure that's wrapping the loan exposure and
Giving you structural protection. So let's pivot. Let's talk about CLO X, same concept, different tranche. So we know at a high level what it's doing. I'm just going to, I'm just going to ask, is the demand for holding AAA more of a risk-based decision when you're looking at this is, because it's, it's basically the same product or you can with a different tranche. You can correct me if I'm wrong, but what's kind of the decision for someone holding CLO X over CLO Z?
Is it again, just a risk decision? It could be a third component. We talked about yield and resilience, but third is that it's just less correlated. And that's both triple B, double B risk and the triple A risk. We've seen, listen, I've seen it allocated in a lot of different ways. So I've seen investors use CLO Z as a high yield replacement. So that could be either high yield, traditional high yield, or they're replacing their loan exposure and getting exposed to it in triple B, double B. But I've also seen investors do a barbell approach where they maybe have 50% exposure to CLO Z and 50% exposure to CLO X. And they're putting that into like an income portfolio. And they set that as their baseline and then they adjust it as they see fit based on their views on where credit risk is.
And then I've seen investors that are more conservative that really want a hundred percent exposure to just pure play CLO triple A's. Now, I don't know if you're familiar with this stat, but there are 10 CLO ETFs in the market today. The first one was created in October of 2020. So we're talking about post COVID really. And the aggregate AUM is 12 is over 12 billion. I think it's almost 13 billion today. So there's been a lot of asset flows into this product. Most of that, it has been in the more conservative end of the spectrum, the triple A. But I think what's great about what we're doing, we're in this market every day, and we're giving investors choice. So you can choose to have 100% of your exposure to pure play triple A, or 100% of your exposure to triple B, double
B, or you can kind of toggle between the two. But at the end of the day, it's important that, we're giving the investors choice. And they haven't had that like this product, the CLO product is over 1 trillion, and it's mostly institutionally held. And they've had a choice to figure out where they want to be across the spectrum. But now what we're doing is we're giving the individual investor choice in the ETF wrapper of how much how they want to gain that exposure.
Yeah, so I was, I was going to ask kind of how advisors are using these products, you kind of answered it there. I'm going to ask a different question, since you're head of business development over over there. And is that correct? Yep. So these are new, newer products, right? Yeah, it's not the ETF world is not if you build it, they will come. So how are you thinking about distribution? How are you thinking about starting to get these kind of worked into advisor portfolios
Kind of across the universe? Well, I love that you answered that asked me that question, because it's something I think about every day. But I would say that we really and I think this was very intentional when the investment team brought somebody like with my background on to lead a business development. It wasn't a traditional business development hire. But it was because we lead with education, we have to. And maybe I failed on my way that I explained CLO today. But we have to teach about the product, make awareness of it. And I think that there's a component of scary when you hear what a CLO is, and really like demystifying that, that notion. Because the product has has performed very well and been quite resilient for the institutional, but the individual investor
Doesn't know about it. So I would say number one, we're leading with education. Anytime we have an opportunity, whether it's myself, John Kim, our CEO to get on a podcast, to be part of a webinar, we're the first to sign up. We love we love partnering with people like you, Brad and doing that. The second is we're out there having our own educational seminars or one on one discussions with advisors and really in the model portfolio teams and the wire houses. And really, again, when I go in, I'm not pitching panogram, I'm pitching what a CLO is first. I think it's important to like do it in that aspect, because people then gravitate, they want to be educated, they want to get the latest data, they want to understand, because nobody's going to recommend this to a client if they
Don't have an understanding. And then the third thing is really just kind of everybody here, although I, my role is business development, we're all business development. And that's the culture, like we're all advocates for not only the firm and the culture, but also the brand. And I think it's important because, like I had described, when I was on the other side on the sales side, this team has a really good reputation within structured credit. But it's really creating awareness outside of, of the, the tight world of structured credit, and making sure that then people are aware of what we're doing here. So I would say those are
The three things that we're doing. Well, Danielle, I really appreciate you spending some time with me before I let you go, where can people learn more about you, panogram and your two ETFs?
Well, we have websites, of course, for each of the fund websites. It's clozfund.com and cloxfund.com. Those are updated daily. And then panogram has its own generic website. But I would welcome anybody reaching out to me. Obviously, this is a fun topic. And as I've been stressed enough, I love educating and talking about it. Or I can teach you about balloon animals. We can do our next webinar where I'll teach you guys all about balloon animals. But thanks for having me, Brad. I really enjoyed it today. And we'll be in touch. All right. Thanks, Danielle.
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