Since August 7, an ETF from Palmer Square Capital Management has been tradable on Xetra. We spoke with Jeremy Goff, Managing Director at Palmer Square Capital Management, about the listing on Xetra.

You recently had your products listed on Xetra. Why did you choose Xetra?

Xetra, and I would say Germany more broadly as a jurisdiction, was a natural choice as a primary listing venue for our first UCITS ETF, Palmer Square EUR CLO Senior Debt UCITS Index ETF (Ticker: PCL0). Given Xetra’s position as a market leading trading venue for ETFs in Europe and Germany’s broader position as a leading and innovative ETF marketplace within Europe, choosing Xetra as our primary listing venue was an easy decision.

What characterises your newly listed products? What distinguishes them from other ETF issuers?

Palmer Square EUR CLO Senior Debt UCITS Index ETF (Ticker: PCL0) is the first and only passively managed ETF focused on collateralized loan obligations (CLOs) with an objective of tracking the risk and return characteristics of the Palmer Square EUR CLO Senior Debt Index (ECLOSE). 

All of Palmer Square’s strategies are enabled by a robust team of investment professionals of which our senior leaders average over 20 years of credit investment experience across structured and corporate credit. I believe this product’s noted uniqueness combined with Palmer Square’s proven expertise and experience within structured credit markets as well as our position as a top global issuer of CLOs truly distinguishes this product, and Palmer Square as a manager, from others in the market. As a result, we think PCL0 will provide institutional investors with an effective tool to allocate to this asset class.

What major trends do you think will characterise the ETF landscape over the next few years?

One of the major trends we see, and one that ultimately led to the launch of this Palmer Square product in Europe, is the increased adoption of ETFs by institutional investors as a means to gain efficient and cost-effective market exposure to various asset classes. 

The CLO asset class has primarily been, until more recently, an exclusively institutional landscape, with the majority of institutional investors historically accessing these instruments directly via the primary and secondary market. The global market for CLOs has also grown substantially in size and liquidity and become quite active with an increasingly diversified buyer base. 

As institutional investors look toward ETFs to gain market exposure to an asset class like CLOs, we believe a passive solution like PCL0, that tracks the performance of the European CLO AAA and AA debt market via a globally recognized index like the Palmer Square EUR CLO Senior Debt Index, will be an allocation tool of choice for institutional investors looking to gain market exposure efficiently.
    
There is also a clear trend, that isn’t likely to abate any time soon, toward active management within ETFs. I think the opportunity and use case, outside of what was discussed with PCL0, is tremendous within credit. As investors of all types increasingly look to invest across the credit landscape and access diversified portfolios optimally allocated across the spectrum of assets available within corporate and structured credit, experience and expertise will matter. As we continue to grow the Palmer Square lineup of ETFs in Europe, we feel we are well-positioned to provide actively managed ETF solutions that provide this kind of multi-asset credit exposure for investors in Europe.