PCMM: Turning Bearish On This Private Credit CLO Fund

Binary Tree Analytics5.63K FollowersFollow5ShareSavePlay(8min)CommentsSummaryBondBloxx Private Credit CLO ETF is rated 'Sell' due to an unfavorable macro environment and historically tight CLO spreads.PCMM’s focus on middle-market CLO tranches exposes it to floating rate risk and potential for larger drawdowns compared to broadly syndicated CLO ETFs.Lower Fed Funds rates are expected to directly reduce PCMM’s SEC yield, which currently stands at 6.15%.With spreads at multi-year lows, PCMM offers minimal upside beyond its dividend and faces significant downside if spreads widen or defaults rise.J Studios/DigitalVision via Getty Images Thesis We first started covering the BondBloxx Private Credit CLO ETF (PCMM) a year ago, shortly after the name came to market. We find CLO ETFs to be a great innovation, and we articulated thatThis article was written byBinary Tree Analytics5.63K FollowersFollowWith an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.