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PGIM AAA CLO ETF offers stable income with 5.3% yield from AAA-rated CLOs, ideal for cautious investors.

Market News
28 May 2026
Seeking Alpha
View Source
Bullish
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The PGIM AAA CLO ETF (PAAA) provides a defensive investment option focused on capital preservation and income, yielding 5.3% from a portfolio of AAA-rated collateralized loan obligations (CLOs). It suits investors who prioritize stability and income over equity market growth, especially in uncertain or high interest rate environments. The fund's floating-rate payouts may decrease if interest rates fall, but credit risk remains low due to its exclusive AAA rating. PAAA is most tax-efficient when held in tax-advantaged accounts, as its distributions are taxed as ordinary income rather than qualified dividends.

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