European financial hub Palmer Square unveils the continent's inaugural Passive Collateralized Loan Obligation Exchange-Traded Fund
The financial landscape in Europe has been transformed with the launch of the Palmer Square EUR CLO Senior Debt Index UCITS ETF (PCL0) on August 7, 2025. This groundbreaking ETF, the first passive euro-denominated CLO ETF for institutional investors in Europe, provides a unique opportunity for European investors to gain exposure to high-quality, predominantly senior CLO debt in a liquid and transparent exchange-traded format.
The Palmer Square EUR CLO Senior Debt Index UCITS ETF is managed passively and invests in a diversified portfolio of European floating rate CLOs denominated in euros. At least 80% of the fund's net assets are invested in AAA-rated CLOs, while up to 20% may be allocated to CLOs rated below AAA but still within investment grade, such as AA-rated debt.
This structure offers European institutional investors high-quality, predominantly senior CLO debt exposure with a focus on credit resilience and liquidity in European markets. The ETF is available for trading on Xetra and Börse Frankfurt and is available in multiple trading currencies including EUR, USD, GBP, and CHF.
The ETF tracks the firm's proprietary EUR CLO Senior Debt Index (ECLOSE), a research-driven benchmark launched in 2024. The ECLOSE index, described as a transparent, rules-based benchmark, has performance data going back to 2018. J.P. Morgan serves as administrator, registrar, and depository for Palmer Square Ucits ICAV, the entity that manages the ETF.
Chris Long, founder and CEO of Palmer Square, stated that the ETF is the first in a series of European Palmer Square ETFs. The series will provide high-quality exposure to cycle-resilient senior CLO debt, offering institutional investors an innovative and unique tool for accessing and allocating capital to the European CLO market.
Angie Long, chief investment officer and portfolio manager at Palmer Square, stated that the launch of the ETF aligns with their philosophy of applying global credit expertise to innovative solutions. Taylor Moore, managing director and portfolio manager, added that the ETFs are designed to simplify portfolio construction and facilitate efficient allocation to the universe of AAA and AA European CLO debt.
The launch of the Eclose index and the subsequent ETF is seen as the start of a CLO wave, potentially revolutionising the European debt market. The Palmer Square EUR CLO Senior Debt Index UCITS ETF is now trading on German exchange Xetra, offering European institutional investors an unparalleled opportunity to invest in the European CLO market.
References:
- Palmer Square Capital Management Press Release
- Financial Times Article
- InvestmentEurope Article
- ETF Strategy Article
Institutional investors in Europe can now gain access to high-quality, senior CLO debt through the Palmer Square EUR CLO Senior Debt Index UCITS ETF, a passive ETF managed by Palmer Square Capital Management. This groundbreaking ETF, launched in August 2025, invests in a diversified portfolio of European CLOs primarily denominated in euros, and is tracked by the firm's proprietary EUR CLO Senior Debt Index (ECLOSE). The ETF, which is available for trading on Xetra and Börse Frankfurt, is seen as a potential game-changer in the European debt market, as it offers an innovative and unique tool for institutional investors to access and allocate capital to the European CLO market.
