CLOI - CLOI: Strong CLO ETF But Better Choices Out There
2024-04-20 04:52:33 ET
Summary
- CLO ETFs offer investors strong yields and performance.
- CLOI is a CLO ETF focusing on investment-grade tranches, but with a diversified portfolio.
- It yields 5.9%, somewhat less than expected, but returns have been a bit higher in the past, and quite strong overall.
The VanEck CLO ETF ( CLOI ) focuses on investment-grade CLO tranches, sports a good 5.9% dividend yield, and has outperformed most bonds and bond sub-asset classes since inception. Although there is nothing significantly wrong with the fund, the Janus Henderson AAA CLO ETF (NYSEARCA: JAAA ) is quite similar, and has a lower expense ratio of 0.20%, compared to 0.40% for CLOI. In my opinion, JAAA is stronger, cheaper choice, so I would not be investing in CLOI.
CLOs - Overview
A quick look at CLOs as an asset class before tackling the fund itself.
Senior secured loans are floating-rate loans from banks to medium-sized, riskier companies. These loans are senior to other debt and secured by company assets....
CLOI: Strong CLO ETF, But Better Choices Out There