2024-02-26 00:16:50 ET
Summary
- Launched in 2023, the BlackRock AAA CLO ETF has seen slow investor adoption compared to its competitor JAAA.
- Both offer similar 1-year total returns (~9.8%) and low volatility due to their AAA CLO holdings.
- The fund has an attractive 6.54% yield with low credit risk and volatility. CLOA has lower fees (20 bps) when compared to JAAA (22 bps).
- With Goldman now seeing the first cut in rates for June, the "higher for longer" rates environment makes CLOA appealing.
Thesis
BlackRock ( BLK ) is usually a 'gorilla' in any niche of the finance industry it enters. Surprisingly, however, its foray into CLO ETFs has been lackluster to say the least, despite robust fundamental returns and composition for its flagship ETF, the BlackRock AAA CLO ETF ( CLOA )....
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For further details see:
CLOA: The Forgotten AAA CLO Fund From BlackRock