CLOs have been one of the best-performing income asset classes of these past few years, as has CLOZ. Due to the fund's strong investment thesis and popularity, I thought to compare it with USHY, a simple high-yield bond ETF. CLOZ has a higher yield, stronger past returns, and lower risk and volatility.
CLOZ offers exposure to BB and BBB CLO tranches, blending investment-grade and high-yield risk for a 7.7% SEC yield and floating rate income. Current CLO spreads are historically tight, making the risk/reward unattractive; a significant drawdown is possible if spreads widen to past levels. Recent management changes add uncertainty, as the fund lost an experienced manager, and new leadership's performance in stressed markets is unproven.
Advisors don't want to take on much interest rate risk. But many are willing to take on some credit risk.
![]() CLOZ In 5 days Estimated | Monthly | $0.16 Per Share |
![]() CLOZ 3 weeks ago Paid | Monthly | $0.16 Per Share |
![]() CLOZ 4 months ago Paid | Monthly | $0.15 Per Share |
![]() CLOZ 5 months ago Paid | Monthly | $0.16 Per Share |
![]() CLOZ 7 months ago Paid | Monthly | $0.21 Per Share |
![]() CLOZ 7 months ago Paid | Monthly | $0.18 Per Share |
![]() CLOZ In 5 days Estimated | Monthly | $0.16 Per Share |
![]() CLOZ 3 weeks ago Paid | Monthly | $0.16 Per Share |
![]() CLOZ 4 months ago Paid | Monthly | $0.15 Per Share |
![]() CLOZ 5 months ago Paid | Monthly | $0.16 Per Share |
![]() CLOZ 7 months ago Paid | Monthly | $0.21 Per Share |
![]() CLOZ 7 months ago Paid | Monthly | $0.18 Per Share |
ARCA Exchange | US Country |
This fund operates as an actively managed exchange-traded fund (ETF) that specializes in investing primarily in collateralized loan obligations (CLOs). Its strategic focus is on CLOs that are rated from BBB+ to B- or have an equivalent rating by a Nationally Recognized Statistical Rating Organization (NRSRO). Structured as a non-diversified fund, it dedicates at least 80% of its net assets, in addition to any borrowings for investment purposes, towards its core investment strategy. This approach allows the fund to navigate and exploit opportunities within the CLO market, aiming to achieve its investment objective through precise and targeted investments.
The fund's primary service offering involves the investment in CLOs that are rated between BBB+ and B- or hold an equivalent rating by an NRSRO. These investments form the core of the fund's portfolio, providing exposure to a range of credit opportunities within the CLO market. This strategy is designed to navigate the complexities of the CLO space, targeting investments that offer a balanced risk-return profile within the specified rating band.