CLOZ: Strong CLO ETF, 7-7.5% Forward Yield, Outstanding Performance Track-Record
CLOZ invests in BBB-BB CLOs. It significantly outperformed most of its peers during 2024, despite several rate cuts. It boasts an 8.8% yield, which should decline to around 7.3%, depending on the magnitude of any remaining cuts.
CLOZ: Collecting A Higher Yield With Less Risk
Panagram's Bbb-B Clo ETF offers a high yield through BBB and BB-rated debt, aiming for capital preservation and high current income with a 9% dividend yield. CLOZ's net investment income comfortably covers distributions by itself, without relying on net realized gains. There is no risk of a dividend cut at the moment. The main risk is borrower defaults, influenced by interest rates; however, historical default rates for CLOs have been low, even during financial crises.
CLO Debt ETFs Or CLO Equity CEFs: Which Are Best For Income Investors And Retirees
CLOs have several tranches. Equity tranches are the riskiest ones, but also have the highest yields, and strongest potential returns. Debt tranches are safer and lower-yielding, some significantly so, some moderately so.
CLOs In The Current Market Selloff
Equities are down, due to bearish sentiment, mediocre economic news, and the unwinding of the Japanese carry trade. High-yield bonds and senior loans are seeing some pain too, albeit much reduced. CLO ETFs keep chugging along, without significant losses or underperformance.
CLOZ: 4 Reasons Why I Am Bullish
Panagram BBB-B CLO ETF invests in below investment grade CLOs with a focus on BBB-B ratings for high-income and capital preservation. CLOZ is a unique product offering that has significant exposure to BB rated CLOs. BBB and BB rated CLOs are currently attractive relative to similar risk corporate securities.
3 Strong, Little-Known Income ETFs
Some income ETFs offer high yields and strong value propositions, but fly under the radar of most investors. I've identified three such ETFs: RISR, HYGH and CLOZ. These offer yields in the 7% - 9% range, have outperformed since inception, and get little coverage at Seeking Alpha.
