CLOI ETF

For the uninitiated, collateralized loan obligations (CLOs) may appear too good to be true. This corner of the bond market offers tempting yields, usually well in excess of aggregate bond strategies, with relatively low credit risk.

Investors seeking high dividend yields in a lower Fed Funds environment should consider increasing credit risk with the VanEck CLO ETF. CLOI invests in AA and BBB CLO tranches, offering higher yields with minimal additional credit risk compared to AAA tranches. While CLOI isn't immune to lower Fed Funds, it compensates with higher all-in yields due to lower-rated holdings.

Bond yields remain elevated. But many income investors want to access strong income streams with reduced credit or interest rate risk.

The VanEck CLO ETF (CLOI) is a fixed income exchange-traded fund. We covered this name right when it was issued with a 'Buy' rating, and assigned a 'Hold' in 2023. The ETF has delivered robust returns since its inception and hasn't experienced significant downturns. CLOI has outperformed AAA-only peers, offers high yield until Fed rate cuts, and has low volatility, making it a strong investment option.

CLO ETFs provide investors with solid returns and performance. CLOI is a CLO ETF that focuses on investment-grade tranches and has a diversified portfolio. It currently yields 5.9%, slightly lower than anticipated, but historical returns have been higher and overall performance has been strong.

ETFs that follow collateralized loan obligations (CLO) could see increased interest and investments as investors search for safer, high-yield options in the fixed income market. This could benefit the VanEck CLO ETF (CLOI).

According to William Sokol, Director of Product Management, CLOs have demonstrated their value in investors' main bond portfolios, even though they are not widely included in general "agg" indices. Investors usually rely on their core bond portfolios to help stabilize market fluctuations.

In the world of collateralized loan obligations (CLOs), market participants tend to favor the highest-rated issues, often sticking to CLOs with AAA grades. That's prudent.

By Patrick Schramm, ETF Strategist Since the beginning of 2023, equity markets have ripped despite the presence of what appeared to be multiple headwinds—the question now is, what could go wrong? In my numerous conversations with clients to start off 2024, one common theme sticks out—people want to talk about the resilient U.S.