CLOs: Lower Duration Risk and Pick Up Yield
With higher relative yields, a history of strong risk-adjusted returns, and protection against rising rates, we believe there is a strong case for a strategic allocation to Collateralized loan obligations (CLOs) within an income portfolio. Over the long term, CLOs have historically performed well relative to other corporate debt categories, particularly when a broad investment grade approach is taken. CLOs are also structured to help mitigate risk, with subordination to absorb losses and other built-in protections. Furthermore, CLOs are floating rate instruments, which we believe makes them an attractive alternative in a rising rate environment.
Join VanEck Portfolio Manager, Fran Rodilosso, and PineBridge Portfolio Manager, Laila Kollmorgen for a discussion about the current market environment, how to approach CLO investing and how CLOs can fit into a portfolio.
Topics will include:
- How CLOs are structured, and the resulting features and benefits
- The case for investment grade CLOs now
- Why an active approach is needed in CLO investing
NOT accepted for one hour of CFP/CIMA CE credit for live and on-demand attendees
CFA Institute members are encouraged to self-document their continuing professional development activities in their online CE tracker.
Fran RodilossoHead of Fixed Income ETF Portfolio Management
William SokolDirector of ETF Product Management
Laila Kollmorgen, CFAPortfolio Manager, CLO Tranche
Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this webcast.
The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the speaker (s), but not necessarily those of VanEck.
An investment in a Collateralized Loan Obligation (CLO) may be subject to risks which include, among others, debt securities, LIBOR Replacement, foreign currency, foreign securities, investment focus, newly-issued securities, extended settlement, management, derivatives, cash transactions, market, operational, trading issues, and non-diversified risks. CLOs may also be subject to liquidity, interest rate, floating rate obligations, credit, call, extension, high yield securities, income, valuation, privately-issued securities, covenant lite loans, default of the underlying asset and CLO manager risks, all of which may adversely affect the value of the investment.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
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