Francis Rodilosso and William Sokol appeared on Bloomberg’s Inside Active Podcast to discuss how active management is essential in CLO investing.

Why CLOs Stand Out in Fixed Income

CLOs continue to present a compelling value proposition for investors seeking floating‐rate income and diversified credit exposure. Their structural protections and active management components help mitigate credit risk while capturing enhanced yields compared with traditional corporate bonds.

Key Takeaways:

• [05:52] CLOs may strengthen core bond portfolios and ETFs may provide broader access to the asset class.
• [10:25] CLOs may offer a yield advantage versus similarly rated IG corporates while maintaining floating‐rate exposure that reduces duration risk.
• [12:45] Manager expertise, strong security selection, tranche analysis, and experience drive performance dispersion in CLOs, making active management critical.
• [28:36] Investors are paying closer attention because of credit concerns with First Brands and Tricolor. These risks seem specific to those companies, not the broader market. Weaker credits could come under some pressure, but careful security selection, especially in mezzanine tranches, should help keep the impact limited.
• [43:05] CLOs offer value, but selectivity is vital amid rate shifts, tariffs, and credit market risks.

How to Invest in CLOs

VanEck has partnered with PineBridge Investments on the VanEck CLO ETF (CLOI), which provides access to investment grade floating‐rate CLOs, as well as the VanEck AA‐BB CLO ETF (CLOB), which offers more targeted exposure to the mezzanine tranches of CLOs. Both CLOI and CLOB benefit from PineBridge’s decades of CLO market experience, both as a CLO manager and CLO tranche investor, and deep leveraged finance expertise. CLOI’s current 30‐day SEC yield is 5.43% and CLOB’s is 6.59% (as of 10/31/2025).

For the latest data and yields for VanEck’s full suite of income investing solutions, please refer to our Income Investing Yield Monitor.

Originally published November 26, 2025

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