This Fixed Income Trade Is Paying More Right Now — And Most Investors Miss It

• CLOs offer floating-rate income, with AAA CLOs yielding around 4.75% and income-oriented CLOs (CLOZ) yielding north of 7.5%, delivered monthly.
• They provide diversified exposure to senior secured loans of mid-cap to large-cap US companies, actively managed to mitigate risk.
• Historically, AAA CLOs have never defaulted, and since 2010, no AAA, AA, A, or BBB CLOs have defaulted, showcasing their resilience.
• CLOs are distinct from CDOs of the Global Financial Crisis due to their corporate loan collateral, hyper-diversification, and active management.

Danielle Gilbert from Eldridge Capital discusses Collateralized Loan Obligations (CLOs) as an overlooked income strategy. She highlights their long history of strong performance, floating-rate income generation, and diversification benefits, now accessible to retail investors through ETFs. CLOs are presented as a resilient alternative to traditional fixed income, particularly in volatile interest rate environments.