Pooled loan obligations (CLOs) are secured portfolios of business loans that are categorized by risk profile. For many retail investors, CLOs can be exotic and uncomfortable, but the potential for attractive yields, floating rate income, and diversification is powerful. Some investors may also be unaware of how easy it can be to build CLO exposure in a portfolio with exchange-traded funds (ETFs).
ETFs already offer the benefit of diversification to many fixed income investors, helping to reduce the risk of a particular issuer, sector, or credit event compared to holding individual securities. Because they trade throughout the day like stocks, ETFs are also easy for investors to buy or sell if they need to make real-time portfolio changes.
That ETF structure is important because CLO investing is not one-size-fits-all. CLO ETFs aren’t just easy access to the once-institutional debt market; they also give investors the ability to choose where they want to sit on the risk spectrum, from AAA-rated CLO exposures to high-yield BBB and BB products. Funds like the Janus Henderson AAA CLO ETF NYSEARCA: JAAAthe Eldridge BBB-B CLO ETF NYSEARCA: CLOZand the iShares AAA CLO Active ETF NASDAQ: CLOA all may invest in CLOs, but they offer very different combinations of credit quality, yield, liquidity, and risk.
JAAA: A Fund Looking for High-Quality CLOs Available
Janus Henderson AAA CLO ETF today
Rating of the company Janus Henderson AAA CLO ETF
As of 05/29/2026 04:10 PM Eastern
- 52 week interval
- $50.13
▼
$50.85
- Dividend Yield
- 5.03%
- Assets Under Administration
- $27.37 billion
The Janus Henderson AAA CLO ETF focuses on AAA-rated CLO tranches, the highest quality piece of the CLO infrastructure.
These securities typically receive payments ahead of the lower rates, which helps explain why AAA CLO debt has built a strong credit track record through multiple market cycles.
For risk-conscious investors, JAAA offers a more conservative approach to CLO income than funds focused on lower-rated tranches, although it still carries credit, liquidity, and interest rate risk.
AAA-rated CLO ratings have historically exhibited lower volatility and lower downside risk than lower-rated CLO debt. JAAA gives retail investors access to a portion of the CLO market that was previously dominated by institutional buyers.
Investors in JAAA will likely appreciate that despite being actively managed, the fund has a low expense ratio of 0.20%. It also has the strongest liquidity of a niche credit ETF, with over $27 billion in assets under management and a 30-day average bid-ask spread. Because liquidity can be a concern with CLOs, JAAA’s scale and trading profile can help ease investors’ worries about that.
Investors are looking for CLOs for diversification, and JAAA offers a nice 5.% yield. Its portfolio of more than 600 AAA-rated CLOs enjoys low correlation to other fixed income classes, providing useful diversification for cash-oriented investors.
CLOZ: High Yield While Protecting Automatically
Eldridge BBB-B CLO ETF today
Eldridge BBB-B CLO ETF
As of 05/29/2026 04:10 PM Eastern
- 52 week interval
- $25.23
▼
$26.96
- Dividend Yield
- 7.39%
- Assets Under Administration
- $665.64 million
While the JAAA seeks the highest quality CLO categories, the Eldridge BBB-B CLO ETF targets CLOs rated BBB or BB.
These lower-rated ratings often come with greater credit risk and price volatility, but they also offer greater income potential than AAA-rated CLO exposures.
CLOZ is also an actively managed fund, so it has a higher expense ratio than JAAA. Investors pay 0.50% per year to access a CLOZ portfolio of more than 160 CLOs. Like AAA-rated CLOs in the JAAA basket, CLOZ offers investors a set of products with low correlation to both stocks and traditional fixed income investments. Because CLOZ brings together a variety of CLOs from different issuers and industries, this helps reduce the risk of a single issuer and a single entity.
Although CLOs generally have low default risk, lower CLO tranche rates are more exposed when loan defaults increase or credit conditions weaken. But instead of taking on more risk, investors are rewarded with a 7.4% yield, making CLOZ an excellent source of income with a unique focus and profile compared to other bond funds.
However, it should be noted that CLOZ is a much smaller fund than JAAA—it has less than $700 million in assets under management and an average monthly trading volume of more than $250,000—so liquidity may be more of a concern in this case, especially during times of credit market stress.
CLOA: Minor Rival in JAAA
iShares AAA CLO Active ETF Today
iShares AAA CLO Active ETF
As of 05/29/2026 04:00 PM Eastern
- 52 week interval
- $51.53
▼
$52.05
- Dividend Yield
- 5.00%
- Assets Under Administration
- $2.17 billion
Another AAA-focused fund, the iShares AAA CLO Active ETF focuses on US dollar-denominated CLOs, rated AAA.
The fund competes directly with JAAA on credit quality and expense: both ETFs focus on AAA-rated CLO exposure and have an expense ratio of 0.20%.
For that amount, CLOA investors get a portfolio of more than 400 assets, giving them a cost-effective alternative to access the high-quality segment of the CLO market.
The main difference is scale, as a CLOA is smaller and less liquid than a JAAA but still offers a focused, actively managed approach to AAA CLO exposure. The fund has more than $2 billion in assets under management and a one-month trading average of about 415,000. However, its 5% yield is about the same as its biggest competitor.
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