A CLO ETF Is About To Launch

David Dierking

I'm not sure yet if this is a good idea or not, but Janus Henderson is planning on bringing a collateralized loan obligation (CLO) ETF to the marketplace. CLOs often contain risky and lower quality leveraged loans, making this a risky proposition for retail investors.

With corporate debt downgrades and defaults rising, this could be a bad time to be loading up on leveraged loans, even though the junk bond market continues to perform fairly well lately.

This also smacks of a product that investors might pile into without really understanding what they're buying. As the Bloomberg article notes in the title, "CLOs Are About to Get Easier for the Robinhood Crowd to Buy".

Couldn't agree more!


Market Intelligence