{"id":578719,"date":"2026-08-08T16:38:09","date_gmt":"2026-08-08T16:38:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/578719\/"},"modified":"2026-08-08T16:38:09","modified_gmt":"2026-08-08T16:38:09","slug":"rate-uncertainty-sparking-demand-for-clo-exposure-among-etfs-vettafi","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/578719\/","title":{"rendered":"Rate uncertainty sparking demand for CLO exposure among ETFs: VettaFi"},"content":{"rendered":"

\"Why<\/p>\n

Collateralized loan obligations may become the next big push in the exchange-traded fund industry.<\/p>\n

VettaFi’s Todd Rosenbluth suggests there’s investor demand for the alternative assets due to ongoing interest rate uncertainty.<\/p>\n

“[CLOs have] been popular within the marketplace,” the firm’s head of research told CNBC’s “ETF Edge”<\/a> this week.<\/p>\n

CLOs are short-term fixed income strategies that consist of pools of floating-rate secured loans. They’re designed to deliver relative stability and attractive yields across market cycles.<\/a><\/p>\n

“We’ve seen fixed income ETF demand be quite strong,” Rosenbluth said. “I think that’s going to continue as we’re still waiting for some clarity from the next move of the Fed.”<\/p>\n

Last month’s Fed’s decision to keep rates unchanged<\/a> is a catalyst for short-term product demand, according to Rosenbluth.<\/p>\n

‘That’s caught our attention’<\/p>\n

The industry appears to be acknowledging investor interest. Rosenbluth listed Reckoner Capital Management, an ETF provider specializing in CLOs, as a firm actively creating new CLO ETFs this year.<\/p>\n

“That’s caught our attention,” he said. “It’s just great to see the innovation that’s happening within the fixed income ETF marketplace.”<\/p>\n

Jennifer Grancio, global head of distribution at TCW Group, is also seeing a preference to fixed income from an asset manager perspective.<\/p>\n

“I think a lot of advisors are holding a core income-oriented portfolio and then dabbling a little bit with short duration or CLO products,” she said.<\/p>\n

CLO risks<\/p>\n

However, Rosenbluth acknowledges risks associated with CLO ETFs.<\/p>\n

“While AAA-rated CLO tranches boast near-zero default rates, lower-tier tranches (BBB-B) face heightened default risk and market volatility during economic stress,” he wrote in a special note to CNBC. “In addition, because corporate loans in CLO pools carry significant exposure to tech<\/a> and software<\/a> sectors, private credit jitters or tech selloffs can spill over and trigger spread widening.”<\/p>\n

He added that investors are therefore seeking AAA-rated and senior-secured assets to capture attractive yields without that long-term maturity risk.<\/p>\n

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Collateralized loan obligations may become the next big push in the exchange-traded fund industry. VettaFi’s Todd Rosenbluth suggests…\n","protected":false},"author":2,"featured_media":578720,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[5461,933,9184,941,114,357,7256,261649,184,261652,25913,10913,52848,2495,85,4486,942,136665,46,261650,118946,190,10361,9515,261648,7130,1760,125,28315,261651,196],"class_list":["post-578719","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-banks","tag-breaking-news-economy","tag-breaking-news-investing","tag-breaking-news-markets","tag-business","tag-business-news","tag-central-banking","tag-credit-rating-services","tag-economy","tag-eldridge-bbb-b-clo-etf","tag-exchange-traded-funds","tag-federal-reserve-system","tag-fixed-income-funds","tag-generative-ai","tag-il","tag-interest-rates","tag-investment-strategy","tag-ishares-north-american-tech-software-etf","tag-israel","tag-janus-henderson-aaa-clo-etf","tag-kevin-warsh","tag-markets","tag-monetary-policy","tag-recessions-and-depressions","tag-shell-company","tag-software","tag-stock-markets","tag-technology","tag-technology-select-sector-spdr-fund","tag-vaneck-clo-etf","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/578719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=578719"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/578719\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/578720"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=578719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=578719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=578719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}