The CLOI ETF is issued by PineBridge Investments LLC, the sub-adviser of the fund. PineBridge Investments specializes in active management strategies and employs bottom-up analysis combined with a top-down overlay to construct portfolios. With a focus on credit views and risk factor positioning, PineBridge aims to deliver effective risk management and attractive returns for investors in the collateralized loan obligation (CLO) space.
While the primary objective of the PineBridge CLO Senior Loan ETF (CLOI) is to invest in investment grade-rated debt tranches of collateralized loan obligations (CLOs), it may also generate dividend income for eligible investors. Dividend distributions typically reflect the performance of the underlying CLOs and are subject to the dividend policies of the constituent companies within these CLOs. As an actively managed ETF, CLOI may distribute dividends on a periodic basis, providing investors with potential income alongside exposure to the senior loan market.
Tracking the performance of investment-grade collateralized loan obligations (CLOs) forms the foundation of the CLOI ETF's investment strategy. CLOI invests primarily in debt tranches of CLOs, aiming for at least 80% exposure to investment-grade-rated securities. These CLOs typically consist of a pool of loans, including senior secured, senior unsecured, and subordinate corporate loans. The fund, managed actively, employs a bottom-up analysis to select CLO investments, considering factors such as the CLO manager, underlying collateral, and structural terms. Additionally, CLOI may use derivatives, like currency forward contracts, to hedge foreign currency exposure, and it may allocate a portion of its assets to affiliated or non-affiliated ETFs for diversification purposes.
Understanding the correlation dynamics of the CLOI ETF can provide insights into its behavior relative to the broader market. As the ETF primarily invests in investment grade-rated debt tranches of collateralized loan obligations (CLOs), its correlation may be influenced by factors such as credit quality, interest rates, and market sentiment towards leveraged loans. Investors often analyze CLOI's correlation with other fixed-income instruments and equity markets to assess its diversification benefits and risk characteristics. Our tool, ETF Insider, offers a comprehensive web app to study correlations, providing deep and insightful data visualizations, including overlap analysis, for all US ETFs, facilitating informed investment decisions.
The CLOI ETF is deeply entrenched in the collateralized loan obligation (CLO) sector. CLOs are financial vehicles that are backed by a pool of corporate loans. These loans often include a mix of senior secured, senior unsecured, and subordinate corporate loans, with varying credit ratings. The ETF primarily invests in investment grade-rated debt tranches of CLOs, providing exposure to a segment of fixed income securities with potentially higher yields compared to traditional bonds. Managed actively, the ETF selects its investments through a rigorous bottom-up analysis, considering factors such as the CLO manager's performance, underlying collateral quality, and structural terms. Additionally, the fund may utilize derivatives to hedge risks associated with its CLO portfolio, enhancing its risk management strategies.
The exposure characteristic of the Credit Suisse X-Links Collateralized Loan Obligations (CLO) Leveraged ETN (CLOI) reflects its focus on investment-grade-rated debt tranches of collateralized loan obligations (CLOs). With a minimum of 80% of its assets allocated to investment-grade CLO securities, CLOI offers investors access to a specific segment of the fixed-income market known for its relatively higher yields compared to traditional bonds. By leveraging the expertise of the fund's managers, investors can gain exposure to CLOs while mitigating risks associated with lower credit quality securities. This targeted exposure makes CLOI an intriguing option for those seeking income generation and portfolio diversification within the fixed-income space.
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