AAA vs CLOA

AAACAlternative Access First Priority CLO Bond ETF

CLOAAiShares AAA CLO Active ETF

In short

AAA Launched in 2020, this small independent fund holds roughly 30 first-priority CLO bonds and pays monthly, with capital preservation and income as its stated goal. At 0.19% it undercuts most of the big-name CLO ETFs that now crowd the category.

CLOA BlackRock's play in AAA CLOs: active credit picking measured against J.P. Morgan's CLOIE AAA index, 0.20% a year, spread over roughly 400 positions. A billion-dollar-plus book built since its 2023 launch.

Stated mandate

AAA The Fund seeks capital preservation and income.

CLOA The fund seeks exposure to U.S. dollar-denominated AAA-rated collateralized loan obligations, using active credit selection to pursue income and capital preservation with potentially low volatility.

Why people hold it

• AAA 0.19% a year, under the 0.25% CLO ETF median and a hair below CLOA, JAAA, FAAA and ACLO at 0.20%. Fee is one of the few fixed quantities in a capital-preservation product.
• The mandate is plain: capital preservation and income from first-priority CLO bonds, the senior slice of the structure that stands first in line to be paid.
• Income lands monthly, and the book stays tight at roughly 30 positions, so what sits inside is easy to see rather than buried in hundreds of line items.
• A boutique shop in a peer group otherwise stacked with BlackRock, Janus Henderson, PGIM, Fidelity and TCW. Different house, same senior-tranche corner of credit.

• CLOA Charges 0.20% a year, below the 0.25% typical for CLO funds and level with what most of the category's biggest names (JAAA, FAAA, ACLO) charge.
• Roughly 400 separate CLO positions, one of the deepest books in its peer group, so no single deal carries the fund.
• Actively run: the team selects deals and CLO managers instead of buying whatever a benchmark holds. The CLOIE AAA index is the yardstick, not the rulebook.
• Income arrives monthly, and it sits among the easier funds in its cohort to get in and out of.

Worth knowing

• AAA Small and thinly traded next to JAAA, CLOA and PAAA, so bid-ask spreads can run wider and sizable orders need more care at the point of trade.
• Roughly 30 positions means each bond carries real weight. Less spreading of risk than a portfolio holding hundreds of deals.
• Capital preservation is the stated objective, not a promise. These are floating-rate corporate credit instruments and their prices move.

• CLOA Active means manager-dependent. There is no index to fall back on, so outcomes hinge on which deals the desk picks.
• The mandate pursues income and capital preservation with potentially low volatility. That is the aim, not a floor; CLO prices still move.
• Trading since January 2023, so its record is short next to long-running bond funds and covers a narrow slice of credit history.

Full AAA profile⁠

Full CLOA profile⁠