Building diversified portfolios with CLOs

What are CLOs?

Collateralized loan obligations (CLOs) offer investors a wide variety of risk return profiles and can play a powerful role in a portfolio allocation. CLOs may offer enhanced income, potentially a lower default experience versus similarly rated corporate bonds, and can provide diversification benefits for core bond portfolios. Once available only to institutional investors, CLOs are gaining attention from qualified individuals who recognize the potential material benefits of this asset class.