iShares AAA CLO Active ETF (CLOA)

Dividend stocks have sharply outperformed AI-related tech stocks since November 2025, reversing a multi-year trend. I see the rally in dividend ETFs like SCHD as overextended, prompting a pause in new purchases despite recent gains. AI is likely to benefit users more than makers, with sectors like banks, energy, and consumer staples positioned as early winners.

I view iShares AAA CLO Active ETF as a low-risk, income-focused holding ideal for defensive investors seeking capital preservation. CLOA's portfolio of AAA-rated, floating-rate CLOs delivers a stable 5.7% yield and strong resilience during market downturns, but offers limited upside in bull markets. The fund's short-dated maturities and lack of equity exposure minimize volatility but guarantee underperformance versus equity indices over extended periods.

O'Donnell Financial bought 131,914 shares of CLOA; trade size estimated at $6.83 million based on average quarterly pricing. Quarter-end position value rose by $6.82 million, a figure reflecting both new purchases and price changes.

BlackRock's iShares AAA CLO Active ETF invests in AAA-rated CLOs, focusing on income and principal preservation in structured credit.

Constructing a stable income portfolio in today's volatile market favors CLO bond ETFs with strong yield and minimal drawdown. My recent portfolio revision removed underperforming or volatile funds, and adding top-performing AAA CLO ETFs and a diversified alternative. PAAA, CLOB, and UYLD are highlighted for superior total return, low drawdown, and attractive yield in their respective classes, with UYLD offering a near-treasury risk profile but higher yield.

iShares AAA CLO Active ETF (NASDAQ: CLOA - Get Free Report) was the target of a large decrease in short interest in December. As of December 15th, there was short interest totaling 47,825 shares, a decrease of 35.4% from the November 30th total of 74,062 shares. Currently, 0.2% of the shares of the stock are short

The iShares AAA CLO Active ETF offers higher yields than money market funds with minimal credit and interest rate risk, focusing on AAA CLO tranches. CLOA provides a 5.1-5.4% yield, extremely low duration risk (0.11 years), and strong portfolio diversification across 373 positions. Management fees are competitive at 0.20%, and over 98% of assets are AAA-rated, ensuring a conservative risk profile within the CLO ETF universe.

On October 6, 2025, INSPIRION Wealth Advisors, LLC reported selling out of BlackRock ETF Trust II - iShares AAA CLO Active ETF (CLOA 0.08%), an estimated $22.62 million transaction.

On Thursday, Adams Wealth Management disclosed that it reduced its position in the iShares AAA CLO Active ETF by nearly 65,000 shares—cutting about 20% of its holdings in the fund.

CLOA is a solid AAA CLO ETF, but JAAA offers a better risk-adjusted return and higher liquidity. A 50/50 mix of JAAA and CLOI matches CLOA's risk with superior returns and improved trading volume. The CLO market outlook is positive, but CLOA's advantages are not unique among peers, making alternatives more compelling.

The 10-Year Treasury yield signals that the market does not expect a recession in the near term. Current yield levels suggest inflation expectations remain elevated compared to recent years. Investors should interpret the bond market as pricing in persistent inflation rather than imminent economic contraction.

The iShares AAA CLO Active ETF is downgraded from 'Buy' to 'Hold' due to less favorable interest rate conditions and market risk exposure. CLOA holds a high-quality portfolio of mostly AAA CLOs, offering low interest rate duration and a 5.6% SEC yield. Despite a low probability of default, AAA CLOs are not risk-free and can experience drawdowns during market stress, as seen recently.

AAA CLOs, like the iShares AAA CLO Active ETF, offer compelling income-based attributes and limited price sensitivity in today's uncertain economic climate. CLOA ETF invests primarily in AAA-rated CLO tranches, providing liquid access to an illiquid asset with a weighted average coupon of 5.82%. Despite potential risks, CLOA ETF has shown consistent returns and benefits from a higher-for-longer interest rate outlook and rising demand for CLO vehicles.

Investors have upped their interest in actively managed bond ETFs, pouring record capital into them in January as some paid up in hopes of stronger returns.

CLO ETFs offer retail investors access to high-yield, floating-rate investments with historically low default rates, outperforming similarly rated corporate bonds. Investors should choose CLO ETFs based on their risk tolerance; AAA-rated options like CLOA and JAAA for conservative profiles and JBBB for investors with higher risk tolerances. Despite strong historical performance, caution is advised due to potential economic downturns and credit spread risks; I recommend AAA-rated CLOs for stability.

Several firms are planning to launch collateralized loan obligation (CLO) ETFs, enhancing options for investors. CLOs have provided attractive risk-adjusted returns over the past decade, especially when compared to other fixed income investments.