A strong core: How Asset-Backed Securities can improve fixed income strength
Building portfolio resilience is a key objective for investors during uncertain times. How can AAA CLOs offer a potential solution?
1 Jul 2025
8 minute read
8 minute read
Key takeaways:
- CLOs offer a compelling mix of diversification and higher-quality income within fixed income portfolios. Active management of loan portfolios by CLO managers can help optimise their risk-adjusted return potential.
- Proprietary analysis demonstrates the resilience of European AAA CLOs during market volatility. Their floating rate nature and loss protection mechanisms provide stability and defensive qualities.
- Strategically adding AAA CLOs to fixed income portfolios can thus improve risk-adjusted returns and portfolio resilience. Investors should consider their risk tolerance and objectives, perform due diligence and seek expertise to effectively navigate the CLO market.
Building portfolio resilience is a key objective for investors amid pervasive uncertainty. The Janus Henderson Portfolio Construction and Strategy (PCS) Team explore the performance of AAA Collateralised Loan Obligations (CLOs) as a standalone holding and as part of a diversified fixed income portfolio.
Related insights
10 Apr 2025
1 Jul 2025
8 minute read
8 minute read
Key takeaways:
- CLOs offer a compelling mix of diversification and higher-quality income within fixed income portfolios. Active management of loan portfolios by CLO managers can help optimise their risk-adjusted return potential.
- Proprietary analysis demonstrates the resilience of European AAA CLOs during market volatility. Their floating rate nature and loss protection mechanisms provide stability and defensive qualities.
- Strategically adding AAA CLOs to fixed income portfolios can thus improve risk-adjusted returns and portfolio resilience. Investors should consider their risk tolerance and objectives, perform due diligence and seek expertise to effectively navigate the CLO market.