CLO-ckwork Precision: Integrating CLOs into portfolios
Building portfolio resilience is a key objective for investors during uncertain times. How can AAA CLOs offer a potential solution?
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.
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Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
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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.