In an Investment Landscape Twist, BlackRock Unveils Two New CLO ETFs for the Agile European Investor

Widening the landscape for continental investors, BlackRock Investment Management has freshly demonstrated its lofty ambitions within the European market by launching two new Collateralised Loan Obligations (CLO) Exchange Traded Funds (ETFs). These novel offerings are primed to give potential investors exclusive exposure to the dollar- and euro-denominated CLO markets.

The first of the recent entrants, christened the iShares $ AAA CLO Active UCITS ETF, targets individuals and institutions that wish to invest in dollar-denominated CLOs. Its management team: Saffet Ozbalci, Nidhi Patel, and Tyler Debussey have already played pivotal roles within BlackRock’s pre-existing iShares AAA CLO Active ETF in the US.

Meanwhile, the iShares € AAA CLO Active UCITS ETF, one that promises investors lucrative exposure to euro-denominated CLOs, is another innovation that has been floated into the market. Managed by a team including the global head of Structured Credit at BlackRock, Saffet Ozbalci, along with Maria Rassam and Jeff Soar, it has already managed to accrue €25 million in net assets with a portfolio comprised of 22 holdings and is listed on Deutsche Börse XETRA and Borsa Italiana.

Both these offerings signify an excellent opportunity for professional investors to realise their strategic objectives within the context of their overall portfolios. This also enables individuals to stay engaged with the fluidity of international markets and currency trends with an investment strategy skewed towards dollar-and euro-denominated CLOs. Both ETFs also allow an additional cap of 20% of the fund’s investment to include tranches rated at least A-. Notably, both these funds are not constrained by any index and offer a wider room for strategic play.

In the wider European landscape, BlackRock’s two new CLO ETFs follow closely in the footsteps of the UBS Asset Management’s UBS EUR AAA CLO UCITS ETF. The continued expansion of this product line-up suggests a buoyant investor response and the likely proliferation of similar offerings in the future. The question remains of who will be daring enough to follow into a CLO ETF building saga in this economic climate where uncertainties are often as predictable as the turning tide.