JBBB: The Yield Is Real, But So Is The CLO Risk
The Janus Henderson B-BBB CLO ETF (JBBB) provides a yield exceeding 6% with low duration and monthly income distributions. However, it primarily invests in BBB-rated CLO tranches, which come with increased credit and liquidity risks compared to senior AAA CLO funds. Investors should weigh the potential income benefits against the inherent risks associated with this investment.
- ▪JBBB offers a yield of over 6% and low duration.
- ▪The ETF focuses on mezzanine CLO debt, specifically BBB-rated tranches.
- ▪Investors face higher credit and liquidity risks compared to AAA CLO funds.
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