New York Life Investment Management has launched the NYLI Investment Grade CLO ETF (NYSE:CLOO), adding to the growing lineup of actively managed fixed-income ETFs targeting income-focused investors navigating elevated rates and credit uncertainty. The fund will invest primarily in investment-grade collateralized loan obligations, or CLOs, with at least 80% of the portfolio allocated to highly rated tranches.

According to the firm, the investment process combines top-down macro analysis with bottom-up security selection, evaluating factors such as underlying loan quality, CLO structure, and manager selection to identify relative value opportunities while limiting downside risks. The strategy aims to build a portfolio capable of performing across varying market conditions while continuing to generate income.

Key Features Of CLOO

• Actively managed ETF focused on investment-grade CLO exposure
• At least 80% of assets allocated to investment-grade-rated securities
• Strategy emphasizes income generation alongside capital preservation
• Investment process combines macroeconomic analysis with detailed credit research
• Focus areas include CLO structure, collateral quality, and manager selection

The launch comes as CLO-focused ETFs continue gaining traction among investors seeking higher yields than traditional corporate bonds while maintaining a degree of structural protection. Kirk Lehneis, Head of U.S. Retail at New York Life Investment Management, said CLOs have increasingly become a "core building block" within fixed income because of their income potential and built-in protections.

The fund joins other CLO ETFs like Janus Henderson AAA CLO ETF (NYSE:JAAA) and iShares AAA CLO Active ETF (NASDAQ:CLOA) which are gaining decent investor interest this year. Over the past three months, JAAA has garnered over $660 million in inflows whereas CLOA has gained more than $600 million in inflows.

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