New York Life Investment Management has launched the NYLI Investment Grade CLO ETF, an actively-managed ETF designed to give investors investment grade access to collateralised loan obligations (CLOs).
The team behind the ETF seeks to identify CLO securities offering attractive, risk-adjusted returns by focusing primarily on higher-quality tranches of CLO securities, with at least 80% of the portfolio allocated to securities rated investment grade.
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The investment process blends top-down portfolio construction with bottom-up security selection. The team evaluates macro conditions and credit cycles by conducting detailed analysis of individual CLO structures, underlying collateral, and manager quality, while seeking to uncover relative value opportunities while monitoring downside risks.
The fund is managed by New York Life Investment Management, which has around $807bn (£592bn) in assets under management, with NYL Investors serving as subadvisor. Its portfolio managers, Arthur Torrey and Christian Saltaformaggio, bring decades of experience in structured credit and have been managing CLO portfolios using a similar framework since 2010.
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“Not all CLO exposure is created equal,” said Torrey, who is also managing director and head of public credit portfolio management and trading. “Our approach is about being selective. By understanding the structure, the manager, and underlying loans, we can build a portfolio that we believe can hold up across different market environments while continuing to generate income.”
