A CLO ETF and a Fellow with a Notion

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Now, I’ve seen a good many things in my time, and a fair few of ’em involved folks chasing a dollar. But this here tale, it concerns a bit of paper – an exchange-traded fund, they call it – and a Californian gentleman named O’Donnell who seems to have taken a fancy to it. The fund, you see, is the iShares AAA CLO Active ETF – CLOA, for short – and it deals in them collateralized loan obligations. Sounds complicated, don’t it? Well, it is, but the gist is, it’s a way of slicing up debt and selling it off in pieces. A perfectly respectable business, I suppose, if you can keep track of the slices.

Mr. O’Donnell’s firm, O’Donnell Financial Services, decided to add a considerable heap of CLOA shares to their holdings back in January of ’26. A $6.8 million heap, to be precise. That’s a fair sum, enough to make a man consider buying a small island, or at least a very comfortable rocking chair. They started with 7,868 shares and swelled it up to 139,782. Now, a prudent investor, one who doesn’t go chasin’ rainbows, doesn’t make such a move on a whim. It suggests they believe this CLOA contraption has some merit.

The fund itself, it’s a curious thing. It holds a portfolio of these AAA-rated CLOs, aiming to deliver a steady income stream. They say it’s actively managed, which means some fellow is sittin’ in an office, tryin’ to outsmart the market. A noble effort, though I’ve found the market has a habit of outsmartin’ most folks. The expense ratio is a modest 0.2%, which is a price to pay for someone else to worry about the debt slices.

As of that same January, the shares were priced at $52.02, yielding a dividend of 5.32%. A respectable return, though not enough to retire on, unless you’ve a heap of shares to begin with. Over the past year, it’s returned 5.5%, which, while not bad, lags behind the S&P 500 by a good nine and a half percentage points. Still, it seems to hold steady, less affected by those interest rate fluctuations that send other funds into a tizzy.

Now, this CLOA, it’s not for the gambler lookin’ for a quick fortune. It’s for the conservative soul who wants a steady drip of income, and isn’t afraid of a bit of financial complexity. It accounts for 2.47% of O’Donnell’s reportable assets, which is a significant portion. Their top holdings include SPYM, DSTL, RDVY, MGK and FTGS. Seems they’re spreadin’ their bets, which is always a sensible approach.

The fund’s asset base sits at $1.38 billion, a tidy sum indeed. It’s a way to diversify a fixed-income portfolio, addin’ a touch of securitized credit. It’s not a cure-all, mind you, but it might just be a useful addition for the right investor. I reckon Mr. O’Donnell, with his $6.8 million investment, believes as much. It’s a solid ETF for income-minded investors, and that can explain why O’Donnell Financial decided to increase its stake.

So, there you have it. A CLO ETF, a Californian gentleman, and a sizable investment. It’s a reminder that even in this age of technological marvels, the pursuit of a steady income remains a timeless endeavor. And sometimes, the simplest path is the most sensible one. Though, I suspect, there’s always a bit of mystery in how these financial contraptions truly work.

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2026-02-02 06:03