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Trends with Benefits Quickie #2: How to Allocate to CLOs with Laila Kollmorgen

November 21, 2023

Listen Time 17:38 MIN

Laila Kollmorgen is back on the podcast to share what’s going on in the collateralized loan obligation (CLO) market and how to allocate to CLOs.

Trends with Benefits Quickies: Your favorite podcast in a shorter segment.

In this episode, we get an update on collateralized loan obligations (CLOs) from Laila Kollmorgen, Portfolio Manager for Pinebridge, and discuss a common question she gets from advisors: how do CLOs fit into my portfolio? We also cover what changes in interest rates and a decline in refinancings mean for CLOs. This is Laila’s second time on the show. In Trends with Benefits #82: CLOs: “Too Big to Ignore,” Laila explained what CLOs are and compared them to other corporate debt categories.

Show Notes:

01:38 How do CLOs fit into a portfolio?

05:33 Implications of lower refinancings

06:48 Impact of rising rates on the economy

12:06 Outlook for inflation

14:04 Institutional interest in CLOs


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IMPORTANT DISCLOSURES

Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this email.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.

There are inherent risks with fixed income investing. These risks may include interest rate, call, credit, market, inflation, government policy, liquidity, or junk bond. When interest rates rise, bond prices fall. This risk is heightened with investments in longer duration fixed-income securities and during periods when prevailing interest rates are low or negative.

An investment in a Collateralized Loan Obligation (CLO) may be subject to risks which include, among others, debt securities, LIBOR Replacement, foreign currency, foreign securities, investment focus, newly-issued securities, extended settlement, management, derivatives, cash transactions, market, operational, trading issues, and non-diversified risks. CLOs may also be subject to liquidity, interest rate, floating rate obligations, credit, call, extension, high yield securities, income, valuation, privately-issued securities, covenant lite loans, default of the underlying asset and CLO manager risks, all of which may adversely affect the value of the investment.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Associates Corporation.

© Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.

Van Eck Associates Corporation
666 Third Avenue, New York, NY 10017

IMPORTANT DISCLOSURES

Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this email.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.

There are inherent risks with fixed income investing. These risks may include interest rate, call, credit, market, inflation, government policy, liquidity, or junk bond. When interest rates rise, bond prices fall. This risk is heightened with investments in longer duration fixed-income securities and during periods when prevailing interest rates are low or negative.

An investment in a Collateralized Loan Obligation (CLO) may be subject to risks which include, among others, debt securities, LIBOR Replacement, foreign currency, foreign securities, investment focus, newly-issued securities, extended settlement, management, derivatives, cash transactions, market, operational, trading issues, and non-diversified risks. CLOs may also be subject to liquidity, interest rate, floating rate obligations, credit, call, extension, high yield securities, income, valuation, privately-issued securities, covenant lite loans, default of the underlying asset and CLO manager risks, all of which may adversely affect the value of the investment.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Associates Corporation.

© Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.

Van Eck Associates Corporation
666 Third Avenue, New York, NY 10017