New structured credit ETFs are hitting the market just as investors hunt for income

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BlackRock is among the firms with a new CLO ETF, challenging the dominant Janus Henderson fund in this area of bundled corporate loans.

The surge of cash into debt funds in 2022 is helping fuel the growth of more esoteric forms of bond ETFs, including two funds launched in January that buy packages of predominantly leveraged corporate loans. BlackRock launched the AAA CLO ETF less than a month ago, and the product already has about $30 million in assets under management.

"You're seeing a raft of ETFs being issued right now to take advantage of the fact that these bonds have performed so well over multiple crises and multiple years, and people want to bring them to a retail audience," Kim said. The most established fund is the Janus Henderson AAA CLO ETF , which only launched in 2020 and already has about $2 billion in assets under management. The fund has healthy trading volume, occasionally topping one million shares in a day.

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