CLOs start 2023 with higher yields and spreads

CLOs and loans significantly outperformed other credit asset classes in 2022, and the asset class enters the new year at materially higher yields and spreads versus one year ago. The VanEck CLO ETFoutperformed the J.P. Morgan CLO Index in the fourth quarter by 0.13%, and since launching in June 2022 has outperformed by 0.57%, driven by both portfolio positioning and security selection. With credit conditions expected to deteriorate this year, the portfolio remains conservatively positioned.

Market Update: CLOs Rally Amid Lower Than Expected Inflation

CLOs continued their fourth quarter rally in December, as easing inflation concerns improved investor sentiment despite the continued hawkish narrative from the Federal Reserve. Inflation was lower than anticipated in November with the narrative shifting during the second half of the month amid hawkish surprises from central banks and weak global economic data, although CLOs held on better than most other risk assets.

Volta Finance Ltd (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
Twitter
LinkedIn
Volta Finance

More articles like this

Volta Finance

The emergence of European middle market CLOs

Collateralised loan obligations (CLOs) are a significant element in the European capital markets. In 2023, the public issuance of CLOs in Europe maintained a steady volume of €26 billion across 69 deals, mirroring the previous year’s

Volta Finance

CLOs: One of the most underutilized asset classes

In the aftermath of the Global Financial Crisis (GFC), Collateralized Loan Obligations (CLOs) emerged as a contentious topic and were viewed through a cautious lens. However, as financial markets have evolved, the asset class has been

Volta Finance

Why CLOs are outperforming core bonds in today’s market

CLOs provide the attributes that investors look for in their core bond portfolios: attractive yield, safety, and diversification, and have continued to outperform core fixed income through this most recent volatility. As a result, an allocation

Volta Finance

Understanding CLOs and How They Work

Collateralized Loan Obligations (CLOs) are a new asset class within the finance world. They offer diversification options and potential attractive returns to investors. However, their complex structure and involvement of multiple parties can make them difficult

Volta Finance

Stability and Performance of European CLOs

European collateralized loan obligations (CLOs) have proved remarkably stable since S&P Global Ratings rated its first transaction in 2000. During this time, European CLOs have resisted several upheavals, including the global financial crisis, the dotcom bubble,

Volta Finance

The rise of CLOs in the global financial system

The integrity of the global financial system has been endangered by a number of external shocks to the economy over the past 20 years, underscoring the necessity for proper portfolio diversification to safeguard investors from negative market

Volta Finance

The Importance of CLOs in Risk Management and Diversification

In an ever-changing landscape of modern financial services, collateralized loan obligations (CLOs) and structured asset-backed security have become crucial in shaping investment strategy, risk management and capital allocation. CLOs – structured security backed by assets –

Volta Finance

A guide to high-yield fixed income alternatives

When investors think of bonds, their minds immediately go toward U.S. Treasuries or other IOUs issued by corporations. Maybe municipal securities enter their minds. But these are just the tip of the iceberg with regard to

Volta Finance

Record CLO sales boost Wall Street buyout financing

Wall Street bankers looking to raise fresh financing for multi-billion dollar buyouts are getting a boost from the record start to the year from a critical part of the leveraged loan universe. Sales of collateralized loan