Franklin Templeton, Fidelity Launch CLO ETFs to Capture High Rates as Private Credit Default Risks Rise
Updated
Updated · Bloomberg · Jun 13
Franklin Templeton, Fidelity Launch CLO ETFs to Capture High Rates as Private Credit Default Risks Rise
2 articles · Updated · Bloomberg · Jun 13
Summary
Franklin Templeton, Barings, Fidelity Investments and Janus Henderson have rolled out ETFs that buy higher-rated slices of collateralized loan obligations, widening retail access to the market.
Those funds are pitched as a way to benefit from elevated interest rates while avoiding some of the default risk building in private credit.
CLOs pool hundreds of risky corporate loans, but their top-rated tranches are structured to absorb losses only after lower-ranking investors are wiped out.
The launches underscore a broader push by Wall Street to package institutional credit exposure for retail investors as rates stay high and stress in private debt draws scrutiny.