CLO Collateral Loan Obligations
Collateralized Loan Obligations are collateralized corporate loans that are pooled into a securitization and divided into rated tranches. This creates a highly granular and diversified investment opportunity. The rating spectrum ranges from AAA to NR (Not Rated).
This fund provides access to a high-quality portfolio of collateralized corporate loans based on Euro-denominated Collateralized Loan Obligations (CLO) in the AAA to A rating range and the ability to mix European government bonds. The objective of the Investment Grade Liquid Alternative (IGLA) Fund is to provide a stable return of Euribor + 1.00% p.a. or currently 1.00% p.a. to generate costs. The aim is to minimize volatility and minimize default risks. In addition, this fund gives investors the opportunity to participate in potential future interest rate increases.
Mutual Funds are open to every investor. They are the „standard case“ in German investment law. However, access of different groups of investors may be limited in the fund documents, eg. Retail clients are excluded.
The term investment grade refers to bonds with good to very good credit ratings. This refers to all bonds that can at least have a “BBB / Baa” rating.
A reinvestment fund will not distribute the ordinary and extraordinary income received by the fund to the unit holders. This income flows back into the fund’s assets in order to further increase this and to keep the share price stable.
What are Collateralized Loan Obligations?
Infinigon explains CLOs simple and easy.