VanEck Launches CLO ETF to Meet Demand for Escalating Rate Alternatives


NEW YORK–(BUSINESS WIRE)–VanEck today announced the launch of the VanEck CLO ETF (CLOI), designed to provide exposure to the $1 trillion Secured Loan Obligation (CLO) market through an actively managed fund and Under-advised by PineBridge Investments, a private, global asset manager focused on high-conviction active investing.

“The growth of the CLO market has been driven by the benefits they offer, including enhanced yields relative to equivalently rated bonds and loans and their considerable structural protections. In the current rising rate environment, coupons rates of CLOs make them particularly attractive,” said William Sokol, Senior ETF Product Manager at VanEck. “We are delighted to launch CLOI with PineBridge at a time when investors seeking enhanced income and risk protection have few options.”

“Our institutional clients have understood the strong value proposition of our CLO strategies for over 20 years, and we look forward to expanding access to this market to a broader investor base,” said Laila Kollmorgen, manager. portfolio manager, CLO Tranche, at PineBridge. Investments. “I look forward to partnering with VanEck on this strategy, which aims to enable investors to combine the value of CLOs with the transparency, liquidity and cost advantages of an ETF.”

CLOI exposure is primarily focused on higher quality CLOs. The ETF combines VanEck’s leadership in income-driven investment solutions with the established active management of PineBridge, a $146 billion privately-held global asset manager focused on active, high-conviction investing in various asset classes. PineBridge is both a CLO manager and an active investor in CLO tranches, and relies on a disciplined and proven investment process with disciplined portfolio construction, robust risk management and a research base at high credit intensity. PineBridge has extensive sub-advisory experience with $13.6 billion in assets sub-advised as of March 31, 2022.

“We believe this new strategy will be an attractive and timely complement to our suite of income solutions, which includes differentiated, enhanced and less correlated sources of return compared to traditional fixed income asset classes. We believe that CLOI will allow investors of all types to potentially benefit from the relatively high income, risk protections and floating rate exposure that CLOs offer,” added Ed Lopez, Head of Product Management at VanEck.

CLOI joins VanEck’s range of innovative alternative income ETFs which also includes the VanEck Investment Grade Floating Rate ETF (FLTR), an ETF that invests in US dollar denominated floating rate notes issued by corporate and rated issuers investment grade, VanEck Fallen Angel High Yield Bond ETF (ANGL), which provides exposure to high yield bonds originally issued as investment grade, and VanEck BDC Income ETF (BIZD), which invests in development companies trading listed on the stock exchange.

CLOI is listed on the NYSE and has a total expense ratio of 0.40%.

About VanEck

VanEck is accustomed to looking beyond the financial markets to identify trends that can create impactful investment opportunities. We were one of the first US asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993 and exchange-traded funds in 2006 – which went on to shape the investment management industry.

Today, VanEck offers active and passive strategies with attractive exposures supported by well-designed investment processes. As of May 31, 2022, VanEck managed approximately $78.3 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from basic investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are powered by extensive bottom-up research and stock selection by portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity and transparency are essential to experienced decision-making regarding the selection of markets and indices underlying VanEck’s passive strategies.

Since our founding in 1955, putting the interests of our clients first, in all market environments, has been central to the firm’s mission.

About PineBridge Investments

PineBridge Investments is a private, global asset manager focused on active, high conviction investing. We leverage the collective power of our experts in every discipline, market and region of the world through an open culture of collaboration designed to identify the best ideas. Our mission is to exceed customer expectations at every level, every day. As of March 31, 2022, the firm managed US$146.0 billion across global asset classes for sophisticated investors around the world.

Important Disclosures

An investment in the VanEck CLO ETF (CLOI) may be subject to risks which include, but are not limited to, Collateralized Loan Obligations (CLOs), Debt Securities, LIBOR Replacement, Foreign Currency, Foreign Securities, Investment Orientation, Newly Issued Securities, extended settlement, affiliated funds, management, derivatives, cash transactions, market, sub-advisor, operational, concentration of authorized participants, new fund, lack of prior active market, trading problems, trading in fund units , premium/discount, liquidity of fund units, non-diversified risks and risks for seed investors. The Fund may also be subject to liquidity, interest rate, floating rate note, credit, call, extension, high yield securities, income, valuation, securities issued by the private sector, covenant lite loans, default of the underlying asset and CLO manager risk, all of which could adversely affect the Fund.

An investment in the VanEck Investment Grade Floating Rate ETF (FLTR) may be subject to risks which include, but are not limited to, foreign securities, foreign currencies, investment in Japanese and UK issuers, credit, interest rates, floating rate, floating rate LIBOR, restricted securities, financial, market, operational, sampling, index tracking, concentration of authorized participants, no guarantee of active trading market, trading problems, passive management, fund share trading, premium risk /discount and liquidity of fund shares, undiversified and concentration risks, all of which may adversely affect the Fund.

An investment in the VanEck Fallen Angel High Yield Bond ETF (ANGL) may be subject to risks which include, but are not limited to, high yield securities, foreign securities, foreign currency, credit, interest rate, restricted securities, market, trading, calling, property Consumer Staples, Consumer Discretionary, Energy, Communications, Index Tracking, Authorized Participant Concentration, No Guarantee Active Trading Market, Trading Issues, Passive Management, Fund Share Trading, Risk of premium/discount and liquidity of fund shares, undiversified and concentration risks, all of which may adversely affect the Fund.

An investment in BDC VanEck Income ETF may be subject to the risks of investments in business development companies (BDC). BDCs invest in private companies and thinly traded securities of public companies, including debt securities of such companies. Generally, there is little public information about private and under-listed companies and there is a risk that investors will not be able to make informed investment decisions. Less mature and smaller private companies involve higher risk than well-established and larger publicly listed companies. Investing in debt carries the risk that the issuer may default on payments or declare bankruptcy and the debt may not be rated by a credit rating agency. Many investments in debt securities in which a BDC may invest will not be rated by a rating agency and will be below investment grade. These investments have essentially speculative characteristics with respect to an issuer’s ability to make interest and principal payments. BDCs may not generate income at all times. Additionally, asset mix and leverage limits can inhibit how BDCs raise capital. The VanEck BDC Income ETF (BIZD) and its affiliates cannot hold more than 25% of the outstanding voting securities of a BDC, which may limit the Fund’s ability to fully replicate its index. An investment in the Fund may be subject to risks which include, but are not limited to, investment restrictions, financial industry, small and mid capitalization companies, equity securities, market, trading, index tracking , concentration of authorized participants, lack of guarantee of an active trading market, trading problems, passive management, trading of fund units, risk of premium/discount and liquidity of fund units, changes specific to the issuer and concentration risks. Small and mid capitalization companies can be exposed to high risks.

Investing involves substantial risks and high volatility, including possible loss of capital. Bonds and bond funds will lose value as interest rates rise. An investor should carefully consider the Fund’s investment objective, risks, charges and expenses before investing. To obtain a prospectus and a summary of the prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and simplified prospectus carefully before investing.

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