Best CLO ETFs in 2026

This page ranks the 24 collateralized loan obligation ETFs with reported assets, largest first, with trailing distribution rates topping out at 7.0% as of July 2026. A CLO is a pool of senior secured loans to businesses, sliced into tranches by who gets paid first. The tranche, not the fund family, is what determines your risk — and it splits this list cleanly in two.

AAA funds (JAAA, PAAA, CLOA, ACLO) sit at the top of the payment waterfall and typically yield in the mid-4s; no AAA-rated CLO tranche has defaulted historically. Mezzanine funds (JBBB, CLOZ, CLOX, BCLO) buy BBB and B tranches for meaningfully more income and meaningfully more credit risk. Because the underlying loans pay floating rates, both types reset with short-term rates rather than losing value when rates rise — the opposite of the duration risk in a bond fund or a preferred ETF.

A collateralized loan obligation buys a diversified pool of senior secured loans made to businesses, then divides the cash flows into tranches. The AAA tranche is paid first and absorbs losses last; the BBB and B tranches are paid later, absorb losses earlier, and are compensated with a higher coupon. That structure, not the manager, is the main thing separating the funds on this list. AAA CLO ETFs — JAAA, PAAA, CLOA, and a growing field of copies — have become a genuine cash-alternative category, paying more than T-bill funds while sitting on collateral that has historically never defaulted at the AAA level. Mezzanine funds like JBBB, CLOZ, and CLOX reach down the stack for one to two points of extra yield and take real credit risk to get it. Two features apply to both. First, the underlying loans pay floating rates, so distributions rise and fall with short-term rates and the funds carry very little duration — when rates climb, these hold value while fixed-rate bond funds fall. Second, the risk that matters is liquidity, not just default: CLO tranches are traded over the counter, and in a credit selloff prices can drop faster than the underlying loans deteriorate. Size and trading volume are worth weighing alongside yield, which is why this list ranks by assets.

This list covers the investable CLO ETF universe rather than a filtered subset:

• Every active ETF whose name or stated objective identifies it as a collateralized loan obligation fund qualifies, across both AAA and mezzanine tranches
• Funds are ranked by assets under management, largest first — CLO ETFs vary enormously in size, and liquidity matters in a credit selloff
• Funds with no reported AUM (newly filed or not yet trading) are excluded, as are liquidated funds