Investing in CLOs: Key Considerations for Today's Market
Overview
The fundamentals of CLO investing are largely unchanged since the earliest days of the market. Analysts must still make judgments about the three key components of any CLO: portfolio, structure, and manager. Each of these components presents a complex mix of risk and value that must then be evaluated holistically—in aggregate. When investing in CLOs, it is best to follow a rigorous process and framework that allows for consistency while also adapting to different investment strategies and market conditions. At the heart of this process are key questions intended to reveal risk and value.