BlackRock ETF Trust II iShares AAA CLO Active ETF

CLOA

Market cap $1.57B

Dividend stocks have sharply outperformed AI-related tech stocks since November 2025, reversing a multi-year trend. I see the rally in dividend ETFs like SCHD as overextended, prompting a pause in new purchases despite recent gains. AI is likely to benefit users more than makers, with sectors like banks, energy, and consumer staples positioned as early winners.

I view iShares AAA CLO Active ETF as a low-risk, income-focused holding ideal for defensive investors seeking capital preservation. CLOA's portfolio of AAA-rated, floating-rate CLOs delivers a stable 5.7% yield and strong resilience during market downturns, but offers limited upside in bull markets. The fund's short-dated maturities and lack of equity exposure minimize volatility but guarantee underperformance versus equity indices over extended periods.

O'Donnell Financial bought 131,914 shares of CLOA; trade size estimated at $6.83 million based on average quarterly pricing. Quarter-end position value rose by $6.82 million, a figure reflecting both new purchases and price changes.

Bought 499,926 shares; estimated trade size $25.87 million (based on average quarterly price). Position represents 3.17% of 13F reportable AUM.

Constructing a stable income portfolio in today's volatile market favors CLO bond ETFs with strong yield and minimal drawdown. My recent portfolio revision removed underperforming or volatile funds, and adding top-performing AAA CLO ETFs and a diversified alternative. PAAA, CLOB, and UYLD are highlighted for superior total return, low drawdown, and attractive yield in their respective classes, with UYLD offering a near-treasury risk profile but higher yield.

The iShares AAA CLO Active ETF offers higher yields than money market funds with minimal credit and interest rate risk, focusing on AAA CLO tranches. CLOA provides a 5.1-5.4% yield, extremely low duration risk (0.11 years), and strong portfolio diversification across 373 positions. Management fees are competitive at 0.20%, and over 98% of assets are AAA-rated, ensuring a conservative risk profile within the CLO ETF universe.

On October 6, 2025, INSPIRION Wealth Advisors, LLC reported selling out of BlackRock ETF Trust II - iShares AAA CLO Active ETF (CLOA 0.08%), an estimated $22.62 million transaction.

On Thursday, Adams Wealth Management disclosed that it reduced its position in the iShares AAA CLO Active ETF by nearly 65,000 shares—cutting about 20% of its holdings in the fund.

CLOA is a solid AAA CLO ETF, but JAAA offers a better risk-adjusted return and higher liquidity. A 50/50 mix of JAAA and CLOI matches CLOA's risk with superior returns and improved trading volume. The CLO market outlook is positive, but CLOA's advantages are not unique among peers, making alternatives more compelling.

The 10-Year Treasury yield signals that the market does not expect a recession in the near term. Current yield levels suggest inflation expectations remain elevated compared to recent years. Investors should interpret the bond market as pricing in persistent inflation rather than imminent economic contraction.