What do the expense ratios of CLOZ and JAAA indicate about fund costs?

The expense ratios of CLOZ and JAAA reflect the annual cost of managing the respective ETFs, deducted from assets to cover fees. For investors, these figures indicate the cost efficiency of the funds; lower expense ratios can potentially improve net returns over time. CLOZ has a 0.50% expense ratio, while JAAA's is 0.20%, suggesting JAAA may be more cost-effective. A 0.30 percentage-point difference in expense ratios can significantly impact long-term returns for larger investment amounts or extended holding periods. However, this fee comparison is only one aspect to consider when evaluating investments.

What do the net assets of CLOZ and JAAA mean for investors?

Net assets reflect the total value of holdings in CLOZ and JAAA, impacting liquidity and fund stability. With $787 million, CLOZ is smaller, potentially less liquid than JAAA, which holds $31.2 billion. Larger funds can offer better trading conditions and lower transaction costs for investors, while smaller funds may experience greater trading spreads. Additionally, fund size may affect how each ETF responds to market changes and its ability to implement strategies without moving prices. It's important to consider these factors alongside other metrics when comparing ETFs.

A CLO ETF is an exchange-traded fund that invests in collateralised loan obligations (CLOs), a type of securitised bond. These are structured finance products where various corporate loans are pooled together and sold as tranches of debt. The tranches are divided into categories based on their credit quality, with CLOZ (Eldridge BBB-B CLO ETF) investing in BB-rated CLOs, and JAAA (Janus Henderson AAA CLO ETF) investing in AAA-rated CLOs. This means CLOZ focuses on higher-risk, higher-potential return assets, while JAAA focuses on higher-quality, lower-risk assets.

How do dividend yields affect investment choices in CLOZ and JAAA?

The dividend yields of CLOZ and JAAA significantly affect investment choices. CLOZ provides a yield of 7.11%, while JAAA yields 4.88%. This indicates CLOZ potentially offers more income from distributions to shareholders. Yield is a critical consideration for income-focused investors; a higher yield might reflect a higher risk or different credit quality in CLO holdings. However, the yield alone should not be the only decision factor, as the underlying assets' credit risk and the fund's overall strategy must also be evaluated.

What factors should beginners consider when comparing CLOZ and JAAA?

When comparing CLOZ and JAAA, beginners should consider factors such as expense ratios, dividend yields, and fund size. Expense ratios affect net returns, with lower ratios generally being more favorable. Dividend yields influence the income potential from investments. The size of the funds impacts liquidity and trading ease. Other considerations include credit risk associated with the different rating focuses of each fund, operational history, and overall management reputation, all of which help shape investment suitability.

What are the benefits of a low expense ratio in an ETF like JAAA?

A low expense ratio is advantageous because it reduces the costs investors incur for managing an ETF. For JAAA, with an expense ratio of 0.20%, this means that a lesser portion of the fund's returns goes to management fees compared to funds with higher expense ratios. This is particularly significant over the long term, as compounded savings on fees can substantially impact the net investment returns for ETF investors. The difference between JAAA's expense ratio and the 0.50% for CLOZ highlights the potential benefit in cost efficiency.

What are the potential risks of investing in BBB-rated CLOs as seen in CLOZ?

Investing in BBB-rated CLOs, as represented in CLOZ, carries risks including higher default and downgrade potential compared to higher-rated assets. BBB is the lowest investment-grade rating, meaning assets are more vulnerable to economic downturns or corporate stress, potentially causing price volatility. This is balanced by the potential for higher returns from credit risk exposure. Investors should evaluate these risks against the fund's expense ratios and yield offerings, and assess whether the fund's approach aligns with their risk tolerance and investment objectives.

What does the short operational history of CLOZ imply for investors?

The short operational history of CLOZ means investors have limited long-term performance data available, impacting confidence and predictability. With an inception date of January 2023, the fund lacks a track record through various market cycles. In contrast, JAAA, with its October 2020 inception, has a slightly longer history but still does not cover a full credit cycle. A shorter history means less data is available to assess how the ETF's strategy performs under stress, which may be a significant factor in evaluating potential risks and returns for these funds.

How does the credit rating affect the stability of funds like JAAA?

The credit rating of assets in a fund influences its stability and risk profile. JAAA invests in AAA-rated CLOs, which are considered high-quality and low-risk, supporting capital preservation and reducing default risk. Higher-rated bonds generally offer greater resilience against market stress, which contributes to a more stable income stream. However, this stability is accompanied by potentially lower yields, as seen with JAAA's 4.88% dividend yield, compared to lower-rated assets which might offer higher returns but with greater risk.

How do expense ratios impact the long-term value of an investment?

Over long periods, expense ratios can significantly affect investment value. For example, a fund like CLOZ with a 0.50% expense ratio will deduct more from its returns each year compared to JAAA with a 0.20% ratio. The compounding of these fee savings over many years means that even a 0.30 percentage-point difference can impact net returns noticeably, especially on larger investments. This difference makes expense ratios a crucial element to consider when evaluating funds over time, affecting long-term portfolio growth and efficiency.

Which investing goals do CLOZ and JAAA align with?

CLOZ, with its high yield and BBB-rated assets, may align with goals of investors seeking higher income generation, but willing to accept higher credit risk. JAAA, with lower expense ratios and AAA-rated holdings, caters to those prioritising capital preservation and lower risk, seeking steady returns with better cost efficiency. Neither fund is universally superior; each serves different objectives depending on an investor's risk tolerance, income needs, and investment strategy.

What is the significance of a fund's net assets?

A fund's net assets represent its total market value of holdings minus liabilities. For CLOZ and JAAA, this indicates the fund's size and stability. Larger funds like JAAA, with $31.2 billion, tend to have greater liquidity, lower transaction costs for investors, and more trading activity, which facilitates buy and sell orders. Smaller funds like CLOZ, at $787 million, might be more nimble in portfolio management but could face challenges with liquidity and wider bid-ask spreads. These differences influence fund management efficiency and investor accessibility.

CLOZ vs JAAA

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

This page compares CLOZ and JAAA. It examines fees, holdings and dividends, noting how each fund tracks its market. CLOZ (Eldridge BBB-B CLO ETF) has a 0.50% expense ratio, while JAAA (Janus Detroit Street Trust Henderson AAA CLO ETF) has a 0.20% expense ratio. Both are in the Securitized Bond - Focused category. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

CLOZ

Metric

JAAA

0.50%

Expense Ratio

0.20%

7.11%

Dividend Yield

4.88%

$787.00M

Net Assets

$31.17B

204

Holdings

609

Jan 24, 2023

Inception Date

Oct 16, 2020

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Index Tracked

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Securitized Bond - Focused

Fund Category

Securitized Bond - Focused

JAAA costs about $30.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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CLOZ vs JBBB

Compare CLOZ and JBBB ETFs. Analyse expense ratios of 0.50% and 0.47%, dividend yields, net assets, and holdings to understand each securitised bond fund.

CLOA vs JAAA

Compare CLOA and JAAA ETFs. Review fees, holdings, dividends, and tracking methods. Both funds offer exposure to AAA-rated collateralised loan obligations.

Investment Analysis

CLOZ

Pros

High dividend yield of 7.11% offers potentially attractive income generation for investors seeking cash flow.
Focus on BBB-rated CLOs provides potential for higher returns through credit risk exposure compared to higher-rated assets.
Smaller fund size of $787 million may allow for more nimble portfolio management and less market impact when trading.

Considerations

Elevated 0.50% expense ratio reduces net returns significantly compared to lower-cost alternatives.
Short operating history since January 2023 inception limits availability of long-term performance and tracking data.
Investment in BBB-rated credit introduces higher default and downgrade risk, leading to potential price volatility.

JAAA

Pros

Low 0.20% expense ratio helps maximise net returns by minimising ongoing fund management costs.
AAA-rated CLO holdings provide strong credit quality, reducing default risk and supporting capital preservation.
Large net assets of $31.2 billion and reputable Janus Hendersen management support liquidity and fund stability.

Considerations

Lower 4.88% dividend yield may be less attractive to income-focused investors seeking higher cash flow.
Large asset base could limit ability to exploit niche opportunities or generate excess returns in less efficient markets.
Fallback to 2020 inception means fewer market cycle tests for extreme high-yield credit stress than some older assets.

About CLOZ and JAAA

CLOZ (CLOZ)

The Eldridge BBB-B CLO ETF (CLOZ) is an exchange-traded fund designed to provide targeted exposure to Collateralised Loan Obligations, specifically focusing on the 'BBB' to 'B' rated tranches. Launched in January 2023, the fund holds 204 individual securities, allowing investors to access a specific slice of the credit markets that offers higher yields compared to traditional investment-grade bonds. With net assets of USD 787 million and an expense ratio of 0.50%, CLOZ aims to deliver income generation through its current dividend yield of 7.11%. It is categorised under Securitized Bond - Focused, offering investors a structured approach to alternative credit markets. However, potential investors should note that these lower-rated tranches can be more sensitive to economic downturns and credit risk.

JAAA (JAAA)

The Janus Detroit Street Trust Henderson AAA CLO ETF (JAAA) offers investors exposure to a diversified portfolio of Collateralized Loan Obligations rated AAA by major credit agencies. As a securitised bond fund, it focuses on high-quality credit instruments designed to generate income while aiming to preserve capital. With net assets of USD 31.17 billion and 609 holdings, the fund provides broad diversification within the CLO market. It maintains a dividend yield of 4.88%, appealing to income-focused strategies, and operates with a low expense ratio of 0.20%. Launched in October 2020, JAAA is actively managed by Henderson, a Janus Henderson company, leveraging their expertise in fixed-income markets. Investors should note that while AAA ratings indicate high credit quality, values can fluctuate, and income levels are not guaranteed. This fund serves as an educational example of how structured credit products can form part of a balanced investment approach, subject to market conditions and individual suitability.

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CLOZ vs JAAA

Fund Snapshot

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CLOZ

Pros

Considerations

JAAA

Pros

Considerations

About CLOZ and JAAA

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Frequently asked questions

What do the expense ratios of CLOZ and JAAA indicate about fund costs?

What do the net assets of CLOZ and JAAA mean for investors?

What is a CLO ETF?

How do dividend yields affect investment choices in CLOZ and JAAA?

What factors should beginners consider when comparing CLOZ and JAAA?

What are the benefits of a low expense ratio in an ETF like JAAA?

What are the potential risks of investing in BBB-rated CLOs as seen in CLOZ?

What does the short operational history of CLOZ imply for investors?

How does the credit rating affect the stability of funds like JAAA?

How do expense ratios impact the long-term value of an investment?

Which investing goals do CLOZ and JAAA align with?

What is the significance of a fund's net assets?

Fund Snapshot

About CLOZ and JAAA

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