CLOZ ETF Offers 7% Yield Amid Higher Rates Risks

The Eldridge BBB-B CLO ETF (CLOZ) has delivered a 7% yield and 11% annualized returns since 2023 by holding mezzanine CLO tranches that reset coupons with short-term rates. Monthly distributions for CLOZ have decreased from $0.22 to $0.17 per share due to rate cuts. The fund is designed to maintain benefits as short-term rates, currently at 3.75% since December 11, 2025, remain elevated. This structure could attract institutional credit investors seeking higher yields in a rising interest rate environment, making it significant for those looking to optimize bond fund investments.