CLO ETFs: Growth, Liquidity and Market Impact

The panel explores the rapid growth of CLO ETFs, particularly AAA-rated products in the US, which have reached approximately $42 billion. Kevin Wong notes European AAA ETFs are growing but still small at around $1.5 billion. Olivier Gozlan raises concerns about lower-rated ETF products potentially amplifying volatility due to forced deployment and redemption dynamics. Michael Htun argues that AAA CLOs are fundamentally undervalued relative to their risk-reward profile and that retail participation could deepen the market, but that education remains a key challenge. The panel also reflects on how the market has quickly found clearing levels during recent volatility events.