M&G Investments has launched an actively managed Exchange Traded Fund (ETF) investing in European collateralised loan obligations (CLOs), extending its Active ETF platform into a specialist area of fixed income where active management, credit selection and structural analysis are essential to driving returns to investors.
The M&G AAA EUR CLO Active UCITS ETF (the Fund) has launched with €200 million of capital, including €180 million from external investors, and provides investors with targeted exposure to European CLOs.
European CLOs enable exposure to diversified portfolios of senior secured loans to corporate borrowers and can provide attractive income relative to similarly rated assets, while their floating‑rate profile is well suited to a volatile interest rate environment.
The strategy draws on M&G’s 25 years’ experience in private and structured credit, supported by a dedicated in-house credit research team. Differences in structure, documentation, underlying collateral and manager approach mean the CLO market offers opportunities for well-resourced active managers to identify relative value.
The launch reflects M&G’s focus on broadening investor access to its active asset management capabilities and long-standing track record across credit markets. The Fund is designed for professional investors seeking differentiated fixed income exposure and is listed on the London Stock Exchange, Frankfurt’s Xetra and Milan’s Borsa Italiana.
Neil Godfrey, Global Head of Client Group, M&G Investments, adds: “Demand for more targeted European CLO exposure is growing, with investors looking for dedicated, pure-play strategies. This launch reflects our focus on expanding access to M&G’s investment capabilities, particularly through ETF structures that offer a liquid and efficient route for investors.”
Matthew Wardle, Portfolio Manager of the M&G AAA EUR CLO Active UCITS ETF, said: “European CLOs in an ETF format offer investors an efficient way to access the senior loan market through liquid, publicly traded securities. With strong structural protections and a floating‑rate profile, AAA CLOs can provide attractive income with limited interest rate sensitivity and have proven resilient across market cycles.”
