Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTOmor Ibne EhsanSat, July 18, 2026 at 5:32 PM GMT+2 4 min readQuick ReadCLOZ holds mezzanine CLO tranches that reset coupons with short-term rates, delivering a 7% yield and 11% annualized returns since 2023.Unlike AAA alternatives like JAAA, CLOZ pays meaningfully higher yield but moves with stocks in a credit event, not against them.Rate cuts have already trimmed CLOZ monthly distributions from $0.22 to $0.17 per share, and every future Fed cut reduces the coupon further.Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.Most bond funds spent the last three years dreading the phrase "higher for longer." The Eldridge BBB-B CLO ETF (NYSEARCA:CLOZ) was engineered to enjoy it. CLOZ owns floating-rate mezzanine tranches of collateralized loan obligations, meaning its coupons reset with short-term rates that the Fed has parked at 3.75% since December 11, 2025.Yalcin Sonat / Shutterstock.comThat is the fund's entire identity. You are being paid to sit a couple of rungs down the CLO credit ladder while short rates stay elevated.What You Are Actually BuyingA CLO is a diversified pool of senior secured business loans sliced into tranches by risk. The AAA piece at the top absorbs losses last and yields the least. The equity piece at the bottom eats losses first and, in good years, prints double-digit returns. CLOZ deliberately plants itself in the middle, targeting USD-denominated CLO tranches rated between BBB+ and B-. Institutional credit investors have favored this zone for years because the yield pickup over AAA is real and the structural protections above the equity tranche are meaningful.The return engine has two parts. Floating-rate coupons on the underlying CLO debt reset off short-term benchmarks, so the 3-month Treasury near 3.84% flows straight into distributions. On top of that base rate sits a credit spread that widens when investors panic and tightens when they relax. Own the mezz, collect both._________________________________What's Your Number...?Here's a question most people 5y from retirement can't answer: at your current savings rate, how much do you need, and how long will it actually last? A good advisor can put a date on that in a single meeting. SmartAsset's free quiz matches you with up to three fiduciary advisors serving your area, so you can get YOUR retirement number now (sponsor)__________________________________________Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info