Fidelity CLO ETF (FCLO) Stock Price, Quote, News & History | Benzinga

To achieve investment objective, normally investing at least 80 percent of assets in collateralized loan obligations (CLOs). CLOs are a type of asset-backed security. A CLO is typically collateralized by a pool of loans, which may include domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans, and including covenant lite loans, which have few or no financial maintenance covenants. CLOs may charge management fees and other expenses. Cash flows from the CLO are split into two or more portions, called tranches, which can vary in risk and yield. A CLO's more senior tranches are partially protected from defaults, typically have higher ratings and lower yields than their underlying securities and can be rated investment grade. More junior tranches offer the potential for higher yield but are more exposed to loss and have lower ratings.