July was a positive month for both leveraged loans and CLOs, with carry serving as the primary driver of returns across the CLO capital stack, even as spreads widened for senior tranches and compressed for mezzanine tranches. Despite renewed conflict with Iran and related market volatility, leveraged loans returned 0.79% during the month, supported by improving risk appetite, rising secondary prices, and higher interest rates. Against this backdrop, we believe the CLO asset class has long-term value which is supported by strong technical dynamics and higher-quality collateral and may offer attractive yield opportunities.

For Institutional Investor use only. Past performance is not indicative of future results. All data as of month-end unless otherwise noted. This information is presented for informational purposes only. This is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole investment making decision. CLO, Bank loan, corporate securities, and high yield bonds involve risk of default on interest and principal payments or price changes due to changes in credit quality of the borrower, among other risks. All material is compiled from sources believed to be reliable, but accuracy cannot be guaranteed. The opinions expressed herein are based on current market conditions and are subject to change without notice.