CLO performance was positive in September across most tranches, with carry the primary driver of returns. Loans outperformed credit peers in September, benefiting from their floating-rate structure as yields rose sharply amid broadly elevated inflation, high energy prices, and a rate increase by the Federal Reserve. In addition, credit metrics generally improved over the second quarter of 2026, with companies reporting growth in revenue and EBITDA. Secondary prices diverged in September, with software loans gaining slightly and non-software loans declining in value. Overall, we remain constructive on the long-term value of the CLO asset class, supported by strong technical dynamics and higher-quality collateral.

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.