In today’s episode, special guest Mark Jarosz, and your host, Zayla Saunders, take us to the top of the cash flow waterfall to provide must-know answers to your collateralized loan obligation, or CLO, questions.

Zayla Saunders is a Senior Associate of Online Distribution at BMO Global Asset Management (GAM). She is joined on the podcast by Mark Jarosz, Lead, Private Credit, Alternatives, at BMO GAM. Recorded live on Wed, May 21, 2025.

ETFs:

• BMO AAA CLO ETF (ZAAA)
• BMO AAA CLO ETF (Hedged Units) (ZAAA.F)
• BMO AAA CLO ETF (USD Units) (ZAAA.U)

Collateralized Debt Obligation (CDO): A structured financial product where a bank or other entity pools together various types of debt, like mortgages, bonds, and loans, and repackages them into tranches, or classes of securities, based on their risk level.

Correlation: A statistical measure of how two securities move in relation to one another. Positive correlation indicates similar movements, up or down together, while negative correlation indicates opposite movements.

There have historically been zero defaults on AAA tranches through the 30-year history of CLOs. Source:Bloomberg, as of December 31, 2024. Past default rates do not guarantee future default rates.

Source: Size of the CLO market and CLO ETF market, Bank of America, factbook March, 2025.

Disclaimers:

Please see the full CLO ETFs disclaimers here.

The viewpoints expressed by the speakers represent their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.

The portfolio holdings are subject to change without notice. They are not recommendations to buy or sell any particular security.

This podcast is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

“BMO (M-bar roundel symbol)” is a registered trademark of Bank of Montreal, used under licence.