O'Donnell Financial Bets $6.8 Million on AAA CLO ETF, Signaling Confidence in Income Strategy
In a notable move underscoring institutional appetite for high-quality income, O'Donnell Financial Services, LLC reported a significant increase in its position in the BlackRock ETF Trust II - iShares AAA CLO Active ETF (NASDAQ:CLOA). A recent SEC filing reveals the firm acquired an additional 131,914 shares in Q4 2025, a transaction valued at approximately $6.83 million. This purchase elevates O'Donnell's total holdings to 139,782 shares, making CLOA a 2.47% component of its reportable assets under management.
The iShares AAA CLO Active ETF provides targeted exposure to a portfolio of U.S. dollar-denominated collateralized loan obligations (CLOs) rated AAA. Managed actively by BlackRock's structured credit team, the fund aims to optimize yield while adhering to strict credit standards. As of late January 2026, CLOA traded at $52.02, boasting an annualized dividend yield of 5.32% and paying distributions monthly. While its one-year total return of 5.5% has trailed the S&P 500, the fund's price stability—sitting just 0.07% below its 52-week high—and low sensitivity to interest rate shifts are key features for income-focused portfolios.
"This isn't a speculative trade; it's a strategic allocation," said Michael Vance, a portfolio manager at Sterling Wealth Advisors. "O'Donnell's move signals a search for yield without a commensurate leap in credit risk. In a market hungry for income, AAA CLO tranches, especially when actively vetted, offer a compelling middle ground between traditional bonds and equity dividends."
However, the strategy faces skepticism. Elara Finch, a fixed-income analyst known for her critical stance, offered a sharper take: "Let's be clear. This is a bet on the continued stability of corporate debt in an uncertain economy. 'AAA' ratings on structured products have betrayed investors before. An active management fee, even at 0.20%, is just a cost center if the underlying CLO market faces a wave of downgrades. This feels like reaching for yield and dressing it up as sophistication."
Other market observers see it as a pragmatic tool. David Chen, founder of a financial research firm, noted, "For advisors building diversified income streams, CLOA's structure provides liquidity and transparency that direct CLO investments lack. O'Donnell's sizable addition suggests they view it as a durable component, not a tactical trade. It's a vote of confidence in BlackRock's active management to navigate the CLO landscape."
The transaction spotlights the evolving fixed-income landscape where ETFs like CLOA bridge the gap for investors seeking alternatives to low-yielding government bonds or volatile high-yield debt. As institutional players like O'Donnell Financial increase their stakes, it may prompt retail investors and smaller firms to reassess securitized credit as a viable portfolio diversifier.
Disclosure: This is an independent market analysis. The author and publishing platform have no position in CLOA. Investors should conduct their own due diligence.