Franklin Templeton announced the launch of the Franklin BSP CLO ETF (YCLO), an actively managed exchange-traded fund designed to seek capital preservation and current income through investments primarily in investment-grade collateralized loan obligation (CLO) debt tranches across U.S. and European markets.
The fund is managed by Franklin Advisers, Inc., with sub-advisory services provided by Benefit Street Partners, Franklin Templeton’s alternative credit specialist. YCLO leverages BSP’s Structured Credit platform, established in 2009, which manages more than $9 billion in assets under management.
The investment strategy is led by Cathy Bevan and Brandon Chao, who each bring more than 20 years of industry experience and have worked together for nearly a decade. The team focuses on credit underwriting, portfolio construction, and active risk management while investing across both U.S. and European CLO markets.
According to the company, YCLO is designed to provide investors with access to a floating-rate asset class that may offer income generation, structural protections, and diversification benefits within fixed income portfolios. The fund’s ability to invest across multiple geographies is intended to provide broader investment opportunities and relative value insights.
Franklin Templeton said the launch also expands its ETF platform into the CLO market, combining BSP’s structured credit expertise with Franklin Templeton’s distribution capabilities and ETF infrastructure.
Franklin Templeton, founded in 1947, provides investment management solutions across public and private markets. Benefit Street Partners, a wholly owned subsidiary of Franklin Templeton, manages approximately $93 billion in assets under management, including assets managed by Apera Asset Management, and focuses on private debt, real estate debt, structured credit, and liquid loan strategies.
KEY QUOTES:
“YCLO provides access to a compelling institutional asset class that offers floating-rate income, structural protections, and diversification potential within traditional fixed income portfolios. What differentiates YCLO is the ability to invest dynamically across both U.S. and European CLO markets. We believe our global presence gives us a broader opportunity set and a deeper relative value perspective.”
Cathy Bevan, Global Head of BSP Structured Credit
“The CLO market and its investor base have continued to grow, while performance across CLO securities has become more differentiated in today’s market environment. This creates opportunities for BSP to apply its global relative value approach and active risk management within an ETF structure.”
Brandon Chao, CFA, Portfolio Manager, BSP Structured Credit
“We are proud to bring BSP’s first ETF to market and expand Franklin Templeton’s ETF platform into CLOs. YCLO combines BSP’s deep CLO expertise with Franklin Templeton’s scale, distribution reach and ETF capabilities, giving advisors and investors access to an actively managed approach to CLO debt. As market conditions continue to evolve, we believe strategies like YCLO can play an important role in helping clients access differentiated sources of income through a familiar and efficient ETF structure.”
Jeff Masom, Head of U.S. Distribution and Global Wealth Management Private Markets, Franklin Templeton
