BlackRock Launches First UCITS Active ETF on AAA CLOs, Expanding Alternative Fixed-Income Offerings

Brett Pybus, Co-Head of European iShares at BlackRock

BlackRock takes a significant step in expanding its active ETF platform with the launch of the iShares € AAA CLO Active UCITS ETF (EUCL). This new fund represents the first dedicated Collateralized Loan Obligation (CLO) strategy offered by the investment giant through a UCITS ETF vehicle, aiming to capitalize on a perceived attractive fixed-income opportunity in current market conditions.

EUCL is an actively managed ETF seeking to generate total return through income and capital appreciation. It primarily invests in AAA-rated CLO tranches—the highest credit tier considered safest within CLO structures. A distinctive feature is the floating-rate nature of these instruments, whose coupons reset quarterly. According to BlackRock, this offers “built-in protection against interest rate volatility”, making them potentially compelling in an uncertain rate environment.

The ETF leverages BlackRock’s established CLO team, active since 2010. The team currently manages over $33 billion in third-party CLO tranche investments—a track record the firm highlights to underscore its expertise in this complex market segment.

Saffet Ozbalci, Global Head of Structured Credit at BlackRock, emphasized the current appeal of CLOs: “CLOs represent an attractive opportunity in fixed income today, combining high credit quality with low correlation to traditional asset classes.” He added: “This makes them a key tool for investors seeking to diversify income sources while managing risk in today’s evolving market context.”

Brett Pybus, Co-Head of European iShares at BlackRock, highlighted the ETF access advantage: “Active ETFs have earned their place in portfolios by offering investors a broader range of strategies and differentiated returns through the convenience of the ETF wrapper.” Regarding EUCL, Pybus stated: “By providing access to AAA CLOs, investors can gain institutional-grade credit exposure through a transparent, liquid vehicle—leveraging BlackRock’s CLO team expertise—without the complexity of analyzing individual CLO deals.”

EUCL provides efficient access to the AAA CLO segment while offering classic ETF advantages:

• Daily liquidity

• Underlying transparency

• Cost efficiency (0.25% Total Expense Ratio)

• Continuous exchange trading (listed on Xetra)

The ETF joins the global iShares platform, which boasts 29 years of experience³ and $4.7 trillion in assets under management⁴ across 1,400+ ETFs.