Adams Wealth Dumps Nearly 65,000 Shares of CLOA — Here's What That Means for This High-Yield ETF

Key Points

• Adams Wealth reduced its CLOA holdings by 64,583 shares in the second quarter, a transaction valued at an estimated $3.3 million.

• The transaction represented 0.6% of the firm's total reported holdings, according to the 13F.

• After the sale, Adams Wealth still owned 258,224 shares valued at $13.41 million as of June 30.

• CLOA now accounts for about 2.6% of the firm's reported holdings as of June 30, placing it outside the top five positions.

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On Thursday, Adams Wealth Management disclosed that it reduced its position in the iShares AAA CLO Active ETF by nearly 65,000 shares—cutting about 20% of its holdings in the fund.

What happened

Utah-based Adams Wealth Management reduced its position in the iShares AAA CLO Active ETF(NASDAQ:CLOA) by 64,583 shares during the second quarter, according to a U.S. Securities and Exchange Commission (SEC) filing on Thursday. The firm held 258,224 shares after the transaction, valued at $13.41 million at the end of the quarter.

What else to know

CLOA now represents nearly 2.6% of the firm's reportable assets under management, which totaled $525 million, as of June 30.

Top holdings after the filing:

• SCHX: $64.57 million (12.3% of AUM)
• JBBB: $50.65 million (9.7% of AUM)
• IVV: $29.88 million (5.7% of AUM)
• EUAD: $18.23 million (3.5% of AUM)
• ICVT: $14.83 million (2.8% of AUM)

As of Wednesday, shares were priced at $51.96 and up .4% this year, lagging the S&P 500 by about 12 percentage points.

CLOA’s trailing 12-month dividend yield was 5.61% as of Thursday.

Company overview

Company snapshot

The iShares AAA CLO Active ETF's investment strategy targets at least an 80% allocation to U.S. dollar-denominated AAA-rated collateralized loan obligations (CLOs). The portfolio is composed primarily of investment-grade CLO tranches, may invest in CLOs of any maturity, and is non-diversified at the fund level.

As a result, CLOA provides exposure to a portfolio of high-quality, AAA-rated CLO securities and aims to deliver attractive income. The fund is positioned as a specialized fixed income solution for investors seeking enhanced yield while maintaining a strong credit profile.

Foolish take

Adams Wealth’s move to cut back on the iShares AAA CLO Active ETF (CLOA) isn’t necessarily a red flag, but it does offer a chance to zoom out on how the fund is performing. Trimming positions is common in active portfolio management, and even after the sale, CLOA still makes up a meaningful slice of Adams’ portfolio.

For investors, the bigger story is CLOA’s recent track record. The ETF's total return this year has lagged well behind the S&P 500, but its steady 5%-plus dividend is what keeps investors holding. This dynamic is a reminder of what CLOA is—and what it isn’t. It’s a niche fund focused on AAA-rated CLOs, essentially built to generate reliable income from high-quality debt rather than chase equity-like growth. In fact, since its launch in 2023, the fund’s price is up just 3%. That said, its dividend yield is well above the S&P 500 average of just over 1%.

In other words, the trade highlights the push and pull between yield and performance. For institutions like Adams and their clients, CLOA provides income and capital preservation, so investors should keep expectations realistic: This is a slow-and-steady fixed income product, not a growth stock.

Glossary

Assets Under Management (AUM): The total market value of investments managed by a fund or firm on behalf of clients.
13F reportable assets: Securities that institutional investment managers must disclose quarterly to the SEC if managing over $100 million.
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Collateralized Loan Obligation (CLO): A security backed by a pool of loans, typically to businesses, divided into tranches by risk level.
AAA-rated: The highest possible credit rating, indicating extremely low risk of default.
Tranche: A portion or slice of a security, each with different risk, return, or maturity characteristics.
Dividend yield: Annual dividends paid by an investment divided by its current price, shown as a percentage.
Trailing twelve-month (TTM) dividend yield: Dividend yield calculated using dividends paid over the most recent 12 months.
Non-diversified fund: A fund that invests a large portion of assets in a limited number of securities or sectors.
Investment-grade: Bonds or securities rated BBB/Baa or higher, considered lower risk of default.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.

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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.