Important Disclosures
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.
VanEck CLO Opportunities Fund (“CLOO”) Risks
The fund is subject to a high degree of risk and volatility and could result in significant losses, including the loss of a substantial portion or all of your investment.
An investment in the Fund may be subject to risks which includes, among others, CLO, CLO equity tranche, debt securities, high yield securities, income, valuation, privately issued securities, covenant lite loans, SOFR, investment sourcing, defaulted securities, syndicated loan, correlation, liquidity (quarterly repurchases and underlying investments), leveraging, CLO manager, investment focus, newly issued securities, extended settlement, private credit, underlying fund, business development company, foreign currency, derivatives, repurchase policy, distribution and RIC status, new fund, market, active management, non-diversified, potential conflicts of interest, and minimal capitalization risks, all of which may adversely affect the Fund. Debt securities may be subject to additional risks, such as liquidity, interest rate, floating rate obligations, credit, call, and extension risks.
The Fund is a closed-end management investment company structured as an “interval fund,” and its shares are not listed on any securities exchange and are not expected to have a secondary market, so an investment should be considered illiquid. Liquidity is provided only through quarterly repurchase offers conducted pursuant to Rule 23c-3 under the Investment Company Act of 1940, which generally permit the Fund to offer to repurchase between 5% and 25% of outstanding shares per quarter, as determined by the Fund’s Board. Repurchase requests may be oversubscribed and prorated, meaning you may be unable to sell all (or any) of your shares when desired and may have to hold shares for an indefinite period, and repurchase offers may be suspended or postponed in limited circumstances.
The Fund invests primarily in CLO debt and CLO equity (including BBB-rated and lower tranches and unrated equity). CLOs are complex and may be difficult to value and trade and are exposed to leveraged-loan credit risk, including borrower defaults and reduced recoveries. Investments in CLO equity and other junior tranches are subject to structural subordination and “first-loss” risk, including the diversion of cash flows to senior tranches after certain collateral quality test failures, and may result in a partial or total loss of investment.
The Fund may employ leverage, which may magnify gains and losses and increase volatility of the Fund’s net asset value. The Fund’s distributions, if any, are not guaranteed and may be paid from sources other than net investment income, including return of capital or borrowings, which may reduce the Fund’s net asset value and capital available for future investment.
VanEck AA-BB CLO ETF (CLOB) and VanEck CLO ETF (CLOI) Risks
An investment in the Funds may be subject to risks which include, but are not limited to, risks related to Collateralized Loan Obligations (CLO), debt securities, foreign currency, foreign securities, investment focus, newly-issued securities, extended settlement, affiliated fund investment, management and capital preservation, derivatives, currency management strategies, cash transactions, market, Sub-Adviser, operational, authorized participant concentration, no guarantee of active trading market, trading issues, fund shares trading, premium/discount, liquidity of fund shares, non-diversified, seed investor, and new fund risks, all of which may adversely affect the Funds. Investments in debt securities may expose the Fund to other risks, such as risks related to liquidity, interest rate, floating rate obligations, credit, call, extension, high yield securities, income, valuation, privately-issued securities, covenant lite loans, default of the underlying asset and CLO manager risks, all of which may impact the Fund’s performance. Derivatives may involve certain costs and risks such as liquidity, interest rate, and the risk that a position could not be closed when most advantageous.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Funds carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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