Franklin Templeton Launches YCLO, an Actively Managed Investment Grade CLO ETF

Key Terms

collateralized loan obligation financial

A collateralized loan obligation (CLO) is a financial product that bundles many corporate loans into a single pool and then sells pieces of that pool to investors, with each piece offering different levels of risk and return. Think of it like a large box of varied loans sliced into portions so investors can choose higher safety with lower yield or higher reward with more risk; CLO performance matters because it concentrates credit and interest-rate risk and affects income stability for holders.

clo financial

A CLO (Collateralized Loan Obligation) is a financial vehicle that pools many corporate loans and sells slices of that pool to investors, with each slice carrying a different mix of risk and return—think of it as a loan-based fund cut into safe and risky pieces. It matters to investors because CLOs can offer higher yields than traditional bonds but expose buyers to borrowers’ defaults and changes in interest rates, so understanding which slice you own is key to gauging potential reward and loss.

etf financial

An ETF, or exchange-traded fund, is like a basket of different investments such as stocks or bonds that you can buy or sell easily on the stock market, just like a regular share. It allows people to invest in many companies at once, making it a simple way to grow savings without picking individual stocks.

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aum financial

Assets under management (AUM) is the total market value of investments that a financial firm or fund manages on behalf of clients. Investors watch AUM like the size of a shop: larger AUM can mean more fee revenue, greater market influence and perceived stability, while rapid changes in AUM signal growing popularity or redemptions that may affect future earnings and investment strategy.

floating-rate income financial

Income from investments whose interest payments move up or down with market interest rates, so the payment you receive adjusts periodically rather than staying fixed. That matters to investors because it can protect returns when rates rise (like an adjustable-rate mortgage that increases payments with rates) but makes future cash flows less predictable and exposes holders to credit and reinvestment risks if rates fall or the borrower defaults.

structured credit financial

Structured credit is a way of bundling many loans or debt claims together and slicing that bundle into pieces with different levels of risk and return, like cutting a cake into layers where the bottom slice takes most of the crumbs and the top slice stays neat. Investors buy these slices to chase higher income or to shift credit risk, so understanding which layer you own, how the loans behave together, and how easy the slice is to sell matters for potential return and loss.

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Actively managed ETF invests predominantly in investment grade CLO debt tranches across U.S. and European markets

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Templeton, a global investment leader, today announced the launch of the Franklin BSP CLO ETF (YCLO or the Fund), an actively managed CLO ETF designed to seek capital preservation and current income by investing predominantly 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 (BSP), Franklin Templeton’s alternative credit specialist investment manager.

The Fund draws on the scale and depth of BSP’s Structured Credit platform, which was founded in 2009 and manages over $9 billion of AUM. The strategy is led by Cathy Bevan and Brandon Chao, who each have more than 20 years of industry experience and have worked together for nearly a decade. The team invests using rigorous credit underwriting, portfolio construction, and active risk management.

“YCLO provides access to a compelling institutional asset class that offers floating-rate income, structural protections, and diversification potential within traditional fixed income portfolios,” said Cathy Bevan, Global Head of BSP Structured Credit. “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.”

“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,” said Brandon Chao, CFA, Portfolio Manager, BSP Structured Credit. “This creates opportunities for BSP to apply its global relative value approach and active risk management within an ETF structure.”

“We are proud to bring BSP’s first ETF to market and expand Franklin Templeton’s ETF platform into CLOs,” said Jeff Masom, Head of U.S. Distribution and Global Wealth Management Private Markets at Franklin Templeton. “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.”

For more information, please visit Franklin Templeton ETFs and ETPs.

About Franklin Templeton

Franklin Templeton is a trusted investment partner, delivering tailored solutions that align with clients’ strategic goals. With deep portfolio management expertise across public and private markets, we combine investment excellence with cutting-edge technology. Since our founding in 1947, we have empowered clients through strategic partnership, forward-looking insights, and continuous innovation – providing the tools and resources to navigate change and capture opportunity.

To learn more, visit franklintempleton.com and follow us on LinkedIn.

Franklin Resources, Inc. [NYSE: BEN]

About Benefit Street Partners L.L.C.

Benefit Street Partners L.L.C. (“BSP”) is an alternative credit pioneer with $93 billion¹ in assets under management (including Apera). It seeks to deliver attractive, risk-adjusted returns through its deep specialism, long-term relationships and global reach. A wholly owned subsidiary of Franklin Templeton, BSP is focused on credit. Through its disciplined, solutions-oriented approach, BSP unlocks opportunities across market cycles and geographies. The firm manages strategies spanning private debt, real estate debt, structured credit, and liquid loans. For more information, visit bspcredit.com.

1. BSP’s $93 billion AUM is an estimate as of 3/31/2026 and includes Apera Asset Management.

Important Information

ETFs and ETPs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs/ETPs net asset value. Brokerage commissions and ETF/ETP expenses will reduce returns.
ETF/ETP shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs/ETPs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.

All investments involve risks, including possible loss of principal. Collateralized Loan Obligations (CLOs) are complex investments and not suitable for all investors. CLOs carry risks largely dependent on the type of collateral held by the special purpose entity (SPE) and the tranche of the CLO in which the Fund invests. Although the Fund will invest primarily in investment grade-rated tranches, ratings may be downgraded, and even highly rated tranches can face defaults in stressed markets. CLOs are managed by independent entities responsible for selecting and managing the underlying loan collateral, adding another layer of risk. An investment in a CLO can lose value. Floating-rate loans and debt securities are typically rated below investment grade and are subject to greater risk of default, which could result in loss of principal. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The portfolio is, or could become, non-diversified and may invest in a relatively small number of issuers, which may negatively impact the performance and result in greater fluctuation in value. The fund is newly organized, with a limited history of operations. These and other risks are discussed in the fund’s prospectus.

Franklin Distributors, LLC Member FINRA/SIPC

View source version on businesswire.com: https://www.businesswire.com/news/home/20260603808922/en/

Franklin Resources, Inc.
Media Relations: Eloise Cappelletti (917) 663 6558,
eloise.cappelletti@franklintempleton.com

Source: Franklin Resources, Inc.