Key Takeaways
- • Fidelity Investments launched two actively managed CLO ETFs on Nasdaq on February 12, 2026: Fidelity AAA CLO ETF (FAAA) and Fidelity CLO ETF (FCLO), both available commission-free to individual investors and advisors.
- • FAAA normally invests at least 80% of its assets in AAA-rated CLOs, while FCLO invests the majority of its assets in CLOs rated BBB+ to B-.
- • Management fees for both ETFs are waived for the first 12 months; afterward, gross expense ratios will be 0.20% for FAAA and 0.45% for FCLO.
- • Fidelity's exchange-traded lineup now comprises 77 ETFs and ETPs with $154 billion in assets under management.
- • Harley Lank, head of High Income & Alternatives, and Robin Foley, head of Fixed Income, framed the launch as a response to investor demand for new return and diversification sources.
Summary
Fidelity Investments has launched two active exchange-traded funds that give investors access to the collateralized loan obligation (CLO) market, according to a Business Wire release dated February 12, 2026. The Fidelity AAA CLO ETF (FAAA) and Fidelity CLO ETF (FCLO) are listed on the Nasdaq Stock Market and are available commission-free to individual investors and financial advisors through Fidelity's online brokerage platforms.
Both funds seek to generate income by investing in CLOs. FAAA normally invests at least 80% of its assets in CLOs rated AAA, while FCLO invests the majority of its assets in CLOs rated from BBB+ to B-. The firm noted that the funds carry risks associated with CLOs, including liquidity, interest-rate, credit, event, and call risk, as well as the risk of default of underlying assets. The release also states that the funds may use cash rather than in-kind transfers for creations and redemptions, which may make them less tax-efficient than some ETFs.
Harley Lank, head of High Income & Alternatives at Fidelity, said investors are seeking new return and diversification opportunities and that Fidelity has deep credit research capabilities and a long history in the CLO space as both issuer and investor. Robin Foley, head of Fixed Income, said the funds deliver straightforward access to an often complex market.
Portfolio management for FAAA is led by long-tenured co-managers Dave DeBiase, Rob Galusza, and John Mistovich, who have more than 65 years of collective experience at Fidelity. Michelle Liu is lead portfolio manager of FCLO, bringing 20 years of structured credit experience, with Dave DeBiase as co-manager.
Fees are waived for the first 12 months. Thereafter, the gross expense ratios will be 0.20% for FAAA and 0.45% for FCLO. With the launch, Fidelity's exchange-traded lineup consists of 77 ETFs and ETPs with $154 billion in assets under management, including 29 actively managed equity ETFs and 15 fixed income ETFs. Fidelity cited its $2.3 trillion fixed income business as a foundation for the credit offering.
Both funds seek to generate income by investing in CLOs. FAAA normally invests at least 80% of its assets in CLOs rated AAA, while FCLO invests the majority of its assets in CLOs rated from BBB+ to B-. The firm noted that the funds carry risks associated with CLOs, including liquidity, interest-rate, credit, event, and call risk, as well as the risk of default of underlying assets. The release also states that the funds may use cash rather than in-kind transfers for creations and redemptions, which may make them less tax-efficient than some ETFs.
Harley Lank, head of High Income & Alternatives at Fidelity, said investors are seeking new return and diversification opportunities and that Fidelity has deep credit research capabilities and a long history in the CLO space as both issuer and investor. Robin Foley, head of Fixed Income, said the funds deliver straightforward access to an often complex market.
Portfolio management for FAAA is led by long-tenured co-managers Dave DeBiase, Rob Galusza, and John Mistovich, who have more than 65 years of collective experience at Fidelity. Michelle Liu is lead portfolio manager of FCLO, bringing 20 years of structured credit experience, with Dave DeBiase as co-manager.
Fees are waived for the first 12 months. Thereafter, the gross expense ratios will be 0.20% for FAAA and 0.45% for FCLO. With the launch, Fidelity's exchange-traded lineup consists of 77 ETFs and ETPs with $154 billion in assets under management, including 29 actively managed equity ETFs and 15 fixed income ETFs. Fidelity cited its $2.3 trillion fixed income business as a foundation for the credit offering.
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