Allocating only to AAA CLO tranches may leave yield and return potential on the table. Investment grade CLO tranches beyond AAAs offer higher income and more attractive total return opportunities without significantly more risk, and can allow advisors to build more robust core bond portfolios. For example, over the past decade, single A rated CLOs have outperformed AAA CLOs by 142 basis points per year with lower volatility than investment-grade corporate bonds. BBB CLOs, meanwhile, provide a 147 bps yield pickup over AAAs while offering higher credit quality than high-yield bonds.