August PCE comes in below forecasts, sharpening Guggenheim's active CLO ETF pitch

The August personal consumption expenditures price index, released Wednesday, September 30, put headline inflation at 3.4% and core inflation at 3.0% on an annual basis, both below what analysts had expected. It landed after the Fed raised rates earlier in September, cutting against what many fixed income investors had been positioned for next: another hike before the end of the year. Soft PCE readings give the central bank room to revise its plans for shifting rates, particularly if the data stays consistent in the months ahead.

ETF Trends used that setup to restate the case for collateralized loan obligations, and for the actively managed wrapper in particular. CLOs pay floating-rate coupons, so when policy rates are high the yields on offer are high too; the second half of the argument is about credit, because cooling inflation reads as a positive signal for credit quality, which the article says tends to pull CLO default rates down. The two halves reinforce each other: the coupon keeps paying whether or not the Fed moves again, while the underlying credit gets the benefit if it doesn't. It is a pitch aimed at investors who spent early September watching hike odds past two-thirds and a 10-year at 4.78 percent, its highest since January 2025.

Guggenheim's Investment Grade CLO ETF, GCLO, is the vehicle. Per ETF's records, the fund launched on Aug. 20 and aims at current income and total return through an actively managed CLO portfolio; the team blends top-down and bottom-up work, arguing the mix reaches undervalued CLOs a passive indexed strategy would miss while leaving room to reposition as the rate picture shifts. When Guggenheim widened its active income suite in August with the CLO fund and a covered-call equity fund, both landed at 35 basis points.

A single PCE print does not alter the loans inside GCLO; it alters the relative case for credit over duration. This publication has argued that the record fixed income ETF year, $459 billion running through the front end as of late September, is a parking trade; the first hike since 2023 keeps that trade in place at the short end. A CLO ETF asks for a different risk, because the investor takes the credit of leveraged borrowers rather than the policy rate itself, and the cooling-inflation argument for taking it is explicitly conditional: it holds if the PCE data stays consistent in the months ahead.

Underneath the rate question sits a distribution question: Guggenheim has been widening this shelf deliberately, and pricing the two newest funds identically makes them easy to sell side by side, but an active CLO ETF competes for the same income sleeve as every other floating-rate and derivative-income product already on platform shelves. GCLO launched six weeks ago, and the case for it now rests on the next inflation prints agreeing with the last one.