Nest BlackRock iShares AAA CLO Active ETF Vault

The vault takes stablecoin deposits and allocates them into tokenized exposure to BlackRock's iShares AAA CLO Active ETF (CLOA), an actively managed fund that seeks to provide capital preservation and current income by investing primarily in USD-denominated AAA-rated collateralized loan obligations (CLOs).

A CLO is a securitization backed by a diversified pool of senior secured corporate loans that are typically floating-rate. The pool's cash flows are split into tranches of varying seniority, with the AAA tranche sitting at the top of the capital stack. Subordinated tranches below AAA absorb any losses ahead of it. CLOA targets this most senior layer, which has historically offered higher yield than comparably-rated investment grade corporate bonds with low interest rate sensitivity.

The strategy is designed to deliver floating-rate yield from a diversified pool of AAA-rated CLO tranches managed by BlackRock's Global Fundamental Credit team.

Income generated by the underlying CLO holdings is automatically reinvested into the vault, with returns reflected directly in the vault token price rather than distributed, providing passive exposure to senior secured corporate credit income.