Whats the benefit to investors of investing in CDOs?
• Through one single investment a CDO investor gains exposure to a diversified pool of assets. • Depending on an investor’s risk-return appetite, an investor can chose between a series of instruments ranging from AAA rated bonds to Secured Income Notes (“SINs”). • Because CDO funds are structured products investing in a diversified pool of assets, the actual risk-return characteristics of the senior and mezzanine notes and SINs issued by CDOs usually have a very low correlation with other assets.
