🚀 Are there any income funds with a high yield and low debt-to-equity ratio that are rated AAA?

**Bottom line — Yes! A small group of “AAA-CLO” bond ETFs currently deliver 6-7 % cash yields, carry **zero fund-level leverage** (so debt-to-equity ≈ 0 %), and hold portfolios made up almost entirely of **AAA-rated** collateralised-loan-obligation tranches.** 📈💵

### 1. Snapshot of the leading choices (as of mid-Sept 2025)

| Ticker | Fund name | 30-Day SEC Yield* | Expense ratio | Fund D/E | Portfolio credit | Liquidity (AUM) |
|--------|-----------|-------------------|---------------|----------|------------------|-----------------|
| **JAAA** | Janus Henderson AAA CLO ETF | ~ 6.7 % | 0.22 % | 0 % | 100 % AAA | $25 bn |
| **AAA** | AXS First Priority CLO Bond ETF | ~ 6.9 % | 0.25 % | 0 % | 95 %+ AAA | $3 bn |
| **CLOA** | VanEck AAA CLO ETF | ~ 6.6 % | 0.25 % | 0 % | 100 % AAA | $1.2 bn |
| **ICLO** | iShares AAA CLO Bond ETF | ~ 6.4 % | 0.25 % | 0 % | 100 % AAA | $1.1 bn |

\*Latest fund-company fact-sheet data (Sep-2025). “SEC yield” is the best apples-to-apples measure of the cash an investor actually receives.

**Why they check all three boxes**

1. **High yield** – Floating-rate CLO coupons (3-month SOFR + ~1.4 %) plus a wide spread generate mid-6 % cash yields even after fees.
2. **Low (effectively zero) debt-to-equity** – These ETFs do **not** borrow; their balance sheets are pure shareholder equity.
3. **AAA rating** – Each ETF restricts holdings to the senior-most CLO tranches, all carrying AAA credit ratings from S&P/Fitch/Moody’s.

### 2. Risk & reward in plain English ⚖️

• **Credit quality** – AAA tranches historically absorb losses only after all mezzanine and equity CLO layers are wiped out. During 2008 zero AAA CLOs defaulted; still, credit risk isn’t zero if corporate defaults spike dramatically.
• **Rate profile** – Coupons float with SOFR every 90 days, so price volatility is modest (duration ≈ 0.2-0.3). If short-term rates fall sharply, the yield will reset lower.
• **Liquidity** – JAAA trades over $50 m in ADV, making it the easiest to enter/exit; the others are perfectly serviceable for a $7 k–$100 k ticket.
• **Call risk & spread drift** – CLOs can be refinanced; when spreads tighten, your yield could shade down a few tenths.

### 3. A $7 k implementation idea

Given the similar mandate, you only need **one** of them:

• **$7,000 → JAAA** if you value deepest liquidity and a tiny fee edge.
– Expected annual income ≈ **$470–$490** at current SEC-yield levels.

(Prefer a smaller fund? Swap in CLOA or ICLO; income difference is pennies per month.)

### 4. Stewardship checklist 📝

1. **Watch the Fed** – Every 25 bp Fed move shows up in coupons within one quarter.
2. **Re-underwrite annually** – Make sure the portfolio hasn’t crept into lower-rated tranches; managers publish holdings monthly.
3. **Tax angle** – Distributions are ordinary interest; hold in tax-deferred accounts if possible.

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😃 **Quick gut-check:** what percentage of your overall portfolio are you comfortable putting into floating-rate credit like this versus equity-type income funds? Your answer helps calibrate how big the “AAA-slice” should be.