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Yahoo
27-06-2025
- Business
- Yahoo
The Debate Over Private Assets in ETFs Heats Up
Private assets have drawn investor dollars with their promise of a higher rate of return in exchange for illiquidity. Putting those assets in a daily, liquid vehicle has drawn skepticism from some in the exchange-traded fund industry. The other concern is transparency. Private assets can be opaque, and that lack of visibility also runs counter to the basic model of an ETF, which is being able to always look at the fund's holdings. With an increasing number of new ETFs being launched that hold securitized collateralized loan obligations (CLOs) and the SPDR SSGA IG Public & Private Credit ETF (PRIV), which owns direct loans, debate over these private-asset funds will continue. Dave Nadig, an independent ETF expert and a skeptic of putting private assets in ETFs, said that while investors can think about these private-credit-type ETFs as being run by experienced active bond managers, it comes down to trust that the managers understand these bonds. 'I'm not anti-private credit in these vehicles, but you are making an enormous trust bet,' he said. Nadig spoke at the Morningstar Investment Conference in Chicago on Thursday. Joanna Gallegos, co-founder and COO at BondBloxx, which issues the BondBloxx Private Credit CLO ETF (PCMM), said there's investor demand for private assets as public markets become more correlated. 'What we hear from clients is that they want access to the income-producing side of private assets,' she said. She added that, at the current stage of ETF innovation, CLOs are natural fits. In PCMM, each of the CLOs it holds have independent ratings and CUSIPs where investors can see the price. 'Here's a space … in private credit that should be very natural for you to understand how to assess what you're buying. It should be simple to see the risk characteristics of its return and its yield,' she said. Nadig concurred but said his concern is with funds such as PRIV, where Apollo Global Management is sourcing the direct loans for State Street. 'Ask yourself, why do you think you're getting the best of X, whether it's the triple-A-rated best of best or whether it's junk-bond equivalents. I think that's a real problem,' he said. Nadig added he's happy to see the conversation about how to structure private assets in ETFs. The challenge is going to be helping people understand how these funds fit into a portfolio. Gallegos said every ETF is an evolution of a new process, pointing to how people were concerned with emerging market ETFs were launched in the early | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-03-2025
- Business
- Yahoo
State Street's PRIV Misses Mark on Private Credit Promise
The recently launched SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) garnered widespread attention for its groundbreaking approach to private credit investing, but analysis reveals a gap between its marketing and reality. According to a research report from CFRA, the fund received Securities and Exchange Commission approval to exceed the standard 15% limit on illiquid securities stipulated in the Investment Company Act of 1940. Investors anticipated PRIV would hold between 10% and 35% of its portfolio in private credit instruments. Despite regulatory permission to increase private credit exposure beyond traditional limits, PRIV currently holds just 5% of its portfolio in private credit assets, according to CFRA, with the vast majority in highly liquid public securities that offer little differentiation from conventional fixed-income ETFs. The fund's current portfolio differs from the private credit focus many expected. CFRA's analysis shows 42% of PRIV's exposure is in public corporate debt, with another 19% in securitized agency mortgages and 15% in Treasuries or cash instruments. "While this ensures that its portfolio is liquid, it also makes it less differentiated relative to other fixed-income funds, since its constituents are widely held by mutual funds and other ETFs," wrote Aniket Ullal, head of ETF research at CFRA, and Sourav Srimal, senior vice president of solutions at SOLVE, in their joint report. The liquidity profile further underscores how conventional PRIV's current holdings are. Over 75% of the portfolio is classified as liquid, with 62% rated as highly liquid, based on Trade Reporting and Compliance Engine data aggregated by SOLVE. This liquidity composition contrasts with other private credit options like the BondBloxx Private Credit CLO ETF (PCMM) and VanEck BDC Income ETF (BIZD), which have fewer holders of their underlying securities, the report shows. On average, PRIV's constituents are held by 110 other mutual funds, exchange-traded funds or insurance firms, while PCMM's holdings average just four other holders, the report stated. Only 11% of PRIV's constituents were held by fewer than 10 other investment vehicles. The fund's yield reflects its conventional portfolio composition. PRIV's published yield to maturity, as of March 3, was 5.44%, lower than BIZD's 9.02% and PCMM's 7.44% 30-day SEC yields. PRIV's arrangement with Apollo Global Securities, which contractually agreed to provide intraday executable bids on private credit investments, appears largely unused given the fund's current highly liquid portfolio composition, according to the CFRA report. The report suggests that the ETF's composition could evolve: "Going forward, it seems likely that this actively managed ETF will start to take on more private credit that is sourced from Apollo." The agreement requires Apollo to publish three executable quotation sheets daily to buy PRIV-held securities sourced from Apollo, with quotes "no worse than those offered to similarly situated clients," according to the CFRA | © Copyright 2025 All rights reserved
Yahoo
08-03-2025
- Business
- Yahoo
State Street's PRIV Misses Mark on Private Credit Promise
The recently launched SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) garnered widespread attention for its groundbreaking approach to private credit investing, but analysis reveals a gap between its marketing and reality. According to a research report from CFRA, the fund received Securities and Exchange Commission approval to exceed the standard 15% limit on illiquid securities stipulated in the Investment Company Act of 1940. Investors anticipated PRIV would hold between 10% and 35% of its portfolio in private credit instruments. Despite regulatory permission to increase private credit exposure beyond traditional limits, PRIV currently holds just 5% of its portfolio in private credit assets, according to CFRA, with the vast majority in highly liquid public securities that offer little differentiation from conventional fixed-income ETFs. The fund's current portfolio differs from the private credit focus many expected. CFRA's analysis shows 42% of PRIV's exposure is in public corporate debt, with another 19% in securitized agency mortgages and 15% in Treasuries or cash instruments. "While this ensures that its portfolio is liquid, it also makes it less differentiated relative to other fixed-income funds, since its constituents are widely held by mutual funds and other ETFs," wrote Aniket Ullal, head of ETF research at CFRA, and Sourav Srimal, senior vice president of solutions at SOLVE, in their joint report. The liquidity profile further underscores how conventional PRIV's current holdings are. Over 75% of the portfolio is classified as liquid, with 62% rated as highly liquid, based on Trade Reporting and Compliance Engine data aggregated by SOLVE. This liquidity composition contrasts with other private credit options like the BondBloxx Private Credit CLO ETF (PCMM) and VanEck BDC Income ETF (BIZD), which have fewer holders of their underlying securities, the report shows. On average, PRIV's constituents are held by 110 other mutual funds, exchange-traded funds or insurance firms, while PCMM's holdings average just four other holders, the report stated. Only 11% of PRIV's constituents were held by fewer than 10 other investment vehicles. The fund's yield reflects its conventional portfolio composition. PRIV's published yield to maturity, as of March 3, was 5.44%, lower than BIZD's 9.02% and PCMM's 7.44% 30-day SEC yields. PRIV's arrangement with Apollo Global Securities, which contractually agreed to provide intraday executable bids on private credit investments, appears largely unused given the fund's current highly liquid portfolio composition, according to the CFRA report. The report suggests that the ETF's composition could evolve: "Going forward, it seems likely that this actively managed ETF will start to take on more private credit that is sourced from Apollo." The agreement requires Apollo to publish three executable quotation sheets daily to buy PRIV-held securities sourced from Apollo, with quotes "no worse than those offered to similarly situated clients," according to the CFRA | © Copyright 2025 All rights reserved
Yahoo
05-02-2025
- Business
- Yahoo
Active, Income, Crypto ETFs Shine Among etf.com Award Noms
Actively managed, dividend, and cryptocurrency ETFs dominate the list of nominees for the 2025 Awards, in a year that saw record-breaking investment levels and increased momentum in certain fund sectors. editorial staff narrowed the field down from more than 700 nominations to create a competitive short list of just under 100. This year's awards have six new categories, including Active ETF of the Year, one of this year's most popular categories. Nominees include dividend, fixed income, and categorized loan obligation (CLO) funds. The category is a complement to Best New Active ETF, which has six nominees: the BondBloxx Private Credit CLO ETF (PCMM), Calamos Laddered S&P 500 Structured Alt Protection ETF (CPSL), Fidelity Yield Enhanced Equity ETF (FYEE), NEOS Nasdaq-100 High Income ETF (QQQI), Roundhill S&P 500 0DTE Covered Call Strategy ETF (XDTE), and the Vanguard Core Tax-Exempt Bond ETF (VCRM). But all eyes are on the ETF of the Year category, which Bloomberg Senior ETF analyst and awards judge Eric Balchunas described as a "tough choice." "Strong nominee list this year," Balchunas tweeted. "Going to be a tough choice. ETF equiv [sic] of the 1994 Oscars- Pulp Fiction, Shawshank Redemption and Forrest Gump were all up for best picture." Nominees in this category include spot bitcoin giant IBIT, the iShares Bitcoin Trust, which is favored to win by users on social media. IBIT is joined by VOO, Vanguard's S&P 500 ETF, which is just a few billion away from unseating SPY (the SPDR S&P 500 ETF Trust) as the largest ETF in the world. Range Nuclear Renaissance Index ETF (NUKZ) also joins the nominees in the category, one of 2024's best-performing equity funds. The Janus Henderson AAA CLO ETF (JAAA) rounds out nominations in this category. The nominations exemplify a record year for exchange-traded funds, which had more than $1 trillion in inflows last year. Actively managed funds continued to see increased interest in 2024, even as passive investing continues to gain market share. All told, active funds pulled in 25% of total inflows last year. ETF industry heavyweights comprise the list of Lifetime Achievement Award nominees. Appearing on the nomination list again is Bob Pisani, senior markets correspondent at CNBC, and Joanna Gallegos, co-founder and CEO of BondBloxx. Other nominees include Rob Arnott, partner and chairman of Research Affiliates; Bruce Bond, co-founder and CEO of Innovator Capital Management; and George Milling-Stanley, chief gold strategist at State Street Global Advisors. Cryptocurrency made its first big appearance in this year's awards with the launch of spot bitcoin ETFs at the start of 2024. The Cryptocurrency ETP category included Bitwise Bitcoin ETF (BITB), fellow spot bitcoin ETF behemoth IBIT (the iShares Bitcoin Trust), the Grayscale Bitcoin Mini Trust (BTC), Schwab Crypto Thematic ETF (STCE), and the STKD Bitcoin & Gold ETF (BTGD). Since launch, spot bitcoin ETFs have pulled in $30 billion in inflows in 2024, primarily through the iShares Bitcoin Trust (IBIT). Dividend ETFs also make multiple appearances on the short list as investors seek income-generation. Income ETFs represented roughly 10% of ETF nominees for the 2025 awards. Inflows in the fund type leaped in 2024, bringing in more than $30 billion, up from the $3 billion brought in by the asset class by the end of 2020. Award winners will be announced at the in-person Awards gala April 23, 2024, at Tribeca Rooftop in New York | © Copyright 2025 All rights reserved Sign in to access your portfolio
