Today, State Street Global Advisors and Apollo Global Management’s private credit ETF began trading on the NYSE Arca. The fund in question is the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV).
PRIV looks to offer risk-adjusted return and resilient current income. The fund has a net expense ratio of 70 basis points.
Many advisors and investors have been keeping an eye out for this fund ever since State Street announced its partnership with Apollo in September. Much of this interest is particularly focused on how PRIV provides private credit exposure through the ETF wrapper.
At least 80% of the fund’s net assets are invested in a selection of investment grade debt. Significantly, PRIV includes a crucial share of private equity exposure within its portfolio. Access to the private equity is provided specifically through Apollo’s team.
Beyond the private credit component, PRIV is balanced out with a robust mix of fixed income options. Notably, the fund may also hold up to 20% of its assets in high yield bonds.
Opportune Time for Private Credit
PRIV’s innovative structure can help investors find new routes to gain access to private credit. This fund comes online at a critical junction in which many advisors seek to build their private credit exposure.
During VettaFi’s Fixed Income Symposium, attendees were polled on their interest in learning about private credit access through the ETF wrapper. Notably, over 60% of attendees responded that they were very or somewhat interested in learning more about private credit ETFs.
“The launch of the new SPDR SSGA Apollo IG Public & Private Credit ETF marks the deepest entry we’ve seen yet from ETFs into the private asset space,” added Kirsten Chang, Senior Industry Analyst at VettaFi. “It’s an exciting new chapter for State Street Global Advisors, which has been a proven pioneer of partnerships. The 10-35% investment in direct private credit gives them a good amount of leeway, and can easily encompass more tradable private assets like structured debt.”
Within its ETF library, State Street offers a broad selection of fixed income solutions for investors. One of the largest State Street ETFs, the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), has over $37 billion in assets under management.
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