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a couple of ETFs are now in this space. .The first two exchange-traded funds to hold private credit loans began trading earlier this week, with issuers racing to tap into one of the investing world’s hottest trends.The BondBloxx Private Credit CLO ETF (ticker PCMM) and the Virtus SEIX AAA Private Credit CLO ETF (PCLO) launched on Tuesday. The actively managed funds will invest at least 80 per cent of their assets in collateralised loan obligations backed by a pool of loans made to private companies, according to filings.PCMM charges an annual expense ratio of 68 basis points, while PCLO’s fee is 29 basis points.Both firms bill their funds as being the first of their kind to offer such exposure, underscoring the urgency of becoming first movers in a nascent corner of the $US11 trillion ETF industry.The new fund launches follow a surprise filing from Apollo Global Management and State Street in September for an ETF that will include private credit investments originated by Apollo.While going the CLO route isn’t quite as direct, given that the funds are buying bonds that are in turn backed by pools of private credit loans, issuers are eager to capitalise on the label, according to Todd Sohn of Strategas.“Private anything is all the rage,” said Sohn, ETF strategist at Strategas. “The CLO space is quite popular, now just labelling it differently. I think the real avalanche comes pending what happens with State Street and Apollo.”The new funds from BondBloxx and Virtus bring together two popular trends. Assets in CLO-focused ETFs have ballooned to more than $US19 billion after the first such fund set sail in 2020. That surge has been lead by explosive growth in the $US16 billion Janus Henderson AAA CLO ETF (JAAA).The private credit industry has also been growing at an impressive clip. McKinsey estimates that private markets are now worth more than $US13 trillion, after posting 20 per cent annual growth since 2018
a couple of ETFs are now in this space.
.
The first two exchange-traded funds to hold private credit loans began trading earlier this week, with issuers racing to tap into one of the investing world’s hottest trends.
The BondBloxx Private Credit CLO ETF (ticker PCMM) and the Virtus SEIX AAA Private Credit CLO ETF (PCLO) launched on Tuesday. The actively managed funds will invest at least 80 per cent of their assets in collateralised loan obligations backed by a pool of loans made to private companies, according to filings.
PCMM charges an annual expense ratio of 68 basis points, while PCLO’s fee is 29 basis points.
Both firms bill their funds as being the first of their kind to offer such exposure, underscoring the urgency of becoming first movers in a nascent corner of the $US11 trillion ETF industry.
The new fund launches follow a surprise filing from Apollo Global Management and State Street in September for an ETF that will include private credit investments originated by Apollo.
While going the CLO route isn’t quite as direct, given that the funds are buying bonds that are in turn backed by pools of private credit loans, issuers are eager to capitalise on the label, according to Todd Sohn of Strategas.
“Private anything is all the rage,” said Sohn, ETF strategist at Strategas. “The CLO space is quite popular, now just labelling it differently. I think the real avalanche comes pending what happens with State Street and Apollo.”
The new funds from BondBloxx and Virtus bring together two popular trends. Assets in CLO-focused ETFs have ballooned to more than $US19 billion after the first such fund set sail in 2020. That surge has been lead by explosive growth in the $US16 billion Janus Henderson AAA CLO ETF (JAAA).
The private credit industry has also been growing at an impressive clip. McKinsey estimates that private markets are now worth more than $US13 trillion, after posting 20 per cent annual growth since 2018
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