Private Credit ETFs: The Race Heats Up with Virtus and BondBloxx Joining SSGA
Private Credit ETFs Rise in Popularity
Private credit ETFs are quickly becoming a focal point for investors, with Virtus and BondBloxx recently filing applications following State Street Global Advisors (SSGA). Both firms are eager to tap into the lucrative market of private market exposure, specifically targeting credit collateralized loan obligations.
The Competitive Landscape
BondBloxx was quick off the mark, filing on September 12, which was just a day after Virtus. Before these recent developments, SSGA introduced a prospectus for an actively managed private credit fund that collaborates with Apollo Global Management, focusing on a variety of private funds.
- Increased competition among asset managers.
- BlackRock's joint venture with Partners Group.
- The projected jump in retail allocations to private markets.
The Potential Winds of Change
Analysts from Morningstar point out that the first firm to successfully launch an actively managed private credit ETF stands to benefit greatly from incoming retail cash. With previous trends indicating that being first can lead to significant advantages in ETF offerings, the implications for SSGA are substantial. Their research highlighted a potential influx of capital, noting that retail investors are projected to increase their private market allocations from $2.3 trillion in 2020 to $5.1 trillion by 2025.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.