SPDR SSGA IG Pub & Priv Crdt ETF Stock Price, News & Analysis

SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) is an actively managed exchange traded fund launched by State Street Global Advisors, the asset management business of State Street Corporation. According to State Street Global Advisors, the fund is designed to offer transparent, tradeable access to investment grade private credit markets through the ETF structure, alongside exposure to investment grade public credit.

The ETF is managed by the State Street Global Advisors Active Fixed Income Team. The fund seeks to maximize risk-adjusted returns and provide current income by investing primarily in investment grade debt securities. Its mandate includes a combination of public and private credit, and it may hold asset-based finance and corporate lending instruments that meet its investment grade criteria.

Investment approach and portfolio construction

State Street Global Advisors describes PRIV as using a risk-aware, macroeconomic top-down approach combined with bottom-up security selection. This means the portfolio is constructed with attention to broad economic conditions and sector views, while also analyzing individual securities. The fund aims to overweight sectors and issuers that the adviser considers most attractive within its investment universe.

PRIV may invest in private credit instruments sourced by Apollo Global Securities, LLC, an affiliate of Apollo Global Management, Inc. Apollo has entered into a contractual agreement with the fund under which it is obligated to provide firm bids on certain asset-backed and corporate finance instruments, referred to as AOS Investments, and is required to repurchase those AOS Investments at the firm bid price subject to contractual limits. The sale of AOS Investments to Apollo is not exclusive, and the fund may seek to sell such investments to other counterparties.

Role of private credit within the ETF structure

State Street Global Advisors notes that investment demand for private markets exposure has grown, particularly among large institutional investors seeking higher yields and diversification potential. PRIV is positioned as a way for a broader range of investors to access investment grade private credit through an ETF that is tradable, transparent, and offers daily liquidity. The fund’s focus on investment grade private credit, including asset-based finance and corporate lending, reflects this objective.

The ETF structure allows PRIV to trade on an exchange like a stock, and shares may trade at prices above or below the fund’s net asset value. The sponsor highlights that brokerage commissions and ETF expenses can affect investor returns, and that the fund’s active management means its performance depends on the adviser’s judgments about sectors, securities, and strategies.

Key risks highlighted by the sponsor

State Street Global Advisors emphasizes that investing in PRIV involves risk, including the risk of loss of principal. The fund is exposed to market risk, where changes in economic conditions, interest rates, inflation, perceived creditworthiness of issuers, and market liquidity can affect the value of its holdings. As a fund focused on debt securities, PRIV is also subject to risks related to fluctuations in interest rates, reinvestment risk, and the credit quality of issuers, guarantors, or liquidity providers.

The sponsor notes that privately issued securities held by the fund may be illiquid, difficult to value, and subject to wide fluctuations in value. These securities are not registered under the Securities Act and can be subject to legal restrictions on resale, which may affect their marketability and the fund’s ability to dispose of them promptly at prices the adviser considers reasonable. The characteristics of private credit, including leverage levels, issuer size, variability of cash flows, and the quality and coverage of assets securing the debt, can influence risk.

State Street Global Advisors also indicates that the fund may be non-diversified, which can result in greater volatility if the portfolio is concentrated in a relatively small number of issuers. In addition, the adviser acknowledges that it may not be able to secure all investment opportunities it identifies for the fund, or that the size of available opportunities may be smaller than desired due to economic or market conditions or other factors.

Relationship with Apollo

The information provided by State Street Global Advisors clarifies that Apollo is not a sponsor, distributor, promoter, or investment adviser to PRIV. Instead, Apollo’s role is defined by a contractual agreement under which it provides firm bids on specified private credit instruments and may repurchase those instruments under agreed terms. This arrangement is intended to support liquidity for certain private credit holdings within the fund’s portfolio.

State Street Global Advisors references Apollo’s broader credit origination activity and its view on the potential addressable market for private credit as context for the fund’s strategy. However, these references are descriptive and do not change the fund’s stated objective of seeking risk-adjusted returns and current income through investment grade public and private credit exposure.

About State Street Global Advisors and SPDR ETFs

State Street Global Advisors presents itself as an asset manager with a long history serving governments, institutions, and financial advisors, and as a pioneer in index and ETF investing. The SPDR ETF family, which includes PRIV, is distributed by State Street Global Advisors Funds Distributors, LLC, an indirect wholly owned subsidiary of State Street Corporation and a member of FINRA and SIPC. Certain State Street affiliates provide services to SPDR ETFs and receive fees for those services.

According to the sponsor, investors considering PRIV should review the fund’s prospectus or summary prospectus for detailed information on objectives, risks, charges, and expenses, and should understand that the fund is not insured by the FDIC, is not guaranteed by a bank, and may lose value.