This article was co -authored with Sourav Srimal, SVP, Solve.
Recently launched SPDR SSGA APOLLO IG PUBLIC AND PRIVATE CREDIT ETF (Private) It has received significant industry attention because it proposes to hold between 10% and 35% (and potentially even more) of its portfolio in private credit instruments. This would exceed the 15% limit of illegal securities as stipulated by the 22e-4 rule of the 1940 investment company law. The Fund received the approval of the US Insurance and Exchange Commission's departure, despite rules 22e-4 because it entered into an agreement where Apollo “agreed to provide within a day's, firm, executable bids” on private loan investments. Therefore, in theory, investors would expect private exposure to private loan.
However, our Property Property Analysis shows that its private loan exposure was only about 5% since March 3, 2025. Moreover, 5% exposure includes debt of securities, and a business development company issued bonds than individual private corporate debt. About 42% of the private exposure is in public corporate debt, along with 19% in secure agency mortgages and 15% in treasures or cash instruments.
Evaluation of deprivation liquidity based on trade trade data
Prior to the beginning of the private, industry professionals had questions about the liquidity of potential properties, and the Liquidity Agreement of the Fund with Apollo. The deal requires Apollo to publish three sheets of executable quotes a day to buy private securities held in Apollo. These quotes should not be worse than those offered to “similarly placed customers”. Apollo will accept orders up to a daily limit, ie, 25% of fund properties in an Apollo -sourced investment.
Currently, this liquidity issue seems bad as the fund exposure to private debt since March 3, 2025, was extremely low. By that date, over 75% of the portfolio was liquid, with 62% very liquid. To evaluate the liquidity of the underlying portfolio, we have used the reporting engine of reporting and compliance of the trade, collected from the solution. We classified the constituent properties that had traded in the tracking week (five days of trading) as very liquid, those with the latest trade, but outside the five-day window as average, and the rest as illicit. We then proved these categories of liqueurism based on trade using the counting quota in the one-month period followed by the Solve database. Using these definitions, only 16% of the portfolio is illicit, and private loans constitute only a small portion of those illegal securities (Figure 2).
Liquidity comparisons with CLO ETF based on constituent holders
Another lens in the liquidity of the constituents of the private is to consider how widely they are held by mutual funds, ETFs or other insurance firms. We compared it privately, based on this criterion, with two collateralized liabilities of the constructed credit ETF – Private Bondbloxx Credit Clo ETF (PCMM) AND Janus Henderson Aaa Clo Etf (Jaaa).
On average (average), the voters in private were held by 110 other mutual funds, ETFs or insurance firms. Only 11% of the ingredients were held by less than 10 other investment vehicles. This indicates that the properties of the private, on average, are owned and widely traded. In contrast, there were three other holders for JAAA components and four per PCMM, average (average). Of the Jaaa properties, 78% were held by less than 10 other mutual funds, ETFs or insurance firms. The corresponding number for PCMM was 88%. These ownership data show that the current properties of the private are liquid but also less differentiated.
It is important to note that private is an active ETF and can change its portfolio over time in favor of private credit instruments sourced from Apollo. This would change the ETF liquidity profile over time.
Alternative options for ETF investors on private loans
Prior to the start of the private, investors had two options for exposure to private loan through ETF. The first option included ETF that holds close to private loans, and the second option included those holding BDCs. Table 2 compares private with PCMM and with Vaneck BDC ETF Income (Bizd). ETF buyers invest in these ETFs to generate yields that are higher than in traditional ETFs of debt. Bizas and PCMMs had a 30-day yield of SEC of 9.02% and 7.44%, respectively, since March 3, 2025. Private has only traded since February 26, 2025, so it has not yet published a 30-day SEC yield. Its yield published to maturity since March 3, 2025, was 5.44%. If it continues to maintain public debt of investment fluid, its yield will be lower than that of the Bizd and PCMM, but this may change if its portfolio composition evolves in maintaining more private debt.
Both securities of private investment classes and PCMMs and have significant lower expenditure ratios than business. BDCs may be expensive to master, resulting in an extremely high cost of 13.33% for busines. BDCs are finance specialty firms that mainly invest in the debt and capital of US small and medium-sized companies. Their debt investments include old, dependent and unsafe loans, while their net capital investments include favorite and common shares. The low liquidity of basic loans presents a challenge, making them more dangerous than traditional debt instruments. The Crowdsourced data of Leveraging Solve found that only 5.5% of BDC loans have observed pre-commercial data, reaching a $ 21.5 billion cost basis. These loans were mostly widely union loans. Given that the total BDC asset under cost management was $ 387.6 billion on March 3, 2025, this means that a large majority of old -secured portfolios, mainly borrowings of the first and second debt, remain uncontrollably.
While evaluating these three categories of ETF Private Credit, investors will have to trade these costs, yields, liquidity and credit risk considerations.
Looking forward
Private was launched with an important forecast of investors because of its unique access to make private loans available to ETF investors. Its Liquidity Agreement with Apollo is seen as an innovative way to address the 15% limit of illegal securities as stipulated by the 22e-4 rule of the 1940 Investment Company law. However, since March 3, 2025, the fund had only 5% of its portfolio in private loans. While this ensures that its portfolio is liquid, it also makes it less differentiated than other fixed income funds, as its ingredients are widely kept by mutual funds and other ETFs. Speaking forward, it seems that this ETF managed will actively begin to receive more private loans derived from Apollo. This will be important for investors to monitor as a future slope in the portfolio in more private debt will change the credit quality and ETF liquidity profile over time.