The SPDR® SSGA Apollo IG Public & Private Credit ETF (PRIV) was introduced today by State Street Global Advisors, the asset management division of State Street Corporation (NYSE: STT). PRIV, which is run by the State Street Global Advisors Active Fixed Income Team, gives all investors clear, tradeable access to an exchange-traded fund (ETF) that invests in investment-grade public credit and private credit, including asset-based finance, and aims to provide current income and risk-adjusted returns.
All investors, regardless of size, have historically been able to access market possibilities through the ETF vehicle. All investors now have clear access to formerly less liquid market segments because of exchange-traded funds (ETFs),” stated Anna Paglia, chief business officer of State Street Global Advisors. “As PRIV continues its mission of democratizing access to private markets, we have collaborated with Apollo to offer a liquidity solution within PRIV,” she continued.
By investing mostly in investment-grade debt instruments, including a mix of public and private credit such as asset-based finance and corporate lending, PRIV aims to optimize risk-adjusted returns and generate current income. PRIV builds a portfolio that aims to overweight the most appealing industries and issuers by combining a bottom-up security selection process with a risk-aware, macroeconomic top-down approach. An affiliate of Apollo Global Management, Inc. (NYSE: APO), Apollo Global Securities, LLC, may source private credit instruments for PRIV to invest in (“Apollo”).
Large institutional investors looking for higher yields and more diversification potential have been the main drivers of the recent ten-year boom in investment demand for exposure to private markets. Retail investors looking to gain exposure to this expanding asset class through more affordable investment vehicles that are transparent, tradable, and offer daily liquidity are anticipated to be part of the next wave of private market demand, according to State Street Global Advisors.
With the help of its credit business and a larger origination ecosystem that includes 16 independent platforms, Apollo reported more over $220 billion in origination in 2024. According to Apollo, there is a $40 trillion market for private loans that may be addressed.2.
Visit our dedicated landing zone to learn more about PRIV, the function of private credit in a portfolio, and instructional materials.
Concerning State Street Global Advisors
State Street Global Advisors has been providing services to governments, organizations, and financial advisors worldwide for more than 40 years. As pioneers in index and ETF investing, we are always developing new investment strategies with a strict, risk-aware approach based on research, analysis, and market-tested experience. As a result, we now oversee US $4.72 trillion4, making us the fourth-largest asset manager in the world.
- The management of Apollo Global as of December 31, 2024.
- As of September 2024, Apollo Global Management is at the forefront of private investment-grade credit.
- As of 12/31/23, the Pensions & Investments Research Center.
- This amount, which is based on the ETF AUM of $1,577.74 billion USD as of December 31, 2024, includes about $82.19 billion USD in gold assets related to SPDR products, for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as the exclusive marketing agent. There is an affiliation between State Street Global Advisors and SSGA FD. Note that all AUM has not been audited.
Notice: Apollo is not the Fund’s distributor, marketer, sponsor, or investment advisor. Apollo has a contractual agreement with the Fund that requires it to provide the Fund with firm bids on asset-backed and corporate finance instruments that Apollo sources (collectively, “AOS Investments”) at specific intervals every day. Additionally, Apollo must repurchase AOS Investments that the Fund has acquired at the firm bid price that Apollo offers, subject to contractual levels that are intended to cover the estimated seven-day stress redemption rate as of this date. Apollo is not the sole buyer of AOS Investments; the Fund may try to sell AOS Investments to other counterparties as well.
Vital Risk Data
Among the risks associated with investing is the possibility of principle loss.
Market Risk: The investments made by the Fund are vulnerable to shifts in the overall state of the economy, general market swings, and the risks that come with market investing. Economic development or recession, fluctuations in interest rates, inflation, shifts in the perceived or actual creditworthiness of issuers, and general market liquidity are just a few of the variables that can cause investment markets to be volatile and investment prices to fluctuate significantly.
Like stocks, exchange-traded funds (ETFs) are vulnerable to investment risk, fluctuate in market value, and trade at prices that are higher or lower than their net asset value. ETF costs and brokerage charges will lower returns.
Active management is used to oversee the Fund. The Fund may lose money if the adviser’s assessments of a certain industry, security, commodity, or investment strategy turn out to be inaccurate regarding its attractiveness, relative value, or possible appreciation. The Adviser’s investment strategies and choices cannot be guaranteed to provide the intended outcomes.
Debt Securities: Market fluctuations, interest rate changes, the actual or perceived inability or unwillingness of issuers, guarantors, or liquidity providers to make scheduled principal or interest payments, or illiquidity in the debt securities markets, can all cause the value of debt securities to rise or fall. Risks include low rates of return from reinvesting securities during periods of declining interest rates or repayment by issuers with higher coupon or interest rates, as well as the risk of low income due to declining interest rates.
Compared to investing in investment grade fixed income securities, purchasing high yield fixed income assets, sometimes referred to as “junk bonds,” is seen as speculative and carries a higher risk of principal and interest loss. Because the issuer’s credit quality may alter, there is a higher chance of default or price fluctuations with these lower-quality debt securities.
Securities that have not been registered under the Securities Act and are therefore subject to regulatory restrictions on resale are known as privately-issued securities. Since they are not traded on well-established markets, privately issued securities may be illiquid, challenging to value, and prone to significant value swings. Restrictions on these securities’ ability to be sold could hurt their marketability and make it more difficult for the Fund to sell them quickly and at fair prices. Numerous factors, such as total leverage, the amount of leverage senior to the security in question, the issuer’s size, cash flow variability, the quality of the assets securing debt, and the extent to which those assets cover the subject company’s debt obligations, can affect the credit quality of private credit. Furthermore, due to general economic conditions, particular market developments, or other uncontrollable circumstances, there can be no guarantee that the Adviser will be able to secure all of the investment opportunities it identifies for the Fund or that the size of an investment opportunity available to the Fund will be as large as the Adviser would desire.
A fund that lacks diversification may make investments in a comparatively small number of issuers. Compared to shares of more diversified funds, the value of shares in non-diversified funds may be more volatile.
Intellectual Property Information: State Street Global Advisors has a license to utilize the S&P 500® Index, which is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”). Standard & Poor’s Financial Services LLC is the owner of the trademarks S&P®, SPDR®, S&P 500®, US 500, and the 500. Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and has been licensed for use by S&P Dow Jones Indices. S&P DJI has also been granted a license to use these trademarks, and State Street Global Advisors has sublicensed them for specific uses. S&P DJI, Dow Jones, S&P, or their respective affiliates do not sponsor, endorse, sell, or promote the fund, and none of these parties make any claims about the wisdom of investing in such product(s) or assume any responsibility for any errors, omissions, or disruptions of these indices.
State Street Global Advisors Funds Distributors, LLC, a distributor and indirect fully owned subsidiary of State Street Corporation, is a member of FINRA and SIPC. State Street Corporation and its affiliates may be mentioned in relation to State Street. The SPDR ETFs pay some State Street affiliates to perform services.
