The controversial debut of SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV), a new exchange-traded fund from State Street Global Advisors that intends to invest at least 80% of its net assets in investment-grade debt securities, is raising questions around the Securities and Exchange Commission’s oversight of the listing.
Following a letter in which regulators outlined “significant remaining outstanding issues” with the ETF, State Street said it would comply with the SEC’s 15% cap on illiquid assets. However, a separate filing shows the fund is targeting 10% to 35% exposure to private credit, an asset class generally thought to be non-liquid.
State Street has also promised to rename the fund, since its illiquid holdings are not exclusively tied to alternative asset manager Apollo, as its current title may suggest. Both the asset mix and name changes are not ones typically made after an ETF’s debut.
