State Street files for a new private-debt ETF as initial fund faces delays

An SEC filing from May 23 reveals that the SPDR SSGA Short Duration IG Public & Private Credit ETF is set to invest in a mix of public credit and private credit. This hybrid investment approach is designed to provide investors with a diversified portfolio that includes both traditional corporate bonds and private credit instruments.

The ETF aims to offer investors exposure to a wide range of fixed income assets, including investment-grade corporate bonds, asset-backed securities, and private credit instruments such as direct loans and private placements. By combining public and private credit in a single fund, the ETF seeks to provide investors with a balanced approach to fixed income investing that can offer attractive risk-adjusted returns.

The decision to include both public and private credit in the ETF reflects the growing demand among investors for alternative sources of fixed income. As interest rates remain low and market volatility persists, many investors are seeking out non-traditional fixed income investments that can provide higher yields and lower correlations to traditional asset classes.

Private credit, in particular, has been gaining popularity as institutional and retail investors alike seek to diversify their fixed income holdings. Private credit instruments, such as direct loans and private placements, offer investors the opportunity to access credit markets that are typically less liquid and less transparent than traditional corporate bond markets.

By including private credit alongside traditional corporate bonds in the ETF, investors can benefit from the potential for higher yields and improved portfolio diversification. Private credit instruments have historically exhibited low correlations to traditional asset classes, making them an attractive addition to a well-rounded fixed income portfolio.

Overall, the SPDR SSGA Short Duration IG Public & Private Credit ETF represents an innovative approach to fixed income investing that seeks to address the evolving needs of today’s investors. By combining public and private credit in a single fund, the ETF offers investors a unique opportunity to access a diversified portfolio of fixed income assets that can provide attractive risk-adjusted returns in today’s challenging market environment.