Virtus SEIX AAA Private Credit CLO ETF

PCLO

Market cap $19.9M

Redemption pressure in non-traded business development companies, funds that invest in small and midsize private U.S. businesses, shows little sign of easing. Looking at the underlying portfolios of BDCs, the fundamental picture is not breaking, but it is not healing, either. Notwithstanding the many fundamental challenges that will continue to pressure direct lending portfolios, the broader takeaway is that private credit is not a monolithic asset class.

We don't see recent events in private credit as a systemic risk. Yet they raise important questions about the broader implications for spread markets, default rates, and the impact of questionable rating practices.

Private-credit ETFs aren't in 401(k)s yet — but they are Wall Street's latest effort to bring private assets to the masses and, eventually, into retirement plans.

Friday's rip-roaring jobs report has pushed the betting markets to price in a single rate cut for the entire year of 2025. Many top Wall Street brokerages have now revised their rate forecasts.

There has been ample speculation about how ETFs might penetrate the exclusive realm of private assets, but two firms have managed to pull off launching a pair of private credit CLO ETFs in the past week.

On Tuesday, Virtus Investment Partners launched its latest active ETF, the Virtus Seix AAA Private Credit CLO ETF (PCLO).  The actively managed fund has a low net expense ratio of 0.29%.

NEW YORK--(BUSINESS WIRE)--Virtus Investment Partners, Inc. (NYSE: VRTS) has expanded its offerings of distinctive, actively managed exchange-traded funds with the introduction of the Virtus Seix AAA Private Credit CLO ETF, (NYSE Arca: PCLO), the second ETF managed by Seix Investment Advisors. The Virtus Seix AAA Private Credit CLO ETF, the first ETF to focus on private credit collateralized loan obligations (CLOs), primarily seeks to invest in the strongest and most undervalued AAA rated priva.