New ETF for Private Credit Access
A new partnership aims to broaden access to private credit, an asset class that’s been growing for retail investors. Simplify Asset Management and Vettafi introduced their new Simplify Vettafi Private Credit Strategy ETF (PCR) this Wednesday.
Paisley Nardini, managing director, mentioned during an interview on CNBC’s ETF Edge that historically, private credit has mainly been available to wealthy individuals and institutional investors. The fresh ETF strategy stands out because it skips traditional private credit features such as lock-up periods and high fees.
“This vehicle is efficient and liquid, providing indirect exposure to business development companies (BDCs) and closed-end funds that invest in them,” she explained. Essentially, it allows a more accessible way for retail investors to engage with private credits via ETFs like PCR.
Nardini highlighted the ongoing private credit boom as a key reason for her collaboration with Vettafi, noting that this asset class can provide income streams valuable to retail investors. “Many people are drawn to it because it can generate low double-digit returns and distribution yields,” she added.
The Simplify Vettafi Private Credit Strategy ETF is built on an index devised by Vettafi. Todd Rosenbruth, the company’s research director, noted that there’s a quality and liquidity screening involved in the process to ensure it remains manageable and open for investors.
He expects that the new ETF will catch the interest of investors.
Private Credit vs Bitcoin
Rosenbluth shared insights from an advisory survey conducted at Vettafi, which revealed that more investors were looking at private credit for diversification compared to digital assets. “What struck me was the preference for private credit over Bitcoin,” he said. “So, while there’s growing interest in ETFs, private credit seems to be gaining traction more rapidly.”
He suggested that a 5% to 10% allocation to private credits could serve as a useful portfolio diversifier.
As of Friday, the Simplify Vettafi Private Credit Strategy ETF has remained relatively stable since its launch earlier in the week.
