JPMorgan Chase & Co. is the latest issuer attempting to fit private credit assets into a retail-friendly exchange-traded fund vehicle.
The New York-based bank filed Tuesday to offer an actively managed fund that will invest “opportunistically” across debt markets with the goal of generating total returns and income, according to a Tuesday filing with the Securities and Exchange Commission. Up to 15% of actively managed JPMorgan Total Credit ETF’s portfolio will be allocated to private credit, the filing said — the maximum level allowed by the SEC, which caps illiquid investments at 15% of an ETF’s holdings.
Firms within the $1.7 trillion private credit industry, which has ballooned in size in recent years, have increasingly set their sights on retail investors as they look for new sources of capital as institutional fundraising slows. JPMorgan’s proposed ETF will invest in both private and public debt, given that the distinction is blurring for both borrowers and investors, according to JPMorgan Asset Management’s Jed Laskowitz. The filing lands at a potentially precarious time for both arenas, with blue-chip public bond spreads hovering near the tightest levels since 1998 while the likes of Bank of America warn about pain ahead in private credit.
“The US corporate credit market is increasingly converging, as issuers move fluidly between public bonds and private credit,” Laskowitz, the firm’s global head of private markets and customized solutions, said in a statement. “Investors are increasingly interested in investing actively across the public and private credit spectrum.”
A ticker and fee for the ETF were not yet listed. JPMorgan Asset Management, which oversees nearly $200 billion worth of private securities within its $4 trillion of assets, will underwrite the fund’s investments in either primary or secondary markets, according to a person familiar with the matter. JPMorgan declined to comment beyond the statement.
