Welcome to ETF IQ, a weekly newsletter dedicated to the $14 trillion global ETF industry. I'm Bloomberg News reporter and anchor Katie Greifeld .

Pulse Check

While seemingly no corners of global markets were spared, President Donald Trump’s tariff barrage has landed particularly hard in the universe of publicly listed shares of private-asset managers. KKR and Ares Management both cratered by 15%, the worst day on record on Thursday, while Carlyle Group and Apollo Global Management posted their biggest plunges since mid-2020. The S&P 500 index also had its worst day in nearly five years. 

The wipeout has many speculating about what horrors might be unfolding outside the spotlight of public markets. As my colleague Joe Weisenthal ventured on Thursday: “Just think about what’s going on in every pool of private investment capital right now.” The good news is that there’s an ETF for that! Kind of (more on that in a moment). 

Train your eyes on PRIV, the SPDR SSGA IG Public & Private Credit ETF (note that “Apollo” was dropped from the name to appease an irate Securities and Exchange Commission). The fund has actually had a stellar week: it gained 0.5% on Thursday while LQD and HYG both slipped, and managed to hold onto gains on Friday as well. In fact, PRIV is on track for its best weekly performance since its late February launch.

Phew, you might say, private markets must be an oasis of calm and opportunity amid this meltdown. Not quite, says this newsletter. 

CFRA’s Aniket Ullal popped PRIV’s hood and found that private assets account for a relatively small share of the ETF’s portfolio. Specifically, about 74% of its holdings are in public corporate debt, Treasuries, or agency MBS pass-throughs. The remaining share “would not meet the strict definition of private credit (i.e. loans made to middle market firms by non-bank institutions),” he wrote in an email: it’s largely securitized auto loans, securitized mortgages, or private placements with public companies. Around 3% is in true private credit, according to his breakdown.

So in short, PRIV is an imperfect proxy for taking pulse of private markets. But nonetheless, it’ll be interesting to keep an eye on how their marks change — State Street posts the fund’s holdings to its website daily. 

This Is The Way

That’s not to say that it’s necessarily a bad thing that PRIV isn’t 100% private credit (not that the SEC would currently allow it to be). In fact, JPMorgan Asset Management global head of private markets Jed Laskowitz thinks that the hybrid public-private model will be the future in the ETF industry. He joined me on Bloomberg Television on Friday:

We have to make sure we’re balancing those trade-offs of illiquidity in strategies that are daily-valued, like an ETF, and daily-traded. I think this is much more about the intersection of public and private. The majority of assets in many of these daily-valued private strategies are in public assets, and that’s the way we expect the ETF industry to unfold. They’ll be much more public than private but have a dose of private assets in them to create that return-kicker for investors.

Which is a good thing given the current market environment, Laskowitz added. Friday’s session saw a key measure of risk for blue-chip bonds surge to levels not seen since the regional banking crisis of 2023, while spreads on high-yield bonds widened by the most since 2020 on Thursday. That kind of disruption means there’s going to be “great market-driven opportunities in public markets that you might want to take advantage of,” Laskowitz told me. 

It’s worth pointing out that JPMorgan has yet to file for any sort of public-private ETF offering, along with their biggest competitors. While PRIV is up and running, the industry hasn’t seen the pile-on of copycat filings that usually follows a first-of-its-kind launch.

In Other News

Dimensional Fund Advisors amended its bid for multi-share class fund structures, in a sign that the SEC is making progress on the applications.

Some traders looking to hedge risks in the high-yield bond market turned to options on exchange-traded funds on Thursday.

The retail traders who have stormed the markets in recent years were among the only investors buying on Thursday as US stocks had their worst day since June 2020.

In this week’s Drill Down on Bloomberg Television’s ETF IQ, Brookmont Capital Management’s Ethan Powell stopped by to talk about the just-launched Brookmont Catastrophic Bond ETF (ILS). The new fund is novel in at least two ways: it’s the world’s first catastrophe-bond tracking ETF, and it carries the inauspicious distinction of launching without a lead market maker. 

As I reported, it’s an extremely rare situation: lead market makers are a linchpin of the trading process, who commit to quote both bid and ask prices for the fund in order to keep its shares moving. Not having an LMM risks worse liquidity than peers, wider gaps between buyers and sellers, and generally less-efficient trading. 

Catastrophe bonds are complex securities not generally intended for non-specialist investors and with a liquidity profile vastly different to that of the fund itself. With that in mind, it was difficult to get a market maker to take the leap, Powell told me:

In an esoteric asset class such as catastrophe bonds where traditional ETF market makers don’t know how to price the risk, there’s reluctance to be on the hook from a statutory perspective... They’re all super interested in the product and they’re excited to make a market in it, they just don’t want to be on the hook if things go wide.

AQR’s Daniel Villalon and Lazard’s Rob Forsyth join us on Bloomberg Television’s ETF IQ. We’re live on Mondays at noon. Watch on Bloomberg Television’s ETF IQ, on the Bloomberg Terminal at TV <GO> and on YouTube.

As President Trump’s trade war rattles global markets, Bloomberg Surveillance goes beyond the headlines with special coverage Sunday April 6th 5-7pm EDT. Join hosts Jonathan Ferro and Lisa Abramowicz for real-time insight from top economists, market strategists and policymakers. Watch on Bloomberg.com/live and TV<GO> on the Terminal.