Name: The growth of private credit in ETF investing
Uploaded: 2026-02-03T22:52:07+00:00
Duration: 417 s

Speakers

Todd Sohn — Chief ETF Strategist, Strategas Securities

Joanna Gallegos — Co-Founder, BondBloxx

Summary

CNBC's ETF Edge panel discusses the rise of private credit investing through ETFs. BondBloxx co-founder Joanna Gallegos highlights PCMM as a diversified, transparent private credit ETF, while Strategas' Todd Sohn says public PE and private credit stocks are the main stress point but broad credit remains calm. Risks discussed include a potential credit event from illiquid private credit, overreaching into 20-year Treasuries, and US investors' unbalanced equity exposure.

Private credit yields attract investors seeking income.
Fewer public companies expand the private-market opportunity set.
PCMM is presented as diversified across loans and managers.
Todd Sohn sees public PE/private credit stocks as a stress point.
Broad credit spreads and banks still look stable.
A credit event from illiquid private credit is a key risk to watch.
Investors are warned against moving too fast into 20-year Treasuries.
US equity exposure may need better balance and diversification.

Ideas

Todd Sohn Chief ETF Strategist, Strategas Securities 0:49

Big bank ETFs remain a healthy barometer.

He sees no broad credit stress: credit spreads remain at multi-decade lows, and financial stocks, specifically banks and capital market names, are still okay. He views big bank ETFs as a good barometer for how the market and economy are reflecting that stability.

Todd Sohn Chief ETF Strategist, Strategas Securities 0:55

Private capital stocks show contained stress.

He flags public PE and private-credit-related stocks as the main stress point in an otherwise calm credit backdrop, with headlines about private credit funds being marked down. He thinks further stress is more likely in these less-liquid vehicles than in transparent ETFs, but so far it looks contained.

Joanna Gallegos Co-Founder, BondBloxx 2:45

Private credit offers attractive, broader opportunity set.

She argues private credit yields are attractive and the opportunity set has expanded because there are far fewer publicly listed companies than two decades ago, so investors need private credit and private equity to access the full universe of American companies. She encourages engaging with private credit rather than being scared off by headline markdowns.

Joanna Gallegos Co-Founder, BondBloxx 3:19

PCMM offers diversified, transparent private credit exposure.

She presents PCMM as a well-diversified, transparent ETF that provides a pure play on private credit, holding CLOs, over 7,000 underlying loans and 27 managers, with 80% private credit exposure. The diversification avoids single-manager concentration risk that has driven recent markdown headlines.

Todd Sohn Chief ETF Strategist, Strategas Securities 4:49

Watch for private credit systemic leakage.

He says the biggest risk that could derail markets is a credit event, specifically if private credit or illiquid-space stress starts leaking into other parts of the financial system. He has no timing edge, but he would treat such leakage as the glaring market risk.

Joanna Gallegos Co-Founder, BondBloxx 5:57

Avoid reaching for 20-year Treasuries too fast.

She warns investors have repeatedly moved too far out on the yield curve into 20-year bonds too quickly in anticipation of rapid rate cuts. She says that has been a volatile and not-best trade.

Joanna Gallegos Co-Founder, BondBloxx 6:15

US equity risk needs better balancing.

She says US investors have a huge appetite for equities and tend to pile all the way back in after dips or volatility without offsetting that risk. In her view, the real portfolio risk is not a specific event but a lack of balance and diversification.

The growth of private credit in ETF investing

Summary

Ideas

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