The Case for SPDR's PRIV ETF: Higher Yields Through Strategic Private Credit Allocation

In a world of historically low bond yields, the SPDR SSGA IG Public & Private Credit ETF (PRIV) has emerged as a compelling income-generating alternative. By actively blending public and private credit exposures, PRIV delivers an Average Yield to Worst of 5.59%—a full 0.90 percentage points above the Bloomberg U.S. Aggregate Bond Index's 4.69%. This edge positions PRIV as a standout choice for investors seeking to enhance their fixed-income returns without straying far from investment-grade quality.

The Yield Advantage: Private Credit at the Core

Private credit—loans and bonds not publicly traded—typically offers higher yields to compensate for lower liquidity and greater credit risk. PRIV's portfolio dedicates 5% of its assets to private credit instruments, sourced through partnerships like Apollo Global Securities. While this may seem modest, it's strategically significant. For context, the Bloomberg Aggregate Index excludes private credit entirely, focusing on liquid government and corporate bonds.