What A PRIVilege
How I stopped worrying and learned to love the bomb
Not
I wasn’t expecting to have to write again so soon but the silly folks over at the SEC decided to approve the long awaited and much maligned SPDR® SSGA Apollo IG Public & Private Credit ETF.
sigh
So this fund was seeded with $50mm at issue and it looks like they’ve actual deployed the majority of it already according to their strategy which has more holes than explanation in how they’re valuing, pricing, and acquiring their “10-35% private credit” exposures.
Thankfully ETFs are transparent so we can immediately dive under the hood and see what piles of paper Apollo has offered to scrape off the bottom of their asset stack to sell to old Jim and Jerry in the retail market.
Full holdings as of 2/26/2025 here.
First thing that jumps out:
Wow, look at all this MBS. 18% Fannie and Freddie is a… choice? Given the low coupon this is to weight the portfolio back towards a reasonable level.
Second thing that jumps out:
10.2% coupon, 1.5% of the portfolio.
If we do a little detective work to find this.
Take a gander down to the fourth section and scroll alllllll the way to the bottom.
Given where SOFR is right now, this is our little puzzle solved. I have no idea how this is possibly carrying a BBB rating given the premia (comps would be in the triple-C to absolute toaster fire range for HY).
This is already not great and we’re about 9 assets down the stack.
There is a also a bunch of private MBS, including multi-family in here as well.
Ok, we can get to the really opaque stuff now:
This is a bunch of joint venture and other holdings all under the Apollo banner.
Using GoogleFu, we find that AP Fides Holdings is: A securitization for selling airline miles? I’m probably wrong but a cursory glance at the filing shows AF/KLM and Apollo agreeing to a deal related to recapitalizing Flying Blue (AF/KLM’s mileage program). The other AP holdings are similarly opaque beyond a few bland filings showing a joint venture was formed.
Sorry that this post doesn’t have more fluff to it. I got the bit in my teeth after remembering to check the holdings this morning but only had about 45 minutes to get this together.
There’s no real summary here except why the fuck is this in an ETF?