Private Credit ETFs, Read From Their Holdings: PRIV Is 5.3% Level 3, and the BDC ETFs Cost Up to 11.77% a Year

Three kinds of “private credit ETF”

Search for “private credit ETF” and the results lump together funds that own very different things. The N-PORT, the portfolio report every ETF files with the SEC, sorts them cleanly:

1. Bond funds with a private sleeve. PRIV and PRSD from State Street, with Apollo as the source of the private part. Mostly public bonds, Treasuries and mortgage pools, plus a slice of privately placed notes.
2. BDC and closed-end fund stock funds. BIZD, PBDC and VPC, and in synthetic form PCR. They own shares of listed business development companies (BDCs) and closed-end funds that make private loans. The loans are private; what the ETF owns trades on an exchange.
3. Funds of private-credit-backed bonds. PCMM, which holds CLO tranches backed by loans to private middle-market companies, and HBDC, which holds bonds issued by BDCs.

Level 3 is the most useful single number here. Under the fair-value hierarchy, Level 1 is a quoted price on an exchange, Level 2 is a price built from observable market inputs, and Level 3 means the value comes from a model with unobservable inputs. That is what a loan that never trades usually gets. By that test, PRIV and PRSD are the only funds in the group holding positions valued like private loans.

PRIV: how much is really private

PRIV's prospectus describes “private credit investments including, but not limited to, those sourced by Apollo Global Securities, LLC” and says private credit “will generally range between 10-35% of the Fund's portfolio”. It also says private credit “may comprise less than 10% or more than 35% of the Fund's investment portfolio at any given time”. Here is what the quarter-end portfolios show:

All percentages are our arithmetic on each N-PORT. At no quarter-end did the Level 3 share reach 10%. The broadest reading we can build from the filing adds the fund's one term loan (VCI Asset Holdings 2, 1.30%) and its AT&T Mobility II preferred (1.44%) to Level 3, and it comes to 8.07% at July 31, 2026. The fund's name changed in the filings from “SPDR SSGA” to “State Street(R)” between the January and April reports, and net assets rose 8.24 times in that quarter.

The private positions at July 31, 2026, all Level 3:

The filing does not label which positions are “AOS Investments”, the prospectus term for investments sourced by Apollo. The “AP” grouping is ours, based on the issuer names, and those are the positions that match Level 3. Their maturities run to 2061: long-dated, privately placed notes inside a fund whose adviser seeks an “intermediate duration (between four and eight years”, measured across the whole portfolio.

What makes the private part sellable

An ETF has to meet redemptions every day. PRIV's answer is a contract with Apollo. The prospectus says Apollo “has contractually agreed to provide intra-day, firm, executable bids on all AOS Investments held by the Fund”. It also sets out the limits of that promise:

• Apollo “does not have a contractual obligation to identify and make available (or offer) any investment for the Fund to buy”.
• The risk section warns that “if counterparties are unwilling to purchase AOS Investments, AOS Investments that were deemed liquid by the Adviser may become illiquid”.
• Investments in closed-end funds and BDCs, which may be Apollo-managed, are “limited to 15% of the Fund's net assets”.

At about 5% of the fund, the private sleeve is small enough that the Treasury and agency holdings (34.48%) cover it many times over. The bid matters more if the sleeve grows toward the 35% the prospectus allows. The management fee, cut once already (“restated to reflect a reduction in the Fund's management fee”), now makes the total expense 0.55%. PRSD, the short-duration version, is 0.45%.

The BDC ETFs: private loans, public wrappers, and a 10% cost line

BIZD, PBDC and VPC own the shares of listed BDCs and closed-end funds. VPC's prospectus says it invests “in equity securities of U.S.-listed BDCs and closed-end funds that employ private credit strategies”. The loans inside those BDCs are private; the shares the ETFs hold are priced on an exchange (Level 1), and none of the three reports a Level 3 holding.

Two things in these filings deserve more attention than they get.

The cost line. A BDC pays its own manager a base fee and an incentive fee, plus interest on its borrowings. When an ETF owns BDC shares, SEC rules make it show those costs as “acquired fund fees and expenses”. BIZD's summary prospectus shows a 0.40% management fee and 9.69% in total. PBDC shows 0.75% and 11.77%. VPC shows 0.75% and 10.60%. PBDC's prospectus adds that the fund bears “any performance-based or incentive fees payable by the BDCs in which it invests”. These costs are already reflected in the BDCs' share prices and dividends, so they are not an extra bill on top of the ETF's return. But they show how much of the underlying loan income goes to managers before it reaches you.

The swaps. BIZD's prospectus says “the notional values of these swaps and other derivative instruments will count towards the Fund's 80% investment policy”. At June 30, 2026 the fund held BDC shares worth 64.17% of net assets directly. It had another 35.02% of exposure through total return swaps on its benchmark, the MVIS US Business Development Companies Index, with $571.3M of notional, mostly with UBS. Treasury bills worth 33.61% of net assets sat beside them (our arithmetic). Direct shares plus swap notional come to 99.19% of net assets.

PBDC's own prospectus reports a year-to-date return of -8.49% to June 30, 2026. For what is happening inside the non-traded BDCs whose bonds HBDC buys, see our private credit fund redemptions tracker.

PCMM, HBDC and PCR: three other ways to wrap it

PCMM invests at least 80% “in private credit collateralized loan obligations”, defined as CLOs where at least 80% of the pool is loans to privately owned companies, “also commonly known as 'middle market CLOs'”. At July 31, 2026 it held 77 CLO tranches worth 95.08% of net assets. All were Level 2 and flagged as restricted securities (Rule 144A). The largest was an Antares CLO 2023-1 class BR tranche at 5.10%. Here the private loans sit two layers down, inside a securitization, and you hold floating-rate bonds.

HBDC holds 140 bonds issued by BDCs, 97.77% of net assets, all Level 2. Its top five lines at July 31, 2026 were bonds of four non-traded BDCs that individuals own directly: Ares Strategic Income Fund (1.36%), Apollo Debt Solutions BDC (1.35% and 1.33%), Blue Owl Credit Income Corp (1.32%) and Blackstone Private Credit Fund (1.30%). As a bondholder you are paid before the shareholders who queue for redemptions in those funds.

PCR describes “two strategies: (1) a private credit strategy, and (2) a credit hedge derivatives strategy”. At June 30, 2026 it had $2.42M of net assets: Treasury bills 79.28% and the Simplify Short Term Treasury Futures Strategy ETF 20.03%. The private credit exposure came through a total return swap with BNP Paribas on the VettaFi Private Credit Index, a basket of BDCs and closed-end funds, with a reported notional of $2,487,397.68 (shown with a negative sign in the filing). Two more swaps reference UBS custom baskets of company stocks. It is the smallest fund here by far.

What a holder can do with this

• Decide which of the three products you want. If you want private loans valued like private loans, PRIV and PRSD are the only ones here, and they are about 5%-8% private. If you want private-loan income and can live with stock-market prices, the BDC ETFs give it, at 9.69%-11.77% in total costs. If you want floating-rate income backed by middle-market loans, PCMM does that without BDC fees.
• Read the next N-PORT, not the fact sheet. Each fund's next public quarter-end report will show whether these numbers moved. The Level 3 share of PRIV and the swap notional of BIZD are the two numbers that move the story.
• Compare with owning the funds directly. The non-traded BDCs whose bonds HBDC holds pay higher distributions but limit exits to quarterly tenders, often prorated. Our Cliffwater Corporate Lending Fund page shows how an interval-fund exit works in practice.

FAQ

Sources: SEC EDGAR, retrieved October 5, 2026. Form N-PORT: PRIV accessions 0001410368-25-011149, 0001410368-25-041180, 0001410368-26-034129, 0001410368-26-066834, 0001410368-26-095859; PRSD 0001410368-25-041167, 0001410368-26-034127, 0001410368-26-066844, 0001410368-26-095864; BIZD 0001410368-26-086972; PBDC 0000940400-26-038482; VPC 0000940400-26-039008; PCMM 0001003715-26-003727; HBDC 0002000324-26-005043; PCR 0000940400-26-033623. Summary prospectuses (Form 497K): PRIV 0001193125-26-081592, PRSD 0001193125-26-081593, BIZD 0001137360-26-000485, PBDC 0001193125-26-377159, VPC 0001999371-26-004652, HBDC 0001999371-26-004394, PCR 0001829126-25-007320; PCMM prospectus 485BPOS 0001829126-26-001754. Shares of net assets by fair-value level, issuer and asset type, the “AP” grouping, swap and lending totals, compounded returns and growth multiples are our arithmetic on the XML filings, in sources/our_arithmetic_etf.py. This is analysis of public documents, not investment, legal or tax advice.