On this week’s episode of ETF Prime, host Nate Geraci sat down with Roxanna Islam, head of sector & industry research at VettaFi. She shared her thoughts on a groundbreaking private credit ETF, Nvidia’s weight in semiconductor ETFs, and crypto pressures. Later, Geraci welcomed Fidelity’s Ryan McKee to share insights into advisor portfolio construction.
New Private Credit ETF Makes Waves
The SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV ) has been long awaited, as the private credit space has been very hot and of interest lately among retail investors, Islam said. However, it has been hard for retail investors to actually invest in the private credit space.
“It’s something that’s usually limited to accredited investors or institutions, and a lot of that has to do with it being difficult to trade and its liquidity,” she explained. “Packaging it into an ETF has been difficult because of that illiquidity. The SEC has a 15% limit on illiquid assets in ETFs. This ETF is the first of its kind because it brings a significant amount of private investments directly into that ETF wrapper.”
PRIV is able to have a higher weight in private credit versus the previous 15% limit due to SSGA’s partnership with Apollo. As part of the partnership, Apollo is a buyer and seller of instruments for the fund, standing ready to provide liquidity, Islam explained.
Liquidity has been a primary concern since the ETF’s launch last week. However, SSGA has the flexibility to use other liquidity providers outside of Apollo.
“It’ll be interesting to see how this plays out as time passes,” Islam noted. “It’s two well-known names: State Street and Apollo. If anyone’s going to pull it off, I think these are two of those names that will do it.”
Semiconductor ETFs Rise to Top of Mind
As shares of Nvidia (NVDA) jumped in the past few years, many investors looked to leveraged NVDA ETFs as well as semiconductor ETFs.
“[Semiconductor ETFs] were some of the most popular equity ETFs out there last year,” Islam said. “I think there’s been concern for a little bit about Nvidia’s overvaluation: Has it been carrying the space?”
She added that investors are now wondering if it’s time to exit the space, or if this a buying opportunity.
Compared to buying shares of Nvidia, semiconductor ETFs can be a diversification play. Semiconductor ETFs are all built differently, making it important to look under the hood.
The VanEck Semiconductor ETF (SMH ) and the iShares Semiconductor ETF (SOXX ) are the largest funds in the space, with around $20 billion and $12 billion, respectively, in assets.
“They’re very similar when it comes to holdings — except for weighting,” Islam said. “It’s interesting because they’re actually both market cap weighted, but there’s a difference in capping that’s pretty significant.”
Other semiconductor ETFs include the SPDR S&P Semiconductor ETF (XSD ) and the VanEck Fabless Semiconductor ETF (SMHX ).
Crypto ETFs Update
The price of bitcoin has fluctuated quite a bit year to date. There are interesting pricing pressures on either side, Islam said, which have positive and negative effects on crypto.
“On one hand, you have this macro pressure from tariffs because bitcoin prices react to economic trends. They often correlate with equity prices,” she added.
Additionally, the $1.5 billion Bybit hack has hurt sentiment, as it’s the latest in a string of high-profile crypto thefts.
“I think that was the largest theft of its kind in history,” Islam said. “Bybit did replenish those reserves rather quickly, but it’s still the sort of event that would cause fence-sitters to run away from crypto.”
On the positive side, she noted, Trump has been talking about a crypto strategic reserve again.
“It’s interesting because he mentioned a crypto reserve, not a bitcoin reserve,” Islam said. “It’s just very interesting news for the crypto space.”
Overall, the new administration is generally seen as a positive for the crypto industry. There has already been a significant shift in the SEC, as it has dropped litigations it had against major crypto players like Coinbase and Kraken.
Key Trends From 2024 Continue Into 2025
A lot of key trends showing up in early 2025 are continuations of things seen in 2024, McKee said. He noted that his team is particularly interested in the strong interest in active ETFs.
“Just a couple of years ago, active ETFs only made up maybe 1%-2% of overall ETF AUM. When you focus on the flows, going back to 2018-2019, they’ve incrementally increased,” McKee explained. “So far in 2025, the number I saw about halfway through February was that 48% of the year-to-date inflows were in active ETFs.”
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