Animal Spirits Podcast Talk Your Book: Investing in Private Credit ETFs and All-Time Highs
64 snips
Sep 15, 2025 Wes Crill, Senior Client Solutions Director & VP at Dimensional Fund Advisors, and Tony Kelly, Co-Founder of BondBloxx ETFs, discuss lucrative investment strategies during market highs. They explore the nuances of Collateralized Loan Obligations (CLOs) and their advantages over traditional bonds. The conversation delves into the stability of CLOs amid rising interest rates and the importance of diversification in private credit portfolios. They also challenge common misconceptions about market peaks and behavior, providing listeners with crucial insights for smarter investing.
AI Snips
Chapters
Transcript
Episode notes
ETF Liquidity Comes From The CLO Wrapper
- Use the securitized CLO wrapper and market makers to bridge illiquid loan markets into ETF liquidity.
- Rely on tradable CLO bonds and market-making to enable daily ETF liquidity despite underlying loan fragmentation.
Floating Rate Structure Reduces Rate Sensitivity
- CLOs are floating-rate so they avoid interest-rate-driven price declines.
- Investors earn the credit spread rather than duration-driven returns, making CLOs less rate-sensitive.
Thousands Of Loans Power Portfolio Diversification
- BondBloxx's private credit CLOs combine many CLOs offering portfolio-level diversification.
- PCMM holds ~60 CLOs with ~100 loans each, representing thousands of underlying companies.