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Virtus Private Credit Strategy ETF (VPC $17.56)
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Accelerate Diversified Credit Income Fund (INCM $14.93)
Q: What are your thoughts on investing in private credit? Should it be part of a diversified portfolio? Are the above ETF's a good vehicle to invest in private credit?
Happy Holidays to the 5i staff!
Happy Holidays to the 5i staff!
5i Research Answer:
We are OK with public vehicles to get access to private credit, but are more wary of private funds. There have been a few problems (Bridging Finance fraud) and in 2025 many private funds were 'gated' and investors could not get their money out, or could only take some out at a time. Generally, we do not think the extra yield is worth the liquidity and other risks. At only $12M in assets, INCM has its own liquidity (trading) issues and we would not endorse a fund so small. VPC has a high yield (indicated 20.83%) but total return 5-year annualized is only 8.03%. It has about $50M in assets. Fees are very high here. It actually is fairly highly correlated to the S&P 500 so we would not view it as overly attractive as a portfolio diversifier.