Thoughts on new ASX ETF Lend

Hi Tony,

The New Global Listed Private Credit ETF (LEND) has only been trading for a few days but by definition to get a 10% return there’s going to be risks of capital loss. However, in theory we like access to this private credit investment opportunity for retail investors, an area usually limited to High Net Worth & the “Big end of Town”.

• LEND will offer investors on ASX access to a globally diversified portfolio in listed private credit allowing you to invest alongside the ‘giants’ and pursue higher income opportunities, with the liquidity, ease of trading and transparency of an ETF  – or at least, that’s what the market says!

NB There is no leverage on this ETF, its currency hedged, carries 25 securities and attracts fees of 0.65% p.a.

Private credit is a way for businesses to raise capital (money), the investor owns all or part of the company in return for lending money to the company in exchange for interest payments and can impose covenants and/or collateralization that secures the loan. Rates are usually attractive as the risks are higher.

• We like the concept, we’d just like the see how it trades and learn a bid more about it before making a call, the obvious issue being the benefit of ETFs are liquidity, yet private credit is quite illiquid – an ETF is only as liquid as the assets it is exposed to (I know market makers participate however they are hedging their underlying).   We’ll keep this one on our radar and learn a bit more about it.