By Suzanne McGee
(Reuters) – Three separate asset management firms launched exchange-traded funds on Tuesday, unveiling products focused on securitized debt, the artificial intelligence industry and Ozempic-maker Novo Nordisk in the closing weeks of a year that has seen a deluge of new funds.
New ETF offerings have exploded in 2024, as investors sought ways to participate in the soaring U.S. stock market. Year-to-date inflows for U.S.-listed ETFs are poised to cross the $1 trillion mark this week for the first time ever. As of late November, a record 612 ETFs had launched, compared to 480 last year, according to State Street Global Advisors.
The latest include the BondBloxx Private Credit CLO ETF, which will give financial advisors and others access to private CLOs, or collateralized loan obligations, issued by middle-market corporations.
CLOs are pools of leveraged loans, structured as one actively managed security. They have become a major source of funding for non-investment grade companies seeking debt financing.
More broadly, lending to companies by institutions other than banks, known as private credit, has grown rapidly in recent years as stricter regulations made it more expensive for traditional lenders to finance riskier loans.
On Tuesday, BlackRock said it will buy private credit firm HPS Investment Partners for about $12 billion in an all-stock deal, as the world’s largest asset manager seeks to expand in the red-hot market. Another launch, the VistaShares Artificial Intelligence Supercycle ETF, will seek to invest in companies building data centers and semiconductors for the AI industry. Its largest position is in Vertiv Holdings Co., which designs and builds data center infrastructure and has seen its shares soar nearly 170% this year.
The ETF is the first product from VistaShares, a new asset management firm headed by Jon McNeill, former president of Tesla and Adam Patti, former CEO of IndexIQ, an alternative assets investment firm later acquired by New York Life.
Meanwhile, Defiance ETFs is offering investors the first chance to get leveraged exposure to pharmaceutical giant Novo Nordisk via its new Defiance Daily Target 2x Long NVO ETF. The product is designed to deliver double the daily price movement in Novo Nordisk, whose shares have gyrated this year amid publicity for its diabetes and weight loss drug, Ozempic.
“As with any new product, it remains to be seen if there will be broad enough adoption to keep any of these new products alive over the longer haul in a competitive market,” said Todd Rosenbluth, head of ETF research at VettaFi, a New York-based market analysis firm.
(Reporting by Suzanne McGee; Editing by Ira Iosebashvili and David Gregorio)
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