State Street Gives Asset-Backed Securities the Private Treatment

State Street is back at it with another installment of ETFs that offer a slice of private exposure, this time in asset-backed securities. 

Its IG Public and Private ABS ETF (PRAB) adds to the line the firm started last year, which includes the IG Public and Private Credit ETF (PRIV) and Short Duration IG Public and Private Credit ETF (PRSD). The buildout is part of an expansion in the fixed-income ETF market, which is following a similar path to equity ETFs that have expanded into a wide range of products, said Mark Alberici, global head of product innovation and strategic partnerships.

“Clients want granular building blocks,” he told ETF Upside. “There really wasn’t something there in the asset-backed securities world, and we thought this was a rich area for them.”

Back that Asset

To that point, there are only a handful of US ETFs that invest broadly in asset-backed securities. There are far more that focus on a subset of the category, collateralized loan obligations, per data from Morningstar Direct:

• The Janus Henderson Asset-Backed Securities ETF (JABS) launched last year and represents $131 million in assets. DoubleLine’s Asset-Backed Securities ETF (DABS), which is just over a year old, manages $115 million.
• Another fund, the VictoryShares Pioneer Asset-Based Income ETF (ABI), also started trading last year, and now has $57 million in assets.
• By comparison, there are more than two dozen CLO ETFs on the market, roughly a third of which launched in the past year. The category represents about $40 billion, with more than half of that being in just one product, the Janus Henderson AAA CLO ETF (JAAA).

Like State Street’s two other public and private ETFs, the asset-backed iteration sources the private holdings in the portfolio from Apollo, which helps provide liquidity and is required to repurchase the private debt as needed. PRIV, which made headlines at its launch in early 2025, only recently caught on in a big way. That fund has pulled in hundreds of millions of dollars in flows this year, likely from institutional investors, ramping up its asset base from about $45 million at the end of the year to a current level of $830 million. The other ETF, PRSD, sits at about $72 million in assets.

Solid ABS: The new fund PRAB, has most of its assets in AAA-rated debt, and about 26% of the investments are sourced by Apollo. The fund holds residential and commercial mortgage-backed securities, auto loans, CLOs, credit card debt, student loans and other debt. The benefit of investing across the asset-backed securities category, versus CLOs alone, is variety. “It’s about giving people diversification benefits,” Alberici said.