Two recently launched exchange-traded funds (ETFs) are focused on private credit loans, which is seen as a significant development in the investment landscape.

The BondBloxx Private Credit CLO ETF (ticker PCMM) and the Virtus SEIX AAA Private Credit CLO ETF (PCLO) began trading on Tuesday, reflecting a growing interest in this asset class. Both funds are actively managed and are required to invest at least 80% of their assets in collateralized loan obligations (CLOs) that are backed by loans to private companies.

This move comes as issuers seek to take advantage of the increasing demand for private credit investments, which have become popular among investors searching for yield in a low-interest-rate environment.