Analysis: BlackRock's iShares Securitized Credit Active ETF (SECU) Assets Nearly Double to $920 Million in Five Months, But Its Risks Are Correlated With Stock Declines
An analysis points out that BlackRock's iShares Securitized Credit Active ETF (SECU) has seen its assets under management grow from approximately $470 million in March to nearly $920 million by mid-August, since its launch at the end of January. The fund pays monthly dividends and primarily invests in securitized credit, including non-agency residential and commercial mortgage debt, consumer and infrastructure asset-backed securities, and collateralized loan obligations (CLOs). The analysis suggests that while SECU's CLOs are underlain by sub-investment grade leveraged loans, the senior tranches are rated investment grade, masking speculative credit risk. The fund is better suited as a 5% to 10% yield-enhancing complement to a core bond portfolio, rather than a substitute, as its credit risk is highly correlated with stock market declines during critical periods.
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