Private Equity ETFs: Blackstone, KKR, 3i and income-paying BDCs

What are private equity ETFs?

Private equity firms use investors' money, often topped up with debt, to acquire private companies, try to improve them and later cash out at a profit. Private funds are hard for most savers to reach, so these ETFs mostly own the listed side: shares of firms that manage or invest in private companies, and business development companies (BDCs), which lend to and invest in mid-sized private businesses and pay out most of their income. Ares Capital, a BDC, is in three of the five funds; KKR, Blackstone, Blue Owl, TPG and Carlyle are each in two.

PSP tracks the Red Rocks Global Listed Private Equity Index and PEX the LPX Direct Listed Private Equity Index; both hold global names such as 3i Group. LBO, actively managed, has Ares Capital, Apollo and KKR as its largest holdings. XOVR, also active, holds no private equity firms among its largest named positions: an unnamed holding makes up 17.73%, followed by Nvidia, Astera Labs and Alphabet. BUYO tracks the Man Buyout Beta Index across 299 ordinary listed companies, such as Onto Innovation and Jabil, with 14.16% in its top ten, against 63% to 67% for XOVR, PEX and LBO. None is leveraged, inverse or option-based.

Fees vary widely. The median expense ratio (the yearly fee, as a share of assets) is 1.75%, from 0.83% for XOVR to 6.53% for LBO. Funds that own BDCs and other listed investment companies must count those holdings' own costs in the expense ratio they report, which can push the figure up.

The money is concentrated in one fund: XOVR alone holds about $2.19 billion of the roughly $2.45 billion across all five. PSP, launched in 2006, has about $232 million, while BUYO, PEX and LBO each hold less than $17 million.

Private equity ETF holdings: the stocks most funds own

The stocks that show up most often among the largest positions of the 5 biggest private equity ETFs with holdings reports, from their latest N-PORT filings.

Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.

The largest private equity ETFs, side by side

Swipe the table to see all 5 funds.

The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.

Head to head

How much do the largest private equity ETFs overlap?

Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.

From each fund’s full holdings in its latest N-PORT report.

How have private equity ETFs performed?

The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).

How private equity ETFs did in past market crashes

Total return from the stock market’s peak to its low in each fall, distributions reinvested.

What drives private equity ETFs?

Private equity managers such as KKR and Blackstone earn fees on the money they oversee, plus a share of the profits when they cash out of companies at a gain. That makes their earnings depend on raising new money, on deal prices and on borrowing costs, because buyouts are usually funded partly with debt. BDCs such as Ares Capital earn interest on loans to mid-sized businesses, so their income rises and falls with interest rates and with how many borrowers fall behind. XOVR moves more with tech stocks such as Nvidia and Alphabet, and BUYO with the 299 ordinary companies it holds.

Those sensitivities have shown up in downturns. PSP, the only fund with figures for all three downturns, fell 84.5% in the 2008 financial crisis, against 55.2% for the S&P 500; 46.9% in the 2020 COVID crash, against 33.7%; and 45.1% in the 2022 bear market, against 24.5%. PEX fell 35.2% in 2022, also more than the index. When credit tightens and deals stall, fee income, profits and loan quality can all suffer at once, which helps explain the deeper falls. Comparable figures aren't available for XOVR, BUYO or LBO; BUYO and LBO launched after 2022.

Private equity ETFs with the lowest expense ratios

Ordinary funds with at least $10 million in net assets. The median ordinary private equity ETF charges 1.75% a year; leveraged and inverse funds usually charge more.

Do private equity ETFs pay dividends?

4 of the 5 ordinary private equity ETFs with a page here paid distributions over the last 12 months, with a median yield of 5.44%.

Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.

How to choose a private equity ETF

• Private equity firms or something else. PSP, PEX and LBO mainly own listed private equity managers and BDCs, such as KKR, 3i and Ares Capital. XOVR leans on tech stocks like Nvidia, and BUYO holds 299 ordinary listed companies.
• Fees range from modest to steep. XOVR charges 0.83% a year and BUYO 0.89%, while PSP charges 1.75%, PEX 2.75% and LBO 6.53%. Funds holding BDCs must include those companies' own costs in their reported expense ratio.
• How concentrated each fund is. BUYO spreads money across 299 holdings, with 14.16% in its top ten, and PSP has 48.48% in its top ten. LBO (66.7%), PEX (64.32%) and XOVR (63.08%) are far more top-heavy, so a few holdings drive results.
• Index rules or a manager's picks. PSP, PEX and BUYO track the Red Rocks, LPX Direct and Man Buyout Beta indexes, which follow set rules. XOVR and LBO rely on managers' picks, aiming for long-term growth; LBO also seeks current income.
• Global or mostly US holdings. PSP and PEX are global funds, holding Britain's 3i Group, Sweden's EQT, Canada's Onex and Belgium's Sofina alongside US firms. LBO's largest holdings are US names such as Ares Capital, Apollo and KKR. Foreign stocks add currency swings.
• Fund size and income. XOVR holds about $2.19 billion, while LBO, PEX and BUYO each hold under $17 million, which can mean higher trading costs. As of October 27, 2026, LBO yielded 6.52%, PEX 5.66% and PSP 5.44%; XOVR paid nothing.

What are the risks of private equity ETFs?

• A few holdings carry a lot of weight. LBO keeps 66.7% of its money in its top ten holdings, PEX 64.32% and XOVR 63.08%. Ares Capital alone is about 10% of both PEX and LBO, so one stock's slump can hit hard.
• Deeper falls than the broad market. PSP lost 84.5% in the 2008 financial crisis versus 55.2% for the S&P 500. In the year to October 27, 2026, LBO fell as much as 25.1%, and XOVR's volatility, a gauge of price swings, was 24.5%.
• Income depends on loans being repaid. Business development companies (BDCs) such as Ares Capital and Main Street Capital lend to mid-sized private firms. If borrowers struggle or interest rates drop, BDC income can shrink, and with it the payouts of PEX and LBO.
• Small funds can shut down. BUYO, PEX and LBO each hold less than $17 million. Small funds can cost more to trade and are more likely to close, returning cash, and possibly a taxable gain, at a time investors didn't choose.
• The name may not match the holdings. XOVR's largest named holdings are Nvidia, Astera Labs and Alphabet, and its biggest position, 17.73%, isn't named in its holdings list. BUYO owns ordinary listed companies. Neither holds private equity firms among its largest positions.

List of all private equity ETFs, by size

All 5 private equity ETFs, compared →

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