Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Two high-profile cases in the public-private

markets are testing boundaries and investors. ER shares private-public

crossover ETF stake in illiquid holdings, including SpaceX, has apparently run afoul as

SEC rules. Meanwhile, a high-flying alternative assets manager has changed the rules for returning

investors' cash from one of its funds, and Blueout Capital

is now facing backlash. But first, let's start with ER Share Saga. Morningstar's managing

director of manager research, Jeff Battack has been tracking the firm and his crossover fund.

Thanks for being here, Jeff. Yeah, it's my pleasure. Thanks for having me.

So what are the nuts

and bolts that make up ER shares, private, public, crossover ETF? And how does it differ from a

typical exchange traded fund? Yeah, great question. So it is a stock ETF. It spreads its assets across

not quite three dozen different securities. Most of them are publicly traded common

stocks that we'd all be familiar with. What sets it apart from other stock ETFs is they've

carved out a sleeve in which they hold private equity names. So there's at this point two

different private equity positions that they have, the largest of which by far is a security that gives

them access to SpaceX, the much sought after orbital infrastructure firm, and that's been a

big part of their pitch to the market in differentiating themselves from other equity ETFs

that are out there.

Now, this ETF, as you just mentioned, holds publicly traded

stocks and cash. How has this fund performed against the broader stock market? Yeah, so it hasn't

done well. It initiated its first private equity stake back in December of 2024. So if we measure

...