Mini Feature PRIVATE-EQUITY/CREDIT

By: Dr K C Gupta, YBB Personal Finance

CONTRARIAN INDICATORS

AAII Bull-Bear Spread -11.9% (low)
CNN Fear & Greed Index 59 (greed-low)
NYSE %Above 50-dMA 56.43% (positive)
SP500 %Above 50-dMA 58.00% (positive)

ICI Fund Allocations (Cumulative), 3/31/26
OEFs & ETFs: Stocks 60.49%, Hybrids 4.01%, Bonds 17.98%, M-Mkt 17.53%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 6/17/26+ hold
FOMC 7/29/26+ hold

Treasury

T-Bills 3-mo yield 3.68%, 1-yr 3.86%; T-Notes 2-yr 4.13%, 5-yr 4.27%, 10-yr 4.56%; T-Bonds 30-yr 5.07%;
TIPS/Real yields 5-yr 1.73%, 10-yr 2.16%, 30-yr 2.77%
FRNs Index 3.633%

Bank Rates 
www.depositaccounts.com/


Stable-Value (SV) Rates, 5/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 3.50%
TIAA MYGA 4.15% (3-yr), 4.30% (5-yr), 4.40% (7-yr) (NEW)
TSP G Fund 4.50% (previous 4.375%)

India Fear & Greed MMI 61.88 (greed)
Weekly ETFs: INDA +0.83%, INDY +0.35%, EPI +0.67%, INDH +0.18% | SPY +0.88%

The data above are as of Sunday preceding the publication date.

AGRICULTURE

US ag-sciences company FMC will divest its commercial business in India to Crystal Corp Protection by 2026 yearend; the plan was announced in 07/2025. FMC will continue its global R&D & manufacturing operations in India; it will use the proceeds to reduce the debt of its Indian operations.

Indian multinational Wipro (also trades on US Nasdaq as WIT) is buying Mindsprint unit (IT & digital services) from food & ag company Olam Group, Singapore (majority owned by Temasek Holdings). Mindsprint-Wipro will focus on global farm-to-fork supply-chains enhanced by AI.

INDUSTRIAL. German industrial conglomerate Thyssenkrupp has paused the deal for its steel unit with Jindal Steel, India (60.5% owned by Jindal Group) after a labor agreement & some EU relief. Higher energy costs due to Iran war have changed the financials of the previously announced bid by Jindal Steel & the decision to pause the deal was mutual. Thyssenkrupp may now spinoff the steel unit & retain a small stake.

SPECIAL TOPIC – PRIVATE-EQUITY/CREDIT

Investors are familiar with equity & bond markets that work through exchanges & are well regulated by SEC. But there are significant organized or ad-hoc/ unorganized activities that are off-exchanges & those include private-equity/ credit. These activities escape most regulations & monitoring.

After the GFC (Great Financial Crisis, 2008-09), banks withdrew from direct private-equity/ credit due to stricter banking regulations & monitoring. The vacuum created was filled by nonbank financials. They own companies, datacenters, hospitals, apartments, CREs (& many politicians!). An unregulated shadow banking system has evolved that may pose systemic risks for the entire financial system.

They can use their own discretion & judgement to value their illiquid holdings. There have also been some frauds. For a long time, private-equity/ credit was the domain of institutions, pension funds, endowment funds & large sophisticated investors (accredited-investors meeting income &/or asset requirements).

There have been changes recently that allow targeting general retail investors (via OEFs, ETFs, IFs, nontraded funds) & retirement savers & retirees with 401k/403b (via TDFs – target-date funds). Thinking is that the problems of risks & illiquidity of alternatives (alts) can be handled within hybrid TDFs (stocks-bonds-alts). Alts may include interval-funds (nontraded), real estate, precious metals, private-equity/ credit, cryptos. They are being pitched as democratization of investing. However, retail investors may not be aware of their risks, illiquidity & gates (withdrawal restrictions).

TDFs are funds-of-funds that have top-level fees & those coming from underlying funds. In principle, the underlying funds can be of various types (OEFs, ETFs, CITs, IFs, etc), but OEFs are the most common underlying funds, i.e. TDF-OEFs with stricter SEC regulations that allow no or very limited alts.

A less regulated fund form is CIT (collective investment trust). CITs have lower fees, aren’t listed & are loosely regulated by banking regulator OCC or states, not by SEC. TDF-CITs allow alts such as private-equity/credit (& lifetime income options) & that may lead to problems for plan sponsors & retirement investors.

Both TDF-OEFs & TDF-CITs are allowed as default options in 401k/403b & may serve as placeholders until employees get more information about the plan & investing.

Retirement investors should (i) learn about these plan changes & alts, (ii) ignore the hype (e.g. democratization of investing), (iii) watch fees because alts have high fees & TDF-CITs with them would also have higher fees, (iv) not ignore plan notices, (v) check plan default fund (typically a TDF-OEFs or TDF-CITs) & what they contain (these were supposed to be simple investments but now some can have esoteric alts).

For more information, see https://ybbpersonalfinance.proboards.com/