Why NovusQuo ETFs Are a Good Alternative to Private Credit

In recent years, private credit has become a core component of many portfolios seeking steady income in a low-yield environment. By lending directly to corporates or non-rated borrowers, private credit funds have aimed to deliver attractive returns insulated from public market volatility. However, the sector’s rapid growth has exposed several structural weaknesses particularly around liquidity, transparency, and valuation integrity. 

As investors reassess where and how they seek yield, NovusQuo ETFs present a listed, liquid, and transparent alternative that can deliver comparable income characteristics without the embedded risks of private lending. 

The Challenges of Private Credit 

Private credit’s appeal lies in its promise of consistent income with low correlation to equities. But beneath that appeal are three recurring issues: 

1. Illiquidity: Private credit assets are typically unlisted and non-tradable. When investors need liquidity, they rely on fund-level redemption windows that can close quickly during periods of stress. 

2. Opaque Valuations: Fund valuations often rely on internal models or third-party estimates, rather than observable market prices. This means that reported returns may lag reality particularly when borrower quality deteriorates or market conditions tighten. 

3. Concentrated Credit Risk: Returns are driven by borrower solvency and refinancing conditions. A small number of defaults or re-pricings can materially affect fund NAV, yet investors may not see the impact immediately. 

These weaknesses have led to growing recognition that private credit returns often come with equity-like risks but without equity-like liquidity. 

The NovusQuo Alternative 

NovusQuo ETFs based on liquid, listed exposures such as the ASX 200 and ASX 20 are designed to give investors access to income-enhanced or risk-adjusted equity returns with daily liquidity and transparent pricing. 

Each ETF splits its exposure into two complementary parts: 

• NQ Capital Interest, focusing on capital growth, and 

• NQ Dividend Interest, focusing on income yield. 

This structure allows investors to choose their preferred risk/reward balance all within a listed, regulated ETF framework supported by real-time market making and exchange oversight. 

Transparent Valuation and Continuous Liquidity 

Unlike private credit funds, which may only price monthly or quarterly, NovusQuo ETFs are valued daily using market-observable inputs such as volatility, dividend yield, and interest rates. 

Their liquidity is exchange-based, not fund-gated meaning investors can buy or sell units at any time through the exchange. Designated market makers continuously provide two-way quotes, maintaining efficient spreads and transparent price discovery. 

Income and Flexibility Without the Hidden Risks 

For investors seeking income resilience, the NQ Dividend Interest offers exposure to dividend streams from some of Australia’s leading listed companies, without taking on borrower or credit default risk. 

As interest rates fall, dividend-linked exposures can continue to deliver attractive income relative to cash and bonds with the added benefit of mark-to-market transparency and exit flexibility. 

Conclusion 

The private credit sector has proven that yield can come with hidden complexity. As liquidity mismatches and valuation opacity draw more scrutiny, investors are seeking solutions that offer income, liquidity, and accountability in one product. 

NovusQuo ETFs deliver these advantages by combining the income efficiency of structured credit with the transparency, liquidity, and oversight of the listed equity market. 

For wholesale investors, this represents a modern, scalable alternative to traditional private credit one designed for performance you can price, trust, and trade every day.