NEWARK, N.J.--(BUSINESS WIRE)--PGIM Investments has entered the exchange-traded fund space with the launch of the PGIM Ultra Short Bond ETF (NYSE ARCA:PULS). The fund is a diversified, fixed income, actively managed ETF that aims to deliver current income and capital appreciation with a focus on managing risk. PGIM Investments is the worldwide distributor of retail products for PGIM, Inc., the $1 trillion global investment management businesses of Prudential Financial, Inc. (NYSE:PRU)—a top 10 asset manager globally.
“Investors are using a variety of investment vehicles to meet their needs,” said Stuart Parker, president and CEO of PGIM Investments. “The actively managed ETF market, while small, has seen steady growth. Entering this market is a natural next step to expand our product range.”
The first fund on the platform, the PGIM Ultra Short Bond ETF, is priced at 15 bps, making it among the most competitively priced active fixed income ETFs currently available, according to Morningstar data as of Feb. 28. Its risk-managed and short duration approach is designed to help investors hedge against rising rates and enhance or diversify a cash management strategy.
“We are very excited to launch our first active ETF fund and firmly believe that actively managed funds will be an important part of the ETF market going forward,” said Michael Lillard, head of PGIM Fixed Income and chief investment officer.
The fund will invest primarily in a portfolio of investment grade, U.S. dollar-denominated short-term fixed, variable and floating-rate debt instruments.
PGIM Ultra Short Bond ETF is sub-advised by PGIM Fixed Income, one of the largest global fixed income managers in the world, with more than $700 billion in assets under management as of Dec. 31, 2017.
The fund’s senior portfolio managers, Joseph D’Angelo and Douglas G. Smith, who average 32 years of investment experience and 30 years with PGIM Fixed Income, managed $45 billion in short-term strategies as of Dec. 31, 2017. The team is supported by the deep resources and capabilities of PGIM Fixed Income, including 127 portfolio managers, 103 fundamental analysts, and 50 quantitative and risk managers.
About PGIM Investments
PGIM Investments LLC offers more than 100 funds globally across a broad spectrum of asset classes and investment styles. Clients can also choose from a variety of investment vehicles including closed-end funds and target date funds such as the Prudential Day One Mutual Fund series. All products draw on PGIM’s globally diversified investment platform that encompasses the expertise of managers across fixed income, equities and real estate.
About PGIM and Prudential Financial, Inc.
With 15 consecutive years of positive third-party institutional net flows, PGIM is the global investment management businesses of Prudential Financial, Inc. (NYSE:PRU)—a top 10 asset manager globally, according to Pensions & Investments’ 2017 Top Money Managers List, with more than $1 trillion in assets under management as of December 31, 2017. PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including fundamental equity, quantitative equity, public fixed income, private fixed income, real estate and commercial mortgages. Its businesses have offices in 16 countries across five continents. For more information, please visit pgim.com.
PGIM is a business of Prudential Financial, Inc. (NYSE:PRU), a financial services leader with operations in Asia, Europe and Latin America. Its additional businesses offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information, please visit news.prudential.com.
The Fund is an actively managed exchange traded fund (ETF) and, thus, does not seek to replicate the performance of a specified index. The Fund is not a money market fund and does not seek to maintain a stable net asset value. As an ETF, the Fund’s shares trade on an exchange and are subject to ETF shares trading risk, including that the Fund’s shares may trade at a premium or discount to net asset value, during periods may become less liquid, potential may lack an active trading market which may result in significant losses if you sell your shares of the Fund during these periods; authorized participant concentration risk, since the Fund has a limited number of intermediaries that act as authorized participants and none of these authorized participants are or will be obligated to engage in creation or redemption transactions.
To the extent that these intermediaries exit the business or are unable to or choose not to proceed with creation and/or redemption orders with respect to the Fund and no other authorized participant creates or redeems, shares of the Fund may trade at a discount to NAV and possibly face trading halts and/or delisting; cost of buying or selling shares, when you buy or sell shares of the Fund through a broker, you will likely incur brokerage commission or other charges; and cash transaction risk, unlike other ETFs, the Fund may effect creation and redemptions in cash or partially in cash so that the Fund may be less tax-efficient than an investment in an ETF that distributes portfolio securities in-kind. The Fund is subject to new/small fund risk given the Fund’s recently commenced operations and limited operating history. Fixed income investments are subject to credit, market, and interest rate risks, and their value will decline as interest rates rise; call and redemption risk, where the issuer may call a bond held by the Fund for redemption before it matures and the Fund may lose income; and extension risk, where the issuer may repay a fixed income security more slowly than expected, extending the effective duration of these securities. The Fund’s fixed income investments include variable and floating rate bonds, which are subject to credit, market and interest rate risk. The Fund may invest in foreign securities, which generally involve more risk than investing in U.S. issuers, including political, legal and economic uncertainty; mortgage-backed and asset-backed securities, which are subject to prepayment, extension, and interest rate risks; and U.S. government and agency securities risk, which may carry market, interest rate and credit risks, may not be insured or guaranteed by the full faith and credit of the U.S. government and may limit the Fund’s potential for capital appreciation. The Fund may not be invested in all sectors at a given time. The risks associated with the Fund are more fully explained in the prospectus and summary prospectus. Diversification does not assure a profit or protect against loss in declining markets. These risks may increase the Fund’s share price volatility. There is no guarantee the Fund’s objective will be achieved.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.
Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing.
Funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. PGIM Fixed Income is a unit of PGIM, Inc., which is a registered investment advisor and Prudential Financial company. © 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
Investment products are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.
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