Diversifying Across Fixed Income DiversifyingAcrossFixedIncome

Multi-sector bond strategies can mitigate risk and reduce volatility by employing a diverse mix of asset classes and investment styles. Adding informed decision-making through active management results in diversified fixed income exposure that is also positioned for enhanced returns. 

Performance among specific market segments can diverge considerably depending on economic and market conditions. Managers with experience across all fixed income asset classes such as PGIM Fixed Income offer valuable perspective to actively manage exposures as the backdrop evolves. A flexible multi-sector strategy may provide investors diversified fixed income exposure managed to avoid potential pitfalls and maintain bias toward alpha opportunities.

 

Asset-Backed Securities—Bloomberg Asset-Backed Securities Index. Measures the performance of bonds or notes backed by loan paper or accounts receivable originated by banks, credit card companies, or other providers of credit; not mortgages.  

Commercial Mortgage-Backed Securities—Bloomberg CMBS ERISA-Eligible Index. Measures the performance of mortgage-backed securities backed by commercial mortgages rather than residential mortgages. 

Emerging Market Debt Bonds—JP Morgan GBI–EM Global Diversified Index. Measures the performance of local currency bonds issued by emerging market governments, excluding China and India. 

Fixed Income—Bloomberg Aggregate Bond Index. This is a market value-weighted index that includes U.S. government, corporate, and mortgage- and asset-backed securities. 

Floating Rate Loans—Credit Suisse Leveraged Loans Index. Covers the investable universe of the U.S. dollar-denominated leveraged loan market. These loans are made to companies rated below investment grade and that have interest rates that adjust based on changes in a benchmark rate.  

Global Real Estate—Financial Times Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Developed Real Estate Index. Represents the performance of listed real estate companies and REITs worldwide. 

High Yield Bonds—Bloomberg U.S. Corporate High Yield Index. Represents the broad U.S. high yield market. High yield bonds are known as “junk” bonds and are considered speculative by both Standard & Poor’s and Moody’s. Their credit rating is BB or lower as rated by Standard & Poor’s, and Ba or lower as rated by Moody’s. 

International Bonds—Bloomberg Global Aggregate Index Ex-USD. This is an unmanaged index considered representative of bonds of foreign countries.  

International Stocks—Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE® Index). This is a weighted, unmanaged index of performance that reflects stock price movements within Europe, Australasia, and the Far East. 

Investment-Grade Corporates—Bloomberg U.S. Credit Index. Includes corporate bonds that are rated investment grade by Moody’s, Standard & Poor’s, or Fitch Investors Service, and have at least one year to maturity and an outstanding par value of at least $150 million.  

Large-Cap Growth Stocks—Russell 1000® Growth Index. Measures the performance of those Russell 1000® companies with higher price-to-book ratios and higher forecasted growth values. 

Large-Cap Value Stocks—Russell 1000® Value Index. Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. 

Mid-Cap Growth Stocks—Russell Midcap® Growth Index. Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. 

Mid-Cap Value Stocks—Russell Midcap® Value Index. Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index. 

Mortgages—Bloomberg U.S. Mortgage-Backed Securities Index. Covers the mortgage-backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). 

Municipal Bonds—Bloomberg U.S. Municipal Bond Index. This is a market value-weighted index designed for the long-term tax-exempt bond market.  

Small-Cap Growth Stocks—Russell 2000® Growth Index. Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. 

Small-Cap Value Stocks—Russell 2000® Value Index. Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. 

Treasury Bonds—Bloomberg U.S. Treasury Bond Index. Is composed of public obligations of the U.S. Treasury with a remaining maturity of one year or more and excludes Treasury bills. 

All indexes are unmanaged. Investors cannot invest directly in an index. 

Diversification does not assure a profit or protect against loss in declining markets.

Investing involves risk. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise.

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 the PGIM Investments Sales Desk at (800) 396-5501 to obtain the prospectus and summary prospectus. Read them carefully before investing.

Investment products are distributed by Prudential Investment Management Services LLC (PIMS), member FINRA and SIPC. PGIM Investments is a registered investment adviser and investment manager to all PGIM US open-end investment companies. PGIM Fixed Income is a unit of PGIM, a registered investment adviser. All are Prudential Financial affiliates. ©2024 Prudential Financial, Inc. and its related entities. PGIM, PGIM Investments, PGIM Fixed Income and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 

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. Clients seeking information regarding their particular investment needs should contact their financial professional. 

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. 

For financial professional use only. Not for use with the public.