Finding Value in Volatility
Unprecedented dislocations in various parts of the Treasury market have resulted in attractive relative value opportunities, including in 10- and 20-year bonds.
Actively managed funds expand access to core-plus and environmental, social, governance strategies.
NEWARK, N.J., Dec. 8, 2021 – PGIM Investments has launched two new bond funds — the PGIM Total Return Bond ETF and PGIM ESG High Yield Fund — expanding access to its flagship core-plus bond strategy and providing a high-yield option for fixed income investors committed to environmental, social and governance (ESG) investing principles. PGIM is the $1.5 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
The PGIM Total Return Bond ETF aims to outperform the Bloomberg U.S. Aggregate Index with opportunistic investments in non-benchmark sectors and derivatives, while the PGIM ESG High Yield Fund seeks to outperform the Bloomberg U.S. High Yield 1% Issuer Capped Index over the long term while investing in bond issuers with stronger ESG characteristics and practices.
Both funds are managed by PGIM Fixed Income,1 one of the largest and most experienced global fixed income managers in the world, with more than $960 billion in assets under management.2,3 PGIM Fixed Income’s active investment approach is bolstered by credit research, quantitative research and risk management to help deliver competitive returns and manage volatility.
“PGIM Investments is committed to a vehicle-agnostic approach, offering our strategies in different forms across multiple platforms to meet investors where they are and enabling them to invest the way they want,” said Stuart Parker, president and CEO of PGIM Investments. “These new funds respond to the demand we’re seeing for expanded access to time-tested active management strategies and investment options that put ESG considerations at the forefront.”
A NEW WAY TO INVEST IN A TIME-TESTED STRATEGY VIA AN ETF
The new PGIM Total Return Bond ETF (NYSE Arca: PTRB) is an actively managed fixed income ETF seeking total return by investing in a diversified portfolio of bonds across multiple fixed income sectors. It mirrors the strategy used by PGIM Fixed Income’s Total Return Bond mutual fund, a core-plus strategy that over 25 years has grown into one of the largest fixed income mutual funds, with more than $56 billion in total net assets.2
The ETF is managed by the same portfolio managers as the mutual fund — Robert Tipp, Michael Collins, Richard Piccirillo, Gregory Peters and Lindsay Rosner — a team with an average of 22 years of experience and 19 years with the firm.
OFFERING CHOICE BETWEEN TRADITIONAL AND ESG APPROACHES
The PGIM ESG High Yield Fund seeks total return, through a combination of current income and capital appreciation, by investing in a diversified portfolio of high yield fixed income securities, emphasizing issuers with stronger ESG characteristics and practices than traditional high yield bond portfolios.
The portfolio is managed by Robert Cignarella, Robert Spano, Ryan Kelly, Brian Clapp, Daniel Thorogood and Brian Barnhurst, the same managers who oversee the PGIM High Yield Fund, with $24.5 billion in assets under management.2
PGIM Fixed Income’s ESG methodology, which distinguishes the new PGIM ESG High Yield Fund, begins with an exclusionary screen and then utilizes a proprietary scoring methodology to assign ESG impact ratings and construct the fund’s portfolio. These ESG ratings are assigned by a team of more than 110 analysts and overseen by PGIM Fixed Income’s ESG committee. Under normal circumstances, the fund will not purchase securities of issuers that have ESG impact ratings below an established threshold.
The PGIM ESG High Yield Fund is the second ESG mutual fund launched in the U.S. by PGIM this year, following the PGIM ESG Total Return Bond Fund, demonstrating the firm’s actions to expand product choice and help investors meet their sustainability objectives.
ABOUT PGIM INVESTMENTS
PGIM Investments LLC and its affiliates offer more than 100 funds globally across a broad spectrum of asset classes and investment styles. All products draw on PGIM’s globally diversified investment platform that encompasses the expertise of managers across fixed income, equities, alternatives, and real estate.
ABOUT PGIM FIXED INCOME
PGIM Fixed Income, with $964 billion in assets under management as of Sept. 30, 2021, is a global asset manager offering active solutions across all fixed income markets. The company has offices in Newark, N.J., London, Amsterdam, Frankfurt, Zurich, Tokyo, Hong Kong, and Singapore. For more information, visit pgimfixedincome.com.
ABOUT PGIM LIMITED
PGIM Limited is an indirect wholly owned subsidiary of PGIM. PGIM Limited is located at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited provides investment advisory services with respect to securities in certain foreign markets. As of Sept. 30, 2021, PGIM Limited managed approximately $58.08 billion in assets. PGIM Limited is authorized and regulated by the Financial Conduct Authority of the United Kingdom.
PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world2 with approximately $1.5 trillion in assets under management as of Sept. 30, 2021. With offices in 17 countries, 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 public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit pgim.com.
Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com.
1 PGIM Limited also serves as a subadviser to each fund.
2 As of Sept. 30, 2021.
3 Prudential Financial, Inc. is the 10th-largest investment manager (out of 477) in terms of global AUM based on the Pensions & Investments Top Money Managers list published on May 31, 2021. This ranking represents assets managed by PFI as of Dec. 31, 2020.
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