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For many investors, fixed income has not been performing as expected in recent years, with traditional, index-inspired allocations showing diminished capacity to deliver the benefits historically associated with them. Fortunately, accessing the right levels of income and diversification for their portfolios may be as easy as updating their allocation approach. Opportunities across credit remain, and actively managed fixed income ETFs offer investors targeted ways to capitalize on them against an increasingly dynamic backdrop.
For more than a decade after the 2008 financial crisis, bonds offered a straightforward deal: own them, collect steady income, and count on them for portfolio ballast when stocks fell. That environment has shifted, making the old playbook of simply holding bonds and waiting look far less reliable than it once did.
At the same time, the current environment calls for active flexibility. Yields are inviting, but interest rate uncertainty complicates efforts to pursue them through traditional allocation approaches. Active fixed income with the right attributes can help investors capitalize on today’s conditions without assuming undue risk.
WHAT CAN ACTIVE ETFS ADD TO YOUR BOND PORTFOLIO?
The fixed income landscape has changed, and the way investors access it is changing too. Fixed income investors are increasingly turning to ETFs as they look for more flexible ways to navigate a market defined by shifting interest rate expectations, evolving credit opportunities, and heightened uncertainty.
What began as a tool primarily associated with passive investing has expanded into a broad ecosystem affording investors efficient access to a wide range of income, duration, and risk-management strategies. That evolution has been accompanied by significant growth in actively managed fixed income ETFs fueled by investors seeking solutions that can adapt to changing market conditions. Combining active management and the ETF structure offers a compelling way to pursue fixed income objectives in today’s environment.
PGIM’s active fixed income ETFs offer access to income aligned with investor goals across the yield curve, from preserving capital on the front end to pursuing duration-driven upside on the long end. For example, consider how the following ETF strategies can equip investors to earn resilient income, limit rate sensitivity, and diversify while adding duration.
THREE WAYS TO PUT ACTIVE FIXED INCOME ETFS TO WORK
1. UPGRADE YOUR CASH MANAGEMENT STRATEGY
Investors typically agree to muted yields and, in some cases, restricted access (think CD term lengths) in exchange for the capital-preserving properties associated with traditional cash investments. Liquid and low cost, shorter duration strategies can offer steady income and capital preservation, with higher yields than traditional cash investments, reduced rate sensitivity, and low default risk.
With a Gold Morningstar Medalist Rating1, the PGIM Ultra Short Bond ETF (PULS) is a strong candidate to serve as an upgraded alternative to traditional cash strategies due to its commitment to quality through an investment grade portfolio with average duration of a year or less.
For investors who want to emphasize tax efficiency while earning current income, PGIM Ultra Short Municipal Bond ETF (PUSH) holds a low-risk collection of short-term, high-quality government and public project debt designed to provide steady, tax-advantaged income while preserving capital.
For a differentiated approach, the PGIM AAA CLO ETF (PAAA) prioritizes income while limiting rate and credit risk by investing exclusively in AAA-rated CLOs. Offering attractive income potential, minimal duration exposure, and diversification from traditional bond sectors, it is the only Morningstar Gold Medalist2 in its category.
2. NAVIGATE INTEREST RATE UNCERTAINTY
Shorter duration strategies with the flexibility to adapt to shifting conditions can mitigate rate risk and boost total return potential. Moreover, strategies that include exposure to opportunities outside of traditional bond sectors can help investors position for enhanced diversification benefits.
The PGIM Multi-Sector Short Duration Bond ETF (PSDM) seeks attractive income generation while managing interest rate risk. Employing an opportunistic approach to global markets, the fund combines macro analysis and bottom-up security selection to dynamically position across fixed income sectors.
The PGIM Securitized Income ETF (PINC) employs active duration management to temper rate-induced volatility while capturing attractive yields. Offering steady income and low correlations with bonds, it invests across securitized credit, emphasizing higher-quality mortgages, asset-backed securities, and CLOs.
Investing in corporate bonds with maturities of less than five years, the PGIM Corporate Bond 0-5 Year ETF (PCS) protects against rate volatility by actively maintaining low effective duration. It seeks attractive yields through diversified exposure to high-quality, short-term corporate credit.
3. DIVERSIFY AND EXTEND DURATION
Extending duration increases a portfolio's price sensitivity to interest rate changes. The primary benefits include return upside amid falling rates, locking in higher yields over an extended horizon, diversifying against equity downturns, and aligning with longer-term spending projections.
Another Morningstar Gold Medalist3, the PGIM Total Return Bond ETF (PTRB) offers a diversified, actively managed core plus strategy that can serve as a foundational fixed income allocation, pursuing income and long-term total returns across sectors.
Like PAAA, the PGIM AAA CLO Aggregate Duration ETF (AAAD) offers attractive income potential, high credit quality and diversification from traditional bond market sectors through a portfolio of AAA-rated CLOs. Unlike PAAA, it adds interest rate exposure, targeting a duration comparable to the broad U.S. bond market.
The PGIM Corporate Bond 10+ Year ETF (PCL) offers exposure to long duration, investment grade corporate bonds, providing investors an opportunity to lock in attractive yields, generate income, and potentially benefit from appreciation if interest rates decline.
PRIORITIZING ACTIVE OPPORTUNITIES
Conditions are not conducive for credit allocations modeled after indexes. Their results depend heavily on the same broad interest rate and credit trends that now offer less reward for the risk involved. Based on their ability to emphasize opportunities with fundamental promise, uncover relative value, manage risk, and adjust as conditions evolve, actively managed ETFs appear better equipped to navigate today’s dynamic fixed income environment.
The rules of the bond market have changed, and assumptions that worked for years deserve fresh scrutiny. Now is a good time to ask whether your bond holdings reflect this new reality. For investors planning decades ahead, diversified, actively managed ETFs built on careful selection may offer a more durable path forward.
1 Morningstar Medalist Rating as of 9/30/2026. Analyst-driven 10%, Data Coverage 100%.
2 Morningstar Medalist Rating as of 9/30/2026. Analyst-driven 100%, Data Coverage 100%.
3 Morningstar Medalist Rating as of 9/30/2026. Analyst-driven 100%, Data Coverage 100%.
Risk Information
PGIM Ultra Short Bond ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Foreign securities are subject to currency fluctuations and political uncertainty. Collateralized loan obligations are subject to credit, interest rate, valuation and prepayment and extension risks, as well as risk of default on the underlying asset. Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to a similar risk of decline in market value during periods of rising interest rates. Variable and floating rate bonds are subject to credit, market, and interest rate risks, and may not have an active market. The value of money market instruments may be affected by changing interest rates and by changes in credit ratings. The Fund is not a money market fund and does not seek to maintain a stable net asset value of $1.00 per share. Derivatives may carry market, credit and liquidity risks. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM Ultra Short Municipal Bond ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Municipal bonds are subject to credit risk, market risk and interest rate risk. The Fund’s holdings, share price, yield and total return may fluctuate in response to municipal bond market movements. Municipal lease obligations are typically not subject to the statutory and constitutional requirements of other municipal securities, may be less secure than other municipal securities, and may not have an active trading market. High yield (“junk”) bonds are subject to greater credit and market risks. The Fund may purchase municipal bonds that are insured to attempt to reduce credit risk. Variable and floating rate bonds are subject to credit, market, and interest rate risks, and may not have an active market. Derivatives may carry market, credit and liquidity risks. The Fund may invest in municipal securities subject to the federal alternative minimum tax on individuals. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM AAA CLO ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Foreign securities are subject to currency fluctuations and political uncertainty. Collateralized loan obligations are subject to credit, interest rate, valuation and prepayment and extension risks, as well as risk of default on the underlying asset. Collateralized loan obligation (CLO) managers may have limited operating histories and may be subject to conflicts of interest that may incentivize maximizing the yield, and indirectly the risk, of a CLO. Derivatives may carry market, credit and liquidity risks. As a non-diversified fund, investments in the Fund involve greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM Short Duration Multi-Sector Bond ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Foreign securities are subject to currency fluctuations and political uncertainty. High yield (“junk”) bonds are subject to greater credit and market risks. Floating rate and other loans are subject to the risk that failure to receive scheduled interest or principal payments on a loan would adversely affect the income of the Fund and would likely reduce the value of its assets. Investments in currency may result in a decline in the fund’s net asset value due to changes in exchange rates. Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to a similar risk of decline in market value during periods of rising interest rates. Derivatives may carry market, credit and liquidity risks. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM Securitized Income ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Collateralized loan obligations are subject to credit, interest rate, valuation and prepayment and extension risks, as well as risk of default on the underlying asset. Collateralized loan obligation (CLO) managers may have limited operating histories and may be subject to conflicts of interest that may incentivize maximizing the yield, and indirectly the risk, of a CLO. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Floating rate and other loans are subject to the risk that failure to receive scheduled interest or principal payments on a loan would adversely affect the income of the Fund and would likely reduce the value of its assets. High yield ("junk") bonds are subject to greater credit and market risks. Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to a similar risk of decline in market value during periods of rising interest rates. Holders of structured product securities bear the risks of the underlying investments, index or reference obligation. Investments in currency may result in a decline in the fund’s net asset value due to changes in exchange rates. Foreign securities are subject to currency fluctuations and political uncertainty. Derivatives may carry market, credit and liquidity risks. Leveraging techniques may magnify losses. The Fund has a limited operating history and investment positions may have a disproportionate impact on performance. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM Corporate Bond 0-5 Year ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Foreign securities are subject to currency fluctuations and political uncertainty. Derivatives may carry market, credit and liquidity risks. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
PGIM Total Return Bond ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. High yield (“junk”) bonds are subject to greater credit and market risks. Foreign securities are subject to currency fluctuations and political uncertainty. Collateralized loan obligations are subject to credit, interest rate, valuation and prepayment and extension risks, as well as risk of default on the underlying asset. Floating rate and other loans are subject to the risk that failure to receive scheduled interest or principal payments on a loan would adversely affect the income of the Fund and would likely reduce the value of its assets. Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to a similar risk of decline in market value during periods of rising interest rates. Holders of structured product securities bear the risks of the underlying investments, index or reference obligation. Investments in currency may result in a decline in the fund’s net asset value due to changes in exchange rates. Derivatives may carry market, credit and liquidity risks. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
AAA CLO Aggregate Duration ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Collateralized loan obligations are subject to credit, interest rate, valuation and prepayment and extension risks, as well as risk of default on the underlying asset. Collateralized loan obligation (CLO) managers may have limited operating histories and may be subject to conflicts of interest that may incentivize maximizing the yield, and indirectly the risk, of a CLO. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Leveraging techniques may magnify losses. The Fund may seek to gain exposure to securities by investing in ETFs, mutual funds, or other underlying funds and is subject to the performance and risks of the underlying funds and their investments. Foreign securities are subject to currency fluctuations and political uncertainty. Derivatives may carry market, credit and liquidity risks. The Fund has a limited operating history and investment positions may have a disproportionate impact on performance. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
Corporate Bond 10+ Year ETF
As an actively managed exchange-traded fund (ETF), risks of investing in the Fund include, but are not limited to the following: The Fund is subject to authorized participant concentration risk and the risks of transacting in cash versus in-kind. ETFs may trade at a premium or discount to net asset value and may lack an active trading market. Additional costs may be incurred when transacting through a broker. Fixed Income investments are subject to credit, market, prepayment and interest rate risks, and their value will decline as interest rates rise. Foreign securities are subject to currency fluctuations and political uncertainty. Derivatives may carry market, credit and liquidity risks. There is no guarantee the Fund's objective will be achieved. Risks are more fully explained in the fund's prospectus.
The Morningstar Medalist RatingTM is the summary expression of Morningstar’s forward looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. These ratings indicate which investments Morningstar believes are likely to outperform their Morningstar Category average on a risk adjusted basis over time. Investment products are evaluated on 3 fundamental pillars (People, Parent, and Process) and the Medalist Rating Price Score, which forms the basis for Morningstar’s conviction in products’ investment merits and determines the Medalist Rating assigned. Ratings take the form of Low ( 2), Below Average ( 1), Average (0), Above Average (+1), and High (+2). Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. The cost of an investment product is evaluated using the Medalist Rating Price Score, which is a continuous score from -2.5 to +2.5 based on the percentile rank of a vehicle’s expense ratio within its Morningstar Category. Morningstar combines the pillar scores and Medalist Rating Price Score using predetermined weights for actively and passively managed vehicles to calculate a weighted score. The weighted score is then compared to fixed thresholds employed consistently across Morningstar Categories and regions, with separate thresholds for actively and passively managed investments. Rating thresholds are reviewed at least annually. Buffers and ratings caps help prevent frequent ratings changes. When analysts directly cover a vehicle, they assign the fundamental pillar ratings based on their qualitative assessment, subject to Analyst Rating Committee oversight, and monitor and reevaluate them approximately once a year. When vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about the Medalist Ratings, including their methodology, please visit: http://global.morningstar.com/managerdisclosures.The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) is not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involves the risk that return targets will not be met due to unforeseen changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rates, tax rates, or political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating may result in the rating no longer being accurate. Analysts do not have any other material conflicts of interest at the time of publication. Users wishing to obtain further information should contact their local Morningstar office.
The Morningstar Medalist Analyst-Driven Percentage data point displays the weighted percentage of a vehicle's fundamental pillar ratings assigned directly or indirectly by analysts. 60509
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