PGIM Targets Yield Hunters With 3 New Corporate Bond ETFs In The Pipeline

PGIM Investments is preparing to add three new corporate bond ETFs to its actively managed fixed income family.

According to a recent filing with SEC, the three proposed funds—PGIM Corporate Bond 0-5 Year ETF, PGIM Corporate Bond 5-10 Year ETF, and PGIM Corporate Bond 10+ Year ETF—are designed to provide investors with specific exposure along the yield curve and total return through income and capital appreciation.

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The filing indicates PGIM’s plan to respond to the expanding demand for further customized bond investing opportunities amid ongoing market volatility.

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3 Maturity Buckets, 1 Strategy

Each fund, to debut after July, will primarily invest in investment-grade corporate bonds by maturity:

PGIM Corporate Bond 0-5 Year ETF (Short Duration)

• Projected expense ratio: 0.20%
• Focus: Bonds with a maturity of up to 5 years
• Ideal for: Income-seeking investors with minimal interest rate exposure

PGIM Corporate Bond 5-10 Year ETF (Intermediate Duration)

• Targeted expense ratio: 0.25%
• Target: Corporate bonds of 5 to 10 years’ maturity
• Well-suited for: Balanced investors looking for yield with moderate duration risk

PGIM Corporate Bond 10+ Year ETF (Long Duration)

• Targeted expense ratio: 0.25%
• Target: Corporate bonds due after 10 years
• Well-suited for: Yield-oriented investors who can ride through rate volatility

Fee Structure

As per the filing, PGIM will pay all operating expenses of every ETF except for some expenses such as taxes, brokerage commissions, and future 12b-1 fees (if any). This means that the sole expense currently being passed on to investors is the management fee, which is either 0.20% or 0.25% based on the fund.

A hypothetical $10,000 investment would cost investors $20 in the short-duration ETF and $26 in the intermediate- and long-duration ETFs over one year, with a 5% annual return.

Why It Matters

PGIM’s trio of proposed ETFs is a maturity-laddered fixed income strategy, catching the attention of investors seeking a greater ability to manage duration risk in an era of evolving Fed policy and an uncertain macroeconomic environment.

If they receive approval, the funds may provide investors with precise instruments to adjust their exposure to interest rates without sacrificing the convenience and liquidity of an ETF wrapper.

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