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Rating:A $1.27T-AUM Firm Debuts Its 9th, 10th Active ETFs Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, August 10, 2023

A $1.27T-AUM Firm Debuts Its 9th, 10th Active ETFs

Reported by Neil Anderson, Managing Editor

The team at a publicly traded insurer's $1.27-trillion-AUM (as of March 31) asset manager is rolling out two more ETFs, expanding their line of actively managed ETFs to 10 funds in total. Both new funds are powered by the fund firm's $793-billion-AUM (as of March) fixed income arm.

Stuart Parker
PGIM Investments
President, CEO
Late last month, Stuart Parker, president and CEO of PGIM Investments [profile] (part of Prudential Financial, Inc.'s PGIM), and Edwin Wilches, co-head of the securitized products team at PGIM Fixed Income, unveiled the launch of the PGIM AAA CLO ETF (PAAA on the NYSE Arca, Inc.) and the PGIM Short Duration Multi-Sector Bond ETF (PSDM on the Cboe BZX). Both of the new, active ETFs are series of PGIM ETF Trust, and the new funds' inception date was July 19.

The PGIM team confirms that PSDM "closely mirrors" the PGIM Short Duration Multi-Sector Bond Fund, a traditional open-end mutual fund that now has $2.878 billion in AUM. That open-end fund debuted back in December 2013.

PAAA comes with an expense ratio of 19 basis points. As of yesterday (i.e. two weeks in), the new ETF had grown to $105.41 million in AUM.

PSDM comes with an expense ratio of 40 bps. (That compares with the existing mutual fund's A shares for 85 bps (plus up to 225 bps in front-end load and up to 100 bps in back-end load), C shares for 160 bps (plus up to 100 bps in back-end load), Z shares for 39 bps, and R6 shares for 32 bps.) As of yesterday, the new ETF had grown to $25.121 million in AUM.

PGIM Investments LLC serves as investment advisor to both PSDM and PAAA, while PGIM Fixed Income and PGIM Limited serve as subadvisors. Prudential Investment Management Services LLC (PIMS) serves as the new ETFs' distributor.

The PM team for PAA includes: Connor Byrnes, vice president on PGIM Fixed Income's securitized products team; Gabe Riviera, managing director and co-head of that team; and Wilches.

The PM team for PSDM includes: Gregory Peters, managing director and co-chief investment officer of PGIM Fixed Income; Richard Piccirillo, managing director and senior portfolio manager; and Robert Tipp, managing director, chief investment strategist, and head of global bonds. Tipp, Piccirillo, and Peters are three of the four PMs on the open-end fund that PSDM mirrors.

Parker puts the launch of the two ETFs in the context of a broader industry trend around active ETFs.

"Active ETFs are one of the fastest growing segments of the ETF market today," Parker states. "PGIM will continue to aggressively expand its suite of products to meet this client demand by either offering new ways to access the market or expanding access to our flagship strategies."

PSDM and PAAA's other vendors include: Bank of New York Mellon as custodian, dividend disbursing agent, and transfer agent; PricewaterhouseCoopers LLP as independent accounting firm; and Securities Finance Trust Company (eSecLending) as securities lending agent. 

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