On Thursday, PGIM Investments expanded its ETF lineup with the launch of the PGIM Active Aggregate Bond ETF (NYSE Arca: PAB). PAB is an actively managed fixed income ETF seeking total return through a combination of current income and capital appreciation. The fund offers core fixed income exposure through a diversified portfolio of investment-grade bonds with an estimated total expense ratio of 0.19%.
“Given the current low-yield environment and potential for increased market volatility, there has been strong client demand for active fixed income solutions,” said Stuart Parker, President and CEO of PGIM Investments. “We are pleased to expand our line-up to include a low-cost active core bond ETF that offers alpha potential with effective risk management via PGIM Fixed Income, one of the largest and most experienced bond managers in the world.”
A Risk-Managed Approach to Active Investing
PGIM Investments’ suite of fixed income ETFs are managed by PGIM Fixed Income, one of the largest global fixed income managers in the world, with more than $968 billion in assets under management. 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.
The PGIM Active Aggregate Bond ETF, managed by senior members of PGIM Fixed Income’s multi-sector team, Richard Piccirillo, Lindsay Rosner, and Stewart Wong, includes investment restrictions on characteristics such as duration, quality, and sectors in order to manage portfolio risks.
Why Active Fixed Income?
PGIM Investments recently conducted an analysis that found that historically, most active fixed income managers have outperformed their passive peers with a better risk/return profile than the average passive manager. The analysis also found that the Bloomberg Barclays U.S. Aggregate Bond Index (the “Agg”) provides limited sector diversification for investors, as it is heavily weighted toward low-yielding U.S. government debt. While the PGIM Active Aggregate Bond ETF is benchmarked to the Agg, the ETF will seek to invest in a more broadly diversified portfolio across fixed income sectors, industries, and issuers.
PGIM Fixed Income’s multi-sector team employs a collaborative bottom-up research-driven security selection process with an intense focus on industry and issuer credit research to extract multiple sources of alpha through active allocations across fixed income spread sectors.
Learn more about PGIM’s suite of actively managed ETFs.
This article originally appeared on ETFTrends.com.