PGIM, the $1.2 trillion global investment management business of Prudential Financial, has launched two series of buffer ETFs. The PGIM U.S. Large-Cap Buffer 12 ETF and PGIM U.S. Large-Cap Buffer 20 ETF series trade on the Cboe BZX. The series will consist of 24 ETFs in total.
The issuer’s new ETFs seek potential downside risk protection with 12% and 20% buffer options. The funds will launch on a rolling basis the first business day of each month throughout the year.
The Buffer ETFs provide exposure to an ETF that seeks to track the performance of the S&P 500. They aim to match the return of the underlying fund up to a predetermined upside cap, while providing a limited downside buffer against the first 12% or 20% of the underlying fund’s losses over a one-year period.
See more: PGIM Launches 4 Actively Managed ETFs
Partaking in Market Upside While Mitigating Downside Risks
Stuart Parker, CEO of PGIM, said in a release that these series of funds were launched to accommodate client demand.
“Our clients are looking for ways to participate in the market’s upside, while tempering downside risks,” he said. “Buffer ETFs provide investors with a more narrowly defined outcome range, which can offer more predictability in volatile markets.”
PGIM’s quantitative equity, multi-asset, and liquid alternatives specialist PGIM Quantitative Solutions (PGIM Quant), will subadvise the funds.
PGIM Quant CEO Linda Gibson added that these new ETFs offer investors “meaningful upside access while helping to mitigate risk.”
The ETFs have a net expense ratio of 0.50%.
With the launch of the initial Buffer ETFs, PGIM Investments now offers 16 active ETFs, doubling its lineup over the last year.
The announcement of these series of ETFs comes on the heels of PGIM launching four actively managed ETFs in December. Three of these active funds invest in equities, while the fourth ETF targets fixed income.
When these four funds were launched, Parker said that building its suite of actively managed ETFs is a priority for PGIM. He added that the manager has “aggressive plans for future product development.”
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