PGIM has unveiled a triple A-rated collateralised loan obligation (CLO) exchange-traded fund (ETF) which provides “core-like” duration exposure.

The new PGIM AAA CLO Aggregate Duration ETF (AAAD), launched alongside the PGIM Securitized Income ETF (PINC), which also employs a duration overlay, will invest primarily in US dollar-denominated triple A-rated CLOs, either directly or through its investment in the PGIM AAA CLO ETF.

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AAAD expects to use longer-duration fixed income instruments and derivative instruments, such as futures, forwards, options, swaps, and US Treasury futures to maintain its target portfolio duration, or to extend the overall duration of its portfolio beyond that of its CLO exposure, PGIM said.

Meanwhile, PINC will mainly invest in securitised credit investments and other similar credit instruments, including derivative instruments that provide diversified exposure across the securitised credit landscape.

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“With this launch, we’re excited to introduce a strategy that leverages our CLO expertise to provide enhanced yield potential compared to traditional high-quality duration sectors,” said Edwin Wilches, co-head of securitised products at PGIM (pictured).

PGIM, which is the $1.4tn asset management business of Prudential Financial, offers more than 60 actively-managed ETFs across equity and fixed income asset classes on its ETF platform, totalling $27bn in assets under management.

“We’re expanding our active ETF platform with innovative, competitively priced strategies that give investors more precise access to income-generating securitised credit opportunities,” added Stuart Parker, head of global wealth at PGIM.

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