PGIM Investments launches third ESG bond fund

Firm continues to build ESG product suite with a focus on flagship fixed income mutual funds

NEWARK, N.J.--(BUSINESS WIRE)--
PGIM Investments continues to expand its suite of actively managed fixed income ESG funds with the launch of the PGIM ESG Short Duration Multi-Sector Bond Fund. The new fund is the third ESG mutual fund offered by PGIM Investments, demonstrating the firm’s commitment to expanding product choice and helping investors seeking to meet their sustainability objectives. PGIM is the $1.4 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).

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“PGIM Investments continues to build out its fund lineup, with a focus on providing investors access to ESG alternatives of existing PGIM fixed income funds with proven track records.” -- Stuart Parker, PGIM Investments, President and CEO (Photo: Business Wire)

The PGIM ESG Short Duration Multi-Sector Bond Fund seeks total return, investing across various fixed income securities and emphasizing issuers with stronger ESG characteristics and practices than traditional multi-sector portfolios. The Fund normally seeks to maintain an average portfolio duration of three years or less.

The Fund is managed by an experienced team of PGIM Fixed Income portfolio managers including Gregory Peters, Robert Tipp, Michael Collins, Richard Piccirillo, and Lindsay Rosner, averaging 27 years’ investment experience. ¹ The same managers oversee the $3.2 billion PGIM Short Duration Multi-Sector Bond Fund, a top-performing fund with strong historical total return rankings.

What sets the two funds apart is PGIM Fixed Income’s ESG methodology, which begins with an exclusionary screen and then utilizes a proprietary ESG impact rating methodology to construct the fund’s portfolio. These ESG ratings are assigned by a team of more than 110 analysts and overseen by PGIM Fixed Income’s ESG committee. Under normal circumstances, the fund will not purchase securities of issuers that have ESG impact ratings below an established threshold.

“PGIM Investments continues to build out its fund lineup, with a focus on providing investors access to ESG alternatives of existing PGIM fixed income funds with proven track records,” said Stuart Parker, president and CEO of PGIM Investments.

“Our Short Duration Multi-Sector Fund may benefit investors in a rising rate environment and offers the flexibility to allocate to the most attractive sectors within the fixed income market. This new fund allows investors to access that same strategy with an ESG overlay,” said Gregory Peters, co-chief investment officer at PGIM Fixed Income.

Learn more about the PGIM ESG Short Duration Multi-Sector Bond Fund.

Source: Morningstar as of 3/31/2022. Rankings are based on total return, do not include the effect of sales charges, and are calculated against all funds in the Morningstar Short-Term Bond category using the Fund’s Class Z shares. Total Return rankings: 1-year: 24% (133/607); 3-year: 27% (155/560); 5-year: 14% (48/480); Since Inception: 11% (30/392).

ABOUT PGIM INVESTMENTS

PGIM Investments LLC and its affiliates offer more than 100 funds globally across a broad spectrum of asset classes and investment styles. All products draw on PGIM’s globally diversified investment platform that encompasses the expertise of managers across fixed income, equities, alternatives, and real estate.

ABOUT PGIM FIXED INCOME

PGIM Fixed Income, with $890 billion in assets under management as of March 31, 2022, is a global asset manager offering active solutions across all fixed income markets. The company has offices in Newark, N.J., London, Amsterdam, Frankfurt, Zurich, Tokyo, Hong Kong, and Singapore. For more information, visit pgimfixedincome.com.

ABOUT PGIM

PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world² with approximately $1.4 trillion in assets under management as of March 31, 2022. With offices in 17 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit pgim.com.

Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information, please visit news.prudential.com.

¹ PGIM Limited is also a subadvisor to the Fund.

² Prudential Financial (PFI) is the 10th-largest investment manager (out of 477) in terms of global AUM based on the Pensions & Investments Top Money Managers list published on 5/31/2021. This ranking represents assets managed by Prudential Financial as of 12/31/2020.

Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing.

Past performance is not a guarantee or a reliable indicator of future results.

Investing in mutual funds involves risks. Some mutual funds have more risk than others. The investment return and principal value will fluctuate and shares when sold may be worth more or less than the original cost and it is possible to lose money. Diversification and asset allocation do not assure a profit or protect against loss in declining markets. There is no guarantee that a Fund's objectives will be achieved. The risks associated with each fund are explained more fully in each fund's respective prospectus.

Because the subadviser utilizes screens and other exclusionary tools in its ESG methodology, the Fund may forego opportunities to make certain investments when it might otherwise be advantageous to do so, or sell investments based on its ESG methodology criteria when it might be otherwise disadvantageous to do so. In assigning an ESG Impact Rating, the subadviser may depend on information that is incomplete, inaccurate or unavailable, and issuers that are assigned a higher ESG Impact Rating by the subadviser may underperform similar issuers with lower ratings and/or may underperform the market as a whole. The Fund’s exposure to Fixed income investments are subject to credit, market, interest rate, and prepayment risks, and their value will decline as interest rates rise. The Fund may invest in high yield (“junk”) bonds, which are subject to greater credit and market risks; foreign securities, which are subject to currency fluctuation and political uncertainty; short sales, which involve costs and the risk of potentially unlimited losses; and derivative securities, which may carry market, credit, and liquidity risks. The Fund may not be invested in all sectors at a given time. The Fund is subject to market risks (the value of investments may decrease and securities markets are volatile); and currency risk, where the Fund’s net asset value could decline as a result of changes in exchange rates. The transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Fund’s performance. As a new and relatively small fund, the Fund's performance may not represent how the Fund is expected to or may perform in the long-term. Large shareholders could subject the Fund to large scale redemption risk. Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to a similar risk of decline in market value during periods of rising interest rates. Diversification and asset allocation do not assure a profit or protect against loss in declining markets. US Government and Agency Securities are subject to market risk, interest rate risk and credit risk. Not all US Government securities are insured or guaranteed by the full faith and credit of the US Government. These risks may increase the Fund's share price volatility. Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table for a variety of reasons. There is no guarantee the Fund’s objective will be achieved. The risks associated with the Fund are more fully explained in the Fund's prospectus and summary prospectus.

© 2022 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

The Morningstar Rating for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. PGIM Fixed Income is an affiliate of PGIM. © 2022 Prudential Financial, Inc. and its related entities. The PGIM logo is a service mark of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

Investment products are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.

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Source: PGIM