PGIM Unveils Two Laddered Buffer ETFs

Following the launch of the PGIM U.S. Large-Cap Buffer 12 and 20 ETF series in January, PGIM, Prudential Financial, Inc.’s $1.34 trillion global investment management business, has launched two laddered buffer ETFs, the PGIM Laddered Fund of Buffer 12 ETF and the PGIM Laddered Fund of Buffer 20 ETF.

The ETFs will be offered at a 0.50% net expense ratio, making them the lowest-cost fund of buffer ETFs in the marketplace, according to the firm.

The new ETFs offer investors exposure to the US large-cap equity markets via a laddered portfolio of Underlying Buffer ETFs. The Underlying Buffer ETFs strive to provide investors with modest protection against a decline in the US large-cap market, with an upside cap on capital appreciation in that market over a certain period.

The PGIM Laddered Fund of Buffer 12 ETF seeks an equal-weight investment in each of the 12 PGIM U.S. Large-Cap Buffer 12 ETFs, whereas the PGIM Laddered Fund of Buffer 20 ETF seeks an equal-weight investment in each of the 12 PGIM U.S. Large-Cap Buffer 20 ETFs, with the goal of rebalancing back to an equal weight every quarter.

All 24 buffer ETFs mirror the SPDR S&P 500 ETF Trust, but use options trading to limit potential losses to 12% for the PGIM U.S. Large-Cap Buffer 12 ETFs and 20% for the 12 PGIM U.S. LargeCap Buffer 20 ETFs.

“We’ve seen strong client demand for both the underlying buffer ETFs as well as single-ticker solutions that can provide efficient exposure to this style of investing while reducing some of the operational load of investing in the individual monthly vintages,” said Stuart Parker, president and CEO of PGIM Investments.