PGIM Launches AAAD, a AAA CLO with Core-Like Duration Exposure

Combining CLO Expertise With a Duration Overlay

AAAD accomplishes this by pairing CLO exposure, including investments in the PGIM AAA CLO ETF (PAAA), with a duration overlay, which adds interest-rate sensitivity using instruments such as Treasuries and derivatives.

As PAAA approaches its three-year anniversary, it stands as a well-established strategy, attracting significant investor interest through its focused approach to high-quality CLO investing.

“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 Securitized Products at PGIM.

A Higher-Income Complement to Core Fixed Income

By layering duration, AAAD aims to balance higher income potential with a level of rate exposure that fits more naturally within traditional allocations.

AAAD is listed on NYSE Arca and comes with a 0.19% net expense ratio, offering a cost-efficient way to access this segment of the market. Overall, AAAD is designed for investors seeking a higher-income complement to high-quality bonds, with a duration profile that may help align assets with liabilities and manage interest rate risk—without altering the role those bonds play in a diversified portfolio.

About PGIM

PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU), with $1.4 trillion in assets under management. PGIM offers clients deep expertise across public and private markets, delivering a diverse range of investment strategies and tailored solutions in fixed income, equities, real estate and alternatives. With 1,500+ investment professionals across 40 offices in 20 countries, PGIM serves retail and institutional clients worldwide. For more information, visit pgim.com. Prudential Financial, Inc. 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.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.