Competitively priced at 0.50%, new funds are
among lowest-cost buffer ETFs in the marketplace
PGIM,1 the $1.4 trillion global investment management business
of Prudential Financial, Inc. (NYSE: PRU) launches the PGIM S&P
500 Max Buffer ETF series, the PGIM Nasdaq-100 Buffer 12 ETF series
and the PGIM Laddered Nasdaq-100 Buffer 12 ETF (“the ETFs”).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20250102861008/en/
Stuart Parker, President and CEO, PGIM
Investments (Photo: Business Wire)
The ETFs will be offered at a 0.50% net expense ratio, placing
them among the lowest-cost buffer ETFs in the marketplace.2
- The PGIM S&P 500 Max Buffer ETF series seeks to
provide investors with returns that match those of the SPDR®
S&P 500® ETF Trust (“SPY”) up to a predetermined upside cap (of
at least 3%) while seeking to maximize downside protection against
SPY’s losses over each ETF’s one-year target outcome period. The
series seeks to provide 100% downside protection, with a dynamic 3%
minimum cap provision. The series will consist of 12 ETFs, each
listed monthly on the Cboe BZX.
- The PGIM Nasdaq-100 Buffer 12 ETF series seeks to
provide investors with returns that match the price return of the
Invesco QQQ Trust℠, Series 1 (“QQQ”) up to a predetermined upside
cap, while providing a downside buffer against the first 12%
(before fees and expenses) of QQQ’s losses over each ETF’s target
outcome period.3 The series will consist of four ETFs, each listed
on the Nasdaq.
- The PGIM Laddered Nasdaq-100 Buffer 12 ETF (“PBQQ”)
seeks to provide investors with capital appreciation and equally
invests in each of the quarterly PGIM Nasdaq-100 Buffer 12 ETFs.
PBQQ is listed on the Nasdaq.
“Investors are increasingly looking for defined outcome
solutions that provide upside market exposure and downside
protection,” said Stuart Parker, PGIM Investments president and
CEO. “The expansion of our buffered ETF suite makes our offering
one of the most comprehensive in the market and is emblematic of
our mission to deliver products in line with investor needs.”
The ETFs are subadvised by PGIM Quantitative Solutions (PGIM
Quant), the quantitative equity and multi-asset specialist of
PGIM.
“We’re thrilled to partner with PGIM Investments on the launch
of these new buffered products,” said Linda Gibson, CEO of PGIM
Quantitative Solutions. “The ETFs not only leverage our subadvisory
capabilities, but also our deep expertise in solutions-based
investing and decades of experience managing options trading
strategies for investors.”
PGIM’s expanded offering of buffer ETFs also includes the 12%
and 20% U.S. Large Cap buffer ETF series and two laddered funds of
buffer ETFs launched last year. Learn more about PGIM’s growing ETF
suite, which spans fixed income, equity, and multi-asset class
solutions, here.
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 QUANTITATIVE SOLUTIONS
PGIM Quantitative Solutions is the quantitative equity and
multi-asset specialist of PGIM. For 50 years, PGIM Quantitative
Solutions has helped investors around the world solve their unique
needs by leveraging the power of technology and data as well as
advanced academic research. PGIM Quantitative Solutions manages
$103 billion in client assets.*
ABOUT PGIM
PGIM is the global asset management business of Prudential
Financial, Inc. (NYSE: PRU). In 42 offices across 19 countries, our
more than 1,400 investment professionals serve both retail and
institutional clients around the world.
As a leading global asset manager, with $1.4 trillion in assets
under management,* PGIM is built on a foundation of strength,
stability, and disciplined risk management. Our multi-affiliate
model allows us to deliver specialized expertise across key asset
classes with a focused investment approach. This gives our clients
a diversified suite of investment strategies and solutions with
global depth and scale across public and private asset classes,
including fixed income, equities, real estate, private credit, and
other alternatives. For more information, 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.
*As of Sept. 30, 2024.
1 The term PGIM as used in this announcement includes PGIM
Investments LLC, an indirect, wholly owned subsidiary of Prudential
Financial, Inc.
2 Source: Morningstar Direct as of Nov. 30, 2024.
3 Certain series may have an initial target outcome period of
less than one year. Future target outcome periods will be for
one-year periods.
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.
PGIM S&P 500 Max Buffer ETFs Fund
Risks
The Fund invests in FLEX Options, which subjects the Fund to
the risks of losing its premium paid for the option or that the
price of the underlying reference asset drops significantly below
the exercise prices and the Fund’s losses are substantial. FLEX
Options are also subject to the risk that they may be less liquid
than other securities, including standardized options.
FLEX Options are subject to trading risks and valuation risks
because they are market traded and centrally cleared by the OCC.
The Fund is designed to deliver returns that approximate the
Underlying ETF if Fund shares are bought on the first day of a
Target Outcome Period and held until the end of the Target Outcome
Period, subject to the buffer and the cap. If an investor purchases
Fund shares after the first day of a Target Outcome Period or sells
shares prior to the expiration of the Target Outcome Period, the
returns realized by the investor will not match those that the Fund
seeks to provide.
The Fund is subject to buffered loss risk, in which there can
be no guarantee that the Fund will be successful in its strategy to
provide downside protection against Underlying ETF losses; buffer
and cap change risk, in which the cap may rise or fall from one
Target Outcome Period to the next and is unlikely to remain the
same for consecutive Target Outcome Periods, and the Fund may have
a buffer significantly below 100% in certain Target Outcome
Periods; and capped upside risk, where the Fund will not
participate in gains in the Underlying ETF beyond the cap. The Fund
is subject to Underlying ETF risk in which the value of an
investment in the Fund will be related to the investment
performance of the Underlying ETF. Therefore, the principal risks
of investing in the Fund are closely related to the principal risks
associated with the Underlying ETF. As an ETF, the Fund is subject
to risks involved with: ETF shares trading risk (including the risk
of the shares trading at a premium or discount to net asset value
or the lack of an active trading market); authorized participant
concentration risk; and the risk of transacting in cash versus
in-kind.
As a new and relatively small fund with limited operating
history, the Fund is subject to the risk that its performance might
not represent how it may perform long term and investments may have
disproportionate impact on performance. The Fund will be indirectly
exposed to equity and equity-related securities, where the value of
a particular security could go down resulting in a loss of money;
large capitalization companies, which may go in and out of favor
based on market and economic conditions; and derivative securities,
which may carry market, credit, and liquidity risks. Derivatives
are subject to counterparty risk, which is the risk that the other
party in the transaction will be unable or unwilling to fulfill its
contractual obligation, and the related risks of having
concentrated exposure to such a counterparty.
The Fund is subject to management risk, in which the
subadviser will apply investment techniques and risk analyses in
making investment decisions for the Fund, but the subadviser’s
judgments about the attractiveness, value or market trends
affecting a particular security, industry or sector or about market
movements may be incorrect; and liquidity risk, in which the Fund
may invest in instruments that trade in lower volumes and are more
illiquid than other investments. Certain transactions in which the
Fund may engage may give rise to leverage which could result in
increased volatility of investment return.
The Fund intends to qualify as a regulated investment company
(“RIC”) under Subchapter M of the U.S. Internal Revenue Code of
1986, as amended (the “Code”); however, the federal income tax
treatment of certain aspects of the proposed operations of the Fund
are not clear, including the tax aspects of the Fund’s options
strategy (including the distribution of options as part of the
Fund’s in-kind redemptions), the possible application of the
“straddle” rules, and various loss limitation provisions of the
Code.
PGIM Nasdaq-100 Buffer 12 ETF
Risks
The Fund invests in FLEX Options, which subjects the Fund to
the risks of losing its premium paid for the option or that the
price of the underlying reference asset drops significantly below
the exercise prices and the Fund’s losses are substantial. FLEX
Options are also subject to the risk that they may be less liquid
than other securities, including standardized options. FLEX Options
are subject to trading risks and valuation risks because they are
market traded and centrally cleared by the OCC. The Fund is
designed to deliver returns that approximate the Underlying ETF if
Fund shares are bought on the first day of a Target Outcome Period
and held until the end of the Target Outcome Period, subject to the
buffer and the cap. If an investor purchases Fund shares after the
first day of a Target Outcome Period or sells shares prior to the
expiration of the Target Outcome Period, the returns realized by
the investor will not match those that the Fund seeks to
provide.
The Fund is subject to buffered loss risk, in which there can
be no guarantee that the Fund will be successful in its strategy to
provide downside protection against Underlying ETF losses; cap
change risk, in which the cap may rise or fall from one Target
Outcome Period to the next and is unlikely to remain the same for
consecutive Target Outcome Periods; and capped upside risk, where
the Fund will not participate in gains in the Underlying ETF beyond
the cap. The Fund is subject to Underlying ETF risk, in which the
value of an investment in the Fund will be related to the
investment performance of the Underlying ETF. Therefore, the
principal risks of investing in the Fund are closely related to the
principal risks associated with the Underlying ETF. As an ETF, the
Fund is subject to risks involved with: ETF shares trading risk
(including the risk of the shares trading at a premium or discount
to net asset value or the lack of an active trading market);
authorized participant concentration risk; and the risk of
transacting in cash versus in-kind. The Fund is subject to
technology sector risk, in that the Underlying ETF’s assets may be
concentrated in the technology sector and may be more affected by
the performance of the technology sector than a fund that is less
concentrated.
As a new and relatively small fund with limited operating
history, the Fund is subject to the risk that its performance might
not represent how it may perform long term and investments may have
disproportionate impact on performance. The Fund will be indirectly
exposed to equity and equity-related securities, where the value of
a particular security could go down resulting in a loss of money;
large capitalization companies, which may go in and out of favor
based on market and economic conditions; and derivative securities,
which may carry market, credit, and liquidity risks.
Derivatives are subject to counterparty risk, which is the
risk that the other party in the transaction will be unable or
unwilling to fulfill its contractual obligation, and the related
risks of having concentrated exposure to such a
counterparty.
The Fund is subject to management risk, in which the
subadviser will apply investment techniques and risk analyses in
making investment decisions for the Fund, but the subadviser’s
judgments about the attractiveness, value or market trends
affecting a particular security, industry or sector or about market
movements may be incorrect; and liquidity risk, in which the Fund
may invest in instruments that trade in lower volumes and are more
illiquid than other investments. Certain transactions in which the
Fund may engage may give rise to leverage which could result in
increased volatility of investment return.
The Fund intends to qualify as a regulated investment company
(“RIC”) under Subchapter M of the U.S. Internal Revenue Code of
1986, as amended (the “Code”); however, the federal income tax
treatment of certain aspects of the proposed operations of the Fund
are not clear, including the tax aspects of the Fund’s options
strategy (including the distribution of options as part of the
Fund’s in-kind redemptions), the possible application of the
“straddle” rules, and various loss limitation provisions of the
Code.
PGIM Laddered Fund Risks
The Fund is a “fund of funds” and is subject to Underlying
ETF and QQQ risks, in that the value of an investment in the Fund
will be related to the investment performance of the Underlying
ETFs and, in turn, QQQ. Therefore, the principal risks of investing
in the Fund are closely related to the principal risks associated
with the Underlying ETFs and its investments. Exposure to the
Underlying ETFs will also expose the Fund to a pro rata portion of
the Underlying ETFs’ fees and expenses. The fluctuating value of
the FLEX Options will affect the Underlying ETFs’ value and, in
turn, the Fund’s value. The Fund intends to generally rebalance its
portfolio to equal weight (i.e., 25% per Underlying ETF) quarterly,
in connection with the reset of the cap of each Underlying ETF. In
between such rebalances, market movements in the prices of the
Underlying ETFs may result in the Fund having temporary larger
exposures to certain Underlying ETFs compared to others. Exposure
to the Underlying ETFs will also expose the Fund to a pro rata
portion of the Underlying ETFs’ fees and expenses.
The Underlying ETFs invest in FLEX Options and, to the extent
that the Underlying ETF writes or sells an option, if the decline
or increase in the underlying asset is significantly below or above
the exercise price of the written option, the Underlying ETF and,
in turn, the Fund could experience a substantial or unlimited loss.
FLEX Options are also subject to the risk that they may be less
liquid than other securities, including standardized options;
trading risks, as they are required to be centrally cleared; and
valuation risks.
The Fund’s risk include, but are not limited to, target
outcome period risk, where in the event the Fund acquires shares of
an Underlying ETF after the first day of a Target Outcome Period or
disposes of shares prior to the expiration of the Target Outcome
Period, the value of the Fund’s investment in Underlying ETF shares
may not be buffered against a decline in the value of QQQ and may
not participate in a gain in the value of QQQ for the Fund’s
investment period; buffered loss risk, in which there can be no
guarantee that the Underlying ETFs will be successful in its
strategy to provide downside protection against losses; cap change
risk, in which a new cap for an Underlying ETF is established at
the beginning of each Target Outcome Period and is dependent on
prevailing market conditions and is unlikely to remain the same for
consecutive Target Outcome Periods; and capped upside risk, in that
since the Fund will acquire shares of the Underlying ETFs in
connection with creations of new shares of the Fund and during each
quarterly rebalance, the Fund typically will not acquire Underlying
ETF shares on the first day of a Target Outcome Period. In the
event that the Fund acquires Underlying ETF shares after the first
day of a Target Outcome Period and the Underlying ETF has risen in
value to a level near or at the cap, there may be little or no
ability for the Fund to experience an investment gain on those
Underlying ETF shares; however, the Fund will remain vulnerable to
downside risks. The Fund is subject to technology sector risk, in
that the Underlying ETF’s assets may be concentrated in the
technology sector and may be more affected by the performance of
the technology sector than a fund that is less
concentrated.
As an actively managed exchange-traded fund (ETF), the Fund
is subject to risks involved with: ETF shares trading risk
(including the risk of the shares trading at a premium or discount
to net asset value or the lack of an active trading market);
authorized participant concentration risk; and the risk of
transacting in cash versus in-kind. The Fund is subject to market
risks, including economic risks, as well as market disruption and
geopolitical risks (the value of investments may decrease, and
international conflicts and geopolitical developments may adversely
affect the U.S. and foreign financial markets, including increased
volatility); and portfolio turnover risk, in that the Fund’s
turnover rate may be higher than that of other ETFs which may
involve expenses and lead to the realization of capital
gains.
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. 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.
Investment products are distributed by Prudential Investment
Management Services LLC, member FINRA and SIPC. PGIM Quantitative
Solutions is a wholly owned subsidiary of PGIM. © 2025 Prudential
Financial, Inc. and its related entities. PGIM, PGIM Quantitative
Solutions, and the PGIM logo are service marks 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.
CONTROL # 4114138
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version on businesswire.com: https://www.businesswire.com/news/home/20250102861008/en/
MEDIA Leah Pappas 973-856-5709 leah.pappas@pgim.com
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