The fund is actively managed and competitively priced at 15 basis points, or 12 basis points lower than the average active ETF in its category. The active ETF also tries to generate a diversified source of alpha through high-quality positioning that covers consistent and sustainable sources across investment-grade sectors to help maintain stability of principal.

“We are firm believers in active management. So our first launch was an ultra-short, active bond fund – core capability of our $15 billion of institutional money… and we brought it out at passive prices,” Devaney said.

The ETF’s portfolio follows an ultra-short duration, risk-managed approach that helps fixed-income investors to hedge against rising rates while enhancing or diversifying a cash management strategy.

PGIM represents four public managers and they are in discussion with the asset managers to potentially launch additional active ETFs under their brand.

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.

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