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PGIM Is Latest to Add Active Bond ETF: Portfolio Products

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What You Need to Know

  • PGIM is the fourth asset manager to launch an actively managed bond fund since March.
  • BlackRock has completed two reorganizations of closed-end muni bond funds.
  • The LGBTQ+ ESG100 ETF, focused on companies that align with the LGBTQ community, is set to launch May 18.

PGIM Investments has expanded its ETF lineup with the launch of the PGIM Active Aggregate Bond ETF (PAB), a diversified portfolio of investment-grade bonds.

The ETF has an expense ratio of 0.19% and under normal circumstances will invest at least 80% of assets in a variety of U.S. bonds — Treasuries, corporates and mortgage- and asset-backed  securities. The new ETF will be managed by senior members of PGIM’s Fixed Income multi-sector team, Richard Piccirillo, Lindsay Rosner and Stewart Wong.

“Given the current low-yield environment and potential for increased market volatility, there has been strong client demand for active fixed income solutions,” said Stuart Parker, president and CEO of PGIM Investments.

PGIM is one of several asset managers to launch actively managed bond funds in recent weeks. They include FidelityVanguard and J.P. Morgan Asset Management.

PGIM has two other actively managed bond ETFs — the PGIM Active High Yield Bond ETF (PHYL) and the PGIM Ultra Short Bond ETF (PULS).

BlackRock Reorganizes Closed-End Muni Funds

BlackRock has completed the reorganization of the BlackRock New York Municipal Income Quality Trust (BSE) and BlackRock New York Municipal Income Trust II (BFY) into the BlackRock New York Municipal Income Trust (BNY). It has also finalized the reorganization of the BlackRock Strategic Municipal Trust (BSD), BlackRock MuniYield Investment Quality Fund (MFT) and  BlackRock Municipal Income Investment Trust (BBF) into BlackRock Municipal Income Trust II (BLE).

Both reorganizations were effective April 12, and both were approved by the boards and shareholders of the funds involved.

Common shareholders of the closed funds received an amount of common shares of BNY and BLE equal to the aggregate net asset value of their holdings of the closed funds as of the close of business on April 9. Cash was distributed for any fractional shares.

BlackRock will update performance and certain other data for the BlackRock closed-end funds on a monthly basis on its website in the “Closed-end Funds” section of blackrock.com as well as certain other material information as necessary from time to time.

BNY Mellon Named Administrator for SkyBridge’s Bitcoin ETF

If and when the Securities and Exchange Commission approves the FirstTrust SkyBridge Bitcoin ETF Trust, which is one of several Bitcoin ETFs pending before the agency, BNY Mellon will provide ETF basket operations, order taking, fund accounting, fund administration and transfer agency services for the fund as administrator.

The ETF seeks to buy and sell Bitcoin “so that the total value of the Bitcoin held by the Trust is as close to 100% of the net assets of the Trust as is reasonably practicable to achieve,” according to its SEC filing.

“The growing interest in digital assets presents a compelling opportunity to allow investors to explore cryptocurrency and we are proud to work with First Trust to bring their new Bitcoin ETF to market,” said Alan Flanagan, global head of fund services, asset servicing, BNY Mellon, in a statement.

The Canadian asset servicing subsidiary of BNY Mellon is the fund administrator for the Purpose Bitcoin ETF from Toronto-based Purpose Investments, the world’s first Bitcoin ETF, which began trading in Toronto Stock Exchange in mid-February.

Three Bitcoin ETFs are trading on the Toronto Exchange and an ETF based on Ethereum, another cryptocurrency, is set to launch Tuesday. Its sponsor, CI Global Asset Management, already has a Bitcoin ETF trading on the Toronto exchange.

In February, BNY Mellon announced that it’s developing a multi-asset digital custody and administration platform that will accommodate both digital and traditional assets, led by Mike Demissie, head of Advanced Solutions.

Coming Soon: An ETF of LBGTQ-Friendly Companies

LGBTQ Loyalty Holdings Inc. plans to launch an ETF that invests in the top 100 corporations that align with the LGBTQ community across the country.

The LGBTQ+ ESG100 ETF will track the LGBTQ100 ESG Index (LGBTQ100). It is expected to be listed on the Nasdaq on May 18.

The underlying index represents the top 100 U.S. companies that nurture and promote equality in the workplace for employees of all gender and sexual orientation and have a strong track record of loyalty and brand awareness among the US-based LGBTQ community as well as a  history of consistently strong financial performance. The index attempts to capture market outperformance of these companies as compared to their competition. Since its inception in October 2019 through March 26, 2021, the index has outperformed the S&P by 5.42%, according to LGBTQ Loyalty Holdings.

“Investing in a well-constructed ETF that advances important values is a chance to do well while doing good,” said former Rep. Barney Frank, who is a member of the board of LGBTQ Loyalty Holdings.

The firm had announced in October its plans to launch the ETF in the first quarter of this year or sooner but ran into obstacles due the coronavirus pandemic, according to Billy Bean, the former Oakland Athletics general manager who is also a board member, along with tennis legend Martina Navratilova.

Currently technology, health care and financial stocks account for about 55% of the assets in the underlying index. The top five holdings are Amazon, Apple, Microsoft, Marriott International and Estee Lauder.

(Image: Shutterstock)