NEWARK, N.J.--(BUSINESS WIRE)--Prudential Investments has launched the Prudential Short Duration Multi-Sector Bond Fund (NASDAQ:SDMAX), a fixed income strategy that offers investors the opportunity to invest in fixed income securities that offer the potential to perform well in a rising interest rate environment. Prudential Investments is the mutual fund business of Prudential Financial, Inc. (NYSE:PRU), offering a range of open and closed end funds.
The fund invests in a diversified portfolio of fixed income securities including, asset-backed securities, bank loans, corporate debt securities, commercial mortgage-backed securities, high yield and investment grade debt, collateralized debt obligations, U.S. Government debt and foreign debt. The fund seeks to maintain weighted average portfolio duration of one to three years and uses the Barclays US Government/Credit 1 – 3 Year Index as a benchmark.
“There are still plenty of opportunities in the fixed income markets, even in an uncertain interest rate environment,” said Stuart Parker, president of Prudential Investments. “With this new fund, we’re aiming to provide investors with competitive returns while addressing concerns for interest rates and the ongoing search for yield.”
The fund is actively managed by Prudential Fixed Income’s core plus team, which includes Mike Collins, Richard Piccirillo and Robert Tipp using a collaborative fundamental, bottom-up, research-based subsector and security selection process. The portfolio managers also run the $2.7 billion Prudential Total Return Bond Fund (NASDAQ:PDBAX) and the $1.8 billion Prudential Absolute Return Bond Fund (NASDAQ:PADAX) (AUM as of 9/30/2013).
Demand for lower duration fixed income products, which tend to be more defensive in a rising interest rate environment and also offer the potential for competitive yield has steadily increased over the past several years as risk-averse investors remain wary in this uncertain interest rate environment.
“In terms of the market cycle, we find that the point in an economic recovery when investors' fear of Fed tightening flares-up often represents a good point to add to fixed income exposure,” Collins said. “The right opportunities may yield significantly higher returns than cash, guard against a potential rise in rates and offer investors portfolio diversification.”
Collins added, “We expect solid performance from the higher-yielding, credit sensitive fixed income products, including high yield, emerging markets, structured products, as well as investment grade corporate and medium grade municipal bonds.”
The fund is available in the following share classes: A: SDMAX, C: SDMCX, Q: SDMQX, Z: SDMZX.
Prudential Investments is the mutual fund business of Prudential Financial, Inc., offering a range of open and closed end funds. Please visit http://www.prudentialfunds.com for more information.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of September 30, 2013, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.
Barclays US Government/Credit 1 – 3 Year Index is an index consisting of Treasury or government agency securities and investment grade corporate debt securities with maturities of one to three years. Indices are unmanaged and an investment cannot be made directly into an index.
Duration measures the approximate price volatility of a bond or bond portfolio for a small change in interest rates.
Mutual fund investing involves risk. Some mutual funds have more risk than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost, and it is possible to lose money. There is no guarantee a fund’s objectives will be achieved. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. The Fund may invest in high yield ("junk") bonds, which are subject to greater credit and market risks; foreign securities, which are subject to currency fluctuation and political uncertainty; and mortgage-backed and asset-backed securities, which are subject to prepayment, extension, and interest rate risks. The risks associated with each fund are explained more fully in each fund’s respective prospectus. Diversification does not assure a profit or protect against a loss in declining markets.
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. Read the prospectus and summary prospectus carefully before investing.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. Prudential Fixed Income is a unit of Prudential Investment Management, Inc. (PIM), and a registered investment adviser. Both are Prudential Financial companies. Prudential Investments, Prudential, the Prudential logo, the Rock symbol and Bring Your Challenges are service marks of Prudential Financial, Inc., and its related entities, registered in many jurisdictions worldwide.