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Prudential Investments rolls out short duration bond fund

Prudential Investments has unveiled Short Duration Multi-Sector Bond Fund (SDMAX), a fixed income strategy that provides investors an opportunity to invest in fixed income securities.

The company, which is the mutual fund business of Prudential Financial (PRU), said that the latest multi-sector fund offers fixed income opportunities amid rising interest rates.

In order to reduce the risk, the fund invests in asset-backed securities, bank loans, corporate debt securities, commercial mortgage-backed securities.

Additionally, it also invests in high yield and investment grade debt, collateralized debt obligations, US Government debt and foreign debt.

Leveraging the Barclays US Government/Credit 1 – 3 Year Index as a benchmark, the fund seeks to maintain weighted average portfolio duration of one to three years.

Prudential Investments president Stuart Parker said there are still plenty of opportunities in the fixed income markets, even in an uncertain interest rate environment.

"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," Parker added.

Incorporating a collaborative fundamental, bottom-up, research-based subsector and security selection process, the fund is being managed by Prudential Fixed Income’s core plus team, which comprises Mike Collins, Richard Piccirillo and Robert Tipp.