Product & Services Launches – 1/4/23

PGIM Launches 2 Buffer ETF Series

PGIM has launched two buffer exchange-traded-fund series, the PGIM U.S. Large-Cap Buffer 12 ETF series and the PGIM U.S. Large-Cap Buffer 20 ETF series, listed on the Cboe BZX Exchange. The series will consist of a total of 24 ETFs, with 12% and 20% buffer ETFs launching on a rolling basis the first business day of each month throughout the year.

“The ETFs will be offered at a 0.50% net expense ratio, making them the lowest-cost one-year target-outcome buffer ETFs in the marketplace,” PGIM wrote in a statement.

The buffer ETFs provide exposure to an ETF that tracks the performance of the S&P 500 Index. The ETFs seek to match the return of the underlying fund up to a predetermined upside cap, while providing a limited downside buffer against the first 12% (for the PGIM U.S. Large-Cap Buffer 12 ETF series) or 20% (for the PGIM U.S. Large-Cap Buffer 20 ETF series) of the underlying fund’s losses over a one-year target-outcome period.

“Buffer ETFs provide investors with a more narrowly defined outcome range, which can offer more predictability in volatile markets,” Stuart Parker, president and CEO of PGIM Investments, said in a statement.

Federated Hermes Launches Total Return Bond ETF

Federated Hermes Inc., an investment manager headquartered in Pittsburgh, announced the launch of the Federated Hermes Total Return Bond ETF.

The new actively managed ETF seeks to provide total return by investing in a broad mix of bond sectors that the portfolio management team believes will benefit from changes in economic and market conditions, a process similar to the core-plus investment strategy of the Federated Hermes Total Return Bond Fund.

The Total Return Bond ETF combines top-down decisionmaking with bottom-up security selection to build a diversified, risk-managed portfolio. The ETF invests primarily in U.S. government, mortgage-backed and investment-grade corporate fixed income with additional exposure to sectors such as high yield and emerging markets debt.

“During times of market volatility, fixed-income securities can be an important part of a diversified portfolio,” John Fisher, president and CEO of Federated Advisory Companies, said in a statement. “By offering the rigorously vetted approach used for our recognizable fixed-income products in an ETF structure, Federated Hermes remains well-poised to deliver on investment client mandates in a variety of formats.”

SoFi Accelerates Retirements With 2% Match on IRA Contributions 

SoFi Technologies Inc., a digital personal finance company, announced that SoFi Invest will offer a 2% match on all eligible IRA contributions through Tax Day on April 15. SoFi members can earn the IRA match on all new ACH transfers into IRA accounts.

“This new offer doubles the previously announced 1% IRA match offered in late 2023, and empowers SoFi Invest members to make the most of their IRA contributions and accelerate their retirement savings during tax season,” according to a company statement.

Brian Walsh, head of advice and planning at SoFi, said in an email response that for years research has shown that employer matches are positively associated with employee contributions.

“We know that saving money for retirement serves two benefits: growing a nest egg for retirement and reduced living expenses which leads to less money needed to retire,” Walsh said. “An IRA match simply applies the valuable lessons learned from employer sponsored plans to help people save for the future. For employees that already have an employer match this is nice additional incentive to save, but for those without matching contributions this can somewhat level the playing field as they save for their future.”