PGIM Floating Rate Income ETF

PGIM Floating Rate Income ETF (PFRL) is an actively managed fund. It holds mostly floating rate bank loans to companies rated below investment grade, plus collateralized loan obligations (CLOs) and bank bonds. Because loan rates reset with short-term rates, its price has moved little when rates rise. It paid a 6.26% trailing yield, monthly, as of October 27, 2026. The drawback is cost: its 0.72% expense ratio is the highest of eight similar funds.

• Over the year to Oct 27, 2026, PFRL returned +5.0%, 1st of 8 among similar funds.
• Its worst full calendar year was 2025 (+6.3%); its best was 2023 (+13.8%).
• The deepest fall in its price history was 8.8% (Mar 3, 2025 to Apr 4, 2025), recovered by May 23, 2025.

As of Aug 31, 2026, the fund held 439 securities; the ten largest made up 10.58% of assets, and 4.96% sat in cash and money-market holdings.

The bonds mature in 8.1 years on average (weighted by size), with an average coupon of 6.55%.

• Over the three months to Aug 31, 2026, investors added a net $8.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.38%, +0.61%, +0.98%.

PFRL is actively managed, so it does not track an index. Under normal conditions, it puts at least 80% of its investable assets in floating rate loans and other floating rate debt. These pay a base lending rate plus a premium, and the rate resets, normally every month or quarter. The loans are arranged privately between a company and its lenders. Most are senior, meaning they are repaid ahead of stock and most bonds in a bankruptcy. Many are also backed by collateral.

The fund's subadviser combines top-down views on the economy, policy and markets with bottom-up research that gives each borrower an internal rating. It has no limits on credit quality or maturity, and most loans may be rated below investment grade, or "junk." Up to 20% may be unsecured loans and up to 25% foreign, including emerging markets. As of August 31, 2026, the fund had 439 holdings. Loans made up 68.6% of assets, bonds 13.1% and CLOs 12.5%. (CLOs are pools of loans split into layers of risk.) The largest positions were bonds from Goldman Sachs (1.7%) and Royal Bank of Canada (1.5%).

The fund trades often: portfolio turnover was 51%. It uses derivatives to adjust risk, including credit default swaps on credit indexes and Treasury futures. It may also create and redeem shares in cash. That can force it to sell holdings, which can lead to taxable capital gains for shareholders.

• PFRL charges 0.72% a year, versus an average of 0.22% for the similar funds below (8th of 8, cheapest first).
• The fee includes a 0.01% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $74 in the first year and $906 over 10 years (assuming a 5% annual return).

PFRL pays monthly income from loans whose rates reset with short-term rates, rather than offering growth or crisis protection.

PFRL could add monthly income that adjusts with short-term rates. Its trailing yield was 6.26% as of October 27, 2026. The fund launched in May 2022, so it has no record from the 2008 crisis or the 2020 crash, and its history doesn't cover the full 2022 bear market. Every full calendar year has been positive. The weakest was 2025, at 5.88%. Its deepest drop was 8.8%, from March 3 to April 4, 2025, and it recovered by May 23, 2025, about 1.6 months later.

That short record has not been tested by a long recession. In a recession, defaults on junk-rated loans can rise, and prices can stay down longer. That matters for anyone who may need to sell shares in a bad year. Costs are high: about $74 in the first year on $10,000, under the SEC's standard example. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).