PGIM Ultra Short Bond ETF PULS - Good ultra short-term total bond fund ETF

PGIM Ultra Short Bond ETF (PULS) is a good low expense (0.15%) ultra short-term total bond fund ETF. It invests into investment grade (AA rated) corporate and government bonds with effective duration of 3 months.

It offers 0.50-1% better return than AAA rated ultra short treasury bond ETFs such as SGOV. I believe such extra return might be worth, in spite of little bit lower rating.

It's going forward yield to maturity is currently 6.04%

Updated on Jan 12, 2025:

PULS has continued outperforming it's underlying index 4 years in a row. It returned 6.12% last year (we discussed about it last year in Feb) as compared to ultrashort index's 4.39%. Hope it continues it's outperformance this year too. 

This AA rated ultrashort (currently less than 1 month duration) Total bond fund ETF seems to be much better option than most of short term bank CD or high yielding savings account or most of money market funds.

As Fed has cut interest rate few times last year, it's going forward annual return (aka "Yield to Maturity") is currently 5.21%. 

Since this *ultrashort* duration bond fund is pretty much interest rate change *insensitive*, we are likely to get this return (less some adjustment for interest rate cuts during the year) during current year.

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