PGIM Investments has launched the first of four actively managed equity exchange traded funds that it plans to roll out in 2018, expanding the platform from the two actively managed fixed income ETFs launched earlier this year.
Sub-advised by QMA, the quantitative equity and global multi-asset solutions manager of PGIM, the PGIM QMA Strategic Alpha Large-Cap Core ETF (PQLC) seeks long-term growth of capital by investing primarily in large-cap stocks.
“Our research shows that investors frequently overpay for stocks that have a low probability of outsized returns or may provide lower risk. We’ve found a way to help protect investors from such behavioural biases.”
PGIM Investments is the worldwide distributor of retail products for PGIM, the USD1 trillion global investment management businesses of Prudential Financial, Inc (PRU) – a top-10 investment manager globally.
“Adding equity to our mix of ETF strategies gives investors a cost-effective way to access the equity markets while obtaining the potential benefits of active management,” says Stuart Parker, president and CEO of PGIM Investments. “Introducing these funds – managed by one of the industry’s pioneering quantitative managers – is a natural evolution in our effort to create new investment vehicles that meet investors’ evolving needs.”
Priced at 0.17 per cent, PQLC is approximately half the cost of the average passively managed ETF in the large blend category despite the active approach which targets higher returns.1 By the end of 2018, PGIM Investments plans to offer three more actively managed equity ETFs – the PGIM QMA Strategic Alpha Small-Cap Growth ETF (PQSG), the PGIM QMA Strategic Alpha Small-Cap Value ETF (PQSV), and the PGIM QMA Strategic Alpha International Equity ETF (PQIN).
Sub-advised by QMA, these four Strategic Alpha ETFs will seek to provide investors with access to broad multi-factor equity exposure while capitalising on investor bias. By being actively managed, these strategies give the portfolio managers discretion to rebalance and enhance portfolios more flexibly, as determined by market conditions and ongoing research.
“With more than 40 years of systematic active management expertise, we’ve created an investment product that delivers our best institutional research on multi-factor investing to the ETF market,” says QMA Chairman and CEO Andrew Dyson. “Our research shows that investors frequently overpay for stocks that have a low probability of outsized returns or may provide lower risk. We’ve found a way to help protect investors from such behavioural biases.”