PGIM launches 4 active ETFs
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Insights
The introduction of four actively managed exchange-traded funds (ETFs) by PGIM represents a strategic expansion in the company's product offerings. This move aligns with the broader industry trend towards active ETF management, which has been gaining traction among investors seeking alternatives to traditional passive index funds. The launch of these ETFs is a direct response to the growing appetite for investment vehicles that can potentially offer higher returns through active management.
The equity ETFs, with their focus on international opportunities, sustainable development goals and mid-cap equities, cater to niche markets and investor interests, particularly those with an eye on ESG (Environmental, Social and Governance) criteria and global diversification. The historical performance of the PGIM Jennison International Opportunities Fund, which the PJIO ETF is modeled after, suggests a track record of outperformance, an attribute that may attract investors.
On the fixed income side, the PGIM Short Duration High Yield ETF (PSH) offers an investment option for those looking to balance the pursuit of higher yields with the risk mitigation of shorter-duration securities. The expertise of PGIM Fixed Income could provide a competitive edge in managing the risks associated with high yield investments.
For stakeholders, the short-term implications include the potential for increased assets under management (AUM) and diversification of revenue streams for PGIM. In the long-term, the success of these ETFs could enhance PGIM's reputation as a versatile investment manager and attract more institutional and retail investors. However, the inherent risks of active management and market volatility could affect the performance and uptake of these ETFs. It is essential for investors to consider these factors alongside their investment goals and risk tolerance.
PGIM's launch of four new ETFs is indicative of the company's commitment to innovation and growth within the asset management industry. The decision to offer actively managed ETFs is a notable development as it reflects a shift in investor preference towards products that can offer the potential for outperformance in exchange for higher management fees compared to passive funds.
The differentiation of these ETFs, particularly the PGIM Jennison Better Future ETF, is significant as it taps into the increasing demand for sustainable investment solutions. This demand is driven by a growing awareness of social and environmental issues and the desire among investors to have a positive impact while seeking financial returns.
Moreover, the introduction of the PGIM Short Duration High Yield ETF addresses a specific market segment that desires exposure to high yield assets but with a reduced interest rate risk, which is particularly relevant in a fluctuating rate environment.
Considering the competitive landscape, PGIM's success with these ETFs will depend on their ability to deliver consistent performance, maintain competitive fees and effectively communicate the value proposition of active management to a market that has been dominated by passive strategies. The performance of these funds will be closely watched by industry participants as a barometer for the viability of active ETFs in a crowded marketplace.
Launch includes three equity ETFs and one short-duration high yield fixed income ETF
Stuart Parker, President and CEO, PGIM Investments (Photo: Business Wire)
With these launches, PGIM now offers a range of 14 actively managed ETFs across equity and fixed income asset classes.
“Building out our suite of actively managed ETFs is a priority for PGIM, and we have aggressive plans for future product development. We’re thrilled to launch four new ETFs subadvised by our affiliate managers to meet the accelerating demand for active ETFs from our clients,” said Stuart Parker, president and CEO of PGIM Investments.
New equity ETFs from Jennison
The three new equity ETFs, subadvised by Jennison Associates, seek long-term growth of capital with concentrated, high-conviction portfolios. Jennison’s long-term equity investment approach is rooted in deep, fundamental research and bottom-up security selection.
The PGIM Jennison International Opportunities ETF (PJIO) invests in non-
The PGIM Jennison Better Future ETF (PJBF) invests in companies that are anticipated to help address social and environmental challenges as identified by the United Nations Sustainable Development Goals. This may include, but is not limited to, companies that contribute to health and wellness, technological advances to improve productivity, connectivity, and financial and economic inclusion, and engagement in climate action.
Lastly, the PGIM Jennison Focused Mid-Cap ETF (PJFM) invests in medium-sized companies diversified across industries and sectors where the investment team sees the potential for durable earnings growth on an intermediate term basis.
A new offering from PGIM Fixed Income
The PGIM Short Duration High Yield ETF (PSH) seeks total return through a combination of current income and capital appreciation, investing in a diversified portfolio of shorter-duration high yield fixed income securities that are rated below investment grade. PSH is subadvised by PGIM Fixed Income, one of the largest and most experienced fixed income managers in the world.
Learn more about PGIM’s suite of actively managed ETFs.
ABOUT PGIM INVESTMENTS
PGIM Investments LLC and its affiliates offer more than 100 funds globally across a broad spectrum of asset classes and investment styles. All products draw on PGIM’s globally diversified investment platform that encompasses the expertise of managers across fixed income, equities, alternatives and real estate.
ABOUT JENNISON ASSOCIATES LLC
Founded in 1969, Jennison Associates offers a range of equity and fixed income investment strategies. Its equity expertise spans styles, geographies, and market capitalizations. Its fixed income capability includes investment-grade active and structured strategies of various durations. Original fundamental research, specialized investment teams, strong client focus, and highly experienced investment professionals are among the firm’s competitive distinctions. As of Sept. 30, 2023, Jennison managed
ABOUT PGIM FIXED INCOME
PGIM Fixed Income, with
ABOUT PGIM
PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU), a leading global investment manager with more than
Prudential Financial, Inc. (PFI) of
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1 The term PGIM as used in this announcement includes PGIM Investments LLC, an indirect, wholly owned subsidiary of Prudential Financial, Inc.
2 Morningstar Rankings as of Oct. 31, 2023: 1-year:
Consider a fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing.
Investing in mutual funds and ETFs involves risks. Some funds have more risk than others. The investment return and principal value will fluctuate and shares when sold may be worth more or less than the original cost and it is possible to lose money.
The Funds are actively managed exchange traded funds (ETFs) and thus do not seek to replicate the performance of a specified index. ETF shares are not individually redeemable from the Funds. Shares may only be redeemed directly from the Fund by Authorized Participants in Creation Units.
Fixed income investments are subject to credit, market, and interest rate risks (including duration risk and prepayment risk), and their value will decline as interest rates rise; call and redemption risk, where the issuer may call a bond held by the Fund for redemption before it matures and the Fund may lose income; liquidity risk, which exists when particular investments are difficult to sell; and emerging markets risk, which exposes the Fund to greater volatility and price declines.
Investment products are distributed by Prudential Investment Management Services LLC, a a member FINRA and SIPC. Jennison Associates is a registered investment advisor. PGIM Fixed Income is an affiliate of PGIM. Both are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
Investment products are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.
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MEDIA
Kylie Scott
+1 973 902 2503
kylie.scott@pgim.com
Source: PGIM
FAQ
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