The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  PGIM Portfolio Ballast ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in the Europe-Developed region and the industrials sector compared with category peers. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. PGIM Portfolio Ballast ETF earns an Average Process Pillar rating. The predominant contributor to the rating is the experience of the management team, which averages 24 years at this fund. Low expenses across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also contribute to the process. The pattern of low costs at the firm indicates that it is focused on delivering strong results for investors. Lastly, the process is limited by the parent firm's five-year retention rate of 72%, which suggests it could do more to retain its portfolio managers.

 Its equity sleeve has a consistent bias toward both larger market-cap and growth-oriented stocks versus the category average. The strategy has three region or sector biases compared to category peers. The most meaningful is its consistent underweight in the Developed Europe region. Additionally, the portfolio has maintained an underweight bias to the industrials sector. And finally, in the fund's most recent portfolio, more assets were allocated to developed markets regions. Although, this bias has not existed over time. 

 The portfolio is overweight in technology by 6.5 percentage points in terms of assets compared with the category average, and its communication services allocation is similar to the category. The sectors with low exposure compared to category peers are industrials and financial services, with industrials underweighting the average portfolio by 2.6 percentage points of assets and financial services similar to the average. The portfolio is overweight in North America by 14.9 percentage points compared with the category average, and Emerging Europe's allocation is similar to its peers. The regions with low exposure compared to their category peers are Developed Europe and United Kingdom, with Developed Europe underweight the average by 6.5 percentage points and United Kingdom similar to the average.

Average

Process

PGIM Portfolio Ballast ETF earns a Below Average People Pillar rating. The team is bolstered by the portfolio managers' outperformance of peers at the funds they run, as measured by their combined three-year manager excess returns. However, the rating is held back by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.9 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year retention rate of 72% also holds the team back.


Devang Gambhirwala, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 3.3 stars, demonstrating above-average risk-adjusted performance versus category peers. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 24 years of listed portfolio management experience. The team's personal investments in the fund are unsubstantial, with the maximum investment by any one manager being between $10,000 and $50,000. That amount is too small to help align managers' interests with the fund's investors.

Below Average

People

PGIM, the asset-management arm of Prudential Financial, has an attractive investment culture that has resulted in a strong lineup of funds, especially in fixed-income and growth equity. It earns an Above Average Parent rating. 
The PGIM funds are subadvised by at-scale subsidiaries of the firm that manage over USD 90 billion in assets each, mainly through Jennison Associates, PGIM Fixed Income, PGIM Quantitative Solutions, and PGIM Real Estate. The first two of these are standouts. Jennison runs the firm's actively managed fundamental equity funds with an established, repeatable investment process; PGIM Fixed Income, which includes Morningstar's Fixed-Income Fund Managers of 2017, remains well-resourced and risk-aware, while the early-2022 broadening of the leadership team has set the stage for sensible succession planning. PGIM Quantitative Solutions and PGIM Real Estate don't stand out as much but are still solid, though the former has dealt with several key management departures in recent years.
PGIM's lineup of 100-plus funds and ETFs spans the globe, but the firm’s assets are concentrated in the United States. At the end of June 2022, funds globally totaled USD 169 billion, only about 13% of PGIM's $1.3 trillion total assets under management; the rest is mostly in institutional accounts and the general account of Prudential's insurance company.

Above Average

Parent

PGIM Portfolio Ballast ETF

PBL actively manages a portfolio of derivatives, toggling exposure between US large-cap equities and US Treasuries. The fund aims to provide long-term capital growth while limiting downside losses.  

PGIM Investments has launched three actively managed ETFs: the PGIM Jennison Focused Growth ETF (NYSE Arca: PJFG), the PGIM Jennison Focused Value ETF (NYSE Arca: PJFV), and the PGIM Portfolio Ballast ETF (NYSE Arca: PBL). These new funds complement PGIM's suite of actively managed fixed income ETFs and bring its lineup of active ETFs to eight.

PGIM Lists Growth, Value and Multi-Asset ETFs

Prudential Financial

NEWARK, N.J.--( BUSINESS WIRE )--PGIM Investments has launched three actively managed ETFs — the PGIM Jennison Focused Growth ETF (PJFG), the PGIM Jennison Focused Value ETF (PJFV) and the PGIM Portfolio Ballast ETF (PBL).

News for PGIM Portfolio Ballast ETF ETF (PBL)