Increased confidence in PGIM Jennison Better Future ETF's prospects relative to its Morningstar Category peers leads to an upgrade in this strategy's Morningstar Medalist Rating to Neutral from Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And momentum exposure is rooted in holding stocks currently on a winning streak. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

NVIDIA

Microsoft

Amazon

Apple

Ferrari

Osisko Gold Royalties

Moelis

MercadoLibre

Eli Lilly

Broadcom

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. PGIM Jennison Better Future ETF earns a Below Average Process Pillar rating. 

The process is bolstered by the experience of the management team, which averages 19 years at this fund. However, the rating is weakened by the parent firm's five-year retention rate of 72%, which suggests it could do more to retain its portfolio managers. The parent firm's subpar risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.9 stars, also holds the rating back. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 This strategy tends to hold larger, more growth-oriented companies compared with its average peer in the Global Large-Stock Growth Morningstar Category. Analyzing additional factors, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also demonstrated more exposure to high-momentum stocks over peers in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. In addition, this strategy has favored high-quality stocks compared to peers over the years, which could be a good option for downside risk protection. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. In this month, the strategy also had more exposure to the Quality factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer cyclical and technology relative to the category average by 16.9 and 15.1 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, underweight the average by 8.5 and 8.3 percentage points of assets, respectively. The strategy owns 32 securities and is quite concentrated. In particular, 53.0% of the fund’s assets are housed within the top 10 holdings, compared to the category average of 28.9%.

Below Average

Process

PGIM Jennison Better Future ETF earns an Average People Pillar rating. The team is backed by Mark B. Baribeau, the longest-tenured manager on the strategy, who provides over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.8 stars, reflecting below-average risk-adjusted performance in comparison to category peers. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 19 years of listed portfolio management experience.  None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

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 Jennison Better Future ETF

PJBF is actively managed, seeking long-term capital growth by adopting a socially and environmentally conscious approach that integrates United Nations Sustainable Development Goals (UN SDGs) into the selection process.

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PGIM, Prudential Financial's $1.2 trillion investment management arm, has launched four actively managed ETFs. According to PGIM, three of the funds invest in equities, while the fourth ETF targets fixed income.

News for PGIM Jennison Better Future ETF ETF (PJBF)