PGIM Short Duration High Yield ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns a High People Pillar rating. The fund's assessment garners an Average Process 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

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. PGIM Short Duration High Yield ETF earns an Average Process Pillar rating.    The main driver of the rating is the size of its portfolio management team. With five portfolio managers at the helm, the fund is well-staffed. Low expenses across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also bolster the process. The pattern of low fees at the firm suggests 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.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks total return through a combination of current income and capital appreciation.  The fund will seek to achieve its investment objective by investing primarily in a diversified portfolio of high yield fixed income instruments that are rated below investment grade by a NRSRO or, if unrated, are considered by the subadviser to be of comparable quality. Under normal circumstances, and the fund invests at least 80% of its investable assets in high yield fixed income instruments that are rated below investment grade (commonly referred to as junk bonds) and other investments (including derivatives) with similar economic characteristics.

Average

Process

PGIM Short Duration High Yield ETF earns a High People Pillar rating. Robert Cignarella, the longest-tenured manager on the strategy, boasts over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.3 stars, reflecting below-average risk-adjusted performance compared to category peers. The team boasts an experienced corps of listed portfolio managers, with four others supporting Robert Cignarella. Together, they average 11 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.

High

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 Short Duration High Yield ETF

PSH is actively managed, investing in a broad portfolio of global fixed income securities that are rated below investment grade. The fund aims to maintain an average portfolio duration of three years or less.

PGIM Jennison Better Future ETF

PGIM Jennison Focused Mid-Cap ETF

PGIM Jennison International Opportunities ETF

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 Short Duration High Yield ETF ETF (PSH)