A strong management team and sound investment process underpin PGIM Total Return Bond ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy’s management team earns a High People Pillar rating. The strategy merits an Above Average Process Pillar rating.  The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People, Process 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

This strategy's managers focus on finding issues that have good fundamentals but generate a healthy ‎amount of income. That gives it a bias toward corporates, securitized assets, and smaller helpings in ‎non-U.S. developed- and emerging-markets debt, with generally little exposure to Treasuries and ‎agencies, though the team uses futures and swaps to manage duration.‎
The team has long gravitated toward corporate credit. In that context, the managers compare internal ‎credit scores against rating agencies', assign scores based on yield premiums versus the broad market, ‎and build rankings based on liquidity and event risk. Internally developed risk analytics are then ‎applied to portfolios.‎
The team targets a goal of 150 basis points of outperformance per year over the Aggregate Index, ideally averaging contributions of roughly 75 basis points from sector ‎allocation; 60 basis points from subsector and security selection; and 15 basis points from plays on ‎duration, currency, and the yield curve. With the use of its risk models, the team also looks to cap the ‎fund's tracking error at 250 basis points.‎
For all the risks the managers have taken, they have understood them going in and haven't generally been ‎blindsided. That, and strong execution of a straightforward, well-developed strategy, earn an Above ‎Average Process rating.‎

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point) Morningstar maps the covered vehicle’s Process Pillar to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning Process Pillar ratings to vehicles that follow the same strategy.

Above Average

Process

Impending senior leadership changes are notable, but the depth and experience of the remaining team, as well as the firm’s thoughtful succession planning, mitigates the impact. The strategy earns a High People rating. 
Senior portfolio manager Michael Collins plans to retire in April 2024, which grants this group ample time to adjust to the change. The senior portfolio managers that remain are seasoned: Robert Tipp (39 years of experience), Richard Piccirillo (32 years), Gregory Peters (29 years), and Lindsay Rosner (17 years). Tipp has managed this strategy since 2002, Piccirillo since 2012, and Peters since 2014. Tipp heads PGIM’s global bonds team and drives global rate positioning for several portfolios. Piccirillo specializes in MBS and asset-backed securities, while Peters doubles as the firm’s co-CIO. As part of regular succession planning, the firm appointed Rosner (who supports several of the firm’s multisector mandates) alongside the foursome in September 2021. This foresight in conjunction with Collins’ lengthy notice is emblematic of PGIM’s care in portfolio manager transitions. 
An army of portfolio managers and analysts support this crew, each counting more than 125 members in their ranks. The group also draws on a ‎team focused on proprietary analytics, risk management, and performance attribution.

Note: The People Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point), Morningstar maps the covered vehicle’s People Pillar ratings to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning People Pillar ratings to vehicles that follow the same strategy.

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.

Parent

PGIM Total Return Bond ETF

PTRB seeks total return from an actively managed, core portfolio of global investment-grade and high-yield fixed income securities with a maturity of greater than one year.

On Wednesday, PGIM Investments launched two new bond funds — the PGIM Total Return Bond ETF (PTRB) and the PGIM ESG High Yield Fund — expanding access to its flagship core-plus bond strategy and providing a high-yield option for fixed income investors committed to environmental, social, and governance (ESG) investing principles. PGIM is the $1.5 [.

News for PGIM Total Return Bond ETF ETF (PTRB)