Prudential’s PGIM expanded on its line of actively managed ETFs that incorporate the fund manager’s years of experience, adding two small-cap strategies that focus on a growth and value tilt.
Prudential recently launched the actively managed PGIM QMA Strategic Alpha Small-Cap Growth ETF (NYSEArca: PQSG) and the PGIM QMA Strategic Alpha Small-Cap Value ETF (NYSEArca: PQSV), which both come with a 0.29% expense ratio.
“Actively managed Strategic Alpha portfolios provide broad equity exposure, while capitalizing on investor bias. PGIM QMA Strategic Beta ETFs seek to identify and avoid stocks with undesirable characteristics,” according to PGIM Investments.
The PGIM QMA Strategic Alpha Small-Cap Growth ETF tries to generate long-term growth of capital. Specifically, the fund managers will try to outperform the Russell 2000 Growth Index over time.
Meanwhile, the PGIM QMA Strategic Alpha Small-Cap Value ETF tries to achieve long-term growth of capital and outperform the Russell 2000 Value Index over the long term.
QMA employs a proprietary multi-factor quantitatively driven investment process for the Fund. The stock selection process utilizes systematic tools that evaluate stocks based on various signals, such as value, quality and volatility, to differentiate between attractive and unattractive stocks, subject to risk constraints. QMA seeks to avoid high premium stocks likely to underperform. The investment management team exercises judgment when evaluating underlying data and positions recommended by its quantitative tools, according to the funds’ prospectus.
Both of the new active ETFs will be managed by Quantitative Management Associates’ Stephen Courtney, Managing Director, and Edward J. Lithgow, Vice President.
“QMA, the Fund’s subadvisor, believes that investors are willing to overpay for stocks that have a low probability of outsized returns or may provide lower risk. QMA’s active, bottom-up approach is designed to avoid these stocks with a multi-factor strategy that links value, quality, and volatility. The result: differentiated multi-factor portfolios, which provide broad exposure to an index while capitalizing on investor bias,” according to PGIM Investments.
For more information on new fund products, visit our new ETFs category.