Active Large Cap ETF Debuts

October 19, 2018

Yesterday, Prudential’s PGIM arm launched an actively managed ETF that is the first in a planned series of funds that will use a multifactor approach that relies on a quantitative process. The PGIM QMA Strategic Alpha Large-Cap Core ETF (PQLC) will seek to outperform the S&P 500 Index on a long-term basis.

The new ETF comes with an expense ratio of 0.17% and lists on the NYSE Arca.

The methodology considers value, quality and volatility data. among other criteria, when selecting PQLC’s holdings, with the fund’s managers having the discretion to use their own judgment rather than relying entirely on a model, the prospectus notes.

The pricing for the fund is extremely low. The only actively managed U.S.-focused ETFs that are cheaper are the Vanguard single-factor funds, which all charge 0.13%. The $75 million Vanguard U.S. Multifactor ETF (VFMF), however, is slightly more expensive than PQLC, charging 0.18%.

Prudential additionally has at least three more funds in the works that will implement this multifactor quantitative approach, two covering the U.S. small-cap growth and value, and one covering mainly non-U.S. equities.

Contact Heather Bell at [email protected]

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