We have a long-term commitment to this, so our expectation is the other asset managers on our platform—including more fixed income—will result in more [ETF] products.
ETFA: What types of ETFs does your company envision rolling out? I assume it will be across the entire PGIM asset platform.
Benjamin: That’s our assumption as well. We believe there will be a place for actively managed ETFs across our asset managers. I think the beginning will focus on fixed income. And with QMA, which again is our quant equity and asset allocation group, there’s a place for smart beta or strategic beta or dynamic beta products that would fulfill that space.
We don’t have any additional filings [with the Securities and Exchange Commission] at this point, but from a strategy standpoint we expect to lever all of our asset managers. We have a long-term commitment and we’re not in this to launch just one product.
ETFA: Like with how Goldman Sachs has approached ETFs, do you see Prudential coming at this by using your active management expertise and ability to roll out low-cost funds as being your calling card with ETFs?
Benjamin: I think that’s right. On a high level, we view ETFs as another vehicle or wrapper to put our investment strategies into. We look at the ETF strategy as an extension of our making sure we have the right vehicles that our clients are looking for. And specifically with ETFs, we see this as an actively managed product designed with costs in mind.
ETFA: Overall, what does Prudential hope to achieve in the ETF space, and how important will ETFs become in Prudential’s overall product line?
Benjamin: It will become as important as our clients tell us in terms of them looking for these types of vehicles. As a global asset manager we want to have the right vehicles for our clients, and we’re seeing greater interest in ETFs. We didn’t want to look back five years from now and say, ‘I wish we developed that ETF platform because those vehicles took off even more than we expected.’ We think it’s the right strategic move to have this ETF optionality on our platform.