UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number: | 811-23324 | |
Exact name of registrant as specified in charter: | PGIM ETF Trust | |
Address of principal executive offices: | 655 Broad Street, 17th Floor | |
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Andrew R. French | |
655 Broad Street, 17th Floor | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 8/31/2019 | |
Date of reporting period: | 8/31/2019 |
Item 1 – Reports to Stockholders
PGIM ULTRA SHORT BOND ETF (NYSE Arca: PULS)
ANNUAL REPORT
AUGUST 31, 2019
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (pgiminvestments.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank).
You may elect to receive all future reports in paper free of charge. You should contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account.
To enroll in e-delivery, go to pgiminvestments.com/edelivery
Objective: Total return through a combination of current income and capital appreciation, consistent with preservation of capital |
Highlights(unaudited)
• | The Fund emphasized spread assets, including short-term investment-grade corporates with relatively equal percentages of financial company debt, utilities, and industrials ranging across the rating spectrum of AA to BBB. Other spread sector assets include commercial mortgage-backed securities, collateralized loan obligations, and to a lesser extent, emerging markets debt. This positioning helped the Fund outpace the ICE BofAML USD LIBOR 3-Month CM Index (the Index) during the reporting period. |
• | Versus the Index, the Fund was appropriately positioned to capture excess returns with appropriate levels of risk while being aware of liquidity considerations and a relatively stable NAV. During the period, there were no unexpected developments in the interest rate environment or credit spreads that limited these results. |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Exchange-traded funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies.© 2019 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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PGIM Ultra Short Bond ETF | 3 |
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Dear Shareholder:
We hope you find the annual report for the PGIM Ultra Short Bond ETF informative and useful. The report covers performance for the 12-month period that ended August 31, 2019.
While the US economy remained healthy, with rising corporate profits and strong job growth, the Federal Reserve cut interest rates late in the period for the first time since the Great Recession more than a decade ago. After nine rate increases in recent years, the cut was a proactive attempt by the Fed to extend the longest domestic economic expansion on record as growth in many other regions weakened. China in particular showed signs of slowing amid trade tensions with the US, and turmoil in the United Kingdom continued as it negotiated an exit from the European Union.
Despite the growing US economy, volatility returned to the equity markets during the period. After corporate tax cuts and regulatory reforms helped boost US stocks early in the period, equities declined significantly at the end of 2018 on concerns about China’s economy, a potential global trade war, higher interest rates, and worries that profit growth might slow. Stocks reversed course early in 2019, rising sharply after the Fed moderated its position on additional rate hikes for the remainder of the year. For the period overall, large-cap US equities rose while small-cap US stocks fell. Stocks also declined in developed foreign and emerging markets.
The overall US bond market posted strong returns during the period on a significant rally in interest rates that saw the 10-year US Treasury yield decline from around 3% to 2%. Investment grade corporate bonds led the way with a double-digit gain, while corporate high yield and municipal bonds each had a high single-digit return. Globally, bonds in developed markets delivered solid returns, while emerging markets debt also posted positive results. A continuing trend during the period was the inversion of a portion of the US Treasury yield curve, as the yield on certain shorter maturities exceeded the yield on the 10-year bond.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is atop-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Ultra Short Bond ETF
October 15, 2019
PGIM Ultra Short Bond ETF | 5 |
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold and redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling(800) 225-1852.
Average Annual Total Returns as of 8/31/19 | ||||
One Year (%) | Since Inception (%) | |||
Net Asset Value (NAV) | 2.80 | 2.76 (4/5/18) | ||
Market Price* | 2.79 | 2.77 (4/5/18) | ||
ICE BofAML 3-Month T Bill Index | ||||
2.36 | 2.23 | |||
ICE BofAML USD 3-Month Deposit Offered Rate CM Index | ||||
2.62 | 2.55 | |||
Lipper Ultra-Short Obligations Funds Average | ||||
2.75 | 2.61 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the market price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the ICE BofAML 3-Month T Bill Index and the ICE BofAML USD 3-Month Deposit Offered Rate CM Index by portraying the initial account values at the
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commencement of operations (April 5, 2018) and the account values at the end of the current fiscal year (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on April 5, 2018, while the benchmark and the Index assume that the initial investment occurred on March 31, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the sale or redemption of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
ICE BofAML 3-Month T Bill Index—The ICE BofA Merrill Lynch 3-Month US Treasury Bill Index tracks the performance of US dollar-denominated US Treasury Bills publicly issued in the US domestic market with a remaining term to final maturity of 3 months.
ICE BofAML USD 3-Month Deposit Offered Rate CM Index—The ICE BofA Merrill Lynch US Dollar3-Month Deposit Offered Rate Constant Maturity Index is an unmanaged index that tracks the performance of a synthetic asset paying LIBOR to a stated maturity. The Index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that current day fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument.
ICE BOFA MERRILL LYNCH IS LICENSING THE BOFA MERRILL LYNCH INDICES “AS IS,” MAKES NO WARRANTIES REGARDING THE SAME, DOES NOT GUARANTEE THE SUITABILITY, QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE ICE BOFA MERRILL LYNCH INDICES OR ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THEIR USE, AND DOES NOT SPONSOR, ENDORSE, OR RECOMMEND THE FUND, OR ANY OF ITS PRODUCTS OR SERVICES.
Lipper Ultra-Short Obligations Funds Average—The Lipper Ultra-Short Obligation Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Ultra-Short Obligation Funds universe for the periods noted. Funds in the Lipper Average are funds that invest primarily in investment-grade debt issues or better and maintain a portfolio dollar weighted average maturity between 91 days and 365 days.
Investors cannot invest directly in an index or average. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
PGIM Ultra Short Bond ETF | 7 |
Your Fund’s Performance(continued)
Credit Quality expressed as a percentage of total investments as of 8/31/19 (%) | ||||
AAA | 21.7 | |||
AA | 19.7 | |||
A | 33.6 | |||
BBB | 23.7 | |||
Not Rated | –0.9 | |||
Cash and Cash Equivalents | 2.2 | |||
Total Investments | 100.0 |
Source: PGIM Fixed Income
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by a NRSRO and may include derivative instruments that could have a negative value. Credit ratings are subject to change.
Negative weightings may result from specific circumstances (including timing differences between trade and settle dates of securities purchased by the funds) and/or the use of certain financial instruments, including derivatives, which may be used to gain or reduce market exposure and/or risk management.
Distributions and Yields as of 8/31/19 | ||||||
Total Dividends Paid for 12 Months ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||
1.35 | 2.35 | 2.35 |
*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.
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Strategy and Performance Overview(unaudited)
How did the Fund perform?
ThePGIM Ultra Short Bond ETF returned 2.80% based on net asset value in the 12-month reporting period that ended August 31, 2019, outperforming the 2.62% return of the ICE BofAML USD 3-Month Deposit Offered Rate CM Index (the Index), the 2.36% return of the ICE BofAML3-Month T-Bill Index, and the 2.75% return of the Lipper Ultra Short Obligations Funds Average.
What were the market conditions?
• | During the reporting period, the Federal Reserve (the Fed) increased the federal funds rate twice in 0.25% increments from 2.00% to 2.50% in September and December of 2018 before executing its first interest rate cut since 2008 in July 2019. At its July meeting, in keeping its easing message consistent, the Fed also announced that it would pull the end date of its balance sheet run-off forward by two months to August 2019. |
• | Overall, US economic growth was resilient during the period, despite the waning effects of last year’s fiscal stimulus, a weaker global economy, and an impasse in US-China trade talks. Indeed, the Fed’s median projection for gross domestic product growth for 2019 was raised slightly to 2.2%, followed by a 2.0% pace in 2020. While the labor market and household spending have remained strong, business investment and exports have weakened. And although personal consumption expenditure inflation has reaccelerated in recent months, it remains below 2% on a year-over year basis. |
• | In the short maturity segment of the bond market where the Fund focuses its investments, yields dropped to a lesser degree than they did at the longer end, with three-month and two-year Treasuries falling 23 and 112 basis points (bps), respectively, during the period, versus 135 bps for the bellwether 10-year Treasury note. (A basis point is 0.01%). The three-month London Interbank Offered Rate (LIBOR), from which the Fund’s floating-rate securities are set and reset, fell 18 bps to 2.14% for the period, after rising to as high as 2.82% near the end of 2018. |
• | In the short-term credit markets, investment-grade credit spreads widened slightly over the period. (Credit spreads are yield differentials between corporate bonds and US Treasuries of comparable maturity.) The Bloomberg Barclays 1-3 Year Credit Index, a proxy for the short-term spread market, outperformed similar short-duration Treasuries by 0.72% during the period. |
What worked?
The Fund emphasized spread assets, including short-term investment-grade corporates with relatively equal percentages of financial company debt, utilities, and industrials ranging across the rating spectrum of AA to BBB. Other spread sector assets include commercial mortgage-backed securities, collateralized loan obligations, and to a lesser extent, emerging markets debt. This positioning helped the Fund outpace the ICE BofAML USD LIBOR3-Month CM Index (the Index) during the reporting period.
PGIM Ultra Short Bond ETF | 9 |
Strategy and Performance Overview(continued)
Versus the Index, the Fund was appropriately positioned to capture excess returns with appropriate levels of risk while being aware of liquidity considerations and a relatively stable NAV. During the period, there were no unexpected developments in the interest rate environment or credit spreads that limited these results.
What didn’t work?
There were no material detractors from the Fund’s performance during the reporting period.
Did the Fund use derivatives and, if so, how did they affect performance?
During the reporting period, the Fund used interest rate swaps to help manage duration positioning and yield curve exposure. Duration measures a portfolio’s sensitivity to changes in interest rates. These instruments allowed the Fund to capture higher yields available farther out on the short-term portion of the yield curve and in spread-sector assets versus Treasuries, while mitigating interest rate risk.
Current outlook
While the near-term risks in the US have been reduced with a budget and debt ceiling deal poised for completion in Congress and US-China trade discussions so far avoiding a further round of tariff increases, medium-term risks remain. Trade negotiations continue to create uncertainties for businesses, US fiscal stimulus is waning, and weaker economic growth in much of the rest of the world imparts downside risks for the US economy. PGIM Fixed Income expects additional monetary policy easing in the second half of 2019 to support economic growth and a pickup in inflation toward the Fed’s 2% target.
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As a shareholder of the Fund, you incur ongoing costs, including investment management fees. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.
The example is based on an investment of $1,000 held through the period ended August 31, 2019. The example is for illustrative purposes only.
Actual Expenses
The information under each column in the line entitled “Actual” on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information under each column in the line entitled “Hypothetical” on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, brokerage commissions paid on purchases and sales of Fund shares. Therefore, the ending account values and expenses paid for the period are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Ultra Short Bond ETF | 11 |
Fees and Expenses(continued)
PGIM Ultra Short Bond ETF | Beginning Account Value March 1, 2019 | Ending Account Value August 31, 2019 | Annualized Expense Ratio based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Actual | $ | 1,000.00 | $ | 1,015.10 | 0.15 | % | $ | 0.76 | ||||||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.45 | 0.15 | % | $ | 0.77 |
*Fund expenses (net of fee waivers or subsidies, if any) are equal to the annualized expense ratio (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended August 31, 2019, and divided by the 365 days in the Fund’s fiscal year ended August 31, 2019 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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Schedule of Investments
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
LONG-TERM INVESTMENTS 85.3% | ||||||||||||||||
ASSET-BACKED SECURITIES 9.9% | ||||||||||||||||
Collateralized Loan Obligations 9.9% |
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Adams Mill CLO Ltd. (Cayman Islands), Series2014-1A, Class A1R, 144A, 3 Month LIBOR + 1.100% | 3.403 | %(c) | 07/15/26 | 741 | $ | 740,609 | ||||||||||
Allegro CLO IV Ltd. (Cayman Islands), Series 2016- 1A, Class AR, 144A, 3 Month LIBOR + 1.150% | 3.453 | (c) | 01/15/30 | 1,000 | 1,000,117 | |||||||||||
Anchorage Capital CLO 8 Ltd. (Cayman Islands), | 3.256 | (c) | 07/28/28 | 295 | 294,144 | |||||||||||
Atrium XII (Cayman Islands), Series 12A, Class AR, 144A, 3 Month LIBOR + 0.830% | 3.108 | (c) | 04/22/27 | 272 | 271,816 | |||||||||||
Avery Point III CLO Ltd. (Cayman Islands), | 3.420 | (c) | 01/18/25 | 466 | 466,566 | |||||||||||
Ballyrock CLO Ltd. (Cayman Islands), Series 2016- 1A, Class AR, 144A, 3 Month LIBOR + 1.350% | 3.653 | (c) | 10/15/28 | 625 | 625,903 | |||||||||||
Battalion CLO VII Ltd. (Cayman Islands), | 3.343 | (c) | 07/17/28 | 2,300 | 2,293,344 | |||||||||||
Battalion CLO X Ltd. (Cayman Islands), | 3.533 | (c) | 01/24/29 | 2,000 | 2,003,284 | |||||||||||
Catamaran CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series2013-1A, Class AR, 144A, 3 Month LIBOR + 0.850% | 3.106 | (c) | 01/27/28 | 450 | 447,453 | |||||||||||
Series2014-2A, Class A1R, 144A, 3 Month LIBOR + 1.400% | 3.700 | (c) | 10/18/26 | 642 | 641,994 | |||||||||||
CIFC Funding Ltd. (Cayman Islands), Series 2015- 2A, Class AR, 144A, 3 Month LIBOR + 0.780% | 3.083 | (c) | 04/15/27 | 570 | 568,083 | |||||||||||
Elevation CLO Ltd. (Cayman Islands), Series 2015- 4A, Class AR, 144A, 3 Month LIBOR + 0.990% | 3.290 | (c) | 04/18/27 | 1,126 | 1,126,139 | |||||||||||
Ellington CLO IV Ltd. (Cayman Islands), Series2019-4A, Class A, 144A, 3 Month LIBOR + 1.840% | 4.143 | (c) | 04/15/29 | 1,900 | 1,907,173 | |||||||||||
Flagship CLO VIII Ltd. (Cayman Islands),Series 2014-8A, Class ARR, 144A, 3 Month LIBOR + 0.850% | 3.172 | (c) | 01/16/26 | 640 | 639,055 | |||||||||||
Flagship VII Ltd. (Cayman Islands), Series2013-7A, Class A1R, 144A, 3 Month LIBOR + 1.120% | 3.398 | (c) | 01/20/26 | 134 | 133,985 | |||||||||||
Flatiron CLO Ltd. (Cayman Islands), Series 2015- 1A, Class AR, 144A, 3 Month LIBOR + 0.890% | 3.193 | (c) | 04/15/27 | 615 | 615,758 | |||||||||||
HPS Loan Management Ltd. (Cayman Islands), | 3.282 | (c) | 01/20/28 | 1,500 | 1,500,000 | |||||||||||
ICG US CLO Ltd. (Cayman Islands), Series2015-1A, Class A1R, 144A, 3 Month LIBOR + 1.140% | 3.443 | (c) | 10/19/28 | 1,000 | 997,764 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 13 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Collateralized Loan Obligations (cont’d.) |
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JMP Credit Advisors CLO IV Ltd. (Cayman Islands),Series 2017-1A, Class AR, 144A, 3 Month LIBOR + 1.280% | 3.467 | %(c) | 07/17/29 | 1,250 | $ | 1,253,350 | ||||||||||
KVK CLO Ltd. (Cayman Islands), Series2018-1A, Class A, 144A, 3 Month LIBOR + 0.930% | 3.066 | (c) | 05/20/29 | 500 | 497,936 | |||||||||||
Limerock CLO III LLC (Cayman Islands), Series2014-3A, Class A1R, 144A, 3 Month LIBOR + 1.200% | 3.478 | (c) | 10/20/26 | 202 | 201,766 | |||||||||||
Madison Park Funding XXX Ltd. (Cayman Islands),Series 2018-30A, Class A, 144A, 3 Month LIBOR + 0.750% | 3.053 | (c) | 04/15/29 | 325 | 321,074 | |||||||||||
Man GLG US CLO Ltd. (Cayman Islands), Series2018-2A, Class A1R, 144A, 3 Month LIBOR + 1.240% | 3.543 | (c) | 10/15/28 | 1,750 | 1,747,147 | |||||||||||
Midocean Credit CLO V (Cayman Islands), Series2016-5A, Class AR, 144A, 3 Month LIBOR + 1.120% | 3.423 | (c) | 07/19/28 | 2,250 | 2,246,878 | |||||||||||
Mountain View CLO Ltd. (Cayman Islands),Series 2013-1A, Class AR, 144A, 3 Month LIBOR + 1.250% | 3.590 | (c) | 10/12/30 | 500 | 497,920 | |||||||||||
Mountain View CLO XIV Ltd. (Cayman Islands),Series 2019-1A, Class A1, 144A, 3 Month LIBOR + 1.440% | 4.058 | (c) | 04/15/29 | 425 | 426,043 | |||||||||||
Oaktree CLO Ltd. (Cayman Islands), Series 2015- 1A, Class A1R, 144A, 3 Month LIBOR + 0.870% | 3.148 | (c) | 10/20/27 | 2,250 | 2,248,310 | |||||||||||
Ocean Trails CLO IV (Cayman Islands), Series2013-4A, Class AR, 144A, 3 Month LIBOR + 0.900% | 3.076 | (c) | 08/13/25 | 524 | 524,107 | |||||||||||
Ocean Trails CLO VI (Cayman Islands), Series2016-6A, Class AR, 144A, 3 Month LIBOR + 1.150% | 3.453 | (c) | 07/15/28 | 1,150 | 1,150,182 | |||||||||||
OZLM XII Ltd. (Cayman Islands), Series2015-12A, Class A1R, 144A, 3 Month LIBOR + 1.050% | 3.316 | (c) | 04/30/27 | 300 | 299,074 | |||||||||||
OZLM XIII Ltd. (Cayman Islands), Series2015-13A, Class A1R, 144A, 3 Month LIBOR + 1.080% | 3.346 | (c) | 07/30/27 | 1,350 | 1,345,733 | |||||||||||
OZLM XV Ltd. (Cayman Islands), Series2016-15A, Class A1, 144A, 3 Month LIBOR + 1.490% | 3.768 | (c) | 01/20/29 | 250 | 249,994 | |||||||||||
Palmer Square CLO Ltd. (Cayman Islands),Series 2015-1A, Class A1R2, 144A, 3 Month LIBOR + 1.220% | 3.372 | (c) | 05/21/29 | 2,500 | 2,498,635 | |||||||||||
Regatta Funding LP (Cayman Islands), Series 2013- 2A, Class A1R2, 144A, 3 Month LIBOR + 1.250% | 3.553 | (c) | 01/15/29 | 750 | 749,984 | |||||||||||
Saratoga Investment Corp. CLO Ltd. (Cayman Islands), Series2013-1A, Class AFR2, 144A, 3 Month LIBOR + 1.250% | 3.528 | (c) | 01/20/30 | 1,000 | 1,002,153 | |||||||||||
SCOF-2 Ltd. (Cayman Islands), Series2015-2A, Class AR, 144A, 3 Month LIBOR + 1.180% | 3.483 | (c) | 07/15/28 | 2,250 | 2,248,468 |
See Notes to Financial Statements.
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Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Collateralized Loan Obligations (cont’d.) |
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Sound Point CLO XI Ltd. (Cayman Islands),Series 2016-1A, Class AR, 144A, 3 Month LIBOR + 1.100% | 3.378 | %(c) | 07/20/28 | 500 | $ | 499,828 | ||||||||||
Sound Point Clo XIV Ltd. (Cayman Islands),Series 2016-3A, Class AR, 144A, 3 Month LIBOR + 1.150% | 3.301 | (c) | 01/23/29 | 2,250 | 2,250,000 | |||||||||||
TCW CLO AMR Ltd. (Cayman Islands), Series 2019- 1A, Class A, 144A, 3 Month LIBOR + 1.440% | 3.598 | (c) | 02/15/29 | 1,500 | 1,501,474 | |||||||||||
TICP CLO I Ltd. (Cayman Islands), Series2015-1A, Class AR, 144A, 3 Month LIBOR + 0.800% | 3.078 | (c) | 07/20/27 | 500 | 498,132 | |||||||||||
TICP CLOIII-2 Ltd. (Cayman Islands), Series 2018- 3R, Class A, 144A, 3 Month LIBOR + 0.840% | 3.118 | (c) | 04/20/28 | 1,510 | 1,502,917 | |||||||||||
TICP CLO VI Ltd. (Cayman Islands), Series2016-6A, Class AR, 144A, 3 Month LIBOR + 1.200% | 3.503 | (c) | 01/15/29 | 1,400 | 1,401,022 | |||||||||||
Trinitas CLO V Ltd. (Cayman Islands), Series 2016- 5A, Class AR, 144A, 3 Month LIBOR + 1.390% | 3.666 | (c) | 10/25/28 | 2,000 | 2,003,628 | |||||||||||
Venture XXIV CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series2016-24A, Class A1D, 144A, 3 Month LIBOR + 1.420% | 3.698 | (c) | 10/20/28 | 250 | 250,032 | |||||||||||
Series2016-24A, Class AR, 144A, 1 Month LIBOR + 1.180% | 3.458 | (c) | 10/20/28 | 4,000 | 4,000,000 | |||||||||||
Wellfleet CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series2015-1A, Class AR3, 144A, 3 Month LIBOR + 1.280% | 3.558 | (c) | 07/20/29 | 1,800 | 1,799,774 | |||||||||||
Series2016-2A, Class A1R, 144A, 3 Month LIBOR + 1.140% | 3.418 | (c) | 10/20/28 | 1,000 | 999,698 | |||||||||||
West CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series2014-1A, Class A1R, 144A, 3 Month LIBOR + 0.920% | 3.220 | (c) | 07/18/26 | 126 | 125,534 | |||||||||||
Series2014-2A, Class A1AR, 144A, 3 Month LIBOR + 0.870% | 3.192 | (c) | 01/16/27 | 184 | 183,548 | |||||||||||
Westcott Park CLO Ltd. (Cayman Islands),Series 2016-1A, Class AR, 144A, 3 Month LIBOR + 1.210% | 3.488 | (c) | 07/20/28 | 2,100 | 2,105,004 | |||||||||||
Zais CLO 8 Ltd. (Cayman Islands), Series2018-1A, Class A, 144A, 3 Month LIBOR + 0.950% | 3.253 | (c) | 04/15/29 | 900 | 892,466 | |||||||||||
|
| |||||||||||||||
TOTAL ASSET-BACKED SECURITIES | 55,794,998 | |||||||||||||||
|
| |||||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES 10.0% |
| |||||||||||||||
BANK, | ||||||||||||||||
Series 2017-BNK5, Class A1 | 1.909 | 06/15/60 | 1,872 | 1,866,481 | ||||||||||||
Series 2017-BNK7, Class A1 | 1.984 | 09/15/60 | 121 | 120,351 | ||||||||||||
Series 2017-BNK9, Class A1 | 2.322 | 11/15/54 | 939 | 943,650 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 15 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) |
| |||||||||||||||
Series 2018-BNK14, Class A1 | 3.277 | % | 09/15/60 | 696 | $ | 713,897 | ||||||||||
BBCMS Mortgage Trust, Series2017-C1, Class A1 | 2.010 | 02/15/50 | 364 | 362,352 | ||||||||||||
BENCHMARK Mortgage Trust, Series2018-B1, Class A1 | 2.560 | 01/15/51 | 945 | 951,353 | ||||||||||||
BENCHMARK, Series2018-B4, Class A1 | 3.125 | 07/15/51 | 834 | 852,240 | ||||||||||||
CD Mortgage Trust, | ||||||||||||||||
Series2016-CD1, Class A1 | 1.443 | 08/10/49 | 24 | 23,832 | ||||||||||||
Series2017-CD3, Class A1 | 1.965 | 02/10/50 | 104 | 103,986 | ||||||||||||
Series2017-CD5, Class A1 | 2.028 | 08/15/50 | 1,190 | 1,190,070 | ||||||||||||
CFCRE Commercial Mortgage Trust, | ||||||||||||||||
Series2016-C4, Class A1 | 1.501 | 05/10/58 | 697 | 692,244 | ||||||||||||
Series2016-C7, Class A1 | 1.971 | 12/10/54 | 836 | 833,919 | ||||||||||||
CGMS Commercial Mortgage Trust, Series 2017- B1, Class A1 | 2.008 | 08/15/50 | 1,330 | 1,328,721 | ||||||||||||
Citigroup Commercial Mortgage Trust, | ||||||||||||||||
Series 2014-GC21, Class AAB | 3.477 | 05/10/47 | 519 | 536,532 | ||||||||||||
Series 2015-GC35, Class A1 | 1.847 | 11/10/48 | 649 | 646,803 | ||||||||||||
Series2015-P1, Class A1 | 1.648 | 09/15/48 | 164 | 163,335 | ||||||||||||
Series2016-C1, Class A1 | 1.506 | 05/10/49 | 990 | 984,402 | ||||||||||||
Series 2016-GC37, Class A1 | 1.635 | 04/10/49 | 26 | 25,879 | ||||||||||||
Series2016-P5, Class A1 | 1.410 | 10/10/49 | 70 | 69,963 | ||||||||||||
Series2017-P8, Class A1 | 2.065 | 09/15/50 | 771 | 771,507 | ||||||||||||
COMM Mortgage Trust, | ||||||||||||||||
Series 2013-CR11, Class ASB | 3.660 | 08/10/50 | 967 | 997,056 | ||||||||||||
Series2013-CR7, Class ASB | 2.739 | 03/10/46 | 678 | 685,433 | ||||||||||||
Series 2014-CR17, Class ASB | 3.598 | 05/10/47 | 713 | 737,704 | ||||||||||||
Series 2014-UBS6, Class ASB | 3.387 | 12/10/47 | 4,800 | 4,977,313 | ||||||||||||
Series 2015-CR23, Class A1 | 1.536 | 05/10/48 | 3,843 | 3,834,707 | ||||||||||||
Series 2015-CR24, Class A2 | 3.022 | 08/10/48 | 12 | 11,886 | ||||||||||||
Series 2015-CR25, Class A1 | 1.737 | 08/10/48 | 126 | 125,680 | ||||||||||||
Series 2015-CR27, Class A2 | 2.223 | 10/10/48 | 1,050 | 1,048,993 | ||||||||||||
Series2016-DC2, Class A1 | 1.820 | 02/10/49 | 350 | 348,005 | ||||||||||||
Series 2017-COR2, Class A1 | 2.111 | 09/10/50 | 195 | 195,742 | ||||||||||||
Commercial Mortgage Pass Through Certificates, Series 2016-CR28, Class A1 | 1.770 | 02/10/49 | 267 | 265,839 | ||||||||||||
CSAIL Commercial Mortgage Trust, | ||||||||||||||||
Series2015-C3, Class A1 | 1.717 | 08/15/48 | 119 | 118,156 | ||||||||||||
Series2017-C8, Class A1 | 1.930 | 06/15/50 | 103 | 102,135 | ||||||||||||
DBJPM Mortgage Trust, | ||||||||||||||||
Series2016-C3, Class A1 | 1.502 | 08/10/49 | 3,637 | 3,609,284 | ||||||||||||
Series2016-C3, Class A2 | 1.886 | 08/10/49 | 1,085 | 1,078,715 | ||||||||||||
GS Mortgage Securities Trust, | ||||||||||||||||
Series 2013-GCJ14, Class A3 | 3.526 | 08/10/46 | 109 | 109,615 | ||||||||||||
Series 2014-GC22, Class AAB | 3.467 | 06/10/47 | 955 | 983,199 | ||||||||||||
Series 2015-GC34, Class A2 | 2.075 | 10/10/48 | 800 | 799,104 | ||||||||||||
Series2016-GS3, Class A1 | 1.429 | 10/10/49 | 1,921 | 1,907,777 |
See Notes to Financial Statements.
16 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) |
| |||||||||||||||
Series2017-GS7, Class A1 | 1.950 | % | 08/10/50 | 1,875 | $ | 1,872,776 | ||||||||||
Series2018-GS9, Class A1 | 2.861 | 03/10/51 | 2,304 | 2,337,023 | ||||||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series2016-JP2, Class A1 | 1.324 | 08/15/49 | 527 | 522,614 | ||||||||||||
JPMBB Commercial Mortgage Securities Trust, | ||||||||||||||||
Series2015-C31, Class A1 | 1.666 | 08/15/48 | 114 | 113,042 | ||||||||||||
Series2013-C12, Class ASB | 3.157 | 07/15/45 | 982 | 995,617 | ||||||||||||
JPMCC Commercial Mortgage Securities Trust, | ||||||||||||||||
Series2017-JP5, Class A1 | 2.086 | 03/15/50 | 1,152 | 1,149,926 | ||||||||||||
Series2017-JP7, Class A1 | 1.969 | 09/15/50 | 674 | 672,121 | ||||||||||||
JPMDB Commercial Mortgage Securities Trust, | ||||||||||||||||
Series2017-C5, Class A1 | 2.096 | 03/15/50 | 906 | 904,244 | ||||||||||||
Series2017-C7, Class A1 | 2.081 | 10/15/50 | 173 | 173,319 | ||||||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, | ||||||||||||||||
Series2014-C14, Class A3 | 3.669 | 02/15/47 | 141 | 143,896 | ||||||||||||
Series2016-C31, Class A1 | 1.511 | 11/15/49 | 550 | 546,160 | ||||||||||||
Morgan Stanley Capital I Trust, | ||||||||||||||||
Series2015-MS1, Class A1 | 1.638 | 05/15/48 | 263 | 262,462 | ||||||||||||
Series 2016-BNK2, Class A1 | 1.424 | 11/15/49 | 102 | 100,796 | ||||||||||||
Series 2016-UBS9, Class A1 | 1.711 | 03/15/49 | 97 | 96,467 | ||||||||||||
UBS Commercial Mortgage Trust, | ||||||||||||||||
Series2012-C1, Class A3 | 3.400 | 05/10/45 | 1,459 | 1,499,956 | ||||||||||||
Series2017-C4, Class A1 | 2.129 | 10/15/50 | 312 | 312,196 | ||||||||||||
Series2017-C5, Class A1 | 2.139 | 11/15/50 | 296 | 295,609 | ||||||||||||
Series2018-C11, Class A1 | 3.211 | 06/15/51 | 82 | 83,597 | ||||||||||||
Series2018-C8, Class A1 | 2.659 | 02/15/51 | 1,134 | 1,144,999 | ||||||||||||
Wells Fargo Commercial Mortgage Trust, | ||||||||||||||||
Series 2015-LC22, Class A1 | 1.639 | 09/15/58 | 172 | 171,730 | ||||||||||||
Series 2015-NXS2, Class A2 | 3.020 | 07/15/58 | 745 | 744,587 | ||||||||||||
Series 2015-NXS4, Class A1 | 1.889 | 12/15/48 | 68 | 67,534 | ||||||||||||
Series2015-P2, Class A2B | 4.897 | (c) | 12/15/48 | 193 | 199,216 | |||||||||||
Series 2016-BNK1, Class A1 | 1.321 | 08/15/49 | 109 | 108,038 | ||||||||||||
Series2016-C32, Class A1 | 1.577 | 01/15/59 | 241 | 239,518 | ||||||||||||
Series2016-C33, Class A1 | 1.775 | 03/15/59 | 388 | 387,202 | ||||||||||||
Series2016-C35, Class A1 | 1.392 | 07/15/48 | 501 | 497,559 | ||||||||||||
Series2016-C37, Class A1 | 1.944 | 12/15/49 | 944 | 941,162 | ||||||||||||
Series 2016-LC24, Class A1 | 1.441 | 10/15/49 | 33 | 32,975 | ||||||||||||
Series 2016-NXS6, Class A1 | 1.417 | 11/15/49 | 4,108 | 4,076,776 | ||||||||||||
Series2017-RB1, Class A1 | 2.056 | 03/15/50 | 79 | 78,961 | ||||||||||||
Series2017-RC1, Class A1 | 2.012 | 01/15/60 | 67 | 66,858 | ||||||||||||
|
| |||||||||||||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES | 55,956,796 | |||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 17 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS 61.0% | ||||||||||||||||
Aerospace & Defense 1.8% | ||||||||||||||||
General Dynamics Corp., | ||||||||||||||||
Gtd. Notes | 2.875 | % | 05/11/20 | 1,295 | $ | 1,302,767 | ||||||||||
Gtd. Notes, 3 Month LIBOR + 0.290% | 2.471 | (c) | 05/11/20 | 350 | 350,446 | |||||||||||
Lockheed Martin Corp., Sr. Unsec’d. Notes | 3.350 | 09/15/21 | 2,800 | 2,875,482 | ||||||||||||
Northrop Grumman Corp., Sr. Unsec’d. Notes | 2.080 | 10/15/20 | 768 | 768,493 | ||||||||||||
United Technologies Corp., Sr. Unsec’d. Notes | 1.900 | 05/04/20 | 5,000 | 4,991,355 | ||||||||||||
|
| |||||||||||||||
10,288,543 | ||||||||||||||||
Agriculture 1.0% | ||||||||||||||||
BAT Capital Corp., Gtd. Notes | 2.297 | 08/14/20 | 5,000 | 5,000,364 | ||||||||||||
Philip Morris International, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.420% | 2.572 | (c) | 02/21/20 | 600 | 600,940 | |||||||||||
|
| |||||||||||||||
5,601,304 | ||||||||||||||||
Auto Manufacturers 2.7% | ||||||||||||||||
American Honda Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.290% | 2.743 | (c) | 12/10/21 | 750 | 748,784 | |||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.470% | 2.773 | (c) | 01/08/21 | 1,200 | 1,203,623 | |||||||||||
BMW US Capital LLC, | ||||||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.370% | 2.545 | (c) | 08/14/20 | 250 | 250,354 | |||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.380% | 2.683 | (c) | 04/06/20 | 1,251 | 1,252,806 | |||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.410% | 2.750 | (c) | 04/12/21 | 893 | 893,257 | |||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.500% | 2.676 | (c) | 08/13/21 | 1,465 | 1,468,427 | |||||||||||
Daimler Finance North America LLC, | ||||||||||||||||
Gtd. Notes, 144A | 2.200 | 05/05/20 | 2,665 | 2,665,126 | ||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.390% | 2.677 | (c) | 05/04/20 | 150 | 150,125 | |||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.530% | 2.817 | (c) | 05/05/20 | 360 | 360,532 | |||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.630% | 2.933 | (c) | 01/06/20 | 700 | 701,172 | |||||||||||
General Motors Financial Co., Inc., Gtd. Notes, 3 Month LIBOR + 1.560% | 3.863 | (c) | 01/15/20 | 2,084 | 2,092,659 | |||||||||||
Harley-Davidson Financial Services, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 2.400 | 09/15/19 | 1,000 | 999,907 | ||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.500% | 2.652 | (c) | 05/21/20 | 350 | 350,172 | |||||||||||
Nissan Motor Acceptance Corp., Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.390% | 2.693 | (c) | 07/13/20 | 410 | 410,027 | |||||||||||
Toyota Motor Credit Corp., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.100% | 2.438 | (c) | 01/10/20 | 250 | 250,073 | |||||||||||
Toyota Motor Finance Netherlands BV (Netherlands), Sr. Unsec’d. Notes, EMTN, 3 Month LIBOR + 0.250% | 2.686 | (c) | 12/12/19 | 500 | 500,210 | |||||||||||
Volkswagen Group of America Finance LLC, Gtd. Notes, 144A, 3 Month LIBOR + 0.770% | 2.946 | (c) | 11/13/20 | 1,000 | 1,004,338 | |||||||||||
|
| |||||||||||||||
15,301,592 |
See Notes to Financial Statements.
18 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks 10.9% | ||||||||||||||||
ABN AMRO Bank NV (Netherlands), Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.570% | 2.702 | %(c) | 08/27/21 | 500 | $ | 501,787 | ||||||||||
Australia & New Zealand Banking Group Ltd. (Australia), Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.320% | 2.505 | (c) | 11/09/20 | 450 | 450,900 | |||||||||||
Bangkok Bank PCL (Thailand), Sr. Unsec’d. Notes | 4.800 | 10/18/20 | 300 | 308,406 | ||||||||||||
Bank of America Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 5.000 | 05/13/21 | 1,225 | 1,283,737 | ||||||||||||
Sr. Unsec’d. Notes, GMTN, 3 Month LIBOR + 0.660% | 2.369 | (c) | 07/21/21 | 3,225 | 3,230,254 | |||||||||||
Bank of China Ltd. (China), EMTN, Sr. Unsec’d. Notes | 2.875 | 06/30/20 | 250 | 251,073 | ||||||||||||
Bank of Montreal (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.340% | 2.643 | (c) | 07/13/20 | 250 | 250,525 | |||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.440% | 2.850 | (c) | 06/15/20 | 1,021 | 1,023,879 | |||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.460% | 2.763 | (c) | 04/13/21 | 275 | 276,090 | |||||||||||
Bank of New York Mellon Corp. (The), Sr. Unsec’d. Notes, MTN | 1.950 | 08/23/22 | 5,000 | 4,995,762 | ||||||||||||
BB&T Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.570% | 2.980 | (c) | 06/15/20 | 200 | 200,701 | |||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.715% | 3.018 | (c) | 01/15/20 | 160 | 160,293 | |||||||||||
Capital One NA, | ||||||||||||||||
Sr. Unsec’d. Notes, BKNT | 2.350 | 01/31/20 | 400 | 400,087 | ||||||||||||
Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.765% | 3.215 | (c) | 09/13/19 | 1,500 | 1,500,363 | |||||||||||
Citibank NA, | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.260% | 2.662 | (c) | 09/18/19 | 350 | 350,074 | |||||||||||
Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.530% | 3.165 | (c) | 02/19/22 | 3,000 | 3,044,638 | |||||||||||
Cooperatieve Rabobank UA (Netherlands), Sr. Unsec’d. Notes | 3.125 | 04/26/21 | 2,000 | 2,035,067 | ||||||||||||
Federation des Caisses Desjardins du Quebec (Canada), Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.330% | 2.596 | (c) | 10/30/20 | 2,507 | 2,511,805 | |||||||||||
Fifth Third Bank, BKNT, Sr. Unsec’d. Notes | 1.625 | 09/27/19 | 1,100 | 1,099,554 | ||||||||||||
Goldman Sachs Group, Inc. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 01/24/22 | 3,000 | 3,249,038 | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 1.020% | 3.279 | (c) | 10/23/19 | 400 | 400,546 | |||||||||||
Industrial & Commercial Bank of China Ltd. (China), BNKT, Sr. Unsec’d. Notes | 2.905 | 11/13/20 | 550 | 553,275 | ||||||||||||
Industrial Bank of Korea (South Korea), Sr. Unsec’d. Notes, 144A | 2.000 | 04/23/20 | 350 | 349,904 | ||||||||||||
JPMorgan Chase & Co., Sr. Unsec’d. Notes | 2.750 | 06/23/20 | 2,900 | 2,913,589 | ||||||||||||
Mitsubishi UFJ Financial Group, Inc. (Japan), Sr. Unsec’d. Notes | 2.623 | 07/18/22 | 1,000 | 1,011,939 | ||||||||||||
Morgan Stanley, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.750 | 05/19/22 | 3,000 | 3,051,550 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 5.625 | 09/23/19 | 600 | 601,034 | ||||||||||||
National Australia Bank Ltd. (Australia), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.250 | 01/10/20 | 2,000 | 2,000,911 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 19 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 2.500 | % | 01/12/21 | 1,600 | $ | 1,610,736 | ||||||||||
Nordea Bank Abp (Finland), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.470% | 2.587 | (c) | 05/29/20 | 400 | 400,975 | |||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.620% | 2.950 | (c) | 09/30/19 | 1,000 | 1,000,541 | |||||||||||
PNC Bank NA, | ||||||||||||||||
Sr. Unsec’d. Notes, BKNT | 2.150 | 04/29/21 | 5,000 | 5,013,816 | ||||||||||||
Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.250% | 2.528 | (c) | 01/22/21 | 500 | 500,145 | |||||||||||
RHB Bank Bhd (Malaysia), EMTN, Sr. Unsec’d. Notes | 2.503 | 10/06/21 | 1,300 | 1,301,910 | ||||||||||||
Santander UK PLC (United Kingdom), Sr. Unsec’d. Notes, 3 Month LIBOR + 0.660% | 2.818 | (c) | 11/15/21 | 1,000 | 1,002,487 | |||||||||||
Shinhan Bank Co. Ltd. (South Korea), Sr. Unsec’d. Notes | 2.250 | 04/15/20 | 500 | 500,090 | ||||||||||||
Skandinaviska Enskilda Banken AB (Sweden), Sr. Unsec’d. Notes | 1.500 | 09/13/19 | 1,500 | 1,499,749 | ||||||||||||
State Street Corp., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.900% | 3.024 | (c) | 08/18/20 | 1,127 | 1,135,616 | |||||||||||
SunTrust Bank, | ||||||||||||||||
Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.530% | 2.786 | (c) | 01/31/20 | 740 | 741,071 | |||||||||||
Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.590% | 2.714 | (c) | 05/17/22 | 3,000 | 3,007,463 | |||||||||||
Toronto-Dominion Bank (The) (Canada), Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.280% | 2.731 | (c) | 06/11/20 | 500 | 500,855 | |||||||||||
UBS AG (Switzerland), Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.580% | 3.031 | (c) | 06/08/20 | 1,000 | 1,002,976 | |||||||||||
US Bank NA, Sr. Unsec’d. Notes, BKNT, 3 Month LIBOR + 0.440% | 2.588 | (c) | 05/23/22 | 3,700 | 3,703,364 | |||||||||||
Wells Fargo Bank NA, Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.650% | 3.124 | (c) | 12/06/19 | 404 | 404,727 | |||||||||||
|
| |||||||||||||||
61,333,302 | ||||||||||||||||
Beverages 1.3% | ||||||||||||||||
Diageo Capital PLC (United Kingdom), | ||||||||||||||||
Gtd. Notes | 3.000 | 05/18/20 | 975 | 980,992 | ||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.240% | 2.364 | (c) | 05/18/20 | 2,000 | 2,000,375 | |||||||||||
Keurig Dr Pepper, Inc., Gtd. Notes | 3.551 | 05/25/21 | 4,365 | 4,469,712 | ||||||||||||
|
| |||||||||||||||
7,451,079 | ||||||||||||||||
Biotechnology 1.0% | ||||||||||||||||
Biogen, Inc., Sr. Unsec’d. Notes | 2.900 | 09/15/20 | 500 | 503,032 | ||||||||||||
Celgene Corp., Sr. Unsec’d. Notes | 2.875 | 08/15/20 | 5,095 | 5,125,552 | ||||||||||||
|
| |||||||||||||||
5,628,584 | ||||||||||||||||
Building Materials 0.1% | ||||||||||||||||
Johnson Controls International PLC (Ireland), Sr. Unsec’d. Notes | 5.000 | 03/30/20 | 500 | 506,896 |
See Notes to Financial Statements.
20 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Chemicals 2.1% | ||||||||||||||||
Chevron Phillips Chemical Co. LLC/Chevron Phillips Chemical Co. LP, Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.750% | 3.003 | %(c) | 05/01/20 | 4,600 | $ | 4,611,645 | ||||||||||
CNAC HK Finbridge Co. Ltd. (Hong Kong), | ||||||||||||||||
Gtd. Notes | 3.000 | 07/19/20 | 450 | 451,066 | ||||||||||||
Gtd. Notes | 4.125 | 03/14/21 | 1,750 | 1,783,314 | ||||||||||||
DuPont de Nemours, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.710% | 2.868 | (c) | 11/15/20 | 2,000 | 2,010,662 | |||||||||||
Sr. Unsec’d. Notes | 3.766 | 11/15/20 | 2,630 | 2,684,189 | ||||||||||||
|
| |||||||||||||||
11,540,876 | ||||||||||||||||
Commercial Services 1.4% | ||||||||||||||||
ERAC USA Finance LLC, Gtd. Notes, 144A | 2.350 | 10/15/19 | 3,600 | 3,599,130 | ||||||||||||
Verisk Analytics, Inc., Sr. Unsec’d. Notes | 5.800 | 05/01/21 | 4,000 | 4,232,477 | ||||||||||||
|
| |||||||||||||||
7,831,607 | ||||||||||||||||
Computers 0.9% | ||||||||||||||||
Apple, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.500% | 2.685 | (c) | 02/09/22 | 2,163 | 2,178,568 | |||||||||||
IBM Credit LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.650 | 02/05/21 | 2,000 | 2,019,087 | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.470% | 2.594 | (c) | 11/30/20 | 1,000 | 1,004,010 | |||||||||||
|
| |||||||||||||||
5,201,665 | ||||||||||||||||
Diversified Financial Services 0.5% | ||||||||||||||||
American Express Co., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.525% | 2.649 | (c) | 05/17/21 | 2,000 | 2,006,429 | |||||||||||
American Express Credit Corp., Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.730% | 2.862 | (c) | 05/26/20 | 415 | 416,667 | |||||||||||
BOC Aviation Ltd. (Singapore), Sr. Unsec’d. Notes, 144A | 3.000 | 03/30/20 | 250 | 250,656 | ||||||||||||
Charles Schwab Corp. (The), Sr. Unsec’d. Notes, 3 Month LIBOR + 0.320% | 2.472 | (c) | 05/21/21 | 350 | 350,166 | |||||||||||
|
| |||||||||||||||
3,023,918 | ||||||||||||||||
Electric 4.4% | ||||||||||||||||
Abu Dhabi National Energy Co. PJSC (United Arab Emirates), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.875 | 12/13/21 | 2,000 | 2,150,480 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.250 | 09/16/19 | 360 | 360,698 | ||||||||||||
American Electric Power Co., Inc., Sr. Unsec’d. Notes | 3.650 | 12/01/21 | 4,000 | 4,134,374 | ||||||||||||
CenterPoint Energy, Inc., Sr. Unsec’d. Notes | 3.600 | 11/01/21 | 750 | 771,452 | ||||||||||||
Duke Energy Corp., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.700% | 3.110 | (c) | 06/15/20 | 1,630 | 1,630,626 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 21 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Electric (cont’d.) | ||||||||||||||||
Duke Energy Indiana LLC, 1 Mortgage Notes | 3.750 | % | 07/15/20 | 3,400 | $ | 3,453,088 | ||||||||||
Israel Electric Corp. Ltd. (Israel), Sr. Sec’d. Notes, 144A | 9.375 | 01/28/20 | 200 | 205,522 | ||||||||||||
NextEra Energy Capital Holdings, Inc., | ||||||||||||||||
Gtd. Notes | 2.900 | 04/01/22 | 2,500 | 2,553,589 | ||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.315% | 2.835 | (c) | 09/03/19 | 1,040 | 1,040,000 | |||||||||||
Saudi Electricity Global Sukuk Co. (Cayman Islands), Sr. Unsec’d. Notes | 4.211 | 04/03/22 | 1,800 | 1,877,371 | ||||||||||||
Sempra Energy, Sr. Unsec’d. Notes | 2.400 | 03/15/20 | 1,255 | 1,253,580 | ||||||||||||
State Grid Overseas Investment 2016 Ltd. (British Virgin Islands), Gtd. Notes, 144A | 2.250 | 05/04/20 | 3,000 | 3,000,810 | ||||||||||||
WEC Energy Group, Inc., Sr. Unsec’d. Notes | 3.100 | 03/08/22 | 2,500 | 2,560,679 | ||||||||||||
|
| |||||||||||||||
24,992,269 | ||||||||||||||||
Electronics 0.3% | ||||||||||||||||
Honeywell International, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.040% | 2.306 | (c) | 10/30/19 | 530 | 529,972 | |||||||||||
Tyco Electronics Group SA (Luxembourg), Gtd. Notes, 3 Month LIBOR + 0.450% | 2.929 | (c) | 06/05/20 | 1,100 | 1,101,100 | |||||||||||
|
| |||||||||||||||
1,631,072 | ||||||||||||||||
Environmental Control 0.6% | ||||||||||||||||
Waste Management, Inc., Gtd. Notes | 4.750 | 06/30/20 | 3,490 | 3,560,698 | ||||||||||||
Food 2.5% | ||||||||||||||||
Campbell Soup Co., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.500% | 2.910 | (c) | 03/16/20 | 400 | 399,978 | |||||||||||
General Mills, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.200 | 04/16/21 | 3,080 | 3,134,063 | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.540% | 2.862 | (c) | 04/16/21 | 400 | 400,220 | |||||||||||
JM Smucker Co. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.200 | 12/06/19 | 287 | 286,836 | ||||||||||||
Sr. Unsec’d. Notes | 2.500 | 03/15/20 | 1,300 | 1,301,793 | ||||||||||||
Mondelez International Holdings Netherlands BV (Netherlands), Gtd. Notes, 144A, 3 Month LIBOR + 0.610% | 2.866 | (c) | 10/28/19 | 500 | 500,459 | |||||||||||
Nestle Holdings, Inc., Gtd. Notes, 144A | 3.100 | 09/24/21 | 3,500 | 3,578,233 | ||||||||||||
Tyson Foods, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.250 | 08/23/21 | 3,300 | 3,309,384 | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.550% | 2.682 | (c) | 06/02/20 | 500 | 500,583 | |||||||||||
Wm Wrigley Jr Co., Sr. Unsec’d. Notes, 144A | 2.900 | 10/21/19 | 555 | 555,236 | ||||||||||||
|
| |||||||||||||||
13,966,785 |
See Notes to Financial Statements.
22 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Hand/Machine Tools 0.7% | ||||||||||||||||
Stanley Black & Decker, Inc., Gtd. Notes | 3.400 | % | 12/01/21 | 4,000 | $ | 4,092,248 | ||||||||||
Healthcare-Products 2.5% | ||||||||||||||||
Abbott Laboratories, Sr. Unsec’d. Notes | 2.900 | 11/30/21 | 2,787 | 2,841,736 | ||||||||||||
Medtronic, Inc., | ||||||||||||||||
Gtd. Notes | 3.150 | 03/15/22 | 707 | 731,298 | ||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.800% | 3.210 | (c) | 03/15/20 | 750 | 752,348 | |||||||||||
Stryker Corp., Sr. Unsec’d. Notes | 2.625 | 03/15/21 | 4,000 | 4,032,040 | ||||||||||||
Thermo Fisher Scientific, Inc., Sr. Unsec’d. Notes | 4.500 | 03/01/21 | 5,454 | 5,649,729 | ||||||||||||
|
| |||||||||||||||
14,007,151 | ||||||||||||||||
Healthcare-Services 0.3% | ||||||||||||||||
Quest Diagnostics, Inc., Gtd. Notes | 4.750 | 01/30/20 | 1,500 | 1,513,777 | ||||||||||||
Household Products/Wares 0.3% | ||||||||||||||||
Church & Dwight Co., Inc., Sr. Unsec’d. Notes | 2.450 | 12/15/19 | 1,500 | 1,499,723 | ||||||||||||
Insurance 4.0% | ||||||||||||||||
AIA Group Ltd. (Hong Kong), Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.520% | 2.907 | (c) | 09/20/21 | 600 | 599,988 | |||||||||||
Chubb INA Holdings, Inc., Gtd. Notes | 2.300 | 11/03/20 | 4,000 | 4,015,679 | ||||||||||||
Jackson National Life Global Funding, | 2.200 | 01/30/20 | 2,000 | 2,000,206 | ||||||||||||
Marsh & McLennan Cos., Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.350 | 09/10/19 | 1,500 | 1,499,989 | ||||||||||||
Sr. Unsec’d. Notes | 3.500 | 12/29/20 | 500 | 509,033 | ||||||||||||
Metropolitan Life Global Funding I, | ||||||||||||||||
Sec’d. Notes, 144A | 3.375 | 01/11/22 | 1,250 | 1,289,850 | ||||||||||||
Sec’d. Notes, 144A | 3.450 | 10/09/21 | 750 | 772,170 | ||||||||||||
New York Life Global Funding, | ||||||||||||||||
Sec’d. Notes, 144A | 1.500 | 10/24/19 | 1,000 | 999,149 | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.320% | 2.559 | (c) | 08/06/21 | 500 | 500,741 | |||||||||||
Sr. Sec’d. Notes, 144A, 3 Month LIBOR + 0.440% | 2.780 | (c) | 07/12/22 | 3,000 | 3,004,091 | |||||||||||
Principal Life Global Funding II, | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 2.625 | 11/19/20 | 4,000 | 4,023,557 | ||||||||||||
Sr. Sec’d. Notes, 144A, 3 Month LIBOR + 0.300% | 2.633 | (c) | 06/26/20 | 400 | 400,138 | |||||||||||
Protective Life Global Funding, | ||||||||||||||||
Sec’d. Notes, 144A | 2.262 | 04/08/20 | 500 | 499,935 | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.370% | 2.673 | (c) | 07/13/20 | 2,500 | 2,505,830 | |||||||||||
|
| |||||||||||||||
22,620,356 | ||||||||||||||||
Lodging 0.1% | ||||||||||||||||
Marriott International, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.600% | 2.738 | (c) | 12/01/20 | 800 | 803,120 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 23 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Machinery-Constructions & Mining 0.9% | ||||||||||||||||
Caterpillar Financial Services Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 1.700 | % | 08/09/21 | 3,500 | $ | 3,483,312 | ||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.350% | 2.822 | (c) | 12/07/20 | 600 | 601,158 | |||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.510% | 2.848 | (c) | 01/10/20 | 1,120 | 1,121,919 | |||||||||||
|
| |||||||||||||||
5,206,389 | ||||||||||||||||
Machinery-Diversified 0.2% | ||||||||||||||||
John Deere Capital Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.260% | 2.713 | (c) | 09/10/21 | 400 | 399,635 | |||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.300% | 2.750 | (c) | 03/13/20 | 1,000 | 1,001,621 | |||||||||||
|
| |||||||||||||||
1,401,256 | ||||||||||||||||
Media 0.5% | ||||||||||||||||
Comcast Corp., | ||||||||||||||||
Gtd. Notes | 3.450 | 10/01/21 | 2,000 | 2,060,491 | ||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.330% | 2.649 | (c) | 10/01/20 | 750 | 751,046 | |||||||||||
|
| |||||||||||||||
2,811,537 | ||||||||||||||||
Miscellaneous Manufacturer 0.9% | ||||||||||||||||
Siemens Financieringsmaatschappij NV (Netherlands), | ||||||||||||||||
Gtd. Notes, 144A | 2.200 | 03/16/20 | 1,000 | 1,000,002 | ||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.340% | 2.750 | (c) | 03/16/20 | 1,000 | 1,001,349 | |||||||||||
Textron, Inc., Sr. Unsec’d. Notes | 3.650 | 03/01/21 | 3,000 | 3,060,284 | ||||||||||||
|
| |||||||||||||||
5,061,635 | ||||||||||||||||
Oil & Gas 4.0% | ||||||||||||||||
BP Capital Markets PLC (United Kingdom), Gtd. Notes | 1.768 | 09/19/19 | 327 | 326,904 | ||||||||||||
CNOOC Finance 2012 Ltd. (British Virgin Islands), Gtd. Notes, 144A | 3.875 | 05/02/22 | 2,000 | 2,073,340 | ||||||||||||
EOG Resources, Inc., Sr. Unsec’d. Notes | 2.450 | 04/01/20 | 500 | 500,704 | ||||||||||||
Exxon Mobil Corp., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.330% | 2.498 | (c) | 08/16/22 | 6,000 | 6,015,504 | |||||||||||
Lukoil International Finance BV (Netherlands), Gtd. Notes, 144A | 7.250 | 11/05/19 | 200 | 201,533 | ||||||||||||
Occidental Petroleum Corp., Sr. Unsec’d. Notes | 4.100 | 02/01/21 | 262 | 267,576 | ||||||||||||
Petroleos Mexicanos (Mexico), Gtd. Notes | 6.000 | 03/05/20 | 350 | 354,105 | ||||||||||||
Pioneer Natural Resources Co., Sr. Unsec’d. Notes | 3.450 | 01/15/21 | 3,000 | 3,044,004 | ||||||||||||
Reliance Holding USA, Inc., Gtd. Notes | 4.500 | 10/19/20 | 1,300 | 1,327,345 | ||||||||||||
Saudi Arabian Oil Co. (Saudi Arabia), Sr. Unsec’d. Notes, 144A | 2.750 | 04/16/22 | 1,980 | 2,009,409 |
See Notes to Financial Statements.
24 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Oil & Gas (cont’d.) | ||||||||||||||||
Shell International Finance BV (Netherlands), Gtd. Notes, 3 Month LIBOR + 0.350% | 2.786 | %(c) | 09/12/19 | 1,500 | $ | 1,500,197 | ||||||||||
Sinopec Group Overseas Development 2015 Ltd. (British Virgin Islands), Gtd. Notes, 144A | 2.500 | 04/28/20 | 375 | 375,357 | ||||||||||||
Total Capital International SA (France), Gtd. Notes | 2.218 | 07/12/21 | 4,400 | 4,429,001 | ||||||||||||
|
| |||||||||||||||
22,424,979 | ||||||||||||||||
Oil & Gas Services 0.5% | ||||||||||||||||
Schlumberger Holdings Corp., Sr. Unsec’d. Notes, 144A | 3.000 | 12/21/20 | 2,700 | 2,726,598 | ||||||||||||
Pharmaceuticals 5.0% | ||||||||||||||||
AbbVie, Inc., Sr. Unsec’d. Notes | 3.375 | 11/14/21 | 3,730 | 3,825,265 | ||||||||||||
AstraZeneca PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes | 1.950 | 09/18/19 | 500 | 499,942 | ||||||||||||
Sr. Unsec’d. Notes | 2.375 | 11/16/20 | 3,956 | 3,966,381 | ||||||||||||
Bayer US Finance II LLC, Gtd. Notes, 144A | 3.500 | 06/25/21 | 1,800 | 1,838,055 | ||||||||||||
Bristol-Myers Squibb Co., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.200% | 2.368 | (c) | 11/16/20 | 1,000 | 999,849 | |||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.380% | 2.548 | (c) | 05/16/22 | 2,000 | 2,002,860 | |||||||||||
Cardinal Health, Inc., Sr. Unsec’d. Notes | 2.400 | 11/15/19 | 3,545 | 3,543,633 | ||||||||||||
CVS Health Corp., Sr. Unsec’d. Notes | 2.800 | 07/20/20 | 788 | 791,905 | ||||||||||||
GlaxoSmithKline Capital PLC (United Kingdom), Gtd. Notes, 3 Month LIBOR + 0.350% | 2.525 | (c) | 05/14/21 | 3,295 | 3,301,590 | |||||||||||
McKesson Corp., Sr. Unsec’d. Notes | 3.650 | 11/30/20 | 4,738 | 4,822,904 | ||||||||||||
Pfizer, Inc., Sr. Unsec’d. Notes | 5.200 | 08/12/20 | 500 | 515,132 | ||||||||||||
Zoetis, Inc., Sr. Unsec’d. Notes | 3.450 | 11/13/20 | 2,235 | 2,265,073 | ||||||||||||
|
| |||||||||||||||
28,372,589 | ||||||||||||||||
Pipelines 0.9% | ||||||||||||||||
Enterprise Products Operating LLC, Gtd. Notes | 3.500 | 02/01/22 | 750 | 775,495 | ||||||||||||
Kinder Morgan, Inc., Gtd. Notes, 144A | 5.000 | 02/15/21 | 4,000 | 4,141,000 | ||||||||||||
|
| |||||||||||||||
4,916,495 | ||||||||||||||||
Real Estate Investment Trusts (REITS) 0.1% | ||||||||||||||||
AvalonBay Communities, Inc., MTN, Sr. Unsec’d. Notes, 3 Month LIBOR + 0.430% | 2.733 | (c) | 01/15/21 | 395 | 394,476 | |||||||||||
Retail 3.0% | ||||||||||||||||
AutoZone, Inc., Sr. Unsec’d. Notes | 3.700 | 04/15/22 | 3,000 | 3,125,203 | ||||||||||||
Home Depot, Inc. (The), Sr. Unsec’d. Notes | 2.625 | 06/01/22 | 3,250 | 3,327,908 |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 25 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Retail (cont’d.) | ||||||||||||||||
Lowe’s Cos., Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.420% | 2.873 | %(c) | 09/10/19 | 1,159 | $ | 1,159,118 | ||||||||||
McDonald’s Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.625 | 01/15/22 | 2,193 | 2,228,385 | ||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.430% | 2.686 | (c) | 10/28/21 | 1,900 | 1,897,927 | |||||||||||
Walmart, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.850 | 06/23/20 | 4,500 | 4,534,082 | ||||||||||||
Sr. Unsec’d. Notes | 3.125 | 06/23/21 | 500 | 512,210 | ||||||||||||
|
| |||||||||||||||
16,784,833 | ||||||||||||||||
Semiconductors 1.6% | ||||||||||||||||
NVIDIA Corp., Sr. Unsec’d. Notes | 2.200 | 09/16/21 | 4,330 | 4,344,008 | ||||||||||||
QUALCOMM, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.550% | 2.686 | (c) | 05/20/20 | 4,472 | 4,479,873 | |||||||||||
|
| |||||||||||||||
8,823,881 | ||||||||||||||||
Software 1.3% | ||||||||||||||||
Electronic Arts, Inc., Sr. Unsec’d. Notes | 3.700 | 03/01/21 | 3,127 | 3,189,904 | ||||||||||||
Fidelity National Information Services, Inc., | 3.625 | 10/15/20 | 4,000 | 4,059,839 | ||||||||||||
|
| |||||||||||||||
7,249,743 | ||||||||||||||||
Telecommunications 0.5% | ||||||||||||||||
Verizon Communications, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.550% | 2.700 | (c) | 05/22/20 | 3,000 | 3,006,658 | |||||||||||
Transportation 2.0% | ||||||||||||||||
FedEx Corp., Gtd. Notes | 3.400 | 01/14/22 | 3,000 | 3,095,055 | ||||||||||||
Ryder System, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.500 | 05/11/20 | 382 | 382,333 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 2.875 | 06/01/22 | 3,000 | 3,061,421 | ||||||||||||
Union Pacific Corp., Sr. Unsec’d. Notes | 1.800 | 02/01/20 | 2,000 | 1,996,099 | ||||||||||||
United Parcel Service, Inc., Sr. Unsec’d. Notes, 3 Month LIBOR + 0.150% | 2.469 | (c) | 04/01/21 | 2,500 | 2,497,276 | |||||||||||
|
| |||||||||||||||
11,032,184 | ||||||||||||||||
Trucking & Leasing 0.2% | ||||||||||||||||
Aviation Capital Group LLC, Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.950% | 3.082 | (c) | 06/01/21 | 1,000 | 1,005,052 | |||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS |
| 343,614,870 | ||||||||||||||
|
|
See Notes to Financial Statements.
26 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CERTIFICATES OF DEPOSIT 3.3% | ||||||||||||||||
Banks 2.6% | ||||||||||||||||
Bank of Nova Scotia (Canada), | ||||||||||||||||
3 Month LIBOR + 0.190% | 2.641 | %(c) | 03/11/20 | 500 | $ | 500,437 | ||||||||||
3 Month LIBOR + 0.220% | 2.550 | (c) | 12/30/19 | 325 | 325,228 | |||||||||||
3 Month LIBOR + 0.260% | 2.547 | (c) | 11/04/19 | 400 | 400,173 | |||||||||||
3 Month LIBOR + 0.280% | 2.666 | (c) | 09/21/20 | 500 | 500,154 | |||||||||||
BNP Paribas SA (France), 3 Month LIBOR + 0.250% | 2.503 | (c) | 02/01/21 | 3,000 | 2,999,986 | |||||||||||
Canadian Imperial Bank of Commerce (Canada), | ||||||||||||||||
3 Month LIBOR + 0.220% | 2.531 | (c) | 12/27/19 | 500 | 500,295 | |||||||||||
3 Month LIBOR + 0.410% | 2.797 | (c) | 09/20/19 | 310 | 310,087 | |||||||||||
Credit Agricole Corporate & Investment Bank (France), | ||||||||||||||||
3 Month LIBOR + 0.385% | 2.566 | (c) | 05/11/20 | 600 | 601,164 | |||||||||||
3 Month LIBOR + 0.470% | 2.808 | (c) | 04/10/20 | 1,000 | 1,002,069 | |||||||||||
Nordea Bank Abp (Finland), 3 Month LIBOR + 0.400% | 2.703 | (c) | 01/14/21 | 2,500 | 2,504,343 | |||||||||||
Nordea Bank Abp (Sweden), 3 Month LIBOR + 0.300% | 2.779 | (c) | 06/05/20 | 500 | 500,819 | |||||||||||
Sumitomo Mitsui Banking Corp. (Japan), | ||||||||||||||||
3 Month LIBOR + 0.350% | 2.690 | (c) | 07/12/21 | 1,000 | 999,995 | |||||||||||
3 Month LIBOR + 0.355% | 2.523 | (c) | 05/13/21 | 3,000 | 3,000,734 | |||||||||||
3 Month LIBOR + 0.410% | 2.812 | (c) | 06/18/20 | 250 | 250,253 | |||||||||||
|
| |||||||||||||||
14,395,737 | ||||||||||||||||
Diversified Financial Services 0.7% | ||||||||||||||||
DNB Bank ASA (Norway), 3 Month LIBOR + 0.280% | 2.569 | (c) | 10/08/20 | 4,000 | 4,005,587 | |||||||||||
|
| |||||||||||||||
TOTAL CERTIFICATES OF DEPOSIT | 18,401,324 | |||||||||||||||
|
| |||||||||||||||
SOVEREIGN BONDS 1.1% | ||||||||||||||||
Indonesia Government International Bond (Indonesia), Sr. Unsec’d. Notes, 144A | 4.875 | 05/05/21 | 1,750 | 1,818,290 | ||||||||||||
Lithuania Government International Bond (Lithuania), Sr. Unsec’d. Notes | 6.125 | 03/09/21 | 2,300 | 2,435,567 | ||||||||||||
Magyar Export-Import Bank Zrt (Hungary) | 4.000 | 01/30/20 | 2,000 | 2,011,368 | ||||||||||||
Qatar Government International Bond (Qatar), Sr. Unsec’d. Notes, 144A | 5.250 | 01/20/20 | 200 | 202,272 | ||||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS | 6,467,497 | |||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 480,235,485 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 14.7% | ||||||||||||||||
AFFILIATED MUTUAL FUND 1.8% | ||||||||||||||||
PGIM Core Ultra Short Bond Fund | 9,860,408 | 9,860,408 | ||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 27 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
TIME DEPOSIT 0.0% | ||||||||||||||||
Sumitomo Mitsui Banking Corp. | 1.490 | % | 09/03/19 | 40 | $ | 39,680 | ||||||||||
CERTIFICATES OF DEPOSIT 2.8% | ||||||||||||||||
Banks 2.8% | ||||||||||||||||
Bank of Nova Scotia (Canada), | ||||||||||||||||
1 Month LIBOR + 0.180% | 2.362 | (c) | 06/19/20 | 1,500 | 1,499,300 | |||||||||||
3 Month LIBOR + 0.200% | 2.587 | (c) | 09/20/19 | 750 | 750,066 | |||||||||||
BNP Paribas SA (France), 1 Month LIBOR + 0.220% | 2.365 | (c) | 06/25/20 | 2,000 | 2,000,080 | |||||||||||
Canadian Imperial Bank of Commerce (Canada), | ||||||||||||||||
1 Month LIBOR + 0.400% | 2.601 | (c) | 12/10/19 | 540 | 540,483 | |||||||||||
1 Month LIBOR + 0.400% | 2.601 | (c) | 12/12/19 | 300 | 300,272 | |||||||||||
Credit Suisse AG (Switzerland), 3 Month LIBOR + 0.170% | 2.489 | (c) | 10/01/19 | 300 | 300,025 | |||||||||||
Lloyds Bank Corporate Markets PLC (United Kingdom), 3 Month LIBOR + 0.220% | 2.531 | (c) | 10/09/19 | 2,000 | 2,000,321 | |||||||||||
MUFG Bank Ltd. (Japan), 3 Month LIBOR + 0.160% | 2.310 | (c) | 05/22/20 | 3,500 | 3,499,991 | |||||||||||
Natixis SA (France), | ||||||||||||||||
1 Month LIBOR + 0.290% | 2.534 | (c) | 06/05/20 | 1,450 | 1,450,081 | |||||||||||
3 Month LIBOR + 0.170% | 2.500 | (c) | 03/27/20 | 1,750 | 1,750,483 | |||||||||||
3 Month LIBOR + 0.230% | 2.568 | (c) | 01/10/20 | 800 | 800,442 | |||||||||||
US Bank NA (United States) | 2.357 | (c) | 06/19/20 | 1,000 | 999,533 | |||||||||||
|
| |||||||||||||||
TOTAL CERTIFICATES OF DEPOSIT | 15,891,077 | |||||||||||||||
|
| |||||||||||||||
COMMERCIAL PAPER 9.2% | ||||||||||||||||
Australia & New Zealand Banking Group Ltd. (Australia) 144A | 2.488 | (c) | 10/10/19 | 750 | 750,107 | |||||||||||
Commonwealth Bank of Australia (Australia) 144A | 2.403 | (c) | 01/17/20 | 1,500 | 1,500,434 | |||||||||||
Commonwealth Bank of Australia (Australia) 144A | 2.370 | (c) | 04/02/20 | 1,000 | 1,000,221 | |||||||||||
Enbridge US Inc. 144A | 2.673 | (s) | 10/21/19 | 1,000 | 996,642 | |||||||||||
Eni Finance USA, Inc. 144A | 2.539 | (s) | 09/16/19 | 2,400 | 2,397,315 | |||||||||||
Eni Finance USA, Inc. 144A | 2.881 | (s) | 09/25/19 | 750 | 748,720 | |||||||||||
Entergy Corp. 144A | 3.046 | (s) | 09/09/19 | 250 | 249,838 | |||||||||||
ERAC USA Finance LLC 144A | 2.597 | (s) | 09/24/19 | 1,500 | 1,497,604 | |||||||||||
Federation des Caisses Desjardins du Quebec (Canada) 144A | 2.571 | (c) | 12/10/19 | 1,000 | 1,000,809 | |||||||||||
Federation des Caisses Desjardins du Quebec (Canada) 144A | 2.447 | (c) | 08/14/20 | 1,500 | 1,500,095 | |||||||||||
FMC Technologies Inc. 144A | 2.445 | (s) | 11/08/19 | 3,700 | 3,683,237 | |||||||||||
FMC Technologies Inc. 144A | 2.465 | (s) | 11/01/19 | 1,300 | 1,294,699 | |||||||||||
General Electric Co. | 2.883 | (s) | 09/25/19 | 3,000 | 2,995,012 | |||||||||||
Glencore Funding LLC 144A | 3.503 | (s) | 09/20/19 | 1,400 | 1,398,022 | |||||||||||
HSBC USA, Inc. 144A | 2.508 | (c) | 10/10/19 | 1,000 | 1,000,152 |
See Notes to Financial Statements.
28 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||||||
Nissan Motor Acceptance Corp. 144A | 3.125 | %(s) | 09/16/19 | 1,000 | $ | 998,985 | ||||||||||
Nissan Motor Acceptance Corp. 144A | 2.574 | (s) | 11/12/19 | 1,950 | 1,941,017 | |||||||||||
Nutrien Ltd. 144A | 2.357 | (s) | 09/27/19 | 3,000 | 2,994,619 | |||||||||||
PPL Capital Funding Inc. 144A | 2.355 | (s) | 09/16/19 | 2,000 | 1,997,843 | |||||||||||
Sempra Energy 144A | 2.978 | (s) | 09/18/19 | 2,750 | 2,746,679 | |||||||||||
Shell International Finance BV 144A | 2.037 | (s) | 06/30/20 | 3,500 | 3,443,067 | |||||||||||
Societe Generale SA (France) 144A | 2.681 | (c) | 01/09/20 | 2,000 | 2,002,268 | |||||||||||
VW Credit, Inc. 144A | 2.995 | (s) | 11/06/19 | 750 | 746,699 | |||||||||||
VW Credit, Inc. 144A | 2.479 | (s) | 01/14/20 | 2,325 | 2,304,172 | |||||||||||
Walgreens Boots Alliance, Inc. 144A | 3.137 | (s) | 10/15/19 | 2,000 | 1,994,069 | |||||||||||
Walgreens Boots Alliance, Inc. 144A | 2.546 | (s) | 09/26/19 | 2,000 | 1,996,544 | |||||||||||
Western Union Co. 144A | 2.301 | (s) | 09/05/19 | 5,000 | 4,998,119 | |||||||||||
Westpac Banking Corp. (Australia) 144A | 2.423 | (c) | 01/17/20 | 1,000 | 1,000,363 | |||||||||||
Westpac Banking Corp. (Australia) 144A | 2.330 | (c) | 11/22/19 | 700 | 700,278 | |||||||||||
|
| |||||||||||||||
TOTAL COMMERCIAL PAPER | 51,877,629 | |||||||||||||||
|
| |||||||||||||||
CORPORATE NOTE 0.9% | ||||||||||||||||
Telecommunications 0.9% | ||||||||||||||||
BellSouth LLC, 144A (cost $5,044,029) | 4.266 | 04/26/20 | 5,000 | 5,053,500 | ||||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 82,722,294 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 100.0% | 562,957,779 | |||||||||||||||
Other assets in excess of liabilities 0.0% | 31,986 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 562,989,765 | ||||||||||||||
|
|
The following abbreviations are used in the annual report:
(Q)—Quarterly payment frequency for swaps
(S)—Semiannual payment frequency for swaps
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers.
BKNT—Bank Note
CLO—Collateralized Loan Obligation
EMTN—Euro Medium Term Note
GMTN—Global Medium Term Note
LIBOR—London Interbank Offered Rate
MTN—Medium Term Note
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at August 31, 2019. |
(s) | Represents zero coupon bond. Rate represents yield to maturity at purchase date. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund. |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 29 |
Schedule of Investments(continued)
as of August 31, 2019
Interest rate swap agreements outstanding at August 31, 2019:
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at August 31, 2019 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally cleared swap agreements: | ||||||||||||||||||||||||
3,050 | 10/09/19 | 2.545%(S) | 3 Month LIBOR (1)(Q) | $ | 1,290 | $ | (20,562 | ) | $ | (21,852 | ) | |||||||||||||
4,510 | 04/10/20 | 2.587%(S) | 3 Month LIBOR (1)(Q) | 10,989 | (45,597 | ) | (56,586 | ) | ||||||||||||||||
30,250 | 07/18/20 | 2.711%(S) | 3 Month LIBOR (1)(Q) | (176,284 | ) | (235,256 | ) | (58,972 | ) | |||||||||||||||
28,850 | 11/02/20 | 2.806%(S) | 3 Month LIBOR (1)(Q) | (236,080 | ) | (564,598 | ) | (328,518 | ) | |||||||||||||||
21,755 | 05/09/21 | 2.855%(S) | 3 Month LIBOR (1)(Q) | (305,963 | ) | (621,310 | ) | (315,347 | ) | |||||||||||||||
900 | 11/24/19 | 2.715%(S) | 3 Month LIBOR (1)(Q) | 510 | (7,083 | ) | (7,593 | ) | ||||||||||||||||
33,265 | 03/11/21 | 2.850%(S) | 3 Month LIBOR (1)(Q) | (427,648 | ) | (872,795 | ) | (445,147 | ) | |||||||||||||||
16,320 | 07/27/21 | 2.929%(S) | 3 Month LIBOR (1)(Q) | (278,291 | ) | (431,195 | ) | (152,904 | ) | |||||||||||||||
4,640 | 02/28/20 | 2.742%(S) | 3 Month LIBOR (1)(Q) | (3,213 | ) | (15,620 | ) | (12,407 | ) | |||||||||||||||
2,550 | 02/05/20 | 2.350%(S) | 3 Month LIBOR (1)(Q) | 13,858 | (2,450 | ) | (16,308 | ) | ||||||||||||||||
11,930 | 10/04/21 | 3.046%(S) | 3 Month LIBOR (1)(Q) | (203,599 | ) | (478,295 | ) | (274,696 | ) | |||||||||||||||
21,445 | 12/21/20 | 3.008%(S) | 3 Month LIBOR (1)(Q) | (233,411 | ) | (385,265 | ) | (151,854 | ) | |||||||||||||||
17,525 | 01/11/22 | 2.672%(S) | 3 Month LIBOR (1)(Q) | (258,152 | ) | (490,490 | ) | (232,338 | ) | |||||||||||||||
10,800 | 04/01/22 | 2.265%(S) | 3 Month LIBOR (1)(Q) | (64,500 | ) | (282,961 | ) | (218,461 | ) | |||||||||||||||
12,800 | 04/12/22 | 2.357%(S) | 3 Month LIBOR (1)(Q) | (145,026 | ) | (372,606 | ) | (227,580 | ) | |||||||||||||||
10,015 | 10/02/21 | 1.898%(S) | 3 Month LIBOR (1)(Q) | (6,871 | ) | (118,745 | ) | (111,874 | ) | |||||||||||||||
4,640 | 05/04/20 | 1.713%(S) | 3 Month LIBOR (1)(Q) | 21,245 | (8,993 | ) | (30,238 | ) | ||||||||||||||||
3,250 | 06/15/22 | 1.873%(S) | 3 Month LIBOR (1)(Q) | 32,503 | (35,947 | ) | (68,450 | ) | ||||||||||||||||
8,285 | 11/10/20 | 1.943%(S) | 3 Month LIBOR (1)(Q) | (10,800 | ) | (60,414 | ) | (49,614 | ) | |||||||||||||||
5,000 | 08/22/22 | 1.421%(S) | 3 Month LIBOR (1)(Q) | 162 | (1,768 | ) | (1,930 | ) | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
$(2,269,281) | $ | (5,051,950 | ) | $ | (2,782,669 | ) | ||||||||||||||||||
|
|
|
|
|
|
(1) | The Fund pays the fixed rate and receives the floating rate. |
(2) | The Fund pays the floating rate and receives the fixed rate. |
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral to cover requirements for open centrally cleared/ exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||||
Citigroup Global Markets, Inc. | $2,227,000 | $ | — |
See Notes to Financial Statements.
30 |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Asset-Backed Securities | ||||||||||||
Collateralized Loan Obligations | $ | — | $ | 55,794,998 | $ | — | ||||||
Commercial Mortgage-Backed Securities | — | 55,956,796 | — | |||||||||
Corporate Bonds | — | 343,614,870 | — | |||||||||
Affiliated Mutual Fund | 9,860,408 | — | — | |||||||||
Time Deposit | — | 39,680 | — | |||||||||
Certificates of Deposit | — | 34,292,401 | — | |||||||||
Sovereign Bonds | — | 6,467,497 | — | |||||||||
Commercial Paper | — | 51,877,629 | — | |||||||||
Corporate Note | — | 5,053,500 | — | |||||||||
Other Financial Instruments* | ||||||||||||
Centrally Cleared Interest Rate Swap Agreements | — | (2,782,669 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 9,860,408 | $ | 550,314,702 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value. |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 31 |
Schedule of Investments(continued)
as of August 31, 2019
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows (unaudited):
Banks | 16.3 | % | ||
Commercial Mortgage-Backed Securities | 10.0 | |||
Collateralized Loan Obligations | 9.9 | |||
Commercial Paper | 9.2 | |||
Pharmaceuticals | 5.0 | |||
Electric | 4.4 | |||
Insurance | 4.0 | |||
Oil & Gas | 4.0 | |||
Retail | 3.0 | |||
Auto Manufacturers | 2.7 | |||
Food | 2.5 | |||
Healthcare-Products | 2.5 | |||
Chemicals | 2.1 | |||
Transportation | 2.0 | |||
Aerospace & Defense | 1.8 | |||
Affiliated Mutual Fund | 1.8 | |||
Semiconductors | 1.6 | |||
Telecommunications | 1.4 | |||
Commercial Services | 1.4 | |||
Beverages | 1.3 | |||
Software | 1.3 | |||
Diversified Financial Services | 1.2 | |||
Sovereign | 1.1 | |||
Biotechnology | 1.0 | |||
Agriculture | 1.0 | % | ||
Machinery-Constructions & Mining | 0.9 | |||
Computers | 0.9 | |||
Miscellaneous Manufacturer | 0.9 | |||
Pipelines | 0.9 | |||
Hand/Machine Tools | 0.7 | |||
Environmental Control | 0.6 | |||
Media | 0.5 | |||
Oil & Gas Services | 0.5 | |||
Electronics | 0.3 | |||
Healthcare-Services | 0.3 | |||
Household Products/Wares | 0.3 | |||
Machinery-Diversified | 0.2 | |||
Trucking & Leasing | 0.2 | |||
Lodging | 0.1 | |||
Building Materials | 0.1 | |||
Real Estate Investment Trusts (REITS) | 0.1 | |||
Time Deposit | 0.0 | * | ||
|
| |||
100.0 | ||||
Other assets in excess of liabilities | 0.0 | * | ||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05%. |
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is interest rate contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
See Notes to Financial Statements.
32 |
Fair values of derivative instruments as of August 31, 2019 as presented in the Statement of Assets and Liabilities:
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted carried at fair value | Statement of Liabilities Location | Fair Value | Statement of | Fair Value | ||||||||
Interest rate contracts | Due from/to broker—variation margin swaps* | $ | — | Due from/to broker—variation margin swaps* | $ | (2,782,669 | ) | |||||
|
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
The effects of derivative instruments on the Statement of Operations for the year ended August 31, 2019 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Swaps | |||
Interest rate contracts | $906,056 | |||
|
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Swaps | |||
Interest rate contracts | $ | (2,723,705 | ) | |
|
|
For the year ended August 31, 2019 the Fund’s average volume of derivative activities is as follows:
Interest Rate Swap Agreements(1) |
$87,222,400 |
(1) | Notional Amount in USD. |
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 33 |
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $550,929,881) | $ | 553,097,371 | ||
Affiliated investments (cost $9,860,408) | 9,860,408 | |||
Cash | 630 | |||
Interest and dividends receivable | 2,958,458 | |||
Receivable for Fund shares sold | 2,507,478 | |||
Deposit with broker for centrally cleared/exchange-traded derivatives | 2,227,000 | |||
Due from broker—variation margin swaps | 175,315 | |||
Receivable for investments sold | 68,906 | |||
|
| |||
Total assets | 570,895,566 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 7,835,024 | |||
Management fee payable | 65,700 | |||
Other liabilities | 5,077 | |||
|
| |||
Total Liabilities | 7,905,801 | |||
|
| |||
Net Assets | $ | 562,989,765 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 11,225 | ||
Paid-in capital in excess of par | 561,841,127 | |||
|
| |||
561,852,352 | ||||
Total distributable earnings (loss) | 1,137,413 | |||
|
| |||
Net assets, August 31, 2019 | $ | 562,989,765 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 50.15 | ||
|
|
See Notes to Financial Statements.
34 |
Statement of Operations
Year Ended August 31, 2019
Net Investment Income (Loss) | ||||
Income | ||||
Interest income | $ | 7,126,133 | ||
Affiliated dividend income | 82,767 | |||
|
| |||
Total income | 7,208,900 | |||
|
| |||
Expenses | ||||
Management fee | 370,018 | |||
|
| |||
Total expenses | 370,018 | |||
Less: Management fee waiver and/or expense reimbursement | (284 | ) | ||
|
| |||
Net expenses | 369,734 | |||
|
| |||
Net investment income (loss) | 6,839,166 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(705)) | 79,456 | |||
Swap agreement transactions | 906,056 | |||
Foreign currency transactions | 63 | |||
|
| |||
985,575 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 2,139,430 | |||
Swap agreements | (2,723,705 | ) | ||
|
| |||
(584,275 | ) | |||
|
| |||
Net gain (loss) on investment transactions | 401,300 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 7,240,466 | ||
|
|
See Notes to Financial Statements.
PGIM Ultra Short Bond ETF | 35 |
Statements of Changes in Net Assets
Year Ended August 31, 2019 | Period Ended August 31, 2018* | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 6,839,166 | $ | 349,649 | ||||
Net realized gain (loss) on investments | 985,575 | 48,332 | ||||||
Net change in unrealized appreciation (depreciation) on investments | (584,275 | ) | (30,904 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 7,240,466 | 367,077 | ||||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | (6,192,897 | ) | — | |||||
|
|
|
| |||||
Distributions from net investment income | ** | (277,234 | ) | |||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 549,371,823 | 52,536,890 | ||||||
Cost of shares reacquired | (40,056,360 | ) | (100,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | 509,315,463 | 52,436,890 | ||||||
|
|
|
| |||||
Total increase (decrease) | 510,363,032 | 52,526,733 | ||||||
Net Assets: | ||||||||
Beginning of period | 52,626,733 | 100,000 | ||||||
|
|
|
| |||||
End of period(a) | $ | 562,989,765 | $ | 52,626,733 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | ** | $ | 78,236 | ||||
|
|
|
|
* | For the period from April 5, 2018 (commencement of operations) through August 31, 2018. |
** | For the year ended August 31, 2019 the Fund has adopted amendments to RegulationS-X (refer to Note 9) |
See Notes to Financial Statements.
36 |
Notes to Financial Statements
PGIM ETF Trust (the “Trust”) is a diversified,open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”), and operated as an exchange-traded fund. The Trust was organized as a Delaware statutory trust on October 23, 2017 and consists of six separate series (each, a “Fund” and collectively, the “Funds”): PGIM Ultra Short Bond ETF, PGIM Active High Yield Bond ETF, PGIM QMA Strategic AlphaLarge-Cap Core ETF, PGIM QMA Strategic AlphaSmall-Cap Growth ETF, PGIM QMA Strategic Alpha Small- Cap Value ETF and PGIM QMA Strategic Alpha International Equity ETF.
These financial statements relate only to PGIM Ultra Short Bond ETF.
The investment objective of the Fund is to seek total return through a combination of current income and capital appreciation, consistent with preservation of capital.
1. Accounting Policies
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation:The Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Trust’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
For the fiscal reporting year end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign
PGIM Ultra Short Bond ETF | 37 |
Notes to Financial Statements(continued)
securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820—Fair Value Measurements and Disclosures.
Investments inopen-end,non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are generally valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the
38 |
general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities:Pursuant to Rule22e-4 under the 1940 Act, the Fund has adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Fund limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities:Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the Fund’s LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “Illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Fund’s investments in restricted securities could be impaired if trading does not develop or declines.
Swap Agreements: The Fund may enter into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with counterparty(“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation (depreciation) on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. Any upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.
PGIM Ultra Short Bond ETF | 39 |
Notes to Financial Statements(continued)
Interest Rate Swaps:Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. The Fund used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed-rate payments and to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value of the cash flows to be received from the counterparty over the contract’s remaining life.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on theex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.
Taxes:It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions:The Fund expects to declare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date. Permanent book/ tax differences relating to income and gain (loss) are reclassified amongst total distributable earnings (loss) andpaid-in capital in excess of par, as appropriate.
Estimates:The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
Pursuant to a management agreement with the Trust on behalf of the Fund (the Management Agreement), PGIM Investments, subject to the supervision of the Board and
40 |
in conformity with the stated policies of the Fund, manages both the investment operations of the Fund and the composition of the Fund’s portfolio, including the purchase, retention and disposition of assets. In connection therewith, the Manager is obligated to keep certain books and records of the Fund. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Fund. The Manager will continue to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements. PGIM Investments will review the performance of the investment subadviser(s) and make recommendations to the Board with respect to the retention of investment subadvisers and the renewal of contracts. The Manager also administers the Fund’s business affairs and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Fund’s custodian (the Custodian). The management services of PGIM Investments to the Fund are not exclusive under the terms of the Management Agreement and PGIM Investments is free to, and does, render management services to others.
The Board of Trustees of the Trust has approved a unitary management fee structure for the Fund. Under the unitary fee structure, the Manager is responsible for paying substantially all the expenses of the Fund, costs of borrowing money (including interest expenses and any loan commitment or other associated fees), taxes, acquired fund fees and expenses, brokerage fees, costs of holding shareholder meetings, litigation, indemnification and extraordinary expenses.
The unitary fee paid to the Manager is accrued daily and payable monthly, at an annual rate of 0.15% of the Fund’s average daily net assets. The Manager has contractually agreed, beginning from the inception of the Fund, to waive any management fees it receives from the Fund in an amount equal to the subadvisory fees paid by the Fund to the PGIM Institutional Money Market Fund due to the Fund’s investment of its excess overnight cash in the PGIM Institutional Money Market Fund. This waiver will remain in effect for as long as the Fund remains invested or intends to invest in the PGIM Institutional Money Market Fund.
The Manager has entered into a subadvisory agreement (Subadvisory Agreement) with PGIM, Inc., the Fund’s investment subadviser (the “subadviser”), which provides subadvisory services to the Fund through its PGIM Fixed Income unit. The Subadvisory Agreement provides that the subadviser will furnish investment advisory services in connection with the management of the Fund. In connection therewith, the subadviser is obligated to keep certain books and records of the Fund. Under the Subadvisory Agreement, the subadviser, subject to the supervision of PGIM Investments, is responsible for managing the assets of the Fund in accordance with the Fund’s investment objectives, policies and restrictions. The subadviser determines what securities and other instruments are purchased and sold for the Fund and is responsible for obtaining and evaluating financial data relevant to the Fund. PGIM Investments continues to have responsibility for all investment advisory services pursuant to the Management Agreement and supervises the subadviser’s performance of such services. The Manager pays for the services of the subadviser.
PGIM Ultra Short Bond ETF | 41 |
Notes to Financial Statements(continued)
Brown Brothers Harriman & Co. (“BBH”) serves as the Custodian, Transfer Agent, Administrative Agent and Securities Lending Agent for the Trust. Pursuant to a Custodian Agreement, BBH maintains certain financial accounting books and records pursuant to an agreement with the Trust. Subcustodians provide custodial services for anynon-US assets held outside the United States. Pursuant to an Administrative and Transfer Agency Agreement, BBH maintains certain books and records and provides transfer agency, administrative, legal, tax support and accounting and financial reporting services for the maintenance and operations of the Trust. As the transfer and dividend disbursing agent of the Trust, BBH provides customary transfer agency services to the Trust, including the handling of shareholder communications, the processing of shareholder transactions, the maintenance of shareholder account records, the payment of dividends and distributions, and related functions. For these services, BBH receives compensation from the Manager and is reimbursed for expenses, including custodian and administration fees and certainout-of-pocket expenses including, but not limited to, postage, stationery, printing, allocable communication expenses and other costs. The Manager is responsible for compensating BBH under the Custodian and Administrative and Transfer Agency Agreements. As securities lending agent, BBH is responsible for marketing to approved borrowers available securities from the Fund’s portfolio. As administered by BBH, available securities from the Fund’s portfolio are furnished to borrowers throughsecurity-by-security loans effected by BBH as lending agent on behalf of the Fund. BBH is responsible for the administration and management of the Fund’s securities lending program, including the preparation and execution of a participant agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented with the Fund’s custodian, ensuring that loaned securities are daily valued and that the corresponding required cash collateral is delivered by the borrower(s), and arranging for the investment of cash collateral received from borrowers in accordance with the Fund’s investment guidelines. BBH receives as compensation for its services a portion of the amount earned by the Fund for lending securities.
3. Other Transactions with Affiliates
The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), registered under the 1940 Act and managed by PGIM Investments. Through the Fund’s investments in the mentioned underlying fund, PGIM Investments and/or its affiliates are paid fees or compensated for providing their services. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule17a-7 procedures. Rule17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated
42 |
investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Pursuant to the Rule17a-7 procedures and consistent with guidance issued by the SEC, the Fund’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such17a-7 transactions were effected in accordance with the Fund’s Rule17a-7 procedures. For the year ended August 31, 2019, no17a-7 transactions were entered into by the Fund.
Prudential Investment Management Services LLC (“PIMS” or the “Distributor”), acts as the distributor of the Fund. The Distributor is a subsidiary of Prudential Financial, Inc. (“Prudential”), pursuant to the terms of a distribution agreement (“Distribution Agreement”) between the Trust and the Distributor. Shares are continuously offered for sale by the Distributor only. Although the Distributor does not receive any fees under the Distribution Agreement, the Manager or its affiliates may pay the Distributor for certain distribution related services.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended August 31, 2019, were $416,483,029 and $10,683,116 respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the year ended August 31, 2019, is presented as follows:
Value, Beginning | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Institutional Money Market Fund* |
| |||||||||||||||||||||||||||
$37,013 | $ | 44,274,586 | $ | 44,311,066 | $ | — | $ | (533 | ) | $ | — | — | — | |||||||||||||||
PGIM Core Ultra Short Bond Fund* |
| |||||||||||||||||||||||||||
$ — | $ | 163,223,580 | $ | 153,363,000 | $ | — | $ | (172 | ) | $ | 9,860,408 | 9,860,408 | $ | 82,767 | ||||||||||||||
Total |
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|
| ||||||||||||||
$37,013 | $ | 207,498,166 | $ | 197,674,066 | $ | — | $ | (705 | ) | $ | 9,860,408 | 9,860,408 | $ | 82,767 | ||||||||||||||
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* | The Fund did not have any capital gain distributions during the reporting period. |
5. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date.
For the year ended August 31, 2019, the tax character of dividends paid by the Fund was $6,192,897 of ordinary income. For the reporting period ended August 31, 2018, the tax character of dividends paid by the Fund was $277,234 of ordinary income.
PGIM Ultra Short Bond ETF | 43 |
Notes to Financial Statements(continued)
As of August 31, 2019, the accumulated undistributed earnings on a tax basis was of $2,034,693 of ordinary income.
The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of August 31, 2019 were as follows:
Tax Basis | Gross | Gross | Net Unrealized | |||
$561,060,303 | $3,287,227 | $(4,172,420) | $(885,193) |
The difference between book basis and tax basis was primarily attributable to deferred loss on wash sales, amortization of premium and swaps.
For federal income tax purposes, the Fund had a capital loss carryforward as of August 31, 2019 of $12,087 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the two fiscal years up to the most recent fiscal year ended August 31, 2019 are subject to such review.
6. Capital and Ownership
The Fund is an exchange-traded fund, commonly known as an “ETF”. Individual shares of the Fund may only be purchased and sold in secondary market transactions through brokers or other financial intermediaries. Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the “Exchange”), and because the shares of the Fund trade at market prices rather than NAV, shares of the Fund may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund will issue and redeem its shares at NAV only in a large specified number of shares called a “Creation Unit” or multiples thereof to investors who have entered into an agreement with the Distributor and are authorized to transact with the Trust in Creation Units (“Authorized Participants”). A Creation Unit consists of 25,000 shares of the Fund. The Fund generally issues and redeems Creation Units in return for a specified amount of cash and/ or designated portfolio of securities. Except when aggregated in Creation Units, shares are not individually redeemable. Authorized Participants transacting in Creation Units includingnon-standard orders and
44 |
whole or partial cash purchases or redemptions may also pay variable transaction fees to compensate the Fund for certain transaction costs (e.g. brokerage costs) relating to investing in portfolio securities. Such variable transaction fees, if any, are currently being waived by the Fund. In addition, fixed transaction fees are imposed for the transfer and other costs associated with the creation or redemption of Creation Units. Authorized Participants are responsible for paying these fixed transaction fees to BBH. As of August 31, 2019, these fixed transaction fees are being paid by PGIM Investments. For the reporting period ended August 31, 2019 PGIM Investments paid $36,500 of fixed transaction fees to BBH.
The Trust is authorized to issue an unlimited number of shares of beneficial interest, $0.001 par value per share.
As of August 31, 2019, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned 500,000 shares of the Fund.
At reporting period end, five shareholders of record, each holding greater than 5% of the Fund, held 69% of the Fund’s outstanding shares on behalf of multiple beneficial owners, none of which are affiliate of Prudential.
Transactions in shares of beneficial interest were as follows:
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 10,975,000 | $ | 549,371,823 | |||||
Shares reacquired | (800,000 | ) | (40,056,360 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding before conversion | 10,175,000 | 509,315,463 | ||||||
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|
| |||||
Net increase (decrease) in shares outstanding | 10,175,000 | $ | 509,315,463 | |||||
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7. Borrowings
The Trust, on behalf of the Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 4, 2018 through October 3, 2019. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCA is paid monthly and at a per annum interest rate of 1.25% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Subsequent to the reporting period end, the SCA has been renewed effective October 3, 2019 and will continue to provide a commitment of $900 million through October 1, 2020.
PGIM Ultra Short Bond ETF | 45 |
Notes to Financial Statements(continued)
The commitment fee paid by the Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.20% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Fund utilized the SCA during the year ended August 31, 2019. The average daily balance for the 1 day that the Fund had loans outstanding during the period was approximately $830,000, borrowed at a weighted average interest rate of 3.69%. The maximum loan balance outstanding during the period was $830,000. At August 31, 2019, the Fund did not have an outstanding loan balance.
8. Risks of Investing in the Fund
The Fund’s risks include, but are not limited to, some or all of the risks discussed below:
Authorized Participant Concentration Risk:Only an Authorized Participant may engage in creation or redemption transactions directly with the Fund. The Fund has a limited number of intermediaries that act as Authorized Participants and none of these Authorized Participants is or will be obligated to engage in creation or redemption transactions. To the extent that these intermediaries exit the business or are unable to or choose not to proceed with creation and/ or redemption orders with respect to the Fund and no other Authorized Participant creates or redeems, shares of the Fund may trade at a substantial discount or premium to NAV, may trade at larger spreads and possibly face trading halts and/or delisting.
Bond Obligations Risk:The Fund’s holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed-income obligations also may be subject to “call and redemption risk”, which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to reinvest at the same level and therefore would earn less income.
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ETF Shares Trading Risk:Fund shares are listed for trading on the Exchange and the shares are bought and sold in the secondary market at market prices. The market prices of the shares of the Fund are expected to fluctuate in response to changes in the Fund’s NAV, the intraday value of the Fund’s holdings and supply and demand for shares of the Fund. We cannot predict whether shares of the Fund will trade above, below or at their NAV. Trading on the Exchange, including trading of Fund shares, may be halted in certain circumstances and shareholders may not be able to sell Fund shares at the time or price desired. During periods of stressed market conditions, the market for the shares of the Fund may become less liquid in response to deteriorating liquidity in the markets for the Fund’s portfolio investments. This adverse effect on the liquidity of the Fund’s shares could lead to differences between the market price of the Fund’s shares and the NAV of those shares. There can be no assurance that the requirements of the Exchange to maintain the listing of shares of the Fund will continue to be met. At times, trading in the securities of ETFs has become volatile and unpredictable and the price of ETF shares has diverged from market driven fundamentals. Since the Fund is new, an active secondary market for the shares of the Fund may not develop or may not continue once developed.
Interest Rate Risk:The value of an investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk”. When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk”. The Fund may face a heightened level of interest rate risk as a result of the U.S. Federal Reserve Board’s policies. The Fund’s investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Liquidity Risk:The Fund may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Fund are difficult to purchase or sell. Liquidity risk includes the risk that the Fund may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be more difficult to value. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, the Fund may incur higher transaction costs when executing trade orders of a given size. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Market and Credit Risk:Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s
PGIM Ultra Short Bond ETF | 47 |
Notes to Financial Statements(continued)
financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of an investment in the Fund will decline. Additionally, the Fund may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Fund has unsettled or open transactions defaults.
Derivatives Risk:Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivatives transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, manyover-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument.Over-the-counter derivative instruments also involve the risk that the other party will not meet its obligations to the Fund.
9. Recent Accounting Pronouncements and Reporting Updates
In August 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments to RegulationS-X to update and simplify the disclosure requirements for registered investment companies by eliminating requirements that are redundant or duplicative of US GAAP requirements or other SEC disclosure requirements. The new amendments require the presentation of the total, rather than the components, of distributable earnings on the Statement of Assets and Liabilities and the total, rather than the components, of dividends from net investment income and distributions from net realized gains on the Statements of Changes in Net Assets. The amendments also removed the requirement for the parenthetical disclosure of undistributed net investment income on the Statements of Changes in Net Assets and certain tax adjustments that were reflected in the Notes to Financial Statements. The Manager has adopted the amendments and reflected them in the Fund’s financial statements.
In August 2018, the FASB issued Accounting Standards Update (“ASU”)No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Fund’s policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019,
48 |
and interim periods within those fiscal years. The Manager has evaluated the implications of certain provisions of the ASU and has determined to early adopt aspects related to the removal and modification of certain fair value measurement disclosures under the ASU effective immediately. The Manager continues to evaluate certain other provisions of the ASU and does not expect a material impact to financial statement disclosures.
In September 2019, the Securities and Exchange Commission adopted a new rule and related form amendments regulating ETFs, which will become effective 60 days after publication in the Federal Register. The Manager is currently evaluating the rule and form amendments, but does not anticipate any material impact on future financial statement disclosures.
10. Subsequent Events
At a meeting held on September 11, 2019, the Board approved the addition of PGIM Limited as subadviser to the Fund. This change became effective on September 16, 2019.
PGIM Ultra Short Bond ETF | 49 |
Financial Highlights
Year Ended August 31, 2019 | April 5, through 2018 | |||||||||||
Per Share Operating Performance(a): | ||||||||||||
Net Asset Value, Beginning of Period | $50.12 | $50.00 | ||||||||||
Income (loss) from investment operations: | ||||||||||||
Net investment income (loss) | 1.40 | 0.53 | ||||||||||
Net realized and unrealized gain (loss) on investment | (0.02 | ) | 0.01 | |||||||||
Total from investment operations | 1.38 | 0.54 | ||||||||||
Less Dividends and Distributions: | ||||||||||||
Dividends from net investment income | (1.35 | ) | (0.42 | ) | ||||||||
Net asset value, end of period | $50.15 | $50.12 | ||||||||||
Total Return(b): | 2.80% | 1.08% | ||||||||||
Ratios/Supplemental Data: | ||||||||||||
Net assets, end of period (000) | $562,990 | $52,627 | ||||||||||
Average net assets (000) | $246,678 | $33,209 | ||||||||||
Ratios to average net assets(c): | ||||||||||||
Expenses after waivers and/or expense reimbursement | 0.15% | 0.15% | (d) | |||||||||
Expenses before waivers and/or expense reimbursement | 0.15% | 0.15% | (d) | |||||||||
Net investment income (loss) | 2.77% | 2.58% | (d) | |||||||||
Portfolio turnover rate | 7% | (f) | 145% | (f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Annualized. |
(e) | Commencement of operations. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
50 |
Report of Independent Registered Public Accounting Firm
To the Shareholders of PGIM Ultra Short Bond ETF and Board of Trustees
PGIM ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of PGIM Ultra Short Bond ETF, a series of PGIM ETF Trust, (the Fund), including the schedule of investments, as of August 31, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for the year ended August 31, 2019 and the period from April 5, 2018 (commencement of operations) to August 31, 2018, and the related notes (collectively, the financial statements) and the financial highlights for the periods indicated therein. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2019, the results of its operations for the year then ended, the changes in its net assets for the year ended August 31, 2019 and the period from April 5, 2018 to August 31, 2018, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2019, by correspondence with the custodian, transfer agent, and brokers, or by other appropriate auditing procedures when replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more PGIM and/or Prudential Retail investment companies since 2003.
New York, New York
October 15, 2019
PGIM Ultra Short Bond ETF | 51 |
Federal Income Tax Information(unaudited)
For the period ended August 31, 2019, the Fund reports the maximum amount allowable but not less than 49.48% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.
In January 2020, you will be advised on IRS Form1099-DIV or substitute1099-DIV, as to the federal tax status of the dividends received by you in calendar year 2019.
52 |
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS(unaudited)
Information about Board Members and Officers of the Funds is set forth below. Board Members who are not deemed to be “interested persons” of the Funds, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Funds are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering theday-to-day operations of the Funds.
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Ellen S. Alberding 3/11/58 Board Member Portfolios Overseen: 96 |
President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018). |
None. |
Since December 2017 | |||
Kevin J. Bannon 7/13/52 Board Member Portfolios Overseen: 96 |
Retired; Managing Director (April2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May2003-May 2007) of BNY Hamilton Family of Mutual Funds. |
Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). |
Since December 2017 |
PGIM Ultra Short Bond ETF
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Linda W. Bynoe 7/9/52 Board Member Portfolios Overseen: 96 |
President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). |
Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). |
Since December 2017 | |||
Barry H. Evans 11/2/60 Board Member Portfolios Overseen: 95 |
Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S. |
Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research(2008-2016). |
Since December 2017 | |||
Keith F. Hartstein 10/13/56 Board Member & Independent Chair Portfolios Overseen: 96 |
Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Laurie Simon Hodrick 9/29/62 Board Member Portfolios Overseen: 95 |
A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). |
Independent Director, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (since July 2018) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). |
Since December 2017 | |||
Michael S. Hyland, CFA 10/4/45 Board Member Portfolios Overseen: 96 |
Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). |
None. |
Since December 2017 | |||
Brian K. Reid 9/22/61 Board Member Portfolios Overseen: 95 |
Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017). |
None. |
Since March 2018 |
PGIM Ultra Short Bond ETF
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Grace C. Torres 6/28/59 Board Member Portfolios Overseen: 95 |
Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. |
Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. |
Since December 2017 |
Interested Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Stuart S. Parker 10/5/62 Board Member & President Portfolios Overseen: 96 |
President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Interested Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Scott E. Benjamin 5/21/73 Board Member & Vice President Portfolios Overseen:96 |
Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). |
None. |
Since December 2017 |
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Raymond A. O’Hara 9/11/55 Chief Legal Officer |
Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of PGIM Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.). |
Since December 2017 |
PGIM Ultra Short Bond ETF
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Dino Capasso 8/19/74 Chief Compliance Officer |
Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. |
Since December 2017 | ||
Andrew R. French 12/22/62 Secretary |
Vice President of PGIM Investments LLC (December 2018-Present); formerly Vice President and Corporate Counsel (February 2010-December 2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. |
Since December 2017 | ||
Jonathan D. Shain 8/9/58 Assistant Secretary |
Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc. |
Since December 2017 | ||
Claudia DiGiacomo 10/14/74 Assistant Secretary |
Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). |
Since December 2017 | ||
Diana N. Huffman 4/14/82 Assistant Secretary |
Vice President and Corporate Counsel (since September 2015) of Prudential; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). |
Since March 2019 | ||
Kelly A. Coyne 8/8/68 Assistant Secretary |
Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). |
Since December 2017 | ||
Christian J. Kelly 5/5/75 Treasurer and Principal Financial and Accounting Officer |
Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); formerly, Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). |
Since January 2019 |
Visit our website at pgiminvestments.com
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Lana Lomuti 6/7/67 Assistant Treasurer |
Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. |
Since December 2017 | ||
Russ Shupak 10/08/73 Assistant Treasurer |
Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Deborah Conway 3/26/69 Assistant Treasurer |
Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Elyse M. McLaughlin 1/20/74 Assistant Treasurer |
Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration. |
Since October 2019 |
(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
PGIM Ultra Short Bond ETF
Approval of Advisory Agreements(unaudited)
The Fund’s Board of Trustees
The Board of Trustees (the “Board”) of PGIM Ultra Short Bond ETF1 (the “Fund”) consists of eleven individuals, nine of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”).2 The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the Trustees of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established four standing committees: the Audit Committee, the Nominating and Governance Committee, and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit. In considering the renewal of the agreements, the Board, including all of the Independent Trustees, met on May 30, 2019 and on June11-13, 2019 and approved the renewal of the agreements through July 31, 2020, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments, the subadviser and, as relevant, its affiliates, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout
1 | PGIM Ultra Short Bond ETF is a series of PGIM ETF Trust. |
2 | Grace C. Torres was an Interested Trustee of the Fund at the time the Board considered and approved the renewal of the Fund’s advisory agreements, but has since become an Independent Trustee of the Fund. |
PGIM Ultra Short Bond ETF |
Approval of Advisory Agreements(continued)
the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on May 30, 2019 and on June11-13, 2019.
The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, between PGIM Investments and PGIM, which, through its PGIM Fixed Income unit, serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and, PGIM Fixed Income. The Board noted that PGIM Fixed Income is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator of the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Fixed Income and PGIML, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and PGIM Fixed Income, and also considered the qualifications, backgrounds and responsibilities of PGIM Fixed Income’s portfolio managers who are responsible for theday-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and
Visit our website at pgiminvestments.com |
PGIM Fixed Income’s organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments and PGIM Fixed Income. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments and PGIM Fixed Income.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments, and the subadvisory services provided to the Fund by PGIM Fixed Income, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and PGIM Fixed Income under the management, subadvisory agreement.
Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments exceeded the management fees received by PGIM Investments, resulting in an operating loss to PGIM Investments for the year ended December 31, 2018. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
PGIM Ultra Short Bond ETF |
Approval of Advisory Agreements(continued)
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments, and PGIM Fixed Income
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Fixed Income and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Fixed Income included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments and PGIM Fixed Income were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the three-month period ended December 31, 2018. The Board considered that the Fund commenced operations on April 5, 2018 and that longer-term performance was not yet available.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal period ended August 31, 2018. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
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The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
Net Performance | Q4 2018 | 1 Year | 3 Years | 5 Years | 10 Years | |||||
2nd Quartile | N/A | N/A | N/A | N/A | ||||||
Actual Management Fees:3rd Quartile | ||||||||||
Net Total Expenses: 1st Quartile |
• | The Board noted that the Fund underperformed its benchmark index over thethree-month period ended December 31, 2018. |
• | The Board noted that the Fund does not yet have a three-year performance record and that, therefore, the subadviser should have more time to develop that record. |
• | The Board and PGIM Investments agreed to retain the Fund’s existing contractual fee waiver, pursuant to which PGIM Investments waives any management fees it receives from the Fund in an amount equal to the subadvisory fees paid by the Fund to the PGIM Institutional Money Market Fund. |
• | The Board concluded that in light of the above, it would be in the best interests of the Fund and its shareholders to continue to allow the Fund to create a longer-term performance record, and to renew the agreements. |
• | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Ultra Short Bond ETF |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | pgiminvestments.com |
PROXY VOTING |
The Board of Trustees of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
TRUSTEES |
Ellen S. Alberding• Kevin J. Bannon• Scott E. Benjamin• Linda W. Bynoe• Barry H. Evans• Keith F. Hartstein• Laurie Simon Hodrick• Michael S. Hyland• Stuart S. Parker• Brian K. Reid• Grace C. Torres |
OFFICERS |
Stuart S. Parker,President•Scott E. Benjamin,Vice President • Christian J. Kelly,Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara,Chief Legal Officer • Dino Capasso,Chief Compliance Officer • Charles H. Smith,Anti-Money Laundering Compliance Officer • Andrew R. French,Secretary • Jonathan D. Shain,Assistant Secretary • Claudia DiGiacomo,Assistant Secretary • Diana N. Huffman,Assistant Secretary •Kelly A. Coyne,Assistant Secretary• Lana Lomuti,Assistant Treasurer • Russ Shupak,Assistant Treasurer• Elyse McLaughlin,Assistant Treasurer• Deborah Conway,Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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SUBADVISER | PGIM Fixed Income PGIM Limited | 655 Broad Street Newark, NJ 07102 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN/TRANSFER AGENT | Brown Brothers Harriman & Co. | 50 Post Office Square Boston, MA 02110 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 | ||
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An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website atpgiminvestments.com or by calling(800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your fund documents online, go topgiminvestments.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM Ultra Short Bond ETF, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. Form N-PORT is filed with the Commission quarterly, and each Fund’s full portfolio holdings as of the first and third fiscal quarter-ends (as of the third month of the Fund’s fiscal quarter for reporting periods on or after September 30, 2019) will be made publicly available 60 days after the end of each quarter at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852. |
Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM ULTRA SHORT BOND ETF
TICKER SYMBOL | PULS |
ETF1000E
PGIM ACTIVE HIGH YIELD BOND ETF (NYSE Arca: PHYL)
ANNUAL REPORT
AUGUST 31, 2019
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (pgiminvestments.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank).
You may elect to receive all future reports in paper free of charge. You should contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account.
To enroll in e-delivery, go to pgiminvestments.com/edelivery
Objective:Total return, through a combination of current income and capital appreciation |
Highlights(unaudited)
• | The Fund benefited from very strong security selection, accounting for a large portion of the outperformance in the reporting period. This was mostly driven by positioning in the upstream energy, health care & pharmaceuticals, electric utility, and technology sectors. |
• | Overweights to Wind Tre Spa (telecom) and Calpine Corp. (electric utilities), as well as underweights to upstream energy issuers EP Energy Corp. and Weatherford International plc, were among the largest single-name contributors. |
• | Underweights to the banking and cable & satellite sectors hurt performance. An overweight to chemicals was also negative. |
• | Security selection within telecom and midstream energy were a drag on performance. The largest single-name detractors from returns included overweights to Digicel (telecom) and Alta Mesa Holdings LP (upstream energy). |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Exchange-traded funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies.© 2019 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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PGIM Active High Yield Bond ETF | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the annual report for the PGIM Active High Yield Bond ETF informative and useful. The report covers performance from September 24, 2018, the fund’s inception date, through the end of the reporting period on August 31, 2019.
While the US economy remained healthy, with rising corporate profits and strong job growth, the Federal Reserve cut interest rates late in the period for the first time since the Great Recession more than a decade ago. After nine rate increases in recent years, the cut was a proactive attempt by the Fed to extend the longest domestic economic expansion on record as growth in many other regions weakened. China in particular showed signs of slowing amid trade tensions with the US, and turmoil in the United Kingdom continued as it negotiated an exit from the European Union.
Despite the growing US economy, volatility returned to the equity markets during the period. After corporate tax cuts and regulatory reforms helped boost US stocks early in the period, equities declined significantly at the end of 2018 on concerns about China’s economy, a potential global trade war, higher interest rates, and worries that profit growth might slow. Stocks reversed course early in 2019, rising sharply after the Fed moderated its position on additional rate hikes for the remainder of the year. For the period overall,large-cap US equities rose whilesmall-cap US stocks fell. Stocks also declined in developed foreign and emerging markets.
The overall US bond market posted strong returns during the period on a significant rally in interest rates that saw the10-year US Treasury yield decline from around 3% to 2%. Investment grade corporate bonds led the way with a double-digit gain, while corporate high yield and municipal bonds each had a high single-digit return. Globally, bonds in developed markets delivered solid returns, while emerging markets debt also posted positive results. A continuing trend during the period was the inversion of a portion of the US Treasury yield curve, as the yield on certain shorter maturities exceeded the yield on the10-year bond.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is atop-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Active High Yield Bond ETF
October 15, 2019
PGIM Active High Yield Bond ETF | 5 |
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling(800) 225-1852.
Total Returns as of 8/31/19 | ||
Since Inception (%) | ||
Net Asset Value (NAV) | 8.20 (9/24/18) | |
Market Price* | 8.53 (9/24/18) | |
Bloomberg Barclays US High Yield Very Liquid Index | 6.63 | |
Lipper High Yield Funds Average | 5.11 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the market price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the Bloomberg Barclays US High Yield Very Liquid Index by portraying the initial account values at the commencement of operations (September 24, 2018) and the account values at the end of the current fiscal period (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on September 24, 2018, while the benchmark and the Index assume that the initial investment occurred on August 31, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
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Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption or sale of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
Bloomberg Barclays US High Yield Very Liquid Index (VLI)—The Bloomberg Barclays US High Yield Very Liquid Index is a component of the US Corporate High Yield Index that is designed to track a more liquid component of the USD-denominated, high yield, fixed rate corporate bond market. The US High Yield VLI uses the same eligibility criteria as the US Corporate High Yield Index, but includes only the three largest bonds from each issuer that have a minimum amount outstanding of USD500mn and less than five years from issue date. The Index also limits the exposure of each issuer to 2% of the total market value and redistributes any excess market value index-wide on a pro rata basis.
Lipper High Yield Funds Average—The Lipper High Yield Funds Average (Lipper Average) is based on the average return of all funds in the Lipper High Yield Funds universe for the periods noted. Funds in the Lipper Average aim at high (relative) current yield from fixed income securities, have no quality or maturity restrictions, and tend to invest in lower-grade debt issues.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
PGIM Active High Yield Bond ETF | 7 |
Your Fund’s Performance(continued)
Credit Quality expressed as a percentage of total investments as of 8/31/19 (%) | ||||
AAA | 5.3 | |||
BBB | 4.3 | |||
BB | 35.6 | |||
B | 42.1 | |||
CCC | 9.9 | |||
CC | 0.5 | |||
Cash/Cash Equivalents | 2.3 | |||
Total Investments | 100.0 |
Source: PGIM Fixed Income
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. Credit ratings are subject to change.
Distributions and Yields as of 8/31/19 | ||||||
Total Dividends Paid Since Inception ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||
2.19 | 6.16 | 6.16 |
*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.
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Strategy and Performance Overview(unaudited)
How did the Fund perform?
ThePGIM Active High Yield Bond ETF (the Fund) returned 8.20% based on net asset value since the Fund’s inception on September 24, 2018 through the end of the reporting period on August 31, 2019, outperforming the 6.63% return of the Bloomberg Barclays US High Yield Very Liquid Index (the Index) and the 5.11% return of the Lipper High Yield Funds Average over the same period.
What were the market conditions?
• | While the momentum that closed the third quarter of 2018 carried into the fourth quarter for both the US and European high yield markets, the positive sentiment soon abated in the face of several concerns that the markets could not ignore. As a result, spreads widened and quarterly total returns declined into negative territory. On the back of the continued strength from the third quarter of 2018, US high yield spreads hit their post-financial crisis tights of 316 basis points (bps) early in the fourth quarter. (One basis point is 0.01%.) However, the momentum was short lived as spreads reached their 2018year-to-date wides less than a month later amid an escalatingUS-China trade war, several corporate profit warnings, prospects for political gridlock, and concerns over further Federal Reserve (Fed) policy tightening. European high yield spreads began the fourth quarter with a positive tone—32 bps tighter than theyear-to-date wides reached at the start of the third quarter—as negative noise around Italian political developments faded and meaningful high yield bond supply was digested. Spreads remained relatively stable in October 2018 but sold off sharply in November and December on intensifying trade war rhetoric, concerns around a broader deceleration in global growth, and continued Brexit uncertainty. This sent spreads 155 bps wider overall in the fourth quarter. |
• | Apart from intermittent weakness, the US and European high yield markets rebounded strongly in the first quarter of 2019. Although weaker-than-expected European economic data late in the quarter prompted a swift sentiment change, the sector ended the quarter firmly in positive territory. In terms of quality, whileCCC-rated bonds led the way in the quarter, they only partially recouped their significant underperformance from the fourth quarter of 2018. Meanwhile,B- andBB-rated bonds generated strong first-quarter 2019 excess returns versus swaps. Energy was thetop-performing sector in the quarter, helped by a 29% bounce in oil prices amid pledged production cuts. The airline sector was the weakest performer on margin pressure associated with higher oil prices. European high yield got off to a strong start in 2019, with the European high yield index snapping back sharply from fourth-quarter 2018 weakness. Concerns around decelerating global growth were largely shrugged off due to accommodative central bank policies, a lack ofnew-issue supply, and a stabilization/reversals of fund flows, all of which helped drive spreads tighter by 110 bps (to 405 bps). |
PGIM Active High Yield Bond ETF | 9 |
Strategy and Performance Overview(continued)
• | In a volatile second quarter of 2019, US high yield spreads hityear-to-date tights in April, widened by almost 100 bps in May, and subsequently recovered in June. Energy was the only sector in negative territory following a 24%peak-to-trough decline in crude oil prices, and the retail sectors generally outperformed. European high yield continued its strong start to 2019 with higher-rated credits faring the best in the second quarter. However, lower-quality credits still outperformedyear-to-date (YTD). Gross high yield issuance totaled€20 billion in the second quarter, more than double the€9.4 billion that priced in the first quarter. Despite the jump in supply during the quarter, 2019 gross issuance was down more than 40% through the end of the period. |
• | In the first half of July 2019, the US high yield market was flat to slightly negative despite dovish commentary from the Fed. The lackluster performance was primarily driven by weakness in the energy sector. During the second half of July, as stock prices rose from expected Fed rate cuts and solid earnings, the market remained well bid until the end of the month when trade fears resurfaced and added to concerns regarding a weakening global economy. European high yield continued its strong YTD performance in July with a 0.78% return, taking total YTD returns to 8.52%. Dovish actions and rhetoric from the central banks and a lack of net new supply continued to support the market, despite ongoing concerns regarding decelerating global growth. |
• | The US high yield market got off to a negative start in August 2019, as increasedUS-China trade tensions, global growth concerns, an inverted yield curve, and a sell-off in equities weighed on the market. Notably, one of the largestsingle-day spread widening events in the last 10 years occurred on August 5. As the month progressed, a steady decline in rates coupled with renewed optimism regarding a trade resolution helped offset equity weakness and settled the market. In total, August saw over $4 billion of outflows from high yield funds. |
What worked?
• | The Fund benefited from very strong security selection, accounting for a large portion of the outperformance in the reporting period. This was mostly driven by positioning in the upstream energy, health care & pharmaceuticals, electric utility, and technology sectors. |
• | Overweights toWind Tre Spa (telecom) andCalpine Corp. (electric utilities), as well as underweights to upstream energy issuersEP Energy Corp. andWeatherford International plc, were among the largest single-name contributors. |
• | Overall, industry selection was a detractor from performance; however the Fund benefited from an overweight to building materials & home construction and electric utilities. An underweight to the technology sector also boosted returns. |
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What didn’t work?
• | Underweights to the banking and cable & satellite sectors hurt performance. An overweight to chemicals was also negative. |
• | Security selection within telecom and midstream energy were a drag on performance. The largest single-name detractors from returns included overweights toDigicel (telecom) andAlta Mesa Holdings LP (upstream energy). |
Did the Fund use derivatives and, if so, how did they affect performance?
• | The Fund utilized US Treasury futures to hedge interest rate risk relative to the Index to help immunize any impact from fluctuations in interest rates. |
• | The Fund also held positions in a credit default swap index (CDX) to hedge credit risk and help manage the overall beta of the portfolio. |
Current outlook
• | Looking ahead in US high yield, Moody’s expects the global default rate to reach 2.4% by the end of the second quarter of 2020. With current spreads adequately compensating for recession risk, strong credit fundamentals, and low default expectations, PGIM Fixed Income remains constructive on US high yield. The relatively better insulation of US high yield credits from the protracted trade war with China combined with the technical support provided by stimulative central bank policies—in an already supply-limited asset class—supports this favorable view. |
• | Key positioning themes include underweights to financials and the energy sector. The Fund is also underweight the health care & pharmaceutical and cable & satellite sectors. Overweights include electric utilities, building materials & home construction, and chemicals. |
PGIM Active High Yield Bond ETF | 11 |
As a shareholder of the Fund, you incur ongoing costs, including investment management fees. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.
The example is based on an investment of $1,000 held through the period ended August 31, 2019. The example is for illustrative purposes only.
Actual Expenses
The information under each column in the line entitled “Actual” on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information under each column in the line entitled “Hypothetical” on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, brokerage commissions paid on purchases and sales of Fund shares. Therefore, the ending account values and expenses paid for the period are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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PGIM Active High Yield Bond ETF | Beginning Account Value March 1, 2019 | Ending Account Value August 31, 2019 | Annualized Expense Ratio based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Actual Hypothetical | $ $ | 1,000.00 1,000.00 |
| $ $ | 1,058.40 1,022.53 |
| | 0.53 0.53 | % % | $ $ | 2.75 2.70 |
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* Fund expenses (net of fee waivers or subsidies, if any) are equal to the annualized expense ratio (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended August 31, 2019, and divided by the 365 days in the Fund’s fiscal year ended August 31, 2019 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
PGIM Active High Yield Bond ETF | 13 |
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
LONG-TERM INVESTMENTS 96.5% | ||||||||||||||||
ASSET-BACKED SECURITIES 5.3% | ||||||||||||||||
Collateralized Loan Obligations 5.3% |
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Adams Mill CLO Ltd. (Cayman Islands), Series2014-1A, Class A1R, 144A, 3 Month LIBOR + 1.100% | 3.403 | %(c) | 07/15/26 | 185 | $ | 185,152 | ||||||||||
JMP Credit Advisors CLO IV Ltd. (Cayman Islands), Series2017-1A, Class AR, 144A, 3 Month LIBOR + 1.280% | 3.467 | (c) | 07/17/29 | 250 | 250,670 | |||||||||||
Man GLG US CLO Ltd. (Cayman Islands), Series2018-2A, Class A1R, 144A, 3 Month LIBOR + 1.240% | 3.543 | (c) | 10/15/28 | 250 | 249,592 | |||||||||||
Ocean Trails CLO VI (Cayman Islands), Series2016-6A, Class AR, 144A, 3 Month LIBOR + 1.150% | 3.453 | (c) | 07/15/28 | 250 | 250,040 | |||||||||||
Wellfleet CLO Ltd. (Cayman Islands), Series 2015-1A, Class AR3, 144A, 3 Month LIBOR + 1.280% | 3.558 | (c) | 07/20/29 | 275 | 274,966 | |||||||||||
Zais CLO 8 Ltd. (Cayman Islands), Series2018-1A, Class A, 144A, 3 Month LIBOR + 0.950% | 3.253 | (c) | 04/15/29 | 250 | 247,907 | |||||||||||
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TOTAL ASSET-BACKED SECURITIES | 1,458,327 | |||||||||||||||
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BANK LOANS 3.4% | ||||||||||||||||
Casinos & Gaming 0.3% |
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Scientific Games International, Inc., Initial TermB-5 Loan, 1 Month LIBOR + 2.750% | 4.889 | 08/14/24 | 75 | 74,049 | ||||||||||||
Electric & Gas Marketing 0.4% | ||||||||||||||||
Heritage Power LLC , Term Loan, 1 Month LIBOR + 6.000% | 8.205 | 07/30/26 | 100 | 97,500 | ||||||||||||
Infrastructure Software 1.7% | ||||||||||||||||
McAfee LLC, | ||||||||||||||||
Initial Loan (Second Lien), 1 Month LIBOR + 8.500% | 10.616 | 09/29/25 | 219 | 220,755 | ||||||||||||
Term B USD Loan, 1 Month LIBOR + 3.750% | 5.866 | 09/30/24 | 245 | 244,779 | ||||||||||||
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465,534 | ||||||||||||||||
Oil & Gas 0.3% | ||||||||||||||||
CITGO Petroleum Corp., | ||||||||||||||||
2019 Incremental Term B Loan, 1 Month LIBOR + 5.000% | 7.319 | 03/28/24 | 75 | 75,938 | ||||||||||||
Term B Loan, 1 Month LIBOR + 4.500% | 6.819 | 07/29/21 | 25 | 24,823 | ||||||||||||
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100,761 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 15 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
BANK LOANS (Continued) | ||||||||||||||||
Specialty Chemicals 0.7% | ||||||||||||||||
Solenis Holdings LLC, | ||||||||||||||||
Initial Term Loan (Second Lien), 1 Month LIBOR + 8.500% | 10.624 | % | 06/26/26 | 100 | $ | 97,000 | ||||||||||
Initial Dollar Term Loan (First Lien), 1 Month LIBOR + 4.000% | 6.124 | 06/26/25 | 100 | 96,500 | ||||||||||||
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193,500 | ||||||||||||||||
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TOTAL BANK LOANS | 931,344 | |||||||||||||||
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CORPORATE BONDS 87.8% | ||||||||||||||||
Aerospace & Defense 2.6% | ||||||||||||||||
Bombardier, Inc. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 7.500 | 12/01/24 | 350 | 348,722 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.500 | 03/15/25 | 25 | 24,344 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.875 | 04/15/27 | 175 | 169,531 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 8.750 | 12/01/21 | 75 | 81,375 | ||||||||||||
TransDigm, Inc., Gtd. Notes | 6.500 | 05/15/25 | 100 | 104,250 | ||||||||||||
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728,222 | ||||||||||||||||
Agriculture 0.3% | ||||||||||||||||
Vector Group Ltd., Sr. Sec’d. Notes, 144A | 6.125 | 02/01/25 | 75 | 73,500 | ||||||||||||
Auto Manufacturers 1.6% | ||||||||||||||||
Allison Transmission, Inc., Sr. Unsec’d. Notes, 144A | 4.750 | 10/01/27 | 75 | 76,875 | ||||||||||||
Ford Motor Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750 | 01/15/43 | 75 | 67,665 | ||||||||||||
Sr. Unsec’d. Notes | 5.291 | 12/08/46 | 175 | 168,374 | ||||||||||||
Navistar International Corp., Gtd. Notes, 144A | 6.625 | 11/01/25 | 125 | 126,563 | ||||||||||||
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439,477 | ||||||||||||||||
Auto Parts & Equipment 2.1% | ||||||||||||||||
Adient Global Holdings Ltd. (Jersey, Channel Islands), Gtd. Notes, 144A | 4.875 | 08/15/26 | 200 | 154,500 | ||||||||||||
American Axle & Manufacturing, Inc., | ||||||||||||||||
Gtd. Notes | 6.250 | 04/01/25 | 25 | 23,499 | ||||||||||||
Gtd. Notes | 6.250 | 03/15/26 | 125 | 115,938 | ||||||||||||
Gtd. Notes | 6.500 | 04/01/27 | 75 | 68,812 | ||||||||||||
Cooper-Standard Automotive, Inc., Gtd. Notes, 144A | 5.625 | 11/15/26 | 100 | 85,750 | ||||||||||||
Dana Financing Luxembourg Sarl (Luxembourg), Gtd. Notes, 144A | 6.500 | 06/01/26 | 100 | 104,750 | ||||||||||||
Titan International, Inc., Sr. Sec’d. Notes | 6.500 | 11/30/23 | 50 | 39,875 | ||||||||||||
|
| |||||||||||||||
593,124 |
See Notes to Financial Statements.
16 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks 0.2% | ||||||||||||||||
CIT Group, Inc., Subordinated | 6.125 | % | 03/09/28 | 50 | $ | 59,813 | ||||||||||
Beverages 0.3% | ||||||||||||||||
Cott Holdings, Inc., Gtd. Notes, 144A | 5.500 | 04/01/25 | 75 | 78,190 | ||||||||||||
Building Materials 2.2% | ||||||||||||||||
Cornerstone Building Brands, Inc., Gtd. Notes, 144A | 8.000 | 04/15/26 | 100 | 94,750 | ||||||||||||
Griffon Corp., Gtd. Notes | 5.250 | 03/01/22 | 50 | 50,360 | ||||||||||||
Masonite International Corp. (Canada), | ||||||||||||||||
Gtd. Notes, 144A | 5.375 | 02/01/28 | 30 | 31,650 | ||||||||||||
Gtd. Notes, 144A | 5.750 | 09/15/26 | 50 | 52,938 | ||||||||||||
Standard Industries, Inc., Sr. Unsec’d. Notes, 144A | 4.750 | 01/15/28 | 125 | 125,625 | ||||||||||||
Summit Materials LLC/Summit Materials Finance Corp., | ||||||||||||||||
Gtd. Notes, 144A | 5.125 | 06/01/25 | 75 | 76,875 | ||||||||||||
Gtd. Notes, 144A | 6.500 | 03/15/27 | 20 | 21,500 | ||||||||||||
US Concrete, Inc., Gtd. Notes | 6.375 | 06/01/24 | 150 | 157,125 | ||||||||||||
|
| |||||||||||||||
610,823 | ||||||||||||||||
Chemicals 4.9% | ||||||||||||||||
Alpha 2 BV (Netherlands), Sr. Unsec’d. Notes, Cash coupon 8.750% or PIK 9.500%, 144A | 8.750 | 06/01/23 | 200 | 193,250 | ||||||||||||
Ashland LLC, Gtd. Notes | 6.875 | 05/15/43 | 75 | 83,250 | ||||||||||||
Chemours Co. (The), | ||||||||||||||||
Gtd. Notes | 5.375 | 05/15/27 | 50 | 44,375 | ||||||||||||
Gtd. Notes | 6.625 | 05/15/23 | 50 | 50,875 | ||||||||||||
Gtd. Notes | 7.000 | 05/15/25 | 100 | 98,750 | ||||||||||||
Cornerstone Chemical Co., Sr. Sec’d. Notes, 144A | 6.750 | 08/15/24 | 50 | 46,000 | ||||||||||||
Hexion, Inc., Gtd. Notes, 144A | 7.875 | 07/15/27 | 65 | 62,887 | ||||||||||||
NOVA Chemicals Corp. (Canada), Sr. Unsec’d. Notes, 144A | 5.250 | 06/01/27 | 165 | 172,219 | ||||||||||||
Rain CII Carbon LLC/CII Carbon Corp., Sec’d. Notes, 144A | 7.250 | 04/01/25 | 125 | 117,500 | ||||||||||||
Starfruit Finco BV/Starfruit US Holdco LLC (Netherlands), Sr. Unsec’d. Notes, 144A | 8.000 | 10/01/26 | 300 | 292,500 | ||||||||||||
TPC Group, Inc., Sr. Sec’d. Notes, 144A | 10.500 | 08/01/24 | 25 | 26,250 | ||||||||||||
Tronox Finance PLC (United Kingdom), Gtd. Notes, 144A | 5.750 | 10/01/25 | 45 | 41,738 | ||||||||||||
Tronox, Inc., Gtd. Notes, 144A | 6.500 | 04/15/26 | 75 | 71,250 | ||||||||||||
Venator Finance Sarl/Venator Materials LLC, Gtd. Notes, 144A(a) | 5.750 | 07/15/25 | 60 | 50,106 | ||||||||||||
|
| |||||||||||||||
1,350,950 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 17 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Coal 0.1% | ||||||||||||||||
Warrior Met Coal, Inc., Sr. Sec’d. Notes, 144A | 8.000 | % | 11/01/24 | 25 | $ | 26,094 | ||||||||||
Commercial Services 4.3% | ||||||||||||||||
Laureate Education, Inc., Gtd. Notes, 144A | 8.250 | 05/01/25 | 135 | 146,981 | ||||||||||||
Refinitiv US Holdings, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 8.250 | 11/15/26 | 310 | 348,750 | ||||||||||||
Sr. Sec’d. Notes, 144A | 6.250 | 05/15/26 | 80 | 87,100 | ||||||||||||
United Rentals North America, Inc., | ||||||||||||||||
Gtd. Notes | 4.875 | 01/15/28 | 400 | 419,500 | ||||||||||||
Gtd. Notes | 5.250 | 01/15/30 | 150 | 160,312 | ||||||||||||
Verscend Escrow Corp., Sr. Unsec’d. Notes, 144A | 9.750 | 08/15/26 | 25 | 26,765 | ||||||||||||
|
| |||||||||||||||
1,189,408 | ||||||||||||||||
Computers 1.7% | ||||||||||||||||
Banff Merger Sub, Inc., Sr. Unsec’d. Notes, 144A | 9.750 | 09/01/26 | 328 | 298,480 | ||||||||||||
Everi Payments, Inc., Gtd. Notes, 144A | 7.500 | 12/15/25 | 75 | 78,750 | ||||||||||||
MTS Systems Corp., Gtd. Notes, 144A | 5.750 | 08/15/27 | 10 | 10,450 | ||||||||||||
NCR Corp., Gtd. Notes, 144A | 5.750 | 09/01/27 | 25 | 26,401 | ||||||||||||
Tempo Acquisition LLC/Tempo Acquisition Finance Corp., Sr. Unsec’d. Notes, 144A | 6.750 | 06/01/25 | 50 | 51,365 | ||||||||||||
|
| |||||||||||||||
465,446 | ||||||||||||||||
Distribution/Wholesale 0.2% | ||||||||||||||||
H&E Equipment Services, Inc., Gtd. Notes | 5.625 | 09/01/25 | 50 | 52,375 | ||||||||||||
Diversified Financial Services 3.8% | ||||||||||||||||
Allied Universal Holdco LLC/Allied Universal Finance Corp., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 6.625 | 07/15/26 | 25 | 26,562 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 9.750 | 07/15/27 | 100 | 104,750 | ||||||||||||
Fairstone Financial, Inc. (Canada), Sr. Unsec’d. Notes, 144A | 7.875 | 07/15/24 | 30 | 31,275 | ||||||||||||
LPL Holdings, Inc., Gtd. Notes, 144A | 5.750 | 09/15/25 | 100 | 105,250 | ||||||||||||
Nationstar Mortgage Holdings, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 8.125 | 07/15/23 | 25 | 25,890 | ||||||||||||
Gtd. Notes, 144A | 9.125 | 07/15/26 | 225 | 237,938 | ||||||||||||
Navient Corp., Sr. Unsec’d. Notes | 7.250 | 09/25/23 | 75 | 83,250 | ||||||||||||
Springleaf Finance Corp., | ||||||||||||||||
Gtd. Notes | 6.625 | 01/15/28 | 25 | 27,437 | ||||||||||||
Gtd. Notes | 6.875 | 03/15/25 | 75 | 85,031 | ||||||||||||
Gtd. Notes | 7.125 | 03/15/26 | 250 | 285,125 |
See Notes to Financial Statements.
18 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Diversified Financial Services (cont’d.) | ||||||||||||||||
VFH Parent LLC/Orchestra Co.-Issuer, Inc., Sec’d. Notes, 144A | 6.750 | % | 06/15/22 | 25 | $ | 25,813 | ||||||||||
|
| |||||||||||||||
1,038,321 | ||||||||||||||||
Electric 3.4% | ||||||||||||||||
Calpine Corp., Sr. Unsec’d. Notes | 5.750 | 01/15/25 | 500 | 507,500 | ||||||||||||
NRG Energy, Inc., Gtd. Notes | 5.750 | 01/15/28 | 75 | 80,813 | ||||||||||||
Vistra Operations Co. LLC, | ||||||||||||||||
Gtd. Notes, 144A | 5.000 | 07/31/27 | 90 | 92,925 | ||||||||||||
Gtd. Notes, 144A | 5.500 | 09/01/26 | 75 | 78,750 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.625 | 02/15/27 | 175 | 185,281 | ||||||||||||
|
| |||||||||||||||
945,269 | ||||||||||||||||
Electronics 0.1% | ||||||||||||||||
Sensata Technologies BV (Netherlands), Gtd. Notes, 144A | 5.000 | 10/01/25 | 25 | 26,500 | ||||||||||||
Engineering & Construction 0.7% | ||||||||||||||||
AECOM, Gtd. Notes | 5.125 | 03/15/27 | 125 | 130,565 | ||||||||||||
TopBuild Corp., Gtd. Notes, 144A | 5.625 | 05/01/26 | 75 | 78,187 | ||||||||||||
|
| |||||||||||||||
208,752 | ||||||||||||||||
Entertainment 3.0% | ||||||||||||||||
AMC Entertainment Holdings, Inc., | ||||||||||||||||
Gtd. Notes | 5.875 | 11/15/26 | 150 | 137,250 | ||||||||||||
Gtd. Notes | 6.125 | 05/15/27 | 25 | 23,062 | ||||||||||||
Caesars Resort Collection LLC/CRC Finco, Inc., Gtd. Notes, 144A | 5.250 | 10/15/25 | 175 | 178,062 | ||||||||||||
Golden Entertainment, Inc., Sr. Unsec’d. Notes, 144A | 7.625 | 04/15/26 | 25 | 26,003 | ||||||||||||
Jacobs Entertainment, Inc., Sec’d. Notes, 144A | 7.875 | 02/01/24 | 75 | 79,688 | ||||||||||||
National Cinemedia LLC, Sr. Unsec’d. Notes, | 5.750 | 08/15/26 | 50 | 48,375 | ||||||||||||
Penn National Gaming, Inc., Sr. Unsec’d. Notes, 144A | 5.625 | 01/15/27 | 75 | 76,976 | ||||||||||||
Scientific Games International, Inc., | ||||||||||||||||
Gtd. Notes | 6.625 | 05/15/21 | 125 | 127,031 | ||||||||||||
Gtd. Notes, 144A | 8.250 | 03/15/26 | 100 | 106,000 | ||||||||||||
Twin River Worldwide Holdings, Inc., Sr. Unsec’d. Notes, 144A | 6.750 | 06/01/27 | 25 | 26,344 | ||||||||||||
|
| |||||||||||||||
828,791 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 19 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Food 2.9% | ||||||||||||||||
B&G Foods, Inc., Gtd. Notes | 5.250 | % | 04/01/25 | 75 | $ | 76,054 | ||||||||||
JBS USA LUX SA/JBS USA Finance, Inc., Gtd. Notes, 144A | 5.750 | 06/15/25 | 250 | 260,002 | ||||||||||||
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 6.500 | 04/15/29 | 5 | 5,537 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.500 | 01/15/30 | 25 | 26,500 | ||||||||||||
Pilgrim’s Pride Corp., Gtd. Notes, 144A | 5.875 | 09/30/27 | 175 | 188,563 | ||||||||||||
Post Holdings, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 5.000 | 08/15/26 | 50 | 52,125 | ||||||||||||
Gtd. Notes, 144A | 5.500 | 12/15/29 | 25 | 26,430 | ||||||||||||
Gtd. Notes, 144A | 5.625 | 01/15/28 | 150 | 159,750 | ||||||||||||
|
| |||||||||||||||
794,961 | ||||||||||||||||
Gas 1.0% | ||||||||||||||||
AmeriGas Partners LP/AmeriGas Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.500 | 05/20/25 | 125 | 132,187 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 05/20/27 | 75 | 79,358 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 08/20/26 | 50 | 54,297 | ||||||||||||
|
| |||||||||||||||
265,842 | ||||||||||||||||
Healthcare-Services 5.1% | ||||||||||||||||
CHS/Community Health Systems, Inc., Sr. Sec’d. Notes | 6.250 | 03/31/23 | 100 | 96,760 | ||||||||||||
DaVita, Inc., Gtd. Notes | 5.000 | 05/01/25 | 25 | 25,031 | ||||||||||||
Hadrian Merger Sub, Inc., Sr. Unsec’d. Notes, 144A | 8.500 | 05/01/26 | 75 | 71,812 | ||||||||||||
HCA, Inc., Gtd. Notes | 5.375 | 09/01/26 | 200 | 223,000 | ||||||||||||
MEDNAX, Inc., Gtd. Notes, 144A | 6.250 | 01/15/27 | 225 | 220,500 | ||||||||||||
Polaris Intermediate Corp., Sr. Unsec’d. Notes, 144A | 8.500 | 12/01/22 | 60 | 50,400 | ||||||||||||
RegionalCare Hospital Partners Holdings, Inc./LifePoint Health, Inc., Gtd. Notes, 144A | 9.750 | 12/01/26 | 225 | 240,469 | ||||||||||||
Surgery Center Holdings, Inc., Gtd. Notes, 144A | 10.000 | 04/15/27 | 75 | 71,813 | ||||||||||||
Tenet Healthcare Corp., | ||||||||||||||||
Sec’d. Notes, 144A | 6.250 | 02/01/27 | 75 | 77,813 | ||||||||||||
Sr. Unsec’d. Notes | 6.750 | 06/15/23 | 100 | 102,750 | ||||||||||||
Sr. Unsec’d. Notes | 7.000 | 08/01/25 | 150 | 151,500 | ||||||||||||
Sr. Unsec’d. Notes | 8.125 | 04/01/22 | 75 | 80,805 | ||||||||||||
|
| |||||||||||||||
1,412,653 | ||||||||||||||||
Home Builders 4.8% | ||||||||||||||||
Ashton Woods USA LLC/Ashton Woods Finance Co., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 08/01/25 | 100 | 99,000 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 9.875 | 04/01/27 | 75 | 81,750 |
See Notes to Financial Statements.
20 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Home Builders (cont’d.) | ||||||||||||||||
Beazer Homes USA, Inc., | ||||||||||||||||
Gtd. Notes | 5.875 | % | 10/15/27 | 25 | $ | 23,687 | ||||||||||
Gtd. Notes | 6.750 | 03/15/25 | 75 | 75,562 | ||||||||||||
Brookfield Residential Properties, Inc. (Canada), Gtd. Notes, 144A | 6.375 | 05/15/25 | 50 | 50,750 | ||||||||||||
Brookfield Residential Properties, Inc./Brookfield Residential US Corp. (Canada), Gtd. Notes, 144A | 6.125 | 07/01/22 | 25 | 25,344 | ||||||||||||
Century Communities, Inc., Sr. Unsec’d. Notes, 144A | 6.750 | 06/01/27 | 75 | 79,500 | ||||||||||||
Forestar Group, Inc., Gtd. Notes, 144A | 8.000 | 04/15/24 | 25 | 26,844 | ||||||||||||
KB Home, Gtd. Notes | 7.000 | 12/15/21 | 25 | 27,116 | ||||||||||||
M/I Homes, Inc., Gtd. Notes | 5.625 | 08/01/25 | 50 | 51,750 | ||||||||||||
Mattamy Group Corp. (Canada), Sr. Unsec’d. Notes, 144A | 6.500 | 10/01/25 | 125 | 132,500 | ||||||||||||
Meritage Homes Corp., Gtd. Notes | 5.125 | 06/06/27 | 125 | 131,563 | ||||||||||||
New Home Co., Inc. (The), Gtd. Notes | 7.250 | 04/01/22 | 75 | 71,250 | ||||||||||||
PulteGroup, Inc., Gtd. Notes | 5.000 | 01/15/27 | 50 | 53,750 | ||||||||||||
Taylor Morrison Communities, Inc., Gtd. Notes, 144A | 5.875 | 06/15/27 | 50 | 53,625 | ||||||||||||
Taylor Morrison Communities, Inc./Taylor Morrison Holdings II, Inc., Gtd. Notes, 144A | 5.625 | 03/01/24 | 100 | 105,000 | ||||||||||||
William Lyon Homes, Inc., | ||||||||||||||||
Gtd. Notes | 5.875 | 01/31/25 | 175 | 176,750 | ||||||||||||
Gtd. Notes, 144A | 6.625 | 07/15/27 | 75 | 75,000 | ||||||||||||
|
| |||||||||||||||
1,340,741 | ||||||||||||||||
Household Products/Wares 0.1% | ||||||||||||||||
Spectrum Brands, Inc., Gtd. Notes | 5.750 | 07/15/25 | 25 | 26,000 | ||||||||||||
Housewares 0.2% | ||||||||||||||||
ScottsMiracle-Gro Co. (The), Gtd. Notes | 5.250 | 12/15/26 | 50 | 51,875 | ||||||||||||
Internet 0.9% | ||||||||||||||||
Zayo Group LLC/Zayo Capital, Inc., | ||||||||||||||||
Gtd. Notes | 6.375 | 05/15/25 | 125 | 128,594 | ||||||||||||
Gtd. Notes, 144A | 5.750 | 01/15/27 | 120 | 122,400 | ||||||||||||
|
| |||||||||||||||
250,994 | ||||||||||||||||
Iron/Steel 0.5% | ||||||||||||||||
Cleveland-Cliffs, Inc., | ||||||||||||||||
Gtd. Notes | 5.750 | 03/01/25 | 29 | 29,073 | ||||||||||||
Gtd. Notes, 144A | 5.875 | 06/01/27 | 125 | 121,875 | ||||||||||||
|
| |||||||||||||||
150,948 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 21 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Machinery-Diversified 0.5% | ||||||||||||||||
ATS Automation Tooling Systems, Inc. (Canada), Gtd. Notes, 144A | 6.500 | % | 06/15/23 | 25 | $ | 25,844 | ||||||||||
Cloud Crane LLC, Sec’d. Notes, 144A | 10.125 | 08/01/24 | 100 | 107,500 | ||||||||||||
|
| |||||||||||||||
133,344 | ||||||||||||||||
Media 7.1% | ||||||||||||||||
AMC Networks, Inc., Gtd. Notes | 4.750 | 08/01/25 | 40 | 40,850 | ||||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.000 | 02/01/28 | 230 | 241,500 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.375 | 06/01/29 | 175 | 187,031 | ||||||||||||
Clear Channel Worldwide Holdings, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 9.250 | 02/15/24 | 259 | 283,929 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.125 | 08/15/27 | 50 | 52,312 | ||||||||||||
Cumulus Media New Holdings, Inc., Sr. Sec’d. Notes, 144A | 6.750 | 07/01/26 | 25 | 25,750 | ||||||||||||
Diamond Sports Group LLC/Diamond Sports Finance Co., | ||||||||||||||||
Gtd. Notes, 144A | 6.625 | 08/15/27 | 50 | 52,375 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.375 | 08/15/26 | 75 | 78,750 | ||||||||||||
DISH DBS Corp., Gtd. Notes | 7.750 | 07/01/26 | 410 | 402,825 | ||||||||||||
Entercom Media Corp., Sec’d. Notes, 144A | 6.500 | 05/01/27 | 20 | 20,700 | ||||||||||||
Gray Television, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 5.875 | 07/15/26 | 65 | 67,925 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.000 | 05/15/27 | 75 | 82,009 | ||||||||||||
Midcontinent Communications/Midcontinent Finance Corp., Gtd. Notes, 144A | 5.375 | 08/15/27 | 25 | 25,951 | ||||||||||||
Nexstar Broadcasting, Inc., Gtd. Notes, 144A | 5.625 | 08/01/24 | 110 | 114,400 | ||||||||||||
Radiate Holdco LLC/Radiate Finance, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 6.625 | 02/15/25 | 60 | 59,550 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.875 | 02/15/23 | 100 | 102,000 | ||||||||||||
Scripps Escrow, Inc., Sr. Unsec’d. Notes, 144A | 5.875 | 07/15/27 | 20 | 20,175 | ||||||||||||
Univision Communications, Inc., Sr. Sec’d. Notes, 144A | 5.125 | 02/15/25 | 100 | 96,489 | ||||||||||||
|
| |||||||||||||||
1,954,521 | ||||||||||||||||
Mining 3.2% | ||||||||||||||||
Constellium SE (Netherlands), Gtd. Notes, 144A | 5.875 | 02/15/26 | 250 | 260,625 | ||||||||||||
Eldorado Gold Corp. (Canada), Sec’d. Notes, 144A | 9.500 | 06/01/24 | 75 | 80,625 | ||||||||||||
First Quantum Minerals Ltd. (Canada), | ||||||||||||||||
Gtd. Notes, 144A | 6.875 | 03/01/26 | 200 | 177,750 | ||||||||||||
Gtd. Notes, 144A | 7.000 | 02/15/21 | 40 | 40,000 |
See Notes to Financial Statements.
22 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Mining (cont’d.) | ||||||||||||||||
Freeport-McMoRan, Inc., | ||||||||||||||||
Gtd. Notes | 3.875 | % | 03/15/23 | 75 | $ | 75,780 | ||||||||||
Gtd. Notes | 4.550 | 11/14/24 | 30 | 30,294 | ||||||||||||
IAMGOLD Corp. (Canada), Gtd. Notes, 144A | 7.000 | 04/15/25 | 85 | 88,613 | ||||||||||||
Novelis Corp., Gtd. Notes, 144A | 5.875 | 09/30/26 | 125 | 132,031 | ||||||||||||
|
| |||||||||||||||
885,718 | ||||||||||||||||
Miscellaneous Manufacturers 0.2% | ||||||||||||||||
Amsted Industries, Inc., Gtd. Notes, 144A | 5.625 | 07/01/27 | 25 | 26,687 | ||||||||||||
FXI Holdings, Inc., Sr. Sec’d. Notes, 144A | 7.875 | 11/01/24 | 25 | 22,188 | ||||||||||||
|
| |||||||||||||||
48,875 | ||||||||||||||||
Oil & Gas 8.2% | ||||||||||||||||
Alta Mesa Holdings LP/Alta Mesa Finance Services Corp., Gtd. Notes | 7.875 | 12/15/24 | 260 | 46,800 | ||||||||||||
Antero Resources Corp., | ||||||||||||||||
Gtd. Notes(a) | 5.000 | 03/01/25 | 125 | 108,125 | ||||||||||||
Gtd. Notes | 5.625 | 06/01/23 | 50 | 46,125 | ||||||||||||
Ascent Resources Utica Holdings LLC/ARU Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 7.000 | 11/01/26 | 75 | 61,946 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 10.000 | 04/01/22 | 175 | 175,437 | ||||||||||||
Centennial Resource Production LLC, Gtd. Notes, 144A | 5.375 | 01/15/26 | 25 | 23,812 | ||||||||||||
Chesapeake Energy Corp., Gtd. Notes | 8.000 | 06/15/27 | 275 | 198,690 | ||||||||||||
Citgo Holding, Inc., Sr. Sec’d. Notes, 144A | 9.250 | 08/01/24 | 75 | 79,312 | ||||||||||||
CNX Resources Corp., | ||||||||||||||||
Gtd. Notes | 5.875 | 04/15/22 | 33 | 31,927 | ||||||||||||
Gtd. Notes, 144A | 7.250 | 03/14/27 | 100 | 83,750 | ||||||||||||
CrownRock LP/CrownRock Finance, Inc., Sr. Unsec’d. Notes, 144A | 5.625 | 10/15/25 | 25 | 24,750 | ||||||||||||
Diamond Offshore Drilling, Inc., Sr. Unsec’d. Notes | 7.875 | 08/15/25 | 25 | 23,008 | ||||||||||||
Endeavor Energy Resources LP/EER Finance, Inc., Sr. Unsec’d. Notes, 144A | 5.750 | 01/30/28 | 50 | 52,375 | ||||||||||||
Extraction Oil & Gas, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 5.625 | 02/01/26 | 175 | 115,500 | ||||||||||||
Gtd. Notes, 144A | 7.375 | 05/15/24 | 50 | 37,500 | ||||||||||||
Hilcorp Energy I LP/Hilcorp Finance Co., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.750 | 10/01/25 | 100 | 93,250 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.250 | 11/01/28 | 25 | 23,000 | ||||||||||||
MEG Energy Corp. (Canada), | ||||||||||||||||
Gtd. Notes, 144A | 6.375 | 01/30/23 | 175 | 165,375 | ||||||||||||
Gtd. Notes, 144A | 7.000 | 03/31/24 | 50 | 47,563 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 23 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | �� | Value | |||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Oil & Gas (cont’d.) | ||||||||||||||||
Nabors Industries, Inc., Gtd. Notes | 5.750 | % | 02/01/25 | 150 | $ | 120,000 | ||||||||||
Precision Drilling Corp. (Canada), Gtd. Notes, 144A | 7.125 | 01/15/26 | 75 | 66,938 | ||||||||||||
Range Resources Corp., | ||||||||||||||||
Gtd. Notes | 4.875 | 05/15/25 | 50 | 41,000 | ||||||||||||
Gtd. Notes | 5.000 | 03/15/23 | 150 | 132,750 | ||||||||||||
Seven Generations Energy Ltd. (Canada), Gtd. Notes, 144A | 5.375 | 09/30/25 | 25 | 23,938 | ||||||||||||
Sunoco LP/Sunoco Finance Corp., Gtd. Notes | 5.500 | 02/15/26 | 50 | 51,875 | ||||||||||||
Transocean Pontus Ltd. (Cayman Islands), Sr. Sec’d. Notes, 144A | 6.125 | 08/01/25 | 45 | 45,119 | ||||||||||||
Transocean, Inc. (Cayman Islands), | ||||||||||||||||
Gtd. Notes, 144A | 7.250 | 11/01/25 | 85 | 77,350 | ||||||||||||
Gtd. Notes, 144A | 7.500 | 01/15/26 | 50 | 45,625 | ||||||||||||
Valaris PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 10/01/44 | 25 | 12,500 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 02/01/26 | 125 | 79,350 | ||||||||||||
WPX Energy, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.250 | 09/15/24 | 75 | 76,125 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 06/01/26 | 50 | 51,875 | ||||||||||||
|
| |||||||||||||||
2,262,690 | ||||||||||||||||
Packaging & Containers 1.7% | ||||||||||||||||
ARD Finance SA (Luxembourg), Sr. Sec’d. Notes, Cash coupon 7.125% or PIK 7.875%, | 7.125 | 09/15/23 | 400 | 410,500 | ||||||||||||
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Lu, Gtd. Notes, 144A | 7.000 | 07/15/24 | 50 | 51,687 | ||||||||||||
|
| |||||||||||||||
462,187 | ||||||||||||||||
Pharmaceuticals 2.3% | ||||||||||||||||
Bausch Health Americas, Inc., Gtd. Notes, 144A | 8.500 | 01/31/27 | 65 | 72,149 | ||||||||||||
Bausch Health Cos., Inc. (Canada), | ||||||||||||||||
Gtd. Notes, 144A | 6.125 | 04/15/25 | 350 | 360,500 | ||||||||||||
Gtd. Notes, 144A | 7.000 | 01/15/28 | 50 | 52,397 | ||||||||||||
Gtd. Notes, 144A | 7.250 | 05/30/29 | 40 | 42,300 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.750 | 08/15/27 | 25 | 26,812 | ||||||||||||
Mallinckrodt International Finance SA/Mallinckrodt CB LLC (Luxembourg), Gtd. Notes, 144A | 5.500 | 04/15/25 | 75 | 34,359 | ||||||||||||
NVA Holdings, Inc., Gtd. Notes, 144A | 6.875 | 04/01/26 | 50 | 53,390 | ||||||||||||
|
| |||||||||||||||
641,907 |
See Notes to Financial Statements.
24 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Pipelines 2.1% | ||||||||||||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp., | ||||||||||||||||
Gtd. Notes | 5.375 | % | 09/15/24 | 25 | $ | 23,562 | ||||||||||
Gtd. Notes, 144A | 5.750 | 01/15/28 | 100 | 90,750 | ||||||||||||
CNX Midstream Partners LP/CNX Midstream Finance Corp., Sr. Unsec’d. Notes, 144A | 6.500 | 03/15/26 | 25 | 23,388 | ||||||||||||
DCP Midstream Operating LP, Gtd. Notes | 5.125 | 05/15/29 | 25 | 25,626 | ||||||||||||
Global Partners LP/GLP Finance Corp., | ||||||||||||||||
Gtd. Notes | 7.000 | 06/15/23 | 25 | 25,250 | ||||||||||||
Gtd. Notes, 144A | 7.000 | 08/01/27 | 50 | 50,625 | ||||||||||||
NGPL PipeCo LLC, Sr. Unsec’d. Notes, 144A | 7.768 | 12/15/37 | 50 | 65,189 | ||||||||||||
Rockies Express Pipeline LLC, Sr. Unsec’d. Notes, 144A | 7.500 | 07/15/38 | 100 | 113,125 | ||||||||||||
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp., Gtd. Notes, 144A | 5.500 | 01/15/28 | 125 | 117,656 | ||||||||||||
Targa Resources Partners LP/Targa Resources Partners Finance Corp., Gtd. Notes | 5.875 | 04/15/26 | 50 | 52,375 | ||||||||||||
|
| |||||||||||||||
587,546 | ||||||||||||||||
Real Estate 1.1% | ||||||||||||||||
Five Point Operating Co. LP/Five Point Capital Corp., Gtd. Notes, 144A | 7.875 | 11/15/25 | 100 | 100,312 | ||||||||||||
Greystar Real Estate Partners LLC, Sr. Sec’d. Notes, 144A | 5.750 | 12/01/25 | 100 | 102,535 | ||||||||||||
Howard Hughes Corp. (The), Sr. Unsec’d. Notes, 144A | 5.375 | 03/15/25 | 25 | 25,750 | ||||||||||||
Hunt Cos., Inc., Sr. Sec’d. Notes, 144A | 6.250 | 02/15/26 | 75 | 72,938 | ||||||||||||
|
| |||||||||||||||
301,535 | ||||||||||||||||
Real Estate Investment Trusts (REITs) 0.5% | ||||||||||||||||
GLP Capital LP/GLP Financing II, Inc., Gtd. Notes | 5.375 | 04/15/26 | 50 | 54,883 | ||||||||||||
MGM Growth Properties Operating Partnership LP/MGP Finance Co.-Issuer, Inc., Gtd. Notes | 4.500 | 01/15/28 | 75 | 76,688 | ||||||||||||
|
| |||||||||||||||
131,571 | ||||||||||||||||
Retail 4.8% | ||||||||||||||||
Brinker International, Inc., Gtd. Notes, 144A | 5.000 | 10/01/24 | 75 | 77,250 | ||||||||||||
CEC Entertainment, Inc., Gtd. Notes | 8.000 | 02/15/22 | 75 | 71,250 | ||||||||||||
Ferrellgas LP/Ferrellgas Finance Corp., | ||||||||||||||||
Gtd. Notes | 6.750 | 06/15/23 | 100 | 84,000 | ||||||||||||
Sr. Unsec’d. Notes | 6.500 | 05/01/21 | 50 | 42,500 |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 25 |
Schedule of Investments(continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Retail (cont’d.) | ||||||||||||||||
Ferrellgas Partners LP/Ferrellgas Partners Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 8.625 | % | 06/15/20 | 150 | $ | 112,005 | ||||||||||
Sr. Unsec’d. Notes | 8.625 | 06/15/20 | 25 | 18,668 | ||||||||||||
Golden Nugget, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 8.750 | 10/01/25 | 75 | 78,656 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 10/15/24 | 100 | 102,250 | ||||||||||||
L Brands, Inc., | ||||||||||||||||
Gtd. Notes | 5.625 | 10/15/23 | 50 | 52,500 | ||||||||||||
Gtd. Notes | 6.875 | 11/01/35 | 125 | 105,625 | ||||||||||||
Michaels Stores, Inc., Gtd. Notes, 144A | 8.000 | 07/15/27 | 75 | 71,829 | ||||||||||||
PetSmart, Inc., Sr. Sec’d. Notes, 144A | 5.875 | 06/01/25 | 167 | 163,660 | ||||||||||||
Rite Aid Corp., Gtd. Notes, 144A | 6.125 | 04/01/23 | 150 | 121,125 | ||||||||||||
Sally Holdings LLC/Sally Capital, Inc., Gtd. Notes | 5.625 | 12/01/25 | 150 | 150,375 | ||||||||||||
Suburban Propane Partners LP/Suburban Energy Finance Corp., Sr. Unsec’d. Notes | 5.500 | 06/01/24 | 75 | 76,125 | ||||||||||||
|
| |||||||||||||||
1,327,818 | ||||||||||||||||
Software 1.4% | ||||||||||||||||
Infor US, Inc., Gtd. Notes | 6.500 | 05/15/22 | 250 | 254,062 | ||||||||||||
Informatica LLC, Sr. Unsec’d. Notes, 144A | 7.125 | 07/15/23 | 50 | 50,875 | ||||||||||||
RP Crown Parent LLC, Gtd. Notes, 144A | 7.375 | 10/15/24 | 60 | 62,533 | ||||||||||||
TIBCO Software, Inc., Sr. Unsec’d. Notes, 144A | 11.375 | 12/01/21 | 25 | 26,250 | ||||||||||||
|
| |||||||||||||||
393,720 | ||||||||||||||||
Telecommunications 6.9% | ||||||||||||||||
CenturyLink, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 7.600 | 09/15/39 | 50 | 48,000 | ||||||||||||
Sr. Unsec’d. Notes | 7.650 | 03/15/42 | 50 | 47,750 | ||||||||||||
CommScope Technologies LLC, Gtd. Notes, 144A | 6.000 | 06/15/25 | 240 | 214,200 | ||||||||||||
CommScope, Inc., Gtd. Notes, 144A | 8.250 | 03/01/27 | 50 | 49,000 | ||||||||||||
Digicel Group One Ltd. (Bermuda), Sr. Sec’d. Notes, 144A | 8.250 | 12/30/22 | 100 | 56,000 | ||||||||||||
Digicel Ltd. (Bermuda), Gtd. Notes, 144A | 6.750 | 03/01/23 | 400 | 169,000 | ||||||||||||
Embarq Corp., Sr. Unsec’d. Notes | 7.995 | 06/01/36 | 130 | 127,447 | ||||||||||||
Intelsat Jackson Holdings SA (Luxembourg), Gtd. Notes, 144A | 9.750 | 07/15/25 | 155 | 159,069 | ||||||||||||
ORBCOMM, Inc., Sr. Sec’d. Notes, 144A | 8.000 | 04/01/24 | 125 | 129,062 | ||||||||||||
Sprint Capital Corp., Gtd. Notes | 8.750 | 03/15/32 | 270 | 338,170 | ||||||||||||
Sprint Corp., Gtd. Notes | 7.625 | 02/15/25 | 170 | 190,187 | ||||||||||||
West Corp., Gtd. Notes, 144A | 8.500 | 10/15/25 | 255 | 197,625 |
See Notes to Financial Statements.
26 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Telecommunications (cont’d.) | ||||||||||||||||
Xplornet Communications, Inc. (Canada), Gtd. Notes, Cash coupon 9.625% or PIK 10.625%, 144A | 9.625 | % | 06/01/22 | 193 | $ | 191,253 | ||||||||||
|
| |||||||||||||||
1,916,763 | ||||||||||||||||
Transportation 0.8% | ||||||||||||||||
XPO Logistics, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 6.125 | 09/01/23 | 50 | 51,700 | ||||||||||||
Gtd. Notes, 144A | 6.750 | 08/15/24 | 150 | 161,625 | ||||||||||||
213,325 | ||||||||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS | 24,270,589 | |||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 26,660,260 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 1.4% | ||||||||||||||||
AFFILIATED MUTUAL FUNDS 1.4% | ||||||||||||||||
PGIM Core Ultra Short Bond Fund(w) | 247,839 | 247,839 | ||||||||||||||
PGIM Institutional Money Market Fund (cost $149,098; includes $148,785 of cash collateral for securities on loan)(b)(w) | 149,063 | 149,077 | ||||||||||||||
|
| |||||||||||||||
TOTAL AFFILIATED MUTUAL FUNDS | 396,916 | |||||||||||||||
|
| |||||||||||||||
Principal Amount (000)# | ||||||||||||||||
TIME DEPOSIT 0.0% | ||||||||||||||||
Brown Brothers Harriman & Co. | 1.490 | 09/03/19 | — | (r) | 171 | |||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 397,087 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 97.9% | 27,057,347 | |||||||||||||||
Other assets in excess of liabilities 2.1% | 591,621 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 27,648,968 | ||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 27 |
Schedule of Investments(continued)
as of August 31, 2019
The following abbreviations are used in the annual report:
(Q)—Quarterly payment frequency for swaps
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers.
CLO—Collateralized Loan Obligation
CDX—Credit Derivative Index
LIBOR—London Interbank Offered Rate
PIK—Payment-in-Kind
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $142,829; cash collateral of $148,785 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at August 31, 2019. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
(r) | Principal or notional amount is less than $500 par. |
Futures contracts outstanding at August 31, 2019:
Number of contracts | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | ||||||||||||
Long Positions: | ||||||||||||||||
3 | 2 Year U.S. Treasury Notes | Dec. 2019 | $ | 648,352 | $ | 478 | ||||||||||
4 | 5 Year U.S. Treasury Notes | Dec. 2019 | 479,906 | 492 | ||||||||||||
17 | 10 Year U.S. Ultra Treasury Notes | Dec. 2019 | 2,239,219 | 6,897 | ||||||||||||
|
| |||||||||||||||
7,867 | ||||||||||||||||
|
| |||||||||||||||
Short Positions: | ||||||||||||||||
2 | 20 Year U.S. Treasury Bonds | Dec. 2019 | 330,500 | (1,437 | ) | |||||||||||
1 | 30 Year U.S. Ultra Treasury Bonds | Dec. 2019 | 197,438 | 445 | ||||||||||||
|
| |||||||||||||||
(992 | ) | |||||||||||||||
|
| |||||||||||||||
$ | 6,875 | |||||||||||||||
|
|
Credit default swap agreements outstanding at August 31, 2019:
Reference Entity/ Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Value at Trade Date | Value at August 31, 2019 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally Cleared Credit Default Swap Agreement on credit indices—Buy Protection(1): |
| |||||||||||||||||||||||
CDX.NA.HY.32-V2 | 06/20/24 | 5.000%(Q) | 1,238 | $ | (88,986 | ) | $ | (94,741 | ) | $ | (5,755 | ) | ||||||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
28 |
The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases.
(1) | If the Fund is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
(2) | If the Fund is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
(3) | Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
(4) | Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements where the Fund is the seller of protection as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may includeup-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. |
* | When an implied credit spread is not available, reference the fair value of credit default swap agreements on credit indices and asset-backed securities. Where the Fund is the seller of protection, it serves as an indicator of the current status of the payment/performance risk and represents the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date. Increasing fair value in absolute terms, when compared to the notional amount of the swap, represents a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. |
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral to cover requirements for open centrally cleared/ exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||||||
Citigroup Global Markets, Inc. | $ | 330,000 | $ | — |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 29 |
Schedule of Investments(continued)
as of August 31, 2019
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Asset-Backed Securities | ||||||||||||
Collateralized Loan Obligations | $ | — | $ | 1,458,327 | $ | — | ||||||
Bank Loans | — | 931,344 | — | |||||||||
Corporate Bonds | — | 24,270,589 | — | |||||||||
Affiliated Mutual Funds | 396,916 | — | — | |||||||||
Time Deposit | — | 171 | — | |||||||||
Other Financial Instruments* | ||||||||||||
Futures Contracts | 6,875 | — | — | |||||||||
Centrally Cleared Credit Default Swap Agreements | — | (5,755 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 403,791 | $ | 26,654,676 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value. |
See Notes to Financial Statements.
30 |
Industry Classification (unaudited):
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows:
Oil & Gas | 8.5 | % | ||
Media | 7.1 | |||
Telecommunications | 6.9 | |||
Collateralized Loan Obligations | 5.3 | |||
Healthcare-Services | 5.1 | |||
Chemicals | 4.9 | |||
Home Builders | 4.8 | |||
Retail | 4.8 | |||
Commercial Services | 4.3 | |||
Diversified Financial Services | 3.8 | |||
Electric | 3.4 | |||
Mining | 3.2 | |||
Entertainment | 3.0 | |||
Food | 2.9 | |||
Aerospace & Defense | 2.6 | |||
Pharmaceuticals | 2.3 | |||
Building Materials | 2.2 | |||
Auto Parts & Equipment | 2.1 | |||
Pipelines | 2.1 | |||
Infrastructure Software | 1.7 | |||
Computers | 1.7 | |||
Packaging & Containers | 1.7 | |||
Auto Manufacturers | 1.6 | |||
Affiliated Mutual Fund (0.5% represents investments purchased with collateral from securities on loan) | 1.4 | |||
Software | 1.4 | |||
Real Estate | 1.1 | % | ||
Gas | 1.0 | |||
Internet | 0.9 | |||
Transportation | 0.8 | |||
Engineering & Construction | 0.7 | |||
Specialty Chemicals | 0.7 | |||
Iron/Steel | 0.5 | |||
Machinery-Diversified | 0.5 | |||
Real Estate Investment Trusts (REITs) | 0.5 | |||
Electric & Gas Marketing | 0.4 | |||
Beverages | 0.3 | |||
Casinos & Gaming | 0.3 | |||
Agriculture | 0.3 | |||
Banks | 0.2 | |||
Distribution/Wholesale | 0.2 | |||
Housewares | 0.2 | |||
Miscellaneous Manufacturers | 0.2 | |||
Electronics | 0.1 | |||
Household Products/Wares | 0.1 | |||
Coal | 0.1 | |||
Time Deposit | 0.0 | * | ||
|
| |||
97.9 | ||||
Other assets in excess of liabilities | 2.1 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05%. |
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit contracts risk and interest rate contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 31 |
Schedule of Investments(continued)
as of August 31, 2019
Fair values of derivative instruments as of August 31, 2019 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for as hedging instruments, | Asset Derivatives | Liability Derivatives | ||||||||||
Statement of Assets and | Fair Value | Statement of Assets and | Fair Value | |||||||||
Interest rate contracts | Due from/to broker— variation margin futures* | $ | 8,312 | Due from/to broker— variation margin futures* | $ | 1,437 | ||||||
Credit Contracts | Due from/to broker—variation margin swaps* | — | Due from/to broker—variation margin swaps* | 5,755 | ||||||||
|
|
|
| |||||||||
$ | 8,312 | $ | 7,192 | |||||||||
|
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
The effects of derivative instruments on the Statement of Operations for the period ended August 31, 2019 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Futures | Swaps | Total | |||||||||
Credit contracts | $ | — | $ | 5,605 | $ | 5,605 | ||||||
Interest rate contracts | 47,269 | — | 47,269 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 47,269 | $ | 5,605 | $ | 52,874 | ||||||
|
|
|
|
|
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Futures | Swaps | Total | |||||||||
Credit contracts | $ | — | $ | (5,755 | ) | $ | (5,755 | ) | ||||
Interest rate contracts | 6,875 | — | 6,875 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 6,875 | $ | (5,755 | ) | $ | 1,120 | |||||
|
|
|
|
|
|
See Notes to Financial Statements.
32 |
For the period ended August 31, 2019 the Fund’s average volume of derivative activities is as follows:
Futures Contracts— Long Positions(1) | Futures Contracts— Short Positions(1) | Credit Default Swap Agreements— Buy Protection(1) | ||||||||
$ | 2,027,258 | $ | 434,875 | $ | 309,375 |
(1) | Notional Amount in USD. |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right toset-off exists, is presented in the summary below:
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 142,829 | $ | (142,829 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of the financial instruments/transactions. |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 33 |
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value, including securities on loan of $142,829: | ||||
Unaffiliated investments (cost $26,509,390) | $ | 26,660,431 | ||
Affiliated investments (cost $396,937) | 396,916 | |||
Cash | 24 | |||
Interest and dividends receivable | 469,050 | |||
Deposit with broker for centrally cleared/exchange-traded derivatives | 330,000 | |||
Receivable for investments sold | 26,309 | |||
Due from broker—variation margin futures | 2,031 | |||
Due from broker—variation margin swaps | 346 | |||
|
| |||
Total assets | 27,885,107 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 74,830 | |||
Payable to broker for collateral for securities on loan | 148,785 | |||
Management fee payable | 12,337 | |||
Other liabilities | 187 | |||
|
| |||
Total Liabilities | 236,139 | |||
|
| |||
Net Assets | $ | 27,648,968 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 675 | ||
Paid-in capital in excess of par | 27,152,262 | |||
|
| |||
27,152,937 | ||||
Total distributable earnings (loss) | 496,031 | |||
|
| |||
Net assets, August 31, 2019 | $ | 27,648,968 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 40.96 | ||
|
|
See Notes to Financial Statements.
34 |
Statement of Operations
Period Ended August 31, 2019*
Net Investment Income (Loss) |
| |||
Income |
| |||
Interest income | $ | 1,636,350 | ||
Affiliated dividend income | 15,750 | |||
Income from securities lending, net (including affiliated income of $2,753) | 3,700 | |||
|
| |||
Total income | 1,655,800 | |||
|
| |||
Expenses | ||||
Management fee | 131,051 | |||
|
| |||
Total expenses | 131,051 | |||
Less: Management fee waiver and/or expense reimbursement | (994 | ) | ||
|
| |||
Net expenses | 130,057 | |||
|
| |||
Net investment income (loss) | 1,525,743 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments |
| |||
Net realized gain (loss) on: |
| |||
Investment transactions (including affiliated of $(145)) | 221,365 | |||
Futures transactions | 47,269 | |||
Swap agreement transactions | 5,605 | |||
|
| |||
274,239 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(21)) | 151,020 | |||
Futures | 6,875 | |||
Swap agreements | (5,755 | ) | ||
|
| |||
152,140 | ||||
|
| |||
Net gain (loss) on investment transactions | 426,379 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 1,952,122 | ||
|
|
* | For the period from September 24, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
PGIM Active High Yield Bond ETF | 35 |
Statement of Changes in Net Assets
Period Ended August 31, 2019* | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 1,525,743 | ||
Net realized gain (loss) on investments | 274,239 | |||
Net change in unrealized appreciation (depreciation) on investments | 152,140 | |||
|
| |||
Net increase (decrease) in net assets resulting from operations | 1,952,122 | |||
|
| |||
Dividends and Distributions | ||||
Distributions from distributable earnings | (1,456,091 | ) | ||
|
| |||
Fund share transactions (Net of share conversions) | ||||
Net proceeds from shares sold | 27,152,937 | |||
|
| |||
Net increase (decrease) in net assets from Fund share transactions | 27,152,937 | |||
|
| |||
Total increase (decrease) | 27,648,968 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 27,648,968 | ||
|
|
* | For the period from September 24, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
36 |
Notes to Financial Statements
PGIM ETF Trust (the “Trust”) is a diversified,open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”), and operated as an exchange-traded fund. The Trust was organized as a Delaware statutory trust on October 23, 2017 and consists of six separate series (each a “Fund” and collectively, the “Funds”): PGIM Ultra Short Bond ETF, PGIM Active High Yield Bond ETF, PGIM QMA Strategic AlphaLarge-Cap Core ETF, PGIM QMA Strategic AlphaSmall-Cap Growth ETF, PGIM QMA Strategic Alpha Small-Cap Value ETF and PGIM QMA Strategic Alpha International Equity ETF.
These financial statements relate only to PGIM Active High Yield Bond ETF, which commenced investment operations on September 24, 2018.
The investment objective of the Fund is to seek total return through a combination of current income and capital appreciation.
1. Accounting Policies
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation:The Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Trust’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
For the fiscal reportingperiod-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may
PGIM Active High Yield Bond ETF | 37 |
Notes to Financial Statements(continued)
occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.
Investments inopen-end,non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
Bank loans are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy. Bank loans valued based on a single broker quote or at the original transaction price in excess of five business days are classified as Level 3 in the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are generally valued at the daily settlement price determined by the
respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
38 |
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities:Pursuant to Rule22e-4 under the 1940 Act, the Fund has adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Fund limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities:Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the Fund’s LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “Illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Fund’s investments in restricted securities could be impaired if trading does not develop or declines.
Financial Futures Contracts:A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin”. Subsequent payments, known as
PGIM Active High Yield Bond ETF | 39 |
Notes to Financial Statements(continued)
“variation margin”, are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.
The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Bank Loans:The Fund invested in bank loans. Bank loans include fixed and floating rate loans that are privately negotiated between a corporate borrower and one or more financial
institutions, including, but not limited to, term loans, revolvers, and other instruments issued in the bank loan market. The Fund may acquire interests in loans directly (by way of assignment from the selling institution) or indirectly (by way of the purchase of a participation interest from the selling institution). Under a bank loan assignment, the Fund generally will succeed to all the rights and obligations of an assigning lending institution and becomes a lender under the loan agreement with the relevant borrower in connection with that loan. Under a bank loan participation, the Fund generally will have a contractual relationship only with the lender, not with the relevant borrower. As a result, the Fund generally will have the right to receive payments of principal, interest, and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the relevant borrower. The Fund may not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation. As a result, the Fund will assume the credit risk of both the borrower and the institution selling the participation to the Fund.
Swap Agreements:The Fund may enter into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with counterparty(“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation (depreciation) on swap agreements.
40 |
Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. Any upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.
Credit Default Swaps (“CDS”):CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.
The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases. The Fund’s maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.
As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements where the Fund is the seller of protection as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit
PGIM Active High Yield Bond ETF | 41 |
Notes to Financial Statements(continued)
spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
Payment-In-Kind:The Fund invests in the open market or receive pursuant to debt restructuring, securities thatpay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to the existing principal balance of the debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.
Securities Lending:The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
Securities Transactions and Net Investment Income:Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the
42 |
ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.
Taxes:It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions:The Fund expects to declare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date. Permanent book/ tax differences relating to income and gain (loss) are reclassified amongst total distributable earnings (loss) andpaid-in capital in excess of par, as appropriate.
Estimates:The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
Pursuant to a management agreement with the Trust on behalf of the Fund (the Management Agreement), PGIM Investments, subject to the supervision of the Board and in conformity with the stated policies of the Fund, manages both the investment operations of the Fund and the composition of the Fund’s portfolio, including the purchase, retention and disposition of assets. In connection therewith, the Manager is obligated to keep certain books and records of the Fund. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Fund. The Manager will continue to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements. PGIM Investments will review the performance of the investment subadviser(s) and make recommendations to the Board with respect to the retention of investment subadvisers and the renewal of contracts. The Manager also administers the Fund’s business affairs and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Fund’s custodian (the Custodian). The management services of PGIM Investments to the Fund are not exclusive under the terms of the Management Agreement and PGIM Investments is free to, and does, render management services to others.
PGIM Active High Yield Bond ETF | 43 |
Notes to Financial Statements(continued)
The Board of Trustees of the Trust has approved a unitary management fee structure for the Fund. Under the unitary fee structure, the Manager is responsible for paying substantially all the expenses of the Fund, costs of borrowing money (including interest expenses and any loan commitment or other associated fees), taxes, acquired fund fees and expenses, brokerage fees, costs of holding shareholder meetings, litigation, indemnification and extraordinary expenses.
The unitary fee paid to the Manager is accrued daily and payable monthly, at an annual rate of 0.53% of the Fund’s average daily net assets. The Manager has contractually agreed, beginning from the inception of the Fund, to waive any management fees it receives from the Fund in an amount equal to the subadvisory fees paid by the Fund to the PGIM Institutional Money Market Fund due to the Fund’s investment of its excess overnight cash in the PGIM Institutional Money Market Fund. This waiver will remain in effect for as long as the Fund remains invested or intends to invest in the PGIM Institutional Money Market Fund.
The Manager has entered into a subadvisory agreement (Subadvisory Agreement) with PGIM, Inc., the Fund’s investment subadviser (the “subadviser”), which provides subadvisory services to the Fund through its PGIM Fixed Income unit. The Subadvisory Agreement provides that the subadviser will furnish investment advisory services in connection with the management of the Fund. In connection therewith, the subadviser is obligated to keep certain books and records of the Fund. Under the Subadvisory Agreement, the subadviser, subject to the supervision of PGIM Investments, is responsible for managing the assets of the Fund in accordance with the Fund’s investment objectives, policies and restrictions. The subadviser determines what securities and other instruments are purchased and sold for the Fund and is responsible for obtaining and evaluating financial data relevant to the Fund. PGIM Investments continues to have responsibility for all investment advisory services pursuant to the Management Agreement and supervises the subadviser’s performance of such services. The Manager pays for the services of the subadviser.
Brown Brothers Harriman & Co. (“BBH”) serves as the Custodian, Transfer Agent, Administrative Agent and Securities Lending Agent for the Trust. Pursuant to a Custodian Agreement, BBH maintains certain financial accounting books and records pursuant to an agreement with the Trust. Subcustodians provide custodial services for anynon-US assets held outside the United States. Pursuant to an Administrative and Transfer Agency Agreement, BBH maintains certain books and records and provides transfer agency, administrative, legal, tax support and accounting and financial reporting services for the maintenance and operations of the Trust. As the transfer and dividend disbursing agent of the Trust, BBH provides customary transfer agency services to the Trust, including the handling of shareholder communications, the processing of shareholder transactions, the
44 |
maintenance of shareholder account records, the payment of dividends and distributions, and related functions. For these services, BBH receives compensation from the Manager and is reimbursed for expenses, including custodian and administration fees and certainout-of-pocket expenses including, but not limited to, postage, stationery, printing, allocable communication expenses and other costs. The Manager is responsible for compensating BBH under the Custodian and Administrative and Transfer Agency Agreements. As securities lending agent, BBH is responsible for marketing to approved borrowers available securities from the Fund’s portfolio. As administered by BBH, available securities from the Fund’s portfolio are furnished to borrowers throughsecurity-by-security loans effected by BBH as lending agent on behalf of the Fund. BBH is responsible for the administration and management of the Fund’s securities lending program, including the preparation and execution of a participant agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented with the Fund’s custodian, ensuring that loaned securities are daily valued and that the corresponding required cash collateral is delivered by the borrower(s), and arranging for the investment of cash collateral received from borrowers in accordance with the Fund’s investment guidelines. BBH receives as compensation for its services a portion of the amount earned by the Fund for lending securities.
3. Other Transactions with Affiliates
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule17a-7 procedures. Rule17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Pursuant to the Rule17a-7 procedures and consistent with guidance issued by the SEC, the Fund’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such17a-7 transactions were effected in accordance with the Fund’s Rule17a-7 procedures. Any17a-7 transactions for the reporting period are disclosed in the “Portfolio Securities” note, below.
The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Through the Fund’s investments in the mentioned underlying fund, PGIM Investments and/or its affiliates are paid fees or compensated for providing their services. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
Prudential Investment Management Services LLC (“PIMS” or the “Distributor”), acts as the distributor of the Fund. The Distributor is a subsidiary of Prudential Financial, Inc.
PGIM Active High Yield Bond ETF | 45 |
Notes to Financial Statements(continued)
(“Prudential”), pursuant to the terms of a distribution agreement (“Distribution Agreement”) between the Trust and the Distributor. Shares are continuously offered for sale by the Distributor only. Although the Distributor does not receive any fees under the Distribution Agreement, the Manager or its affiliates may pay the Distributor for certain distribution related services.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended August 31, 2019, were $41,447,638 and $14,079,878 respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the reporting period ended August 31, 2019, is presented as follows:
Value Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Core Ultra Short Bond Fund* | ||||||||||||||||||||||||||||
$ — | $ | 6,794,965 | $ | 6,547,000 | $ | — | $ | (126 | ) | $ | 247,839 | 247,839 | $ | 15,750 | ||||||||||||||
PGIM Institutional Money Market Fund* | ||||||||||||||||||||||||||||
$ — | $ | 31,442,789 | $ | 31,293,672 | $ | (21 | ) | $ | (19 | ) | $ | 149,077 | 149,063 | $ | 2,753 | ** | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
$ — | $ | 38,237,754 | $ | 37,840,672 | $ | (21 | ) | $ | (145 | ) | $ | 396,916 | 396,902 | $ | 18,503 | |||||||||||||
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* | The Fund did not have any capital gain distributions during the reporting period. |
** | This amount is included in “Income from securities lending, net” on the Statement of Operations. |
For the reporting period ended August 31, 2019, no17a-7 transactions were entered into by the Fund.
5. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date.
For the period ended August 31, 2019, the tax character of dividends paid by the Fund was $1,456,091 of ordinary income.
As of August 31, 2019, the accumulated undistributed earnings on a tax basis was $373,741 of ordinary income and $32,487 of long-term capital gains.
46 |
The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of August 31, 2019 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||
$26,981,211 | $991,205 | $(913,949) | $77,256 |
The difference between book and tax basis were primarily attributable to deferred losses on wash sales, swaps, differences in the treatment of premium amortization for book and tax purposes and other cost basis adjustments.
The Manager has analyzed the Fund’s tax positions taken and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period.
Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for the most recent fiscal year ended August 31, 2019 are subject to such review.
6. Capital and Ownership
The Fund is an exchange-traded fund, commonly known as an “ETF”. Individual shares of the Fund may only be purchased and sold in secondary market transactions through brokers or other financial intermediaries. Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the “Exchange”), and because the shares of the Fund trade at market prices rather than NAV, shares of the Fund may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund will issue and redeem its shares at NAV only in a large specified number of shares called a “Creation Unit” or multiples thereof to investors who have entered into an agreement with the Distributor and are authorized to transact with the Trust in Creation Units (“Authorized Participants”). A Creation Unit consists of 25,000 shares of the Fund. The Fund generally issues and redeems Creation Units in return for a specified amount of cash and/ or designated portfolio of securities. Except when aggregated in Creation Units, shares are not individually redeemable. Authorized Participants transacting in Creation Units includingnon-standard orders and whole or partial cash purchases or redemptions may also pay variable transaction fees to compensate the Fund for certain transaction costs (e.g. brokerage costs) relating to investing in portfolio securities. Such variable transaction fees, if any, are currently being waived by the Fund. In addition, fixed transaction fees are imposed for the transfer and other costs associated with the creation or redemption of Creation Units. Authorized Participants are responsible for paying these fixed transaction fees to BBH.
The Trust is authorized to issue an unlimited number of shares of beneficial interest, $0.001 par value per share.
PGIM Active High Yield Bond ETF | 47 |
Notes to Financial Statements(continued)
As of August 31, 2019, Prudential, through its affiliated entities, including affiliated funds, owned 625,000 shares of the Fund.
At reporting period end, one affiliated shareholder of record held greater than 5% of the Fund, which represented 93% of the Fund’s outstanding shares, of which 93% were held by an affiliate of Prudential.
Transactions in shares of beneficial interest were as follows:
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 675,000 | $ | 27,152,937 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 675,000 | 27,152,937 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 675,000 | $ | 27,152,937 | |||||
|
|
|
|
7. Borrowings
The Trust, on behalf of the Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 4, 2018 through October 3, 2019. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCA is paid monthly and at a per annum interest rate of 1.25% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Subsequent to the reporting period end, the SCA has been renewed effective October 3, 2019 and will continue to provide a commitment of $900 million through October 1, 2020. The commitment fee paid by the Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.20% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios
48 |
may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Fund did not utilize the SCA during the reporting period ended August 31, 2019.
8. Risks of Investing in the Fund
The Fund’s risks include, but are not limited to, some or all of the risks discussed below:
Authorized Participant Concentration Risk:Only an Authorized Participant may engage in creation or redemption transactions directly with the Fund. The Fund has a limited number of intermediaries that act as Authorized Participants and none of these Authorized Participants is or will be obligated to engage in creation or redemption transactions. To the extent that these intermediaries exit the business or are unable to or choose not to proceed with creation and/ or redemption orders with respect to the Fund and no other Authorized Participant creates or redeems, shares of the Fund may trade at a substantial discount or premium to NAV, may trade at larger spreads and possibly face trading halts and/or delisting.
Bond Obligations Risk:The Fund’s holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed-income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to reinvest at the same level and therefore would earn less income.
ETF Shares Trading Risk:Fund shares are listed for trading on the Exchange and the shares are bought and sold in the secondary market at market prices. The market prices of the shares of the Fund are expected to fluctuate in response to changes in the Fund’s NAV, the intraday value of the Fund’s holdings and supply and demand for shares of the Fund. We cannot predict whether shares of the Fund will trade above, below or at their NAV. Trading on the Exchange, including trading of Fund shares, may be halted in certain circumstances and shareholders may not be able to sell Fund shares at the time or price desired. During periods of stressed market conditions, the market for the shares of the Fund may become less liquid in response to deteriorating liquidity in the markets for the Fund’s portfolio investments. This adverse effect on the liquidity of the Fund’s shares could lead to differences between the market price of the Fund’s shares and the NAV of those shares. There can be no assurance that the requirements of the Exchange to maintain the listing of shares of the Fund will continue to be met. At times, trading in the securities of ETFs has become volatile and unpredictable and the price of ETF shares has diverged from market driven fundamentals. Since the Fund is new, an active secondary market for the shares of the Fund may not develop or may not continue once developed.
PGIM Active High Yield Bond ETF | 49 |
Notes to Financial Statements(continued)
Interest Rate Risk:The value of an investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk. The Fund may face a heightened level of interest rate risk as a result of the U.S. Federal Reserve Board’s policies. The Fund’s investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Liquidity Risk:The Fund may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Fund are difficult to purchase or sell. Liquidity risk includes the risk that the Fund may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be more difficult to value. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, the Fund may incur higher transaction costs when executing trade orders of a given size. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Market and Credit Risk:Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of an investment in the Fund will decline. Additionally, the Fund may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Fund has unsettled or open transactions defaults.
Derivatives Risk:Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivatives transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and
50 |
therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, manyover-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument.Over-the-counter derivative instruments also involve the risk that the other party will not meet its obligations to the Fund.
9. Recent Accounting Pronouncements and Reporting Updates
In August 2018, the FASB issued Accounting Standards Update (“ASU”)No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Fund’s policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Manager has evaluated the implications of certain provisions of the ASU and has determined to early adopt aspects related to the removal and modification of certain fair value measurement disclosures under the ASU effective immediately. The Manager continues to evaluate certain other provisions of the ASU and does not expect a material impact to financial statement disclosures.
In September 2019, the Securities and Exchange Commission adopted a new rule and related form amendments regulating ETFs, which will become effective 60 days after publication in the Federal Register. The Manager is currently evaluating the rule and form amendments, but does not anticipate any material impact on future financial statement disclosures.
PGIM Active High Yield Bond ETF | 51 |
Financial Highlights
September 24, 2018(e) through | ||||
2019 | ||||
Per Share Operating Performance(a): | ||||
Net Asset Value, Beginning of Period | $40.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 2.30 | |||
Net realized and unrealized gain (loss) on investment | 0.85 | |||
Total from investment operations | 3.15 | |||
Less Dividends and Distributions: | ||||
Dividends from net investment income | (2.19 | ) | ||
Net asset value, end of period | $40.96 | |||
Total Return(b): | 8.20% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $27,649 | |||
Average net assets (000) | $26,467 | |||
Ratios to average net assets(c): | ||||
Expenses after waivers and/or expense reimbursement | 0.52% | (d) | ||
Expenses before waivers and/or expense reimbursement | 0.53% | (d) | ||
Net investment income (loss) | 6.15% | (d) | ||
Portfolio turnover rate | 55% | (f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Annualized. |
(e) | Commencement of operations. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
52 |
Report of Independent Registered Public Accounting Firm
To the Shareholders of PGIM Active High Yield Bond ETF and Board of Trustees
PGIM ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of PGIM Active High Yield Bond ETF, a series of PGIM ETF Trust, (the Fund), including the schedule of investments, as of August 31, 2019, and the related statement of operations and statement of changes in net assets for the period from September 24, 2018 (commencement of operations) to August 31, 2019, and the related notes (collectively, the financial statements) and the financial highlights for the period from September 24, 2018 to August 31, 2019. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the period from September 24, 2018 to August 31, 2019, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2019, by correspondence with the custodian, transfer agent, and brokers, or by other appropriate auditing procedures when replies were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audit provides a reasonable basis for our opinion.
We have served as the auditor of one or more PGIM and/or Prudential Retail investment companies since 2003.
New York, New York
October 15, 2019
PGIM Active High Yield Bond ETF | 53 |
Federal Income Tax Information (unaudited)
For the period ended August 31, 2019, the Fund reports the maximum amount allowable but not less than 71.67% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.
In January 2020, you will be advised on IRS Form1099-DIV or substitute1099-DIV, as to the federal tax status of the dividends received by you in calendar year 2019.
54 |
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS(unaudited)
Information about Board Members and Officers of the Funds is set forth below. Board Members who are not deemed to be “interested persons” of the Funds, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Funds are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering theday-to-day operations of the Funds.
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Ellen S. Alberding 3/11/58 Board Member Portfolios Overseen: 96 |
President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018). |
None. |
Since December 2017 | |||
Kevin J. Bannon 7/13/52 Board Member Portfolios Overseen: 96 |
Retired; Managing Director (April2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May2003-May 2007) of BNY Hamilton Family of Mutual Funds. |
Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). |
Since December 2017 |
PGIM Active High Yield Bond ETF
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Linda W. Bynoe 7/9/52 Board Member Portfolios Overseen: 96 |
President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). |
Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). |
Since December 2017 | |||
Barry H. Evans 11/2/60 Board Member Portfolios Overseen: 95 |
Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S. |
Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). |
Since December 2017 | |||
Keith F. Hartstein 10/13/56 Board Member & Independent Chair Portfolios Overseen: 96 |
Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Laurie Simon Hodrick 9/29/62 Board Member Portfolios Overseen: 95 |
A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). |
Independent Director, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (since July 2018) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). |
Since December 2017 | |||
Michael S. Hyland, CFA 10/4/45 Board Member Portfolios Overseen: 96 |
Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). |
None. |
Since December 2017 | |||
Brian K. Reid 9/22/61 Board Member Portfolios Overseen: 95 |
Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017). |
None. |
Since March 2018 |
PGIM Active High Yield Bond ETF
Independent Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Grace C. Torres 6/28/59 Board Member Portfolios Overseen: 95 |
Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. |
Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. |
Since December 2017 |
Interested Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Stuart S. Parker 10/5/62 Board Member & President Portfolios Overseen: 96 |
President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Interested Board Members | ||||||
Name Date of Birth Position(s) Portfolios Overseen |
Principal Occupation(s) During Past Five Years |
Other Directorships Held During Past Five Years |
Length of Board Service | |||
Scott E. Benjamin 5/21/73 Board Member & Vice President Portfolios Overseen:96 |
Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). |
None. |
Since December 2017 |
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Raymond A. O’Hara 9/11/55 Chief Legal Officer |
Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of PGIM Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.). |
Since December 2017 |
PGIM Active High Yield Bond ETF
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Dino Capasso 8/19/74 Chief Compliance Officer |
Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. |
Since December 2017 | ||
Andrew R. French 12/22/62 Secretary |
Vice President of PGIM Investments LLC (December 2018-Present); formerly Vice President and Corporate Counsel (February 2010-December 2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. |
Since December 2017 | ||
Jonathan D. Shain 8/9/58 Assistant Secretary |
Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc. |
Since December 2017 | ||
Claudia DiGiacomo 10/14/74 Assistant Secretary |
Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). |
Since December 2017 | ||
Diana N. Huffman 4/14/82 Assistant Secretary |
Vice President and Corporate Counsel (since September 2015) of Prudential; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). |
Since March 2019 | ||
Kelly A. Coyne 8/8/68 Assistant Secretary |
Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). |
Since December 2017 | ||
Christian J. Kelly 5/5/75 Treasurer and Principal Financial and Accounting Officer |
Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); formerly, Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). |
Since January 2019 |
Visit our website at pgiminvestments.com
Fund Officers(a) | ||||
Name Date of Birth Fund Position |
Principal Occupation(s) During Past Five Years |
Length of Service as Fund Officer | ||
Lana Lomuti 6/7/67 Assistant Treasurer |
Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. |
Since December 2017 | ||
Russ Shupak 10/08/73 Assistant Treasurer |
Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Deborah Conway 3/26/69 Assistant Treasurer |
Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Elyse M. McLaughlin 1/20/74 Assistant Treasurer |
Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration. |
Since October 2019 |
(a) | Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively. |
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
PGIM Active High Yield Bond ETF
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | pgiminvestments.com |
PROXY VOTING |
The Board of Trustees of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
TRUSTEES |
Ellen S. Alberding• Kevin J. Bannon• Scott E. Benjamin• Linda W. Bynoe• Barry H. Evans• Keith F. Hartstein• Laurie Simon Hodrick• Michael S. Hyland• Stuart S. Parker• Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker,President•Scott E. Benjamin,Vice President• Christian J. Kelly,Treasurer and Principal Financial and Accounting Officer• Raymond A. O’Hara,Chief Legal Officer• Dino Capasso,Chief Compliance Officer• Charles H. Smith,Anti-Money Laundering Compliance Officer• Andrew R. French,Secretary•Jonathan D. Shain,Assistant Secretary• Claudia DiGiacomo,Assistant Secretary• Diana N. Huffman,Assistant Secretary•Kelly A. Coyne,Assistant Secretary• Lana Lomuti,Assistant Treasurer• Russ Shupak,Assistant Treasurer•Elyse McLaughlin,Assistant Treasurer• Deborah Conway,Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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SUBADVISER | PGIM Fixed Income | 655 Broad Street Newark, NJ 07102 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN/TRANSFER AGENT | Brown Brothers Harriman & Co. | 50 Post Office Square Boston, MA 02110 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 | ||
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An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website atpgiminvestments.com or by calling(800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your fund documents online, go topgiminvestments.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM Active High Yield Bond ETF, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. Form N-PORT is filed with the Commission quarterly, and each Fund’s full portfolio holdings as of the first and third fiscal quarter-ends (as of the third month of the Fund’s fiscal quarter for reporting periods on or after September 30, 2019) will be made publicly available 60 days after the end of each quarter at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling(800) 225-1852. |
Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM ACTIVE HIGH YIELD BOND ETF
TICKER SYMBOL | PHYL |
ETF1001E
PGIM QMA STRATEGIC ALPHA ETFs
PGIM QMA Strategic Alpha Large-Cap Core ETF | PQLC | |
PGIM QMA Strategic Alpha Small-Cap Growth ETF | PQSG | |
PGIM QMA Strategic Alpha Small-Cap Value ETF | PQSV | |
PGIM QMA Strategic Alpha International Equity ETF | PQIN |
ANNUAL REPORT
AUGUST 31, 2019
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website (pgiminvestments.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank).
You may elect to receive all future reports in paper free of charge. You should contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account.
To enroll in e-delivery, go to pgiminvestments.com/edelivery
Objective: To seek long-term growth of capital |
Highlights(unaudited)
PGIM QMA STRATEGIC ALPHA LARGE-CAP CORE ETF
• | The Fund benefited from favorable security selection in health care and an overweight in industrials. |
• | The Fund’s positioning in health care equipment & supplies and security selection in industrial conglomerates aided performance. |
• | Relative performance was hurt most by an overweight and unfavorable security selection in the consumer discretionary sector. In this sector, the Fund’s positioning in textile, apparel, and luxury goods manufacturers significantly detracted from relative performance. |
PGIM QMA STRATEGIC ALPHA SMALL-CAP GROWTH ETF
• | The Fund benefited from favorable security selection in the materials sector. |
• | The Fund’s positioning in the chemical industry aided performance, and its focus on quality through its profitability measure helped it avoid some poorer performers in the industry. |
• | Relative performance was hurt most by poor selection in health care, where the Fund’s positioning in pharmaceutical and biotechnology companies significantly detracted, as well as an underweight in information technology. |
PGIM QMA STRATEGIC ALPHA SMALL-CAP VALUE ETF
• | The Fund benefited from favorable security selection in the energy and health care sectors. |
• | The Fund’s positioning in biotechnology and good selection in the weak-performing oil, gas, and consumable fuels industry aided the Fund’s performance. |
• | Relative performance was hurt most by poor selection in the financial sector, where positioning in insurance companies significantly detracted, as well as an underweight in utilities. |
PGIM QMA STRATEGIC ALPHA INTERNATIONAL EQUITY ETF
• | The Fund benefited from good relative performance in the financial and energy sectors. |
• | In the financial sector, the Fund’s meaningful underweight position in banks, which was one of the poorer-performing industries in the MSCI EAFE Index, along with good stock selection aided performance. Performance was also helped by an underweight position in energy, which was the only sector in the Index to generate a negative return during the period. |
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• | The Fund’s relative performance was hurt most by holdings in the health care and industrial sectors. |
• | In health care, the Fund’s positioning among pharmaceutical companies significantly detracted from relative performance. In industrials, the Fund exhibited poor security selection, especially among machinery and airline stocks. |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Funds’ portfolio holdings are for the period covered by this report and are subject to change thereafter.
Exchange-traded funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. QMA is the primary business name of QMA LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company and registered investment adviser.© 2019 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM QMA Strategic Alpha ETFs informative and useful. The report covers performance from the funds’ inception dates through the end of the reporting period on August 31, 2019.
While the US economy remained healthy, with rising corporate profits and strong job growth, the Federal Reserve cut interest rates late in the period for the first time since the Great Recession more than a decade ago. After nine rate increases in recent years, the cut was a proactive attempt by the Fed to extend the longest domestic economic expansion on record as growth in many other regions weakened. China in particular showed signs of slowing amid trade tensions with the US, and turmoil in the United Kingdom continued as it negotiated an exit from the European Union.
Despite the growing US economy, volatility returned to the equity markets during the period. After corporate tax cuts and regulatory reforms helped boost US stocks early in the period, equities declined significantly at the end of 2018 on concerns about China’s economy, a potential global trade war, higher interest rates, and worries that profit growth might slow. Stocks reversed course early in 2019, rising sharply after the Fed moderated its position on additional rate hikes for the remainder of the year. For the period overall, large-cap US equities rose while small-cap US stocks fell. Stocks also declined in developed foreign and emerging markets.
The overall US bond market posted strong returns during the period on a significant rally in interest rates that saw the 10-year US Treasury yield decline from around 3% to 2%. Investment grade corporate bonds led the way with a double-digit gain, while corporate high yield and municipal bonds each had a high single-digit return. Globally, bonds in developed markets delivered solid returns, while emerging markets debt also posted positive results. A continuing trend during the period was the inversion of a portion of the US Treasury yield curve, as the yield on certain shorter maturities exceeded the yield on the 10-year bond.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM QMA Strategic Alpha ETFs
October 15, 2019
PGIM QMA Strategic Alpha ETFs | 5 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 8/31/19 | ||
Since Inception (%) | ||
Net Asset Value (NAV) | 5.20 (10/17/18) | |
Market Price* | 5.22 (10/17/18) | |
S&P 500 Index | 9.84 | |
Lipper Large-Cap Core Funds Average | 9.36 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the Market Price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the S&P 500 Index by portraying the initial account values at the commencement of operations (October 17, 2018) and the account values at the end of the current fiscal period (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on October 17, 2018, while the benchmark and the Index assume that the initial investment occurred on October 31, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
6 | Visit our website at pgiminvestments.com |
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the sale or redemption of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
S&P 500 Index—The S&P 500 Index is an unmanaged index of over 500 stocks of large public US companies. It gives a broad look at how stock prices in the United States have performed.
Lipper Large-Cap Core Funds Average—The Lipper Large-Cap Core Funds Average includes funds that invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s US Diversified Equity large-cap floor, have more latitude in the companies in which they invest, and typically have average characteristics compared to the S&P 500 Index.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
PGIM QMA Strategic Alpha ETFs | 7 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Your Fund’s Performance(continued)
Presentation of Fund Holdings
Ten Largest Holdings expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Target Corp.,Multiline Retail | 0.5 | |||
Dollar General Corp.,Multiline Retail | 0.4 | |||
Synopsys, Inc.,Software | 0.4 | |||
Brown-Forman Corp.,Beverages | 0.4 | |||
Walmart, Inc.,Food & Staples Retailing | 0.4 | |||
Estee Lauder Cos., Inc. (The),Personal Products | 0.4 | |||
Consolidated Edison, Inc.,Multi-Utilities | 0.4 | |||
Jacobs Engineering Group Inc.,Construction & Engineering | 0.4 | |||
Mastercard, Inc.,IT Services | 0.4 | |||
Essex Property Trust, Inc.,Equity Real Estate Investment Trusts(REITs) | 0.4 |
Holdings reflect only long-term investments and are subject to change.
Ten Largest Industries expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Equity Real Estate Investment Trusts (REITs) | 7.8 | |||
Health Care Equipment & Supplies | 5.9 | |||
Insurance | 4.4 | |||
Capital Markets | 3.4 | |||
Banks | 3.4 | |||
Health Care Providers & Services | 3.4 | |||
Oil, Gas & Consumable Fuels | 3.4 | |||
IT Services | 2.9 | |||
Multi-Utilities | 2.5 | |||
Software | 2.5 |
Industry weightings reflect only long-term investments and are subject to change.
8 | Visit our website at pgiminvestments.com |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Strategy and Performance Overview(unaudited)
How did the Fund perform?
• | ThePGIM QMA Strategic Alpha Large-Cap Core ETF (the Fund) returned 5.20% based on net asset value since the Fund’s inception on October 17, 2018 through the end of the reporting period on August 31, 2019, underperforming the 9.84% return of the S&P 500 Index (the Index) and the 9.36% return of the Lipper Large-Cap Core Funds Average over the same period. |
What were the market conditions?
• | US equity markets moved higher during the period but exhibited increased volatility. |
• | Large-cap stocks generally outperformed their small- and mid-cap counterparts. |
• | Value stocks underperformed growth stocks across all market capitalizations. |
What worked?
• | The Fund benefited from favorable security selection in the health care sector and an overweight position in industrials. |
• | The Fund’s positioning in health care equipment & supplies, one of the better-performing industries in the health care sector, aided performance. |
• | In industrials, security selection in industrial conglomerates also added value. |
• | The Fund’s top individual contributors to relative performance were internet and direct marketing retailerAmazon.com Inc.; semiconductor companyNVIDIA Corp., and information technology companyApple Inc. |
What didn’t work?
• | The Fund’s relative performance was hurt most by an overweight position and unfavorable security selection in the consumer discretionary sector. |
• | In consumer discretionary, the Fund’s positioning in textile, apparel, and luxury goods manufacturers significantly detracted from relative performance as that industry underperformed on weaker-than-expected earnings results. The largest detractors at the stock level were software companyMicrosoft Corp., consumer staples companyProcter & Gamble Co., and electric utilityPG&E Corp. |
Current outlook
While the US stock market has remained buoyant, with most indexes having risen well into positive territory in 2019 through the end of the reporting period, the gulf in performance between cheap and expensive stocks has continued to be quite wide across the market-cap spectrum, with higher-valued stocks generally faring much better than lower-valued stocks. Accordingly, the Fund’s focus on lower-valued stocks has been a headwind in recent quarters, particularly in the growth arena where many of the better-performing
PGIM QMA Strategic Alpha ETFs | 9 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Strategy and Performance Overview(continued)
stocks have been trading at especially high valuations. As this disparity in performance and valuation has persisted, the Fund has continued to tilt toward these more attractively valued stocks while maintaining a quality focus through its heavier weight in companies with higher profitability. QMA believes this positioning in more reasonably valued, higher-quality stocks—which have been out of favor in recent quarters—will provide significant opportunity for improved performance going forward.
The percentage points shown in the tables below identify each security’s positive or negative contribution to the Fund’s return relative to the benchmark’s return during the reporting period.
Top Relative Contributors (%) | Top Relative Detractors (%) | |||||
Apple Inc. | 0.48 | Microsoft Corporation | –0.69 | |||
Amazon.com, Inc. | 0.25 | Procter & Gamble Company | –0.23 | |||
NVIDIA Corporation | 0.25 | PG&E Corporation | –0.22 | |||
Exxon Mobil Corporation | 0.23 | Macy’s Inc | –0.22 | |||
Berkshire Hathaway, Inc. Class B | 0.17 | Tapestry, Inc. | –0.22 |
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PGIM QMA Strategic Alpha Small-Cap Growth ETF
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 8/31/19 | ||
Since Inception (%) | ||
Net Asset Value (NAV) | –3.50 (11/13/18) | |
Market Price* | –3.53 (11/13/18) | |
Russell 2000 Growth Index | 4.31 | |
Lipper Small-Cap Growth Funds Average | 7.98 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the market price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the Russell 2000 Growth Index by portraying the initial account values at the commencement of operations (November 13, 2018) and the account values at the end of the current fiscal period (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on November 13, 2018, while the benchmark and the Index assume that the initial investment occurred on October 31, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
PGIM QMA Strategic Alpha ETFs | 11 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Your Fund’s Performance(continued)
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the sale or redemption of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
Russell 2000 Growth Index—The Russell 2000 Growth Index is unmanaged and comprises securities in the Russell 2000 Index with a higher-than-average growth orientation. Companies in this index generally have high price-to-book and price-to-earnings ratios. London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”).© LSE Group 2019. FTSE Russell is a trading name of certain of the LSE Group companies. Russell® is a trademark of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor, or endorse the content of this communication.
Lipper Small-Cap Growth Funds Average—The Lipper Small-Cap Growth Funds Average includes funds that invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) below Lipper’s USDE small-cap ceiling. Small-cap growth funds typically have above-average characteristics compared to the S&P SmallCap 600 Index. The S&P SmallCap 600 Index is generally considered representative of the small-cap segment of the US equity market.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
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Presentation of Fund Holdings
Ten Largest Holdings expressed as a percentage of net assets as of8/31/19 (%) | ||||
Deciphera Pharmaceuticals, Inc.,Biotechnology | 0.3 | |||
LivePerson, Inc.,Software | 0.3 | |||
Novocure Ltd.,Health Care Equipment & Supplies | 0.3 | |||
Model N, Inc.,Software | 0.3 | |||
GMS, Inc.,Trading Companies & Distributors | 0.3 | |||
G1 Therapeutics, Inc.,Biotechnology | 0.2 | |||
Genomic Health, Inc.,Biotechnology | 0.2 | |||
American States Water Co.,Water Utilities | 0.2 | |||
Telenav, Inc.,Software | 0.2 | |||
Avrobio, Inc.,Biotechnology | 0.2 |
Holdings reflect only long-term investments and are subject to change.
Ten Largest Industries expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Biotechnology | 9.5 | |||
Software | 6.6 | |||
Health Care Equipment & Supplies | 5.6 | |||
Equity Real Estate Investment Trusts (REITs) | 5.5 | |||
Machinery | 4.5 | |||
Banks | 4.2 | |||
Hotels, Restaurants & Leisure | 3.1 | |||
IT Services | 3.1 | |||
Commercial Services & Supplies | 2.9 | |||
Professional Services | 2.8 |
Industry weightings reflect only long-term investments and are subject to change.
PGIM QMA Strategic Alpha ETFs | 13 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Strategy and Performance Overview(unaudited)
How did the Fund perform?
• | ThePGIM QMA Strategic Alpha Small-Cap Growth ETF (the Fund) returned –3.50% based on net asset value since the Fund’s inception on November 13, 2018 through the end of the reporting period on August 31, 2019, underperforming the 4.31% return of the Russell 2000 Growth Index (the Index) and the 7.98% return of the Lipper Small-Cap Growth Funds Average over the same period. |
What were the market conditions?
• | US equity markets moved higher during the period but exhibited increased volatility. |
• | Large-cap stocks generally outperformed their small- and mid-cap counterparts. |
• | Value stocks underperformed growth stocks across all market capitalizations. |
What worked?
• | The Fund benefited from favorable security selection in the materials sector. |
• | In materials, the Fund’s positioning within the chemical industry aided performance, and its focus on quality through its profitability measure helped it avoid some of the poorer performers in the space. |
• | The Fund’s top individual contributors to relative performance were consumer discretionary companyStamps.com Inc., health care companyOdonate Therapeutics Inc., and information technology companyTeleNav Inc. |
What didn’t work?
• | The Fund’s relative performance was hurt most by poor selection in health care and an underweight in information technology. |
• | In health care, the Fund’s positioning in pharmaceutical and biotechnology companies significantly detracted from relative performance as its focus on valuation and profitability underperformed in an environment where stocks of more-expensive, less-profitable companies performed relatively better. |
• | Information technology stocks were the Index’s best performers during the period, but the Fund was meaningfully underweight these stocks given their relatively high valuations, which dampened performance. |
• | The largest detractors at the stock level were health care companiesArray BioPharma Inc. andNovocure Ltd., and information technology companyTrade Desk, Inc. (Class A shares). |
Current outlook
While the US stock market has remained buoyant, with most indexes having risen well into positive territory in 2019 through the end of the reporting period, the gulf in performance
14 | Visit our website at pgiminvestments.com |
between cheap and expensive stocks has continued to be quite wide across the market-cap spectrum, with higher-valued stocks generally faring much better than lower-valued stocks. Accordingly, the Fund’s focus on lower-valued stocks has been a headwind in recent quarters, particularly in the growth arena where many of the better-performing stocks have been trading at especially high valuations. As this disparity in performance and valuation has persisted, the Fund has continued to tilt toward these more attractively valued stocks while maintaining a quality focus through its heavier weight in companies with higher profitability. QMA believes this positioning in more reasonably valued, higher-quality stocks—which have been out of favor in recent quarters—will provide significant opportunity for improved performance going forward.
The percentage points shown in the tables below identify each security’s positive or negative contribution to the Fund’s return relative to the benchmark’s return during the reporting period.
Top Relative Contributors (%) | Top Relative Detractors (%) | |||||
Stamps.com | 0.19 | Array BioPharma | –0.60 | |||
Odonate Therapeutics | 0.18 | Novocure | –0.37 | |||
TeleNav | 0.16 | Trade Desk, Class A | –0.32 | |||
HealthEquity | 0.15 | Coupa Software | –0.31 | |||
Telaria | 0.15 | Zafgen | –0.20 |
PGIM QMA Strategic Alpha ETFs | 15 |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 8/31/19 | ||
Since Inception (%) | ||
Net Asset Value (NAV) | –5.39 (11/13/18) | |
Market Price* | –5.44 (11/13/18) | |
Russell 2000 Value Index | –4.14 | |
Lipper Small-Cap Value Funds Average | –5.22 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the market price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the Russell 2000 Value Index by portraying the initial account values at the commencement of operations (November 13, 2018) and the account values at the end of the current fiscal period (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on November 13, 2018, while the benchmark and the Index assume that the initial investment occurred on October 31, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
16 | Visit our website at pgiminvestments.com |
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the sale or redemption of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
Russell 2000 Value Index—The Russell 2000 Value Index is unmanaged and comprises securities in the Russell 2000 Index with a less-than-average growth orientation. Companies in this index generally have low price-to-book and price-to-earnings ratios. London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”).© LSE Group 2019. FTSE Russell is a trading name of certain of the LSE Group companies. Russell® is a trademark of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor, or endorse the content of this communication.
Lipper Small-Cap Value Funds Average—The Lipper Small-Cap Value Funds Average includes funds that invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) below Lipper’s US Diversified Equity small-cap ceiling and typically have below-average characteristics compared to the S&P SmallCap 600 Index. The S&P SmallCap 600 Index is generally considered representative of the small-cap segment of the US equity market.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
PGIM QMA Strategic Alpha ETFs | 17 |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Your Fund’s Performance(continued)
Presentation of Fund Holdings
Ten Largest Holdings expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Infinera Corp.,Communications Equipment | 0.3 | |||
Lannett Co., Inc.,Pharmaceuticals | 0.2 | |||
Achillion Pharmaceuticals, Inc.,Biotechnology | 0.2 | |||
Tower International, Inc.,Auto Components | 0.2 | |||
Anika Therapeutics, Inc.,Biotechnology | 0.2 | |||
NeoPhotonics Corp.,Semiconductors & SemiconductorEquipment | 0.2 | |||
Owens & Minor, Inc.,Health Care Providers & Services | 0.2 | |||
Cloudera, Inc.,Software | 0.2 | |||
M/I Homes, Inc.,Household Durables | 0.2 | |||
NETGEAR, Inc.,Communications Equipment | 0.2 |
Holdings reflect only long-term investments and are subject to change.
Ten Largest Industries expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Banks | 19.0 | |||
Equity Real Estate Investment Trusts (REITs) | 7.6 | |||
Thrifts & Mortgage Finance | 4.4 | |||
Machinery | 4.3 | |||
Specialty Retail | 3.8 | |||
Insurance | 3.4 | |||
Oil, Gas & Consumable Fuels | 3.1 | |||
Mortgage Real Estate Investment Trusts (REITs) | 2.8 | |||
Commercial Services & Supplies | 2.4 | |||
Semiconductors & Semiconductor Equipment | 2.4 |
Industry weightings reflect only long-term investments and are subject to change.
18 | Visit our website at pgiminvestments.com |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Strategy and Performance Overview(unaudited)
How did the Fund perform?
• | ThePGIM QMA Strategic AlphaSmall-Cap Value ETF (the Fund) returned –5.39% based on net asset value since the Fund’s inception on November 13, 2018 through the end of the reporting period on August 31, 2019, underperforming the –4.14% return of the Russell 2000 Value Index (the Index) and the –5.22% return of the LipperSmall-Cap Value Funds Average over the same period. |
What were the market conditions?
• | US equity markets moved higher during the period but exhibited increased volatility. |
• | Large-cap stocks generally outperformed their small- andmid-cap counterparts. |
• | Value stocks underperformed growth stocks across all market capitalizations. |
What worked?
• | The Fund benefited from favorable security selection in the energy and health care sectors. |
• | In health care, the Fund’s positioning within the biotechnology industry aided performance. Specifically, the Fund was helped by holdings inAdverum Biotechnologies Inc., which rose more than 300% in the period on news related to the company’s treatment for macular degeneration. In energy, good selection in the weak-performing oil, gas, and consumable fuels industry also aided returns. |
• | The Fund’s top individual contributors to relative performance were biotechnology companyAdverum, pharmaceutical companyEndo International PLC, and specialty retailerSignet Jewelers Ltd. |
What didn’t work?
• | The Fund’s relative performance was hurt most by poor selection in the financial sector and an underweight in utilities. |
• | In financials, the Fund’s positioning in insurance companies significantly detracted from relative performance, as that industry underperformed on fears of lower investment returns. |
• | Utilities were the best-performing sector in the Index, but the Fund remained underweight these stocks as valuations appeared unattractive, in QMA’s view. The largest detractors at the stock level were energy equipment companyCree, health care companyAcorda Therapeutics Inc., and financial services companyeHealth Inc. |
Current outlook
While the US stock market has remained buoyant, with most indexes having risen well into positive territory in 2019 through the end of the reporting period, the gulf in performance between cheap and expensive stocks has continued to be quite wide across themarket-cap
PGIM QMA Strategic Alpha ETFs | 19 |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Strategy and Performance Overview(continued)
spectrum, with higher-valued stocks generally faring much better than lower-valued stocks. Accordingly, the Fund’s focus on lower-valued stocks has been a headwind in recent quarters, particularly in the growth arena where many of the better-performing stocks have been trading at especially high valuations. As this disparity in performance and valuation has persisted, the Fund has continued to tilt toward these more attractively valued stocks while maintaining a quality focus through its heavier weight in companies with higher profitability. QMA believes this positioning in more reasonably valued, higher-quality stocks—which have been out of favor in recent quarters—will provide significant opportunity for improved performance going forward.
The percentage points shown in the tables below identify each security’s positive or negative contribution to the Fund’s return relative to the benchmark’s return during the reporting period.
Top Relative Contributors (%) | Top Relative Detractors (%) | |||||
Adverum Biotechnologies | 0.36 | Cree | –0.12 | |||
Endo International | 0.23 | Acorda Therapeutics | –0.11 | |||
Signet Jewelers | 0.19 | eHealth | –0.11 | |||
Southwestern Energy | 0.18 | Enphase Energy | –0.11 | |||
Telaria | 0.14 | Basic Energy Services | –0.10 |
20 | Visit our website at pgiminvestments.com |
PGIM QMA Strategic Alpha International Equity ETF
Your Fund’s Performance(unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website atpgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 8/31/19 | ||
Since Inception (%) | ||
Net Asset Value (NAV) | 1.09 (12/4/18) | |
Market Price* | 1.35 (12/4/18) | |
MSCI EAFE Index | 4.34 | |
Lipper International Multi-Cap Core Funds Average | 2.81 |
*The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund’s NAV is calculated. The first day of secondary market trading is typically several days after the date on which the Fund commenced investment operations; therefore, the NAV of the Fund is used as a proxy for the period from inception of investment operations to the first day of secondary market trading to calculate the market price returns.
Growth of a $10,000 Investment
The graph compares a $10,000 investment in the Fund with a similar investment in the MSCI EAFE Index by portraying the initial account values at the commencement of operations (December 4, 2018) and the account values at the end of the current fiscal period (August 31, 2019) as measured on a quarterly basis. The Fund assumes an initial investment on December 4, 2018, while the benchmark and the Index assume that the initial investment occurred on November 30, 2018. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested.
PGIM QMA Strategic Alpha ETFs | 21 |
PGIM QMA Strategic Alpha International Equity ETF
Your Fund’s Performance(continued)
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Source: PGIM Investments LLC and Lipper Inc.
Since inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the sale or redemption of Fund shares.
Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Market and NAV returns assume that dividends and capital gain distributions, if any, have been reinvested in the Fund at market price and NAV, respectively.
Benchmark Definitions
MSCI EAFE Index—The MSCI EAFE Index is a free-float-adjusted market capitalization index that is designed to measure the equity performance of developed markets, excluding the US & Canada.
Lipper International Multi-Cap Core Funds Average—The Lipper International Multi-Cap Core Funds Average includes funds that invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. International multi-cap core funds typically have average characteristics compared to the MSCI EAFE Index.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
22 | Visit our website at pgiminvestments.com |
Presentation of Fund Holdings
Ten Largest Holdings expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Sundrug Co. Ltd.,Food & Staples Retailing | 0.2 | |||
Shiseido Co. Ltd.,Personal Products | 0.2 | |||
Pernod Ricard SA,Beverages | 0.2 | |||
Unilever PLC,Personal Products | 0.2 | |||
SUMCO Corp.,Semiconductors & Semiconductor Equipment | 0.2 | |||
GVC Holdings PLC,Hotels, Restaurants & Leisure | 0.2 | |||
Smiths Group PLC,Industrial Conglomerates | 0.2 | |||
Smurfit Kappa Group PLC,Containers & Packaging | 0.2 | |||
Bouygues SA,Construction & Engineering | 0.2 | |||
Pandora A/S,Textiles, Apparel & Luxury Goods | 0.2 |
Holdings reflect only long-term investments and are subject to change.
Ten Largest Industries expressed as a percentage of net assets as of 8/31/19 (%) | ||||
Banks | 6.2 | |||
Machinery | 4.9 | |||
Equity Real Estate Investment Trusts (REITs) | 4.6 | |||
Pharmaceuticals | 4.6 | |||
Chemicals | 4.4 | |||
Real Estate Management & Development | 3.5 | |||
Insurance | 3.5 | |||
Diversified Telecommunication Services | 3.4 | |||
Electric Utilities | 3.3 | |||
Road & Rail | 3.0 |
Industry weightings reflect only long-term investments and are subject to change.
PGIM QMA Strategic Alpha ETFs | 23 |
PGIM QMA Strategic Alpha International Equity ETF
Strategy and Performance Overview(unaudited)
How did the Fund perform?
• | ThePGIM QMA Strategic Alpha International Equity ETF (the Fund) returned 1.09% based on net asset value since the Fund’s inception on December 4, 2018 through the end of the reporting period on August 31, 2019, underperforming the 4.34% return of the MSCI EAFE Index (the Index) and the 2.81% return of the Lipper InternationalMulti-Cap Core Funds Average over the same period. |
What were the market conditions?
• | Developed international equity markets moved higher during the reporting period, but exhibited increased levels of volatility. |
• | Large-cap stocks generally outperformed their small- and mid-cap counterparts. |
• | Value stocks underperformed growth stocks across all market capitalizations. |
What worked?
• | The Fund benefited from good relative performance in the financial and energy sectors. |
• | In the financial sector, the Fund’s meaningful underweight position in banks, which was one of the Index’s poorer-performing industries, along with good stock selection aided performance. |
• | The Fund’s focus on performance was also helped by an underweight position in energy, which was the only sector in the Index to generate a negative return during the period. The Fund’s focus on quality through its profitability measure rendered a number of the stocks in this industry unattractive. |
• | The Fund’s top individual contributors to relative performance were financial companyHSBC Holdings Plc., energy companyRoyal Dutch Shell Plc., and materials companyFortescue Metals Group Ltd. |
What didn’t work?
• | The Fund’s relative performance was hurt most by holdings in the health care and industrial sectors. |
• | In health care, the Fund’s positioning in pharmaceutical companies significantly detracted from relative performance as its focus on valuation and profitability underperformed in an environment where stocks of more-expensive, less-profitable companies performed relatively better. |
• | In industrials, the Fund exhibited poor security selection, especially among machinery and airline stocks. |
• | The largest detractors at the security level were consumer staples companyNestle S.A., information technology companyASML Holding NV, and consumer discretionary companyLVMH Moet Hennessy Louis Vuitton SE. |
24 | Visit our website at pgiminvestments.com |
Current outlook
While developed international equity markets have remained buoyant, with most indexes having risen well into positive territory in 2019 through the end of the reporting period, country-by-country returns have varied widely. In addition, the gulf in performance between cheap and expensive stocks has continued to be quite wide across the market-cap spectrum, with higher-valued stocks generally faring much better than lower-valued stocks. Accordingly, the Fund’s focus on lower-valued stocks has been a headwind in recent quarters, particularly in the growth arena, where many of the better-performing stocks have been trading at especially high valuations. As this disparity in performance and valuation has persisted, the Fund has continued to tilt toward these more attractively valued stocks while maintaining a quality focus through its heavier weight in companies with higher profitability. QMA believes that this positioning in more reasonably valued, higher-quality stocks—which have been out of favor in recent quarters—will provide significant opportunity for improved performance going forward.
The percentage points shown in the tables below identify each security’s positive or negative contribution to the Fund’s return relative to the benchmark’s return during the reporting period.
Top Relative Contributors (%) | Top Relative Detractors (%) | |||||
HSBC Holdings | 0.19 | Nestle | –0.49 | |||
Royal Dutch Shell | 0.15 | ASML Holding | –0.13 | |||
Fortescue Metals Group | 0.11 | LVMH Moet Hennessy Louis Vuitton | –0.13 | |||
Teva Pharmaceutical Industries | 0.10 | Airbus | –0.12 | |||
Siemens | 0.10 | Daiichi Sankyo Company | –0.11 |
PGIM QMA Strategic Alpha ETFs | 25 |
As a shareholder of a Fund, you incur ongoing costs, including investment management fees. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
The example is based on an investment of $1,000 held through the period ended August 31, 2019. The example is for illustrative purposes only.
Actual Expenses
The information under each column in the line entitled “Actual” on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information under each column in the line entitled “Hypothetical” on the following page provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, brokerage commissions paid on purchases and sales of Fund shares. Therefore, the ending account values and expenses paid for the period are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
26 | Visit our website at pgiminvestments.com |
PGIM QMA Strategic Alpha Large-Cap Core ETF | Beginning Account Value March 1, 2019 | Ending Account Value August 31, 2019 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,030.90 | 0.17 | % | $ | 0.87 | ||||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.35 | 0.17 | % | $ | 0.87 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF | Beginning Account Value March 1, 2019 | Ending Account Value August 31, 2019 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||
Actual | $ | 1,000.00 | $ | 928.50 | 0.29 | % | $ | 1.41 | ||||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.74 | 0.29 | % | $ | 1.48 |
PGIM QMA Strategic Alpha Small-Cap Value ETF | Beginning Account March 1, 2019 | Ending Account August 31, 2019 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||
Actual | $ | 1,000.00 | $ | 931.00 | 0.29 | % | $ | 1.41 | ||||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.74 | 0.29 | % | $ | 1.48 |
PGIM QMA Strategic Alpha International Equity ETF | Beginning Account Value March 1, 2019 | Ending Account Value August 31, 2019 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||
Actual | $ | 1,000.00 | $ | 979.60 | 0.29 | % | $ | 1.45 | ||||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.74 | 0.29 | % | $ | 1.48 |
*Fund expenses (net of fee waivers or subsidies, if any) are equal to the annualized expense ratio (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended August 31, 2019, and divided by the 365 days in the Fund’s fiscal year ended August 31, 2019 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
PGIM QMA Strategic Alpha ETFs | 27 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments
as of August 31, 2019
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.5% | ||||||||
COMMON STOCKS 99.5% | ||||||||
Aerospace & Defense 2.4% | ||||||||
Arconic, Inc. | 1,414 | $ | 36,538 | |||||
General Dynamics Corp. | 196 | 37,489 | ||||||
Huntington Ingalls Industries, Inc. | 164 | 34,276 | ||||||
L3Harris Technologies, Inc. | 171 | 36,151 | ||||||
Lockheed Martin Corp. | 95 | 36,490 | ||||||
Textron, Inc. | 790 | 35,550 | ||||||
United Technologies Corp. | 263 | 34,253 | ||||||
|
| |||||||
250,747 | ||||||||
Air Freight & Logistics 0.7% | ||||||||
Expeditors International of Washington, Inc. | 474 | 33,701 | ||||||
FedEx Corp. | 224 | 35,529 | ||||||
|
| |||||||
69,230 | ||||||||
Airlines 1.1% | ||||||||
Delta Air Lines, Inc. | 657 | 38,014 | ||||||
Southwest Airlines Co. | 719 | 37,618 | ||||||
United Airlines Holdings, Inc.* | 424 | 35,748 | ||||||
|
| |||||||
111,380 | ||||||||
Auto Components 0.3% | ||||||||
BorgWarner, Inc. | 1,080 | 35,240 | ||||||
Automobiles 0.6% | ||||||||
Ford Motor Co. | 3,877 | 35,552 | ||||||
General Motors Co. | 842 | 31,230 | ||||||
|
| |||||||
66,782 | ||||||||
Banks 3.4% | ||||||||
Bank of America Corp. | 1,223 | 33,645 | ||||||
Citigroup, Inc. | 553 | 35,586 | ||||||
Citizens Financial Group, Inc. | 1,083 | 36,540 | ||||||
Comerica, Inc. | 580 | 35,757 | ||||||
Fifth Third Bancorp | 1,300 | 34,385 | ||||||
JPMorgan Chase & Co. | 321 | 35,265 | ||||||
KeyCorp | 2,182 | 36,221 | ||||||
Regions Financial Corp. | 2,345 | 34,284 | ||||||
Wells Fargo & Co. | 737 | 34,322 | ||||||
Zions Bancorp NA | 870 | 35,748 | ||||||
|
| |||||||
351,753 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 29 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Beverages 1.8% | ||||||||
Brown-Forman Corp. (Class B Stock) | 710 | $ | 41,883 | |||||
Coca-Cola Co. (The) | 671 | 36,932 | ||||||
Molson Coors Brewing Co. (Class B Stock) | 694 | 35,644 | ||||||
Monster Beverage Corp.* | 618 | 36,258 | ||||||
PepsiCo, Inc. | 280 | 38,284 | ||||||
|
| |||||||
189,001 | ||||||||
Biotechnology 2.3% | ||||||||
Alexion Pharmaceuticals, Inc.* | 322 | 32,445 | ||||||
Amgen, Inc. | 174 | 36,300 | ||||||
Biogen, Inc.* | 155 | 34,061 | ||||||
Gilead Sciences, Inc. | 548 | 34,820 | ||||||
Incyte Corp.* | 410 | 33,546 | ||||||
Regeneron Pharmaceuticals, Inc.* | 118 | 34,226 | ||||||
Vertex Pharmaceuticals, Inc.* | 188 | 33,844 | ||||||
|
| |||||||
239,242 | ||||||||
Building Products 1.1% | ||||||||
Fortune Brands Home & Security, Inc. | 713 | 36,406 | ||||||
Johnson Controls International PLC | 905 | 38,634 | ||||||
Masco Corp. | 905 | 36,861 | ||||||
|
| |||||||
111,901 | ||||||||
Capital Markets 3.4% | ||||||||
BlackRock, Inc. (Class A Stock) | 78 | 32,960 | ||||||
Franklin Resources, Inc. | 1,258 | 33,060 | ||||||
Goldman Sachs Group, Inc. (The) | 176 | 35,888 | ||||||
Intercontinental Exchange, Inc. | 390 | 36,457 | ||||||
Invesco Ltd. | 2,221 | 34,870 | ||||||
Moody’s Corp. | 168 | 36,218 | ||||||
Morgan Stanley | 882 | 36,594 | ||||||
MSCI, Inc. (Class A Stock) | 159 | 37,306 | ||||||
S&P Global, Inc. | 139 | 36,166 | ||||||
T Rowe Price Group, Inc. | 335 | 37,058 | ||||||
|
| |||||||
356,577 | ||||||||
Chemicals 2.4% | ||||||||
Corteva, Inc. | 1,212 | 35,536 | ||||||
DuPont de Nemours, Inc. | 524 | 35,595 | ||||||
Eastman Chemical Co. | 534 | 34,908 | ||||||
Ecolab, Inc. | 173 | 35,692 | ||||||
Linde PLC (United Kingdom) | 186 | 35,137 |
See Notes to Financial Statements.
30 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Chemicals (cont’d.) | ||||||||
LyondellBasell Industries NV (Class A Stock) | 474 | $ | 36,678 | |||||
Sherwin-Williams Co. (The) | 69 | 36,346 | ||||||
|
| |||||||
249,892 | ||||||||
Commercial Services & Supplies 1.4% | ||||||||
Cintas Corp. | 135 | 35,613 | ||||||
Copart, Inc.* | 470 | 35,433 | ||||||
Republic Services, Inc. (Class A Stock) | 433 | 38,645 | ||||||
Waste Management, Inc. | 301 | 35,925 | ||||||
|
| |||||||
145,616 | ||||||||
Communications Equipment 1.6% | ||||||||
Arista Networks, Inc.* | 156 | 35,353 | ||||||
Cisco Systems, Inc. | 640 | 29,958 | ||||||
F5 Networks, Inc.* | 273 | 35,143 | ||||||
Juniper Networks, Inc. | 1,410 | 32,656 | ||||||
Motorola Solutions, Inc. | 204 | 36,906 | ||||||
|
| |||||||
170,016 | ||||||||
Construction & Engineering 0.4% | ||||||||
Jacobs Engineering Group, Inc. | 458 | 40,698 | ||||||
Construction Materials 0.3% | ||||||||
Vulcan Materials Co. | 255 | 36,019 | ||||||
Consumer Finance 1.3% | ||||||||
American Express Co. | 284 | 34,185 | ||||||
Capital One Financial Corp. | 381 | 33,003 | ||||||
Discover Financial Services | 461 | 36,866 | ||||||
Synchrony Financial | 1,041 | 33,364 | ||||||
|
| |||||||
137,418 | ||||||||
Containers & Packaging 1.0% | ||||||||
Avery Dennison Corp. | 328 | 37,907 | ||||||
Sealed Air Corp. | 868 | 34,564 | ||||||
Westrock Co. | 1,036 | 35,410 | ||||||
|
| |||||||
107,881 | ||||||||
Distributors 0.7% | ||||||||
Genuine Parts Co. | 359 | 32,414 | ||||||
LKQ Corp.* | 1,416 | 37,198 | ||||||
|
| |||||||
69,612 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 31 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Diversified Consumer Services 0.3% | ||||||||
H&R Block, Inc. | 1,292 | $ | 31,292 | |||||
Diversified Financial Services 0.7% | ||||||||
Berkshire Hathaway, Inc. (Class B Stock)* | 181 | 36,817 | ||||||
Jefferies Financial Group, Inc. | 1,887 | 35,174 | ||||||
|
| |||||||
71,991 | ||||||||
Diversified Telecommunication Services 1.1% | ||||||||
AT&T, Inc. | 1,077 | 37,975 | ||||||
CenturyLink, Inc. | 3,127 | 35,585 | ||||||
Verizon Communications, Inc. | 629 | 36,583 | ||||||
|
| |||||||
110,143 | ||||||||
Electric Utilities 2.5% | ||||||||
Duke Energy Corp. | 377 | 34,963 | ||||||
Entergy Corp. | 333 | 37,576 | ||||||
Exelon Corp. | 788 | 37,241 | ||||||
FirstEnergy Corp. | 812 | 37,352 | ||||||
PPL Corp. | 1,130 | 33,392 | ||||||
Southern Co. (The) | 685 | 39,908 | ||||||
Xcel Energy, Inc. | 584 | 37,504 | ||||||
|
| |||||||
257,936 | ||||||||
Electrical Equipment 1.0% | ||||||||
AMETEK, Inc. | 412 | 35,403 | ||||||
Eaton Corp. PLC | 434 | 35,032 | ||||||
Emerson Electric Co. | 606 | 36,112 | ||||||
|
| |||||||
106,547 | ||||||||
Electronic Equipment, Instruments & Components 0.4% | ||||||||
Keysight Technologies, Inc.* | 414 | 40,100 | ||||||
Energy Equipment & Services 0.7% | ||||||||
National Oilwell Varco, Inc. | 1,761 | 35,977 | ||||||
TechnipFMC PLC (United Kingdom) | 1,386 | 34,428 | ||||||
|
| |||||||
70,405 | ||||||||
Entertainment 1.3% | ||||||||
Activision Blizzard, Inc. | 745 | 37,697 | ||||||
Electronic Arts, Inc.* | 361 | 33,819 | ||||||
Viacom, Inc. (Class B Stock) | 1,233 | 30,800 | ||||||
Walt Disney Co. (The) | 262 | 35,962 | ||||||
|
| |||||||
138,278 |
See Notes to Financial Statements.
32 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Equity Real Estate Investment Trusts (REITs) 7.8% | ||||||||
American Tower Corp. | 163 | $ | 37,521 | |||||
Apartment Investment & Management Co. (Class A Stock) | 693 | 35,343 | ||||||
AvalonBay Communities, Inc. | 177 | 37,623 | ||||||
Boston Properties, Inc. | 258 | 33,132 | ||||||
Crown Castle International Corp. | 253 | 36,728 | ||||||
Duke Realty Corp. | 1,082 | 35,998 | ||||||
Equinix, Inc. | 66 | 36,714 | ||||||
Equity Residential | 443 | 37,549 | ||||||
Essex Property Trust, Inc. | 125 | 40,157 | ||||||
Extra Space Storage, Inc. | 302 | 36,820 | ||||||
HCP, Inc. | 1,067 | 37,036 | ||||||
Host Hotels & Resorts, Inc. | 2,175 | 34,887 | ||||||
Kimco Realty Corp. | 1,948 | 35,804 | ||||||
Mid-America Apartment Communities, Inc. | 289 | 36,611 | ||||||
Prologis, Inc. | 458 | 38,298 | ||||||
Public Storage | 139 | 36,799 | ||||||
Regency Centers Corp. | 554 | 35,739 | ||||||
SBA Communications Corp. (Class A Stock) | 138 | 36,215 | ||||||
Simon Property Group, Inc. | 231 | 34,405 | ||||||
SL Green Realty Corp. | 460 | 36,901 | ||||||
UDR, Inc. | 799 | 38,496 | ||||||
Ventas, Inc. | 503 | 36,915 | ||||||
|
| |||||||
805,691 | ||||||||
Food & Staples Retailing 1.8% | ||||||||
Costco Wholesale Corp. | 130 | 38,319 | ||||||
Kroger Co. (The) | 1,557 | 36,870 | ||||||
Sysco Corp. | 508 | 37,759 | ||||||
Walgreens Boots Alliance, Inc. | 662 | 33,888 | ||||||
Walmart, Inc. | 364 | 41,591 | ||||||
|
| |||||||
188,427 | ||||||||
Food Products 2.4% | ||||||||
Archer-Daniels-Midland Co. | 950 | 36,148 | ||||||
General Mills, Inc. | 660 | 35,508 | ||||||
Hershey Co. (The) | 231 | 36,609 | ||||||
JM Smucker Co. (The) | 290 | 30,496 | ||||||
Kellogg Co. | 599 | 37,617 | ||||||
Mondelez International, Inc. (Class A Stock) | 658 | 36,335 | ||||||
Tyson Foods, Inc. (Class A Stock) | 408 | 37,960 | ||||||
|
| |||||||
250,673 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 33 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Equipment & Supplies 5.9% |
| |||||||
Abbott Laboratories | 413 | $ | 35,237 | |||||
ABIOMED, Inc.* | 182 | 35,139 | ||||||
Baxter International, Inc. | 407 | 35,796 | ||||||
Becton Dickinson & Co. | 143 | 36,311 | ||||||
Boston Scientific Corp.* | 837 | 35,765 | ||||||
Cooper Cos., Inc. (The) | 106 | 32,833 | ||||||
Danaher Corp. | 270 | 38,364 | ||||||
DENTSPLY SIRONA, Inc. | 707 | 36,870 | ||||||
Edwards Lifesciences Corp.* | 164 | 36,382 | ||||||
Hologic, Inc.* | 748 | 36,929 | ||||||
IDEXX Laboratories, Inc.* | 128 | 37,087 | ||||||
Intuitive Surgical, Inc.* | 72 | 36,816 | ||||||
Medtronic PLC (Ireland) | 350 | 37,762 | ||||||
ResMed, Inc. | 266 | 37,054 | ||||||
Stryker Corp. | 164 | 36,188 | ||||||
Varian Medical Systems, Inc.* | 324 | 34,321 | ||||||
Zimmer Biomet Holdings, Inc. | 260 | 36,192 | ||||||
|
| |||||||
615,046 | ||||||||
Health Care Providers & Services 3.4% |
| |||||||
Anthem, Inc. | 126 | 32,952 | ||||||
Cardinal Health, Inc. | 803 | 34,633 | ||||||
Centene Corp.* | 715 | 33,333 | ||||||
Cigna Corp. | 212 | 32,642 | ||||||
CVS Health Corp. | 599 | 36,491 | ||||||
Henry Schein, Inc.* | 576 | 35,493 | ||||||
Humana, Inc. | 118 | 33,419 | ||||||
Laboratory Corp. of America Holdings* | 238 | 39,879 | ||||||
Quest Diagnostics, Inc. | 353 | 36,137 | ||||||
UnitedHealth Group, Inc. | 154 | 36,036 | ||||||
|
| |||||||
351,015 | ||||||||
Health Care Technology 0.4% |
| |||||||
Cerner Corp. | 533 | 36,729 | ||||||
Hotels, Restaurants & Leisure 1.4% |
| |||||||
Carnival Corp. | 781 | 34,426 | ||||||
McDonald’s Corp. | 178 | 38,799 | ||||||
Royal Caribbean Cruises Ltd. | 329 | 34,308 | ||||||
Yum! Brands, Inc. | 306 | 35,735 | ||||||
|
| |||||||
143,268 |
See Notes to Financial Statements.
34 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Household Durables 1.8% |
| |||||||
DR Horton, Inc. | 802 | $ | 39,675 | |||||
Garmin Ltd. (Switzerland) | 453 | 36,951 | ||||||
Lennar Corp. (Class A Stock) | 683 | 34,833 | ||||||
Mohawk Industries, Inc.* | 313 | 37,212 | ||||||
PulteGroup, Inc. | 1,137 | 38,431 | ||||||
|
| |||||||
187,102 | ||||||||
Household Products 1.1% |
| |||||||
Colgate-Palmolive Co. | 499 | 37,001 | ||||||
Kimberly-Clark Corp. | 257 | 36,265 | ||||||
Procter & Gamble Co. (The) | 306 | 36,790 | ||||||
|
| |||||||
110,056 | ||||||||
Independent Power & Renewable Electricity Producers 0.7% |
| |||||||
AES Corp. | 2,271 | 34,814 | ||||||
NRG Energy, Inc. | 1,037 | 37,747 | ||||||
|
| |||||||
72,561 | ||||||||
Industrial Conglomerates 1.0% |
| |||||||
3M Co. | 218 | 35,255 | ||||||
General Electric Co. | 3,839 | 31,671 | ||||||
Honeywell International, Inc. | 219 | 36,052 | ||||||
|
| |||||||
102,978 | ||||||||
Insurance 4.4% |
| |||||||
Aflac, Inc. | 682 | 34,223 | ||||||
Allstate Corp. (The) | 367 | 37,577 | ||||||
American International Group, Inc. | 639 | 33,254 | ||||||
Aon PLC (United Kingdom) | 188 | 36,632 | ||||||
Chubb Ltd. (Switzerland) | 226 | 35,319 | ||||||
Cincinnati Financial Corp. | 324 | 36,447 | ||||||
Everest Re Group Ltd. | 142 | 33,495 | ||||||
Loews Corp. | 707 | 33,985 | ||||||
Marsh & McLennan Cos., Inc. | 362 | 36,160 | ||||||
MetLife, Inc. | 795 | 35,218 | ||||||
Progressive Corp. (The) | 462 | 35,020 | ||||||
Unum Group | 1,285 | 32,652 | ||||||
Willis Towers Watson PLC (United Kingdom) | 184 | 36,426 | ||||||
|
| |||||||
456,408 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 35 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Interactive Media & Services 1.1% |
| |||||||
Alphabet, Inc., |
| |||||||
(Class A Stock)* | 31 | $ | 36,907 | |||||
(Class C Stock)* | 32 | 38,019 | ||||||
Facebook, Inc. (Class A Stock)* | 191 | 35,463 | ||||||
|
| |||||||
110,389 | ||||||||
Internet & Direct Marketing Retail 1.1% |
| |||||||
Booking Holdings, Inc.* | 20 | 39,328 | ||||||
eBay, Inc. | 941 | 37,913 | ||||||
Expedia Group, Inc. | 286 | 37,209 | ||||||
|
| |||||||
114,450 | ||||||||
IT Services 2.9% |
| |||||||
Accenture PLC (Ireland) (Class A Stock) | 196 | 38,841 | ||||||
Broadridge Financial Solutions, Inc. | 283 | 36,631 | ||||||
Cognizant Technology Solutions Corp. (Class A Stock) | 581 | 35,668 | ||||||
International Business Machines Corp. | 264 | 35,780 | ||||||
Leidos Holdings, Inc. | 426 | 37,215 | ||||||
Mastercard, Inc. (Class A Stock) | 143 | 40,236 | ||||||
VeriSign, Inc.* | 183 | 37,305 | ||||||
Visa, Inc. (Class A Stock) | 219 | 39,600 | ||||||
|
| |||||||
301,276 | ||||||||
Life Sciences Tools & Services 1.7% |
| |||||||
Agilent Technologies, Inc. | 530 | 37,688 | ||||||
IQVIA Holdings, Inc.* | 229 | 35,529 | ||||||
Mettler-Toledo International, Inc.* | 49 | 32,183 | ||||||
PerkinElmer, Inc. | 437 | 36,140 | ||||||
Thermo Fisher Scientific, Inc. | 129 | 37,031 | ||||||
|
| |||||||
178,571 | ||||||||
Machinery 2.3% |
| |||||||
Caterpillar, Inc. | 302 | 35,938 | ||||||
Cummins, Inc. | 237 | 35,377 | ||||||
Dover Corp. | 365 | 34,215 | ||||||
Ingersoll-Rand PLC | 291 | 35,237 | ||||||
PACCAR, Inc. | 554 | 36,320 | ||||||
Pentair PLC (United Kingdom) | 882 | 31,682 | ||||||
Stanley Black & Decker, Inc. | 240 | 31,886 | ||||||
|
| |||||||
240,655 |
See Notes to Financial Statements.
36 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Media 2.0% |
| |||||||
CBS Corp. (Class B Stock) | 737 | $ | 30,998 | |||||
Comcast Corp. (Class A Stock) | 898 | 39,746 | ||||||
Discovery, Inc. (Class C Stock)* | 1,312 | 34,151 | ||||||
Fox Corp., | ||||||||
(Class A Stock) | 1,024 | 33,966 | ||||||
(Class B Stock) | 1,025 | 33,620 | ||||||
Interpublic Group of Cos, Inc. (The) | 1,725 | 34,293 | ||||||
|
| |||||||
206,774 | ||||||||
Metals & Mining 0.7% |
| |||||||
Newmont Goldcorp Corp. | 953 | 38,015 | ||||||
Nucor Corp. | 715 | 35,021 | ||||||
|
| |||||||
73,036 | ||||||||
Multiline Retail 1.2% |
| |||||||
Dollar General Corp. | 287 | 44,798 | ||||||
Macy’s, Inc. | 1,854 | 27,365 | ||||||
Target Corp. | 465 | 49,773 | ||||||
|
| |||||||
121,936 | ||||||||
Multi-Utilities 2.5% |
| |||||||
CenterPoint Energy, Inc. | 1,282 | 35,499 | ||||||
Consolidated Edison, Inc. | 458 | 40,716 | ||||||
Dominion Energy, Inc. | 482 | 37,418 | ||||||
DTE Energy Co. | 280 | 36,305 | ||||||
NiSource, Inc. | 1,298 | 38,356 | ||||||
Public Service Enterprise Group, Inc. | 648 | 39,184 | ||||||
Sempra Energy | 261 | 36,965 | ||||||
|
| |||||||
264,443 | ||||||||
Oil, Gas & Consumable Fuels 3.4% |
| |||||||
Chevron Corp. | 297 | 34,963 | ||||||
ConocoPhillips | 666 | 34,752 | ||||||
Devon Energy Corp. | 1,519 | 33,403 | ||||||
Exxon Mobil Corp. | 509 | 34,856 | ||||||
HollyFrontier Corp. | 745 | 33,048 | ||||||
Kinder Morgan, Inc. | 1,750 | 35,472 | ||||||
Occidental Petroleum Corp. | 802 | 34,871 | ||||||
ONEOK, Inc. | 515 | 36,709 | ||||||
Phillips 66 | 387 | 38,170 | ||||||
Pioneer Natural Resources Co. | 280 | 34,558 | ||||||
|
| |||||||
350,802 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 37 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Personal Products 0.4% |
| |||||||
Estee Lauder Cos., Inc. (The) (Class A Stock) | 209 | $ | 41,380 | |||||
Pharmaceuticals 2.0% |
| |||||||
Bristol-Myers Squibb Co. | 763 | 36,677 | ||||||
Eli Lilly & Co. | 301 | 34,004 | ||||||
Johnson & Johnson | 255 | 32,732 | ||||||
Merck & Co., Inc. | 426 | 36,836 | ||||||
Pfizer, Inc. | 1,019 | 36,226 | ||||||
Zoetis, Inc. (Class A Stock) | 288 | 36,409 | ||||||
|
| |||||||
212,884 | ||||||||
Professional Services 0.7% |
| |||||||
Nielsen Holdings PLC | 1,687 | 35,022 | ||||||
Robert Half International, Inc. | 634 | 33,900 | ||||||
|
| |||||||
68,922 | ||||||||
Real Estate Management & Development 0.4% |
| |||||||
CBRE Group, Inc. (Class A Stock)* | 737 | 38,523 | ||||||
Road & Rail 0.7% |
| |||||||
JB Hunt Transport Services, Inc. | 355 | 38,354 | ||||||
Kansas City Southern | 291 | 36,608 | ||||||
|
| |||||||
74,962 | ||||||||
Semiconductors & Semiconductor Equipment 2.1% |
| |||||||
Applied Materials, Inc. | 820 | 39,377 | ||||||
Intel Corp. | 766 | 36,316 | ||||||
Lam Research Corp. | 175 | 36,839 | ||||||
Maxim Integrated Products, Inc. | 664 | 36,215 | ||||||
Qorvo, Inc.* | 470 | 33,572 | ||||||
Texas Instruments, Inc. | 291 | 36,011 | ||||||
|
| |||||||
218,330 | ||||||||
Software 2.5% | ||||||||
ANSYS, Inc.* | 185 | 38,214 | ||||||
Cadence Design Systems, Inc.* | 519 | 35,541 | ||||||
Citrix Systems, Inc. | 389 | 36,169 | ||||||
Intuit, Inc. | 129 | 37,198 | ||||||
Microsoft Corp. | 278 | 38,325 | ||||||
Oracle Corp. | 648 | 33,735 | ||||||
Synopsys, Inc.* | 296 | 41,976 | ||||||
|
| |||||||
261,158 |
See Notes to Financial Statements.
38 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Specialty Retail 1.7% | ||||||||
AutoZone, Inc.* | 34 | $ | 37,457 | |||||
Best Buy Co., Inc. | 481 | 30,616 | ||||||
Home Depot, Inc. (The) | 172 | 39,200 | ||||||
Ross Stores, Inc. | 371 | 39,330 | ||||||
Ulta Beauty, Inc.* | 107 | 25,437 | ||||||
|
| |||||||
172,040 | ||||||||
Technology Hardware, Storage & Peripherals 1.4% | ||||||||
Apple, Inc. | 169 | 35,277 | ||||||
Hewlett Packard Enterprise Co. | 2,679 | 37,024 | ||||||
Seagate Technology PLC | 791 | 39,716 | ||||||
Xerox Holdings Corp. | 1,266 | 36,701 | ||||||
|
| |||||||
148,718 | ||||||||
Textiles, Apparel & Luxury Goods 1.7% | ||||||||
NIKE, Inc. (Class B Stock) | 450 | 38,025 | ||||||
PVH Corp. | 480 | 36,384 | ||||||
Ralph Lauren Corp. (Class A Stock) | 384 | 33,923 | ||||||
Tapestry, Inc. | 1,344 | 27,754 | ||||||
VF Corp. | 433 | 35,484 | ||||||
|
| |||||||
171,570 | ||||||||
Tobacco 0.3% | ||||||||
Altria Group, Inc. | 767 | 33,549 | ||||||
Water Utilities 0.4% | ||||||||
American Water Works Co., Inc. | 295 | 37,559 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 10,327,578 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 0.3% | ||||||||
AFFILIATED MUTUAL FUND 0.0% | ||||||||
PGIM Institutional Money Market Fund (cost $5)(w) | 5 | 5 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 39 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
TIME DEPOSIT 0.3% | ||||||||||||||||
Sumitomo Mitsui Banking Corp. (cost $33,685) | 1.490 | % | 09/03/19 | 34 | $ | 33,685 | ||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM TERM INVESTMENTS | 33,690 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 99.8% | 10,361,268 | |||||||||||||||
Other assets in excess of liabilities 0.2% | 18,476 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 10,379,744 | ||||||||||||||
|
|
The following abbreviations are used in the annual report:
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Institutional Money Market Fund. |
* | Non-income producing security. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Aerospace & Defense | $ | 250,747 | $ | — | $ | — | ||||||
Air Freight & Logistics | 69,230 | — | — | |||||||||
Airlines | 111,380 | — | — | |||||||||
Auto Components | 35,240 | — | — | |||||||||
Automobiles | 66,782 | — | — | |||||||||
Banks | 351,753 | — | — | |||||||||
Beverages | 189,001 | — | — | |||||||||
Biotechnology | 239,242 | — | — |
See Notes to Financial Statements.
40 |
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Building Products | $ | 111,901 | $ | — | $ | — | ||||||
Capital Markets | 356,577 | — | — | |||||||||
Chemicals | 249,892 | — | — | |||||||||
Commercial Services & Supplies | 145,616 | — | — | |||||||||
Communications Equipment | 170,016 | — | — | |||||||||
Construction & Engineering | 40,698 | — | — | |||||||||
Construction Materials | 36,019 | — | — | |||||||||
Consumer Finance | 137,418 | — | — | |||||||||
Containers & Packaging | 107,881 | — | — | |||||||||
Distributors | 69,612 | — | — | |||||||||
Diversified Consumer Services | 31,292 | — | — | |||||||||
Diversified Financial Services | 71,991 | — | — | |||||||||
Diversified Telecommunication Services | 110,143 | — | — | |||||||||
Electric Utilities | 257,936 | — | — | |||||||||
Electrical Equipment | 106,547 | — | — | |||||||||
Electronic Equipment, Instruments & Components | 40,100 | — | — | |||||||||
Energy Equipment & Services | 70,405 | — | — | |||||||||
Entertainment | 138,278 | — | — | |||||||||
Equity Real Estate Investment Trusts (REITs) | 805,691 | — | — | |||||||||
Food & Staples Retailing | 188,427 | — | — | |||||||||
Food Products | 250,673 | — | — | |||||||||
Health Care Equipment & Supplies | 615,046 | — | — | |||||||||
Health Care Providers & Services | 351,015 | — | — | |||||||||
Health Care Technology | 36,729 | — | — | |||||||||
Hotels, Restaurants & Leisure | 143,268 | — | — | |||||||||
Household Durables | 187,102 | — | — | |||||||||
Household Products | 110,056 | — | — | |||||||||
Independent Power & Renewable Electricity Producers | 72,561 | — | — | |||||||||
Industrial Conglomerates | 102,978 | — | — | |||||||||
Insurance | 456,408 | — | — | |||||||||
Interactive Media & Services | 110,389 | — | — | |||||||||
Internet & Direct Marketing Retail | 114,450 | — | — | |||||||||
IT Services | 301,276 | — | — | |||||||||
Life Sciences Tools & Services | 178,571 | — | — | |||||||||
Machinery | 240,655 | — | — | |||||||||
Media | 206,774 | — | — | |||||||||
Metals & Mining | 73,036 | — | — | |||||||||
Multiline Retail | 121,936 | — | — | |||||||||
Multi-Utilities | 264,443 | — | — | |||||||||
Oil, Gas & Consumable Fuels | 350,802 | — | — |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 41 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Schedule of Investments (continued)
as of August 31, 2019
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Personal Products | $ | 41,380 | $ | — | $ | — | ||||||
Pharmaceuticals | 212,884 | — | — | |||||||||
Professional Services | 68,922 | — | — | |||||||||
Real Estate Management & Development | 38,523 | — | — | |||||||||
Road & Rail | 74,962 | — | — | |||||||||
Semiconductors & Semiconductor Equipment | 218,330 | — | — | |||||||||
Software | 261,158 | — | — | |||||||||
Specialty Retail | 172,040 | — | — | |||||||||
Technology Hardware, Storage & Peripherals | 148,718 | — | — | |||||||||
Textiles, Apparel & Luxury Goods | 171,570 | — | — | |||||||||
Tobacco | 33,549 | — | — | |||||||||
Water Utilities | 37,559 | — | — | |||||||||
Affiliated Mutual Fund | 5 | — | — | |||||||||
Time Deposit | — | 33,685 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 10,327,583 | $ | 33,685 | $ | — | ||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows (unaudited):
Equity Real Estate Investment Trusts (REITs) | 7.8 | % | ||
Health Care Equipment & Supplies | 5.9 | |||
Insurance | 4.4 | |||
Capital Markets | 3.4 | |||
Banks | 3.4 | |||
Health Care Providers & Services | 3.4 | |||
Oil, Gas & Consumable Fuels | 3.4 | |||
IT Services | 2.9 | |||
Multi-Utilities | 2.5 | |||
Software | 2.5 | |||
Electric Utilities | 2.5 | |||
Aerospace & Defense | 2.4 | |||
Chemicals | 2.4 | |||
Food Products | 2.4 | |||
Machinery | 2.3 | |||
Biotechnology | 2.3 | |||
Semiconductors & Semiconductor Equipment | 2.1 | |||
Pharmaceuticals | 2.0 | |||
Media | 2.0 | |||
Beverages | 1.8 | |||
Food & Staples Retailing | 1.8 | |||
Household Durables | 1.8 | |||
Life Sciences Tools & Services | 1.7 | |||
Specialty Retail | 1.7 | |||
Textiles, Apparel & Luxury Goods | 1.7 | % | ||
Communications Equipment | 1.6 | |||
Technology Hardware, Storage & Peripherals | 1.4 | |||
Commercial Services & Supplies | 1.4 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Entertainment | 1.3 | |||
Consumer Finance | 1.3 | |||
Multiline Retail | 1.2 | |||
Internet & Direct Marketing Retail | 1.1 | |||
Building Products | 1.1 | |||
Airlines | 1.1 | |||
Interactive Media & Services | 1.1 | |||
Diversified Telecommunication Services | 1.1 | |||
Household Products | 1.1 | |||
Containers & Packaging | 1.0 | |||
Electrical Equipment | 1.0 | |||
Industrial Conglomerates | 1.0 | |||
Road & Rail | 0.7 | |||
Metals & Mining | 0.7 | |||
Independent Power & Renewable Electricity Producers | 0.7 | |||
Diversified Financial Services | 0.7 | |||
Energy Equipment & Services | 0.7 | |||
Distributors | 0.7 |
See Notes to Financial Statements.
42 |
Industry Classification (cont’d.) | ||||
Air Freight & Logistics | 0.7 | % | ||
Professional Services | 0.7 | |||
Automobiles | 0.6 | |||
Personal Products | 0.4 | |||
Construction & Engineering | 0.4 | |||
Electronic Equipment, Instruments & Components | 0.4 | |||
Real Estate Management & Development | 0.4 | |||
Water Utilities | 0.4 | |||
Health Care Technology | 0.4 | |||
Construction Materials | 0.3 | |||
Auto Components | 0.3 | % | ||
Time Deposit | 0.3 | |||
Tobacco | 0.3 | |||
Diversified Consumer Services | 0.3 | |||
Affiliated Mutual Fund | 0.0 | * | ||
|
| |||
99.8 | ||||
Other assets in excess of liabilities | 0.2 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05%. |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 43 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $10,143,214) | $ | 10,361,263 | ||
Affiliated investments (cost $5) | 5 | |||
Cash | 82 | |||
Interest and dividends receivable | 19,884 | |||
|
| |||
Total assets | 10,381,234 | |||
|
| |||
Liabilities | ||||
Management fee payable | 1,490 | |||
|
| |||
Total Liabilities | 1,490 | |||
|
| |||
Net Assets | $ | 10,379,744 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 200 | ||
Paid-in capital in excess of par | 10,206,445 | |||
|
| |||
10,206,645 | ||||
Total distributable earnings (loss) | 173,099 | |||
|
| |||
Net assets, August 31, 2019 | $ | 10,379,744 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 51.90 | ||
|
|
See Notes to Financial Statements.
44 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Statement of Operations
Period Ended August 31, 2019*
Net Investment Income (Loss) |
| |||
Income |
| |||
Interest income | $ | 2,444 | ||
Unaffiliated dividend income (net of $541 foreign withholding tax) | 212,268 | |||
Income from securities lending, net (including affiliated income of $5) | 5 | |||
|
| |||
Total income | 214,717 | |||
|
| |||
Expenses | ||||
Management fee | 16,536 | |||
|
| |||
Total expenses | 16,536 | |||
|
| |||
Net investment income (loss) | 198,181 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments |
| |||
Net realized gain (loss) on: |
| |||
Investment transactions (including affiliated of $3) | (92,034 | ) | ||
In-kind redemptions | 269,529 | |||
|
| |||
177,495 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 218,049 | |||
|
| |||
Net gain (loss) on investment transactions | 395,544 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 593,725 | ||
|
|
* | For the period from October 17, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 45 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Statement of Changes in Net Assets
Period Ended August 31, 2019* | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 198,181 | ||
Net realized gain (loss) on investments andin-kind redemptions | 177,495 | |||
Net change in unrealized appreciation (depreciation) on investments | 218,049 | |||
|
| |||
Net increase (decrease) in net assets resulting from operations | 593,725 | |||
|
| |||
Dividends and Distributions | ||||
Distributions from distributable earnings | (150,716 | ) | ||
|
| |||
Fund share transactions (Net of share conversions) | ||||
Net proceeds from shares sold | 15,004,125 | |||
Cost of shares reacquired | (5,067,390 | ) | ||
|
| |||
Net increase (decrease) in net assets from Fund share transactions | 9,936,735 | |||
|
| |||
Total increase (decrease) | 10,379,744 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 10,379,744 | ||
|
|
* | For the period from October 17, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
46 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments
as of August 31, 2019
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.7% | ||||||||
COMMON STOCKS 99.7% | ||||||||
Aerospace & Defense 1.2% |
| |||||||
Astronics Corp.* | 441 | $ | 12,132 | |||||
Cubic Corp. | 263 | 18,218 | ||||||
Ducommun, Inc.* | 388 | 15,978 | ||||||
Mercury Systems, Inc.* | 257 | 22,007 | ||||||
Moog, Inc. (Class A Stock) | 179 | 14,544 | ||||||
Parsons Corp.* | 480 | 16,329 | ||||||
Wesco Aircraft Holdings, Inc.* | 1,616 | 17,776 | ||||||
|
| |||||||
116,984 | ||||||||
Air Freight & Logistics 0.3% |
| |||||||
Forward Air Corp. | 272 | 16,946 | ||||||
Radiant Logistics, Inc.* | 3,025 | 14,762 | ||||||
|
| |||||||
31,708 | ||||||||
Airlines 0.4% |
| |||||||
Allegiant Travel Co. (Class A Stock) | 120 | 17,039 | ||||||
Mesa Air Group, Inc.* | 1,844 | 11,912 | ||||||
Spirit Airlines, Inc.* | 340 | 12,764 | ||||||
|
| |||||||
41,715 | ||||||||
Auto Components 0.5% |
| |||||||
Fox Factory Holding Corp.* | 214 | 15,416 | ||||||
Gentherm, Inc.* | 438 | 16,075 | ||||||
Standard Motor Products, Inc. | 393 | 17,414 | ||||||
|
| |||||||
48,905 | ||||||||
Automobiles 0.2% |
| |||||||
Winnebago Industries, Inc. | 469 | 15,017 | ||||||
Banks 4.2% |
| |||||||
Bank of NT Butterfield & Son Ltd. (The) (Bermuda) | 523 | 14,414 | ||||||
Baycom Corp.* | 764 | 16,884 | ||||||
Cambridge Bancorp | 207 | 15,306 | ||||||
Coastal Financial Corp.* | 1,154 | 17,045 | ||||||
ConnectOne Bancorp, Inc. | 783 | 16,036 | ||||||
Eagle Bancorp, Inc. | 325 | 13,240 | ||||||
Esquire Financial Holdings, Inc.* | 709 | 16,661 | ||||||
FB Financial Corp. | 478 | 17,146 | ||||||
First Foundation, Inc. | 1,260 | 17,590 | ||||||
Hanmi Financial Corp. | 779 | 13,952 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 47 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Banks (cont’d.) |
| |||||||
HarborOne Bancorp, Inc.* | 1,667 | $ | 16,603 | |||||
HomeTrust Bancshares, Inc. | 697 | 17,578 | ||||||
Independent Bank Corp. | 727 | 14,126 | ||||||
Independent Bank Group, Inc. | 297 | 14,526 | ||||||
Investar Holding Corp. | 732 | 16,997 | ||||||
Midland States Bancorp, Inc. | 622 | 16,029 | ||||||
National Bank Holdings Corp. (Class A Stock) | 468 | 15,276 | ||||||
Preferred Bank | 361 | 18,036 | ||||||
Seacoast Banking Corp. of Florida* | 690 | 16,105 | ||||||
Stock Yards Bancorp, Inc. | 458 | 16,625 | ||||||
TriState Capital Holdings, Inc.* | 746 | 14,733 | ||||||
Triumph Bancorp, Inc.* | 609 | 18,264 | ||||||
United Community Banks, Inc. | 638 | 16,850 | ||||||
Veritex Holdings, Inc. | 685 | 16,166 | ||||||
West Bancorporation, Inc. | 822 | 17,130 | ||||||
|
| |||||||
403,318 | ||||||||
Beverages 0.6% |
| |||||||
Boston Beer Co., Inc. (The) (Class A Stock)* | 46 | 20,167 | ||||||
Coca-Cola Consolidated, Inc. | 57 | 19,187 | ||||||
National Beverage Corp. | 392 | 16,033 | ||||||
|
| |||||||
55,387 | ||||||||
Biotechnology 9.5% |
| |||||||
ACADIA Pharmaceuticals, Inc.* | 657 | 18,173 | ||||||
Aduro Biotech, Inc.* | 11,796 | 14,509 | ||||||
Albireo Pharma, Inc.* | 556 | 13,594 | ||||||
Aldeyra Therapeutics, Inc.* | 2,958 | 13,045 | ||||||
Allogene Therapeutics, Inc.* | 659 | 17,945 | ||||||
Amicus Therapeutics, Inc.* | 1,506 | 14,894 | ||||||
AnaptysBio, Inc.* | 322 | 13,089 | ||||||
Arena Pharmaceuticals, Inc.* | 294 | 15,550 | ||||||
Audentes Therapeutics, Inc.* | 492 | 15,301 | ||||||
Avrobio, Inc.* | 1,174 | 22,870 | ||||||
BioSpecifics Technologies Corp.* | 295 | 16,249 | ||||||
Calyxt, Inc.* | 1,647 | 10,195 | ||||||
CASI Pharmaceuticals, Inc.* | 5,819 | 18,970 | ||||||
CytomX Therapeutics, Inc.* | 1,590 | 13,960 | ||||||
Deciphera Pharmaceuticals, Inc.* | 781 | 28,335 | ||||||
Denali Therapeutics, Inc.* | 881 | 15,858 | ||||||
Eagle Pharmaceuticals, Inc.* | 317 | 17,876 | ||||||
Eiger BioPharmaceuticals, Inc.* | 1,540 | 16,786 |
See Notes to Financial Statements.
48 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Biotechnology (cont’d.) |
| |||||||
Emergent BioSolutions, Inc.* | 400 | $ | 17,520 | |||||
Enanta Pharmaceuticals, Inc.* | 206 | 14,533 | ||||||
Esperion Therapeutics, Inc.* | 378 | 13,850 | ||||||
Flexion Therapeutics, Inc.* | 1,622 | 21,362 | ||||||
G1 Therapeutics, Inc.* | 659 | 23,922 | ||||||
Genomic Health, Inc.* | 308 | 23,611 | ||||||
GlycoMimetics, Inc.* | 1,341 | 4,466 | ||||||
Gossamer Bio, Inc.* | 868 | 18,193 | ||||||
Halozyme Therapeutics, Inc.* | 1,029 | 16,999 | ||||||
Intellia Therapeutics, Inc.* | 1,120 | 15,893 | ||||||
Invitae Corp.* | 740 | 17,952 | ||||||
Kiniksa Pharmaceuticals Ltd. (Class A Stock)* | 1,257 | 11,099 | ||||||
Kura Oncology, Inc.* | 885 | 13,434 | ||||||
Ligand Pharmaceuticals, Inc.* | 151 | 13,727 | ||||||
LogicBio Therapeutics, Inc.* | 1,596 | 15,960 | ||||||
Madrigal Pharmaceuticals, Inc.* | 176 | 16,315 | ||||||
MEI Pharma, Inc.* | 7,675 | 13,124 | ||||||
Millendo Therapeutics, Inc.* | 1,434 | 8,690 | ||||||
Minerva Neurosciences, Inc.* | 2,699 | 19,271 | ||||||
Molecular Templates, Inc.* | 2,359 | 11,866 | ||||||
Momenta Pharmaceuticals, Inc.* | 1,493 | 18,857 | ||||||
Myriad Genetics, Inc.* | 646 | 15,200 | ||||||
Principia Biopharma, Inc.* | 460 | 18,262 | ||||||
PTC Therapeutics, Inc.* | 404 | 18,006 | ||||||
Repligen Corp.* | 208 | 19,304 | ||||||
Retrophin, Inc.* | 794 | 9,996 | ||||||
Rhythm Pharmaceuticals, Inc.* | 803 | 18,084 | ||||||
Rocket Pharmaceuticals, Inc.* | 1,338 | 14,517 | ||||||
Sangamo Therapeutics, Inc.* | 1,525 | 16,623 | ||||||
Savara, Inc.* | 6,607 | 14,932 | ||||||
Spectrum Pharmaceuticals, Inc.* | 2,104 | 15,443 | ||||||
Synthorx, Inc.* | 1,203 | 21,546 | ||||||
UroGen Pharma Ltd.* | 511 | 17,348 | ||||||
Vanda Pharmaceuticals, Inc.* | 1,300 | 18,317 | ||||||
Veracyte, Inc.* | 632 | 16,748 | ||||||
Viking Therapeutics, Inc.(a)* | 1,968 | 13,678 | ||||||
Xencor, Inc.* | 405 | 15,098 | ||||||
Y-mAbs Therapeutics, Inc.* | 779 | 20,698 | ||||||
|
| |||||||
911,643 | ||||||||
Building Products 2.1% |
| |||||||
AAON, Inc. | 352 | 16,885 | ||||||
Advanced Drainage Systems, Inc. | 538 | 16,888 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 49 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Building Products (cont’d.) |
| |||||||
American Woodmark Corp.* | 213 | $ | 17,545 | |||||
Apogee Enterprises, Inc. | 437 | 16,138 | ||||||
Builders FirstSource, Inc.* | 1,033 | 20,092 | ||||||
Continental Building Products, Inc.* | 673 | 16,919 | ||||||
CSW Industrials, Inc. | 256 | 17,462 | ||||||
JELD-WEN Holding, Inc.* | 785 | 13,549 | ||||||
Masonite International Corp.* | 301 | 16,070 | ||||||
Patrick Industries, Inc.* | 383 | 13,842 | ||||||
PGT Innovations, Inc.* | 1,036 | 16,576 | ||||||
Universal Forest Products, Inc. | 470 | 18,377 | ||||||
|
| |||||||
200,343 | ||||||||
Capital Markets 2.4% |
| |||||||
Artisan Partners Asset Management, Inc. (Class A Stock) | 664 | 17,689 | ||||||
Blucora, Inc.* | 630 | 14,226 | ||||||
Cohen & Steers, Inc. | 339 | 18,282 | ||||||
Cowen, Inc. (Class A Stock)* | 1,050 | 16,391 | ||||||
Diamond Hill Investment Group, Inc. | 128 | 17,267 | ||||||
GAMCO Investors, Inc. (Class A Stock) | 876 | 15,479 | ||||||
Houlihan Lokey, Inc. (Class A Stock) | 401 | 17,716 | ||||||
Ladenburg Thalmann Financial Services, Inc. | 5,954 | 11,670 | ||||||
Moelis & Co. (Class A Stock) | 521 | 17,469 | ||||||
Pzena Investment Management, Inc. (Class A Stock) | 2,117 | 17,211 | ||||||
Safeguard Scientifics, Inc.* | 1,474 | 17,629 | ||||||
Silvercrest Asset Management Group, Inc. (Class A Stock) | 1,277 | 16,690 | ||||||
Virtus Investment Partners, Inc. | 167 | 17,817 | ||||||
WisdomTree Investments, Inc. | 2,871 | 13,810 | ||||||
|
| |||||||
229,346 | ||||||||
Chemicals 1.3% |
| |||||||
Balchem Corp. | 182 | 16,160 | ||||||
Chase Corp. | 174 | 17,438 | ||||||
Ferro Corp.* | 1,144 | 11,657 | ||||||
HB Fuller Co. | 376 | 16,021 | ||||||
Innospec, Inc. | 186 | 15,472 | ||||||
Orion Engineered Carbons SA (Luxembourg) | 878 | 12,213 | ||||||
PolyOne Corp. | 575 | 18,406 | ||||||
Stepan Co. | 194 | 18,506 | ||||||
|
| |||||||
125,873 |
See Notes to Financial Statements.
50 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Commercial Services & Supplies 2.9% |
| |||||||
Brady Corp. (Class A Stock) | 353 | $ | 16,665 | |||||
Casella Waste Systems, Inc. (Class A Stock)* | 434 | 19,747 | ||||||
Cimpress NV (Netherlands)* | 192 | 22,020 | ||||||
Deluxe Corp. | 431 | 19,861 | ||||||
Healthcare Services Group, Inc. | 586 | 13,214 | ||||||
Heritage-Crystal Clean, Inc.* | 667 | 16,342 | ||||||
Herman Miller, Inc. | 393 | 16,616 | ||||||
HNI Corp. | 505 | 15,751 | ||||||
Kimball International, Inc. (Class B Stock) | 1,028 | 18,041 | ||||||
Knoll, Inc. | 741 | 17,087 | ||||||
McGrath RentCorp. | 279 | 17,864 | ||||||
Mobile Mini, Inc. | 573 | 17,912 | ||||||
MSA Safety, Inc. | 154 | 16,267 | ||||||
Steelcase, Inc. (Class A Stock) | 1,013 | 15,732 | ||||||
Tetra Tech, Inc. | 215 | 17,441 | ||||||
Viad Corp. | 258 | 16,675 | ||||||
|
| |||||||
277,235 | ||||||||
Communications Equipment 1.2% |
| |||||||
Acacia Communications, Inc.* | 359 | 22,635 | ||||||
Calix, Inc.* | 2,651 | 15,932 | ||||||
Clearfield, Inc.* | 1,337 | 14,293 | ||||||
DASAN Zhone Solutions, Inc.* | 1,393 | 14,863 | ||||||
Extreme Networks, Inc.* | 2,720 | 18,170 | ||||||
InterDigital, Inc. | 273 | 13,423 | ||||||
Plantronics, Inc. | 482 | 14,976 | ||||||
|
| |||||||
114,292 | ||||||||
Construction & Engineering 1.7% |
| |||||||
Comfort Systems USA, Inc. | 326 | 12,603 | ||||||
Construction Partners, Inc. (Class A Stock)* | 1,211 | 19,969 | ||||||
EMCOR Group, Inc. | 197 | 17,226 | ||||||
Great Lakes Dredge & Dock Corp.* | 1,590 | 17,236 | ||||||
IES Holdings, Inc.* | 942 | 17,775 | ||||||
MasTec, Inc.* | 339 | 21,313 | ||||||
MYR Group, Inc.* | 520 | 14,908 | ||||||
NV5 Global, Inc.* | 216 | 13,334 | ||||||
Primoris Services Corp. | 841 | 16,433 | ||||||
Sterling Construction Co., Inc.* | 1,263 | 14,133 | ||||||
|
| |||||||
164,930 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 51 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Construction Materials 0.4% |
| |||||||
Summit Materials, Inc. (Class A Stock)* | 963 | $ | 20,204 | |||||
US Concrete, Inc.* | 354 | 14,344 | ||||||
|
| |||||||
34,548 | ||||||||
Consumer Finance 0.9% |
| |||||||
Elevate Credit, Inc.* | 4,184 | 18,034 | ||||||
Enova International, Inc.* | 714 | 17,065 | ||||||
FirstCash, Inc. | 174 | 17,179 | ||||||
Regional Management Corp.* | 678 | 17,458 | ||||||
World Acceptance Corp.* | 106 | 14,087 | ||||||
|
| |||||||
83,823 | ||||||||
Containers & Packaging 0.2% |
| |||||||
Myers Industries, Inc. | 962 | 16,190 | ||||||
Distributors 0.2% |
| |||||||
Core-Mark Holding Co., Inc. | 440 | 14,252 | ||||||
Diversified Consumer Services 0.9% |
| |||||||
Career Education Corp.* | 914 | 18,746 | ||||||
Collectors Universe, Inc. | 779 | 20,192 | ||||||
K12, Inc.* | 569 | 14,993 | ||||||
Select Interior Concepts, Inc. (Class A Stock)* | 1,472 | 18,267 | ||||||
Strategic Education, Inc. | 98 | 16,585 | ||||||
|
| |||||||
88,783 | ||||||||
Diversified Financial Services 0.2% |
| |||||||
Marlin Business Services Corp. | 728 | 15,747 | ||||||
Diversified Telecommunication Services 0.8% |
| |||||||
Bandwidth, Inc. (Class A Stock)* | 228 | 19,879 | ||||||
IDT Corp. (Class B Stock)* | 1,523 | 13,433 | ||||||
Ooma, Inc.* | 1,653 | 20,662 | ||||||
Vonage Holdings Corp.* | 1,380 | 18,244 | ||||||
|
| |||||||
72,218 | ||||||||
Electric Utilities 0.6% |
| |||||||
Genie Energy Ltd. (Class B Stock) | 1,476 | 10,568 | ||||||
MGE Energy, Inc. | 240 | 18,204 | ||||||
Otter Tail Corp. | 333 | 16,857 | ||||||
Spark Energy, Inc. (Class A Stock) | 1,537 | 14,540 | ||||||
|
| |||||||
60,169 |
See Notes to Financial Statements.
52 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Electrical Equipment 1.0% |
| |||||||
Allied Motion Technologies, Inc. | 471 | $ | 15,171 | |||||
Atkore International Group, Inc.* | 706 | 20,481 | ||||||
AZZ, Inc. | 351 | 14,486 | ||||||
EnerSys | 268 | 15,008 | ||||||
Generac Holdings, Inc.* | 249 | 19,420 | ||||||
Thermon Group Holdings, Inc.* | 674 | 14,659 | ||||||
|
| |||||||
99,225 | ||||||||
Electronic Equipment, Instruments & Components 2.1% |
| |||||||
Badger Meter, Inc. | 278 | 14,339 | ||||||
Coda Octopus Group, Inc.* | 1,372 | 12,183 | ||||||
ePlus, Inc.* | 250 | 20,430 | ||||||
Fabrinet (Thailand)* | 350 | 17,672 | ||||||
Insight Enterprises, Inc.* | 297 | 14,274 | ||||||
Iteris, Inc.* | 3,367 | 18,316 | ||||||
Itron, Inc.* | 278 | 19,307 | ||||||
MTS Systems Corp. | 310 | 17,630 | ||||||
OSI Systems, Inc.* | 155 | 16,277 | ||||||
Plexus Corp.* | 300 | 17,163 | ||||||
Sanmina Corp.* | 583 | 16,849 | ||||||
Vishay Precision Group, Inc.* | 438 | 13,687 | ||||||
|
| |||||||
198,127 | ||||||||
Energy Equipment & Services 0.4% |
| |||||||
DMC Global, Inc. | 292 | 12,682 | ||||||
ProPetro Holding Corp.* | 941 | 10,022 | ||||||
Solaris Oilfield Infrastructure, Inc. (Class A Stock) | 1,278 | 17,572 | ||||||
|
| |||||||
40,276 | ||||||||
Entertainment 0.3% |
| |||||||
Glu Mobile, Inc.* | 2,503 | 11,114 | ||||||
Rosetta Stone, Inc.* | 761 | 13,888 | ||||||
|
| |||||||
25,002 | ||||||||
Equity Real Estate Investment Trusts (REITs) 5.5% |
| |||||||
Alexander’s, Inc. | 47 | 17,746 | ||||||
American Assets Trust, Inc. | 368 | 17,244 | ||||||
American Finance Trust, Inc. | 1,547 | 18,518 | ||||||
Armada Hoffler Properties, Inc. | 1,072 | 18,588 | ||||||
Bluerock Residential Growth REIT, Inc. (Class A Stock) | 1,459 | 18,048 | ||||||
CareTrust REIT, Inc. | 716 | 17,034 | ||||||
Clipper Realty, Inc. | 1,540 | 16,848 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 53 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Equity Real Estate Investment Trusts (REITs) (cont’d.) |
| |||||||
Easterly Government Properties, Inc. | 942 | $ | 19,358 | |||||
EastGroup Properties, Inc. | 147 | 18,304 | ||||||
Essential Properties Realty Trust, Inc. | 867 | 19,690 | ||||||
First Industrial Realty Trust, Inc. | 468 | 18,229 | ||||||
Four Corners Property Trust, Inc. | 615 | 17,521 | ||||||
GEO Group, Inc. (The) | 854 | 14,655 | ||||||
Gladstone Commercial Corp. | 812 | 18,408 | ||||||
iStar, Inc. | 1,364 | 17,459 | ||||||
LTC Properties, Inc. | 373 | 18,202 | ||||||
Monmouth Real Estate Investment Corp. | 1,236 | 16,216 | ||||||
National Health Investors, Inc. | 218 | 18,085 | ||||||
National Storage Affiliates Trust | 604 | 20,210 | ||||||
New Senior Investment Group, Inc. | 2,580 | 16,125 | ||||||
NexPoint Residential Trust, Inc. | 408 | 18,931 | ||||||
PS Business Parks, Inc. | 102 | 18,320 | ||||||
QTS Realty Trust, Inc. (Class A Stock) | 411 | 20,164 | ||||||
Ryman Hospitality Properties, Inc. | 198 | 15,773 | ||||||
Saul Centers, Inc. | 294 | 14,768 | ||||||
Seritage Growth Properties(a) | 408 | 15,949 | ||||||
Tanger Factory Outlet Centers, Inc. | 1,078 | 15,243 | ||||||
Terreno Realty Corp. | 355 | 17,949 | ||||||
UMH Properties, Inc. | 1,391 | 17,888 | ||||||
Universal Health Realty Income Trust | 195 | 18,854 | ||||||
|
| |||||||
530,327 | ||||||||
Food & Staples Retailing 0.6% |
| |||||||
BJ’s Wholesale Club Holdings, Inc.* | 723 | 18,986 | ||||||
Performance Food Group Co.* | 435 | 20,354 | ||||||
PriceSmart, Inc. | 319 | 19,277 | ||||||
|
| |||||||
58,617 | ||||||||
Food Products 1.3% |
| |||||||
B&G Foods, Inc.(a) | 833 | 14,103 | ||||||
Calavo Growers, Inc. | 183 | 16,223 | ||||||
J&J Snack Foods Corp. | 108 | 20,850 | ||||||
John B Sanfilippo & Son, Inc. | 217 | 20,094 | ||||||
Lancaster Colony Corp. | 119 | 17,362 | ||||||
Sanderson Farms, Inc. | 126 | 18,852 | ||||||
Tootsie Roll Industries, Inc. | 457 | 16,763 | ||||||
|
| |||||||
124,247 |
See Notes to Financial Statements.
54 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Gas Utilities 0.7% |
| |||||||
Chesapeake Utilities Corp. | 200 | $ | 18,916 | |||||
New Jersey Resources Corp. | 344 | 15,734 | ||||||
South Jersey Industries, Inc. | 517 | 16,720 | ||||||
Southwest Gas Holdings, Inc. | 194 | 17,699 | ||||||
|
| |||||||
69,069 | ||||||||
Health Care Equipment & Supplies 5.6% |
| |||||||
Accuray, Inc.* | 4,776 | 12,800 | ||||||
AtriCure, Inc.* | 531 | 14,544 | ||||||
Atrion Corp. | 23 | 17,874 | ||||||
Cardiovascular Systems, Inc.* | 414 | 20,050 | ||||||
Cerus Corp.* | 3,279 | 17,608 | ||||||
Conformis, Inc.* | 4,565 | 9,769 | ||||||
CONMED Corp. | 203 | 20,456 | ||||||
CryoLife, Inc.* | 581 | 15,571 | ||||||
GenMark Diagnostics, Inc.* | 2,482 | 14,867 | ||||||
Glaukos Corp.* | 229 | 14,727 | ||||||
Globus Medical, Inc. (Class A Stock)* | 427 | 21,807 | ||||||
Haemonetics Corp.* | 146 | 19,495 | ||||||
Inogen, Inc.* | 276 | 12,798 | ||||||
Integer Holdings Corp.* | 197 | 14,263 | ||||||
IntriCon Corp.* | 784 | 13,642 | ||||||
iRadimed Corp.* | 903 | 17,320 | ||||||
Lantheus Holdings, Inc.* | 638 | 13,883 | ||||||
LivaNova PLC (United Kingdom)* | 242 | 18,786 | ||||||
Merit Medical Systems, Inc.* | 284 | 9,878 | ||||||
Mesa Laboratories, Inc. | 72 | 15,929 | ||||||
Natus Medical, Inc.* | 682 | 18,878 | ||||||
Neuronetics, Inc.* | 1,403 | 14,970 | ||||||
Novocure Ltd. (Jersey, Channel Islands)* | 274 | 24,896 | ||||||
NuVasive, Inc.* | 313 | 19,882 | ||||||
Orthofix Medical, Inc.* | 349 | 17,743 | ||||||
Quidel Corp.* | 311 | 19,609 | ||||||
SI-BONE, Inc.* | 917 | 17,826 | ||||||
Tactile Systems Technology, Inc.* | 317 | 15,989 | ||||||
Tandem Diabetes Care, Inc.* | 280 | 20,280 | ||||||
Utah Medical Products, Inc. | 211 | 20,746 | ||||||
Varex Imaging Corp.* | 580 | 15,283 | ||||||
Wright Medical Group NV (Netherlands)* | 658 | 13,719 | ||||||
|
| |||||||
535,888 | ||||||||
Health Care Providers & Services 2.1% |
| |||||||
Amedisys, Inc.* | 140 | 18,019 | ||||||
AMN Healthcare Services, Inc.* | 318 | 18,571 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 55 | �� |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Providers & Services (cont’d.) |
| |||||||
CorVel Corp.* | 201 | $ | 16,930 | |||||
Ensign Group, Inc. (The) | 316 | 15,768 | ||||||
HealthEquity, Inc.* | 278 | 16,502 | ||||||
LHC Group, Inc.* | 144 | 17,064 | ||||||
Magellan Health, Inc.* | 242 | 15,249 | ||||||
Providence Service Corp. (The)* | 308 | 17,313 | ||||||
R1 RCM, Inc.* | 1,373 | 16,009 | ||||||
RadNet, Inc.* | 1,212 | 16,859 | ||||||
Select Medical Holdings Corp.* | 1,093 | 17,729 | ||||||
US Physical Therapy, Inc. | 141 | 18,826 | ||||||
|
| |||||||
204,839 | ||||||||
Health Care Technology 1.5% |
| |||||||
Castlight Health, Inc. (Class B Stock)* | 5,839 | 8,233 | ||||||
Evolent Health, Inc. (Class A Stock)* | 2,394 | 16,447 | ||||||
HealthStream, Inc.* | 652 | 16,476 | ||||||
HMS Holdings Corp.* | 542 | 19,799 | ||||||
Inovalon Holdings, Inc. (Class A Stock)* | 1,152 | 19,492 | ||||||
NextGen Healthcare, Inc.* | 918 | 13,045 | ||||||
Omnicell, Inc.* | 199 | 14,288 | ||||||
OptimizeRx Corp.* | 1,101 | 18,067 | ||||||
Simulations Plus, Inc. | 623 | 22,497 | ||||||
|
| |||||||
148,344 | ||||||||
Hotels, Restaurants & Leisure 3.1% |
| |||||||
Biglari Holdings, Inc. (Class B Stock)* | 171 | 14,999 | ||||||
Brinker International, Inc. | 452 | 17,176 | ||||||
Cheesecake Factory, Inc. (The) | 405 | 15,386 | ||||||
Chuy’s Holdings, Inc.* | 773 | 19,611 | ||||||
Cracker Barrel Old Country Store, Inc. | 99 | 16,375 | ||||||
Denny’s Corp.* | 832 | 19,627 | ||||||
Golden Entertainment, Inc.* | 1,220 | 17,300 | ||||||
Habit Restaurants, Inc. (The) (Class A Stock)* | 1,757 | 15,391 | ||||||
Jack in the Box, Inc. | 204 | 17,405 | ||||||
Lindblad Expeditions Holdings, Inc.* | 1,035 | 19,313 | ||||||
Marriott Vacations Worldwide Corp. | 177 | 17,451 | ||||||
Monarch Casino & Resort, Inc.* | 380 | 16,864 | ||||||
Nathan’s Famous, Inc. | 230 | 15,318 | ||||||
Penn National Gaming, Inc.* | 905 | 17,349 | ||||||
Red Rock Resorts, Inc. (Class A Stock) | 811 | 16,909 | ||||||
Ruth’s Hospitality Group, Inc. | 774 | 15,054 | ||||||
Target Hospitality Corp.* | 1,863 | 11,364 | ||||||
Texas Roadhouse, Inc. (Class A Stock) | 324 | 16,673 | ||||||
|
| |||||||
299,565 |
See Notes to Financial Statements.
56 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Household Durables 2.4% |
| |||||||
Cavco Industries, Inc.* | 118 | $ | 21,650 | |||||
Century Communities, Inc.* | 651 | 18,345 | ||||||
Hamilton Beach Brands Holding Co. (Class A Stock) | 1,044 | 14,794 | ||||||
Helen of Troy Ltd.* | 145 | 22,259 | ||||||
Installed Building Products, Inc.* | 307 | 17,471 | ||||||
KB Home | 663 | 18,624 | ||||||
La-Z-Boy, Inc. | 564 | 17,975 | ||||||
LGI Homes, Inc.* | 246 | 20,051 | ||||||
Skyline Champion Corp.* | 657 | 18,396 | ||||||
Taylor Morrison Home Corp. (Class A Stock)* | 826 | 19,708 | ||||||
TopBuild Corp.* | 215 | 19,913 | ||||||
Universal Electronics, Inc.* | 441 | 19,911 | ||||||
|
| |||||||
229,097 | ||||||||
Insurance 1.6% |
| |||||||
Crawford & Co. (Class A Stock) | 1,703 | 16,434 | ||||||
FedNat Holding Co. | 1,268 | 15,508 | ||||||
James River Group Holdings Ltd. (Bermuda) | 367 | 18,086 | ||||||
Kinsale Capital Group, Inc. | 186 | 18,271 | ||||||
National General Holdings Corp. | 759 | 17,897 | ||||||
RLI Corp. | 201 | 18,405 | ||||||
Selective Insurance Group, Inc. | 227 | 18,076 | ||||||
United Fire Group, Inc. | 338 | 15,264 | ||||||
Universal Insurance Holdings, Inc. | 611 | 15,275 | ||||||
|
| |||||||
153,216 | ||||||||
Interactive Media & Services 0.9% |
| |||||||
Care.com, Inc.* | 1,603 | 15,854 | ||||||
Cars.com, Inc.* | 836 | 7,449 | ||||||
Eventbrite, Inc. (Class A Stock)* | 1,100 | 19,228 | ||||||
Liberty TripAdvisor Holdings, Inc. (Class A Stock)* | 1,445 | 12,629 | ||||||
Meet Group, Inc. (The)* | 5,154 | 17,781 | ||||||
QuinStreet, Inc.* | 1,254 | 14,358 | ||||||
|
| |||||||
87,299 | ||||||||
Internet & Direct Marketing Retail 0.7% |
| |||||||
1-800-Flowers.com, Inc. (Class A Stock)* | 969 | 14,264 | ||||||
Duluth Holdings, Inc. (Class B Stock)* | 1,272 | 11,690 | ||||||
Groupon, Inc. (Class A Stock)* | 5,038 | 12,494 | ||||||
PetMed Express, Inc.(a) | 1,138 | 17,980 | ||||||
Shutterstock, Inc.* | 438 | 15,378 | ||||||
|
| |||||||
71,806 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 57 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
IT Services 3.1% |
| |||||||
Brightcove, Inc.* | 1,694 | $ | 20,887 | |||||
Carbonite, Inc.* | 722 | 8,700 | ||||||
Cardtronics PLC (United Kingdom) (Class A Stock)* | 616 | 18,246 | ||||||
Cass Information Systems, Inc. | 366 | 18,520 | ||||||
CSG Systems International, Inc. | 358 | 19,289 | ||||||
EVERTEC, Inc. (Puerto Rico) | 540 | 18,824 | ||||||
Hackett Group, Inc. (The) | 1,042 | 16,807 | ||||||
International Money Express, Inc.* | 1,213 | 15,818 | ||||||
MAXIMUS, Inc. | 246 | 18,927 | ||||||
NIC, Inc. | 980 | 20,404 | ||||||
Perficient, Inc.* | 515 | 18,973 | ||||||
Perspecta, Inc. | 736 | 19,099 | ||||||
Presidio, Inc. | 1,289 | 20,650 | ||||||
PRGX Global, Inc.* | 2,547 | 13,728 | ||||||
Science Applications International Corp. | 201 | 17,690 | ||||||
TTEC Holdings, Inc. | 393 | 18,436 | ||||||
Virtusa Corp.* | 402 | 14,528 | ||||||
|
| |||||||
299,526 | ||||||||
Leisure Products 0.9% |
| |||||||
Clarus Corp. | 1,215 | 13,377 | ||||||
Johnson Outdoors, Inc. (Class A Stock) | 254 | 14,224 | ||||||
Malibu Boats, Inc. (Class A Stock)* | 446 | 12,408 | ||||||
Marine Products Corp. | 1,132 | 17,127 | ||||||
MasterCraft Boat Holdings, Inc.* | 876 | 13,272 | ||||||
Sturm Ruger & Co., Inc. | 325 | 13,328 | ||||||
|
| |||||||
83,736 | ||||||||
Life Sciences Tools & Services 1.1% |
| |||||||
Cambrex Corp.* | 379 | 22,713 | ||||||
Fluidigm Corp.* | 1,566 | 8,738 | ||||||
Medpace Holdings, Inc.* | 276 | 22,331 | ||||||
NanoString Technologies, Inc.* | 621 | 15,823 | ||||||
NeoGenomics, Inc.* | 775 | 19,360 | ||||||
Syneos Health, Inc. (Class A Stock)* | 328 | 17,230 | ||||||
|
| |||||||
106,195 | ||||||||
Machinery 4.5% |
| |||||||
Actuant Corp. (Class A Stock) | 734 | 16,302 | ||||||
Albany International Corp. (Class A Stock) | 225 | 18,499 | ||||||
Barnes Group, Inc. | 320 | 14,352 | ||||||
Blue Bird Corp.* | 862 | 15,723 |
See Notes to Financial Statements.
58 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Machinery (cont’d.) |
| |||||||
Columbus McKinnon Corp. | 455 | $ | 14,728 | |||||
Douglas Dynamics, Inc. | 448 | 18,708 | ||||||
Energy Recovery, Inc.* | 1,680 | 16,246 | ||||||
EnPro Industries, Inc. | 275 | 17,127 | ||||||
ESCO Technologies, Inc. | 215 | 16,368 | ||||||
Federal Signal Corp. | 706 | 20,975 | ||||||
Gorman-Rupp Co. (The) | 554 | 16,548 | ||||||
Hillenbrand, Inc. | 445 | 12,211 | ||||||
John Bean Technologies Corp. | 145 | 14,836 | ||||||
Kadant, Inc. | 195 | 16,047 | ||||||
Luxfer Holdings PLC (United Kingdom) | 712 | 11,186 | ||||||
Meritor, Inc.* | 766 | 12,884 | ||||||
Mueller Industries, Inc. | 611 | 16,106 | ||||||
Mueller Water Products, Inc. (Class A Stock) | 1,817 | 19,006 | ||||||
Omega Flex, Inc. | 237 | 19,955 | ||||||
REV Group, Inc. | 1,252 | 16,138 | ||||||
Rexnord Corp.* | 576 | 15,080 | ||||||
Spartan Motors, Inc. | 1,719 | 21,677 | ||||||
SPX Corp.* | 526 | 19,962 | ||||||
Tennant Co. | 290 | 19,833 | ||||||
Terex Corp. | 602 | 14,948 | ||||||
Watts Water Technologies, Inc. (Class A Stock) | 192 | 17,593 | ||||||
|
| |||||||
433,038 | ||||||||
Media 1.2% |
| |||||||
Central European Media Enterprises Ltd. (Czech Republic) (Class A Stock)* | 4,068 | 18,875 | ||||||
Fluent, Inc.* | 3,094 | 9,220 | ||||||
Gray Television, Inc.* | 1,013 | 15,499 | ||||||
Hemisphere Media Group, Inc. (Class A Stock)* | 1,338 | 15,882 | ||||||
Loral Space & Communications, Inc.* | 501 | 18,532 | ||||||
Meredith Corp. | 317 | 13,878 | ||||||
TechTarget, Inc.* | 848 | 20,132 | ||||||
|
| |||||||
112,018 | ||||||||
Metals & Mining 0.8% |
| |||||||
Compass Minerals International, Inc. | 328 | 16,311 | ||||||
Kaiser Aluminum Corp. | 187 | 16,536 | ||||||
Materion Corp. | 269 | 15,828 | ||||||
Ryerson Holding Corp.* | 2,164 | 14,867 | ||||||
Worthington Industries, Inc. | 434 | 15,060 | ||||||
|
| |||||||
78,602 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 59 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Oil, Gas & Consumable Fuels 1.5% |
| |||||||
Ardmore Shipping Corp. (Ireland)* | 2,050 | $ | 12,792 | |||||
CVR Energy, Inc. | 341 | 13,565 | ||||||
Dorian LPG Ltd.* | 1,929 | 20,042 | ||||||
Evolution Petroleum Corp. | 2,671 | 15,812 | ||||||
Falcon Minerals Corp. | 2,143 | 12,558 | ||||||
GasLog Ltd. (Monaco) | 1,236 | 15,203 | ||||||
Golar LNG Ltd. (Bermuda) | 964 | 11,289 | ||||||
Goodrich Petroleum Corp.* | 1,506 | 15,949 | ||||||
Isramco, Inc.* | 146 | 17,568 | ||||||
Ring Energy, Inc.* | 5,294 | 7,729 | ||||||
|
| |||||||
142,507 | ||||||||
Paper & Forest Products 0.4% |
| |||||||
Boise Cascade Co. | 570 | 17,898 | ||||||
Louisiana-Pacific Corp. | 696 | 16,732 | ||||||
|
| |||||||
34,630 | ||||||||
Personal Products 0.7% |
| |||||||
Inter Parfums, Inc. | 271 | 17,423 | ||||||
Lifevantage Corp.* | 1,402 | 17,048 | ||||||
Medifast, Inc. | 134 | 13,395 | ||||||
USANA Health Sciences, Inc.* | 283 | 19,235 | ||||||
|
| |||||||
67,101 | ||||||||
Pharmaceuticals 2.0% |
| |||||||
Akorn, Inc.* | 3,536 | 10,219 | ||||||
Amneal Pharmaceuticals, Inc.* | 2,607 | 6,648 | ||||||
Amphastar Pharmaceuticals, Inc.* | 864 | 19,405 | ||||||
ANI Pharmaceuticals, Inc.* | 213 | 13,952 | ||||||
BioDelivery Sciences International, Inc.* | 3,905 | 16,752 | ||||||
Corcept Therapeutics, Inc.* | 1,526 | 19,243 | ||||||
Innoviva, Inc.* | 1,249 | 14,476 | ||||||
Intersect ENT, Inc.* | 838 | 13,726 | ||||||
Pacira BioSciences, Inc.* | 427 | 15,902 | ||||||
Phibro Animal Health Corp. (Class A Stock) | 554 | 11,440 | ||||||
Revance Therapeutics, Inc.* | 1,404 | 14,882 | ||||||
SIGA Technologies, Inc.(a)* | 3,105 | 15,587 | ||||||
Verrica Pharmaceuticals, Inc.* | 1,526 | 15,123 | ||||||
|
| |||||||
187,355 | ||||||||
Professional Services 2.8% |
| |||||||
ASGN, Inc.* | 299 | 18,679 | ||||||
Barrett Business Services, Inc. | 216 | 18,820 |
See Notes to Financial Statements.
60 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Professional Services (cont’d.) |
| |||||||
BG Staffing, Inc. | 929 | $ | 17,409 | |||||
Exponent, Inc. | 301 | 21,338 | ||||||
Forrester Research, Inc. | 347 | 12,100 | ||||||
Franklin Covey Co.* | 510 | 18,763 | ||||||
FTI Consulting, Inc.* | 206 | 22,277 | ||||||
Heidrick & Struggles International, Inc. | 607 | 16,116 | ||||||
Huron Consulting Group, Inc.* | 342 | 20,934 | ||||||
ICF International, Inc. | 222 | 18,794 | ||||||
Insperity, Inc. | 144 | 14,265 | ||||||
Kforce, Inc. | 499 | 16,237 | ||||||
Korn Ferry | 456 | 17,820 | ||||||
Resources Connection, Inc. | 1,106 | 18,304 | ||||||
TriNet Group, Inc.* | 253 | 16,984 | ||||||
|
| |||||||
268,840 | ||||||||
Real Estate Management & Development 0.7% |
| |||||||
Cushman & Wakefield PLC* | 997 | 16,790 | ||||||
Kennedy-Wilson Holdings, Inc. | 847 | 17,770 | ||||||
Marcus & Millichap, Inc.* | 563 | 20,313 | ||||||
Newmark Group, Inc. (Class A Stock) | 1,906 | 16,544 | ||||||
|
| |||||||
71,417 | ||||||||
Road & Rail 0.2% |
| |||||||
Universal Logistics Holdings, Inc. | 781 | 16,362 | ||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||
Ambarella, Inc.* | 392 | 21,901 | ||||||
Cabot Microelectronics Corp. | 163 | 20,318 | ||||||
CEVA, Inc.* | 725 | 22,772 | ||||||
Diodes, Inc.* | 482 | 17,617 | ||||||
DSP Group, Inc.* | 1,284 | 17,771 | ||||||
FormFactor, Inc.* | 1,124 | 19,209 | ||||||
Ichor Holdings Ltd.* | 768 | 16,328 | ||||||
MaxLinear, Inc. (Class A Stock)* | 731 | 14,488 | ||||||
Nanometrics, Inc.* | 570 | 15,555 | ||||||
Power Integrations, Inc. | 226 | 20,119 | ||||||
Rudolph Technologies, Inc.* | 656 | 14,425 | ||||||
Semtech Corp.* | 365 | 15,319 | ||||||
Silicon Laboratories, Inc.* | 172 | 18,748 | ||||||
Xperi Corp. | 868 | 15,902 | ||||||
|
| |||||||
250,472 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 61 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Software 6.6% |
| |||||||
A10 Networks, Inc.* | 2,646 | $ | 18,363 | |||||
ACI Worldwide, Inc.* | 540 | 16,081 | ||||||
Agilysys, Inc.* | 810 | 22,073 | ||||||
Altair Engineering, Inc. (Class A Stock)* | 422 | 14,500 | ||||||
American Software, Inc. (Class A Stock) | 1,382 | 21,780 | ||||||
Blackbaud, Inc. | 211 | 19,195 | ||||||
Blackline, Inc.* | 332 | 16,909 | ||||||
Bottomline Technologies DE, Inc.* | 412 | 16,991 | ||||||
Box, Inc. (Class A Stock)* | 1,026 | 15,010 | ||||||
ChannelAdvisor Corp.* | 1,912 | 16,443 | ||||||
Cision Ltd.* | 1,628 | 11,266 | ||||||
CommVault Systems, Inc.* | 346 | 15,006 | ||||||
Cornerstone OnDemand, Inc.* | 295 | 15,390 | ||||||
Ebix, Inc. | 347 | 12,291 | ||||||
eGain Corp.* | 2,297 | 16,492 | ||||||
Envestnet, Inc.* | 252 | 14,417 | ||||||
ForeScout Technologies, Inc.* | 494 | 17,700 | ||||||
j2 Global, Inc. | 198 | 16,751 | ||||||
LivePerson, Inc.* | 652 | 25,911 | ||||||
Majesco* | 1,754 | 14,699 | ||||||
MicroStrategy, Inc. (Class A Stock)* | 140 | 20,061 | ||||||
Mitek Systems, Inc.* | 1,759 | 17,836 | ||||||
MobileIron, Inc.* | 2,881 | 19,879 | ||||||
Model N, Inc.* | 864 | 24,736 | ||||||
Monotype Imaging Holdings, Inc. | 924 | 18,249 | ||||||
OneSpan, Inc.* | 1,280 | 17,280 | ||||||
Progress Software Corp. | 447 | 16,888 | ||||||
QAD, Inc. (Class A Stock) | 402 | 16,289 | ||||||
Qualys, Inc.* | 202 | 16,083 | ||||||
Rimini Street, Inc.* | 3,380 | 16,123 | ||||||
SPS Commerce, Inc.* | 312 | 15,768 | ||||||
SVMK, Inc.* | 1,076 | 18,012 | ||||||
Telenav, Inc.* | 2,043 | 23,127 | ||||||
Tenable Holdings, Inc.* | 603 | 13,748 | ||||||
Verint Systems, Inc.* | 323 | 17,213 | ||||||
Workiva, Inc. (Class A Stock)* | 294 | 14,144 | ||||||
Yext, Inc.* | 933 | 14,713 | ||||||
|
| |||||||
637,417 | ||||||||
Specialty Retail 2.4% |
| |||||||
Aaron’s, Inc. | 276 | 17,694 | ||||||
American Eagle Outfitters, Inc. | 1,026 | 17,257 |
See Notes to Financial Statements.
62 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Specialty Retail (cont’d.) |
| |||||||
America’sCar-Mart, Inc.* | 200 | $ | 17,156 | |||||
Asbury Automotive Group, Inc.* | 212 | 19,992 | ||||||
Boot Barn Holdings, Inc.* | 502 | 17,193 | ||||||
Children’s Place, Inc. (The) | 186 | 16,229 | ||||||
Designer Brands, Inc. (Class A Stock) | 918 | 15,138 | ||||||
Lithia Motors, Inc. (Class A Stock) | 148 | 19,398 | ||||||
Monro, Inc. | 207 | 16,088 | ||||||
Murphy USA, Inc.* | 207 | 18,506 | ||||||
Rent-A-Center, Inc.* | 636 | 16,237 | ||||||
Sleep Number Corp.* | 437 | 18,284 | ||||||
Winmark Corp. | 107 | 17,388 | ||||||
|
| |||||||
226,560 | ||||||||
Technology Hardware, Storage & Peripherals 0.1% |
| |||||||
AstroNova, Inc. | 681 | 11,189 | ||||||
Textiles, Apparel & Luxury Goods 0.5% |
| |||||||
Deckers Outdoor Corp.* | 99 | 14,598 | ||||||
Kontoor Brands, Inc.* | 570 | 19,517 | ||||||
Steven Madden Ltd. | 511 | 16,975 | ||||||
|
| |||||||
51,090 | ||||||||
Thrifts & Mortgage Finance 2.0% |
| |||||||
Axos Financial, Inc.* | 657 | 17,023 | ||||||
Essent Group Ltd.* | 362 | 17,557 | ||||||
Federal Agricultural Mortgage Corp. (Class C Stock) | 232 | 19,105 | ||||||
Greene County Bancorp, Inc. | 616 | 16,571 | ||||||
Hingham Institution for Savings | 91 | 16,389 | ||||||
Kearny Financial Corp. | 1,243 | 15,637 | ||||||
Meridian Bancorp, Inc. | 927 | 16,204 | ||||||
NMI Holdings, Inc. (Class A Stock)* | 617 | 17,486 | ||||||
PennyMac Financial Services, Inc.* | 771 | 22,814 | ||||||
United Community Financial Corp. | 1,865 | 17,997 | ||||||
Walker & Dunlop, Inc. | 298 | 16,646 | ||||||
|
| |||||||
193,429 | ||||||||
Trading Companies & Distributors 1.6% |
| |||||||
Applied Industrial Technologies, Inc. | 282 | 15,056 | ||||||
Beacon Roofing Supply, Inc.* | 454 | 14,474 | ||||||
Foundation Building Materials, Inc.* | 1,018 | 17,438 | ||||||
GMS, Inc.* | 822 | 24,216 | ||||||
Kaman Corp. | 270 | 15,765 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 63 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||||||||||
COMMON STOCKS (Continued) | ||||||||||||||||
Trading Companies & Distributors (cont’d.) | ||||||||||||||||
Lawson Products, Inc.* | 463 | $ | 16,876 | |||||||||||||
MRC Global, Inc.* | 1,053 | 13,236 | ||||||||||||||
Systemax, Inc. | 832 | 16,698 | ||||||||||||||
Transcat, Inc.* | 689 | 16,006 | ||||||||||||||
|
| |||||||||||||||
149,765 | ||||||||||||||||
Water Utilities 1.4% |
| |||||||||||||||
American States Water Co. | 254 | 23,503 | ||||||||||||||
California Water Service Group | 326 | 18,399 | ||||||||||||||
Global Water Resources, Inc. | 1,776 | 21,152 | ||||||||||||||
Middlesex Water Co. | 292 | 17,824 | ||||||||||||||
Pure Cycle Corp.* | 1,520 | 16,492 | ||||||||||||||
SJW Group | 258 | 17,629 | ||||||||||||||
York Water Co. (The) | 516 | 19,267 | ||||||||||||||
|
| |||||||||||||||
134,266 | ||||||||||||||||
Wireless Telecommunication Services 0.1% |
| |||||||||||||||
Shenandoah Telecommunications Co. | 449 | 14,161 | ||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 9,567,046 | |||||||||||||||
|
| |||||||||||||||
SHORT-TERM INVESTMENTS 0.9% | ||||||||||||||||
AFFILIATED MUTUAL FUND 0.7% | ||||||||||||||||
PGIM Institutional Money Market Fund | 65,906 | 65,913 | ||||||||||||||
Interest Rate | Maturity Date | Principal Amount (000)# | ||||||||||||||
TIME DEPOSIT 0.2% | ||||||||||||||||
Citibank, NA (cost $22,116) | 1.490 | % | 09/03/19 | 22 | 22,116 | |||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM TERM INVESTMENTS | 88,029 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 100.6% | 9,655,075 | |||||||||||||||
Liabilities in excess of other assets (0.6)% | (61,877 | ) | ||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 9,593,198 | ||||||||||||||
|
|
See Notes to Financial Statements.
64 |
The following abbreviations are used in the annual report:
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $62,565; cash collateral of $65,738 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Institutional Money Market Fund. |
* | Non-income producing security. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Aerospace & Defense | $ | 116,984 | $ | — | $ | — | ||||||
Air Freight & Logistics | 31,708 | — | — | |||||||||
Airlines | 41,715 | — | — | |||||||||
Auto Components | 48,905 | — | — | |||||||||
Automobiles | 15,017 | — | — | |||||||||
Banks | 403,318 | — | — | |||||||||
Beverages | 55,387 | — | — | |||||||||
Biotechnology | 911,643 | — | — | |||||||||
Building Products | 200,343 | — | — | |||||||||
Capital Markets | 229,346 | — | — | |||||||||
Chemicals | 125,873 | — | — | |||||||||
Commercial Services & Supplies | 277,235 | — | — | |||||||||
Communications Equipment | 114,292 | — | — | |||||||||
Construction & Engineering | 164,930 | — | — | |||||||||
Construction Materials | 34,548 | — | — |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 65 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Consumer Finance | $ | 83,823 | $ | — | $ | — | ||||||
Containers & Packaging | 16,190 | — | — | |||||||||
Distributors | 14,252 | — | — | |||||||||
Diversified Consumer Services | 88,783 | — | — | |||||||||
Diversified Financial Services | 15,747 | — | — | |||||||||
Diversified Telecommunication Services | 72,218 | — | — | |||||||||
Electric Utilities | 60,169 | — | — | |||||||||
Electrical Equipment | 99,225 | — | — | |||||||||
Electronic Equipment, Instruments & Components | 198,127 | — | — | |||||||||
Energy Equipment & Services | 40,276 | — | — | |||||||||
Entertainment | 25,002 | — | — | |||||||||
Equity Real Estate Investment Trusts (REITs) | 530,327 | — | — | |||||||||
Food & Staples Retailing | 58,617 | — | — | |||||||||
Food Products | 124,247 | — | — | |||||||||
Gas Utilities | 69,069 | — | — | |||||||||
Health Care Equipment & Supplies | 535,888 | — | — | |||||||||
Health Care Providers & Services | 204,839 | — | — | |||||||||
Health Care Technology | 148,344 | — | — | |||||||||
Hotels, Restaurants & Leisure | 299,565 | — | — | |||||||||
Household Durables | 229,097 | — | — | |||||||||
Insurance | 153,216 | — | — | |||||||||
Interactive Media & Services | 87,299 | — | — | |||||||||
Internet & Direct Marketing Retail | 71,806 | — | — | |||||||||
IT Services | 299,526 | — | — | |||||||||
Leisure Products | 83,736 | — | — | |||||||||
Life Sciences Tools & Services | 106,195 | — | — | |||||||||
Machinery | 433,038 | — | — | |||||||||
Media | 112,018 | — | — | |||||||||
Metals & Mining | 78,602 | — | — | |||||||||
Oil, Gas & Consumable Fuels | 142,507 | — | — | |||||||||
Paper & Forest Products | 34,630 | — | — | |||||||||
Personal Products | 67,101 | — | — | |||||||||
Pharmaceuticals | 187,355 | — | — | |||||||||
Professional Services | 268,840 | — | — | |||||||||
Real Estate Management & Development | 71,417 | — | — | |||||||||
Road & Rail | 16,362 | — | — | |||||||||
Semiconductors & Semiconductor Equipment | 250,472 | — | — |
See Notes to Financial Statements.
66 |
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Software | $ | 637,417 | $ | — | $ | — | ||||||
Specialty Retail | 226,560 | — | — | |||||||||
Technology Hardware, Storage & Peripherals | 11,189 | — | — | |||||||||
Textiles, Apparel & Luxury Goods | 51,090 | — | — | |||||||||
Thrifts & Mortgage Finance | 193,429 | — | — | |||||||||
Trading Companies & Distributors | 149,765 | — | — | |||||||||
Water Utilities | 134,266 | — | — | |||||||||
Wireless Telecommunication Services | 14,161 | — | — | |||||||||
Affiliated Mutual Fund | 65,913 | — | — | |||||||||
Time Deposit | — | 22,116 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 9,632,959 | $ | 22,116 | $ | — | ||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows (unaudited):
Biotechnology | 9.5 | % | ||
Software | 6.6 | |||
Health Care Equipment & Supplies | 5.6 | |||
Equity Real Estate Investment Trusts (REITs) | 5.5 | |||
Machinery | 4.5 | |||
Banks | 4.2 | |||
Hotels, Restaurants & Leisure | 3.1 | |||
IT Services | 3.1 | |||
Commercial Services & Supplies | 2.9 | |||
Professional Services | 2.8 | |||
Semiconductors & Semiconductor Equipment | 2.6 | |||
Capital Markets | 2.4 | |||
Household Durables | 2.4 | |||
Specialty Retail | 2.4 | |||
Health Care Providers & Services | 2.1 | |||
Building Products | 2.1 | |||
Electronic Equipment, Instruments & Components | 2.1 | |||
Thrifts & Mortgage Finance | 2.0 | |||
Pharmaceuticals | 2.0 | |||
Construction & Engineering | 1.7 | |||
Insurance | 1.6 | |||
Trading Companies & Distributors | 1.6 | |||
Health Care Technology | 1.5 | |||
Oil, Gas & Consumable Fuels | 1.5 | |||
Water Utilities | 1.4 | |||
Chemicals | 1.3 | % | ||
Food Products | 1.3 | |||
Aerospace & Defense | 1.2 | |||
Communications Equipment | 1.2 | |||
Media | 1.2 | |||
Life Sciences Tools & Services | 1.1 | |||
Electrical Equipment | 1.0 | |||
Diversified Consumer Services | 0.9 | |||
Interactive Media & Services | 0.9 | |||
Consumer Finance | 0.9 | |||
Leisure Products | 0.9 | |||
Metals & Mining | 0.8 | |||
Diversified Telecommunication Services | 0.8 | |||
Internet & Direct Marketing Retail | 0.7 | |||
Real Estate Management & Development | 0.7 | |||
Gas Utilities | 0.7 | |||
Personal Products | 0.7 | |||
Affiliated Mutual Fund (0.7% represents investments purchased with collateral from securities on loan) | 0.7 | |||
Electric Utilities | 0.6 | |||
Food & Staples Retailing | 0.6 | |||
Beverages | 0.6 | |||
Textiles, Apparel & Luxury Goods | 0.5 | |||
Auto Components | 0.5 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 67 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Schedule of Investments (continued)
as of August 31, 2019
Industry (cont’d.) | ||||
Airlines | 0.4 | % | ||
Energy Equipment & Services | 0.4 | |||
Paper & Forest Products | 0.4 | |||
Construction Materials | 0.4 | |||
Air Freight & Logistics | 0.3 | |||
Entertainment | 0.3 | |||
Time Deposit | 0.2 | |||
Road & Rail | 0.2 | |||
Containers & Packaging | 0.2 | |||
Diversified Financial Services | 0.2 | % | ||
Automobiles | 0.2 | |||
Distributors | 0.2 | |||
Wireless Telecommunication Services | 0.1 | |||
Technology Hardware, Storage & Peripherals | 0.1 | |||
|
| |||
100.6 | ||||
Liabilities in excess of other assets | (0.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions-Summary of Offsetting and Netting Agreements:
The Fund entered into financial instruments/transactions during the period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right toset-off exists, is presented in the summary below:
Financial Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/ (Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 62,565 | $ | (62,565 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
68 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value, including securities on loan of $62,565: | ||||
Unaffiliated investments (cost $9,949,719) | $ | 9,589,162 | ||
Affiliated investments (cost $65,919) | 65,913 | |||
Cash | 24 | |||
Interest and dividends receivable | 6,263 | |||
|
| |||
Total assets | 9,661,362 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 65,738 | |||
Management fee payable | 2,380 | |||
Other liabilities | 46 | |||
|
| |||
Total Liabilities | 68,164 | |||
|
| |||
Net Assets | $ | 9,593,198 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 200 | ||
Paid-in capital in excess of par | 10,026,367 | |||
|
| |||
10,026,567 | ||||
Total distributable earnings (loss) | (433,369 | ) | ||
|
| |||
Net assets, August 31, 2019 | $ | 9,593,198 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 47.97 | ||
|
|
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 69 |
PGIM QMA Strategic AlphaSmall-Cap Growth ETF
Statement of Operations
Period Ended August 31, 2019*
Net Investment Income (Loss) |
| |||
Income |
| |||
Interest income | $ | 2,536 | ||
Unaffiliated dividend income (net of $60 foreign withholding tax) | 106,101 | |||
Income from securities lending, net (including affiliated income of $634) | 903 | |||
|
| |||
Total income | 109,540 | |||
|
| |||
Expenses | ||||
Management fee | 25,014 | |||
|
| |||
Total expenses | 25,014 | |||
|
| |||
Net investment income (loss) | 84,526 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments |
| |||
Net realized gain (loss) on: |
| |||
Investment transactions (including affiliated of $39) | (91,038 | ) | ||
In-kind redemptions | 76,152 | |||
|
| |||
(14,886 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(6)) | (360,564 | ) | ||
|
| |||
Net gain (loss) on investment transactions | (375,450 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (290,924 | ) | |
|
|
* | For the period from November 13, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
70 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Statement of Changes in Net Assets
Period Ended August 31, 2019* | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 84,526 | ||
Net realized gain (loss) on investments andin-kind redemptions | (14,886 | ) | ||
Net change in unrealized appreciation (depreciation) on investments | (360,564 | ) | ||
|
| |||
Net increase (decrease) in net assets resulting from operations | (290,924 | ) | ||
|
| |||
Dividends and Distributions | ||||
Distributions from distributable earnings | (65,848 | ) | ||
|
| |||
Fund share transactions (Net of share conversions) | ||||
Net proceeds from shares sold | 12,487,720 | |||
Cost of shares reacquired | (2,537,750 | ) | ||
|
| |||
Net increase (decrease) in net assets from Fund share transactions | 9,949,970 | |||
|
| |||
Total increase (decrease) | 9,593,198 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 9,593,198 | ||
|
|
* | For the period from November 13, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 71 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments
as of August 31, 2019
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.0% | ||||||||
COMMON STOCKS 99.0% | ||||||||
Aerospace & Defense 0.6% |
| |||||||
Cubic Corp. | 199 | $ | 13,784 | |||||
Ducommun, Inc.* | 293 | 12,066 | ||||||
Moog, Inc. (Class A Stock) | 147 | 11,944 | ||||||
Wesco Aircraft Holdings, Inc.* | 1,218 | 13,398 | ||||||
|
| |||||||
51,192 | ||||||||
Air Freight & Logistics 0.3% |
| |||||||
Echo Global Logistics, Inc.* | 687 | 13,767 | ||||||
Hub Group, Inc. (Class A Stock)* | 328 | 14,124 | ||||||
|
| |||||||
27,891 | ||||||||
Airlines 0.5% |
| |||||||
Hawaiian Holdings, Inc. | 438 | 10,692 | ||||||
Mesa Air Group, Inc.* | 1,390 | 8,980 | ||||||
SkyWest, Inc. | 213 | 12,196 | ||||||
Spirit Airlines, Inc.* | 256 | 9,610 | ||||||
|
| |||||||
41,478 | ||||||||
Auto Components 0.7% |
| |||||||
American Axle & Manufacturing Holdings, Inc.* | 1,166 | 7,392 | ||||||
Cooper-Standard Holdings, Inc.* | 303 | 11,344 | ||||||
Modine Manufacturing Co.* | 937 | 9,567 | ||||||
Standard Motor Products, Inc. | 296 | 13,116 | ||||||
Tower International, Inc. | 704 | 21,775 | ||||||
|
| |||||||
63,194 | ||||||||
Banks 19.0% |
| |||||||
1st Constitution Bancorp | 750 | 13,058 | ||||||
1st Source Corp. | 290 | 12,867 | ||||||
ACNB Corp. | 346 | 11,653 | ||||||
Ames National Corp. | 490 | 12,970 | ||||||
Arrow Financial Corp. | 393 | 12,639 | ||||||
BancFirst Corp. | 238 | 12,797 | ||||||
Bancorp, Inc. (The)* | 1,510 | 13,786 | ||||||
BancorpSouth Bank | 460 | 12,691 | ||||||
Bank of Commerce Holdings | 1,234 | 12,340 | ||||||
Bank of NT Butterfield & Son Ltd. (The) (Bermuda) | 394 | 10,859 | ||||||
Bank7 Corp.* | 731 | 13,151 | ||||||
BankFinancial Corp. | 939 | 10,949 | ||||||
Bankwell Financial Group, Inc. | 462 | 12,155 |
See Notes to Financial Statements.
72 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Banks (cont’d.) |
| |||||||
Bar Harbor Bankshares | 529 | $ | 11,675 | |||||
Baycom Corp.* | 545 | 12,044 | ||||||
BCB Bancorp, Inc. | 1,018 | 12,582 | ||||||
Berkshire Hills Bancorp, Inc. | 452 | 13,257 | ||||||
Bridge Bancorp, Inc. | 450 | 12,109 | ||||||
Brookline Bancorp, Inc. | 862 | 12,102 | ||||||
Bryn Mawr Bank Corp. | 339 | 11,560 | ||||||
Byline Bancorp, Inc.* | 631 | 10,853 | ||||||
C&F Financial Corp. | 252 | 11,945 | ||||||
Cadence BanCorp (Class A Stock) | 694 | 10,667 | ||||||
Cambridge Bancorp | 165 | 12,200 | ||||||
Camden National Corp. | 296 | 12,272 | ||||||
Capital Bancorp, Inc.* | 1,170 | 14,157 | ||||||
CBTX, Inc. | 463 | 12,469 | ||||||
CenterState Bank Corp. | 573 | 12,961 | ||||||
Chemung Financial Corp. | 274 | 11,012 | ||||||
Civista Bancshares, Inc. | 645 | 13,177 | ||||||
CNB Financial Corp. | 515 | 13,617 | ||||||
Codorus Valley Bancorp, Inc. | 607 | 13,573 | ||||||
Community Bank System, Inc. | 203 | 12,381 | ||||||
Community Financial Corp. (The) | 398 | 12,509 | ||||||
Community Trust Bancorp, Inc. | 298 | 11,592 | ||||||
ConnectOne Bancorp, Inc. | 643 | 13,169 | ||||||
Customers Bancorp, Inc.* | 677 | 12,789 | ||||||
DNB Financial Corp. | 291 | 11,978 | ||||||
Enterprise Bancorp, Inc. | 439 | 12,700 | ||||||
Enterprise Financial Services Corp. | 297 | 11,708 | ||||||
Esquire Financial Holdings, Inc.* | 541 | 12,713 | ||||||
Evans Bancorp, Inc. | 389 | 13,269 | ||||||
Farmers National Banc Corp. | 893 | 12,056 | ||||||
FB Financial Corp. | 392 | 14,061 | ||||||
Financial Institutions, Inc. | 458 | 13,309 | ||||||
First Bancorp | 353 | 12,433 | ||||||
First Bancorp, Inc. | 480 | 12,192 | ||||||
First BanCorp (Puerto Rico) | 1,212 | 11,611 | ||||||
First Bancshares, Inc. (The) | 423 | 13,341 | ||||||
First Bank | 1,142 | 12,060 | ||||||
First Business Financial Services, Inc. | 530 | 11,952 | ||||||
First Choice Bancorp | 583 | 12,208 | ||||||
First Commonwealth Financial Corp. | 976 | 12,073 | ||||||
First Financial Corp. | 329 | 13,357 | ||||||
First Financial Northwest, Inc. | 946 | 12,979 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 73 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Banks (cont’d.) | ||||||||
First Foundation, Inc. | 907 | $ | 12,662 | |||||
First Guaranty Bancshares, Inc. | 666 | 12,641 | ||||||
First Internet Bancorp | 640 | 12,941 | ||||||
First Interstate BancSystem, Inc. (Class A Stock) | 337 | 13,143 | ||||||
First Mid Bancshares, Inc. | 391 | 12,547 | ||||||
First Midwest Bancorp, Inc. | 588 | 11,290 | ||||||
First Northwest Bancorp | 879 | 14,046 | ||||||
Flushing Financial Corp. | 590 | 11,381 | ||||||
FNCB Bancorp, Inc. | 1,645 | 12,107 | ||||||
Franklin Financial Network, Inc. | 470 | 13,597 | ||||||
Great Southern Bancorp, Inc. | 223 | 12,564 | ||||||
Hancock Whitney Corp. | 332 | 11,657 | ||||||
Hanmi Financial Corp. | 593 | 10,621 | ||||||
HarborOne Bancorp, Inc.* | 1,256 | 12,510 | ||||||
Hawthorn Bancshares, Inc. | 492 | 10,873 | ||||||
Heartland Financial USA, Inc. | 285 | 12,463 | ||||||
Hilltop Holdings, Inc. | 611 | 14,511 | ||||||
HomeTrust Bancshares, Inc. | 497 | 12,534 | ||||||
Horizon Bancorp, Inc. | 781 | 12,699 | ||||||
Howard Bancorp, Inc.* | 895 | 13,237 | ||||||
IBERIABANK Corp. | 181 | 12,487 | ||||||
Independent Bank Corp. | 597 | 11,600 | ||||||
International Bancshares Corp. | 339 | 12,065 | ||||||
Investar Holding Corp. | 560 | 13,003 | ||||||
Lakeland Bancorp, Inc. | 824 | 12,261 | ||||||
LCNB Corp. | 710 | 11,907 | ||||||
Macatawa Bank Corp. | 1,298 | 12,837 | ||||||
Mackinac Financial Corp. | 830 | 11,736 | ||||||
Malvern Bancorp, Inc.* | 609 | 12,880 | ||||||
Mercantile Bank Corp. | 413 | 12,708 | ||||||
Metropolitan Bank Holding Corp.* | 303 | 10,969 | ||||||
Mid Penn Bancorp, Inc. | 518 | 12,562 | ||||||
Midland States Bancorp, Inc. | 510 | 13,143 | ||||||
MidSouth Bancorp, Inc. | 1,198 | 12,399 | ||||||
MidWestOne Financial Group, Inc. | 437 | 12,660 | ||||||
MutualFirst Financial, Inc. | 446 | 13,456 | ||||||
MVB Financial Corp. | 786 | 14,808 | ||||||
National Bank Holdings Corp. (Class A Stock) | 384 | 12,534 | ||||||
National Bankshares, Inc. | 353 | 11,826 | ||||||
NBT Bancorp, Inc. | 354 | 12,379 | ||||||
Nicolet Bankshares, Inc.* | 210 | 13,310 | ||||||
Northeast Bank | 640 | 13,434 | ||||||
Northrim BanCorp, Inc. | 359 | 12,996 | ||||||
Oak Valley Bancorp | 684 | 11,047 |
See Notes to Financial Statements.
74 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Banks (cont’d.) | ||||||||
OFG Bancorp | 555 | $ | 11,389 | |||||
Ohio Valley Banc Corp. | 365 | 11,757 | ||||||
Old Line Bancshares, Inc. | 454 | 11,995 | ||||||
Old Second Bancorp, Inc. | 1,035 | 12,203 | ||||||
Opus Bank | 622 | 12,913 | ||||||
Orrstown Financial Services, Inc. | 625 | 13,338 | ||||||
Pacific Mercantile Bancorp* | 1,686 | 12,814 | ||||||
PCB Bancorp | 828 | 13,637 | ||||||
Peapack Gladstone Financial Corp. | 481 | 13,531 | ||||||
Penns Woods Bancorp, Inc. | 320 | 13,213 | ||||||
Peoples Bancorp of North Carolina, Inc. | 483 | 13,461 | ||||||
Peoples Bancorp, Inc. | 392 | 12,038 | ||||||
Peoples Financial Services Corp. | 314 | 14,058 | ||||||
Premier Financial Bancorp, Inc. | 856 | 13,268 | ||||||
QCR Holdings, Inc. | 363 | 12,818 | ||||||
RBB Bancorp | 615 | 11,334 | ||||||
Reliant Bancorp, Inc. | 574 | 13,150 | ||||||
Renasant Corp. | 379 | 12,427 | ||||||
Republic Bancorp, Inc. (Class A Stock) | 265 | 11,249 | ||||||
S&T Bancorp, Inc. | 350 | 11,977 | ||||||
Sandy Spring Bancorp, Inc. | 378 | 12,655 | ||||||
SB One Bancorp | 564 | 12,588 | ||||||
Select Bancorp, Inc.* | 1,112 | 12,121 | ||||||
Shore Bancshares, Inc. | 820 | 12,595 | ||||||
Sierra Bancorp | 480 | 11,827 | ||||||
Simmons First National Corp. (Class A Stock) | 567 | 13,608 | ||||||
South Plains Financial, Inc. | 779 | 12,744 | ||||||
Southern First Bancshares, Inc.* | 366 | 13,970 | ||||||
Southern National Bancorp of Virginia, Inc. | 878 | 12,836 | ||||||
Spirit of Texas Bancshares, Inc.* | 634 | 13,060 | ||||||
Stock Yards Bancorp, Inc. | 376 | 13,649 | ||||||
Summit Financial Group, Inc. | 499 | 12,290 | ||||||
TCF Financial Corp. | 292 | 11,260 | ||||||
Towne Bank | 489 | 12,846 | ||||||
TriCo Bancshares | 350 | 12,376 | ||||||
Triumph Bancorp, Inc.* | 459 | 13,765 | ||||||
UMB Financial Corp. | 205 | 12,776 | ||||||
United Community Banks, Inc. | 474 | 12,518 | ||||||
United Security Bancshares | 1,246 | 12,933 | ||||||
Unity Bancorp, Inc. | 635 | 12,465 | ||||||
Univest Financial Corp. | 532 | 13,465 | ||||||
Veritex Holdings, Inc. | 498 | 11,753 | ||||||
WesBanco, Inc. | 324 | 11,087 | ||||||
|
| |||||||
1,779,375 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 75 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Biotechnology 1.6% |
| |||||||
Achillion Pharmaceuticals, Inc.* | 5,076 | $ | 22,081 | |||||
Acorda Therapeutics, Inc.* | 1,871 | 6,043 | ||||||
Akebia Therapeutics, Inc.* | 3,223 | 13,311 | ||||||
AMAG Pharmaceuticals, Inc.* | 1,358 | 14,829 | ||||||
Anika Therapeutics, Inc.* | 343 | 19,469 | ||||||
Arena Pharmaceuticals, Inc.* | 222 | 11,741 | ||||||
Ligand Pharmaceuticals, Inc.* | 114 | 10,364 | ||||||
Lineage Cell Therapeutics, Inc.* | 10,851 | 10,139 | ||||||
Myriad Genetics, Inc.* | 455 | 10,706 | ||||||
Prothena Corp. PLC (Ireland)* | 1,343 | 11,295 | ||||||
Sutro Biopharma, Inc.* | 1,160 | 9,361 | ||||||
Viking Therapeutics, Inc.(a)* | 1,602 | 11,134 | ||||||
|
| |||||||
150,473 | ||||||||
Building Products 1.6% |
| |||||||
Apogee Enterprises, Inc. | 305 | 11,264 | ||||||
Armstrong Flooring, Inc.* | 1,323 | 8,957 | ||||||
Builders FirstSource, Inc.* | 778 | 15,132 | ||||||
Caesarstone Ltd. (Israel) | 821 | 12,307 | ||||||
Gibraltar Industries, Inc.* | 331 | 13,329 | ||||||
Griffon Corp. | 785 | 13,698 | ||||||
JELD-WEN Holding, Inc.* | 617 | 10,649 | ||||||
Masonite International Corp.* | 241 | 12,867 | ||||||
Patrick Industries, Inc.* | 284 | 10,264 | ||||||
PGT Innovations, Inc.* | 781 | 12,496 | ||||||
Quanex Building Products Corp. | 721 | 12,416 | ||||||
Universal Forest Products, Inc. | 355 | 13,880 | ||||||
|
| |||||||
147,259 | ||||||||
Capital Markets 2.1% |
| |||||||
Associated Capital Group, Inc. (Class A Stock) | 343 | 11,923 | ||||||
B. Riley Financial, Inc. | 647 | 13,691 | ||||||
Blucora, Inc.* | 456 | 10,296 | ||||||
Brightsphere Investment Group, Inc. | 1,051 | 9,554 | ||||||
Cowen, Inc. (Class A Stock)* | 835 | 13,034 | ||||||
Diamond Hill Investment Group, Inc. | 96 | 12,950 | ||||||
Donnelley Financial Solutions, Inc.* | 954 | 10,141 | ||||||
GAIN Capital Holdings, Inc.(a) | 3,154 | 14,351 | ||||||
INTL. FCStone, Inc.* | 339 | 13,292 | ||||||
Oppenheimer Holdings, Inc. (Class A Stock) | 497 | 13,797 | ||||||
Piper Jaffray Cos. | 190 | 13,824 | ||||||
Stifel Financial Corp. | 225 | 12,019 |
See Notes to Financial Statements.
76 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Capital Markets (cont’d.) | ||||||||
Virtus Investment Partners, Inc. | 126 | $ | 13,443 | |||||
Waddell & Reed Financial, Inc. (Class A Stock) | 803 | 12,984 | ||||||
Westwood Holdings Group, Inc. | 388 | 10,651 | ||||||
WisdomTree Investments, Inc. | 2,164 | 10,409 | ||||||
|
| |||||||
196,359 | ||||||||
Chemicals 2.1% |
| |||||||
AdvanSix, Inc.* | 536 | 11,974 | ||||||
Ferro Corp.* | 862 | 8,784 | ||||||
Flotek Industries, Inc.* | 4,206 | 8,791 | ||||||
Hawkins, Inc. | 348 | 15,434 | ||||||
HB Fuller Co. | 274 | 11,675 | ||||||
Innospec, Inc. | 141 | 11,728 | ||||||
Intrepid Potash, Inc.* | 4,064 | 12,070 | ||||||
Kronos Worldwide, Inc. | 887 | 9,713 | ||||||
Livent Corp.* | 1,914 | 11,771 | ||||||
Minerals Technologies, Inc. | 242 | 11,664 | ||||||
Orion Engineered Carbons SA (Luxembourg) | 662 | 9,208 | ||||||
PolyOne Corp. | 410 | 13,124 | ||||||
PQ Group Holdings, Inc.* | 802 | 11,461 | ||||||
Rayonier Advanced Materials, Inc. | 2,304 | 8,087 | ||||||
Stepan Co. | 160 | 15,262 | ||||||
Trecora Resources* | 1,485 | 13,439 | ||||||
Tredegar Corp. | 843 | 14,576 | ||||||
|
| |||||||
198,761 | ||||||||
Commercial Services & Supplies 2.4% |
| |||||||
ACCO Brands Corp. | 1,640 | 15,203 | ||||||
Brady Corp. (Class A Stock) | 290 | 13,691 | ||||||
BrightView Holdings, Inc.* | 733 | 13,436 | ||||||
CECO Environmental Corp.* | 1,390 | 9,660 | ||||||
Deluxe Corp. | 325 | 14,976 | ||||||
Ennis, Inc. | 684 | 13,755 | ||||||
HNI Corp. | 381 | 11,883 | ||||||
Kimball International, Inc. (Class B Stock) | 844 | 14,812 | ||||||
Knoll, Inc. | 559 | 12,891 | ||||||
Matthews International Corp. (Class A Stock) | 406 | 11,900 | ||||||
McGrath RentCorp | 210 | 13,446 | ||||||
Mobile Mini, Inc. | 432 | 13,504 | ||||||
PICO Holdings, Inc.* | 1,157 | 11,142 | ||||||
Quad/Graphics, Inc. | 1,681 | 15,112 | ||||||
SP Plus Corp.* | 372 | 12,838 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 77 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Commercial Services & Supplies (cont’d.) |
| |||||||
Steelcase, Inc. (Class A Stock) | 818 | $ | 12,704 | |||||
UniFirst Corp. | 71 | 13,910 | ||||||
|
| |||||||
224,863 | ||||||||
Communications Equipment 1.1% |
| |||||||
ADTRAN, Inc. | 955 | 9,808 | ||||||
CalAmp Corp.* | 1,210 | 11,616 | ||||||
Comtech Telecommunications Corp. | 498 | 13,321 | ||||||
Digi International, Inc.* | 1,024 | 13,087 | ||||||
Infinera Corp.* | 4,698 | 25,040 | ||||||
NETGEAR, Inc.* | 516 | 17,916 | ||||||
NetScout Systems, Inc.* | 512 | 11,341 | ||||||
|
| |||||||
102,129 | ||||||||
Construction & Engineering 0.8% |
| |||||||
Arcosa, Inc. | 355 | 11,534 | ||||||
EMCOR Group, Inc. | 149 | 13,029 | ||||||
IES Holdings, Inc.* | 784 | 14,794 | ||||||
Northwest Pipe Co.* | 542 | 12,466 | ||||||
Primoris Services Corp. | 634 | 12,388 | ||||||
Tutor Perini Corp.* | 913 | 9,121 | ||||||
|
| |||||||
73,332 | ||||||||
Construction Materials 0.1% |
| |||||||
United States Lime & Minerals, Inc. | 162 | 12,502 | ||||||
Consumer Finance 1.0% |
| |||||||
Encore Capital Group, Inc.* | 385 | 14,206 | ||||||
Enova International, Inc.* | 593 | 14,173 | ||||||
EZCORP, Inc. (Class A Stock)* | 1,469 | 11,561 | ||||||
Medallion Financial Corp.* | 2,126 | 10,099 | ||||||
Nelnet, Inc. (Class A Stock) | 221 | 14,818 | ||||||
PRA Group, Inc.* | 434 | 14,817 | ||||||
Regional Management Corp.* | 480 | 12,360 | ||||||
|
| |||||||
92,034 | ||||||||
Containers & Packaging 0.4% |
| |||||||
Greif, Inc., |
| |||||||
(Class A Stock) | 395 | 13,900 | ||||||
(Class B Stock) | 302 | 12,566 | ||||||
UFP Technologies, Inc.* | 326 | 13,621 | ||||||
|
| |||||||
40,087 |
See Notes to Financial Statements.
78 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Distributors 0.1% |
| |||||||
Weyco Group, Inc. | 473 | $ | 11,603 | |||||
Diversified Consumer Services 0.5% |
| |||||||
Adtalem Global Education, Inc.* | 282 | 12,047 | ||||||
American Public Education, Inc.* | 410 | 9,934 | ||||||
K12, Inc.* | 426 | 11,225 | ||||||
Laureate Education, Inc. (Class A Stock)* | 846 | 15,482 | ||||||
|
| |||||||
48,688 | ||||||||
Diversified Financial Services 0.4% |
| |||||||
Banco Latinoamericano de Comercio Exterior SA (Panama) (Class E Stock) | 638 | 11,567 | ||||||
FGL Holdings (Bermuda) | 1,558 | 12,433 | ||||||
Marlin Business Services Corp. | 598 | 12,934 | ||||||
|
| |||||||
36,934 | ||||||||
Diversified Telecommunication Services 0.2% |
| |||||||
Vonage Holdings Corp.* | 1,040 | 13,749 | ||||||
Electric Utilities 0.8% |
| |||||||
ALLETE, Inc. | 154 | 13,202 | ||||||
Genie Energy Ltd. (Class B Stock) | 1,113 | 7,969 | ||||||
MGE Energy, Inc. | 181 | 13,729 | ||||||
Otter Tail Corp. | 251 | 12,706 | ||||||
PNM Resources, Inc. | 262 | 13,365 | ||||||
Portland General Electric Co. | 241 | 13,710 | ||||||
|
| |||||||
74,681 | ||||||||
Electrical Equipment 0.7% |
| |||||||
AZZ, Inc. | 288 | 11,886 | ||||||
Encore Wire Corp. | 240 | 12,958 | ||||||
Powell Industries, Inc. | 357 | 12,966 | ||||||
Preformed Line Products Co. | 226 | 11,582 | ||||||
Thermon Group Holdings, Inc.* | 512 | 11,136 | ||||||
|
| |||||||
60,528 | ||||||||
Electronic Equipment, Instruments & Components 2.4% |
| |||||||
Anixter International, Inc.* | 223 | 13,373 | ||||||
AVX Corp. | 755 | 10,230 | ||||||
Belden, Inc. | 230 | 10,490 | ||||||
Benchmark Electronics, Inc. | 496 | 13,134 | ||||||
CTS Corp. | 494 | 14,094 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 79 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Electronic Equipment, Instruments & Components (cont’d.) |
| |||||||
Daktronics, Inc. | 2,070 | $ | 14,966 | |||||
ePlus, Inc.* | 189 | 15,445 | ||||||
Insight Enterprises, Inc.* | 244 | 11,727 | ||||||
Kimball Electronics, Inc.* | 883 | 11,664 | �� | |||||
Knowles Corp.* | 740 | 15,007 | ||||||
Methode Electronics, Inc. | 471 | 14,950 | ||||||
MTS Systems Corp. | 233 | 13,251 | ||||||
PC Connection, Inc. | 388 | 13,669 | ||||||
ScanSource, Inc.* | 418 | 11,813 | ||||||
Tech Data Corp.* | 130 | 12,055 | ||||||
Vishay Intertechnology, Inc. | 831 | 13,155 | ||||||
Vishay Precision Group, Inc.* | 330 | 10,312 | ||||||
|
| |||||||
219,335 | ||||||||
Energy Equipment & Services 1.5% |
| |||||||
Archrock, Inc. | 1,296 | 12,584 | ||||||
C&J Energy Services, Inc.* | 1,145 | 10,946 | ||||||
Covia Holdings Corp.(a)* | 7,528 | 11,292 | ||||||
Exterran Corp.* | 957 | 10,096 | ||||||
Forum Energy Technologies, Inc.* | 4,491 | 6,332 | ||||||
Independence Contract Drilling, Inc.* | 9,532 | 10,009 | ||||||
Keane Group, Inc.* | 1,989 | 10,542 | ||||||
Mammoth Energy Services, Inc. | 1,714 | 6,239 | ||||||
Matrix Service Co.* | 642 | 12,756 | ||||||
ProPetro Holding Corp.* | 648 | 6,901 | ||||||
RPC, Inc.(a) | 1,903 | 10,105 | ||||||
SEACOR Holdings, Inc.* | 279 | 13,105 | ||||||
Select Energy Services, Inc. (Class A Stock)* | 1,217 | 9,931 | ||||||
Tidewater, Inc.* | 579 | 9,125 | ||||||
|
| |||||||
139,963 | ||||||||
Entertainment 0.4% |
| |||||||
Marcus Corp. (The) | 399 | 13,390 | ||||||
Reading International, Inc. (Class A Stock)* | 1,015 | 12,586 | ||||||
Rosetta Stone, Inc.* | 574 | 10,476 | ||||||
|
| |||||||
36,452 | ||||||||
Equity Real Estate Investment Trusts (REITs) 7.6% |
| |||||||
Acadia Realty Trust | 479 | 13,101 | ||||||
Alexander & Baldwin, Inc. | 566 | 12,956 | ||||||
Armada Hoffler Properties, Inc. | 783 | 13,577 |
See Notes to Financial Statements.
80 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Equity Real Estate Investment Trusts (REITs) (cont’d.) |
| |||||||
Ashford Hospitality Trust, Inc. | 5,095 | $ | 14,266 | |||||
Braemar Hotels & Resorts, Inc. | 1,393 | 12,774 | ||||||
BRT Apartments Corp. | 1,038 | 15,030 | ||||||
CatchMark Timber Trust, Inc. (Class A Stock) | 1,237 | 12,259 | ||||||
CBL & Associates Properties, Inc. | 11,829 | 10,764 | ||||||
Cedar Realty Trust, Inc. | 5,018 | 11,893 | ||||||
Chatham Lodging Trust | 679 | 11,265 | ||||||
Chesapeake Lodging Trust | 458 | 11,793 | ||||||
City Office REIT, Inc. (Canada) | 1,070 | 14,488 | ||||||
CoreCivic, Inc. | 657 | 11,136 | ||||||
CorePoint Lodging, Inc. | 1,027 | 9,346 | ||||||
DiamondRock Hospitality Co. | 1,295 | 12,264 | ||||||
Easterly Government Properties, Inc. | 716 | 14,714 | ||||||
First Industrial Realty Trust, Inc. | 353 | 13,749 | ||||||
Franklin Street Properties Corp. | 1,742 | 13,187 | ||||||
Front Yard Residential Corp. (Virgin Islands) | 1,108 | 12,288 | ||||||
Getty Realty Corp. | 411 | 13,053 | ||||||
Gladstone Commercial Corp. | 612 | 13,874 | ||||||
Gladstone Land Corp. | 1,137 | 13,087 | ||||||
Healthcare Realty Trust, Inc. | 405 | 13,458 | ||||||
Hersha Hospitality Trust (Class A Stock) | 747 | 10,383 | ||||||
Independence Realty Trust, Inc. | 1,105 | 15,371 | ||||||
Industrial Logistics Properties Trust | 644 | 13,775 | ||||||
Investors Real Estate Trust | 216 | 14,958 | ||||||
iStar, Inc. | 1,028 | 13,158 | ||||||
Jernigan Capital, Inc. | 647 | 12,494 | ||||||
Kite Realty Group Trust | 832 | 11,889 | ||||||
Lexington Realty Trust | 1,391 | 14,452 | ||||||
Mack-Cali Realty Corp. | 563 | 11,468 | ||||||
New Senior Investment Group, Inc. | 1,945 | 12,156 | ||||||
Office Properties Income Trust | 449 | 12,172 | ||||||
One Liberty Properties, Inc. | 454 | 12,158 | ||||||
Pebblebrook Hotel Trust | 467 | 12,595 | ||||||
Physicians Realty Trust | 752 | 13,025 | ||||||
Piedmont Office Realty Trust, Inc. (Class A Stock) | 648 | 12,791 | ||||||
Retail Value, Inc. | 387 | 14,315 | ||||||
Rexford Industrial Realty, Inc. | 320 | 14,141 | ||||||
RLJ Lodging Trust | 675 | 10,942 | ||||||
RPT Realty | 1,089 | 12,959 | ||||||
Sabra Health Care REIT, Inc. | 638 | 13,794 | ||||||
Saul Centers, Inc. | 242 | 12,156 | ||||||
Senior Housing Properties Trust | 1,524 | 12,939 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 81 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Equity Real Estate Investment Trusts (REITs) (cont’d.) |
| |||||||
Summit Hotel Properties, Inc. | 1,170 | $ | 13,057 | |||||
Sunstone Hotel Investors, Inc. | 961 | 12,628 | ||||||
Terreno Realty Corp. | 267 | 13,500 | ||||||
UMH Properties, Inc. | 1,015 | 13,053 | ||||||
Universal Health Realty Income Trust | 147 | 14,213 | ||||||
Urban Edge Properties | 762 | 13,343 | ||||||
Urstadt Biddle Properties, Inc. (Class A Stock) | 659 | 13,832 | ||||||
Washington Prime Group, Inc.(a) | 3,397 | 10,972 | ||||||
Whitestone REIT (Class B Stock) | 958 | 11,898 | ||||||
Xenia Hotels & Resorts, Inc. | 667 | 13,480 | ||||||
|
| |||||||
708,389 | ||||||||
Food & Staples Retailing 0.8% |
| |||||||
Natural Grocers by Vitamin Cottage, Inc.* | 1,331 | 12,565 | ||||||
PriceSmart, Inc. | 241 | 14,564 | ||||||
SpartanNash Co. | 1,165 | 12,547 | ||||||
United Natural Foods, Inc.* | 1,393 | 11,200 | ||||||
Village Super Market, Inc. (Class A Stock) | 515 | 12,859 | ||||||
Weis Markets, Inc. | 359 | 13,724 | ||||||
|
| |||||||
77,459 | ||||||||
Food Products 0.8% |
| |||||||
Alico, Inc. | 457 | 13,641 | ||||||
B&G Foods, Inc.(a) | 628 | 10,632 | ||||||
Darling Ingredients, Inc.* | 638 | 11,867 | ||||||
Fresh Del Monte Produce, Inc. | 496 | 12,916 | ||||||
Lancaster Colony Corp. | 86 | 12,547 | ||||||
Seneca Foods Corp. (Class A Stock)* | 466 | 12,806 | ||||||
|
| |||||||
74,409 | ||||||||
Gas Utilities 0.7% |
| |||||||
New Jersey Resources Corp. | 283 | 12,944 | ||||||
ONE Gas, Inc. | 145 | 13,284 | ||||||
RGC Resources, Inc. | 447 | 12,686 | ||||||
Southwest Gas Holdings, Inc. | 159 | 14,506 | ||||||
Spire, Inc. | 156 | 13,244 | ||||||
|
| |||||||
66,664 | ||||||||
Health Care Equipment & Supplies 1.5% |
| |||||||
AngioDynamics, Inc.* | 639 | 11,738 | ||||||
Apyx Medical Corp.* | 1,858 | 13,210 |
See Notes to Financial Statements.
82 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Equipment & Supplies (cont’d.) |
| |||||||
Avanos Medical, Inc.* | 306 | $ | 10,153 | |||||
Cerus Corp.* | 2,471 | 13,269 | ||||||
Integer Holdings Corp.* | 162 | 11,729 | ||||||
Invacare Corp. | 2,597 | 12,570 | ||||||
LivaNova PLC (United Kingdom)* | 183 | 14,206 | ||||||
Meridian Bioscience, Inc. | 1,128 | 10,412 | ||||||
OraSure Technologies, Inc.* | 1,459 | 9,629 | ||||||
Orthofix Medical, Inc.* | 263 | 13,371 | ||||||
SeaSpine Holdings Corp.* | 1,025 | 11,265 | ||||||
Varex Imaging Corp.* | 437 | 11,515 | ||||||
|
| |||||||
143,067 | ||||||||
Health Care Providers & Services 1.4% |
| |||||||
Brookdale Senior Living, Inc.* | 1,627 | 13,309 | ||||||
Cross Country Healthcare, Inc.* | 1,470 | 15,067 | ||||||
Diplomat Pharmacy, Inc.* | 2,276 | 13,223 | ||||||
Enzo Biochem, Inc.* | 3,650 | 11,862 | ||||||
Magellan Health, Inc.* | 183 | 11,531 | ||||||
National HealthCare Corp. | 167 | 13,494 | ||||||
Owens & Minor, Inc. | 3,807 | 19,340 | ||||||
Patterson Cos., Inc. | 630 | 10,534 | ||||||
Surgery Partners, Inc.* | 1,692 | 10,896 | ||||||
Triple-S Management Corp. (Puerto Rico) (Class B Stock)* | 552 | 11,327 | ||||||
|
| |||||||
130,583 | ||||||||
Health Care Technology 0.5% |
| |||||||
Allscripts Healthcare Solutions, Inc.* | 1,163 | 10,560 | ||||||
Computer Programs & Systems, Inc. | 485 | 10,258 | ||||||
Evolent Health, Inc. (Class A Stock)* | 1,805 | 12,400 | ||||||
HealthStream, Inc.* | 502 | 12,686 | ||||||
|
| |||||||
45,904 | ||||||||
Hotels, Restaurants & Leisure 1.1% |
| |||||||
BBX Capital Corp. (Class A Stock) | 2,899 | 12,031 | ||||||
Century Casinos, Inc.* | 1,370 | 10,522 | ||||||
Del Taco Restaurants, Inc.* | 991 | 11,079 | ||||||
Denny’s Corp.* | 628 | 14,815 | ||||||
Golden Entertainment, Inc.* | 920 | 13,046 | ||||||
Jack in the Box, Inc. | 167 | 14,248 | ||||||
Nathan’s Famous, Inc. | 170 | 11,322 | ||||||
RCI Hospitality Holdings, Inc. | 774 | 13,777 | ||||||
|
| |||||||
100,840 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 83 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Household Durables 2.1% |
| |||||||
Bassett Furniture Industries, Inc. | 1,004 | $ | 12,229 | |||||
Beazer Homes USA, Inc.* | 1,310 | 16,414 | ||||||
Century Communities, Inc.* | 491 | 13,836 | ||||||
Ethan Allen Interiors, Inc. | 633 | 10,888 | ||||||
Flexsteel Industries, Inc. | 787 | 11,915 | ||||||
Green Brick Partners, Inc.* | 1,435 | 13,188 | ||||||
Hooker Furniture Corp. | 626 | 11,180 | ||||||
Lifetime Brands, Inc. | 1,308 | 10,098 | ||||||
M/I Homes, Inc.* | 504 | 18,215 | ||||||
MDC Holdings, Inc. | 366 | 14,153 | ||||||
Meritage Homes Corp.* | 248 | 16,204 | ||||||
Taylor Morrison Home Corp. (Class A Stock)* | 623 | 14,865 | ||||||
TRI Pointe Group, Inc.(a)* | 1,050 | 14,700 | ||||||
Tupperware Brands Corp. | 709 | 9,224 | ||||||
ZAGG, Inc.* | 1,858 | 11,910 | ||||||
|
| |||||||
199,019 | ||||||||
Household Products 0.3% |
| |||||||
Central Garden & Pet Co.* | 466 | 12,312 | ||||||
Central Garden & Pet Co. (Class A Stock)* | 515 | 12,391 | ||||||
|
| |||||||
24,703 | ||||||||
Insurance 3.4% |
| |||||||
American Equity Investment Life Holding Co. | 487 | 10,495 | ||||||
Argo Group International Holdings Ltd. (Bermuda) | 179 | 11,764 | ||||||
CNO Financial Group, Inc. | 804 | 11,642 | ||||||
Donegal Group, Inc. (Class A Stock) | 890 | 12,843 | ||||||
FBL Financial Group, Inc. (Class A Stock) | 189 | 10,249 | ||||||
FedNat Holding Co. | 955 | 11,680 | ||||||
Genworth Financial, Inc. (Class A Stock)* | 3,468 | 15,363 | ||||||
Global Indemnity Ltd. (Cayman Islands) | 455 | 11,716 | ||||||
Hallmark Financial Services, Inc.* | 901 | 15,840 | ||||||
HCI Group, Inc. | 292 | 11,379 | ||||||
Heritage Insurance Holdings, Inc. | 821 | 10,763 | ||||||
Horace Mann Educators Corp. | 317 | 13,907 | ||||||
Independence Holding Co. | 350 | 12,957 | ||||||
Investors Title Co. | 74 | 10,893 | ||||||
National General Holdings Corp. | 539 | 12,710 | ||||||
National Western Life Group, Inc. (Class A Stock) | 47 | 12,117 | ||||||
NI Holdings, Inc.* | 747 | 12,550 | ||||||
Protective Insurance Corp. (Class B Stock) | 743 | 12,037 | ||||||
Safety Insurance Group, Inc. | 136 | 13,116 |
See Notes to Financial Statements.
84 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Insurance (cont’d.) |
| |||||||
Selective Insurance Group, Inc. | 171 | $ | 13,617 | |||||
Third Point Reinsurance Ltd. (Bermuda)* | 1,313 | 12,368 | ||||||
Tiptree, Inc. | 2,099 | 14,567 | ||||||
United Fire Group, Inc. | 278 | 12,554 | ||||||
United Insurance Holdings Corp. | 863 | 10,114 | ||||||
Universal Insurance Holdings, Inc. | 461 | 11,525 | ||||||
Watford Holdings Ltd. (Bermuda)* | 501 | 11,623 | ||||||
|
| |||||||
320,389 | ||||||||
Interactive Media & Services 0.2% |
| |||||||
Cars.com, Inc.* | 630 | 5,613 | ||||||
DHI Group, Inc.* | 3,362 | 12,204 | ||||||
|
| |||||||
17,817 | ||||||||
Internet & Direct Marketing Retail 0.4% |
| |||||||
Lands’ End, Inc.* | 1,166 | 9,036 | ||||||
Liquidity Services, Inc.* | 2,215 | 16,768 | ||||||
PetMed Express, Inc.(a) | 858 | 13,556 | ||||||
|
| |||||||
39,360 | ||||||||
IT Services 0.7% |
| |||||||
Information Services Group, Inc.* | 4,401 | 11,707 | ||||||
KBR, Inc. | 531 | 13,551 | ||||||
ManTech International Corp. (Class A Stock) | 202 | 14,197 | ||||||
Presidio, Inc. | 972 | 15,571 | ||||||
Sykes Enterprises, Inc.* | 469 | 13,601 | ||||||
|
| |||||||
68,627 | ||||||||
Leisure Products 0.8% |
| |||||||
Acushnet Holdings Corp. | 540 | 14,024 | ||||||
American Outdoor Brands Corp.* | 1,470 | 8,835 | ||||||
Clarus Corp. | 916 | 10,085 | ||||||
Escalade, Inc. | 1,128 | 11,652 | ||||||
Johnson Outdoors, Inc. (Class A Stock) | 177 | 9,912 | ||||||
Sturm Ruger & Co., Inc. | 245 | 10,047 | ||||||
Vista Outdoor, Inc.* | 1,522 | 8,508 | ||||||
|
| |||||||
73,063 | ||||||||
Life Sciences Tools & Services 0.3% |
| |||||||
Cambrex Corp.* | 286 | 17,140 | ||||||
Syneos Health, Inc. (Class A Stock)* | 269 | 14,131 | ||||||
|
| |||||||
31,271 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 85 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Machinery 4.3% |
| |||||||
Actuant Corp. (Class A Stock) | 553 | $ | 12,282 | |||||
Altra Industrial Motion Corp. | 410 | 10,656 | ||||||
Astec Industries, Inc. | 423 | 11,675 | ||||||
Barnes Group, Inc. | 237 | 10,629 | ||||||
Blue Bird Corp.* | 707 | 12,896 | ||||||
Briggs & Stratton Corp. | 1,322 | 5,711 | ||||||
Columbus McKinnon Corp. | 324 | 10,488 | ||||||
Commercial Vehicle Group, Inc.* | 1,729 | 10,979 | ||||||
Eastern Co. (The) | 487 | 10,743 | ||||||
EnPro Industries, Inc. | 208 | 12,954 | ||||||
ESCO Technologies, Inc. | 162 | 12,333 | ||||||
Federal Signal Corp. | 501 | 14,885 | ||||||
Gencor Industries, Inc.* | 1,006 | 11,509 | ||||||
Gorman-Rupp Co. (The) | 380 | 11,351 | ||||||
Greenbrier Cos., Inc. (The) | 453 | 10,550 | ||||||
Hillenbrand, Inc. | 336 | 9,220 | ||||||
Hurco Cos., Inc. | 370 | 11,807 | ||||||
Hyster-Yale Materials Handling, Inc. | 248 | 13,528 | ||||||
Kennametal, Inc. | 351 | 10,491 | ||||||
LB Foster Co. (Class A Stock)* | 492 | 9,796 | ||||||
Luxfer Holdings PLC (United Kingdom) | 537 | 8,436 | ||||||
Lydall, Inc.* | 693 | 13,936 | ||||||
Milacron Holdings Corp.* | 969 | 15,359 | ||||||
Miller Industries, Inc. | 414 | 12,954 | ||||||
Mueller Industries, Inc. | 460 | 12,126 | ||||||
Park-Ohio Holdings Corp. | 415 | 11,284 | ||||||
Rexnord Corp.* | 473 | 12,383 | ||||||
Spartan Motors, Inc. | 1,296 | 16,342 | ||||||
SPX FLOW, Inc.* | 367 | 12,372 | ||||||
Standex International Corp. | 172 | 11,825 | ||||||
Terex Corp. | 454 | 11,273 | ||||||
TriMas Corp.* | 458 | 13,456 | ||||||
Wabash National Corp. | 854 | 11,649 | ||||||
Watts Water Technologies, Inc. (Class A Stock) | 145 | 13,286 | ||||||
|
| |||||||
401,164 | ||||||||
Marine 0.3% |
| |||||||
Costamare, Inc. (Monaco) | 2,564 | 14,846 | ||||||
Eagle Bulk Shipping, Inc.* | 2,332 | 10,727 | ||||||
|
| |||||||
25,573 |
See Notes to Financial Statements.
86 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Media 1.7% |
| |||||||
comScore, Inc.* | 2,485 | $ | 4,622 | |||||
Emerald Expositions Events, Inc. | 1,187 | 11,348 | ||||||
Entercom Communications Corp. (Class A Stock) | 2,161 | 7,693 | ||||||
Entravision Communications Corp. (Class A Stock) | 4,153 | 12,708 | ||||||
Gray Television, Inc.* | 769 | 11,766 | ||||||
Lee Enterprises, Inc.* | 6,191 | 11,020 | ||||||
Liberty Latin America Ltd., | ||||||||
(Class A Stock)* | 727 | 11,937 | ||||||
(Class C Stock)* | 729 | 12,021 | ||||||
MSG Networks, Inc. (Class A Stock)* | 586 | 9,610 | ||||||
National CineMedia, Inc. | 1,925 | 15,785 | ||||||
Saga Communications, Inc. (Class A Stock) | 443 | 12,643 | ||||||
Scholastic Corp. | 401 | 14,063 | ||||||
TEGNA, Inc. | 853 | 12,207 | ||||||
Tribune Publishing Co. | 1,586 | 12,133 | ||||||
|
| |||||||
159,556 | ||||||||
Metals & Mining 0.9% |
| |||||||
Commercial Metals Co. | 751 | 11,768 | ||||||
Haynes International, Inc. | 432 | 12,904 | ||||||
Kaiser Aluminum Corp. | 141 | 12,468 | ||||||
Schnitzer Steel Industries, Inc. (Class A Stock) | 570 | 12,620 | ||||||
Synalloy Corp. | 833 | 13,361 | ||||||
Warrior Met Coal, Inc. | 523 | 10,931 | ||||||
Worthington Industries, Inc. | 357 | 12,388 | ||||||
|
| |||||||
86,440 | ||||||||
Mortgage Real Estate Investment Trusts (REITs) 2.8% |
| |||||||
AG Mortgage Investment Trust, Inc. | 837 | 12,547 | ||||||
Anworth Mortgage Asset Corp. | 3,486 | 10,807 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 718 | 13,319 | ||||||
Ares Commercial Real Estate Corp. | 927 | 13,896 | ||||||
Arlington Asset Investment Corp. (Class A Stock) | 2,093 | 10,339 | ||||||
ARMOUR Residential REIT, Inc. | 683 | 11,215 | ||||||
Capstead Mortgage Corp. | 1,700 | 12,359 | ||||||
Cherry Hill Mortgage Investment Corp. | 833 | 10,021 | ||||||
Colony Credit Real Estate, Inc. | 787 | 9,861 | ||||||
Dynex Capital, Inc. | 748 | 10,562 | ||||||
Ellington Financial, Inc. | 733 | 12,805 | ||||||
Exantas Capital Corp. | 1,237 | 13,867 | ||||||
Great Ajax Corp. | 996 | 14,522 | ||||||
Invesco Mortgage Capital, Inc. | 884 | 13,287 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 87 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Mortgage Real Estate Investment Trusts (REITs) (cont’d.) |
| |||||||
Ladder Capital Corp. (Class A Stock) | 771 | $ | 12,937 | |||||
New York Mortgage Trust, Inc. | 2,207 | 13,573 | ||||||
Orchid Island Capital, Inc. (Class A Stock) | 2,086 | 11,327 | ||||||
PennyMac Mortgage Investment Trust | 653 | 14,209 | ||||||
Ready Capital Corp. | 911 | 13,373 | ||||||
Redwood Trust, Inc. | 804 | 13,346 | ||||||
Western Asset Mortgage Capital Corp. | 1,330 | 12,502 | ||||||
|
| |||||||
260,674 | ||||||||
Multiline Retail 0.1% |
| |||||||
Big Lots, Inc. | 442 | 10,055 | ||||||
Multi-Utilities 0.4% |
| |||||||
Black Hills Corp. | 167 | 12,810 | ||||||
NorthWestern Corp. | 181 | 13,112 | ||||||
Unitil Corp. | 221 | 13,342 | ||||||
|
| |||||||
39,264 | ||||||||
Oil, Gas & Consumable Fuels 3.1% |
| |||||||
Amplify Energy Corp.* | 2,353 | 14,024 | ||||||
Arch Coal, Inc. (Class A Stock)(a) | 143 | 10,948 | ||||||
Clean Energy Fuels Corp.* | 5,691 | 11,325 | ||||||
CONSOL Energy, Inc.* | 513 | 8,598 | ||||||
CVR Energy, Inc. | 257 | 10,223 | ||||||
Denbury Resources, Inc.* | 11,041 | 11,924 | ||||||
DHT Holdings, Inc. (Bermuda) | 2,215 | 12,448 | ||||||
Extraction Oil & Gas, Inc.(a)* | 3,320 | 13,380 | ||||||
Falcon Minerals Corp. | 1,615 | 9,464 | ||||||
Gulfport Energy Corp.* | 2,964 | 7,114 | ||||||
Hallador Energy Co. | 2,438 | 9,679 | ||||||
International Seaways, Inc.* | 698 | �� | 12,020 | |||||
Laredo Petroleum, Inc.* | 4,632 | 11,487 | ||||||
Montage Resources Corp.* | 2,562 | 7,635 | ||||||
Overseas Shipholding Group, Inc. (Class A Stock)* | 6,453 | 10,518 | ||||||
Panhandle Oil & Gas, Inc. (Class A Stock) | 1,068 | 12,207 | ||||||
Peabody Energy Corp. | 558 | 10,284 | ||||||
Penn Virginia Corp.* | 468 | 13,338 | ||||||
Ring Energy, Inc.* | 3,990 | 5,825 | ||||||
Roan Resources, Inc.(a)* | 8,716 | 9,849 | ||||||
SandRidge Energy, Inc.* | 1,980 | 9,266 | ||||||
Ship Finance International Ltd. | 1,087 | 15,294 | ||||||
SilverBow Resources, Inc.* | 1,022 | 8,871 |
See Notes to Financial Statements.
88 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Oil, Gas & Consumable Fuels (cont’d.) |
| |||||||
Southwestern Energy Co.* | 4,698 | $ | 7,423 | |||||
SRC Energy, Inc.* | 2,937 | 14,744 | ||||||
Teekay Tankers Ltd. (Class A Stock)* | 10,191 | 11,312 | ||||||
World Fuel Services Corp. | 369 | 14,170 | ||||||
|
| |||||||
293,370 | ||||||||
Paper & Forest Products 0.5% |
| |||||||
Louisiana-Pacific Corp. | 501 | 12,044 | ||||||
PH Glatfelter Co. | 796 | 11,446 | ||||||
Schweitzer-Mauduit International, Inc. | 402 | 13,483 | ||||||
Verso Corp. (Class A Stock)* | 699 | 7,137 | ||||||
|
| |||||||
44,110 | ||||||||
Personal Products 0.3% |
| |||||||
Edgewell Personal Care Co.* | 453 | 12,612 | ||||||
Nature’s Sunshine Products, Inc.* | 1,532 | 14,416 | ||||||
|
| |||||||
27,028 | ||||||||
Pharmaceuticals 0.7% |
| |||||||
Akorn, Inc.* | 2,665 | 7,702 | ||||||
Assertio Therapeutics, Inc.* | 4,089 | 5,888 | ||||||
Lannett Co., Inc.(a)* | 2,238 | 23,052 | ||||||
Mallinckrodt PLC* | 1,592 | 4,123 | ||||||
Menlo Therapeutics, Inc.* | 2,533 | 12,462 | ||||||
Prestige Consumer Healthcare, Inc.* | 423 | 13,485 | ||||||
|
| |||||||
66,712 | ||||||||
Professional Services 2.0% |
| |||||||
Acacia Research Corp.* | 4,451 | 11,617 | ||||||
ASGN, Inc.* | 226 | 14,118 | ||||||
BG Staffing, Inc. | 701 | 13,137 | ||||||
CBIZ, Inc.* | 618 | 13,806 | ||||||
FTI Consulting, Inc.* | 156 | 16,870 | ||||||
Heidrick & Struggles International, Inc. | 458 | 12,160 | ||||||
Huron Consulting Group, Inc.* | 251 | 15,364 | ||||||
ICF International, Inc. | 182 | 15,408 | ||||||
InnerWorkings, Inc.* | 3,571 | 15,141 | ||||||
Kelly Services, Inc. (Class A Stock) | 509 | 12,323 | ||||||
Mistras Group, Inc.* | 802 | 11,709 | ||||||
Navigant Consulting, Inc. | 517 | 14,409 | ||||||
Resources Connection, Inc. | 816 | 13,505 | ||||||
TrueBlue, Inc.* | 548 | 10,636 | ||||||
|
| |||||||
190,203 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 89 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Real Estate Management & Development 1.1% |
| |||||||
Altisource Portfolio Solutions SA (Luxembourg)* | 590 | $ | 11,682 | |||||
Consolidated-Tomoka Land Co. | 232 | 14,811 | ||||||
Cushman & Wakefield PLC* | 735 | 12,377 | ||||||
Forestar Group, Inc.* | 664 | 12,656 | ||||||
FRP Holdings, Inc.* | 268 | 13,183 | ||||||
Kennedy-Wilson Holdings, Inc. | 695 | 14,581 | ||||||
RE/MAX Holdings, Inc. (Class A Stock) | 409 | 10,499 | ||||||
St Joe Co. (The)* | 721 | 12,964 | ||||||
|
| |||||||
102,753 | ||||||||
Road & Rail 0.5% |
| |||||||
ArcBest Corp. | 493 | 14,598 | ||||||
Covenant Transportation Group, Inc. (Class A Stock)* | 910 | 13,086 | ||||||
Daseke, Inc.* | 3,774 | 6,642 | ||||||
US Xpress Enterprises, Inc. (Class A Stock)* | 2,476 | 10,399 | ||||||
|
| |||||||
44,725 | ||||||||
Semiconductors & Semiconductor Equipment 2.4% |
| |||||||
Amkor Technology, Inc.* | 1,802 | 15,767 | ||||||
AXT, Inc.* | 3,379 | 11,455 | ||||||
Cirrus Logic, Inc.* | 319 | 17,111 | ||||||
Diodes, Inc.* | 338 | 12,354 | ||||||
DSP Group, Inc.* | 968 | 13,397 | ||||||
FormFactor, Inc.* | 847 | 14,475 | ||||||
GSI Technology, Inc.* | 1,533 | 12,877 | ||||||
Nanometrics, Inc.* | 397 | 10,834 | ||||||
NeoPhotonics Corp.* | 3,095 | 19,375 | ||||||
PDF Solutions, Inc.* | 1,008 | 11,804 | ||||||
Photronics, Inc.* | 1,441 | 15,563 | ||||||
Rambus, Inc.* | 1,116 | 13,995 | ||||||
Rudolph Technologies, Inc.* | 495 | 10,885 | ||||||
SMART Global Holdings, Inc.* | 553 | 15,711 | ||||||
Synaptics, Inc.* | 448 | 14,345 | ||||||
Xperi Corp. | 654 | 11,981 | ||||||
|
| |||||||
221,929 | ||||||||
Software 1.4% |
| |||||||
American Software, Inc. (Class A Stock) | 1,012 | 15,949 | ||||||
Avaya Holdings Corp.* | 1,188 | 16,775 | ||||||
Cloudera, Inc.(a)* | 2,597 | 18,543 | ||||||
Monotype Imaging Holdings, Inc. | 759 | 14,990 |
See Notes to Financial Statements.
90 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Software (cont’d.) |
| |||||||
OneSpan, Inc.* | 965 | $ | 13,027 | |||||
QAD, Inc. (Class A Stock) | 312 | 12,642 | ||||||
SecureWorks Corp. (Class A Stock)* | 1,093 | 13,193 | ||||||
TiVo Corp. | 1,832 | 13,795 | ||||||
Verint Systems, Inc.* | 265 | 14,122 | ||||||
|
| |||||||
133,036 | ||||||||
Specialty Retail 3.8% |
| |||||||
Aaron’s, Inc. | 209 | 13,399 | ||||||
American Eagle Outfitters, Inc. | 706 | 11,875 | ||||||
Barnes & Noble Education, Inc.* | 3,908 | 15,241 | ||||||
Bed Bath & Beyond, Inc.(a) | 1,153 | 11,149 | ||||||
Buckle, Inc. (The)(a) | 772 | 15,131 | ||||||
Cato Corp. (The) (Class A Stock) | 934 | 15,999 | ||||||
Citi Trends, Inc. | 867 | 14,574 | ||||||
Conn’s, Inc.* | 757 | 15,261 | ||||||
Container Store Group, Inc. (The)* | 1,761 | 7,889 | ||||||
Express, Inc.* | 5,115 | 10,844 | ||||||
GameStop Corp. (Class A Stock) | 2,431 | 9,651 | ||||||
Genesco, Inc.* | 301 | 10,740 | ||||||
Group 1 Automotive, Inc. | 165 | 12,329 | ||||||
Haverty Furniture Cos., Inc. | 758 | 14,516 | ||||||
Hibbett Sports, Inc.* | 686 | 11,346 | ||||||
Hudson Ltd. (Class A Stock)* | 929 | 10,080 | ||||||
Lithia Motors, Inc. (Class A Stock) | 112 | 14,680 | ||||||
MarineMax, Inc.* | 730 | 10,556 | ||||||
Murphy USA, Inc.* | 153 | 13,678 | ||||||
Office Depot, Inc. | 6,022 | 7,829 | ||||||
RTW RetailWinds, Inc.* | 7,162 | 7,234 | ||||||
Sally Beauty Holdings, Inc.* | 1,079 | 13,196 | ||||||
Sleep Number Corp.* | 330 | 13,807 | ||||||
Sonic Automotive, Inc. (Class A Stock) | 581 | 15,635 | ||||||
Sportsman’s Warehouse Holdings, Inc.* | 3,154 | 13,310 | ||||||
Tilly’s, Inc. (Class A Stock) | 1,666 | 17,843 | ||||||
Winmark Corp. | 78 | 12,675 | ||||||
Zumiez, Inc.* | 554 | 14,393 | ||||||
|
| |||||||
354,860 | ||||||||
Textiles, Apparel & Luxury Goods 1.3% |
| |||||||
Culp, Inc. | 745 | 10,460 | ||||||
Delta Apparel, Inc.* | 604 | 13,554 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 91 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Textiles, Apparel & Luxury Goods (cont’d.) |
| |||||||
Fossil Group, Inc.* | 1,207 | $ | 15,450 | |||||
G-III Apparel Group Ltd.* | 465 | 9,537 | ||||||
Kontoor Brands, Inc.* | 430 | 14,723 | ||||||
Movado Group, Inc. | 491 | 10,566 | ||||||
Rocky Brands, Inc. | 488 | 14,220 | ||||||
Superior Group of Cos., Inc. | 748 | 10,607 | ||||||
Unifi, Inc.* | 704 | 13,545 | ||||||
Vera Bradley, Inc.* | 1,159 | 12,274 | ||||||
|
| |||||||
124,936 | ||||||||
Thrifts & Mortgage Finance 4.4% | ||||||||
Axos Financial, Inc.* | 496 | 12,851 | ||||||
Bridgewater Bancshares, Inc.* | 1,137 | 12,655 | ||||||
ESSA Bancorp, Inc. | 835 | 12,775 | ||||||
Essent Group Ltd.* | 273 | 13,241 | ||||||
First Defiance Financial Corp. | 489 | 12,787 | ||||||
Flagstar Bancorp, Inc. | 426 | 15,485 | ||||||
FS Bancorp, Inc. | 290 | 14,036 | ||||||
Home Bancorp, Inc. | 356 | 13,272 | ||||||
HomeStreet, Inc.* | 441 | 11,629 | ||||||
Luther Burbank Corp. | 1,188 | 12,426 | ||||||
Meridian Bancorp, Inc. | 699 | 12,219 | ||||||
MMA Capital Holdings, Inc.* | 405 | 11,988 | ||||||
OceanFirst Financial Corp. | 543 | 11,414 | ||||||
Ocwen Financial Corp.* | 6,134 | 10,980 | ||||||
OP Bancorp | 1,346 | 12,787 | ||||||
PDL Community Bancorp* | 935 | 13,081 | ||||||
PennyMac Financial Services, Inc.* | 582 | 17,221 | ||||||
Provident Financial Holdings, Inc. | 609 | 12,296 | ||||||
Provident Financial Services, Inc. | 541 | 12,881 | ||||||
Radian Group, Inc. | 554 | 12,493 | ||||||
Riverview Bancorp, Inc. | 1,560 | 10,998 | ||||||
Southern Missouri Bancorp, Inc. | 401 | 13,393 | ||||||
Sterling Bancorp, Inc. | 1,445 | 13,482 | ||||||
Territorial Bancorp, Inc. | 487 | 13,319 | ||||||
Timberland Bancorp, Inc. | 454 | 11,609 | ||||||
United Community Financial Corp. | 1,439 | 13,886 | ||||||
United Financial Bancorp, Inc. | 863 | 10,788 | ||||||
Walker & Dunlop, Inc. | 244 | 13,630 | ||||||
Washington Federal, Inc. | 378 | 13,457 | ||||||
Waterstone Financial, Inc. | 786 | 13,040 | ||||||
Western New England Bancorp, Inc. | 1,396 | 12,410 | ||||||
WSFS Financial Corp. | 317 | 13,067 | ||||||
|
| |||||||
411,596 |
See Notes to Financial Statements.
92 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Tobacco 0.1% |
| |||||||
Universal Corp. | 233 | $ | 11,664 | |||||
Trading Companies & Distributors 2.2% |
| |||||||
Aircastle Ltd. | 629 | 13,744 | ||||||
Beacon Roofing Supply, Inc.* | 356 | 11,349 | ||||||
BMC Stock Holdings, Inc.* | 610 | 15,512 | ||||||
DXP Enterprises, Inc.* | 383 | 12,428 | ||||||
Foundation Building Materials, Inc.* | 767 | 13,139 | ||||||
GATX Corp. | 173 | 12,840 | ||||||
GMS, Inc.* | 577 | 16,999 | ||||||
Kaman Corp. | 210 | 12,262 | ||||||
MRC Global, Inc.* | 793 | 9,968 | ||||||
Rush Enterprises, Inc., | ||||||||
(Class A Stock) | 367 | 13,253 | ||||||
(Class B Stock) | 360 | 13,385 | ||||||
Systemax, Inc. | 627 | 12,584 | ||||||
Textainer Group Holdings Ltd.* | 1,358 | 10,823 | ||||||
Titan Machinery, Inc.* | 722 | 10,873 | ||||||
Veritiv Corp.* | 734 | 12,155 | ||||||
Willis Lease Finance Corp.* | 225 | 13,898 | ||||||
|
| |||||||
205,212 | ||||||||
Water Utilities 0.7% |
| |||||||
AquaVenture Holdings Ltd.* | 703 | 12,429 | ||||||
Artesian Resources Corp. (Class A Stock) | 366 | 13,322 | ||||||
Consolidated Water Co. Ltd. (Cayman Islands) | 1,006 | 14,748 | ||||||
Middlesex Water Co. | 214 | 13,063 | ||||||
SJW Group | 212 | 14,486 | ||||||
|
| |||||||
68,048 | ||||||||
Wireless Telecommunication Services 0.1% |
| |||||||
Spok Holdings, Inc. | 915 | 10,751 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 9,258,085 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 3.4% | ||||||||
AFFILIATED MUTUAL FUND 2.5% | ||||||||
PGIM Institutional Money Market Fund (cost $229,911; includes $229,558 of cash collateral for securities on loan)(b)(w) | 229,865 | 229,888 | ||||||
|
|
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 93 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
TIME DEPOSIT 0.9% | ||||||||||||||||
JPMorgan Chase (cost $88,275) | 1.490 | % | 09/03/19 | 88 | $ | 88,275 | ||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM TERM INVESTMENTS | 318,163 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 102.4% | 9,576,248 | |||||||||||||||
Liabilities in excess of other assets (2.4)% | (222,803) | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 9,353,445 | ||||||||||||||
|
|
The following abbreviations are used in the annual report:
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $168,852; cash collateral of $229,558 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Institutional Money Market Fund. |
* | Non-income producing security. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Aerospace & Defense | $ | 51,192 | $ | — | $ | — | ||||||
Air Freight & Logistics | 27,891 | — | — | |||||||||
Airlines | 41,478 | — | — |
See Notes to Financial Statements.
94 |
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Auto Components | $ | 63,194 | $ | — | $ | — | ||||||
Banks | 1,779,375 | — | — | |||||||||
Biotechnology | 150,473 | — | — | |||||||||
Building Products | 147,259 | — | — | |||||||||
Capital Markets | 196,359 | — | — | |||||||||
Chemicals | 198,761 | — | — | |||||||||
Commercial Services & Supplies | 224,863 | — | — | |||||||||
Communications Equipment | 102,129 | — | — | |||||||||
Construction & Engineering | 73,332 | — | — | |||||||||
Construction Materials | 12,502 | — | — | |||||||||
Consumer Finance | 92,034 | — | — | |||||||||
Containers & Packaging | 40,087 | — | — | |||||||||
Distributors | 11,603 | — | — | |||||||||
Diversified Consumer Services | 48,688 | — | — | |||||||||
Diversified Financial Services | 36,934 | — | — | |||||||||
Diversified Telecommunication Services | 13,749 | — | — | |||||||||
Electric Utilities | 74,681 | — | — | |||||||||
Electrical Equipment | 60,528 | — | — | |||||||||
Electronic Equipment, Instruments & Components | 219,335 | — | — | |||||||||
Energy Equipment & Services | 139,963 | — | — | |||||||||
Entertainment | 36,452 | — | — | |||||||||
Equity Real Estate Investment Trusts (REITs) | 708,389 | — | — | |||||||||
Food & Staples Retailing | 77,459 | — | — | |||||||||
Food Products | 74,409 | — | — | |||||||||
Gas Utilities | 66,664 | — | — | |||||||||
Health Care Equipment & Supplies | 143,067 | — | — | |||||||||
Health Care Providers & Services | 130,583 | — | — | |||||||||
Health Care Technology | 45,904 | — | — | |||||||||
Hotels, Restaurants & Leisure | 100,840 | — | — | |||||||||
Household Durables | 199,019 | — | — | |||||||||
Household Products | 24,703 | — | — | |||||||||
Insurance | 320,389 | — | — | |||||||||
Interactive Media & Services | 17,817 | — | — | |||||||||
Internet & Direct Marketing Retail | 39,360 | — | — | |||||||||
IT Services | 68,627 | — | — | |||||||||
Leisure Products | 73,063 | — | — | |||||||||
Life Sciences Tools & Services | 31,271 | — | — | |||||||||
Machinery | 401,164 | — | — | |||||||||
Marine | 25,573 | — | — | |||||||||
Media | 159,556 | — | — | |||||||||
Metals & Mining | 86,440 | — | — | |||||||||
Mortgage Real Estate Investment Trusts (REITs) | 260,674 | — | — | |||||||||
Multiline Retail | 10,055 | — | — | |||||||||
Multi-Utilities | 39,264 | — | — | |||||||||
Oil, Gas & Consumable Fuels | 293,370 | — | — |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 95 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Schedule of Investments (continued)
as of August 31, 2019
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Paper & Forest Products | $ | 44,110 | $ | — | $ | — | ||||||
Personal Products | 27,028 | — | — | |||||||||
Pharmaceuticals | 66,712 | — | — | |||||||||
Professional Services | 190,203 | — | — | |||||||||
Real Estate Management & Development | 102,753 | — | — | |||||||||
Road & Rail | 44,725 | — | — | |||||||||
Semiconductors & Semiconductor Equipment | 221,929 | — | — | |||||||||
Software | 133,036 | — | — | |||||||||
Specialty Retail | 354,860 | — | — | |||||||||
Textiles, Apparel & Luxury Goods | 124,936 | — | — | |||||||||
Thrifts & Mortgage Finance | 411,596 | — | — | |||||||||
Tobacco | 11,664 | — | — | |||||||||
Trading Companies & Distributors | 205,212 | — | — | |||||||||
Water Utilities | 68,048 | — | — | |||||||||
Wireless Telecommunication Services | 10,751 | — | — | |||||||||
Affiliated Mutual Fund | 229,888 | — | — | |||||||||
Time Deposit | — | 88,275 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 9,487,973 | $ | 88,275 | $ | — | ||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows (unaudited):
Banks | 19.0 | % | ||
Equity Real Estate Investment Trusts (REITs) | 7.6 | |||
Thrifts & Mortgage Finance | 4.4 | |||
Machinery | 4.3 | |||
Specialty Retail | 3.8 | |||
Insurance | 3.4 | |||
Oil, Gas & Consumable Fuels | 3.1 | |||
Mortgage Real Estate Investment Trusts (REITs) | 2.8 | |||
Affiliated Mutual Fund (2.5% represents investments purchased with collateral from securities on loan) | 2.5 | |||
Commercial Services & Supplies | 2.4 | |||
Semiconductors & Semiconductor Equipment | 2.4 | |||
Electronic Equipment, Instruments & Components | 2.4 | |||
Trading Companies & Distributors | 2.2 | |||
Household Durables | 2.1 | |||
Chemicals | 2.1 | |||
Capital Markets | 2.1 | |||
Professional Services | 2.0 | |||
Media | 1.7 | |||
Biotechnology | 1.6 | % | ||
Building Products | 1.6 | |||
Health Care Equipment & Supplies | 1.5 | |||
Energy Equipment & Services | 1.5 | |||
Software | 1.4 | |||
Health Care Providers & Services | 1.4 | |||
Textiles, Apparel & Luxury Goods | 1.3 | |||
Real Estate Management & Development | 1.1 | |||
Communications Equipment | 1.1 | |||
Hotels, Restaurants & Leisure | 1.1 | |||
Consumer Finance | 1.0 | |||
Time Deposit | 0.9 | |||
Metals & Mining | 0.9 | |||
Food & Staples Retailing | 0.8 | |||
Electric Utilities | 0.8 | |||
Food Products | 0.8 | |||
Construction & Engineering | 0.8 | |||
Leisure Products | 0.8 | |||
IT Services | 0.7 | |||
Water Utilities | 0.7 |
See Notes to Financial Statements.
96 |
Industry Classification (cont’d.) | ||||
Pharmaceuticals | 0.7 | % | ||
Gas Utilities | 0.7 | |||
Auto Components | 0.7 | |||
Electrical Equipment | 0.7 | |||
Aerospace & Defense | 0.6 | |||
Diversified Consumer Services | 0.5 | |||
Health Care Technology | 0.5 | |||
Road & Rail | 0.5 | |||
Paper & Forest Products | 0.5 | |||
Airlines | 0.5 | |||
Containers & Packaging | 0.4 | |||
Internet & Direct Marketing Retail | 0.4 | |||
Multi-Utilities | 0.4 | |||
Diversified Financial Services | 0.4 | |||
Entertainment | 0.4 | |||
Life Sciences Tools & Services | 0.3 | |||
Air Freight & Logistics | 0.3 | % | ||
Personal Products | 0.3 | |||
Marine | 0.3 | |||
Household Products | 0.3 | |||
Interactive Media & Services | 0.2 | |||
Diversified Telecommunication Services | 0.2 | |||
Construction Materials | 0.1 | |||
Tobacco | 0.1 | |||
Distributors | 0.1 | |||
Wireless Telecommunication Services | 0.1 | |||
Multiline Retail | 0.1 | |||
|
| |||
102.4 | ||||
Liabilities in excess of other assets | (2.4 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right toset-off exists, is presented in the summary below:
Financial Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 168,852 | $ | (168,852 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of the financial instruments/transactions |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 97 |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value, including securities on loan of $168,852: | ||||
Unaffiliated investments (cost $10,199,394) | $ | 9,346,360 | ||
Affiliated investments (cost $229,911) | 229,888 | |||
Cash | 104 | |||
Interest and dividends receivable | 9,143 | |||
|
| |||
Total assets | 9,585,495 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 229,558 | |||
Management fee payable | 2,324 | |||
Other liabilities | 168 | |||
|
| |||
Total Liabilities | 232,050 | |||
|
| |||
Net Assets | $ | 9,353,445 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 200 | ||
Paid-in capital in excess of par | 10,041,884 | |||
|
| |||
10,042,084 | ||||
Total distributable earnings (loss) | (688,639 | ) | ||
|
| |||
Net assets, August 31, 2019 | $ | 9,353,445 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 46.77 | ||
|
|
See Notes to Financial Statements.
98 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Statement of Operations
Period Ended August 31, 2019*
Net Investment Income (Loss) |
| |||
Income |
| |||
Interest income | $ | 2,603 | ||
Unaffiliated dividend income (net of $33 foreign withholding tax) | 179,241 | |||
Income from securities lending, net (including affiliated income of $505) | 727 | |||
|
| |||
Total income | 182,571 | |||
|
| |||
Expenses | ||||
Management fee | 24,570 | |||
|
| |||
Total expenses | 24,570 | |||
|
| |||
Net investment income (loss) | 158,001 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments |
| |||
Net realized gain (loss) on: |
| |||
Investment transactions (including affiliated of $15) | 130,313 | |||
In-kind redemptions | 30,695 | |||
|
| |||
161,008 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(23)) | (853,057 | ) | ||
|
| |||
Net gain (loss) on investment transactions | (692,049 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (534,048 | ) | |
|
|
* | For the period from November 13, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 99 |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Statement of Changes in Net Assets
Period Ended August 31, 2019* | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 158,001 | ||
Net realized gain (loss) on investments andin-kind redemptions | 161,008 | |||
Net change in unrealized appreciation (depreciation) on investments | (853,057 | ) | ||
|
| |||
Net increase (decrease) in net assets resulting from operations | (534,048 | ) | ||
|
| |||
Dividends and Distributions | ||||
Distributions from distributable earnings | (122,512 | ) | ||
|
| |||
Fund share transactions (Net of share conversions) | ||||
Net proceeds from shares sold | 12,488,700 | |||
Cost of shares reacquired | (2,478,695 | ) | ||
|
| |||
Net increase (decrease) in net assets from Fund share transactions | 10,010,005 | |||
|
| |||
Total increase (decrease) | 9,353,445 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 9,353,445 | ||
|
|
* | For the period from November 13, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
100 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments
as of August 31, 2019
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.1% | ||||||||
COMMON STOCKS 98.3% | ||||||||
Australia 4.2% | ||||||||
AGL Energy Ltd. | 5,035 | $ | 64,290 | |||||
Aristocrat Leisure Ltd. | 3,458 | 69,281 | ||||||
Aurizon Holdings Ltd. | 17,667 | 70,316 | ||||||
AusNet Services | 61,301 | 74,310 | ||||||
BHP Group Ltd. | 2,759 | 67,429 | ||||||
BHP Group PLC | 3,122 | 67,354 | ||||||
CIMIC Group Ltd. | 3,002 | 62,673 | ||||||
Coca-Cola Amatil Ltd. | 9,880 | 72,325 | ||||||
Cochlear Ltd. | 475 | 69,736 | ||||||
Dexus | 8,192 | 71,168 | ||||||
GPT Group (The) | 17,971 | 77,335 | ||||||
Mirvac Group | 31,624 | 67,938 | ||||||
Sonic Healthcare Ltd. | 3,659 | 72,569 | ||||||
South32 Ltd. | 36,419 | 64,750 | ||||||
Stockland | 22,269 | 67,787 | ||||||
Telstra Corp. Ltd. | 25,867 | 64,803 | ||||||
Treasury Wine Estates Ltd. | 6,091 | 76,871 | ||||||
Vicinity Centres | 40,032 | 69,825 | ||||||
Wesfarmers Ltd. | 2,608 | 68,674 | ||||||
Woodside Petroleum Ltd. | 3,051 | 66,017 | ||||||
Woolworths Group Ltd. | 2,841 | 72,264 | ||||||
|
| |||||||
1,457,715 | ||||||||
Austria 0.8% | ||||||||
Erste Group Bank AG | 1,969 | 63,341 | ||||||
OMV AG | 1,370 | 69,880 | ||||||
Raiffeisen Bank International AG | 3,019 | 65,979 | ||||||
voestalpine AG | 2,803 | 64,539 | ||||||
|
| |||||||
263,739 | ||||||||
Belgium 0.8% | ||||||||
Ageas | 1,287 | 68,885 | ||||||
Proximus SADP | 2,307 | 68,180 | ||||||
Solvay SA | 639 | 64,414 | ||||||
UCB SA | 824 | 61,528 | ||||||
|
| |||||||
263,007 | ||||||||
China 0.1% | ||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 67,298 | 44,130 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 101 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Denmark 1.2% | ||||||||
Carlsberg A/S (Class B Stock) | 517 | $ | 76,317 | |||||
Coloplast A/S (Class B Stock) | 567 | 67,526 | ||||||
H Lundbeck A/S | 1,685 | 61,345 | ||||||
ISS A/S | 2,507 | 63,612 | ||||||
Novo Nordisk A/S (Class B Stock) | 1,491 | 77,423 | ||||||
Pandora A/S | 1,844 | 78,548 | ||||||
|
| |||||||
424,771 | ||||||||
Finland 1.2% | ||||||||
Elisa OYJ | 1,402 | 70,510 | ||||||
Fortum OYJ | 2,967 | 65,250 | ||||||
Kone OYJ (Class B Stock) | 1,191 | 68,852 | ||||||
Metso OYJ | 1,902 | 71,241 | ||||||
Nokian Renkaat OYJ | 2,162 | 59,166 | ||||||
Orion OYJ (Class B Stock) | 2,073 | 76,939 | ||||||
|
| |||||||
411,958 | ||||||||
France 8.2% | ||||||||
Air Liquide SA | 501 | 69,737 | ||||||
Alstom SA | 1,586 | 67,754 | ||||||
Amundi SA, 144A | 1,183 | 75,605 | ||||||
Atos SE | 814 | 61,622 | ||||||
AXA SA | 2,840 | 65,142 | ||||||
BioMerieux | 821 | 66,727 | ||||||
BNP Paribas SA | 1,553 | 70,040 | ||||||
Bouygues SA | 2,079 | 78,944 | ||||||
Carrefour SA | 3,843 | 65,467 | ||||||
Casino Guichard Perrachon SA | 1,817 | 76,484 | ||||||
Cie de Saint-Gobain | 1,859 | 67,056 | ||||||
Cie Generale des Etablissements Michelin SCA | 636 | 66,824 | ||||||
CNP Assurances | 3,587 | 65,127 | ||||||
Credit Agricole SA | 5,571 | 63,616 | ||||||
Danone SA | 798 | 71,444 | ||||||
Eiffage SA | 728 | 75,402 | ||||||
Engie SA | 4,919 | 74,741 | ||||||
EssilorLuxottica SA | 486 | 71,708 | ||||||
Gecina SA | 437 | 69,257 | ||||||
Hermes International | 99 | 67,568 | ||||||
ICADE | 791 | 69,939 | ||||||
Ipsen SA | 649 | 68,190 | ||||||
Klepierre SA | 2,113 | 64,467 | ||||||
Legrand SA | 982 | 69,311 |
See Notes to Financial Statements.
102 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
France (cont’d.) | ||||||||
L’Oreal SA | 260 | $ | 71,038 | |||||
LVMH Moet Hennessy Louis Vuitton SE | 169 | 67,312 | ||||||
Orange SA | 4,564 | 69,222 | ||||||
Pernod Ricard SA | 434 | 82,853 | ||||||
Peugeot SA | 3,150 | 70,383 | ||||||
Publicis Groupe SA | 1,464 | 70,185 | ||||||
Sanofi | 765 | 65,681 | ||||||
Schneider Electric SE | 833 | 69,725 | ||||||
SCOR SE | 1,697 | 67,684 | ||||||
SEB SA | 447 | 69,515 | ||||||
Societe Generale SA | 2,750 | 69,681 | ||||||
Sodexo SA | 670 | 75,919 | ||||||
Thales SA | 565 | 65,294 | ||||||
TOTAL SA | 1,407 | 70,189 | ||||||
Unibail-Rodamco-Westfield | 492 | 64,401 | ||||||
Veolia Environnement SA | 2,789 | 66,669 | ||||||
Vivendi SA | 2,434 | 68,027 | ||||||
|
| |||||||
2,845,950 | ||||||||
Germany 5.5% | ||||||||
adidas AG | 222 | 65,804 | ||||||
Allianz SE | 328 | 72,278 | ||||||
BASF SE | 1,070 | 70,771 | ||||||
Beiersdorf AG | 564 | 70,974 | ||||||
Brenntag AG | 1,497 | 72,113 | ||||||
Covestro AG, 144A | 1,566 | 70,893 | ||||||
Deutsche Post AG | 2,172 | 71,375 | ||||||
Deutsche Telekom AG | 3,946 | 65,816 | ||||||
E.ON SE | 6,887 | 63,997 | ||||||
Evonik Industries AG | 2,574 | 65,575 | ||||||
Fraport AG Frankfurt Airport Services Worldwide | 830 | 69,310 | ||||||
Fresenius Medical Care AG & Co. KGaA | 1,022 | 68,742 | ||||||
Fresenius SE & Co. KGaA | 1,433 | 69,549 | ||||||
HeidelbergCement AG | 1,042 | 72,194 | ||||||
Henkel AG & Co. KGaA | 785 | 72,515 | ||||||
HOCHTIEF AG | 625 | 67,969 | ||||||
HUGO BOSS AG | 1,125 | 62,662 | ||||||
Infineon Technologies AG | 3,782 | 65,458 | ||||||
KION Group AG | 1,375 | 66,477 | ||||||
Knorr-Bremse AG | 692 | 64,639 | ||||||
Merck KGaA | 660 | 70,550 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 287 | 68,732 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 103 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Germany (cont’d.) | ||||||||
SAP SE | 572 | $ | 68,272 | |||||
Siemens Healthineers AG, 144A | 1,668 | 65,464 | ||||||
Symrise AG (Class A Stock) | 814 | 75,972 | ||||||
Telefonica Deutschland Holding AG | 27,133 | 69,064 | ||||||
Uniper SE | 2,215 | 67,116 | ||||||
Volkswagen AG | 412 | 67,219 | ||||||
|
| |||||||
1,921,500 | ||||||||
Hong Kong 4.6% | ||||||||
BOC Hong Kong Holdings Ltd. | 19,335 | 65,228 | ||||||
CK Asset Holdings Ltd. | 10,011 | 67,992 | ||||||
CK Hutchison Holdings Ltd. | 7,897 | 68,793 | ||||||
CK Infrastructure Holdings Ltd. | 9,257 | 62,399 | ||||||
CLP Holdings Ltd. | 6,440 | 66,327 | ||||||
Hang Lung Properties Ltd. | 29,439 | 66,535 | ||||||
Henderson Land Development Co. Ltd. | 13,860 | 64,523 | ||||||
HKT Trust & HKT Ltd. | 47,600 | 74,432 | ||||||
Hongkong Land Holdings Ltd. | 12,349 | 67,426 | ||||||
Hysan Development Co. Ltd. | 16,030 | 64,914 | ||||||
Kerry Properties Ltd. | 19,440 | 65,582 | ||||||
Link REIT | 5,839 | 65,536 | ||||||
MTR Corp. Ltd. | 11,011 | 63,759 | ||||||
NWS Holdings Ltd. | 38,629 | 66,513 | ||||||
Power Assets Holdings Ltd. | 9,800 | 65,247 | ||||||
Sino Land Co. Ltd. | 46,814 | 66,874 | ||||||
SJM Holdings Ltd. | 70,531 | 66,659 | ||||||
Sun Hung Kai Properties Ltd. | 4,781 | 67,748 | ||||||
Swire Pacific Ltd. (Class A Stock) | 6,456 | 63,198 | ||||||
Swire Properties Ltd. | 19,837 | 65,150 | ||||||
Techtronic Industries Co. Ltd. | 10,087 | 69,731 | ||||||
WH Group Ltd., 144A | 77,707 | 62,539 | ||||||
Wharf Real Estate Investment Co. Ltd. | 11,828 | 64,040 | ||||||
Wheelock & Co. Ltd. | 11,788 | 68,484 | ||||||
|
| |||||||
1,589,629 | ||||||||
Ireland 1.3% | ||||||||
AerCap Holdings NV* | 1,305 | 69,974 | ||||||
CRH PLC | 2,180 | 72,549 | ||||||
DCC PLC | 918 | 78,013 | ||||||
Flutter Entertainment PLC | 923 | 75,919 | ||||||
Kingspan Group PLC | 1,373 | 62,684 | ||||||
Smurfit Kappa Group PLC | 2,563 | 79,041 | ||||||
|
| |||||||
438,180 |
See Notes to Financial Statements.
104 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Isle of Man 0.2% | ||||||||
GVC Holdings PLC | 10,394 | $ | 79,552 | |||||
Israel 1.3% | ||||||||
Bank LeumiLe-Israel BM | 9,389 | 63,970 | ||||||
Check Point Software Technologies Ltd.(a)* | 618 | 66,559 | ||||||
Elbit Systems Ltd. | 427 | 65,882 | ||||||
Israel Chemicals Ltd. | 14,127 | 63,715 | ||||||
Israel Discount Bank Ltd. (Class A Stock) | 15,532 | 64,646 | ||||||
Mizrahi Tefahot Bank Ltd. | 2,711 | 62,363 | ||||||
Nice Ltd.* | 451 | 68,972 | ||||||
|
| |||||||
456,107 | ||||||||
Italy 2.4% | ||||||||
Assicurazioni Generali SpA | 4,103 | 74,270 | ||||||
Enel SpA | 9,908 | 71,805 | ||||||
Eni SpA | 4,289 | 64,485 | ||||||
Ferrari NV | 433 | 68,147 | ||||||
Intesa Sanpaolo SpA | 30,435 | 66,672 | ||||||
Mediobanca Banca di Credito Finanziario SpA | 7,212 | 71,416 | ||||||
Moncler SpA | 1,783 | 66,803 | ||||||
Prysmian SpA | 3,249 | 71,077 | ||||||
Recordati SpA | 1,530 | 67,027 | ||||||
Snam SpA | 13,710 | 69,298 | ||||||
Telecom Italia SpA* | 126,202 | 67,187 | ||||||
Terna Rete Elettrica Nazionale SpA | 11,062 | 69,420 | ||||||
�� |
|
| ||||||
827,607 | ||||||||
Japan 36.9% | ||||||||
ABC-Mart, Inc. | 1,063 | 67,942 | ||||||
Advantest Corp. | 1,760 | 72,315 | ||||||
AGC, Inc. | 2,356 | 67,973 | ||||||
Air Water, Inc. | 4,377 | 74,368 | ||||||
Ajinomoto Co., Inc. | 3,824 | 69,724 | ||||||
Alfresa Holdings Corp. | 2,658 | 60,173 | ||||||
Amada Holdings Co. Ltd. | 6,572 | 68,482 | ||||||
ANA Holdings, Inc. | 1,985 | 67,864 | ||||||
Aozora Bank Ltd. | 2,806 | 64,844 | ||||||
Asahi Group Holdings Ltd. | 1,580 | 73,709 | ||||||
Asahi Kasei Corp. | 7,583 | 68,610 | ||||||
Astellas Pharma, Inc. | 4,946 | 68,532 | ||||||
Bandai Namco Holdings, Inc. | 1,209 | 71,128 | ||||||
Bank of Kyoto Ltd. (The) | 1,870 | 67,153 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 105 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Benesse Holdings, Inc. | 2,778 | $ | 71,075 | |||||
Bridgestone Corp. | 1,963 | 74,891 | ||||||
Brother Industries Ltd. | 4,158 | 72,017 | ||||||
Calbee, Inc. | 2,329 | 71,031 | ||||||
Central Japan Railway Co. | 339 | 67,060 | ||||||
Chiba Bank Ltd. (The) | 13,206 | 65,884 | ||||||
Chubu Electric Power Co., Inc. | 4,696 | 69,245 | ||||||
Chugai Pharmaceutical Co. Ltd. | 922 | 65,959 | ||||||
Credit Saison Co. Ltd. | 5,451 | 60,649 | ||||||
Dai Nippon Printing Co. Ltd. | 3,386 | 73,275 | ||||||
Dai-ichi Life Holdings, Inc. | 4,919 | 67,047 | ||||||
Daikin Industries Ltd. | 547 | 67,735 | ||||||
Daiwa House Industry Co. Ltd. | 2,252 | 70,633 | ||||||
Daiwa Securities Group, Inc. | 14,772 | 63,657 | ||||||
Denso Corp. | 1,621 | 68,023 | ||||||
East Japan Railway Co. | 744 | 70,839 | ||||||
Eisai Co. Ltd. | 1,334 | 68,185 | ||||||
Electric Power Development Co. Ltd. | 2,976 | 68,969 | ||||||
Fast Retailing Co. Ltd. | 111 | 65,032 | ||||||
Fuji Electric Co. Ltd. | 2,281 | 65,058 | ||||||
FUJIFILM Holdings Corp. | 1,438 | 61,575 | ||||||
Fujitsu Ltd. | 891 | 68,799 | ||||||
Hakuhodo DY Holdings, Inc. | 4,428 | 65,398 | ||||||
Hankyu Hanshin Holdings, Inc. | 1,860 | 70,471 | ||||||
Hikari Tsushin, Inc. | 295 | 69,144 | ||||||
Hitachi Construction Machinery Co. Ltd. | 3,129 | 66,860 | ||||||
Hitachi High-Technologies Corp. | 1,310 | 70,781 | ||||||
Hitachi Ltd. | 1,954 | 66,749 | ||||||
Hoshizaki Corp. | 984 | 70,765 | ||||||
Hoya Corp. | 885 | 72,051 | ||||||
Hulic Co. Ltd. | 7,605 | 72,589 | ||||||
Idemitsu Kosan Co. Ltd. | 2,643 | 71,029 | ||||||
IHI Corp. | 2,984 | 58,115 | ||||||
ITOCHU Corp. | 3,516 | 70,115 | ||||||
Itochu Techno-Solutions Corp. | 2,616 | 72,101 | ||||||
Japan Airlines Co. Ltd. | 2,174 | 67,920 | ||||||
Japan Post Bank Co. Ltd. | 6,541 | 59,601 | ||||||
Japan Post Holdings Co. Ltd. | 7,040 | 64,015 | ||||||
Japan Prime Realty Investment Corp. | 15 | 68,480 | ||||||
Japan Real Estate Investment Corp. | 11 | 73,206 | ||||||
Japan Retail Fund Investment Corp. | 36 | 72,044 | ||||||
Japan Tobacco, Inc. | 3,113 | 65,946 |
See Notes to Financial Statements.
106 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
JFE Holdings, Inc. | 5,619 | $ | 65,771 | |||||
JXTG Holdings, Inc. | 15,503 | 64,078 | ||||||
Kajima Corp. | 5,745 | 69,923 | ||||||
Kamigumi Co. Ltd. | 3,001 | 70,311 | ||||||
Kansai Electric Power Co., Inc. (The) | 5,441 | 66,197 | ||||||
Kansai Paint Co. Ltd. | 3,587 | 74,654 | ||||||
Kao Corp. | 925 | 66,818 | ||||||
KDDI Corp. | 2,723 | 72,666 | ||||||
Keihan Holdings Co. Ltd. | 1,584 | 66,351 | ||||||
Keio Corp. | 1,028 | 64,253 | ||||||
Keisei Electric Railway Co. Ltd. | 1,733 | 68,188 | ||||||
Kintetsu Group Holdings Co. Ltd. | 1,373 | 68,369 | ||||||
Kirin Holdings Co. Ltd. | 2,905 | 57,384 | ||||||
Kobayashi Pharmaceutical Co. Ltd. | 918 | 68,784 | ||||||
Komatsu Ltd. | 3,279 | 69,663 | ||||||
Konami Holdings Corp. | 1,505 | 68,213 | ||||||
Konica Minolta, Inc. | 9,499 | 67,598 | ||||||
Kubota Corp. | 4,365 | 62,659 | ||||||
Kurita Water Industries Ltd. | 2,643 | 68,740 | ||||||
Kyocera Corp. | 1,122 | 66,696 | ||||||
Kyowa Kirin Co. Ltd. | 4,052 | 74,186 | ||||||
Kyushu Electric Power Co., Inc. | 6,821 | 67,353 | ||||||
Kyushu Railway Co. | 2,322 | 69,615 | ||||||
Lawson, Inc. | 1,339 | 66,424 | ||||||
LIXIL Group Corp. | 4,043 | 66,257 | ||||||
Marubeni Corp. | 10,452 | 66,715 | ||||||
Mazda Motor Corp. | 7,631 | 64,088 | ||||||
McDonald’s Holdings Co. Japan Ltd. | 1,503 | 70,527 | ||||||
Medipal Holdings Corp. | 2,958 | 62,844 | ||||||
MEIJI Holdings Co. Ltd. | 942 | 65,439 | ||||||
Mitsubishi Chemical Holdings Corp. | 10,003 | 68,661 | ||||||
Mitsubishi Corp. | 2,632 | 64,044 | ||||||
Mitsubishi Electric Corp. | 5,541 | 66,945 | ||||||
Mitsubishi Gas Chemical Co., Inc. | 5,852 | 70,399 | ||||||
Mitsubishi Heavy Industries Ltd. | 1,900 | 71,396 | ||||||
Mitsubishi Materials Corp. | 2,786 | 67,529 | ||||||
Mitsubishi Tanabe Pharma Corp. | 6,074 | 67,124 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 14,734 | 70,789 | ||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 12,282 | 66,361 | ||||||
Mitsui & Co. Ltd. | 4,362 | 68,283 | ||||||
Mitsui Chemicals, Inc. | 3,142 | 67,167 | ||||||
Mitsui Fudosan Co. Ltd. | 2,867 | 68,710 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 107 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Mitsui OSK Lines Ltd. | 2,926 | $ | 68,912 | |||||
MS&AD Insurance Group Holdings, Inc. | 2,325 | 73,907 | ||||||
NH Foods Ltd. | 1,865 | 71,626 | ||||||
Nikon Corp. | 5,377 | 66,558 | ||||||
Nintendo Co. Ltd. | 184 | 69,783 | ||||||
Nippon Building Fund, Inc. | 10 | 73,422 | ||||||
Nippon Express Co. Ltd. | 1,394 | 72,039 | ||||||
Nippon Paint Holdings Co. Ltd. | 1,618 | 76,609 | ||||||
Nippon Prologis REIT, Inc. | 27 | 73,145 | ||||||
Nippon Steel Corp. | 4,730 | 66,163 | ||||||
Nippon Telegraph & Telephone Corp. | 1,599 | 76,703 | ||||||
Nissin Foods Holdings Co. Ltd. | 1,016 | 70,484 | ||||||
Nitori Holdings Co. Ltd. | 480 | 69,243 | ||||||
Nitto Denko Corp. | 1,489 | 69,324 | ||||||
Nomura Real Estate Holdings, Inc. | 3,503 | 74,258 | ||||||
Nomura Real Estate Master Fund, Inc. | 40 | 69,845 | ||||||
NTT Data Corp. | 5,433 | 70,115 | ||||||
NTT DOCOMO, Inc. | 2,935 | 74,097 | ||||||
Obayashi Corp. | 6,956 | 64,102 | ||||||
Oji Holdings Corp. | 14,477 | 67,455 | ||||||
Omron Corp. | 1,447 | 71,645 | ||||||
Ono Pharmaceutical Co. Ltd. | 3,621 | 66,891 | ||||||
Oracle Corp. Japan | 808 | 69,593 | ||||||
ORIX Corp. | 5,041 | 74,451 | ||||||
Otsuka Corp. | 1,804 | 66,991 | ||||||
Otsuka Holdings Co. Ltd. | 1,885 | 77,522 | ||||||
Panasonic Corp. | 8,646 | 66,744 | ||||||
Park24 Co. Ltd. | 2,995 | 61,431 | ||||||
Persol Holdings Co. Ltd. | 2,693 | 54,679 | ||||||
Recruit Holdings Co. Ltd. | 1,993 | 60,389 | ||||||
Resona Holdings, Inc. | 16,752 | 65,756 | ||||||
Ricoh Co. Ltd. | 7,811 | 72,276 | ||||||
Rinnai Corp. | 1,146 | 71,952 | ||||||
Santen Pharmaceutical Co. Ltd. | 4,064 | 71,192 | ||||||
Sega Sammy Holdings, Inc. | 5,340 | 73,187 | ||||||
Seibu Holdings, Inc. | 4,229 | 71,774 | ||||||
Seiko Epson Corp. | 4,975 | 66,171 | ||||||
Sekisui Chemical Co. Ltd. | 4,690 | 67,590 | ||||||
Sekisui House Ltd. | 4,353 | 77,259 | ||||||
Seven & i Holdings Co. Ltd. | 1,961 | 69,351 | ||||||
Shimizu Corp. | 8,183 | 68,246 | ||||||
Shin-Etsu Chemical Co. Ltd. | 680 | 68,586 |
See Notes to Financial Statements.
108 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Shinsei Bank Ltd. | 4,426 | $ | 60,577 | |||||
Shionogi & Co. Ltd. | 1,244 | 66,688 | ||||||
Shiseido Co. Ltd. | 1,014 | 82,945 | ||||||
Showa Denko KK | 2,690 | 69,431 | ||||||
Softbank Corp. | 4,886 | 68,552 | ||||||
Sohgo Security Services Co. Ltd. | 1,378 | 69,526 | ||||||
Stanley Electric Co. Ltd. | 2,740 | 68,116 | ||||||
Subaru Corp. | 2,566 | 68,742 | ||||||
SUMCO Corp. | 6,465 | 80,147 | ||||||
Sumitomo Chemical Co. Ltd. | 15,487 | 67,788 | ||||||
Sumitomo Corp. | 5,146 | 77,140 | ||||||
Sumitomo Dainippon Pharma Co. Ltd. | 3,788 | 66,179 | ||||||
Sumitomo Heavy Industries Ltd. | 2,395 | 68,873 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 1,942 | 63,688 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 2,043 | 66,770 | ||||||
Sumitomo Realty & Development Co. Ltd. | 1,934 | 72,729 | ||||||
Sundrug Co. Ltd. | 2,693 | 83,780 | ||||||
Suntory Beverage & Food Ltd. | 1,530 | 65,961 | ||||||
Suzuken Co. Ltd. | 1,319 | 70,895 | ||||||
Taiheiyo Cement Corp. | 2,520 | 63,620 | ||||||
Taisei Corp. | 1,975 | 69,902 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. | 943 | 65,686 | ||||||
Teijin Ltd. | 4,062 | 73,031 | ||||||
THK Co. Ltd. | 2,902 | 67,418 | ||||||
Tobu Railway Co. Ltd. | 2,288 | 70,211 | ||||||
Toho Co. Ltd. | 1,646 | 69,800 | ||||||
Tohoku Electric Power Co., Inc. | 6,866 | 68,637 | ||||||
Tokyo Century Corp. | 1,710 | 68,893 | ||||||
Tokyo Electric Power Co. Holdings, Inc.* | 13,999 | 66,678 | ||||||
Tokyo Electron Ltd. | 396 | 70,843 | ||||||
Tokyo Gas Co. Ltd. | 2,719 | 68,733 | ||||||
Tokyu Corp. | 3,737 | 66,801 | ||||||
Toppan Printing Co. Ltd. | 4,345 | 69,244 | ||||||
Toshiba Corp. | 2,178 | 67,656 | ||||||
Tosoh Corp. | 4,906 | 62,990 | ||||||
Toyo Suisan Kaisha Ltd. | 1,629 | 66,319 | ||||||
Toyota Industries Corp. | 1,364 | 74,982 | ||||||
Toyota Motor Corp. | 1,061 | 69,512 | ||||||
Toyota Tsusho Corp. | 2,197 | 68,142 | ||||||
United Urban Investment Corp. | 39 | 73,128 | ||||||
Welcia Holdings Co. Ltd. | 1,391 | 72,670 | ||||||
West Japan Railway Co. | 887 | 74,727 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 109 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Yamada Denki Co. Ltd. | 15,673 | $ | 73,766 | |||||
Yamaha Corp. | 1,550 | 66,896 | ||||||
Yokogawa Electric Corp. | 3,637 | 66,074 | ||||||
Yokohama Rubber Co. Ltd. (The) | 4,015 | 77,212 | ||||||
|
| |||||||
12,808,571 | ||||||||
Luxembourg 0.4% | ||||||||
RTL Group SA | 1,351 | 62,926 | ||||||
Tenaris SA | 5,993 | 65,300 | ||||||
|
| |||||||
128,226 | ||||||||
Netherlands 2.7% |
| |||||||
ABN AMRO Bank NV, 144A | 3,660 | 65,104 | ||||||
Aegon NV(a) | 15,269 | 58,114 | ||||||
EXOR NV | 1,027 | 69,417 | ||||||
Heineken Holding NV | 689 | 68,114 | ||||||
ING Groep NV | 6,950 | 66,431 | ||||||
Koninklijke Ahold Delhaize NV | 3,030 | 70,882 | ||||||
Koninklijke KPN NV | 23,378 | 73,998 | ||||||
Koninklijke Philips NV | 1,484 | 69,945 | ||||||
NN Group NV(a) | 1,939 | 64,912 | ||||||
QIAGEN NV* | 1,968 | 68,370 | ||||||
Randstad NV | 1,422 | 66,343 | ||||||
Royal Dutch Shell PLC, | ||||||||
(Class A Stock) | 2,288 | 63,351 | ||||||
(Class B Stock) | 2,263 | 62,369 | ||||||
Wolters Kluwer NV | 933 | 67,185 | ||||||
|
| |||||||
934,535 | ||||||||
New Zealand 0.4% | ||||||||
Fisher & Paykel Healthcare Corp. Ltd. | 6,597 | 69,210 | ||||||
Ryman Healthcare Ltd. | 7,936 | 65,106 | ||||||
|
| |||||||
134,316 | ||||||||
Norway 0.8% | ||||||||
DNB ASA | 4,034 | 65,033 | ||||||
Equinor ASA | 4,093 | 69,982 | ||||||
Orkla ASA | 7,998 | 73,307 | ||||||
Telenor ASA | 3,576 | 73,426 | ||||||
|
| |||||||
281,748 |
See Notes to Financial Statements.
110 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Portugal 0.4% | ||||||||
EDP - Energias de Portugal SA | 18,235 | $ | 68,902 | |||||
Jeronimo Martins SGPS SA | 4,234 | 69,847 | ||||||
|
| |||||||
138,749 | ||||||||
Singapore 2.5% | ||||||||
CapitaLand Commercial Trust | 46,460 | 71,310 | ||||||
CapitaLand Ltd. | 27,180 | 67,962 | ||||||
CapitaLand Mall Trust | 36,986 | 70,627 | ||||||
ComfortDelGro Corp. Ltd. | 34,674 | 61,215 | ||||||
DBS Group Holdings Ltd. | 3,700 | 65,402 | ||||||
Genting Singapore Ltd. | 98,462 | 63,146 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 8,400 | 64,464 | ||||||
Singapore Airlines Ltd. | 9,900 | 62,992 | ||||||
Singapore Technologies Engineering Ltd. | 22,892 | 64,993 | ||||||
Singapore Telecommunications Ltd. | 28,667 | 65,483 | ||||||
Suntec Real Estate Investment Trust | 50,595 | 70,365 | ||||||
United Overseas Bank Ltd. | 3,600 | 64,749 | ||||||
Wilmar International Ltd. | 23,697 | 65,059 | ||||||
|
| |||||||
857,767 | ||||||||
Spain 2.9% | ||||||||
ACS Actividades de Construccion y Servicios SA | 1,787 | 67,503 | ||||||
Aena SME SA, 144A | 374 | 67,411 | ||||||
Amadeus IT Group SA | 891 | 66,354 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 12,850 | 60,855 | ||||||
Bankia SA | 35,616 | 64,626 | ||||||
Enagas SA | 3,038 | 66,294 | ||||||
Endesa SA | 2,662 | 68,373 | ||||||
Ferrovial SA | 2,471 | 70,257 | ||||||
Iberdrola SA | 6,916 | 71,085 | ||||||
Industria de Diseno Textil SA | 2,539 | 78,469 | ||||||
Mapfre SA | 25,377 | 66,045 | ||||||
Naturgy Energy Group SA | 2,624 | 68,637 | ||||||
Red Electrica Corp. SA | 3,213 | 64,004 | ||||||
Repsol SA | 4,618 | 67,097 | ||||||
Telefonica SA | 8,660 | 59,971 | ||||||
|
| |||||||
1,006,981 | ||||||||
Sweden 3.6% | ||||||||
Assa Abloy AB (Class B Stock) | 3,071 | 64,113 | ||||||
Atlas Copco AB (Class A Stock) | 2,448 | 73,106 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 111 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Sweden (cont’d.) |
| |||||||
Boliden AB | 3,237 | $ | 71,570 | |||||
Electrolux AB | 3,022 | 67,586 | ||||||
Epiroc AB, | ||||||||
(Class A Stock) | 6,701 | 69,436 | ||||||
(Class B Stock) | 7,075 | 70,111 | ||||||
Husqvarna AB (Class B Stock) | 8,783 | 68,101 | ||||||
ICA Gruppen AB | 1,540 | 75,520 | ||||||
Industrivarden AB (Class C Stock) | 3,373 | 70,555 | ||||||
Kinnevik AB (Class B Stock) | 2,712 | 73,888 | ||||||
Sandvik AB | 4,663 | 66,871 | ||||||
Securitas AB (Class B Stock) | 4,703 | 70,416 | ||||||
Skandinaviska Enskilda Banken AB (Class A Stock) | 7,620 | 65,496 | ||||||
Skanska AB (Class B Stock) | 3,947 | 73,956 | ||||||
SKF AB (Class B Stock) | 4,381 | 70,683 | ||||||
Swedish Match AB | 1,742 | 68,334 | ||||||
Telia Co. AB | 14,992 | 65,622 | ||||||
Volvo AB (Class B Stock) | 4,972 | 68,643 | ||||||
|
| |||||||
1,254,007 | ||||||||
Switzerland 4.8% | ||||||||
Adecco Group AG | 1,400 | 73,639 | ||||||
Alcon, Inc.* | 1,154 | 70,307 | ||||||
Baloise Holding AG | 376 | 64,088 | ||||||
Barry Callebaut AG | 35 | 71,574 | ||||||
Cie Financiere Richemont SA | 858 | 66,577 | ||||||
Coca-Cola HBC AG | 1,981 | 65,806 | ||||||
Dufry AG* | 780 | 63,235 | ||||||
EMS-Chemie Holding AG | 109 | 64,811 | ||||||
Geberit AG | 150 | 68,214 | ||||||
Givaudan SA | 26 | 70,297 | ||||||
LafargeHolcim Ltd.* | 1,506 | 71,165 | ||||||
Nestle SA | 638 | 71,551 | ||||||
Novartis AG | 761 | 68,438 | ||||||
Pargesa Holding SA | 945 | 69,079 | ||||||
Roche Holding AG | 267 | 72,998 | ||||||
Sonova Holding AG | 297 | 68,927 | ||||||
STMicroelectronics NV | 4,027 | 71,367 | ||||||
Swatch Group AG (The) (Bearer Shares) | 246 | 66,636 | ||||||
Swatch Group AG (The) (Registered Shares) | 1,349 | 68,898 | ||||||
Swiss Life Holding AG | 144 | 68,279 | ||||||
Swiss Re AG | 757 | 72,782 | ||||||
Swisscom AG | 146 | 72,886 |
See Notes to Financial Statements.
112 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Switzerland (cont’d.) |
| |||||||
Temenos AG* | 410 | $ | 68,682 | |||||
UBS Group AG* | 6,155 | 64,986 | ||||||
|
| |||||||
1,655,222 | ||||||||
United Kingdom 10.9% | ||||||||
3i Group PLC | 5,776 | 77,065 | ||||||
Ashtead Group PLC | 2,608 | 72,068 | ||||||
Associated British Foods PLC | 2,238 | 61,844 | ||||||
AstraZeneca PLC | 787 | 70,079 | ||||||
Auto Trader Group PLC, 144A | 10,792 | 69,808 | ||||||
Aviva PLC | 14,683 | 63,264 | ||||||
BAE Systems PLC | 10,135 | 67,285 | ||||||
Barclays PLC | 38,017 | 63,190 | ||||||
Berkeley Group Holdings PLC | 1,479 | 70,492 | ||||||
BP PLC | 10,424 | 63,445 | ||||||
British Land Co. PLC (The) | 11,649 | 72,262 | ||||||
BT Group PLC | 30,417 | 61,306 | ||||||
Bunzl PLC | 2,704 | 66,232 | ||||||
Centrica PLC | 82,027 | 69,568 | ||||||
CNH Industrial NV | 7,104 | 73,002 | ||||||
Coca-Cola European Partners PLC | 1,229 | 69,242 | ||||||
Compass Group PLC | 2,763 | 70,031 | ||||||
Diageo PLC | 1,659 | 70,724 | ||||||
Direct Line Insurance Group PLC | 18,276 | 62,956 | ||||||
Ferguson PLC | 936 | 68,837 | ||||||
Fiat Chrysler Automobiles NV | 5,194 | 67,577 | ||||||
G4S PLC | 30,759 | 65,086 | ||||||
GlaxoSmithKline PLC | 3,344 | 69,645 | ||||||
HSBC Holdings PLC | 8,940 | 64,334 | ||||||
Informa PLC | 6,712 | 71,054 | ||||||
InterContinental Hotels Group PLC | 1,066 | 66,477 | ||||||
J Sainsbury PLC | 29,482 | 70,348 | ||||||
Kingfisher PLC | 26,482 | 62,658 | ||||||
Land Securities Group PLC | 6,666 | 62,894 | ||||||
Lloyds Banking Group PLC | 111,645 | 67,694 | ||||||
Meggitt PLC | 9,292 | 69,987 | ||||||
National Grid PLC | 6,509 | 67,994 | ||||||
Next PLC | 954 | 68,907 | ||||||
Pearson PLC | 6,789 | 68,681 | ||||||
Persimmon PLC | 2,938 | 68,014 | ||||||
Reckitt Benckiser Group PLC | 940 | 73,191 | ||||||
RELX PLC | 2,915 | 69,751 | ||||||
Royal Bank of Scotland Group PLC | 27,441 | 61,922 | ||||||
Sage Group PLC (The) | 8,219 | 70,066 |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 113 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom (cont’d.) |
| |||||||
Schroders PLC | 1,940 | $ | 64,444 | |||||
Segro PLC | 7,555 | 72,164 | ||||||
Severn Trent PLC | 2,763 | 69,627 | ||||||
Smith & Nephew PLC | 3,049 | 72,902 | ||||||
Smiths Group PLC | 3,901 | 79,247 | ||||||
Spirax-Sarco Engineering PLC | 696 | 67,963 | ||||||
SSE PLC | 5,176 | 72,492 | ||||||
Standard Life Aberdeen PLC | 21,523 | 65,290 | ||||||
Tesco PLC | 24,572 | 65,539 | ||||||
Unilever NV | 1,247 | 77,352 | ||||||
Unilever PLC | 1,279 | 80,865 | ||||||
United Utilities Group PLC | 7,128 | 70,601 | ||||||
Vodafone Group PLC | 39,828 | 75,233 | ||||||
Whitbread PLC | 1,320 | 70,238 | ||||||
Wm Morrison Supermarkets PLC | 30,376 | 67,492 | ||||||
WPP PLC | 6,148 | 72,580 | ||||||
|
| |||||||
3,793,009 | ||||||||
United States 0.2% |
| |||||||
Carnival PLC | 1,567 | 65,744 | ||||||
|
| |||||||
TOTAL COMMON STOCKS | 34,082,720 | |||||||
|
| |||||||
PREFERRED STOCKS 0.8% | ||||||||
Germany 0.6% | ||||||||
Henkel AG & Co. KGaA | 735 | 73,591 | ||||||
Porsche Automobil Holding SE | 1,054 | 66,098 | ||||||
Volkswagen AG | 425 | 68,243 | ||||||
|
| |||||||
207,932 | ||||||||
Italy 0.2% | ||||||||
Telecom Italia SpA | 133,082 | 67,764 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 275,696 | |||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 34,358,416 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 0.7% |
| |||||||
AFFILIATED MUTUAL FUND 0.2% |
| |||||||
PGIM Institutional Money Market Fund (cost $61,058; includes $60,965 of cash collateral for securities on loan)(b)(w) | 61,046 | 61,052 | ||||||
|
|
See Notes to Financial Statements.
114 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
TIME DEPOSIT 0.5% |
| |||||||||||||||
Sumitomo Mitsui Banking Corp. (cost $188,832) | 1.490 | % | 09/03/2019 | 189 | $ | 188,832 | ||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM TERM INVESTMENTS | 249,884 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 99.8% | 34,608,300 | |||||||||||||||
Other assets in excess of liabilities 0.2% | 78,672 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 34,686,972 | ||||||||||||||
|
|
The following abbreviations are used in the annual report:
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers.
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $59,881; cash collateral of $60,965 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Institutional Money Market Fund. |
* | Non-income producing security. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 115 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
The following is a summary of the inputs used as of August 31, 2019 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | 1,457,715 | $ | — | $ | — | ||||||
Austria | 263,739 | — | — | |||||||||
Belgium | 263,007 | — | — | |||||||||
China | 44,130 | — | — | |||||||||
Denmark | 424,771 | — | — | |||||||||
Finland | 411,958 | — | — | |||||||||
France | 2,845,950 | — | — | |||||||||
Germany | 1,921,500 | — | — | |||||||||
Hong Kong | 1,589,629 | — | — | |||||||||
Ireland | 438,180 | — | — | |||||||||
Isle of Man | 79,552 | — | — | |||||||||
Israel | 456,107 | — | — | |||||||||
Italy | 827,607 | — | — | |||||||||
Japan | 12,808,571 | — | — | |||||||||
Luxembourg | 128,226 | — | — | |||||||||
Netherlands | 934,535 | — | — | |||||||||
New Zealand | 134,316 | — | — | |||||||||
Norway | 281,748 | — | — | |||||||||
Portugal | 138,749 | — | — | |||||||||
Singapore | 857,767 | — | — | |||||||||
Spain | 1,006,981 | — | — | |||||||||
Sweden | 1,254,007 | — | — | |||||||||
Switzerland | 1,655,222 | — | — | |||||||||
United Kingdom | 3,793,009 | — | — | |||||||||
United States | 65,744 | — | — | |||||||||
Affiliated Mutual Fund | 61,052 | — | — | |||||||||
Time Deposit | — | 188,832 | — | |||||||||
Preferred Stocks | ||||||||||||
Germany | 207,932 | — | — | |||||||||
Italy | 67,764 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 34,419,468 | $ | 188,832 | $ | — | ||||||
|
|
|
|
|
|
See Notes to Financial Statements.
116 |
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of August 31, 2019 were as follows (unaudited):
Banks | 6.2 | % | ||
Machinery | 4.9 | |||
Equity Real Estate Investment Trusts (REITs) | 4.6 | |||
Pharmaceuticals | 4.6 | |||
Chemicals | 4.4 | |||
Real Estate Management & Development | 3.5 | |||
Insurance | 3.5 | |||
Diversified Telecommunication Services | 3.4 | |||
Electric Utilities | 3.3 | |||
Road & Rail | 3.0 | |||
Food & Staples Retailing | 2.7 | |||
Food Products | 2.6 | |||
Beverages | 2.2 | |||
Hotels, Restaurants & Leisure | 2.2 | |||
Construction & Engineering | 2.2 | |||
Trading Companies & Distributors | 2.2 | |||
Oil, Gas & Consumable Fuels | 2.1 | |||
Household Durables | 2.0 | |||
Health Care Equipment & Supplies | 2.0 | |||
Textiles, Apparel & Luxury Goods | 2.0 | |||
Automobiles | 1.8 | |||
Specialty Retail | 1.6 | |||
Metals & Mining | 1.5 | |||
Personal Products | 1.5 | |||
Diversified Financial Services | 1.4 | |||
Auto Components | 1.4 | |||
Commercial Services & Supplies | 1.4 | |||
Health Care Providers & Services | 1.3 | |||
Building Products | 1.3 | |||
Industrial Conglomerates | 1.2 | |||
Software | 1.2 | |||
Capital Markets | 1.2 | |||
Media | 1.2 | |||
Multi-Utilities | 1.2 | |||
IT Services | 1.2 | |||
Professional Services | 1.1 | |||
Semiconductors & Semiconductor Equipment | 1.0 | % | ||
Electrical Equipment | 1.0 | |||
Electronic Equipment, Instruments & Components | 1.0 | |||
Technology Hardware, Storage & Peripherals | 1.0 | |||
Aerospace & Defense | 1.0 | |||
Wireless Telecommunication Services | 0.8 | |||
Construction Materials | 0.8 | |||
Entertainment | 0.8 | |||
Gas Utilities | 0.8 | |||
Household Products | 0.6 | |||
Leisure Products | 0.6 | |||
Transportation Infrastructure | 0.6 | |||
Airlines | 0.6 | |||
Time Deposit | 0.5 | |||
Water Utilities | 0.4 | |||
Multiline Retail | 0.4 | |||
Independent Power & Renewable Electricity Producers | 0.4 | |||
Tobacco | 0.4 | |||
Containers & Packaging | 0.2 | |||
Air Freight & Logistics | 0.2 | |||
Diversified Consumer Services | 0.2 | |||
Interactive Media & Services | 0.2 | |||
Marine | 0.2 | |||
Life Sciences Tools & Services | 0.2 | |||
Paper & Forest Products | 0.2 | |||
Energy Equipment & Services | 0.2 | |||
Affiliated Mutual Fund (0.2% represents investments purchased with collateral from securities on loan) | 0.2 | |||
Consumer Finance | 0.2 | |||
|
| |||
99.8 | ||||
Other assets in excess of liabilities | 0.2 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 117 |
PGIM QMA Strategic Alpha International Equity ETF
Schedule of Investments (continued)
as of August 31, 2019
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right toset-off exists, is presented in the summary below:
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 59,881 | $ | (59,881 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of the financial instruments/transactions |
See Notes to Financial Statements.
118 |
PGIM QMA Strategic Alpha International Equity ETF
Statement of Assets & Liabilities
as of August 31, 2019
Assets | ||||
Investments at value, including securities on loan of $59,881: | ||||
Unaffiliated investments (cost $34,662,521) | $ | 34,547,248 | ||
Affiliated investments (cost $61,058) | 61,052 | |||
Cash | 349 | |||
Foreign currency, at value (cost $37,659) | 37,526 | |||
Interest and dividends receivable | 109,919 | |||
|
| |||
Total assets | 34,756,094 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 60,965 | |||
Management fee payable | 8,031 | |||
Other liabilities | 126 | |||
|
| |||
Total Liabilities | 69,122 | |||
|
| |||
Net Assets | $ | 34,686,972 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 700 | ||
Paid-in capital in excess of par | 34,905,030 | |||
|
| |||
34,905,730 | ||||
Total distributable earnings (loss) | (218,758 | ) | ||
|
| |||
Net assets, August 31, 2019 | $ | 34,686,972 | ||
|
| |||
Net asset value, offering price and redemption price per share, | $ | 49.55 | ||
|
|
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 119 |
PGIM QMA Strategic Alpha International Equity ETF
Statement of Operations
Period Ended August 31, 2019*
Net Investment Income (Loss) | ||||
Income | ||||
Interest income | $ | 6,071 | ||
Unaffiliated dividend income (net of $74,697 foreign withholding tax) | 692,918 | |||
Income from securities lending, net (including affiliated income of $293) | 1,993 | |||
|
| |||
Total income | 700,982 | |||
|
| |||
Expenses | ||||
Management fee | 59,647 | |||
|
| |||
Total expenses | 59,647 | |||
|
| |||
Net investment income (loss) | 641,335 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments and Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(27)) | (243,513 | ) | ||
In-kind redemptions | 296,920 | |||
Foreign currency transactions | 5,019 | |||
|
| |||
58,426 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(6)) | (115,279 | ) | ||
Foreign currencies | (110 | ) | ||
|
| |||
(115,389 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (56,963 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 584,372 | ||
|
|
* | For the period from December 4, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
120 |
PGIM QMA Strategic Alpha International Equity ETF
Statement of Changes in Net Assets
Period Ended August 31, 2019* | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 641,335 | ||
Net realized gain (loss) on investments, foreign currency transactions andin-kind redemptions | 58,426 | |||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (115,389 | ) | ||
|
| |||
Net increase (decrease) in net assets resulting from operations | 584,372 | |||
|
| |||
Dividends and Distributions | ||||
Distributions from distributable earnings | (506,210 | ) | ||
|
| |||
Fund share transactions (Net of share conversions) | ||||
Net proceeds from shares sold | 39,788,190 | |||
Cost of shares reacquired | (5,179,380 | ) | ||
|
| |||
Net increase (decrease) in net assets from Fund share transactions | 34,608,810 | |||
|
| |||
Total increase (decrease) | 34,686,972 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 34,686,972 | ||
|
|
* | For the period from December 4, 2018 (commencement of operations) through August 31, 2019. |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 121 |
Notes to Financial Statements
PGIM ETF Trust (the “Trust”) is a diversified,open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and operated as an exchange-traded fund. The Trust was organized as a Delaware statutory trust on October 23, 2017 and consists of six separate series (each, a “Fund” and collectively, the “Funds”): PGIM Ultra Short Bond ETF, PGIM Active High Yield Bond ETF, PGIM QMA Strategic AlphaLarge-Cap Core ETF, PGIM QMA Strategic AlphaSmall-Cap Growth ETF, PGIM QMA Strategic AlphaSmall-Cap Value ETF and PGIM QMA Strategic Alpha International Equity ETF.
These financial statements relate only to the following Funds: PGIM QMA Strategic Alpha Large- Cap Core ETF, PGIM QMA Strategic AlphaSmall-Cap Growth ETF, PGIM QMA Strategic AlphaSmall-Cap Value ETF and PGIM QMA Strategic Alpha International Equity ETF, which commenced investment operations on October 17, 2018, November 13, 2018, November 13, 2018 and December 4, 2018, respectively.
The investment objective of each Fund is to seek long-term growth of capital.
1. Accounting Policies
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Funds consistently follow such policies in the preparation of its financial statements.
Securities Valuation:The Funds hold securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Trust’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
122 |
For the fiscal reportingperiod-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Funds’ foreign investments may change on days when investors cannot purchase or redeem Funds shares.
Various inputs determine how the Funds’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820—Fair Value Measurements and Disclosures.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Investments inopen-end,non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities:Pursuant to Rule22e-4 under the 1940 Act, the Fund has adopted a Board approved Liquidity Risk Management Program (“LRMP”). Under the LRMP, the
PGIM QMA Strategic Alpha ETFs | 123 |
Notes to Financial Statements(continued)
Fund qualifies as an“in-kind ETF,” and is therefore exempt from the liquidity classification and highly liquid investment minimum requirements of the LRMP that would otherwise be applicable. The Fund is, however, subject to the provisions of the LRMP that require the Fund to limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities:Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the Fund’s LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “Illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Fund’s investments in restricted securities could be impaired if trading does not develop or declines.
Foreign Currency Translation:The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Funds are presented at the foreign exchange rates and market values at the close of the period, the Funds do not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Funds do not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.
124 |
Net realized gains (losses) on foreign currency transactions (where applicable) represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on forward currency transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies (where applicable).
Rights:The Funds hold rights acquired either through a direct purchase or pursuant to corporate actions. Rights entitle the holder to buy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such rights are held as long positions by the Funds until exercised, sold or expired. Rights are valued at fair value in accordance with the Board approved fair valuation procedures.
Securities Lending:The Funds lend their portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Funds recognize income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The Funds also continue to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
Securities Transactions and Net Investment Income:Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on theex-date, or for certain foreign securities, when a Fund becomes aware of such dividends.
PGIM QMA Strategic Alpha ETFs | 125 |
Notes to Financial Statements(continued)
Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.
Taxes:It is the Funds’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Tax reform legislation commonly referred to as the Tax Cuts and Jobs Act permits a direct REIT shareholder to claim a 20% “qualified business income” deduction for ordinary REIT dividends. On January 18, 2019, the Internal Revenue Service issued final regulations that expressly permit RICs to pass through this “qualified business income” to their shareholders.
Dividends and Distributions:The Funds expect to pay dividends from net investment income quarterly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst total distributable earnings (loss) andpaid-in capital in excess of par, as appropriate.
Estimates:The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
Pursuant to a management agreement with the Trust on behalf of the Funds (the Management Agreement), PGIM Investments, subject to the supervision of the Board and in conformity with the stated policies of the Funds, manages both the investment operations of each Fund and the composition of each Fund’s portfolio, including the purchase, retention and disposition of assets. In connection therewith, the Manager is obligated to keep certain books and records of the Funds. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Funds. The Manager will continue to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements.
126 |
PGIM Investments will review the performance of the investment subadviser(s) and make recommendations to the Board with respect to the retention of investment subadvisers and the renewal of contracts. The Manager also administers the Funds’ business affairs and, in connection therewith, furnishes the Funds’ with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Funds’ custodian (the Custodian). The management services of PGIM Investments to the Funds are not exclusive under the terms of the Management Agreement and PGIM Investments is free to, and does, render management services to others.
The Board of Trustees of the Trust has approved a unitary management fee structure for the Funds. Under the unitary fee structure, the Manager is responsible for paying substantially all the expenses of the Funds, costs of borrowing money (including interest expenses and any loan commitment or other associated fees), taxes, acquired fund fees and expenses, brokerage fees, costs of holding shareholder meetings, litigation, indemnification and extraordinary expenses.
The unitary fee paid to the Manager is accrued daily and payable monthly, at an annual rate of the Fund’s average daily net assets specified below. The Manager has contractually agreed, beginning from the inception of the Funds, to waive any management fees it receives from the Funds in an amount equal to the subadvisory fees paid by the Funds to the PGIM Institutional Money Market Fund due to the Funds’ investment of its excess overnight cash in the PGIM Institutional Money Market Fund. This waiver will remain in effect for as long as the Funds remains invested or intends to invest in the PGIM Institutional Money Market Fund.
Fund | Unitary fee rate | |||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | 0.17 | % | ||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 0.29 | % | ||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 0.29 | % | ||
PGIM QMA Strategic Alpha International Equity ETF | 0.29 | % |
The Manager has entered into a subadvisory agreement (Subadvisory Agreement) with QMA LLC, (“QMA”) (formerly known as Quantitative Management Associates LLC) (the “subadviser”). The Subadvisory Agreement provides that the subadviser will furnish investment advisory services in connection with the management of the Funds. In connection therewith, the subadviser is obligated to keep certain books and records of each Fund. Under the Subadvisory Agreement, the subadviser, subject to the supervision of PGIM Investments, is responsible for managing the assets of the Funds in accordance with the Funds’ investment objectives, policies and restrictions. The subadviser determines what securities and other instruments are purchased and sold for the Funds and is responsible for obtaining and evaluating financial data relevant to the Funds. PGIM Investments continues to have responsibility for all investment advisory services pursuant to the Management Agreement and supervises the subadviser’s performance of such services. The Manager pays for the services of the subadviser.
PGIM QMA Strategic Alpha ETFs | 127 |
Notes to Financial Statements(continued)
Brown Brothers Harriman & Co. (“BBH”) serves as the Custodian, Transfer Agent, Administrative Agent and Securities Lending Agent for the Trust. Pursuant to a Custodian Agreement, BBH maintains certain financial accounting books and records pursuant to an agreement with the Trust. Subcustodians provide custodial services for anynon-US assets held outside the United States. Pursuant to an Administrative and Transfer Agency Agreement, BBH maintains certain books and records and provides transfer agency, administrative, legal, tax support and accounting and financial reporting services for the maintenance and operations of the Trust. As the transfer and dividend disbursing agent of the Trust, BBH provides customary transfer agency services to the Trust, including the handling of shareholder communications, the processing of shareholder transactions, the maintenance of shareholder account records, the payment of dividends and distributions, and related functions. For these services, BBH receives compensation from the Manager and is reimbursed for expenses, including custodian and administration fees and certainout-of-pocket expenses including, but not limited to, postage, stationery, printing, allocable communication expenses and other costs. The Manager is responsible for compensating BBH under the Custodian and Administrative and Transfer Agency Agreements. As securities lending agent, BBH is responsible for marketing to approved borrowers available securities from the Funds’ portfolio. As administered by BBH, available securities from the Funds’ portfolio are furnished to borrowers throughsecurity-by-security loans effected by BBH as lending agent on behalf of the Funds. BBH is responsible for the administration and management of the Funds’ securities lending program, including the preparation and execution of a participant agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented with the Funds’ custodian, ensuring that loaned securities are daily valued and that the corresponding required cash collateral is delivered by the borrower(s), and arranging for the investment of cash collateral received from borrowers in accordance with the Funds’ investment guidelines. BBH receives as compensation for its services a portion of the amount earned by the Funds for lending securities.
3. Other Transactions with Affiliates
Each Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Through each Fund’s investments in the mentioned underlying fund, PGIM Investments and/or its affiliates are paid fees or compensated for providing their services. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
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The Funds may enter into certain securities purchase or sale transactions under Board approved Rule17a-7 procedures. Rule17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Pursuant to the Rule17a-7 procedures and consistent with guidance issued by the SEC, the Funds’ Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such17a-7 transactions were effected in accordance with the Funds’ Rule17a-7 procedures. For the period ended August 31, 2019, no17a-7 transactions were entered into by the Funds.
Prudential Investment Management Services LLC (“PIMS” or the “Distributor”), acts as the distributor of each Fund. The Distributor is a subsidiary of Prudential Financial, Inc. (“Prudential”), pursuant to the terms of a distribution agreement (“Distribution Agreement”) between the Trust and the Distributor. Shares are continuously offered for sale by the Distributor only. Although the Distributor does not receive any fees under the Distribution Agreement, the Manager or its affiliates may pay the Distributor for certain distribution related services.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short- term investments, U.S. Government securities andin-kind transactions) for the reporting period ended August 31, 2019, were as follows:
Fund | Cost of Purchases | Proceeds from Sales | ||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | $ | 18,573,032 | $ | 8,562,140 | ||||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | $ | 17,636,548 | $ | 7,467,930 | ||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | $ | 16,300,026 | $ | 6,232,011 | ||||
PGIM QMA Strategic Alpha International Equity ETF | $ | 40,438,035 | $ | 15,408,082 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the reporting period ended August 31, 2019, is presented as follows:
PGIM QMA Strategic AlphaLarge-Cap Core ETF
Value Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Institutional Money Market Fund* |
| |||||||||||||||||||||||||||
$ — | $ | 180,174 | $ | 180,172 | $ | — | $ | 3 | $ | 5 | 5 | $ | 5 | ** |
PGIM QMA Strategic Alpha ETFs | 129 |
Notes to Financial Statements(continued)
PGIM QMA Strategic AlphaSmall-Cap Growth ETF
Value Beginning | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Institutional Money Market Fund* |
| |||||||||||||||||||||||||||
$ — | $ | 1,226,350 | $ | 1,160,470 | $ | (6 | ) | $ | 39 | $ | 65,913 | 65,906 | $ | 634 | ** |
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Value Beginning | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Institutional Money Market Fund* |
| |||||||||||||||||||||||||||
$ — | $ | 898,314 | $ | 668,418 | $ | (23 | ) | $ | 15 | $ | 229,888 | 229,865 | $ | 505 | ** |
PGIM QMA Strategic Alpha International Equity ETF
Value Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||||||||||||||||
PGIM Institutional Money Market Fund* |
| |||||||||||||||||||||||||||
$ — | $ | 737,944 | $ | 676,859 | $ | (6 | ) | $ | (27 | ) | $ | 61,052 | 61,046 | $ | 293 | ** |
* | The Fund did not have any capital gain distributions during the reporting period. |
** | This amount is included in “Income from securities lending, net” on the Statement of Operations. |
5. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on theex-date. In order to present total distributable earnings (loss) andpaid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to total distributable earnings (loss) andpaid-in capital in excess of par.
The following Funds had adjustments for the period ending August 31, 2019:
Total Distributable Earnings (Loss) | Paid-in Capital | |||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF(a) | $ | (269,909 | ) | $ | 269,909 | |||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF(a) | (76,597 | ) | 76,597 | |||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF(a) | (32,079 | ) | 32,079 | |||||
PGIM QMA Strategic Alpha International Equity ETF(a) | (296,920 | ) | 296,920 |
(a) | Due to redemptionin-kind transactions. |
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Net investment income or loss, net realized gains or losses on investment transactions and net assets were not affected by these adjustments.
For the period ended August 31, 2019, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | ||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | $ | 150,716 | ||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 65,848 | |||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 122,512 | |||
PGIM QMA Strategic Alpha International Equity ETF | 506,210 |
For the period ended August 31, 2019, the Funds had the following amounts of accumulated undistributed earnings on a tax basis:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | $ | 47,465 | $ | — | ||||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 18,678 | — | ||||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 157,820 | 6,602 | ||||||
PGIM QMA Strategic Alpha International Equity ETF | 256,011 | — |
The United States federal income tax basis of the Funds’ investments and the net unrealized appreciation (depreciation) as of August 31, 2019 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||||||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | $ | 10,143,219 | $ | 709,349 | $ | (491,300 | ) | $ | 218,049 | |||||||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF(a) | 10,015,645 | 716,775 | (1,077,345 | ) | (360,570 | ) | ||||||||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF(a) | 10,429,309 | 433,582 | (1,286,643 | ) | (853,061 | ) | ||||||||||
PGIM QMA Strategic Alpha International Equity ETF(b) | 34,832,897 | 2,035,714 | (2,260,311 | ) | (224,597 | ) |
(a) | The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales. |
(b) | The difference between book basis and tax basis was primarily attributable to investments in passive foreign investment companies and other book to tax adjustments. |
PGIM QMA Strategic Alpha ETFs | 131 |
Notes to Financial Statements(continued)
For federal income tax purposes, the following Funds had a capital loss carryforward as of August 31, 2019 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | ||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | $ | 92,415 | ||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 91,477 | |||
PGIM QMA Strategic Alpha International Equity ETF | 250,062 |
The Manager has analyzed the Funds’ tax positions taken and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for the most recent fiscal year ended August 31, 2019 are subject to such review.
6. Capital and Ownership
Each Fund is an exchange-traded fund, commonly known as an “ETF”. Individual shares of the Funds may only be purchased and sold in secondary market transactions through brokers or other financial intermediaries. Shares of the Funds are listed for trading on the NYSE Arca, Inc. (the “Exchange”), and because the shares of the Funds trade at market prices rather than NAV, shares of the Funds may trade at a price greater than NAV (a premium) or less than NAV (a discount). Each Fund will issue and redeem its shares at NAV only in a large specified number of shares called a “Creation Unit” or multiples thereof to investors who have entered into an agreement with the Distributor and are authorized to transact with the Trust in Creation Units (“Authorized Participants”). A Creation Unit of PGIM QMA Strategic AlphaLarge-Cap Core ETF, PGIM QMA Strategic AlphaSmall-Cap Growth ETF, PGIM QMA Strategic AlphaSmall-Cap Value ETF and PGIM QMA Strategic Alpha International Equity ETF consists of 50,000 shares, 50,000 shares, 50,000 shares and 100,000 shares of the Fund, respectively. The Funds generally issue and redeem Creation Units in return for a specified amount of cash and/or designated portfolio of securities. Except when aggregated in Creation Units, shares are not individually redeemable. Fixed transaction fees are imposed for the transfer and other costs associated with the creation or redemption of Creation Units. Authorized Participants are responsible for paying these fixed transaction fees to BBH.
The Trust is authorized to issue an unlimited number of shares of beneficial interest, $0.001 par value per share.
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As of August 31, 2019, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned the following number of shares of the Funds:
Fund | Number of Shares | |||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | 192,000 | |||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 195,000 | |||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 195,000 | |||
PGIM QMA Strategic Alpha International Equity ETF | 695,000 |
At reporting period end, the following number of shareholders of record, each holding greater than 5% of the Fund, held the following percentage of the Funds’ outstanding shares on behalf of multiple beneficial owners.
Fund | Number of Shareholders | % of Outstanding Shares | % of Outstanding Shares held by Affiliate | |||||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | 1 | 96 | % | 96 | % | |||||||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 1 | 98 | % | 98 | % | |||||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 1 | 98 | % | 98 | % | |||||||
PGIM QMA Strategic Alpha International Equity ETF | 2 | 99 | % | 99 | % |
Transactions in shares of beneficial interest were as follows:
PGIM QMA Strategic AlphaLarge-Cap Core ETF
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 200,000 | $ | 10,010,000 | |||||
Shares contributedin-kind (Subscriptionin-kind) | 100,000 | 4,994,125 | ||||||
Shares redeemedin-kind (Redemptionin-kind) | (100,000 | ) | (5,067,390 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 200,000 | 9,936,735 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 200,000 | $ | 9,936,735 | |||||
|
|
|
|
PGIM QMA Strategic AlphaSmall-Cap Growth ETF
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 200,000 | $ | 10,025,000 | |||||
Shares contributedin-kind (Subscriptionin-kind) | 50,000 | 2,462,720 | ||||||
Shares redeemedin-kind (Redemptionin-kind) | (50,000 | ) | (2,537,750 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 200,000 | 9,949,970 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 200,000 | $ | 9,949,970 | |||||
|
|
|
|
PGIM QMA Strategic Alpha ETFs | 133 |
Notes to Financial Statements(continued)
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 200,000 | $ | 10,025,000 | |||||
Shares contributedin-kind (Subscriptionin-kind) | 50,000 | 2,463,700 | ||||||
Shares redeemedin-kind (Redemptionin-kind) | (50,000 | ) | (2,478,695 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 200,000 | 10,010,005 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 200,000 | $ | 10,010,005 | |||||
|
|
|
|
PGIM QMA Strategic Alpha International Equity ETF
Reporting period ended August 31, 2019:
Shares | Amount | |||||||
Shares sold | 500,000 | $ | 25,062,500 | |||||
Shares contributedin-kind (Subscriptionin-kind) | 300,000 | 14,725,690 | ||||||
Shares redeemedin-kind (Redemptionin-kind) | (100,000 | ) | (5,179,380 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 700,000 | 34,608,810 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 700,000 | $ | 34,608,810 | |||||
|
|
|
|
The Fund may make payment for Fund shares redeemed and contributed wholly or in part by distributing portfolio securities to shareholders. For the period ended August 31, 2019, the Funds had subscriptionsin-kind and redemptionsin-kind with total proceeds in the amounts presented in above tables.
7. Borrowings
The Trust, on behalf of the Funds, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks.
The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 4, 2018 through October 3, 2019. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCA is paid monthly and at a
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per annum interest rate of 1.25% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Subsequent to the reporting period end, the SCA has been renewed effective October 3, 2019 and will continue to provide a commitment of $900 million through October 1, 2020. The commitment fee paid by the Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.20% plus the higher of (1) the effective federal funds rate, (2) theone-month LIBOR rate or (3) zero percent.
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Funds did not utilize the SCA during the reporting period ended August 31, 2019.
8. Risks of Investing in the Fund
The Funds’ risks include, but are not limited to, some or all of the risks discussed below:
Authorized Participant Concentration Risk:Only an Authorized Participant may engage in creation or redemption transactions directly with the Funds. The Funds have a limited number of intermediaries that act as Authorized Participants and none of these Authorized Participants is or will be obligated to engage in creation or redemption transactions. To the extent that these intermediaries exit the business or are unable to or choose not to proceed with creation and/ or redemption orders with respect to the Funds and no other Authorized Participant creates or redeems, shares of the Funds may trade at a substantial discount or premium to NAV, may trade at larger spreads and possibly face trading halts and/or delisting.
Equity and Equity-Related Securities Risks:The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Series invests could go down. The Series’ holdings can vary significantly from broad market indexes and the performance of the Series can deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
ETF Shares Trading Risk:Funds shares are listed for trading on the Exchange and the shares are bought and sold in the secondary market at market prices. The market prices of the shares of the Funds are expected to fluctuate in response to changes in the Funds’
PGIM QMA Strategic Alpha ETFs | 135 |
Notes to Financial Statements(continued)
NAVs, the intraday value of the Funds’ holdings and supply and demand for shares of the Funds. We cannot predict whether shares of the Funds will trade above, below or at their NAV. Trading on the Exchange, including trading of Funds shares, may be halted in certain circumstances and shareholders may not be able to sell Funds shares at the time or price desired. During periods of stressed market conditions, the market for the shares of the Funds may become less liquid in response to deteriorating liquidity in the markets for the Funds’ portfolio investments. This adverse effect on the liquidity of the Funds’ shares could lead to differences between the market price of the Funds’ shares and the NAV of those shares. There can be no assurance that the requirements of the Exchange to maintain the listing of shares of the Funds will continue to be met. At times, trading in the securities of ETFs has become volatile and unpredictable and the price of ETFs shares has diverged from market driven fundamentals. Since the Funds are new, an active secondary market for the shares of the Funds may not develop or may not continue once developed.
Risks of Investing in Equity and Mortgage Real Estate Investment Trusts (REITs):Real estate securities are subject to similar risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of default or of payments that occur earlier or later than expected, and such loans may also includeso-called “subprime” mortgages. The value of these securities will rise and fall in response to many factors, Including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management of the underlying properties.
In addition, investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs may be affected by changes in the value of the underlying property owned by the REITs, while REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. Since REITs are relatively smaller in size when compared to the broader market, and smaller companies tend to be more volatile than larger companies, they may be more volatile and/or more illiquid than other types of equity securities. REITs are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.
Foreign Securities Risk:The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more
136 |
volatile than US markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.
Market and Credit Risk:Securities markets may be volatile and the market prices of the Funds’ securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Funds fall, the value of an investment in the Funds will decline. Additionally, the Funds may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Funds have unsettled or open transactions defaults.
Concentration Risk:To the extent that the Funds are concentrated in the securities of companies, a particular market, industry, group of industries, sector or asset class, country, region or group of countries, the Funds may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class, country, region or group of countries.
9. Recent Accounting Pronouncements and Reporting Updates
In August 2018, the FASB issued Accounting Standards Update (“ASU”)No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Funds’ policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Manager has evaluated the implications of certain provisions of the ASU and has determined to early adopt aspects related to the removal and modification of certain fair value measurement disclosures under the ASU effective immediately. The Manager continues to evaluate certain other provisions of the ASU and does not expect a material impact to financial statement disclosures.
In September 2019, the Securities and Exchange Commission adopted a new rule and related form amendments regulating ETFs, which will become effective 60 days after publication in the Federal Register. The Manager is currently evaluating the rule and form amendments, but does not anticipate any material impact on future financial statement disclosures.
PGIM QMA Strategic Alpha ETFs | 137 |
PGIM QMA Strategic Alpha Large-Cap Core ETF
Financial Highlights
October 17, 2018(d) through | ||||
Per Share Operating Performance(a): | ||||
Net Asset Value, Beginning of Period | $50.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.89 | |||
Net realized and unrealized gain (loss) on investments | 1.67 | |||
Total from investment operations | 2.56 | |||
Less Dividends and Distributions: | ||||
Dividends from net investment income | (0.66 | ) | ||
Net asset value, end of period | $51.90 | |||
Total Return(b): | 5.20% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $10,380 | |||
Average net assets (000) | $11,164 | |||
Ratios to average net assets: | ||||
Expenses after waivers and/or expense reimbursement | 0.17% | (c) | ||
Expenses before waivers and/or expense reimbursement | 0.17% | (c) | ||
Net investment income (loss) | 2.04% | (c) | ||
Portfolio turnover rate | 92% | (e)(f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Annualized. |
(d) | Commencement of operations. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
(f) | Portfolio turnover excludes the value of portfolio securities received or delivered as a result ofin-kind fund share transactions. [if any] |
See Notes to Financial Statements.
138 |
PGIM QMA Strategic Alpha Small-Cap Growth ETF
Financial Highlights
November 13, 2018(d) through | ||||
Per Share Operating Performance(a): | ||||
Net Asset Value, Beginning of Period | $50.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.39 | |||
Net realized and unrealized gain (loss) on investments | (2.13 | ) | ||
Total from investment operations | (1.74 | ) | ||
Less Dividends and Distributions: | ||||
Dividends from net investment income | (0.29 | ) | ||
Net asset value, end of period | $47.97 | |||
Total Return(b): | (3.50 | )% | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $9,593 | |||
Average net assets (000) | $10,819 | |||
Ratios to average net assets: | ||||
Expenses after waivers and/or expense reimbursement | 0.29% | (c) | ||
Expenses before waivers and/or expense reimbursement | 0.29% | (c) | ||
Net investment income (loss) | 0.98% | (c) | ||
Portfolio turnover rate | 78% | (e)(f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Annualized. |
(d) | Commencement of operations. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
(f) | Portfolio turnover excludes the value of portfolio securities received or delivered as a result ofin-kind fund share transactions. [if any] |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 139 |
PGIM QMA Strategic Alpha Small-Cap Value ETF
Financial Highlights
November 13, 2018(d) through | ||||
Per Share Operating Performance(a): | ||||
Net Asset Value, Beginning of Period | $50.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.72 | |||
Net realized and unrealized gain (loss) on investments | (3.41 | ) | ||
Total from investment operations | (2.69 | ) | ||
Less Dividends and Distributions: | ||||
Dividends from net investment income | (0.54 | ) | ||
Net asset value, end of period | $46.77 | |||
Total Return(b): | (5.39 | )% | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $9,353 | |||
Average net assets (000) | $10,627 | |||
Ratios to average net assets: | ||||
Expenses after waivers and/or expense reimbursement | 0.29% | (c) | ||
Expenses before waivers and/or expense reimbursement | 0.29% | (c) | ||
Net investment income (loss) | 1.86% | (c) | ||
Portfolio turnover rate | 66% | (e)(f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Annualized. |
(d) | Commencement of operations. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
(f) | Portfolio turnover excludes the value of portfolio securities received or delivered as a result ofin-kind fund share transactions. [if any] |
See Notes to Financial Statements.
140 |
PGIM QMA Strategic Alpha International Equity ETF
Financial Highlights
December 4, 2018(d) through | ||||
Per Share Operating Performance(a): | ||||
Net Asset Value, Beginning of Period | $50.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 1.16 | |||
Net realized and unrealized gain (loss) on investments and foreign currency transactions | (0.63 | ) | ||
Total from investment operations | 0.53 | |||
Less Dividends and Distributions: | ||||
Dividends from net investment income | (0.98 | ) | ||
Net asset value, end of period | $49.55 | |||
Total Return(b): | 1.09% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $34,687 | |||
Average net assets (000) | $27,908 | |||
Ratios to average net assets: | ||||
Expenses after waivers and/or expense reimbursement | 0.29% | (c) | ||
Expenses before waivers and/or expense reimbursement | 0.29% | (c) | ||
Net investment income (loss) | 3.12% | (c) | ||
Portfolio turnover rate | 63% | (e)(f) |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Annualized. |
(d) | Commencement of operations. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
(f) | Portfolio turnover excludes the value of portfolio securities received or delivered as a result ofin-kind fund share transactions. [if any] |
See Notes to Financial Statements.
PGIM QMA Strategic Alpha ETFs | 141 |
Report of Independent Registered Public Accounting Firm
To the Shareholders of the Funds and Board of Trustees
PGIM ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of the funds listed in Appendix A (each, a Fund and collectively, the Funds), each a series of PGIM ETF Trust, including the schedules of investments, as of August 31, 2019, the related statements of operations for the periods listed in Appendix A, the statements of changes in net assets for the periods listed in Appendix A, and the related notes (collectively, the financial statements) and the financial highlights for the periods indicated therein. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each Fund as of August 31, 2019, the results of its operations and changes in its net assets for the period listed in Appendix A, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2019, by correspondence with the custodian, transfer agents, and brokers, or by other appropriate auditing procedures when replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more PGIM and/or Prudential Retail investment companies since 2003.
New York, New York
October 15, 2019
142 |
Appendix A
PGIM QMA Strategic AlphaLarge-Cap Core ETF
Statement of operations and statement of changes in net assets for the period from October 17, 2018 (commencement of operations) through August 31, 2019
PGIM QMA Strategic AlphaSmall-Cap Growth ETF
Statement of operations and statement of changes in net assets for the period from November 13, 2018 (commencement of operations) through August 31, 2019
PGIM QMA Strategic AlphaSmall-Cap Value ETF
Statement of operations statement of changes in net assets for the period from November 13, 2018 (commencement of operations) through August 31, 2019
PGIM QMA Strategic Alpha International Equity ETF
Statement of operations and statement of changes in net assets for the period from December 4, 2018 (commencement of operations) through August 31, 2019
PGIM QMA Strategic Alpha ETFs | 143 |
Federal Income Tax Information(unaudited)
For the period ended August 31, 2019, the Funds report the maximum amount allowable under section 854 of the Internal Revenue Code, but not less than, the following percentages of the ordinary income dividends paid as 1) qualified dividend income (QDI); and 2) eligible for corporate dividends received deduction (DRD):
QDI | DRD | |||||||
PGIM QMA Strategic AlphaLarge-Cap Core ETF | 100.00 | % | 100.00 | % | ||||
PGIM QMA Strategic AlphaSmall-Cap Growth ETF | 100.00 | % | 100.00 | % | ||||
PGIM QMA Strategic AlphaSmall-Cap Value ETF | 99.14 | % | 100.00 | % | ||||
PGIM QMA Strategic Alpha International Equity ETF | 100.00 | % | — |
For the period ended August 31, 2019, the PGIM QMA Strategic Alpha International Equity ETF made an election to pass through the maximum amount of the portion of the ordinary income dividends paid derived from foreign source income as well as any foreign taxes paid by the Fund in accordance with Section 853 of the Internal Revenue Code of the following amounts: $54,575 foreign tax credit from recognized foreign source income of $767,615.
In January 2020, you will be advised on IRS Form1099-DIV or substitute1099-DIV, as to the federal tax status of dividends received by you in calendar year 2019.
144 |
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS(unaudited)
Information about Board Members and Officers of the Funds is set forth below. Board Members who are not deemed to be “interested persons” of the Funds, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Funds are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering theday-to-day operations of the Funds.
Independent Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Ellen S. Alberding |
President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018). |
None. |
Since December 2017 | |||
Kevin J. Bannon |
Retired; Managing Director (April2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May2003-May 2007) of BNY Hamilton Family of Mutual Funds. |
Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). |
Since December 2017 |
PGIM QMA Strategic Alpha ETFs
Independent Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Linda W. Bynoe |
President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). |
Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). |
Since December 2017 | |||
Barry H. Evans |
Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S. |
Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). |
Since December 2017 | |||
Keith F. Hartstein |
Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Independent Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Laurie Simon Hodrick |
A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). |
Independent Director, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (since July 2018) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). |
Since December 2017 | |||
Michael S. Hyland, CFA |
Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). |
None. |
Since December 2017 | |||
Brian K. Reid |
Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017). |
None. |
Since March 2018 |
PGIM QMA Strategic Alpha ETFs
Independent Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Grace C. Torres |
Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. |
Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. |
Since December 2017 |
Interested Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Stuart S. Parker |
President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). |
None. |
Since December 2017 |
Visit our website at pgiminvestments.com
Interested Board Members | ||||||
Name |
Principal Occupation(s) |
Other Directorships |
Length of | |||
Scott E. Benjamin |
Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). |
None. |
Since December 2017 |
Fund Officers(a) | ||||
Name |
Principal Occupation(s) During Past Five Years |
Length of | ||
Raymond A. O’Hara |
Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of PGIM Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.). |
Since December 2017 |
PGIM QMA Strategic Alpha ETFs
Fund Officers(a) | ||||
Name |
Principal Occupation(s) During Past Five Years |
Length of | ||
Dino Capasso |
Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. |
Since December 2017 | ||
Andrew R. French |
Vice President of PGIM Investments LLC (December 2018-Present); formerly Vice President and Corporate Counsel (February 2010-December 2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. |
Since December 2017 | ||
Jonathan D. Shain |
Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc. |
Since December 2017 | ||
Claudia DiGiacomo |
Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). |
Since December 2017 | ||
Diana N. Huffman |
Vice President and Corporate Counsel (since September 2015) of Prudential; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). |
Since March 2019 | ||
Kelly A. Coyne |
Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). |
Since December 2017 | ||
Christian J. Kelly |
Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); formerly, Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). |
Since January 2019 |
Visit our website at pgiminvestments.com
Fund Officers(a) | ||||
Name |
Principal Occupation(s) During Past Five Years |
Length of | ||
Lana Lomuti |
Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. |
Since December 2017 | ||
Russ Shupak |
Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Deborah Conway |
Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. |
Since October 2019 | ||
Elyse M. McLaughlin |
Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration. |
Since October 2019 |
(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
PGIM QMA Strategic Alpha ETFs
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | pgiminvestments.com |
PROXY VOTING |
The Board of Trustees of the Funds has delegated to the Funds’ subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to each Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how each Fund voted proxies relating to portfolio securities during the most recent12-month period ended June 30 is available on the Funds’ website and on the Securities and Exchange Commission’s website. |
TRUSTEES |
Ellen S. Alberding• Kevin J. Bannon• Scott E. Benjamin• Linda W. Bynoe• Barry H. Evans• Keith F. Hartstein• Laurie Simon Hodrick• Michael S. Hyland• Stuart S. Parker• Brian K. Reid• Grace C. Torres |
OFFICERS |
Stuart S. Parker,President•Scott E. Benjamin,Vice President• Christian J. Kelly,Treasurer and Principal Financial and Accounting Officer• Raymond A. O’Hara,Chief Legal Officer• Dino Capasso,Chief Compliance Officer• Charles H. Smith,Anti-Money Laundering Compliance Officer • Andrew R. French,Secretary• Jonathan D. Shain,Assistant Secretary• Claudia DiGiacomo,Assistant Secretary• Diana N. Huffman,Assistant Secretary•Kelly A. Coyne,Assistant Secretary• Lana Lomuti,Assistant Treasurer• Russ Shupak,Assistant Treasurer• Elyse McLaughlin,Assistant Treasurer• Deborah Conway,Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
SUBADVISER | QMA LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
CUSTODIAN/TRANSFER AGENT | Brown Brothers Harriman & Co. | 50 Post Office Square Boston, MA 02110 | ||
| ||||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
| ||||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 | ||
|
An investor should consider the investment objectives, risks, charges, and expenses of the Funds carefully before investing. The prospectus and summary prospectus contain this and other information about the Funds. An investor may obtain the prospectus and summary prospectus for each Fund by visiting our website atpgiminvestments.com or by calling(800) 225-1852. The prospectus and summary prospectus for each Fund should be read carefully before investing. |
E-DELIVERY |
To receive your fund documents online, go topgiminvestments.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM QMA Strategic Alpha ETFs, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission on Form N-PORT. Each Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. Form N-PORT is filed with the Commission quarterly, and each Fund’s full portfolio holdings as of the first and third fiscal quarter-ends (as of the third month of the Fund’s fiscal quarter for reporting periods on or after September 30, 2019) will be made publicly available 60 days after the end of each quarter at sec.gov. |
Each Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852. |
Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
Fund | Ticker Symbol | |
PGIM QMA Strategic Alpha Large-Cap Core ETF | PQLC | |
PGIM QMA Strategic Alpha Small-Cap Growth ETF | PQSG | |
PGIM QMA Strategic Alpha Small-Cap Value ETF | PQSV | |
PGIM QMA Strategic Alpha International Equity ETF | PQIN |
ETF1002E
Item 2 – Code of Ethics — See Exhibit (a)
As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.
The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3 – Audit Committee Financial Expert –
The registrant’s Board has determined that Mr. Kevin J. Bannon, member of the Board’s Audit Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.
Item 4 – Principal Accountant Fees and Services – (a) Audit Fees
For the fiscal years ended August 31, 2019 and August 31, 2018, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $126,900 and $37,500 respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.
(b) Audit-Related Fees
For the fiscal years ended August 31, 2019 and August 31, 2018: none.
(c) Tax Fees
For the fiscal years ended August 31, 2019 and August 31, 2018: none.
(d)All Other Fees
For the fiscal years ended August 31, 2019 and August 31, 2018: none.
(e) (1)Audit CommitteePre-Approval Policies and Procedures
THE PGIM MUTUAL FUNDS
AUDIT COMMITTEE POLICY
on
Pre-Approval of Services Provided by the Independent
Accountants
The Audit Committee of each PGIM Mutual Fund is charged with the responsibility to monitor the independence of the
Fund’s independent accountants. As part of this responsibility, the Audit Committee mustpre-approve the independent accounting firm’s engagement to render audit and/or permissiblenon-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:
• | a review of the nature of the professional services expected to be provided, |
• | a review of the safeguards put into place by the accounting firm to safeguard independence, and |
• | periodic meetings with the accounting firm. |
Policy for Audit andNon-Audit Services Provided to the Funds
On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related andnon-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services.
Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed
non-audit services will not adversely affect the independence of the independent accountants. Such proposednon-audit services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.
The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals topre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider forpre-approval.
Audit Services
The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:
• | Annual Fund financial statement audits |
• | Seed audits (related to new product filings, as required) |
• | SEC and regulatory filings and consents |
Audit-related Services
The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:
• | Accounting consultations |
• | Fund merger support services |
• | Agreed Upon Procedure Reports |
• | Attestation Reports |
• | Other Internal Control Reports |
Individual audit-related services that fall within one of these categories (except for fund merger support services) and are not presented to the Audit Committee as part of the annualpre-approval process are subject to an authorizedpre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under suchpre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject topre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated). Fees related to fund merger support services are subject to a separate authorizedpre-approval by the Audit Committee with fees determined on a per occurrence and merger complexity basis.
Tax Services
The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:
• | Tax compliance services related to the filing or amendment of the following: |
• | Federal, state and local income tax compliance; and, |
• | Sales and use tax compliance |
• | Timely RIC qualification reviews |
• | Tax distribution analysis and planning |
• | Tax authority examination services |
• | Tax appeals support services |
• | Accounting methods studies |
• | Fund merger support services |
• | Tax consulting services and related projects |
Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annualpre-approval process are subject to an authorizedpre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under suchpre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject topre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated).
OtherNon-Audit Services
Certainnon-audit services that the independent accountants are legally permitted to render will be subject topre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee anypre-approval decisions made pursuant to this Policy.Non-audit services presented forpre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.
Proscribed Services
The Fund’s independent accountants will not render services in the following categories ofnon-audit services:
• | Bookkeeping or other services related to the accounting records or financial statements of the Fund |
• | Financial information systems design and implementation |
• | Appraisal or valuation services, fairness opinions, orcontribution-in-kind reports |
• | Actuarial services |
• | Internal audit outsourcing services |
• | Management functions or human resources |
• | Broker or dealer, investment adviser, or investment banking services |
• | Legal services and expert services unrelated to the audit |
• | Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible. |
Pre-approval ofNon-Audit Services Provided to Other Entities Within the PGIM Fund Complex
Certainnon-audit services provided to PGIM Investments LLC or any of its affiliates that also provide ongoing services to the PGIM Mutual Funds will be subject topre-approval by the Audit Committee. The onlynon-audit services provided to these entities that will requirepre-approval are thoserelated directly to the operations and financial reporting of the Funds. Individual projects that are not presented to the Audit Committee as part of the annualpre-approval process will be subject topre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $30,000. Services presented forpre-approval pursuant to this
paragraph
will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.
Although the Audit Committee will notpre-approve all services provided to PGIM Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to PGIM Investments and its affiliates.
(e) (2)Percentage of services referred to in 4(b) – 4(d) that were approved by the audit committee– For the fiscal years ended August 31, 2019 and August 31, 2018: none.
(f)Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greaterthan 50%.
The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
(g)Non-Audit Fees
The aggregatenon-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years ended August 31, 2019 and August 31, 2018 was $0 and $0, respectively.
(h)Principal Accountant’s Independence
Not applicable as KPMG has not providednon-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were notpre-approved pursuant to Rule2-01(c)(7)(ii) of RegulationS-X.
Item 5 – Audit Committee of Listed Registrants –
The registrant has a separately designated standing audit committee (the “Audit Committee”) established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee are Kevin J. Bannon (chair), Laurie Simon Hodrick, Michael S. Hyland, CFA, Brian K. Reid, and Keith F. Hartstein(ex-officio).
Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies – Not applicable.
Item 8 – Portfolio Managers ofClosed-End Management Investment Companies – Not applicable.
Item 9 – Purchases of Equity Securities byClosed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
Item 11 – Controls and Procedures
(a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required |
disclosure. |
(b) | There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12 – Controls and Procedures - Disclosure of Securities Lending Activities forClosed-End Management Investment Companies – Not applicable.
Item 13 – Exhibits
(a) | (1) Code of Ethics – Attached hereto as ExhibitEX-99.CODE-ETH | |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as ExhibitEX-99.CERT. | ||
(3) Any written solicitation to purchase securities under Rule23c-1. – Not applicable. | ||
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as ExhibitEX-99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | PGIM ETF Trust | |
By: | /s/ Andrew R. French | |
Andrew R. French | ||
Secretary | ||
Date: | October 15, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Stuart S. Parker | |
Stuart S. Parker | ||
President and Principal Executive Officer | ||
Date: | October 15, 2019 | |
By: | /s/ Christian J. Kelly | |
Christian J. Kelly | ||
Treasurer and Principal Financial and Accounting Officer | ||
Date: | October 15, 2019 |