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September 22, 2017 at 02:06 PM
Prudential Financial Inc. is looking to get into the $3.1 trillion market for exchange-traded funds, according to a person familiar with the matter.
PGIM Investments, part of the Newark, New Jersey-based insurer’s $1 trillion asset-management unit, is exploring steps to build an ETF business in the U.S. after gaining regulatory approval to start some funds, the person said, asking not to be identified because the decision hasn’t been made public. The company is evaluating ways to package both its quantitative and active strategies into ETFs, the person said.
Prudential, the largest U.S. life insurer by assets, joins the companies that have pushed into the ETF market in recent years.
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San Antonio-based United Services Automobile Association filed for permission to start a new line of ETFs earlier this year, and TIAA’s Nuveen hired Martin Kremenstein from Deutsche Bank AG in 2015 to lead a push into the market.
Linda Fung, a spokeswoman for Prudential, declined to comment on the ETF move.
While actively managed funds account for about 1% of ETFs in the U.S., cash has surged into such strategies this year, boosting assets to almost $40 billion as of the end of August, London-based research firm ETFGI LLP wrote in a report this week. Smart-beta equity ETFs, which shun indexes weighted by market capitalization in favor of other quantitative factors, climbed to almost $560 billion, a separate study from the company shows.
