At PGIM Quantitative Solutions, our investment philosophy reflects our 45-year track record and our vision of how markets will evolve. We believe any plausible forward-looking view will likely be different than what investors have experienced over the past 10 years, and that markets will provide a more challenging environment. We therefore believe that asset owners will require an adaptive investment manager capable of responding quickly and efficiently to those changing conditions.
Accordingly, we put a premium on both agility and robust diversification: agility to cope with the changes that markets will throw at investors; and diversification to provide a measure of protection during market downturns. This combination is central to all of our investment platforms.
Our philosophy is grounded in the conviction that a systematic approach based on fundamentals can help our clients achieve better outcomes, an approach that harnesses our quantitative process to provide breadth at an asset allocation or stock selection level. We believe in protecting against behavioral bias, and while a reliance on human judgement can work, there are inherent security and portfolio risks that managers might overlook. Our approach also anchors quantitative processes on fundamental views, ensuring strategies don’t get disconnected from the changing circumstances in the markets.
We develop insights and build solutions with the benefit of experience. After all, if the future is going to look different from the recent past, it’s important that clients are served by an asset manager that has navigated through multiple investment environments – not just the relatively benign one we’ve experienced since the Global Financial Crisis.
PGIM Quantitative Solutions seeks to deliver systematic solutions to solve our clients’ individual investment challenges. Our processes harness fundamental insights built on academic and macroeconomic foundations that aim to add value to client portfolios over the long term, continually researching new investment opportunities to provide the most effective solutions. We review the latest market data with the goal of positioning our portfolios to smoothly guide our clients through any economic climate. In our business, everyone and everything is oriented around quantitative methods. We believe this combined systematic and fundamental approach can deliver the greatest impact for our clients because:
Common foundational beliefs
Everyone shares the same foundational beliefs – starting with the data: Data collection and analysis is a significant challenge, and it is important that data is at the core of everything we do, from how we track information, to how we modify code, to how we test.
Our quantitative platform provides a level of flexibility and customization that fundamental or combined platforms struggle with: As a systematic manager, we can easily modify our processes and customize our offerings to adapt to specific client preferences and risk-return profiles. Our multi-factor portfolios provide cost-efficient diversification, along with the collective wisdom that comes from decades of enhancements to our decision-making models.
Systematic investing removes or minimizes human biases: Our strategy is predicated on a team-based approach that negates the risk of placing market calls into the hands of a single decision-maker. Our systematic approach protects against behavioral bias.
We believe that ESG will be a core component of the future for investment management firms, and we are focused on applying ESG principles customized to a quant environment in a thoughtful and forward-looking way.