Morningstar Magazine - August/September 2017 - 51

People Pillar: Positive ∞
Portfolio managers Michael J. Collins, Robert Tipp,
and Arvind Rajan manage several portfolios
for Prudential; the first two comanage Prudential
Total Return Bond PDBAX and Prudential
Absolute Return Bond PADZX as well. They are
backed by a fixed-income group with significant
research manpower, including roughly 200
portfolio managers and analysts, mostly based
in Newark, N.J. The group also draws on
a large team focused on proprietary analytics, risk
management, and performance attribution.

fund's modest underweighting in the U.S. dollar,
its long-duration bias-8.4 years versus 6.8
for the index-and the aforementioned, moreyield-rich exposures.
Performance Pillar: Positive ∞
The fund has hit occasional bumps but rarely
any of long-term consequence. It lagged its index
and placed inside the bottom third among
funds making active currency bets during the
2008 financial crisis, for example, but its
Institutional share class' 3.9% loss was not
catastrophic. The fund also trailed its benchmark
during the third-quarter 2011 European
crisis but was about flat to the subgroup. When
energy-heavy offerings were hurt by falling
oil prices from mid-2014 to the end of 2015, the
fund roughly matched its index and placed
above the subgroup's midpoint. It had similarly
moderate showings during rate spikes
from late 2010 to early 2011 and during the 2013
taper tantrum.

Collins also manages some of the firm's other
multisector strategies. He has been at Prudential
since 1986 and has experience as a high-yield
manager and developing proprietary quantitative
international interest-rate and currency models.
Tipp, at the firm since 1991, heads its global
bonds team and drives global rate positioning for
several portfolios. Rajan is head of global and
macro at the firm, leading the foreign exchange,
global bond, emerging-markets debt, investment
strategy, and economic research teams.
Previously, he was head of the firm's fixed-income
quantitative research and risk management
group, and he has several years of experience in
those areas at other firms. Rajan co-wrote The
Structured Credit Handbook (Wiley Financial, 2007).

Those bumps in the road were short-lived, and
since the financial crisis the fund has mostly
stayed ahead of its benchmark and the subgroup
median. Prudential's attribution points to
sector allocation and security selection as
consistently strong and a primary source of the
fund's success. The fund's 10-year return through
April 30 beat its benchmark and placed in
the best third of both the world-bond category
and the subset of its peers making active currency
plays. And while the fund's volatility has been
higher than average, it hasn't been extreme.

Parent Pillar: Positive ∞
The Prudential funds are part of PGIM, the
new name for the former Prudential Investment
Management, the asset-management arm
of conglomerate Prudential Financial. PGIM has

Credit Quality 06/30/2017

Regional Exposure Stats 06/30/2017

Fund

Cat

Proxy

Bonds

BBB BB

B





http://global.morningstar.com/Morningstarmagazine

Table of Contents for the Digital Edition of Morningstar Magazine - August/September 2017

Contents
Morningstar Magazine - August/September 2017 - Cover1
Morningstar Magazine - August/September 2017 - Cover2
Morningstar Magazine - August/September 2017 - 1
Morningstar Magazine - August/September 2017 - 2
Morningstar Magazine - August/September 2017 - Contents
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