A $1 trillion money manager shares the key to US growth

Business Insider deputy executive editor Matt Turner speaks to David Hunt, president and CEO of PGIM, who says he thinks its economy is gradually improving, and sees a trend shifting towards corporate reinvestment in growth. Following is a transcript of the video.

Matt Turner:And when you look at the US, you mentioned bringing returns home, and part of that is that returns aren’t available in the US. So when you look at US markets, how do you see what’s going on? Are there any opportunities at home?

David Hunt:So, we absolutely believe that there are significant opportunities. And indeed, we believe that the US economy is in very good shape. We’ve actually recently upped some of our estimates for GDP growth. And we would say the US is growing faster than its real potential GDP, which ultimately leads to a bit of an uptick in inflation, but at the moment we remain pretty optimistic, and I would say the most important part of that optimism is based on — we see a return of business investment. Before, mostly it was on the consumer side, and businesses were leveraging but using a lot of that to buy back shares. In the last 18 months that dynamic has changed. Buybacks have come well down and we’re seeing real business investment into this country. And so, we like that story on the equity side. We like what a lot of that means for fixed income and higher-yielding fixed income, and we remain very constructive on most aspects of the real estate sector, maybe with retail as an exception.

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