Principal launches three new multi-factor ETFs

Strategies built to meet needs of RobustWealth digital platform

Principal Global Investors has expanded its factor ETF suite with the launch of the three new multi-factor ETFs: Principal U.S. Large-Cap Multi-Factor Core Index ETF (PLC), Principal U.S. Small-Mid Cap Multi-Factor Core Index ETF (PSM), and Principal International Multi-Factor Core Index ETF (PDEV) (the Funds). The Funds launched July 24, 2019.

Multi-factor Core ETFs are designed to serve as the foundation of an investor’s portfolio, complementing alpha-generating, high active share strategies. As a global asset manager with a heritage of factor investing expertise, Principal now offers a broader set of factor-based strategies to address a wider net of investment objectives and outcomes. PLC, PSM, and PDEV were initially developed for RobustWealth, the digital wealth management platform of Principal, to provide their investors with innovative strategic beta strategies with relatively low tracking error and competitive fees but will also be available to the general marketplace.

The portfolio management team for the Funds within Principal’s Global Systematic Solutions team (GSS) maintains innovative factor definitions and combinations that seek to enhance investors’ risk/return profile through outperformance of standard market-cap weighted indices while not increasing risk. Portfolio construction for the Funds combines 3 distinct factors—shareholder yield, momentum, and quality growth.

“We are excited with the growth and direction of our ETF platform. These ETFs provide additional choices for our investors when building portfolios. The factor ETFs are index-aware and provide a balance of potential outperformance and limited tracking error to established market-cap weighted benchmarks. They are cost-efficient, comprised of multiple factors, and designed for use as core holdings in portfolios.” Paul Kim, Managing Director, ETF Strategy at Principal Global Investors.

Principal U.S. Large-Cap Multi-Factor Core Index ETF (PLC)

The Principal U.S. Large-Cap Multi-Factor Core Index ETF (the Fund) launched on July 24, 2019. The strategic beta fund is designed to provide broad index-aware U.S. large cap equity exposure while incorporating a multi-factor model and modified weighting process to potentially enhance the risk/return profile. The multi-factor model seeks to identify equity securities of companies in the Nasdaq US Large Cap IndexSM that exhibit potential for high degrees of sustainable shareholder yield (value), pricing power (quality growth), and strong momentum. The Fund’s objective is to track the Nasdaq US Large Cap Select Leaders Core IndexSM.

Principal U.S. Small-MidCap Multi-Factor Core Index ETF (PSM)

The Principal U.S. Small-MidCap Multi-Factor Core Index ETF (the Fund) launched on July 24, 2019. The strategic beta fund is designed to provide broad index-aware U.S. small, mid-cap equity exposure while incorporating a multi-factor model and modified weighting process to potentially enhance the risk/return profile. Multi-factor model seeks to identify equity securities of companies in the Nasdaq US Small Cap IndexSM and Nasdaq US Mid Cap IndexSM that exhibit potential for high degrees of sustainable shareholder yield (value), pricing power (quality growth), and strong momentum. The Fund’s objective is to track the Nasdaq US Small Mid Cap Select Leaders Core IndexSM.

Principal International Multi-Factor Core Index ETF (PDEV)

Principal International Multi-Factor Core Index ETF (the Fund) launched on July 24, 2019. The strategic beta fund is designed to provide broad index-aware developed international equity exposure while incorporating a multi-factor model and modified weighting process to potentially enhance the risk/return profile. Multi-factor model seeks to identify equity securities of companies in the Nasdaq Developed Market Ex-US Ex-Korea Large Mid Cap IndexSM that exhibit potential for high degrees of sustainable shareholder yield (value), pricing power (quality growth), and strong momentum. The Fund’s objective is to track the Nasdaq Developed Select Leaders Core IndexSM.

Information on Principal’s growing ETF suite, including index methodology, can be found at principalglobal.com

News Release Contact

Investment Products

Jane Slusark, 515-362-0482
Teresa Thoensen, 515-878-0800

About Principal Global Systematic Solutions

Portfolio Managers Mark R. Nebelung, CFA and Jeffrey Schwarte, CFA are leaders of Principal’s Global Systematic Solutions (GSS), a team with nearly 20 years of proprietary factor data, tools, and infrastructure. GSS’s systematic implementation approach is at the forefront of factor-based equity investing. Through pioneering research GSS identifies how equity factor vary across time and global markets. Innovative factor definitions and combinations are designed to overcome frequently overlooked risks and structural shortcomings associated with passive investing. PLC, PSM, and PDEV combine three distinct factors—shareholder yield, momentum, and quality growth—to enhance investors’ risk/return profile.

About Principal®

Principal helps people and companies around the world build, protect and advance their financial well-being through retirement, insurance and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals – offering innovative ideas, investment expertise and real-life solutions to make financial progress possible. To find out more, visit us at principal.com.

Carefully consider the Funds’ objectives, risks, charges, and expenses. Contact your financial professional, visit principalfunds.com or call Sales Support at 800-787-1621 for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.

Asset allocation and diversification do not ensure a profit or protect against a loss. Investing involves risk, including possible loss of principal. 

Risks specific to the Principal U.S. Large-Cap Multi-Factor Core Index ETF: Equity investments involve greater risk, including higher volatility, than fixed-income investment options.

Risks specific to the Principal U.S. Small-MidCap Multi-Factor Core Index ETF: Equity investments involve greater risk, including higher volatility, than fixed-income investment options. Small- and mid-cap stocks may have additional risks including greater price volatility.

Risks specific to the Principal International Multi-Factor Core Index ETF: Equity investments involve greater risk, including higher volatility, than fixed-income investment options. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. Mid-cap stocks may have additional risks, including greater price volatility.

These Funds are new and have limited operating history.

ETFs are subject to risk similar to those of stocks, including those regarding short-selling and margin account maintenance. 

Investor shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Ordinary brokerage commissions apply.

The Nasdaq US Large Cap Select Leaders Core IndexSM is designed to provide exposure to equity securities of companies within the Nasdaq US 500 Large Cap IndexSM that exhibit potential for high degrees of sustainable shareholder yield, pricing power, and strong momentum.

The Nasdaq US Small Mid Cap Select Leaders Core IndexSM is designed to provide exposure to equity securities within the Nasdaq US Small Cap IndexSM and the Nasdaq US Mid Cap IndexSM that exhibit high degrees of sustainable shareholder yield, pricing power, and strong momentum.

The Nasdaq Developed Select Leaders Core IndexSM is designed to provide exposure to equity securities of companies in the Nasdaq Developed Market Ex-US Ex-Korea Large Mid Cap IndexSM that exhibit potential for high degrees of sustainable shareholder yield, pricing power, and strong momentum.

ALPS Distributors, Inc. is the distributor of the Principal ETFs. ALPS Distributors, Inc. and Principal Funds are not affiliated.

Principal, Principal and symbol design, and Principal Financial Group are registered trademarks and services marks of Principal Financial Services, Inc., a Principal Financial Group company.