Principal ETFs Overview and Investment Guide

Principal ETFs are a type of exchange-traded fund that allows investors to gain exposure to a broad range of assets, including stocks, bonds, and commodities.

They offer a low-cost and tax-efficient way to invest, with many ETFs charging lower fees than actively managed mutual funds.

A key benefit of Principal ETFs is their ability to provide diversification, which can help reduce risk and increase potential returns.

By spreading investments across different asset classes, investors can reduce their exposure to any one particular market or sector.

ETFs, or Exchange-Traded Funds, are essentially baskets of securities that trade on a stock exchange like individual stocks.

They offer diversification by pooling money from many investors to invest in a variety of assets, such as stocks, bonds, or commodities.

You can buy and sell ETFs throughout the day, giving you flexibility to adjust your investment portfolio as needed.

This is in contrast to mutual funds, which are traded at the end of the day after the market closes.

ETFs can track a specific index, sector, or asset class, allowing you to invest in a broad range of markets with a single fund.

For example, a principal ETF might track the performance of the S&P 500 index, giving you exposure to the top 500 US stocks.

This can be especially useful for investors who want to gain broad exposure to the market without having to buy individual stocks.

By investing in an ETF, you can spread your risk and potentially increase your returns over the long term.

ETFs are designed to track a specific market index, such as the S&P 500, or actively managed by investment professionals. Principal ETFs offer a diverse range of investment options, covering equity, fixed income, and alternative investments.

The performance of Principal ETFs can be measured by their net asset value (NAV) return and market price return. For instance, in the 1-year period, the NAV return was 19.57%, while the market price return was 19.34%.

The performance of Principal ETFs can be compared to the S&P 500 Index and the Morningstar category average. As of 2024, the NAV return of Principal ETFs was 17.89%, while the S&P 500 Index returned 25.02% over the same period.

Here's a summary of the NAV returns of Principal ETFs for the past few years:

The income distribution of Principal ETFs can also provide valuable information. For example, as of December 27, 2024, the income distribution was $0.1192 per share.

Morningstar ratings can also provide an additional layer of information about the performance of Principal ETFs. However, it's essential to note that Morningstar ratings do not reflect the inclusion of sales charges, which could potentially lower the ratings.

The fund's performance over the past year has been quite interesting. In Q1 2024, the fund was traded at a premium for 40 days.

Let's take a closer look at the fund's trading activity. The data shows that in Q2 2024, the fund was traded at a discount for 31 days.

The number of days the fund was traded at a premium decreased in Q3 2024, down to 24 days. Meanwhile, the number of days it was traded at a discount increased, reaching 39 days.

Here's a summary of the fund's trading activity over the past year:

In Q4 2024, the fund was traded at a premium for 31 days.

Principal ETFs offer a range of performance metrics that can help investors evaluate their performance. The 1-year net asset value (NAV) return for Principal ETFs is 19.57%, which is impressive.

The 1-year market price return for Principal ETFs is 19.34%, which is close to the NAV return. However, the market price return can be affected by market volatility and other factors.

The S&P 500 Index, a benchmark for the US stock market, performed well in the 1-year period, with a return of 26.38%. This is significantly higher than the Principal ETFs' returns.

Here's a comparison of the Principal ETFs' performance with the Morningstar category average for Large Blend funds:

As you can see, the Principal ETFs' performance is lower than the Morningstar category average for Large Blend funds. This is likely due to the fact that Principal ETFs use active management strategies, which can be riskier than passive management.

The Principal ETFs' 3-year NAV return is 11.48%, which is lower than the Morningstar category average for Large Blend funds. This suggests that Principal ETFs may not be the best choice for long-term investors.

The Principal ETFs' expense ratios are competitive, which can help enhance overall portfolio returns over the long term. The expense ratio is a key factor to consider when evaluating the cost of investing in an ETF.

Principal's International Equity ETF is a large-cap portfolio managed by the Principal equities team, a group with over two decades of experience managing non-U.S. equity strategies.

The team, led by George Maris, has a deep understanding of international markets and leverages global insights with local knowledge to deliver specialized equity investment solutions.

This ETF is designed to provide investors with an efficient vehicle for investing in international markets, and it's part of a larger lineup of active ETFs from Principal that are expected to continue growing in popularity.

In fact, demand for active ETFs reached an all-time high of $349 billion in 2023, and advisor allocations to active ETFs are expected to increase by 45% over the next two years.

Principal's International Equity ETF is one of 10 ETFs designed to enhance investor returns, mitigate risk, and improve portfolio diversification, with a combined $4.7 billion in assets under management.

The Principal equities team has $154.8 billion in assets under management, and the company manages a total of $585.6 billion in assets.

The demand for active ETFs reached a record high of $349 billion in 2023, a trend that is expected to continue.

Advisor allocations to active ETFs are projected to increase by 45% over the next two years, driven by investor interest in these products.

Principal Asset Management is well-positioned to capitalize on this trend, with a strong equity team and a proven track record of managing non-U.S. equity strategies.

The Principal equity team has over two decades of experience in this area, giving investors confidence in their ability to navigate international markets.

The addition of the new international equity ETF brings Principal's total ETF offerings to 10, representing approximately $4.7 billion in AUM.