Principal® Advances Plan for First Semi-Transparent ETF Offering

By: Principal Global Investors via Business Wire

February 09, 2022 at 09:30 AM EST

Principal Global Investors^® today announced its plan to add its first semi-transparent ETF to its growing line-up of ETFs, filing for an exemptive order to use Fidelity’s active equity ETF methodology. This approach complements the active management capabilities of Principal and will help deliver stronger investment outcomes for clients.

When approved and launched, the first semi-transparent ETF offered by Principal will target real estate assets.

“We believe in active investing and are excited to expand our offerings of new investment strategies and solutions that could deliver strong performance and generate more income for investors,” said Jill Brown, managing director of U.S. Wealth Markets for Principal Global Investors. “There’s tremendous growth potential in semi-transparent ETFs and, with our active management DNA, we believe we’re uniquely positioned to deliver in this space.”

Principal currently offers 14 ETFs – six strategic beta and eight actively managed – that are designed to enhance investor returns, mitigate risk, and improve portfolio diversification. Combined, they represent approximately $5 billion in assets under management¹.

Fidelity’s active equity ETF model employs an innovative “tracking basket” methodology, which maintains the benefits of the ETF structure, provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management.

"We are excited to work with Principal as they seek to expand their ETF offering and develop innovative new solutions to help meet the needs of investors," said Greg Friedman, head of ETF management and strategy at Fidelity. "We believe Fidelity’s methodology is an industry leading approach, designed to operate seamlessly within the existing ETF market.”

About Principal Global Investors^®

Principal Global Investors^® leads global asset management at Principal^®. As a multi-investment team firm, we bring a focused perspective and offer expertise across a host of asset classes.

At our core, we are driven by our purpose to help investors and businesses achieve their financial goals. Our global investment professionals deliver investment solutions for public and private pension funds, foundations and endowments, central banks, insurance companies, sub-advisory arrangements, sovereign wealth funds and individual portfolios.

Principal Global Investors manages approximately $590.6 billion in assets on behalf of over 800 institutional clients located in over 80 markets as well as retirement plans and individual clients, reflecting our worldwide market reach and experience and our commitment to high-quality research and service (as of December 31, 2021). To find out more, visit us at principalglobal.com.

The “tracking basket” methodology maintains confidentiality of a portfolio’s securities and trading strategies by disclosing a “tracking basket” comprised of select recently disclosed portfolio holdings, liquid U.S. ETFs that convey information about the types of instruments in which the fund invests, and cash and cash equivalents. This “tracking basket” is disclosed daily and is used to facilitate the creation and redemption process.

No products or investment vehicles offered by Principal^® are sponsored, endorsed, sold, or promoted by Fidelity or any of its affiliates.

© 2022 Principal Financial Services, Inc. Principal^®, Principal Financial Group^®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and services marks of Principal Financial Services, Inc., in various countries around the world.

¹ As of January 5, 2022