Principal Asset Management has launched a new actively managed ETF that provides exposure to a high-conviction portfolio of equities listed outside the United States.
George Maris, CIO and Global Head of Equities, Principal Asset Management.
The Principal International Equity ETF (PIEQ US) is traded on Cboe BZX Exchange and is managed by Principal’s equities team, which oversees approximately $155 billion in assets under management.
The fund aims to tap into growing demand for active ETF strategies which Principal notes reached a record $350 billion in total AUM in 2023. Furthermore, advisor allocations to active strategies are projected to increase by 45% over the next two years.
Investment Strategy
The fund aims for long-term capital growth by investing in non-US equities, including emerging market securities, across large, mid, and small-cap segments. Its investments are diversified across at least ten countries, with a balanced allocation to both value and growth-oriented stocks.
The strategy centers on identifying companies where the market underestimates free cash flow potential. Principal emphasizes that this dual focus on growth and value equities, supported by deep fundamental analysis and uncorrelated idea generation, is key to achieving excess returns over the long term.
As of 11 November, PIEQ’s portfolio consisted of 30 holdings with the most notable positions being Deutsche Telekom (4.8%), Unilever (4.5%), BAE Systems (4.5%), AIB Group (4.2%), Sanofi (3.6%), Taiwan Semiconductor (3.6%), Hannover Rueck (3.5%), ASML (3.5%), AXA (3.5%), and JD.com (3.4%).
The ETF charges an expense ratio of 0.48% and makes annual distributions to investors.
By blending growth and value investing styles and leveraging global-local expertise, PIEQ offers a distinctive actively managed option for investors seeking international equity exposure.
George Maris, CIO and Global Head of Equities, Principal Asset Management, commented: “This new offering continues the buildout of our active ETF lineup, which leverages our strong capabilities and provides investors an efficient vehicle for investing in international markets. As the active ETF market expands, we remain committed to developing solutions offering value, flexibility, and expert insights to meet the evolving needs of our clients seeking diversified global exposure.”