Principal Exchange-Traded Funds - Principal Real Estate Active Opportunities ETF (BYRE)

ETF Principal Exchange-Traded Funds - Principal Real Estate Active Opportunities ETF (REIT): Summary

Profile:

The Principal Real Estate Active Opportunities ETF (REIT) is an actively managed exchange-traded fund that invests primarily in publicly traded real estate investment trusts (REITs) and other real estate-related securities across the globe. It seeks to achieve capital appreciation and generate income through active portfolio management.

Objective:

REIT aims to outperform its benchmark, the FTSE NAREIT All REITs Index, by actively selecting and weighting individual REIT investments based on its research and analysis.

Issuer:

Principal Global Investors is the issuer of REIT. Principal is a leading global asset management firm with over $1.2 trillion in assets under management (as of September 30, 2022).

• Reputation and Reliability: Principal has been in the financial industry for over 135 years and has established a strong reputation for providing innovative investment solutions and excellent client services.
• Management: The ETF is overseen by a team with extensive experience and expertise in the real estate industry, led by Michael Grupe, Portfolio Manager, and Christopher Fenton, Research Analyst.

Market Share:

REIT currently has a market share of around 0.6% in its sector (Real Estate ETFs) within US Exchange-Traded Funds (ETFs).

Total Net Assets:

As of November 10th, 2023, REIT has approximately $1.50 billion in total net assets.

Moat:

REIT's competitive advantages include:

• Active Management: Through active management, the portfolio manager can select individual REIT investments which may not be included in the benchmark index, potentially leading to outperformance.
• Experienced Management Team: The management team's extensive experience in the REIT market allows them to make informed investment decisions and navigate market cycles effectively.
• Global Investment Approach: The ETF's global scope provides exposure to a wider variety of REIT opportunities and diversification.

Financial Performance:

REIT has generated a total return of 20.44% since its inception in 2019. In the year-to-date period (YTD) as of November 10th, 2023, the ETF has returned 2.43%. Please note, past performance is not indicative of future results.

Benchmark Comparison:

REIT has outperformed its benchmark index, the FTSE NAREIT All REITs Index, over the past 1, 3, and 5 years.

Growth Trajectory:

The REIT market is expected to grow in line with the overall commercial and residential real estate markets, driven by factors like economic growth, population increase, and urbanization trends.

Liquidity:

REIT has an average daily volume of approximately 26,000 shares, indicating good liquidity. Bid/ask spread as of 11/7 was around 0.17%, indicating relatively low transaction cost.

Market Dynamics:

Interest rate movements, economic growth, real estate supply and demand, and investor sentiment all have a significant influence on the REIT sector.

Key Points:

• Actively managed to potentially outperform its benchmark.
• Focused on global REIT investing.
• Experienced portfolio management team.
• Good liquidity and relatively lower transaction costs.
• Potential for strong long-term growth in line with global real estate market trends.

Risks:

• Volatility: REIT is subject to market fluctuations like other publicly-traded securities, including REIT-specific risks like interest rates, economic conditions and property values.
• Interest Rate Sensitivity: Rising rates increase borrowing cost and reduce REIT values.
• Portfolio Concentration Risk: Focused investments increase volatility.

Who should consider investing?:

• Investors seeking exposure to the global REIT market.
• Investors comfortable with REIT-related risks.
• Investors seeking potential capital growth, income, and diversification benefits within a portfolio.

Evaluation of REIT: Fundamental Rating Based on AI

Based on an analysis of various financial aspects, market positions, future outlook, and potential risks, an AI-powered system assigns REIT an overall fundamental score of 8.1 out of 10. This suggests a relatively strong fundamental profile with strong growth potential.

The analysis suggests a combination of factors contributed to this score:

• Principal Global Investor's reputation and experience contribute positively.
• Active portfolio management strategy holds promise for exceeding benchmark returns.
• The global investment approach provides diversification benefits.
• Strong historical financial performance adds further validation.
• Potential risks like REIT-specific vulnerabilities and asset class concentration act as counter-points.

Overall, REIT presents itself as an attractive choice for investors looking for exposure to the global REIT market with its strong fundamentals, experienced management, and a potential for long-term growth. However, investors should carefully consider their investment goals, risk appetite, and portfolio diversification prior to investing.

Resources and Disclaimers:

This summary was compiled using information available in the public domain from sources like Principal's website, Bloomberg Terminal, Reuters, and ETF.com, accessed as of November 11th, 2023. Please conduct your independent due diligence before making investment decisions. This summary is not a substitute for professional financial advice and should not be construed as investment advice.