Principal U.S. Small-Cap Multi-Factor ETF (PSC)

Overview

The Principal U.S. Small-Cap Multi-Factor ETF (PSC) seeks to provide investment results that closely correspond, before fees and expenses, to the Nasdaq US Small Cap Select Leaders Index. The fund invests in a broad range of U.S. small-cap stocks, employing a multi-factor approach to identify companies with attractive value, quality, momentum, and volatility characteristics. It aims to outperform the broader small-cap market by tilting towards these factors.

Reputation and Reliability

Principal Funds is a well-established asset manager with a solid track record in providing investment solutions. They are known for their disciplined approach and commitment to delivering value to investors.

Management Expertise

Principal Funds has a team of experienced portfolio managers and analysts dedicated to factor-based investing. They have a deep understanding of quantitative strategies and risk management.

Goal

The investment seeks to provide investment results that closely correspond, before fees and expenses, to the Nasdaq US Small Cap Select Leaders Index.

Investment Approach and Strategy

Strategy: The ETF aims to track the Nasdaq US Small Cap Select Leaders Index, which is designed to select securities from the Nasdaq US Small Cap Index based on a multi-factor model.

Composition The ETF primarily holds stocks of U.S. small-cap companies. The index methodology emphasizes stocks with attractive value, quality, momentum, and low volatility characteristics.

Market Share: PSC's market share is small relative to major small-cap ETFs.

Total Net Assets (AUM): 149800000

Key Competitors

• iShares Core S&P Small-Cap ETF (IJR)
• Vanguard Small-Cap ETF (VB)
• Schwab U.S. Small-Cap ETF (SCHA)

Competitive Landscape

The small-cap ETF market is highly competitive, dominated by a few large players. PSC differentiates itself through its multi-factor approach, aiming to provide potentially higher risk-adjusted returns. However, its smaller size and lower trading volume may be disadvantages compared to larger, more liquid competitors. The fund aims to stand out among its competitors by employing a multi-factor investment strategy, focusing on value, quality, momentum, and low volatility factors within the small-cap universe.

Historical Performance: Historical performance data is not provided in this prompt but is available via online financial data providers.

Benchmark Comparison: Benchmark comparison is not provided in this prompt but is available via online financial data providers.

Expense Ratio: 0.33

Average Trading Volume

The average trading volume for PSC is moderate, which can impact execution costs.

Bid-Ask Spread

The bid-ask spread for PSC varies depending on market conditions and trading volume, and could add to trading costs.

Market Environment Factors

Economic growth, interest rates, and investor sentiment towards small-cap stocks can all influence the performance of PSC. Sector-specific trends and regulatory changes can also play a role.

Growth Trajectory

PSC's growth trajectory depends on its ability to attract assets and generate competitive returns. Changes to the fund's investment strategy or holdings would be disclosed in regulatory filings.

Competitive Edge

PSC's competitive edge lies in its multi-factor approach, aiming to identify undervalued small-cap stocks with strong fundamentals, positive momentum, and lower volatility. The ETF's focus on multiple factors may potentially provide more stable and risk-adjusted returns compared to single-factor strategies. Its exposure to factors like value and quality could help it weather market downturns better than growth-oriented small-cap ETFs. The fund's methodology targets a more refined selection of small-cap stocks.

Volatility

PSC's volatility is expected to be similar to that of other small-cap ETFs, reflecting the inherent risk of investing in smaller companies. It is expected to be lower than that of a growth fund due to its factor selection criteria.

Market Risk

PSC is subject to market risk, meaning that its value can fluctuate based on overall market conditions and investor sentiment. Small-cap stocks are generally more volatile than large-cap stocks, and may be more sensitive to economic downturns.

Ideal Investor Profile

The ideal investor for PSC is one who seeks exposure to U.S. small-cap stocks with a focus on factor-based investing, particularly value, quality, momentum, and low volatility. This is suitable for an investor who is looking to outperform the broader small-cap market.

Market Risk

PSC is best suited for long-term investors who are comfortable with the risks associated with small-cap investing and are looking for a potentially higher return profile through factor diversification.

Principal U.S. Small-Cap Multi-Factor ETF (PSC) offers exposure to U.S. small-cap stocks selected based on value, quality, momentum, and low volatility factors. It aims to outperform the broader small-cap market but carries risks associated with small-cap investing. Its multi-factor approach seeks to enhance risk-adjusted returns. The fund is suitable for long-term investors seeking factor diversification within their small-cap allocation, although its smaller AUM may affect liquidity.

Data Sources:

• Principal Funds Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investment decisions should be based on your own research and risk tolerance. Market share data is estimated and may not be exact. Performance data is historical and not indicative of future results.