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Principal Financial (PFG) Introduces Three Multi-Factor ETFs

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Principal Financial Group, Inc. (PFG - Free Report) has unveiled three multi-factor ETFs to address the increasing client demand for adaptive risk ETFs.

The newly launched ETFs are Principal U.S. Large-Cap Adaptive Multi-Factor ETF, Principal U.S. Small-Cap Adaptive Multi-Factor ETF and Principal International Adaptive Multi-Factor ETF.

The funds are actively traded portfolio securities and are non-diversified. They adapt portfolio construction to equity market risk, combine factors when they are likely to outperform the market and use market-cap exposure where required. Based on the equity market signals, these funds adjust the risk exposure.

The actively managed ETFs access leading global asset management platforms and specialized investment groups to provide diversified and outcome-oriented solutions.

In May 2021, Principal Financial introduced an offering of model portfolios in partnership with Wilshire. The new Principal Adaptive Multi-Factor ETFs are an addition to its model portfolio offering.

In 2020, Principal Financial’s unit Principal Global Investors unveiled the Principal Spectrum Tax-Advantaged Dividend Active ETF (PQDI) to enable investors to get access to qualified dividend income.

Also, in 2017, Principal Financial launched the Principal Spectrum Preferred Securities Active ETF (PREF) on Bats Exchange, which is managed by Spectrum Asset Management, an investment team within Principal Financial. The investment seeks to provide current income.

The Principal Global Investors segment manages assets for sophisticated investors globally with diverse investment capabilities, which include equity, fixed income, real estate and other alternative investments. It offers mutual funds and ETFs to individuals, businesses and institutional investors for use within variable life contracts, variable annuity contracts and employer-sponsored pension plans, and other general investment purposes.

The products and services are provided for a fee. Therefore, the new multi-factor ETFs will drive the management fee revenues, which, in turn, fuel top-line growth of the company.

As of Dec 31, 2020, as reported by Morningstar, Principal Financial ranked 19th in terms of U.S. mutual fund asset under management (AUM) and 30th in terms of exchange traded fund AUM. In the first quarter of 2021, investment performance remained strong, as 57% of Principal Mutual Funds, ETFs, separate accounts, and collective investment trust were above the median for the one-year period.

Shares of this Zacks Rank #3 (Hold) financial services provider have gained 53.9% in a year compared with its industry’s growth of 49.3%. Moreover, we believe that the company’s strong fundamentals will likely drive its shares, going forward.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Stocks to Consider

Some better-ranked stocks in the finance space are KKR & Co. Inc. (KKR - Free Report) , OchZiff Capital Management Group LLC (SCU - Free Report) and Ameriprise Financial, Inc. (AMP - Free Report) . While KKR and OchZiff Capital currently sport a Zacks Rank # 1 (Strong Buy), Ameriprise carries a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KKR surpassed estimates in each of the last four quarters, the average earnings surprise being 17.2%.

OchZiff Capital surpassed estimates in each of the last four quarters, the average earnings surprise being 199.37%.

Ameriprise surpassed estimates in three of the last four quarters and missed in the other one, the average earnings surprise being 3.88%.

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