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

Overview

The Principal Real Estate Active Opportunities ETF (BYRE) is an actively managed fund that seeks to provide total return by investing primarily in real estate securities, including real estate investment trusts (REITs) and other real estate-related companies. It aims to capitalize on opportunities across various real estate sectors and geographies.

Reputation and Reliability

Principal Funds is a well-established asset manager with a long history in the investment industry, known for providing diverse investment solutions.

Management Expertise

The management team has extensive experience in real estate investing, combining fundamental research with active portfolio management strategies.

Goal

To achieve total return by actively investing in real estate securities.

Investment Approach and Strategy

Strategy: The fund is actively managed, not tracking a specific index. It utilizes a fundamental, bottom-up approach to identify undervalued real estate securities with growth potential.

Composition The ETF primarily holds stocks of REITs and other real estate-related companies across various property types and geographic locations.

Market Share: BYRE's market share within the real estate ETF sector is relatively small compared to larger passive REIT ETFs.

Total Net Assets (AUM): 21480000

Key Competitors

• VNQ
• IYR
• REM

Competitive Landscape

The real estate ETF market is dominated by passively managed, broad-based REIT ETFs like VNQ and IYR. BYRE differentiates itself through active management, aiming to outperform passive benchmarks. A disadvantage is its higher expense ratio relative to passive competitors. Its active strategy offers the potential for higher returns but also carries increased risk.

Historical Performance: Historical performance data is needed to provide performance numbers; however, the fund's returns will fluctuate based on the manager's investment selections and the performance of the real estate market.

Benchmark Comparison: The ETF's performance should be compared to a relevant real estate benchmark index, such as the MSCI US REIT Index, to assess its active management effectiveness.

Expense Ratio: 0.79

Average Trading Volume

The ETF's average trading volume is low, indicating relatively lower liquidity compared to larger, more established ETFs.

Bid-Ask Spread

The bid-ask spread can fluctuate, potentially increasing the cost of trading for larger orders.

Market Environment Factors

Economic growth, interest rate changes, inflation, and demographic trends influence BYRE's performance. The real estate sector is also impacted by regulatory changes and shifts in property demand.

Growth Trajectory

BYRE's growth depends on its ability to deliver consistent outperformance through active management. Changes in its investment strategy and holdings will reflect the manager's evolving market outlook.

Competitive Edge

BYRE's competitive edge lies in its active management approach, offering the potential to outperform passive REIT ETFs by capitalizing on market inefficiencies and specific real estate opportunities. The fund's experienced management team seeks to identify undervalued assets and proactively adjust the portfolio based on market conditions. This active strategy differentiates it from passive competitors, although it also carries the risk of underperformance.

Volatility

BYRE's volatility may be higher than broad-based REIT ETFs due to its active management and concentrated holdings. Specific property types held by the fund can also increase volatility.

Market Risk

BYRE is subject to market risk, including fluctuations in real estate values, interest rate risk, and economic downturns. Changes in tenant occupancy rates and rental income can also affect the fund's performance.

Ideal Investor Profile

The ideal investor for BYRE is someone seeking active management in the real estate sector and willing to accept potentially higher risk in exchange for the possibility of outperforming passive benchmarks.

Market Risk

BYRE may be suitable for long-term investors who have a higher risk tolerance and believe in the potential benefits of active management in real estate. It is less suitable for passive index followers seeking broad market exposure at a low cost.

Principal Real Estate Active Opportunities ETF (BYRE) is an actively managed fund focused on real estate securities, seeking to generate total return. BYRE differentiates itself by actively selecting investments, aiming to outperform passive REIT ETFs. However, this active approach comes with a higher expense ratio and increased risk. Its performance is influenced by economic conditions, interest rates, and the management team's investment decisions. BYRE is most suitable for investors who believe in active management's ability to generate superior returns in the real estate sector and are comfortable with a higher level of risk.

Data Sources:

• Principal Funds Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Market conditions can change, and investment decisions should be based on individual circumstances and risk tolerance.