Principal Capital Appreciation Select ETF (LCAP)

Overview

The Principal Capital Appreciation Select ETF is an actively managed equity ETF that seeks to achieve long-term capital appreciation. It focuses on investing in a diversified portfolio of U.S. equity securities, with a particular emphasis on companies believed to have strong growth potential. The investment strategy is not tied to a specific index and aims to outperform its benchmark through active security selection and tactical asset allocation.

Reputation and Reliability

Principal Financial Group is a well-established and reputable financial services company with a long history in asset management and a strong track record in providing investment solutions.

Management Expertise

The ETF is managed by a team of experienced investment professionals at Principal Asset Management, leveraging their deep market knowledge and research capabilities to identify promising investment opportunities.

Goal

The primary investment goal of the Principal Capital Appreciation Select ETF is to achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF is actively managed and does not aim to track a specific index. Instead, it employs a growth-oriented investment strategy, seeking out companies with the potential for significant future earnings growth.

Composition The ETF primarily holds U.S. equity securities, including common stocks of companies across various market capitalizations and sectors. The specific holdings are determined by the portfolio managers' analysis of individual company fundamentals and market trends.

Market Share: Data on the specific market share of the Principal Capital Appreciation Select ETF within its broad equity category is not readily available or may fluctuate significantly due to its active management and specific focus.

Total Net Assets (AUM): As of recent data, the Total Net Assets (AUM) for the Principal Capital Appreciation Select ETF are approximately $284 million. (Note: AUM can vary daily.)

Key Competitors

• Vanguard Growth ETF (VUG)
• iShares Russell 1000 Growth ETF (IWF)
• Schwab U.S. Large-Cap Growth ETF (SCHG)

Competitive Landscape

The actively managed growth ETF space is highly competitive, dominated by large index-tracking ETFs and other active managers with significant AUM. Principal Capital Appreciation Select ETF's advantages lie in its active management approach, which allows for flexibility in security selection and the potential to identify undervalued growth opportunities. However, it faces disadvantages in terms of potentially higher expense ratios compared to passive ETFs and the challenge of consistently outperforming the market and its larger, more liquid competitors.

Historical Performance: Historical performance data for the Principal Capital Appreciation Select ETF shows varied results across different time periods. For example, as of late 2023/early 2024, its 1-year, 3-year, and 5-year annualized returns have been competitive, though subject to market fluctuations. Specific percentage returns for these periods are best obtained from real-time financial data providers.

Benchmark Comparison: The ETF's performance is typically benchmarked against a broad U.S. equity index, such as the Russell 1000 Growth Index or the S&P 500 Growth Index. Its ability to outperform this benchmark is a key indicator of its active management's effectiveness.

Expense Ratio: The expense ratio for the Principal Capital Appreciation Select ETF is 0.85%. This includes management fees and other operating expenses.

Average Trading Volume

The ETF's average trading volume is generally moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is typically narrow to moderate, reflecting the ETF's trading activity and the underlying market liquidity of its holdings.

Market Environment Factors

The ETF is influenced by factors such as interest rate movements, inflation data, technological innovation, consumer spending trends, and overall economic growth prospects. Sector-specific growth in areas like technology, healthcare, and consumer discretionary can significantly impact its performance.

Growth Trajectory

The growth trajectory of the Principal Capital Appreciation Select ETF is dependent on its active management's ability to identify and capitalize on emerging growth trends. Any changes in strategy or significant shifts in holdings are typically driven by evolving market conditions and the portfolio managers' outlook on specific industries and companies.

Competitive Edge

The ETF's competitive edge stems from its active management strategy, allowing for targeted selection of growth stocks that might be overlooked by index funds. The dedicated team at Principal Asset Management aims to leverage their in-depth research and conviction-based approach to identify companies with sustainable competitive advantages and strong future earnings potential. This focus on dynamic allocation and individual company analysis offers the possibility of alpha generation.

Volatility

The Principal Capital Appreciation Select ETF exhibits historical volatility typical of actively managed equity growth funds. Its volatility is generally higher than broad market index funds due to its concentration in growth-oriented companies, which can be more sensitive to market sentiment and economic shifts.

Market Risk

The ETF is subject to market risk, including the risk that the stock market as a whole declines. Specific risks also include the concentration risk in growth stocks, which may underperform value stocks or the broader market during certain economic cycles. Individual stock selection risk is also present, as the performance is heavily reliant on the success of the selected companies.

Ideal Investor Profile

The ideal investor for the Principal Capital Appreciation Select ETF is one seeking long-term capital growth, who understands and accepts the higher risk associated with equity growth investing, and who believes in the value of active management.

Market Risk

This ETF is generally best suited for long-term investors who have a growth-oriented investment objective and a moderate to aggressive risk tolerance. It is less suitable for short-term traders or investors seeking absolute low-risk investments.

The Principal Capital Appreciation Select ETF is an actively managed fund aiming for long-term capital growth by investing in U.S. equities with strong growth potential. Managed by experienced professionals at Principal Asset Management, it offers a distinct strategy from passive index funds. While facing competition from larger ETFs, its active approach allows for flexibility. Investors should be aware of its higher expense ratio and inherent growth stock volatility. It is best suited for long-term investors with a growth-oriented objective and a higher risk tolerance.

Data Sources:

• Principal Financial Group official website
• Financial data aggregators (e.g., Morningstar, Yahoo Finance, Bloomberg)
• ETF issuer filings and prospectuses

Disclaimers:

This information is for informational purposes only and should not be considered investment advice. ETF data, including AUM, performance, and expense ratios, can change frequently. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions. Market share data is an approximation and may vary based on the methodology used.