Principal Exchange-Traded Funds - Principal Spectrum Tax-Advantaged Dividend Active ETF (PQDI)

Overview

The Principal Spectrum Tax-Advantaged Dividend Active ETF (PQDI) is an actively managed ETF focusing on dividend-paying securities with potential for tax-advantaged income. It aims to provide current income and long-term capital appreciation by investing in a diversified portfolio of dividend-paying stocks across various market sectors.

Reputation and Reliability

Principal Funds is a well-established asset manager with a solid reputation for providing diverse investment solutions.

Management Expertise

Principal Funds has a team of experienced portfolio managers and analysts dedicated to active management and dividend-focused strategies.

Goal

To provide current income and long-term capital appreciation, emphasizing tax-advantaged dividend income.

Investment Approach and Strategy

Strategy: Actively managed, seeking to identify and invest in dividend-paying stocks with potential for capital appreciation and tax efficiency.

Composition Primarily invests in dividend-paying stocks, potentially including common stock and preferred stock. Diversification across sectors is a key element.

Market Share: Data not readily available.

Total Net Assets (AUM): 126756531

Key Competitors

• SCHD
• DVY
• VYM
• DGRO

Competitive Landscape

The dividend ETF market is highly competitive, dominated by large, passively managed funds like SCHD, DVY, and VYM. PQDI's active management and tax-advantaged approach differentiates it, but its smaller size and active management expense ratio pose challenges. Passive ETFs often have lower expense ratios and more predictable tracking, while active management aims for higher returns, but carries higher costs and potentially lower diversification.

Historical Performance: Historical performance data should be obtained from reliable financial data providers.

Benchmark Comparison: Performance should be compared to a relevant dividend-focused index such as the Dow Jones U.S. Select Dividend Index or the S&P 500 Dividend Aristocrats Index.

Expense Ratio: 0.38

Average Trading Volume

Average trading volume may fluctuate depending on market conditions and investor interest and it's not consistently high.

Bid-Ask Spread

Bid-ask spread may vary but it can impact the overall cost of trading.

Market Environment Factors

Interest rate movements, economic growth, and dividend policy changes affect the ETF's performance. Sector performance also plays a crucial role.

Growth Trajectory

Growth depends on the manager's ability to select dividend-paying stocks that outperform and on market conditions affecting dividend yields.

Competitive Edge

PQDI's competitive edge lies in its active management and focus on tax-advantaged dividend income. The active management allows for dynamic portfolio adjustments in response to market changes and identifying under-valued dividend stocks. The fund seeks to optimize after-tax returns for investors in higher tax brackets. However, the active approach also brings higher expenses compared to passive alternatives and that is a disadvantage.

Volatility

Historical volatility data should be assessed to understand the fund's price fluctuations.

Market Risk

Market risk includes general economic downturns, sector-specific risks, and changes in dividend yields, all of which could negatively impact the ETF's value.

Ideal Investor Profile

Ideal investors are those seeking current income, long-term capital appreciation, and who are in higher tax brackets looking for tax-advantaged investment strategies.

Market Risk

PQDI is suitable for long-term investors who understand the risks associated with active management and are seeking tax-advantaged income.

The Principal Spectrum Tax-Advantaged Dividend Active ETF (PQDI) aims to deliver both current income and long-term growth via dividend-paying stocks and employs an active strategy to achieve this investment objective. Differentiating itself with a focus on tax-advantaged returns, PQDI appeals to taxable investors seeking to mitigate taxes on dividends. The ETF's performance is dependent on the active management's stock selection and market conditions. However, PQDI faces competition from larger, passively managed dividend ETFs with lower expense ratios. This ETF may be beneficial for long-term investors in high tax brackets looking to optimize after-tax returns.

Data Sources:

• Principal Funds Website
• SEC Filings
• Morningstar
• etf.com

Disclaimers:

This analysis is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a financial advisor before making any investment decisions.