Principal Spectrum Preferred Securities Active ETF (PREF)

Overview

The Principal Spectrum Preferred Securities Active ETF (ticker: FPRE) is an actively managed ETF that seeks to provide current income by investing primarily in preferred securities. It aims to provide a higher yield than traditional fixed income investments while managing risk through active selection and allocation.

Reputation and Reliability

Principal Funds is a well-established asset manager with a long history in the financial services industry. They are generally considered reputable and reliable.

Management Expertise

The management team has expertise in fixed income and preferred securities investing, leveraging their active approach to identify attractive opportunities and manage portfolio risk.

Goal

The ETF's primary investment goal is to provide current income.

Investment Approach and Strategy

Strategy: The ETF is actively managed and does not track a specific index. It seeks to outperform through security selection and sector allocation within the preferred securities market.

Composition The ETF holds a portfolio of preferred securities, which are a hybrid security with characteristics of both debt and equity.

Market Share: FPRE's market share in the preferred securities ETF sector is moderate, with several larger competitors.

Total Net Assets (AUM): 444600000

Key Competitors

• iShares Preferred and Income Securities ETF (PFF)
• Invesco Preferred ETF (PGX)
• Global X SuperIncome Preferred ETF (SPFF)

Competitive Landscape

The preferred securities ETF market is competitive, with several large, passively managed ETFs dominating market share. FPRE differentiates itself through active management, seeking to outperform its peers by actively selecting securities. Advantages include potentially higher returns and downside protection, while disadvantages involve higher expense ratios and the risk of underperformance relative to passive strategies.

Historical Performance: Historical performance data for FPRE (Principal Spectrum Preferred Securities Active ETF) is available from Principal Funds and various financial data providers. Returns vary annually depending on market conditions.

Benchmark Comparison: FPRE's benchmark is the ICE BofA Merrill Lynch Fixed Rate Preferred Securities Index. Performance should be compared against this index to assess the effectiveness of the active management strategy.

Expense Ratio: 0.53

Average Trading Volume

The average trading volume of FPRE is moderate, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread of FPRE is typically narrow, indicating relatively low trading costs.

Market Environment Factors

Economic indicators such as interest rates, inflation, and economic growth influence the performance of preferred securities. Sector-specific factors impacting financial institutions and other issuers of preferreds also play a role.

Growth Trajectory

FPRE's growth trajectory depends on the overall demand for preferred securities and the fund's ability to consistently outperform its benchmark. Changes in strategy and holdings may occur based on market conditions.

Competitive Edge

FPRE's primary competitive advantage lies in its active management strategy. The fund aims to outperform passive ETFs by leveraging the expertise of its management team to identify undervalued preferred securities and manage risk. This includes sector allocation and security selection. The fund can also adjust its portfolio based on changing market conditions, which may provide an advantage in certain environments.

Volatility

FPRE's volatility is influenced by the volatility of the underlying preferred securities market and is generally lower than equities but higher than investment-grade bonds.

Market Risk

The market risk associated with FPRE includes interest rate risk (rising rates can negatively impact preferred security prices), credit risk (the risk that issuers may default on their obligations), and liquidity risk (some preferred securities may be less liquid than others).

Ideal Investor Profile

The ideal investor for FPRE is someone seeking current income, willing to accept moderate risk, and comfortable with actively managed investments. It is suitable for investors who want diversification and a potential yield advantage over traditional fixed-income investments.

Market Risk

FPRE is suitable for long-term investors seeking income, as well as those who are comfortable with the potential for market fluctuations and actively managed strategies.

Principal Spectrum Preferred Securities Active ETF is an actively managed ETF that invests in preferred securities with the goal of providing current income. It differentiates itself through active management, aiming to outperform passive peers. The fund is suitable for investors seeking income and willing to accept moderate risk. It is important to consider the expense ratio and the potential for underperformance compared to passively managed ETFs.

Data Sources:

• Principal Funds Website
• ETF.com
• Morningstar
• Bloomberg

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 share data is estimated and may vary depending on the source.