Principal expanded on its line of multi-factor, smart beta ETFs with a new international option.
Principal recently launched the Principal International Multi-Factor Index ETF (NasdaqGM: PXUS), which has a 0.39% expense ratio.
The International Multi-Factor Index ETF tries to reflect the performance of the Nasdaq Developed Select Leaders Index, which identifies equity securities of companies in the Nasdaq Developed Market Ex-US Ex-Korea Large Mid Cap Index that exhibit a combination of value, growth and momentum characteristics, with higher weights given to securities that are more liquid and less volatile, according to a prospectus sheet.
PXUS may provide “exposure to international markets – investors in the U.S. may have a home country bias and be under-allocated to international equities,” and “investment in lesser known companies which may have greater potential to outperform over time due to familiarity bias,” according to Principal.
The Shareholder Yield or value factor ranks securities based on the financial impact on a company’s shareholders from the return of free cash flow through cash dividends, stock repurchases, and debt reduction in an attempt to identify those with low prices relative to their fundamental value.
Related: Plans Revealed for a Blockchain ETF
The ETF may “provide consistent exposure to companies offering stable earnings growth at a reasonable valuation that is being recognized by the market,” according to Principal.
The Price Setters or growth factor ranks securities based on pricing power or the extent to which a company can raise the prices of its products without reducing the demand.
Lastly, the Momentum Factor ranks securities based on recent performance relative to peers. Sustainable momentum helps provide consistent share price appreciation in the medium-term, responsiveness to momentum reversals and reduced drawdown risks.
For more information on new fund products, visit our new ETFs category.