Market Overview

I think you’ll love what you hear,
what you’ll see and the opportunities
that will be set before you.
- Jon Najarian
GET TICKETS

Principal Joins with Nasdaq Dorsey Wright on Dynamic Factor ETF Model

Share:

Principal has partnered with smart beta index provider Nasdaq Dorsey
Wright to launch the all-ETF factor rotation model portfolio, which is
comprised entirely of Principal's US Equity Factor ETFs

Principal has partnered with Nasdaq Dorsey Wright for the first time to
launch the Principal NDW Factor Rotation model portfolio.

The dynamic factor portfolio, which is comprised entirely of Principal's
US Equity factor ETF lineup, aims to identify those factors that will
perform well over the coming months. This is the first guided ETF model
from NDW that utilizes both momentum and mean reversion, in an attempt
to capture short-term continuation signals while simultaneously avoiding
performance drag due to holding momentum names too long.

A total of six ETFs are considered for selection in the model portfolio,
representing a diversified inventory of some of the most powerful style
premia available to U.S. investors. This includes Principal's US Mega
Cap Multi-Factor (USMC), Sustainable Momentum (PMOM), Price Setters
(PSET), Contrarian Value (PVAL), US Small Cap Multi-Factor (PSC), and
Shareholder Yield (PY) ETFs. The model first went live on February 8.

"Factor investing will continue to grow in importance and adoption,"
said Paul Kim, head of ETF strategy at Principal Global Investors. "Our
suite of factor ETFs benefits from decades of active and factor
investing expertise, the rapidly growing body of academic research, and
the many advantages of a rules-based implementation in an ETF. We are
delighted that Nasdaq Dorsey Wright has developed a relative strength
methodology incorporating our factor ETFs to help investors achieve
their unique investment goals."

"Nasdaq Dorsey Wright's relative strength methodology gives investors
valuable tools to navigate the rapidly evolving world of active and
passive management," said Jay Gragnani, Head of Research and Client
Engagement with Nasdaq Dorsey Wright. "Our collaboration with Principal
allows us to pair a unique relative strength-based strategy with
Principal's line up to create a guided approach to factor investing."

There is no overlay model fee in addition to the underlying ETF fees,
which range from 12 to 38 basis points.* However, financial advisors can
only access the model portfolio through subscription to Nasdaq Dorsey
Wright's platform.

As part of the collaboration, Nasdaq Dorsey Wright is responsible for
all aspects of portfolio construction and ongoing management, including
fund selection and asset allocation decisions. Dorsey Wright selects
ETFs for use in the model portfolio based on its proprietary ‘relative
strength matrix' system and a new indicator for measuring momentum
sustainability.

Principal has more than $3.2 billion in ETF assets under management
globally as of 12/31/2018. As a whole, Principal had $626.8 billion in
assets under management at the end of December.

Since 1987, Dorsey Wright has been an advisor to financial professionals
on Wall Street and investment managers worldwide. Dorsey Wright offers
comprehensive investment research and analysis through their Global
Research Platform and provides research, modeling, and indexes which
apply Dorsey Wright's expertise in Point & Figure Relative Strength to
various financial products including exchange traded funds and notes,
mutual funds, UITs, structured products, and separately managed
accounts. In 2015, Dorsey Wright was acquired by Nasdaq, Inc. allowing
Dorsey Wright to work towards even greater innovative solutions for its
clients. As a single company, Nasdaq is one of the largest providers of
Smart Beta indexes with over $74 billion in assets tracking Nasdaq Smart
Beta indexes.

About Principal ®
Principal helps people
and companies around the world build, protect and advance their
financial well-being through retirement, insurance and asset management
solutions that fit their lives. Our employees are passionate about
helping clients of all income and portfolio sizes achieve their goals –
offering innovative ideas, investment expertise and real-life solutions
to make financial progress possible. Principal Global Investors®
leads global asset management at Principal®. As a
multi-boutique firm, we bring a focused perspective and offer expertise
across a host of asset classes. To find out more, visit us at
principal.com.

*Reflects net expenses. In some cases the investment advisor has
contractually agreed to limit the Fund's expenses by paying, if
necessary, expenses normally payable by the Fund. Principal ETFs and the
investment adviser may mutually agree to terminate the expense limits.
See the applicable prospectus for details.

Carefully consider the Funds' objectives, risks, charges, and
expenses. Contact your financial professional, visit principalfunds.com
or call Sales Support at 800-787-1621 for a prospectus, or summary
prospectus if available, containing this and other information. Please
read it carefully before investing.

Risks

Asset allocation and diversification do not ensure a profit or protect
against a loss. Investing involves risk, including possible loss of
principal.

Equity investments involve greater risk, including heightened
volatility, than fixed-income. Small and mid-cap stocks may have
additional risks including greater price volatility. Stocks that
previously exhibited high momentum characteristics may not experience
positive momentum or may experience more volatility than the market as a
whole.

ETFs are subject to risk similar to those of stocks, including those
regarding short-selling and margin account maintenance. Investor shares
are bought and sold at market price (not NAV) and are not individually
redeemed from the Fund. Ordinary brokerage commissions apply.

ALPS Distributors, Inc. is the distributor of the Principal ETFs.

ALPS Distributors, Inc. and Principal Funds are not affiliated.

Principal, Principal and symbol design and Principal Financial Group are
trademarks and service marks of Principal Financial Services, Inc, a
member of the Principal Financial Group.

02/2019 | 741674 | PRI000600-022020

View Comments and Join the Discussion!