Actively managed real estate ETF aims to
provide durable growth amid inflationary pressures with
concentrated exposure to non-traditional REIT sectors
Principal Global Investors® announced the Principal Real Estate
Active Opportunities ETF (Ticker: BYRE), the firm’s first
semi-transparent ETF, is available for trading upon today’s market
open of the New York Stock Exchange. It is a new, actively managed,
semi-transparent ETF that has a focused concentration on the
non-traditional property sectors of the publicly traded U.S. real
estate market. The objective of the fund seeks total return.
“The Principal Real Estate Active Opportunities ETF combines two
core strengths of Principal – active management and real estate
investing – to provide clients with an innovative strategy that
seeks to improve portfolio outcomes. The fund is thematic and one
of the first semi-transparent ETFs that gives investors exposure to
in-demand real estate sectors with the benefits of a liquid ETF
structure,” said Jill Brown, managing director of the U.S. Wealth
Platform, Principal Global Investors.
Due to its concentrated exposure to non-traditional property
sectors, the Principal Real Estate Active Opportunities ETF can
enhance core equity portfolios for investors as a satellite
allocation. This creates the potential for better portfolio
outcomes and higher total returns with improved diversification
generated by the resilient growth characteristics of many public
REITs in the non-traditional sectors.
Non-traditional real estate sectors, which include property
types like data centers, life sciences, single-family rental,
medical office, and self-storage, have been highly resilient the
past few years. Shifts in the economy and structural themes ranging
from demographics and infrastructure to globalization and
technological innovation are driving change and opportunity for
these non-traditional property types.
“Non-traditional sectors now represent 64% of the public REIT
market as they almost doubled their share of the market cap from
2010-2020. And compared to traditional real estate sectors,
non-traditional REITs have offered higher returns and higher growth
over the last 10 years1,” said Todd Kellenberger, client portfolio
manager for Principal Real Estate Investors. “This reinforces our
conviction that our semi-transparent ETF that is focused on these
niche property types can be a differentiated strategy for investors
seeking resilient growth and potential inflation protection.”
As a top 10 global manager of real estate assets2 and a top five
manager of public REITs3, Principal is well positioned to deliver
this new ETF in a growing part of the actively managed ETF market.
The strategy will be managed by the firm’s dedicated real estate
investment team using a bottom-up approach that will emphasize
owning publicly traded U.S. real estate companies in
non-traditional sectors that can benefit from structural
drivers.
Carefully consider a fund’s objectives, risks, charges, and
expenses. Contact your financial professional or visit
principalfunds.com for a prospectus, or summary prospectus if
available, containing this and other information. Please read it
carefully before investing.
Investing involves risk, including possible loss of
principal.
The Fund is new and there is no guarantee that the fund will
meet its objective.
Asset allocation and diversification do not ensure a profit or
protect against a loss.
This ETF is different from traditional ETFs.
Traditional ETFs tell the public what assets they hold each day.
This ETF will not. This may create additional risks for your
investment. For example: You may have to pay more money to trade
the ETF’s shares. This ETF will provide less information to
traders, who tend to charge more for trades when they have less
information. The price you pay to buy ETF shares on an exchange may
not match the value of the ETF’s portfolio. The same is true when
you sell shares. These price differences may be greater for this
ETF compared to other ETFs because it provides less information to
traders. These additional risks may be even greater in bad or
uncertain mark market conditions. The ETF will publish on its
website each day a “Tracking Basket” designed to help trading in
shares of the ETF. While the Tracking Basket includes some of the
ETF’s holdings, it is not the ETF’s actual portfolio. The
differences between this ETF and other ETFs may also have
advantages. By keeping certain information about the ETF secret,
this ETF may face less risk that other traders can predict or copy
its investment strategy. This may improve the ETF’s performance. If
other traders are able to copy or predict the ETF’s investment
strategy, however, this may hurt the ETF’s performance.
For additional information regarding the unique attributes and
risks of this ETF, see the additional risk discussion at the end of
this material and the Principal Risks section of the
prospectus.
Real estate investment options are subject to some risks
inherent in real estate and real estate investment trusts (REITs),
such as risks associated with general and local economic
conditions. Investing in REITs involves special risks, including
interest rate fluctuation, credit risks, and liquidity risks,
including interest conditions on real estate values and occupancy
rates.
The Fund is considered non-diversified, which means it can
invest a higher percentage of assets in securities of individual
issuers than a diversified fund. As a result, changes in the value
of a single investment could cause greater fluctuations in the
Fund’s share price than would occur in a more diversified fund.
Investing in ETFs involves risk, including possible loss of
principal. 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.
Principal Real Estate Investors is a dedicated real estate
investment management group within Principal Global Investors.
ALPS Distributors, Inc. is the distributor of the Principal
ETFs. ALPS Distributors, Inc. and the Principal Funds are not
affiliated.
_______________________________
1 Based on annualized 10-year trailing
returns as of March 31, 2022, using the FTSE All Equity REIT Index
as the benchmark
2 Managers ranked by total worldwide
assets (net of leverage), as of October 2021. “Largest Real Estate
Managers,” Pensions & Investments
3 Managers ranked by total U.S.
institutional assets (net of leverage), as of October 2021.
“Largest Real Estate Managers,” Pensions & Investments
About Principal Global Investors
Principal Global Investors® leads global asset management at
Principal®. As a multi-investment team firm, we bring a focused
perspective and offer expertise across a host of asset classes.
At our core, we are driven by our purpose to help investors and
businesses achieve their financial goals. Our global investment
professionals deliver investment solutions for public and private
pension funds, foundations and endowments, central banks, insurance
companies, sub-advisory arrangements, sovereign wealth funds and
individual portfolios.
Principal Global Investors manages approximately $579.4 billion
in assets on behalf of over 800 institutional clients located in
over 80 markets as well as retirement plans and individual clients,
reflecting our worldwide market reach and experience and our
commitment to high-quality research and service (as of March 31,
2022). To find out more, visit us at principalglobal.com.
About Principal Real Estate Investors
Principal Real Estate Investors manages or sub-advises $106.2
billion in commercial real estate assets (as of March 31, 2022).
The firm's real estate capabilities include both public and private
equity and debt investment alternatives. Principal Real Estate
Investors is the dedicated real estate group of Principal Global
Investors, a diversified asset management organization and a member
of the Principal Financial Group®.
© 2022 Principal Financial Services, Inc. Principal®, Principal
Financial Group®, and Principal and the logomark design are
registered trademarks of Principal Financial Services, Inc., a
Principal Financial Group company, in the United States and are
trademarks and services marks of Principal Financial Services,
Inc., in various countries around the world.
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version on businesswire.com: https://www.businesswire.com/news/home/20220519005600/en/
Phillip Nicolino, 515-362-0239,
nicolino.phillip@principal.com
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