Principal Funds, begun trading two new strategic beta ETFs, the Principal Healthcare Innovators Index ETF (Nasdaq: BTEC) and the Principal Millennials Index ETF (Nasdaq: GENY) on Monday, August 22, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: BTEC | Exchange: NASDAQ |
| Name: Principal Healthcare Innovators Index ETF | Net Expense Ratio: 0.42% |
FUND OBJECTIVE:
The Principal Healthcare Innovators Index ETF seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq Healthcare Innovators Index.
The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a “full replication” strategy which involves investing in all the securities that make up the Index, in the same approximate proportions as the Index. The Fund can, however, use a “sampling” methodology to purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The Fund can also invest in securities not included in the Index that the Sub-Advisor believes will help the fund track the Index. Given the present composition of the Index, the Fund expects to have more than 25% of its assets invested in the healthcare industry.
REFERENCE INDEX:
The Nasdaq Healthcare Innovators Index is designed to provide exposure to equity securities (including growth and value stock) of small and medium capitalization U.S. healthcare companies. Most of the companies in the Index are “early-stage companies” within the healthcare equipment and supplies, pharmaceuticals, biotechnology, and life sciences industries. Examples of early-stage companies in these industries include companies developing products and services and companies in the pre-marketing stage seeking regulatory approvals.
The Index employs a modified market capitalization weighting methodology. At the rebalancing, the Index is rebalanced such that the maximum weight of any Index security does not exceed 3%. The excess weight of any capped security is distributed proportionally across the remaining Index securities.
The Index is evaluated semi-annually in April and October.
Fund Top Holdings (08/25/16):
| DEXCOM INC | 3.43% |
| BOSTON SCIENTIFIC CORP | 3.36% |
| VERTEX PHARMACEUTICALS INC | 3.25% |
| ALKERMES PLC | 3.11% |
| BIOMARIN PHARMACEUTICAL INC | 3.09% |
| INCYTE CORP | 3.05% |
| SEATTLE GENETICS INC | 2.94% |
| CR BARD INC | 2.83% |
| ALNYLAM PHARMACEUTICALS INC | 2.80% |
| OPKO HEALTH INC | 2.34% |
Useful Links:
BTEC Home Page
2.
FUND INFORMATION:
| Symbol: GENY | Exchange: NASDAQ |
| Name: Principal Millennials Index ETF | Net Expense Ratio: 0.45% |
FUND OBJECTIVE:
The Principal Millennials Index ETF seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq Global Millennial Opportunity Index.
The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a “full replication” strategy which involves investing in all the securities that make up the Index, in the same approximate proportions as the Index. The Fund can, however, use a “sampling” methodology to purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The Fund can also invest in securities not included in the Index that the Sub-Advisor believes will help the fund track the Index. The Fund will not concentrate (invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated.
REFERENCE INDEX:
The Nasdaq Global Millennial Opportunity Index is designed to provide exposure to global equity securities of companies that are impacted by the spending and lifestyle activities of the Millennial generation, which refers to people born from 1980 to the mid-2000s. The Index may include equity securities of different market capitalizations (small, medium, or large) and styles (growth or value) and is weighted based upon capitalization and exposure to Millennials, determined through a qualitative assessment of a company’s business strategy, target market, products manufactured and services provided. Market segments with the greatest Millennial exposure are likely to include, without limitation, consumer goods (including fashion and apparel), social media and e-commerce, and digital media and technology.
The Index is evaluated annually in April.
Top Holdings (08/25/16):
| NVIDIA CORP | 2.61% |
| TENCENT HOLDINGS LTD | 2.54% |
| ELECTRONIC ARTS INC | 2.49% |
| DISCOVER FINANCIAL SERVICES | 2.27% |
| NETEASE INC ADR | 2.21% |
| PRICELINE GROUP | 2.17% |
| FACEBOOK INC | 2.16% |
| ALPHABET INC | 2.07% |
| RELX PLC | 2.05% |
| HOME DEPOT INC | 2.02% |
Useful Links:
GENY Home Page
ETFtrack comment:
Here is a comment from Paul Kim, Managing Director of ETF Strategy for Principal Global Investors:
“More and more, people want to invest in strategies they understand, whether that is a cause they support or their own lifestyle. It is our goal to provide investment options that connect with people while offering enhanced performance.”