Active Corporate Bond ETF Debuts

Yesterday, Principal Financial Group launched an actively managed bond ETF targeting the investment-grade space. The Principal Investment Grade Corporate Active ETF (IG) is the second fixed-income fund from the issuer.

IG has an expense ratio of 0.26% and lists on the NYSE Arca.

It is not strictly corporate, despite its name, and can invest in foreign and domestic government debt, according to its prospectus. However, the document appears to indicate corporate debt will be the ETF’s primary focus.

The fund has no targeted maturity, but does target a duration within 10% of the Bloomberg Barclays U.S. Corporate Investment Grade Bond Index, which as of the end March was 7.5 years. The fund can also invest in derivatives and other ETFs to execute its strategy.

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is not actively managed but seems like it may be the most comparable fund. It comes with an expense ratio of 0.15% and has almost $33 billion in assets under management. LQD also has a duration of 8.2 years.

IG is Principal’s thirteenth ETF.

Contact Heather Bell at [email protected]