Today, Principal added another fund to its lineup of “Adaptive Multi-Factor” ETFs. The Principal International Adaptive Multi-Factor ETF (PXUS) joins two other ETFs with similar methodologies that cover U.S. stocks.
The new fund comes with an expense ratio of 0.24% and lists on Cboe Global Markets.
PXUS selects its components from the MSCI World ex USA Index. Its underlying model targets the value, quality, momentum and low volatility factors, adjusting exposures to the different factors based on the current market regime and its associated level of risk. The risk level of the market is evaluated on a weekly basis, the prospectus says.
When the market is determined to be in a higher-risk environment, with risk expected to decrease, the portfolio will largely coincide with the parent index’s allocations. When the market is determined to be in a lower risk phase, the portfolio shifts toward the value, quality and momentum stocks, while tilting away from low volatility. And when the market is in a high-risk phase, with risk expected to increase, the portfolio shifts toward stocks that exhibit strong exposure to the low volatility, quality and momentum factors, and away from value stocks, according to the prospectus.
The document notes that the portfolio will rebalance twice a year when the risk regime is largely static, but will do so more frequently if the risk regime shifts.
Last week, the issuer rolled out the Principal U.S. Large-Cap Adaptive Multi-Factor ETF (PLRG) and the Principal U.S. Small-Cap Adaptive Multi-Factor ETF (PLTL).
Contact Heather Bell at [email protected]