Principal Launches Nontransparent Real Estate ETF

The firm is the latest to use a proxy basket rather than publish fund holdings.

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Reviewed by: Dan Mika
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Edited by: Dan Mika

Principal Financial Group Inc.’s newest ETF is a nontransparent, actively managed real estate fund. 

The Principal Real Estate Active Opportunities ETF (BYRE) debuted on the NYSE Arca on Thursday, charging an expense ratio of 0.65%. 

BYRE targets REITs and other real estate-related stocks, focusing on real estate themes it deems to be on the rise due to societal shifts. It specifically lists data centers, wireless towers and single-family rental homes as some of its preferred areas of investment. 

The fund is semitransparent, publishing a tracking basket of some of its securities and nonaffiliated ETFs meant to convey how the fund is performing each day. It will also publicize how much its tracking basket matches its actual holdings. 

The SEC approved the listing last Friday, a requirement for any fund that uses the so-called Active Proxy Portfolio Shares structure to debut as nontransparent or semitransparent on the NYSE. Nuveen and T. Rowe Price have previously issued ETFs under the same nontransparent rule. 

Regulators last week also approved New York Life Investments Co. to use the nontransparent model for the IQ Winslow Focused Large Cap Growth ETF (IWFG) and the IQ Winslow Large Cap Growth ETF (IWLG). Neither of those funds has been set for debut. 

 

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Dan Mika is a reporter for etf.com. He has previously covered business for the Ames Tribune and Cedar Rapids Gazette in Iowa, and BizWest Media in Fort Collins, Colorado. Dan holds a bachelor's degree in journalism from Truman State University.