Portfolio

Principal Lists First Semi-Transparent ETF On NYSE

Actively managed real estate ETF aims to provide durable growth amid inflationary pressures with concentrated exposure to non-traditional REIT sectors

DES MOINES, Iowa–(BUSINESS WIRE)–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.

A Differentiated Strategy

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 years[1],” 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 assets[2] and a top five manager of public REITs[3], 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.

 

 

 

[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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