Principal Spectrum Pref Secs Actv ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy benefits from its experienced portfolio management team. This is a positive driver for the strategy's Average People Pillar rating. The strategy merits an Average Process Pillar rating.  The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Principal Spectrum Pref Secs Actv ETF earns an Average Process Pillar rating.    The leading factor in the rating is the experience of the management team, which averages 21 years at this fund. The depth of the portfolio management team also strengthens the process. With six portfolio managers, the fund is well-staffed. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 52%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Preferred Stock Morningstar Category, this fund has been consistently sensitive to interest-rate changes over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the category average, the managers have been overweight A rated bonds in recent years. In the latest month, the strategy has relatively overweighted A rated bonds compared with its peers as well. Additionally, there's been a bias towards debt with 20- to 30-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 20- to 30-year maturities in the most recent month. Finally, during the past few years, the fund leaned towards corporate debt. In this month, the strategy also leaned more towards corporate debt compared with its peers.

 This strategy's 12-month yield is 4.6%, lower than its average peers' 5.9%. It also has a 4.8% 30-day SEC yield (a measure similar to yield-to-maturity). A lower yield tends to indicate lower credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been lower than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BB.

Average

Process

Principal Spectrum Pref Secs Actv ETF earns an Average People Pillar rating. The main contributor to the rating is the stability of the management team. Specifically, the fund has not seen a manager change in the last four years. The rating is limited by the parent firm's five-year retention rate of 76%, which suggests it could do more to hold onto its portfolio managers.


The team is backed by L. Phillip Jacoby, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.6 stars, demonstrating encouraging risk-adjusted performance. The team is composed of a solid supporting cast of five additional named managers, averaging 21 years of listed portfolio management experience.

People

Principal Asset Management follows client demand around the world and across asset classes. While the firm’s sensitivity to market trend can help better serve clients, its sprawling efforts have also led to mixed results. Its Parent rating remains Average.

The firm relies on multiple investment boutiques and teams to drive investment results, some of which have established solid records. Aligned Investors and Edge Asset Management run strategies that Morningstar analysts regard highly, and the real estate team also enjoys high ratings. While benefiting from Principal’s sales and operational support, these small teams invest and develop new strategies independently. On the other hand, Principal’s core fixed income and equity teams are less inspiring, and many of the actively managed exchange-traded funds launched recently by these teams have already been liquidated.

Principal continues to take steps to keep up with the competition, though execution risk exists amid all these efforts. It reorganized its data science team after a leadership departure with the goal of it work more closely with the firm’s investment teams. Principal has also been proactive in adding personnel and operational resources in its drive to build up its multi-asset solution and its liability-driven investing capabilities, and the firm continues to leverage its global presence to enter emerging markets.

Parent

Principal Spectrum Preferred Secs Active ETF

PREF is an actively managed fund with a primary focus on $1,000 par preferred securities.

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We take a look at the action in preferreds and baby bonds through the second week of April and highlight some of the key themes we are watching.

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We take a look at the action in preferreds and baby bonds through the fourth week of March and highlight some of the key themes we are watching. Preferreds had a good week as Treasury yields fell on the back of the Fed's more dovish than expected stance. We take a look at how stocks with different spreads over SOFR could react to Fed's cuts.

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We take a look at the action in preferreds and baby bonds through the third week of March and highlight some of the key themes we are watching. Preferreds were down for the week due to rising Treasury yields, but most preferred CEF sectors remain positive for the month. Albemarle issued a new preferred stock with a mandatory convertible feature, offering upside participation with less downside than the common and a higher coupon.

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We take a look at the action in preferreds and baby bonds through the fourth week of February and highlight some of the key themes we are watching. Preferreds had a strong week with a 1%+ return, driven by a drop in Treasury yields and compression in credit spreads. Different preferreds sectors have different drawdown profiles, offering investors an opportunity to tilt to more resilient securities in anticipation of the next drawdown.

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We take a look at the action in preferreds and baby bonds through the second week of February and highlight some of the key themes we are watching. Preferreds were flat on the week as higher Treasury yields were offset by tighter credit spreads. A high yield-to-call is not a sufficient reason to buy a given preferred.

Preferreds Weekly Review: A High Yield-To-Call Is Not Enough

We take a look at the action in preferreds and baby bonds through the fourth week of January and highlight some of the key themes we are watching. Preferred stock and baby bond market had a good week with most sectors finishing in the green. The article discusses the curious case of Aspen insurer preferred AHL.PR.C and how the coupon conversion worked on the first call date.

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The best preferred stock ETFs allow you to reduce your risk by investing in baskets of preferred stocks.

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Investors who are seeking yield generation opportunities should consider the benefits of incorporating preferred securities and related exchange traded funds into a traditional income portfolio.

An Attractive ETF Strategy for Income Investors in Today's Market

With the fixed income market environment still choppy, investors are looking for ways to diversify their yield-generation capabilities. Alternative income strategies, such as preferred stocks, offer consistent income and can help manage risk.

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The major equity indices had their worst week since early January - mostly on inflation concerns and a hawkish FOMC that signaled an increase in rates may come sooner than expected. On Friday, stocks took another leg lower after St. Louis Fed President James Bullard said that he expects the Fed's first rate hike in late 2022.

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Interest rates are likely to remain low in 2021, meaning investors need to be selective with income-generating asset classes. The Principal Spectrum Preferred Securities Active ETF (NYSEArca: PREF) is a great starting point.

Why to Go Active in the Preferred Stock ETF Space

As markets continue to process results of the 2020 election and its potential impact on regulation and policy, one thing is certain: the zero rate environment isn't likely to go away anytime soon. As yield-starved investors face dwindling opportunities in bonds, financial professionals need to find more attractive income-generating opportunities with acceptable levels of risk.

New Year, New Markets: The Case for Preferred Securities

Bond yields are still low, meaning traditional income-generating assets just aren't cutting it for many investors. Enter preferred stocks and the actively managed Principal Spectrum Preferred Securities Active ETF (NYSEArca: PREF).

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ETF Trends CEO Tom Lydon spoke with Ed Nini, Global Head of Product Strategy for Principal Global Investors, about the tumultuous year that has been 2020 and what kinds of strategies have been put into place with various advisors to account for it. Specifically, Lydon wanted to hear from Nini about the trends in portfolio [.

Principal on Trends in Portfolio Construction Amid 2020 Volatility

On Monday, popular brokerage app Robinhood, which has risen to notoriety among younger, tech-savvy investors this year, said it will no longer offer some favored income-generating asset classes starting next month. “Robinhood said that after Jan. 11, 2021, customers can no longer buy closed-end funds, limited partnerships, master limited partnerships (MLPs), royalty trusts, tracking stocks, [.

No Preferred Stocks on Robinhood? No Problem With PREF

With a new year right around the corner, advisors and investors should continue to prepare for an extended low-yield environment. One way of combating low returns is with the Principal Spectrum Preferred Securities Active ETF (NYSEArca: PREF).

I'd Prefer That: A Preferred Stock ETF to Fight Low Yield

Advisors and investors are running low on credible income-generating assets in the current environment, a scenario making the Principal Spectrum Preferred Securities Active ETF (CBOE: PREF) a standout among exchange traded funds. Rates are certainly faltering this year, but that also means yields on preferreds are declining.

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Fixed-income investors should consider how preferred securities and related exchange traded funds may help benefit their portfolios. “The questions on investors' minds is, ‘How do I find income but not take on too much risk?

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The income problem. Every financial professional is facing the same dilemma: how do you generate meaningful income for your clients without having to take unacceptable risks, or investing in new, unproven strategies?

Solving for Income: A Preferred Solution

Preferred stocks are known as a high-yield asset class, but amid a post-election rally in various asset classes, those yields are declining. That could augur well for the active management offered by the Principal Spectrum Preferred Securities Active ETF (CBOE: PREF).

Prefer a Diversified Portfolio? Check Out the PREF ETF

Vote counting is still happening in some marquee swing states, providing investors with an opportune time to dial back risk and bolster income streams with assets such as the Principal Spectrum Preferred Securities Active ETF (CBOE: PREF). As a high-yield asset class, preferreds historically perform well as interest rates decline.

Still Plenty of Reasons to Prefer Preferred Stock ETFs

Some income-generating asset classes can be fertile ground for active managers, including preferred stocks. Enter the Principal Spectrum Preferred Securities Active ETF (CBOE: PREF).

News for Principal Spectrum Preferred Secs Active ETF ETF (PREF)