Principal Global Investors plans to convert six passively managed exchange-traded funds to active management, filings with the Securities and Exchange Commission show.
The filings, dated Wednesday, involved the Principal Healthcare Innovators, Principal Millennials, Principal Quality, Principal U.S. Mega-Cap, Principal U.S. Small-Cap Multi-Factor and Principal Value ETFs.
"We consistently review our funds lineup to ensure our offerings align with investor demand and help our clients meet their investment objectives through innovative solutions," a Principal spokesman said in an email to Pensions & Investments Thursday.
"Pending board approval in May, Principal is converting six passively managed ETFs to actively managed to capitalize on our strength as an active investment manager and to improve portfolio implementation flexibility and operational efficiencies on behalf our clients," the spokesman said.
The funds are considered passively managed because each seeks performance results that correspond closely, prior to expenses, to those of its respective underlying index, according to one of the filings. In addition, each fund is subject to "a fundamental investment restriction" regarding industry concentration that is linked to its underlying index.
"At its December 2021 meeting, the fund's board approved a proposal for each such fund to become actively managed," the filing said. "As a result, the board also approved amending each fund's fundamental investment restriction relating to industry concentration and recommended that each fund's shareholders vote in favor of the change at a shareholder meeting to be held May 24."
Principal Global Investors had $590.6 billion in assets under management as of Dec. 31, the spokesman said.
