A New ETF Is An Active Idea For Income

Principal Financial Group Inc PFG expanded its lineup of exchange-traded funds Wednesday with the debut of the Principal Active Global Dividend Income ETF GDVD.

The actively managed Principal Active Global Dividend Income ETF is the seventh ETF in Principal's lineup.

What Makes GDVD Unique

GDVD “seeks current income and long-term growth of income and capital. The fund is an actively managed ETF that seeks to achieve its investment objective by investing, under normal circumstances, at least 80 percent of its net assets, plus any borrowings for investment purposes, in dividend-paying equity securities at the time of purchase,” according to Principal.

None of the new ETF's holdings command weights of more than 2.85 percent. Top 10 holdings in the new ETF include Microsoft Corporation MSFT, Apple Inc. AAPL and Pfizer Inc. PFE, all of which are members of the Dow Jones Industrial Average. GDVD holds 59 stocks.

Methodology And Strategy

GDVD's management team utilizes “quantitative screens and research on an industry and company level to identify and monitor companies it believes have the commitment and capacity to pay dividends, according to the prospectus sheet,” according to ETF Trends. “The quantitative screening process has been available at Principal in a separately managed account option and as a component within its broader strategies.”

GDVD charges 0.58 percent per year, or $58 on a $10,000 investment. The new Principal ETF represents another coup for the Bats ETF Marketplace.

“Year-to-date, Bats has welcomed 36 ETFs to its U.S. market. In the first quarter of 2017, Bats welcomed a total of 23 ETFs from eight issuers to the Bats ETF Marketplace, and year to date, has won 39 percent of all new U.S. ETF listings. There are now 171 ETFs listed on Bats ETF Marketplace, from 33 different issuers,” according to the exchange operator.