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Principal launches new ETFs and hires model portfolio strategist


Principal Financial Group is continuing to build out its model portfolio offering, making a strategic hire to lead the development of the product offering and bringing to market three new multi-factor ETFs. 

Both actions will serve as foundational pillars for Principal’s planned growth in the model portfolio space while also meeting the increased client demand for adaptive risk ETFs.

The Principal Adaptive Multi-Factor ETFs are built to adjust to changes in the investment environment for risk assets. The three ETFs – US Large Cap, US Small Cap, and International – will use factor combinations to read and adjust risk exposure based upon equity market signals rather than macroeconomic indicators.

“We remain focused in our pursuit of investment solutions that will help clients optimise returns and mitigate risk. By utilising a rules-based investing process, the Principal Adaptive Multi-Factor ETFs aim to consistently outperform traditional market cap-weighted indexes during periods of low and high market volatility,” says Matthew Raynor, managing director of the U.S. Strategic Client Group for Principal Global Investors. “These ETFs assess market risk measurements like the VIX, as well as proprietary risk screens, and seek to actively allocate to the most appropriate factors based on these measurements.”

In addition to supporting client demand, the Principal Adaptive Multi-Factor ETFs will also become a core component of Principal’s model portfolio offering that has been advanced in 2021. After launching 25 Principal Wilshire Diversified Portfolios in early May, Principal has since hired Michael Casciano as a model portfolio strategist to help lead and develop its long-term model strategy.

“Mike comes to Principal with a tremendous amount of model portfolio expertise and the experience to guide both the construction of models and client engagement,” says Jill Brown, managing director of US Wealth Markets for Principal Global Investors. “His immediate objective will be to create our own open architecture, Principal branded series of models, and the Principal Adaptive Multi-Factor ETFs will be significant building blocks for them.”

Casciano joined Principal on 17 May after spending 14 years with BlackRock, where he held multiple roles within its model portfolio business. He most recently served as the head of 55ip models partnership.

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