Principal Quality ETF

Principal Quality ETF (PSET) is an actively managed fund: rather than tracking an index, it uses a quantitative (computer-driven) model to pick about 72 stocks from the S&P 500 Growth Index, favoring profitable companies with strong balance sheets and the power to raise prices. Its expense ratio, the yearly fee, is 0.15%, matching QUAL but well above SCHG and VUG at 0.04%. It is small, with $28.8 million in assets as of June 30, 2026.

• Over the year to Oct 27, 2026, PSET returned +3.4%, 6th of 9 among similar funds.
• Its 5-year annualized return was +7.9% and its 10-year +13.2%.
• In the 2020 COVID crash it fell 34.8% and regained its old high 5.1 months after the low.
• Its worst full calendar year was 2022 (-16.5%); its best was 2019 (+34.9%).
• The deepest fall in its price history was 34.8% (Feb 20, 2020 to Mar 23, 2020), recovered by Aug 25, 2020.

As of Jun 30, 2026, the fund held 72 securities; the ten largest made up 32.3% of assets.

By sector

• Over the three months to Jun 30, 2026, investors withdrew a net $3.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.02%, +2.41%, -0.48%.

PSET does not track an index. Its manager, Principal Global Investors (PGI), uses its own quantitative (computer-driven) model to choose stocks from the S&P 500 Growth Index. The model favors growth stocks with higher quality, which PGI measures by profitability, earnings quality, balance sheet strength and solvency (the ability to meet long-term debts). It also looks for growth potential and pricing power: a company's ability to raise prices without losing demand.

As of June 30, 2026, the fund held 72 stocks, with the 10 largest making up 32.3% of assets. The top five were NVIDIA (6.5%), Apple (5.5%), Applied Materials (3.3%), Microsoft (3.3%) and Alphabet (3.1%). About 91% was in US companies and nearly 7% in Irish-registered companies such as Eaton. It held almost no cash and no derivatives.

Holdings are rebalanced at least once a year, but PGI can adjust the model or the portfolio whenever it chooses. Turnover, the share of the portfolio replaced in a year, was 39.3% in the prospectus filed October 27, 2025. Because the model drives both stock selection and portfolio construction, returns can differ sharply from the S&P 500 Growth Index: in 2024 the fund returned 17.9%, versus 36.1% for the index. The prospectus also warns that models rely on historical data that may be wrong.

• PSET charges 0.15% a year, versus an average of 0.18% for the similar funds below (6th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $192 over 10 years (assuming a 5% annual return).

It holds about 72 model-picked US growth stocks, so it fits more naturally as a tilt beside a broad core fund than as a portfolio's main stock holding.

PSET could add a tilt toward profitable large US growth companies, but its declines have been deep. It fell 34.8% in the 2020 COVID crash (February 20 to March 23, 2020), recovering by August 25. In the 2022 bear market it lost 24.4% and took 14 months from its September 30, 2022 low to regain its peak. Its worst calendar year was 2022, a 16.4% loss. Launched in 2016, it has no 2008 record. Withdrawing near such lows locks in losses.

Income is minor: the 12-month yield was 0.75% as of October 27, 2026, paid quarterly. Under the SEC's standard example, the 0.15% expense ratio costs $15 in year one on $10,000. Over the five years to December 31, 2024, it returned 12.9% a year versus 14.52% for the S&P 500. Past results don't predict the future, and a plan needs to weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.