Principal Asset Management has launched a new semi-transparent, actively managed ETF delivering access to a US large-cap growth portfolio focused on blue-chip stocks.

The ETF provides exposure to US large-cap equities of high-quality companies.

The Focused Blue-Chip ETF (BCHP US) has been listed on Cboe BZX Exchange with an expense ratio of 0.58%.

Blue chips are stocks of companies with a national reputation for quality, reliability, and the ability to operate profitably in good and bad times. They are generally well-established in their industries and have the potential for growth of capital and an expectation for above-average earnings.

The ETF is managed by Principal Aligned, Principal’s equities investment team with approximately $45 billion in assets under management and more than 20 years of investment experience. The fund replicates the strategy of the Focused Blue-Chip Mutual Fund which was recently awarded a Gold Medalist Rating by Morningstar.

The strategy is led by William Nolin, Chief Investment Officer, and Thomas Rozycki, Director of Research, who have 30 years and 23 years of investment experience, respectively.

The investment team utilizes a bottom-up, fundamental process that focuses on competitive
position, company management and culture, free cash flow, and risk. The strategy favours companies with owner-operator structures as, according to Principal, these firms tend to be passionate and cost-conscious, leading to longer-term outlooks and an efficient allocation of capital.

The ETF is expected to be relatively concentrated, holding between just 20 to 30 names within its portfolio.

Commenting on the new listing, Jill Brown, Managing Director, US Wealth Platforms at Principal Asset Management, said: “With this offering, we have taken the proven approach of Principal Aligned and offered it as an ETF to meet the needs of our clients. The team’s active approach focuses on owner-operator companies with long runways in front of them – businesses getting better as they get bigger, with strong management teams and attractive valuations.”