Nasdaq is excited to announce that Principal Financial Group launched two new ETFs that track indexes in Nasdaq’s smart beta suite: the Principal Price Setters Index ETF (PSET) and the Principal Shareholder Yield Index ETF (PY). Both ETFs launched on the Nasdaq Stock Exchange on March 22nd.
PSET looks to invest in large- and mid-cap U.S. companies that have the ability to pass through rising costs without sacrificing customers—or, rather, that have substantial pricing power. The fund’s underlying index, the Nasdaq U.S. Price Setters Index, selects its components from the Nasdaq U.S. Large Mid Cap Index. The Nasdaq U.S. Price Setters Index has historically proven to combat inflation and has performed well during times of heightened market stress. It identifies securities that not only possess sustainable pricing power, but also display high quality financial metrics.
PY utilizes the same selection universe (Nasdaq U.S. Large Mid Cap Index Index) but targets companies that have exhibited strong shareholder yield, which includes dividend payments and stock buybacks. Dividends and buybacks are explicit and implicit methods in which a company can return cash to their shareholders; the Nasdaq U.S. Shareholder Yield Index combines those factors with additional cash flow criteria to ensure not only that the securities in the index are great historical yield producers, but also positioned to continue to maintain those attractive yields moving forward.
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