Principal Capital Appreciation Select ETF (LCAP) seeks to provide long-term capital appreciation through active management of a concentrated portfolio of U.S. equity securities. This actively managed ETF focuses on companies with strong growth potential and fundamental characteristics that the portfolio managers believe will drive stock price appreciation over time.
How It Works
LCAP employs an active management approach where portfolio managers conduct fundamental research to select individual stocks based on growth potential, financial strength, and valuation metrics. The fund maintains a concentrated portfolio of typically 30-50 holdings, allowing for meaningful position sizes in the managers' highest-conviction ideas. Portfolio composition and weightings are adjusted based on ongoing research and market conditions rather than following a benchmark index.
Key Features
- Newly launched ETF with 0.00% expense ratio, providing cost-free access to active equity management during initial period
- Concentrated portfolio approach allows managers to take meaningful positions in their highest-conviction growth opportunities
- Active management strategy aims to outperform passive broad market exposure through selective stock picking and timing
Risks
- This ETF can lose value if the portfolio managers' stock selection proves incorrect, as concentrated holdings amplify both gains and losses compared to diversified funds
- Active management risk means the fund may underperform passive alternatives if security selection and timing decisions fail to add value over time
- Equity market volatility could cause 20-40% declines during bear markets, with concentrated positions potentially creating higher volatility than broad market ETFs
Who Should Own This
Best suited for investors with 3+ year time horizons and medium-to-high risk tolerance who prefer active management over passive indexing. Appropriate as a satellite holding representing 10-25% of equity allocation for those seeking potential outperformance through professional stock selection and willing to accept manager risk.