Investing primarily in the shares of European-domiciled companies, this strategy is research-driven and focused on bottom-up stock selection, not bold calls on macro or geopolitical conditions.
Capitalize on dislocations between market expectations and our assessment of free cash flow growth
Focus on idiosyncratic (stock specific) portfolio risk with no systematic style or other factor biases
Integrate fundamental investment analysis, behavioral finance and a multi-dimensional view of portfolio construction
Deliver core portfolios with the ability to outperform under a variety market backdrops
Global ex-U.S. markets (1 January 1981—31 December 2025)
Data from January 1, 1987-December 31, 2025. Source: Empirical Research Partners Analysis. Monthly returns compounded and annualized. Does not reflect the performance of an investment product. Market performance does not reflect the impact of fees, expenses, and transaction costs of investing. Free cash flow is a measure of profitability accounting for all sources and uses of cash, including capital expenditures and acquisitions.
Forward FCF yield combines growth and valuation.
Forward FCF yield analysis cannot be passively replicated.
Over long time periods, analysis indicates companies with higher forward FCF yields outperformed regardless of prevalent market style.
Manager
Principal Equities
Inception
1 April 2000
Index
MSCI Europe NTR Index
Targeted number of holdings
60-100
Expected turnover
30-50%
Investment vehicles
IMA, UCITS Fund
Style
Core, all-weather profile
Tracking error
200-400 bps (ex-post)
Information ratio
0.5 over full investment cycle
We believe bottom-up stock selection is the most reliable and repeatable source of consistent performance. Through focused fundamental research and disciplined risk management, we strive to take advantage of persistent behavioral biases and impediments to capital flows, which often create market inefficiencies and opportunities.
No information
Past performance does not guarantee future results.
Investing involves risk, including possible loss of principal.
Equity markets are subject to many factors, including economic conditions, government regulations, market sentiment, local and international political events, and environmental and technological issues that may impact return and volatility.
Investment guidelines are subject to change.
Not all investment options are available in all jurisdictions. Certain vehicles have not been registered with the United States Securities and Exchange Commission under the United States Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States or to any United States person.
The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets in Europe. Information regarding the comparison to the MSCI Europe Index is available upon request.
Principal Equities is an investment team within Principal Global Investors.