Listed Infrastructure

Listed Infrastructure – A timely complement to unlisted infrastructure

June 1, 2023

Emily Foshag, CFA

Portfolio Manager, Listed Infrastructure

At a glance

Many investors have achieved infrastructure exposure exclusively through the private markets, yet the asset class can also be accessed through listed infrastructure equity strategies.
In today’s market environment, the liquidity, diversification, and valuation transparency of listed infrastructure makes it an increasingly relevant complement to unlisted infrastructure exposure.
As attractive income opportunities become more plentiful across the broader investment landscape, the growth emphasis of listed infrastructure may also prove to be a positive differentiator.
Listed infrastructure can be utilized by institutional investors to enhance a public equity allocation by lowering its expected market beta and providing greater resilience amidst persistent inflation.

Since its emergence as an asset class in the 1990s, infrastructure has increasingly featured as a distinct allocation within institutional investment portfolios. Traditional infrastructure assets typically share specific attributes that support the delivery of steady investment returns throughout an economic cycle. These businesses tend to provide services that are essential to our society and operate under regulated or contracted frameworks that provide investors with a higher degree of revenue and cash flow visibility.

Historically, many investors have achieved infrastructure exposure through the private markets, either by investing in private equity fund structures or into assets directly. This approach closely aligns with the role other private markets asset classes, such as private equity and private real estate, play in a portfolio. However, it is also possible to access the infrastructure asset class through listed equity strategies and doing so may prove to be advantageous in certain market environments.

EXHIBIT 1: Typical investment characteristics of listed and unlisted infrastructure

Table showing typical investment characteristics of listed and unlisted infrastructure

Relative appeal of listed strategies may be amplified today

Given the broader macroeconomic challenges seen at present, we believe the liquidity, diversification, and valuation transparency of listed infrastructure make it an increasingly important alternative to unlisted infrastructure exposure. In addition, the investment returns of listed infrastructure have historically skewed more towards growth compared to unlisted returns. This suggests listed infrastructure has lower risk of substitution as other income- oriented investments regain prominence. Further, we contend that the recent underperformance of listed infrastructure may signal an attractive relative valuation opportunity.

Liquidity

The listed infrastructure universe comprises US$4 trillion in market capitalization, and average daily traded volume exceeds US$14.1 billion.¹ Even the largest of institutional investors may have greater confidence in how quickly exposure to the infrastructure asset class can be added or reduced when investing via public equity markets. In contrast, investing in unlisted infrastructure, whether directly or through fund vehicles, generally requires lead times of up to three years for a commitment to be completely called, and usually necessitates the lock up of capital for years.

Splitting an infrastructure allocation across both listed and unlisted investments can help institutional investors strike the right balance between asset class exposure and liquidity without sacrificing total exposure to infrastructure. This approach can also prove advantageous through periods when an investor is looking to increase overall liquidity and remain nimble amidst heightened volatility. If an overall infrastructure allocation outperforms other plan assets, it is relatively straightforward to divest from listed infrastructure to bring the overall allocation back in line with a strategic target. There are typically restrictions on redemptions in private vehicles, or it may simply take time to find a buyer for an individual asset.

In addition, the differentiated liquidity offered by listed infrastructure allows investors an opportunity to tactically position portfolios in response to today’s challenging macroeconomic backdrop. For example, our listed infrastructure portfolios currently reflect a bias towards companies with balance sheet positions that we expect to have greater earnings resilience in a recession.

Diversification

Listed infrastructure portfolios typically offer greater diversification than unlisted infrastructure portfolios. A single listed infrastructure company may manage dozens of assets, and a listed infrastructure portfolio may contain exposure to 30-60 companies with representation across a wide range of geographies, sectors, subsectors, regulatory regimes, and stages of development. Entire unlisted infrastructure portfolios typically comprise only 10-15 assets. In periods characterized by easy monetary policy and steadily rising asset prices across the board as we have experienced for much of the past decade, diversification may matter less. However, with financial conditions having tightened as significantly as they have over the past 12 months, we remain aware of the possibility for ‘unknown unknowns’ to impact our portfolio holdings. Simply put, we believe a more diversified portfolio is more likely to withstand unanticipated shocks.

Composition of returns

Income is commonly understood as a key appeal of the infrastructure asset class. Compared to listed infrastructure investments, the return profile of unlisted infrastructure has historically emphasized income to a much greater degree. This difference reflects an underlying bias in the private infrastructure investment universe towards mature assets that require limited incremental investment. It is further evidenced by differences in subsector exposure between the two marketplaces. Over 50% of the listed infrastructure universe comprises regulated utilities, which are investing between 5-10% of their existing asset bases every year while yielding in the low- to mid-single digits depending on the market.² In contrast, operating renewables assets feature more heavily in private infrastructure portfolios, and these assets generally require no incremental growth investment each year.

Whereas listed infrastructure companies typically pay dividends in the range of 50-80% of earnings, and even lower as a percentage of cash flows, unlisted assets have historically paid out the bulk of operating cash flows as dividends^*. We believe the prominence of income for the unlisted infrastructure investment case risks becoming a disadvantage in the current market environment. Other income-producing assets can more readily compete with the income generated from mature, unlisted infrastructure today. We would also note that the focus on new asset development by listed infrastructure companies is a key reason why we are excited about the potential of such investments to drive sustainable impact.

EXHIBIT 2: Listed infrastructure has historically delivered greater capital growth, while total returns have been comparable
Annualized trailing five year returns, 2017-2022

Bar chart comparing listed and unlisted infrastructure annualized trailing five year returns, 2017-2022

As of 31 December 2022. Source: Average returns shown are those delivered over the period 2017-2022. Listed infrastructure is represented by the FTSE Global Core Infrastructure 50/50 Index. Unlisted infrastructure is represented by EDHEC infra300® (quarterly), EW LCU. Please refer to Important Information section for additional disclosures

Valuation transparency

There are meaningful differences in both the valuation frequency and methodologies utilized in listed and unlisted infrastructure markets. Specifically, the valuations of listed infrastructure companies reflect the prices at which transactions occur daily. Valuations for unlisted infrastructure funds and individual assets are typically published only quarterly or semi- annually and are established using appraisal-based methodologies, which are broadly understood to drive meaningful lag and smoothing effects. Unlisted infrastructure valuations are also more susceptible to influence from individual actors, many of which have a commercial incentive to limit write-downs or fluctuations in capital values over time.

At present, our view is that listed infrastructure valuations likely reflect the current macroeconomic backdrop to a greater extent than unlisted infrastructure valuations. Recent relative performance supports this hypothesis. The long-term return drivers of listed infrastructure closely mirror those of unlisted infrastructure strategies, and as such, long-term investment returns have been comparable. However, we have seen listed infrastructure returns trail since early 2020. See in Exhibit 3 below.

EXHIBIT 3: Historically, listed and unlisted infrastructure have offered comparable returns— though returns have diverged more recently
Cumulative returns (index base = 100), 2007-2022

Line graph comparing listed and unlisted infrastructure returns from 2007-2022

Source: FactSet, Preqin, Principal Real Estate Investors, 31 December 2022. Listed infrastructure is represented by a 50/50 blend of MSCI ACWI Utilities Index and the Alerian MLP Index through March 2015, and the FTSE Global Core Infrastructure 50/50 Index thereafter. Please refer to Important Information section for additional disclosures. Unlisted infrastructure is represented by the Preqin private infrastructure index with performance lagged by one year

We attribute the recent underperformance of listed infrastructure to a confluence of events, the first of which was the public equity market’s reaction to weak transportation infrastructure fundamentals during the depths of the coronavirus pandemic. The resulting decline in cash flow generation, while stark, was never likely to last for as long as was implied in valuations in March 2020. The energy infrastructure sector also experienced a significant downdraft during this time, reflecting a sharp repricing in commodity markets— even though energy infrastructure fundamentals remained resilient. Then, as equity markets rallied from their pandemic lows in late 2020 and 2021, listed infrastructure lagged. Investors expressed a preference for cyclical businesses and avoided sectors historically seen as more rate sensitive. Finally, in 2022, while listed infrastructure held up well relative to broader global equities, it still delivered negative total returns and therefore underperformed unlisted infrastructure.

We ultimately take the view that the recent underperformance of listed infrastructure relative to unlisted strategies has little to do with a divergence in fundamentals, and instead see a temporary dislocation caused by key differences in how the respective markets operate. Regardless of whether one expects unlisted valuations to catch up with what is reflected in public markets, or for listed infrastructure to recover substantially from here, we believe there is now a case for listed infrastructure to outperform over the medium-term.

A defensive substitute for global equity exposure

Beyond its ability to add value to a broader infrastructure allocation, listed infrastructure also has the potential to deliver differentiated outcomes within a global public equity allocation. We believe listed infrastructure continues to be well positioned relative to global equities in the current environment, largely because of the expected defensiveness of infrastructure business models through a variety of macroeconomic scenarios. See Exhibit 4.

EXHIBIT 4: Listed infrastructure has historically exhibited a lower beta relative to global equities
Beta of listed infrastructure relative to global equities (rolling 3-year average)

Line graph showing beta of listed infrastructure relative to global equities from 2010-2022

As of 31 December 2022. Source: FactSet. Listed infrastructure is represented by a 50/50 blend of MSCI ACWI Utilities Index and the Alerian MLP Index through March 2015, and the FTSE Global Core Infrastructure 50/50 Index thereafter. The FTSE index launched in March 2015. Please refer to Important Information section for additional disclosures. Global equities represented by MSCI All Country World Index. Past performance is not indicative of future performance and should not be relied upon to base an investment decision.

Further, as regulated monopolies or monopoly-like businesses delivering essential services, most listed infrastructure companies have a differentiated ability to preserve margins during periods of rising inflation. Listed infrastructure has historically outperformed global equities during periods of above-average inflation, suggesting that the structural advantages these businesses enjoy have the potential to flow through to relative share price performance. See Exhibit 5.

EXHIBIT 5: Listed infrastructure offers the potential to perform well in periods of higher inflation
Average annualized returns over the last 20 years

Bar chart showing average annualized returns of global listed infrastructure and global equities from 2002-2022

Final thoughts:

Infrastructure has increasingly been featured as a distinct allocation within institutional investment portfolios, though to date, many investors have achieved infrastructure exposure exclusively through the private markets. In our view, the liquidity, diversification, and valuation transparency of listed infrastructure make it an important complement to unlisted infrastructure exposure in today’s market environment. In addition, because listed infrastructure has lagged unlisted investments materially in recent years, we now see a case for listed infrastructure to outperform over the medium-term. Alternatively, listed infrastructure can be utilized in a manner that seeks to enhance a public equity allocation. Regardless of how exposure is achieved, we believe listed infrastructure has the potential to deliver attractive risk-adjusted returns through a range of macroeconomic scenarios.

¹ As of March 31, 2023. FactSet, Principal Real Estate
² Utilities makes up of over 50% of the FTSE Global Core Infra 50/50 index. Source: Principal Real Estate, March 2023.
^*Dividends are not guaranteed and the amount paid, may change over time. Source: Principal Real Estate, 31 March 2023.

Disclosure

For Public Distribution in the U.S. For Institutional, Professional, Qualified and/or Wholesale Investor Use Only in Other Permitted Jurisdictions as defined by local laws and regulations.

Risk Considerations
Investing involves risk, including possible loss of Principal. Past Performance does not guarantee future return. Asset allocation and diversification do not ensure a profit or protect against a loss. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability, and energy conservation policies. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. Risk is magnified in emerging markets, which may lack established legal, political, business, or social structures to support securities markets and/or may be subject to trading suspensions, government interventions, or other interference. For Public Distribution in the U.S. For Institutional, Professional, Qualified and/or Wholesale Investor Use Only in Other Permitted

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This material covers general information only and does not take account of any investor’s investment objectives or financial situation and should not be construed as specific investment advice, a recommendation, or be relied on in any way as a guarantee, promise, forecast or prediction of future events regarding an investment or the markets in general. The opinions and predictions expressed are subject to change without prior notice. The information presented has been derived from sources believed to be accurate; however, we do not independently verify or guarantee its accuracy or validity. Any reference to a specific investment or security does not constitute a recommendation to buy, sell, or hold such investment or security, nor an indication that the investment manager or its affiliates has recommended a specific security for any client account. Subject to any contrary provisions of applicable law, the investment manager and its affiliates, and their officers, directors, employees, agents, disclaim any express or implied warranty of reliability or accuracy and any responsibility arising in any way (including by reason of negligence) for errors or omissions in the information or data provided. All figures shown in this document are in U.S. dollars unless otherwise noted. Investing involves risk, including possible loss of principal.

Index descriptions: FTSE Global Core Infrastructure 50/50 Index is a market-capitalization-weighted index of worldwide infrastructure and infrastructure-related securities and is net of dividend withholding taxes. Constituent weights are adjusted semi-annually according to three broad industry sectors: 50% utilities, 30% transportation, and a 20% mix of other sectors, including pipelines, satellites, and telecommunication towers. MSCI World Core Infrastructure Index captures large and mid-cap securities across the 23 Developed Markets countries. The Index is designed to represent the performance of listed companies within the developed markets that are engaged in core industrial infrastructure activities. MSCI AC World Infrastructure Index captures the global opportunity set of companies that are owners or operators of infrastructure assets. Constituents are selected from the equity universe of MSCI World, the parent index, which covers mid and large cap securities across the 23 Developed Markets (DM) countries. MSCI All Country World Index is a stock index designed to provide a broad measure of global equity market performance. The MSCI ACWI Utilities Index captures large and mid cap representation across 23 Developed Markets and 24 Emerging Markets countries. All securities in the index are classified in the Utilities sector as per the Global Industry Classification Standard. Alerian MLP Infrastructure Index was launched June 1, 2006 and is a composite of energy infrastructure Master Limited Partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index constituents earn the majority of their cash flow from midstream activities involving energy commodities. The MSCI World Core Infrastructure Index was launched on Jan 16, 2015.

Preqin private infrastructure index start date: 12/31/2007. The unlisted infrastructure benchmark is part of Preqin’s Private Capital Quarterly Index series that captures the return earned by investors on average in their private capital portfolios, based on the actual amount of money invested in private capital partnerships.

The MSCI ACWI Infrastructure Index was launched on Jan 22, 2008.

FTSE Global Core Infrastructure 50/50 Index launched in March 2015.

The infra300^® index was launched on March 31, 2000 and is an equally weighted index designed to match the TICCS^® allocations of the global unlisted infrastructure equity investment universe. It is designed to track the structure of global infrastructure market by business model, industrial activity and corporate structure.

Index performance information reflects no deduction for fees, expenses, or taxes. Indices are unmanaged and individuals cannot invest directly in an index.

This material may contain ‘forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

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By clicking "Accept", you consent to us dealing with your personal information in the manner set out in our Privacy Policy. You also acknowledge and understand that by providing such consent that we will not be required to take such steps as are reasonable in the circumstances to ensure overseas recipients of your personal information comply with the Australian Privacy Principles.

"Principal Financial Group is a global organization that operates in many different jurisdictions worldwide. Principal Financial Group’s diversified group of companies and affiliates provide comprehensive asset management solutions for institutional investors, investment funds and individuals in key markets around the world. Principal Financial Group has investment offices in the United States, [Mexico, South America, Europe, the Middle East, and throughout Asia]. Where appropriate, Principal Financial Group entities are registered with appropriate regulatory authorities in the jurisdictions in which they are required to be registered to carry on their respective business activities.

All products or services provided to you by any Principal Financial Group company shall only be available in the jurisdiction(s) within which the company providing the product or service is authorized to operate. The relevant Principal Financial Group company reserves the right to make the final determination on whether or not you are eligible for any particular product or service. If you choose to enter a website outside your country of residence, you are advised that it may not be legal in that jurisdiction for you to access or use the facilities available on that Site and the legal requirements of that jurisdiction may prohibit you from dealing or otherwise transacting in that jurisdiction.

Principal Financial Group makes no representation that the content of the site is appropriate for use in all locations, or that the transactions, securities, products, instruments or services discussed at this site are available or appropriate for sale or use in all jurisdictions or countries, or by all persons and entities. Nothing on this website shall be considered a solicitation for the offering of any investment product or service to any person in any jurisdiction where such solicitation or offering may not lawfully be made.

You may view, download for caching purposes only, and print content from the website for your own personal use, subject to the restrictions set out below and elsewhere in these Terms of Use.

No Guarantee of Timeliness
This website may contain videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions. The information and materials contained on this website, and the terms, conditions, and descriptions that appear, are subject to change. All content on this website is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.

No Warranties
The information on this website has been developed internally and/or obtained from sources believed to be reliable; however Principal Global Investors and its affiliates do not independently verify or guarantee its accuracy or validity. The information and services provided on this website are provided ""AS IS"" and without warranties of any kind, either expressed or implied. To the fullest extent permissible pursuant to applicable law, Principal Global Investors disclaims all warranties, including, but not limited to, any warranty of non-infringement of third-party rights and any implied warranties of merchantability and fitness for a particular purpose. Principal Global Investors does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained on this website and does not warrant that the functions contained in this website will be uninterrupted or error-free, that defects will be corrected, or that the website will be free of viruses or other harmful components. Principal Global Investors expressly disclaims all liability for errors and omissions in the materials on this website and for the use or interpretation by others of information contained on the website. Subject to any contrary provisions of applicable law, no company in the Principal Financial Group nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions on this website.

If you have questions, please email us.

Click ""Accept"" to indicate your acknowledgement and acceptance of Principal Global Investors Terms of Use and to continue."

"These Terms & Conditions explain certain legal and regulatory conditions and restrictions in relation to the Principal Global Investors (Europe) Limited website, and in relation to the Principal Global Investors Funds (‘the Funds’). This information may be changed by Principal Global Investors at any time without notice.

In these terms and conditions, references to 'Principal Global Investors' means Principal Global Investors (Europe) Limited or any affiliate of the Principal Financial Group, Inc. or Principal Global Investors, LLC.

Before you proceed, you must acknowledge that you have read, and agree to, our terms and conditions.

Information in relation to the Principal Global Investors Funds is available through this web site to institutional investors resident in the following countries of: Belgium, France, Finland, Germany, Guernsey, Ireland, Italy, Jersey, Netherlands, Spain, Sweden, Switzerland and the United Kingdom. By proceeding this far you are representing and warranting that you are an institutional investor resident in one of these countries. Not all of the Funds are available in all these jurisdictions, and investors are directed to the Country Registration document for detailed information . What follows is not an offer or invitation to acquire an investment to, and should therefore not be relied upon by, any person anywhere other than the countries noted. Persons in respect of whom such prohibitions apply must not access this web site. This web site is reserved exclusively for non-U.S. persons and should not be accessed by any person in the United States.

Yes, I certify to be an institutional investor and resident of a country listed above.

Cookies
Use of cookies on this site is outlined in the Privacy and Security Policy. In accepting these terms and conditions, you accept the terms of the Cookie Policy and the use of cookies from this site.

Legal Entity Disclosure and Regulation
In Europe by Principal Global Investors (EU) Limited, Sobo Works, Windmill Lane, Dublin D02 K156, Ireland. Principal Global Investors (EU) Limited is regulated by the Central Bank of Ireland.

In the United Kingdom by Principal Global Investors (Europe) Limited, Level 1, 1 Wood Street, London, EC2V 7 JB, registered in England, No. 03819986, which is authorised and regulated by the Financial Conduct Authority (“FCA”).

In Switzerland by Principal Global Investors (Switzerland) GmbH. This website is considered as advertising and information contained herewith be treated as such. Investors can obtain free of charge the prospectus, trust deed, the prospectus, the key investor information document (KIID), and the annual and semi-annual reports from the representative in Switzerland.

In Europe and United Kingdom, this website is directed exclusively at Professional Clients and Eligible Counterparties and should not be relied upon by Retail Clients (all as defined by the MiFID and FCA respectively). If you are viewing the material as a retail investor, you should seek independent investment advice before deciding whether the products and services in question are suitable to meet your investment needs and objectives, as the language has not been complied to a retail client standard.

Principal Global Investors Funds
Principal Global Investors (Ireland) Limited is the issuer of the Funds. Investments may only be made on an application form attached to a current prospectus and following receipt by the investor of the KIID in respect of the Fund in which they intend to invest. The latest version of the prospectus of the Funds is dated 14 December 2012.

For Real estate investors in the European Economic Area (“EEA”), this website and the information on it is only directed at persons who are professional investors for the purposes of the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”), professional clients or eligible counterparties for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/EU) (“MiFID II”) or as otherwise defined under applicable local law and regulation and at whom this website and the information on it may lawfully be directed in any relevant jurisdiction (“Eligible Persons”). In relation to each member state of the EEA (“Member State”) which has implemented AIFMD (and for which transitional arrangements are not/ no longer available), this website may only be accessed and interests in Funds may only be offered or placed in a Member State to the extent that: (i) the relevant Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD (as implemented into the local law/regulation of the relevant Member State); or (ii) this website and its information may otherwise be lawfully distributed and the interests in Funds may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). In relation to each Member State of the EEA which, at the date of accessing this website, has not implemented AIFMD, this information may only be distributed and interests in Funds may only be offered or placed to the extent that this information may be lawfully distributed and the interests in Funds may lawfully be offered or placed in that Member State (including at the initiative of the investor).

Persons who are not Eligible Persons, including but not limited to those individuals or other persons who fall within the FCA’s definition of ‘retail clients’, should not use or rely upon this website or the information contained therein and may not engage the services of Principal Real Estate or any of its affiliates, or invest in any Fund. Potential investors are advised that all or most of the protections provided by the UK regulatory system will not apply and that the UK Financial Services Compensation Scheme may not be available in relation to an investment in a Fund or separate account.

The contents of this website have not been verified or approved by any competent regulatory or supervisory authority. No liability, whether in negligence or otherwise, arising directly or indirectly from the use of the information or any part of it on this website is accepted and no representation, warranty or undertaking, whether express or implied, is or will be made at any time by Principal Real Estate or its affiliates or any of their respective advisers, directors, officers, employees, representatives or other agents (“Principal Agents”) for any information or any of the opinions contained herein or for any errors, omissions or misstatements.

None of Principal Real Estate or its affiliates or any Principal Agents makes or has been authorised to make any representation or warranties, whether express or implied, in relation to Principal Real Estate or regarding the truth, accuracy or completeness of any of the information contained on this website at any time. No representation or warranty is given by Principal Real Estate, its affiliates or the Principal Agents as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in the information on this website. Furthermore, nothing contained on this website is or should be relied on as a promise or representation as to the future. No reliance may be placed by any person for any purpose whatsoever on the information or opinions contained on this website or on its completeness, accuracy or fairness at any time.

Principal Global Investors (Europe) Limited is not authorised by the FCA to directly deal with retail investors; any distribution of the Fund to retail investors in Europe is facilitated by fund distributors with which Principal Global Investors (Europe) Limited has entered distribution arrangements, pursuant to advice provided to investors by those distributors, based on the documents Principal Global Investors (Europe) Limited provides. Retail investors should not be provided with access to this website.

The name of the Swiss representative is ACOLIN Fund Services AG, Stadelhoferstrasse 18, CH-8001 Zürich. The name of the Swiss paying agent is Banque Cantonale de Genève, 17, quai de l’Ile, 1204 Geneva. Investors can obtain the prospectus, trust deed, the simplified prospectuses and the annual and semi-annual reports free of charge from the representative in Switzerland.
The value of units and the income from them may fall as well as rise.

Investments in the Funds are neither insured nor guaranteed by the US Government or the Federal Deposit Insurance Corporation and are not deposits or obligations of, or guaranteed by, Principal Global Investors.

No Solicitation
Nothing contained in this website shall constitute an offer or solicitation, in relation to units in the Funds or generally, in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised.

In particular, shares issued by the Company, and units in the Funds, have not been and will not be registered under the United States Securities Act of 1933 as amended or the securities laws of any state or political subdivision of the United States and may not, except in a transaction which does not violate US securities laws, be directly offered or sold in the United States or to any US Person. The Company will not be registered under the United States Investment Company Act of 1940 as amended.

This website is reserved exclusively for non-US persons and should not be accessed by any person in the United States.

No Investment Advice
The information in this website contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such nor should it be construed as specific investment advice, an opinion or recommendation. The general information it contains does not take account of any investor’s investment objectives, particular needs or financial situation, nor should it be relied upon in any way as a forecast or guarantee of future events regarding a particular investment or the markets in general. Past performance is not a reliable indicator of future performance and should not be relied upon as a significant basis for an investment decision.

You should also inform yourself as to (a) the possible tax consequences, (b) the legal requirements and (c) any foreign exchange restrictions or exchange control requirements which you might encounter under the laws of the countries of your citizenship, residence or domicile and which might be relevant to any investment, including the subscription, holding, transfer or disposal of units in the Funds

Delegation of Investment Management to Affiliates

Products upon which composite results contained in this material, if any, are based may not themselves be available in the United Kingdom and certain other jurisdictions; however, the underlying investment management capability can be made available to institutional investors subject to all applicable local regulations and restrictions. In connection with its management of client portfolios, PGIE may delegate management authority to affiliates that are not authorised and regulated by the Financial Conduct Authority. In any such case, the client may not benefit from all protections afforded by rules and regulations enacted under the Financial Services and Markets Act 2000.

Disclaimer
The information on this website is given by Principal Global Investors in good faith and has been derived from sources believed to be reliable and accurate as at their date. However, Principal Global Investors makes no representation or warranty of any kind for the accuracy or completeness of the information and it is under no obligation to update or correct any errors in the information after the date of publication. This website also contains videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions.

Subject to applicable law, Principal Global Investors and its affiliates and their respective directors, employees and associates do not accept any responsibility arising in any way (including by reason of negligence) for errors in, or omissions from, the information and do not accept any liability for any loss or damage, however caused, as a result of any person relying on any information on the website or being unable to access the website.

The Internet is not a totally reliable and secure medium of communication. Principal Global Investors accepts no liability for the security or confidentiality of information transmitted in this way and any such transmission of information shall be at your own risk.

The entire content of this website is subject to copyright with all rights reserved. You may not copy, reproduce, distribute or modify the content of this website without the prior written permission of Principal Global Investors.

No instructions for investment purposes will be accepted directly from this website or by e-mail.

If you accept these terms and conditions, click ""Accept."""

You are about to leave PrincipalAM.com and be directed to our Japanese site, PrincipalGlobal.jp. If you wish to proceed, please click "Accept." If you would like to stay on PrincipalAM.com, please click "I do not accept."

You may view, download for caching purposes only, and print content from the website for your own personal use, subject to the restrictions set out below and elsewhere in these Terms of Use.

No Guarantee of Timeliness
This website may contain videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions. The information and materials contained on this website, and the terms, conditions, and descriptions that appear, are subject to change. All content on this website is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.

No Warranties
The information on this website has been developed internally and/or obtained from sources believed to be reliable; however Principal Global Investors and its affiliates do not independently verify or guarantee its accuracy or validity. The information and services provided on this website are provided ""AS IS"" and without warranties of any kind, either expressed or implied. To the fullest extent permissible pursuant to applicable law, Principal Global Investors disclaims all warranties, including, but not limited to, any warranty of non-infringement of third-party rights and any implied warranties of merchantability and fitness for a particular purpose. Principal Global Investors does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained on this website and does not warrant that the functions contained in this website will be uninterrupted or error-free, that defects will be corrected, or that the website will be free of viruses or other harmful components. Principal Global Investors expressly disclaims all liability for errors and omissions in the materials on this website and for the use or interpretation by others of information contained on the website. Subject to any contrary provisions of applicable law, no company in the Principal Financial Group nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions on this website.

If you have questions, please email us.

Click ""Accept"" to indicate your acknowledgement and acceptance of Principal Global Investors Terms of Use and to continue."

"Principal Global Investors, LLC, the issuer of this website, is a branch registered in the Dubai International Financial Centre and is authorized by the Dubai Financial Services Authority as a representative office.

This website contains general information only on investment matters and nothing in this website is intended to constitute or form part of any offer or inducement to issue or sell, or any solicitation of any offer to subscribe for or purchase, any securities or investment products in the UAE (including the Dubai International Financial Centre) and accordingly should not be construed as such. Information in this website is not directed at you if we are prohibited by any law of any jurisdiction from making the information on this site available to you and is not intended for any use that would be contrary to local law or regulation. Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be available in all jurisdictions. Accordingly persons are required to inform themselves of and observe any such restrictions.

The information in this website is being made available on the basis that the recipient acknowledges and understands that the entities and securities to which it may relate have not been approved, licensed by or registered with the UAE Central Bank, the Dubai Financial Services Authority or any other relevant licensing authority or governmental agency in the UAE or elsewhere in the Middle East.

The information in the following website should not be construed as investment advice or a recommendation for the purchase or sale of any security. The value of investments and the income from them may fall as well as rise. Principal Global Investors, LLC and the other member firms of Principal Global Investors (collectively, the ""Firms"")* do not guarantee any investment results and there can be no assurance that the strategies employed will improve investment performance, and make no guarantee that a client's investment objectives will be achieved and no warranties or representations, expressed or implied, are made by the Firms concerning the benefits of these strategies discussed herein. The information in this website has been developed internally and/or obtained from sources that the Firms believe to be reliable; however, the Firms do not guarantee the accuracy, adequacy or completeness of such information and are not responsible for any errors or omissions. This website also contains videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions.

This website contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information it contains does not take account of any investor's investment objectives, particular needs or financial situation. Past performance is not a reliable indicator of future performance and should not be relied upon as a significant basis for an investment decision. You should consider whether an investment fits your investment objectives, particular needs and financial situation before making any investment decision.

Nothing in this website should be construed as investment, tax, legal or other advice.

The content of this website has not been approved by or filed with the UAE Central Bank or Dubai Financial Services Authority.

Access to this website is only permitted for ""sophisticated institutional investors/professional clients"". If you are not a ""sophisticated institutional investor/professional client"", you may not access this website and you should select the ""Decline"" link below.

By selecting the ""Accept"" button below, and entering this website, you agree to these terms and confirm and represent that you are a "" sophisticated institutional investor/professional client""."