Analyst Report

The Principal International Multi-Factor Core Index ETF (PDEV) tracks an index of large-cap companies in developed markets outside the U.S. Distinguishing it from other developed markets funds, PDEV also excludes Korea. The largest half is weighted by market capitalization, with a tilt toward those that earn the highest scores on factors like quality growth, shareholder yield and price momentum. The smaller half of the universe is then scored a currency-neutral multi-factor score, with the top 50% equal-weighted and the remainder excluded.

PDEV launched in July 2019 and is priced competitively. But it has been slow to gather assets, and trades at wider spreads than some of its multi-factor competitors. Investors can compare it to the Goldman Sachs ActiveBeta International Equity ETF (GSIE), Hartford Multifactor Developed Markets ex-U.S. ETF (RODM), the JPMorgan Diversified Return International Equity ETF (JPIN) or the iShares Edge MSCI Multi-factor International ETF (INTF).

There are plenty of other variations on international investing, like the Vident International Equity Fund (VIDI) or the highly-concentrated (and extremely expensive) First Trust Dorsey Wright International Focus 5 ETF. There’s the international factor FlexShares trio: FlexShares International Quality Dividend Index Fund (IQDF), FlexShares International Quality Dividend Dynamic Index Fund (IQDY), FlexShares International Quality Dividend Defensive Index Fund (IQDE).

The international equity space also includes ultra-low-cost plain-vanilla rivals like the iShares Core MSCI EAFE ETF (IEFA) and the Vanguard FTSE Developed Markets ETF (VEA). They lack fancy factors but offer similar exposure and great liquidity at a fraction of the price.