Principal has filed to launch the Capital Securities Fund in Class S shares. The fund will be sub-advised by Spectrum Asset Management, an indirect subsidiary of Principal Life.
According to the filing, the fund invests at least 80% of its net assets in preferred securities. All of the preferred securities purchased by the fund are issued by companies with senior debt rated at the time of purchase BBB- or higher by Standard & Poor's Ratings Service or Baa3 or higher by Moody's Investor Service. The fund may invest up to 100% of its assets in below investment grade preferred securities which are rated at the time of purchase Ba1 or lower by Moody's and BB+ or lower by S&P, provided that the issuer has senior debt outstanding that is rated at the time of purchase BBB- or higher by S&P or Baa3 or higher by Moody's.
The fund will concentrate its investments (more than 25% of its net assets) in securities in the U.S. and non-U.S. financial services (i.e., banking, insurance and commercial finance) industry.
The expense ratio on the fund is listed as zero, after an expense reimbursement of 2 bps. The filing states that “fees and expenses do not reflect the fees and expenses of the wrap account that invests in the fund and would be higher if they did.”