Fund Description: Principal U.S. Mega-Cap Multi-Factor ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the Principal Exchange-Traded Funds, an open-end investment management company. INVESTMENT OBJECTIVE: The Principal U.S. Mega-Cap Multi-Factor ETF seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq U.S. Mega Cap Select Leaders Index. INDEX DESCRIPTION: The Nasdaq U.S. Mega Cap Select Leaders Index uses a quantitative model designed to identify equity securities of companies with the largest market capitalizations in the Nasdaq US 500 Large Cap Index (the Parent Index), with higher weights given to securities that are less volatile. The Parent Index is composed of equity securities of U.S. issuers with large market capitalizations. To be eligible for the Index, a security must be in the top 50th percentile of the Parent Index by aggregate company market capitalization. The Index uses a modified equal-dollar weighting methodology. Securities of companies in the top 10% of aggregate market capitalization are weighted by market capitalization. Securities of the remaining companies are equally weighted and volatility adjusted, which gives higher weight to securities that are more liquid and less volatile. The Index is rebalanced semi-annually. FUND STRATEGY: Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the Index at the time of purchase. The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a full replication strategy which involves investing in all the securities that make up the Index, in the same approximate proportions as the Index. The Fund can, however, use a sampling methodology to purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The Fund can also invest in securities not included in the Index that the Advisor believes will help the fund track the Index. FUND MANAGEMENT: Principal Global Investors, LLC serves as the investment adviser to the Fund.