It is an active ETF in which portfolio managers select US large-cap stocks with the goal of capital growth. It concentrates its investments in stocks judged to have high growth potential and seeks to outperform the market.

It suits investors who want to invest in US large caps through active management and expect market-beating performance, while being willing to accept manager risk.

It is an ETF run by Principal using an active (actively managed) approach.

Based on fundamental analysis, the portfolio managers select US large-cap stocks they judge to have high growth potential and invest in them with concentration. Rather than tracking an index as is, the fund selects stocks and adjusts weightings to seek market-beating performance, and its results depend on the managers' judgment.

• Active stock selection
• Concentrated investment focused on capital growth

Assets under management (AUM) stand at $1.9B, and the expense ratio is 0.29% per year.

Compared with index-tracking large-cap ETFs and other active large-cap ETFs, the managers' selection strategy is the main point of comparison.

US large caps are driven by interest rates, the economy and earnings trends. An active strategy outperforms the market when its stock picks work out and underperforms when they miss. Because its selection leans toward growth stocks, it can show strength when growth stocks lead the market and relative weakness when value stocks lead.

Fund flows into active large-cap products diverge depending on management results, risk appetite and market conditions, and money sometimes moves into this group of products when interest in active management rises. It is also worth watching how fund flows change with management results and the market environment.

Its strengths are active selection and the potential for outperformance, while manager risk, concentration and fee burden are points to consider.

For exposure to large caps that simply track an index, direct substitutes include VOO and IVV, and for other large-cap exposure, products such as SPY are also worth comparing. The three products shown in the table, BLCR, EAGL and AVLC, are a large-cap core active fund, a select active fund and a large-cap strategy respectively, and they differ in selection method and management intensity. For this ETF, active selection centered on capital growth is the differentiating factor.

Here are the points to review before investing in LCAP. Active selection and the potential for outperformance are attractive, but manager risk, concentration and fee burden need to be confirmed in advance. It is also a good idea to compare it with index-tracking products and other active large-cap products.

Underperformance versus the market if the managers' stock picks miss, along with concentration risk, are the main variables for long-term results, and because the fund is actively managed, its fee burden is larger than that of index-tracking products. If the selected stocks perform poorly, the fund can underperform the market.

It is a suitable candidate for investors who want to invest in US large caps through active management and expect outperformance. To track an index as is, consider products such as VOO and IVV, and if you want active selection, it is advisable to compare this product alongside them before choosing.