Principal Focused Blue Chip ETF (BCHP)
Principal Focused Blue Chip ETF launched in 2023. Actively managed. Non-transparent. Twenty-two holdings. The top ten constitute 76% of assets. This is not a diversified fund — it is a conviction play.
Blue chips: companies well-established in their industries. Strong brands. Proven business models. The sort of firms that have staying power through cycles. The fund seeks long-term capital growth by investing at least eighty percent of net assets in large-cap companies with those qualities, plus the expectation of above-average earnings and real potential for capital appreciation.
The manager is hunting for growth within a blue-chip frame — not IPO speculation or turnaround stories, but mature firms with proven earnings power that can still compound value over time. Apple and Microsoft belong here; so do JPMorgan and Berkshire Hathaway when they fit the growth and earnings criteria.
The concentrated portfolio — only twenty-two stocks — is the defining feature. Most large-cap funds hold several hundred positions to spread risk. BCHP does the opposite. It puts capital behind the manager’s highest-conviction ideas. Concentration creates volatility: if two or three of those twenty-two stocks disappoint, the fund’s returns swing sharply. But it also means the manager is genuinely making a choice. The portfolio is what the team thinks will win.
Bill Nolin and Thomas Rozycki manage the fund. Both started in 2023, which means they joined when the fund launched. Average tenure is 2.72 years. Not much history yet, but they are the architects of the strategy going forward.
Non-transparent is the phrase that matters for daily disclosures. The fund publishes a tracking basket each business day designed to closely track its performance, but not the actual holdings. This is legal under the rules for actively managed ETFs, and it protects the managers’ research and strategy from being front-run by traders. For investors, it means you do not know exactly what is in the portfolio minute by minute; you know the intended exposure through the basket. That is a trade-off some accept for the potential of active outperformance.
Benchmark: Russell 1000 Growth Index. That is the universe of large-cap growth stocks the fund is measured against. Beating that benchmark is the job.
Who owns this? Investors comfortable with concentrated portfolios and high conviction plays. Investors willing to track three-week-old holdings and infer the strategy rather than inspect it daily. Investors betting that a small team of stock pickers can beat a broad index in the large-cap space — and that concentration yields better returns than dilution across hundreds of positions.
Who should avoid it? Investors seeking maximum diversification. Index-fund believers. Anyone uncomfortable with the possibility of material underperformance in any given year. Anyone who needs to see the full holdings list every day.
The risks are plain: concentration magnifies both gains and losses. If the team is right, results compound beautifully. If they are wrong on a few big bets, the fund underperforms sharply. This is not a fund for someone who wants to set and forget; it requires belief in the managers and tolerance for volatility.
Expense ratio is available in the fund documents. Active management costs. The pitch is that the active insight justifies the fee against a low-cost growth index.
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