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Economic & Financial Market Review

Global economic growth continued to slow, but showed signs of resiliency as consumption activity remained strong in developed markets. Geopolitical disruptions, continued supply constraints, and wage pressures were among the key factors keeping global inflation elevated—which fell from 7.7% in June 2022 to 4.2% in May 2023, still well above central banks’ targets. Although headline and core inflation have likely peaked now that oil prices and goods inflation have rolled over, services inflation (a key component of the Consumer Price Index (CPI), and of particular focus for the Federal Reserve) remains very sticky.

Aggressive global central bank tightening paths weighed heavily on global financial conditions, with global policy rates rising by 223 basis points (bps) in the twelve months ending June 2023. In that span, the United States Federal Reserve (Fed) hiked interest rates seven times for a 350 bps total increase, before finally pausing at their June 2023 meeting. However, expectations are that the Fed will resume rate hikes in July as stubborn core inflation remains elevated.

Despite the challenges from hawkish monetary policy and a significant slowdown in manufacturing activities, U.S. jobs data remained strong. As such, U.S. real Gross Domestic Product (GDP) grew an average quarter-over-quarter annualized rate of 1.8% in the four quarters ending March 2023. However, economic activity continues to slow—the U.S. manufacturing Purchasing Manager’s Index (PMI) again reads below 50, as it has done since October 2022¹. Similarly, Global PMI has been below 50 for nine consecutive months and is showing no signs of bottoming out. Emerging markets PMI, on the other hand, continued its streak of six consecutive months above 50.

Despite recent signs of resiliency, global earnings growth flipped negative, with the MSCI All Country World Index (ACWI) trailing twelve months earnings per share (TTM EPS) falling by 15%. The MSCI World Index TTM EPS increased by 4%, much higher than the MSCI Emerging Market Index’s -61%. In developed markets, the MSCI Europe Index (17%) earnings grew at a faster pace than the MSCI U.S. Index (2%). Within the U.S., mid-cap stocks, represented by the S&P Mid-Cap 400 Index, delivered higher earnings growth (5%) than large-cap (3%) and small-cap (1%) stocks, represented by the S&P 500 Index and the S&P Small-Cap 600 Index, respectively. Value stocks, represented by the Russell 1000 Value Index, delivered higher earnings growth (5%) than growth stocks (0%), represented by the Russell 1000 Growth Index. Large tech, represented by NASDAQ 100 Index, delivered -11% earnings growth.

Global equities outperformed global bonds in the last twelve months, with the MSCI ACWI recording a 17% gain year-over-year, while the Bloomberg Global Aggregate Corporate Index gained 2%. Within equities, developed markets (MSCI World Index) outperformed emerging markets (MSCI Emerging Markets Index) by 17%, and the U.S. (MSCI U.S. Index) outperformed developed markets ex-U.S. (MSCI World ex-U.S. Index) by 2%. Among major markets, the MSCI China Index was the worst performer with a 17% loss. The NASDAQ 100 Index was the top outperformer with a 33% gain. The Bloomberg U.S. Treasury Index delivered a 2% loss as the U.S. 10-year Treasury yield rose from 3.01% to 3.84%. Global high yield bonds outperformed investment grade corporate bonds and global treasury bonds by 8% and 13% respectively. The DXY Index, a proxy for U.S. dollar strength, dropped 2%. Commodity prices, represented by the S&P GSCI Total Return Index, fell 14%, and Nymex crude oil dropped significantly from 105.8 to 70.6 USD/ barrel, as the demand-supply dynamic improved.

Looking forward, the reversal in ultra-loose global central bank policy has led to an almost unrecognizable global investment landscape. Unlike the golden era of the past decade, where low inflation and low interest rates were suppressing volatility and lifting asset prices, the higher interest rate environment is now uncovering market strains and raising volatility.

Unless otherwise stated, data sources are Bloomberg, FactSet, and Principal Asset Allocation. Data as of June 30, 2023.

1 In global PMI readings, a number above 50 means that manufacturing activity is expanding, and a number below 50 indicates contraction.

Index descriptions:

MSCI All Country World Index (ACWI) includes large and mid-cap stocks across developed and emerging market countries.

MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries.

MSCI World ex-U.S. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries-- excluding the United States.

MSCI Europe Index captures large and mid-cap representation across 15 Developed Markets (DM) countries in Europe.

MSCI Emerging Markets Index consists of large and mid-cap companies across 24 countries and represents 10% of the world market capitalization. The index covers approximately 85% of the free float-adjusted market capitalization in each of the 24 countries.

MSCI U.S. Index is designed to measure the performance of the large and mid-cap segments of the U.S. market.

NASDAQ 100 Index is a basket of the 100 largest, most actively traded U.S. companies listed on the NASDAQ stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks.

Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe.

Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe.

Bloomberg Global Aggregate Index is a flagship measure of global investment grade debt from 24 local currency markets. This multi-currency benchmark includes treasury, government-related, corporate, and securitized fixed-rate bonds from both developed and emerging markets issuers.

Bloomberg U.S. Treasury Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury.

U.S. Dollar Index (USDX, DXY, DX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies.

Standard & Poor's 500 (S&P 500) Index is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market.

Important Fund Information

The following information applies to all funds shown in the annual report:

The line graphs on the following pages illustrate the growth of a hypothetical $10,000 investment.

Investment results shown represent historical performance and do not guarantee future results. Your investment’s returns and principal values will fluctuate with changes in interest rates and other market conditions so the value, when redeemed, may be worth more or less than original costs. Current performance may be lower or higher than the performance shown. For more information, including the most recent month-end performance, call 1-800-787-1621 or online at www.principalam.com/etf.

* Performance is based on net asset value (NAV) and assumes reinvestment of all dividends and capital gains. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. Since inception returns less than one year are not annualized.

** Performance shown for the benchmark assumes reinvestment of all dividends and distributions. Indices are unmanaged, and individuals cannot invest directly in an index.

Principal Active High Yield ETF

Investment Advisor: Principal Global Investors, LLC


*Average Annual Total Returns± as of June 30, 2023**
	1-Year		5-Year		Since Inception		Inception Date
Principal Active High Yield ETF	10.15	%	3.42	%	4.13	%	7/8/15

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks to provide a high level of current income. The fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in below-investment grade (commonly known as "junk" or “high yield”) fixed income securities, such as bonds and bank loans. It invests in U.S. treasury bills, bonds, and other obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities, investment grade bank loans (also known as senior floating rate interests), and preferred securities.

Security selection positively impacted returns due to the outperformance from overweights to Global Aircraft Leasing Co, Ahern Rentals, United Airlines, and Triumph Group, underweights to CSC Holdings LLC. Sector allocation outperformed due to an underweight to communications, and an overweight to energy.

Underperformance came from overweights to Aruba Investments Inc, Mold-Rite / Valcour Packaging LLC, and Lions Gate Capital Holdings, underweights to Carnival Corporation, and Royal Caribbean Cruises. From a sector perspective, our underweight to capital goods and overweight to consumer cyclicals had a negative impact on performance.

±Prior to September 1, 2021, the objective and strategy of the Fund differed from its current objective and strategy. Accordingly, performance of the Fund for periods prior to September 1, 2021 may not be representative of the performance the Fund would have achieved had the Fund been following its current objective and strategy.

Principal Healthcare Innovators ETF

Investment Advisor: Principal Global Investors, LLC


*Average Annual Total Returns± as of June 30, 2023**
	1-Year		5-Year		Since Inception		Inception Date
Principal Healthcare Innovators ETF	11.49	%	0.98	%	5.68	%	8/19/16

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies in the healthcare sector. It invests significantly in early-stage companies within the healthcare equipment and supplies, pharmaceuticals, biotechnology, and life sciences industries that are not yet consistently profitable.

The Principal Healthcare Innovators ETF underperformed the Index during the year. The healthcare technology and healthcare equipment and supplies industries performed the best within the index. Prometheus Biosciences, Provention Bio, and TG Therapeutics outperformed within the index. Our positioning in Exact Sciences, Sarepta Therapeutics, and Prometheus Biosciences contributed to performance.

The insurance and electronic equipment instruments and components industries underperformed during the year. Babylon Holdings, Tricida, and Gelesis Holdings underperformed within the index. Our positioning in Illumina, Mirati Therapeutics, and Tandem Diabetes Care detracted from performance.

^Effective July 15, 2022, the Fund changed its primary broad-based index for performance comparison purposes to the Russell 2000 Healthcare Index in connection with the Fund's change to an actively managed Fund. Prior to that date, the Fund was passively managed to correspond to the Nasdaq US Health Care Innovators Index. The Nasdaq US Health Care Innovators Index was a custom index which ceased operations on December 1, 2022. Performance shown for the benchmark assumes reinvestment of all dividends and distributions. Indices are unmanaged, and individuals cannot invest directly in an index.

±Prior to July 15, 2022, the objective and strategy of the Fund differed from its current objective and strategy. Accordingly, performance of the Fund for periods prior to that date may not be representative of the performance the Fund would have achieved had the Fund been following its current objective and strategy.

Principal International Adaptive Multi-Factor ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		Since Inception		Inception Date
Principal International Adaptive Multi-Factor ETF	14.50	%	-2.12	%	5/26/21

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 40% of its net assets, plus any borrowings for investment purposes, in securities of foreign companies. It invests in securities regardless of market capitalization size (small, medium or large). For security selection and portfolio construction, Principal Global Investors, LLC ("PGI") uses a proprietary quantitative model. The model is designed to identify and rank equity securities in the MSCI World Ex-U.S. Index (the "index").

The Principal International Adaptive Multi-Factor ETF underperformed the index over the last 12 months. Ten of the eleven sectors within the index posted positive returns, led by information technology and consumer discretionary. UniCredit, Advantest, and Shopify outperformed within the index. Our positioning in Disco, Advantest, and Rheinmetall contributed to performance.

The real estate sector lagged during the year. Credit Suisse Group, Uniper, and Embracer Group underperformed within the index. Our positioning in Bezeq the Israel Telecommuncations Corp, WH Group, and Telefonica detracted from performance.

Principal Investment Grade Corporate Active ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		5-Year		Since Inception		Inception Date
Principal Investment Grade Corporate Active ETF	0.87	%	1.58	%	1.26	%	4/18/18

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks to provide current income and, as a secondary objective, capital appreciation. The fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in investment grade corporate bonds and other fixed income securities at the time of purchase. "Investment grade" securities are rated BBB- or higher by S&P Global Ratings ("S&P Global") or Baa3 or higher by Moody's Investors Service, Inc. ("Moody's") or, if unrated, of comparable quality in the opinion of those selecting such investments.

Sector allocations contributed positively to performance from overweight positions in Banking, Insurance, Communications, Finance Companies, and Transportation. Security selection within Transportation, Consumer Non-Cyclical, Capital Goods, Electric, and REITs were also positive contributors to performance.

Security selection negatively impacted returns due to the underperformance from positions in Credit Suisse and First Republic. For sector allocation, underweight positions in Consumer Cyclical, Energy, Technology, and Basic Industry contributed negatively to performance.

Duration was also a negative contributor.

Principal Millennial Global Growth ETF

Investment Advisor: Principal Global Investors, LLC


*Average Annual Total Returns± as of June 30, 2023**
	1-Year		5-Year		Since Inception		Inception Date
Principal Millennial Global Growth ETF	11.52	%	4.71	%	9.61	%	8/19/16

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund primarily invests in equity securities, focusing on growth equity securities. Under normal circumstances, it invests at least 40% of its net assets in foreign and emerging market securities. The fund invests in equity securities of different market capitalizations (small, medium, or large). The fund will concentrate its investments (invest more than 25% of its assets) in one or more industries within the consumer discretionary sector and one or more industries within the communication services sector.

The Principal Millennial Global Growth ETF underperformed the Index during the year. Ten of the eleven sectors within the index posted positive returns, led by information technology and industrials. Zhongji Innolight, Posco, and Royal Caribbean Group outperformed within the index. Our positioning in Industria de Diseno Textil, Netflix, and Tencent Music Entertainment contributed to performance.

The real estate sector lagged during the year. SVB Financial Group, Signature Bank, and First Republic Bank underperformed within the index, while our positioning in Lufax Holding, Kuaishou Technology, and AT&T detracted from performance.

^Effective July 15, 2022 the fund changed its primary broad-based index to the MSCI ACWI NR USD Index in connection with the fund’s change to an actively managed fund. Prior to that date, the fund was passively managed to correspond to the Nasdaq Global Millennial Opportunity Index. The Nasdaq Global Millennial Opportunity Index was a custom index which ceased operations on December 1, 2022. Performance shown for the benchmark assumes reinvestment of all dividends and distributions. Indices are unmanaged, and individuals cannot invest directly in an index.

± Prior to July 15, 2022, the objective and strategy of the Fund differed from its current objective and strategy. Accordingly, performance of the Fund for periods prior to that date may not be representative of the performance the Fund would have achieved had the Fund been following its current objective and strategy.

Principal Quality ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		5-Year		Since Inception		Inception Date
Principal Quality ETF	19.69	%	12.56	%	13.25	%	3/21/16

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund primarily invests in equity securities. For security selection and portfolio construction, Principal Global Investors, LLC (“PGI”) uses a proprietary quantitative model designed to identify equity securities in the S&P 500 Index or S&P 400 Index that exhibit higher quality, growth potential, and pricing power. The fund invested significantly in one or more industries within the healthcare sector.

The Principal Quality ETF outperformed the Index over the last twelve months. Nine of the eleven sectors in the index posted positive returns, led by information technology and industrials. Royal Caribbean Group, NVIDIA, and Netflix outperformed within the index. Our positioning in Regeneron Pharmaceuticals, IDEXX Laboratories, and Gilead Sciences contributed to performance.

The real estate and utility sectors lagged during the year. Signature Bank, SVB Financial Group, and First Republic Bank underperformed in the index, while our positioning in SVB Financial Group, Waters Corporation, and AbbVie detracted from performance.

Principal Real Estate Active Opportunities ETF

Investment Advisor: Principal Global Investors, LLC

Sub-Advisor: Principal Real Estate Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		Since Inception		Inception Date
Principal Real Estate Active Opportunities ETF	-5.03	%	-6.23	%	5/18/22

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks total return. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in securities of companies principally engaged in the real estate industry at the time of purchase. It invests primarily in equity securities of U.S. companies, including those of small companies. The fund is non-diversified.

Fund performance benefited from investors displaying a preference for property types and stocks with greater economic sensitivity trading at lower valuation multiples. Thus, our overweight to gaming landlords and hotel and resort properties was beneficial. Gaming REITs were aided by healthy underlying casino growth and from inflation protection embedded in many leases. Similarly, hotel and resort owners experienced favorable demand trends, particularly from the leisure segment. Not owning office REITs was the largest contributor to fund performance, despite greater economic sensitivity and lower valuations, as the market remained concerned about work-from-home headwinds and the tightening of lending conditions, which are expected to hit office harder than others.

Avoidance of retail was a top detractor as the sector outperformed on signs of further fundamental recovery combined with lower valuation levels. Stock selection within industrial was also a detractor due the fund’s holdings having elevated exposure to Southern California on fears that market is slowing after years of outsized growth. An overweight to manufactured housing hurt performance due to expense pressures and unease regarding a recent acquisition made by one company that expanded its portfolio into the United Kingdom.

Principal Spectrum Preferred Securities Active ETF

Investment Advisor: Principal Global Investors, LLC

Sub-Advisor: Spectrum Asset Management, Inc.


Average Annual Total Returns* as of June 30, 2023
	1-Year		5-Year		Since Inception		Inception Date
Principal Spectrum Preferred Securities Active ETF	2.68	%	2.37	%	1.76	%	7/10/17

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks to provide current income. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in preferred securities at the time of purchase. Examples of preferred securities include preferred stock, certain depositary receipts, and various types of junior subordinated debt (such debt generally includes the contractual ability to defer payment of interest without accelerating an immediate default event). It concentrates its investments (invests more than 25% of its net assets) in securities in one or more industries within the financial services sector.

In a rising rate environment (U.S. Treasury 2 year yield increased 195 basis points (bps) and the 10 year yield increased 82 bps) the Fund underperformed its ICE BofA U.S. Investment Grade Institutional Capital Securities Index (CIPS) benchmark (100% investment grade), because investment grade outperformed below investment grade paper, which represents mostly regional bank underperformance. Insurance hybrids, Limited Recourse Capital Notes (LRCNs) contributed to performance.

Principal Spectrum Tax-Advantaged Dividend Active ETF

Investment Advisor: Principal Global Investors, LLC

Sub-Advisor: Spectrum Asset Management, Inc.


Average Annual Total Returns* as of June 30, 2023
	1-Year		Since Inception		Inception Date
Principal Spectrum Tax-Advantaged Dividend Active ETF	0.65	%	0.66	%	6/16/20

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks to provide current income. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in dividend-paying securities at the time of purchase. Such securities include, without limitation, preferred securities and capital securities of U.S. and non-U.S. issuers. The fund invests significantly in securities that, at the time of issuance, are eligible to pay dividends that qualify for favorable U.S. federal income tax treatment, such as dividends treated as “qualified dividend income” (“QDI”) and qualified dividends from real estate investment trusts (“REITS”).

In a rising rate environment (U.S. Treasury 2 year yield increased 195 basis points (bps) and the 10 year yield increased 82 bps) the top returning holdings were Canadian Banks-Additional Tier 1 capital (AT1), Limited Recourse Capital Notes (LRCNs) and $1000 par Preferred Stock issued by U.S. Banks.

The largest detractors were $25 par preferred stocks and U.S. Treasury futures.

Principal U.S. Large-Cap Adaptive Multi-Factor ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		Since Inception		Inception Date
Principal U.S. Large-Cap Adaptive Multi-Factor ETF	16.28	%	4.05	%	5/19/21

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. companies with large market capitalizations at the time of purchase. As a result, changes in the value of a single investment could cause greater fluctuations in its share price than would occur in a more diversified fund. The fund’s strategies may result in the active and frequent trading of its portfolio securities. It is non-diversified.

The Principal U.S. Large-Cap Adaptive Multi-Factor ETF underperformed the index over the last 12 months. Nine of the eleven sectors in the index posted positive returns, led by information technology and industrials. Royal Caribbean Group, NVIDIA, and Netflix outperformed within the index. Our positioning in PulteGroup, Regeneron Pharmaceuticals, and W.W. Grainger contributed to performance.

The real estate and utility sectors lagged during the year. Signature Bank, SVB Financial Group, and First Republic Bank underperformed in the index, while our positioning in First Republic Bank, Tyson Foods, and Advance Auto Parts detracted from performance.

Principal U.S. Mega-Cap ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		5-Year		Since Inception		Inception Date
Principal U.S. Mega-Cap ETF	21.39	%	13.05	%	12.22	%	10/11/17

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. companies with very large ("mega") market capitalizations at the time of purchase. For this fund, companies with mega capitalizations are those with market capitalizations in the top 50th percentile of the S&P 500 Index at the time of purchase.

The Principal U.S. Mega Cap ETF outperformed the Index over the last 12 months. Nine of the eleven sectors in the index posted positive returns, led by information technology and industrials. Royal Caribbean Group, NVIDIA, and Netflix outperformed within the index. Our positioning in NVIDIA, Meta Platforms, and Broadcom contributed to performance.

The real estate and utility sectors lagged during the year. Signature Bank, SVB Financial Group, and First Republic Bank underperformed in the index, while our positioning in Pfizer, Danaher, and UnitedHealth Group detracted from performance.

Principal U.S. Small-Cap Adaptive Multi-Factor ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		Since Inception		Inception Date
Principal U.S. Small-Cap Adaptive Multi-Factor ETF	9.22	%	-1.39	%	5/19/21

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. companies with small market capitalizations at the time of purchase. For security selection and portfolio construction, Principal Global Investors, LLC ("PGI") uses a proprietary quantitative model. The fund’s strategies may result in the active and frequent trading of its portfolio securities.

The Principal U.S. Small-Cap Adaptive Multi-Factor ETF underperformed the index over the last 12 months. Six of the eleven sectors within the index posted positive returns, led by industrials and information technology. E.l.f. Beauty, Circor International, and Axcelis Technologies outperformed within the index. Our positioning in Olympic Steel, Green Brick Partners, and Comfort Systems contributed to performance.

The financials and real estate sectors lagged during the year. HomeStreet, Nektar Therapeutics, and Bed Bath and Beyond underperformed in the index, while our positioning in Genesco, Ameris Bancorp, and Mercer International detracted from performance.

Principal U.S. Small-Cap ETF

Investment Advisor: Principal Global Investors, LLC


*Average Annual Total Returns± as of June 30, 2023**
	1-Year		5-Year		Since Inception		Inception Date
Principal U.S. Small-Cap ETF	13.59	%	6.41	%	9.55	%	9/21/16

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. companies with small market capitalizations at the time of purchase. For this fund, companies with small market capitalizations are those with market capitalizations within the range of companies comprising the Russell 2000 Index.

The Principal U.S. Small-Cap ETF outperformed the Index during the year. Seven of the eleven sectors within the index posted positive returns, led by industrial and energy. Applied Digital, Prometheus Biosciences, and Super Micro Computer outperformed within the index. Our positioning in Super Micro Computer, Axcelis Technologies, and Atlas Air Worldwide Holdings contributed to performance.

The financials and communication services sectors lagged during the year. Diebold Nixdorf, Starry Group, and Babylon Holdings underperformed in the index, while our positioning in Associated Banc-Corp, United Community Banks, and Spectrum Brands Holdings detracted from performance.

^Effective July 8, 2022, the Fund changed its primary broad-based index to the Russell 2000 Index in connection with the Fund's change to an actively managed Fund. Prior to that date, the Fund was passively managed to correspond to the Nasdaq US SmallCap Select Leaders Index. The Nasdaq US SmallCap Select Leaders Index was a custom index which ceased operations on December 1, 2022. Performance shown for the benchmark assumes reinvestment of all dividends and distributions. Indices are unmanaged, and individuals cannot invest directly in an index.

± Prior to July 8, 2022, the objective and strategy of the Fund differed from its current objective and strategy. Accordingly, performance of the Fund for periods prior to that date may not be representative of the performance the Fund would have achieved had the Fund been following its current objective and strategy.

Principal Value ETF

Investment Advisor: Principal Global Investors, LLC


Average Annual Total Returns* as of June 30, 2023
	1-Year		5-Year		Since Inception		Inception Date
Principal Value ETF	10.45	%	8.08	%	9.98	%	3/21/16

What contributed to or detracted from Fund performance during the fiscal year?

The investment seeks long-term growth of capital. Under normal circumstances, the fund primarily invests in equity securities, focusing on value stocks. For security selection and portfolio construction, Principal Global Investors, LLC ("PGI") uses a proprietary quantitative model designed to identify equity securities of mid- to large-capitalization companies in the S&P 500 Index that exhibit higher degrees of shareholder yield (meaning how much money a company distributes to shareholders through dividends and share repurchases).

The Principal Value ETF underperformed the Index over the last twelve months. Nine of the eleven sectors in the index posted positive returns, led by information technology and industrials. Royal Caribbean Group, NVIDIA, and Netflix outperformed within the index. Our positioning in Cardinal Health, Ross Stores, and Omnicom Group contributed to performance.

The real estate and utility sectors lagged during the year. Signature Bank, SVB Financial Group, and First Republic Bank underperformed in the index, while our positioning in Zions Bancorporation, Organon, and Sealed Air detracted from performance.


Statements of Assets and Liabilities
Principal Exchange-Traded Funds
June 30, 2023

								Principal
					Principal			International
		Principal			Healthcare			Adaptive
		Active High			Innovators			Multi-Factor
		Yield ETF			ETF			ETF
Investment in securities — at cost	$	111,143,837		$	78,304,030		$	15,504,589
Investment in affiliated funds — at cost	$	3,219,013		$	1,429,219			$	—
Foreign currency — at cost	$	2		$	—			$	9,549
Assets
Investment in securities — at value	$	103,948,260	^(a)	$	54,006,740	^(a)	$	15,571,957
Investment in affiliated funds — at value		3,219,013			1,429,219				—
Foreign currency — at value		2			—				9,570
Cash		8,953			6,570				30
Receivables:
Dividends		41,619			539			79,427
Interest		1,606,850			—				—
Securities lending income		3,205			9,313				—
Investment securities sold		5,869			—				—
Total Assets		108,833,771			55,452,381			15,660,984

Liabilities
Accrued management and investment advisory fees		33,060			19,125				3,060
Payables:
Investment securities purchased		487,641			6,692				—
Collateral obligation on securities loaned — at value		3,219,013			1,429,219				—
Total Liabilities		3,739,714			1,455,036				3,060
Net Assets Applicable to Outstanding Shares	$	105,094,057		$	53,997,345		$	15,657,924

Net Assets Consist of:
Capital shares and additional paid-in-capital	$	128,387,124		$	100,760,041		$	24,545,834
Total distributable earnings (accumulated loss)		(23,293,067	)		(46,762,696	)		(8,887,910		)
Total Net Assets	$	105,094,057		$	53,997,345		$	15,657,924

Net Asset Value Per Share:
Net assets	$	105,094,057		$	53,997,345		$	15,657,924
Shares issued and outstanding		5,750,000			1,500,001			700,001
Net asset value per share	$	18.28		$	36.00			$	22.37

^(a)Includes fair market value of securities loaned, see 'Securities Lending' in Notes to Financial Statements.

See accompanying notes.


Statements of Assets and Liabilities
Principal Exchange-Traded Funds
June 30, 2023

		Principal
		Investment			Principal
		Grade			Millennial
		Corporate			Global Growth			Principal
		Active ETF			ETF ^(a)			Quality ETF
Investment in securities — at cost	$	49,258,885		$	37,576,575		$	32,981,210
Investment in affiliated funds — at cost	$	384,880		$	721,539		$	—
Assets
Investment in securities — at value	$	46,660,338	^(b)	$	29,964,461	^(b)	$	36,681,051
Investment in affiliated funds — at value		384,880			721,539			—
Cash		625			—			—
Deposits with counterparty		51,410			—			—
Receivables:
Dividends		3,642			27,442			18,994
Interest		476,333			—			—
Securities lending income		362			865			—
Total Assets		47,577,590			30,714,307			36,700,045

Liabilities
Accrued management and investment advisory fees		7,241			9,174			4,366
Payables:
Variation margin on financial derivative instruments		11,273			—			—
Collateral obligation on securities loaned — at value		384,880			721,539			—
Total Liabilities		403,394			730,713			4,366
Net Assets Applicable to Outstanding Shares	$	47,174,196		$	29,983,594		$	36,695,679

Net Assets Consist of:
Capital shares and additional paid-in-capital	$	67,690,851		$	46,997,698		$	45,577,128
Total distributable earnings (accumulated loss)		(20,516,655	)		(17,014,104	)		(8,881,449	)
Total Net Assets	$	47,174,196		$	29,983,594		$	36,695,679

Net Asset Value Per Share:
Net assets	$	47,174,196		$	29,983,594		$	36,695,679
Shares issued and outstanding		2,300,001			700,001			650,001
Net asset value per share	$	20.51		$	42.83		$	56.45

^(a)	Effective July 15, 2022, Principal Millennials ETF changed its name to Principal Millennial Global Growth ETF.
^(b)	Includes fair market value of securities loaned, see 'Securities Lending' in Notes to Financial Statements.


	See accompanying notes.


	Statements of Assets and Liabilities
	Principal Exchange-Traded Funds
	June 30, 2023

						Principal			Principal
		Principal Real				Spectrum			Spectrum Tax-
		Estate Active				Preferred			Advantaged
		Opportunities				Securities			Dividend
			ETF			Active ETF			Active ETF
Investment in securities — at cost		$	5,890,998		$	610,666,167		$	21,601,475
Investment in affiliated funds — at cost		$	—		$	3,970,623		$	—
Assets
Investment in securities — at value		$	5,419,779		$	566,324,751	^(a)	$	19,869,012
Investment in affiliated funds — at value			—			3,970,623			—
Cash			—			—			6,165
Deposits with counterparty			—			—			25,397
Receivables:
Dividends			26,161			66,830			13,098
Interest			—			6,468,798			177,544
Securities lending income			—			5,858			—
Fund shares sold			—			3,373,271			—
	Total Assets		5,445,940			580,210,131			20,091,216

Liabilities
Accrued management and investment advisory fees			2,852			253,279			9,867
Collateral obligation on securities loaned — at value			—			3,970,623			—
	Total Liabilities		2,852			4,223,902			9,867
Net Assets Applicable to Outstanding Shares		$	5,443,088		$	575,986,229		$	20,081,349

Net Assets Consist of:
Capital shares and additional paid-in-capital		$	5,934,393		$	641,037,630		$	23,199,790
Total distributable earnings (accumulated loss)			(491,305	)		(65,051,401	)		(3,118,441	)
	Total Net Assets	$	5,443,088		$	575,986,229		$	20,081,349

Net Asset Value Per Share:
Net assets		$	5,443,088		$	575,986,229		$	20,081,349
Shares issued and outstanding			240,001			34,150,005			1,150,001
Net asset value per share		$	22.68		$	16.87		$	17.46

^(a)	Includes fair market value of securities loaned, see 'Securities Lending' in Notes to Financial Statements.


	See accompanying notes.


	Statements of Assets and Liabilities
	Principal Exchange-Traded Funds
	June 30, 2023

		Principal U.S.
			Small-Cap			Principal Value
			ETF ^(a)			ETF
Investment in securities — at cost		$	195,420,307		$	37,034,433
Investment in affiliated funds — at cost		$	847,907		$	—
Assets
Investment in securities — at value		$	201,106,953	^(b)	$	37,269,306
Investment in affiliated funds — at value			847,907			—
Receivables:
Dividends			157,681			75,158
Securities lending income			271			—
Investment securities sold			87,374			—
	Total Assets		202,200,186			37,344,464

Liabilities
Accrued management and investment advisory fees			61,008			4,482
Collateral obligation on securities loaned — at value			847,907			—
	Total Liabilities		908,915			4,482
Net Assets Applicable to Outstanding Shares		$	201,291,271		$	37,339,982

Net Assets Consist of:
Capital shares and additional paid-in-capital		$	374,832,931		$	65,138,079
Total distributable earnings (accumulated loss)			(173,541,660	)		(27,798,097	)
	Total Net Assets	$	201,291,271		$	37,339,982

Net Asset Value Per Share:
Net assets		$	201,291,271		$	37,339,982
Shares issued and outstanding			4,750,001			900,001
Net asset value per share		$	42.38		$	41.49

^(a)	Effective June 30, 2023, Principal U.S. Small-Cap Multi-Factor ETF changed its name to Principal U.S. Small-Cap ETF.
^(b)	Includes fair market value of securities loaned, see 'Securities Lending' in Notes to Financial Statements.

See accompanying notes.


Statements of Operations
Principal Exchange-Traded Funds
Year Ended June 30, 2023

		Principal
	Investment				Principal
		Grade			Millennial
		Corporate			Global Growth			Principal
	Active ETF				ETF ^(a)			Quality ETF
Net Investment Income (Loss)
Income:
Dividend	$	126,440		$	530,849		$	438,574
Withholding tax		—			(19,289	)		(357	)
Interest		3,107,058			—			—
Securities lending — net		2,581			19,157			—
Total Income		3,236,079			530,717			438,217

Expenses:
Management and investment advisory fees		168,052			103,972			49,652
Total Expenses		168,052			103,972			49,652
Net Investment Income (Loss)		3,068,027			426,745			388,565

Net Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investment transactions		(7,965,073	)		(567,457	)		(235,438	)
In-kind redemptions		(56,221,905	)		—			1,588,878
Foreign currency transactions		—			(609	)		—
Futures contracts		(256,390	)		—			—
Change in unrealized appreciation (depreciation) of:
Investments		65,372,706			3,219,051			4,996,312
Futures contracts		15,608			—			—
Foreign currency transactions		—			459			—
Net Realized and Unrealized Gain (Loss)		944,946			2,651,444			6,349,752
Net Increase (Decrease) in Net Assets Resulting from Operations	$	4,012,973		$	3,078,189		$	6,738,317

^(a)	Effective July 15, 2022, Principal Millennials ETF changed its name to Principal Millennial Global Growth ETF.

See accompanying notes.


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


		Principal U.S. Small-Cap ETF ^(a)
		Year ended			Year ended
		June 30, 2023			June 30, 2022
Operations
Net investment income (loss)	$	4,061,837		$	15,920,622
Net realized gain (loss)		(63,556,738	)		179,835,384
Change in unrealized appreciation (depreciation)		112,599,822			(330,521,307	)
Net Increase (Decrease) in Net Assets Resulting from Operations		53,104,921			(134,765,301	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(6,213,838	)		(17,721,353	)
Total Dividends and Distributions		(6,213,838	)		(17,721,353	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		(461,864,330	)		(859,252,127	)
Total Increase (Decrease) in Net Assets		(414,973,247	)		(1,011,738,781	)

Net Assets
Beginning of year		616,264,518			1,628,003,299
End of year	$	201,291,271		$	616,264,518

Capital Share Transactions
Dollars:
Sold	$	16,238,484		$	472,542,832
Redeemed		(478,102,814	)		(1,331,794,959	)
Net Increase (Decrease)	$	(461,864,330	)	$	(859,252,127	)
Shares:
Sold		400,000			10,150,000
Redeemed		(11,850,000	)		(28,650,000	)
Net Increase (Decrease)		(11,450,000	)		(18,500,000	)

^(a)Effective June 30, 2023, Principal U.S. Small-Cap Multi-Factor ETF changed its name to Principal U.S. Small-Cap ETF.

See accompanying notes.

Notes to Financial Statements Principal Exchange-Traded Funds June 30, 2023

1. Organization

The Principal Exchange-Traded Funds (the “Trust”) is a statutory trust organized under the laws of the State of Delaware in 2013 and is authorized to have multiple series or portfolios. The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently consists of fourteen series, Principal Active High Yield ETF, Principal Healthcare Innovators ETF, Principal International Adaptive Multi-Factor ETF, Principal Investment Grade Corporate Active ETF, Principal Millennial Global Growth ETF, Principal Quality ETF, Principal Real Estate Active Opportunities ETF, Principal Spectrum Preferred Securities Active ETF, Principal Spectrum Tax-Advantaged Dividend Active ETF, Principal U.S. Large-Cap Adaptive Multi-Factor ETF, Principal U.S. Mega-Cap ETF, Principal U.S. Small-Cap Adaptive Multi-Factor ETF, Principal U.S. Small-Cap ETF and Principal Value ETF (collectively, the “Funds” and individually, a “Fund”). The shares of the Funds are referred to herein as “Shares”.

Each of the Funds is an investment company and applies specialized accounting and reporting under Accounting Standards Codification Topic 946, Financial Services - Investment Companies. The Funds have not provided financial support and are not contractually required to provide financial support to any investee.

The Trust issues and redeems Shares at net asset value (“NAV”) only with Authorized Participants (“APs”) and only in aggregations of 50,000 Shares with the exception of Principal International Adaptive Multi-Factor ETF and Principal Real Estate Active Opportunities ETF which are issued and redeemed in aggregations of 100,000 shares and 20,000 shares, respectively (each a “Creation Unit” or multiples thereof “Creation Unit Aggregations”), which is subject to change. The Trust issues and redeems Creation Unit Aggregations in exchange for portfolio securities and/or cash, plus a fixed and/or variable transaction fee.

Shares trade on exchanges at market prices that may be below, at, or above NAV. Shares are listed on the respective exchanges as listed below:


Fund	Exchange
Principal Active High Yield ETF	NYSE Arca
Principal Healthcare Innovators ETF	The Nasdaq Stock Market LLC
Principal International Adaptive Multi-Factor ETF	Cboe BZX Exchange, Inc.
Principal Investment Grade Corporate Active ETF	NYSE Arca
Principal Millennial Global Growth ETF	The Nasdaq Stock Market LLC
Principal Quality ETF	The Nasdaq Stock Market LLC
Principal Real Estate Active Opportunities ETF	NYSE Arca
Principal Spectrum Preferred Securities Active ETF	NYSE Arca
Principal Spectrum Tax-Advantaged Dividend Active ETF	NYSE Arca
Principal U.S. Large-Cap Adaptive Multi-Factor ETF	Cboe BZX Exchange, Inc.
Principal U.S. Mega-Cap ETF	The Nasdaq Stock Market LLC
Principal U.S. Small-Cap Adaptive Multi-Factor ETF	Cboe BZX Exchange, Inc.
Principal U.S. Small-Cap ETF	The Nasdaq Stock Market LLC
Principal Value ETF	The Nasdaq Stock Market LLC

Effective September 1, 2021, Principal Active Income ETF changed its name to Principal Active High Yield ETF. In addition to the name change, the Board of Trustees authorized a 2 for 1 stock split effective after the close of trading on August 30, 2021. The stock split has been retroactively reflected on the Financial Highlights.

Notes to Financial Statements Principal Exchange-Traded Funds June 30, 2023

1. Organization (continued)

Effective October 29, 2021, the following Funds changed their names as shown below:


Previous Name	New Name
Principal Healthcare Innovators Index ETF	Principal Healthcare Innovators ETF
Principal Millennials Index ETF	Principal Millennials ETF

Principal Real Estate Active Opportunities ETF initial investment and commencement of operations was May 18, 2022.

Effective July 8, 2022 and July 15, 2022, Principal U.S. Small-Cap Multi-Factor ETF and Principal Healthcare Innovators ETF changed from passively managed funds to actively managed funds, respectively.

Effective July 15, 2022, Principal Millennials ETF changed its name to Principal Millennial Global Growth ETF and changed from passively managed fund to actively managed fund.

Effective June 30, 2023, Principal U.S. Small-Cap Multi-Factor ETF changed its name to Principal U.S. Small-Cap ETF.

2. Significant Accounting Policies

The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Funds:

Security Valuation. The Funds may invest in series of Principal Funds, Inc. and other investment funds, which may include money market funds and other registered open-end investment companies. Investments in registered open-end investment companies are valued at the respective fund's closing NAV per share on the day of valuation.

The Funds value securities for which market quotations are readily available at fair value, which is determined using the last reported sale price. If no sales are reported, as is regularly the case for some securities traded over-the-counter (“OTC”), securities are valued using the last reported bid price or an evaluated bid price provided by a pricing service. Pricing services use modeling techniques that incorporate security characteristics such as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, other yield and risk factors and other market conditions to determine an evaluated bid price. When reliable market quotations are not considered to be readily available, which may be the case, for example, with respect to restricted securities, certain debt securities, preferred stocks, and foreign securities, the investments are valued at their fair value as determined in good faith by the Principal Global Investors, LLC (“the Advisor”) under procedures established and periodically reviewed by the Board of Trustees.

The value of foreign securities used in computing the NAV per share is generally determined as of the close of the foreign exchange where the security is principally traded. Events that occur after the close of the applicable foreign market or exchange but prior to the calculation of the Fund’s NAV are reflected in the Fund’s NAV and these securities are valued at fair value. Many factors, provided by independent pricing services, are reviewed in the course of making a good faith determination of a security's fair value including, but not limited to, price movements in American Depository Receipts (“ADRs”), futures contracts, industry indices, general indices, and foreign currencies.

To the extent the Funds invest in foreign securities listed on foreign exchanges which trade on days on which the Funds do not determine NAV, for example, weekends and other customary national U.S. holidays, the Fund’s NAV could be significantly affected on days when shares are not able to be issued or redeemed by APs.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

2. Significant Accounting Policies (continued)

Certain securities issued by companies in emerging market countries may have more than one quoted valuation at any given point in time, sometimes referred to as a “local” price and a “premium” price. The premium price is often a negotiated price, which may not consistently represent a price at which a specific transaction can be effected. It is the policy of the Funds to value such securities at prices at which it is expected those shares may be sold, and the Advisor, or any sub-advisor, is authorized to make such determinations subject to such oversight by the Board of Trustees, as may occasionally be necessary.

Currency Translation. Foreign holdings are translated to U.S. dollars using the exchange rate at the daily close of the New York Stock Exchange. The identified cost of the Funds’ holdings is translated at approximate rates prevailing when acquired. Income and expense amounts are translated at approximate rates prevailing when received or paid, with daily accruals of such amounts reported at approximate rates prevailing at the date of valuation. Since the carrying amount of the foreign securities is determined based on the exchange rate and market values at the close of the period, it is not practicable to isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities during the period.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between trade and settlement dates on security transactions, and the difference between the amount of dividends, interest income, interest expense, and foreign withholding taxes recorded on the books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies arise from changes in the exchange rate relating to assets and liabilities, other than investments in securities, purchased and held in non-U.S. denominated currencies.

The following Funds held securities denominated in foreign currencies that exceeded 5% of net assets of the respective Fund as of June 30, 2023:


Principal International Adaptive Multi-Factor ETF
Australian Dollar	6.51	%
British Pound Sterling	12.25	%
Canadian Dollar	10.03	%
Euro	31.20	%
Japanese Yen	20.27	%
Swiss Franc	7.17	%
Principal Millennial Global Growth ETF
Euro	13.96	%

Income and Investment Transactions. The Funds record investment transactions on a trade date basis. Trade date for senior floating rate interests purchased in the primary market is considered the date on which the loan allocations are determined. Trade date for senior floating rate interests purchased in the secondary market is the date on which the transaction is entered into. The identified cost basis has been used in determining the net realized gain or loss from investment transactions and unrealized appreciation or depreciation of investments. The Funds record dividend income on the ex-dividend date, except dividend income from foreign securities whereby the ex-dividend date has passed; such dividends are recorded as soon as the Funds are informed of the ex-dividend date. Interest income is recognized on an accrual basis. Payment in kind ("PIK") income is computed on the value of the securities received at the contractual rate specified in each loan agreement. Discounts and premiums on securities are accreted/amortized, respectively, on the level yield method over the expected lives of the respective securities. Callable debt securities purchased at a premium are amortized to the earliest call date and to the callable amount, if other than par.

Distributions from Real Estate Investment Trusts ("REITs") may be characterized as ordinary income, capital gain, or a return of capital to the Funds. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates are used in reporting the character of income and distributions for financial statement purposes. Principal Real Estate Active Opportunities ETF receives substantial distributions from holdings in REITs.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

2. Significant Accounting Policies (continued)

Capital Share Transactions. Capital shares are issued and redeemed by the Funds only in a Creation Unit or Creation Unit Aggregations. Except when aggregated into at least a Creation Unit, Shares are not redeemable.

The consideration for the purchase of a Creation Unit or Creation Unit Aggregations of a Fund generally consists of a basket of cash and/or securities that the Fund specifies each business day. To offset transfer and other transaction costs associated with the issuance and redemption of Creation Unit Aggregations, APs are subject to standard creation and redemption transaction fees.

Expenses. For all Funds, a unitary investment management and advisory fee is charged. The Advisor covers all operating expenses through the investment management and advisory fee with the exception of 12b-1 fees, brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses and other extraordinary expenses, if applicable.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders of the Funds are recorded on the ex-dividend date. Dividends and distributions to shareholders from net investment income and net realized gain from investments and foreign currency transactions are determined in accordance with federal tax regulations, which may differ from U.S. GAAP. These differences are primarily due to differing treatments for amortization of premiums and discounts, futures contracts, net operating losses, sales of passive foreign investment companies, partnership investments, foreign currency transactions, losses deferred due to wash sales, tax straddles, mortgage-backed securities, certain preferred securities, redemptions-in-kind, REITs, utilization of earnings and profits distributed to shareholders on redemption of Shares, and limitations imposed by Sections 381-384 of the Internal Revenue Code (“IRC”). Permanent book and tax basis differences are reclassified within the capital accounts based on federal tax-basis treatment; temporary differences do not require reclassification. To the extent dividends and distributions exceed current and accumulated earnings and profits for federal income tax purposes, they are reported as return of capital distributions.

Federal Income Taxes. No provision for federal income taxes is considered necessary because the Funds each intend to qualify as a “regulated investment company” under the IRC and they intend to distribute each year substantially all of their net investment income and realized capital gains to shareholders.

Management evaluates tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether it is “more likely than not” that each tax position would be sustained upon examination by a taxing authority based on the technical merits of their position. Tax positions not deemed to meet the “more likely than not” threshold would be recorded as a tax benefit or expense in the current year. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as tax expense on the Statements of Operations. During the year ended June 30, 2023, the Funds did not record any such tax benefit or expense in the accompanying financial statements. The statute of limitations remains open for the last three years, once a return is filed. No examinations are in progress at this time.

Foreign Taxes. Certain Funds are subject to foreign income taxes imposed by certain countries in which they invest. Foreign income taxes are accrued by the Funds as a reduction of income. These amounts are shown as withholding tax on the Statements of Operations.

Recent Accounting Pronouncements. In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. The guidance is applicable to contracts referencing London Inter-Bank Offered Rate (“LIBOR”) or another reference rate that is expected to be discontinued due to reference rate reform. The ASU is effective as of March 12, 2020 and generally can be applied through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which updates and clarifies ASU No. 2020-04. The amendments in this ASU defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024.

Management expects these ASUs will not have a material impact on the Funds' financial statements.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

2. Significant Accounting Policies (continued)

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820); Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which provides clarifying guidance that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Management expects the ASU will not have a material impact on the Funds' financial statements.

Tracking Basket Structure. Principal Real Estate Active Opportunities ETF operates pursuant to an exemptive order from the Securities and Exchange Commission (“SEC”) and does not publicly disclose its complete portfolio holdings each business day. Instead, the Fund publishes each business day on its website a “Tracking Basket” which is designed to closely track the daily performance of the Fund but is not the Fund's actual portfolio. The Fund's Tracking Basket structure may affect the price at which shares of the Fund trade in the secondary market. Although the Tracking Basket is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the Fund at or close to the Fund's NAV, there is a risk that market prices will vary significantly from NAV.

3. Operating Policies

Contingent Convertible Securities (“CoCos”). As footnoted in the Schedules of Investments, certain of the Funds invest in contingent convertible securities. CoCos are hybrid debt securities that may convert into equity or have their principal written down upon the occurrence of certain “triggers”. Although a contingent convertible security's equity conversion and principal write-down features are tailored to the particular issuing banking institution and its regulatory requirements, triggers are generally linked to regulatory capital thresholds or regulatory actions calling into question such institution's continued viability as a going-concern. CoCos may have no stated maturity and fully discretionary coupons, which means coupon payments can be canceled at the issuing banking institution's discretion or at the request of the relevant regulatory authority without causing a default. To provide the appropriate regulatory capital treatment, CoCos are usually issued in the form of subordinated debt instruments that rank junior to the claims of holders of more senior obligations in the event of the issuer's liquidation. If CoCos are converted into equity securities due to a trigger event, holders will be further subordinated. The future value of CoCos is unpredictable and is influenced by many factors including, without limitation: the creditworthiness of the issuer and/or fluctuations in such issuer's applicable capital ratios; supply and demand for CoCos; general market conditions and available liquidity; and economic, financial and political events that affect the issuer, its particular market or the financial markets in general.

Due to these features, CoCos may have substantially greater risk than other securities in times of financial stress. Because of the uncertainty regarding whether a conversion event will occur, it may be difficult to predict when, if at all, a contingent convertible security will be converted to equity, and a fund may suffer losses as a result. If the trigger level is breached, the issuer's decision to write down, write off or convert a contingent convertible security may result in the fund's complete loss on an investment in CoCos with no chance of recovery even if the issuer remains in existence.

Cross Trades. The Funds may engage in cross trades. A cross trade is a purchase or sale transaction between affiliated portfolios executed directly or through an intermediary. Mutual funds and other managed portfolios may be considered affiliated if they have a common investment advisor, so a fund may be considered affiliated with any portfolio for which the fund's sub-advisor acts as an investment advisor. Such transactions are permissible provided that the conditions of Rule 17a-7 under the 1940 Act are satisfied. For the year ended June 30, 2023, the Funds did not engage in cross trades.

Deposits with Counterparty. Cash pledged as collateral is reflected as an asset on the Statements of Assets and Liabilities as deposits with counterparty. There are a variety of security types which require varying levels of pledged collateral. Customer account agreements govern cleared derivatives transactions such as futures contracts. Such transactions require posting of initial margin as determined by each relevant clearing agency which is segregated in an account at a futures commission merchant (“FCM”) registered with the Commodity Futures Trading Commission. As of June 30, 2023, deposits with counterparty for Principal Investment Grade Corporate Active ETF and Principal Spectrum Tax-Advantaged Dividend Active ETF were $51,410 and $25,397 respectively.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

3. Operating Policies (continued)

Futures Contracts. The Funds are subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The Funds may enter into futures contracts to hedge against changes in, or to gain exposure to, change in the value of equities, interest rates and foreign currencies. Initial margin deposits are made by cash deposits or segregation of specific securities as may be required by the exchange on which the transaction was conducted. Pursuant to the contracts, typically a Fund agrees to receive from or pay to the broker, an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the Funds as variation margin receivable or payable on financial derivative instruments. For those contracts where daily variation margin payments are not received from or paid to the broker, the cumulative unrealized gains or losses are included in variation margin receivable or payable on financial derivative instruments. Futures contracts are marked to market daily at the closing settlement price or in the absence of such a price, the most recent quoted bid price. If there are no quotations available, the security is valued at the last available closing settlement price. During the period the futures contracts are open, daily changes in the fair value of the contracts are recognized as unrealized gains or losses. These unrealized gains or losses are included as a component of net unrealized appreciation (depreciation) of investments on the Statements of Assets and Liabilities. When the contracts are closed, the Funds recognize a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s cost basis in the contract. There is minimal counterparty credit risk to the Funds because futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

Long and short U.S. Treasury futures contracts are used to obtain interest rate exposure in order to manage duration of the Principal Investment Grade Corporate Active ETF. The notional values of the futures contracts will vary in accordance with changing duration of this Fund.

Illiquid Securities. Illiquid securities generally cannot be sold or disposed of in the ordinary course of business (within seven calendar days) at approximately the value at which each of the Funds has valued the investments. This may have an adverse effect on each of the Funds’ ability to dispose of particular illiquid securities at fair value and may limit each of the Funds’ ability to obtain accurate market quotations for purposes of valuing the securities.

Indemnification. In a normal course of business, the Funds enter into contracts that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve potential future claims against the Funds that have not yet occurred. Based on management's experience, the risk of loss would be remote.

Restricted Securities. Certain of the Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult.

Securities Lending. As footnoted in the Schedules of Investments, certain of the Funds may lend portfolio securities to approved brokerage firms to earn additional income. The Funds receive collateral, in the form of cash, against the loaned securities. During the period of the loan, the borrower must maintain collateral in an amount not less than 102% of the market value of the domestic and foreign fixed income loaned securities and 105% of the market value of the foreign equity loaned securities. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. The transactions are accounted for as secured borrowings and the remaining contractual maturity is overnight and continuous for all securities. The cash collateral received is usually invested in a SEC-registered money market mutual fund and the Funds could realize a loss on such investments. Further, the Funds could experience a delay in recovering their securities and possible loss of income or value if the borrower fails to return them. Securities lending income, net of related fees, is shown on the Statements of Operations.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

3. Operating Policies (continued)

Senior Floating Rate Interests. The Fund may invest in senior floating rate interests (bank loans). Senior floating rate interests hold the most senior position in the capital structure of a business entity (the “Borrower”), are typically secured by specific collateral and have a claim on the assets and/or stock of the Borrower that is senior to that held by subordinated debtholders and stockholders of the Borrower. Senior floating rate interests are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the senior floating rate interest. Borrowers of senior floating rate interests are typically rated below investment grade, which means they are more likely to default than investment-grade loans. A default could lead to non-payment of income which would result in a reduction of income to the Fund and there can be no assurance that the liquidation of any collateral would satisfy the Borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated.

Senior floating rate interests pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank, LIBOR, Secured Overnight Financing Rate (“SOFR”), or a similar reference rate.

Senior floating rate interests generally are subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for the Borrower to repay, prepayments of senior floating rate interests may occur. As a result, the actual remaining maturity of senior floating rate interests may be substantially less than stated maturities shown in the Schedule of Investments.

In connection with the senior floating rate interests, the Fund may also enter into unfunded loan commitments. All or a portion of the loan commitments may be unfunded. The Fund is obligated to fund these commitments at the Borrower’s discretion. Therefore, the Fund must have funds sufficient to cover its contractual obligation. Unfunded loan commitments are marked to market daily and the unrealized gain or loss is shown as a separate line item called unrealized gain or loss on unfunded commitments on the statements of assets and liabilities and included in the net change in unrealized appreciation/(depreciation) of investments on the statements of operations, as applicable. As of year end, the unfunded loan commitments are categorized as Level 2 within the disclosure hierarchy. As of June 30, 2023, there were no unfunded loan commitments.

Underlying Funds. An underlying fund may experience relatively large redemptions or purchases as the investee fund periodically reallocates or rebalances its assets. These transactions may accelerate the realization of taxable income if sales of portfolio securities result in gains and could increase transaction costs.

The Advisor is the advisor to Principal Funds, Inc., Principal Variable Contracts Funds, Inc. (affiliates of the Advisor) and other asset allocation programs. The Advisor is committed to minimizing the potential impact of underlying fund risk to the extent consistent with pursuing the investment objectives of the investee funds which it manages. Each may face conflicts of interest in fulfilling its responsibilities to all such funds.

As of June 30, 2023, series of Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. owned the following percentages, in aggregate, of the outstanding Shares of the Funds listed below:


	Total Percentage of
Fund	Outstanding Shares Owned
Principal Active High Yield ETF	38.16	%
Principal U.S. Mega-Cap ETF	82.39
Principal U.S. Small-Cap ETF	75.79

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

3. Operating Policies (continued)

U.S. Government Agencies or Government-Sponsored Enterprises. Certain of the Funds may invest in U.S. Government agencies or government-sponsored enterprises. U.S. Government securities are obligations of, and in certain cases, guaranteed by, the U.S. Government or its agencies. The U.S. Government does not guarantee the NAV of the Funds’ Shares. Some U.S. Government securities such as treasury bills, notes and bonds, and securities guaranteed by the Government National Mortgage Association (“GNMA”) are supported by the full faith and credit of the U.S. Government. Other securities, such as those of the Federal Home Loan Bank, are supported by the right of the issuer to borrow from the U.S. Department of the Treasury. Still other securities, such as those of the Federal National Mortgage Association (“FNMA”), are supported by the discretionary authority of the U.S. Government to purchase the agency’s obligations.

Government related guarantors (those not backed by the full faith and credit of the U.S. Government) include FNMA and Federal Home Loan Mortgage Corporation (“FHLMC”). FNMA is a government sponsored corporation, the common stock of which is owned entirely by private stockholders. FNMA purchases conventional residential mortgages from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks, credit unions, and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to the timely payment of principal and interest by FNMA, but are not backed by the full faith and credit of the U.S. Government. FHLMC issues participation certificates, which are pass-through securities, each representing an undivided interest in a pool of residential mortgages. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but participation certificates are not backed by the full faith and credit of the U.S. Government.

Derivatives. The following tables provide information about where on the Statements of Assets and Liabilities and Statements of Operations information about derivatives can be found:


	Asset Derivatives				Liability Derivatives
	June 30, 2023				June 30, 2023

	Statement of Assets and				Statement of Assets and
Derivatives not accounted for as hedging instruments	Liabilities Location		Fair Value		Liabilities Location		Fair Value
Principal Investment Grade Corporate Active ETF
Interest rate contracts	Receivables, Total				Payables, Total
	distributable earnings				distributable earnings
	(accumulated loss)	$	57,804	*	(accumulated loss)	$	—

* Includes cumulative unrealized appreciation (depreciation) of futures contracts as shown in the Schedule of Investments. Only the portion of the unrealized appreciation (depreciation) not yet cash settled is shown in the Statements of Assets and Liabilities as variation margin.


			Net Realized Gain or			Net Change in Unrealized
			(Loss) on Derivatives			Appreciation
	Location of Gain or (Loss) on		Recognized in			(Depreciation) of
	Derivatives Recognized in		Statement of			Derivatives Recognized in
Derivatives not accounted for as hedging instruments	Statement of Operations		Operations			Statement of Operations
Principal Investment Grade Corporate Active ETF
Interest rate contracts	Futures contracts	$	(256,390	)	$	15,608

Principal Spectrum Tax-Advantaged Dividend Active ETF
	Investment
Equity contracts	transactions/Investments	$	(24,950	) **	$	—
	Written options		17,563			—

** Investment transactions includes purchased options and/or purchased swaptions.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

3. Operating Policies (continued)

The following table includes a summary of the monthly average outstanding notional by derivative instrument type for the year ended June 30, 2023:


			Average Notional or
Contract Type	Derivative Type		Number of Contracts
Principal Investment Grade Corporate Active ETF
Interest rate contracts	Futures — Short	$	3,073,545
	Futures — Long		2,794,646

Principal Spectrum Tax-Advantaged Dividend Active ETF
Equity contracts	Purchased options		25
	Written options		25

4. Fair Valuation

Fair value is defined as the price that the Funds would receive upon selling a security or transferring a liability in a timely transaction to an independent buyer in the principal or most advantageous market of the security at the measurement date. In determining fair value, the Funds may use one or more of the following approaches: market, income and/or cost. A hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Fund’s own estimates about the estimates market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 — Quoted prices are available in active markets for identical securities as of the reporting date. Investments which are generally included in this category include listed equities and listed derivatives.

Level 2 — Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). Investments which are generally included in this category include certain corporate bonds, senior floating rate interests, OTC derivatives, mortgage-backed securities and municipal bonds.

Level 3 — Significant unobservable inputs (including the Funds' assumptions in determining the fair value of investments). Investments which are generally included in this category include certain corporate bonds and certain common stocks.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the market place, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Funds in determining fair value is greatest for instruments categorized in Level 3.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

4. Fair Valuation (continued)

Fair value is a market based measure considered from the perspective of a market participant who holds the asset rather than an entity specific measure. Therefore, even when market assumptions are not readily available, the Funds’ own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Funds use prices and inputs that are current as of the measurement date, to the extent available.

Investments which are included in the Level 3 category may be valued using quoted prices from brokers and dealers participating in the market for these investments. These investments are classified as Level 3 investments due to the lack of market transparency and market corroboration to support these quoted prices.

Valuation models may be used as the pricing source for other investments classified as Level 3. Valuation models rely on one or more significant unobservable inputs such as prepayment rates, probability of default, or loss severity in the event of default. Significant increases in any of those inputs in isolation would result in a significantly lower fair value measurement.

The fair values of these entities are dependent on economic, political and other considerations. The values of the underlying investee entities may be affected by significant changes in the economic conditions, changes in government policies, and other factors (e.g., natural disasters, pandemics, accidents, conflicts, etc.).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those instruments.

During the period there were no significant purchases, sales, or transfers into or out of Level 3.

The following is a summary of the inputs used as of June 30, 2023, in valuing the Funds' securities carried at fair value:


				Level 2 —
				Other		Level 3 —
		Level 1 —		Significant		Significant
		Quoted		Observable		Unobservable
Fund		Prices		Inputs		Inputs		Totals (Level 1,2,3)

Principal Active High Yield ETF
Bonds*	$	— $		88,157,015	$		— $	88,157,015
Senior Floating Rate Interests*		—		5,447,015			—	5,447,015
U.S. Government & Government Agency
Obligations*		—		3,013,816			—	3,013,816
Investment Companies		10,549,427		—			—	10,549,427
Total investments in securities	$	10,549,427	$	96,617,846	$		— $	107,167,273

Principal Healthcare Innovators ETF
Common Stocks*	$	53,904,909	$	— $			— $	53,904,909
Investment Companies		1,531,050		—			—	1,531,050
Total investments in securities	$	55,435,959	$	— $			— $	55,435,959

Principal International Adaptive Multi-Factor ETF
Common Stocks*
Basic Materials	$	993,620	$	— $			— $	993,620
Communications		924,861		—			—	924,861
Consumer, Cyclical		2,346,564		—			—	2,346,564
Consumer, Non-cyclical		3,457,322		—			—	3,457,322
Diversified		34,726		—			—	34,726
Energy		979,436		1,714			—	981,150
Financial		3,059,444		—			—	3,059,444
Industrial		2,069,503		—			—	2,069,503
Technology		1,013,077		—			—	1,013,077
Utilities		557,374		—			—	557,374
Preferred Stocks*		69,055		—			—	69,055
Investment Companies		65,261		—			—	65,261
Total investments in securities	$	15,570,243	$	1,714	$		— $	15,571,957


Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023



4. Fair Valuation (continued)

				Level 2 —
				Other		Level 3 —
		Level 1 —		Significant		Significant
		Quoted		Observable		Unobservable
Fund		Prices		Inputs		Inputs		Totals (Level 1,2,3)

Principal Investment Grade Corporate Active ETF
Bonds*	$	— $		45,098,417	$		— $	45,098,417
U.S. Government & Government Agency
Obligations*		—		1,136,529			—	1,136,529
Investment Companies		810,272		—			—	810,272
Total investments in securities	$	810,272	$	46,234,946	$		— $	47,045,218
Derivative Assets
Interest rate contracts
Futures	$	57,804	$	— $			— $	57,804

Principal Millennial Global Growth ETF
Common Stocks*	$	29,865,253	$	— $			— $	29,865,253
Investment Companies		820,747		—			—	820,747
Total investments in securities	$	30,686,000	$	— $			— $	30,686,000

Principal Quality ETF
Common Stocks*	$	36,549,939	$	— $			— $	36,549,939
Investment Companies		131,112		—			—	131,112
Total investments in securities	$	36,681,051	$	— $			— $	36,681,051

Principal Real Estate Active Opportunities ETF
Common Stocks*	$	5,380,676	$	— $			— $	5,380,676
Investment Companies		39,103		—			—	39,103
Total investments in securities	$	5,419,779	$	— $			— $	5,419,779

Principal Spectrum Preferred Securities Active ETF
Bonds*	$	— $		554,413,194	$		— $	554,413,194
Investment Companies		15,882,180		—			—	15,882,180
Total investments in securities	$	15,882,180	$	554,413,194	$		— $	570,295,374

Principal Spectrum Tax-Advantaged Dividend Active ETF
Preferred Stocks*	$	2,158,738	$	— $			— $	2,158,738
Bonds*		—		17,425,213			—	17,425,213
Investment Companies		285,061		—			—	285,061
Total investments in securities	$	2,443,799	$	17,425,213	$		— $	19,869,012

Principal U.S. Large-Cap Adaptive Multi-Factor ETF
Common Stocks*	$	6,547,181	$	— $			— $	6,547,181
Investment Companies		20,378		—			—	20,378
Total investments in securities	$	6,567,559	$	— $			— $	6,567,559

Principal U.S. Mega-Cap ETF
Common Stocks*	$	1,459,447,660	$	— $			— $	1,459,447,660
Investment Companies		3,831,620		—			—	3,831,620
Total investments in securities	$	1,463,279,280	$	— $			— $	1,463,279,280

Principal U.S. Small-Cap Adaptive Multi-Factor ETF
Common Stocks*	$	5,835,923	$	— $			— $	5,835,923
Investment Companies		19,884		—			—	19,884
Total investments in securities	$	5,855,807	$	— $			— $	5,855,807

Principal U.S. Small-Cap ETF
Common Stocks*	$	200,549,508	$	— $			— $	200,549,508
Investment Companies		1,405,352		—			—	1,405,352
Total investments in securities	$	201,954,860	$	— $			— $	201,954,860

Principal Value ETF
Common Stocks*	$	37,108,797	$	— $			— $	37,108,797
Investment Companies		160,509		—			—	160,509
Total investments in securities	$	37,269,306	$	— $			— $	37,269,306

* For additional detail regarding sector and/or sub-industry classifications, please see the Schedules of Investments.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

5. Management Agreement and Transactions with Affiliates

Management Services. The Funds have agreed to pay management and investment advisory fees to the Advisor computed at an annual percentage rate of each of the Funds' average daily net assets. A portion of the management fee is paid by the Advisor to the sub-advisor of the Funds, which is also an affiliate of the Advisor. The management fee schedule for the Funds is as follows:


	First		Next		Next		Over
Fund	$500 Million		$500 Million		$500 Million		$1.5 Billion
Principal Healthcare Innovators ETF	0.42	%	0.40	%	0.38	%	0.37	%

Fund							All Assets
Principal Active High Yield ETF							0.39	%
Principal International Adaptive Multi-Factor ETF							0.24
Principal Investment Grade Corporate Active ETF							0.19
Principal Millennial Global Growth ETF							0.38
Principal Quality ETF							0.15
Principal Real Estate Active Opportunities ETF							0.65
Principal Spectrum Preferred Securities Active ETF							0.55
Principal Spectrum Tax-Advantaged Dividend Active ETF							0.60
Principal U.S. Large-Cap Adaptive Multi-Factor ETF							0.15
Principal U.S. Mega-Cap ETF							0.15
Principal U.S. Small-Cap Adaptive Multi-Factor ETF							0.19
Principal U.S. Small-Cap ETF							0.38
Principal Value ETF							0.15

Prior to November 1, 2022, the management fee for Principal Millennial Global Growth ETF was 0.45%, 0.43%, 0.41% and 0.40% for the first $500 million, next $500 million, next $500 million and over $1.5 billion, respectively.

The Advisor has contractually agreed to limit the expenses (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, tax reclaim recovery expenses, and other extraordinary expenses) for certain of the Funds. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits.

The limit is expressed as a percentage of average daily net assets attributable to each Fund on an annualized basis during the reporting period. The expenses borne by the Advisor are subject to reimbursement by the Fund through the fiscal year end, provided no reimbursement will be made if it would result in the Fund exceeding the total operating expense limit. Any amount outstanding at the end of the period are shown as an expense reimbursement from Advisor or expense reimbursement to Advisor on the Statements of Assets and Liabilities. The expense limit for Principal U.S. Mega-Cap ETF is 0.12% through October 31, 2023. No other Funds had expense limitation agreements in place during the year.

Affiliated Ownership. At June 30, 2023, Principal Financial Services, Inc. (an affiliate of the Advisor) owned Shares of the Funds as follows:


Fund	Shares
Principal International Adaptive Multi-Factor ETF	390,001
Principal Real Estate Active Opportunities ETF	199,204
Principal Spectrum Tax-Advantaged Dividend Active ETF	995,521
Principal U.S. Large-Cap Adaptive Multi-Factor ETF	198,571
Principal U.S. Small-Cap Adaptive Multi-Factor ETF	200,965

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

5. Management Agreement and Transactions with Affiliates (continued)

Affiliated Brokerage Commissions. With respect to Principal Spectrum Tax-Advantaged Dividend Active ETF, $387 of brokerage commissions were paid to SAMI Brokerage LLC, a member of the Principal Financial Group. The other Funds did not pay brokerage commissions to any member of the Principal Financial Group during the year ended June 30, 2023.

6. Investment Transactions

For the period ended June 30, 2023, the cost of investment securities purchased and proceeds from investment securities sold (not including short-term investments and in-kind transactions) by the Funds were as follows:


		Non-U.S. Government				U.S. Government
Fund		Purchases		Sales		Purchases		Sales
Principal Active High Yield ETF	$	146,090,917	$	56,178,970	$	2,849,132	$	—
Principal Healthcare Innovators ETF		31,597,130		31,681,702		—		—
Principal International Adaptive Multi-Factor ETF		8,223,748		8,233,322		—		—
Principal Investment Grade Corporate Active ETF		52,231,120		79,075,487		895,563		201,223
Principal Millennial Global Growth ETF		525,983		506,357		—		—
Principal Quality ETF		15,928,856		16,168,751		—		—
Principal Real Estate Active Opportunities ETF		995,400		910,097		—		—
Principal Spectrum Preferred Securities Active ETF		330,326,784		71,218,747		—		—
Principal Spectrum Tax-Advantaged Dividend Active ETF		2,852,795		2,580,102		—		—
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		3,967,363		4,083,586		—		—
Principal U.S. Mega-Cap ETF		349,536,126		356,871,190		—		—
Principal U.S. Small-Cap Adaptive Multi-Factor ETF		5,227,617		5,199,030		—		—
Principal U.S. Small-Cap ETF		217,158,992		218,953,235		—		—
Principal Value ETF		1,312,218		13,363,878		—		—

For the period ended June 30, 2023, in-kind transactions were as follows:


Fund		Purchases		Sales
Principal Active High Yield ETF	$	44,301,186	$	253,051,219
Principal Healthcare Innovators ETF		1,657,751		6,776,015
Principal International Adaptive Multi-Factor ETF		2,005,695		1,917,634
Principal Investment Grade Corporate Active ETF		34,809,897		314,840,964
Principal Millennial Global Growth ETF		3,696,638		—
Principal Quality ETF		5,204,078		20,087,911
Principal Real Estate Active Opportunities ETF		426,165		—
Principal Spectrum Preferred Securities Active ETF		25,521,110		49,540,164
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		—		6,896,659
Principal U.S. Mega-Cap ETF		204,084,291		340,232,524
Principal U.S. Small-Cap ETF		16,169,563		475,886,930
Principal Value ETF		39,183,577		215,307,931

Unsettled in-kind purchases and sales at the end of the period are included in investment securities purchased and investment securities sold, respectively, on the Statements of Assets and Liabilities.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

7. Federal Tax Information

Distributions to Shareholders. The federal income tax character of distributions paid for the periods ended June 30, 2023, and June 30, 2022 was as follows:


		Ordinary Income				Long-Term Capital Gain*				Section 1250 Gain**

		Period ended		Period ended		Period ended		Period ended		Period ended		Period ended
Fund		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Principal Active High Yield ETF	$	11,723,824	$	11,667,484	$	—	$	—	$	—	$	—
Principal Healthcare Innovators ETF		—		861,124		—		—		—		—
Principal International Adaptive
Multi-Factor ETF		512,269		1,862,278		—		—		—		—
Principal Investment Grade
Corporate Active ETF		4,589,877		14,949,956		—		634,166		—		—
Principal Millennial Global Growth
ETF		549,801		2,817,266		—		—		—		—
Principal Quality ETF		527,129		811,956		—		—		—		—
Principal Real Estate Active
Opportunities ETF		125,835		—		1,790		—		1,013		—
Principal Spectrum Preferred
Securities Active ETF		20,075,762		16,461,144		—		—		—		—
Principal Spectrum Tax-Advantaged
Dividend Active ETF		1,148,780		1,190,472		—		30,484		—		—
Principal U.S. Large-Cap Adaptive
Multi-Factor ETF		237,483		1,000,076		—		247		—		—
Principal U.S. Mega-Cap ETF		19,885,169		31,378,545		—		—		—		—
Principal U.S. Small-Cap Adaptive
Multi-Factor ETF		98,793		108,590		—		320		—		—
Principal U.S. Small-Cap ETF		6,213,838		17,721,353		—		—		—		—
Principal Value ETF		4,060,672		2,251,380		—		—		—		—

* The Funds designate these distributions as long-term capital gain dividends per IRC Sec. 852(b)(3)(C) in the 20-percent group (which may be taxed at a 20-percent rate, a 15-percent rate or a 0-percent rate, depending on the shareholder’s taxable income).

** Unrecaptured Section 1250 gains are gains from the sale of depreciable property that are subject to a maximum tax rate of 25%.

Certain Funds may also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

For U.S. federal income tax purposes, short-term capital gain distributions are considered ordinary income distributions.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

7. Federal Tax Information (continued)

Distributable Earnings. As of June 30, 2023, the components of distributable earnings (accumulated loss) on a federal income tax basis were:


								Late Year
								Ordinary and
		UndistributedUndistributed Unrealized Post October													Other
		Ordinary	Long-Term Appreciation/ Capital Loss Capital Loss											Temporary
Fund		Income	Capital Gains (Depreciation) Deferrals Carryforward Differences*
Principal Active High Yield ETF	$	656,023	$	—	$	(7,931,831	)	$	—		$	(16,035,217	)	$	(17,958	)
Principal Healthcare Innovators ETF		—		—		(24,621,653	)		(22,787	)		(22,118,256	)		—
Principal International Adaptive Multi-Factor ETF		221,804		—		(23	)		—			(9,109,691	)		—
Principal Investment Grade Corporate Active ETF		193,559		—		(2,771,882	)		—			(17,938,332	)		—
Principal Millennial Global Growth ETF		374,976		—		(8,578,751	)		—			(8,810,329	)		—
Principal Quality ETF		83,653		—		3,696,087			—			(12,661,189	)		—
Principal Real Estate Active Opportunities ETF		36,613		—		(471,965	)		—			(55,953	)		—
Principal Spectrum Preferred Securities Active ETF		2,357,841		—		(51,137,916	)		—			(16,867,569	)		(596,243	)
Principal Spectrum Tax-Advantaged Dividend Active ETF		80,896		—		(2,137,437	)		—			(1,079,880	)		(17,980	)
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		26,307		—		(160,341	)		—			(5,242,308	)		—
Principal U.S. Mega-Cap ETF		5,163,903		—		200,801,873			—			(93,161,857	)		—
Principal U.S. Small-Cap Adaptive Multi-Factor ETF		21,856		—		318,824			—			(742,964	)		—
Principal U.S. Small-Cap ETF		461,676		—		5,555,223			—			(179,558,559	)		—
Principal Value ETF		317,403		—		214,982			—			(28,330,482	)		—
* Represents book-to-tax accounting differences.

Capital Loss Carryforwards. For federal income tax purposes, capital loss carryforwards are losses that can be used to offset future capital gains of the Fund. As of June 30, 2023, the Funds had approximate net capital loss carryforwards as follows:


		No Expiration		No Expiration			Annual
Fund		Short-Term		Long-Term		Total	Limitations*
Principal Active High Yield ETF	$	8,931,997	$	7,103,220	$	16,035,217		$ 1,874,152**
Principal Healthcare Innovators ETF		7,798,727		14,319,529		22,118,256	—
Principal International Adaptive Multi-Factor ETF		7,842,774		1,266,917		9,109,691	291,060
Principal Investment Grade Corporate Active ETF		6,804,194		11,134,138		17,938,332	473,238
Principal Millennial Global Growth ETF		6,794,042		2,016,287		8,810,329	—
Principal Quality ETF		11,535,823		1,125,366		12,661,189	—
Principal Real Estate Active Opportunities ETF		52,803		3,150		55,953	—
Principal Spectrum Preferred Securities Active ETF		5,405,847		11,461,722		16,867,569	—
Principal Spectrum Tax-Advantaged Dividend Active ETF		410,394		669,486		1,079,880	—
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		4,960,050		282,258		5,242,308	150,782
Principal U.S. Mega-Cap ETF		80,544,792		12,617,065		93,161,857	—
Principal U.S. Small-Cap Adaptive Multi-Factor ETF		577,048		165,916		742,964	—
Principal U.S. Small-Cap ETF		136,509,426		43,049,133		179,558,559	—
Principal Value ETF		26,205,033		2,125,449		28,330,482	230,798

*	In accordance with IRC Sections 381-384, a portion of certain Funds’ losses have been subjected to an annual limitation.
**	Certain losses are subject to an annual limit of $1,874,152 and certain losses are subject to an additional annual limit of $6,296,672.

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

7. Federal Tax Information (continued)

All of these capital losses were generated in taxable years beginning after the enactment date of the Regulated Investment Company Modernization Act of 2010 on December 22, 2010, and will be carried forward with no expiration and with the character of the loss retained.

For the year ended June 30, 2023, the Fund utilized capital loss carryforwards as follows:


		Short-Term		Long-Term
Fund		Utilized		Utilized
Principal Quality ETF	$	365,231	$	—
Principal Value ETF		187,203		63,135

Late-Year Losses. A regulated investment company may elect to treat any portion of its qualified late-year loss as arising on the first day of the next taxable year. Qualified late-year losses are certain capital and ordinary losses which occur during the portion of the Fund’s taxable year subsequent to October 31 and December 31, respectively.

For the taxable year ended June 30, 2023, the Funds intend to defer late-year capital and ordinary losses as follows:


Fund		Late Year Ordinary Loss		Post October Capital Loss
Principal Healthcare Innovators ETF	$	22,787	$	—

Reclassification of Capital Accounts. The Funds may record reclassifications in their capital accounts. These reclassifications have no impact on the total net assets of the Funds. The reclassifications are a result of permanent differences between U.S. GAAP and tax accounting. Adjustments are made to reflect the impact these items have on current and future distributions to shareholders. Therefore, the source of the Funds’ distributions may be shown in the accompanying Statement of Changes in Net Assets as from net investment income and net realized gains on investments or from tax return of capital depending on the type of book and tax differences that exist. For the period ended June 30, 2023, the Funds recorded reclassifications as follows:


		Total
		Distributable Earnings
Fund		(Accumulated Loss)			Paid In Capital
Principal Active High Yield ETF	$	10,235,610		$	(10,235,610	)
Principal Healthcare Innovators ETF		(657,096	)		657,096
Principal International Adaptive Multi-Factor ETF		341,201			(341,201	)
Principal Investment Grade Corporate Active ETF		56,092,908			(56,092,908	)
Principal Millennial Global Growth ETF		(1,497	)		1,497
Principal Quality ETF		(1,580,891	)		1,580,891
Principal Real Estate Active Opportunities ETF		(4	)		4
Principal Spectrum Preferred Securities Active ETF		3,171,030			(3,171,030	)
Principal Spectrum Tax-Advantaged Dividend Active ETF		(1	)		1
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		1,320,673			(1,320,673	)
Principal U.S. Mega-Cap ETF		(66,233,347	)		66,233,347
Principal U.S. Small-Cap ETF		31,829,343			(31,829,343	)
Principal Value ETF		(4,887,348	)		4,887,348

Notes to Financial Statements
Principal Exchange-Traded Funds
June 30, 2023

7. Federal Tax Information (continued)

Federal Income Tax Basis. As of June 30, 2023, the net federal income tax unrealized appreciation (depreciation) and federal tax cost of investments held by each Fund were as follows:


										Cost for
							Net Unrealized			Federal
		Unrealized		Unrealized			Appreciation			Income Tax
Fund		Appreciation		Depreciation			(Depreciation)			Purposes
Principal Active High Yield ETF	$	69,282	$	(8,001,113	)	$	(7,931,831	)	$	115,099,104
Principal Healthcare Innovators ETF		5,698,445		(30,320,097	)		(24,621,652	)		80,057,611
Principal International Adaptive Multi-Factor ETF		1,229,198		(1,229,240	)		(42	)		15,571,999
Principal Investment Grade Corporate Active ETF		91,177		(2,863,059	)		(2,771,882	)		49,874,904
Principal Millennial Global Growth ETF		1,904,157		(10,482,910	)		(8,578,753	)		39,264,753
Principal Quality ETF		4,648,653		(952,566	)		3,696,087			32,984,964
Principal Real Estate Active Opportunities ETF		81,858		(553,823	)		(471,965	)		5,891,744
Principal Spectrum Preferred Securities Active ETF		1,221,182		(52,359,097	)		(51,137,915	)		621,433,289
Principal Spectrum Tax-Advantaged Dividend Active ETF		75,415		(2,212,854	)		(2,137,439	)		22,006,451
Principal U.S. Large-Cap Adaptive Multi-Factor ETF		475,778		(636,119	)		(160,341	)		6,727,900
Principal U.S. Mega-Cap ETF		229,402,393		(28,600,520	)		200,801,873			1,262,477,407
Principal U.S. Small-Cap Adaptive Multi-Factor ETF		870,124		(551,300	)		318,824			5,536,983
Principal U.S. Small-Cap ETF		25,665,607		(20,110,384	)		5,555,223			196,399,637
Principal Value ETF		2,454,126		(2,239,144	)		214,982			37,054,324

8. Subsequent Events

Management has evaluated events or transactions that have occurred through the date the financial statements were issued that would merit recognition or disclosure in the financial statements. On July 27, 2023, the Board of Trustees approved a Plan of Liquidation and Termination (the “Plan”) for the Principal Millennial Global Growth ETF. Pursuant to the Plan, Principal Millennial Global Growth ETF will liquidate on or about October 20, 2023. There were no additional items requiring adjustment of the financial statements or additional disclosure.


Schedule of Investments
Principal Active High Yield ETF
June 30, 2023

		Principal
BONDS — 83.88%		Amount		Value

Aerospace & Defense — 1.45%
Bombardier, Inc.
7.50%, 02/01/2029 ^(a)	$	570,000	$	563,357
Triumph Group, Inc.
7.75%, 08/15/2025 ^(b)		991,000		963,450
			$	1,526,807

Airlines — 0.06%
United Airlines 2016-1 Class B Pass-Through Trust
3.65%, 07/07/2027		73,186		67,367

Auto Manufacturers — 1.74%
Ford Motor Co.
3.25%, 02/12/2032		880,000		692,282
Ford Motor Credit Co. LLC
3.38%, 11/13/2025		952,000		885,240
4.54%, 08/01/2026		263,000		247,219
			$	1,824,741

Auto Parts & Equipment — 0.98%
Dana, Inc.
4.25%, 09/01/2030		1,231,000		1,024,850

Banks — 1.41%
JPMorgan Chase & Co.
(3-month Term Secured Overnight Financing Rate + 3.13%),
4.60%, 02/01/2025 ^(c),(d)		1,587,000		1,479,878

Chemicals — 3.67%
Consolidated Energy Finance SA
5.63%, 10/15/2028 ^(a)		1,142,000		970,928
Kobe U.S. Midco 2, Inc.
9.25%, PIK 10.00%; 11/01/2026 ^(a),(e)		1,234,000		814,440
Olympus Water U.S. Holding Corp.
6.25%, 10/01/2029 ^(a),(b)		1,931,000		1,396,695
Tronox, Inc.
4.63%, 03/15/2029 ^(a)		816,000		678,123
			$	3,860,186

Commercial Services — 4.01%
Albion Financing 1 SARL/Aggreko Holdings, Inc.
6.13%, 10/15/2026 ^(a)		990,000		930,600
Garda World Security Corp.
6.00%, 06/01/2029 ^(a)		188,000		154,058
9.50%, 11/01/2027 ^(a)		1,016,000		981,551
WASH Multifamily Acquisition, Inc.
5.75%, 04/15/2026 ^(a)		1,360,000		1,269,659
ZipRecruiter, Inc.
5.00%, 01/15/2030 ^(a)		1,033,000		879,548
			$	4,215,416

Computers — 1.48%
Seagate HDD Cayman
5.75%, 12/01/2034		630,000		558,779
9.63%, 12/01/2032 ^(a)		907,486		1,001,354
			$	1,560,133

See accompanying notes.


Schedule of Investments
Principal Active High Yield ETF
June 30, 2023

		Principal
BONDS (continued)		Amount		Value

Construction Materials — 1.43%
Smyrna Ready Mix Concrete LLC
6.00%, 11/01/2028 ^(a)	$	1,588,000	$	1,497,554

Diversified Financial Services — 6.46%
AerCap Holdings NV
(5-year Treasury Constant Maturity Rate + 4.54%),
5.88%, 10/10/2079 ^(c)		1,706,000		1,608,973
Credit Acceptance Corp.
6.63%, 03/15/2026 ^(b)		1,483,000		1,425,056
Global Aircraft Leasing Co. Ltd.
6.50%, PIK 7.25%; 09/15/2024 ^(a),(e)		1,524,242		1,395,215
Macquarie Airfinance Holdings Ltd.
8.38%, 05/01/2028		963,000		976,424
OneMain Finance Corp.
3.50%, 01/15/2027		130,000		111,532
4.00%, 09/15/2030		1,357,000		1,044,890
6.63%, 01/15/2028		244,000		230,158
			$	6,792,248

Electric — 4.31%
Clearway Energy Operating LLC
3.75%, 02/15/2031 ^(a)		1,850,000		1,535,223
GenOn Energy, Inc.
0.00%, 10/15/2020 ^(f),(g),(h)		3,100,000		—
NRG Energy, Inc.
3.88%, 02/15/2032 ^(a)		1,500,000		1,155,728
(5-year Treasury Constant Maturity Rate + 5.92%),
10.25%, 03/15/2028 ^(a),(c),(d)		227,000		214,054
Vistra Corp.
(5-year Treasury Constant Maturity Rate + 5.74%),
7.00%, 12/15/2026 ^(a),(c),(d)		697,000		608,133
Vistra Operations Co. LLC
4.38%, 05/01/2029 ^(a)		1,154,000		1,010,785
			$	4,523,923

Electronics — 1.41%
Sensata Technologies BV
4.00%, 04/15/2029 ^(a)		153,000		136,213
Sensata Technologies, Inc.
3.75%, 02/15/2031 ^(a)		1,576,000		1,348,255
			$	1,484,468

Entertainment — 7.47%
Boyne USA, Inc.
4.75%, 05/15/2029 ^(a)		1,811,000		1,631,998
CCM Merger, Inc.
6.38%, 05/01/2026 ^(a)		1,589,000		1,541,330
CDI Escrow Issuer, Inc.
5.75%, 04/01/2030 ^(a)		1,611,000		1,499,548
Cinemark USA, Inc.
5.25%, 07/15/2028 ^(a)		1,370,000		1,205,074
International Game Technology PLC
5.25%, 01/15/2029 ^(a)		1,032,000		977,562
Lions Gate Capital Holdings LLC
5.50%, 04/15/2029 ^(a)		1,376,000<


Table of Contents (Continued)
Schedules of Investments	59
Financial Highlights (Includes Performance Information)	159
Report of Independent Registered Public Accounting Firm	173
Shareholder Expense Example	175
Supplemental Information	177


	Statements of Assets and Liabilities
	Principal Exchange-Traded Funds
	June 30, 2023

			Principal U.S.						Principal U.S.
		Large	-Cap					Small	-Cap
			Adaptive						Adaptive
			Multi-Factor				Principal U.S.		Multi-Factor
				ETF			Mega-Cap ETF		ETF
Investment in securities — at cost			$	6,717,747		$	1,262,120,816	$	5,527,304
Assets
Investment in securities — at value			$	6,567,559		$	1,463,279,280	$	5,855,807
Receivables:
Dividends				4,704			721,718		5,566
Investment securities sold				—			2,178,418		—
Expense reimbursement from Advisor				—			35,260		—
	Total Assets			6,572,263			1,466,214,676		5,861,373

Liabilities
Accrued management and investment advisory fees				787			176,299		898
Fund shares redeemed				—			2,184,856		—
	Total Liabilities			787			2,361,155		898
Net Assets Applicable to Outstanding Shares			$	6,571,476		$	1,463,853,521	$	5,860,475

Net Assets Consist of:
Capital shares and additional paid-in-capital		$	11,947,818			$	1,351,049,602	$	6,262,759
Total distributable earnings (accumulated loss)			(5,376,342		)		112,803,919		(402,284	)
	Total Net Assets		$	6,571,476		$	1,463,853,521	$	5,860,475

Net Asset Value Per Share:
Net assets			$	6,571,476		$	1,463,853,521	$	5,860,475
Shares issued and outstanding				250,001			33,500,001		250,001
Net asset value per share			$	26.29		$	43.70	$	23.44


Statements of Operations
Principal Exchange-Traded Funds
Year Ended June 30, 2023

	Principal U.S.							Principal U.S.
	Large-Cap						Small	-Cap
		Adaptive						Adaptive
	Multi-Factor				Principal U.S.			Multi-Factor
		ETF			Mega-Cap ETF			ETF
Net Investment Income (Loss)
Income:
Dividend	$	107,626		$	19,835,648		$	105,127
Withholding tax		(27	)		—			(146	)
Total Income		107,599			19,835,648			104,981

Expenses:
Management and investment advisory fees		9,527			1,805,383			10,823
Total Gross Expenses		9,527			1,805,383			10,823
Less: Reimbursement from Advisor		—			(361,077	)		—
Total Net Expenses		9,527			1,444,306			10,823
Net Investment Income (Loss)		98,072			18,391,342			94,158

Net Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investment transactions		(736,561	)		(25,665,178	)		(356,638	)
In-kind redemptions		(1,310,311	)		66,713,308			—
Change in unrealized appreciation (depreciation) of:
Investments		2,909,479			199,046,571			758,503
Net Realized and Unrealized Gain (Loss)		862,607			240,094,701			401,865
Net Increase (Decrease) in Net Assets Resulting from Operations	$	960,679		$	258,486,043		$	496,023


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


	Principal Spectrum Preferred Securities
		Active ETF
		Year ended		Year ended
		June 30, 2023		June 30, 2022
Operations
Net investment income (loss)	$	18,424,959		$	12,966,742
Net realized gain (loss)		(13,463,446	)		(1,783,750	)
Change in unrealized appreciation (depreciation)		8,786,436			(66,719,754	)
Net Increase (Decrease) in Net Assets Resulting from Operations		13,747,949			(55,536,762	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(20,075,762	)		(16,461,144	)
Total Dividends and Distributions		(20,075,762	)		(16,461,144	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		237,357,268			53,621,546
Total Increase (Decrease) in Net Assets		231,029,455			(18,376,360	)

Net Assets
Beginning of year		344,956,774			363,333,134
End of year	$	575,986,229		$	344,956,774

Capital Share Transactions
Dollars:
Sold	$	317,487,703		$	119,885,173
Redeemed		(80,130,435	)		(66,263,627	)
Net Increase (Decrease)	$	237,357,268		$	53,621,546
Shares:
Sold		18,650,000			5,950,000
Redeemed		(4,550,000	)		(3,500,000	)
Net Increase (Decrease)		14,100,000			2,450,000


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


	Principal U.S. Large-Cap Adaptive
		Multi-Factor ETF
	Year ended				Year ended
	June 30, 2023			June 30, 2022
Operations
Net investment income (loss)	$	98,072		$	1,150,353
Net realized gain (loss)		(2,046,872	)		(3,811,836	)
Change in unrealized appreciation (depreciation)		2,909,479			(3,432,631	)
Net Increase (Decrease) in Net Assets Resulting from Operations		960,679			(6,094,114	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(237,483	)		(1,000,323	)
Total Dividends and Distributions		(237,483	)		(1,000,323	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		(6,901,309	)		(9,997,947	)
Total Increase (Decrease) in Net Assets		(6,178,113	)		(17,092,384	)

Net Assets
Beginning of year		12,749,589			29,841,973
End of year	$	6,571,476		$	12,749,589

Capital Share Transactions
Dollars:
Sold	$	—		$	172,626,760
Redeemed		(6,901,309	)		(182,624,707	)
Net Increase (Decrease)	$	(6,901,309	)	$	(9,997,947	)
Shares:
Sold		—			6,400,000
Redeemed		(300,000	)		(7,000,000	)
Net Increase (Decrease)		(300,000	)		(600,000	)


Table of Contents
Economic & Financial Market Review	1
Important Fund Information	3
Principal Active High Yield ETF (unaudited)	4
Principal Healthcare Innovators ETF (unaudited)	5
Principal International Adaptive Multi-Factor ETF (unaudited)	6
Principal Investment Grade Corporate Active ETF (unaudited)	7
Principal Millennial Global Growth ETF (unaudited)	8
Principal Quality ETF (unaudited)	9
Principal Real Estate Active Opportunities ETF	10
Principal Spectrum Preferred Securities Active ETF (unaudited)	11
Principal Spectrum Tax-Advantaged Dividend Active ETF (unaudited)	12
Principal U.S. Large-Cap Adaptive Multi-Factor ETF (unaudited)	13
Principal U.S. Mega-Cap ETF (unaudited)	14
Principal U.S. Small-Cap Adaptive Multi-Factor ETF (unaudited)	15
Principal U.S. Small-Cap ETF (unaudited)	16
Principal Value ETF (unaudited)	17
Statements of Assets and Liabilities	18
Statements of Operations	23
Statements of Changes in Net Assets	28
Notes to Financial Statements	42


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


		Principal Investment Grade Corporate
			Active ETF
		Year ended			Year ended
		June 30, 2023			June 30, 2022
Operations
Net investment income (loss)		$	3,068,027		$	11,547,215
Net realized gain (loss)		(64,443,368		)		(5,080,997	)
Change in unrealized appreciation (depreciation)			65,388,314			(76,159,657	)
Net Increase (Decrease) in Net Assets Resulting from Operations			4,012,973			(69,693,439	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments			(4,589,877	)		(15,584,122	)
Total Dividends and Distributions			(4,589,877	)		(15,584,122	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		(321,275,205		)		(26,967,396	)
Total Increase (Decrease) in Net Assets		(321,852,109		)	(112,244,957		)

Net Assets
Beginning of year		369,026,305				481,271,262
End of year		$	47,174,196		$	369,026,305

Capital Share Transactions
Dollars:
Sold		$	41,226,063		$	37,903,794
Redeemed		(362,501,268		)		(64,871,190	)
Net Increase (Decrease)	$	(321,275,205		)	$	(26,967,396	)
Shares:
Sold			1,950,000			1,500,000
Redeemed		(16,550,000		)		(2,600,000	)
Net Increase (Decrease)		(14,600,000		)		(1,100,000	)


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


		Principal Millennial Global
		Growth ETF ^(a)
	Year ended			Year ended
	June 30, 2023			June 30, 2022
Operations
Net investment income (loss)	$	426,745		$	2,886,044
Net realized gain (loss)		(568,066	)		(14,685,302	)
Change in unrealized appreciation (depreciation)		3,219,510			(22,104,977	)
Net Increase (Decrease) in Net Assets Resulting from Operations		3,078,189			(33,904,235	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(549,801	)		(2,817,266	)
Total Dividends and Distributions		(549,801	)		(2,817,266	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		3,848,155			(66,070,744	)
Total Increase (Decrease) in Net Assets		6,376,543			(102,792,245	)

Net Assets
Beginning of year		23,607,051			126,399,296
End of year	$	29,983,594		$	23,607,051

Capital Share Transactions
Dollars:
Sold	$	3,848,155		$	45,979,391
Redeemed		—			(112,050,135	)
Net Increase (Decrease)	$	3,848,155		$	(66,070,744	)
Shares:
Sold		100,000			800,000
Redeemed		—			(2,100,000	)
Net Increase (Decrease)		100,000			(1,300,000	)

^(a)Effective July 15, 2022, Principal Millennials ETF changed its name to Principal Millennial Global Growth ETF.


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


		Principal Real Estate Active
		Opportunities ETF
	Year ended			Period ended
	June 30, 2023			June 30, 2022 ^(a)
Operations
Net investment income (loss)	$	120,599		$	21,660
Net realized gain (loss)		(55,825	)		22,299
Change in unrealized appreciation (depreciation)		(319,485	)		(151,734	)
Net Increase (Decrease) in Net Assets Resulting from Operations		(254,711	)		(107,775	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(128,638	)		—
Total Dividends and Distributions		(128,638	)		—

Capital Share Transactions
Net increase (decrease) in capital share transactions		436,840			5,497,372
Total Increase (Decrease) in Net Assets		53,491			5,389,597

Net Assets
Beginning of period		5,389,597			—
End of period	$	5,443,088		$	5,389,597

Capital Share Transactions
Dollars:
Sold	$	436,840		$	5,497,372
Redeemed		—			—
Net Increase (Decrease)	$	436,840		$	5,497,372
Shares:
Sold		20,000			220,001
Redeemed		—			—
Net Increase (Decrease)		20,000			220,001

^(a)Period from May 18, 2022, date operations commenced, through June 30, 2022.


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


	Principal Spectrum Tax-Advantaged
		Dividend Active ETF
	Year ended			Year ended
	June 30, 2023			June 30, 2022
Operations
Net investment income (loss)	$	995,863		$	942,323
Net realized gain (loss)		(994,934	)		28,895
Change in unrealized appreciation (depreciation)		141,114			(3,438,648	)
Net Increase (Decrease) in Net Assets Resulting from Operations		142,043			(2,467,430	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(1,148,780	)		(1,220,956	)
Total Dividends and Distributions		(1,148,780	)		(1,220,956	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		—			2,129,041
Total Increase (Decrease) in Net Assets		(1,006,737	)		(1,559,345	)

Net Assets
Beginning of year		21,088,086			22,647,431
End of year	$	20,081,349		$	21,088,086

Capital Share Transactions
Dollars:
Sold	$	—		$	2,129,041
Redeemed		—			—
Net Increase (Decrease)	$	—		$	2,129,041
Shares:
Sold		—			100,000
Redeemed		—			—
Net Increase (Decrease)		—			100,000


Statement of Changes in Net Assets
Principal Exchange-Traded Funds


	Principal U.S. Small-Cap Adaptive
		Multi-Factor ETF
	Year ended				Year ended
	June 30, 2023			June 30, 2022
Operations
Net investment income (loss)	$	94,158		$	96,711
Net realized gain (loss)		(356,638	)		(365,590	)
Change in unrealized appreciation (depreciation)		758,503			(561,664	)
Net Increase (Decrease) in Net Assets Resulting from Operations		496,023			(830,543	)

Dividends and Distributions to Shareholders
From net investment income and net realized gain on investments		(98,793	)		(108,910	)
Total Dividends and Distributions		(98,793	)		(108,910	)

Capital Share Transactions
Net increase (decrease) in capital share transactions		—			—
Total Increase (Decrease) in Net Assets		397,230			(939,453	)

Net Assets
Beginning of year		5,463,245			6,402,698
End of year	$	5,860,475		$	5,463,245

Capital Share Transactions
Dollars:
Sold	$	—		$	—
Redeemed		—			—
Net Increase (Decrease)	$	—		$	—
Shares:
Sold		—			—
Redeemed		—			—
Net Increase (Decrease)		—			—