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Investment Type: pif

SmallCap Value II R4 Fund (PSTWX)

Quick Facts Ticker: PSTWX Inception Date: 06/01/2004 Morningstar Category: Small Value Total Net Assets (mil): $673.37	Investment Strategy    What's this? The investment seeks long-term growth of capital. The fund normally invests at least 80% of net assets in equity securities of U.S. companies with small market capitalizations (those with market capitalizations similar to companies in the Russell 2000 Value index) or in securities with market capitalizations of $3.5 billion or less at the time of purchase. The advisor uses a market capitalization weighted approach in determining individual security weights.
Morningstar Style Box™   as of 07/31/2010 What's this?	Overall Morningstar Star Rating™   as of 08/31/2010 What's this? Out of 309 Small Value Funds Morningstar's Star Ratings reflect risk adjusted performance and are derived from a weighted average of the performance figures associated with its three, five, and ten-year (if applicable) time periods.

Total Returns

Investment results shown represent historical performance and do not guarantee future results. Investment returns and principal values 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 data shown.

In situations where the net and gross total investment expense figures are different, the mutual fund or the underlying fund in which a Separate Account invests has waived/capped a portion of its management fees through the date displayed in the waiver expiration date or contractual cap expiration date column. Differences may also be shown due to the fund family choosing to pay certain expenses that would normally be payable by the fund. Returns displayed are based on net total investment expense.

Month-End | Quarter-End

Average Annual Total Returns as of 08/31/2010

1 Month 3 Month YTD 1 Year 3 Year 5 Year 10 Year Since      Inception* Total Return % -7.54 -9.14 -2.13 7.19 -9.20 -2.05 --- 1.65 Russell 2000 Value Index % -7.52 -9.57 -2.54 6.06 -8.03 -1.33 6.56 --- Small Value Category % -6.99 -8.32 -1.46 7.96 -6.74 -0.63 7.28 --- Morningstar Percentile Ranking** --- --- --- 63 76 67 --- --- # of Funds in Category 377 372 357 350 309 250 126 ---

* Inception Date: 06/01/2004

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	1.45%
Total Investment Expense - Net:	1.43%
Waiver Date:	02/28/2011
Contractual Cap Date:	02/28/2011
12b-1 Fee:	0.10%

Growth of $10,000

   What's this?

Performance assumes reinvestment of all dividends and capital gains. Extended performance is calculated based on the historical performance of the investment option's oldest share class, adjusted for the fees and expenses of the share class shown. Periods of less than one year are not annualized.

Investment Subadvisors

   What's this?

Dimensional Fund Advisors

Vaughan Nelson

LA Capital Management

Portfolio Managers

   What's this?

Scott J. Weber , CFA Since 10/03/2005 M.B.A. , Tulane University

Chris D. Wallis , CPA , CFA Since 10/03/2005 B.B.A. , Baylor University

Stephen Clark Since 03/29/2008 M.B.A. , University of Chicago

Christine M. Kugler Since 05/01/2009 B.A. , University of California, Santa Barbara

Stuart K. Matsuda Since 05/01/2009 M.B.A. , California State University Northridge

David R. Borger , CFA Since 05/01/2009 M.B.A. , University of Michigan

Thomas D. Stevens , CFA Since 05/01/2009 B.B.A. , University of Wisconsin

Mariateresa Monaco Since 06/02/2009 M.B.A. , Massachusetts Institute of Technology

© 2010 Morningstar, Inc. All Rights Reserved. Part of the mutual fund data contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Returns shown for periods of less than one year are not annualized. Insurance products and plan administrative services are provided by Principal Life Insurance Company. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities are offered through Princor Financial Services Corporation, 800-547-7754, member SIPC and/or independent broker/dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Principal Funds Distributor, Princor and Principal Life are members of the Principal Financial Group®, Des Moines, IA 50392. Certain investment options may not be available in all states or U.S. commonwealths. The full name of this investment option is Principal SmallCap Value II R4 Fund. Before investing in mutual funds, investors should carefully consider the investment objectives, risks, charges and expenses of the funds. This and other information is contained in the free prospectus, which can be downloaded from our site, or by contacting us at 1.800.547.7754. Please read the prospectus carefully before investing. Not FDIC Insured May Lose Value - Not a Deposit - No Bank Guarantee Not Insured by any Federal Government Agency

Russell 2000 Value Index is a market-weighted total return index that measures the performance of companies within the Russell 2000 Index having lower price-to-book ratios and lower forecasted growth values. Small-cap and mid-cap investment options are subject to more fluctuation in value and may have additional risks than other investment options with stocks of larger, more stable companies. Effective May 1, 2009, LA Capital was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. The manager of the Fund, Principal Management Corporation, invests between 10% and 40% of the Fund's assets in common stocks in an attempt to match or exceed the performance of the Fund's benchmark index for performance.