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Investment Type: pif

SAM Conservative Balanced R1 Portfolio (PCSSX)

Quick Facts Ticker: PCSSX Inception Date: 01/16/2007 Extended Performance Inception Date: 07/25/1996 Morningstar Category: Conservative Allocation Total Net Assets (mil): $763.87	Investment Strategy    What's this? The investment seeks to provide a high level of total return, consistent with a moderate degree of principal risk. The fund invests between 40% and 80% of net assets in a combination of fixed-income funds and cash equivalents and between 20% and 60% of its net assets in equity funds. It may invest up to 40% of assets in any single fixed-income fund as well as cash equivalents, and up to 30% of assets in any single equity fund.
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 589 Conservative Allocation 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 % -1.21 1.32 2.05 8.61 0.76 3.10 3.61 4.41 Capital Benchmark (40/60) % -1.03 1.19 2.99 7.86 1.35 3.52 3.44 --- Conservative Allocation Category % -0.76 1.74 2.63 8.74 0.53 2.66 3.02 --- Morningstar Percentile Ranking** --- --- --- 45 46 42 33 --- # of Funds in Category 695 694 677 662 589 401 164 ---

* Inception Date: 01/16/2007 ; Extended Performance Inception Date: 07/25/1996

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	1.86%
Total Investment Expense - Net:	1.86%
12b-1 Fee:	0.35%

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?

Edge Asset Management, Inc.

Portfolio Managers

   What's this?

Charlie Averill , CFA Since 01/01/2010 M.A. , Princeton University

Todd Jablonski , CFA Since 01/01/2010 M.B.A. , New York University

Jill R. Cuniff Since 01/01/2010 B.S. , Montana State University

© 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 SAM Conservative Balanced R1 Portfolio. 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

Capital Benchmark (40/60) is intended to represent a relevant proxy for market and Portfolio performance. It is allocated as follows: 40% S&P 500 Index and 60% Barclays Capital Aggregate Bond Index. These calculated returns reflect the historical performance of the oldest share class of the fund, adjusted to reflect a portion of the fees and expenses of this share class. Please see the fund's prospectus for more information on specific expenses, and the fund's most recent shareholder report for actual date of first sale. Expenses are deducted from income earned by the fund. As a result, dividends and investment results will differ for each share class. Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise. Fixed-income and asset allocation investment options that invest in mortgage securities are subject to increased risk due to real estate exposure. Asset allocation does not guarantee a profit or protect against a loss. Investing in real estate, small-cap, international, and high-yield investment options involves additional risks. Additionally there is no guarantee this investment option will provide adequate income at or through retirement. This Principal Strategic Asset Management Portfolio (SAM) indirectly bears its pro rata share of the management fees incurred by the underlying Principal Funds in which this portfolio invests. Based on the asset allocation of the SAM Portfolio outlined in the prospectus dated March 1, 2010, the weighted average operating expenses of the underlying funds are: Flexible Income, 0.59%; Conservative Balanced, 0.62%; Balanced, 0.67%; Conservative Growth, 0.70%; Strategic Growth, 0.71%. While the operating expenses of the underlying mutual funds are not part of the SAM Portfolio operating expenses they are included in the Total Investment Expense. Performance results shown for the SAM Portfolios reflect the application of these expenses.