Not FDIC Insured
May Lose Value - Not a Deposit - No Bank Guarantee
Not Insured by any Federal Government Agency
* Unannualized rate of return (change in value) since the start of the year. Money Market Funds are not guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although these Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money. 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 a member of the Principal Financial Group, Des Moines, IA 50392. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., 800-547-7754, member SIPC. Securities are offered through Princor® and/or independent brokers/dealers. Principal Funds Distributor, Princor and Principal Life are members of the Principal Financial Group®, Des Moines, IA 50392.
Principal Funds, Inc. is distributed by and securities offered through Princor Financial Services Corporation (Princor), member SIPC, 800-547-7754. Princor is a member of Principal Financial Group, Des Moines, IA 50392. See the Principal Funds, Inc. prospectus for the full name of each 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, by visiting www.principal.com, or by contacting us at 1.800.547.7754. Please read the prospectus carefully before investing. Only eligible purchasers may buy Institutional Class shares of the Funds. At the present time, eligible purchasers include but are not limited to: Separate Accounts of Principal Life; Principal Life or any of its subsidiaries or affiliates; any fund distributed by Principal Funds Distributor, Inc. and/or Princor Financial Services Corporation ("Princor") (together, the "Distributors") if the fund seeks to achieve its investment objective by investing primarily in shares of mutual funds; clients of Principal Global Investors, LLC.; sponsors, recordkeepers, or administrators of wrap account or mutual fund asset allocation programs or participants in those programs; certain pension plans; certain retirement account investment vehicles administered by foreign or domestic pension plans; an investor who buys shares through an omnibus account with certain intermediaries, such as a brokers/dealer, bank, or other financial institution, pursuant to a written agreement; and certain institutional clients that have been approved by Principal Life Insurance Company for purposes of providing plan record keeping. All funds listed may not be available to each eligible purchaser. Investment Types
Large U.S. Equity - This asset class is generally comprised of investment options that invest in stocks, or shares of ownership in large, well-established, U.S. companies. These investment options typically carry more risk than fixed income investment options but have the potential for higher returns over longer time periods. They may be an appropriate choice for long-term investors who are seeking the potential for growth. All investment options in this category have the potential to lose value.
Small/Mid US Equity - This asset class is generally comprised of investment options that invest in stocks, or shares of ownership in small to medium-sized U.S. companies. These investment options typically carry more risk than larger U.S. equity investment options but have the potential for higher returns. They may be an appropriate choice for long-term investors who are seeking the potential for growth. All investment options in this category have the potential to lose value.
International Equity - This asset class is comprised of investment options that invest in stocks, or shares of ownership in companies with their principal place of business or office outside the United States. These investment options often carry more risk than U.S. equity investment options but may have the potential for higher returns. They may be an appropriate choice for long-term investors who are seeking the potential for growth. All investment options in this category have the potential to lose value.
Balanced/Asset Allocation - This asset class is generally comprised of a combination of fixed income and equity investment options. These investment options may include balanced, asset allocation, target-date, and target-risk investment options. Although typically lower risk than investment options that invest solely in equities, all investment options in this category have the potential to lose value.
Short-Term Fixed Income - This asset class is generally comprised of short-term, fixed-income investment options that are largely liquid and are designed to not lose much value. These investment options may include stable value, money market, short-term bond, and guaranteed interest accounts. They are considered to be among the least risky forms of investment options. However, they typically have a lower rate of return than equities or longer-term fixed income investment options over long periods of time. Depending on the objectives of the investment options, they may experience price fluctuations and may lose value.
Fixed Income - This asset class is generally comprised of investment options that invest in bonds, or debt of a company or government entity (including U.S. and Non- U.S.). It may also include real estate investment options that directly own property. These investment options typically carry more risk than short-term fixed income investment options (including, for real estate investment options, liquidity risk), but less overall risk than equities. All investment options in this category have the potential to lose value.
Footnotes: | | 1.
| 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. | | | 2.
| Each index based investment option is invested in the stocks or bonds of the index it tracks. Performance of indexes reflects the unmanaged results for the market segment the selected stocks or bonds represent. There is no assurance an index based investment option will match the performance of the index tracked. | | | 3.
| International and global investment options are subject to additional risk due to fluctuating exchange rates, foreign accounting and financial policies, and other economic and political environments. | | | 4.
| High yield investment options are subject to greater credit risk associated with high yield bonds. | | | 5.
| Real estate investment options are subject to some risks inherent in real estate and Real Estate Investment Trusts, such as risks associated with general and local economic conditions. | | | 7.
| S&P 500 is a trademark of The McGraw-Hill Companies, Inc., and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. | | | 8.
| S&P SmallCap 600 is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. | | | 9.
| S&P MidCap 400 is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Product. | | | 10.
| Not all funds associated with the institutional class shares of the Principal Funds series are registered in every state. These funds will be appropriately registered for use upon selection for your retirement plan. | | | 11.
| Effective October 3, 2005, LA Capital was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 13.
| 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. | | | 14.
| Effective August 8, 2005, Mellon Capital Management was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 15.
| From March 1, 2006, to December 31, 2007, Bank of New York served as a sub-advisor for managing the cash portion of this investment option. | | | 16.
| 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. | | | 17.
| Small-cap and mid-cap stocks may have additional risks, including greater price volatility. | | | 18.
| Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. government. | | | 19.
| Effective January 2, 2008, this portfolio is co-sub-advised by JP Morgan and Neuberger Berman Fixed Income LLC (formerly named Lehman Brothers Asset Management). Prior to January 2, 2008 Post Advisory Group was a third sub-advisor for this portfolio. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 20.
| Fixed-income and asset allocation investment options that invest in mortgage securities are subject to increased risk due to real estate exposure. | | | 21.
| Instances of high double-digit returns were achieved primarily during favorable market conditions and may not be sustainable over time. | | | 22.
| Formerly known as Equity Income I Fund. | | | 23.
| Formerly known as High Yield Fund. | | | 24.
| Formerly known as International Fund. | | | 25.
| Formerly known as LargeCap Blend Fund. | | | 26.
| Formerly known as LargeCap Value Fund. | | | 27.
| Formerly known as MidCap Growth Fund. | | | 28.
| Formerly known as MidCap Value Fund. | | | 29.
| Effective July 15, 2008, Westwood Management Corp. was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 30.
| Effective December 31, 2008, this portfolio is sub-advised by BlackRock Financial Management, Inc. Prior to December 31, 2008, the portfolio was sub-advised by Principal Global Investors. | | | 32.
| Principal Management Corporation may voluntarily limit a certain portion of the fund's expenses collected from the Money Market Fund on a temporary basis. The Total Investment Expense - Net may be lower when expenses are limit. | | | 33.
| This investment option maintains a voluntary waiver which is reflected in the value displayed for Total Investment Expense - Net. This waiver may be discontinued at any time. | | | 34.
| 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. | | | 35.
| Effective May 1, 2009, Columbus Circle Investors was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 36.
| Formerly known as West Coast Equity Fund. | | | 37.
| 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. | | | 38.
| Effective June 26, 2009, this portfolio is sub-advised by Emerald Advisors and Essex. Prior to June 26, 2009, the portfolio was sub-advised by UBS Global Asset Management, Emerald Advisors and Essex. The portfolio has had various sub-advisors since its inception. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 39.
| Effective July 14, 2009, Brown Advisory was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 40.
| Effective July 14, 2009, Montag & Caldwell was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 41.
| Formerly known as Mortgage Securities Fund. | | | 43.
| Effective October 1, 2009, ClearBridge Advisors was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 44.
| Effective October 1, 2009, TS&W was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 45.
| 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. | | | 47.
| Effective January 11, 2010, Schroders was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed. | | | 48.
| This Principal LifeTime Fund indirectly bears its pro rata share of the management fees incurred by the underlying Principal Funds in which this fund invests. Based on the asset allocation of the Principal LifeTime Funds outlined in the prospectus dated March 1, 2010, the weighted average operating expenses of the underlying funds are: Principal LifeTime Strategic Income, 0.58%; Principal LifeTime 2010, 0.68%; Principal LifeTime 2015, 0.71%; Principal LifeTime 2020, 0.73%; Principal LifeTime 2025, 0.74%; Principal LifeTime 2030, 0.76%; Principal LifeTime 2035, 0.77%; Principal LifeTime 2040, 0.78%; Principal LifeTime 2045, 0.79%; Principal LifeTime 2050, 0.79%; Principal LifeTime 2055, 0.80%. While the operating expenses of the underlying mutual funds are not part of the Principal LifeTime Fund's operating expenses they are included in the Total Investment Expense. Performance results shown for the Principal LifeTime Fund reflect the application of these expenses. | | | 49.
| 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. | | | 50.
| Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. or any other government entity. Concentrating investments in natural resources industries can be affected significantly by events relating to those industries, such as variations in the commodities markets, weather, disease, embargoes, international, political and economic developments, the success of exploration projects, tax and other government regulations and other factors. Investment in derivatives entails specific risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. An MLP that invests in a particular industry (e.g., oil and gas) may be harmed by detrimental economic events within that industry. As partnerships, MLPs may be subject to less regulation (and less protection for investors) under state laws than corporations. In addition, MLPs may be subject to state taxation in certain jurisdictions, which may reduce the amount of income paid by an MLP to its investors. | | | 55.
| The International Equity Index investment option described herein is indexed to an MSCI index. | | | 56.
| The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The Principal International Equity Index Fund?s Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with Principal and any related funds. |
|
Printable page
