Looking for an investment leader you can trust? Look no further.

For more than 130 years, The Principal has been helping people and businesses manage their investments in all kinds of markets.

No other company is more focused on helping you achieve your financial goals.

In fact, more than 19 million customers worldwide trust us with their hard-earned dollars, and here's why:

• We are a recognized leader in investment management, with more than $335 billion in assets under management.^[1]
• We are the 4th largest manager of target-date lifecycle mutual funds in the U.S.^[2]
• We are a Top 10 largest manager of real estate assets managed for pension funds.^[3]
• We are a Top 20 largest manager of U.S. institutional tax-exempt assets.^[4]
• We are a Top 50 largest money manager worldwide, based on assets under management.^[5]
• We manage assets for 10 of the 25 largest pension funds in the world.^[6]

Investors should carefully consider a fund's investment objectives, risks, charges, and expenses prior to investing. A prospectus containing this and other information can be obtained by contacting a financial professional, visiting principalfunds.com, or by calling 800.222.5852. Read the prospectus carefully before investing.

A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.

The Principal LifeTime Funds, which are target-date funds, invest in underlying Principal Funds. Each Principal LifeTime Fund is managed toward a particular target (retirement) date, or the approximate date the participant or investor starts withdrawing money. As each Principal LifeTime Fund approaches its target date, the investment mix becomes more conservative by increasing exposure to generally more conservative investment options and reducing exposure to typically more aggressive investment options. The asset allocation for each Principal LifeTime Fund is regularly re-adjusted within a timeframe that extends 10-15 years beyond the target date, at which point it reaches its most conservative allocation. Principal LifeTime Funds assume the value of the investor's account will be withdrawn gradually during retirement. Neither the principal nor the underlying assets of the Principal LifeTime Funds are guaranteed at any time, including the target date. Investment risk remains at all times.

Insurance issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co. Securities offered through Princor Financial Services Corp., 800.247.1737, member SIPC. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Institutional Asset Management provided by Principal Global Investors. Principal National, Principal Life, Princor®, Principal Funds Distributor and Principal Global Investors are members of the Principal Financial Group®, Des Moines, IA 50392.

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^[1]

Assets under management figure for the various companies of the Principal Financial Group, as of 12/31/2011.

^[2]

Principal Funds ranked as the fourth largest manager of target-date lifecycle funds in the United States by Financial Research Corporation Lifecycle Fund Analytic Report. September 2011. "Active multi-managed target-date choices" describes the underlying assets.

^[3]

Principal Global Investors is the 9th largest manager of real estate assets managed on behalf of pension funds within the Towers Watson "Global Alternatives Survey 2011" Top 50 Real Estate, data as of Dec. 31, 2010. June 2011.

^[4]

The 17th largest manager of U.S. institutional tax-exempt assets, out of 711 managers profiled. Managers ranked by U.S. institutional, tax-exempt assets as of Dec. 31, 2010. "Largest Money Managers," Pensions & Investments. May 2011.

^[5]

The 33rd largest money manager out of 716 managers profiled. Managers ranked by total worldwide institutional assets under management as of Dec. 31, 2010. Qualified firms include managers of U.S. institutional tax-exempt assets. "Largest Money Managers-Worldwide," Pensions & Investments. June 2011.

^[6]

Principal Global Investors manages assets for 10 of the 25 largest world pension plans. The list is derived from "P&I/ Watson Wyatt World 300: The Largest Retirement Funds" report on the largest pension plans compared to our internal records. September 2011.