Principal Global Diversified Income Fund Hits Five-Year Mark with Five-Star Morningstar Rating
Outcome-oriented investments gaining popularity with financial advisors, investors
January 16, 2014 (Des Moines, Iowa) — Launched December 15, 2008, the Principal Global Diversified Income Fund (Class I: PGDIX) recently reached its five-year anniversary and was recognized with an Overall Morningstar RatingTM of five stars among 533 Conservative Allocation funds in its category.
The multi-manager, multi-discipline Principal Global Diversified Income Fund was Principal Funds' highest-selling fund of 2013, surpassing $8 billion in assets at year end. The fund ranks No. 11 in assets under management when compared to the 260 U.S. mutual funds launched six months before or six months after the Principal Global Diversified Income Fund's inception date.
"Our outcome-based style of investing continues to resonate with financial advisors and their clients who are looking for consistent income through a diversified strategy that focuses on risk-adjusted yield," said Dave Reichart, portfolio advisor.
The Principal Global Diversified Income Fund focuses on optimizing risk-adjusted yield through both fixed-income and equity investments, aiming for consistent cash income with added capital appreciation potential. It seeks to deliver further diversification by combining domestic and international opportunities.
The fund includes the following types of investment strategies managed by specialist sub-advisors:
- High yield bonds
- Preferred securities
- Emerging market debt
- Master limited partnerships
- Global real estate securities
- Global value equities
- Commercial mortgage-backed securities
- Global infrastructure
- Call overwriting program
The Principal Global Diversified Income Fund is the first in a series of funds designed to provide outcome-oriented solutions for financial advisors and their clients. The Principal Diversified Real Asset Fund (PRDAX), launched March 16, 2010, seeks to help manage the impact of inflation on purchasing power. And launched October 24, 2011, the Principal Global Multi-Strategy Fund (PMSAX) seeks to reduce portfolio volatility. For more information on these funds, visit the Principal Portfolio Construction StrategiesSM page.
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About Morningstar Ratings
Past performance is no guarantee of future results. Morningstar proprietary ratings reflect historical risk-adjusted performance for funds with at least a 3-year performance history and are subject to change each month. Morningstar RatingsTM are calculated from a fund's three-, five-, and ten-year average annual returns in excess of the 90-day U.S. Treasury bill returns, with appropriate fee adjustments, and a risk factor that reflects performance below the 90-day Treasury bill return. Within each asset class the top 10% of funds receive 5 stars (Highest); the next 22.5% receive 4 stars (Above Average); the middle 35% earn 3 stars (Average); the next 22.5% receive 2 stars (Below Average); and the bottom 10% receive 1 star (Lowest). The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. Copyright 2014 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.
Morningstar ratings for the other time periods are as follows: 3-year (3 stars/553 funds); 5-year (5 stars/491 funds); 10-year (N/A stars/230 funds).
Funds shown may have recent negative performance. Please see principalfunds.com, or call 800-222-5852, for current performance information.
Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline. The Principal Global Diversified Income Fund invests in fixed income. Lower-rated securities are subject to additional credit and default risks. Risks of preferred securities differ from risks inherent in other investments. In particular, in a bankruptcy preferred securities are senior to common stock but subordinate to other corporate debt. International investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards.
Risk is magnified in emerging markets, which may lack established legal, political, business or social structures to support securities markets. REITs are subject to risks associated with the real estate industry and REIT registration tax factors. A master limited partnership that invests in a particular industry may be harmed by economic events, subject to less regulation (and less protection for investors) than corporations under state laws, and subject to state taxation that may reduce income paid to its investors. Investment options that invest in mortgage securities (e.g., commercial mortgage-backed securities) are subject to increased risk due to real estate exposure.
Call option writing seeks to reduce the volatility of underlying equities and improve the Fund's economics through receipt of option premium. Though premiums are not considered income, they do accrue and may cause the Fund's price to rise. This may limit upside potential and loss is possible.
The Principal Diversified Real Asset Fund invests in fixed income. The U.S. government does not guarantee the principal or coupon payments of non-U.S. Treasury bonds. Investments in natural resource industries can be affected by disease, embargoes, international/political/economic developments, variations in the commodities markets/weather and other factors. Investing in derivatives entails specific risks regarding liquidity, leverage and credit that may reduce returns and/or increase volatility.
The Principal Global Multi-Strategy Fund uses alternative strategies such as arbitrage, leverage, derivatives and shorting securities. Long/short investing does not guarantee lower risk associated with equity markets, capitalization, sector swings or other factors and may have higher turnover with additional tax consequences. Short selling risks include investment loss and added costs to cover short positions. International investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. Use of alternative strategies may magnify risk. Securities such as bonds, equities, international and emerging market securities, and currencies are subject to risks associated with market and interest rate movements. The Fund is non-diversified and may be more susceptible to price volatility if the Fund does not meet its objective. Investors should not expect significant outperformance during market rallies. Additional risks are included in the Fund's prospectus.
About Principal Funds
Principal Funds is a leading provider of mutual funds, with $102.9 billion in assets under management. Principal Funds brings expertise in global investment management, asset allocation and retirement leadership to financial professionals and investors. Including its target-risk and target-date offerings, Principal Funds is the fifth largest manager of lifecycle funds in the industry. The companies that make up Principal Funds are members of the Principal Financial Group®. For more information, visit www.principalfunds.com.
About the Principal Financial Group
The Principal Financial Group® (The Principal®) is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $466.2 billion in assets under management and serves some 19.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
Carefully consider a fund's objectives, risks, charges, and expenses. Contact your financial professional or visit principalfunds.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.
Investing involves risk, including possible loss of principal.
Class I shares are available only to eligible investors, including various institutional investors and investors in certain mutual fund wrap or asset allocation programs. See the prospectus for eligibility requirements.
Asset allocation and diversification do not ensure a profit or protect against a loss.
Principal Funds are distributed by Principal Funds Distributor, Inc.
- As of 12/31/13. Based on total returns.
- Source: Morningstar.
- As of September 30, 2013. Includes all share classes of the Principal Funds, Inc. and Principal Variable Contracts Funds, Inc.
- Strategic Insight Mutual Fund Lifecycle Report Q3 2013.
- “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of Sept. 30, 2013.