Principal Strategic Asset Management (SAM) Portfolios
SAM Portfolios Enhanced with Recent Product Adjustments
In November 2010 the Asset Allocation Team at Edge Asset Management began implementing a series of product enhancements to the five Principal Strategic Asset Management (SAM) Portfolios (sub-advised by Edge). The changes, which include a wider range of asset classes and underlying funds, along with a reclassification of each Portfolio's overall composition, were completed on December 31, 2010.
These enhancements are intended to improve and update the investment process and increase the Portfolios' overall diversification levels, providing additional opportunities to enhance returns and increase risk management efficiencies.
The most significant product enhancements include:
- Redefinition of asset classes: The Asset Allocation Team redefined the class and sub-category detail that now totals 27 distinct asset classes. These asset classes include a variety of additional categories including commodities, inflation protection securities, and international real estate.*
- Manager composition: Traditionally the Asset Allocation Team has looked primarily at the asset class level to manage risk and enhance returns. Going forward, the Team will be evaluating the underlying investment managers for multiple factors including correlation, traditional due diligence, and active risk/return profile.
- Increased number of underlying funds: The Asset Allocation Team is increasing the total number of underlying funds from 16 to 24. Notable fund additions include the Principal Global Diversified Income Fund, Principal Diversified Real Asset Fund, Principal Inflation Protection Fund, and Principal Global Real Estate Securities Fund.
Sophistication of a Managed Account, Simplicity of a Mutual Fund
The five Principal SAM Portfolios are designed to provide investors an innovative approach to target-risk investing. Your clients can choose among five different SAM Portfolios to fit their participants goals and risk tolerance.
Details of changes to the SAM Portfolio underlying funds and asset classes are listed below. Items in bold represent new funds and asset class categories.
|Underlying Funds||Asset Classes|
|Unchanged||Equities - Unchanged|
|Principal Capital Appreciation Fund||Convertible Securities|
|Principal Diversified International Fund||U.S. Large-Cap Growth|
|Principal Equity Income Fund||U.S. Large-Cap Value|
|Principal Government & High Quality Bond Fund||U.S. Mid-Cap Growth|
|Principal High Yield Fund||U.S. Mid-Cap Value|
|Principal Income Fund||U.S. REITs|
|Principal International Emerging Markets Fund||U.S. Small-Cap Growth|
|Principal LargeCap Growth Fund||U.S. Small-Cap Value|
|Principal LargeCap Growth Fund II||Equities - Added / Changed|
|Principal LargeCap Value Fund III||Before Enhancements||After Enhancements|
|Principal MidCap Blend Fund||International Developed Market Stocks||International Developed Market Growth|
|Principal Preferred Securities Fund||International Developed Market Value|
|Principal Real Estate Securities Fund||International Emerging Market Stocks||International Emerging Market Growth|
|Principal Short-Term Income Fund||International Emerging Market Value|
|Principal SmallCap Growth Fund||Commodities|
|Principal SmallCap Value Fund||International Real Estate|
|Funds Added||U.S. Master Limited Partnerships|
|Principal Diversified Real Asset Fund||Fixed Income - Unchanged|
|Principal Global Diversified Income Fund||U.S. Government Securities|
|Principal Global Real Estate Securities Fund||U.S. High Yield Corporate Bonds|
|Principal Inflation Protection Fund||U.S. Investment Grade Corporate Bonds|
|Principal LargeCap Blend Fund II||U.S. Mortgage & Asset-Backed Securities|
|Principal MidCap Growth Fund III||Fixed Income - Changed / Added|
|Principal SmallCap Growth Fund I||Before Enhancements||After Enhancements|
|Principal SmallCap Value Fund II||Preferred Securities||Preferred Stocks|
|Preferred Capital Securities|
|U.S. Commercial Mortgage-Backed Securities|
|U.S. Treasury Inflation-Protected Securities|
Investors should carefully consider a fund's investment objectives, risks, charges, and expenses prior to investing. A prospectus, or summary prospectus if available, containing this and other information can be obtained by contacting a financial professional, visiting principalfunds.com, or calling 800.986.3343. Read the prospectus carefully before investing.
*Asset allocation/diversification does not guarantee a profit or protect against a loss.
To obtain a prospectus, download online or call The Principal® at 1.800.986.3343
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. For more information about our funds, including their full names, please see the Principal Funds, Inc. prospectus or call The Principal® at 1.800.986.3343.
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.
Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds.
Not FDIC or NCUA/NCUSIF insured - May lose value - No bank guarantee - Not a deposit - Not insured by any federal government agency