Company: PDSRX
Filing Date: 2025-07-25
Form Type: 486BPOS
Source: 0001756404-25-000017
Chunk: 14

Company: Principal Real Asset Fund
Filing Date: 2025-07-25
Form: 486BPOS
Chunk 14
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Private and Other Underlying Funds Risk. A fund that invests in another fund is subject to the risks associated with direct ownership of the securities in which such underlying fund invests. Fund shareholders indirectly bear their proportionate share of the expenses of each such underlying fund. Private Funds are not registered as investment companies under the Investment Company Act and therefore the Fund will not be able to avail itself of the protections of the Investment Company Act with respect to such Private Funds, including certain corporate governance protections, such as the requirement of having a majority or 50% of the directors serving on a board as independent directors, statutory protections against self-dealings by the institutional asset managers, and leverage limitations. Particularly in the early stages of the Fund, there may be a lack of underlying private funds that are currently issuing ownership interests. The Fund will hold liquid assets while it waits for such underlying funds to call capital, which may negatively impact its performance.

Real Estate Investment Trust ("REITs") Risk. In addition to risks associated with investing in real estate securities, REITs are dependent upon management skills, are not diversified, and are subject to heavy cash flow dependency, risks of default by borrowers, and self-liquidation. Investment in REITs also involves risks similar to risks of investing in small market capitalization companies, such as limited financial resources, less frequent and limited volume trading, and may be subject to more abrupt or erratic price movements than larger company securities. A REIT could fail to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the "Code"). Fund shareholders will indirectly bear their proportionate share of the expenses of REITs in which the fund invests.

Real Estate Securities Risk. Investing in real estate securities subjects the fund to the risks associated with the real estate market (which are similar to the risks associated with direct ownership in real estate), including declines in real estate values, loss due to casualty or condemnation, property taxes, interest rate changes, increased expenses, cash flow of underlying real estate assets, regulatory changes (including zoning, land use and rents), and environmental problems, as well as to the risks related to the management skill and creditworthiness of the issuer.

Repurchase Offers Risk. Repurchase offers and the need to fund repurchase obligations may affect the ability of the Fund to be fully invested or may force the Fund to maintain a higher percentage of its assets in liquid investments (including by borrowing to obtain such investments), which may harm the Fund’s investment performance. Moreover