Company: PGZ
Filing Date: 2025-07-03
Form Type: N-CSRS
Source: 0001398344-25-012685
Chunk: 5

Company: Principal Real Estate Income Fund
Filing Date: 2025-07-03
Form: N-CSRS
Chunk 5
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 holdings within
the Fund rose 0.71%, during the trailing six months ending April 30, 2025.

Europe and APAC contributed positively to performance.
Europe’s performance was supported by less rate-sensitive French retail stocks, boosted by higher starting yields, inflation-linked
leases, and rising consumer real incomes. Meanwhile, Japan was the primary driver to performance on the back of activist investors in
the market, higher inflationary expectations, and robust earnings.

| Principal Real Estate Income Fund | Performance Overview |

April 30, 2025 (Unaudited)

In the Americas, defensive U.S. healthcare stocks
were the standout contributor to performance while trade uncertainty weighed on industrial stocks.

Whilst the Fed is for now still more concerned about
sticky inflation, it also has to juggle its dual mandate of maintaining employment. Given the view that tariffs have a transitory impact
on inflation, we believe the Fed is likely to respond to weakness in the labor market with rate cuts, vindicated by longer term market
driven measures of inflation expectations which remain anchored. This biases real interest rates downwards and should continue to be supportive
for defensive asset classes like REITs. We continue to believe that the defensive REIT sector offers an attractive investment opportunity
with valuations looking very cheap when measured against public equities. In our view, REITs are also relatively insulated from any direct
impact on tariffs and any potential de-risking away from America. With steady fundamentals and durable cash flows, they provide a compelling
way to diversify risk in portfolios today, but a prolonged stagflationary environment poses a risk.

Our portfolio strategy will continue to emphasize
bottom-up stock selection and company fundamentals to drive excess returns. With a preference for quality and overweights to key positions
that offer resilient long-term growth in earnings, we expect the portfolio to be positioned well for economic weakness and lower yields
ahead. If markets pivot back to risk-on then we could expect some headwinds to relative performance.

The Fund intends to make regular monthly distributions
to stockholders at a constant and fixed (but not guaranteed) rate. The Board of Trustees approve the distribution and may adjust it from
time to time. The monthly distribution amount from November 1, 2024 to April 30, 2025 was $0.105 per share.

At times, to maintain a stable level of distributions,
the Fund may pay out less than all of its net investment income or pay out accumulated undistributed income, or return of capital, in