Company: PDSRX
Filing Date: 2025-07-25
Form Type: 486BPOS
Source: 0001756404-25-000017
Chunk: 105

Company: Principal Real Asset Fund
Filing Date: 2025-07-25
Form: 486BPOS
Chunk 105
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ifying Income). Whether the income from derivatives, swaps, commodity-linked derivatives and other commodity/natural resource-related securities is Qualifying Income is unclear under current law. Accordingly, the Fund's ability to invest in certain derivatives, swaps, commodity-linked derivatives, entities earning fee and rental income, and other commodity/natural resource-related securities may be restricted. Further, if the Fund invests in these types of securities and the income is not determined to be Qualifying Income, it may cause the Fund to fail to qualify as a RIC under the IRC for a given year. In addition, the Fund must satisfy certain diversification tests under the IRC to qualify as a RIC. If the Fund fails to qualify as a regulated investment company, it will be liable for taxes, significantly reducing its distributions to shareholders and eliminating shareholders' ability to treat distributions (as long or short-term capital gains or qualifying dividends) of the Fund in the manner they were received by the Fund.

#### Futures Contracts and Options
For federal income tax purposes, capital gains and losses on futures contracts or options thereon, index options or options traded on qualified exchanges are generally treated as 60% long-term and 40% short-term. In addition, the Fund must recognize any unrealized gains and losses on such positions held at the end of the fiscal year. The Fund may elect out of such tax treatment, however, for a futures or options position that is part of an "identified mixed straddle" such as a put option purchased with respect to a portfolio security. Gains and losses on futures and options included in an identified mixed straddle are considered 100% short-term and unrealized gains or losses on such positions are not realized at year-end. The straddle provisions of the IRC may require the deferral of realized losses to the extent that the Fund has unrealized gains in certain offsetting positions at the end of the fiscal year. The IRC may also require recharacterization of all or a part of losses on certain offsetting positions from short-term to long-term, as well as adjustment of the holding periods of straddle positions.

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#### International Funds
Some foreign securities purchased by the Fund may be subject to foreign withholding taxes that could reduce the yield on such securities. The amount of such foreign taxes is expected to be insignificant. Shareholders of the Fund may be entitled to claim a credit or deduction with respect to foreign taxes. The Fund may from year to year make an election to pass through such taxes to shareholders. If such