# EDGAR Filing Document

**Accession Number:** 0001572661
**File Stem:** 0001104659-26-045353
**Filing Date:** 2026-4
**Character Count:** 535652
**Document Hash:** 9402c14fea5ada4eddfc1038072b690b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-045353.hdr.sgml**: 20260420

**ACCESSION NUMBER**: 0001104659-26-045353

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 30

**FILED AS OF DATE**: 20260420

**DATE AS OF CHANGE**: 20260420

**EFFECTIVENESS DATE**: 20260420

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Principal Exchange-Traded Funds
- **CENTRAL INDEX KEY:** 0001572661

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23029
- **FILM NUMBER:** 26874112

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-235-9328

**MAIL ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Principal Exchange-Traded Funds
- **CENTRAL INDEX KEY:** 0001572661

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-201935
- **FILM NUMBER:** 26874111

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-235-9328

**MAIL ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392

## Series and Classes Contracts Data

### Principal CLO ETF (Series ID: S000103001)

| Class ID   | Class Name        | Ticker Symbol   |
|:---|:---|:---|
| C000273533 | Principal CLO ETF | UUPP            |

### Principal Inflation Protection ETF (Series ID: S000103002)

| Class ID   | Class Name                         | Ticker Symbol   |
|:---|:---|:---|
| C000273534 | Principal Inflation Protection ETF | RIZE            |

### Principal Long Duration ETF (Series ID: S000103003)

| Class ID   | Class Name                  | Ticker Symbol   |
|:---|:---|:---|
| C000273535 | Principal Long Duration ETF | DWWN            |

### Principal Securitized Debt ETF (Series ID: S000103004)

| Class ID   | Class Name                     | Ticker Symbol   |
|:---|:---|:---|
| C000273536 | Principal Securitized Debt ETF | WDE             |

?xml version='1.0' encoding='ASCII'?

**Registration No. 333-201935**

**Investment Company Act of 1940 File No. 811-23029**

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_________________**

**FORM N-1A**

**REGISTRATION STATEMENT**

***UNDER***

---

| | |
|:---|:---|
| ***THE SECURITIES ACT OF 1933*** | X |
| **Post-Effective Amendment No. 123** | X |

---

**and/or**

**REGISTRATION STATEMENT**

***UNDER***

---

| | |
|:---|:---|
| ***THE INVESTMENT COMPANY ACT OF 1940*** | X |
| **Amendment No. 125** | X |
| **(Check Appropriate Box or Boxes)** | |

---

_________________

**PRINCIPAL EXCHANGE-TRADED FUNDS**

**(Exact Name of Registrant as Specified in Charter)**

**_________________**

**711 High Street**

**Des Moines, IA 50392**

(Address of Principal Executive Offices)

**(515) 878-0460**

(Registrant's Telephone Number, including Area Code)

_________________

---

| |
|:---|
| **<u>Name and Address of Agent for Service:</u>** |
| Deanna Y. Pellack |
| Principal Financial Group |
| Des Moines, IA 50392 |

---

**_________________**

**Approximate Date of Proposed Public Offering:** as soon as practicable after the effective date of this Registration Statement.

**It is proposed that this filing will become effective (check appropriate box)**

_<u>X</u>_&nbsp;&nbsp;&nbsp;&nbsp;immediately upon filing pursuant to paragraph (b)

____&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (b)

____&nbsp;&nbsp;&nbsp;&nbsp;60 days after filing pursuant to paragraph (a)

____&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (a)

____&nbsp;&nbsp;&nbsp;&nbsp;75 days after filing pursuant to paragraph (a)(2)

____&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (a)(2) of Rule 485

**If appropriate, check the following box:**

____&nbsp;&nbsp;&nbsp;&nbsp;This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

**Title of Securities Being Registered:** Shares of Principal CLO ETF, Principal Inflation Protection ETF, Principal Long Duration ETF, and Principal Securitized Debt ETF.

**EXPLANATORY NOTE**

Principal Exchange-Traded Funds is filing this Amendment to add four new series (Principal CLO ETF, Principal Inflation Protection ETF, Principal Long Duration ETF, and Principal Securitized Debt ETF). The Amendment includes the following: (1) facing page; (2) Part A; (3) Part B; (4) Part C; and (5) signature pages.

**PRINCIPAL EXCHANGE-TRADED FUNDS**

**("PETF" or the "Trust")**

The date of this Prospectus is April 20, 2026.

**FUNDS OF THE TRUST**

(each, a "Fund" and, together, the "Funds")

---

| | | |
|:---|:---|:---|
| **Fund** | **Ticker Symbol** | **Principal<br>U.S. Listing Exchange** |
| **Principal CLO ETF** | UUPP | Cboe BZX |
| **Principal Inflation Protection ETF** | RIZE | Cboe BZX |
| **Principal Long Duration ETF** | DWWN | Cboe BZX |
| **Principal Securitized Debt ETF** | WDE | Cboe BZX |

---

**___________________________________________________________________________________________**

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

**___________________________________________________________________________________________**

------

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | **TABLE OF CONTENTS** |
| | **PAGE** |
| FUND SUMMARIES | FUND SUMMARIES |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PRINCIPAL CLO ETF](#PRINCIPALCLOETF-3) | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PRINCIPAL INFLATION PROTECTION ETF](#PRINCIPALINFLATIONPROTECTIONETF-3) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PRINCIPAL LONG DURATION ETF](#PRINCIPALLONGDURATIONETF-3) | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PRINCIPAL SECURITIZED DEBT ETF](#PRINCIPALSECURITIZEDDEBTETF-3) | 14 |
| [ADDITIONAL INFORMATION ABOUT INVESTMENT STRATEGIES AND RISKS](#ADDITIONALINFORMATIONABOUTINVESTMENTSTRATEGIESANDRISKS-3) | 19 |
| [PORTFOLIO HOLDINGS INFORMATION](#PORTFOLIO-3) | 30 |
| [MANAGEMENT OF THE FUNDS](#MANAGEMENTOFTHEFUNDS-3) | 30 |
| [DISTRIBUTOR AND OTHER FUND SERVICE PROVIDERS](#DISTRIBUTORANDOTHERFUNDSERVICEPROVIDERS-3) | 32 |
| [PRICING OF FUND SHARES](#PRICINGOFFUNDSHARES-3) | 33 |
| [PURCHASE AND SALE OF FUND SHARES](#PURCHASEANDSALEOFFUNDSHARES-3) | 34 |
| [DIVIDENDS AND DISTRIBUTIONS](#DIVIDENDS-3) | 35 |
| [FREQUENT PURCHASES AND REDEMPTIONS](#FREQUENT-3) | 36 |
| [TAX CONSIDERATIONS](#TAX-3) | 36 |
| [DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION](#DISTRIBUTION-3) | 37 |
| [FUND ACCOUNT INFORMATION](#FUND-3) | 38 |
| [ADDITIONAL INFORMATION](#ADDITIONALINFORMATION-3) | 39 |

---

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**PRINCIPAL CLO ETF**

**Objective:** The Fund seeks to provide current income and, as a secondary objective, capital appreciation during periods of rising U.S. interest rates.

**Fees and Expenses of the Fund**

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table or the example below.**

**Annual Fund Operating Expenses**

**(expenses that you pay each year as a percentage of the value of your investment)**

---

| | |
|:---|:---|
| Management Fees | 0.19% |
| Other Expenses<sup>(1)</sup> | 0.00% |
| **Total Annual Fund Operating Expenses<sup>(2)</sup>** | **0.19%** |

---

<sup>(1)</sup> Based on estimated amounts.

<sup>(2)</sup> The investment management agreement (the "Management Agreement") between the Fund and Principal Global Investors, LLC ("PGI") provides that, for the duration of the Management Agreement, PGI will pay all operating expenses of the Fund, except for the Management Fee, payments made under the Fund's Rule 12b-1 plan (if or when such fees are imposed), brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses, and tax reclaim recovery expenses and other extraordinary expenses.

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the ends of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | |
|:---|:---|:---|
| | **1 Year** | **3 Years** |
| Principal CLO ETF | $19 | $61 |

---

**Portfolio Turnover**

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. This Fund is new and does not have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in collateralized loan obligations ("CLOs"). A CLO security is an asset-backed security issued in different tranches, each with varying degrees of risk and yield, by a trust or other special purpose vehicle. CLOs are typically collateralized by an underlying portfolio of loan obligations, which may include, among others, senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. The underlying loans are selected by a CLO's manager. The Fund will invest primarily in senior tranches of CLO securities, which ordinarily are investment grade-rated, the lowest level of risk and the lowest yields.

The Fund may invest in floating rate securities, including U.S. Treasury and government securities and securitized assets (CMOs, CMBS and ABS). The Fund is not managed to a particular maturity. Under normal circumstances, the Fund maintains a portfolio duration of less than 1 year.

The Fund also invests in derivatives, including futures, credit default swaps and other types of swaps, for hedging purposes, for tactical positioning, and to manage duration. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

The Fund's investment process relies on the professional judgment of the team's portfolio managers and analysts to carry out an approach that combines fundamental, technical and valuation considerations to

------

source ideas in both a top-down and bottom-up fashion. The analysts assess interest rate trends, economic conditions, and market outlook when analyzing each potential security, considering its structure features, loan level performance, and cash flow dynamics. Portfolio managers will consider this assessment when selecting securities and constructing the Fund's portfolio.

The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

**Principal Risks**

The value of your investment in the Fund changes with the value of the Fund's investments. Many factors affect that value, and it is possible to lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**Active Management Risk.** There is no guarantee that the investment techniques, analyses, or judgments that the Fund's investment advisor and/or sub-advisor applies in making investment decisions for the Fund will produce the intended outcome or that the investments the advisor selects for the Fund will perform as well as other securities that were not selected for the Fund. The Fund may not achieve its investment objective, and it is not intended to be a complete investment program.

**Cash Transactions Risk.** Unlike certain ETFs, the Fund expects to effect its creations and redemptions primarily for cash, rather than primarily for in-kind securities. As such, investments in shares may be less tax-efficient than an investment in a conventional ETF that generally is able to make in-kind redemptions and avoid realizing gains in connection with transactions designed to raise cash to meet redemption requests.

**CLO Risk.** The risks of investing in CLO securities include both the economic risks of the underlying loans combined with the risks associated with the CLO structure governing the priority of payments. CLO securities are backed by an underlying portfolio of loan obligations. CLO securities issue tranches of debt that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and exhaustion of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLO securities depend largely on the tranche in which a Fund is invested and the type of the underlying loans in the tranche of the CLO security in which a Fund invests. Subordinate tranche investments involve greater risk of loss than more senior tranches. However, ratings do not constitute a guarantee of credit quality and may be downgraded, and in stressed market environments it is possible that even senior CLO debt tranches could experience losses due to these risk factors. The Fund's portfolio managers may not be able to accurately predict how specific CLO securities or the portfolio of underlying loans for such CLO securities will react to changes or stresses in the market, including changes in interest rates. Some risks associated with investing in CLO securities include, but not limited to, liquidity risk, interest rate risk, credit risk, call risk, and the risk of default of the underlying asset.

**CLO Manager Risk.** CLO managers may have limited operating histories, may be subject to conflicts of interests, including managing the assets of other clients or other investment vehicles, or receiving fees that incentivize maximizing the yield, and indirectly the risk, of a CLO. Adverse developments with respect to a CLO manager, such as personnel and resource constraints, regulatory issues or other developments that may impact the ability and/or performance of the CLO manager, may adversely impact the performance of the CLO securities in which the Fund invests.

**Counterparty Risk.** Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations.

**Derivatives Risk.** Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so, and result in disproportionate losses that may be substantially greater than a fund's initial investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Credit Default Swaps.** Credit default swaps involve special risks in addition to those associated with swaps generally because they are difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). The protection "buyer" in a credit default contract may be obligated to pay the protection "seller" an up-front payment or a periodic stream of payments over

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the term of the contract, provided, generally, that no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the "par value" (i.e., full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. The Fund may be either the buyer or seller in the transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Futures.** Futures contracts involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Swaps.** Swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the swap; possible lack of a liquid secondary market for a swap and the resulting inability to close a swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

**Fixed-Income Securities Risk.** Fixed-income securities are subject to interest rate, credit quality, and liquidity risks. The market value of fixed-income securities generally declines when interest rates rise, and increased interest rates may adversely affect the liquidity of certain fixed-income securities. Moreover, an issuer of fixed-income securities could default on its payment obligations due to increased interest rates or for other reasons.

**Floating and Variable Rate Securities Risk.** The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities of fixed interest rates. Floating and variable rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected. Floating and variable rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund's ability to sell the securities at any given time.

**Hedging Risk.** A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the fund.

**High Portfolio Turnover Risk.** High portfolio turnover (more than 100%) caused by active and frequent trading of portfolio securities may result in accelerating the realization of taxable gains and losses, lower fund performance, and increased brokerage costs.

**Market Trading Risks.** The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption to the activities of market makers, limited pool of authorized participants, or other participants and in the creation / redemption process of the Fund. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.

**Portfolio Duration Risk.** Portfolio duration is a measure of the expected life of a fixed-income security and its sensitivity to changes in interest rates. The longer a fund's average portfolio duration, the more sensitive the fund will be to changes in interest rates, which means funds with longer average portfolio durations may be more volatile than those with shorter durations.

**Redemption and Large Transaction Risk.** Ownership of the Fund's shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may sell or purchase Fund shares in large quantities on the secondary market. These secondary market transactions may cause authorized participants to increase their purchases and redemptions of creation units from the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund's liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on the Fund's exchange and may, therefore, have a material upward or downward effect on the market price of the shares.

**Securitized Products Risk.** Investments in securitized products are subject to risks similar to traditional fixed-income securities, such as credit, interest rate, liquidity, prepayment, extension, and default risk, as well as additional risks associated with the nature of the assets and the servicing of those assets.

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Unscheduled prepayments on securitized products may have to be reinvested at lower rates. A reduction in prepayments may increase the effective maturities of these securities, exposing them to the risk of decline in market value over time (extension risk).

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

**U.S. Treasury Securities Risk.** A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices for such securities are not guaranteed and will fluctuate. Because U.S. Treasury Securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. In addition, changes in the credit rating or financial condition of the U.S. government may cause the value of U.S. Treasury securities to decline.

**Performance**

No performance information is shown because the Fund has not yet had a calendar year of performance. The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The JP Morgan CLOIE AAA Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives. Performance information provides an indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information (when available) at www.principalam.com/etfperformance.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Laura Rank (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jed Weirup (since 2026), Portfolio Manager

**Purchase and Sale of Fund Shares**

The Fund issues and redeems Shares at net asset value ("NAV") only with authorized participants ("APs") who have entered into agreements with the Fund's distributor in exchange for the deposit or delivery of a basket of securities that the Fund specifies each day. Except when aggregated in creation units, the Shares are not redeemable securities of the Fund. Typically, the basket of assets will be made up of securities, but may include a cash component. (See "Purchase and Redemption of Creation Units" in the Statement of Additional Information for more information.)

Shares of the Fund are listed for trading on Cboe BZX Exchange, Inc. Individual Shares may only be bought and sold in the secondary market through a broker or dealer at a market price. Because Shares trade at market prices rather than NAV, Shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or selling Shares on the secondary market (the bid-ask spread).

You can access recent information, including information on the Fund's net asset value, market price, premiums and discounts, and bid-ask spreads (when available) at www.PrincipalAM.com.

**Tax Information**

The Fund's distributions you receive are generally subject to federal income tax as ordinary income or capital gain and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-deferred in which case your distributions would be taxed when withdrawn from the tax-deferred account.

**Payments to Broker-Dealers and Other Financial Intermediaries**

If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL INFLATION PROTECTION ETF**

**Objective:** The Fund seeks to provide current income and, as a secondary objective, capital appreciation during periods of rising U.S. inflation.

**Fees and Expenses of the Fund**

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table or the example below.**

**Annual Fund Operating Expenses**

**(expenses that you pay each year as a percentage of the value of your investment)**

---

| | |
|:---|:---|
| Management Fees | 0.19% |
| Other Expenses<sup>(1)</sup> | 0.00% |
| **Total Annual Fund Operating Expenses<sup>(2)</sup>** | **0.19%** |

---

<sup>(1)</sup> Based on estimated amounts.

<sup>(2)</sup> The investment management agreement (the "Management Agreement") between the Fund and Principal Global Investors, LLC ("PGI") provides that, for the duration of the Management Agreement, PGI will pay all operating expenses of the Fund, except for the Management Fee, payments made under the Fund's Rule 12b-1 plan (if or when such fees are imposed), brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses, and tax reclaim recovery expenses and other extraordinary expenses.

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the ends of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | |
|:---|:---|:---|
| | **1 Year** | **3 Years** |
| Principal Inflation Protection ETF | $19 | $61 |

---

**Portfolio Turnover**

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. This Fund is new and does not have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in inflation-protected securities. Inflation-protected securities are bonds whose principal payments adjust with inflation, as measured by the Consumer Price Index ("CPI"). Inflation-protected securities are comprised of U.S. Treasury Inflation Protected Securities ("TIPS"). TIPS are securities of varying maturities issued by the U.S. Department of the Treasury ("U.S. Treasury") that are designed to protect investors from inflation risk. TIPS are income-generating instruments whose interest and principal payments are adjusted for inflation. The TIPS' principal payments are adjusted monthly based on the CPI. A fixed interest rate is applied to the inflation-adjusted principal so that, as inflation increases, so do the principal value and interest payment of the TIPS. The inflation adjustments can provide investors with a hedge against inflation, helping to preserve the purchasing power of an investment.

The Fund primarily invests in TIPS. The Fund is not managed to a particular maturity. Under normal circumstances, the Fund expects to target an overall duration near zero and to maintain an effective portfolio duration between zero and five years on an absolute basis. The Fund is benchmarked to the Bloomberg US Treasury TIPS 0-5 Years Index ("Index"), but the Fund's duration position is expected to consistently deviate from the duration of the Index.

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The Fund invests in derivatives, including futures and swaps, for hedging purposes, for tactical positioning, and to manage duration. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

**Principal Risks**

The value of your investment in the Fund changes with the value of the Fund's investments. Many factors affect that value, and it is possible to lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**Active Management Risk.** There is no guarantee that the investment techniques, analyses, or judgments that the Fund's investment advisor and/or sub-advisor applies in making investment decisions for the Fund will produce the intended outcome or that the investments the advisor selects for the Fund will perform as well as other securities that were not selected for the Fund. The Fund may not achieve its investment objective, and it is not intended to be a complete investment program.

**Counterparty Risk.** Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations.

**Deflation Risk.** The Fund will be subject to the risk that prices throughout the economy may decline over time, resulting in "deflation." If this occurs, the principal and income of TIPS held by the Fund would likely decline in price, which could result in losses for the Fund.

**Derivatives Risk.** Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so, and result in disproportionate losses that may be substantially greater than a fund's initial investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Futures.** Futures contracts involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Swaps.** Swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the swap; possible lack of a liquid secondary market for a swap and the resulting inability to close a swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

**Fixed-Income Securities Risk.** Fixed-income securities are subject to interest rate, credit quality, and liquidity risks. The market value of fixed-income securities generally declines when interest rates rise, and increased interest rates may adversely affect the liquidity of certain fixed-income securities. Moreover, an issuer of fixed-income securities could default on its payment obligations due to increased interest rates or for other reasons.

**Hedging Risk.** A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the fund.

**High Portfolio Turnover Risk.** High portfolio turnover (more than 100%) caused by active and frequent trading of portfolio securities may result in accelerating the realization of taxable gains and losses, lower fund performance, and increased brokerage costs.

**Interest Rate Risk.** When interest rates increase, fixed-income securities or instruments held by the Fund will generally decline in value. Long-term fixed-income securities or instruments will normally have more price volatility because of this risk than short-term fixed-income securities or instruments.

------

Changing interest rates may have unpredictable effects on the markets, may result in heightened market volatility and may detract from Fund performance. In addition, changes in monetary policy may exacerbate the risks associated with changing interest rates. Funds with longer average portfolio durations will generally be more sensitive to changes in interest rates than funds with a shorter average portfolio duration. Fluctuations in interest rates may also affect the liquidity of fixed-income securities and instruments held by the Fund.

Inflation protected securities are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation, as measured by the CPI. If the rate of inflation declines, the principal value of inflation protected securities will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of TIPS. For securities that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal value. The value of inflation-protected securities is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds.

**Market Trading Risks.** The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption to the activities of market makers, limited pool of authorized participants, or other participants and in the creation / redemption process of the Fund. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.

**Portfolio Duration Risk.** Portfolio duration is a measure of the expected life of a fixed-income security and its sensitivity to changes in interest rates. The longer a fund's average portfolio duration, the more sensitive the fund will be to changes in interest rates, which means funds with longer average portfolio durations may be more volatile than those with shorter durations.

**Redemption and Large Transaction Risk.** Ownership of the Fund's shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may sell or purchase Fund shares in large quantities on the secondary market. These secondary market transactions may cause authorized participants to increase their purchases and redemptions of creation units from the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund's liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on the Fund's exchange and may, therefore, have a material upward or downward effect on the market price of the shares.

**Treasury Inflation Protected Securities Risk.** TIPS are debt instruments issued by the United States Department of the Treasury. As inflationary expectations increase, as measured by the CPI, TIPS will increase in value, because they protect future interest payments against inflation; conversely, as inflationary concerns decrease, TIPS will decrease in value. When TIPS mature, investors are paid the adjusted principal or original principal, whichever is greater. Interest payments on TIPS are unpredictable and will fluctuate as the principal and corresponding interest payments are adjusted for inflation. Because of the inflation adjustment feature, TIPS typically have lower yields than fixed-rate bonds. There can be no assurance that the CPI will accurately measure the real rate of inflation in the prices of goods and services. Any increases in the principal amount of TIPS will be considered taxable ordinary income, even though the Fund or applicable underlying ETF will not receive the principal until maturity. As a result, the Fund may make income distributions to shareholders that exceed the cash it receives.

**U.S. Treasury Securities Risk.** A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices for such securities are not guaranteed and will fluctuate. Because U.S. Treasury Securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. In addition, changes in the credit rating or financial condition of the U.S. government may cause the value of U.S. Treasury securities to decline.

------

**Performance**

No performance information is shown because the Fund has not yet had a calendar year of performance. The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Bloomberg US Treasury TIPS 0-5 Years Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives. Performance information provides an indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information (when available) at www.principalam.com/etfperformance.

**Investment Advisor**

Principal Global Investors, LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jeff Callahan (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Zach Gassmann (since 2026), Portfolio Manager

**Purchase and Sale of Fund Shares**

The Fund issues and redeems Shares at net asset value ("NAV") only with authorized participants ("APs") who have entered into agreements with the Fund's distributor in exchange for the deposit or delivery of a basket of securities that the Fund specifies each day. Except when aggregated in creation units, the Shares are not redeemable securities of the Fund. Typically, the basket of assets will be made up of securities but may include a cash component. (See "Purchase and Redemption of Creation Units" in the Statement of Additional Information for more information.)

Shares of the Fund are listed for trading on Cboe BZX Exchange, Inc. Individual Shares may only be bought and sold in the secondary market through a broker or dealer at a market price. Because Shares trade at market prices rather than NAV, Shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or selling Shares on the secondary market (the bid-ask spread).

You can access recent information, including information on the Fund's net asset value, market price, premiums and discounts, and bid-ask spreads (when available) at www.PrincipalAM.com.

**Tax Information**

The Fund's distributions you receive are generally subject to federal income tax as ordinary income or capital gain and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-deferred in which case your distributions would be taxed when withdrawn from the tax-deferred account.

**Payments to Broker-Dealers and Other Financial Intermediaries**

If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LONG DURATION ETF**

**Objective:** The Fund seeks to provide current income and, as a secondary objective, capital appreciation during periods of falling U.S. interest rates.

**Fees and Expenses of the Fund**

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table or the example below.**

**Annual Fund Operating Expenses**

**(expenses that you pay each year as a percentage of the value of your investment)**

---

| | |
|:---|:---|
| Management Fees | 0.19% |
| Other Expenses<sup>(1)</sup> | 0.00% |
| **Total Annual Fund Operating Expenses<sup>(2)</sup>** | **0.19%** |

---

<sup>(1)</sup> Based on estimated amounts.

<sup>(2)</sup> The investment management agreement (the "Management Agreement") between the Fund and Principal Global Investors, LLC ("PGI") provides that, for the duration of the Management Agreement, PGI will pay all operating expenses of the Fund, except for the Management Fee, payments made under the Fund's Rule 12b-1 plan (if or when such fees are imposed), brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses, and tax reclaim recovery expenses and other extraordinary expenses.

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the ends of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | |
|:---|:---|:---|
| | **1 Year** | **3 Years** |
| Principal Long Duration ETF | $19 | $61 |

---

**Portfolio Turnover**

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. This Fund is new and does not have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund is not managed to a particular maturity. Under normal circumstances, the Fund maintains an average portfolio duration that is within +/- 10% of the duration of the Bloomberg US STRIPS 20+ Year Index, which as of March 31, 2026, was 24.38 years.

The Fund invests in derivatives, including futures and swaps, for hedging purposes, for tactical positioning, and to manage duration. A derivative is a financial arrangement, the value of which is

------

derived from, or based on, a traditional security, asset, or market index. The Fund may also use interest rate futures to manage duration, as well as for tactical interest rate positioning and cash management.

The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

**Principal Risks**

The value of your investment in the Fund changes with the value of the Fund's investments. Many factors affect that value, and it is possible to lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**Active Management Risk.** There is no guarantee that the investment techniques, analyses, or judgments that the Fund's investment advisor and/or sub-advisor applies in making investment decisions for the Fund will produce the intended outcome or that the investments the advisor selects for the Fund will perform as well as other securities that were not selected for the Fund. The Fund may not achieve its investment objective, and it is not intended to be a complete investment program.

**Counterparty Risk.** Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations.

**Derivatives Risk.** Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so, and result in disproportionate losses that may be substantially greater than a fund's initial investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Futures.** Futures contracts involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Swaps.** Swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the swap; possible lack of a liquid secondary market for a swap and the resulting inability to close a swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

**Fixed-Income Securities Risk.** Fixed-income securities are subject to interest rate, credit quality, and liquidity risks. The market value of fixed-income securities generally declines when interest rates rise, and increased interest rates may adversely affect the liquidity of certain fixed-income securities. Moreover, an issuer of fixed-income securities could default on its payment obligations due to increased interest rates or for other reasons.

**Hedging Risk.** A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the fund.

**High Portfolio Turnover Risk.** High portfolio turnover (more than 100%) caused by active and frequent trading of portfolio securities may result in accelerating the realization of taxable gains and losses, lower fund performance, and increased brokerage costs.

**Interest Rate Risk.** When interest rates increase, fixed-income securities or instruments held by the Fund will generally decline in value. Long-term fixed-income securities or instruments will normally have more price volatility because of this risk than short-term fixed-income securities or instruments. Changing interest rates may have unpredictable effects on the markets, may result in heightened market volatility and may detract from Fund performance. In addition, changes in monetary policy may exacerbate the risks associated with changing interest rates. Funds with longer average portfolio

------

durations will generally be more sensitive to changes in interest rates than funds with a shorter average portfolio duration. Fluctuations in interest rates may also affect the liquidity of fixed-income securities and instruments held by the Fund.

**Market Trading Risks.** The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption to the activities of market makers, limited pool of authorized participants, or other participants and in the creation / redemption process of the Fund. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.

**Portfolio Duration Risk.** Portfolio duration is a measure of the expected life of a fixed-income security and its sensitivity to changes in interest rates. The longer a fund's average portfolio duration, the more sensitive the fund will be to changes in interest rates, which means funds with longer average portfolio durations may be more volatile than those with shorter durations.

**Redemption and Large Transaction Risk.** Ownership of the Fund's shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may sell or purchase Fund shares in large quantities on the secondary market. These secondary market transactions may cause authorized participants to increase their purchases and redemptions of creation units from the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund's liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on the Fund's exchange and may, therefore, have a material upward or downward effect on the market price of the shares.

**U.S. Treasury Securities Risk.** A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices for such securities are not guaranteed and will fluctuate. Because U.S. Treasury Securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. In addition, changes in the credit rating or financial condition of the U.S. government may cause the value of U.S. Treasury securities to decline.

**Performance**

No performance information is shown because the Fund has not yet had a calendar year of performance. The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Bloomberg US STRIPS 20+ Year Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives. Performance information provides an indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information (when available) at www.principalam.com/etfperformance.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jeff Callahan (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Zach Gassmann (since 2026), Portfolio Manager

**Purchase and Sale of Fund Shares**

The Fund issues and redeems Shares at net asset value ("NAV") only with authorized participants ("APs") who have entered into agreements with the Fund's distributor in exchange for the deposit or delivery of a basket of securities that the Fund specifies each day. Except when aggregated in creation

------

units, the Shares are not redeemable securities of the Fund. Typically, the basket of assets will be made up of securities but may include a cash component. (See "Purchase and Redemption of Creation Units" in the Statement of Additional Information for more information.)

Shares of the Fund are listed for trading on Cboe BZX Exchange, Inc. Individual Shares may only be bought and sold in the secondary market through a broker or dealer at a market price. Because Shares trade at market prices rather than NAV, Shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or selling Shares on the secondary market (the bid-ask spread).

You can access recent information, including information on the Fund's net asset value, market price, premiums and discounts, and bid-ask spreads (when available) at www.PrincipalAM.com.

**Tax Information**

The Fund's distributions you receive are generally subject to federal income tax as ordinary income or capital gain and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-deferred in which case your distributions would be taxed when withdrawn from the tax-deferred account.

**Payments to Broker-Dealers and Other Financial Intermediaries**

If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL SECURITIZED DEBT ETF**

**Objective:** The Fund seeks to provide current income and, as a secondary objective, capital appreciation during periods of U.S. corporate credit spread widening.

**Fees and Expenses of the Fund**

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table or the example below.**

**Annual Fund Operating Expenses**

**(expenses that you pay each year as a percentage of the value of your investment)**

---

| | |
|:---|:---|
| Management Fees | 0.19% |
| Other Expenses<sup>(1)</sup> | 0.00% |
| **Total Annual Fund Operating Expenses<sup>(2)</sup>** | **0.19%** |

---

<sup>(1)</sup> Based on estimated amounts.

<sup>(2)</sup> The investment management agreement (the "Management Agreement") between the Fund and Principal Global Investors, LLC ("PGI") provides that, for the duration of the Management Agreement, PGI will pay all operating expenses of the Fund, except for the Management Fee, payments made under the Fund's Rule 12b-1 plan (if or when such fees are imposed), brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses, and tax reclaim recovery expenses and other extraordinary expenses.

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the ends of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | |
|:---|:---|:---|
| | **1 Year** | **3 Years** |
| Principal Securitized Debt ETF | $19 | $61 |

---

**Portfolio Turnover**

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. This Fund is new and does not have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in securitized credit investments. Securitized credit investments are investments that offer exposure to pools of mortgages, loans, receivables or other assets, such as agency and non-agency mortgage-backed securities ("MBS") (including commercial mortgage-backed securities ("CMBS"), residential mortgage-backed securities and collateralized mortgage obligations), asset-backed securities ("ABS") (including collateralized loan obligations ("CLOs")) and other similar securities and related instruments. The Fund may also invest in other fixed-income securities, cash and cash equivalents (such as U.S. government securities, which includes U.S. Treasury securities and securities issued or guaranteed by U.S. government agencies and instrumentalities).

The majority of the Fund's investments will be rated investment-grade. The Fund is not managed to a particular maturity. Under normal circumstances, the Fund maintains an average portfolio duration that is within +/- 50% of the duration of a custom index (40% Bloomberg US MBS Index, 30% Bloomberg US ABS Index, and 30% Bloomberg US CMBS Index) (the "Bloomberg US Securitized: MBS/ABS/CMBS Blended Index"), which as of March 31, 2026 was 5.16 years.

------

The Fund will invest in derivatives, including futures, credit default swaps and other types of swaps, for hedging purposes, for tactical positioning, and to manage duration. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

The Fund's investment process relies on the professional judgment of the team's portfolio managers and analysts to carry out an approach that combines fundamental, technical and valuation considerations to source ideas in both a top-down and bottom-up fashion. The portfolio managers evaluate the relative value of securitized debt sectors and assess risk and opportunity within distinct securitized asset classes. Portfolio managers will consider this assessment when selecting securities and constructing the Fund's portfolio to ensure each position reflects a deliberate investment to align with client goals.

The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

**Principal Risks**

The value of your investment in the Fund changes with the value of the Fund's investments. Many factors affect that value, and it is possible to lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**Active Management Risk.** There is no guarantee that the investment techniques, analyses, or judgments that the Fund's investment advisor and/or sub-advisor applies in making investment decisions for the Fund will produce the intended outcome or that the investments the advisor selects for the Fund will perform as well as other securities that were not selected for the Fund. The Fund may not achieve its investment objective, and it is not intended to be a complete investment program.

**Cash Transactions Risk.** Unlike certain ETFs, the Fund expects to effect its creations and redemptions primarily for cash, rather than primarily for in-kind securities. As such, investments in shares may be less tax-efficient than an investment in a conventional ETF that generally is able to make in-kind redemptions and avoid realizing gains in connection with transactions designed to raise cash to meet redemption requests.

**CLO Risk.** The risks of investing in CLO securities include both the economic risks of the underlying loans combined with the risks associated with the CLO structure governing the priority of payments. CLO securities are backed by an underlying portfolio of loan obligations. CLO securities issue tranches of debt that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and exhaustion of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLO securities depend largely on the tranche in which a Fund is invested and the type of the underlying loans in the tranche of the CLO security in which a Fund invests. Subordinate tranche investments involve greater risk of loss than more senior tranches. However, ratings do not constitute a guarantee of credit quality and may be downgraded, and in stressed market environments it is possible that even senior CLO debt tranches could experience losses due to these risk factors. The Fund's portfolio managers may not be able to accurately predict how specific CLO securities or the portfolio of underlying loans for such CLO securities will react to changes or stresses in the market, including changes in interest rates. Some risks associated with investing in CLO securities include, but not limited to, liquidity risk, interest rate risk, credit risk, call risk, and the risk of default of the underlying asset.

**CLO Manager Risk.** CLO managers may have limited operating histories, may be subject to conflicts of interests, including managing the assets of other clients or other investment vehicles, or receiving fees that incentivize maximizing the yield, and indirectly the risk, of a CLO. Adverse developments with respect to a CLO manager, such as personnel and resource constraints, regulatory issues or other developments that may impact the ability and/or performance of the CLO manager, may adversely impact the performance of the CLO securities in which the Fund invests.

**Counterparty Risk.** Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations.

------

**Derivatives Risk.** Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so, and result in disproportionate losses that may be substantially greater than a fund's initial investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Credit Default Swaps.** Credit default swaps involve special risks in addition to those associated with swaps generally because they are difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). The protection "buyer" in a credit default contract may be obligated to pay the protection "seller" an up-front payment or a periodic stream of payments over the term of the contract, provided, generally, that no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the "par value" (i.e., full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. The Fund may be either the buyer or seller in the transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Futures.** Futures contracts involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Swaps.** Swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the swap; possible lack of a liquid secondary market for a swap and the resulting inability to close a swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.

**Fixed-Income Securities Risk.** Fixed-income securities are subject to interest rate, credit quality, and liquidity risks. The market value of fixed-income securities generally declines when interest rates rise, and increased interest rates may adversely affect the liquidity of certain fixed-income securities. Moreover, an issuer of fixed-income securities could default on its payment obligations due to increased interest rates or for other reasons.

**Floating and Variable Rate Securities Risk.** The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities of fixed interest rates. Floating and variable rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected. Floating and variable rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund's ability to sell the securities at any given time.

**Hedging Risk.** A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the fund.

**High Portfolio Turnover Risk.** High portfolio turnover (more than 100%) caused by active and frequent trading of portfolio securities may result in accelerating the realization of taxable gains and losses, lower fund performance, and increased brokerage costs.

**Market Trading Risks.** The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption to the activities of market makers, limited pool of authorized participants, or other participants and in the creation / redemption process of the Fund. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.

**Portfolio Duration Risk.** Portfolio duration is a measure of the expected life of a fixed-income security and its sensitivity to changes in interest rates. The longer a fund's average portfolio duration, the more

------

sensitive the fund will be to changes in interest rates, which means funds with longer average portfolio durations may be more volatile than those with shorter durations.

**Redemption and Large Transaction Risk.** Ownership of the Fund's shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may sell or purchase Fund shares in large quantities on the secondary market. These secondary market transactions may cause authorized participants to increase their purchases and redemptions of creation units from the Fund. Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund's liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on the Fund's exchange and may, therefore, have a material upward or downward effect on the market price of the shares.

**Securitized Products Risk.** Investments in securitized products are subject to risks similar to traditional fixed-income securities, such as credit, interest rate, liquidity, prepayment, extension, and default risk, as well as additional risks associated with the nature of the assets and the servicing of those assets. Unscheduled prepayments on securitized products may have to be reinvested at lower rates. A reduction in prepayments may increase the effective maturities of these securities, exposing them to the risk of decline in market value over time (extension risk).

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

**U.S. Government-Sponsored Securities Risk.** Securities issued by U.S. government-sponsored enterprises such as the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, and the Federal Home Loan Banks are not issued or guaranteed by the U.S. government.

**U.S. Treasury Securities Risk.** A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices for such securities are not guaranteed and will fluctuate. Because U.S. Treasury Securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. In addition, changes in the credit rating or financial condition of the U.S. government may cause the value of U.S. Treasury securities to decline.

**Performance**

No performance information is shown because the Fund has not yet had a calendar year of performance. The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Bloomberg US Securitized: MBS/ABS/CMBS Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives. When performance information is available, performance of each component of the blended index will be shown. The weightings of the components of the Bloomberg US Securitized: MBS/ABS/CMBS Blended Index are as follows: 40% Bloomberg US MBS Index, 30% Bloomberg US ABS Index, and 30% Bloomberg US CMBS Index. Performance information provides an indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information (when available) at www.principalam.com/etfperformance.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Zach Gassmann (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jason Haigh (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Laura Rank (since 2026), Portfolio Manager

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jed Weirup (since 2026), Portfolio Manager

**Purchase and Sale of Fund Shares**

The Fund issues and redeems Shares at net asset value ("NAV") only with authorized participants ("APs") who have entered into agreements with the Fund's distributor in exchange for the deposit or

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delivery of a basket of securities that the Fund specifies each day. Except when aggregated in creation units, the Shares are not redeemable securities of the Fund. Typically, the basket of assets will be made up of securities but may include a cash component. (See "Purchase and Redemption of Creation Units" in the Statement of Additional Information for more information.)

Shares of the Fund are listed for trading on Cboe BZX Exchange, Inc. Individual Shares may only be bought and sold in the secondary market through a broker or dealer at a market price. Because Shares trade at market prices rather than NAV, Shares may trade at prices greater than NAV (at a premium), at NAV, or less than NAV (at a discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or selling Shares on the secondary market (the bid-ask spread).

You can access recent information, including information on the Fund's net asset value, market price, premiums and discounts, and bid-ask spreads (when available) at www.PrincipalAM.com.

**Tax Information**

The Fund's distributions you receive are generally subject to federal income tax as ordinary income or capital gain and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-deferred in which case your distributions would be taxed when withdrawn from the tax-deferred account.

**Payments to Broker-Dealers and Other Financial Intermediaries**

If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

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**ADDITIONAL INFORMATION ABOUT INVESTMENT STRATEGIES AND RISKS**

Each Fund's investment objective is described in the summary section for each Fund. The summary section also describes each Fund's principal investment strategies, including the types of securities in which each Fund invests, and the principal risks of investing in each Fund. The principal investment strategies are not the only investment strategies available to each Fund, but they are the ones each Fund primarily uses to achieve its investment objective.

Except for Fundamental Restrictions described in the Registrant's Statement of Additional Information ("SAI"), the Registrant's Board (the "Board") may change any Fund's objective or investment strategies without a shareholder vote if it determines such a change is in the best interests of the Fund. If there is a material change to a Fund's investment objective or investment strategies, you should consider whether the Fund remains an appropriate investment for you. There is no guarantee that each Fund will meet its objective.

For purposes of determining compliance with a Fund's 80% investment policy adopted pursuant to SEC Rule 35d-1, derivatives instruments used by the Fund may be counted toward the Fund's 80% investment policy to the extent they provide investment exposure to investments included within that policy or to one or more of the market risk factors associated with investments included in that policy.

For purposes of determining a Fund's compliance with the Fund's 80% investment policy, the Fund may, to the extent permitted by its principal investment strategy, seek to obtain exposure to investments consistent with the investment focus that the Fund's name suggests, through a variety of investment vehicles, where the identity of those underlying portfolio securities can be reasonably determined or where the fund has an 80% investment policy to invest in investments consistent with the investment focus that the Fund's name suggests. In such cases, the Fund may look through to the underlying holdings of investment companies in which the Fund invests or may include the entire value of the Fund's investment in other appropriate investment companies without looking through to the holdings of such investment companies.

Each Fund is designed to be a portion of an investor's portfolio. No Fund is intended to be a complete investment program. Investors should consider the risks of a Fund before making an investment; it is possible to lose money by investing in a Fund.

The following investment strategies and risks (before the "Strategy and Risk Table" below) apply to the Funds and, depending on market conditions, can materially impact the management of the Funds.

**Cash Management**

A Fund may have uninvested cash balances pending investment in other securities, pending payment of redemptions, or in other circumstances where liquidity is necessary or desirable. A Fund may hold uninvested cash; invest it in cash equivalents such as money market funds, including the Principal Funds, Inc. — Government Money Market Fund; lend it to other Funds pursuant to the Funds' interfund lending facility; and/or invest in other instruments that those managing the Fund's assets deem appropriate for cash management purposes. Generally, these types of investments offer less potential for gains than other types of securities. For example, to attempt to provide returns similar to its benchmark, a Fund (regardless of how it designates usage of derivatives and investment companies) may invest uninvested cash in derivatives, such as total return swaps, the credit default swap index (CDX), stock index futures contracts, or exchange-traded funds ("ETFs"), including Principal Exchange-Traded Funds ETFs. In selecting such investments, Principal Global Investors, LLC ("PGI"), the Funds' investment advisor, may have conflicts of interest due to economic or other incentives to make or retain an investment in certain affiliated funds instead of in other investments that may be appropriate for a Fund.

**Liquidity**

The Funds have established a liquidity risk management program as required by the U.S. Securities and Exchange Commission's (the "SEC") Liquidity Rule. Under the program, PGI assesses, manages, and periodically reviews each Fund's liquidity risk, which is the risk that a Fund could not meet requests to redeem shares issued by the Fund without significant dilution of the remaining investors' interests in the Fund. As part of the program, PGI classifies each investment as a "highly liquid investment," "moderately liquid investment," "less liquid investment," or "illiquid investment." The liquidity of a Fund's portfolio investments is determined based on relevant market, trading, and investment-specific considerations

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under the program. To the extent that an investment is deemed to be an illiquid investment or a less liquid investment, a Fund can expect to be exposed to greater liquidity risk.

Certain fund holdings may be deemed to be less liquid or illiquid because they cannot be readily sold without significantly impacting the value of the holdings. A fund is exposed to liquidity risk when trading volume, lack of a market maker, or legal restrictions impair its ability to sell particular securities or close derivative positions at an advantageous price. Funds with principal investment strategies that involve securities of companies with smaller market capitalizations, foreign securities, derivatives, high yield bonds, and bank loans, or securities with substantial market and/or credit risk, tend to have the greatest exposure to liquidity risk.

Liquidity risk also refers to the risk of unusually high redemption requests, redemption requests by certain large shareholders such as institutional investors or asset allocators, or other unusual market conditions that may make it difficult for a fund to sell investments within the allowable time period to meet redemptions. Meeting such redemption requests could require a fund to sell securities at reduced prices or under unfavorable conditions, which would reduce the value of the fund.

Additional liquidity risks that apply to ETFs are described under "Market Trading Risks" below.

**Market Volatility and Securities Issuers**

The value of a fund's portfolio securities may decrease in response to overall stock or bond market movements. Markets tend to move in cycles, with periods of rising prices and periods of falling prices. Stocks tend to go up and down in value more than bonds. The value of a security may decline for reasons directly related to the issuer, such as management performance, financial leverage, and reduced demand for the issuer's goods or services. As a result, the value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole.

Additionally, U.S. and world economies, as well as markets (or certain market sectors), may experience greater volatility in response to the occurrence of, or the threat or potential of, natural or man-made disasters and geopolitical events, such as war, acts of terrorism, pandemics, military actions, trade disputes, tariffs, economic sanctions, inflation, rapid interest rate changes, supply chain disruptions, political instability or social unrest. Moreover, if a fund's investments are concentrated in certain sectors, its performance could be worse than the overall market.

Global events can impact the securities markets. The risk of actual or threatened war or military conflict (such as Russia's invasion of Ukraine, the conflict between Israel and Hamas, and rising tensions involving the United States, Israel, and Iran) has caused and could continue to cause significant market disruptions and volatility in global markets. The extent and duration of any such military action, sanctions resulting from those hostilities, and resulting market disruptions could be substantial.

Health crises, such as a global pandemic, may exacerbate other pre-existing political, social, economic, market, and financial risks and negatively affect the global economy, as well as the economies of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant ways.

Market disruption events could also impair the information technology and other operational systems upon which a fund's investment advisor or sub-advisor rely, and could otherwise disrupt the ability of the fund's service providers to perform essential tasks. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in a fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments.

Governmental and quasi-governmental authorities and regulators throughout the world, such as the Federal Reserve, have in the past responded to major economic disruptions with a variety of significant fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs, and dramatic changes to interest rates. Such policy changes may adversely affect the value, volatility, and liquidity of dividend and interest-paying securities.

The impact of current and future market disruption events may last for an extended period of time and could result in a substantial economic downturn or recession. Such events could have significant adverse direct or indirect effects on the funds and their investments, and may result in a fund's inability

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to achieve its investment objective, cause funds to experience significant redemptions, cause the postponement of reconstitution/rebalance dates of passive funds' underlying indices, adversely affect the prices and liquidity of the securities and other instruments in which a fund invests, negatively impact the fund's performance, and cause losses on your investment in the fund. You should also review this Prospectus and the SAI to understand each Fund's discretion to implement temporary defensive measures, as well as the circumstances in which a Fund may satisfy redemption requests in-kind.

**Securities Lending**

To generate additional income, a Fund may lend its portfolio securities to broker-dealers and other institutional borrowers to the extent permitted under the Investment Company Act of 1940, as amended (the "1940 Act") or the rules, regulations, or interpretations thereunder. A Fund that lends its securities will continue to receive amounts equal to the interest or dividend payments generated by the loaned securities. In addition to receiving these amounts, the Fund generates income on the loaned securities by receiving a fee from the borrower, and by earning interest on the collateral received from the borrower. A negotiated portion of the income is paid to a securities lending agent (e.g., a bank or trust company) that arranged the loan. During the term of the loan, the Fund's investment performance will reflect changes in the value of the loaned securities.

A borrower's obligations under a securities loan is secured continuously by collateral posted by the borrower and held by the custodian in an amount at least equal to the market value of the loaned securities. Generally, cash collateral that a Fund receives from securities lending activities will be invested in money market funds, which may include the Principal Funds, Inc. — Government Money Market Fund, which is managed by PGI and for which PGI receives a management fee. Collateral may also be invested in unaffiliated money market funds.

Securities lending involves exposure to certain risks, including the risk of losses resulting from problems in the settlement and accounting process; the risk of a mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to pay a borrower; and credit, legal, counterparty, and market risk. A Fund's participation in a securities lending transaction may affect the amount, timing, and character of distributions derived from such transaction to shareholders. Qualified dividend income does not include "payments in lieu of dividends," which the Funds anticipate they will receive in securities lending transactions.

**Temporary Defensive Measures**

From time to time, as part of its investment strategy, a Fund may invest without limit in cash and cash equivalents for temporary defensive purposes in response to adverse market, economic, or political conditions. For this purpose, cash equivalents include: bank notes, bank certificates of deposit, bankers' acceptances, repurchase agreements, commercial paper, and commercial paper master notes, which are floating rate debt instruments without a fixed maturity. In addition, a Fund may purchase U.S. government securities, preferred stocks, and debt securities, whether or not convertible into or carrying rights for common stock. There is no limit on the extent to which a Fund may take temporary defensive measures. In taking such measures, a Fund may lose the benefit of upswings and may limit its ability to meet, or fail to achieve, its investment objective.

**Trading Issues**

Although the shares of the Funds are expected to be listed on the exchange identified in the fund summary for each Fund, there can be no assurance that an active trading market for such shares will develop or be maintained. Trading in Shares on the exchange may be halted due to market conditions or for reasons that, in the view of the exchange, make trading in Shares inadvisable. In addition, trading in Shares on the exchange is subject to trading halts caused by extraordinary market volatility pursuant to the exchange's "circuit breaker" rules. There can be no assurance that the requirements of the exchange necessary to maintain the listing of a Fund will continue to be met or will remain unchanged.

**Strategy and Risk Table**

The following table lists each Fund and identifies whether the strategies and risks discussed in this section (listed in alphabetical order and not in order of significance) are principal for each Fund. Each Fund is also subject to the risks of any underlying funds in which it invests.

The SAI contains additional information about investment strategies and their related risks.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **Principal CLO<br>ETF** | **Principal CLO<br>ETF** | **Principal Inflation<br>Protection ETF** | **Principal Inflation<br>Protection ETF** | **Principal Long<br>Duration ETF** | **Principal Long<br>Duration ETF** | **Principal<br>Securitized Debt<br>ETF** | **Principal<br>Securitized Debt<br>ETF** |
| Active Management Risk |  | X |  | X |  | X |  | X |
| Cash Transactions Risk |  | X | | | | |  | X |
| Collateralized Loan Obligations ("CLO") Risk |  | X | | | | |  | X |
| CLO Manager Risk |  | X | | | | |  | X |
| Counterparty Risk |  | X |  | X |  | X |  | X |
| Deflation Risk | | |  | X | | | | |
| Derivatives Risk |  | X |  | X |  | X |  | X |
| Fixed-Income Securities Risk |  | X |  | X |  | X |  | X |
| Floating and Variable Rate Securities Risk |  | X | | | | |  | X |
| Hedging Risk |  | X |  | X |  | X |  | X |
| High Portfolio Turnover Risk |  | X |  | X |  | X |  | X |
| Interest Rate Risk | | |  | X |  | X | | |
| Market Trading Risks |  | X |  | X |  | X |  | X |
| Portfolio Duration Risk |  | X |  | X |  | X |  | X |
| Redemption and Large Transaction Risk |  | X |  | X |  | X |  | X |
| Securitized Products Risk |  | X | | | | |  | X |
| Treasury Inflation Protected Securities ("TIPS") Risk | | |  | X | | | | |
| U.S. Government and U.S. Government-<br>Sponsored Securities Risk |  | X | | | | |  | X |
| U.S. Treasury Securities Risk |  | X |  | X |  | X |  | X |
| U.S. Treasury STRIPS Risk | | | | |  | X | | |

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**Active Management**

The performance of a fund that is actively managed (including hybrid funds or passively managed funds that use a sampling approach that includes some actively managed components) will reflect, in part, the ability of those managing the investments of the fund to make investment decisions that are suited to achieving the fund's investment objective. Actively managed funds may invest differently from the benchmark against which the fund's performance is compared. When making decisions about whether to buy or sell equity securities, considerations may include, among other things, a company's strength in fundamentals, its potential for earnings growth over time, its ability to navigate certain macroeconomic environments, the current price of its securities relative to their perceived worth and relative to others in its industry, and analysis from computer models. When making decisions about whether to buy or sell fixed-income investments, considerations may include, among other things, the strength of certain sectors of the fixed-income market relative to others; interest rates; a range of economic, political, and financial factors; the balance between supply and demand for certain asset classes; the credit quality of individual issuers; the fundamental strengths of corporate and municipal issuers; and other general market conditions.

Models, which may assist portfolio managers and analysts in formulating their securities trading and allocation decisions by providing investment and risk management insights, may also expose a fund to risks. Models may be predictive in nature, which models depend heavily on the accuracy and reliability of historical data that is supplied by others and may be incorrect or incorrectly input. The fund bears the risk that the quantitative models used will not be successful in identifying trends or in determining the size and direction of investment positions that will enable the fund to achieve its investment objective. In addition, "model prices" will often differ substantially from market prices, especially for instruments with complex characteristics, such as derivative instruments.

An active fund's investment performance depends upon the successful allocation of the fund's assets among asset classes, geographical regions, industry sectors, and specific issuers and investments. There is no guarantee that these allocation techniques and decisions will produce the desired results. It is possible to lose money on an investment in a fund as a result of these allocation decisions. If a fund's investment strategies do not perform as expected, the fund could underperform other funds with similar investment objectives or lose money. Moreover, buying and selling securities to adjust the fund's asset allocation may increase portfolio turnover and generate transaction costs.

Investment advisors with large assets under management in a Fund, or in other funds that have the same strategy as a Fund, may have difficulty fully investing such Fund's assets according to its

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investment objective due to potential liquidity constraints and high transaction costs. Typically, small-cap, mid-cap, and emerging market equity funds are more susceptible to such a risk. A Fund may add additional investment advisors or close the Fund to new investors to address such risks.

**Cash Transactions**

Unlike certain ETFs, a fund may effect its redemptions partially for cash, rather than primarily for in-kind securities. As a result, an investment in such fund may be less tax-efficient than an investment in a more conventional ETF. Other ETFs generally are able to make in-kind redemptions and avoid realizing gains in connection with transactions designed to raise cash to meet redemption requests. If the fund currently intends to effect all or a portion of redemptions, as applicable, for cash, rather than in-kind distributions, it may be required to sell portfolio securities in order to obtain the cash needed to distribute redemption proceeds, which involves transaction costs. If the fund recognizes gain on these sales, this generally will cause the fund to recognize gain it might not otherwise have recognized if it were to distribute portfolio securities in-kind, or to recognize such gain sooner than would otherwise be required. Such a fund generally intends to distribute these gains to shareholders to avoid being taxed on this gain at the fund level and otherwise comply with the special tax rules that apply to it. This strategy may cause shareholders to be subject to tax on gains they would not otherwise be subject to, or at an earlier date than, if they had made an investment in a different ETF.

**CLO Risk**

CLOs bear many of the same risks as other forms of asset-backed securities, including interest rate risk, credit risk and default risk. As they are backed by pools of loans, CLOs also bear similar risks to investing in loans directly. CLOs issue classes or "tranches" of debt that vary in risk and yield and may experience substantial losses due to loan defaults, decrease of market value due to collateral defaults and exhaustion of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying loans in the tranche of the CLO in which a Fund invests. For example, losses caused by defaults on underlying assets are borne first by the holders of subordinate tranches. To the extent that a Fund invests in unrated CLO tranches, the Fund's ability to achieve its investment objective will be more dependent on the Advisor's credit analysis than would be the case when a Fund invests in rated CLO tranches.

**CLO Manager Risk**

CLOs are managed by investment advisers independent of PGI. CLO managers are responsible for selecting, managing and replacing the underlying bank loans or bonds within a CLO. CLO managers may have limited operating histories, may be subject to conflicts of interests, including managing the assets of other clients or other investment vehicles, or receiving fees that incentivize maximizing the yield, and indirectly the risk, of a CLO. Adverse developments with respect to a CLO manager, such as personnel and resource constraints, regulatory issues or other developments that may impact the ability and/or performance of the CLO manager, may adversely impact the performance of the CLO securities in which a Fund invests.

**Counterparty Risk**

Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations. If a counterparty fails to meet its contractual obligations, goes bankrupt, or otherwise experiences a business interruption, a fund could miss investment opportunities or otherwise hold investments it would prefer to sell, resulting in losses for the fund. In addition, a fund may suffer losses if a counterparty fails to comply with applicable laws or other requirements. Counterparty risk is pronounced during unusually adverse market conditions and is particularly acute in environments in which financial services firms are exposed to systemic risks.

**Deflation Risk**

A Fund will be subject to the risk that prices throughout the economy may decline over time, resulting in "deflation." If this occurs, the principal and income of inflation-protected fixed-income securities held by the Fund would likely decline in price, which could result in losses for the Fund.

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**Derivatives**

Generally, a derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. A fund may invest in certain derivative strategies to earn income, manage or adjust the risk profile of the fund, replace more direct investments, or obtain exposure to certain markets. A fund may enter into forward commitment agreements, which call for the fund to purchase or sell a security on a future date at a fixed price. A fund may also enter into contracts to sell its investments either on demand or at a specific interval.

The risks associated with derivative investments include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased volatility of a fund and/or the failure of the investment to mitigate volatility as intended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the inability of those managing investments of the fund to correctly predict the direction of securities prices, interest rates, currency exchange rates, asset values, and other economic factors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• losses caused by unanticipated market movements, which may be substantially greater than a fund's initial investment and are potentially unlimited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the possibility that there may be no liquid secondary market, which may make it difficult or impossible to close out a position when desired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the possibility that the counterparty may fail to perform its obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the inability to close out certain hedged positions to avoid adverse tax consequences.

There are many different types of derivatives and many different ways to use them. The specific derivatives that are principal strategies of each Fund are listed in its Fund Summary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commodity Index-Linked Notes are derivative debt instruments issued by U.S. and foreign banks, brokerage firms, insurance companies and other corporations with principal and/or coupon payments linked to the performance of commodity indices. These notes expose a fund to movements in commodity prices. They are also subject to credit, counterparty, and interest rate risk. Commodity index-linked notes are often leveraged, increasing the volatility of each note's market value relative to changes in the underlying commodity index. At the maturity of the note, a fund may receive more or less principal than it originally invested. A fund may also receive interest payments on the note that are less than the stated coupon interest payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Credit default swap agreements may be entered into by a fund as a "buyer" or "seller" of credit protection. Credit default swap agreements involve special risks because they may be difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). Credit default swaps can increase credit risk because a fund has exposure to both the issuer of the referenced obligation and the counterparty to the credit default swap.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Forwards, futures contracts, and options thereon (including commodities futures); options (including put or call options); and swap agreements and over-the-counter swap agreements (e.g., interest rate swaps, total return swaps, and credit default swaps) may be used by funds for hedging purposes in order to try to mitigate or protect against potential losses due to changing interest rates, securities prices, asset values, currency exchange rates, and other market conditions; non-hedging purposes to seek to increase the fund's income or otherwise enhance return; and as a low-cost method of gaining exposure to a particular market without investing directly in those securities or assets.

These derivative investments are subject to special risk considerations, particularly that changes in the value of the derivative may not correlate perfectly with, and may be more sensitive to market events than, the underlying asset, rate, or index, and the fund could lose more than the initial amount invested. In addition, if a fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, even when it may be disadvantageous to do so. Options and swap agreements also involve counterparty risk. With respect to options, there may be differences in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets

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that cannot be reflected in the options markets) and an insufficient liquid secondary market for particular options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Index/structured securities are derivative securities whose value or performance is linked to other equity securities (such as depositary receipts), currencies, interest rates, indices, or other financial indicators (reference indices).

**Fixed-Income Securities**

Fixed-income securities include bonds and other debt instruments that are used by issuers to borrow money from investors (examples include corporate bonds, convertible securities, asset-and mortgage-backed securities, and municipal, agency, and U.S. government securities). The issuer of a fixed-income security generally pays the investor a fixed, variable, or floating rate of interest. The amount borrowed must be repaid at maturity. Some debt securities, such as zero-coupon bonds, do not pay current interest, but are sold at a discount from their face values.

Fixed-income securities are sensitive to changes in interest rates. Interest rate changes can be sudden and unpredictable, and are influenced by a number of factors, including governmental policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand for fixed-income securities. In general, fixed-income security prices rise when interest rates fall and fall when interest rates rise. An increase in interest rates from a low interest rate environment may lead to heightened volatility, rapid sales of fixed-income securities, and redemptions alongside reduced liquidity and dealer market-making capacity in fixed-income markets.

If interest rates fall, issuers of callable bonds may call (repay) securities with high interest rates before their maturity dates; this is known as call risk. In this case, an investor, such as a Fund, would likely reinvest the proceeds from these securities at lower interest rates, resulting in a decline in the Fund's income. Very low interest rates, including rates that fall below zero (where banks charge for depositing money), may detract from a Fund's performance and its ability to maintain positive returns to the extent the Fund is exposed to such interest rates. To the extent a Fund is exposed to an investment with a negative interest rate to maturity, the Fund would generate a negative return on that investment. Floating rate securities generally are less sensitive to interest rate changes but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not generally increase in value if interest rates decline.

In June 2023, the Secured Overnight Financing Rate ("SOFR") replaced the London InterBank Offered Rate ("LIBOR") as the benchmark interest rate for dollar-denominated derivatives and loans in the United States pursuant to the Adjustable Interest Rate (LIBOR) Act. Prior to the adoption of SOFR, LIBOR was the globally accepted benchmark for interest rates; however, the United Kingdom's Financial Conduct Authority, which regulated LIBOR, ceased publication of LIBOR rates on June 30, 2023. Countries outside of the United States have opted to use different alternatives to LIBOR than SOFR. The effect of LIBOR's discontinuation and replacement on new or existing financial instruments or operational processes will vary depending on a number of factors, including, for example, fallback provisions in contracts, replacement language in contracts, and legislative action. In addition, LIBOR's discontinuation and replacement may affect the value, liquidity, or return on certain investments to which a Fund is exposed and may result in costs in connection with closing out positions and entering into new trades. These impacts are likely to persist until new reference rates and fallbacks for both legacy and new instruments and contracts are commercially accepted and market practices become settled. SOFR is calculated by short-term repurchase agreements, backed by U.S. Treasuries. LIBOR was a forward-looking rate, while SOFR reflects an overnight rate, making SOFR much less susceptible to market fluctuations and manipulations than LIBOR.

Fixed-income securities are also affected by the credit quality of the issuer. Investment-grade debt securities are medium and high-quality securities. Some bonds, such as lower grade or "junk" bonds, may have speculative characteristics and may be particularly sensitive to economic conditions and the financial condition of the issuers. Credit risk refers to the possibility that the issuer of the security will not be able to make principal and interest payments when due.

Additionally, a Fund's exposure to investments in companies with smaller market capitalizations may involve greater risks, price volatility (wide, rapid fluctuations), and less liquidity than investments in larger, more mature companies.

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**Floating and Variable Rate Securities Risk**

Floating and variable rate securities provide for periodic adjustment in the interest rate paid on the securities. The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities of fixed interest rates. Floating and variable rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected, and generally carry lower yields than fixed securities of the same maturity. Floating and variable rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund's ability to sell the securities at any given time.

These securities will not generally increase in value if interest rates decline. A decline in interest rates may result in a reduction in income received from variable and floating rate securities held by the Fund and may adversely affect the value of the Fund's shares. Floating rate securities generally are subject to legal or contractual restrictions on resale, may trade infrequently, and their value may be impaired when the Fund needs to liquidate such loans. Benchmark interest rates may not accurately track market interest rates. Although floating rate securities are less sensitive to interest rate risk than fixed-rate securities, they are subject to credit risk and default risk, which could impair their value.

**Hedging**

Hedging is a strategy that can be used to attempt to mitigate or protect against potential losses due to changing interest rates, securities prices, asset values, currency exchange rates, and other market conditions. The success of a fund's hedging strategy will be subject to the ability of those managing the fund's investments to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged. Since the characteristics of many investments change as markets change or time passes, the success of a fund's hedging strategy will also be subject to the ability of those managing the fund's investments to continually recalculate, readjust, and execute hedges in an efficient and timely manner. For a variety of reasons, those managing the fund's investments may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Such imperfect correlation may prevent a fund from achieving the intended hedge or expose a fund to risk of loss. In addition, it is not possible to hedge fully or perfectly against any risk, and hedging entails its own costs.

**High Portfolio Turnover**

"Portfolio turnover" is the term used in the industry for measuring the amount of trading that occurs in a fund's portfolio during the year. For example, a 100% turnover rate means that, on average, every security in the portfolio has been replaced once during the year. Funds with high turnover rates (more than 100%) often have higher transaction costs (which are paid by the fund), may result in higher taxes when fund shares are held in a taxable account, and may lower the fund's performance. High portfolio turnover can result in a lower capital gain distribution due to higher transaction costs added to the basis of the assets or can result in lower ordinary income distributions to shareholders when the transaction costs cannot be added to the basis of assets. Both events reduce fund performance.

Please consider all the factors when you compare the turnover rates of different funds. You should also be aware that the "total return" line in the Financial Highlights section reflects portfolio turnover costs.

**Interest Rate Risk**

When interest rates increase, fixed-income securities or instruments held by a Fund (which may include inflation protected securities) will generally decline in value. Long-term fixed-income securities or instruments will normally have more price volatility because of this risk than short-term fixed-income securities or instruments. A wide variety of market factors can cause interest rates to rise, including central bank monetary policy, rising inflation and changes in general economic conditions. Changing interest rates may have unpredictable effects on the markets, may result in heightened market volatility and may detract from Fund performance to the extent a Fund is exposed to such interest rates and/or volatility. In addition, changes in monetary policy may exacerbate the risks associated with changing interest rates. Generally, the longer the maturity of a bond or fixed rate loan, the more sensitive it is to this risk. For this reason, funds with longer average portfolio durations will generally be more sensitive to changes in interest rates than funds with a shorter average portfolio duration. Fluctuations in interest

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rates may also affect the liquidity of fixed-income securities and instruments held by a Fund, especially those with longer maturities.

It is difficult to predict the magnitude, timing or direction of interest rate changes and the impact these changes will have on the markets in which a Fund invests.

**Market Trading Risks**

The net asset value ("NAV") of the Shares generally will fluctuate with changes in the market value of each Fund's holdings. The market prices of the Shares generally will fluctuate in accordance with changes in NAV, as well as the relative supply of and demand for Shares on the respective exchanges, PGI cannot predict whether the Shares will trade below, at or above their NAV. Price differences may be due largely to the fact that supply and demand forces at work in the secondary trading market for the Shares will be related, but not identical, to the forces influencing the prices of the securities held by the Fund (individually or in the aggregate) at any time.

Only authorized participants ("APs") may engage in creation or redemption transactions directly with each Fund. (See "Purchase and Sale of Fund Shares-Generally.") The Fund has a limited number of institutions that may act as APs, none of which are or will be obligated to engage in creation or redemption transactions. To the extent that these institutions exit the business or are unable or unwilling to proceed with creation and/or redemption orders with respect to the Fund, and no other AP is able or willing to step forward to create or redeem creation units, Fund shares may trade at a discount to NAV and possibly face trading halts and/or delisting. Such disruptions to creations and redemptions or the existence of extreme market volatility may result in trading prices that differ significantly from NAV.

With respect to funds that invest in foreign securities, since foreign exchanges may be open on days when such a fund does not price its shares, the value of the fund's portfolio may change on days when shareholders will not be able to purchase or sell the fund's Shares, and may result in trading prices that differ significantly from NAV. Additionally, such funds may be subject to heightened risks since APs may be required to post collateral with such investments, which only certain APs are able to do. Moreover, to the extent that an AP is unable or unwilling to trade on an agency basis for foreign securities, there could be a diminished trading market for ETF shares, and shares may trade at a discount to NAV.

If a shareholder purchases at a time when the market price is at a premium to the NAV or sells at a time when the market price is at a discount to the NAV, the shareholder may sustain losses. Given that Shares can be created and redeemed only in creation units at NAV, PGI believes that large discounts and premiums should not be sustained over the long term.

**Portfolio Duration**

Average duration is a mathematical calculation of the average life of a bond (or for a bond fund, the average life of the fund's underlying bonds, weighted by the percentage of the fund's assets that each represents) that serves as a useful measure of its price risk. Duration is an estimate of how much the value of the bonds held by a fund will fluctuate in response to a change in interest rates. For example, if a fund has an average duration of 4 years and interest rates rise by 1%, the value of the bonds held by the fund will decline by approximately 4%, and if the interest rates decline by 1%, the value of the bonds held by the fund will increase by approximately 4%. Longer term bonds and zero-coupon bonds are generally more sensitive to interest rate changes. Duration, which measures price sensitivity to interest rate changes, is not necessarily equal to average maturity.

**Redemption and Large Transaction Risk**

Ownership of a fund's shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may redeem or purchase shares in large quantities. These transactions may cause a fund to sell securities to meet redemptions or to invest additional cash at times it would not otherwise do so, which may result in increased transaction costs, increased expenses, changes to expense ratios, and adverse effects to fund performance. Such transactions may also accelerate the realization of taxable income if sales of portfolio securities result in gains. Moreover, reallocations by large shareholders among share classes of a fund may result in changes to the expense ratios of affected classes, which may increase the expenses paid by shareholders of the class that experienced the redemption.

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Principal Funds, Inc. ("PFI") and Principal Variable Contracts Funds, Inc. ("PVC") funds of funds may own shares of ETFs as underlying funds. Principal Global Investors, LLC ("PGI") is the advisor to the PFI and PVC funds of funds and is committed to minimizing the potential impact of redemption and large transaction risk on underlying funds to the extent consistent with pursuing the investment objectives of the funds of funds that it manages. However, PGI and its affiliates may face conflicts of interest in fulfilling responsibilities to all such funds.

Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund's liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on the Fund's exchange and may, therefore, have a material upward or downward effect on the market price of the shares.

**Securitized Products**

Securitized products are fixed-income instruments that represent interests in underlying pools of collateral or assets. The value of the securitized product is derived from the performance, value, and cash flows of the underlying asset(s).

A fund's investments in securitized products are subject to risks similar to traditional fixed-income securities, such as credit, interest rate, liquidity, prepayment, extension, and default risk, as well as additional risks associated with the nature of the assets and the servicing of those assets. Prepayment risk may make it difficult to calculate the average life of a fund's investment in securitized products. Securitized products are generally issued as pass-through certificates, which represent the right to receive principal and interest payments collected on the underlying pool of assets, which are passed through to the security holder. Therefore, repayment depends on the cash flows generated by the underlying pool of assets. The securities may be rated as investment grade or below investment grade.

The specific securitized products that are principal strategies of each Fund are listed in its Fund Summary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mortgage-backed securities ("MBS") represent an interest in a pool of underlying mortgage loans secured by real property. MBS are sensitive to changes in interest rates but may respond to these changes differently from other fixed-income securities due to the possibility of prepayment of the underlying mortgage loans. If interest rates fall and the underlying loans are prepaid faster than expected, the fund may have to reinvest the prepaid principal in lower yielding securities, thus reducing the fund's income. Conversely, rising interest rates tend to discourage refinancings and the underlying loans may be prepaid more slowly than expected, reducing a fund's potential to reinvest the principal in higher yielding securities and extending the duration of the underlying loans. In addition, when market conditions result in an increase in default rates on the underlying loans and the foreclosure values of the underlying real estate is less than the outstanding amount due on the underlying loan, collection of the full amount of accrued interest and principal on these investments may be doubtful. The risk of such defaults is generally higher in the case of underlying mortgage pools that include sub-prime mortgages (mortgages granted to borrowers whose credit histories would not support conventional mortgages).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial mortgage-backed securities ("CMBS") represent an interest in a pool of underlying commercial mortgage loans secured by real property such as retail, office, hotel, multi-family, and industrial properties. CMBS are issued in several classes with different levels of yield and credit protection, and the CMBS class in which a fund invests influences the interest rate, credit, and prepayment risks. Many of the loans related to CMBS do not allow voluntary prepayment, which can help mitigate or eliminate prepayment risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Asset-backed securities ("ABS") are backed by non-mortgage assets such as company receivables, company loans, truck and auto loans, student loans, leases, and credit card receivables. ABS entail credit risk. They also may present a risk that, in the event of default, the liquidation value of the underlying assets may be inadequate to pay any unpaid interest or principal.

**TIPS Risk**

TIPS are debt instruments issued by the United States Department of the Treasury (the "U.S. Treasury"). As inflationary expectations increase, as measured by the Consumer Price Index ("CPI"), TIPS will increase in value, because they protect future interest payments against inflation; conversely, as

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inflationary concerns decrease, TIPS will decrease in value. When TIPS mature, investors are paid the adjusted principal or original principal, whichever is greater. Interest payments on TIPS are unpredictable and will fluctuate as the principal and corresponding interest payments are adjusted for inflation. Because of the inflation adjustment feature, TIPS typically have lower yields than fixed-rate bonds. There can be no assurance that the CPI will accurately measure the real rate of inflation in the prices of goods and services. Any increases in the principal amount of TIPS will be considered taxable ordinary income, even though the Fund or applicable underlying ETF will not receive the principal until maturity. As a result, the Fund may make income distributions to shareholders that exceed the cash it receives. In addition, TIPS are subject to credit risk, interest rate risk, and maturity risk.

**U.S. Government and U.S. Government-Sponsored Securities**

U.S. government securities, such as Treasury bills, notes, and bonds and mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Mae), are supported by the full faith and credit of the United States; others are supported by the right of the issuer to borrow from the U.S. Treasury; others are supported by the discretionary authority of the U.S. government to purchase the agency's obligations; and still others are supported only by the credit of the issuing agency, instrumentality, or enterprise.

Although U.S. government-sponsored enterprises such as the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury nor supported by the full faith and credit of the U.S. government.

There is no assurance that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight, and/or other consequences that could adversely affect the credit quality, availability, or investment character of securities issued by these entities. The value and liquidity of U.S. government securities may be affected adversely by changes in the ratings of those securities.

**U.S. Treasury Securities Risk**

A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity, but the market prices for such securities are not guaranteed and will fluctuate. Because U.S. Treasury Securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. In addition, changes in the credit rating or financial condition of the U.S. government may cause the value of U.S. Treasury securities to decline.

**U.S. Treasury STRIPS Risk**

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**PORTFOLIO HOLDINGS INFORMATION**

A description of the Funds' policies and procedures with respect to disclosure of the Funds' portfolio securities is available in the Funds' SAI.

**MANAGEMENT OF THE FUNDS**

**The Manager and Advisor**

Principal Global Investors, LLC ("PGI"), an indirect subsidiary of Principal Financial Group, Inc. ("Principal<sup>®</sup>"), serves as the manager and advisor for the Funds. Through the Management Agreement with the Trust, PGI provides investment advisory services and certain corporate administrative services for the Funds.

**Advisor: Principal Global Investors, LLC** (doing business as Principal Asset Management<sup>SM</sup>), 711 High Street, Des Moines, IA 50392, is part of a diversified global asset management organization that utilizes specialized investment teams and affiliates to provide institutional investors and individuals with diverse investment capabilities, including fixed-income, equities, real estate, and asset allocation. In addition to its asset management offices in the U.S., PGI has asset management offices of affiliate advisors located in Europe, Asia, Latin America, and Australia. PGI has been a registered investment advisor since 1998.

**Funds:** In fulfilling its investment advisory responsibilities, PGI provides the day-to-day discretionary investment services (directly making decisions to purchase or sell securities) for each Fund.

**Portfolio Managers**

As reflected in the Fund Summaries, the day-to-day portfolio management for some Funds is shared by multiple portfolio managers. In each such case, the portfolio managers operate as a team, sharing authority and responsibility for research and the day-to-day management of the Fund's portfolio with no limitation on the authority of one portfolio manager in relation to another.

The Fund summary identifies the portfolio managers of the Fund. Additional information about the portfolio managers follows. References to Principal<sup>®</sup> include the entire Principal organization. The SAI provides additional information about each portfolio manager's compensation, other accounts the portfolio managers manage, and each portfolio manager's ownership of securities in the Fund.

**Jeff Callahan** has been with Principal<sup>®</sup> since 2006. He earned a bachelor's degree in Business Administration with an emphasis in Finance from Wartburg College and an MBA from the University of Iowa. Mr. Callahan has earned the right to use the Chartered Financial Analyst designation.

**Zach Gassmann** has been with Principal<sup>®</sup> since 2007. He earned a bachelor's degree in Accounting from Simpson College and a master's degree in Financial Management from Drake University. Mr. Gassmann has earned the right to use the Chartered Financial Analyst designation.

**Jason Haigh** has been with Principal<sup>®</sup> since 1999. He earned a bachelor's degree in Finance and Economics from University of Northern Iowa.

**Laura Rank** has been with Principal<sup>®</sup> since 2023. Prior to that, Ms. Rank served as Head of Structured Securities as American Equity Life Insurance Company, from 2014 to 2023. She earned a bachelor's degree in Finance from Iowa State University. Ms. Rank has earned the right to use the Chartered Financial Analyst designation.

**Jed Weirup** has been with Principal<sup>®</sup> since 2023. Prior to that, Mr. Weirup served as a Portfolio Manager and Trader at Bayview Asset Management, from 2013 to 2022. He earned a bachelor's degree in Finance and Accounting from Clarke College and an MBA from The University of Iowa, Tippie School of Management. Mr. Weirup has earned the right to use the Chartered Financial Analyst designation.

**Participating Affiliate Agreement**

In rendering investment advisory services to a Fund, the advisor may use the resources of one or more of its respective foreign (non-U.S.) affiliates that are not registered under the Investment Advisers Act of 1940, as amended, to provide portfolio management, research, and trading services to the Fund. Under a Participating Affiliate Agreement, and pursuant to applicable guidance from the Staff of the SEC, U.S.

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registered advisors are allowed to use investment advisory and trading resources of such unregistered advisory affiliates subject to the regulatory supervision of the registered advisor. For example, some Principal Funds assets are managed by employees of Principal Global Investors (Europe) Limited pursuant to such an arrangement. Each such affiliate and any of their respective employees who provide services to a Fund are considered under the Participating Affiliate Agreement to be "supervised persons" of the advisor or sub-advisor (as applicable) as that term is defined in the Investment Advisers Act of 1940, as amended.

**Fees Paid to PGI**

The Fund pays PGI a fee for its services, which includes the fee PGI pays to sub-advisors, as applicable, and to State Street Bank and Trust for fund administration, fund accounting, and other services. Pursuant to the Management Agreement between the Trust, on behalf of each Fund, and PGI, PGI pays all operating expenses of each Fund, except interest expenses, taxes, brokerage commissions and other expenses connected with executing portfolio transactions, acquired fund fees and expenses, future distribution fees or expenses, litigation expenses, and tax reclaim recovery expenses and extraordinary expenses.

The management fee schedule for the Principal CLO ETF, Principal Inflation Protection ETF, Principal Long Duration ETF and Principal Securitized Debt ETF, which have not completed a full fiscal year, is as follows.

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| | |
|:---|:---|
| **Fund** | **All Assets** |
| Principal CLO ETF | 0.19% |
| Principal Inflation Protection ETF | 0.19% |
| Principal Long Duration ETF | 0.19% |
| Principal Securitized Debt ETF | 0.19% |

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Availability of the discussions regarding the basis for the Board's approval of the Management Agreements will be available for the Funds in the Trust's Form N-CSR filing on the SEC's website at www.sec.gov for the period ending June 30, 2026.

**Manager of Managers**

The Trust operates as a Manager of Managers. Under an order received from the SEC (the "Order"), the Trust and PGI may enter into and materially amend agreements with unaffiliated and wholly-owned affiliated sub-advisors (affiliated sub-advisors that are at least 95% owned, directly or indirectly, by PGI or an affiliated person of PGI) without obtaining shareholder approval, including to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• hire one or more sub-advisors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• change sub-advisors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reallocate management fees between PGI and sub-advisors.

Although there is no present intent to do so, the Funds may, in the future, rely on current SEC Staff guidance that expands relief under the Order to allow PGI to enter into and materially amend agreements with majority-owned affiliated sub-advisors (affiliated sub-advisors that are at least 50% owned, directly or indirectly, by PGI or an affiliated person of PGI), and, further, to all sub-advisors regardless of the degree of affiliation with PGI.

In order to rely on the varying degrees of relief granted by the Order and/or the SEC Staff guidance, a Fund must receive approval from its shareholders (or, in the case of a new Fund, the Fund's sole initial shareholder before the Fund is available to the other purchasers).

The shareholders of each Fund have approved such Fund's reliance on the Order, as supplemented by the SEC Staff guidance, with respect to all sub-advisors, regardless of the degree of affiliation with PGI.

PGI has ultimate responsibility for the investment performance of each Fund that utilizes a sub-advisor due to its responsibility to oversee sub-advisors and recommend their hiring, termination, and replacement.

In accordance with a separate exemptive order that the Registrant and PGI have obtained from the SEC, the Board may approve a new sub-advisory agreement or a material amendment to an existing sub-advisory agreement at a meeting that is not in person, provided that the Board Members are able to participate in the meeting using a means of communication that allows them to hear each other simultaneously during the meeting and the other conditions in the exemptive order are met.

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**DISTRIBUTOR AND OTHER FUND SERVICE PROVIDERS**

ALPS Distributors, Inc. (the "Distributor") serves as the principal underwriter and distributor of creation units for the Funds. The Distributor does not maintain a secondary market in Shares.

State Street Bank and Trust Company is the sub-administrator, custodian, transfer agent, and dividend disbursing agent for the Funds.

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**PRICING OF FUND SHARES**

The Funds will directly issue and redeem Shares on a continuous basis, to and from authorized participants ("APs"), at net asset value ("NAV") per Share in aggregations of Shares called "Creation Units." The value of the Funds' Shares bought and sold in the secondary market (on the exchange identified in each Fund Summary) will be determined by market price, as described in the section below.

The Board has designated PGI as the Funds' valuation designee, as permitted by SEC Rule 2a-5, where PGI is responsible for the day-to-day valuation and oversight responsibilities of the Funds, subject to the Board's oversight. PGI has established a Valuation Committee to fulfill its oversight responsibilities as the Funds' valuation designee. The NAV of the Funds is calculated each day the New York Stock Exchange ("NYSE") is open (share prices are not calculated on the days on which the NYSE is closed for trading, generally New Year's Day, Martin Luther King, Jr. Day, Washington's Birthday, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day, and Christmas). The share price is determined as of the close of business of the NYSE (normally 4:00 p.m. Eastern Time). The Funds will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price its shares as of 4:00 p.m. Eastern Time, if the particular disruption directly affects only the NYSE.

**Notes:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If market quotations are not readily available for a security owned by a Fund, its fair value is determined using a policy adopted by the Board. Fair valuation pricing is subjective and creates the possibility that the fair value determined for a security may differ materially from the value that could be realized upon the sale of the security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A Fund's securities may be traded on foreign securities markets that generally complete trading at various times during the day before the close of the NYSE. Foreign securities and currencies are converted to U.S. dollars using the exchange rate in effect at the close of the NYSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of foreign securities generally or in a particular country or countries may not take place on all days the NYSE is open or may trade on days the NYSE is closed. Thus, the value of the foreign securities held by a Fund may change on days when shareholders are unable to purchase or redeem shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain securities issued by companies in emerging markets may have more than one quoted valuation at any point in time. These may be referred to as local price and premium price. The premium price is often a negotiated price that may not consistently represent a price at which a specific transaction can be effected. The Fund has a policy to value such securities at a price at which the Manager expects the securities may be sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• With respect to any portion of a Fund's assets invested in other registered investment companies, that portion of the Fund's NAV is calculated based on the price (NAV or market, as applicable) of such other registered investment companies.

**Fund Share Trading Prices and IOPV — Secondary Market**

The trading prices of Shares of a Fund on the exchange may differ from the Funds' daily NAV. The price of the Shares will be subject to factors such as supply and demand, as well as the current value of the Fund's portfolio securities. Secondary market Shares, which are available for purchase or sale on an intraday basis, do not have a fixed relationship to either the previous day's NAV or to the current day's NAV. Prices in the secondary market, therefore, may be below, at, or above the most recently calculated NAV per Share.

The approximate value of shares of each Fund, known as the "indicative optimized portfolio value" ("IOPV") will be disseminated every fifteen seconds throughout the trading day by the national securities exchange on which a Fund is listed or by other information providers or market data vendors. For actively managed Funds, the IOPV is based on the current market value of holdings contained in the Fund's portfolio at the beginning of the trading day. The IOPV does not necessarily reflect the precise composition of the current portfolio of securities held by the Fund at a particular point in time nor the best possible valuation of the current portfolio. The IOPV should not be viewed as a "real-time" update of the NAV, because the IOPV may not be calculated in the same manner as the NAV, which is computed once a day as discussed below. The IOPV is generally determined by using current market quotations and/or price quotations obtained from broker-dealers that may trade in the portfolio securities held by the Fund. The quotations of certain Fund holdings may not be updated during U.S. trading hours if such holdings do not

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trade in the U.S. The Funds and the Advisor are not involved in, or responsible for, the calculation or dissemination of the IOPV and make no warranty as to its accuracy. A Fund may choose to discontinue the dissemination of the IOPV so long as such dissemination is not required by applicable Exchange rules.

Shares of each Fund may trade in the secondary market on days when the Fund does not accept orders to purchase or redeem shares. On such days, shares may trade in the secondary market with more significant premiums or discounts than might otherwise be experienced on days when the Fund accepts purchase and redemption orders.

Information regarding how often the Shares of each Fund traded on the exchange at a price above (at a premium) or below (at a discount) the NAV per Share of the Fund during the past four calendar quarters (if available) can be found at www.PrincipalAM.com. Data presented represents past performance and cannot be used to predict future results.

**PURCHASE AND SALE OF FUND SHARES**

**Generally**

The Funds will directly issue shares to authorized participants ("APs") on a continuous basis at net asset value ("NAV") per Share in aggregations of Shares called "Creation Units" in exchange for portfolio securities.

To be an AP, you must be a member or participant ("Participating Party") in the Continuous Net Settlement System of the National Securities Clearing Corporation ("NSCC") or a participant in the DTC with access to the DTC system ("DTC Participant"), and you must execute an agreement ("Participant Agreement") with the Distributor, which must be accepted by the Transfer Agent, that governs transactions in the Fund's Creation Units.

APs may acquire Shares directly from the Funds, and APs may tender their Shares for redemption directly to the Funds, at NAV per Share only in Creation Units or Creation Unit Aggregations, and in accordance with the procedures described in the SAI. Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations, and in exchange for portfolio securities and/or cash.

All orders to purchase or redeem Creation Units must be placed through an AP that has entered into a Participant Agreement with the Distributor and accepted by the Transfer Agent with respect to the creation and redemption of Creation Units. An investor purchasing or redeeming a Creation Unit from the Funds may be charged a fee ("Transaction Fee") to protect existing shareholders of the Funds from the dilutive costs associated with the purchase and redemption of Creation Units.

Shareholders who are not APs will not be able to purchase or redeem Shares directly with or from the Funds. As a result, most investors will buy and sell Shares of the Funds in secondary market transactions through brokers. Shares of the Funds are expected to be listed for trading on the secondary market on the exchange identified in the Fund Summary for each Fund. Shares can be bought and sold throughout the trading day like other publicly traded shares. There is no minimum investment. When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges, and you may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of a round trip (purchase and sale) transaction. Due to the costs of buying or selling shares, including bid/ask spreads, frequent trading of shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments. Shares of the Funds trade under the symbols set forth on the cover of this Prospectus. Contact your broker for additional information on how to buy and sell Shares.

PGI may recommend to the Board, and the Board may elect, to liquidate and terminate a Fund at any time without shareholder approval.

**Note:** No salesperson, broker-dealer, or other person is authorized to give information or make representations about the Fund other than those contained in this Prospectus. Information or representations not contained in this Prospectus may not be relied upon as having been provided or made by the Trust, the Funds, PGI, any sub-advisor, or the Distributor.

**Investment Company Purchasers**

Each Fund is an investment company registered with the SEC under the 1940 Act. If a purchaser of Fund shares is also a registered investment company or a private fund relying on Section 3(c)(1) or

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Section 3(c)(7) of the 1940 Act, it may be limited by the 1940 Act in the amount of Fund shares it can purchase (i.e., Section 12(d)(1)(A)). Such purchaser must comply with such limitations or avail itself, if possible, of any applicable exemptions from such limitations (e.g., a registered investment company may rely on Rule 12d1-4 of the 1940 Act).

**Book Entry**

Shares are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company ("DTC") or its nominee is the record owner of all outstanding Shares of the Funds and is recognized as the owner of all Shares for all purposes.

Investors owning Shares are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all Shares. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of Shares, you are not entitled to receive physical delivery of stock certificates or to have Shares registered in your name, and you are not considered a registered owner of Shares. Therefore, to exercise any right as an owner of Shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other stocks that you hold in book entry or "street name" form.

**DIVIDENDS AND DISTRIBUTIONS**

The Funds intend to generally make distributions of net income on a monthly basis. The Funds do not guarantee they will make any payments to shareholders on the frequency set forth, or at all. Factors that could affect a Fund's ability to make distributions include, without limitation, changes in interest rates, the performance of the financial markets in which the Fund invests, the allocation of Fund assets across different asset classes and investments, the performance of the Fund's investment strategies, and the amount and timing of the Fund's prior distributions. If deemed necessary by the Board and management to comply with regulatory requirements or if in the best interest of shareholders, dividends and capital distributions may be paid at other times during the year.

Each Fund seeks to tailor the amount of its monthly income payments to moderate fluctuations in the amounts it distributes to shareholders over the course of the year. Although each Fund attempts to moderate fluctuations, the amounts it distributes to shareholders are not fixed and may not be the same each month.

The Funds do not expect to make distributions that will be treated as return of capital, although such a Fund cannot guarantee that it will not do so. Return of capital represents the return of a shareholder's original investment in Fund shares, not a dividend from the Fund's profits and earnings. If a Fund's distributions are treated as a return of capital, the distributions themselves may not be taxable, but they will lower a shareholder's basis in the Fund shares so that when such shares are sold (even if they are sold at a loss on the original investment), the shareholder may be obligated to pay taxes on the capital gains. At the end of the year, the Funds may be required under applicable law to re-characterize distributions for the year among ordinary income, capital gains, and return of capital (if any) for purposes of tax reporting to shareholders.

To the extent that distributions a Fund pays are derived from a source other than net income (such as a return of capital), you will receive a notice disclosing the source of such distributions. Furthermore, such notice will be posted monthly on our website at www.principal.com/individuals/dividends-capital-gains-distributions. You may request a copy of all such notices, free of charge, by telephoning 1-800-222-5852. The amounts and sources of distributions included in such notices are estimates only and you should not rely upon them for purposes of reporting income taxes. Each Fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.

No dividend reinvestment service is provided by the Trust. Broker-dealers may make available DTC book-entry Dividend Reinvestment Service for use by beneficial owners of the Fund for reinvestment of their dividend distributions. Beneficial owners should contact their broker to determine the availability and costs of the service and the details of participation. Brokers may require beneficial owners to adhere to specific procedures and timetables. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole shares of the Fund purchased in the secondary market.

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**FREQUENT PURCHASES AND REDEMPTIONS**

Particularly where creation and redemption baskets include a cash component, frequent purchases and redemptions pose a risk to the Funds because they may disrupt the management of the Funds by forcing the Funds to hold short-term (liquid) assets rather than investing for long-term growth, which results in lost investment opportunities for the Funds. Such transactions may also cause unplanned portfolio turnover, hurt the portfolio performance of the Funds, and increase expenses of the Funds due to increased broker-dealer commissions and recordkeeping and related costs.

Shares of the Funds are listed and traded on national securities exchanges. Therefore, it is unlikely that a shareholder could take advantage of a potential arbitrage opportunity presented by a lag between a change in the value of the Fund's portfolio securities after the close of the primary markets for the Fund's portfolio securities and the reflection of that change in a Fund's NAV ("market timing"), because each Fund sells and redeems its shares directly through transactions that are in-kind and/or for cash. Further, each Fund may impose transaction fees on purchases and redemptions of Creation Units to cover the custodial and other costs each Fund incurs in effecting trades which may help minimize the potential consequences of frequent purchases and redemptions of shares. For these reasons, the Board believes that a frequent trading monitoring policy is unnecessary for the Funds. Each Fund reserves the right, without prior written notice, to reject orders from APs that the Fund determines to be disruptive to the management of the Fund or otherwise not in the best interests of the Fund.

**TAX CONSIDERATIONS**

The following discussion summarizes some of the possible consequences under current federal tax law of an investment in a Fund. It is not a substitute for personal tax advice. You also may be subject to state, local, and/or foreign tax on Fund distributions and sales of Shares. Consult your personal tax advisor about the potential tax consequences of an investment in Shares under all applicable tax laws. For more information, please see the section entitled "Tax Considerations" in the SAI.

**Taxes**

As with any investment, you should consider how your investment in Shares will be taxed. The tax information in this Prospectus is provided as general information. You should consult your own tax professional about the tax consequences of an investment in Shares.

Unless your investment in Shares is made through a tax-exempt entity or tax-deferred retirement account, such as an IRA plan, you need to be aware of the possible tax consequences when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a Fund makes distributions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you sell your Shares listed on the exchange, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you purchase or redeem Creation Units.

In addition, each Fund has elected and intends to qualify and be eligible to be treated each year as a regulated investment company (a "RIC") under the Internal Revenue Code of 1986, as amended (the "Code"). The Fund must satisfy certain diversification and qualifying income tests under the Code in order to qualify as a RIC. If the Fund were to fail to qualify and be eligible to be treated as a RIC, the Fund would be subject to corporate-level taxation, thereby reducing the return on a shareholder's investment. In addition, the Fund could be required to recognize unrealized gains, pay taxes, and make distributions (which could be subject to interest charges) before requalifying for taxation as a RIC.

**Taxes on Distributions**

As stated above, dividends from net investment income and net capital gains, ordinarily, are declared and paid monthly. A Fund also may pay a special distribution at the end of the calendar year to comply with federal tax requirements. In general, your distributions are subject to federal income tax when they are paid, whether you take them in cash or reinvest them in the Fund.

Dividends paid out of a Fund's income and net realized short-term capital gains, if any, are generally taxable as ordinary income, except that the Fund's dividends attributable to its "qualified dividend income" (i.e., dividends received on stock of most domestic and foreign corporations, including Chinese corporations, with respect to which the Fund satisfies certain holding period and other restrictions)

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generally will be subject to federal income tax for individual and certain other non-corporate shareholders (each, an "individual shareholder") who satisfy those restrictions with respect to their Fund shares at the lower rates for long-term capital gains — a maximum of 15% (or 20% for individual shareholders with taxable income exceeding certain thresholds, which will be adjusted annually for inflation). Distributions of net long-term capital gains, if any, in excess of net short-term capital losses are taxable as long-term capital gains, regardless of how long you have held the Shares.

Distributions in excess of a Fund's current and accumulated earnings and profits, if any, are treated as a tax-free return of capital to the extent of your basis in the Shares, and as capital gain thereafter. A distribution will reduce the Fund's NAV per Share and may be taxable to you as ordinary income or long-term capital gains even though, from an investment standpoint, the distribution may constitute a return of capital.

By law, a Fund may be required to withhold a percentage of your distributions and proceeds if you have not provided your taxpayer identification number or social security number.

Under U.S. Treasury Regulations, non-corporate Fund shareholders meeting certain holding period requirements may be able to deduct up to 20 percent of qualified REIT dividends passed through and reported to them by the Fund.

**Taxes on Share Sales**

Any capital gain or loss you realize upon a sale of Shares generally is treated as long-term capital gain, taxable at the rates mentioned above for individual shareholders, or loss if you held the Shares for more than one year and as short-term capital gain or loss if you held the Shares for one year or less. The ability to deduct capital losses may be limited.

**Taxes on Purchase and Redemption of Creation Units**

An AP who exchanges securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time and the exchanger's aggregate basis in the securities surrendered and the cash component paid. A person who exchanges Creation Units for securities generally will recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the aggregate market value of the securities received and the cash redemption amount. The Internal Revenue Service, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales," or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisors with respect to whether wash sale rules apply and when a loss might be deductible.

Any capital gain or loss realized upon redemption of Creation Units generally is treated as long-term capital gain or loss if the Shares have been held for more than one year and as a short-term capital gain or loss if the Shares have been held for one year or less.

**DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION**

**Distribution and/or Service (12b-1) Fees**

The Trust has adopted a distribution plan for the Fund pursuant to Rule 12b-1 under the 1940 Act. Under the 12b-1 Plan, each Fund is authorized to pay fees for distribution-related expenses and/or for providing services to shareholders of up to 0.25% of the Fund's average daily net assets each year.

No 12b-1 fees are currently paid by the Funds, and there are no current plans to impose these fees.

However, in the event the Board approves charging 12b-1 fees in the future, because Rule 12b-1 fees are paid out of Fund assets and are ongoing fees, over time they will increase the cost of your investment in the Funds and may cost you more than other types of sales charges.

**Additional Payments to Intermediaries**

Shares of the Funds are sold primarily through intermediaries, such as brokers, dealers, investment advisors, banks, trust companies, pension plan consultants, retirement plan administrators and insurance companies.

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PGI and its affiliates may, out of their own resources, pay amounts to intermediaries that support the distribution or marketing of shares of the Funds or provide services to Fund shareholders.

In some cases, PGI or their respective affiliates will provide payments or reimbursements in connection with the costs of conferences and seminars, and educational, training and marketing efforts related to the Fund. Such activities may be sponsored by intermediaries, PGI or their respective affiliates. Additional costs paid or reimbursed may include travel, lodging, entertainment, meals and small gifts. In some cases, PGI or their respective affiliates will also provide payment or reimbursement for expenses associated with transactions ("ticket") charges and general marketing expenses. For more information, see the SAI.

The payments described in this Prospectus may create a conflict of interest by influencing your Financial Professional or your intermediary to recommend a Fund over another investment. Ask your Financial Professional or visit your intermediary's website for more information about the total amounts paid to them by PGI and its affiliates, and by sponsors of other investment companies your Financial Professional may recommend to you.

Your intermediary may charge you additional fees other than those disclosed in this Prospectus. Ask your Financial Professional about any fees and commissions they charge.

**FUND ACCOUNT INFORMATION**

**Continuous Offering**

The method by which Creation Unit Aggregations are created and traded may raise certain issues under applicable securities laws. Because new Creation Unit Aggregations of Shares are issued and sold by the Fund on an ongoing basis, a "distribution," as such term is used in the Securities Act of 1933, as amended (the "Securities Act"), may occur at any point. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Unit Aggregations after placing an order with the Distributor, breaks them down into constituent Shares and sells such Shares directly to customers, or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to a characterization as an underwriter.

Broker-dealer firms also should note that dealers who are not "underwriters" but are effecting transactions in Shares, whether or not participating in the distribution of Shares, generally are required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3)(C) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not "underwriters" but are participating in a distribution (as contrasted with engaging in ordinary secondary market transactions), and thus dealing with the Shares that are part of an overallotment within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. For delivery of prospectuses to exchange members, the prospectus delivery mechanism of Rule 153 under the Securities Act only is available with respect to transactions on a national exchange.

**Reservation of Rights**

The Trust reserves the right to amend or terminate a Fund, as well as certain terms related to a Fund, described in this Prospectus. Shareholders will be notified of any such action to the extent required by law.

**Multiple Translations**

This Prospectus may be translated into other languages. In the event of any inconsistencies or ambiguity as to the meaning of any word or phrase in a translation, the English text will prevail.

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**ADDITIONAL INFORMATION**

Additional information about the Funds is available in the SAI dated April 20, 2026, which is incorporated by reference into this Prospectus. Additional information about each Fund's investments will be available in the Trust's Annual Report to Shareholders and Semi-Annual Report to Shareholders filed on Form N-CSR. In the Trust's Annual Report, you will find a discussion of the market conditions and investment strategies that significantly affected each Fund's performance during the last fiscal year. In Form N-CSR, you will find the Trust's annual and semi-annual financial statements. The SAI and the Trust's Annual and Semi-Annual Reports to Shareholders, and other information such as Fund financial statements, are available and can be obtained free of charge by writing Principal Exchange-Traded Funds, c/o ALPS Distributors, Inc., 1290 Broadway, Suite 1000, Denver, CO 80203. In addition, the Trust makes its SAI and Annual and Semi-Annual Reports available, free of charge, on www.principalam.com/ETFProspectuses. To request this and other information about the Funds and to make shareholder inquiries, telephone 1-800-222-5852.

Reports and other information about the Trust are available on the EDGAR Database on the SEC's internet site at www.sec.gov. Copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov.

The Trust has entered into a management agreement with PGI. The Trust and/or PGI, on behalf of the Funds, enter into contractual arrangements with various parties, including, among others, the Funds' sub-advisors, distributor, transfer agent, and custodian, who provide services to the Funds. These arrangements are between the Trust and/or PGI and the applicable service provider. Shareholders are not parties to, or intended to be third-party beneficiaries of, any of these arrangements. Such arrangements are not intended to create in any individual shareholder or group of shareholders any right, including the right to enforce such arrangements against the service providers or to seek any remedy thereunder against PGI or any other service provider, either directly or on behalf of the Trust or any Fund.

This Prospectus provides information that you should consider in determining whether to purchase shares of a Fund. This Prospectus, the SAI, or the contracts that are exhibits to the Trust's registration statement are not intended to give rise to any agreement or contract between the Trust and/or any Fund and any investor, or give rise to any contract or other rights in any individual shareholder, group of shareholders, or other person other than any rights conferred explicitly by federal or state securities laws that may not be waived.

The U.S. government does not insure or guarantee an investment in any of the Funds.

Shares of the Funds are not deposits or obligations of, or guaranteed or endorsed by, Principal Bank or any other financial institution, nor are shares of the Funds federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.

Principal Exchange-Traded Funds SEC File 811-23029

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**PRINCIPAL EXCHANGE-TRADED FUNDS**

**("PETF" or the "Trust")**

**Statement of Additional Information**

dated April 20, 2026

This Statement of Additional Information ("SAI") is not a prospectus. It contains information in addition to the information in the Trust's Prospectus. The Prospectus, which may be amended from time to time, contains the basic information you should know before investing in a Fund. You should read this SAI together with the Trust's Prospectus dated April 20, 2026.

For a free copy of the current Prospectus, Semi-Annual Report, or Annual Report (when available), call 1-800-222-5852 or write:

Principal Exchange-Traded Funds

c/o ALPS Distributors, Inc.

1290 Broadway, Suite 1000

Denver, CO 80203

The Prospectus may be viewed at www.PrincipalAM.com/ETFProspectuses*.*

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| | | |
|:---|:---|:---|
| **Fund** | **Ticker Symbol** | **Principal<br> U.S. Listing Exchange** |
| **Principal CLO ETF** | UUPP | Cboe BZX |
| **Principal Inflation Protection ETF** | RIZE | Cboe BZX |
| **Principal Long Duration ETF** | DWWN | Cboe BZX |
| **Principal Securitized Debt ETF** | WDE | Cboe BZX |

---

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | **TABLE OF CONTENTS** |
|  | **<u>Page</u>** |
| [GENERAL DESCRIPTION OF TRUST AND FUNDS](#sai_001) | [1](#sai_001) |
| [EXCHANGE LISTING AND TRADING](#sai_002) | [1](#sai_002) |
| [DESCRIPTION OF THE FUNDS' INVESTMENTS AND RISKS](#sai_003) | [2](#sai_003) |
| [LEADERSHIP STRUCTURE AND BOARD](#sai_004) | [31](#sai_004) |
| [INVESTMENT ADVISORY AND OTHER SERVICES](#sai_005) | [40](#sai_005) |
| [INTERMEDIARY COMPENSATION](#sai_006) | [41](#sai_006) |
| [BROKERAGE ALLOCATION AND OTHER PRACTICES](#sai_007) | [43](#sai_007) |
| [PURCHASE AND REDEMPTION OF CREATION UNITS](#sai_008) | [46](#sai_008) |
| [CALCULATION OF NAV](#sai_009) | [56](#sai_009) |
| [TAX CONSIDERATIONS](#sai_010) | [57](#sai_010) |
| [PORTFOLIO HOLDINGS DISCLOSURE](#sai_011) | [59](#sai_011) |
| [PROXY VOTING POLICIES AND PROCEDURES](#sai_012) | [59](#sai_012) |
| [FINANCIAL STATEMENTS](#sai_013) | [59](#sai_013) |
| [INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#sai_014) | [59](#sai_014) |
| [CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES](#sai_015) | [60](#sai_015) |
| [PORTFOLIO MANAGER DISCLOSURE](#sai_016) | [61](#sai_016) |
| [APPENDIX A – PROXY VOTING POLICIES](#sai_017) | [A-1](#sai_017) |

---

**GENERAL DESCRIPTION OF TRUST AND FUNDS** 

Principal Exchange-Traded Funds (the "Trust") is a statutory trust organized under the laws of the State of Delaware in 2013 and is authorized to have multiple series or portfolios (each, a "Fund" and, together, the "Funds"). The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently consists of 16 Funds.

The shares of the Funds are referred to herein as "Shares."

The Trust issues and redeems Shares at net asset value ("NAV") only with Authorized Participants ("APs") and only in aggregations of a specified number of Shares (each, a "Creation Unit"), which is subject to change. Each Fund issues and redeems Creation Units in exchange for portfolio securities and/or cash, plus a fixed and/or variable transaction fee.

**EXCHANGE LISTING AND TRADING**

Shares of each Fund are listed on a national securities exchange (generally, the "Exchange") as set forth below. Shares trade on the Exchange at market prices that may be below, at, or above NAV.

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| | |
|:---|:---|
| **Fund** | **Principal <br> U.S. Listing <br> Exchange** |
| Principal CLO ETF | Cboe BZX |
| Principal Inflation Protection ETF | Cboe BZX |
| Principal Long Duration ETF | Cboe BZX |
| Principal Securitized Debt ETF | Cboe BZX |

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There can be no assurance that a Fund will continue to meet the requirements of its respective Exchange necessary to maintain the listing of its Shares. An Exchange may, but is not required to, remove the Shares of a Fund from listing if: (i) following the initial 12-month period beginning at the commencement of trading of the Fund, there are fewer than 50 beneficial owners of the Shares of the Fund; (ii) the Fund is no longer eligible to operate in reliance on Rule 6c-11 under the Investment Company Act of 1940, as amended (the "1940 Act"), to the extent the Fund's listing is conditioned upon reliance on Rule 6c-11; (iii) any of the continued listing requirements set forth in the Exchange's rules are not continuously maintained; or (iv) such other event shall occur or condition shall exist that, in the opinion of the Exchange, makes further dealings on such Exchange inadvisable. Additionally, the Exchange will remove the Shares of a Fund from listing and trading upon termination of the Fund.

As in the case of other stocks traded on the Exchange, brokers' commissions on transactions will be based on negotiated commission rates at customary levels.

The Trust reserves the right to adjust the price levels of the Shares in the future to help maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of a Fund.

**DESCRIPTION OF THE FUNDS' INVESTMENTS AND RISKS**

**Fund Policies**

The investment objective, principal investment strategies, and principal risks of each Fund are described in the Prospectus. This SAI contains supplemental information about those strategies and risks and the types of securities that those managing the investments of each Fund can select. Additional information is also provided about other strategies that each Fund may use to try to achieve its objective.

The composition of each Fund and the techniques and strategies that those managing a Fund's investments may use in selecting securities will vary over time. A Fund is not required to use all of the investment techniques and strategies available to it in seeking its goals.

Unless otherwise indicated, with the exception of the percentage limitations on borrowing, the restrictions apply at the time transactions are entered into. Accordingly, any later increase or decrease beyond the specified limitation, resulting from market fluctuations or in a rating by a rating service, does not require elimination of any security from a Fund's portfolio.

The investment objective of each Fund and, except as described below as "fundamental restrictions," the investment strategies described in this SAI and the Prospectus are not fundamental and may be changed by the Board without shareholder approval.

With the exception of the diversification test required by the Internal Revenue Code, the Funds will not consider collateral held in connection with securities lending activities when applying any of the following fundamental restrictions or any other investment restriction set forth in the Prospectus or SAI.

**Fundamental Restrictions**

Except as specifically noted, each Fund has adopted the following fundamental restrictions. Each fundamental restriction is a matter of fundamental policy and may not be changed without a vote of a majority of the outstanding voting securities of the affected Fund, except as permitted by the 1940 Act or other governing Statute and the Rules thereunder, the SEC, or other regulatory agency with authority over the Funds. The 1940 Act provides that "a vote of a majority of the outstanding voting securities" of a Fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding Fund shares or (2) 67% or more of the Fund shares present at a meeting if more than 50% of the outstanding Fund shares are represented at the meeting in person or by proxy. Each share has one vote.

Each Fund:

1) May not issue senior securities, except as permitted under the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

2) May not purchase or sell commodities, except as permitted by applicable law, regulation, or regulatory authority having jurisdiction.

3) May not purchase or sell real estate, which term does not include securities of companies that deal in real estate or mortgages or investments secured by real estate or interests therein, except that the Fund reserves freedom of action to hold and to sell real estate acquired as a result of the Fund's ownership of securities.

4) May not borrow money, except as permitted under the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

5) May not make loans, except as permitted under the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

6) Has elected to be treated as a "diversified" investment company, as that term is used in the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

7) May not concentrate, as that term is used in the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time, its investments in a particular industry or group of industries.

8) May not act as an underwriter of securities, except to the extent that the Fund may be deemed to be an underwriter in connection with the sale of securities held in its portfolio.

**Non-Fundamental Restrictions**

Except as specifically noted, each Fund has also adopted the following non-fundamental restrictions. Non-fundamental restrictions are not fundamental policies and may be changed without shareholder approval. It is contrary to each Fund's present policy to:

1) Invest more than 15% of its net assets in illiquid securities and in repurchase agreements maturing in more than seven days, except to the extent permitted by applicable law or regulatory authority having jurisdiction, from time to time.

2) Pledge, mortgage, or hypothecate its assets, except to secure permitted borrowings. The deposit of underlying securities and other assets in escrow and other collateral arrangements in connection with transactions that involve any future payment obligation, as permitted under the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by any regulatory authority having jurisdiction, from time to time, are not deemed to be pledges, mortgages, hypothecations, or other encumbrances.

3) Invest in companies for the purpose of exercising control or management.

4) Acquire securities of other investment companies in reliance on Section 12(d)(1)(F) or (G) of the 1940 Act, invest more than 10% of its total assets in securities of other investment companies, invest more than 5% of its total assets in the securities of any one investment company, or acquire more than 3% of the outstanding voting securities of any one investment company except in connection with a merger, consolidation, or plan of reorganization and except as permitted by the 1940 Act, SEC rules adopted under the 1940 Act, or exemptions granted by the SEC. The Fund may purchase securities of closed-end investment companies in the open market where no underwriter or dealer's commission or profit, other than a customary broker's commission, is involved.

5) Invest more than 5% of its total assets in real estate limited partnership interests.

**Non-Fundamental Policy - Rule 35d-1 under the 1940 Act - Investment Company Names**

Each Fund has also adopted a non-fundamental policy, pursuant to SEC Rule 35d-1, which requires it, under normal circumstances, to invest at least 80% of the value of its net assets, plus any borrowings for investment purposes, in the type of investment or investments, industry or group of industries, particular countries or geographic regions, or investments that have, or whose issuers have, particular characteristics (as described in the Prospectus), in accordance with the investment focus suggested by the name of the Fund.

A Fund will provide 60 days' notice to shareholders prior to implementing a change in this policy for the Fund.

For purposes of testing this requirement with respect to:

• <u>Derivatives instruments</u>: each Fund will value each derivatives instrument using the instrument's
 notional amount (which must be converted to 10-year bond equivalents for interest rate derivatives
 and delta adjusted for options contracts) and must value each physical short position using
 the value of the asset sold short.

In addition, if a Fund's policy is to invest in a certain type of security, the Fund may gain exposure to that type of investment through derivatives or other instruments. For purposes of determining compliance with a Fund's 80% investment policy adopted pursuant to SEC Rule 35d-1, derivatives instruments used by the Fund may be counted toward the Fund's 80% investment policy to the extent they provide investment exposure to investments included within that policy or to one or more of the market risk factors associated with investments included in that policy.

**Investment Strategies and Risks Related to Borrowing and Senior Securities, Commodity-Related Investments, Industry Concentration, and Loans**

**Borrowing and Senior Securities**

Under the 1940 Act, a fund that borrows money is required to maintain continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with an exception for borrowings not in excess of 5% of the fund's total assets made for temporary or emergency purposes. If a fund invests the proceeds of borrowing, borrowing will tend to exaggerate the effect on net asset value of any increase or decrease in the market value of a fund's portfolio. If a fund invests the proceeds of borrowing, money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. A fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

**Commodity-Related Investments and Commodity Interests**

Under the 1940 Act, a fund's registration statement must recite the fund's policy with regard to investing in commodities. Each Fund may invest in commodities and commodity interests to the extent permitted by applicable law and under its fundamental and non-fundamental policies and restrictions. Pursuant to a claim for exclusion filed with the Commodity Futures Trading Commission ("CFTC") on behalf of each of the Funds under Rule 4.5, Principal Global Investors, LLC ("PGI") is not deemed to be a "commodity pool operator" under the Commodity Exchange Act ("CEA") as it specifically relates to PGI's operations with respect to the Funds, and therefore, are not subject to registration or regulation under the CEA with respect to the operation of the Funds.

The CFTC amended the Rule 4.5 exclusions for certain otherwise regulated persons from the definition of the term "commodity pool operator." Rule 4.5 provides that a registered investment adviser is excluded from the definition of "commodity pool operator" with respect to the operation of a registered investment company if the fund's use of futures contracts, options on futures contracts, and swaps is sufficiently limited that the fund can fall within one of two exclusions set out in Rule 4.5. Each Fund intends to limit its use of futures contracts, options on futures contracts, and swaps to the degree necessary to fall within one of the two exclusions. If a Fund is unable to do so, it may incur expenses that are necessary for PGI to comply with the CEA and rules the CFTC has adopted under it with respect to the operation of the Fund.

**Industry Concentration**

"Concentration" means a fund invests more than 25% of its net assets in a particular industry or group of industries. To monitor compliance with the policy regarding industry concentration, the Funds may use the industry classifications provided by Bloomberg, L.P., the Morgan Stanley Capital International (MSCI)/Standard & Poor's Global Industry Classification Standard (GICS), the Directory of Companies Filing Annual Reports with the SEC, or any other reasonable industry classification system. With respect to monitoring industry concentration, a Fund concentrating in the "financial services industry" concentrates its investments in one or more industries classified within the broader financial services sector.

• Each Fund interprets its policy
with respect to concentration in a particular industry to apply only to direct investments in the securities of issuers in a particular
industry.

• For purposes of this restriction,
government securities such as treasury securities or mortgage-backed securities that are issued or guaranteed by the U.S. government,
its agencies, or instrumentalities are not subject to a Fund's industry concentration restrictions.

• Each Fund views its investments
in tax-exempt municipal securities as not representing interests in any particular industry or group of industries. For information about
municipal securities, see the Municipal Obligations section.

**Loans**

A Fund may not make loans to other persons except as permitted by (i) the 1940 Act and the rules and regulations thereunder, or other successor law governing the regulation of registered investment companies, or interpretations or modifications thereof by the SEC, SEC staff, or other authority of competent jurisdiction, or (ii) pursuant to exemptive or other relief or permission from the SEC, SEC staff, or other authority of competent jurisdiction. Generally, this means the Funds are typically permitted to make loans, but must take into account potential issues such as liquidity, valuation, and avoidance of impermissible transactions. Examples of permissible loans include (a) the lending of its portfolio securities, (b) the purchase of debt securities, loan participations, and/or engaging in direct corporate loans in accordance with its investment objectives and policies, (c) the entry into a repurchase agreement (to the extent such entry is deemed to be a loan), and (d) loans to affiliated investment companies to the extent permitted by the 1940 Act or any exemptions therefrom that may be granted by the SEC.

**Other Investment Strategies and Risks**

**Artificial Intelligence** 

The capabilities and use of artificial intelligence ("AI") are rapidly increasing. AI may be utilized by the Funds' advisor; by issuers in which the Funds invest; or by the Funds' service providers. AI technologies rely heavily on the collection and analysis of large amounts of data and complex algorithms, and it is possible that AI may produce inaccurate, biased, misleading, or incomplete outputs that could lead to adverse effects for the advisor, issuers, and/or service providers using such technologies. These adverse effects may include reputational harm, legal liability, disruptions to business operations, and/or operational errors and investment losses by users of AI technologies, all of which could impact the Funds. AI also could face regulatory scrutiny in the future, which could limit its development and use. It is impossible to predict the full extent of risks that could impact the Funds from the development and use of AI.

**Convertible Securities**

A convertible security is a bond, debenture, note, preferred stock, or other security that entitles the holder to acquire common stock or other equity securities of the same or a different issuer. A convertible security generally entitles the holder to receive interest paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in a corporation's capital structure and, therefore, generally entail less risk than the corporation's common stock, although the extent to which such risk is reduced depends in large measure upon the degree to which the convertible security sells above its value as a fixed income security. Convertible securities are subordinate in rank to any senior debt obligations of the issuer, and, therefore, an issuer's convertible securities entail more risk than its debt obligations. Convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.

Because of the conversion feature, the price of the convertible security will normally fluctuate in some proportion to changes in the price of the underlying asset, and as such is subject to risks relating to the activities of the issuer and/or general market and economic conditions. The income component of a convertible security may tend to cushion the security against declines in the price of the underlying asset. However, the income component of convertible securities causes fluctuations based upon changes in interest rates and the credit quality of the issuer.

If the conversion value of a convertible security increases to a point that approximates or exceeds its investment value, the value of the security will be principally influenced by its conversion value. A convertible security will sell at a premium over its conversion value to the extent investors place value on the right to acquire the underlying common stock while holding an income-producing security.

A convertible security may be subject to redemption at the option of the issuer at a predetermined price. If a convertible security held by a fund is called for redemption, the fund would be required to permit the issuer to redeem the security and convert it to underlying common stock, or would sell the convertible security to a third party, which may have an adverse effect on the fund's ability to achieve its investment objective.

**Corporate Reorganizations**

Funds may invest in securities for which a tender or exchange offer has been made or announced and in securities of companies for which a merger, consolidation, liquidation, or reorganization proposal has been announced if, in the judgment of those managing the fund's investments, there is a reasonable prospect of capital appreciation significantly greater than the brokerage and other transaction expenses involved. The primary risk of such investments is that if the contemplated transaction is abandoned, revised, delayed, or becomes subject to unanticipated uncertainties, including, for example, new or revised laws or regulations, the market price of the securities may decline below the purchase price paid by a fund.

In general, securities that are the subject of such an offer or proposal sell at a premium to their historic market price immediately prior to the announcement of the offer or proposal. However, the increased market price of such securities may discount what the stated or appraised value of the security would be if the contemplated transaction were approved or consummated. Such investments may be advantageous when the discount: significantly overstates the risk of the contingencies involved; significantly undervalues the securities, assets, or cash to be received by shareholders of the prospective company as a result of the contemplated transaction; or fails adequately to recognize the possibility that the offer or proposal may be replaced or superseded by an offer or proposal of greater value. The evaluation of such contingencies requires unusually broad knowledge and experience on the part of those managing the fund's investments, which must appraise not only the value of the issuer and its component businesses, but also the financial resources and business motivation of the offer or proposal as well as the dynamics of the business climate when the offer or proposal is in process.

**Cyber Security Issues**

Each Fund and its service providers may be subject to cyber security risks. Those risks include, among others, theft, misuse, or corruption of data maintained online or digitally; denial of service attacks on websites; the loss or unauthorized release of confidential and proprietary business and personal information; operational disruption; or various other forms of cyber security breaches. Cyber-attacks against or security breakdowns of a Fund or its service providers may harm the Fund and its shareholders, potentially resulting in, among other things, financial losses, the inability to buy or sell Fund shares, the inability to calculate a Fund's NAV, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance and remediation costs. Geopolitical tensions may, from time to time, increase the scale and sophistication of cyber-attacks. Cyber security risks may also affect issuers of securities in which a Fund invests, potentially causing the Fund's investment in such issuers to lose value. Despite cyber security protocols and other risk management processes, there can be no guarantee that a Fund will avoid losses relating to cyber security risks or other information security breaches. The rapidly increasing capabilities and use of artificial intelligence (as discussed under "Artificial Intelligence"), including by bad actors, could exacerbate these risks.

**Derivatives**

<u>Options on Securities and Securities Indices</u>

Funds may write (sell) and purchase call and put options on securities and on securities indices. Funds may engage in these transactions to hedge against a decline in the value of securities owned or an increase in the price of securities that the Fund plans to purchase, or to generate additional revenue.

• Exchange-Traded Options. An exchange-traded
option may be closed out only on an exchange that generally provides a liquid secondary market for an option of the same series. If a
liquid secondary market for an exchange-traded option does not exist, it might not be possible to effect a closing transaction with respect
to a particular option, with the result that a Fund would have to exercise the option in order to consummate the transaction.

• Over the Counter ("OTC")
Options. OTC options differ from exchange-traded options in that they are two-party contracts, with price and other terms negotiated between
buyer and seller, and generally do not have as much market liquidity as exchange-traded options. An OTC option (an option not traded on
an established exchange) may be closed out only by agreement with the other party to the original option transaction. With OTC options,
a Fund is at risk that the other party to the transaction will default on its obligations or will not permit the Fund to terminate the
transaction before its scheduled maturity. While a Fund will seek to enter into OTC options only with dealers who agree to or are expected
to be capable of entering into closing transactions with a Fund, there can be no assurance that a Fund will be able to liquidate an OTC
option at a favorable price at any time prior to its expiration. OTC options are not subject to the protections afforded purchasers of
listed options by the Options Clearing Corporation or other clearing organizations. An exchange-traded option may be closed out only on
an exchange that generally provides a liquid secondary market for an option of the same series. If a liquid secondary market for an exchange-traded
option does not exist, it might not be possible to effect a closing transaction with respect to a particular option, with the result that
a fund would have to exercise the option in order to consummate the transaction.

• FLexible EXchange Options ("FLEX
Options"). FLEX Options are customized options contracts available through national securities exchanges that are guaranteed for
settlement by the Options Clearing Corporation ("OCC"), a market clearinghouse. FLEX Options provide investors with the ability
to customize terms of an option, including exercise prices, exercise styles (European-style options, which are exercisable only at the
expiration date, versus American-style options, which are exercisable any time prior to the expiration date), and expiration dates, while
achieving price discovery in competitive, transparent auction markets and avoiding the counterparty exposure of the OTC option positions.

There is no assurance that a liquid secondary market on an options exchange will exist for any particular option, or at any particular time, and for some options no secondary market on an exchange or elsewhere may exist. If a Fund is unable to close out a call option on securities that it has written before the option is exercised, the Fund may be required to purchase the optioned securities in order to satisfy its obligation under the option to deliver such securities. If the Fund is unable to effect a closing sale transaction with respect to options on securities that it has purchased, it would have to exercise the option in order to realize any profit and would incur transaction costs upon the purchase and sale of the underlying securities. The writing and purchasing of options is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Imperfect correlation between the options and securities markets may detract from the effectiveness of attempted hedging. Options transactions may result in significantly higher transaction costs and portfolio turnover for a Fund.

*Writing Call and Put Options*. When a Fund writes a call option, it gives the purchaser of the option the right to buy a specific security at a specified price at any time before the option expires. When a Fund writes a put option, it gives the purchaser of the option the right to sell to the Fund a specific security at a specified price at any time before the option expires. In both situations, the Fund receives a premium from the purchaser of the option.

The premium received by a Fund reflects, among other factors, the current market price of the underlying security, the relationship of the exercise price to the market price, the time period until the expiration of the option and interest rates. The premium generates additional income for the Fund if the option expires unexercised or is closed out at a profit. By writing a call, a Fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option, but it retains the risk of loss if the price of the security should decline. By writing a put, a Fund assumes the risk that it may have to purchase the underlying security at a price that may be higher than its market value at time of exercise.

A Fund usually owns the underlying security covered by any outstanding call option. With respect to an outstanding put option, a Fund deposits and maintains with its custodian or segregates on the Fund's records, cash, or other liquid assets with a value at least equal to the market value of the option that was written.

Once a Fund has written an option, it may terminate its obligation before the option is exercised. The Fund executes a closing transaction by purchasing an option of the same series as the option previously written. The Fund has a gain or loss depending on whether the premium received when the option was written exceeds the closing purchase price plus related transaction costs.

*Purchasing Call and Put Options*. When a Fund purchases a call option, it receives, in return for the premium it pays, the right to buy from the writer of the option the underlying security at a specified price at any time before the option expires. A Fund purchases call options in anticipation of an increase in the market value of securities that it intends ultimately to buy. During the life of the call option, the Fund is able to buy the underlying security at the exercise price regardless of any increase in the market price of the underlying security. For a call option to result in a gain, the market price of the underlying security must exceed the sum of the exercise price, the premium paid, and transaction costs.

When a Fund purchases a put option, it receives, in return for the premium it pays, the right to sell to the writer of the option the underlying security at a specified price at any time before the option expires. A Fund purchases put options in anticipation of a decline in the market value of the underlying security. During the life of the put option, the Fund is able to sell the underlying security at the exercise price regardless of any decline in the market price of the underlying security. In order for a put option to result in a gain, the market price of the underlying security must decline, during the option period, below the exercise price enough to cover the premium and transaction costs.

Once a Fund purchases an option, it may close out its position by selling an option of the same series as the option previously purchased. The Fund has a gain or loss depending on whether the closing sale price exceeds the initial purchase price plus related transaction costs.

*Options on Securities Indices*. Each Fund may purchase and sell put and call options on any securities index based on securities in which the Fund may invest. Securities index options are designed to reflect price fluctuations in a group of securities or segment of the securities market rather than price fluctuations in a single security. Options on securities indices are similar to options on securities, except that the exercise of securities index options requires cash payments and does not involve the actual purchase or sale of securities. Each Fund engages in transactions in put and call options on securities indices for the same purposes as they engage in transactions in options on securities. When a Fund writes call options on securities indices, it holds in its portfolio underlying securities which, in the judgment of those managing the fund's investments, correlate closely with the securities index and which have a value at least equal to the aggregate amount of the securities index options.

*Risks Associated with Option Transactions*. An option position may be closed out only on an exchange that provides a secondary market for an option of the same series. A Fund generally purchases or writes only those options for which there appears to be an active secondary market. However, there is no assurance that a liquid secondary market on an exchange exists for any particular option, or at any particular time. If a Fund is unable to effect closing sale transactions in options it has purchased, it has to exercise its options in order to realize any profit and may incur transaction costs upon the purchase or sale of underlying securities. If the Fund is unable to effect a closing purchase transaction for a covered option that it has written, it is not able to sell the underlying securities until the option expires or is exercised. A Fund's ability to terminate option positions established in the over-the-counter market may be more limited than a Fund's ability to terminate exchange-traded options and may also involve the risk that broker-dealers participating in such transactions might fail to meet their obligations.

<u>Futures Contracts and Options on Futures Contracts</u>

Funds may purchase and sell futures contracts of many types, including for example, futures contracts covering indexes, financial instruments, and foreign currencies. Funds may purchase and sell financial futures contracts and options on those contracts. Financial futures contracts are commodities contracts based on financial instruments such as U.S. Treasury bonds or bills or on securities indices such as the S&P 500 Index. The Commodity Futures Trading Commission regulates futures contracts, options on futures contracts, and the commodity exchanges on which they are traded. Through the purchase and sale of futures contracts and related options, a Fund may seek to hedge against a decline in the value of securities owned by the Fund or an increase in the price of securities that the Fund plans to purchase. Funds may also purchase and sell futures contracts and related options to maintain cash reserves while simulating full investment in securities and to keep substantially all of its assets exposed to the market. Funds may enter into futures contracts and related options transactions both for hedging and non-hedging purposes.

*Futures Contracts*. Funds may purchase or sell a futures contract to gain exposure to a particular market asset without directly purchasing that asset. When a Fund sells a futures contract based on a financial instrument, the Fund is obligated to deliver that kind of instrument at a specified future time for a specified price. When a Fund purchases that kind of contract, it is obligated to take delivery of the instrument at a specified time and to pay the specified price. In most instances, these contracts are closed out by entering into an offsetting transaction before the settlement date. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase plus transaction costs are less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase plus transaction costs. Although the Fund usually liquidates futures contracts on financial instruments, by entering into an offsetting transaction before the settlement date, they may make or take delivery of the underlying securities when it appears economically advantageous to do so.

A futures contract based on a securities index provides for the purchase or sale of a group of securities at a specified future time for a specified price. These contracts do not require actual delivery of securities but result in a cash settlement. The amount of the settlement is based on the difference in value of the index between the time the contract was entered into and the time it is liquidated (at its expiration or earlier if it is closed out by entering into an offsetting transaction).

When a Fund purchases or sells a futures contract, it pays a commission to the futures commission merchant through which the Fund executes the transaction. When entering into a futures transaction, the Fund does not pay the execution price, as it does when it purchases a security, or a premium, as it does when it purchases an option. Instead, the Fund deposits an amount of cash or other liquid assets (generally about 5% of the futures contract amount) with its futures commission merchant. This amount is known as "initial margin." In contrast to the use of margin account to purchase securities, the Fund's deposit of initial margin does not constitute the borrowing of money to finance the transaction in the futures contract. The initial margin represents a good faith deposit that helps assure the Fund's performance of the transaction. The futures commission merchant returns the initial margin to the Fund upon termination of the futures contract if the Fund has satisfied all its contractual obligations.

Subsequent payments to and from the futures commission merchant, known as "variation margin," are required to be made on a daily basis as the price of the futures contract fluctuates, a process known as "marking to market." The fluctuations make the long or short positions in the futures contract more or less valuable. If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made. Any additional cash is required to be paid to or released by the broker and the Fund realizes a loss or gain.

In using futures contracts, a Fund may seek to establish with more certainty than would otherwise be possible the effective price of or rate of return on portfolio securities or securities that the Fund proposes to acquire. A Fund, for example, sells futures contracts in anticipation of a rise in interest rates that would cause a decline in the value of its debt investments. When this kind of hedging is successful, the futures contract increases in value when the Fund's debt securities decline in value and thereby keeps the Fund's net asset value from declining as much as it otherwise would. A Fund may also sell futures contracts on securities indices in anticipation of or during a stock market decline in an endeavor to offset a decrease in the market value of its equity investments. When a Fund is not fully invested and anticipates an increase in the cost of securities it intends to purchase, it may purchase financial futures contracts.

When increases in the prices of equities are expected, a Fund may purchase futures contracts on securities indices in order to gain rapid market exposure that may partially or entirely offset increases in the cost of the equity securities it intends to purchase.

*Options on Futures Contracts*. Funds may also purchase and write call and put options on futures contracts. A call option on a futures contract gives the purchaser the right, in return for the premium paid, to purchase a futures contract (assume a long position) at a specified exercise price at any time before the option expires. A put option gives the purchaser the right, in return for the premium paid, to sell a futures contract (assume a short position), for a specified exercise price, at any time before the option expires.

Upon the exercise of a call, the writer of the option is obligated to sell the futures contract (to deliver a long position to the option holder) at the option exercise price, which will presumably be lower than the current market price of the contract in the futures market. Upon exercise of a put, the writer of the option is obligated to purchase the futures contract (deliver a short position to the option holder) at the option exercise price, which will presumably be higher than the current market price of the contract in the futures market. However, as with the trading of futures, most options are closed out prior to their expiration by the purchase or sale of an offsetting option at a market price that reflects an increase or a decrease from the premium originally paid. Options on futures can be used to hedge substantially the same risks addressed by the direct purchase or sale of the underlying futures contracts. For example, if a Fund anticipates a rise in interest rates and a decline in the market value of the debt securities in its portfolio, it might purchase put options or write call options on futures contracts instead of selling futures contracts.

If a Fund purchases an option on a futures contract, it may obtain benefits similar to those that would result if it held the futures position itself. But in contrast to a futures transaction, the purchase of an option involves the payment of a premium in addition to transaction costs. In the event of an adverse market movement, however, the Fund is not subject to a risk of loss on the option transaction beyond the price of the premium it paid plus its transaction costs.

When a Fund writes an option on a futures contract, the premium paid by the purchaser is deposited with the Fund's custodian. The Fund must maintain with its futures commission merchant all or a portion of the initial margin requirement on the underlying futures contract. It assumes a risk of adverse movement in the price of the underlying futures contract comparable to that involved in holding a futures position. Subsequent payments to and from the futures commission merchant, similar to variation margin payments, are made as the premium and the initial margin requirements are marked to market daily. The premium may partially offset an unfavorable change in the value of portfolio securities, if the option is not exercised, or it may reduce the amount of any loss incurred by the Fund if the option is exercised.

*Risks Associated with Futures Transactions*. There are many risks associated with transactions in futures contracts and related options. The value of the assets that are the subject of the futures contract may not move in the anticipated direction. A Fund's successful use of futures contracts is subject to the ability of those managing the fund's investments to predict correctly the factors affecting the market values of the Fund's portfolio securities. For example, if a Fund is hedged against the possibility of an increase in interest rates which would adversely affect debt securities held by the Fund and the prices of those debt securities instead increases, the Fund loses part or all of the benefit of the increased value of its securities it hedged because it has offsetting losses in its futures positions. Other risks include imperfect correlation between price movements in the financial instrument or securities index underlying the futures contract, on the one hand, and the price movements of either the futures contract itself or the securities held by the Fund, on the other hand. If the prices do not move in the same direction or to the same extent, the transaction may result in trading losses.

Prior to exercise or expiration, a position in futures may be terminated only by entering into a closing purchase or sale transaction. This requires a secondary market on the relevant contract market. A Fund enters into a futures contract or related option only if there appears to be a liquid secondary market. There can be no assurance, however, that such a liquid secondary market exists for any particular futures contract or related option at any specific time. Thus, it may not be possible to close out a futures position once it has been established. Under such circumstances, the Fund continues to be required to make daily cash payments of variation margin in the event of adverse price movements. In such situations, if the Fund has insufficient cash, it may be required to sell portfolio securities to meet daily variation margin requirements at a time when it may be disadvantageous to do so. In addition, the Fund may be required to perform under the terms of the futures contracts it holds. The inability to close out futures positions also could have an adverse impact on the Fund's ability effectively to hedge its portfolio.

Most United States futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. This daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses.

<u>Swap Agreements and Options on Swap Agreements</u>

Funds may engage in swap transactions, including, but not limited to, swap agreements on interest rates, security or commodity indexes, specific securities and commodities, and credit and event-linked swaps, to the extent permitted by its investment restrictions. To the extent a Fund may invest in foreign currency-denominated securities, it may also invest in currency swap agreements and currency exchange rate swap agreements. Funds may also enter into options on swap agreements ("swap options").

Funds may enter into swap transactions for any legal purpose consistent with its investment objectives and policies, such as for the purpose of attempting to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets; to protect against currency fluctuations; as a duration management technique; to protect against any increase in the price of securities a Fund anticipates purchasing at a later date; to gain exposure to one or more securities, currencies, or interest rates; to take advantage of perceived mispricing in the securities markets; or to gain exposure to certain markets in the most economical way possible.

Swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or "swapped" between the parties are generally calculated with respect to a "notional amount," i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a "basket" of securities or commodities representing a particular index.

• Interest Rate Swaps. Interest
rate swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest (for example,
an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal). Forms of swap agreements
also include interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that
interest rates exceed a specified rate, or "cap"; interest rate floors, under which, in return for a premium, one party agrees
to make payments to the other to the extent that interest rates fall below a specified rate, or "floor"; and interest rate
collars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements
exceeding given minimum or maximum levels.

• Currency Swaps. A currency swap
is an agreement to exchange cash flows on a notional amount based on changes in the relative values of the specified currencies.

• Index Swaps. An index swap is
an agreement to make or receive payments based on the different returns that would be achieved if a notional amount were invested in a
specified basket of securities (such as the S&P 500 Index) or in some other investment (such as U.S. Treasury Securities).

• Total Return Swaps. A total return
swap is an agreement to make payments of the total return from a specified asset or instrument (or a basket of such instruments) during
the specified period, in return for payments equal to a fixed or floating rate of interest or the total return from another specified
asset or instrument. Alternatively, a total return swap can be structured so that one party will make payments to the other party if the
value of the relevant asset or instrument increases, but receive payments from the other party if the value of that asset or instrument
decreases.

• Commodity Swap Agreements. Consistent
with a Fund's investment objectives and general investment policies, certain of the Funds may invest in commodity swap agreements.
For example, an investment in a commodity swap agreement may involve the exchange of floating-rate interest payments for the total return
on a commodity index. In a total return commodity swap, a Fund will receive the price appreciation of a commodity index, a portion of
the index, or a single commodity in exchange for paying an agreed-upon fee. If the commodity swap is for one period, a Fund may pay a
fixed fee, established at the outset of the swap. However, if the term of the commodity swap is for more than one period, with interim
swap payments, a Fund may pay an adjustable or floating fee. With a "floating" rate, the fee may be pegged to a base rate,
such as the Secured Overnight Financing Rate (SOFR) or a similar reference rate, and is adjusted each period. Therefore, if interest rates
increase over the term of the swap contract, a Fund may be required to pay a higher fee at each swap reset date.

• Credit Default Swap Agreements.
The "buyer" in a credit default contract is obligated to pay the "seller" a periodic stream of payments over the
term of the contract provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs,
the seller must pay the buyer the full notional value, or "par value," of the reference obligation in exchange for the reference
obligation. A Fund may be either the buyer or seller in a credit default swap transaction. If a Fund is a buyer and no event of default
occurs, the Fund will lose its investment and recover nothing. However, if an event of default occurs, the Fund (if the buyer) will receive
the full notional value of the reference obligation that may have little or no value. As a seller, a Fund receives a fixed rate of income
throughout the term of the contract, which typically is between six months and five years, provided that there is no default event. If
an event of default occurs, the seller must pay the buyer the full notional value of the reference obligation. In addition, collateral
posting requirements are individually negotiated and there is no regulatory requirement that a counterparty post collateral to secure
its obligations or a specified amount of cash, depending upon the terms of the swap, under a credit default swap. Furthermore, there is
no requirement that a party be informed in advance when a credit default swap agreement is sold. Accordingly, a Fund may have difficulty
identifying the party responsible for payment of its claims. The notional value of credit default swaps with respect to a particular investment
is often larger than the total par value of such investment outstanding and, in event of a default, there may be difficulties in making
the required deliveries of the reference investments, possibly delaying payments.

Funds may invest in derivative instruments that provide exposure to one or more credit default swaps. For example, a Fund may invest in a derivative instrument known as the Loan-Only Credit Default Swap Index ("LCDX"), a tradable index with 100 equally-weighted underlying single-name loan-only credit default swaps ("LCDS"). Each underlying LCDS references an issuer whose loans trade in the secondary leveraged loan market. A Fund can either buy the index (take on credit exposure) or sell the index (pass credit exposure to a counterparty). While investing in these types of derivatives will increase the universe of debt securities to which a Fund is exposed, such investments entail additional risks that are not typically associated with investments in other debt securities. Credit default swaps and other derivative instruments related to loans are subject to the risks associated with loans generally, as well as the risks of derivative transactions.

• Investment Pools. Funds may invest
in publicly or privately issued interests in investment pools whose underlying assets are credit default, credit-linked, interest rate,
currency exchange, equity-linked or other types of swap contracts and related underlying securities or securities loan agreements. The
pools' investment results may be designed to correspond generally to the performance of a specified securities index or "basket"
of securities, or sometimes a single security. These types of pools are often used to gain exposure to multiple securities with a smaller
investment than would be required to invest directly in the individual securities. They also may be used to gain exposure to foreign securities
markets without investing in the foreign securities themselves and/or the relevant foreign market. To the extent that a Fund invests in
pools of swaps and related underlying securities or securities loan agreements whose return corresponds to the performance of a foreign
securities index or one or more foreign securities, investing in such pools will involve risks similar to the risks of investing in foreign
securities. In addition to the risks associated with investing in swaps generally, a Fund bears the risks and costs generally associated
with investing in pooled investment vehicles, such as paying the fees and expenses of the pool and the risk that the pool or the operator
of the pool may default on its obligations to the holder of interests in the pool, such as a Fund. Interests in privately offered investment
pools of swaps may be considered illiquid.

• Contracts for Differences. "Contracts
for differences" are swap arrangements in which a Fund may agree with a counterparty that its return (or loss) will be based on
the relative performance of two different groups or "baskets" of securities. For example, as to one of the baskets, a Fund's
return is based on theoretical long futures positions in the securities comprising that basket, and as to the other basket, a Fund's
return is based on theoretical short futures positions in the securities comprising that other basket. The notional sizes of the baskets
will not necessarily be the same, which can give rise to investment leverage. Funds may also use actual long and short futures positions
to achieve the market exposure(s) as contracts for differences. Funds may enter into swaps and contracts for differences for investment
return, hedging, risk management and for investment leverage.

• Swaptions. A swap option (also
known as "swaptions") is a contract that gives a counterparty the right (but not the obligation) in return for payment of
a premium, to enter into a new swap agreement or to shorten, extend, cancel, or otherwise modify an existing swap agreement, at some designated
future time on specified terms. The buyer and seller of the swap option agree on the strike price, length of the option period, the term
of the swap, notional amount, amortization and frequency of settlement. Funds may engage in swap options for hedging purposes or in an
attempt to manage and mitigate credit and interest rate risk. Funds may write (sell) and purchase put and call swap options. The use of
swap options involves risks, including, among others, imperfect correlation between movements of the price of the swap options and the
price of the securities, indices or other assets serving as reference instruments for the swap option, reducing the effectiveness of the
instrument for hedging or investment purposes.

*Obligations under Swap Agreements*. The swap agreements a Fund enters into settle in cash and, therefore, provide for calculation of the obligations of the parties to the agreement on a "net basis." Consequently, a Fund's current obligations (or rights) under such a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). A Fund's current obligations under such a swap agreement will be accrued daily (offset against any amounts owed to the Fund).

*Risks Associated with Swap Agreements*. Swaps can be highly volatile and may have a considerable impact on a Fund's performance, as the potential gain or loss on any swap transaction is not subject to any fixed limit. Whether a Fund's use of swap agreements or swap options will be successful in furthering its investment objective of total return will depend on the ability of those managing the fund's investments to predict correctly whether certain types of investments are likely to produce greater returns than other investments. Because they are two party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, a Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Funds will enter into swap agreements only with counterparties that present minimal credit risks, as determined by those managing the fund's investments. Certain restrictions imposed on each Fund by the Internal Revenue Code may limit a Fund's ability to use swap agreements.

Depending on the terms of the particular option agreement, a Fund will generally incur a greater degree of risk when it writes a swap option than it will incur when it purchases a swap option. When a Fund purchases a swap option, it risks losing only the amount of the premium it has paid should it decide to let the option expire unexercised. However, when a Fund writes a swap option, upon exercise of the option the Fund will become obligated according to the terms of the underlying agreement.

*Liquidity of Swap Agreements*. Some swap markets have grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, these swap markets have become relatively liquid. The liquidity of swap agreements will be determined by those managing the fund's investments based on various factors, including:

• the frequency of trades and quotations,

• the number of dealers and prospective
purchasers in the marketplace,

• dealer undertakings to make a
market,

• the nature of the security (including
any demand or tender features), and

• the nature of the marketplace
for trades (including the ability to assign or offset a portfolio's rights and obligations relating to the investment).

Such determination will govern whether a swap will be deemed to be within each Fund's restriction on investments in illiquid securities.

*Valuing Swap Agreements*. For purposes of applying a fund's investment policies and restrictions (as stated in the Prospectuses and this SAI) swap agreements are generally valued by the funds at market value. In the case of a credit default swap, however, in applying certain of the funds' investment policies and restrictions the fund will value the credit default swap at its notional value or its full exposure value (i.e., the sum of the notional amount for the contract plus the market value), but may value the credit default swap at market value for purposes of applying certain of the funds' other investment policies and restrictions. For example, a fund may value credit default swaps at full exposure value for purposes of the fund's credit quality guidelines because such value reflects the fund's actual economic exposure during the term of the credit default swap agreement. In this context, both the notional amount and the market value may be positive or negative depending on whether the fund is selling or buying protection through the credit default swap. The manner in which certain securities or other instruments are valued by a fund for purposes of applying investment policies and restrictions may differ from the manner in which those investments are valued by other types of investors.

<u>Permissible Uses of Futures and Options on Futures Contracts</u>

Each Fund may enter into futures contracts and related options transactions, for hedging purposes and for other appropriate risk management purposes, and to modify the Fund's exposure to various currency, commodity, equity, or fixed-income markets. Each Fund may engage in futures trading in an effort to generate returns. When using futures contracts and options on futures contracts for hedging or risk management purposes, each Fund determines that the price fluctuations in the contracts and options are substantially related to price fluctuations in securities held by the Fund or which it expects to purchase. In pursuing traditional hedging activities, each Fund may sell futures contracts or acquire puts to protect against a decline in the price of securities that the Fund owns. Each Fund may purchase futures contracts or calls on futures contracts to protect the Fund against an increase in the price of securities the Fund intends to purchase before it is in a position to do so.

<u>Limitations on the Use of Futures, Options on Futures Contracts, and Swaps</u>

CFTC Rule 4.5 provides that an investment company does not meet the definition of "commodity pool operator" under the CEA if its use of futures contracts, options on futures contracts, and swaps is sufficiently limited that the fund can fall within one of two exclusions set out in Rule 4.5. Each Fund intends to limit its use of futures contracts, options on futures contracts, and swaps to the degree necessary to fall within one of the two exclusions. If a Fund is unable to do so, it may incur expenses that are necessary to comply with the CEA and rules the CFTC has adopted under it.

<u>Risk of Potential Government Regulation of Derivatives</u>

It is possible that additional government regulation of various types of derivative instruments, including futures, options and swap agreements, may limit or prevent a fund from using such instruments as a part of its investment strategy, and could ultimately prevent a fund from being able to achieve its investment objective. It is difficult to predict the effects future legislation and regulation in this area, but the effects could be substantial and adverse. It is possible that legislative and regulatory activity could limit or restrict the ability of a fund to use certain instruments as a part of its investment strategy.

Limits or restrictions applicable to the counterparties with which the funds engage in derivative transactions could also prevent the funds from using certain instruments.

**Environmental, Social, and Governance Factors in the Selection of Portfolio Securities**

*(Applicable to the Principal CLO ETF and Principal Securitized Debt ETF.)*

The portfolio managers of the Funds consider one or more environmental, social, and/or governance ("ESG") factors along with other, non-ESG factors in making investment decisions. The consideration of ESG factors is intended to further the stated objective of the particular Funds. These ESG factors are generally no more significant than other factors in the investment selection process, such that ESG factors may not be determinative in deciding to include or exclude any particular investment in the portfolio. By way of example, environmental factors can include one or more of the following: climate change, natural resources, pollution and waste, and environmental opportunities. Social factors can include one or more of the following: human capital, product liability, stakeholder opposition, and social opportunities. Governance factors can include corporate governance and/or corporate behavior. Integration of ESG factors is qualitative and subjective by nature. There is no guarantee that the criteria used, or judgment exercised, will reflect the beliefs or values of any particular investor. Further, there is no assurance that any strategy or integration of ESG factors will be successful or profitable.

**Fixed-Income Securities**

<u>Inflation-Indexed Bonds</u>

Some Funds may invest in inflation-indexed bonds or inflation protected debt securities, which are fixed income securities whose value is periodically adjusted according to the rate of inflation. Two structures are common. The U.S. Treasury and some other issuers utilize a structure that accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price Index accruals as part of a semi-annual coupon. Inflation-indexed securities issued by the U.S. Treasury (Treasury Inflation Protected Securities or TIPS) have maturities of approximately five, ten or thirty years, although it is possible that securities with other maturities will be issued in the future. The U.S. Treasury securities pay interest on a semi-annual basis equal to a fixed percentage of the inflation-adjusted principal amount. If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates in turn are tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if the rate of inflation rises at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds. While these securities are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the bond's inflation measure.

The periodic adjustment of U.S. inflation-indexed bonds is tied to the Consumer Price Index for Urban Consumers (CPI-U), which is calculated monthly by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a foreign government are generally adjusted to reflect a comparable inflation index calculated by that government. Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity.

<u>Step-Coupon Securities</u> 

Each Fund may invest in step-coupon securities. Step-coupon securities trade at a discount from their face value and pay coupon interest. The coupon rate is low for an initial period and then increases to a higher coupon rate thereafter. Market values of these types of securities generally fluctuate in response to changes in interest rates to a greater degree than conventional interest-paying securities of comparable term and quality. Under many market conditions, investments in such securities may be illiquid, making it difficult for a Fund to dispose of them or determine their current value.

<u>"Stripped" Securities</u> 

Each Fund may invest in stripped securities, which are usually structured with two or more classes that receive different proportions of the interest and principal distribution on a pool of U.S. government or foreign government securities or mortgage assets. In some cases, one class will receive all of the interest (the interest-only or "IO" class), while the other class will receive all of the principal (the principal-only or "PO" class). Stripped securities commonly have greater market volatility than other types of fixed-income securities. In the case of stripped mortgage securities, if the underlying mortgage assets experience greater than anticipated payments of principal, a Fund may fail to recoup fully its investments in IOs. Stripped securities may be illiquid. Stripped securities may be considered derivative securities.

<u>Zero-Coupon Securities</u>

Each Fund may invest in zero-coupon securities. Zero-coupon securities have no stated interest rate and pay only the principal portion at a stated date in the future. They usually trade at a substantial discount from their face (par) value. Zero-coupon securities are subject to greater market value fluctuations in response to changing interest rates than debt obligations of comparable maturities that make distributions of interest in cash.

**High Yield Securities**

Each Fund may invest a portion of its assets in bonds that are rated below investment grade (sometimes called "high yield bonds" or "junk bonds"), which are rated at the time of purchase Ba1 or lower by Moody's and BB+ or lower by S&P Global Ratings. If the bond has been rated by only one of the rating agencies, that rating will determine the bond's rating; if the bond is rated differently by the rating agencies, the highest rating will be used; and if the bond has not been rated by either of the rating agencies, those selecting such investments will determine the bond's quality. Lower-rated bonds involve a higher degree of credit risk, which is the risk that the issuer will not make interest or principal payments when due. In the event of an unanticipated default, a fund would experience a reduction in its income and could expect a decline in the market value of the bonds so affected. Issuers of high yield securities may be involved in restructurings or bankruptcy proceedings that may not be successful. If an issuer defaults, it may not be able to pay all or a portion of interest and principal owed to the fund, it may exchange the high yield securities owned by the fund for other securities, including equities, and/or the fund may incur additional expenses while seeking recovery of its investment. Some funds may also invest in unrated bonds of foreign and domestic issuers. Unrated bonds, while not necessarily of lower quality than rated bonds, may not have as broad a market. Because of the size and perceived demand of the issue, among other factors, certain municipalities may not incur the expense of obtaining a rating. Those managing the fund's investments will analyze the creditworthiness of the issuer, as well as any financial institution or other party responsible for payments on the bond, in determining whether to purchase unrated bonds. Unrated bonds will be included in the limitation each fund has with regard to high yield bonds unless those managing the fund's investments deem such securities to be the equivalent of investment-grade bonds. Some of the high yield securities consist of Rule 144A securities. High yield securities may contain any type of interest rate payment or reset terms, including fixed rate, adjustable rate, zero-coupon, contingent, deferred, payment-in-kind, and those with auction rate features.

**Initial Public Offerings ("IPOs")**

An IPO is a company's first offering of stock to the public. IPO risk is that the market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading, and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk. In addition, the market for IPO shares can be speculative and/or inactive for extended periods. The limited number of shares available for trading in some IPOs may make it more difficult for a fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. Investors in IPO shares can be affected by substantial dilution in the value of their shares by sales of additional shares and by concentration of control in existing management and principal shareholders.

When a fund's asset base is small, a significant portion of the fund's performance could be attributable to investments in IPOs because such investments would have a magnified impact on the fund. As the fund's assets grow, the effect of the fund's investments in IPOs on the fund's performance probably will decline, which could reduce the fund's performance. Because of the price volatility of IPO shares, a fund may choose to hold IPO shares for a very short period. This may increase the turnover of the fund's portfolio and lead to increased expenses to the fund, such as commissions and transaction costs. By selling IPO shares, the fund may realize taxable gains it will subsequently distribute to shareholders.

**Inverse Floating Rate and Other Variable and Floating Rate Instruments**

Each Fund may purchase variable and floating rate instruments. These instruments may include variable amount master demand notes that permit the indebtedness thereunder to vary in addition to providing for periodic adjustments in the interest rate. These instruments may also include leveraged inverse floating rate debt instruments, or "inverse floaters". The interest rate of an inverse floater resets in the opposite direction from the market rate of interest on a security or interest to which it is related. An inverse floater may be considered to be leveraged to the extent that its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest and is subject to many of the same risks as derivatives. The higher degree of leverage inherent in inverse floaters is associated with greater volatility in their market values. Certain of these investments may be illiquid. The absence of an active secondary market with respect to these investments could make it difficult for a Fund to dispose of a variable or floating rate note if the issuer defaulted on its payment obligation or during periods that a Fund is not entitled to exercise its demand rights, and a Fund could, for these or other reasons, suffer a loss with respect to such instruments.

**Investment Company Securities**

Securities of other investment companies, including shares of closed-end investment companies (including interval funds), unit investment trusts, various exchange-traded funds ("ETFs"), and other open-end investment companies, represent interests in professionally managed portfolios that may invest in a variety of instruments. Certain types of investment companies, such as certain closed-end investment companies, do not continuously offer their shares for sale (like open-end investment companies) but instead issue a fixed number of shares that trade on a stock exchange or over-the-counter at a premium or a discount to their net asset value. An interval fund is a type of closed-end investment company that is continuously offered at net asset value, is not listed on an exchange, and only periodically offers to repurchase a limited amount of outstanding shares from its shareholders. Investing in interval funds involves liquidity risk, and the liquidity risk is even greater in interval funds that invest in securities of companies with smaller market capitalizations, derivatives, securities with substantial market and/or credit risk, or securities that are themselves illiquid. Other types of investment companies, such as ETFs, are continuously offered at net asset value but may also be traded in the secondary market. ETFs are often structured to perform in a similar fashion to a broad-based securities index. Investing in ETFs involves generally the same risks as investing directly in the underlying instruments. Investing in ETFs involves the risk that they will not perform in exactly the same fashion, or in response to the same factors, as the index or underlying instruments. Shares of ETFs may trade at prices other than NAV.

A fund that invests in another investment company is subject to the risks associated with direct ownership of the securities in which such investment company invests. Fund shareholders indirectly bear their proportionate share of the expenses of each such investment company, including its advisory and administrative fees. The fund would also continue to pay its own advisory fees and other expenses. Consequently, the fund and its shareholders would, in effect, absorb two levels of fees with respect to investments in other investment companies.

A fund may invest in affiliated underlying funds, and those who manage such fund's investments and their affiliates may earn different fees from different underlying funds and may have an incentive to allocate more fund assets to underlying funds from which they receive higher fees.

**Leverage** 

If a fund makes investments in futures contracts, forward contracts, swaps and other derivative instruments, these instruments provide the economic effect of financial leverage by creating additional investment exposure, as well as the potential for greater loss. If a fund uses leverage through activities such as borrowing, entering into short sales, purchasing securities on margin or on a "when-issued" basis or purchasing derivative instruments in an effort to increase its returns, the fund has the risk of magnified capital losses that occur when losses affect an asset base, enlarged by borrowings or the creation of liabilities, that exceeds the net assets of the fund. The net asset value of a fund employing leverage will be more volatile and sensitive to market movements. Leverage may involve the creation of a liability that requires the fund to pay interest. Leveraging may cause a fund to liquidate portfolio positions to satisfy its obligations when it may not be advantageous to do so. To the extent that a fund is not able to close out a leveraged position because of market illiquidity, a fund's liquidity may be impaired.

**Master Limited Partnerships ("MLPs")** 

An MLP is an entity that is generally taxed as a partnership for federal income tax purposes and that derives each year at least 90% of its gross income from "Qualifying Income". Qualifying Income includes interest, dividends, real estate rents, gain from the sale or disposition of real property, income and gain from commodities or commodity futures, and income and gain from mineral or natural resources activities that generate Qualifying Income. MLP interests (known as units) are traded on securities exchanges or over-the-counter. An MLP's organization as a partnership and compliance with the Qualifying Income rules generally eliminates federal tax at the entity level.

An MLP has one or more general partners (who may be individuals, corporations, or other partnerships) which manage the partnership, and limited partners, which provide capital to the partnership but have no role in its management. Typically, the general partner is owned by company management or another publicly traded sponsoring corporation. When an investor buys units in an MLP, the investor becomes a limited partner. Holders of MLP units have limited control and voting rights on matters affecting the partnership and are exposed to a remote possibility of liability for all of the obligations of that MLP in the event that a court determines that the rights of the holders of MLP units to vote to remove or replace the general partner of that MLP, to approve amendments to that MLP's partnership agreement, or to take other action under the partnership agreement of that MLP would constitute "control" of the business of that MLP, or a court or governmental agency determines that the MLP is conducting business in a state without complying with the partnership statute of that state. Holders of MLP units are also exposed to the risk that they will be required to repay amounts to the MLP that are wrongfully distributed to them.

The business of certain MLPs is affected by supply and demand for energy commodities because such MLPs derive revenue and income based upon the volume of the underlying commodity produced, transported, processed, distributed, and/ or marketed. Pipeline MLPs have indirect commodity exposure to oil and gas price volatility because, although they do not own the underlying energy commodity, the general level of commodity prices may affect the volume of the commodity the MLP delivers to its customers and the cost of providing services such as distributing natural gas liquids. The costs of natural gas pipeline MLPs to perform services may exceed the negotiated rates under "negotiated rate" contracts. Processing MLPs may be directly affected by energy commodity prices. Propane MLPs own the underlying energy commodity, and therefore have direct exposure to energy commodity prices. The MLP industry in general could be hurt by market perception that MLP's performance and valuation are directly tied to commodity prices.

Pipeline MLPs are common carrier transporters of natural gas, natural gas liquids (primarily propane, ethane, butane and natural gasoline), crude oil or refined petroleum products (gasoline, diesel fuel and jet fuel). Pipeline MLPs also may operate ancillary businesses such as storage and marketing of such products. Pipeline MLPs derive revenue from capacity and transportation fees. Historically, pipeline output has been less exposed to cyclical economic forces due to its low-cost structure and government-regulated nature. In addition, most pipeline MLPs have limited direct commodity price exposure because they do not own the product being shipped.

Processing MLPs are gatherers and processors of natural gas as well as providers of transportation, fractionation and storage of natural gas liquids ("NGLs"). Processing MLPs derive revenue from providing services to natural gas producers, which require treatment or processing before their natural gas commodity can be marketed to utilities and other end user markets. Revenue for the processor is fee based, although it is not uncommon to have some participation in the prices of the natural gas and NGL commodities for a portion of revenue.

Propane MLPs are distributors of propane to homeowners for space and water heating. Propane MLPs derive revenue from the resale of the commodity on a margin over wholesale cost. The ability to maintain margin is a key to profitability. Propane serves approximately 3% of the household energy needs in the United States, largely for homes beyond the geographic reach of natural gas distribution pipelines. Approximately 70% of annual cash flow is earned during the winter heating season (October through March). Accordingly, volumes are weather dependent, but have utility type functions similar to electricity and natural gas.

MLPs operating interstate pipelines and storage facilities are subject to substantial regulation by the Federal Energy Regulatory Commission ("FERC"), which regulates interstate transportation rates, services and other matters regarding natural gas pipelines including: the establishment of rates for service; regulation of pipeline storage and liquified natural gas facility construction; issuing certificates of need for companies intending to provide energy services or constructing and operating interstate pipeline and storage facilities; and certain other matters. FERC also regulates the interstate transportation of crude oil, including: regulation of rates and practices of oil pipeline companies; establishing equal service conditions to provide shippers with equal access to pipeline transportation; and establishment of reasonable rates for transporting petroleum and petroleum products by pipeline. Certain MLPs regulated by the FERC have the right, but are not obligated, to redeem common units held by an investor who is not subject to U.S. federal income taxation. The financial condition and results of operations of an MLP that redeems its common units could be adversely impacted.

MLPs are subject to various federal, state and local environmental laws and health and safety laws as well as laws and regulations specific to their particular activities. These laws and regulations address: health and safety standards for the operation of facilities, transportation systems and the handling of materials; air and water pollution requirements and standards; solid waste disposal requirements; land reclamation requirements; and requirements relating to the handling and disposition of hazardous materials. MLPs are subject to the costs of compliance with such laws applicable to them, and changes in such laws and regulations may adversely affect their results of operations.

MLPs may be subject to liability relating to the release of substances into the environment, including liability under federal "Superfund" and similar state laws for investigation and remediation of releases and threatened releases of hazardous materials, as well as liability for injury and property damage for accidental events, such as explosions or discharges of materials causing personal injury and damage to property. Such potential liabilities could have a material adverse effect upon the financial condition and results of operations of MLPs.

MLPs are subject to numerous business related risks, including: deterioration of business fundamentals reducing profitability due to development of alternative energy sources, consumer sentiment with respect to global warming, changing demographics in the markets served, unexpectedly prolonged and precipitous changes in commodity prices and increased competition that reduces the MLP's market share; the lack of growth of markets requiring growth through acquisitions; disruptions in transportation systems; the dependence of certain MLPs upon the energy exploration and development activities of unrelated third parties; availability of capital for expansion and construction of needed facilities; a significant decrease in natural gas production due to depressed commodity prices or otherwise; the inability of MLPs to successfully integrate recent or future acquisitions; and the general level of the economy.

**Municipal Obligations and AMT-Subject Bonds**

Municipal Obligations are obligations issued by or on behalf of states, territories, and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, including municipal utilities, or multi-state agencies or authorities. The interest on Municipal Obligations is exempt from federal income tax in the opinion of bond counsel to the issuer. Three major classifications of Municipal Obligations are: Municipal Bonds, that generally have a maturity at the time of issue of one year or more; Municipal Notes, that generally have a maturity at the time of issue of six months to three years; and Municipal Commercial Paper, that generally has a maturity at the time of issue of 30 to 270 days.

The term "Municipal Obligations" includes debt obligations issued to obtain funds for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets, water and sewer works, and electric utilities. Other public purposes for which Municipal Obligations are issued include refunding outstanding obligations, obtaining funds for general operating expenses, and lending such funds to other public institutions and facilities. To the extent that a fund invests a significant portion of its assets in municipal obligations issued in connection with a single project, the fund likely will be affected by the economic, business or political environment of the project.

AMT-Subject Bonds are industrial development bonds issued by or on behalf of public authorities to obtain funds to provide for the construction, equipment, repair or improvement of privately operated housing facilities, sports facilities, convention or trade show facilities, airport, mass transit, industrial, port or parking facilities, air or water pollution control facilities, and certain local facilities for water supply, gas, electricity, or sewage or solid waste disposal. They are considered to be Municipal Obligations if the interest paid thereon qualifies as exempt from federal income tax in the opinion of bond counsel to the issuer, even though the interest may be subject to the federal individual alternative minimum tax.

<u>Municipal Bonds</u>

Municipal Bonds may be either "general obligation" or "revenue" issues. General obligation bonds are secured by the issuer's pledge of its faith, credit, and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source (e.g., the user of the facilities being financed), but not from the general taxing power. Industrial development bonds and pollution control bonds in most cases are revenue bonds and generally do not carry the pledge of the credit of the issuing municipality. The payment of the principal and interest on industrial revenue bonds depends solely on the ability of the user of the facilities financed by the bonds to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment. Funds may also invest in "moral obligation" bonds that are normally issued by special purpose public authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of the bonds becomes a moral commitment but not a legal obligation of the state or municipality in question.

<u>Municipal Commercial Paper</u>

Municipal Commercial Paper refers to short-term obligations of municipalities that may be issued at a discount and may be referred to as Short-Term Discount Notes. Municipal Commercial Paper is likely to be used to meet seasonal working capital needs of a municipality or interim construction financing. Generally they are repaid from general revenues of the municipality or refinanced with long-term debt. In most cases Municipal Commercial Paper is backed by letters of credit, lending agreements, note repurchase agreements or other credit facility agreements offered by banks or other institutions.

<u>Municipal Notes</u>

Municipal Notes usually are general obligations of the issuer and are sold in anticipation of a bond sale, collection of taxes, or receipt of other revenues. Payment of these notes is primarily dependent upon the issuer's receipt of the anticipated revenues. Other notes include "Construction Loan Notes" issued to provide construction financing for specific projects, and "Bank Notes" issued by local governmental bodies and agencies to commercial banks as evidence of borrowings. Some notes ("Project Notes") are issued by local agencies under a program administered by the U.S. Department of Housing and Urban Development. Project Notes are secured by the full faith and credit of the United States.

• Bank Notes are notes issued by
local governmental bodies and agencies such as those described above to commercial banks as evidence of borrowings. The purposes for which
the notes are issued are varied but they are frequently issued to meet short-term working-capital or capital-project needs. These notes
may have risks similar to the risks associated with TANs and RANs.

• Bond Anticipation Notes ("BANs")
are usually general obligations of state and local governmental issuers which are sold to obtain interim financing for projects that will
eventually be funded through the sale of long-term debt obligations or bonds. The ability of an issuer to meet its obligations on its
BANs is primarily dependent on the issuer's access to the long-term municipal bond market and the likelihood that the proceeds of
such bond sales will be used to pay the principal and interest on the BANs.

• Construction Loan Notes are issued
to provide construction financing for specific projects. Permanent financing, the proceeds of which are applied to the payment of construction
loan notes, is sometimes provided by a commitment by the Government National Mortgage Association ("GNMA") to purchase the
loan, accompanied by a commitment by the Federal Housing Administration to insure mortgage advances thereunder. In other instances, permanent
financing is provided by commitments of banks to purchase the loan.

• Revenue Anticipation Notes ("RANs")
are issued by governments or governmental bodies with the expectation that future revenues from a designated source will be used to repay
the notes. In general, they also constitute general obligations of the issuer. A decline in the receipt of projected revenues, such as
anticipated revenues from another level of government, could adversely affect an issuer's ability to meet its obligations on outstanding
RANs. In addition, the possibility that the revenues would, when received, be used to meet other obligations could affect the ability
of the issuer to pay the principal and interest on RANs.

• Tax Anticipation Notes ("TANs")
are issued by state and local governments to finance the current operations of such governments. Repayment is generally to be derived
from specific future tax revenues. TANs are usually general obligations of the issuer. A weakness in an issuer's capacity to raise
taxes due to, among other things, a decline in its tax base or a rise in delinquencies, could adversely affect the issuer's ability
to meet its obligations on outstanding TANs.

<u>Other Municipal Obligations</u>

Other kinds of Municipal Obligations are occasionally available in the marketplace, and the fund may invest in such other kinds of obligations to the extent consistent with its investment objective and limitations. Such obligations may be issued for different purposes and with different security than those mentioned.

<u>Stand-By Commitments</u>

Funds may acquire stand-by commitments with respect to municipal obligations held in their respective portfolios. Under a stand-by commitment, a broker-dealer, dealer, or bank would agree to purchase, at the relevant funds' option, a specified municipal security at a specified price. Thus, a stand-by commitment may be viewed as the equivalent of a put option acquired by a fund with respect to a particular municipal security held in the fund's portfolio.

The amount payable to a fund upon its exercise of a stand-by commitment normally would be 1) the acquisition cost of the municipal security (excluding any accrued interest that the fund paid on the acquisition), less any amortized market premium or plus any amortized market or original issue discount during the period the fund owned the security, plus, 2) all interest accrued on the security since the last interest payment date during the period the security was owned by the fund. Absent unusual circumstances, the fund would value the underlying municipal security at amortized cost. As a result, the amount payable by the broker-dealer, dealer or bank during the time a stand-by commitment is exercisable would be substantially the same as the value of the underlying municipal obligation.

A fund's right to exercise a stand-by commitment would be unconditional and unqualified. Although a fund could not transfer a stand-by commitment, it could sell the underlying municipal security to a third party at any time. It is expected that stand-by commitments generally will be available to the funds without the payment of any direct or indirect consideration. The funds may, however, pay for stand-by commitments if such action is deemed necessary. In any event, the total amount paid for outstanding stand-by commitments held in a fund's portfolio would not exceed 0.50% of the value of a fund's total assets calculated immediately after each stand-by commitment is acquired.

The funds intend to enter into stand-by commitments only with broker-dealers, dealers, or banks that those managing the fund's investments believe present minimum credit risks. A fund's ability to exercise a stand-by commitment will depend upon the ability of the issuing institution to pay for the underlying securities at the time the stand-by commitment is exercised. The credit of each institution issuing a stand-by commitment to a fund will be evaluated on an ongoing basis by those managing the fund's investments.

A fund intends to acquire stand-by commitments solely to facilitate portfolio liquidity and does not intend to exercise its right thereunder for trading purposes. The acquisition of a stand-by commitment would not affect the valuation of the underlying municipal security. Each stand-by commitment will be valued at zero in determining net asset value. Should a fund pay directly or indirectly for a stand-by commitment, its costs will be reflected in realized gain or loss when the commitment is exercised or expires. The maturity of a municipal security purchased by a fund will not be considered shortened by any stand-by commitment to which the obligation is subject. Thus, stand-by commitments will not affect the dollar-weighted average maturity of a fund's portfolio.

<u>Variable and Floating Rate Obligations</u>

Certain Municipal Obligations, obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities, and debt instruments issued by domestic banks or corporations may carry variable or floating rates of interest. Such instruments bear interest at rates which are not fixed, but which vary with changes in specified market rates or indices, such as a bank prime rate or tax-exempt money market index. Variable rate notes are adjusted to current interest rate levels at certain specified times, such as every 30 days. A floating rate note adjusts automatically whenever there is a change in its base interest rate adjustor, e.g., a change in the prime lending rate or specified interest rate indices. Typically, such instruments carry demand features permitting the fund to redeem at par.

The fund's right to obtain payment at par on a demand instrument upon demand could be affected by events occurring between the date the fund elects to redeem the instrument and the date redemption proceeds are due which affects the ability of the issuer to pay the instrument at par value. Those managing the fund's investments monitor on an ongoing basis the pricing, quality, and liquidity of such instruments and similarly monitor the ability of an issuer of a demand instrument, including those supported by bank letters of credit or guarantees, to pay principal and interest on demand. Although the ultimate maturity of such variable rate obligations may exceed one year, the fund treats the maturity of each variable rate demand obligation as the longer of a) the notice period required before the fund is entitled to payment of the principal amount through demand or b) the period remaining until the next interest rate adjustment. Floating rate instruments with demand features are deemed to have a maturity equal to the period remaining until the principal amount can be recovered through demand.

Funds may purchase participation interests in variable rate Municipal Obligations (such as industrial development bonds). A participation interest gives the purchaser an undivided interest in the Municipal Obligation in the proportion that its participation interest bears to the total principal amount of the Municipal Obligation. A fund has the right to demand payment on seven days' notice, for all or any part of the fund's participation interest in the Municipal Obligation, plus accrued interest. Each participation interest is backed by an irrevocable letter of credit or guarantee of a bank. Banks will retain a service and letter of credit fee and a fee for issuing repurchase commitments in an amount equal to the excess of the interest paid on the Municipal Obligations over the negotiated yield at which the instruments were purchased by the fund.

<u>Risks of Municipal Obligations</u>

The yields on Municipal Obligations are dependent on a variety of factors, including general economic and monetary conditions, money market factors, conditions in the Municipal Obligations market, size of a particular offering, maturity of the obligation, and rating of the issue. The fund's ability to achieve its investment objective also depends on the continuing ability of the issuers of the Municipal Obligations in which it invests to meet their obligation for the payment of interest and principal when due.

Municipal Obligations are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the Federal Bankruptcy Act. They are also subject to federal or state laws, if any, which extend the time for payment of principal or interest, or both, or impose other constraints upon enforcement of such obligations or upon municipalities to levy taxes. The power or ability of issuers to pay, when due, principal of and interest on Municipal Obligations may also be materially affected by the results of litigation or other conditions.

From time to time, proposals have been introduced before Congress for the purpose of restricting or eliminating the federal income tax exemption for interest on Municipal Obligations. It may be expected that similar proposals will be introduced in the future. If such a proposal was enacted, the ability of the fund to pay "exempt interest" dividends may be adversely affected. The fund would reevaluate its investment objective and policies and consider changes in its structure.

**Pay-in-Kind Securities** 

Each Fund may invest in pay-in-kind securities. Pay-in-kind securities pay dividends or interest in the form of additional securities of the issuer, rather than in cash. These securities are usually issued and traded at a discount from their face amounts. The amount of the discount varies depending on various factors, such as the time remaining until maturity of the securities, prevailing interest rates, the liquidity of the security, and the perceived credit quality of the issuer. The market prices of pay-in-kind securities generally are more volatile than the market prices of securities that pay interest periodically and are likely to respond to changes in interest rates to a greater degree than are other types of securities having similar maturities and credit quality.

**Portfolio Turnover (Active Trading)**

Portfolio turnover is a measure of how frequently a portfolio's securities are bought and sold. The portfolio turnover rate is generally calculated as the dollar value of the lesser of a portfolio's purchases or sales of shares of securities during a given year, divided by the monthly average value of the portfolio securities during that year (excluding securities whose maturity or expiration at the time of acquisition were less than one year). For example, a portfolio reporting a 100% portfolio turnover rate would have purchased and sold securities worth as much as the monthly average value of its portfolio securities during the year.

It is not possible to predict future turnover rates with accuracy. Many variable factors are outside the control of a portfolio manager. The investment outlook for the securities in which a portfolio may invest may change as a result of unexpected developments in securities markets, economic or monetary policies, or political relationships. High market volatility may result in a portfolio manager using a more active trading strategy than might otherwise be employed. Each portfolio manager considers the economic effects of portfolio turnover but generally does not treat the portfolio turnover rate as a limiting factor in making investment decisions.

Sale of shares by investors may require the liquidation of portfolio securities to meet cash flow needs. In addition, changes in a particular portfolio's holdings may be made whenever the portfolio manager considers that a security is no longer appropriate for the portfolio or that another security represents a relatively greater opportunity. Such changes may be made without regard to the length of time that a security has been held.

Higher portfolio turnover rates generally increase transaction costs that are expenses of the Fund. Active trading may generate short-term gains (losses) for taxable shareholders.

**Preferred Securities**

Preferred securities can include: traditional preferred securities, hybrid preferred securities, $25 par hybrid preferred securities, baby bonds, U.S. dividend received deduction ("DRD") preferred stock, fixed rate and floating rate adjustable preferred securities, step-up preferred securities, public and 144A $1000 par capital securities including U.S. agency subordinated debt issues, trust originated preferred securities, monthly income preferred securities, quarterly income bond securities, quarterly income debt securities, quarterly income preferred securities, corporate trust securities, public income notes, and other trust preferred securities.

• Traditional Preferred Securities.
Traditional preferred securities may be issued by an entity taxable as a corporation and pay fixed or floating rate dividends. However,
these claims are subordinated to more senior creditors, including senior debt holders. "Preference" means that a company must
pay dividends on its preferred securities before paying any dividends on its common stock, and the claims of preferred securities holders
are ahead of common stockholders' claims on assets in a corporate liquidation. Holders of preferred securities usually have no right
to vote for corporate directors or on other matters. Preferred securities share many investment characteristics with both common stock
and bonds.

• Hybrid or Trust Preferred Securities.
Hybrid preferred securities are debt instruments that have characteristics similar to those of traditional preferred securities (characteristics
of both subordinated debt and preferred stock). Hybrid preferred securities may be issued by corporations, generally in the form of interest-bearing
instruments with preferred securities characteristics, or by an affiliated trust or partnership of the corporation, generally in the form
of preferred interests in subordinated business trusts or similarly structured securities. The hybrid preferred securities market consists
of both fixed and adjustable coupon rate securities that are either perpetual in nature or have stated maturity dates. Hybrid preferred
holders generally have claims to assets in a corporate liquidation that are senior to those of traditional preferred securities but subordinate
to those of senior debt holders. Certain subordinated debt and senior debt issues that have preferred characteristics are also considered
to be part of the broader preferred securities market.

Preferred securities may be issued by trusts (likely one that is wholly-owned by a financial institution or other corporate entity, typically a bank holding company) or other special purpose entities established by operating companies, and are therefore not direct obligations of operating companies. The financial institution creates the trust and owns the trust's common securities. The trust uses the sale proceeds of its preferred securities to purchase, for example, subordinated debt issued by the financial institution. The financial institution uses the proceeds from the subordinated debt sale to increase its capital while the trust receives periodic interest payments from the financial institution for holding the subordinated debt. The trust uses the funds received to make dividend payments to the holders of the trust preferred securities. The primary advantage of this structure may be that the trust preferred securities are treated by the financial institution as debt securities for tax purposes and as equity for the calculation of capital requirements.

Trust preferred securities typically bear a market rate coupon comparable to interest rates available on debt of a similarly rated issuer. Typical characteristics include long-term maturities, early redemption by the issuer, periodic fixed or variable interest payments, and maturities at face value. Holders of trust preferred securities have limited voting rights to control the activities of the trust and no voting rights with respect to the financial institution. The market value of trust preferred securities may be more volatile than those of conventional debt securities. Trust preferred securities may be issued in reliance on Rule 144A under the 1933 Act and subject to restrictions on resale. There can be no assurance as to the liquidity of trust preferred securities and the ability of holders, such as a fund, to sell their holdings. The condition of the financial institution can be looked to identify the risks of trust preferred securities as the trust typically has no business operations other than to issue the trust preferred securities. If the financial institution defaults on interest payments to the trust, the trust will not be able to make dividend payments to holders of its securities, such as a fund.

• Floating Rate Preferred Securities.
Floating rate preferred securities provide for a periodic adjustment in the interest rate paid on the securities. The terms of such securities
provide that interest rates are adjusted periodically based upon an interest rate adjustment index. The adjustment intervals may be regular,
and range from daily up to annually, or may be event-based, such as a change in the short-term interest rate. Because of the interest
rate reset feature, floating rate securities provide the Fund with a certain degree of protection against rising interest rates, although
the interest rates of floating rate securities will participate in any declines in interest rates as well.

If a portion of a fund's income consists of dividends paid by U.S. corporations, a portion of the dividends paid by the fund may be eligible for the corporate dividends-received deduction for corporate shareholders. In addition, distributions reported by a fund as derived from qualified dividend income ("QDI") will be taxed in the hands of individuals at the reduced rates applicable to net capital gains, provided certain holding period and other requirements are met by both the shareholder and the fund. Dividend income that a fund receives from REITs, if any, will generally not be treated as QDI and will not qualify for the corporate dividends-received deduction. It is unclear the extent to which distributions a fund receives from investments in certain preferred securities will be eligible for treatment as QDI or for the corporate dividends-received deduction. A fund cannot predict at this time what portion, if any, of its dividends will qualify for the corporate dividends-received deduction or be eligible for the reduced rates of taxation applicable to QDI.

**Real Estate Investment Trusts ("REITs")**

REITs are pooled investment vehicles that invest in income producing real estate, real estate related loans, or other types of real estate interests. U.S. REITs are allowed to eliminate corporate level federal tax so long as they meet certain requirements of the Internal Revenue Code. Foreign REITs ("REIT-like") entities may have similar tax treatment in their respective countries. Equity real estate investment trusts own real estate properties, while mortgage real estate investment trusts make and/or invests in construction, development, and long-term mortgage loans. Their value may be affected by changes in the underlying property of the trusts, the creditworthiness of the issuer, property taxes, interest rates, and tax and regulatory requirements, such as those relating to the environment. Both types of trusts are not diversified, are dependent upon management skill, are subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to qualify for tax-free status of income under the Internal Revenue Code and failing to maintain exemption from the 1940 Act.

**Repurchase and Reverse Repurchase Agreements, Mortgage Dollar Rolls, and Sale-Buybacks**

Each Fund may invest in repurchase and reverse repurchase agreements. Repurchase agreements typically involve the purchase of debt securities from a financial institution such as a bank, savings and loan association, or broker-dealer. A repurchase agreement provides that the fund sells back to the seller and that the seller repurchases the underlying securities at a specified price on a specific date. Repurchase agreements may be viewed as loans by a fund collateralized by the underlying securities. This arrangement results in a fixed rate of return that is not subject to market fluctuation while the fund holds the security. In the event of a default or bankruptcy by a selling financial institution, the affected fund bears a risk of loss. To minimize such risks, the fund enters into repurchase agreements only with parties those managing the fund's investments deem creditworthy (those that are large, well-capitalized, and well-established financial institutions). In addition, the value of the securities collateralizing the repurchase agreement is, and during the entire term of the repurchase agreement remains, at least equal to the acquisition price the Funds pay to the seller of the securities.

In a repurchase agreement, a Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed upon price on an agreed upon date within a number of days (usually not more than seven) from the date of purchase. The resale price consists of the purchase price plus an amount that is unrelated to the coupon rate or maturity of the purchased security. A repurchase agreement involves the obligation of the seller to pay the agreed upon price, which obligation is in effect secured by the value (at least equal to the amount of the agreed upon resale price and marked-to-market daily) of the underlying security or "collateral." A risk associated with repurchase agreements is the failure of the seller to repurchase the securities as agreed, which may cause a Fund to suffer a loss if the market value of such securities declines before they can be liquidated on the open market. In the event of bankruptcy or insolvency of the seller, a Fund may encounter delays and incur costs in liquidating the underlying security. Repurchase agreements that mature in more than seven days are subject to each Fund's limit on illiquid investments. While it is not possible to eliminate all risks from these transactions, it is the policy of the Fund to limit repurchase agreements to those parties whose creditworthiness has been reviewed and found satisfactory by those managing the fund's investments.

Each Fund may use reverse repurchase agreements, mortgage dollar rolls, and economically similar transactions to obtain cash to satisfy unusually heavy redemption requests or for other temporary or emergency purposes without the necessity of selling portfolio securities, or to earn additional income on portfolio securities, such as Treasury bills or notes. In a reverse repurchase agreement, a Fund sells a portfolio security to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. A Fund will enter into reverse repurchase agreements only with parties that those managing the fund's investments deem creditworthy. Using reverse repurchase agreements to earn additional income involves the risk that the interest earned on the invested proceeds is less than the expense of the reverse repurchase agreement transaction. This technique may also have a leveraging effect on the Fund.

A "mortgage dollar roll" is similar to a reverse repurchase agreement in certain respects. In a "dollar roll" transaction a Fund sells a mortgage-related security, such as a security issued by the Government National Mortgage Association, to a dealer and simultaneously agrees to repurchase a similar security (but not the same security) in the future at a pre-determined price. A dollar roll can be viewed, like a reverse repurchase agreement, as a collateralized borrowing in which a Fund pledges a mortgage-related security to a dealer to obtain cash. Unlike in the case of reverse repurchase agreements, the dealer with which a Fund enters into a dollar roll transaction is not obligated to return the same securities as those originally sold by the Fund, but only securities which are "substantially identical." To be considered "substantially identical," the securities returned to a Fund generally must: 1) be collateralized by the same types of underlying mortgages; 2) be issued by the same agency and be part of the same program; 3) have a similar original stated maturity; 4) have identical net coupon rates; 5) have similar market yields (and therefore price); and 6) satisfy "good delivery" requirements, meaning that the aggregate principal amounts of the securities delivered and received back must be within 0.01% of the initial amount delivered.

Each Fund also may effect simultaneous purchase and sale transactions that are known as "sale-buybacks." A sale-buyback is similar to a reverse repurchase agreement, except that in a sale-buyback, the counterparty who purchases the security is entitled to receive any principal or interest payments made on the underlying security pending settlement of the Fund's repurchase of the underlying security.

**Restricted and Illiquid Securities**

A Fund may experience difficulty in valuing and selling illiquid securities and, in some cases, may be unable to value or sell certain illiquid securities for an indefinite period of time. Illiquid securities may include a wide variety of investments, such as (1) repurchase agreements maturing in more than seven days (unless the agreements have demand/redemption features), (2) OTC options contracts and certain other derivatives (including certain swap agreements), (3) fixed time deposits that are not subject to prepayment or do not provide for withdrawal penalties upon prepayment (other than overnight deposits), (4) loan interests and other direct debt instruments, (5) certain municipal lease obligations, (6) commercial paper issued pursuant to Section 4(a)(2) of the 1933 Act, (7) thinly-traded securities, and (8) securities whose resale is restricted under the federal securities laws or contractual provisions (including restricted, privately placed securities that, under the federal securities laws, generally may be resold only to qualified institutional buyers). Generally, restricted securities may be sold only in a public offering for which a registration statement has been filed and declared effective or in a transaction that is exempt from the registration requirements of the Securities Act of 1933. When registration is required, a Fund that owns restricted securities may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a restricted security. If adverse market conditions were to develop during such a period, the Fund might obtain a less favorable price than existed when it decided to sell.

Illiquid and restricted securities are priced at fair value as determined in good faith by or under the direction of the Trustees. Each Fund has adopted investment restrictions that limit its investments in illiquid securities to no more than 15% of its net assets.

**Securitized Products** 

<u>Mortgage- and Asset-Backed Securities</u>

The yield characteristics of the mortgage- and asset-backed securities in which a Fund may invest differ from those of traditional debt securities. Among the major differences are that the interest and principal payments are made more frequently on mortgage- and asset-backed securities (usually monthly) and that principal may be prepaid at any time because the underlying mortgage loans or other assets generally may be prepaid at any time. As a result, if a Fund purchases those securities at a premium, a prepayment rate that is faster than expected will reduce their yield, while a prepayment rate that is slower than expected will have the opposite effect of increasing yield. If the Fund purchases these securities at a discount, faster than expected prepayments will increase their yield, while slower than expected prepayments will reduce their yield. Amounts available for reinvestment by a Fund are likely to be greater during a period of declining interest rates and, as a result, are likely to be reinvested at lower interest rates than during a period of rising interest rates.

In general, the prepayment rate for mortgage-backed securities decreases as interest rates rise and increases as interest rates fall. However, rising interest rates will tend to decrease the value of these securities. In addition, an increase in interest rates may affect the volatility of these securities by effectively changing a security that was considered a short-term security at the time of purchase into a long-term security. Long-term securities generally fluctuate more widely in response to changes in interest rates than short- or medium-term securities.

The market for privately issued mortgage- and asset-backed securities is smaller and less liquid than the market for U.S. government mortgage-backed securities. A collateralized mortgage obligation ("CMO") may be structured in a manner that provides a wide variety of investment characteristics (yield, effective maturity, and interest rate sensitivity). As market conditions change, and especially during periods of rapid market interest rate changes, the ability of a CMO to provide the anticipated investment characteristics may be greatly diminished. Increased market volatility and/or reduced liquidity may result.

<u>Collateralized Debt Obligations</u>

Each Fund may invest in each of collateralized bond obligations ("CBOs"), collateralized loan obligations ("CLOs"), other collateralized debt obligations ("CDOs"), and other similarly structured securities. CBOs, CLOs, and other CDOs are types of asset-backed securities. A CBO is a trust that is often backed by a diversified pool of high risk, below-investment-grade fixed-income securities. The collateral can be from many different types of fixed-income securities, such as high yield debt, residential privately issued mortgage-related securities, commercial privately issued mortgage-related securities, trust preferred securities, and emerging market debt. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. Other CDOs are trusts backed by other types of assets representing obligations of various parties. CBOs, CLOs, and other CDOs may charge management fees and administrative expenses.

For CBOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield. The riskiest portion is the "equity" tranche, which bears the bulk of defaults from the bonds or loans in the trust and serves to protect the other, more senior tranches from default (though such protection is not complete). Since it is partially protected from defaults, a senior tranche from a CBO typically has higher ratings and lower yields than its underlying securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO tranches can experience substantial losses due to actual defaults, downgrades of the underlying collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults as well as investor aversion to CBO securities as a class. Interest on certain tranches of a CDO may be paid in kind or deferred and capitalized (paid in the form of obligations of the same type rather than cash), which involves continued exposure to default risk with respect to such payments.

The risks of an investment in a CDO depend largely on the type of collateral securities and the tranche of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus are not registered under the securities laws. The Fund's investment in CDOs will not receive the same investor protection as an investment in registered securities. However, an active dealer market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the normal risks associated with fixed-income securities and asset-backed securities (such as interest rate risk, credit risk and default risk), CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the possibility that the collateral may default, decline in value or be downgraded, if rated by a nationally recognized statistical rating organization ("NRSRO"); (iii) a Fund may invest in tranches of CDOs that are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal documents could lead to disputes among investors regarding the characterization of proceeds; (v) the investment return achieved by a Fund could be significantly different than those predicted by financial models; (vi) the lack of a readily available secondary market for CDOs; (vii) the risk of forced "fire sale" liquidation due to technical defaults such as coverage test failures and (viii) the CDO's manager may perform poorly.

**Short Sales**

A short sale involves the sale by a fund of a security that it does not own with the expectation of covering settlement by purchasing the same security at a later date at a lower price. A fund may also enter into a short position by using a derivative instrument, such as a future, forward, or swap agreement. If the price of the security or derivative increases prior to the time the fund is required to replace the borrowed security, then the fund will incur a loss equal to the increase in price from the time that the short sale was entered into plus any premiums and interest paid to the broker. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the value of the investment.

A "short sale against the box" is a technique that involves selling either a security owned by a fund, or a security equivalent in kind and amount to the security sold short that the fund has the right to obtain, at no additional cost, for delivery at a specified date in the future. Each fund may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short against the box increases prior to the scheduled delivery date, a fund will lose money.

**Special Purpose Acquisition Companies ("SPACs")**

Each Fund may invest in securities of special purpose acquisition companies ("SPACs") or similar special purpose entities that pool funds to seek potential acquisition opportunities. Unless and until an acquisition is completed, a SPAC or similar

entity generally maintains assets (less a portion retained to cover expenses) in a trust account comprised of U.S. government securities, money market securities, and cash, and similar investments whose returns or yields may be significantly lower than those of the Fund's other investments. Because SPACs and similar entities are in essence blank-check companies without an operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable acquisition, which may not occur. For example, even if an acquisition or merger target is identified, the Fund may elect not to participate in, or vote to approve, the proposed transaction. Moreover, an acquisition or merger once effected may prove unsuccessful and an investment in the SPAC may lose value.

SPACs are also subject to the following additional risks:

• The risk that, in the case of
SPACs used as an opportunity for startups to go public without going through the traditional IPO process, such startups may become publicly
traded with potentially less due diligence than what is typical in a traditional IPO through an underwriter and may not be experienced
in facing the challenges, expenses and risks of being a public company, including the increased regulatory and financial scrutiny and
the need to comply with applicable governance and accounting requirements.

• SPAC sponsors may have a potential
conflict of interest to complete a deal that may be unfavorable for other investors in the SPAC. For example, SPAC sponsors often own
warrants to acquire additional shares of the company at a fixed price, and the exercise by the SPAC sponsor of its warrants may dilute
the value of the equity interests of other investors in the SPAC.

• A SPAC may allow shareholders
to redeem their pro rata investment immediately after the SPAC announces a proposed acquisition, sometimes including interest, which may
prevent the entity's management from completing the transaction.

• Some SPACs may pursue acquisitions
only within certain industries or regions, which may increase the volatility of their prices.

• Only a thinly traded market for
shares of or interests in a SPAC may develop, or there may be no market at all, leaving the Fund unable to sell its interest in a SPAC
or to sell its interest only at a lower price. Investments in SPACs may include private placements, including PIPEs, and, accordingly,
may be considered illiquid and/or be subject to restrictions on resale.

• Values of investments in SPACs
may be highly volatile and may depreciate significantly over time.

• Changes in regulatory oversight
and/or requirements related to SPACs could adversely affect the value of a Fund's interest in a SPAC.

**Supranational Entities**

Each Fund may invest in obligations of supranational entities. A supranational entity is an entity designated or supported by national governments to promote economic reconstruction, development or trade amongst nations. Examples of supranational entities include the International Bank for Reconstruction and Development (also known as the World Bank) and the European Investment Bank. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. Obligations of a supranational entity that are denominated in foreign currencies will also be subject to the risks associated with investments in foreign currencies.

**Temporary Defensive Measures/Money Market Instruments**

Each Fund may make money market investments (cash equivalents), without limit, pending other investment or settlement, for liquidity, or in adverse market conditions. Following are descriptions of the types of money market instruments that each Fund may purchase:

• U.S. Government Securities -
Securities issued or guaranteed by the U.S. government, including treasury bills, notes, and bonds.

• U.S. Government Agency Securities
- Obligations issued or guaranteed by agencies or instrumentalities of the U.S. government.

&nbsp;&nbsp;&nbsp;&nbsp;• U.S. agency obligations include,
but are not limited to, the Bank for Cooperatives, Federal Home Loan Banks, and Federal Intermediate Credit Banks.

&nbsp;&nbsp;&nbsp;&nbsp;• U.S. instrumentality obligations
include, but are not limited to, the Export-Import Bank, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association.

Some obligations issued or guaranteed by U.S. government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury. Others, such as those issued by the Federal National Mortgage Association, are supported by discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality. Still others, such as those issued by the Student Loan Marketing Association, are supported only by the credit of the agency or instrumentality.

&nbsp;&nbsp;&nbsp;&nbsp;• Bank Obligations - Certificates
of deposit, time deposits and bankers' acceptances of U.S. commercial banks having total assets of at least one billion dollars
and overseas branches of U.S. commercial banks and foreign banks, which in the opinion of those managing the fund's investments,
are of comparable quality. A Fund may acquire obligations of U.S. banks that are not members of the Federal Reserve System or of the Federal
Deposit Insurance Corporation.

Certificates of deposit are negotiable certificates issued against funds deposited in a commercial bank for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning, in effect, that the bank unconditionally agrees to pay the face value of the instrument on maturity. Fixed time deposits are bank obligations payable at a stated maturity date and bearing interest at a fixed rate. Fixed time deposits may be withdrawn on demand by the investor, but may be subject to early withdrawal penalties which vary depending upon market conditions and the remaining maturity of the obligation. There are no contractual restrictions on the right to transfer a beneficial interest in a fixed time deposit to a third party, although there is no market for such deposits.

Obligations of foreign banks and obligations of overseas branches of U.S. banks are subject to somewhat different regulations and risks than those of U.S. domestic banks. For example, an issuing bank may be able to maintain that the liability for an investment is solely that of the overseas branch which could expose a Fund to a greater risk of loss. In addition, obligations of foreign banks or of overseas branches of U.S. banks may be affected by governmental action in the country of domicile of the branch or parent bank. Examples of adverse foreign governmental actions include the imposition of currency controls, the imposition of withholding taxes on interest income payable on such obligations, interest limitations, seizure or nationalization of assets, or the declaration of a moratorium. Deposits in foreign banks or foreign branches of U.S. banks are not covered by the Federal Deposit Insurance Corporation and that the selection of those obligations may be more difficult because there may be less publicly available information concerning foreign banks or the accounting, auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ from those applicable to United States banks. Foreign banks are not generally subject to examination by any United States Government agency or instrumentality. A Fund only buys short-term instruments where the risks of adverse governmental action are believed by those managing the fund's investments to be minimal. A Fund considers these factors, along with other appropriate factors, in making an investment decision to acquire such obligations. It only acquires those which, in the opinion of management, are of an investment quality comparable to other debt securities bought by the Fund.

A certificate of deposit is issued against funds deposited in a bank or savings and loan association for a definite period of time, at a specified rate of return. Normally they are negotiable. However, a Fund occasionally may invest in certificates of deposit which are not negotiable. Such certificates may provide for interest penalties in the event of withdrawal prior to their maturity. A bankers' acceptance is a short-term credit instrument issued by corporations to finance the import, export, transfer, or storage of goods. They are termed "accepted" when a bank guarantees their payment at maturity and reflect the obligation of both the bank and drawer to pay the face amount of the instrument at maturity.

• Commercial Paper - Short-term
promissory notes issued by U.S. or foreign corporations.

• Short-term Corporate Debt - Corporate
notes, bonds, and debentures that at the time of purchase have 397 days or less remaining to maturity, with certain exceptions permitted
by applicable regulations.

• Repurchase Agreements - Instruments
under which securities are purchased from a bank or securities dealer with an agreement by the seller to repurchase the securities at
the same price plus interest at a specified rate.

• Taxable Municipal Obligations
- Short-term obligations issued or guaranteed by state and municipal issuers which generate taxable income.

**U.S. Government and U.S. Government-Sponsored Securities**

U.S. government securities refers to a variety of debt securities issued by or guaranteed by the U.S. Treasury, such as Treasury bills, notes, and bonds and mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Mae), and are supported by the full faith and credit of the United States meaning that the U.S. government is required to repay the principal in the event of default. Others are supported by the right of the issuer to borrow from the U.S. Treasury; others are supported by the discretionary authority of the U.S. government to purchase the agency's obligations; and still others are supported only by the credit of the issuing agency, instrumentality, or enterprise. The U.S. government does not guarantee the market price of any U.S. government security.

Although U.S. government-sponsored enterprises such as the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury nor supported by the full faith and credit of the U.S. government.

U.S. government securities and U.S. government-sponsored securities may be adversely impacted by changes in interest rates or a default by or decline in the credit rating of the applicable government-sponsored entity. There is no assurance that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight, and/or other consequences that could adversely affect the credit quality, availability, or investment character of securities issued by these entities. The value and liquidity of U.S. government securities may be affected adversely by changes in the ratings of those securities.

**LEADERSHIP STRUCTURE AND BOARD**

PETF's Board has overall responsibility for overseeing PETF's operations in accordance with the 1940 Act, other applicable laws, and PETF's charter. Each Board Member serves on the Boards of the following investment companies: Principal Funds, Inc. ("PFI"), Principal Variable Contracts Funds, Inc. ("PVC"), and Principal Exchange-Traded Funds ("PETF"), which are collectively referred to in this SAI as the "Principal Funds." The Principal Funds are part of a "Fund Complex," which is comprised of the Principal Funds (PFI, PVC, and PETF), Principal Real Asset Fund, and Principal Private Credit Fund. Board Members who are affiliated persons of any investment advisor, the principal distributor, or the principal underwriter of the Principal Funds are considered "interested persons" of the Funds (as defined in the 1940 Act) and are referred to in this SAI as "Interested Board Members." Board Members who are not Interested Board Members are referred to as "Independent Board Members."

Each Board Member generally serves until the next annual meeting of shareholders or until such Board Member's earlier death, resignation, or removal. Independent Board Members have a 72-year age limit and, for Independent Board Members elected on or after September 14, 2021, a 72-year age limit or a 15-year term limit, whichever occurs first. The Board may waive the age or term limits in the Board's discretion. The Board elects officers to supervise the day-to-day operations of the Principal Funds. Officers serve at the pleasure of the Board, and each officer has the same position with each investment company in the Principal Funds.

The Board meets in regularly scheduled meetings throughout the year. Board meetings may occur in-person, by telephone, or virtually. In addition, the Board holds special meetings or informal conference calls to discuss specific matters that may arise or require action between regular meetings. Independent Board Members also meet annually to consider renewal of advisory contracts.

The Chairman of the Board is an interested person of the Principal Funds. The Independent Board Members have appointed a Lead Independent Board Member whose role is to review and approve, with the Chairman, each Board meeting's agenda and to facilitate communication between and among the Independent Board Members, management, and the full Board. The Board's leadership structure is appropriate for the Principal Funds given its characteristics and circumstances, including the number of portfolios, variety of asset classes, net assets, and distribution arrangements. The appropriateness of this structure is enhanced by the establishment and allocation of responsibilities among the following Committees, which report their activities to the Board on a regular basis.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Committee Members** | &nbsp;&nbsp;**Primary Purpose and Responsibilities** | &nbsp;&nbsp;**Meetings Held During the Last Fiscal Year** |
| &nbsp;&nbsp;<u>15(c) Committee</u><br> Padelford L. Lattimer, Chair<br> Daniel J. Beckman<br> Katharin S. Dyer<br> Karen McMillan | &nbsp;&nbsp;The Committee's primary purpose is to assist the Board in performing the annual review of the Funds' advisory and sub-advisory agreements pursuant to Section 15(c) of the 1940 Act. The Committee is responsible for requesting and reviewing related materials. | &nbsp;&nbsp;3 |
| &nbsp;&nbsp;<u>Audit Committee</u><br> Frances P. Grieb, Chair<br> Craig Damos<br> Victor L. Hymes<br> Sharmila C. Kassam | &nbsp;&nbsp;The Committee's primary purpose is to assist the Board by serving as an independent and objective party to monitor the Principal Funds' accounting policies, financial reporting, and internal control system, as well as the work of the independent registered public accountants. The Audit Committee assists Board oversight of 1) the integrity of the Principal Funds' financial statements; 2) the Principal Funds' compliance with certain legal and regulatory requirements; 3) the independent registered public accountants' qualifications and independence; and 4) the performance of the Principal Funds' independent registered public accountants. The Audit Committee also facilitates communication among the independent registered public accountants, PGI's internal auditors, Principal Funds management, and the Board. | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;<u>Executive Committee</u><br> Kamal Bhatia, Chair<br> Craig Damos<br> Kenneth A. McCullum | &nbsp;&nbsp;The Committee's primary purpose is to exercise certain powers of the Board when the Board is not in session. When the Board is not in session, the Committee may exercise all powers of the Board in the management of the Principal Funds' business except the power to 1) issue stock, except as permitted by law; 2) recommend to the shareholders any action that requires shareholder approval; 3) amend the bylaws; or 4) approve any merger or share exchange that does not require shareholder approval. |  |
| &nbsp;&nbsp;<u>Nominating and</u> <br> <u>Governance Committee</u><br> Victor L. Hymes, Chair<br> Craig Damos<br> Frances C. Grieb<br> Thomas A. Swank<br>| &nbsp;&nbsp;The Committee's primary purpose is to oversee the structure and efficiency of the Board and the committees. The Committee is responsible for evaluating Board membership and functions, committee membership and functions, insurance coverage, and legal matters. The Committee's nominating functions include selecting and nominating Independent Board Member candidates for election to the Board. Generally, the Committee requests nominee suggestions from Board Members and management. In addition, the Committee considers candidates recommended by shareholders of the Principal Funds. Recommendations should be submitted in writing to the Principal Funds Secretary, in care of the Principal Funds, 711 High Street, Des Moines, IA 50392. Such recommendations must include all information specified in the Committee's charter and must conform with the procedures set forth in Appendix A thereto, which can be found at https://secure02.principal.com/publicvsupply/GetFile?fm=MM13013&ty=VOP&EXT=.VOP. Examples of such information include the nominee's biographical information; relevant educational and professional background of the nominee; the number of shares of each Fund owned of record and beneficially by the nominee and by the recommending shareholder; any other information regarding the nominee that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies for the election of board members; whether the nominee is an "interested person" of the Funds as defined in the 1940 Act; and the written consent of the nominee to be named as a nominee and serve as a board member if elected.<br> When evaluating a potential nominee for Independent Board Member, the Committee may consider, among other factors: educational background; relevant business and industry experience; whether the person is an "interested person" of the Funds as defined in the 1940 Act; and whether the person is willing to serve, and willing and able to commit the time necessary to attend meetings and perform the duties of an Independent Board Member. In addition, the Committee may consider whether a candidate's background, experience, skills and views would complement the background, experience, skills and views of other Board Members and would contribute to the diversity of the Board. The final decision is based on a combination of factors, including the strengths and the experience an individual may bring to the Board. The Board does not regularly use the services of professional search firms to identify or evaluate potential candidates or nominees.<br>| &nbsp;&nbsp;6 |
| &nbsp;&nbsp;<u>Operations Committee</u><br> Thomas A. Swank, Chair<br> Daniel J. Beckman<br> Katharin S. Dyer<br> Padelford L. Lattimer | &nbsp;&nbsp;The Committee's primary purpose is to review and oversee the provision of administrative and distribution services to the Principal Funds, communications with the Principal Funds' shareholders, and the Principal Funds' operations. | &nbsp;&nbsp;4 |

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Risk oversight forms part of the Board's general oversight of the Principal Funds. The Board has appointed a Chief Compliance Officer who oversees the implementation and testing of the Funds' compliance program and reports to the Board regarding compliance matters for the Principal Funds and principal service providers. As part of its regular oversight functions, the Board, directly or through a committee, interacts with and reviews reports from, among others, management, the Chief Compliance Officer, the independent registered public accounting firm, and internal auditors for PGI or its affiliates, as appropriate. The Board, with the assistance of management and PGI, reviews investment policies and risks in connection with its review of Principal Funds performance. In addition, as part of the Board's periodic review of advisory and other service provider agreements, the Board may consider risk management aspects of their operations and the functions for which they are responsible. With respect to valuation, the Board has designated PGI as the Funds' valuation designee, as permitted by SEC Rule 2a-5, where PGI is responsible for the day-to-day valuation and oversight responsibilities of the Funds, subject to the Board's oversight. PGI has established a Valuation Committee to fulfill its oversight responsibilities as the Funds' valuation designee.

Each Board Member has significant prior senior management and/or board experience. Board Members are selected and retained based upon their skills, experience, judgment, analytical ability, diligence, and ability to work effectively with other Board Members, a commitment to the interests of shareholders, and, for each Independent Board Member, a demonstrated willingness to take an independent and questioning view of management. In addition to these general qualifications, the Board seeks members who build upon the Board's diversity. Below is a brief discussion of the specific education, experience, qualifications, or skills that led to the conclusion that each person identified below should serve as a Board Member. As required by rules adopted under the 1940 Act, the Independent Board Members select and nominate all candidates for Independent Board Member positions.

<u>Independent Board Members</u>

**Daniel J. Beckman.** Mr. Beckman has served as an Independent Board Member of the Principal Funds since 2026. He served as President of Ameriprise Trust Company from 2024 to 2025. Mr. Beckman served as the President and Principal Executive Officer of the Columbia Funds and Columbia Acorn/Wanger Funds from 2021 to 2025. From 2015 to 2025, he served as Vice President of Columbia Management Investment Advisers, LLC. Mr. Beckman also served as a director of Columbia Management Investment Distributors, Inc. from 2018 to 2025. Through his education, employment experience, and experience as a board member, Mr. Beckman is experienced with financial, regulatory, and investment matters

**Craig Damos.** Mr. Damos has served as an Independent Board Member of the Principal Funds since 2008. Since 2011, Mr. Damos has served as the President of C.P. Damos Consulting, LLC (doing business as Craig Damos Consulting). He has also served as a Director of the employees' stock ownership plan of the Baker Group since 2020. Mr. Damos served as President and Chief Executive Officer of Weitz Company from 2006 to 2010; Vertical Growth Officer of Weitz Company from 2004 to 2006; and Chief Financial Officer of Weitz Company from 2000 to 2004. From 2005 to 2008, Mr. Damos served as a Director of West Bank. Through his education, employment experience, and experience as a board member, Mr. Damos is experienced with financial, accounting, regulatory, and investment matters.

**Katharin S. Dyer.** Ms. Dyer has served as an Independent Board Member of the Principal Funds since 2023. She is the Founder and Chief Executive Officer of PivotWise, a firm providing strategic advice focused on digital transformation. Ms. Dyer currently serves as a Director of Liquidity Services and the Grameen Foundation. She was formerly employed by IBM Global Services as a Global Partner and a member of the senior leadership team from 2016 to 2018. Ms. Dyer was a member of the Global Management Team at American Express Company from 2013 to 2015. Through her education, employment experience, and experience as a board member, Ms. Dyer is experienced with financial, information and digital technology, investment, and regulatory matters.

**Frances P. Grieb.** Ms. Grieb has served as an Independent Board Member of the Principal Funds since 2023. Ms. Grieb currently serves as a Director of the National Advisory Board of the College of Business at the University of Nebraska at Omaha. She is a member of the American Institute of Certified Public Accountants and the National Association of Corporate Directors. From 2014 to 2022, she served as a Director of Great Western Bancorp, Inc. Ms. Grieb is a retired partner having served in various leadership roles at Deloitte LLP from 1982 to 2010. Ms. Grieb is a retired Certified Public Accountant. Through her education, employment experience, and experience as a board member, Ms. Grieb is experienced with financial, accounting, investment, and regulatory matters.

**Victor L. Hymes.** Mr. Hymes has served as an Independent Board Member of the Principal Funds since 2020. He currently serves as Founder, Chief Executive Officer, and Chief Investment Officer of Legato Capital Management, LLC. Over the past thirty years, Mr. Hymes has served in the roles of Chief Executive Officer, Chief Operating Officer, Chief Investment Officer, portfolio manager, and other senior management positions with investment management firms, including Zurich Scudder Investments, Inc., Goldman, Sachs & Co., and Kidder, Peabody & Co. Mr. Hymes has served on numerous boards and has chaired four investment committees over the past two decades. Through his education, employment experience, and experience as a board member, Mr. Hymes is experienced with financial, accounting, regulatory, and investment matters.

**Sharmila C. Kassam.** Ms. Kassam has served as an Independent Board Member of the Principal Funds since 2025. She is the Founder of Aligned Capital Investing, LLC. Ms. Kassam served as Vice President and Head of Asset Owner Solutions at Nasdaq, Inc. from 2021 to 2023. From 2014 to 2019, Ms. Kassam served as Deputy Chief Investment Officer. Texas Employees Retirement Fund. Ms. Kassam is a licensed attorney and Certified Public Accountant. She is also faculty for the Institutional Limited Partner Association Institute. Through her education, employment experience, and experience as a board member, Ms. Kassam is experienced in financial, regulatory, accounting, and investment matters.

**Padelford L. Lattimer.** Mr. Lattimer has served as an Independent Board Member of the Principal Funds since 2020. He currently serves as Managing Partner for TBA Management Consulting LLC. For more than twenty years, Mr. Lattimer served in various capacities at financial services companies, including as a senior managing director for TIAA Cref Asset Management (2004-2010), First Vice President at Mellon Financial Corporation (2002-2004), and in product management roles at Citibank (2000-2002). Through his education, employment experience, and experience as a board member, Mr. Lattimer is experienced with financial, regulatory, and investment matters.

**Karen McMillan.** Ms. McMillan has served as an Independent Board Member of the Principal Funds since 2014. She served as a Managing Director of Patomak Global Partners, LLC from 2014 to 2021. From 2007 to 2014, Ms. McMillan served as General Counsel to the Investment Company Institute. Prior to that (from 1999-2007), she worked as an attorney in private practice, specializing in the mutual fund industry. From 1991 to 1999, she served in various roles as counsel at the SEC, Division of Investment Management, including as Assistant Chief Counsel. Through her professional education, experience as an attorney, and experience as a board member, Ms. McMillan is experienced in financial, investment, and regulatory matters.

**Thomas A. Swank.** Mr. Swank has served as an Independent Board Member of the Principal Funds since 2024. From 2015 to 2023, Mr. Swank served as the Chief Executive Officer and President of Wellabe, formerly American Enterprise Group, Inc. Mr. Swank has also served as a Director on the Director Forum 500 - American Council of Life Insurers since 2015. Through his education, employment experience, and experience as a board member, Mr. Swank is experienced with financial, accounting, regulatory, and investment matters.

<u>Interested Board Members</u>

**Kamal Bhatia.** Mr. Bhatia has served as Chair of the Principal Funds since 2023. He has also served as President and Chief Executive Officer of the Principal Funds since 2019. Since February 2024, Mr. Bhatia has served as the President and Chief Executive Officer for Principal Asset Management<sup>SM</sup>. He served as Senior Executive Managing Director - Global Head of Investments for Principal Asset Management<sup>SM</sup> in 2023 and a Senior Executive Director and Chief Operating Officer of Principal Asset Management<sup>SM</sup> from 2019 to 2023. Mr. Bhatia joined Principal<sup>®</sup> in 2019 and serves as a director of numerous Principal<sup>®</sup> affiliates. From 2011 to 2019, he was a Senior Vice President for Oppenheimer Funds. Mr. Bhatia is a CFA<sup>®</sup> charter holder. Through his education and experience, Mr. Bhatia is experienced with financial, marketing, regulatory, and investment matters.

**Kenneth A. McCullum.** Mr. McCullum has served as a Board Member of the Principal Funds since 2023. Mr. McCullum has served as Executive Vice President and Chief Risk Officer for Principal<sup>®</sup> since 2023. Prior to that, he served as Senior Vice President and Chief Risk Officer for Principal<sup>®</sup> from 2020 to 2023 and Vice President and Chief Actuary for Principal<sup>®</sup> from 2015 to 2020. From 2013 to 2015, Mr. McCullum was an Executive Vice President responsible for business development at Delaware Life Insurance Company. He served as a Senior Vice President for the life annuity business at Sun Life from 2010 to 2013. Mr. McCullum is a Fellow of the Society of Actuaries and is a Member of the American Academy of Actuaries. Through his education and experience, Mr. McCullum is experienced with financial, accounting, regulatory, and investment matters.

**Additional Information Regarding Board Members and Officers**

The following tables present additional information regarding the Board Members and Principal Funds officers, including their principal occupations, which, unless specific dates are shown, are of more than five years duration. For each Board Member, the tables also include information concerning other directorships held in reporting companies under the Securities Exchange Act of 1934 or registered investment companies under the 1940 Act.

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| | | | | |
|:---|:---|:---|:---|:---|
| **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** |
| **Name, Address,<br> and Year of Birth** | **Board Positions Held<br> with Principal Funds** | **Principal Occupation(s)<br> During Past 5 Years** | **Number of<br> Portfolios<br> Overseen<br> in Fund<br> Complex** | **Other<br> Directorships<br> Held During<br> Past 5 Years** |
| Daniel J. Beckman<br> 711 High Street<br> Des Moines, IA 50392<br> 1962 | Director, PFI and PVC (since 2026)<br> Trustee, PETF (since 2026) | President, Ameriprise Trust Company (2024-2025);<br> President and Principal Executive Officer of the Columbia Funds (2021-2025); Vice President, Columbia Management Investment Advisers, LLC (2015-2025);<br> Vice President - Head of North America Product, Columbia Management Investment Advisers, LLC (2015-2023);<br> President and Principal Executive Officer, Columbia Acorn/Wanger Funds (2021-2025). | 126 | Columbia Funds (170 Portfolios) (2021-2025);<br> Ameriprise Trust Company (2016-2025);<br> Columbia Management Investment Distributors, Inc. (2018-2025). |
| Craig Damos<br> 711 High Street<br> Des Moines, IA 50392<br> 1954 | &nbsp;&nbsp;Lead Independent Board Member<br> (since 2020)<br> Director, PFI and PVC (since 2008)<br> Trustee, PETF (since 2014) | &nbsp;&nbsp;President, C.P. Damos Consulting,<br> LLC (consulting services) | 126 | &nbsp;&nbsp;Principal Real Asset Fund<br> (2019-2024) |
| Katharin S. Dyer<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Director, PFI and PVC (since 2023)<br> Trustee, PETF (since 2023) | &nbsp;&nbsp;Founder and Chief Executive Officer,<br> PivotWise (consulting services) | 126 | &nbsp;&nbsp;Liquidity Services, Inc.<br> (2020-present);<br> Principal Real Asset Fund<br> (2023-2024) |
| Frances P. Grieb<br> 711 High Street<br> Des Moines, IA 50392<br> 1960 | Director, PFI and PVC (since 2023)<br> Trustee, PETF (since 2023) | Retired | 126 | &nbsp;&nbsp;First Interstate BancSystem,<br> Inc. (2022-present);<br> Principal Real Asset Fund<br> (2023-2024);<br> Great Western Bancorp, Inc.<br> and Great Western Bank<br> (2014-2022) |
| Victor L. Hymes<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Director, PFI and PVC (since 2020)<br> Trustee, PETF (since 2020) | &nbsp;&nbsp;Founder, CEO, CIO, Legato Capital<br> Management, LLC (investment<br> management company) | 126 | &nbsp;&nbsp;Principal Real Asset Fund<br> (2020-2024) |
| Sharmila C. Kassam<br> 711 High Street<br> Des Moines, IA 50392<br> 1973 | Director, PFI and PVC (since 2025)<br> Trustee, PETF (since 2025) | &nbsp;&nbsp;Founder and Consultant, Aligned<br> Capital Investing, LLC<br> (consulting services);<br> Vice President and Head of Asset<br> Owner Solutions, Nasdaq, Inc.<br> (financial services) from 2021-2023<br>| 126 | &nbsp;&nbsp;Calamos Aksia Private<br> Market Funds (2023-2025);<br> Greenbacker Energy<br> (GREC II Fund) (2022-2025);<br> GRIID Infrastructure<br> (2024-2024);<br> Foundation Credit<br> Opportunities (2019-2023) |
| Padelford L. Lattimer<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Director, PFI and PVC (since 2020)<br> Trustee, PETF (since 2020) | &nbsp;&nbsp;Managing Partner, TBA Management<br> Consulting LLC (management<br> consulting and staffing company) | 126 | &nbsp;&nbsp;Principal Real Asset Fund<br> (2020-2024) |

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| | | | | |
|:---|:---|:---|:---|:---|
| **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** |
| **Name, Address,<br> and Year of Birth** | **Board Positions Held<br> with Principal Funds** | **Principal Occupation(s)<br> During Past 5 Years** | **Number of<br> Portfolios<br> Overseen<br> in Fund<br> Complex** | **Other<br> Directorships<br> Held During<br> Past 5 Years** |
| Karen McMillan<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Director, PFI and PVC (since 2014)<br> Trustee, PETF (since 2014) | &nbsp;&nbsp;Founder/Owner, Tyche Consulting<br> LLC (consulting services)<br> from 2021-2024;<br> Managing Director, Patomak Global<br> Partners, LLC (financial services<br> consulting) from 2014-2021 | 126 | &nbsp;&nbsp;Principal Real Asset Fund<br> (2019-2024) |
| Thomas A. Swank<br> 711 High Street<br> Des Moines, IA 50392<br> 1960 | Director, PFI and PVC (since 2024)<br> Trustee, PETF (since 2024) | &nbsp;&nbsp;Chief Executive Officer and President,<br> Wellabe (formerly, American<br> Enterprise Group, Inc.) (life and<br> health insurance) from 2015-2023 | 126 | &nbsp;&nbsp;Wellabe (formerly, American<br> Enterprise Group, Inc.)<br> (2015-present);<br> Principal Real Asset Fund<br> (2024) |

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| | | | | |
|:---|:---|:---|:---|:---|
| **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** |
| **Name, Address,<br> and Year of Birth** | **Positions Held<br> with Principal Funds** | **Principal Occupation(s)<br> During Past 5 Years** | **Number of<br> Portfolios<br> Overseen<br> in Fund<br> Complex** | **Other<br> Directorships<br> Held During<br> Past 5 Years** |
| Kamal Bhatia<br> 711 High Street<br> Des Moines, IA 50392<br> 1972<br>| &nbsp;&nbsp;Director and Chair, PFI and PVC<br> (since 2023)<br> Trustee and Chair, PETF<br> (since 2023)<br> Chief Executive Officer and<br> President (since 2019)<br>| &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> President and Chief Executive Officer –<br> Principal Asset Management<sup>SM</sup> <br> (since 2024)<br> Senior Executive Managing Director -<br> Global Head of Investments –<br> Principal Asset Management<sup>SM</sup> (2023)<br> Senior Executive Director and<br> Chief Operating Officer –<br> Principal Asset Management<sup>SM</sup> <br> (2019-2023)<br>| 126 | &nbsp;&nbsp;Principal Real Asset<br> Fund (2023-2024)<br>|
| Kenneth A. McCullum<br> 711 High Street<br> Des Moines, IA 50392<br> 1964<br>| Director, PFI and PVC (since 2023)<br> Trustee, PETF (since 2023)<br>| &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> Executive Vice President and<br> Chief Risk Officer (since 2023)<br> Senior Vice President and Chief Risk Officer<br> (2020-2023)<br> Vice President and Chief Actuary<br> (2015-2020)<br>| 126 | &nbsp;&nbsp;Principal Real Asset<br> Fund (2023-2024)<br>|

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| | | |
|:---|:---|:---|
| **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** |
| **Name, Address,<br> and Year of Birth** | **Position(s) Held<br> with Principal Funds** | **Principal Occupation(s)** <br> **During Past 5 Years** |
| George Djurasovic<br> 711 High Street<br> Des Moines, IA 50392<br> 1971<br>| &nbsp;&nbsp;Vice President and General Counsel<br> (since 2023)<br>| &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> Vice President and General Counsel – Principal Asset<br> Management<sup>SM</sup> (since 2022)<br><u>Artisan Partners Limited Partnership</u><br> Global Chief Compliance Officer (2013-2022)<br>|
| Calvin Eib<br> 711 High Street<br> Des Moines, IA 50392<br> 1963<br>| Assistant Tax Counsel (since 2023) | <u>Principal Financial Group</u>\*<br> Assistant General Counsel (since 2025)<br> Counsel (since 2021-2025)  |

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| | | |
|:---|:---|:---|
| **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** |
| **Name, Address,<br> and Year of Birth** | **Position(s) Held<br> with Principal Funds** | **Principal Occupation(s)** <br> **During Past 5 Years** |
| Megan Hoffmann<br> 711 High Street<br> Des Moines, IA 50392<br> 1979<br>| Vice President and Treasurer (since 2025)<br> Vice President and Controller (2021-2025)<br>| &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> Senior Director – Fund Accounting and Administration<br> (since 2025)<br> Senior Director – Fund Administration (2024)<br> Director – Accounting (2020-2024)<br>|
| Laura B. Latham<br> 711 High Street<br> Des Moines, IA 50392<br> 1986<br>| &nbsp;&nbsp;Counsel and Assistant Secretary (since 2023)<br> Assistant Counsel and Assistant Secretary<br> (2018-2023)<br>| <u>Principal Financial Group\*</u><br> Assistant General Counsel (since 2025)<br> Counsel (2018-2025)<br>|
| Ann Meiners<br> 711 High Street<br> Des Moines, IA 50392<br> 1977<br>| &nbsp;&nbsp;Vice President and Assistant Treasurer<br> (since 2025)<br> Vice President and Assistant Controller<br> &nbsp;&nbsp;&nbsp;&nbsp;(2025)<br>| <u>Principal Financial Group\*</u><br> Director – Fund Accounting (since 2024)<br> Assistant Director – Fund Accounting (2017-2024)<br>|
| David P. Michalik<br> 711 High Street<br> Des Moines, IA 50392<br> 1991<br>| Counsel and Assistant Secretary (since 2025) | <u>Principal Financial Group\*</u><br> Counsel (since 2025)<br><u>The Northern Trust Company</u><br> Second Vice President (2019-2025)<br>|
| Diane K. Nelson<br> 711 High Street<br> Des Moines, IA 50392<br> 1965 | AML Officer (since 2016) | <u>Principal Financial Group\*</u><br> Director – Compliance (since 2024)<br> Chief Compliance Officer/AML Officer (2015-2024)<br>|
| Tara Parks<br> 711 High Street<br> Des Moines, IA 50392<br> 1983 | &nbsp;&nbsp;Vice President and Assistant Treasurer<br> (since 2025)<br> Vice President and Assistant Controller<br> (2021-2025)<br>| <u>Principal Financial Group\*</u><br> Senior Director – Fund Tax (since 2024)<br> Director – Accounting (2019-2024)<br>|
| Deanna Y. Pellack<br> 711 High Street<br> Des Moines, IA 50392<br> 1987 | &nbsp;&nbsp;Counsel and Secretary (since 2024)<br> Counsel and Assistant Secretary (2023-2024)<br> Assistant Counsel and Assistant Secretary<br> (2022-2023)<br>| <u>Principal Financial Group\*</u><br> Assistant General Counsel (since 2026)<br> Counsel (2022-2026)<br><u>The Northern Trust Company</u><br> Vice President (2019-2022)<br>|
| Sara L. Reece<br> 711 High Street<br> Des Moines, IA 50392<br> 1975<br>| &nbsp;&nbsp;Vice President and Chief Operating Officer<br> (since 2021)<br> Vice President and Controller (2016-2021)<br>| <u>Principal Financial Group\*</u><br> Managing Director – Global Head of Fund Services (since 2024)<br> Managing Director – Global Fund Ops (2021-2024)<br>|
| Teri R. Root<br> 711 High Street<br> Des Moines, IA 50392<br> 1979 | Chief Compliance Officer (since 2018)<br>| <u>Principal Financial Group\*</u><br> Chief Compliance Officer – Funds (since 2018)<br> Vice President (since 2015)<br>|
| Michael Scholten<br> 711 High Street<br> Des Moines, IA 50392<br> 1979 | Chief Financial Officer (since 2021) | <u>Principal Financial Group\*</u><br> Assistant Vice President and Actuary (since 2021)<br>|
| Adam U. Shaikh<br> 711 High Street<br> Des Moines, IA 50392<br> 1972<br>| &nbsp;&nbsp;Vice President and Assistant General Counsel<br> (since 2023)<br> Assistant Secretary (since 2022)<br> Assistant Counsel (2006-2023)<br>| <u>Principal Financial Group\*</u><br> Associate General Counsel (since 2024)<br> Assistant General Counsel (2018-2024)<br>|
| John L. Sullivan<br> 711 High Street<br> Des Moines, IA 50392<br> 1970<br>| &nbsp;&nbsp;Counsel and Assistant Secretary (since 2023)<br> Assistant Counsel and Assistant Secretary<br> (2019-2023)<br>| <u>Principal Financial Group\*</u><br> Assistant General Counsel (since 2023)<br> Counsel (2019-2023)<br>|

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| | | |
|:---|:---|:---|
| **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** |
| **Name, Address,<br> and Year of Birth** | **Position(s) Held<br> with Principal Funds** | **Principal Occupation(s)** <br> **During Past 5 Years** |
| Barbara Wenig<br> 711 High Street<br> Des Moines, IA 50392<br> 1972<br>| Vice President (since 2024) | &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> Executive Managing Director – Chief Business Officer<br> (since 2025)<br> Executive Managing Director – Global Head of Operations and<br> Services - Principal Asset Management<sup>SM</sup> (2021-2024)  |
| Brant K. Wong<br> 711 High Street<br> Des Moines, IA 50392<br> 1976 | Vice President (since 2025) | &nbsp;&nbsp;<u>Principal Financial Group\*</u><br> Head of Retirement Solutions (since 2025)<br><u>J.P. Morgan Asset Management</u><br> Head of Retirement Platforms and Strategy (2022-2025)<br> Head of Retirement Service, Product and National Accounts<br> (2019-2022)<br>|
| Jared A. Yepsen<br> 711 High Street<br> Des Moines, IA 50392<br> 1981 | Tax Counsel (since 2025)<br> Assistant Tax Counsel (2017-2025)<br>| <u>Principal Financial Group\*</u><br> Assistant General Counsel (since 2023)<br> Counsel (2015-2023)<br>|
| \* The reference to Principal Financial Group includes positions held by the Interested Board Members / Principal Funds Officers, including as an officer, employee, and/or director, with affiliates or subsidiaries of Principal Financial Group. The titles set forth in this SAI are each Interested Board Member's / Principal Funds Officer's title with Principal Workforce, LLC, an affiliated entity of PGI that is the payroll employer of the Interested Board Members and Principal Funds Officers. | \* The reference to Principal Financial Group includes positions held by the Interested Board Members / Principal Funds Officers, including as an officer, employee, and/or director, with affiliates or subsidiaries of Principal Financial Group. The titles set forth in this SAI are each Interested Board Member's / Principal Funds Officer's title with Principal Workforce, LLC, an affiliated entity of PGI that is the payroll employer of the Interested Board Members and Principal Funds Officers. | \* The reference to Principal Financial Group includes positions held by the Interested Board Members / Principal Funds Officers, including as an officer, employee, and/or director, with affiliates or subsidiaries of Principal Financial Group. The titles set forth in this SAI are each Interested Board Member's / Principal Funds Officer's title with Principal Workforce, LLC, an affiliated entity of PGI that is the payroll employer of the Interested Board Members and Principal Funds Officers. |

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**Board Member Ownership of Securities**

Because the Funds had not yet commenced operations as of the date of this SAI, the Board Members did not own shares of the Funds.

**Board Member and Officer Compensation**

The Principal Funds do not pay any remuneration to officers or to any Board Members listed above as Interested Board Members. The Board annually considers a proposal to reimburse PGI for certain expenses, including a portion of the Chief Compliance Officer's compensation. If the proposal is adopted, these amounts are allocated across all Funds based on relative net assets of each portfolio.

Each Independent Board Member received compensation for service as a member of the Boards of all investment companies in the Principal Funds based on a schedule that takes into account an annual retainer amount, the number of meetings attended, and expenses incurred. Board Member compensation and related expenses are allocated across all Funds and the other PGI-sponsored registered investment companies for which the CCO serves as Chief Compliance Officer.

The following table provides information regarding the compensation received by the Independent Board Members from the Funds included in this SAI and from the Fund Complex during the fiscal year ended June 30, 2025. With respect to the Funds included in this SAI, Board Member compensation is paid from the unitary fee that such Funds pay to PGI. The Principal Funds do not provide retirement benefits or pensions to any of the Board Members.

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| | | |
|:---|:---|:---|
| **Board Member** | **Funds in this SAI<sup>(3)</sup>** | **Fund Complex**<sup>(4)</sup> |
| Daniel J. Beckman<sup>(1)</sup> | $0 | $0 |
| Craig Damos | $0 | $441350 |
| Katharin S. Dyer | $0 | $375600 |
| Frances P. Grieb | $0 | $377600 |
| Victor L. Hymes | $0 | $392600 |
| Sharmila C. Kassam<sup>(2)</sup> | $0 | $0 |
| Padelford L. Lattimer | $0 | $390600 |
| Karen McMillan | $0 | $405600 |
| Thomas A. Swank | $0 | $375600 |

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<sup>(1)</sup> Mr. Beckman was elected to the Board effective March 10, 2026.

<sup>(2)</sup> Ms. Kassam was elected to the Board effective September 10, 2025.

<sup>(3)</sup> The Funds had not yet commenced operations as of June 30, 2025.

<sup>(4)</sup> "Fund Complex" includes the Principal Real Asset Fund and the Principal Private Credit Fund, which as of the date of this SAI, are not overseen by the Board Members and the Board Members do not receive compensation from those Funds. However, the Board Members provided oversight for the Principal Real Asset Fund for the period July 1, 2024 through August 1, 2024 and received compensation from the Principal Real Asset Fund for that period and is reflected in the table above.

**INVESTMENT ADVISORY AND OTHER SERVICES**

**Investment Advisors**

Principal Global Investors, LLC (doing business as Principal Asset Management<sup>SM</sup>) ("PGI"), an indirect subsidiary of Principal Financial Group, Inc. ("Principal<sup>®</sup>"), serves as the investment advisor for the Funds in this SAI.

PGI directly makes decisions to purchase or sell securities for each Fund.

**Affiliated Persons of the Trust Who are Affiliated Persons of the Advisor**

For information about affiliated persons of the Trust who are also affiliated persons of PGI or affiliated advisors, see the Interested Board Members and Principal Funds Officers tables in the "Leadership Structure and Board" section.

**Codes of Ethics**

The Trust and PGI have adopted Codes of Ethics ("Codes") under Rule 17j-1 of the 1940 Act. PGI has also adopted such a Code under Rule 204A-1 of the Investment Advisers Act of 1940. These Codes are designed to prevent, among other things, persons with access to information regarding the portfolio trading activity of the Funds from using that information for their personal benefit. Except in limited circumstances, the Code for PGI and the Trust prohibits portfolio managers from personally trading securities that are held or traded in the actively managed portfolios for which they are responsible. The Trust's Board reviews reports at least annually regarding the operation of the Code of Ethics of the Trust and PGI. A copy of the Trust's Code will be provided upon request, which may be made by contacting the Trust.

**Management Agreement**

Under the terms of the Management Agreement with the Trust, PGI, the investment advisor, is entitled to receive a fee computed and accrued daily and payable monthly, at the following annual rates, for providing investment advisory services and specified other services. The management fee schedule for each Fund is as follows (expressed as a percentage of average net assets):

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Fund** | **All Assets** |
| Principal CLO ETF | 0.19% |
| Principal Inflation Protection ETF | 0.19% |
| Principal Long Duration ETF | 0.19% |
| Principal Securitized Debt ETF | 0.19% |

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<u>Fund Operating Expenses</u>

The Management Agreement between the Trust, on behalf of each Fund, and PGI provides that PGI will pay all operating expenses of the Fund, except for the management fee, payments made under each Fund's Rule 12b-1 plan, brokerage commissions and other expenses connected to the execution of portfolio transactions, interest expense, taxes, acquired fund fees and expenses, litigation expenses, and tax reclaim recovery expenses and other extraordinary expenses.

Because the Funds had not yet commenced operations as of the date of this SAI, no information regarding management fees paid during the last three years is available.

**Distributor**

ALPS Distributors, Inc. (the "Distributor") is located at 1290 Broadway, Suite 1000, Denver, Colorado 80203. The Distributor is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and a member of the Financial Industry Regulatory Authority ("FINRA").

Shares will be continuously offered for sale by the Trust through the Distributor only in whole Creation Units, as described in the section of this SAI entitled "Purchase and Redemption of Creation Units." The Distributor also acts as an agent for the Trust with respect to the continuous distribution of Creation Units of the Funds. The Distributor will deliver the Prospectus to APs purchasing Shares in Creation Units and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor has no role in determining the investment policies of the Funds or which securities are to be purchased or sold by the Funds.

The Board has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act. No Rule 12b-1 fees are currently paid by any of the Funds, and there are no plans to impose these fees. However, in accordance with its Rule 12b-1 plan, each Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to compensate the Distributor for providing certain services to the Fund, including activities primarily intended to result in the sale of Creation Units of the Fund or the provision of investor services. Under the plan, the Funds would have no legal obligation to pay any amount that exceeds the compensation limit. The Distributor would be entitled to retain any such fees without regard to the expenses that it incurs. In the event Rule 12b-1 fees are charged in the future, they will be paid out of the respective Fund's assets, and over time, these fees will increase the cost of your investment and they may cost you more than certain other types of sales charges.

**Fund Sub-Administrator, Custodian, and Transfer Agent** 

State Street Bank and Trust Company ("State Street") serves as the Funds' sub-administrator, custodian, and transfer agent. State Street is located at One Congress Street, Suite 1, Boston, MA 02114-2016.

PGI has entered into an Administration Agreement and an Accounting Services Agreement with State Street, under which State Street provides necessary administrative, treasury, and tax services, including financial reporting for the maintenance and operations of the Funds. In addition, State Street makes available the office space, equipment, personnel, and facilities required to provide such services. State Street also provides fund accounting services and is responsible for maintaining the books and records and calculating the daily net asset value of the Funds. PGI is ultimately responsible for such services pursuant to a Management Agreement with the Trust.

Because the Funds had not yet commenced operations as of the date of this SAI, no information regarding the amount the Funds paid for these services is available.

Under the Custody Agreement with the Trust, State Street maintains in separate accounts cash, securities, and other assets of the Trust and each Fund, keeps all necessary accounts and records, and provides other services. State Street is required, upon order of the Trust, to deliver securities held by State Street and to make payments for securities purchased by the Trust for each Fund. Under the Custody Agreement, State Street is also authorized to appoint certain foreign custodians or foreign custody managers for Fund investments outside the United States.

Pursuant to a Transfer Agency Services Agreement with the Trust, State Street acts as transfer agent, dividend disbursing agent, and shareholder servicing agent to the Funds.

**Securities Lending Agent**

State Street serves as the securities lending agent for the Funds. The Funds had not yet commenced operations as of the date of this SAI, and, as a result, did not engage in securities lending activities as of the Funds' fiscal year ended June 30, 2025.

The services provided by State Street, as securities lending agent for the Funds, include: coordinating, with the Funds, the selection of securities to be loaned; negotiating loan terms; monitoring the value of securities loaned and corresponding collateral, marking to market daily; coordinating collateral movements; monitoring dividends; and transferring, recalling, and arranging the return of loaned securities to the Funds upon loan termination.

**INTERMEDIARY COMPENSATION**

Shares of the Funds are sold primarily through intermediaries, such as brokers, dealers, investment advisors, banks, trust companies, pension plan consultants, retirement plan administrators, and insurance companies.

As mentioned in the Prospectus, in the event Rule 12b-1 fees are paid by the Funds to the Distributor in the future, the Distributor may pay some or all of those fees to intermediaries.

<u>Additional Payments to Intermediaries</u>

In addition, PGI and its affiliates may, out of their own resources, pay amounts to intermediaries that support the distribution or marketing of shares of the Funds or provide services to Fund shareholders. The making of these payments could create a conflict of interest for a financial intermediary receiving such payments. These payments may be made from profits received by PGI from the management fees paid to PGI by the Funds.

Numerous factors may be considered in determining the amount of such additional payments, including, but not limited to, the intermediary's Fund sales and assets, and the willingness and ability of the intermediary to give the Distributor access to its Financial Professionals for educational and marketing purposes. Some such arrangements may include an agreed upon minimum or maximum payment.

As of March 31, 2026, PGI anticipates that the firms that will receive additional payments as described above include, but are not necessarily limited to, the following:

Ameriprise Financial Services

Charles Schwab & Co., Inc.

Kestra Investment Services

LPL Financial

Morgan Stanley

National Financial Services, LLC

Raymond James

The preceding list is subject to change at any time without notice. Any additions, modifications, or deletions to the financial intermediaries identified in this list that have occurred since March 31, 2026, are not reflected.

Ask your Financial Professional or visit your intermediary's website for more information about the amounts paid to them by PGI and its affiliates, and by sponsors of other investment companies your Financial Professional may recommend to you.

**BROKERAGE ALLOCATION AND OTHER PRACTICES**

**Brokerage on Purchases and Sales of Securities**

All orders for the purchase or sale of portfolio securities are placed on behalf of a Fund by PGI. In distributing brokerage business arising out of the placement of orders for the purchase and sale of securities for any Fund, the objective of PGI is to obtain the best overall terms. In pursuing this objective, PGI considers all matters it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and executing capability of the broker or dealer, confidentiality, including trade anonymity, and the reasonableness of the commission, if any (for the specific transaction and on a continuing basis). This may mean in some instances that PGI will pay a broker commissions that are in excess of the amount of commissions another broker might have charged for executing the same transaction when PGI believes that such commissions are reasonable in light of a) the size and difficulty of the transaction, b) the quality of the execution provided, and c) the level of commissions paid relative to commissions paid by other institutional investors. Such factors are viewed both in terms of that particular transaction and in terms of all transactions that broker executes for accounts over which PGI exercises investment discretion. The Board has also adopted a policy and procedure designed to prevent each of the Funds from compensating a broker/dealer for promoting or selling Fund shares by directing brokerage transactions to that broker/dealer for the purpose of compensating the broker/dealer for promoting or selling Fund shares. Therefore, PGI may not compensate a broker/dealer for promoting or selling Fund shares by directing brokerage transactions to that broker/dealer for the purpose of compensating the broker/dealer for promoting or selling Fund shares. PGI may purchase securities in the over-the-counter market, utilizing the services of principal market makers unless better terms can be obtained by purchases through brokers or dealers, and may purchase securities listed on the NYSE from non-Exchange members in transactions off the Exchange.

PGI may give consideration in the allocation of business to services performed by a broker (e.g., the furnishing of statistical data and research generally consisting of, but not limited to, information of the following types: analyses and reports concerning issuers, industries, economic factors, and trends; portfolio strategy; performance of client accounts; and access to research analysts, corporate management personnel, and industry experts). If any such allocation is made, the primary criteria used will be to obtain the best overall terms for such transactions or terms that are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of a particular transaction. PGI generally pays additional commission amounts for such research services. Statistical data and research information received from brokers or dealers as described above may be useful in varying degrees and PGI may use it in servicing some or all of the accounts it manages.

Subject to the rules promulgated by the SEC, as well as other regulatory requirements, the Board has approved procedures whereby a Fund may purchase securities that are offered in underwritings in which an affiliate of a sub-advisor, or PGI, participates. These procedures prohibit a Fund from directly or indirectly benefiting a PGI affiliate in connection with such underwritings. In addition, for underwritings where PGI participates as a principal underwriter, certain restrictions may apply that could, among other things, limit the amount of securities that a Fund could purchase in the underwritings. The sub-advisor shall determine the amounts and proportions of orders allocated to the affiliate. The Board will receive quarterly reports on these transactions.

The Board has approved procedures that permit a Fund to effect a purchase or sale transaction between the Fund and any other affiliated investment company or between a Fund and affiliated persons of the Fund under limited circumstances prescribed by SEC Rules. Any such transaction must be effected without any payment other than a cash payment for the securities, for which a market quotation is readily available, at the current market price; must be consistent with the investment objective, investment strategy, and risk profile of the Fund; and no brokerage commission or fee (except for customary transfer fees), or other remuneration may be paid in connection with the transaction. The Board will receive quarterly reports on these transactions.

Purchases and sales of debt securities and money market instruments usually are principal transactions; portfolio securities are normally purchased directly from the issuer or from an underwriter or market makers for the securities. Such transactions are usually conducted on a net basis with a Fund paying no brokerage commissions. Purchases from underwriters include a commission or concession paid by the issuer to the underwriter, and the purchases from dealers serving as market makers include the spread between the bid and asked prices.

Commission rates that PGI pays to brokers may vary and reflect such factors as the trading volume placed with a broker, the type of security, the market in which a security is traded and the trading volume of that security, the types of services provided by the broker (i.e. execution services only or additional research services) and the quality of a broker's execution.

The Funds had not yet commenced operations as of the date of this SAI, and, as a result, did not pay brokerage commissions during the last three years.

The Funds had not yet commenced operations as of the date of this SAI, and, as a result, did not pay brokerage commissions to brokers affiliated with PGI during the last three years.

The Funds had not yet commenced operations as of the date of this SAI, and, as a result, did not have holdings in securities of the Funds' regular brokers or dealers.

**Conflicts of Interest and Allocation of Trades**

**By the Manager (PGI).** PGI has its own trading platform and personnel that perform trade-related functions. Where applicable, PGI trades on behalf of its own clients. Such transactions are executed in accordance with PGI's trading policies and procedures, including, but not limited to, trade allocations and order aggregation, purchase of new issues, and directed brokerage. PGI acts as discretionary investment advisor for a variety of individual accounts, ERISA accounts, registered investment companies, insurance company separate accounts, and public employee retirement plans and places orders to trade portfolio securities for each of these accounts. Managing multiple accounts may give rise to potential conflicts of interest including, for example, conflicts among investment strategies and conflicts in the allocation of investment opportunities. PGI has adopted and implemented policies and procedures that it believes address the potential conflicts associated with managing accounts for multiple clients and are designed to ensure that all clients are treated fairly and equitably. These procedures include allocation policies and procedures and internal review processes.

If, in carrying out the investment objectives of its respective clients, occasions arise in which PGI deems it advisable to purchase or sell the same equity securities for two or more client accounts at the same or approximately the same time, PGI may submit the orders to purchase or sell to a broker/dealer for execution on an aggregate or "bunched" basis. PGI will not aggregate orders unless it believes that aggregation is consistent with (1) its duty to seek best execution and (2) the terms of its investment advisory agreements. In distributing the securities purchased or the proceeds of sale to the client accounts participating in a bunched trade, no advisory account will be favored over any other account and each account that participates in an aggregated order will participate at the average share price for all transactions of PGI relating to that aggregated order on a given business day, with all transaction costs relating to that aggregated order shared on a pro rata basis.

Because of PGI's role as investment advisor to each of the Funds and discretionary advisor to funds of funds and some underlying funds, conflicts may arise in connection with the services PGI provides to funds of funds with respect to asset class and target weights for each asset class and investments made in underlying funds. Conflicts may arise in connection with the services PGI provides to the funds of funds that it manages, in connection with the services PGI provides to other funds of funds, because PGI serves as the investment adviser to the underlying mutual funds in which the funds of funds invest, sometimes as the discretionary advisor, and an affiliated investment adviser may serve as sub-adviser to the mutual funds in which a fund of funds may invest. This raises a potential conflict because PGI's or an affiliated company's profit margin may vary depending upon the underlying fund in which the funds of funds invest.

PGI implements the following in an effort to limit the appearance of conflicts of interest and the opportunity for events that could trigger an actual conflict of interest:

• PGI uses a process to select
investment advisors that emphasizes the selection of PGI or Principal-affiliated sub-advisors that are determined to be qualified under
PGI's due diligence process. However, PGI will select an unaffiliated sub-advisor to manage all or a portion of a Fund's portfolio
when deemed necessary or appropriate based upon a consideration of the Fund's objective and investment strategies and available
expertise and resources within the Principal organization.

• PGI provides ongoing oversight
of the Funds' investments to monitor adherence to their investment program.

Additionally, each Fund's portfolio managers manage a number of accounts other than the applicable Fund's portfolio, including in some instances proprietary or personal accounts. Managing multiple accounts may give rise to potential conflicts of interest including, for example, conflicts among investment strategies, allocating time and attention to account management, allocation of investment opportunities, knowledge of and timing of fund trades, selection of brokers and dealers, and compensation for the account. PGI has adopted and implemented policies and procedures that it believes address the potential conflicts associated with managing accounts for multiple clients and personal accounts and are designed to ensure that all clients and client accounts are treated fairly and equitably. These procedures include allocation policies and procedures, personal trading policies and procedures, internal review processes and, in some cases, review by independent third parties.

Investments that PGI and its portfolio managers deem appropriate for a Fund's portfolio may also be deemed appropriate by it for other accounts. Therefore, the same security may be purchased or sold at or about the same time for both a Fund's portfolio and other accounts. In such circumstances, PGI may determine that orders for the purchase or sale of the same security for a Fund's portfolio and one or more other accounts should be combined. In this event the transactions will be priced and allocated in a manner deemed by PGI to be equitable and in the best interests of a Fund's portfolio and such other accounts. While in some instances combined orders could adversely affect the price or volume of a security, the Trust believes that its participation in such transactions on balance will produce better overall results for the Funds.

**PURCHASE AND REDEMPTION OF CREATION UNITS**

**Book-Entry Only System**

The Depository Trust Company ("DTC") acts as securities depository for the shares. Shares of the Funds are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC. Certificates will not be issued for shares.

DTC, a limited-purpose trust company, was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among DTC participants in such securities through electronic book-entry changes in accounts of the DTC participants, thereby eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Beneficial ownership of shares is limited to DTC participants and persons holding interests through DTC participants. Ownership of beneficial interests in shares (owners of beneficial interests are referred to herein as Beneficial Owners) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC participants) and on the records of DTC participants (with respect to indirect DTC participants and Beneficial Owners that are not DTC participants). Beneficial Owners will receive from or through a DTC participant a written confirmation relating to their purchase of shares.

Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make available to the Trust upon request and for a fee to be charged to the trust a listing of the shares of the fund held by each DTC participant. The Trust shall inquire of each such DTC participant as to the number of Beneficial Owners holding fund shares, directly or indirectly, through such DTC participant. The Trust shall provide each such DTC participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC participant may reasonably request, so that such notice, statement or communication may be transmitted by such DTC participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each such DTC participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC participants' accounts with payments in amounts proportionate to their respective beneficial interests in shares of the fund as shown on the records of DTC or its nominee. Payments by DTC participants to indirect DTC participants and Beneficial Owners of shares held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC participants.

The Trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC participants or the relationship between such DTC participants and the indirect DTC participants and Beneficial Owners owning through such DTC participants.

DTC may decide to discontinue providing its service with respect to shares at any time by giving reasonable notice to the trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the trust shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the trust makes other arrangements with respect thereto satisfactory to the Exchange.

**Creation Units**

The Funds sell, issue, and redeem through the Distributor, Shares in Creation Units on a continuous basis, without a sales load, at the NAV next determined after receipt of an order in proper form on any Business Day. As of the date of this SAI, the NYSE observes the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Funds will not issue fractional Creation Units. Shares of the Funds will only be issued against full payment, as further described in the Prospectus and this SAI. Notwithstanding the foregoing, the Trust may, but is not required to, permit orders until 4:00 p.m., Eastern time, or until the market close (in the event the Exchange closes early).

A Creation Unit is an aggregation of a specified number of Shares. The Board may declare a split or a consolidation in the number of Shares outstanding of the Funds or Trust and make a corresponding change in the number of Shares in a Creation Unit.

To purchase or redeem any Creation Units from a Fund, you must be, or transact through, an authorized participant ("AP"). To be an AP, you must be a member or participant ("Participating Party") in the Continuous Net Settlement System ("Clearing Process") of the National Securities Clearing Corporation ("NSCC") or a participant in DTC with access to the DTC system ("DTC Participant"), and you must execute an agreement ("Participant Agreement") with the Distributor, which must be accepted by the Transfer Agent, that governs transactions in the Fund's Creation Units.

Transactions by an AP that is a Participating Party using the NSCC system are referred to as transactions "through the Clearing Process." Transactions by an AP that is a DTC Participant using the DTC system are referred to as transactions "outside the Clearing Process."

Investors who are not APs but want to transact in Creation Units may contact the Distributor for the names of APs. An AP may require investors to enter into a separate agreement to transact through it for Creation Units and may require orders for purchases of shares placed with it to be in a particular form. Investors should be aware that their broker may not be an AP and, therefore, may need to place any order to purchase or redeem Creation Units through another broker or person that is an AP, which may result in additional charges. There are expected to be a limited number of APs at any one time.

Orders must be transmitted by an AP by electronic order entry system, telephone, electronic mail, or other transmission method acceptable to the Distributor pursuant to procedures set forth in the Participant Agreement. Market disruptions and telephone or other communication failures may impede the transmission of orders.

**Purchasing Creation Units**

<u>Fund Deposit</u>

The consideration for a Creation Unit of a Fund is the Fund Deposit. The Fund Deposit will consist of the In-Kind Creation Basket and Cash Component, or an all cash payment ("Cash Value"), as determined by PGI to be permitted or required by a Fund. Short portions in a Fund's portfolio and any other financial instruments that cannot be transferred in-kind, will be represented by cash in the Cash Component and not in the In-Kind Creation Basket.

The Cash Component will typically include a "Balancing Amount" reflecting the difference, if any, between the NAV of a Creation Unit and the market value of the securities in the In-Kind Creation Basket. If the NAV per Creation Unit exceeds the market value of the securities in the In-Kind Creation Basket, the purchaser pays the Balancing Amount to the Fund. By contrast, if the NAV per Creation Unit is less than the market value of the securities in the In-Kind Creation Basket, the Fund pays the Balancing Amount to the purchaser. The Balancing Amount ensures that the consideration paid by an investor for a Creation Unit is exactly equal to the value of the Creation Unit.

PGI, in a portfolio composition file sent via the NSCC, generally makes available on each Business Day, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time), a list of the names and the required number of shares of each security in the In-Kind Creation Basket to be included in the current Fund Deposit for the Fund (based on information about the Fund's portfolio at the end of the previous Business Day subject to correction). If applicable, PGI, through the NSCC, also makes available on each Business Day, the estimated Cash Component or Cash Value, effective through and including the previous Business Day, per Creation Unit.

The announced Fund Deposit is applicable, subject to any adjustments as described below, for purchases of Creation Units of a Fund until the next-announced Fund Deposit is made available. From day to day, the composition of the In-Kind Creation Basket may change as, among other things, corporate actions and investment decisions by the Advisor are implemented with a view to the investment objective to the Fund. All questions as to the composition of the In-Kind Creation Basket and the validity, form, eligibility, and acceptance for deposit of any securities shall be determined by the Fund, and the Fund's determination shall be final and binding. Each Fund reserves the right to accept a nonconforming (i.e., custom) Fund Deposit. Payment of any stamp duty or the like shall be the sole responsibility of the AP purchasing a Creation Unit. The AP must ensure that all Deposit Securities properly denote change in beneficial ownership.

<u>Cash in lieu</u>

Each Fund may, in its sole discretion, permit or require the substitution of an amount of cash ("cash in lieu") to be added to the Cash Component to replace any security in the In-Kind Creation Basket. Circumstances in which the Funds may permit or require cash in lieu include, without limitation:

• when the
Fund announces before the open of trading that all purchases, all redemptions or all purchases and redemptions on that day will be made
entirely in cash;

• when the
securities in the In-Kind Creation Basket may not be available in sufficient quantity for delivery or may not be eligible for transfer
through the systems of DTC or the Clearing Process; and

• when the
AP or its underlying investor is restricted under U.S. or local securities laws or policies from transacting in one or more securities
in the In-Kind Creation Basket.

Each Fund will comply with the federal securities laws in accepting securities in the In-Kind Creation Basket, including the securities in the In-Kind Creation Basket that are sold in transactions that would be exempt from registration under the 1933 Act.

Each Fund expects to purchase the securities represented by the cash in lieu amount in the secondary market ("Market Purchases"). PGI may charge a higher transaction fee on the cash amount contributed in lieu of securities, which is intended in part to cover all or a portion of any difference between the market value at which the securities were purchased by the Fund and the cash in lieu amount.

<u>Order Cut-Off Time</u>

For an order involving a Creation Unit to be effectuated at a Fund's NAV on a particular day, it must be received by the Distributor by or before the deadline for such order ("Order Cut-Off Time") in accordance with the procedures set forth in the Participant Agreement. The Order Cut-Off Time for creation and redemption orders for a Fund is generally expected to be 4:00 p.m. Eastern Time for In-Kind Creation and Redemption Baskets, and 2:00 p.m. Eastern Time for Custom Baskets (which includes cash value) transactions. Accordingly, In-Kind Creation and Redemption Baskets are expected to be accepted until the close of regular trading on the Exchange on each Business Day, which is usually 4:00 p.m. Eastern Time. On days when the Exchange or bond markets close earlier than normal (such as the day before a holiday), the Order Cut-Off Time is expected to track the Exchange or bond markets closing and be similarly earlier than normal.

For select International Funds, next day (also known as T-1 or T minus one) international market orders are to be placed after the listing exchange closing time and before the Fund's established T-1 order window cut-off time, the latest being 5:30 PM Eastern Standard Time on any Business Day. Such orders, if accepted, will receive the next Business Day's NAV per Creation Unit.

Certain orders, such as custom orders, sometimes clear outside the Clearing Process and, therefore, like other orders outside the Clearing Process, may need to be transmitted early on the relevant Business Day to be effectuated at that day's NAV. A custom order may be placed when, for example, an AP cannot transact in a security in the In-Kind Creation or Redemption Basket and additional cash is included in the Fund Deposit or Fund Redemption in lieu of such security. Custom orders may be required to be received by the Distributor by 3:00 p.m. Eastern Time to be effectuated based on the Fund's NAV on that Business Day.

In all cases, cash and securities should be transferred to the Fund by the "Settlement Date," which is generally the Business Day immediately following the Business Day the order is placed ("Transmittal Date"). Persons placing custom orders or orders involving Cash Value should be aware of time deadlines imposed by intermediaries, such as DTC and/or the Federal Reserve Bank wire system, which may delay the delivery of cash and securities by the Settlement Date.

<u>Placement of Creation Orders</u>

All purchase orders must be placed by or through an AP. To order a Creation Unit, an AP must submit an irrevocable purchase order to the Distributor in accordance with the procedures set forth in the Participant Agreement. In-kind (portions of) purchase orders will be processed through the Clearing Process when it is available. The Clearing Process is an enhanced clearing process that is available only for certain securities and only to DTC Participants that are also participants in the Clearing Process of the NSCC. In-kind (portions of) purchase orders not subject to the Clearing Process will go through a manual clearing process run by DTC. Fund Deposits that include government securities must be delivered through the Federal Reserve Bank wire transfer system ("Federal Reserve System"). Fund Deposits that include cash may be delivered through the Clearing Process or the Federal Reserve System. Certain orders for a Fund may be made outside the Clearing Process. In-kind deposits of securities for such orders must be delivered through the Federal Reserve System (for government securities) or through DTC (for corporate securities).

<u>Orders Using Clearing Process</u>

In connection with creation orders made through the Clearing Process, the Distributor transmits, on behalf of the AP, such trade instructions as are necessary to effect the creation order. Pursuant to such trade instructions, the AP agrees to deliver the requisite Fund Deposit to the Trust, together with such additional information as may be required by the Distributor and the Transfer Agent. An order to create Creation Units through the Clearing Process is deemed received by the Distributor and the Transfer Agent on the Transmittal Date if (i) such order is received by the Distributor by the order Cut-Off Time on such Transmittal Date and (ii) all other procedures set forth in the Participant Agreement are properly followed. Cash Components will be delivered using either the Clearing Process or the Federal Reserve System, as described below.

<u>Orders Outside Clearing Process</u>

Fund Deposits made outside the Clearing Process must state that the DTC Participant is not using the Clearing Process and that the creation of Creation Units will instead be effected through a transfer of securities and cash directly through DTC. With respect to such orders, the Fund Deposit transfer must be ordered by the DTC Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of the requisite number of securities in the In- Kind Creation Basket (whether standard or custom) through DTC to the relevant Trust account by 11:00 a.m., Eastern Time, (the "DTC Cut-Off Time") on the Business Day immediately following the Transmittal Date. The amount of cash equal to the Cash Component, along with any cash in lieu and Transaction Fee, must be transferred directly to the Custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by the Custodian no later than 12:00 p.m., Eastern Time, on the Business Day immediately following the Transmittal Date. The delivery of corporate securities through DTC must occur by 3:00 p.m., Eastern Time, on the Business Day immediately following the Transmittal Date. The delivery of government securities through the Federal Reserve System must occur by 3:00 p.m., Eastern Time, on the Business Day immediately following the Transmittal Date.

An order to create Creation Units outside the Clearing Process is deemed received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor by the Order Cut-Off Time on such Transmittal Date and (ii) all other procedures set forth in the Participant Agreement are properly followed. If the Custodian does not receive both the required In-Kind Creation Basket by the DTC Cut-Off Time and the Cash Component by the appointed time, such order may be canceled. Upon written notice to the Distributor and the Transfer Agent, a canceled order may be resubmitted the following Business Day using a Fund Deposit as newly constituted to reflect the then-current In-Kind Creation Basket and Cash Component. Except as provided in the Participant Agreement and subject to Foreign Market Holidays or unless a Fund and the AP agree to a different Settlement Date, the delivery of Creation Units so created will occur no later than the first Business Day following the day on which the order is deemed received by the Distributor. APs that submit a canceled order will be liable to the Funds for any losses resulting therefrom.

Orders involving foreign securities are expected to be settled outside the Clearing Process. Thus, upon receipt of an irrevocable purchase order, the Distributor will notify PGI and the Custodian of such order. The Custodian, who will have caused the appropriate local sub-custodian(s) of the Fund to maintain an account into which an AP may deliver the Fund Deposit (or cash in lieu), with adjustments determined by the Fund, will then provide information of the order to such local sub-custodian(s). The AP must also make available on or before the Settlement, by means satisfactory to the Fund, immediately available or same day funds in U.S. dollars estimated by the Fund to be sufficient to pay the Cash Component and Transaction Fee.

While, as stated above, Creation Units are generally delivered no later than the first Business Day following the day on which the order is deemed received by the Distributor, the Fund may settle Creation Unit transactions on a basis other than the one described above to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates (that is the last day the holder of a security can sell the security and still receive dividends payable on the security), and in certain other circumstances. Such settlement may take longer than one Business Day. In such cases, the local market settlement procedures will not commence until the end of local holiday periods.

**Acceptance of Orders for Creation Units**

The Trust reserves the right to reject a creation order transmitted to it by the Distributor in respect of the Funds for any legally permissible reason, including, but not limited to, the following circumstances: the order is not in proper form; the securities delivered do not conform to the In-Kind Creation Basket for the relevant date; acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful; or in the event that circumstances outside of the Trust's control make it practically impossible to process creation orders (such as acts of God; public service or utility problems; market conditions or activities causing trading halts; systems failures involving computer or other information systems; and similar extraordinary events). The Distributor shall notify an AP of its rejection of the order. The Funds, the Custodian, any sub-custodian, the Transfer Agent and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits, and they shall not incur any liability for the failure to give any such notification.

**Issuance of a Creation Unit**

Once a Fund has accepted a creation order, upon next determination of the Fund's NAV, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such NAV. The Distributor will transmit a confirmation of acceptance to the AP that placed the order.

Except as provided below, a Creation Unit will not be issued until the Fund obtains good title to the In-Kind Creation Basket securities and the Cash Component, along with any cash in lieu and Transaction Fee. Except as described above with respect to foreign markets, the delivery of Creation Units will generally occur no later than the first Business Day following the Transmittal Date for securities.

In certain cases, APs will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis.

With respect to orders involving foreign securities, when the applicable local sub-custodian(s) has confirmed to the Custodian that the In-Kind Creation Basket (or cash in lieu) has been delivered to the Fund's account at the applicable sub-custodian(s), the Distributor and PGI shall be notified of such delivery, and the Fund will issue and cause the delivery of the Creation Unit.

Creation Units may be created in advance of receipt by the Trust of all or a portion of the applicable In-Kind Creation Basket, provided the purchaser tenders an initial deposit consisting of any available securities in the In-Kind Creation Basket and cash equal to the sum of the Cash Component and at least 115% of the market value, as adjusted from time to time, of the In-Kind Creation Basket securities not delivered ("Additional Cash Deposit"). Such initial deposit will have a value greater than the NAV of the Creation Unit on the date the order is placed. The order shall be deemed to be received on the Transmittal Date provided that it is placed in proper form prior to 4:00 p.m., Eastern Time, on such date, and federal funds in the appropriate amount are deposited with the Custodian by the DTC Cut-Off Time the following Business Day. If the order is not placed in proper form by 4:00 p.m., Eastern Time, or federal funds in the appropriate amount are not received by the DTC Cut-Off Time the next Business Day, then the order will be canceled or deemed unreceived and the AP effectuating such transaction will be liable to the Fund for any losses resulting therefrom.

To the extent securities in the In-Kind Creation Basket remain undelivered, pending delivery of such securities, additional cash will be required to be deposited with the Trust as necessary to maintain an Additional Cash Deposit equal to at least 115% (as adjusted by PGI) of the daily marked-to-market value of the missing securities. To the extent that either such securities are still not received by 1:00 p.m., Eastern Time, on the first Business Day following the day on which the purchase order is deemed received by the Distributor or a marked-to-market payment is not made within one Business Day following notification to the purchaser and/or AP that such a payment is required, the Trust may use the cash on deposit to purchase the missing securities, and the AP effectuating such transaction will be liable to the Fund for any costs incurred therein or losses resulting therefrom, including any Transaction Fee, and any amount by which the actual purchase price of the missing securities exceeds the Additional Cash Deposit or the market value of such securities on the day the purchase order was deemed received by the Distributor, as well as brokerage and related transaction costs. The Trust will return any unused portion of the Additional Cash Deposit once all of the missing securities have been received by the Trust. The delivery of Creation Units so created will occur no later than the first Business Day following the day on which the purchase order is deemed received by the Distributor.

**Transaction Fees**

To compensate for costs incurred in connection with creation and redemption transactions, investors will be required to pay a Transaction Fee as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fund** | **Standard <br> Creation**<br> **Transaction**<br> **Fee \*** | **Maximum <br> Variable Charge <br> for Cash Portion<br> of Creation \*\*** | **Standard<br> Redemption**<br> **Transaction Fee \*** | **Maximum Variable<br> Charge for Cash<br> Portion of <br> Redemptions \*\*** |
| Principal CLO ETF | $250 | 3.00% | $250 | 2.00% |
| Principal Inflation Protection ETF | 250 | 3.00 | 250 | 2.00 |
| Principal Long Duration ETF | 250 | 3.00 | 250 | 2.00 |
| Principal Securitized Debt ETF | 250 | 3.00 | 250 | 2.00 |

---

\* Applicable to in-kind purchases only.

\*\* As a percentage of the cash amount invested.

The Standard Transaction Fee applies to in-kind purchases of the Funds effected through the Clearing Process on any Business Day, regardless of the number of Creation Units purchased or redeemed that day (assuming, in the case of multiple orders on the same day, that the orders are received at or near the same time). As shown in the table above, certain Fund Deposits consisting of a Cash Value will be subject to a variable charge of up to 3% in addition to the standard Transaction Fee. With cash received from the variable charge, PGI will purchase the necessary securities for a Fund's portfolio.

PGI may adjust the Transaction Fee from time to time. The Standard Creation/Redemption Transaction Fee is based, in part, on the number of holdings in a Fund's portfolio and may be adjusted on a quarterly basis if the number of holdings increases. Investors will also be responsible for the costs associated with transferring the securities in the In-Kind Creation (and Redemption) Baskets to (and from) the account of the Trust. Further, investors who, directly or indirectly, use the services of a broker or other intermediary to compose a Creation Unit in addition to an AP to effect a transaction in Creation Units may be charged an additional fee for such services.

<u>Cash Purchase Method</u>

When cash purchases of Creation Units are available or specified for a Fund, they will be effected in essentially the same manner as in-kind purchases. In the case of a cash purchase, the investor must pay the cash equivalent of the Fund Deposit. In addition, cash purchases may be subject to Transaction Fees.

**Redeeming Creation Units**

Fund Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Distributor and only on a Business Day. The redemption proceeds for a Creation Unit will consist of the In-Kind Redemption Basket and a Cash Redemption Amount, or an all cash payment ("Cash Value"), in all instances equal to the value of a Creation Unit. Short positions and other instruments that cannot be transferred in kind will be represented by cash in the Cash Redemption Amount and not in the In-Kind Redemption Basket.

The Cash Redemption Amount will typically include a Balancing Amount, reflecting the difference, if any, between the NAV of a Creation Unit and the market value of the securities in the In-Kind Redemption Basket. If the NAV per Creation Unit exceeds the market value of the securities in the In-Kind Redemption Basket, the Fund pays the Balancing Amount to the redeeming investor. By contrast, if the NAV per Creation Unit is less than the market value of the securities in the In-Kind Redemption Basket, the redeeming investor pays the Balancing Amount to the Fund.

PGI, in a portfolio composition file sent via the NSCC, generally makes available on each Business Day, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time), a list of the names and the required number of shares of each security in the In-Kind Redemption Basket to be included in the current redemption proceeds for the Fund (based on information at the end of the previous Business Day) (subject to correction). If applicable, PGI, through the NSCC, also makes available on each Business Day, the estimated Cash Component or Cash Value, effective through and including the previous Business Day, per Creation Unit. Each Fund reserves the right to accept a nonconforming (i.e., custom) Fund Redemption.

In lieu of an In-Kind Redemption Basket and Cash Redemption Amount, Creation Units may be redeemed consisting solely of cash in an amount equal to the NAV of a Creation Unit, which amount is referred to as the Cash Value. Such redemptions for a Fund may be subject to a variable charge, as explained above. If applicable, information about the Cash Value will be made available by PGI.

From day to day, the composition of the In-Kind Redemption Basket may change as, among other things, corporate actions and investment decisions by the Advisor are implemented with a view to the investment objective to the Fund. All questions as to the composition of the In-Kind Redemption Basket and the validity, form, eligibility, and acceptance for deposit of any securities shall be determined by the Fund, and the Fund's determination shall be final and binding.

The right of redemption may be suspended or the date of payment postponed: (i) for any period during which the NYSE is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the Shares or determination of the Fund's NAV is not reasonably practicable; or (iv) in such other circumstances as permitted by the SEC, including as described below.

<u>Cash in lieu</u>

Each Fund may, in its sole discretion, permit or require the substitution of an amount of cash ("cash in lieu") to be added to the Cash Redemption Amount to replace any security in the In-Kind Redemption Basket. A Fund may permit or require cash in lieu when, for example, the securities in the In-Kind Redemption Basket may not be available in sufficient quantity for delivery or may not be eligible for transfer through the systems of DTC or the Clearing Process. Similarly, a Fund may permit or require cash in lieu when, for example, the AP or its underlying investor is restricted under U.S. or local securities law or policies from transacting in one or more securities in the In-Kind Redemption Basket or an underlying investor would be subject to unfavorable tax treatment if the investor received redemption proceeds consisting of certain non-U.S. securities. Each Fund will comply with the federal securities laws in satisfying redemptions with the applicable In-Kind Redemption Basket, including the securities in the In-Kind Redemption Basket that are sold in transactions that would be exempt from registration under the 1933 Act. All redemption orders involving cash in lieu are considered to be "custom redemptions." PGI may charge a higher transaction fee on the cash amount contributed in lieu of securities, which is intended in part to cover all or a portion of any difference between the market value of the securities and the cash in lieu amount.

<u>Placement of Redemption Orders</u>

Redemptions must be placed to the Distributor. In addition, redemption orders must be processed either through the DTC process or the Clearing Process. To redeem a Creation Unit, an AP must submit an irrevocable redemption order to the Distributor in accordance with the procedures set forth in the Participant Agreement.

An AP submitting a redemption order is deemed to represent to the Fund that it is in compliance with all applicable representations set forth in the Participant Agreement. Each Fund reserves the absolute right, in its sole discretion, to verify these representations, but will typically require verification in connection with higher levels of redemption activity and/or short interest in the Fund. If the AP, upon receipt of a verification report, does not provide sufficient verification of the requested representations, the redemption order will not be considered to be in proper form and may be rejected by the Fund.

In certain cases, APs will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis.

For select International Funds, next day (also known as T-1 or T minus one) international market orders are to be placed after the listing exchange closing time and before the Fund's established T-1 order window cut-off time, the latest being 5:30 PM Eastern Standard Time on any Business Day. Such orders, if accepted, will receive the next Business Day's NAV per Creation Unit.

<u>Placement of Redemption Orders Using Clearing Process</u>

Orders to redeem Creation Units through the Clearing Process are deemed received by the Trust on the Transmittal Date if (i) such order is received by the Distributor not later than the Order Cut-Off Time on such Transmittal Date, and (ii) all other procedures set forth in the Participant Agreement are properly followed. Orders deemed received will be effectuated based on the NAV of the Fund as next determined. An order to redeem Creation Units using the Clearing Process made in proper form but received by the Trust after the Order Cut-Off Time will be deemed received on the next Business Day and will be effected at the NAV next determined on such next Business Day. In connection with such orders, the Transfer Agent transmits on behalf of the AP such trade instructions as are necessary to effect the redemption. Pursuant to such trade instructions, the AP agrees to deliver the requisite Creation Unit(s) to the Fund, together with such additional information as may be required by the Transfer Agent. Cash Redemption Amounts will be delivered using either the Clearing Process or the Federal Reserve System. The applicable In-Kind Redemption Basket and the Cash Redemption Amount will generally be transferred to the investor by the Settlement Date.

<u>Placement of Redemption Orders Outside Clearing Process</u>

Orders to redeem Creation Units outside the Clearing Process must state that the DTC Participant is not using the Clearing Process and that redemption of Creation Units will instead be effected through transfer of Shares directly through DTC. Such orders are deemed received by the Trust on the Transmittal Date if: (i) such order is received by the Transfer Agent not later than the Order Cut-Off Time on the Transmittal Date; (ii) such order is accompanied or followed by the delivery of both (a) the Creation Unit(s), which delivery must be made through DTC to the Custodian no later than the DTC Cut-Off Time on the Business Day immediately following the Transmittal Date and (b) the Cash Redemption Amount by 12:00 p.m., Eastern Time, on the Business Day immediately following the Transmittal Date; and (iii) all other procedures set forth in the Participant Agreement are properly followed. After the Trust has deemed such an order received, the Trust will initiate procedures to transfer, and expect to deliver, the requisite In-Kind Redemption Basket and/or any Cash Redemption Amount owed to the redeeming party by the first Business Day following the Transmittal Date on which such redemption order is deemed received by the Trust, unless the Fund and the AP agree to a different Settlement Date.

Orders involving foreign securities are expected to be settled outside the Clearing Process. Thus, upon receipt of an irrevocable redemption order, the Transfer Agent will notify PGI and the Custodian. The Custodian will then provide information of the redemption to the Fund's local sub-custodian(s). The redeeming AP, or the investor on whose behalf it is acting, will have established appropriate arrangements with a broker-dealer, bank or other custody provider in each jurisdiction in which the securities are customarily traded and to which such securities (and any cash in lieu) can be delivered from the Fund's accounts at the applicable local sub-custodian(s).

The calculation of the value of the In-Kind Redemption Basket and the Cash Redemption Amount to be delivered/received upon redemption will be made by the Custodian computed on the Business Day on which a redemption order is deemed received by the Trust. Therefore, if a redemption order in proper form is submitted to the Distributor by an AP with the ability to transact through the Federal Reserve System, as applicable, not later than Order Cut-Off Time on the Transmittal Date, and the requisite number of Shares of the relevant Fund are delivered to the Custodian prior to the DTC Cut-Off-Time, then the value of the In-Kind Redemption Basket and the Cash Redemption Amount to be delivered/received will be determined by the Custodian on such Transmittal Date. If, however, either: (i) the requisite number of Shares of the relevant Fund are not delivered by the DTC Cut- Off-Time, as described above, or (ii) the redemption order is not submitted in proper form, then the redemption order will not be deemed received as of the Transmittal Date. In such case, the value of the In-Kind Redemption Basket and the Cash Redemption Amount to be delivered/received will be computed on the Business Day following the Transmittal Date provided that the Fund Shares of the relevant Fund are delivered through DTC to the Custodian by 11:00 a.m., Eastern Time, the following Business Day pursuant to a properly submitted redemption order.

If it is not possible to effect deliveries of the securities in the In-Kind Redemption Basket, the Trust may in its discretion exercise its option to redeem Shares in cash, and the redeeming beneficial owner will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that each Fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its Shares based on the NAV of Shares of the Fund next determined after the redemption request is received in proper form (minus a Transaction Fee, including a variable charge, if applicable, as described above).

Redemptions of Fund Shares for the In-Kind Redemption Basket will be subject to compliance with applicable federal and state securities laws and each Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Trust could not lawfully deliver specific securities in the In-Kind Redemption Basket upon redemptions or could not do so without first registering the securities in the In-Kind Redemption Basket under such laws. An AP or an investor for which it is acting subject to a legal restriction with respect to a particular security included in the In-Kind Redemption Basket applicable to the redemption of a Creation Unit may be paid an equivalent amount of cash. The AP may request the redeeming beneficial owner of the Shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment, beneficial ownership of shares or delivery instructions.

**Delivery of Redemption Basket**

Once a Fund has accepted a redemption order, upon next determination of the Fund's NAV, the Fund will confirm the issuance of an In-Kind Redemption Basket, against receipt of the Creation Unit(s) at such NAV, any cash in lieu and Transaction Fee. A Creation Unit tendered for redemption and the payment of the Cash Redemption Amount, any cash in lieu and Transaction Fee will be effected through DTC. The AP, or the investor on whose behalf it is acting, will be recorded on the book-entry system of DTC.

In certain cases, APs will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis.

<u>Cash Redemption Method</u>

When cash redemptions of Creation Units are available or specified for a Fund, they will be effected in essentially the same manner as in-kind redemptions. In the case of a cash redemption, the investor will receive the cash equivalent of the In-Kind Redemption Basket minus any Transaction Fees.

<u>Settlement of Foreign Securities and Regular Foreign Holidays</u>

The Fund generally intends to effect deliveries of Creation Units on a basis of the Transmittal Date ("T") plus one Business Day (i.e., day on which the national securities exchange is open) ("T+1"), unless the Fund and the AP agree to a different Settlement Date. The Fund may effect deliveries of Creation Units on a basis other than T+1 to accommodate local holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex- dividend dates or under certain other circumstances. Given that foreign securities settle in accordance with the normal rules of settlement of such securities in the applicable foreign market, coupled with foreign market holiday schedules, the Settlement Date may be up to 15 calendar days after the Transmittal Date in certain circumstances.

The ability of the Trust to effect in-kind creations and redemptions within one Business Day of receipt of an order in good form is subject, among other things, to the condition that, within the time period from the date of the order to the date of delivery of the securities, there are no days that are holidays in the applicable foreign market. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods. For every occurrence of one or more intervening holidays in the applicable foreign market that are not holidays observed in the U.S. equity market, the redemption settlement cycle will be extended by the number of such intervening holidays. In addition to holidays, other unforeseeable closings in a foreign market due to emergencies may also prevent the Trust from delivering securities within normal settlement periods. The proclamation of new holidays, the treatment by market participants of certain days as "informal holidays" (e.g., days on which no or limited securities transactions occur, as a result of substantially shortened trading hours), the elimination of existing holidays or changes in local securities delivery practices could affect the information set forth herein at some time in the future.

Because the Fund's portfolio securities may trade on days that the Fund's Exchange is closed or on days that are not Business Days for the Fund, APs may not be able to redeem their Shares, or to purchase and sell Shares on the Exchange, on days when the NAV of the Fund could be significantly affected by events in the relevant non-U.S. markets.

The Trust offers, issues and sells Shares of the Fund to investors only in Creation Units through the Distributor on a continuous basis at the NAV next determined after an order in proper form is received. The NAV of the Fund is expected to be determined as of 4:00 p.m. ET on each "Business Day," which is defined to include any day that the Trust is open for business as required by Section 22(e) of the 1940 Act. The Trust will sell and redeem Creation Units of the Fund only on a Business Day.

The price of Shares trading on the Exchange will be based on a current bid-offer market. No secondary sales will be made to Brokers at a concession by the Distributor or by the Fund. Purchases and sales of Shares on the Exchange, which will not involve the Fund, will be subject to customary brokerage commissions and charges.

**Custom Baskets**

Each Fund may rely on Rule 6c-11 under the 1940 Act to use baskets of portfolio securities that do not reflect a pro-rata representation of the Fund's portfolio or that differ from the initial basket used in transactions on the same business day. These are referred to as "nonconforming" deposits and redemptions or custom baskets.

**CALCULATION OF NAV**

Each Fund's NAV is calculated each day the New York Stock Exchange ("NYSE") is open, as of the close of business of the Exchange (normally 4:00 p.m. Eastern Time). The NAV of Fund shares is not determined in days the NYSE is closed (generally, New Year's Day; Martin Luther King, Jr. Day; Washington's Birthday/Presidents' Day; Good Friday; Memorial Day; Juneteenth; Independence Day; Labor Day; Thanksgiving Day; and Christmas). The Funds will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price its shares as of 4:00 p.m. Eastern Time, if the particular disruption directly affects only the NYSE. When an order to buy or sell shares is received, the share price used to fill the order is the next price calculated after the order is received in proper form.

A Fund's NAV will be the value of a single Share. The NAV of Shares of a Fund will be computed by adding the value of the Fund's investments, cash, and other assets, subtracting its liabilities, and dividing the result by the number of Shares outstanding.

The Board has designated PGI as the Funds' valuation designee, as permitted by SEC Rule 2a-5, where PGI is responsible for the day-to-day valuation and oversight responsibilities of the Funds, subject to the Board's oversight. PGI has established a Valuation Committee ("Valuation Committee") to fulfill its oversight responsibilities as the Funds' valuation designee.

Generally, each Fund will value its portfolio securities and assets as follows:

In computing the Fund's NAV, the Fund's fixed income securities (including defaulted debt and restricted securities (collectively, "OTC-Traded Securities") will be valued based on price quotations obtained from a third-party pricing service or from a broker-dealer who makes markets in such securities. Any such third-party pricing service may use a variety of methodologies to value some or all such securities to determine the market price. For example, the prices of securities with characteristics similar to those held by the Fund may be used to assist with the pricing process. In addition, the pricing service may use proprietary pricing models. The Fund's OTC-Traded Securities will generally be valued at bid prices.

Debt securities with remaining maturities of sixty days or less for which market quotations and information furnished by a third-party pricing service are not readily available will be valued at amortized cost, which approximates current value.

Exchange traded equity securities, including ETFs, Depositary Receipts (including unsponsored ADRs), exchange-traded REITs, exchange-traded preferred stock, exchange-traded convertible bonds, and cleared swaps will be valued at market value, which will generally be determined using the last reported official closing or last trading price on the exchange or market on which the security is primarily traded at the time of valuation or, if no sale has occurred, at the last quoted bid price on the primary market or exchange on which they are traded.

Investment company securities (other than ETFs), including money market funds, closed end investment companies, unit investment trusts and open-end investment companies will be valued at NAV.

Exchange-traded futures contracts will be valued at the settlement or closing price determined by the applicable exchange.

Exchange-traded option contracts, including options on futures and swaps, will be valued at their most recent sale price. If no such sales are reported, these contracts will be valued at their most recent bid price.

OTC-traded derivative instruments, including options, swaps, will normally be valued on the basis of quotes obtained from a third party broker-dealer who makes markets in such securities or on the basis of quotes obtained from an independent third-party pricing service. The Fund's OTC-traded derivative instruments will generally be valued at bid prices. Certain OTC-traded derivative instruments, such as interest rate swaps and credit default swaps, will be valued at the mean price.

Prices described above will be obtained from pricing services that have been approved by the Board. A number of independent third party pricing services are available and the Funds may use more than one of these services. The Funds may also discontinue the use of any pricing service at any time. PGI will engage in oversight activities with respect to each Fund's pricing services, which includes, among other things, testing the prices provided by pricing services prior to calculation of the Fund's NAV, conducting periodic due diligence meetings, and periodically reviewing the methodologies and inputs used by these services.

Foreign securities and instruments will be valued in their local currency following the methodologies described above. Typically, foreign securities, instruments and currencies will be translated to U.S. dollars, based on foreign currency exchange rate quotations supplied by a pricing service as of the close of the New York Stock Exchange ("NYSE"), which will use a proprietary model to determine the exchange rate.

Forward foreign currency exchange contracts will be valued at an interpolated rate based on days to maturity between the closest preceding and subsequent settlement period. Such interpolated rates are derived from foreign currency exchange rate quotations reported by an independent third-party pricing service.

Other portfolio securities and assets for which market quotations, official closing prices, or information furnished by a pricing service are not readily available or, in the opinion of the Valuation Committee, are deemed unreliable will be fair valued in good faith by the Valuation Committee in accordance with applicable fair value pricing policies. For example, if, in the opinion of the Valuation Committee, a security's value has been materially affected by events occurring before the Fund's pricing time but after the close of the exchange or market on which the security is principally traded, that security will be fair valued in good faith by the Valuation Committee in accordance with applicable fair value pricing policies.

In fair valuing a security, the Valuation Committee may consider factors including price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers, and off-exchange institutional trading.

**TAX CONSIDERATIONS**

<u>Taxation of the Funds</u>

It is a policy of each Fund to make distributions of substantially all of its respective investment income and any net realized capital gains. Each Fund intends to qualify as a regulated investment company by satisfying certain requirements prescribed by Subchapter M of the Internal Revenue Code. If a 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.

Each Fund may purchase securities of certain foreign corporations considered to be passive foreign investment companies by the Internal Revenue Service. To avoid taxes and interest that must be paid by the Fund if these instruments appreciate in value, the Fund may make various elections permitted by the tax laws. However, these elections could require that the Fund recognizes additional taxable income, which in turn must be distributed.

Each Fund is required in certain cases to withhold and remit to the U.S. Treasury 24% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder 1) who has provided either an incorrect tax identification number or no number at all, 2) who is subject to backup withholding by the Internal Revenue Service for failure to report the receipt of interest or dividend income properly, or 3) who has failed to certify to the Fund that it is not subject to backup withholding or that it is a corporation or other "exempt recipient."

<u>Taxation of Shareholders</u>

A shareholder recognizes gain or loss on the sale or redemption of shares of a Fund in an amount equal to the difference between the proceeds of the sales or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the sale or redemption. In general, any gain or loss arising from (or treated as arising from) the sale or redemption of shares of the Fund is considered capital gain or loss (long-term capital gain or loss if the shares were held for longer than one year). However, any capital loss arising from the sales or redemption of shares held for six months or less is disallowed to the extent of the amount of exempt-interest dividends received on such shares and (to the extent not disallowed) is treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income under current rules.

If a shareholder a) incurs a sales charge in acquiring shares of a Fund, b) disposes of such shares less than 91 days after they are acquired, and c) subsequently acquires shares of a Fund or another fund at a reduced sales charge pursuant to a right to reinvest at such reduced sales charge acquired in connection with the acquisition of the shares disposed of, then the sales charge on the shares disposed of (to the extent of the reduction in the sales charge on the shares subsequently acquired) shall not be taken into account in determining gain or loss on the shares disposed of but shall be treated as incurred on the acquisition of the shares subsequently acquired.

Shareholders should consult their own tax advisors as to the federal, state and local tax consequences of ownership of shares of the Funds in its particular circumstances.

<u>Qualification as a Regulated Investment Company</u>

Each Fund intends to qualify annually to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "IRC"), by satisfying certain requirements prescribed by Subchapter M of the IRC. To qualify as a RIC, a Fund must invest in assets that produce types of income specified in the IRC ("Qualifying 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, a Fund's ability to invest in certain derivatives, swaps, commodity-linked derivatives, and other commodity/natural resource-related securities may be restricted. Further, if a Fund does invest 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, a Fund must satisfy certain diversification tests under the IRC to qualify as a RIC. If a Fund fails to qualify as a RIC, 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.

<u>International Funds</u>

Some foreign securities purchased by the Fund may be subject to foreign taxes that could reduce the yield on such securities. The amount of such foreign taxes is expected to be insignificant. The Fund may from year to year make an election to pass through such taxes to shareholders. If such election is not made, any foreign taxes paid or accrued will represent an expense to the Fund that will reduce its investment company taxable income.

Under the Foreign Account Tax Compliance Act (FATCA), the Fund may be required to withhold a 30% tax on (a) dividends paid by the Fund and (b) certain capital gain distributions and/or the proceeds arising from the sale of the Fund shares paid by the Fund after December 31, 2018, to certain foreign entities, referred to as foreign financial institutions or non-financial foreign entities, that fail to comply (or be deemed compliant) with extensive new reporting and withholding requirements designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. The IRS recently issued proposed regulations indicating its intent to eliminate the 30% withholding tax on gross proceeds. The Fund may disclose the information that it receives from its shareholders to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of the Fund fails to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.

<u>Futures Contracts and Options</u> 

As previously discussed, some of the Funds invest in futures contracts or options thereon, index options, or options traded on qualified exchanges. 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, a Fund must recognize any unrealized gains and losses on such positions held at the end of the fiscal year. A 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 Code may require the deferral of realized losses to the extent that a Fund has unrealized gains in certain offsetting positions at the end of the fiscal year. The Code 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.

**PORTFOLIO HOLDINGS DISCLOSURE** 

The portfolio holdings of each Fund are publicly disseminated each day the Fund is open for business through financial reporting and news services, including publicly accessible Internet websites. In addition, for in-kind creations for the Funds, a basket composition file, which includes the security names and share quantities to deliver in exchange for Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the Exchange via the National Securities Clearing Corporation ("NSCC"). The basket represents one Creation Unit of the Funds.

Certain Entities may receive information regarding the creation unit portfolio not available to other current or prospective Fund shareholders in connection with the dissemination of information necessary for transactions in Creation Units. For this purpose, "Entities" are generally limited to NSCC members, subscribers to various fee-based subscription services, large institutional investors (known as "Authorized Participants") that have been authorized by the Distributor to purchase and redeem large blocks of shares pursuant to legal requirements, market makers, and other institutional market participants and entities that provide information or transactional services.

Access to information concerning the Funds' portfolio holdings may be permitted at other times to personnel of third party service providers, including the Funds' custodian, transfer agent, auditors and counsel, as may be necessary to conduct business in the ordinary course in a manner consistent with such service providers' agreements with the Trust, on behalf of the Funds.

In addition to the permitted disclosures described above, each Fund is required to file its portfolio holdings with the SEC for each fiscal quarter on Form N-CSR (with respect to each annual period and semi-annual period) and Form N-PORT (with respect to the first and third quarters of the Fund's fiscal year). Shareholders may obtain a Fund's Forms N-CSR and N-PORT filings (when available) on the SEC's website at www.sec.gov. The Fund will also provide such documents without charge upon request.

**PROXY VOTING POLICIES AND PROCEDURES**

The Board has delegated responsibility for decisions regarding proxy voting for securities held by each Fund to PGI. PGI will vote such proxies in accordance with its proxy policies and procedures, which have been reviewed by the Board, and which are found in Appendix A. Any material changes to the proxy policies and procedures will be submitted to the Board for approval.

For Funds that participate in a securities lending program, the voting rights for securities that are loaned are transferred to the borrower. Therefore, the lender (i.e., a Fund) is not entitled to vote the loaned securities, unless it recalls those securities. Those managing the Fund's investments may recall securities for voting purposes when they reasonably believe the ability to vote such securities outweighs the additional revenue received if such securities were not recalled.

The Funds had not yet commenced operations as of the date of this SAI, and, as a result, the Funds had not voted any proxies relating to portfolio securities. Information regarding how the Funds voted proxies relating to portfolio securities during the 12-month period ending June 30, 2026, will be available, without charge, upon request, by calling 1-800-222-5852, sending an email request to prospectus@PrincipalETFs.com, or by accessing the Funds' Form N-PX (when available) on the Fund's website at www.PrincipalAM.com/ETFProspectuses or the SEC website at www.sec.gov.

**FINANCIAL STATEMENTS**

Because the Funds had not yet commenced operations as of the date of this SAI, financial statements are not available.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Ernst & Young LLP, 700 Nicollet Mall, Suite 500, Minneapolis, MN 55402, is the independent registered public accounting firm for the Principal Funds.

**CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES**

The Funds had not yet commenced operations as of the date of this SAI, and, as a result, there were no persons who own of record or beneficially 5% or more of the outstanding Shares of the Funds as of that date.

The Trust's Bylaws set the quorum requirement (a quorum must be present at a meeting of shareholders for business to be transacted). Those Bylaws state that a quorum is the presence in person or by proxy of the holders of one-third of the shares of the capital stock of the Trust, or when the meeting relates to a certain Fund, that Fund, issued and outstanding and entitled to vote on the record date.

Certain proposals presented to shareholders for approval require the vote of a "majority of the outstanding voting securities," which is a term defined in the 1940 Act to mean, with respect to a Fund, the affirmative vote of the lesser of 1) 67% or more of the voting securities of the Fund present at the meeting of that Fund, if the holders of more than 50% of the outstanding voting securities of the Fund are present in person or by proxy, or 2) more than 50% of the outstanding voting securities of the Fund.

The Fund's Declaration of Trust states that no shareholder of a share class may bring a derivative action with respect to such class unless holders of at least ten percent of the outstanding shares of that class join in the bringing of such action. The Declaration of Trust also generally requires that such shareholders first make a pre-suit demand and undertake to reimburse the Trust for the expense of any counsel or advisors used when considering the merits of the demand in case the Board determines not to bring such action. Following receipt of the demand, the Board must be afforded a reasonable amount of time to investigate and consider the demand. In each case, these requirements do not apply to shareholder derivative claims arising under the federal securities laws to the extent that any such federal securities laws, rules, or regulations do not permit such application.

Unless the Trust consents in writing to the selection of an alternative forum, the sole and exclusive forum for these matters shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants. This exclusive forum provision has the potential risk to cause shareholders to bring suit in an inconvenient and less favorable forum.

Reference should be made to the Declaration of Trust and By-Laws on file with the SEC for the full text of these provisions.

**Management Ownership**

Because the Funds had not yet commenced operations as of the date of this SAI, the Board Members and officers of the Trust, as a group, did not own any of the outstanding shares of any of the Funds.

**PORTFOLIO MANAGER DISCLOSURE** 

This section contains information about portfolio managers and the other accounts they manage, their compensation, and their ownership of securities. The "Ownership of Securities" tables reflect the portfolio managers' beneficial ownership, which means a direct or indirect pecuniary interest. For information about potential material conflicts of interest, see Brokerage Allocation and Other Practices - Conflicts of Interest and Allocation of Trades.

**Advisor: Principal Global Investors, LLC**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed<sup>(1)</sup>** | **Other Accounts Managed<sup>(1)</sup>** | **Other Accounts Managed<sup>(1)</sup>** | **Other Accounts Managed<sup>(1)</sup>** |
| **Portfolio Manager and ETFs** | **Total Number**<br> **of Accounts** | **Total Assets**<br> **in the Accounts** | **Number of <br> Accounts that base <br> the Advisory Fee <br> on Performance** | **Total Assets of the<br> Accounts that base<br> the Advisory Fee** <br> **on Performance** |
| **Jeff Callahan**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Jeff Callahan**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Jeff Callahan**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Jeff Callahan**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Jeff Callahan**: Principal Inflation Protection ETF, Principal Long Duration ETF |
| Registered investment companies | 6 | $21.4 billion | 0 | $0 |
| Other pooled investment vehicles | 5 | $17.2 billion | 0 | $0 |
| Other accounts | 21 | $739.1 million | 1 | $403.9 million |
| **Zach Gassmann**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Zach Gassmann**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Zach Gassmann**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Zach Gassmann**: Principal Inflation Protection ETF, Principal Long Duration ETF | **Zach Gassmann**: Principal Inflation Protection ETF, Principal Long Duration ETF |
| Registered investment companies | 13 | $4.5 billion | 0 | $0 |
| Other pooled investment vehicles | 9 | $4.7 billion | 0 | $0 |
| Other accounts | 11 | $3.0 billion | 0 | $0 |
| **Jason Haigh**: Principal Securitized Debt ETF |  |  |  |  |
| Registered investment companies | 3 | $121.2 million | 0 | $0 |
| Other pooled investment vehicles | 6 | $347.7 million | 0 | $0 |
| Other accounts | 19 | $3.6 billion | 0 | $0 |
| **Laura Rank**: Principal CLO ETF, Principal Securitized Debt ETF | **Laura Rank**: Principal CLO ETF, Principal Securitized Debt ETF | **Laura Rank**: Principal CLO ETF, Principal Securitized Debt ETF | **Laura Rank**: Principal CLO ETF, Principal Securitized Debt ETF | **Laura Rank**: Principal CLO ETF, Principal Securitized Debt ETF |
| Registered investment companies | 5 | $127.6 million | 0 | $0 |
| Other pooled investment vehicles | 8 | $368.3 million | 0 | $0 |
| Other accounts | 21 | $3.6 billion | 0 | $0 |
| **Jed Weirup**: Principal CLO ETF, Principal Securitized Debt ETF | **Jed Weirup**: Principal CLO ETF, Principal Securitized Debt ETF | **Jed Weirup**: Principal CLO ETF, Principal Securitized Debt ETF | **Jed Weirup**: Principal CLO ETF, Principal Securitized Debt ETF | **Jed Weirup**: Principal CLO ETF, Principal Securitized Debt ETF |
| Registered investment companies | 2 | $6.4 million | 0 | $0 |
| Other pooled investment vehicles | 2 | $20.6 million | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |

---

<sup>(1)</sup> Information as of February 28, 2026.

**Compensation**

PGI offers the Funds' investment team a competitive compensation structure that is evaluated annually relative to other global asset management firms to ensure its continued competitiveness and alignment with industry best practices. The objective of the structure is to offer market competitive compensation that aligns individual and team contributions with firm and client performance objectives in a manner that is consistent with industry standards and business results.

Compensation for each Fund's investment team is comprised of base salary and variable incentive components. As team members advance in their careers, the variable component increases in its proportion commensurate with responsibility levels. The variable component is designed to reinforce delivery of investment performance, firm performance, team collaboration, regulatory compliance, operational excellence, client retention, and client satisfaction. Investment performance is measured on a pre-tax basis against relative client benchmarks and peer groups over one-year, three-year, and five-year periods, calculated quarterly, reinforcing a longer-term orientation.

Payments under the variable incentive plan may be in the form of cash or a combination of cash and deferred compensation. The amount of variable compensation delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

**Ownership of Securities<sup>(1)</sup>**

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **ETFs Managed by Portfolio Manager** | **Dollar Range of Securities Owned <br> by the Portfolio Manager** |
| Jeff Callahan | Principal Inflation Protection ETF | None |
| Jeff Callahan | Principal Long Duration ETF | None |
| Zach Gassmann | Principal Inflation Protection ETF | None |
| Zach Gassmann | Principal Long Duration ETF | None |
| Zach Gassmann | Principal Securitized Debt ETF | None |
| Jason Haigh | Principal Securitized Debt ETF | None |
| Laura Rank | Principal CLO ETF | None |
| Laura Rank | Principal Securitized Debt ETF | None |
| Jed Weirup | Principal CLO ETF | None |
| Jed Weirup | Principal Securitized Debt ETF | None |

---

 

<sup>(1)</sup> The Funds had not yet commenced operations as of the date of this SAI. As a result, the portfolio managers owned no securities issued by the Funds as of that date.

**APPENDIX A – PROXY VOTING POLICIES**

The proxy voting policies applicable to each Fund appear in the following order:

The proxy voting policy for the Principal Funds is first, followed by PGI's proxy voting policy.

**Proxy Voting Policies and Procedures For Principal Funds, Inc. ("PFI") Principal Variable Contracts Funds, Inc.("PVC") Principal Exchange-Traded Funds ("PETF")**

(each a "Fund" and together "the Principal Funds")

The Board has delegated responsibility for decisions regarding proxy voting for securities held by each Fund to Principal Global Investors ("PGI") or to the Fund's sub-advisor, as appropriate. PGI and each sub-advisor will vote such proxies in accordance with its proxy policies and procedures, which have been reviewed by the Fund's Board. Any material changes to the proxy policies and procedures will be submitted to the Board for approval.

Funds that operate as funds of funds invest in shares of other Funds of PFI and PETF. PGI is authorized to vote proxies related to the underlying funds. If an underlying fund holds a shareholder meeting, in order to avoid any potential conflict of interest, PGI will vote shares of such fund on any proposal submitted to the fund's shareholders in the same proportion as the votes of other shareholders of the underlying fund.

For Funds that participate in a securities lending program, the voting rights for securities that are loaned are transferred to the borrower. Therefore, the lender (i.e., a Fund) is not entitled to vote the loaned securities, unless it recalls those securities. Those managing the Fund's investments may recall securities for voting purposes when they reasonably believe the ability to vote such securities outweighs the additional revenue received if such securities were not recalled.

The Funds have a policy prohibiting investment in PFG securities except for those Funds that track an index and are permitted to do so under SEC no-action relief. If any such securities are owned in any of the Funds' portfolios, the Investment Adviser will vote according to third-party guidelines. PGI has a policy to not buy securities of affiliated entities in the portfolios they manage.

Further, for PVC, Principal Life votes each Fund's shares allocated to each of its registered separate accounts and attributable to variable annuity contracts or variable life insurance policies participating in the separate accounts. The shares are voted in accordance with instructions received from contract holders, policy owners, participants, and annuitants. Other shares of each Fund held by each separate account, including shares for which no timely voting instructions are received, are voted in proportion to the instructions that are received with respect to contracts or policies participating in that separate account. Principal Life will vote the shares based upon the instructions received from contract owners, regardless of the number of contract owners who provide such instructions. A potential effect of this proportional voting is that a small number of contract owners may determine the outcome of a shareholder vote if only a small number of contract owners provide voting instructions. Shares of each of the Funds held in the general account of Principal Life or in the unregistered separate accounts are voted in proportion to the instructions that are received with respect to contracts and policies participating in its registered and unregistered separate accounts. If Principal Life determines, under applicable law, that a Fund's shares held in one or more separate accounts or in its general account need not be voted according to the instructions that are received, it may vote those Fund shares in its own right. Shares held by retirement plans are voted in accordance with the governing documents of the plans.

Each quarter, the adviser or sub-adviser must provide to the Principal Funds:

1. Written affirmation that all proxies voted during the preceding calendar quarter, other than those specifically identified by the adviser or sub-adviser, were voted in a manner consistent with the adviser's or sub-adviser's voting policies and procedures. In order to monitor the potential effect of conflicts of interest of an adviser or sub-adviser, the adviser or sub-adviser will identify any proxies the adviser or sub-adviser voted in a manner inconsistent with its policies and procedures. The adviser or sub-adviser shall list each vote, explain why the adviser or sub-adviser voted in a manner contrary to its policies and procedures, state whether the adviser or sub-adviser's vote was consistent with the recommendation to the adviser or sub-adviser of a third-party and, if so, identify the third-party; and

2. Written notification of any material
changes to the adviser's or sub-adviser's proxy voting policies and procedures made during the preceding calendar quarter.

Annually, the adviser or sub-adviser must provide to the Principal Funds, no later than July 31, their proxy voting data for each vote cast during the 12-month period ended June 30 for each Fund portfolio or portion of Fund portfolio for which it serves as investment adviser, in a format acceptable to Fund management.

**Principal Global Investors, LLC** 

Proxy Voting Policies and Procedures

March 2025

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**Introduction**

Principal Global Investors, LLC (doing business as Principal Asset Management) is an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Investment Advisers Act of 1940 (the "Advisers Act"). As a registered investment adviser, Principal Asset Management has a fiduciary duty to act in the best interests of its clients. Principal Asset Management recognizes that this duty requires it to vote client securities, for which it has voting power on the applicable record date, in a timely manner and make voting decisions that are in the best interests of its clients. This document, the Principal Asset Management Proxy Voting Policies and Procedures (the "Policy"), is intended to comply with the requirements of the Investment Advisers Act of 1940, the Investment Company Act of 1940 and the Employee Retirement Income Security Act of 1974 applicable to the voting of the proxies of both US and non- US issuers on behalf of clients of Principal Asset Management who have delegated such authority and discretion.

**Relationship between Investment Strategy, Sustainable Investing and Proxy Voting**

Principal Asset Management has a fiduciary duty to make investment decisions that are in its clients' best interests to maximize the value of their shares. Proxy voting is an important part of the process through which Principal Asset Management can support strong corporate governance structures, shareholder rights and transparency. Principal Asset Management also believes a company's positive environmental and social practices may reduce risk and, in turn, influence the value of a company. Principal Asset Management may take these factors into consideration, alongside other non-sustainability factors, when voting proxies in its effort to seek the best economic outcome for its clients. Shareholder proposals often address matters that are in direct conflict with the opinions of company management. As a result, we believe additional scrutiny is required and, therefore, all shareholder proposals are escalated to the investment teams for a final voting decision.

**Roles and Responsibilities**

*<u>Role of the Proxy Voting Committee</u>*

Principal Asset Management Proxy Voting Committee (the "Proxy Voting Committee") shall (i) oversee the voting of proxies and the Proxy Advisory Firm, (ii) where necessary, make determinations as to how to instruct the vote on certain specific proxies, (iii) verify ongoing compliance with the Policy, (iv) review the business practices of the Proxy Advisory Firm and (v) evaluate, maintain, and review the Policy on an annual basis. The Proxy Voting Committee is comprised of representatives of each investment team and a representative from Principal Asset Management Risk, Legal, Operations, and Compliance will be available to advise the Proxy Voting Committee but are non-voting members. The Proxy Voting Committee may designate one or more of its members to oversee specific, ongoing compliance with respect to the Policy and may designate personnel to instruct the vote on proxies on behalf the Principal Asset Management clients (collectively, "Authorized Persons").

The Proxy Voting Committee shall meet at least four times per year, and as necessary to address special situations.

*Principal Global Investors, LLC ("PGI") began using Principal Asset Management ("Principal AM") as a DBA (doing business as) name and PGI will be referenced throughout this document as Principal AM (or "the Firm"). While Principal AM may include other entities, this Charter refers specifically to PGI and Principal Real Estate*.

*<u>Role of Portfolio Management</u>*

While the Proxy Voting Committee establishes the Guidelines and Procedures, the Proxy Voting Committee does not direct votes for any client except in certain cases where a conflict of interest exists. Each investment team is responsible for determining how to vote proxies for those securities held in the portfolios their team manages. While investment teams generally vote consistently with the Guidelines, there may be instances where their vote deviates from the Guidelines. In those circumstances, the investment team will work within the Exception Process. In some instances, the same security may be held by more than one investment team. In these cases, Principal Asset Management may vote differently on the same matter for different accounts as determined by each investment team.

**Proxy Voting Guidelines**

The Proxy Voting Committee and Chief Investment Officer, on an annual basis, or more frequently as needed, will establish a working group to review draft proxy voting guidelines recommended to the Committee ("Draft Guidelines"). The Guidelines Working Group will collect feedback and propose Draft Guidelines for adoption by the Committee. Each investment team

maintains autonomy to select the most correlated Guidelines for their strategies. Collectively, these guidelines will constitute the current Proxy Voting Guidelines of Principal Asset Management and may change from time to time (the "Guidelines"). The Proxy Voting Committee has the obligation to determine that, in general, voting proxies pursuant to the Guidelines is in the best interests of clients. Exhibit A (Proxy Voting Philosophy Summary) provides an overview of our current philosophy underlying our three core Guidelines; Base, Sustainable and Board Aligned. Full overviews of each of these custom Guidelines are maintained and available.

There may be instances where proxy votes will not be in accordance with the Guidelines. Clients may instruct Principal Asset Management to utilize a different set of guidelines, request specific deviations, or directly assume responsibility for the voting of proxies. In addition, Principal Asset Management may deviate from the Guidelines on an exception basis if the investment team or Principal Asset Management has determined that it is the best interest of clients in a particular strategy to do so, or where the Guidelines do not direct a particular response and instead list relevant factors. Any such a deviation will comply with the Exception Process which shall include a written record setting out the rationale for the deviation.

The subject of the proxy vote may not be covered in the Guidelines. In situations where the Guidelines do not provide a position, Principal Asset Management will consider the relevant facts and circumstances of a particular vote and then vote in a manner Principal Asset Management believes to be in the clients' bests interests. In such circumstance, the analysis will be documented in writing and periodically presented to the Proxy Voting Committee. To the extent that the Guidelines do not cover potential voting issues, Principal Asset Management may consider the spirit of the Guidelines and instruct the vote on such issues believed to be in the best interests of the client.

**Use of Proxy Advisory Firms**

Principal Asset Management has retained one or more third-party proxy service provider(s) (the "Proxy Advisory Firm") to provide recommendations for proxy voting guidelines, information on shareholder meeting dates and proxy materials, translate proxy materials printed in a foreign language, provide research on proxy proposals, operationally process votes in accordance with the Guidelines on behalf of the clients for whom Principal Asset Management has proxy voting responsibility, and provide reports concerning the proxies voted ("Proxy Voting Services"). Although Principal Asset Management has retained the Proxy Advisory Firm for Proxy Voting Services, the entity remains responsible for proxy voting decisions. Principal Asset Management has designed the Policy to oversee and evaluate the Proxy Advisory Firm, including with respect to the matters described below, to support its voting in accordance with this Policy.

*<u>Oversight of Proxy Advisory Firms</u>*

Prior to the selection of any new Proxy Advisory Firm and annually thereafter or more frequently if deemed necessary by Principal Asset Management, the Proxy Voting Committee will consider whether the Proxy Advisory Firm: (a) has the capacity and competency to adequately analyze proxy issues and provide the Proxy Voting Services the Proxy Advisory Firm has been engaged to provide and (b) can make its recommendations in an impartial manner, in consideration of the best interests of Principal Asset Management's clients, and consistent with its voting policies. Such considerations may include, depending on the Proxy Voting Services provided, the following: (i) periodic sampling of votes pre-populated by the Proxy Advisory Firm's systems as well as votes cast by the Proxy Advisory Firm to review that the Guidelines adopted by Principal Asset Management are being followed; (ii) onsite visits to the Proxy Advisory Firm office and/or discussions with the Proxy Advisory Firm to determine whether the Proxy Advisory Firm continues to have the capacity and competency to carry out its proxy obligations to Principal Asset Management (iii) a review of those aspects of the Proxy Advisory Firm's policies, procedures, and methodologies for formulating voting recommendations that Principal Asset Management considers material to Proxy Voting Services, including factors considered, with a particular focus on those relating to identifying, addressing and disclosing potential conflicts of interest (including potential conflicts related to the provision of Proxy Voting Services, activities other than Proxy Voting Services, and those presented by affiliation such as a controlling shareholder of the Proxy Advisory Firm) and monitoring that materially current, accurate, and complete information is used in creating recommendations and research; (iv) requiring the Proxy Advisory Firm to notify Principal Asset Management if there is a substantive change in the Proxy Advisory Firm's policies and procedures or otherwise to business practices, including with respect to conflicts, information gathering and creating voting recommendations and research, and reviewing any such change(s); (v) a review of how and when the Proxy Advisory Firm engages with, and receives and incorporates input from, issuers, the Proxy Advisory Firm's clients and other third-party information sources; (vi) assessing how the Proxy Advisory Firm considers factors unique to a specific issuer or proposal when evaluating a matter subject to a shareholder vote; (vii) in case of an error made by the Proxy Advisory Firm, discussing the error with the Proxy Advisory Firm and determining whether appropriate corrective and preventive action is being taken; and (viii) assessing whether the Proxy

Advisory Firm appropriately updates its methodologies, guidelines, and voting recommendations on an ongoing basis and incorporates input from issuers and Proxy Advisory Firm clients in the update process. In evaluating the Proxy Advisory Firm, Principal Asset Management may also consider the adequacy and quality of the Proxy Advisory Firm's staffing, personnel, and/or technology.

**Procedures for Voting Proxies**

To increase the efficiency of the voting process, Principal Asset Management utilizes the Proxy Advisory Firm to act as its voting agent for its clients' holdings. Issuers initially send proxy information to the clients' custodians.

Principal Asset Management instructs these custodians to direct proxy related materials to the Proxy Advisory Firm. The Proxy Advisory Firm provides Principal Asset Management with research related to each resolution. Principal Asset Management analyzes relevant proxy materials on behalf of their clients and seek to instruct the vote (or refrain from voting) proxies in accordance with the Guidelines. A client may direct Principal Asset Management to vote for such client's account differently than what would occur in applying the Policy and the Guidelines. Principal Asset Management may also agree to follow a client's individualized proxy voting guidelines or otherwise agree with a client on particular voting considerations. Principal Asset Management seeks to vote (or refrain from voting) proxies for its clients in a manner determined to be in their best financial interests. In some cases, Principal Asset Management may determine that it is in the best interests of clients to refrain from exercising the clients' proxy voting rights. Principal Asset Management may determine that voting is not in the best interests of a client and refrain from voting if the costs, including the opportunity costs, of voting would, in the view of Principal Asset Management, exceed the expected benefits of voting to the client.

**Procedures for Proxy Issues within the Guidelines**

Where the Guidelines address the proxy matter being voted on, the Proxy Advisory Firm will generally process all proxy votes in accordance with the Guidelines. In the case of Shareholder Proposals for actively held securities, all ballots will be escalated to the applicable investment team to make a case-by-case determination of the vote decision. The applicable investment team may provide instructions to vote contrary to the Guidelines in their discretion and with sufficient rationale documented in writing to seek to maximize the value of the client's investments or is otherwise in the client's best interest. This rationale will be submitted to Principal Asset Management Compliance to approve and once approved administered by Principal Asset Management Operations. This process will follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which Principal Asset Management exercises voting authority. In certain cases, a client may have elected to have Principal Asset Management administer a custom policy which is unique to the Client. If Principal Asset Management is also responsible for the administration of such a policy, in general, except for the specific policy differences, the procedures documented here will also be applicable, excluding reporting and disclosure procedures.

**Procedures for Proxy Issues Outside the Guidelines**

To the extent that the Guidelines do not cover potential voting issues, the Proxy Advisory Firm will seek direction from Principal Asset Management. Principal Asset Management may consider the spirit of the Guidelines and instruct the vote on such issues in a manner believed to be in the best interests of the client. Although this not an exception to the Guidelines, this process will also follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which Principal Asset Management exercises voting discretion, which shall include instances where issues fall outside the Guidelines.

**Securities Lending**

Some clients may have entered into securities lending arrangements with agent lenders to generate additional revenue. If a client participates in such lending, the client will need to inform Principal Asset Management as part of their contract with Principal Asset Management if they require Principal Asset Management to take actions in regard to voting securities that have been lent. If not commemorated in such agreement nor dictated by regulatory requirements, Principal Asset Management will not recall securities and as such, they will not have an obligation to direct the proxy voting of lent securities.

In the case of lending, Principal Asset Management maintains one share for each company security out on loan by the client. Principal Asset Management will vote the remaining share in these circumstances.

In cases where Principal Asset Management does not receive a solicitation or enough information within a sufficient time (as reasonably determined by Principal Asset Management) prior to the proxy-voting deadline, Principal Asset Management or the Proxy Advisory Firm may be unable to vote.

**Regional Variances in Proxy Voting**

Principal Asset Management utilizes the Policy and Guidelines for both US and non-US clients, and there are some significant differences between voting U.S. company proxies and voting non-U.S. company proxies. For U.S. companies, it is usually relatively easy to vote proxies, as the proxies are typically received automatically and may be voted by mail or electronically. In most cases, the officers of a U.S. company soliciting a proxy act as proxies for the company's shareholders.

With respect to non-U.S. companies, we make reasonable efforts to vote most proxies and follow a similar process to those in the U.S. However, in some cases it may be both difficult and costly to vote proxies due to local regulations, customs or other requirements or restrictions, and such circumstances and expected costs may outweigh any anticipated economic benefit of voting. The major difficulties and costs may include: (i) appointing a proxy; (ii) obtaining reliable information about the time and location of a meeting; (iii) obtaining relevant information about voting procedures for foreign shareholders; (iv) restrictions on trading securities that are subject to proxy votes (share-blocking periods); (v) arranging for a proxy to vote locally in person; (vi) fees charged by custody banks for providing certain services with regard to voting proxies; and (vii) foregone income from securities lending programs. In certain instances, it may be determined by Principal Asset Management that the anticipated economic benefit outweighs the expected cost of voting. Principal Asset Management intends to make their determination on whether to vote proxies of non-U.S. companies on a case- by-case basis. In doing so, Principal Asset Management shall evaluate market requirements and impediments, including the difficulties set forth above, for voting proxies of companies in each country. Principal Asset Management periodically reviews voting logistics, including costs and other voting difficulties, on a client by client and country by country basis, in order to determine if there have been any material changes that would affect Principal Asset Management's determinations and procedures.

**Conflicts of Interest**

Principal Asset Management recognizes that, from time to time, potential conflicts of interest may exist. In order to avoid any perceived or actual conflict of interest, the procedures set forth below have been established for use when Principal Asset Management encounters a potential conflict to ensure that its voting decisions are based on maximizing shareholder value and are not the product of a conflict.

*<u>Addressing Conflicts of Interest – Exception Process</u>*

Prior to voting contrary to the Guidelines, the relevant investment team must complete and submit a report to Principal Asset Management Compliance setting out the name of the security, the issue up for vote, a summary of the Guidelines' recommendation, the vote changes requested and the rational for voting against the Guidelines' recommendation. The member of the investment team requesting the exception must attest to compliance with Principal's Code of Conduct and the has an affirmative obligation to disclose any known personal or business relationship that could affect the voting of the applicable proxy. Principal Asset Management Compliance will approve or deny the exception in consultation, if deemed necessary, with the Legal.

If Principal Asset Management Compliance determines that there is no potential material conflict exists, the Guidelines may be overridden. If Principal Asset Management Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee. The Proxy Voting Committee will consider the facts and circumstances of the pending proxy vote and the potential or actual material conflict and decide by a majority vote as to how to vote the proxy – i.e., whether to permit or deny the exception.

In considering the proxy vote and potential material conflict of interest, the Proxy Voting Committee may review the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;■ The percentage of outstanding
securities of the issuer held on behalf of clients by Principal Asset Management;

&nbsp;&nbsp;&nbsp;&nbsp;■ The nature of the relationship
of the issuer with the Principal Asset Management, its affiliates or its executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether there has been any attempt
to directly or indirectly influence the investment team's decision;

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether the direction of the
proposed vote would appear to benefit Principal Asset Management or a related party; and/or

&nbsp;&nbsp;&nbsp;&nbsp;■ Whether an objective decision
to vote in a certain way will still create a strong appearance of a conflict.

To further address potential conflicts of interest for any proxy votes specific to Principal Financial Group common stock, the exception process is not applicable. In the case of any proprietary electronically traded funds ("ETF"s), mutual funds or

other comingled proprietary vehicles, PGI will vote in the same proportion as all other voting shareholders of the underlying fund/vehicle, which is referred to as echo voting, and the exception process is not applicable If echo voting is not available or operationally feasible, Principal Asset Management may abstain from voting.

In the event that the Proxy Advisor Firm itself has a conflict and thus is unable to provide a recommendation, the investment team may vote in accordance with the recommendation of another independent service provider, if available. If a recommendation from an independent service provider other than the Proxy Advisor Firm is not available, the investment team will follow the Exception Process. Principal Asset Management Compliance will review the form and if it determines that there is no potential material conflict mandating a voting recommendation from the Proxy Voting Committee, the investment team may instruct the Proxy Advisory Firm to vote the proxy issue as it determines is in the best interest of clients. If Principal Asset Management Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee for consideration as outlined above.

**Availability of Proxy Voting Information and Recordkeeping**

*<u>Disclosure</u>*

Principal Asset Management publicly discloses on our website <u>Principal Asset Management Vote Disclosure</u> The interactive voting dashboard, allows for dynamic disclosure of the manner in which votes were cast, including details related to (i) votes against management, (ii) abstentions, (iii) vote rationale, and (iii) voting metrics. For more information, Clients may contact Principal Asset Management for details related to how Principal Asset Management has voted with respect to securities held in the Client's account. On request, Principal Asset Management will provide clients with a summary of Principal Asset Management's proxy voting guidelines, process and policies and will inform the clients how they can obtain a copy of the complete Proxy Voting Policies and Procedures upon request. Principal Asset Management will also include such information described in the preceding two sentences in Part 2A of its Form ADV.

*<u>Recordkeeping</u>*

Principal Asset Management will keep records of the following items: (i) the Guidelines, (ii) the Proxy Voting Policies and Procedures; (iii) proxy statements received regarding client securities (unless such statements are available on the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); (iv) records of votes they cast on behalf of clients, which may be maintained by a Proxy Advisory Firm if it undertakes to provide copies of those records promptly upon request; (v) records of written client requests for proxy voting information and responses from Principal Asset Management (whether a client's request was oral or in writing); (vi) any documents prepared by Principal Asset Management that were material to making a decision how to vote, or that memorialized the basis for the decision; (vii) a record of any testing conducted on any Proxy Advisory Firm's votes; (viii) materials collected and reviewed by Principal Asset Management as part of its due diligence of the Proxy Advisory Firm; (ix) a copy of each version of the Proxy Advisory Firm's policies and procedures provided to Principal Asset Management; and (x) the minutes of the Proxy Voting Committee meetings. All of the records referenced above will be kept in an easily accessible place for at least the length of time required by local regulation and custom, and, if such local regulation requires that records are kept for less than six years from the end of the fiscal year during which the last entry was made on such record, we will follow the US rule of six years. If the local regulation requires that records are kept for more than six years, we will comply with the local regulation. We maintain the vast majority of these records electronically.

**Appendix**

**Proxy Voting Philosophy**

Principal Asset Management's Proxy Voting Philosophy is built on an unwavering commitment of creating long- term value for our shareholders and investing in businesses sharing this commitment. While we think setting and executing corporate policies should generally rest with a company's board of directors and executive management, we also think shareholders play a critical role in holding these parties accountable. We take this responsibility seriously. Our policy is implemented globally, taking into consideration the relevant legal and regulatory requirements in each region.

Our philosophy is structured around four key themes:

&nbsp;&nbsp;&nbsp;&nbsp;• Board Structure and Composition

&nbsp;&nbsp;&nbsp;&nbsp;▪ Board Oversight of Risk and Strategy

▪ Board Oversight of Executive Selection and Compensation

▪ Shareholder Rights and Protections

The positions described below should be understood as principles underlying our general philosophy and not as strict requirements to be followed with respect to each and every proxy vote.

**Board Structure, Composition, and Accountability**

The philosophy of our active investment teams: Our clients, as shareholders, own the corporation. Boards of directors are accountable to them. Corporate management, in turn, is accountable to its board. As investors, we need to be comfortable delegating trust and responsibility to these parties – and these parties should have the appropriate discretion to manage a company's affairs with an awareness of the company's particular circumstances. We guide our proxy voting in this area to help ensure our clients are invested in companies with trustworthy and effective boards. Examples of relevant principals underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Independence</u> – A majority of board members are expected to be substantially independent from the company – not company executives,
 not key customers or suppliers, and not executives who sit on one another's boards. Non-independent board members should be
 prohibited from serving on key board committees such as audit, compensation, nominating and governance. In addition, board leadership
 should be independent of company management either through an independent chair or lead independent director with sufficient authority.

• <u>Board composition and selection</u> – A board must possess the fully array of skills and experience necessary to oversee and guide
 the company it serves. We expect boards to curate an inventory of necessary skills and experiences and ensure full representation
 across the board. For new board members, boards should recruit unbiased slates of candidates who reflect the skills needed by the
 board.

• <u>Board size</u> – A board should bring a wide range of relevant perspectives, incorporate skills aligning with business needs, and
 include enough members to ensure sufficient levels of independence for key committees.

• <u>Capacity and commitments of board members</u> – Board members should demonstrate a capacity to fulfill their roles and a commitment
 to the responsible discharge of their duties. This includes attendance of at least 75% of board meetings and participation in no
 more than four other public company boards.

• <u>Accountability</u> – As shareholder representatives, board members should be held to a high standard with their performance assessed on a regular
 basis. As such, shareholders should have the right to vote on the entire slate of directors on an annual basis.

**Board Oversight of Risk and Strategy**

The philosophy of our active investment teams: The oversight, guidance, and support a board of directors provides to a management team is critical to the execution of its long-term corporate strategy and ultimately, the creation of shareholder value. We expect boards to assist in identifying material risks to the company's strategy, disclosure practices, and execution and to provide risk mitigation insight and monitoring. Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Capital Structure</u> – Increases in authorized shares outstanding are generally accepted if the proposed authorization results in an increase in
 shares authorized of 10% or less over a 2-year period. Proposals to create, modify, or issue common and preferred stock are generally
 accepted if the rights of the issuance are not superior to the rights of the current shareholders, subject to the principal that
 the authorization increase is limited to 10% of less over a 2-year period.

• <u>Mergers and Acquisitions</u> – We expect boards to actively review potential targets and offers, assessing all such activities with shareholder value creation
 as the primary consideration. As investors, we recognize all merger and acquisition proposals are unique and should be assessed on
 their individual merit, including the deal premium, strategic rationale and possibility of competing offers.

• <u>Auditors</u> –
 A board of directors should oversee the company's third-party auditor to ensure an independent and accurate assessment of the
 company's financial position is being portrayed. This should include a regular review of auditor qualifications, independence
 and competency.

• <u>Climate Reporting</u> – We expect boards and managements to assess financially material climate risks to the business and, when relevant, provide
 the disclosure necessary for a reasonable investor to make informed decisions regarding potential impacts upon shareholder value.

**Board Oversight of Executive Selection and Compensation**

The philosophy of our active investment teams: A key aspect of a board of directors' governance responsibility is the support, selection and assessment of the management team. Boards should hold executives to clear value creation and be willing to make changes to management when shareholder value creation falls short of reasonable potential. Boards should also create and maintain formal succession plans to ensure continuity and minimize key person risk. Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Executive Pay</u> –
A board should have a clear philosophy on executive pay and maintain an independent compensation committee focused on attracting and retaining
executives who will drive shareholder value over time. Executives' pay and long-term performance should align executives with shareholders
through measures of financial performance relative to financial targets aligned with value generation, and the performance of relevant
peers. Likewise, we expect the board of directors to be aligned with shareholders through financial incentives and share ownership.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Stock Based Compensation</u> – We support the use of share-based incentive plans intended to increase the share ownership by management and align shareholder
interests with management. Such plans should take into consideration the dollar cost of the plans to shareholders and the appropriateness
of financial targets included in the plans. However, we believe that retroactive re-pricing of underwater options is indicative of poor
corporate governance and will generally vote in opposition to a repricing scheme.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Say on Pay Frequency</u> –
In order to ensure alignment between pay and performance, we support annual advisory votes to approve executive compensation.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Executive Selection and Succession</u> – We expect a board of directors to carry out a thorough executive selection process considering a range of qualified candidates
with a variety of skills and backgrounds. It is ultimately the responsibility of a board to select the candidate they think will best
generate long-term value for shareholders.

**Shareholder Rights and Protections**

The philosophy of our active investment teams: As investors, we view the protection of shareholder rights as integral to proper corporate governance and think major corporate changes require prior shareholder approval. We also recognize there are costs associated with shareholder proposals and think ownership thresholds are appropriate in many circumstances. We oppose all structural impediments to increasing shareholder value.

Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Shareholder Rights Plans "Poison Pills"</u> – We generally oppose the use of poison pills unless a "pill" is approved by shareholders and does
not hamper value creation.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Supermajority Voting</u> –
A majority vote of shareholders should be sufficient to approve items such as bylaws and acquisitions. Supermajority requirements have
the potential to erode the rights of minority shareholders and are viewed negatively.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Unequal Voting Rights</u> – We support equal voting rights and think voting power should be allocated in direct proportion to the shareholders' equity
ownership. Accordingly, we believe that dual share classes generally present more disadvantages than advantages to long-term investors
and will generally vote against proposals to create or continue such structures. Notable exceptions include Real Estate Investment Trusts.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Shareholder Rights</u> –
We think shareholders generally have the right to nominate directors, call special meetings and act without holding a meeting in certain
circumstances. However, we also recognize there is potential for abuse and therefore support reasonable ownership thresholds.

&nbsp;&nbsp;&nbsp;&nbsp;• <u>Capital Structure</u> –
The decision to issue or repurchase stock, issue debt or split shares is made by a board presumably with the intent of improving the overall
capital structure, investing in growth, reaching a broader investment audience, enhancing shareholder value, and/or managing challenging
liquidity/leverage circumstances. As such, we review these decisions on a case-by-case basis taking into consideration the degree of dilution
and impact on liquidity. Proposals to create, modify or issue common and preferred stock are generally accepted if the rights of the issuance
are not superior to the rights of current shareholders subject to the principal that an authorization increase is limited to 10% or less
over a 2-year period.

**A Note on Shareholder Proposals**

Shareholder Proposals are often company specific making a one-size fits all approach to voting suboptimal. For that reason, shareholder proposals are escalated to the active investment teams for case-by-case analysis and decision making. Voting decisions are made by weighing the financial materiality of the proposal against any opposing rationale from company management, with the ultimate determination driven by the economic best interest of shareholders. While votes are generally cast consistently across the investment teams, there may be situations where portfolio managers holding the same security disagree on what is in the best interests of their shareholders.

**Passive Strategy Voting**

Our passively managed strategies follow the same voting philosophy as our actively managed strategies. In the absence of a determination by our active investment teams, our passive strategies will typically vote in alignment with management. We think managements and boards of directors should have comprehensive insights into the company's long-term strategy and operations. This insight puts them in a sound position to determine the financial materiality of proposals and their alignment with the economic interest of shareholders in the absence of an evaluation by our active teams.

We execute this philosophy through our Proxy Voting Guidelines as overseen by our Proxy Voting committee. Strategies are aligned to one of our custom Guidelines - Base, Sustainable and Board Aligned. We provide clients with transparency into our voting history and rationale via our interactive website. In most strategies, clients may also choose to vote their own shares or request a custom set of vote guidelines aligning with their own specific requirements.

**PRINCIPAL EXCHANGE-TRADED FUNDS**

**PART C. OTHER INFORMATION**

**Item 28. Exhibits.**

Unless otherwise noted, documents containing Accession Numbers below have previously been filed with the Securities and Exchange Commission and are incorporated herein by reference.

(a) Articles
 of Incorporation

(1) [Certificate of Trust - Filed as Exhibit 99.(a)(i) on 02/06/2015 (Accession No. 0001572661-15-000008)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000008/etf-certoftrustxexhibit.htm)

(2) [Agreement and Declaration of Trust Instrument - Filed as Exhibit 99.(a)(ii) on 02/06/2015 (Accession No. 0001572661-15-000008)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000008/etf-declarationoftrustxexh.htm)

(b) By-laws

(1) [By-laws effective 06/09/2020 - Filed as Exhibit 99.(b) on 09/02/2020 (Accession No. 0001572661-20-000197)](https://www.sec.gov/Archives/edgar/data/1572661/000157266120000197/ex99b-etfbylaws060920.htm)

(c) Instruments
 Defining Rights of Security Holders

(1) Agreement
 and Declaration of Trust: Articles II, VIII, and IX - see Exhibit (a)(2) above; and By-laws: Articles 2, 3,
 8, and 9 - See Exhibit (b)(1) above.

(d) Investment
 Advisory Agreements

(1) a. [Amended and Restated Management Agreement with Principal Global Investors, LLC dated 11/01/2025 – Filed as Exhibit 99.(d)(1) on 10/27/2025 (Accession No. 0001572661-25-000149)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000149/a20251101-petfarmanagement.htm)

b. Amended
 and Restated Management Agreement with Principal Global Investors, LLC\*\*

(2) a. [Sub-Advisory Agreement with Principal Real Estate Investors, LLC dated 01/01/2024 - Filed as Exhibit 99.(d)(2)a on 08/16/2024 (Accession No. 0001572661-24-000036)](https://www.sec.gov/Archives/edgar/data/1572661/000157266124000036/petfex99d2bprincipal-reia_.htm)

b. [Amended and Restated Sub-Advisory Agreement with Spectrum Asset Management, Inc. dated 04/01/2026 - Filed as Exhibit 99.(d)(2)b on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/ex99d2bpetfspectrumarsub-a.htm)

(e) Underwriting
 Contracts

(1) a. [Distribution Agreement with ALPS Distributors, Inc. dated 04/16/2018 - Filed as Exhibit 99.(e)(I)i on 08/31/2018 (Accession No. 0001572661-18-000128)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000128/ex99eii-etfdistributionagm.htm)

b. [Distribution Agreement Amendment No. 1 with ALPS Distributors, Inc. dated 04/18/2018 - Filed as Exhibit 99.(e)(I)j on 08/31/2018 (Accession No. 0001572661-18-000128)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000128/ex99eij-etfdistributionagm.htm)

c. [Distribution Agreement Amendment No. 2 with ALPS Distributors, Inc. dated 06/25/2019 - Filed as Exhibit 99.(e)(I)c on 07/03/2019 (Accession No. 0001572661-19-000155)](https://www.sec.gov/Archives/edgar/data/1572661/000157266119000155/ex99eic-distagmtamend20625.htm)

d. [Distribution Agreement Amendment No. 3 with ALPS Distributors, Inc. dated 06/25/2019 - Filed as Exhibit 99.(e)(I)d on 07/03/2019 (Accession No. 0001572661-19-000155)](https://www.sec.gov/Archives/edgar/data/1572661/000157266119000155/ex99eid-distagmtamend30625.htm)

e. [Distribution Agreement Amendment No. 4 with ALPS Distributors, Inc. dated 06/16/2020 - Filed as Exhibit 99.(e)(1)e on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eie-distagmtamend40616.htm)

f. [Distribution Agreement Amendment No. 5 with ALPS Distributors, Inc. dated 06/10/2020 - Filed as Exhibit 99.(e)(1)f on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eif-distagmtamend50610.htm)

g. [Distribution Agreement Amendment No. 6 with ALPS Distributors, Inc. dated 08/19/2020 - Filed as Exhibit 99.(e)(1)g on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eig-distagmtamend60819.htm)

h. [Distribution Agreement Amendment No. 7 with ALPS Distributors, Inc. dated 12/16/2020 - Filed as Exhibit 99.(e)(1)h on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eih-distagmtamend71216.htm)

i. [Distribution Agreement Amendment No. 8 with ALPS Distributors, Inc. dated 01/22/2021 - Filed as Exhibit 99.(e)(1)i on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eii-distagmtagend80122.htm)

j. [Distribution Agreement Amendment No. 9 with ALPS Distributors, Inc. dated 03/25/2021 - Filed as Exhibit 99.(e)(1)j on 09/02/2021 (Accession No. 0001572661-21-000122)](https://www.sec.gov/Archives/edgar/data/1572661/000157266121000122/ex99eij-distagmtamend90325.htm)

k. [Distribution Agreement Amendment No. 10 with ALPS Distributors, Inc. dated 09/01/2021 - Filed as Exhibit 99.(e)(1)k on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99eik-distagmtamend10090.htm)

l. [Distribution Agreement Amendment No. 11 with ALPS Distributors, Inc. dated 11/30/2021 - Filed as Exhibit 99.(e)(1)l on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99eil-distagmtamend11113.htm)

m. [Distribution Agreement Amendment No. 12 with ALPS Distributors, Inc. dated 05/06/2022 - Filed as Exhibit 99.(e)(1)m on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99eim-distagmtamend12050.htm)

n. [Distribution Agreement Amendment No. 13 with ALPS Distributors, Inc. dated 07/15/2022 - Filed as Exhibit 99.(e)(1)(n) on 04/06/2023 (Accession No. 0001572661-23-000044)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000044/ex99ein-distagmtamend13071.htm)

o. [Distribution Agreement Amendment No. 14 with ALPS Distributors, Inc. dated 02/24/2023 - Filed as Exhibit 99.(e)(1)(o) on 04/06/2023 (Accession No. 0001572661-23-000044)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000044/ex99eio-distagmtamend14022.htm)

p. [Distribution Agreement Amendment No. 15 with ALPS Distributors, Inc. dated 06/30/2023 - Filed as Exhibit 99.(e)(1)p on 07/10/2023 (Accession No. 0001572661-23-000112)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000112/ex99eip-distagmtamend15063.htm)

q. [Distribution Agreement Amendment No. 16 with ALPS Distributors, Inc. dated 07/10/2023 - Filed as Exhibit 99.(e)(1)q on 10/26/2023 (Accession No. 0001572661-23-000177)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000177/ex99eiq-distagmtamend16071.htm)

r. [Distribution Agreement Amendment No. 17 with ALPS Distributors, Inc. dated 10/20/2023 - Filed as Exhibit 99. (e)(1)r on 10/26/2023 (Accession No. 0001572661-23-000177)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000177/ex99eir-distagmtamend17102.htm)

s. [Distribution Agreement Amendment No. 18 with ALPS Distributors, Inc. dated 08/07/2024 - Filed as Exhibit 99.(e)(1)s on 08/16/2024 (Accession No. 0001572661-24-000036)](https://www.sec.gov/Archives/edgar/data/1572661/000157266124000036/ex99e1sadi-18thamendmentto.htm)

t. [Distribution Agreement Amendment No. 19 with ALPS Distributors, Inc. dated 11/06/2024 - Filed as Exhibit 99.(e)(1)t on 01/08/2025 (Accession No. 0001572661-25-000006)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000006/ex99e1tpetf-alpsdistributi.htm)

u. [Distribution Agreement Amendment No. 20 with ALPS Distributors, Inc. dated 03/24/2025 - Filed as Exhibit 99.(e)(1)u on 06/09/2025 (Accession No. 0001572661-25-000081)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000081/distributionagreementamend.htm)

v. [Distribution Agreement Amendment No. 21 with ALPS Distributors, Inc. dated 11/01/2025 - Filed as Exhibit 99.(e)(1)(v) on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/ex99e1v20251101petf-alpsam.htm)

(2) [Form of Authorized Participant Agreement - Filed as Exhibit 99.(e)(ii) on 04/21/2015 (Accession No. 0001572661-15-000016)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000016/etf-formofpartagrmt.htm)

(f) Bonus
 or Profit Sharing Contracts - Not Applicable

(g) Custodian
 Agreements

(1) [Custodian Agreement with State Street Bank and Trust Company dated 05/21/2015 - Filed as Exhibit 99.(g) on 10/27/2015 (Accession No. 0001572661-15-000049)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000049/etf-custodianagreementx052.htm)

(2) [Custodian Agreement Amendment (letter) dated 06/28/2017 (Principal Spectrum Preferred Securities Active ETF) - Filed as Exhibit 99.(g)(vi) on 08/29/2017 (Accession No. 0001572661-17-000205)](https://www.sec.gov/Archives/edgar/data/1572661/000157266117000205/ex99gvi-custagmtltr062817.htm)

(3) [Custodian Agreement Amendment (letter) dated 09/29/2017 (Principal U.S. Mega-Cap Multi-Factor Index ETF) - Filed as Exhibit 99.(g)(viii) on 01/19/2018 (Accession No. 0001572661-18-000005)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000005/ex99gviii-custodianagmt092.htm)

(4) [Custodian Agreement Amendment (letter) dated 04/18/2018 (Principal Investment Grade Corporate Active ETF) - Filed as Exhibit 99.(g)(ix) on 08/31/2018 (Accession No. 0001572661-18-000128)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000128/ex99gix-custodianagmt041818.htm)

(5) [Custodian Agreement Amendment (letter) dated 06/15/2020 (Principal Spectrum Tax-Advantaged Dividend Active ETF) - Filed as Ex 99.(g)(xi) on 09/02/2020 (Accession No. 0001572661-20-000197)](https://www.sec.gov/Archives/edgar/data/1572661/000157266120000197/ex99gxi-custodianagmta.htm)

(6) [Custodian Agreement Amendment (letter) dated 03/22/2022 (Principal Real Estate Active Opportunities ETF) - Filed as Exhibit 99.(g)(13 on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99g13-custodianagmtamend.htm)

(8) [Custodian Agreement Amendment (letter) dated 07/12/2023 (Principal Focused Blue Chip ETF) - Filed as Exhibit 99.(g)(11) on 10/26/2023 (Accession No. 0001572661-23-000177)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000177/ex99g11-custodianagmtamend.htm)

(9) [Custodian Agreement Amendment (letter) dated 11/05/2024 (Principal International Equity ETF) - Filed as Exhibit 99.(g)(8) on 01/08/2025 (Accession No. 0001572661-25-000006)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000006/ex99g8principaletfcustodya.htm)

(10) [Custodian Agreement Amendment (letter) dated 03/25/2025 (Principal Capital Appreciation Select ETF) - Filed as Exhibit 99.(g)(10) on 06/09/2025 (Accession No. 0001572661-25-000081)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000081/custodianagreementamendmen.htm)

(h) Other
 Material Contracts

(1) a. [Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 05/21/2015 - Filed as Exhibit 99.(h)(i) on 10/27/2015 (Accession No. 0001572661-15-000049)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000049/etf-transferagencyagrmtx05.htm)

b. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 03/11/2016 (Principal Shareholder Yield Index ETF and Principal Price Setters Index ETF) - Filed as Exhibit 99.(h)(i)b on 05/08/2016 (Accession No. 0001572661-16-000132)](https://www.sec.gov/Archives/edgar/data/1572661/000157266116000132/etfltramdttotransagcyagrmt.htm)

c. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 06/28/17 (Principal Spectrum Preferred Securities Active ETF) - Filed as Exhibit 99.(h)(i)c on 08/29/2017 (Accession No. 0001572661-17-000205)](https://www.sec.gov/Archives/edgar/data/1572661/000157266117000205/ex99hic-ltramendtransferag.htm)

d. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 09/29/2017 (Principal U.S. Mega-Cap Multi-Factor Index ETF) - Filed as Exhibit 99.(h)(i)g on 04/13/2018 (Accession No. 0001572661-18-000056)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000056/ex99hig-etfxtransferagenta.htm)

e. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 04/18/2018 (Principal Investment Grade Corporate Active ETF) - Filed as Exhibit 99.(h)(i)h on 08/31/2018 (Accession No. 0001572661-18-000128)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000128/ex99hih-etfxtransferagenta.htm)

f. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 06/15/2020 (Principal Spectrum Tax-Advantaged Dividend Active ETF) - Filed as Ex 99.(h)(i)k on 09/02/2020 (Accession No. 0001572661-20-000197)](https://www.sec.gov/Archives/edgar/data/1572661/000157266120000197/ex99hik-ltramendtransf.htm)

g. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 05/18/2022 - Filed as Exhibit 99.(h)(2)m on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99h2m-ltramendtransferag.htm)

h. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 07/12/2023 - Filed as Exhibit 99.(h)(1)k on 10/26/2023 (Accession No. 0001572661-23-000177)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000177/ex99h1k-ltramendtransferag.htm)

i. [Letter Amendment to Transfer Agency and Service Agreement with State Street and Trust Company dated 04/12/2024 - Filed as Exhibit 99.(h)(1)i on 08/16/2024 (Accession No. 0001572661-24-000036)](https://www.sec.gov/Archives/edgar/data/1572661/000157266124000036/ex99h1i-ltamendtransferage.htm)

j. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 11/05/2024 (Principal International Equity ETF) - Filed as Exhibit 99.(h)(1)j on 01/08/2025 (Accession No. 0001572661-25-000006)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000006/ex99h1jpetfstatestreettaan.htm)

k. [Letter Amendment to Transfer Agency and Service Agreement with State Street Bank and Trust Company dated 03/25/2025 (Principal Capital Appreciation Select ETF) - Filed as Exhibit 99.(h)(1)k on 06/09/2025 (Accession No. 0001572661-25-000081)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000081/letteramendmenttotransfera.htm)

(2) [Form of Principal Rule 12d1-4 Fund of Funds Investment Agreement - Filed as Exhibit 99.(h)(3) on 02/09/2022 (Accession No. 0001683863-22-000594)](https://www.sec.gov/Archives/edgar/data/1572661/000168386322000594/f10752d2.htm)

(3) [Powers of Attorney for Beckman, Bhatia, Damos, Dyer, Grieb, Hymes, Kassam, Lattimer, McCullum, McMillan and Swank dated 03/10/2026 - Filed as Exhibit 99.(h)(3) on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/petf-powerofattorneyall031.htm)

(i) [Legal Opinion \*](tm264493d2_ex99-xi.htm)

(j) Other
 Opinions - Not Applicable

(k) Omitted
 Financial Statements - Not Applicable

(I) Initial
 Capital Agreements

(1) [Letter of Investment Intent dated 05/21/2015 (Principal EDGE Active Income ETF) - Filed as Exhibit 99.(l) on 06/18/2015 (Accession No. 0001572661-15-000022)](https://www.sec.gov/Archives/edgar/data/1572661/000157266115000022/etf-investmentletter.htm)

(2) [Letter of Investment Intent dated 03/21/2016 (Principal Shareholder Yield Index ETF and Principal Price Setters Index ETF) - Filed as Exhibit 99.(l)(ii) on 05/05/2016 (Accession No. 0001572661-16-000132)](https://www.sec.gov/Archives/edgar/data/1572661/000157266116000132/invltrdtd032116.htm)

(3) [Letter of Investment Intent dated 07/10/2017 (Principal Spectrum Preferred Securities Active ETF) - Filed as Exhibit 99(l)(vi) on 10/10/2017 (Accession No. 0001572661-17-000265)](https://www.sec.gov/Archives/edgar/data/1572661/000157266117000265/ex99lvi-etfinvestltrspectr.htm)

(4) [Letter of Investment Intent dated 10/10/2017 (Principal U.S. Mega-Cap Multi-Factor Index ETF) - Filed as Exhibit 99(l)(viii) on 10/10/2017 (Accession No. 0001572661-17-000265)](https://www.sec.gov/Archives/edgar/data/1572661/000157266117000265/ex99lviii-etfinvestltrusme.htm)

(5) [Letter of Investment Intent dated 04/18/2018 (Principal Investment Grade Corporate Active ETF) - Filed as Exhibit 99.(l)(xi) on 08/31/2018 (Accession No. 0001572661-18-000128)](https://www.sec.gov/Archives/edgar/data/1572661/000157266118000128/ex99lxi-etfinvestltrinvest.htm)

(6) [Letter of Investment Intent dated 06/16/2020 (Principal Spectrum Tax-Advantaged Dividend Active ETF) - Filed as Exhibit 99.(l)(xii) on 09/02/2020 (Accession No. 0001572661-20-0001572661)](https://www.sec.gov/Archives/edgar/data/1572661/000157266120000197/ex99lxii-ltrofinvestme.htm)

(7) [Letter of Investment Intent dated 05/17/2022 (Principal Real Estate Active Opportunities ETF) - Filed as Exhibit 99.(l)15 on 06/09/2022 (Accession No. 0001572661-22-000124)](https://www.sec.gov/Archives/edgar/data/1572661/000157266122000124/ex99l15-letterofinvestment.htm)

(8) [Letter of Investment Intent dated 07/12/2023 (Principal Focused Blue Chip ETF) - Filed as Exhibit 99.(l)(10) on 10/26/2023 (Accession No. 0001572661-23-000177)](https://www.sec.gov/Archives/edgar/data/1572661/000157266123000177/ex99l15-letterofinvestment.htm)

(9) [Letter of Investment Intent dated 11/05/2024 (Principal International Equity ETF) - Filed as Exhibit 99.(l)(9) on 01/08/2025 (Accession No. 0001572661-25-000006)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000006/ex99l9investmentletterinte.htm)

(10) [Letter of Investment Intent dated 03/25/2025 (Principal Capital Appreciation Select ETF) - Filed as Exhibit 99.(l)(10) on 06/09/2025 (Accession No. 0001572661-25-000081)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000081/letterofinvestmentintentda.htm)

(m) Rule
 12b-1 Plan

(1) [Form of Distribution Plan and Agreement Pursuant to Rule 12b-1 with respect to shares of the Registrant - Filed as Exhibit 99.(m)(1) on 10/25/2024 (Accession No. 0001572661-24-000099)](https://www.sec.gov/Archives/edgar/data/1572661/000157266124000099/a202411petfformofdistribut.htm)

(2) [Form of Distribution Plan and Agreement pursuant to Rule 12b-1 with respect to shares of the Registrant dated 03/25/2025 (Principal Capital Appreciation Select ETF) - Filed as Exhibit 99.(m)(2) on 06/09/2025 (Accession No. 0001572661-25-000081)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000081/formofpetf12b-1agreementpr.htm)

(n) Rule
 18f-3 Plan - Not Applicable

(o) Reserved

(p) Code
 of Ethics

(1) [Code of Ethics of Registrant, Principal Global Investors, LLC, and Principal Real Estate Investors, LLC dated February 13, 2025 – Filed as Exhibit 99.(p)(1) on 10/27/2025 (Accession No. 0001572661-25-000149)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000149/codeofethics-pgieff111124r.htm)

(2) [Code of Ethics of Spectrum Asset Management, Inc. dated October 2024 – Filed as Exhibit 99.(p)(2) on 10/27/2025 (Accession No. 0001572661-25-000149)](https://www.sec.gov/Archives/edgar/data/1572661/000157266125000149/spectrumcoeoct2024.htm)

\* Filed herein. <br> \*\* To be filed by amendment.

**Item 29. Persons Controlled by or Under Common Control with the Fund.**

The Registrant does not control and is not under common control with any person.

**Item 30. Indemnification.**

The Registrant is organized as a Delaware statutory trust and is operated pursuant to an Agreement and Declaration of Trust dated as of March 5, 2013 (the "Trust Instrument") and the Registrant's Bylaws dated as of June 9, 2020 ("Bylaws"). The Trust Instrument and Bylaws permit the Registrant to indemnify its trustees and officers under certain circumstances. Such indemnification, however, is subject to the limitations imposed by the Securities Act of 1933, as amended ("1933 Act"), and the Investment Company Act of 1940, as amended.

Article IX (sections 9.2, 9.3, and 9.6) of the Registrant's Trust Instrument provides that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Indemnification.</u> The Trust shall indemnify and advance expenses to any person who is or was a Trustee, officer or employee of the Trust, or a trustee, director, officer or employee of any other entity which he serves or served at the request of the Trust and in which the Trust has or had any interest as a shareholder, creditor, or otherwise (each of such persons a "Covered Person") to the maximum extent permitted by Delaware law and the 1940 Act, against all liabilities and reasonable expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and expenses including reasonable accountants' and counsel fees) reasonably incurred in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal or derivative, before any court or administrative or legislative body, in which he may be involved or with which he may be threatened, while as a Covered Person or thereafter, by reason of being or having been such a Covered Person, except that no Covered Person shall be indemnified against any liability to the Trust or its Shareholders to which such Covered Person would otherwise be subject by reason of bad faith, willful misfeasance, gross negligence or reckless disregard of his duties involved in the conduct of such Covered Person's office. The payment of expenses in advance of the final disposition of an action, suit or proceeding as provided for herein may be made on terms fixed by the Board of Trustees and conditioned upon receipt of an undertaking by or on behalf of the Covered Person to repay to the Trust any amounts so paid if it is ultimately determined that indemnification of such expenses is not authorized under this Section 9.2. No amendment of this Declaration of Trust or repeal of any of the provisions hereof shall limit or eliminate the right of indemnification provided by this Section 9.2 with respect to acts or omissions occurring prior to such amendment or repeal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Indemnification Not Exclusive</u>. The right of indemnification provided by this Article IX shall not be exclusive of or affect any other rights to which any Covered Person may be entitled. As used in this Article IX, "Covered Person" shall include such person's heirs, executors and administrators, and a "disinterested, non-party Trustee" is a Trustee who is neither an Interested Person of the Trust nor a party to the proceeding in question.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Shareholders</u>. In case any Shareholder or former Shareholder of any Series or Class shall be held to be personally liable solely by reason of his being or having been a Shareholder of such Series or Class and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets belonging to the applicable Series or Class to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by the Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Series or Class and satisfy any judgment thereon from the assets of the Series or Class. The indemnification and reimbursement required by the preceding sentence shall be made only out of assets of the one or more Series or Classes whose Shares were held by said Shareholder at the time the act or event occurred which gave rise to the claim against or liability of said Shareholder. The rights accruing to a Shareholder under this Section shall not impair any other right to which such Shareholder may be lawfully entitled, nor shall anything herein contained restrict the right of the Trust or any Series or Class to indemnify or reimburse a Shareholder in any appropriate situation even though not specifically provided herein.

Article 9 of the Bylaws provides that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <u>Right to Indemnification</u>. Subject to the exceptions and limitations contained in Section 9.02, every person who is or was a Trustee, officer or employee of the Trust, including persons who serve or served at the request of the Trust as directors, trustees, officers or employees of another organization in which the Trust has or had an interest as a shareholder, creditor or otherwise (each, a "Covered Person"), shall be indemnified by the Trust to the maximum extent permitted by law against all liability and reasonable expenses incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his or her being or having been such a director, trustee, officer or employee and against amounts paid or incurred by him in settlement thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <u>Exceptions</u>. No indemnification shall be provided hereunder to a Covered Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) for
 any liability to the Trust or its shareholders arising out of a final adjudication by the
 court or other body before which the proceeding was brought that the Covered Person engaged
 in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved
 in the conduct of his office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with
 respect to any matter as to which the Covered Person shall have been finally adjudicated
 not to have acted in good faith in the reasonable belief that his or her action was in the
 best interests of the Trust; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in
 the event of a settlement or other disposition not involving a final adjudication (as provided
 in paragraph (a) or (b) of this Section 9.02) and resulting in a payment by a Covered Person,
 unless there has been either a determination that such Covered Person did not engage in willful
 misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in
 the conduct of his office by the court or other body approving the settlement or other disposition,
 or a reasonable determination, based on a review of readily available facts (as opposed to
 a full trial-type inquiry), that he did not engage in such conduct, such determination being
 made by: (i) a vote of a majority of the Disinterested Trustees (as such term is defined
 in Section 9.04) acting on the matter; or (ii) a written opinion of independent legal counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.03 <u>Advancement of Expenses</u>. Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding subject to a claim for indemnification under this Article 9 shall be advanced by the Trust prior to final disposition thereof upon receipt of an undertaking by or on behalf of the Covered Person to repay such amount if it is ultimately determined that he is not entitled to indemnification under this Article 9, provided that either: (a) such undertaking is secured by a surety bond or some other appropriate security or the Trust shall be insured against losses arising out of any such advances; or (b) a majority of the Disinterested Trustees acting on the matter or independent legal counsel in a written opinion shall determine, based upon a review of the readily available facts (as opposed to the facts available upon a full trial), that there is a reason to believe that the Covered Person ultimately will be found entitled to indemnification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.04 <u>Certain Defined Terms Relating to Indemnification</u>. For purposes of this Article 9: (a) "liability and reasonable expenses" shall include hut not be limited to reasonable counsel fees and disbursements, amounts of any judgment, fine or penalty, and reasonable amounts paid in settlement; (b) "claim, action, suit or proceeding" shall include every such claim, action, suit or proceeding, whether civil or criminal, derivative or otherwise, administrative, judicial or legislative, any appeal relating thereto, and

shall include any reasonable apprehension or threat of such a claim, action, suit or proceeding; (c) a "Covered Person" shall include such person's heirs, executors and administrators; and (d) a "Disinterested Trustee" shall mean a Trustee (i) who is not an "Interested Person" (as defined in the 1940 Act) of the Trust (including anyone, as such Disinterested Trustee, who has been exempted from being an Interested Person by any rule, regulation or order of the SEC), and (ii) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Each trustee has entered into an indemnification agreement with the Registrant. In addition, the interested trustees each have available indemnifications from Principal Financial Group, Inc., the parent company of his/her employer, the Registrant's sponsor.

**Item 31. Business or Other Connections of Investment Advisor**

Principal Global Investors, LLC ("PGI") serves as investment advisor for Principal Exchange-Traded Funds ("PETF"). PGI also serves as investment advisor and administrator for Principal Funds, Inc. ("PFI"), Principal Variable Contracts Funds, Inc. ("PVC"), Principal Real Asset Fund ("PRA") and Principal Private Credit Fund ("PPCF"). PGI is part of a diversified global asset management organization that utilizes specialized investment teams and affiliates to provide institutional investors and individuals with diverse investment capabilities, including fixed income, equities, real estate, currency, asset allocation, and stable value. A complete list of the officers and directors of the investment advisor, PGI, are set out below.

PGI is an indirect wholly-owned subsidiary of Principal Financial Group, Inc. (together with its affiliates, "Principal<sup>®</sup>"), the headquarters of which is located at 711 High Street, Des Moines, Iowa. Many of the individuals listed below support Principal<sup>®</sup> in various capacities, in some cases as directors or officers, in addition to their role with PGI. The below list includes individuals (designated by an \*), who serve as officers and board members of the Registrant. For these individuals, the information as set out in the Statement of Additional Information (See Part B) under the caption "Additional Information Regarding Board Members and Officers" is incorporated by reference.

---

| | | |
|:---|:---|:---|
|  | **NAME** | **OFFICE WITH INVESTMENT ADVISOR (PGI)** |
|  | Patricio Abal | Counsel |
|  | Christopher K. Agbe-Davies | Vice President, Associate General Counsel, and Assistant Secretary |
| \* | Kamal Bhatia | Director, President, and Chief Executive Officer - Principal Asset Management |
|  | Suzanne Cohrs | Managing Director - Public Markets Strategy |
|  | Daniel R. Coleman | Chief Investment Officer - Edge Asset Management |
|  | Anne Cook | Associate General Counsel |
|  | Ramona Dessouki | Executive Director and Chief Marketing Officer & Digital Sales |
| \* | George Djurasovic | Vice President - Principal Asset Management General Counsel |
|  | Jen Dulski | Counsel |
|  | Todd E. Everett | Executive Managing Director and Global Head of Private Markets - Principal Asset Management |
|  | Michael J. Goosay | Executive Managing Director and Chief Investment Officer - Global Head of Fixed Income |
|  | Melinda L. Hanrahan | Managing Director - Global Equities |
|  | Angela Harrison | Counsel |
|  | Corrin Hatala | Counsel |

---

---

| | | |
|:---|:---|:---|
|  | **NAME** | **OFFICE WITH INVESTMENT ADVISOR (PGI)** |
|  | Maggie Hibbs | Counsel |
|  | Jill M. Hittner | Director and Executive Managing Director - Chief Financial Officer - Principal Asset Management |
|  | Todd A. Jablonski | Executive Managing Director - Global Head of Multi Asset & Quant, Principal Asset Management |
|  | Jaime M. Kiehn | Managing Director - Product Specialist |
|  | Chester Knight | Managing Director - Financial Analysis/Planning |
|  | Justin T. Lange | Vice President, Chief Compliance Officer - Principal Asset Management |
| &nbsp;&nbsp;&nbsp;&nbsp;\* | Laura B. Latham | Assistant General Counsel |
|  | Steve Lempa | Chief Risk Officer - Principal Asset Management |
| \* | Ming Lodh | Director – Investment Risk Management |
|  | George P. Maris | Executive Managing Director - Chief Investment Officer - Global Head of Equities |
|  | Kenneth A. McCullum | Director |
|  | Adrienne L. McFarland | Associate General Counsel and Secretary |
|  | Amy M. McNally | Global Head Risk Management - PGI |
|  | Terri Messina | Managing Director - Global Investment Operations |
| \* | David P. Michalik | Counsel |
|  | Everett S. Miles | Vice President - Corporate Strategy and Development |
|  | Karl (Bill) W. Nolin | Chief Investment Officer - Aligned Investors |
|  | Mike Oppold | Senior Director - Accounting and Finance |
| \* | Deanna Y. Pellack | Counsel |
|  | Colin D. Pennycooke | Assistant General Counsel |
|  | Markham Penrod | Chief Compliance Officer - North America |
|  | Matt Peron | Managing Director - Deputy Chief Investment Officer - Equities |
|  | Darshini Reddivari | Counsel |
| \* | Teri R. Root | Chief Compliance Officer - Funds |
|  | Kelly D. Rush | Chief Investment Officer - Global Real Estate Securities |
|  | Scott M. Sailer | Vice President - Treasurer & Corporate Chief Financial Officer |
|  | Charles M. Schneider | Counsel |
|  | Brenda Scholten | Assistant Vice President and Chief Accounting Officer |
| \* | Michael Scholten | Assistant Vice President and Actuary |
| \* | Adam U. Shaikh | Associate General Counsel |
|  | Jennifer Shields | Assistant General Counsel |
| \* | John L. Sullivan | Assistant General Counsel |
|  | Rob Susman | Managing Director - Global Head of Equities Research |
| \* | Barbara Wenig | Executive Managing Director - Chief Business Officer - Principal Asset Management |
|  | Brant Wong | Executive Managing Director - Head of Retirement |

---

**Item 32. Principal Underwriters.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) ALPS
 Distributors, Inc. acts as the distributor for the Registrant and the following investment
 companies:

---

| | |
|:---|:---|
| 1290 Funds | Graniteshares ETF Trust |
| 1WS Credit Income Fund | Hartford Funds Exchange-Traded Trust |
| Aberdeen Income Credit Strategies Fund | Heartland Group, Inc. |
| abrdn ETFs | Investment Managers Series Trust II (AXS-Advised Funds) |
| abrdn Funds | Investment Managers Series Trust II (Alternative Access-Advised Fund) |
| Abrdn Global Dynamic Dividend Fund | Janus Detroit Street Trust |
| abrdn Global Premier Properties Fund | Lattice Strategies Trust |
| abrdn Income Credit Strategies Fund | Litman Gregory Funds Trust |
| Accordant ODCE Index Fund | Longleaf Partners Funds Trust |
| Alpha Alternative Assets Fund | Manager Directed Portfolios (Spyglass Growth Fund) |
| ALPS Series Trust | Meridian Fund, Inc. |
| Alternative Credit Income Fund | Natixis ETF Trust |
| Apollo Diversified Credit Fund | Natixis ETF Trust II |
| Apollo Diversified Real Estate Fund | New York Life Investments Active ETF Trust |
| AQR Funds | New York Life Investments ETF Trust |
| Arrowmark Financial Corp. | Opportunistic Credit Interval Fund |
| Axonic Alternative Income Fund | PRIMECAP Odyssey Funds |
| Axonic Funds | Principal Exchange-Traded Funds |
| BBH Trust | RiverNorth Funds |
| Bluerock High Income Institutional Credit Fund | RiverNorth Opportunities Fund, Inc. |
| Bluerock Total Income+ Real Estate Fund | RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. |
| Bridge Builder Trust | RiverNorth Opportunistic Municipal Income Fund, Inc. |
| Cambria ETF Trust | RiverNorth Managed Duration Municipal Income Fund, Inc. |
| CION Ares Diversified Credit Fund | RiverNorth Flexible Municipal Income Fund, Inc. |
| CION Grosvenor Infrastructure Fund | RiverNorth Capital and Income Fund, Inc. |
| Columbia ETF Trust | RiverNorth Flexible Municipal Income Fund II, Inc. |
| Columbia ETF Trust I | RiverNorth Managed Duration Municipal Income Fund II, Inc. |
| Columbia ETF Trust II | SPDR Dow Jones Industrial Average ETF Trust |
| Columbia Seligman Premium Technology Growth Fund, Inc. | SPDR S&P 500 ETF Trust |
| CRM Mutual Fund Trust | SPDR S&P MidCap 400 ETF Trust |
| DBX ETF Trust | Sphinx Opportunity Fund II |
| Diameter Dynamic Credit Fund | Sprott Funds Trust |
| Eagle Point Defensive Income Trust | The Arbitrage Funds |
| Eagle Point Enhanced Income Trust | Themes ETF Trust |
| EA Series Trust (Cambria Series) | Tidal Trust II (Cambria Series) |
| ETF Series Solutions (Vident Series) | Thornburg ETF Trust |
| Financial Investors Trust | Thrivent ETF Trust |
| Firsthand Funds | Trust for Professional Managers (PT Asset Management Series) |
| FS Credit Income Fund | USCF ETF Trust |
| FS Credit Opportunities Corp. | USVC Venture Capital Access Fund |
| FS MVP Private Markets Fund | Valkyrie ETF Trust II |
| Gemcorp Commodities Alternative Products Fund | Wasatch Funds |
| Goehring & Rozencwajg Investment Funds | Wilmington Funds |

---

Goldman Sachs ETF Trust X-Square Balanced Fund <br> Goldman Sachs ETF Trust II X-Square Series Trust

&nbsp;&nbsp;&nbsp;&nbsp;(b) To
 the best of Registrant's knowledge, the directors and executive officers of ALPS Distributors,
 Inc., are as follows:

---

| | | |
|:---|:---|:---|
| **NAME <sup>(1)</sup>** | **POSITIONS AND OFFICES**<br> **WITH PRINCIPAL UNDERWRITER (ALPS)** | **POSITIONS AND OFFICES**<br> **WITH THE REGISTRANT** |
| Stephen J. Kyllo | President, Chief Operating Officer, Director, Chief Compliance Officer |  |
| Brian Schell <sup>(2)</sup> | Vice President & Treasurer |  |
| Eric Parsons | Vice President, Controller and Assistant Treasurer |  |
| Jason White <sup>(3)</sup> | Secretary |  |
| Richard C. Noyes | Senior Vice President, General Counsel, Assistant Secretary |  |
| Eric Theroff <sup>(4)</sup> | Assistant Secretary |  |
| Adam Girard <sup>(5)</sup> | Tax Officer |  |
| Liza Price | Vice President, Managing Counsel |  |
| Jed Stahl | Vice President, Managing Counsel |  |
| James Stegall | Vice President |  |
| Hilary Quinn | Vice President |  |

---

<sup>(1)</sup> Except as otherwise noted, the principal business address for each of the above directors and executive officers is 1290 Broadway, Suite 1000, Denver, Colorado 80203.

<sup>(2)</sup> The principal business address for Mr. Schell is 100 South Wacker Drive, 19th Floor, Chicago, IL 60606.

<sup>(3)</sup> The principal business address for Mr. White is 4 Times Square, New York, NY 10036.

<sup>(4)</sup> The principal business address for Mr. Theroff is 1055 Broadway Boulevard, Kansas City, MO 64105

<sup>(5)</sup> The principal business address for Mr. Girard is 80 Lamberton Road, Windsor, CT 06095

&nbsp;&nbsp;&nbsp;&nbsp;(c) Not
 applicable.

**Item 33. Location of Accounts and Records.**

All accounts, books, and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules promulgated thereunder are maintained at the offices of the Registrant and its Investment Advisor (PGI): 801 Grand Avenue, Des Moines, Iowa 50392.

**Item 34. Management Services.**

Not applicable.

**Item 35. Undertakings.**

None.

---

| | |
|:---|:---|
| **Exhibit Index:** | |
| [Legal Opinion](tm264493d2_ex99-xi.htm) | [Exhibit (i)](tm264493d2_ex99-xi.htm) |

---

---

| |
|:---|
| **SIGNATURES** |
| Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Fund certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Des Moines and State of Iowa, on the 20th day of April, 2026. |
| Principal Exchange-Traded Funds<br> &nbsp;&nbsp;&nbsp;&nbsp;(Registrant)<br>/s/ Kamal Bhatia<br> _____________________________________<br> Kamal Bhatia<br> Trustee, President, and Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. | Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. | Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. |
| **Signature** | **Title** | **Date** |
| /s/ Kamal Bhatia<br> __________________________<br> Kamal Bhatia  | Trustee, President, and Chief Executive Officer<br> (Principal Executive Officer) | April 20, 2026 |
| /s/ Michael Scholten<br> __________________________<br> Michael Scholten  | Chief Financial Officer<br> (Principal Financial Officer) | April 20, 2026 |
| /s/ Megan Hoffmann<br> __________________________<br> Megan Hoffmann  | Vice President and Treasurer<br> (Principal Accounting Officer) | April 20, 2026 |
| (Daniel J. Beckman)\*<br> __________________________<br> Daniel J. Beckman | Trustee | April 20, 2026 |
| (Craig Damos)\*<br> __________________________<br> Craig Damos  | Trustee | April 20, 2026 |
| (Katharin S. Dyer)\*<br> __________________________<br> Katharin S. Dyer  | Trustee | April 20, 2026 |
| (Frances P. Grieb)\*<br> __________________________<br> Frances P. Grieb  | Trustee | April 20, 2026 |
| (Victor L. Hymes)\*<br> __________________________<br> Victor L. Hymes  | Trustee | April 20, 2026 |
| (Sharmila C. Kassam)\*<br> __________________________<br> Sharmila C. Kassam | Trustee | April 20, 2026 |
| (Padelford L. Lattimer)\*<br> __________________________<br> Padelford L. Lattimer  | Trustee | April 20, 2026 |

---

---

| | | |
|:---|:---|:---|
| (Kenneth A. McCullum)\*<br> __________________________<br> Kenneth A. McCullum  | Trustee | April 20, 2026 |
| (Karen McMillan)\*<br> __________________________<br> Karen McMillan  | Trustee | April 20, 2026 |
| (Thomas A. Swank)\*<br> __________________________<br> Thomas A. Swank  | Trustee | April 20, 2026 |
|  | /s/ Kamal Bhatia<br> _____________________________________<br> Kamal Bhatia<br> Attorney-in-Fact<br>| April 20, 2026 |
| [\* Pursuant to Powers of Attorney Filed as Exhibit 99.(h)(3) on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/petf-powerofattorneyall031.htm) | [\* Pursuant to Powers of Attorney Filed as Exhibit 99.(h)(3) on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/petf-powerofattorneyall031.htm) | [\* Pursuant to Powers of Attorney Filed as Exhibit 99.(h)(3) on 04/16/2026 (Accession No. 0001572661-26-000024)](https://www.sec.gov/Archives/edgar/data/1572661/000157266126000024/petf-powerofattorneyall031.htm) |

---

## Ex-99.(I)

**Exhibit 99.(i)**

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| | |
|:---|:---|
| ![](tm264493d2_ex99h3img01.jpg) | **Dechert LLP**<br> Three Bryant Park<br> 1095 Avenue of the Americas<br> New York, NY 10036-6797<br> +1 212 698 3500 Main<br> +1 212 698 3599 Fax |

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April 20, 2026

Principal Exchange-Traded Funds

711 High Street

Des Moines, IA 50392

Re: Principal Exchange-Traded Funds

File Nos. 333-201935 and 811-23029

Post-Effective Amendment No. 123 to the Registration Statement on Form N-1A

Ladies and Gentlemen:

We have acted as special counsel to Principal Exchange-Traded Funds (the "Registrant"), a Delaware statutory trust, in connection with amendments to and restatements of the Registrant's registration statement on Form N-1A under the Securities Act of 1933, as amended (the "1933 Act"), and under the Investment Company Act of 1940, as amended (the "Registration Statement"), relating to the issuance and sale by the Registrant of its authorized shares, divided into several Series ("Shares").

This opinion is limited to the Delaware Statutory Trust Act statute, and we express no opinion with respect to the laws of any other jurisdiction or to any other laws of the State of Delaware. Further, we express no opinion as to compliance with any state or federal securities laws, including the securities laws of the State of Delaware.

We have examined such governmental and corporate certificates and records as we deemed necessary to render this opinion, and we are familiar with the Registrant's Agreement and Declaration of Trust ("Declaration of Trust") and Amended and Restated By-Laws, each as amended to date. In addition, in rendering this opinion, insofar as it relates to the valid existence of the Registrant, we have relied solely on a certificate of the Secretary of State of the State of Delaware, dated as of April 17, 2026, and this opinion is limited accordingly and is rendered as of the date of such certificate.

In rendering this opinion we have assumed, without independent verification, (i) the due authority of all individuals signing in representative capacities and the genuineness of signatures; (ii) the authenticity, completeness and continued effectiveness of all documents or copies furnished to us; and (iii) that the facts contained in the instruments and certificates or statements of public officials, officers and representatives of the Registrant on which we have relied for the purposes of this opinion are true and correct.

Based upon the foregoing, we are of the opinion that the Shares of the Series proposed to be sold pursuant to Post-Effective Amendment No. 123 to the Registration Statement have been duly

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| | |
|:---|:---|
| ![](tm264493d2_ex99h3img01.jpg) | April 20, 2026<br> Page 2 |

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authorized for issuance and, when issued and delivered against payment therefor in accordance with the terms, conditions, requirements and procedures described in the Registration Statement, will be validly issued and, subject to the qualifications set forth in the Declaration of Trust, fully paid and non-assessable beneficial interests in such Series. In this regard, we note that, pursuant to Section 4.1(x) of Article IV of the Declaration of Trust, the Trustees have the power and authority to cause each Shareholder, or each Shareholder of any particular Series of Class, to pay directly, in advance or arrears, for administrative and other fees and charges of the Registrant's custodian or transfer, shareholder servicing or similar agent, an amount fixed from time to time by the Trustees, by setting off such charges due from such Shareholder from declared but unpaid dividends owed such Shareholder and/or by reducing the number of Shares in the account of such Shareholder by that number of full and/or fractional Shares which represents the outstanding amount of such charges due from such Shareholder.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to be filed with the Securities and Exchange Commission, and to the use of our name in the Registration Statement, unless and until we revoke such consent. In giving such consent, however, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act or the rules and regulations thereunder.

Very truly yours,

&nbsp;&nbsp;/s/ Dechert LLP